BUSINESS IN BRIEF 6/7

Landline subscriptions continue to slump amid mobile gains

The number of landline subscribers continued to fall in the first half of 2014 as Vietnam has seen a dramatic shift to mobile use, according to a report by the Ministry of Information and Communications (MIC).

The MIC said landline subscribers were estimated at 7 million in June, down from 9.47 million in June 2013.

At the same time last year, the number of mobile subscribers was around 136 million.

According to the MIC, the number of mobile subscribers using data services was estimated at 121 million in June, down about 2 million from the beginning of the year.

It is predicted that landline numbers will continue to drop in the future as users are lured to cheaper mobile devices and more reasonably priced mobile plans.

As of June, Vietnam had added 300,000 new broadband ADSL subscribers compared with a year earlier, raising the total above 5.5 million.

In the first half of 2014, revenue from postal and telecommunications services was estimated at VND 122 trillion (US$5.7 billion), equivalent to 44% of the sector’s target for the whole of 2014.

Ministry moves to tackle smuggling

Deputy Minister of Industry and Trade Do Thang Hai on Tuesday urged the nation's market watch forces to take more drastic measures to curb smuggling and other forms of trade fraud in the second half of this year.

Addressing a conference on Tuesday, Hai asked them to concentrate on six "hot" groups of goods that were usually smuggled or faked - fertiliser, fuel, liquefied gas, helmets, cigarettes and poultry.

He said that the ministry would improve the legal framework and relevant documents to facilitate the work of market watch forces.

Do Thanh Lam, deputy head of the ministry's Market Watch Department, said that so far, the Government has issued 45 decrees on fines for violations involving the production, trade and transport of products including those that tend to be smuggled or counterfeited.

However, in nearly half of the decrees, the market watch force was not empowered to impose fines, he said.

Hence many people misunderstood that force could only work with products that industry and trade ministry was assigned to manage, he added.

Lam said that smuggling and trade of contraband products was developing in complicated ways, particularly in border provinces of Lang Son, Quang Tri and other southwestern localities.

The conference heard that in the last six months, market watch forces examined over 90,800 cases, punished nearly 48,700 violations and collected fines of VND202.76 trillion (US$9.5 billion), nearly 16 per cent higher than that of the same period of last year.

"This is because of a big gap in prices of foreign and domestic products and high import taxes for wine, beverage, sugar and fuel," he said.

Lam said that the co-operation among agencies and provinces was not effective as it should be, being limited to infrequent exchange of experiences and inter-sectoral inspections.

He said a detailed plan should be drawn up to strengthen co-operation between market watch bureaus of different localities, including joint action against all kinds of trade fraud.

The Mekong Delta City of Can Tho has established a steering committee to oversee Anti-smuggling, Counterfeit Goods and Trade Fraud operations to better prevent, detect and crack down on violations.

Truong Quang Hoai Nam, vice chairman of the municipal People's Committee, said that they would focus efforts on hotspots including stations, markets and supermarkets, impose stricter control over goods that threatened national security, public health and the environment such as drugs, explosives, fuel, tobacco, fertilisers and wildlife products.

In the first half of this year, the city's Industry and Trade Department reported 767 violations relating to smuggling, counterfeit goods and trade fraud, collecting VND9.1 billion ($427,000) in fines.

Hanoi Gift Show 2014 scheduled for late October

Hanoi Gift Show 2014, the only specialised handicraft and gift fair organised in Hanoi, is scheduled to take place at Vietnam Exhibition & Fair Centre from October 27-30, featuring more than 200 exhibitors from Hanoi and other provinces nationwide.

The four-day event provides an ideal platform for enterprises operating in the handicraft industry to advertise and introduce products to foreign importers with the aim of expanding markets and seeking new co-operative partners.

The show will be expanded to 700 booths compared with 550 last year, showcasing five main groups of items, namely home décor and handicrafts, indoor and outdoor furniture, home textiles and embroidery, gifts and ethnic items, and personal accessories.

The organisers will also prepare a special display area to exhibit sophisticated and well-designed products manufactured by enterprises in the ‘One Village One Product’ (OVOP) movement, both from Vietnam and other regional countries including Thailand, Laos and the Philippines.

The OVOP area has become a highlight within the framework of the Hanoi Gift Show, following the success of its two previous editions, creating prestige for the export community as well as with international buyers. This year, OVOP will introduce several specific item groups in terms of fashion, tourism gifts, flowers and trademark building.

Following a ‘Vietnamese Pottery Space’ in 2013, OVOP 2014 will bring participants to a ‘Rattan and Bamboo Space’ with a wide range of both modern and traditional rattan and bamboo handicraft items being displayed on an area of 1,000sq.m.

