HCM City, Japanese firms ink semi-conductor MoU

A memorandum of understanding for co-operating in developing HCM City's semiconductor industry was signed by Vietnamese and Japanese partners last Saturday.

The MoU was signed by the HCM City Semi-conductor Industry Association (HSIA) and Kyushu Semiconductor Industries&Electronics Technology Innovation Association (SIIQ); and by HCM City's IC Design Research&Education Centre (ICDREC) and Japan's university-based venture company Radrix Co. Ltd.

The agreement allows SIIQ and HSIA to exchange information, and staff; to help the two companies' subsidiaries towards establishing comprehensive co-operation in developing the semiconductor industry, and also promote Japanese investment in it.

The MoU will help ICDREC and RADRIX to further implement the Design Project that has been signed between the two sides.

Speaking at the signing ceremony, deputy Chairman of HCM City People's Committee, Le Manh Ha, said the semiconductor industry had been developing in the city for over a decade.

His administration wanted to develop HCM City into the nation's semiconductor hub, Ha said.

Ngo Duc Hoang, Director of ICDREC, spoke about the cooperation between HSIA, ICDREC and SIIQ, RADRIX. He noted that representatives of Kyushu Semi-conductor and Electronics Association, Kyushu Department of Economy – Trade – Industry, and the Kyushu Economic Research Centre were among a delegation of Japanese chip and other industries who visited HCM City's Sai Gon Hi-tech Park in mid-October.

During a visit to ICDREC, the visitors discussed development and training of human resources for chip designing and manufacturing as well as a plan to build a Design House.

The Japanese delegation's visit to HCM City followed the Viet Nam Semiconductor Strategy Summit in September that gathered executives from the world's leading microelectronics companies as well as representatives of the Vietnamese government, local industry, academia and research organisations.

During the summit, which was organised by the global industry association serving the nano-and micro-electronic manufacturing supply chains, delegates said that the semiconductor industry was developing strongly in the Asia-Pacific region, especially in emerging markets like Viet Nam.

They said the local market was growing fast thanks to strong consumption of smartphones, TV sets, tablets, set-top boxes and electronic equipment.

The strong tendency to use high-tech devices was likely to boost semiconductor sales in the coming years, they added.

Vietnamese Business Association launched in Tokyo

Hundreds of Japanese business executives gathered at a ceremony in Tokyo on Friday to launch the Vietnamese Business Association in Japan (VBAJ).

Addressing the ceremony, Vietnamese Ambassador to Japan Doan Xuan Hung expressed his hope that the VBAJ would make it easier for companies from both nations to do business across diverse areas in trade, science-technology, culture and education.

VBAJ President Dinh Ngoc Hai said that the association was looking forward to becoming a trustworthy partner of Japanese and Vietnamese enterprises and organisations.

Global Talent Job Fair opens in the capital

The Global Talent Job Fair in Viet Nam 2013 will take place in Ha Noi today, the Korea Trade and Investment Promotion Agency (KOTRA) in Ha Noi has announced.

The two-day event, which aims to match Vietnamese talents with Korean companies, would open up new employment opportunities for not only Korean firms already investing in Viet Nam but also those who desire to make investments here, a KOTRA representative said.

The recent years have witnessed an increasing number of Korean firms investing in such industries as electricity and electronic as well as machinery engineering in Viet Nam. This has resulted in a stronger demand for human resources in these sectors, Han Mu Geun, director of CN Plus Company, which also specialises in electricity industry, said.

Speculative stocks attract foreign investment

The stock market saw strong cash flow into speculative stock last week as foreign investors continued to support the market as net buyers.

On the HCM City Stock Exchange, the VN-Index closed 0.3 per cent up at 498.61 points, while the HNX-Index on the Ha Noi Exchange leaped 2 per cent to 63.29 points.

The benchmark index edged up in the week's first three trading days to reach 502.52 points on Wednesday, though it fell below the critical 500-point level in the last two days.

Trading volume on the southern bourse averaged 80.433 million shares with an average value of VND1.002 trillion (US$47.71 million).

On the Ha Noi Exchange, the average trading volume and value reached 49.787 million shares and VND331.12 billion ($15.76 million).

The matching volume on HCM City Exchange rose by 72.2 per cent over the previous week while soaring to 141.1 per cent on the capital city's bourse.

Penny and mid-cap group stocks benefited from high trading volume last week, including FLC Group (FLC), Tu Liem Urban Development Company (NTL), Binh Thuan Mining Company (KSA), Binh Duong Mining and Construction Company (KSB), Hoang Quan Real Estate Company (HQC), Licogi 16 (LCG) and Tay Bac Mining Company (KTB). This helped boost investor sentiment and helped the benchmark indices advance on Tuesday and Wednesday.

However, blue chips failed to lure investors, dragging down the VN-Index in the last two trading days.

According to stock analysts at Vietstock.vn, strong cash flow into the market helped improve liquidity, with demand focused on speculative stocks in sectors like mining, real estate, construction and fisheries.

