Real estate firms struggling due to lack of trained staff
Poor human resources and management were among the reasons why real estate companies were facing so many difficulties, Nguyen Ngoc Thanh, deputy chairman of the Viet Nam National Real Estate Association, said at a conference held earlier this month.
Investors at the Ecopark real estate trading floor in Ha Noi.
Viet Nam is facing a serious shortage of well-trained staff in the real estate sector.
His statement mirrored the same opinion held by Dr Nguyen Minh Ngoc, deputy head of the National Economics University (NEU)'s Real Estate and Resource Economics Faculty, who attributed failure in the real estate sector to low professionalism.
That was partly because the majority of people working in real estate did not receive proper training or any training at all, Ngoc said.
According to Thoi bao Kinh te Viet Nam (VNEconomy) e-newspaper, a survey conducted by Ernst and Young revealed that 70 per cent of people working in the real estate sector said they struggled to do business and benefit from the industry.
The Viet Nam National Real Estate Association said Viet Nam currently had 446 colleges and universities, but only a few offered proper training in real estate.
The country, therefore, was facing a serious shortage of staff professionally trained in real estate, especially those who met international standards.
Ngoc said the NEU was currently the only university with a real estate faculty.
There were only several other universities in Ha Noi and HCM City that taught real estate related subjects, while training centres only offered short-term courses that lasted a few months.
Ngoc said that society as a whole, including policy makers, was not aware of the importance of training in real estate.
Many people, including business owners, thought they just needed money and some experience to invest in real estate.
Real estate investors, Ngoc pointed out, made investments either through real estate brokers or following their own ideas of the real estate market.
"Some people do not even consider taking short-term courses, let alone going to university to get a degree."
Nevertheless, there were dozens of thousands of people working in real estate or real estate-related sectors and there were about 10,000 operating real estate brokerage agencies.
Nguyen Thanh Nam, a former real estate agent in Ha Noi, said he had a major in banking, but did not receive any training in real estate before he was employed by his former company.
"Most of my former colleagues did not study real estate at college, although they did have degrees in business administration or banking," Nam said, adding that real estate companies often did not require their employees to have a degree in real estate.
Dr Ngoc said every economy was dependent on the development of the real estate industry.
He added that in many countries including Singapore and Japan, training in real estate was deemed very important, and most economics and technical universities either had a real estate department or offered courses in real estate.
In these countries, training in real estate was regarded as important as banking and finance, but there were only a few hundred people receiving university-level training in Viet Nam each year as opposed to 25-30,000 people pursuing a major in banking or finance, said Ngoc.
"Only two third of these graduates pursue real estate as a profession, while the rest pursue other areas."
In the past four years, around 50,000 people have received short-term training in real estate and obtained certificates.
Ngoc said it was important to raise social awareness about the importance of training in real estate.
He added policy makers in particular must be more aware.
The Viet Nam National Real Estate Association said it would organise training courses in the third and fourth quarters of this year. The programme is currently recruting learners.
But Ngoc of the National Economics University said that his university was not involved in these programmes.
He said there was a lack of co-operation among universities that offered training in real estate and between those universities and State management organisations.
British Telecom eyes Vietnam market
The British telecom giant is seeking business opportunities in Asian countries with high growth and large population, including Vietnam.
Channelnewsasia.com reported that BT regards those potential markets of Vietnam, the Philippines and Indonesia as key drivers of its expansion strategy in the near future.
The news wire quoted Tim Harris, CEO of British Telecom Southeast Asia, as saying BT plans to double its market share in Asia.
"We're very positive on Asia. We grew a double digit growth last year, and our intention is to grow twice the size at the market,” said Harris. “We'll be investing significantly further into the region. Because that's where we see our customers investing a lot at the moment."
BT said the Asian market for its services is growing strongly at 6 percent a year overall and 15 percent for managed services. It estimates that the Asian market for its services is worth 8 billion pounds (US$12.56 billion).
EWEC 2012 Fair attracts 30,000 visitors
The 2012 International East-West Economic Corridor (EWEC) Trade and Tourism Fair in the central city of Danang has drawn 30,000 visitors and fetched more than VND3 billion.
There were 300 stalls put up by nearly 200 domestic and foreign businesses, including those from Laos, Thailand, Myanmar, Finland, to showcase different kinds of products such as wood furniture, coffee, cosmetics, household commodities, electronic spare parts, and high-technology equipment.
The fair successfully closed on August 21, creating favourable conditions for domestic and foreign businesses to seek trade and investment opportunities and promote tourism services.
Global crisis under discussion in Hanoi
Forty scholars from Vietnam and abroad discussed the global financial crisis and assessed strategies from left-wing and progressive social movements throughout Southeast Asia.
The August 21-22 conference, held by the Vietnamese Peace and Development Foundation (VPDF) in coordination with the Rosa Luxemburg Stiftung (RLS) and the South-South People’s Solidarity Network, aimed to identify the impact of the current crisis and develop new solutions to it.
Addressing the event, Former Vice-State President Nguyen Thi Binh reviewed the world’s complicated socio-economic situation to date as well as the responses from various social movements in Southeast Asia over recent years.
The 2007-08 global financial crisis, compounded by the recent public debt problems in the eurozone, have led to serious consequences facing global prosperity, especially considering other challenges such as the environment, food security, climate change, and society, she said.
Binh, who is also VPDF President, highlighted the development of progressive social movements in Southeast Asia.
She also noted that social institutions have promoted the exchange of information and fostered cooperative partnerships, contributing to the establishment of an ASEAN community that ultimately aspires to world peace, economic development and political stability.
Binh then briefed participants on the socio-economic situation in Vietnam, saying that the Renewal Process has paid off well to make Vietnam become a middle-income nation.
It not only offers opportunities but also poses challenges for Vietnam given the global context, she said.
During the two-day event, participants reviewed the impact of the interlocking crises – ecological, debt, financial, food, energy and climate - which confronts everyone.
They said that measures taken by states and international institutions so far have not been able to get to the root of the problem, but have merely transferred the burden from financial institutions to the public as well as worsened the situation across economic, social, and political spheres.
Youth unemployment in the EU has increased 22.6 percent since 2008 with Greece, Spain, Portugal, and Italy having the highest rates at over 50 percent, they cited.
In Asia, more than 900 million people live in extreme poverty, 1.08 billion work in insecure employment and 600 million go hungry every day.
The conference also discussed the situation of people’s movements and the strategies of Southern countries in dealing with the crisis.
Denmark assists agricultural development in Dak Lak
More than VND30 billion out of the VND56.5 billion committed by Denmark for the Central Highland province of Dak Lak has been disbursed so far this year.
Provincial leaders reported the figure at a working session with the Deputy Ambassador Lis Rosenholm in Dak Lak on August 22.
Dak Lak is one of the five provinces which benefit from the agricultural and rural development programme funded by the Danish Government.
This year, VND56.5 billion has been assigned to the province to develop rural areas, improve living standards for the poor, build irrigation works, increase competitiveness, expand markets and protect natural resources and the environment.
Nguyen Huu Chung, Vice-Director of the Provincial Department of Agriculture and Rural Development, said the province has established steering boards to manage the funding, which will deliver numerous socio-economic benefits to local people.
At the working session, the provincial leaders also proposed that Demark provide additional aid of VND55 billion for the province to implement the support programme in 2013.
Ms Lis agreed with the proposal and said the aid will be announced in September.
Vietnam-China int’l roads open to public
An opening ceremony for new overland routes that link Hanoi to Nanning and Shenzhen took place at the Huu Nghi Border Gate in the northern province of Lang Son on August 22.
The event is a landmark in Vietnamese-Chinese economic and trade cooperation, deepening their comprehensive ties.
The roads will shorten waiting times, reduce transport costs and make it more convenient for people to travel and exchange trade between the two countries across their land borders.
They also testify to the close ties between Lang Son and the Guangxi Zhuang Autonomous Region (GZAR) in recent years.
The two localities are working together to develop the Nanning-Lang Son-Hanoi-Haiphong economic corridor, in line with the agreement on “two corridors, one economic belt” signed by top Vietnamese and Chinese leaders.
The new corridor makes up part of the greater Nanning-Singapore economic corridor that has boosted relations between China, Vietnam and other ASEAN countries.
During the past year, Lang Son has endeavoured to create preferential conditions for transport activities from Vietnam to China and vice versa.
There are presently over 30,000 vehicles carrying goods and 40,000-50,000 taking people across the border region every year.
Hanoi, Hoi An listed in Asia’s top ten attractive destinations
The capital of Hanoi and the central ancient city of Hoi An have been listed in the 2012 top-ten attractive travel destinations in Asia.
The Hanoi Department of Culture, Sports and Tourism announced on August 22 that Hong Kong-based Smart Travel Asia, a leading online travel magazine, voted Hanoi as the 6th most attractive venue and Hoi An as 7th, successfully maintaining their positions from the previous year.
On the top of the list is Bali in Indonesia, followed by Phuket in Thailand, then Hong Kong.
The honour also means the capital will have new opportunities to promote its image and prestige to international tourism and business.
Rice prices tipped to remain high
The price of rice, especially the low-quality IR 50404, rose sharply this week, 10 days after the completion of a Government programme to buy 500,000 tonnes of the grain for reserve.
Yesterday farmers in the Mekong Delta sold undried IR 50404 paddy for VND4,800 to VND5,000 per kilogramme, and dried IR 50404 for VND5,600 - VND5,700.
Pham Thai Binh, director of Can Tho-based rice export firm Trung An Co, said rice prices increased by VND300-400 in the Mekong Delta provinces of An Giang, Dong Thap, and Tien Giang and Can Tho city in the past week.
Unpolished IR 50404 rice was sold for VND7,450-7,750, and long-grain rice for up to VND7,700. If polished, they fetched VND1,000 more.
Tran Ba Dai, a farmer in Vinh Hanh Commune in An Giang Province's Chau Thanh District, said these prices would fetch him profits of VND15 million per hectare.
"Farmers are very happy because they are selling paddy at the highest prices during this summer-autumn crop," Duong Nghia Quoc, director of the Dong Thap Department of Agriculture and Rural Development, told Viet Nam News yesterday.
At these prices, Dong Thap farmers can earn profits of 30 per cent as mandated by the Government, he said.
Tran Van Thom, a trader in An Giang Province's An Phu District, said it was the high demand for paddy from exporters and news about a new contract to sell 500,000 tonnes of rice to Indonesia that had helped push prices up.
The increasing volumes of rice bought by Cambodian traders across the border - for selling to Thailand — could push prices further up, he said.
Nguyen Trung Kien, general director of Gentraco Can Tho and deputy chairman of the Viet Nam Food Association, said rice export prices rose by US$5 per tonne from last week.
Now, 5 per cent broken rice fetched $430-440 per tonne, and 25 per cent broken rice, up to $415.
At a meeting held in Kien Giang in mid-August to collect opinions for drafting regulations on the rice reserve purchase, VFA chairman Truong Thanh Phong said paddy-rice prices would continue to rise for the rest of this year.
