VIETNAM'S BUSINESS NEWS HEADLINES SEPTEMBER 21

Tourism industry looks to bounce back

Most destinations and tourism sites throughout Vietnam are gradually re-opening now that the second outbreak of COVID-19 in the country has been largely brought under control. With flights slowly resuming, tour agencies are offering new and attractive travel packages in a bid to bounce back as quickly as possible.

Now is the best time of the year to visit Vietnam’s northeast and northwest regions, as many areas boast golden terraced rice fields as the harvest season approaches. The Mekong Delta, meanwhile, is in the middle of its flood season but remains a hot tourism spot. After two weeks of no new community transmissions of COVID-19, a glimmer of hope has set in among those in the tourism industry.

Tour agencies are focusing on discovery and leisure tourism, introducing packages with attractive prices. Despite the numerous challenges, the industry is busy with resumption plans now the pandemic is largely under control.

Tourism involves many different industries, so its resumption will help fulfil the dual targets of pandemic prevention and economic recovery./.

Garment firms in Bac Ninh ready for EVFTA

The EU-Vietnam Free Trade Agreement is expected to present enterprises with numerous opportunities to expand markets, with its preferential tariff measures. To seize the opportunities, however, many enterprises must overcome problems associated with a range of technical barriers.

The Dap Cau Garment Joint Stock Company in the northern province of Bac Ninh operates in the garment and textile industry, with main export markets including the US, Japan, and the Republic of Korea.

The company has invested in technology and modernised its equipment to benefit from the opportunities brought about by the EU-Vietnam Free Trade Agreement.

In addition to investing in technology and equipment, many companies in the garment and textile industry have also studied the commitments made in the free trade deal, in particular those regarding tariffs and origin requirements, so they can adjust their manufacturing process and raw material sources as well as improve their workforce to boost capacity and enhance product quality.

The EU will immediately abolish 85.6 percent of import tariffs on goods that represent 70.3 percent of Vietnam’s total export turnover to the EU.

After seven years, 99.2 percent of tariffs will have been removed on goods representing 99.7 percent of Vietnam’s export turnover to the bloc.

As well as initiatives from enterprises, relevant agencies have also implemented effective support programmes.

In addition to tariff benefits, the EVFTA is expected to present opportunities for the importation of high-quality machinery and accessing standard raw materials in the EU. Enterprises, however, must obey technical barriers and improve their product quality and competitiveness./.

Australian businesses aim to expand their supply chain in Vietnam

A number of Australian firms have chosen the nation as a destination for investment, with the impact of the novel coronavirus (COVID-19) pandemic causing a supply chain diversification, thus leading to a number of traditional markets being replaced.

As a businessman with decades of experience in maintaining trade and investment relations with Australia, Nguyen Quoc Cuong, general director of USIS, says that the country is increasingly being considered as a preferable destination for Australian businesses to expand their operations into. Indeed, the nation is rapidly surpassing many other locations that are Australia’s longtime partners in the ASEAN region as well as in Asia.

“Recently, Vietnam has captured a lot of attention after having achieved outstanding results in pandemic prevention and control. Over the past few months, my business has continuously conducted and trade exchanges online with Australian businesses and partners," Cuong adds.

David John Whitehead, vice president of the Australian Chamber of Commerce in Vietnam (AusCham), states that numerous Australian firms have been negatively affected by COVID-19. Due to their struggles to survive, many have been forced to restructure in order to become more centralised, whilst also making plans to diversify supply chains, especially in Asia.

In this context, the country is being increasingly viewed as an attractive investment destination for Australian firms. This comes after both sides announced in 2017 that they will strive to elevate their bilateral relationship to the level of a strategic partnership, therefore demonstrating the development and diverse bilateral relationship between the two countries. This can serve as an important foundation for many Australian businesses, especially those that possess strong financial resources, smart management, and advanced technology in order to take advantage of trade and investment promotion occurring locally.

Furthermore, a number of new enterprises from Australia will appear in the Vietnamese market as a means of increasing the global value chain, whilst also providing high-tech services in the electronics and technology sectors, especially in terms of education and service, the AusCham representative states.

Trent Iliffe, CEO of LOGOS, a business that operates in the logistic real estate sector throughout the Asia-Pacific region, notes that his company has only recently entered the Vietnamese market.

The firm has therefore established a joint venture in the nation with the aim of penetrating the domestic market. Indeed, a major focus has been placed on Ho Chi Minh City, Hanoi, and Da Nang, with initial capital for this joint venture standing at approximately US$350 million.

Moving to the country marks an important step in LOGOS’s regional growth strategy that is ultimately driven by customer demand, according to Iliffe.

