Last update 6/7/2012 7:00:00 AM (GMT+7)
  

BUSINESS IN BRIEF 7/6
GM Vietnam recalls 10,350 Chevrolet Captivas

GM Vietnam Motors Company (GM Vietnam) has officially started its recall campaign targeting certain models of Chevrolet Captiva cars, the country’s vehicle safety watchdog Vietnam Registry announced yesterday.

GM Vietnam is recalling 10,342 Chevrolet Captiva CA26R, Captiva CF26R, Captiva KLAC1DF, and Captiva KLAC1FF cars manufactured between December 1, 2006 and October 30, 2011 for a replacement of the antilock brake system (ABS), the company said.

The ABS system is recommended to be equipped on Chevrolet sedans, but the brake fluid A DOT 4 used in the cars can reduce the system’s operation effectiveness, the Vietnam Registry said.

Owners of imported Chevrolet Captiva and Chevrolet Windstorm cars from China and Korea, which also belong to a similar recall in the two countries, are also eligible to enjoy the repair and replacement in Vietnam, GM Vietnam said.

The recall is implemented at all authorized dealers and service centers of GM Vietnam across the country.

In late April, Euro Auto, the authorized dealer of BMW in Vietnam, also announced a recall of 178 BMW 5- and 6-series cars in Vietnam due to problems with the battery-cable cover that was incorrectly installed.

A month earlier, the local importer and distributor of Porsche in Vietnam, the Prestige Sports Co Ltd, also launched a recall campaign of 131 Porsche CAYENNE (diesel), CAYENNE S Hybrid, CAYENNE S and CAYENNE Turbo models to check and replace the lock of the front headlight.

The recall was for cars made between March 8, 2010 and January 31, 2012, the importer said.

Shares rally on both bourses

Shares continued to rally on the HCM City Stock Exchange yesterday with the support of large-cap stocks.

The benchmark VN-Index gained another 1.28 per cent to finish yesterday at 426.39 points while the VN30 Index, which measures performance of the biggest 30 shares by value and liquidity, climbed 1.22 per cent to stand at 504.11 points.

Amongst the 30 codes, 25 posted gains with financial Ocean Group (OGC) and Sacombank Securities Co (SBS) hitting the one-day limit rise of 5 per cent. Other heavyweight shares such as Vietcombank (VCB), insurer Bao Viet Holdings (BVH) and property developer Vingroup (VIC) each also rose over 2 per cent.

Trades decreased in the afternoon, driving the market value down 13 per cent from a day earlier, totalling nearly VND1.75 trillion (US$83.3 million) while volume of trades reached 91.5 million shares.

Negotiated trades continued to be high, reaching VND1.2 trillion ($57.1 million), led by Sacombank (ST) with another 44.8 million shares traded. In nearly one month, almost 200 million STB shares were exchanged through negotiations, accounting for nearly 20 per cent of the bank's charter capital.

The HNX-Index on the Ha Noi bourse also recouped 0.27 per cent to close yesterday at 73.78 points with advancers doubling decliners. However, market volume and value were still sluggish with 36 million shares worth almost VND350 billion ($16.7 million) traded.

According to stock analysts of BIDV Securities Co, the two-day recovery was purely technical when shares fell to an attractive price range and it has yet to signal an uptrend, especially while overseas investors continued to unload shares on the HCM City exchange.

Foreigners again concluded yesterday as net sellers on both stock exchanges, responsible for a combined net sell of VND48 billion ($2.3 million). Since the beginning of this week, they unloaded a combined VND272 billion ($13 million) worth of shares on both markets, of which shares worth over VND250 billion ($11.9 million) were sold on the HCM City exchange.

Besides, the Vietnamese dong traded over banks slipped to over VND21,000 against the US dollar, heaping pressure on investor psychology, they wrote in a research note.

"Risk levels are rising rapidly for investors holding shares. Therefore, investors should consider reducing the proportion of stocks in their portfolio to minimize the risk of further market decline."

Intel Capital invests in Vietnam for first time

Intel Capital, the investment arm of the world’s largest chipmaker, has announced it is pouring US$17 million into companies in Vietnam and Singapore, marking its first-ever investment in this country.

The money will be split in undisclosed amounts between Vietnam Communications Corporation and Singapore’s Reebonz.com, Intel said during the World Economic Forum in Bangkok on May 31.

The company called Southeast Asia one of the world’s fastest-growing markets for advanced technology, driven by robust economic growth and a rising middle class.

“As a result, we’re seeing strong demand for e-commerce and cloud-based services across the region, and these investments will help to accelerate that trend,” said Gregory Bryant, vice president and general manager of Intel Asia-Pacific.

Its Hanoi-based partner, an internet infrastructure and services company, declined to give a dollar figure for the investment. But, “It’s not a small sum,” the corporation’s deputy general director Nguyen The Tan said.

Vietnam Communications Corporation provides online content, e-commerce, social media, advertising networks, and mobile value-added services.

Tan said the new financing would help the company expand staff to 1,800 from 1,200 this year, open 10 to 15 new websites, and upgrade popular e-commerce websites like Muachung, Muare, and SohaPay. The company is recruiting.

Intel has lodged an application for a license to invest in the Vietnamese corporation. It said the investment would be used to drive technology adoption and high-speed broadband usage.

