Vinacomin in the clear over duties
State-owned mining corporation Vinacomin will not be required to pay disputed additional import duties of $7.5 million.
This is due to a new ruling by authorities based on a technical judgment regarding truck cabins.
The dispute arose when state agencies, in their post customs clearance audit process, reviewed documents pertaining to auto component import shipments from September 13, 2007 to December 31, 2011 of V-Itasco, Itasco Construction and Itasco-CPM, under Vinacomin.
The audit found that several auto component sets of these companies had yet to meet breakdown level regulated in the Ministry of Science and Technology’s (MoST) Decision 05/2005/QD-BKHCN and a number of relevant Ministry of Finance (MoF) documents guiding classification of auto parts and components for tax calculation.
The components included medium and heavy trucks’ cabins and associated driver seats and subordinate seats.
During September 13, 2007 to December 31, 2011 the companies had filled in 59 import declarations and finalised import procedures for auto component sets with respective tax rates as levied on imported component sets.
Auditors ruled that medium and heavy trucks’ imported component sets should incur the tax duties like those applied to completely-built unit (CBU) import cars in respective relevant period, rather than the lower rates imposed on component sets as declared by these firms.
Tax authorities argued that the cabins must incur the tax rate as applied to imported CBU cars and relevant firms ought to pay additional tax amounts since the cabins were imported in whole form but not in parts for later assembly and electrostatic painting in Vietnam as required by the MoST’s Decision 05.
Vinacomin and its member firms were ordered to pay $7.5 million in tax arrears, a claim the company contested.
For its part, in a document stamped by Vinacomin’s general director Le Minh Chuan, the state miner said during 2007-2012 the group imported a total 1,345 component sets for KrAZ, Kamaz and Scania truck brands serving production. These parts had passed customs checks with import duties applicable to imported component sets.
Vinacomin argued it had basically followed regulations at the MoST’s Decision 05. In respect to cabins, since the trucks operating in mining site with tough terrain conditions, tropical climate and high humidity the imported cabins must be of top quality to sustain these tough conditions.
Vinacomin then could not import the cabins in parts for later assembly and electrostatic painting in Vietnam as required in Decision 05.
Vinacomin had proposed the MoST accept the breakdown level of its medium and heavy trucks’ imported component sets.
In October 2012, the inter-ministries of Science, Technology, Industry and Trade, after direct checks at Vinacomin’s production base, had agreed to Vinacomin’s proposal saying that due to current domestic production technology restrictions, imported cabins need to be in whole form with electrostatic painting handled abroad to ensure quality and technical specifications for medium and heavy trucks which operate in tough mining environment.
In mid January 2013, the MoF forwarded Dispatch 885/BTC-CST sourcing the government approval for Vinacomin to pay import duty for trucks’ imported components during 2007-2012 as those levied on component sets.
The proposal recently got the government’s thumbs-up.
Kazakhstan carrier eyes Hanoi
Air Astana will explore the possibility of flying to Hanoi after the Kazakh airline launched a service to HCM City, according to its president, Peter Foster.
Air Astana will consider plans for the new route as well as more flights between Kazakhstan ’s capital Almaty and HCM City by the end of this year.
Earlier this year, Air Astana began the Almaty- HCM City service via Bangkok and also a direct service using Boeing B757s between the two cities.
According to the General Statistics Office, Russians accounted for more than 54,000 out of the 1.21 million foreign arrivals in Vietnam in the first two months, a year-on-year increase of 38 percent.
Kien Giang plans Cambodia sea route
A sea route taking tourists from the Mekong Delta province of Kien Giang to Cambodia ’s Sihanoukville and Thailand will come into existence this year.
Speaking recently at a meeting with representatives of Thailand ’s Trat and Chanthaburi provinces, Le Minh Hoang, director of the province’s Department of Culture, Sports and Tourism, said Kien Giang and Thailand had agreed on a sea route to Cambodia .
Hoang said many foreign visitors travelling to Thailand and Cambodia also want to go to Phu Quoc Island off Kien Giang province by the route.
It will take visitors around two and a half hours to go to Sihanoukville by boat from Phu Quoc and two more hours to Trat.
Kien Giang received nearly 5.6 million local and foreign visitors in 2012, a year-on-year growth of 10 percent. It is expected to receive more than 5.88 million this year.
Banks optimistic about inflation
At least 90 percent of local banks believe that inflation will stay in the single-digits this year, according to a survey conducted by the State Bank of Vietnam (SBV).
