Vietcombank sells 2.1 billion dollars to SBV

Vietcombank had sold a huge volume of US dollars to the State Bank of Vietnam (SBV) over the past 18 months, a bank official told VnEconomy online.

Pham Thanh Ha, deputy general director of Vietcombank, said they had sold 2.1 billion USD so far this year and 3.14 billion USD last year to the SBV.

Ha said that since early this year, the local foreign currency market and exchange rates had remained stable thanks to measures applied by the central bank.

The SBV had resumed buying back a huge volume of US dollars from commercial banks after increasing the buying price from 20,826 VND to 21,100 VND per dollar following fluctuations on the local foreign currency market, he said.

The stable exchange rate between the Vietnamese dong and the US dollar was thanks to monetary policies issued by the State Bank of Vietnam to boost the domestic economy.

This stability had also contributed to maintaining macro-economic growth and increased confidence in the dong.

The solid business environment had also encouraged enterprises to make expansion plans and attract more foreign capital to the nation, he said.

The stable exchange rate and the efficient management of foreign currencies and gold this year had reduced dollarisation in Vietnam, he said.

As the year draws to a close, demand for foreign currencies would increase, and exchange rates between the dong and foreign currencies would also surge slightly, he said.

However, pressure on exchange rates would be not great because the trade deficit was low while foreign currency sources were stable, including foreign direct investment and remittances.-

Medi Pharm Expo 2013 to open in Hanoi

More than 150 local and foreign enterprises have so far registered to attend the Vietnam International Hospital, Medical and Pharmaceutical Exhibition (Vietnam Medi Pharm Expo 2013) in Hanoi, said the organising board.

The 20th annual exhibition will be held at International Centre for Exhibition (ICE), 91 Tran Hung Dao Street, from December 4-6.

This exhibition is expected to welcome exhibitors from countries and territories including India, Russia, Germany, New Zealand, United States, Republic of Korea, China, Singapore and Thailand, said the organising board.

Notably, medical machinery and especially modern equipment used in minor surgery will be displayed at the booths of Russia and the Republic of Korea.

The expo is co-organised by the Ministry of Industry and Trade, the Health Ministry and the Vietnam National Trade Fair and Advertising Company (Vinexad).

Vietnam, Australia boost energy cooperation

A conference aimed at promoting cooperation between Vietnam and Australia in energy and resources was held in Hanoi on November 14.

Jointly organised by the Ministry of Industry and Trade and the Australian Embassy in Vietnam, the event was to mark the 40th anniversary of diplomatic ties between the two countries.

Vietnam has cooperated with Australia in oil exploration and exploitation, coal import-export, production and import of liquefied natural gas (LNG), and energy saving.

Vietnam’s electricity sector says the total capacity of the country’s power plants is estimated at 75,000 MW by 2020. Of which, coal and gas-fueled thermoelectricity will account for 48% and 16.5%, respectively.

Therefore, the country will have to import coal and gas to serve its electricity generation.

According to preliminary calculations, Vietnam will need about 1.3 billion tonnes of coal for electricity production in the next two decades. It will also have to import about 5-6 million tonnes of LNG per year by 2015 and 10-15 million tonnes by 2030.

With Australia’s abundant natural resources and Vietnam’s increasing energy needs, the two sides agreed to further promote cooperation in energy development, and coal and LNG imports in the coming time.

US firm announces alliance with local Smartlink network

Discover Financial Services (DFS) of the US and Smartlink Card., JSC, a leading domestic payments network in Vietnam, has announced a strategic alliance to expand the card payment network in the country.

Under an agreement reached by the two sides on November 14, Discover and Diners Club International (DCI) cardholders are given the ability to use their cards at more than 16,000 ATMs in Vietnam via a network of local commercial banks.

The long-term agreement will further increase transactions through the international domestic payment network while giving Discover and DCI cardholders more consumer cash access points in Vietnam.

“Discover’s relationship with Smartlink captures the true essence of our global expansion strategy, which is to leverage our unique set of assets and support the growth of local leading international networks,” said Diane Offereins, President of Payment Services at Discover.

“With Vietnam poised as an emerging market with large economic growth, we feel confident that we’ve found a strong partner and will continue to explore additional opportunities with Smartlink in the future,” he said.

Dao Minh Tuan, Chairman of the Board of Smartlink Card., JSC, said the strategic alliance with Discover reinforces Smartlink's continuous efforts to diversify its card-payment services for banks and promote Vietnam's card-payment market development. Based on this strategic alliance, Smartlink will provide banks an effective international connection and the opportunity to use Discover’s payment products, he added.

Currently Smartlink is inter-connected with 51 banks and financial institutions, of which 40 banks are Smartlink members. It is a leading Network with more than 16,000 ATMs and 100,000 point-of-sale terminals, which supports payment activities for 55 million local debit cards in market.

