Power project receives credit for implementation
A credit contract, worth 3.3 trillion VND (160 million USD), for a 500 kilovolt power transmission project was signed on December 19 in Hanoi.
The contract was signed between the State-owned Vietnam Electricity’s Power Transmission Corp and the Bank for Industry and Trade of Vietnam ( Vietinbank) – Hanoi branch.
The credit will fuel the 500 kV Pleiku-My Phuoc-Cau Bong project, which is part of the Government’s national grid development master plan.
Covering the provinces of Gia Lai, Dak Lak, Dak Nong, Binh Phuoc and Ho Chi Minh City , the project aims to ensure electricity supply to southern areas in the 2014-2015 period, as well as power grid connectivity across Vietnam , Laos and Cambodia in 2015.
The 9.28 trillion VND project is also funded by the World Bank, the Vietnam Development Bank and the Asia Development Bank.
Ministry eyes new fuel tax scales
The Ministry of Finance is considering a more exact way of changing its method of calculating import taxes on gasoline and oil.
This would mean basing calculating petrol and oil import taxes on the average price of every specific commodity for 30 days following Platts Singapore’s information instead of the present system of using WTI prices.
Platts Singapore refers to the mean price of oil trade through Singapore as per the data from Platts, a commodity information and trading company; while WTI refers to West Texas Intermediate crude-oil prices.
The ministry made the suggestion after consulting ministries and key enterprises about a more realistic and detailed import tariff that is closer to developments on the global petrol market.
The ministry said that after using the WTI system to calculate import duty for the last two years, it provided inexact results. Occasionally, the fluctuation of WTI crude-oil prices wasn’t directly proportional to the development of prices for gasoline, kerosene, diesel and mazut oil.
Based on the 30-day Platts Singapore measure, it suggested that gasoline that had an average price of US$70 per barrel and below should be subjected to a maximum import tax of 40 per cent; from $70-90 subjected to a maximum of 30 per cent; from $90-110, subject to a maximum 20 per cent – and from $110-130 to a maximum of 12 per cent. Above $130 per barrell, the tax would be a low 7 per cent.
Import duties for kerosene, diesel and mazut oil would be a maximum of 40 per cent if average prices were below $75 per barrel; and 7 per cent if prices averaged $135 per barrel or higher.
This is different from the current petrol import tariff, which only stipulates taxes for prices ranging from $45 to $95 per barrel and is often adjusted by the ministry when prices are out of this range.
The ministry said the new tax calculating way would help the country assure tax revenues, at the same time maintain reasonable after-tax prices compared to regional levels, which would restrict petrol smuggling.
Seafood firms ask for extension
The seafood industry’s leading trade group is once again urging the State Bank of Viet Nam to give seafood exporters a longer period in which to borrow foreign currency since such loans have been made subject to tighter regulatory restrictions.
The extension would help the seafood industry overcome capital shortages and other difficulties while battling to become more competitive on the global market, said Viet Nam Association of Seafood Exporters and Producers (VASEP) general secretary Truong Dinh Hoe.
The central bank has already granted the industry a similar extension, allowing seafood companies to borrow in foreign currency through the end of this year, instead of complying with an earlier May 2 deadline.
If an additional extension were approved by the central bank, commercial banks would continue to be able to provide seafood exporters with loans in foreign currency, which currently carry low interest rates of 3-5 per cent.
Lending interest rates for borrowers in the seafood industry currently average about 11 per cent per year for loans in domestic currency. The rates outstrip those in other countries in the region, making Vietnamese seafood less internationally competitive.
Due to financial difficulties, the number of tra fish exporters has decreased significantly this year. Only 160 enterprises continued to export the fish, 30 per cent fewer than last year, VASEP said.
Among these processors, only 20 have seen stable export performance this year. These exporters have accounted for 61 per cent of the country’s total tra export so far this year, or a value of US$890 million.
As of mid-November, total seafood export value had reached $5.3 billion. The industry has projected exports for the whole year of $6.2 billion, which would represent a modest increase of just 1 per cent over the previous year. This figure represents a downward revision from a projection of $6.5 billion made earlier in the year.
Sugar smugglers sour local market
The Viet Nam Sugar and Sugar Cane Association has called on the Government to take bolder measures against smuggled imports, saying that smuggling created significant difficulties for domestic sugar refineries.
Roughly 300,000-400,000 tonnes of sugar are imported illegally to the country each year, accounting for roughly 20-30 per cent of the country’s total sugar consumption, according to the association.
The imports, which have been sold at prices lower than domestic products, have been dominating the southern market and part of the northern market.
The association’s chairman Nguyen Thanh Long said that a kilo of Thai sugar imported illegally to the country was retailing for VND13,800, which explained why domestic products have been left unsold.
Looking at the ongoing 2012-13 crop, Long said, 10 sugar plants in the Mekong Delta region produced roughly 130,000-140,000 tonnes of sugar, but only 30 per cent was sold.
