BUSINESS IN BRIEF 25/1

Global gold price spurs local revival

The price of local gold yesterday rebounded by 0.8 per cent to VND35.25 million (US$1,676) per tael, driven by an improvement in global gold prices.

The global price of gold improved as weak equity markets burnished the yellow metal's safe-haven appeal.

Back home, SJC gold gained VND300,000 per tael (US$14.3) to end at VND35.1-35.25 million ($1,671-1,676), its highest closing price in six days. One tael is equivalent to 1.2 ounces.

Since the beginning of this year, the local price has hovered around VND35 million ($1,666) per tael in quiet trading sessions. In addition, retailers kept narrowing the gap between buying/selling quotes to encourage gold purchases.

On , a commodities-tracking website, the price of gold was around $1,257.90 per ounce, nearing its highest level in seven weeks. Reuters news agency reported that gold's move in the previous session was initially prompted by falling equities and news from India, a leading consumer of gold, where the leader of the country's ruling party asked the government to review its tough import restrictions on gold.

Local gold prices plunged 28 per cent in 2013, ending a 12-year bull run and tarnishing the metal's appeal as a hedge against inflation. The fall in local gold prices was partly due to the State Bank of Viet Nam's actions, which included gold auctions.

The central bank sold 1.82 million taels (69.9 tonnes) of gold bars through 76 auctions in 2013. The attempt was to cut local gold prices to VND34.6-34.7 million ($1,647-1,652) per tael by the end of 2013, down VND12 million ($571) per tael, or 24 per cent lower from 2012's level.

Some of the auctioned gold went to credit institutions to help them close their outstanding gold deposits. Another portion of the auctioned gold went to gold firms, which sought to meet market demand.

The central bank plans to continue conducting the gold auctions this year in an attempt to stabilise the domestic market and address the imbalances between supply and demand.

The US dollar traded at VND21,100-21,110 in the black market, down VND20 from Thursday, while commercial banks kept the exchange value of the dollar unchanged at VND21,060-21,100. 

Garment industry needs to cut dependence on imports

Vietnam’s garment sector is too dependent on foreign imports according to Pham Xuan Hong, Vice Chairman of the Vietnam Textile and Apparel Association (VITAS).

Vietnam’s garment exports spiked 16.3% to a record high US$20 billion in 2013,which included garment and textile sales of US$17.9 billion,with the balance coming from ancillary products.

However, major input materials, currently estimated at more than 70%, such as fabrics, labels, zipper pullers, and strings are imported from overseas markets, Hong said,  and Vietnam needs to develop domestic alternatives to ease the situation.

Meanwhile, the Ministry of Industry and Trade (MoIT) predicts that Vietnam’s garment sector will continue enjoying export growth in 2014 thanks to an abundant labour force and effective market expansion.

Vietnamese firms are keeping a close watch on traditional big markets such as Russia, East Europe, the US, Japan and the European Union (EU), while cultivating new markets in Africa and the Middle East.

Taiwan-Vietnam cooperation bears fruit

Cooperation between Vietnam and Taiwan is rapidly expanding across science and technology, labour, education, and tourism.

Bui Trong Van, the Chairman of Taipei’s Vietnamese Culture and Economic Office, reports told a VOV reporter Taiwan remain sone of Vietnam’s most important trade partners.

It is Vietnam’s third largest foreign investor behind Japan and Singapore, with investment capital totallingUS$28 billion at the end of 2013.

Van said two-way trade turnover was estimated at US$12 billion in 2013, a 14.3% annual improvement. Vietnamese exports contributedUS$2.6 billion.

Taiwanese investors poured nearly US$600 million into 66 new projects and 52 expanded Vietnam-based, 5.5% more than a year earlier.

Van thinks cooperation agreements could encourage Taiwanese businesses to increase their Vietnamese investments even further.

Taiwanese investors need to be reassured regarding improvements in Vietnam’s business climate and its various investment incentive policies, he underscored.

Van acknowledged the technical barriers currently hindering Vietnamese exports such as coffee, tea, rice, fruit, and vegetables. “We hope to eventually dominate a 50% share of Taiwan’s dragon fruit market”, he revealed.

Local producers and exporters should grasp every opportunity to expand their agricultural exports to Taiwan, he said.

Vietnam earned high 2013 export revenues from electronics and spare parts, commodities.

Van said Vietnamese guest workers have worked inTaiwan for more than 10 years. More than 136,000 Vietnamese guest workers were employed in Taiwan in 2013, a year-on-year increase of over 50% and representing half of the total number of Vietnamese guest workers presently abroad.

The industriousness and skill of Vietnamese workers has won them the praise of Taiwanese employers despite occasional labour law violations, he noted.

Demand for Vietnamese workers is rising in manufacturing factories, domestic work, and aged care. Taiwan is expected to remain a reliable destination for exported Vietnamese labour.

Taiwan’sUS$400 billion in foreign currency reserves are the fourth largest in the world. It is home to a diverse range of internationally renowned computer, telecommunications, science-technology, and agricultural brands.