Nearly 70 percent of banks predicted that the savings and lending interest rates would go down by about 2 percent, the SBV’s Monetary Statistics and Forecasting Department said.
The survey also indicated that the price adjustment managed by the State would present the biggest risk to inflation control this year, followed by the change in monetary and financial policies.
Participants forecast that the average inter-bank exchange rate between the USD and VND would rise by 1-3 percent.
Although the macro-economic situation remains weak, 90 percent of banks are still confident in the country’s business outlook.
Half predicted the economic situation would improve this year and most expect pre-tax profits to increase, although they do not see gains rising above 20 percent.
Most banks predicted credit growth would also improve compared to 2012, with gains between 10-20 percent.
Capital mobilisation is expected to grow in line with banks’ credit growth. However, capital mobilisation in VND would be much higher than that of foreign currencies.
Banks are also expected to continue allotting capital to prioritised sectors such as agriculture and rural development, export and support industries in order to spur the country’s economic growth.
While many banks still take a cautious view of both the country’s economic condition and their business results in 2013, they have found reasons to believe the situation will improve. Many expressed hope that the central bank would continue to cut interest rates, strictly handle any violations of the ceiling interest rate and create a healthy climate for currency trading performance.-
Vietnam, Germany hold seminar on energy policy
A seminar on energy policy for the 21st century and challenges to Vietnam and Germany was held in Hanoi on March 7.
The event was co-organised by the Central Institute for Economic Management (CIEM) and Germany’s Friedrich-Ebert-Stiftung (FES) institute during a visit by Dr. Matthias Machnig, Minister for Economy, Labour and Technology of the German state of Thueringen.
Speaking at the event, Machnig highlighted the role of energy in the 21st century, saying that the global economy should go in the direction of sustainable development and “green growth.”
Such a change requires the re-organisation of production systems, consumption structures and people’s lifestyle, he said.
In addition to sharing his country’s policy on energy production and consumption, the minister recommended a number of policies on the use of renewable energy and the reduction of greenhouse effects in Vietnam.
He emphasised the need to have clear policies and strong economic tools in the green growth strategy.
With a long coastline, Vietnam is capable of generating energy from wind, Machnig said, adding that the abundant bio-mass resources in rural areas should be utilized for renewable energy.
Vo Tri Thanh, deputy head of the CIEM, briefed about the energy production and consumption situation in Vietnam and difficulties facing the country in the field.
Pepper export turnover rises nearly 106 percent in first two months
Pepper export volume reached an estimated 25,000 tonnes in the first two months this year, valued at USD169 million, according the Ministry of Agriculture and Rural Development. These figures showed a 7.3 percent decrease in volume, but a 105.7 percent increase in value.
In February alone, pepper exports posted 13,000 tonnes, worth USD90 million. Major import markets of Vietnam’s pepper were the US (19.5 percent), Germany (10.28 percent), Singapore (8.5 percent), and the United Arab Emirates (UAE).
According to the Vietnam Pepper Association, domestic pepper prices are VNA124,000 per kilogramme, nearly VND10,00 higher than at the same period last year. This is encouraging traders to boost exports. The association forecast that the world’s pepper prices would continue to rise.
Quang Ninh closes coal mines
Authorities in the northern province of Quang Ninh will close 20 coal mining projects by 2015 and another 28 in the 2016-20 period, all in the three basins of Uong Bi, Hon Gai and Cam Pha.
The announcement was made at a conference in Ha Long City on Tuesday jointly held by the provincial People’s Committee, the Ministry of Industry and Trade and the Viet Nam Coal and Mineral Industries Group.
Speaking at the event, Deputy Minister Le Duong Quang said that the plan should follow the coal sector’s development strategy, which was approved by the Prime Minister in January 2012.
Vice Chairman of the provincial People’s Committee Do Thong added that the plan must also ensure national energy security, meet socio-economic, environmental and technical requirements, fit the province’s development plan and maintain stable jobs for more than 10,000 local miners.
The coal reserves in the three basins now total about 8.6 billion tonnes.
VN Airlines offers European discounts
Vietnam Airlines will reduce airfare to Europe by as much as 27 per cent from now until March 30, the national flagship carrier recently announced.
Accordingly, round-trip fare from Viet Nam to Frankfurt or London is now only US$550 and a trip to Paris now costs $600.