By the end of November, producers faced 110,000 tonnes of unsold inventory – 60 per cent more than last year.
The country’s sugar supply next year is estimated to exceed demand by roughly 400,000 tonnes.
Long said though it was now the high sale season, sugar prices had dropped by VND4,000-5,000 against last year to VND14,000-14,500 per kilo.
As sugar input costs (material, expenses on inventories, bank loan interest rates) were high – roughly VND15,000-15,500 per kilo – domestic sugar producers lost VND600-1,000 per kilo.
By producing more sugar, refineries only increased their losses, Long said.
US trade barriers require scrutiny
Viet Nam should keep monitoring the countervailing duties imposed by the US, as the country would place more pressure on imports from China and perhaps other non-market economies as well, said an expert from South Korea.
“It is important to keep monitoring the US countervailing duty actions against China in order to understand what kind of subsidy programmes are being targeted and prepare for them,” Dukgeun Ahn from Seoul National University said at a workshop held by the Viet Nam Competition Authority on Monday.
He pointed out that preferential land use fees, corporate income tax exemptions and reductions and import duty exemptions for raw materials could be considered countervailable subsidies.
The US Department of Commerce’s countervailing duty actions against Viet Nam have involved three products to date: polyethylene retail carrier bags, circular welded carbon quality steel pipe and steel wire garment hangers.
According to the competition authority’s statistics, there were 62 investigations of trade defence cases during the period of 1995-2012, 40 of which were related to dumping. Also, two-thirds of the investigations targeted Viet Nam’s key export goods such as footwear and seafood.
The department has developed an early warning system to help businesses predict when anti-dumping cases against Vietnamese export products may occur and actively respond, thus minimising potential damages.
According to Ahn, it would also be useful to establish a legal team or department in a ministry that can oversee all countervailing duty cases.
Regulations fail to increase supply of low-cost housing
The State has issued a number of policies and incentives to encourage the development of low-cost housing to meet the housing needs of the disadvantaged. Yet few public housing projects are underway and little inventory has been added to the low-cost housing market.
Decree No 71/2010/ND-CP, issued in June 2010, offers regulatory guidance for the Law on Housing. The decree defines “public housing” as residential housing constructed by the State or other entities in all economic sectors for purchase or lease by low-income persons in accordance with mechanisms stipulated by the State.
Under Decree 71, investors in commercial housing projects may raise capital by receiving down payments from buyers pursuant to sales agreements for homes under construction, so long as work on the foundation of the building has been completed. This method of raising capital is much more difficult for public housing projects since, in practice, it is not easy to determine who is an ‘eligible buyer’. Although Decree 71 defines which people are entitled to purchase public housing, these persons must be determined to be qualified in accordance with the law.
As a result, investors in these projects have to finance construction by other means. This is difficult, however, since banks are currently hesitant to lend on public housing projects and on real estate projects in general in light of the ‘frozen’ market.
In order to satisfy the demand for public housing, provincial People’s Committees will, on the basis of the specific conditions within its jurisdiction, may require builders of any commercial housing on a site greater than 10ha to reserve 20 per cent of that land area for the development of public housing.
This stipulation has ended up having a negative impact on the marketability of commercial housing projects. Buyers of more upscale projects are concerned with issues of security and environmental hygiene while these concerns are regularly problematic in areas of low-income housing. Moreover, public housing is frequently not well or regularly maintained. As a result, public housing rapidly degrades and can affect the aesthetics of the whole project.
Since the selling prices and lease rates for public housing units are also controlled by the State, the profit margin from public housing projects is sometimes small or non-existent. Under Article 39.2 of Decree 71, investors are only allowed to set public housing prices to ensure recovery of construction capital and a stipulated level of profit, while Circular No 15/2009/TT-BXD of June 2009 further restricts the profit margin from public housing at no more than 10 per cent of the investment in construction.
The regulated period for recovery of investment capital is also long, at least 20 years for leased housing, counting from the date of the lease is signed, or at least 10 years for rent-to-own units.
Annual Fashion Fair attracts 200 enterprises
This year’s annual Viet Nam Fashion Fair will take place in Ha Noi’s Viet Nam Exhibition Fair Centre (VEFAC) on December 20-26, according to Viet Nam National Textile and Garment Group (Vinatex) and VEFAC.
With a total of 400 booths in a space covering 7,000sq.m, the fair is expected to gather 200 Viet Nam brand names in garments and textiles, footwear, cosmetics, jewelry and beauty services.
The event will provide a chance for businesses to advertise their products and seek investment and partnerships.
There will be fashion shows displaying the latest collections; consultancies; make-up guidance.
FPT Information Systems helps modernise statistics
The General Statistics Office (GSO) and FPT information system company (FPT IS) have begun a project on a national centre for statistical data and an internal information portal. Known as GSO5-2a, it is part of a key project to modernise the GSO, financed by official assistant development (ODA) from the World Bank. The project aims to collect statistcal data which is updated continuously.