According to Le Ba Ngoc, Vice Chairman and General Secretary of the Vietnam Handicraft Exporters Association (Vietcraft), corporate participation will be increased to at least 90% at this year’s show, along with minimising the number of private groups and households participating, aiming to enhance trade promotion efficiency and enable businesses with huge export potential to seek international co-operation opportunities.

The organising board expects to welcome about 580 foreign importers to the 2014 Hanoi Gift Show, focusing on major markets including the US, Japan, Australia, EU, Russia, Taiwan (China) and New Zealand – an increasing number against 464 in 2012 and 532 in 2013, Ngoc said.

He added that some preferential policies will be implemented to support the registered international importers to the event such as the provision of free visas and guest pick-up at airports, fact-finding tours to Hanoi’s famous craft villages and free consultation on handicraft-related issues in Vietnam.

Enterprises still keep listing at arm’s length

Many enterprises after launching their initial public offerings (IPO) have still been reluctant to list on the local bourse although the stock market has made good improvement this year, according to data from the market regulator.

According the State Securities Commission (SSC), the number of newly-listed firms was modest in the first six months of 2014 with only seven companies debuting on the two local exchanges. Meanwhile, as many as 22 companies left both bourses.

Therefore, the total number of listed enterprises had dropped from 700 in 2011 to 662 as of the end of June.

The Hochiminh Stock Exchange (HOSE) is expected to welcome two new firms – Mobile World Corporation and Southern Hydropower Joint Stock Company. Meanwhile, Thong Nhat Production & Investment Joint Stock Company and Van Dien Fused Magnesium Phosphate Fertilizer Joint Stock have just applied to list on the southern bourse.

Local banks have also delayed their listing schemes as they are still busy tackling bad debt. Late last year, the Government asked lenders after launching their IPOs to float their shares on the market to secure transparent operations.

For State-owned giants that are going to launch IPOs such as Vinatex, Vietnam Airlines and MobiFone, they are unlikely to list in the near term.

Under prevailing rules, enterprises are forced to realize their listing plans within one year after IPO.

In fact, both administering agencies and entities on the market last year expected Decree 108/ND-CP stipulating administrative fines in the securities sector would force more companies and banks to list. Given the rules, unlisted public enterprises will be subject to fines from VND100-150 million for failing to float shares on the market within one year after IPO.

However, the decree has yet to yield results so far and the market is expected to see just a few newcomers between now and the end of this year.

An official at HOSE told the Daily that enterprises will consider listing plans carefully in spite of fines. They are now shy of listing due to low prices and poor liquidity on the stock market.

In addition, listed enterprises have to spend much time and money observing information disclosure regulations as they have to hire accountants to check their financial reports, he said.

Meanwhile, investors, especially foreign players, are expecting new products as they wish to buy into strong companies. Most leading firms on the market have seen foreign room filled up and such investors are not interested in unattractive firms with poor liquidity.

The director of an investment fund said that to lure investors, the local market must grow in terms of capitalization and the number of leading companies.

G-bond sales hit VND20 trillion in June

The State Treasury raised VND20 trillion worth of government bonds through 14 auctions organized on Hanoi Stock Exchange (HNX) last month, the news site Vietnamplus reports.

According to a report of HNX, G-bond volume mobilized on the primary market jumped 27.3% from May.

Bond yields for the two-year tenor hovered from 5.64% to 5.75% per annum, three years from 6.1% to 6.25% per annum, five years from 7.15% to 7.23%, 10 years 8.7%, and 15 years 8.88% per annum.

A HNX representative said that bond yields for tenors from two to three years inched up by 0.05 percentage point against the previous month. Meanwhile, the yield of the five-year tenor fell 0.3 percentage point and that of 10 years remained unchanged.

On the secondary market, there were over 516 million G-bonds worth VND54.8 trillion traded under the normal trading mode. Transactions focused on tenors of one, two and three years.

For repo trading, there were 213 million bonds worth nearly VND22 trillion changing hands.

During the month, foreign buying under the normal trading mode reached over VND9.5 trillion while foreign sales hit VND5.6 trillion.

For the repo method, foreign buying was around VND2 trillion.

For the secondary Treasury bill market, there were 10.9 million bills worth over VND1 trillion traded under the repo method last month.

Vietnam PMI shrinks slightly in June

HSBC Bank and Markit Economics Company have announced that Vietnam’s Purchasing Managers’ Index (PMI) slightly dropped to 52.3 last month from 52.5 in May, but signaled a further improvement in business conditions in the sector.

This was the 10th consecutive month the PMI had been above 50. An index reading above 50 indicates an overall increase while below 50 is an overall decrease.