In Ho Chi Minh City’s Saigon Hi-tech Park, Intel is already operating a $1 billion chip testing and assembly factory.

Intel entered the Southeast Asia market in 1999.

Agricultural sellers told to be wary of Chinese traders

Rice exporting businesses and pineapple farmers in the Mekong Delta have been told to remain cautious in dealing with foreign traders, especially those from China.

Truong Thanh Phong, CEO of Vietnam Northern Food Corporation, has recently asked the corporation’s subsidiaries to “be extremely wary when signing rice exporting contracts to China in order to avoid losses and unfortunate consequences.”

Phong said there are signs that the Chinese market is finding ways to cancel the signed contracts with Vietnamese rice exporters.

“They will use technical barriers to refuse to receive the products when they arrive at the ports, or cancel deals,” he said.

Moreover, some Chinese traders have asked local businesses to mix aromatic and white rice together in contracts signed to export aromatic rice.

“Businesses should not follow this request, in order to protect the Vietnamese rice quality and reputation,” the Vietnam Northern Food Corporation ordered.

According to the Vietnam Food Administration (VFA), export turnovers of Vietnamese aromatic rice in the first five months of this year reached 221,309 tons, up by 83.4 percent year on year.

“Vietnam now has a very competitive price on its aromatic rice compared to Thailand, sending customers towards its products,” VFA stated.

The agency also said total rice export turnover in Jan – May stood at 2.54 million tons, and was valued at US$1.16 billion, which is a 726,000-ton drop in volume, and a $381 million decline in value.

In a separate development, the People’s Committee of the Mekong Delta province of Tien Giang has recently ordered its counterparts in Chau Thanh and Tan Phuoc districts to tell their local farmers to be careful when directly selling pineapple to Chinese traders.

The warning was issued in the wake of incidents in which many farmers incurred losses after some Chinese traders, who bought the products at prices higher than the market rate, suddenly vanished, leaving farmers with a huge unsold stock of the fruits, while prices have slumped as supply outstrips demand.

Authorities have also identified two Chinese nationals who have collected pineapples in the two districts over the last few months.

They are Zhang Wenbin, 49, and Chen Guoqiang, 31, who have joined hands with a fruit wholesale store called Tu Linh in Cai Be District to buy around 50 – 80 tons of pineapple a day to export to China.

The two have left the districts, local authorities said.

Which way leads to a green economy?

Managers and scientists need to choose a viable way to develop a "green" economy in Vietnam as the current national economy still depends heavily on the “brown” model.    

Vietnam’s policy of achieving steady and sustainable economic growth is in line with the common trend around the world. To this end, the focus will be on developing a green economy. But how to make it fit in nicely with the current socio-economic and political situation in Vietnam remains an open question.

According to the Ministry of Natural Resources and Environment (MoNRE),“green economy” is still a new concept in the world, let alone Vietnam. Changing the overall growth model and restructuring the model for economic growth is no easy task for Vietnam. To be sure, there will be certain challenges to be overcome on the way to a green economy.

The failure of both old and new technologies to keep pace with the current fast growth as well as the ineffective application of modern technological advances, have led to a huge waste of natural resources, environmental pollution and low economic efficiency.

Vietnam is a densely-populated country. But Vietnamese consumers do not have the habit of choosing eco-friendly products, which dampens efforts to make the national economy go green.

Associate Professor Dr Nguyen Danh Son from the Vietnam Association for Nature Conservation and the Environment says that most sections of society, including policy makers, still regard economic growth as a priority and natural resources simply as the means to achieve development targets.

Towards a green economy, Son argues, it is essential to change the common concept of valuing “economic interests above environmental protection”, as well as the idea that protecting natural resources and the environment is anything but profit making.

According to Dr Nguyen Van Tai, Head of the MoNRE Natural Resources and Environmental Strategy and Policy Institute, a green economy includes three criteria:  eco-system based development, proper exploitation of natural resources, and development based on a low carbon footprint and low levels of waste.

As Tai puts it, to develop a green economy, Vietnam needs to take full advantage of its natural resources, reduce the use of fossil fuels, and develop renewable energy such as solar and wind power. It also needs to revamp legal policies and improve the capacity for managing natural resources, protect the environment, and learn how to cope with climate change.

Another way is to re-orient production towards environmentally friendly products and a low-carbon economy, while dealing with environmental issues caused by various economic sectors.

To achieve these targets, Tai underlines the need to remove policy barriers, abolish environmentally harmful subsidies, and create a favourable legal environment to boost the production of environmentally friendly products and services.

In addition, the State should support the development of key “green economy” sectors by offering incentives and providing investment stimulus packages for eco-friendly goods and services.

At the 2011 GreenBiz Conference & Exhibition on European Green Business Solutions held in HCM last year, the Asia Pacific Chair of the World Council for Renewable Energy, Peter Droege, said Vietnam could develop a green economy based on agricultural production, which is its greatest advantage in the world market. To reach this goal, the country needs to improve its rice-growing models and strongly promote the use of environmentally friendly pesticides.

Vietnam should also invest in renewable energy sources to meet greater demands in future and encourage the clean energy industry to play a crucial role in the long run, he said.

MA. Nguyen Song Tung from the Research Institute for Environment and Sustainable Development agrees that in the first place, Vietnam needs to develop green production and services into a uniform system through extensive market research, advertising and marketing to promote the country’s green products around the world.

Dong depreciates against US dollar
 
The US dollar appreciated against the Vietnamese dong and peaked around VND21,000 per dollar yesterday compared to the rate of 20,870 two months ago.

Typically, Techcombank sells dollars at the highest exchange rate of VND21,015 per dollar and buys dollars at VND20,910 per dollar.

Other commercial banks such as Vietcombank, BIDV, Eximbank and ACB offered selling rates ranging from VND20,980 to 21,000 per dollar yesterday, up VND40 against the previous day and up VND120 from the middle of last week.

They offered buying rates ranging from VND20,870 to 20,920 per dollar.

However, the inter-banking exchange rate remains unchanged at VND20,828 since last December up to now.

Representatives of some banks attributed the situation to the fact that the credit institutions were buying dollars to balance the over-sale of dollars in the past and some enterprises wanted to buy dollars to deal with the mature debts.

They claimed that such adjustments were normal in the operations of the banking systems.

According to a source from the website Vneconomy, the buying-selling rates yesterday were VND20,930-20,960 per dollar at the black or unofficial market, up VND70 against one day ago.

In a recently announced report, JPMorgan Chase Bank's Singapore branch said that "before 2008 the central bank adjusted the forex rate 1 per cent lower each year. However, since 2008 on, with economic instabilities, the adjustments on the forex rate took place more frequently. Last year, the forex rate was operated more flexibly with the government's Resolution No 11 to stabilise the macro economy."

"Since the promulgation of Resolution No 11, the dong has been more stable and this year, the local currency has become one of the few regional currencies to appreciate against the US dollar. This positive development takes place in the context of clearly cooling inflation," JP Morgan reported.

According to the JP Morgan report, Viet Nam's inflation cycle did not rise as previous years because the commodity prices plummeted.

Viet Nam's annual inflation as of May 2012 eased to 8.3 per cent, from 18.1 per cent in December 2011. With the easing inflation, the State Bank of Viet Nam (SBV) has cut down to a total of 300 percentage points (3 per cent) for key interest rates, interest rate on open market operations (OMO) and deposit interest rate in the past several months.

With an expectation that inflation would slip to the nadir in the third quarter this year, with a 5 per cent forecast and annual inflation maintaining at 6-8 per cent, JPMorgan predicts the central bank would continue to reduce the interest rates by 200-300 percentage points (2-3 per cent) by the end of the third quarter, this year.

Together with the negative credit growth in the first three months of this year (starting growth again in April 2012), JPMorgan expects the Vietnamese government will encourage commercial banks to lend more in the last half of this year.

Earlier, in the beginning of June 2012, Australia New Zealand Banking Group Limited (ANZ) also forecasted the central bank would cut down the interest rate by another 2 per cent and expected a reduction of 1 per cent for interest rates at the end of June or early July.

ANZ also projects the central bank would lower the refinancing rate from 12 per cent to 11 per cent in June and it would be 10 per cent in September 2012. At the same time, it would maintain this interest rate level till June 2013.

"Viet Nam's balance of payments position has been improved thanks to decreasing trade deficit as well as an increasing inward remittances and foreign direct investment (FDI) capital inflows," JP Morgan reported.

"Conversely, the unstable balance of payments would prompt people to sell assets in dong to buy US dollars and gold when inflation is high," it said.

However, with cooling prices, the opposite is happening. The capital flows are returning to assets in dong from US dollars and gold. JPMorgan said that Viet Nam's foreign currency reserves would continue to increase thanks to maintaining a surplus in balance of payments.

With the aforementioned assessments, JPMorgan forecasts that dong will remain stable against US dollar this year.

Oil and gas exploitation up 5.9 percent in five months

The crude oil and natural gas production index in May showed an increase of 4.2 percent over April and 6.7 percent over last year’s same month.    

The output of crude oil in five months reached 6.8 million tonnes, a year-on year increase of 11.5 percent, and liquefied petroleum gas rose 16.2 percent to 292,900 tonnes compared to the same period last year.

As the Dung Quat oil refinery has stopped its operation for an overhaul, the output of oil and petrol in May dropped by 44.0 percent against last month to 309.9 tonnes.

Vietnam attends 45th Algiers international Fair

The 45th Algiers International Fair (AIF) was held from May 30 to June 5 at the Pins Maritimes Exhibition Centre in Algiers capital.

The six-day event, called "50 years of building”, drew more than 600 foreign firms from 36 countries across the world.

During the fair, Vietnams’ handicrafts such as lacquer painting, inlaid wood, bamboo and rattan products, and souvenirs were much appreciated by foreign customers.

Nguyen Van Mui, Commercial Counselor of the Vietnamese Embassy to Algeria, said that exports to Algeria in the first four months of 2012 reached more than US$64 million, up 65 percent compared to the same period last year. Two main export items were coffee and rice.

HCM City boosts economic ties with Cambodia’s localities

Ho Chi Minh City will organize a series of activities from now until the end of the year to boost economic and trade cooperation as well as cultural and friendship exchange with Cambodian localities.
    
These activities aim to mark the Vietnam-Cambodia Friendship Year and the 45th anniversary of the Vietnam-Cambodia diplomatic ties (June 24).

The city will open the Vietnam Goods Fair in Cambodia’s Battambang province while the city chapter of the Vietnam Union of Friendship Organizations and the Vietnam-Cambodia Association will join the Business Association to host a seminar on trade promotion and cooperation development.

In June, HCM City will send delegations to conduct market surveys and exchange experiences in the Cambodian capital of Phnom Penh and Siem Riep province.

The city will also coordinate with the Ministry of Foreign Affairs to install the stele of former Cambodian King Norodom Sihanouk who once studied at the College Chasse Loup-Laubat (now known as the Le Quy Don senior secondary school).

In addition, the municipal chapter of the Vietnam Union of Friendship Organizations will work with Dong Thap and Tay Ninh provinces to organize tours for Cambodian students to visit and exchange with the two provinces’ students.

Boosting exports via e-commerce

E-commerce is seen as a practical solution to help promote exports and expand business opportunities in the context of the global economic crisis.
    
This idea was shared by many of the domestic and foreign experts attending a seminar on June 5 in Ho Chi Minh City on boosting Vietnamese exports through e-commerce.

In recent years, the Ministry of Industry and Trade has been actively assisting businesses to apply e-commerce in their operations, including exports and imports.

However, Vietnamese businesses still lack general information about markets, legal corridors, partners and import-export procedures.

This is attributable to the businesses themselves because they have not been proactive in searching for information, said Tran Huu Linh, Head of the E-commerce and Information Technology Department under the Ministry of Industry and Trade.

“Businesses should learn more about the importance of e-commerce,” he said, adding that each one needs to work out its own strategy for using the technology.

Mr Linh also stressed the need to develop specialized e-commerce trading floors.

70 percent of workers to be trained by 2020

The Vietnamese Government has set a target to raise the rate of trained workers from 26 percent in 2010 to 55 percent in 2015 and 70 percent by 2020.
    
This information was released at a meeting in Hanoi on June 5 held by the Ministry of Education and Training (MoET) and the Ho Chi Minh Communist Youth Union.

Every year, a million new people need jobs, but growing industries cannot employ all of them because there is a shortage of trained and skilled workers, said Bui Van Ga, MoET Deputy Minister.

Therefore, the MoET will join the Youth Union and other ministries and sectors to help train highly-skilled human resources to meet social and business demands.

According to the plan, 40 percent of workers will have received vocational training by 2015 and 55 percent by 2020.

The Secretary of the Ho Chi Minh Communist Youth Union, Nguyen Thi Ha, said her organization will act as a link to help students learn about future job orientations.

The Youth Union will support outstanding students graduating from vocational schools in finding jobs.

HCM City-Dubai direct air route opened

Emirates Airlines has announced the launch of daily direct flights between Ho Chi Minh City and Dubai as from June 4.

By carrying around 240 tonnes of cargo per week, it will help to boost trade cooperation between the two cities with more than 120 destinations in the world.

HCM City is the 14th link of Emirates SkyCargo in the Far East to major exporters, including China, Japan, the Republic of Korea, and other countries in Europe, Middle East, Africa and Northern America.

VietJetAir launches auto check-in systems

VietJet Aviation Joint Stock Company (VietJetAir) is the first airline in Vietnam to offer auto check-in services to its passengers.   

This updated system enables passengers to go through the necessary check-in procedures in just one minute.

The airline will use the advanced technology at Tan Son Nhat, Noi Bai, and Da Nang international airports, as well as its ticket offices in Ho Chi Minh City and Hanoi. VietJetAir staff will be available to instruct passengers how to use the system.

Passengers can also check-in online through the airline’s website www.vietjetair.com.

Firms urged to exploit free trade deals
 
Businesses should take full advantage of free trade agreement (FTA) preferences to expand their export markets and product portfolios, a meeting held in Ha Noi heard on Monday.

Statistics from the Ministry of Industry and Trade's Import and Export Department showed that total export turnover through taking advantages of preferential tariffs from FTAs reached over US$5.5 billion in the first five months of this year, up 66 per cent over the same period last year. The ratio of exports to markets such as China, India and Laos remarkably increased.

However, due to the reliance on traditional export markets, Vietnamese enterprises faced difficulties when demand in these markets decreased. "In addition, if Myanmar opens its market, we will have tough competition," said Viet Nam Textile and Garment Association General Secretary Dang Phuong Dung.

Deputy General Director of the Viet Nam Textile and Garment Group Hoang Ve Dung added that industry growth in the first five months dropped by almost 50 per cent over the corresponding period last year.

"Although this is often the most favourable time of the year for export, textile companies can hardly find new orders," he said.

Sharing the same challenges, HCM City Handicraft and Wood Industry Association Vice President Tran Quoc Manh stated that trade promotion budget for the timber industry had been drastically cut.

The Trade Promotion Department said this year's budget was cut to only VND15 billion ($710,200). "Although it was lifted to VND40 billion ($1.9 million), it was still too little."

The department has called on the Government for support, and will add funding to key projects such as textile and wood items.

Meanwhile, Director of the Export and Import Department Phan Van Chinh noted that merchandise exports still experienced high growth thanks to the contribution of the processing sector.

