Wed. May 22nd, 2024

Inventory index posts increase

According to the General Statistics Office, the inventory index by February 1 this year rose by 19.9 percent compared to the same period last year.

Of which, motor vehicle manufacturing soared by 142.5 percent; electric wire inventory surged 64.1 percent; metallic building components manufacturing rose 62 percent; communications equipment manufacturing climbed 60.1 percent; fertilizers and nitrogen compound inventory increased 58.1 percent; and beer inventory mounted 49.4 percent.

Meanwhile, among some industries which just saw a slight rise or even a decrease in inventory index, manufacturing of concrete, and cement products ticked up 17.3 percent; milk and dairy products inched up 13.5 percent; manufacturing of made-from-clay building materials added up 2.5 percent; battery and accumulator manufacturing declined 38.6 percent; and electronic spare parts dropped 62.9 percent.

Vietnam signs contracts to export 2.9 million tons of rice

The Vietnam Food Association announced on February 27 that up to now, firms have signed contracts to export 2.9 million tons of rice, an increase of more than 99 percent over the same period last year.

According to the plan, firms will deliver 1.3 million tons of rice in the first quarter of this year and 2.2 million tons of rice in the second quarter. Rice exports in the first six months of this year were expected to reach 3.5 million tons in total.

Rice production of the winter-spring crop will be likely to touch 3.8 million tons, while rice inventory from previous year was around 780,000 tons.

The association said that after the instruction to stockpile 1 million tons of rice starting from February 20, firms now have bought 211,000 tons, accounting for more than 21 percent of the target.

Commodity rice price in the Mekong Delta provinces also climbed after the stockpiling purchase. Currently, fresh low-quality paddy rice IR50404 was bought at around VND4,400 per kilo; fresh long-grain rice was purchased at VND4,700-4,800 per kilo.

Wood product exports hoped to grow further in US

Exports of wood products destined for the US are expected to continue growing this year.

The US market’s orders of wood and forest products in the first two months this year were estimated to total nearly 1.7 billion USD, almost equal to last year’s total turnover, according to Vice President of the Vietnam Timber and Forest Product Association Nguyen Ton Quyen.

Meanwhile, the Handicraft and Wood Industry Association of Ho Chi Minh City forecast that wood product exports to the US would surge by 18 percent, while those to the EU market would rise by 8-10 percent. Those to China would go up 15 percent and goods shipped to Japan would increase by 11-12 percent.

Director of the Forest management Department under the Ministry of Agriculture and Rural Development Nguyen Huu Dung, however, said that import markets would become stricter about the legality of raw materials, urging enterprises to move to meet the requirements of relevant international trade policies such as the US Lacey Act and the EU’s FLEGT.

State Bank seeks to curb cash transactions

The State Bank of Vietnam (SBV) seeks to limit the use or cash for large transactions like the purchase of motorbikes, cars and property by preparing a draft decree on the issue.

Intended to replace the 2006 decree on cash payment, the new legislation will be submitted to the Government before this year, according to Director of the SBV’s Payment Department Bui Quang Tien.

The decree aims to weaken the black market economy by making commercial transactions more transparent.

Restricting cash payments is expected to help the country fight tax evasion, as well as counterfeit money production and money laundering.

For the first time, individuals will not be allowed to pay for securities, houses, land and large vehicles with cash.

Organisations will not be allowed to use cash for transactions relating to real estate, securities, aircraft, ships and cars, or for transactions exceeding the limit set by the central bank.

The draft decree is among several measures the SBV has proposed to speed up its project on non-cash payment, which aims to have 150,000 Point of Sales (POS) nationwide by 2015. Currently there are 94,000.

According to the SBV, by last September, the market had nearly 51 million bank cards including debit cards, credit cards and prepaid cards.

But after nearly 20 years, millions of Vietnam ’s ATM cards are still used to withdraw money at ATMs instead of performing non-cash transactions, said a representative of Vietnam Cards Association.

He attributed the lack of change to the fact that many supermarkets and shopping centres still preferred customers to pay in cash rather than bank card.

The draft asks other ministries and agencies including the Ministry of Finance, the Ministry of Industry and Trade, the Ministry of Construction, the Ministry of Natural Resources and Environment and the Ministry of Public Security to take responsibility for popularising the use of bank cards and other non-cash forms of payment.

US’s Amway to build new plant in Vietnam

The US-based Amway corporation will build its new plant in My Phuoc Industrial Zone in Vietnam ’s southern Binh Phuoc province this year.