DFS is a direct banking and payment services company with one of the most recognized brands in US financial services. Since its inception in 1986, the company has become one of the largest card issuers in the US, with millions of merchant and cash access locations, and a global payments network with acceptance in more than 185 countries and territories.

AdAsia Congress 2013 concludes

The 28th Asian Advertising Congress (AdAsia 2013) wrapped up with a ceremony themed “Sound of five continents tones” in Hanoi on November 14, after four days full of activities.

Addressing the ceremony, Dinh Quang Ngu, President of the Vietnam Advertisement Association, emphasised that the congress has helped improve public awareness of the power of communications and advertisement in popularising knowledge as well as a nation’s images and its tangible and intangible products.

The event also looks to raise business ethics in designing and creating promotional products deeply imbued with Vietnamese culture and national identities .

Congratulating the congress’s success, Chairman the Asian Federation of Advertising Associations Pradeep Guha declared the event reached more achievements than the sharing of experience and improvement of ethics in advertising.

The chairman also voiced his hope that the 29 th and 30 th congress to be hosted by Taiwan (China) and Indonesia, respectively, will continue the achievements.

AdAsia is the largest biennial event of the Asian advertising sector, attracting the participation of celebrities, representatives from leading telecommunications and advertising corporations, regional and international experts in economics, cultural and social affairs.

This year’s event allowed participants to dialogue with nearly 20 internationally renowned lecturers in the sphere of advertising.

Vietnam hosted the 55-year-old congress for the first time.-

Hanoi eases loan costs for businesses

Hanoi's enterprises would enjoy a preferential interest rate of 0.2 percent for short-term bank loans taken out this year as part of a local programme to support struggling businesses.

Municipal People's Committee Vice Chairman Nguyen Van Suu said at a meeting with enterprises on November 14 that this replaced the October scheme which offered a similar incentive for the fourth quarter only.

A committee report said there were nearly 15,000 newly-registered companies in the first 10 months of this year with total investment of 100 trillion VND (4.76 billion USD) in the capital city, up 12 percent in number and 33 percent in value.

But at the same time, over 10,000 companies had shut down, while firms that were still in operation were struggling to sell their goods or gain access to long-term capital for investment and production.

Businesses said the adjustment would help at this tough time, but many suggested the programme should be stretched out to next year.

Dong Luc Group Chairman Le Van Thanh said that long-term loans were needed to expand production.

"It takes three to five years for businesses to prop up production and expand investments, so city authorities need to be an intermediary guaranteeing confidence between banks and enterprises so that stable loans are available," he said.

"Only when this happens can firms feel secure about their activities," he added.

Other firms suggested the city should continue simplifying administrative procedures for investments and ease access to land for production.

According to the Hanoi Department of Taxation, business difficulties had caused local tax revenues to slump significantly in the first nine months to just 93.4 per cent over the same period last year, and investments and exports remained stagnant in the face of the slow global economic recovery.

The department said 77 companies owed the State budget up to 1.8 trillion VND (85.7 million USD) in taxes. These included Song Da Thang Long, Bridge JSC N°12 – Cienco 1 and Viglacera Hanoi.

Intensifying assistance for enterprises while trying to boost tax revenues would be a challenge for the city in 2013, it said.-

1.3 billion USD earmarked for resettlement in power plant

Over 26.4 trillion VND (1.3 billion USD) have been approved for a resident displacement and resettlement project sparked by the construction of the Son La hydropower plant, the biggest of its kind in Vietnam.

The money includes more than 17.4 trillion VND (829.4 million USD) sourced from the State budget and 9 trillion VND (428.6 million USD) from Vietnam Electricity.

It is allocated to three neighbouring northwestern provinces, namely Son La, Dien Bien and Lai Chau, to move and resettle 20,340 households (92,301 people).

Located in Son La’s Muong La district, the Son La power plant was inaugurated on December 23, 2012, three years ahead of schedule. It has an installed capacity of 2,400MW with six 400MW turbines.-

Furniture fair spurs locally made products

The Vietnam Furniture and Home Furnishing Fair (VIFA Home 2013) opened at the Tan Binh Exhibition and Convention Centre in Ho Chi Minh City on November 14.

This year’s event, themed “Shopping solutions for Vietnamese houses”, drew the participation of 94 enterprises from across the country, including some renowned names such as Rossano, Debao and Binh Minh.

On display in 436 stalls are indoor and outdoor furniture, outdoor garden decorations, gifts, souvenirs, support services, handicrafts and lacquer products.

According to Deputy Director of the municipal Department of Industry and Trade Le Van Khoa, VIFA Home offers a great chance for local enterprises and merchants in the woodwork field to meet and seek partners, while promoting their brands and products to more customers.