Officials look at food security
Director of the Ha Noi Agriculture and Rural Development Department, Hoang Thanh Van, has called on northern provinces to make better use of their advantages to create a safe food supply for the capital city.
Speaking at a recent conference on agricultural promotion among 19 northern provinces and cities, Van said the city had recently paid increasing attention to co-operating with neighbouring provinces through technology transfer and experience sharing.
Popular farming products in Ha Noi include orange and sugarcane from Hoa Binh Province, tea from the provinces of Thai Nguyen and Phu Tho, as well as sturgeon from the provinces of Lao Cai and Yen Bai.
A report from the department said that with a population of 6.8 million people plus 2 million migrant students and labourers, the city’s agriculture production can meet about 40 per cent of demand.
According to the department, in the next three years, the city’s population is expected to reach nine million but it will only be able to produce 52 per cent of meat demand, 64 per cent of fish demand, 65 per cent of eggs demand, 44 per cent of rice demand and 17 per cent of fruit demand.
Meanwhile, its farming production faces challenges from diseases, unsafe food and environmental pollution.
Van’s counterpart in northern Lang Son Province, Nguyen Thi Thanh Nhan, said that regional co-operation was also crucial to control and curb food smuggling.
The engagement among agriculture enterprises was not enough and trade promotion programmes were not as effective as expected, she added.
Nhan suggested establishing a centre for quality testing agroforestry products in border provinces, so that imported products’ quality could be verified before entering the domestic market.
She also urged greater co-operation in quality control between Viet Nam and other countries, especially major exporters.
Meanwhile, representatives from the provinces of Lao Cai, Yen Bai and Hoa Binh urged Ha Noi to offer preferential policies for investors.
Director of Agriculture and Rural Development in Lao Cai Province, Pham Van Lai, said the province supplied forestry products and tea for Ha Noi but had to import fruit and flowers from the capital, so co-operation would bring more market expansion opportunities for both localities.
Director Van from Ha Noi said that as of next year, the city would boost co-operation with provinces in food control and poultry transport, especially cross-border smuggling.
The city has also launched the website sanbanbuon.vn which is expected to introduce and promote its partners’ farming products more widely.
HCM City prepares price subsidized goods for Tet festive season
The Department of Industry and Trade in Ho Chi Minh City is preparing price subsidized goods for the coming Tet Lunar New Year, in order to prevent prices of essential goods from unexpectedly escalating and to stimulate purchasing power by year end.
According to the Ministry of Industry and Trade, so far 43 out of 63 provinces and cities across the country have reported progress on the price subsidized program for the coming Tet season. Provinces and cities have spent more than VND100 billion to support businesses, who in turn have already stockpiled goods worth VND12 trillion.
Vo Van Quyen, director of Domestic Market Department, said that the number of businesses that joined the price subsidized program without receiving financial support from the State have grown in strength. Firms have also developed efficient distribution networks and mobile stores to sell price subsidized goods to consumers in rural and remote areas, and in processing zones and industrial parks. Many banks have also provided loans at low interest rates for firms to stockpile goods.
Le Ngoc Dao, deputy head of HCMC Department of Industry and Trade, said that the City’s price subsidized program on essential goods such as food and foodstuffs ensures a steady supply during peak season at year end and prevent rise in prices. The total capital that firms used for producing and stockpiling goods for Tet season exceeded VND6.68 trillion, up 23.9 percent compared to last year.
Currently, there are 25 companies in HCMC participating in the price subsidized program, of which, one received full financial support, 12 received partial financial support, and the rest did not receive any support. The City has offered VND270.9 billion at zero interest rate for a 12 month period. As of now, there are 5,277 price subsidized stores in HCMC, an increase of 911 stores compared to April this year.
Price subsidized goods account for 30-40 percent of market share this year. Of which, many products such as processed foods, meat, eggs, sugar, and cooking oil will be sold at 5-10 percent lower than market price and will meet 50 percent of the demand. Although HCMC set a quota for stockpiling, many companies have increased their stockpile two to three times. By Lunar New Year, the City is expected to have around 120 more price subsidized stores.
Companies based in HCMC have been rushing to prepare price subsidized goods for the market. Three of the largest wholesale markets in the City, Thu Duc, Hoc Mon and Binh Dien, are bringing in about 8,000 tons of vegetables and fruits every day. Representatives of these wholesale markets say the volume of goods will surge by 50-70 percent towards year end.
Food Company of HCMC has stockpiled 12,510 tons of rice, 500 tons of sugar, 100,000 cartons of soft drinks, 100,000 cartons of beer, and VND5 trillion worth of confectionery, preserved fruits, tea and coffee.
Ba Huan Company said that it will supply 30 percent of eggs in the market. Vissan also set a plan to provide around 2,350 tons of pork, 4,200 tons of processed foods, 2,000 tons of vegetables, and it will stockpile 670 tons of processed foods, 3,000 tons of pork, and 200 tons of beef in its cold storage at the same time, to ensure supply does not run out.
