Business in brief in 8 June
Vietnam’s Ministry of Finance has hiked import taxes on gasoline, diesel, kerosene and fuel oil effective Friday, or two weeks after its last hike, the MOF said on its website Friday. The new import tax for gasoline is now 7%, up from 4%, while import tariffs on kerosene and fuel oil have been raised to 8% from 5%. The tax rate for diesel is hiked to 6% from 3%. The hike in import taxes came, just a day after the MOF cut retail prices of oil products reflecting the recent falls in global oil prices. Vietnam last adjusted its import tariffs on May 24, when it hiked import taxes on gasoline to 4% from 2%, diesel to 3% from 2%, and kerosene and fuel oil to 5% from 3%.
The list of 294 reputable export businesses in 2011 was announced by the Ministry of Industry and Trade (MoIT) on June 8. All the listed companies were credited for neither losing profits in 2010 and 2011, nor violate Vietnamese laws and international business laws to face any complaints about their trade frauds. In addition, they all strictly followed export contracts to the letter and fulfilled their tax payment duties. Their exports in 2011 achieved about US$20 million in terms of footwear, US$15 million (garment), US$10 million (coffee, seafood), US$8 million (timber products), US$6 million (rice and cashew nuts), US$5 million (unprocessed rubber), US$4 million (pepper), US$2 million (vegetables and fruit), and US$1 million (tea). The list of export businesses are updated at www.moit.gov.vn. In 2010, there were 284 reputable export businesses, including 49 companies involved in seafood production, 38 in garment manufacturing, 32 in rice shipment and 27 in rubber plantation.
The Vietnamese Embassy in coordination with the Argentina Chamber of Commerce, Industry and Production have worked with Argentinian businesses on the possibility of promoting trade and investment cooperation. At the working session on June 7, Ambassador Nguyen Van Dao briefed them on Vietnam’s recent achievements in its industrialization and modernization process. With regard to Vietnam’s growing relations with Latin America, he said, two-way trade turnover between Vietnam and Argentina hit a record high of US$971,79 million in 2011, up 17 percent over 2010, with exports from Vietnam accounting for US$166 million, according to the Argentinian Customs Office. Vietnam exported to Argentina sport wear and accessories, rubber, machinery, mechanical equipment, and garments and imported soya bean powder and oil, beef, wheat, maize, tanned hide, timber and cotton from the country.
Since early this year, the State Bank of Vietnam (SBV) has purchased US$9 billion, equal to VND180,000 billion. In January, SBV invested VND60,000 billion in agricultural and rural programs. According to plan, SBV will co-ordinate efforts with ministries and sectors to set up a Debt and Asset Trading Company (DATC) with the aim of tackling bad debts worth VND 100,000 billion.
The State Bank of Vietnam (SBV), the country’s central bank said it has pumped 18 trillion dong into the market and bought back about $9 billion, said the SBV Governor Nguyen Van Binh. The central bank injected 60 trillion dong to serve agricultural development in Feb/2012 and 30 trillion dong to aid ailing commercial banks in late 2011, the SBV Governor added. Besides, the SBV has gradually loosened the monetary policies after inflation slowed since Feb/2012.
Vietnam was estimated to run a budget deficit of 46.8 trillion dong in the first five months of the year, equaling to 33.3% of the country’s full-year target, the Ministry of Finance (MOF) said in a report on June 6. In details, Vietnam is estimated to have collected a total of 291.3 trillion dong state budget in the period, meeting 39.3% of the whole year plan and rising 3% on year. Meanwhile, the country’s total expenditures from state budget is estimated to reach 338 trillion dong, meeting 37.4% year plan and increasing 10.8% from a year earlier, the data showed. In May alone, the Southeast Asia country’s state budget collection reached 55.5 trillion dong while its state budget spending was 74 trillion dong, resulting in a state budget deficit of 18.5 trillion dong ($0.88 billion), the MOF added.