In its report released on July 1, HSBC said the Vietnamese manufacturing sector continued improvements in business conditions in June although the rates of growth in output and new orders eased during the month.

New manufacturing orders had risen for the seventh consecutive month in June. The rate of expansion was solid, but slowed for the second month running, it said.

Where new business rose, panelists also reported improved customer demand. The rate of growth in new export orders also eased during the month.

HSBC said growth of new orders led to another increase in production although the impacts of the worker protests on factories in May put the brakes on the pace of expansion. However, manufacturing output has now risen in each of the past nine months.

As covered by the Daily, many workers at industrial zones in Binh Duong, Dong Nai, HCMC and Ha Tinh walked off the job in mid-May in protest against China’s illegal placement of its giant oil rig Haiyang Shiyou-981 deep inside Vietnam’s exclusive economic zone and continental shelf and ill-intentioned elements took advantage of this to incite looting and storming at enterprises in the localities. But, central and local agencies stepped in immediately to put the situation under control.  

According to the HSBC report, a weaker rise in new orders led companies to work through their backlogs of work last month. Outstanding business fell for the second month in a row and at a slightly faster pace than in May.

Moreover, the enforcement of weight restrictions on trucks added to cost burdens last month. As a consequence, input prices rose sharply again, albeit at a slightly weaker pace than in May. The tonnage limits also impacted delivery times.

Meanwhile, purchasing activity continued to increase, extending the current sequence of expansion to 10 months. However, the rate of growth eased to the weakest since September 2013.

Increased input buying helped companies build reserves of inventories, with stocks of purchases rising at the sharpest pace since July 2011. Pre-production inventories have increased in two of the past three months.

Panelists responded to sharp rises in input costs by raising their output prices in June. The increase was modest, but the first since January and the strongest in 15 months.

The rate of job creations in the Vietnamese manufacturing sector remained marginal. While higher new orders encouraged some firms to raise their staffing levels, other companies reported that employee resignations had led to a drop in staff numbers.

Commenting on the Vietnam Manufacturing PMI survey, Trinh Nguyen, Asia Economist at HSBC, said the manufacturing sector continued expansion at a solid pace, albeit with a slight slowdown. Stronger demand is the main reason.

“External demand decelerated but we expect this to be temporary. Given low inventories and robust new orders, we expect the sector to continue to perform well, especially as the impact from recent tensions fades,” she said.

Enterprises discuss diversification of material supplies

Most businesspeople attending a seminar in HCMC on Monday stressed the urgent need to diversify sources of material supplies, focusing on solutions to boost local purchases to reduce reliance on imports, especially from China.

Speaking at the seminar held by the 2030 Businessmen Club under the Saigon Times Club, speakers said that bolstering cooperation for sustainable development is not a new story. However, avoiding depending too much on imports from nearby countries is becoming more urgent as many domestic producers have now been able to supply materials.

Do Long, chairman and general director of Binh Tan Consumer Goods Manufacturing Company (Bita’s), said the company needs up to 360 types of material to produce a pair of shoes and thus it keeps finding domestic suppliers.

Long said his company has found around 80 material suppliers.

Le Quoc An, former chairman of the Vietnam Textile and Apparel Association, said that Southeast Asian countries have set up the ASEAN Federation of Textile Industries (AFTEX), whose goal is to make use of strengths of each country and assisting each other.

The operating model of AFTEX is quite effective. Therefore, local enterprises need to be aware of their strengths in forging links with each other, according to An.

Meanwhile, according to Nguyen Thanh Nhan, deputy director of Saigon Co.op, small and medium producers fail to instill confidence in consumers as their product quality is sometimes not as high as claimed. Besides, they are reluctant in cooperating with one another, he said.

“Many producers have refused to join us in making products bearing the brand of Saigon Co.op as they want to open their own distribution channels and build their own brands, which is a great challenge due to their limited capacities,” Nhan said at the seminar.

Enterprises that are members of the 2030 Businessmen Club and speakers agreed on developing their own material sources, but this needs careful and strategic considerations.

“I expect that cooperation opportunities will open up after this seminar, with cooperation deals to be inked in the coming time, to prove that this is not a talk shop,” said Do Long of Bita’s.

Mizuho Bank helps BR-VT attract Japanese investors

Japan’s Mizuho Bank on July 1 inked a memorandum of understanding (MoU) with Ba Ria-Vung Tau Province (BR-VT) to help provide support for Japanese companies investing in the southern province.

Ho Van Nien, vice chairman of Ba Ria-Vung Tau Province, said the deal with one of the major and prestigious banks of Japan was to strengthen cooperation in attracting Japanese investments to the province and aid operational companies from that country to expand operations.

