Kien Giang pulls plug on projects

The southern Kien Giang Province People's Committee has pulled the plug on 11 projects in Kien Luong District following undue delays by the investors in proceeding with them.

It has ordered the Department of Planning and Investment to revoke the licences issued for the projects.

Le Khac Chi, the department director, said the projects have a combined investment of VND7.2 trillion (US$345.8 million). One of them, which sought to build infrastructure for the 2,595-hectare Kien Luong Industrial Park and the Khoe La Port (100ha) alone was worth VND7 trillion.

All of them had been approved between 2006 and 2011, but fell behind schedule, Chi said.

The committee also instructed the department to review the progress of 21 other long-delayed projects also in Kien Luong to find the cause and solutions. Among them are four large projects — a thermal power costing $6.7 million planned by the Tan Tao Group, the VND2.6 trillion ($128.7 million) Hon Chong Port by the Phu Hung Company, a VND900 billion ($43.22 million) waste treatment plant by Thai Binh Duong Company, and the VND600 billion Hon Phu Tu Tourism Area by the Kien Giang Tourism Joint Stock Company.

Investor punished for manipulation

The State Securities Commission has fined Pham Tanh, an investor from the central province of Quang Ngai, VND250 million (US$11,900).

He was found to use five different accounts to manipulate the share price of Luong Tai Construction and Investment Co (LUT).

The commission found no illegal revenues from the manipulation within the company.

Investors favour Treasury bonds

Nearly 100 per cent of Government bonds issued by the State Treasury successfully found buyers on Thursday.

Accordingly, a total value of VND5.9 billion (US$280.9 million) out of VND6 trillion ($285.7 million) was mobilised. The two-year and three-year bonds yield 8.3 and 8.53 per cent, respectively.

Since earlier this year, the State Treasury has raised VND33.16 trillion ($1.5 billion) through Government bonds.

Meanwhile, bonds issued by the Viet Nam Bank for Social Policies were bought yesterday with a value of only VND250 billion ($11.9 million), yielding 9.8 per cent.-

Packing company seeks to delist

PP Pack Marking Co (HPB) will seek its shareholders' approval to delist shares on the Ha Noi Stock Exchange at the upcoming shareholders' meeting expected to be held on April 18.

The company's profit distribution in 2012 and business plan in 2013 will also be discussed at the meeting. In addition, HPB plans to pay a cash dividend for the year of 2012 at the rate of 15 per cent. The payout is projected on April 25.

March 20 is the deadline for shareholders to register their participation at the meeting, the Viet Nam Securities Depository announced.

Draft decree on derivatives

The State Securities Commission is drafting a decree on derivatives products and planning to collect opinions from relevant bodies and market participants on the draft by the end of this month.

To ensure the feasibility as well as careful deployment of these financial products, the draft decree will aim to develop principal derivative products based on Government bonds and stock indices, said Nguyen Son, director of the commission's Market Development Department.

Under the plan, the draft decree will be submitted to the Government for consideration this year.

An Binh Bank sells treasury stocks

An Binh Bank (ABBank) sold out all of its 6.3 million treasury stocks to three groups whose identities were not disclosed.

The deal brought about a profit of VND37.7 billion (US$1.8 million) at the price of VND6,000 a share, the bank announced.

Its current charter capital reached VND4.2 trillion ($200 million) with three major shareholders holding a combined 53.18 per cent stake.

They are Electricity of Viet Nam (EVN; 24.3 per cent), Malaysia's Maybank (20 per cent) and Ha Noi Export-Import Co (Geleximco; 8.84 per cent).

CMC Telecoms to provide broadband Internet

CMC Telecom will provide broad band internet from August this year with a target of reaching 200,000 subscribers, said Ngo Trong Hieu deputy general director of CMC Telecom.

The information was released at the signing ceremony for a strategic agreement contract signed by CMC Telecom and Viet Nam Television to provide internet via Viet Nam Television's cable TV system.

Australia catches seafood exporters' eye

Australia offered untapped opportunities for Vietnamese seafood exporters, said chief representative of the Viet Nam Trade Office in Australia, Nguyen Bao.

Bao urged domestic firms to better ensure hygiene and food safety, bolster trade promotion activities and concentrate on advertising their products in an attempt to boost exports to Australia.

Expert enterprises should promote exports of finished and semi-finished seafood products as Australian consumers did not want to spend a lot of time on processing, he said.

"This would also help firms diversify export products and add value to every single unit of product in a bid to effectively penetrate the market," he stressed.

The Australian Seafood Importers Association chairman Norman Grant emphasised the importance of further advertising the quality of Vietnamese seafood in Australia.