However, depending on the seat situation, the fares may be higher.
These fares do not include taxes and surcharges.
Ha Noi strives to stabilise foreign exchange
The Ha Noi People’s Committee has instructed the city’s authorised bodies to regulate and stabilise the foreign exchange market in city areas.
The instruction was delivered in a dispatch sent to the State Bank’s branch in Ha Noi on Wednesday.
Vice Chairman of the City People’s Committee Nguyen Huy Tuong said that after Tet, the local gold and foreign exchange market has been very volatile and predicted that the exchange rates in the black market and commercial banks are likely to rise strongly.
He attributed the increase as the main reason behind some experts calling for the country to devalue the dong so as to support exports, and added that unfounded rumours have caused fluctuations in the market.
To enhance co-ordination and control gold and foreign currency trading in the city, leaders of the Ha Noi People’s Committee have asked the State Bank’s branch in Ha Noi to conduct inspections of gold and foreign currency trading and crackdown on any illegal activity in border areas.
The branch will report to the State Bank of Viet Nam (SBV) monthly and quarterly to improve the level of supervision.
The domestic market yesterday saw a decrease of the buying and selling price of the US dollar, both in commercial banks and on the black market. Most selling prices fell below VND21,000 per US dollar.
The buying and selling prices listed at Vietcombank yesterday dropped strongly to VND20,900 and VND20,960, respectively.
At BIDV Bank, the buying/selling value of the US dollar was VND20,920-20,970.
According to the State Bank of Viet Nam, the average inter-bank exchange rate yesterday continued to stand at VND20,828 per US dollar. The ceiling exchange rate in commercial banks is VND21,036.
In troubled times, banks find reason for slight optimism
At least 90 per cent of local banks believe that inflation will stay in the single-digits this year, according to a survey conducted by the State Bank of Vieät Nam (SBV).
Nearly 70 per cent of banks predicted that the mobilised and lending interest rates for the Vietnamese ñoàng would go down by about 2 per cent, the SBV’s Monetary Statistics and Forecasting Department said.
The survey also indicated that the price adjustment managed by the State would present the biggest risk to inflation control this year, followed by the change in monetary and financial policies.
Participants forecast that the average interbank exchange rate between the US dollar and Vietnamese ñoàng would rise by 1-3 per cent.
Although the macro-economic situation remains weak, 90 per cent of banks are still confident in the country’s business outlook.
Half predicted the economic situation would improve this year and most expect pre-tax profits to increase, although they do not see gains rising above 20 per cent.
Most banks predicted credit growth would also improve compared to 2012, with gains between 10-20 per cent.
Capital mobilisation was expected to grow in line with banks’ credit growth. However, capital mobilisation of theVietnamese ñoàng would be much higher than that of foreign currencies.
Banks are also expected to continue allotting capital to prioritised sectors such as agriculture and rural development, export and support industries in order to spur the country’s economic growth.
While many banks still take a cautious view of both the country’s economic condition and their business results in 2013, they have found reason to believe the situation will improve. Many expressed hope that the central bank would continue to cut interest rates, strictly handle any violations of the ceiling interest rate and create a healthy climate for currency trading performance.
Japanese firms support Dong Nai
The Dong Nai provincial People’s Committee and the Kansai Bureau of Economy, Trade and Industry (KBETI) of Japan on Wednesday discussed future co-operation in support industries.
The two sides during their meeting shared unanimity to create favourable conditions for support businesses from the Kansai region to invest in the southern province.
Dong Nai will establish a consultation board to provide all-around support for Kansai businesses that want to operate in the locality.
A training system will also be established to provide human resources for the area’s growing industrial sector and increase links between Japanese businesses and training centres in Dong Nai.
More than half of Kansai business projects investing abroad target Asian countries, said KBETI Head Toshihiro Kobayashi, adding that co-operation with Dong Nai Province created a new investment direction for Kansai businesses.
The locality has attracted investors from 35 countries and territories with total registered capital exceeding US$23 billion, according to Chairman of the Dong Nai People’s Committee Dinh Quoc Thai.
Japan has the third most projects in Dong Nai, with over 130 businesses involved and a total investment of nearly 3 billion USD.
The locality will prioritise support industries and economic development in combination with environmental protection, Thai said, adding that Dong Nai hoped Japanese businesses would bring with them the best environmental treatment solutions.
