The State Bank stated on February 27 that bitcoin and other virtual currencies are not legal tender or a permitted means of payment in Vietnam.
Credit institutions are not allowed to use them while supplying services to customers.
The ownership and trading of bitcoin and similar currencies poses many risks as they are not protected by the law.
The bank warned organisations and individuals not to invest or conduct any payment with them.
First appearing on the Japan-based Mt.Gox exchange in June 2010, bitcoin has been widely used since early 2013 for payment and investment.
Many governments, including Thailand, Russia, France, China and Norway, do not recognise it as a legal currency.Metro Cash & Carry launches new business strategy
Metro Cash & Carry Vietnam has embarked on a new business strategy in Vietnam, aiming to become the preferred choice of professional businesspersons.
This was announced by Philippe Bacac, Chairman and Managing Director of Metro Cash & Carry Vietnam on February 27 at conference in Ho Chi Minh City that saw more than 1,000 business representatives in attendance.
Addressing the event, Philippe Bacac underscored that fundamentally the strategy focuses on creating better management information systems and distribution channels that link up suppliers with manufacturers.
With the assistance of METRO, suppliers will have improved capabilities to understand and meet the expectations of manufactures with quality product produced on a timely and economical manner and in turn boost sales and profitability.
19 Metro Cash & Carry distributors throughout the country have now served about 1 million professional customers. The volume of Vietnamese goods at METRO centres account for over 95%.
Annually, the group also directly and indirectly purchases made-in-Vietnam goods worth up to US$50 million to provide a number of METRO centers worldwide.Dong Nai bridge project gets approval
Construction of a new bridge linking Binh Duong city and Bien Hoa city has received final approval and will get underway in early 2015.
A total investment of VND800-billion has been allocated for the new bridge crossing the Dong Nai River, which aims to shorten travel time between the two provinces and promote economic development in the southern and southeast economic regions.
Having an estimated length of over 2.8 kilometers, the bridge will have four lanes for vehicles with a design speed of 80 km per hour.
The construction will be built under Build-and-Transfer (BT) and build-operate-transfer (BOT) models.Lotte wants to further operations in Vietnam
With the hope of expanding future operations in Vietnam, executives of the Lotte retail group from the Republic of Korea plan to develop Lotte Vietnam into one of its leading branches abroad.
Visiting and exploring investment opportunities in the northern province of Ha Nam is part of the scheme, said Director General of Lotte Centre Hanoi Lee Jong Kook during his working session with local authorities on February 27.
The official spoke highly of the province's socio-economic progress in recent years and its foreign investment attraction policies.
He also underlined the encouraging transport links as a local advantage to facilitate operations for overseas investors, including Lotte - which hopes to make contributions to the locality's development.
The group was suggested a list of places where it can pour money into building trade centres.
Lotte operates in many countries such as China, Japan and Indonesia in trade and high-quality services.
Lotte Mart trade centres can be found in Ho Chi Minh City, central Danang city and Binh Thuan province, and the southern provinces of Binh Dinh and Dong Nai.
The Hanoi centre will be launched in March.South Africa seeks wood industry ties with Binh Dinh
South Africa wants to partner with the central province of Binh Dinh in the wood industry and tourism.
South African Ambassador to Vietnam Kgomotso Ruth Magau expressed the desire during a workshop held in the province on February 27.
The ambassador stressed that Vietnam is now one of her country's important economic partners so that South Africa is willing to create the best conditions for Vietnamese investors.
First Secretary of the Republic of South Africa MC Van Der Westhuizen said the wood industry is a very promising sector in his country, where there is abundant resources of raw materials.
Meanwhile, Binh Dinh is one of Vietnam's three largest wood production localities, generating US$2.3 billion in export turnover since 2010. The locality ships its wooden products to 70 countries and territories across the world.
South Africa is calling for investment in farm produce processing, automotive and support industries, chemicals and plastics, electronics, IT and communications, metallurgy, transportation, garment and textiles, footwear and tourism.
In 2013, Vietnam's exports to South Africa hit US$1.061 billion and imported US$155 million worth of goods from the country.Foreign tourists up in February
The number of foreign guests to Viet Nam in February picked up 8.48% against last month and 47.6% against the same period last year.
In the first two months, 1.6 million foreigners arrived in Viet Nam, posting a year-on-year increase of 33.4%.
Up to 992,129 came for tourism, up 33.37%. The number of business visitors was 270,854, up 32.31%. Those visiting relatives and for other purposes were 268,981 and 86,236, respectively.
Markets sending a high number of visitors were Germany, Hong Kong, Russia, China, Cambodia, the Philippines and Italy.
During the reviewed period, domestic guests touched 9.5 million.
The tourism sector earned VND 47 trillion in turnover.
This year, Viet Nam hopes to welcome 8 million foreign visitors and 37 million domestic guests.IFC helps build more homes for mid-income earners in Vietnam
International Finance Corporation (IFC), a member of the World Bank Group, is financing Nam Long Investment Corp to build 8,000 apartments for mid-income homebuyers in Ho Chi Minh City by 2017.
