NFSC assesses Jan-Sep economic performance
Though economic indicators showed improvements, more efforts are still needed for attaining the 5.5% GDP growth target, according to the National Financial Supervisory Committee (NFSC).
The NFSC reported that economic production bounced back slowly. Inventory levels of industrial manufacturing dropped sharply and industrial production index constantly rose, soaring 5.4% in September. However, import growth rates of raw materials remained modest.
Total demand was relatively weak in which the January-September retail sales of goods and services increased by 12.5% against the same period last year.
GDP growth pace in Q3 was higher than forecast thanks to the Government’s efforts to maintain macro-economic stability and prioritize inflation curbing.
Nevertheless, the economy still faces challenges including inefficient credit freeze and weak consumption demand which are hampering production.
In addition, GDP growth rate relying heavily on exports poses unexpected risks to national economic sustainability.
Thanks to better macro-economic performance, Viet Nam climbed five notches to the 70th position in the Global Competitiveness Index 2012-2013 and jumped 19 points ahead in the macro-economic environment index.
At international markets, foreign investor confidence improved considerably in which the country’s credit risk level measured by the Credit Default Swap (CDS) was lowered from over 300 points in the same period last year to around 220 points over the previous months.
According to the Committee, the monetary market has been improved. The liquidity of the banking system was much better than in the previous period.
Meanwhile, lending interest rates sometimes surged unexpectedly but usually was kept between 3-4% in the first nine months.
Exchange rates were also relatively stable except for small seasonal changes and are expected to be maintained for the rest of the year as the supply and demand would be balanced and foreign reserve would be increased.
Local book company among top 500 Asia-Pacific retailers
The Ho Chi Minh City book distribution joint stock company, Fahasa, has been selected as one of the top 500 Asia-Pacific retailers in 2013 by the Singapore-based Retail Asia magazine.
This is the fourth year Fahasa has received the noble award.
Launched in 2004, the annual Asia-Pacific Top 500 Retail Awards are based on surveys of business turnovers by Euromonitor International in 14 regional countries, including Australia, China, Hong Kong, India, Indonesia, Japan, New Zealand, the Philippines, Singapore, Malaysia, the Republic of Korea, Thailand, Taiwan, and Vietnam.
Fahasa was also selected as one of top ten leading retailers in Vietnam in 2013.
Fahasa General Director Pham Minh Thuan said developing reading culture is Fahasa’s top political and economic task.
The book company launched promotional programs across the country with total discounts of VND2 billion.
Despite economic difficulty, Fahasa earned VND1,200 billion in the past nine months and is expected to raise the figure to more than VND1,600 billion by the year’s end.
Tuna exports to ASEAN surge
Vietnam’s tuna exports to ASEAN countries hit US$20.798 million in the first seven months of this year, up 1.3% compared to the same period last year.
The volume of processed tuna, excluding canned tuna, accounted for more than 51% of the total figure.
According to the Vietnam Seafood Exporters and Processors (VASEP), ASEAN has become the fourth biggest importers of Vietnamese tuna, after the US, EU and Japan.
However, not all ASEAN members import tuna from Vietnam, except for Thailand and Singapore.
One reason is that Vietnamese tuna businesses are more interested in the EU market to enjoy tax incentives than in the ASEAN market, not mention that they are facing stronger competition from tuna exporters in neighbouring countries.
Vietnam has trade surplus with Germany
Germany is currently Vietnam’s largest trade partner in the EU with two-way trade turnover reaching US$9.065 billion in 2012.
Of the figure, Vietnam’s exports to the country were valued at US$6.6 billion, up 27.7% and its imports at US$2.5 billion, a year-on-year increase of 9.9%.
In the first six months of this year, bilateral trade between the two countries showed a year-on-year increase of 29.5% to US$3.7 billion. Vietnam’s export earnings from Germany reached 2.35 billion (up 22.35%), accounting for 18% of its total exports to the EU.
Computers and electronics, paper products, telephones and accessories, clothing and apparel products were among key items Vietnam exported to Germany while it imported machinery and equipment, automobiles, and chemical products.
Vietnam will continue to import Made-in-Germany machinary, aiming to become an industrial country by 2020.
By late 2012, Germany had 205 direct investment projects operating in Vietnam with a total capitalization of US$1.1 billion, ranking 22nd among foreign investors in the country.
Ha Giang-Yunnan cooperation promoted
Vietnam’s Ha Giang province and China’s Yunnan province held a meeting on October 2 to review the one-year implementation of their cooperative program in the 2012-2015 period.
