Vinacomin reaches over VND93 trillion in 2011
The Vietnam National Coal-Mineral Industries Holding Corporation Limited (Vinacomin) turnover reached more than VND93 trillion (US$4.42 billion) in 2011, earning a profit of VND7,800 billion (US$370 million).
The corporation produced 48 million tonnes of crude coal and 27 million tones of consumption coal.
Vinacomin aims to increase its turnover to VND96 trillion (US$4.57 billion) in 2012 and implement more coal, infrastructure, and environmental projects, particularly enhancing the capacity of coal mines and continuing to restructure and reform the business.
The corporation will also coordinate closely with local public security and authorities to ensure social order and workplace safety.
Vietnam to host 28th Asian Advertising Congress
Vietnam will play host to the 28th Asian Advertising Congress (AdAsia 2013), in Hanoi from November 5-9, 2013, according to the Vietnam Advertising Association (VAA).
The VAA will organize a ceremony in Hanoi Opera House on January 8 to announce the event. The Congress will be held at the Vietnam National Convention Centre and Bao Son Paradise Park.
AdAsia 2013 is expected to attract 3,000-5,000 delegates from member countries and territories of the Asian Federation of Advertising Associations (AFAA), advertising and communications companies, and foreign businesses which are keen on investing in Vietnam.
The hosting will contribute to promoting Vietnam’s image amongst international friends, and boosting trade exchange, tourism and investment. This is also a good opportunity for Vietnamese companies to learn more about tourism, communications, and advertisement activities in Asia and around the world.
During the event, Vietnam will convey the message “Peace, Friendliness, and Cooperation for Mutual Development” to international friends from the region and beyond.
The event will also select 100 outstanding businesses on AdAsia communications, the top 10 leading businesses on AdAsia communications, 100 outstanding video clips from Asia, and the 10 most impressive photos from Asia.
To promote the event, the organizing board has co-ordinated with VTV4 to conduct a game show to introduce the culture of Vietnam and 16 AFAA members from June 2012 to November 2013.
The programme will be implemented in Vietnamese language with English subtitles and is expected to be aired 30 minutes each week.
Increasing outlets for Vietnamese goods
The High-Quality Vietnamese Goods Business Association held a seminar in HCM City on January 6 to review its activities in 2011 and announce a programme to expand outlets for Vietnamese commodities in 2012.
Last year, the Association organized eight trade fairs in provinces and cities nationwide, and 21 in rural areas. It also supported businesses in developing the local market by creating new products, conducting market surveys and developing a distribution network for Vietnamese goods.
In 2012, it will continue to help businesses introduce Vietnamese goods in traditional markets and implement the project on distribution maps in HCM City, Hanoi, and five southeastern and six southwestern provinces in the country.
On the occasion, the association also signed agreements with the Departments of Industry and Trade of five southeastern provinces to develop Vietnamese goods, as well as with the Can Tho Centre for Trade Promotion and Tourism to train traders and build stores to sell Vietnamese goods in remote areas.
Addressing the meeting, Deputy Minister of Industry and Trade Ho Thi Kim Thoa noted that in the future, the association should promote cooperation among businesses and localities nationwide to bring more Vietnamese goods into rural, island and border areas.
The event was attended by representatives from the southeastern and southwestern provinces, and more than 300 Vietnamese businesses.
Country Partnership Strategy tops ADB meeting
Nearly 100 local and foreign businesses gathered in the southern province of Binh Duong to discuss the Asian Development Bank’s Country Partnership Strategy for 2012-2015.
At the seminar, ADB representatives highlighted Vietnam’s efforts to meet the country’s targets on industrialization, poverty reduction and climate change adaptation. These are also ADB’s strategic goals and the bank wants to provide further capital sources to achieve the above goals, especially in areas of social development, health and education.
Currently, ADB ranks third among international partners providing Official Development Assistance (ODA) capital for Vietnam.
According to economic experts, the impact of global economic uncertainty will continue in the year 2012. Vietnam needs to fully tap capital sources from donors to boost socio-economic development, support business restructure, promote exports, stabilize the macro-economy and ensure social security.