The fair will run until November 17.-

As many as 519 memoranda of understanding and cooperation contracts totalling over VND150 billion (roughly US$7 million) were signed during the 2013 International Agriculture Fair.

The fair, which wrapped up in the Mekong Delta city of Can Tho on November 14, successfully acted as a bridge linking the Government, scientists, farmers and businesses, thus enhancing farmers’ insights into the integration period.

During the event, enterprises also clarified their business strategies, expanded trade promotion and trademark communications, and introduced their products.

Among the 5,000 products displayed at the fair, there were 1,000 new categories of machinery, agricultural equipment, fertilisers, pesticides and new and productive rice seeds as well as new agro-forestry products.

The fair attracted nearly 110,000 visitors during the one week it was open.

Ten Vietnamese textile businesses in Hanoi are popularising their products at the Australia International Sourcing Fair that is taking place in Melbourne on November 13-15.

The annual event attracts hundreds of companies from Vietnam, India, China, Pakistan, Thailand, Indonesia and Bangladesh, and creates a golden opportunity for Australian importers to seek partners and boost investment in foreign markets.

Many Australian enterprises expressed their hope to partner and sign import-export contracts with Vietnamese businesspeople.

Brian Irving, an expert in trade development management, hailed Vietnam as a large textile exporter with a low but competitive production cost.

He added that the local sector as a key industry can draw in more foreign investors and potential partners.

Trade Counsellor to Australia Nguyen Bao and Deputy Director of the Hanoi Industry and Trade Department Pham Duc Tien introduced to international friends to business and investment cooperation opportunities as well as Vietnam’s major products such as textiles, footwear, wooden furniture and seafood.

On the occasion, the Vietnam Trade Office in Australia on November 13 coordinated with the Vietnamese Businesses Association in Australia to host a conference on trade promotion between the two countries.

Australia is Vietnam’s 9th biggest trading partner with two-way trade estimated at nearly five billion USD last year.

It is also considered one of the new markets in the Asia-Pacific region that opens up numerous opportunities for Vietnam.-

Authorities of the northern mountainous province of Lao Cai have promised all possible support to investors, saying that they are willing to share responsibilities and interests with them.

Holding a working session with Ministry of Industry and Trade officials, Chinese Economic and Commercial Counsellor and representatives from Vietnamese and Chinese firms in Lao Cai on November 14, Secretary of the Lao Cai Party Committee and Chairman of the provincial People’s Committee Nguyen Van Vinh made clear the province’s consistent policy of investment attraction.

Under the policy, economic and trade ties between Lao Cai and the Chinese province of Yunnan will be given special attention while efforts to build the Kunming – Lao Cai – Hanoi – Hai Phong – Quang Ninh economic corridor on which Lao Cai lies will be ramped up.

Lao Cai, thanks to geographical advantages, always sustains high economic growth and expands external relations, Vinh noted, adding that it has resulted in growing foreign investment over the past time.

According to him, the number of domestic and foreign projects in the locality has hit 430 with a capital of VND60 trillion (US$2.8 billion), up 9.3 times from 2005. Among them are China’s Seo Chung Ho hydro-power plant, Quy Sa iron ore mine and Lao Cai cast iron and steel plant worth up to US$400 million in total.

From January-October, Lao Cai’s export-import turnover surpassed US$1.5 trillion, of which exports grossed US$927.5 million. Its trade is expected to net US$1.85 billion this year, up 20 percent from 2012.

The working session was part of the ongoing Vietnam-China international trade fair that kicked off the same day, during which dozens of economic deals worth nearly US$250 million were struck.

Belgian company opens Ben Tre cocoa processing plant

The Puratos Grand Place Vietnam Company, part of the Belgian Puratos Group, inaugurated its Ben Tre-based cocoa processing plant and cocoa cultivation development centre on November 14.

Covering five hectares in Giao Long Industrial Park, the US$8 million plant has an annual cocoa bean processing capacity of 5,000 tonnes.

The facility is expected to process about 1,000 tonnes of cocoa bean for its Binh Duong province chocolate production plant during the first year of its operation.

The new cocoa development centre will assist local farmers and promote sustainable cocoa cultivation in the Mekong Delta region.

The company’s operations are guided by a holistic “from cocoa beans to finished chocolate” philosophy. Puratos Grand Place Vietnam Managing Director Gricha Safarian said the plant’s inauguration is one of the final steps in bringing this philosophy to fruition.

Ben Tre’s approximately 10,000 ha of land devoted to cocoa cultivation is the most in Vietnam, accounting for 50 percent of the national total and producing one-third of Vietnam’s cocoa output.

2013 Vietnam-Cambodia trade fair begins

The 2013 Vietnam-Cambodia Trade Fair 2013 opened in the Cambodian capital Phnom Penh on November 14.

