First private Vietnamese investment project in US

A Vietnamese home furnishing product maker in the southern province of Vinh Long launched its first US-based investment in Arkansas’ Morrilton City on November 22.

The Vinh Long Import-Export Manufacturing Joint Stock Company (SJC) produce a wide range of home furnishing products made from natural fiber and mixed with industrial materials.

Its major products include boxes, bags, baskets, placemat, furniture, decorative accessories, and carpets.

The US$5 million project in Morrilton city will manufacture kitchenware tailored to the North American market.

Arkansas Governor Mike Beebe welcomed Vinh Long’s decision to expand project in the city, saying it will help boost the city’s economic development.

Vietnamese Ambassador to the US Nguyen Quoc Cuong said the project is yet another demonstration of the fruitful economic and trade ties linking Vietnam and the US.

Based in Vinh Long city, the company’s 2012 revenue exceeded US$20 million. It is currently employing 10,000 workers.

Dunkin' Donuts enters Vietnam

Dunkin' Donuts, an American global doughnut company and coffeehouse chain based in Canton, Massachusetts, has opened a restaurant in Ho Chi Minh City, marking its debut in Vietnam.

This is the result of a franchise deal signed in early 2013 between Dunkin' Donuts and its partner Vietnam Food & Beverage Services Co. Ltd. (VFBS) under the Imex Pan Pacific Group (IPP Group).

At the inaugural ceremony, John Varughese, Vice President of Dunkin' Brands in the Middle East and Southeast Asia and Australia, revealed a Hanoi store will open doors to doughnut and coffee connoisseurs in the coming months.

Dunkin' Donuts has established 10,800 restaurants across the globe, including nearly 900 in the Philippines, 300 in Indonesia, and 240 in Thailand.

Over US$1.4billion for central region expressway

A ground-breaking ceremony was held in Quang Ngai province on November 24 for a 140-km expressway linking Danang city and Quang Ngai in the central region.

The project will be built at a total cost of US$1.475 billion in official development assistance (ODA) sourced from the Japan International Cooperation Agency (JICA), the World Bank (WB), and the Vietnamese Government.

Once completed in 2017, the four-lane expressway will enable vehicles to travel at a design speed of 120km/h.

The road will play a key role in connecting large economic centres in Danang to Chu Lai economic zone (EZ) in Quang Nam, Dung Quat EZ in Quang Ngai, Nhon Hoi EZ in Binh Dinh, and the East West Economic Corridor.

The route is also expected to help reduce traffic congestion and fuel economic development in the central region.

Addressing the ceremony, Deputy Prime Minister Nguyen Xuan Phuc urged investors and bidders to work closely with local authorities to ensure the project runs to schedule in a safe and efficient manner.

He also asked local authorities to create favourable conditions for displaced residents to stabilize their lives in the new resettlement areas.

November CPI kept at low level

Vietnam’s consumer price index (CPI) rose 0.34% in November against the previous month and 5.78% from a year ago, according to the General Statistics Office (GSO).

The low November figure brought the eleven-month index to 5.54%, and the entire year’s CPI to estimated 6.2-6.3%.

This will help keep the country’s inflation rate at the lowest level ever seen in the past decade.

The GSO said that the CPI edged up 0.29% in urban areas and 0.37% in rural areas in November. The Mekong Delta city of Can Tho had the highest price hike of 0.57%, followed by Hanoi (0.26%), HCM City (0.17%), and Danang city (0.16%).

Goods items experiencing high prices in November included food and foodstuff, healthcare services, building materials, garments, footwear, beverage, tobacco, and tourism services.

Post and telecommunications services saw a CPI reduction of 0.2%, and transport costs also reported a decline of 0.34%.

Gold prices hit record low

Gold prices on the domestic market have declined sharply to around VND35.7 million/tael – a record low since June 28. However, they are still VND4.2 million/tael higher than those on the global market.

At the November 25 trading session, DOJI Group offered VND35.78-35.84 million/tael, VND90-100,000/tael lower than two days ago, while Phu Nhuan (PNJ) gold was traded at VND35.79-35.85 million/tael.

Gold prices on the Vietnamese market are forecast to drop to less than VND29 million/tael as ever recorded last June.

On the world market, gold was listed at US$1,242.4/ounce, close to the four-month lowest level of US$1,236/ounce reported earlier last week.

EIU affirms Vietnam’s promising economic growth prospects

A London based reporter of Vietnam News Agency on November 25 quoted the Economist Group’s Economist Intelligence Unit (EIU) assessment on Vietnam’s promising prospects for economic growth in Vietnam.

