BUSINESS IN BRIEF 25/5

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VietnamNet English - 24 month(s) ago 4 readings

Retailers exploit untapped markets



Many retail companies in Viet Nam have tapped into new potential markets while others have been forced to close down due to tough economic conditions.

The successful have opened new stores and supermarkets in many disadvantaged regions, small provinces and rural areas.

Dinh Anh Huan, general director of dienmay.com, a company selling electronic products, said that most companies trading in electronics had opened branches in HCM City and Ha Noi.

However, he said his company had decided to access unexploited regions such as Binh Thanh, Tan Phu and Binh Tan districts of HCM City and rural provinces including Ba Ria-Vung Tau, Soc Trang and Binh Duong.

Heading in the same direction as dienmay.com, the Nguyen Kim electronic supermarket has also opened new stores in Can Tho City and Tien Giang, An Giang, Kien Giang, Binh Phuoc and Dak Lak provinces.

In the past, these companies only operated in big cities like HCM City and Da Nang but now they wanted to exploit new markets, said an official from the firm.

Nguyen Duc Tai, general director of the World Mobile JSC, affirmed there were many opportunities for retail companies in virginal, underinvested markets.

These new markets were hungry for new business. The question remained how to effectively exploit them, he said.

The new direction highlights the efforts made by Vietnamese retail companies during the world recession. It also shows that the local retail market still has potential to grow with 90 million people, but only 638 supermarkets, 120 trade centres and more than 1,000 convenient shops.

Moreover, experts predicted that retail sales in Viet Nam would increase by 23 per year from 2014.

In this difficult time, retail companies should define where their markets were to have new products. They must also find new markets, advised the Association of Vietnamese Retailers.

It reported that in the first four months of this year, nearly 18,000 companies closed down. Of these, about 5,300 operated in retail.

Growth in retail sales during this time was only 5 per cent.

The association attributed the slow growth to people's tightened consumption policy.

The most difficult problem now was high production and transportation costs. Meanwhile, the market had narrowed and many foreign retailers had set foot on the Vietnamese market, they said.

Expert talks ways to avoid another Vinalines case

No sooner had the case of Vinashin, the Vietnam Shipbuilding Industry Corporation, whose former chairman was sentenced 20 years in jail in late March, finished than another state-owned enterprise (SOE), this time Vinalines, the Vietnam National Shipping Lines, was found committing financial wrongdoings reaching tens of millions of US dollars.

There are many similarities between these two SOE giants: overinvesting in non-core sectors, investing ineffectively, buying old equipment, or incurring massive losses. And in both cases, things were only unearthed after the intervention of the State Inspectorate of Vietnam.

The ministries, more than anyone else, should have learned from the case of Vinashin to better manage the corporations or groups under their supervision. It has been two years since Vinashin’s wrongdoings were discovered, but there have been many other SOEs found with similar faults.

They include the Electricity Group of Vietnam (EVN), or the Vietnam National Coal and Mineral Industries Group (Vinacomin), and neither of the cases were detected by the ministries managing them but, instead, bythe state inspectorate.

This means it is time the management of the ministries over the SOEs operating in their sectors be revised.

Currently, many ministries are joining hands with the government to manage the SOEs. However, except for the Ministry of Finance, most of the other ministries do not have an agency specialized in this task. Some officials are not knowledgeable about business but are assigned to manage businesses.

Meanwhile, the SOEs’ operations are extremely complex and extended, with a huge number of assets, personnel, and subsidiaries.

The ministries mostly “manage” the SEOs based merely on reports made by the latter, and by assigning some of their officials to sit in on the board of directors.

From the Vinashin experience, it proves that the SOEs are totally capable of composing false reports, or even not making any, while those assigned to supervise them fail to fulfill their duties.

Despite past experiences, such loose management over SOEs seems unchanged since the case of Vinashin.

More surprisingly, before the wrongdoings of Vinalines were unearthed, the Ministry of Transport, its governing agency, even proposed to put another VND100 trillion (US$4.8 billion) in to the loss-making shipping line.