Meanwhile, Austal Shipbuilding Company continued to expand its operations in the nation in May through the successful launch of the A.P.T. James ferry at a shipyard located in Ba Ria - Vung Tau.

David Singleton, managing director of Austal, believes this first ferry was a great achievement, with Austal Vietnam starting construction on its next project with a 41-mile-long high-speed catamaran ferry.

Moreover, Austal's capacity has risen with the addition of a shipyard in Vietnam, with the business also having aluminum and steel shipbuilding factories in the United States, the Philippines, and China.

According to experts, Australian firms have greatly benefited from their trading ties with China in recent years, although trade and investment between Australia and ASEAN marks an increasingly positive opportunity. Therefore, it is up to Australian businesses to identify the potential in countries within the ASEAN region, including Vietnam, to further strengthen trade and investment co-operation.

In the opposite direction, the present also marks a good time for domestic businesses and entrepreneurs to invest in Australia. For example, August saw USIS Company and its partners implement two projects relating to the installation of solar panels for households and a solar farm project at an industrial park, both of which required investment in Australia's Queensland region, at the same time.

According to a USIS representative, investment projects in the solar energy sector have flexible capital ranging from AUD400,000 to hundreds of millions of AUD, depending on the various needs and capacity of investors.

The projects enjoy stable revenue and profitability due to the Government's incentive policies placed on renewable energy. In addition, along with ensuring the safety of investment capital, domestic enterprises and business people also benefit from the immigration programme in Australia, as well as the expansion of trade and investment activities, the USIS representative notes.

Most notably, two-way trade between both sides has grown steadily in recent years. In 2018, two-way trade reached approximately US$7.8 billion and US$7.732 billion in 2019. At present, investment in Vietnam appears strong, with roughly 500 projects and more than US$2 billion in investment capital. Indeed, both sides have agreed to develop a strategy for enhanced economic co-operation with the aim of becoming each other's top 10 trading partners.

Fruit exports enjoy substantial preferential tariffs under EVFTA

Vietnam successfully exported its first batch of passion fruit to the EU on September 16 with substantial preferential tariffs following the enforcement of the EU-Vietnam Free Trade Agreement (EVFTA).

This comes after passion fruit exports enjoyed an increase of 300% in the 2015 to 2018 period, rising from US$19.6 million in 2015 to US$66.2 million in 2018, ranking Vietnam among the top 10 largest exporters of the fruit in the world, after Brazil, Peru, and Ecuador.

Following this, 2019 saw processed products from passion fruit make up a high proportion of over 65% of total export value, whilst also witnessing the strongest growth among various types of fruits.

In the first half of the year, passion fruit exports recorded an increase of 41% to US$18.4 million in comparison to the same period last year.

At present, Vietnamese passion fruits have started to make inroads into several demanding markets, such as France, Germany, Hong Kong (China), the Netherlands, the Republic of Korea, Taiwan (China), and Switzerland, many of whom have imposed stringent requirements in terms of product quality, quarantine, and food safety.

The Ministry of Agriculture and Rural Development is currently negotiating to facilitate the export of fresh passion fruit to other major markets, including Australia, China, Japan, and Thailand.

Furthermore, Vietnamese businesses have recently shipped their first batches of rice, shrimp, and coffee with 0% tariffs to the EU since the EVFTA came into force in August.

Following the enforcement of the trade deal, the export revenue of several agricultural products to the EU has enjoyed a remarkable increase, with fruit and vegetables poised to witness bright prospects for export to the fastidious market in the near future.

Most notably, the EU remains the fourth largest export market for Vietnamese fruit and vegetables.

Cement exports enjoy surge over eight-month period

Vietnam exported 23.9 million tonnes of cement during the opening eight months of the year, grossing approximately US$882 million, representing a year-on-year rise of 15.7% in volume and 1.2% value in turnover, according to the General Department of Vietnam Customs.

August alone witnessed the country ship 4.2 million tonnes of cement and clinker abroad, raking in over US$148.3 million in the process, marking a rise of 31.4% from the previous month.

China remains the largest consumer of Vietnamese cement, with the nation grossing over US$81 million from exporting over 2.5 million tonnes of cement to the northern neighbour in August.

Throughout the eight-month period, the country exported roughly 12.6 million tonnes of cement worth more than US$415.5 million to the Chinese market, accounting for nearly 53% of volume and over 47% of the nation’s total export turnover.

Elsewhere, the Philippines and Bangladesh remained the second and third largest export markets for Vietnamese cement and clinker, earning more than US$205 million and US$58 million, respectively, during the reviewed period.

Government expects 6.5% GDP growth for Vietnam next year

Vietnam’s economic growth rate in 2021 is anticipated to reach between 6% and 6.5%, according to a resolution adopted during the Government's recent monthly meeting for August.

