Hanoi Techmart – opportunities for local businesses

Hanoi will organise a technology and equipment fair (Techmart-Hanoi) from September 26-29 with the aim of providing a platform for local innovators and entrepreneurs to promote their products.

The municipal Department of Science and Technology said around 248 businesses have registered to showcase their products and services at 303 pavilions.

Foreign businesses from the UK, Finland and China will also join the event with 14 pavilion, introducing energy saving equipment, and new and renewable energy technology.

The fair also reserves space for young businesses and outstanding farmers of Hanoi to introduce their initiatives in technology, biotechnology and agriculture.

Vietnam, Pakistan see rapid trade growth

Vietnam and Pakistan have enjoyed a rapid growth in two-way trade in recent years, reaching 400 million USD in 2012 from only 27 million USD in 2000.

The figure in the first seven months of this year was 178.6 million USD, according to statistics from the General Department of Vietnam Customs.

At present, the balance of trade is leaning toward Pakistan as Vietnam has to import materials from this country such as cotton, fibre, leather, pharmaceuticals, animal feed and marble.

Meanwhile, Pakistan has a great demand for consumption goods like tea, pepper, rubber, tires, computers, electricity generators, electronic products, woodwork and footwear. Pakistani importers have started to pay their attention to Vietnam’s seafood market.

According to Nguyen The Hung, Deputy Director of the Vietnam Chamber of Commerce and Industry in Ho Chi Minh City, Vietnamese and Pakistani businesses are studying each other’s markets to expand investment and business operations in the fields of industrial production, agricultural processing, information technology and software.

The two nations can also boost cooperation in pharmaceuticals, he said, citing that last year Vietnam imported 3.5 billion USD worth of pharmaceuticals and materials for this sector.

Pakistan is one of the major pharmaceutical and pharmaceutical materials providers for Vietnam with an annual turnover of 11.2 million USD, he added.

Statistics show that Vietnam’s pharmaceutical sector saw its average growth jump from 13.5 percent in the 2008-2011 period to 25 percent in 2012 with revenues of 2 billion USD.

At a recent working session between 20 Pakistani pharmaceutical businesses and their Vietnamese counterparts in Ho Chi Minh City, Riaz Ahmed, head of the delegation, said that Vietnam is one of the main importers of medicine from Pakistan, a 190 million-strong market.

Vietnam and Pakistan target two-way trade of 500 million USD in 2013, according to Pakistani Deputy Ambassador to Vietnam Aizaz Khan, adding that over the past time the two countries have signed a number of trade agreements while both sides’ enterprises have carried out numerous business promotion activities.

In order to create favourable conditions for the businesses, Pakistan has worked with Vietnam’s aviation sector on the opening of a direct air route from Hanoi to Pakistan, he said.

The central bank of Pakistan has decided to allow its commercial banks to establish branches in Vietnam, he added.-

Mekong Delta looks to capitalise on tra fish

The Mekong Delta fishery sector is making all-out efforts towards the goal of earning 2.3 billion USD from the export of tra fish, one of the key foreign currency earners for the country.

In order to raise the tra fish export value by 28 percent in 2020 compared to 2012, regional provinces will expand the acreage of tra farming ponds to 13,000ha from the current 4,696ha. The extra area, mainly along the Tien and Hau Rivers , is expected to help bring tra output to 1.85 million tonnes.

The three provinces of Dong Thap, An Giang, Ben Tre and Can Tho City are projected to account for 63 percent of tra fish farming area and 64.5 percent of the fish output of the entire region.

The fishery sector will tighten control of the fish breeding process to ensure the sufficient supply of quality fish fry for farmers. At the same time, fish farms are encouraged to adopt internationally-recognised standards such as GAP (Good Agricultural Practice), ASC (Aquaculture Stewardship Council) and MSC CoC (Marine Stewardship Council chain of custody) standards.

Regarding fish processing, more factories will be built in all 13 provinces and cities in the region in order to raise the region’s processing capacity to more than one million tonnes per harvest season.

79 feed factories will also be built with the aim of increasing local supply to 2.7 million tonnes per year by 2020, meeting 60 percent of local demand.

The region is working on the plan for processing and distribution tra fish products along the direction of bringing farmers and processors closer together, reducing risks in terms of prices and market.

In addition, export promotion activities will be increased to tap the potential market in the European Union, the US , Japan , several Asian countries and the Middle East .

The Mekong Delta is the biggest tra fish producing region in the country, with 4,696ha of ponds compared to the nation’s total of 5,600ha.

According to statistics of the Vietnam Association of Seafood Exporters and Processors (VASEP), the fish has been exported to 142 markets worldwide, bringing in more than 1.74 billion USD in 2012.

Binh Duong attracts property developers

Long-term investors seeking capital gains or rental income are increasingly looking to the southern province of Binh Duong’s housing market, according to a survey by property services provider Savills Vietnam.

