BUSINESS NEWS HEADLINES MAY 21

Contractors to be chosen for Long Thanh International Airport resettlement area

 
     

BUSINESS NEWS HEADLINES MAY 21
A 280ha land plot for building the Loc An-Binh Son resettlement area for households who will move to make way for the Long Thanh International Airport in Dong Nai Province. — Photo thanhnien.vn

 
 
 
 The People’s Committee of Dong Nai Province has approved a proposal to select the contractor for building technical infrastructure in a resettlement area in Loc Son Commune, Binh Son District.

It is part of the land acquisition for the Long Thanh International Airport.

The total value of the packages is over VND1.03 trillion (US$44.7 million).

The value of package No.24 for the construction and installation of medium- and low-voltage electrical systems, a transformer station and placement of telecommunication cables for the Loc Son-Binh An resettlement area, worth VND206.4 billion ($8.9 million), has attracted great attention from contractors.

There is also plenty of interest in the VND87.3 billion ($3.7 million) package No.35 for building technical infrastructure for Zone 9 and VND72.4 billion ($3.1 million) package No.27 for technical infrastructure for Zone 1.

Nguyen Anh Tuan, deputy director of the province’s construction investment project management board, told Dau tu (Investment Review) newspaper that the selection of contractors for the above packages would be done through open bidding on the national bidding portal.

The bids would be conducted under the form of “single-stage two-envelop” method (conducting twice, once each for technical and financial proposals), to reduce the time taken to award bids, he said.

“The Management Board is completing the bidding documents and basic design documents. As soon as the bidding document is approved, we will notify and release it.”

Pham Van Cuong, director of Bang Duong Investment, Construction and Trading Co. Ltd of HCM City, said Dong Nai’s plan to award contracts for 15 large packages at the Loc An-Binh Son resettlement area was an attractive opportunity for contractors amid the tough times caused by the Covid-19 pandemic.

“Online bidding will make the process more competitive and transparent. Contractors with real capacity will have a high chance of winning bids.”

Doi Hung Cuong, deputy general director of Cuong Thuan Idico Development Investment JSC, said his company was keen to make bids.

“We keep abreast of information related to the bidding and are well prepared to participate. We determined this is an open opportunity, but the competition is also fierce because the bids this time are very transparent.”

Tuan said the project management board had prepared carefully and hopes it would find qualified contractors who would provide the quality the packages require.

Loc An-Binh Son is one of two resettlement areas to be built to relocate people whose lands and houses have been acquired to build the airport.

The first 700 households are set to receive their land lots in August.

More than 5,000ha of land are required for the airport and 364ha for the two resettlement sites.

Some 4,800 households and 26 organisations are expected to relocate. Around 70 per cent of the 15,500 people who will have to move are farmers, and the rest are rubber plantation workers and workers in other sectors.

The feasibility study for the airport has been approved by the Government.

It is a key national project that would have a significant impact on the southern key economic region.

Once fully operational, it is expected to handle 100 million passengers and five million tonnes of freight annually.

In the first phase, a runway and one terminal along with required support works will be built to serve 25 million passengers and 1.2 million tonnes of cargo.

The first phase is expected to be completed in 2025.

Vietnam jumps 14 places in Open Budget Survey

The Open Budget Survey (OBS) 2019 from the International Budget Partnership (IBP) ranks Vietnam 77th out of 117 countries around the world, up 14 places against the previous survey in 2017, the Ministry of Finance reported on May 18.

The OBS is the world’s only independent and comparative assessment of the three pillars of public budget accountability - transparency, oversight, and public participation - and been conducted by IBP biannually since 2006.

Vietnam’s budget transparency scored 38 out of 100, an increase of 23 points compared to 2017. The average score globally was 45.

Vietnam scored 11 out of 100 for public participation and 74 out of 100 for budget oversight, up four points and two points, respectively, from 2017.

Vietnam increased the availability of budget information by publishing the Executive’s Budget Proposal, the Citizens Budget, and the Audit Report online and increasing the information provided in the In-Year Reports.

The language used in the Citizens Budget report was viewed as simple and easy for people to understand, thus increasing their participation in budget allocation and monitoring.

The country has so far published online seven out of eight budget documents: the Pre-Budget Statement, the Executive’s Budget Proposal, the Enacted Budget, the Citizens Budget, In-Year Reports, the Year-End Report, and the Audit Report, in a timely manner./.

Ministry moves to beef up production, exports

Vietnam has boosted exports to new markets over the last couple of months as part of solutions to tackle production and business difficulties and promote overseas shipments amid the COVID-19 pandemic, Minister of Industry and Trade Tran Tuan Anh has said.

In a recent interview with the Vietnam News Agency, Anh cited figures showing that in the first four months the country’s exports to America rose 22 percent year-on-year to 19 billion USD, including Canada 975 million USD (up 13 percent), Mexico 798 million USD (61 percent), Brazil 511 million USD (11 percent), and Chile 287 million USD (93 percent). Shipments to Argentina also rose 55 percent, Colombia 93 percent, Panama 73 percent, and Peru 82 percent.

