BUSINESS IN BRIEF 23/3

Dialogue discusses PPP projects in Vietnam

The first high-level dialogue to accelerate Public-Private Partnership (PPP) projects in Vietnam was held in Hanoi on March 21.

The event was co-chaired by Minister of Planning and Investment (MPI) Bui Quang Vinh and Japan Bank for International Cooperation (JBIC) General Director, Hiroshi Wantanabe, along with related representatives.

Addressing the dialogue, Minister Bui Quang Vinh emphasised that the friendship and cooperation between Vietnam and Japan has developed well and seen remarkable milestones across many fields.

He highlighted Japan’s support, especially in strengthening cooperation between the private sector and the State sector to develop Vietnam’s infrastructure. Japan is now Vietnam’s largest Official Development Assistance (ODA) provider and the biggest national investor.

Vinh also spoke highly of JBIC’s contribution to infrastructure projects with the involvement of a number of international partners. JBIC has been a solid contributor to Vietnam’s socio-economic development and plans to support further trade and investment activities for Vietnam shortly. He expressed his hope that the PPP model will be further promoted in the near future.

For his part, JBIC General Director Wantanabe said that cooperation between the two countries has been strengthened for over a decade and Japanese businesses have been operating well in Vietnam.

Governments world-wide have slashed their expenditure, so both parties will have to mobilise capital from the private sector. Accordingly, JBIC will recommend businesses to invest in Vietnam, especially in PPP projects.

Mr Wantanabe emphasized that JBIC hopes to tap its full potential in Vietnam and make greater efforts to remove hurdles. He also stressed that each ministry and locality should cooperate to conduct research on PPP models operating in developed nations to learn about the most effective way to implement PPP cooperative projects in Vietnam.

During the event, both sides agreed on the importance of promoting PPP projects, as well as the need to collect opinions on their form. JBIC’s experiences in Vietnam was and other nations is seen as invaluable in order to meet the country’s huge demand in the development of infrastructure and industry.

During the event, both sides signed a memorandum of understanding (MoU) to promote PPP cooperative projects in the future.

Free trade to boost seafood exports

The Viet Nam-EU Free Trade Agreement is expected to increase the volume of Vietnamese seafood exports to the EU, according to the Viet Nam Association of Seafood Exporters and Producers (VASEP).

Speaking at a conference in HCM City last week, Vasep General Secretary Truong Dinh Hoe said the EU, with its 27 members, is an important market for the Vietnamese seafood industry.

Last year, the seafood industry earned US$1.13 billion from seafood exports to the EU, accounting for 18.5 per cent of the country’s total seafood exports.

“Negotiating for the free trade agreement is very important, since the FTA will help reduce tariffs at the maximum level on Vietnamese seafood products, making Vietnamese seafood more competitive,” he said.

Currently, Vietnamese seafood exports to the market still enjoy the EU’s Generalised System of Preferences (GSP), which provides developing countries preferential access to the EU market through reduced tariffs.

However, with Viet Nam’s economic development, GSP on certain products will be reduced in the future. Therefore, “FTA will help open a new opportunity for the seafood industry,” he said.

He called on local companies to be aware of technical barriers when exporting and to further improve their product quality. Otherwise, the industry would not be able to enjoy the many benefits of the FTA.

The EU has many trade regulations, including a regulation against illegal fishing.

Local enterprises involved in the seafood industry in the past time have made efforts to raise their product quality to meet EU requirements.

For instance, 103 pangasius farming, or 40 per cent of the country’s pangasius farming, have received certificates for sustainability development.

Around 50 pangasius plants have obtained Global GAP certificate, accounting for half of the country’s total pangasius plants.

Fourteen companies have received Aquaculture Stewardship Council certificates for sustainable development and 25 others have registered for the ASC programme, he said.

Seafood exports reached a record $6.1 billion last year, following a rise of 21 per cent, exceeding the target of $5.7 billion, the association reported.

The industry ranked fifth among leading export earners after textiles and garments, crude oil, footwear and electronics.

Demand for air conditioners, fans rises

Demand for electronic products in HCM City has increased as much as 40 per cent in the past few days because of hotter weather, according to traders in the city.