The province has been a leader in attracting foreign direct investment, with almost 2,200 such projects with total capital of more than 18 billion USD. Its population last year was around 1.69 million people, of which 75 percent were of working age, revealing the potential of its residential market.

As of August, there were 49 apartment and villa/townhouse projects in both the primary and secondary markets, supplying around 11,000 dwellings – an 11 percent average annual increase since 2009. All residential projects are located in the five main areas of Thuan An, Di An, Thu Dau Mot, Ben Cat and Binh Duong New City.

This year 18 additional projects are expected to hit the market with more than 11,800 apartments, villas and townhouses. Approximately 77 percent are apartments. In that segment, the price of active projects is 800-1,200 USD per square metre and unit prices range from 80,000 USD to 120,000 USD. In the landed property segment, prices range from 550 USD to 1,000 USD per square metre.

The average price in Binh Duong New City is 1,500-2,100 USD per square metre, higher than in other areas. The prices at popular townhouse projects in New City range from 200,000 USD to 260,000 USD per dwelling, while comparable houses in other areas sell for 50,000-110,000 USD.

The most common household size in Binh Duong is two to four people, with 73 percent falling in that range, making two-bedroom units the most appropriate.

Trade disputes up alongside economic integration

Together with the increase in trade activities given the country’s international economic integration, trade disputes between Vietnam and importing countries are also rising, according to the Vietnam Chamber of Commerce and Industry (VCCI).

The Can Tho branch of the VCCI announced last week in a report quoted by the Saigon Times Daily that trade disputes among Vietnamese exporting enterprises and other nations have picked up in terms of case numbers and commodities since 2010.

Local exporters faced two anti-dumping lawsuits and one anti-subsidy case in 2010, four anti-dumping lawsuits and two anti-subsidy cases in 2011, according to the report.

Exports facing trade disputes in 2010 were hangers, air conditioners and polyethylene (PE) plastic bags, which increased to five in 2011 with rolled steel, yarn, footwear, steel pipes and carbon steel pipes.

The Vietnam Competition Authority under the Ministry of Industry and Trade said in its Annual Report 2012 that it handled 12 trade remedy cases against Vietnam exports, including seven anti-dumping cases, one anti-circumvention case, two countervailing duties cases and two protection cases.

Similarly, exporting firms have been charged with four anti-subsidy lawsuits and three anti-dumping ones this year. Four items suffering the charges from January to May this year are steel conduit pipes, stainless steel pipes, stainless steel and frozen warm water shrimp.

Nguyen Phuong Lam, director of the Legal Compliance Department of Can Tho branch’s VCCI, recently cited statistics on trade disputes handled at the Vietnam International Arbitration Centre (VIAC) showing commodity trading disputes posting the highest ratio, at over 70percent , followed by processing and construction sharing 5 percent each. Investment cooperation disputes alone make up 4 percent of the case number settled by VIAC, reported the Saigon Times Daily.

According to Lam, experiences from trade disputes expose the two main weak points of exporting enterprises - the lack of information on customers and importing nations, and the poor knowledge of related laws.

"Studying customers is a very important factor but local exporters often forget to do so, with up to 80 percent of local firms failing to invest in this step," he said at a seminar on solutions for farm produce and seafood exports held in Can Tho City last week.

He also advised enterprises to pay attention to how and where the problems will be handled when signing export contracts. In particular, local firms need to master trade dispute law and international law or buy insurance to avoid risks in case of disputes.

Binh Duong firms share views on bureaucratic customs procedures

As many as 70 European and US enterprises based in the southern province of Binh Duong have entered a dialogue discussing how to overcome difficulties with customs procedures in the locality.

The September 19 meeting was co-hosted by the Customs Department of Binh Duong and the Vietnam Chamber of Commerce and Industry (VCCI) in Ho Chi Minh City.

Participants at the event exchanged views on e-customs procedures, tax incentive conditions, customs clearance and the taxable duration for temporary imports set to be re-exported.

Deputy Head of Customs Control and Supervision Division Trinh Huynh Thanh said the e-customs procedure service works around-the-clock and time spending for e-customs declaration has now been reduced to less than 30 minutes.

Relating to customs procedure of temporary import for re-export, Deputy Director General of the provincial Customs Department Nguyen Truong Giang said tax must be paid before the completion of customs procedures of temporary import.

If the tax payment is guaranteed by credit institutions, the due date for tax payment is 15 days since expire dare of temporary import, re-export, Giang added.

The enterprises asked the provincial customs department to organise more dialogues to gradually reform ineffective administrative procedures.

Currently, there are over 250 EU and US enterprises in Binh Duong province, producing mainly electrical products and garment and textile items.-

Fake fertilisers must be rooted out: seminar

The continuing glut of fake and low-quality fertilisers affects agricultural production and causes financial losses for farmers, and drastic solutions are needed, delegates warned at a seminar in HCM City yesterday.