False information about Vietnamese seafood resulted in a modest presence of many quality Vietnamese seafood products on the tables of Australian households, he said.

According to statistics from the Viet Nam Association for Seafood Exporters and Producer, Viet Nam shipped US$184 million worth of seafood to Australia in 2012, up 14.2 per cent year-on-year.

This made Australia the seventh largest importer of Vietnamese seafood.

The association predicted that Australia remained one of the bright spots for the country's seafood exports in 2013.

VAT law revision to simplify tax calculation, expand relief

The revised law on value added tax (VAT) will simplify tax calculation methods and expand the list of those who can enjoy a tax exemption.

The beneficiaries include many firms related to health and agriculture insurance as well as other areas, according to the Ministry of Finance.

Experts said the country's current VAT regulations, issued in 1997 and revised repeatedly in 2003, 2005 and 2008, still lacked a clear VAT registration threshold, making tax calculation complicated for both enterprises and tax authorities.

The draft amendments establish a turnover-based threshold for VAT registration that the ministry says will simplify administrative procedures, reduce costs and prevent tax fraud.

The threshold will likely be about VND1 billion (US$47,620).

All businesses with turnover above this threshold must pay VAT under the credit method, while those with less turnover will pay taxes under direct calculation of value added.

The draft amended law will be proposed to the National Assembly for approval in May.

Credit institution investment rules to be tightened

The State Bank of Viet Nam's draft decree that includes strict requirements and conditions for share acquisitions could see mixed responses from foreigners who want to invest in credit institutions.

Under the draft decree, in order to hold 10 per cent of the charter capital of a Vietnamese credit institution, foreign investors must meet certain conditions.

They must have minimum total assets of US$10 billion if they are foreign banks, foreign financial companies or foreign financial leasing companies.

If they are foreign investors in other sectors, they must have a prescribed capital of $1 billion or more in the year preceding the year of registration of share purchases.

They are also required to "have international operation experience and be rated at a stable level or at a high level by international credit rating organisations, and they must show financial resources to purchase shares, which would be determined by independent auditors' financial statements in the year preceding the year of registration of share purchases".

The draft decree also requires that the investors' share acquisitions must help maintain stability of the credit system. They also would be prevented from creating a monopoly or engaging in unfair competition.

If combining the stake of related shareholders to the banks, the draft shows that foreign financial institutions can own a maximum of 30 per cent in their Vietnamese counterparts.

"However, this rate is not alluring enough for foreign investors," said banking expert Nguyen Tri Hieu, explaining that it applied to weak banks, which was even stricter than current regulations.

Hieu advocated to lift the rate to 40 per cent, and the Prime Minister would define specific cases.

"We will have to fulfill the commitments to the World Trade Organisation, the ownership ratio should be gradually lifted."

It would not distort the operation of the system, he added, saying that foreign players needed Vietnamese factors in them to develop.

Meanwhile, under the draft decree, the foreign investor must not violate the laws of the country where the foreign investors are incorporated and their head office is located.

In addition, foreign investors buying shares at Vietnamese credit institutions must be foreign banks, foreign financial companies, or foreign financial leasing firms allowed to operate within the laws of the country where their head offices are located.

The draft decree stipulates that foreign financial companies will be allowed to be strategic investors only in Vietnamese financial companies, and foreign financial leasing companies only at Vietnamese finance leasing firms.

In addition, foreign strategic investors must have international financial and banking experience for at least five years, and have the financial capacity and ability to assist Vietnamese banks in developing banking products and services, raise administration capacity and apply modern technologies.

Their strategic interests must conform to Vietnamese bank development strategies and meet specific criteria set by Vietnamese banks.

Exhibition forecast to pack punch

Exhibitors from 29 countries will bring their latest products and technologies for food and drink packaging at an exhibition to be held in HCM City later this month.

More than 250 firms, including those coming from Germany, Singapore, South Korea, Taiwan, and Thailand, will display bottling, bar coding, and filling machines, and testing and analysing equipment at the event.

The 8th International Processing, Filling and Packaging Exhibition (Propak Viet Nam 2013) will run alongside the third International Pharmaceutical and Cosmetics Processing, Filling, Packaging and Ingredients Exhibition (Pharmatech Viet Nam).

Another fair named the International Laboratory Equipment, Instrumentation, Test and Measurement and Quality Control Exhibition (Lab and Test Viet Nam) will also take place in the meantime.

They will feature conferences like "Food security-emerging issues for food industry management" organised by the Viet Nam Association of Food Science and Technology and "Safe food and clean drinking water: Application of common food safety management systems," organised by the Viet Nam Association of Testing Laboratories.