Bui Tan Cuong, marketing director of the Thien Hoa Electronic Centre, said that since the Tet (Lunar New Year) holiday, demand for electronic products, particularly air conditioners and fans, had increased by 30-40 per cent over normal days.

He estimated that sales would double by the end of March or mid-April.

Le Xuan Huy, head of the marketing department at Cho Lon Electronic Centre, said the best-selling products were environmentally friendly and energy-savings air conditioners and fans that sold at low prices.

To meet demand, electronic centres have increased their inventory, with Thien Hoa centre doubling its inventory.

Because of increased demand, prices have slightly increased.

Cuong said that the exchange rate between the Vietnamese dong and the US dollar had affected prices, especially on imported electronic products.

The prices of several products were up by 5-10 per cent, he said.

Thanks to many promotions, the prices of other products had increased only slightly.

In addition, many centres have promotions, including free installations, gifts and discounted spare parts.

The dry season this year arrived early in HCM City. For more than one month, the weather has been quite hot due to El Nino.

Experts said this year could be the hottest in HCM City in the last 25 years.

Banks find it hard to lend

After successfully raising liquidity, and despite low interest rates, many Vietnamese banks have been finding it difficult to find new customers for loans.

According to the State Bank of Vietnam’s HCM City branch, the percentage of outstanding loans held by banks in the city increased by only 0.22%; meanwhile, while capital from deposits grew by 2.71%.

Truong Van Phuoc, General Director of Vietnam Export Import Commercial Joint-Stock Bank (Eximbank), said that between January and February, the country saw a trade surplus of USD1.68 billion, which showed decreased demand for imports. At the same time the financial situation at many businesses wary of taking out loans.

Currently, banks commonly offer annual interest rates of 11% to 15%, with preferential rates between 9 and 12%, with medium to long-term rates averaging between 14% and 17%. Still they have largely failed to find new customers.

The deputy general director of a bank in HCM City said that businesses have tended to prefer long-term loans with low interest.

Truong Quang Vinh, Chairman of Go Vap District’s Enterprise Association, added that many companies failed to meet requirements for loans, and that even enterprises requesting capital for projects that have already been approved for their feasibility were turned down due to outstanding debts.

A consultant with a bank in HCM City said that it was essential for the State Bank of Vietnam to step in and offer a workable plan for banks to settle the bad debt problem, adding that offering loans to businesses with outstanding debts would be a step in the wrong direction.

According to Dr. Le Xuan Nghia, member of the National Monetary Policy Advisory Council, in order to properly deal with the situation of banks being unable to find new customers to lend to, many commercial banks have significantly cut interest rates.

Many banks have moved towards purchasing G-bonds or providing inter-bank loans.

Real estate firms owe huge tax arrears

Real estate firms currently owe thousands of billions of VND worth of land use right fees while tax agencies are finding it difficult to recover the debts.

Tax agencies said from 2011 to date numerous real estate companies have been making losses and have yet to pay their land use right fees.

The Construction Engineering Joint Stock Company in Hanoi has yet to pay VND84 billion (USD4 million) for their Hong Kong Tower development.

In order to support the investor, Hanoi municipal authorities decided to extend the deadline for the firm to pay the fee within year.

However, to date the company still owed over 40.6 billion (USD1.93 million) worth of land use fees, excluding VND21 billion (USD1 million) worth of land use fees extended to May 10 this year.

Ha Do Group, the investor of the four-star Mercure hotel, currently owes over VND78.8 billion (USD3.76 million) worth of land use fees. Of the total, VND44.8 billion (USD2.13 million) were overdue debts and VND34 billion (USD1.62 million) are extended to November 26 this year.

The General Department of Taxation has compiled a black list of real estate firms with big debts of land use fees, including Phu My Development Investment JSC, Binh Chanh Construction Investment JSC, Tan Truong Limited Company and Housing and Urban Development Corporation.

A tax branch head in Hanoi said, “In 2012 the tax sector found it difficult to complete its budget revenue targets. The municipal tax department failed to collect several types of taxes. We had to urge enterprises to settle their debts.”

Economist Pham Chi Lan said that enterprises owe a lot of tax arrears but they had still continued to call on support from the government. The proposal to give land and housing as a form of payment for debts was popular with such enterprises.