Vietnam also recorded strong growth in exports to markets such as China, worth 9.35 billion USD (up 22.8 percent), Japan 5 billion USD (7.8 percent), and Australia 924 million USD (11.6 percent).

Markets with falling export revenue were primarily in Europe, which has been hit hard by COVID-19, he said, noting that exports during the period to the EU, including the UK, fell 5.7 percent from a year earlier to 9.61 billion USD.

Goods shipped to France totalled 771.6 million USD (down 19 percent), Italy 758.7 million USD (down 17.4 percent), Spain 551.6 million USD (down 6.4 percent), and the UK 1.28 billion USD (down 6.6 percent).

Anh said that due to the pandemic, many importers in the US and in the EU delayed delivery or even cancelled orders as cities were placed on lockdown and people were requested to stay at home.

Stricter quarantine measures have affected logistics and customs clearance activities while the suspension of goods entering and exiting countries has also hampered transactions between Vietnamese companies and partners, he added.

To bolster exports, the Ministry of Industry and Trade (MoIT) has been pushing ahead with solutions to seek new markets, he noted, adding that it is working to resume trade with China, the Republic of Korea (RoK), and Japan, and is preparing to enforce the EU-Vietnam Free Trade Agreement (EVFTA) once it takes effect.

The MoIT has submitted to the Government a draft action plan on implementing the EVFTA that clarifies targets, main tasks, and relevant parties.

Anh said the ministry has also built trade promotion plans; assisted businesses to boost exports, especially to markets that may soon have the outbreak under control, like the RoK, Japan, and China; and has pressed on with online trade promotion activities.

To opportunely provide market information and remove obstacles facing exporters, the MoIT has set up mechanisms to ensure smooth contact via the internet among trade counsellors, the ministry’s departments, business associations, local trade promotion centres, and enterprises nationwide, he said.

Highlighting the domestic market’s importance, he pointed out that the potential from the country’s 90 million people hasn’t been fully tapped into.

The MoIT has directed relevant agencies to devise concrete plans and solutions to promote domestic trade, especially when the COVID-19 pandemic is over, he said, adding that the local market needs to be considered an important driving force of growth in 2020 and subsequent years./.

EVN sees profit up 38 per cent in 2019

Vietnam Electricity (EVN) reported a pre-tax profit of VND12.5 trillion (US$535 million) last year, up 38 per cent year-on-year, the corporation announced on Thursday.

According to EVN’s consolidated financial statements, in 2019, the corporation recorded VND394.9 trillion in net revenue, up 17 per cent compared to the year prior.

Of the estimate, VND3.9 trillion came from financial revenue, 8.5 per cent more year-on-year. Revenue from joint ventures and associates totalled VND498 billion, down 13 per cent.

Regarding expenses, last year, selling expenses of the firm hit VND7.1 trillion, up 6.3 per cent. Administration expenses reached VND13.6 trillion, up 2.5 per cent.

Notably, financial expenses during the year decreased by 23 per cent, equivalent to more than VND6.5 trillion, to touch VND22.5 trillion.

By the end of 2019, the corporation's total assets exceeded VND721 trillion, a slight increase of 2.1 per cent after a year.

Cash and cash equivalents rose by 7 per cent to more than VND53.6 trillion. 

Steel producer enjoy profit growth despite virus crisis

Listed steel companies reported positive business results in the first quarter of this year despite the impacts of the COVID-19 pandemic.

Giant steel maker Hoa Phat Group (HPG) earned a revenue of VND19.5 trillion (US$835.9 million) in the quarter, up 28 per cent year-on-year.

The company reported post-tax profit of VND2.3 trillion in Q1, up 27 per cent against last year.

In addition to steel production, Hoa Phat also operates in other fields such as furniture, refrigeration, real estate and agriculture.

On the stock market, Hoa Phat shares (HPG) rose sharply after plummeting to the two-year bottom of VND6,200 per share at the end of March this year. Currently, HPG is being traded at around VND23,600 per share, approximately equal to the price recorded at the beginning of this year.

Hoa Phat’s market share of construction steel increased to 31.9 per cent in Q1 with an output of nearly 733,000 tonnes after excluding steel billets. Of the estimate, the amount of exported finished steel products reached 135,000 tonnes, up 74.8 per cent over the same period last year.

The provision of steel billets reached about 350,000 tonnes, mainly for export. The main export markets for steel billets are China and Southeast Asian countries. The company also provided the market with nearly 145,000 tonnes of steel pipes.

In March, Hoa Phat supplied a total of 486,000 tonnes of finished steel products and steel billets to domestic and foreign markets.

Another notable steel producer, Hoa Sen Group (HSG), also witnessed profit growth during the reviewed period.

The fiscal year of Hoa Sen Group differs from others, starting from July 1 and ending on June 30 of the following year. Therefore, the first quarter of this year is considered the second quarter of the 2019-20 fiscal year of Hoa Sen Group.