During the seminar, 50 Japanese businesses already operating in Dong Nai shared their experiences with eight businesses that want to establish a presence in the province. They discussed the locality’s investment policy, incentives, administrative procedures and labour.
ASEAN trade important to VN
Viet Nam’s trade relationship with the ASEAN is growing in importance, according to Louis Taylor, CEO of the Standard Chartered Bank in Viet Nam, Laos and Cambodia.
“This year will be better for the domestic economy although conditions remain challenging,” he told a press conference held in Ha Noi yesterday.
“Exports are likely to be a key driver to the country’s economic growth in 2013. We expect the shift of manufacturing to Viet Nam from other developing countries to continue to benefit its trading sector. Free trade agreements currently under negotiation are also likely to favour continued improvement in external trade in the coming years,” he explained.
The ASEAN is the third-largest export market for Viet Nam, accounting for more than 10 per cent of the country’s total exports; it is the second-largest supplier to the country, accounting for 20 per cent of the nation’s total imports, according to Taylor.
A press release from the bank noted that Viet Nam’s trade with the bloc had grown significantly over the last three years.
In 2011, Viet Nam’s exports to ASEAN reached US$13.6 billion while imports from the bloc amounted to $20.7 billion. Last year, its total exports grew by 20 per cent, outpacing other regional nations.
Electronics exports registered outstanding growth of nearly 86 per cent year-on-year in 2012 due to trade with the ASEAN+3.
“Intra-bloc trade will continue to grow as member countries turn to new trade corridors to reduce their dependence on Europe and the US,” Taylor said.
“Further regional economic integration would benefit Viet Nam more and particularly help it increase capital and investment flows,” he stressed.
Taylor claimed that a relatively stable exchange rate benefited Vietnamese exports but Viet Nam had seen trade deficits with Singapore, Thailand and Malaysia for the last few years, a situation he said could be improved if the country’s export structure was upgraded.
Regionally, the country exported primary products such as crude oil and rice and imported higher-end products including refined oil and electronic parts.
Other CEOs of the bank in the region said that Viet Nam was witnessing a huge marketplace, but the country would have to assure policy consistency, improve goods quality, increase products’ domestic content and upgrade shipping infrastructure if it targeted market expansion.
The ASEAN+6, which includes China, South Korea, Japan, India, Australia and New Zealand, now generates a total gross domestic growth (GDP) of about $20 trillion or nearly 30 per cent of the global GDP, according to the bank’s experts.Senior-level jobs see high turnover
The turnover rate among senior-level workers is likely to grow this year as many hope to change their jobs, an online survey has found.
Fifty-four per cent of 3,361 white-collar workers surveyed said they were unsatisfied with their current jobs and want to change, according to a survey on senior employment trends in 2013, conducted by the domestic online network of management professionals in January.
More than 70 per cent of respondents hold managerial positions.
Only 5.2 per cent of respondents said they were totally satisfied with their jobs and did not want any change.
Senior workers in accounting/ finance and purchasing/supply chain positions had the lowest rate of job satisfaction and had the strongest desire to change jobs, accounting for nearly 60 per cent and 65 per cent, respectively.
Forty-four per cent of respondents said that a job meeting their long-term goals was the most important factor, followed by the right job role and responsibility, with 17 per cent; working environment, 14 per cent; and salary and benefits, 12 per cent.
The survey also collected data from 11 headhunter companies, including Manpower, Harvey Nash, LA, Infinity HR, RGF, Faro, Robert Walters, VTalent, Grey Finder, Career Planning and Talent Viet.
Six companies forecasted that the senior recruitment market would grow by 10-20 per cent in the next six to 12 months.
Only two companies anticipated that the demand would fall by 15 per cent, while three other companies said that it would remain unchanged until the year-end.
The six industries in need of recruiting senior workers in the near future are fast-moving consumer goods, education, manufacturing, healthcare and hospitality and tourism.
Industries with declining recruitment demand include banking, real estate, financial services, construction and information technology.
Fast-moving consumer goods, pharmaceuticals and oil and gas are predicted to maintain good salary increases, followed by retail/trading and e-commerce, which are forecast to have positive salary increase due to the growth of these industries.
The survey also found that more than 82.2 per cent of respondents have joined one to three online networks in Viet Nam and abroad to seek job opportunities at large companies and information about working environments.
The remaining 17.8 per cent of respondents said they had yet to register for any network.