The fair is part of the Vietnamese Government’s 2013 national trade promotion programme supporting local businesses’ export expansion into ASEAN markets.

Organised under the theme “Friendship, Cooperation, and Development”, the fair offered businesses of both nations an opportunity to strengthen trade and investment links and promote cooperation.

More than 150 businesses displayed products of the highest quality at 300 pavilions, spanning garments and textiles, agro-forestry-seafood produce, handicrafts, processed food, electronics, chemicals, construction materials, fertilisers, and industrial agricultural technology.

The festival’s organising board also helped Vietnamese businesses assist welfare policy beneficiaries and present gifts to Cambodia’s war veterans.

The organising board laid a wreath and offered incense at the Monument to Voluntary Vietnamese Soldiers in Phnom Penh.

The fair, in its sixth iteration, will run through to November 18.

Creative renovation vital for local enterprises

The enhancement of competitiveness through creative innovation is vital for Vietnamese businesses, according to Deputy Minister of Science and Technology Tran Viet Thanh.

The official made the statement during a November 13 international seminar in Ho Chi Minh City, jointly organised by the Southern Cooperation Department and the Korean Standard Association (KSA).

Thanh said that the Vietnamese economy is still facing difficulties, with 55,000 enterprises entering bankruptcy and 25 percent of companies posting on the stock market failing to make a profit.

Over the past years, Vietnam has issued and implemented a number of laws on science and technology, creating an important legal corridor for businesses to apply technology in their management and production, he noted.

This is a good opportunity for Vietnamese experts and managers to learn experience from the Republic of Korea – a country that succeeded in the field – thus developing their ideas to improve competitiveness for businesses.

According to Pham Ngoc Hung, Vice President of the Ho Chi Minh City Business Association, Vietnam has deeply integrated into the international economy, while products from ASEAN member countries are soon to enter Vietnam with zero percent tax rate.

Therefore, he said, it is crucial for Vietnamese businesses to enhance their competitiveness through improving product quality and the productivity of their factories.

However, as the majority of enterprises are using old fashioned equipment and have poor access to market information and consultation services, their application of standards remains dependent on foreign partners, he said.

Additionally, he argued that quality management has yet been implemented stably, with an uncompleted standard system for each sector.

Hung also proposed that enterprises should focus on strengthening the application of a new standard management system of international quality for production sectors, while building and expanding the model of manufacturing enterprises with renovated equipment for better productivity and quality.

He also suggested that the government should design policies to support businesses by issuing technical standards and providing guidelines about how to meet them.

Within the seminar framework, the KSA and the Small and Medium-Sized Enterprise Development Centre (SMEDEC), under the Ministry of Science and Technology, signed a memorandum of understanding allowing the two sides to coordinate in supporting small and medium-sized enterprises to approach new technology, increasing productivity and products quality and developing environmentally friendly products.

Accordingly, KSA will send experts in various sectors to Vietnam to offer training courses, while receiving those from Vietnam to study successful management and production models.

Unfinished steel projects hunt for capital

The steel industry, which is currently struggling to maintain production and settle its excess inventory, is seeking capital for its incomplete projects.

Investors are weighing up plans to pour more investment into steel projects many of which are currently operating beyond their design capacity.

In a recent interview granted to the Vietnam News Agency, Pham Chi Cuong, President of the Vietnam Steel Association, said the steel industry is undertaking a challenging task of mobilising capital for existing projects.

Steel supply is now exceeding market demand

He said most approved projects are slow going due to market price and currency rate fluctuations, policy changes, and global economic slowdown impact.  

According to Cuong, the Vietnam Steel Corporation has failed to find its Russian and Malaysian partners for its 2 million tonne hot rolled steel sheet project.

The Indian giant steel producer, Tata, has withdrawn from a US$5 billion steel project in Ha Tinh province – a key project in the locality for 2015-2025.

The second phase of a project to expand the Thai Nguyen iron and steel plant, one of the steel industry’s two biggest projects, has been put on hold for several years due to capital shortages.

The second phase was approved in 2007 with a total investment of more than VND3,800 billion, and was scheduled to be given a test run in 2011. However, problems arising from implementation forced investors to adjust the investment plan, raising the initial cost to VND8,100 billion.  

The government agreed in principle a plan to mobilise capital for the project. The Vietnam Steel Corporation made a proposal to the Ministry of Industry and Trade that suggested help from commercial banks.

Commercial banks are reluctant to disburse their funds as the property market has yet to recover, domestic steel consumption is falling sharply and supply is exceeding demand.

Cuong quoted steel makers’ complaint about banks’ conditions for lending capital, saying businesses still find it difficult to access bank loans despite constant interest rate reductions.

