Last update 7/25/2012 7:00:00 AM (GMT+7)
  

BUSINESS IN BRIEF 25/7
Lower inflation fails to lift shares

Although the nation's monthly consumer price index continued to slide, shares still lost ground yesterday.

The General Statistics Office announced yesterday CPI this month decreased 0.29 per cent over last month. However, "the market shifted to a negative trend very fast," said BIDV Securities Co analyst Hoang Anh Tuan. Demand for shares was only at a low level, he added.

"With such movements, holding shares is increasingly risky."

Reaching 415.63 points, the VN-Index on the HCM City Stock Exchange edged down 1.5 per cent.

Around three-quarters of the listed stocks retreated.

Most blue chips tumbled; notably, insurer Bao Viet Holdings (BVH) and HCM City Infrastructure Investment Co (CII) bottomed out. Of the 30 shares tracked by the VN30, only software giant FPT (FPT) added 4.5 per cent. The index lost 0.9 per cent to 491.34 points.

The southern bourse's overall market value fell 16 per cent to VND659.4 billion ($31.4 million), as trading volume reached only 88.3 per cent of Monday's level, standing at 44.8 million shares. On the Ha Noi Stock Exchange, the HNX-Index slid 2.3 per cent compared to the previous day's close, reaching 69.84 points.

Losers largely overwhelmed gainers by 187-54.

Trading slightly declined to a value and volume of VND478.9 billion ($22.8 million) and 51.4 million shares.

The HNX30, tracking Ha Noi's top shares, decreased 3.7 per cent to 132.31 points.

PetroVietnam Construction Co (PVX) saw a surge in trading volume to 9.3 million shares. It closed yesterday at its floor price of VND8,900 per share.

The company reported a huge loss of nearly VND300 billion ($14.2 million) in the second quarter of this year due to soaring financial and corporate management costs. Accumulated for the first six months of this year, PVX lost VND293 billion ($13.9 million) while making a profit of VND87.46 billion ($4.1 million) in the same period last year.

The results of a recent inspection conducted by the oil and gas giant PetroVietnam showed that PVX was facing a financial imbalance, with some of its subsidiaries at risk of bankruptcy.

At that time, PVX had a charter capital of VND2.5 trillion ($119 million) and short-term liability of over VND9.6 trillion ($457 million).

The imbalance was caused by the use of short-term funds to finance long-term investment. In addition, macro-economic problems resulted in inefficient investments in its subsidiaries and affiliates, especially in real estate firms, while it was hard for PetroVietnam's construction arm to sell stakes in these units.

"The business environment in the second quarter really disappointed investors," noted BIDV Securities Co analysts.

Chemicals company fined for securities fraud

Duc Giang – Lao Cai Chemicals Co was fined VND230 million (US$10,900) for fraud in sales of securities. The State Securities Commission fined the company VND200 million for carrying out a public offering of securities without registering with the commission. The remaining VND30 million in fines was for filing a registration to be a public company 12 months late.

Bao Viet Securities Co sees jump in profits

Bao Viet Securities Co (BVS) reported a profit of over VND55 billion (US$2.6 million) in the second quarter of this year thanks to rocketing incomes from their brokerage operations.

The profits are bright news for the securities firm that posted a loss of about VND26 billion ($1.2 million) for the same period last year.

Total revenue for BVS in the quarter reached VND70.67 billion ($3.3 million), up 47 per cent from the same period last year. Total revenue for the first six months hit VND116 billion ($5.5 million), up 24 per cent, of which revenue from brokerage operations soared 94 per cent to VND31.85 billion ($1.5 million). The firm's cash and cash equivalents as of June 30 stood at over VND630 billion ($30 million). Short-term investment was at VND339 billion, of which securities saw a depreciation in reserves of VND169 billion.

BVS is one of the shares tracked by the HNX30 on the Ha Noi Stock Exchange and it was at the risk of being excluded from the index if it continued to make losses, as in 2010 and 2011.

New rule limits trading by idle brokerages

The State Securities Commission on Tuesday announced a new regulation for securities companies that continued trading but no longer operated brokerage services, limiting them to only one trading account at other brokers.

The commission said: "Securities companies that engage in trading by themselves are allowed to open only one account and shall not open any self-trading accounts at other companies. In case securities firms withdraw their brokerage services, they are permitted to open one account at another securities company to conduct transactions for themselves.

Construction firm to list shares on Tuesday

The Ha Noi-based Foundation Engineering and Underground Construction Joint Stock Co, or Fecon, will list on the HCM City Stock Exchange next Tuesday. The initial price for its first trading session has been fixed at VND24,000.

The company has a charter capital of over VND138 billion (US$6.6 million), up from VND5 billion when it was set up in 2004.

FECON has nine institutional shareholders who hold over 23 per cent of the total stakes, two of them foreign, owning more than 12 per cent. In all it has issued more than 138 million shares.