It highly values global trade and overseas education. As many as 70–80% of Taiwanese professors have studied in the US, Europe, and Japan.

Taiwan allocates an annualUS$4 billion to innovation projects. Van thinks Vietnam could learn from this to boost its own socio-economic development.

Dak Ha powdered coffee receives UTZ label

Dak Ha powdered coffee of the Central Highlands province of Kon Tum became the first of its kind in Vietnam to receive its certification from the Netherlands-based UTZ Certified, an organisation fostering sustainable farming in the world, on January 22.

After seven years of building its brand name, Dak Ha coffee has been listed among the top 500 products and services of the country and top 20 quality Vietnamese products that are beneficial for public health.

In meeting the quality standards required by the organisation, Dak Ha district encouraged coffee growers and businesses to replace out-of-date coffee production processes with clean technologies that satisfy the Common Code for the Coffee Community (4C) standards applied in Europe.

Internationally-standardised production processes and equipment were put into operation without harming the surrounding environment or health of both labourers and consumers.

In 2013, Dak Ha coffee producers provided 25 tonnes of products for the market. They plan to sell 40 tonnes this year and 100 tonnes by 2016.

Joining the UTZ Certified programme, coffee growers in Dak Ha can reduce total farming costs by 5-7%, increase their production by 5-7%, and sell their products at US$30 per tonne, higher than the current price.

Made in Thailand outlet opens in Hanoi

More than 100 Thai companies and exporters are showcasing their products at the 2014 Made in Thailand Outlet that kicked off in Hanoi on January 23.

On display at over 120 stalls are products of high quality and renowned brands, including food, beverages, household commodities, garment-textiles, jewellery, as well as health care products, decorations and souvenirs.

The fair, the seventh of its kind in Hanoi, is receiving a positive response from local enterprises and customers.

It will run until January 26 at the Friendship Cultural Palace.

Vietnam and Thailand set a target of bringing their two-way trade to US$20 billion by 2015.

In 2012, two-way trade hit over US$8.6 billion. Thailand has about 300 valid direct investment projects in Vietnam with a total registered capital of US$6.12 billion.

Two-way trade turnover between the two countries reached US$7.8 billion between January-October, 2013, up 15% compared to the same period last year.

Positive signals for shrimp exports to Japan

Japan has agreed to increase the maximum residue limit (MRL) of Ethoxyquin, an antioxidant preservative used in fish meal, in Vietnamese shrimp – a move that will benefit shrimp businesses.

In an announcement dated January 21, the Japan Ministry of Health, Labour and Welfare decided to raise Ethoxyquin MRL by 20fold from 0.01ppm (parts per million) to 0.2ppm, and remove regulations on inspections for 100% of shrimp shipments imported from Vietnam.

This demonstrates all-out efforts by Vietnamese management agencies and businesses in controlling Ethoxyquin residue in farmed shrimp.

Japan introduced Ethoxyquin regulations in 2012, putting Vietnamese shrimp exports at a disadvantage. Statistics show the number of Vietnamese shrimp shipments to Japan nosedived from 17 to 4 between 2012 and early 2013.

Shrimp exports to Japan have picked up again since 2013, thanks to Ethoxyquin residue improvements, Thailand’s decreasing supply, and increasing global prices.

Vietnam raked in US$574 million from shipping shrimp to Japan in the first 10 months of 2013, a year-on-year increase of 13%.

Japan Customs reported Vietnam surpassed Thailand to become the world’s largest frozen shrimp supplier in the country in the first nine months of 2013, with 24,806 tonnes, up 8.1% year on year.

Leather, footwear firms set sights on exports

The Vietnam Leather and Footwear Association (Lefaso) is forecasting high export growth of Made-in-Vietnam handbags, suitcases and briefcases for the leather and footwear industry in 2014.

Handbag exports jumped up 26% to US$1.92 billion in 2013, which far outpaced expectations of US$1.7 billion, according to Lefaso.

This year, it is anticipating that handbag exports will surge approximately 30%.

Lefaso regularly tracks information about opportunities in the handbag industry as many foreigners are seeking Vietnamese suppliers, who are benefiting from a world-wide trend away from factories in China and Indonesia.

Lefaso President Nguyen Duc Thuan says eight out of 10 world famous handbag brand names are currently planning to shift their orders to Vietnam, providing a great opportunity for Vietnam to get a firm foothold in the international market.

Vietnamese handbags, suitcases and briefcases are currently available on five continents and are getting a toehold into the higher demand markets.

Currently, the EU accounts for 28% of Vietnamese handbags, suitcases and briefcases, Asia (21%) and northern America (44%).

There is still an untapped high demand for these products in the world market, which enables domestic businesses to break into and expand production, Thuan said.

Some Vietnamese businesses have taken advantages of materials, markets and experiences to invest in handbag manufacturing.

For instance, Thai Binh Shoes is a pioneer in the manufacturing of luxury handbags for world famous brand names, including Coach of the US.

As a group these products have experienced rapid export growth since 2011, earning  US$1.33 billion in 2011, US$1.518 billion in 2012 and US$1.92 billion in 2013.

They have also gained the confidence from domestic customers and around 25 million of the products are sold annually in the domestic market.

Businesses primarily use domestic leather to make student handbags and backpacks and import higher quality materials to make luxury handbags.

In the past, foreign investors have dominated the handbag export market, however, domestic businesses have got into it over the past 2 years and have set their targets to become suppliers to world famous brands.

PPP projects promoted

Major infrastructure projects slated for the public-private partnership model are grabbing the attention of domestic and international investors.

A consortium consisting of Fecon-Cienco 1-Conteccons is the latest investor to show interest in the Ninh Binh-Bai Vot highway project, one of the five major infrastructure projects under the PPP model.

The World Bank is assisting the Ministry of Transport (MoT) to update the project’s proposal. According to the WB, there are several changes compared to the initial proposal.

One major change was that instead of building a six lane route for the 193 kilometre section from Ninh Binh to Bai Vot, the first phase will consist of four lanes and the WB has proposed building the 66km section from Cao Bo to Nghi Son first.

The estimated total investment for the project is set at $1.067 billion with $467 million of state capital, representing 44 per cent, investor equity $156 million, 15 per cent, and commercial loans of $444 million, 41 per cent.

The capital structure is viewed as suitable to the capacity of local investors.

The project will also apply build-fund-operate-maintenance (BFOM), new to Vietnam, through which the investor is paid based on service quality.

According to Deputy Minister of Transport Truong Tan Vien, the MoT has proposed some additions to the BFOM such as state capital surpassing 30 per cent and payment based on service quality of toll collection.

If the proposals get the go-ahead from the prime minister, WB consultants will complete the investment model by 2015 and investors will be selected in 2016.

Another project, a PPP pilot, is the $757 million Dau Giay-Phan Thiet expressway with the pre-qualifying stage to select the project’s second investor to be completed in January. If impediments such as disagreements over toll fees and adjustments of fees over time and parent company guarantees are tackled, construction could be kicked off in the third quarter of next year.

Another project, the Bien Hoa-Vung Tau expressway, has already reached the conclusion of its design phase.

According to Japan International Cooperation Agency (JICA) consultants, the four lane 37.6km section from Bien Hoa to Phu My and 9.2km section from Phu My to National Highway 51 is already set for the PPP model and will see the total investment fund of VND11.6 trillion ($556 million). Construction will be finalised before 2020 with state capital covering 35 per cent.

According to a study by developer CIPM Cuu Long, a VND16 trillion ($762 million), 33km section from Trung Luong to Cai Be of the southern Trung Luong-My Thuan expressway may also interest investors looking at the PPP model if the state guarantees 40 per cent of total investment and permits toll collections along the road, as well as along the Ho Chi Minh City-Trung Luong section.

CIPM Cuu Long said that apart from JICA and Posco E&C who took part in the investment study, other foreign investors have also shown interest in the project such as Moonary Group and Metro Pacific Toolways Corp.

The MoT will soon ink the project’s proposal to send up to the Ministry of Planning and Investment.

Vinacomin’s power plan goes into overdrive

State-run Vinacomin is expected to drastically increase its power generation capability in the coming year, by focusing on a string of key projects.

Vinacomin, the country’s third largest power investor, said the group would accelerate the development of its power plants including the 1,200 MW Quynh Lap I power plant, the 154 MW Dong Nai 5 hydropower plant and 100 MW Na Duong thermal power plant this year.

Le Minh Chuan, general director of Vinacomin said the group’s under-construction Nong Son thermal power plant was on the right track and expected to begin production in the second quarter of 2014. This month, the group signed a site clearance contract for the Vinh Tan 1 thermal power plant after signing a build-operate-transfer (BOT) contract in late 2013.

Besides the development of power plants in 2014, the group also planned to focus on other key projects. For example, the Nhan Co Aluminium project, one of two large-scale bauxite projects approved by the prime minister in November 2007, is scheduled to come online in the third quarter of 2014 in the Central Highlands province of Dak Nong.

Construction began on the project in early 2010, and it is expected to be capable of producing 1,200 tonnes of aluminium per year by 2016.

Similarly, Vietnam’s first ammonium nitrate project in the northern province of Thai Binh, which cost Vinacomin $276 million, is expected to run testing in 2014 and produce 8,000 tonnes of ammonium nitrate per year. Vinacomin reported that after testing in 2014, the plant is scheduled to run commercially by January 2015.

In addition, Chuan said that the group had planned a series of measures to accelerate coal exploitation and improve the quality and efficiency of its operations. Vinacomin aims to mine 35 million tonnes of coal, with 27 million tonnes to be used domestically and the remainder exported.

However, he shared that, “rising coal demands combined with sluggish investment and high input costs pose challenges for the group.”

Vinacomin mined 42.6 million tonnes of coal in 2013, down four per cent, against the previous year. It sold 39.1 million tonnes, of which 27.1 million tonnes was for domestic use.

Deputy Prime Minister Hoang Trung Hai urged Vinacomin to strengthen management and improve its performance to meet the country’s coal demand. Vietnam, a net coal exporter, has to import nearly six million tonnes of the power-generating fuel by 2015 to meet the domestic demand.

Formosa eyes import tax break

Taiwan’s Hung Nghiep Formosa Ha Tinh Steel Limited Company, a subsidiary of Formosa Plastics Group, has proposed it be exempt from paying import taxes on its project.

A Ministry of Planning and Investment (MPI) official told VIR that Formosa Ha Tinh’s proposal was submitted to the prime minister. Now the ministry is also waiting for the government’s guidance on the matter, said the official.

Formosa Ha Tinh now faces entanglement in the import tax policy on its machines and equipment to create fixed assets for its giant steel and port complex in the central province of Ha Tinh.

Specifically, in early November 2013, the company sent a document to the General Department of Customs (GDC) proposing an import tax exemption for its complex. In late November 2013, the GDC released its own document to Formosa Ha Tinh asking the company to contact the MPI to define whether its imported goods are included in the list of construction materials manufactured in the domestic market or not, as the basis for whether it will have to pay import tax.

The project is in a gray area of Decree 124/2008/ND-CP dated December 11, 2008. If its imported goods are included in the list, it will be exempt from import tax in accordance with Circular 04/2012/TT-BKHDT issued on August 13, 2013, according to the document signed by Hoang Viet Cuong, deputy director of the GDC.

The company has worked with the MPI to resolve the issue, but the ministry is now putting the decision to the government.

As of now, the steel complex is considered Vietnam’s biggest foreign-invested project with the registered investment capital of nearly $10 billion. The project is now under construction and is expected to begin operations in 2015.

Ground breaks at new titanium plant

Construction started on Vietnam’s second titanium complex last week, which is expected to lure more investors into Vietnam’s titanium processing industry.

Located in the central province of Binh Thuan’s Thang Hai II Industrial Zone, the $4.76 million titanium processing project is invested in by Binh Thuan Mineral Industry Joint Stock Company and Bao Thu Industrial Development and Investment Joint Stock Company.

Nguyen Ngoc Thanh, deputy head of Heavy Industries Department under the Ministry of Industry and Trade said that when the Thang Hai II complex came online, it would be a breakthrough for Vietnam’s titanium industry. He noted that the complex had been designed to minimise its environmental impact.

General director of Binh Thuan Mineral Industry Joint Stock Company said the complex was expected to produce 180,000 tonnes of titanium slag and 50,000 tonnes of pigment per year. Its exports would be primarily to China, Japan and Korea.

Vietnam’s first titanium complex started construction last year in the Song Binh Industrial Zone, also in Binh Thuan, and is invested in by Binh Thuan Provincial Industrial Zones Management Authority and local Rang Dong Company.

Binh Thuan has titanium reserves of 599 million tonnes, accounting for 92 per cent of Vietnam’s total reserves. The province is also planning to set up Vietnam’s largest titanium processing industrial zone to accommodate large titanium projects which will consist of the Song Binh Industrial Zone and the Thang Hai Industrial Zone.

According to the provincial Department of Industry and Trade, there are currently 17 titanium processing projects in the works at different levels of development including a $350 million complex by Russia’s Geopromining Group, a $650 million facility by Binh Minh Ex-Import Co., a $620 million project by Hanoi Technology Co., and a $130 million complex by Him Lam Minerals JSC.

Vietnam is estimated to have a total reserve of around 650 million tonnes of titanium, accounting for five per cent of the world’s reserves, just behind Canada, the US, Norway, India, and Australia, according to the Vietnam Titanium Association.

Titanium is important in shipbuilding, airplane manufacturing and painting industries, among others. In the past, the lion’s share of the mineral mined in Vietnam was exported, but under a government decision the export of ilmenite ore, the raw material for producing titanium, was stopped. Instead the country will focus on producing refined products such as titanium slag, refined ilmenite, synthetic rutile and Ti02 pigments, all of which have high added value.

Last year the prime minister approved a master plan for the titanium sector, paving the way for investors keen to tap into this lucrative industry.

Under the master plan, the prime minister agreed to zone off areas for the exploration and production of titanium through 2020 with a vision towards 2030. The country’s four titanium ore producing areas will supply raw materials for manufacturing facilities in Thai Nguyen, Ha Tinh, Thua Thien-Hue, Quang Nam, Binh Dinh, Phu Yen, Ninh Thuan and Binh Thuan provinces.

State Audit announces 2014 shortlist

A series of major state firms will be under scrutiny from the State Audit of Vietnam in 2014.

The SAV just announced the 2014 auditing plan for the state budget and financial statements ad activities related to the use of capital and state assets.

Accordingly, it will audit the capital mobilisation and usage of five leasing companies including Agribank, Leasing I and II, Vietinbank Leasing, BIDV Leasing, and VCB Leasing.

In terms of state assets and capital usage, the SAV will audit eight units – the Vietnam National Chemical Corporation, Cement Corporation of Vietnam, Vietnam Pharmaceutical Corporaion, Vietnam Railways Corporation, Vietnam Steel Corporation, Bao Viet Group, Vietnam Social Insurance, and Vietnam Postal Corporation.

In the field of basic construction, some projects included in the audited list are the project for developing road in north of Ha Dong ; project for rehabilitation, upgrading National Highway 8A in Ha Tinh province; the sanitation project in Dong Hoi City ; Hydroelectric Project in Quang Tri province, the projects invested by Vung Ang Project Management Department, project to build the new Highway 3 from Hanoi to Thai Nguyen; the coastal road project in Ninh Thuan and Cai Mep-Thi Vai interport road project.

In the field of basic construction, some projects slated for auditing included a road being constructed north of Ha Dong, a project to renovate and upgrade National Highway 8A in Ha Tinh province, a sanitation project in Dong Hoi City, the hydroelectric project in Quang Tri province, Highway 3 from Hanoi to Thai Nguyen, the coastal road in Ninh Thuan, and the Cai Mep-Thi Vai interport road project.

Big deals still went down to defy real estate downturn

A number of well-heeled developers have cashed in on the downturn of  the real estate market last year to acquire properties.

The Vietnam Infrastructure and Property Development Group Corporation (VIPD) struck the biggest deal last year, spending $470 million on the acquisition of Vincom Centre A from the Vingroup. Vinaconex - Hoang Thanh reached a deal to sell the ParkCity residential project in Hanoi’s Ha Dong district to Malaysia-based Perdanna.

Many other domestic developers have taken over projects, such as the FLC Group which spent nearly VND300 billion ($14 million) for acquisition of Alaska Land project and the Muong Thanh Group’s Lai Chau Construction Company No.1 which bought the VP6 Linh Dam project from Coma 18.

Several deals involved investors from Singapore and Korea.

Lotte Hotels & Resorts Group purchased 70 percent of the Legend Hotel in Ho Chi Minh City from VinaCapital’s Vietnam Opportunity Fund for $62.5 million.

Maple Tree successfully closed the purchase of the CentrePoint office building, located in Ho Chi Minh City for $54 million.

Korea’s CJ bought the Gemadept office building in Ho Chi Minh City for more than $45.5 million.

Experts have predicted that many other transactions could well have taken place without public fanfare. These transactions immensely influenced the real estate market, and have prompted a shake-out of less financially capable investors.

Foreign investors, especially those from Japan, the Republic of Korea, Singapore and China are searching to purchase offices for rent and shopping centres, while domestic investors are concentrating mainly on buying and selling accommodation.

The financial portal Stoxplus predicted the real estate market would continue to see more dynamic transactions, with foreign investors remaining interested in the retail sector. Projects with good locations, transparent legal situations and competitive prices will remain top targets.

According to CBRE associate director of investment Adam Bury, whilst the increase in investment enquiries and activities may sound like a silver lining to a particularly grey cloud for some active within the market, it is worth remembering that investors were also looking to Vietnam for opportunistic returns.

“To generate such opportunistic returns, of over 25 per cent IRR for a project, the price at which an investor enters a project is key,” Bury asserted.

In addition to valuations, there are three other major hurdles which domestic groups must overcome if they are to secure foreign investment. Those projects must have a proven track record, prudent and efficient structuring and transparency to incoming groups.

Ha Noi–Hoa Binh route to be developed

The Transport Ministry proposed to the Prime Minister a new investment plan to build and upgrade roads connecting Ha Noi with northern Hoa Binh Province under a build-operate-transfer contract.

Over VND2.1 triillion (US$102 million) is needed to build a 30-km road running from the Ethnic Culture and Tourism Village in Ha Noi's Son Tay Town to National Highway 6 next to Hoa Binh City.

Another VND341 billion ($16.2 million) is needed to upgrade and expand the section of National Highway 6 that runs from Ha Noi's Xuan Mai Town to Hoa Binh City.

National Highway 6 is the only road connecting Ha Noi to northwestern provinces, but it is deteriorating and too narrow to meet increasing transport demand. However, access to State funding and overseas development assistance is difficult, according to the ministry.

In 2010, developer Ha Noi Import Export Joint Stocks Company (Geleximco) started the VND18 trillion ($857 million) Hoa Lac-Hoa Binh Highway Project with the construction of a six-lane highway that was expected to be completed this year, helping reduce pressure on National Highway 6.

However, Geleximco withdrew from the project last August, citing funding difficulties. At that time, the company had spent VND360 billion ($17.1 million) on the project.

Deputy Transport Minister Nguyen Hong Truong said that the road project would be more feasible if it was developed under a build-operate-transfer contract with all funding provided by the investor.

The investor would be granted the right to place two toll stations on Highway 6. Collection could begin immediately after the upgrade, which is slated for 2015.

One station will be set up on the Hoa Lac-Hoa Binh route with collection starting when it opens in 2017. The ministry proposed the Government apply a fee similar to that of National Highway 1's BOT projects, where the fare exceeded the cap imposed by the Finance Ministry by 3.5 times. With these conditions, investment could be retrieved within 29 years.

Phu Yen to hold Viet Nam seafood festival

The central province of Phu Yen will complete the preparations for a major Vietnamese seafood festival before March 25, provincial Vice Chairman Tran Quang Nhat said at a press conference.

The seafood festival this year will be held under the theme "Viet Nam seafood-integration and development," and will mark the 55th anniversary of the traditional fisheries sector and the 39th anniversary of the province's liberation, both of which fall on April 1.

According to the organisers, the festival, which will be attended by representatives from 28 coastal cities and provinces nationwide, will host several economic activities, such as investment promotion, the joint development of trade and aquaculture, and tourism promotion.

The festival, costing VND10 billion ($470,000), will take place over six days from March 28.

FPT eyes 30% gain in revenue for 2014

The country's software giant FPT has set a target of earning revenue of US$130 million this year, a year-on-year increase of 30 per cent.

Speaking at the company's 15th anniversary in Ha Noi this week, general director Nguyen Thanh Lam said that last year, the company earned $100 million in revenue and employed 5,000 IT workers.

Lam said FPT software plans to earn $200 million in revenue and employ 10,000 employees in 2016.

According to Hoang Nam Tien, chairman of FPT Software, over the past 10 years, the company has seen an average annual growth rate of 49 per cent and 43 per cent in terms of revenue and profits respectively.

The company has branches and representative offices in eight countries. Currently, it is the leading provider of software outsourcing services in Viet Nam and has 219 partners in different countries and territories around the world.

Last year, FPT signed many important software outsourcing contracts with partners such as Recruit Technologies of Japan and a bilateral agreement with Vietnam Airlines to modernise its IT system.

To attain its dream of earning $1 billion in revenue and employing tens of thousands of IT workers, FPT leaders said they will make every effort to take advantage of opportunities offered by traditional clients. The company will invest further in developing technology, including cloud computing, big data, machine to machine (M2M) and SmartTV.

Deputy Minister of Information and Communications Nguyen Minh Hong said that the company's results last year have made it one of the biggest software firms in South East Asia, and noted its important role in the development of Viet Nam's software industry.

However, Viet Nam still needs more companies that have a scale of business similar to FPT Software, which could help maximise the country's software opportunities and make it more competitive on a global scale, said Hong.

On behalf of the State, he said the Ministry of Information and Communications will establish appropriate favourable mechanisms and policies for the further development of the sector to help Vietnamese enterprises participate in larger projects in the near future.

US firm offers advanced cyber protection

US-based Symantec Corp announced early this week in Ha Noi new additions to its leading technologies that protect organisations, especially small and medium-sized enterprises, from targeted attacks.

Defending against sophisticated attacks is now the norm, and it's not just large companies that are being affected. Targeted attacks against businesses with fewer than 250 employees are growing significantly. Globally, small businesses are the target of 31 per cent of all such attacks.

Small companies are an attractive target for cyber criminals as they have fewer security safeguards and often have business relationships with larger companies, which may be the ultimate target of attackers.

"One of the main concerns for Chief Information Security Officers (CISOs) and IT managers today is safeguarding their organisations against evolving targeted attacks which have become an established part of the threat landscape," said Raymond Goh, Symantec's Senior Director of Systems Engineering, Asia South Region.

"The new technologies, combined with our comprehensive solution portfolio, will protect organisations in Viet Nam from threats at the gateway, on the endpoint and in the data centre," he added.

Most targeted attacks are now in the form of malicious but seemingly innocuous documents delivered over email. Each such malicious document, like a PDF, DOC or XLS file, contains an embedded attack. When a victim simply views the document, his computer is automatically and silently compromised.

To deal with this problem, companies could use powerful new innovations including Disarm technology in Symantec Messaging Gateway and Network Threat Protection in Symantec Endpoint Protection for Mac computers.

The new Disarm technology in Symantec Messaging Gateway uses a first-of-a-kind technique to protect companies from targeted attacks.

Traditional protection technologies attempt to scan documents for suspicious characteristics. The problem is that many of these document-based attacks are deliberately crafted so that they don't look suspicious and as a result, they go undetected.

Disarm technology takes a whole new approach. Instead of scanning the document, it essentially makes a digital, harmless copy of every incoming email attachment/document, and delivers this copy to the recipient, rather than the original, potentially malicious document. The result is that the recipient is never exposed to the attacker's malicious attachment, said Goh.

Carriers vow smooth transmission for Tet

The major mobile network operators in Viet Nam have pledged uninterrupted connections during the Lunar New Year, after increasing their network capacities to handle the anticipated surge in texts and calls.

However, they warned mobile users of possible congestion in some locations that witness huge gatherings of people during New Year's Eve, such as firework display locations.

Viettel, the country's largest mobile carrier in terms of number of subscribers, said its mobile users are unlikely to face congestion issues, as a large number of 2G network users had shifted to the 3G network, reducing the overload on the 2G network.

"In fact, over the past two years, the demand for sending mobile texts during the Lunar New Year has reduced following a boom in 3G usage, which prompted us to upgrade our 3G capacity," said the head of Viettel's network department, Tao Duc Thang.

He said the company has focused on upgrading its transmission capacity by installing more BTSs (base transmission stations) in locations where large crowds are expected to congregate to celebrate the New Year.

"We will also use mobile BTSs installed in cars during New Year's eve," Thang added.

The carrier said that its network allows download and upload speeds of up to 21.6 and 5.76 megabits per second, respectively, which will reduce the likelihood of congestion.

MobiFone's deputy general director Nguyen Dang Nguyen said this year, more people will use high-speed data services to share their photos and videos of New Year celebrations, thanks to the popularity of smartphones.

The country's oldest carrier has installed a large number of additional 3G data transmission stations and mobile stations for the busiest time of the year.

New mobile subscriptions in Viet Nam have skyrocketed in recent years, climbing from 19 million in 2006 to 25 million in 2007, 74 million in 2008, 98 million in 2009 and 134 million by the end of 2013.

The country has five mobile network operators: Vinaphone, MobiFone, Viettel, Vietnamobile and Gtel.

Vegetable oil exports set to increase

The domestic production of refined vegetable oil this year is estimated at about 774,000 tonnes, up 7.8 per cent from last year, the Ministry of Industry and Trade has said.

The Ministry also forecast 2015's output at around 850,000 tonnes, 9.8 per cent higher from this year's estimated output.

However, the ministry pointed out that local vegetable oil producers will continue to face hardships due to their heavy dependence on raw material imports.

The industry imports up to 90 per cent of its raw material requirements, and their prices often tend to be volatile.

Local producers have also faced intensifying competition from vegetable oil imports, the ministry added.

During 2011-13, refined vegetable oil production in the country rose 8.3 per cent annually, which is a lower pace compared with previous years, as a result of increasing competition from vegetable oil imports from Malaysia, Singapore, Indonesia and Thailand, which enjoy zero import tax.

As a result, in September last year, the Ministry of Industry and Trade decided to impose a 5 per cent import tax on refined soybean oil and palm oil, noting that the surge in imports is harming the domestic industry. The tariff is expected to gradually ease to 2 per cent by 2017.

The ministry introduced the tax after an eight-month investigation, which showed that the market share of local vegetable oil producers had declined from 52 per cent in 2009 to 27 per cent in 2012, even as demand increased from 100 tonnes to 137.94 tonnes during the same period.

The investigation was initiated in December following an application by the National Company for Vegetable Oils, Aromas and Cosmetics of Viet Nam and seven other producers.

It is the first time the Government has invoked an ordinance on safeguard measures against imports, which it passed in 2002.

Highway 1 to receive $141m

The Bank for Investment and Development of Viet Nam (BIDV) will provide nearly VND3 trillion (US$141 million) in loans to expand a 70-km section of National Highway 1.

The loan will help upgrade the 29-km section of National Highway 1 that runs through the central province of Binh Dinh and another 40-km section connecting Binh Dinh Province's Tuy Phuoc District to central Phu Yen Province's Song Cau District.

For the 29-km expansion, BIDV committed to supply nearly VND1.4 trillion ($65 million) to the Binh Dinh BOT Joint Stock Company. The project will start from the province's Hoai Nhon District in the 2014-16 period. The loan term will be 19 years and three months.

The 40-km project, worth VND2 trillion ($94 million), would be implemented from now until 2015 with a loan term of 14 years and six months.

This is part of a VND30 trillion ($1.4 billion) credit package the bank signed early last year with the Ministry of Transport to fund the Build-Operate-Transfer project to enlarge the highway.

National Highway 1A, which is of significant importance for the country's socio-economic development and national defence, has seriously deteriorated in recent years, leading to congestion and accidents.

Tet holiday sweetens demand for locally made confectionary

Locally-produced products are gradually gaining a firm foothold in the domestic confectionery market as consumers switch their preferences from foreign to domestic items for the Tet (Lunar New Year) holiday.

Domestically-produced items, reportedly, account for 90 per cent of the domestic confectionery market, even though foreign companies have accelerated their market penetration.

The rise of imported confectionery with high quality, beautiful packaging in the domestic market has forced local companies to innovate, seek new technologies and improve productivity and product quality to meet the demands of local consumers.

In particular, Vietnamese businesses have sought to understand local consumer sentiment as they carry out research and develop new flavours to attract customers.

Currently, some of the well-known domestic confectionery producers are witnessing a boom in demand for their products in the run-up to the Tet holiday.

In recent years, the market for festival gift baskets has been increasingly dominated by brands such as Trang An, Kinh Do, Bibica, Hai Ha and Pham Nguyen.

Nguyen Xuan Luan, deputy general director of the Kinh Do Corporation, said that, as of January 6, his company had reached its sales target of 4,500 tonnes for the Tet festival.

These days, Kinh Do is operating at full capacity as the orders from supermarkets have increased in anticipation of higher demand before the New Year festival.

Along with large-scale investments for upgrading the quality and design of its products, Kinh Do Corporation has focused on taking advantage of its distribution channels throughout the country to extend the reach of its direct sales activities, as well as distribute products to rural areas to meet consumer demand for the Lunar New Year, reports online newspaper Dien dan doanh nghiep (Business Forum).

One representative of a famous confectionery producer in HCM City predicted that confectionery consumption would increase strongly as the Tet holiday approaches, adding that his company had raised production capacity by an additional 50 per cent from the previous target.

Tran Thuy Hoa, head of the technology department of the Ha Noi Confectionery Company, noted that this year, the total production of cakes and various kinds of dried and candied fruits was expected to go up to 500 tonnes, 6-8 per cent higher from the same period last year.

She said the figure strongly reflected consumer trends seen earlier this year.

Nguyen Quoc Hoang, deputy general director of Bien Hoa Confectionery Corporation (Bibica), added that nearly 1,300 tonnes of different varieties of cakes, candies and candied fruits, priced at various ranges, are being offered to local consumers since late 2013.

This year, the company's production capacity rose by 10 per cent.

According to several experts in the retail industry, this year, a struggling economy has led to a significant decline in the purchasing power of consumers.

However, professional manufacturers and reputable brands are still the top choices of consumers.

Seaport system set for major upgrade

Transport Minister Dinh La Thang has asked concerned agencies to expedite work on a major project to improve operational efficiency of the No 5 Seaport System to make it a regional entrepot in the near future.

The No 5 seaport system covers all the ports in HCM City and the neighbouring provinces of Ba Ria-Vung Tau and Dong Nai.

The project, which has already been approved by the Government, includes upgrading of the Cai Mep – Thi Vai Port in the southern province of Ba Ria-Vung Tau

The aim of the project is to reduce and eventually stop the dependence on regional entrepot ports like Singapore and Hong Kong to ship Vietnamese commodities to overseas markets, Thang said.

He noted that although several smaller ports under the Cai Mep – Thi Vai Port are operational, commodities were still being transported to old seaports in downtown HCM City.

This was happening because no department or oganisation is directly responsible for managing and operating the shipment process, he added.

The original plan for the Cai Mep – Thi Vai Port was to reduce the use of seaports in downtown HCM City.

To deal with the current situation, the Transport Ministry has suggested several measures including a moratorium, until 2015, on issuing licenses for new container ports for the entire No 5 system, including the Cai Mep – Thi Vai port.

New solutions will be proposed later for the 2015-2018 period.

In making its decision on the entire No. 5 system, the ministry has said it would also takeover decisions regarding the establishment and expansion of ports nationwide. In making its decisions, it will take into account the actual need for seaports, the investment required as well as their suitability with land-use plans, the minister said.

At present, provinces and cities nationwide are allowed to decide on the construction of infrastructure projects in their respective localities.

Thang said his ministry will also try to increase the volume of imported products coming through the No. 5 seaport system, especially through the Cai Mep – Thi Vai Port, while limiting the number of foreign companies that can transport domestic goods to the Cai Mep – Thi Vai Port.

The ministry has, along with the Japan International Co-operation, proposed the revamping of the national seaport authority, giving it new responsibilities and functions.

One major change would be to give the authority an investment management function, based on real market demand as well as the operational capacities of seaports.

The authority will be allowed to collect import and export taxes due on cargo shipments, saving companies a lot of time.

JICA, which has acted as a consultant for the No. 5 seaport system, has suggested the use of smaller ships or boats to transport goods from HCM City to Cai Mep – Thi Vai in a short time to increase the volume of goods that the system handles.

Over the long term, road connections between HCM City and Cai Mep – Thi Vai hve to be improved and all port construction in HCM City stopped, it has advised.

Attracting more industrial investment into Ba Ria – Vung Tau, where the Cai Mep – Thi Vai Port s located, should be another, it has said.

It has also proposed the establishment of a port authority at the soonest.

The Cai Mep – Thi Vai Port should work closely with cargo shipment companies, and take measures to cut costs and increase shipments, JICA has said.

It has said that the authority collaborates with other agencies on the construction of inter-port roads, development of logistics centres, and building more wharves in Mekong Delta provinces to attract more goods for to the nation's port styem.

JICA even suggested that the authority pays to have boats transport goods from neighbouring provinces to the port.

The No. 5 seaport system includes the Sai Gon, Nha Be, Cat Lai and Hiep Phuoc ports in HCM City, including; the Go Dau C, Phu My, Cai Mep, Vung Tau and Song Dinh ports in Ba Ria – Vung Tau; and the Phu Huu, Ong Keo, Go Dau A, B and Phuoc An ports in Dong Nai.

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

Garment industry, shrimp exports, Vinacomin, Formosa, real estate
 
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