BUSINESS IN BRIEF 11/6

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Eximbank invests in Air Mekong



Air Mekong and Eximbank have clinched a strategic partnership deal that allows the bank to hold a 11% stake in the two-year-old private airline.

The deal was signed by Air Mekong’s chairman Doan Quoc Viet and Eximbank’s vice chairman and general director Truong Van Phuoc in Hanoi on Wednesday. A representative of Air Mekong said the bank’s investment was part of the carrier’s development plan to increase its chartered capital to VND600 billion (nearly US$29 million).

Eximbank will assist Air Mekong with funds for leasing planes to bring its aircraft fleet from the current four to 10 in the coming years as well as for infrastructure and service projects at the airports that the airline flies to. The two sides will cooperate on programs regarding air-ticket payment, promotion and brand building.

The Ministry of Transport granted Air Mekong a license in 2008 after the Prime Minister’s approval for the establishment of this private airline in Vietnam with an initial chartered capital of VND200 billion (nearly US$9.6 million). This is the lowest level required for a local airline to operate domestic flights.

Air Mekong said it had transported almost 1.2 million passengers on more than 17,000 flights using four Bombardier CRJ 900 planes since October 2010.

Truong Thanh Vu, an executive of Air Mekong, told the Daily on the phone on Wednesday this carrier performed 32 domestic daily flights connecting HCMC, Hanoi, Central Highlands and central regions among others. This summer, the airline offers many more flights to tourist sites including Dalat, Buon Ma Thuot, Phu Quoc and Con Dao.

The Air Mekong chairman Viet told the signing ceremony that the airline’s priorities were to expand domestic services and operate international flights in the years to come.

Air Mekong is one of the five operational local airlines in Vietnam. The others are Vietnam Airlines and its subsidiary Vietnam Air Service Co. (Vasco), Jetstar Pacific and VietJetAir.

* Silk Air of Singapore has commenced flights to Noi Bai International Airport in Hanoi after years of servicing Danang in central Vietnam.

The Civil Aviation Administration of Vietnam said that Silk Air used the Airbus A319 and A320 aircraft for the flights to Hanoi on Tuesdays, Thursdays and Sundays.

Hoa Binh offers incentives to lure investment in IZs

The industrial zones (IZs) management board in the northern province of Hoa Binh has introduced provincial investment incentives and administration reform.

The IZs management board, which is often responsible for directing companies to strictly follow regulations on environmental protection and fire prevention and fighting, claims that the reforms will speed up new projects.

Since 2007, the northern province of Hoa Binh has granted 52 investment licenses, including two with capitalisation of more than VND70 billion in the first half of this year.

Currently, the province has 49 projects with a combined registered capital of US$334.8 million. 26 projects have been put into operation with a total revenue of VND3,000 billion, exports of US$47 million, and imports of US$23 million. Collectively, these contributed VND80 billion to the provincial budget and generated nearly 4,000 jobs for local people.

Do Hai Ho, the head of IZs management board said during 2011, despite impact of the economic downturn, the provincial IZs attracted three direct foreign investment projects worth nearly US$100 million.

Ho added that in spite of such achievements, IZs development is still hindered by obstacles, such as slow implementation of projects.

Administration reform will cut preparation time for businesses, and allows project’s to become operational quicker, Ho said.

In addition, only a few IZs which have been invested into infrastructure came to fruition.

To help these IZs run effectively in the future, the province will select potential and feasible projects which are of high-added values, make a significant contribution to the provincial budget and ensure social welfare and environmental protection. It will build houses and provide social services for workers.

Garment producers faces difficulty in expanding markets

Vietnam’s clothing manufacturers are facing difficulties in finding markets for their products.

Orders from traditional markets, including EU and the US, are declining. Many businesses now face a shortage of orders for production in the third and the fourth quarter this year. Meanwhile, seeking new markets is also proving difficult, due to low investment in national trade promotion programmes.

