Shares slump despite inflation data

Investors reacted negatively to the news of a modest increase in CPI (consumer price index) this month as shares fell on both national stock exchanges.

The CPI in October rose just 0.85 per cent against the previous month, down significantly from a high of 2.2 per cent in September, the General Statistics Office announced yesterday.

"Investors remained prudent when it came to low-priced shares as they still sought a stronger foundation in this risky market," analysts of FPT Securities Co commented in a report, adding that if corporate earnings were not solid enough, the market's continued sideways movement or even a decline were expected.

On the HCM City Stock Exchange, the benchmark VN-Index went down 0.57 per cent to close yesterday's session at 395.45 points.

Trading continued to be sluggish with just 34.2 million shares, worth VND490 billion (US$23.3 million), changing hands.

Blue chips tumbled as just three of the top 30 shares by market capitalisation and liquidity posted gains while others declined or closed flat, pushing the VN30 down 0.68 per cent to 466.62 points.

Gainers included sugar maker Societe De Bourbon Tay Ninh (SBT), Vinh Son - Song Hinh Hydropower (VSH) and financial firm Ocean Group (OGC) with rises of more than 1 per cent.

Tan Tao Investment Industry (ITA) reclaimed its position of the most active code in the afternoon with over 2 million shares changing hands, but they closed flat at VND4,300 a share.

Bac Giang Exploitable Mineral Co (BGM) was the second most active with trades of 1.64 million shares changing hands, but the shares plunged to their floor price yesterday after 11 consecutive sessions of hitting the ceiling given the company's losses in the third quarter. BGM closed at VND3,800 a share.

On the Ha Noi Stock Exchange, the HNX-Index recovered in the afternoon session but still lost 0.57 per cent by the end of the day, closing at 54.25 points with a poor trading value of VND118 billion ($5.6 million).

Developer Sacomreal (SCR) was the most active code on the northern bourse with 2 million shares exchanged, going down 1.64 per cent to VND5,900 a share.

Foreign investors continued to pick up shares on the two national stock exchanges, responsible for a net buy of VND18 billion ($857,000) worth of shares.

EU deal signals dawn of a new trade era

Participants at a seminar in Ha Noi yesterday agreed that the signing of a partnership and co-operation agreement (PCA) between Viet Nam and the European Union last June would open the door to a multitude of ties between the two sides.

Deputy Minister of Foreign Affairs Bui Thanh Son said that the agreement marked an important development.

"I believe the agreement will enhance relations between the two sides in future in all aspects of politics, economy and co-operation," Son said, adding that the PCA would boost co-operation in addressing global issues.

These included protecting international peace and security, counter terrorism, organised crime, money laundering and coping with climate change.

Head of the EU delegation to Viet Nam, Franz Jessen, said that the new PCA demonstrated the commitment of the EU to forge an upgraded, broader and more mature partnership with Viet Nam, a partner willing to take on increasing responsibilities on the world scene – and an active and central actor in ASEAN.

"I hope this agreement will soon be complemented by an ambitious EU-Viet Nam Free Trade Agreement," he said. "The first round of negotiations were recently held in Ha Noi."

Head of the Vietnamese Foreign Ministry's EU Affairs Department, Tran Ngoc An, said that in 2005, Viet Nam was the first country in Southeast Asia to have a strategic plan for relations with the EU.

"The PCA, however, will have to go through a separate rectification process by the 27 EU member states and the European Parliament. The process can last for a couple of years," An said.

VietJetAir, Sai Gon Tourist get tourism year airborne

To kick-start Hai Phong and Hong River's Year of Tourism in 2013, VietJetAir and Saigontourist announced a joint tourism promotion to lure travellers to the north-eastern shores.

The deal signed yesterday in the northern port city of Hai Phong will help provide travellers with low-cost tours, priority terms and other services, all designed to make tourism grow in the city and district.

VietJetAir launched its HCM City-Hai Phong route earlier this month with one round trip a day.

Vietnam Airlines launches new Da Nang-Vinh route

Vietnam Airlines yesterday announced direct flights between two central cities, Da Nang and Vinh, from October 28.

There will be one flight each on Monday, Wednesday, Friday and Sunday using the ATR72 which seats 68 passengers.

This is the 38th route in the airline's domestic air network which connect Ha Noi, Da Nang and HCM City, to 20 cities and provinces nationwide.

To mark the occasion, the airline offered return tickets on the Da Nang-Vinh route for only VND600,000 ($30), exclusive of taxes and fees, until December 28.

Sabeco toasts $1.2 trillion in earnings through Q3

The Saigon Brewery company (Sabeco) had earned a total revenue of VND24.9 trillion (US$1.2 billion) over the first three quarters of this year.