The EIU said after several years of achieving low economic growth, the Vietnamese economy has showed signs of recovery with increasing investment in the manufacturing sector. Although there remain shortcomings in terms of macro-economic instability, Vietnam’s competitive capacity has renewed optimism about its economic growth in 2014 thanks to a sharp rise in foreign direct investment and export turnover.

The Communist Party of Vietnam is fully aware of the need to pay due attention to job training for young labourers and improving people’s living standards along with maintaining political stability.   

One of the first measures taken by the Vietnamese Government is to increase the maximum salary since the beginning of 2013. The next pay rise will come soon when inflation is well under control.

The foreign-invested sector in Vietnam has continued to generate jobs with more FDI inflows in the electronics and assembly industry, helping Vietnam produce highly valued products. Many companies like Panasonic, JBL, Fuji Xerox and Nokia have poured millions of dollars into their projects in Vietnam. Especially, Samsung group from the Republic of Korea (RoK) is expected to invest up to US$2 billion in building a plant in the northern province of Bac Ninh.

Meanwhile, some the world’s leading retailers also want to penetrate the potential market. France’s Auchan retail group has a plan to come back to Vietnam in 2014 with an estimated capital of US$500 million for operation in the next ten years.

Vietnam has attracted many investors in the manufacturing sector for exports as the country has advantages over other nations in the region in terms of transport infrastructure, input materials and finished products.

Vietnam also has a wide network of electricity supplies to provide power for 90 percent of its population.

The growing investment in highly-valued industries shows that Vietnam’s diverse export activities can maintain a high pay rise for laborers. In the future, the Trans-Pacific Partnership (TPP) which involves the US and some Asia-Pacific nations will bring privileges to Vietnamese exporters, including an easy access to high-income markets. The growth rate is forecast at 5.3 percent this year and the Vietnam National Assembly has agreed to set the rate of economic growth at 5.3 percent in the coming years.

With signs of improvement in manufacturing and business, as well as in the foreign invested sector, there is high hope about Vietnam’s economic growth in the next year despite risks which might be caused by bad debts in the banking sector.

Vietnam joins Asia-Pacific food expo

Vietnamese businesses are showcasing a wide range of farm products, food and drinks at the 2013 Asia-Pacific Food Expo (APFE) in Singapore from November 21-25.

This is a good opportunity for local businesses to seek trade partners, distributors and consumers in Singapore and other regional countries.

The event, the largest of its kind in Singapore has involved leading exhibitors in the food and beverage industry, such as China, the Republic of Korea, Japan, Thailand, Malaysia, Australia, Indonesia, and the Philippines.

Steven Ng, a member of the APFE organizing board, highly valued Vietnamese products and hoped that more exhibitors will come from Vietnam to similar events.

Singapore is a lucrative market for Vietnam to increase its exports and penetrate other countries in the region and the world.

 5.8% GDP target for 2014 realistic?

Vietnam is set to achieve a GDP growth rate of 5.8% in 2014, a bit higher than in 2013, and many lawmakers and experts believe this target is ambitious, but feasible.

The target has been set by the National Assembly after weighing up the pros and cons of the domestic and global landscape.

Evidence suggests that despite a significant period of difficulty, Vietnam’s macro-economy has stabilised, inflation has been kept under control and the global economy is expected to recover in 2014.

The government’s measures to ease business difficulties and support people’s lives such as tax breaks, lowered interest rates, and stable currency exchange rate, have paid off, creating the prerequisite for the economy to bounce back in 2014.

“The recovery of the global economy will bring impetus to the Vietnam economy,” says economic expert Nguyen Minh Phong. “Several policies on tax and interest rate cuts introduced in late 2013 will continue to fuel business production and sharpen their competitiveness. In addition, the government’s other commitments to the National Assembly will help the country achieve the GDP target.”

Ministry of Planning and Investment (MPI) statistics show the national economy is gaining momentum, with GDP growth increasing steadily on a quarterly basis, from 4.76% in Q1 to 5% in Q2 and 5.54% in Q3. The Q4 figure is estimated at between 5.6-5.7% to bring the entire year’s growth rate to 5.4%.

In a report to the current National Assembly session, Prime Minister Nguyen Tan Dung highlighted the important factors behind economic recovery in 2014, stating that the government will continue with flexible monetary, tight fiscal, and appropriate interest rate policies along with tight inflation controls and the ironing out of existing problems for businesses.

Dr Tran Hoang Ngan, a member of the National Monetary and Financial Policy Advisory Council, says the government has identified barriers against national economic growth and has taken steps towards removing them. Its resolutions on facilitating business operations have been implemented and reviewed gradually to overcome weaknesses.