The new plant will be Amway’s second in Vietnam after its first 12 million USD factory, built at Amata Industrial Zone, southern Dong Nai province, in 2007, according to the Amway Vietnam Co. Ltd.
The US company’s business in the Southeast Asian country grew by 35 percent per year over the past years.

Founded in 1959, Amway has grown into a multinational corporation which earned a global revenue of 11.3 billion USD in 2012.

Farm produce exports to become hard currency earner

Vietnam plans to obtain a year-on-year rise of 30 percent in farm and vegetable export value to 1 billion USD this year.

Secretary General of the Fruits and Vegetables Association (Vinafruit) Nguyen Van Ky said the figure is within reach as the rising global demand for farm produce is benefiting Vietnam ’s sector this year.

Vietnam has been listed as one of the world’s five biggest farm produce exporters, Ky added.

Meanwhile, Thailand, Vietnam’s biggest rival in farm produce export, has become the nation’s major importer, said Vinafruit, adding that the nation is focusing on the cultivation of orchids, a high value staple.

With diverse varieties, Vietnam’s high-quality special fruits and vegetables have penetrated not only Thailand but also other markets, like the US, Japan, Australia and New Zealand.

In 2013, Vinafruit said its affiliates will increase their exports to China by closely cooperating with the latter’s importers and distributors and to top 10 importers of their farm produce, including Italy, Russia, the Republic of Korea, the Netherlands, Germany and Canada, despite their strict requirements on food hygienic safety.

The country’s main export items are fresh fruit like dragon fruit, watermelon, litchi, longan and mango; fresh vegetables like mushrooms, potatoes, carrots and spice herbs; and canned vegetables.

In order to ensure exports, the sector plans to raise an annual vegetable and fruit output from 200,000-300,000 tonnes from 2011-2015 to 400,000 tonnes per year in the next five years and an annual fruit output from 500,000 tonnes from 2011-2015 to 800,000 tonnes in the next five years.

To obtain the target, the sector will put ineffective rice production areas in the Red River , central highlands, southeastern region and the Mekong Delta into those for high-value fruits and vegetables.

In addition, it will apply up-to-date science and technology, set up conglomerates providing varieties and technical measures to create breakthroughs into production.

Local tourists up, foreign arrivals down

International arrivals to Vietnam are estimated at just above 570,000 in February, a year-on-year decrease of 18.3 percent.

Figures from the Vietnam National Administration of Tourism and the General Statistics Office show that in the first two months of 2013, the country welcomed over 1.2 million foreign tourists, down 9.6 percent from the same period last year.

Sharp declines were seen in the markets of Germany (69 percent), followed by Hong Kong (55 percent), Laos (39.1 percent) and Denmark (35.9 percent).

Meanwhile, domestic tourism saw healthy growth in the first two months, with 7.8 million visitors, up 11.4 percent year-on-year, and revenues of 35 trillion VND, up 7.9 percent. The increase was attributable to the nine-day Lunar New Year festival.

In 2012, the sector served 6.85 million international visitors and 32.5 million domestic tourists, earning 160 trillion VND (7.6 billion USD).

Recently, the Prime Minister has approved a master development plan for the tourism sector to 2020 with a vision to 2030.

Accordingly, the sector’s overall target to 2020 is to make the tourism industry a key economic sector with high professionalism and modern and synchronous infrastructure.

The country is set to attract 7 – 7.5 million international tourists and serving 36 – 37 million domestic ones by 2015.-

Vietnam ranks fifth in shrimp exports to the US

In 2012, Vietnam was the fifth largest shrimp exporter to the US with 40,897 tonnes, a decrease of 9.48 percent from 2011, according to figures recently announced by the US National Marine Fisheries Service.

US shrimp imports in 2012 saw reduction both volume and in value compared to 2011. The country imported 533,498 tonnes of shrimp in the year, valued at USD4.5 billion, down 7.3 percent in volume and 13.5 percent in value.

Thailand continued to lead shrimp exporters to the market with a volume of 135,557 tonnes, down 26.7 percent from 184,968 tonnes of 2011. Following it was Ecuador at 81,407 tonnes (up 9.49 percent), Indonesia at 74,077 tonnes (up 5.05 percent), and India at 65,595 tonnes (up 26.7 percent).

2013’s total tuna export value forecast at over USD580 million

Total volume of exported tuna in 2013 is forecast to post more than USD580 million, up about 2.3 percent from 2012, said the Vietnam Association of Seafood Exporters and Processors (VASEP). Specifically, tuna exports to the Asian and Middle Eastern markets are expected to rise.