In the quarter, Hoa Sen’s revenue reached VND5.8 trillion, down by 16.3 per cent year-on-year. Finance expense dropped by 44 per cent to VND223 billion, selling expense decreased by 48 per cent to nearly VND504 billion and corporate management costs slumped by VND104 billion to VND142 billion.

Post-tax profit reported in the quarter was VND201 billion, nearly four times higher than the profit achieved in the same period last year.

In the first six months of the fiscal year 2019-2020, the group reached VND382 billion in post-tax profit, 3.2 times higher than the same period last year and completed more than 95 per cent of the profit target assigned for the whole year.

According to SSI Securities Co, these results were attributed to the improvement in gross profit margin. Inventories were kept at a safer level, which allowed the company to focus on profits instead of sales as in previous years.

These were the results achieved after one year of restructuring the distribution system, SSI said.

Other steel enterprises that reported profit growth in the first three months of this year was Vietnam Germany Steel Pipe JSC.

The company recorded profit of VND10.6 billion, up 3.8 per cent year-on-year. But this profit was less than one third of that reported in the previous quarter.

Notably, Nam Kim Steel JSC (NKG) suffered a loss of more than VND100 billion in Q1 last year but enjoyed post-tax profit of VND41.5 billion in the period this year.

Revenue in Q1 reached VND2.45 trillion, down by 16.7 per cent year-on-year, in which export revenue was VND1.13 trillion, contributing about 46 per cent of total revenue.

As for business activities, Nam Kim Steel has continuously strengthened its co-operation with SMC, an industry partner. The continuous increase of SMC's ownership ratio in Nam Kim as well as the use of SMC’s personnel in Nam Kim shows the close co-operation between these two units.

Recently, the two funds, Vietnam Enterprise Investments Limited and Amersham Industries Limited, sold a total of more than nine million shares of Nam Kim (NKG), reducing their ownership to less than nine million shares and no longer the major shareholders of the group.

Nam Kim plans to reach VND12 trillion in revenue this year, down slightly from the revenue achieved in 2019.

It also aims to collect VND200 billion in post-tax profit, a sharp increase compared to the profit achieved in 2019.

Consumption is expected to reach 700,000 tonnes, up 7.4 per cent compared to that of 670,000 tonnes achieved in 2019.

Thong Nhat Flat Steel Joint Stock Company (TNS) also enjoyed after-tax profit of VND1.6 billion in Q1 this year while suffering a loss of VND7.6 billion in the same period last year. 

Dong Nai Province trade edges down, surplus shoots up

Dong Nai’s foreign trade in the first four months of the year topped US$10.8 billion, 2.67 per cent down year-on-year but with the surplus shooting up by 43 per cent, according to the provincial Department of Industry and Trade.

Exports increased marginally to $6.1 billion while imports fell 7 per cent to $4.7 billion.

The surplus of almost $1.4 billion accounted for 43 per cent of the country’s surplus.

Items whose exports increased include footwear, machinery, pepper, and coffee.

Imports of machinery and equipment fell by 5 per cent, of raw plastic by 6 per cent and of chemicals by 10 per cent.

Exports to the US, Japan and South Korea increased, while those to China and Belgium declined. 

Good infrastructure gives a boost to real estate in eastern Ha Noi

The realty market in eastern Ha Noi is forecast to grow stronger than ever with important transport projects worth billions of dollars being built in the second half of the year.

According to experts, Ha Noi’s eastern area has grown strongly over the past ten years.

Transport projects, including the extended Highway No 5, the intersection of the Ring Road 3 with the Ha Noi- Hai Phong and Co Linh motorway, and phase 2 of Vinh Tuy Bridge, will be built from 2020-24. Phase 2 of Vinh Tuy Bridge will cost a total of VND2.5 trillion (US$106.5 million).

There are also plans for Tran Hung Dao Bridge, Giang Bien Bridge and Tu Lien Bridge in the area.

At the same time, as one of the largest realty developers in Viet Nam, Vingroup has recently asked for investment policies to build two overpasses at the crossroads between Dong Du and Duong Xa streets and a highway adjacent to Vinhomes Ocean Park.

When the two overpasses are finished, they will form a modern traffic axis, creating flexible traffic flow from all directions connecting the entire city with the east of Ha Noi.

Along with transport infrastructure, social infrastructure is also an advantage in the area. Facilities such as Aeon Mall, BigC Long Bien, Savico Megamall, Tokyo Medical Hospital and the upcoming Vincom Megamall Ocean Park will help attract residents.

The Prime Minister also adjusted the general plan for Ha Noi, focusing on modern urban areas, as well as technical and social infrastructure in the eastern region, concentrated in the districts of Dong Anh, Gia Lam, Yen Vien and Long Bien.

Dang Hung Vo, former deputy Minister of Natural Resources and Environment, said: "The development of the east is reasonable. The area has both mountains and rivers, so it will not be flooded."