BT Tee, chief representative of Allworld Viet Nam, one of the event's organisers, said: "With high GDP growth rate and huge domestic and export potential, we see good business for packaging industry in Viet Nam, especially in HCM City where many factories are located."

Hitoshi Fujieda, general director of Ishida Viet Nam Co, said industrialists would also be able to discover how they can improve their product quality and productivity with new machine tools and technologies.

To be held at the Sai Gon Exhibition and Convention Centre in District 7 from March 20 to 22 — jointly by VCCI Exhibition Services Co — the events are expected to welcome 7,500 visitors.

Institute has first information security faculty

The Post and Telecom Institute of Technology (PTIT) on Wednesday became the first educational institution in Viet Nam to have an information security faculty.

This faculty will help Viet Nam to cope with the emerging threat of international hackers which undermines not only the economy but also national security .

The head of the University Education Department under the Ministry of Education, Bui Van Tuan, said the ministry has utilised the country's leading information security experts to compile the syllabus for the new faculty.

It has also co-operated with international institutions to gather experience and know-how on information security, such as the St Petersburg Univeristy of Telecommunications and the Moscow University of Information and Telecommunication Technologies.

"We will also establish a group to assess the quality of the graduates from the new faculty" Tuan said.

He said that this year 150 students will be enrolled in the new faculty, most of them high school and college graduates.

According to the ministry, Viet Nam will need about one million IT experts by 2020.

Ministry wants State bodies to use more emails

To get State bodies to rely more on email, the Ministry of Information and Communications (MIC) will conduct annual IT inspections nationwide starting this year.

In the southern province of An Giang, 90 per cent of paperwork is completed electronically. But other areas, like the northern mountainous province of Lai Chau, use only 5 per cent, said head of MIC's department of IT Application Nguyen Thanh Phuc.

While 80-90 per cent of State bodies are provided with PCs and email addresses, only 20 per cent of them used them in 2012.

MIC said many State employees were still unaware of how useful email could be, so they lacked the determination to change their ways.

MIC has submitted to the government its plan to apply IT and email in State bodies in the 2013-15 period. According to the plan, 55 per cent of daily transactions must be completed electronically by the second quarter of this year and the rate must increase to 80 per cent by 2015.

In troubled times, banks find reason for slight optimism

At least 90 per cent of local banks believe that inflation will stay in the single-digits this year, according to a survey conducted by the State Bank of Viet Nam (SBV).

Nearly 70 per cent of banks predicted that the mobilised and lending interest rates for the Vietnamese dong would go down by about 2 per cent, the SBV's Monetary Statistics and Forecasting Department said.

The survey also indicated that the price adjustment managed by the State would present the biggest risk to inflation control this year, followed by the change in monetary and financial policies.

Participants forecast that the average interbank exchange rate between the US dollar and Vietnamese dong would rise by 1-3 per cent.

Although the macro-economic situation remains weak, 90 per cent of banks are still confident in the country's business outlook.

Half predicted the economic situation would improve this year and most expect pre-tax profits to increase, although they do not see gains rising above 20 per cent.

Most banks predicted credit growth would also improve compared to 2012, with gains between 10-20 per cent.

Capital mobilisation was expected to grow in line with banks' credit growth. However, capital mobilisation of theVietnamese dong would be much higher than that of foreign currencies.

Banks are also expected to continue allotting capital to prioritised sectors such as agriculture and rural development, export and support industries in order to spur the country's economic growth.

While many banks still take a cautious view of both the country's economic condition and their business results in 2013, they have found reason to believe the situation will improve. Many expressed hope that the central bank would continue to cut interest rates, strictly handle any violations of the ceiling interest rate and create a healthy climate for currency trading performance.

Finance watchdog urges price control

While inflation control measures focus on price management, especially in the first months of the year, prices of essential commodities should be adjusted with caution, the National Financial Advisory Committee suggested.

The committee advocated forming a "price stabilisation package" that would include roadmaps for adjusting the prices of petrol, electricity and public services. Such a scheme would prevent price adjustments from occurring in the same month, which might push up the consumer price index (CPI).

According to the committee's calculations, if the local currency (VND) devalued 3 percent against the US dollar, CPI would increase by 0.3-0.4 percent. If electricity prices increased by 10 percent, CPI would climb 0.4 percent. And if the petrol price rose 5 percent, CPI would climb 0.1-0.15 percent. If all three prices were adjusted at the same time, however, CPI might rise by 0.8-1 percent.

The Government's target of keeping this year's CPI below the 2012 rate is feasible, according to the committee, if both the money supply and aggregate demand remain under control.