Binh Thuan halts new industrial parks
The People's Committee of the central province of Binh Thuan late last week asked the Ministry of Industry and Trade for approval to remove 13 industrial complexes with a combined area of over 430ha from its masterplan for 2015.
A decade ago, Binh Thuan mapped out a plan to develop more than 40 complexes with a total area of 1,628ha, but only 12 have been put into operation.
They have attracted 220 projects with total registered capital of VND513 billion (US$24.4 million), and generated 3,520 jobs for local residents.
The remaining complexes had been ratified by the province for investment development, but construction has been slow and some investors have gone out of business.
For instance, Hamico Binh Thuan Mineral JSC had registered to build infrastructure for the Ba Dang Shipbuilding Industrial Complex on an area of 50ha. However, the province decided to withdraw the project's investment certificate due to slow investment and construction.
Also under the original plan, six complexes were to be built in Duc Linh District covering a combined area of 260ha, but 10 years later, these complexes are covered by hundreds of low-tech brick kilns.
Provincial chairman Le Tien Phuong attributed the situation to the fact that the masterplan had not defined the practical demands of local enterprises, and was hence unfeasible.
According to the provincial People's Committee, slow construction at some key sites such as Ke Ga Port and the Dau Giay – Phan Thiet Highway; poor transport infrastructure; and limited water supplies and wastewater treatment systems had also hindered investment.
"The province has petitioned the Ministry of Industry and Trade and the Government to issue preferential policies to create favourable conditions for localities and provinces to attract investment in infrastructure construction and complex development, especially in disadvantaged areas," he said.
Forum examines mobile marketing
The Mobile Marketing Association will host the MMA Forum for the first time in Viet Nam on October 25 in HCM City.
The forum, organised in cooperation with Goldsun Focus Media, will be an opportunity for brands, agencies and service providers to learn more about mobile marketing from a distinguished group of speakers representing global brands.
The day-long conference will discuss the unique market dynamics of Viet Nam and also share insights on global and regional mobile-marketing best practices.
The event is expected to attract 300 industry experts and marketers from Viet Nam and other countries.
Delegates will have the opportunity to meet and exchange experiences with outstanding speakers from Google, GroupM, Mobext, Cherrypick, Opera Software, Madhouse, TeliBrahma, Ford, Millennial Media, Amobee and Yoose, among others.
The event is designed to be helpful for agencies, technology innovators and publishers looking to chart an effective mobile-marketing strategy to woo customers by integrating mobile with other channels.
Viet Nam is a key mobile market in the APAC region with over 120 million mobile subscribers.
According to global market research firm Cimigo, mobile internet users make up 60 per cent of the total number of internet users in the country.
Boom expected in mobile management software
SAP, the German technology leader in business management software and solutions, plans to double its global income, from US$110 billion in 2010 to $230 billion by 2015.
The goal was announced yesterday in HCM City at SAP's biggest annual event, the SAP Forum Viet Nam to celebrate the 40th anniversary of the company.
More than 300 customers and partners attended the forum, which discussed the latest innovations in sales, services, marketing, human resources, procurement, finance, supply chain and IT.
Smartlink expands co-operation with banks
Smartlink Card JSC is offering inter-bank money transfer services via credit cards for cardholders of two local banks (Oceanbank and VietABank).
Accordingly, cardholders of the Ocean Bank and VietABank are able to perform their transactions in the inter-bank money transfer service or receive money to cardholders of both local or international banks such as Vietcombank, ACB, Sacombank and Eximbank, TienPhongBank, SHB, HDBank, MB, GP.Bank, VPBank and VIB.
Life insurers offer new intergrated products
Generali Life Vietnam, which came to the country around a year ago from Italy, has launched GVL-Link, a client portal for group insurance that integrates products, services, and healthcare services, and benefits both customers and medical partners.
The first software of its kind, it enables customers to have information at their fingertips about the benefits and progress of claim settlement. It also helps medical partners streamline paperwork for insured customers.
Fuji Xerox to set up plant this year in Hai Phong
Construction of the Fuji Xerox Hai Phong factory will begin in December this year, with the plant set to begin operations from November 2013.
The Fuji Xerox Hai Phong project will have a charter capital of US$36 million and total investment in this project is at $113.5 million.
The plant will manufacture components for devices such as printed wiring boards and drum cartridges.
The project, to cover 176,700sq.m in the Viet Nam- Singapore Industrial Park with 46,700sqm reserved for building the plant, will also manufacture digital multi-functional devices and small-sized light-emitting diode (LED).
Domestic airlines to increase aircraft fleets
Managing director of Air Mekong Luong Hoai Nam said the airline would lease two more Airbus 321 planes, bringing the firm's total fleet to six aircraft.
The two new planes would arrive Viet Nam in December this year.
In another development, a representative of JetStar Pacific said the airline would lease four more Airbus A320 planes from now to the end of this year. It is expected to receive the first two aircraft this month.
Firms overlook provisional funds in first-half reports
Many listed companies, in order to report profits for the first half of the year, have omitted provisions for risky financial investments in their required financial reports to the nation's two stock exchanges.
Many reports were given "qualified opinions" by auditors due to the decision to delay reporting these provisions until full-year reports are prepared. A qualified opinion suggests that the information reported was limited in scope and/or the report had not adhered to GAAP accounting principles.
Petrolimex International Trading Co (PIT) posted a net profit of almost VND97 billion (US$4.6 million) in the first six months of this year, but in the reviewed first-half report, auditing firm Deloitte noted that PIT had not made the required allowance of VND3.36 billion ($160,000) against a bad debt of Derya Ticaret Co Ltd totalling VND4.85 billion ($231,000).
American Auditing Co also noted that textile company Mirae (KMR) had not made an allowance for the bad debt of its major shareholder, Fiber Tech Co, totalling VND47.33 billion ($2.3 million). By delaying the provision to the end-of-year report, KMR was able to report a net profit of VND1.08 billion ($51,400) in the first half of the year.
Reports from Vinavico Investment Construction & Mining Co (CTM), Da Nang Construction Building Materials & Cement Co (DXV) and Thang Long Telecomunications Co (TLC) were also given "qualified opinions" for the failure to make provisions for bad debts, risky financial investments or foreign exchange losses.
Semiannual reports were provided for reference for investors and were not bound by strict accounting standards like audit reports, said the head of the financial investment department of HCM City University of Economics, Le Dat Chi, in remarks made to Thoi bao Kinh te Sai Gon (Saigon Economic Times) newspaper.
In fact, auditors would not verify accounts receivable, delayed payment, or bad debts of companies in the review reports, Chi said.
"Companies are forced to make provisions for inventory changes, bad debts and securities investments in the reporting period, but if they do not do this in the first six months, it will only be deemed missing but not a violation of the regulation on setting up provisional funds," Chi said.
Nevertheless, he said, qualified opinions in the six-month reports were notable as they reflected on the financial situation of businesses and could affect their profitability at the end of the year.
New 1,300km route boosts China trade
Trucks and coaches yesterday began using a new 1,300km route linking Ha Noi in Viet Nam with Shenzen in China.
The route, together with another between Ha Noi and Nanning, was inaugurated at Lang Son Province's Huu Nghi (Friendship) border gate in the presence of leaders and transport officials from the two countries.
Previously, transport operators were only allowed to travel up to 20km into each other's national territory.
"The new agreement will have a profound impact not only on bilateral trade and tourism, but also on Greater Mekong Sub-region (GMS) transport facilitation," said Yushu Feng, principal economist for regional co-operation at the Asian Development Bank, which backed the agreement.
The removal of restrictions is expected to reduce travelling costs and time, boosting two way trade and developing an economic corridor taking in Nanning, Lang Son, Ha Noi and Hai Phong.
Under the agreement, trucks and coaches are allowed to travel between major economic zones in China's Yunnan province, Guangxi Zhuang autonomous region, Guangdong Province and six provinces in Viet Nam, including Lang Son, Quang Ninh and the cities of Ha Noi and Hai Phong.
Each country will be able to issue up to 15,100 permits for trucks and coaches for travel within the border province area, and each will be able to issue up to 500 permits for trucks and coaches to go to inland provincial areas.
Another significant route, connecting Kunming to Ha Noi and Hai Phong, was inaugurated in Kunming last Thursday.
BOT thermal plants make slow progress
Thermal power plants under the Build-Operate-Transfer (BOT) model are expected to significantly increase the power supply in Viet Nam once they are up and running. However, some projects have stalled due to problems with land clearance and capital allocation.
According to the National Power Grid Development Plan for the 2011-20 period with a vision to 2030, eight BOT thermal power plants should be completed, but progress at some sites has been slow.
Investors have asked the Government to make tax exemptions for imported materials, and said that developing infrastructure should be a common responsibility for all investors.
A representative from the Mong Duong 2 plant, which is 40 per cent completed, said that under the BOT contract, by December this year, infrastructure such as trainlines for the plant will have been completed, but progress had been slow.
Electricity of Viet Nam (EVN) had said they would provide a 500KV transmission line to plants in Quang Ninh, but work is yet to start on these projects.
Nguyen Chien Thang, deputy director of the Viet Nam National Coal and Mineral Industries Corporation (Vinacomin), told online newspaper Cong Thuong (Industry and Trade) that his corporation was determined to supply coal to Mong Duong 2 Plant, and in the worst scenario, would transport coal by road.
The Ministry of Industry and Trade (MoIT) needed to deal with land clearance issues at the Vinh Tan 1 and 3 thermo-electric plants. Vinacomin had spent VND800 billion (US$38.4 million) on land clearance but they didn't know how they would make their money back, Thang said.
Dang Hoang An, deputy general director of EVN, said that they would complete the 25-km transmission line to connect the Mong Duong 2 Plant and Quang Ninh's Ha Long City.
The cost of land clearance would be covered by electricity prices. The main issue was where to source investment capital, An said.
Party members told to strive hard to increase production
Party General Secretary Nguyen Phu Trong has called on 75,000 party members employed by corporations and banks to work harder to accomplish their objectives of business and production development.
Speaking at a meeting to review the last five years of the Party Committee of the Central Business Bloc in the capital yesterday, Trong was full of praise for the achievements gained by the Party Committee and its affiliates nationwide in the context of the global economic and financial crisis and difficulties and challenges that many state corporations had been coping with.
"Despite all this you have accomplished the tasks that the Party and Government assigned you. You have supplied essential commodities to the national economy and provided jobs for many people to ensure stable incomes," Trong said.
He said State corporations played a key role in helping the Party and Government regulate the market and stabilise the macroeconomy while promoting national economic development and defending the homeland.
In the past five years since April 2007 when the Party Committee of the Central Business Bloc was established, annually, State corporations and groups have contributed about 40 per cent of GDP – a key factor to ensure the success of social security programmes.
Trong said the bloc had made remarkable progress, particularly in the fields of personnel planning and training for future leaders.
However, he also criticised weaknesses in Party building work in many parent and affiliate companies.
