The Government and the business community are at odds over how to stabilize rising pork and poultry prices until the year’s end.
The Ministry of Agriculture and Rural Development has called on animal feed producers to hold off their price increases to help put meat prices under control while businesses have asked the Government to make changes to the current price management policy.
Speaking at a meeting in HCMC on Tuesday on how to cope with volatile meat prices, a representative from CP Vietnam Livestock Co. attributed the rise of pork prices to diseases that had sent pig herds down and to recently stronger demands.
Higher production costs like exorbitant interest rates and material costs are also seen as a reason behind pork price increases. Chairwoman Nguyen Thi Le Hong of Proconco Vietnam conceded animal feed prices marked up seven times in the first half of the year due to rising material costs. But she noted the increase in animal feed prices was not necessarily the only cause of the pork price surge.
“Since July pig and chicken feed costs have risen 14% and 12% respectively and transportation costs have climbed 30% while prices of pork and chicken have soared 60-70%,” Hong said, indicating the pace of animal feed price rise was slower than that of pork and chicken prices.
The rise in pork prices is due to the lack of attention on the part of the agriculture authority, said Pham Duc Binh, deputy chairman of the Vietnam Animal Feed Association. Binh suggested the Government raise export tariffs on animal feed materials like cassava and reduce import taxes on those materials.
Nguyen Quoc Trung of Japfa Comfeed Ltd said the key was how to lower livestock production costs and that the agriculture ministry should bring down the feed material import tax to zero.
The Government will also need to offer credit and loan interest support for enterprises to buy large volumes of materials when prices stay low. “If producers can buy cheap animal feed materials for stockpiling for 4 to 5 months, feed prices will not increase in the rest of the year,” said Trung.
Meanwhile, Nguyen Chi Cong, the owner of a Dong Nai Province-based pig farm, put the blame on feed producers, saying feed material prices had declined in the past two weeks but feed producers had not cut prices, forcing pig farmers to keep high pork prices unchanged.
“Government support usually goes to livestock traders, not farmers,” said.
Airbus Military delivers coast guard airplane to Vietnam
Airbus Military said on Tuesday that it had delivered the first of three already-ordered C212-400 airplanes to the Vietnam Marine Police to support the latter’s maritime patrol.
The Vietnam Marine Police will take the second aircraft later this year and the third in early 2012. Equipped with the latest systems and technologies, including a Flight Management System (FMS), the coast guard airplane will help with coastal surveillance operations and those for controlling illegal fishing, drug traffic and smuggling, among others.
Rafael Tentor, head of Light and Medium Program at Airbus Military Head, said in a statement that the Airbus subsidiary looked forward to the upcoming entry into service of one of its versatile products to help enforce law on the Vietnamese coast.
Airbus Military said pilots and aircraft maintenance specialists had been trained to operate the aircraft at the Airbus Military Training Center in Spain. This C212 is the first Airbus Military product that the Government of Vietnam will operate.
To date, Airbus Military has sold 477 C212 to 92 different operators. With a maximum payload of 2.8 tons, the airplane was designed to operate in austere environments for long periods of time and has demonstrated itself as one of the most successful aircraft in the light transport segment for the most varied types of operations.
Export-import website to be launched
The Ministry of Industry and Trade plans to construct an e-commerce website starting from 2012 based on import and export activities.
Do Van Chien, director of the ministry's Information Centre, said that the website will offer support services to commercial transactions among enterprises focused on textiles, seafood, agricultural products, wood, rubber, footwear, leather, steel, fertiliser, plastic and handicrafts.
The website will also provide businesses with an opportunity of finding partners, expanding their business activities and exploring new markets, especially to small- and medium-sized companies, Chien said.
Similar to international B2B (business-to-business) websites, the MoIT's site will introduce customers to images, products and enterprise information, said Hoang Ngoc Oanh, deputy head of the ministry's e-commerce division.
She added that businesses will receive additional assistance in terms of dealing with customs, banking, transport and insurance via the new site.