The government has also prioritised finalising institutions and laws to accelerate economic restructuring – a compulsory requirement for continued growth in 2014-15.

“It is imperative to build on the achievements we have made in 2013, including controlling inflation, maintaining low interest rates, fixing a steady currency rate and keeping trade deficit at around 6%,” says Ngan.

Dr Tran Du Lich, former director of the Ho Chi Minh City Institute of Economics, believes lowering lending and deposit rates, together with other macro-economic policies, will create optimum conditions for economic growth.

The crux of the matter, according to Lich, is realising major tasks and solutions the National Assembly has approved in its resolution on socio-economic development for 2014, with priority given to improving administrative reform to create a sound investment environment.

“We need a transparent mechanism for controlling the macro-economy. Vietnam’s competitiveness index remains lower than other regional countries, and our task is to accelerate administrative reform to support businesses,” he said.

However, there is growing concern about high inflation, commercial bank’s noon-performing loans, and business bankruptcy in 2014 that will slow down economic recovery.

The government has identified these challenges and introduced viable solutions for keeping the economy on the right track.

FDI flow into Vietnam surges

The total newly-registered and additional FDI capital poured into Vietnam in the first 10 months of this year hit US$19.2 billion, a year-on-year increase of 65.5 percent, outdistancing this year’s target of US$13-14 billion.

According to statistics from the Ministry of Planning and Investment’s Department for Foreign Investment, during the January-October period Vietnam licensed 1,050 new projects totalling more than US$13 billion, up 79 percent from last year.

Meanwhile, US$6.16 billion was added to 393 ongoing projects, a year-on-year rise of 42.5 percent.

The growth is attributable to efforts by the Government, ministries and localities in improving the business environment and simplifying administrative procedures to attract more foreign investors.

Vietnam also remains an attractive destination for investors thanks to the competitiveness in production cost, abundant labour force and a stable macro economy.

However, Chief Representative of Alstom Group in Vietnam Henri Noirhomme suggested that to keep current investors and attract new ones, Vietnam should upgrade its infrastructure and continue rationalising its administrative procedures.

He also asked banks and financial organisations to focus on solving bad debts.

RoK funds hi-tech zone project in Can Tho

The Mekong Delta province of Can Tho broke ground for a 11,000 square metre Korean-invested technological incubators centre on November 23.

Funded by the Government of the Republic of Korea (RoK), the new zone will form part of Can Tho’s Tra Noc 2 Industrial Park.

Deputy Prime Minister Vu Van Ninh told launch ceremony attendees the project is the result of a bilateral cooperation programme on nuclear power, energy, and industry between Vietnam and the RoK.

It will fuel technology development and encourage business investment in local agriculture and fisheries, he said.

The Deputy PM asked Vietnamese and RoK investors and contractors to coordinate closely to ensure the project will take shape in 2014 as planned.

The zone is scheduled to run trials one year later as personnel training and technology transfer processes continue.

Korean experts will help Can Tho install necessary equipment and train local engineers. A number of Vietnamese officers will visit the RoK for additional professional development.

ADB provides US$50 million loan to support SMEs

The Asian Development Bank (ADB) has committed a US$50 million concessional loan to boost the development and competiveness of small and medium-sized enterprises (SMEs) in Vietnam

A document to this effect was signed in Hanoi on November 22 between representatives of the bank and the Vietnamese government.

“While the Government made great efforts to enhance policy reforms to support the creation, survival and growth of SMEs, more needs to be done to foster a greater scale of SME development essentially required for the country to achieve more sustainable and inclusive growth,” said ADB Country Director for Vietnam Tomoyuki Kimura.

“ADB firmly supports the Government to successfully manage the continued reform agenda aimed at improving the business environment for the development of SMEs and the private sector in Vietnam,” he added.

The loan has a duration of 25 years with an annual interest rate of 2%.

It will support SME development efforts in Vietnam through streamlined business processes, improved access to finance, programmes to support women-owned enterprises, and a level playing field for private enterprise development.

The Vietnamese Government has assisted the development of SMEs with a combination of landmark policy reforms since approval of the Enterprise Law in 2000.

As a result, by the end of 2011, the number of registered enterprises in Vietnam has grown to some 550,000, up from 14,500 in 2000, with SMEs representing nearly 97% of the country’s total number of firms, and 46% of gross domestic product.

The domestic private sector accounted for 59% of total employment in 2011, up from 29% in 2000.

SMEs are now considered the key generators of employment and income, and drivers of growth and poverty reduction in the country.

Vietnamese, Japanese localities strengthen cooperation

Vietnam’s Thua Thien-Hue province and Japan’s Kyoto prefecture have issued a joint statement on the establishment of friendly and cooperative relations between the two localities.

The document was signed at a working session between Chairman of the Thua Thien-Hue provincial People’s Committee Nguyen Van Cao and Kyoto prefecture’s Governor Keiji Yamada on November 22 during the latter’s visit to the Vietnamese locality.

The two sides committed to strengthening the relations for mutual benefits while respecting each locality’s characteristics, exchanging information and cooperating in education-training, preservation of cultural values, tourism and trade.

Cao said Japan is the most important cooperation partner and ODA supplier of Thua Thien-Hue.

The country has so far provided US$500 million in ODA for the province, he said, adding that eight Japanese partners have implemented 20 cooperative projects, mostly in culture, in the locality.

The two sides have also enjoyed good relations in education and training, human resource training and health care, Cao said.

The Chairman said he hopes to receive Japanese ODA for the building of an international university in the province and suggested that the two localities focus their cooperation on cultural heritage preservation, cultural exchange, and training.

Governor Keiji Yamada pledged to work hard to sign an agreement on cooperation with Thua Thien-Hue next year.

Mongolia welcomes Vietnamese investors

Mongolia keeps its door open to Vietnamese businesses in order to boost bilateral economic and trade cooperation, Mongolian President Tsakhiagiin Elbegdorj said at the Vietnam-Mongolia Business Forum in Ho Chi Minh City on November 22.

The President, who is on a State visit to Vietnam from November 21-24, said his country boasts a vast land area and a developed animal husbandry sector, so Mongolia and Vietnam can cooperate in meat trading, as well as in other sectors of great potential in Mongolia, such as coal mining, oil exploration and tourism.

He added that Mongolia, which borders Russia and China, can serve as a base for Vietnamese businesses to expand into these two giant markets.

The President emphasized that his country has issued the Investment Law with many favourable policies for foreign investors.

Deputy Chairwoman of the HCM City People’s Committee Nguyen Thi Hong said Mongolia and Vietnam in general and HCM City in particular can boost cooperation in hi-tech husbandry, farm produce processing and export, rice production and tourism, taking into account their respective strengths.

She noted HCM City’s exports to Mongolia reached over US$1.5 million in the first half of this year, which remains modest compared to the two sides’ potential.

The forum provided a good chance for Mongolian businesses to study Vietnamese market, especially HCM City, and for Vietnamese enterprises to seek business opportunities with Mongolian partners, Hong said.

She affirmed that HCM City always welcomes Mongolian leaders, businesses and tourists to the city.

Vietnam, RoK cultivate trade ties

Ho Chi Minh City hosted a November 22 seminar designed to encourage cultivating  trade ties between Vietnamese enterprises and their colleagues in the Republic of Korea (RoK).

Vietnam is one of the RoK’s largest and important trade partners with last year’s two-way trade turnover exceeding US$21 billion.

Vietnam’s October RoK market export turnover totalled US$5.49 billion—up 25% compared to October 2012—while October imports rose 40% to US$17.26 billion.

Vietnam exports textiles and garments, crude oil, coal, seafood, and timber to RoK customers. Its imports include computers, electronics, machinery, and automotive tools.

Vietnamese enterprises used the seminar to promote products made in Vietnam and discussed ways for exporters to narrow the country’s trade deficit with the RoK.

Korean Importers Association Chairman, Shinn Tae-Yong noted the 8,000 importers from his association are responsible for over 80% of the RoK’s imports.

Korean companies have become interested in Vietnam’s raw agricultural materials, processed food, handicrafts, and household furniture, he said.

Shinn Tae-Yong believes the seminar offers both countries’ business communities a chance to contribute to raising bilateral trade turnover by expanding mutually beneficial trade and investment relationships.

Vietnam’s economic restructuring under discussion

Local and international experts attended a November 22 forum in Hanoi to discuss measures for accelerating and broadening Vietnam’s ongoing economic restructuring.

Themed “Growth Recovery and Economic Restructuring: Opportunities and Challenges”, the Central Institute for Economic Management (CIEM) and the German Development Cooperation GIZ organised the forum as part of its Macroeconomic Reform Programme.

Participants assessed Vietnam’s current economic reality and proposed a number of new policies concerning the country’s reform and recovery ambitions in restructuring State-owned enterprises (SOEs), public investments, and the financial system.

Experts hope their suggestions will serve policy makers and state management officials as references during the continuing process of reform.

Acting CIEM President Nguyen Dinh Cung said the master plan for economic restructuring defines a relatively rigid framework for growth model transformation. Progress is still in its initial stages.

“There remain many difficulties and challenges in implementation,” he said.

Dr. Cung emphasised the pressing need to shift the focus of economic restructuring policies from aggregate demand management to supply-side reform solutions.

GIZ Chief Technical Advisor Dr. Michael Krakowski said its Macroeconomic Reform Programme intends to strengthen Vietnam’s market-oriented institutions in the interests of long-term sustainable economic development.

He believes the forum’s outcomes are valuable contributions to Vietnam’s sustainable economic growth reforms.

Ten months’ UK exports hit US$3.16 billion

Vietnam Customs and the General Statistics Office (GSO) report Vietnam’s export turnover to the UK stood at US$3.16 billion ten months into 2013, a 32.2% improvement on the same period last year.

Vietnam’s key UK exports include telephones and spare parts, footwear, garments and textiles, timber, and coffee.

Telephone and component exports’ US$1.12 billion in revenue was 47.9% higher than a year earlier and accounted for more than 30% of the country’s total UK export revenue.

Footwear’s US$445.8 million in revenue marked a 9.3% rise, while garments and textiles earned 5.3% more or US$392 million.

Transport vehicle and spare part exports, with US$65.4 million in revenue, enjoyed the highest annual growth rate of 109.8%.

Export earnings growth was also seen from seafood (26.8%); pepper (23.7%); confectionery and cereal products (27.2%); plastic products (4.1%); rattan, bamboo, and carpet (19%); and wood and wooden products (15.9%).

Confectioners become hungry for Tet

Leading domestic confectioners including Bibica, Kinh Do, Trang An, Biscafun and Hai Chau have basically completed plans to prepare goods for the upcoming Tet (Lunar New Year), which falls on January 31, 2014.

Despite forecasts that purchasing power this Tet will not be as high as in previous years, major confectioners still plan to increase production by 5-20 per cent over the last Lunar New Year season.

Nguyen Quoc Hoang, deputy general director of the the Bien Hoa Confectionery Corporation, or Bibica, told Dau Tu (Vietnam Investment Review) that they plan to supply nearly 1,300 tonnes of confectionery by the end of this year and for Tet, up 10 per cent over the previous year.

Its wide distribution network of 110 distributors and 65,000 sales points has enabled the company's products to be present in all areas of the country, he said.

The Kinh Do Confectionery Joint Stock Company has said it plans to produce 4,500 tonnes of confectionery for this Tet, a year-on-year increase of about 20 per cent.

The company, which accounts for 30 per cent of the domestic confectionery market, has also said it expects to keep prices stable for this Tet.

Besides traditional confectionery lines, the company will continue providing to the market top-ranking products like Korento cookies and many other kinds of cake and candy, it said.

The Quang Ngai Confectionery Factory (Biscafun) has completed a high-grade product catalogue for Lunar New Year 2014.

A representative of the Trang An Confectionery Joint Stock Company in Ha Noi, also confirmed that they have completed preparation of goods for this Tet season.

The company is committed to not increasing prices since confectionery production costs have been somewhat stable this year, the representative said.

With consumers tending to tighten spending amidst the ongoing economic crunch, confectionery producers have focused more on launching products with attractive designs, good quality and reasonable prices that can serve as Tet gifts.

Industry insiders are hopeful that with prices 20-40 per cent cheaper than imported products, and having the advantage of having clear origins, local confectionery products will dominate the market this Tet season.

They say the bigger domestic firms have invested in modern lines and good quality raw material to make high-quality products. Locally-made confectionery also is delicious, good-looking and hygienic, they add.

Rising shrimp exports boost industry growth

Shrimp breeders from central and southern provinces are pleased that exports and prices are on the rise as the local tra fish industry had been in troubled waters.

Over the last two weeks, shrimp have been selling between VND190,000 (for 20gr shrimp) and VND320,000 (for 50gr shrimp) per kg in the Mekong Delta.

Ngo Thi Hau from Phuoc Long Commune in Bac Lieu Province said shrimp prices were VND50,000 per kg higher than last year.

Damages caused by pests to the local shrimp-breeding industry have been reduced greatly, according to figures released at a conference held by the Ministry of Agriculture and Rural Development in Can Tho earlier this month.

The areas under shrimp breeding affected by pests in the first 10 months of the year fell by half compared with the same period last year.

This year Ca Mau Province, the largest shrimp breeding locality in Viet Nam, has 296,000ha under shrimp breeding, including 5,400 ha under intensive culture.

As of early October, the province attained total production of 242,700 tonnes of shrimp, accounting for 85.2 per cent of the year's target.