Dang Phuong Dung, Vicechairwoman and General Secretary of the Vietnam Textile and Apparel Association (Vitas) said the biggest difficulty facing the export sector is the export market. Only one trade promotion programme has been established in 2012.

Dung proposed that the Government should have other programmes to help businesses expand into other markets.

Many economic experts, however, have said that businesses should be active in expanding markets and reduce their dependence on manufacturing orders.

Domestic products on show in the RoK

The second exhibition on specialty products from Vietnam and Indonesia is being held at 59 Lotte Mart commercial centres across the Republic of Korea from June 9 to 13.

More than 60 Vietnamese products, including Vinamit’s dried fruits, Black Tiger prawns, stainless steel pots and Vifon noodle soup are being exhibited

Lee Eun-seung, head of the global purchase department of Lotte Mart, said the programme aims to introduce Vietnam’s specialty products to the Korean market.

Vietnam promotes tourism in Sri Lanka

Vietnam’s leading travel agents, including Hanoi Toserco, Saigontourist and Fiditour, met with more than 150 Sri Lankan partners, at the Hilton Hotel in Colombo on June 8 to exploit growing interest in Vietnamese tourism.

Vice-chairman of the Travel Agents Association of Sri Lanka (AITA) U.Silva said Sri Lankan residents are showing increased interest in Vietnam as a holiday destination and called on local travel agents and media companies to exploit the potential market.

Vietnam’s ambassador to Sri Lanka, Ton Sinh Thanh, said the event aims to help local travel agents gain a better understanding of Vietnam’s people, land, history, culture, landscape and cuisine.

He said this is a good chance for Vietnam to promote tourism and to meet with partners to explore the potential tourism market in Sri Lanka.

The ambassador expressed his hope that the meeting along with a ten-day Farm Trip for 15 Sri Lankan tourism and media representatives in August will further promote tourism cooperation between the two countries.

At the meeting, the Vietnamese embassy and travel agents delivered showcased documents, pictures, and souvenirs promoting the country’s tourism and culture.

Car sales down despite promotions

The local automobile industry continued to see a sharp decline in sales last month, even though automakers tried to lure buyers with many promotional and customer care programs.

Last month, Mercedes-Benz Vietnam offered a huge discount program, with some luxury cars marked down by over VND1 billion a unit. However, the German automaker failed to reap good results as only 142 cars were sold, falling by 63 units compared to the same period last year.

Other enterprises also reported disappointing sales figures last month.

According to a report of the Vietnam Automobile Manufacturers’ Association (VAMA), GM Vietnam sold just 311 cars, a drop of 224 units year-on-year, while Ford Vietnam suffered a 50% decline with only 224 cars sold.

Honda Vietnam sold around 100 cars in May while Isuzu Vietnam and VinaStar (Mitsubishi) sold 112 and 103 units respectively.

Domestic producer Truong Hai, who leads the market in terms of sales volume in recent times, sold nearly 1,900 cars last month, a fall of 770 against last year.

Ford Vietnam has just announced a discount program for all its vehicles manufactured in the country, with some makes seeing prices fall by nearly VND100 million a unit.

Besides discounts on car prices, automakers assisted customers by giving them free registration fees, car accessories and insurance fees. They also launched new products onto the market to draw the attention of customers.

However, the enterprises are facing difficulties due to high stockpiles and poor sales, which are triggered by the economic crisis, private automobile limitation policy in the country and banks’ credit tightening measures.

According to the companies and auto traders, buyers are hesitant as a high fee will likely be imposed to limit the use of private vehicles. If the Government fails to make clear their plans for the fee, the local auto market will be frozen or continue to slump.

Concerning the large promotion programs, local businesspeople say these are just temporary solutions by automakers to tackle huge stockpiles and prevent stagnant production.