The Market Management Department said the problem was worsening with an increase in the distribution of spurious fertilisers and locations where they were found and the entry of sub-standard products from China.

Market authorities busted 1,390 cases of fake fertiliser production and trading last year and in the first half of this year, seizing 917 tonnes of fertilisers and slapping fines of VND17.2 billion (US$813,238), Do Thanh Lam, deputy head of the department, said.

Most of the violations were to do with fake products carrying labels of prestigious brands, Nguyen Hac Thuy, permanent deputy chairman of the Viet Nam Fertiliser Association, said.

A majority of them were urea, DAP, and NPK fertilisers because these were in high demand and easy to fake, he said.

Authorities found many establishments in the provinces of Binh Thuan, Binh Duong, Binh Phuoc, Dak Nong, Dong Nai, Hai Phong, Phu Yen and others passing off fakes as big brands.

"Tests of samples found much lower nutrients than advertised."

Inspectors found fertiliser samples containing bricks, stones, clay and colour powder, he said.

Thuy and many other delegates said many small establishments were taking advantage of loose oversight to make substandard products and sell cheap.

Deputy Minister of Industry and Trade Nguyen Cam Tu said to deter such practices the country needed to take a series of comprehensive measures.

"The most important is to complete legal documents on fertiliser quality and national standards for each kind of fertiliser, which will be fundamental for management agencies to manage production and trading of fertiliser products," he said.

Relevant agencies like the Ministries of Public Security, Industry and Trade, and Agriculture and Rural Development and the Viet Nam Fertiliser Association should work together to keep an eye on the fertiliser market, he said.

Delegates agreed that the Government should tighten oversight right from the stage of issuing licences.

Relevant agencies should scrupulously impose eligibility conditions for fertiliser production.

Individuals and organisations wanting to produce or trade in fertilisers must meet the criteria set for production capacity, equipment, other facilities, and environmental friendliness, they said.

Nguyen Van Hoa, deputy head of the Crop Production Department, said "there are still many intermediary levels involved in the fertiliser distribution system, making it difficult for authorities to monitor quality and price."

To ensure a sound fertiliser market, the Government must set criteria that fertiliser trading and distribution establishments have to meet, he added.

Delegates also called for more stringent punishment for those found making fake or low-quality fertilisers, saying existing penalties do not go far enough to deter fraudulent activities.

The country is expected to need around 10.3 million tonnes of fertilisers of all kinds this year. Local production meets 80 per cent of the demand.

Market hot as fire sales spread

The domestic real estate market last week moved on the news that two developers had decided to cut by half their prices in an effort to turn the struggling market.

Novaland, the developer of Sunrise City in Ho Chi Minh City, announced that it had decided to sell apartments in the North Tower residential buildings, the third phase of the Sunrise City project, at VND25 million per square metre ($1,190) - half the price of apartments in the project’s first phase South Tower.

Similarly, Phat Dat Real Estate Development Corporation announced they would be selling landed houses and villas at The EverRich 3 project at prices of around VND40 million per square metre, a 50 per cent reduction on last year’s initial quotes.

According to Le Hung, chairman of the An Phu Real Estate company, developers’ price reductions are an intelligent way to survive in the current market.

“It is better to sell successfully, even with a lower than expected price, otherwise developers will be stuck, with no capital return,” Hung said.

Phan Xuan Can, chairman of Sohovietnam, said that developers are now in need of capital investment, forcing them to sell their products at reduced rates.

However Can claimed that even with the sharp reductions announced by Novaland and Phat Dat, their prices were still higher than projects in the same area.

He also believes that the two developers have reduced their prices too late. “This reduction should have been done a year ago, then developers could have sold better,” Can said.

Meanwhile Vo Tan Thanh, deputy director of Phat Dat Corporation confirmed that the new prices at Ever Rich 3 represented a loss for the company.

“We are only selling at the reduced price on 75 units in order to generate capital that we can return to existing projects,” Thanh said.

His company remains hopeful that the market will recover in 2014 allowing them to increase their pricing accordingly.

Talking with VIR, Phan Thanh Huy, general director of Novaland explained that their new prices would see the project break even financially, and that the price disparity also reflects the differences in quality of the various units.

“In the first phase we sold a five-star product for VND50 million per square metre. The second phase was sold at VND40 million as it was a four-star product. And in this third phase, the price of VND25 million represents a three-star product,” Huy said.

Prior to Novaland and Phat Dat Corporation’s price reductions, two other big developers in Ho Chi Minh City, Hoang Anh Gia Lai and Quoc Cuong Gia Lai had already hastened fire sales on their real estate products.

Hoang Anh Gia Lai, a long term real estate developer is in the process of selling their projects and withdrawing from the real estate market in order to focus on other fields. Meanwhile, the investor of Quoc Cuong Gia Lai was forced to mortgage their private properties in order to raise capital for re-investment in new projects.

According to Nguyen Van Duc, vice director of Dat Lanh Real Estate Company, the present price reductions were bad news for the market. “It means that developers are suffering from a serious shortage of investment capital,” Duc said.

Duc predicted that the reductions will only increase in the near future as developers’ need for capital intensifies.

Duc added that selling units valued at more than VND4 billion was exceedingly difficult. “Therefore, price reduction is the act of restructuring products to be cheaper and more affordable to customers,” Duc said.

Vietnamese paper sector promising

Vietnamese pulp manufacturing has proved its attraction as the country remains the world’s largest wood chip exporter for three consecutive years with a volume of 6 million tonnes, or 2.7 million tonnes of pulp, in 2012.

At the Vietnam International Exhibition on Paper Chemicals and Technologies (Paper Vietnam 2013) in June, a host of viable projects were announced by both domestic and foreign enterprises.

According to General Secretary of the Vietnam Pulp and Paper Association (VPPA) Vu Ngoc Bao, the Vietnamese pulp and paper market will get hotter and fiercely competitive when the Free Trade Agreement (FTA) between ASEAN and India, the Republic of Korea, Japan, China, Australia and New Zealand takes full effect in 2015, and the Trans-Pacific Partnership (TPP) Agreement, of which Vietnam is a member, is signed.

“To compete, domestic businesses must expand their investment in production lines, reduce expenses and enhance product quality,” he added.

Plummeting demand is posing a challenge for the sector. At present, the total consumption of Vietnamese paper is down 3 percent from one year ago. Newsprint has fallen at the fastest rate since people cut their spending and businesses place fewer advertisements in newspapers or use other forms to promote their brands. Meanwhile, the consumption of high quality wood-free coated paper has also seen a plunge of 34.5 percent.

On the other hand, a positive signal is emerging - paper imports have been declining. Statistics from the VPPA show that paper imports in this year’s first half were down 12 percent from the same period in 2012, particularly newsprint and high quality wood-free coated paper.

“This proves that the quality of domestic paper rivals imported products,” said Vu Ngoc Bao.

Notably, paper exports have increased by 15 percent thanks to stable demand growth in such markets as China’s Taiwan (votive paper) and the US (stationery paper).-

Shortage of able personnel hinders tourism development

The Vietnamese tourism industry is lacking able personnel even though the industry is growing and greeting more tourists each year.

Recently, many examples of violation of the regulations covering  tourism have been dealt with by the tourism industry itself. Several foreign firms who used unlicensed guides have been expelled from Vietnam.

However, the firms are forced to employ unlicensed guides because the Vietnamese tourism industry is lacking experienced guides.

According to the Vietnam National Administration of Tourism, Vietnam has about 10,000 tourism firms which need nearly 40,000 employees each year. However, the number of graduates is only 15,000 a year, plus the firms have to re-train many graduates from colleges and universities before they can actually work.

Vu The Binh, president of Vietnam Tourism Association said, "We are in serious need of experienced guides, especially people who can speak Japanese or Russian. In some cases, people who have experience in the field cannot speak foreign languages, or vice-versa."

Many well-known firms suffer from a travel guide shortage during the holiday celebrations. They have to hire temporary employees and face potential problems i.e. that temporary workers might use the company's name for personal benefit and thereby sully the name of the company.

"Opportunities for graduates are high, yet, I know some firms can only find a  few suitable employees." said the director of a tourism firm.

30-45% of tour guides and 70-85% of receptionists at restaurants and hotels do not meet the requirements for knowledge of foreign languages.

Head of another tourism company said they receive lots of applications for accountants, marketing people and executive positions though they're in dire need of room service personnel, kitchen workers and waiters. "Only a few people apply for those positions." he said.

Also, despite the high number of graduates, only a small number of Vietnamese employees are able to take on important roles at major hotels. The hotels prefer foreign managers because Vietnamese training courses and the quality of teachers are still considered weak. Training schools and tourism firms must find a way to work together to better deal with the situation.

Firms should be encouraged to establish their own training schools in order to meet the market demand.

Vinh Phuc bets on government gaming law

Vinh Phuc provincial leaders have urged the Vietnamese government to finalise the proposed legal framework governing casino and sports-betting as the province has plans for foreign investment into a casino, horsetrack project.

Phung Quang Hung, Chairman of Vinh Phuc Provincial People’s Committee, in a recent meeting about the development plan for Hanoi and surrounding provinces, said several investors from the US and South Korea had shown interest in Tam Dao Mountain’s Dai Lai Lake as the proposed site for horseracing and table gaming.

Hung did not disclose the names of the prospective investors, but said that delays on establishing a clear legal structure for casinos was the last barrier preventing capital injections into the area.

The government has been drafting decrees on casinos and sports-betting since 2008, but has not yet promulgated one. Last month, they finally submitted a draft plan for approval and authorities are saying it could be put into law early next year.

While no official announcement has been made about the investors, there have been substantiated rumours since 2007 that Korea’s G.O. Max I&D is planning a $570 million horsetrack that would include seats and services for 15,000-17,000 people, as well as a golf course and luxury villas.

Up to now the firm has not yet received an investment certificate because there is no legal structure by which to do so.

A source familiar with the Korean investor and a middle-man between them and Vinh Phuc authorities said G.O. Max is eager to get the project started, despite a five year delay.

“We are thrilled to hear that the National Assembly is finally seriously considering the proposed law on gambling and sports-betting and that it could be passed early next year,” said VIR’s source who added that the company was already working to arrange financing with potential partners.

Surf’s up: Japan urges enterprises to catch ‘third investment wave

The Japanese Business Association of Ho Chi Minh City (JBAH) has said it expects the third Japanese investment wave into Vietnam since the 1990s to roll in soon, and enterprises should start paddling.

“Investment from Japan is booming and under a dialogue mechanism between the two countries – Vietnam-Japan Joint Initiatives – various Japanese business associations and government departments are working to improve Vietnam’s investment environment,” JBAH chairman Kimio Yamaguchi announced at the Vietnam-Japan Connection Conference in Ho Chi Minh City last Friday.

Representatives from more than 100 Japanese businesses operating in Vietnam took part in the event which was co-hosted by JBAH and the CEO Club.

There, Japanese investors put proposals before government and businesses that outlined the break of what they say is a ‘third investment wave’.

Hirotaka Yasuzumi, managing director of the Japan External Trade Organization (JETRO) in Ho Chi Minh City, noted proposals in the areas of infrastructure development, investor services, supporting industries, and assistance for local small and medium-sized businesses. He stressed the importance of solving tax issues and laying out realisable policies for long-term development.

JBAH vice chairman Masaki Yamashita, general manager of Bank of Tokyo-Mitsubishi UFJ Ho Chi Minh City, said the government side is likely to be slow in absorbing the proposals, but that he anticipated a much smoother process from the business side.

“The key point here is corporate culture. Japanese and Vietnamese businesses look at challenges and opportunities differently. Suppose there were two mountains, one small and one big, each with a treasure at the top. The treasure on top of the big mountain is much bigger than that of the small. Regardless, most Vietnamese businesses would rather quickly ascend the small mountain for less, than taking their time going up the big one for more. It is important to Japanese companies that their partners recognize long-term value, he added.

“To bridge this gap, the two sides have to understand each other’s business culture so they can find compromise,” Yamashita said.

“Trust is a must,” he added.

The conference was dedicated to discussing and educating on business culture. Esuhai Co. Ltd. director Le Song Son stressed that while there would always be differences between the two sides, partners shouldn’t forget that they are on the same side and to sit down and focus on the problem, not waste time battling each other.

JBAH chairman Yamaguchi said his association currently had 648 registered members and he expects this number to rise quickly, as he has seen the signals of an oncoming investment flow, particularly in the field of supporting industries.

Vietnam is second in South East Asia after Thailand with 1,200 Japanese companies calling it home. The latter’s supporting industries are already well developed.

Yasuzumi emphasised that investment focuses would continue to be Ho Chi Minh City, Dong Nai, Binh Duong, Long An, and Ba Ria-Vung Tau but that there would be expansions into the Mekong Delta, Binh Phuoc and Lam Dong provinces as well as some north of Hanoi. He added that central and Mekong Delta provinces with good infrastructure to Ho Chi Minh City would be highly competitive.

In a recent development, Ho Chi Minh City’s Investment and Trade Promotion Centre, and the Japanese Consulate General plan to co-organise a forum on October 9 at the White Palace Convention Centre.

Large trade surplus recorded in August

Vietnam ran a trade surplus of US$755 million in the second half of August, bringing about a surplus of US$176 million in the first eight months of 2013.

The latest statistics announced by Vietnam General Department of Customs on September 16 show that the total value of goods exported from and imported to Vietnam during the second half of August (from August 16-31) reached US$12.22 billion, 7.2% higher than in the first half of the month.

Vietnam’s aggregate trade volume in August was US$23.24 billion, a slight increase of 1.9% compared to July’s total. The country’s exports totalled US$11.92 billion, up 2.8% month on month, while imports also increased slightly 0.9% to US$11.32 billion.

The nation’s year-to-date export revenue stood at US$85.16 billion at the end of August, up 15.1% from that point a year earlier. Vietnam imported US$84.99 billion in the same eight-month period, up 14.4% year-on-year.

Vietnam Airlines values French market

Vietnam’s national flag carrier, Vietnam Airlines (VA), hosted an event in Paris on September 15 for its customers in France, a majority of whom are overseas Vietnamese.

According to Le Dung, the director of VA’s European branch, the support of overseas Vietnamese in France has contributed greatly to the success of direct Paris-Hanoi and Paris-Ho Chi Minh City air service, one of the most important routes operated by VA.

According to Dung, VA has about 15,000 regular passengers on the Vietnam-France route. 70 percent of them are Vietnamese who use the “Golden Lotus” frequent flyer programme.

He said VA organizes this event annually to express thanks to loyal customers in France, and to affirm its commitment to the French market, a fast-growing market of high importance to the airline. This year, VA put on two concerts featuring performances by popular Vietnamese singers and offered special promotions on the Vietnam-France route.

Vietnam Airlines is the only airline that operates direct service between Vietnam and France. It has also collaborated with Air France to offer two flights per day from Hanoi and Ho Chi Minh City to Paris.

Work starts on US$164.5 million tourist site in Binh Dinh

The Vinpearl Limited Liability Company started the construction of the Vinpearl Hai Giang tourist site in Binh Dinh province on September 15.

Covering a total area of more than 650 hectares in Hai Giang hamlet, Nhon Hai commune, Quy Nhon city, the site is designed as an eco-tourism complex in line with international criteria with a total investment of nearly VND3,500 billion (US$164.5 million).

The site facilities include a cable car system linking Quy Nhon city and the site, a luxury resort, a five-star hotel, villas, a golf course as well as commercial and sports centres.

The complex is scheduled to be completed in 2017.

Many export agreements signed in China trip

There were 13 commitments and agreements between Vietnamese and Chinese enterprises signed in the trade promotion trip to China taking place on September 2-8.

According to the Ministry of Agriculture and Rural Development, after one week of promoting agricultural, forestry and seafood products in China, most Vietnamese enterprises joining the trip found partners and buyers to export products to this country. Enterprises of the two countries signed 13 memorandums and agreements, preparing for negotiations and the signing of deals in the future.

With this trip, both sides also signed a memorandum of understanding to cooperate on trade and investment promotion. Vietnam’s Department of Processing and Trade for Agro-Forestry-Fisheries Products and Salt Production and China’s Guangxi Province will organize seminars for businesses of both sides to boost investment cooperation in the agricultural and rural sectors.

Guangxi’s trade promotion center will send delegations to Vietnam every year to attend the International Agriculture Fair (AgroViet). Besides, the center said that it would register for 20 booths at AgroViet 2013 scheduled for this November in Vietnam.

Trade disputes on the rise

Alongside the increase in trade activities given the country’s global economic integration, trade disputes between Vietnam and importing countries are also rising, says a report of the Can Tho branch of the Vietnam Chamber of Commerce and Industry (VCCI) announced last week.

According to the report, trade disputes among Vietnamese exporting enterprises and other nations have picked up in terms of case numbers and commodities since 2010.

Local exporters faced two anti-dumping lawsuits and one anti-subsidy case in 2010, four anti-dumping lawsuits and two anti-subsidy cases in 2011 and nine anti-dumping lawsuits and three anti-subsidy cases in 2012.

Similarly, exporting firms have been charged with four anti-subsidy lawsuits and three anti-dumping ones this year.

Export products facing trade disputes in 2010 were hangers, air conditioners and polyethylene (PE) plastic bags, which increased to five in 2011 with rolled steel, yarn, footwear, steel pipes and carbon steel pipes. Meanwhile, four items suffered the charges from January to May this year, namely steel conduit pipes, stainless steel pipes, stainless steel and frozen warm water shrimp.

At a seminar on solutions for farm produce and seafood exports in Can Tho City last Friday, Nguyen Phuong Lam, director of the Legal Compliance Department of Can Tho branch’s VCCI, cited statistics on trade disputes handled at Vietnam International Arbitration Center (VIAC) showing commodity trading disputes posting the highest ratio, at over 70%, followed by processing and construction sharing 5% each. Investment cooperation disputes alone make up 4% of the case number settled by VIAC.

According to Lam, experiences from trade disputes shows the two main weak points of exporting enterprises - the lack of information on customers and importing nations and the poor knowledge of related laws.

“Studying customers is a very important factor but local exporters often forget to do so, with up to 80% of local firms failing to invest in this step,” he said.

When asked about solutions for exporters to cope with risks arising from trade disputes, Lam advised enterprises to pay attention to how and where the problems will be handled when signing export contracts. In particular, local firms need to master trade dispute law and international law or buy insurance to avoid risks in case of disputes, he added.

VSA warns of sanctions against Chinese steel

Given the massive imports of steel products from China due to a zero tariff, the Vietnam Steel Association (VSA) has written to the China Steel Association warning of petitioning anti-dumping duties on steel products from the neighboring country.