At this year's shareholder meeting it was agreed to increase its charter capital further to VND189 billion. This will be done by paying a 20 per cent dividend in the form of more than 2.761 million bonus shares and issuing 2.334 million shares to strategic partners and existing shareholders at not less than VND20,000. FECON targets a net profit of VND94 billion this year.-

Researcher seeks responses

Market researcher Cimigo yesterday launched a campaign called "Shout it out and shout it out loud," inviting consumers to give their opinions about goods and services, experiences, and lifestyles at www.chaocimigo.vn.

"Vietnamese are often cautious or reserved when expressing their opinions so we are here asking them to shout it out and loud," the company's managing director, Joe Wheller, said.

Tall apartment building opens

Vinacapital has opened a 34-storey apartment building on the Han River.

The Azura project includes 225 one to three bedroom apartments with modern, high quality fittings and furniture, ranging from 69sq.m to 192sq.m. Prices start at VND1.8 billion (US$86,000).

The real estate developer in co-operation with the Bank for Investment and Development of Viet Nam is offering 9 per cent interest deposit loans for customers.-

Lien Anh Co to re-open centre

A textiles, accessories and footwear centre will be re-opened today in Di An Town, southern Binh Duong Province by Lien Anh Co Ltd.

The centre covers an area of 16ha with a total investment capital of over VND100 billion (US$4.7 million), and originally opened in 2009. It was closed down due to a lack of customers.

Khanh Hoa attracts FDI

In the first six months of this year, the central coastal province of Khanh Hoa licensed four FDI projects with a total registered investment capital of US$185.6 million, reported the Khanh Hoa Department of Planning and Investment.

The most prominent was a shipbuilding project in Cam Ranh City worth $180 million, invested by Oshima-Japan. With $20 million from other projects, the province attracted more than $205 million in the first half of this year, a significant increase compared to previous years.

Bac Ninh extends land-use

The People's Committee of northern Bac Ninh Province has approved a proposal to extend the land use rights for foreign investors at the Viet Nam Singapore Industrial Park (VSIP) from 50 years to 70 years.

The park is home to several housing developments along with a hospital and entertainment area.

New port for the South

Prime Minister Nguyen Tan Dung has agreed in principle for the construction of a new port in Sao Mai – Ben Dinh to be invested by the Viet Nam National Oil and Gas Group (PVN).

PM Dung also noted that PVN needed to figure out legal issues with project investor Vung Tau International Container Port JSC before conducting research and setting up plans for the project.

Leather and shoes expo opens

The 14th International Shoes and Leather Exhibition opened yesterday at the Saigon Exhibition and Convention Center in District 7.

The event has attracted 150 producers and suppliers from 16 countries and territories, including Viet Nam, China, Singapore, Italy, India and the US.

On display are a wide range of shoes and leather products, as well as machinery and equipment used in the leather and shoes industry.

The event, which will close on July 21, is expected to attract 6,000 visitors.

Forum aims to facilitate trade

Vietnamese and South Korean traders met in the capital city yesterday to improve co-operation between exporters and importers.

The event was organised by the Viet Nam Trade Promotion Agency's (Viet-trade), the Vietnamese Embassy in S.Korea and the Korean Importers Association.

It coincided with the 20th anniversary of diplomatic relations between the two nations.

About 200 enterprises, including 80 from South Korea, attended the meeting, which was chaired by the Vietnamese Deputy Minister of Industry and Trade, Tran Quoc Khanh, and South Korea's Vice Minister of Economy and Knowledge, Jick He Sang Yoon.

Vietnamese business leaders were able to learn about S.Korea's markets and how to recognise good business partners.

Deputy Minister Khanh said Korean enterprises were invited to invest more in manufacturing, industry and services in Viet Nam.

Khanh said priority would be given to seafood production, agricultural products, processed foods and vegetables – and hand-made traditional products, textiles, footwear and furniture.

Priority would also be given to industries producing mechanical devices, construction materials, minerals, coal, crude oil, oil-processed products, electronics, informatics products, toys and establishing schools.

Half-year a hard time for Vietnam exports

Local exporters experienced a hard time over the first half of this year with tightened credit, exorbitant lending interest rates, and lower export orders combining to make life difficult.

Total export turnover in the first six months of the year stood at US$53.33 billion, a 22.7 percent increase year on year, according to figures from the Ministry of Industry and Trade.

However, Vietnamese exporters did not enjoy much of this growth, as their exports only rose by 4.1 percent to $20.5 billion, while foreign-invested businesses achieved a 38 percent increase.

The largest obstacle of local exporters is their markets, Deputy Minister of Industry and Trade Nguyen Thanh Bien said at a meeting held Tuesday in Ho Chi Minh City.

The buying power of international importers has fallen sharply, creating an order shortage for local businesses, especially in terms of long-term export contracts, said Bien.

Besides the issues that are in the hands of the exporting markets, all exporters attending the above meeting pointed their finger to what they said is the main culprit -- the credit management policy.

