BUSINESS IN BRIEF 6/9
Scandals continue to depress shares

Shares failed to retain Tuesday's gains on the HCM City Stock Exchange yesterday, with the VN-Index once again receding by about 0.8 per cent from the prior session to close at 398.92 points.

Around 45.7 million shares changed hands, worth VND678.2 billion (US$32.3 million), a jump in trading value of nearly 50 per cent over the previous day.

Of the market's 30 leading shares as tracked by the VN30 Index, food processor Bourbon Tay Ninh (SBT) and HCM City Infrastructure Investment Co (CII) reached their ceiling prices of VND16,500 and VND25,800 per share, respectively, while only three other stocks in this group managed to add value. The VN30 retreated by 0.7 per cent to 469.46 points.

"The arrest of Duong Chi Dung, former chairman of shipping giant Vinalines, had a somewhat negative effect on investor psychology," Hoa Binh Securities Co analyst Nguyen Thi Huong wrote in a note. "However, the news did not affect the market as strongly as the earlier detention of banking tycoon Nguyen Duc Kien."

Huong warned that yesterday's tumbling market could be a harbinger of further declines.

On the Ha Noi Stock Exchange, the HNX-Index reached 60.92 points, a drop of 1.18 per cent. Market value totalled VND294.5 billion ($14 million), an increase of 37 per cent, while volume approached 31.8 million shares.

The HNX30 Index dropped by over 2.2 per cent, however, closing at just 113.84 points.

VNDirect Securities Co (VND) was the most-active share, with 4.1 million traded before closing off by 3 per cent on the day.

Brokerages yesterday halted margin trading on shares of Ha Noi-listed Asian Commercial Bank (ACB) along with two bank stocks on the HCM City Stock Exchange – Eximbank (EIB) and Sacombank (STB). ACB and STB closed yesterday unchanged, while EIB shed 1.2 per cent of its value.

Foreign investors were buyers on both bourses, picking up shares worth a combined net of around VND27.1 billion ($1.2 million).

Government bond sales total $3.8 billion year to date

Purchase of government bonds is soaring with over VND15.65 trillion ($745.2 million) being snapped up in August alone.

More than VND79.22 trillion (US$3.77 billion) worth have been raised through the Ha Noi Stock Exchange since the start of this year, with the two-, three- and five-year bonds proving an attractive prospect to investors.

Nation sees decline in global competitiveness

Viet Nam has plunged 10 places from last year to be ranked 75th out of 144 economies in the Global Competitiveness Index (GCI) 2012-13, according to a report released by the World Economic Forum yesterday.

Over the last two years, Viet Nam lost 16 places and is now the second-lowest ranked among eight members of the Association of Southeast Asian Nations (ASEAN) that the report covered.

According to the report, the decline of Viet Nam in the global competitive assessment was because the country lost ground in nine out of the 12 pillars of the index, saying that it ranked below 50th in all of the pillars and dangerously close to 100th on most of them.

Most notably, Viet Nam fell 41 places in the macroeconomic environment pillar to 106th. The country's inflation climbed, sovereign debt rating worsened and access to credit became more difficult.

Infrastructure (95th), quality of roads (120th) and ports (113rd) remained challenges for the country despite some improvement in recent years while respect for property rights (113th) and protection of intellectual property (123rd) were insufficient, the report said, adding that private institutions also suffered from poor ethics and particularly weak accountability.

Meanwhile, Viet Nam was reported to have several strengths: an efficient labour market (51st), large market size (32nd) and satisfactory performance in the public health and basic education pillar (64th).

According to the report, decisive policy action was required to put the country's growth performance on a more stable footing.

In the report, Switzerland was ranked first. The 12 pillars of the GCI were institutions, infrastructure, macroeconomics environment, health and primary education, higher education and training, goods market efficiency, labour market efficiency, financial market development, technological readiness, market size, business sophistication and innovation.

Tighter rules on performance of securities companies

Tighter regulations will be imposed on the management of securities companies as part of a crackdown by the State Securities Commission (SSC).

Under the new regulations, taken from the second draft of Circular 226/2010, companies will be suspended if they cannot fix management shortcomings such as making unsustainable losses or defaulting on debts.

In addition, an offending company's membership to stock exchanges and Viet Nam Securities Depository will also be temporarily terminated until their operation is given SSC approval.

Vinacomin unlikely to divest from insurance holdings

Viet Nam National Coal and Mineral Industries Group's (Vinacomin) plan to auction almost 6 million insurance shares next month were unlikely to succeed after the Ministry of Finance ruled the minimum selling price must be equal to the company's book value.

