BUSINESS IN BRIEF 17/1 Leather, Footwear, Handbag Industry Generates US$10.3 Billion in 2013 Exports of leather, footwear and handbags hit US$10.32 billion in 2013, according to the Vietnam Leather, Footwear, and Handbag Association. This is an increase of 18 percent since 2012, exceeding the total target by 3 percent. Suitcase and handbag exports reached $1.92 billion, an increase of 26 percent. Footwear exports hit $8.4 billion, an increase of 15 percent. These products account for 11 percent of industrial-product exports and 7.7 percent of the country’s total exports. The The General System of Preferences (GSP) of the EU, Trans-Pacific Partnership Agreement and several Free Trade Agreements will reduce tariff on footwear products in 2014. Due to this, the Association set export target at $12 billion. Total forest product exports hit a record high of US $5.3 billion in 2013 with a monthly average of $425-450 million, according to the Ministry of Agriculture and Rural Development. This gives a total increase of 15.24 percent compared to 2012. Exports of forest products were at $227 million. This is a rise of 6.6 percent since 2012, achieving 75.7 percent of the annual target of total exports, according to the Ministry. These products include rattan, bamboo, and sedge. Wood exports were also at a high. Exports to By the end of 2013, the area of new forest is estimated at 213,200 hectares, up 14.5 percent year-on-year, according to the Ministry. The area of protected forest is at 4.2 million hectares, up 52.7 percent year-on-year. By December 2013 The city granted investment licenses to 42 new FDI projects with total pledged capital of US$48.4 million and 17 existing projects with additionally increased capital of US$246 million. Despite global economic fluctuations, FDI businesses in In addition, remarkable progress was also seen in the city’s Official Development Assistance (ODA) capital attraction with 11 ODA valid projects totaling US$697.81 million. LaoVietBank reviews accomplishments in 2013 The Lao-Viet Joint Venture Bank (LVB) on January 15 provided a presentation to its customers and the business community on its activities and accomplishments for 2013. LVB Leaders announced that the total assets of the bank are now valued at US$550 million, up 68%from a year earlier and the bank’s capital mobilization has reached over US$280 million, up 47% while services also surged by 66% from the previous year. Over the past year, LaoVietBank has met the country’s socio-economic development demand for capital and has become one of the four largest commercial banks in The Governments of Vietnam and LVB leaders also announced plans to expand its chartered capital to US$80 million this year and US$100 million by 2015. Last year, apart from developing a modern core banking network, LVB provided an additional ten services and products with new facilities to meet the growing customer demand. LVB has reaffirmed its commitment to fulfilling its tasks, giving a boost to Lao socio-economic development as well as strengthening special solidarity between the two countries. The Kazakh Parliament's Lower House has approved a cooperation agreement aimed at bolstering trade and investment with At a January 15 plenum of the Lower House, Kazakh Minister of Economy and Budget Planning Erbolat Dossaev told parliamentarians that the agreement is comprehensive and addresses the areas of exports, nationalization, and compensation in addition to procedures for setting up an international tribunal for the settlement of disputes. During the first eleven months of 2013, two-way trade turnover between Dossaev suggested oil and gas cooperation between Hundreds of large-scale FDI projects in Large-scale projects include Investment fields of foreigners’ interest are the processing industry, power and water supply, air conditioner production and real estate. The official operation of Idelmitsu Oil & Gas Co, Ltd, under Japan’s Idemitsu Kosan Co, Ltdat the beginning of the new year hasproved that Vietnam is an attractive destination for foreign investors. Idelmitsu Oil & Gas Co, Ltd Director R Yuji Kusakasays that the project’s investment capital comes from A sharp increase in foreign investment has recently accelerated the development in other fields in localities. Hai Phong is a case in point, attracting the most foreign investment. It has secured investment from 400 foreign businesses from ten major groups namely Bridgestone, Nipro Pharma, Fuji Xerox Posco and LG. HaiPhong Municipal People’s Committee Chairman Dan Duc Hiep said that since the Law on Investment took effect, Hai Phong has attracted over US$26 billion from big investors. In 2014 and the following years, the city hopes to make the best of its advantage to attract even more foreign money. In the context of capital shortages, foreign investment is a priority trend to restructure the economy and deal with bad debts and large inventories aiming to establish long-term cooperation between banks and businesses. The MPI said that In addition, poor infrastructure and laborious administrative formalities have made