HCM City to reclaim coastal land
Experts from the Netherlands have helped HCM City develop a plan to reclaim land from the sea to provide additional room for urban and economic development.
On March 21, HCM City Department of Natural Resource and Environment announced their strategy to develop the city and harbour towards the sea. Since 2011, consultancy firm Grontmij and the municipality of Rotterdam have assisted the Vietnam Climate Adaptation Partnership (VCAPS) to develop the strategy.
The strategy pointed out six development orientations including redesigning the sewer system and reservoirs, reducing land subsidence by creating more choices in the use of underground water, and establishing a green city project.
The report suggested that urban planning to 2025 should develop toward the northwest and northeast instead of northwest and south. Currently, the southern areas are affected by unstable, low-lying areas subject to tidal flooding and are unsuitable for large-scale urban planning.
For port development, dredging operations have been carried out but careless dredging has allowed increased sea water encroachment upstream.
Ho Long Phi, Deputy Head of HCM City Anti-flooding Program, director of the Centre for Water Management and Climate Change under the National University in HCM City agreed to not build dikes to protect low-lying areas. If they protected the low-lying areas, people would flock there immediately.
Moreover, the southern region has experience numerous storms in recent years so climate change mitigation should be covered in the strategy.
Nguyen Dinh Hung, Deputy Director of HCM City Urban Planning and Architecture said the current strategy only emphasized port development and he requested a more detailed plan about city’s expansion toward the sea.
Governor meets Danang entrepreneurs
Governor Nguyen Van Binh of the State Bank of Vietnam (SBV) on Wednesday met leaders of Danang City and representatives of the city-based banks and companies to discuss the monetary measures for socioeconomic development.
Several issues, such as bad debt, credit growth, interest rate, the property market and the gold market, were discussed at the meeting, but entrepreneurs cared much about loans and interest rate.
Binh said it is hard to lower deposit and lending rates at present. The ceiling lending rate could only go down one percentage point to 15% from the current 16% and up to 18% at the end of last year, he said.
Nguyen Thi Kim Nu, general director of Thien Kim Joint Stock Company, complained that her company, even though guaranteed by Danang’s government and the municipal Department of Planning and Investment, could not take out loans.
In response, a representative of DongA Bank, where Nu wants to borrow loans, said the bank had granted Thien Kim Company VND12 billion for its steel billet project, while the property projects of Thien Kim were deemed unfeasible, so the lender refused to give loans.
As of end-February, credit institutions in Danang had mobilized over VND49.9 trillion, up VND974 billion against end-2012. Individual clients deposited some VND35.1 trillion and organizations made a total deposit of over VND14.7 trillion, according to the central bank’s branch in Danang.
Mekong Capital sells stake in phone distributor
Fund manager Mekong Capital on Wednesday announced that Mekong Enterprise Fund II (MEF II) under its management had sold part of its stake in The Gioi Di Dong Joint-stock Company, a big local mobile phone distributor, to a financial company.
Total revenue from the transfer including dividends is 11 times higher than the initial investment by MEF II in 2007. The deal reduced the fund’s stake in The Gioi Di Dong to 25.8% from 32.5%.
Chris Freund, general director of Mekong Capital and board member of The Gioi Di Dong, announced that this has been a successful investment of the fund since it acquired a stake in the mobile phone retailer in 2007.
In a report on investment activities announced in the third quarter of last year, MEF II said the retail chain Thegioididong.com achieved a high profit growth in the quarter.
Mekong Capital in the report informed The Gioi Di Dong had completed necessary procedures to seek permission from the State Securities Commission to become a public company. The retailer will have its shares listed as soon as it goes public although the listing date is yet to be available.
In the meantime, The Gioi Di Dong declines to name the financial institution that acquired the stake from MEF II.
MEF II, the second fund among the three investment funds managed by Mekong Capital, has invested in ten enterprises so far but it already divested the entire equity at International Consumer Products Corporation (ICP) and the retail chain Mai Son.
LPG warehouse opens in BR-VT
PetroVietnam Gas Corporation (PV Gas) on Wednesday opened the 60,000-ton facility storing liquefied petroleum gas (LPG) at the Thi Vai LPG terminal in Ba Ria-Vung Tau Province.
Having an investment of nearly VND2.52 trillion, or some US$120 million, the facility covering 16 hectares will store refrigerated LPG of PV Gas and other gas importers.
The opening of Thi Vai LPG storehouse in Ba Ria-Vung Tau Province helps raise the country’s total gas storage capacity from some 31,000 tons to 90,000 tons.
With the new facility, PV Gas has developed an infrastructure system for the oil and gas industry with total assets of nearly US$3 billion after nearly 23 years of operation. PV Gas currently operates Cuu Long, Nam Con Son and PM3-CM gas systems.
