BUSINESS IN BRIEF 13/1
Pilot program to train nurses for work in Germany

At a press briefing in Hanoi on January 9, organized by the Ministry of Labor, Invalids and Social Affairs and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), a pilot program was introduced to send Vietnamese nurses to work in Germany.

Andreas Schneider, Deputy Country Director of GIZ in Vietnam said at the press briefing that there was a huge demand for nurses in Germany at the moment.

Accordingly, GIZ and the Department of Overseas Labor Management under the Ministry of Labor, Invalids and Social Affairs, will cooperate to send Vietnamese nurses to Germany. Vietnam is the first Asian nation to send nurses to a European country.

Nguyen Ngoc Quynh, head of the Department of Overseas Labor Management, said under an agreement with GIZ, his department will select 120 applicants to learn the German language within six months. 100 nurses will also be recruited for a course in taking care of the elderly in Germany.

Applicants must graduate from nurses training colleges, pursue the   training course for two years, during which they will be provided free accommodation and a stipend of Euro 800 a month and Euro 900 in the second year.

After completion of the course, students will work at a clinic for the elderly for three years at a salary of Euro 1,800-2,000 a month.

Ca Mau households illegally keep wild animals

Thousands of rare animals have been discovered being illegally kept captive in more than 300 households in southern Ca Mau Province.

Local authority inspections over one month found over 5,000 crocodiles and over 7,000 ferrets, lizards, wild boars, snakes and turtles.

People were holding the animals in simple ponds and cages in their homes as a way of attracting income by selling them on to hotels and restaurants.

In 2000, the provincial People's Committee issued a ban on trading, hunting and transporting all wildlife animals. Households wanting to raise crocodiles must register with the authorities and ensure the enclosures meet safety standards.

Pollution continues in Quang Binh

Long Giang Starch Processing Factory in the central province of Quang Binh's Quang Ninh District has been temporarily closed due to water and environmental contamination.

According to the district people's committee, the plant was licensed to process canna starch but produced cassava instead due to the lack of raw material. Two days ago the factory was found releasing untreated waste water into the environment.

Preferential policies attract new businesses to HCM City

As many as around 185,000 businesses had been licensed in HCM City by the end of last year, five times the figure in 2006, according to Nguyen Van Ranh, head of the HCM City Party Committee's Public Relations Department.

The number of businesspeople in the city topped 500,000, accounting for one-third of the country's total, Ranh said at a meeting with the Central Public Relations Committee on Tuesday.

Fully aware that the large number of entrepreneurs in the city form an important force that has made great contributions to the city's socio-economic development for many years, the city has issued many policies to help businesses overcome difficulties, he said.

Last year, the city approved 34 new projects with a total investment of more than VND1.8 trillion (US$86.5 million) as part of its strategy to stimulate purchasing power. Of this amount, VND920 billion ($44.2 million) was provided as loans with preferential interest rates.

"The city is currently considering granting preferential loans to 184 projects worth more than VND523 billion ($25.1 million)," Ranh said.

Municipal authorities have also carried out a price stabilisation programme to help poor people, workers and students have access to reasonably priced products and help businesses clear their inventory at the same time.

To date, there are 4,884 outlets that sell products under the price stabilisation programme that has attracted the participation of 49 businesses dealing in four main categories: essential food items, stationery items for students, milk and pharmaceutical products.

MARD suggests changing import laws

The Ministry of Agriculture and Rural Development (MARD) has asked for permission from the Government to allow the import of frozen white innards again.

Deputy minister of Agriculture Vu Van Tam said the ban on imports of white innards such as cow stomach, intestine and testicles caused difficulties in the country's trade relationships with major partners such as the US, Australia and Poland.

A 2010 decision halted imports of both white and red innards, which include cattle and poultry heart and liver, due to a huge wave of frozen poultry and cattle innards imported to Viet Nam.

One year later, red animal innards were permitted to be imported again. Since then, nearly 1,000 tonnes of frozen red innards have been imported to the country from the US, Australia, Canada, France, Spain and Poland.

Air Mekong to increase flights during New Year

Air Mekong plans to add more flights to meet passenger demand during the upcoming Tet (Lunar New Year) holiday.

Accordingly, it will add 4-8 flights to each day during the weeks before and after the Tet festival, bringing the number of daily flights between HCM City and Quy Nhon to 98 and increasing trips between HCM City and Buon Ma Thuot and Pleiku and between Ha Noi and HCM City to Phu Quoc and Con Dao to over 200.

The airline has denied news that it delayed jet fuel payments to the country's main supplier Vinapco, saying that it always fulfilled contractual terms and its fuel payments were fully guaranteed.

Japan sets quality control standards on coffee imports

The Viet Nam Trade Office in Japan urged local exporters to keep a close watch on coffee exported to Japan, as the country will soon impose tighter quality controls.

The volume of Vietnamese coffee products consumed in Japan increased last year, but Vietnamese enterprises need to follow Japanese regulations closely to continue exporting to the market.