Export turnover of this sector fetched $26.13 billion in the first five months of this year, rising 35.6 per cent over the same period last year and accounting for over 60 per cent of total exports.

Company prepares for bond conversion

Viet Nam Mechanisation Electrification & Construction Co (MCG) has announced it will close the list of bondholders participating in the third conversion of bonds into shares by June 10.

One bond will be converted into 10 shares at the par value of VND10,000 which will be done on June 16. Bondholders who opt not to convert their bonds will be paid the principal value and 12-month interests.

Last year, MGC issued 1 million convertible bonds worth a total of VND100 billion (US$4.76 million). This is the third time the bonds have been converted, which are worth 50 per cent of total bonds. MCG closed yesterday down 4.4 per cent to VND6,500 a share.

Construction firm posts loss after audit

Construction firm Song Da 25 (SDJ) was found to come away with losses last year after two audits. From the profit of VND2.7 billion (US$128,500) it recorded in the release of an initial financial statement, the profit dropped to VND851 million ($40,500) after the first audited version. After the additional audit report, the company posted a loss of VND7.4 billion ($352,300).

The main reason for the differences was the change in corporate governance cost from VND9.04 billion ($428,500) to VND19.04 billion ($904,700).

The Ha Noi Stock Exchange has put a warning on the stock since Thursday due to this calculation.

VinGroup to sell more international bonds

Hospitality services provider VinGroup (VIC) will be able to sell additional bonds on the Singapore Stock Exchange worth up to US$115 million instead of $65 million as allowed before.

According to a contract it reached with Credit Suisse Singapore Limited on March 27, the Singapore-based company completed the purchase of bonds totalling $185 million last month. It was entitled to purchase up to additional $65 million.

However, due to the demand of international investors, the State Bank of Viet Nam decided to let Vingroup sell more bonds on the grounds that the sale of bonds would not be conducted later than July 10.-

Shipbuilder delivers oil tanker to PV Trans

Dung Quat Shipbuilding on Monday handed over a 104,000DWT oil ship to Quang Ngai PV Transportation Corporation (PV Trans).

The new ship, named PVT Mercury, is one of the largest obtained by PV Trans with 13,560 horsepower, around 245m in length, 43m in width and nearly 20m in height. The ship's average speed is 15 knots per hour.-

Binh Dinh sets sights on agriculture

A week-long fair in agriculture and industry will be held tomorrow in the central province of Binh Dinh.

Co-organised by the provincial Trade Promotion Centre and HCM City-based Phuong Nam Trade and Service Co, the event will showcase agricultural products, textiles and garments, engineering, fertilisers, electronics and automobiles in 300 booths.

Exports to US increase by 18%

Viet Nam exported US$7.33 billion worth of goods to the US, a year-on-year increase of 18 per cent, the Ministry of Industry and Trade said.

The US remained a key market for Vietnamese products. The country's exports to the market were expected to top $20 billion by the end of the year.

Last year, Viet Nam's exports to the market accounted for 17.4 per cent of the country's total export turnover, reaching $16.7 billion.-

Economic zone lures healthy investment

Hai Phong Economic Zone attracted over US$900 million in foreign direct investment during the first five months of this year, marking a 17-fold increase over the same time last year, the zone authority said.

During the period, foreign-invested firms in the zone had posted $575 million in revenue, up 55 per cent year-on-year. Of the total, $480 million came from exports, surging 51 per cent against last year's corresponding period.

Auto parts producer to expand operations

German auto parts maker Robert Bosch announced yesterday it plans to increase its investment in Viet Nam to US$322 million by 2015 to expand its plant in Long Thanh, southern Dong Nai Province.

The managing director of Robert Bosch Vietnam, Vo Quang Hue, said the expansion of the plant, which makes push belts used for continuously variable transmission in automobiles, is to meet rising global demand.

The $73 million production facility began operation in April last year, and by August the company had put in it a total of $136 million.-

Circular sets new rules on goods pricing

The Ministry of Finance issued Circular No 78/ 2012/TT-BTC on May 18, guiding the implementation of provisions of Decree No 84/2011/ND-CP of September 2011 on pricing of commercial goods and services. Under the circular, organisations and individuals who participate in commercial activities must list prices in compliance with quality standards and quantity of each kind of goods and services. Prices must be listed in domestic currency. The circular also requires organisations and individuals who provide services via mobile device and internet to publish service fees in their advertising. If a user wants to download a product or service via installed software on a mobile device, the service fees must be provided in detail. This circular takes effect on July 5 and replaces Circular No 110/2004/TT-BTC of November 2004.

Ministry draws up amended Labour Code

The Ministry of Labour, Invalids and Social Affairs is circulating a draft of proposed amendments to the Labour Code for comment by Government officials, organisations, enterprises and individuals. Among the proposed changes, Article 178 would stipulate that the maximum term of a work permit for a foreign worker would be 12 months as opposed to the current 36 months. In addition, foreign employees who work in Viet Nam for less than three months would not be required to apply for a work permit. Under Article 12 of the draft, enterprises which hire women or the disabled would be eligible to apply for loans with preferred interest rates, for support from national funds on employment settlement, and for tax reductions.

Tay Ninh to build border bridge with Cambodia

Southern Tay Ninh Province is to build a border bridge over the Vam Co Dong River, linking Viet Nam with the Cambodia border.

