The board of directors of Vietnam Prosperity Bank, or VPBank, said at the joint stock bank’s annual general meeting on Tuesday that it would pay a stock dividend even though shareholders wanted cash.
A representative of the board explained the bank would rack up losses if it offered shareholders a cash dividend. Meanwhile, the stock dividend payment will help it secure capital and also raise chartered capital.
VPBank plans to raise its chartered capital to over VND5.7 trillion this year after shareholders finally agreed to receive the 2011 stock dividend at 13.46% and bonus shares at 0.79%. The plan is expected to be completed in June, supporting the bank in developing business, investment and information technology.
The bank also said it had no plan for listing on the bourse, citing unfavorable stock market conditions.
Vingroup to launch int’l bond sale
Vingroup announced on Wednesday to issue an additional US$115 million worth of convertible bonds on international markets prior to July 10.
Vingroup Joint Stock Company, the new name of Vincom Joint Stock Company, on Wednesday organized the first shareholders meeting since Vinpearl was merged into Vingroup.
At the meeting, Vingroup reported that it had completed the US$185 million international convertible bond sale and had listed on the Singapore Exchange early this month. Foreign investors may order more bonds worth as much as US$115 million by July 10 this year, taking the total value of the bond issuance to US$300 million.
The issuer expects over 69.8 million shares, or a 22.9% stake in Vingroup, would be needed for the bond conversion. In addition, the group has to issue and list common shares on the Singapore Exchange.
The shareholders meeting approved a proposal to restrict the foreign ownership ratio at 22.9% of the total shares issued by Vingroup.
It is expected that Vingroup will issue about 151 million shares at the end of the second quarter. With an additional chartered capital of over VND1.51 trillion, Vingroup plans to invest VND584 billion in Eden A project, VND427 billion in Vincom Village, and add VND500 billion to working capital.
Vingroup last year earned more than VND2.3 trillion in revenue, dropping VND1.55 trillion against 2010. Office and retail leasing brought in VND942 billion, surging 32% over the preceding year, while property transfers fetched some VND1.37 trillion, dipping 56%.
After-tax profit amounted to VND1.07 trillion, a decline of VND1.35 trillion against 2010.
This year Vingroup aims for net revenue of over VND12.3 trillion, pre-tax profit of VND4.27 trillion and after-tax profit of VND3.05 trillion.
A scheme for distribution of last year’s profit and advance dividend payment in the first quarter this year also got the nod of shareholders. Particularly, Vingroup uses shares to pay dividends at a 1000:275 ratio, in which the ratio for dividend payment from accumulated profit is 1000:124 and that for advance dividend payment is 1000:151.
Shrimp deaths causing concern in Mekong Delta Provinces
Several provinces in the Mekong Delta are facing huge losses after shrimps are dying in huge numbers from various infections, with My Long Nam Commune in Cau Ngang District in Tra Vinh Province being the worst hit.
Nguyen Van Ut, a shrimp ‘billionaire’ in My Long Nam Commune, said he had never been so miserable before. Ut lost 220,000 shrimps, which were less than one–month-old and died suddenly, causing losses of hundreds of millions of dong.
The People’s Committee of the commune said that 90 per cent of its 620 hectares of shrimp farm area has lost its shrimp produce.
According to the provincial Department of Agriculture and Rural Development, Tra Cu, Cau Ngang, Duyen Hai and Chau Thanh Districts are left with 4,4000 hectares of dead shrimps.
Bac Lieu Province has so far suffered over 3,440 hectares of dead shrimps. Nguyen Van Canh from Giai Rai District said that the shrimps kept dying and they did not want to continue breeding shrimps.
The phenomenon is spreading at an alarming rate in Soc Trang, Ben Tre and Ca Mau Provinces.
According to experts, the shrimps have died of atrophy of liver and pancreas. The most serious concern is that several households have used toxic chemicals of unclear origins to treat ponds, poisoning their shrimp breeding areas.
Some breeders admitted that if they follow the recommendations of the agricultural industry in using chemicals like Sapnoin and Chlorice to treat their ponds, it will cost up to VND5-6 million per hectare. Whereas it costs only VND300,000-400,000 per hectare if they use other pesticides.
‘High-Quality Vietnamese Products Fair’ kicks off in HCMC
A High-Quality Vietnamese Products Fair kicked off at the Phu Tho Sports Complex in Ho Chi Minh City on April 25, offering 800 stalls from 250 business enterprises from across the country.
The 16th High-Quality Vietnamese Products Fair, jointly organised by the High-Quality Vietnamese Products Business Association and Sai Gon Tiep Thi Newspaper, is expected to pave the way for domestic-made products to reach consumers within the country.
Several new products will feature in the fair, and many market related activities will also be held to support Vietnamese enterprises reach new markets and also develop, promote and present new products.