PV Gas is also supplying gas for 11 power plants, two fertilizer plants and several industrial production facilities, meeting over 40% of the country’s total electricity demand, 70% of the fertilizer demand and 60% of the LPG demand.
Bidiphar wants to build cancer drug plant
Binh Dinh Province-based Binh Dinh Pharmaceutical and Medical Equipment Company (Bidiphar) is seeking approval from the Ministry of Health to carry out the project of developing a plant producing cancer treatment drugs.
The provincial government said in a document sent to the ministry that the plant will be constructed under high and advanced technology meeting European standards which have not been applied by any domestic firms.
However, the project’s investment capital is not mentioned in the document.
The project was approved by the provincial government and the Ministry of Science and Technology at a meeting with leaders of Bidiphar held early this year.
According to the provincial government, the project can help ensure the supply of cancer treatment drugs for the community and reduce the dependence on foreign drug manufacturers. Besides, the price of drugs produced domestically is lower than that of imported ones.
Bidiphar, wholly owned by the State, is one of the large firms in Binh Dinh Province. The company operates several subsidiaries, including Bidiphar 1 Pharmaceutical Co., Quy Nhon Mineral Water Co., Binh Dinh Printing and Carton Co. and Bidiphar Rubber Co.
Bidiphar’s drugs were distributed at nearly 4,000 drug stores, agents and 856 medical centers nationwide last year and have also been exported to Laos, Cambodia, Italia, Canada, Mongolia, South Africa and South Korea.
The firm earned revenues of nearly VND2 trillion last year, up 13% year-on-year, including an amount of VND1.2 trillion from pharmaceuticals.
Bidiphar targets to earn over VND2.1 trillion in revenues this year.
Investors’ role should be enhanced in land withdrawal
The draft of the amended Land Law highlights the State’s active role in land withdrawal for project development, but the role of investors should not be ignored, heard a seminar on the draft in HCMC on Wednesday.
The seminar was held by the Vietnam Chamber of Commerce and Industry (VCCI) in coordination with the Ministry of Natural Resources and Environment and the Economic Committee of the National Assembly (NA).
Lawyer Phan Thong Anh, director of Vinalaw Company, wondered whose interests are protected in the process of land withdrawal, whether it is the interests of land owners, of investors, or of both.
He proposed: “Land withdrawal must be done in a transparent manner, according to the market prices and for the sake of both parties.”
Compensation rates should be negotiated between investors and land owners. In case they could not reach an agreement, the State would make the decision, he suggested.
Associate Professor Nguyen Ngoc Dien said land withdrawal should only be carried out when the State can calculate accurately and sufficiently all the gains and losses.
If unable to do so, the State should let investors seek ways to buy land by themselves. The State can assist investors by giving them the priority to purchase land, he said.
The amended Land Law will reduce the scope of entities that can be allocated land. In addition, land use fee will no longer be charged and instead, the State will collect land rents.
The provisions on project progress are stricter. If investors left the land sites allocated to them unused in 12 consecutive months or if their projects fell 24 months behind schedule, they would be given a 12-month extension only.
After the extension period, if their projects were still moving slowly, the land sites would be revoked and their investment sums would not be refunded.
Investors have to pay deposits when they register projects. This is aimed to eliminate financially incapable investors.
Nguyen Dang Liem, rector of Gia Dinh University, said investors should be allowed to mortgage land use right and properties attached to land at foreign banks to take out loans. In case they could not repay loans, the foreign lenders would put up their collateral for sale, so there is not worry land use right would be transferred abroad, he said.
ProPak boasts green packaging machines
Some 80% of the machines and equipment on display at ProPak Vietnam 2013, an international processing and packaging tradeshow that opened in HCMC on Wednesday, apply eco-friendly technology, said the organizer.
Eco-friendly machines are those consuming less energy and delivering high performance, said Justin Pau, general manager of Bangkok Exhibition Services Co. Ltd., the co-organizer of ProPak Vietnam 2013.
Such high-tech machines are not cheap, but there are still various options for enterprises, depending on their demand, he told the Daily.
Visiting the tradeshow, Vietnamese entrepreneurs can evaluate the technology of the machines and equipment and compare with their own. Then, they can draw up plans for technological innovation in order to make high-quality products for domestic consumption as well as export, he said.
Vera Fritsche from the German Engineering Association (VDMA) as an exhibitor at the event described Vietnam as a potential market for Germany’s tool manufacturers.
Vietnam has been among the top ten Asian importers of food processing and packaging machines in recent years because of the surging demand for processed food and drinks at home. Around 26% of the food processing and packaging machines in Vietnam are imported from Germany and 21% from China.
The three-day ProPak Vietnam 2013 at the Saigon Exhibition Convention Center in HCMC’s District 7 features booths set up by over 250 exhibitors and five international pavilions of Germany, Singapore, South Korea, Taiwan and Thailand.
