Business in brief in 13 April
Vietnamese government on April 12 issued Decree No 31/2012/ND-CP to raise the minimum salary by 220,000 dong/month from current 830,000 dong/month to 1.050 million dong per month. The general minimum salary from May 1, 2012 will be applied on employees, officers, subjects serving the armed force and employees of state offices, political organizations, state agencies the state-controlled one member limited companies operating in line with Law on Business. The general minimum salary will be used as a base to calculate salary frame, allowance, other benefits for officers, staff, employees of state agencies and enterprises. The decree will take effect from June 1, 2012. But regulations of this decree will be calculated from May 1, 2012.
Deputy Prime Minister Vu Van Ninh agreed to an import tax exemption for spare bus parts and accessories that cannot be produced by the local market, the Government website reported on Wednesday. The exemption is part of a program on public transportation investment and development aimed at buses in Ha Noi and HCM City. Ninh stressed that the exemption would only be applied for bus production projects and would need to be ratified by relevant authorities. In addition, the time to implement projects as well as the quantity, quality, categories and value of imported spare parts and accessories needed to be clearly defined. The Ministry of Transport, in co-operation with the Ministry of Planning and Investment, the Ministry of Finance, and the People’s Committees of Ha Noi and HCM City, will take responsibility for issuing specific guidelines to enterprises.
The Vietnam Trade Promotion Agency’s HCM City office is organizing a trip for Vietnamese businesses to participate in the China (Nanning) International Household Furniture Fair and International Mahogany Furniture, Woodcarving Collectibles Exhibition, to be held from April 20 to 23. Businesses registering to participate in the fair through the agency will get a fee discount. The fair offers Vietnamese firms a chance to meet and find partners and buyers as well as catch up with current international furniture market trends.
Nearly 100 Vietnamese businesses should strengthen inspection on food safety and hygiene before exporting to the EU market, Nguyen Xuan Hong, head of the Plant Protection Department under the Ministry of Agriculture and Rural Development (MARD) has warned. The EU will issue a ban on importing fruit and vegetables from Vietnam if another five cases of regulations on food safety and plant quarantine are detected violation after January 15, according to the EU Commission’s Health and Consumers Department. The department said since March, the EU has detected two cases of violations. If this happens again, Vietnam’s fruits and vegetables will lose ground in both EU and international markets. As strict requirements may lead to a ban on Vietnam’s fruit and vegetables imports, the Plant Protection Department has stopped granting quarantine certificates to control the quality of exports to the demanding market.
Vietnam received nearly 1.9 million foreigners and 9.6 million domestic visitors in the first quarter of this year, earning nearly US$2 billion from tourism services. The Ministry of Culture, Sports and Tourism (MCST) said as a result of promoting tourism products, developing trademarks, improving infrastructure at tourism sites and diversifying entertainment services, Vietnam’s tourism is becoming more and more attractive to visitors. Since early this year, a lot of traditional festivals have been held across the country, with more hotels and motels providing better services for tourists. One factor behind this success is that the MCST has closely monitored the organization of festivals at 58 relic sites in 17 provinces and cities. The Vietnam National Administration of Tourism (VNAT) plans to build standard toilets at 50 percent of tourism sites in 2012 and complete the project for the whole country by 2014.
A delegation of the Uzbekistan-Vietnam Friendship Association paid a working visit to the northern province of Bac Ninh on April 11-12 to seek cooperative opportunities in agriculture. The delegation signed a cooperative agreement on aquaculture with the local Department of Agriculture and Rural Development. The Vice President of the Uzbekistan-Vietnam Friendship Association, S. Sultanov, said he was very impressed by aquaculture models in Gia Binh and Thuan Thanh districts. Under the signed agreement, the Syrdarya provincial authorities will provide necessary water surface and other favorable conditions for Vietnam’s laborers and investors from Bac Ninh province to carry out a joint venture of cooperation in the field of aquaculture.
Companies in the country have in the year to date contracted to export 3.6 million tons of rice, up 600,000 tons compared to end-March, according to the Vietnam Food Association (VFA). Vietnam’s key rice importers include China, the Philippines, Indonesia and Malaysia. In particular, China is emerging as a major market for this staple food since the volume of rice export contracts to China has been rising in recent times, said VFA. The country in the first quarter exported more than one million tons of rice, down over 40% in both volume and value year-on-year. However, rice exports are getting back on track as the number of export contracts is picking up. At present, rice traders in the Mekong Delta buy low-grade rice IR50404 at VND4,100-4,400 and VND4,900-5,300 a kilo for fresh and dried grain respectively. The price of commercial grain IR50404 ranges between VND6,700 and 6,900 a kilo.
Vietnam’s only oil refinery, Dung Quat, needs more than $2 billion of investment to expand its processing capacity by nearly a third to 192,000 barrels per day (bpd), or 9.5 million tons per year, a state-run newspaper reported on Friday. The expansion would also require a new crude processing unit for grades from the Middle East or Venezuela, the Dau Tu newspaper said, citing a report from Japanese adviser JGC Corp. The report put $2.2-billion Dung Quat’s current capacity at 149,000 bpd, already above initial output of 130,500 bpd. Dung Quat refines mainly light sweet Bach Ho crude. JGC Corp has been hired to provide a feasibility study on the refinery’s expansion as Vietnam aims to increase its output of domestically refined oil products to cut reliance on imports. Dung Quat now meets a third of domestic demand. Last month, Dung Quat’s operator said the refiner was seeking to sell a 49 percent stake to foreign investors to raise funds and boost its capacity by more than half.
Phu Quoc Island of the Mekong Delta province of Kien Giang is set to become an eco-tourism and international trading center. Under the province’s maritime economic development program for the period 2011-2015, Kien Giang will focus its investment in areas where it excels such as fishing, tourism, maritime transport, fishery services, the production of construction materials and processing of agricultural products. The province is also expected to become a leader in maritime operations and will introduce socio-economic development combined with national security. Having so much potential for maritime economic development, Kien Giang also has the advantage of having two border gate economic zones – Duong Dong and Ha Tien. It also boasts a lot of beautiful countryside and is in an excellent position to develop its trade, services and tourist industry.
The French cruise ship Princess Danae on Tuesday arrived in Halong with around 500 cruise passengers and crew members on board, starting a six-day trans-Vietnam trip. This is the first Vietnam port call by the cruise ship this year. Saigontourist Travel Service Company, which is serving these guests, said tourists were scheduled to visit famous sites such as Halong Bay, Hon Gai fishing village, and Bai Tho Mountain along with attractions in the capital of Hanoi. The Princess Danae on Wednesday will call at Tien Sa Port in the central city of Danang for the passengers to join tours in the city and the two neighboring provinces of Quang Nam and Thua Thien-Hue where the World Heritage sites like Hue and Hoi An are located. In the southern region, passengers will be visiting HCMC and the Mekong Delta city of My Tho. The vessel will leave Vietnam this Sunday.
Prudential Vietnam Life Insurance Co. Ltd. has put its 2011 total premium revenue at VND6 trillion, a 12% year-on-year increase, re-enforcing its leading position with 39% market share. Its new business premiums grew to a record high of nearly VND1,400 billion while total investment income reached over VND2,800 billion, rising by 28% against the previous year. The insurer reported VND993 billion in pre-tax profit. This was the eighth consecutive year Prudential had reported profits from its operations in Vietnam. The firm has also announced a special bonus of VND430 billion to around 104,000 customers. Prudential customers who owned participating policies issued before January 1, 2006 and maturing between January 1, 2008 and March 31, 2013 are eligible for this bonus.
Vietinbank (CTG) announced it had finished issuing nearly 598.8 million shares to increase its charter capital to VND26.2 trillion (US$1.2 billion) from VND20.2 trillion ($961.9 million). Around 80.3 per cent of the shares were sold to State shareholders. Funding for the issuance was raised from undistributed profit last year and capital surplus. The bank has decided to list more than 117.9 million shares, which were issued to non-state shareholders.
Six listed firms were fined for violating disclosure regulations this week, the State Securities Commission reported. Construction firm Chi Linh (MCL), Yen Bai Cement and Minerals (YBC), Cavico Manpower Services (CMS), Drilling Mud Corp (PVC) and Huu Nghi Vinh Sinh Mining and Mechanic (MAX) were fined VND60-70 million (US$2,800-3,000) each for failing to release financial statements on time. Property developer Idico Petroleum (PXL) was fined VND40 million ($1,900) for failing to buy back 1 million shares as it had previously registered.
Quang Nam Post – Telecoms Construction and Services company (QCC) announced it would delist from the Ha Noi Stock Exchange during its recent annual shareholder meeting. The decision comes following a warning issued by the exchange on March 26 after the company posted losses for a second successive year. Undistributed net profit as of April 6 was VND1 billion (US$47,600) in the red, while the company’s equity as of last year was only VND20.58 billion (less than $1 million). Regarding this year’s targets, QCC aims to reach VND20 billion ($950,000) in revenue and VND1.5 billion ($71,400) in net profit. Dividends are expected to be paid at around 3-5 per cent.
Eighty five Cambodian and Vietnamese companies are taking part in an agricultural fair which opened in Long Binh town on the Cambodian border on Monday. The 2012 Khanh Binh Border Gate Fair, organized by the International Fair and Rural Development Corp, has 120 stalls, displaying and selling farm equipment and produce, processed food, seeds and saplings, electrical goods, garments, interior decoration items, and others. The fair is also aimed at helping Vietnamese and Cambodian businesses explore business opportunities, the organizers said.
Quang Ninh provincial People’s Committee on April 11 granted the investment certificate to Hong Kong-based Texhong Ngan Long Textile Group to build a fiber producing factory in Hai Yen Industrial Zone, Mong Cai City, Quang Ninh province. The fiber factory covers almost 400,000 square meters with total estimated cost of US$300 million. In the first and second phases, the group will build a complex of four fiber workshops and a cloth producing factory and support works, which is expected to employ 4,500 locals. In the third phase, the company will build two more fiber workshops and increase workforce by 2,500 employees. Total capacity of the first and second phases is 92,750 tons per year, phase 3 at 46,375 tons per year.