To this end, the Government assigned the Ministry of Planning and Investment (MPI) to continue reviewing and outlining the growth scenario for the remainder of the year, while simultaneously devising plans for next year.

According to a MPI report delivered at the Government meeting for August, MPI Minister Nguyen Chi Dung projected that the Vietnamese economy will continue to face hurdles moving into next year due to the novel coronavirus (COVID-19) pandemic expected to remain an unpredictable factor globally.

Dung added that although it typically takes between two to four years for economies to bounce back following a global economic downturn, especially for countries that are the nation’s major partners, the growth rate of Vietnamese GDP is likely to reach 6.7% next year.

The Government has also assigned the MPI and the Ministry of Finance to conduct a review and adjust the year’s budget plans before submitting them to the Prime Minister for approval before September 25, while also speeding up the disbursement of public investment capital this year.

Priority will be given to actions that serve to fulfill the dual goal of economic recovery and preventive prevention .

The State Bank of Vietnam has been requested to continue regulating its monetary policy in a flexible manner, while also working in close conjunction with fiscal and other policies in an effort to accelerate economic growth, control inflation, and sustain macro-economic development.

The MPI has been committed to enhancing the efficiency of foreign investment by screening quality FDI projects, with a particular focus placed on the shift of supply chains from large corporations.

The Ministry of Industry and Trade plans to promote trade, boost exports to potential markets, stimulate local consumption demand, and prevent trade fraud in all forms, while also protecting domestic production and consumption.

Fair seeks ways to help supporting industry firms join global supply chains

The 2020 Sourcing Fair Supporting Industries (SFS 2020) was held on September 17 to help companies in supporting industries expand their markets and join global supply chains.

The fair was co-held by the HCM City Department of Industry and Trade, the city’s Export Processing Zone and Industrial Park Authority, and the Saigon Hi-tech Park (SHTP).

It saw the participation of 14 foreign-invested enterprises in electronics, manufacturing machinery, and advanced medical technology, most notably Samsung Electronics Vietnam, Bosch Vietnam, and Juki Vietnam.

There were more than 250 sessions held with some 60 enterprises in supporting industries in HCM City. Companies were offered contact with foreign businesses and manufacturers seeking to localise their products.

A fact-finding trip to factories of enterprises investing in the SHTP will be arranged for the city’s supporting industry firms within the framework of SFS 2020, according to Deputy Director of the HCM City Department of Industry and Trade Nguyen Phuong Dong.

Addressing the opening ceremony, Vice Chairman of the municipal People’s Committee Duong Anh Duc said HCM City has rolled out various measures over the years to assist firms in supporting industries.

Vietnam tech and energy forum promotes effective use of energy

A Vietnam Technology and Energy Forum convened on September 17 to boost technological applications for effective use of traditional energy sources and transfer of new energy technologies.

Speaking at the forum, Deputy Minister of Science and Technology Tran Van Tung highlighted the progress made by the energy sector and the shortcomings it faces due to the shortage of domestic supply.

He said the sector prioritises boosting the research, application, and development of energy technology. To master new technologies and promote development of local ones, there is a need for the involvement of ministries, sectors, localities, businesses, and investors, he added.

The deputy minister noted that the Government has worked to improve energy effectiveness via setting up a legal framework, diversifying supply sources and giving support to renewable energy, while putting forth measures to mobilise investment into the sector, among other measures.

Participants shared their views on the Government’s related policies and orientations as well as energy support programmes.

They talked about issues related to the policy for sustainable infrastructure development for energy-related manufacturing and services, energy restructuring in line with sustainable energy development, and technology trends in the world and the possibility of their application in Vietnam.

They also exchanged views on measures to step up international cooperation and policy-planning capacity, the development of power systems in line with national energy security, and credit incentives for high-tech energy projects, among others.

Russian Helicopters sees prospects in Vietnam

Vietnam and Russia should cooperate more closely in the repair and maintenance of helicopters, especially as the Southeast Asian country has a maintenance and repair centre belonging to Russian Helicopters.

Andrey Boginsky, General Director of the Russian Helicopters Holding Company, which is a subsidiary of Rostec State Corporation, made the statement at HeliRussia 2020, which takes place in Moscow from September 15-17.

Answering questions from a Vietnam News Agency reporter in Moscow about the possibility of buying and using helicopters in Vietnam, Boginsky said his firm always gives Vietnam competitive prices compared to other companies.

According to Boginsky, Russian Helicopters has had successful experience in markets such as the Republic of Korea, Peru, Thailand, and Taiwan (China) when setting up maintenance centres and selling components.