The financial support aims to alleviate an acute shortage of affordable housing in the country's biggest city.
IFC, in a statement released today, states that the $7.5 million equity investment will support Nam Long's plan to build more housing units under its EHome brand, which was launched 10 years ago as its first affordable-housing project.
Nam Long is a market leader of affordable-housing developments in Ho Chi Minh City at present. The company has sold more than 3,000 housing units, costing between $25,000 and $50,000 each. The costs equal two to four times the average annual income of most households in Ho Chi Minh City. This has contributed to fulfilling the estimated demand of about 70,000 housing units a year from low- to mid-income earners in the city.
"IFC's investment is a stamp of approval for our competitive advantage in affordable housing and in Vietnam, especially given the funding constraints in the capital markets now. This also serves as recognition of our strong commitment to corporate governance and quality products," said Nguyen Vinh Tran, chief executive officer of Nam Long Investment Corp.
In addition to the financing package, IFC is helping the company improve its environmental and social practices, and adopt higher energy-efficiency standards for its buildings.
With IFC's advice, Nam Long is developing a pilot building with green features that comply with Vietnam's Building Energy-Efficiency Code, which took effect on November 15 and aims to cut energy costs and greenhouse-gas emissions. The new building is expected to reduce energy consumption by 20 per cent and is a step toward raising industry standards and promoting sustainability and energy efficiency in Vietnam.
"Although the last few years have been challenging for Vietnam's property market, there is still strong, fundamental demand for affordable housing as Vietnam continues to urbanize," said Simon Andrews, IFC's regional manager for Cambodia, Lao PDR, Myanmar, Thailand, and Vietnam.
"Nam Long sets the quality benchmark for affordable housing in Vietnam with well-planned and well-built developments. By supporting the company, we help more of Vietnam's growing middleclass achieve their dreams of home ownership," he added.Agribank, NongHyup Bank in money transfer deal
Agribank and NongHyup Bank on Tuesday struck a cooperation deal to provide money transfer service for Vietnamese guest workers in South Korea.
In addition to the remittance service, the two sides will be joining hands to offer financial support for Vietnamese employees through the employment permit system (EPS).
EPS allows employers who cannot hire native workers to legally employ foreigners. This system of the Korean government is designed to monitor foreign guest workers in Korea.
To subscribe to the service, Vietnamese workers should open an account at NongHyup Bank and maintain it until they have settled all their loans owed to Agribank.
Main customers of Agribank and NongHyup Bank are in the agriculture sector.High export targets and challenges for Vietnam
Vietnam hopes to achieve export growth of 10 percent this year compared to that of 2013 under the 2014 socio-economic development plan approved by the National Assembly, Nhan Dan (People) online newspaper reported on February 20.
This is indeed a major challenge for the country at a time when the world economy is forecast to face continuing difficulties that will reduce consumption demands and lower the prices of many types of export goods.
In addition, protectionism is generally increasing around the world, particularly in the form of anti-dumping lawsuits and technical barriers, making it difficult for Vietnamese exporters to develop markets and seek partners.
The structure of Vietnam's exports is also not optimised, with a low proportion of processed goods and an abundance of low value-added products (especially agricultural products), in addition to a heavy dependence on imported materials and equipment from abroad.
The export revenue of foreign-invested companies accounts for a large proportion of the total, particularly that of high-tech products such as computers and phones.
To fulfill the target set for 2014, there must be close co-ordination between ministries, sectors and enterprises, with the leading role played by the Ministry of Industry and Trade.
It also requires comprehensive measures to ease difficulties for enterprises and facilitate their business activities in gaining access to loans, purchasing or leasing land and performing administrative procedures.
It is necessary to increase activities seeking out of the furnace trailer song markets and those expanding and boosting trade promotion programmes, with the focus placed on developing countries, potential and emerging markets.
There should be policies put in place to support the consumption and export of agricultural and aquatic products, in addition to major export products such as textiles and footwear.
To reduce the dependence on imported materials, domestic production needs to be fostered, particularly the enhancement of supporting industries and industries with great comparative advantages and high levels of competitiveness.
The communication work and the role of the Vietnamese trade offices abroad are also of great importance, as they will expediently grasp the changes of policies and mechanisms related to exports, announcing them to domestic agencies which can then better handle potential problems.
This year, Vietnam is on the way to negotiate free trade agreements with other partners, including the Trans-Pacific Partnership (TPP), which once signed are expected to open up big opportunities for the country's major exporting products.
Thus, domestic enterprises should utilise the favourable conditions from such agreements to boost export and enhance the efficiency of exports to other member countries.Vegetable and fruit exports to Japan to increase 25%
Viet Nam will promote fruit and vegetable exports to Japan in coming years due to high demand from there, noted the Ministry of Industry and Trade's Asia Pacific Market Department.