Vo forecast it will become a "hot spot" for real estate investment as it has a large land fund and increasing infrastructure development.

Popular market research firms CBRE and Savills confirmed that real estate in the area has been attracting the attention of investors and customers, adding the market will witness many projects launching in the next couple of years.

According to investors, the east is a potential area connecting the capital city with the northern economic centres such as Hai Duong, Hai Phong and Quang Ninh.

Investor Nguyen Van Bach told Viet Nam News: “Compared with the west of the city, realty in the east has lower prices that are suitable for more people who look for a house in Ha Noi.” 

Over US$1.89b raised through G-bond auctions this year

The State Treasury has raised over VND43.5 trillion (US$1.89 billion) from Government bonds auctioned at the Ha Noi Stock Exchange since the beginning of this year.

At the latest auction, held this week, the State Treasury offered ten- and five-year bonds, each worth VND2 trillion, and bonds with a maturity of five to seven years, each valued at VND500 billion. Over VND4.39 billion worth was sold.

Up to VND2 trillion worth of ten-year bonds were sold at an annual interest rate of 2.75 per cent, or 0.12 per cent higher than at the previous auction.

Meanwhile, VND2 trillion was raised from 15-year bonds at 2.93 per cent per annum, the same as at the previous auction. An additional VND395 billion was also collected at a sub-auction of 15-year bonds.

The five- and seven-year bonds failed to attract any bidders.

Thaco to increase its ownership in HAGL Agrico to nearly 29 per cent

Truong Hai Auto Corporation (Thaco) is due to buy nearly 26 million shares of Hoang Anh Gia Lai Agriculture International JSC (HAGL Agrico or HNG).

If the transaction is successful, Thaco will raise its ownership in HNG from 26.29 per cent to 28.62 per cent, corresponding to more than 317 million shares.

Expected trading time lasts from May 19 to June 17 this year.

On the stock market, HNG shares are on the uptrend, currently at nearly VND14,000 (US$0.6) per share.

Recently at the quarterly restructure of the MSCI Frontier Markets Smallcap Indexes basket, HNG was one of two stocks in the Viet Nam market to be newly added.

If temporarily calculating HNG shares at the market price of VND14,000 per share, THACO will have to spend VND360 billion for the deal.

Nguyen Hung Minh, Deputy Chairman of the Board of Directors of Thaco, recently also increased his stake in HAGL Agrico. By May 8, Minh's holdings in the company increased to 2.74 per cent.

In Q1 this year, HNG’s revenue nearly doubled the same period last year, from VND340 billion to VND666 billion, of which the main contribution came from the sale of fresh fruits, increasing from VND218 billion to VND570 billion.

This is the first quarter HAGL Agrico has made profits after six consecutive quarters of large losses. In 2019, the company suffered a total loss of over VND2.4 trillion.

As of March 31, HNG has been borrowing nearly VND5 trillion from banks, mostly long-term loans. HNG has also borrowed over VND4.3 trillion from HAGL and Thaco, the two main shareholders of the company. 

HNX-listed firms see total profit up 4.8% in 2019

Listed companies on the Ha Noi Stock Exchange (HNX) reported their post-tax profits grew 4.8 per cent year-on-year to reach VND21.4 trillion (US$917 million) in 2019.

According to the northern market regulator, as of the end of April this year, 346 out of the total 359 companies on the HNX had released their 2019 audited financial statements.

Among the 346 reporting firms, 311 made profits with a total profit value of VND23.7 trillion, up 10.06 per cent year-on-year.

On a sector basis, five out of 11 sectors report profits in 2019, higher than the number of profitable sectors in 2018. Of the sectors, the oil and gas one posted the highest post-tax profit growth rate of 45.2 per cent, from VND808 billion to VND1.17 trillion.

 

Ranking second was the financial sector, with only 22 enterprises listed on the HNX, reporting post-tax profit growth rate of 17.3 per cent, reaching VND10.4 billion, accounting for 48.7 per cent of the total profit of the whole market.

The growth is attributed to expanding business operations, diversifying products and services, and attracting more customers. Among this group, banking and insurance businesses witnessed the strongest growth.

In the opposite direction, 36 companies reported losses, up 12.5 per cent over the previous year, with a total loss value in 2019 of negative VND2.24 trillion, up 109 per cent compared to 2018.

Six out of 11 industries reported higher losses compared to 2018, in which the industrial sector saw the highest loss from negative VND427 billion in 2018 to negative VND1.27 trillion in 2019.

Companies who published their audited financial statements five days, or more, later than the required date, have been made ineligible for margin lending and those who delay for over 15 days will be included in the warning list of HNX. 

Indonesian auto manufacturer seeks to survive amid COVID-19

PT Astra International, one of the leading automobile manufacturers in Indonesia, is looking to adopt new survival strategies, including cutting operational costs and increasing its digital presence, in the face of slumping vehicle demand worsened by the COVID-19 pandemic.