Vinacomin plans to sell its 20 per cent stakes in the General Insurance Corporation of SHB-Vinacomin at a price of VND10,000 per share on the Ha Noi bourse on October 3.

Earlier this year, Vinacomin attempted to sell 5 million shares in Aviation Insurance Corp at VND10,000 each – a plan that has yet to succeed, according to Nguyen Van Bien, Vinacomin's deputy general director.-

Vinaconex profits halved after financial review

First half profits for construction giant Vinaconex (VCG) were slashed by more than 50 per cent following a financial review, downsized from VND221 billion (US$10.5 million) to VND101.8 billion ($4.8 million).

The 54 per cent shortfall, revealed by auditors of Deloitte Viet Nam, was attributed to lower than expected returns from VCG's associated companies after the review, as well as the unrealised profit from the group's construction of the Bac An Khanh urban area in Ha Noi.

Auditors also noted that VCG's potential liabilities related to the financial settlement after inspection of the group's equitisation.

British business group eyes Vietnamese market

A British trade official and an executive chairman told participants at a business briefing in London on Tuesday that Viet Nam was an attractive destination for investment and that the country was ripe for British trade and investment.

Douglas Barnes, Consul General in HCM City and Director for UK Trade and Investment (UKTI) in Viet Nam, and Paul Smith, Executive chairman of Harvey Nash, a London-based company providing IT services, which has been doing business successfully in Viet Nam for 12 years, briefed British businesspeople about the Vietnamese market. The conference was held by the London Chamber of Commerce and Industry for British firms in a prelude to a trade mission which the chamber is organising for those interested in the market to visit Ha Noi and HCM City in November 12-16 this year.

Both speakers highlighted key strengths of the Vietnamese market, including a politically stable and safe environment; a strategic location with access to South East Asia, China and beyond and a growing population (87 million) which is young, dynamic, educated and pragmatic. They also noted other favourable conditions such as a growing domestic market; a burgeoning middle-class with significant spending power; accession to the World Trade Organisation and a signed strategic partnership agreement between the two countries to strengthen their bilateral relationship, including trade ties.

Douglas said other positive points of the Vietnamese market were that for three years running, British firms have ranked Viet Nam as the top destination outside of the BRICs in which they would like to invest and that the country has potential for long-term growth. One of the UK's 17 high growth markets, Viet Nam is estimated to be the fastest-growing economy in the world to 2050.

Smith, who works closely with UKTI to support UK businesses wishing to enter the ASEAN region, will lead the mission, as his local knowledge and support network will benefit the delegates.

He said through his knowledge, Viet Nam had market opportunities in the areas of ICT services and R&D; retail; construction/mining; manufacturing; energy; outsourcing; digital and media; financial services; education; and tourism & leisure.

UK exports of goods and services to Viet Nam in 2011 were 520 million pounds (around US$820 million), an increase of 7.9 per cent year-on-year, while Viet Nam's exports of goods and services to the UK were 1.75 billion pounds ($2.7 billion), a growth of 33 per cent. In term of foreign-directed investment, UK is the third largest EU investor (17th world wide) in Viet Nam.

 Viet Nam's export to Egypt reaches US$201 million

Viet Nam's export turnover to Egypt reached US$201 million in the first seven months of the year, said Viet Nam Ambassador to Egypt Dao Thanh Chung.

Chung said the country's exports to Egypt in 2010 amounted to $200 million while last year's were $280 million, adding that Vietnamese enterprises have brought considerable goods into the market.

Viet Nam's main export items to Egypt have been rice, wooden furniture, consumption goods and seafood.

The latest report from the Ministry of Industry and Trade showed that Egypt has been the fourth largest country which imported Vietnamese goods among 67 countries having trade relations with Viet Nam.

Viet Nam has imported materials serving for production with a yearly average turnover of $20 million.

However, the ministry said that trade has not been up to the two countries' potentials despite increasing export turnover over the past few years.

Chung urged Vietnamese businesses to penetrate further into the market.

He said the embassy would support and create favourable conditions for businesses to promote their trade in Egypt as well as expanding the range of export items available.

Egypt has been in need of agricultural products, cloth, electronics, mobile phones, machines and equipment.

He added that the two countries should establish a Viet Nam-Egypt Business Council to promote trade, investment and co-operation.

The two countries aimed to bring their bilateral trade to $500 million.

Potential for e-commerce development

E-commerce offers a wealth of potential development opportunities for both service providers and companies using online business services.  
    