The government has introduced a policy to support businesses, and banks need to realise it with specific conditions, enabling businesses to take out loans to maintain production, said Cuong.  

Auto sales up 19% in ten months

The Vietnam Automobile Manufacturers’ Association (VAMA) has reported that the domestic auto industry sold nearly 10,280 units in October, up 5% on September and 29% on the same month of last year.

This was is the first time the automobile industry surpassed the level of 10,000 vehicles ever sold since early this year. It was also the 7th consecutive month that its sales revenue was higher than last year’s figure.

More than 87,166 units were sold in the past ten month period, a 19% increase from a year earlier. The number of domestically assembled units was estimated at 75,766 (up 18%), while that of imported automobiles increased by 25% compared to the same period last year.

Automakers expect that the market will continue to grow, even above that level, in the last months of this year.

Vietnamese advertising – innovation required

Vietnamese businesses in the advertising and communications industry should make basic, strategic and deep changes in order to accommodate modern advertising trends.

The experience of world top businesses like Google and Yahoo! shows that it is crucial for enterprises to ceaselessly change and refresh themselves to create best services, thus growing and meeting customers’ demands.

During the 28th AdAsia, John Merrifield, Chief Creative Officer at Google Asia-Pacific, said advertisers are changing just 10 percent of their structure compared to many years ago, while Google changes its entire structure every two years.

Merrifield said chances for creativity are brighter than ever, as technology has been changing in a way that marketers can increase customer interaction.

Meanwhile, Rose Tsou, Vice President of Yahoo! Asia-Pacific, also shared the firm’s restructuring stories.

She underlined the future trend of content marketing - which focuses on creating relevant and valuable content with the intention of changing or enhancing consumer behaviour to attract and retain customers.

Up to 90 percent of marketers believe in the next year, content marketing will be more important than ever, she said, adding that this is inevitable when technology has changed and personalised users’ experiences in a maximum way.

According to Don Peppers, one of the founders of the Peppers & Rogers Group, in order to succeed, marketers should win the trust of customers by applying a principle of “treating customers the way you want people to treat you”.

Experts said that Vietnam has a promising advertising market with impressive growth of 30 percent per annum, attracting increasing numbers of investors.

According to the Vietnam Advertisement Association, the country now has more than 4,000 service providers in the sector. However, the firms are still small, focusing mainly on the processing stage and providing support services.

Only 50-100 enterprises are considered genuine advertisers. Meanwhile, 20 foreign firms hold up to 80 percent of market share, the association cited.

VAA President Dinh Quang Ngu said Vietnamese advertisers should restructure to further penetrate into both domestic and international markets, effectively exploit the potential of modern communications and advertising trends based on Internet and digital technology.

Recognising the significance of the industry, the Vietnamese Government has paid much attention to the area since the country opened its market, especially in the current period when the Vietnamese economy has actively integrated into the world.

Particularly, the Advertisement Law, approved by the National Assembly on June 2012 and made effective on January 1 this year is considered a step forward in the building and perfecting of a legal system for the industry in Vietnam, contributing to making the sector integrate deeper into the world for the interest of both customers and enterprises and boosting the common development of the economy.

According to Ngu, Vietnamese advertisement service providers should consider two key aspects, the market opening level and creativity, in their restructuring.

When the market is opened, the flow of goods from foreign countries will bring with it the development of the advertising and communications sector, he said.

Ngu added that creativity reforms can be implemented through training personnel in a methodical and professional way.

David A. Aaker, Vice Chairman of Prophet (a global marketing consultancy supplier), said during the restructuring process, communications businesses should consider creativity as a top priority.

In order to build a successful brand, they need creativity, crafting a new area that is not seen in any competitors, while attracting public attention.

In addition to the business aspect, their brands should associate with global and social issues such as environmental protection and energy saving, he added.-

First Vinasoy research centre set up in Vietnam

The Vietnam Soya Products Company (Vinasoy) has set up a soybean research and application centre, VSAC for short, with the aim of serving the company’s sustainable business development.

At the founding ceremony on November 13 in the central province of Quang Ngai, the VSAC signed a memorandum of understanding on strategic cooperation with its US partners, namely the National Centre for Soybean Biotechnology (NSBC) and the National Soybean Research Laboratory (NSRL).

The centre will develop the molecule genetic technology applications to create high-yield varieties that cater for the demands to diversify soybean produce.

The centre, the first of its kind in Vietnam, will also conduct a number of studies on soya nutrition, and then popularise the findings among the masses through education programmes that aim to increase public life quality.

It will work to fulfil its tasks of improving farming techniques, opening short-term training courses for farmers to enhance their knowledge in the field, as well as collaborate with local and foreign partners to host symposia on soybean product development, among others.-

Belgian firm opens cocoa processing plant in Ben Tre

The Puratos Grand–Place Vietnam company under Belgium’s Puratos Group on November 14 inaugurated a cocoa processing plant and a centre for cocoa growing development in the southern province of Ben Tre.