Nien expected Mizuho will help bring more Japanese investors to the province to sound out the prospects of trading, tourism and other sectors.

Japanese consul general in HCMC Nakajima Satoshi said that Mizuho has formed a strong supporting network for Japanese companies through its facilities in Cambodia, Myanmar, Thailand and Vietnam. He believed that more assistance will be offered to Japanese firms which are exploring business opportunities or are already present in Ba Ria-Vung Tau Province.  

Mizuho Bank’s managing executive officer Katsuyuki Mizuma said Ba Ria-Vung Tau has been known as a major seaport hub in Vietnam and for fast infrastructure development, including an expressway connecting HCMC and an airport underway. The deal with a province of great potential will enable it to provide more and better services for investors in the Mekong subregion.

Mizuma said Mizuho has transactions with 74% of the listed companies in Japan and offers financial services via its 94 offices in 37 countries and territories. The bank will cooperate with the province in organizing investment seminars and consulting in procedures for Japanese investors in the province.

Mizuho also lends to companies from Japan and elsewhere in the world to invest in projects in Vietnam, a market where it has branches in Hanoi and HCMC. In 2012, the bank acquired 15% of chartered capital of the Bank for Foreign Trade of Vietnam.    

The Japanese consul general said ill-intentioned elements took advantage of worker protests against China’s unilateral acts in the East Sea to storm a number of Japanese enterprises in certain industrial zones in May but they quickly resumed operations with prompt support from the Government.

“Vietnam remains an attractive destination for Japanese enterprises and their interest in this market has never decreased,” Satoshi stressed.

Also on July 1, Ba Ria-Vung Tau Province announced establishment of a working group called Japan Desk to exclusively help Japanese firms active in the province. With participation of Japanese experts, the group will also help companies from that country gauge the business environment in the locality.

The group will work with Japan Desk HCMC and Japanese partners to introduce Ba Ria-Vung Tau Province to Japanese investors.

Ba Ria-Vung Tau Province has attracted 290 foreign direct investment projects with combined registered capital of US$26.6 billion. Of the total, Japanese firms are involved in 19 projects with more than US$1.9 billion in steel production, oil and gas pipe outsourcing, engineering, seaport, apparel and seafood sectors.

The Government has picked the province as one of the two localities in Vietnam for developing industrial parks for supporting industries.

Jetstar Pacific receives Vietnam Airlines aircraft

Low-cost carrier Jetstar Pacific on Monday received an Airbus A321 from national carrier Vietnam Airlines to serve the rising summer travel demand from now to September 15.

The deal is part of the plan to combine the low-cost service of Jetstar Pacific with traditional service of Vietnam Airlines in the domestic market. Previously, Vietnam Airlines, which holds a dominant stake in Jetstar Pacific, has cooperated with the latter in transporting passengers in case the flight schedule of one of them is changed.

According to Jetstar Pacific, the aircraft is configured with 184 seats, including 16 business-class seats available for all passengers at the economy fare on the first-come-first-served basis.

Le Hong Ha, general director of Jetstar Pacific, said, “The air carrier’s strategy is to develop budget services and all passengers, even those who buy cheap tickets for economy seats, can enjoy business services.”

Passengers can choose their seat when booking tickets or when finishing procedures at the airport and will only need to pay a service fee of VND60,000.

With one more Airbus A321, Jetstar Pacific can carry an additional 32,000 passengers each month.

The airline now has flights to HCMC, Hanoi, Danang, Vinh, Haiphong, Buon Ma Thuot, Nha Trang, Phu Quoc, and will start its HCMC – Hue route on July 10.

Its two major shareholders are Vietnam Airlines with a stake of 68.43%, and Australia’s Qantas Airways with 30%.

Ministry proposes no fines for overloaded trucks, for now

More time will likely be given for transporters to deal with problems related to overloaded trucks following a proposal on Monday by the Transport Ministry in a bid to unravel the ongoing transport chaos, meaning certain violations may not be subject to fines.

After two months of examining the situation, the ministry at a regular Government meeting in HCMC on Monday proposed that certain violations specified in Government Decree 171/2013/ND-CP be spared from punitive sanctions until December 31.

The proposal cites opinions of provincial authorities, industry associations, cooperatives and police, aiming to remove difficulties for transport firms and goods owners, and give them time to use other vehicles meeting requirements on load control.

Therefore, according to the ministry, in the rest of this year, fines should not be imposed on vehicles violating the axle load but not violating the total load allowed. Drivers of vehicles whose total loads exceed the designed loads by no more than 10% would also be exempted during the period of grace.

Except for Tay Ninh and Lang Son provinces, 61 other provinces and cities are checking the vehicle load around the clock.

Between December 16, 2013 and May 31, 2014, weigh stations nationwide inspected over 103,500 vehicles, and detected nearly 25,000 violations. Authorities imposed fines of VND77 billion, temporarily detained 536 trucks, revoked the driving licenses of 14,011 drivers, and forced violators to unload 32,000 tons of excessive goods.

However, some problems have arisen when checking and fining overloaded vehicles. For instance, goods shippers signed contracts with foreign customers to use 40-foot containers with each fully-loaded one weighing 28 tons under international standards, but such a load is two tons higher than the highest permissible load in Vietnam.

According to the ministry, previously there was no detailed regulation on designs and weights of semi-trailers. If the new rules contained in Decree 171 are applied, there will be around 28,000 semi-trailers failing to meet the design requirements.

Businesses turn into low cost houses

Several companies have dividing their apartments into smaller ones or changing commercial housing projects into social projects to serve low income group of customers, according to HCMC Department of Construction.

An Suong residential area for low income people and resettlement in District 12 (Photo: SGGP)

Fifty percent of 2,000 inventory apartments sold in the first half this year were earlier divided into smaller ones. Investors have asked for permission to divide another 5,000 apartments into 9,100.

Projects with apartments priced less than VND1 billion each have seen good trade.

Hoang Anh Saigon Company was successful in selling 53-65 square meter apartments with two bed rooms costing only VND699 million.

The company’s director general Hoang Chi Thanh said that the project has attracted a lot of customers because it meets demand and suits financial ability of wage earners.

Hung Thinh Land Company has sold out 187 apartments at price averages VND725-1,000 million per 54-60 square meter one within two weeks.

The company earlier launched two low cost apartment projects including 8X Dam Sen in Tan Phu and 8X Thai An in Go Vap. Prices swing from 600-725 million. A total of 520 apartments have been purchased so far.

Projects in the low cost segment will continue to lead the market, said Nguyen Duy Minh, the company’s director general.

Hy Dia Company has just introduced Lotus Apartment in eastern HCMC with prices at VND368 million not including value added tax. Thu Duc Housing Development Company is going to launch a series of low cost apartment blocks named 3S.

The interest rate of the VND30 trillion credit package for social housing has reduced to 5 percent per year, which is expected to make the low cost segment more eventful and contribute to warm up the real estate market.

According to report from the State Bank of Vietnam in HCMC, the real estate credit grows 7 percent over the beginning the year.

VND80–100 trillion to develop Vietnam’s seaport system by 2020

Prime Minister Nguyen Tan Dung on June 24 issued Decision No.1037/QĐ-TTg ratifying adjustments to a master plan on the development of Vietnam’s seaport system by 2020, with orientations to 2030.

The decision takes effect on the date of its signing, replacing the older No. 2190/QĐ-TTg dated December 24, 2009, which approved the plan.

The new scheme aims to maximise the advantages of geographical positioning and natural conditions for the development of a comprehensive and synchronous port system on a national scale to meet the requirements of the processes of industrialisation and modernisation.

It targets to reach the cargo throughput of imports and exports carried by sea at approximately 400–410 million tonnes per year by 2015. The figure is expected to rise to 640–680 million tonnes per year by 2020, and 1.04–1.16 billion tonnes annually by 2030.

Total funding set for the plan was estimated at VND80–100 trillion (US$3.76–4.7 billion), including VND40–50 trillion for public seaport infrastructure development.

Under the new master plan, Vietnam’s seaport system will be divided into six groups of ports, including Group 1: northern seaports from Quang Ninh to Ninh Binh, Group 2: north-central ports from Thanh Hoa to Ha Tinh, Group 3: mid-central ports from Quang Binh to Quang Ngai, Group 4: south central port group from Binh Dinh to Binh Thuan, Group 5: southeastern port group (including Con Dao Island), and Group 6: group of ports in the Mekong River Delta (including Phu Quoc Island and other southwestern islands).

The scheme focuses on building international gateway ports in Hai Phong, Ba Ria–Vung Tau and key economic areas in the central region (when possible), aiming to receive vessels of up to 100,000 tonnes (8,000 TEU containers) or larger. It also makes provisions to develop specialised ports for large-scale metallurgical complexes, petrochemical plants, and thermal electric centres using coal.

AFD continues financing Vietnam’s sustainable development

Many Vietnamese state-owned major enterprises in energy, climate change mitigation and urban development will receive financial support from the French Development Agency.

French Development Agency Director Rémi Genevey told VIR that the agency would provide financial support worth 100 million euros ($130 million) a year to Vietnam’s major state-owned enterprises (SOEs) for coming period.

The preferential loans would be given directly to SOEs without financial guarantees from the Vietnamese government.

