BUSINESS IN BRIEF 29/9

Car sales continue to slide

Total car sales in Viet Nam continued to crash last month, making it the 8th bad months in a row for the industry and seriously denting hopes of an imminent recovery.

August sales hit nearly 6,448 units, declining 4 per cent from July and 33 per cent over the same month last year, the Viet Nam Automobile Manufacturers' Association (VAMA) said in a statement.

Of the figure, 2,012 passenger cars and 2,927 commercial vehicles were sold, down 52 and 10 per cent respectively, compared to the same period of last year while almost all car-makers, including Truong Hai, Toyota, Mercedes-Benz, Honda, GM, Ford, Mitshubishi, Isuzu and VMC, suffered the slump.

Many saw sales drop by more than two-thirds on the same period last year.

VAMA chairman Laurent Charpentier said the reduction in car sales was only partially due to the economic downturn. The main reason was the fact that the industry was influenced by the ghost month (Lunar July).

He predicted that the first days of September would still be affected by the ghost period but the month would end on a higher note than August.

Last month, an increase in sales was only enjoyed by four car-makers including Honda, Vinamotor and VEAM. Notably, Honda sales soared by 100 per cent against the same period last year.

Experts predicted total sales of the market this year might reach 88,000 units by the year's end, representing a fall of 4.6 per cent on 2011, the association said.

VAMA Secretary Pham Duy Hung said the automotive industry would gradually improve after the ghost month.

However, Hung noted that, compared to the same period last year, the industry has seen a slump of about 22,641 vehicles or 38 per cent in the first eight months of this year.

He attributed the decline to economic turbulance, high bank lending interest rates of 18-20 per cent, tightened lending conditions and the 15-20 per cent registration fees in Ha Noi and HCM City.

"This new fee is freezing the market's demand," he said.

The auto industry recession is expected to reduce its annual contribution to the State budget, which had been estimated to hit US$2 billion.

Ernst & Young gives upbeat outlook

Viet Nam is one among four emerging economies reaching the highest growth in Asia and has great potential to compete with regional countries and China, says Ernst&Young, a leading professional service organisation.

James S. Turley, Chairman and Chief Executive Officer of Ernst&Young said at a press briefing on Monday that despite many challenges, he was still optimistic about the Vietnamese economy.

"A young and educated population is a huge potential that Viet Nam has," Turley said.

"With a population of nearly 90 million, more than half of whom are under 30, the country has a strong economic advantage in boosting innovation and creativity," he explained.

An Ernst&Young statement released on the occasion of the firm's 20th anniversary in Viet Nam said the country has made great strides in becoming a global player, not the least through WTO accession in 2007 and was increasing its competitiveness relative to others in the region, particularly China.

In addition, a wealth of dynamic and entrepreneurial talent was the country's strength, it said.

It said the predicted GDP growth rate of around 5 per cent for the next two years was the envy of many developed economies, but in Viet Nam, it means "treading water, given that average incomes are still low and inflation often outpaces growth and the country still requires investment in basic infrastructure."

"It is clear that there is pressure on Viet Nam's Government to decide what steps it will take to correct fiscal imbalances and put the economy back on a secure footing," it said.

Efficient Ba Ria-Vung Tau port facilitates exports

The time taken the Cai Mep International Terminal to upload cargo on to vessels operating on the direct route to the US has been reduced remarkably to 45.63 moves per hour per berth crane.

Operating at this capacity, the terminal last week completed uploading 2,239 containers on to the US-bound Maersk Beumont within 14 hours. Normally, it takes vessels almost a day to have cargo uploaded from Vietnamese ports before long voyages.

The terminal's capacity is expected to facilitate shipments of Vietnamese cargo to the US and European countries.

The Cai Mep International Terminal is located in coastal Ba Ria – Vung Tau Province, 80km away from HCM City. The port has a capacity of 1.1 billion TEUs, a 600m-long wharf and a 14m-deep channel. It can accommodate vessels up to 160,000DWT.

The port was put into official use in December last year, improving Vietnamese port logistics considerably.-

BigC honours Vietnamese beauty with new promotion

French supermarket chain Big C is offering discounts of 5 to 40 per cent on 2,000 cosmetic products and fashion accessories until October 14 under its promotion programme "Honouring Vietnamese Beauty."

The programme aims to celebrate the Vietnamese Women's Day on October 20, giving female customers more opportunities to buy beauty-care products at reasonable prices, and to benefit from free consultancy on proper skin and body care.

Many famous beauty-care brands including L'Oreal, Maybelline, Etude, Eveline and Missha are taking part in the programme. The supermarket has also launched another promotion programme to boost consumption with discounts up to 50 per cent on 500 essential products until October 7.

Software titan records high profits in first eight months

FPT, the domestic software giant, continued to earn a high profit in its core businesses in the first eight months.

The company posted a revenue of VND15.2 trillion (US$728 million) and earned a pre-tax profit of over VND1.5 trillion ($71.4 million).

The company's after-tax profits stood at VND956 billion ($45.5 million) and earnings per share reached VND3,529.

Techcombank receives award from US bank JP Morgan

Techcombank was awarded the 2012 Elite Quality Recognition Award for Outstanding Achievement by top US bank JPMorgan.

JPMorgan evaluates payment service quality of its correspondent banks in order to consider giving the STP (straight through processing) award to banks with STP ratio higher than 99 per cent. Techcombank's STP ratio in 2011 was 99.79 per cent.

The award recognised Techcombank's capability in the provision of international payment services with speed and accuracy, saving time and costs, JPMorgan said.

SeaBank sets up line of credit for small businesses

SeaBank is offering to lend up to VND2 trillion (US$95.23 million) with a preferential interest rate of 10.99 per cent per year to small- and medium-sized enterprises nationwide. Enterprises can access the loan for consumer goods, foodstuffs, home appliances, production, pharmaceuticals, health equipment, electronics and telecoms.

Bank, depository centre to support ETFs

Standard Chartered Bank will support the Viet Nam Securities Depository Centre in providing transfer services to open-ended funds under a memorandum of understanding signed on Monday. The services will include managing investor accounts and establishing ownership of fund certificates.

Standard Chartered has agreed to support the depository centre in technical systems consistent with international practices and to establish technical infrastructure for these services, said centre director Phuong Hoang Lan Huong.

"This is a foundation for diversifying the nascent Vietnamese fund management sector," Huong added.

According to Standard Chartered CEO Louis Taylor, the co-operation would facilitate long-term capital inflows for the development of Viet Nam's economy.

Considerable investor interest has swirled around the development of exchange-traded funds (ETFs) since the State Securities Commission issued a draft circular to govern their operation, said the head of the commission's fund management division Nguyen Thanh Long

"There are now favourable conditions for the introduction of these funds, including the effective operation of the VN30 and HNX30 indices," Long said. "If open funds are soon established, they will likely be able to contribute to reducing bad debt levels and cross-ownership within the banking system."

Domestic funds would also be able to improve their effectiveness through competition with foreign rivals, and the operation of ETFs would help attract more foreign investment to the stock market, he added.

Fashion fair targets textile distributors

The Viet Nam Fashion Fair is scheduled to open next month, targeting distributors for both domestic and overseas markets.

Hoang Ve Dung, deputy general director of the Viet Nam Textile and Garment Corp (VINATEX), which is organising the annual event, said the fair would showcase production capacity of companies in the industry and the Autumn-Winter season collections. It will also introduce trends of the coming Spring season.

"We wish to continue to introduce to distributors and end-users Viet Nam's strong brands and provide an opportunity for Vietnamese companies to expand their co-operation with partners elsewhere in a more professional way," he said.

Enterprises learn lessons in data security at Da Nang University

Representatives from 20 businesses in central Da Nang City took part in a training course on computer and network security at Da Nang University yesterday.

The course was co-organised by French NGO Passerell Numeriques Viet Nam and the software development centre of the university.

Passerell Numeriques previously held a training course for 50 Vietnamese information technology teachers from colleges in Da Nang.

The NGO has been helping educate 150 poor students on information technology since 2010.

Da Nang has two major software parks – Quang Trung and Da Nang – which house 140 IT companies and 27,000 workers.

Hong Kong clothing maker sets up shop in Nam Dinh

The Hong Kong-based Smart Shirts Ltd group has decided to build a factory in Bao Minh Industrial Park in the northern province of Nam Dinh. It will open next year.

On an area of 20ha, the group will build a complete chain from fibre production to dyeing and garment making.

In the first phase of its project, it will invest US$18 million in a fibre producing factory with a capacity of 3,200 tonnes per year.

Other textile and garment companies such as Far Eastern and Global Dyeing are also discussing investing in the Bao Minh IP which has a standard system for waste-water treatment and is said to be suitable for dyeing and garment producers.

Covering an area of 154ha, the industrial park also has investors from other sectors, including textile machines, electronic appliances and construction materials.

Delta races to protect orchards from flooding

Local authorities and farmers in the Cuu Long (Mekong) Delta have been strengthening dyke systems for protecting orchards as water levels rise in the Mekong River.

Besides protecting paddy fields during the annual flooding season, which normally occurs between August and November, the delta also focuses on orchards as the region is also the country's largest fruit producer.

