BUSINESS IN BRIEF 4/6 NA backs measures for growth National Assembly (NA) deputies yesterday agreed in principle with socio-economic development solutions proposed by the Government - maintaining macroeconomic stability, accelerating economic restructuring and revamping the current growth model. At the plenary debate in Ha Noi, the lawmakers expressed general agreement with salient features of the Government's report as well as the NA Standing Committee's verification report on socio-economic development in 2013. They also noted progress made in the first months of this year. The lawmakers acknowledged efforts made by ministries and local authorities in ensuring macro-economic stability, easing difficulties for businesses, maintaining security and improving people's lives. Minister of Industry and Trade Vu Huy Hoang informed the session that Hoang said He said talks on the six trade agreements will be tied to the principle of respect and non-interference in Many NA deputies proposed that the Government assesses the potential impacts of the current Most of the deputies expressed their agreement with plans to balance central and local budgets for 2013; and invest more in law enforcement forces at sea including the coast guard, fisheries administration agency and offshore fishermen. The They also pointed out shortcomings in implementing development plans in the first months of this year, stressing the need to increase demand, boost the economy's internal strengths, ensuring social welfare, security, social order and safety, and firmly safeguarding national sovereignty. Voter Do Thi Kim Loan, General Director of Sao Viet Timber Company said the meeting session reflected the voice of voters nationwide, emphasizing the country's determination to protect its sovereignty. She also backed the Government's plan to spend VND16 trillion (US$756 million) supporting fishermen expand their fishing efforts further ashore and to improve the equipment of marine police defending Loan said that while raising the people's voice to demand Voter Pham Thu Hang, a software expert at FPT Joint Stock Company in Ha Noi, agreed, saying that the fight to protect Exporters yet to apply for priority treatment Few Vietnamese exporters have applied for Authorised Economic Operator (AEO) status, which would allow them to benefit from expedited customs procedures. Vice head of Post-Customs Clearance Examination Department under the An exporting enterprise can earn the priority status if it has yearly export value of at least US$200 million. Enterprises specialising in exporting farming products, aquaculture products, textiles or footwear with yearly export value of at least $50 million are also eligible for the title. A hi-tech enterprise recognised by the Ministry of Sciences and Technology can receive the status regardless of export value. So far, 16 enterprises have gained prioritised enterprise status: ten foreign direct investment companies and six domestic ones. Their export value last year was over US$40 billion, accounting for 25 per cent of the total export value of Thu said that while many companies met the criteria, most—especially textile and footwear companies— were not ready to apply for the prioritised status. Foreign enterprises usually had better accounting and internal auditing practices, so they were more prepared to apply. She said that this year, Customs General Administration planned to recognise nine enterprises as prioritised enterprises. It would also review preferential procedures to match with the newly-launched Viet Nam Automated Cargo and Port Consolidated System/Viet Nam Customs Information System (VNACCS/VCIS). Thu suggested that Firms bond to decrease dependence on imports Vietnamese companies were advised at a recent seminar in Speaking at the seminar late last week on "Connecting Material Supply in ASEAN ++" , Pham Ngoc Hung, deputy head of the HCM City Enterprise Association (HEA) said that such co-operation was still weak and that big and small companies should start to work together. To make one product, companies should not have to produce all of the components, and instead should share jobs with each other, he said. Hung said that co-operation among companies would help all of them and would reduce the need to import parts that they cannot produce. Hung and other participants agreed that co-operation was necessary, especially if the country becomes an important player in the ASEAN Economic Community. At the seminar, representatives said that the price of raw materials produced in They said that it was not too late to develop the industry that produces raw materials. Companies should invest in technology, and produce raw materials at cheap prices if they can, representatives said, this would enhance Vietnamese companies' competitiveness. To strengthen co-operation, the HEA suggested several solutions. Hung of HEA said that they needed clear guidance about where they could buy raw materials in "It takes a lot of time and money for companies to find an address selling commodities that they need," he said. Trade promotion activities should also be organised regularly, he said, adding that building confidence in the business community was