Additionally, the committee recommended that any policies intended to resolve bad debts and rescue the real estate market should take into account the amount of money pumped into circulation and the pressure of inflation in order to limit their impact on the inflation control target and create a stable macro-economic environment in the medium and long term.

Regarding exchange rate-related policies, the committee said that adjusting the exchange rate was not urgent, as exports have seen positive growth. Therefore, the committee recommended that exchange rate policies prioritise curbing inflation and stabilising the macro-economy.

Cambodia, Vietnam target US$5bn trade

Vietnamese businesses are enjoying more investment opportunities in Cambodia thanks to preferential trade conditions offered by both countries.

Vietnam is expected to increase its Cambodian market investments to US$3.2 billion. The value of two-day trade is predicted to hit US$5 billion in 2015.

Cambodian Planning Minister Chhay Than says Cambodia is improving conditions for foreign investors, including those from Vietnam.

A Vietnam-Laos-Cambodia ministerial meeting has been scheduled for the end of March 2013 to draw up plans aimed at developing the triangle area into a famous industrial and rubber production zone, he says.

According to Vietnam Customs’ 2007 statistics, Vietnam-Cambodia trade turnover stood at US$1.19 billion with Vietnamese exports valued at US$991 million. One year later, Vietnam increased its Cambodian export revenue by 31 percent to US$1.431 billion, representing a trade surplus of US$1.221 billion.

In 2009, despite the repercussions of the global economic downturn, the two countries’ trade value stabilised at US$1.333 billion, with Vietnam’s trade surplus dropping slightly to US$961 million. In 2010, trade turnover resumed its upward trend, reaching US$1.83 billion with Vietnamese exports contributing US$1.552 billion. 2011’s figure hit US$2.829 billion—up 54.75 percent—and Vietnam’s export revenue climbed to US$2.4 billion.

Last year’s two-way trade value was estimated at US$3.3 billion. Vietnamese exports contributed US$2.9 billion.

Vietnam is currently Cambodia’s second largest trade partner. The country’s key Cambodian exports include plastic home appliances, instant noodle, and spare electric parts. It imports mainly rubber, wood, tobacco, and raw materials for the garments and textiles sector.

The Vietnam Ministry of Planning and Investment (MPI) statistics show that by the end of 2012, Vietnam had 104 projects in Cambodia representing a total registered capital of US$2.42 billion— four times higher than the previous three years’ level.  

Vietnamese businesses disbursed nearly US$300 million in Cambodia in various socio-economically important fields like telecommunications, agriculture, and financial services.

Minister Chhay Than is optimistic about bilateral trade’s prospects. He says, however, that recent two-way trade turnover has yet to realise the relationship’s full potential.

He suggests both countries should reinvigorate trade relations to fulfill the set two-way trade turnover target of US$5 billion in 2015.

Le Minh Dien, the MPI’s External Economic Department Deputy Head, says Vietnamese businesses should exploit their advantages and the incentivised investment policies in Cambodia’s telecommunications and industrial tree planting.

Exploring opportunities in emerging industries like construction and real estate would also be wise, he adds.

State may boost PPP stake

Eager to accelerate the construction of vital new infrastructure facilities, the Vietnamese government is considering increasing the state contribution to public-private partnership (PPP) projects or altering the limitations for private sector participants in such deals.

The Ministry of Planning and Investment (MPI) recently introduced draft amendments to the governmental Decision 71/2010/QD-TTg which regulates the implementation of PPP projects in Vietnam. According to this draft, state contribution limitation could increase up to a 49 per cent of the total investment capital of a PPP project from the current 30 per cent.

PPP implies the collaboration between the government and the private sector in carrying out a project with social benefits, under an agreement in order to share the responsibility and risk.
In another case, the MPI also proposed to remove the limitation of the state contribution to PPP projects, enabling the state contribution to be considered on a case-by-case basis.

“We are weighing to raise the limitation or remove it. Whatever we do, it just aims to make PPP projects more feasible to private investors,” said Le Van Tang, director of tehe MPI’s Public Procurement Agency.

The MPI estimated that from now to 2020, Vietnam would need around $170 billion to develop the nation’s infrastructure network, including transport systems, bridges, power plants, water supply, waste treatment plants and seaports. Meanwhile, traditional capital sources such as the state budget, government bonds and official development assistance from international donors only help satisfy less than half of the demand. This means that more than 50 per cent of the needed investment must be mobilised from private domestic and foreign investors. And the Vietnamese government expected to attract more private investments via PPP.

Although the Decision 71 was issued in 2010, unclear regulations on the state contribution to PPP projects still raised questions on how the state would share risks with private investors.

