BUSINESS IN BRIEF 3/7 JICA funds VND2,500 bil expressway project Vietnam Express Corporation on June 30 clinched a VND2.500 billion deal with Sumitomo Mitsui and Civil Engineering Construction Corporation to complete major sections of the Ben Luc-Long Thanh Expressway. The expressway project, creating a direct link between Hiep Phuoc, Thi Vai-Cai Mep port system, and Long Thanh international airport, is sourced by the Japan International Cooperation Agency (JICA). Additionally, the expressway will connect to HCM City-Vung Tau highway and integrate into the southern economic corridor under the Greater Mekong sub-region (GMS) from The Ben Luc-Long Thanh Expressway Project is of great significance for promoting socio-economic development in the southern key economic region, especially in the south-eastern region, exploring advantages, attracting investment and tourism in HCM City, and southern Long An and Dong Nai provinces. Japan Desk debuts in Ba Ria-Vung Tau The People's Committee of Ba Ria-Vung Tau province on July 1 announced the establishment of a Japan Desk with the aim of intensifying Japanese investment. The working team’s tasks will be focused on enhancing coordination between local authorities in solving difficulties facing Japanese investors in In his speech, Provincial People’s Committee Vice Chairman Ho Van Nien commended Japanese investors’ contributions to boosting the province’s socio-economic development through large-scale projects which brought high-quality products to domestic and foreign markets. To become an industrial province and international transshipment port in the future, a score of measures have been taken to lure more investment from So far, the province has had 290 foreign direct investment (FDI) projects capitalized at over US$26 billion including US$1.9 billion from 19 Japan-invested projects. Satoshi Nakajima, Japanese Consul General to HCMCity described A Memorandum of Understanding (MoU) between the province and Japan-based Mizuho Bank was also signed under which a support mechanism for Japanese businesses which are investing and plan to invest in Ba Ria-Vung Tau will be fine-tuned as a contribution to promoting The project will construct a 151 km long gas pipeline, connecting Bach Ho oil rig to Dai Hung and Thien Ung oil fields. “This is a great and urgent project, ensuring national energy security and meeting the needs for the country,” said CEO of PV Gas Do Khang Ninh. Cathay United Bank President Chen Tsu Pei said he is confident that the two sides will establish a solid and mutually beneficial relationship. United vision for agricultural investment needed Most leading political and financial leaders consider the mechanism of the public-private partnership (PPP) as the best alternative for attracting investment to upgrade the nation’s agricultural infrastructure. However, there is general consensus by these same leaders that PPP development throughout the country is deficient, lacking in the necessary coordination and united oversight needed to insure successful nationwide implementation. Speaking at a conference on July 1 addressing the national effort to implement the PPP model, Central Institute for Economic Management (CIEM) Vice Director Vo Tri Thanh said policies to buttress their development and specific targets to be more fully clarified. In the agricultural PPP model the State plays a key role and assumes substantial financial, technical and operational risk in the project and this is a key benefit that farmers need to be aware of and take full advantage of, he said. Deputy Minister of Planning and Investment Dang Duy Dong in turn echoed Thanh’s views honing in on the harmonious benefits of risk sharing among PPP participating sides. Farmers’ benefits must be clarified and better popularized and the Government’s efforts optimally coordinated to facilitate participating sides’ operations, he said. Dinicola Natalie from Monsanto Group said the Government and related partiesmust devise a more comprehensive and united vision with a more detailed roadmap delineating the role of each side. For its part, Monsanto Group voiced its high appreciation for the State’s efforts in issuing new policies promoting scientific and technological development and cooperation in agriculture. Monsanto is successfully carrying out PPP projects in the Mekong Delta region, for which Monsanto supplies high-quality rice seed, and updates advanced technology and infrastructure for farmers. Australian and Vietnamese officials have held that short-term difficulties caused by tensions in the This view was shared by an Australian government delegation while working with officials of the Party Central Committee’s Commission for Economic Affairs in Party Central Committee’s Commission for Economic Affairs Vice Chairman Nguyen Ngoc Bao briefed the Australian delegates on The country is focusing on economic renewal such as restructuring public investment, State-owned enterprises (SoEs) and the banking system, finalizing the socialism-oriented market mechanism; and equipping people with first-rate skills. Vietnamese officials will work with authorized agencies to boost economic ties between The