Last update 17/06/2012 07:00:00 AM
BUSINESS IN BRIEF 17/6
Vietnam joins int'l gifts, stationery fair in Malaysia
The Vietnamese embassy in Malaysia is taking part in the 4th International Gifts, Premium & Stationery 2012 Fair (KLIGP 2012) in Malaysia's capital city of Kuala Lumpur from June 13-15.
The fair, organised by the Malaysian Gifts and Premium Entrepreneur Association (MGPA), involves more than 300 businesses from Malaysia, Singapore, Thailand, Indonesia, Brunei, the Philippines, Cambodia, Hong Kong, Taiwan, the Republic of Korea and Vietnam, showcasing a wide range of products.
Vietnam's pavilion with diversified and skillful art and handicraft products has attracted many entrepreneurs and visitors.
Vietnamese Commercial Counsellor Vu Van Canh said that the Embassy of Vietnam has joined this fair because the country has strong potential for art and handicrafts.
He expressed hope that through KLIGP 2012, Vietnamese products will be introduced to Malaysian customers as well as international friends, thus promoting the export of these products.
According to Vu Van Canh, bilateral trade between Vietnam and Malaysia has increased annually by an average 20 percent in recent years. In 2011, two-way trade reached US$6.66 billion, with Vietnam’s exports to Malaysia accounting for US$2.76 billion.
RoK, Vietnam aim for US$20 billion in trade turnover
Trade turnover between Vietnam and the Republic of Korea (RoK) was US$18.5 billion in 2011, and is likely to reach over US$20 billion by the end of this year.
The figures were released at a seminar on trade and investment cooperation recently held between the two countries in the Mekong Delta city of Can Tho by the Vietnam Chamber of Commerce and Industry (VCCI) and the RoK Consulate.
Participants said that the Mekong Delta region has many advantages to export farm produce to the Korean market, which has an increasing demand for food and aquaculture products.
The RoK wants to import around 50,000 tonnes of rice annually and is considering Vietnam a potential supplier because Koreans like glutinous, fragrant, unbroken grain. However, the quality of Vietnamese rice is sometimes inconsistent, they said, describing it as a challenge for local exporters.
According to VCCI statistics, Vietnam’s exports to the RoK earned nearly US$5 billion while imported Korean goods were worth more than US$13 billion in 2011, turning the RoK into their second largest exporter, after China.
At present, eight out of 13 provinces and cities in the Mekong Delta have established commercial links with RoK partners. Local companies mostly export food produce like seafood, fruit, vegetables and grain to the Korean market.
Following the ASEAN-Korea Trade in Goods Agreement (AKTIG) singed in 2006, the RoK has removed 90 percent of common tariff lines, and is gradually reducing the remaining 10 percent.
Vietnam has committed to remove tariffs on 60 percent of imports from the RoK in the near term, and 100 percent as of January 1, 2016.
The two countries are now in negotiations to sign a bilateral trade agreement to increase their two-way trade turnover, which is expected to hit US$25 billion by 2015.
State enterprises unable, unwilling to restructure
State-owned enterprises are finding it difficult to provide restructuring plans as required by the Government because their auxiliary businesses are often more profitable than core operations and business officials may be loathe to reveal areas of mismanagement.
These were among comments made by SOE representatives at a recent workshop in Ha Noi.
The Government asked State-owned economic groups and corporations to submit their reorganising schemes by the end of the first quarter but only seven of them had complied, leaving 35 others overdue, Ministry of Finance's Corporate Finance Department deputy director Dang Quyet Tien reported.
Ministry officials said State-run economic groups had overstretched their investments to a variety of sectors in which they didn't have strategic advantages or in "sensitive areas" like banking, the stock market and real estate.
In a declining market, they had suffered losses and their core businesses were affected as a result.
The SOE restructuring process required firms to hive off their secondary businesses, but sometimes the secondary operations were more profitable than the core business, the workshop heard.
Deciding which areas to maintain or quit was a key question but firms were finding it difficult to answer.