For example, private investors complained that they did not know whether the cost of land rental, land clearance and compensation to be counted with the 30 per cent or state-owned enterprises’ capital contributed to the PPP project would be considered as a part of the state contribution. In addition, investors were also concerned if tax incentives to be counted as the state contribution. This leads to an unclear issue is what risks the state will bear and what risks will be allocated to private investors.

“It would be better not to have a limit because if there is any limit at all then it will be necessary to have specific and detailed regulations on what falls within or outside the limit and then numerous valuation issues arise,” said Tony Foster, managing partner at law firm Freshfields Bruckhaus Deringer’s Hanoi and Ho Chi Minh City offices.

According to the draft amendments, the state contribution to PPP project include the state fund and other financing supports such as the value of land usage right and the value of available trademark. Meanwhile the state fund will comprise fund from state-owned enterprises and fund guaranteed by the government.

In order to push the development of PPP projects in Vietnam, the Asian Development Bank (ADB) announced that it would provide a $20 million loan from its Asian Development Fund to fund Vietnam’s Public Private Partnership Support Project that is expected to increase private sector investments in infrastructure sector.

“The project will use the fund for establishment of a project development facility that would help bring bankable PPP projects to the market,” the bank stated in an announcement.

According to the ADB, Vietnam’s ministries and government agencies would use the project development facility to fund PPP project preparation activities including pre-feasibility studies, full feasibility studies and the engagement of transaction advisors who would structure deals to bring to the private sector for bidding.

Samsung taxed by review plan

An offer of preferential corporate income tax for Samsung at its planned $2 billion facility in northern Thai Nguyen province may require a review by the National Assembly.

The Ministry of Finance (MoF) has declared that the offer of Thai Nguyen Provincial People’s Committee to extend preferential tax treatment for Samsung Electronics Vietnam’s second plant exceeded the current legal regulations and thus would require the National Assembly approval.

Samsung Electronics Vietnam planned to build a factory to produce and assemble mobile phones and hi-tech products in Thai Nguyen’s Yen Binh Industrial Zone with the total investment of $2 billion.

Earlier, Thai Nguyen Provincial People’s Committee proposed a preferential mechanism for this project including a 10 per cent corporate income tax (CIT) within 30 years, free CIT within four years since it gains profits and a 50 per cent CIT reduction during the following 12 years.

The MoF suggested that those incentives for Samsung’s second facility in Vietnam should be implemented in accordance with the existing regulations stipulated in articles 13 and 14 of the Law on Corporate Income Tax.

The land lease contract for an area of 100 hectares, which was signed on February 6 by Samsung and its Vietnamese partners for the implementation of the project, will last 49 years.

When Samsung’s second facility goes into operation, Vietnam would become the firm’s largest export manufacturing hub for handsets over the world.

Samsung’s existing facility in northern Bac Ninh province’s Yen Phong Industrial Zone went into operation in 2009. The plant last year churned out 100 million mobile phones and it now employs 24,000 local workers.

This plant had the initial investment capital of $670 million and it was licenced to raise the investment capital to $1.5 billion in November 2012.

Vietnamese consumer firms see growth in ASEAN market

Forecasts say that when the free trade agreement between ASEAN and China (ASEAN + 1) becomes effective in 2015, Vietnamese products will face trade protection from countries in the group with ASEAN consumers leaning more towards Vietnamese products.

Vietnamese firms have been trying hard to introduce their products in the ASEAN market and are expecting further support policies to develop growth sustainably in the future.

Tran Ngoc Thanh, an overseas Vietnamese businessman in the Philippines, said that the Filipino market has recently started to take interest in Vietnamese products. During his trip back to Vietnam a fortnight ago, Thanh sought partners for plastic household products, to fulfill orders in the Philippines.

Nguyen Vu Tu, Vietnam’s Ambassador to the Philippines, also said that many Filipino firms have proposed to cooperate to open a chain of Vietnamese food stores in the country.

In the Philippines, food items, coffee, and household goods of Vietnamese origin are preferred and in high demand. However, most Vietnamese products sold in the Philippines are imported from Singapore. Therefore, Mr. Tu advised that Vietnamese companies should approach this market directly.

In a meeting with Vietnamese firms, many Singapore businessmen said that despite severe competition in the Singaporean food industry, ‘Pho’ restaurants or dragon fruit from Vietnam has successfully built a brand image. At the Asia Pacific Food Expo in Singapore last year, people had queued up for Vietnamese coffee. In addition, many companies also revealed that thousands of food producers in Singapore were in need for material source and were seeking business partners to import material from Vietnam.

Data given by the General Statistics Office showed that currently ASEAN market was the third largest importer from Vietnam after the EU and US markets. In 2012, exports from Vietnam to this market touched US$17.08 billion, up 25.7 percent over the previous year, accounting for 14.9 percent of total export turnover of Vietnam.

