The Ministry of Construction has asked the Prime Minister to approve a proposal to help the Song Da Group balance its capital sources to repay foreign debts owned by its affiliate Ha Long Cement JCS, according to VTC News.
Accordingly, Song Da will be allowed to borrow from the Ministry of Finance's Accumulated Fund for Foreign Loan Repayment to help the Ha Long pay its debts. This year, it is due to pay roughly VND437 billion (US$20.8 million) to France's Natisix Bank.
Earlier, the Ministry of Finance was assigned by the Prime Minister to act as guarantee to Ha Long Cement in borrowing foreign loans. However, the ministry guaranteed only Song Da Corporation (merged into the core of Song Da Group). The corporation gave a loan of VND3.335 trillion ($158.8 million) to Ha Long Cement at the same interest rate of foreign banks to build a cement project with total investment capital of VND6.46 trillion ($307.6 million). Therefore, Song Da Corporation's repayment completely depends on the capacity of Ha Long Cement. However, the Ha Long cement project, put into operation in early 2010, delayed progress for one year and suffered losses of roughly VND500 billion in 2010 and VND581.3 billion in 2011. The Ha Long Cement Co therefore is unlikely to repay its debts on time. According to a report from the Song Da Group, it aided Ha Long Cement with a total VND1.211 trillion ($57.6 million) until March 31 this year to pay its affiliate's foreign loans.
Meanwhile, roughly VND10 trillion ($476.2 million) of the Song Da Group's capital remain lodged in uncompleted works, which means it cannot continuously fund Ha Long Cement to pay its loans, the group said.
Thai firms expand investment before AEC birth
Large numbers of Thai firms have expanded investment in Vietnam to await the formation of the ASEAN Economic Community (AEC).
One ASEAN Development Company of Thailand last week signed an agreement with the authority of Quang Tri Province on developing the Southeastern Economic Zone (SEZ). The signing ceremony took place on a Thai visit by the provincial delegation, said Ho Dai Nam, director of the Quang Tri Department of Industry and Trade.
Previously, the Thai investor came to the province several times to study the EZ project, said Nam. He informed the firm wanted to develop a large-scale EZ to get connected to ASEAN countries as well as China and Japan.
Under the agreement, One ASEAN Development, an experienced company in industrial development and infrastructure construction, will build facilities such as an oil refinery plant, petrochemical complex, multi-sector industrial park, export-processing zone and commercial and entertainment area.
The project demands tens of billions of U.S. dollars and as such One ASEAN Development will join with other investors to carry out the project.
It is expected that the firm will conduct a field survey on Friday and complete preparatory work in six months. With the development of the SEZ, Quang Tri in the future will become an attractive destination for investors from Thailand and other countries.
Apart from infrastructure construction, Thai companies tend to expand their investment in Vietnam to further penetrate the regional market, to wait for opportunities once AEC is established.
As one of the pioneers, the multi-sector group SCG said it will continue to move ahead with its vision and ASEAN business expansion plan to gear up for the establishment of AEC. To do so, SCG has recently taken over several companies in the region, including Vietnam.
After acquiring a 99% stake in the Dong Nai-based Buu Long Investment and Industry Joint Stock Company in March, SCG announced it has taken over big stakes in two local plastic firms.
Particularly, Thai Plastic and Chemicals Co. Ltd., a subsidiary of SCG, has acquired 9.82 million shares, or a 22.67% stake, in Tien Phong Plastics Joint Stock Company and 5.85 million shares, a 16.73% stake, in Binh Minh Plastics Joint Stock Company.
Last year, the Thai group took over Alcamax Packaging Co., a Vietnamese producer and distributor of corrugated paper. Despite it already having many operational projects in Vietnam, SCG is still seeking more investment opportunities, including a petrochemical complex in Ba Ria-Vung Tau worth US$4.5 billion.
Also aiming at the opportunities offered by AEC, Berli Jucker Public Company (BJC) opened a factory producing glass containers and beverages in Ba Ria-Vung Tau in February. BIC said Thai enterprises with factories in Vietnam can enjoy advantages of labor and costs. Products made in Vietnam will be easily transported back to Thailand or to other markets.
Meanwhile, Charoen Pokphand Group (CP), the leading foodstuff and animal feed producer in Thailand, plans to pour hefty capital into Vietnam to raise the number of factories in Vietnam from five to ten by 2014. Jittisart J. Sakulchai, general director of CP branch in Vietnam, expected this expansion will create conditions for the company to approach material sources and customers in a more efficient way.
