Scandal-hit market still in free fall
 
Investor caution and weak demand for exchange-traded funds drove down the value of shares and the volume of trades last week on both of the nation's stock exchanges.

Increasing pessimism among the investor community and weak demand by foreign investors contributed to the market plunge last week, wrote analysts of the financial website vietstock.vn.

The reheating of inflation in September, which rose 2.2 per cent over August, added to the worries of investors already concerned over the prosecution of former executives of Asia Commercial Bank (ACB) and what they suggested about the stability of the nation's banking system and the markets, they said.

On the HCM City Stock Exchange, the VN-Index declined by 0.73 per cent over the course of the week to conclude Friday's session at 392.57 points. Volume fell 40 per cent from the previous week's levels, averaging just 28.2 million shares and a value of just VND489.6 billion (US$23.3 million) per session.

Large-cap shares led the market downturn. Financial conglomerate Ocean Group (OGC), real estate developer Hoang Anh Gia Lai (HAG), Song Da Urban & Industrial Zone Investment and Development (SJS) and steelmaker Hoa Phat Group (HPG) were the biggest decliners, with losses from 11.5-13.8 per cent.

Commercial baker Kinh Do (KDC) was among few gainers, posting a cumulative gain of 10.7 per cent on the strength of positive earnings reported in the third quarter. The company reported sales of mooncakes this Mid-Autumn Festival surpassed targets by 15 per cent, and KDC shares closed on Friday at VND28,000.

On the Ha Noi Stock Exchange, the HNX-Index also fell by 2.19 per cent from the previous Friday's close to end last week's trades at 55.47 points. Already meagre volumes dropped by another 36 per cent from the prior week to an average of only 19.5 million shares per day, worth an average of VND147 billion ($7 million).

Over half of all shares on the HCM City bourse are now trading below their par value of VND10,000 a share, a figure that has reached as high as 72 per cent on the Ha Noi exchange.

Shares of Viet Nam Container Shipping Co (VSG) were the cheapest on the HCM City market, worth just VND1,200 ($0.06) a share, while the lowest-priced share in the history of Viet Nam's stock market was SME Securities Co (SME), quoted on the Ha Noi board at just VND200 ($0.01) per share.

SME is being forced to delist its shares by October 26 due to significant violations of disclosure regulations.

Foreign investors concluded last week as net sellers in HCM City by a margin of VND304.8 billion ($14.5 million), but they were net buyers in Ha Noi, picking up shares worth a net of VND9.8 billion ($467,000).

51,000 new businesses established this month

New businesses brought VND350.5 trillion (US$16.66 billion) in registered capital to the nation during the first nine months of this year, up 0.7 per cent in value over the same time last year but a 12 per cent slump in volume, according to the Ministry of Planning and Investment.

The period's addition of 51,000 enterprises raised the number of established firms in the country to 675,000.

Tuna exports to EU continue to increase

Viet Nam's tuna exports to the EU continued to increase despite a recent decline in shrimp and tra fish exports, according to the Viet Nam Association of Seafood Exporters and Producers (VASEP).

Over the first eight months of this year, the country has exported nearly US$74 million worth of tuna to the EU, up 51.5 per cent against the same period last year, VASEP said.

Viet Nam now ships tuna to 20 countries within the bloc. Germany and Italy were the leading importers of Vietnamese tuna, recording year-on-year growth of 73 per cent and 118 per cent. Spain's 113 per cent rate of growth helped it surpass Belgium and secure third place.

Country rice output up by one million tons

According to the Ministry of Agriculture and Rural Development, Vietnam’s rice output this year will reach an estimated 43.4 million tons, an increase by more than one million ton from last year.

Vietnam will cultivate rice in about 7.75 million hectares this year, up by 1.2 percent over last year, with an average yield of 5.6 tons per hectare.

By the end of September, provinces in the southern region will have harvested 1.93 million hectares of summer-autumn rice crop, from which 1.62 million hectares will come from the Mekong Delta.

Average productivity is 5.5 tons a hectare in the southern region and the Mekong Delta, bringing total rice output to more than nine million tons.

Despite increase in output, farmers have not as yet earned substantial profits because production and other overhead costs have escalated.

At present, farmers in the Mekong Delta are seeding the autumn-winter crop on an area of 600,000 hectares, mainly in An Giang, Dong Thap and Kien Giang Provinces.

The immediate concern now is that several areas have seeded rice where dykes are not strong enough and need fortifying, for instance in Kien Giang Province where 7,000 hectares is in danger of being completely inundated by flooding.