In 2013, state budget revenues from land use fees were estimated at VND39 trillion (USD1.86 billion), down from last year’s figure of around VND45.145 trillion (USD2.15 billion).

In order to improve the situation, the tax agencies are scrutinising all enterprises which owe land use fees and will apply fines for firms that have deferred payment.

Vietnamese sailors abandoned overseas by company in distress

Vinashin Ocean Shipping Company Ltd. (Vinashinlines), an affiliate of Vinalines, has been unable to support their own sailors who are are calling for help from overseas.

Vinashinlines went into bankruptcy in early 2013 because of mounting debts, and also pending the restructuring of Vinalines.

The crew members were stuck in various countries, including China, India, the United Arab Emirates and Pakistan. According to them, they were lacking the fuel necessary to make the return voyage and even funds for daily provisions.

Reportedly many of their sailors have sent multiple distress messages back to Vietnam, claiming that Vinashinlines has abandoned them overseas. They said that not only had they not received adequate support, but that their wages had not been paid for months.

Nguyen Que Duong, General Director of Vinashinlines, admitted that they owe employees’ wages but denied the accusation that the sailors are suffering from shortages of food or water. “We just sent money for living expenses to our sailors abroad. We will check if they have been able to receive the funds. With help from the government, we will be able to provide financial support until the end of March,” he said.

According to the Vietnam Maritime Administration, the ships owned by the company accounted for 3% of the national fleet. Most of them were built in the 80s, and may be sold off to repay debts.

The company is now trying to sell the seven ships that are docked overseas.

The government has requested that Vinashinlines find ways to sell off their concrete assets, including ships, by June.

Ministry proposes upgrade to railway system

The Ministry of Transport proposed upgrading the current North-South railway line to accommodate new trains that can reach speeds of 90 kilometres per hour.

Minister of Transport, Dinh La Thang, said at a recent meeting with partners from the Japan International Cooperation Agency (JICA), “Even though the railway is aging after more than one hundred years of use, we can upgrade it instead of building a new line to save on expenses.”

The upgraded system would be able to handle passenger trains that could travel up to 90 kilometres per hour and cargo trains that could reach speeds of 60 kilometres per hour.

JICA estimates that the proposed upgrade to the 1,800 kilometre long line would cost around USD1.8 billion and lessen the travel time from Hanoi to HCM City from 30 hours to just over 25.

Thang added that there were plans to submit the design of a new express passenger line that could go up to speeds of 200 kilometres per hour ready to the National Assembly. But JICA said such plans should not be cost-effective for the time being, estimated to be about USD27.7 billion. They suggested that a pilot line be built connecting Hanoi’s Ngoc Hoi district with Phu Ly city in Ha Nam Province.

These sections could come into operation by 2021, while those between HCM City and Nha Trang or Hanoi and Vinh are expected to be able to be put into use by 2030 and 2035, respectively. The entire line is slated for completion by 2040.

Advertising revenues rise despite economic slump

Although the economy is facing a slump, advertising revenues in 2012 posted a growth rate of 30 percent compared to the previous year.

Data given by Kantar Media Vietnam Company showed that last year, firms spent VND20.4 trillion on advertisements via mass media. Of this, television commercials accounted for more than VND18.24 trillion, up 136 percent over the previous year; newspapers and magazines touched about VND2.15 trillion, down 8 percent; and radio commercials dropped by nearly 20 percent to nearly VND25 billion. This was an impressive growth for television commercials, which raised the general growth of mass media advertising by 30 percent compared to that in 2011.

Kantar Media Vietnam forecasts that this year, television commercials will continue to stay at leading spot, as this is the most attractive form of advertising. Fast moving consumer goods took the top slot among other sectors in television commercials, led by two multi-national companies, Unilever and Procter Gamble.

One director of a company in the fast moving consumer goods sector in Vietnam said that with higher liquidity, many multinational companies paid millions of US dollars for commercials to oust local firms from both market share and popularity.

According to him, in order to keep their position in the domestic market, local firms have to focus on improving their distribution network and sometimes appear on television so as to remind consumers of their product, although they cannot compete with big players like Vinamilk, TH True Milk, and Tan Hiep Phat.

These companies have great financial resources as their investments in television commercials were not less than FDI companies. However, their commercials remained seasonal, instead of constant like those of multinational companies.