Nguyen Van Son, Vice Chairman of the Ha Giang provincial People’s Committee, said the two sides have achieved significant progress in strengthening mutual understanding, trust and friendship, and cooperation in all fields.
To further boost bilateral cooperation, the two provinces will step up investment and trade promotion for the benefit of socio-economic development in each locality, he said.
Ha Giang will give priority to infrastructure upgrade at the Thanh Thuy, Xi Man-Dulong and Sam Pun-Tianpeng Border Gates.
Ha Giang’s import-export value already reached US$352 million in 2012, a year-on-year increase of 23 percent. Its trade turnover has hit US$350 million over the past nine months and is expected to reach US$400 million by the end of this year.
Singaporean investor awarded Friendship Medal
Low Sin Leng, Co-chairperson of the Vietnam-Singapore Industrial Park (VSIP) Limited Company, was awarded the Friendship Medal at a ceremony in Binh Duong province on October 2.
The award was in recognition of Low’s contribution to Vietnam’s socio-economic development, helping strengthen the Vietnam-Singapore friendship.
Low is one of the Singaporean investors in the VSIP Joint Venture. The industrial park was established under an agreement signed between the two governments to boost Vietnam’s economy and its cooperation with Singapore.
From the first one in Binh Duong, the VSIP JV has by now built four more industrial parks in Vietnam: one more in Binh Duong and three others in the northern port city of Haiphong, the northern province of Bac Ninh and the central province of Quang Ngai.
The VSIP system has so far attracted over US$6.4 billion of investment and generated jobs for 140,000 employees.
Binh Duong province is home to a total of 2,167 FDI projects with combined capital of US$18.2 billion. Singapore alone has invested in 116 projects capitalised at over US$1.5 billion, becoming the leading foreign investor in the province.
Promoting women’s role in economic development
Women should be encouraged to get involved in economic development as a way to promote gender equality and social progress.
The statement was made by Chairman of the Vietnam Chamber of Commerce and Industry (VCCI) Vu Tien Loc at a forum in Hanoi on October 2.
Loc said the Party and State have introduced a number of policies to develop the female business community in Vietnam, and the forum provided the chance for domestic and foreign agencies to share experience in supporting women and businesswomen in economic development.
The International Labour Organisation (ILO) Country Director Gyorgy Sziraczki said the forum will help raise women’s leadership role in business organizations, promote gender equality and honour businesswomen’s initiatives.
A country cannot eliminate poverty, achieve prosperity and develop sustainably unless women are empowered and fully engaged in economic activity, he said.
UN Women Chief Representative in Vietnam Shoko Ishikawa said barriers should be removed to encourage women to take part in labour market by accelerating reform and ensuring the best working conditions and human rights for both women and men.
Participants at the forum discussed two main issues: creating the best possible conditions for businesswomen to develop and empowering women in production and trading in Vietnam.
Supply chain congress attracts key experts, executives
The Supply Chain Congress 2013 opened in Ho Chi Minh City on October 2, bringing together more than 600 experts and executives from Vietnam and across the globe.
Themed “Purchase – Production – Retail – Distribution,” the biggest annual event of its kind in Vietnam, has attracted businesses specializing in the fields of retail, logistics, automobiles and motorbikes, electronics, construction materials, footwear, garments, chemicals, food, beverage, energy, pharmacy and wood.
Throughout the three-day congress, 60 domestic and international speakers, including world renowned doctor John Gattoma, will present 15 reports on supply chain, with a focus on purchase, production, retail, and logistics.
Participants will examine issues related to management of supply chain, ranging from purchase to distribution, helping Vietnamese businesses keep up to date with the latest information, new techniques, real experience and effective application methods in supply chain management across the world.
They will touch upon important issues such as trade promotion, creation of product value and competitive edge, purchasing opportunity and forecast, logistics barriers to the rice industry and the recent development of the convenience stores system in Vietnam.
Measures for GDP growth in Q4
The Ministry of Industry and Trade (MoIT) has insisted on practical measures to boost GDP growth in the last three months of this year, with priority given to industrial production, export value, and market stabilization.
The MoIT expected to see higher industrial production increasing in the fourth quarter at a year-on-year rate of 5.7%.
It asked the industrial sector to strictly inspect its production activities and closely cooperate with associations in helping local businesses iron out their snags.
In addition, it is essential to lower inventory level on the domestic market and launch promotion programmes in both Vietnam and abroad to promote consumption and facilitate production, the Ministry said.
It also asked the industrial sector to speed up the implementation of key projects in the support industry.
The MoIT forecast that Vietnam’s exports will hit US$131 billion, up 14% from a year earlier, and its imports achieve a year-on-year increase of 15.6% to US$131.5 billion by the end of this year. As a result, the 2013 trade deficit will stay at US$500 million.
