The dong-dollar exchange rate is forecast to calm in late 2011 amidst a plentiful dollar supply.
Though the rate was relatively stable in the past three months, industry experts warn the 2010’s scenario might return unless relevant agencies came up with appropriate measures to lock down the forex market.
A government report in late June 2011 showed that the dong lending slid 0.43 per cent in total amount as of June 20, 2011 against the previous month and only hiked 2.76 per cent compared to late 2010. Meanwhile, dollar lending rose 2.43 per cent against the previous month and surged 23.5 per cent against late 2010.
“In 2010, the [dong-dollar exchange] rate was fairly stable in the first seven months. Then the forex market incurred a growing tension in the second half of the year until early 2011,” said a Vietinbank branch director Pham Xuan Hoe.
Accordingly, total committed foreign direct investment in the first half of 2011 was just half of that during the same period in 2010 and the economy now faces a growing trade deficit and lower remittance inflows.
Besides, businesses rushing into taking dollar loans are also susceptible to risks. To avoid high dong lending rates of over 20 per cent, many local firms resort to taking dollar loans then convert them to dong.
Central Institute for Economic Management deputy head Dr. Vo Tri Thanh assumed the current exchange rate stability would be unsustainable as the exchange rate faced great pressures amid spiraling trade deficit and inflation. To keep the rate stable in the long run, raising local people and businesses’ confidence in the dong currency was essential, according to Thanh.
Vietnam Small and Medium Size Enterprises Association chairman Dr. Cao Sy Kiem said the dong-dollar exchange rate would incur growing tension late in the year due to seasonal features and the rate’s volatility would depend chiefly on the way central bank handled fiscal and monetary policies and the outcomes of inflation busting Regulation 11/NQ-CP enforcement.
Scores of financial and banking experts assumed to have a stable exchange rate in the long term the State Bank must have huge dollar volumes to control the market when necessary. The State Bank reportedly bought $3 billion in dollar reserves so far this year.
Deposited dollar amounts saw a 3.6 per cent decline as of June 20, 2011 against late May. The situation, however, is expected to change following central bank’s Circular 13/2011/TT-NHNN which regulates that from July 1, 2011 state-owned corporations, groups and their member units holding over 50 per cent of state ownership capital are obliged to sell dollars to credit organisations. If the circular is properly handled, it will help ease the dollar tension by the year end, paving the way for a stable dong-dollar exchange rate in the long term.
First collagen factory opens in Can Tho
Binh An Seafood Joint Stock Co. (Bianfishco) last Thursday inaugurated a collagen drink factory in Tra Noc II Industrial Park in the Mekong Delta city of Can Tho.
The project covers a total area of 9,000 square meters with the invested capital of over US$10 million. It is equipped with European technology able to turn out 500,000 collagen cans daily.
Pham Thi Dieu Hien, chairwoman cum general director of Bianfishco, said the product has collagen, amino acid vitamins and fruit juice that can help fight ageing and asthma. The product will be available at many supermarkets nationwide, although 70% of its output will be for export.
The factory is expected to generate VND100 billion in revenue this year and VND1.2 trillion in 2015.
Vietnam Airlines to increase services
Vietnam Airlines recently announced that it would add more than 1,350 fights on 12 domestic routes during the peak summer season from July 1 to August 15.
"With the increase of flights, the airline expects to ease overload due to increased travel demands," said Vietnam Airlines representative Nguyen Hoang Dung.
According to the air carrier, total transport will be increased by 1.6 million seats, a rise of 12 per cent compared to the same period last year.
On the Hanoi-Ho Chi Minh City route, total transport will be increased to more than 460,000 seats, an average of 5,000 seats/day/way. The airline will also provide a total of 210,000 seats from Ho Chi Minh City to Danang and 190,000 seats from Hanoi to Danang.
Flights on key tourism routes to Hue, Nha Trang, Da Lat and Vinh cities, and Phu Quoc and Con Dao islands are also set to be increased.
Nation records $20 bln in industrial value
Industrial production in the first six months of the year reached VND418.4 trillion (nearly $20 billion), an increase of 14.3 per cent over the same period last year, according to the Ministry of Industry and Trade.
Most of production materials and consumption products saw high growths. Electricity increased by 11.2 per cent; cement, 14.7 per cent; liquefied gas, 19 per cent; petroleum, 25.3 per cent.
In the reviewed period, the industrial sector earned an export value of $42.3 billion, a year-on-year increase of 30.3 per cent.
Of them, the export of fuel and mineral products fetched $5.2 billion, 26.3 per cent year-on-year increase.
The ministry forecast that the sector would see an export turnover of $85.5 billion by the end of this year with trade deficit of $14.5 billion, equal to 16 per cent of the export value.
Footwear exports hit record high in June
Monthly leather and footwear exports for the first time exceeded the threshold of $600 million in June, according to the General Statistics Office.
June's export earnings of $610 million lifted the industry's exports in the first six months of the year to nearly $3 billion, up 31 per cent from the same period last year, the office said.
The Vietnam Leather and Footwear Association was also optimistic about the industry's export potential in the second half of the year, saying that many producers had already received export orders for the second half.
The association said that this year's volume of export orders had increased by roughly 20 per cent compared to last year, and the orders' prices also surged by roughly 7-10 per cent.
Despite the favourable conditions, domestic leather and footwear producers were currently facing a shortage of labour, forcing some of them to refuse new export orders, the association said.
The association's vice chairman Diep Thanh Kiet added that the domestic leather and shoe industry also faced obstacles in the form of high interest rates and inflation, as well as the rising cost of raw material this year.
The leather and footwear industry this year targeted an export turnover of $5.5 billion after gaining nearly $5.1 billion last year.
At present, Vietnam's leather and footwear products are exported to 50 countries and territories worldwide including the US, the EU, Japan, Belgium, Holland, France and Denmark. The country is one of the world's 10 leading footwear exporters.
With a sector growth strategy for 2020 approved recently by the Ministry of Industry and Trade, which will focus on the development of supporting industries as well as material supply, the industry expected to earn $9.1 billion in export turnover by 2015 and $14.5 billion by 2020.
Long An has more IPs to house new investors
Prime Minister Nguyen Tan Dung has allowed the Mekong Delta province of Long An to convert its existing seven industrial clusters into industrial parks (IPs) and add them into a priority list for construction until 2015 and towards 2020.
The Industrial Park Authority of Long An Province said the seven industrial parks have a total area of more than 1,100 hectares.
The seven new IPs include Tan Do (208 hectares), Hai Son (366 hectares), Phuoc Dong (129 hectares), Thinh Phat (74 hectares), Nhi Thanh (118 hectares), Long Phung (100 hectares) and Thu Thua (188 hectares).
Three of these parks are now attracting investors and others are developing infrastructure construction, according to the province.
The activities must be carried out to ensure the efficient use of land. Adding the new IPs, Long An will have a total of 30 industrial parks with the total area of more than 10,000 hectares.
In the first six months of this year, operational industrial parks in Long An Province attracted US$33.52 million and more than VND1.479 trillion from 35 fresh FDI and domestic projects inflow.
Operational industrial parks have so far attracted 453 projects and use more than 915 hectares of land and over 13 hectares of workshops. Among them, 164 are foreign invested projects with pledged capital of nearly US$1.364 billion and the rest are local ones with capital of VND18.443 trillion.
In recent years, Long An has offered more investment opportunities for domestic and foreign investors as it acquires more advantages and potential compared with other provinces in the key southern economic region. It borders HCMC, the largest city in Vietnam, Tay Ninh, Tien Giang and Dong Thap provinces. It is adjacent to Cambodia in the south-west.
Another advantage is that Long An connects to the Eastern Sea through the Soai Rap estuary, sharing 137.7 km borderline with Cambodia with two national border gates and three secondary border gates.
Tax incentives to boost support industries
From August 18, imports of equipment and machinery for technology assembly lines that are not made by domestic producers will be given import tax breaks as part of a Government plan to enhance support industry development, the Ministry of Finance has announced.
Circular 96/2011/TT-BTC, issued by the ministry earlier this week, will modify soft financial policies specified in Government Decision 12/2011/QD-TTg issued in February to encourage support industry development in the machinery and manufacturing, electronics and information technology, automobile assembly and production, textile-garment and leather shoes sectors.
According to the circular, projects that support high-tech products will also be exempt from corporate income tax.
Imported commodities – including magazines and textbooks which are used in high technology research and development – will also enjoy tax breaks.
Largest thermo-power project to get nod soon
Hai Duong Province expects the country’s largest thermo-power plant project by Malaysia’s Jaks Resources Berhad Group will be approved by the Government soon, said a vice chairman of the northern locality.
Nguyen Trong Thua told the Daily on Thursday that the project had been submitted to the Prime Minister for approval after appraisals from related ministries and agencies. If approved, the 1,200MW power plant project costing US$1.9 billion will be the country’s largest of its type.
“If the project is licensed and starts its power generation in 2014 as scheduled, it will become the largest thermo-power plant in the country then. Currently, Pha Lai thermo-power plant with a designed capacity of 1,040MW is the biggest one,” he said.
Thua said the provincial government has prepared a site of 200 hectares in Kinh Mon District for the Malaysian group to build the plant.
Jaks Resources Berhad Group will develop this project under the build-operate-transfer (BOT) format. The group is negotiating with authorities for operating the plant in 35 years before handing it over to the country, said the vice chairman of Hai Duong Province.
Two years ago, the Ministry of Industry and Trade and the Malaysian group signed a Memorandum of Understanding for the thermo-power plant.
Falling global cotton price hits local manufacturers
The falling price of cotton on the global market is exposing local manufacturers to losses as they have purchased the material at higher prices and thus cannot sell finished products for a profit, an industry source said.
Nguyen Hong Giang, secretary general of the Vietnam Cotton and Spinning Association, told the Daily via the phone last Friday that the cotton price in New York has slid to around US$3 a kilo from US$5 in March.
Giang said the sharp fall of the cotton price since the first quarter has been causing difficulties to local yarn manufacturers who have to import 80% of materials to make yarn for export. Normally, each of them has to keep in stock a few thousand tons of cotton in advance before accepting export orders.
“The import price, inclusive of cost, insurance and freight, has dropped from US$4.2 per kilo when the contract was signed to nearly US$3.2 when the cargo arrived in the storehouse in Vietnam that took nearly one month. After production, the yarn currently has the new sales price at only US$3.9 per kilo and that explains why many yarn manufacturers incur losses,” he said.
Truong Ho Long, director of the yarn company Dong Phat in Hanoi, said the cotton price fall not only caused losses but also made his business stagnate as buyers waited for the price to fall further.
According to the General Statistics Office, the local yarn industry has imported 185,000 tons of cotton worth US$640 million in the year’s first half, down 2% in volume but almost twice the value of that in the same period last year.
Vietnam, EU to talk soon on wood export conditions
The European Union and Vietnam will hold talks in September on new conditions for the latter to boost exports of furniture made from legally-harvested timber under the EU’s Forest Law Enforcement, Governance and Trade Support Program (FLEGT).
Huynh Van Hanh, vice chair of the Handicraft and Wood Industry Association of HCMC (Hawa), told a meeting in HCMC last week that the coming talk would be a major step towards a bilateral FLEGT’s Voluntary Partnership Agreement between the two sides.
The talk is expected to bring forth a definition about the legality of timber in Vietnam’s conditions, and thus clear barriers for Vietnam to increase shipments to the EU, said Hanh, who is also a member of the advisory team on the matter.
“The talk is aimed to bring agreement between the two sides (on technical issues), helping local wood processors expand exports to EU as well as increase the ability to adapt to new regulations of the EU that will take effect by 2013,” he said.
At the talk, the team will also give presentations on the situation of locally-sourced and imported timber, as well as the roles of relative sides in timber supplies, Hanh told the meeting held to give guidelines on U.S. Lacey Act and EU Timber regulations. The meeting was organized by Hawa and TFT.
The talk will also discuss the EU’s Timber Legality Assurance System (TLAS) that covers control of the supply chain, including the verification, licensing and independent monitoring on timber.
This will be the second round of talks on the matter, following the first one held between the EU and Vietnam in November last year. The last round of talks is expected in 2012, to be concluded by the signing of a Voluntary Partnership Agreement.
However, Huynh Quang Thanh, director of a 500-strong factory in Binh Duong Province, it is not easy to settle issues relating to the legality of timbers as wood-working enterprises have to import materials from different sources from North and South America to ASEAN countries and Australia among others.
Currently, Thanh is collaborating with TFT, a foreign non-profit organization, to apply practical procedures and strengthen a surveillance system on the source of materials, from the foreign supplier to the factory, in order to make sure that his input is totally legal.
“Using products whose source is unclear is very dangerous, hence I have to protect my business by adapting a surveillance system on the timber source, before EU apply new regulations,” he said.
Vietnam exported over US$3.4 billion worth of wood products in 2010, and sales are forecast to grow to a record US$4 billion this year. Vietnamese products are exported to 120 countries around the world, with the U.S. accounting for 38% and the EU 44%.
Both markets have adopted new laws banning the import of illegal timber. The U.S. Lacey Act was amended in 2008, including timber and timber products. Meanwhile, EU timber regulations through the FLEGT Action Plan also closely monitor timber sources.
Vietnam, Singapore connect on economic connections
The seventh Vietnam-Singapore Ministerial Meeting on Economic Connectivity, presided over by Vietnamese Minister of Planning and Investment Vo Hong Phuc and Singaporean Minister of Industry and Trade Lim Hng Kiang, took place in Hanoi on July 4.
Attending the meeting were representatives of ministries, sectors and localities of Vietnam and Singapore involved in cooperative activities in the framework of six fields of the Vietnam-Singapore Agreement on Economic Connectivity (VSAEC), plus major groups and companies of Singapore which were cooperating with Vietnam in selected projects.
During the meeting, the two sides informed each other about the results of economic cooperation between the two countries over the recent eight months. They also exchanged measures to strengthen and further promote economic cooperation between the two countries.
Vietnam affirmed its viewpoints and interests in economic cooperation with Singapore , suggesting that Singapore closely work with Vietnam to deploy new initiatives in the framework of VSAEC.
Vietnam also encouraged Singaporean businesses to invest in the country, aiming to foster equal and mutually beneficial cooperative relations between the two countries’ partners.
Signed in 2005, VSAEC was a comprehensive cooperative programme between the Vietnamese and Singaporean governments, focusing on specific fields including finance; education and training; transport; information technology and communications; investment, trade and services.
Under VSAEC, the Vietnam-Singapore Ministerial Meeting on Economic Connectivity is organised annually to review the implementation of the agreed contents as well as to plan action programmes for cooperation in the future.
The next meeting was scheduled to take place in Singapore later this year.
Cat Bi looks towards a modern airport
Cat Bi airport in the northern port city of Haiphong is being upgraded to become a modern airport.
The airport is set to meet 4G standards of the International Civil Aviation Organisation (ICAO) and the first level for a military airport.
It is expected to have a parking place of 11 planes and a capacity of receiving A321 and B767 aircrafts and handling 800 passengers per hour and 17,000 tonnes of cargo annually by 2015.
In the first half of this year, a total of 2,279 flights carrying over 300,000 passengers and more than 2,600 tonnes of cargo went through the airport.
The number of visitors to Cat Bi has especially jumped since the national flag carrier, Vietnam Airlines, resumed the Hai Phong-Da Nang air route at the end of last April after nearly ten years of hiatus.
As of June 4, Vietnam Airlines launched two more flights on every Tuesday and Saturday, raising the total number of flights on the route to seven per week.
Flights depart from Haiphong at 20:45 pm and from Danang at 18:30 pm, each lasts about one hour and 35 minutes.
Insurance a case of trial and error
Great effort is needed to ensure the successful trial of agricultural insurance.
Agricultural insurance incurred many failures in the past. As a result, its trial application, which started from July 1, 2011 in 21 provinces and cities in light of the Decision 315/2011/QD-TTg dated March 1, 2011, will put great pressure on both the government and insurers.
“We came up with rice plant insurance in the early 1980s in northern Nam Dinh province. However, our efforts ended in vain due to poor awareness about the product among farmers,” said Vietnam National Reinsurance Joint Stock Corporation chairman Trinh Quang Tuyen.
Tuyen said it was important to clarify associated risks, insurance areas and compensation footing to ensure agricultural insurance successful trial.
“Reinsurance is an area of prime concerns by insurance firms when it comes to agricultural insurance,” said Bao Minh Dak Lak deputy director Tran Quoc Phuc.
Phuc assumed agricultural insurance was a risk-prone area, without support from reinsurers, insurance firms would be unwilling to offer the service. However, the Decision 315/2011/QD-TTg and its guiding draft circular only cover insurance premium support to farmers but not yet mention reinsurance.
For agricultural insurance to come with success, Phuc said the state had better assist farmers with premium support in around five years, enact relevant legal documents to ease businesses’ implementation and separate insurance premium payment from that of conventional insurance products.
Deputy head of Agricultural Insurance Department at state-owned leading insurer Bao Viet Group Hoang Xuan Dieu assumed firms needed to be discreet in tailoring agricultural insurance products and avoid offering ‘massive-style’ insurance like ‘insuring all risks to all people’.
Local governments worry that without clear regulations regulating farmers’ and insurance firms’ obligations, agricultural insurance would face failure again if the government’s support stopped.
In this respect, deputy minister of Agriculture and Rural Development Ho Xuan Hung said business community support would be important parallel to farmers’ premium payments to empower agricultural insurance financial sources.
According to Hung, agricultural insurance was a big state policy, which benefits needy people, agricultural businesses and insurance firms as well. Under current regulations, needy people have 100 per cent of their insurance premiums paid by the state, the support level was 80 per cent for poor people and 60 per cent for other sorts of agricultural insurance participants.
Agricultural insurance trial application will span from July 1, 2011 until the end of 2013. Agricultural insurance objects and areas under the trial scheme are as follows:
a) Rice plant in provinces of Nam Dinh, Thai Binh, Nghe An, Ha Tinh, Binh Thuan, An Giang and Dong Thap.
b) Cattle, pig, and poultry in provinces of Bac Ninh, Nghe An, Dong Nai, Vinh Phuc, Haiphong, Thanh Hoa, Binh Dinh, Binh Duong and Hanoi.
c) Tra and Basa fish, black tiger and white-claw shrimps farming in Ben Tre, Soc Trang, Tra Vinh, Bac Lieu and Ca Mau.
Nation’s largest wastewater treatment plant ready in Q4
Hanoi-based Yen So wastewater treatment plant, the largest of its kind in the country with the daily capacity of 200,000 cubic meters, is expected to become operational in the fourth quarter of this year.
Malaysia’s Gamuda Berhard Group in early 2008 commenced work on the project under BT (build, transfer) form. Covering an area of 8.2 hectares in Hoang Mai District, the US$300 million facility will treat wastewater from the basin of Kim Nguu and Set rivers in the city.
Cheong Ho Kuan, general director of Gamuda Land Vietnam Co. Ltd., said the investor had completed 90% of the project. The remaining works include machine installation and test runs of measuring devices.
The facility is equipped with advanced treatment technology that has been applied in Malaysia and other countries. Wastewater in the final step will undergo ultraviolet treatment before running to Yen So Lake and local canals.
The plant, along with one factory and two treatment stations, will help treat around 35% of the household wastewater in Hanoi. In the second phase, the investor will upgrade the collection system and technology of the project.
Nguyen Le, general director of Hanoi Water Drainage Company, said the capital city is preparing to build two other wastewater treatment plants, namely Phu Do and Yen Xa, with the treating capacity of 71,000 and 275,000 cubic meters per day respectively.
Gamuda Land on Monday opened a training course on operation and maintenance of the plant for 50 staff members of Hanoi Water Drainage Co. The course will last six months.
Ministry requests credit for selected property projects
The Ministry of Construction has put forward to the Government solutions to monitor the local property market and a credit request for some selected property projects.
Deputy Minister of Construction Nguyen Tran Nam, speaking at a press conference after the regular monthly Cabinet meeting, said the ministry did not petition the Government to loosen the current credit tightening policy to the whole market, but that certain projects should receive backing.
Nam said that the Government’s credit tightening policy resulted in outstanding loans for the property sector as of late May decreasing by 7% to VND220 trillion compared to late last year.
The total outstanding loans in the sector account for 10% of the total for the country’s economy.
A survey by the ministry, he said, showed that housing prices, though still remaining high compared with last year, were set to decrease, but there was no possibility of the realty market to collapse as the capacity of payment was still safe. He said the ministry supported the Government’s credit tightening policy.
“The Government’s credit tightening policy in the hope of taming inflation is right and workable,” Nam said.
Nam said the property sector should not be classified as a non-productive industry subject to credit squeezing, but rather it should be monitored closely so as to let it run towards a positive trend.
Therefore, the ministry suggested that credits should not be extended for activities such as land-use rights acquisitions, site clearance compensation and high-end housing projects that will not serve the majority of buyers.
The deputy minister suggested that loans should be offered to small-scale housing projects, condo projects for low-income earners or projects in the last phase of completion so as to improve liquidity to the projects and to offer accommodation to low-income earners.
The central bank applied the credit tightening policy by requiring commercial banks to reduce the ratio of real estate credits in their outstanding loans to less than 22% by end-June and below 16% by the end of this year.
Citigroup buys into local securities company
Citigroup, or Citi, announced on Friday that it had acquired a 9.9% stake in Horizon Securities Corporation which is subject to regulatory approval but the financial terms are not revealed.
Rodrigo Zorrilla, Head of Markets Asia Pacific at Citi, said in a statement, “Our expansion in Vietnam is consistent with our broader goal of growing our franchise in the ASEAN market.”
Asia Pacific is one of the most important growth markets for Citi globally. In the last three years, Citi Asia Pacific has generated nearly US$45 billion in revenues and US$15 billion in net income.
Brett Krause, Citi Country Officer for Vietnam, said the partnership with Horizon Securities would further extends Citi markets platform and gives it the ability to offer clients better access to the Vietnamese capital market.
He furthered that “this investment will help us become a leader in the secondary market and allow us to increase our market share of institutional investor equity flows as the Vietnamese market resumes strong growth and depth of liquidity.”
Since 2007, Citi has helped Vietnam issuers raise more than US$2.8 billion from domestic and international capital markets.
Founded in 2006, Horizon Securities Corporation is a privately-held Vietnamese firm providing brokerage and corporate finance services. It operates as a subsidiary of Horizon Capital Group.
The State Securities Commission has permitted the securities company to retail issue 1.5 million shares to increase chartered capital from US$45 to US$60 billion.
HCM City’s hi-tech association debuts
The HCMC Association of High Technology debuted last Saturday by organizing its first congress at the Palace Saigon Hotel, gathering together local scientists and prestigious individuals and businesses people in the city.
Dao Ha Trung, vice president of the association, told the congress that the association would participate in not only training and science-researching plans but also technology transfer and other hi-tech operations.
Trung, who is also Austrian honorary consul in the city, said the association would also cooperate with local and foreign universities, enterprises, organizations and individuals to promote specialist knowledge and experiences so as to improve the quality of the city’s human resources.
In the field of technology transfer, “we will support our associates to apply technologies that will help produce concrete products in local enterprises,” he said.