The Pham Ton Company and Saigon Industrial Foodstuff Joint Stock Company has set aside VND673.2 billion and VND231 billion respectively to prepare goods for Tet Lunar New Year holiday season.
Bui Hanh Thu, deputy CEO of Saigon Co.op, said that her company had advanced money to suppliers to ensure supply. According to the plan, the total amount of goods for 60 Co.opMart supermarkets, 55 Co.opFood stores, and nearly 150 stores of Saigon Co.op will amount to 38,000 tons, worth VND3.4 trillion, an increase of 25 percent over the same period last year. The capital set aside for the price subsidized program was VND912.3 billion.
Towards year end, supermarkets and convenience stores will extend their opening hours to serve more consumers and will cooperate with some suppliers to offer a discount of 10-50 percent on some necessary goods.
BigC supermarket also raised its stockpile by 15 percent year-on-year, and this year is offering 90 percent of confectionery that will be made in Vietnam.
The amount of price subsidized goods at Maximark supermarket also climbed by 30-40 compared to the same period last year. The company revealed that it will run more promotional programs at year-end to stimulate purchasing power.
In order to bring price subsidized goods to the right beneficiaries, the department has coordinated with HCMC Women’s Union and bigger enterprises such as Satra, Saigon Co.op, Vinatex, Vissan, and Ba Huan, to develop the price subsidized program in rural and remote areas, processing zones, industrial parks, and traditional markets to ensure supply of necessary goods at reasonable prices.
Currently, firms have opened 13 price subsidized stores at 10 out of 13 processing zones and industrial parks in the City, 831 stores at 128 traditional markets, and 785 stores in outlying districts. Most of the subsidized goods for workers are being sold at cost price.
Smuggling flourishes in northern border at year end
Smuggling is flourishing at border gates in the northern provinces of Lang Son and Quang Ninh ahead of Tet Lunar New Year.
Recently, late one afternoon, roadside tea shops in Dong Dang Town in Cao Loc District of Lang Son Province were crowded with motorbike taxi drivers and porters, who all were waiting to transport smuggled goods.
Suddenly, the quiet sleepy town was woken with the loud sound of at least ten motorbikes and three seven-seater cars carrying several bags of smuggled goods towards Lang Son City.
Within a period of half an hour, Saigon Giai Phong witnessed four to five groups of motorbikes transporting goods across the crossroads of Highway 4B and Highway 1A in Dong Dang Town. At the same time, several porters were rushing to transport the illicit commodities to pavement sellers near Coc Nam border gate.
Nguyen Xuan Thu, a tea shop owner near Dong Dang Market, said that mid noon or late afternoon was time for smugglers to operate, so as to avoid police and military forces.
Major Vu Quoc An from Tan Thanh border army post in Lang Son Province, said that they are in charge of patrolling along 14km of the border which includes two large border gates Tan Thanh and Coc Nam. However they meet with a lot of difficulties due to tough terrain. Smugglers usually carry goods across various paths near Highways 1A and 4B into Vietnam.
The Tan Thanh border army post arrested six smuggling groups with nearly 500 packages of commodities that included clothes, toys, household appliances and shoes in the first week of December.
Since mid December, customs officials in Lang Son Province uncovered more than 570 cases in which contraband goods worth 15 billion (US$720,000) were being brought into the country.
Thang, a trader at Tan Thanh Market, said that they have all commodities from everyday items to banned items, like weapons and firecrackers, which are produced in China. Products are of different quality and price, for instance, the price of a Nike counterfeit jacket swings from VND200,000-1,000,000 depending on if it is genuine or fake.
Thang said that if traders from Hanoi buy illicit goods from China in the long term, they just need to make a phone order and transfer money into an account of the seller to get home delivery.
Smuggling even thrives in Mong Cai City in Quang Ninh Province.
Nguyen Tran Hoe, deputy head of the Bac Son border army post in Mong Cai City, said that they manage 26.3km of the border. However their anti-smuggling efforts are a strain because smugglers transport goods not only by road but also waterways, at night.
Pham Van Tinh, head of the Control Station at Dan Tien Wharf, said that since early December the station has caught 171 smuggling cases, an increase of 24 percent over the same period last year.
The smugglers usually divide goods into several small packages and hire motorbike taxi drivers to transport them.
Vu Duc Dung, from the Customs Department in Quang Ninh Province, said that they have nabbed 693 cases of transporting of contraband goods worth VND27 billion ($1.3 million) in December–an increase of 32 percent in number and eight percent in value over the same period last year.
However authorized organs say that the number of uncovered smuggling cases is much lower than in reality.
Ministry launches website on VietGAP
The Ministry of Agriculture and Rural Development has recently launched an official website on VietGAP, which are a set of standards to evaluate Vietnamese farm produce.
The website aims to raise awareness of food safety and good agricultural practices for productive, high-quality, eco-friendly, and safe cultivation for both farmers and consumers.
Through this website, the Department of Cultivation will be able to keep track of issuance of VietGAP certificates to registered units.