On this occasion, the High-Quality Vietnamese Products Business Association will honour those 43 businesses that have won the Vietnamese High-Quality Products Certificate for 16 consecutive years.
Many domestic products have now become very popular such as Vinamilk, Hau Giang Pharmacy, Casumina, Vissan, Cadivi and Pinaco.
Businesses receiving the Vietnamese High Quality Products Certificate must meet certain criteria such as-ensuring transparency and social accountability; environmental accountability; responsibility towards employees and consumers; collecting feedback from local administrative agencies from place where businesses are located.
This year’s surveys conducted by the Vietnamese High-Quality Products Business Association were carried out in ten provinces and cities nationwide. A total of 13,940 direct questionnaires and 16,000 consumer feedback questionnaires were sent out.
The High-Quality Vietnamese Products Fair 2012 has made many improvements from previous years. This year, the fair will be held in only six provinces and will provide business enterprises information on local markets, marketing techniques and ways to organise charity programmes.
The fair will also be held under three separate categories-the High-Quality Products Fair, a specialised fair and a traditional fair that will travel to the neighboring countries such as Cambodia and China.
Emirates SkyCargo creates international trade opportunities for Vietnam
Emirates SkyCargo, the freight division of Emirates, will soon be connecting more businesses in Vietnam with trade opportunities across its global network.
With the launch of a daily passenger service on June 4, Emirates SkyCargo will use the 240-tonne weekly belly-hold capacity of the aircraft to stimulate trade between Ho Chi Minh City, its Dubai hub and more than 120 other destinations.
Ho Chi Minh City will become the 14th Emirates SkyCargo point in the Far East, strengthening its commitment to the region, with major exporters - such as Hong Kong, China, Japan and Korea – already operating on bustling Emirates SkyCargo trade lanes to points throughout Europe, the Middle East, Africa and North America.
Vietnam, with one of the fastest growing economies in Asia, will be able to further develop its import/export industry using the 17-tonne cargo hold of the wide-body Airbus 330-200 operating on the route. From 28th October, trade will receive another boost when a Boeing 777-300ER takes over, providing an additional 80 tonnes of weekly cargo capacity.
“Vietnam is enjoying a period of growth and by facilitating international trade with businesses in the 73 countries we operate to, Emirates SkyCargo looks forward to helping it build on this momentum and become even stronger,” said Ram Menen, Emirates’ Divisional senior vice president cargo.
“With trading powerhouses like Hong Kong and China, the Far East is integral to our business and we are proud to be expanding our services in the region further, with the addition of daily flights from Vietnam’s commercial capital.
“Ho Chi Minh City is just one of 12 destinations added to our network in 2012 and as each point comes online, new trade lanes are created, a trend which will only continue as we take delivery of the 230-plus aircraft we have on order. Having used partner carriers to transport freight from Vietnam since 2005, we understand the market and needs of customers. Many more will now be able to take advantage of Dubai’s tremendous geographic location and benefit from our world-class services,” added Menen.
According to the UAE Embassy in Vietnam, the UAE is one of its major trading partners in the Middle East, with bilateral trade between the two countries exceeding $1.2 billion in 2011.
Goods - including smartphones, tablets, printers, garments, sportswear and shoes, as well as perishables - such as seafood, coffee, rice and vegetables - are expected to be transported out of Vietnam. Commodities going in the other direction will include electronics, machinery, steel and petroleum products.
Operating as EK390, the daily non-stop flight will depart Dubai International Airport at 0925hrs arriving at Tan Son Nhat International Airport at 1920hrs. The return flight - EK 391 - will depart at 2050hrs, arriving in Dubai at 0045hrs the following day.
Foreign hands grab textile market
Foreign-backed enterprises are getting the upper hand in textile and garment export, with advantages in capital, technology and governance expertise.
The textile and garment sector is taking the lead among Vietnam’s key export production sectors reaping $3.2 billion in total export value in 2012’s first quarter with 40 per cent of this coming from the foreign-invested sector.
Lifepro Vietnam’s LuxFashion garment production facility will be making big contributions to the export garment sector.
Entering service in late March 2012 as one of the biggest and most technologically advanced garment production facility in Vietnam, the $300 million LuxFashion features a whole integrated production process from materials to end products.
Lifepro Vietnam has procured orders for making specialised uniforms for US firemen, uniforms for combating and security units as well as other sorts of technical uniforms. For instance, its contract signed in principle with US-based Globe Manufacturing Company on supply of US firemen uniforms could bring Vietnam $137 million in export value.
Parallel to LuxFasion, many other foreign projects are operating in Vietnam like VinaKorea, Hansea Vietnam, Kyung Bang and Hansoll Vietnam.
With around 2,000 labourers and 100 per cent products going for export, South Korea-backed VinaKorea in Vinh Phuc province’s Khai Quang Industrial Zone earned several hundred million US dollars from exports a year.
VinaKorea strength leverages on its extensive market network and high-profile customer base which includes famous world brand names like Gap Inc., Wal-Mart, AEO, Li&Fung and A&F. Besides, VinaKorea’s parent company YakJin Trading Corporation, with an expansive system of subsidiaries in countries around the world such as China, Laos, Indonesia, the US and Cambodia, is the company’s valuable support in export promotion.
Another South Korea-backed firm Hansae Vietnam, with one plant in Ho Chi Minh City Tay Bac Industrial Zone and second plant in Tay Ninh province’s Linh Trung III Export Processing Zone, export 60-70 per cent of production per year.
The company is building another plant in Tien Giang province’s Tan Huong Industrial Park with a $30 million investment to be operating in garment export production in a capacity of 30 million products per year.
Vinatex deputy director Le Tien Truong said the foreign-backed firms were an important part in the textile-garment sectors’ export performance in the past years.
Economic experts assumed foreign-backed firms’ operation success could serve as a mirror to local players as under the same circumstances foreign-backed firms could stay healthy and mull investment and business expansion as well as help inspire other firms to jump into Vietnam to do business.
Petroleum price calculation method to be revised
The Ministry of Industry and Trade has submitted a proposal to the prime minister to amend the methods used to calculate petroleum retail prices.
The ministry made the proposal in a recent report on the implementation of the Government’s Decree No. 84 on petroleum trading.
According to the ministry, adjustments to domestic petrol prices have been made slower than fluctuations in the world market. Retail prices are lower than imported rates, causing mounting losses to traders.
“Due to accumulated losses, traders were compelled to lower commissions to their agents, affecting fuel supplies and worrying consumers,” the ministry noted.
The ministry said some elements used to calculate petroleum prices are inadequate based on the country’s current circumstances as estimated business expenses for traders were calculated based on salary, materials and other financial expenses using 2009’s figures while all of these elements have increased considerably.
In order to deal with these inadequacies, the ministry proposed that the prime minister allow relevant ministries and branches to look through Decree No. 84 in order to make suitable supplements and amendments.
As a result, the Ministry of Finance (MoF) will inspect and make changes to elements that are used to calculated petrol prices.
Concerning this issue, Nguyen Tien Thoa, Director of the MoF’s Department of Price Management said Decree No. 84 focused on two major pricing solutions.
The first one triggers a price rise if imported petrol prices increase by 7% over a ten-day period. The second solution suggests that if imported price sharply increase, which affects the national socioeconomic situation and hinders the Government’s efforts to tame inflation, alternative tools will be utilised instead of raising prices.
Up to now, the implementation of the decree has not met expectations, he assessed.
Thoa noted that the prime minister had assigned the Ministries of Finance, and Industry and Trade to co-ordinate with petroleum traders to study amendments to the methods used to calculate petrol prices in order to make them more appropriate to the current situation and enhance the market competitiveness.
Regarding the latest petroleum price rise from April 20, Thoa said that the decision was made based on the increase in imported petrol prices over the past month, but not on the fluctuations in the world market in the most recent days.
Attention should be paid to the prices of petroleum products instead of crude oil prices, he said, adding that the price increase had been in accordance with the regulations set out in Decree No. 84.
The latest price hike has helped petrol traders recoup their business expenses.
The Ministry of Industry and Trade said that there were no regulations that stipulated how to offset losses incurred by petrol traders for taking part in the Government’s price stabilisation programmes. The use of the petrol price stabilisation fund has exceed the funds previously collected by over VND2.3 trillion (USD110.15 million). Traders now have yet to find a solution for their losses of over VND5 trillion (USD239.46 million).
The losses have been putting more pressures on traders whose loans have outstripped their equity.
Trader equity totalled VND9 trillion (USD431.03 million) in 2010 and VND14 trillion (USD670.49 million) in 2011, compared to their loans of VND17 trillion (USD814.17 million) and VND27 trillion (USD1.29 billion), respectively.
Top ten shrimp and tra fish exporters
The Minh Phu Seafood Corporation continues to be the leading shrimp and tra fish exporter in the country, recording US$75.7 million in exports during the first three months of this year, triple that of second ranked Quoc Viet Company.
According to Vietnam Customs, shrimp exports in the first quarter of this year hit more than US$436 million, up 9.28 percent over the same period last year. Japan is the biggest importer, accounting for 26 percent, followed by the US (20.7 percent), EU (13.7 percent), China (11.7 percent) and the Republic of Korea (7.7 percent).
Below is a list of the top ten shrimp and tra fish exporters in terms of export value in the first quarter of 2012:
The Minh Phu Seafood Corporation - US$75.7 million
Quoc Viet Company - US$24.25 million
Soc Trang Seafood Joint Stock Company (Stapimex) - US$21 million
Ca Mau Seafood Processing and Services Joint Stock Corporation (CASES) - US$19.27 million
Sao Ta Foods Joint Stock Company (Fimex VN) - US$16.94 million
Minh Hai Seafood Joint Stock Company (Sea Minh Hai) - US$13.7 million
Ut Xi Aquatic Products Processing Joint Stock Company (Utxico) - US$12.42 million
Thuan Phuoc Company - US$12.38 million
Hai Viet Joint Stock Company (Havico) - US$12 million
Anh Khoa Company Ltd - US$11.6 million
Vietnam Customs said tra fish exports in the reviewed period reached US$425 million, a year-on-year increase of 13 percent. The EU is the biggest importer, making up 26.5 percent of the total export value, followed by the US with 19.3 percent, Mexico with 8.1 percent and ASEAN member countries with 6.4 percent.
The top ten tra fish exporters:
Vinh Hoan Corporation- US$35.54million
Hung Vuong Corporation - US$31.83 million
Viet An Joint Stock Company (Anvifish) - US$22.91 million
An Giang Fisheries Import and Export JS Company (Agrifish Co) - US$22.27 million
NTSF Seafood JS Company - US$14.94 million
Southern Fishery Industries Company (South Vina) - US$12.39 million
IDI Investment and Development JS Company - US$11.26 million
Dai Thanh Ltd Company - US$11.08 million
Hung Ca Ltd Company - US$10.94 million
Nam Viet Joint Stock Company - US$10.41million
Stimulating domestic trade growth a must
Despite its considerable contribution to the country’s socioeconomic growth, Vietnam’s domestic trade has not received proper investment to secure a firm foothold in the market.
According to a recent report by the Ministry of Industry and Trade (MOIT), Vietnam’s retail and services revenues in 2011 saw a sharp year-on-year increase of 24.2 percent to VND2,004.4 trillion (US$95.28 billion). It is predicted to rise to VND2,445 trillion (US$116.22 billion) in 2012, up 22-23 percent against 2011.
Since the Prime Minister approved the domestic trade development project in 2007, the sector has contributed 13 – 15 percent to the nation’s GDP every year and created 5.5 million jobs.
It has also met the growing demand of domestic production and consumption and contributed to the country’s international integration, especially in terms of economic integration.
As a result of less investment in upgrading infrastructure facilities, the development of domestic trade is unsustainable and unable to keep up with the economic growth.
Other factors include the lack of capital and poor management skills within the domestic trade sector.
Furthermore, the inadequate connectivity among distributors and between producers and distributors, in part, leads to the unstable supply of goods.
However, the main problem is that authorities are not fully aware of the importance of developing the domestic trade sector, as proven by the lack of synchronization in law enforcement, unfeasible legal documents, and poor supervision and management.
Identifying trade performance, particularly goods distribution, plays an important role in promoting production and ensuring consumption and social welfare.
MOIT Minister Vu Huy Hoang emphasized that developing the distribution chain should go along with ensuring the supply-demand balance and stabilizing prices.
In the process of integration into the international market, Hoang stated, it is necessary to weigh up the pros and cons when it comes to fulfilling WTO commitments.
So, the MOIT will propose measures to support businesses in training, legal consultancy, marketing, trade promotion and other areas to ensure they are regaining ground in the country.
The ministry will also help domestic distributors to have access to capital, modern technologies, and management skills from the world’s leading corporations.
A number of related laws, policies, and regulations such as the Economic Needs Test, will be put in place to promote transparency and avoid risks while attracting foreign investment in the goods distribution network at both central and local levels.
In addition, close cooperation between central and local authorities in managing foreign investment and the role of the Vietnam Retailers Association are no doubt of great importance to the development of the domestic trade sector.
In order to corner the domestic market, businesses themselves should spare no effort to sharpen their competitive edge.
First batch of dragon fruit exported to Chile
The first batch of Vietnamese dragon fruit, weighing 1,000 kg, has arrived in Chile.
The successful shipment via the US by a company in Binh Thuan province to Chile has opened up opportunities for Vietnam to export dragon fruit to other countries in the central and southern American region.
Dragon fruit is largely grown in Binh Thuan, Long An and Tien Giang provinces for export.
Mobile exports hit US$3.5 billion
The export turnover of mobile phones and spare parts in four months reached US$3.490 billion, up 154 percent against the same period last year.
In April alone, exports hit US$800 million.
Last year saw the sharpest growth of 40 percent, with Samsung making up 70 percent of the total value.