Mining shares led the market last week with a growth rate of 3.5 per cent, followed by fisheries shares (up 2.7 per cent), transportation shares (up 1.6 per cent) and real estate shares (up 0.54 per cent).

Notably, HCM City-listed Licogi 16 (LCG) shares increased 28.9 per cent as rumour spread that it would sell its Sky Park Residence project to a partner for VND160 billion ($7.2 million).

PetroVietnam Real Estate (PVL) rose by 37.5 per cent, the highest increase on the Ha Noi Exchange.

Foreign investors concluded last week with a net value of VND269 billion ($12.8 million), focusing on Sai Gon Water Infrastructure Company (SII), Pha Lai Thermoelectric Plant (PPC) and Ocean Group (OGC).

According to BIDV Securities, the market saw strong cash flow last week, although buyers focused on penny and small cap groups rather than blue chips. This helped maintain market liquidity while narrowing price gaps between different stock groups.

FPT Securities said that investors should consider selling some of their speculative stocks, which increased last week, both in order to make a profit and to reduce risk.

Experts at a workshop held by APEC Securities late last week said it was time for investors to consider buying real estate stocks, as recent Government measures are widely expected to thaw the market, which has been "frozen" since 2008.

Businesses debate thorny taxation issues

Representatives from 600 local businesses, along with experts at the Finance Ministry and the Viet Nam Chamber of Industry and Commerce (VCCI), met at a conference in HCM City last Thursday to discuss several contentious issues, including VAT return procedures, tax reductions for property firms, corporate tax reductions and e-customs formalities.

Le Hoang Chau, chairman of the HCM City Property Association, first pointed out that the new incentives had benefited firms, as they can now offer a 50 per cent VAT reduction on house rentals and sales of houses of under 70 sq.m and priced at under VND15 million per sq.m.

He also lauded a 10 per cent cut in corporate income tax for developers of projects for poor residents.

Nguyen Van Be, deputy chairman of the Association of HCM City's IP Enterprises, also praised the new e-customs but noted that transmission lines remained slow and unstable.

Business executives at the meeting, however, decried the harassment they suffered from tax and customs officers, pointing at conflicting views among State agencies, which confuses companies about how to best perform procedures.

Nguyen Viet Hung, an executive in charge of export sales at the HCM City-based private company Minh Luan (which imports secondhand tractors from Japan and repairs them before re-exporting them), criticised the different views among tax officers on giving tax refunds or not to companies.

Before engaging in business, for example, Minh Luan was informed by the Management and Supervision Department of the General Customs Department that the company was allowed tax refunds, but the Import-Export Tax Department later said such commodities were not subject to tax refunds.

Duy Anh Fashion and Cosmetic Co. complained that last November it filed forms to get tax refunds of VND25 billion.

Its applications were assessed twice by the tax authorities, he said. However, the company recently received a reply that no tax refund was given because of the company's large stockpile of commodities.

Responding to the complaints, Deputy Minister of Finance Do Hoang Anh Tuan admitted that local customs and tax agencies had not addressed issues faced by enterprises.

In the case of Minh Luan that imports tractors for re-export, the instruction from the Management and Supervision Department was correct, said Tuan. He ordered that the Import-Export Tax Department quickly refund taxes to Minh Luan.

Similarly, Duy Anh should also receive tax refunds quickly and agencies would have to pay the interest for any delayed refunds, said Tuan.

He explained that the regulation on cancelling tax refunds for large stockpiles would take effect next year.

Flood delays winter crop

Local farmers say they must begin planting the winter-spring rice crop late this year because flood water levels are expected to be higher and recede later than usual this year, according to forecasts from the provincial Departments of Agriculture and Rural Development in the Cuu Long (Mekong) Delta.

Farmers have prepared to cultivate 1.6 million ha under paddy fields for the coming 2013-14 winter-spring crop.

In Can Tho City's districts of Thoi Lai, Co Do and Vinh Thanh, farmers have already bought fertilisers and other materials for the new crop.

Pham Van Quynh, director of Can Tho's Department for Agriculture and Rural Development, said the city would cultivate 87,800 ha under the winter-spring crop under a strict schedule to avoid pestilent insects.

"To link farming with product consumption and to raise farmers' income were now the number-one task of the Cuu Long (Mekong) Delta's agricultural sector," Quynh told Viet Nam News last week.

An Giang Province is expected to cultivate 234,000 ha under this year's winter-spring crop.

Nguyen Huu An, chief of An Giang Plant Protection Division, said farmers in the province had been advised to use selective rice varieties such as Jasmine, OM 2517, OM 4218, OM 5451 and OM 7347.

Meanwhile, farmers in Dong Thap Province were pumping out water from their rice fields and strengthening embankments for 205,000 ha under the coming 2013-14 winter-spring crop.