The Vice Chairman of the Binh Duong provincial People’s Committee, Tran Thanh Liem, said that over the years, ADB has funded many socio-economic development projects in the locality, especially those on technical infrastructure, the environment, water supply and drainage. Under the five-year development strategy until 2015, the province will increase investment in infrastructure construction, with a particular focus on housing, transportation and the environment.
Exporting Tet cakes to US, EU
A local company in the southern province of Dong Nai has completed procedures for shipping 20 tonnes of Banh Chung (square glutinous rice cake) and 4 tonnes of Dong leaves to the US and the European Union.
It aims to help overseas Vietnamese enjoy the Lunar New Year (Tet) festival which falls in two weeks’ time.
Over this Tet festival, Tran Gia, headquartered in Bien Hoa city, will also supply about 100 tonnes of Banh Chung to serve the domestic market, distributed in big supermarket chains such as Metro, Big C, Co.opmart, and Maximart.
Since 2005, the company has exported about 20-30 tonnes of Banh Chung every year to America and the European Union.
Banks to be allocated credit growth quotas
This year will be the first time credit growth is allocated by the State Bank of Viet Nam for credit institutions based on performance.
Commercial banks and othr credit institutions will be allocated growth rates based on their health and their performance last year.
Institutions will be classified into four groups, with well-performing lenders classed in the A group and weaker lenders in the D group.
The State Bank has asked institutions to set their own quarterly targets while the overall amount they can lend will be designated by the State Bank.
State Bank Governor Nguyen Van Binh said the central bank would continue to limit credit growth in the banking system but would relax the cap from 15 to 17 per cent to help curb inflation while ensuring total money supply increases under 16 per cent for the year.
Ocean Bank deputy director Nguyen Thi Mai Huong agreed with the decision on credit growth rates allocation. Ocean Bank was planning to set its credit growth at 15 per cent for 2012, said Huong, adding that the bank expected to be classified at bottom of group A or the top of group B.
Eximbank general director Truong Van Phuoc said that one of the criteria for the central bank’s classification should be the capital adequacy ratio, which measures a bank’s capital in relation to its risk.
Meanwhile, industry insiders said the criteria should also include banks’ bad debts, return on assets and return on equity and that banks with a majority of loans for exports, production, agriculture and rural development should be given priority for credit growth allocation.
Most banks have not yet released their 2011 financial statements.
SBV Governor Binh said credit growth in the domestic banking system was held at 13 per cent, the lowest level in recent years. compared to average figures of 29.5 per cent and 33 per cent respectively during the 2000-11 and 2006-11.
Although credit grew overall at under 13 per cent last year, credit for the production sector rose by over 15 per cent with priority given to agriculture with an increase of 25 per cent and exports, at 58 per cent.
Credit declined in the non-production sector, most significantly in the real estate and securities sectors, Binh added.
Property firm sells flats in HCMC
The Sacombank-owned Sai Gon Thuong Tin began selling housing units in a huge property in HCM City’s Tan Phu District last Saturday.
The 82-ha Celadon City is being built by Sacomreal – as the developer is known – in partnership with Malaysia’s Gamuda Land as a high-quality urban living space.
Work on the US$1.6 billion property project started in September 2010, according to a Gamuda Land spokesperson.
The project’s 16-ha central park is complete and will be followed by a 5.4ha sports complex in the first quarter of 2013.
The company is offering for sale apartments in the Ruby Precinct at a starting price of VND19 million ($900) per square metre. Buyers can deposit 30 per cent of the price upfront and pay the rest in the first quarter of 2013 on completion of the apartments.
At the launch on Saturday, Sacomreal signed an agreement with AEON, a leading retailer in the Asia-Pacific, under which the latter will invest in a commercial centre in Celadon City, which is scheduled to be completed in early 2014.
Tea to brew up high profits in 2012
Tea and coffee and are two commodities forecast to bring big profits to investors this year thanks to their 100 per-cent localisation scale, economists said.
Investing in tea and coffee in 2012 would surely be highly effective and safe, said economist Bui Kien Thanh.
Thanh confirmed that Viet Nam was ranked the second biggest coffee exporter in the world with a total annual yield of more than 1 million tonnes, worth more than US$2 billion.
In terms of tea, Thanh said, the country ranked fifth with more than 1 million tonnes produced each year.