Motorbike, car imports decrease in April
Vietnam imported 1,000 Complete Built Unit (CBU) motorbikes worth US$2 million in April, according to the General Statistics Office (GSO).
The figure showed a sharp decrease in volume and value, by 80 percent and 75 percent respectively compared to March.
The GSO estimated Vietnam’s total import value of automobiles in April at US$172 million, a slight reduction compared to US$185 million in March.
In the first four months, Vietnam imported 14,000 CBU motorbikes and 9,000 CBU automobiles worth US$170 million, equal to 50.1 percent and 40 percent of the levels recorded in the same period last year.
Indonesian newspaper hails Vietnam as Asia’s new rising star
“Vietnam is an emerging country with an average of above 7 percent economic growth during the first decade of the 21st century, despite facing major economic and security challenges.”
This was quoted from an article entitled ‘Amid many challenges, Vietnam’s star continues to rise’ written by reporter Veeramalla Anjaiah from the Jakarta Post Newspaper on the occasion of Vietnam’s National Reunification Day (April 30).
“Even at the height of the current global financial crisis, Vietnam’s gross domestic product grew by 5.89 percent in 2011, slightly lower than the 6.8 percent in 2010. This growth level can be seen as relatively positive and high and quite close to the government’s adjusted target,” it said.
The article also mentioned some problems that the country has to face, such as unemployment, poverty, lack of infrastructure and corruption.
“Vietnam and Indonesia, Southeast Asia’s biggest economy, have so many similarities and work closely at regional and international levels. Both countries face same problems related to development, produce the same products and also compete for markets and foreign investment.”
“Yet the relations between the two countries are rapidly growing. Both countries’ businesspeople are investing in the opposite country.”
“In 2011, bilateral trade surged to US$4.73 billion, a remarkable increase of 53.38 percent from $3.08 billion. Starting from 2012, bilateral trade will grow much faster because Vietnam is going to buy Indonesia’s coal for power generation purposes,” it added.
The article praised Vietnam’s “Friendship with everyone” foreign policy, saying “Vietnam also realized that socialist economic policies didn’t bring prosperity and adopted market-friendly policies under Doi Moi in 1986. It opened doors for foreign investors, offered incentives and relaxed rules.”
It added that foreign direct investment (FDI) capital flow into Vietnam reached U$11.6 billion in 2011.
Low inflation but slow growth
How to boost production and business activities on a credit crunch remains an open question.
According to the Ministry of Planning and Investment, inflation – the hottest issue over the past two years – has been controlled. The consumer price index (CPI) in April hit a record low over the past several months or compared to the same period of previous years. It will continue to decline in the coming months and is likely to fall at the lowest level in July and August. However, we should not be lax because inflation is likely to return late this year or early next year like it has in several previous years. In general, inflation for the whole year will be in the single digit, maybe even below 6.5 percent.
Thanks to some improvements in the balance accounts of the first quarter, foreign currency reserves keep increasing and exchange rates remain rather stable with a 4-month drop of 1.04 percent.
Therefore, the second hot issue is trade deficit which is being lightened. However, some worry that imports in the domestic economic sector have decreased sharply because of a slowdown in production and trade.
The General Statistics Office of Vietnam said that the industrial index rose in April, but still below last year’s same month figure.
Credit growth in the first quarter dropped by 2 percent, many businesses are unable to access bank loans because of high interest rates and demanding requirements for borrowing capital.
In the meantime, others in the commodities and services sectors’ taking advantage of slow CPI growth pushed prices up.
In addition, total retail sales and services revenues failed to reach last year’s levels.
With hundreds of businesses failing to pay taxes and going bankrupt, State budget contributions dropped to a lower level.
Such depression will impact three big issues: First, the whole year’s economic growth target set by the National Assembly’s resolution will be hard to come by. Second, as a result of the Government’s efforts to loosen monetary and fiscal policies and stimulate investment and consumption; inflation will be likely to recur late this year and early next year as often seen in previous years. Third, both inflation and slow growth will make it all the more difficult to achieve the goal of ensuring social welfare.
Garment exports to RoK earn US$380 million
Vietnam’s garment exports to the Republic of Korea (RoK) in the first four months of this year reached US$380 million, up by 50 percent compared to the same period last year.
From February to April, the average monthly turnover level was estimated at US$90-96 million.
The RoK is the fourth biggest importer from which the Vietnamese garment industry is expected to earn as much as US$1 billion by the end of this year.
Other major importers include the US, the European Union (EU) and Japan.
Promoting connectivity in the central coastal region
Central coastal provinces should take a more active approach to seek capital resources to boost connectivity and socio-economic development.
Deputy Prime Minister Nguyen Xuan Phuc made this statement at a conference in Danang City on April 30 to review one year of the project to develop connections between central coastal provinces.