Australian delegation headed by Keith Scott – Assistant Secretary of the Southeast Asia Mainland Bilateral Branch under the Ministry of Foreign Affairs and Trade also hailed Vietnam’s remarkable economic accomplishments. The both sides shared their view on current hardships ignited by the East Sea developments and agreed that such a situation also give Australia an opportunity to increase its presence in the Vietnamese market. HSBC: According to the Hong Kong-Shanghai Bank Corporation (HSBC), The purchasing managers’ index (PMI) fell slightly to 52.3 from 52.5 in the previous month. New orders rose for the seventh successive month at a solid rate, but slowed for the second month running. Customer demand was improved, while export orders eased albeit moderately. The rate of job creation remained marginal. Some companies had to increase the number of workers as a result of a rise in new orders. A conference discussing measures to promote forestry-agriculture links between the capital cities of During the event, In particular, the two sides will work closely together to build a master plan for agriculture-forestry development in The two sides pledged to work as a bridge to connect the two countries’ businesses operating in the field of agriculture, forestry and aquaculture. Bac Ninh hopes to lure Samsung US$1 bil project The People’s Committee of northern Bac Ninh province is considering pouring VND298 billion into infrastructure at the Yen Phong Industrial Park (IP) in an attempt to entice Samsung Display to build a US$1 billion plant there. Additionally, the Committee asked the provincial Council to reduce the corporate income tax for Samsung by 50% over the next three years and to support training costs for 8.000 local workers at a total cost of VND12 billion. The Samsung Display’s project in Yen Phong IP will contribute to perfecting the Samsung Hi-Tech Complex, speeding up the development of electronics and telecoms sector and turning Bac Ninh into Samsung Group’s global production destination. The project will help promote the good images of the investment environment and improve Bac Ninh’s competitive capacity. Tien Giang export turnover aims for US$1.3 bil in 2015 The Mekong Delta The province is expected to fetch US$1.17 billion in export value by the end of this year, and US$1.3 billion in the year to come. Local key export items included rice, tra fish, fruit and vegetables. The province is offering incentive policies for local exporters, especially those engaging in seafood industry. To boost rice, fruit and vegetable exports, Tien Giang is promoting modern technology application, creating a close link between producers and exporters, as well as product value chains. According to recent statistics, the province has exported its products to 136 countries and territories, including such large markets as the It is forecast to get more profit from leather and footwear products thanks to preferential tariffs provided by major importers like the Many advantages from the Trans-Pacific Partnership (TPP) agreement, which is currently under negotiation, will also help Tien Giang garment and textile products achieve greater penetration of Japanese and US markets. Cashew nut exporters need more support The Vietnam Cashew Association (Vinacas) has called for commercial banks to lower interest rates for local cashew nut exporters in a bid to stimulate lending to revamp the industry and increase competitiveness. Vinacas Vice Chairman Dang Hoang Giang says that since 2006 At present, however, the industry is operating at only 50% of capacity, he said, adding that it is also overly dependent on imports which increase costs, putting immense pressure on profits and cash flow. “The industry additionally is suffering from ills such as low added value, small scale of production, and lack of cash due to difficulties in accessing bank loans,” Giang said. In the first half of 2014, The annual target for exports for 2014 is US$2-2.2 billion and by 2020 the country aims to export US$2.5 billion annually. To achieve the export target of US$2.5 billion, it is essential for business in the industry to have ready access to cash provided by bank loans. The industry needs to be revamped and cash is needed to overcome the obstacles and meet the growing demand for cashew production, purchase and processing, he said. Currently, the M&A property deals on upward trend Merger and acquisition (M&A) deals in the real estate market are on the rise. Economic experts were quoted by the Vietnam Business Forum Magazine (VBF) as saying that the prolonged lacklustre property market had provided plenty of M&A opportunities for companies with strong financial resources. The sharp increase in M&A property deals during market recovery has reflected the strong pull of the real estate market. Opportunities are in the hands of companies with strong financial capacities, according to VBF. The National Housing Organisation (NHO), a joint venture between TAG Joint Stock Company and NIBC Investment Company Limited, invested nearly 1 billion USD, an equivalent to 21 trillion VND, to control many property projects owned by various companies in major