“All the projects that would benefit from these loans would need to meet our standards and have good track records when it comes to their operation,” he said.

Vietnam faces infrastructure and energy shortcomings which are combined with a growing population and poorly operating SOEs.

“We’ve selected infrastructure, energy, climate change mitigation and sustainable development as areas to receive our support because they meet our objectives and chime with the country’s critical needs,” Genevey said.

For example in the energy sector, the French agency has made a concessional loan of 75 million euros ($97.5 million) to the National Power Transmission Corporation, a 100 per cent subsidiary of EVN, for the partial funding of equipment for a $428.57 million 437 kilometre high voltage line that runs through Gia Lai, Dak Lak, Dak Nong, Binh Phuoc, Binh Duong provinces and Ho Chi Minh City.

The line was connected to the national power grid in mid-May. However, civil engineering work remains underway and the line’s first circuit is expected to be commissioned in 2015. The second circuit will enable electricity to be imported from Laos and Cambodia by 2018.

The agency is also contributing 110.5 million euros ($143.65 million) funding to the Nhon-Hanoi metro line project expected to be commissioned by 2016. This 12.5km project will be extended to 21km by 2020 and 48km by 2020.

The metro will transport 157,000 passengers a day after commissioning, 428,000 by 2020 and 750,000 by 2030 following expansion.

Operating in Vietnam since 1994, the French agency has sunk $1.95 billion into the country. Vietnam continues to be one of agency’s leading partners, having funded 75 projects to date. Initial support for rural development has been further expanded to the development of major infrastructure projects in the fields of energy, transportation, clean water and sanitation.

The agency committed $189.8 million in Vietnam for projects in micro-finance, urban development, rural infrastructure, environment and climate change mitigation.

Genevey said agency had constantly endeavoured to tailor its strategy and tools to the new economic, social and environmental realities facing Vietnam. For instance, it was the only development agency making aid loans directly to SOEs without financial guarantees from the Vietnamese government.

Emirates appoints new country manager for Vietnam

Fast growing Dubai-based carrier Emirates just appointed Mohammad Sarhan as its new country manager for Vietnam.

In the role, Mohammad takes the mission of growing Emirates business and brand, and making Emirates the ideal airline choice for both locals and foreigners in Vietnam.

"Emirates' daily flight from Ho Chi Minh City to our Dubai hub not only offers Vietnamese consumers convenient connections to more than 140 destinations across 80 countries and territories, but also the award-winning cuisine and entertainment services that Emirates prides itself in gratifying any gourmet passengers,” said Mohammad.

In respect to Emirates’ growth around the world, Mohammad shared: “Every country has its particular culture and practice, yet our Emirates team has great experience in meeting the needs of people around the globe.”

Graduated as a mechanical engineer, Mohammad started his career as a project engineer in Dubai.

Then he joined Emirates and has been working in the aviation industry for eight years.

Mohammad's capacity in aviation, combined with his passion and commitment promises to bring about an innovative element to the Emirates team in Vietnam. Emirates operates daily direct route Ho Chi Minh City – Dubai by the Boeing 777-200ER, offering Business and Economy Class seats, with world-class cuisine and the award-winning ice in-flight entertainment system.

Korean investment grows in textile and garment sector

Korean investors are showing greater interest in Vietnam’s textile and garment sector.

In early June, a big fibre manufacturing plant was launched in the southern province of Dong Nai, marking a growing presence of Korean investment in Vietnam’s textile and garment sector.

The $52 million project, belonging to Dong-IL Vietnam Limited under the Dong-IL group, is located in Dong Nai’s Loc An-Binh Son Industrial Park and is Dong-IL’s first project in the country.

The plant has an estimated capacity of 9,000 tonnes per year and will come on-line mid next year to supply the domestic market, as well as other Asian markets.

Dong-IL Vietnam’s managing director Suh Min Sok said he expects the project to help attract other Korean investors to the Vietnamese market.

Unlike Dong-IL, Sea-A group has been operating in Vietnam for nearly six years and has a garment plant based in the north-central province of Thanh Hoa. It is run by Winners Vina Limited, a unit under Sea-A.

The $12 million facility turns out seven million products a year and has a workforce of 3,000.

Winners Vina is already envisaging a second garment plant in Vietnam, in which it will invest $15 million and employ 6,000. Its products will primarily be for export.

“The move is to satisfy growing orders from US importers, mostly leading retailers such as Target, Walmart, Kohls, Kmart, Sears and Tesco,” said a company source.

With more than 500 businesses based in Vietnam and nearly $2 billion in total committed capital, Korean investment has helped bolster Vietnam’s textile and garment industry, and in particular helped increase export value to Korea, which is now Vietnam’s fourth largest export partner in terms of value, after the US, the EU and Japan.