necessary. Vietnamese producers currently have to rely heavily on imported raw materials, especially in the sectors of garments and textiles, footwear, feed, aquaculture and plastics. This reliance has contributed to a trade deficit with many Asian countries, including SBV plays key role in financial system: forum The State Bank of Recognising the SBV's role in overseeing the financial system, participants at the forum noted that banks and financial companies managed by the SBV made up 90 per cent of the total assets of financial organisations in Central banks around the world are aware of the importance of financial stability, which serves as an essential condition for macroeconomic stability, they said. Affirming the State Bank's role in stabilising the financial system, economist Vu Dinh Anh said it was necessary to create a mechanism to coordinate information on the financial sector, to improve oversight. If all relevant agencies recognised how vital monetary and financial stability was, there would be significant potential for collaboration, he said. Sharing the same view, banking expert Can Van Luc said there was no perfect financial and monetary stabilisation model but that the central bank was playing an increasingly important role. He also emphasised the need to coordinate policy between the State Bank and the relevant ministries, and build a transparent deposit insurance tool in case of a crisis. He also proposed the establishment of an international financial and monetary council with the State Bank as the main actor. Participants also suggested the SBV closely follow the financial system's developments and recommend suitable monetary policies. Quoc Cuong Gia Lai outlines share sale plans to tackle debts Quoc Cuong Gia Lai Joint Stock Company (QCG) has unveiled plans to issue 150 million shares worth VND1.5 trillion (US$71.1 million) this year to help pay its debts, said chairwoman Nguyen Thi Nhu Loan. Loan told a shareholder meeting on Sunday that the company needed to raise funds for on-going projects, including the Phuoc Kien residential development, Ben Van Don project and two hydropower plants. In addition, the capital hike would help alleviate the company's interest payments, said Loan. The real estate company is expected to raise a charter capital between VND1.3 trillion ($61.6 million) to VND2.8 trillion ($132.7 million). Total debts have swollen to nearly VND1.24 trillion ($58.8 million), of which VND136.5 billion ($6.5 million) were convertible bonds from VinaCapital. Loan said the company was in negotiations with lenders over converting the debts into shares at a rate of VND10,000 a share. "The company doesn't necessarily issue shares worth up to VND1 trillion to pay lenders. If existing shareholders want to buy more shares, the company will negotiate with lenders to reduce the number of shares offered to them while increasing shares sold to shareholders," she said. "However, I don't think there are many shareholders willing to pay VND10,000 to buy QCG shares at present," Loan admitted. QCG has recently traded at around VND9,000-10,000 a share. Ending 2013, the real estate developer earned nearly VND973 billion ($46.1 million) in revenue and more than VND6 billion ($284,400) in after-tax profit. The company decided not to set up a provisional fund and will use the profit to cover losses from previous years. QCG has set ambitious business targets for the year, with revenue increasing 150 per cent during last year to VND1.5 trillion ($71 million), while the pre-tax profit goal has been set at VND100 billion ($4.7 million), up 700 per cent from the previous year. $50m footwear factory kicks off A ground-breaking ceremony for the first stage of a plant manufacturing footwear for export was held by King Riches Footwear Viet The plant, which covers an area of 25.39ha with an investment of US$30-50 million, will be operational by May 2015. King Riches, a subsidiary of Kingmaker Footwear Group, opened its first plant at VSIP Binh Duong in 1999. Construction on VSIP Quang Ngai, the fifth of its kind in VN, Romanian city ink co-op pact The central city of Forum to boost VN-Poland business A Poland-Viet Nam Business Forum will be set up in It will include 50 Polish companies from a range of industries like agro-food, finance, ceramic tiles/sanitaryware, environmental protection, IT, mining, real estate, and shipbuilding. Barbara Szymanowska, the Polish ambassador to Retailer wins Independence Order The Saigon Commercial Co-operative Union, or Saigon Co.op, which runs supermarket chains, has been conferred the Independence Order, second class, for its contribution to economic development on the occasion of its 25th anniversary. After 25 years of development, Saigon Co.op has become a leading retailer in The co-opertive now runs 70 Co.opmart supermarkets, 77 Co.op Food stores, 175 Co.op shops, the Co.opXtraPlus Thu Duc hypermarket, a trade centre named VietJet Air receives three new Airbus Leading low-cost airline, VietJet Air welcomed three new aircraft to Tan Son Nhat airport on June 1, bringing the airline’s total number of planes to 15. The new additions are modern airbus A320 aircrafts namely VN-A690, VN-A691 and VN-A692. With the