Some marketing experts said that firms should intensify advertising their products to consumers because consumers were tightening spending due to economic recession.

Meanwhile, although many firms did not have money to join this fierce advertising race, they still operated healthily, partially thanks to the effectiveness of Vietnamese products. Instead of choosing foreign-made products which were widely advertised on television, many consumers only chose Vietnamese products because of affordable prices and improved quality.

A survey of Vietnamese consumers showed that they have gradually changed the habit of preferring foreign-made products and returned to buying locally-made products. For instance, this year consumers preferred domestic brands of sweetmeats such as Kinh Do, Bibica, and Pham Nguyen. In the past three years, despite the economic slump, market share of Bibica continually rose from 8 percent in 2008 to 18 percent in 2012.

A director of a company shared that instead of making commercials, firms have done well with distribution and direct discounts to dealers and consumers. It was hard to see Kim Hang Cookware, Dai Dong Tien Plastic, Cho Lon Plastic, My Hao, or Bidrico on television commercials but they still have a consumer market.

Nguyen Dang Hien, CEO of Bidrico, said that his company’s strategy was to dominate rural markets, then use it as a springboard to enter urban markets. This way his company will either not spend much money for advertising or advertise through provincial television channels at much cheaper costs.

Similarly, My Hao Chemical Cosmetics Joint Stock Company also said that it set aside a rational expense for commercials, mostly for commercials on provincial television channels or radio, and print newspapers.

However, firms should not neglect improving the quality of their products, building brand names, and upgrading distribution networks or else multinational companies will easily crush them when the economy lifts again and consumers open spending.

More retailers have developed own product lines

With more investments over the last few years, big supermarkets have developed their own product lines, at affordable rates and of good quality.

Along with advantages like better distribution channels and an enhanced understanding of consumer demand, this tendency is expected to develop further in the future, creating fierce competition in the market between producers and retailers.

Private labels are usually developed by supermarkets with widespread distribution channels and credible reputation. This is a play ground for big retailers with financial liquidity, wide distribution channels, and large consumer base.

The private label market has fierce competition among supermarkets, including Metro Cash Carry Vietnam, Big C, Co.opMart, and Vinatex Mart. With wide distribution channels at their disposal, these supermarkets have continuously presented several products carrying their brand name, mainly essential items with strong demand like foods, chemical products, and clothing.

Private labels started in Vietnam after the entry of Metro Cash Carry, who distributed a line private label products such as Fine Food, Aro, Horica Fine Dreaming, and Sigma. However, at that time, private label products did not attract much attention. Only after the economic slump, Co.opMart began promoting development of private label products at reasonable prices and of good quality. Soon the market began to boom in this sector.

Currently, Co.opMart has developed about 150 products including rice, fish sauce, rice vermicelli, tea, egg, rice paper, ham, lean pork paste, canned foods, chemical products, household goods, and garments.

As for Big C, the supermarket joined private label market with ham under its own trade mark, eBon. Following this trend in recent years, Big C started to build many new products such as ‘Wow Gia Hap Dan’ and Bakery Big C.

Of late, it has coordinated with 70 producers for several foods and chemical and cosmetic products at prices lower than those of leading companies in the market by 10-20 percent. A representative of Big C said that it developed private labels at low prices because it can take advantage of advertising channels right at the supermarket as well as its available employees and transport system.

Although private labels still account for a very small market share, boom in development of private labels has established a competition with retailers to draw consumers.

According to Darin Williams, CEO of Nielsen Vietnam, private labels have developed robustly in Australia, New Zealand, Thailand, Malaysia, Indonesia, and some other markets. Meanwhile, private labels and awareness of Vietnamese consumers for this kind of product has just started in recent years but expected to flourish in the future. This business trend has created positive effects.

However, from another point of view, producers have faced difficulties as private label products developed. Some businesses said that in order to bring their products into supermarkets, they have to offer higher discounts and suffer inventory costs and late payment. However, if they produce private label products for supermarkets, overheads will not reach 10 percent. At the same time, supermarkets give priority for display of these products. Therefore, many companies are still involved in this business.