In a document sent to chairman Xu Le Jiang of the China Steel Association in the middle of this month, VSA underlined its concerns on the negative impacts of Chinese steel products on domestic production, especially cold-rolled steel coil (CRC), and boron-containing structured steel made by Chinese companies.

Pham Chi Cuong, chairman of VSA, complained in the document that Vietnam’s steel industry had suffered from the hefty volume of Chinese steel imported into the country at low and unfair prices. Vietnamese steelmakers deem this as the action of dumping by Chinese steel suppliers, he insisted.

VSA therefore asked the China Steel Association to supervise and take necessary actions to tackle the problem. “Otherwise, affected Vietnamese steelmakers will propose measures to cope with the consequences such as self-defense policy or anti-dumping actions against Chinese enterprises,” VSA said in the document.

In fact, the problem that Chinese construction steel products containing boron alloy has sparked outcries over trade fraudulence in Vietnam since 2009. At that time, taking advantage of the loopholes in regulations that allow alloy steel imports to enjoy a preferential tax rate of 0%, Chinese steelmakers have added boron to construction steel to dodge the higher tax on other ordinary steel products.

Given such trade fraudulences, the Ministry of Finance then revised the import tariff on hot rolled-alloy steel bars and rods for construction up to 10% from the previous level of 0%. Besides, construction steel products mixed with boron alloy have been classified as items subject to an import tax rate of 10% since 2012.

However, Chinese suppliers in making customs declarations have self-classified their products as steel for purposes other than construction to continue enjoy the 0% tariff, while in fact such products after entering the country are solely used for construction projects.

Boron-containing steel volume imported from China made up over 12% of total construction steel sale volume in the country as of July 31, at more than 350,000 tons compared to 427,000 tons for the whole year of 2012, according to the General Department of Customs.

Supposed that some 70% of such imported steel is used for construction, the Government lost a tax revenue of some VND420 billion in this year’s January-July, exclusive of corporate income taxes and VAT. On top of that, along with the current oversupply at home, the unreasonable preferential tax rate on Chinese steel imports has further thrown local steelmakers into difficulties.

Green businesses ask for more incentives

Although the Government has granted many incentives to encourage enterprises to apply advanced technologies and clean production mechanisms, European firms on Thursday still called for more preferential policies to help them maintain long-term business in Vietnam.

Speaking at the GreenBiz 2013 Exhibition and Conference that kicked off in Hanoi City on Thursday, Ngo Van Huy, director of Phillips Electronics Vietnam, said more incentives are needed to encourage consumers to switch to energy-saving devices.

Lighting usually accounts for 19% of energy consumption, Huy said. Of this demand, lighting for buildings, offices, schools, stores, streets and especially urban areas accounts for 75%.

Meanwhile, the ratio of energy demand for lighting in Vietnam is 25%. Therefore, sustainable lighting solutions can help reduce costs and minimize adverse impacts on the environment, he said.

Up to 80% of buildings in Vietnam still use outdated lighting technologies. Once replaced, the buildings may save up to 40% of energy consumption, Huy said.

But current incentives are not appealing enough.

“For instance, the import tariff for light-emitting diode (LED) lights is the same as that for normal products. Meanwhile, LED light import taxes in other countries in the region are much lower,” Huy said.

The European Union is in negotiations on a free trade agreement with Vietnam, suggesting best incentives for enterprises that apply green standards. Therefore, enterprises are expecting results of the negotiations to help green businesses enjoy better conditions here in the nation, Huy added.

Nguyen Cong Minh Bao, head of Sustainable Development at Holcim Vietnam, said the company has invested heavily in energy saving production, which has given it a competitive edge in price and quality amid the current downturn of the real estate market.

However, Holcim has yet to receive many incentives from the Government. The Government should introduce policies designed to encourage the corporate sector to adopt green solutions, Bao said.

Besides, the Government should take sanctions against environment polluters, as this will help speed up development of green technology, Bao added.

Speaking at the inauguration ceremony, Karl Falkenberg, Director-General for Environment of the European Commission, said the more Vietnam and Asia develop and lift their people out of poverty, the greater impact the huge waste from consumers will leave on the environment.

Upgrade of bauxite route lags behind schedule

After nearly two years of upgrading National Highway 20, the road used to transport alumina, the project is only 15% complete and cannot be fully ready by end-2014 as earlier scheduled but at least one year later.

Speaking to the Daily on Thursday, deputy general director Do Ngoc Dung of Cuu Long Corporation for Investment, Development and Project Management of Infrastructure said the lack of capital was hindering construction work.

He said the firm had used its own money totaling over VND230 billion to complete 15% of the workload while the remaining capital would come from loans of foreign lenders.

“Recently, the Government has agreed to guarantee a loan borrowed from a U.S. partner. The deal is expected to be signed late this month so that capital can be disbursed late this year to accelerate the progress,” Dung said.