In fact, there was a huge demand from countries in the ASEAN group for Vietnamese products. For instance, in order to ensure food supply, Cambodia International Development and Investment Joint Stock Company had coordinated with Vietnam Southern Food Corporation (Vinafood 2) to establish Cambodia-Vietnam Food Company which specializes in production, procurement, transportation, processing, preservation, storage, trading, import and export and other services related to food in Cambodia and other countries.

In Myanmar, after approaching this market for a short time, steel products by Huu Lien Asia Corporation have dominated its steel pipe market, ousting made-in-China steel production.

Despite several optimistic signs, experts warned that in 2015 when the so-called ASEAN + 1 free trade agreement officially takes effect, import tariff on many products will be cut to zero percent. Hence, in order to protect the local manufacturing industry, countries in the group have been building technical barriers and trade protection against imported products which raised concerns that it is easy to import products from the ASEAN into Vietnam but it is difficult vice versa.

Despite these challenges, many firms have penetrated the ASEAN market to study demand, technical requirements and set base for a distribution network and get consumers to using Vietnamese products so as to ease marketing pressure later.

Tang Quang Trong, sales manager of Dai Dong Tien Plastic Company for Indochina, said that to increase its distribution network, the company had built a warehouse in Cambodia and signed contracts with Burmese partners to become a supplier in Myanmar’s market. Currently, the company has increased its export ratio to more than 10 percent of its total production.

In 2003, Vietnam Fan Joint Stock Company exported a consignment of electric fans under Asia brand name to Malaysia. At that time, this product line had already met the country’s technical requirements and was sold at a reasonable price. However, after that order, the company has not had any contract. After a survey, the company found out that this was because it had not approached through the distribution network in that country. After making up this shortcoming, the company has received big export contracts to Myanmar, Thailand, and Malaysia.

When the ASEAN + 1 agreement comes into effect, there will be fierce competition among ASEAN countries to win market share in the common market. In this context, countries in the ASEAN have opened many training courses to prepare the business community to join the common market, while the Vietnamese Government has not had any similar activity to help local firms.

Some Vietnamese firms have been successful in building a good reputation in the regional market, but this success is insular. If there were a general support policy, this would help larger firms to increase competitiveness and make it easier for young companies to enter the common market.

Bright forecast for textile industry

The domestic textile industry will be greeted with opportunities and orders in the near future.

According to the Ministry of Industry and Trade, the export quota in the first quarter of 2013 reached USD1.05 billion, a 28.4% increase compared to the same period last year. Most textile firms already have a lot of orders.

The Vietnam National Textile and Garment Group (Vinatex) said Vietnam is on a priority list with many foreign importers. Even though the import industry of many countries decreased because of recession in 2012, Vietnam's exports still increased by 9.2% to US, 9% to South Korea and 19.3% to Japan.

Pham Xuan Hong, deputy chairman of Vietnam Textile and Apparel Association (Vitas) said many companies decided to transfer their orders from China to Vietnam due to rising prices for Chinese textile exports.

Some new costumers have surveyed Vietnam's export industry in anticipation of approval for the Trans-Pacific Partnership (TPP) Agreement in 2015. If the agreement goes into effect, textile products that export to member countries of TPP would be exempt from taxes.

Since late 2012, businesses from China, Japan have come to explore opportunities in Vietnam.

According to Hong, many Vietnamese firms are busy as they have received many orders.

Facing the new opportunities, domestic enterprises said they would fix any mistakes and shortcomings and enhance production capacity in 2013.

Trade agreements such as the TPP, ASEAN Free Trade Area (AFTA), and agreements with the EU and China all point to greater exports at lower tax rates.

Vitas consultant Le Quoc An said the biggest challenge for the Vietnamese textile industry was a shortage of raw materials. If a firm wants to enjoy tax incentives, they must prove that their materials come from their own countries or member countries and this would cause difficulties for many companies.

Denmark targets double export volume to Vietnam

Vietnam and Denmark have agreed to promote cooperation in economics and trade, potentially boosting the latter’s exports to Vietnam to more than US$1 billion.

The Danish Government aims to double their exports of essential goods to Vietnam over the 2011-2016 period.

To achieve the goal, Denmark will strengthen cooperation and trade with Vietnam in the fields of its strengths such as energy, environment, healthcare, education, transportation and food.

Danish Minister for Trade and Investment Pia Olsen Dyhr made the remark at talks with Minister of Industry and Trade Vu Huy Hoang in Hanoi on March 7.

According to statistics from the General Department of Vietnam Customs, two-way trade turnover between Vietnam and Denmark reached US$468 million last year, up 11 percent on the previous year.