One director of a cosmetic company in Ho Chi Min City said that despite some advantages that companies receive from retailers, after a period, the products of the companies will decrease while the number of private label products will increase. Some distributors even asked producers to cut down similar products to those that the latter were producing for the former. Retailers have advantages as they have information about consumer taste that producers cannot easily get.

Lix was once one of the most well-known detergent brands in Vietnam. But due to severe competition with Omo and Tide, besides manufacturing, the company also processed products for Omo. When private label products boomed, Lix was also invited to join as processor, for that its manufacturing line was optimized. However, detergent under Lix brand name gradually vanished from the market.

According to economist Vu Dinh Anh, in order to gain a foothold with big retailers, firms have to innovate their products regularly, improve distribution network, invest more in their supply chain, and increase services to protect their market share.

Vietnam export nearly 1 million tons of rice in 2.5 months

Since the beginning of 2013 until March 15, Vietnam has exported 906,173 tons of rice, earning US$411 million, according to the Vietnam Food Association (VFA) released on March 18.

The price of dried paddy rice in the Mekong Delta region is currently hovering around VND5,150-5,250 per kilo, with long grain rice being sold at VND5,350-5,450 per kilo.

Unhusked five-percent broken rice is selling for VND7,950-8,050/kg, while unhusked 15-percent and 25-percent broken rice are VND7,550-7,650/kg and VND7,250-7,350/kg, respectively.

The country’s average rice export prices in January fell by 20 percent compared to the same period last year.

2013 is proving to be a relatively difficult year for Vietnamese rice exports due to competition from other global rice producers such as Thailand and India.

The Mekong Delta of Vietnam alone exported 770,000 tons of rice in the first two and a half months of 2013, increasing 18 percent compared to the same period last year.

Asia is the largest market, consuming 65 percent of the total volume, followed by America, Africa, Europe ..

The average rice price has increased from VND5,200 to VND5,300 per kilogram in recent times.

The Mekong Delta plans to export between 6.5 and 6.8 million tons of rice in 2013.

Farmer breeding clams in Mekong delta suffer losses

Clam and oyster have turned out to be main incoming source that helped many households in Mekong Delta to become wealthy.

Nguyen Van Dao, General Director of Joint Stock Company Go Dang – currently the leading clam exporters of Vietnam reviews that, clam and oysters are sea products that have potential markets in Europe, Asia, Americas.

Clam meat is exported with prices ranging from 3.5 – 4USD per kg; the whole clams 1.8 – 2USD per kg … These are fairly attractive prices

However, recently, the clam farming is “on the U turn” because clams die off, pushing people into hell, pile on debt

We visited Tan Thanh commune, Go Cong Dong district (Tien Giang province) in the Mekong Delta where famous clam farms are located to find out the causes why clams died in large numbers.

Ngo Phi Truong – an official at Go Cong Dong district’s Department of Agriculture and Rural Development, said the mass dying of oysters occurred some years ago but this is the worst case he has seen in the past years.

He added that more than 16,500 tons of clams and oysters died en mass during the past two weeks probably due to water pollution, causing an estimated loss of VND300 billion (US$14.3 million) to farmers in the Mekong Delta province of Tien Giang.

Disease strikes these days, killing clams in an area of 1,200 – 1,300ha, the loss rate ranges from 40 percent to 80 percent even in some communes oysters died more than 90 percent

The households who feed clams and oysters in Tan Thanh suffered damages amounting to hundreds of billions of dongs.

The dead oysters were bred at many farms along the coastlines in Go Cong in the province.

Nguyen Phi Quan , a farmer in Tan Thanh district, said he and a friend jointly invested VND12 billion ($573,000) to breed oysters over a 40-hectare area but now they seem to have lost it all.

“If the oysters hadn’t died, we would have earned a profit of VND8 billion (US$ 382,000) since each kilogram of oysters is sold at VND20,000 (US$0.96),” Pham Hong Van, Vice Chairman of Cu Lao Dung commune in Soc Trang province said.

Vo Van Manh, another farmer in the area, said he is burdened with a debt of VND3 billion ($143,000) because of the oyster deaths.

HCM City seeks loans for flood works

Minister of Agriculture and Rural Development Cao Duc Phat has asked the World Bank to provide loans to help fund HCM City’s flood control plan, known as Project 1547.