Referring to the two main helicopters Russian Helicopters is shipping - the Mi-171 and the Ansat, Boginsky said Vietnam should use both, but especially the Ansat, which is able to land on water surfaces in an emergency.

Russian Helicopters is working hard to introduce aircraft that can easily have their function converted to increase their attractiveness in the eyes of customers.

PetroVietnam continues to top list of most profitable enterprises in 2020

The Vietnam Oil and Gas Group (PetroVietnam) continued to top the Profit500 list, which names the 500 most profitable enterprises in Vietnam, in 2020.

This is the third year that the group has taken the leading position among the top 500 enterprises.

The list, announced by the Vietnam Report JSC and online newspaper Vietnamnet, also contains many enterprises in the oil and gas sector, such as PV Gas (7th place), Vietsovpetro, PV Powers, PetroVietnam Technical Services Corporation (PTSC), PetroVietnam Drilling & Well Service Corporation (PV Drilling), Ca Mau Fertiliser Plant (PVCFC), to name just a few.

Vietnam Report said this year the ROA (Return on Assets) of companies on the list averaged 11.4 percent, slightly down from the 11.9 percent recorded last year. However, the ROE (Return on Equity) ratio improved to 21.7 percent from 20.9 percent in 2019.

It also took note of changes in top priority strategies of enterprises from now to the end of year, with 71.7 percent of them paying attention to sales, 58.3 percent focusing on seeking new markets and expanding existing ones, 49.2 percent looking to researching and developing new products and 42.6 percent planning to cut costs.

Ben Tre announces first shipment of fruit to EU after EVFTA takes effect

A ceremony was held in the Mekong Delta province of Ben Tre on September 17 to announce the first shipment of its fruit to the EU under the EU-Vietnam Free Trade Agreement (EVFTA).

General Director of the Vina T&T Group Nguyen Dinh Tung said that after more than one month of negotiations, the company will export 20,000 fresh coconuts to the UK, 12 tonnes of pomelo to Germany, and three tonnes of dragon fruit to the Netherlands.

Deputy Minister of Agriculture and Rural Development Le Quoc Doanh said the EVFTA opens up huge opportunities for Vietnamese farm produce in general and fruit in particular.

More than a month since the EVFTA took effect, many types of Vietnamese agricultural products have been shipped to the bloc, such as brackish-water shrimp from the central province of Ninh Thuan and coffee and passion fruit from the Central Highlands province of Gia Lai.

About 40 types of Vietnamese fruit and vegetables are now exported to 60 countries and territories. Apart from traditional markets, fruit is also found in demanding markets such as the US, the EU, Japan, Canada, Australia, and New Zealand.

In the first seven months of this year, fruit exports to the EU earned 59.18 million USD in revenue, accounting for 73.54 percent of total fruit and vegetable shipments to the bloc. The figure is expected to keep growing despite the COVID-19 pandemic.

Vice Chairman of the provincial People’s Committee Nguyen Huu Lap said Ben Tre still possesses huge potential to ship tropical fruit to the EU, in particular coconuts. It has a total cultivation area of nearly 73,000 ha of coconut trees with an output of more than 626,000 tonnes.

The province is home to around 4,000 ha of certified organic coconut and some 30,000 ha of other fruit, with a total output of over 330,000 tonnes.

Vietnam, Singapore hold online investment promotion event

An online Vietnam-Singapore investment promotion conference was held on September 17 with the participation of 500 enterprises from over 80 Singaporean business associations and chambers of commerce around the world.

The event, held by the Vietnamese Ministry of Planning and Investment in coordination with the Vietnamese Embassy in Singapore, the Singapore Manufacturing Federation (SMF) and the Singapore Business Federation (SBF), took place amid global enterprises’ restructuring of production and supply chains so as to avoid overdependence on a single country or partner and seek safer and more effective investment destinations.

Participants in the meeting were updated on Vietnam’s investment climate and readiness to welcome a new wave of foreign investment; the country’s policies for developing ecosystems for industries, especially electronics, textile-garment, automobile and food processing; along with digital transformation and smart city development.

Some orientations for more sustainable cooperation between the two countries amid the complex global economic situation were also shared.

Deputy Minister of Planning and Investment Tran Quoc Phuong said facing the COVID-19 pandemic, Vietnam still persists in proactive and effective solutions to concurrently contain the outbreak and develop the economy.

He affirmed that foreign investors, including Singaporean ones, will have more opportunities to invest and do business more successfully in Vietnam as the country’s legal framework is constantly improved, channels connecting the domestic and foreign markets are being expanded, and the Vietnamese Government, ministries, sectors and localities are determined to improve the business environment.