Covering an area of five hectares in Giao Long Industrial Park, the eight million USD plant has an annual capacity of 5,000 tonnes of cocoa bean. In 2014, it is expected to process about 1,000 tonnes of cocoa bean for its chocolate production plant in Binh Duong province.

Meanwhile, the establishment of the cocoa development centre is to assist local farmers in planting cocoa trees in order to promote sustainable cocoa cultivation in the Mekong Delta region.

The company applies a production process called “from cocoa beans to finished chocolate.” The inauguration of the plant is one of the final steps to complete the closed process, said Managing Director of Puratos Grand–Place Vietnam Gricha Safarian.

Ben Tre has the largest cocoa cultivation area in Vietnam with over 10,000 ha, accounting for 50 percent of the total area of cocoa trees and one-third of the nation’s cocoa output.-

Auto manufacturers expect to get fast lane in Vietnam

Foreign investment is expected to increase in Vietnam’s automobile industry in the coming years as the government explores measures to expand the local market. Vietnam Investment Review reports.

“The Vietnamese government realised that there were barriers to the development of the automobile industry and is trying to remove them through a long-term master plan. The purpose is to develop an automobile industry strong enough to compete with other countries in the region,” said Nguyen Thi Xuan Thuy, head of Strategy and Integration Policy Division under the Industrial Policy and Strategy Institute.

Thuy, who is also a member of the master plan’s drafting team, said the Vietnamese government wanted to attract more car foreign investors into the industry by reducing taxes and fees. Even though the master plan has not yet been approved, it offers a bright outlook for car-makers.

Kiyoshi Teshima, deputy director of Vina Star Motor – a subsidiary of Mitsubishi Motors in Vietnam, said he hoped the Vietnamese government would maintain stable policies for the car industry. “Tax reductions are also indispensable to motivate customers to buy new cars,” said Teshima.

Over past years, the Vietnamese government has deliberately restricted the growth of the domestic car market because of chronically bad traffic infrastructure. The policy includes high taxes and fees imposed on cars, meaning cars in Vietnam are three times more expensive than other markets.

Vietnam’s car ownership currently averages at 20 cars per 1,000 people, according to the Ministry of Industry and Trade.

“The difference about the new master plan is that the government will encourage the growth of the car market,” said Thuy, adding that a ratio of 50 cars per 1,000 people in the next ten years was being targeted. “Although the market is still small now, there will be huge opportunities for car-makers once the new master plan is approved.”

Vietnam’s car industry began in the early 1990s when foreign car makers like Toyota and Ford started building factories in the country.

Statistics from the Industrial Policy and Strategy Institute showed that there were around 300 domestic and foreign companies operating in the car industry in Vietnam, with Toyota Vietnam as the biggest player, followed by local firm Truong Hai. However, all of them operate on a small scale and boast a localisation rate for components of just 10 percent.

Jesus Metelo N. Arias Jr, chairman of Vietnam Automobile Manufacturers’ Association, in an interview last month with VIR said that the lack of clear and stable policies had hindered the development of the car industry in Vietnam.

Arias, also managing director of Ford Vietnam, stressed foreign car-makers and suppliers would continue to invest in Vietnam but only if the government maintained a stable policy and reduced business costs.-

SSC seeks extension for draft derivatives decree

The State Securities Commission asked the Government to extend the deadline for a draft decree on the derivatives market from the end of this year to next year, according to Viet Nam News.

Although Vietnam urgently needs derivatives regulations, the complicated topic requires careful consideration and consultation with people from relevant organisations, the commission said.

While the country's stock market has been operating for more than 13 years, there is not yet a derivatives market. Such a market is expected to be introduced in 2015.

Derivatives include four main instruments: forward contracts, swap agreements, futures contracts and option contracts. Currently, only stocks, bonds and fund certificates are traded in Vietnam.

Derivatives transactions become essential in Vietnam when unpredictable changes in the prices of commodities, interest rates, exchange rates and stocks poses risks to investors.

Several commercial banks provide currency derivatives, but not enough to meet market demand and prevent risks from exchange rate and interest rate fluctuations.

The establishment of the derivatives market is in line with the restructuring of the stock market and the Stock Market Development Strategy to 2020, according to director of the Market Development Department under the commission Nguyen Son.

Chairman of the State Securities Commission Vu Bang was quoted by Dau Tu Chung Khoan newspaper as saying that the derivatives market would operate under the management of the Vietnam Stock Exchange merged from the two existing bourses.

The commission proposed that only securities companies with minimum equity of 500 billion VND (23.8 million USD) and good financial status be allowed to join the derivatives market.

Well-trained human resources, a consistent and transparent legal framework and risk control management are critical for the derivatives market's success, experts said.

Multi-level marketing scams still out of control

Even though several multi-level marketing scams have caused a great deal of trouble, local authorities have been unable to fix the lax management over such schemes.

Multi-level marketing has increased in Vietnam, attracting a large number of companies and individuals. Most of these kinds of businesses in Vietnam involve food, cosmetics and physiotherapy equipment.

In pursuit of high profits, they violated regulations and tricked hundreds of people. Hung, an agent for Unicity Company, said he was tricked into this programme by a friend. "He told me that he earned tens of millions per month, so I sold my motorbike for VND8 million (USD384) and borrowed from other people, for a total of VND20 million. After spending all of this money on their products, I was happy because they gave me back VND3 million." he said.

In order to get commission fees, Hung had to lure 10 other people into paying VND20 million to the company. "I got four people from my village and now we're all in debt. My mother fell ill when she found out what I had been doing. I'm so ashamed that I don't dare to go back home." Hung said.

Over the past few years, there have been a wide range of such "companies" discovered in Vietnam, as well as arrests at several multi-level marketing firms, such as muaban24 and Thien Ngoc Minh Uy. But the situation remains an important one due to unclear regulatory work.

Bui Minh Trang, director of HCM City Department of Health said the punishments are insignificant. "We just manage fines for false advertising, which is only VND5-8 million. In addition, many firms disguise their advertising programmes as conferences. It's hard to tell the real intent because those 'conferences' ban recording devices. We asked for help from the Vietnam Food Administration, but they don't know what to do either."

Trang said they have a hold on certain violating companies, such as Unicity. In near future, they will cooperate with the Department of Information and Communications in order to carry out a more thorough sweep and publicise the names of violating firms. Currently, the department is drafting new regulations to control food management so that may revoke the business licences of violators.

CBRE Vietnam named top property consultant

CBRE Vietnam recently announced it was awarded Best Property Consultant Vietnam at this year’s South East Asia Property Awards.

Managing director of CBRE Vietnam Marc Townsend gave credit for the award to his entire team, saying their hard work has made the company a market leader.

“The market has faced many challenges this year, but despite this CBRE has remained committed to maintaining the best professional standards and developing our team to maximise opportunities for our partners,” he added.

The annual South East Asia Property Awards were held this year at the Shangri-La in Singapore.

A total of 32 awards were presented at the ceremony, recognising the region’s best developers, developments, service providers and design firms from Singapore, Malaysia, Indonesia, Thailand, the Philippines, and Vietnam.

SBV says nearly 63m bank cards in use

The number of bank cards in circulation nationwide reached 62.93 million at the end of the third quarter, rising 4.62 per cent from the previous period, according to the State Bank of Viet Nam.

Domestic cards reached 57.23 million, up 4.26 per cent, and international cards hit 5.7 million, increasing 8.36 per cent.

With the country's population at 90 million, the growing use of bank cards to pay for goods and services indicates their convenience is being recognised.

PM leads charge to develop technology

Prime Minister Nguyen Tan Dung has approved a proposal to drive development of the science and technology market by 2020, in an attempt to increase the competitiveness of technology-based products and services.

The programme aims to simplify regulations on the establishment, registration and operation of businesses in the tech sector; and provide a boost to domestic science and technology based firms currently lagging behind overseas competitors.

The programme will see the construction of national-scale trading floors in Ha Noi, HCM City and Da Nang City, while existing tech marts will be expanded.

The programme also aims to see the proportion of transactions resulting from domestic intellectual property increase to 10 per cent of total technology related sales by 2015 and 20 per cent by 2020.

The programme is expected to meet local market demand for technology in a range of sectors, and enable a higher rate of technology use nationwide.

Steel sector stymied by finance

The steel industry was struggling to get loans for projects to build new factories and upgrade existing facilities due to investor caution, said an official from the Viet Nam Steel Association (VSA).

VSA Chairman Pham Chi Cuong said interest rates had fallen but steel enterprises were still having difficulty in accessing capital. Banks have agreed to grant loans but the projects must meet specific conditions to be eligible for credit.

Steel projects needed huge investment and it took time to recoup initial capital and turn a profit. Investments were also risky if the owner of the project did not choose quality equipment and technology, Cuong said.

He said the project to expand production for the second stage of the Thai Nguyen Steel Joint Stock Company was approved in 2007 with initial capital of VND3.8 trillion (US$180.95 million), and the expansion was due for completing in 2011.

However, many difficulties developed during the implementation process, forcing the cost up to VND8.1 trillion ($385.7 million).