As for the latest policy, in which lending interest rates for existing loans were ordered by the State Bank of Vietnam to be dropped to 15 percent, exporters said the long wait is yet to end.

Even when rates are actually cut to 15 percent, it still is not enough for revitalizing businesses, said Le Phuoc Vu, deputy chairman of the Vietnam Steel Association.

Taking the complaint of exporters over the inaccessibility to cheap bank loans, a representative of the Vietnam Development Bank said it is because banks need to ensure the safety of every single cent they lend out.

“But many borrowers do not have an adequate investment plan, which will not ensure the effectiveness of their money use,” the banker said.

Cap Quang Duong, deputy chairman of the Credit Agency under the central bank, said that 20 credit institutions have implemented the rate cut plan.

Duong believed that businesses will soon stop complaining about not being able to access the cheap loans as these institutions account for 90 percent of the credit market.

HCM City to host ASEAN petroleum conference

The 10th ASEAN Council on Petroleum (ASCOPE) Conference & Exhibition will be held for the first time in Ho Chi Minh City from November 28-30, 2013.

The event, themed “Fuelling the Future of ASEAN towards Sustainable Development”, is expected to attract 500 delegates and more than 300 stalls

Do Van Hau, General Director of the National Oil and Gas Group (PetroVietnam), said in a press conference in Hanoi on July 18 that ASCOPE is a good opportunity for oil and gas companies in the ASEAN region to advertise their products and investigate prospects for new partnerships.

As well as the 10 member countries of ASCOPE, the conference will see the participation of many other international oil and gas companies, particularly those from the Middle East, he noted.

During ASCOPE 2012, the latest information on the opportunities, challenges and solutions in the oil and gas industry in the ASEAN region will be outlined. Along with participation by leading international experts, the event will bring the latest technology information for engineers working in Southeast Asia.   

ASCOPE is organized every four years and the 9th event took place in Thailand.

The council, which includes national oil companies from around the ASEAN region, was established in 1975. Its main objective is to support member countries to increase their capabilities through mutual assistance in the petroleum industry.

Vinacomin hikes electrical production

Total electricity production of 3.3 billion kWh in the first six months of the year shows Vinacomin is well-prepared for the looming competitive electricity generation market, the group said in a statement.

Vinacomin , the Viet Nam National Coal and Mineral Industries Group, would strive to achieve its annual target of electricity generation while it would also establish new thermo-electricity plants, the statement said.

During the first six months, the Na Duong thermo-electricity plant, which is owned by the group, yielded around 406 million kWh of electricity which was 56.4 per cent of the year's target for the plant. The electricity produced by Vinacomin's Cao Ngan plant was 420 million kWh of electricity, accounting for 56 per cent of the year's target.

Vinacomin said its Son Dong plant produced 737 million kWh of electricity, nearly 56 per cent of the annual target while the group's Cam Pha plant generated over 1.7 million kWh of electricity or 43 per cent of the year's plan.

Meanwhile, the US$577 million Mao Khe-Vinacomin plant began supplying the national grid after 36 months of construction. The plant, situated in the northern coal-mining province of Quang Ninh, has a combined capacity of 440MW. Also, the Hai Phong plant was ready for investment bids.

Quynh Lap 1 power plan was submitted in March for Ministry of Natural Resources and Environment approval. Vinacomin expected to earn around VND5.4 trillion ($257 million) a year from electricity generation which would help cover its predicted loss of up to VND8.5 trillion ($405 million) this year. The loss will occur because the State-owned group mines and sells coal to other Vietnamese thermo-electricity plant owners at a subsidised price which is lower than the world market.

People turn back on modern markets  

Hanoi has spent up to hundreds of billions of VND on upgrading traditional markets or building new facilities, but they are always deserted, failing to attract customers who prefer temporary markets.

A number of traditional markets that used to be popular with the public have been upgraded, including O Cho Dua in Dong Da District, Cua Nam and Hang Da in Hoan Kiem District, and Buoi and Thuong Dinh in Thanh Xuan, but this seems to have had a detrimental effect.

O Cho Dua Market was turned into the OCD Plaza which includes seven floors and a basement for parking. Many people even thought that it had been turned into a karaoke club due to a sign on the front of the building. The first and second floors of the building are for rent, but 80% of the stalls have been closed and the rest is empty. The stalls that have remained open also struggle to attract customers.

A roast meat shop owner nearby said most traders had abandoned their businesses and those that remained struggled to attract buyers.

Cua Nam Market is also in the same situation. The market is in fact a small supermarket with two stalls. All steps from packing, price listing and payment are carried out at the cashier counter. Cashiers often have nothing to do and just chat while they wait for the end of the day.

Shops at Hang Da Market mainly sell luxury products which do not draw people’s attention. Cashier counters are sometimes left empty without any staff.

Thuong Dinh Market is in an even worse situation. Two of the three floors are vacant, and there are only 10 stalls on the first floor.

The design of the majority of modern markets is unsuitable and awkward, making it difficult for customers to move around.