For those enterprises new to doing business online, a trial site www.likevietnam.com will include introductions to online and offline e-commerce services.
Dinh Duc Thu, director of the VDC Online Company, said that Vietnam currently had 9,300 B2C (business-to-customer) and 3,000 B2B websites producing total revenues of $1.95 billion a year.
Enterprises involved in the above had helped promote the use of software in production and business, especially with regard to accounting, Thu said, adding that investment to management software had successfully been applied to workforces, supply chains and customers.
According to Thu, investment to e-commerce and information technology has accounted for 5 percent of total enterprise production and business costs.
Research has found that 58 per cent out of nearly 30 million-internet users source information related to commodities they plan to buy online before making a decision, providing Vietnam with a broad canvas on which to grow its e-commerce industry.
Le Danh Vinh, Deputy Minister of Industry and Trade and chairman of the Vietnam E-Commerce Association (VECOM), said that, while Vietnamese e-commerce had developed quickly over the past few years, the country still lagged behind in terms of development, compared to other parts of the world.
Tran Huu Linh, deputy head of the ministry's E-Commerce and Information Technology Department, said that his department planned to roll out policies, regulations and consultant services in support of enterprises applying e-commerce activities for production and business purposes. Vietnam 's total e-commerce transaction value is expected to reach $6 billion by 2015, according to economic experts.
Toyota Vietnam revives mobile vehicle service
Toyota Motor Vietnam Company will implement its third mobile vehicle service programme in 15 provinces nationwide from August 2 – 26.
Service will be available in the northern provinces of Lang Son, Bac Ninh, Hai Duong, Thai Binh, Nam Dinh, the central provinces of Quang Tri, Quang Binh, the Central Highlands provinces of Gia Lai and Lam Dong and the southern provinces of Binh Phuoc, Binh Thuan, Tay Ninh, Long An, Dong Thap and An Giang.
Established in September, 1995 at a total investment of $89.6 million, Toyota Vietnam is a joint venture between Japan Toyota Corporation, with 70 per cent of capital, Vietnam Engine and Agricultural Machinery Corporation, 20 per cent and Kuo Singapore Ltd. Co, 10 per cent.
Thanks to continuous investment in modern production facilities, after 15 years of operation, Toyota Vietnam has become Vietnam’s leading automobile manufacturer, leading in its local production ratio of 19 to 37 percent, depending on each model.
Toyota Vietnam also successfully called on its parent company’s auto part suppliers such as Denso, Toyota Boshoku and Toyota Gosei to invest in Vietnam.
Fruit, veggie exports likely $500 million
It is expected that Vietnam will earn $500 million from the export of vegetables and fruit this year, an increase of 10 per cent over last year, according to the Ministry of Industry and Trade (MoIT).
Products such as dragon fruit, pineapples, mangos, papayas, jackfruit, canned fruit and a variety of vegetables have been exported mainly to the US, the EU, Japan, Taiwan, Canada and mainland China, where imports are expected to increase following recent droughts and flooding.
During 2010, Vietnam's vegetables and fruit exports to China accounted for 4 per cent of the northern country's import turnover.
Exports to more strict markets such as Japan, are expected to bring in around $60 million this year, accounting for 0.7 per cent of Japanese import turnover.
Vietnam expects to collect an additional $70 million from its vegetables exports to Russia .
Regional markets such as Indonesia, Singapore and Malaysia are estimated to import more from Vietnam, and account for 10 per cent of the total export turnover of fruit and vegetable sector, the MoIT said.
Trade experts have noted that, in order to achieve its predicted export turnover, Vietnam should sufficiently support its farmers in pushing up production and implementing food safety and hygiene standards to penetrate foreign markets more effectively.
Petrovietnam's new power plant to buy Indonesia, Australia coal
Petrovietnam has awarded its subsidiary a contract to build a 1,200-megawatt coal-fired thermal power plant in southern Vietnam, which will use coal imported from Indonesia and Australia, a state-run newspaper said on Wednesday.