Vietnam Development Bank sold 2.46 trillion dong worth of 3- and 5-year government-guaranteed bonds, or 49.2% of the offered value, at the yield of 9.5-9.68% p.a. in an auction held on June 7, said the Hanoi Stock Exchange (HNX). The bid-to-cover ratio was 1.3, including ten bidders registered for 3.4 trillion dong 3-year bonds, seeking for yields of 9.45-11.15% per annum, and six bids for 3.16 trillion dong worth of 5-year bonds with expected yields ranging from 9.38-12% p.a., the bourse said. Fixing for 3-year government bonds was 9.5% while that for 5-year tenor was 9.68%. In related news, the State Bank of Vietnam (SBV) on the same day announced to adjust down benchmark interest rates and deposit rate caps for the fourth time this year by another 2% from June 11. Yields on 5-year debts slipped 0.05% to 9.47%, the lowest level since June 30, 2009, according to a daily fixing rate from banks compiled by Bloomberg. The yield dropped 0.14% this week.
The first Indonesian Trade, Tourism and Investment Forum, with the theme of "Indonesia-Vietnam: Partnership for Prosperity", will be held in the capital next Monday. Co-organized by the Indonesian Embassy and the Vietnam Chamber of Commerce and Industry, the two-day forum would be an excellent opportunity for the two countries to further strengthen bilateral relations.
A representative office of Japan’s Nippon Steel Engineering (NSE) Group officially opened in Ho Chi Minh City on June 7. The Japanese group, which specializes in supplying energy facilities, pipelines and steelmaking equipment for architecture projects, has set up its rep. offices in China, India, Brazil and other countries in Southeast Asia and Europe. The group has engaged in steel import-export and manufacturing activities in Vietnam for 10 years. Last year it built a factory to produce steel pipes in Ba Ria-Vung Tau province. NSE President Takahashi Makoto said the group plans to raise its turnover from overseas by 40 percent and highly values Vietnam’s potential market. Japan’s consul general to HCM City, Hinda Harumitsu, congratulated NSE on opening its office and revealed that 570 Japanese businesses are operating in the city.
Dien Quang Lamp joint stock company (JSC) and Venezuela’s industrial petroleum and gas group have turned out their first test products following the recent signing of an agreement on the production of energy saving bulbs. Under the agreement, the two companies have set up a joint venture factory named Vietven. The factory, which covers 80,000 square meters in Paraguana industrial zone, Venezuela, is designed to produce 74 million products a year. According to plan, it will officially go into operation next month. Dien Quang’s JSC has invested more than US$300 million in the project.
Since early this year, the Ho Chi Minh City Department of Planning and Investment has granted licenses to 143 FDI projects, valued at US$180 million in total. With more capital added to 35 projects already in operation, the total amount of FDI funding has reached US$470 million, a four-fold increase compared to the same period last year. Singapore has taken the lead with more than $94 million, followed by Japan with $20.5 million. Most newly-licensed projects are in the automobile, and science and technology sectors, with only a few projects focused on real estate, financial and banking sectors.
Four new projects totaling more than VND46 trillion (US$2.2 billion) have recently been licensed by the Dung Quat Economic Zone (EZ) Management Board in the central province of Quang Ngai. They include the US$2 billion Dung Quat thermal power plant invested by Semcorp Utilities from Singapore, the VND3.8 trillion industrial-service-urban zone by the Vietnam-Singapore IZ Company, and two seaports worth a total of VND1.4 trillion. In addition, the Dung Quat EZ has received increasing foreign investment from the Republic of Korea, Singapore and Japan. So far the zone has licensed 114 projects.
More than 200 domestic and foreign bankers, creditors and property developers from 16 countries around the world gathered at a banking and investment conference in Danang on June 7-8. The event provided a good chance for domestic and foreign businesses to access information about investment opportunities in real estate, tourism, retail, banking, infrastructure and energy in Vietnam, particularly in Danang. It offered a special session for Danang leaders to introduce the city’s investment environment and opportunities, as well as incentive policies.
Up to 22 of the 26 listed securities companies reported profits in the first quarter of this year, led by Saigon Securities Inc (SSI) who posted a pre-tax profit of VND205 billion (US$9.8 million) during the period. On the other end of spectrum, Sacombank Securities Co (SBS) topped the losers with an after-tax loss of VND660 billion ($31.4 million). Last year, it also posted a total loss of VND798 billion ($38 million), lifting its total accumulated loss by the end of March to over VND1.42 trillion ($67.6 million), exceeding its charter capital. Currently, only SME Securities Co (SME) has yet to submit the quarter financial report.