HCM City to develop new Mien Dong Coach Station next year
HCMC will next year develop the new Mien Dong Coach Station project in District 9 whose area doubles that of the current one in Binh Thanh District, said a source from Saigon Transportation Mechanical Corporation (Samco) as the project owner.
The project owner will mainly focus on site-clearance and investment preparations this year, said Le Van Pha, deputy general director of Samco. Next year the scheme will start construction for completion at the end of 2015, he added.
In the zoning plan, the new Mien Dong Coach Station project covers 14 hectares near Suoi Tien Theme Park in District 9. The new facility will be designed as a modern-style structure likened to airports and will be connected with the depot of the under-progress metro line No.1 to facilitate local travel demand.
Regarding the new Mien Tay Coach Station, Pha said it is still unable to choose a location appropriate with the city’s overall zoning plan.
The new station, however, will be developed on about 11 hectares in the outlying district of Binh Chanh, nearly tripling the present facility’s area. It will be connected with the metro line 3b’s terminal as per the plan.
The two new stations are expected to cost around VND3.5 trillion, with some VND1.8-2 trillion for the new Mien Dong Coach Station alone.
Shrimp exports to South Korea face ethoxyquin tests
South Korea, a big market for Vietnam’s shrimp in Asia, will test the ethoxyquin contents in shrimp shipments from now until the year-end.
According to the National Agro-Forestry-Fisheries Quality Assurance Department (Nafiqad), Vietnam’s shrimp exports to South Korea will undergo the ethoxyquin test in one year. The level permitted by South Korea’s Animal, Plant and Fisheries Quarantine and Inspection Agency (QIA) is 0.01mg/kg, equivalent to Japan’s standard.
Speaking to the Daily, Truong Dinh Hoe, general secretary of the Vietnam Association of Seafood Producers and Processors (Vasep), said that the decision about the ethoxyquin tests was made as many South Korean firms also processed shrimps imported from Vietnam before exporting them to Japan.
Therefore, the ethoxyquin tests are imposed on Vietnam’s shrimp exports to avoid potential difficulties of South Korean firms in the Japanese market.
Regarding the Japanese market, there were 30 local firms detected violating the antibiotic residues from June 12, 2012 to February 7, 2013.
However, according to Nafiqad’s Document 421 sent to seafood firms, South Korea did not say how many shrimp shipments from Vietnam would be tested. Previously, with the ethoxyquin residues, Japan at first tested 30% and then 100% of Vietnam’s shrimp export batches.
Currently, shrimp export to Japan is still in difficulty due to the tests although the Ministry of Agriculture and Rural Development has worked with Japan for several times to address the problem. In addition, Vietnam’s shrimps are facing a risk of anti-subsidy tax in the U.S. market.
Difficulties in the importing markets may make the fishery export target of US$6.5 billion set by the ministry unobtainable.
According to Vasep, seafood export in the year’s first two months dropped by 0.6% to US$779 million, with shipments to the U.S. declining by nearly 10%, EU 33%, Japan 33%, Mexico 55% and China 23.5%.
Agriculture sector needs revolution
Forecast and strategies for farm produce development amid tough competition and sustainable growth for the agriculture industry will be the main topics of the Vietnam Agricultural Outlook Conference 2013 (Outlook 2013) set to take place on April 4.
The organizers, the Center for Agricultural Policy Consulting and the Institute of Policy and Strategy for Agricultural and Rural Development, said that the nation is facing many challenges such as poor farm produce processing capability and substandard food hygiene and safety.
Besides, uncertainties in the macro environment have caused many challenges to businesses in the industry and livelihood of farmers.
The global farm produce market is expected to face hardship this year due to complicated price fluctuations and strict requirements of consumers.
As this year marks five years of Vietnam’s admission to the World Trade Organization, the nation will have to open its door widely to many types of imported food and agricultural products. Meanwhile, local exporters will be obstructed by strict quality standards and trade conditions.
The Outlook 2013 organizing board will hold three meetings for rice, farming and aquaculture sectors. Guests will have a chance to learn about information and have discussions with experts from related agencies, associations and representatives of the Ministry of Agriculture and Rural Development.
A special meeting on rural development will also take place to help guests exchange the latest study results and significant discoveries in rural development and welfare of local farming households in the current context.
Cement association worries about foreign competition
Many Vietnamese cement companies are on the verge of bankruptcy, which would lead to them being bought out by foreign partners, according to the Construction Material Association.
According to the association, due to the economic difficulties, domestic demand for cement during the 2011 – 2013 period was forecast to decrease by around 14-15 million. Meanwhile, new projects had continued being implemented.
The association said by 2015, total cement output of the country would reach 94.24 million tonnes, resulting in a 25 million tonne excess, this would rise to 129.5 million tonnes by 2020.