On March 17, Phat and representatives of the city’s People’s Committee and the World Bank visited several flood-prevention projects in the city.

The plan for Project 1547 includes the building of a river dyke system and tidal sluices to control tides at the mouth of big rivers and canals.

The proposed 146-km dyke system runs from Ben Suc in Cu Chi district to the Kinh Lo River in Long An province.

The city has already built a dyke along the right bank of the Sai Gon River and sluices, including the Nhieu Loc – Thi Nghe, Biình Trieu, Rach Tra, Vam Thuat and other small sluices, according to the HCM City Steering Centre for Flood Control.

Project 1547 has helped to prevent floods in these areas, but, downstream of Thu Duc district, where the project has not been implemented, rain and high tides have caused severe flooding.

This area has also had the highest incidence of riverbank erosion in the city, accounting for six of the city’s 29 erosion prone sites. The dyke section in this area is about 11km long, and investment is estimated to be 2.6 trillion VND (123 million USD).

In the near future, the city will build four tidal sluices at Kinh, Phu Xuan, Vam Thuat and Tan Thuan rivers.

It will also build dykes and dredge rivers and canals in the city’s low-lying areas and southern area.

However, the city continues to struggle to find investment capital.-

Textile association boosts cooperation with Korean partner

Vietnam Textile and Apparel Association (Vitas) has signed a strategy cooperation deal with the Republic of Korea’s Daegu Gyeongbuk Textile Industries Association (DGTIA).

The deal will help the two sides boost development cooperation in textile industry and exploit the ASEAN – RoK Free Trade Area (AKFTA) more effectively.

Under the deal, Vitas and DGTIA will develop cooperation projects in the textile companies from both countries to penetrate into each other’s markets, as well as exchange information on trade fairs, exhibitions and related events.

Ba Ria-Vung Tau to abolish 12 industrial clusters

The Department of Industry and Trade of the southern coastal province of Ba Ria-Vung Tau has proposed the provincial government do away with 12 delayed industrial cluster projects, an official of the department said.

In the zoning plan, Ba Ria-Vung Tau has 29 industrial clusters totaling 1,443 hectares, said Tran Thi Huong, director of the department. But only 17 of them have found developers so far, with five getting off the ground, she noted.

The infrastructure construction pace at these industrial clusters is slow, falling far behind schedule, the department said.

Investors have halted expansion projects or new ones as demand of tenants is in decline. Developers of the industrial clusters have also been grappling with financial constraints, which have affected site-clearance compensation for the families affected by their projects. Cost overruns sparked by the hefty increase of land rents from the original levels have also forced several developers to give up their projects.

The department, therefore, insisted the 12 planned industrial clusters unattractive to investors should be eliminated to avoid causing negative impacts on local residents in the project sites. Five of the 12 clusters are in Tan Thanh District, five in Chau Duc District, one in Ba Ria City and one in Dat Do District.

Their removal will not affect the province’s industrial investment and development plan, the department said. To encourage industrial cluster project owners to continue their projects, local experts requested the province to subsidize land rents if their facilities could create products meeting local demand and attract potential industries to the province in the long term.

As of February 2013, total investment capital of 17 industrial clusters that already found investors was some VND565 billion. Five of them already started infrastructure construction at a total cost of around VND549 billion, with Hac Dich 1, Boomin Vina and Ngai Giao having six secondary projects in operation with a combined cost of around VND2.6 trillion, creating jobs for about 4,000 workers.

Outlook still grim in 2013

Bad debt, inventory and the still-frozen real estate market hit Vietnam’s economy hard last year, and the situation will continue into this year, said experts.

At a meeting of the Can Tho branch of the Vietnam Chamber of Commerce and Industry (VCCI) in Can Tho City last Friday, experts said the economy went through a very tough year in 2012, with economic growth of only 5.03%, the lowest since 1999.

Dr. Le Dang Doanh, former president of the Central Institute for Economic Management, said the problems faced by the economy in 2012 had built up over the years. “An estimated VND1,000,000 billion is currently stuck in the realty market, and the State-owned enterprises owe a combined debt of VND1,300,000 billion.”

Vo Hung Dung, director of VCCI’s Can Tho Branch, ascribed the current difficulties to the overheated growth in the past.