The Vietnam Architecture Exhibition opened at the Saigon Convention and Exhibition Centre in District 7 yesterday, focusing on "green architecture". It has around 300 booths with more than 90 local and international exhibitors displaying environmentally friendly architecture, building materials and property projects. The exhibition also includes conferences.
TBC-Ball Beverage Can Vietnam Limited Company yesterday commenced the operation of its US$60 million aluminum can manufacturing factory in the southern province of Binh Duong. The plant will have an initial annual production capacity of 850 million cans, mostly supplying contracted customers in Vietnam as well as some beverage producers in neighboring countries, according to the company. The new facility covers eight hectares in Vietnam Singapore Industrial Park II Expansion (VSIP II Expansion) in the province’s Tan Uyen District. TBC-Ball Beverage Can Vietnam Limited Company is a 50:50 joint venture between Ball Corporation of the U.S. and Thai Beverage Can Limited (Thailand).
Fujikura Fiber Optics Vietnam Co., Ltd (FOV) on Wednesday announced the official operation of its second factory at VSIP I. The one-hectare expansion of FOV was kicked off since the success of its first plant in VSIP I from 2001. This second project will turn out fiber optic components for use in telecommunication and data communication systems with the high technology transferred from Fujikura Group in Japan. VSIPs in Binh Duong have this year to date attracted an additionalUS$468 million in total registered investment capital, an increase of 60% compared to the same period last year.
Dien Hong Printing (DHI) targets to achieve VND19 billion (US$904,700) in revenue and a net profit of VND3.4 billion. Dividends this year will probably be paid at 10 per cent. Meanwhile, last year’s revenue reached VND15.6 billion, accounting for only 62 per cent of the previous year’s figure, and it posted a loss of VND4.1 billion. Therefore, the management board asked shareholders not to pay dividends for last year.
Song Hong Construction (ICG) will increase its charter capital from VND200 billion (US$9.5 million) to VND400 billion ($19 million). The decision was made during its recent shareholder meeting. However, the company failed to give a specific time for the increase. Meanwhile, its current charter capital will remain unchanged until the end of this year. Song Hong aims to earn VND118.3 billion ($5.63 million) in revenue and VND23.4 billion in gross profit this year. Dividends are expected to be paid at 8 per cent. The major source of company profit is the Kim Lien B4 project, expected to bring about a VND23 billion ($1.09 million) profit. However, due to the upheavals in the real estate market, Song Hong will reschedule or sell some projects.
Property developer FLC (FLC) plans to merge with its affiliate FLC Land by issuing 60.18 million shares to swap for 51 million FLC Land shares – equivalent to a 1:1.18 ratio of exchange. After the merger, FLC’s charter capital will increase to VND771.8 billion (US$36.7 million), while total assets reach VND2 trillion. Accordingly, FLC is said to benefit VND160 billion ($7.6 million) from the sale of the FLC Landmark Tower project. However, company bank loans after merger will be approximately VND200 billion ($9.5 million). FLC’s shareholder meeting has approved this year’s dividend payment at 15 per cent.
Several property projects targeted at low- and medium-income earners will be shown to prospective buyers during the second Tuan le an cu (Settlement Week), which opened yesterday (June 7) in Saigon Exhibition and Convention Centre. The event, held from June 7 to 10, is organized by Eden Real Co. in collaboration with Gia Phuc Media Co. Huynh Kim Doan, director of Eden Real Co., said the property projects were launched with the aim of warming up the still-sluggish market. Most participating enterprises said buyers would be required to pay half of the value, and the rest on installment within one to two years at a preferential interest rate.
The Ministry of Finance plans to remove the names of several companies from its list of qualified auditing-service companies. Auditing companies that fail to notify the ministry within one year that they are operating will be taken off the list. Those that will be removed also include companies that do not have enough conditions to operate, as well as those that do not perform their duties, such as annually reporting their activities and their lists of auditors. In addition, auditing companies that violate State laws on examinations and inspections will also be removed from the list. The Finance Ministry posts the list of qualified auditing companies on its website each year.
The Nghe An Province People’s Committee has revealed that some US and Hong Kong investors wanted to invest in an international high-grade resort and tourism complex in Cua Lo Town. They also plan to open a sea tourism route from China’s Hainan Province to the locality. The two sides have been discussing implementation of the process.