“This survey aims to identify the latest trends and updates about the senior recruitment market, which gives high-level professionals clear views on the senior job market as well as helps business leaders prepare effective human-resource strategies,” said Thanh Nguyen, CEO of Anphabe.
Safety assurance needed for more farm exports to Japan
To increase farm produce and seafood exports to Japan, Viet Nam needed to ensure that goods met strict food safety and hygiene standards, said Doan Xuan Hung, the Vietnamese ambassador to Tokyo, at a seminar in the Japanese capital yesterday.
Viet Nam’s exports to Japan increased in recent years but still represented only about 1.7 per cent of Japan’s total imports, according to Hung. Many major products of Viet Nam, especially farm produce and seafood, had not yet appeared on the Japanese market.
It was important to make Japanese importers and consumers “feel secure”, an effort that could be helped along by governments and enterprises on both sides, he said.
Deputy Minister of Agriculture and Rural Development Nguyen Dang Khoa said that since the Viet Nam-Japan Economic Partnership Agreement on investment protection and free trade was signed in 2008, up to 86 per cent of Vietnamese exports to Japan had enjoyed tax incentives. The agreement opened up many opportunities for enterprises processing and exporting farm produce and seafood, he said.
Last year, exports of these commodities to Japan reached over US$2 billion, a result Khoa said still lagged behind potential.
Viet Nam would continue to work on quality assurance and food safety management systems to ensure its goods met strict international requirements, he said.
Masamitsu Nakaizumi, a representative of the Japanese Ministry of Agriculture, said it was also very important for Viet Nam to pay adequate attention to agricultural development since 80 per cent of its population lives in rural areas.
He said Japan had assisted Viet Nam with expert exchanges and farm produce hygiene improvement projects over the last few years, efforts which he expected to intensify in the future.
Viet Nam was proving a more and more attractive destination for Japanese enterprises with an average per capita income of $1,500, said ASEAN-Japan Centre General Secretary Yoshikuni Onishi.
As the two countries marked their 40th anniversary of diplomatic relations, the centre planned to carry out a series of projects to foster bilateral economic cooperation as well as trade, investment and tourism relations. Recent conferences discussing the Vietnamese investment environment had drawn great interest from Japanese enterprises, he noted.
The Japanese Ministry of Foreign Affairs said that a wave of investment from Japan to Viet Nam had boomed after Prime Minister Shinzo Abe visited the Southeast Asian country in 2006, and his visit early this year was expected to spur a new surge of capital. In Hung’s words, the relationship between Viet Nam and Japan was “finer than ever”.
ADB backs low carbon agriculture
The Asian Development Bank (ADB) will provide US$111.88 million in loans to Vietnamese low-carbon agriculture projects.
A $74 million loan from ADB’s Asian Development Fund (ADF) will finance the Low Carbon Agricultural Support Project, which seeks to reduce pollution from agricultural waste and create a healthier environment in ten provinces.
Currently, agriculture creates up to 50 per cent of national greenhouse gas emissions. Livestock– a major part of life for people in rural areas – produce 35 per cent.
The Project Preparation and Startup Support Facility received a $37.88 million ADF loan in order to better implement ADB-financed projects and ensure that aid was used effectively.
The journey from preparing a project to making a loan effective is very long, according to ADB’s Viet Nam Country Portfolio Review. Implementation difficulties, increased transactional costs and delayed development benefits reduce aid effectiveness and investment efficiency.
However, Kimura said that Viet Nam was beginning to move down a path of low-carbon climate resilient development with the adoption of the Green Growth Strategy.
“The ADB is ready to support Viet Nam to realise its vision of low-carbon and inclusive growth and accelerate its efforts to transform Viet Nam’s agricultural production into a more environment-friendly and sustainable system,” he said.
Hoa Sen Group posts high annual growth
Hoa Sen Group, a leading coated-steel sheet producer in Viet Nam, has posted an annual growth of more than 130 per cent in post-tax profits for the fiscal year of 2011-12.
At its annual shareholders’ meeting held in HCM City on Wednesday the group’s chairman Le Phuoc Vu reported that the group achieved a net profit of nearly VND370 billion (US$17.6 million) in the reviewed year.
The last fiscal year lasted from October 2011 to the end of September 2012.
Vu also announced that the group’s sales last fiscal year increased 18.6 per cent compared with the previous year, reaching more than 453,000 tonnes.
Meanwhile, the turnover that his group earned was more than VND10 trillion ($480 million), a year-on-year rise of more than 23 per cent, he said.