The unit, Petrovietnam Technical Services Corp (PTSC), would buy and install equipment, build and test-run the Song Hau 1 Thermal Power Plant in the Mekong Delta province of Hau Giang within 45 months, based on a broad agreement with state oil and gas group Petrovietnam, New Energy newspaper said.
The twin-turbine plant in the Song Hau Power complex would use coal imported from Indonesia and Australia to generate around 7.8 billion kilowatt hour per year, said the newspaper run by the Vietnam Oil and Gas Association.
It gave no projection on the coal import volume or further details of the Song Hau 1 project. The two sides would still need to sign a specific contract following the broad agreement.
The 5,200-megawatt Song Hau Power Complex would have three coal-fired power plants, the report cited a masterplan approved in March 2010 by the Industry and Trade Ministry as saying.
Last December, PTSC also won a Petrovietnam contract to build the $1.2-billion Long Phu 1 coal-fired power plant in southern Soc Trang province.
Coal will take over from hydro power as the leading fuel for new electricity generation in Vietnam, so far a net coal exporter, in the next five years, state utility Vietnam Electricity group has said.
Vietnam will raise its coal export tax to 20 per cent next month from 15 per cent, as the country moves to save the fossil fuel for domestic consumption while coal production in August would fall from previous months, state-run newspapers reported.
Africa a savior for textile firms
Africa is the promised land for local textile and garment firms.
Reality shows that the Southern African Customs Union (SACU), which consisted of Botswana, Lesotho, Namibia, South Africa and Swaziland, is undergoing radical changes for economic development and has a tremendous demand for import servicing local demands.
According to the Ministry of Industry and Trade (MoIT), among SACU’s five member countries, South Africa has the greatest demand for textile and garment import with import value reaching $2.7 billion in 2010. This country has to import most of the products for local consumption. Lesotho came second with an import value exceeding $140 million in 2010.
Though Vietnam is one of the world’s eight largest garment and textile exporters, the presence of such products in African is modest.
Vietnam’s textile and garment export value to South Africa amounted to $22.7 million in 2010, though South Africa is Vietnam’s largest import market among SACU members, according to MoIT figures.
Made-in-Vietnam textiles and garments enjoy strong competitive advantages with lower labour costs and high productivity.
Another favourable factor is that Vietnam and SACU countries are all World Trade Organization members.
To carve out a niche in the African market, local firms needed to have a more thorough grasp of customs, culture and payment methods, said deputy general director Thai Tuan Kieu at Thai Tuan Group.
According to South Africa’s Ministry of Industry and Trade, the top five textile and garment exporters to South Africa in 2010 were China with $1.47 billion, India $164 million, Pakistan $110 million, Mauritus $87 million and Germany $86 million. Total import value of these countries to South Africa came to $2 billion, representing 71 per cent of total textile and garment exports to this African country.
The MoIT just forecast Vietnam’s textile and garment export value might reach $13.5 billion in 2011, up 20.5 per cent on-year and $500 million higher than the target set in early 2011.
The figure was $6.16 billion in the first six month, up nearly 30 per cent against the same period in 2010
Casting cement exports in stone
Promoting export is seen as a good solution for the local cement industry to curb oversupply pressures.
In the first six months of 2011, Vietnam Cement Industry Corporation (Vicem) exported 610,000 tonnes of cement to diverse markets including Singapore, the Philippines, Bangladesh, Hong Kong and Laos and hopes it could export around 1.1-1.2 million tonnes of cement this year, said Vicem’s general director Nguyen Ngoc Anh.
Last year, Vicem failed to reach its export target of one million tonnes of cement.
In 2010 Vissai Ninh Binh, a big multi-field non-state economic group with cement production one of its core functions, marked a cornerstone in local cement industry development when it inked a $40 million contract for exporting 1.2 million tonnes of clinker to Bangladesh.
Under the signed contract, from September 2010 until August 2011 each month the group exported 100,000 tonnes of clinker to the foreign partner Hong Kong-based Peakward Enterprise.
