Vietnamese business forum opens in Europe

More than 200 overseas Vietnamese businesses from 12 countries gathered at a forum in Prague, the Czech Republic, on October 27.
The event, the sixth of its kind held in Europe, focused on developing retail networks, bars and restaurants, and services to help the overseas Vietnamese community stabilize their lives and achieve sustainable development in their resident countries.

Delegates at the forum highlighted business opportunities available in the face of the global financial crisis.

Former State Vice President Truong My Hoa stressed the need to create close links among businesses, especially during the current economic difficulties. Enterprises should propose measures to help the State adjust mechanisms and policies to facilitate business operations, she said.

Most participants agreed that Vietnamese businesses have not yet developed effective retail networks in overseas markets. Though many Vietnamese businesses have secured a firm foothold in Eastern Europe, they have been strongly impacted by the Euro zone crisis because many of them are wholesale enterprises. Vietnamese retail shops operate separately in Western Europe.

Hoang Manh Hue, Chairman of the Union of Vietnamese Businesses Associations in Europe, said that many trade centres are being built in Europe, but the main focus is not on promoting retail networks, which can diversify their business operations. Vietnamese enterprises need to cooperate with foreign partners in their resident countries to overcome difficulties and increase their effectiveness, he added.

Some delegates suggested that Vietnamese businesses set up retail shops in remote areas where large European firms usually do not have a presence.

Tran Dang Chung, a representative from the Russian Business Association, said retail venues in overseas markets will help expand the distribution networks of local businesses and limit unhealthy competition.

On this occasion, former Vice State President Truong My Hoa, who is also Chairwoman of the Vu A Dinh Scholarship Fund, introduced a new scholarship program called “For Truong Sa Students” and called for support from overseas Vietnamese businesses.

Online exports – a good way to resolve business issues

Given the current gloomy export market, domestic enterprises need to take advantage of online business.    

According to the Ministry of Industry and Trade (MoIT), many local exporters are facing a shortage of orders,especially long-term orders, due to the numerous difficulties facing the global economy.

Vietnam’s traditional markets are suffering while the pressure from competition in the international market continues to increase.

A recent IMF World Economic Outlook report says there are no positive signs for the world’s economy in 2012 and 2013, so it seems Vietnamese exporters will be grappling with various challenges for the foreseeable future.

Tran Dinh Toan, Deputy General Director of the OSB Investment and Technology Joint Stock Company (OSB), says exporting businesses are growing more pessimistic as the international economic situation deteriorates.

However, he warns, enterprises cannot afford to simply wait until the situation improves. Instead, they should restructure their organisation and be proactive in seeking out new clients and maintaining their operations.

They should also alter their strategies for identifying supply sources.  Toan recommended that exporters focus on specific markets and sign even small contracts to minimise risks, noting that embracing e-commerce is an effective way to achieve this.

E-commerce experts say domestic exporters used to sell their products to middlemen at low prices to avoid price-related risks. Now some are investing directly in the online export sector, which is a more proactive approach to expanding their business.

Tran Xuan Thuy, director of the business-to-business website Vietnam, says that though online exporting has proved effective, it remains unfamiliar to many Vietnamese businesses.

He points out a number of shortcomings plaguing the Vietnamese online export centre, including the unprofessional and inefficient dealings with letters of inquiry and customer care.

He blames these shortcomings for local exporters not taking advantage of e-commerce channels to the same degree as their Chinese and Indian counterparts have.

OSB Deputy General Director Tran Dinh Toan attributes this problem to a lack of awareness weighing down Vietnamese enterprises.

Local businesses do not consider online exports as an important channel so they have not invested enough to develop it, Toan explains.

A further problem arises from the fact that after initial online contact is made with partners, all follow-up procedures, including confirming partners’ information, exchanging product details, taking orders, and processing payments, are still conducted through traditional channels.

Experts emphasise the importance of thoroughly researching potential business partners to avoid being defrauded. They advise domestic enterprises to use reputable websites such as or to verify their partners’ emails, telephone numbers, addresses, and any memberships in relevant trade promotion organisations.
WTO, Vietnam discuss agriculture

A group of advisors from the WTO Secretariat recently held a working session in Geneva with the Vietnamese delegation to the UNDP, WTO and other international organizations.

The session was focused on agriculture NAMA (Non-Agricultural Market Access), negotiations as well as regulations related to trade and services.

Head of the Vietnamese delegation, Ambassador Nguyen Trung Thanh, expressed concern over the stagnation of the Doha round, as the WTO is striving to negotiate the principles of a multilateral agreement on services.