“Hoa Sen is one of the few enterprises continuing to grow in sales volume, net sales and profit in 2012 in spite of difficult economic context,” he said.
The group’s success was attributed to the development of distribution systems in both domestic and foreign markets.
Along with a campaign of developing their trademarks, this helped them to ensure stable sales as steel consumption in the country fell.
In addition, the group decided to increase exports, about 180,000 tonnes that earned $180 million.
This contributed to more than 37 per cent to total net sales. With these results, the group became one of the leading coated-steel sheet exporters in Southeast Asia.
According to Vu, the strong development of exports provided the group with stable foreign-cash sources to import raw materials and reduce the risks caused by the unpredictable changes in the exchange rate.
In addition, the investment on advanced technologies and human resources played an important role in their success by increasing yield and cutting costs.
For the fiscal 2012-13 year, the group will continue to expand exports, with a target of increasing export turnover to 40-50 per cent of the total sales. In the domestic market, it plans to open an additional 15-20 retail stores nationwide.
The group targets a revenue of VND11 trillion ($524 million) and net profit of VND400 billion ($19 million) during the period.
Lawsuits pose risk of losing steel export markets
Local steel exporters are facing a risk of losing their markets as Indonesia and Thailand have demanded anti-dumping measures on Vietnamese steel products exported to these countries.
The early warnings about non-tariff barriers against Vietnamese steel products erected by the major markets in Southeast Asia are becoming a reality. Indonesia has filed a lawsuit and Thailand has sent its warning to the Vietnam Steel Association (VSA).
In September 2012, South Korea’s Posco submitted a proposal to Vietnamese authorities, seeking non-tariff barriers against cold-rolled steel products from other countries.
Explaining its move, the steelmaker said “other ASEAN countries such as Indonesia and Thailand have set up and used non-tariff barriers to prevent Vietnamese steel.”
Vietnam had not done anything when the Indonesian Trade Safeguard Committee (KPPI) brought a trade defense lawsuit against cold-rolled steel products from Vietnam and four other nations.
Meanwhile, the metal-plated and color-coated steel sheet association of Thailand issued a warning against the influx of galvanized steel sheets from Vietnam into this market.
In the first case, Posco has the biggest volume of steel exported to Indonesia, while Hoa Sen Group is the major party in the second case.
Indonesia is a newly-explored market, not as large as the U.S., so the lawsuit initiated by this country may have minimal impact on local steelmakers.
However, Nguyen Tien Nghi, vice chairman of VSA, emphasized it is difficult and costly to penetrate a new market. Therefore, losing a market will certainly affect outputs of steel producers.
It seems KPPI will not offer exporters any concession. Indonesia has levied anti-dumping duties of as much as 36.6% on cold-rolled steel imported from Vietnam and some other countries, making the door to this market narrower.
Meanwhile, the metal-plated and color-coated steel sheet association of Thailand has expressed its goodwill. After doing a survey in the local market, the association has had a meeting with Vietnamese producers.
Export is currently seen as a lifebuoy for producers of cold-rolled steel and color-coated steel sheets when domestic supply has exceeded demand.
Local steel mills has a combined annual capacity of over three million tons of cold rolled steel, while only around 1.5-1.6 million tons is consumed in the domestic market every year. Similarly, the total capacity of large galvanized steel sheet plants is now 2.5 million tons, but only some one million tons is sold every year.
Therefore, export is the only way to cut losses, said Nghi.
Favorable export in recent years has generated high sales and profits for Hoa Sen Group. However, if facing problems such as lawsuits, the group will be greatly affected.
Local steel firms are looking for new markets to find a way out, he said. For example, South Africa, the gateway to Africa, is the target of VSA and steelmakers.
Top city hotels see occupancy rise to 80%
The room occupancy rate for five-star hotels in HCMC is estimated to stand at 80% this month, substantially higher than the same period last year, said hotel representatives.
Dang Huy Hai, deputy general director of the New World Saigon Hotel, said the average occupancy rate of his hotel will be 82% this month, versus 75% in the same period last year.
A lot of guests come from neighboring Asian countries with the numbers for conventions also rising, leading to higher revenues for five-star hotels.
“On many days this month, our hotel will be fully occupied. Bookings for next month are also fairly good,” he said on the sidelines of a meeting held by the HCMC Tourism Association on Wednesday.
