S Korean expert calls for collaboration in IT software products
The Government wants revenue from the IT industry to reach US$16-18 billion per year by 2020, with local companies capable of making both hardware and software products to operate globally.
He also pointed out the Korean IT industry was still weak in core IT technology, semiconductors and software sectors. The industry in SKorea was still monopolised by large enterprises and by hardware products, he said.
“Thus, to reach the new software convergence in the IT sector, there are two fundamentals, including strengthening IT human resource and the accompanying growth of large- and small- and medium-sized enterprises,” Byeon said.
The current trend in the S. Korean IT industry was the diffusion of global competition followed by merger and acquisition and co-operation. “I believe this will be also the common trend for Viet Nam,” he said.
Korean Trade-Investment Promotion Agency executive vice president Kim Byung Kwon said Viet Nam had the potential to become an economic centre in the region and that the Vietnamese IT industry would boost this development.
“The top priority in developing a substantial IT industry in Viet Nam is a qualified human resource to join the international IT market,” Lai said.
South .Korea ranked first in official development assistance in the IT industry into Viet Nam, Lai said, adding that Viet Nam always welcomed the co-operation from Korean partners.
Deputy general director of the Ministry of Information and Communications IT Department Nguyen Thanh Tuyen said technology parks had been built in major cities and the country was aiming at expanding its market to other Asian countries such as Laos, Cambodia and Indonesia.
Renewable energy fair tipped
Modern technologies, adequate Government incentives and reasonable production costs would help facilitate the development of renewable energy in Viet Nam.
Despite the country’s huge potential for renewable energy development, domestic and foreign enterprises seemed hesitant to invest in the sector because it had higher production costs than traditional energies, she said.
As part of its increasing efforts to boost development of the sector, the agency will join hands with Germany’s International Exhibition and Fair Service Company to organise the 2nd International Exhibition for Renewable and Decentralised Energy Solutions in Ha Noi next March.
“The three-day expo will be a good chance for Vietnamese universities, organisations and businesses to seek co-operation and update their knowledge on advanced technologies and solutions for renewable energy,” Van said.
“The event will also offer Viet Nam a valuable opportunity to introduce its renewable energy advantages and potential to domestic and foreign investors,” she added.
About 200 booths will feature information about technologies and equipment for solar energy, wind energy, hydro-electric power, bio energy, geothermal energy and the conversion and transmission of renewable energy.
A conference discussing methods to export renewable energy will be held on the sidelines of the event.
Renewable energy will account for 4.5 per cent of the nation’s total power supply by 2020 and 6 per cent in 2030, according to a 10-year national power development plan approved by the Prime Minister.
Claims of rice sale to Indonesia refuted
Vice Chairman of the Viet Nam Food Association (VFA) Pham Van Bay has denied a rumour that the Indonesian National Logistics Agency(Bulog) had signed a contract to import an additional 700,000 tonnes of rice from Viet Nam.
Bay said that in the last six months, Indonesia had bought 900,000 tonnes of rice from Viet Nam, bringing the total amount of Vietnamese rice exported to Indonesia to 1,750 million tonnes. About 520,000 tonnes of this has not yet been delivered.
Indonesia is now taking the lead in buying Vietnamese rice. According to some rice exporters, in a volatile rice market, wrong information about Indonesia importing 700,000 tonnes of rice could affect the domestic market.
Earlier, inaccurate information about the domestic rice market caused apprehension for rice exporters.
To stabilise the domestic rice market, the VFA required businesses in the Mekong (Cuu Long) Delta to sell rice 15 per cent cheaper than the market price.
In HCM City, the HCM City People‘s Committee has asked exporters to stabilise rice price at 10 per cent cheaper than the market price. However, the VFA has proposed a 10-15 per cent reduction on domestic rice prices depending on the needs of each area.
According to the VFA, in the last nine months, Viet Nam had record exports of 5.8 million tonnes of various kinds of rice, earning a revenue of US$2.8 billion, an increase of 9 per cent in volume and 24 per cent in value over the same period last year.
Deputy minister backs airline request for higher fare ceiling
A higher ceiling price for air fares would help domestic airlines provide passengers with more flexible ticket price options, said Deputy Minister of Transport Pham Quy Tieu, who heads the Viet Nam Civil Aviation Department.
The ministry last month granted in-principle approval to a proposal for Vietnam Airlines to raise the ceiling by 1.5 times over current fare levels.
The higher ceiling would give the airline some latitude to stagger fares for different flight, giving customers a wider range of choices and allow airlines to shift passengers towards cheaper, undersold flights, saving money for passengers while reducing losses for the airline, Tieu said.