He added that products with a small localisation scale often reached a turnover of about $5-10 billion per year. Meanwhile tea and coffee, with high localisation scales, got lower incomes.
“This means there is a great deal of hidden potential to exploit,” Thanh concluded.
With good investment strategy, they could earn high profits as well as help the economy in stable development, he added.
A report from the Ministry of Agriculture and Rural Development said that like other agriculture products, the price of tea and coffee climbed up last year.
Thanks to that, the country earned $2.7 billion from exporting 1.2 million tonnes of coffee. This export turnover increased by 45.4 per cent in value while the volume reached the same level last year.
Meanwhile, tea exports last year fell 4.3 per cent in volume and only 0.8 per cent in value over the previous year, the Ministry of Agriculture and Rural Development said.
The country exported 131,000 tonnes of tea last year, totalling $198 million.
Industries urged to take inflation-control measures
Ministries and sectors need to draft measures to reach the target of single-digit inflation in 2012, says Deputy Minister of Industry and Trade Ho Thi Kim Thoa.
Thoa told the year-end meeting of the domestic market watch team here last week that industries and sectors this year should operate at full capacity to meet domestic demand for essential goods and improve distribution networks, with close co-operation on determining supply and demand for goods and reasonable changes in price.
It was imperative to ensure sufficient supplies of essential products and avoid price fevers, Thoa said. The Ministry of Industry and Trade would ensure sufficient supplies of electricity for production of essential goods, she added.
The Government also needed to devise further policies to support development of the domestic market, especially trade promotion programmes, she said. The ministry would continue to encourage export, limit the trade deficit and promote production of domestic goods.
Thoa urged the State Bank of Viet Nam to stabilise foreign exchange rates and ensure foreign currency supplies for enterprises importing materials and equipment for domestic production, such as fuel, fertiliser, pig iron and pharmaceuticals.
According to the domestic market watch team, inflation spiked nationwide in the first seven months of last year due to soaring prices of rice and other food staples, as well as inflationary pressures worldwide.
Nguyen Tien Thoa, head of the Ministry of Finance’s Price Management Department, said Viet Nam’s high inflation was also due to the low competitive capacity of the domestic economy, including low-quality growth, an ineffective investment structure and loose credit policies in previous years that caused economic growth to overheat.
Inflation rose at a rate of 18.58 per cent in 2011, the General Statistics Office (GSO) reported last month. However, inflation began to slow in August due to such measures as tighter credit policies and State budget cuts.
Inflation fell from a one-month rate of 0.93 per cent in August, to 0.82 per cent in September, 0.36 per cent in October, 0.39 per cent in November and 0.52 per cent in December. All of these figures were well below the rates during the first seven months of the year, which ranged between 1.09 per cent and 3.32 per cent per month, the GSO said.
For this year, the Government has targeted inflation below 10 per cent, a growth rate of 6-6.5 per cent, and a 13-per-cent increase in export turnover.
New cities fail to lure investors
Lack of investment is holding up the development of satellite cities around Ha Noi, said vice chairman of Ha Noi Urban Planning and Development Association Dao Ngoc Nghiem.
Under the city’s master development plan until 2020, with a vision to 2030, Ha Noi will have five satellite cities, each specialising in different fields.
It is planned that Hoa Lac will focus on science, technology and training; Son Tay will be a city of culture, history, resorts and tourism; Xuan Mai will specialise in services and support industries and handicrafts; Phu Xuyen will be a hub for industry and transport; while Soc Son will specialise in services for Noi Bai International Airport, the Kunming-Ha Noi – Quang Ninh economic corridor and Soc Son.
However, almost all projects planned for the satellite cities have either failed to get off the ground or are progressing at a snail’s pace, while huge sums have been spent on transport infrastructure to connect the satellite cities with Ha Noi city centre.
For example, Thang Long Boulevard, linking the city centre with districts to the west has been open for a year but no significant change has been seen in the new Hoa Lac urban area, which the road runs through.
Within the boundary of Hoa Lac New Urban Area, the construction of National University has been held up for decades, despite investment totalling trillions of dong. Another project involving ethnic cultural villages in Viet Nam on hundreds of hectares of land in Hoa Lac High Tech Zone has yet to be put into practice.