The Mon Chay bridge was to be located at Marker 131, connecting Tan Bien district with Cambodian Prey Veng Province, about 120km east of Phnom Penh City.

People's Committee chairwoman Nguyen Thi Thu Thuy told an online meeting of border districts on Tuesday the bridge would boost trade between the countries.

Districts in the online link were Tan Bien, Tan Chau and Chau Thanh.

Tay Ninh Department of Transport calculated a concrete bridge would cost VND20 billion ($850,000) and a connecting road would cost the same amount.

Thuy said a border market was being built in Tan Phu commune, on road 791, about 10km from the bridge, to facilitate trading.

New decree to govern fertiliser production
 
Fertilisers will be classified into ten groups depending on ingredients under a decree being drafted by the Ministry of Agriculture and Rural Development. This aims to tighten administrative oversight over fertiliser production, import and export.

The ministry is gathering comments on the draft, which would replace Government Decree No 191 issued in 2007. Under the draft, each group of fertilisers would be divided into different subgroups with detailed regulations on their ingredients.

"The decree's strict regulations are necessary as a great number of fake and low-quality fertilisers are on the market, causing losses for farmers," said the ministry's deputy chief inspector, Dang Nhat Tan.

Ministry inspections last year showed that over half of the fertilisers on the market were substandard or fake, he said. Most recently, ministry inspectors discovered the Viet Phap Science, Technology and Investment Corporation in Ha Noi's Thanh Tri District producing over 60 tonnes of NPK fertiliser fraudulently under the trademark of the Lam Thao Fertilisers and Chemicals Joint Stock Co.

The draft decree would regulate that enterprises can only produce fertilisers when they have received business registration certificates or investment certificates. The enterprises would be required to make environmental impact assessment reports and ensure workplace safety conditions and hygiene. They would be required to have certified quality management systems, including quality testing and proper manufacturing process for different materials as well as publication that they have met standards.

Fertiliser would be required to go to market accompanied by legal vouchers and clear certificates of origin. The product must be packaged in clear wrapping with regulated trademarks, and imported fertilisers must bear certifications from national inspection agencies.

Leaders of fertiliser manufacturing enterprises were already complaining that the proposed regulations were too tight and would make it difficult for companies to turn a profit and recover their investments.

Truong Quang Ha, deputy director of the Hung Thinh Fertiliser Co Ltd in HCM City's Phu Nhuan District, said it was already regulated that enterprises have business registration certificates and certified quality management systems, but it took about a year to apply for and receive the certificates.

"The State should simplify all procedures for certificates to create good conditions for enterprises to comply with the decree," Ha said.

The ministry is gathering comments on the draft, which would replace Government Decree No 191 issued in 2007.

Thu Thiem exhibition center design okayed

The HCMC government has approved the design of the HCMC Urban Planning Exhibition Center which will be developed at the central square of Thu Thiem New Urban Area.

The five-storey exhibition building will have total floor space of 18,100 square meters. The first floor will exhibit the formation and development of HCMC, architectural monuments, conservation works and planning schemes for each period.

The second floor will be used to showcase planning schemes for socio-economic sectors, transport, natural resources, environment, commerce and services. Meanwhile, the third floor will feature the planning for the HCMC key economic zone, new urban areas, industrial park sub-zones and introduce the projects in need of investment.

The fourth and fifth floors of the center will be dedicated to other facilities such as conference halls, offices, libraries and a 1:1,000 scale model of the current 930-hectare downtown area.

Earlier, the city government assigned the construction management board of the center to hold a contest to select a designer for the exhibition building.

In addition, the government of District 2 and the Investment and Construction Authority of Thu Thiem New Urban Area were requested to hand over the land site for the exhibition center management board no later than June 30 this year so that the building can get off the ground and start service early.

According to the HCMC government, the exhibition center design must satisfy the high requirements on aesthetic and architecture and the standards for a green building.

The building needs to utilize solar power, save energy, adapt to climate change, apply advanced technology in exhibition and interior decoration and install art lighting in order to raise the architectural value of the construction work.

The center is developed to meet the demand for information on urban planning of citizens, investors and concerned agencies.

Agribank offers exporters VND10 trillion loans

Vietnam Bank for Agriculture and Rural Development (Agribank) on Monday announced a credit package worth VND10 trillion for exporters with a lending rate of 12% per year.

The loans will have a six-month term, focusing on clients with demand for Vietnam dong to produce, purchase, process and export agro-products and other items, according to a statement of Agribank.

Customers are required to sell the foreign currency they gain from export to Agribank, at least equivalent to the amount of dong they borrow.

According to a report of Agribank, as of May 25, the outstanding loans for the agriculture and rural sector at the bank had reached nearly VND304 trillion, accounting for 70% of the bank’s total outstanding loans.

The outstanding loans for coffee, seafood, food, pepper, cashew, rubber, tea and livestock farming was over VND107 trillion. In comparison with January, the outstanding loans of livestock and seafood farming recorded the strongest growth, 8.46% and 6.58% respectively, equivalent to VND3.9 trillion and VND1.35 trillion.

Binh Dinh to get cable car system

The central province of Binh Dinh has allowed two local enterprises to do a detailed planning for terminals and related works for a cable car system.

Vingroup will join forces with H.B.C Investment and Service Joint Stock Company to implement the cable car project. This system will be one kilometer long and connect Tan Cape in Quy Nhon City with Phuong Mai Peninsula.

According to a source from H.B.C, the construction of the cable car system would begin late this year if all procedures are completed. However, the investment cost has not been revealed as the project is still being studied.

The provincial government has asked the investors to consult scientists to evaluate environmental impacts, ensure the passage of ships to and from Quy Nhon Port and leave neighboring areas unaffected.

At an international conference on development of the Tan Cape tourist site in 2010, over 200 participants shared views on the project.

Participants at the conference said the planning of the Tan Cape tourist site should not only serve as a destination for local and foreign tourists but also tap tourism potentials on Phuong Mai Peninsula. According to the authority of the Nhon Hoi Economic Zone, Vingroup has got approval to replace Hai Giang Co. to construct the Hai Giang tourist site covering over 656 hectares in Nhon Hai Commune, Quy Nhon City. Having an estimated investment of over VND3 trillion, this project will be developed into an international standard resort like Vingroup’s Vinpearl in Khanh Hoa Province’s Nha Trang City.

Realty index far from reality

Efforts to build the Real Estate Market Index (REMI) on a trial basis for a tool to gauge the property market have not borne fruit after more than one year since the Ministry of Construction issued a circular asking major cities to do so.

Many delegates told a seminar co-organized by Hanoi City’s Department of Construction and CB Richard Ellis (CBRE) Vietnam last Thursday that quite many difficulties hindered such efforts to set up REMI.

It is hard to categorize some property categories. For instance, the circular specifies four categories or classes of apartments, but even competent authorities are confused about classifying such apartments, not to mention tax agencies or realty traders who do not have enough data to classify the apartments by themselves, said a representative of the capital city’s Department of Construction.

Furthermore, monitoring the market is only possible if most transactions are conducted via registered trading floors.

However, only 20% of total transactions were made via trading floors, thus posing challenges for competent agencies to collect the data about the rest of transactions. That is not to mention the questionable accuracy of data provided by traders, said Ngo Huong Giang, chief of CBRE Research & Consulting Department.

Competent agencies take charge of valuating property prices, which makes REMI become subjective. Therefore, it will be another challenge to make the commercial property market become more objective.

Under a circular issued by the Ministry of Construction in 2010, four big cities namely Hanoi, HCMC, Danang and Can Tho must set their own property indices. The indices will be used as an instrument to gauge market information, paving the way for state-run agencies and investors to map out their strategies.

The indices are based on the data of key property types including properties for sale, rent and transfer, apartments, private houses and land lots.

The competent agencies must work in close collaboration with realty valuation firms over the issue. REMI must be recorded at areas with a large number of transactions, not those having individual transactions, said an official of Hanoi’s Department of Construction.

Government to support low-income housing    

The Minister of Construction discussed the the real estate market and proposed certain measures to deal with its outstanding problems.
 
Trinh Dinh Dung, the Minister of Construction, told in an online forum that the real estate market has reached the bottom.

"In Hanoi, the property market has been in a slump since 2011, and since 2009 in HCMC. Though the market shows signs of a slow recovery, there are still many difficulties to overcome this year," Dung said.

Despite the slump, prices are out of the reach of many people. The Government is making plans to support low-income people but it may take 10 to 20 years to see the results.

To hasten progress, the Government will use public budget for to construct apartment complexes and take steps create conditions to encourage investors to build affordable housing.

Another way to support low-income people in city is to build 25 square metre houses, he said. "I will support to put this into National Housing Development Strategy. There are many families in need of decent and affordable housing," Dung said.

However, concern remains about the unsightly appearance of many small complexes. Dung said that this is a result of poor planning. "Each building may have a permit, but in general the law has not been followed. It is the responsibility of the authorities to take into account urban planning when issuing permits," he added.

Lack of social insurance buy in

Firms face a bigger stick to make them face up to their social insurance payment obligations.

About 16,000 labourers got unemployment benefits from the Hanoi Job Promotion Centre by late 2011, nearly quadruple the amount from last year, according to the centre’s Unemployment Insurance Department head Nguyen Thi Kim Loan.

Loan said this amount was just a drop in the bucket since the unemployment insurance policy came into force from early 2009.

Only labourers having paid unemployment insurance fees for at least 12 months and satisfying strict requirements were liable to get benefits through a one-off payment.

Under current regulations, for workers with labour contracts above three months from January 1, 2012 compulsory social insurance payment rate is 24 per cent of their monthly wages of which the labourers pay 7 per cent and their employers the remaining 17 per cent, up 1 per cent each on previous levels.

Centre director Vu Trung Chinh said amid a hostile business climate the people losing jobs spiked from early 2012 as by the end of March 2012 14,544 labourers got unemployment benefits worth VND42.6 billion ($2 million) from Hanoi Social Security.

In fact, from late 2009 due to escalating debts to social insurance fund Hanoi Social Security proposed Hanoi authorities give it the go-ahead to join hands with diverse finance, labour, invalid and social affair sectors to collect these debts in Hanoi areas.

From early 2010, the task force sued 42 firms with collected amount just 5 per cent of due amount, according to Hanoi Social Security deputy director Nguyen Duc Hoa.

