BUSINESS IN BRIEF 29/11

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VietnamNet English - 47 month(s) ago 4 readings

BUSINESS IN BRIEF 29/11

Audit targets VN-Russia oil and gas companies

The Vietnam State Audit and its Russian counterpart will jointly examine the operations of their two oil and gas businesses, Vietsovpetro and Rusvietpetro.

The auditing drive will take place during the first and second quarters next year, reports the State Audit of Vietnam.

The Vietsovpetro joint-venture will have its operations from 2008 to February 2011 audited while the Rusvietpetro Joint-stock Company will be audited from 2008 to May 2011.

The auditing will be finished with a final report being submitted to Hanoi in the first quarter and one in Moscow in the second quarter of 2011.

The drive is part of the cooperation programme between the two State audit agencies, which have already audited Vietsovpetro during the period 2005-07. The report on the final results was signed by the authorities of both Governments as evidence of their satisfaction.

The two agencies have also audited State budget spending and inspected the quality of fish and other seafoods.

This action aimed to improve the efficiency of the supervision of food safety on a number of assorted aquatic foods and their processed products. The final audit will be submitted to the Government and National Assembly as soon as possible, said the State Audit of Vietnam.

Vietnam builds four more large capacity ships

The Bach Dang Shipbuilding Corporation started to build four new 22,500 DWT ships o n November 29 with the engines being assembled by the corporation itself for the first time.

This will help to increase the local content rate of ships b uilt by the Vietnam shipbuilding industry, following the guidance of the Government.

The freighters, which are designed by Vinakita, a joint venture between the Vietnam Shipbuilding Group (VINASHIN) and Japan ’s Kitada, are 153.2m in length, 26m in width and 13.75m in height and can travel at a maximum speed of 14.5 nautical miles per hour.

Previously the Bach Dang shipyard launched a 4,500 cu.m liquefied gas tanker and a 6,500 DWT cargo ship on November 24 and 26.

Tissue paper demand to rise

Paper tissue consumption in Vietnam is expected to increase annually at a rate of 12.5 percent until 2015, reaching 150,000 tonnes, according to speakers at a conference on paper consumption held recently in HCM City.

Nguyen Hoang Nam, sales director for the Sai Gon Paper Joint-Stock Company, said by then per capita tissue consumption would reach one kilo a year.

Per capita tissue consumption in Vietnam in 2007 was about 0.48 kilos, while in Japan it was 14.25 kilos and Taiwan-13.62 kilos.

With the economy growing, demand for higher grade tissue will increase, and, as a result, a shortage could occur in the next five years, he said.

The market for consumer paper, including toilet tissue, napkin tissue and facial tissue, has great diversity in design, type, brands and original source.

According to the latest statistics compiled by Nielsen, a market research company, there are about 432 consumer paper brands on the domestic market.

They vary in quality and many are made from materials or by technologies that do not ensure hygiene and safety, especially for children.

Dr Vu Ngoc Bao, general secretary of the Vietnam Paper and Pulp Association, said that many small businesses still use chlorine during their production process.

In addition, fake and imitation goods are another issue, said Nguyen Lam Vien, deputy chairman of the High-Quality Vietnamese Goods Club.

Many large tissue brands have complained of the increasing number of goods that copy their products.

To ensure consumer health and more transparency for the market, the Government should develop regulations on the paper-tissue market so that agencies can better control the market, many delegates at the conference said.

Currently, only Vietnamese standards are applied in classifying consumer paper products, Bao said.

Cao Tien Vi, director of the Sai Gon Paper Joint-Stock Company, said Decree 97 issued last August on fake goods contains stiff provisions that punish violators, but many violators had not been charged because of a lack of inspection staff.

Overseas investments struggle

The rate of return on overseas investments by Vietnamese firms has been very poor, although the investment volume has risen steadily over the last few years, officials say.

The Foreign Investment Agency (FIA) under the Ministry of Planning and Investment says local enterprises have transferred a total of 1.79 billion USD to invest in foreign countries since 1989, when Vietnam began investing abroad.

But profit repatriated to Vietnam was 39 million USD in the last 21 years, a return of just 0.46 percent, the agency estimates.

However, the actual figure may be higher since many investors have not reported their business performance to the authorities, says Bui Quoc Trung, FIA deputy director.

In addition, investors often reinvest in their projects, and thus profit repatriation is lower than expected. He also notes that although Vietnamese firms started investing abroad in 1989, overseas investment only took off in a significant way in 2006.

Local firms have invested in 410 projects abroad since 2006 with a total registered capital of 7.05 billion USD.

In the 1989-99 period, only 17 projects with a combined capital of 13.6 million USD were licensed.

The Vietnam Oil and Gas Group (PetroVietnam) has so far invested 1.05 billion USD abroad and repatriated profits of more than 31 million USD.

The low rate of return has raised concerns about the efficiency of overseas investment.

One expert has said although it is true that country has more than profit motives when it promotes Vietnamese investment in other countries, both the Government and the companies should consider financial efficiency before starting a project.

Another official from the Ministry of Finance says local firms should invest overseas only if the investment offers higher profits than at home, if the project can provide materials that cannot be found in Vietnam, or if there is a supply shortage of those materials in the country.

Otherwise, enterprises should not invest abroad, especially in the current situation when local companies are short of capital.

Trung of FIA says that in the long-term, investment efficiency could improve, but some adjustments need to be made in the short term.

There has been an imbalance between cash outflow and inflow from overseas projects. With a large amount of capital expected to go out of Vietnam, the capital source for local investment will certainly be affected and there will be added pressure on national balance of payment.

This will affect directly the country's macroeconomic balance, and therefore, proper measures are necessary to harmonise overseas and local investments, he adds.

According to the Ministry of Planning and Investment, by the end of last year, Vietnam had invested in 465 projects worth 7.73 billion USD in more than 50 countries and territories.

Processing and manufacturing industries ranked first with 102 projects worth 429 million USD.

With nearly 170 projects worth 3.16 billion USD, Laos has so far been the most attractive destination for Vietnamese investors.

Russia follows with 17 projects totaling 1.71 billion USD.

Can Gio mangrove forest’s brand name promoted

Ho Chi Minh City will take measures to build a brand name for the city’s Can Gio mangrove biosphere reserve.

Deputy Chairman of the municipal People’s Committee Nguyen Trung Tin affirmed the plan at a national conference reviewing 10 years of operation of the biosphere reserve in Can Gio district, HCM City on Nov. 27.

Over the last decade, Can Gio has fully met the criteria of the world network biosphere reserves, including the representative ecosystem, human gradually intervention, bio diversity protection and the involvement of social organisations and local communities.

Considering as the “green lung” of the city, Can Gio biosphere covers more than 75,000 ha and is dominated by mangroves, including both salt water and brackish water species.

According to Professor Nguyen Hoang Tri, General Secretary of the National Committee on Man and Biosphere programme (MAB), besides the economic value, the forest also helps reduce the effects of climate change and sea level rising.

At the workshop, scientists talked about challenges to Can Gio biosphere, including the impacts of nature’s changes as well as the pressure of economic development.

Vietnam Tuna Association set up

The Vietnam Tuna Association (Vinatuna) was set up with 36 members in Nha Trang beach city, the central province of Khanh Hoa on Nov. 27.

The association aims to connect and support members to develop and improve their fishing activities as well as protect their legitimate rights relating to the protection, fishing, trading and processing of tuna in Vietnam .

According to the association, the sea off central and southeastern regions has a combined reserve of 1.15 million tonnes of fish with 400,000 tonnes for sustainable fishing, of which tuna accounts for 65 percent.

Currently, Vietnam has 10,000 boats with capacity of over 90 CV engaging tuna fishing on small scale using, simple tools and processing, which affect output and product consumption.

Between 2006-2010, Vietnam earned 720 million USD from exporting 208,000 tonnes of tuna.

This year, Vietnam exported 58,000 tonnes of tuna by Sept. 15, garnering 208 million USD, a year-on-year increase of 53 percent in volume and 73 percent in value.

The association targets to net 80,000 tonnes of tuna in 2011

Source: VNA

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