Of this figure, Vietnam’s exports to Denmark hit more than US$276 million, up 2 percent on 2011, while imports reached roughly US$192 million, up 28 percent

Recently, both nations have promoted the exchanged of high-level delegations with the aim of doubling trade turnover by 2016. According to the MoIT, Vietnamese exports to Denmark are expected to reach US$305 million in 2013.

Minister Vu Huy Hoang said that Denmark is one of the major Official Development Assistance (ODA) providers to Vietnam and has always lent support in economic and trade relations with the EU.
It has provided US$40 million for the climate change impact, adaptation and mitigation (CCIAM) programme in Vietnam.

Danish Minister Pia Olsen Dyhr said that Vietnam-Denmark relations have developed well over the years, opening up opportunities for boosting bilateral trade relations.

Denmark has always supported Vietnam in accelerating the signing of the Vietnam-EU FTA, by reducing tariffs and removing trade barriers.

Vietnam’s region-leading pharmaceutical growth

The total sales revenue of Vietnam’s pharmaceutical consumption is expected to reach US$5.2 billion in 2015, US$3 billion higher than in 2012.

Actavis Asia Pacific and Indonesia Vice President Thomas Runkel released the prediction at a press conference in Ho Chi Minh City on March 11.

Thomas indentified Vietnam’s pharmaceutical market as the Asia-Pacific’s region’s fastest growing, adding his company is currently seeking business partners to expand its Vietnamese customer base.

Actavis Vietnam Chief Representative Le Ngoc The Phiet said the company is among the ten largest pharmaceutical exporters supplying generic medicine to Vietnam. Its revenue totaled US$7.2 million in 2012.

Actavis is the world's third-largest generic prescription drug manufacturer.

73 FDI enterprises win Golden Dragon Awards

A March 16 ceremony in Hanoi will confer the prestigious 12th Golden Dragon Awards on 73 foreign-invested enterprises and the 9th Vietnamese Trademark Awards on 100 local businesses.

Vietnam Economic Times Editor-in-Chief, Golden Dragon Organising Board Chief, and Professor Dao Nguyen Cat used a March 11 press conference to report FDI businesses have shared any difficulties and are committed to their Vietnamese operations over the long-term.

The ceremony will honour leading businesses that have excelled in production and business activities. The awardees were selected according to strict criteria including the quality of products and services, environmental consciousness,  and corporate social responsibility activities. Most of the businesses recognised this year are operating in the banking, finance, insurance, automobile, motorcycle, and real estate fields.

A CEO forum will also be held in Hanoi on March 15 in the lead-up to the ceremony. The forum is focused on economic crisis prevention and control. Policy makers and economic experts will discuss possible measures to help businesses overcome difficulties relating to capital resources, tax policies, and market conditions.

Int’l fair showcases timber products in HCM City

Nearly 126 local and foreign businesses attended the sixth International Wood and Fine Arts Exports Fair, opened in HCM City on March 11.

650 stalls at the fair feature interior decoration timber products and raw materials to industry machinery and equipment.

Seminars during the fair discussed the growing importance of German consumers, international timber product trends, the current status of Vietnam’s wood industry, and the government’s 10 year development strategy.

Vietnam is currently South East Asia’s largest timber exporter and ranks sixth in the world. Wood product export turnover reached US$4.67 billion last year. The Vietnamese industry’s major export markets remain the US, China, and Japan.

Ho Chi Minh City Association for Fine Arts and Wood Processing Vice President Huynh Van Hanh said the 2013 fair has attracted even more joint venture companies and foreign customers than usual.

According to the organising board, approximately 900 customers from 70 nations and territories have registered to participate.

Vietnam attends Int’l Boston Sea Food Show

Nearly 30 Vietnamese businesses have taken part in the International Boston Seafood Show (IBSS) which opened on March 11.

This is the largest event of its kind in the North American region, involving 1,000 enterprises from 40 countries and territories over the world.

Among Vietnam’s traditonal seafood products are Tra and Basa fish, mostly in raw form.

The Vietnam Association of Seafood Exporters and Producers (VASEP) has held an international seminar on this occasion to improve competitiveness of the domestic seafood industry.

VASEP General Secretary Truong Dinh Hoe said that this is a good opportunity for domestic businesses to explore the possibility of seafood exports to American and other foreign markets.

Vietnam's biggest importer is the US with its orders in 2012 worth US$1.2 billion, accounting for 40 percent of the country’s seafood export earnings.

Enterprises agree to first BPO partnership

Vietnam FPT Software and Agrex of Japan signed a memorandum of understanding on March 12 to establish the first joint venture of BPO (Business Process Outsourcing) in Southeast Asia.