"Production efficiency at many state corporations and banks has not met their potential given the amount of State investment and advantages they have been given. Many corporations have invested in non-core business activities causing huge losses to the State while undermining the reputation of State enterprises."
He asked all business party committees to pay more attention to the work of party building – a very important task laid down in Resolution 4 of the Party Central Committee.
"Strong party building work will ensure the effective implementation of political tasks assigned by the Party and Government, and promote business and production development," Trong said.
In his report, Bui Van Cuong, alternate member of the Party CC and Secretary of the Party Committee of the Central Business Bloc, said that at present the bloc had nearly 75,000 party members in 1,108 affiliate party committees and 4,798 party cells nationwide.
"We have realised our key role in national socio-economic development. We have successfully completed many projects, particularly in the northwestern and Central Highlands regions," Cuong said.
In the past five years, State corporations and groups have extended support of VND1,480 billion ($72.2 million) to 54 of the 62 poorest districts in the country, and contributed VND6 trillion ($292.7 million) to national social security programmes.
Urban railway contractor sacked
A contractor on the new Nhon-Ha Noi railway line route has been sacked for failing to meet construction deadlines.
State-owned Vinaconex 2 will be replaced after falling three months behind schedule.
The sacking was ordered by Ha Noi People's Committee Vice Chairman Nguyen Van Khoi.
The city's Urban Railway Management Board has been assigned to propose a contractor to replace Vinaconex 2, which is an offshoot of the Viet Nam Construction and Import-Export Corporation.
Work on the $865m section of railway, which includes 8.5km of aerial track, 4km of underground track and 12 stations, began in September 2010.
Agribank funds agricultural machinery manufacturing
Agribank has agreed to offer loans for the Vietnam Engine and Agricultural Machinery Corporation (VEAM) to help the manufacturer boost its agricultural machinery business.
Under the agreement, Agribank will provide VEAM and its subsidiaries with loans for their normal business activities and feasible business plans based on VEAM’s needs and Agribank’s available funds.
The State-owned lender will also create favourable conditions for VEAM’s authorised dealers to secure loans for purchasing agricultural machines manufactured by VEAM.
For its part, VEAM will open bank accounts in Vietnamese Dong and foreign currencies at Agribank branches and enjoy reasonable interest rates on loans and fees for banking services.
Trade with Russia, Belarus, Kazakhstan surges in 2012
Bilateral trade between Viet Nam and the Russia-Belarus-Kazakhstan Customs Union surged during the past seven months of this year.
Two-way trade between Viet Nam and Russia increased by 34 per cent year-on-year to US$1.34 billion, according to the General Department of Customs.
Of the total, $821 million came from Vietnamese exports including garments, computers, electronics, phones and components, seafood and coffee, up 34 per cent. Viet Nam's imports from the market topped $516 million, a yearly increase of 39 per cent.
Among Viet Nam's key import items from Russia were iron and steel, diesel, fertiliser and machinery and equipment.
During the period, trade turnover between Viet Nam and Kazakhstan also experienced impressive growth of 91.3 per cent to rake in $41 million. Of the sum, Vietnamese exports, mainly phones and accessories and seafood, contributed $32 million, while imports made up $9 million.
Meanwhile, bilateral trade with Belarus fetched $100 million during the January-July period, with Viet Nam registering a trade deficit of $91 million.
Viet Nam could increase bilateral trade with the Customs Union further, the department noted.
Russia, Belarus and Kazakhstan are negotiating a free trade agreement (FTA) with Viet Nam, which is expected to bring economic, trade, service and investment benefits to all parties.
The FTA between Viet Nam and the Customs Union of Russia, Belarus and Kazakhstan would open up prospects for a large free trade area and tighten the traditional and strategic relations between the four countries, said the head of the European Market Department under the Ministry of Industry and Trade, Dang Hoang Hai.
"Russia is interested in an FTA with Viet Nam as the Southeast Asian country may develop a strategic position that helps Russia restore its presence in Asia, particularly in the Southeast Asia region," Hai said.
The FTA would enable Viet Nam to boost its agricultural, seafood and garment exports to Russia, and Russia to export fertiliser, oil and gas, atomic energy, heavy industry and cars to Viet Nam.
Viet Nam's trade with Russia is expected to reach $5 billion in 2015 and $10 billion in 2020.
Shrimp exports to fall short
Shrimp exports seem unlikely to reach the target of US$2.5 billion this year after falling for two successive months due to rising competition from other countries and increasing costs.
The Viet Nam Association of Seafood Exporters and Producers (VASEP) reported that July shipments were down 6.8 per cent year-on-year after a 4 per cent fall the previous month.
VASEP now predicts third-quarter exports to be no more than $690 million, or 4 per cent lower than in the same period last year. It will take exports in the first three quarters to $1.7 billion.
VASEP blamed the sluggish exports on pressure caused by competition from other countries and higher input costs together with modest demand in importing countries.
Global shrimp prices are falling but demand in major markets like the US, Japan, and EU is not expected to recover soon due to the tough economic conditions.
Deputy chairman of VASEP Tran Van Linh told the Vietnam Economic Times that Viet Nam was losing its competitiveness despite selling shrimp at very low prices, sometimes as low as the cost of raw shrimp.
At the same time major foreign feed companies, which dominate the domestic market, have been hiking prices, he said.
VASEP said the situation would improve if the Government, in Q3 and subsequently, provided support by cutting interest rates and increasing lending to the industry.
Only a third of seafood producers have been able to keep production unchanged, it said, while the others faced a cash crunch and cannot resume exports without financial support.
Vietnamese shrimp is exported to 62 markets around the world.
Japan is the biggest, followed by the US, EU, and UK.
Exports to most of these markets have been declining.
In the US, Vietnamese shrimp exporters have to compete with those from Thailand, Indonesia, Ecuador, and mainland China.
Stalled projects rife in southern province
The southern province of Ba Ria-Vung Tau is struggling to speed up tardy foreign-invested projects, the investors of some of which cannot even be traced.
People's Committee chairman Phan Hoa Binh said there have been no replies to many official letters ordering investors to speed up progress.
In some cases, they cannot be contacted by phone or summoned, Nhan Dan (The People) reports.
One project that has been long delayed is the Vung Tau International Marvellous Park, a 100 per cent foreign-invested project by the US-Viet Nam Good Choice Company Ltd.
The province's largest project by investment – US$1.3 billion – was expected to completely change the investment scene when finished.
But since 2008, when it was licensed, there has been no progress and the investors have disappeared.
In a similar situation is the 500-bed $300-million IMI Vung Tau Hospital.
After a grand groundbreaking ceremony, the project ground to a halt.
The Department of Investment and Planning has recommended that the People's Committee should cancel the licences issued for these projects.
A department official said it took two or three years to issue a licence and it needed the same time to cancel it.
Many investors, including those behind the IMI Vung Tau Hospital, seek more time to start saying they need to raise funds, a not unreasonable request considering the economic meltdown.
But authorities are unable to meet many of them for discussions. One more problem for them is that correspondence with people based in foreign countries is expensive.
The department said it cost more than VND10 million ($500) to send two dispatches to the USA-Viet Nam Good Choice Company in the US.
It plans to seek help from foreign diplomatic agencies to resolve this problem.
Ba Ria-Vung Tau, situated in the Key Southern Economic Region, has been among the most successful provinces in attracting FDI. But it is also one of the provinces with the lowest FDI disbursement. In the first seven months of this year investors only disbursed $7.2 billion, or 26.6 per cent of registered capital.
Vinacomin to export coal to South Africa, Cuba
The Viet Nam National Coal, Mineral Industries Holding Group (Vinacomin) will export approximately 25,000 tonnes of coal to South Africa next month while planning to ship an addtional of 18,000 tonnes to Cuba in November.
The group has recently asked its affiliates including Cua Ong Coal Preparation Co, Dong Bac Corp and Uong Bi, Nam Mau, Hon Gai coal companies and to ensure efficient coal resources to meet these two export plans.
Earlier, Vinacomin official website quoted Nguyen Xuan Minh, head of the group's commercial department saying that the group's coal exports showed an recovery signal this month as it had won contracts to ship 3 million tonnes of coal abroad.
Of the total, Chinese counterparts would bought 2 million tonnes.
In the first half of 2012, Vinacomin exported nearly 7 million tonnes of coal. However, in July alone, the group has exported only 300,000 tonnes of coal.
As of last month, its coal stockpiles had reached 10.5 million tonnes due to difficulties it had encountered in both domestic and international markets.
Vinacomin has recently petitioned the Government to reduce the coal export tax from 20 to 10 per cent this year to help the corporation avoid further losses, said its deputy general director of Vinacomin Nguyen Van Bien.
Despite this, Vinacomin had incurred losses of VND8 trillion (US$380 million) every year on average for several years, because it sells coal for power production at below market prices under a Government subsidy programme.
Unwanted SMS still harass mobile subscribers
After a Circular issued by the Ministry of Information and Communications, effective since April 13, mobile phone subscribers still cannot escape harassment of unwanted advertisers and irritating marketing messaging, which they had hoped they would be free off.
Mobile subscribers still suffer harassment with unwanted SMS because of one-time subscribers who buy a SIM card without registering or providing personal information
Besides they are required to provide details such as full name, ID or passport number and date of birth, when registering for a new mobile phone or else mobile operators have instructions to stop providing service.
According to the ministry, mobile service providers add 10 million new subscribers each year, 80 percent of whom are one-time subscribers who buy a SIM card without registering or providing personal information.
Because of unhealthy competition among mobile operators, all of who want to increase their number of mobile phone subscribers, post-paid subscribers often suffer at cost of prepaid subscribers.
The ministry should thus tighten management of mobile operators, who have to further control agents and Sim card distributors throughout the country.
Experts say that to fully develop the mobile market, post-paid subscribers must be increased and also given more focus, rather than cater to prepaid subscribers.
Vietnam’s fresh milk industry considered best in Southeast Asia
According to Friesland Campina Vietnam (FCV), their sixteen-year campaign (1995-2012) to improve the quality of the milk industry in Vietnam through its Dutch Lady brand at an investment of about US$15 million, has proved to be a huge success.
Both the quality of milk and the quality of the source in Vietnam has been adjudged the best in all of Southeast Asia.
This in turn, has made cow farmers more confident and has also created a multitude of opportunities to improve living standards in the country.
The bacteria level in unpasteurized milk at the moment is under 300,000cfu per ml.
Moreover, productivity of milk continuously rose from 11.4kg per cow per day in 2005 to 13.2kg per cow per day in 2011.
Revenue from milk has gone up from 2.9-9.9 percent in 2006 to 22 percent in 2012. Ranches with more than 40 cows can even target an increase of 28 percent this year.
Low-cost home buyers must be patient
Information about low-cost houses has been mentioned much lately, but the public wonders whether this housing model can develop and when low-income earners can approach such housing products.
The program to develop low-cost housing projects is moving at a slow pace due to several reasons, including failure to lure property developers.