Domestic air fares are already low compared to other countries, and carriers are facing possible losses on domestic routes due to the high cost of fuel and fluctuations in the exchange rate between the Vietnamese dong and the US dollar.
If the ceiling price was not increased, local airlines would have more difficulties in competing during a period in which many carriers have entered the domestic market, Tieu said.
If the Government approves the new fare ceiling, the new fares would be applied next month.
The current ceiling on air fares, excluding value-added tax (VAT) and other fees, is VND863,636 per unit (US$42) for distances below 300km, VND1.1 million ($53) per unit for flights of 300-500km, VND1.48 million ($71) for 500-850km, VND1.9 million ($91) for 850-1,000km, VND2.23 million ($107) for 1,001-1,280km, and VND2.7 million ($130) for flights longer than 1,280km.
Confab promotes investment in SE Asia
The 2nd Annual Southeast Asia Private Equity Investing Conference which closed today in HCM City offered opportunities for global private equity investors and Southeast Asia’s most promising enterprises to discuss future trends in one of the world’s fastest growing regions.
The two-day conference was organised by the Thunderbird School of Global Management in collaboration with the Viet Nam Chamber of Commerce and Industry (VCCI) and Auxesia Holdings. This year’s theme was expansion of investment opportunities in Southeast Asia.
Experts said Southeast Asia had become a leading force in global economics, as 75 per cent of the world GDP comes from emerging economies, including Viet Nam.
The conference welcomed more than 250 experts, senior government officials, global private equity investors, domestic and foreign leading enterprises from the region.
They discussed the Southeast Asia private equity investment regulatory framework, GPs Strategy in investing in Southeast Asia, due diligence and exit strategies, public-private partnership opportunities and fund manager selections.
Sector focuses were real estate, infrastructure, energy, manufacturing, agribusiness and financial services.
On the first day of conference, Hoang Van Dung, deputy chairman of VCCI, said: “Viet Nam would focus on promoting private investment, and investment quality is still our top concern.”
However, in order to attract private investment, the country had to be ready to train high quality human resources and offer infrastructure investment and support industry development.
“Private capital is largely dependent on government efforts to promote general economic development, which is not attractive enough to be undertaken by private initiatives.
“Private capital looks to the Government for the provision of legal and economic protection,” he noted.
Dang Xuan Quang, deputy director of Ministry of Planning and Investment’s Foreign Investment Agency, said: “Viet Nam will have to change investment structure when the country has achieved a medium-income country status.”
Private investment attraction as a replacement for ODA and State capital sources is a key task for Viet Nam, according to Quang.
Viet Nam has been completing a legal framework to improve the investment environment. Sectors such as infrastructure, hi-tech and environment are encouraging areas for private investment.
Viet Nam will also be determined to get rid of ineffective investment projects which waste land sources and cause environmental pollution.
Quang warned that cheap labour costs were no longer an advantage to attract private investment. Investors were now paying increasing attention to high-quality human resources.
Experts call for fresh look at border economic zones
Economists have urged the Government to stop setting up border economic zones and review existing ones that have failed to operate efficiently.
Of 28 border gate economic zones (BGEZs) built since 2004, only a few are successful, while the rest are empty and present a forlorn sight.
A master plan for BGEZ development through 2015 envisaged setting up only 27 of them.
The zones have been set up in 21 out of 25 provinces that border China, Laos, and Cambodia.
More than VND4 trillion (US$194 million), have been spent on building and running them since 2004, with at least VND700 billion ($34 million) spent each year on maintaining them, according to the department which is in charge of implementing the BGEZs development strategy.
The zones have been a failure so far, achieving trade of just $5.44 billion – or just 10 per cent of the country’s total trade — a far cry from the target of $13.5 billion.
Khanh said most of the idle BGEZs were in provinces bordering Laos and Cambodia and hence saw little trade.
Since its opening in 2007 the 70,000ha Bo Y zone in Kon Tum Province on the border with Laos and Cambodia has created only 190 jobs and its annual revenues are just VND6.5 billion (over $315,000).
Around VND80 trillion will need to be invested by 2015 to make the BGEZ a complex comprising an industrial park, high-tech zone, and eco-tourism area.
A Dong Thap resident said more than 1,000 families had been relocated to build Thuong Phuoc BGEZ‘s border market area.
But since its opening in 2004, it has not seen any trade and has laid vacant.
Economists were worried about the concept of building economic zones in border areas, and said this was a waste of public resources.