Planning and Investment Minister Bui Quang Vinh stressed the need for At present, the Vietnamese Government has re-built projects with the crucial role of the foreign-invested sector, which will bring changes in economic restructuring, develop enterprises with high environmentally friendly technologies and create competitive products in both international and Vietnamese markets. Foreign investment attraction will help restructure the Vietnamese economy and offer a more competitive environment for Vietnamese businesses. Economists urge that businesses should devise clear strategies and objectives to attract foreign investment based on incentive policies for such fields as high technology, support industries, infrastructure development and the financial market. Shrimp exports projected to rise Shrimp export value this year is expected to reach US$3.5 billion, higher than last year's $3 billion, according to the Vietnam Association of Seafood Exporters and Producers (VASEP). VASEP general secretary Truong Dinh Hoe said last year, the local shrimp industry gained a record high at $3 billion in export value, a similar figure to rice export value and even higher than other farm produce such as coffee, rubber and pepper. However, local shrimp trading firms promoted to sell all kinds of shrimp to China because the market imported all while traditional export markets such as the US, the EU and Japan had strict standards for Vietnamese shrimp export products, Hoe said. He said Le Van Quang, general director of the Minh Phu Seafood Joint Stock Company, said the state should have solutions on controlling closely quality of shrimp to avoid a situation that shrimp exports have been sent back because some firms have infected impurities to shrimp for export, according to the Cong Thuong (Trade and Industry) newspaper. Pham Amh Tuan, deputy head of the Fisheries Department under the Ministry of Agriculture and Rural Development, said this year, the ministry would promote control of quality of export shrimp to avoid bad effects on this key export product. The local enterprises should meet demand on quality standards for shrimp export products in key markets of the EU, US and The shrimp industry in other countries including China and Thailand needs two years to recover after the Early Mortality Syndrome (EMS) that is an emerging disease caused by bacteria. So, local firms should get good chance to increase shrimp exports this year, Tuan said. Meanwhile, the southernmost Ly Van Thuan, General Director of the Ca Mau Seafood Processors' Association, said several measures will be taken to achieve the target, which represents a year-on-year rise of 10 per cent. These include increasing shrimp production to 250,000 tonnes, meeting 50 per cent of the processing demand, expanding export markets through trade promotion activities, and providing policy support to make aquaculture a spearhead sector in the province. Local officials have said trade promotion activities will focus on major markets like the The province also plans to participate in regional and international fairs to boost aquaculture exports, and enhance co-operation with other localities as well as foreign partners. RoK businesses satisfied with Ha Nam A delegation of businesses from the At the meeting, the RoK Embassy to The provincial authorities have strictly implemented their commitment to facilitate operations of RoK enterprises, he added, saying that his compatriots are extremely grateful for this support, especially in the provision of premises, construction and manpower recruitment. For his part, Chairman of the provincial People’s Committee Mai Tien Dung pledged to create favourable conditions for foreign investors, especially the RoK businesses. The province would improve local infrastructure and offer priority policies to promote foreign investment, Dung noted. PM Dung calls on oil and gas group to accelerate restructuring The Vietnam National Oil and Gas Group (PVN) has been asked to speed up restructuring to become a leading economic group capable of competing with regional and international companies. Prime Minister Nguyen Tan Dung made the request at the PVN Conference in He said the Group should focus on intensifying oil and gas exploitation and exploration to contribute to ensuring national energy security, economic growth and affirm national sovereignty. PM Nguyen Tan Dung gives a speech at the conference. PM Dung applauded the oil and gas sector’s significant contributions to the country’s socio-economic development as well as state budget revenue and national energy security. PVN needs to deal with existing weaknesses and boost restructuring to improve its operational efficiency and competitiveness, said PM Dung. He also asked the economic group to resolutely withdraw investments from non-core business and continue to improve the quality of its staff as well as administrative capacity. Last year, PVN’s targets, key projects and tasks assigned by the Government were fulfilled on time or ahead of schedule and its contribution to the State budget exceeded US$2.22 billion. The Prime Minister