The Ministry said it is currently engaged in bilateral and multilateral negotiations to expand market share and promote export activity. The focus will be on implementing the already signed free trade agreements (FTAs), exploring traditional markets, and penetrating new markets in the Middle East, West Asia, South Asia, Africa, and Latin America, it said.
Regarding the domestic retail market, the MoIT proposed balancing supply and demand and stabilizing market prices. Retail sales and services in 2013 are expected to rise 13% compared to last year’s figure.
The Ministry stressed the need to implement promotion programmes in rural, border and remote areas and encourage local consumers to buy made-in-Vietnam products.
It also requested relevant agencies to pay due attention to combating counterfeit and low-quality products and protecting consumer rights.
Lighting expo opens in HCM City
The latest lighting equipment and components are on display at the LED/OLED Lighting World Expo which opened at the Saigon Exhibition and Convention Centre on October 2.
The third edition of the expo has attracted 100 companies from 10 countries and territories, including the Republic of Korea (RoK), Japan, the US, Singapore, Thailand, China and Vietnam.
On display are 220 booths including LED, OLED and solar energy lights, lights for automobiles, transportation and mobile systems, brightness measurements and others.
At the opening ceremony, Bui Van Quyen, chief representative of the Ministry of Science and Technology’s southern office, said the event will be a platform for networking and exploring business opportunities, and developing local and international partnerships.
Co-organised by Eifec Co.Ltd and Exporum Inc, one of the leading exhibition organizers in the RoK, the expo will finish on October 4.
ATM card holders have $4b
ATM card holders in Viet Nam had VND89.8 trillion (US$4.08 billion) in 42.7 million current accounts at the end of June, according to the latest data from the State Bank of Viet Nam. The savings earn 1.2 per cent in interest per year.
The central bank said that overall savings were down by VND10 trillion ($454.54 million) from early June, but were higher than the last months of 2012.
By the end of the first quarter, the amount in ATM accounts number was VND99 trillion ($4.5 billion), much higher than the VND85 trillion ($3.86 billion) for the same period last year.
The SBV said by the end of the second quarter, year-on-year current accounts rose from 10 per cent to 15 per cent both in account number and value, however, no specific comparative figures were released.
According to the Viet Nam Card Association, nearly 20 years after being introduced, millions of Viet Nam’s ATM cards are still used to withdraw cash at ATMs instead of performing non-cash transactions.
The central bank has taken measures to boost non-cash transactions, including a draft decree on limiting the use of cash for large transactions which is expected to be submitted to the Government for approval this year.
Under the draft, 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 in real estate, securities, aircraft, ships and cars, or transactions exceeding the limit set by the central bank.
The central bank is also implementing a project on non-cash payments. It hopes to have 150,000 point of sales (POS) nationwide by 2015 compared to the present 94,000.
Hygiene key to European trade
Negotiations on the Sanitary and Phytosanitary Systems (SPS) play a pivotal role in promoting free trade between Viet Nam and the European Free Trade Association (EFTA), which is also estimated to boost Viet Nam’s exports in the EU.
The message was delivered at a workshop held by the Ministry of Industry and Trade (MoIT) in Ha Noi to conceptualise the SPS for domestic enterprises.
Chief negotiator Tran Trung Thuc said that the SPS applied by the EFTA (including Sweden, Norway, Iceland and Liechtenstein) nearly matches the SPS set by the EU.
This means exporters must meet the EU’s requirements if they wish to export to the EFTA.
According to Thonmas Tison, an EFTA expert, the SPS contains the highest similarity between the EFTA and the EU. When the EU ratifies, no country in the EFTA would be allowed to reject SPS-certified products from Viet Nam.
The workshop introduced common regulations on the SPS that directed domestic firms to enhance the export of meat and seafood, cereals and vegetables, processed food and pharmaceutical products.
Since May of this year, Viet Nam and the EFTA have held five FTA negotiation sessions.
Together with FTA negotiations, the EFTA and Viet Nam signed a memorandum of understanding in July to recognise Viet Nam as a market economy.
More orders boost manufacturing sector
A survey of manufacturers last month has brought positive news on the health of the sector, according to a HSBC report released on Tuesday.
The Purchasing Managers’ Index (PMI) for September said new orders and employment both increased at survey record rates, and there was a marked gain in foreign sales.
There were reports that underlying economic conditions were improving, supporting demand and raising market activity, it said.
The headline seasonally adjusted PMI – which is meant to provide a snapshot of operating conditions in the manufacturing sector – rose back above the 50.0 no-change mark to 51.5.