The association suggested reviewing the list of cement projects to more realistically match market demand and focus on raising the efficiency of plant management. It has also recommended the cancellation of nine planned cement projects and a reconsideration over nine others scheduled to receive investment between 2016 and 2030 as their technology would be largely redundant by 2030.
A number of cement projects which have been licensed have been delayed due to weak investor financial capacity, such as projects in the central provinces of Binh Phuoc, Nghe An, Thua Thien-Hue and Quang Binh.
Risk of losing the local market
In reality, several loss-making cement companies have had to sell their projects to foreign partners. Semen Gresik Indonesia bought Vietnam’s Chinfon and Thang Long cement plants. The foreign-invested firms now account for up to 30% of the Vietnamese cement sector’s total output.
According to the association, it was essential to restructure cement companies and establish cement production complexes which are strong and competitive enough to control the domestic cement market.
“At present, Vietnam is home to 46 cement companies, but only, Vicem can produce over 20 million tonnes annually,” said Chairman of the association Tran Van Huynh said.
SCIC’s revenue sources raise concerns
The State Capital Investment Corporation (SCIC) has earned trillions of VND via bank deposits, accounting for 40% of its revenues in 2012.
SCIC’s primary objectives are to represent the interest of state capital in enterprises and invest in key sectors and essential industries in order to strengthen the dominant role of the state sector. However SCIC seems to have earned more through savings.
According to SCIC’s report, in 2012, out of its total revenues of VND3.888 trillion (USD185.7 million), VND2.151 trillion (USD102.4 million), or 55%, were derived from dividends. Interest from the corporation’s deposits accounted for up to 40% of its revenues in 2012. Meanwhile, the sale of state capital, SCIC’s main business area, accounted for just 4% of its revenues this year.
SCIC revenues in 2012 were directly affected by the slump in deposit interest rates, which went from 14% in 2011 to only 8%, the report said. Lower interest rates reduced SCIC’s revenue to VND1.5 trillion (USD71.4 million) from deposits. The interest suggests that SCIC has deposited as much as VND19.6 trillion (USD933 million), far higher than the 2011 figures of VND10.5 trillion (USD476.2 million) in deposits.
Explaining its dividend revenues, which were higher than the annual target, the SCIC said that initially a number of businesses did not have plan for dividend payout or just planned to offer a low payout rate, but in fact, later they changed their policies and paid out at a higher rate. For example, the Germadept Joint Stock Company, which initially did not have any plans for a dividend payout, later spent VND19 billion for this; Bao Minh Insurance JS company set a target of a dividend payout of VND19 billion, but later increased it to VND45 billion (USD2.14 million).
However, revenues from selling state capital reached only VND170 billion (USD8.1 million) in 2012, or 4% of the corporation’s total revenues in the year, fulfilling just 25% of the year’s target.
The low revenues from selling state capital were attributed to low liquidity in the stock market in 2012, causing difficulties for selling listed companies in particularly and selling capital in general.
Moreover, many companies in which SCIC wanted to sell their stake were small and medium-sized which have low operational efficiency. Some of them face lawsuits.
In 2012 the company disbursed VND1.25 trillion (USD59.5 million) for investment, more than VND1 trillion (USD47.6 million) of which went to increase capital at the debt-ridden Vietnam Construction and Import – Export JSC (Vinaconex).
The disbursement has become controversial as it remains to be seen whether SCIC can recoup the investment given the troubled financial state of Vinaconex.
This year, SCIC expects to raise its revenues to VND3.49 trillion (USD166 million), up 8.9% with the majority from selling state capital. Meanwhile, revenues from dividends and financial activities could decline 15.2% and 23.5% against 2012 respectively.
Senior economist Pham Chi Lan said depositing funds is the easiest and safest investment but does not contribute much to serving the common interests and urged SCIC to be transparent and publicise its investments.
“The SCIC is actually not as helpful as we desire, it should be separated from the Ministry of Finance and be supervised as an exchange-listed company” and “return to the initial model of the Singaporean Temasek,” Mrs. Lan said.
Economist Le Dang Doanh said SCIC used state capital as deposits and then used the interest to lend to enterprises, which would cause difficulties for small businesses. Therefore, SCIC’s operation should be reconsidered.
A representative from the SCIC said due to the public concern, the corporation would send its report to management to explain the revenues from bank deposits.
Nguyen Van Phuc, Deputy Head of the National Assembly Economics Committee, said the committee was investigating the case.
British, Japanese firms join hands for business development
Representatives of Harvey Nash Vietnam and Mocap Vietnam cut the deal for a partnership to set up a call center business in Vietnam – Photo: Courtesy of Harvey Nash Vietnam
British-invested Harvey Nash Vietnam yesterday announced to have signed an agreement with Mocap Vietnam for a partnership to build a call center business in Vietnam in a move to promote software and business process outsourcing to the Japanese market.