In Ben Tre Province, one of the downstream provinces, Cho Lach District is upgrading and building new dykes to protect 9,500ha of fruits, flowers and ornamental trees.

Bui Thanh Liem, head of the Cho Lach Agriculture and Rural Development Office, said the district was raising the height of existing dykes and building new dykes in flood-prone areas as well as those at the risk of soil erosion.

The district was determined not to let floodwater inundate its orchards, he said.

"Of the 9,500ha, more than 1,000ha of rambutan and durian trees that are bearing out-of-season fruits are being strictly protected from the floodwater threat," he added.

Of the total of VND9 billion (US$428,000) being spent on strengthening and building dykes, VND3 billion has been drawn from the State budget and VND6 billion from local people's contributions.

Nguyen Thien Phap of the Tien Giang Steering Committee for Search and Rescue, Flood and Storm Prevention and Control, said one of their most important tasks was to protect more than 40,000ha of fruit gardens in the province from floodwaters. Over the last several days, local authorities and farmers in the province's Cai Lay, Cai Be and Chau Thanh districts have renovated dykes and shored up dozens of erosion-prone areas to protect fruit orchards, he said.

Local authorities have also warned farmers to closely monitor the water levels in local rivers and streams so that prompt measures can be taken to save the orchards, he added.

Tien Giang Province is the delta's largest fruit producer.

In Hau Giang Province, Chau Thanh District has upgraded dykes and built new ones to protect 4,448ha of various kinds of fruits this year, according to the local Agriculture and Rural Development Bureau.

In the upstream province of Dong Thap, normally one of hardest-hit provinces during the flooding season, nearly 25,000ha of fruits in Cao Lanh, Chau Thanh, Lai Vung and Lap Vo districts were being "strictly protected," local officials said.

Lai Vung now has more than 1,000ha of pink mandarin, a local speciality, that cannot withstand flooding, according to the district's Agriculture and Rural Development Bureau.

Therefore, it has invested more than VND5 billion to build dykes in Tan Thanh, Long Hau and Tan Phuoc communes.

Of nearly 4,000ha on which other kinds of fruits are grown in Lai Vung, 20 per cent are scattered, so the district cannot build dykes to protect them," local officials said.

They have advised local farmers to take steps on their own to protect their orchards, they added.

Export of agriculture, forestry and aquaculture products increases

Export turnover of agriculture, forestry and aquaculture products reached US$20.4 billion in the first nine months of this year, an increase of 10.2 per cent compared with the same period last year, said the Ministry of Agriculture and Rural Development yesterday.

It's reported that exports of agricultural articles such as rice, coffee, cashew and cassava continue to be stable with an estimated turnover of $11.1 billion, 6.2 per cent higher than the same time last year.

The ministry said that the rice export market saw many changes this year. China has become Viet Nam's biggest rice importer while other countries such as the Philippines, Indonesia and Malaysia reduced their volume.

In the first nine months of this year, Viet Nam exported 6.2 million tonnes of rice worth $2.78 billion, an increase of 4.5 per cent. The average price of rice reached $452 per tonne, a reduction of 9.2 per cent.

As for coffee, Viet Nam exported 1.36 million tonnes worth $2.85 billion, 36.8 per cent higher than that of the same period last year. Germany and the US are still the leading importers of Vietnamese coffee while Indonesia is an emerging market with its import of coffee nine times higher than last year. It's forecast that the export volume will reduce due to a lack of supply and increase again when the harvest starts at the end of this year.

The export of wood and wood products to countries including the US, China and Japan will likely increase in the next few months due to the increasing demand in the world market.

The US remains the biggest importer of Vietnamese seafood with a 19 per cent share in the market, followed by Japan with 15.1 per cent and South Korea with 7 per cent.

Japanese SMEs poised to flock to Vietnam

The number of Japanese small and medium-sized enterprises (SMEs)  investing in Vietnam will likely more than double in one year’s time, said Toshio Nakamura,  president of the Japan Chamber of Commerce & Industry.

“I believe the number of Japanese SMEs coming to Vietnam will be more than double in the next one year,” Nakamura told the business matching session with Vietnamese enterprises held in Hanoi on Monday.

The event jointly organized by the Vietnam Chamber of Commerce and Industry (VCCI) and Japan Chamber of Commerce and Industry attracted up to 120 representatives who are executives of 100 Japanese groups and firms. The SMEs delegation is active in the areas of trade, electronics, software, banking-finance, communications and manufacturing among others in Japan.

VCCI chairman Vu Tien Loc said this is one of the biggest Japanese business missions to Vietnam. He pinned high hopes on an influx of Japanese SMEs investment into the country afterward.

Japanese SMEs had accompanied larger compatriots in previous times but now they want to seek business opportunities in Vietnam by themselves, Nakamura said.

At an investment promotion seminar hosted earlier this year, Hideo Okubo, chairman of the Supporting Committee for Globalization of SMEs and the Tokyo Business Association, said up to 97.3% of Japanese SMEs in the manufacturing sector only operated within Japan. Japan’s outbound investment is rather huge but it is mostly carried out by giant groups as smaller companies are not accustomed to investing outside the country, he clarified.

Besides, Nakamura explained to the Daily that the aftermaths of the disastrous earthquake in March 2011 have made the Japanese economy stagnant and the country’s Government has begun supporting SMEs in making outbound investment to cope with the situation.

The Japanese government realized that many industrial parks for supporting industries have been built in Vietnam to pave the way for Japanese investment, he said. And Vietnam is always a favorable destination for Japanese investors, he noted.

Dinh Manh Hung, deputy director of the Supporting Center for SMEs, said Japan is one of Vietnam’s most important partners, with total two-way trade last year worth over US$21.12 billion and pledged investment capital of more than US$26 billion.

Data of the Foreign Investment Agency indicates as of late last month, Japan had over 1,729 valid direct investment projects in Vietnam with total registered fund of US$28.2 billion, topping 96 nations and territories investing in Vietnam.

In the first eight months of the year, Japan also took the lead in terms of the number of projects and registered investment amounts among foreign investors in Vietnam.

Standard Chartered, VSD sign MoU

Vietnam Securities Depository (VSD) and the Standard Chartered Vietnam Bank on Monday signed a memorandum of understanding (MoU) on cooperation to develop transfer agency services for the open-ended funds in the country.

The services include maintenance of investor registration, establishment and management of their accounts, processing of subscriptions, redemptions, switching, transfers of fund certificates, support for corporate actions and provision of transaction confirmations, account statements and other related documents and reporting requirements.

Under the MoU, the bank will provide technical assistance for VSD in building infrastructure for transfer agent services of open-ended funds in line with international practice.

This agreement supports a circular issued by the Ministry of Finance last year to allow the establishment of open-ended funds in Vietnam.

Vinacafe invests in Myanmar rubber, coffee farming

Vietnam National Coffee Corporation (Vinacafe) will plant 10,000 hectares of rubber and 10,000 hectares of coffee in Myanmar.

Nguyen Cong Hoang, deputy general director of Vinacafe, told the Daily on Monday that the estimated farming cost was around VND200 million and VND50 million per hectare of rubber and coffee respectively with the money mainly borrowed from banks.

The Myanmar project does not affect the restructuring scheme Vinacafe has presented to the Ministry of Agriculture and Rural Development.

Among the 2,000 hectares of rubber and 25,000 hectares of coffee Vinacafe currently farms, there are around 8,000 hectares of old coffee trees which need to be re-planted in the next three years.

According to Nguyen Viet Vinh, general secretary of the Vietnam Coffee and Cocoa Association (Vicofa), Vietnam’s coffee yield of the 2012-2013 crop will drop by 15-20% from the previous crop due to sudden weather changes. In addition, some 100,000 hectares have two decade old coffee trees that need to re-planted, and thus the yield is not as high with only around one ton per hectare.

The current coffee price in the Central Highlands ranges from VND41,900 to VND42,100 per kilogram, down VND100 per kilogram from the weekend.

In related news, the club of Vietnam’s 20 leading coffee exporters has proposed to temporarily store 300,000 tons of coffee in the 2012-2013 crop and offer interest rate support for farmers when the coffee price falls to avoid a deep price cut.

Personnel training key to luring German investors

Boosting personnel training is considered an important factor to attract German investors into Vietnam in the context that German firms active in Vietnam are struggling with the lack of highly-qualified human resources.

Marko Walde, chief representative of the German Chamber of Commerce and Industry in Vietnam, said 90% of German enterprises are of small and medium size and they often plan for long-term investment, lasting 15-20 years. To operate production machines, they need highly-skilled laborers.

“German businesses do not come to Vietnam for cheap workforce and then shift their production to other destinations a few years later,” said Walde at the workshop “Vietnam-Germany strategic partnership: situation and prospects” held in HCMC on Monday. The event was organized by the Vietnam Union of Friendship Organizations and the Vietnam-Germany Friendship Association of HCMC in coordination with Friedrich Ebert Foundation.

Vocational training is identified as one of the important areas to the development of relations between Vietnam and Germany in the coming time. Conrad Cappel, German consul-general in HCMC, said the two countries had agreed to cooperate in investment in human resources.

In October 2011, on the occasion of German Chancellor Angela Markel’s visit to Vietnam, leaders of the two nations signed an agreement to raise the bilateral relationship into strategic partnership.

Vietnam and Germany have joined hands in certain education and vocational training projects. For example, the Vietnamese-German University, specializing in training high-tech engineers, was established in HCMC in 2008 and recently the International German School was opened in HCMC’s District 2 on September 19.

Jurgen Mallon, principal of the Vietnamese German University, said the school combined vocational training and scientific research in order to supply high-level human resources to German enterprises as well as Vietnamese firms active in supporting industries.

Mallon informed a similar campus would be developed on a 50-hectare area in Binh Duong. The project worth US$180 million is set for completion in 2017.

As of July 20, 2012, Germany still had 184 valid projects in Vietnam, with total registered capital of US$904 million ranking 24th among 95 nations and territories with investment in Vietnam.

SeABank applies 10.99 pct lending rate on SME loans

Southeast Asia Commercial Bank, or SeABank, has set aside a credit line of VND2 trillion with lending rate of 10.99 pct annum to help finance local small and medium-sized enterprises (SMEs).

Le Quoc Long, deputy general director of SeABank, said that all SMEs are able to access this capital source. The preferential rate is applicable in the first month for loans of six months and below and in the first three months for loans of over six months. Customers borrowing U.S. dollars are subject to a rate of 4.5 pct annum and similar conditions.

The program will run till December 31 to further support local enterprises, which have large capital demands at year end for business, imports and goods storage activities. The lender prioritizes enterprises in the fields of consumer goods, food, home utensils, export and import, processing, pharmaceutical and health equipments.

SeABank has recently launched the L/C UPAS (Letter of Credit Usance Paid at Sight) product for enterprises. Using the product, the exporter will be paid by the bank immediately while the importer will enjoy a deferred payment within up to 180 days.

The bank applies interest rate of 3.5 pct during the deferred payment time and finance customers with foreign currencies to pay the L/C.

SeABank saw a decline in credit growth in the first six months of this year although the lender is allocated a credit growth quota of 17 pct in 2012.

Honda VN recalls over 150,000 recently-made bikes

Honda Vietnam said from today (September 25), the company will fix free of charge the electric cord error for 152,053 Wave motorbikes manufactured this year.

The company said the brake lights and rear lights were mis-connected in the Wave 110 RSX 2012 but this mistake did not affect the bike’s basic operation.

It also said this error occurred just to a single batch and not to all Wave 110 RSX 2012.

The recall period is from now to December 31 this year at authorized Honda agencies.

In July, Honda says it was recalling more than 320,000 cars worldwide because of a door lock defect.

The faulty locks could allow the vehicles' doors to open unexpectedly, the automaker said, adding that its recall was for the 2012 CR-V sports utility vehicle and 2013 Acura ILX sedan.

Standard Chartered Bank (Vietnam) Ltd. opens its new head office

Today, Standard Chartered Bank (Vietnam) Ltd officially opened its newly relocated head office at 18th Floor, Keangnam Hanoi Landmark Tower in Hanoi.

The premises wereopened by guest of honour the Lord Mayor of the City of London, Alderman David Wootton.

The growth in business and headcount of Standard Chartered in Vietnam has led to the need to secure a large office space. The new office follows the bank’s global workplace standards and is fully equipped with modern technology systems to empower the performance of its staff. The beautifullydesigned office has a lot of communal space for meetings, discussions, collaboration, interaction and networking and a spacious working area where staff can choose which desk to work at every day in order to improve flexibility.

Louis Taylor, CEO of Standard Chartered Bank (Vietnam) Ltd. said: “We are honoured to have such distinguished guests here today to open our new premises officially. I hope all our talented and dedicated staff will enjoy this new, professional working environment.This new office demonstrates the bank’ssignificant long-term commitment to Vietnam, our clients, customers, staff and community. We have continuously invested in our business in Vietnam so it can contribute to the economic development of the country, and to fulfil our brand promise – to be Here for good”.

The Lord Mayor of the City of London, Alderman David Wootton said: “Standard Chartered have a long history in Vietnam, so I am pleased to witness the beginning of a new chapter with the opening of their new headquarters in Hanoi. This is a tangible demonstration of Standard Chartered’s longer term commitment to Vietnam, and of the UK’s interest more broadly of strengthening the trade and investment ties with Vietnam.”

Having opened its first Vietnamese branch in 1904, Standard Chartered’s presence in Vietnam is among the longest of any international bank. The bank has been introducing expertise, products and services with world-class quality, and believes in building a sustainable business for the long term. Standard Chartered is trusted worldwide for upholding high standards of corporate governance, social responsibility, environmental protection and employee diversity.