Ngo Van Khuong, a farmer from Tan My Commune of Dong Thap Province's Lap Vo District, said he had bought materials a month earlier when prices of these materials were lower.

Firms boost sales to UK

The UK, Hong Kong and Cambodia have become major importers of Vietnamese goods, with export turnover in the first nine months of the year ranging between US$1.89 billion and $2.41 billion.

Exports to the UK were higher than the $2.398 billion of Vietnamese goods imported in 2011, and are expected to reach $3.85 billion in 2013, a year-on-year increase of 26.9 per cent.

Fifteen products sold by Viet Nam to the UK have attained export turnover of over $10 million, including telephones and components ($994 million); footwear ($400 million); textiles and garments ($351 million); and computers and components ($313 million).

Local firms expect bigger sales to the UK, with a population of 63.2 million and total import turnover of $833 billion in the same period.

In the first nine months of the year, 13 Vietnamese products earned export turnover of more than $10 million to Hong Kong, including cameras and components ($783.4 million); telephones and components ($633.4 million); computers, electronics and components ($292.6 million); and machinery and equipment ($262.4 million).

Per capita imports in Hong Kong of Vietnamese goods was valued at $535 this year, up from $522 in 2012.

In 2013, Vietnamese firms also target exports of $3.8 billion to Hong Kong, which has a population of over 7.1 million.

However, Viet Nam's exports account for only 5 per cent of Hong Kong's total imports of about $80 billion in 2013.

This year Viet Nam has also targeted exports of over $3 billion to Cambodia, which has a population of 15 million.

Thirty-one products exported from Viet Nam to Cambodia registered turnover of $10 million, including fuel ($467 million); steel of various types ($337 million); fertilisers ($157 million); and textile and garments ($185 million).

Other exports to Cambodia include machinery, equipment and accessories, confectionery, seafood, coffee, paper, porcelain; electric wires and cables; means of transportation and accessories; and telephones and components.

EuroCham adds focus to sustainable growth

The latest edition of the annual "White Book" published by the European Chamber of Commerce (Eurocham) in Viet Nam will have an additional chapter on sustainability, reflecting the importance that its members accord to the issue.

A Eurocham statement also said that the book, which offers a comprehensive overview of the current business, economic and regulatory environment in Viet Nam from the perspective of the European business community, will be published next Monday.

The sixth edition of the annual "White Book on Trade/Investment Issues and Recommendations", aims to provide important information on policy making and serve as a foundation for further constructive dialogue between the European business community and the Vietnamese Government, the statement said.

It quoted Eurocham chairman Preben Hjortlund as saying: "The White book is a key EuroCham publication, which aims to give the Vietnamese Government a clearer overview of how different issues impact, not only the European business community, but also how, - if resolved – these issues could influence the potential growth of the Vietnamese economy in terms of increased FDI, jobs, tax returns and better and safer products for the Vietnamese population."

The book is "a collective expression" of the views of its almost 800 members who operate in a wide range of business sectors in Viet Nam including human resources, intellectual property rights, taxation, transport and logistics.

It is an outcome of the successful Green-Biz 2013 Conference held in September, and has sector-specific chapters including banking and finance, energy, fast moving consumer goods, information technology and tourism, apart from the new chapter on sustainability.

This new edition's structure reflects "Eurocham's wish to work alongside the Vietnamese Government towards achieving common goals: facilitating and increasing foreign investment in Viet Nam, boosting economic growth, providing new job opportunities for the local population and enacting positive socio-environmental changes, amongst others," the statement said.

Eurocham members have prioritised issues in their business area that they feel the Government should address with priority and made specific recommendations to resolve or improve the current situation.

The statement said Eurocham would hold a roundtable dialogue with related ministries to present the recommendations, and reach out to individual ministries to discuss issues highlighted in the book in greater detail.

The business body's executive director, Csaba Bundik, said the White book launch was "very timely" given the current context of Viet Nam's international trade relations. He noted that Viet Nam was engaged in several key negotiations, including the EU-Vietnam FTA and working towards ASEAN Economic Integration in 2015.

Top project managers gather for ProMac

Leading local and international project managers met in Ha Noi on Wednesday for the 7th International Conference on Project Management (ProMac2013), discussing issues affecting IT, education, finance and the nation's economy.

This year's ProMac conference attracted over 250 international delegates from 10 countries, with strong representation from R&D departments from the world's largest companies including Fujitsu, Hitachi and IBM Japan.

Teaching staff from universities across Japan, Malaysia, Indonesia, China, India and Viet Nam were also present

This year's conference saw 60 topics discussed in groups by experts and project managers.

With rapid development occurring in many fields, there has been an increasing need to foster project management skills across many areas of economic development.

Bringing ProMac to Viet Nam, the Japanese Society of Project Management (SPM) predicted the event would allow Vietnamese project managers to tap into Japan's vast project management community.