The ministries are seemingly not aware of their responsibility, and have inadequate abilities to manage the SOEs.

In order to prevent other cases like Vinalines and Vinashin from happening, the first thing that should be done is to set regulations that require the SOEs to be more transparent and increase their responsibility in reporting their operations.

This will not only help the government agencies strengthen supervision on the SOEs, but also make the latter more responsible in reporting their operations.

More importantly, the transparency in SOEs will enable the public to keep track of their operations, and thus will allow them speak out in case the SOEs show sign of poor effectiveness.

This will help prevent financial wrongdoings, and as a result the public will no longer be shocked to learn that the SOEs have consumed huge sums worth trillions of dong in their unprofitable investments.

In the longer term, the government should boost the (spread of equity?) and divestment of the government’s capital in SOEs where government management is unnecessary. Also, SOEs operating in sectors where the government has no need to join should be sold. Privately-owned enterprises, as proved by reality, can operate in such sectors much more effectively.

Therefore, to increase the transparency and effectiveness of the SOEs, the government should be determined to boost the divestment from these SOEs to attract more contributions from the public sector.

It is stipulated that SOEs divest totally from non-core sectors by 2015. From the lessons of Vinashin and Vinalines, the government capital should be divested from sectors where private replacements can effectively operate.

Mobilization the investment in SOEs, and reducing the participation of them in unnecessary sectors are the basic and most effective solutions to avoiding the losses the SOEs have made.

Seafood exporters lack capital, demand

The number of seafood exporters dropped in the first quarter of this year due to lack of capital and falling exports, the Viet nam Association of Seafood Exporters and Producers (VASEP) said.

In the first quarter, about 30 per cent of seafood enterprises suspended production due to lack of capital, high production costs and the pressure caused by complicated administrative procedures and policies, the association said.

Additionally, the General Department of Taxation's official report showed that the number of seafood exporters had reduced by 300 to 500 in the first quarter of this year, the association said.

The closure of so many firms was sure to affect yearly export targets, Nguyen Hoai Nam, VASEP's deputy general secretary, told Sai Gon Tiep Thi newspaper.

Nam said a number of firms that had halted exports had gone bankrupt.

Nam blamed the economic crisis, credit tightening policies and falling operational capital for the problems being faced by seafood producers.

However, Duong Ngoc Minh, VASEP's deputy chairman, said the reduction in the number of seafood exporters would help the fisheries industry become more sustainable.

Minh said the firms that had halted exports generally did not have processing factories of their own. He said they had closed their businesses because they lacked sufficient export orders.

Minh said the fisheries industry needed to reduce the number of enterprises that lacked financial capital, good management and insufficient investment.

According to VASEP, in the second quarter this year, 92.3 per cent of seafood firms needed a working capital of between VND10 billion (US$476,190) and VND500 billion ($23.81 million).

Meanwhile, the fisheries industry saw exports reach $1.5 billion in the first four months of this year, a year-on-year increase of 12.5 per cent, VASEP said.

The value of seafood exports increased mainly in Asia, while in the EU it dropped by 12.2 per cent to $299.4 million.

Other key export markets saw a year-on-year increase of between 15.6 per cent and 38.1 per cent to between $38 million and $296.9 million, including the US, Japan, South Korea, mainland China and Hong Kong, ASEAN and Australia.

Seafood experts said seafood exports in the second, third and fourth quarters were unlikely to improve due to the ongoing economic crisis and strict quality standards.

Businesses urged to make better use of information

The most difficult problem facing businesses laid in adjusting operations in response to changes and instabilities in the market, attendants at the SAP Innovation Forum held in Ha Noi yesterday heard.

"Change is more frequent, more severe and more unpredictable," said Robin Fong, SAP South East Asia senior regional manager and analytic principal.

He said businesses should take advantage of information to renew management and operation.

In the context of the global economic crisis, immediate access and analyse of data would decide the successes of enterprises, he added.

Firms and organisations are required to have a deep insight into management and business to respond to changing market conditions.