cities and provinces like Licogi 16 Joint Stock Company also transferred its Sky Park Residence Project in Phan Xuan Can, President of Soho Vietnam Real Estate Consulting Company, said, in spite of still being in difficulty, property transfers have never been ever eventful as now, especially when the real estate market has shown signs of recovery. Many companies with strong financial bases have rushed to take over projects at the most reasonable values. According to experts, together with the revival of the property market, deals have started to increase and market liquidity has gradually improved. Many people have become more interested in real estate projects while owners have ended their stop-loss sales. Hence, many companies envisaged the solid recovery of the property market and they rushed to acquire investment projects. Investors are offered projects with very attractive prices. They do not have to conduct time-consuming paperwork and deal with complicated troubles arising from land clearance and compensation. Instead, they can start doing business immediately. However, transfers are not always easy because new owners have to spend much time and effort to contact and connect old partners and build up the trust with them to continue their projects smoothly. They also have to review all customers to have satisfactory explanations to continue fundraising activities and property handovers in the future. Marc Townsend, Managing Director of CBRE Vietnam, said M&A is not actually the solution to deal with inventories but it is a good opportunity for businesses to perform restructuring, continue their projects and even develop new ones. "Not all M&As are successful. Buyers have many options and they only pick up good ones. Besides, price is sometimes not the deciding factor but the similarity of development orientations between buyers and sellers. Indeed, M&As depend on many factors like price, location, legality and insider sentiment,” he stressed. According to economists, M&As have helped the market to remove ailing businesses and make experienced, strong businesses more powerful. This benefits the real estate market and homebuyers in the long term, and strengthens market stability. Ho Chi Minh City looks for investment from Belgium A delegation from During the visit, which runs from June 28 to July 3, the delegation led by Chairman of the municipal People’s Committee Le Hoang Quan, met with Belgian businesses and organisation to discuss potential bilateral cooperation projects using Chairman Quan said the He added that The chairman also highlighted the potential for cooperation between the city and Belgian localities, adding that it is necessary to create favourable conditions for their businesses and locals to visit On June 28, the Chairman joined a gala dinner held by the Belgium-Vietnam Friendship Association (BVA) to mark its 3 rd founding anniversary. He took this occasion to brief the host about He called on the international community to raise their voice together with Central Highlands reviews socio-economic situation Minister of Public Security Tran Dai Quang presided over a meeting held in Gia Lai province on June 28, reviewing the implementation of socio-economic development goals set for the Quang, who is also head of the Central Highlands Steering Committee, highlighted the socio-economic outcomes the region reaped in the reviewed period and asked regional provinces to make more efforts to realize next tasks. He suggested the provinces step up the checking of the implementation of an infrastructure development plan approved by the Ministry of Transport and realising a credit support package soon, with the aim of further boosting the regional socio-economic growth. The region’s Gross Domestic Droduct (GDP) posted an increase of 10.3 percent, while its industrial production value rose by 12.6 percent and its State budget collection was up 6.7 percent year-on-year, equivalent to 46 percent of the year’s plan. A 553km section of the To date, ground clearance for key projects has been completed and the execution of the work has started. In the time ahead, efforts should be exerted to support locals living near hydropower plants to stabilise their production activities and life. The Central Highlands includes the provinces of Gia Lai, Kon Tum, Dak Lak, Dak Nong and Lam Dong.- Vietnam publicises business opportunities in Romania Investment and business opportunities in Attending the event on June 24 were President of the Galati County Council Nicolae Dobrovici Bacalabasa, Galati County Prefect Dorin Otrocol, Mayor of Galati Marius Stan, and business executives. Ambassador Tran Xuan Thuy provided an overview on He was supported by Trade Councillor Le Ngoc Thi, who elaborated on economic relations between the two countries as well as cooperation prospects. At the workshop, the Romanian side spoke highly of Otrocol suggested more information exchange and twinning Statistics from the Romanian Ministry of Economy show that two-way trade reached 123.1 million USD in 2013. Of that sum, Key Vietnamese exports included coffee, electronic devices, frozen aquatic products, footwear and garments. Meanwhile, main