Westernbank board members replaced

The general meeting of Westernbank last Saturday elected five new board members to replace the old members who resigned while the controller committee also had two of three members replaced.

The newly-elected board members are Trinh Huu Hien, who had served as acting general director of Westernbank since August 2012, Le Minh Tuan who used to work at Phuong Viet Investment Co., Vo Trong Thuy who previously worked at Asia Commercial Bank and HSBC Vietnam, and Thai Tan Dung who was a board member of Dai A Bank.

The committee of controllers has two new members. Nguyen The Vinh and Nguyen Van Trung, who used to work at PetroVietnam Finance JSC (PVFC) and Military Bank, replaced Le Hoang Lan and Su Ngoc Bich.

Shareholders at the general meeting also agreed to let Westernbank merge with PVFC and assign the board to carry out the next steps in a road map towards the merger.

The meeting heard no mention of the previously made proposals such as a request to the central bank for VND30 trillion recapitalization and another to PVFC for VND7 trillion support to consolidate the bank’s financial position.

Most shareholders insisted the merger shouldn’t affect their benefits and that both sides need to improve the technological system after becoming a bigger bank.

The 2011 and 2012 business performance reports presented at the meeting showed a great change in the structure of Westernbank shareholders. In 2011, 24 shareholders transferred shares with a combined face value of VND661.3 billion. And 48 shareholders transferred shares totaling some VND3.27 trillion worth of the face value in 2012.

Sources familiar with the situation told the Daily that this year’s general meeting was attended by a large number of new shareholders, citing the major share transactions and transfers between groups of shareholders last year.

Sales of land lots fare well

While the apartment market segment is still struggling with difficulties, many land lot projects are drawing the attention of customers.

In early April, Hung Thinh Land will officially announce the Golden Bay project in Khanh Hoa Province. The project on Bai Dai Beach will comprise land lots for villas, semi-detached villas, villas combined with service facilities and apartments with four-star hotel.

Nguyen Van Cuong, chairman of Hung Thinh Land, feels confident about the sale of this project.

Golden Bay is the only urban area development project in northern Cam Ranh Peninsula, planned as a key economic zone and tourist center of Khanh Hoa. Therefore, demand for housing of domestic and foreign experts will pick up in the near future, he explained.

Meanwhile, Kim Oanh Real Estate Co. intends to put up for sale 200 land lots in the Bencat Center City project in Binh Duong’s Ben Cat District at VND180 million per unit.

Hoang Quan Real Estate Co. has launched 48 land lots for semi-detached villas of the residential project Cinderella 2 in Ba Ria City, Ba Ria-Vung Tau Province, with prices starting from VND2.34 million per square meter.

The final 30 land lots of the Dai Phuc Green Villas project in HCMC’s Binh Chanh District has recently gone on sale at some VND1.48 billion per 100-square-meter lot.

The project developed by Dai Phuc Construction and Commercial Co. consists of 1,550 condos, 219 villas, 512 townhouses and other facilities such as school, park, healthcare center and swimming pool.

Ngo Vi Hung, general director of Saigon Thuong Tin Real Estate Trading and Service Co. (Sacomreal-S), said Vietnamese people still preferred owning land to apartments. Moreover, the fact that many apartment projects are moving slowly or have been put on hold damages customer confidence.

In addition, the number of land lots is getting smaller, especially in big cities like HCMC and Hanoi, and their prices have been cut to reasonable levels. Therefore, they attract a lot of attention, he noted.

“The land lot projects around ten kilometers from downtown HCMC sell very well,” he said. Sacomreal-S put up for sale 48 lots at the Belleza project in District 7 four months ago and now 40 of them have gone, he added.

Dang Thi Kim Oanh, general director of Kim Oanh Real Estate Co., said her company’s daily sales had reached about 10 lots in the projects in Binh Duong and Dong Nai since the end of Tet holiday. “On some particular days, there are 30 successful transactions,” she said, attributing this success to many roads and large projects in Binh Duong and Dong Nai to be put into use soon.

“The property market has seen many optimistic signs, but I think the quality and prices of each project are the two most important factors to help win back customers at the moment,” said Cuong of Hung Thinh Land.