Tran Huu Linh, Head of the Department for E-Commerce and Information Technology (IT) under the Ministry of Industry and Trade (MoIT), says over the past years, e-commerce has developed steadily in Vietnam and the IT sector has improved remarkably, attracting a large number of internet users who access online networks regularly. This provides plenty of opportunity for developing online transactions as well as e-commerce services.

According to the Department, around 1.5 million online transactions worth more than VND4,130 billion were conducted on 30 trading floors in 2011.

Experts say that in the context of the on-going global economic downturn, the limitations of traditional retail infrastructure offer many opportunities for e-commerce to develop.

Doing business via the websites is now very popular. A 2011 survey showed that more than 30 percent of businesses have set up their own e-commerce websites.

Many businesses have created websites to develop goods distribution networks while others have chosen another way to promote sales by using websites available from third parties.

Those websites that function as cyber-markets or an e-commerce transaction floors are based on diverse forms such as group buying, online markets, classified advertisements, forums, social network shopping channels and real estate trading floors.

In fact, most businesses have benefited greatly from e-commerce and increased their revenues. More than 60 percent say their e-commerce sales rose significantly between 2006 and 2011.

The Department for E-commerce and Science and Technology says by the end of 2011, nearly 130 businesses had registered to use e-commerce floors and 35 online transaction websites were established.

E-commerce service providers have earned considerable profits from their operations, with 30 businesses surveyed boasting total revenues of VND111 billion in 2011.  

Nguyen Hoa Binh, General Director of the e-commerce service provider Peacesoft,says his company’s annual profits grow by 100 percent on average.

Along with the e-commerce transaction floors, many other support services such as non-cash payments, website certification, digital signatures and email have also developed

Of the total revenue earned by e-commerce service providers, 84 percent comes from businesses directly involved in online transaction floors, 10 percent from advertising and six percent from other activities such as sales and training fees.

Based on revenue, five leading e-commerce transaction floors, namely vatgia.com, enbac.com, muachung.vn, chodientu.vn and 123mua.vn, have the lion's share of the market, accounting for 94 percent of all successful transactions and 86 percent of total earnings by 30 operational floors.

A representative from the Vietnam E-Commerce Association (VECOM) predicts that the Vietnamese e-commerce market will continue to grow at an annual rate 40 percent in the coming years.

While developing e-commerce transaction floors, Vietnam has focused on improving e-customs procedures, automatic import licensing and online payments.

Experts say the e-commerce industry in Vietnam, though promising as it looks, will face challenges arising from legal procedures, different payment methods, social complexity, and poor pubic awareness of trade fraud.

Domestic gold up in price

The domestic price rose above VND45 million/tael on September 4 when the global gold price reached nearly US$1,700/ounce after three consecutive trading sessions.
 
In the morning, SJC gold in Ho Chi Minh City hovered around VND45 million per tael, up nearly VND100,000/tael compared to last weekend.

SJC gold in Hanoi was listed at more than VND45 million per tael, a six-month record high.

At present, the price of gold in Vietnam is about VND2.2 million/tael higher than in the world.

Sale of books during economic downturn

While prices of many commodities are steadily increasing and sales turnover of books also dropping, the Book Distribution Corporation (Fahasa) in Ho Chi Minh City has announced revenues of VND1,550 billion (US$74,376), a year-on-year increase of 10 percent.

As a leading book retailer and publisher in the country, Fahasa is playing a vital role in assessing the book market value. No surprises that it has continued to be on the top 10 leading retailers list in the country this year and the last.

This year, the company is seeing an economic downturn as people have cut down on spending, with books being one of the first expenses to be cut. In fact, many book distributors, stores and publishers may even have to close operations or just work perfunctorily.

On the other hand, Fahasa is really a large company with many stores across the country. All Fahasa book stores in provinces are large ones with a wide variety of books, a concept that has proved successful in Hanoi, where people prefer reading books in small stores. Nonetheless, this successful model has brought in huge revenues to Fahasa.

Fahasa shops also sell stationery items, music CDs for children, study items like notebooks, rulers, pencil etc which also help raise turnover dramatically. This is the same in other large book stores like Nguyen Van Cu or Phuong Nam, proving the success of large premises that can be used for other businesses like selling toys or coffee restaurants where readers both read and relax.

Small stores can beat the competition with larger stores by selling specialized books. For instance, a small store at 245 Nguyen Thi Minh Khai in Hanoi only sells literature, history and old books published a long-long time ago to special readers.