Legal advisor to the WTO Market Access Division, Ms Suja Rishikesh Mavroidis, said that the goodwill of WTO member nations is an important factor in the success of the negotiations. Almost all the negotiators have been active in trying to reach a consensus in certain areas.

Suja said it is important for Vietnam, as a developing nation, to understand its position in all negotiations, including those in agriculture non-agricultural fields and services, and it must be fully aware of its commitments to reduce tariffs.

At the working session, the Vietnamese side also paid special attention to the report by Marie – Bel Martinez-Hommel, who is in charge of economic affairs on the Goods and Agriculture Committee. The report affirms that agricultural negotiations will focus on opening markets, export subsidy and domestic subsidy. These are very sensitive issues for all WTO members  so the negotiations are progressing slowly, which affects other negotiations such as those for services and opening non-agricultural markets.

Regarding subsidies for Thai rice, Marie said that the Thai government's purchasing and stockpiling of rice poses a threat to the Vietnamese rice market if Thailand implements an anti-dumping policy.

Services and other topics were also discussed during the session, but the WTO Secretariat working group affirmed that the US, EU, Japan and Singapore are the only parties that have been active in accelerating negotiations.

Hanoi Gift Show 2012 opens

Nearly 230 handicraft businesses from across the country are displaying their wares at the Hanoi Gift Show 2012, which opened in Hanoi on October 26.   

During the five-day event, businesses will have the opportunity to introduce their products, seek new partners and expand their markets.

The event aims to promote the culture, history and potential of traditional Vietnamese craft villages to local and international visitors.

Two seminars will be held during the event to provide businesses with updated information about the Australian and Japanese markets.

The organizing board said that the show has also been advertised to more than 60 nations around the world and so far, 489 importers from 41 countries have visited the fair.

Vu Thi Cam Tu, director of An Do Co, Ltd, said her company brought unique products from Bat Trang ceramic village to the exhibition, most notably high value-added items with modern designs that were produced in an environmentally friendly way to conserve materials and fuel.

Vietnam’s handicraft import-export turnover hit nearly US$1.5 billion and is growing at an annual rate of more than 10 percent. Many rattan, bamboo, ceramic and wood products are highly competitive and appreciated in foreign markets.

Industrial output rises 4.5 pct in 10 months

The nation’s industrial production increased 4.5 percent in the first 10 months of this year compared to the same period last year, announced the General Statistics Office (GSO).

The figure represented a slight slowdown from the 4.7 percent growth recorded in the first eight months of this year, and was about half of the rate of growth seen in 2011, said GSO economic expert Vu Quang Ha.

The slow growth rate was mainly attributed to low consumer demand, high inventory level of unsold goods, and a reduction or temporary halt in production by some enterprises, Ha said.

Inventory indices alone in the past 10 months of the year were at 20.3 percent, he noted.

The production fell 16.2 percent for motor vehicles, 9.9 percent for garments, and 7.1 percent for cement.

However, some industrial products managed to achieve increase in production.

Production surged 76.2 percent for batteries, 59.4 percent for shipbuilding and components, 51.6 percent for telecommunications equipment, and 21.2 percent for electronic components. Sugar production also rose by 15.2 percent.

Among specific industries, electrical generation and distribution grew by 12.8 percent during the 10-month period, while crude oil production grew by 12.1 percent, water supply and treatment by 8.7 percent and the mining industry by 3.8 percent.

The manufacturing and processing industries accounted for 70 percent of the total industrial production.

Japanese investment encouraged in Vietnam

A group of 80 Japanese enterprises, led by Mie Prefecture Governor Suzuki Eikei, will visit Vietnam to seek investment opportunities and do business.    

Suzuki Eikei announced the planned trip at a meeting welcoming a Vietnamese Embassy delegation led by Doan Xuan Hung to Mie Prefecture, Japan, on October 25.

He also noted that six Mie Prefecture enterprises are currently investing in Vietnam and many other agricultural businesses are eager to promote investment further.

Ambassador Hung emphasised the importance of Vietnam’s partnership with Japan, saying it continues to deepen across many different fields.

He said Vietnam offers incentives to Japanese businesses that want to undertake agricultural cooperation projects using high technology.

Many Vietnamese localities have suitable conditions for agricultural production and hope to receive technology transfer and ecological agricultural investment from Mie Prefecture.

Mie Prefecture is famous for its scientific and technological achievements in genetic engineering, micro-technology, post-harvest technology and preservation, and aquaculture processing technology.

Vietnam – a rising star among rapid growth markets

Vietnam is expected to grow by almost 6 percent over the next 25 years, making it the world’s third fastest developing economy, according to Ernst & Young’s latest report on rapid growth markets (RGMs).
Ernst & Young, a leading global auditing group, said that wages in the Vietnamese manufacturing sector are currently estimated at nearly half those paid in China and Thailand, encouraging manufacturers to move operations to diversify production and capitalise on lower costs.

“This has enabled Vietnam to attract more than US$6.5 billion in FDI in each of the last five years,” it reported.

Alexis Karlins-Marchay, Co-Director of the Ernst & Young Emerging Markets Centre, highlighted Vietnam’s young and well-educated population of almost 88 million, its modest labour costs, its 6 percent targeted growth in 2013  and its scope for future economic restructuring.

Ernst & Young quoted the World Bank as saying that over the last few years, mobile phones and related accessories have become the second-largest Vietnamese export item, accounting for 10.5 percent of total exports. The World Bank expects this category to have overtaken garments as Vietnam’s largest source of export revenue in 2013.

The report added that the ability to attract and retain foreign firms in high-value manufacturing products such as electronics, computers, and phones is a potentially lucrative advantage for Vietnam, particularly as some of its neighbours have found it harder to move up the value chain.

The World Economic Forum’s Global Competitiveness Report 2011-2012 recently revealed that Vietnam had advanced 20 places in terms of its macroeconomic environment.

In June, Standard and Poor’s upgraded the country’s outlook from negative to stable, stressing all the while that price stabilization must remain a priority. The State Bank of Vietnam (SBV) has already cut interest rates five times this year to support activity but must take care to avoid excessively loosening monetary policy.

Ernst & Young also praised Vietnam’s success in improving its trade and current account balances, saying that the country’s current account moved into surplus in 2011 from a deficit of 12 percent of GDP in 2008.

FDI disbursement hits US$9 billion in 10 months

As much as US$9 billion in foreign direct investment (FDI) was disbursed over the past 10 months of this year, approximately equal to last year’s figure.
According to the Foreign Investment Agency under the Ministry of Planning and Investment foreign investors registered to pour US$10.5 billion into Vietnam, equivalent to 75.3 percent of the same period last year.

US$6.68 billion (down 36.7 percent) was invested in 881 newly-licensed projects (equal to 86 percent of the previous corresponding period).

359 projects registered to increase their capital, amounting to a total of US$3.81 billion, up 12.3 percent on last year’s period.

The processing and manufacturing industries attracted the most FDI valued at US$6.9 billion in both newly-licensed and additional capital, accounting for 66.2 of the total. They were followed by real estate with US$1.84 billion, or 17.6 percent of the total.

Japan topped the list of foreign investors in the 10-month period with US$4.92 billion, or 46.9 percent of the total. The Republic of Korea ranked second with US$936 million and Samoa placed third with US$899.8 million.

The southern province of Binh Duong attracted the most capital from foreign investors (US$2.17 billion), followed by HCM City (US$1.12 billion) and Haiphong (US$1.08 billion).

Cambodia-Vietnam trade reaches US$2.45 bn

The two-way trade turnover between Vietnam and Cambodia hit US$2.45 billion in the first nine months of 2012, up 17 percent compared to the same period last year.    

Exports to Cambodia amounted to US$2.073 billion, an 18 percent increase on 2011, while imports were valued at US$378 million, a year-on-year increase of 10 percent.

Main exports included oil, garments, rubber and grains-based products, machinery and associated equipment, mobile phones, and pottery. Wood and timber products, agro-aquatic products, tobacco, iron, and steel all number among Vietnam’s primary imports from Cambodia.

The two countries aim to fetch US$5 billion in bilateral trade by 2015.

Agro-forestry, fisheries exports hit US$22.5 bln

Export earnings of agro-forestry and aquatic products in the past ten months were estimated at US$22.5 billion, up 9.5 percent over the same period last year.  

According to the Ministry of Agriculture and Rural Development, several agricultural products have maintained stable growth in both volume and value, with some commodities seeing a strong surge, including coffee, cassava and products from cassava.

In the reviewed period, the country shipped abroad 1.4 million tonnes of coffee worth US$3 billion, representing year-on-year rise of 37.7 percent in volume and 32.7 percent in value.

The two largest export markets for Vietnamese coffee products were the US, accounting for 12.1 percent of the export value, and Germany, representing 12 percent.

Cassava exports reached over 3.6 million tonnes, earning US$1.13 billion, up 58.5 percent in volume and 38 percent in value.

Tea exports saw a positive signal with 110,000 tonnes shipped during ten months, worth US$182 million, year-on-year increases of 9 percent in volume and 8.8 percent in value. Pakistan remains the largest importer of Vietnamese tea.

Wood and wooden products also saw a large increase of 19.3 percent in export value, earning US$3.8 billion.

Most major export markets for Vietnamese wood and wooden products showed strong growth of 28.7 percent in the US, 19.7 percent in Japan and 7.2 percent in China.

Meanwhile aquatic products registered only a slight increase of 1.7 percent in export value to over US$5 billion.

However, export of this commodity was forecast to be up in remaining months of this year because of the increasing demand of importing countries.

Rice and rubber were the only key export products to see increases in export volume but reductions in export value during the first ten months.

Rice had a year-on-year surge of 8.3 percent in volume to 6.9 million tonnes but a year-on-year decrease of 8.7 percent in value to US$3.14 billion. The average export price fell 9 percent to US$452 per tonne compared to the same period last year.

Rubber earned a total of US$2.3 billion from an export volume of 811,000 tonnes. The decrease of 8.7 percent in earnings was attributed to falling prices in the world market since early this year.

Conference discusses social enterprises role

The 2012 International Social Entrepreneurship Conference opened on October 25 in Hanoi, focusing on exchanging experiences and establishing relations between Vietnamese and foreign businesses.    

Organised by the Centre of Women Development (CWD) at the Vietnam Women’s Union (VWU), the International Women’s Federation of Commerce and Industry of Singapore (IWFCIS) and the British Council, the two-day conference aims to raise awareness of the value and contributions of enterprises as well as to introduce new social enterprises projects.

According to Cao Thi Hong Van, CWD Director, in the context of economic recession, it is necessary to encourage and support the development of businesses serving the interests of society and community.

Ann Phua, IWFCIS Chair, said regional experts at the conference should analyse challenges and opportunities of social enterprises and responsibilities of individuals and organisations.

Robin Rickard, British Council’s Director for Vietnam, said the UK, as a leading country in social enterprise development, is willing to share its experiences over the past 30 years with Vietnam.

The previous decade witnessed a rapid growth of social enterprises in many countries, including Vietnam, he added.

Regarding the role that women play in economic development, VWU Standing Vice President Hoang Thi Ai Nhien said Vietnam has a high rate of women taking part in economic activities (83 percent), as high as that of men (85 percent).

Women are involved in all sectors and own more than 25 percent of enterprises and over 41 percent of production and trade establishments, she added.

As an organisation representing women’s rights and interests, the VWU has carried out many programmes and activities aiming to promote women’s participation in economic development. It has helped women access vocational and business training programmes, and build a businesswomen network.

Nhien affirmed that with priority given to society and community development, social enterprises will play an increasingly important role in the economy of all countries.

Bank earnings down year-on-year in Q3
Commercial banks have begun announcing their third-quarter earnings, which are expected to be significantly lower industry-wide than the same period a year ago due to slow credit growth and rising bad debt levels.

Vietcombank has announced third-quarter profits of nearly VND1.1 trillion (US$51.4 million), an increase of 5.46 per cent over the same quarter a year ago. However, the bank's net profit for the first nine months of the year was VND3.2 trillion ($152.38 million), a decline of 2.14 per cent from the same period last year.

Techcombank, Eximbank, Sacombank and Lien Viet Post Bank also posted lower business results in the third quarter, citing slow credit growth, rising loan defaults and lower revenue from non-credit services.

Techcombank's net profit in the first nine months declined by 0.7 per cent year-on-year to about VND1.7 trillion ($80 million).

Sacombank was slightly below its targets for the period, with a pre-tax profit of VND2.1 trillion in the first nine months of the year, a figure equal to only 62 per cent of the bank's targets for the year. Eximbank was even further off-pace, with profits through September reaching only 52.5 per cent of the year's target.

Meanwhile, Lien Viet Post Bank's net profits plunged in the first three quarters, declining by 53 per cent from the same period last year. The bank blamed losses in revenues from securities and foreign exchange and other services.

Experts attributed the banks' negative performance to the ongoing effects of the economic downturn, which has caused sharp declines in revenue from lending, the main source of income for banks. To overcome the difficulties, banks were being urged to cut costs and seek opportunities for revenue from other services.

However, one banker who asked to remain anonymous said it was not easy to be profitable merely on non-credit services. When credit growth slowed, he said, service fees also fell accordingly.

Among banks to have already announced earnings, Vietinbank has been a rare bright spot, reporting an impressive VND4.5 trillion ($214.3 million) in net profit in the first nine months of this year, the highest in the banking industry so far and easily meeting the bank's target for the entire year.

In the third quarter alone, Vietinbank posted a net profit of VND2.4 trillion ($114.8 million), 10.4 per cent over the same quarter a year ago.

The strong profits came mostly from interest income. In the third quarter, the lender's net interest income was nearly VND4.6 trillion ($219.05 million), lifting the figure for the first nine months to VND13.4 trillion ($638.09 million).

DongA Bank was also on target for the year, posting a pre-tax profit of just over VND1 trillion ($47.6 million) in the first nine months, up VND42 billion over the same period last year and meeting 69 per cent of the bank's target for the year.

Most of the banks that have yet to report have predicted modest profits for the entire year, noting that credit growth has remained slow despite many banks offering attractive credit packages with low interest rates.

Asia Commercial Bank has not yet announced its results, but a report from Ban Viet Securities Co estimated the bank would see a loss of VND1.25 trillion ($59.5 million) in the third quarter, driven largely by losses in its gold-trading business. With an expected pre-tax profit of only VND1.2 trillion ($57.14 million) for the year through September, the bank was not expected to meet its target for the year of gross profits of VND5.5 trillion ($216.9 million).

 Poor earnings weigh on shares
The disappointing third-quarter earnings of listed companies, accompanied by rising profit-taking pressures, combined to depress shares on both of the nation's stock exchanges last week.

On the HCM City Stock Exchange, the VN-Index lost a cumulative 1.64 per cent over the course of the week to close on Friday at 391.70 points. The volume of trades was down 33.5 per cent from the previous week, averaging about 36.3 million shares, while value on the southern bourse averaged VND525 billion (US$25 million) per session.

Increased sell pressures on large-cap shares, following rising blue chip prices during the previous week, drove the VN30 Index down last week by 1.93 per cent to 462.16 points.

The poor earnings reported by Asia Commercial Bank (ACB) also had an adverse impact on other banks and major companies, noted analysts on the financial website

ACB reported a loss of VND500 billion (US$23.8 million) in the third quarter, caused by heavy losses in foreign exchange and gold trading totalling over VND1.14 trillion ($54.5 million) during the period. The lender's nine-month profit therefore fell to just VND896.4 billion ($42.7 million).

Up to 50 businesses have posted losses in the third quarter so far, most of which have been brokerage firms and companies in the mining, construction and real estate development sectors. The number of poor reports this earnings season were also expected to increase.

News of slower inflation in October also failed to impress investors last week, noted the analysts. Consumer prices rose by just 0.85 per cent over the previous month, down significantly from the 2.2-per-cent monthly pace seen in September.

"This data is no longer in the primary focus of investors and, in fact, is not a major concern of the economy," the analysts wrote.

On the Ha Noi Stock Exchange, the HNX-Index also fell by 1.7 per cent over the course of last week to close at 53.79 points on Friday. The volume of trades dropped 35 per cent from the prior week to an average of about 24 million shares, worth VND161.5 billion ($7.7 million) per session.

While domestic investors unloaded shares on both exchanges, foreign investors concluded last week as net buyers, picking up shares worth a combined net of VND80 billion ($3.8 million).

Most analysts now believe investor pessimism is the primary factor holding back the market. Though share prices have dropped to attractive levels (half of all codes are currently priced below par value and about 150 codes have prices of below VND500 per share), most investors have opted to sit out the market rather than pour capital into cheap shares.

Tran Van Nhien, head of the analysis department of A Au Securities Co, said most of the money coming into the market now was focused on speculative shares promising short-term profits. Investors were generally holding these shares for three sessions and then selling them as soon as prices increased.

"The market is therefore unlikely to see a long rally," Nhien said. "Investors are waiting on more supporting news."

Ca Mau gas, power, fertilizer complex inaugurated

Vietnam Oil and Gas Group (Petro Vietnam) held a ceremony to inaugurate the Ca Mau gas, power and fertilizer complex in Khanh An Commune in U Minh District in the southernmost province of Ca Mau on October 26.

The inauguration of the complex will have a great effect on the southwestern region and the whole country, making important contribution to the socio-economic development of the Mekong Delta in general and Ca Mau Province in particular.

The complex will also attract and develop more trade, services, technical and material demand as well as create jobs for thousands of workers.

Experts estimate that the industrial complex will contribute more than VND1 trillion to the province budget.

The Ca Mau gas, power and fertilizer project was approved by the Prime Minister in 2001 with the aim to explore and use the country’s natural gas resources effectively.

The US$2 billion project includes a PM3-CM gas pipeline, the CM1 and CM2 power plants, the Ca Mau fertilizer plant and many other facilities.

Since its operation, the PM3-CM pipeline has provided more than 7 billion cubic meters of gas for the three power and fertilizer plants in the complex.

As for the Ca Mau Fertilizer Plant, it was implemented in mid-2008 with capacity to produce 800,000 tons of urea per year. Since April 2012, Ca Mau Fertilizer Plant has rolled out more than 400,000 tons of urea, meeting 40 percent of the market demand, while the CM1 and CM2 power plants have generated 32.6 billion kwh of electricity to the national grid.

Minister discusses ways to bolster real estate market

Trinh Dinh Dung, the Minister of Construction, met with real estate companies on October 25 in Hanoi, to discuss ways to boost growth and resolve the many difficulties plaguing the real estate sector.

This crucial meeting was also attended by representatives from the People’s Committee of Hanoi and other relevant ministries and central departments.

According to Minister Dung, Hanoi has handed over 20,000 hectares of vacant land to real estate businesses to implement their projects. However, most companies have not been able to start or complete these projects.

Mr. Dung said that if these projects are not vital, they should be scrapped or temporarily shelved.

For those projects which are near completion, he proposed that investors switch to social housing instead of commercial apartments as this will help in meeting the housing demand of low income groups besides also being exempt from land usage fee.

He encouraged businesses to divide unsold apartments into smaller sections so that low income people can afford to buy a smaller and cheaper space.

However, the Hanoi Department of Planning and Architecture disagreed with the above proposal as this measure could face some difficulties. For instance, an elevator can serve four to six apartments and if the apartments are divided into 10 or 12 sections, the elevator will be perpetually overloaded. Basic infrastructure management and logistics will also become difficult and out of control.

Minister Dung said that Hanoi has about 2,400 apartments in stock at the moment. Though this is not a large number, these apartments are scattered across urban areas. Division within these apartments will not cause much pressure on the planning if done with management of proper logistics in mind.

The Ministry of Construction is preparing a proposal for the Government and the State Bank for creating better and more advantageous policies to help real estate companies overcome difficulties and revive the sector.

Paucity of funds to develop infrastructure on Phu Quoc Island

Le Van Thi, chairman of the People’s Committee in the Mekong Delta province of Kien Giang, said on Thursday that there was a severe paucity of funds to develop basic infrastructure on Phu Quoc Island, such as electricity lines and a water supply system.

He was speaking at a meeting with a Government delegation on the mechanisms and policies to develop Phu Quoc Island, a district of Kien Giang Province.

Poor infrastructure has prevented investors from investing in the island, he said.

Mr. Thi has proposed to the Prime Minister and the Politburo to look into the development of Phu Quoc Island by 2020, and appoint the provincial People’s Committee headed by a deputy chairman to manage the development of the island.

He suggested establishing six specialized departments for the management board and the Phu Quoc District People’s Committee to work towards development of the island.

During 2013-2015, the Government should allocate VND4,500 billion (US$216 million) to improve main traffic projects in Phu Quoc.

Nguyen Phong Quang, deputy head of the Southwest Region Steering Committee and head of the Government delegation, admitted of lack of capital for infrastructure development in Phu Quoc Island. Funds earlier released from the Central budget had long since run out.

Mr. Quang said that he will propose to the Government and relevant ministries to increase fund capital for the development of basic infrastructure on Phu Quoc Island.

Provinces seek out Gov't help for rice, tra fish production

Authorities in the Cuu Long (Mekong) Delta have asked the Ministry of Industry and Trade to list rice and tra fish as two of the key items in the government's trade-promotion programme.

The progamme helps promote products in export markets by providing funds to industry associations, trade-promotion agencies and corporations.

Every year, the Ministry of Industry and Trade draws up a list of industries that have been chosen to receive help from the government.

Delta authorities made their request at a seminar held on Wednesday by the Ministry of Industry and Trade and the Can Tho City People's Committee in Can Tho.

Seminar participants said that rice and tra catfish, the Delta's key products, had faced price declines during bumper harvests, and that farmers, including shrimp breeders, lacked capital for production.

In addition, tra fish farmers have suffered severe financial losses, and shrimp farmers are facing disease outbreaks.

Most shrimp and tra fish processors are facing a shortage of materials for production because farmers had been cutting back on production because of losses.

Participants at the seminar said it was difficult for rice farmers to achieve a profit of 30 per cent.

According to the seminar participants, regional investment policies for rice and tra fish have not matched the potential of these two products.

In the first nine months of the year, seafood exports have brought in US$4.5 billion, up 4.3 per cent against the same period last year, according to the Ministry of Industry and Trade.

However, the export value of shrimp and tra fish fell by 3.9 per cent and 1.8 per cent, respectively. As a result, the seafood sector might not meet its target of exporting $6.5 billion worth of products this year, according to the ministry.

At another seminar, held in Can Tho on Wednesday, participants said exports had declined because of disease outbreaks among shrimp, processors' capital shortages, and unhealthy competition among seafood exporters.

Speaking at the seminar on sustainable seafood development and exports, Nguyen Van Khoi, deputy director of Soc Trang Province's Department of Agriculture and Rural Development, said more than VND4 trillion ($190 million) had been lost in his province during the 2011-12 shrimp season because of disease outbreaks.

Among Delta provinces, Soc Trang has suffered the heaviest losses from disease outbreaks during the 2011-12 season.

Vu Van Tam, deputy minister of Agriculture and Rural Development, agreed that the seafood sector had experienced disease outbreaks and a price decline for tra fish.

He said the ministry had asked the Prime Minister to issue a decree on the managing and exporting of tra fish.

The government has agreed with a request from the Ministry of Agriculture and Rural Development to help the sustainable development of shrimp production and exports by allocating more money for promotions and new programmes to develop aquatic strains.

Besides the State investment for irrigation and infrastructure for the seafood sector, Tam said that more funds should be sought from other investors, including official development assistance loans, foreign direct investment and other international loans.

Vietnam to increase garment and textile exports

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

Le Trung Hai, Deputy Director General of the Vietnam Textiles Group (Vinatex), said the sector will spare no effort in achieving an export target of US$17-17.5 billion in 2012 and $20 billion in 2013.

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

According to Hai, 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 in the market.

In particular, Vietnam’s hosting of the 2012 annual global conference of the Textile Manufacturers Association from November 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.

According to economic experts, the trade agreement partners across Asia and the Pacific will change the global textile trade. America is considered the largest textile consumer in the world with orders of approximately $100 billion a year, of approximately $500 billion a year of global textile consumption. That will open up huge opportunities for Vietnam's garment sector as Vietnam is one of the nine current members of the TPP.

The fact that textile export growth rate reached 25-30 percent in recent years has created a new step for Vietnam's garment and textile sector.

Besides, surplus value also increased, accounting for 40 percent of the total export value of textile and apparel industry which has become one of the country's key export sectors. Garment export value in the first nine months of 2012 reached $12.6 billion, up 7.4 percent from the same period in 2011.

In particular, exports to the U.S. market reached $5.6 billion, up 8 percent; to the EU it was $1.81 billion; to Japan $1.45 billion, up 18.7 percent; to South Korea $748 million, an increase of 18.5 percent compared to the same period in 2011.

Despite the world economic downturn, orders from Japan, South Korea are still high thanks to incentives from the bilateral and multilateral trade agreements between Vietnam, ASEAN, Japan and South Korea.

Currently, South Korea has become the 4th important export market for Vietnamese garments.

Ban on gold deposits to be upheld

The State Bank of Viet Nam has indefinitely extended the deadline for banks to cease accepting gold deposits in a bid to ensure the liquidity of the banking system in the remaining months of the year, State Bank deputy governor Le Minh Hung said on Thursday.

Under Circular No 12, previously issued, commercial banks were to have ceased accepting gold deposits from the public in the form of short-term certificates and pay all gold back to depositors no later than November 25.

However, while banks have bought up around 60 tonnes of gold to date, they were still short of the amount needed to repay depositors by an estimated 20 tonnes, according to State Bank figures.

If the November deadline remained in place, banks would be forced to use available capital to buy up the necessary gold – at the same time that capital demands were surging sharply in the final months of the year ahead of the lunar new year holiday, Hung said.

"This extension will avoid putting pressure on some banks in the system that might face liquidity difficulties in the last months of the year," he said.

Once banks stopped accepting gold deposits, the Government would no longer intervene directly in stabilising the gold market, but would only participate in the market as a trader, he added.

Panama offers gateway to Latin America

Panama will be an effective gateway for Vietnamese goods to penetrate into a huge Latin American market with a population of 600 million, Ricardo Martinelli, President of the Republic of Panama, told a business conference yesterday in Ha Noi.

The president said he believed that given its position as the world's leading rice exporter and the second biggest coffee provider, Viet Nam would easily dominate Panama's market.

He called for Vietnamese enterprises to bring their business to Panama, home to the second largest free zone in the world after Hong Kong and the Panama Canal, the main international trade engine.

The bilateral relationship between Viet Nam and Panama has developed significantly, with two-way trade reaching an average value of US$250 million in the past few years, said Vu Tien Loc, chairman of the Viet Nam Chamber of Commerce and Industry.

The trade value surpassed $120 million during the first half of this year thanks to popular Vietnamese export items such as wood, footwear, agricultural machines and handicrafts.

In term of investment, Panama now has nine projects in Viet Nam with capital totalling above $50 million.

These figures, however, were yet to match the vast potential and expectations of the two countries, Loc said.

The biggest barriers hampering bilateral co-operation were significant physical distance, differences in language and customs, inadequate information about each others' market and business opportunities and limited understanding between the two business communities.

Loc said he hoped that the Panamanian President's official visit to Viet Nam would help open a new page for the relationship between the two nations, creating a valuable chance for businesses to seek co-operation opportunities.

During yesterday's event, Vietnamese companies expressed their interest in procedures to establish representative offices in Panama, asking about the country's regulations for imported seafood (especially tra fish) as well as business opportunities in tourism and logistics as well as oil and gas.

Industrial output rises 4.5% in first 10 months

The nation's industrial production increased 4.5 per cent in the first 10 months of this year compared to the same period last year, announced the General Statistics Office (GSO).

The figure represented a slight slowdown from the 4.7-per-cent growth in industrial output recorded in the first eight months of this year, and was about half of the rate of growth seen in 2011, said GSO economic expert Vu Quang Ha.

The slowed growth rate was mainly due to low consumer demand, high inventories of unsold goods, and a reduction or temporary halt in production by some enterprises, Ha said. Inventory indices alone in the first 10 months of the year were at 20.3 per cent, he noted.

The production fell 16.2 per cent for motor vehicles, 9.9 per cent for garments, and 7.1 per cent for cement.

However, some industrial products managed to achieve increases in production. Production surged 76.2 per cent for batteries, 59.4 per cent for shipbuilding and components, 51.6 per cent for telecommunications equipment, and 21.2 per cent for electronic components. Sugar production also rose by 15.2 per cent.

Among specific industries, electrical generation and distribution grew by 12.8 per cent during the 10-month period, while crude oil production grew by 12.1 per cent, water supply and treatment by 8.7 per cent and the mining industry by 3.8 per cent.

The manufacturing and processing industries accounted for 70 per cent of the total industrial production.

Phu Quoc fish sauce wins Vietnam's first origin recognition from EU  

Fish sauce from Phu Quoc island has become Vietnam’s first product to qualify for the European Union’s Protected Designation of Origin.

Vietnam News Agency reports that the European Commission signed the decision on October 8, and it will take effect in 21 days' time.

Jean-Jacques Bouflet, Minister Counselor, Head of Trade & Economic Affairs of the EU Delegation to Vietnam, told Tuoi Tre newspaper that the recognition promises a new big market for the fish sauce.

Phu Quoc fish sauce is famous in Vietnam but few people outside knew about it, he said, and now it is accessible to around 500 million people in Europe who would understand that it has the distinctive quality and characteristics of Phu Quoc island.

They may not buy the sauce immediately since that depends on consumption habits and Vietnam’s marketing efforts, but the product would be available at supermarkets across the continent instead of just ones meant for the Asian community, he said.

Protected Designation of Origin status is conferred on products whose entire production happens in a specific area, place, or country and whose quality or properties are significantly or exclusively determined by the geographical environment, including natural and human factors.

The recognition makes the fish sauce the 11th such product from outside Europe, after Colombian coffee, Darjeeling tea from India, and eight products from China.

Phu Quoc island lies off Kien Giang Province, and is home to the country's most famous fish sauce, which is made by fermenting fish, usually anchovies, with sea salt and used as a condiment in various cuisines.

The Phu Quoc Fish Sauce Association submitted its application in 2009 after many foreign firms produced fake Phu Quoc fish sauce and sold it in the EU.

Bouflet said the producers had to prove that theirs stand out from other fish sauce products.

It is a recognition for the whole community of fish sauce producers on the island, he said.

Vietnam should try the same for its coffee, given that it is the world’s second largest coffee exporter.

Producers in Buon Ma Thuot town in the Central Highlands, for instance, should be protected so that they can develop their brand, the counselor said.