Dean of FPT University Le Truong Tung, under the management of the country FPT software, said FPT University was the first one in Viet Nam to introduce project management into tertiary and post-graduate training programmes, inviting project management experts from local companies including Viettel and CMC, to discuss their experience and knowledge with students.

Tung said that project administration in Japan was ranked the best in the world at mark 10, with Viet Nam currently at mark 6.

He said his university was fully aware that students needed to be taught project management at university to enable a faster transition into the workforce and the ability to work on large scale projects.

Truong Gia Binh, chief of FPT shared his views on the challenge and opportunities in the field of project management in Viet Nam.

Moving to information technology (IT) as the core platform for development, he said Viet Nam faced significant challenges in IT development including low levels of high skilled IT workers.

Binh noted that these problems were partially discussed and progressed at Promac 2013 this year.

Chairman of SPM, Seki Tetsuro, said Viet Nam was a potential destination for the global IT industry, with events like ProMac 2013, helping to identify areas of improvement and share inside knowledge.

The organising committee of PROMAC said it expected to see more project management units being taught in universities as a way to keep students in touch with changes in the industry.

The meeting was co-held by the FPT University and Japanese Society of Project Management and it concludes today in Ha Noi.

Top 50 entrepreneurs vye for award

Nhip Cau Dau Tu (Investment Bridge) magazine has instituted an award for the 50 top Vietnamese entrepreneurs to recognise their efforts to overcome difficulties in business development.

The criterion in the first round of selection is the turnover and profit of a company in which a candidate is either general or deputy general director.

For companies in Ha Noi and HCM City, the turnover should be at least VND200 billion (US$9.5 million) and profit, VND20 billion.

The requirement comes down to a half in other locations.

The final round will assess candidates' creativity and ability to develop human resources.

The jury consists of former State Bank of Viet Nam governor Cao Si Kiem, senior economist Pham Chi Lan, PWC general director Dinh Thi Quynh Van, PACE Institute of Management chairman Gian Tu Trung, and Saigon Asset Management chairman Louis Nguyen.

Applications should be sent to the magazine's HCM City representative office at 63A Vo Van Tan Street before December 20.

The awards ceremony will be held in January 2014.

Viet Nam-China economic zone to aid trade surge

A trans-national economic cooperation zone connecting Dong Dang in northern border Lang Son Province of Viet Nam and Pingxiang (Guangxi, China) will benefit both local and national co-operation and mutual development.

This was stated by participants at a workshop on Monday.

Ma Jixian, Deputy Director of the Department of Commerce of Guangxi, which borders Viet Nam's northern Lang Son Province, said it was time for both sides to build such a zone.

Participants suggested Lang Son develop infrastructure, improve border gate management and simplify customs procedures alongside increasing customs co-operation with China.

A weeklong Viet Nam – China Trade Fair is underway in the province's Lang Son city. The event, which saw the participation of over 330 businesses including 30 Chinese firms, aimed to increase bilateral trade.

Quy Nhon port's new wharf put into operation

The Quy Nhon New Port Joint Stock Company has put into operation a 220-metre wharf, which can handle 37,500-tonne container ships.

The new facility, which was built next to the main wharf at a cost of VND200 billion (US$9.4 million), aims to ease the overloaded Quy Nhon port, said General Director of the Quy Nhon port Nguyen Huu Phuc on Tuesday.

The Quy Nhon port has received over 1,000 ships so far this year, including 529 from abroad with customs clearance for more than 5.7 million tonnes of goods, a year-on-year increase of 16.6 per cent.

It is expected to have 6.3 million tonnes of cargo passed through customs at the end of this year.

Thanks to its geographical advantages, the Quy Nhon port complex is home to three seaports, including two trade ports, namely Quy Nhon Port and Quy Nhon New Port, and a military port.

Seafood exports create big profits for Bac Lieu

Southern Bac Lieu Province earned US$294 million from seafood exports in the first 10 months of this year, a year-on-year rise of 8 per cent, and equivalent to 83 per cent of its planned figure.

Over 38,200 tonnes of seafood were processed for the province's exports in the reviewed period, a year-on-year surge of 33 per cent.

Shrimp is still a key export product on the list, fetching more than $286 million from the export of 37,000 tonnes, up 17 per cent from the same period last year.

Firms face challenges completing targets

Dong Phu Rubber's (DPR) revenue in the first 10 months reached VND800 billion (US$37.7 million), accounting for only 65 per cent of the annual target and 73 per cent of last year's figure.

Its gross profit was VND287 billion ($13.5 million), completing only 56 per cent of the annual plan. The reason behind the gloomy results is that product prices have been below expectations,

The average selling price in the period was VND54 million ($2,500) per tonne compared to the expectation of VND62 million ($2,900) per tonne.

Meanwhile, Song Hong Construction (ICG) is struggling to achieve its modest VND18 billion ($849,000) profit target this year.

In the third quarter, the company saw a loss of VND1.7 billion. It expects to sell apartments at only one project in the fourth quarter, which the company's director Nguyen Thanh Tung said would not be enough to help his firm gain the anticipated profit.