Astra, whose subsidiaries accounted for about half of the country’s domestic car sales in 2029, saw its automotive sales drop by 91.2 percent year-on-year in April to 3,807 units, according to the Association of Indonesian Automotive Manufacturers (Gaikindo).

The steep drop has led Gaikindo to slash its annual sales target by 40 percent to 600,000 vehicles in 2020, said Astra’s chairman Yohannes Nangoi at a recent online discussion.

Indonesia’s automotive industry already experienced a slowdown last year. It sold 1.03 million vehicles in 2019, a 10.8 percent drop from 2018.

Director of Astra Henry Tanoto said to weather the crisis, the company had adjusted its supply chain and modified its cash flow in the face of the slumping demand as a short-term strategy.

Astra also hopes to expand its mobile services and boost its digital presence, as it anticipates a higher number of online vehicle purchases in the post-pandemic market, he added./.

Firms in Singapore report worst performance since 2008

Enterprises in Singapore recorded their worst performance in the first quarter of 2020 since the global financial crisis of 2008 as the COVID-19 pandemic pushed the economy to stagnation, a recent business climate survey showed.

The poll of 151 firms, conducted by the Singapore University of Social Sciences and the Business Times, revealed that their revenue, profit, orders and new business activities fell sharply.

Up to 84 percent of the respondents believed that their business performance would worsen in the next six months, compared to 76 percent in Q4 of 2019. This is also the highest rate since the first survey conducted in 1996.

According to economist Tan Khay Boon at SIM Global Education, the pandemic’s short-term impact will be considerable declines in output and investment sources and an unemployment surge. In the medium term, businesses will face more pressure to cut expenses, improve operational efficiency and seek new clients.

Experts Chow Kit Boey and Chan Cheong Chiam forecast the Singaporean economy may contract 4.3-5 percent in Q2 compared to the same period last year.

Chow said if the country has to continue strict restrictions after June 1, its economy will shrink by 7 percent in Q2, the strongest contraction since the global financial crisis.

However, Chua Hak Bin, a senior economist at Maybank Kim Eng, said such a projection is too optimistic since the survey was conducted from March 13 to April 15, before lockdown measures were extended through May. He forecast Singapore’s economy could shrink 15-20 percent in Q2.

The survey also indicated that major enterprises were more pessimistic than small firms, which Chua said may come from the fact that the Singaporean Government’s financial aid packages mainly target small- and medium-sized companies and labourers./.

Nissan launches Kicks hybrid-tech powered SUV in Thailand

Nissan Motor Co. has launched in Thailand an SUV equipped with its unique drive system that combines a gasoline engine and electric motor.

Nissan Motor (Thailand) Co. has started local production of Kicks models, using its e-Power technology, the first production base for e-Power vehicles outside Japan.

According to the company, the Kicks comes in four models, starting at 889,000 baht (27,000 USD). Nissan began taking orders on May 15 with delivery scheduled from June.

Manufacturing of the vehicles at a plant in Samut Prakan province, southeast of Bangkok, is part of the automaker's 10.96 billion baht investment to enhance hybrid car production in Thailand.

In 2018, the Thai government approved the investment, which will make the country a key global production and export hub./.

Indonesia rolls out 43-bln-USD stimulus for MSMEs, SOEs

The Indonesian government is rolling out a 641.17 trillion rupiah (43 billion USD) economic recovery stimulus, bigger than previous allocations, to soften the impact of COVID-19 on micro, small and medium enterprises (MSMEs), as well as state-owned enterprises (SOEs).

Finance Minister Sri Mulyani Indrawati said the “national economic recovery” programme will include a strengthened social welfare net, tax incentives, capital injections into SOEs and interest rate subsidies for MSMEs, among other measures.

The government will accelerate spending to help MSMEs and SOEs, apart from a consumer spending stimulus and tax incentives for industry, Sri Mulyani said during a press conference. These efforts aim to stimulate the supply and demand for economic recovery, she noted.

The government will revise again the 2020 state budget to accommodate the stimulus as it expects the budget deficit to further increase to 6.27 percent of the country’s GDP, larger than the initial plan of a deficit amounting to 5.07 percent of GDP.

Sri Mulyani said the widening budget deficit was warranted as government revenues may drop by 69.3 trillion rupiah to 1.69 quadrillion rupiah, while the government boosts state spending by 106 trillion rupiah to 2.72 quadrillion rupiah.

State income will drop as a result of bigger tax incentives and weakening economic sectors and commodity prices, the Finance Minister told reporters. Meanwhile, state spending will be boosted to strengthen the economy against the COVID-19 pressures, she added.

Indonesia is planning a 149.29 trillion rupiah bailout for 12 SOEs, mostly as cash compensation and working capital investments, to reduce the impact of the coronavirus crisis. The funding includes 48 trillion rupiah in compensation for electricity firm PLN, 45 trillion rupiah in compensation for oil company Pertamina and 8.5 trillion rupiah in working capital for flag carrier Garuda Indonesia.

