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VN Bus. News (Apr. 23, 1997)
April 23: Vietnamese authorities frustrate Coca-Cola's promotional efforts
April 23: Troubled Vietnam trading company faces overdue foreign payments:
report
April 23: Big tax break for 100 percent foreign investments in Vietnam
April 23: Asian Cash Rice Flat-Up; Vietnamese Shipments To Africa
April 23: Vietnam banks to bail out debt-crippled firms
April 23: Expanding Social Insurance is Urgent Task in Vietnam
Vietnamese authorities frustrate Coca-Cola's promotional
efforts
Hanoi (AFP) - Vietnam's Ho Chi Minh City authorities have sent a
letter to Coca-Cola requesting that it cease a promotional competition
deemed as "a violation of the law," a city official said Wednesday.
Nguyen Cuong, deputy director of the Ho Chi Minh City Trade Department
told AFP that the soft drink giant's promotion was "a violation of law
because they went ahead with the campaign without obtaining
permission."
Coca-Cola Holdings (Asia) Ltd external affairs manager Cindy Lippman
denied the charges, saying that Coke had been denied permission to run
a promotion in Ho Chi Minh City and had respected the decision.
"We are not running a promotion in the South," said Lippman, reached
by telephone in Ho Chi Minh City.
In the contest, which Coke began running in the North on April 1,
consumers could win a mountain bike by collecting six separate bicycle
part images printed under bottle caps and pull tops on cans.
"We have run this elsewhere in many countries in the world and it has
always been successful and appreciated," she said, noting that 25
consumers in northern Vietnam had already won new bikes.
However the ordinarily more liberal authorities in the hurly burly
former Saigon have taken the moral high ground against Coke's efforts
there.
"Ho Chi Minh City will not allow any promotions which involve an
aspect of lotteries or gambling which is unhealthy," Cuong said.
Cuong said he has received many phone calls from irate parents who say
their children are neglecting their school studies because they are
spending all their time and money in pursuit of bottle caps.
But he also claimed that allowing Coke to use the promotional gimmick
in Ho Chi Minh City would be unfair to local soft drink companies.
"Local soft drink companies cannot compete with Coke and are
threatened with bankruptcy if promotions like this continue," he said.
In a media release earlier this week, the Vietnam Investment Review
weekly published results by Nielsen SRG consumer research group
showing that Coca-Cola had captured 52 percent of the domestic soft
drink market.
Coke was selling on the streets within hours of the lifting of the US
economic embargo against Vietnam in February 1994, and kicked off its
marketing efforts here by erecting an eight-meter (26-foot) high giant
inflatable Coca-Cola bottle on the steps of the historic Hanoi
Municipal Theatre.
The company has two bottling joint ventures in Vietnam, one in Ha Tay
province outside of Hanoi and the other in Tu Duc district of Ho Chi
Minh City.
___________________________________
Troubled Vietnam trading company faces overdue foreign
payments: report
Hanoi (AFP) - Troubled Vietnamese trading company EPCO Ltd, whose
director was arrested last month for defaulting on a payment to a
local bank, still has outstanding loans to foreign creditors, a local
report said Wednesday.
Vietnamese commercial banks which have issued letters of credit on
behalf of the beleaguered trading company have honored 7.9 million
dollars in letters of credit but a further 5.9 million remain
outstanding, the Saigon Times Daily reported.
The newspaper quoted the statistics from a document attributed to
State Bank of Vietnam governor Cao Si Kiem.
However officials contacted at the State Bank of Vietnam were unable
to confirm the figures. Neither were they able to give details on
which banks were concerned.
A State Bank of Vietnam official contacted Wednesday said issuing
banks were honouring their commitments although EPCO and a related
company, Minh Phung Garment Co, had defaulted on payments to banks.
Tang Minh Phung, director of Minh Phung Export Garment Co Ltd and Lien
Khui Thin, director general of EPCO Import Export Company were
arrested last month after it was collateral they allegedly offered on
a 17.3 million dollar loan to state-owned Bank for Foreign Trade of
Vietnam (Vietcombank) disappeared.
___________________________________
Big tax break for 100 percent foreign investments in Vietnam
HANOI (AFP) - Vietnam has decided to grant tax breaks to 100 percent
foreign owned investments, a local report said Wednesday.
According to a document signed by Vietnamese Prime Minister Vo Van
Kiet, wholly owned foreign invested projects can carry forward losses
as much as five years for tax purposes, the Saigon Times Daily
reported.
Under an ammended foreign investment law decree issued in March,
foreign joint ventures were eligible for the tax breaks, but no
reference was made to 100 percent foreign owned projects or business
cooperative contracts.
"That's a big break and I'm sure it will be met with a great deal of
enthusiasm," said an Australian lawyer from the Hanoi branch of
Phillips Fox law firm.
The new regulation, which was reportedly signed on April 17, would
affect nearly 600 wholly foreign owned investment projects worth more
than 5.8 billion dollars, the paper reported.
However the lawyer noted that business cooperative contracts would not
be entitled to the tax breaks.
Vietnam has licenced about 27 billion dollars worth of foreign
investment since 1988, of which about 25 percent has been realised.
Few projects have generated profits.