Also according to VASEP, in the first quarter of 2013, tuna exports will continue to grow, with a forecast export value of USD130 million, up 1.7 percent from the same period last year and down 0.8 percent from the fourth quarter of 2012.

In 2012, the volume of tuna exploited domestically rose, while the country’s tuna exports also surged dramatically. In addition, the volume of tuna harvested in some countries decreasing along with rising consumption demand in some import markets contributes to offering opportunities for Vietnam to accelerate its tuna exports in 2013.

HCM City works for more Danish investors’ arrival

The Chairman of People’s Committee of HCM City, Le Hoang Quan, has pledged to create every possible condition to facilitate the Green House cooperative project between Vietnam and Denmark.
HCM City People’s Committee Chairman Le Hoang Quan (left) receives Denmark Minister of Foreign Affairs Villy Sovndal – photo VNA

He made the pledge during his meeting with Denmark ’s Minister of Foreign Affairs Villy Sovndal in HCM City on February 27.

Quan took the occasion to thank the Danish people for their positive support given to Vietnam’s past struggle for national liberation as well as its current construction and development course.

Danish investors have so far invested in 35 projects with a total investment capital of 185 million USD in HCM City . However, there are a lot of potential for Danish and Vietnamese businesses’ trade partnerships in the city, Quan said.

At the meeting, the visiting Danish Minister highly spoke of the city’s development in recent years.

He said most Danish investors have appreciated the business environment in Vietnam, especially in HCM City, sending a good signal to bilateral relationship promotion between two countries.

The Minister said that there are about 130 Danish companies, businesses and offices operating in Vietnam .

Recently, the exchange of high-level delegations between two countries has boosted bilateral cooperation to a higher level, expanding from the politics, economics and culture to other fields, said Villy Sovndal.

In the coming time, the two countries can broaden their cooperation further beyond the traditional field of green growth to industry and seafood.

Report foresees a promising year for insurers
Insurers in the Asia-Pacific region, including Viet Nam, will have growth opportunities this year as the customer base and geographic diversity will continue to expand, according to a new report from Ernst Young.

The report, Asia-Pacific Insurance Outlook 2013, predicts that wealth management and personal insurance, as well as products and services, will all be growth areas in the region.

With such growth, insurers will be in a position to help customers meet complex financial planning needs despite the economic slowdown and evolving regulatory changes in the region.

“Growing wealth from the burgeoning middle class represents a major source of premiums and profit potential,” said Paul Clark, head of the Asia-Pacific region at Ernst Young.

“This is complicated by the diversity of mature, developing and emerging insurance markets across the region,” he added.

“Balancing risk against prudential regulation focused on improving consumer protection and increasing product transparency will be a prime consideration for insurance in 2013.”

In its report, the company also identified five factors that would influence insurers’ strategies in the region this year.

They include clarity on the best growth opportunities, including new emerging areas such as health and pensions; implications of a rapidly changing regulatory environment; and management of the evolving regional-catastrophe risk.

Investing in technology to enable growth and improve operations and risk management, as well as the need to identify innovative new services that address mobile technology, will also affect the market.

Ernst Young said 2013 would be a year of decisions for insurers in the region.

Industrial production up 6.8% in early 2013

The Industrial Production Index (IPI) saw a year-on-year increase of 6.8 per cent in the first two months of this year, according to the General Statistics Office (GSO).

Of which, the index of the mining industry increased 1.8 per cent over the same period last year, that of the processing and manufacturing, 7.9 per cent, electricity production and distribution, 11.7 per cent, and water supply and sewage treatment, 9.9 per cent.

The production of several industries saw notable increases includes battery production (107.1 per cent), electrical equipment (51.3 per cent), machine spare parts (45.9 per cent), fertiliser and nitrogen compound (43.3 per cent), footwear (35.9 per cent), and telecom equipment (26.4 per cent).

Meanwhile, as of February 1, 2013, inventory level picked up 19.9 per cent against the same period last year. Car engine production suffered an inventory of 142.5 per cent; electric cable production 64.1 per cent; telecom equipments 60.1 per cent; fertilisers 58.1 per cent; and beverage production 49.4 per cent.

In contrast, inventory levels dropped in battery production by 38.6 per cent and electronic spare parts 62.9 percent.

The index surged by 3.2 percent in HCM City, Dong Nai 7.6 percent, Binh Duong 3.7 percent, Ha Noi 4.5 percent, Hai Phong 2.9 percent and Bac Ninh 10.2 percent.

HSBC introduces new service

HSBC Viet Nam has announced the launch of a new wealth management product that will safeguard customers’ savings while maximising potential benefits.