The country will also provide 34.15 trillion rupiah worth of loan repayment subsidies for around 60 million borrowers to cope with the pandemic. A total of 87.59 trillion rupiah will also be allocated for banks to support their loan-restructuring programmes.

It is also planning to provide 172.1 trillion rupiah for the social welfare net, far higher than the previous plan of 110 trillion rupiah, as well as increasing its tax incentives program to 123 trillion rupiah from the initial plan of 70.1 trillion rupiah./.

PM urges enhanced support for businesses amid pandemic

Prime Minister Nguyen Xuan Phuc has directed authorised agencies to focus on supporting businesses to overcome challenges caused by the COVID-19 crisis and take advantage of opportunities for soon recovering.

He called on the business community and people to join hands with the Government in combating the disease, towards completing socio-economic development objectives set for 2020 by the National Assembly and the Government.

The PM ordered ministries, ministerial-level agencies, Government agencies and local authorities to urgently consider and handle proposals of the business community and relevant agencies, thus taking measures to remove difficulties facing businesses amid the pandemic.

The Ministry of Planning and Investment was requested to coordinate with the Government Office and relevant agencies to outline a draft Government resolution on tasks and solutions to help enterprises recover and promote production and business, and to accelerate the disbursement of public investment.

Meanwhile, ministries, ministerial-level agencies, Government agencies and People’s Committees of localities nationwide were asked to devise specific action plans to implement the above-mentioned resolution after it is issued.

The PM required the Ministry of Finance to coordinate with relevant agencies to review and propose the extension, exemption and reduction of a number of fees and charges, in order to remove difficulties facing businesses.

The State Bank of Vietnam will be responsible for instructing credit institutions to reduce interest rates of existing loans and new loans for businesses and people.

The PM ordered the Ministry of Industry and Trade to take measures to ensure materials for domestic production, and consolidate the domestic market and seek new export markets.

The Ministry of Labour Invalids and Social Affairs was asked to extend and grant new work permits for foreign experts, business managers and technical workers who are working in enterprises.

The PM also required the Vietnam Chamber of Commerce and Industry to work with concerned agencies to continue summing up difficulties and proposals of the business community, thus proposing solutions and initiatives to improve the business environment and national competitiveness, and promote business participation in public-private cooperation mechanisms./.

Thai Cabinet to consider THAI rehabilitation plan

A State Enterprise Policy Committee meeting on May 18 approved a rehabilitation plan for Thai Airways International to solve the carrier’s financial difficulties, Prime Minister Prayut Chan-o-cha said.

The committee, chaired by the PM, will propose the resolution to the Cabinet for consideration on May 19.

When asked if the plan will proceed under the bankruptcy law, Prayut said the bankruptcy and the rehabilitation plan are not the same thing and the Cabinet will reveal more details later.

Once among the state-owned enterprises gaining profits in Thailand, THAI is now in debt of nearly 300 billion THB (nearly 10 billion USD). The national flag carrier reported a net loss of 2.11 billion THB in 2017, and this figure increased to 11.6 billion THB in 2018 and 12 billion THB in 2019. Due to the impact of the COVID-19 pandemic, THAI has been forced to cease operations until the end of May./.

Thailand bans ships entering Maya Bay to protect coral reefs

Thailand's Ministry of Natural Resources and Environment said on May 17 that ships will not be allowed to enter Maya Bay from now on, except from the back.

The move came as Minister of Natural Resources and Environment Varawut Silpa-archa saw that the coral reefs are not recovering as expected.

Minister Varawut the coral reefs have been destroyed because of excessive tourism. Maya Bay will remain closed as rehabilitation continues.

According to the minister, Maya Bay will not be permanently closed. When the coral growth is complete, then this place will be open to tourists from all over the world.

However, the minister said corals are still in a dangerous condition. Many coral species grow at a rate of only 3 to 5 centimetres in a year.

The Department of National Parks, Wildlife and Plant Conservation under the environment ministry announced the closure of Maya Bay on June 1, 2018, banning tourism and related businesses.

Maya Bay is known for its stunning coral reefs as well as three 100-metre high cliffs sheltering the bay. It is the main tourist attraction of Phi Phi island in southern Thailand./.

First-stage of five-star hotel inaugurated in Hai Phong

The first stage of the five-star M’Gallery Cat Ba Hotel was inaugurated in Cat Hai district, the northern port city of Hai Phong on May 18.

It was part of activities celebrating the 130th birth anniversary of President Ho Chi Minh (May 19) and the 65th anniversary of Hai Phong liberation (May 13).

Invested by Truong Binh Minh JSC, work on the project started in 2017 at a total cost of over 900 billion VND (39.1 million USD).

Its first stage from the early 2017 to the late 2019, costing more than 500 billion VND, covered an area of 5,000 sq.m with 126 rooms, three swimming pools, two restaurants, two bars, one massage area and two meeting halls.