That was an improvement on August’s 49.4 and the best reading since April 2011, the first month for which survey data is available.
Driving the PMI higher were new business and employment.
Growth of new business was solid, the survey said, reflective of an improvement in underlying demand from domestic and foreign clients.
Better product quality and competitive pricing – with the latest survey showing a sixth successive monthly decline in prices – also supported sales growth.
New export business rose at a series record pace. It was the first time in four months that an increase in new export sales had been registered.
Encouraged by higher sales, payrolls continued to expand in the manufacturing sector.
Backlogs of work continued to decline, marking the 18th consecutive month that work outstanding had been cut.
Stocks of finished goods rose slightly and manufacturers were able to add to stocks and cope with a rise in new orders while maintaining a broadly stable level of output.
Despite easing from August’s high, the degree to which average costs rose was again marked and, with prices falling in line with ongoing competitive pressures, profit margins continued to be squeezed.
Fuel, utility, and raw material costs all rose.
Commenting on the survey, Trinh Nguyen, the bank’s Asia economist, said: “The above 50.0 PMI reading is reflective of improved global demand for Vietnamese goods as well as a stabilisation of domestic conditions.
“While we expect output to pick up in [the second half] thanks to an expected recovery in the euro zone, China, the US, and Japan, internal demand is still lacklustre. While prices rose in Q3 2013, we expect inflationary pressures to remain contained.”
Viet Nam, Italy boost economic co-operation
A forum to promote economic co-operation between Viet Nam and Italy was held in Milan early this week.
Participants reviewed the development of bilateral co-operation in recent years, especially after the two countries established their strategic partnership.
They discussed the acceleration of setting up a joint commission on economic co-operation coordinated by Viet Nam’s MoIT and Italy’s Ministry of Economic Development.
Speaking at the event, Industry and Trade Deputy Minister Ho Thi Kim Thoa said a number of Italian giants, such as the Italian national oil and gas group (ENI), Piaggio, Ariston, Bonfiglioli and Perfetti, consider Viet Nam as a key destination for their plans for expanding market in the Asia-Pacific region.
She expressed her belief that the joint commission will create favourable conditions for the two sides to consult, exchange and complete the legal framework and investment and co-operation incentives.
During the forum, Italian businesses were provided with updated information on the investment environment in Viet Nam, and prospects for long-term economic co-operation between the two countries’ enterprises.
After the forum, the participants had a round-table discussion on topics related to the co-operation potential in the fields of energy and retail, distribution, development and investment promotion plans in the industrial sector and experience of Italian investors operating in Viet Nam.
The forum, organised by the Ministry of Industry and Trade (MoIT) and the Vietnamese Embassy to Italy in conjunction with the Italian Institute of Foreign Trade, the association of industrial employers in Lombardy region (Assolombarda), and the Milan Investment and Trade Promotion Organisation, is an activity to launch “Viet Nam Days in Milan.”
It takes place in October in order to celebrate the 40th anniversary of Viet Nam-Italy bilateral relations.
Unclaimed luxury cars may be sold as abandoned goods
The Ministry of Finance may shorten the time to seize unclaimed cars at ports in several cities by classing them as abandoned property.
According to the plan, the ministry will seize unclaimed cars held in ports for more than 30 days, instead of the 90 days previously.
The cars will be later sold publicly and the money added to the State budget.
The ministry’s General Department of Customs last month asked offices in Hai Phong, Da Nang, HCM City, Ba Ria – Vung Tau and Quang Ninh provinces to co-ordinate closely with warehouse companies – and then take action.
According to a source close to the department, five imported luxury Lexus cars, including a RX 350, LX 570 and GX 460F held in central Da Nang City, would be the first cars to be seized because they have been unclaimed for several months .
Customs officers have been asked to carefully verify each case and report to the General Department any evidence of smuggling.
In May 30 this year, a total of 178 used cars (mostly manufactured in 2011, 2012 and 2013) imported by overseas Vietnamese were being held at ports.
Investigations have shown that legal ownership for these cars has not been established.
In many cases, the owners are illegal immigrants or do not have permanent residency in Viet Nam.
In several other cases, the applications for importing cars do not meet set requirements.
New admin offence ruling
Decree No 108/2013/ND-CP (“Decree 108”) has just been issued on September 23 and replaces Decree 85/2010/ND-CP on penalties for administrative offences in securities and securities market sector (“Decree 85”). In comparison with Decree 85, Decree 108 includes some major changes as follows:
Decree 108 adds “forfeiture of using rights of the certificates of registration of operation applicable to representative office, securities business practising certificates from over 03 months to 24 months” to the main forms of penalties.