presented the Independence Order (third class) to the Vietnam Petroleum Institute and the Labour Order to outstanding PVN employees and departments for their contributions to the oil and gas sector’s development. Hydropower company urged to intensify investment The Da Nhim-Ham Thuan-Da Mi Hydropower Joint Stock Company (DHD) should increase investment and expand the scale of its Da Nhim plant. Deputy Prime Minister Hoang Trung Hai was speaking at a ceremony to present Da Nhim Hydropower plant with the Labour Order (second class) in Hai asked the joint stock company to manage its hydropower plants, participate in the competitive electric market, and raise the electricity supply per capita from the current 1,400kWh per year to 8,000-10,000 kWh per year. DHD was also asked to work with Lam Dong and Binh Thuan local authorities to strictly ensure the safety for the plants and lowland areas during the flood season. Established in 1961, Da Nhim plant is one of the first hydropower projects in According to DHD General Director Nguyen Trong Oanh, the project to expand Da Nhim plant has been added to the National Master Plant for Power Development in the 2011- 2020 period. In December 2013, the Japanese and Vietnamese governments signed notes of exchange for ODA projects, which will increase its total Da Nhim plant capacity to 240MW. The Lao National Assembly (NA) held a seminar in Delegates heard reports from high-level Vietnamese experts on businesses’ operations, development orientations for small and medium-sized enterprises (SMEs) and plans to restructure the economy in The aim of the seminar was to help Lao NA leaders highlighted The city also aims for a 10% import-export growth, earning US$29,230 million in revenue. Deputy Director of the HCM City Department for Industry and Trade Le Ngoc Dao said to achieve the target, the economic focus will be on boosting the export of processed industrial products with high added value, reducing the import of luxurious products, as well as encouraging the purchase of machines and equipment for production and business operation. Phan Thi Thanh Minh, Ministry of Industry and Trade (MoIT)’s Southern Operation Department Head said in 2013 the industry and trade sector recorded remarkable achievements despite numerous economic difficulties. As a spearhead for national economic development, Minh also suggested providing more support for local producers and exporters to ease business difficulties. MoF launches tax management scheme From February 5, enterprises can negotiate and reach agreements with tax authorities over the taxable prices of their goods or services, according to a newly-released circular by the Finance Ministry on the implementation of the Advance Pricing Agreement. Under the amended Tax Administration Law, which came into effect last July, the Advance Pricing Agreement (APA) is a binding and written agreement between the tax authority and taxpayers for a period of time with respect to the determination of the ‘basis for tax' calculation, the transfer pricing method and the application of the arm's length principle for transfer pricing. The APA will be issued before taxpayers submit their tax declaration documents. In other words, under an APA, enterprises will have to pay a fixed amount of tax, regardless of whether they make a profit or loss on their operations. That is because, under an APA, the price and quantity of the goods are already agreed to by the tax payer and the tax authority. The tax is calculated on that price and quantity, not on the annual business operations of the firm. According to the ministry, the implementation of the APA will improve tax management, reduce the costs of tax compliance and reduce conflicts in determining market prices for business activities that generate profits for enterprises to meet their obligations of corporate income tax. The APA is also expected to help in the fight against fraudulent transfer pricing. Under Circular 201/2013/TT-BCT, an APA can be unilateral, bilateral or multilateral. In particular, when a taxpayer requests an APA for a transfer pricing method or a price based on arm's length pricing for related-party transactions, such a request will be based on an agreement between the tax authority and the taxpayer on a unilateral, bilateral or multilateral basis. That means the agreement can be between a Vietnamese tax authority, the taxpayer and the tax authorities of relevant countries or territories. An APA can be enforced for up to five years, and can be extended for a maximum of another five years. Nguyen Quang Tien, director of the Tax Reform and Modernisation Department under the ministry's General Department of Taxation, told the Hai quan (Customs) newspaper that the APA mechanism is expected to become an effective tool for tax authorities to collect taxes and prevent fraudulent transfer pricing by enterprises. "It will also make enterprises more careful while drawing up business plans and fulfilling their tax obligations," he said, adding that when applying for an APA, corporate taxpayers need to provide information and evidence