$4.5m employment assistance projects

The International Labour Organisation (ILO) on September 24 announced its new assistance projects worth $4.56 million at the first meeting of the new Vietnam Decent Work Country Programme Steering Committee in Hanoi.

The second phase (2012-2016) of the on-going Industrial Relations Project, with an estimated budget of $3 million, will support the development of industrial relations, the wage system reform including the drafting of Minimum Wage Law and the implementation of the amended Labour Code and Trade Union Law.

Meanwhile, $1 million will be spent on the second five-year phase of the Sustaining Competitive Enterprises Project aimed to increase productivity and market-access of small and medium-sized enterprises while promoting respect for workers’ rights.

The Luxembourg government has contributed 980,000 euro ($1.27 million) to intensifying the ILO supports over youth employment promotion in rural areas in four countries including Vietnam.

A budget of $246,000 has also been allocated to the ILO project on Promoting Rights and Opportunities for People with Disabilities-Equality through Legislation during 2012-2013.

The project, a continuation of the previous projects, aims to create an enabling legal environment, promote skills and entrepreneurship development and measures to eliminate discrimination against people with disabilities in Vietnam.

The first meeting of the Vietnam Decent Work Country Programme Steering Committee also highlighted the need to ensure decent jobs for all workers in the country during 2012-2016.

“Creating decent work opportunities for all, including the poor and the disadvantaged groups, will be a key to the success of Vietnam in poverty reduction and human resource development, especially in the context of the country’s demographic dividend,” said ILO Vietnam director Gyorgy Sziraczki.

Some 1.3 million Vietnamese are now unemployed. Among this group, those aged between 15 and 24 represent about half and youth unemployment is on the rise.

Even for those who are employed, the quality of jobs is another story. About 69 per cent of female workers now are in vulnerable group, compared to 54 per cent of males.

The 2012-2016 Decent Work Country Programme aims to improve the quality of the national economic growth through high quality of human resources, decent employment and sustainable enterprise development.

The programme will promote social protection and address the needs for decent work by the disadvantaged and vulnerable groups.

The programme is also expected to help Vietnam become a “modern-oriented industrialised country” by strengthening its labour market institutions and governance.

“The Ministry of Labour, Invalids and Social Affairs and the ILO have had a very successful co-operation over the past period, resulting in better employment legal systems, enhanced law enforcement and improved working conditions and labour standards in Vietnam,” said Minister of Labour, Invalids and Social Affairs Pham Thi Hai Chuyen.

“However, we realise that many challenges are still ahead, particularly in the context of industrialisation and international integration.”

The 2012-2016 Decent Work Country Programme is the second of its type in Vietnam. The first programme covered the period between 2006 and 2010.

The Vietnam Decent Work Country Programme Steering Committee, established in May 2012, is chaired by the Minister of Labour, Invalids and Social Affairs and also composed of the presidents of employers’ organisations – Vietnam Chamber of Commerce and Industry and Vietnam Cooperative Alliance, the president of workers’ organisation – Vietnam General Confederation of Labour, and the ILO Vietnam director.

Deputy PM committed to better business environment

Vietnam will further improve its business environment to help foreign investors seek opportunities in the country, says Deputy Prime Minister Hoang Trung Hai.    

Speaking at a meeting with EU enterprises in Hanoi on September 26, Hai underlined the significant development of the Vietnam-EU relationship since diplomatic ties were established in 1990.

Describing the EU as Vietnam’s leading partner, he highlighted how two-way trade has enjoyed a six-fold increase from US$4.1 billion in 2000 to US$24.29 billion in 2011.

Specifically regarding investment, Hai noted the EU currently runs 1,687 projects in Vietnam with a total registered capital of US$32 billion. It is also the second largest official development assistance provider, with US$12 billion committed over the 1996-2011 period.

The Deputy PM reaffirmed Vietnam’s policy of promoting relationships with the EU and its member nations.

In 2005, the Vietnamese government compiled its master plan on Vietnam-EU relations. Endowed with a purview until 2010, and establishing orientations until 2015, the plan targeted building equal partnerships, as well as fostering long-term, comprehensive cooperation in the interests of peace and development.

Hai said the signing of a Partnership and Cooperation Agreement (PCA) in June 2012 laid a firm foundation for the development of the relationship between Vietnam and the EU.

Most notably, current bilateral negotiation on a free trade agreement negotiations are expected to offer opportunities for improving economic relations and creating favourable conditions for increasing two-way trade and EU investment in the Southeast Asian nation.