Vietnam’s textile and garment exports to Korea have jumped sharply in recent years, from less than $300 million in 2009 to nearly $1.2 billion in 2013 and an estimated $750 million in the first five months of this year.

This has given Vietnam’s textile and garments a 24.2 per cent market share in Korea, only behind China with 43.2 per cent.

The Korean firms who led exports to their home country in April-May 2014, based on Vietnam’s General Department of Customs statistics, included Unico Global Vietnam, PS Vina, Daesung Vina, Sung Woo Vina, Shinsung Vina, and I&Y Vina.

The fifth negotiation round for the Vietnam-Korea free trade agreement (FTA) was wrapped up in late May and both sides have reportedly ramped up efforts to conclude the talks by October this year.

The Vietnam Textile and Apparel Association forecasted Korean investment in Vietnam could make a major leap following ratification of the FTA.

Market glut hits fertiliser industry

Domestic nitrogenous fertiliser manufacturers are worried about selling fertiliser due to an oversupply by local manufacturers, along with high imports.

According to the Ministry of Industry, four existing nitrogenous fertiliser plants have a total capacity of 2.2 million tonnes of fertiliser per year, while domestic demand has reached 2 million tonnes per year, as reported by the Dau tu (Investment) newspaper.

Further, total capacity is expected to increase by 500,000 tonnes of fertiliser, based upon a plan on expanding the Ha Bac Nitrogenous Fertiliser Plant, to be completed at the end of this year.

By the end of April, the Viet Nam Chemical Group, including Ha Bac Nitrogenous Fertiliser Plant and Ninh Binh Nitrogenous Fertiliser Plant, had an inventory of 130,000 tonnes of fertiliser.

Additionally, the ministry said 800,000 tonnes of nitrogenous fertiliser were imported to Viet Nam last year, mainly from China. High imports in 2013 had created large inventories at enterprises under the Viet Nam Chemical Group and the Viet Nam Oil and Gas Group (PetroVietnam).

A representative of the Chemical Department at the Ministry of Industry and Trade said the price of nitrogenous fertiliser on the Chinese market was lower than the price of the product in other countries, due to high supply and high inventory. Further, the oversupply of nitrogenous fertiliser in China's market is expected to continue until 2017.

Therefore, local nitrogenous fertiliser producers are worried that China would promote exports of the fertiliser to reduce inventories at home, including to Viet Nam.

The ministry has studied setting limits on imports of the types of fertiliser that local manufacturers could meet, including nitrogenous fertiliser.

Limits on fertiliser imports would be applied to the market, depending on the local supply and demand on fertiliser for different periods.

Cao Hoai Duong, general director of PetroVietnam Fertiliser and Chemical Corporation (PVFCCo) managing Phu My Nitrogenous Fertiliser Plant, said if the state increases import taxes on fertiliser to limit imports, the taxes would not be effective because most fertiliser imports from China to Viet Nam arrive through auxiliary border gates and border crossings outside border-gates, but not via main or international border gates.

According to the ministry, in the first five months of this year, output of nitrogenous fertiliser had a year-on-year increase of 10.3 per cent to 938,900 tonnes. Meanwhile, since early this year, the local fertiliser market has not fluctuated much due to the high supply of the product.

New rural areas in focus at Delta forum

The Mekong Delta Economic Cooperation Forum (MDEC) 2014, themed "Structuring Agriculture – Building New Rural Areas in the Mekong Delta" will be held in Soc Trang province from November 5 to 7.

This annual event aims to enhance cooperation between Mekong provinces and other localities across the countries, ministries and Government agencies, and international organisations, according to Nguyen Phong Quang, deputy head of the Steering Committee for the South-West Region.

MDEC – Soc Trang 2014 will include such major events as Mekong Delta tourism, trade and investment promotion conference, Mekong Delta business forum, community awareness and responsibility improvement conference in adaptation to climate change and rising sea levels in the Mekong Delta.

The main activities of the forum will coincide with the renowned Ok Om Bok Festival of the Khmer ethnic people, aiming to promote tourism, investment and trade, organise sporting and artistic activities, and introduce local traditional cultural values to domestic and international friends.

To prepare for the MDEC – Soc Trang 2014, the Steering Committee for the South-West Region has organised fact-finding tours in the Mekong Delta for repesentatives from 26 Japanese companies.

H1 trade surplus reaches $1.3 billion

The country's trade deficit was estimated at US$200 million in June, with the total export turnover being $12.1 billion and that of imports being $12.3 billion.