Over the past year, the consultancy group for developing connectivity has made significant efforts to boost economic development in the region, such as organizing seminars and facilitating agencies and businesses in signing cooperation agreements for developing tourism and training human resources.
At the conference, representatives from central coastal provinces Thua Thien Hue to Khanh Hoa discussed solutions to promote connectivity for development in the future.
Vice Chairman of the Khanh Hoa provincial People’s Committee, Tran Son Hai, underlined the need to intensify investment in developing uniform infrastructure with a view to connecting potential areas for development.
In his speech, Deputy PM Nguyen Xuan Phuc said the central coastal region must consider tourism as a key economic sector for boosting socio-economic development through ODA funded projects.
Cambodian farmers assisted by Vietnamese fertilizers
High-quality fertilizers and advanced agricultural techniques from Vietnam have helped raise the productivity of Cambodian farmers, a senior Cambodian official has said.
By supplying good agricultural equipment, Vietnam has also assisted Cambodia to ensure food security, reduce poverty among farmers, and gradually increase rice exports, Men Sam On, Deputy Prime Minister of Cambodia told a conference in Phnom Penh on April 29.
The productivity on Cambodian rice fields has tripled over the past 10 years.
Binh Dien, Quoc te 5 Sao, and Dam Phu My are the three largest Vietnamese fertilizer enterprises that have been operating in Cambodia in recent years.
General Director of Binh Dien, Le Quoc Phong, said his company’s products not only produce high yields, they are also environmentally friendly.
Phong said his company regards Cambodian farmers the same as Vietnamese farmers and tries its best to transfer modern agricultural technology for them.
As much as 15 percent of Binh Dien’s total fertilizer output is consumed in the Cambodian market.
HCM City strengthens ties with Lao province
Ho Chi Minh City and Savannakhet province in Laos have great potential for promoting cooperation in all fields.
This was emphasised by Secretary of the HCM City Party Committee Le Thanh Hai and Savannakhet Governor Souphanh Keomixay at a meeting in HCM City on April 28.
Hai praised the great socio-economic achievements Laos has made in recent years and affirmed that the Savannakhet delegation's visit to Vietnam will help tighten bilateral ties between the two localities.
He proposed that both sides develop specific cooperative programs in economics, education, culture, and people-to-people diplomacy. They should also create the best conditions for businesses from both countries to meet and seek opportunities for cooperation.
Governor Keomixay briefed his host on Savannakhet's socio-economic situation and advantages, including agriculture, forestry and minerals, saying he hopes more businesses from Ho Chi Minh City, and Vietnam in general, will invest in these fields.
He thanked HCM City for its support and for granting scholarships to students from Savannakhet to enable them to study in the city.
Leading Vietnamese businesses receive awards
A ceremony to present the Vietnam Fund for Supporting Technological Creations (VIFOTEC) Awards and the 2011 World Intellectual Property Organisation (WIPO) Awards for science and technology was held in Hanoi on April 27.
The VIFOTEC awards were presented for new innovations in mechanics automation, fabric technology, information technology, electronics, telecoms, bio-technologies, environmentally friendly technologies, and the efficient use of natural resources, energy saving devices and using new kinds of energy.
The WIPO also presented certificates and mementos to the best enterprises to apply intellectual property rights to production, the best project, the best female scientist and the best young scientist in the intellectual property field.
This year’s VIFOTEC awards included four first prizes, eleven second prizes, twenty four third prizes and forty three consolation prizes.
Thai investors keen on Vietnam
Thai investors are shifting their investment strategies overseas to reduce risks and seek more business opportunities and Vietnam is one of their destinations.
The President and CEO of the Siam Cement Group (SCG), Kan Trakulhoon, said that the company has started a number of major investment projects in Vietnam since early in 2012.
SCG and Thai Plastics and Chemicals (TPC) signed a joint venture agreement with QPI Vietnam, PetroVietnam and Vinachem to invest in Vietnam’s first petrochemical complex. Under the US$4.5 billion project, SCG will hold 28 percent of the stake and TPC will hold18 percent, while the remainder will go to the other strategic partners. The project is expected to be operational within the next four years.
Meanwhile, the Amata Group of Thailand has planned to expand its investment in Vietnam. The Director General of Amata Vietnam, Huynh Ngoc Phien, said it is expanding the Amata industrial zone in Dong Nai province by 55 hectares in the second phase and 66 hectares in the third phase. It is also working on a trade centre project covering 20 hectares of land.
The complex includes a trade centre and office and urban areas, as well as medical centres and schools.
Amata was also granted an investment license to build the Amata Express City in Long Thanh, Dong Nai province, and has plans to invest in a tourist resort in Da Nang.
The 4 Oranges paint manufacturing company from Thailand also announced that it will increase its investment capital in Vietnam from US$60 million to US$90 million over the next year.