The second stage, carried out from the early 2020 to the late 2021, will cost over 400 billion VND, featuring 142 rooms, six swimming pools, four restaurants, two bars, two convention halls that accommodate more than 500 guests on a total area of around 10,000 sq.m.

Once operational, M’Gallery Cat Ba will become the largest among 70 hotels managed by Accor Group.

Vice Chairman of the municipal People’s Committee Le Khac Nam said the first five-star hotel on Cat Ba island will contribute to fulfilling goals in the master plan on the sustainable tourism development of Cat Ba island till 2020 with a vision to 2050, towards turning Cat Ba into a world-class marine eco-tourism area.

It is also meant to realise the Hai Phong city development strategy till 2030 with a vision to 2045./.

Work begins to upgrade weak bridges on North-South railway route

A construction package to upgrade weak bridges on the North-South railway route was launched on May 18 in the central province of Quang Tri by the Transport Ministry, the Railway Project Management Board and the contractors.

The package is the second one in the project to upgrade 129 weak bridges on the North-South railway route, one of the urgent and important railway projects eligible to use State reserve budget for medium-term investment under the National Assembly Standing Committee’s Resolution 556/NQ-UBTVQH14 dated July 31, 2018.

Addressing the ceremony, Deputy Transport Minister Nguyen Ngoc Dong said as the North-South railway route has been in operation for more than 100 years, its out-of-date infrastructure has limited trains’ speed.

Under the national railway development plan, the route will be upgrade to serve short-distance cargo and passenger transport.

There are currently 1,454 bridges on the Hanoi-HCM City railway route, covering more than 36.3km./.

Petrovietnam strives to achieve “dual goal” amidst COVID-19

The Vietnam Oil and Gas Group (Petrovietnam) is striving to achieve the “dual goal” in the context of “dual crisis” from the COVID-19 pandemic and the plunge in oil price, that is to ensure the effective prevention of the disease as well as maintain the production and business.

Petrovietnam currently provides most of the key products of the economy as input materials for many other manufacturing sectors.

However, the “dual crisis” has hit the industry hard. According to reports of Petrovietnam subsidiaries, the key projects on exploration and production are currently affected by COVID-19. Many contractors will not be able to mobilise manpower to carry out the work on projects, while the supply of materials and equipment to those projects from the pandemic-hit countries under blockade and quarantine is also interrupted or delayed.

Worse still, petrol stations and agents are restricting imports to wait for price plunge and discount increase of retail price in the market compared to January 2020, thus seriously affecting the products of Dung Quat and Nghi Son refineries in the central provinces of Quang Ngai and Thanh Hoa, respectively.

In the first months of this year, although the output of most fertiliser products of Petrovietnam's plants reached and exceeded the monthly plans, the consumption of urea and NPK fertiliser did not come up to expectation because demand was still low in most areas of agricultural production.

In terms of oil and gas technical services, similar difficulties were encountered as investors and contractors tended to cut and optimise production costs. In the immediate future, the COVID-19 pandemic will cause a sharp drop in the international freight rates for all vessel sizes. The sharp drop in oil prices will also affect the price of drilling rigs as when re-signing the contracts, the users will request re-negotiations of prices.

When the consumption of petrochemical products and the efficiency of oil and gas production decrease sharply, the revenue from oil sale and contribution to the State budget from crude oil will also drop dramatically as compared to the planned price of 60 USD per barrel.

Specifically, if the oil price is at 60 USD per barrel, revenue from selling crude oil is 4.668 billion USD. But if it drops to 30 USD per barrel, the revenue is only 2.362 billion USD. The contribution to the State budget will fall from 1.594 billion USD to 806 million USD. Correspondingly, Petrovietnam has lost 2.3 billion USD in revenue and nearly 800 million USD contributed to the State budget.

Perceiving that difficulties and challenges are considerable, during the recent past, with the motto of “Managing fluctuations, optimising values, promoting consumption, striving to overcome difficulties, seizing opportunities and finishing safely”, the group has drastically implemented short-term, medium-term and long-term solution packages in each field of activity: administration, investment, finance, market and policy mechanism to respond to and minimise losses caused by the “dual crisis”.

In the January-April period, the group produced 7.2 million tonnes of oil, exceeding the four-month plan by 7.7 percent. Fertiliser and petroleum production was estimated at 601,600 tonnes and 4.53 million tonnes, respectively, surpassing the plan by 7.8 percent and 2.2 percent.

The group’s total revenue in the period was estimated at 203.9 trillion VND (8.7 billion USD), and contribution to the State budget, at 24.1 trillion VND.

In addition to ensuring production and business activities, Petrovietnam and its subsidiaries have focused on responding to COVID-19. The safety, security and prevention work of the pandemic at the units, construction sites and plants has been carried out seriously and effectively by petroleum contractors and units.

Speaking at a meeting on May 8 on the production and business activities in the period under review, Petrovietnam President and CEO Le Manh Hung said the macro-economic situation is still volatile, and many factors related to the growth motivation still challenging. The group will continue to face many difficulties. Therefore, for May and the remainder of the second quarter, the leader suggested the units change their management way to make it suitable to the fluctuations as well as capture opportunities for growth recovery./.