Several Thai banks also join the investment flow into Vietnam. Last year, Tharabodee Serng Adichaiwit, senior vice president of Bangkok Bank, led a delegation consisting of 37 companies to Vietnam to study investment opportunities.
Compared to Laos, Cambodia and other regional countries, Vietnam attracts more attention of Thai enterprises thanks to the large market and the abundant labor force with high skills and low costs, said Adichaiwit.
AEC is expected to spring to life in 2015 in a bid to create a unified market for ASEAN countries, promoting the free flow of goods, services, investment and skilled labor in the region.
State-owned enterprises in debt crisis
State-owned enterprises (SOEs) in Vietnam had amassed a combined debt of over VND415.347 trillion (USD19.88 billion) to banks by September 2011.
The figure was included in the Ministry of Finance (MoF)’s plan to restructure SOEs.
Of the sum, 12 economic groups owed VND218.738 trillion (USD10.47 billion), accounting for 52.66% of SOE debt and 8.76% of the banking system’s total lending.
The State-owned Vietnam National Oil and Gas Group (PetroVietnam), the country’s biggest oil producer, topped the list, owing VND72.3 trillion (USD3.46 billion).
It was followed by the Electricity of Vietnam Group (EVN) with VND62.8 trillion (USD3 billion), Vietnam National Coal-Mineral Industries Group (Vinacomin) with VND20.5 trillion (USD981.33 million), and Vietnam Shipbuilding Industry Group (Vinashin) with VND19.6 trillion (USD938.24 million).
The ministry also said that 30 out of 85 State-owned groups and corporations reported debts three times higher than their equity.
Seven groups owed ten times more than their total equity. These were Vietnam Industrial Construction Corporation (VINAINCON), Civil Engineering Construction Corporation No. 1 (Cienco 1), Civil Engineering Construction Corporation No. 5 (Cienco 5), Civil Engineering Construction Corporation No. 8 (Cienco 8), Military Petroleum Company (MIPECO), Thanh An Corporation, and Vietnam Highway Investment and Development Corporation.
The ministry noted that the current financial condition of SOEs has proven to be unsafe and that many faced the risk of bankruptcy.
Credit institutions required to have five years of operation before merger
The State Bank of Vietnam (SBV) has proposed that credit institutions have at least five years of operation before making a merger.
The SBV recently approved, in principal, the merger between Hanoi Building Commercial Joint Stock Bank and Saigon-Hanoi Commercial Joint Stock Bank.
The proposal was included in a recent draft circular on the restructuring of credit institutions, for which the central bank is seeking opinions from relevant agencies and individuals before approval.
The proposal also requires credit institutions to submit a feasibility plan for any mergers, have a minimum chartered capital after merger equivalent to the authorized capital and meet other ratios as defined by the laws to ensure healthy operation.
The Central People’s Credit Funds, besides meeting the above requirements, must be located in certain places defined by the SBV.
According to the central bank, Vietnam has numerous credit institutions, however most of them are small. The SBV has been actively encouraging the restructuring of credit institutions with an aim to strengthen financial capacity and improve transparency in the banking system. The process was also designed with the hope to increase public trust in the domestic currency and strengthen the monetary forecasting capacity of financial institutions.
The SBV recently approved, in principal, the merger between Hanoi Building Commercial Joint Stock Bank (Habubank) and Saigon-Hanoi Commercial Joint Stock Bank (SHB). The target set was to have five to eight more banks mergers in 2012.
Late last year, Sai Gon Commercial, First Commercial Bank and Tin Nghia Commercial Bank merged under the sponsorship of the Bank for Investment and Development of Vietnam. After the merger, the charter capital of the new bank totalled nearly VND10.6 trillion ($504.7 million). The newly reconstituted Sai Gon Commercial Bank began operations of January 1.
Word Bank rolls out new country strategy
The World Bank in Viet Nam yesterday announced the official launch of the Country Partnership Strategy (CPS) 2012-2016, which puts less focus on financial flows and more focus on how the bank can assist the country to capitalise on new ideas and manage its own resources better.
According to WB Country Director Victoria Kwakwa, the new CPS had taken into account Viet Nam's new phase of development as it moved to a middle-income status.