In doing so, HSBC has become the first bank in Viet Nam to introduce Structured Deposits of this kind.

Essentially, Structured Deposits are part investments that provide customers with the opportunity to earn a higher return than those offered by conventional fixed deposits, normally depending on movement on the foreign currency exchange rate.

For now, HSBC Viet Nam will introduce only basic Structured Deposit products tp Vietnamese customers.

Fair promotes made-in-VN products

The first fair of the year under the programme to bring Vietnamese goods to rural areas will be held in Ca Mau Province’s Nam Can District from March 1-3.

Around 40 companies will take part in the fair, displaying food, confectionery, textiles, household utensils, cosmetics, stationery and other products.

The fair will also facilitate the donation of gifts to poor people and needy students, training in sales skills for small traders in traditional markets and provide agricultural extension services to farmers.

Organisers of the fair, the Business Study and Assistance Centre and the Nam Can District People’s Committee, will also join hands with participating enterprises to conduct a local market survey.

Organisers said results of the survey will help enterprises better understand the district’s distribution system to take full advantage of the local market potential.

VISA inks deal with student body

Global payment technology company VISA and the Central Committee of Viet Nam Students’ Association (CCVSA) have entered into a three-year partnership to deliver financial education to university students in Viet Nam.

The agreement is the focal point of a Memorandum of Understanding (MoU) signed on Wednesday between Vice President of CCVSA Le Hoang Anh, and Lorijon Bacchi, VISA country manager for Viet Nam, Cambodia and Laos.

The initial phase of the VISA and CCVSA partnership will see the launch of a financial literacy forum series and contest across eight participating universities. In addition, an online resource focused on financial education will also be available so that students can access free educational materials, including personal finance articles and videos, as well as money management tips.

According to Bacchi, through this strategic partnership with CCVSA, VISA hopes to continue improving levels of financial awareness and contribute to the growth of Viet Nam’s future generations.

Retail gas prices drop

The retail gas price for a 12kg canister in HCM City has dropped by VND4,000 (US$0.2), Sai Gon Petro Gas told the online VnEconomy.

The gas distributor is now retailing its 12kg canisters at VND405,000 ($19.47) each.

The slump came after the world gas price decreased by $15 to $895 a tonne over the past month.

Petrolimex Gas Ha Noi expected to reflect the decline in its prices too.

From the beginning of the year, the retail gas price has continuously decreased, falling a total of VND11,000 ($0.53) per 12kg canister.-

PetroVietnam construction arms crumble in crisis

Several unwanted records were bestowed onto four PetroVietnam construction companies as a result of last year’s poor performance in the stock market, including worst losses, lowest share price and highest debt to equity ratio.

The companies in question were PetroVietnam Construction (PVX), Petroleum Saigon Construction And Investment (PSG), PetroVietnam – Nghe An Construction (PVA) and Mien Trung Petroleum Construction (PXM).

Shares in the oil and gas industry are typically assumed to be gold mines for both companies and investors. However, last year’s economic crisis hit this sector almost as hard as the property industry.

Among PetroVietnam’s listed construction arms, PVX is the largest in terms of capital and is also the parent company of the other three businesses. As a result, excluding banks and financial institutions, PVX carried the largest 2012 loss in the stock market, a staggering VND1.22 trillion (US$58 million).

Meanwhile, PSG topped the list last month, losing VND250 billion ($11.9 million).

The two other firms both reported losses of over VND100 billion ($4.7 million) in 2012.

Each company had its own reasons for the failures, such as high provisioning or increasing costs, but generally the deadlock in the construction sector was the key factor affecting business.

Another common issue was high debt to equity ratios. Use of financial leverage can often help businesses take advantage of their capital, boosting both revenue and profits. However, as the crisis hit, debt burdens became increasingly vulnerable, leading to large losses .

In PSG, last year’s accumulated loss ate almost all of its capital, leaving only VND16 billion ($761,900) in equity, causing the debt to equity ratio ballon to 63:1.

With unsecured business operations and financial indicators, PSG was among the top 10 lowest share prices at just VND1,200 (5.7 US cents). Inthe past six months, the price has never exceeded VND2,000.

PVA and PXM closed yesterday’s session priced at VND5,600 and VND2,400 per share respectively.

As the largest firm in terms of scale, PVX shares remained slightly more expensive at VND6,000 (28.5 US cents) yesterday.

Foreign investment rises by 5%

Disbursements of foreign direct investment in the first two months of the year increased 5 per cent over the same period last year to US$1.05 billion, according to the Foreign Investment Agency (FIA).