"Organisations earn an average of US$10.6 for every dollar spent on deployments of analytics," he said, adding that with such high returns, management teams should consider these technologies to be one of the most attractive investment opportunities available.

In the next five years, it predicted that many companies would change their businesses from laptop and netbook to mobile phone based.

A recent survey also revealed that by 2013, there would be nearly 1.2 billion labourers, accounting for 35 per cent of total world mobile phone technology users.

It added that urbanisation was increasing and the workforce was getting younger as 25 per cent of people lived in urban areas, forecast to rise to 45 per cent by 2020.

"Viet Nam would be a big market for mobile phones as it has 154 million subscribers today," he said.

He said SAP innovation solutions would help businesses quickly access suitable information.

Companies have had a common problem in increasing data whether they were big or small.

SAP has provided In-Memory Appliance (SAP HANA) mobility and business intelligence, which could analyse data faster to help firms take timely and appropriate decisions.

Ministry to ban imports of used textiles, electronics

Certain used commodities are set be prohibited from being imported to Vietnam, the Ministry of Industry and Trade proposes in its draft amendment to the Law on Commerce.

Accordingly, the ministry suggests putting a ban on imports of used textiles and garments, footwear, apparel, electronics, refrigeration and household appliances, medical equipment, and cereal products.

Additionally, used car imports should be those that have been used for no more than five years from the manufacturing year to import year, the draft states.

In related news, the General Statistics Office has forecast that Vietnam will suffer a trade deficit of US$700 million in May, the highest rate over the last six months.

Export turnover in May is estimated to be $9.1 billion, a 1.5 percent month-on-month increase. Meanwhile, imports are expected to stand at $9.8 billion, up by 9.4 percent compared to April.

Export staples include rubber, textiles and garments, footwear, electronics, machinery and equipment, and cable and electric wires.

Meanwhile, import turnovers of seafood, fruit and vegetable, confectionary, fertilizer, and fabric posted strong growth.

Exports from the year to date are estimated at $42.86 billion, up by 24.1 percent against the same period last year, while imports rose 6.6 percent year on year to $43.48 billion.

This means the trade deficit in the first five months of the year is some $622 million, only one tenth of the figure recorded last year.

Vietnam Air sees fall in passengers

The number of passengers and cargo volume for domestic airlines continues to fall, according to news reports.

In the last four months, total passenger numbers fell by 2.3 per cent to 3.81 million compared with the same period last year, according to Dau Tu (Investment) newspaper.

In April, passenger volume dropped by 2.5 per cent compared with March to 924,840. The figure was 6 per cent lower than April of last year.

Vietnam Airlines, which accounts for the largest share of the market (76 per cent), reveals that several important targets have not been achieved.

Its general director Pham Ngoc Minh said that the number of passengers on domestic routes in April totalled more than 687,000, or 88 per cent of the set target.

The figure was down by 2.6 per cent compared with the March figure, and by 4.9 per cent against the same period last year.

In the last four months, the number of passengers reached 90 per cent of the target, Minh said.

The percentage of seats occupied on domestic flights also reached 79.1 per cent, a year-on-year decrease of 2.3 points and 2.1 points lower than the set target.

To cope with the continuing fall in number of passengers, especially during the low season, Viet Nam Airlines is preparing to cut the number of flights to reduce costs.

The three remaining airlines, Mekong Air, VietJet and Jetstar Pacific, have not released any business results, but figures show that they also saw drops in passengers and cargo, according to a representative from Vietnam Airlines.

Ethanol to be exported due to lack of domestic demand

PetroVietnam has announced that it will increase exports of ethanol fuels due to a lack of market demand at home.

Under a Government plan for developing the bio-fuel market through 2015, with a vision to 2025, the group invested US$270 million in three ethanol plants in Binh Phuoc, Phu Tho and Quang Ngai provinces with a total productive capacity of 300,000cu.m annually.

However, despite being cheaper by about VND500 per litre than conventional A92 petrol, consumers have not embraced ethanol-based fuels.

Nguyen Anh Toan, deputy director of PetroVietnam Oil (PV Oil), a group subsidiary, said that PV Oil sold roughly 20,000cu.m of ethanol last year though 150 dealers in 40 cities and provinces nationwide.

Toan estimated that only about 100,000cu.m of ethanol would be consumed annually in the next few years without a more aggressive roadmap. Although a plan to develop the bio-fuels market had been in place since 2007, a more definite roadmap to carry it out was still being drafted by the Ministry of Industry and Trade, he said.

Under the draft, which is still being circulated among relevant agencies for recommendations and comment, drivers in major cities would be required to use E5 petrol by the end of next year. The cities and provinces in the pilot programme would include Ha Noi, HCM City, Hai Phong, Da Nang, Can Tho, Quang Ngai and Ba Ria-Vung Tau. The use of bio-fuels would then become compulsory nationwide by June 2015.

The ministry said that there were 13 projects registered to produce ethanol-based fuels. This year, five plants were expected to begin operations with a design capacity of 490 million litres per year.

Farmers lose patience with cashews, switch to rubber

A number of cashew plants in the southern province of Binh Phuoc have been chopped down en mass in a move to switch to rubber, as farmers are losing patience with the repeatedly slipping prices of cashew nuts.

Not only the old trees are cut down now, felling cashew trees has become a trend that has spread through many localities in the province.

Along the street connecting Dong Xoai Town to Phuoc Long District are piles of cashew logs that are more than 3m height. Chopped cashew plants can be spotted everywhere in the country’s largest cashew-growing area.

“Only by replacing the cashew with rubber trees can I hope to make ends meet,” says Ma Van Quang of Dong Phu District, after felling a cashew tree with his electric saw.

“Farmers around here have all destroyed their cashew plants,” he adds.

Quang says he did try to patiently wait for cashew nut prices to rise, but “the more I waited, the lower prices got.”

At a nearby plant, Tran Ngoc Tuan and his family have also been cutting down their cashew trees. Four out of six hectares of cashew have been felled, he says.

“Though I have been growing nothing but cashew over the last ten years, it’s time to stop as income from the tree is even lower than planting cassava,” says Tuan.

Nguyen Thi Quynh Giao, who runs a facility that buy cashew logs in Bu Gia Map District, says she has never witnessed the cutting of so many cashew trees.

“This area will soon have no cashew trees left, given the speed of destruction,” she comments.

Tran Ngoc Kinh, head of the provincial Plant Protection Agency, says farmers no longer want to grow cashews as cashew nut prices have halved against the same period last year.

“ The average price last year was around VND37,000-40,000 a kg, and peaked at VND45,000 a kg.

“But this year prices are at only VND26,000 a kg,” elaborates Kinh.

One of the reasons for this is the lack of cooperation between businesses and farmers, he adds.

“No businesses in this area, the largest cashew-growing region nationwide, have ever established a connection with farmers to develop the raw material areas.

“Farmers work hard on their plants, but businesses only show up to at harvest time to buy the product.

“And yet some processors neglect domestic cashew nuts but turn to buy from … Africa instead,” he explains.

Auditor numbers fall, even as need rises

There were not enough certified auditors to satisfy the increasing demand for their services on the domestic market, said the Viet Nam Association of Certified Public Accountants (VACPA).

According to the Ministry of Finance, the public now trusts financial reports issued by independent auditors. As the number of listed companies had continuously grown, demand for audits had increased as well, the ministry said. Despite this trend, last year, 35 auditing companies applied for licences, one fewer than in 2010.

VACPA said 19 out of the 35 companies run small-scale operations with under 50 staff members; 12 others had four to six auditors and the three remaining have only three auditors. The small size of the auditing firms indicated that it was difficult for them to train auditors, attract outside talent and improve the quality of their businesses, the association said.

"Enterprises need an estimated 2,000-2,500 auditors while only 1,211 auditors have registered to work for auditing firms," the association said. The association has therefore proposed that the ministry hold the auditor's exam twice a year to help meet the demand.

The association has also asked the ministry to issue guidelines for the implementation of the Law on Independent Audit.

VAMA proposes lower registration fee amid slow sales

The Vietnam Automobile Manufacturers' Association (VAMA) has proposed a 5 percent automobile registration fee applied nationwide.

The proposal came out in the face of rising numbers of unsold stocks of local automobile assemblers amid the 20 percent and 15 percent registration fees recently applied in Hanoi and Ho Chi Minh City.

According to VAMA, the collection of a universal fee rate countrywide will help prevent local tax agencies from being overloaded with new car owners, as they will try to attract as many as car owners as possible.

VAMA has just sent a petition to the National Assembly office and relevant state agencies for the adjustment of policies related to the auto industry.

In particular, the petition seeks the government’s approval on the imposition and recommendation for no new automobile fees in the coming decade, according to Pham Duy Hung, secretary of VAMA.

The petition is aimed at the cancellation of the annual fee set to limit personal vehicles recently proposed by the Ministry of Transport and the postponed road-use fee.

It will help lighten the load of transport fees for both businesses and consumers, VAMA said.

According to the VAMA, in Q1/2012, Vietnam's automobile market decreased by 41 percent over the same period last year, or some 21,331 vehicles.

If the average price per car is VND500 million, the tax revenue loss from the state budget may be about VND6 trillion ($290 million) in first 4 months of 2012, compared to same period of 2011, said VAMA.

Besides, VAMA is very concerned about the collapse of the domestic automotive industry in the country.

It is for this reason that the association has made many proposals on the reduction, cancellation and delay of the collection of fees for certain types of automobiles.

According to VAMA, many car manufacturers are implementing measures to cut production because their inventories are too high.

Recently, some members representing VAMA said they have to operate under capacity, and even suspend production.

“Extremely high inventories are forcing most manufacturers and assemblers to take strong measures to reduce their production,” Hung told Dau Tu newspaper.

“Dealer networks are facing cash issues and high inventories in particular.”

Vietnam Economic Forum has also reported that many firms including GM and Ford Vietnam now have inventories amounting to thousands of vehicles as a result of unsalable cars, and this, together with capital shortages and high interest rates, was causing them utmost difficulties.

Though many enterprises and joint venture automobile firms have continually made solutions, including promotions, to stimulate demand and attract customers, every effort is unlikely to revive the market.

Consumers have never witnessed so many automobile sale promotion campaigns as there are these days, with sharp price reductions of VND30-100 million per car, according to newswire Vietnamnet.

In early April 2012, Honda Vietnam announced the decision to “give presents” of VND40-55 million to Honda Civic sedan buyers in April and the first half of May.

GM Vietnam last month launched an impressive sale promotion campaign, offering free maintenance, periodic inspection, repair and part replacement to the buyers of three new models – Orlando, Captiva and Spark for two years starting April 10, 2012.

Additionally, GM Vietnam props up 100 percent of the insurance premium for material damages within the first two years, and partially props up the ownership registration tax.

Ford Vietnam in April also decided to offer price discounts for some models available on the market for a definite period with the sharpest price discount of VND86 million per car.

Vietnamese automobile manufacturer Truong Hai has also continued stimulating the demand for the MPV KIA Sorento, assembled domestically, by offering benefits worth VND100 million.

VinaMazda has also announced the impressive sale promotion campaign, offering price discounts of VND35-80 million each.

Car importers also have to slash the sale prices. The luxurious sedan Pluence model, which has the manufacturer’s suggested retail price at VND1.05 billion, now can be bought at VND920 million.

Car sale promotion campaigns nowadays do not catch the special attention from the public like they did in the past.

Too many promotion campaigns have been run since the beginning of the year, since demand has fallen dramatically due to high inflation and new cars.

Total car sales dropped sharply last month, beating industry expectations about imminent market recovery following satisfactory results in March, according to Dau Tu newspaper.

April sales reached nearly 7,000 units, declining 24 percent over March and 46 percent over the same period last year, reported the Vietnam Automobile Manufacturers’ Association (VAMA).

Of the number, 2,394 passenger cars and 4,588 trucks were sold, down 26 and 22 percent, respectively, compared to March’s levels.

The sales of completely knocked down (CKD) sales reached 5,504 units, down 24 percent month-on-month, while the sales of completely built units (CBU) tumbled 23 percent.

Eighteen VAMA members alone last month sold over 6,000 vehicles, declining 20 percent over the previous month and 37 percent over the year.

Almost all carmakers, including Truong Hai, Toyota, Mercedes-Benz, Honda, GM, Ford, Mitshubishi, Isuzu and VMC, witnessed the downtrend.

Many were seeing their sales slashed by half and some by even more than two-thirds from the figures of the same period last year.

The report by VAMA showed that 17,981 cars were sold in the first quarter of 2012, a sharp decrease of 37 percent in comparison with the same period of the last year.

VAMA members have expected this year’s total sales to reach only about 100,000 units, a decrease of 27.5 percent over last year. At a VAMA meeting earlier this year, its members predicted total car sales to range between 130,000 and 140,000 vehicles in 2012.

Exhibition promotes energy efficiency

Nearly 100 businesses are showcasing their products at the fourth Environment and Energy Tech Hanoi 2012 (ENTECH Hanoi) that opened in Hanoi on May 23.

Displays at the 200 booths include energy-saving products and equipment using advanced and environmentally friendly technology such as solar water tanks, solar batteries, and small hydroelectric plants.

Pham Duc Tien, Deputy Director of the Hanoi Department of Industry and Trade said the exhibition offers a chance for businesses in Hanoi and the northern region to promote investment, introduce their products and raise competitiveness.

It also creates a trading venue for domestic and foreign businesses operating in the energy and environment field, while helping to raise public awareness of energy efficiency and environmental protection, contributing to renewing a growth model for green and sustainable socio-economic development, Tien said.

The four-day exhibition, the largest of its kind in Vietnam, is co-organized by Hanoi People’s Committee, the Ministry of Industry and Trade, Hanoi Energy Conservation Centre and Vietnam Association for Conservation of Nature and Environment.

Vietnam, Russia discuss fishery cooperation

More than 50 Vietnamese and Russian experts discussed cooperation in sea fishing, aquaculture and fish fry species research, and post-harvest technology development at a seminar in the central coastal city of Nha Trang on May 23.

Participants also discussed coordination between the two countries in personnel training for the fisheries sector, to meet future research and cooperative objectives.

Deputy Minister of Agriculture and Rural Development Nguyen Thi Xuan Thu said the two countries’ fisheries sectors are keen on protecting aquatic biodiversity while developing aquaculture, post harvest and processing technology.

Vietnam and Russia have engaged in many cooperative programs in the field since 1988, she said, noting that their cooperation had failed to reach its full potential in the absence of suitable and stable cooperative mechanisms for scientific research in fisheries.

Smuggled Ensure milk with fake labels discovered

Police in central Hue City yesterday seized more than 10,000 Ensure milk cans (237 ml) bearing fake labels at three houses in the city.

The fake labels are blue because Ensure milk with blue labels is more expensive.

At 8/358 Phan Chu Trinh Street, the police caught the house’s owner, Ton Nu Cam Dung, replacing labels among authentic Ensure milk products stored there.

The police seized 5,208 cans with yellow labels, 1,680 with blue labels and 505 without labels.

They also detected 50 cartons of Ensure cans, including those whose yellow labels had been replaced with blue ones, and those without labels.

In the house at 35 Nguyen Thien Thuat Street, owned by Nguyen Van Sanh, the police also seized 60 cartons containing cans and plastic bottles of Ensure milk.

In the third house, 95 Tran Nguyen Dan, the police detected 720 blue plastic bottles of Ensure (237 ml). Like Sanh, Nguyen Van Be, the house’s owner, failed to show the police any documents to prove the origin of the milk.

All these people told investigators that they had been hired by a man named Nguyen Khoi Tin, 32, from Ho Chi Minh City, to replace the yellow labels of milk products with the blue ones for VND3,000-4,000 (US$0.14-0.19) per carton since November 2011.

The label replacement was done manually and fake blue labels had been provided to Tin by a man named Phong, also from HCMC, they said.

They also said Tin had bought 2.4 million fake blue labels for VND900 per label from Phong and transported them to Hue for use.

The substitutions were made since the price of Ensure milk with blue labels is higher than that of those with yellow labels. In addition, consumers prefer Ensure milk with blue labels to that with yellow labels, police said.

Initial investigation results showed that Tin had bought Ensure milk from Minh Dat Phu One Member Co Ltd in Da Nang City.

Tin then hired a man named Nguyen Van Hung, residing at 13/6 Cua Trai, Hue City, to transport the milk to these above-mentioned address for label replacement.

The milk products with fake labels were later sold to the market in Hue.

Most of the 10,000 milk cans had been smuggled from Thailand and brought into Vietnam illegally via border gates in Tay Ninh and Quang Tri Provinces. They were later transported to HCMC, said senior lieutenant colonel Vo Van Sau, deputy head of Hue Police.

Phan Van Thanh, deputy head of the Thua Thien-Hue Province Market Management Sub-department said the agency has yet to detect fake Ensure milk in the province so far this year.

Meanwhile, Fake Ensure milk had been discovered at a company in HCMC’s District 11 in last April, local authorities said.

On April 14, in a document issued to Hue City Police, American firm Abbott Laboratories S.A’s representative office in HCMC said the company had supplied only one of its products to the Vietnamese market, 237-ml Ensure Gold Vigor, which is in liquid form in bottles and with vanilla favor.

This product has been registered with Vietnam's Health Ministry’s Food Hygiene and Safety Department and has been distributed exclusively by 3A Nutrition (Vietnam) Co Ltd, located at 72-74 Nguyen Thi Minh Khai, District 3, HCMC.

Vu Gia Khuyen, director of the company, said his company distributed the said Ensure Gold Vigor, of US origin, and another Ensure milk product, which is in liquid form in 250-ml cans and is imported from the Netherlands.

The company is not responsible for the quality of any Ensure products that do not originate from these two countries, Khuyen said.

Hanoi conference promotes banking services

Vietnamese and foreign bankers are gathering in Hanoi on May 23-24 to discuss technology transformation towards effective banking governance and high quality services for the banking sector.

Delegates emphasized the role of modern information technology (IT) application, especially virtualization and cloud computing, in speeding up the modernization process of Vietnam’s banking industry.

They discussed new technological trends and worked out measures to increase the efficiency of technological application in banks, promote non-cash payment and risk management, and diversify banking services.

The 15th Banking Conference and Expo (Banking Vietnam 2012) aims to provide useful information for the roadmap modernizing the banking industry, non-cash payment promotion and banking system restructuring in Vietnam.

This year’s event delivered International Data Group (IDG)’s research with an overview of IT application in Vietnam’s banking sector to evaluate the current technology infrastructure of domestic commercial banks and foreign-invested ones. IDG also announced its survey on consumer behaviour when using local bank services.

On the occasion, an exhibition is also taking place to introduce modern banking services and leading high-tech services such as core banking systems, virtualization and e-payment, through more than 40 booths.

The two-day annual event is co-organized by the Information Technology Department of the State Bank of Vietnam (SBV) and IDG Vietnam.

The Prime Minister has approved of a project on non-cash payment promotion in Vietnam in the 2011-2015 period, aiming to reduce cash-payment proportion to less than 11 percent and increase the number of bank account holders to 35-40 percent by 2015.

VN's growth rate to fall to 5.7% this year

Viet Nam's economic growth this year is expected to reach around 5.7 per cent before increasing to 6.3 per cent next year while year-end inflation is forecast to decline to below 10 per cent.

The World Bank yesterday released its latest East Asia and Pacific Economic Update report in Ha Noi, saying that while the economy has started to stabilise, the significant tightening of macroeconomic policies along with an uncertain global economic environment were beginning to take a toll on growth.