Former Vice Minister of Education and Training Tran Chi Dao, president of the association, told the Daily that the association would closely cooperate with both overseas Vietnamese and foreign scientists, although they will be not admitted as official associates by the law.
Few local firms have own design units
The domestic design industry has shown signs of improvement with about 1,500 companies having design units but many local producers still lack confidence in setting up their own design facilities, heard a seminar in HCMC on Monday.
Tran Van Binh, director of Art Media Center of HCMC University of Architecture and lecturer of design, said at the Vietnam-Korea design seminar that about 20 companies had design units several years ago but the number had now risen to 1,500.
However, many of these companies still rely on certain designs researched and developed by their partners, said Binh, as they want to play safe.
A company in HCMC said it mainly developed designs from the products already available on the market and accepted by consumers to avoid risks, and a waste of time and money.
Vuong Quan Truong, the technical research and development assistant manager of Dien Quang Lamp Joint Stock Company, told the Daily that the well-known local lamp maker started making its own product designs two years ago, with the design unit having seven employees.
However, Truong said, Dien Quang is still buying designs from its partners. Binh of Art Media Center said Vietnam’s design industry had not been well planned due mainly to lack of clear government policy for the industry’s development.
There is no government agency responsible for the design industry at the moment.
Maing Eunjoo, head of the design promotion division at the Korea Institute of Design Promotion (KIDP) under the Ministry of Knowledge Economy (MKE) of South Korea, said Vietnam should set up such a government agency to support designer training and promote effective design use among small and medium enterprises.
Maing Eunjoo and some experts in South Korea’s design industry are in Vietnam for a visit to share experiences with Vietnamese producers via seminars and direct meetings.
TMV whistleblower offered free legal support
The Doanh Nhan & Phap Luat newspaper has helped recruit three lawyers for Vietnamese engineer Le Van Tach, who exposed technical problems in Toyota Vietnam’s manufacturing process leading to the biggest vehicle recall in the industry’s history earlier this year.
Toyota Vietnam (TMV) last month imposed a three-month suspension on whistleblower Tach, who also had his pay slashed 50% after the decision authorized by TMV general director Akito Tachibana.
At a ceremony on Monday in the city to honor the engineer, Dang Binh, an editor of Doanh Nhan & Phap Luat, said that his newspaper had invited lawyers Nguyen Van Hau, Truong The Kon and Bui Quang Nghiem to protect the engineer’s interests.
The assistance was meant to support Tach, who showed extreme bravery to inform consumers about three structural errors in TMV’s vehicles.
At a press conference in Hanoi on June 13, TMV insisted the reason for the management’s decision to suspend the engineer from his job was due to “behavior that affects the work and reputation of other employees.”
At the meeting, Tachibana said that Tach’s suspension was a consequence of allegations that he made about his fellow employees.
Tachibana insisted that his suspension had nothing to do with Tach leaking information to the public, according to local newspapers.
On May 31, Tach submitted a letter to the management of TMV complaining that seven senior managers had insulted and threatened him after he released information on three serious technical problems that had triggered Toyota’s largest ever recall of over 65,000 cars. In his letter, Tach asked for a formal apology from the company.
TMV claims it provided a written response to Tach’s request. The document allegedly acknowledged that some of the accused had admitted to having had “impolite” words with Tach.
However, the supervisors maintained that the unpleasantness was all related to personal disagreements and had nothing to do with Tach’s actions. The company also insisted that Tach lacked sufficient evidence to back up his claims.
Tach said that he would protest the three months’ suspension, and has written a letter of protest to submit to the company. However, he insisted he would be happy to return to his job. However, if the company doesn’t respect him anymore, he will seek another opportunity.
Lawyer Hau said that he and the two other lawyers would learn more about the facts in their efforts to support the engineer.
Tach released documents revealing three glitches in Innova and Fortuner vehicles. He said TMW had sold around 60,000 vehicles with quality defects in Vietnam.
The company in April apologized to customers for the technical problems relating to its cars and announced a recall of 65,700 Innova and Fortuner vehicles that were assembled in Vietnam for repair.