In context of the economic downturn, businesses will struggle with many challenges, especially in book trading. However, if enterprises stand firm during difficult times, build innovative marketing strategies that create a difference in attracting book lovers, they will be able to succeed as well as retain their markets.

Tra fish exports to U.S. grow strongly

Vietnam’s tra fish exports to the U.S. rose by 35% year-on-year as of August 15, while exports to the European Union (EU) market fell sharply, the Vietnam Association of Seafood Exporters and Producers (VASEP) reports.

According to the statistics of VASEP, tra fish exports to the U.S. had brought in over US$235 million by the middle of August, up 35% against the same period last year. The U.S. is the single biggest buyer of Vietnamese tra fish in terms of value, with a share of 22%.

VASEP vice chairman Duong Ngoc Minh said local firms boosted export to the U.S. after the demand of the EU market declined significantly. Exports to the EU as of August 15 fetched US$272 million, down 19% year-on-year.

While Vietnam’s tra fish exports to the U.S. picked up sharply, the U.S.’s catfish output decreased. The U.S. Department of Agriculture reported the amount of fish processed in July was 25.1 million pounds, or around 11,200 tons, dipping 6% over the year-ago period.

The reason is feed material prices in the U.S. have increased from US$400 to US$600 per ton, while catfish prices have fallen slightly, discouraging the U.S. fish growers from raising this kind of fish.

Frozen tra fish fillets exported to the U.S. were priced at US$2.89 per kilo in July, down 72 cents against the same period in 2011.

Satra in property deal with Philippine partner

Saigon Trading Group (Satra) has announced that it will join forces with a leading Philippine property firm to develop a commercial and residential project in HCMC.

Speaking to the Daily, Dao Xuan Duc, deputy general director of Satra, said his firm had worked with the Philippine partner over the project that comprises commercial center and apartment buildings on Vo Van Kiet Boulevard in District 6.

During a working visit to the Philippines by HCMC government and business leaders last week, both sides signed a memorandum of understanding on this joint development that will require an estimated US$31-34 million, Duc added.

He said that although Vietnam’s property market is still mired in difficulties, the Philippine company is committed to this project.

The two companies are discussing the project before asking authorities for approval and establishing a joint venture.

The Philippine partner also expressed interest in other property projects in Vietnam, according to Duc.

During the trip, Satra also worked with a major supplier of processed food products for supermarkets and traditional markets in the Philippines as it plans to set up a joint venture producing processed food in Vietnam for export.

Pests strike coffee farms

Current weather in the Central Highlands region is now favorable for multiplication of pests, with coffee farms there already affected, according to a Vietnam News Agency report.

Lam Dong Province has had over 32,831 hectares of coffee plants that are withering and 24,552 hectares facing yellow-leaf disease. The situation is grave in Bao Lam, Di Linh, Lam Ha and Lac Duong districts, and Bao Loc City.

Meanwhile, Dak Lak Province, the country’s main coffee growing area, has been struggling with thousands of hectares of disease-affected coffee.

According to the Central Highlands Agriculture and Forestry Science Institute, coffee farming households and trading firms should apply coffee farming practices that can help resist pests but do no harm to users.

Based on research on biological features and development processes of pests, the institute recommends farming households and enterprises to use suitable chemicals for each species of pest.

Central Highlands provinces have over 526,168 hectares under coffee cultivation, with Dak Lak having the largest area at over 200,000 hectares, Lam Dong over 150,000 hectares and the rest belonging to Dak Nong, Gia Lai and Kon Tum.
 
Dong Nai pig farmers benefit from tripartite linkage

While large numbers of pig farmers nationwide are grappling with huge losses due to declining prices, their peers in the southern province of Dong Nai have earned profits as a result of their cooperation with lenders and enterprises, according to Vietnam News Agency.

The moment the public uproar about lean meat additives died down, pig farmers in Dong Nai began facing pig disease.

There were times when the price of live pigs dropped to a meager VND33,000 a kilo, causing an average loss of VND500,000 for a pig for local farmers. The staggering price fall, therefore, has kicked a host of pig farmers out of business.

Pham Thi Thanh Tuyen, a farmer in Thong Nhat District rearing some 400 sows and pigs for meat, was quoted by the news agency as saying: “My family was about to abandon pig farming while rumors about lean-meat additives were dragging down live-pig prices sharply. But five months ago, my family joined the tripartite collaboration and since then we have been able to take out bank loans at low interest rates and directly buy the mammal from producers.”

Those farmers like Tuyet really benefit from the new program as it helps them reduce input costs.  With the current price of VND38,000 for one kilo of live pig, Tuyet still earns a profit of over VND200,000 a pig while other farmers suffer a loss of more than VND300,000.