The Vietnamese Government encourages Singaporean firms to invest in the hi-tech industry, set up innovation and R&D centres, develop industrial park infrastructure, and take part in the equitisation of State-owned enterprises, among others, Phuong added.

At the conference, participants shared the view on Vietnam’s growing role in the international community and that the country is a safe and attractive investment destination for Singaporean businesses in the post-pandemic period.

SMF President and SBF Vice Chairman Douglas Foo said as both countries are ASEAN members joining in certain free trade agreements, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), their companies will secure more chances to capitalise on advantages and bolster investment and business activities.

Soc Trang enjoys high increases in industrial production, exports

The Mekong Delta province of Soc Trang has posted high increases in industrial production and export value despite the impacts of unfavourable weather conditions such as droughts and saline intrusion along with the COVID-19 pandemic.

Total industrial production value in the first nine months of this year was estimated at 27.5 trillion VND (1.19 billion USD), up 13.17 percent year on year.

Products with high growth included rice processing (30 percent), water supply and waste treatment (nearly 26 percent) and frozen shrimp (20.9 percent).

The province earned 710 million USD from exports in the period, a rise of 11.7 percent from the same period last year.

Meanwhile, total retail and services revenue picked up 3.2 percent year on year to 62.8 trillion VND.

The provincial Party Committee attributed the growth to measures undertaken by the province to improve the investment and business environment and enhancing local competitiveness.

In the remaining months of the year, Soc Trang will push ahead with efforts to remove existing obstacles for production and business, towards realizing the goal of 40 trillion VND of industrial production value and 920 million USD in export earnings.

EU, Indonesia commit to green economic development

Indonesian Minister for National Development Planning Suharso Monoarfa and European Union (EU) Ambassador to Indonesia and Brunei Vincent Piket launched the publication EU-Indonesia Cooperation 2020: “Building Capacity for Green Growth” during an online event on September 17.

Talking with the press, Monoarfa said the publication encapsulates efforts in advancing sustainable development to mitigate the impacts of climate change as well as highlights key achievements of the EU and its member states’ development programmes with Indonesia.

 

According to him, Indonesia-EU cooperation will support economic growth, health system, education, social inclusion, and environmental protection.

Ambassador Piket, for his part, said the EU recently launched a “Team Europe” package to support Indonesia’s response to the coronavirus pandemic. Looking forward, cooperation with Indonesia will include innovative methods to finance the green transition, urban development and the sustainable management of natural resources.

Last year, over 1,600 annual scholarships were awarded to Indonesian students through the EU’s Erasmus programme and its member states’ scholarship schemes.

Thai firms to invest in thermal power plant in Quang Tri

Three leading energy businesses of Thailand recently signed a joint deal to develop the Quang Tri 1 thermal power plant in Vietnam.

Local media reported that Egco Group, Egat International and Ratch Group signed the agreement on September 16 with Egat International holding a 40 percent stake in the plant and Egco Group and Ratch Group equally dividing the remaining 60 percent.

The coal-fired Quang Tri 1 plant, located in Hai Lang district of the central province of Quang Tri, will have an installed capacity of 1,320 megawatts.

It is expected to go into commercial operation by 2025, and the generated electricity will be sold to Vietnam under a long-term power purchase agreement.

Soc Trang enjoys high increases in industrial production, exports

The Mekong Delta province of Soc Trang has posted high increases in industrial production and export value despite the impacts of unfavourable weather conditions such as droughts and saline intrusion along with the COVID-19 pandemic.

Total industrial production value in the first nine months of this year was estimated at 27.5 trillion VND (1.19 billion USD), up 13.17 percent year on year.

Products with high growth included rice processing (30 percent), water supply and waste treatment (nearly 26 percent) and frozen shrimp (20.9 percent).

The province earned 710 million USD from exports in the period, a rise of 11.7 percent from the same period last year.

Meanwhile, total retail and services revenue picked up 3.2 percent year on year to 62.8 trillion VND.

The provincial Party Committee attributed the growth to measures undertaken by the province to improve the investment and business environment and enhancing local competitiveness.

In the remaining months of the year, Soc Trang will push ahead with efforts to remove existing obstacles for production and business, towards realizing the goal of 40 trillion VND of industrial production value and 920 million USD in export earnings.

Dragon Capital fund sells 5 million shares of Khang Dien House

Vietnam Enterprise Investments Limited Fund (VEIL), run by Dragon Capital, announced Wednesday it had sold 5 million shares of Khang Dien House Trading and Investment JSC (KDH) via a put-through method on September 11.

After the transaction, Dragon Capital's largest fund owns more than 9 million shares of KDH, equivalent to a rate of 1.62 per cent.

KDH sold the shares at a price of VND23,850 per share, equivalent to a value of VND119.25 billion (US$5.1 million).

The company is the sixth-largest investment in VEIL’s portfolio. In the first half of this year, KDH recorded net revenue of VND1.49 trillion, an increase of 19 per cent year-on-year. Post-tax profit reached VND408 billion, up by 90 per cent in the same period last year and 37 per cent of the yearly plan.

The company recently announced that it will establish three subsidiaries with a total charter capital of VND220 billion.

The new units are Phu Hai Real Estate Development Company Limited, with VND100 billion of capital, Nguyen Phat Real Estate Investment Company Limited, with VND20 billion of capital and Nam Thong Real Estate Development Company Limited, with VND100 billion of capital.

A group of investment funds run by Dragon Capital now holds a total of 89 million shares of KDH, equivalent to 15.93 per cent. With the current market price of VND24,500 per share, the market value of the shares totals nearly VND2.2 trillion.

Delay in collecting land-use fees causes late handover of house-ownership certificates

Tardy collection of land-use fees from property developers in HCM City has affected the government’s revenues and created many obstacles for them in turn, a forum heard on Thursday.

At the forum, organised by Thanh Nien (Young People) newspaper, attendees heard that in the first six months of this year, the city’s budget revenues were down 14.4 per year-on-year to VND163 trillion, just 40.2 per cent of the annual target.

Income from land-use fees was down 21 per cent.

The COVID-19 pandemic was particularly blamed for the fall.

The seminar heard that the difficulties caused by the cumbersome process of paying land-use fees was another major issue since it caused a delay in issuing house ownership certificates.

There are now many housing projects where buyers do not have title deeds yet despite buying two or three years ago.

“Real estate developers in the city are ready to pay land-use fees so that their buyers can get house-ownership certificates, but the issue is not simple,” the forum heard.

In recent times the media has been regularly reporting about the challenges faced by developers in paying the fees.

The HCM City Real Estate Association has also written to the city People’s Committee and other relevant agencies about this problem.

The tardiness in collecting the fees is caused by difficulties in completing legal procedures related to land.

Problems caused by supervision of land use and management as well as corporate equitisation.

These delay the fixing of land-use prices.

Many developers have faced these obstacles, the forum heard.

Novaland Group cannot pay the fees for some projects while Hung Thinh has two projects for which the fee rates have not been intimated.

According to the association, 44 apartment projects with 22,000 units by 11 developers lack house-ownership certificates due to delays in accepting land-use fee payments.

“Most developers are ready to pay estimated land-use fees [before the official rate is fixed] so that they can issue title deeds to their buyers,” Nguyen Ngoc Toan, deputy editor-in-chief of Thanh Nien newspaper, said.

“Helping companies resolve their difficulties will not only enrich the city’s coffers but also help property developers retain their prestige and safeguard the rights of house buyers.”

Many developers in the city have failed to hand over house ownership certificates to buyers in spite of their sustained efforts to co-operate with relevant authorities to fulfil all legal and financial responsibilities.

One of the many developers thus affected, Novaland, has made all efforts to co-operate with relevant authorities to clear the all obstacles faced by each of its projects.

Since 2016-17, when its first project ran into problems, Novaland has been making efforts to resolve them.

Despite this its land-use prices have not been fixed. In 2017 the company has been repeatedly volunteering to pay estimated rates, but this has not led to a solution either.

A long time ago the group began writing to the Department of Natural Resource and Environment asking for the rates for its projects, which include housing and commercial complexes at 119 Pho Quang and 130-132 Hong Ha in Phu Nhuan District and 108-112B-114 Hong Ha Road in Tan Binh District.

The delay in issuing house-ownership certificates is causing tension among buyers, with many suing the company or holding public demonstrations.

It has also had a negative impact on the developers’ prestige.

In order to foster the property market, developers hope to get timely guidance so that they can resolve difficulties and contribute to the development of society.

Timely guidance will also help them fulfil their financial responsibilities and bolster the government’s revenues.

Commercial banks expect SBV support to disburse capital, says expert

The State Bank of Viet Nam (SBV) should develop policies for commercial banks, helping them disburse capital mobilised from organisations and people, said economic expert Nguyen Minh Phong.

Phong made the statement as commercial banks face an imbalance between mobilised capital and loans.

According to a SBV report, Viet Nam’s banking system has mobilised nearly VND417.3 trillion in the January-August period. Of the sum, the total amount of money deposited by people was more than VND246 trillion, and the amount of deposits from economic organisations was nearly VND171.3 trillion.

The report showed that the banking system has just disbursed VND346.6 trillion, equivalent to VND1.4 trillion per day – the lowest growth rate in the past five years. The direct reason was the impact of the COVID-19 pandemic, which has hut businesses, forcing them to curtail production or close down.