The export contract will be finalised this month and the Vissai Ninh Binh is currently under negotiations with the foreign partner with a view to further supplying the product to this market.
According to the group’s chairman Hoang Manh Truong, the foreign partner was strong in transport but not just simply a building material import-export trader which could help local firms lessen pressures when hiring ships for export shipments.
Reality shows that made-in-Vietnam cement is now seen in different Asian markets and most recently in Africa. Vicem recently made a careful survey of Myanmar’s cement market.
The survey shows that Myanmar has tremendous demand for cement import as its local production could just satisfy half of the demand. This Asian country has for years sourced cement from Thailand, Malaysia and China.
Besides, cement export prices to Myanmar are more competitive than those to Bangladesh, Laos or Cambodia’s markets. According to the Ministry of Construction, the cement import price under cost, insurance and freight (CIF) terms at Myanmar’s Yagoon port ranges from $85-$89 per tonne and actual selling prices are from $100-$110 per tonne.
According to Vicem’s latest report, around 1.4 million tonnes of cement are currently stockpiled at local firms as the supply far outran the demand.
Local bike-makers start to wobble
Local motorbike firms are being knocked out by poor competitiveness.
A decade ago motorbike manufacturing and assembly was a fertile land to local firms which amounted to 56 in the early 2000s.
There were 1.629 million motorbikes made and assembled in Vietnam by local and joint venture firms in 2000, up to 1.268 million units came from local firms, accounting for 78 per cent.
In 2001, local firms churned out 1.869 million units out of total 2.169 million motorbikes made and assembled in the country, representing 86 per cent in total.
Local firms, however, failed to retain these record figures. In 2003, the motorbike volumes made and assembled by local firms slid to 61 per cent in total and kept falling continually.
In 2010, of total 3.1 million registered motorbikes just 47,000 units were made and assembled by local firms out, less than 2 per cent in total. The number of local firms active in motorbike manufacturing and assembly also tumbled from 56 to 30.
The local firms’ Achilles’ heels were poor styles and designs, lack of brand development strategy and a competitive edge.
Vietnam Automobile, Motorbike and Bicycle Association statistics show that more than half of the current 30 local motorbike firms struggle to operate and it was also impossible for these cash-strapped firms to make in-depth investment to ameliorate competitiveness.
According to scores of motorbike dealers consumers tend to opt for competitively-priced motorbike lines made by foreign-backed motorbike joint-ventures as such motorbikes have more stable quality and clear guarantee terms. Besides, these firms often sign contracts with financial companies to help buyers own the vehicles with payment by installments.
Statistics show that of total 3.14 million motobikes sold in Vietnam in 2010, 1.7 million units came from Japan-backed motorbike join venture Honda Vietnam Company (HVN), accounting for 54 per cent. HVN announced the plan to build its third $120 million factory in northern Ha Nam province, hiking its production to 2.5 million in late 2012 from current two million units per year.
Rice exporters face big hurdles
The door to rice exporting is to be ring-fenced from October 2011.
In light of Decree 109/2010/ND-CP dated November 4, 2010 and effective from October 2011, to become eligible for rice export, businesses must have at least a specialised rice store with a minimal carrying capacity of 5,000 tonnes and a rice husking facility with capacity of at least 10 tonnes per hour positioned in the same location.
The new Ministry of Agriculture and Rural Development (MARD) requirements are seen as a major hurdle for firms getting rice export certificates.
The Vietnam Food Association (VFA) said these requirements were unreasonable as businesses often located rice husking facilities at material growing areas, while the store system and rice polishers are usually placed in different areas.
The VFA asked the MARD to address the issue in mid-July 2011, but no feedback had been received, according Northern Food Corporation general director Tran Ba Hoan.
Earlier on June 3, the Ministry of Industry and Trade forwarded enterprises’ proposals to the MARD, but no effective solutions are in place.
Under VFA appraisals, only around 80 firms are eligible to gain the rice export certificates in light of Decree 109 and just seven firms actually obtained the certificates.