Company's general director Pham Thi Hong Hanh said the HCM City-based firm had sold 883 million litres of beer after the third quarter and contributed VND 2.97 trillion (US$141 million) to the State budget. The company had a pre-tax profit of VND3.1 trillion ($148 million) so far this year and planned to increase revenue by 6 per cent growth next year.

SeABank assets up for third year in a row

Southeast Asia Commercial Joint Stock Bank (SeABank) has received the third labour medal for its contribution to the State budget.

Deputy Prime Minister Vu Van Ninh said at the award ceremony the bank was stable with good liquidity and was among 1,000 businesses who paid the biggest corporate income tax between 2008-2011.

Its total asset value had increased quickly in the three years with VND55.2 trillion ($2.6 billion) in 2010 and VND101 trillion ($4.8 billion) in 2011. It is expected to reach VND120 trillion ($5.7 billion) this year. The bank is one of the 10 largest joint stock ones in Viet Nam with a charter capital of over VND5.3 trillion ($253 million).

Apatite factory open for business after trial run

Bac Nhac Son Apatite factory of Viet Nam Apatite Co produced its first products yesterday after a week of trials.

Construction began in August 2007 on the 40ha project in Dong Tuyen commune of northern Lao Cai city, forecast to cost VND800billion ($38 million). The factory will refine phosphate rock to produce Apatite to meet fertiliser and chemical demands. Apatite is a group of minerals, high in phosphorous, which are mainly used in making fertilisers. They are sometimes made into gemstones.

Vinacomin reduces coal prices

The Viet Nam National Coal and Mineral Industries Group (Vinacomin) has reduced domestic coal prices.

The price of coal sold to cement, fertiliser and paper producers will be reduced by 1.5 to 6.7 per cent, depending on the type of coal.

Prices of coal sold to retailers is also to be reduced by up to 9.5 per cent.

Coal sold to electricity generators was excluded from the price adjustment, which became effective on Monday.

IFC: VN’s business environment improved

The business environment in Viet Nam was improved in the period from June 2011 and June 2012, supported by the legal reform on domestic enterprise establishment, according to the International Finance Cooperation (IFC).

The latest joint World Bank-IFC report "Doing Business 2013: Smarter Regulations for Small and Medium Enterprises” shows that Viet Nam ranked 99th among 185 economies around the world.

According to the report, Viet Nam has carried out 18 legal and institutional reforms on eight out of ten areas it had planned to do.

Recently, the country has allowed businesses self-print and issue their own invoices based on the serial numbers they get from tax office. The move helps reduce the costs for businesses incurred when buying VAT invoices. It was also part of efforts to streamlin regulations on domestic enterprise establishment for entrepreneurs’ operation.

The country was also highly valued in other procedures like granting construction licenses (ranking 28th); credit borrowing (40th); implementation of contracts (44th); asset registration (48th) as well as international trade (74th).

Addressing the event, WB Country Director for Viet Nam Victoria Kwakwa affirmed that the WB is giving a priority to assisting Viet Nam in raising its competitiveness.

However, the report says that despite the improved business environment, Viet Nam should make greater effort in order to be equal with other regional economies./.

Garment sector strives for 17 billion USD in export

Vietnam’s garment and textiles sector has seen positive signs for the fourth quarter of this year with many big names having acquired sufficient orders for the period and even for the first quarter of 2013.

Deputy General Director of the Vietnam Textiles Group (Vinatex) Le Tien Truong said the sector will spare no efforts to achieve an export value of 17-17.5 billion USD in 2012 and a target of 20 billion USD in 2013.

By the end of September, Vinatex topped the sector with an export value of 12.6 billion USD, a 7.4 percent year-on-year increase.

According to Truong, the garment sector had a really difficult time in the second quarter, but the situation improved in the third and fourth quarters thanks to higher growth of the market.

In particular, Vietnam’s host of the 2012 annual global conference of the Textile Manufacturers Association from Nov. 4-6 will be a good chance for local businesses to update themselves on market information and expand ties with leading manufacturers in the world, he added.-

New logo marks new stage for Hanel

Ha Noi Electronics Corporation (Hanel) launched its new logo on Monday to affirm a new stage of development, said general director Nguyen Quoc Binh.

Hanel now manufactures computers, smart phones and electrical appliances. It also focuses on developing software solutions, including technology infrastructure, social network, digital signals.

The corporation has also invested in developing high-tech and software industrial parks.-

Deawon to invest $300m in resort

Deawon Cantavil company from South Korea will invest US$300 million in the resort-style Da Phuoc Urbanisation Project in the central city of Da Nang.

The site was cleared in 2010 at a cost of $50 million. Construction will start next year on resorts, golf course, hotels and a 33-storey apartment building for completion in 2020.

The project is Deawon Cantavil's second biggest in the world. It has been described as the largest Foreign Direct Investment project in Da Nang.