The banks currently have an excess of liquidity, so the mobilised money is increasing, rising above the loan amount.

Insiders said that the phenomenon of idle money flowing into banks despite low-interest rates was partly due to the influence of the COVID-19 pandemic. Some other investment channels, such as gold, securities, real estate, and foreign currencies are no longer attractive.

There are many enterprises that are "capital hungry" – in need of capital for investment, production and business – however it is difficult to access loans from banks due to strict procedures and regulations.

The central bank's policy is to not lend carelessly. All lending criteria must be very cautious because many businesses are currently weak and have high economic risks. Therefore, banks must consider carefully before lending money to avoid bad debts.

According to Phong, this is a tough problem to solve because it is related to conflicts of interest. If for common interest, the banks try to disburse as much as possible, paying attention to key and large-scale areas. But on the contrary, if lending is "easy", it will affect the benefits of the banks, especially debt collection as well as the bank's profit.

Phong said that this problem requires direction from the SBV.

“At present, banks still have to continue seeking good customers and safe lending opportunities as well as new loan opportunities associated with post-COVID-19 economic development. On the other hand, they need a flexible lending policy, consistent with the current situation,” Phong said.

Phong said for businesses facing many difficulties but still needing money, the central bank needs to adjust policies in accordance with the current situation so that commercial banks can lend with peace of mind.

“For example, the SBV can restructure public debt, reduce the reserve level or other policies to create incentives and cut costs for commercial banks,” Phong said.

Keeping NPLs ratio below 3 per cent a challenge: experts

The COVID-19 pandemic is weighing on the banking system’s non-performing loans (NPLs), requiring significant effort to keep NPLs ratio below three per cent by the end of this year as targeted by the Government.

Tran Du Lich, a member of the National Financial and Monetary Policy Advisory Council, said the increase in bad debts was unavoidable because of the pandemic. However, it was necessary to keep NPLs ratio at a reasonable level, Lich said, adding that bad debts would negatively affect credit flow.

According to the State Bank of Viet Nam, the pandemic pushed up NPLs ratio. Statistics showed that on-balance sheet NPLs ratio was estimated at 1.8 per cent at the end of June.

In the scenario that the gross domestic product (GDP) expanded at four per cent this year, on-balance sheet NPLs ratio was forecast at 2.41 per cent by the end of this year, 0.78 percentage point higher than the end of 2019. If GDP expanded at five per cent this year, the ratio of on-balance sheet NPLs would be at 2.16 per cent, 0.5 per cent higher.

Experts predicted that the Government’s target of keeping bad debt ratio, including on-balance sheet NPLs of credit institutions, bad debts sold to the Viet Nam Asset Management Company (VAMC) and debts that had implemented debt classification measures, below three per cent would be challenging this year.

According to Do Hoai Linh, Director of the Finance and Banking Institute, the goal seemed impossible because COVID-19 was weighing on the socio-economic development. Linh predicted the NPLs ratio would be around four per cent this year.

Can Van Luc from BIDV Training and Research Institute predicted on-balance sheet NPLs ratio at four per cent, more than twice higher than the end of last year due to anticipated low credit growth and struggling business.

Luc said the total ratio of NPLs, including on-balance sheet, sold to VAMC and debts classified, could amount up to six per cent of the total outstanding loans, 1.5 times higher than the end of 2019.

The central bank said that struggling business and production were affecting revenues and asset quality of credit institutions.

The banking sector was on the way to keeping NPLs ratio below three per cent by the end of this year but the pandemic posed a significant challenge.

Global and domestic economic uncertainties, coupled with unpredicted development of African swine fever, natural disasters and diseases were also challenges in controlling bad debts.

As bad debts mainly stayed at weak credit institutions, the central bank said focus would be placed on restructuring these credit institutions following the market mechanism and the principle of ensuring rights of depositors and maintaining the system’s stability and safety.

On-balance sheet NPLs ratio has been kept at below three per cent during the past four years, specifically 2.46 per cent in 2016, 1.99 per cent in 2017, 1.91 per cent in 2018 and 1.63 per cent in 2019.

Dak Lak seeks to become investment magnet

Dak Lak seeks to improve its business and investment climate to become an attractive investment destination, according to the Central Highlands province’s Department of Planning and Investment.

Dinh Xuan Ha, the department’s director, said Dak Lak would continue to move up in the annual Provincial Competitiveness Index (PCI) rankings since it has assigned top priority to administrative reform.

It aims to diversify its investment promotion efforts, including by holding regular meetings and interactions with large domestic and international companies to apprise them about its potential and investment climate, he said.

Top priority is also being given to ensuring public order and creating conditions to ensure businesses feel secure about investing, he said.