The bank would operate in Viet Nam with a more "strategic focus" and become more selective in choosing areas of support, she said, including phasing out programmes in areas that have achieved considerable results in the past such as rural electricity.
Deputy Minister of Planning and Investment Cao Viet Sinh applauded the launch, saying that Viet Nam was committed to increasing the value-added in aid effectiveness in line with its Socio-Economic Development Strategy 2011-2020.
Myla Taylor Williams, one of the team leaders, said the new CPS was built on three pillars – competitiveness, sustainability and opportunity – and would transform how the bank engaged with the Government.
The strategy outlined the need to ensure that projects are completely ready when approved, address systemic ODA implementation issues, call for clearer exist strategies and to make sure that "funds are disbursed on results-based rather than statement of expenditures."
For the new CPS period, the indicative allocation from the World Bank's concessional arm, the International Development Association, to support Viet Nam is about US$4.2 billion.
European award for Vietnamese businesses
The three Vietnamese businesses that received the International European Award for Quality from the Global Trade Leaders’ Club were honoured at a ceremony in Madrid, Spain, on May 28.
These businesses are the International Dairy Products JSC, the Vietnam Plant Oil and Food Processing Company, and the Chupah Rubber Company.
Speaking at the ceremony, Ricardo Roso Lopez, the club’s General Secretary and Managing Director, praised the Vietnamese products that are currently available in the European and world markets.
He expressed hope that even more Vietnamese businesses will receive the award in the future.
Along with the Vietnamese businesses, 30 others from countries across the world including Brazil, Nigeria, Malaysia, Mozambique and Angola received the award.
The annual award is voted for by the club’s members to recognize businesses that produce good quality products that are popular with consumers.
Since its inception in 1978, the club has organized various business forums and seminars on trade promotion to help its members seek out new partners and opportunities.
Metro promotes Vietnamese products on Germany market
Metro Friedrichshain Berlin and Metro Cash & Carry on May 31 launched a nationwide promotion programme called “the Vietnamese product week in Metro Cash & Carry Germany”.
The programme aims to further introduce Vietnamese products to Metro’s customers in Germany and foster Vietnam’s exports to Germany and Europe.
As many as 117 Metro Cash & Carry wholesale centres across Germany are taking part in the promotion while 1.4 million business customers in Germany received a promotion advertising Vietnamese products as the heart of the campaign.
How to avoid the swindling Chinese traders?
While the public has yet to forget the cases when Chinese traders defaulted on shrimp, crab purchases from local farmers, or forced them to sell purple sweet potatoes at dirt cheap prices, another incident has occurred: Chinese traders are buying pineapples at high prices.
As in the previous cases, Chinese traders are paying prices higher than market rate, and only choose to buy big, unripe fruits.
And it is no surprise to see farmers in the Mekong Delta scrambling to collect pineapples to sell to the foreign traders, instead of to the domestic processing plants in their localities.
And, “traditionally,” Chinese traders suddenly vanished, leaving farmers behind, crying on their huge unsold stock.
The fact that Chinese traders come right to farmers’ fields to collect agricultural products to export to China in a long time cannot be considered a normal free trade activity.
The question is: where are the responsibilities of local authorities, when they allow foreign traders to operate on the areas under their management. Besides local authorities, every province has many organizations protecting farmers, such as farmer or gardening associations. But all of such institutions have failed to assist or protect them.
Doctor Vo Mai, deputy chairwoman of the Vietnam Gardening Association, shared with Tuoi Tre some tips to avoid future similar incidents.
First, it is essential that local authorities fully manage the foreign traders, to force them to operate as per Vietnamese laws, and ensure that they appropriately fulfill contracts with farmers. Local agricultural organizations should caution farmers that having a contract is essential in trading with Chinese traders.
As local farmers still have to find outlets for their products on their own, they are not to blame, as everyone wants to sell their goods quickly, and at high prices. As long as local manufacturers do not join hands with farmers to ensure their product outlets, or do not set up raw material areas, they cannot blame it on the farmers when the latter scramble to sell to Chinese traders.
Without any tie between them and manufacturers, local farmers have their right to sell to those who pay the highest.
To date, what authorities in localities where Chinese traders have been buying agricultural products have done is only telling farmers to be wary of the foreign traders. This solution proves to be helpless, as authorities do not know who the traders are. In the end, when they disappear it is the farmers who suffer everything.
Localities should establish cooperatives to link farmers together, and to represent them in negotiating contracts with partners. This is a good way to ensure the outlet for farmers, as well as their rights in case of disputes.
Vietnam Airlines to purchase 4 more Airbus A321s
The national flag carrier has borrowed US$100 million from Eximbank with a 10-year term to buy four Airbus A321s in 2012.
These four planes are the first among the seven A321s that Vietnam Airlines will receive this year under a contract it has signed with the aircraft manufacturing firm Airbus.
According to the contract, Vietnam Airlines will buy another 19 planes from this firm.
The project to purchase the A321s is the first credit contract signed between the national airline and Eximbank.
The Chief Executive Officer (CEO) of Eximbank, Truong Van Phuoc, said the event has opened a new opportunity for long-term cooperation between the two businesses.
At the signing ceremony on May 31, Vietnam Airlines CEO Pham Ngoc Minh said that his company is totally confident in its financial capacity and ability to meet future commitments.
He explained that over the last two decades, the national carrier has always proved its financial prestige on both domestic and international markets and has never paid any loan late.
Vietnam Airlines is operating more than 80 air routes with over 300 daily flights to 20 domestic and 26 international destinations.
It plans to expand its fleet to 115 by 2015 and 170 by 2020.
European Council gets nod to FTA negotiations with Vietnam
The Council of the European Union on May 31 authorised the European Commission to begin negotiations of a free trade agreement (FTA) with Vietnam.
In a press release, the Council says Vietnam is the third member of the Association of Southeast Asian Nations (ASEAN), after Singapore and Malaysia, to enter into FTA negotiations with the European Union.
Rounds of negotiations will take place very shortly.
In 2007 the Council agreed to kick-start negotiations of a region-to-region FTA with ASEAN member countries, however, the negotiation process was put on hold in 2009.
In December 2009, it decided to resume bilateral negotiations with ASEAN countries, while pursuing a strategic objective of a regional FTA with ASEAN.
Austria, Vietnam step up economic ties
An Austrian-Vietnamese business forum took place in Ho Chi Minh City on May 30 in the presence of Austrian President Heinz Fischer and Vietnam’s Deputy Prime Minister Nguyen Thien Nhan.
The forum, which was attended by nearly 150 Vietnamese and Austrian businesses, provided an excellent opportunity for consolidating and boosting bilateral economic ties between the two countries.
It also opened up a new stage of development in Vietnam-Austria economic cooperation. The two-way trade, which was recorded at 445 million EUR last year, is expected to double in the next four years.
Addressing the event, President Fischer said that the forum will help the business communities from both countries seek new ways of working together and examine investment opportunities.
The two business circles see a lot of potential for expanding cooperation, which will help their countries in the development process, he said.
Deputy PM Nhan stated that Vietnam always creates the best possible conditions for Austrian investors and that in the future, it will prioritize investment projects in hi-tech, green technologies, support industries, education, culture and healthcare.
According to the Austrian Minister for Economics, the Family and Young People, Reinhold Mitterlehner, Vietnam is an attractive market for Austria as it has seen a strong economic development and boasts an abundance of human resources and the State is keen to support and develop the economy.
Currently more than 300 Austrian companies are operating in Vietnam.
Denmark assists Vietnam in Corporate Social Responsibility
More than 100 delegates from Vietnamese and Danish enterprises gathered in HCM City on May 31 to discuss ways promote corporate social responsibility (CSR) in Vietnam.
Thomas Frisenberg, Director of the Vietnam-Danish E-softlow Company, proposed that businesses create favourable working conditions, strictly comply with the law, and ensure equality among all employees, along with improving their professional skills and facilitating their participation in CSR.
These will increase labourers’ responsibility for their work and create a positive image for businesses, thus attracting more customers and enhancing business operations.
Danish experts also introduced practical tools for businesses to self-evaluate and improve their implementation of CSR, and take advantage of CSR in their operations.
According to statistics, private enterprises are paying greater attention to social and environmental issues, so they tend to use CSR to make a positive impact on society through social, environmental and economic activities.
CSR is not only part of enterprises’ production cost, but is considered part of the strategic brand and partner management.
The seminar is held within the framework of a Vietnam-Denmark Cooperation Program, aimed at increasing businesses’ competitiveness.
State-owned enterprise restructuring discussed
A workshop on renewing financial mechanisms and policies to assist the restructuring of State-owned enterprises (SOEs) was held in Hanoi on May 31 by the Ministry of Finance and the Asian Development Bank (ADB).
The workshop was to create an opportunity for policy dialogues between the Ministry of Finance, State management agencies and SOEs, Deputy Finance Minister Tran Van Hieu said.
The dialogues aimed to clarify difficulties in implementing SOE restructuring and new or ongoing financial policies for businesses in order to propose solutions on financial mechanisms and policies for future study, he said.
The official affirmed that the SOE system has expanded, modernised and operated in accordance with the market mechanism, ensuring production and the provision of essential products, goods and services for the economy. It also plays a key role in the State’s macro-economic regulation, to ensure economic stability and social welfare.
However, there are shortcomings in the SOE system, such as low effectiveness and competitiveness and risks of financial imbalance, as well as significant losses at some groups, corporations and SOEs.
According to Dang Quyet Tien, Deputy Director of the Ministry’s Business Finance Department, the main goal of SOE restructuring is to help these enterprises become stronger for their role as the core element in the State economy.
The restructuring should be implemented in both macro and micro aspects and connected with economic restructuring, growth model renewal and macro-economic stability, he said.
He suggested the restructuring process implement all the solutions at the same time, including accelerating equitisation, renewing and improving capacity and effectiveness of business governance at each SOE as well as increasing State supervision of SOEs.
Eximbank funds 100 mln USD aircraft purchase
Vietnam Export Import Commercial Joint Stock Bank (Eximbank) and national flag carrier Vietnam Airlines on May 31 signed a ten-year loan contract worth 100 million USD to buy four Airbus A321 aircraft in 2012.
Earlier, Vietnam Airlines signed an agreement with Airbus to buy 26 aircraft in the period of 2011-2014.
According to Director General of Vietnam Airlines Pham Ngoc Minh, these are the first four Airbus A321 planes to be handed over in 2012, in the process of upgrading the carrier’s fleet. Eximbank’s commitment to providing capital for Vietnam Airlines will help the corporation receive aircraft as scheduled to improve quality of services, expand flight networks and better meet the demand of transportation in regional and domestic flights, he added.
Eximbank Director General Truong Van Phuoc said this is the first contract between Eximbank and Vietnam Airlines. In future, the bank pledges to continue supporting credit capital for the long-term investment of Vietnam Airlines.
Eximbank has established banking relationships with more than 700 banks in 80 countries and territories in the world.
Vietnam Airlines now has 80 routes to 20 domestic and 26 international destinations with 300 flights each day. It plans to expand the number of aircraft to 115 by 2015 and 170 by 2020.
Vinaken beer plant illegally built in HCMC
A brewery factory has been built without a license in a land plot zoned for agricultural production in Ho Chi Minh City’s Hoc Mon District, with the municipal Department of Planning and Architecture to be blamed for the violation.
The Vinaken Beer Company, based in northern Bac Giang Province, had the factory and an office building spanning 9,000 square meters built on a 13,000 sqm land plot in Ba Diem Commune.
Though being constructed without a license since 2007, it is not until February 2010 that the district construction inspectorate made an administrative report on the plant’s violation, and asked for a construction suspension though the brewery has already reached completion and become operational.
A month later, the HCMC People’s Committee imposed a mere VND35-million (US$1,680) fine on Tien Dong Company - the manager of the factory - and asked it to apply for a construction license from the Hoc Mon’s People’s Committee.
The city’s government also ruled that if Tien Dong Co failed to acquire a license, it has to dismantle the brewery.
When Vinaken’s violations have yet to be fully handled, in mid-July 2011, Le Hoang Quan, chairman of the municipal people’s committee, assigned the city’s inspectorate to look further into the brewery.
On May 28, Nguyen Thanh Trung, the spokesperson of the municipal inspectorate, said Tien Dong Co has already paid the VND35-million fine, but has yet to receive a construction license. It has not dismantled the plant either.
The inspection also found that the municipal Department of Planning and Architecture has contributed feedback to the illegal construction.
Accordingly, the department has filed a document, saying it “agreed with the proposal of the Hoc Mon People’s Committee to establish the brewery on the agricultural land plot”. However, Trung said the district People’s Committee has never made such a proposal.
He added that the inspectorate has petitioned the city’s government to penalize involved individuals and groups at the Department of Planning and Architecture for backing the unlicensed construction.
The city’s government has also ordered the Hoc Mon People’s Committee and the Department of Planning and Architecture to readjust the planning for the area where the factory was built.
“If the brewery plant proves to be in accord with the adjusted planning, it can remain in operation; otherwise, violations will be handled,” the municipal People’s Committee said.
Rice exports in a fix again
Rice exporters are encountering difficulty as China, the largest consumer of Vietnam’s rice, is slowing down its imports and India is offering rice at competitive prices.
Le Truong Son, general director of Dong Thap Docimexco, a rice exporter, says China’s slow unloading of containers and its purchasing at a snail’s pace has badly affected Vietnam’s delivery of shipments under signed contracts.
Nguyen Van Tien, general director of the An Giang import-export company, reveals that Vietnam has signed a great many contracts with Chinese businesses at low costs, but the slow delivery has driven up storage fees.
Each tonne of stocked rice causes the delivery price to increase by an additional US$5, says Tien.
According to the Ministry of Agriculture and Rural Development (MARD), Vietnam has shipped abroad an estimated 3 million tonnes of rice in the past five months to earn US$1.4 billion.
Notably, rice exports to China have seen a sharp increase of 4.4 times in volume and fourfold in value in five months, making it Vietnam’s largest rice consumer.
MARD says local rice businesses have sought to expand their outlets to replace traditional markets. Africa has offered substantial growth, with major markets such as the Ivory Coast, Ghana and Senegal consuming large amounts of Vietnamese medium-grade rice.
Meanwhile, Vietnamese rice is in fierce competition against India’s cheaper rice. India is trying to get the lion’s share of the market in Africa, offering 5-percent broken rice at US$410/tonne, US$10-20 lower than Vietnam’s.
Vietnam’s 5-percent broken rice is now sold in several West African countries.
In addition, material for high-grade rice is becoming scarce, posing a big challenge for local rice exporters to speed up the signing of contracts.
Currently, the Southern Food Corporation (Vinafood2) is negotiating a government-level contract to deliver 120,000 tonnes to the Philippines.
In the first quarter of this year, Vietnamese businesses signed commercial contracts to ship 500,000 tonnes to their Philippine counterparts.
Int’t auto exhibition opens in HCM City
More than 200 domestic and foreign automakers are showcasing their latest products and technology at an international automobile and accessories industry exhibition that opened in Ho Chi Minh City on May 31.
Among foreign exhibitors are automakers from Singapore, India, China and Thailand, displaying new sedans, assembling equipment, interior decorations, lubricants, additives, and clean fuels.
In the face of the economic slowdown, the organisation of the annual Saigon Autotech & Accessories with the participation of many foreign businesses shows manufacturers’ efforts to overcome the difficult time and shore up production, said Le Duong Quang, Deputy Minister of Industry and Trade.
“Although the automobile industry is experiencing difficulty, I believe that Vietnam will become a lucrative market for foreign automakers, as well as the support industry,” said Quang.
The four-day exhibition is being co-hosted by the Asia Trade Fair and Business Promotion Holdings (ATFA) and Taiwan’s Chan Chao International Co. Ltd.
Organisers will arrange exchanges with exhibitors from the US, the Republic of Korea, Thailand, Taiwan, Singapore, India, Arab Saudi and China to offer opportunity for Vietnamese businesses to expand business operations.
The exhibition is expected to attract more than 100,000 visitors.
Philippines to import 100,000 tonnes of Vietnamese rice
A committee of the Filipino National Food Authority (NFA) has proposed seeking rice suppliers from Vietnam and Thailand, according to the Businessworld network.
The network quoted NFA leader Angelito T.Banayo as saying that a bidding profile to import 100,000 tonnes through inter-government contracts was completed on May 28.
He said Vietnam and Thailand had sent their bidding profile last week.
Banayo said Vietnam offered a cheaper price and better conditions than that of Thailand, and the NFA bidding committee has accepted the Vietnamese profile and sent it to the NFA for approval.
The rice shipment from Vietnam many start on June 11 as part of the total 120,000 tonnes of rice the Philippines plans to purchase this year.
The country has recently completed a contract to buy 20,000 tonnes of rice from Cambodia. If its negotiation with Cambodia fails the winner of this bidding will supply an additional 20,000 tonnes of rice.
EU - Vietnam’s leading development aid provider
EU remains one of the leading foreign development assistance providers for Vietnam, says Ambassador Franz Jessen.