“Hanoi Social Security recommends taking employers dodging their social insurance payment obligations to court,” said Hoa.

Only labourers of firms which have fulfilled their social insurance payment obligations or finalised procedures to go bust would get unemployment benefits. So stronger sanction measures would be applied to shield labourers’ legitimate interests, Hoa asserted.

Businesses in construction, transport, garment textile, mining and services surfaced the most on the Hanoi Social Security black-list.

The largest debtors are Bridge 14 Joint Stock Company (under Civil Engineering Construction Corporation 1- Cienco 1) at VND10 billion ($476,000), Construction and Investment JSC 122, Investment Development and Construction JSC 115, Construction Engineering JSC 121, 116 Joint Stock Company (all belonging to Cienco 1), Investment and Construction Engineering JSC 809 (under Cienco 8) owed VND20 billion ($952,000).

Taiwan Excellence enters its third year in Vietnam

Taiwan Excellence 2012 – the campaign aimed at boosting the reputation of Taiwan and its dynamic industries is officially launched yesterday in Hanoi, marking its third year in Vietnam.

Following the success of the last two years, Taiwan Excellence 2012 with the theme entitled “Creating an Excellent Home with an Excellent Lifestyle” introduces 30 ‘reliable’, ‘innovative’ and ‘worthy’ Home Living and ICT brands to Vietnamese consumers.

If last year campaign focused on promoting high-quality consumer technology products, Taiwan Excellence 2012 witnesses the participation of a much more diverse range of participants. 30 brands spread over different fields including technology, communications, automobile and home appliances.

Taiwan Excellence 2012 offers Vietnamese consumers opportunities to experience leading brands through exciting and interactive activities. Apart from the important annual event - the Vietnam Consumer Digital World Expo (VCW) in August, this year campaign will especially feature a series of mall events held at major shopping centers in Hanoi and Ho Chi Minh City. At these events, participating consumers will find a chance to explore and engage with an array of most excellent products from Taiwan as well as to enjoy many on-site games with attractive prizes.

Huang Chih-Peng, representative, Taipei Economic & Cultural Office in Hanoi, Vietnam said: “Taiwan Excellence has been making a tremendous contribution to the development of a more collaborative and intimate relationship between Taiwan and Vietnam. In 2012, the participation of new excellent brands together with the interest and support of Vietnamese consumers give us a strong belief in a more comprehensive and sustainable cooperation between us two.”

“This has marked the third year of Taiwan Excellence in Vietnam with the mission to promote the advancement and innovation of Taiwan's international brands, offering Vietnamese consumers more choices,” said Tso Wei Dar, director of Taiwan Trade Center, TAITRA’s representative office in Ho Chi Minh City. “We are very proud to contribute to bring Taiwan brands closer to consumers in Vietnam as well as let Vietnamese access the world leading products originated in Taiwan”.

Taiwan Excellence 2012 also introduces supermodel Thanh Hang with her second year on the role of Taiwan Excellence Vietnam’s celebrity endorser.

Joining Taiwan Excellence 2012, consumers will be able to experience some top technology products and home appliances such as AverMedia game capture HD which allows recording Xbox 360, PS3, and Wii HD game play in real-time, medical measurement devices by Microlife – a combination of Swiss innovation & precision and Taiwan high technology & engineering, air purifier and humidifier by Yen Sun – the leading electronics cooling provider and many other Taiwan’s worldwide products.

Textile firms in paupers’ clothes

Textile and garment businesses have yet to find the right fit.

For example, Thien Nam Textile Garment director Tran Dang Chuc said the company had exported nothing in the past few weeks since the price of fibre products fell 15-20 per cent.

Thien Nam’s 1,800 workers are performing perfunctory production since major import markets China and Turkey sank in volume and price.

“We need to weigh up interest rates and the material situation as if we export more, the bigger the losses will be,” said Chuc.

Garmex Saigon general director Nguyen An said since garment product retail sales in Europe shed 30 per cent in the past months, its big customers in this market announced a 30 per cent drop in orders from Vietnam.

“The garment sector eyed a 30 per cent decline in export orders, driving small firms into a fix due to their low competitiveness,” An added.

In this context, several firms have found way-out such as Garmex Saigon.

“We have orders until September 2012. In the first four months of 2012, the company reaped VND300 billion ($14.2 million) in export value and VND20 billion ($952,000) in profits, tantamount to 30 per cent of the projection,” said An, adding that its full year targets would be attainable if nothing changed.

To reach these goals, the company has exerted energy into boosting labour productivity. Besides, from 2012’s second quarter Garmex Saigon opened a Hongkong based office to directly purchase materials and opened retail outlets in US market.

In addition, right at this time the company hooks into producing sample items for 2013.

In another case, in the first five months of 2012 Hanoi-based Ho Guom Garment reached the same growth as in a corresponding period in 2011 though export order pricing rates slid 10 per cent, according to company’s chairwoman Ninh Thi Ty.

The textile garment sector aims to achieve $15 billion export value in 2012, hiking 12 per cent on-year. However, its January-May export value was $5.3 billion only, 35 per cent of the year’s projection, of which the export value of fibre products slid 6 per cent on-year falling to $132 million.
 
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