Over the last two weeks, continuous heavy rainfall has surged floodwaters to inundate tens of thousands of rice fields. The agriculture industry is now making efforts to help farmers pump out water from the flooded rice fields.

Mekong Delta needs production capital

The Cuu Long (Mekong) Delta region would need a significant amount of capital to overcome financial difficulties affecting agricultural and fishery production, said experts at a seminar on capital and capital management skill organised in Can Tho City on Thursday.

During the seminar, which was held by the Viet Nam Chamber of Commerce and Industry's Can Tho branch and the website Laisuat.vn, representatives of Bao Viet Bank and Mekong Development Bank said they would offer loans for small – and medium-sized enterprises to provide them with the needed capital for production by the end of this year.

Tang Thanh Be Ba, director of MTV Chung Hieu Company Ltd, said his company could get loans from the banks but some other enterprises could not because those enterprises did not have efficient business plans, so the banks could not give them loans.

Kinh Do becomes exclusive distributor of Japanese snack food

Kinh Do Corporation in Ho Chi Minh City and the Japanese food company Ezaki Glico signed a strategic cooperation agreement in September in which Kinh Do will exclusively distribute Glico’s high-quality Pocky snacks in Vietnam.

According to the agreement, Kinh Do will distribute Pocky snacks first and later other snack products including Pretz Collon and chocolate Alfie, through its wide distribution network in the country.

After four years, sales of Glico’s products in Vietnam are expected to   reach VND1 trillion (US$48 million).

According to Tran Le Nguyen, CEO and vice chairman of Kinh Do, his firm will distribute many more products of Glico from their 120,000 retail outlets. Besides, if the business runs smoothly the two sides will consider opening a production plant in the country.

Katsuhisa Ezaki, President of Ezaki Glico, said the cooperation between Glico and Kinh Do was part of a business expansion plan for participation of foreign countries in Asia.

Ezaki Glico is a Japanese confectionery firm having 90 years experience. The firm had sales of more than US$35 billion last year.

Ezaki Glico become a strategic shareholder of Kinh Do in February this year through an acquisition of 14 million shares worth around VND700 billion ($33.6 million) or 10 percent of equity capital.

This year has seen many mergers and acquisitions in which foreign companies have sought to increase their stake in local firms to take over the latter.

For instance, Thailand’s Nawaplastic Industry announced plans to buy an additional 800,000 shares from Binh Minh Plastic, increasing its stake in the company to 20.38 percent; the Singapore-based Orchid Fund Private Limited owns a 9.81 percent stake of FPT; CFR International SPA holds as much as 45.49 percent of Domesco, a medical equipment import-export company; and Nichirei Food bought more shares of Cholimex Food.

Mat Bao provides new legal services

The Mat Bao (Eye-storm) Network Service company yesterday announced a tie-up with Ecolaw firm to provide domain and database services together with professional legal protection as part of activities to celebrate its 10th anniversary.

Ecolaw will deal with all legal disputes related to domain names.

Mat Bao was accredited by ICANN (Internet Corporation for Assigned Names and Numbers) as Viet Nam's first international domain name registrar in June.

On the occasion, the company also unveiled a simple website design at a very affordable price. The company said customers can build their own websites in five minutes, and its technical staff would complete them within five days.

It will only cost VND1 million a year to operate and maintain a website.

Jetstar Pacific to offer cheaper fares on domestic flights

Jetstar Pacific, the first low-cost air service provider in Vietnam, announced on September 27 that the airline will offer cheaper fares on many domestic routes.

For instance, the fare for the Ho Chi Minh City-Da Nang route will be VND395,000 (US$19); and HCMC-Hanoi and HCMC-Hai Phong will be VND695,000($46).

The cheaper tickets will be available from April 2-15, 2013 and May 7-16, 2013 at all agent and ticket distributors in the country.

Jetstar Pacific offers the cheapest flight tickets in the world, according to a survey by Spanish e-commerce travel company eDreams.

Jetstar has also unveiled a stylish new uniform to be worn by crew on board all Jetstar flights in Australia, New Zealand, Vietnam, Singapore and Japan.

The new uniform is designed to reflect Jetstar’s growing Pan-Asian network and to support the brand’s next phase of growth.

Jayne Hrdlicka, Jetstar Group CEO said the new uniform was designed in consultation with team members from across the Jetstar Group.