As a result, the jury is out on whether the registered exporters can serve the nation’s needs.
VFA chairman Truong Thanh Phong said: “Streamlining rice export is crucial as of the 200 firms joining rice exports so far the year, only 50 firms reported export volumes of at least 10,000 tonnes each per month and their export volume made up 92.7 per cent of total, meanwhile around 100 firms just exported several hundred tonnes per month and had no rice stores or husking facilities at all.”
In regard to how to avoid price-related risks, chief AgroMonitor economist Pham Quang Dieu was quoted as saying “Hoarding materials first before clinching export deals is a wise decision. Otherwise, businesses will incur heavy losses in the face of escalating material costs.”
Vietnam’s e-commerce to reach $6 bln by 2015
Vietnam’s total e-commerce will reach $6 billion by 2015, forecast economic experts at a seminar hosted by the Vietnam Chamber of Commerce and Industry in Hanoi on August 2.
A research found, 58 per cent of nearly 30 million internet users go online to find out about information related to commodities they plan to buy before making decision. This offers chances for Vietnam’s e-commerce industry to grow.
At the event, the delegates shared solutions for a comprehensive and safe online payment, a prerequisite factor for the development of e-business in the future.
Vinashin gets back port
Vinashin Group, which almost went bankrupt last year after failing to repay debts, has got back control of in Thua Thien- Hue Province after the government changed its mind about transferring it to the local administration.
The shipbuilder had transferred control of the port to the local authority at the end of June.
It will now expand Chan May into a hub for industrial, commercial, and tourism development in the central region.
The port was built in 2003 by the province and handed over to Vinashin in 2007.
It has a 420-meter long, 12.5-meter deep wharf that can handle vessels of up to 30,000 tons.
It handles 1.5 to 2 million tons of cargo a year on average.
Vinashin, the country’s biggest shipbuilder, nearly went bust last year after defaulting on a US$4.1 billion debt.
But the government stepped in to offer financial assistance.
Ten per cent tax hits gold jewellery only 80% pure
An export tax of 10 per cent will be imposed on jewellery with a gold purity of more than 80 per cent, according to a circular issued by the Ministry of Finance on Tuesday.
Currently, the 10 per cent rate applies only to gold jewellery with a purity of more than 99 per cent. The ministry said it based its decision on a proposal from the State Bank of Viet Nam and other relevant bodies, seeking to minimise the export of unprocessed gold.
The State Bank also expected that the hike, which goes into effect tomorrow, will help prevent gold traders using loop-holes to avoid taxation. Some gold traders reprocess the purity of their gold jewellery to evade payment, it said.
Huynh Trung Khanh, advisor to the World Gold Council in Viet Nam, praised the tax, saying it was a necessary measure to encourage the export of jewellery.
As of now, gold traders mainly import gold bullion and then export it again when the world price rises above the domestic price.
Khanh said that the export of unprocessed gold therefore did not benefit the economy but only speculators, since it generated no jobs.
Besides the tax, the finance ministry is also asking customs authorities to perform more stringent checks on the origins and purity of jewellery exports to minimise fraud.
According to statistics from the General Department of Customs, the country exported around 24 tonnes of gold, mainly jewellery, in the first six months of this year. Total export turnover of precious stones and metals during the period reached US$1.2 billion, up 133 per cent from the same period last year. Traders in the domestic market pushed up the gold price to an all-time high of nearly VND41.4 million (US$2,008) a tael (1.2 ounces) yesterday though the world price traded at $1,664.75 an ounce on the London Bullion Market.
Coal export tax will increase next month
Export taxes on all kinds of coal would be increased from the current 15 per cent to 20 per cent as of September 11 to limit the outflow of the natural resource, according to a new circular issued by the Ministry of Finance.
Under the circular, export tariffs on other natural resources such as brass, aluminium and lead would also be raised from next month.