A report of the HCMC Steering Committee for Housing Policy and Real Estate Market shows that the city’s government has in principle approved low-cost housing projects of six investors. When completed, these projects will supply around 8,760 apartments, addressing the need of over 31,000 people.
However, so far only the project called Hanh Phuc Residential Area in Binh Chanh District has got off the ground, but its progress is quite slow because of financial constraints.
Not to mention the financial capability of low-income people, finding a cheap condo in big cities like HCMC is a pipe dream.
Minister of Construction Trinh Dinh Dung said on the Government web portal that low-cost housing projects were feasible in vast and lowly-populated areas, enabling the development of low-rise houses to save construction costs.
Meanwhile, in populous cities like Hanoi and HCMC, it is impossible to build low-rise condo buildings. Therefore, construction costs are prohibitively high, making it hard to provide actually cheap houses.
With the current house prices, the majority of low-income people are unable to buy homes, the minister remarked.
Decree 71 of the Government has established a legal corridor for budget housing development. Particularly, the State will use funds from the central State budget to develop low-cost houses and introduce attractive policies to woo investors.
Tax and land use fee incentives and credit supports are offered to attract realty firms to invest in the low-cost housing model. Still, many businesses are not so keen on this program.
At a meeting with the HCMC Real Estate Association early this year, the municipal construction department admitted preferential policies for low-cost housing projects had failed to encourage investors to join this model. It is because of the longer time for capital recovery and low profit.
Moreover, the screening of eligible homebuyers is also an obstacle for investors. With commercial housing projects, investors can deal with any customer, but low-cost housing project owners can only sell houses to those in the list approved by State management agencies.
There is a suggestion that condos for lease should be built instead of cheap houses under social program, encouraging citizens to switch from buying to renting houses. The point is which policies will support investors as the capital recovery period of house-for-lease projects will be even longer than that of the low-cost housing ones.
In its housing development strategy, the construction ministry does set a goal to develop apartments for lease. However, only time will tell when this housing model will thrive in the market.
Ernst & Young Vietnam’s sage advice
The conference " 2012 Vietnam Insurance - Towards customer - centric insurance" was held by Ernst & Young Vietnam on August 22 in cooperation with the Ministry of Finance’s Insurance Supervisory Authority.
According to an insurance customer survey released earlier this year by Ernst & Young, the combination of increased expectations and accessible technology meant that the insurance industry now faced more demanding customers and those service providers who fail to make a rapid move to a more customer-friendly business model risk being left behind.
Vietnam’s insurance industry experienced double-digit growth in the past few years and is forecasted to have similar grow trajectory in the coming year. The underpenetrated insurance market in Vietnam offers a sumptuous growth opportunity for domestic and multi-national insurers. With 70 per cent of population below the age of 40, Vietnam has a sounded base to develop an attractive young affluent segment. Together with the strong GDP growth and growing number of the middle class, there is a year for insurance services.
Saman Bandara, Vietnam insurance leader at Ernst & Young, said: “Both the number of new policies and first-year-premium of new business grew faster than total policies and gross written premium in the last five years. The market experienced a shifted trend from traditional products to investment products. As such, consumers are becoming more sophisticated. Their expectation is constantly evolving and the insurance industry has not always managed to keep pace.”
Ernst & Young global insurance customer survey found that, while there are variations in customer attitudes and behaviours around the globe, there are some remarkably consistent underlying themes about what consumers want and where they expect more from insurers. “Being customer-centric is the key to develop and sustain business in a highly competitive market like Vietnam,” Bandara said.
The survey also pointed out that 89 per cent of Asia-Pacific consumers said personal interaction was essential.
“While the number of agents recruited continues to increase, with CAGR of 27 per cent, we envisage distribution channels for the industry in Vietnam will become multi touch-points catering for different segments. Online, bancassurance, mobile and social media will be deployed for targeted campaigns. This will be more effective given the some of the younger customers are becoming more self-directed,” said May Knight, Partner of Ernst & Young Asia-Pacific Advisory Services.
Besides, Ernst & Young’s experts emphasized the important role of speed of claim process as always on top of the list for improvement. While good claim process may not directly render loyalty, 16 per cent of the surveyed respondents replied that a bad claim experience will surely encourage switch.
“Claim plays an important part in the insurer’s operations model. Though it is more crucial for general than life insurers, a well-managed claims process enables the insurer to deliver high performance. A number of insurers in the region have already invested in technologies to transform their customers’ claims experience,” said Ian Cheng, director for Ernst & Young Advisory Services in Asia Pacific.
Changing customer behaviour coupled with evolving regulatory environment, especially on consumer protection, are driving insures to take a more proactive approach to grow their business. “Insurers that align themselves to a truly customer centric model will find this transition to the new customer & regulatory regime less painful, and will gain competitive advantage,” said Bandara.
Licenses needed for coldwater fish farming
Individuals and enterprises need to ask for licenses at the provincial Department of Agriculture and Rural Development to raise coldwater fish, according to the General Directorate of Fisheries and the agriculture ministry.
Farming two coldwater fish, namely sturgeon and salmon, have been developed in Vietnam since 2005, mainly in reservoirs of hydropower plants and irrigation systems. Nguyen Viet Thuy, deputy director of the National Breeding Center for Freshwater Aquaculture under Research Institute for Aquaculture No.3, said those wanting to farm the fish need to apply for licenses with the agriculture department in their localities.
Le Van Quang, deputy director of the Da Nhim-Ham Thuan-Da Mi hydropower plant, said a number of companies are raising sturgeon at the reservoir of his firm with the total output volume of about 100 tons a year.
“We only manage and operate water levels and the hydropower plant, not managing fish farming businesses in the lake. Therefore, interested firms just need to ask for permission from Binh Thuan Province’s agriculture department to develop small-scale farming at our reservoir while the approval of the provincial government is needed for large-scale farming,” he stated.
In 2005, Research Institute for Aquaculture No.1 launched a pilot project to raise coldwater fish in Sa Pa District in Lao Cai Province. Now the fish farming has been expanded to Lai Chau, Yen Bai, Tuyen Quang, Son La, Lam Dong and Binh Thuan provinces among others.
The country’s total output of coldwater fish reaches 800 tons annually, with Lam Dong contributing up to a half.
Road to getting transport sector in order
Industry players are weighing over a draft decree to put the auto transport market into order.
The Ministry of Transport (MoT) just submitted to the prime minister a document relevant to a draft decree amending and supplementing some articles in Decree 91/2009/ND-CP dated October 21, 2009 regulating road transport business and business conditions for service provision.
Accordingly, the compiling body (MoT) accepted to abolish a regulation on minimal car numbers a business entity must have in order to get a licence on road transport business and taxis services provision.
The regulation used to be inserted into previous three draft decrees. Accordingly, businesses and passenger transport trading firms running on fixed routes above a 300 kilometre distance must have at least five car units offering the service.
Similarly, to get a licence taxis trading businesses must have at least 20 car units. The MoT once expected the regulation would be an important tool to bolster the service quality.
However, in document 5734/BTP-PKDSKT providing input to the draft decree Deputy Minister of Justice Dinh Trung Tung suggested state management agencies should only take care of the service quality and traffic safety instead of involving too deeply into firms’ business.
From the part of businesses, deputy director Nguyen Kien at Thai Binh-based Long Thu Passenger Transport -which runs on Thai Binh-Lai Chau route - assumed if the regulation was tightened, small firms would be financially incapable to run on long routes.
Some road transport associations, however, supposed such requirement should not be removed.
Hanoi Transport Association chairman Bui Danh Lien recently proposed the MoT build up standards to oust unqualified firms from joining north-south road transport service provision.
Besides, to restore order in road passenger transport the MoT asked the premier to supplement the draft decree with conditions on taking back transport firms’ business licences.
Accordingly, firms transporting passengers and containers on fixed routes and taxis businesses will have their licences taken back in the following cases - having 5 per cent of operating cars in which the drivers incurred faults relevant to travel itinerary, having 20 per cent of operating cars impinged on speed regulations, having 20 per cent of cars picking up and releasing passengers not in right places and having 10 per cent of cars in which drivers incurred time related faults.
“Sanction measures regulated in Decree 91 were not severe enough to punish short-sighted firms,” said MoT’s Directorate for Road of Vietnam deputy chief Nguyen Van Quyen.
“Once adopted, new sanctions would help bring road passenger transport into order and contribute to slashing cases of horrible traffic accidents currently on the rise in Vietnamese roads,” National Traffic Safety Committee former deputy chief of office Nguyen Cong Ha said.
Agribank funds agricultural machinery manufacturing
Agribank has agreed to offer loans for the Vietnam Engine and Agricultural Machinery Corporation (VEAM) to help the manufacturer boost its agricultural machinery business.
Under the agreement, Agribank will provide VEAM and its subsidiaries with loans for their normal business activities and feasible business plans based on VEAM’s needs and Agribank’s available funds.
The State-owned lender will also create favourable conditions for VEAM’s authorised dealers to secure loans for purchasing agricultural machines manufactured by VEAM.
For its part, VEAM will open bank accounts in Vietnamese Dong and foreign currencies at Agribank branches and enjoy reasonable interest rates on loans and fees for banking services.
Bac Ninh seeks incentives for Samsung project
Bac Ninh Province is seeking Government approval to give investment incentives to an expansion project of Samsung Electronics Vietnam (SEV) in which its capital will rise to US$1.5 billion from the current US$670 million.
The province has written to the Prime Minister suggesting incentives for the investment expansion of SEV in the Yen Phong Industrial Park.
The South Korean investor submitted the same proposal to the Government at the end of last year, saying it wanted to enjoy a corporate income tax rate of 10% during the project’s lifetime, a four-year corporate income tax exemption and a 50% reduction of the tax for the following nine years for all electric and electronics products of the project.
In fact, the prevalent rule stipulates investment incentives are not given to capital increase projects.
According to Bac Ninh’s report, the expansion project of SEV might be mulled for corporate income tax incentives as this is a high-tech investor. The company as
a high-tech investor has enjoyed a preferential income tax rate of 10% for 15 years, a tax exemption for four years and a 50% tax reduction for the following nine years after it reports taxable incomes.
The province proposed the Government give the above special treatment to the expanded part of the project based on the post-check mechanism. This means the Ministry of Science and Technology, in collaboration with related agencies, will evaluate the high-tech criteria of the expansion scheme and revoke all incentives if it fails to meet the conditions during the implementation process.
At the same time, the investment incentives set aside for the expansion will be adjusted as well.
According to Bac Ninh, the investment project to establish the Samsung technology complex in Vietnam is an enormous scheme and it has been deployed in line with schedule and commitments with the Government. The firm as of end-2011 had disbursed US$492 million into the project, and plans to continue injecting another US$684.7 million as of late 2012.
The project this year has created jobs for 23,000 locals and has total output capacity of 100 million products for the whole year, with sales estimated to amount to US$10 billion including an export value of US$9.5 billion.