Up till now, the total area in the country cultivated under VietGAP or other GAP standards exceeds 75,000 hectares.
Vietnamese computer companies fined for copyright infringement
A number of computer companies in Hanoi and HCM City were fined for software copyright violation in November.
The violators include EBEST Mall, under Thien Thuan Tuong Ltd. Co., Long Binh Ltd. Co., Le Chan Tin Ltd. Co. and T.N.B Informatics Telecommunication Service Trade Co., Ltd in HCM City and Tien Tien Trading Ltd. Company’s Avi Shop in Hanoi.
Computers with Dell, Lenovo, Acer and Asus brands at these companies have been found to be installed with software without copyright, such as Windows 7 Ultimate, Microsoft Office Enterprise 2007, Office professional Plus 2010, Office Enterprise 2007 and Microsoft Office Professional Plus 2007.
Vietnam has been known for software copyright infringement because of a general disregard for intellectual property right regulations and a lack of the awareness of unsuspecting users.
Mr. Dao Anh Tuan, an expert from the Business Software Alliance Vietnam, said, “Using illegal software can cause computers to be infected with viruses. Recent research has shown that 100% of computers installed with unlicensed operation systems poses a security risk. Much illegal software contains malware that could compromise users’ information.
He also warned that enterprises using illegal software could be fined. After joining WTO, Vietnam adopted a free fair trade policy. The U.S. has approved a law that would disallow many imports from countries who do not abide by internationally recognised copyright rules.
Kyocera seeks tax incentives
Japan’s Kyocera Corporation is seeking support from Vietnam’s Ministry of Industry and Trade for tax incentives granted to a supporting industry enterprise.
Vietnam Kyocera Company, a wholly-owned subsidiary of Kyocera Corporation, recently sent a proposal to the Ministry of Industry and Trade (MoIT) saying that its manufacturing project in northern Hung Yen province should be recognised as a supporting industry enterprise, given that its products are surface mount devices (SMD).
SMD is a necessary component product for phones, household appliances, audiovisual appliances, all-purpose computers, fine ceramics or micro-electronics.
In the document sent to the MoIT, Kyocera said SMD products “is appropriate to the list of electronic components and microchips for development of peripheral devices of computers, household appliances, audiovisual appliances, solar cells” regulated by the Vietnamese government.
Therefore, Kyocera proposed that it should enjoy 10 per cent corporate income tax in the first 15 years. The company will also enjoy tax exemption in its first four years of operation and pay half of this 10 per cent rate in the following nine years.
“This incentive policy will help reduce financial burden and encourage us to expand investments. In addition, it enhances attractiveness of Vietnam to encourage Kyocera’s subsidiaries to select Vietnam as one of main manufacturing bases in the world,” Kyocera Vietnam said in the proposal.
Kyocera is a multinational electronics and ceramics manufacturer founded in 1946 in Japan. In August 2012, the corporation gained an investment certificate for building a $76 million manufacturing factory in Thang Long Industrial Park II. It is expected to be operational in the second half of next year, providing around 2.4 billion SMD products each year.
Kyocera said due to the growing demand for SMD products, it could further expand investments in Vietnam.
S-Fone crushed by debt
The ailing mobile network, S-Fone, is having more difficulties than ever, with huge debts to employees and other companies.
On December 17, many S-Fone employees gathered in front of the corporate office in Hoan Kiem District, Hanoi, protest unpaid wages.
Do Thi Ngoc Khanh, head of S-Fone’s trade union in northern region, said the company now has around 20 employees, all of whom have been practically unemployed since November 5.
Vu Tuan Anh, director of S-Fone in Hanoi said the company still owes tens of billions of VND to its employees, and that there is uncertainty about when they will be able to make good on their financial obligations.
S-Telecom Mobile Phone Center, whose network brand name is S-Fone, was established by Saigon Post and Telecommunications Services Corporation (SPT) along with three foreign partners. In 2010 SPT and its South Korean partner, SK Telecom announced a change in their partnership from a business cooperation contract to a joint venture.
Their debt to other companies has led S-Fone to lay off many of their workers, who have yet to receive their salaries or have their social insurance paid. Even those who continue to work for the company have not received payment.
Currently, the HCMC based telecom firm Saigon Tel, is the biggest share-holder of S-Fone. They have plans to restructure and upgrade S-Fone into 3G service provider, but they have encountered difficulties in finding funds.
The financial difficulties of the firm are so large that even their offices have been cut off from water and power, and retain only one base transceiver station which has also been cut off from power.
Japanese firms keen to invest in HCM City
Vietnamese and Japanese businesses proposed practical measures to improve the investment climate and create a closer link between domestic and foreign businesses in Ho Chi Minh City.
The proposals were put forth during their meeting with leaders of the HCM City People’s Committee on December 19.
Japan has become HCM City’s biggest foreign investor, with a total capitalization of more than US$2.7 billion in many projects.