Firms would have to carefully consider such matters as price fluctuations and return on capital/equity in every field.
Competition among multi-sector SOEs, together with complicated investments among parent companies and subsidiaries, were also confusing, Tien said.
Among the companies who presented plans, none were able to specify financial costs for restructuring, public debt and losses as well as methods to treat related problems, Tien said.
Perhaps firms were afraid to unveil unsatisfactory financial situations, he told Thoi bao Kinh te Sai Gon (Saigon Economic Times).
"They need to tell the truth and report the exact situation in order to find the [right] resolution."
Can Tho's exports rise slightly to $471 million
The Cuu Long (Mekong) Delta City of Can Tho earned US$471 million in exports during the first five months of this year, representing a modest increase of 0.3 per cent, according the Ministry of Industry of Trade.
During the period, the city also imported $104 million worth of goods, down by 42 per cent against the same period last year, it said.-
VietJetAir cuts fares by up to 49% for six months
Holidaymakers will be able to enjoy discounts of up to 49 per cent on VietJet Air flights during the next six months thanks to an agreement the budget carrier inked recently with the HCM City Tourism Association.
This stimulus agreement will offer exclusive low-cost holiday packages from June 15 to December 31 this year to help attract travellers to tourist destinations.
VietJet Air will provide travel agencies with low-cost tickets on favourable and flexible terms while travel agencies will match that with competitively priced but quality tours to enable tourists to explore Viet Nam's top holiday destinations.
On the HCM City – Ha Noi route, VietJet Air will offer travel agencies even lower fares than normal while increasing the frequency of flights to meet the surging demand during the summer and year-end holidays.-
Bank shareholders repeat violations
Two major shareholders of Sacombank (STB), the fourth leading listed commercial lender, have continued to sell shares without making mandatory disclosures only five days after they were slapped with penalties by the State Securities Commission for the similar violations.
The HCM City Stock Exchange on Tuesday announced that Sai Gon-Asia Financial Investment Joint Stock Co and individual shareholder Tran Phat Minh had each sold about 900,000 STB shares without making disclosures as regulated.
The divestments reduced their holdings in STB to below 5 per cent each, the regulated threshold for being considered a "major shareholder". The alleged "underground" sales by major shareholders are just the latest twist in the ongoing saga of the Sacombank-Eximbank acquisation deal.
The two shareholders, together with Eximbank (EIB) subsidiary Sai Gon Exim Investment Joint Stock, were part of an Eximbank alliance formed to acquire a controlling interest at Sacombank.
Late last week, the State Securities Commission fined all three shareholders VND60 million (US$2,860) each for not submitting required reports upon becoming major shareholders in Sacombank.
The penalty took the market by surprise due to its tardiness. It was only just disclosed even though the power transfer at Sacombank was completed back on May 26, when STB shareholders elected eight additional members to the bank's board, including two who came from Eximbank and two from Phuong Nam (Southern) Bank.
The investors had collected STB shares between January and March, buying up a total volume of nearly 65.6 million shares. Minh became the second leading individual shareholder, after chairman Dang Van Thanh and his son, who hold a combined 7.7 per cent.
According to the newspaper Dau tu Chung khoan (Securities Investment), the three shareholders said their violations of disclosure rules were due to their miscalculation of the number of outstanding STB shares on the market. STB had bought back 100 million of its shares in January 3, reducing its outstanding shares from over 1 billion shares to about 974 million.
Without considering this change, all three shareholders had assumed their acquisitions which left them at below the 5-per-cent threshold and therefore under no obligation to disclose.
Phu Yen Province spends $71K on tuna
Central Phu Yen Province recently launched a project, worth VND1.5 billion (US$71,500), to increase the quality of its tuna products and develop the collective brand name "Phu Yen Oceanic Tuna."
The project will run until May 2014.
Phu Yen ranks first in the country for its tuna industry with an average yearly output of about 5.500 tonnes.