The rate of fine stipulated in Decree 108 is also changed: (i) the maximum rate of fine is specified; accordingly, it shall be VND2 billion and VND1 billion, applicable to an organisation and individual that commits an administrative offence, respectively; (ii) along with the maximum rate of fine, Decree 108 also provides the rates of fine on the basis of percentage and multiple of the unlawful incomes.
For instance, the formation, verification of an application file for registration of a public offer of securities having fabrication shall be fined from 1 per cent to 5 per cent of the unlawful mobilised amount of money; the organisation that conducts a public offer of securities without the certificate of acceptance of the public offer of securities shall be fined the amount of money that is from 01 to 05 time (s) as much as the unlawful income. Pursuant to Decree 108, some new administrative offences are also supplemented; for example, breaches of provisions on private placement of shares within the territory of Viet Nam by public company and breaches of provisions on issuing private bonds in Viet Nam; breaches of provisions on bonds issuance in the international market, offers of securities in foreign countries and new placement of securities to offer securities depository certificates in foreign countries or to support the issuance of securities depository certificates in foreign countries on the basis of the issued shares in Viet Nam.
According to Decree 108, the position of Head of specialised inspection group of State Securities Commission has the same authority to impose penalties for administrative offences as the Chief of the Inspectorate of the State Securities Commission.
Besides, the maximum fine that the competent persons can impose is also remarkably increased: the Chief of the Inspectorate of the State Securities Commission can impose a fine up to VND100 million in the case of an organisation instead of VND70 million as previously stipulated; the Chairman of the State Securities Commission shall have the right to impose a fine up to VND2 billion with respect to an organisation, and VND1 billion with respect to an individual.
Provisions on sanctions against administrative violations in the fields of price, charge, fees and invoices management.
On September 24, 2013, the Government issued Decree 109/2013/ND-CP to replace Decree 106/2003/ND-CP, Decree 84/2011/ND-CP and Decree 51/2010/ND-CP Chapter V on application of administrative fines in the field of price management, charge, fees and invoices.
Under this Decree, the maximum rate of fine applicable to individuals is VND150 million regarding violations in price management and VND50 million with respect to violations in management of charge, fees and invoices. For a same administrative violation, organisations shall be applied with a twofold fine levels in comparison with those applied to individuals.
According to the Decree, the time limit for sanctioning administrative violations in the invoice domain is 01 years, in the management of price, charge and fees is 02 years.
Regarding administrative violations in invoice domain which lead to tax evasion, tax fraud, lateness of tax payment, lack of tax declaration, the time limit shall be in accordance with the tax laws.
This Decree takes effect on 09 November 2013.
Milk companies subject to thorough inspections
Several ministries will cooperate to carry out an overall inspection of the baby formula milk industry in the next few days in an attempt to control the price.
According to the law, dairy products are subject to the government management but food supplements and nutritional products are not. Taking advantage of certain loopholes, several enterprises have classified their products as food supplements to avoid price stabilisation policies.
It was announced on September 30 that the Ministry of Health will have to issue a list of dairy products by October 5 so the Ministry of Finance can set up prices for those products.
Meanwhile the Ministry of Finance and the Ministry of Industry and Trade (MoIT) will carry out an inspection and suitable price adjustment at milk companies for possible price fixing. The management agencies under the MoIT are also authorised to carry out inspections and punishment of violators.
Nguyen Xuan Chien, deputy head of Domestic Market Department, under the MoIT, said that this is an order from the Prime Minister after signs of price gouging were revealed.
Speaking on the recent problem for fuel markets after the MoIT proposed to let wholesalers increase fuel retail prices by the maximum of 5%, Chien said this proposal will help to develop the market mechanism. Even if the wholesalers are allowed to raise fuel prices, they are sill under the government’s management.
Chien also said they will lower the fuel prices in October as soon as they see the chance.
Non-performing loan resolution requires inter-ministerial efforts
Despite the government’s positive steps to address problems in the banking sector, Vietnam’s economic reforms have generally been fitful and difficult. A non-performing loan (NPL) resolution can only be achieved with strong inter-ministerial collaboration, the Asian Development Bank (ADB) said in a major report released today.
A non-performing loan resolution can only be achieved with strong inter-ministerial collaboration in Vietnam, the ADB said in its report. Illustrative photo.
The report also suggested the establishment of an inter-ministerial steering committee for implementing banking restructuring to help this process. An NPL resolution would allow interest rates to be lowered sustainably without increasing inflation.