Dragon Capital and affiliates increase stake in Masan

Private equity group Masan (MSN) sold nearly 29.8 million shares to Dragon Capital's affiliates on October 30, the group announced.

In 2010, a Masan subsidiary issued promissory notes worth over VND2.85 trillion (US$134.4 million) to Dragon Capital's affiliates in exchange for the ownership of the Nui Phao mine in northern Thai Nguyen Province.

A sum of VND893.4 billion ($42.1 million) was paid in cash, while the share sale accounted for the remaining VND1.96 trillion ($92.4 million).

After the transaction, the group of investors related to Dragon Capital raised their stake in Masan to 4.38 per cent, higher than global private equity investment group TPG Capital's holding.

Company aims for 18 per cent dividends

Phuong Nam Education Investment And Development (SED) will pay dividends at the relatively high rate of 18 per cent this year, the Viet Nam Securities Depository announced.

The payment will be transferred on December 23, while the last day for registration will be November 22. Shareholders will receive dividends in cash.

Brokerage and auditing firm ink risk management deal

BIDV Securities Co and auditing firm Ernst & Young Vietnam signed a risk management co-operation deal on Thursday.

Under the agreement, Ernst & Young will provide the brokerage with technical support as it builds a thorough risk management system.

Le Quang Huy, deputy general director of BIDV Securities, hoped the partnership would help his company become more efficient and professional.

Local tuna exporters struggle to reach last year's windfall

This year's tuna exports will fail to reach last year's level of US$600 million as exports to Japan and the US, the country's two main markets, tended to further decline in the latter months.

The forecast was announced by the Viet Nam Association of Seafood Exporters and Producers (VASEP).

Over the past nine months, Viet Nam had exported $415 million worth of tuna products, down 4.5 per cent from the same period of 2012, VASEP said.

The association attributed this unsatisfactory performance to the 10-15 per cent cost increase and the decline in domestic caught tuna in recent months, resulting in less raw tuna supply for processing.

Thus, it was a difficult task for the industry to speed up exports in the remaining months of this year, it said.

Japanese experts outlined backward techniques in pre-processing and post-harvest preservation as major obstacles that had limited the country's tuna exports, especially to strict markets like Japan.

The past nine months witnessed a significant drop of nearly 20 per cent in Viet Nam's tuna exports to the country, as its Government has curbed food hygiene inspection for imported seafood products.

Japanese enterprises could consume all of Viet Nam's tuna if they are well-processed and well-preserved and satisfy Japan's requirements, experts said.

Specifically, Japan could buy about a large volume of tuna per year, caught primarily in the provinces of Binh Dinh, Phu Yen and Khanh Hoa.

Authorities of central Binh Dinh Province were developing plans to send workers to Japan to learn about tuna processing and preservation with an aim to improving the quality and export value of Viet Nam's tuna.

Vietnam has strong retail market with high potential

With a population of 90 million people, Vietnam has a strong retail market with very high potential for local and foreign retail giants to pour in investments.

The Association of Vietnam Retailers believes that a modern style of retailing plays a key role in the development of the nation’s consumer market.

Currently, the country has around 750 supermarkets, 130 shopping centers and approximately 9,000 traditional markets.

Six years after joining the World Trade Organization (WTO), Vietnam’s retail market has become far more modern.

The growth of local retail outlets like Co.opMart, Maximark, Citimart, Vinatext-Mart has lured foreign retail giants such as Metro Cash and Carry, Big C, Parkson, Diamond Plaza, Lotte, Circle K, Zen Plaza and Family Mart.

Wholesale and retail markets have so far contributed largely to the country’s economy with 15.5 percent of Vietnam's gross domestic product. Foreign Direct Investment (FDI) projects in the retail sector are continuing to grow. According to the Association of Vietnam Retailers, in the first nine months of the year, around 168 new FDI projects have been registered with total investment around US$380 million.

Accordingly, labor in wholesale and retail sector also increased with more than 5.5 million people.

Vietnam is seen as a market with tremendous potential for retail growth as most of its population can be considered part of the younger generation, a group with significant purchasing power, with 70 percent of consumers’ shopping through retail market channels.

Although the modern style of retailing via markets and trade centers has seen strong growth, it is still lower than counterparts in other Asian countries. At present this type of retailing accounts for only 22 percent, while it is 33 percent in the Philippines, 34 percent in Thailand, 60 percent in Malaysia, and 90 percent in Singapore.

Explosive growth of modern retail market channels has led to fierce competition between modern and traditional retail channels in the country. Despite modern retail channels expanding drastically, traditional retail markets in Vietnam have still survived.

Dinh Thi My Loan, General Secretary of the Association of Vietnam Retailers, said modern style of retailing accounts for only 22 percent while 78 percent still belongs to the traditional retail market.