Poor human resources and management were among the reasons why real estate companies were facing so many difficulties, Nguyen Ngoc Thanh, deputy chairman of the Viet Nam National Real Estate Association, said at a conference held earlier this month.
Investors at the Ecopark real estate trading floor in Ha Noi.
Viet Nam is facing a serious shortage of well-trained staff in the real estate sector.
His statement mirrored the same opinion held by Dr Nguyen Minh Ngoc, deputy head of the National Economics University (NEU)'s Real Estate and Resource Economics Faculty, who attributed failure in the real estate sector to low professionalism.
That was partly because the majority of people working in real estate did not receive proper training or any training at all, Ngoc said.
According to Thoi bao Kinh te Viet Nam (VNEconomy) e-newspaper, a survey conducted by Ernst and Young revealed that 70 per cent of people working in the real estate sector said they struggled to do business and benefit from the industry.
The Viet Nam National Real Estate Association said Viet Nam currently had 446 colleges and universities, but only a few offered proper training in real estate.
The country, therefore, was facing a serious shortage of staff professionally trained in real estate, especially those who met international standards.
Ngoc said the NEU was currently the only university with a real estate faculty.
There were only several other universities in Ha Noi and HCM City that taught real estate related subjects, while training centres only offered short-term courses that lasted a few months.
Ngoc said that society as a whole, including policy makers, was not aware of the importance of training in real estate.
Many people, including business owners, thought they just needed money and some experience to invest in real estate.
Real estate investors, Ngoc pointed out, made investments either through real estate brokers or following their own ideas of the real estate market.
"Some people do not even consider taking short-term courses, let alone going to university to get a degree."
Nevertheless, there were dozens of thousands of people working in real estate or real estate-related sectors and there were about 10,000 operating real estate brokerage agencies.
Nguyen Thanh Nam, a former real estate agent in Ha Noi, said he had a major in banking, but did not receive any training in real estate before he was employed by his former company.
"Most of my former colleagues did not study real estate at college, although they did have degrees in business administration or banking," Nam said, adding that real estate companies often did not require their employees to have a degree in real estate.
Dr Ngoc said every economy was dependent on the development of the real estate industry.
He added that in many countries including Singapore and Japan, training in real estate was deemed very important, and most economics and technical universities either had a real estate department or offered courses in real estate.
In these countries, training in real estate was regarded as important as banking and finance, but there were only a few hundred people receiving university-level training in Viet Nam each year as opposed to 25-30,000 people pursuing a major in banking or finance, said Ngoc.
"Only two third of these graduates pursue real estate as a profession, while the rest pursue other areas."
In the past four years, around 50,000 people have received short-term training in real estate and obtained certificates.
Ngoc said it was important to raise social awareness about the importance of training in real estate.
He added policy makers in particular must be more aware.
The Viet Nam National Real Estate Association said it would organise training courses in the third and fourth quarters of this year. The programme is currently recruting learners.
But Ngoc of the National Economics University said that his university was not involved in these programmes.
He said there was a lack of co-operation among universities that offered training in real estate and between those universities and State management organisations.
British Telecom eyes Vietnam market
The British telecom giant is seeking business opportunities in Asian countries with high growth and large population, including Vietnam.
Channelnewsasia.com reported that BT regards those potential markets of Vietnam, the Philippines and Indonesia as key drivers of its expansion strategy in the near future.
The news wire quoted Tim Harris, CEO of British Telecom Southeast Asia, as saying BT plans to double its market share in Asia.
"We're very positive on Asia. We grew a double digit growth last year, and our intention is to grow twice the size at the market,” said Harris. “We'll be investing significantly further into the region. Because that's where we see our customers investing a lot at the moment."
BT said the Asian market for its services is growing strongly at 6 percent a year overall and 15 percent for managed services. It estimates that the Asian market for its services is worth 8 billion pounds (US$12.56 billion).
EWEC 2012 Fair attracts 30,000 visitors
The 2012 International East-West Economic Corridor (EWEC) Trade and Tourism Fair in the central city of Danang has drawn 30,000 visitors and fetched more than VND3 billion.
There were 300 stalls put up by nearly 200 domestic and foreign businesses, including those from Laos, Thailand, Myanmar, Finland, to showcase different kinds of products such as wood furniture, coffee, cosmetics, household commodities, electronic spare parts, and high-technology equipment.
The fair successfully closed on August 21, creating favourable conditions for domestic and foreign businesses to seek trade and investment opportunities and promote tourism services.
Global crisis under discussion in Hanoi
Forty scholars from Vietnam and abroad discussed the global financial crisis and assessed strategies from left-wing and progressive social movements throughout Southeast Asia.
The August 21-22 conference, held by the Vietnamese Peace and Development Foundation (VPDF) in coordination with the Rosa Luxemburg Stiftung (RLS) and the South-South People’s Solidarity Network, aimed to identify the impact of the current crisis and develop new solutions to it.
Addressing the event, Former Vice-State President Nguyen Thi Binh reviewed the world’s complicated socio-economic situation to date as well as the responses from various social movements in Southeast Asia over recent years.
The 2007-08 global financial crisis, compounded by the recent public debt problems in the eurozone, have led to serious consequences facing global prosperity, especially considering other challenges such as the environment, food security, climate change, and society, she said.
Binh, who is also VPDF President, highlighted the development of progressive social movements in Southeast Asia.
She also noted that social institutions have promoted the exchange of information and fostered cooperative partnerships, contributing to the establishment of an ASEAN community that ultimately aspires to world peace, economic development and political stability.
Binh then briefed participants on the socio-economic situation in Vietnam, saying that the Renewal Process has paid off well to make Vietnam become a middle-income nation.
It not only offers opportunities but also poses challenges for Vietnam given the global context, she said.
During the two-day event, participants reviewed the impact of the interlocking crises – ecological, debt, financial, food, energy and climate - which confronts everyone.
They said that measures taken by states and international institutions so far have not been able to get to the root of the problem, but have merely transferred the burden from financial institutions to the public as well as worsened the situation across economic, social, and political spheres.
Youth unemployment in the EU has increased 22.6 percent since 2008 with Greece, Spain, Portugal, and Italy having the highest rates at over 50 percent, they cited.
In Asia, more than 900 million people live in extreme poverty, 1.08 billion work in insecure employment and 600 million go hungry every day.
The conference also discussed the situation of people’s movements and the strategies of Southern countries in dealing with the crisis.
Denmark assists agricultural development in Dak Lak
More than VND30 billion out of the VND56.5 billion committed by Denmark for the Central Highland province of Dak Lak has been disbursed so far this year.
Provincial leaders reported the figure at a working session with the Deputy Ambassador Lis Rosenholm in Dak Lak on August 22.
Dak Lak is one of the five provinces which benefit from the agricultural and rural development programme funded by the Danish Government.
This year, VND56.5 billion has been assigned to the province to develop rural areas, improve living standards for the poor, build irrigation works, increase competitiveness, expand markets and protect natural resources and the environment.
Nguyen Huu Chung, Vice-Director of the Provincial Department of Agriculture and Rural Development, said the province has established steering boards to manage the funding, which will deliver numerous socio-economic benefits to local people.
At the working session, the provincial leaders also proposed that Demark provide additional aid of VND55 billion for the province to implement the support programme in 2013.
Ms Lis agreed with the proposal and said the aid will be announced in September.
Vietnam-China int’l roads open to public
An opening ceremony for new overland routes that link Hanoi to Nanning and Shenzhen took place at the Huu Nghi Border Gate in the northern province of Lang Son on August 22.
The event is a landmark in Vietnamese-Chinese economic and trade cooperation, deepening their comprehensive ties.
The roads will shorten waiting times, reduce transport costs and make it more convenient for people to travel and exchange trade between the two countries across their land borders.
They also testify to the close ties between Lang Son and the Guangxi Zhuang Autonomous Region (GZAR) in recent years.
The two localities are working together to develop the Nanning-Lang Son-Hanoi-Haiphong economic corridor, in line with the agreement on “two corridors, one economic belt” signed by top Vietnamese and Chinese leaders.
The new corridor makes up part of the greater Nanning-Singapore economic corridor that has boosted relations between China, Vietnam and other ASEAN countries.
During the past year, Lang Son has endeavoured to create preferential conditions for transport activities from Vietnam to China and vice versa.
There are presently over 30,000 vehicles carrying goods and 40,000-50,000 taking people across the border region every year.
Hanoi, Hoi An listed in Asia’s top ten attractive destinations
The capital of Hanoi and the central ancient city of Hoi An have been listed in the 2012 top-ten attractive travel destinations in Asia.
The Hanoi Department of Culture, Sports and Tourism announced on August 22 that Hong Kong-based Smart Travel Asia, a leading online travel magazine, voted Hanoi as the 6th most attractive venue and Hoi An as 7th, successfully maintaining their positions from the previous year.
On the top of the list is Bali in Indonesia, followed by Phuket in Thailand, then Hong Kong.
The honour also means the capital will have new opportunities to promote its image and prestige to international tourism and business.
Rice prices tipped to remain high
The price of rice, especially the low-quality IR 50404, rose sharply this week, 10 days after the completion of a Government programme to buy 500,000 tonnes of the grain for reserve.
Yesterday farmers in the Mekong Delta sold undried IR 50404 paddy for VND4,800 to VND5,000 per kilogramme, and dried IR 50404 for VND5,600 - VND5,700.
Pham Thai Binh, director of Can Tho-based rice export firm Trung An Co, said rice prices increased by VND300-400 in the Mekong Delta provinces of An Giang, Dong Thap, and Tien Giang and Can Tho city in the past week.
Unpolished IR 50404 rice was sold for VND7,450-7,750, and long-grain rice for up to VND7,700. If polished, they fetched VND1,000 more.
Tran Ba Dai, a farmer in Vinh Hanh Commune in An Giang Province's Chau Thanh District, said these prices would fetch him profits of VND15 million per hectare.
"Farmers are very happy because they are selling paddy at the highest prices during this summer-autumn crop," Duong Nghia Quoc, director of the Dong Thap Department of Agriculture and Rural Development, told Viet Nam News yesterday.
At these prices, Dong Thap farmers can earn profits of 30 per cent as mandated by the Government, he said.
Tran Van Thom, a trader in An Giang Province's An Phu District, said it was the high demand for paddy from exporters and news about a new contract to sell 500,000 tonnes of rice to Indonesia that had helped push prices up.
The increasing volumes of rice bought by Cambodian traders across the border - for selling to Thailand — could push prices further up, he said.
Nguyen Trung Kien, general director of Gentraco Can Tho and deputy chairman of the Viet Nam Food Association, said rice export prices rose by US$5 per tonne from last week.
Now, 5 per cent broken rice fetched $430-440 per tonne, and 25 per cent broken rice, up to $415.
At a meeting held in Kien Giang in mid-August to collect opinions for drafting regulations on the rice reserve purchase, VFA chairman Truong Thanh Phong said paddy-rice prices would continue to rise for the rest of this year.