The province would work with the Ministry of Foreign Affairs and other agencies to obtain up-to-date information on its partners, he said.

It would prioritise investment in high-tech agriculture and food processing industry, especially for exports, and industrial-scale livestock breeding, he added.

In June the province licensed the first phase of the VND360 billion (US$15.46 million) DHN high-tech livestock complex in Ea M’Droh Commune, Cu M’gar District.

Vu Manh Hung, chairman of Hung Nhon Group, its owner, said by the end of next year the complex is expected to supply high-quality pork that meets international standards to the domestic market.

“Dak Lak has favourable conditions to develop high-tech livestock farming,” he said.

Hung Nhon Group has tied up with the De Heus Group of the Netherlands to build a hi-tech agricultural complex, expected to cost VND1.5 trillion ($64.49 million), in the province by 2025.

According to the department, the sectors most appealing to investors are wind and solar power, urban development, eco-tourism, resorts, and agricultural production.

Six large renewable energy plants have been completed and commissioned.

They include five solar farms with a total capacity of 190MW and costing VND4.886 trillion, and a wind power plant with a capacity of 28.8MW built at a cost of VND1.8 trillion.

Five other solar plants with a total capacity of 600MW are under construction. To cost VND15.402 trillion, they are expected to begin commercial generation by the end of this year.

Recently the province has sought the Government’s approval for a VND7.7 trillion wind power project in Cu M’gar District to be built by the AMI AC Renewables Dak Lak Company Ltd.

Ha said the province has achieved average annual economic growth of more than 8 per cent since 2015.

The province has gradually shifted from agriculture, forestry and fishery to industry - construction, he said.

The PCI shows it improved many indicators in 2019, especially the index of business support services, to rank a creditable sixth out of the country’s 63 provinces and cities.

The province has an airport and a fairly well-developed road network, with many important national highways passing through it.

With nearly 540,000ha of agricultural lands, it grows a number of high-value commercial crops such as coffee, rubber and pepper.

Dak Lak has an abundant workforce of more than 900,000, including 400,000 well-trained workers.

Firms urged to restructure to cope with climate change

Firms should pay attention to developing new business models, products and technologies to cope with climate change and turn its negative impact into impetus, a recent report of the Viet Nam Chamber of Commerce and Industry (VCCI) highlighted.

The report 'Adapting to succeed: Accessing the impact of climate change on Vietnamese businesses' was launched on Wednesday in Ha Noi and featured the voices of nearly 10,400 enterprises nationwide, including more than 8,700 domestic firms and nearly 1,600 foreign-invested.

This was considered the largest ever survey on the risks of natural disasters and climate change on manufacturing and production.

The report pointed out that climate change has left multi-faceted negative impacts on business performance, such as production interruption, reduction of labour capacity, revenue decreases, increasing in production expenditures, infrastructure damage and material input shortages.

The most vulnerable sectors were agriculture, forestry and fishery.

Enterprises in the central coastal and Mekong Delta regions were more affected by the risk of natural disasters and climate change than other regions.

The average loss caused by natural disasters and climate change was estimated at VND95.2 million (US$4,100) per business each, year while some suffered very huge losses.

The report found that many firms were aware of the need to respond to natural disasters and climate change risks through a variety of solutions from simple to complex. A considerable number of businesses adjusted their business models, upgraded their production technologies or purchased insurance against natural disaster risks.

According to the report, 44.5 per cent of surveyed businesses said they had some insurance against natural disaster and climate change risks and 86 per cent of those with insurance said that it was useful.

VCCI Chairman Vu Tien Loc told the event that Viet Nam was among the countries suffering the most from climate change, adding that the Government had improved the legal system on environmental production and gave priority to implementing programmes responding to natural disasters and climate change,

The report showed most surveyed firms said climate change and its challenges contributed to accelerating the process of restructuring, including the reorganisation of manufacturing and creating new products and technologies.

Businesses were also more willing to invest in improving compliance with environmental regulations. Some were willing to spend 7.32 per cent of their operating expenditures for environmentally-friendly targets.

Loc said that our behaviour with the environment will decide our future and the future of generations to come, urging actions to move towards a greener, cleaner and more sustainable Vietnamese and global economy.

Policies to encourage environmental protection and sustainable development needed to be improved, together with improving law enforcement, Loc said.

Loc also urged businesses to play their role in adapting to climate change and tackling environmental issues.

Viet Nam was ranked sixth among countries and territories hardest hit by extreme weather events between 1999 and 2018, according to the Global Climate Risk Index by the German environmental think tank Germanwatch.

Source: VNA/VNN/VNS/VIR/VOV/SGT/NDO/Dtinews

 
 

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