The move was made in response to a recent shortage of coal to fuel the country's thermal power plants that had led to a need to import the mineral, the ministry said.
The Viet Nam National Coal and Mineral Industries Holding Corp (Vinacomin), the country's largest coal supplier, said that it would gradually cut coal exports to 3 million tonnes a year by 2015 from 16.5 million tonnes this year. It currently exports up to roughly 2 million tonnes of coal a month.
Vinacomin said that last month it produced 3.6 million tonnes of coal, lifting the total output in the first seven months of 2011 to more than 26 million tonnes, up 3.4 per cent over the same period last year. The country exported 9.9 million tonnes of coal during the January-July period, down more than 10 per cent.
Experts estimated that the country would have to import 10 million tonnes of coal both this year and next, mostly low-energy bituminous coal for use in power stations. That figure was estimated to reach 100 million tonnes by 2020 to meet the urgent demand for electricity as well as the demands of other industries such as steel and cement.
Deputy Minister of Industry and Trade Nguyen Thanh Bien said the ministry would build a reasonable strategy on coal imports and exports to ensure energy security.
To meet the rising domestic demand, Vinacomin's acting deputy director Vu Manh Hung said the Government should approve a plan to explore and exploit the coal basin in the Hong (Red) River Delta soon.
Vinacomin would need roughly US$1 billion annually to increase coal production to 48 million tonnes in 2015 – 8 million tonnes higher than the current output – and to 55-70 million tonnes in 2020. Demand was estimated to reach 54 million tonnes in 2015 and 150 million tonnes in 2020.
State companies to cut investment
State-owned enterprises will be required to reduce investments in non-core lines of business from no more than 30 per cent of equity to no more than 15 per cent, under a draft decree being compiled by the Ministry of Finance.
A number of major State-owned enterprises have invested in high-risk lines of business, including banking, securities and real estate development, with capital investment reaching to trillions of dong.
Electricity of Viet Nam (EVN), for example, currently has about VND3 trillion (US$145.6 million) invested in lines of business unrelated to electricity – or about 3 per cent of its equity. The national oil and gas group PetroVietnam, through its subsidiaries, has also invested heavily in real estate projects and financial institutions.
Firms would be urged to reduce these investments while ensuring the financial security of the enterprises and avoiding losses of State capital.
Viet Nam National Textile & Garment (Vinatex) Group deputy general director Pham Nguyen Hanh said that this was easier said than done in the current economic climate, with the stock market in a prolonged downturn. Enterprises had their hands tied in terms of divesting from these non-core lines of business, unless they were willing to accept losses, Hanh said.
Realistically, the process needed to take place over a long period of time, according to a specified schedule, she added.
Anticipating these concerns, the ministry has suggested that enterprises facing difficulties in divestment should transfer these assets to the State Capital Investment Corporation (SCIC).
Under a pilot prog-ramme that began last month, wholly State-owned enterprises are being required to declare their assets, including fixed assets and working capital, cash on hand and other liquid assets.
The ministry was also drafting regulations to improve corporate responsibility in the management and use of State capital and assets, and these provisions were expected to help business leaders and State agencies more readily detect weaknesses in operations, said Deputy Minister of Finance Tran Van Hieu.
Hieu said the ministry has also proposed that the Government strengthen sanctions on business managers who fail in their duty of financial man-agement.
The draft decree on management and use of State capital in State-owned enterprises is currently being circulated among relevant agencies for comment. If it is issued, it would replace Decree No 09/2009/ND-CP.
HCMC eyes 17% export growth
The southern hub of HCM City aimed to post an annual export growth rate of 17 per cent from now until 2015, earning a total turnover of around US$100 billion, excluding crude oil.
These figures were announced during a conference held on Wednesday to review the city's exports over the past four years and draw up action plans for the following five years.
To reach these goals, the city planned to maintain export growth of commodities with high turnover and potential, said the municipal People's Committee.
Accelerating its service exports and enhancing the presence of the city's export goods in the vast European, American and Asian markets would also be a priority, it said.