imports were electronic and plastic products, steel materials, and chemicals. Representatives from 20 member economies shared the view that the trade and use of minerals have been crucial to regional socio-economic development, resulting in better infrastructure and narrower wealth gap. As part of the APEC meeting themed “Shaping the future through Asia-Pacific partnership”, the two-day event will focus its discussion on closer mining cooperation in the region, innovation-driven growth and social responsibility for mutual development. The previous meetings were held in Specific areas needed for support, high-tech industries in At a workshop on June 27, Vu Van Hoa, head of the management board of the HCM City Export Processing and Industrial Zones Authority (Hepza), cited a The park, expected to be operational from this October, is hoped to attract investment from Japanese small- and medium-sized enterprises into high-tech supporting industries, he added. Participants said they believe such a measure will help push up the industries, which are among the city’s top priorities, as said by Vice Chairman of the municipal People’s Committee Le Manh Ha, but still grow less than expected in both quantity and quality. Hirotaka Yasuzumi, managing director of the Japan External Trade Organisation Office in the city, said He noted that Japanese businesses have high demand for inexpensive and quality products of Vietnamese firms operating in the support industry. However, domestic enterprises have met only 32 percent of the demand, lower than that of other Southeast Asian countries, he added. At the workshop, Hepza inked an agreement with the Saigon High-Tech Park and the municipal Department of Industry and Trade on boosting cooperation in managing and attracting investment into the industries.- ADB-funded project helps Tien Giang develop biogas models A project to help reduce environmental pollution caused by agricultural waste through expanding and developing biogas models was launched in the Mekong Delta province of Tien Giang on June 27. Funded by the Asian Development Bank (ADB), the 1.9 million USD project is expected to improve living conditions for local people living in rural areas. Nguyen Thanh Can, Director of the provincial Department of Agriculture and Rural Development said the six-year project will focus on measures to manage waste from breeding activities; provide finance for biogas value chains; transfer low-carbon agriculture production technology; and manage the project. Training courses related to operation, management and installation of bio-gas systems will be organised, while the establishment of low-carbon breeding models implemented in the framework of the project. Apart from Tien Giang, similar projects have also been implemented in the Vietnamese economy on the mend: GSO chief Facing many difficulties, Vietnam still saw signs of economic recovery with a GDP growth in the first half of this year reaching 5.18 percent, said Nguyen Bich Lam, Director-General of the Vietnam General Statistics Office (GSO). GDP in the first quarter rose 5.09 percent year-on-year, while that of the second quarter was 5.25 percent, noted Lam at a press conference in Hanoi on June 27 to update socio-economic statistics in the first six months of this year. Service sector’s proportion in the economic structure was 43.61 percent, while industry-construction accounted for 38.7 percent and agro-forestry-fisheries sector made up 17.69 percent, he revealed. Lam commented that positive changes of the economy were reflected in progress of enterprises’ capacity. Industrial production in the first half of 2014 rose 5.8 percent year-on-year, while export is another bright spot of the economy with 70.9 billion USD in total revenue, up by 14.9 percent, he said. Sharing Lam’s opinion, Ha Quang Tuyen, Director of the GSO’s System of National Accounts Department, pointed out that the property market was also thriving with a 2.65 percent growth, higher than the 1.8 percent in the same period last year. He attributed the results to the loosening bank interest rate and the government’s effective support policy for the sector. Both Lam and Tuyen were optimistic with the predicted 2014 GDP growth of 5.8 percent despite impact of the Many economists at the conference held that enterprises should stay more active in enhancing their capacity and competitiveness, while expanding their markets and choosing suitable business strategies for specific products.