However, the agency reported, registered capital in the period dropped nearly 62 per cent against the same period last year to $630.3 million. Of the total, 99 new projects accounted for $532 million, down 54 per cent year-on-year, while additional capital in 31 existing projects fell more than 80 per cent to $98 million.

The agency attributed the sharp drop in registered capital to the fact that a number of major projects were licensed last year, such as the $574 million Bridgestone project, the $180 million Oshima Shipbuilding endeavor and the $150 million Lock Lock Living initiative. In contrast, this year the largest project licensed (to Terumo Corporation) totalled only $98 million.

Registered capital mainly went into the processing and manufacturing industries. These industries accounted for about 64.9 per cent of the country’s total registered capital, with a total registered capital of $408.9 million invested in 44 projects.

The health care sector was also attractive to foreign investors, drawing $80 million or 12.7 per cent of the country’s total registered capital.

Among 17 cities and provinces that attracted foreign investment in the first two months, the southern province of Dong Nai topped the list with registered capital of $214.35 million, followed by the southern province of Binh Duong with $134.9 million and the northern city of Hai Phong with $118 million.

Japan was the leading source of foreign investment in the first two months, responsible for registered capital of $258 million, followed by Taiwan with $81.4 million and Singapore with $56 million.

FDI firms gained a trade surplus of $2.96 billion. Their export turnover surged more than 27 per cent to $12.2 billion, while their import value also increased 13 per cent to $9.24 billion.

Viet Nam’s registered FDI capital last year reached $13 billion, of which $9.1 billion was registered in the processing and manufacturing industries.

The country also expected to attract $13-14 billion in FDI this year, but experts have warned that the race to attract FDI is becoming increasingly competitive. Japan has poured billions of dollars into Myanmar, an opening market attracting considerable global attention. Japan also has more than 7,000 businesses operating in Thailand, much higher than the 1,500 registered in Viet Nam.

Besides tax incentives, the country should also offer other financial and non-financial incentives to woo large foreign investors, such as low interest rates, credit insurance and low infrastructure and service fees, said Chairman of the Viet Nam Association of Foreign Invested Enterprises Nguyen Mai.

Out of 500 trans-national corporations worldwide, about 100 have a presence in Viet Nam. Small- and medium-sized foreign firms were interested mainly in tax incentives; in contrast, major foreign investors with long-term business strategies valued other incentives, Mai said.

IBM launches its mobile first portfolio for Vietnamese market
The IBM Corporation recently introduced Mobile First, a mobile portfolio that supports security, analytics and application development for enterprises based on cloud computing, in the Vietnamese market.

Using Mobile First, businesses can streamline everything from the management of employees’ mobile devices to the creation of a new mobile commerce application to suit their entire business.

“In terms of mobile technology, we mostly focus on smartphones, systems, games and new applications. This means that enterprises have not developed their mobile businesses to their full potential,” said Nguyen Ba Quynh, country manager of the software group at IBM Viet Nam. “The Internet has changed our way of using banking, hotel and medical services. So can mobile phone technology. The portfolio is designed to bring enterprises’ mobile strategies into reality.”

IBM has so far helped nearly 1,000 enterprises to improve their mobile presence, including Air Canada and American National Insurance.

Citizens rush to sell gold for fear of price drops

Investors and citizens rushed to sell gold on Wednesday as the price went down after the central bank had announced to intervene in the market.

Saigon Jewelry Holding Co. (SJC) recorded a trade volume of more than 1,000 taels on Wednesday morning alone. Citizens, gold investors and even banks raced to sell gold, said a staff member of SJC.

Gold price fell so sharply and rapidly that an investor said he had to sell at a loss for fear of further price drops. He said he would wait for some time before rejoining the market, describing buying gold at present as “catching a falling knife”.

SJC deputy sales manager Nguyen Cong Tuong said trade slowed down in the afternoon as investors became more prudent. However, those possessing small volumes of less than ten taels continued to sell their gold.

Gold price declined VND1 million per tael against the closing price on the preceding day. SJC quoted the buying price at VND43.4 million and selling price at VND43.7 million a tael, down nearly VND1.2 million compared to the levels at the beginning of the day.

Domestic gold price fluctuated widely on Wednesday, with the lowest levels being VND43.15 million per tael for buying and VND43.5 million for selling. A tael equals 1.2 troy ounces.

The local and global gold prices moved inversely. In the New York market, gold price rose by US$21 to US$1,614 per ounce. At 4:30 p.m., the price slightly fell to US$1,609 an ounce.