Nguyen Thi Quynh, 70, from Nguyen Thai Hoc Street, said, "This cannot be called a market because most people come here just to visit. It is inconvenient because we have to park in the basement and then walk up to the stalls just to buy food.”

Phan Van Chien from Nguyen Khuyen Street said that almost no one wants to come to the market any more. The commodities are too expensive for labourers. People around here usually go to Ngoc Si Lien Market or nearby temporary markets.

Around Hang Da Market, many temporary markets have popped up to meet people’s demand.

Mr. Tinh who sells bread in front of Hang Da Market said although the market is modern, people favour small and temporary markets which are very convenient for them. No one wants to spend VND3,000 for parking services just to buy food.

Land promotions for buying lands in Ba Vi District  

The property fever in Hanoi’s Ba Vi District seems to have subsided, leaving many speculators in difficulties and forced to sell off their investments at a loss.

A square metre of local land is going for VND1-3 million, depending on the location, equal to half the previous level.

Yen Bai is one commune where land is being sold on the cheap. Many land owners are enticing buyers with promotional packages, so we (the reporters) decided to check it out.

Just a few minutes after a phone call, a local land owner named Linh appeared and took us to see his property. We thought that the land would be near his house, but in fact, we had to travel several kilometres and wade across a stream before we arrived. It was an overrun plot of land 1,000 square metres, covered with bamboos.

Linh fixed the price at VND1.2 million (USD57.14) per square metre, explaining that the price is much lowered compared to VND3-3.5 million (USD142.8-166.6) per square metre at the peak of the speculation wave after we said the location was inaccessible. He added that if we bought the entire plot, we would be offered an extra 100 square metres of land located by the nearby stream for free.

When asked about the land papers, he said that it was forestry land which his farmers gave him with handwritten papers. If we bought it, the papers would be transferred to us, noting that he needed the money because he wanted to sell the plot quickly. Land prices in Tan Linh and Van Hoa communes have dropped to VND1-1.5 million (USD47.6-71.4) per square metre without papers and VND2.3 million for land with papers, compared to up to VND6 million (USD285.7) and 10 million (USD476) at the peak of the market. To attract buyers, many land owners have launched promotions. Buyers are given from dozens to hundreds of square metres for free if they agree to buy land.

A local man named Tung who bought nearly 1,000 square metres of land at the peak of the market said that 360 square metres of farm land used to be worth VND1 billion (USD47,619) but now it has fallen to VND300 million (USD14,285). Trung added that the area has potential and was likely to pick up again when eco-property projects are implemented.

There’s not much activity occurring in local real estate offices. Some locals in Tan Linh said many real estate agents have turned to other professions because of the frozen real estate market.

Mr. Chinh from Bon Village in Van Hoa Commune has bought a large plot of land and now he has to pay a very high interest rate per month, so he was very happy to see us. “I have not welcomed any customers for a long time,” he said. He showed us a hilly area covering tens of hectares. He offered us a price of VND1.5 million per square metre, adding that the land had handwritten papers. We mentioned promotions, he said, he would give us dozens of square metres for free, depending on the area we buy.

The land fever in Ba Vi District has passed, pushing many speculators into a sticky situation. Many of them are ready to suffer losses to ease the burden of high interest rates. They offer land promotions to lure customers, but they have failed to stimulate the market.

Chinese goods sold under Vietnamese brands

A large number of garments from China have been brought into Vietnam and had their brands and labels replaced by those of the latter country, Duong Thi Ngoc Dung, CEO of the Vinatex supermarket chain, told a conference Wednesday.

“It hurts seeing these Chinese products sold at Vietnamese supermarkets and other distributing channels,” said Dung at the meeting to evaluate the effectiveness of the drive to encourage local consumers to buy Vietnamese-made goods over the last six months.

The CEO also warned that this is no longer an isolated case.

“If this trend continues a large number of local laborers in the textile and garment sector will lose their jobs,” she said.

Sharing Dung’s concern, Nguyen Thi Nhu Mai, deputy head of the Hanoi Department of Industry and Trade, urged that the inspection and prevention on smuggled goods, especially those from China, should be fortified.

“Otherwise, the encouragement of using Vietnamese products will become less significant,” she said.

In related news, Dong Thinh Co, which imports and sells Chinese goods, was penalized Wednesday by the authorities of the Central Highlands province of Dak Nong for failing to provide receipts for customers.

The company was fined VND12.5 million for the violation, said Nguyen Cao Bang, an official from the province’s Gia Nghia Town tax agency.

Earlier the company had leased the Tay Nguyen restaurant to sell certain cooking utensils for locals at high prices, while the products were of poor quality.

Hundreds of locals Tuesday flocked to the venue and asked to return the pressure cookers, knives, and saucepans they had bought to the company.

The cookers were sold at VND1.6 million each, while tax officials found that their real value is only VND400,000.