The President of 4 Oranges, Smit Chea, said that in the future, the company will focus on investing in technology and environmentally-friendly products. He added that it will also pay special attention to in-depth, long term investments and sustainable development in Vietnam instead of building new factories.
It’s time to expand operations in Vietnam, he said.
RoK tastes more Vietnamese seafood
The Republic of Korea (RoK) is one of the five biggest importers of Vietnamese seafood products, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).
The country currently imports 7.8 percent of Vietnam’s exported seafood total, of which bivalve mollusks make up 35.5 percent, shrimp 33 percent and fish 29 percent.
To take advantage of the market's full potential, economic experts warn that businesses should learn more about it to understand the demand and raise the quality of seafood products to improve competitiveness.
The VASEP will cooperate with the Korea Fishery Trade Association (KFTA) to facilitate information exchanges, expand the market, and explore the taste for new products in the RoK.
The two sides also agreed to inform each other about faulty or low-quality products, unhealthy trade practices.
Improving trade relations between Vietnam and the RoK and stabilizing the consumption demand are basic factors in supporting Vietnam’s shrimp exports to the market.
Major export industries struggle to stay competitive
Major export industries need to join in global distribution chains, improve the quality of their products, and develop globally-recognized trademarks if they are going to boost their competitive capacity and see sustainable export growth.
The Ministry of Industry and Trade has been actively promoting Vietnamese products to major European supermarket chains, seeking to enter these markets more aggressively via their distribution networks, says Pham Van Chat, an expert from the ministry.
Meanwhile, major export industries report that they continue to face challenges to sustainable development.
Despite seeing annual growth in exports as high as 20 percent per year, the garment industry continues to meet challenges, including inefficient production and unstable markets and financial resources, says the deputy general secretary of the Vietnam Textile and Garment Association, Nguyen Van Tuan.
Garment makers have often focused on maintaining jobs in the sector but not on improving processes, while Chinese and Japanese garment makers have developed more efficient production lines, Tuan says.
Domestic garment makers have also failed to develop strong support industries and local suppliers of cotton and fibres, he says.
The wood products industry has seen an annual export value increase from US$219 million in 2000 to US$3.9 billion in 2011, but the industry still remains unprofessional and unco-ordinated, confides Tran Quoc Manh, Vice Chairman of the HCM City Fine Arts and Wood Processing Association.
Nearly the entire industry consists of small-and medium-sized enterprises with unskilled workers and low output, Manh says, adding that the industry has also had difficulties in obtaining materials and are forced to import up to 70 percent of their raw materials to meet demand.
The seafood industry, despite exports exceeding US$6 billion in 2011, has faced a similar problem in sourcing quality raw materials for processing and is also grappling with anti-dumping cases and strict quality standards in export markets, says Truong Dinh Hoe, general secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP).
The domestic seafood industry needs more assistance from the Ministry of Agriculture and Rural Development to ensure supplies of raw materials that ensure the quality and hygiene of processed products, Hoe says.
BIDV win Euromoney honour
The Bank for Investment and Development of Vietnam (BIDV) in Hanoi on April 27 was honoured as the Best Local Trade Finance House 2012 in Vietnam by Euromoney Magazine.
The award is based on studies and nominations from businesses using trade finance services.
The criteria to win this award include product knowledge level, consultancy quality of staff, professional operation model, concentration on serving customers with international standards, administrative ability, risk minimization, competitive price while ensuring good profit growth capacity, wide network of transaction points, network of agency banks, specific solutions, and initiatives for customers, as well as other factors.
Euromoney is a famous magazine in economy and finance. It was founded in 1969 and is headquartered in the UK. The magazine is now present in over 100 countries and territories.
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EU to import more Vietnamese seafood
Vietnam hopes that the European Union (EU) will become its leading seafood importer.
Deputy Minister of Agriculture and Rural Development Vu Van Tam expressed his hope at a working session with Mato Adrover, Chairman of the European Parliament’s Committee on Fisheries, in Brussels, Belgium, on April 25.
Tam emphasised that the relations between Vietnam and the EU in recent years have developed positively and deeply, particularly in trade.
He pointed out challenges that Vietnam’s fishery sector is facing, the biggest of which is keeping importers abreast of Vietnamese businesses’ efforts to increase the quality of aquatic products.
Tam suggested ways to strengthen cooperation between Vietnam and the European Parliament’s Committee on Fisheries, including increasing dialogues and information exchanges, in the hope of receiving technical assistance and consultancy from the EU, to help Vietnamese seafood processors apply advanced technology and solve difficulties in exporting these products to the EU.
He also proposed that the European Committee and Vietnam co-chair a seminar in 2013 to assess the impact of regulations 1005 and 2008 on the fishery sector, with the participation of 9 ASEAN countries and Australia and Papua New Guinea.