The sudden local gold price plunge narrowed down the gap between local and global prices to VND3 million per tael, versus VND5.2 million a couple of days ago.

The fact that SBV will intervene in the market to stabilize gold prices significantly weakens gold buying energy, though not until late this week will pilot bidding for gold bars between the central bank as sellers and commercial banks as buyers begin.

A senior source from SBV said the supply for the market during the pilot period would not necessarily be imported gold, but the central bank would use foreign exchange reserve to stabilize the market. The source did not reveal the gold volume to be supplied for the market.  

Nguyen Hoang Minh, deputy director of SBV’s branch in HCMC, said DongA Bank and Techcombank were carrying out temporary export of non-SJC gold bars for re-import of solid gold. The imported gold may be processed into SJC gold bars and launched into the market today.

* Saigon Jewelry Holding Co. (SJC) will produce gold bars bearing SJC brands from materials supplied by SBV, according to a contract signed between the two sides in Hanoi on Tuesday.

A working group of the central bank will be in charge of supervising SJC gold bar processing at SJC while the gold maker will have to take responsibility for quantity, quality and specification of gold bar products.

SBV’s deputy governor Le Minh Hung at the signing ceremony said that the agreement is the foundation for the central bank to actively produce gold bars to regulate the market in a timely manner.

SBV expects gold bar production at SJC will ensure necessary conditions for it to intervene in the market, Hung said.

According to Hung, SBV in the near future will issue a regulation on gold delivery and receipt and another on supervising SJC gold bar processing from gold materials provided by SBV. As such, gold bar processing will be strictly supervised by the working group from SBV.

SBV has submitted to the Government a draft decision to be issued by the Prime Minister on gold bar trading in the local market, Hung stated. The central bank is also working on its draft decisions in a bid to stabilize the gold market as soon as possible, he added.

Nguyen Quang Huy of the Foreign Exchange Department told the signing ceremony that the central bank will pilot gold bar trade via bidding in early March. The pilot bidding session will be attended by a number of banks and enterprises, he said.

Vietnam invests most in Laos

Laos is the top destination for Vietnamese entrepreneurs when investing abroad, heard a meeting between leaders and investors of the two nations held in Laos’ Attapeu Province this Monday.

In 2012 alone, up to 224 projects of Vietnam with total pledged capital of US$4 billion were granted investment certificates in Laos. Some 50 of those projects are located in the southern region, including Attapeu, Savannakhet, Sekong and Champasak provinces, with combined capital of US$2.2 billion, said the Ministry of Planning and Investment of Vietnam.

So far, realized capital of Vietnamese investors active in southern Laos has amounted to nearly US$600 million.

Attapeu is the key destination for Vietnamese investors, luring nearly 20 projects worth over US$800 million, accounting for some 36% of Vietnam’s total investment in southern Laos. The province has attracted important projects in industry, energy and hydropower.

The latest project put into operation is the sugar and sugarcane industrial complex Hoang Anh Attapeu developed by Hoanh Anh Gia Lai Group (HAGL), which was inaugurated this Monday in Laos. The complex consists of a sugarcane material zone of 12,000 hectares to provide feedstock for a sugar mill with a daily crushing capacity of 7,000 tons of sugarcane.

HAGL chairman Doan Nguyen Duc informed the group had grown more than 5,000 hectares of sugarcane in Attapeu and the rest would be grown by Laotian farmers.

In addition, HAGL has built a thermal power center with a capacity of 30MW connected to the national grid of Laos. The total investment in this complex is US$87.8 million, including US$68.7 million spent on the thermo-power plant and the sugar mill and US$19.1 million on the sugarcane material zone.

However, Tran Bac Ha, chairman of BIDV, said the link between Vietnamese investors remained weak, making it hard for them to assist one another.

Suggestions and recommendations of Vietnamese investors have been made and solved individually. There has not been a common corridor for Vietnamese businesses, he said at the meeting.

Moreover, many projects although having been licensed have yet to be implemented as committed to the government of Laos. Several large-scale projects are moving slowly due to financial distress, such as the hydropower project Xekaman 1 with a capacity of 322MW and the 80-MW hydropower project Xekaman 4.

Deputy Prime Minister Nguyen Xuan Phuc, chairman of the Vietnam-Laos Cooperation Sub-Committee, said at the gathering that Vietnamese investors should work with relevant agencies and representatives of Laos’ government to remove the obstacles.

After the meeting, Laos-Vietnam Insurance Joint Venture Company (LVI) signed three insurance policies with HAGL, covering the rubber latex processing factory, the sugar and sugarcane industrial complex and the 25,000-hectare rubber farm of HAGL in Laos.