Dr Vo Dai Luoc of the ministry’s Social Science Institute said investment in economic zones in provinces that did not have much potential for border trade was wasteful, and called for a stop to further development and a review of existing ones.
Economist Le Dang Doanh concurred saying apart from the waste of resources, hundreds of thousands of hectares of farm lands were being taken over. He blamed some provinces for building bigger BGEZs than were necessary.
Others said ineffective BGEZs should be closed down and land restored to farmers.
Many BGEZs were expected to promote Vietnamese products, but have instead been trading in imports.
Duong Thanh Van, head of the Moc Bai BGEZ‘s investment office, said businesses chose to trade imported products since they were exempt from VAT, import duty, and special consumption tax while Vietnamese products were only exempt from VAT.
The Department for Service Economy was set to review the operations of all BGEZs, Khanh said, and recommend changes to the MPI.
Experts said to effectively run BGEZs, it was necessary to have a comprehensive, country-wide development plan rather than separately by a province or city.
One more bank found to breach deposit ceiling
A branch in Ho Chi Minh City’s Tan Binh District of HD Bank was on Tuesday found to severely violate state regulation on deposit interest rate ceiling, the State Bank of Vietnam has said.
The central bank said this was a “deliberate violation” on the scale of the whole system of HD Bank, but refused to elaborate on how much the branch’s offered rate had exceeded the ceiling.
HD Bank’s Tan Binh branch’s director and relevant officials admitted to breaking the interest rate cap.
The central bank said it would continue to inspect other branches of HD Bank.
“This is a serious violation and an unhealthy competition,” it said.
“HD Bank will be subjected to strict sanctions.”
On September 7 the central bank issued a directive, ordering banks to strictly follow the deposit rate regulation by keeping their deposit rate under 14 percent a year.
The fiat also stipulates the strictest penalty for violators such as dismissing their chief executives and banning them from expanding their network.
Earlier on September 15, the central bank also found a similar violation at Dong A Bank’s branch in the southern province of Tay Ninh that offered a deposit interest rate of 15.5 percent a year.
Lam Thi Minh Anh, head of accounting of Dong A Bank in Tay Ninh, was also fired.
The central bank also banned Dong A Bank from opening new branches, transaction offices and ATM booths countrywide for a year starting from September 14.
HCMC slow e-customs clearance worries businesses
Many import-export businesses are encountering delays in clearing customs at Ho Chi Minh City-based Cat Lai Port due to network congestion in e-customs declaration and shortage of equipment for loading/unloading containers.
The businesses said their containers had to stay at the port for several days before the e-customs clearance was completed.
An executive of a customs service provider said his company had received customers’ complaints for being tardy in getting customs clearance.
He said the company had recently made customs declaration for four batches of goods, all of which had encountered problems.
“It now takes us 3 days to get the e-customs clearance while we used to need only 1 day,” he said.
“Whenever we send the e-customs declarations, the network reports error,” he said.
The Internet line was too busy to transmit businesses’ data to the customs center, he said.
He said the congestion was a technical problem and thus was “out of our control.”
The businesses added that some equipment for container loading services at the port had been operating on slow progress, delaying the time for their containers to leave the port by three to four days.
The container lifters occasionally stopped working for even half a day, preventing enterprises from loading or unloading their goods, they said.
A business owner said the loading services were often on slow progress.
“There are cases when the businesses have to wait three days to have their containers unloaded,” he said.
Vietnam attracts foreign telecom investors
Vietnam is now an important focus for global information and communications technology (ICT) companies that are making efforts to increase their presence in the Southeast Asian region, according to telecom experts.
Thirty businesses working in ICT from the Republic of Korea attended a forum on Oct. 6 to seek cooperation opportunities with Vietnamese partners.
In late September, eight French businesses also met with representatives of the Vietnam Posts and Telecommunications Group and Vietnam ‘s military-run telecom provider Viettel – two major names in the Vietnamese telecom sector – to establish trade partnerships in the near future.
In another move, Taiwanese businesses hosted a large-scale Taiwan Excellence program 2011 in Hanoi in mid-July to popularize advances and innovation of the Taiwanese IT sector and to seek potential domestic partners.
In addition to being an investment destination, Vietnam also saw its businesses chosen as partners for IT projects abroad, evidenced by the fact that Algerian Minister of Post, Telecommunication and Communications Moussa Banhamadi proposed CMC Technology Group establish a joint venture to deploy a project on computerizing education programs and developing e-government in the African country.
Garment firms seek a good fit
Garment firms are showing a growing appetite for stitching up expansion deals through acquisitions.
The Vietnam National Textile Garment Group (Vinatex) said this year had seen some of its members enlarging their business scope by buying out under-performing businesses operating in the same field.
“The buyout will help us quickly expand production and push up exports,” said the firm’s general director and chairman Nguyen Xuan Duong.
“Gunyong Garment’s 15,000 square metres with its 4,000sqm workshop area and eight production lines is a big advantage to us, especially given the acquired firm is also based in Hung Yen province,” Duong added.
After taking over Gunyong Garment, Hung Yen Garment’s leadership quickly restructured the acquired firm’s organisational, production and management systems so the firm can resume operations shortly.
The acquired firm currently employs 150 people with monthly incomes averaging VND3.8-4 million ($183-$193).
“As the production space is generous, in 2012 Hung Yen Garment will pump another VND40 billion ($1.93 million) into expanding business and create jobs for over 1,500 labourers as well as hiking production and exports,” said Duong.
A 12,000sqm, three-storey production factory with 24 garment lines will be set up and is slated to come online in the third quarter of 2012.
The acquired firm, founded in March 2005 with VND38 billion ($1.83 million) in total investment, employed around 1,300 labourers in its heyday. But the firm posted only losses from 2008 onwards and could not pay the labourers, making a slew of workers quit their jobs. The firm reportedly owed the employees VND1.6 billion ($773,000) in wages.
Since finalising buyout procedures, Vinatex has injected money into purchasing cutting-edge equipment and upgraded workspace with a view to providing jobs to around 3,000 workers. With over VND50 billion ($2.4 million) in total investment, the new factory will come online in 2012.
“In the face of a bleak economy and spiralling inflation, Vinatex has to delay some capital intensive textile dyeing projects with less than 20 per cent return-on-equity rate to prioritise less costly garment projects. We are also particularly interested in acquiring under-performing firms to boost production,” said Vinatex’s deputy general director Le Tien Truong.
State Audit’s role vital for budget planning: seminarThe State Audit of Vietnam must bolster its capacity in supervising the annual State Budget estimates, as both budgetary collection and expenditure are not yet fine-tuned to practical conditions, officials said at a seminar in Hanoi on Tuesday.
The auditing agency’s deputy head Le Hoang Quan told the seminar that budgetary estimates had not been planned in a fair manner as most State bodies and localities wanted bigger allocations from the State coffers while wanting to contribute less.
Quan was speaking at the seminar held to discuss the State Audit of Vietnam’s role in assisting the National Assembly and provincial People’s Councils to make annual budgetary estimates.
He noted that certain budget expenditures reflected the subsidy mechanism contrary to the country’s commitments to the World Trade Organization, such as financial support for State-owned enterprises and spending for non-productive activities at certain State corporations.
There also exist conflicts when all ministries and localities want bigger shares from the State budget while resources are limited, he said. For this reason, the State Budget revenue is usually planned lower than the capacity, while the budget spending is always estimated higher than available funds, Quan said.
For example, revenues for the State Budget exceeded the estimates by 20.5% in 2007, some 20.6% in 2008, 16.6% in 2009, and over 21% in 2010.
Meanwhile, budgetary allocations tend to be higher than the spending estimated for each year.
Bui Dang Dung, vice chair of the National Assembly’s Finance-Budget Commission, suggested that the State Audit of Vietnam must enhance its capacity so as to better assist the National Assembly in budgetary issues.
Credit institutions asked to stop mobilizing and lending gold The State Bank of Vietnam issued a circular on October 6 banning mobilization and lending of gold by credit institutions.
Under the new circular, a number of commercial banks meeting the central bank requirements will be taken into consideration, for conversion of part of the mobilised gold into cash, to supplement the gold supply in the domestic gold market in order to narrow the gap in price between local and world gold prices.
In addition, commercial banks will be allowed to open accounts in foreign countries to reduce the risk of adverse gold price movement. The overseas gold accounts will help reduce the gold price volatility for commercial banks in Vietnam.
The Circular came into effective from 6 October 2011.
Feed firms face lack of raw materials
A shortage of support industries have caused numerous difficulties to domestic animal feed production, according to the Ministry of Industry and Trade.
The ministry affirmed that due to the shortage, production had mainly depended on imported raw material.
A ministerial report revealed that around 70 per cent of raw material used to produce feed in Viet Nam was imported from the US, India and Argentina.
It was noted that the volume of domestic corn could meet only 70 per cent of demand, soybean supply satisfying only 5-10 per cent.
With the use of imported raw material, domestic feed prices have been affected by world figures.
Furthermore, when importing raw material, feed manufacturers had to pay transportation costs, causing prices to be around 15-20 per cent higher than usual.