VAMA in its report affirmed that uncertainties of fees and tax policies were the main causes of a fall in sales in recent times. To cope with the difficulties, VAMA suggested managing agencies to shelve for good the policy of limiting personal vehicles, apply just one registration fee of 5% on automobiles in the country and reduce value added taxes.

VAMA president Laurent Charpentier said that the market would quickly receive a boost if the first two suggestions are realized.

Luxury flats still ready for launch

Even though most apartment projects are failing to lure buyers at the price of less than VND20 million a square meter, several project owners in the city’s center are still presenting their luxury products with each square meter worth up to hundreds of millions of Vietnam dong.

The Saigon M&C building located at the corner of Ham Nghi and Ton Duc Thang streets is for sale at about VND150 million per square meter, or US$7,500. The 42-floor building when complete will provide a six-storey commercial center, 40,000-square-meter office area and 133 high-end apartments.

Similarly, apartments of the Vincom Center on Le Thanh Ton Street in downtown area are priced on the secondary market from VND164 million a square meter, equivalent to US$8,000.

Meanwhile, C.T Group said it would continue marketing the Leman apartment building which is still under construction on Nguyen Dinh Chieu Street in District 3. The realty developer last year had succeeded in selling small numbers of condos of the same project in two separate offers.

When in place in the first quarter next year, the 24-storey building will offer an additional 12,000 square meters for retail spaces and 230 more luxury flats to the housing market, with one square meter worth from VND90 million.

Not far from this incomplete project is the Saigon Pavillon on Ba Huyen Thanh Quan Street. It has just been accomplished with 95 flats priced from VND86 million a square meter.

Chairman Tran Kim Chung of C.T Group said his company opted for releasing the luxury condos step-by-step in a bid to secure the project’s value, with only 14 flats joining the market every time.

Chung said he expected his company would still be able to attract target clients who are end-consumers in the current economic slump with unchanged prices.

Foreign buyers return US$2.9 mil. of seafood

There have been 287 tons of seafood worth US$2.9 million returned to the country in the year to date due to substandard quality, the Ministry of Industry and Trade said.

Food hygiene violations and excessive residue of antibiotic attributed to the returned shipments, though the amount is still small compared to the country’s seafood export.

To tackle the situation, local seafood exporters are strictly addressing the residue of antibiotic and preservative on input materials. They will check every single cargo before its shipment.

The country last month exported 110,250 tons of seafood products worth US$500 million, down 1.31% in volume but up 2.38% in value year-on-year. In the year’s first five months, the country shipped abroad 541,000 tons of seafood worth US$2.31 billion, a year-on-year increase of 5.73% in volume and 9.6% in value.

The country reported a 10% decrease in exports to E.U in the five months against the same period last year. Three key seafood items exported to the EU are tra fish, shrimp and squid.

The economic turmoil in the euro zone has dragged down its consumption demand for high-value seafood items imported from Vietnam. Moreover, the exports of tra fish to EU saw no increase given tight supply of materials on the home market this year.

Local seafood exporters are looking for new markets to offset for the falling export to the EU.

Seafood exports to other markets such as the U.S., Japan, South Korea and ASEAN recorded good growth rates. Similarly, exports to China, Canada and Australia also posted healthy growth pace in the January-May period.

Manufacturing still mired in stagnation: ministry

Manufacturing in May was still mired in stagnation due to rising inventories, as the month’s Producer Price Index (IPP) rose by only 4.4% against April, the Ministry of Industry and Trade reported.

The IPP in May increased by 6.8% year on year, but the index in the January-May period only inched up by a mere 4.2% compared to an increase of up to 9.2% of the year-ago period, said the ministry.

Out of the nation’s key industries, the IPP of the processing and manufacturing sectors is still modest in comparison with a surge of 12.6% in 2011. Inventories of the industries are still high, at approximately 29.4%, as of early last month, the ministry pointed out.