The Deputy PM emphasised that the Vietnamese government is making every effort to create the best possible conditions to help foreign businesses achieve success in the country.

Vietnam, Malaysia boost cooperative development

Vietnam and Malaysia will strengthen bilateral cooperation in developing the cooperative movement on an equal and mutually beneficial basis.

To this effect, a memorandum of arrangement (MoA) was signed by representatives from the Vietnamese Ministry of Planning and Investment (MPI) and the Ministry of Domestic Trade, Cooperatives and Consumerism (MDTCC) of Malaysia in Kuala Lumpur on September 26.

Under the MoA, the two countries will boost trade between their cooperatives through import-export activities or joint venture projects as well as expanding markets for cooperatives’ products and services.

They will promote the exchange of information and experts, and organise training courses to improve the capacity of cooperative managers.

The two sides decided to set up a joint working group to realise the MoA.

At the signing ceremony, MDTCC Minister Ismail Sabri Yaakob affirmed that cooperatives are one of the important sectors which greatly contribute to the economic development of countries, including Malaysia and Vietnam.

MPI Deputy Minister Dang Huy Dong expressed his belief that the MoA will play an important role in the development of the cooperative movement in each country.

Vietnam now has about 19,500 agricultural and non-agricultural cooperatives.

UK seeks closer trade ties with Vietnam

UK agencies have signed a memorandum of understanding (MoU) on strengthening trade and investment cooperation with Vietnam.    

The MoU was inked on September 26 by representatives from the UK General Consulate in Ho Chi Minh City, the UK Trade & Investment (UKTI),and the UK Business Association in Vietnam.

The signing ceremony was witnessed by the City of London’s Lord Mayor Alderman David Wootton as part of his current visit to Vietnam.

Under the MoU, which is valid for three years, UK enterprises will receive up to date information on the Vietnamese market, its current business climate, and the latest policies aimed at attracting further investment.

At present more than 400 UK businesses are investing in Vietnam. Nick Holder, chairman of the UK Business Association in Vietnam, said he believes the MoU will help UK enterprises by facilitating the provision of  information through official channels including the UK General Consulate and the UK Trade & Investment (UKTI).

FDI reaches US$9.5 billion in nine months

Vietnam has attracted US$9.52 billion in registered FDI during the past nine months, or 72 percent of the figure recorded a year ago.
     
The figures were released by the Ministry of Planning and Investment's Foreign Investment Agency (FIA).

In September alone, FDI businesses poured more than US$1 billion into the country, the FIA reported.

The processing and manufacturing industries took the lead in terms of newly and additionally registered FDI capital of US$6.24 billion, accounting for 65.5 percent of the total FDI.

Real estate ranked second, attracting US$2 billion with eight projects.

The retail and communications sectors came in the third with a total of US$400 million.

Japan remains the country's leading source of foreign investment, recording a total registered capital of US$4.7 billion. Samoa and the Republic of Korea ranked second and third respectively.

Nine-month FDI disbursement hit nearly US$8.1 million, including US$820 million in September alone.

Office rental prices going down in HCM City

There are some signs that office rental prices are following a downward trend.

The warning came from Greg Ohan, director of Office Leasing Department of CBRE Vietnam at a press conference held in HCM City on September 25.

Mr Ohan said by the end of the third quarter, the average leasing price of level A offices had dropped slightly to more than US$30 per square metre per month and many companies planned move from B class to A-class buildings.

CBRE Vietnam said that more than 45,000 square metres of office space in level A and B buildings will be finished and launched on to the market soon.

The average leasing office space is 300 square metre with a rental price hovering between US$15-25 per month, but demand far exceeds supply.

The office space for lease in Bitexco Financial Tower - the highest building in the southern hub, has been amongst fully occupied most of the time.

In the meantime, four-fifths of ICON 68 building’s trade centre has been booked in advance including seven cinemas, restaurants and culinary areas before it officially opens in late November.

Deal aims to boost trade, investment with Britain

The UK Trade and Investment Viet Nam and British Business Group Viet Nam signed yesterday a Memorandum of Understanding that aims to increase trade and investment between the UK and Viet Nam.

MoU was signed in HCM City during a visit to Viet Nam of the Lord Mayor of the City of London, Alderman David Wootton.

The UK Trade and Investment Viet Nam (UKTI) and the British Business Group Viet Nam (BBGV) have agreed to work more closely to increase trade and investment between the UK and Viet Nam.

Under the three-year MoU, UKTI and BBGV would provide high-quality support to UK businesses with an interest in Viet Nam, both those established in the country and those exploring opportunities. They will also work together to encourage more Vietnamese companies to consider investing in the UK.