Vietinbank profit rises nearly 10%

Vietinbank's Q3 report shows the asset value of the bank rose 9.6 per cent against the previous quarter; after-tax profit reached nearly VND6 trillion; deposits were up 16 per cent against the second quarter and 31 per cent up on the same period last year.

Domestic lumber supply doesn't cut it

Timber imports are on the rise in Viet Nam as local supply has not met demand, according to Huynh Van Hanh, deputy chairman of the Handicrafts and Wood Industry Association of HCM City (Hawa).

In the first nine months of the year, the country spent US$779 million to import 2.36 million cubic metres of timber, mainly from Laos, the US, China, Malaysia, Cameroon, Thailand, New Zealand, Chile, Myanmar and Cambodia, with Laos and the US the two main suppliers.

Hanh spoke at a conference held yesterday in HCM City organised by the International Technical Tropical Timber Association, Hawa and the German International Development Corporation.

The event provided local buyers with a chance to meet suppliers of legal timber sources from different countries.

The local wood processing industry has enjoyed strong growth over the past decade, with export value from finished timber products increasing every year, from $1.9 billion in 2006 to $3.9 billion last year.

However, along with the increase in export value, revenue from timber imports from other countries has also increased year-by-year, from $667 million in 2007 to $1.2 billion last year, despite the creation of large areas of plantation forests.

Plantation forest and natural forests provided about 12.3 million cubic metres of timber a year, but more than half was small wood for paper, pulp and artificial board production.

Thus, local timber for furniture exports satisfied only about 20 per cent of demand.

Experts said the country had to import 4 million cubic metres of timber a year in service for export.

Hanh said demand for timber was expected to top 20 million cubic metres by 2020, but local supply would probably remain at the current figure.

As a result, Viet Nam would need to import about 8 million cubic metres of timber by 2020 since local supply would be insufficient, he said.

Tran Quoc Manh, co-deputy chairman of Hawa, said local wood-processing firms were paying more attention to importing and using timber from legal sources to meet the strict requirements set by importing countries, such as the US and EU.

The country earned $3.4 billion from exported wooden products in the first nine months of the year, a year-on-year increase of 19.4 per cent. Exports are forecasted to reach $4.6 billion this year.

Currently, Viet Nam exports wooden products to 120 countries, with the US, EU and Japan the main import markets.

Garment exporters bank on Japan
Garment and footwear exporters are hoping that Japanese import orders will increase between now and the end of the year, according to the Viet Nam National Textile and Garment Group (Vinatex).

The expectation followed recent falls in the demand of several major markets in the world including the US, the European Union and Japan for similar products in China, the company said.

The Gia Dinh Textile and Garment Corp (Giditex) had recently opened a new production facility with the cooperation of Japan's Tamurakoma Co for making Onward brand products for export to Japan.

In late September, the corporation also met four Japanese enterprises, which are its existing clients, to discuss potentials of increasing contracts next year. The firms included Apron, Tamurakoma, Togashi Hosei and Yamatoya Co Ltd.

The Dong Nai Garment Corp (Donagamex), an affiliate of the Vinatex, had also received a delegation of clients for Japan, according to the company's chairman Bui The Kich.

At the end of last month, this company reached about US$50 million in export turnover with up to $24 million obtained from Japan, a result Kich said to be satisfactory in a context orders were declining in most major import markets.

A representative of the Bac Giang Garment Co (Bagarco) told Dau tu (Vietnam Investment Review) that the company had good growth for export to Japan at 14 per cent in the first nine months of the year, with major products including jackets, overcoats, jeans and shorts.

The representative said the company wouldn't miss any opportunities to get more orders from Japan, since its export to the market now represented 18 per cent of the total turnover of around $90 million it had targeted for this year.

Viet Nam Leather and Footwear Association Deputy General Secretary Nguyen Thi Tong said that, although seeking contracts were extremely hard this year, enterprises in this sector were taking every opportunity to attract more clients from Japan with declining orders in China.

Phuc Yen Shoes Co's Import-Export Department head Nguyen Chi Toan said, "not all enterprises could seize this opportunity as the Japanese market has very strict standards and complicated distribution systems and requires high trade promotion costs."

Sacombank, Manulife in cooperation deal

Saigon Thuong Tin Commercial Bank, or Sacombank, and life insurer Manulife Vietnam on Monday signed a cooperation agreement to diversify products and better customer services of the both sides.

The agreement offers customers of Manulife Vietnam more insurance premium payment methods. Clients can settle fees at 410 transaction points of Sacombank by providing contract numbers or authorize the bank to deduct money from their accounts to pay the insurance fees.

Besides, customers can access online payments anywhere with Visa, Master, JCB and Union Pay cards.

The two sides will also cooperate to expand bancassurance, selling insurance products via bank branches, and develop lending and deposit products for customers.

SBV exchange old banknotes  

HCM City's banks have started to collect VND10,000 (USD0.48) and VND20,000 cotton banknotes to exchange them for plastic notes.

The local authorities also asked the Department of Information and Communication to co-operate with districts and ward authorities to inform the public.

On September 28 the State Bank of Vietnam announced that they would start collecting the older cotton VND10,000 and VND20,000 notes beginning January 1, 2013, as those two notes will be taken out of circulation.

People will be able to bring their old notes to their nearest SBV's branch, credit facilities or State treasury exchanges for new polymer notes.

SBV had stopped issuing the cotton banknotes and recovered them via banks and treasury to limit their presence in the market. Some commercial centres have refused to accept the cotton banknotes and many people have thought that the notes were taken out of circulation for years.

"I haven't accepted cotton banknote from customers in a long time." Ly, a trader in Ngoc Khanh Market, Hanoi said.

After the SBV announced the decision, the old notes suddenly gained more value, especially the old cotton VND10,000. The note with red colour was often used as lucky money during Tet.

The old cotton VND10,000 has been offered on the internet for anywhere between VND20-50,000. Some VND10,000 notes have higher prices with 'lucky' serial numbers.

ASEAN aims to corner global plastics market

The members of the ASEAN Federation of Plastic Industries should improve productivity so they can become a global hub for plastics, the federation's secretary-general said at a conference held yesterday in HCM City.

"Current global events have caused challenges affecting plastic enterprises, including the pressure of globalisation and liberalisation of the economy. This has forced us to rethink the way we do business," Ronald Lim said.

At the conference, representatives of ASEAN-member countries, Singapore, Malaysia, Thailand, Indonesia, the Philippines, Myanmar and Viet Nam, plus Japan, India and China, discussed issues facing the industry.

Shrinking demand, a sharp decline in plastic prices, fluctuating material prices, soaring energy prices, labour shortage and high operating costs are just some of the many challenges facing the plastics sector.

At the conference, country reports were presented on the plastics industry outlook.

According to the Malaysian Plastics Industry Association, the plastics industry is anticipated to register mild growth of 2-3 per cent for this year, similar to last year. The growth will be driven by the export of packaging materials.

Developed economies are facing high costs, so they are looking for high-quality products at reasonable prices.

"For the long term, the industry will shift to higher value-added activities as costs are expected to increase further. Training of skilled labour and technical upgrades are vital," the representative said.

The Philippine Plastics Industry Association said its objective was to promote a level playing field in the industry, both in the domestic and international market.

It would keep the industry updated with the largest trends in technology, production processes and new products.

Speakers for the Viet Nam Plastics Industry and the Singapore Plastics Industry said their countries would continue to focus on increasing polymer production capacity, which is integrated with corresponding petrochemical expansion.

In Singapore, all petrochemical facilities are nearing mechanical completion and downstream polymer production has been expanded. More than 5 million metric tonnes of polymer are expected to be produced per year, with a higher level of exports expected.

Upon completion of the facilities in 2015, petrochemical capacity will be increased by 2.5 million tonnes and synthetic rubber to 450,00 tonnes.

The Viet Nam Plastics Association said it was issuing the monthly Nhua&Cuoc Song magazine (Plastics&Life) which would include the latest information on production, markets and technology.

Viet Nam's plastic industry is one of the fastest growing sectors in the country.

The 14th AFPI council ended yesterday and by rotation based on alphabetical order, the AFPI chairmanship will be turned over to Thailand. Singapore will continue as the AFPI Permanent Secretariat.

On the same day as the conference, the 22th Asian Plastic Forum began in HCM City. The forum focused on sustainability, attracting nearly 300 delegates from 11 Asian countries.

Nation swings to trade deficit in October

With a trade deficit in October alone of nearly US$500 million, the nation swung to an overall deficit in the first ten months of this year of $357 million – erasing a trade surplus of $143 million as of late September, according to the Ministry of Industry and Trade.

Total trade value in the first 10 months of the year reached $187.25 billion, of which exports accounted for $93.45 billion, an increase of 18.4 per cent over the same period last year. Imports totalled $93.8 billion, a year-on-year increase of 6.8 per cent. Foreign-invested enterprises represented over half of the export value during the period, with a combined export value of nearly $51.6 billion.

In October alone, the nation's total trade value reached $20.3 billion. Exports of textiles and garments saw the largest value, reaching $1.4 billion, closely followed by mobile phones and components, totalling $1.3 billion.

The nation now has 22 categories of goods with export values in excess of $1 billion so far in 2012, including textiles and garments, with a value of $12.53 billion; mobile phones and components, with a value of nearly $10 billion; crude oil at over $7 billion; and computer and electronic products and components at over $6 billion.