- Maersk Line optimistic about Vietnamese market The 2014 first trade report by Maersk, the world’s largest container shipping company, has showed positive economic prospects in The growth in commodities in the first quarter of this year truly reflected Maersk also forecast that The Maersk Group has 89,000 staff worldwide including about 500 in The Maersk Group established its first Thai company to invest in thermal power plants in Vietnam EGAT International Company (EGATi) of The acting President of EGATi, Thana Putarungsi, signed a memorandum of understanding (MoU) with the Deputy Director General of the Department of Energy under the Industry and Trade Ministry of Vietnam, on construction of thermal power plants in The Vietnamese government has approved EGATi as the project investor and developer. It plans to construct two thermal power plants, each with a production capacity of 600 MW, in the Quang Tri special economic zone. The plants will use coal as fuel for power generation. The first plant is scheduled to be completed in June 2021 and the second in December of the same year. The Quang Tri thermal power plant project is part of the 7th power generation master plan of Following the MoU, EGATi will conduct an environmental impact assessment before submitting the results to the Vietnamese government in December this year. If the EGATi plan is officially approved by the Vietnamese government, it will proceed with contract signings.- Binh Duong priorities Dutch high-tech projects The southern Chairman the provincial People’s Committee Le Thanh Cung made the statement during his working session with Dutch Consul General in Ho Chi Minh City Simon Van der Burg in the province on June 26. He also affirmed that the local authorities will make every effort across the board to ensure safety for businesses operating in the locality. Simon said that the Vietnamese Government and Binh Duong took effective measures to ensure security, therefore, his country hopes to boost connection with Vietnam in general and the province in particular in the coming time. The guest revealed the plan to further forge links in the high-tech field between According to Cung, 19 projects with a total registered capital of nearly 500 million USD invested by the Tan Rai bauxite plant enjoys strong export in six months Tan Rai bauxite mining plant , a component of the Lam Dong aluminium bauxite complex in the Central Highlands The plant exploited over 1.6 million tonnes of bauxite ore and produced more than 220,000 tonnes of alumina in the period. According to the Vietnam Coal and Mineral Group (Vinacomin), the plant has seen positive signs in its consumption markets. Last year, it shipped over 160,000 tonnes alumina to The Lam Dong complex is hoped to produce about 540,000 tonnes of alumina and more than 800,000 tonnes of hydrate this year.- Vietnamese goods introduced in Myanmar The 2014 The third of its kind held in On show at 115 stands are a wide range of products ranging from processed food, plastics and home appliances to garment-textile, cosmetics, footwear, timber products and interior decorations. Addressing the opening ceremony, Vice Chairwoman of the HCM City People’s Committee Nguyen Thi Hong said that the event shows the determination and strong commitment of the city’s leaders and businesses to identifying themselves to the Many products from Vietnamese famous firms such Sai Gon cosmetics, Vissan processed food, Dien Quang electrical goods, Dai Dong Tien plastics and Gia Dinh textiles drew attention of Myanmar consumers during the first day. Exhibitors are also offering promotional programmes with a hope of further promoting their goods. The same day, a workshop promoting investment, trade and tourism between the two countries was held in the headquarters of the Union of Myanmar Federation of Chambers and Industry. Business optimism on the rise this year Businesses are more optimistic about the growth prospects now than two years ago. This was revealed by a survey on business trends in 2014, conducted by the General Statistics Office from January 1to April 30, 2014. According to the survey, though many difficulties remain, most of the 8,100 surveyed firms are more optimistic about the recovery and development prospects this year. As many as 71.6 percent of the firms, including State-owned firms, private firms and foreign direct investment (FDI) firms, expected their turnover to increase by roughly 70 percent this year as compared to last year. Another 14.7 percent forecast that their turnover would remain unchanged this year, while 13.7 percent were concerned about declining turnover. Also, 75.1 percent believed their pre-tax profits this year will be higher than last year, 5.8 percent expected it to remain unchanged and 19.1 percent forecast a decrease of profits this year. As for exports, 34.1 percent expected their export value to rise this year. The number of firms which believed that their export turnover this year would remain unchanged from last year was 60.6 percent. Only 5.3 percent anticipated their export turnover to be less this year over last year. However, only 34.8 percent were optimistic about the domestic market this year, while 16.2 percent were concerned that the local market would be worse than last year. According to the survey, 49.5 percent of the firms were borrowing loans for production and business activities as of March 2014, and 63.3 percent of them got the loans from State-owned commercial banks. Firms in the industrial and construction sectors topped the list of the borrowers with a rate of 60 percent, followed by firms in the service sector with 43 percent. The agriculture, forestry and fishery sectors accounted for only 33.7 percent. Most firms that did not receive bank loans noted that they did not need to take loans frequently. Complicated lending procedures, high