Meanwhile, Nguyen Doan Hoan, chairman of Thach That District People’s Committee, said a plan to develop Hoa Lac New Urban Area launched 10 years ago still lacked adequate investment.
He said the majority of local residents still worked in the agriculture sector, earning just VND20 million (US$950) per person annually, far less than those living in the inner districts, he said.
“To develop satellite cities, it was crucial to offer policies and mechanisms that attract investors and labour,” Nghiem said.
Meanwhile, Ha Noi has given the green light to about 700 urban development and construction projects, mostly in inner districts or suburban areas, which made the proposed satellite cities less attractive to investors, he said.
Furthermore, the transport network linking satellite cities with each other and the Ha Noi City centre still needed to be completed, Nghiem said, adding that attracting enough finance would be a challenge.
By 2030, Ha Noi is expected to have a population of more than 9 million people, with farmers making up a third of that number.
Business experts discuss opportunities
Business that took advantage of market opportunities, such as consolidation and merger and acquisitions, and overcame challenges, such as tight funding or liquidity, would succeed this year, a forum in Ha Noi heard yesterday.
Head of Global Markets, HSBC Bank Viet Nam Ltd Pham Hong Hai told the business forum that nobody knew how the market would turn out this year.
“What we are certain of is that 2012 will be a year of uncertainty,” Hai said.
“With the ongoing euro crisis and debt ceiling issue in the US, slowing growth in emerging markets and restructuring in Viet Nam, managers will need to be very cautious in growing their businesses.
“With a big population and rising household incomes, the consumer goods and service markets will provide enormous opportunities for businesses.”
However, businesses would face difficulties in accessing loans, as the State Bank of Viet Nam would continue to impose a credit growth cap of 15-17 per cent to control inflation. Funding and liquidity would remain tight while funding from European banks could be affected due to the eurozone crisis.
Businesses would need to be prudent in growing their business, choosing the right banking partner and staying alert to changes in regulations, Hai said.
The forum, entitled “Opportunities and Challenges for 2012”, was aimed at enabling organisations to maintain a sustainable competitive advantage this year.
Le Thi Hong Len, head of the Association of Chartered Certified Accountants which organised the event, said the past year had highlighted how interconnected economies around the world had become and how problems thousands of miles away had implications for Vietnamese business.
Len said such forums would look at strategies to meet challenges and make the best of opportunities.
Le Dang Doanh, senior economist and former director of the Central Institute of Economic Management, said Viet Nam had to deal with high inflation, exorbitantly high interest rates for credit in Vietnamese dong, a low securities market and declining real estate market.
“The Vietnamese Government has implemented measures to control inflation and stabilise the macroeconomic situation but more effort must be made,” Doanh said.
“Changing the growth model and restructuring the economy is on the agenda for this year.”
He said the world economy would fall into a new crisis centred around the European public debt.
“This year, we will continue the results of last year with less investment but higher growth. The private sector has declined and should be strengthened.”
He forecast that Viet Nam would continue to reduce tariffs, open markets for industrial products and services and welcome a new investment wave from Japan.
Doanh emphasised the need to change investment, tax and credit policies to redirect businesses to invest in science and technology and manufacturing rather than resource extraction.
Doan Hong Quang, senior economist with the World Bank, said 25 years ago Viet Nam turned a crisis into an opportunity.
“It started with a consensus but it took few years to translate the vision into a detailed action plan. Viet Nam enters 2012 with mounting challenges but with structural weaknesses remaining,” Quang said.
He said a consensus on restructuring the economy had been reached but the formulation of a feasible action plan might need time to accommodate different interests and ensure broad support.
Viet Nam could use the power of the market and the facilitating role of the State to chart a new course to create a more efficient economy and a more productive society.
“Such a path will require embracing the market principles more firmly than it has done so far, involving institutions, incentives and information,” he said.
Dong Nai approves hi-tech projects for industrial park
Dong Nai Province People’s Committee has approved in principle the establishment of a hi-tech park, expected to cost US$75 million, in Long Thanh District.
The project’s investor, Amata Viet Nam Company, said the park would strive to attract Japanese and European investors who were interested in hi-tech industries.
Amata Viet Nam also planned to pump further investment into two other residential area and service projects, worth a combined of $270 million, its general director Huynh Ngoc Phien told Dau Tu newspaper.