Tam expressed hope that the two sides will boost co-ordination to make it easier for Vietnamese seafood products to enter the EU with low prices and costs.
Mato Adrover, Chairman of the European Parliament’s Committee on Fisheries, affirmed that Vietnam and the EU have a common stance on aquaculture management and development.
He said that the application of regulation 1005 will benefit both sides.
He echoed Tam’s view that it is necessary to strengthen dialogues to promote mutual understanding and share experience between the EU, the European Parliament and Vietnam.
He agreed to Vietnam’s proposals and said his committee is ready to support Vietnam in hosting the seminar in 2013.
Boosting Uruguay-Vietnam trade cooperation
Vietnamese Ambassador to Uruguay Nguyen Van Dao has invited Uruguayan businesses to Vietnam to seek opportunities and establish partnerships for mutual benefit.
At an April 26 seminar promoting two-way trade between Vietnam and Uruguay in Montevideo, Dao briefed the participants on Vietnam’s economic, trade, and investment policies and the country’s recent achievements in its Renewal (Doi Moi) process.
Mariana Ferreira, Manager of Trade Intelligence under the Uruguay XXI Investment and Export Promotion Institute, underlined the development in bilateral trade cooperation, as well as the potential for development in the future.
According to Uruguay Customs, two-way trade reached US$63 million in 2011, a fourfold increase against 2006.
Vietnam’s main exports to Uruguay are cement, footwear, fish and rubber, while it imports wood products, leather, milk plasma, and pharmaceuticals.
The seminar was jointly held by the Vietnamese Embassy and Uruguay National Chamber of Commerce and Services.
How to improve Hanoi’s PCI
Hanoi’s provincial competitiveness index (PCI) in 2011 ranked 36th among 63 provinces and cities throughout the country.
The Hanoi municipal People’s Committee has recently organized a conference to discuss solutions to improve the capital’s PCI in 2012.
Dau Anh Tuan, an expert from the Vietnam Chamber of Commerce and Industry (VCCI), says despite making some improvements, businesses are still weak at accessing information and ensuring transparency in their operations.
Nearly 70 percent of businesses say they have to manage to get necessary legal documents concerning investment projects, infrastructure development plans and zoning maps from the municipal administration.
More than 90 percent of them say they do not grasp the capital’s law enforcement while two thirds claim that local authorities have got around common regulations to seek profits. More than half of them affirm they have to pay commission to win contracts from State agencies.
Other reasons for business slowdown in Hanoi include the low quality of workers and lack of land and space for operation since supply has failed to keep up with demand, not to say administrative procedures for land and space rental are very complicated.
In terms of investment expansion, Hanoi is placed third behind HCM City and Danang. To improve its PCI, the capital needs to gather its strength in various fields.
According to James Packard Winkler, VNCI/USAIDS Project zDirector, Hanoi is chosen for its three criteria: low-cost labour, high-quality workers and stability but it takes FDI businesses much more time to get official licenses for operations in Hanoi than in HCM City, which will, in part, affect their long-term investment plans.
So, Hanoi should focus on ironing out snags in areas of common concern to foreign investors such as ensuring transparency, reducing cumbersome formalities and simplifying administrative procedures, Winkler says.
Representatives from the Hanoi Department of Natural Resources and the Environment, also emphasize the need for transparency and fairness. In their view, Hanoi should work out strict regulations on bidding and auction for land ownership to cut unofficial fees while making public urban development plans to help businesses access information more easily.
Tran Huu Huynh, Head of VCCI’s Legal Department, underlines the importance of associations operating within the capital’s management mechanisms.
Nguyen Van Suu, Vice Chairman of the Hanoi municipal People’s Committee, says to improve its PCI, Hanoi should early finalize zoning plans until 2020 and land use plans for the 2011-2015 period to create favourable conditions for infrastructure development, tackle issues related to taxation, financing, land acquisition, human resource training and support services, and apply the “one-stop shop” mechanism.
Businesses seeks way to penetrate Chinese market
A seminar was held in Ho Chi Minh City on April 26 to discuss ways for Vietnamese businesses to penetrate the Chinese market.
The event themed “Chinese market - Potential and Opportunities for Development” aimed to provide Vietnamese businesses with practical information about business activity, purchasing power, distribution networks in China as well as market research methods.
Many speakers emphasized that processed seafood and farm products play an important part in the Chinese market and through a distribution chain of 1 million supermarkets and convenient stores, Vietnamese businesses can bring them to Chinese consumers.
A senior economist Tran Duc Hanh from HCM City said that China is Vietnam’s largest importer. In the 2006-2011, the Chinese market makes up over 20 percent of the country’s total export value.