Fishermen still ride on luck, take risks for catches

The number of fishing boats in Vietnam has more than tripled over the last 20 years, but local fishermen are still sailing on small, poorly- powered and equipped vessels, and have to depend mostly on their experience and a bit of luck while taking high risks for their catches on the seas.

“To win and protect the sea, we simply cannot continue to see fishermen sailing offshore and relying only on their experience and bravery,” Nguyen Viet Thang, chairman of the Vietnam Fishery Association, told Tuoi Tre.

But while waiting for the innovation and modernization for the fishing industry, Vietnamese fishermen still have to face fierce competition, and even danger, from the steel fleets of other countries, which are modernly-invested with high capacity, while all they have are only wooden boats.

On the afternoon of July 18, a dozen fishing vessels docked at Tho Quang, the largest fishing port in the central region, where fishing boats gather after months spent hunting fish.

But most of the time they come back with worries, says to Nguyen Hoang, a fisherman from Quang Ngai.

“Our boats are too small, too old, and are thus usually encroached upon by Chinese vessels,” says Hoang.

“Whenever they find an abundant fishery, the Chinese always act as if the waters are their own, and drive all of the Vietnamese boats away.”

Hoang says his wooden boat only has a capacity of 180CV, and is capable of loading a mere 100 tons, while the modern Chinese vessels have a capacity of 1,000CV and are equipped with the latest machinery.

Similarly Le Thanh Bi, from Da Nang, says many Vietnamese fishermen want to hunt for the catch in the Hoang Sa waters thanks to the abundant supply, but the fishery is now full of Chinese boats which are willing to chase away any competing vessels.

“Though we do not accept that action, we still have to avoid collisions with them, as small boats like ours will definitely suffer the disadvantage in case of an attack,” says Bi.

There are some 5,700 fishing boats in Quang Ngai, but only 1,700 of them are equipped with the 90-CV engines which will help them sail offshore, according to the province’s Department of Agriculture and Rural Development.

Nguyen Van Hung, a 20-year seasoned fisherman in Vung Tau, says the fishing method of local fishermen has barely changed over the last ten years.

“Most of them still depend mostly on experience, tide, and wind direction for their catch,” elaborates Hung.

Meanwhile Tra Van Be, another fisherman from Vung Tau, adds that there is one thing new -- the equipment that helps those sailing offshore communicate with their relatives on the mainland.

“Everything else remains unchanged though,” he says.

Be says going fishing now is just like playing cards.

“You put a huge amount of money in, and don’t know whether you can win or not.

“It’s all a matter of luck,” he concludes.

The fisherman says his peers are in trouble due to the slumping seafood prices, while the government has provided almost no aid policies.

“My pair of boats is worth VND5 billion, but the bank evaluates that they are only enough for a VND200 million loan,” he says.

“That amount is enough to do nothing, let alone changing from wooden to iron boats.”

Vietnamese product campaign needs a boost

The Ministry of Industry and Trade (MoIT) will tighten market controls and organise more Vietnamese Goods Weeks to stimulate consumer demand and boost production.

MoIT Deputy Minister Ho Thi Kim Thoa delivered the message at a conference in Hanoi on July 18 to review the on-going campaign “Vietnamese use Vietnamese goods”.

The MoIT reported that business inventories rose 26 percent on average in the first half of this year, scaling down industrial production. A boost to the campaign is one of the effective solutions the MoIT hopes to put in place to support businesses in difficulty.

However, there are major barriers that have limited the awareness of the campaign, especially amongst rural and remote communities.  

Pham Nhu Mai, Deputy Director of the Hanoi Municipal Department of Industry and Trade, cited several weaknesses of the implementation of the campaign, including limited supplies of quality goods, loose links between farmers and processors, and difficulty in attracting different investment sources for trade.

She pointed to the fact that imported products outweigh locally-made goods, making up two thirds of the domestic market.

Businesses are interested in profits, and if locally-made products are unmarketable, they will shift to imports, Mai confided.

The crux of the matter is to raise business awareness of the importance of the campaign, said Mai.

Duong Thi Ngoc Dung, Deputy General Director of the Vietnam National Textile and Garment Group (Vinatext), presented the results of a Vinatext-conducted survey, saying up to 96 percent of Vietnamese polled like Vietnamese goods.

It will be a setback if we do not succeed in raising national consciousness of the campaign, said Dung.

He suggested completing a set of Vietnamese standard and conformance criteria on all consumer goods and strictly dealing with businesses that produce substandard products.

Dinh Thi My Loan, General Director of the Vietnam Retailers Association, said it is necessary to slash the value added tax on businesses, citing the fact that the current policy of tax deferment does not support those in difficulty.

According to Loan, advertising expenses also need to be raised from the current 10 percent to 20 percent of total business costs, making it easier for consumers to access up-to-date information about locally-made products.

To boost the campaign, Loan said retailers need to prioritise Vietnamese products in their distribution network, establish wholesale trading floors for Vietnamese products, offer free retail services online, and diversify promotions.

Vu Kim Hanh, President of the High-Quality Vietnamese Product Business Association, suggested selling Vietnamese products in traditional markets alongside bringing them to rural areas.

“We will introduce policies to encourage more domestic businesses to display their products in traditional markets following the success of pilot programs in Ho Chi Minh City and Hanoi,” said Hanh.  

Industrial parks introduced in Tokyo

Some 160 Japanese individuals and organizations attended a seminar held in Tokyo on July 19 by the ASEAN-Japan Centre in coordination with representatives from 12 major industrial parks (IPs) in Vietnam.

The seminar provided a good chance for IPs, including Thang Long 1, 2, Amata Express City Urban Resident, Long Duc, and My Phuoc, to introduce their development potential, advantages, investment environment and opportunity.

All IPs are located close to airports, deep-water ports and highways and can meet the demand of Japanese investors for infrastructure facilities, restaurants and shops and other services.

Currently, many Japanese businesses plan to invest overseas, particularly in Vietnam which they consider as one of potential places for investment, thanks to political stability, abundant human resources and cheap labour cost.

Dong Nai invests US$1.1 billion in Champassak

The southern province of Dong Nai has so far injected over US$1.1 billion into Champassak province in Laos, according to the provincial Department of Planning and Investment.

This amount accounts for 33 percent of total Vietnamese investment in the neighbouring country.

Investment is mainly focused on rubber and coffee plantation and real estate, including resorts and hotels.

The projects have contributed greatly to Champassak’s socio-economic development, generating jobs for many local people and increasing the provincial budget, said Saithong Sayavong, the Director of the Champassak Department of Planning and Investment.

Worthy of note is Long Thanh Golf JSC which operates two projects with total committed investment of US$1.1 billion and Tin Nghia Company with two projects worth over US$40 million.

Vietnam welcomes foreign investors

Vietnam always welcomes foreign businesses to invest in the country, in all sectors, while creating very favourable conditions for them.

National Assembly Chairman Nguyen Sinh Hung said this at a reception for the visiting Chairman of the Republic of Korea (RoK)’s Kumho Asiana Group, Park Sam Koo, on July 19 in Hanoi.

Mr Hung spoke highly of the results produced by Kumho Asiana-funded projects in Vietnam, emphasizing that the expansion of such projects vividly reflects the practical effectiveness and increasing strength of the Vietnam-RoK strategic partnership.

He also said he hopes the group will continue its effective investment projects in Vietnam.

For his part, Park Sam Koo said Vietnam is a promising market and committed to further investment in the country.

He said he hopes Vietnam will perfect its policies to provide an attractive business environment for investors.

In future, Kumho Asiana will strengthen cooperation and expand its business in Vietnam, he said, adding that the group will improve the operational efficiency of its cultural foundation to promote cultural exchanges and mutual understanding, as well as cooperation between the two countries.

CIO ASEAN Summit 2012 takes place in Hanoi

The leadership role of chief information officers (CIO) in Southeast Asia was highlighted at the CIO ASEAN Summit 2012 in Hanoi on July 18.

The event, themed “Build vs. Buy and Scalability vs. Capability”, was co-organized by International Data Group (IDG), the Ministry of Information and Communications, the Ministry of Home Affairs and the Vietnam Chamber of Commerce and Industry (VCCI).

Participants, including leading information technology (IT) experts, policy-makers and senior government officials, shared their practical experience in the successful implementation of IT projects. They emphasized the effective use of technological advances to improve the quality of products and services, especially in the banking and finance sectors.

CIO Summit 2012 is considered an important forum for organizations and enterprises get the right perspective to compare notes on the role and responsibility of CIOs and get a new perspective on their performance in the age of information technology.

In the morning session, five important presentations by leading experts and outstanding entrepreneurs from Southeast Asia dwelled on the latest trend of IT development in the region and the world.

An awards ceremony will take place in the afternoon to honour the most outstanding CIOs in Southeast Asia.

Trade relations promoted between Vietnam and RoK

With more than 3,000 projects worth over US$24 billion invested in Vietnam so far, the Republic of Korea (RoK) is the fourth largest partner of the Southeast Asian economy, after China, the US and Japan.

The information was released at a seminar in Hanoi on July 19 with the participation of more than 200 businesses from Vietnam and the RoK.

Deputy Minister of Industry and Trade Tran Quoc Khanh said the two countries have great potential for strengthening trade relations. If the Bilateral Free Trade Agreement, which is now under negotiations, is reached, it will further promote political, economic, and cultural relations and tighten strategic partnerships between the two countries, said Khanh.

In recent years, many Vietnamese products, such as seafood, garments, timber products, rubber and coffee have been favored by the Korean people.

Two-way trade turnover increased by 37 times from 1992 to US$18 billion in 2011. The RoK is currently Vietnam’s fourth largest exporter and second largest importer.