The Update to ADB’s annual economic publication, Asian Development Outlook (ADO) 2013, which launched today, maintains the forecast for GDP growth for Vietnam at 5.2% for 2013, and expected gradual progress in dealing with NPLs could slightly lift growth to 5.5% next year. The inflation forecast is revised down, from ADO 2013, to 6.5% for this year, because food price inflation has decelerated more quickly than expected. Inflation is projected to climb to an average of 7.2% for 2014 due to monetary easing and increased liquidity.
The ADO Update commended the positive steps taken by the State Bank of Vietsam, (SBV), to deal with NPLs in the banking sector; in particular the formation of the Vietnam Asset Management Company (VAMC). The Update, however noted that the success of VAMC could depend on other supporting legislative and policy reforms not under the direct mandate of the SBV. The Update also expressed concern over delays in implementation of improved loan classification and provisioning standards.
“The creation of VAMC is very positive but its success could depend on strengthening the legislative framework for dealing with secured assets, which will require strong inter-ministerial coordination and collaboration,” said Tomoyuki Kimura, ADB Country Director for Vietnam. “Implementation of improved loan classification and provisioning standards would have reduced risks to the banking system and improved investor confidence.”
Despite policy rate cuts, growth in lending was constrained by banks’ impaired balance sheets, concerns over the financial health of borrowers, a sagging property market, and weak demand for credit. The ADO Update suggested that progress on an NPL resolution would allow further lowering of interest rates and increase cash flow to productive sectors of the economy.
“Gradual progress in resolving NPLs will improve business confidence,” added Mr. Kimura. “As this happens, policy stimulus, including the cuts in interest rates this year, could gain traction in boosting credit and GDP growth.”
VAMC sees bad debt purchase off to a good start
Vietnam Asset Management Company (VAMC) has seen encouraging signs of its endeavor to purchase bad debts from credit institutions, with a contract signed on Tuesday to buy trillions of debts and many more in the days to come, a senior executive said.
Le Quoc Hung, vice chairman of VAMC, told the Daily in an interview that “several contracts to buy bad debts from joint-stock banks will be signed right this week.” He was speaking after signing a frame contract with Vietnam Bank for Agriculture and Rural Development (Agribank) to buy the first batch of bad debts from the latter with the book value of over VND2.4 trillion.
“After this deal with Agribank, both sides will sign 27 sub-contracts for every specific bad debt. And this is just the first sign, since many more deals with other banks are being processed,” Hung told the Daily.
He cited for example a frame contract to be inked with SCB covering bad debts with book value amounting to hundreds of billions of Vietnam dong, another to be signed with SHB, and one with PGBank, the last one having book value of some VND200 billion but to be purchased at VND170 billion.
Hung said VAMC had to screen through all the debts on offer to single out what debts to be purchased.
For example, for the frame contract signed with Agribank, VAMC looked through the total amount of VND3 trillion of bad debts, and picked out only VND1.7 trillion for the agreement.
Asked to comment on the quality of bad debts, Hung said some are really bad, but there are also many that should not be hastily sold. “I have looked at some debts and mortgaged assets that are really valuable once the market recovers, so it will be regrettable if such assets are offloaded in a rush,” he said.
He also noted that banks are changing for the better their attitude toward VAMC, as more lenders are approaching the company with numerous offers.
“Initially, we had to contact credit institutions, but now they are coming to us. They are more open and cooperative, which can be seen as initial but encouraging results,” he said.
Currently, VAMC has received hundreds of dossiers from banks wanting to sell between 500 and 700 bad debts. “I feel assured of the target to buy back bad debts with book value of VND30 trillion within this year.”
Commenting on the capacity to liquidate bad debts, Hung said many international organizations have approached VAMC in recent times to buy debts. However, the company will not offload all such bad debts, but will retain a certain number, then restructure and improve them to render more support to enterprises as debtors.
Hung likened bad debts to patients that need to be hospitalized, and what is important is to have good doctors and good treatments.
“If bad debts remain at VAMC like patients in hospital, that is no recovery at all. What should be done is to improve the debts so that they can be discharged from hospital,” he said.
As covered in the Daily on Tuesday, bad debts at Agribank are the first purchased by VAMC.
VAMC will issue special bonds with the total value of over VND1.7 trillion for this contract. Mortgaged assets in the contract have the total value of over VND3.6 trillion.
These debts have met conditions required by the Circular No. 19/2013 on bad debt trading and handling, the source said.
VAMC targets to issue VND35 trillion worth of special bonds to buy bad debts from now to the end of this year.
Incham cuts trade deal with Dong Thap
The Indian Chamber of Commerce in Vietnam (Incham) will help the Mekong Delta province of Dong Thap export its farm produce to India, according to a memorandum of understanding (MOU) signed by both sides in HCMC last Saturday.