With the current progress, the first phase of the National Highway 20 upgrade project cannot be completed until 2015.

At a working session with Lam Dong Province on Monday, Deputy Minister of Transport Nguyen Hong Truong said that while waiting for foreign loans, the Government had agreed to advance an additional VND300 billion for the project.

The project’s first phase stretching 123 kilometers from Dong Nai Province’s Dau Giay to Provincial Road 725 in Lam Dong Province’s Bao Loc was kicked off in December 2011 and scheduled for completion late next year. The project worth nearly VND4.47 trillion is implemented under the build-transfer (BT) format.

Meanwhile, the second phase starting from Provincial Road 725 to National Highway 27 will only get started when conditions are favorable, and will need an estimated VND3.06 trillion.

National Highway 20 is an axis route connecting HCMC and Dong Nai Province with Dalat City in Lam Dong Province. The facelift is primarily aimed for transporting alumina from Lam Dong to Dong Nai’s Go Dau port.

Three water plants in delta to call for PPP investments

People in the Mekong Delta will have more clean water in the coming years as three projects along the Hau River have been put forth to call for investment under the public-private partnership (PPP) format, said an official at the Ministry of Construction.

Tran Anh Tuan, deputy director of the Technical Infrastructure Department under the ministry, told the Daily last week that the three projects are Song Hau 1, Song Hau 2 and Song Hau 3 having first-phase capacities of 500,000, one million and 200,000 cubic meters per day respectively.

The average cost for a clean-water output of 500,000 cubic meters per day is estimated at some VND12 trillion, or nearly US$600 million, Tuan said.

He the Mekong Delta currently has 130 cities and towns and 20 industrial parks. Meanwhile, the region has around 160 water supply plants and stations which can meet 60-70% of the clean water demand for such urban areas.

“With three more plants awaiting investors, the demand of the entire region will be met,” said Tuan.

Song Hau I water plant located in Can Tho City will supply water for the city, Soc Trang Province, the west bank of the Hau River and the river’s northern area encompassing parts of Ben Tre and Tra Vinh provinces.

Meanwhile, water from the second plant - Song Hau II in An Giang Province - will be supplied for the Mekong Delta Focal Economic Zone, including Can Tho, An Giang, Kien Giang and Ca Mau and some sections of Hau Giang and Bac Lieu provinces.

The third plant will feed An Giang and Kien Giang, especially urban areas along the borderline with Cambodia.

Tuan said some investors have shown keen interest in the projects, but the Ministry of Construction is waiting for more candidates, who should contact Tuan’s department for information.

According to the master plan on water supply for the Mekong Delta region approved by the Government in 2010, the total output by 2020 should reach some 3.5-4 million cubic meters a day, including one million cubic meters for industrial parks. In the 2015-2020 period, a regional network of water supply facilities should be constructed to ensure sufficient clean water for the whole region.

Cai Mep-Thi Vai Terminal fails to find operators

Cai Mep-Thi Vai International Terminal in the southern province of Ba Ria-Vung Tau has yet to find port operators since its opening in late January.

According to the Vietnam Maritime Administration, the agency is judging bidders to choose an exploiter for the Thi Vai General Port. It is considering another bidding round to lease Cai Mep Container Port.

A representative of the agency told the Daily that there are three firms bidding for the Thi Vai General Port. They are PetroVietnam Technical Services Corporation, Gemadept Corporation and a joint venture of Saigon Port One Member Co. Ltd., Vinacommodities Joint Stock Company and Vietnam Salt Group Joint Stock Co.

The process has been speeded up to find an exploiter for the Thi Vai Port as soon as possible, said the representative.

Recently, A.P Moller Maersk, which is exploiting Cai Mep International Terminal (CMIT),

has presented to the Vietnam Maritime Administration a project combining exploitation of the CMIT with Cai Mep International Container Terminal (CMICT).

Concerning feasibility of the project, Nguyen Nhat, director of the Vietnam Maritime Administration, said that the partner needs to make clear some issues so the agency can have some foundation to evaluate the project.

Earlier, the Ministry of Transport approved the Cai Mep Container Terminal and Thi Vai General Port leasing project. For Cai Mep port, the package price is US$219.5 million and exploitation time is 30 years.

If the operator pays rent every year, it will be subject to other rental levels calculated by many factors such as revenue and profit.

The price of the Thi Vai Port package is US$130.5 million and the exploitation time will be 30 years. Exploiter selection will be made through a competitive bid.

The Cai Mep-Thi Vai International Terminal includes two areas, the Cai Mep Container Terminal and Thi Vai General Port. The former will be able to receive 100,000 DWT vessels while the latter can receive 50,000 DWT vessels.

Total investment cost for Cai Mep-Thi Vai International Terminal is nearly VND13 trillion sourced from Japanese aid and Vietnam’s state budget.

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