Attendants at the conference suggested the city's authorities should continue to implement export support programmes on software products and services, aiming to enhance the added value from software outsourcing to production and establish a logistics centre at Cai Lai Port in an attempt to promote local exports.
The city recorded an average annual export growth of 18.5 per cent over the past four years, exceeding the target of 17.4 per cent per year, according to the municipal Department of Industry and Trade.
Agro-forestry and fisheries products faced difficulties with raw material sources as well as varying standards and taxes in foreign markets. However, the group also reached average export growth of 18.7 per cent per year, surpassing the target of 7.3 per cent.
Meanwhile, due to the impacts of surging costs and lowered competitiveness, the industrial sector reached an average export growth of only 17.5 per cent per year, lower than the previous target of 21.7 per cent.
Over the first seven months of this year, the city generated over $15 billion from exports, a surge of 21.7 per cent against the same period last year. During that period, exports from the State-owned sector rose by 22.5 per cent, while the foreign-invested sector was up 19.4 per cent.
Among the city's key export items were garments and textiles, footwear, seafood, agricultural products and electronics while the US, ASEAN, the EU, Japan and mainland China remained its major outlets.
However, inadequate support industries, low value export goods due to outsourcing and the high deposit interest rate remained challenges for domestic exporters, agreed attendants.
Discount rates may force funds to divest
Viet Nam's stock market was attractive for investment in terms of valuation, but high discount rates at many investment funds hindered these funds from raising capital overseas, said Dragon Capital's General Director Dominic Scriven.
Discount rates (the different percentage between market price and net asset value per fund certificate) of four listed fund certificates, including Manulife Progressive Fund (MAFPF1), Prudential Balanced Fund (PRUBF1), Viet Nam Securities Investment Fund (VFMVF1) and Viet Nam Blue-chips Fund (VFMVF4), are all currently over 40 per cent.
The rates at Viet Nam Equity Holding, Viet Nam Holding and VinaCapital Viet Nam Opportunity are also hovering over 30 per cent, according to Dragon Capital.
"High discount rates create liquidity risk," Scriven said, adding that some funds could be ac quired in these two years, but if no new cash flow was supplied, these acquisitions would put more pressure on the market.
According to Scriven, the stock market is entering a period when closed-end funds traditionally consider whether they should remain in the market. "Most shareholders of funds vote for withdrawal," he said.
Le Xuan Nghia, vice chairman of the National Financial Supervisory Committee, said the amount could be anywhere from VND20 trillion (US$970.9 million) to VND30 trillion ($1.45 billion).
Scriven noted it would not be easy for funds to withdraw capital during this period, due to the prolonged downturn on the stock market. If measures are not adopted to transfer closed-end funds to open-end funds, he said, funds would withdraw from the market.
Vice Chairwoman of the State Securities Commission Vu Thi Kim Lien said the market was in a "tragic situation", in which 45 per cent of listed companies had price-to-earnings (P/E) ratios of less than five times.
More qualify as rice-export firms
Viet Nam had 44 companies that reached the necessary standards to obtain a licence to export rice under Decree 109 issued by the Government on the management of rice exports, said an official from the Ministry of Industry and Trade.
Phan Van Chinh, director of the ministry's Import and Export Department, said there were 50-60 rice exporters that could potentially reach the standards necessary to be granted a licence.
By August, the ministry had granted export licences to 29 firms and 15 more were pending, Chinh said.
He added that the Ministry of Agriculture and Rural Development had been asked to review one of the conditions of the licence, that stipulated that the processing of rice must be carried out in one location, rather than different stages in different locations.
Businesses were also struggling to meet drying regulations outlined in the decree, he said.
In response to this, the ministry worked with the Ministry of Agriculture and Rural Development and agreed that equipment and milling facilities did not have to be located in the same place.
Drying regulations, however, were compulsory to ensure the quality of export rice, he said.
Deputy Minister of Industry and Trade Nguyen Thanh Bien said his ministry, the Ministry of Agriculture and Rural Development and the Viet Nam Food Association had carefully discussed when these regulations should come into effect, and decided that nine months was an appropriate time frame for exporters to comply.
However, a report said there remained many obstacles that had not been taken into account, as well as market conditions this year, he said.
The Ministry of Industry and Trade has arranged a meeting on August 9 with businesses and authorities from the Cuu Long Delta provinces, the country's largest rice production region, to find a solution.
Regulations would be applied flexibly so as not to affect targeted rice exports for this year, Bien said.
Store brands can be double-edged sword
Although customers benefit from the lower prices of brands developed by supermarkets, manufacturers of similar products could suffer because of the competition, experts have said.
To fully tap their distribution advantages and attract consumers, many supermarkets, including Metro, Sai Gon Co.op and BigC, have developed their own brands, mainly for food and cosmetics.
Experts forecast that, in the next three years, one out of every four products at supermarkets will be their own brand.
The products bearing supermarket brands are usually 10 to 30 per cent cheaper than similar goods.
Analysts said that lower prices do not necessarily mean that the products have lower quality. They are cheaper because the distributors do not have to pay for certain costs. such as advertising and costly packaging, along the supply chain.
Distributors usually place their own brand products in important positions in the store, where customers can easily see them when they enter a store.
According to the Business Study and Assistance Center, there are about 51 domestic enterprises out-sourcing products for supermarkets.
Speaking at a meeting organised by the Viet Nam High Quality Goods Association last week, Bui Duc Hue, sales director of Sai Gon Paper Corporation, said these products would not hurt those manufacturers who understand their customers.
Because supermarkets' own brands are distributed through modern distribution channels, which are not common in traditional markets, he said manufacturers should expand their distribution to rural and remote areas.
For manufacturers with limited capital, being an outsourcer for supermarkets offered a good opportunity to increase production capacity, he added.
However, Nguyen Duy Thuan, director of BDS Consulting Company, said it was a double-edged sword for producers because their products must directly compete with products bearing supermarket brands.
For example, Sai Gon Paper produces paper for the supermarket's own brand name but also sells its Sai Gon Paper-branded product in the same supermarket.
A representative of Chi Thanh Plastic Company said manufacturers should be careful and not ignore the quality of their own products if they take on outsourcing contracts for supermarkets and other companies.
Otherwise, they could lose their own brands and may have to become professional contractors for supermarkets, he said.
Many participants agreed that distributors' own brands were a threat to manufacturers, especially to small companies with lesser-known domestic brands.
However, because the trend for stores and distributors to develop their own brands is expected to become more commonplace, producers must take the initiative and develop measures to cope with it.
Footwear exports hit new high
Footwear exports last month hit US$600 million, pushing total earnings in the first seven months this year to $3.62 billion, an increase of 30.7 per cent over last year, according to the General Statistics Office.
General Secretary of the Viet Nam Leather and Footwear Association (Lefaso) Nguyen Thi Tong said that with current market prospects, the footwear industry would likely meet its annual export target of $6 billion.
Tong added that the industry had been focussing on the export of high quality products, with low-end footwear sales declining by roughly 46 per cent.
Despite being the world's third-largest producer of leather and footwear, Viet Nam has only recently started pushing its own brands, according to Lefaso Deputy Chairman Diep Thanh Kiet, who said that foreign customers were still more used to Italian and Chinese products compared with those from Viet Nam.
The export of suitcases, bags, hats, wallets and umbrellas in the first seven months of this year reached nearly $730 million, an increase of 35.6 per cent over last year, according to Lefaso.
Lefaso said that such a high increase had helped the export of the leather products become one of the country's ten most successful ventures.
Deputy Chairman of Lefaso Nguyen Duc Thuan attributed the surge to high-profile companies shifting their production operations from China to Viet Nam, whose businesses were expanding their facilities to meet the rising demand.
Viet Nam exports its suitcases, bags, hats, wallets and umbrellas mainly to the US, Japan, France, Germany and Belgium.