Under Japan's Plant Protection Act, dried coffee beans that have not gone through heat treatment are still considered fresh and must comply with plant quarantine requirements. Quarantine procedures are performed at airports and seaports under the supervision of Japan's quarantine control agencies.

Ground coffee and processed products are not bound by those requirements but are subject to safe quarantine procedures under the country's Food Safety Law.

Vietnamese coffee products exported to Japan also need to have clear origins and must undergo checks for additives, pesticide residues and other substances banned from entering Japan. The export turnover last year was US$160.47 million, up 40 per cent year-on-year.

Posco E&C wins contract to construct steel factory

Posco Engineering&Construction Co, the construction arm of South Korea's largest steelmaker, Posco, has beat 10 other contractors to secure the US$302 million deal to build the Formosa Raw Material Handling Yard in Viet Nam.

Under the contract with Formosa Ha Tinh Steel Corp, an affiliate of Viet Nam's Formosa Group, Posco E&C will build the facility in a steel complex in central Ha Tinh Province.

Construction on the project, which will have an annual production capacity of 7 million tonnes per year of crude steel, will begin in February and finish by January 2015.

Indonesia levies anti-dumping tax on Viet Nam

Cold rolled coil and sheet steel exported from Viet Nam to Indonesia are now subject to anti-dumping taxes ranging between 13.5 and 36.6 per cent, the Indonesia Anti-Dumping Committee (KADI) has ruled.

The sanction concludes an anti-dumping review aimed at steel products imported from Viet Nam, Taiwan, mainland China, South Korea and Japan that was initiated in 2011.

Viet Nam's steel exports to Indonesia in 2010 reached over 920,000 tonnes, an increase of 57.19 per cent over 2009.-

Vietinbank posts profit in 2012

Vietinbank (CTG) estimated it earned over VND8.2 trillion (US$390.4 million) last year, exceeding its annual target by 10 per cent.

The bank's total assets hit VND505 trillion ($24 billion), increasing 9.8 per cent compared to 2011. Returns on equity reached 19.8 per cent, while bad debts accounted for 1.35 per cent of total loans. Last year, the lender's subsidiaries and branches in foreign countries were profitable.

Vietinbank plans to increase its total assets by 15-20 per cent this year and gross profit by 10-15 per cent while keeping bad debts under 3 per cent.-

Logistics firm delists shares

Logistics firm Vinafco (VFC) will voluntarily delist 34 million shares, worth VND340 billion (US$16.1 million), from the HCM City Stock Exchange on January 31.

The company said its revenue in the first nine months of last year dropped 44 per cent to just VND1.56 billion ($74,200) due to the country's economic difficulties. The closing price of its debut year, 2006, was VND30,000 ($1.4), while it closed yesterday's session at only VND7,200 (34.2 US cents).

Data showed that 22 businesses left the stock market last year, while 14 came close to delisting and one was dissolved.

Firms conduct transactions with affiliates

Vinaconex Infrastructure Development and Investment Co (VCH) announced that a major shareholder – Vinaconex Engineering Construction and Investment Co – would sell its entire 49.5 per cent stake, equal to 1.98 million shares, in order to restructure its capital in affiliates.

Meanwhile, sugarcane processor Bourbon Tay Ninh (SBT) will increase its transactions with 10 affiliates this year. The total value of purchasing contracts will not exceed 50 per cent of the company's total assets.

Company reduces dividend payment

Cavico Manpower Services Co (CMS) will pay last year's dividends at 20 per cent compared to the planned rate of 30 per cent. Dividends will begin to be paid on February 5.

In November, CMS decreased its revenue target by 39.3 per cent to VND185.14 billion (US$8.8 million) and profit target by 49.7 per cent to VND19.6 billion ($933,300).

The company's shares finished yesterday's session at their ceiling price of VND11,900.

Credit growth unlikely to increase
 
Banks will struggle to increase credit growth this year, despite looser monetary policies, according to industry insiders.

This year, the State Bank of Viet Nam plans to offer lower interest rates to boost the country's credit growth in several priority industries including production and export. The rate is expected to fluctuate around 11-13 per cent a year.

However, chairman of Vietcombank's Board of Directors Nguyen Hoa Binh told Dau Tu newspaper that the move would not increase lending, as firms still hesitated to use bank loans to enlarge their business and production in the context of high inventory and low consumption.

Binh estimated that Vietcombank's credit growth this year would inch up by only 1 per cent against last year.

Deputy general director of HD Bank Pham Thien Long agreed, saying that this year's credit growth would not change significantly despite the decreased interest rates.

As consumption had not significantly risen, firms would continue to restrict the use of credit loans, Binh said.

Banks have also offered low lending rates to attract solvent borrowers, but their credit growth still remains low. At Eximbank, for example, the lending interest rate was cut to 8-9 per cent per year for solvent borrowers in production and export industries, but the bank is still finding it difficult to attract customers.

Moreover, despite the low credit growth, banks remain reluctant to lend customers with bad debts.

The director of a bank, who preferred to remain anonymous, said that his bank's credit growth plan this year was cautious and focused on dealing with rising bad debts.

SBV has affirmed that it will not set ceiling lending interest rates for all borrowers but plans to implement a ceiling rate of 12 per cent for several priority industries.