According to Nguyen Xuan Chien, deputy director of the Domestic Market Department under the ministry, inventories of steel makers declined by 40,000 tons last month. However, some industry players are still struggling while others have stopped production due to financial constraints, he noted.

The same woes also hit cement producers with the volume of unsold cement products reaching about 0.68 million tons as of the end of last month despite the low tempo of production. Meanwhile, unsold volumes of fuels as of May 24 stood at 106,000 tons despite the fact that Dung Quat Oil Refinery has temporarily halted operation for maintenance.

For processing and manufacturing sectors, only export values of mobile phones and components experienced an impressive growth of 110.9%. The export revenues of computers and spare parts picked up by 99%, making up US$3.3 billion out of the total export value of US$42.9 billion in the January-May period.

The point is that export revenues are mainly due to the contribution of foreign-invested processors and manufacturers, not local ones. The growth rate of exports of local companies in the year to date was only 8.4% compared to the national average of some 25%.

Funds for overhead roads hard to find

None of the four overhead road projects in HCMC has got off the ground yet due to the difficulty in finding investment capital.

Under the planning approved by the Prime Minister in early 2007, HCMC will develop four elevated roads to reduce traffic congestion. At a meeting with HCMC vice chairman Nguyen Huu Tin on Tuesday, the municipal department of transport said the biggest problem of the four elevated road projects is finding investment capital.

Bui Xuan Cuong, deputy director of the HCMC Department of Transport, noted that with the investment format depending on toll collection to recover capital, revenue will only reach around 15-20%. Therefore, the city’s departments are seeking ways to lure investors into other investment forms

The total cost of the four overhead road projects is estimated at over VND50 trillion, or some US$2.4 billion, including site clearance expense. In particular, the first overhead road will cost some VND14.94 trillion, the second one VND6.86 trillion, the third VND17.1 trillion and the fourth VND11.45 trillion.

Beton 6 Joint Stock Company has been permitted to study and suggest investment plan for the first elevated road project, while Binh Thien An Real Estate JSC and Construction Corporation No. 1 have been chosen for the third and the fourth overhead roads respectively. So far, no investor has shown interest in the second overhead road.

Vice Chairman Tin reminded relevant agencies to take into account connectivity with the main roads and residential zones when studying elevated roads in order to promote the efficiency of these projects.

The transport department said at the meeting that only the first overhead road does not need to adjust directions, but the other three have to do so to meet the traffic system planning of the city.

According to the planning of HCMC, the first overhead road will start from Cong Hoa Intersection, run along Bui Thi Xuan Street and fly over Nhieu Loc-Thi Nghe Canal before ending on Nguyen Huu Canh Street, stretching 8.4 kilometers.

The second road will start at the linking point with the first one on To Hien Thanh Street, moving along Lu Gia, Binh Thoi and Lac Long Quan streets before reaching the belt road No. 2. The total length of the route is 10.2 kilometers.

Meanwhile, the third elevated road, connecting with the second route on To Hien Thanh Street, will run along Le Hong Phong, Ly Thai To and Nguyen Van Cu streets until reaching Nguyen Van Linh Boulevard in District 7.

The final road is designed to start from Binh Phuoc Junction, move along National Highway 13 across the Saigon River before it meets the first route, stretching a total of 7.7 kilometers.

Marine Trademark Forum opens in Vung Tau

The fourth Vietnam Marine Trademark Forum themed “Economic potentialities and ecological environment of Vietnamese islands and archipelagos” was held in Vung Tau City on June 7.

Participants presented reports on building sea trademarks, studying lessons and opportunities for Vietnam to successfully implement its sea strategy, and exploiting sea potential for economic and tourism development, as well as climate change, and development orientations of localities having islands.

The forum provided a platform for managers, scientists, provincial leaders, and domestic and foreign organizations and businesses to share information and experiences in exploiting marine-based economic potential, protecting the ecological environment of islands and archipelagos and building marine trademarks for localities.