The agreement allows Harvey Nash Vietnam to take a 15% stake in Mocap Vietnam and to transfer its call center business to the Japanese partner.
Harvey Nash Vietnam is a wholly owned subsidiary of Harvey Nash Group plc, a listed public company in the UK. Meanwhile, Mocap is owned by Mitsui Co, Moshi Moshi Hotline, INC. and Smart Media Joint Stock Company.
Under the partnership, the two companies form an alliance to create the largest call center, business process outsourcing and technology business in Vietnam.
The English company will bring 12 years of expertise in software and business process outsourcing while Mocap Vietnam will bring the expertise of Moshi Moshi in-bound and out-bound call center operations and business process outsourcing.
Paul Smith, Chairman of Harvey Nash Outsourcing, says Mocap Vietnam’s access to the Japanese market will enable the partnership to win new contracts and significantly grow the Vietnam-based businesses. Harvey Nash who have over 44 offices worldwide will introduce international clients and provide software and technology services.
“Together, we deliver exceptional service and value for money to clients who outsource business processes and software services. Our global presence coupled with Vietnam’s highly skilled workforce gives us the ability to exceed client expectations both in Vietnam and throughout our international markets,” Smith says.
Active in Vietnam for 12 years, Harvey Nash has 4,500 IT professionals in Vietnam.
Firms demand safety net
Firms want bigger government support to help them survive persistent economic woes.
The latest Ho Chi Minh City Business Association survey on 800 city-based businesses showed that 92 per cent of firms wanted government tax break policies, 81 per cent said current high corporate income tax rate and exorbitantly high fees and charges have undermined their competitiveness and 68 per cent voiced dissatisfaction upon inconsistent legal system.
“Survey outcomes have upset me,” said the association deputy chairman Pham Ngoc Hung.
Nam Thai Son Import Export director Tran Viet Anh said many firms in the plastics industry have inked export contracts until June 2013, mainly with partners coming from Southeast Asia, but they were starved of capital. So that, many of them had yet to buy sufficient materials to handle these contracts.
“No businesses dare to take on bank loans with high lending rates. Preferential credit policy to export firms has proven crucial to better current situation,” said Anh.
General director of well-known processed food producer Vissan Van Duc Muoi assumed a suitable supportive mechanism was needed to help firms get out of the woods.
“Resolution 02/NQ-CP tackling difficulties in production-business, support market and clear bad debts has yet to be brought into life,” said Muoi, adding that the tolerance of small businesses abated after a long period sustaining hardships and many would incur temporary cessations of operation.
City-based Binh Chanh District Business Association figures show that of its more than 100 corporate members, only 60 firms kept operating, mostly in garment and handicraft production.
At the city’s diverse workshops and meetings, leading industry experts had spoken out wide-ranging measures to help firm unclog difficulties.
“Most urgent now is the government and the city authorities temporarily delaying enactment of new sorts of fees and tax firms and people due to be paid and not requiring firms to pay value added tax to their unsold stock, paving the way for them to reduce prices for recouping capital and reinvesting into production,” according to the Ho Chi Minh City Business Association.
Local footwear steps to EU
The European Commission’s recent decision on extending Vietnam’s eligibility under its Generalised System of Preferences (GSP) is expected to propel local footwear exports to the EU.
The EC’s Decision No.1213/2012 removed eight countries’ exports from the list of GSP beneficiaries. Accordingly, Vietnamese products, primarily footwear, were not affected.
The newly-adjusted tariff scheme, which supplements the previous EC Decision No.978/2012, will come into force from January 1, 2014 to December 31, 2016.
Under the new GSP scheme, the removal from the GSP list applies when the total export volumes to EU market of export countries’ products exceeds 17.5 per cent of total import volumes of the same products from all countries benefiting from the EU’s GSP system in three years.
In the past, the EU market grabbed up to 70 per cent of Vietnam’s total footwear exports.
However, this proportion has slid gradually since Vietnamese footwear export items incurred anti-dumping tax and Vietnam did not enjoy EU’s GSP scheme from 2009 until present.
Tran Quang Huy, head of External Relations Department at wholly Taiwan-backed Ngoc Te Footwear Company based in northern Hung Yen province, said exports to the EU market accounted for around 60 per cent of the company’s total export value.
“The move is a good news to our company particularly and all Vietnam-based footwear exporters generally,” said Huy.
“In light of the GSP scheme, current export tariffs to EU of most Vietnam’s footwear export items like canvas shoes, leather upper shoes and leatherette shoes would remarkably go down. For instance, import tariffs on canvas shoes will slide to nearly 12 per cent from current 17 per cent,” said Lefaso deputy secretary Nguyen Thi Tong.