According to an executive of Thanh Binh Company in Trang Bom District which is also a member of the program, the program offers farmers a discount of 5% when purchasing feed from makers. Participating firms will also support farmers to take out bank loans by installment plan.

Nguyen Huy Trinh, director of Agribank’s Dong Nai branch, said he feels secure that the loans his branch lends within the program would be used for designated purposes and could be taken back as committed by companies.

Chairman Nguyen Tri Cong of the Dong Nai Livestock Association, who initiated the farmer-business-bank connection, said his association is working on a plan to establish the five-party cooperation, which also includes the State and slaughterhouses. The purpose of the new linkage is to reduce retail prices of pork for the benefit of local consumers, he said.

Neda interested in flood control

Thailand’s Neighboring Countries Economic Development Cooperation Agency (Neda) will raise around US$75 million from Thailand for a tidal sluice project in HCMC, said the Steering Center for Urban Flood Control Program.

Nguyen Ngoc Cong, deputy director of the center, told the Daily on Monday that Neda has provided US$700,000 for the city to make a detailed plan for all river travel routes in the section between Nhieu Loc-Thi Nghe Canal and the Saigon River to build the Tan Thuan tidal sluice in District 7.

If Neda can mobilize capital and the sluice project gets the nod from the HCMC government, work will start on this project in the second quarter of next year. With Neda’s assistance, the tidal sluice will be used for floodtide and flood control and river tourism development in the future, according to Cong.

The Tan Thuan sluice is part of the city’s flood control plan, also known as Project 1547, approved by the Government in 2008. Some main components of Project 1547 are 172 kilometers of dyke along the right side of Saigon and Soai Rap rivers, Vam Co Dong River’s left side and 12 big tidal sluices.

According to Cong, Project 1547 was at first approved with an investment of some VND11 trillion. However, due to price changes and new components, the project’s total cost has now surged to nearly VND35 trillion.

The Nhieu Loc-Thi Nghe tidal sluice as the first component of Project 1547 got off the ground in late 2010 and is scheduled for completion late this year. This sluice, lying at the end of Nhieu Loc-Thi Nghe Canal, is 58 meters wide and consists of four gates that help to control water flows from the Saigon River.

After completion, this sluice will help reduce flooding caused by rain and tides in an area of around 350 hectares in districts 1, 3, 19, Binh Thanh, Phu Nhuan, Go Vap and Tan Binh.

Stitching up a success story

Garment sector player Hugaco is taking a flexible approach to ease production pressures.

The plan to expand production at Hung Yen Garment Joint Stock Corporation (Hugaco)’s Gunyong Garment Enterprise will be extended to 2013 instead of late 2012 as earlier declared.

The step was taken, not due to Hugaco’s financial strains, but a flexible move to lessen pressures on production and business amid a low textile and garment consumption in the global market.

Accordingly, in 2013 Hugaco will pump VND40-50 billion ($2 million) into enlarging Gunyong Garment’s factory space to accommodate 24 garment lines with scope of 1,500 labourers.

“In the next five years, Hugaco will invest in five to eight plants with 60 additional production lines to bring export value to $300 million per year. Besides, the firm will mull further acquisitions to shortly perfect its production and supply chain,” said Hugaco’s general director Nguyen Xuan Duong.

One year ago, Hugaco spent $1 million tantamount to VND20.6 billion on taking over South Korea-backed Gunyong Garment. This was one of rare cases in which a local firm bought out a foreign-invested business in Vietnam, particularly in textile-clothing field.

At this time, industry players assumed taking over an enterprise with state-of-the art production lines and 5,000sqm total space including 4,000sqm workshop with over VND20 billion only was a good investment.

After the buy-out, Hugaco embarked on restructuring Gunyong Garment to soon resume production. Currently, the enterprise consists of six jacket and trouser production lines employing 350 labourers from 75 initially.

Specifically, albeit resuming production for a short time, Gunyong Garment has become one of important links to help Hugaco fulfill export orders. The average income of labourers has exceeded VND3 million ($145) per month which is 2.5 fold more than in the period before the take-over.

In the acquisition, Hugaco benefited from active support by parent company Vinatex as the move matched the garment sector’s development trend.

In mid-August, Minister of Industry and Trade Vu Huy Hoang asked the Department of Light Industry to work with relevant state bodies in making proposals to the State Bank sourcing medium and long-term capital support for firms operating in textile-garment, footwear and wood processing areas to enable purchase of cutting-edge foreign-made equipment.