About 70 percent of Vietnamese people live in rural countryside areas, therefore, however strongly modern retail channels develop; they will never overshadow the traditional retail market. Nevertheless, traditional retail markets have to improve their quality under strong pressure of competition.

According to the Ministry of Industry and Trade, by 2020 the nation will have around 1,200-1,300 supermarkets, 180 commercial centers and 157 shopping centers.  This shows that the country’s retail market will remain very attractive for both local and foreign retail giants.

HCM City firms ready for Lunar New Year goods rush

Enterprises in Ho Chi Minh City have basically completed plans to prepare goods for the upcoming Tet (Lunar New Year) holiday, which falls on January 31, 2014, according to the municipal Department of Industry and Trade.

Le Ngoc Dao, the department's deputy director, said that firms have speeded up production and started stockpiling nine commodity groups that fall under the city's price stabilisation programme.

The department has also encouraged enterprises to increase reserves of other goods like beverages, beers and confectionery, Dao said.

Supply from enterprises taking part in the city's price stabilisation programme will account for 30-40 percent of goods in the market, three wholesale markets will cover another 40-50 percent and other enterprises (those not participating in the programme) will comprise the rest, she said.

Many enterprises plan to increase supply for this Tet. Vissan Company, one of the country's biggest meat processing companies, plans to invest 600 billion VND (28.4 million USD) to store meat and processed food for the upcoming festival, 20 percent more than last Tet.

The Bien Hoa Confectionery Corporation, or Bibica, plans to supply about 1,250 tonnes of confectionery, up 10 percent over the previous Tet.

Many poultry and egg providers like Ba Huan, Vinh Thanh Dat, Pham Ton and San Ha have said they have increased investments to raise supplies by up to 30 percent for this Tet.

The enterprises have assured that commodity prices would be stable from now until the holiday. They have also said that they would launch promotion campaigns as the festival nears, as also opening more sales points in crowded residential areas.

According to the department, the number of outlets selling price-stabilised goods has increased strongly over the last few years, reaching 7,500 as of September this year from just 2,000 in 2008.

Foreign-invested supermarkets have also participated in the city's price stabilisation programme, working with their distributors to stock essential goods and offer good prices to customers.

Vietnam manufacturers make profits with overseas factories

Several Vietnamese companies have transferred manufacturing operations overseas.

Many products such as Dr. Kool toothbrushes and Dr. Clean handwash, which are made in South.Korea and Thailand, are favoured by supermarkets and customers. Dr. Clean products especially have dominated domestic market, and they are actually owned by a Vietnamese corporation, Sao Nam Group.

The director of Sao Nam Group Pham Cong Sinh said they send designs and brand names to their manufacturing partners overseas and import the goods to Vietnam as the distributor.

The deputy head of the Ministry of Agriculture and Rural Development, Nguyen Thi Xuan Thu, said many companies are producing pesticides and preservatives overseas as well in order to avoid inspection on quality and licenses. Thu also said that it is difficult to manage these commodities.

Vu Vinh Phu, President of Hanoi Supermarket Association, said those products that are sold for higher prices than the same ones made domestically because they incur higher overhead costs, such as labour wages, import taxes and transport fees.

"Vietnamese people often prefer foreign products over domestically-made ones, so those companies still make more profits than others. The downside is that customers refuse to buy domestically-made products, which may cause Vietnam to suffer from labour surplus and leave the government unable to collect corporate taxes." he said.

He went on to say that, due to lack of legal framework, these companies have not violated any regulations. However, government needs to issue suitable policies to encourage people to buy domestically-made products and to attract manufacturing back home. In fact, Vietnam's supporting industry is so weak that companies are forced to import a vast majority of goods, which makes them reluctant to open factories in Vietnam.

Meanwhile, expert Hoang Tho Xuan raised doubts about the quality of such products. He said, "We need to tighten control over these products basis of decrees on anti-smuggling and trade fraud."

Storm damage prompts scrutiny of rubber planning

Vietnam will scruntinise rubber planning and may make adjustments to prevent possible losses from typhoons in the future, as well as attain sustainable growth, one official has said.

Dr. Pham Dong Quang, Deputy Director of the Ministry of Agriculture and Rural Development (MARD)’s Cultivation Department, made the statement at a seminar on the issue held in Hanoi on November 8.

After the 10th and 11st typhoons hit Vietnam recently, a total of 21,500 hectares of rubber trees in northern central region were affected with up to 13,000 hectares entirely destroyed. Quang Tri, Quang Binh and Ha Tinh Provinces were the hardest hit. Vinh Linh District in Quang Tri Province incurred losses of over VND2 trillion (USD94.63 million).

The situation was mainly a result of a fact that so many of rubber growing areas were developed outside of the MARD’s planning. Under the plan, rubber growing areas in the region should be around 80,000 hectares by 2012; but to date the figure has reached over 132,000 hectares.

“Minister of Agriculture and Rural Development has directed the Institute of Planning to scruntise rubber planning nationwide, especially in northern central region this year. The ministry will then make an official proposal to the government to make any necessary adjustments,” Quang noted.