Novaland gives away gold to homebuyers

Nova Real Estate Investment Corporation, or Novaland, has launched a sales promotion program in which lucky homebuyers of the Sunrise City condo project can win a gift of eight maces of gold.

The promotion of the project on Nguyen Huu Tho Street in HCMC’s District 7 has received positive responses from customers, Novaland said, adding that on the first day on March 3 of the promotion, around 100 customers put their names down to buy apartments.

Novaland has introduced new apartments in the Sunrise City that will be offered for sale within this year. For instance, the South Towers area will start from VND3 billion for a unit measuring 61 square meters to 138 square meters and delivery is slated for September.

Meanwhile, the Central Towers’ second phase has enticed multiple homebuyers with flexible payment formats, which allow buyers to pay at least VND31 million a month.

As for the North Towers, Novaland quotes the price at VND23.5 million a square meter or above for condos of 56,97 to 123 square meters. An apartment there costs VND1.6 billion to VND3.3 billion.

The housing developer plans to market the third phase of the North Towers on March 24.

Big discounts for Saigontourist customers

Saigontourist Travel Service Company has said it will cooperate with hotels in the network of Saigontourist Holding Company to offer a promotion program with discounts of up to 40%.

The special program is for visitors who buy tours of Saigontourist Travel and stay at hotels belonging to Saigontourist.

With the IKO Travel tours by road and air, tourists can save from VND570,000 to VND1.62 million a person, with service quality unchanged, and stay at four-star hotels. Tours to Nha Trang, Dalat, Hue, Danang, Hoi An, Phu Quoc and Con Dao are available under the program as well.

A number of tours in the program include the four-day Dalat tour with the Saigon-Dalat Hotel, the four-day Quang Binh-Quang Tri-Hue-Danang-Hoi An with Saigon-Quang Binh and Saigon-Dong Ha hotels, or the four-day Nha Trang-Hon Lao-Wonderpark 4 tour with the Yasaka Saigon-Nha Trang Hotel.

Saigontourist also offers discounts to customers registering for the three-day Phu Quoc tour in groups, with a deduction of VND600,000 a person for groups of six or above. The tours depart every Tuesday, Friday and Sunday, with customers staying at the four-star Saigon-Phu Quoc Hotel.

To book tours, contact 0919 511279 or check out www.dulichtietkiem.com

Banking staff remain on high pay despite economic difficulties

Banking staff received lower wages last year, but their incomes are still high despite the current economic difficulties according to recent bank reports.

Financial reports from six listed banks showed that staff at the Vietnam Joint Stock Commercial Bank for Industry (Vietinbank) had the highest incomes, while employees from the Sai Gon Thuong Tin Commercial Joint Stock Bank (Sacombank) were the lowest paid last year.

Several Vietnamese banks cut staff salaries compared to a year earlier due to the difficulties they faced in 2012.

Vietinbank staff took home average salaries of VND18.9 million (USD901.71) per month in 2012, down 9% from the previous year.

Last year, Vietinbank had the largest number of banking staff, employing 19,840 people. On average, the bank paid VND21 million (over USD1,000) to each staff member, including salaries and bonuses.

Vietcombank offered average incomes of VND20.4 million (USD973.28) per month in 2012, down 3.6% from VND21.1 million (over USD1,000) income in 2011.

Incomes of Asia Commercial Joint Stock Bank (ACB)’s staff dropped 2% to around VND13.3 million (USD634.54) in 2012 compared to a year earlier. The bank incurred a loss of VND1.7 trillion (USD81.1 million) from gold trading last year.

The Vietnam Export Import Commercial Joint Stock Bank (Eximbank) applied the biggest pay cut among six listed banks in 2012. Its staff were paid an average VND6.3 million (USD300.6) each month last year, down 11.4% from a year earlier.

Sacombank staff had the lowest income at VND4.2 million (USD200.4) each per month on average in 2012, down 1% from 2011. This is a result of an increase in its staff by 76% after merging with Habubank, adding 74% to its staff payment.

The same situation is also recorded at many other unlisted banks.

The fall in banking salaries has been attributed to major bad debts as a result of the country’s economic difficulties.

In 2012, profits of the entire banking system decreased by a half compared to a year earlier.

The total net profits of six listed banks last year were down 28% from the previous year, at nearly VND14.29 trillion (USD681.77 million).