exploitation of the new aircraft, VietJet Air will provide over 37,800 seats per week, meeting passengers’ growing demand for flights this summer. The airline’s bold move also aims to expand its network, increase its number of flights and provide passengers with various options on air routes and flying times. Exports to the It’s worth noting that In the reviewed period, major exports to the UK earning high value include plastics (nearly US$32 million), wood and wooden products (over US$72 million), seafood (US$38 million), coffee (nearly US$39 million), garment and textiles (nearly US$150 million), footwear (over US$160 million), mobile phones and components (over US$440 million). Meanwhile, commodities posting negative growth were means of transport, components, computers, and pepper. Super-jet Boeing 787 Dreamliner premieres in Hanoi All eyes at Noi Bai international airport in The magnificent aircraft has an overall body length of 57 meters, wingspan of 60 meters, and flying range from 14,170 to 15,200 kilometres. It is the third largest wide-body aircraft manufactured by Boeing, after Boeing 747SP and 777-200LR. Japanese All Nippon Airways (ANA) said that as from June 1, the airline will officially utilize the Boeing 787 Dreamliner aircraft for all daily flights between Each day the flight departs Haneda at 8.55am and arrives in US Secretary of Commerce Penny Pritzker began a one-day visit to Pritzker, who is accompanied by leading retail giants including ACE, Qualcomm and Mead Johnson Nutrition, is scheduled to meet with the State President, Prime Minister and Minister of Industry and Trade. US business representatives will hold discussions with the President of the Vietnam Fatherland Front Central Committee and leaders of the Ministry of Finance, Ministry of Planning and Investment, and Vietnam Chamber of Commerce and Industry. Alexander Feldman, President of the US-ASEAN Business Council, said on June 1 that the visit demonstrates the It also reaffirms US businesses’ long-term investment commitment in US businesses seek investment opportunity in Vietnam Representatives of leading The businesses including those operating in insurance, energy and education and training said during their one-day visit, they are scheduled to discuss with government officials and the local business community measures to boost bilateral trade relations and accelerate the Trans-Pacific Partnership (TPP) agreement negotiations. They expected to work with ASEAN governments and business partners, to speed up the establishment of the ASEAN Economic Community (AEC) in 2015 as planned. VFF President Nhan briefed the guests on Nhan and US executives examined The US Secretary of Commerce Penny Pritzker made the remark at a press conference in Ms Penny Pritzker said that 20 years of Vietnam-US normalization has witnessed a significant milestone with two-way trade increasing by 50 times from US$225 million to US$30 billion. Prizker said that The Prizker said that The US official said that this is a wonderful time to strengthen trade ties between the two nations,, when the final TPP negotiation round is expected to take place soon and many US businesses are keen on investing in Vietnam and have committed to their long-term operations in Vietnam and ASEAN countries. Regarding They see great potential in The Ho Chi Minh City People’s Committee and the Economy, Trade and Industry Department of Japan’s Kansai region on June 2 signed a framework agreement on cooperation, under which they will enhance connections in support industry. The two sides will also speed up the establishment of a business environment that can facilitate Kansai enterprises’ investment in the support industry in The city has assigned its management board of industrial and export processing zones to set up a division in charge of connecting ties with Kansai and providing consultations for its enterprises. At a meeting with the Japanese guests earlier, Chairman of the municipal People’s Committee Le Hoang Quan said that Vietnam in general and Ho Chi Minh City in particular, commits to creating all favourable conditions for foreign investors, considering them part of the country’s economy. Toshinori Kobayashi, head of the Kansai department, the region’s businesses, especially those operating in the support industry, are paying much attention to boosting investment in Japanese company confident in More and more Japanese businesses are flocking to Japanese investors have confidence in the country and consider Most Japanese firms understand The Foval Corp CEO predicted that the number of Japanese investors to Okubo also highlighted the role of the Vietnam Chamber of Commerce and Industry (VCCI) and the Japan Chamber of Commerce and Industry (JCCI) in creating a close link among businesses from both countries. HCMC FDI soars Between January and May, A total of 120 new FDI projects were licensed with a combined capital of more than $724 million in the southern economic hub over the first five months, down 8 per cent in project number in comparison to last year’s first five months, but with a very significant value increase. In addition, 40 existing foreign invested enterprises increase their capital by $69 million in the period, putting total FDI inflow to the city at $793 million, up 119 per cent, according to the Ho Chi Minh City Department of Planning and Investment. A report issued by the department on May 26 showed that 9,566 Vietnamese enterprises were licensed in the city with combined capital in dong equal to almost $2.53 billion over the first five months of this year, up 26 per cent. However, the number of enterprises decreased by 2 per cent. Addressing a five-month review meeting on May 26, city chairman Le Hoang Quan remarked that both FDI and local investment flows to the economic hub were positive. He added that in the remaining months of the year, the city would give priority to business loans for agriculture, manufacturing for export, support industry, small and medium-sized enterprises, and hi-tech companies. PM orders tougher management of guest workers in RoK PM Nguyen Tan Dung has tasked inferior levels to work with the The move aims to prevent Vietnamese guest workers from breaking contracts and illegally residing in the RoK. The PM requested the Ministry of Labor, Invalids and Social Affairs (MoLISA) to cooperate with other ministries, agencies and localities to provide adequate information on policies and regulations for guest workers. The MoLISA directs localities and labor export companies to raise the quality of selecting and training for guest workers. Each year, Experts call for fruitful linkages Developing close links between stakeholders involved in fruit production and consumption is one of the measures required to sustainably develop fruit production in the Cuu Long ( The delta, which has conducive climatic and soil conditions for fruits, has more than 466ha of orchards that yield 4.6 million tonnes of fruits annually, accounting for 62 per cent of the country's total output, according to the National Agriculture Extension Centre. The region has in recent years developed zones for growing specialty fruits like Hoa Loc Mango in Dong Thap, dragon fruit in But fruit production and distribution in the region still face many problems, with farmers often hit by falling prices in case of bumper crops, delegates said. Besides, the small scale and scattered nature of farming, huge post-harvest losses, inconsistent quality, unreliable outlets, diseases, and lack of tie-ups with businesses threaten sustainable development, they said. The small scale of production precludes mechanisation and the region is unable to supply large quantities with similar size, colour and quality for exports, they said. According to the Southern Fruit Research Institute, 90 per cent of the region's fruit output is consumed in the domestic market, with only the rest exported, mainly to China. Other markets like the These market have a large demand and offer higher prices, but also have strict hygiene and food safety requirements, it said. To sustainably develop fruit farming, each province should restructure production and link up production and consumption, delegates agreed. Local agricultural extension centres should ensure farmers use good agricultural practice (GAP) standards to add value to their fruits and enable exports to choosy markets, they said. Proper planting techniques should be adopted to control diseases, they said. Nguyen Van Hoa, director of the Southern Fruit Research Institute, said training is needed for human resources, especially those who analyse fruit production and demand. Global fruit demand is expected to continue rising in the coming years, giving the region an opportunity to boost exports, he said. The forum, organised by the National Agriculture Extension Centre, saw nearly 500 policymakers, scientists, business executives, and farmers from the delta take part. Manufacturing continues to rise Overall business conditions in the manufacturing sector strengthened in May amid an ongoing increase in client demand as output increased for the eighth consecutive month amid another solid expansion in new business, according to the HSBC Vietnam Manufacturing PMI report. The report released yesterday said headline seasonally adjusted Purchasing Managers' Index (PMI) - a composite indicator designed to provide a single-figure snapshot of operating conditions in the manufacturing economy - posted 52.5 in May from 53.1 in the previous month. The PMI is based on data compiled from monthly replies to questionnaires sent to purchasing executives in around 400 manufacturing companies. An index reading at 50 indicates a neutral level, above 50, a positive level, and below 50, a negative one. Growth of new orders was recorded for the sixth successive month in May, with the solid rate of expansion only slightly weaker than April's record high. Panellists reported that improving economic conditions had helped to support client demand. New export orders also rose in May, albeit at a slight rate. Higher customer demand led to another rise in production during the month, the eighth time in a row. Some panellists reported that purchase of materials in recent months had enabled them to raise their output. Backlogs decreased modestly following a rise in the previous month. The recent changes to transportation rules again had an effect on the manufacturing sector in May as suppliers' delivery times lengthened to the largest extent in the survey's history as new tonnage rules meant that suppliers had to make more trips to deliver the same amount of goods. The rules also impacted the cost of shipping, in turn pushing the rate of input cost inflation up for the second month running to the fastest since March 2012. Despite the sharp rise in input costs, manufacturers left their output prices largely unchanged during the month. While some panellists reported having passed on higher cost burdens to their clients, others indicated that efforts to stimulate demand had led them to reduce their charges. Employment increased for the second month running in May, though the rate of job creation slowed and was only slight. Higher production requirements led some panellists to raise staffing levels. Increased output requirements also led to a rise in purchasing activity during the month. Input buying has now increased in each of the past nine months, with the rate of growth remaining solid despite easing from that seen in April. Stocks of purchases decreased modestly as inputs were used in the production process. Stocks of finished goods also fell marginally following a rise in the previous month. Commenting on the Vietnam Manufacturing PMI survey, Trinh Nguyen, Asia Economist at HSBC, said: "The latest PMI shows that the manufacturing sector in "The concern really is the added costs to manufacturers, which come at a time when exporters already incur high logistic costs. "Profit margins are being squeezed, as weak domestic demand makes it hard for manufacturers to raise output prices despite rising production costs. "We expect the SBV to keep rates steady to support domestic demand." Experts urge banks to lower cost of lending for local businesses There is a need for banks to cut the lending interest rates further to make bank loans more accessible, and to rethink the implementation of the real interest rate policy. This message was delivered at a workshop held by the State Bank of "Vietnamese enterprises are bearing too high capital costs that reduce their competitive and productive capacities in exports and domestic markets," said Luu Duc Hai at the Development Strategy Institute under the Ministry of Planning and Investment. Although Vietnamese exporters have privileged interest rates between 8 and 10 per cent yearly, the borrowing costs are estimated to be 1.4 to 2 times higher than in some regional countries. The exporters in On the other hand, Vietnamese producers in non-priority sectors are paying between 10 and 13 per cent. This is a big disadvantage if they have to compete with foreign direct investment (FDI) enterprises in the domestic market. The FDI enterprises from the US, Japan, South Korea and Taiwan have to pay only between 1.5 and 4.7 per cent annually to gain financial sources for their business in Viet Nam. Hai said that if the lending interest rates are not cut, it would be hard to score high and achieve sustainable economic growth in the medium and long term. Experts said that a practical implementation of the negative real rate of monetary policy was likely to be the answer. The real interest rate is the rate of interest a depositor or an investor expects to receive after allowing for inflation. It is used to measure the purchasing power of interest receipts and is calculated by adjusting the nominal rate charged by taking inflation into account. Accordingly, a positive real interest rate is a situation when the nominal interest rate is higher than the inflation rate. A negative real interest rate occurs when the nominal interest rate is lower than the inflation rate. Implementing a real interest rate is supposed to balance the interests of depositors or the investors and the credit system. Hai said that using the overall inflation rate to decide the positive real interest rate unnecessarily pushed up deposit interest rates in the banking system. When the inflation rate was still high, maintaining the policy of positive real interest rate would further fuel the growing lending interest rate. This kind of practice would harm enterprises, experts said. Under the current circumstances, experts said a negative real interest rate policy would cut the lending interest rate, and create agreement and sharing among depositors, banks and enterprises. In 2008, The credit growth of The country's consumer price index in May inched up 0.2 per cent against the previous month amid rising supply and low demand, according to the General Statistics Office. Compared with the first five months of 2013, the index rose by 4.72 per cent. Garment, textile sector seeks out new suppliers Garment and textile companies have been actively seeking material suppliers to reduce dependence on imports from Cao Anh Dung, Director of the Ministry of Industry and Trade's Light Industry Department, told reporters at a press briefing in Ha Noi yesterday to review the country's economy in the first five months of the year, that exports of businesses in the light industry including garment and shoes had shown a positive trend. In addition, imports of materials for the garment and textile sector have been normal at the border gates. Statistics from the ministry showed that cloth production from natural fibre in May was estimated at 27.2 million sq.m, reducing 5.4 per cent over the previous month. The total production in the five-month period was 129 million sq.m, posting a 17 per cent year-on-year increase. The sector's export turnover in May was US$1.45 billion, reducing 8 per cent against April. However, total turnover in the first five months of the year was $7.44 billion, up 17 per cent over the same period last year. Deputy General Director of the Viet Nam Garment and Textile Group (Vinatex) Hoang Ve Dung said the raw material market for the garment and textile sector has not been changed much though several companies in the group imported materials from The Viet Nam Garment and Textile Association asked enterprises to actively seek materials from Rice exports increase Phan Van Chinh, Director of the ministry's Import-Export Department, said rice exporters have signed export contracts worth 4.3 million tonnes, an increase of 17 per cent as compared to the same period last year despite the difficulties in the market. By the end of May, rice exports reached 2.7 million tonnes while another 1.6 million tonnes are awaiting shipment. Asked whether the Ministry of Industry and Trade would remove floor prices on rice exports, Chinh said the issue was being discussed with ministries and relevant agencies. The Government has told the ministries of Industry and Trade, and Agriculture and Rural Development, to consider the impact of pilot removal of the floor prices on rice exports and propose appropriate management measures to facilitate export activity. The Viet Nam Food Association (VFA) proposed to allow local firms to export rice to their clients at prices agreed upon by the two sides, instead of the floor prices set by the association. The FOB floor prices set by the VFA are $410 per tonne for 5 per cent broken rice, $375 per tonne for 25 per cent broken rice and $365 per tonne for 35 per cent broken rice. No power tariff rise Speaking further, Deputy Minister Do Thang Hai affirmed that electricity tariff would not be increased in the near future. Instead, the sector would ensure power supply to production and consumption in the summer months. In a recent decision, Prime Minister Nguyen Tan Dung had ruled that electricity retail prices will apply to six price levels instead of the current seven levels. The decision, which will take effect as of June 1, stipulates that power tariffs for households consuming 0 to 50kWh will be 92 per cent of the average price, 95 per cent for households consuming 51 to 100kWh, and 110 per cent for those in 101 to 200kWh bracket. It would be 138 per cent for those consuming 201 to 300kWh, 154 per cent for the 301 to 400kWh bracket and 159 per cent for households consuming more than 401kWh of power. Dinh Van Phuc, Deputy Head of the Electricity Regulatory Authority of Viet Nam (ERAV) said the new calculations did not mean an increase in power tariffs. The average retail price was VND1,508.85 per kWh. The ministry's figures showed that power output in the first five months of the year was 52.42 billion kWh, increasing 11.1 per cent over the corresponding period last year. Ministry urged to hasten support to riot-affected workers Deputy Prime Minister Vu Van Ninh has asked the Ministry of Labour, Invalids and Social Affairs to continue instructing localities to assist workers who had to stop working due to recent social disorders. The workers will receive wages during their days-off between May 12 and July 1, the day before those enterprises are scheduled to resume their normal operation. The payment is equivalent to the wage level agreed upon by affected enterprises and labourers or their representatives, but not below the minimum level prescribed by the Government. The expense used to pay workers would be deducted from corporate income tax later. The disturbances in some localities, including central Ha Tinh and southern Binh Duong and Dong Nai provinces, erupted during workers’ rallies against Some extremists incited others to destroy the property of foreign firms, as well as some national businesses and individuals, and acted against law enforcement officials, disrupting social order and business activities. Authorities have arrested and brought to trial hundreds of rioters. Accordingly, the model on the linkage of farming, processing, distribution and production will be developed for the aquaculture field in order to improve the quality of products, thus meeting requirements and standards for export. Meanwhile, in the field of exploitation, models of offshore fishing teams will be intensified in connection with fishery logistics services. Under the Action Plan for implementing the restructuring issued by the ministry, the sector will also allocate money from its budget to building fishing ports and shelters for fishing boats, and developing concentrated production and farming areas. Particularly, the country accounts for 90 percent of the world tra fish supply, with its products being sold to 149 countries and territories. The European Union, ASEAN, the Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR |
↧
Article 2
↧