Under the MOU signed at the seminar on trading and investment cooperation promotion between Incham and Dong Thap, the province will be given supports from Incham to export rice, fruit, tra fish and crayfish to the huge Asian market.
The seminar was organized as an initiative of the provincial Department of Industry and Trade with an aim to set up partnerships and joint venture ties between businesses from the two nations. The bilateral cooperation is expected to comprise of investment, science and technology, training and tourism besides commodity trading and exchange.
Speaking at the seminar, Nhi Van Khai, director of the department, called Indian companies’ attention to key products of the province to meet import demand from India as well as applying science and technology to create additional values for local farm produce. Khai also proposed Incham consider opportunities in making investments in agricultural and tourism projects in the province.
Dong Thap Province’s vice chairman Nguyen Van Duong at the seminar promised to offer the highest incentives to Indian investors so that they could deploy projects in a timely manner.
Indian Consul General Deepak Mittal meanwhile said he was willing to support trading and investment relationships between Indian enterprises and Dong Thap Province. He committed to working with Incham and the provincial government more closely to bring more Indian-invested projects to the province.
C.T considers logistics properties
Ho Chi Minh City property developer C.T Group’s C.T Song Than has plans to build airport logistics property projects in its home city, Danang, and Hanoi.
The projects are in response to the company’s already fully occupied logistics centre in the southern Binh Duong province.
The group identifies logistics centres as in high demand from foreign investors.
Garment firms making major expansions
As competition between textile and garment producers and exporters heats up, several have invested into increasing their production lines to expand their potential markets.
Since early this year, Hue Textile Garment Joint Stock Company (Huegatex) has pumped $2.3 million into machinery and equipment to diversify their production, reported a source inside the company.
The company expanded from eight production lines to 50 to boost their export potential.
“Based on our current signed orders, Huegatext envisions reaching our annual export target of $66 million ahead of schedule,” said the company’s deputy general director Ho Van Dien.
In the first eight months of 2013, Saigon Garment Manufacturing Trading JSC (GMC) marked revenues of $43.3 million with profits of $2.4 million.
“If things continue to go smoothly, we will have completed our annual businesses targets of $52.3 million revenue and $2.9 million profits early this year, by mid-November,” said a company source.
GMC is also considering hiking its production by 25 per cent in 2014.
According to company chairman Le Quang Hung, GMC will install six more production lines at its second-phase export garment facility in Ba Ria-Vung Tau province, and six more at its Quang Nam plant.
By 2015, the company’s production is expected to increase by 70 per cent.
GMC’s next benchmark is to transition from the original equipment manufacturer (OEM) model to original design manufacturer (ODM), a value-added system that is expected to propel the company’s revenue to $100 million by 2018.
Hoa Tho Textile Garment JSC in Danang city in the central region is also considering a $6.6 million injection into production capacity this year.
The capital would go into a suit production line valued at $1.4 million, a $950,000 garment plant, and fibre investments totalling $1.9 million, as well as other improvements and expansions.
“To advance our competitiveness in the coming years, increasing production and implementing innovative technology and equipment is a must. There is growing competition between textile clothing firms and that is pushing us to improve,” said Hoa Tho’s general director Tran Van Pho.
Advisor to the Vietnam Textile and Apparel Association Le Quoc An said that Vietnam has great potential in the textile and garment industry and major world markets held its supply capacity and garment quality in high regard.
Investors to be allowed to decide condo areas
The draft amended Housing Law which is now open to public comments allows project owners to decide apartment sizes themselves instead of forcing them to adhere to the minimum flat area in line with the prevailing regulation.
Under the current rule, commercial apartment projects are required “to design condos measuring at least 45 square meters a unit.” In the meantime, the draft amended version removes the aforesaid rule, with housing developers allowed to decide on building commercial homes with different sizes to ensure the homes conform to the construction planning details and housing development plans and programs that are approved besides construction criteria.
The apartment size has been a controversial issue in recent times. Those supporting flats with a flexible area say that the small condos would be sold easily as their prices are affordable to many homebuyers. Meanwhile, others argue that such a rule would ruin the zoning plan, putting higher pressure on the projects’ infrastructure as a result.
Land lot projects in Binh Duong find more buyers
Binh Duong New City and the new administrative center which are almost completed have helped property projects in Binh Duong Province become more attractive to buyers lately.
Similar to the apartment segment in HCMC which is offering price discounts to attract home buyers, owners of many land lot projects in Binh Duong have also lowered selling prices.
Over one month ago, land lots of the [email protected] project in Binh Duong New City were announced to be priced at some VND3.5 million per square meter. These land lots have an area of 150-300 square meters each.