The company’s plan accorded with the provincial tendency to attract more foreign direct investment (FDI) in hi-tech and support industries, according to its Department of Planning and Investment.
The province, meanwhile, would gradually limit labour-intensive projects with low value, especially in textiles, footwear and wood processing, while suspending the granting of investment licences to projects with a high risk of environmental pollution, the department said.
It had set a target of drawing $900 million in FDI this year, $28 million less than that of the previous year, said the department’s deputy director Phan Minh Thanh.
He attributed the weaker goal to the continuos influence of the global economic downturn and provincial-level priority projects in hi-tech and support industries, which were mainly small-scale ones with low investment capital.
In the current difficult context, the department would join hands with the provincial Industrial Zone Authority to review licensed projects to ensure the capital disbursement, he said.
Last year, the province revoked licences of 48 sluggish projects with capital totalling $261 million, marking a 37 per cent year-on-year increase in terms of project quantity.
The latest addition has brought the total number of slow-moving projects experiencing licence withdrawal to 280.
As of December, the province was home to 972 projects, capitalising at $19.3 billion. However, 28 of them worth $2.13 billion were yet to start as scheduled.
Corporate income tax rules set to change
Businesses will soon be required to pay corporate income tax on interest earnings from banks or credit organisations, lending capital to other ventures or sales of foreign currencies, under a new decree.
Decree 122/2011/ND-CP, which will take effect at the beginning of March and be applied to all 2012 earnings, adds several specific regulations to Government Decree 124/2008/ND-CP guiding the Law on Corporate Income Tax which was issued in 2008.
Under the new regulation, corporate income tax will also be imposed on income earned by partially or fully transferring capital which was invested in other ventures, selling their affiliates and transferring shares.
Enterprises who transfer projects or their mineral exploration and exploitation rights will have to pay income tax on any related earnings.
Several types of earnings are eligible for tax breaks. Specifically, income collected from production, commodities sales and service enterprises will be exempt from corporate income tax if 30 per cent of their labour force includes handicapped, HIV/AIDS sufferers or recovered drug addicts. These enterprises must have at least 20 workers during a year and cannot be involved in the finance or real estate sector.
The previous proportion was 51 per cent.
Tax exemptions will also be applied for income earned in operations that offer training for ethnic minorities, disabled people, needy children, drug addicts and people suffering from HIV/AIDS.
FDI projects pump capital into Hai Phong
The northern port city of Hai Phong has licensed 319 foreign direct investment (FDI) projects valued at US$5.3 billion to date, with $2.6 billion in dispersed capital, equivalent to 49.3 per cent of the total.
Big projects in the city include the $187.5 million Kyocera Mita and the $321 million wharfs at the Hai Phong Port.
Steel exports down by 4% over last year
The Viet Nam Steel Association forecast that the country would consume roughly 5.6 million tonnes of steel this year
It also reported that 5.2 million tonnes of steel were exported last year, down 4 per cent from the previous year due to economic difficulties.
First heat-resistance glass factory opens
Lock&Lock Co Ltd announced that it completed construction of a heat-resistant glass factory in the southern province of Ba Ria-Vung Tau, the first of its kind in the country.
Construction of the 150,000-sq.m factory in the My Xuan A2 Industrial Zone began last January.
It was designed to produce 22 million glass products annually, equivalent to 10,000 tonnes.
Number of phone subscribers drops
The total number of phone subscribers in HCM City last year was estimated to reach 20.72 million, a year-on-year decrease of 1 per cent.
Phone density (both mobile and fixed line phones) was estimated at 218 subscribers per 100 people, reported the municipal People’s Committee.
The Committee has recently tightened the management of mobile phone subscribers in the city, including the deletion of nearly 40,000 dormant SIM cards last month.
Meanwhile, the number of phone subscribers in the country last year reached 133.1 million, a year-on-year increase of 3.9 per cent, including 15.5 million fixed lines and 117.6 million mobile numbers.
Steelmaker pays dividends in shares
Steelmaker Hoa Phat (HPG) will implement its dividend payout for the second phase of last year in shares at 10 per cent. Ex-date is fixed at January 30. The company has also estimated that its main steel-producing operation earned a VND700 billion (US$33.3 million) profit last year.
Closing yesterday’s session, HPG lost 3.1 per cent to VND15,600 per share.
Securities firm reports net profit of $8.1 million
Kim Long Securities Co (KLS) said its profit last year could fully make up for the losses in its undistributed profit fund. Accordingly, net profit reached around VND170 billion (US$8.1 million).
Ending the third quarter last year, KLS had a total cash equivalent to VND1.6 trillion ($76.2 million), VND252.2 billion ($12 million) of short-term securities investment and VND246 billion ($11.7 million) of long-term financial investment.
Fund to become FPT’s major shareholder
Orchid Fund Private has completed the purchase of nearly 4.3 million shares of software giant FPT (FPT). The fund also registered to buy nearly 6.4 million FPT shares. The transaction will take place between January 10 and March 10.
After the purchase, Orchid Fund will be holding a 14.9-per-cent stake in FPT.
Vegetable Oil Packing Co aims to boost profit
Vegetable Oil Packing Co (VPK) targets VND285 billion (US$13.6 million) in revenue and VND18 billion ($857,100) in profit this year, increasing 24 and 44 per cent respectively compared to last year.
It closed yesterday’s session down 1.4 per cent to VND6,800 per share.
ANZ gets green light to sell stake in local bank
ANZ Banking Group announced on Thursday that it had received State Bank of Viet Nam approval to sell its 9.6 per cent stake in the Sai Gon Thuong Tin Commercial Joint Stock Bank, or Sacombank, to the Viet Nam Export-Import Commercial Joint Stock Bank (EIB).
The sale is expected to be completed early this month, but the terms have not been disclosed by any of the parties.
The Australian bank had bought the stake in 2005.
Alex Thursby, ANZ CEO, Asia Pacific Europe and America, said his bank was selling the stake to focus more on its own business in Viet Nam.
ANZ’s business in Viet Nam was now significantly larger following local incorporation in 2008 and the purchase of the Royal Bank of Scotland’s institutional business in Viet Nam in 2009, he said.
The bank recently expanded its ATM network, opened a 24/7 call centre, and launched internet banking.
Per capita power use continues to rise
Electric power consumption in Viet Nam has reached over 1000kWH per capita, according to statistics released by Viet Nam Electricity (EVN) yesterday at the conference reviewing works in 2011 and planning for this year.
According to General Director Pham Le Thanh, all sectors and the public have fully complied with the Government’s decree 171 issued in January 2011 on saving electricity in production and consumption. The nation was able to save an estimated of 1.31 billion kWh in 2011, according to EVN.
HCM City led all provinces in electricity saving, accounting for 30 per cent of the nation’s total electricity output that was saved last year.
Officials commit to expanding city programs to raise electricity saving awareness in 2012, especially that of the over 100,000 local students.
In 2011, EVN provided electricity to more than 81.6 per cent of villages nationwide, with nearly 85 per cent of households in rural areas buying electricity directly from EVN at government promulgated price.
Thanh said in 2012, EVN would also work on major projects to provide electricity for production, consumption and socio-economic development. It will also continue restructuring and withdrawing capital in real estate, stocks and banking to focus on its core business.
Motorbike can run on different types of fuel
HCM City University of Science and Technology has successfully developed a motorbike that can operate on multiple types of fuel.
The improved Honda Lead motorbike can be fuelled with petrol, liquefied petroleum gas and biogas. Testing has shown that the bike produces fewer exhaust fumes than those powered with petrol alone.
Developers said the design needed to be altered to include space for the gas tank which was currently located in the trunk.
Delta farmer builds mobile rice dryer
A farmer in the Mekong province of An Giang has built a mobile dryer that preserves rice quality by drying paddy directly at the rice fields shortly after harvest.
The 4.5-metre wide, 15-metre long floating dryer, which was built by Cao Xuan Qua, a resident of Long Xuyen City’s Binh Duc Ward, can dry up to 15 tonnes of paddy per three-hour batch.
The dryer helps farmers reduce post-harvest losses and production costs.
Qua said he had built 20 mobile dryers that sell for VND80 million (US$3,800) each.
In the past six years, he has also built 1,300 fixed dryers, including 30 that he built for buyers in Cambodia.