The department said the total export value of Vietnamese vegetables and fruits to Japan is expected to increase to US$77 million in 2015 and $135 million in 2020.
Koshida Ryu, a farming expert of the Japan International Cooperation Agency (JICA), claimed that not only dragon fruit and mango but also other kinds of Vietnamese fruit could enter the Japanese market, including rambutan, milk fruit and longan, reported the Thoi bao Kinh te Viet Nam (VnEconomy) newspaper.
Japanese consumers have tasted Vietnamese fruits during tours to the Cuu Long (Mekong) Delta region, and they enjoy the local fruit taste.
According to Viet Nam's General Customs Department, the export value of the country's vegetable and fruit products to Japan gained a year-on-year increase of 16.78 per cent in 2012, reaching $54.65 million, and of 12.03 per cent in 2013, reaching $61.22 million.
Some kinds of Vietnamese fruit have built a strong reputation in the Japanese market, such as Hoa Loc mango, Chin Hoa durian and Nam Roi grapefruit.
The increase was due to preferential tariffs created under the Viet Nam-Japan Economic Partnership Agreement (VJEPA).
However, Vietnamese vegetable and fruit export volume is still only a small segment of Japan's total vegetable and fruit imports, accounting for only 0.6-0.9 per cent of the total.
To promote exports to Japan, Viet Nam should pay attention to the quality of those products because Japan has strict quality and food hygiene and safety standards.
Additionally, by 2020, Vietnamese enterprises should diversify vegetable and fruit products to Japan, especially for tropical fruits, such as bananas, pineapples, mangoes, oranges, lemons, onions, ginger, carrots, and peppers.Amended law aims at more transparent investment climate
Creating a more transparent investment climate, amending and adding new administrative procedures and addressing difficulties in gauging investment performance are the key targets of the amended Investment Law.
This was discussed at a workshop held to gather opinions from industry insiders in Ha Noi yesterday.
Speaking at the workshop, Deputy Minister of Planning and Investment Dang Huy Dong said the amended Investment Law needed to clarify four issues: defining foreign investors, procedures to set up a business with foreign investors, procedures for capital contributions to buy shares and essential issues to implement a one-door policy.
A representative of the Viet Nam Oil and Gas Group (PetroVietnam) noted that the amended investment law is adaptable to localities and provinces as these areas are thirsty for foreign investments.
The difficulty was that foreign investors were still skeptical about the implementation of administrative procedures for business registrations or investment certificates, he said.
Nguyen Thanh Tra, a representative of a law firm, remarked that foreign investors were now unwilling to buy stock from local companies. The existing law did not stipulate whether investors who buy shares that constitute less than a 49 per cent stake in a local company should obtain an investment certificate. He added that the amended law needed to clarify this issue.
To ensure consistency and transparency, the draft regulations should not discriminate between domestic and foreign investors. If the law is changed, incentives for investors should remain unchanged.
In addition, the open-door policy was also enacted to address procedures on investments, land and construction through the agency of investment certification.
The amended law will be submitted to the National Assembly for approval this year. The current Investment Law consist of 10 chapters and 77 sections enacted in 2005.
After more than eight years of implementation, the current Investment Law has proved to have a number of limitations and shortcomings.
In particular, the sections on investment industries and investment areas are haphazard and ineffective. The provisions on investment conditions and procedures are still unclear and unfeasible. This does not create an equal legal framework for both domestic and foreign investors. -Rung Toan Cau tries to collect on empty promise
More signs of evident scams from Rung Toan Cau Company continue to surface, prompting Thanh Hoa Province authorities to issue warnings.
Rung Toan Cau belongs to a group of eight joint-venture companies whose charter capital is claimed to be around VND78 trillion (USD3.7 million).
Nguyen Thi Thuan, the headmistress of a nursery school in Thanh Hoa Province, said one of her students gave her an invitation. The student told Thuan that a stranger gave it to him.
The letter was on Hien Vinh Company letterhead. The company apparently helped to organise conferences and meetings for Rung Toan Cau. Thuan said, "They want to do charity for disadvantaged children and households. They also promised a support for us worth VND17 billion, but we haven't heard from them since. We were also warned by police to be careful with this company."
There is no primary address listed for Hien Vinh, and neighbours who live near the secondary address say the company moved out years ago.
Reporters disguised as customers approached Rung Ben Vung Toan Cau, at an office located on Khuat Duy Tien Street in Hanoi. Only three employees were seen working in a five story building.
According to employees at the site, the company offers individuals or groups who wish to start an agricultural business a chance to borrow capital. After submitting land-use permits and VND27,250,000 the organization or individual "will receive share in our company, worth VND545 million," according to one employee.
Colonel Nguyen Van Binh, deputy head of Public Security Department in Thanh Hoa Province said, "A few years ago, some individuals and organisations gathered books on land-use rights in order to invest in a forest development project. The project was never implemented. The same scam was used again in 2013. In that case we also recovered nearly 1,000 law books on land-use rights."