As covered in the Daily on Tuesday, HAGL put into operation a latex processing plant in Attapeu Province on Monday. The Hoang Anh Attapeu rubber latex processing plant, costing US$9 million, has an annual designed processing capacity of 25,000 tons.

LVI was established in June 2008 by BIDV Insurance Company and Lao Bank for Foreign Trade. After four years of operation, the joint venture now has an average growth rate of 60% per year and a network of a headquarters and nine transaction offices in many major economic zones of Laos.

The company provides aviation insurance in Laos and insurance for many large projects, including the Xekaman 1 project with total investment of US$441 million.

Investors in PPP projects may enjoy more incentives

The public-private partnership (PPP) investment format will be applied in many more sectors, with a greater participation of the State and more incentives for investors, according to a draft decision being put forth for comment.

The draft, prepared by the Ministry of Planning and Investment, is meant to replace Decision 71/2010/QD-TTg on PPP investment.

At present, Decision 71 enables PPP pilot in only seven sectors, with a focus on traffic infrastructure. According to the amended decision, the PPP format will be carried out in 13 sectors, including many new ones such as culture, sports, agriculture and construction of markets, graveyards and offices for State agencies.

Under the current regulations, PPP project planning and feasibility study are financed by the State budget. The chosen investors have to reimburse the State the sums given to make feasibility study reports.

Meanwhile, the draft says that the State will cover the costs of project preparation and management, which is counted as its contribution. Investors may be asked to repay the State part or the entire project preparation expenses, depending on the scale of each project.

In case their project proposals were rejected, investors would be paid in part or in whole for making project proposals.

Currently, the State participation in a PPP project is decided by the Prime Minister, but it does not exceed 30% of the total investment in that project.

As per the amended decision, the Prime Minister will decide the State contribution in the projects funded the central budget, and the proportion can vary greatly depending on each particular project. As for the projects funded by local budgets, the State participation will be decided by chairpersons of the local governments

Some investment incentives and guarantees will be kept unchanged, such as preferential corporate income tax and import tax, and the right to buy foreign currency.

The amended decision introduces a new provision regarding dispute settlement. Disputes between the State agencies and investors or between investors in the same projects will be resolved by negotiation and mediation.

If negotiation failed to settle disputes, related parties could take the case to the court or arbitration organizations.

Legal capital and assets of investors will not be nationalized or confiscated on administrative orders. If there was a need to acquire investors’ assets, the State would compensate investors according to the Investment Law or the project contracts.

Deputy Prime Minister Hoang Trung Hai has asked localities to make the lists of projects to be developed under the PPP format and submit them to the Government no later than March 10.

HCM City advised to close some toll stations

Experts suggested HCMC close a number of toll stations to avoid overlapping toll collections.

Many toll stations across the nation have been shut down after the road maintenance fee collection began on January 1. However, in early next month, the HCMC government will send to the city’s People’s Council a proposal for toll collection for Binh Trieu 1 Bridge and Rach Chiec Bridge.

Before making the proposal, the HCMC government had asked the municipal Department of Transport to review toll stations in the city.

After the results came out, the city’s government has not made the final decision, but it just asked for further clarifications of the contents in the contracts signed with investors concerning the toll stations for Nguyen Van Linh Street, Kinh Duong Vuong Street and Binh Trieu 2 Bridge.

In regard to the BOT (build-operate-transfer) toll station for Phu My Bridge, managed by Phu My Construction Investment Corp., a variety of options will be considered, including maintenance, transfer to other units or shutdown.

Meanwhile, as for the toll station for the Saigon River Tunnel, the cost of management, maintenance and repair in the future will be covered by the Road Maintenance Fund. However, whether toll fees will be collected at this station or not must be based on the agreement signed with Japan and the instruction of the Prime Minister.

HCMC is advised to shut down some toll stations to reduce the number of toll stations at the gateways to the city.

Expert Pham Sanh told the Daily that the city should close the three toll booths for Kinh Duong Vuong Street, Nguyen Van Linh Street and Phu My Bridge.

In 2002, the city transferred the right to collect toll fees on Dien Bien Phu and Kinh Duong Vuong streets to HCMC Infrastructure Investment Joint Stock Company (CII) at a price of VND1 trillion.

At present, the time for toll collection at these stations has almost run out. Therefore, HCMC should consider paying the sum yet to be collected to the investor before closing them, said Sanh.

The toll station on Nguyen Van Linh Street should also be shut down because toll fees are collected here for maintenance of the street. Now, as the road maintenance fee regulation already came into force, the station should be removed.