Many large British companies are operating in Viet Nam in many sectors, such as HSBC, Standard Chartered and Prudential.

VN companies fail to get foothold in Ukraine

Vietnamese businesses have failed to gain a significant foothold in Ukraine, despite marking it out as a key growth market for domestic enterprises, said deputy head of the Ministry of Industry and Trade's Trade Promotion Centre Le Hoang Oanh.

Vietnamese exports currently account for a modest 1.58 per cent of the Ukrainian total import value, Oanh told a Ukrainian investment conference on Tuesday.

But, the demand for Vietnamese commodities in the European country has increased, she said, adding that the list of key imports and exports will increase considerably if trade links are improved.

Yevhen Prypik, head of the Ukrainian Embassy's Trade Office in Viet Nam, said that Ukraine was willing to import more Vietnamese products, especially machinery, seafood, footwear and agricultural goods such as tea, coffee and rice.

At present, many Vietnamese and Ukrainian firms say they would like to expand their business in the respective markets. However, language barriers, cultural differences and a lack of information on legal, trade and demand issues, as well as the physical distance between the two countries, are proving to be the biggest challenges.

Vu The Hoang, chief representative of N&M Ukraine Co in Viet Nam which promotes trade co-operation among enterprises from Viet Nam, Ukraine and Europe, also outlined technical barriers and payment difficulties as major business obstacles.

Viet Nam and Ukraine are yet to establish a convenient payment channel for transactions between the two nations' businesses, Hoang said. In order to support local enterprises' trade activities in Ukraine, the Ministry of Industry and Trade plans to implement trade promotion programmes and market research, as well as organise exhibitions in the Ukraine and open representative offices in the country.

Previously, Viet Nam and Ukraine have signed 20 economic and trade co-operation agreements intended to facilitate bilateral co-ordination between the two business communities, particularly in areas of trade, marine transport, aviation and investment.

By the end of 2011, Ukrainian businesses had 10 projects with a combined registered capital of US$23.273 million in Viet Nam, ranking 59th among nations operating in the country in terms of investment value. Ukraine's investment projects focus on transport, the processing industry and manufacturing.

Viet Nam, meanwhile, has so far invested in five projects in Ukraine worth nearly $3 million.

Viet Nam exported $130 million worth of goods to Ukraine during the first eight months of this year.

Sun shines on Ninh Thuan salt harvest
 
The central coastal province of Ninh Thuan, one of the country's leading salt producers, has closed this year's production season with an output of more than 202,000 tonnes, up 55 per cent against last year.

The province's Department of Agriculture and Rural Development says that with an average yield of 400 tonnes per ha and selling prices around VND1.1 million (US$50) a tonne, salt farmers have earned a high income this year.

Many salt farmers said they harvested a bumper crop and earned better prices this year because other salt producing provinces were affected by rains and poor harvests, while Ninh Thuan had little rain and more sunny days.

The salt producing season normally begins in December and lasts until the end of August next year. Some years, the season lasts till September.

With a coastline more than 105km long and sunny weather almost all year round, Ninh Thuan has great advantages for salt production. The province now has 2,371ha of salt fields, mostly in Thuan Nam and Ninh Hai districts.

Ngo Minh Tu, chairman of the Tri Hai Commune People's Committee in Ninh Hai District, said: "Salt farmers here are very glad because they have earned profits of more than VND100 million per ha this year."

The commune has 290 salt farming households with a total area of 210ha.

Besides traditional salt production on soil beds, many farmers in Ninh Thuan have also begun using plastic canvas sheets in their fields to produce clean salt.

This technique has advantages of having a shorter production period, higher yield, whiter salt and less labour costs, because farmers do not need to level salt fields every year.

The salt production period, from pumping sea water into fields and waiting for it evaporate takes about seven days in traditional fields, but only about five days when plastic canvas sheets are used.

However, the initial investment capital for this production method is high.

If farmers use plastic canvas sheets made in South Korea, the cost would come up to about VND1.2 billion ($57,000) per ha.

Ton That Anh Dung, director of the Ninh Thuan Salt Joint Stock Company, said the initial investment cost for salt fields with plastic canvases was high but the sheets could be used for more than 10 years. The productivity of salt fields with plastic canvases is always 25-35 per cent higher than traditional salt fields, he said.

The salt produced in plastic canvases was also cleaner and companies needing clean salt would sign contracts to buy it, offering farmers stable prices, he added. Farmers using plastic canvas sheets to produce clean salt will not have to face the prospect of prices being pushed down by traders, he said.

Of 445ha of salt fields in Ninh Hai, 25 per cent have used plastic canvas, according to the district's Agriculture and Rural Development Bureau.

 
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