To solve the problem, the Viet Nam Animal Feed Association suggested that the Government push the development of raw material locally.
Additionally, the Government was called on to boost technological investment to curb the importation of expensive machines.
Association chairman Le Ba Lich proposed that farmers be given financial support, including low interest rates, to enable them to upgrade store systems and improve the quality of agricultural production.
In this way, Viet Nam could limit its dependence on imported raw material, Lich said.
Currently, Viet Nam has 233 feed manufacturers, of which around 50 are foreign-invested and 11 are joint ventures. The remaining firms are all domestic.
Foreign-invested companies dominate 60 per cent of the entire market share.
While in the first nine months of this year manufacturers managed to produce 7.9 million tonnes of feed, it is expected that, in the last quarter, an additional 4 million tonnes will be added to the figure.
New office space to hit market
With a large chunk of supply set to hit the HCM City property market soon, real estate developers and consultants are forecasting the vacancy rates in the office-for-lease segment to increase next year and rents to fall.
Grade A space saw a 0.2 per cent decline to US$34.13 per square metre per month, Grade B rates fell 1.9 per cent to $18.36, while Grade C was down 2 per cent to $15.33.
Grade A represents more than 304,000sq.m out of the total space of 1.844 million square meters, with Grades B and C accounting for roughly a half each of the rest.
For the nine Grade A buildings in the city, the average vacancy rate is almost 31 per cent. It is 18 per cent for Grade B and 10.2 per cent for Grade C.
“With such a large quantity of vacant space available, Grade A rents could continue to slide,” Bury said.
Truong An Duong, head of research at Savills Viet Nam in HCM City, said around 217,000sq.m of space would be added to the market in 2012, mainly in the central business district and Tan Binh, Binh Thanh and Phu Nhuan.
“The entrance of large new supply and vacancy of 230,000sq.m. will [cause] rents to continue declining,” he said.
Residential sales remain slow in north
Many real estate properties in the north have been offered for sale despite predictions that the market would stay cool until early next year.
Le Xuan Truong, director of BDS Real Estate, said many investors decided to sell because they needed capital for other projects.
However, Truong said most investors must provide quality homes and offer them at reduced prices if they wanted to sell.
And CBRE Viet Nam said that in the third quarter, 1,700 apartments were offered on the Ha Noi market, proving that the property sector still had life. The company expects trading to be hotter in the lead up to Tet (lunar New Year).
Meanwhile, Tran Nhu Trung, research manager with Savills Viet Nam, said the property market was tied to the macro-economy. He added that there were some good signals on monetary policy, but they were not sufficient to boost sales.
The macro-economic situation showed that FDI for property had fallen to the lowest rate in five years. Securities were not attracting investors and gold had many fluctuations in September.
Furniture, craft fair a successPetroleum port opens first phase
The phase cost VND420 billion (US$20.1 million), covers an area of 12ha and features an 80,000 cu.m tank system.
Second phase construction is set to start by 2012, increasing total port capacity to 200,000 cubic meters of petroleum.
Food processors get loan dealThe Viet Nam International Bank (VIB) has provided food processing enterprises with VND2 trillion (US$96 million) at a preferential interest rate of 17.5 per cent per year.
Enterprises are set to enjoy a quick and simple loan process.
The programme is aimed at providing companies with enough capital to promote production until the end of this year.
Rubber export tax may rise
The Ministry of Finance has been mulling the idea of imposing a 3 per cent export tax on rubber products such as latex and synthetics.
Existing export tax rates are between 5 and zero per cent depending on the type of product.
Currently, the majority of domestic latex has been exported with only around 18 per cent used domestically.
Earlier, the Ministry of Agriculture and Rural Development supported a zero per cent tax rate to be applied in specific cases.
Viettel launches warranty systemBkav anti-virus software to debutBkav Corporation will officially roll out its anti-virus (Bkav Mobile Security) software next Monday.
Housing project accepts applicants
Prices are expected to be VND11.9 million (US$572) per square metre, excluding value-added tax. Viet Nam Building Glass and Ceramics Corporation (Viglacera), the project’s main investor, will review the applications from the end of this month until November 14. Approved buyers will then be able to sign purchasing contracts from December 5 to 20.
The project, which kicked off construction last August on 20 per cent of the land at the Dai Mo Housing Complex, includes two apartment buildings reaching 9 and 15 storeys with total floor area of 44.482sq.m. The VND96.1 billion ($4.6 million) project is expected to open by third quarter 2012.
Firms pull out of ‘house day’TA
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