Jessen, who is Head of the EU delegation to Vietnam, emphasised this at the May 31 launch of the “EU Blue Book 2012,” an annual publication on EU development in Vietnam.
He said the EU has committed aid totalling EUR 745.3 million (US$1 billion) in 2012, representing 13.24 percent of the total pledged by donors for the country. Of the amount, non-refundable aid accounts for 32.5 percent, or EUR245.21 million.
The diplomat said the Vietnam-EU relations have been expanded beyond development cooperation programmes.
He described the upcoming signing of the Vietnam-EU Partnership and Cooperation Agreement (PCA) this year as a manifestation of the wide and unceasingly developing cooperation between the EU and Vietnam.
The two sides have also finished preparations for the start of negotiations on their bilateral Free Trade Agreement (FTA), he said.
The EU has become Vietnam’s second biggest trade partner after the Southeast Asian country boosted its exports to the bloc by 33.5 percent in 2011, the Ambassador added.
In the face of the economic crisis in Europe and in the world in general, the EU’s remarkable committed assistance to Vietnam has reflected the importance of the Vietnam-EU relations, he said.
He said he hopes the EU’s non-refundable aid and loans to Vietnam will stimulate policy change and growth in target areas, such as public finance management and economic reform, private sector development, poverty reduction, administration, social affairs and technology.
VN coffee consumption to surge
The US Department of Agriculture (USDA) on Tuesday forecast Viet Nam's coffee consumption in the 2012-13 crop would likely reach 1.83 million 60-kg bags, against 1.7 million bags in 2011-12.
The USDA also expected that Viet Nam, the world's largest producer and exporter of robusta beans, would gain the largest ever bumper crop in the 2012-13 period (lasting from October 2012 to September 2013) with an output of up to 22.45 million bags, an increase of roughly 7 per cent over the current 2011-12 crop (lasting from October 2011 to September 2012) thanks to higher yields and investment in production.
Coffee carry-in stocks in the current crop ending September 30 may total 510,000 bags, up 53 per cent against the previous crop, because farmers held back supplies in expectation of higher prices, the USDA said.
Viet Nam's robusta coffee last week rose to its highest price in seven months at between VND42.8 million and 43 million ($2,055-$2,064) a tonne. Strong demand for robusta, used for making soluble coffee, combined with diminishing certified stocks has kept futures prices firm since May.
Farmers in Central Highlands provinces have been expected to unload part of their remaining stocks if prices rise towards VND45 million per tonne, traders have said, adding that not many farmers were in a position to hold stocks for long.
According to the Ministry of Agriculture and Rural Development, the country exported nearly 928,000 tonnes of coffee between last October and April 2012, the first seven months of the 2011-12 crop, down 0.85 per cent from the previous season.
It is also estimated that roughly 110,000-130,000 tonnes of coffee were shipped in May, bringing the total export volume for October 2011-May 2012 to roughly 1.04 million tonnes.
The average export price of Viet Nam's robusta coffee beans for the first seven months of 2011-12 was $1,918 per tonne, a decline of 3 per cent compared with the same period a year earlier.
An Giang to promote seafood
The tra fish production industry in southern An Giang Province has faced many challenges despite an increase in export value during the first five months of this year.
According to the An Giang Agriculture and Rural Development Department, in the first five months this year, the province exported 57,000 tonnes of tra fish products, earning US$165.3 million. The exports saw a year-on-year increase of 14 per cent in volume and 22 per cent in value.
However, due to difficulties in raw material and capital, the industry would not be able to achieve its export target of 165,000 tonnes in volume and $465 million in value this year, the department said.
It added that the province had a stable output of around 227,000 tonnes of tra fish, including 82,200 tonnes from areas owned by tra fish processors. The remaining output, produced by farmers in many places in the province had unstable quality and fluctuating prices.
Currently, shortage of capital has led farmers to stop raising tra fish, so that processors found it difficult to get decent raw material for their plants.
On the other hand, farmers and enterprises said quality and quantity of tra fish varieties on the market were not good in addition to rising production costs and declining profits and even losses.
The department said 30.68 per cent of the total seafood enterprises in the province enjoyed effective production and business, 38.46 per cent of them could continue sluggish production, and around 30.86 per cent were facing a high risk of stopping operations.
Those who were struggling with difficulty accounted for 69.32 per cent were also in dire need of capital.
Mai Thi Anh Tuyet, director of the An Giang Industry and Trade Department, said in order to help businesses overcome the situation, banks were required to increase credit and reschedule debts for seafood producers.
Also businesses were required to implement effective management and new investment policies, Tuyet said.
The province would encourage businesses and farmers to work with the provincial centre of seafood varieties in increasing product quality, she said. An Giang would also implement trade promotion programmes to advertise tra fish products on markets at home and abroad and develop a trademark for An Giang tra fish products.
Meeting focuses on HK business market
A seminar on successful business conduct in the Hong Kong market was held in HCM City on Wednesday to enhance investment and trade relations as well as create opportunities for Vietnamese firms.
At the seminar, participants provided information about brand building and product design trends for small and medium-size businesses.
Some experts talked about solutions in design and brand management to help companies enhance their market share and affirm their position and image in the Hong Kong market.
Loretta Wan, regional director of the South East Asia and Hong Kong Trade Development Council, expressed the wish to promote co-operation with Vietnamese agencies and organisations to strengthen connection between sellers and buyers through activities related to services, trade fairs and exhibitions.
"Currently, Hong Kong is seen as an important gateway for goods entering China's market and for transport to other countries", she said.
In recent years, bilateral trade relations between Hong Kong and Viet Nam saw good growth with total import-export turnover reaching US$8.4 billion last year. In the first two months alone, import-export value hit more than $526 million or a year-on-year increase of 103.48 per cent.
Viet Nam's exports to Hong Kong include electronic products, machinery and components, electric wire and cables, rice and seafood.
In the investment sector, some Hong Kong companies are shifting capital to Viet Nam providing an opportunity to local businesses to expand their partnerships.
The seminar was co-held by the HCM City-based Trade Promotion Agency and the Hong Kong Trade Development Council.
Doing business responsibly
Four years after being introduced in Viet Nam, the concept of corporate social responsibility, or CSR, has caught on at many Vietnamese-Danish joint ventures and their local partners.
The private sector is increasingly setting the agenda for more focus on social and environmental issues and CSR is a tool companies are using for that, according to reports at a seminar on CSR held yesterday in HCM City.
CSR goes beyond costs and is seen as a part of the strategic management of a brand and engaging with the local community.
"Four years ago the CSR concept was very new to companies in Viet Nam," Le Thi Thanh Loan, head of section at the Danida Business Partnerships Programme, said.
"We had a very hard time in making businesses aware of the importance of practising CSR, but the programme has been progressing well."
Jeppe Solmer, commercial counsellor at the Danish embassy in Ha Noi, said more and more companies were becoming interested in CSR, realising it boosts their competitiveness since it is a requirement for them if they want to be part of the supply chain of international companies.
It would make them integrate better with the global business community, he said.
The conference was held as part of the Danida-sponsored B2B (business-to-business) programme established in 1997 to improve the competitiveness of Vietnamese companies.
In the last four years many seminars have been held to introduce and increase awareness of CSR among Vietnamese-Danish joint ventures and their local business partners, Loan said.
The seminar gathered more than 100 executives from joint ventures, Danish companies in Viet Nam, and local firms who compared notes on CSR.
Not only does CSR benefit workers and the environment, companies now see it as a competitive advantage to improve their overall performance.
It ranges from waste treatment to protecting the environment to providing a good working environment and healthcare to their own employees.
A pioneer in Viet Nam is the Vietnamese-Danish joint venture E-softflow Ltd which has been in the country since 2006.
Its CEO, Thomas Frisenberg, said the company benefited financially from investing in CSR.
"We practically have not got any employee turnover and this is crucial for our success as training a good employee normally takes six months."
However, a lot of challenges remained in raising awareness of CSR among companies that do not attach importance to social responsibility.
Solmer said the biggest was how to improve their awareness of issues like energy efficiency, environmental protection, and not hiring child labour.
Concurring, Bui Dang Quang, CEO of IT company NaviWorld Viet Nam which has been practising CSR for more than one year, said: "It is easy to start but it is not easy to make a long-term commitment on these responsibilities."
The Danish embassy has been playing an active role in promoting awareness of CSR and helping companies improve their positive impact on both the environment and social stakeholders.
At the seminar it introduced practical tools for companies to do CSR self-assessment.
It also offered a free 10-hour CSR review to joint ventures and Danish companies based in the country.