In the near future, a larger floating dryer that can dry up to 50 tonnes of paddy per batch will be available, he added.
Shipping fees on exports to U.S. up
Many shipping lines have started to impose a new general rate increase (GRI) on containers of goods exported to the U.S. with a rise ranging from US$320 to US$450 per container.
The new fees are applied for goods from European countries and Vietnam to Mexico, Canada and the U.S., Vietnam’s major markets for garments, footwear, seafood and woodwork.
Each 20-foot container, 40-foot standard container and 40-foot high cube container will be subject to a price rise of US$320, US$400 and US$450 respectively, according to NYK Line in its announcement sent to customers.
Exporters have to pay nearly US$2,000 for every 20-foot container to transport goods from ports in Vietnam to the U.S.
A representative of a forwarding firm in HCMC’s District 4 said the fee upsurge by shipping lines at a time of stronger shipping demand was to offset their earlier losses due to declining shipping demand caused by the economic crisis.
The shipping fee was lowered by around US$120-200 for each 20-foot container some months ago due to low demand. However, the fee has been raised as it is now the export season in some countries such as Vietnam and China.
Meanwhile, fees on exports to Europe remain unchanged at US$600 for a 20-foot container, US$1,200 for a 40-foot container and US$1,300 for a 40-foot high cube container.
The terminal handling charge (THC) imposed on containers of frozen goods from Vietnam has also been spiked considerably to cover risks, after several exported frozen containers exploded.
The export volume will be on the rise until the Tet holiday as exporters do not want to stock goods in the New Year, said Nguyen Nang Toan from Saigon Newport Corporation.
Investors show interest in hotel projects in city
More local investors, especially private ones, are now seeking investment opportunities and showing interest in building luxury hotels in HCMC.
Truong Vinh Tho, head of the Hotel Division under the HCMC Department of Culture, Sports and Tourism, said that there were more local private investors wanting to invest in hotel projects while the number of foreign ones was fewer.
“We do not have detailed figures, but the number of investors who said they may invest in big projects was on the rise,” Tho said.
Some investors planned to invest in housing projects at first, but then turned to hotels due to greater potential, he added.
According to the HCMC Department of Culture, Sports and Tourism, the city has 910 one- to five-star hotels with nearly 26,850 rooms.
The room occupancy of three- to five-star ones which attract mostly foreigners was around 71% last year, up five percentage points from the previous year. Besides, the average room rate of such hotels was US$94 per night, up 2%.
The growth of hotel rooms in the city is currently lower than the growth of international arrivals, the main source of income for the city’s tourism, Tho said. Therefore, the potential for hotel investments is quite high, he added.
“The tourist volume rose by 12.9% last year while the number of three- to five-star hotel rooms was up by nearly 5%. The room growth has not gone up much in recent years, and thus more investors want to enter the market,” he said.
Realty exchanges boost layoffs in tough times
A number of local property services providers have had no other choice but to lay off staff to cope with increasingly tough market conditions. Instead they are setting up a network of collaborators to boost cost efficiency.
Eden Real Estate Co. under Eden Group is among the companies in the industry to apply this business strategy. It retains seven competent staff members, down from the previous 12, and they are now responsible for setting up a network of collaborators working as part-time realty brokers.
Huynh Kim Doan, director of Eden Real, said the model allowed her firm to raise the number of brokers to around 200. These brokers work in groups and support each other in marketing and sales activities. They get commissions instead of salaries from the company.
Brokers are entitled to 60-65% of the commission customers pay the company’s exchange for every successful deal. For instance, when one pays it VND20 million for a VND1 billion flat sold, the broker of that transaction will receive VND12 million.
According to Doan, this way helps her firm cut the payroll significantly and at the same time allows it to have better people. Eden Real’s experiment has produced positive results with a total of 42 houses in Can Tho City sold over three weeks.
“We are ready to adjust the strategy in accordance with the market’s changes,” Doan said, adding this is only the first step of a long journey.
Saigon Thuong Tin Real Estate Joint Stock Company, or Sacomreal, earlier embraced the same employment model. Ngo Vi Hung, general director of Sacomreal, said this model had helped his firm expand its sales network that now has thousands of people nationwide besides the 120 full-time employees.
However, Hung noted the weak point of the new business model is the lack of professionalism of certain brokers.
Steel trade structure changes as demand drops
A sharp fall in the domestic demand for construction steel products last year prompted a surge in steel export and choked off steel import, the steel association said.
The country last year exported over 235,000 tons of construction steel compared to the preceding year’s 160,000 tons, according to the Vietnam Steel Association (VSA). Meanwhile, the amount of imported construction steel in 2011 fell to around 327,000 tons from the high of 520,000 tons a year earlier, Nguyen Tien Nghi, vice chairman of the association, told the Daily on Thursday.
Nghi attributed the inverse changes in both steel imports and exports to the low domestic demand, as the national steel consumption in 2011 fell 4% year-on-year to 5.2 million tons.
Since the construction pace of property projects is likely to remain low in the face of economic woes this year, total steel consumption in 2012 is projected to reach some 5.6 million tons, or equal to the figure in 2010, Nghi suggested.
Turnover in information technology reaches US$8.5 billion
The Department of Information Technology estimated that the total turnover in the information technology industry reached more than US$8.5 billion in 2011, at a national conference held in Hanoi last weekend.
Turnover in the electronics hardware sector topped $6.3 billion, up nearly 12 percent over the previous year; turnover in software crossed $1.1 billion, up by 6 percent; and turnover of digital content was nearly $1.1 billion, up by 17 percent year on year.
Foodstuff, consumer products drawing investors
Although Vietnam’s economy faced many set-backs during the past year, food items and consumer products remained unaffected, with well known companies seeking to either invest in this sector or buy a stake in established companies.
At a meeting held between Vietnamese and Korean companies in July last year, Sung Ho Kong, acting director of ASEAN-Korea Centre, said that the food processing sector of Vietnam has caught the eye of many a Korean investor. Seeing potential in this sector and having a high demand for high quality food, several Korean companies now want to take the plunge in Vietnam’s food processing industry.
Korea is currently the second biggest investor in Vietnam with a total investment of US$23 billion. However, they mainly invest in smokestack industries and manufacturing. Thus, the food sector is relatively new and as yet uncovered.
According to market research conducted by prestigious international organizations such as Research and Markets, and Companies and Markets, Vietnam’s food and beverage sector shows high potential for investment.
Many foreign investment funds in Vietnam have shifted investments into other fields like foods, consumer products, health, and education beside real estate. These fields are considered to be less affected by fluctuation in global economy and domestic upheavals.
The Yen Viet Company , processors of the “Bird’s Nest” product, coffee exporter Thai Hoa Corporation, or An Giang Plant Protection Joint Stock Company are listed by Vinacapital, the leading asset management company in investment banking and real estate consultancy in Vietnam. The fund has raked significant profits after it divested from Vinacafe Bien Hoa Joint Stock Company.
Dominic Scriven, CEO of Dragon Capital, said that his company wants to now invest more in food items, consumer products and software services.
Besides new investments, individual investors, local and foreign investment funds are targeting purchase of shares in big food manufacturing companies like Masan, Kinh Do, and Vinamilk. For example, the US investment fund Kohlberg Kravis Roberts decided to buy 10 percent shares of the Masan Group in April last year, for US$159 million. This is the first such investment in Vietnam, and the biggest merger and acquisition of a private company in the history of Vietnam.
In September 2011, PENM II Fund under Bank Invest, one of the leading independent asset managers in the Nordic region, sold 4 million shares of Masan at a total value of more than VND600 billion. This transaction brought in huge profits for the fund.
An M&A expert said that those firms that are in the food and consumer products sector, having a very methodical management system in place, having a steady growth rate, and knowing how to market their brand, will capture the attention of investment funds in 2012.
Vietnam’s leading dairy producer Vinamilk has also attracted many foreign investors. By the end of September last year, although the economy remained stagnant, the company’s revenue rose by 34.8 percent and margin jumped sharply by 10.1 percent, as compared to the same period last year. To achieve this, besides expanding investments, Vinamilk has been seen spending a lot of money in marketing strategies. Currently, many foreign investors and investment funds, including Dragon Capital, are holding shares in Vinamilk.
Although forecasts show that the economy will still face difficulties and challenges this year, the above movements indicate that food items and consumer products will remain focus of attention and draw investors.
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