On January 25, Thanh Hoa Province People's Committee issued directives warning against so called charity funds from eight joint-venture companies who do not have the financial capacity to carry out their promises. On February 12, the local Department of Agriculture and Rural Development also warned other agencies against cooperating with these companies.MobiFone sale to ignite telecoms
Giant mobile service provider MobiFone is expected to be detached from its state-owned parent, the Vietnam Posts and Telecommunications Group, in a move experts hope will bring more competition to the telecommunications market.
At a recent seminar, it was proposed that MobiFone, one of Vietnam's three largest mobile network operators, be separated from its parent (VNPT), which is also the operator of Vinaphone, one of MobiFone's main rivals.
Pham Hong Hai, head of the Ministry of Information and Communications' (MoIC) Telecommunications Department believes that the proposal could see the local telecommunications market reach new heights.
Currently, Vietnam has three national telecom providers - Vinaphone, MobiFone and Viettel. According to the MoIC's White Book on information and communications technology for 2013, Viettel holds the largest mobile market share of 40.05 per cent, then MobiFone 21.4 per cent and VinaPhone 19.88 per cent.
Former Deputy Minister of Post and Communications, now MoIC, Mai Liem Truc claimed that with all three major players being state owned, they were inherently inefficient.
"In the long term, they will not develop strongly. The domestic telecommunications market developed strongly first, but development has slowed compared to the global telecommunications market," Truc said.
The Central Institute for Economic Management's vice head Vo Tri Thanh said the restructuring of the telecommunications market, including the separation of MobiFone, would enable the market to develop and promote more healthy competition.
"An equitised MobiFone joined by private investors with modern technology and management experience will pressurise VinaPhone and Viettel," Thanh stressed.
At present, MobiFone largely focuses on mobile services. However, the firm's chairman Le Ngoc Minh stated that if MobiFone became an independent firm, it would diversify into more competitive services.
Outside of the three large-scale telecommunications groups, there is also a collection of small-scale players. Also according to the White Book, MobiFone, VinaPhone and
Viettel hold 81 per cent of the mobile market, the remaining part of the cake belonging to more obscure operators such as Vietnamobile (10.74 per cent), Gmobile (3.93 per cent) and SFone (0.01 per cent).
Of them, only Vietnamobile, with more than 10 million subscribers, is considered to be viable, while Gmobile, with nearly 5 million subscribers faces difficulties and SFone is on the brink of collapse. These operators receive almost no incentives from the state.
If the equitisation of MobiFone is realised, and the market becomes more competitive, these small-scale operators would find it increasingly difficult to survive.
However, the MoIC's Pham Hong Hai clarified that the Law on Telecommunications allowed private firms unlimited participation in the market.
"In the telecommunications sector, firms can shift to other business sectors if they fail to operate well in mobile services. After EVN Telecom was merged into Viettel, its customers were still able to use Viettel's services.Cement firms remain stuck
Another tough year is forecasted for cement firms amid an oversupplied and sluggish property market.
Total cement consumption in 2014 is estimated at 62-63 million tonnes, up 3 per cent against 2013. Of this, 48.5-49 million tonnes is to serve the domestic market and 13.5-14 million tonnes is for export, according to the Ministry of Construction's latest forecast.
Assuming that consumption matches expectations and cement firms do not amend their capacity, about seven million tonnes will be overproduced, irrespective of another seven million tonnes set to be sourced from five new production lines to be commissioned in the second half of this year.
According to general director Hoang Xuan Vinh of Cam Pha Cement JSC based in northern province of Quang Ninh, huge oversupply and fierce competition among firms has required Cam Pha Cement to take creative measures, reform its sales methods, consolidate distribution and improve its management efficiency.
This year, the company has targeted sales of 1.7 million tonnes of cement in the domestic market while 650,000 tonnes of clinker are set for export, worth some VND2.7 trillion ($128 million) in total predicted revenue. "Our entire company will execute a wide range of measures from the early period of this year and will provide better support to customers to reach the set target," Vinh said.
Cam Pha Cement, with more than VND6 trillion ($285 million) in total investment capital and 2.3 million tonnes in annual capacity, began operations in 2008 and incurred more than VND1.7 trillion ($81 million) in cumulative losses by mid-2013.
In October 2013, leading telecom group Viettel bought a 70 per cent stake in Cam Pha Cement, giving the company better hopes for the future.
Last year, the company reported VND2.3 trillion ($109 million) in revenue, up 10 per cent against 2012, and sold approximately 1.3 million tonnes domestically and shipped over 813,000 tonnes abroad. Despite these reasonable figures, the company still accumulated VND19 billion ($905,000) in losses since it had to pay interest payments of VND364 billion ($17.3 million) in addition to other financial costs.
This year, state cement conglomerate Vietnam Cement Industry Corporation (Vicem) set a 21 million-tonne target, producing 16-17 million tonnes of clinker, revenue of more than VND30 trillion ($1.4 billion) and profits of about VND500 billion ($23.8 million).
These targets were down on 2013 figures, revealing Vicem's cautious approach.