___________________________________
Asian Cash Rice Flat-Up; Vietnamese Shipments To Africa
SINGAPORE (Dow Jones)--Physical rice offers are unchanged to higher
late Wednesday in Asia as Thai 100%B rice prices continue to tread
higher on active exporter buying, trade sources said.
Offers for the Thai 100%B grade rice are now at $325/ton, up from
$320/ton, while the Thai 25% broken rice is offered largely unchanged
at $260/ton.
According to a senior trader in Bangkok, exporter buying of the 100%B
rice to fulfil Iranian deals concluded some two to three weeks ago is
supporting prices of the grade. Iranian buyers are believed to have
contracted 200,000 tons of the grade through several parties, he said.
It isn't known if most exporters have fulfilled their orders but some
millers are still bullish on account of the deals, he added.
Pakistani traders are also bullish on account of a wheat crisis which
is spurring domestic rice demand. They said prices are seen heading
another $10-$15/ton higher in the next two weeks.
Offers for IRRI-6 25%-30% broken rice are largely unchanged at
$215/ton while the 15%-20% broken rice is offered at $230/ton. The
Pakistani 385 basmati rice is quoted steady at $450-$460/ton.
'There is only rice in the country so everybody has to eat it instead
of wheat,' said a trader in Karachi. 'The demand is there but there
are less stocks now. Recently, there were some trucks carrying rice
from Sindh which were sold almost immediately on a cash basis.'
In Vietnam, trade is rather active, thanks to firm prices noted in
other major producing countries, said a trade source in Ho Chi Minh
city.
Underpinned by active shipments, Vietnamese 25% broken rice is now
quoted some $3-$5/ton firmer at $205/ton, while quotes for the 5%
broken rice are heard stable at $240-$242/ton.
African countries have recently contracted seven shipments of the 25%,
35% and the 100% Vietnamese broken rice, said a source with a cargo
surveyor in Ho Chi Minh city, adding loading of the low-grade rice
onboard four vessels is now underway, while another three vessels are
awaiting loading.
Each vessel should carry about 15,000 tons of the low-grade rice, he
said.
The Ho Chi Minh city trade source said some buyers from Senegal have
contracted about 50,000 tons of the 100% Vietnamese brokens, and that
the contracted price for the amount is rumored to be around current
prices of $205-$206/ton.
-By Joyce Teo 65-421-4825
___________________________________
Vietnam banks to bail out debt-crippled firms
Hanoi (Reuter) - Vietnamese banks will have to pay off huge sums of
foreign debt racked up by two of the country's biggest and best-known
private companies, the central bank's governor was quoted as saying on
Wednesday.
The state-controlled Lao Dong newspaper said the two firms, Minh Phung
and EPCO, may be stripped of their assets and declared bankrupt as
banks take steps to recover their money.
The heads of both companies were arrested last month and charged with
``taking advantage of confidence to appropriate citizens' and
socialist property.''
Lao Dong quoted State Bank of Vietnam Governor Cao Si Kiem as saying
that commercial banks had guaranteed $44.02 million worth of letters
of credit for the two companies, of which $13.8 million was overdue.
``Because EPCO and Minh Phung failed to meet the deadline for the
transfer of money to the banks, the banks have to pay off the foreign
debt on behalf of those enterprises to...protect the commercial banks'
credit reputation,'' it said.
The official Saigon Times Daily said that banks had paid $7.9 million
of trading firm EPCO's debts to foreign banks and that $5.9 million
remained to be settled.
However, Lao Dong's report put EPCO's letter-of-credit debt at $36.54
million, of which $11.6 million was overdue.
It said Minh Phung -- which is named after its boss, Tang Minh Phung
-- owed $7.48 million in letters of credit and had failed to meet the
deadline for repayment on $2.2 million.
Banking industry sources say the two firms used influence and
connections to secure huge multiple loans, usually in the form of
letters of credit, which they were unable to repay when their property
investments were hit by a market downturn.
Official media reports said Minh Phung, a garments-to-property
conglomerate, borrowed large quantities of steel and other goods from
EPCO to use as collateral for a $17.1-million loan from state-owned
Vietcombank.
They said EPCO's director general, Lien Khui Thin, later sold the
goods to pay a debt his company owed to the same bank.
The arrest of Phung and Thin came on the heels of a court case
involving Tamexco, a trading firm affiliated to the ruling Communist
Party, in which four people were sentenced to death for fraud and
corruption.
___________________________________
Expanding Social Insurance is Urgent Task in Vietnam
HANOI (Xinhua News) - Only one in six of Vietnam's 37 million workers
has so far bought compulsory social insurance as required by the
government, a Labour Ministry official said today.
He said getting the remaining 31 million workers to buy the insurance
was now an urgent task for the Vietnamese government.
Expansion of the country's new social insurance system was important
to the country's development and was vital to give Vietnamese workers
stability and security, the unnamed official told the English-Language
daily "Vietnam News."
He said the insurance scheme needed to be expanded to include all
workers in every economic sector.
Under Vietnam's social insurance regulations, the equivalent of 20
percent of a worker's salary is paid into the insurance fund. A
quarter of the amount is deducted from the salary at source, and the
rest is paid by the employer. Enditem