to help the tax authority assess a company's method of arriving at a proposed market price. The tax authority has the right to accept or refuse the applications, he pointed out. As quoted in Thoi bao Kinh Doanh (Business Times), deputy general director of Ernst&Young Viet Nam and member of the Viet Nam Tax Consultants' Association Vu Thi Lan Huong said the APA provides a way to simplify tax administration, help the government receive stable income and increase the compliance of companies by ensuring that transfer pricing audits are avoided during the duration of the APA. The APA will help enterprises reduce some risks that affect their profit, such as paying arrears or fines if they were found to have violated tax regulations, she added. Bui Ngoc Tuan, deputy general director of Deloitte Viet However, he expressed worries about the application of the APA in For instance, he said, customs officials tend to prefer highly taxed imported goods because that increases their tax collections, but it also leads to lower corporate income tax. "If the products are sold in Association to support young entrepreneurs With the economy expected to remain sluggish this year, the HCM City Young Businesspeople Association will take action to help member companies stay afloat. Speaking at its year-end meeting held on Tuesday in In addition, activities will be organised to enhance linkages and improve mutual support among members, he said, adding that special events would be held to mark the 20th anniversary of YBA's establishment this year. Last year, the association's executive board worked closely with members to help them stabilise production and trade, resulting in a number of achievements. In addition, many practical programmes were organised, including the Last year, members contributed more than VND1 billion (US$47,619) to social and charitable activities. At the meeting, YBA admitted 28 new members, with the total number now reaching 800. New decree targets reduction of cash payments From March 1 State enterprises will have to switch to non-cash payments as stipulated by a Government decree issued in December. Organisations and individuals using public funds will be prohibited from making payments in cash unless permitted or required by the Ministry of Finance and the State Bank of Non-cash payments will become the norm also for securities transactions on the stock exchanges as well as outside of the trading system. Cash will not be permitted to be used for any financial transaction including capital contribution, sale and purchase of shares, and lending and borrowing between enterprises. The new decree also requires credit institutions seeking to disburse cash to borrowers to do so in accordance with State Bank of The issuance of the decree is part of the Government's ongoing efforts to popularise non-cash payments. The non-cash payment project (or Project 291), launched in 2006 by the central bank and related ministries and agencies, has so far yielded encouraging results. The central bank has established a modern inter – bank electronic payments system linking all 63 provinces and cities that can meet the gradually increasing requirements of the economy. Most banks have established core banking systems and internal payment systems based on advanced technologies. As a result, non-cash payment through banks has become rapid, secure, and accurate. Banks have focused on non-cash payments through electronic means of payment and payment via cards and online, which are constantly expanding, enabling e-commerce development. According to official data, employees of most state agencies receive their salaries through bank accounts. This is a sector considered as a model for boosting non-cash payments. This is also a key way of improving the quality of bank payment services, thereby reducing cash flows in the market and saving costs and reducing risks. However, in spite of the encouraging results, the development of Project 291 has remained slow and beset by difficulties: Technical infrastructure remains at development process; ATMs are mainly used to draw cash; other types of money transfers are mainly done through the banking system; points of sales are not well developed. In the public sector, a large portion of transactions between firms are still done in cash. Even in cities, where there are favourable factors enabling non-cash transactions at places like supermarkets, malls, and elsewhere, the use of cash remains very popular because of people's habit and psychology. Project 291 envisages that by 2015 the proportion of cash transactions in the economy will fall to less than 11 per cent, and the proportion of people with bank accounts will increase to 35-40 per cent of the population. Clearly, the Government and banks need to make greater efforts to remove the obstacles to achieving the targets Quang Ngai IZs seek investment The central Doan Tan Hau, head of the Quang Ngai Industrial Zone Management Board, said investment priority would be given to projects that are more aligned with the province's socio-economic development plans. He also said the