Tong, however, said while the GSP preference was an advantage to footwear exporters, firms needed to pay due attention to the ‘threshold’ to be benefited from the GSP system (the 17.5 per cent benchmark) to avert risks.
“Lefaso does not encourage firms to abruptly hike exports to the EU market since it would bring risks associated with anti-dumping lawsuits or trade protectionism measures,” Tong said.
Lefaso figures show that Vietnam earned $2.7 billion from footwear export to EU market in 2012, tantamount to 30 per cent of the footwear industry’s total export value of $7.26 billion.
TPG picks Vietnam for landmark move conference Outside of US
In a striking move, one of the largest private equity firms in the US with asset under management of approximately $54.5 billion, will organise its limited partners (LP) conference in Hanoi this week.
This is the first time an LP conference of Texas Pacific Group (TPG) is being held outside of the US. The event, which will take place during March 19-21 at Sofitel Metropole, marks the heightened interest of private equity money in Vietnam.
Vietnam has one of the youngest demographic profiles in Asia. As of 2012, 25 per cent of Vietnam’s 90 million citizens were under 15 years old with a median age at 28. The strong domestic consumption growth potential is making the country an attractive destination for private equity players.
The majority of the LPs in attendance this year have not visited the country prior to this event. This will be an opportunity for them to explore the business opportunity and experience firsthand Vietnam’s dynamic country.
According to a source, the 30-50 funds attending the event have total assets of up to $1 trillion. Foreign capital is critical to the country’s long-term growth prospects and this event is a great opportunity to showcase Vietnam.
TPG is no stranger to Vietnam having invested $36.5 million in technology corporation FPT in 2006 and subsequently invested $35 million in Masan Group Corporation (MSN) in 2009. Both FPT and MSN are listed in the Ho Chi Minh City Stock Exchange.
TPG has since exited its investment in FPT, but is still an investor in MSN. MSN has been one of the strongest performing companies in its global growth fund and according to sources a reason why the LP conference is being hosted in Vietnam.
Hosting the event in Vietnam is also a better representation of the growth fund operations as more than half of its portfolio is invested in emerging markets.
TPG was founded in 1992 by two veteran investors David Bonderman, who will be a participant in the LP conference, and James Coulter. Today, TPG belongs to an elite group of largest private equity firms in the US with five member funds, led by the flagship fund TPG Capital – specialising in investing in well-established companies with investment size ranging from $10 million to $1 billion. As of today, TPG Capital has put $31.1 billion to work all around the world including the US, EU, Asia, Australia and Latin America. The second fund is TPG Growth – specialising in investing in companies during their growth phase globally – this fund invested in FPT and Masan. The third fund is TPG Biotech – a venture capital fund with a focus on healthcare investments. The forth fund is TPG Opportunities Partners – mandated to focus on special situation investments. Finally, TPG Speciality Lending is a fund that specialises in loan investments.
The conference is an opportunity for its LP to reassess their investment portfolio and performance of their investments during the year.
This year conference is hence an occasion for TPG LPs to discuss about sectors and deals for next year as well as the ongoing critical macro issues globally. Vietnam and other emerging markets will be the focus of the two-day conference. This conference is a validation of Vietnam’s market potential.
FTA to help Vietnam penetrate the EU market
The removal of import tariffs within the framework of the free trade agreement (FTA) with the EU will create better opportunities for Vietnam than for its rivals in the EU market, according to chief of the consultants group of the EU Multilateral Trade Assistance Project, Claudio Dordi.
He said Vietnam’s exports will increasingly enjoy lower taxes on technology and high-quality materials from the EU while the EU will help Vietnamese businesses improve their competitiveness in the long run.
At present, Vietnam exports five staples including footwear, garments and textiles, coffee, seafood and wooden furniture to the EU. The current tariff rate on Vietnam’s goods hover around 4.1 percent, but garments, seafood, and footwear have to pay tariffs of up to 11.7 percent, 10.8 percent and 12.4 percent respectively.
The EU which has 27 members with a total population of 500 million, the EU is the largest importer of garments and textiles in the world, making up half of the world’s import volume. The bloc’s garment and textile imports are expected to hit US$234.2 billion in 2013 including US$2.37 billion worth of products from Vietnam.
Under the FTA, tariffs on garments and textiles will be slashed from 11.7 percent to zero percent, therefore facilitating the sector’s growth.
Domestic garment and textile businesses have asked the Government to pay attention to the principles of origin and the time period for two-way tariff cut during the negotiation process.
Regarding the fisheries sector, Secretary General of the Vietnam Association of Seafood Exporter and Producers (VASEP) Truong Dinh Hoe said that the FTA should help the sector abide by sanitary and phytosanitary (SPS) measures and market access.