Taxi fares cut amid fuel price drop
Several taxi companies in the capital city have reduced fares following the third fuel price cut this year, but concerns have been raised over transport firms that have not lowered their prices.
The Vinasun taxi company was the first to slash its fares by VND500 (2 cents) per kilometre, while Mai Linh taxi reduced its prices by VND200-VND1,000 (0.9-4.5 cents) per km earlier this week.
After two price increases at the petrol pump totalling VND3,000 (14 cents) per litre early this year, many companies hiked fares by VND800-VND1,000 (3-4 cents) per km. However, three individual petrol price cuts this year totalling VND1,900 per litre did not translate into lower prices across the transport sector.
According to Chairman of the Viet Nam Transportation Association Nguyen Manh Hung, taxi firms would continue to lower their fares to raise competitiveness, but these cuts would be minimal as the recent petrol price cuts have not been substantial.
Hung said recent petrol price cuts have only seen taxi firms, and not long-distance buses, reduce fares. The association has urged all taxi and long-distance bus firms and goods transport enterprises to slash ticket prices, but could not force these price changes.
Chairman of the Huong Lua taxi company Dinh Quang Sau said his company currently charged between VND10,000 (US$0.5) and VND10,200 per km for the first 20 kilometres and VND9,000-VND9,200 beyond that.
He added that these fares were VND300-VND500 per km lower than that of other companies and that they would make further reductions, although not by much.
"The fuel price reduction is a good signal for the economy as it will help lure more customers and raise revenues," Sau said.
An official from Bac Ha transportation, which serves the Ha Noi – northern Bac Giang Province route, said his company has retained its VND25,000 one-way price, having not adjusted its fares when diesel prices increased by VND1,500 per litre to save costs.
Many bus firms said they would only change their ticket prices when diesel costs increased or reduced by 10 per cent or more.
In HCM City, a representative from Mien Dong Bus Station confirmed that enterprises were calculating new prices for the coming time.
Quang Ninh plans to halt sluggish projects
The northern province of Quang Ninh has revoked the licences of 38 projects in Ha Long City due to slow progress in work, according to the provincial People's Committee Chairman, Nguyen Van Doc.
The move came after checks on 152 projects in the city by provincial authorities in a bid to tighten project management and improve efficiency of land use.
The investigation revealed that most projects visited by provincial inspectors were found to have been implemented slower than scheduled, and many of these projects had stirred public concern.
"The total area of land to be recalled due to revoked licences totals 980ha," said Doc.
Apart from the 38 recalled projects, there remain dozens of others carried out at a sluggish speed due to delays in land clearance. The province is also considering cancelling projects whose investors do not show adequate commitment to work on land clearance.
According to Doc, some projects that leased land since last September have yet to begin any work. The Hong Gai Tourism Service JSC project to build a tourism and trade centre was an example, as was the Viet My-Ha Long JSC project to build a three-star hotel. Both projects are in the city's Bai Chay Ward.
In a bid to ensure a transparent investment environment, the provincial people's committee earlier this week requested authorities of all districts and Ha Long City to re-check every project that may be held up by slow land clearance and make a report on the issue to the provincial committee in July.
Chairman Doc also called on investors to seriously implement their projects according to schedule and commitments in regards to project quality.
Farmers seek aid to avoid shortages
The Ministry of Agriculture and Rural Development has asked the Government for VND9 trillion (US$432 million) to help the hard-hit breeding industry.
The aid is to help about 3,000 breeding farmers get debt extensions, reduce their loan interest rates to 10 per cent or less, and enable them to invest in new herds of livestock by next June.
Nguyen Thanh Son, deputy director of the ministry's Livestock Breeding Department, said this action would avoid a shortage of pork and price hikes in the later months of the year.
Last year, the ministry was forced to import about 120,000 tonnes of pork to meet demand.
Son said the biggest difficulty in the livestock industry was how to sell products, even though prices for some goods were spiralling downwards.