province's Quang Phu and Tinh Phong IZs have targeted a combined industrial production value of VND2.9 trillion and exports of $40 million this year. Last year, the two industrial zones attracted 11 projects with a total registered capital of VND890 billion ($42.38 million). The province's industrial production value in the two IZs last year reached VND2.71 trillion ($129 million). They earned revenues of VND6.7 trillion ($319 million) of which exports accounted for $29 million. Vietcombank unveils online fees The Joint Stock Commercial Bank for Foreign Trade of Viet Nam (Vietcombank) has revised its transaction fees and transaction limits for online money transfers. From January 15, individuals and organisations will be charged VND3,300 (US$0.15) for each online transaction with other Vietcombank account holders. The fee for an inter-bank transaction remains unchanged at VND11,000 ($0.52). Individuals and organizations will also be permitted to transfer a maximum of VND300 million (nearly $14,290) per day to Vietcombank account holders and a maximum of VND100 million ($4,760) per day to account holders in other banks. Earlier, the transfer of money between individual Vietcombank account holders was free, while organizations were charged VND11,000 per transaction. The previous limit on transactions between Vietcombank account holders, as well as between Vietcombank account holders and other bank account holders was VND100 million. Ca Mau targets $1.1 billion in fisheries export The southernmost Ly Van Thuan, General Director of the Ca Mau Seafood Processors' Association, said several measures will be taken to achieve the target, which represents a year-on-year rise of 10 per cent. These include increasing shrimp production to 250,000 tons, meeting 50 per cent of the processing demand, expanding export markets through trade promotion activities, and providing policy support to make aquaculture a spearhead sector in the province. Local officials have said trade promotion activities will focus on major markets like the The province also plans to participate in regional and international fairs to boost aquaculture exports, and enhance co-operation with other localities as well as foreign partners. Over VND4 trillion to upgrade Central Region road The Transport Ministry and Central Highlands Lam Dong Province People's Committee kicked off a project yesterday to upgrade part of National Highway 20 running through the province. The project is expected to cost over VND4.1 trillion ($195 million), including VND1.4 trillion from build-operate-transfer contracts and over VND2.7 trillion from build-transfer contracts. The road is a key route that connects Officials noted that the road has been seriously degraded in recent years. More than 127,000 businesses in the economic hub of Ho Chi Minh filed and paid their taxes online in 2013, accounting for 91 percent of all enterprises in the city, according to the municipal taxation department. The municipal taxation department has enhanced customer support to improve the service’s efficiency. The department reported that the city contributed 167.65 trillion VND (7.88 billion USD) to the state budget in 2013, or 106.93 percent of year’s plan and up 11.83 percent against the previous year. However, the city posted tax arrears of 17.3 trillion VND (831 million USD) last year, of which the recoverable debts were over 13 trillion VND (611 million USD); debts claimed to be adjusted valued were 1.2 trillion VND (56.4 million USD); and bad debts were 143 billion VND (6.7 billion USD). In 2013, the tax department inspected 54,000 businesses with tax violation signs and collected 13 trillion VND from them. The department also worked with other 230 businesses on their exaggerated losses and collected 2.3 trillion VND of tax. More than 100 leading Vietnamese and foreign suppliers of food ingredients are expected to take part in an exhibition in May. The first Food Ingredients Vietnam will showcase raw materials and additives and chemicals used in the food industry, including in dairy, confectionery, beverage, and foodstuffs, according to Rungphech Chitanuwat, business development director of exhibition company UBM Asia ( There will be seminars on macro trends and market perspectives during the three-day event. The exhibition is scheduled to take place from May 21 to 23 at the Saigon Exhibition and Convention Center in District 7. An Giang targets 4 mln tonnes of quality rice The Mekong Delta To realise the goal, the sector will implement crop restructuring, while encouraging farmers to use high-quality seed to reach an output of 1.77 million tonnes of rice in the winter-spring harvest, up 21,000 tonnes over the same period last year. Meanwhile, farmland areas in the summer-autumn and autumn-winter crops will be reduced by 1,300 ha and 11,470 ha respectively because the two harvests usually meet unfavourable weather conditions. The provincial authorities also urged the sector to broaden new cultivation models such as developing the growing of vegetables in Cho Moi and An Phu districts and the cultivation of sticky