Regulatory climate lags behind region

"Viet Nam needs to reform its business regulatory climate if it hopes to reach the level of other economies in the Asia-Pacific region," World Bank country director for Viet Nam Victoria Kwakwa said in a meeting here yesterday held to launch a new report by the World Bank and the International Finance Corporation (IFC).

Entitled Doing Business 2013: Smarter Regulations for Small- and Medium-Sized Enterprises, the annual report evaluates the ease of doing business around the world by assessing the complexity and costs of regulatory processes and the strength of legal institutions in each country.

The report ranked Viet Nam 99th out of 185 economies worldwide, a ranking unchanged from last year's report.

Singapore topped the global rankings on ease of doing business for the seventh consecutive year and China made great strides in improving business regulations for local enterprises to be ranked second, followed by New Zealand, the US and Denmark.

In the past eight years, Viet Nam has carried out institutional or regulatory reforms in eight of the 10 areas of business regulation covered by the report. However, Kwakwa noted, other countries in the region had made more rigorous improvements than Viet Nam.

The report showed that Viet Nam ranked below 100 in five out of ten indicators, including starting a business (108th), access to electricity (155th), protecting investors (169th), taxation (138th) and bankruptcy proceedings (149th).

Viet Nam remained below the world average after ten years of reforms and surveys, proving that it has failed to make a breakthrough despite the issuance of Resolution No 11 and Project 30 aiming at improving the business climate and and simplifying administrative procedures, said senior economist Pham Chi Lan.

"It's a pity that the reform problems have been addressed, yet the results aren't clear," Lan said.

Allowing companies to print their own value-added tax (VAT) invoices, which was recognised as an improvement by the report's authors, did not do much to increase Viet Nam's rankings, much while access to electricity remained problematic due to ongoing electrical shortages and a monopoly in the power market, together with high power costs.

The report also found that tax burdens were high in Viet Nam, Lan said.

Meanwhile, the country ranked only 28th and 40th in terms of dealing with construction permits and obtaining credit, respectively.

Lan expressed doubts about the rankings, saying that they did not reflect the real situation in Viet Nam, although she admitted that construction permits and access to credit remained headaches for domestic enterprises.

"This has weakened economic competitiveness, which might lead to corruption," she said, warning that Viet Nam would encounter further challenges in the next two years, as the ASEAN-China Free Trade Agreement took effect.

World Bank experts said procedures should be further simplified while information needed to be made accessible to everyone, improving transparency and reducing opportunities for corruption.

Regional plastics manufacturers meet in HCM City

How to ride out the economic slowdown and maintain growth was discussed at a conference of ASEAN plastics manufacturers in HCM City on October 23.

The 14th ASEAN Federation of Plastics Industries (AFPI) Conference and the 22nd Asia Plastics Forum (APF) brought together more than 300 delegates from 11 nations, examining the real situation and development trends for the plastics industry in member states as well as the entire ASEAN bloc.

In his opening speech, AFPI President and Secretary General AFPI Ronald Lim stressed that to overcome difficulties such as price fluctuations, labour shortages, and high production costs, AFPI member states need to raise their capacity and productivity to sharpen their competitive edge.

APF General Secretary Callum Chen also underlined the importance of ensuring the sustainability of the plastics industry.

Deputy Minister of Industry and Trade Ho Thi Kim Thoa said the plastics industry in ASEAN nations has recorded steady growth of 9 percent annually even though it is in its infancy compared to other industries.

She said the plastics industry in Vietnam has continually developed to meet both export and local demands and is striving to reach 17.5 percent growth in the 2011-2020 period.

The 12th Vietnam International Plastics & Rubber Industry Exhibition (Vietnamplas) will take place in HCM City on October 24 as part of the conference.

VietJetAir, Saigontourist get tourism year airborne

VietJetAir and Saigontourists have cooperated in launching tourism promotion programs to kick-start the 2013 year of Hai Phong-Hong River.  

These programs, signed in the northern port city of Hai Phong on October 24 will provide travelers with low-cost tours, priority terms and other services for the benefit of local tourism development.

Desmond Lin, director of business development at VietJetAir said that such cooperative programmes will provide a premise for cooperation between VietJetAir and other tourism associations and travel agents.

VietJetAir launched its HCM City - Hai Phong route earlier this month with one round trip a day.

 Vietnam improves its business environment

The International Finance Corporation, a member of the World Bank unveiled a “Doing Business 2013: Smarter Regulations for Small and Medium-sized enterprises” report.

According to the report, between June 2011 and June 2012, Vietnam has improved its business environment through a regulatory reform, making it easier for local firms to start up a business. Vietnam ranks 99th out of 185 economies on the ease of doing business.