It helped raise public awareness of the role of marine areas in national construction and defence, and honour the trademarks of Vietnam’s islands and archipelagos.

Deputy Minister of Natural Resources and Environment Chu Pham Ngoc Hien emphasised that the Party’s resolution on Vietnam’s sea strategy considers the sea and island-based economy as one of five breakthroughs for maritime economic development till 2020 and beyond.

Tran Minh Sanh, Chairman of the Ba Ria-Vung Tau Provincial People’s Committee, said Ba Ria-Vung Tau was one of 28 coastal provinces with great sea and island potential. Therefore, building and promoting trademarks for environmentally friendly sea products is essential and in line with the national sustainable development strategy.

Chinese firm wins port building deal with EVN

The Vietnam Electricity Corporation on June 8 signed an Engineering-Procurement- Construction (EPC) contract with China Communications Construction Company (CCCC) for a seaport for Duyen Hai Thermo Power Centre.

The contract, which is valued at almost 181 million USD including insurance premium, consists of the building of two wharfs capable of handling coal ships with tonnage of 30,000 DWT, a wharf for 1,000 DWT ships of oil, a 3.9 km breakwater and other necessary infrastructure.

The port, included in the master plan of the Duyen Hai Thermo Power Centre, is designed to receive about 12 million tonnes of coal and oil to supply to thermo power plants in the centre.

The project is expected to start operation in the third quarter of 2014.

Once completed, the port will play an important role in ensure the smooth construction and operation of the Duyen Hai Thermo Power Plant 1 and 3, supplying power as well as contributing to the socio-economic development of southern region and the nation in general.

The Middle East- a lucrative market for Vietnamese seafood

Since the beginning of 2012, Vietnam's seafood exports to the Middle East have surpassed US$117 million, accounting for 5.1 percent of the country’s total export revenue.

Lying at the junction of Asia, Africa and Europe, the Middle East serves as a gate for goods to penetrate neighboring regions. It is also a promising new market for Vietnamese seafood.

Despite the negative impact of the European public debt crisis, the Ministry of Agriculture and Rural Development (MARD) reports that Vietnam’s seafood exports have maintained steady growth and are estimated to hit US$500 million in May to raise the total value in the first five months of this year to US$2.3 billion, a year-on-year increase of 9.8 percent.

However, compared to the same period last year, seafood export values saw a sharp decline of 26.4 percent in Germany, 10.9 percent in the Netherlands and 16.3 percent in Italy.

Meanwhile, seafood exports to the Middle East witnessed a dramatic rise in earnings, which helps cover revenue losses in the European market and provides impetus for for the seafood sector to continue growing.

The Vietnam Association of Seafood Exporters and Producers (VASEP) said seafood products shipped to the Middle East have increased in value from US$192 million in 2009 to US$225 million in 2010 and US$274 million in 2011.

Vietnam is boosting seafood exports to the United Arab Emirates (UAE), Israel, Sudan, Lebanon, Iraq and Kuwait, it said.

Of those countries, the UAE is Vietnam's largest customer and a crucial gateway for transporting goods to other Middle Eastern and North African nations.

The UAE is a major crude oil exporter, as well as the second biggest economy in the Muslim world, and ranks 17th among the world's 61 most competitive economies. However, its seafood production can only meet 25 percent of its total demand so it must import the remainider from other countries.

The UAE mainly imports butterfish, anchovies, garrupa, tuna, lobster, mollusks, tra fish and salmon from Vietnam.

Tuna exports to the UAE have increased noticeably in value from US$522,000 in 2009 to over US$2 million two years later.

Meanwhile, tuna exports to Sudan reached nearly US$1.5 million in revenue in the first four months of this year, an enormous year-on-year increase of 655 percent, making it one of the top ten importers of Vietnamese tuna.

This shows positive results from efforts by domestic tuna producers to seek business opportunities for exports to new markets in the Middle East. Seafood exports from Vietnam have many advantages in the region and they are now in ever increasing demand.