Statistics from the General Statistics Office showed that the total export turnover in the first half of the year would reach $70.9 billion, posting a 15 per cent year-on-year increase, while the total import turnover would be $69.6 billion, an increase of 11 per cent year over year.

The country saw a trade surplus of $1.3 billion in the six-month period.

Foreign direct investment (FDI) businesses (including crude oil) dominated the trade activities compared with domestic firms, according to the office.

The sector saw a high trade surplus of $8.5 billion, while the domestic companies reported a trade deficit of $7.2 billion in the first half of the year.

In June, the total export turnover was reduced by 2.5 per cent over the previous month, staying at $12.1 billion.

Some products saw an increase in export turnover in June. The rubber exports turnover increased by 38 per cent to touch $44 million; garments and textile rose by 13 per cent to reach $206 million; and that of wood and wood products posted a 14 per cent increase to reach $63 million.

The FDI sector also took the lead in terms of import turnover during the period, with an increase of 12 per cent, while that of domestic firms was 10 per cent.

The import of items used for assembly was still high year over year. The import turnover of machines and equipment and spare parts rose by 22 per cent to reach $1.9 billion; that of phones and spare parts rose by 6 per cent to touch $237 million; metals' import turnover rose by 17 per cent to amount to $244 million; garment material increased by 28 per cent to touch $515 million and that of cloth rose by 18 per cent to a total of $72 million.

The office said that this was a positive sign which reflected the recovery of domestic production activities. However, Vietnamese enterprises have not been active in production as the imports mainly served the assembly activities of the FDI sector.

Francophone-based banks to boost trade

Banks in Francophone countries in Africa and Viet Nam should establish direct ties to facilitate trade between them, Deputy Prime Minister Vu Van Ninh told a forum in HCM City yesterday.

Trade between Viet Nam and Africa has grown significantly, reaching US$4.29 billion last year, but remains low compared to the potential, requiring the two sides to make more efforts to bolster trade ties, he said.

Vu Tien Loc, chairman of the Viet Nam Chamber of Commerce and Industry, said payment issues create the biggest hurdle to trade since there is no banking co-operation between Viet Nam and the West African Economic and Monetary Union (UEMOA) or the Economic and Monetary Community of Central Africa (CEMAC).

As a result, payment is usually through D/P (documents against payment) or T/T (telegraphic transfer) or by leaving a deposit, all of which are risky, he said. Trade between the two sides is therefore carried out through third parties, pushing up costs, he said.

Also preventing their trade from fulfilling potential are the lack of information about each other's markets and high transport costs, Loc added.

Anissa Barrak, director of the International Francophone Organisation's Asia-Pacific office, said the two-day forum, which concludes today, is expected to spell out the difficulties faced by enterprises and draft measures to boost co-operation between ASEAN and African banks.

Sylvere Bankimbaga, deputy chairman of the Club of Africa Banks and Financial Institutions, said closer ties between Viet Nam and Africa would help eliminate intermediate costs and make it easier to make payment.

Thai Kieu Huong, deputy chairwoman of the Viet Nam-Africa-Middle East Business Forum, called on the Government to set up foreign affairs agencies and sign free trade agreements with Africa's francophone countries to improve conditions for businesses from both sides.

Activities to provide information about each other's markets should also be enhanced, she said.

Ninh said Viet Nam would try its best to foster ties between African francophone countries and ASEAN and create favourable conditions for businesses and investors from the two sides to collaborate.

With the prospect of wrapping up 14 important free trade agreements in 2015-20, Viet Nam could become an important link in the Asia-Pacific economic system and the ASEAN Economic Community, he said.

Loc said that with their complementary economic structures, Viet Nam and African countries have great potential to boost trade.

Viet Nam can export more rice, computers, garment and textile, and electronic products to the region and import raw materials such as cashew, cotton, timber, and others, he said.

Torek Farhadi, senior adviser at the International Trade Centre, said, "African countries look to exchange of information and technology with Viet Nam to benefit from the lessons learnt from its rapid development over the last 30 years."

Hai Phong records highest GDP in three years

The Gross Domestic Product (GDP) growth rate of Hai Phong City in the first half of the year reached 7,52%, the highest over the past  three years.

According to the Municipal Statistics Office, the city’s Industrial Production Index (IPI) in June increased 8.33% compared to the previous month and a year-on-year increase of 12.34%.

The IPI witnessed an increase of 11.81% in the first half of this year.

Total cargo volume passed through the Hai Phong Port was nearly 30 million tons over the reviewed period, up 15%.

Hai Phong City maintains its status as an attractive investment destination, drawing in a total Foreign Direct Investment (FDI) of more than US$637 million in the first half, up 30%.

Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR

PMI, seaport system, AFD, Korean investment
 
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