Vicem's subsidiaries were also liable for repayments on debts, with Vicem But Son JSC incurring over VND100 billion ($4.7 million) in losses since it had to deduct VND730 billion ($34.7 million) in investment cost repayments in addition to paying over $4.7 million due to exchange rate fluctuations.
Input costs also rose constantly last year, with coal price increasing 37-41 per cent from April and electricity growing 5 per cent from August.
In this context, cement firms have regarded export as a way to boost sales despite the lower profits.
Vicem said it would support member units in spurring exports to reach 2.6 million tonnes in cement and clinker export this year, up 300,000 tonnes over 2013.
Cam Pha Cement intends to surpass its one million tonne cement export target this year.Substandard cement projects axed as demand decreases
The government last week rejected nine substandard projects from its cement industry development plan for 2011-2020, with orientation towards 2030, according to the Vietnam Association for Building Materials.
The scrapped projects include the Ha Tien-Kien Giang, Truong Son-Ro Li, Hop Son, Ngoc Ha, Vinafuji Lao Cai, Thanh Truong, Son Duong, Quang Minh and Cao Bang projects, each of which was planned to produce less than 2,500 tonnes of clinker per day.
The decision came as the Association for Building Materials (ABM) forecast cement consumption in the domestic market would decrease 14-15 per cent against the levels projected during the state's planning for 2011-2015.
"Removing low capacity and ineffective cement projects from the cement industry plan is vital. It will bring significant changes and greener production practices into Vietnam's cement industry as well as save power consumed by cement manufacturing amid Vietnam's grave shortages of energy," said Vu Ngoc Quy, deputy director of Taiwan's Cement Chinfon Company, one of the biggest suppliers in Vietnam.
Under the new cement plan, investors in new cement projects with a capacity of 2,500 tonnes of clinker per day must invest in waste heat recovery systems to generate power.
Projects already in operation or under construction will also be forced to complete the investment in waste heat recovery systems before 2015, while additional plans will completely transform technology from blast furnaces to reverse furnaces with the gradual termination of outdated technology.
Tran Van Huynh, chairman of the ABM added that besides extending deadlines and removing weak plants, cement firms also have to speed up their restructuring to increase competition. Current times have proven hard even for market leaders like state conglomerate Vicem, which consists of eight member companies and controls over 33 per cent of the market countrywide.
"Each Vicem member should scale up efforts to maintain their traditional home markets since it will be difficult for firms to increase sales in new areas due to high transportation costs," said Vicem general director Nguyen Ngoc Anh.
Vietnam was estimated to encounter oversupply of 8-12 million tonnes of cement each year from 2010- 2012. The oversupply was a result of a mushrooming of cement factories in recent years. At present, Vietnam has 106 cement factories with total annual capacity of 63 million tonnes.
The Ministry of Construction has estimated cement consumption will reach 62-63 million tonnes in 2014, a mere 1.5-3 per cent increase in comparison with 2013. It targets to export 14 million tonnes this year, equal to that of 2013.Lower fees proposed for transport firms
A proposed Ministry of Finance draft circular would give transport businesses a number of new benefits if passed.
The Ministry of Finance (MoF) just turned to the Ministry of Transport (MoT) for comments on a draft to the MoF's Circular 197/2012/TT-BTC, dated November 2012, guiding collection, payment, management and use of roads by units of vehicles. This is aimed at helping reduce the financial burdens now on transport companies.
Accordingly, the first benefit transport firms would see is a new regulation covering truck drivers.
The existing circular regulates the collection of road tolls from tractor trailers and/or semi-trailers, whereas the draft version combines the weight of both vehicles to calculate charges.
This means firms using trailer trucks will pay fees on trailers correlative to their tractor number.
According to Le Van Tien, owner of a big tractor business and chairman of Haiphong Freight Transport Association, if the draft is passed into law, transport firms could save up to VND10 million ($500) in road use charges each month.
"In fact, some firms have 50 tractors carrying 70 trailers. Under the draft they would pay fees on the 50 tractors with relevant trailers but not the total 70 trailers," said Tien.
The second new point in the draft is that transport firms with accrued road use charges of VND50 million ($2,380) per month can pay on a monthly basis, but not every six months as at present.
Chairman of the Vietnam Auto Transport Association Nguyen Van Thanh said the new regulation would help alleviate businesses' burdens as they pay big amounts every 6, 12, 18 or 24 months now and could instead pay smaller amounts each time.
My A Forwarding Joint Stock Company general director Vo Thi Phuong Lan seconded this, saying existing regulations require firms to pay road use charges on units of vehicles following a longer-term registry period, depending on the type of vehicle (second-hand or brand new.
Under this regulation, firms with large numbers of vehicles often have to borrow money to ensure they meet their payment obligations.
Another new point in the draft that is being welcomed by transport firms is that vehicles would not have to pay charges if their use has been suspended for 30 or more consecutive days.
If firms already paid these fees, they would be refunded or deducted from a later payment.