However, at the launch of the project last Saturday, the project’s distributor Tac Dat Tac Vang Joint Stock Company said that the selling price of land lots was adjusted down to around VND3 million per square meter, or a 14% discount.
[email protected] invested by Becamex IJC and VISP consists of commercial houses, shopping center and other amenities in an area of 128 hectares.
Similarly, Kim Oanh Real Estate Joint Stock Company is also seeking customers by offering for sale land lots of the Ben Cat Center Point project in Ben Cat District and next to National Highway 13.
Invested by Becamex, BenCat Center Point covering some 55 hectares provides townhouse land lots which are of 100-3,000 square meters each and priced from VND200 million per unit. In addition to this project, Becamex is selling land lots of the Civilized City project.
According to Becamex, projects with reasonable and affordable products are attractive to customers. The firm has sold around 1,700 land lots in Binh Duong and Dong Nai provinces.
Truong An Duong, head of research and consultancy at Savills Vietnam, said that the most potential housing segment in Binh Duong Province is the one for medium-income earners.
A research by Savills Vietnam indicated that there were 49 apartment and villa-townhouse projects with some 11,000 apartments and land lots in Binh Duong as of August. Those projects are mainly located in Thuan An, Di An, Thu Dau Mot, Ben Cat and Binh Duong New City.
According to Savills, most of the housing projects in Binh Duong Province direct at customers who are State workers and home buyers from other provinces.
With a population of some 1.7 million and laborers accounting for 75%, Binh Duong Province is a potential market for property projects.
Japan-based Tokyu is also investing in an urban area worth US$1.2 billion in Binh Duong New City.
U.S. urologist visits HoaLam-Shangri La Int’l Hi-tech Healthcare Park
Dr. Shahram Gholami, a leading expert in urology surgery, visited HoaLam-Shangrila International Hi-tech Healthcare Park before the opening of City International Hospital, one of six hospitals in the park, on September 24.
Gholami joined a fact-finding trip to the hospital with many government officials, including Minister of Health Nguyen Thi Kim Tien.
Gholami highly praised facilities and professional staff of City International Hospital, saying that Hoa Lam-Shangri La Healthcare Co. Ltd. is a capable developer with much experience for choosing Singapore’s Parkway Health as the hospital manager and South Korea’s CJ Freshway as the catering service provider.
“I believe that City International Hospital is on the same level with big hospitals in the world and even better than some large hospitals in Shanghai,” Gholami said.
Gholami also expressed hopes to become a partner of City Hospital in the mission of serving community health. “Initially, we have offered to cooperate with City in health check-ups and treatment. The hospital will provide testing and scanning results so that we can join hands to bring best therapies to patients,” he added.
International Hi-tech Healthcare Park with a total area of 37.5 hectares is invested and developed by Hoa Lam-Shangri La Healthcare Co. Ltd., a joint venture between Vietnam’s Hoa Lam Corporation and Singapore’s Shangri-La Healthcare Investment Pte Ltd.
The project worth over US$1 billion is scheduled for completion after ten years of construction. It consists of four components: a healthcare zone with six hospitals offering 1,750 beds; an education and training zone; a support zone with commercial center and office building and a public zone with hotel, convention center and park.
Madame Tran Thi Lam (2nd, R), chairwoman of the Members Council of Hoa Lam Shangri-la, and Dr Shahram Gholami (1st, L)
City International Hospital, the first hospital in the International Hi-tech Healthcare Park to get going, welcomed first patients on September 24. With 320 patient beds, the hospital is designed as a general hospital, with major wards like obstetrics and gynecology, pediatrics, cardiology, otolaryngology ophthalmology and neurology etc.
Speaking at the inauguration ceremony, Professor Tran Thi Trung Chien, former Minister of Health and Chairwoman of the Medical Advisory Board of City International Hospital, appreciated efforts of investors of the project in building up a socialized health project that meet regional standards in Vietnam.
“As I used to be the leader of the health industry, our hope was that the overload situation at local hospitals would be reduced. The socialized healthcare model with active participation of investors is a right choice,” Professor Chien said.
Mr Lai Voon Hon, General Director of Hoalam – Shangri-La Healthcare Limited Liability Company, said that this is the first health project with participation of Parkway Health. Within at least 10 years, Parkway Health will not only manage the park following international standards but also join the process of recruitment and training of health care employees to supply high-quality manpower for the hi-tech healthcare industry in Vietnam and regional countries.
“From the day City International Hospital started to take patients, I believe that a healthcare city in the International Hi-tech Healthcare Park has showed up, making contribution to improving the community welfare system in Vietnam,” Hon said.
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