The Chairman of the Japanese Business Association in HCM City, Mitsuhiro Mori, said apart from 600 Japanese businesses operating in the city, many others are also keen to invest there.
Vietnam, Laos boost financial ties
The Vietnamese and Lao Finance Ministries have signed a cooperation agreement for the 2011-2015 period.
The agreement was inked in Vientiane on December 19 during Vietnamese Finance Deputy Minister Nguyen Huu Chi’s visit to Laos.
Under the deal, the two ministries will focus on training and improving the capacity of Lao financial officials and teachers in 2013.
The two sides will continue to complete legal documents and organisational apparatus for the financial sector, especially in state reserve and international cooperation.
They will increase the exchange of delegations to learn from each other’s experience and between financial officials from both countries to strengthen mutual understanding.
In 2012, the two ministries coordinated in organising a wide range of activities to mark the Vietnam-Laos Friendship and Solidarity Year.
Vietnam, India businesses explore market opportunities
Businesses of the two countries met in New Delhi on December 19 to share information and explore market opportunities, aiming to establish partnerships and increase trade.
Vietnamese Minister of Industry and Trade Vu Huy Hoang briefed participants on the rapid trade growth between Vietnam and India, saying it hit US$3.9 billion in 2011, a fourfold increase over 2006.
The trade value between January-October 2012 was US$3.23 billion, of which Vietnamese exports generated US$1.45 billion.
The 2007 Vietnam-India strategic partnership agreement and the enforcement of the India-ASEAN free trade agreement (FTA) have helped facilitate bilateral trade exchanges, he stressed.
Industrial cooperation between Vietnam and India has also expanded. Several renowned companies such as Tata, Essar, ONGC have cooperated effectively in oil & gas, energy, chemicals, and steel production with their Vietnamese counterparts.
Mining, textile and automobile assembling are other potential business areas for Indian investors.
To increase bilateral trade, Hoang suggested that the two business communities make full use of their respective countries’ competitive areas, share market information, and boost trade promotion through exhibitions and fairs.
He encouraged Indian businesses to introduce initiatives on investment and manufacturing of finished products in Vietnam.
Shantanu Srivastava, managing director of Ishan International Pvt Ltd, shared experience in exploring the market and opening representative offices in Vietnam.
The executive, who has run business in Vietnam for years, suggested that the two governments accelerate the formation of air, land and sea-based transport links to promote trade exchanges.
At the meeting, Vietnamese businesses answered questions about market policies, investment incentives and the clearance of administrative procedures.
On December 18, Minister Hoang attended the opening ceremony of the second India-ASEAN Business Fair.
Most Innovative Retail Bank Vietnam 2012 Award for SEA Bank
The “Most Innovative Retail Bank Vietnam 2012” award has been presented to the Southeast Asia Joint Stock Commercial Bank (SEA Bank) by Global Banking and Finance Review.
SEA Bank is the only Vietnamese bank ever honoured for its progress in increasing the quality of banking services and applying advanced technology to serve clients, especially individuals and small-and-medium-sized enterprises, as best it can.
So far this year, Global Banking and Finance Review has awarded 70 banks and financial institutions over the world, such as OCBC Singapore, DBS Hong Kong, Siam Commercial Bank (SCB – Thailand), and Capital Bank.
Global Banking and Finance Review is an online news portal providing independent information on finance and banking with in-depth reports covering various subjects from leading finance companies, such as Banking, Online Banking, Financial Regulations, Trading Forex, Insurance, Business Finance, Hedge Funds, Pension Funds, Tax and Legal, Business Strategies, Investments, Islamic, Wealth Management, Information Technology, Corporate Governance, Project Finance, current events and conferences.
Vietnam among top three investors in Laos
Vietnam currently ranks third among 52 foreign investors in Laos, with a total investment capital of US$5.38 billion.
This was announced at the 35th meeting of the Vietnam-Lao Inter-governmental Committee for Economics, Culture, and Science and Technology Cooperation held in the northern Vinh Phuc province on December 19.
Present at the event were Vietnamese Deputy Prime Minister Nguyen Xuan Phuc and his Lao counterpart Somsavat Lengsavad, and representatives of various ministries, agencies and businesses from the two countries.
The two-way trade turnover has already reached US$790 million over the past 11 months, up 23 percent over the same period last year, and is expected to hit US$900 million by the end of this year.
Key Vietnamese exports to the Lao market include oil, steel and transport vehicles.
Vietnam’s major projects are related to the construction of hydro-electric power plants and the planting of rubber trees.
Sumitomo buys 20 percent of Bao Viet’s stake from HSBC
Japan’s Sumitomo Life Insurance Company has decided to buy Bao Viet’s stake in the Vietnamese insurance market.
According to Sumitomo, the company will use a credit balance of 30 billion yen to buy 20 percent of Bao Viet’s shares held by the UK’s HSBC in the hope of achieving a higher growth rate in Vietnam to become the second largest Bao Viet shareholder.
