Fri. Jun 14th, 2024

Developers revise strategies to survive

by Le Hung Vong

The continued slump in the property market has forced real estate companies to change their mode of investments in order to survive.

Hoang Anh – Gia Lai Property JSC, for example, has taken the lead by moving machinery and equipment to Myanmar for construction of a hotel-office building complex.

Le Hung, chairman of the company’s management board, said they would continue construction of property projects in HCM City that have been partly sold. Other projects would be suspended as the company focuses its efforts on projects in Myanmar.

Pointing to a trend in the property market, the Thu Duc House Development JSC said it was ready to launch its first low-cost apartment project.

Nguyen Vu Bao Hoang, deputy general director of the company, said the local property market this year would focus on low-cost housing priced under VND15 million per square metre, targeting low-income customers.

Hoang said the company had cleared the ground and had received the design and construction licence as well as building materials for the 40- 60 sq.m apartments in Thu Duc District.

“We are looking for a ‘warmer’ market and a more reasonable interest rate to break ground for the project,” said Hoang.

On the rental side, Dat Lanh Property Co has 22 apartments for rent at Thai An Building in District 12.

Renters who pay VND200 million (US$9,570) to the investor of the project would be allowed to live in a 22-sq.m apartment for six months to two years without paying monthly rent. After two years, the investor would return the initial sum of money to the renter.

Nguyen Van Duc, deputy director of Dat Lanh Property, said many companies were trying to survive in difficult times and that changes in their business strategies would help sell off stockpiled goods.

According to figures from the Construction Ministry, 2,600 of 56,000 enterprises specialising in property and construction last year suspended operations in the country.

Insiders do not expect the local property market to be much better in 2013. However, new waves of house price reductions have been seen in the local market.

Cambodia, Laos rubber

The area under Viet Nam Rubber Group’s cultivation in Laos and Cambodia totals 100,000 ha, including 27,000 ha under the group’s seven rubber projects in Laos.

The company said that after successful projects in southern and central Laos, VRG established its subsidiary Dien Bien – Northern Laos Co to invest in a rubber project in the northern province of Oudomxay in Laos.

Also in Laos, Viet – Laos Rubber JSC has commenced exploiting latex on nearly 5,500 ha under rubber cultivation, and their products have been sold to local and overseas markets.

By the end of 2012, VRG had 21 rubber projects in Cambodia, including 19 rubber tree plantations and two rubber-processing projects.

To date, VRG has over 70,000ha under rubber cultivation in Cambodia, including several areas cultivated by its subsidiary Tan Bien – Kampongthom which are currently producing latex.

The company said in 2013 it would plant rubber trees on an additional 25,000 ha in Cambodia.

Together with other Vietnamese companies, VRG intends to realise a plan to have 100,000 ha under rubber cultivation in Cambodia by 2014, one year ahead of schedule of an agreement previously approved by the governments of Cambodia and Viet Nam.

Rice export earnings off

Viet Nam exported more than 7.7 mil lion tonnes of rice, earning more than US$3.5 billion in 2012. Last year, Viet Nam also surpassed Thailand in rice exports and was ranked the world’s second-largest rice exporter, behind India.

However, many local farmers were unhappy because last year’s volume of rice exports increased by 8.3 per cent compared with 2011, while rice-export turnover dropped by nearly 2 per cent.

Speaking at a meeting to review rice production in 2012, held in the Mekong province of An Giang in early February, the Deputy Minister of Agriculture and Rural Development, Bui Ba Bong, said that last year’s rice output amounted to 44 million tonnes, 1.6 million tonnes higher than the previous year.

The volume of exported rice in 2012 was 630,000 tonnes higher than 2011, Bong said.

However, the export price for Vietnamese rice was $447 per tonne on average, $40 per tonne lower than the price in 2011.

At that time last year, paddy prices were not as high as expected, while local farmers had to pay more for production costs.

The average monthly income of rice growers in the Mekong Delta, which supplies up to 90 per cent of Viet Nam’s rice for exports, was about VND300,000 ($14.3) per person, Viet Nam News Agency said, citing figures from the World Bank.

Local farmers remain unhappy as prices of paddy from the current winter – spring crop are not as high as expected.

The Ministry of Industry and Trade has said that in January Vietnamese exporters won contracts to export 1.3 million tonnes of rice this year, not including contracts of 650,000 tonnes signed last year.

According to the UN’s Food and Agriculture Organisation, many countries this year would need to import about 37.5 million tonnes of rice.

To reduce the stockpiles of rice and prepare for new crops, rice-producing countries will increase rice exports, forcing rice prices down by about $20 per tonne.

Therefore, Vietnamese exporters will encounter harsh price competition from Thailand and India. —VNS

By vivian