In fact, for a number of reasons, many vehicles are left unused for a month or more while firms still pay road use charges on them. The new regulation helps avoid this and reduce the financial burden on businesses.
According to Deputy Minister of Finance Vu Thi Mai, the MoF will start sourcing comments from other government agencies and localities on the draft circular once it gets input from the MoT.Binh Duong drives future growth
The southern province of Binh Duong has acted as a magnet for both Vietnamese and foreign investors, helping drive future growth.
The local authorities inaugurated a new integrated administration centre in Binh Duong New City on February 20, marking a milestone in the province's development and providing fresh opportunities for investors.
Located in the Binh Duong New City project, the new hub includes 20-storey twin towers and a helicopter pad.
Work on the centre started in November 2010 and the towers now house the province's party, government and public agencies.
The new Becamex IDC-constructed centre cost more than VND1.4 trillion ($67.54 million), and was designed by Singapore's infrastructure development and management services provider CPG, with French group Apave as project supervisor and manager.
Deputy Chairman of the Binh Duong Provincial People's Committee Tran Van Nam said the new administration hub was a symbol of the province's development, and marked the efforts of the local authorities to provide fast, transparent and modern administration.
Only an hour's drive from Ho Chi Minh City, the Binh Duong New City project is home to the hub and will be the focus for a central government-managed Binh Duong City by 2020. Set for completion by that year, the project will house 125,000 residents and provide work for 400,000 people.
Part of the new city is the $1.2 billion 1,000-hectare Tokyu Binh Duong Garden City, which is being developed by Becamex Tokyu, a 35-65 per cent joint venture between Becamex IDC and Japanese town developer Tokyu Corp.
"By 2020, the Binh Duong New City project will become Binh Duong City's core district to further foster the whole province's sustainable development," Nam said, adding that the province was working on plans to build a railway line with funding from the Japanese government to link the new city with Ho Chi Minh City's first metro rail route Ben Thanh-Suoi Tien, which is currently under construction.
Also on February 20, the local authorities introduced a raft of key projects for this year, including developing an express bus service to connect the new city with neighbouring areas in the province and Ho Chi Minh City.
Another project is Sora Gardens, which will consist of a residential, service and shopping complex in the Tokyu Binh Duong Garden township including three quarters - Gate City, Core City and Gardens City. The concept design architect is Tokyu Architects and Engineers Inc., the architect is Australian firm PTW, and France's Apave is the tender consultant. Sora Gardens would include up to eight tower blocks with 1,500 residences, together with commercial facilities.
Other projects include a new Binh Duong Television centre, construction of the Binh Duong Development Fund Office, opening of Japanese retailer Aeon's 62,000-square metre shopping mall and building new major roads including a road linking Binh Duong New City with Thu Dau Mot City, construction of Tan Van Logistic Centre and Port Complex, finishing An Son Port Services Complex, and building a 1,500-bed general hospital. Aeon is due to open the $95-million Binh Duong Canary mall in October 2014 and will be its second shopping centre in Vietnam after Aeon Celadon Tan Phu in Ho Chi Minh City.
A major project is to turn Ben Cat district into Ben Cat municipality and Bau Bang district, to transform Tan Uyen district into Tan Uyen municipality and North Tan Uyen district. The project also includes construction of the 300-hectare Bau Bang Industrial Park (IP) for garment and textile companies, and supporting industries.
Nam said the Bau Bang IP was tasked with finding new opportunities as Vietnam prepared to sign the Trans-Pacific Partnership Agreement. In its development strategy, the province has attached great importance to industrial development, and from being an agricultural province 15 years ago, Binh Duong has transformed itself into an industrial force.
As part of efforts to lure more investors, Binh Duong has completed infrastructure in 26 of the province's 28 IPs, developed human resources and enhanced its service quality by simplifying administrative procedures and promoting transparency, said Mai Hung Dung, director of the Binh Duong Provincial Department of Planning and Investment. The local IPs include popular Vietnam-Singapore Industrial Parks I and II, Dong An, and Song Than.
The province recorded its GDP growth of 12.8 per cent last year and is targeting 13 per cent growth for 2014. It is predicted the industry sector to grow 16 per cent, trade and services 20 per cent, and agriculture 4 per cent this year, up on last year's results of 8.7 per cent, 19.6 per cent and 1.8 per cent respectively.
Binh Duong's efforts to attract foreign direct investment (FDI) have been rewarded, with the province having this year already attracted $715.7 million in FDI, equal to almost three quarters of its $1 billion year target by February 20, said Dung. Among the new inflows, $189.8 million was from 20 newly licensed projects, and $525.9 million was added to 19 already operational projects.
He added the performance showed investors had faith in Binh Duong's investment environment and that the province was eager to support investors as part of its efforts to continually improve its business climate.Tata not set to wave Vietnam farewell
The failure of Tata Steel's $5 billion steel project in the central province of Ha Tinh appears not to have put off Tata Group's interest in Vietnam.