He said the scandalous addition of banned lean-meat chemicals to "improve" pork caused a loss of consumer confidence. Pork consumption had fallen - and the price was down by 17-20 per cent compared to early this year.
The price of poultry has also dropped 20-25 per cent and eggs are down 38-45 per cent.
This has forced many farmers to narrow production or stop business altogether.
To make matters worse, farmers have found it hard to obtain reasonable interest rates, despite the recent fall from 15 per cent to 13 per cent, Son said.
Most of banks hesitated to give loans to livestock breeding farmers, claiming this was a risky agricultural production.
In the meantime, farmers are not allowed to use their property, including their land, farms and breeding animals, as security for loans.
This is why most were forced to accept interest rates of up to 20 per cent, Son said.
According to Son, apart from financial assistance, the ministry had asked the Government to let farmers access interest rates of under 10 per cent so that they could get their businesses back on their feet.
It also asked for farmers to be exempt from all quarantine fees - or have them reduced.
TienPhongBank allocates VND3 trillion for low-interest loans
The Tien Phong Commercial Joint Stock Bank (TienPhongBank) has announced that it has allocated VND3 trillion (US$144 million) to provide low-interest loans for enterprises between June 11 and September 11, 2012.
The loans will be offered at a 12.5-14% annual interest rate to customers with a credit rating of at least BBB to AAA, according to the TienPhongBank rating system.
The bank says it will take into consideration the temporary difficulties in the economy when rating a customer so customers with temporary risks will be able to access the funds.
Each customer will be allowed to borrow up to VND100 billion at the preferential interest rates and the bank will prioritise new customers.
The bank’s current annual lending interest rate is fluctuating between 13 and 15%.
Handicrafts sector needs more gov’t support
In the early 2000s, the handicrafts sector was considered a smokeless industry, economically viable and highly sustainable for the rural economy. However, now the sector is facing difficulties from the recent economic downturn and insufficient interest from the government.
Dang Quoc Hung, director of Kim Boi Company, said no bulk orders have been placed in the first five months of the year but instead have reduced by 60 per cent compared to the same period last year. The company now has to shift from exporting coconut coir to other materials to keep the company running, even if there are no profits.
The situation is the same in other companies and cooperatives. It seems that heydays of the sector are long over. Until now, only Ba Nhat Bamboo Company is still receiving orders, but the majority of the companies are just about staying afloat.
According to the Handicraft and Wood Industry Association of Ho Chi Minh City (HAWA), around 360 members of the association are operating quite ineffectively. The main reason is that Vietnamese-made products are unable to compete with finished goods from other countries because loan interest rates in the country are so much higher than in other countries, which affects production.
Plus they cannot assess capital as they are all small businesses who don’t have property to mortgage to banks as collateral. Meanwhile they are in need of capital as they have to purchase machinery to be able to reduce price and increase production.
Another problem that hinders production of handicrafts is the tax procedure. One bamboo exporter said that the tax sector makes enterprises walk a fine line between being funny and being rude as it requires companies to present red bills, while companies buy most of their material – agricultural waste – from farmers who cannot produce red bills.
It is high time that enterprises in the association cooperate with each other to become stronger. HAWA plans to construct a handicrafts village in Hoc Mon District of HCMC; however, there are some hiccups along the process.
The handicrafts sector plays an important role in contributing to eliminating poverty in rural areas as it creates many jobs for farmers who have so much free time after harvesting.
In addition, it brings high value in exports as it uses domestic material while other sectors like garments, wood processing and leather shoes have to import materials from foreign countries. For every US$1 million, handicraft exports are about 10 times more profitable than other sectors.
The government should intervene and adopt support policies in capital, premises and other mechanism for enterprises in the association.
Moreover, the government should help in promoting Vietnamese products to foreign partners to attract more customers.
Siemens, Vinamotor enter hybrid-drive bus partnership
Siemens Vietnam and Vietnam Motors Industry Corporation (Vinamotor) struck a cooperation agreement in Hanoi on Wednesday on applying the Siemens ELFA hybrid drive technology for city buses in Vietnam.
