Business in brief 24 Jan 2013
Two-way trade turnover between Vietnam and Australia in 2012 exceeded US$5 billion, up 29 percent from the previous year. Vietnam’s exports to Australia rose to more than US$3.2 billion, mostly worth of cameras and components (138 percent), petroleum (113 percent), iron and steel (96 percent), pepper (68 percent), means of transport and spare parts (50 percent). Although Vietnam’s imports from Australia stayed roughly US$18 billion (down 17 percent), two-way trade turnover surpassed the level of US$5 billion.
The results of an investigation into Japanese business activity in Asia and Oceania, with a focus on their operations in Vietnam, were released in a report on January 23. The Development Strategy Institute (DSI) and the Ministry of Planning and Investment (MoPI) have co-ordinated with the Japan External Trade Organization (JETRO) to unveil the report. According to JETRO, Japanese investment in Vietnam has hit a record high over the past two years. Last year, for instance, Japan’s investment contributed to a quarter of all new projects in the country, equivalent to around 50 percent of its total capital invested. JETRO said that the real challenge is how to maintain and encourage Japanese investment in Vietnam.
South Korea and Vietnam agreed Thursday to improve their bilateral cooperation in the industrial parts and materials sector, a move that will further expand their economic ties, the Seoul government said. An agreement calling for increased cooperation in the related industries was to be signed in Hanoi later in the day, according to South Korea’s Ministry of Knowledge Economy. Under the agreement, the countries will launch a joint research and development (R&D) project this year to develop 30 new technologies that have already been identified by a joint task force. Industrial parts and materials already make up a large part of bilateral trade between South Korea and Vietnam, accounting for 43 percent or US$9.4 billion out of $21.7 billion in bilateral trade in 2012.
Shares improved on the two exchanges by the end of yesterday afternoon’s session following the information that the State Securities Commission had tightened control on illegal trading on the stock market. A representative yesterday told Vietnam Television (VTV1) that the commission (SSC) had uncovered a major stock price manipulation. After inspecting many securities companies, SSC found a group of investors using various accounts in different companies to purchase stocks. The identities of the violators will be disclosed this week along with the sanctions they face. In addition, the commission on Monday imposed a VND320 million (US$15,300) penalty on Golden Bridge Vietnam Securities Co for enabling customers to short-sell stocks (that is, selling stocks they did not own).
Siemens Energy Service has won a long-term service contract for a 740 MW combined-cycle power plant in Vietnam. The Phu My 3 plant in Ba Ria-Vung Tau province started operation in 2004 and the contract extension will see Siemens service the plant’s two SGT5-4000F turbines, one SST5-5000 steam turbine and three generators for around eight more years once the gas turbines have reached 100,000 equivalent operating hours. Phu My 3 is the first large-scale build-operate-transfer gas fired plant in Vietnam and is operated by Phu My 3 BOT Power Co, which is jointly held by British Petroleum, SembCorp Utilities and a consortium of Kyuden International Corp and Sojitz Corp.
An exhibition was held in HCM City on January 23 to showcase India’s chemical products and promote trade exchange between the two nations. Chairman of the Chemicals, Pharmaceuticals and Cosmetics Export Promotion Council (CHEMEXCIL), Satish W. Wasgh, said that the two-day event aims to boost India’s chemical exports through the consolidation of trade relations, promotion of partnerships and the expansion of the market in Vietnam. Trade turnover between Vietnam and India reached around US$4 billion last year, ranking India among Vietnam’s top ten trade partners. India is currently has substantial investments in Vietnamese oil and gas, steel, mineral exploration, agriculture and food processing industries, with a total registered capital of around US$250 million.
The Australia and New Zealand Banking Group Limited (ANZ) will offer a 2-year fixed mortgage rate of 12.5 percent per annum for any new drawdown from now until February 23, 2013. Head of Retail Banking ANZ Vietnam Duong Duc Hung said, “ANZ always puts customers first. ANZ is the first foreign bank in the market to offer such a competitive mortgage interest rate which is fixed for as long as two years.” The offer applies to all existing and new customers for any new drawdown over VND01 billion during the promotion period. ANZ is offering the interest rates based on a reduction in loan balances for home loans, home investment loans, home construction loans and home equity loans.
The Ministry of Information and Communications (MIC) fined the country’s three largest mobile carriers VND118.5 million yesterday for violating regulations on managing prepaid subscribers. The punishment followed a joint investigation between MIC and the Ministry of Public Security on the use of prepaid subscriptions in HCM City. According to the investigation, Viettel, MobiFone and Vinaphone did not strictly follow MIC’s rules, such as requiring new subscribers to provide personal information when registering for services. Additionally, a number of dealers authorized by the three companies do not meet the ministry’s basic requirements, which include a price list posted in plain view and photocopy and scanner machines to process paperwork. According to the Ministry, Viettel will pay the largest fine (VND70 million), while Vinaphone will forfeit VND25 million and MobiFone will shell out VND23.5 million.
The Bank for Investment and Development of Vietnam (BIDV) has called on the Government to establish a national mortgage company to help reinvigorate the nation’s stalled real estate market. Under the proposal, the new company would be formed with charter capital of VND5 trillion (US$238.1 million) sourced from the Government, official development assistance, deposits and other sources, said BIDV chairman Tran Bac Ha. The company could also operate in refinancing and buying low-income housing loans from commercial banks, helping ease the bad debt and liquidity crises facing the banking system, Ha said. Through its operations, the company could raise another VND50 trillion ($2.4 billion) over the next five years to finance the low-income housing market, equal to 250,000 apartments or 7.5 million square meters of low-income housing, he said.
Samsung Electronics Vietnam (SEV) has announced it gained an export turnover of US$12.72 billion last year. Mobile phone export revenue reached $12.6 billion, while the rest came from vacuum cleaner exports. By the end of 2012, total capital disbursement obtained amounted to $950 million, out of $1.5 billion registered capital from two cell phone projects which were merged into Samsung Complex.
The Ministry of Industry and Trade (MoIT) has allowed the National Coal and Mineral Industries Group (Vinacomin) to continue exporting coal type 5 (medium type) dust in two first quarters of the year. Earlier, MoIT had released a circular to stipulate that from 2013, dust coal type 5 exports will be cancelled to use domestically only. However, according to the coal supply project for fueling thermo-power plants to 2020, toward 2030, after ensuring the supply for domestic production, there will be 1-3 million tons remaining in the 2011-2015 period. Vinacomin also reported that by the end of last year, the amount of coal type 5 dust in stock stood at 1.4 million tons. In 2012, Vinacomin exported 14.4 million tons of coal, including coal type 5 dust.
The leading non-life insurer remains Bao Viet Insurance Corporation with premiums of VND5.4 trillion (US$260 million), accounting for 23.8 per cent of the market share, followed by PetroVietnam Insurance Joint Stock Corporation in second with VND4.6 trillion ($221 million), capturing 20.4 per cent of the market share. Bao Viet saw its growth outstrip the market’s the first time, as it shot up nearly 11 per cent year-on-year. The corporation aims to emulate last year’s growth and retain its proportion of the market share at around 24-25 per cent. The insurance sector experienced a tough year in 2012, but the non-life insurance market has grown by an impressive 10 per cent, with total revenue at over VND22.7 trillion ($1.1 billion).
Atlanta-based East West Manufacturing LLC has added Joseph Tommasini to its staff to assist with the launch of its medical products division in Vietnam. East West is a global contract manufacturer of components and assemblies for companies. Mr. Tommasini is a graduate of the Georgia Institute of Technology with a bachelor’s of science degree in materials engineering and has more than 15 years of experience with medical services companies. Prior to joining East West Manufacturing, he was the senior product engineer/quality engineer at Sanuwave Inc. in Alpharetta. Founded in 2001, East West has factories in China, Vietnam and India, and acts as a customer advocate throughout the manufacturing and supply chain process by negotiating contract, sourcing materials, providing translation services and navigating cultural differences.