During a Seoul visit by Prime Minister Nguyen Tan Dung in March 2012, both countries agreed to raise bilateral trade value to US$20 billion by 2015.

For his part, Rok Deputy Minister of Knowledge Economy Yoon Sang-Jick noted that since the establishment of diplomatic ties the two countries have expanded cooperation in many fields, including politics, socio-economy and culture. He expressed his hope that trade exchange will develop strongly in the future.

The seminar, co-organised by Vietnam Trade Promotion Agency (VIETTRADE), the Trade Office of the Korean Embassy in Vietnam and the Korean Importers Association (KOIMA), marks the 20th anniversary of bilateral diplomatic ties and the Vietnam-RoK Friendship Year.

150 footwear businesses attend int’l exhibition in HCM City

The 14th annual Shoes and Leather Vietnam Exhibition opened at the Saigon Exhibition and Convention Centre on July 19.

It attracted 150 footwear producers and suppliers from numerous countries, including China, Thailand, Italy, Germany, Spain, India, the Republic of Korea, Indonesia, Japan, and the host Vietnam to showcase machinery, footwear materials, chemicals, leather fashion, and accessories.

Ho Thi Kim Thoa, Deputy Minister of Industry and Trade, said that Vietnam’s footwear sector is integrating strongly into the international market and its position is improving. Vietnam is a significant supplier of footwear, so the annual exhibition attracts other world-leading producers and suppliers.

The organising board said the event, which runs until July 21, is expected to lure more than 6,000 domestic and foreign visitors.

India cooperates with Vietnam in off-shore oil exploitation

India's oil company ONGC Videsh Ltd (OVL) will continue its oil exploration and exploitation at Block 128, which is under Vietnam’s sovereignty in the East Sea.

An OVL senior official has told Hindistan Times that his company accepted an offer from Vietnam's national oil company, PetroVietnam, to stay on for another two years.

OVL's decision is a volte-face by the company, which had indicated several months ago that it intended to exit Block 128 because of its rocky seabed and difficult exploration conditions.

A Government official said the decision could affect relations between New Delhi and Beijing.

OVL’s decision means that India has indirectly involved in the East Sea dispute and rejected China's sovereign claims.

Public-Private-Partnership formula fails to lure investors

The Public-Private-Partnership formula has failed to attract investors for infrastructure projects because of a lack of a properly organized working framework, said delegates at a forum hosted in Ho Chi Minh City recently.

Delegates proposed that the State should issue a clear legal operating framework to lure investors from the private sector for infrastructure development projects.

Dr. Tran Du Lich, deputy head of the HCMC National Assembly, said that a law was necessary to implement the Party’s policy.

Lawyer Nguyen Quang Hung said that the Public-Private-Partnership formula and matters related to public investment should be amended in the Investment Law.

Besides, Public-Private-Partnership projects should not only concentrate on infrastructure but also public services as well, to improve quality and effectiveness of related services, he said.

Electronics market in somber business

Manufacturers and importers as well as distributors of electronic and home appliances are tearing their hair out over the current disastrous business performance.

Sales are falling across the board despite a desperate bid from both distributors and manufacturers to launch numerous promotions and discount programs to woo customers.

A logistics division director of an electronics importer from Japan complained to the Daily that electronics producers have had to join hands with retailers to launch promotions constantly in an effort to attract buyers.

Despite this, they have seen no improvements as expected as the sales volume is not enough for them to cover input costs.

“We all acknowledge the impossibility of luring clients right now but we have no other choice but to continue launching promotions and that is frustrating,” he stressed.

According to the director, due to limited resources of marketing expenses in the backdrop of financial constraints, electronics producers are shifting to cooperation with qualified distributors instead of accepting any partners like before.

As for electronics shopping centers, most refused to disclose information on the current purchasing power but they all shared the view that the market is in difficulties. This is the reason why traders are making full use of all holidays, not just National Day on April 30 and International Labor Day on May 1, to initiate promotions constantly with attractive prices applicable for several days.

Tran Thach Quang, in charge of marketing of Vietnam Fan Joint Stock Company (Asia Vina), said the electronics market and centers now have to accept break-even-point sales and many of them are even cutting the prices of low-value products to below input costs to stimulate consumption. All this has adversely affected the business activities of outlets of Quang’s company.

A staff member responsible for sales at a domestic electronics producer told the Daily that the market is experiencing its toughest ever period now which many people think has been was over.

For instance, the staff members at one electronics center said that from last year to earlier this year they still ordered products from producers steadily regardless of the stagnant consumption then. But the firm now has seen no demands for its new products while its sales volume has tumbled by over 20%.

Similarly, the logistics director of the aforesaid company also complained that the business situation of his enterprises is extremely dreary, with no signs of recovery for the foreseeable future. The point is that there are no wholesale customers who are project owners given public investment cuts, while end-users are only present as window shoppers, he asserted.

“When visiting a large electronics shopping center in District 1 last weekend, I noticed that customers were just there to have a look at products instead of buying them. The reason is people consider going to shopping centers as a way to relax, not to shop for goods like before,” he explained.