As for the Phu My Bridge toll station, due to the poor traffic flow, toll collection for the payback purpose was inefficient. The investor has returned the project to the city, so toll collection should also be stopped.

At present, there are nine toll stations active in HCMC, most of which are BOT stations and those whose toll collection rights have been transferred from the city government to enterprises. Toll station shutdown is a difficult issue for the city because all BOT stations are built on investors’ capital.

* The HCMC government has just submitted to the municipal People’s Council a petition, seeking approval for CII to collect toll fees for Rach Chiec Bridge on Hanoi Highway.

The city wants toll collection to begin on April 1. The lowest toll rate is estimated at VND4,000 and the highest is VND80,000, depending on the vehicle types.

In addition, the HCMC government has asked the city’s People’s Council for permission to terminate the contract for transfer of toll collection right on Dien Bien Phu Street and Kinh Duong Vuong Street on March 31.

The HCMC People’s Council will have a meeting early next month to consider the proposals and decide the road maintenance fees for motorcycles.

BIDV finances VND4.9 tril. to Thu Thiem area

Bank for Investment and Development of Vietnam (BIDV) will lend over VND4.9 trillion to a resettlement project in Thu Thiem new urban area in HCMC given a credit contract signed with 21st Century International Development Company on Wednesday.

The project has a total investment of over VND6.1 trillion and BIDV will offer the loan to the investor for a maximum term of 24 months.

Located in Binh Khanh Ward in District 2, the project is expected to cover over 30 hectares with around 4,200 condos. This is part of the city’s key program to build 12,500 resettlement condos in this area.

The Government in 2011 issued a document to instruct the central bank in giving financial supports to this project.

With this credit agreement, BIDV has financed some VND6.8 trillion to the project to build nearly 6,900 resettlement apartments there.

Ten banks yet to complete gold payment to depositors

About ten local banks have yet to complete paying gold to depositors due to liquidity difficulties while the State Bank of Vietnam (SBV) has set the deadline on June 30, Nguyen Quang Huy, head of SBV’s Foreign Exchange Department, said.

Huy was speaking at the signing ceremony for gold bar processing between SBV and Saigon Jewelry Holding Co. (SJC) in Hanoi on Tuesday.

Ending gold mobilization and settling all gold arrears is part of the central bank’s roadmap to stabilize the local gold market.

The monetary authority in realizing that roadmap will intervene in the gold market as the agency now assumes the role of the largest sole gold seller in the market. The intervention is also carried out via the networks of local banks and gold traders that have been licensed to trade in gold.

Previously, domestic banks were allowed to trade gold via accounts overseas and mobilize gold from citizens in the past but now they are banned from doing so. All gold trading activities will begin with the central bank, which will in early March launch a trial mechanism of trading gold with large volumes via bidding with the participation of local banks.

VFM to make all funds open-end

VietFund Management (VFM) will turn all its funds listed on bourse into open-end funds, said the company’s deputy CEO Pham Khanh Lynh.

VFM is now managing three closed-end funds listed on the Hochiminh Stock Exchange, namely VF1, VF4 and VFA. Earlier, the representative boards of VF1 and VF4 intended to put forward the proposals for dissolution of their funds at the investors’ meeting.

If VF1 was to close in the second quarter of 2014 as scheduled, the fund manager would have to liquidate the fund and convert the majority of portfolios into cash in late 2013. However, major investors found VF1 portfolios to include many good stocks, so if the fund was liquidated, there would be many disadvantages given the current market situation.

Therefore, VF1’s board of representatives has decided to turn the fund into an open-end fund and asked VFM to prepare a plan for this process for presentation at the investors’ meeting slated for March.

Similarly, the intention for dissolution of VF4 is also given a second thought. After investors have agreed to turn VF1 into an open-end fund, VF4’s board of representatives is seeking investors’ opinions on a similar transformation.

Meanwhile, VFA is being turned into an open-end fund. The fund’s representative board is waiting for the decision on listing cancellation from the stock exchange. The first transaction date after the transformation will be April 12.

Moreover, VFM will establish a new fund in the coming time. The State Securities Commission on Wednesday issued a license for offering open-end fund certificates to Vietnam Bond Investment Fund.

The fund with initial capital of VND50 billion will specialize in investment in government bonds, government-guaranteed bonds and local government bonds with investments accounting for 80% of the fund assets. The fund will also invest in corporate bonds.

VFM is undergoing procedures for fund certificate offering slated for March, said Lynh.


By vivian