Nguyen Anh Vu, general director of the Majestic Hotel, said the average occupancy rate of the five-star hotel would be around 80% this month with an increased number of business guests.
Tao Van Nghe, general director of the Rex Hotel, said high-grade hotels in HCMC would perform well this month.
“At our hotel, the average room occupancy rate will be above 80%, which will remain high until April. Hotels in the entire city will have no problem this month,” he said.
Only a few hotels have raised room rates to cover rising input costs, while many hotels have maintained stable prices to ensure competitiveness. The average room rate of high-grade hotels in HCMC is US$150 per night, said Nghe.
“Most hotels dare not increase room rates because our city is not yet an attractive destination to many visitors. Despite very good services, hotels keep prices unchanged to lure guests,” he said.
The number of individual Japanese business guests is rising significantly.
“We have welcomed a lot of businessmen from Japanese companies. The number of such guests is surging,” said Hai of the New World Saigon Hotel.
Similarly, Vu said Japan had become the largest market for his hotel. The majority of visitors from Japan are in business.
VIB offers VND1 trillion soft loans for stockpiling rice
Vietnam International Bank (VIB) has officially launched the program “VND 1 trillion at a maximum rate of 11 per cent per annum for rice stockpiling in the 2012-2013 Winter-Spring crop” from March 6-31.
Accordingly, enterprises assigned by the Vietnam Food Association to stockpile rice harvested in the 2012-2013 Winter-Spring Crop can borrow loans from VIB at a maximum rate of 11 per cent per annum. Particularly, the Vietnamese government will support 100 per cent interest rate for these loans through May 2o, 2013.
VIB is one of a few banks which were approved by the State Bank of Vietnam (SBV) to offer loans for rice reserves in the Winter-Spring crop this year. Through this programme, enterprises will not only get a large source of finance for stockpiling rice but also enjoy preferential lending rates and financially significant support from the government.
“Rice is a prioritised sector of VIB in our development direction. With more than 10 years’ experience in lending for rice purchase, we have always attempted to look for and offer an abundant source of capital at preferential rates to best support enterprises. By participating in this programme, VIB has demonstrated our capability and reputation in the eyes of SBV and corporate customers. This will help us continue to be selected in other programmes,” said Vivek Chand, deputy CEO and head of Wholesale Banking of VIB.
BASF sets the bar high
BASF, a world leading chemical company, is striving to increase this year’s sales and earnings in all operating segments.
“We aim to grow again in 2013 and exceed the 2012 levels in sales and earnings before interest and taxes (EBIT) before special items,” said Dr. Kurt Bock, chairman of the Board of Executive Directors of BASF SE.
The expected increase in demand, together with measures to improve operational excellence and raise efficiency, would contribute to this, he added. BASF aims to earn a high premium on its cost of capital once again in 2013.
Bock said: “Innovations are the basis for future profitable growth and thus lie at the core of our competitiveness.” Therefore, BASF will once again increase its research and development spending in 2013, after expenditures of €1.7 billion in the past year – around 9 per cent more than in 2011.
The company saw sales increase in almost all segments in 2012’s fourth quarter.
In chemicals, sales in the fourth quarter increased. For the full year 2012, chemicals sales increased by 7 per cent to €13.8 billion.
The fourth quarter’s sales in plastics increased due to higher volumes and prices as well as positive currency effects. In 2012, sales in the plastics segment increased 4 per cent to €11.4 billion. EBIT before special items declined by 27 per cent to €873 million.
As for performance products, sales for the full year 2012 of €15.9 billion were around 1 per cent higher than in the previous year. EBIT before special items fell 17 per cent to €1.4 billion.
Sales in functional solutions in 2012 were €11.5 billion, 1 per cent higher than in 2011. At €561 million, EBIT before special items was slightly above the previous year.
Sales in agricultural solutions were up in the fourth quarter of 2012. BASF’s agricultural solutions had another record year in 2012, with sales rising by 12 per cent to €4.7 billion and EBIT before special items growing by 28 per cent to more than €1 billion.
Sales in oil and gas in the fourth quarter grew strongly mainly due to significantly increased oil production in Libya and higher volumes from natural gas trading. For the full year, sales rose by 39 per cent to €16.7 billion and EBIT before special items almost doubled to €4.1 billion. Net income also grew to €1.2 billion.