He believed that the market is increasingly tough because consumers are sticking to cutting expenses, adding that this is inevitable as local residents are most vulnerable to the negative outcomes of the ongoing economic slowdown.

The fact that consumers are keeping a tight grip of their money has pushed electronics manufacturers and shopping centers into a tailspin. Consequently, producers have decided to halt new product imports while distribution centers are holding inventories, especially high-value products like televisions or air conditioners.

“We are forced to postpone the plan to introduce new products in September since we understand that no products will be sold,” the logistics director said, adding that electronics centers, meanwhile, are keeping inventories given their commitments with producers.

Under the current climate, producers and distributors still pinned hopes on the recovery of the market towards the year-end although they understand that expectation is groundless.

Exporters fret over markets in 2nd half amid global gloom

Exporters joining an online conference organized by the Ministry of Industry and Trade on Tuesday worried that their performance in this year’s second half would remain difficult given the dismal global economic outlook.

Traders said they had never encountered huge challenges like in this year’s first half, but added the second half might pose greater difficulties.

Le Phuoc Vu, chairman of Hoa Sen Group and vice chairman of the Vietnam Steel Association, remarked Brazil, India and China were seeing their growth rates falling, while Japan, European and the U.S. showed no optimistic signs.

Therefore, he predicted Vietnam’s steel export would likely decline and the situation would get tougher.

Deputy Minister of Industry and Trade Nguyen Thanh Bien said the biggest difficulty in the first six months was outlets. In particular, the purchasing power of several markets considerably weakened, resulting in fewer long-term orders for many exporters.

“Previously, enterprises received orders six months, or even one year in advance, but now few enterprises have long-term orders, mostly 2-3 months or even one month,” said Bien.

Mai Thi Anh Tuyet, deputy director of the An Giang Department of Industry and Trade, said the province exported only 214,000 tons of rice, equal to 79% of the year-ago figure, meeting 40% of the target. Therefore, An Giang’s authority is now very worried, as export makes great contribution to the provincial GDP.

To reduce the dependence on rice and tra fish, whose prices have dropped sharply, An Giang Province is gradually switching to other crops.

Particularly, the cooperation program between An Giang and Saigon Trading Group (Satra) to grow the vegetable okra for export was launched in May 2012.

Pilot cultivation is carried out on 16 hectares, which will be expanded to 50 hectares by the year’s end and 100 hectares in 2013. Satra directly exports this item to Japan.

An Giang also joins hands with another enterprise to make a plan for exporting mushrooms to Hong Kong. Tuyet said the enterprise would look into the market demand to order farmers to produce.

In addition to product and market diversification, businesses are seeking ways to boost labor capacity and access credit capital with reasonable lending rates.

Do Ha Nam, chairman of the Vietnam Pepper Association, suggested the Government should encourage enterprises to establish companies abroad and borrow from foreign lenders to diversify capital sources.

* Dien Quang Hiep, director of Mifaco Company, member of the executive board of the Handicraft and Wood Industry Association of HCMC (Hawa), said on the sidelines of the conference that Hawa had petitioned the HCMC Department of Customs to help the furniture export shipments denied for custom clearance at Cat Lai port.

Hiep informed some 11 enterprises had reported their shipments were disallowed to go through customs under Circular 01 the Ministry of Agriculture and Rural Development.

“We are awaiting statistics to calculate the accurate losses. But I think the biggest loss is delivery schedule. Enterprises have committed to deliver products on time, or else they would pay penalties, not to mention a loss of prestige,” Hiep stressed.

Last week, Cat Lai port customs announced it would not clear furniture shipments that lacked forest product lists certified by forest rangers.

Lixil to start works on US$450-million factory soon

Lixil Corporation, Japan’s largest building material and housing equipment manufacturer, is committed to implementing a US$450-million factory in Dong Nai Province as scheduled.

“Construction works on the factory will kick off late this year and it is set for completion within the next three to five years,” said Morita Nguyen, sales director of Inax Corporation in Vietnam, one of Lixil’s owners.

Lixil Corporation is a consortium of five Japanese companies including Inax Corporation, Tostem Corporation, Shin Nikkei Co., Ltd, Toyo Exterior Co., Ltd and Sunwave Corporation.

Lixil has been given the green light by Dong Nai Province authorities to develop a 55-hectare factory which produces building materials, housing equipment and interior furnishing materials. It is situated in Long Thanh District’s Long Duc Industrial Zone.

Morita stated Lixil is committed to constructing the facility on schedule given current tough economic conditions. “We believe in such huge potential markets in Asia, including Vietnam,” he said.

Dong Nai has been chosen as the venue for Lixil factory since the corporation surveyed the location across regional countries three years ago. After Thailand’s flood crisis, Lixil has made the final decision to locate the facility in Vietnam, Morita added.

Inax Corporation has developed nine factories worth US$100 million in the country.
 
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