According to Quang, rubber has been grown in the region for 53 years and has considerably improved incomes in these areas, and it is necessary to maintain around 80,000 hectares of rubber areas under planning mentioned in the government’s Decision 750.

However, due to the effects of climate change, all stakeholders should draw lessons from these events and work out a comprehensive solution to protect the current rubber growing areas and expand production in the future.

“It’s necessary to quickly draw out a technical plan for rubber cultivation for the northern central region, especially solutions to deal with the effects of storms. The solution is not to simply expand rubber growing areas, but to switch some of them to other crops, such as pepper, weed, corn and soybean,” he suggested.

Dr. Nguyen Ngoc Lung, Director of the Institute of Sustainable Forest Management and Forest Certificate, said rubber growers are investors who should act responsibly and keep close track of market changes.

“Over the past two years, Vietnam’s rubber exports have increased considerably, but rubber export revenues are tending to decrease. Those that are in a rush to grow rubber should take a lesson from the rice and coffee growers," Lung added.

Vietnam may not meet target for credit growth

Many domestic banks are trying various ways to meet their credit growth targets for 2013 amid difficult economic situation.

The State Bank of Vietnam's Credit Department Director, Nguyen Viet Manh, said that even though credit growth has improved significantly compared to the same period last year, it is still far from the expected target of 12%. To be able to meet the target, loan disbursements must increase by 1.5% or VND 40 trillion. But the task is proving difficult amid a sluggish economy.

Dong A Bank's financial report showed that they only had VND400 billion (USD19.2 million) in profit, a decrease of 55% from last year. According to the report, they had to give up nearly VND500 billion to the risk prevention fund and their bad debts is accounted for 2.93% of outstanding loans as of September 30.

Meanwhile, representatives from many banks also said that their dividend percentage this year would be low. Some banks have chosen to lower their gap between lending and deposit interest rates in order to attract more borrowers.

The vice director of a bank in the southern region said their credit growth rate will not be able to reach 10%. "We implemented many promotion and stimulus programmes, but it won't cover up the spending on risk prevention fund and interest for depositors," he said.

The deputy head of ACB Bank, Nguyen Thanh Toai, also said, "This year we focused on recovering mature debts so our credit growth rate appears weak."

Meanwhile, there are still banks that performed well, such as Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) and Bank for Investment and Development of Vietnam (BIDV). In the first nine months of the year, profit of Sacombank is VND1.7 trillion and BIDV's profit is VND3.1 trillion. However, BIDV currently still owns over VND8.7 trillion of bad debts.

Vinatex focuses garment investments on central region

Leading state-owned textile and garment group Vinatex is scaling up investments into the central region pursuant to the sector’s strategy to relocate factories to localities.  

The most recent development was Vinatex general director Tran Quang Nghi’s trip to the central region to check the progress of the group’s investment projects in Nghe An province in line with the textile and garment industry development strategy to 2020 focusing on central locations.

Over the last two years Vinatex member Hanoi Textile Garment JSC (Hanosimex) invested around $33 million into new projects in Nghe An.

Two of the projects went operational in April. The first was a knitwear factory with an annual capacity of 5.1 million items and the other a shuttle-woven garment factory producing 3.6 million units a year.

According to the company’s deputy general director Nguyen Song Hai, Nghe An, Ha Tinh, and Thua Thien-Hue provinces will be Hanosimex’s strategic investment destinations in the coming time.

“The province’s abundant labour forces alongside preferential investment policies and the sector’s commitment to move factories to localities have inspired us to drop anchor in Nghe An,” Hai said.

Apart from accommodating mainstream projects on material production, the central region is also a destination for Vinatex’s capacity building investments.

Vinatex will soon complete the licensing for its Vinatex Bong Son garment plant at an industrial cluster in south-central Binh Dinh province.

The project developer, Vinatex Bong Son Garment Company Limited, was founded recently and the local People’s Committee has agreed in principle to lease land for the project.

The $9.8 million project would include 51 production lines in total, with 17 in the first phase. Its core products would be suits and trousers.

Hanosimex is also busy completing procedures to begin construction of a raw cloth knitwear factory with an annual output of 4,000 tonnes in Nghe An valued at $7.2 million.

Another Vinatex member, Garment Company 10 is nearing completion of its expansion of Ha Quang Garment Enterprise in central Quang Binh which specialises in making shirts for export.

Vinatex statistics show that in the first half of this year the group kicked off construction on 46 investment projects worth $239 million including 14 yarn and fibre, 4 textile, and 20 garment.

Vinatex’s total investments in 2013 is expected to reach $476 million, most of which will go into developing projects in the central region which has advantages such as labour and investment incentives.

Global iconic brand brings innovation and business opportunity

Tupperware Brands Corporation announced November 6, 2013 its debut in Vietnam.