Siemens said in a statement obtained by the Daily that a prototype of the ELFA would be built in 2012. Under the partnership, Siemens will provide all key ELFA components and technical support for Vinamotor while the corporation will prepare the platform and manufacture remaining parts of the bus.
Siemens said the ELFA hybrid drive technology helped city buses save operating cost significantly and minimize the impact of these vehicles on the environment through lower exhaust emission, as it contributed to fuel consumption reduction up to 50%.
Siemens Vietnam explained that ELFA was a diesel-electric hybrid concept which combines mobile power supply modules such as diesel generator sets and high performance energy storage devices, allowing the energy that is released during braking to be stored.
Siemens said braking energy of conventional city buses was usually converted into heat and lost but with the ELFA hybrid technology, the braking energy was turned into electrical energy by the regenerative operation of the traction motor and is fed into an energy storage device – in high-performance capacitors or batteries. The stored energy is reused during start and acceleration.
Depending on the storage capacity of the system the bus can also be driven electrically and with emission-free, particularly in inner city areas and at bus stops. Therefore, the operator of such buses can benefit from dramatic fuel cost savings and impact less on the environment through lower exhaust emission.
On top of that, passengers can experience quieter operation as well as smooth start and acceleration when they are on board these buses.
Vinamotor chairman Do Nga Viet said in the statement that the quality of buses using Siemens’ technology would enable customers to have a wider selection of a suitable vehicle and help the corporation develop buses which are safe, environment friendly, energy saving and cleaner-fuel-driven.
Erdal Elver, president and CEO of Siemens Vietnam, said Siemens had a portfolio of technologies for major urban centers and was committed to providing support to addressing the challenges that big cities in Vietnam faced, especially in transportation systems.
“Our partnership with Vinamotor in this hybrid bus project is a strong evidence of our commitment and we do believe the success of this project would help bring a greener future to Vietnam where air pollution and traffic jam are eased and more Vietnamese people are willing to take city buses as their preferred daily means of transport,” Elver said.
Siemens established its representative offices in Vietnam in 1993 and has since taken part in different infrastructure projects in this country, especially in such key areas as energy, industry, healthcare and transportation.
FPT wins bids for two projects abroad
FPT Corporation has won bids for two projects in Cambodia and Myanmar, said a source from the telecom company.
In particular, FPT Information System Co. Ltd. (FPT IS) has kicked off a project to develop the FPT.ePOS system for the telecom network Hello Network in Cambodia. The system provides a complete solution for multi-service sales and marketing activities of telecom service providers.
FPT IS expects it will take five months to install and deploy the FPT.ePOS system for Hello Network.
Earlier, FPT IS had cut a deal to deploy the SMS gateway FPT.iSMSGW for the Myanmar-based telecom company Myanmar Post and Telecommunications within one month. However, FPT declines to reveal the contract value.
FPT Corporation on Wednesday announced its Jan-May business performance. Specifically, in the first five months FPT gained more than VND10 trillion in revenues, meeting its target.
The Jan-May profit amounted to nearly VND974 billion, picking up 13% year-on-year, accomplishing 97% of the target. The after-tax profit of the parent firm grew 21% year-on-year, reaching VND590 billion, and earning per share averaged out at VND2,185.
Fish exporters told not to rush for U.S. market
Several tra fish exporters have now tended to shift to the U.S. market due to difficulties in the European Union (EU) market, but fisheries officials after a survey trip to processors in the Mekong Delta have warned against such a rush.
The EU market has become more difficult, and thus tra fish exporters are planning to turn to the U.S., said Nguyen Thi Hong Minh, former Deputy Minister of Fisheries, at a conference held by the Vietnam Association of Seafood Exporters and Producers (Vasep) on Tuesday.
According to Minh, this situation may result from the outcome of the seventh administrative review (POR7) for anti-dumping duties on tra fish announced by the U.S. Department of Commerce (DOC) in March, thereby tariffs were lowered enticing local exporters. Besides, exporters are in need to maintain outbound shipments for their products after a demand drop in EU.