World Bank Lead Economist Deepak Mishra said real GDP growth decelerated from 6.8 per cent in 2010 to 5.9 per cent in 2011 and further to 4 per cent in the first quarter this year as domestic demand slowed, affecting construction, services and utilities.

Mishra added that tightening domestic policies have dampened investment, particularly in infrastructure, real estate and private consumption.

Thanks to a combination of these measures and falling food prices, inflation declined to 10.5 per cent year-on-year last month from a peak of 23 per cent in August 2011, he added.

He said that export was the lightest point of the economy as most countries in the world saw a decrease while Viet Nam's exports in the first quarter were 23.6 per cent higher compared to the same period last year.

Key labour intensive manufacturing exports such as garments, footwear and furniture continued to grow at 14-18 per cent in the first three months of this year.

He said countries in these areas should diversify their export markets.

World Bank Country Director to Viet Nam Victoria Kwakwa said the Government was making efforts at fiscal consolidation. The budget deficit was expected to widen by 6 per cent of GDP this year.

The report also said Viet Nam's public debt was likely to remain sustainable if economic recovery continues and authorities remained on the current path of fiscal consolidation. The World Banks Low-income Country Debt Sustainability Analysis showed that Viet Nam remained at low risk of debt distress.

It said the largest source of uncertainty to debt sustainability came from implicit obligations to State-owned enterprises, which were not captured under Government and Government-guaranteed debt statistics.

Greater transparency and disclosure of information was critical to building confidence among market participants.

Viet Nam's near-term policy challenge is to maintain macroeconomic stability and restore confidence among investors, while also addressing longer-term structural reforms.

Bert Hofman, World Bank chief economist for East Asia and the Pacific, said in Tokyo that as external demand was likely to remain weak, countries in developing East Asia and the Pacific needed to rely less on exports and more on domestic demand to maintain high growth. Already, many countries were moving in this direction, but there was further scope for rebalancing.

Enterprises ask for further Government support

Financial and banking policies and production problems were debated at a meeting held by Ha Noi's Industry and Commerce Department yesterday.

General director of Ha Noi Plastic Company Bui Thanh Nam said his company would have to cut jobs and weekend work from this month due to reduced orders.

The company supports the automobile and motorbike industries, supplying products to domestic and foreign firms such as Honda, SYM and Toyota.

In the first quarter, it worked to capacity and needed about 100-120 more workers. This quarter, however, its major customers began reducing orders, with Honda cutting back 20 per cent and others giving notice they would buy less from June.

Nam said the company had curbed production costs and reviewed its investment policy but it was not enough to offset the reductions.

Executive council chairman of Animal Production Processing and Import Export Joint Stock Company Doan Trong Ly said banks needed to further lower their interest rates while suppliers of electricity, water and petrol and oil should cut prices for production to help struggling industries.

Ly said the State needed to focus investment in the enterprises which had taken advantage of new technology or developed new products.

Representatives of enterprises also discussed the city's "solution package" which included tax, fees, bank interest, land rental and taxes and incentives for eco-friendly producers.

It was reported that many enterprises lacked working capital because their inventory backlogs had increased 50-60 per cent over the same period last year, especially in the areas of construction materials and electric goods.

On the sidelines of the meeting, Industry and Commerce Department director Le Hoang Thang said enterprises faced difficulties in both input and output. Production costs such as electricity, petrol and oil, transportation and salaries had increased while consumers had cut spending so enterprises failed to sell their products.

Thang said the banks needed to lower interest rate as soon as possible but that would not meet the demand of every enterprise. Preference should be given to enterprises which had the capacity to develop or those who made goods for export.

Thang said the business community had welcomed Government Resolution 13/NQ-CP on tax, land rental and land use fees which was designed to counter difficulties in production. It was expected to help many enterprises regain their growth rate in the third and fourth quarters and reach their targets for the year, he said.

It was reported that more than 5,300 enterprises had stopped operating or were dissolved this year due to the economic recession.

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