Tupperware Vietnam will offer a business opportunity and globally recognised products helping families to improve their lives.

Tupperware is passionate about changing lives and instilling confidence in every one of its 2.8 million independent sales force and hundreds of millions of consumers around the world.

For over 65 years it has been a worldwide commitment of Tupperware Brands to enhance the quality of life by enlightening, educating and empowering women and men as part of the Tupperware Brand’s Chain of Confidence.

As a trusted World Class Company, Tupperware is confidently looking forward to becoming a trusted and appreciated everyday companion for the Vietnamese consumers by helping them lead better and healthier lifestyles with high quality products.

Vietnam, with a population of 90 million, is the third most populous country in the Association of South East Asian Nations (ASEAN) and the 13th most populous nation in the world.

“Our core commitment is to focus on economic development around the world and we believe that Tupperware Brands can make a significant, life-changing impact on the lives of thousands in Vietnam,” said Rick Goings, chairman and CEO of Tupperware Brands Corporation.

“When looking at expansion, we were focused on an emerging area with a growing economy and population, and Vietnam was a natural fit where we can offer both high quality, innovative products as well as unique Tupperware Brands business opportunity that drives personal and professional development.”

Having received several prestigious international awards Tupperware’s much in demand and trendy products span across several categories in the food area such as storage, preparation, serving and transport.

In each category, Tupperware products provide consumers with smart, practical and simple solutions to their everyday needs. Tupperware enables consumers to stay healthy and to save money and time.

At the same time the products contribute to protecting the environment by reducing energy consumption, packaging and food waste, disposable containers and more.

The majority of Tupperware products come with a Lifetime Warranty reinforcing the brands high quality, innovation making it possible for people to buy the Tupperware products with confidence.

“I am impressed by the entrepreneurial spirit, the creativity and the dedication that I have seen in Vietnamese men and women. Tupperware embraces such values and I am looking forward to the same success in Vietnam that we have seen in the other emerging markets in Asia Pacific and around the world,” said Christian Skroeder, Group President Tupperware Brands Asia Pacific.

“While working to obtain the direct selling license Tupperware has engaged about 50 sales people. This allows us to establish an environment of well-trained representatives who can execute our business model while introducing the rewarding benefits of our products to consumers.”

Hanoi battles southern hub for retail investors

The latest figures on retail estate space suggest that Hanoi may be catching up with Ho Chi Minh City as the country’s most attractive destination for retail development.

Foreign retail investors have often chosen Ho Chi Minh City for their first forays into VietnamPhoto: Le Toan

According to the latest report from CBRE Vietnam, Hanoi has more total retail space than Ho Chi Minh City despite the smaller population.

Hanoi is home to around one million square metres of retail space, while Ho Chi Minh City has less than half of this total, at just 450,000 square metres.

The gap between the two cities will become even larger in 2015 when Hanoi is due to have up to 2.2 million square metres, triple Ho Chi Minh City’s predicted total.

This low quantity of retail space in Ho Chi Minh City has led to higher than average rents and limited choice for those seeking retail outlets.

Foreign companies looking to enter the Vietnam market, have typically begun their operations in Ho Chi Minh City due to its reputation as the country’s economic hub. However, these traditional conceptions may be changing due to the recent growth of Hanoi.

“Hanoi is the rising star, and we see that there is a shift of investment trend to the northern provinces of Vietnam, particularly Hanoi,” said Richard Leech, executive director of CBRE Vietnam.

Both Starbucks and Burger King are continuing their expansion plans, while Auchan, one of the world’s largest hypermarket chains, is considering channelling $500 million into Vietnam over the next 10 years. Meanwhile, burger giant McDonald’s will enter the Vietnam market in 2014.

Leech revealed that in March next year, Central Group, a renowned Thai retailer, will setup operations in Hanoi’s Vincom MegaMall Royal City.

“This will cause a remarkable change to Hanoi’s retail market because Central Group will bring hundreds of famous brands,” he predicted.

A number of large-scale retail developers are present in Vietnam. The domestic firm Vincom, owner of the new Vincom MegaMall Royal City enjoys very high occupancy rates of around 95 per cent.

In Ho Chi Minh City, Coopmart is listed among the top 500 Asian retailers. The group is expanding to Hanoi later this year when they will open their second centre in the country which will supply more than 10,000 square metres of retail area.

Singaporean retailer Fairprice and Saigon Co.op have also received approval for a commercial joint-venture and will open two supermarkets named Co.opXtra and Co.opXtraPlus in the near future.

The Korean company Lotte has been gradually consolidating its presence in Vietnam with four centres already operating in Ho Chi Minh City, Dong Nai and Danang. The fifth Lotte centre will be opened at the beginning of next year in Hanoi’s Mipec Tower, while the Lotte Hanoi Centre, its first private Hanoi complex, will be opened in the second quarter of 2014. Lotte also has unveiled its plan to open 60 supermarkets in Vietnam by 2020.

Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR