Tet promotion highlights quality domestic goods

Residents and enterprises can celebrate the upcoming Tet (Lunar New Year) festival by consuming and gifting high quality made-in-Viet Nam products under a new promotion programme launched in HCM City yesterday.

By participating in the "Tung Hang Tet" (Spreading Tet goods) programme, residents and enterprises can contribute to promoting domestic brands and helping local firms cope with tough economic times.

Nearly 30 producers of foodstuff, household utensils and jewelry introduced their products at the "Tung hang Tet" programme that was launched in HCM City on Tuesday.

Enterprises taking part in the event included Vinamilk, Trung Nguyen, Vissan, Sai Gon Food, Vinamit, Minh Long, Sunhouse, Duy Tan and SJC, with some offering more than 20 per cent discounts to organisations that placed orders.

Six kinds of Tet gift baskets containing 100 per cent Vietnamese goods were launched at the event.

The gift baskets will be sold at the Co.op Mart supermarket chain.

Organised by the HCM City Department of Industry and Trade, the High Quality Vietnamese Products Business Association and the Leading Business Club, the event not only aims at raising the competitiveness of Vietnamese products, but also to introduce to customers locally made good quality products at reasonable prices.

The event provided an opportunity for local producers and distributors to exchange information and seek co-operation to boost sales at a time of low consumption, said Le Ngoc Dao, deputy director of the HCM City Department of Industry and Trade.

The event attracted about 1,000 participants, including small traders at traditional markets, distributors, management boards of industrial parks, purchasing staff at supermarkets and labour union representatives.

Organisers said participating enterprises received 419 orders worth nearly VND1 billion (US$47,900) from companies and small traders at the event.

Novel system speeds milk buying

FrieslandCampina Viet Nam invested more than VND6 billion (US$286,000) to install an automated milk-purchasing system in a move to strengthen transparency, accuracy, quickness and convenience in purchasing milk directly from farmers.

The system aims to control milk quality from farm to factory and trace the source of raw materials when needed.

With system automation, every farmer or household will be issued a milk delivery card with a unique code.

Awards honour best resorts

The two best resorts of Viet Nam will be honoured at the Viet Nam Tourism Awards 2011 tomorrow at the Ha Noi Opera House.

The awards will give prizes for the best resorts for the first time since they were initiated by the Viet Nam Tourism Association (VTA) and the Viet Nam National Administration of Tourism (VNAT) in 1998.

Resorts in Viet Nam, especially in the central coastal regions of Da Nang, Nha Trang and Binh Thuan, attract foreign tourists for their stunningly pristine beaches and year-round sunshine.

Traditionally, the awards honour travel agencies, hotels and hospitality service providers that have made significant contributions to the Vietnamese tourism industry.

Travel agency offers Halal tours

Luxury Travel Viet Nam has just launched the first luxury halal tour and holiday operator focusing on Muslim tourists from Brunei, Malaysia, Singapore, Indonesia, India, Turkey, and the Middle East visiting Viet Nam from next year, the company has said.

The travel agency has launched its website vietnamhalalholidays.com and a Viet Nam guidebook for Muslim tourists visiting the country.

"We have reserved special tours for Muslim travellers, halal food restaurants and mosque locations. We expect to host around 600-800 Muslim travellers next year," said company manager Ha Pham.

According to the Viet Nam National Administration of Tourism, the country has hosted 210,805 visitors from Malaysia over the first nine months this year.

The company is set to introduce the tour at the Selangor Matta Islamic Travel Fair in Malaysia on December 7-9.

More non-stop flights from Russia

Russia is opening a non-stop air route from Chelyabinsk, a city located along the European and Asian border, to Cam Ranh Airport in central Viet Nam. The new route, which will begin soon, aims to bring more Russian tourists to the famous resort town of Nha Trang in Khanh Hoa Province.

In late 2010, Vladivostok Air, the largest carrier in Russia's far eastern region, also launched two routes from Vladivostok and Khabarovsk to Cam Ranh. Flights, however, have not been regular.

Farms bank on sustainability
 
Harmony between socio-economic development and environmental protection will ensure sustainable development for the agricultural sector of Viet Nam.

This was the conclusion reached by a Ministry of Agriculture and Rural Development's International Support Group plenary meeting on restructuring the agriculture sector, which opened yesterday.

Agriculture provides an important source of income and employment for 70 per cent of the country's population, so Minister Cao Duc Phat said special attention would be paid to both the quality and sustainability of agricultural growth in the coming time.

"The ministry has built a draft proposal on agricultural restructuring that will lead to greater added value and sustainable development," he said. "It has three key pillars: social and economic development and environmental protection."

These three sustainable pillars will be reflected through the reliable supply of food, raw materials and labour and better management of key natural resources.

The draft states that Viet Nam's agricultural sector has made enormous progress after 25 years of reforms, but there remain concerns about the quality and sustainability of Viet Nam's agricultural growth and about how well it is promoting the welfare of producers and consumers.

Some agricultural growth has come at the expense of the environment in the forms of biodiversity loss, natural resource degradation and water pollution, the draft states. This has imposed significant costs on society while threatening the sustainable growth of the country.

Steven Jaffee from the World Bank's Ad Hoc Advisory Group to the ministry agreed that sustainable development had a triple bottom line: social, economic and environment.

He said sustainable development was as much a process as a destination, and involved adjusting the goal posts as well as the roles of the Government and specific Government actions taken, as well as paying more attention to weighing social and environmental costs and benefits.

He also highlighted the responsibilities of different sectors for sustainable development in the agricultural value chain, from input suppliers to producers, intermediaries, processors, exporters and retailers.

For example, producers could increase water productivity, reduce their reliance on agrochemicals and implement more efficient soil management techniques.

"Meanwhile, processors should use energy- and water-efficient technology, use by-products, preserve the nutritional content of processed food and ensure safe working conditions," he said.

Director of the Institute of Policy and Strategy for Agriculture and Rural Development Dang Kim Son stressed that policy solutions should cover economic, social and environmental factors.

This included more efficient use and better management of land, financial resources, infrastructure and labour force, increasing income, reducing poverty and ensuring quality of life for the country's rural population.

"We should strengthen measures to cope with disasters and climate change, make better use of natural resources such as by developing the forestry economy and environmental services and ensure food safety by developing a green agricultural value chain and enforcing standards more rigorously," Son said.

At the meeting, representatives from international donors agreed that restructuring would help promote rapid and sustainable economic growth, ensure food security and contribute to poverty reduction and development for rural areas.

They proposed Viet Nam increase efficiency of management and use of public investments, implement institutional reform, refresh State-owned enterprises and create policies to encourage the participation of all segments of society in the restructuring process.

Under the draft agricultural restructure proposal, Viet Nam aims to realise an agricultural GDP growth rate between 3.5-4 per cent by 2020, as well as raise rural household incomes by a factor of 2.5 and reduce the rural poverty rate by 2 per cent per year in the same period.

The draft also mentions other goals for 2020, including a 20 per cent reduction of greenhouse gas emissions from agriculture and national forest coverage of 45 per cent.

Vietnam Electricity to increase rates in 2013

By mid-December the Ministry of Industry and Trade will submit to the Government a specific adjustment plan to increase electricity prices in 2013.

At a press conference on December 3, an official from the Ministry of Industry and Trade informed that the average cost of electricity in 2011 was VND1,226 per kWh and the cost of electricity production in 2012 is VND56 per kWh higher.

Vietnam Electricity Group (EVN) plans to issue bonds as a way to tackle its mounting debt.

According to EVN, electricity production for the first 11 months of 2012 reached more than 105 billion kWh, an increase of 13.4 per cent as compared to the same period last year.

The state-run company said it incurred a loss of VND5.3 trillion in 2011 alone, as the VND1,226 per  kWh power retail price was lower than the cost price of VND1,282 per kWh.

In 2012, EVN losses are estimated at about VND3,100 billion.

Dinh Quang Tri, deputy director general of EVN, said in Hanoi on Monday, “EVN is considering and working on procedures to issue bonds worth VND9,000 billion (US$435 million) for 2-3 years to repay its debts”.

He said one of the main reasons for EVN losses was the unfavorable weather conditions which affected the hydro-electricity production during the dry season.

Other reasons include fluctuation of currency rates and high fuel prices, which have increased production costs.

The official added that the Ministry of Industry and Trade is reviewing the electricity supply capacity for next year based on the balance of losses in order to submit to the Prime Minister a price adjustment plan for 2013.

People believe that though the 2013 roadmap for electricity price management has yet to be released; it should be acknowledged that prices will only be on an upward trend next year.
 
EVN and the Ministry of Industry and Trade both said it is certain that power prices will be adjusted next year.

“There will only be an increasing trend in electricity prices,” the company CEO said.

Traders rush to buy Lai Vung mandarin oranges for Tet

The Department of Agriculture and Rural Development in Lai Vung District in the Mekong Delta province of Dong Thap said that although it is still two months to go before Tet, traders are rushing to buy mandarin oranges of this area even at a higher price.
Prices of mandarin oranges are swinging from VND20,000-22,000 a kilogram, which is VND6,000-8,000 higher than last year.

Lai Vung District has about 1,176 hectares of mandarin orange orchards which yield 30,000-40,000 tons a year, of which 1,120 hectares are already fruit bearing.

Pham Van Lam, a mandarin orange grower in Long Hau Commune of Lai Vung District, said that the mandarin orange output this year is low due to bad weather and last year’s flooding. This has sent traders rushing to buy the fruit prior to the Tet holidays.

Prices of mandarin oranges are expected to continue to increase in the next few days as this fruit is very popular during Tet Lunar New Year.

Phu Quoc Airport opens with inaugural flight from HCMC

Phu Quoc International Airport in the Mekong Delta province of Kien Giang received its inaugural flight carrying 68 passengers from Tan Son Nhat International Airport in Ho Chi Minh City on December 2.

On the same day, Phu Quoc Airport also organized 11 flights with a total of 1,000 passengers on routes HCMC-Phu Quoc, Can Tho-Phu Quoc and Rach Gia-Phu Quoc.

The International Airport broke ground in November 2008, covering an area of 905 hectares and built at a cost of VND16,206 billion (US$777 million).

After four years of construction, the first phase of the project has been completed at a cost of VND3 trillion ($144 million). An official inauguration ceremony is scheduled to take place on December 15.

In related news, Vietnam Airlines flight VN631 carrying 143 passengers from HCMC landed at Soekarno-Hatta International Airport in Jakarta in Indonesia on December 2.

This is the first direct flight between Vietnam and Indonesia. In all there are now four direct weekly flights, departing on Tuesday, Wednesday, Friday and Sunday, leaving HCMC at 10am for a three hour flight to Jakarta. The same flight will return to HCMC on the same day at 1.45pm.

On this occasion, Vietnam Airlines is offering a promotion, in which one round trip ticket from HCMC-Jakarta will cost only VND2,905,000, a discount of 22 percent. The HCMC-Jakarta-Bali route will also be discounted by 11 percent to cost VND7,085,000.

The above discounted fares do not include taxes and other fees, and are applicable on tickets purchased from October 22 to December 31, for flights departing between December 2 and March 30, 2013.

Slow sales force auto firms to rush to find customers

Vietnamese automobile companies are now racing to launch promotional programmes to attract customers to stave off sluggish sales.

This is the first time in five years that the domestic auto market has seen such a stagnant sales period, which they have attributed to global and domestic economic difficulties.

According to Vietnam Automobile Manufacturers Association (VAMA), in the first ten months of this year, revenues of VAMA members dropped 37% compared to the same period of last year. Total auto sales are expected at just around 94,000 this year, from 110,938 of last year.

Ford Vietnam has reduced prices from VND16 million (USD761.9) to VND35 million (USD1,600) for its Fiesta, Focus Classic, Mondeo, Escape and Everest 4x2 MT models.

Toyota has started its discount programme, offering a discount of VND40 million (USD1,900) for model Yaris, version E through installing extra spare parts. The programme will last until March 31. Meanwhile, Honda is boosting sales of model CR-V through attractive promotion programmes such as giving a VND65 million (USD3,000) saving book.

Mercedes-Benz Vietnam has introduced a special promotional programme until late December for customers who buy their S-Class by giving them two return air tickets to Germany. Customers can also enjoy a three-year free warranty programme.

Renault has also offered a pair of tickets to Paris for those who buy Koleos, Latitude and Mégane models.

Vietnam Airlines petrol firm prosecuted for fraud

Vietnam Air Petrol Company (Vinapco), a subsidiary of Vietnam Airlines, has been prosecuted for smuggling and tax evasion worth billions of dong.

The General Department of Vietnam Customs’ Anti-smuggling and Investigation Department said it would send a dossier on the case to the Ministry of Public Security for further investigations before reaching a final decision.

According to the Ministry of Finance, in May the company temporarily imported 5,463 tonnes of petrol from Singapore and then re-exported 2,330 tonnes to a Chinese firm by sea before the Government had issued a ban on re-export via sea.

The customs agency was seeking approval to confiscate the fuel being exported to a dummy Chinese partner, only for it to be sold domestically.

In early July Vinapco made seven customs declarations to re-export  tonnes of petroleum worth VND8 billion (USD383,509) through Ta Lung Border Gate in Cao Bang Province to a Chinese firm named as the Beihai Seafood and Oil Supply Limited Company.