Lending interest rates will only decrease further if the country can keep inflation low.

Fund helps to rein in bad debts

The growth of bad debts slowed significantly last year, and risk prevention funds increased, according to the State Bank of Viet Nam.

The bank reported that the fund to resolve bad debts had reached VND78.6 trillion (US$3.75 billion) by December, equal to 58.31 per cent of the total bad debts and an increase of 33 per cent over the total of 2011.

Many credit institutions implemented cost-saving measures and even accepted lower profits to spare money for the fund.

The bank estimated that credit institutions had handled VND45 trillion ($2.15 billion) worth of bad debts.

In addition, the restructuring of nine weak commercial banks was put under close control, and the liquidity of the credit institution system also saw improvements, according to the State Bank.

At a conference held on Wednesday, Prime Minister Nguyen Tan Dung said that banks would focus on resolving bad debts and restructuring the financial system this year, adding that the Government would provide them with financial and legal backing.

Plans for tackling bad debts and setting up an asset management company have been submitted to the Government for comments.

Garment sector sets ambitious goal
 
The garment industry has targeted an export value of US$18-19 billion this year, an increase of 12 per cent over last year, a representative of the leading State-owned clothing manufacturer Vinatex announced.

To reach the target, the industry would focus on increasing the efficiency of its assets, reviewing debt and inventory levels, making more efficient use of investment capital, said Vinatex deputy director Le Tien Truong.

It also would increase market forecasting capacity, as well as strengthen traditional export markets and tap new markets, according to a teleconference yesterday to discuss the industry's production plans for 2013.

The main export markets for Vietnamese garment and textiles continued to be the US, Japan and the EU, all of which were facing ongoing economic difficulties.

Truong said the textile industry and Vinatex in particular maintained stable growth last year despite many difficulties. Last year was the fourth consecutive year in which the garment industry continued to hold the number one position among the nation's exports.

The industry's exports last year reached US$17.2 billion, up 8 per cent over the previous year, and accounted for around 16 per cent of the nation's total export value.

Vinatex's export value alone was $2.6 billion, a year-on-year increase of 16 per cent, Truong said. To achieve these results, Vinatex had focused on improving labour productivity and production efficiency as well as focusing on producing high-value products.

Steel industry suffers slump
 
Sales volume fell for the construction-steel industry last year by about 8 per cent compared to the previous year, according to the Viet Nam Steel Association (VSA).

During the year, members of VSA produced a total of more than 4.5 million tonnes, a year-on-year decline of more than 7 per cent. About 4.48 million tonnes of construction steel were sold last year.

"Last year continued to be a difficult year as everyone continued to reduce their budgets, which led to slow and stagnant production," said Pham Chi Cuong, chairman of VSA.

"The frozen real estate market also had a strong impact on the steel industry, and the construction steel industry faced many challenges last year." he stressed.

"Lower sales meant lower prices with input costs kept changing, with signs of increases. So, many steel manufacturers were forced to cut their output, and some of them went bankrupt," he said.

High inventories also plagued the steel industry last year.

By the end of December last year, construction steel inventory totalled nearly 335,000 tonnes.

"Because of weak management over many years, the output of many manufacturers was much higher than the real demand," Cuong said. "Meanwhile, sales could not recover because of the global recession, leading to high inventories."

The pressure became worse when tariffs fell on imported steel as part of World Trade Organisation commitments in the region.

To escape, many companies found export channels, but still encountered difficulties caused by trade barriers.

Last year, about 2 million tonnes of steel and steel ingots were exported, bringing about US$1.65 billion.

VSA predicted that the challenges of the steel industry would continue this year, as "bad debts of banks and the sluggish real estate market would not be easily resolved in 2013".

Sales this month are also expected to be slower because of the upcoming Tet (Lunar New Year) holiday.

‘Zombies' thrive in Viet Nam

Viet Nam ranks fourth in the world for the highest percentage of compromised computers and hosts 5.6 per cent of the world's spam-sending ‘zombies', according to a new report by global internet security firm Commtouch entitled Internet Threats Trend Report - January 2013.

A zombie is a computer connected to the internet that has been compromised by a hacker, computer virus or worm that can be used to perform malicious tasks under remote direction.

India accounted for 15.6 per cent of zombies during January, followed by China (9 per cent) and Russia (6.4 per cent). However, the percentage of zombies in Viet Nam decreased from 6.5 per cent in December, while Russia's percentage of zombies rose from 5.9 to 6.4 per cent.

Educational and shopping websites were most likely to be compromised with malware, the report said, while pharmaceuticals continued to top the list of spam topics.

Last month, the internet saw nearly 87 billion spam or phishing emails sent worldwide, accounting for 74 per cent of all emails sent. Another 1.9 billion emails were sent daily with attached malware.

Traders exploit Tet specialties for super large profits

Traders in HCM City are earning big profits by driving up the prices of Tet specialties by up to five times their original prices.

A quick survey has found that despite higher production costs, most fruit prices are the same as last year.