interest rates, the ability to borrow from other sources, and being able to meet lenders' requirements were all obstacles preventing firms from gaining access to bank loans. Vietnamese goods introduced to Germany Vietnamese goods are being showcased at an event jointly held by the Vietnamese Ministry of Industry and Trade and Speaking at the opening ceremony on June 26, Minister of Industry and Trade Vu Huy Hoang said that He expressed his hope that the week-long activity in the European country will enable Vietnamese producers to learn more about the taste of European customers to meet their future needs, through Metro systems. The minister highly valued Metro’s operation in the Vietnamese market, saying that the chain has contributed importantly to boosting the economic, trade and investment ties between Metro is present in 29 countries and territories with 752 distribution centres, 19 of which are in 14 Vietnamese localities. In the afternoon of June 26, Minister Hoang held a working session with It’s time to reduce imports from China The historical trade relationship between “It is high time In the first half of the year, China’s imports increased by 21% over last year’s same period to tally in at US$20.4 billion and China continues to be Vietnam’s leading importer, Thuy said, adding that Vietnam’s trade deficit for the period was US$13.1 billion. The imbalance of trade comes into play when considering that This demonstrates that domestic production is overly dependent on Since The GSO is closely monitoring the trade situation and statistics to keep the State management agencies abreast of the situation, Thuy revealed. Thuy also said that imports of Chinese machinery and equipment account for 40-43% of If It is high time for With a strong will, Vietnamese businesses can persevere and gradually reduce imports from Agricultural trade surplus hits US$4.5 billion Agro-forestry-fishery exports jumped up 12.7% to US$14.88 billion in the first six months of the year, the Ministry of Agriculture and Rural Development (MARD) reported on June 27. Of the figure, exports of key agricultural products are estimated at US$7.17 billion (up 6.9%), aquaculture at US$3.57 billion (up 28.6%) and forestry products at US$2.93 billion (up 12%). Overall the sector enjoyed a trade surplus in the first half of the year of US$4.5 billion. In the reviewed period, the combined production value in the sector also rose by 3.4%, signaling agricultural growth has improved significantly, MARD reports. Since May, due to tensions in the Agriculture and Rural Development Deputy Minister Ha Cong Tuan said some Vietnamese agricultural products are overly dependent on the Chinese market, primarily citing rice and rubber, which Additionally, 80-90% of dragon fruit and cassava are shipped to To cope with the issue, the ministry has directed relevant agencies to devise measures to diversify and grasp market information for market expansion. Coffee exports up in volume, value in six months According to the Ministry of Agriculture and Rural Development (MARD), 109,000 tonnes of coffee were shipped in June alone, grossing US$229 million. During the six month period, the average export price hovered around US$2,025 per tonne. In the reviewed period, coffee exports to some African countries obtained high growth. Meanwhile, exports of Vietnamese instant coffee to northern Tamada starts construction on new facility in Haiphong Tamada The US$10 million facility, spanning an area of 23,226 square meters, is expected to be placed into operation by September 2015. Once completed, the plant will have the capacity to produce 5,800 tonnes of metal tanks, basins, pipes and silo annually, creating 80 good-quality jobs. Tamada is the eleventh Japanese investor in the DVIZ. So far, the industrial zone has attracted investment form more than 50 foreign businesses with a total investment capitalisation of over US$3 billion. With its important projects, including the Tan Vu-Lach Huyen cross sea bridge, Specific areas needed for support, high-tech industries At a workshop on June 27, Vu Van Hoa, head of the management board of the HCM City Export Processing and Industrial Zones Authority (Hepza), cited a The park, expected to be operational from this October, is hoped to attract investment from Japanese small- and medium-sized enterprises into high-tech supporting industries, he added. Participants said they believe such a measure will help push up the industries, which are among the city’s top priorities, as said by Vice Chairman of the municipal People’s Committee Le Manh Ha, but still grow less than expected in both quantity and quality. Hirotaka Yasuzumi, managing director of the Japan External Trade Organisation Office in the city, said He noted that Japanese businesses have high demand for inexpensive and quality products of Vietnamese firms operating in the support industry. However, domestic enterprises have met only 32% of the demand, lower than that of other Southeast Asian countries, he added. At the workshop, Hepza inked an agreement with the Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR |
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