Indronil Sengupta, chief executive of Tata Sons Limited - the holding company of Tata Group - in Vietnam, told VIR that Tata's belief in the country "stands unshaken." His announcement followed reports in the local media outlining Tata Steel's withdrawal from a $5 billion investment plan in Ha Tinh's Vung Ang Economic Zone. Tata reluctantly withdrew from the steel project last May following disagreements with the local authorities over the cost of site clearance.
Previously, Tata Steel asked for the same amount of financial support for site clearance that had been offered to Taiwan's Formosa Group for their nearby $9.9 billion steel manufacturing and seaport complex. Ha Tinh provincial authorities instead demanded that Tata Steel should foot the entire bill for clearance.
"We were extremely serious and had spent over five years trying to develop the project. However, despite our sincerity and strenuous efforts, we could not successfully implement the project. We were disappointed as we had spent a significant amount of time and resources," said Sengupta, who was previously chief executive of Southeast Asia Projects at Tata Steel Limited.
"Although it has been a setback, our confidence in Vietnam remains and we are pursuing a power project with proposed investment of $2 billion in the Mekong Delta province of Soc Trang," he said, noting that Tata Power was also working towards an earlier commissioning date on the project which is reflective of its interest, confidence and faith in Vietnam.
Sengupta said Tata Steel was still considering participation in the steel and mining sector in Vietnam in the future "if the global dynamics and the local environment are conducive to the development of such projects."
Tata is currently focusing on the power sector. Tata Power last November signed a memorandum of understanding with the Ministry of Industry and Trade for investing in Long Phu 2 project in the southern province of Soc Trang. The power investor quickly started engineering studies and geological surveys following the agreement, Sengupta said.
"We are very positive about Long Phu, and we don't see site clearance issues arising as we are satisfied with the co-operation we have received from the leaders of Soc Trang so far," he added.
With the potential growth of the economy and the expanding market, Sengupta believes that Vietnam will remain at the top of Tata's list of interests. Tata products are already available in Vietnam via Jaguar and Land Rover passenger vehicles, Tata Daewoo buses and trucks and Titan watches.
"Several of our group companies have global marketing plans and will enter the Vietnam market based on demand," said Sengupta.NPL cancer grows, profits hit
High non-performing loan ratios are continuing to cause expenses for banks as they are forced to invest in provisions. Larger banks particularly are finding it difficult to both battle bad debt and achieve profits.
According to ACB's 2013 consolidated financial statement, its pre-tax profit was VND1.035 trillion ($49.2 million), lower than VND1.042 trillion ($49.5 million) in 2012. While profits dropped, non-performing loans (NPLs) grew, with the bank's potential irrevocable debt (debt group 5) doubling compared to the end of 2012 to reach VND2.123 trillion ($101 million).
Similarly, Eximbank suffered a sharp drop in pre-tax profit in 2013, down 70 per cent on-year. The bank's debt group 5 increased significantly by 35.4 per cent, reaching VND1.073 trillion ($51 million).
According to Techcombank's statements, the bank's consolidated pre-tax profit of 2013 was about 13.7 per cent lower than 2012. The decrease was blamed on provisions put aside to battle bad debt. The bank's NPL ratio still stands at 3.65 per cent, significantly high to warrant the forced sale of the debt to the Vietnam Asset Management Company (VAMC).
Notably, these three banks have foreign strategic shareholders, a competitive advantage. HSBC and Sumitomo Mitsui Banking Corporation (SMBC) hold a 20 per cent stake in Techcombank and Eximbank respectively, while Standard Chartered Bank is ACB's foreign strategic partner.
A raft of other banks have announced positive profit growth, but their NPLs have continued to increase sharply.
Sacombank's debt group 5 increased by 13.5 per cent, and now makes up 63 per cent of the bank's total bad debts. BIDV's same debt group increased by 14 per cent.
Vietcombank saw the highest debt growth as the lender's debt group 5 reached VND3 trillion ($142.6 million), 200 per cent higher than 2012's figure.
According to banking expert Nguyen Tri Hieu, debt group 5 increases show the deteriorating quality of bad debts in general.
In contrast to the biggest banking players, smaller banks seem to have escaped the worst, especially those which underwent restructuring.
In 2013, SHB decreased its NPL ratio to 4.05 per cent from 8.5 per cent after merging with debt-ridden Habubank in 2012. The bank also reported outstanding credit growth of 34 per cent. Its 2013 pre-tax profit was VND1 trillion ($47.6 million), while it bore a loss in 2012.
TPBank surpassed their yearly profit target by earning VND350 billion ($16.6 million), double 2012's total. The lender's NPL ratio is also looking good at less than 2 per cent.
VPBank in 2013 posted surprising credit growth of 30 per cent, while pre-tax profit was 30 per cent higher than 2012.
While these modest success stories show how drastic restructuring can help banks escape their present difficulties and emerge stronger in the future, in general, banking profits are sliding.