However, they did not re-export the fuel through the Ta Lung as declared but instead sold domestically in Hai Duong, Thai Binh, Phu Tho and Thai Nguyen provinces.

The Chinese firm named in the export declaration documents does not exist.

After red flags were raised, the department started investigations in late July.

After becoming aware of the investigation, the firm allegedly borrowed petrol from other companies to offset their missing inventories. They kept seals and glued them back together, continuing to seek approval from customs to re-import the fuel because their Chinese partner had refused delivery.

Haiphong customs allowed them to re-import the fuel.

It is suspected that the firm evaded VND2.5 billion worth of import, excise and value added taxes, excluding several other fees.

Nguyen Hai Trieu, interim director of Northern Air Petrol Trading Enterprise, a subsidiary of Vinapco, was responsible for seeking Chinese partners and directing the re-export of 296 tonnes of petroleum through Ta Lung border to a Chinese partner and supervising the implementation of the scheme.

Vinapco said it had dismissed a related official to facilitate the investigation.

When asked about the fraud, Trieu said he had yet to receive any documents related to the case.

He said that as he is a director, he could not directly supervise the transportation of fuel from Haiphong to the Ta Lung Border Gate.

He assigned a member of staff only named as Bien to take over the supervision, who then was compelled to return to his home due to family issues when the truck went to Bac Giang Province’s Hiep Hoa area.

According to Trieu, both he and Bien did not know where that truck went to and what their subordinates did after that.

“We are a state-owned enterprise, so we could not be involved in smuggling. Smuggling is conducted for personal benefit,” Trieu said.

Trieu admitted that there had been insufficient supervision, and said the fraud had happened as a result of lax supervision.

In relation to false Chinese partner, he said he had just introduced a Chinese partner to Vinapco but negotiations and the deal were conducted by a specialist working group at Vinapco.

EVN expects large profits this year after consecutive losses

The State-owned Electricity of Vietnam Group (EVN) is estimated to make a profit of VND3.5-4 trillion (USD167.8-191.8 million) this year, one official has said.

Dinh Quang Tri, EVN Deputy General Director, said at a press conference on December 3 that the expected profits could be enough to offset the losses from 2010.

The group’s VND8 trillion (USD383.5 million) loss in 2011 would be offset by profits of the following years, Tri noted.

According to him, as of December 31, 2011 EVN had also suffered losses of over VND26.7 trillion (nearly USD1.3 billion) from the disparity between foreign exchange rates and the cost of taking over deteriorated power transmission lines in rural areas. Such losses have yet to be included in power selling prices.

He said that EVN has received the Government’s approval for its plan to deal with these losses through 2015, which means that in order to offset those losses, EVN would gradually increase power prices in the next few years.

This year, EVN says they have only increased their prices modestly in order to prevent a shock to the national economy.

“We have yet to submit a plan for power price hikes for next year. We still want to assess power generation conditions and targets,” Tri said. He shared that this year’s power output is up approximately 10% from last year.

“EVN will surely make profits this year but their returns will be used to offset losses of over VND8 trillion in 2010 and a part of loss in 2011. The group expects the profits to continue in 2013, and gradually cover the losses,” he emphasised.

Do Gia Phan, Vice Chairman of Vietnam Standards and Consumers Association (VINASTAS), said power prices should not be floated until a competitive power distribution market has been established.

Given the current situation, the Government should continue to regulate power prices, he added.

He said that the adding of expenses for upgrades for rural power grid and power price subsidies for remote areas to power selling prices is inadequate.

“Such expenses are part of the Government’s development policies and should be covered with other funding sources, and not by price hikes,” he proposed.

He worried that the country may not meet its target to set up a competitive power distribution market next year as it needs more time for careful preparation.

Regarding EVN’s plans to settle its debts, Tri said the group has signed an agreement with the State-owned Vietnam Oil and Gas Group (PetroVietnam) to repay its debts gradually. The deadline for payment has yet to be decided, and depends on PetroVietnam’s financial situation.

EVN is speeding up procedures for the issuance of bonds worth VND9 trillion (USD431.4 million) in the next three or five years in order to get capital for debt settlement, he added.

Pyramid scheme firms grind to a halt

Up to 23 multi-level or pyramid scheme marketing companies in Vietnam halted operations with two out them having their business licenses revoked by the end of September this year from a total of 77 licensed firms.
 
Up to 90% of pyramid scheme marketing companies involved nutritional supplements
In HCM City, 15 multi-level marketing firms had suspended operations by late September. Among those, just one had its business license withdrawn because of violations, while the remainder closed due to poor business.

According to the HCM City Department of Industry and Trade, most violating firms had been fined, as the withdrawal of their license had to follow regulations set out in Decree 110 issued in 2005 which was due for to revision.

The Ministry of Industry and Trade’s Competition Management Agency said that multi-level marketing had strongly developed in Vietnam.

Statistics showed that up to 90% of these businesses were involved nutritional supplements, while the rest concentrated on cosmetics, fashion, household goods, sports and physiotherapy and fitness equipment.

Due to the huge potential profits, many companies violate the regulations by asking their network participants to contribute money and then pay commission as a way to encourage them to lure other people into the pyramid scheme. A number of companies also misrepresent their products through their advertising.

Over the past years, Vietnam has illegally operated pyramid schemes including those run by Golden Rock,  Colony Invest and Diamond Holiday and the most recently case of Mua Ban 24.

Head of the Competition Management Agency Bach Van Mung said he had proposed revising some of the regulations found in Decree 110/2005 on multi-level marketing management. He noted that the decree should require higher deposits and force companies to inform management agencies of their business expansion into other localities.

Remittances to turn heads

Remittances sent to Vietnam this year are expected to substantially exceed last year’s total of USD9 billion.

The money remitted by overseas Vietnamese and guest workers in the first half of the year amounted to $6.3 billion, or 70 per cent of the total amount last year, according to the State Committee for Overseas Vietnamese.

Meanwhile, the amount of foreign remittances typically sent home in December and January often increase strongly as more overseas Vietnamese return to the motherland during the time.

A large proportion of the remittances in recent years came in the fourth quarter, said Nguyen Hoang Minh, deputy director of the State Bank of Vietnam’s Ho Chi Minh City Branch. Therefore, this year’s result should be substantially higher than last year.

Remittances sent to or through the Ho Chi Minh City alone in the entire 2012, Minh said, were expected at reach $3.4 billion, compared with $3.2 billion last year.

Around 4.5 million Vietnamese, including 500,000 guest workers, live in more than 100 countries and territories outside Vietnam. About two million of them live in the US, where the annual interest rate for dollar deposits is around 0.35 per cent, much lower than the 2 per cent rate in Vietnam.

Given with the interest rate differences, many Vietnamese in the US send dollars back home for their relatives to deposit at Vietnamese banks, according to Dr. Le Tham Duong at Ho Chi Minh City Banking University.

Sacombank CEO Phan Huy Khang said the Sacombank Remittance Company has seen almost $1.3 billion remitted through the company so far this year, a 17 per cent increase year-on-year.

Sacombank expects the whole year’s result to be in the range of $1.6 -1.7 billion as planned.

Meanwhile, DongABank Remittance Company reported a result of $1 billion so far this year.

Vietnam expects this year’s total export revenues to reach $108 billion. If remittances total $10 billion in 2012, it will be almost 10 per cent of the country’s export value.

Expert: Vietnam remains a potential market

Foreign investors should not skip a potential market like Vietnam just because of current difficulties but they should have a long-term vision for their investments, said Christopher Bulter, chief representative of Ernst & Young’s HCMC office.

Speaking to over 100 foreign-invested corporate customers of Vietnam International Bank (VIB) at a seminar held by the bank in HCMC last Friday, Bulter pointed out contradictions, strong and weak points of business environment in Vietnam but stressed that Vietnam remains a potential market in the long run.

Risks in Vietnam are evaluated by six factors, namely economy, politics, law implementation, tax policies, operation and security risks. From March 31, 2009, Vietnam’s national risk level has remained unchanged at 2.95 points, an average rate, Bulter quoted a report of Ernst & Young.

The main reason for the unchanged risk is that political situation remains stable and the Government continues comprehensive economic restructuring, Bulter said.

However, weak points of the nation have yet to see a clear improvement, with the highest risks to investors being bureaucracy, lack of information transparency and shortcomings in policy and infrastructure systems.

Next year, enterprises will continue to face macroeconomic problems such as weak domestic demand, low credit growth. Meanwhile, priority for the State-owned sector will not reduce; budget deficit remains high; and public debt payment needs to move on.

“Vietnam will reach a GDP (gross domestic product) growth rate of 5.5% in 2012, 7.3% in 2013 and 7.2% in 2014,” Bulter predicted.

However, Bulter advised investors to look to a long-term vision as it is not easy to find out a potential market like Vietnam, which has 88 million consumers with increasing incomes, young manpower, a high literacy ratio, low labor cost and good discipline.

Trade will keep developing in the country given the framework of the WTO (World Trade Organization). The WTO will prompt the Government to call for investment and local business must be improved significantly to grasp opportunities.

VIB Chief Executive Officer Duong Thi Mai Hoa said that the seminar aims to bring about insightful information to foreign-invested firms to help them set up business strategy for next year. The bank has over 300 international corporate customers from 20 nations.

Ninh Binh lures VND9.1 trillion of investment

Ninh Binh Province last Friday granted investment certificates for seven projects with total capital of VND9.1 trillion on the occasion of the Ninh Binh investment promotion conference 2012.

These projects are of very large scale in the context that projects with a similar scale are getting fewer due to the economic downturn.

In particular, the largest project is the high-quality steel rolling plant to be developed by Kyoei Steel Vietnam Co. in Khanh Phu Industrial Park with a total investment of over VND3.87 trillion.

In the field of tourism, the largest project goes to the Kenh Ga 2 hot springs resort project of Thong Nhat Construction Co. with a total value of some VND3.01 trillion.

Meanwhile, in the field of agro-products, Ninh Binh Seed and Breed Corp. received a certificate for investment in a farm produce processing plant worth VND84.9 billion.

Harima Naoki, general director of Kyoei Steel Vietnam Co., said his firm was established in March 2012 and had been turned into a 100% foreign-invested company. The company has prepared site for development of its project in Ninh Binh, scheduled for completion in 2015.

Speaking at the event, Minister of Culture, Sports and Tourism Hoang Tuan Anh warned that Ninh Binh should place industrial development in harmony with preservation of cultural heritages, which is an advantage of the province.

Trang An heritage site is currently the most famous tourist destination in Ninh Binh. It is applying for UNESCO world cultural heritage status.

“Cement factories near heritage sites must not expand production. Such heritage sites belong to not only Vietnam but also the world,” the minister stressed.

Dinh Quoc Tri, vice chairman of the province, committed: “We want to achieve a harmony between industrial and tourism development.” The provincial authorities have identified tourism as the province’s strength, he added.

However, he asserted: “We will always provide an open investment environment to lure investment projects.”

Ninh Binh has attracted 27 foreign-invested projects with total pledged capital of US$938 million, earning the province the 28th rank in terms of investment attraction among localities nationwide, according to the Ministry of Planning and Investment.

In recent years, Ninh Binh has emerged as one of the top destinations for investors and tourists in the northern region thanks to its dramatic improvement in traffic infrastructure.

The provincial budget gained VND3.4 trillion in 2011, or 85 times higher than 20 years before.

Cau Gie-Ninh Binh Expressway, the first expressway in the north, has recently been inaugurated, helping shorten the time for traveling from Hanoi to Ninh Binh to less than one hour, or half of the time that one had to spend previously.

National Highway 10 connects the province with Hai Phong Port, offering opportunities for both exporters and importers.

Apart from the large-scale projects mentioned above, Ninh Binh also granted investment certificates for other projects.

Ninh Binh Machinery Manufacturing Co. will carry out the second phase of the seaport expansion project with a total budget of VND600 billion. The five-star Tam Coc-Bich Dong complex worth VND1.04 trillion will be developed by Quang Trung Mechanical Enterprise.

Cuc Phuong Tourism Service Co. will spend VND197.2 billion on Golden Cuc Phuong villa area. Meanwhile, Binh Dien Fertilizer Co. will invest in Binh Dien-Ninh Binh NPK fertilizer plant with some VND195 billion.

At the event, Ninh Binh signed a memorandum with Saigon Beer, Alcohol and Beverage Co. on investment in a beer factory. In addition, the province signed memorandums on development of Ninh Binh Happy Land entertainment project and Dai Duong hotel complex.

EU becomes biggest export market of Vietnam

Europe has overcome the United States to become Vietnam’s biggest export market given available figures for the January-November period, according to the minister-counselor for the Delegation of the European Union to Vietnam.

Jean-Jacques Bouflet, who is also head of the trade and economic affairs section at the Delegation of the EU to Vietnam, told the Daily that last year EU and the U.S were neck and neck for the biggest market for Vietnam-made export products.

“According to the latest statistics available for the 11 months of 2012, we are now the first destination for exports (of Vietnam)… exports only because imports from Europe are far too low,” Bouflet said.

The trade and economic affairs section at the Delegation of the EU to Vietnam quoted preliminary statistics of Vietnam’s General Statistics Office as saying that Vietnam’s exports to the EU from January to November reached US$18 billion, up 21.3% year-on-year while the U.S. imported goods worth some US$17.9 billion from Vietnam in the same period.

In the year to November, Vietnam imported goods worth US$8 billion from EU, a year-on-year increase of 14.6%. In this period, two-way trade between the EU and Vietnam stood at US$26 billion, or US$2 billion higher than the bilateral figure for the entire 2011.

Despite uncertainties in Europe for years, Vietnam’s exports to the EU have undergone strong double-digit growth of 22.36% year-on-year to US$11.38 billion in 2010 and up to 45.4% to US$16.5 billion last year.

“2011 and 2012 show that Vietnamese exports to Europe have still increased. So, the crisis (in the Eurozone) has not been yet able to curb down imports from Vietnam into Europe,” Bouflet said.       

The EU export of goods to Vietnam has grown dramatically over the past years, 15.6% year-on-year to US$6.36 billion in 2010 and 18% to US$7.5 billion last year. With strong growth in both imports and exports, the EU-Vietnam trade has expanded to nearly US$17.2 billion in 2010 and US$26 billion last year.

Speaking at the debut event for EuroCham’s Whitebook 2013, Bouflet credited strong growth of Vietnamese exports to the EU to partially “unilateral preferences offered by the EU” and a significant proportion of Vietnam’s goods entitled to tariff exemption or preferential duties under the Generalized System of Preferences (GSP).

However, there will be changes to the GSP system that require increasingly competitive products from Vietnam. “GSP is unilateral and subject to modifications every three years,” Bouflet said.

Bouflet noted companies and exporters needed a stable mechanism for their business strategies under “an ambitious bilateral Free Trade Agreement (FTA) as it offers stability and predictability to businesses.”

“It is great that Vietnam has realized the importance of having an FTA with an economy complimentary to Vietnamese economy which ensures the best long-term solution for improved access to overseas market,” Bouflet said.

Officials of the EU and Vietnam began the first round of FTA negotiations in Hanoi in October this year. “The second round will soon be held in Brussels in January 2013,” Bouflet said.

SOC Vietnam opens Hung Yen plant

SOC Vietnam, a subsidiary of Sumitomo Osaka Cement Group, last Friday opened an anode material plant for lithium-ion batteries in the northern province of Hung Yen with total investment of US$62.5 million.

The facility in Thang long II Industrial Park has an average capacity of 2,000 tons of products annually. Its capacity may be raised to 10,000 tons annually depending on market demand.

Yoshihiko Sumitani, general director of SOC Vietnam, said Sumitomo Osaka Cement Group was established in 1907 in Japan, while SOC was only set up in Vietnam in 2011.

SOC Vietnam now is boosting development and production of lithium iron phosphate to make anode materials for lithium-ion batteries. It was already granted the copyright for lithium iron phosphate production and business and targets to launch the products worldwide, Sumitani said.

“The pilot plant with a small capacity in Japan has failed to satisfy our development’s demand, therefore, the new plant in Vietnam will be the foundation for us to expand business operations in anode materials for lithium-ion batteries in Asia and around the world,” he revealed.

Anode materials for lithium-ion batteries that SOC is producing are being highly-valued by the market and have captured great attention of customers from Japan, Europe and America. The new plant when in place will help SOC meet rising demand from customers, thus enhancing its competitiveness on the global market.

Sumitomo Osaka Cement Group started its business in the cement industry in Japan. The group so far has expanded it operations to minerals, building materials, optoelectronics and other advanced materials industries.

HSC expands risk management project

HCMC Securities Corp. (HSC) has expanded a project to upgrade its risk management system to international standards given the support of a foreign consulting firm.

This project, the largest of HSC this year, will see the first stage lasting four months. After this period, the consulting firm will review its operation to give advice for HSC in the future.

The project aims to help HSC avoid risks which arise during its business and investment process such as policy risks and organizational risks.

The State Securities Commission in September told local securities firms to improve its risk management system, citing that many brokers lost their solvency for failing to recover debts.

HSC has also connected to the networks of Bloomberg and Reuters via FIX (financial information exchange) method to ensure better services for foreign customers. FIX allows foreign institutional customers to place orders directly and transparently on the two local stock exchanges.

In 2011, HSC was honored the title “Best Local Brokerage in Vietnam” by Asiamoney.

Computer market sluggish

Vietnam’s computer market in the third quarter declined by 4% from the same period last year as consumers have tightened their spending, according to IT market research firm IDC.

The quarterly research in Asia-pacific of IDC released last Thursday showed that the computer market in the third quarter inched up by 11% from the previous quarter but dropped by 4% year on year.

The consumption rose quarter on quarter owing to the seasonal factor as schools nationwide started their new academic years in late August or early September, helping suppliers to reduce inventories and import new products.

Phan Thi Hoang Yen, analyst from IDC Vietnam, said that the overall spending was quite low as there were concerns over the economy, which could leave an impact on suppliers in a medium or long term.

The spending on computers of enterprises and the public sector was no different and forecast to remain week next year.

Daniel Pang from IDA Asia-Pacific said that the Vietnamese Government was still tightening spending as the country had to focus on inflation control and banking restructuring. Meanwhile, high interest rates have restricted spending of enterprises, he added.

According to IDC, tablet computers and smartphones will continue to account for a high proportion while Ultrabooks will encounter difficulties in penetrating the market. However, the demand of ultra-slim devices will rise in the coming quarters as the price of such devices is on the decline.

Regarding the market share, for the first time Asus took the top position with 14.4% thanks to several promotion programs for consumers. It was followed by Dell, HP, Acer and Lenovo with 12.8%, 10.4%, 9.6% and 6.4% respectively.

Manufacturing PMI rises to 14-month high

The November Manufacturing Purchasing Managers’ Index (PMI) announced by HSBC Vietnam on Monday stays above the neutral 50.0 value for the first time and thus hits the highest level in 14 months.

PMI is posted at 50.5 in November, versus 48.7 in October. The latest reading points to a marginal improvement in overall manufacturing business conditions.

The improvement in operating conditions reflects both production levels and new orders were growing again in November, says HSBC in its press release.

In particular, output increased at the fastest pace since September 2011, ending a seven-month period of reduction. This was mainly attributed to domestic demand in November, as new export order volumes continued to decline due to subdued demand within Asia and the ongoing economic downturn across Europe, said survey respondents.

However, overall new business levels returned to growth in November, which ended a six-month sequence of contraction. Although the latest rise in new orders is only modest, the rate of expansion is the strongest since April 2011.

Higher production requirements and stronger new business inflows resulted in a rise in input buying for the first time since March. Meanwhile, improved sales contributed to a solid decline in stocks of finished goods, with post-production inventories falling at the fastest rate for a year.

November data provided some evidence that price discounting strategies supported new business gains in the manufacturing sector. Factory gate prices decreased for the seventh month running and at the fastest pace since August.

Meanwhile, average cost burdens continued to rise in November, driven by rising oil-related prices.

Trinh Nguyen, Asia Economist at HSBC, commented: “The rebound of manufacturing activity is anticipated and much-needed. The expansion is supported by stronger credit growth as well as relatively benign inflation, while export demand remains weak.”

New hydro plant is set to plug in national grids

A $410.7 million hydropower plant in central Thanh Hoa province has just broken ground.

Ngo Viet Hai, chairman of Trung Son Hydropower Company - a subsidiary of state run Electricity of Vietnam (EVN), said the project would provide an additional 1,019 gigawatt hour of electricity annually to help match the nation’s rising energy demands.

Especially, it would contribute to Vietnam’s climate change agenda by lowering carbon dioxide emissions by about one million tonnes per year, Hai said.

“The plant’s reservoir is expected to provide flood control benefits through a water-storage capacity of 112 million cubic metres,” he said.

The plant will benefit from a $330 million World Bank loan, accounting for 80 per cent of the project’s total cost, with a 22 year maturity and a grace period of six years.

Hai said the project was a typical example of a well-designed, medium-scale hydropower project that would meet international standards.

Up to 1,516 local households in eight communes will be directly affected by the project. Around 98 per cent of them are ethnic peoples of Thai, H’Mong, Muong and Kho Mu.

The first turbine of the plant will be running by 2016’s fourth quarter and all construction will be completed by 2017, according to the project developer’s schedule.

VN has around 140 million phone subscribers

As of November 2012, the number of new phone subscribers reached over 11.2 million, bringing the total figure to 135.9 million, including 120.9 million mobile subscribers.

Ha Noi has the biggest number of phone subscribers; followed by Ho Chi Minh City, Thanh Hoa, Nghe An, Hai Phong, Dong Nai, Nam Dinh, Lam Dong, Thai Binh and Quang Ninh provinces.

The International Telecommunication Union (ITU) named Viet Nam as one of the countries with fastest Internet growth rate in the region and the world.

As of September, 2012, Viet Nam has over 31.1 million Internet users, who account for around 35% of the population, 15 times higher than the figure of 2007 and ten times higher than that of 2003.  

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