Many Middle Eastern countries are heading east for trade and investment, which creates more opportunites for Vietnamese goods to penetrate and increase their shares in those markets.

With average annual economic growth of 6-14 percent, the Middle East region is considered a market with great potential for Vietnam.

Although, there are no strict regulations for product quality and packaging, Vietnamese businesses still face uphill battles because of legal and technical obstacles, as well as the ways of doing business in this market.

They also suffer from a high risk of payment, unstable security, a lack of information, fierce competition due to low import taxes and a poor network of Vietnamese representative offices in the region.

To overcome these problems, the Vietnamese Directorate of Fisheries and the Vietnam Chamber of Commerce and Industry (VCCI) recently sent a number of trade delegations to survey the Middle Eastern market.

Economists discuss ways to help SMEs

Vietnamese and international economists gathered in Can Tho City on June 8 to discuss ways to sharpen the competitive capacity of small-and medium-sized enterprises (SMEs).

Participants in the seminar shared their experiences in developing SMEs around the world, minimizing negative impacts when doing business and taking advantage of international integration.

They highlighted the advantages of Vietnam’s SMEs, including their dynamic and flexible approach, which helps them quickly meet the market demand.

However, economists said, Vietnamese SMEs do not have a strategic vision and keep themselves updated with market information and the law.

Lack of transparency in management, outdated technology, and poor competitiveness are other factors impacting SMEs’ effectiveness, they stressed.

Nguyen Trong Hieu, deputy director of the Ministry of Planning and Investment’s Enterprise Development Department, said that small scale of operation and low competitiveness are preventing SMEs from grasping business opportunities.

He suggested that SMEs nationwide should cooperate with each other to improve their competitive edge.

During the 2011-2015 period, 400,000 SMEs are expected to be established, contributing 30 percent of Gross Domestic Product (GDP) and 35 percent of State budget collection, and creating 4 million new jobs.

Hieu proposed eight solutions including perfecting the legal framework for businesses’ market participation, operation, and withdrawal, providing financial and credit assistance for SMEs, boosting the application of new technologies in SMEs, developing human resources, improving management capacity, establishing industrial clusters, providing information, and building a network of organizations to assist SMEs to implement the SME development plan.

The seminar is organized by the Vietnam Association of Small and Medium-sized Enterprises (SMEs) in co-ordination with the Ministry of Planning and Investment’s Enterprise Development Department and the United Nations Industrial Development Organization (UNIDO).

Nearly VND200 trillion to develop railway system

The Government has approved a VND200,000-billion project to develop Vietnam’s railway system in the 2012-2015 period.

The Vietnam Railway Corporation’s project aims to upgrade the current railways on Lao Cai-Hanoi-Haiphong route to enable trains to move at speeds of 80-120km per hour. It will also build an express railway route from Hanoi to Ho Chi Minh City, and two standard railways on the Lao Cai-Hanoi-Haiphong and Hanoi-Dong Dang routes.

As part of the project, urban railways in Hanoi and flyover railways in HCM City will also be upgraded. Hanoi’s current train station will be developed into a modern centre to connect all transport systems.

Boosting Vietnam-Japan arts and crafts trade

The Embassy of Vietnam in Japan, in co-ordination with Hanoi Women Business Association, organized a seminar on strengthening Vietnam-Japan trade on June 8.

The event aims to foster two-way trade of arts and craft and consumer goods, and attract Japanese businesses to invest in Vietnam.

Vietnamese ambassador to Japan Doan Xuan Hung said Japan is one of Vietnam’s leading partners with bilateral trade turnover in 2011 hitting US$21 billion and Japan’s committed investment capital in Vietnam reaching US$26 billion.

In Q1 of this year, Vietnam’s export to Japan was up 65 percent compared to the same period last year.

Okano Masaaki, deputy director of Japan’s Asia New Power Company, said Japanese enterprises should provide information about their demand and Vietnamese businesses research carefully about the Japanese market to produce goods with good quality, new design and competitive prices.

Nguyen Trung Dung, commercial counsellor of the Embassy of Vietnam in Japan, noted that due to difficulties in the global economy, the bilateral trade turnover between the two countries is not as good as expected.

However, since the beginning of the year, the art and handicraft import export turnover between Vietnam and Japan has shown signs of increasing, he noted.
Dung hopes that Vietnamese businesses will meet Japanese market demand in the future.

Japan to finance port, water system

Japan will help the coastal central city improve its deep sea ports, drainage and water supply systems, as well as boost exports of Da Nang and the central region of Viet Nam, Hideo Suzuki, Minister-Counsellor of the Japanese embassy in Viet Nam said during a visit here yesterday.

He said Da Nang was situated in the central region of Viet Nam and at the end of the East-West Economic Corridor – linking Myanmar, Thailand, Laos and Viet Nam. Thus it was highly important to boost the economy in the central region.

Chairman of Da Nang City People's Committee Van Huu Chien said the city needed Japan to launch direct flights from Japan to Da Nang in the future as well as improve the city's ports.

As scheduled, groups of Japanese investors will come to study the feasibility of sewage treatment and water supply projects next year.

Chief representative of the Japan International Co-operation Agency (JICA) Viet Nam Tsuno Motonori said JICA would have more discussions on improving the city's Tien Sa port's second phase of Lien Chieu port in coming years.

"Japanese investors will finish their feasibility studies on drainage and water supply systems for the city in the middle of next year. JICA will consider enlarging the project of the Tien Sa port soon," Tsuno said.

"JICA also helps Da Nang in co-operation with Yokohama city in building Da Nang as a green city in the future," he added.

Da Nang has two big ports including Tien Sa and Lien Chieu.

However, Tien Sa port only allows access of 30,000 DWT (deadweight tonnage) ships, while 50,000 DWT container ships can dock at Lien Chieu.

The city currently has 54 investment projects from Japan worth US$252 million – the fourth biggest investment of the city's total foreign investment capital of $3.45 billion.

Businesses, experts consider ways to free up tight credit flows

Considering the difficulties that enterprises are facing, measures to unfreeze capital flows were discussed during a meeting held yesterday in Ha Noi by the Viet Nam Chamber of Commerce and Industry.

Businesses which received credit preferences annually account for 12-13 per cent of the total number of operating firms. However, they are mostly large companies in the fields of agriculture, services and state-owned companies.

"It is clear that preferences have not yet focused on small sized enterprises," the chamber's general secretary Pham Thi Thu Hang said. Therefore, state resources concentrated on only medium and large companies, which did not generate as many jobs as smaller ones.

"The things lie in the criteria of small-sized businesses," she said. "If we change the concept of small firms, they will be able to access more capital."

Besides diversifying product range, enterprises should also extend their sources of funding, Hang advocated. "For example, if a company cannot reach a bank, it can totally come to an investment fund." However, getting support from investment funds came along with enhancing corporate governance, she added.

Therefore, she recommended the establishment of a professional corporate bond market, so that funds could join in and help enterprises. "The idea for a small – and medium-sized enterprise support fund was raised years ago but it has not been set up," she said.

The Government should also apply unsecured credit for businesses which have no collateral. In addition, credit guaranteed funds must be improved. "Currently, these funds operate very slowly and lack systematic arrangement," she added.

Meanwhile, interest rates were still claimed to be high. Meanwhile, inventories remained at a high level, with the figure of the processing industry as of April 1 increasing 32.1 per cent compared to the same period last year.

The number of newly established enterprises in the first four months of this year reached around 24,000 companies with a total capital of VND130 trillion (US$6.1 billion), declining 10.5 per cent in terms of quantity and 14.1 per cent in capital over the corresponding period last year. In addition, more than 17,700 businesses dissolved or halted their operation, up 9.5 per cent.

However, according to the chamber's latest survey, involved enterprises forecast that the situation would get better in the last two quarters of the year.

Responding to concerns over interest rate, head of the State Bank of Viet Nam's monetary policy department Nguyen Thi Hong said: "Although some companies claim that interest rates remain high, I think recent reduction is reasonable."

During the meeting, Hong announced that interest rates would continue declining by 1 per cent from next Monday. "We are approaching to dismiss deposit rate ceiling," she added.

Meanwhile, senior economist Le Dang Doanh alleged that enterprises should stop blaming policies. "They'd better restructure themselves to innovate, even when a merger or acquisition is needed."

Marine economy fails to reach potential, says forum

The domestic marine economy has not been exploited to its full potential, according to authorities at a forum on Viet Nam's Marine Brand Names, which was held on Thursday in Vung Tau city.

The forum, which was organised by the Ministry of Natural Resources and Environment and Vung Tau City People's Committee, heard more than 40 presentations on the commercial potential of Viet Nam's sea and islands.

Chu Pham Ngoc Hien, deputy minister of Natural Resources and Environment, said the potential of the domestic marine economy development was huge.

Revenue from the marine economy has contributed a large value to the country's economy, he said.

Last year, revenue from seafood exports reached US$5 billion. More than $4.4 billion from tourism and $12.1 billion from crude oil exports were recorded.

Viet Nam is considered to be one of 10 major centres with the highest sea biological diversity and one of 20 of the best areas in the world for seafood potential, according to Hien.

However, Dr Pham Anh Tuan, deputy head of General Directorate of Fisheries, said that exploiting effectiveness had not reached its full potential.

Localities have not co-operated with each other to develop a marine economy, leading to ineffectiveness in exploitation, according to Tuan.

Dr Nguyen Tac An, chairman of the National Committee on Oceanography of Viet Nam, said that to increase effectiveness in exploiting, Viet Nam should create a plan based on green development.

Asso.Pr and Dr Bui Tat Thang of Development Strategy Institute under the Ministry of Planning and Investment said that building infrastructure on the island should be given priority to attract investment and encourage people to live there.

He said the government should also choose several large islands that have large potential to develop economically, including Kien Giang Province's Phu Quoc Island.

Tran Minh Sanh, chairman of Ba Ria-Vung Tau Province People's Committee, said his province was building a system of ports, the best way to develop the marine economy. He recommended that the state government offer more investment incentives.

Exports to Japan, China soar

Viet Nam's export turnover to major markets of Japan and China sharply surged in the first five months of this year, thanks to the price hike of many products and a higher demand in the outlets, according to the Ministry of Industry and Trade.

The ministry said that average export prices of many products tended to rise significantly in the past months. Those of iron ore and other minerals surged more than 230 per cent, pepper 24 per cent, crude oil 10.3 per cent and plastic materials 7.5 per cent.

The ministry reported that export value to Japan reached US$5.5 billion, up 48.1 per cent over the same period last year. Crude oil exports topped the list with an earning of $1.11 billion, a rise of more than 110 per cent year-on-year. Seafood and footwear followed with $370 million and $150 million, up 22.54 and 42.31 per cent, respectively.

Export to Japan is expected to reach $1.2 billion this month, raising the total export turnover to the market in the first half of the year to $6.7 billion. This year's export turnover to Japan is estimated at roughly $14 billion.

The ministry also reported that export earning to China in the first five months rose nearly 30 per cent against the same period last year. Computer and electronic parts contributed the most with $684.7 million, up 221.5 per cent year-on-year.

The proportion of export staples to the Chinese market during this period is not different from previous years. Agricultural, forestry and seafood products represented 35-40 per cent of Viet Nam's total export turnover to China. Export value of minerals and energy accounted for 25 per cent while industrial and processing products made up 20 per cent.

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