The EU is an important market for Vietnam, he said, adding that the removal of tariffs on the majority of export items will create favourable conditions for Vietnam to compete against its rivals.
According to Vo Tan Thanh, Director of the Ho Chi Minh City Chapter of the Vietnam Chamber of Commerce and Industry, the agreement will help improve the business environment and facilitate direct investments in Vietnam from the EU and other nations.
Bui Huy Son, Head of the Ministry of Trade’s Asia-Pacific Market Department, who is also Director of the EU-MUTRAP project, said the EU is Vietnam’s leading partner in economics, trade and investment.
The FTA is entering the third round of negotiation and the process is scheduled for completion in 2014.
He emphasized the urgent need for businesses to contribute their opinions to the FTA negotiations as it is not only in their interest, but also necessary to the negotiations.
Last year, the General Statistics Office said the EU became Vietnam’s largest importer with revenues of US$20.3 billion, representing 17.7 percent of the nation’s total export turnover.
The EU purchases 7.7 percent of Vietnam-made products. Vietnam’s trade surplus is estimated at US$11.5 billion with the EU and US$14.9 billion with the US.
Increased cooperation with foreign firms
A Vietnam-South Africa Trade Exchange was jointly held by the Vietnam Chamber of Commerce and Industry (VCCI) and the South African Embassy in Ho Chi Minh City on March 21.
The event involved South African companies that specialise in foodstuff, steel processing and training services seeking partners in Vietnam.
The same day, a workshop was arranged by the US Chamber of Commerce in Vietnam to raise investment and business opportunities between Vietnam and the Island of Guam’s enterprises.
The French Chamber of Commerce and Industry in Vietnam announced that a France-Vietnam Business Forum will be held from April 7–9 with the participation over 100 French companies operating in the fields of infrastructure, food industry and consumer goods.
Vietnam sees investment prospects in Cambodia
Vietnamese businesses have bright prospects for investing in Cambodia in 2013 and the years to come.
Vietnamese business representatives shared this view at an annual meeting hosted by the Vietnamese Embassy in Phnom Penh on March 21.
The participants said that Vietnamese businesses should make greater efforts to improve their position amongst foreign investors in Cambodia.
Pham Phuong Dung, director of a successful business operating in Cambodia, said that the most important thing for Vietnamese businesses is to learn more about the market as well as the advantages and disadvantages when investing in Cambodia.
Last year’s two-way trade turnover between Vietnam and Cambodia increased by 17 percent to US$3.3 billion. However, Vietnam ranked sixth among foreign investors in Cambodia by the end of 2012, with a total capitalization of over US$1.2 billion.
In 2012, investment capital from Vietnamese businesses in Cambodia climbed to nearly US$86 million, with a focus on sectors such as agriculture, finance and banking.
Vietnam likely to provide huge volume of aquatic products
Vietnam has great potential to deliver large volumes of high quality seafood products to foreign markets.
The statement was made by delegates at a seminar in Hanoi on March 21 to discuss ways to improve the capacity of Vietnam’s seafood sector by meeting international requirements and remove hurdles to develop value-adding supply chains.
They also agreed that Vietnamese producers are in a good position to deliver products with a strong commitment to quality and food safety, as well as environmental responsibility.
Over recent years, the seafood industry has become one of Vietnam’s premier economic sectors, with consistent high growth rates. In 2012, Vietnam’s seafood products were available in 156 markets with a total export value of US$6.1 billion.
However, the sector has made great efforts to overcome difficulties in international markets due to the global economic downturn.
The Ministry of Agriculture and Rural Development’s Agro-Forestry-Fisheries Quality Assurance Department Director Nguyen Nhu Tiep affirmed that it has become more and more difficult to meet the international demand for aquatic products.
Vietnamese businesses need to implement procedures to meet international standards, especially requirements on food safety and hygiene.
Science, technology creations honoured
Forty-one projects winning the Scientific and Technological Innovation Award of the Vietnam Fund for Supporting Technological Creations (VIFOTEC) were honoured at a ceremony in Hanoi on March 23.
The projects cover various areas, including mechanical automation, material technology, information technology, electronics, telecommunication, biology, and environmental protection and energy-saving technologies.
Speaking at the ceremony, Dinh The Huynh, Politburo member and Head of the Party Central Committee’s Commission for Popularisation and Education, extended his congratulations to the winners.
Hunh, who is also Secretary of the Party Central Committee, asked ministries, departments, agencies and branches to encourage scientists to contribute creations that are relevant and in demand in both regional and international markets.
On behalf of the Party, State and Government, Deputy Prime Minister Vu Van Ninh presented the second class Independence Order to VIFOTEC for its outstanding achievements and contributions to national construction and defence.