rice in Phu Tan district. In addition, the province also enlarged cultivation in line with the Global Good Agricultural Practices (GolobalGAP) standard to reduce the price of products, meet the increasing demand of the market and improve income for local farmers. Investment by businesses from Statistics from the Tien Giang Province Department of Planning and Investment indicated that The projects covering industry, agriculture, tourism, information, communications, health, education and science-technology have proved effective, the Department said. It added that Tien Giang is realising solutions to further enhance its collaboration with Ho Chi Minh City by taking advantage of both localities’ potentials to facilitate future provincial economic growth. Apart from luring investment, the province plans to promote information and dialogue exchanges between local authorities and businesses and investors from the southern economic hub to address any difficulties in the field. About 70km from Agricultural sector gradually improves added value Despite the negative impacts of the world economy, the agricultural sector posted a GDP growth of 6.27 percent and an export turnover of 27.5 billion USD in 2013. These are joyful signals for the sector in the path of increasing farm produce sales by raising added value step by step. Looking back on the year 2013, the sector faced a host of challenges, especially in selling agricultural products. In addition, low investment, high interest rates and input costs also hindered its development. The farming sector has yet to see sustainable development, as measures for farm produce have predominantly been short-term fixes, stated Minister of Agriculture and Rural Development Cao Duc Phat at a recent conference to review the sector’s 2013 performance. However, it still maintained growth equivalent to that of the previous year, contributing to the country’s progress, inflation control, social security and new rural development, he said. He also expressed his belief that the sector will continue to enjoy significant growth in the time to come as its restructuring drive is being implemented in all areas. In order to remove difficulties for agricultural businesses and farmers, Phat said that the Government has recently issued policies to support production and sale, strictly prevent smuggling, and enhance the control and prevention of diseases. Together with policies supporting the scientific and technological application, the Government is also developing the processing of agro-forestry and seafood products and reducing post-harvest losses, he said. The State Bank of Regarding the new rural development, Minister Phat said that the Party, National Assembly and Government has focused resources on speeding up a national target programme in this area, with a view to changing the outlook of the rural areas. By the end of 2013, an impressive 93 percent of communes completed their new rural planning while 7,995 out of 9,084 communes approved projects on new rural building. Total social investment mobilised for the programme reached nearly 41.4 trillion VND (1.97 billion USD). Many localities such as Tuyen Quang, Quang Ninh, Thai Nguyen and Ha Tinh have applied good policies in mobilising resources for this campaign. Through the programme, more than 7,000 production models have been launched, contributing to improving production efficiency and rural residents’ incomes, said the minister. Quality improvement needed to exploit In addition, a Vietnam-RoK free trade agreement is also expected to be signed this year. In 2013, exports of agricultural products to However, many batches of exported seafood have been sent back from Currently, Only a few fruits from Meanwhile, 2013: State budget revenue exceeds target Despite difficult economic circumstances both at home and abroad, In September, the state budget revenue had reached only 66.6 percent of its annual target, nearly 9 percent lower than expected by that time of the year, the Finance Ministry revealed. To tackle the risk of budget revenue failure, the ministry closely collaborated with other ministries and local authorities to work out breakthrough solutions, said Minister Dung. The financial industry has implemented drastic measures to combat tax losses, solving tax arrears and fixing tax refund activities. By the end of 2013, the industry inspected 60,273 businesses and collected over 13 trillion VND. The tax authority also fetched a little over 25 trillion VND from tax arrears, accounting for 52 percent of total tax arrears by the year end. Dung also noted that his ministry had tightened its inspectorate works and applied strict punishments for tax collectors and customs officials who broke the rules on tax refunds, added value tax, and tax evasion. Economic restructuring to be accelerated this year The Government has committed to undertaking economic restructuring in 2014, focusing on investment, credit organisations, the financial market, State-owned enterprises (SOEs), agriculture and rural areas, and industry and service. The Government Portal said on January 15 that under Government’s Resolution 01 on major solutions guiding and directing the realisation of the plan on socio-economic development and State budget estimate in 2014, ministries, agencies, localities, and SOEs were asked to implement the Master Scheme on Economic Restructuring and Prime Minister’s Directive 11 on a number of tasks to be performed during 2013-2015 to realise the master scheme. The Ministry of Planning and Investment (MPI) is in charge of finalising the draft law on public investment and tightening the management of State budget-sourced projects, Government bonds, ODA capital, SOEs as well as Government-guaranteed loans. State budget and Government bonds would be prioritised for important and urgent projects, used as corresponding capital to ODA projects, cover site clearance and the building of new rural areas, and support programmes to respond to climate change (SP-RCC), and PPP projects. The State Bank of Vietnam (SBV) takes the prime responsibilities for restructuring credit organisations, especially weak commercial banks, and submitting a mechanism to enable credit organisations' mergers. The SBV will strengthen supervision and investigation into the safety of the system while handling overlapping ownership in the areas of banking, security, insurance and gold business. Meanwhile, the Ministry of Finance (MoF) will work with the SBV and other ministries, agencies and localities to develop the capital market and security market. The MoF is in charge of categorising, investigating and restructuring security business organisations and imposing tough punishments on infringements. The MoF, the MPI, and the Steering Committee for Enterprise Reform and Development will assume the prime responsibilities for realising the approved project on enterprise restructuring. Some economic groups and State general corporations will be re-organised. The processes of equitisation, divesting, and selling and reduction of capital in those SOEs which the State does not need to own controlling interests should be sped up. In addition, SOEs shall be put under stricter supervision and management. The Ministry of Agriculture and Rural Development is in charge of fulfilling the project on agricultural restructuring towards higher value-added production and sustainable growth. In addition, the whole society would be mobilised to fruitfully realise the programme on building of new-style rural areas. Accordingly, a string of preferential policies on agriculture and rural area development would be conducted. The Government also encourages investment in labour-intensive sectors, agro-processing and preservation industries, handicrafts and service. The Ministry of Industry and Trade will cooperate with the Ministry of Science and Technology to accelerate the restructuring of processing and manufacturing industries and the deeper participation into the global value chains. Meanwhile, economic components are encouraged to develop high-tech, value-added, and export-oriented industries, auxiliary industries, and processing industries of agro-forestry and fishery products. The overall strategy on service development shall develop potential, advantageous and value-added service sectors like tourism, telecom, transport, logistics, finance and banking. DATC acquires 82 million USD of business debts The Debt and Asset Trading Corporation (DATC) signed 15 contracts to buy debts valued at nearly 1.8 trillion VND (81.82 million USD) in 2013, the Ministry of Finance announced the figure at a meeting in Last year, the corporation's total revenue was 530 billion VND (24.09 million USD), including that from debt trading activities of more than 326 billion VND (14.82 million USD). It focused on negotiations with commercial banks to buy bad debts of mainly State-owned groups and corporations, and restructured five State-owned enterprises into joint-stock companies. This year, DATC is targeting the restructuring of 20 businesses, including restructuring the debts of 12 enterprises that converted from 100 percent State ownership to joint stock companies. In addition, the Government-owned entity recently said it is necessary to increase its scale of operations and capital, as well as reconsider its business model. In particular, it expects to become the main national entity under government management responsible for dealing with bad debts, according to Thoi bao Kinh Te Sai Gon (The Saigon Economic Times). The corporation is also seeking permission to increase its chartered capital and the right to issue government-guaranteed bonds that will be used to buy debts from credit institutions. It has also mentioned the necessity of establishing some joint stock companies in which it hopes to hold shares ranging between 36 percent and 49 percent. The joint-stock companies are expected to have a total charter capital of 2 trillion VND (90.9 million USD). The expectation is that these companies will help attract more capital from different financial sources, which would help the process of settling bad debts. Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR |
↧
Article 0
↧