Binh Thuan halts new industrial parks
The People's Committee of the central province of Binh Thuan late last week asked the Ministry of Industry and Trade for approval to remove 13 industrial complexes with a combined area of over 430ha from its masterplan for 2015.
A decade ago, Binh Thuan mapped out a plan to develop more than 40 complexes with a total area of 1,628ha, but only 12 have been put into operation.
They have attracted 220 projects with total registered capital of VND513 billion (US$24.4 million), and generated 3,520 jobs for local residents.
The remaining complexes had been ratified by the province for investment development, but construction has been slow and some investors have gone out of business.
For instance, Hamico Binh Thuan Mineral JSC had registered to build infrastructure for the Ba Dang Shipbuilding Industrial Complex on an area of 50ha. However, the province decided to withdraw the project's investment certificate due to slow investment and construction.
Also under the original plan, six complexes were to be built in Duc Linh District covering a combined area of 260ha, but 10 years later, these complexes are covered by hundreds of low-tech brick kilns.
Provincial chairman Le Tien Phuong attributed the situation to the fact that the masterplan had not defined the practical demands of local enterprises, and was hence unfeasible.
According to the provincial People's Committee, slow construction at some key sites such as Ke Ga Port and the Dau Giay – Phan Thiet Highway; poor transport infrastructure; and limited water supplies and wastewater treatment systems had also hindered investment.
"The province has petitioned the Ministry of Industry and Trade and the Government to issue preferential policies to create favourable conditions for localities and provinces to attract investment in infrastructure construction and complex development, especially in disadvantaged areas," he said.
Forum examines mobile marketing
The Mobile Marketing Association will host the MMA Forum for the first time in Viet Nam on October 25 in HCM City.
The forum, organised in cooperation with Goldsun Focus Media, will be an opportunity for brands, agencies and service providers to learn more about mobile marketing from a distinguished group of speakers representing global brands.
The day-long conference will discuss the unique market dynamics of Viet Nam and also share insights on global and regional mobile-marketing best practices.
The event is expected to attract 300 industry experts and marketers from Viet Nam and other countries.
Delegates will have the opportunity to meet and exchange experiences with outstanding speakers from Google, GroupM, Mobext, Cherrypick, Opera Software, Madhouse, TeliBrahma, Ford, Millennial Media, Amobee and Yoose, among others.
The event is designed to be helpful for agencies, technology innovators and publishers looking to chart an effective mobile-marketing strategy to woo customers by integrating mobile with other channels.
Viet Nam is a key mobile market in the APAC region with over 120 million mobile subscribers.
According to global market research firm Cimigo, mobile internet users make up 60 per cent of the total number of internet users in the country.
Boom expected in mobile management software
SAP, the German technology leader in business management software and solutions, plans to double its global income, from US$110 billion in 2010 to $230 billion by 2015.
The goal was announced yesterday in HCM City at SAP's biggest annual event, the SAP Forum Viet Nam to celebrate the 40th anniversary of the company.
More than 300 customers and partners attended the forum, which discussed the latest innovations in sales, services, marketing, human resources, procurement, finance, supply chain and IT.
Smartlink expands co-operation with banks
Smartlink Card JSC is offering inter-bank money transfer services via credit cards for cardholders of two local banks (Oceanbank and VietABank).
Accordingly, cardholders of the Ocean Bank and VietABank are able to perform their transactions in the inter-bank money transfer service or receive money to cardholders of both local or international banks such as Vietcombank, ACB, Sacombank and Eximbank, TienPhongBank, SHB, HDBank, MB, GP.Bank, VPBank and VIB.
Life insurers offer new intergrated products
Generali Life Vietnam, which came to the country around a year ago from Italy, has launched GVL-Link, a client portal for group insurance that integrates products, services, and healthcare services, and benefits both customers and medical partners.
The first software of its kind, it enables customers to have information at their fingertips about the benefits and progress of claim settlement. It also helps medical partners streamline paperwork for insured customers.
Fuji Xerox to set up plant this year in Hai Phong
Construction of the Fuji Xerox Hai Phong factory will begin in December this year, with the plant set to begin operations from November 2013.
The Fuji Xerox Hai Phong project will have a charter capital of US$36 million and total investment in this project is at $113.5 million.
The plant will manufacture components for devices such as printed wiring boards and drum cartridges.
The project, to cover 176,700sq.m in the Viet Nam- Singapore Industrial Park with 46,700sqm reserved for building the plant, will also manufacture digital multi-functional devices and small-sized light-emitting diode (LED).
Domestic airlines to increase aircraft fleets
Managing director of Air Mekong Luong Hoai Nam said the airline would lease two more Airbus 321 planes, bringing the firm's total fleet to six aircraft.
The two new planes would arrive Viet Nam in December this year.
In another development, a representative of JetStar Pacific said the airline would lease four more Airbus A320 planes from now to the end of this year. It is expected to receive the first two aircraft this month.
Firms overlook provisional funds in first-half reports
Many listed companies, in order to report profits for the first half of the year, have omitted provisions for risky financial investments in their required financial reports to the nation's two stock exchanges.
Many reports were given "qualified opinions" by auditors due to the decision to delay reporting these provisions until full-year reports are prepared. A qualified opinion suggests that the information reported was limited in scope and/or the report had not adhered to GAAP accounting principles.
Petrolimex International Trading Co (PIT) posted a net profit of almost VND97 billion (US$4.6 million) in the first six months of this year, but in the reviewed first-half report, auditing firm Deloitte noted that PIT had not made the required allowance of VND3.36 billion ($160,000) against a bad debt of Derya Ticaret Co Ltd totalling VND4.85 billion ($231,000).
American Auditing Co also noted that textile company Mirae (KMR) had not made an allowance for the bad debt of its major shareholder, Fiber Tech Co, totalling VND47.33 billion ($2.3 million). By delaying the provision to the end-of-year report, KMR was able to report a net profit of VND1.08 billion ($51,400) in the first half of the year.
Reports from Vinavico Investment Construction & Mining Co (CTM), Da Nang Construction Building Materials & Cement Co (DXV) and Thang Long Telecomunications Co (TLC) were also given "qualified opinions" for the failure to make provisions for bad debts, risky financial investments or foreign exchange losses.
Semiannual reports were provided for reference for investors and were not bound by strict accounting standards like audit reports, said the head of the financial investment department of HCM City University of Economics, Le Dat Chi, in remarks made to Thoi bao Kinh te Sai Gon (Saigon Economic Times) newspaper.
In fact, auditors would not verify accounts receivable, delayed payment, or bad debts of companies in the review reports, Chi said.
"Companies are forced to make provisions for inventory changes, bad debts and securities investments in the reporting period, but if they do not do this in the first six months, it will only be deemed missing but not a violation of the regulation on setting up provisional funds," Chi said.
Nevertheless, he said, qualified opinions in the six-month reports were notable as they reflected on the financial situation of businesses and could affect their profitability at the end of the year.
New 1,300km route boosts China trade
Trucks and coaches yesterday began using a new 1,300km route linking Ha Noi in Viet Nam with Shenzen in China.
The route, together with another between Ha Noi and Nanning, was inaugurated at Lang Son Province's Huu Nghi (Friendship) border gate in the presence of leaders and transport officials from the two countries.
Previously, transport operators were only allowed to travel up to 20km into each other's national territory.
"The new agreement will have a profound impact not only on bilateral trade and tourism, but also on Greater Mekong Sub-region (GMS) transport facilitation," said Yushu Feng, principal economist for regional co-operation at the Asian Development Bank, which backed the agreement.
The removal of restrictions is expected to reduce travelling costs and time, boosting two way trade and developing an economic corridor taking in Nanning, Lang Son, Ha Noi and Hai Phong.
Under the agreement, trucks and coaches are allowed to travel between major economic zones in China's Yunnan province, Guangxi Zhuang autonomous region, Guangdong Province and six provinces in Viet Nam, including Lang Son, Quang Ninh and the cities of Ha Noi and Hai Phong.
Each country will be able to issue up to 15,100 permits for trucks and coaches for travel within the border province area, and each will be able to issue up to 500 permits for trucks and coaches to go to inland provincial areas.
Another significant route, connecting Kunming to Ha Noi and Hai Phong, was inaugurated in Kunming last Thursday.
BOT thermal plants make slow progress
Thermal power plants under the Build-Operate-Transfer (BOT) model are expected to significantly increase the power supply in Viet Nam once they are up and running. However, some projects have stalled due to problems with land clearance and capital allocation.
According to the National Power Grid Development Plan for the 2011-20 period with a vision to 2030, eight BOT thermal power plants should be completed, but progress at some sites has been slow.
Investors have asked the Government to make tax exemptions for imported materials, and said that developing infrastructure should be a common responsibility for all investors.
A representative from the Mong Duong 2 plant, which is 40 per cent completed, said that under the BOT contract, by December this year, infrastructure such as trainlines for the plant will have been completed, but progress had been slow.
Electricity of Viet Nam (EVN) had said they would provide a 500KV transmission line to plants in Quang Ninh, but work is yet to start on these projects.
Nguyen Chien Thang, deputy director of the Viet Nam National Coal and Mineral Industries Corporation (Vinacomin), told online newspaper Cong Thuong (Industry and Trade) that his corporation was determined to supply coal to Mong Duong 2 Plant, and in the worst scenario, would transport coal by road.
The Ministry of Industry and Trade (MoIT) needed to deal with land clearance issues at the Vinh Tan 1 and 3 thermo-electric plants. Vinacomin had spent VND800 billion (US$38.4 million) on land clearance but they didn't know how they would make their money back, Thang said.
Dang Hoang An, deputy general director of EVN, said that they would complete the 25-km transmission line to connect the Mong Duong 2 Plant and Quang Ninh's Ha Long City.
The cost of land clearance would be covered by electricity prices. The main issue was where to source investment capital, An said.
Party members told to strive hard to increase production
Party General Secretary Nguyen Phu Trong has called on 75,000 party members employed by corporations and banks to work harder to accomplish their objectives of business and production development.
Speaking at a meeting to review the last five years of the Party Committee of the Central Business Bloc in the capital yesterday, Trong was full of praise for the achievements gained by the Party Committee and its affiliates nationwide in the context of the global economic and financial crisis and difficulties and challenges that many state corporations had been coping with.
"Despite all this you have accomplished the tasks that the Party and Government assigned you. You have supplied essential commodities to the national economy and provided jobs for many people to ensure stable incomes," Trong said.
He said State corporations played a key role in helping the Party and Government regulate the market and stabilise the macroeconomy while promoting national economic development and defending the homeland.
In the past five years since April 2007 when the Party Committee of the Central Business Bloc was established, annually, State corporations and groups have contributed about 40 per cent of GDP – a key factor to ensure the success of social security programmes.
Trong said the bloc had made remarkable progress, particularly in the fields of personnel planning and training for future leaders.
However, he also criticised weaknesses in Party building work in many parent and affiliate companies.