Since its establishment 20 years ago, VIFOTEC has granted awards to nearly 600 projects, and tens of thousands of scientists, creators and businesses. Most of the projects are now used in daily life and production, yielding high socio-economic results.-
Flood-proof homes big hit in Phu Yen
A pilot project to build 100 flood-proof residential complexes for the poor has proved to be effective in the central province of Phu Yen.
Phu Yen is one of the seven provinces in the coastal central region to have been selected for the pilot model, with complexes now under construction following a 2012 Government directive.
Each complex includes two floors, with the second floors covering an area of no less than 10 square metres. This floor is designated for storing people’s essential property during flooding.
Financial support for the project has come from the Government, local authorities and residents who have been able to borrow money with low interest from the Vietnam Bank for Social Policies.
Vo Thi Bach Tuyet, 70, from Phu Yen’s An Dinh commune said, “Thanks to financial aid, I now own a block in the residential complex.”
Another resident, 88 year-old Nguyen Thi Que, said: “Previously our family had to stay with relatives when floods came. Now we can stay safely where we are.”
The vice chairman of the provincial People’s Committee, Tran Quang Nhat, said that the initiative had received an overwhelmingly positive response from local people.
Phan Van Bay, head of An Dinh’s Dinh Trung village, said that in the past it was difficult for people to evacuate before floods hit. “That is no longer a problem,” he proclaimed.
A huge flood in 2009 inundated all 126 houses in the village at depths of up to three metres, he said.
The province has planned to replicate the model in other areas, as there are more than 17,000 households living in flood-prone areas.
Improving development capacity of fishery sector
Domestic and foreign experts and businesses in the fishery sector participated in a seminar in Hanoi on March 21 to seek measures to improve the sector’s development capacity.
They focused on challenges experienced in observing trade standards.
The seminar was jointly held by the National Agro-Forestry-Fishery Quality Assurance Department, the UN Industrial Development Organisation and the Japan Trade Promotion Organisation.
Delegates agreed that Vietnam has the ability to provide a stable supply of premium seafood products in line with the Government and businesses’ commitments on food safety and environmental responsibility.
However, the sector has had to overcome domestic difficulties, as well as barriers into the global market.
Over the past year, the fishery sector has become one of Vietnam’s key economic industries.
In 2012, the country’s seafood could be found in 156 markets, with total export turnover of $6.1 billion.
Vietnam is one of three countries with a stable labour force, and has bilateral cooperation agreements with many other countries in this sector.
France-Vietnam Business Forum to be launched
A business forum to be joined by French and Vietnamese businesses, France-Vietnam Business Forum 2013, will be launched over April 7-11 in Rex Hotel in Ho Chi Minh City.
The event, which will kick-start some 40 economic activities during 2013, is the highlight of a series of activities held to celebrate the 2013-2014 Vietnam-France Year, said Fabrice Mauries, Consul-General of the Republic of France in HCMC.
There will be 126 French businesses in many areas, including high-tech, food processing, software, construction, cosmetics, healthcare and fast-moving consumer goods coming to Vietnam to attend the event and meet with more than 500 Vietnamese companies to explore investment opportunities.
This is the largest French business delegation to Vietnam for years. In addition to HCMC, there will be thousands of meetings between businesses of the two countries during the event in Hanoi and other provinces, said Marc Cagnard, director of French trade promotion office in Vietnam (UBIFRANCE Vietnam).
The event is an emphasis of France’s redirection in economic policies towards Asia and Vietnam as the new markets for French products.
There are some 300 French businesses investing in Vietnam, of which 85 are operating in high-tech sectors.
France is the second biggest European investor in Vietnam after the Netherlands with over $3 billion disbursed in the country by the end of 2012, followed by the UK and Germany with $2 billion and $1.5 billion, respectively.
Regarding the future trend in French investment in Vietnam’s public sector, France is the second largest financier for public works, mostly infrastructures and education in Vietnam, after Japan, said Pierre-Jean Malgouyres, president of the French Chamber of Commerce and Industry in Vietnam (CCIFV).
The 2013-2014 Vietnam-France Year will officially begin in Hanoi in April to mark the 40th anniversary of bilateral diplomatic ties between the two nations.
The France Year in Vietnam 2013, which is expected to see the participation of French Minister of Foreign Trade Nicole Bricq, will include a series of events relating to culture, economy, science and education.
Import tax on used cars to rise by 20 per cent
Starting from April 28, import taxes on used cars of nine seats or less, with a cylinder capacity of less than 1,500cc, will increase by 20 per cent compared to the exiting rate.
According to a new decree issued by the Ministry of Finance, the import tax imposed on used cars with a cylinder, capacity of less than 1,000cc will be $4,200 a unit instead of $3,500 currently.
The tax is $9,600 for each used car with a cylinder capacity of 1,000-1,500cc, up $1,600 from the current level.
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR