Business in brief in 14 May
Electricity prices may rise by between 5 and 10 per cent, if a proposal by the country’s power provider Electricity of Vietnam (EVN) is approved. Head of the Ministry of Finance’s Price Management Department Nguyen Tien Thoa, said EVN had three proposals on the table of price rises between 5 and 10 per cent. Thoa said electricity production input costs had risen by 3.3 per cent, since the last price rise in December last year. He said factors influencing the price rise included an exchange rate rise of 0.6 per cent, gas fuel price rises of 10.4 per cent, and a 40 per cent rise for FO oil, while coal prices decreased by 0.3 per cent. EVN’s production costs went up by more than VND15 trillion (US$714.2 million) due to exchange rate differences and other rising costs, he said, adding that the ministries of Industries and Trade (MoIT) and Finance (MoF) would review the proposal in the upcoming time.
The Ministry of Information and Communications has collected ideas on a draft outlining charges for internet access services. Accordingly, internet users at home would have to pay VND24,000 per month for download speeds of more than 256kb/s, and 45 dong per megabyte as an output charge. Under the draft, internet charges in cafes and other public places would be defined by the businesses. It also stipulated that the charge for fixed telephone services inside a region would be VND200 per minute with a monthly subscriber charge of VND20,000.
The massive volumes of cigarettes smuggled into the country are proving to be a big drain on the Government’s revenues. It was around 870 million packs in 2010, or 22.9 per cent of all cigarette consumption in the country, but fell to 750 million packs and 18.2 per cent last year. Last year, it translated into lost taxes of VND3.4 – 3.6 trillion (US$163.4-173 million). The favorite contraband brands used to be JET and HERO though ESSE Lights from South Korea has also become popular since the end of 2010. It is smuggled in through the northern border provinces of Quang Ninh and Lang Son. Most of the smuggling otherwise occurs through southwestern border provinces. Authorities estimate that the domestic tobacco industry loses sales of 18,000 tons of raw materials due to the smuggling and more than 50,000 jobs.
The State Bank of Vietnam Monday set the exchange rate for the U.S. dollar at VND20,828, unchanged from Friday. Hanoi-based dealers said the unofficial gold-shop rate rose temporarily over the weekend due to limited supplies of dollars as banks were closed. State media said remittances to Ho Chi Minh City from Vietnamese working abroad are expected to total $1.28 billion in the first quarter, roughly 25% of total remittances to the city last year. Remittances to Ho Chi Minh City, the country’s economic hub, often account for at least two-thirds of the nationwide total. Along with foreign investment and foreign aid, remittances help to bring in dollars to cushion the impact of the country’s persistent trade deficit on the exchange rate.
Vietnam’s sugar output is expected to reach 1.31 million tons in 2011-12, according to the Ministry of Agriculture and Rural Development. Sugar mills across the country processed a total of 12.6 million tons of sugarcane and produced 1.12 million tons of sugar by the end of April this year, Vietnam news agency reported. The figures represented an increase of 1.28 million tons of sugarcane and 78,700 tons of sugar from the same period last year. The domestic market is now seeing an increase in sugar demand from China, raising sugar price by 200-500 VND per kilogram in the central and southern regions. Sugar price in the north regions remains stable at between 16,500 to 16,700 VND per kilogram.
VietinBank said on Monday its net profit in the first quarter ended March surged 60 percent from a year ago to 1.39 trillion dong ($66.7 million), helped by growth in loans. The Hanoi-based bank, Vietnam’s largest partly private lender by assets, said in a statement it saw a 14 percent annual rise in outstanding loans to 280 trillion dong ($13.44 billion), Its total assets at the end of March rose nearly 28 percent from March 31, 2011 to 406 trillion dong, the statement said.
Mai Kieu Lien, CEO and chairwoman of Vinamilk has been listed as one of the best CEO’s in Asia by the Hong Kong-based Corporate Governance Asia Journal. 58-year-old Lien, the only Vietnamese representative in the list, is recognized not only her contribution to the business development of Vinamilk, social responsibility, and environment protection, but also for her effort to increase the standards of enterprise practice management in Vietnam, according to the organizing board comprised of the journal’s editorial board and economic experts. Other Asian CEO’s honored this time include those from China, the Philippines, Taiwan, Indonesia, India, and South Korea, who are appreciated for leading their enterprises to overcome the hardship amid the global economic turbulence. The award ceremony is scheduled to take place on June 20 in Hong Kong.
The deposit interest rates are likely to ease to 10% per annum by the end of this year. The deposit interest rates are likely to ease to 10% per annum by the end of this year, said Truong Van Phuoc, CEO of Vietnam Export Import Commercial Joint Stock Bank (EIB), quoting Governor of the State Bank of Vietnam (SBV), as saying in a meeting early May. That the central bank capped short-term lending rates at 15% p.a. for four prioritized sectors has certain impact on EIB’s operation as lending to agriculture, exports, small and medium enterprises (SMEs) and supporting industries account for 90% of the lender’s total credits, Phuoc added. The HOSE-listed lender currently spares VND6 trillion preferential loans for these four sectors.
The two-way trade turnover between Vietnam and Brazil in the first quarter of the year reached US$366.8 million, up 32 percent over the same period last year. Brazil’s exports to Vietnam were estimated at US$172.247 million and its imports at US$194.601 million, up 34 and 30 percent, respectively. Brazil exported mainly soybeans, cigarette, cotton, wood, iron and steel to Vietnam and it imported footwear, printing machines, rubber, and hand-made fibers from the country. The trade turnover between the two countries in 2011 exceeded US$1 billion for the first time, up 53.8 percent against 2010.
Tuna export value to Japan in the first quarter of 2012 saw a sharp year-on-year increase of 99.5 percent to US$26.4 million, said the Vietnam Association of Seafood Exporters and Producers (VASEP). The association attributed the increase to Japan’s increasing demand for tuna and its reducing tuna output. Tuna exports to Japan are expected to increase further by the end of this year, VASEP said, so processors should improve the quality of products and the state should have favorable policies to encourage farmers to rear tuna. Last year, Japan imported 12,000 tons of tuna for domestic consumption.
Total auto sales in April decreased by 20% from March and 37% from the same period last year, says the latest report by VAMA. Accordingly, 18 VAMA members sold 6,004 vehicles this month, 1,541 units less than the previous month and 3,554 units less than a year earlier. Sales of CKD vehicles saw a sharp decline of 24% against March, with 5,504 CKD units, while those of CBU vehicles was down 23% to 1,478 units. In January, VAMA set a record low of selling only 4,274 vehicles, the lowest level over the past three years. It then rose gradually to 6,116 units in the following month. VAMA’s four-month sales reached 24,102 vehicles, tumbling 36% from the same period last year with sales in the personal car (PC) segment down 41.7%, MPV, SUV and cross-overs were down 48%, and truck, pick-up and van down 29%.
Ho Chi Minh City-based Esuhai Co Ltd has become the first privately-owned firm to receive ODA (Official Development Assistance) loans, which have long been granted only to government-related projects. Esuhai yesterday broke ground on the construction of its Japan – Vietnam Center for Technological Workforce Training and Development, a project funded by the Japanese International Cooperation Agency (JICA) via ODA loans. The assistance is made under a plan that JICA will transfer capital to the Asia Commercial Bank (ACB), which will later offer a loan worth 200 million yen, or VND52 billion (US$2.5 million) to Esuhai to invest in the center.
Trai Viet Ltd. Company (Vietfarm) exported the first batch of chicken eggs to Hong Kong by sea on May 11th, according to leaders of the Company. This was the first time Vietfarm exported fresh chicken eggs to Hong Kong and 144,000 fresh chicken eggs are now on the way to the market to then be supplied to local supermarkets, the Company’s Director, Dam Van Hoat, said on May 12th. Vietfarm is a Vietnamese large chicken egg producer and exporter, but it mainly exports salted eggs to China and Hong Kong. All the exported eggs had been taken high-quality chicken farms and they had been carefully examined by local veterinary agencies before being exported, the Director ensured.
Since early this year, Can Tho has granted licenses to 10 projects in industrial zones (IZs) with a total capitalization of US$76 million. Currently, the Mekong Delta city has 198 projects valued at nearly US$1.6 billion. These projects operate in the fields of processing food, agriculture, forestry, seafood, footwear, fertilizers, chemicals, iron and steel and automobile assembly. The city’s IZs have created jobs for 34,000 local laborers and earned US$380.7 million in revenue over the past four months, up 72.4 percent against the same period last year, export turnover rose by 63 percent to US$133.4 million.
Binh Duong province takes the lead in attracting foreign direct investment (FDI) in the first four months of this year, with 1.6 billion USD, accounting for 37.2 percent of the country’s total FDI. The Binh Duong Tokyu Urban Residential Area project is the largest project in the locality, with total registered capital of 1.2 billion USD. The Binh Duong Provincial People’s Committee on May 11 granted an investment license to the Japanese Dai Nippon Printing – DNP group which specializes in producing and trading printing and packaging machinery and equipment. The group will build a factory at My Phuoc 3 Industrial Zone in Binh Duong to produce film templates for the packaging industry, with total investment capital of 35 million USD in the first phase. Japan has so far invested in 167 projects, ranking first among 35 countries and territories investing in Binh Duong province.
