Business in brief in13 Aug 2012
Office rental prices in HCM City are expected to drop a further 10 per cent by the end of the year, but will rise again next year, according to Savills Vietnam. Truong An Duong, research manager of Savills Vietnam, said there would be a continued oversupply of office rental space this year. Savills estimated that construction on 47,000 sq. meters of office space for lease will be completed by the end of this year, and 56,000 sq. meters by next year. Office rental prices dropped by about 13 per cent per year in the 2008-11 period. However, the market for office rentals is expected to recover in the 2013-14 period. Office rental prices are expected to rise by 15 per cent next year, and 12 per cent in 2014. In HCM City, foreign companies occupy 60 per cent of office rental space at A-class and B-class buildings. Companies in the financial sector occupy the largest area (23 per cent) of office rental space.
Although they are newcomers to the aviation industry, private airlines in Vietnam hope to spread their wings on international routes. VietJet Air is making preparations to open international routes, and its first foreign destinations would likely be South Korea and Japan, two markets with potential and stability. The airline expects to launch the first flights at the end of this year. Mekong Air has also announced that it plans to operate more domestic and international flights. For now, though, the carrier’s initial legal capital of VND200 billion (US$9.6 million) allows it to operate only domestic flights. To expand to international markets, the airline signed a strategic agreement with the Export and Import Joint Stock Commercial Bank, which would contribute and raise the legal capital to VND600 billion.
One hundred businesses were given sustainable Vietnamese brand title at an awards ceremony in Hanoi on August 12. The event, co-organized by the Vietnam Union of Science and Technology Associations (VUSTA) and the Vietnam Trademark Application and Development Research Centre, honors outstanding businesses in building trademark. The prize winners were selected from 200 nominated businesses. The top ten awards went to well-known trademarks including Tien Phong Plastic JSC, Cai Lan Oils and Fats Industries Company, Transport Construction JSC No 1, Pyme Pharco JSC, Lavie Company, Power Engineering JSC, Petroleum Technical Service Corporation, and Khanh Hoa Salangine Nest Company. The awards are presented every three years according to the Prime Minister’s regulations.
Shrimp export businesses must meet necessary conditions in terms of capital, human resources and environmental protection methods. The Vietnam Association of Seafood Exporters and Producers (VASEP) has made the proposal to the Ministry of Industry and Trade. VASEP said some small-and medium-sized shrimp producers have to halt their production due to unhealthy competition as they still place immediate benefit above quality. It warned them of losing customers or making compensation if they continue buying shrimp with impurities and make trade frauds. Even worse they will run into serious financial troubles as banks refuse providing more loans for them. VASEP urged the Government to direct the provincial people’s committees to support the shrimp sector in both planning and developing a sustainable manner. Earlier, VASEP had proposed listing tra fish into the production chain with essential conditions attached.
Vietnam’s military-run telecommunications group Viettel has decided to set up a branch in Timor Leste in an effort to expand its operation. The branch will carry out a US$15 million project on telecommunications infrastructure in the country. To date, Timor Leste will be Viettel’s sixth overseas market following Laos, Cambodia, Haiti, Mozambique and Peru. The giant aims to reap overseas revenue of US$791 million and profits of US$94 million in 2012.
Two-way trade between Chile and Vietnam increased 38% in the first six months of this year, reaching US$321 million, according to the Export Promotion Bureau (ProChile). The South American nation enjoyed a trade surplus with Vietnam as its exports rose 41%, generating US$239 million. It mainly exports copper, scrap iron, pine timber, salmon, and crabs, to Vietnam, and imports footwear, cement, clothing, Tra fish, modems and coffee from the Southeast Asian nation. The sharp increase in bilateral trade value was encouraging, given the fact that Chile’s foreign trade only rose 2% in the reviewed period due to the global financial turmoil. ProChile director Félix de Vicente has forecast that with the enforcement of the Chile-Vietnam free trade agreement, bilateral trade will probably fetch US$3 billion in the next three years. Last year, two-way trade hit a record high of US$486.8 million, up 50% over 2010.
A number of Vietnamese exporters reported they have been cheated by their partners in Cameroon since early July, according to the Vietnam Ministry of Industry and Trade (MoIT). The MoIT said the swindlers often offer preferential conditions on order contracts if a deposit of at least 10 percent is transferred online. However, when businesses send the money, the impostors immediately stop all transactions and refuse to deliver the goods causing their victims to lose tens of thousands of US dollars. To avoid such sophisticated swindles and find trustworthy partners in African countries, Vietnamese exporters are advised not to search for partners on the internet which can be used by opportunists to play a trick on genuine businesses. They should require their partners to provide relevant documents and information to prove their legality and send them to the representative Vietnamese agencies in Africa to confirm their validity before conducting any transactions.
Banks want to raise fees on per inter-bank ATM transaction from VND3,300 to VND5,500 in order to make up for major bank losses incurred by sharing card services with small banks. The State Bank of Vietnam has given the green light to banks to charge fees on all internal ATM transactions beginning in 2013. However, many major banks also want the central bank to increase fees on inter-bank ATM transactions. The head of a major bank’s transaction office in HCM City, who declined to be named, said it was necessary to increase fees on inter-bank ATM transactions because the costs for building and operating facilities for ATMs reached hundreds of millions of dong. Expenses include the purchase of ATMs, installations and rental of space
OceanGroup and OceanBank signed a comprehensive co-operative agreement with Viglacera last week to support each other in business and production performance. Under the agreement, OceanGroup and OceanBank will arrange investment capital and financial consultancy for Viglacera’s construction projects and business activities. On the same day, OceanBank also signed a VND500 billion (US$24 million) credit loan agreement with Viglacera, a State-run company specializing in the manufacture of construction materials.
The northern province of Quang Ninh last week opened a technology and equipment transaction floor. It aims to help provincial enterprises access information and advanced technologies including equipment for the coal, environmental treatment, energy conservation, seafood and agro-forestry sectors. It has already attracted 14 businesses to display and transact their products on the floor.
Nipro Pharma Vietnam Co Ltd has started construction of a US$250 pharmaceutical and medical equipment factory in the northern city of Hai Phong’s Thuy Nguyen District. The factory, covering an area of 15ha, is expected to be completed in August next year and become operational in April 2015.
Binh Thuan Province People’s Committee is continuing to investigate roughly 250 delayed tourism investment projects, and where necessary, revoke licenses. These projects were reported to be lagging behind schedule due to complicated compensation procedures, but this was not true in many cases. Binh Thuan has 406 licensed tourism investment projects with investment capital of VND57.3 trillion (US$2.7 billion). Only 157 projects have been completed and gone into operation.
Vietnam Electricity Group (EVN) is under preparation to start work on a seaport for Duyen Hai Thermo-power Center in Tra Vinh Province late this year. EVN leaders told Deputy Prime Minister Hoang Trung Hai, who paid a working trip to Duyen Hai Thermo-power Center over the weekend, that the seaport can handle 30,000-DWT ships and will receive 12 million tons of coal and oil serving the operation of power plants in the center. EVN in June this year signed an engineering, procurement and construction (EPC) contract worth some US$180 million for developing this seaport. The project is scheduled for completion and operation in the third quarter of 2014. Besides, the first power plant of the thermo-power center will start to supply power for the national grid in late 2015. Duyen Hai Thermo-power Center invested by EVN and Malaysia-based Janakuasa Sdn Bhd consists of four coal-fired thermal power plants having a total designed capacity of 4,200 MW. The center has a total investment cost of around US$8 billion.