The delegate from the Mekong province of Ben Tre said the transfer of areas under coconut cultivation into shrimp-breeding ponds, insufficient investment in breeding facilities, and the poor quality of breeding shrimp were among the main cases that made the breeding industry less productive.

Pham Khanh Ly, deputy chief of the aquaculture division under the Ministry of Agriculture and Rural Development, said the shrimp breeding sector had improved from two years ago when many shrimp breeding areas across the country were hit by pests, causing big losses to farmers.

This year, owners of many shrimp breeding ponds have earned high profits as the demand for Vietnamese shrimp from big markets such as the US, Japan and South Korea has been on the rise, said Ly.

Shrimp exports significantly contributed to the export turnover of US$5.5 billion attained by the local seafood sector in the first 10 months of 2013, an increase of 7.3 per cent compared with the same period last year.

Shrimp exports are expected to reach $2.8 billion for 2013, up by 27 per cent over 2012, and an increase of $300 million to $400 million compared with targets set earlier this year.

VASEP said they were "significant figures" as the country saw slumps in exports of a number of other seafood products over the same period, including a decrease of 2 per cent scored by tra fish, a 4.5 per cent decrease by tuna, and a 12.3 per cent decrease in crab exports.

HCM City faces fines

HCM City is facing fines of VND2.5 billion ($119,050) per day for delays in site handover for the Metro Line No 1 that would link Ben Thanh Market in District 1 and Suoi Tien Tourism Park in District 9.

Construction of the Metro Line No 1 began on August 28 last year. It was scheduled to become operational in 2018.

Under a contract signed with the consortium of Japan's Sumitomo Corporation and Vietnam's Civil Engineering Construction Corporation No 6 (Cienco 6), the city should have handed over the cleared site to the contractor at the end of last year.

The HCM City Management Authority for Urban Railways (MAUR) has extended the handover schedule on several occasions, with the last one having been set for September 30. But now some 100 households remain living on the site.

In an announcement on the project's construction progress released in late October, the city's People's Committee said the belated site clearance was mainly in Thu Duc District and Di An Town in Binh Duong Province.

According to the deputy chief of MAUR, Le Hong Ha, the city authority has been negotiating with the Sumitomo - Cienco 6 consortium to reduce the fines set for delays in site handover.

He said it was difficult for HCM City to pay the VND2.5 billion/day fine as stated in the contract.

To hand over the site to the contractor as soon as possible, the city's authorities have asked Thu Duc District and Di An Town to accelerate site clearance compensation and re-settlement formalities for households living on the site.

The nearly 20-km-long Metro Line No 1 would pass through the city's districts of 1, 2, 9, Binh Thanh and Thu Duc, and Di An Town of Binh Duong Province.

The first 17.1-km of the line is an overhead section that runs from Ben Thanh Market in District 1 to the Suoi Tien area in District 9.

The 11-station overhead section, from Ba Son Shipyard in District 1, will run along Van Thanh Park and the Tan Cang area in Binh Thanh District, and Ha Noi Highway and Suoi Tien Park. This construction is the first of the project's three packages.

Under a contract signed with MAUR, the consortium of Sumitomo - Cienco 6 will design, survey, execute, supply equipment, test, operate, offer utility services, and maintain stations of the 17.1-km overhead section of HCM City's Metro Line 1.

The package is worth $560 million.

The Metro Line No 1 also consists of a 2.6-km underground section connecting Ben Thanh Market and Ba Son Shipyard, with three undergound stations. It is divided into three packages.

The other packages are for construction of an underground section between Ben Thanh Market and Ba Son Shipyard and for mechanical-electrical devices and maintenance.

Line 1 will cost $2.2 billion, with 83 per cent of the capital coming from Japanese Official Development Assistance and the rest coming from the city budget.

Homebuyer incentive

Commercial banks taking part in the Government's VND30 trillion ($1.42 billion) stimulus package have granted loans of VND333.1 billion ($15.86 million) to 939 household and individual clients.

According to the State Bank of Viet Nam (SBV), as of October 31, loans of VND220.9 billion ($10.52 million) from the package had been disbursed to 905 homebuyers.

Vietcombank has committed loans of VND109.4 billion to 309 clients, Vietinbank VND82.3 billion to 253 clients, BIDV loans of VND 101.9 billion to 234 clients, Agribank VND26 billion to 93 clients, and MHB VND13.5 billion to 50 homebuyers.