Vinatex may consider acquiring some new plants in the forthcoming time serving domestic and export market demands, according to Vinatex deputy general director Le Tien Truong.

Vietnamese motorways prove short, but costly   

An official report from the Ministry of Construction showed the average length of motorways in Vietnam are less than 100 km; however, their costs are much higher than comparable roads in China, Europe and Africa.

Investment unit costs for four-lane motorways are 1.4 times higher than in China, while Vietnam’s six-lane highway investments are 1.74 times higher than China.

Investment unit costs for Vietnam’s six-lane motorways are 1.63 times higher than that of European countries such as Germany, Portugal and Hungary.

The ministry has completed the report on investment unit costs for motorways for submission to the Prime Minister. In the report, the ministry proposes an average investment unit cost of 4-lane highways of USD15.91 million per km.

The investment for the delta regions is USD16.63 million/km, while the figure for the midland and central regions is USD9.42 million/km and USD10.56 million/km respectively.

This is the first official report on the investment unit costs for motorways in Vietnam based on figures sourced by the Ministry of Transport. Earlier, reports of the similar kind were often based on assessments by contractors and real construction conditions.

Vietnam’s highest investment unit costs were on the Trung Luong-My Thuan, My Thuan-Can Tho and Long Thanh-Dau Giay roads at USD17-22 million/km; and the Ben Luc-Long Thanh route at USD37 million/km.

According to the Ministry of Construction, most Vietnamese highways run for less than 100 km, however, they include overpasses, lighting and slip roads.

The higher costs have been attributed to difficult terrain and geological conditions. Meanwhile, slow site clearance has also increased investments.

Vietnamese firms cheated by fake Chilean labour export company  

The American Market Department under the Ministry of Industry and Trade has uncovered a fake Chilean labour export company.

Daniel Thomas, Director of Danthom International Consultant Company in Santiago, is the head of the fraudulent operation.

This company advertised online that it was recruiting over 100 workers for employment in Chile for two years as engineers, drivers, gardeners or repairmen. The lowest wage they offered was USD950, rising to USD2,200 per month for eight hours work and Sunday off. The workers were also to be provided with homes and meals and social insurance.

With such an attractive offer, many Vietnamese enterprises contacted Danthom to discuss contracts. After receiving proposals, the Danthom Company responded with their detailed requirements and offers. These letters not only had the signatures of Director Daniel Thomas but were certified by a Chilean notary office.

Vietnamese enterprises were asked to send the visas of the selected workers to an address in Chile so Danthom could ask for work permits at the Chilean Department of Immigration and Citizenship.

After the 91 visas had been sent, the Danthom Company sent a draft contract with a brokerage fee, visa costs and taxes for the Chilean government of around USD2,900. Most of Vietnamese enterprises accepted the fees.

However, some Vietnamese enterprise also requested that Danthom presented their business license but the company said they would only send the license once they received the visa of all the selected workers.

On July 23, the Vietnam Trade Office in Chile investigated Danthom after receiving a request from several Vietnamese enterprises and discovered that Danthom International Consultant Company was not registered as a business in Chile.

Vietnam's Commercial Counsellor and Ambassador in Chile met with Bruno Baranda, sub-secretary of the Chilean Labour Ministry to discuss Danthom's business license. Baranda said the Ministry of Labour didn't have the authority to provide business licenses and that Danthom's license was false.

The American Department said though the visas have been sent off, Vietnamese businesses had not been too severely affected as they had ceased their relationship with the fake firm in time.

The Vietnam Trade Office in Chile has also transferred the case to the Chilean Ministry of Labour to investigate and recover the visas.

Regional meeting on telecommunication opens

The Special ASEAN Telecommunications Senior Officials Meeting was opened in Hanoi on September 5 to review information technology and communication cooperation in the region.

Co-organised by the Ministry of Information and Communications and the ASEAN Secretariat, the event, which will run until September 7, will discuss proposals and issues in the field as well as the progress of cooperation projects, and suggest new projects.

Along with the cooperation among the ASEAN member countries, participating officials will focus on cooperation projects between the association and its dialogue partners, including India , Japan and the EU.

Besides, they will also make preparations for the ASEAN Telecommunication and IT Ministers’ Meeting to be held in the Philippines in November.

Addressing the opening session, Deputy Minister of Information and Communications Le Nam Thang said despite significant achievements, ASEAN’s information and communication sector still faces serious challenges as many people in rural areas have got limited access to information technology services.

There remained a lot of things to do for ASEAN member countries to catch up with the global development speed. Therefore, in order to form an ASEAN information and communication technology community, the association is striving to realise its overall programme to 2015, said Thang./

Vietnam ripe for British trade and investment

A British trade official and an executive chairman told participants at a business briefing in London on September 4 that Vietnam is an attractive destination for investment and that the country is ripe for British trade and investment.

These two speakers were Douglas Barnes, Consul General in Ho Chi Minh City and Director for UK Trade and Investment (UKTI) in Vietnam, and Paul Smith, Executive Chairman of Harvey Nash, a London-based company providing IT services, which has been doing business successfully in Vietnam for 12 years.

They briefed the British businesspeople about the Vietnamese market at the conference which was held by the London Chamber of Commerce and Industry for British firms in a prelude to a trade mission which the chamber is organising for those interested in the market to visit Hanoi and Ho Chi Minh City in November 12-16, this year.

More than 30 representatives from a wide range of companies attended the briefing.

According to the London Chamber of Commerce, Vietnam is rapidly becoming the powerhouse of Southeast Asia, recording GDP growth of 6,4 percent in 2010, making it one of the top expanding economies in the region despite the global financial crisis.

The two speakers highlighted key strengths of the Vietnamese market, including a politically stable and safe environment; strategic location with access to South East Asia, China and beyond and a growing population of 87 million, which is young, dynamic, educated and pragmatic.

They also noted other favourable conditions such as a growing domestic market; a burgeoning middle-class with significant spending power; accession to the World Trade Organisation and a signed strategic partnership agreement between the two countries to strengthen bilateral relationship, including trade ties.

Douglas said other positive points of the Vietnamese market were that for three years running, British firms have ranked Vietnam as the top destination outside of the BRICs in which they would like to invest and that the country had long term growth (estimated the fastest in the world to 2050) and that Vietnam is one of the UK’s 17 high growth markets.

Paul Smith, who works closely with UKTI to support UK businesses into ASEAN region, will lead the mission as his local knowledge, network and support will benefit the delegates.

At the briefing, Paul enthusiastically spoke about Vietnam , introducing a few facts to tell the participants how “ Vietnam touches us every day life” such as rice, pepper, catfish, shoes and coffee. He said he learns that Vietnam has just become number 1 coffee exporter worldwide, and that is a fantastic achievement of the country. He said: “Any time you go to Starbucks, Caffe Nero, think about Vietnam .”

Think about Vietnam when “Over 1 billion people receive and send G3 calls using software developed in Vietnam (Alcatel-Lucent). Nearly a million people found jobs using software developed in Vietnam too (StepStone). By 2015, one in twelve microchips will be made in Vietnam (Intel),” he said.

Paul said through his knowledge, Vietnam had market opportunities in areas of ICT services and R&D; retail; construction/mining; manufacturing; energy; outsourcing; digital and media; financial services; education; and tourism and leisure.

Paul’s Harvey Nash now employs 4,500 staff in both Hanoi and Ho Chi Minh City offices, develops software applications, R&S and maintenance services for clients in 33 countries world wide.

While appreciating his staff as hardworking, loyal, trustworthy, honest and highly-skilled, he also warned the participants about challenges they would face during doing business in Vietnam . These included the inadequate of middle management; low level corruption; infrastructure; regulation & legislation and consistency.
UK exports of goods and services to Vietnam in 2011 were 520 million pounds (around 820 million USD), an increase of 7,9 percent year on year while Vietnam ’s exports of goods and services to the UK were 1,75 billion pounds, a growth of 33 percent.

The UK is the third largest EU investor in Vietnam with 153 projects with a registered value of 2,7 billion USD by the end of the first quarter of this year.

Vietnam, Bulgaria seek to boost ties

Visiting Vietnamese Deputy Prime Minister Nguyen Thien Nhan held talks with his Bulgarian counterpart Simeon Diankov in Sofia on September 3.

During the talks, Nhan spoke highly of Bulgaria’s socio-economic achievements and EU integration over the past time.

He briefed the host about the situation in Vietnam, first of all the economic development, and opportunities for bilateral cooperation in trade, investment, defence, education and training, culture, tourism, science and technology, and international integration.

Nhan stressed that the successful organisation of the 22nd session of the Vietnam-Bulgaria Inter-governmental Committee in June has created favourable conditions for both sides to boost their comprehensive cooperation in all aspects.

However, he noted that economic cooperation between Vietnam and Bulgaria remains modest and is yet to match the two countries’ potential and aspirations.

Nhan affirmed that Vietnam will consider in a positive and serious manner the Bulgarian Government and President’s proposal on a new bilateral cooperation model based on the export of Vietnam ’s semi-processed goods to Bulgaria.

Diankov, who is also Minister of Finance, expressed his belief that bilateral economic ties between Vietnam and Bulgaria will continue to develop in the future as major Bulgarian businesses are very interested in the market in Vietnam.

He agreed on proposals on educational, cultural and artistic cooperation between the two countries’ ministries and agencies to be implemented in the coming time, adding that he will visit Vietnam next month to concretise these potentials.

Bulgaria now has seven FDI projects in Vietnam with a total investment of 30 million USD.

In the future, the two sides will focus on commodities with high added values such as electronic, telecom and medical equipment, bio-technology and renewable energies to increase their two-way trade.

On the same day, Deputy PM Nhan met with Bulgarian Foreign Minister Nicolai Mladenov, and visited the SOFARMA Pharmaceutical Co.’s factory and the Sofia General University’s genetic research centre.

Lotte Hanoi reaches for the sky

The Lotte Hanoi Centre is one of the few projects which is on right track amid the property market gloom.

Lee Jong Kook, general director of Lotte Coralis – the developer of Lotte Hanoi Centre, said the project had reached its 30th floor after more than two years of construction.

“This is a very large project then we [developer and contractors] need much time to do preparation, especially as it takes too much time to build the first five basements underground,” Kook said.

The Lotte Hanoi Centre will be the second highest building in Hanoi with 65 storeys and is located on the corner between Kim Ma and Dao Tan streets.

Kook said with the current construction speed he expected that the whole project could be put into operation on schedule in 2014 and he stressed that Lotte Group had sustainable financial resources which insured capital kept flowing when other projects struggled.

“The big difference compared to other developers is that we have brought capital investment into Vietnam to develop our property here to do business, not mobilising capital from the domestic market, so we are not impacted by financial crisis,” he said.

Moreover, Lotte Coralis also wants to keep the prestige of Lotte’s brand name in Vietnam.

“We have implementing the project with highest responsibility in order to keep highest labour safety environment,” he added.

Lotte started construction in October 2009 and the $400 million complex extends over more than 14,000 square metres. When finished, it will house more than 42,200sqm of department store space. Inside, there will also be 300 hotel rooms while 63,500sqm is given over to office space.

Serviced apartments are to take up about 40,000sqm and there is provision for 1,130 parking lots.
When completed, the new Lotte tower will be the third highest in the country behind the 70-storey Keangnam Hanoi Landmark Tower in Hanoi and Ho Chi Minh City’s 68-storey Bitexco Financial Tower.

The project was originally a joint venture between Luxembourg-based company Coralis SA and Lohr Industrie in 2005. However in 2008 the project was transferred to Lotte at a cost of $55.7 million.

Piaggio recalls scooter

Italian scooter manufacturer Piaggio has recalled its Liberty scooter in Vietnam due to strange sound from rim rear wheel.

The company has responded to a Vietnam Competition Authority’s (VCA), under the Ministry of Industry and Trade, official dispatch dated August 6 requesting an explanation about recalling Liberty scooter and measures to deal with defected scooters in Vietnam.

“Our rim rear wheel design is used for a long time in European market and no similar case has been seen so far as. In the testing procedures and checking in 100,000 Km of Vietnamese roads, it has not found any serious cases happening,” said the company reply to VCA.

Piaggio said imperfect connection between aluminim rim and the core was behind the noise.

The company confirmed that this matter does not relate to customers’ safety as well as the scooters’ functions.

Piaggio Vietnam’s whole dealer network and authorised service points nationwide would give free of charge checks and address any technical problems with the model.

VCA deputy head Nguyen Phuong Nam said that VCA welcomed the firm’s move for consumers’ benefits.

Piaggio Vietnam did not reveal the total number of Liberty scooters recalled, however, the Liberty scooter and Vespa are two scooters that have contributed a majority in the company’s sales. Currently, the price of Liberty scooter is VND50 million.

Besides its Vespa production, the subsidiary produces Liberty high-wheel scooters and recently launched the new Fly, a compact scooter available in 50, 125 and 150cc versions.

The Piaggio Vietnam industrial complex in Vinh Phuc also houses an R&D centre for the two-wheeler sector, the first R&D unit set up by the Piaggio Group in Asia, which works closely with the group headquarters.

Piaggio Group plans to invest $93.24 million in Vietnam during 2012 to 2014. This is from a total capital expenditure of $532.8 million envisaged by the group business plan for 2012-2014, according to a Piaggio statement.
 
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