Wine gourd shaped grapefruits are sold at VND300,000-700,000 (USD14.3-33.5) each with major outlets in HCM City, Hanoi and central localities.

Vo Trung Thanh, Chairman of Phu Tri A Wine Gourd Shaped Grapefruits Co-operative in Hau Giang Province said, “Prices of grapefruits are the same as or even a bit lower than the previous year. We charge supermarket VND800,000 (USD38.3) each as the highest price. The same prices are applied for traders from Hanoi and HCM City.”

However, prices of such fruits in HCM City are driven up by from two to three times compared to their original prices. A wine gourd shaped grapefruit is sold at as much as between VND2.5 million and VND3.5 million (USD119.8-USD167.7).

Dang, an owner of a wholesale fruit stall at Luy Ban Bich Street in Tan Phu District applies a higher price of VND2 million (USD95.8) each.

He explained that higher selling prices were the result of fewer supply triggered by unfavourable weather, along with high transportation and preservation costs. Big orders are discounted 5%.

Giang, who lives in Go Vap District, said that she planned to buy a pair of such special grapefruits as Tet gifts but has decided to leave it after she realised the prices.

According to Thanh, due to unfavourable weather and insect attacks, over 30% of their harvest was substandard. This means that only around 8,000 grapefruits will go on sale.

Apart from the special grapefruits, Phu Tri A Agricultural Promotion Club grows wine gourd shaped watermelons. They expect to harvest around 3,600 such fruits a week before Tet, he said.

Among specialities, gold bullion-shaped melons on which you could read the words “Tài, Lộc, (literally translated as “Talent and Wealth”) are much more expensive as it takes more time and effort to produce one, he noted.

Craftsman Tran Thanh Liem, who designed special melons in Can Tho City’s Binh Thuy District, said a pair of the fruits fluctuates at around VND3 million (USD143.7) in recent years. However, many traders in HCM City have driven up prices to as high as from VND7-8 million (USD335.4-383.3) each.

In addition to special fruits, many people have rushed to find special dishes for Tet.

Dong Tao chickens are very popular. Such chicken originate from the northern province of Hung Yen and have been widely raised in many localities across the countries including Dong Nai Province and HCM City.

Farm owners sell such poultry for VND300,000 (USD14.37) per kilo but several restaurants in HCM City are applying prices of from VND600,000-900,000 (USD28.7-43.1) per kilo. Prices can even reach VND4-6 million (USD191.6-287.5) per chicken.

2012 auto sales at 93,000 units

Auto sale volumes of the whole market reached nearly 10,000 units last month, taking the total sale in all 2012 to 93,000 units, higher than the revised estimate but lower than the 2011 figure, says the Vietnam Automobile Manufacturers Association (VAMA).

Obviously, the local auto market in the final month of the year 2012 showed a slight recovery compared to the preceding months, pushing up the sale volume of the whole year to some extent, VAMA says in a just-released report.

The result is lower than the 2011 figure by some 33% but is much higher than the 81,000 units as predicted by the association earlier.

However, reports of many local auto assemblers show that the majority of auto makers had seen their sale performance tumbling. For instance, Toyota Vietnam in 2012 took the lead in the local market with over 24,900 cars sold but its sales slipped by 16% against 2011. Similarly, Truong Hai only sold more than 24,000 cars last year, a year-on-year fall of 7,800 cars.

GM Vietnam also faced the same woe, having an estimated 5,600 units consumed, plummeting nearly 4,740 units from 2011, and Ford Vietnam only sold 4,790 units, slumping over 3,900 units.

Honda Vietnam had some 1,800 cars consumed, shrinking about 750 units, and Vinastar sold around 1,600 units, down roughly 590 units. Suzuki Vietnam sold some 3,400 units, dropping 935 units while Mercedes-Benz Vietnam sold 1,929 units, a contraction of 49.

Among 93,000 units sold out in 2012, VAMA members had nearly 80,500 cars consumed, a year-on-year decrease of 27%. The sedan segment suffered the most lamentable sale result, with just about 26,000 units sold, a drop of 36.2% from the previous year, followed by sport utility and multi-purpose vehicles with nearly 17,000 vehicles consumed, dipping 26%. The commercial vehicle segment recorded a sale contraction of 23%, with about 35,500 units sold.

Last year is the most difficult time for automakers, VAMA said, adding most of its members had no other choices but to scale down production as well as launching many promotional programs to lure customers. However, such efforts had failed to work out, forcing the producers to continue offering more attractive sale promotions.

A slew of car producers including Ford Vietnam even accepted operations without profits to survive tough times.

Local firms all consider the protracted economic slump plus the tentative plan to collect vehicular circulation fee on vehicles the main reasons behind the slackened auto demand at home over the past time. On the other hand, the increase of car registration fee in the country’s biggest cities of HCMC and Hanoi last year also pulled auto sales down sharply.

VAMA predicts the 2013 sale volume at about 100,000 units, or a growth rate of 8%.

* Auto assemblers and importers are rushing to launch sales promotions in an attempt to boost demand during the Lunar New Year holiday.