The PM had approved in principle a plan to arrange capital for the project and the Ministry of Industry and Trade had asked the company to work with banks to access loans, but the problem remained unsolved, Cuong said.

The Viet Nam Steel Corporation has also been unable to find an investor to develop its hot-rolled steel project with a capacity of 2 million tonnes, despite negotiations with potential partners from Russia and Malaysia.

He said the banks should list specific conditions for enterprises to get loans for production.

Thai Nguyen targets $5bn in FDI

The northern province of Thai Nguyen aimed to absorb US$5 billion in foreign direct investment (FDI) by the year-end, said provincial People's Committee Chairman Duong Ngoc Long.

In order to reach the goal, Long said the province would continue to perfect infrastructure with a focus on transport to increase its competitiveness and foster strong foreign investment.

"After the success of Samsung's huge investment, we hope that a new flow of foreign capital will enter the province in the near future, especially from Japan, South Korea, Taiwan and some European countries," he said.

According to the Foreign Investment Agency, the province topped national FDI attraction in the past 10 months, luring additional capital of over $3.4 billion, representing 17.7 per cent of the country's newly-registered investment and surpassing registered FDI in the province for past 20 years.

Long attributed the encouraging results to the increasing efforts of local authorities to streamline administrative procedures and improve the quality of support services for enterprises to improve the investment and business climate.

Besides organising conferences to seek more investment, we also tried to facilitate the implementation of foreign-invested projects to attract others, he said.

Building material firms perform well in Q3

Statistics of Viet Dragon Securities Company (VDSC) show that listed enterprises in the building material sector made significant improvements in the third quarter of this year and the sector was in the top three for profit growth.

Basing on financial reports of 440 out of 680 enterprises listed on the two stock exchanges, VDSC said that electricity, water, fuel and gasoline, industrial goods and service and chemical, and building materials were the top three sectors of profit growth in the third quarter. Of which, the building material industry reported a profit growth rate of 90% while the two other sectors increased by around 100% compared to the same period in 2012.

Building material firms posted a ratio of profit target fulfillment of 30%, while in the second quarter it reported the lowest ratio of only 4%.

Electricity, water, fuel and gasoline enterprises continued to take the lead for profit target fulfillment with a ratio of 183%, followed by industrial goods and service and chemical industry with 111% and 98% respectively. The real estate sector reported the lowest ratio of 11%.

Enterprises with the highest ratios of profit target fulfillment included Pha Lai Thermal Power Company (PPC) with 418%, Tan Dai Hung Plastic Company (TPC) 171%, Ninh Binh Thermal Power Company (NBP) 254%, PetroVietnam Low Pressure Gas Distribution Company (PGD) 157% and Ba Ria Thermal Power Company (BTP) 150%.

VDSC also said that return on asset (ROA) and return on equity (ROE) of listed firms averaged out at 1% and 3% respectively. Information technology, food and beverage and media sectors took the lead for ROA and ROE. Meanwhile, real estate, financial service and building material firms reported the lowest ratios.

Export of phones and accessories up

Export turnover of phones and accessories in the first 10 months of this year is estimated at US$17.72 billion, a year-on-year increase of 76.1 per cent, according to the Ministry of Industry and Trade.

The major markets importing these items include the United Arab Emirates, Germany, Austria, England, Italy, India and Hong Kong.

The General Department of Customs reported that the United Arab Emirates, Germany and Austria posted export turnover of more than $1 billion.

In addition, 22 markets such as the UK, Italy, India, Hong Kong, Russia, France, and Thailand made more than $100 million from exports, while Cambodia and Japan saw declining turnover.

Support industries association established

The Ha Noi Supporting Industry Business Association (HANSIBA) yesterday announced its operation, becoming the first one of its kind in Viet Nam with an aim to develop support industries in the country.

Nguyen Hoang, the association's chairman, said the association would be destination for thousands of support industry enterprises in Ha Noi which looked for solutions to improve co-operation efficiency of its members.

It would also organise and assign associated production co-operation with international businesses, especially those from Japan to increase efficiency for enterprises.

It targeted to have 150 members engaging in support industries by 2014 and 500 ones by 2018 as well as around 1,500 associated members later. Its members would contribute VND2.5 trillion (US$119 million) to the State budget by 2018 and creating jobs for 500,000 people.

Binh Son refinery hits annual target

The oil processing output of Binh Son Refining and Petrochemical Ltd Co reached 5.65 million tonnes, fulfilling the company's 2013 goal, said general director Dinh Van Ngoc.

Binh Son Refining and Petrochemical Company Ltd Co (BSR) owns and operates Dung Quat Oil Refinery, which opened in 2009. Since then, BSR has sold 23.7 million tonnes of oil, earning nearly VND474 trillion (US$22.3 billion) and paying VND72.6 trillion ($3.4 billion) to the State budget.

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