HSBC has to sell its shares to Sumitomo due to the impact of the public debt crisis in Europe.
A Gov’t agency needed to improve competition: WB
Vietnam needs to establish a government-level agency to coordinate with relevant ministries on honing the country’s competitive edge in the internationally integrated economy.
World Bank (WB) representatives made the recommendation at a Hanoi seminar discussing trade promotion, value creation, and competitiveness on December 18.
WB experts said that although Vietnamese exports have recorded remarkable achievements, the country is still confronted with issues like trade deficits, low-added value products, overly restrictive regulation, and inefficient cooperation among relevant ministries.
The WB forecasts Vietnam’s exports will triple by 2020. To sharpen its competitive edge, Vietnam should focus trade infrastructure, logistics services, trade legislation, and the restructuring supply chains to increase added-value.
As Vietnam already has the National Committee for International Economic Cooperation (NCIEC), establishing another government-level agency is not necessary. Instead, the mandate for direction and coordination should be delegated to a unit within the NCIEC.
Luong Van Tu, former Deputy Minister of Industry and Trade, said that Vietnam’s export activities are supervised by a number of different ministries and agencies. The WB’s advice to establish a coordinating agency should be heeded. The Prime Minister needs timely recommendations to help devise policies and practical solutions with the capacity to deliver created value and better competitiveness. Mr Tu said Vietnam’s GDP growth rate now primarily relies on exports.
Vietnamese-French trade likely to surpass US$3 bil
Statistics from Vietnam Customs suggest trade turnover between Vietnam and France is likely to exceed US$3 billion this year.
Vietnam’s export earnings climbed above US$2 billion while the value of French imports was over US$1 billion.
Vietnam’s trade office in France acknowledged approximately US$600 million worth of Vietnamese goods entered the French market through brokering countries., The future of French-Vietnamese trade ties looks bright, especially as almost all imported Vietnamese goods are essential items and have concurrently improved in quality as import quantity increased.
According to the Ministry of Industry and Trade (MoIT), the Vietnam-EU Free Trade Agreement negotiations are in progress, hopefully opening up new opportunities for trade and investment ties between Vietnam, the EU in general, and France in particular.
Recently, in Neuilly sur Seine, Vietnam’s French trade office coordinated with VCL France Business Club on a seminar discussing Vietnam’s foreign trade strategy until 2020 and opportunities for French businesses.
It also briefed participants on chances for bilateral entrepreneur collaboration in sectors like fashion, leather footwear, timber products, and food processing.
EC terminates the registration of Vietnam’s gas lighter imports
The Ministry of Industry and Trade (MoIT) reports the European Commission (EC) has terminated registering Vietnamese gas fuelled disposable pocket flint lighter imports, whether they are declared as originating from Vietnam or not.
The EC has also set the expiry for anti-dumping measures imposed on imports of Chinese gas fuelled disposable pocket flint lighters.
In June 2012, the EC initiated an investigation into the possible circumvention of the Chinese import anti-dumping measures by claiming lighters were imported from Vietnam.
The EC’s decision will not affect the results of the investigation into whether Chinese pocket gas lighter manufacturers are using Vietnam to bypass the EU’s anti-dumping regulations. The investigation’s results will be unveiled in March 2013.
Workshop on Vietnam-Switzerland investment
Opportunities for boosting Vietnam-Switzerland cooperation in economics, trade, investment, education, science-technology and tourism were recently discussed at a workshop in Switzerland.
Trade Councilor Luong Manh Hung said Vietnam has achieved an economic growth rate of 5.2 percent and its GDP per capita income has reached US$1,540 in 2012.
The country has invested US$15 billion in 738 projects overseas, and attracted nearly US$213 billion in registered investment capital from 14,364 projects.
Vietnam and Switzerland have signed a number of memorandums of understanding on cooperation in education, finance and banking.
Switzerland ranks 19th among foreign investors in Vietnam, injecting nearly US$2 billion into 91 projects. The capital value remains modest compared to the European nation’s economic power, which is expected to gross US$700 billion in GDP in 2012.
Expert Pham Nam Kim, who works on banking and finance in Switzerland, said Vietnam has adequate conditions to attract foreign investment, especially for its long-term investment plans.
However, he warned that like many other countries Vietnam has struggled to shore up its economy in the context of the global economic recession, and it is no easy task. He suggested Vietnam should show its strong resolve to maintain its achieved economic position.
Dr Minh Tri Amacher, general director of TRISTAR Consulting Co. Ltd. pointed out the legal corridor, infrastructure, and people’s education level as major factors in boosting trade promotion and drawing investment into Vietnam.
Vietnamese ambassador to Switzerland Nguyen The Phiet confirmed that his embassy is willing to provide businesses with up-to-date information on Party and State policies to facilitate their operations, and make recommendations concerning economic policies to the Party and State.
The Vietnamese embassy, in collaboration with relevant Vietnamese and Swiss agencies, has organised 15 business roundtables and investment promotion conferences since late 2009.