GM Vietnam has announced a program for those buying Chevrolet Captiva cars. In addition to a discount of over VND105 million, customers buying the SUV will be given an overseas trip for two worth VND60 million.

Moreover, within the first two years or the first 50,000 kilometers of travel, owners can have their car parts replaced and repaired for free following the periodic maintenance schedule of the centers authorized by GM Vietnam.

Similarly, Honda Vietnam is awarding lucky gift cards worth up to VND30 million each issued by Vietcombank to those buying Honda Civic cars at its sales agents until February 28. The cards can be used to withdraw cash at ATMs or spent at Connect24 points of sales (POS).

Leading car firm in the local market Toyota Vietnam is carrying out a promotion for the Yaris E. The program worth VND40 million per car lasts until March 31.

Importers are also seeking ways to lure car buyers. BMW Euro Auto has just launched a sales program lasting until the end of this month with customers buying cars in the X series, GT and cab lines receiving 2,013 liters of gasoline, while special lending rates over two years from HSBC are applicable for all products.

Customers buying the Renault Koleos of Auto Motors Vietnam at the two Renault showrooms in HCMC will be given VND100 million as lucky money for Tet. The program will wrap up on February 8.

Small traders get training for better competitiveness

Small traders and managerial stazff of traditional markets in HCMC will get free sales skill training in the period from now to 2015 so that they can better compete with supermarkets under a program managed by the HCMC Department of Industry and Trade.

A cooperation agreement to this effect was signed on Wednesday between the HCMC Department of Industry and Trade, the HCMC University of Economics, the HCMC Women Union and Saigon Thuong Tin Commercial Bank (Sacombank).

Lecturers from the HCMC University of Economics will conduct training courses and Sacombank will finance the program in collaboration with the trade department and the women union.

Small traders and representatives of market management boards will undergo training in market administration and development, financial policies, communication skills, complaint solving techniques, brand building and retail process. Through the training program, small traders will improve their sales skills in order to compete with modern shopping channels.

A similar program called “Professional training for market managerial staff and sales skill training for small traders in HCMC markets” has been carried out since 2009 and was expanded in 2012.

Joint venture to develop twine factory in city

Asia Dragon Cord & Twine Co. Ltd., a member of the 2030 Businessmen Club under the Saigon Times Group, has formed a joint venture with an Australian partner to develop a twine factory worth US$9.8 million.

The joint venture between Asia Dragon and Tapex of Australia is named Thong Minh Twine Solution Co. Ltd., with its factory to be built in Tan Phu Trung Industrial Park in HCMC’s Cu Chi District.

The twine factory is scheduled to start operation in March 2013. All the products of this factory, including plastic cord and wrapping twine for agricultural and industrial use, will be exported to Australia, Southeast Asia and Europe.

Nguyen Thi Viet Hoa, director of Asia Dragon, informed the joint venture aims to earn some US$5 million in 2013.

Tapex is a manufacturer of artificial grass and plastic cord for agricultural use. It is also a long-time customer of Asia Dragon.

Denmark’s support for aquaculture turns commercial

Instead of providing official development assistance (ODA) capital for Vietnam’s aquaculture sector, Denmark will develop commercial ties between the two countries in this sector from this year.

According to Nguyen Thi Thu Hang from the Embassy of Denmark in Vietnam, this new cooperation model in the aquaculture sector is considered a shift from offering ODA to building a commercial partnership which benefits both sides.

There will be seven Danish enterprises coming to Vietnam in the coming time to introduce clean fish farming models. If Vietnamese enterprises buy such models, they will be offered with financial supports in technology transfer.

If the number of orders buying machines and equipment of Denmark is high, the Danish government and Vietnam will set up Vietnam-Denmark Aquaculture Technology Transfer Center (Vitadec) to be based in the Mekong Delta city of Can Tho.

Vitadec will develop fish and shrimp farming areas using Denmark’s technologies. Besides, the center will offer training courses for Vietnamese enterprises in building material areas meeting international standards such as GlobalGAP (Good Agricultural Practice) and ASC (Aquaculture Stewardship Council).

Denmark offered over US$100 million in ODA for Vietnam’s aquaculture in the 1993-2012 period.

Many SOEs in HCM City have debts tripling chartered capital

There are currently 28 wholly State-owned enterprises (SOEs) in HCMC with debts exceeding their chartered capital by three-fold, said the municipal Department of Finance on Tuesday.

Circular 117/2010/TT-BTC of the Ministry of Finance dated August 5, 2010 stipulates that a company can raise funds for its production and business activities provided that its accounts payable do not exceed three times its chartered capital.

In a report on performances of the city-based SOEs in 2012, the finance department says that eight out of the 28 SOEs with debts tripling chartered capital are large enterprises, including Vissan Company with a ratio of accounts payable to chartered capital at 4.23.

Vissan is applying for chartered capital increase. After doing so, the company will have a debt-to-chartered capital ratio within the permissible range.

Meanwhile, as its funds are appropriated by customers, Hi-tech Park Development Co. Ltd. has to borrow bank loans for operations. As a result, the company’s ratio of debts to chartered capital is pushed up to 3.56.

Remarkably, District 8 Public Service Co. Ltd. has an extremely high ratio of accounts payable to chartered capital at 40.78. Of the total debt of VND921 billion, some VND190 billion is capital contributed to joint ventures, VND193 billion is budget capital given in advance for site clearance compensation and resettlement and VND412.8 billion is down payments of apartment buyers.

Similarly, District 5 Public Service Co. Ltd. has a ratio at 6.64 and District 9 Public Service Co. Ltd. has a ratio at 78.95.

As of December 31, 2012, SOEs under the HCMC government had held a combined inventory value of over VND13.8 trillion, up 5.6% against 2011. Due to the economic woes, many enterprises had slow-moving goods and materials worth VND595 billion, or 3.25 times higher than the same period in 2011.

E-commerce attracts foreign investment

Foreign investors made strong investments into Vietnam’s e-commerce industry in 2012, noted Nguyen Thanh Hung, vice chairman of the Vietnam E-commerce Association.

The industry in 2012 recorded the prominent capital contribution of foreign investors in local trading websites such as Wada.vn, Vn.Hao123.com (Baidu) or Tencent (Wechat), Hung said.

Investors came from many nations including Japan, Russia, China and Germany, and foreign direct investment in the e-commerce sector for the first time was bustling in Vietnam last year. In previous years, foreign companies had tended to make indirect investments by buying stakes in local websites such as Cho Dien Tu, Nhom Mua and Vat Gia via venture funds like VinaCapital or IDG.

However, Hung did not have the specific figure of total foreign investment value in the sector.

The vigorous direct foreign investment into the e-commerce industry shows the attractiveness of the local market, he noted.

The strong growth of foreign investment in local e-commerce has a great meaning to the sector’s development, Hung said.

Foreign investors not only pour money into the target companies but also bring management know-hows and modern technologies, he said. Besides, the presence of foreign investors will heat up the competition among industry insiders, thus benefiting local consumers, he clarified.

In the meantime, Hung noticed that investment into e-commerce business was fairly quiet among local companies. He ascribed the modest investment of local firms to their economic woes.

Vinatex earns huge revenues

Despite a decline in export of textile-garment products to big markets last year and difficulties in the domestic market, Vietnam National Textile and Garment Group (Vinatex) still obtained VND40.786 trillion in revenues, up 16% year-on-year.

At a press meeting held on Tuesday, Le Tien Truong, deputy general director of Vinatex, said that the group’s export turnover earned last year increased strongly to an estimated US$2.6 billion, up 16% from last year and equivalent to last year’s target. However, this is the gross amount which includes the costs of materials imported to process apparel products for foreign partners.

Besides, Vinatex’s estimated domestic revenues reached VND19.7 trillion, which increased by 8% from the previous year and is the lowest rise of the group since 2007.

According to Truong, many member companies obtaining growth of over 12%, including Phong Phu, Hoa Tho, Nha Be Garment, Duc Giang Garment, Nam Dinh Textile and Hung Yen Garment. Meanwhile, other companies such as Tan Chau Garment, Binh Minh Garment, Nam Dinh Garment and Dong Phuong Textile achieved growth of over 16%.

Although it is forecast there will still be numerous difficulties in importing markets and domestic consumption this year, Vinatex targets to achieve a revenue growth of 12% and an export growth of 12% for 2013.

Regarding the overall targets, the textile-garment industry looks to earn US$18.8-19.2 billion in export turnover this year, with the U.S., Japan, EU and Japan as its major markets, according to Truong.

Last year, Vietnam exported US$17.1 billion worth of textile, garment and yarn products, up 8% from 2011.

According to Truong, although foreign markets have reduced imports of textile-garment products, Vietnam still achieved strong export growth of 9.2% in the U.S., 9% in South Korea and 19.3% in Japan.

It is notable that the added value of the textile-garment industry is increasing. Vietnam imported only US$8.8 billion of textile-garment materials last year but exported US$17.1 billion worth, resulting in a trade surplus of US$8.3 billion. However, foreign direct investment (FDI) enterprises accounted for 55% of the country’s total textile-garment export.

Three expressway projects set for 2013 completion

The Ministry of Transport says it plans to complete and put into operation several expressway projects this year, including the Noi Bai-Lao Cai Expressway, the Hanoi-Thai Nguyen Expressway and the HCMC-Long Thanh-Dau Giay Expressway.

The HCMC-Long Thanh-Dau Giay project has been 60% complete in the main section from HCMC to Long Thanh. The contractor now is accelerating progress of construction on the soft-ground area. The project owner Vietnam Expressway Corporation (VEC) plans to continue construction during the week-long Lunar New Year holiday to ensure the scheme will be complete on schedule.

Meanwhile, site-clearance problems of the Noi Bai-Lao Cai Expressway project have already been removed. In the middle of last month, the project had a few sections covered with asphalt and the developer VEC at the end of last month connected both ends of the Lo River Bridge project, one of the two longest bridges on this expressway.

The transport ministry expects to have the project completed at the end of this year.

Another expressway project connecting Hanoi and Thai Nguyen has had its construction pace speeded up since 24 unqualified contractors were replaced. This project is now some 50% complete and it can be accomplished ahead of schedule.

Besides the aforesaid projects, a number of other expressway projects invested by VEC will get off the ground within this year such as the Danang-Quang Ngai Expressway project, the Ben Luc-Long Thanh project and the La Son-Tuy Loan.

Also, the Dau Giay-Phan Thiet Expressway scheme might be kicked off soon under the format of public-private partnership if the project owner Bitexco Group finishes investment procedures on time.

Travel firms offer tours to avoid cold spell in north

Cold weather in northern Vietnam has given travel firms a great chance to sell tours for those wanting to look for warm destinations in southern provinces to avoid the harsh weather there.

According to some travel firms, people in northern provinces, especially in Hanoi, have booked air tickets for the elderly to HCMC for a vacation or bought package tours to Mekong Delta provinces, Nha Trang and Phan Thiet. The number of Tet tours to southern provinces has also increased considerably.

Tran Van Long, director of Viet Media Travel, said that the firm has launched the tour named “southern sunshine” to attract customers in northern provinces. Currently, there are around 25-35 customers from Hanoi booking tours at the company to the southern provinces every day.

With tours of Viet Media Travel, tourists have to pay return air tickets priced at around VND4 million for discounted fares or over VND5 million for normal fares, VND1-1.5 million in service fee for two-day tours to the Mekong Delta or over VND2 million for three-days tours to Phan Thiet.

“At this time last year, we had only 5-7 customers per day but the number of customers is higher this year due to colder weather and promotional Hanoi-HCMC airfares,” Long said.

Similarly, Lien Bang Travelink has an increase of 25% in the number of customers in northern provinces buying seaside tours. Other travel firms having branches in the north such as Vietravel and Saigontourist Travel Service are also advertising their tours to southern destinations.

Doan Thi Thanh Tra, marketing manager of Saigontourist, said that the firm’s three branches in Haiphong, Quang Ninh and Hanoi are focusing on promoting tours to the southern region for visitors to enjoy warmer weather. Customers often book tours to Nha Trang, Con Dao, Phu Quoc, Ha Tien and Mekong Delta provinces.

“The number of customers buying tours is quite high. With the branch in Hanoi alone, there will be an estimate of 4,000 tourists buying Tet tours, up 19% year-on-year,” Tra said.

Coffee prices enjoy good start but uncertainty remains

Coffee prices in the domestic market and on the trading floor picked up in the first week of this year, marking a good start for the industry.

Prices in all markets increased with coffee bean prices in the Central Highlands exceeding VND39,000 a kilo, versus VND38,500 in the preceding week.

However, exporters described the current prices in the local market as “uncertain”. A number of sales agents are willing to buy coffee at VND500-1,000 per kilo higher, while many exporters, including joint ventures with foreign stakes, make perfunctory purchases as they cannot compete with sales agents.

An exporter in Pleiku City, Gia Lai said his company could not compete with sales agents in purchase prices since they bought at high prices and sold at low prices to several enterprises through well-calculated VAT invoices aimed to evade tax obligations.

Similarly, an exporter in Dong Nai said he had refused to buy coffee from many decent traders because the prices they quoted were much higher than the prices of some sales agents that avoided tax through invoice issuance tips. He reconciled himself to buy coffee from the indecent sales agents, as their cheap prices make it easier to sell goods.

“If buying from the righteous ones, we would hardly find outlets when export prices are quite ‘dignified’. As such, domestic prices are in a very dangerous situation, manipulated by fraudulent traders, which can be detrimental to exports,” he lamented.

Export offer prices of the 2.5% broken black coffee were quite stable, standing at US$30-40 per ton, equivalent to the levels in late 2012. This type of coffee often serves as a basis for comparison with other types, so a lot of industry outsiders mistakenly believe that Vietnam’s coffee export prices always have a price differential from the listed prices.

If other types of coffee have better quality than the 2.5% broken black coffee, their export prices will often be higher than the prices listed on the trading floor NYSE Liffe; but if they have worse quality, their prices will be lower than the reference price.

At present, even the normal coffee types have higher prices than those listed on the trading floor. In addition, prices of high-quality types such as black, unbroken, polished and semi-processed coffee are now much higher than the trading floor levels.

Prices on the Robusta coffee trading floor NYSE Liffe London remained contrary last week, when delivery time officially came. However, January prices continued to stay higher than the levels in March, which has become the main trading month.

At present, only firms with goods available at their warehouses and designated by NYSE Liffe can bring their goods to the trading floor for delivery in January with listed prices at US$50 per ton higher than March prices.

In normal conditions, prices in the months of late delivery (March 2013) are higher than those in the months of prompt delivery (January 2013). The price difference is attributed to storage costs for goods owners.

Therefore, when prices are contrary, owners often bring their goods to the warehouses selected by the trading floor to go through quality verification and to sell coffee to the floor when convenient.

Thanks to contrary prices, the inventory volume of coffee certified by NYSE Liffe increased after a long period of decline. The latest report of the trading floor shows that as of December 24, 2012, the unsold volume of Robusta coffee had risen by 1,400 tons to 106,540 tons.

Last Friday, the closing price on NYSE Liffe reached US$1,948 per ton for goods to be delivered in March, US$37 higher than the preceding week. However, because of contrary prices, March prices were some US$49 lower than January prices.

Q1 rice export forecast to be stagnant

Since export orders fall short while supply is abundant, rice export in the first quarter is forecast to be more difficult than in previous years.

At a conference on Monday to review its performance in 2012 and outline a plan for 2013, the Vietnam Food Association (VFA) said rice export would be more challenging this year due to the lack of both government-to-government and commercial contracts. So far, Vietnam has only signed a contract to export over 200,000 tons of 5% broken rice to Malaysia with delivery scheduled for April 2013.

VFA chairman Truong Thanh Phong predicted Vietnam could only export rice to China this quarter, while the Philippines would likely start importing in April and Malaysia later this year. Therefore, rice export will slow down in the first quarter given the tough competition with India and Thailand.

VFA estimated some 7.6 million tons of rice would be available for export this year, not counting the unsold volume in 2012. The total export volume of 2013 is forecast at 7.5-7.6 million tons, lower than last year’s figure.

In the first quarter alone, rice exports will likely reach 1.4 million tons, including 400,000 tons in January, 400,000 tons in February and 600,000 tons in March.

The U.S. Department of Agriculture forecast global rice trade in 2013 would be around 36.1 million tons, or 6.22% lower than 2012. Though rice output will just pick up 0.06% against 2012, the volume in stock will be large, whereas demand will stay low, leading to a decline in global rice trade.

According to VFA, China will continue to import much this year with a quota of 2.66 million tons of long-grain rice and 2.66 million of low- and average-grade rice. However, because of larger output in 2013 and Chinese yuan depreciation against the U.S. dollar, the neighboring country will likely import more slowly.

China was the largest rice importer of Vietnam in 2012. Apart from China, Indonesia and the Philippines, Vietnam will have a chance to export rice to Japan with its market recently reopened to Vietnam.

Nguyen Van Tien, general director of An Giang Import Export Company (Angimex), said his firm had won a bid to export 30,000 tons of long-grain rice out of the total 182,000 tons that Japan’s Ministry of Agriculture, Forestry and Fisheries called for.

Since late 2012, Japan has invited bids to import an additional 72,000 tons with more requirements for quality. Vietnamese enterprises are pursuing this bid package.

In addition to Angimex, An Giang Plant Protection Joint Stock Company last year exported over 300 tons of broken rice to Japan.

Japan has imported Vietnamese rice since 2003, and Angimex was chosen back then, said Tien. However, in 2007, the participation of too many exporters made it hard to control chemical residues in rice, prompting Japan to stop importing rice from Vietnam.

In 2011, the agriculture ministry and relevant agencies of Japan collected samples of Vietnamese rice for testing. As Vietnamese rice passed the test, Japan decided to reopen its market to Vietnam.

However, rice exported to this market has to satisfy more than 500 quality requirements. “This market prefers high-grade rice. If local enterprises can establish long-term business relations, rice export value will increase,” said Tien.

“To do so, it is a must to control chemical residues from the stage of farming to improve the safety and reduce testing and production costs,” he suggested.

VASEP has evidence against U.S. anti-subsidy lawsuit

The Vietnam Association of Seafood Exporters and Producers (VASEP) is confident it has strong evidence to cope with the anti-subsidy lawsuit against Vietnamese shrimp just initiated by U.S. companies.

Truong Dinh Hoe, general secretary of VASEP, told the Daily right after a meeting of local shrimp processors and exporters on Monday that Vietnam has all proof to fight the accusation by the Coalition of Gulf Shrimp Industries (COGSI) stateside.

“We should understand that disputes among companies in the same industry inside and outside the nation are unavoidable,” Hoe said after several local shrimp processors and exporters gathered together to seek solutions to cope with the anti-subsidy lawsuit that COGSI had filed to the U.S. Department of Commerce (DOC) a few days earlier.

“If COGSI has evidence to persuade DOC to launch the anti-subsidy investigation, VASEP on behalf of local shrimp exporters will also have proof to show their accusation is not right,” he noted.

For instance, he analyzed, Vietnam now is a member of the World Trade Organization (WTO), and subsidies for the local agricultural industry are all subject to the nation’s commitments with WTO.

The local steel industry had earlier faced similar accusations but industry insiders had proven that they had done business without illegitimate State financial assistance. This has encouraged the seafood industry to cope with COGSI, Hoe stated.

Agricultural subsidies and market prices are two different issues, he said, adding prices of Vietnamese shrimp imported into the States are decided by the market, not by local exporters.

If DOC accepts the lawsuit of COGSI and if VASEP members fail to show their innocence, Vietnamese shrimp will be slapped with an anti-subsidy tax rate of 12% stateside, Hoe told the Daily.

DOC will officially announce whether it accepts the case or not on January 17, so it is necessary for local shrimp exporters to anticipate the worst-case scenarios to find out solutions and to estimate budget to follow the case, if necessary, he added.

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