The report said that Vietnam has implemented a total of 18 institutional or regulatory reforms, in 8 of 10 areas of business regulation measured by the annual Doing Business report over the past eight years. The most recent reform made starting up a business easier by allowing Vietnamese companies to use self-printed value added tax invoices.

Vietnam has been highly appreciated in several areas such as dealing with construction permits (28th), getting credit (40th), enforcing contracts (44th), registering property (48th), trading across borders (74th).

“Helping Vietnam to improve its competitiveness is one of the World Bank Group’s priorities in Vietnam,” said Victoria Kwakwa, the World Bank Country Director for Vietnam.

Vietnam has implemented various reforms over the years to improve the business environment, she said, adding that more needs to be done to bring Vietnam to the level of other economies in the region.

Singapore tops the global ranking on the ease of doing business for the seventh consecutive year, while Hong Kong SAR, China, holds onto the second spot. Joining them on the list of the 10 economies with the most business-friendly regulations, are, in this order: New Zealand; the United States; Denmark; Norway; the United Kingdom; the Republic of Korea; Georgia; and Australia.

Seminar discusses Vietnam-EU agreement

The signing of a partnership and co-operation agreement (PCA) between Vietnam and the European Union last June will open the door to a multitude of ties between the two sides, participants said at a seminar in Hanoi on October 23.

"I believe the agreement will enhance relations between the two sides in future in all aspects of politics, economy and co-operation," Deputy Minister of Foreign Affairs Bui Thanh Son said, adding that the PCA will also boost co-operation in addressing global issues.

These included protecting international peace and security, counter terrorism, organised crime, money laundering and coping with climate change.

The Head of the EU delegation to Vietnam, Franz Jessen, said that the new PCA demonstrated the EU’s commitment forging an upgraded, broader and more mature partnership with Vietnam, a partner willing to take on increasing responsibilities on the world scene - and an active and central actor in ASEAN.

"I hope this agreement will soon be complemented by an ambitious EU-Vietnam Free Trade Agreement," he said. "The first round of negotiations was recently held in Hanoi."

The Head of the Vietnamese Foreign Ministry's EU Affairs Department, Tran Ngoc An, said that in 2005 Vietnam was the first country in Southeast Asia to have a strategic plan for relations with the EU.

"The PCA, however, will have to go through a separate rectification process by the 27 EU member states and the European Parliament. The process can last for a couple of years," An said.

11 countries export vegetables and fruit to Vietnam

Eleven countries have got permission to export vegetables and fruit to Vietnam, according to the Ministry of Agriculture and Rural Development (MARD).   

They are the US, France, Australia, New Zealand, Canada, Thailand, the Republic of Korea (RoK), Chile, Cambodia, South Africa, and India.

Two other countries, namely Laos and China, are temporarily allowed to export vegetables and fruit to the Vietnamese market till the end of this year.

The MARD has asked foreign exporters to strictly follow Vietnamese regulations on product quality to ensure food hygiene and safety for local consumers.

WB funds new power station in Thanh Hoa

A contract to construct the 260 MW Trung Son hydropower station, which is the first to be funded by the World Bank, was signed in Hanoi on October 22.    

The signatories included the Trung Son Hydropower Company under the Electricity of Vietnam (EVN), contractors Sam Sung C&T and the Construction Joint Stock Company No. 47.

According to Ngo Viet Hai, the Chairman and CEO of the Trung Son Company, this phase will cost nearly US$150 million.

Keiko Sato, the World Bank’s Vietnam Portfolio and Operations Manager stated that this is an important project for Vietnam’s future and said she hopes that the WB’s financial assistance will be used effectively during the project’s construction.

With a total investment of around US$386 million, the Trung Son hydropower is being built on the Ma River, in Trung Son commune, Quan Hoa district, in the central province of Thanh Hoa and will comprise of four groups of turbines.

Once fully completed and fully in operation by 2018, the power station will produce 1.55 billion kWh annually.

Apart from generating power, the project will also help to control floods in the central region.

US imposes zero tax rate on Vietnamese steel pipes

Vietnam’s welded carbon-quality steel pipes exported to the US market will enjoy an anti-dumping duty (AD) of zero percent following the US Department of Commerce (DOC)’s final decision.
The DOC affirmed SeAH Steel Vina Corporation and Vietnam Haiphong Hongyuan Machinery Manufactory Co. Ltd. did not receive any government subsidy as previously accused by the US. Therefore, the US’s anti-dumping lawsuit against steel pipes imported from Vietnam is officially removed.

Nguyen Duc Nghi, Deputy Chairman of the Vietnam Steel Association, said while DOC investigations were underway, local steel exporters had closely coordinated with relevant ministries and agencies and hired international layers to protect their rights. They finally succeeded in proving that there was no dumping of Vietnamese steel pipes on the US market.

Though the DOC removed its AD on Vietnamese welded carbon-quality steel pipes imported to the US after March 30, 2012, these products are still facing anti-dumping duty at the moment, Nghi said.

On October 12, he added, the Thai Ministry of Commerce officially commenced its investigation into the alleged dumping of cold rolled coil imports from China and Vietnam.

The Vietnam Competition Authority (VCA) under the Ministry of Industry and Trade (MoIT) has asked local steel businesses to fully participate and closely co-ordinate with Thai investigation agencies to fulfill their requirements.

Prospect of exports in 2013

Local exporters might face crunch time in the coming year, even though they achieved a slight increase in export turnover in the first three quarters of 2012.    

They are expected to earn US$113 billion by year-end, up 16.6 percent over 2011 and above the target set by the National Assembly (NA).

Total imports are estimated at US$114 billion, up 6.8 percent against last year while the import surplus level accounts for just 1 percent of total export earnings, much lower than the figure stated in the NA Resolution.

Vietnam’s US$34 million trade surplus in the first nine months of 2012 lifted the overall balance of payment to more than US$8 billion – an impressive figure compared to the same period last year (US$2.65 billion).

However, there is growing concern about the competitiveness of home-made goods. The NA Economic Affairs Committee says local exports are still at a disadvantage as last year’s export earnings from the domestic invested sector dropped by 0.6 percent to US$31.3 billion while those from the foreign-invested sector rose 34.6 percent to US$52.5 billion.

There is also fear about a continuous drop in the input power and overall demand of the national economy in the face of lower import surplus and inflation rates recorded in the first three quarters of this year.

However, the Ministry of Planning and Investment (MPI) is still optimistic about export performance in the near future, saying disadvantages are primarily caused by objective factors, and surging prices on the global market will help push up Vietnam’s export prices sooner or later. The current drop in market demands and export prices is blamed on the slow recovery of the world economy, especially in developed countries, the MPI says.

In a recent report to the NA Standing Committee, MPI Minister Bui Quang Vinh stressed the need to boost exports and strictly control the import of non-merit goods.

Regarding the Ministry of Industry and Trade (MoIT)’s proposal for a number of measures to promote export growth, Dr. Cao Si Kiem, a member of the NA Economic Affairs Committee, says they are unlikely to solve newly-emerging snags in the import-export sector.

Kiem says it is possible to fetch US$124.3 billion in total export turnover by the end of 2013 (10 percent higher than this year’s figure). But the bottom line is that the domestic-invested sector should focus on boosting exports one way or another.

What economists are concerned about is Vietnam’s remaining too dependent on some key export markets like the US and European Union (EU) to achieve sustainable growth.

Reality shows that after enjoying an export surplus with the US for years, Vietnam has run into trouble more than once when the latter put up technical barriers to maintain its trade balance.

Vietnam wins many international tourism prizes

Vietnam has been listed as one of the winners of Readers’ Travel award 2012 from Conde Nats Traveler magazine.
The 25th annual voting of this magazine selected five resorts and hotels in Vietnam as the best in the region.

The 111 year-old hotel Sofitel Legend Metropole Hanoi was placed third among the top-20 hotels in South East Asia. Also included in this list were two other alternatives,

Life Heritage Resort Hoi An and the Nam Hai were placed 10th and 14th among the top 15 Asia leading resorts, respectively.

Especially, Hoi An was voted for the first time as the 10th most attractive destination in Asia, like other cities such as Bangkok, Hong Kong and Kyoto.

Nearly 46,500 readers were involved in the voting process through the magazine’s security website.

Cement industry has a giant mountain to climb

Vietnam’s cement industry is finding it hard to export their products as cement inventory levels approach a worrisome level.

According to the Vietnam National Cement Association’s (VNCA) latest figures, in the year to the end of September, the country’s total cement output was 35 million tonnes, down 8 per cent year-on-year. The figure for clinker was 36.5 million tonnes, down 5 per cent. Only five million tonnes of clinker and one million tonnes of cement were exported during the period.

The inventory of cement and clinker hit more than 2 million tonnes during January-September due to economic woes and the government’s fiscal and monetary tightening. Nguyen Van Diep, office manager of the Vietnam National Cement Association (VNCA), said export should be the way out for local cement makers given the big inventory levels, but that road was also bumpy.

“It’s not easy to export due to difficulties related to infrastructure convenience, logistics costs and the decline in overseas demand amid the global economic woes. For instance, many cement joint ventures are located far from sea, leading to high transportation fees and higher export risk,” Diep said.