Central Highlands call for more investment
An investment promotion conference was held HCM City on December 17 to attract more investors to the Central Highland province of Lam Dong.
Present were more than 100 Vietnamese and Japanese businesses.
Chairman of the Lam Dong provincial People’s Committee, Nguyen Xuan Tien, spoke of incentive policies for investors, especially those operating in vocational training, high technology, food processing, and tourism services.
He pledged to continue upgrading infrastructure, simplifying administrative procedures and dealing with site clearance problems in order to provide the best possible conditions for investors.
Located in the southern part of the Central Highlands, Lam Dong is blessed with beautiful scenery for develop development and huge mineral resources for exploration. It is also famous for many agricultural products such as vegetables, flowers, tea and coffee.
With a total population of 1.2 million, the province has an abundant supply of labour to provide more than 15,000 skilled workers a year.
Lam Dong province plays an important role in connecting the Central Highland region to key economic hubs in southern and central coastal provinces.
Long New Year holidays a boon for tourist companies
Tourist companies are overjoyed with the sudden increase in tour bookings because of the long New Year holidays at year end as well as the coming lengthy Tet holidays.
Nguyen Minh Man, deputy director of marketing and communications at Viet Travel Company, said that people have four days off for New Year at end of December and nine days off during Lunar New Year in February next. These long holidays have brought cheer to the tourism industry which has been reeling under economic woes of late.
Man said his company will provide more than 300 Tet tours, and from the end of December until March next year, the company is expected to serve about 75,000 visitors, an increase of 25 percent year-on-year. All tours to the northern and central regions are already fully booked.
Customers have mainly booked for tours to Hanoi, Sapa, Hoi An, Hue and Da Nang and some tourist destinations in northern mountainous areas.
Because of the long holidays, trips of upto six days are attracting visitors on not only domestic routes but also foreign routes like the US, Europe, South Korea and Japan.
Saigon Tourist Company is expected to receive 6,000 visitors at the end of December for New Year and 20,000 during Tet Lunar New Year, an increase of 10-15 percent.
Tours departing on the second day of Lunar New Year are fully booked, and only tours to Europe, Australia and the US still have availability.
Doan Thi Thanh Tra, head of marketing at Saigon Tourist, said that they will not increase tour prices during either of the New Years and will give visitors some additional services. Only tours to Thailand and Singapore will see the price go up by 5-7 percent due to increase in air fares.
Fiditour Company has introduced more than 200 spring tours internally as well as abroad with many new and interesting destinations. The company will offer discounts during the Solar New Year and give gifts to visitors.
Viet Media Travel Corporation has also reduced each tour price by VND3 million (US$144) for bookings before December 31 for travel during Tet Lunar New Year. Group tours will enjoy further discounts.
The company is expecting to receive about 6,000 visitors during the Tet festival, of which 60 percent will travel abroad.
VASEP refutes State Bank claim of loan to fish breeders
Vietnam Association of Seafood Exporters and Producers (VASEP) has refuted claim by State Bank of Vietnam that a loan of VND38 trillion had been given to Pangasius fish breeders and sea food businesses to overcome the current crisis during the first nine months of 2012.
The Ministry of Agriculture and Rural Development has sent a dispatch to Deputy Prime Minister Hoang Trung Hai asking to examine and verify the figure reported by the State Bank.
Earlier this year, the Government had instructed banks to give Pangasius fish breeders and seafood businesses financial assistance for them to overcome their present difficulties.
The State Bank then implemented the Government’s policy and reported that they had provided VND38 trillion (US$1.83 billion) in loan in the first nine months of 2012 to more than 6,000 breeders and 250 businesses.
However VASEP said that the actual loan was much lower than the figure quoted. Duong Ngoc Minh, deputy chairman of the association, said that the figure of VND38 trillion was incorrect.
He said that the State Bank reported outstanding loans to the seafood industry to be about VND19 trillionat a meeting in February but the number then rocketed to VND38 trillion seven months later.
The State Bank said that 6,000 breeders and 250 businesses have been given loans, however, most of the 6,000 breeders have their own capital and it is not possible they require bank loans, Mr. Minh said.
A report issued by the association said that only 70 businesses are still able to breed and process Pangasius fish as of now, of these only 15 are operating stably and the remaining are dependent on bank loans, and 15 of these breeders have also become near bankrupt as they have used up the loan to invest in real estate and stocks since 2011, .
As a result, the number of enterprises getting bank loans could not by any account total to 250 as announced by the State Bank, he said.
According to the Ministry of Agriculture and Rural Development, this year Pangasius breeding and exports have continually been facing difficulties. At present, fish price has fallen to VND20,500-21,700 per kilogram since early December, causing a loss of VND3,000-3,300 a kilogram to farmers in the Mekong Delta.
Deputy Minister Vu Van Tam said that the Pangasius fish export turnover this year will reduce comparatively to last year. Pangasius exporters have been in trouble as they cannot access bank loans or even if they can the loans have decreased a lot since last year.
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