SBV said BIDV, Vietinbank and Agribank have also signed contracts to provide loans of VND870.4 billion ($41.45 million) from the package to seven property firms in HCM City, Thua Thien - Hue, Can Tho, Bac Ninh, Hai Duong and Da Nang. These include disbursements of VND122.6 billion ($5.84 million) to four of these property firms.

SBV also urged commercial banks under the VND30 trillion stimulus package to report on any hindrances facing homebuyers under the programme.

In related news, the HCM City People's Committee has directed district, commune and ward administrations to simplify formalities for homebuyers in their respective localities.

The directive comes following residents' complaints about cumbersome procedures that prevent them from accessing preferential loans. These loans are designed to help low-income people buy their own homes, and are also expected to enable a real estate market revival.

According to Nguyen Hoang Minh, deputy director of the SBV's HCM City branch, as of September, 137 individual clients in HCM City had signed contracts for loans of VND78.46 billion ($3.74 million). Of this, VND22.6 billion ($1.08 million) had been disbursed to 58 applicants, he said.

Digital advertising set to grow

Experts believe the trend of using digital advertising including online and mobile advertising will pick up in the near future.

According to Nguyen Tien Dung, manager of the digital section of Maxus Vietnam under GroupM, advertising on social networks has become a popular trend as many brands have deployed their advertising campaigns this way.

There are over 30 million Internet users in Vietnam, of which 86% are using social networks, Dung said at a seminar on advertising held by the Leading Business Club in HCMC on Wednesday, adding that 81% of such social network users have the habit of sharing shopping activities with their friends.

Facebook is still the most popular social network in Vietnam with around 14 million users, with 11 million users accessing the network through mobile phones. Users spend an average of 40 minutes browsing this page daily.

Two actions that local Facebook users usually perform are to press the button “Like” and make comments, while in other developed markets, Facebook users often check in, meaning they inform their friends when they visit certain locations and upload pictures, Dung remarked.

However, Dung noted that it was not easy to make advertising on social networks and digital advertising effective. Most local enterprises have made inconsiderable investments in digital advertising, which accounts for less than 5% of the total budget for marketing, he told the seminar.

At the seminar, Phan Quoc Cong, general director of the International Consumer Products Corporation (ICP), said that his firm began paying attention to advertising on the Internet some years ago due to the rising number of Internet users then.

The marketing budget at ICP is divided into the ratios of 70%, 20% and 10%, Cong informed. The 70% volume has been carried out on local media, especially television, and has proved its efficiency, while the 20% volume is set aside for new channels whose efficiency is measurable and the remainder is used for new campaigns but its efficiency has yet to be measured, he stated.

The fact that an advertising campaign of ICP on television costs US$1 million is normal, Cong asserted. But he said the cost would be only one-tenth, or around US$100,000, if the enterprise launched the campaign on the Internet, with the sum used for many different processes, ranging from creation and production to advertising.

Le Ho My Duyen, who is in charge of the high-end brands of ICP, argued that advertising on social networks should not be separated and that it should be integrated with plenty of other traditional channels, from television, newspapers, selling points to other related activities.

According to the market research company eMarketer, advertising sales on the Internet in Vietnam was about US$26 million in 2012, making up 2.9% of the total sales of the whole market. The firm expects advertising sales on the Internet of the nation to reach roughly US$32 million this year and US$45 million in 2015.

Advertising sales on local media in Vietnam posted nearly VND11 trillion in the first half of this year, with television holding up to 92%, Kantar Media Vietnam reports. The figure, however, is exclusive of sales of digital advertising.

 PVN in talks to boost joint oil exploration with neighbors

The national oil and gas group PetroVietnam, or PVN, is in talks with partners in the Southeast Asian countries of Thailand, Cambodia, and Cambodia to develop joint oil exploration in overlapping waters, an executive said.

Nguyen Quoc Thap, deputy general director of PVN, told a press briefing in HCMC on Wednesday to introduce the 10th Ascope Conference and Exhibition that

the related sides are in talks to establish the boundaries of the joint oil exploration areas. The exhibition, organized every four years, will take place in HCMC on November 28-30.

PVN joined Ascope in 1996, and ever since, the group has cooperated with other regional partners to establish boundaries of joint oil exploration areas, Thap said.

The overlapping waters between Vietnam and Malaysia have been established and turned into a joint oil and gas exploitation area. The cooperation between PVN and Malaysia’s Petronas has borne fruit, with the first oil and gas products exploited there since 1997, Thap told the Daily.

In the coming time, PVN will continue negotiations with other countries on the joint oil tapping programs, such as Thailand, Brunei and Cambodia in waters southwest of Vietnam, and with China in the Northern Gulf.

“PVN is stepping up talks with (partners from) these countries, and it is expected that these joint exploitation projects will be realized in the near future,” Thap said.

Asked to clarify the areas of cooperation, Thap said the joint programs would include exploration and exploitation of oil and gas, petroleum processing, construction of oil and gas pipelines, oil trade, and oil and gas technology among others.

He also referred to the gas pipeline linking Vietnam and Malaysia as well as the gas pipelines between Thailand and Myanmar, Singapore and Indonesia, and Singapore and Malaysia. Such gas pipelines will be expanded to connect several countries in the region rather than between two countries alone.

According to Thap, ASEAN countries have recently agreed to renew the ASEAN Memorandum of Understanding on the Trans-ASEAN Gas Pipelines by another ten years to 2024 after the original one expires in May next year.

The 10th Ascope Conference and Exhibition will have the participation of 120 oil and gas companies, showcasing technologies and equipment in the oil and gas industry.

The ASEAN Council on Petroleum (Ascope) was established in 1975 and now groups ten members. These are Petroleum Brunei, Cambodian National Petroleum Authority, Indonesia’s Pertamina, Lao State Fuel Corporation, Malaysia’s Petronas, Myanmar Oil and Gas Enterprise, Philippine National Oil Company, Singapore’s Keppel Group, Thailand’s PTT, and Vietnam PVN.

Foreign-funded social assistance projects approved

The PM has approved the project on Strengthening Viet Nam Social Support System in 2013-2016, which is sponsored by the United Nations Development Program (UNDP).

The project will be carried out from November 2013-December 2016 by the Ministry of Labor, Invalids and Social Affair.

The total expenditure for the project is worth US$2.3 million, of which US$2 million is non-refundable aid and the corresponding capital is US$300,000.

The project aims to realize Resolution No. 15/NQ-TW dated June 1, 2012 on a number of issues relating to social policies for the 2012-2020 period.

The PM has also ratified the project on Improving urban transportation in Ho Chi Minh City, which is funded by the World Bank (WB).

The project's funding of US$155.85 million will include US$ 142.25 million from the International Bank for Reconstruction and Development and US$13.6 million from the Ho Chi Minh City’s budget.

The project aims to help passengers get access to bus rapid transit (BRT), guarantee that the BRT operate effectively, increase the effectiveness of the project and reduce the density of circulation of private vehicles.  

The PM also allowed relevant agencies to negotiate with the WB on an Aid Agreement and legal documents relating to the Viet Nam Social Assistance System Strengthening Project.

The negotiation is expected to be held at the end of November 2013 in Ha Noi.

The State Bank of Viet Nam will host and work with other related ministries and agencies to complete necessary procedures for the negotiation.

 Vietnam still depends on shoe material imports

Despite a sizeable leather shoe exporting country, domestic producers still heavily depend on material imports as they fail to find out quality supplies in the nation.

Lien Anh Co. Ltd. in Binh Duong Province has suffered a damage of US$100,000 for importing a batch of substandard leather. However, it still has to import another leather batch for production as domestic material supplies have poor quality.

Depending on material imports is not a wise solution, so the enterprise has plans to buy a tanning factory in Dong Nai Province and make investment in technology to secure materials for production, Truong Thi Thuy Lien, deputy general director of Lien Anh Company, told the Daily on Wednesday.

Local tanneries have for long offered low-quality cow skin that fail to meet export standards. Meanwhile, it is also difficult to control quality of imported hide for tanning in the country.

Many other shoe producers have also depended on imported materials. To get high-quality materials for production, they have to import leather from Brazil, Italy and the U.S. at high prices. As a result, prices of final products will soar up, cutting into their competitiveness.

Diep Thanh Kiet, deputy chairman of the Vietnam Leather and Footwear Association (Lefaso), said that there are over 400 leather shoe companies in the country, making great contribution to the total export revenue. However, local tanneries have met only 20-30% of material demands of local enterprises.

General Secretary of the HCMC Leather and Footwear Association Nguyen Van Khanh told the Daily that many tanneries in the city have moved to other localities after the environment scandal of Hao Duong Company.

The city now has around 10 tanning factories with daily output of 10 tons each, including large factories such as Hung Thai and Dang Tu Ky. Hao Duong Company mainly imports hide and tan the product for exports.

Meanwhile, there are around 100 leather shoe enterprises in the city. Most firms have to import materials from China, Taiwan, Korea and the U.S. for production as domestic material supplies have low quality.

According to the Ministry of Industry and Trade, the nation used to import six million square meters of tanned leather each year. Local shoemakers therefore just provide outsourcing service given heavy dependence on material imports.

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