Nguyen Van Phuong, head of Phuc Son Cement Company’s import-export department, said that the company exported around 100,000 tonnes of clinker per month. At present, Phuc Son is exporting from Hon Gai Port with transport fee of VND45,000 ($2.14) per tonne. However, Quang Ninh port authorities recently asked cement companies to move from Hon Gai port to Hon Net port for exporting activities to protect the environment as Hon Gai port is near Halong city.

But the request means the transportation fees get higher for Phuc Son because Hon Net port is four hours farther away for Phuc Son compared with Hon Gai port. “The country’s undeveloped logistic system is impacting on the quality of cement. Moreover, moving to the new port means it takes longer time and increases the transport fees while we will suffer from higher risk on products’ quality,” Phuong said.

Bao Quy, an assistant to Lucks Cement Company’s general director, said: “Due to tough economic climate in many countries, it is difficult to seek new markets for export. So far, we have not exported products abroad.”

So far, there are only eight cement companies, including six domestic cement companies - Thang Long, Ha Tien, Bim Son, Halong, Hoang Mai, Hoang Thach Cement company, are exporting clinker and cement. Only two out of six cement joint venture companies -namely Phuc Son Cement and Chinfon Cement -have exports.

The two joint ventures account for about one-third of the 6 million tonnes of cement and clinker that Vietnam’s cement industry exported in the first nine months of this year.

The main export markets for Vietnam cement are Africa, Bangladesh, Angola and Southeast Asia nations. So far, every tonne of clinker in Vietnam is exported with the price of $36-$37 - the cheapest in Southeast Asia.

Le Van Toi, head of the Ministry of Construction’s Department of Building Material, said that the most difficult problem for export products from local and joint venture cement manufacturers is the issue of dumping prices.

“It is necessary to set up an organisation to gather and manage all exporters in order to increase their efficiency,” said Toi.

Garment makers expect slowdown

Enterprises in the garment and textiles industry will continue facing difficulties in the remaining months of the year, given the lack of export orders and access to capital, industry insiders said at a seminar in HCM City yesterday.

Jointly organised by the Viet Nam Textile and Apparel Association (VITAS), the Bank for Investment and Development of Viet Nam (BIDV), and Dun&Bradstreet (D&B), the seminar sought ways to help garment and textile enterprises overcome difficulties in finding capital as well as new customers.

Garment and textile exports posted a modest year-on-year growth of 7.3 per cent in the first nine months of the year to reach US$11.2 billion. This compared to the country's overall export growth of 18.6 per cent.

Demand in the EU market has fallen strongly in the past months and export orders have decreased significantly over the same period last year, said Dang Phuong Dung, deputy chairwoman and general secretary of Vitas.

Many garment and textile enterprises chose to outsource work because they found it hard to access capital, Dung said.

According to a BIDV survey, 100 per cent of the polled companies with annual revenues of more than $10 million said they need medium and long-term loans to invest and expand production.

Other problems facing the industry were also highlighted at the seminar.

Dung said low labour costs would be no longer be a competitive aspect of the industry in the coming time.

"We must find out measures to increase our real competitiveness by investing more in equipment and technology to raise labour productivity," she said.

However, it was not easy for enterprises to access bank loans to do this, she said, adding that though interest rates have fallen in recent months, they were still high compared to other countries.

"Moreover, heavy reliance on imported materials and outsourcing orders that carry a low return on investment has meant local firms were unable to add value to their products and make the sector more competitive," she said.

"Furthermore, if the current regulation on the 275-day tax payment grace period is removed as suggested by the Ministry of Finance, garment companies would face more financial troubles," Dung said.

Under current laws, enterprises that import raw materials for production of goods for export receive a 275-day grace period on paying import duties.

However, the Finance Ministry has recently compiled draft revisions for the Tax Management Law that requires enterprises to pay tax before customs clearance, or provide a guarantee from a credit institution before they can secure the 275-day grace period.

Dung said guarantee procedures also caused difficulties for exporters because they were time-consuming and involved mortgaging assets or temporarily freezing bank accounts.

Dung said the association would work with other business associations to petition the Government to reconsider the draft.

Regarding the outlook for garment and textile exports in the coming months, Dung said brighter prospects could be expected for the US market, but the EU was not showing signs of recovery. Viet Nam's membership of the World Trade Organisation and the many free trade agreements that it has signed should provide good opportunities to access new markets, she said.

"However, the industry must solve problems concerning raw materials and meeting strict rules of origin, otherwise we cannot capitalise on the opportunities created by FTAs," she said.

Nguyen Ngoc Hung, general director of D&B Vietnam, said the garment and textiles industry still had potential to develop and expand its presence in international markets.

Herb Cochran, Executive director of Amcham Viet Nam, advised Vietnamese enterprises to study consumers' demand to create suitable products.

Also speaking at the seminar, Dau Tri Dung, deputy director of BIDV's Corporate Products, said his bank would help its customers access capital through several export support programmes.