In the fourth quarter, sales in the company’s other areas were around €1.2 billion. These activities include the sale of raw materials, engineering and other services, rental income and leases. EBIT before special items declined by €91 million mainly due to lower earnings of other businesses. In 2012, these sales were €4.8 billion, a decline of 24 per cent and EBIT before special items decreased to minus €839 million. This was primarily due to the divestiture of the styrenic plastics activities and the fertilizer business, BASF said.
For the full year 2012, the company increased sales to €78.7 billion, up per cent compared with 2011. EBIT before special items improved by 5 per cent to €8.9 billion and EBIT by almost 5 per cent to around €9 billion. Net income fell by €1.3 billion to €4.9 billion.
At the annual shareholders’ meeting, the Board of Executive Directors and the Supervisory Board will propose a higher dividend of €2.60 per share. This is an increase of €0.10 compared with the previous year. Based on the 2012 year-end share price of €71.15, the dividend yield would be 3.65 per cent.
Coffee sector gears up for sustainable growth
Coffee growers in the Central Highlands are replacing their old trees with new plants in efforts to increase the yield and quality of coffee beans.
As one of the world’s top coffee exporters, Vietnam now has more than 525,000 hectares under coffee trees, 90 percent of which are in the Central Highlands. However, statistics by the Vietnam Coffee-Cacao Association showed that in the next 3-5 years, half of the coffee trees in the country will reach 20 years old, which mean they are too old to bear profitable yields. In that context, the Tay Nguyen Agriculture and Forestry Science Institute has been providing farmers with young plants and seeds of new strains.
According to the institute’s director Le Ngoc Bau, scientists from the institute have produced several varieties of Robusta coffee, which have received permission from the Ministry of Agriculture and Rural Development to be grown on large scale. The new varieties produce high yield with bigger beans and are highly resistant to diseases.
Besides supplying between 500,000 to 1 million young plants and 20 tonnes of seeds, as well as more than 200,000 grafts each year to replace old trees, the institute has also provided coffee farmers with advanced cultivation techniques and taught them how to intercrop to increase income.
Bau proposed that the Government, ministries and sectors should increase investment in scientific and technological research on the cultivation of coffee tree, taking into account the plant’s important role in the national economy.
He said it is necessary to conduct a comprehensive research programme on the coffee industry’s entire production process to help increase the added value of this export staple and help the sector achieve sustainable growth.
In the 2011-2012 crop, the country earned nearly 3.4 billion USD from exporting around 1.6 million tonnes of coffee bean.
Sagging Vinacafe seeks help
Economic woes have left the state-run Vinacafe’s cup dry. Now the company is asking for a financial refill.
Vinacafe last week reported that it and its subsidiaries suffered poor performance last year due to capital shortages and unfavourable markets.
Vinacafe’s general director Nguyen Nam Hai said that Vinacafe wanted to be supported by the Vietnamese government to resolve its debts and losses. The corporation last week also asked the government for a loan worth VND4.5 trillion ($216.34 million) to buy 100,000 tonnes of coffee beans from farmers to stockpile for exports this year.
Vinacafe’s cumulative loss until last year was VND382.5 billion ($18.39 million), and the total debt of the corporation and its subsidiaries was over VND141.66 trillion ($141.66 million).
In 2012, Vinacafe’s total revenue and its subsidiaries was VND5 trillion ($240.38 million), down 2 per cent on-year, while their profit was VND105 billion ($5 million), down 45 per cent on-year.
Even, Vinacafe has to pay back the government a VND61 billion ($2.93 million) loan it earlier borrowed to build its coffee processing facility in the Central Highlands’ Viet Duc area.
Vinacafe also asked the government to allow it to reschedule the loan payment of VND126 billion ($6 million) within five years and another VND35 billion ($1.68 million) within three years, due to coffee plantation failures. Moreover, Vinacafe is also asking the government and relevant ministries to reschedule the payment of its overdue VND50 billion ($2.4 million) loan. All these sums came from Agency for French Development’s official development assistance (ODA).
Meanwhile, the corporation’s subsidiaries last year suffered from long-lasting big losses.
“These companies’ operations largely depend on bank loans, while the lending rate was very high. Besides, there was a slash in coffee selling prices since late 2009,” said the corporation’s vice chairman Le The Chi.
“Vinacafe Da Lat and Vinacafe Export-Import Centre had insufficient capital for operations. As a result, they almost had no operations last year, while their lending rate at banks was too high at 18 per cent, per year,” he said.