“Relevant agencies need to monitor this movement of exporting firms as it may pose an anti-dumping risk in this important market,” Minh said.
According to Nguyen Thanh Bien, Deputy Minister of Industry and Trade, if no intervention is made soon, there will be many risks for the next anti-dumping review for tra fish export.
According to statistics of Vasep, the export turnover of tra fish to EU, mainly in Spain, the Netherlands, Germany and Italy, was over US$169 million in the year’s first five months, down 14% from the same period last year. Meanwhile, the export to the U.S. in the period reached US$127.6 million, up 44%.
SeABank supports Berriver Long Bien condo buyers
Southeast Asia Commercial Bank, or SeABank, has announced preferential credit package for customers of Berriver Long Bien condo project in Hanoi with interest rate from 11.99% per annum in the first three months.
Customers can access loans of up to 70% of value of an apartment and maximum term of 20 years. Long Bien branch of SeABank has been appointed to serve the program, which will run from tomorrow to August 10.
Berriver Long Bien project invested by Hanoi Investment and Construction Joint Stock Co. No. 9, or Hanco 9, includes five buildings with 20 stories each, a commercial center and an entertainment zone. The investor so far has completed transaction contracts with the first 120 customers.
SeABank in April launched a preferential credit package worth VND2 trillion for enterprises in the import and export sectors.
Meat shortage imminent, says official
The Husbandry Department has warned of a danger of meat shortage at the end of this year as many farmers in the country have given up livestock husbandry due to low demand and widespread diseases.
Nguyen Thanh Son, deputy head of the Husbandry Department under the Ministry of Agriculture and Agriculture Development, said the husbandry sector is facing many challenges as meat prices have tumbled due to low demands. Pork prices have declined by 17-20% compared to early this year while poultry prices dropped by 20-25%.
Son said that economic hardship was the main cause of low meat demand, especially in industrial parks where meat consumption has fallen by 20-30%. Meanwhile, local farmers cannot export pork to China after the neighboring nation has banned imports of animal and livestock products.
“Although local farmers only export pork to China via unofficial channels, the prohibition hurts the pork supply-demand balance in Vietnam,” Son added.
Many farming zones and plantations have narrowed down animal herds or even stopped farming. If managing offices fail to give supports for farmers, the nation will suffer meat shortage in the second half of this year and last year’s meat import problems will return, Son added.
Besides, local farming establishments find it hard in accessing capital sources.
According to the department, banks are hesitant in giving loans to husbandry farms given risks of their mortgaged assets. Otherwise, they just reach small loans as land and breeding animals are not accepted as mortgages.
The department has plans to hold an online conference next week to evaluate the situation of the husbandry sector and suggest solutions for production and export.
Son said the department would propose three solutions at the meeting, including a preferential credit package for the sector, equipment import tax reduction for new investments and quarantine fee reductions within one year.
Banks compete to attract depositors after removal of interest rate cap
Local banks have been competing to attract customers by raising deposit interest rates for terms of 12-months and more after the state bank removed the ceiling for these terms.
Local banks are raising deposit interest rates for terms of 12-months and more after the state bank removed the ceiling for these terms.
Western Bank is offering annual deposit interest rates of 14% for a 13-month term. This is up from 13.5%, which was the highest to be found among banks.
The Southeast Asia Commercial Joint Stock Bank (SeABank) has made changes to its deposit interest rates, of which the highest is 12% per year for a 24-month term. For deposits over VND 1 billion interest rates range from 12.6% to 12.8% per year.
ACB, Eximbank and SCB are also raising annual deposit interest rates to as high as 12% for long term deposit accounts.
According to their latest report, VietBank will apply a deposit interest rate of between 11.5% and 12% percent per year for terms of between 13 and 36 months beginning June 15.
The race among banks to raise deposit interest rates came in the wake of the State bank’s decision to remove the cap for deposit accounts with terms of 12-months or more. This decision aimed at helping credit institutions to increase medium to long-term loans.
The decision has given a chance for local banks to freely raise their rates in order to attract customers. It is predicted that this competition among banks will increase.
To prevent unhealthy competition, the State bank has said that it will continue to apply caps for certain terms and sectors.
However the bank also confirmed that the situation was not cause for worry. “We now have adequate bank liquidity and we expect lower inflation. The weaker banks are also now under tighter control," they stated.
The heads of some banks have said that the State bank is on the right track with their decision, explaining that in the past deposit interest rates for short term accounts were equivalent to those of medium to long-term and sometimes even higher. This, they said, was creating difficulties for banks in the mobilisation of of capital in the medium and long-term.
Hanoi to reduce taxes
To assist troubled enterprises, the Hanoi Tax Department said it will cut VND5,105 billion (USD245 million) of taxes for small and medium-scale enterprises.
Enterprises have encountered many difficulties in the first five months of the year because of rising fuel costs and the markets slump. Despite the city's support measures, the situation shows no signs of improving.
The number of new enterprises established in the first quarter of 2012 decreased 15% compared to the same time last year. In addition, 7,754 enterprises shut down in the first five months this year, 68% of the total number of enterprises that declared bankruptcy in 2011. Meanwhile those temporarily suspending operations in the early 2012 equalled 26% of 2011’s figures.
The Hanoi Tax Department said it would cut VND5,105 billion in taxes including VND150 billion (USD7.2 million) in land rental fee and VND500 billion (USD24 million) in VAT cut this June for small and medium-scale enterprises.
The total outstanding debt for April was estimated at VND6,049 billion (USD289 million) with construction firms still owing VND2 trillion in tax (USD69 million).
The Hanoi Tax Department said about 70,000 small and medium-scale enterprises will be entitled to preferential tax policies. It will further exempt taxes or push back the deadlines to create favourable conditions for many businesses but it will give lay down strict sanctions to those attempting to profiteer from the tax cut.
To keep the state budget healthy, the department will tighten control over the real estate market to collect taxes owed in the last six months of 2012. It will also map out plans to prevent tax losses from commercial and services businesses.
HCM City to crack down unlicensed markets
The HCM City People’s Committee has asked the local Department of Industry and Trade to study solutions to stop the construction and operation of unlicensed markets and those which violate planning regulations.
This is among main contents in the city’s plan on the orientation development of markets, supermarkets and trade centres through 2015. From now to 2015, HCM City will put a moratorium on building new markets, reduce the number of existing markets in the inner city and particularly clamp down on unlicensed markets.
The People’s Committee has also urged districts to refurbish local markets to ensure fire safety, hygiene and security. Markets will also be required to have parking areas, public restrooms, rubbish bins and drainage.
The Department of Industry and Trade will work with concerned agencies to classify markets, supermarkets and trade centres, as well as help localities to offer training coursers for market managers in marketing and food hygiene training for traders.
The city will also encourage investors to build supermarkets and trade centres at transport hubs, shopping areas, pedestrianised streets, new urban areas and markets that operate with losses.
So far this year, overall sales have dropped by 30-40% at traditional markets in HCM City, as shoppers turn to supermarkets and trade centres, which are clean and often offer attractive promotions. At these newer facilities prices are marked, so they do not have to worry about being cheated.
Due to the decline in sales many traders at traditional markets in HCM have offered to sell stalls, or have gone out of business to avoid further losses.
Sellers at Vinh Loc Market at Binh Chanh District and Thi Nghe at Binh Thanh District are among those hardest hit. Up to 15% of traders at Vinh Loc Market stopped selling from Monday to Friday.
One trader, Duong Thi Nguyet, said, some months ago, she bought the stall from a friend for VND70 million (USD3,300), but now she has been forced to sell it at a loss because of its unprofitability.
Downtown markets have also seen markedly fewer customers, including Thi Nghe Market.