"Production efficiency at many state corporations and banks has not met their potential given the amount of State investment and advantages they have been given. Many corporations have invested in non-core business activities causing huge losses to the State while undermining the reputation of State enterprises."
He asked all business party committees to pay more attention to the work of party building – a very important task laid down in Resolution 4 of the Party Central Committee.
"Strong party building work will ensure the effective implementation of political tasks assigned by the Party and Government, and promote business and production development," Trong said.
In his report, Bui Van Cuong, alternate member of the Party CC and Secretary of the Party Committee of the Central Business Bloc, said that at present the bloc had nearly 75,000 party members in 1,108 affiliate party committees and 4,798 party cells nationwide.
"We have realised our key role in national socio-economic development. We have successfully completed many projects, particularly in the northwestern and Central Highlands regions," Cuong said.
In the past five years, State corporations and groups have extended support of VND1,480 billion ($72.2 million) to 54 of the 62 poorest districts in the country, and contributed VND6 trillion ($292.7 million) to national social security programmes.
Urban railway contractor sacked
A contractor on the new Nhon-Ha Noi railway line route has been sacked for failing to meet construction deadlines.
State-owned Vinaconex 2 will be replaced after falling three months behind schedule.
The sacking was ordered by Ha Noi People's Committee Vice Chairman Nguyen Van Khoi.
The city's Urban Railway Management Board has been assigned to propose a contractor to replace Vinaconex 2, which is an offshoot of the Viet Nam Construction and Import-Export Corporation.
Work on the $865m section of railway, which includes 8.5km of aerial track, 4km of underground track and 12 stations, began in September 2010.
Agribank funds agricultural machinery manufacturing
Agribank has agreed to offer loans for the Vietnam Engine and Agricultural Machinery Corporation (VEAM) to help the manufacturer boost its agricultural machinery business.
Under the agreement, Agribank will provide VEAM and its subsidiaries with loans for their normal business activities and feasible business plans based on VEAM’s needs and Agribank’s available funds.
The State-owned lender will also create favourable conditions for VEAM’s authorised dealers to secure loans for purchasing agricultural machines manufactured by VEAM.
For its part, VEAM will open bank accounts in Vietnamese Dong and foreign currencies at Agribank branches and enjoy reasonable interest rates on loans and fees for banking services.
Trade with Russia, Belarus, Kazakhstan surges in 2012
Bilateral trade between Viet Nam and the Russia-Belarus-Kazakhstan Customs Union surged during the past seven months of this year.
Two-way trade between Viet Nam and Russia increased by 34 per cent year-on-year to US$1.34 billion, according to the General Department of Customs.
Of the total, $821 million came from Vietnamese exports including garments, computers, electronics, phones and components, seafood and coffee, up 34 per cent. Viet Nam's imports from the market topped $516 million, a yearly increase of 39 per cent.
Among Viet Nam's key import items from Russia were iron and steel, diesel, fertiliser and machinery and equipment.
During the period, trade turnover between Viet Nam and Kazakhstan also experienced impressive growth of 91.3 per cent to rake in $41 million. Of the sum, Vietnamese exports, mainly phones and accessories and seafood, contributed $32 million, while imports made up $9 million.
Meanwhile, bilateral trade with Belarus fetched $100 million during the January-July period, with Viet Nam registering a trade deficit of $91 million.
Viet Nam could increase bilateral trade with the Customs Union further, the department noted.
Russia, Belarus and Kazakhstan are negotiating a free trade agreement (FTA) with Viet Nam, which is expected to bring economic, trade, service and investment benefits to all parties.
The FTA between Viet Nam and the Customs Union of Russia, Belarus and Kazakhstan would open up prospects for a large free trade area and tighten the traditional and strategic relations between the four countries, said the head of the European Market Department under the Ministry of Industry and Trade, Dang Hoang Hai.
"Russia is interested in an FTA with Viet Nam as the Southeast Asian country may develop a strategic position that helps Russia restore its presence in Asia, particularly in the Southeast Asia region," Hai said.
The FTA would enable Viet Nam to boost its agricultural, seafood and garment exports to Russia, and Russia to export fertiliser, oil and gas, atomic energy, heavy industry and cars to Viet Nam.
Viet Nam's trade with Russia is expected to reach $5 billion in 2015 and $10 billion in 2020.
Shrimp exports to fall short
Shrimp exports seem unlikely to reach the target of US$2.5 billion this year after falling for two successive months due to rising competition from other countries and increasing costs.
The Viet Nam Association of Seafood Exporters and Producers (VASEP) reported that July shipments were down 6.8 per cent year-on-year after a 4 per cent fall the previous month.
VASEP now predicts third-quarter exports to be no more than $690 million, or 4 per cent lower than in the same period last year. It will take exports in the first three quarters to $1.7 billion.
VASEP blamed the sluggish exports on pressure caused by competition from other countries and higher input costs together with modest demand in importing countries.
Global shrimp prices are falling but demand in major markets like the US, Japan, and EU is not expected to recover soon due to the tough economic conditions.
Deputy chairman of VASEP Tran Van Linh told the Vietnam Economic Times that Viet Nam was losing its competitiveness despite selling shrimp at very low prices, sometimes as low as the cost of raw shrimp.
At the same time major foreign feed companies, which dominate the domestic market, have been hiking prices, he said.
VASEP said the situation would improve if the Government, in Q3 and subsequently, provided support by cutting interest rates and increasing lending to the industry.
Only a third of seafood producers have been able to keep production unchanged, it said, while the others faced a cash crunch and cannot resume exports without financial support.
Vietnamese shrimp is exported to 62 markets around the world.
Japan is the biggest, followed by the US, EU, and UK.
Exports to most of these markets have been declining.
In the US, Vietnamese shrimp exporters have to compete with those from Thailand, Indonesia, Ecuador, and mainland China.
Stalled projects rife in southern province
The southern province of Ba Ria-Vung Tau is struggling to speed up tardy foreign-invested projects, the investors of some of which cannot even be traced.
People's Committee chairman Phan Hoa Binh said there have been no replies to many official letters ordering investors to speed up progress.
In some cases, they cannot be contacted by phone or summoned, Nhan Dan (The People) reports.
One project that has been long delayed is the Vung Tau International Marvellous Park, a 100 per cent foreign-invested project by the US-Viet Nam Good Choice Company Ltd.
The province's largest project by investment – US$1.3 billion – was expected to completely change the investment scene when finished.
But since 2008, when it was licensed, there has been no progress and the investors have disappeared.
In a similar situation is the 500-bed $300-million IMI Vung Tau Hospital.
After a grand groundbreaking ceremony, the project ground to a halt.
The Department of Investment and Planning has recommended that the People's Committee should cancel the licences issued for these projects.
A department official said it took two or three years to issue a licence and it needed the same time to cancel it.
Many investors, including those behind the IMI Vung Tau Hospital, seek more time to start saying they need to raise funds, a not unreasonable request considering the economic meltdown.
But authorities are unable to meet many of them for discussions. One more problem for them is that correspondence with people based in foreign countries is expensive.
The department said it cost more than VND10 million ($500) to send two dispatches to the USA-Viet Nam Good Choice Company in the US.
It plans to seek help from foreign diplomatic agencies to resolve this problem.
Ba Ria-Vung Tau, situated in the Key Southern Economic Region, has been among the most successful provinces in attracting FDI. But it is also one of the provinces with the lowest FDI disbursement. In the first seven months of this year investors only disbursed $7.2 billion, or 26.6 per cent of registered capital.
Vinacomin to export coal to South Africa, Cuba
The Viet Nam National Coal, Mineral Industries Holding Group (Vinacomin) will export approximately 25,000 tonnes of coal to South Africa next month while planning to ship an addtional of 18,000 tonnes to Cuba in November.
The group has recently asked its affiliates including Cua Ong Coal Preparation Co, Dong Bac Corp and Uong Bi, Nam Mau, Hon Gai coal companies and to ensure efficient coal resources to meet these two export plans.
Earlier, Vinacomin official website quoted Nguyen Xuan Minh, head of the group's commercial department saying that the group's coal exports showed an recovery signal this month as it had won contracts to ship 3 million tonnes of coal abroad.
Of the total, Chinese counterparts would bought 2 million tonnes.
In the first half of 2012, Vinacomin exported nearly 7 million tonnes of coal. However, in July alone, the group has exported only 300,000 tonnes of coal.
As of last month, its coal stockpiles had reached 10.5 million tonnes due to difficulties it had encountered in both domestic and international markets.
Vinacomin has recently petitioned the Government to reduce the coal export tax from 20 to 10 per cent this year to help the corporation avoid further losses, said its deputy general director of Vinacomin Nguyen Van Bien.
Despite this, Vinacomin had incurred losses of VND8 trillion (US$380 million) every year on average for several years, because it sells coal for power production at below market prices under a Government subsidy programme.
Unwanted SMS still harass mobile subscribers
After a Circular issued by the Ministry of Information and Communications, effective since April 13, mobile phone subscribers still cannot escape harassment of unwanted advertisers and irritating marketing messaging, which they had hoped they would be free off.
Mobile subscribers still suffer harassment with unwanted SMS because of one-time subscribers who buy a SIM card without registering or providing personal information
Besides they are required to provide details such as full name, ID or passport number and date of birth, when registering for a new mobile phone or else mobile operators have instructions to stop providing service.
According to the ministry, mobile service providers add 10 million new subscribers each year, 80 percent of whom are one-time subscribers who buy a SIM card without registering or providing personal information.
Because of unhealthy competition among mobile operators, all of who want to increase their number of mobile phone subscribers, post-paid subscribers often suffer at cost of prepaid subscribers.
The ministry should thus tighten management of mobile operators, who have to further control agents and Sim card distributors throughout the country.
Experts say that to fully develop the mobile market, post-paid subscribers must be increased and also given more focus, rather than cater to prepaid subscribers.
Vietnam’s fresh milk industry considered best in Southeast Asia
According to Friesland Campina Vietnam (FCV), their sixteen-year campaign (1995-2012) to improve the quality of the milk industry in Vietnam through its Dutch Lady brand at an investment of about US$15 million, has proved to be a huge success.
Both the quality of milk and the quality of the source in Vietnam has been adjudged the best in all of Southeast Asia.
This in turn, has made cow farmers more confident and has also created a multitude of opportunities to improve living standards in the country.
The bacteria level in unpasteurized milk at the moment is under 300,000cfu per ml.
Moreover, productivity of milk continuously rose from 11.4kg per cow per day in 2005 to 13.2kg per cow per day in 2011.
Revenue from milk has gone up from 2.9-9.9 percent in 2006 to 22 percent in 2012. Ranches with more than 40 cows can even target an increase of 28 percent this year.
Low-cost home buyers must be patient
Information about low-cost houses has been mentioned much lately, but the public wonders whether this housing model can develop and when low-income earners can approach such housing products.
The program to develop low-cost housing projects is moving at a slow pace due to several reasons, including failure to lure property developers.
A report of the HCMC Steering Committee for Housing Policy and Real Estate Market shows that the city’s government has in principle approved low-cost housing projects of six investors. When completed, these projects will supply around 8,760 apartments, addressing the need of over 31,000 people.
However, so far only the project called Hanh Phuc Residential Area in Binh Chanh District has got off the ground, but its progress is quite slow because of financial constraints.
Not to mention the financial capability of low-income people, finding a cheap condo in big cities like HCMC is a pipe dream.
Minister of Construction Trinh Dinh Dung said on the Government web portal that low-cost housing projects were feasible in vast and lowly-populated areas, enabling the development of low-rise houses to save construction costs.
Meanwhile, in populous cities like Hanoi and HCMC, it is impossible to build low-rise condo buildings. Therefore, construction costs are prohibitively high, making it hard to provide actually cheap houses.
With the current house prices, the majority of low-income people are unable to buy homes, the minister remarked.
Decree 71 of the Government has established a legal corridor for budget housing development. Particularly, the State will use funds from the central State budget to develop low-cost houses and introduce attractive policies to woo investors.
Tax and land use fee incentives and credit supports are offered to attract realty firms to invest in the low-cost housing model. Still, many businesses are not so keen on this program.
At a meeting with the HCMC Real Estate Association early this year, the municipal construction department admitted preferential policies for low-cost housing projects had failed to encourage investors to join this model. It is because of the longer time for capital recovery and low profit.
Moreover, the screening of eligible homebuyers is also an obstacle for investors. With commercial housing projects, investors can deal with any customer, but low-cost housing project owners can only sell houses to those in the list approved by State management agencies.
There is a suggestion that condos for lease should be built instead of cheap houses under social program, encouraging citizens to switch from buying to renting houses. The point is which policies will support investors as the capital recovery period of house-for-lease projects will be even longer than that of the low-cost housing ones.
In its housing development strategy, the construction ministry does set a goal to develop apartments for lease. However, only time will tell when this housing model will thrive in the market.
Ernst & Young Vietnam’s sage advice
The conference " 2012 Vietnam Insurance - Towards customer - centric insurance" was held by Ernst & Young Vietnam on August 22 in cooperation with the Ministry of Finance’s Insurance Supervisory Authority.
According to an insurance customer survey released earlier this year by Ernst & Young, the combination of increased expectations and accessible technology meant that the insurance industry now faced more demanding customers and those service providers who fail to make a rapid move to a more customer-friendly business model risk being left behind.
Vietnam’s insurance industry experienced double-digit growth in the past few years and is forecasted to have similar grow trajectory in the coming year. The underpenetrated insurance market in Vietnam offers a sumptuous growth opportunity for domestic and multi-national insurers. With 70 per cent of population below the age of 40, Vietnam has a sounded base to develop an attractive young affluent segment. Together with the strong GDP growth and growing number of the middle class, there is a year for insurance services.
Saman Bandara, Vietnam insurance leader at Ernst & Young, said: “Both the number of new policies and first-year-premium of new business grew faster than total policies and gross written premium in the last five years. The market experienced a shifted trend from traditional products to investment products. As such, consumers are becoming more sophisticated. Their expectation is constantly evolving and the insurance industry has not always managed to keep pace.”
Ernst & Young global insurance customer survey found that, while there are variations in customer attitudes and behaviours around the globe, there are some remarkably consistent underlying themes about what consumers want and where they expect more from insurers. “Being customer-centric is the key to develop and sustain business in a highly competitive market like Vietnam,” Bandara said.
The survey also pointed out that 89 per cent of Asia-Pacific consumers said personal interaction was essential.
“While the number of agents recruited continues to increase, with CAGR of 27 per cent, we envisage distribution channels for the industry in Vietnam will become multi touch-points catering for different segments. Online, bancassurance, mobile and social media will be deployed for targeted campaigns. This will be more effective given the some of the younger customers are becoming more self-directed,” said May Knight, Partner of Ernst & Young Asia-Pacific Advisory Services.
Besides, Ernst & Young’s experts emphasized the important role of speed of claim process as always on top of the list for improvement. While good claim process may not directly render loyalty, 16 per cent of the surveyed respondents replied that a bad claim experience will surely encourage switch.
“Claim plays an important part in the insurer’s operations model. Though it is more crucial for general than life insurers, a well-managed claims process enables the insurer to deliver high performance. A number of insurers in the region have already invested in technologies to transform their customers’ claims experience,” said Ian Cheng, director for Ernst & Young Advisory Services in Asia Pacific.
Changing customer behaviour coupled with evolving regulatory environment, especially on consumer protection, are driving insures to take a more proactive approach to grow their business. “Insurers that align themselves to a truly customer centric model will find this transition to the new customer & regulatory regime less painful, and will gain competitive advantage,” said Bandara.
Licenses needed for coldwater fish farming
Individuals and enterprises need to ask for licenses at the provincial Department of Agriculture and Rural Development to raise coldwater fish, according to the General Directorate of Fisheries and the agriculture ministry.
Farming two coldwater fish, namely sturgeon and salmon, have been developed in Vietnam since 2005, mainly in reservoirs of hydropower plants and irrigation systems. Nguyen Viet Thuy, deputy director of the National Breeding Center for Freshwater Aquaculture under Research Institute for Aquaculture No.3, said those wanting to farm the fish need to apply for licenses with the agriculture department in their localities.
Le Van Quang, deputy director of the Da Nhim-Ham Thuan-Da Mi hydropower plant, said a number of companies are raising sturgeon at the reservoir of his firm with the total output volume of about 100 tons a year.
“We only manage and operate water levels and the hydropower plant, not managing fish farming businesses in the lake. Therefore, interested firms just need to ask for permission from Binh Thuan Province’s agriculture department to develop small-scale farming at our reservoir while the approval of the provincial government is needed for large-scale farming,” he stated.
In 2005, Research Institute for Aquaculture No.1 launched a pilot project to raise coldwater fish in Sa Pa District in Lao Cai Province. Now the fish farming has been expanded to Lai Chau, Yen Bai, Tuyen Quang, Son La, Lam Dong and Binh Thuan provinces among others.
The country’s total output of coldwater fish reaches 800 tons annually, with Lam Dong contributing up to a half.
Road to getting transport sector in order
Industry players are weighing over a draft decree to put the auto transport market into order.
The Ministry of Transport (MoT) just submitted to the prime minister a document relevant to a draft decree amending and supplementing some articles in Decree 91/2009/ND-CP dated October 21, 2009 regulating road transport business and business conditions for service provision.
Accordingly, the compiling body (MoT) accepted to abolish a regulation on minimal car numbers a business entity must have in order to get a licence on road transport business and taxis services provision.
The regulation used to be inserted into previous three draft decrees. Accordingly, businesses and passenger transport trading firms running on fixed routes above a 300 kilometre distance must have at least five car units offering the service.
Similarly, to get a licence taxis trading businesses must have at least 20 car units. The MoT once expected the regulation would be an important tool to bolster the service quality.
However, in document 5734/BTP-PKDSKT providing input to the draft decree Deputy Minister of Justice Dinh Trung Tung suggested state management agencies should only take care of the service quality and traffic safety instead of involving too deeply into firms’ business.
From the part of businesses, deputy director Nguyen Kien at Thai Binh-based Long Thu Passenger Transport -which runs on Thai Binh-Lai Chau route - assumed if the regulation was tightened, small firms would be financially incapable to run on long routes.
Some road transport associations, however, supposed such requirement should not be removed.
Hanoi Transport Association chairman Bui Danh Lien recently proposed the MoT build up standards to oust unqualified firms from joining north-south road transport service provision.
Besides, to restore order in road passenger transport the MoT asked the premier to supplement the draft decree with conditions on taking back transport firms’ business licences.
Accordingly, firms transporting passengers and containers on fixed routes and taxis businesses will have their licences taken back in the following cases - having 5 per cent of operating cars in which the drivers incurred faults relevant to travel itinerary, having 20 per cent of operating cars impinged on speed regulations, having 20 per cent of cars picking up and releasing passengers not in right places and having 10 per cent of cars in which drivers incurred time related faults.
“Sanction measures regulated in Decree 91 were not severe enough to punish short-sighted firms,” said MoT’s Directorate for Road of Vietnam deputy chief Nguyen Van Quyen.
“Once adopted, new sanctions would help bring road passenger transport into order and contribute to slashing cases of horrible traffic accidents currently on the rise in Vietnamese roads,” National Traffic Safety Committee former deputy chief of office Nguyen Cong Ha said.
Agribank funds agricultural machinery manufacturing
Agribank has agreed to offer loans for the Vietnam Engine and Agricultural Machinery Corporation (VEAM) to help the manufacturer boost its agricultural machinery business.
Under the agreement, Agribank will provide VEAM and its subsidiaries with loans for their normal business activities and feasible business plans based on VEAM’s needs and Agribank’s available funds.
The State-owned lender will also create favourable conditions for VEAM’s authorised dealers to secure loans for purchasing agricultural machines manufactured by VEAM.
For its part, VEAM will open bank accounts in Vietnamese Dong and foreign currencies at Agribank branches and enjoy reasonable interest rates on loans and fees for banking services.
Bac Ninh seeks incentives for Samsung project
Bac Ninh Province is seeking Government approval to give investment incentives to an expansion project of Samsung Electronics Vietnam (SEV) in which its capital will rise to US$1.5 billion from the current US$670 million.
The province has written to the Prime Minister suggesting incentives for the investment expansion of SEV in the Yen Phong Industrial Park.
The South Korean investor submitted the same proposal to the Government at the end of last year, saying it wanted to enjoy a corporate income tax rate of 10% during the project’s lifetime, a four-year corporate income tax exemption and a 50% reduction of the tax for the following nine years for all electric and electronics products of the project.
In fact, the prevalent rule stipulates investment incentives are not given to capital increase projects.
According to Bac Ninh’s report, the expansion project of SEV might be mulled for corporate income tax incentives as this is a high-tech investor. The company as
a high-tech investor has enjoyed a preferential income tax rate of 10% for 15 years, a tax exemption for four years and a 50% tax reduction for the following nine years after it reports taxable incomes.
The province proposed the Government give the above special treatment to the expanded part of the project based on the post-check mechanism. This means the Ministry of Science and Technology, in collaboration with related agencies, will evaluate the high-tech criteria of the expansion scheme and revoke all incentives if it fails to meet the conditions during the implementation process.
At the same time, the investment incentives set aside for the expansion will be adjusted as well.
According to Bac Ninh, the investment project to establish the Samsung technology complex in Vietnam is an enormous scheme and it has been deployed in line with schedule and commitments with the Government. The firm as of end-2011 had disbursed US$492 million into the project, and plans to continue injecting another US$684.7 million as of late 2012.
The project this year has created jobs for 23,000 locals and has total output capacity of 100 million products for the whole year, with sales estimated to amount to US$10 billion including an export value of US$9.5 billion.
VNS/VOV/VNA/VIR/SGGP/SGT/Dtnews
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