Thai economy shrinks at fastest pace in eight years

Thailand’s economy contracted 1.8 percent in the January-March period from a year earlier, the sharpest fall in eight years in the first quarter, mainly due to the COVID-19 pandemic’s impact on tourism and domestic activity.

On a quarterly basis, the economy shrank a seasonally adjusted 2.2 percent, the country’s National Economic and Social Development Council (NESDC) said on May 18.

The state planning agency revised the quarterly GDP in the fourth quarter of 2019 to a 0.2-percent contraction from 0.2-percent growth, meaning the economy slipped into a technical recession.

It slashed its GDP forecast for 2020 to a contraction of 5.0 – 6.0 percent from growth of 1.5 – 2.5 percent projected in February, which would be the worst decline since 1998 when the Asian financial crisis damaged the economy.

Besides, the agency also cut its projection for this year's exports and foreign tourist numbers, the main drivers of Thai growth.

NESDC Secretary-General Thosaporn Sirisumphand warned that the economy will be hardest hit in Q2 by lockdowns before gradually recovering.

According to the statistics website worldometers.info, as of May 18 noon (Vietnam time), Thailand had recorded 3,028 COVID-19 infections, including 56 deaths./.

Accessing credit requires firms to embrace financial transparency: experts

Enterprises, especially small and medium-sized ones and start-ups, need to enhance financial transparency and connect with banks if they want to obtain loans, according to experts.

“It is the same when seeking to raise capital,” said Lam Minh Chanh, founder of business school BizUni and co-founder of the Management and Startup Group.

Many SMEs still have unclear invoices when buying and selling, he said, warning that they need to be more transparent with respect to sales and revenues.

The pandemic has severely affected the global economy, including Vietnam, he said.

The immediate financial impact is significant for most big and small businesses, and how to raise capital during this difficult time to maintain operations and overcome this tough period is one of the top concerns of businesses, he said.

"It usually takes us three to six months to raise capital. During the epidemic period, businesses have died before they raised capital.

“Therefore, this is the period when businesses have to depend a lot on internal resources. Businesses must explore all ways to sell their products to earn revenues to first [survive]."

Dang Van Thanh, Chairman of TTC Group and the Vietnamese Brand Club, said the current high lending interest rates are a burden for businesses while banks are wary of lending due to risk concerns.

He said businesses should use their “savings,” which could be cash or even assets bought during profitable times to help them survive this tough time.

Concurring with him, Ngo Cong Truong, Chairman of John & Partners Consultancy and Education JSC, said, “SMEs should use their savings at this time … Another important thing is that businesses need to cut all unnecessary expenses."

Firms, especially start-ups, should focus on their core business segments, and stop ineffective ones and even close down if they do not see bright prospects, to start a new one.

Chanh said Vietnamese entrepreneurs often place a lot of enthusiasm and personal finances into start-up companies, and so when their companies face difficulties or failures, it takes more time for them to close the business compared to their counterparts in foreign countries.

Thanh said to control costs, businesses have to invest in technology and digital transformation.

The opportunity after the pandemic is real, and firms should reconsider their input sources to reduce reliance on imports, expand domestic market share, and seek new markets to capitalise on the opportunities on offer after the pandemic, he added./.

Construction violations rampant on Phu Quoc Island

The Government Inspectorate has found a range of construction violations at the popular tourism hub of the southern province of Kien Giang’s Phu Quoc Island.

The Government Inspectorate announced the result of an inspection into the land management and planning and environmental protection in Kien Giang between 2011 and 2017. 

According to the agency, the land allocated to some investors in Phu Quoc Economic Zone violated the island’s general plan until 2030 approved by the prime minister.

Some land plots at Bai Truong area were planned for public facilities and green space; but the economic zone management board instead leased them for commercial purposes such as Bai Truong tourism and shopping centre project and Tin Nghia tourist site project.

The inspection also indicated that among 272 licensed projects at the economic zone, just 175 projects covering a total area of nearly 8,000 hectares maintained their pace of construction. Meanwhile, a large number of projects have remained on paper or faced sluggish implementation due to investor problems.

Many illegal construction works have also been uncovered in the island. Work on the Seashell Hotel invested by Phu Quoc Tourism Joint Stock Company was started in January 2016 despite its expired construction licence. In January 2018, the Ministry of Construction detected the violation and requested Kien Giang authorities to deal with the issue.

One month later, the investor was granted another construction licence for the project. However, the project’s total height was 32.95 metres compared with the approved figure of just 27.95 metres, the Government Inspectorate reported.

Muong Thanh Phu Quoc Hotel invested by Muong Thanh Group has been put into operation despite lacking a construction licence. The same situation was seen at Pullman Resort.

According to the Government Inspectorate, Kien Giang Province needs to seek the opinions of the Ministry of Construction to settle the infringements.

 
 

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