The venture, to be known as F-Agrex, is jointly invested by FPT Software, a subsidiary of the software giant FPT Corporation (FPT) and Agrex of Japan’s IT Holdings.

The joint venture is designed to implement global BPO. Under the MoU, F-Agrex will take full use of Agrex in its last 50 years of implementing BPO and experiences from FPT Software in managing large-scale software projects in the past 15 years to deploy high-quality and competitively priced BPO projects in the Japanese market.

F-Agrex will now consider expanding its BPO services to other potential markets, including Vietnam and other ASEAN countries.

Truong Gia Binh, CEO of FPT, said the venture is scheduled to operate from this July.

FPT will also work with FPT Polytechnics to open a Japanese language course and BPO training department.

Okamoto Susumu, President of IT Holdings Corporation, said the number of staff in the first year of operation would be 100 and would reach 500 the next year.

Asian economies seminar held in Hanoi

A seminar on Japanese and other Asian economies was held in Hanoi on March 12 to help Vietnamese researchers and businesspeople explore experiences in economic development.

Knowledge gained from Asian countries will contribute to forming Vietnam’s polices and strategies on economic development, said Dr. Vo Dai Luoc, General Director of the Vietnam Asia-Pacific Economic Centre (VAPEC), which organised the event.

Professors Harada Yutaka and Tran Van Tho from Japan’s Waseda University presented their scientific reports on Japan’s future economy and the country’s impact on other Asian nations in the field of economics, science and technology.

Vietnam should grasp new opportunities from Japan and improve the competitiveness of its industries before free trade agreements are fully implemented, said Tho.

The country should take into account FDI policies as well as improving infrastructure and administrative reform procedures in other Asian countries, added the professor.

Japan, Vietnam boost coal-mining cooperation

The Vietnam–Japan coal policy dialogue discussing policies to develop each country’s coal industry, power generation from coal and natural gas, and waste disposal projects opened in Hanoi on March 12.

The Vietnam National Coal–Mineral Industries Group (Vinacomin) said it encourages foreign partners, especially those from Japan, to apply advanced and environmentally friendly technologies in Vietnam’s coal mining industry.

The Japanese Ministry of Economics, Trade and Industry (METI) pledged to back the group in removing water from brown coal to produce high-quality coal for thermoelectric plants.

Vietnam will reduce its coal exports to 4-5 million tonnes a year since 2015 to meet domestic demands. Last year, the figure was 14.5 million tonnes.

German businesses seek investment in Bac Ninh

A delegation of German business representatives and experts sounded out investment opportunities in Bac Ninh province on March 12.

At a meeting with local leaders, Nguyen Nhan Chien Chairman of the provincial People’s Committee briefed his guests on the province’s socio-economic situation and the geological advantages that have fuelled its rapid development over the years.

He said Bac Ninh, about 30km from Hanoi capital city, boasted a 2012 economic growth rate of 12 percent along with sharp improvements in the industry, construction, trade, and service sectors.

Its provincial industrial production value is among the top three in the country and its export earnings account for 12 percent of Vietnam’s total export revenue.

The locality currently has 15 industrial zones, 8 of which have already entered operation, as well as 28 craft villages.

Chien said he hopes the visit will help promote comprehensive cooperation between a variety of regional German businesses and Bac Ninh.

The Germany businesses said they are very interested in the province’s investment opportunities, particularly in health care and  human resources training.

The visiting delegation also toured craft villages in Gia Binh district and offered incense to the Ly kings at Tu Son district’s Den Do (Do Temple).

HCM City boosts trade promotion activities

The Ho Chi Minh City Investment and Promotion Centre (ITPC) on March 12 introduced a wide range of programmes supporting local businesses’ global economic integration.

The announced initiatives focus on effectively penetrating the three major Cambodia, Laos, and Myanmar markets and boosting promotions in the US, EU, and Middle East.

ITPC will continue implementing the Vietnamese People Use Vietnamese Goods campaign through its Vietnamese Goods Fairs organised in suburban residential areas, processing and economic zones, and neighbouring cities and provinces.

It will futher improve the city’s business environment to attract more investment for specific projects and strengthen links with domestic, regional, and foreign organisations and businesses that are interested in investing abroad.

Conferences, workshops, and dialogues will be held regularly to provide concerned parties with the latest information and support businesses in dealing with cost shifting, searching for partners, and seeking investment opportunities.

In 2012, ITPC organised 18 trade promotion events in seven countries, including Myanmar, Laos, China, and the Philippines. Its 60 domestic events took place in Ho Chi Minh City, Hanoi, and a number of Mekong Delta provinces.

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