NPLs continue to threaten the system. A new Moody's report titled Vietnam Banking System Outlook estimates the figure to comprise at least 15 per cent of total assets.
"Profitability remains stagnant in a challenging operating environment in which an improved external position has yet to revive domestic demand. Weak loan demand is depressing bank margins, which remain insufficient to offset rising credit costs and improve internal capital generation," stated the Moody's report.New law offers small steps forward
Real estate developers anticipate a better environment if the draft revised Law on Real Estate Business and the draft revised Law on Residential Housing are approved by the National Assembly later this year.
Foreign real estate developers may welcome the revised law, but expatriate buyers may find the lack of progress on equal treatment disappointing Photo: Le Toan
According to David Lim, head of the Land Sub Group under the Vietnam Business Forum (VBF), provisions have been inserted in the draft revised Law on Residential Housing (LRH) to expand the rights of foreigners to purchase and use residential property.
However, there continue to be limitations on the rights of foreigners who will still not be permitted to lease their property, own residential houses other than in prescribed commercial residential housing projects, or use property as collateral to access loans from the bank.
"We think the amendment of the laws to allow greater rights for foreigners would be very beneficial for a foreign developer when they can sell a large number of apartments in a specific building for a foreign investor, then this investor can re-sell or re-lease those properties," Lim said.
Regarding the draft Law on Residential Housing (LRH), foreign commentators said that while some meagre efforts had been made to increase the rights of foreign investors to undertake real estate transactions in Vietnam, foreign investors were still not permitted to purchase houses and buildings for resale or lease, be allocated land by the state, receive and transfer land use rights or invest in infrastructure for transfer or for leasing land with infrastructure.
Lim optimistically claimed that the participation of foreign investors in the real estate market would help the real estate market to mature further.
"Over the years, we have seen domestic investors gain in experience and capabilities arising from a thriving real estate market which includes the contributions of foreign investors. It is not uncommon today to see many iconic developments undertaken by domestic developers. The risk that domestic investors will be disadvantaged by allowing foreign developers more rights in Vietnam continue to diminish over time. The granting of more equal rights to foreign developers wouldn't be at the expense of domestic investors in any way," said Lim.
Nguyen Manh Khoi, vice director, Housing and Real Estate Market Administration under the Ministry of Construction said the two draft laws had addressed those issues.
"Supplements will be made to the draft to allow foreign investors coming to Vietnam for the first time to deal in property. For example, instead of requiring registered real estate trading as an eligible line of business, first time foreign developers may be required to provide proof of capital competency or track records and real estate trading capacity in another country," Khoi said.
Initially the government opened the housing-for-sale market to foreign developers with the Phu My Hung project in Ho Chi Minh City and Ciputra in Hanoi. Since then, foreigners have slowly gained more rights.
According to real estate expert Dang Hung Vo, foreign investment was helping stimulate the real estate market. "If the rights for foreigners are improved in the current revised land laws, the real estate market could revive more quickly," Vo said.South Fork case offers experience
The South Fork lawsuit against Binh Thuan provincial People's Committee is a lesson for state authorities in dealing with future litigation with foreign investors.
Information released by the Ministry of Justice showed the US' South Fork Development Company failed in their suit at an international arbitration tribunal when it asked the committee to compensate $3.7 billion for causing construction delays to its mammoth tourism project in the province.
The committee did not respond to VIR's requests for comment last week, and South Fork has similarly avoided media contact.
Le Net, a partner at law firm LNT & Partners and also an arbitrator at the Vietnam International Arbitration Centre, said the case was a good chance for Vietnam to learn about and handle possible lawsuits in the future.
"State authorities took the initiative, faced the lawsuit and complied with arbitration regulations. These were the keys to success in this case," said Net.
He also added that the Ministry of Justice had hired capable lawyers and was confident in the nation's legal opinion and strategy.
The South Fork Twin Capes project was licensed in 2004 by the Ministry of Planning and Investment. It would have comprised luxury resorts, golf courses, villas, luxury condo complexes, a large community yacht and marina and entertainment areas.
In December 2009, Binh Thuan provincial People's Committee handed over more than 333 hectares to South Fork for developing the project, demanding the company to implement the project within five months since the handover, or otherwise, the committe would recover the land.
The lawsuit came after the committee revoked the license in 2010 due to long delays.
South Fork laid the blame on the committee, saying they had allowed Duong Lam Company to exploit titanium on the project's land, causing construction delays.
The committee's defence was that South Fork was responsible for the delay and was aware of the mineral exploitation as evidenced by an agreement it signed with Duong Lam.
The dispute raised more than a few eyebrows in 2011 when South Fork announced it would sue the committee in an international arbitration tribunal and set damages at $3.7 billion.
Immediately after South Fork announced the suit, former director of Binh Thuan's Planning and Investment Department Luong Van Hai said local authorities began collecting evidence defending their case.
A source from the Ministry of Planning and Investment said the government also formed a team to handle the dispute immediately after lodging a request for legal recourse to the charges.Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR