BUSINESS IN BRIEF 21/3

Vietnam’s largest garment IP taking shape

Construction of a US$400 million garment and textile Industrial Park (IP) – the largest in the nation – in Nghia Hung district is expected to break ground in the northern province of Nam Dinh late this year.

This was announced on March 19 at a working session between local authorities and representatives of the project’s main investors, Hong Kong’s Luenthai Holdings Limited, VINATEX investment JSC and China’s Sanshui Jialida Textile Co, Ltd.

At the session provincial authorities were asked to create enough space and the best possible conditions for investors. They were also requested to grant a license to build a power plant and a port to meet the demand for the industrial park’s activities.

Doan Hong Phong, Vice Chairman of the provincial People’s Committee said that the province isfirmly committed to making sufficient space available by no later than the fourth quarter of this year.

Representatives of the investors said that that they anticipate obtaining sufficient space and commencing construction by the end of the year and begin adding secondary investors six months later.

The IP is expected to attract investors from Hong Kong, China and Taiwan in the field of textile, dyeing, leather, garment and support industries.

When fully operational, the IP will create industrial production value of US$3billion - 4 billion each year, contributing tax of some US$300-400 million to the state budget and generating160,000 jobs.

Vietnam imports over 70% of dairy input

The domestic dairy industry currently imports 70-80% of its input materials, creating a strong link between the price of Vietnamese dairy products and corresponding global prices.

In recent times, local dairy producers have, out of necessity, increased prices of products on the back of rising prices in the world market, which is giving rise to concern and the need for an improved alternative strategy for cow breeding.

Since the Prime Minister approved a policy on cow breeding in 2001, Vietnam has domestically met only 28% of its annual total demand for dairy input materials.

Vietnam Animal Breeding Association Chairman Nguyen Dang Vang, directly attributes the local dairy sector’s severe shortage to the sharp increase in dairy prices experienced by the Vietnamese market in recent years.

The State has yet to promptly issue appropriate zoning plans on cow breeding to increase supply sources of input materials for the local dairy industry.

As a result, Vietnam, for the first time, spent in excess of US$1 billion purchasing dairy input from overseas markets last year, he noted.

Cambodia, Vietnam aim for stronger trade links

The Association of Vietnamese Investors in Cambodia (AVIC) aims to lift its foreign direct investment (FDI) in Vietnam to US$4-4.2 billion in 2015.

The figure was released at a meeting hosted by the AVIC in Phnom Penh on March 19 to seek measures for trade promotion and business expansion of Vietnamese firms in the Cambodian market.

The Association is set to achieve a two-way trade turnover of US$5 billion next year, and drive up the number of Vietnamese visitors to Cambodia by 30% annually to 1.6 million in 2015.

Many local businesses showed their keen interest in the fields of agriculture, energy, aviation, finance, banking, health care, and infrastructure development.

The AVIC hoped to boost Vietnam-Cambodia border trade and promote the exchange of goods favoured by Vietnam such as fertilizers, petrol, and energy.

Vietnamese ambassador Ngo Anh Dung spoke highly of Vietnamese businesses’ investment contributions to delivering economic benefits to Cambodian people as well as strengthening traditional friendship, solidarity and cooperation between the two countries.

He asked the AVIC to enhance its role in creating a close link among local investors, and encourage its members to make further contributions to social welfare and community development in Cambodia.

By the end of 2013, the total Vietnamese investment in Cambodia reached over US$3 billion with 128 projects, ranking fifth among the largest foreign investors in the country. Vietnam also became Cambodia’s third largest trade partner among more than 140 countries and territories trading with Cambodia.

Last year, Vietnamese firms raised US$5 million for Cambodia’s social welfare activities.   

Hanoi improves competitiveness ranking

Hanoi climbed up 18 notches from 51st to 33rd place in the latest 2013 provincial competitiveness index (PCI) rankings released on March 20.

The central city of Danang topped Vietnam’s 2013 PCI list for cities with 66.45 points, marking the third time it carved out the lead, though it only placed 12th overall.

A number of provinces in the Mekong Delta region were cited among the top five provinces on the list, including Kien Giang (63.55 points, 3rd) and Dong Thap (63.35 points, 5th).

HCM City – the economic hub of the south – leapt up three steps to make it into the 2013 PCI’s top ten.

The central province of Thua Thien Hue secured 65.56 points and 2nd position, while the northern province of Quang Ninh ranked fourth, eking out 63.51 points.

Many northern mountainous provinces were listed among those with the lowest PCI.   

Hong Kong group opens new garment factory in Vietnam

The Esquel Group of Hong Kong, one of the world’s leading producers of premium cotton shirts, on March 19 inaugurated a new garment factory in Vietnam’s northern province of Hoa Binh.

Speaking at the opening ceremony in Luong Son industrial zone, Deputy Prime Minister Hoang Trung Hai asked the provincial authorities to create favourable conditions to help the factory operate effectively and make quality products, contributing to the integration process of Vietnam’s garment industry.

The US$25 million factory in Hoa Binh is the third built in Vietnam by the Esquel Group, following two others in southern Binh Duong and Dong Nai provinces.

It is expected to produce about 7 million shirts for export a year and create jobs for about 3,000 people living in the province and surrounding areas.

The Esquel Group now earns more than US$200 million each year from exports produced at its factories in Vietnam and generates jobs for 10,000 Vietnamese workers.

Vietnam important in NZ’s cooperation strategy: minister

Vietnam plays a key role in New Zealand’s cooperative strategy with the Association of Southeast Asian Nations (ASEAN), a top New Zealand official has declared.

At his meeting with the Chairman of Ho Chi Minh City People’s Committee Le Hoang Quan, New Zealand’s Minister of Economic Development and Minister of Tertiary Education, Skills and Employment Steven Joyce said that on his visit he aims to seek opportunities to further intensify relations, particularly in economics, trade and education.

Voicing his appreciation of the strong and dynamic development of Ho Chi Minh City, Joyce affirmed that the city and New Zealand still hold great cooperation potential.

He suggested that New Zealand is willing to collaborate with Ho Chi Minh City in education, such as English-language training for the city’s officials, and student exchanges.

Chairman Quan noted that the two countries have enjoyed fine development in their bilateral ties, especially after they lifted their relationship to comprehensive cooperation level in 2009.

The same day, Joyce and his delegation had meetings with businesses from both countries and visited several educational facilities in Ho Chi Minh City.

Vietnam ready to facilitate Swedish investment

Deputy Prime Minister Vu Van Ninh has affirmed the Vietnamese Government’s readiness to offer the best possible conditions for Swedish businesses to run long-term investment in the country.

At a March 19 reception for Swedish Secretary of Foreign Affairs Frank Belfrage in Hanoi, Ninh called on Sweden to further support Vietnam in enhancing its all-round cooperation with the European Union (EU) and negotiating the Vietnam-EU Free Trade Agreement (VEFTA).

The Deputy PM expressed his gratitude to the Swedish Parliament for its approval of the Vietnam-EU Partnership and Cooperation Agreement.

Deputy PM Vu Van Ninh receives the Swedish Secretary of Foreign Affairs.

Congratulating Belfrage as the chair of the Hanoi conference of Swedish ambassadors in Asia, Ninh described the event as a meaningful activity marking the 45th anniversary of Vietnam-Sweden diplomatic ties.

He also thanked the Swedish government and people for their valuable support to Vietnam during its past struggle for national independence and reunification and the current national construction and development.

Ninh expressed his delight at the vigorous development of bilateral cooperation over past years, noting that last year’s two-way trade exceeded US$1 billion, up 24% from the previous year.

The Deputy PM also applauded the Swedish government for encouraging their enterprises to operate in Vietnam, especially in areas that Vietnam demands.

Belfrage, in return, said Sweden pledges to support Vietnam in stepping up its relations with the EU and its VEFTA negotiations so as to push up economic and trade exchange between Vietnam and Sweden and the EU in general.   

Vietnam-EU FTA negotiations due for year-end compeletion

Vietnam and the European Free Trade Association (EFTA) are in Free Trade Agreement (FTA) negotiations and are expected to complete them by the end of this year.

This information was released during talks between Vietnamese Minister of Trade and Industry Vu Huy Hoang and his Norwegian counterpart Monica Mæland in Hanoi on March 19, as part of the Norwegian Crown Prince Haakon Magnus’s official visit to Vietnam from March 18-21 at the invitation of Vietnamese State Vice President Nguyen Thi Doan.

The two ministers agreed that the FTA between Vietnam and the EFTA (comprising Iceland, Liechtenstein, Norway, and Switzerland) will boost bilateral trade ties and create a legal framework for investors from both sides.

Minister Hoang thanked Norway for its continued support and called for relevant parties to speed up FTA negotiations and boost cooperation in hydro-electricity, navigation aquaculture, and support industries.

In response, the Norwegian guest pledged his determination to expedite FTA negotiations between Vietnam and the EFTA, with a view to taking full advantage of trade liberalisation and fostering trade links.

The two sides expressed hope that Vietnam-Norway trade and investment will continue to grow, especially post signing of the FTA.

They also reached consensus on exchange visits to promote mutual understanding and offer further cooperation opportunities in the future.

A round-table discussion is due to be held among senior officials regarding the FTA between Vietnam and this bloc.

SUZUKAKU builds a new factory in Vinh Phuc

Construction work on a new factory started in the northern Vinh Phuc province’s BaThien 2 industrial park on March 19.

The US$5 million project invested by SUZUKAKU Vietnam Co,Ltd aims to produce components for the automobile and motorbike assembly industry for which Vinh Phuc are calling on investment to promote the support industry.

The factory is equipped with the latest technology and a modern environmentally friendly production assembly line.

It is the second Japanese investment project in Ba Thien 2 IP, bringing Japan’s total number of projects in the province to 21.

As scheduled, the factory will begin operation in August 2014 and generate hundreds of jobs for local people.

SUZUKAKU Vietnam General Director Kakunori Suzuki, said that building its latest facility in Vietnam is, to enhance competition with other factories in the US and Japan and contribute to the SUZUKAKU group’s stronger growth.

Ha Hoa Binh, Vice Chairman of the provincial People’s Committee said that Vinh Phuc will make every effort to facilitate SUZUKAKU Vietnam’s operations and co-ordinate with the company to alleviate any difficulties in the process of carrying out the project.

Binh expressed his hope that the company will mobilize all resources to ensure the progress, quality and efficiency of the project.

Japanese firms forge new partnership with Vietnam

A Japanese business delegation visited Ho Chi Minh City on March 19 to seek trade partners in distribution and outsourcing industries.

They attended a trade exchange programme jointly held by the Vietnam Chamber of Commerce and Industry (VCCI)’s HCM City branch and Hiroshima Shinkin Bank of Japan.

Most Japanese delegates demonstrated a keen interest in the areas of manufacturing, steel pipe, electronics, sanitation equipment, construction materials, frozen food, and farm produce.

A representative from Japanese Shin company, revealed a plan to introduce traditional Japanese dishes - Sushi and Odon - to Vietnamese customers.

An official from West Japan Aitec announced his firm wants to cooperate with Vietnamese partners in the solar energy industry.

Many Japanese businesses described Vietnam as an attractive investment destination, and expressed their satisfaction at fruitful trade ties between the two countries.

In the first two months of 2014, the two-way trade turnover was estimated at US$4 billion, up 15.1% from last year’s same period, including US$2.2 billion from Vietnamese exports.

PM works with Party Central Economic Commission

Prime Minister Nguyen Tan Dung met with leaders from the Party Central Committee’s Economic Commission in Hanoi on March 19 to discuss key objectives and orientations for the country’s economic development.

Vuong Dinh Hue, head of the commission announced that in 2013, the commission focused on developing personnel mechanism and implementing five groups of tasks under the assigned mandates.

Notably, delegates focused on giving opinions on the establishment of a steering committee to review the five years since implementing the resolution adopted at the sixth plenum of the Party Central Committee (tenth tenure) regarding the perfection of the socialist oriented-market economy mechanism.

In his speech, PM Dung affirmed the Party’s comprehensive leadership which focuses on developing the economy in the interests of the people.

He hailed the commission’s efforts in revamping personnel mechanism, fulfilling the assigned tasks and making positive contributions to the Party leadership over the past year.

He added that in order to fulfill the role of economic evaluation and consultancy, the commission should encourage scientists and relevant agencies to provide proper recommendations to the Party and the State for the country’s sound socio-economic development.

The Government has always supported and co-ordinated with the commission to boost national economic development, the Government leader added.

He agreed on the establishment of a steering committee and asked the Ministry of Planning and Investment (MPI) to devise orientations for developing a socialist oriented-market economy for a prosperous, civilized, democratic and fair nation.

The PM recognised that one of the most important factors is to obey the laws of the market. In particular, the State should use economic tools to regulate the market to ensure equality and social advancement to support the poor and social policy beneficiaries to reduce the margin between the rich and the poor.

The socialist oriented-market economy mechanism is considered the most important factor in perfecting market economy mechanisms aiming to promote democracy in the national economy, he concluded.

Conference reviews rural infrastructure project

The Ministry of Agriculture and Rural Development and the Asian Development Bank (ADB) held a conference in Hanoi on March 18 to assess the pace of a rural infrastructure project in northern mountainous provinces in 2013.

Reports at the conference said by the end of January 2014, ADB approved all 43 investment reports compiled by the project management board.

Last year, VND206 billion (US$9.8 million) in ADB loans for the project were disbursed, representing 117 percent of the figure registered with ADB and 82 percent of that with MARD, the reports said.

Project Director Tran Van Lam said in 2013, the project accelerated the bidding process for subprojects. However, some irregularities in the process prompted ADB to suspend the bids from November 2013 to January 2014, affecting the project’s pace.

Therefore, in 2014, the project management board will work with the Ministry of Finance and the donor to better the planning, financial management, as well as supervision over the use of loans and work quality, he said.

Meanwhile, MARD Deputy Minister Hoang Van Thang asked beneficiary localities to hasten site clearance progress and complete internal monitoring reports so as to speed up the project in the year.

The 2011-2016 project is benefiting 15 northern mountainous provinces through upgrading their deteriorated but critical rural infrastructure and improving their capacity of infrastructure management.

Can Tho to host Mekong Expo 2014

An exposition entitled – Mekong Expo 2014 – casting the spotlight on Made in Vietnam products and services will get underway in Can Tho City on April 26.

Le Thi Kim Thu, Director of the Can Tho International Exhibition and Fair Company, said the fair aims to provide domestic enterprises an avenue to display their wares to the foreign business community.

Additionally, it hopes to provide both domestic and foreign enterprises an opportunity to expand cooperative relations and in turn boost the economy, she added.

She said on display will be new interior woodwork, agricultural development achievements, trade and service promotion solutions, and industrial products serving agricultural and rural development.

The exposition will run through May 2.

Commercial banks reduce interest rates

Several commercial banks have cut their reward and lending interest rates after the State Bank of Vietnam announced reduction in several management interest rates on March 18.

The commercial banks have reduced the reward interest rates by 0.4-0.6 percent per year.

Asia Commercial Banks announced savings rates at 5.9-6 percent per year for 1-3 month terms, a decrease of 0.3-0.45 percent. The rate for 12-24 month terms falls from 8.2 percent to 8 percent per year.

Export Import Bank reduced the reward interest rate from 6.6 percent to 6 percent for 1-3 month terms, and from 7.5 percent to 7.3 percent for a one-year term.

Bank for Investment and Development of Vietnam cuts the rate to 5 percent for one-month terms, 5.5 percent for two-month terms, 6 percent for 3-5 month terms, 6.5 percent for 6-11 month terms, and 7.5 percent for 12-month terms.

The reward interest rate for USD is capped at 1 percent to individuals and 0.25 percent to businesses.

The Bank for Agriculture and Rural Development applies the maximum reward interest rate of 1 percent for deposits of indefinite terms and less than one-month terms. The rate is 6 percent for 1-6 month terms and 7.5 percent for terms of six months and longer.

Lending interest rates decreased to 8 percent in agriculture and rural areas, exports, support industry, small and medium enterprises, and hi-tech applied companies.

Vietnam Commercial Bank customers are now able to obtain loans with 8 percent interest rate per year in the first six months to purchase apartments in 17 real-estate projects in Hanoi, HCMC, Binh Duong, and Vung Tau.

Subsidized products to have logo in HCMC

Products in the subsidization program 2014 in Ho Chi Minh City will create a logo to facilitate consumers’ awareness of the program’s products, said Deputy Chairwoman of HCMC People’s Committee Nguyen Thi Hong on March 18.

The logo will contribute to advertising the program’s aim raise effectiveness, said Hong. It is also aims to prevent organizations and individuals from taking advantage of the program’s brand.

Department of Industry and Trade and relevant agencies are hosting a contest to choose the best logo for the program.

HCMC will continue to subsidize prices of food products, milk products, school supplies and medicines, she said.

So far, 72 businesses have registered to attend. The total cost for the program will increase VND 6,190 billion (US$ 294 million) over last year reaching VND 8,150 billion (US$ 387 million).

It is expected to start April 1, 2014 and end March 31, 2015.

One of the main supplies will be from agricultural cooperatives which produce vegetables and fruits in Vietgap quality standard.

The program will be conducted in accordance with the ‘Vietnamese Consume Vietnamese Goods’ campaign.

Subsidized products currently account for 25-65 percent of the market demand in HCMC.

Vinatex asks for share sale cash

State-owned national textile and garment group Vinatex has requested that the Vietnamese government allow the group to use the capital raised through selling off the state’s shares following equitisation to bolster productivity.

The textile giant has asked for cash to be used over the next five years to feed its key raw material production projects valued at VND20 trillion ($952 million) which are slated for execution during 2014-2015.

Vinatex is desperate to source funding for these projects that would ease the firm’s reliance on importing raw materials from abroad. The group complained that the projects also would be characterized by a slow return on investment and that they received little support from local authorities due to environmental concerns.

“If our proposal gets the green-light, we could immediately kick-start a raft of important projects, paving the way to shape powerful weaving and dyeing and garment chains in crucial development areas,” said Vinatex’s general director Tran Quang Nghi.

As planned, Vinatex’s initial public offering (IPO) is set for late June. After being equitised, the group’s chartered capital would reach VND5 trillion ($238 million) with 49 per cent of the group’s shares slated to be sold to outside investors, with the state retaining a majority holding.

The group is desperately keen to be prepared to take advantage of the Trans-pacific Partnership Agreement (TPP) currently under negotiations between Vietnam and other 12 TPP member countries which hold 60 per cent (about $12 billion) of Vietnam’s total textile and garment export value.

The stuttering negotiations could provide the grounds for Vietnam to observe the yard-forward principle to benefit from preferences following TPP ratification which is a driving force for the local textile and garment sector to spur material and accessories investment, said Nghi.

Peninsula shows hand on Quang Nam casino

US company Peninsula Pacific is expected to join with Vietnam-focused asset management firm VinaCapital to develop a $4 billion integrated casino resort in central province of Quang Nam.

The link-up became possible after Malaysian casino operator Genting withdrew from the project in 2012.

“After discussions with many companies, VinaCapital decided to partner with casino developer Peninsula Pacific, a firm that has developed seven similar projects in the US,” Quang Nam’s Chu Lai Economic Zone Management Authority said in a document obtained by VIR.

According to the provincial authority, Peninsula Pacific’s executives visited Quang Nam to study the South Hoi An development last November. Further discussions were held in the US a month later between VinaCapital, Peninsula Pacific and provincial leaders.

No details about the timeline or stake held by Peninsula Pacific were revealed in the document. But an official from Chu Lai Economic Zone Management Authority recently told VIR that a new comer could acquire up to an 80 per cent stake in the project, with VinaCapital retaining the remainder.

If Peninsula Pacific’s involvement receives the go-ahead from the government, the construction of South Hoi An would be resumed after a long delay.

VinaCapital and Peninsula Pacific had already committed themselves to building a 500-room five-star hotel as the first phase of the project by the end of 2015, according to the document.

South Hoi An was initially developed by VinaCapital and Genting and was slated to consist of five-star hotels, villas, and electronic gambling facilities. But in September 2012 Genting announced its sudden decision to withdraw from the project despite the already beginning site clearance, forcing VinaCapital to find other partners. To make the project more attractive, VinaCapital proposed the local authorities reduce the land allocated to the project by a third to 1,000 hectares. The developer also asked for an extension to the project’s longevity to 50 years since the new investment certificate was issued, and for permission to expand the scale of gaming facilities, with 90 gaming tables in the first phase compared to 20 tables outlined in the original investment certificate.

Mercedes puts another $10 million into Vietnam

Mercedes – Benz has plans to pour an additional $10 million into Vietnam this year, showing the German automaker’s commitment to long-term investment in the country.

Half the capital increase is slated to go toward a new production line with the other half for dealer network expansions and environmental protection, said CEO Michael Behrens.

He added the high-profiled automaker would this year introduce to Vietnam 18 new models, bringing its total types of car in the country to 40.

The new models include the newly launched A45 AMG, G63 AMG and locally-finished S400L. This means another 15 types will be released between now and year-end.

Behrens said Mercedes – Benz Vietnam saw the number of vehicles sold last year increase by 64 per cent, three times higher than the overall market growth rate.

The company sold 381 vehicles in the first 2 months of this year, according to the Association of Vietnam Automobile Manufacturers. VAMA said automakers in the country sold 7,310 units last month, falling 34 per cent against January but showing amazing growth of 72 per cent year-on-year. The association predicted the 120,000 car purchases this year, 9 per cent higher than 2013.

Mercedes – Benz has been operating and producing in Vietnam for 19 years. It launched a $10 million electrostatic coating factory in the country last year, using its world-class technology.

Lee & Man confirms to open factory in Hau Giang in mid-2015

Lee & Man Paper Manufacturing Limited, one of the largest containerboard manufacturers in China, has yesterday released an announcement confirming it will put the long-delayed paper factories in Hau Giang into operation in mid-2015.

“Given the buoyant development of light industries in countries such as Vietnam, Myanmar and Laos, we are actively investing overseas in the construction of factories to tap the expansion of the Southeast Asian markets. Our paper machines project in Hau Giang, Vietnam is expected to begin operation in mid-2015,” said Raymond Lee, chairman of Lee & Man Paper.

The statement underscores that the Chinese paper manufacturing will implement its previous commitment of launching the production in Vietnam, after it gained strong growth last year.

Lee & Man announced it recorded a total sales volume of 4.94 million tons of products, a total revenue of HK$16.97 billion, a full - year net profit of HK$1.95 billion, and a net profit per ton of containerboard of HK$400, maintaining an overall steady growth in profit.

Lee & Man got investment certificates in 2007 to build two factories in Song Hau industrial park in Hau Giang, which could produce 150,000 tonnes of pulp and 420,000 tonnes of packaging paper. These projects have total committed investment capital at around $600 million. But due to the global economic recession, the paper manufacturer delayed the construction for long time.

17 French livestock breeding firms to participate in ILDEX Vietnam 2014

The International Livestock and Dairy Expo (ILDEX) will welcome 17 French livestock breeding companies to its Ho Chi Minh City event from March 19 to 21.

At ILEX Vietnam 2014 companies in the French pavilion will highlight their expertise and know-how. They are highly regarded by local professionals in the area of breeding facilities and technologies: animal feed, genetic, reproduction, traceability, health, and animal identification.

With over 180 companies from 26 different countries attending the 2012 edition, ILDEX established itself as the foremost breeding tradeshow in Vietnam. Its objective is to bring international expertise to meet local needs. The tradeshow helps businesses worldwide to develop their activities and relationship with livestock breeding, aquaculture and animal products processing, in partnership with local players.

The growth of Vietnam’s agricultural industry, combined with strong domestic and foreign demand, has led local to significantly invest into mechanisation and automation to improve productivity. Contributing to over 33 per cent of the agriculture industry, Vietnam’s livestock offers real opportunities to French exporters.

Can Tho Airport targets domestic flights first

Can Tho City will coordinate with management agencies, provinces and airlines to expand the flight network from Can Tho Airport to the central region and the Central Highlands before opening international flights.

Speaking to the Daily after the conference on promoting air services to Can Tho City on March 17, standing deputy head of the Southwest Steering Committee Nguyen Phong Quang said that Can Tho City would try to open domestic services connecting the city with Danang, Khanh Hoa and Dalat. In the next phase the city would call on air carriers to open international flights from the Mekong Delta city to Siem Reap and Phnom Penh in Cambodia, Bangkok in Thailand as well as to Taiwan and South Korea.

A memorandum of understanding on opening these domestic flights was signed by the Ministry of Transport, the Southwest Steering Committee, the Civil Aviation Authority of Vietnam, Airports Corporation of Vietnam, Khanh Hoa Province, Danang City, Lam Dong Province, VietJetAir, Jetstar Pacific and Vietravel at the end of the conference.

The Ministry of Transport and the Civil Aviation Authority will report to the Government to map out special mechanisms for Can Tho International Airport to attract airlines.

Vo Huy Cuong, deputy head of the authority, said that Can Tho was a new and potential market for international flights from Singapore, Thailand, Malaysia, Cambodia, Hong Kong, Japan, Taiwan, South Korea and China as well as from Europe.

“Can Tho International Airport is able to handle international flights stably and efficiently given the region’s advantages in tourism, culture and history,” he said.

Walter Liang from Taiwan’s Eva Airways said that the airline was operating HCMC-Taipei flights and added that Can Tho-Taipei and Can Tho-U.S. were its targets as Can Tho had good potential for air travel.

The Mekong Delta region welcomed over 20 million tourists last year, with international tourists accounting for 1.6 million. However, the number of tourists visiting the region via Can Tho International Airport was trivial.

“The airport catered to only 238,000 passengers last year, which is too low compared to its annual designed capacity of three million passengers and 5,000 tons of cargo,” Quang said.

According to Deputy Minister of Transport Pham Quy Tieu, Can Tho as the hub of the Mekong Delta has huge economic and tourism potentials. Nevertheless, Can Tho International Airport has handled only some international charter flights taking tourists from Taiwan in the Lunar New Year holidays.

To attract flights to Can Tho, general director of Airports Corporation of Vietnam Le Manh Hung said that the airport would offer airlines with incentives regarding transport, price, fee, customs and immigration.

According to Tran Chi Cuong, deputy director of Danang City’s Department of Culture, Sports and Tourism, there is a high number of tourists from Danang as well as the central region wanting to fly directly to Can Tho instead of flying to HCMC and take a bus to the region. This will cut transport duration and costs by 20%.

As a result, Cuong suggested airlines to consider operating three Danang-Can Tho flights every week by A320 aircraft during peak season and by ATR72 aircraft during low season.

“We pledge to book 20-25% seats on each flight,” Cuong said.

$14.2mln for upgrading Hai Phong logistics

Tan Cang Maritime Services JSC has been licensed to invest VND300 billion (US$14.2 million) to build a centralized logistics zone in the northern port city of Hai Phong.

The logistics zone is located in the MP Dinh Vu Industrial Park, a part of the Dinh Vu–Cat Hai Economic Zone where the port system covering an area of 1,046 hectares.

It includes 640-hectare Hai Phong international gateway port (Lach Huyen port), 251-hectare Dinh Vu port, 144-hectare Nam Dinh Vu port, and 11-hectare Cat Hai port (fishing port).

Following its completion by the third quarter of 2015, this project is expected to handle 250,000 TEU and 1.2 million tonnes of mixed cargo per year. It is also the first domestic investment in the city's economic-industrial zones this year.

The country's international gateway ports will be primarily built in Hai Phong City under the proposal submitted to the Prime Minister by the Viet Nam Maritime Administration (VMA) to develop deep-sea ports until 2020.

Viet Nam's logistics sector will be fully opened to foreign players by 2015. It is estimated that the cargo transported through the country's seaport systems will reach 400–410 million tonnes by then, and increase to 640-680 million tonnes by 2020, according to VMA.

The association pointed out that the country's seaport system still had many shortcomings, such as a lack of comprehensive development and management of infrastructure of seaports, ineffective development, and exploitation of the potential of seaports.

According to Portcoast Consultant Corporation under the Ministry of Transport, the total funding for investment in the development of Viet Nam's seaport system by 2020 is estimated to reach VND200-280 trillion ($9.5-13 billion).

The amount of capital needed for investment in public infrastructure of seaports will account for 45 per cent of the total, worth about VND90-120 trillion ($4.2-5.7 billion). The remaining money will be utilized on the development of wharf infrastructure facilities.

However, there is rising criticism that the presence of too many seaports will not be favourable for the terminal industry of the country. Viet Nam has a coastline of about 3,400 kilometres along one of the world's busiest sea cargo lanes.

VIB honours Excellent Brand of Vietnam 2013

The Vietnam International Bank (VIB) has just conferred the Excellent Brand of Vietnam 2013 award by English-language business magazine Vietnam Economic Times and Ministry of Industry and Trade’s Vietnam Trade Promotion Agency (Vietrade).

Selected from thousands of businesses joining the programme, VIB has fully satisfied the Organising Board criteria such as those relevant to product and services quality, stable growth rate, occupational safety and environmental protection, healthy operation and more.

This is the seventh time the bank got the award which demonstrates its reputation, transparency and trust in the eyes of domestic and foreign organizations and businesses.

The VIB was founded in 1996 with its head office based in Hanoi.

Today, the VIB is one of the leading commercial joint stock banks in Vietnam with its shareholders’ equity of about VND8.6 trillion ($410 million). The bank’s capital adequacy ratio (CAR) stood high at 19.6 per cent, one of the best in local banking system.

Currently, the bank has 3,500 people working at 151 branches and offices in 27 key provinces and cities across the country serving around 1.3 million individual customers, and more than 25,000 corporate and foreign invested enterprises.

Direct contact to open Russian doors

Vietnamese firms should increase direct contact with prospective partners and make use of all opportunities available to increase awareness and acceptance of their products in the Russian market, a senior official has said.

A VnEconomy report yesterday quoted the Vietnamese Trade Counsellor in Russia, Pham Quang Niem, as saying domestic firms should take the initiative and participate in trade fairs and exhibitions held in Russia because businesses in that country preferred direct communication with partners over other modes of contact like the Internet.

Niem said that in order to effectively conquer the market that has great potential, Vietnamese businesses should join hands with Russian firms to establish join ventures in each other's country so as to produce high-quality goods for re-export to Russia.

The Russians, whose incomes have improved significantly in recent years, favoured high quality goods with attractive designs, he noted, adding that Vietnamese firms should respond accordingly.

They should therefore ensure product quality, diversify designs and register trademarks for products which already enjoyed a good presence in Russia, he said.

Besides farm produce like coffee, seafood and cashew nuts, Russia should also be considered an important market for other Vietnamese items such as mobile phones and its components, computers, electronic items, footwear and garments.

Citing figure compiled by the Ministry of Industry and Trade, the report said Viet Nam's exports to Russia have experienced a significant growth of over 62 per cent in 2010-13 period.

In the first two months of this year, Viet Nam shipped goods worth $316 million to Russia, up 11 per cent year-on-year, it said.

A free trade agreement with the Customs Union of Belarus, Kazakhstan and Russia, which is expected to be completed by the end of this year, would present Viet Nam with fresh opportunities to penetrate a large market through preferential taxes, Niem said.

The report cited other experts as saying Russia's strict legal regulations on certifying the origins of animal and plant products were a huge challenge for Vietnamese exporters.

They also said that complicated payment mechanisms, a lack of market information including tariff and non-tariff barriers and convoluted legal formalities had prevented some Vietnamese goods with potential from entering the Russian market.

PJICO offers cover for Vingroup projects

Petrolimex Insurance Corporation (PJICO) will insure three ongoing real estate projects of Vingroup that have a total investment of nearly VND6 trillion (US$285.7 million).

They include Vincom Nguyen Chi Thanh in Ha Noi, Vinpearl Phu Quoc on Phu Quoc Island, and Vincom Ha Long in Quang Ninh Province.

Vinpearl Phu Quoc is an ecotourism site located in the northwest of Phu Quoc Island. It covers an area of 304 ha and runs four kilometres along the coastline. The project with a total investment of VND2 trillion (US$95.2 million) is expected to be inaugurated by the end of this year.

Viet Nam records crab export increases

Since the start of 2014, Viet Nam seafood processors have exported live crabs to the Chinese market valued at nearly US$650,000 per month.

According to the Viet Nam Association of Seafood Exporters and Producers (VASEP), in 2013, China reduced its crab imports from other countries, while Viet Nam remained the key crab exporter to the Chinese market.

As per statistics revealed by the Viet Nam Customs, by the end of last year, the total export value of the country's crabs to China reached US$7.72 million, up 31.6 per cent against 2012. Live crabs accounted for nearly 90 per cent of the export ratio to the Chinese market and the remaining came from processed and canned crabs.

Vietnam’s economic renewal discussed in Austria

Vietnam’s economic renewal process was introduced to Austrian scholars, researchers as well as businesspeople at a recent seminar held in Austria.

Peter Jankowitsch, President of the Austria-Vietnam Friendship Association, which co-organised the event together with the Vietnamese Embassy, said the seminar gives answers to problems facing Austrian businesspeople in Vietnam.

Meanwhile, Vietnamese Ambassador to Austria Nguyen Thiep assured participants that foreign investors in Vietnam are given all favourable conditions.

He said the event is a good venue for Austrian firms which seek to access the Vietnamese market – the emerging one with a population of over 90 million.

At the seminar, Wener Clement, who was once an adviser for Vietnam’s Ministry of Planning and Investment, said the country’s decision to change its economic structure at the 6 th Party Congress was a courageous and sound decision, adding that its experience in economic development is a good reference for developing countries.

Two-way trade between Vietnam and Austria has constantly increased over the past five years, with an average growth of 30 percent.

In 2012, the figure hit 1.222 billion USD, up 195 percent from 2011.

Bonds sales rise despite falling yield

Government bonds reportedly rose in the market, while the yield sank to a nine-month low on March 18 when the central bank cut the interest rates of refinancing and deposits.

Speaking at a press conference on Monday, Nguyen Thi Hong, head of State Bank of Viet Nam's monetary policy department, said that the major buyers of G-bonds were commercial banks which bought VND78 trillion, or US$3.7billion, of the VND95 trillion, or $4.5 billion, bonds issued since early this year.

Hong added that low lending had pushed commercial banks to buy G-bonds.

According to SBV, Viet Nam's credit growth as of March 13 was negative 1.05 per cent against the end of 2013.

Meanwhile, according to Asiabondstoday.com, by March 17 the five-year yield in Viet Nam fell 10 basis points, or 0.10 percentage point, to finish at 7.25 per cent, the lowest level since June 6, 2013. The two-year and ten-year yields also fell, said the website.

The forex market stayed stable in most of the commercial banks. In Vietcombank, the US dollar was sold for VND21,120 yesterday. The central bank still set its reference rate at VND21,036 per US dollar, unchanged since June 28, 2013.

Vietcombank begins consulting project to comply with FATCA

Vietcombank chose to become the first local bank in Vietnam to be compliant with FATCA, which are a set of new US tax laws becoming effective July 1, 2014.

Vietcombank selected consulting firm KPMG Vietnam to advise the bank on the implementation and compliance requirements of FATCA.

In 2010, the U.S. government enacted FATCA (Foreign Account Tax Compliance Act) to prevent and detect tax evasion by US taxpayers hiding income and assets overseas. Accordingly, the FATCA provisions include complex and comprehensive rules that affect almost every financial institution in the world, including those in Vietnam. The Vietcombank compliance project will involve banking, tax, and change management specialists from KPMG.

Apartment developers wring buyers in rash dash for profit

Despite continuing difficulties with huge stockpile of apartments, some real estate developers have marked solid sales over the past few months and are increasing prices.

On March 15, the Hoa Binh Group - developer of the Hoa Binh Green City project in Hanoi - suspended sales in order to adjust prices. Nguyen Huu Duong, general director, said prices would rise by at least 10 per cent, from current VND20.5 million ($976) per square metre of bare-shell apartments.

“The prices at Hoa Binh Green City have been held back and are well below our high level of quality and peace-of-mind. Compared to projects of a similar scale and quality, we invested 25 per cent more to ensure these things,” Duong said. Another reason Duong is confident is the high speed of construction. It is now 70 per cent complete and aims to begin handing over finished units in June this year.

Hoa Binh Green City is not alone in increasing prices. Thang Long Number One, in the west of Hanoi, put them up 9 per cent compared to those quoted in November 2013.

Another Hanoi project, Golden West is also expected to increase its prices by 7 per cent in the coming time.

“The gap [between the old and new price] will recapitalise developers after a long period of little to no returns on their investments,” said Vu Cuong Quyet, general director of Dat Xanh North Joint Stock Company. But Quyet warned that projects planning to increase prices should be on-schedule and of good quality.

Apart from that, these projects seem to be nearly finished and customers are preparing to receive their apartments. “This schedule seems to have convinced customers,” he added.

Nguyen Quoc Khanh, chairman of G5 Real Estate Alliance, said increasing prices were a sign of a warming market but that it was not out of the woods yet. He advised developers to consider raising prices very carefully before making a decision, lest they lose potential clients.

In several other projects in Hanoi liquidity has remarkably increased recently with some speculative investors selling apartments still on paper for profits of VND100 to VND200 million ($4,760 to $9,520), a level rare seen for many years.

According to the Hanoi Construction Department, the apartment price index for the fourth quarter of 2013 for nearly all districts in Hanoi had increased by up to 3 per cent.

Additionally, the number of high quality apartment projects in the inner city still under construction was few. Those projects range in price from around VND30 to VND40 million ($1,428 to $1,900) per square metre.

Sales of high-end apartments in Hanoi have picked up considerably in recent months after a few years in dormancy. Thang Long Number One, for instance, have sold 90 per cent of 970 units compared to just 40 per cent sold a year ago. Cen Group recently sold nearly 50 apartments at StarCity Le Van Luong for average $1,600 per square metre of bare-shell units.

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

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