“The result is a uniform that embraces Jetstar’s presence in the Asia Pacific region and will become synonymous with Jetstar whether you are flying from Sapporo or Singapore, Honolulu or Ho Chi Minh City, Cairns or Christchurch,” said Jetstar Group CEO, Jayne Hrdlicka.

The redesigned uniform includes a twist to the iconic female orange jacket, with the tailored buttoned front now featuring an Asian inspired collar.  Female employees will wear the orange jacket with either black tailored pants or an A-line skirt.  Male and female employees will wear a black top with an orange trim detail.

Made from a high tech fabric the new uniforms are modern, stylish and comfortable for the active daily duties of cabin crew and airport staff.   

Jetstar will fly to 60 destinations across 16 countries and operate upto 3000 flights per week.

Send Facebook friends real gifts

Facebook has rolled out a new gift-giving service that lets its users buy real gifts for friends through the social network.

The gifts – which include items like cupcakes from Magnolia Bakery, a stuffed animal from Gund, or a digital gift card from Starbucks – can be sent from a user's birthday reminders or from a friend's timeline.

Other gifts, plucked from more than 100 retailer partners, include fresh flowers, a bacon of the month club, and an Uber cab ride.

CMC Infosec launches antivirus

CMC Infosec Company on Wednesday released its latest anti-virus software, CMC Mobile Security 2013, which can also help users find lost smart phones with the Google Maps application.

The software for the Android operating system will help users control their smart phones by providing information on the location of their phone online. The software also has an SMS filter to prevent unwanted spam clogging up your inbox.

Android users can download the software from Google Play Store or at http://cmcinfosec.com. The software will be free for six months.-

Optical cable sees new developments

Viet Nam Post and Telecommunications Group (VNPT) and its Chinese partner, the China Mobile Communications Corporation, have launched a cross-border optical cable network to connect with China.

The first stage of the project allows for a maximum data transfer rate of 10 gigabits per second with an upgraded second stage using multiplexing technology permitting a data transfer rate up to a maximum of 40 gigabits per second.

According to VNPT's chairman Pham Long Tran, to become one of the top 20 telecommunications service providers in Asia by 2020, the group was keen to form partnerships with neighbouring nations to expand its business in foreign markets.

Rice output to hit 43 mln tonnes in 2012

Vietnam’s rice output is expected to surpass 43 million tonnes in 2012, an increase of 1 million tonnes or 2.6 percent over the previous year.

According to the Ministry of Agriculture and Rural Development, this year, the country’s total rice area reaches 7.75 million ha, a 1.2 percent rise against 2011.

At present, northern provinces are focusing on taking care of their summer-autumn crops while southern localities are speeding up the harvest of summer-autumn rice and the growing of autumn-winter crop.

By September 15, the country had planted nearly 1.52 million ha of autumn-winter rice, 91.3 percent of the same period last year./.VNA

VietinBank, LotteMart shake hand

VietinBank and LotterMart have just signed a comprehensive cooperation agreement in a ceremony held in Ho Chi Minh City on September 27.

VietinBank and LotteMart agreed upon numerous fields of cooperation.

Accordingly, VietinBank pledged to provide financial and banking services for LotteMart chain throughout Viet Nam.

It is expected that the cooperation will help LotteMart increase convenience for its customers and expand its network in Viet Nam.

Mr. Pyong Gyu Hong, CEO of LotteMart, asserted that the banking market and the retail market are closed linked together because retail services need convenient payment services provided by banks.

He revealed that Lotte are attracting about 5,000-10,000 clients daily and that most of them do not pay by cards. This is a big chance for both VietinBank and Lotte, he said.

LotteMart is a component of Lotte, the 5th biggest group in the Republic of Korea specializing in distribution, foodstuff, petrochemistry, construction, entertainment and tourism…

Established in Viet Nam in 2008, LotteMart is a dominant supermarket trademark, with two centers in Ho Chi Minh City.

It is planning to open two new supermarkets in Da Nang and Dong Nai this year.

Vietnamese EC-225 aircrew to operate in Malaysia

The Southern Helicopter Company and the Malaysian MHS Aviation Berhad Company inked a contract in Vung Tau City on September 26.

Accordingly, one EC-225 helicopter, two pilots and two mechanics from the Southern Helicopter Company will support offshore oil and gas exploration activities in Malaysia for two years. The Vietnamese pilots and mechanics will be tested to receive work permits in Malaysia.

Speaking at the signing ceremony, a representative from the Malaysian company highly valued its Vietnamese partner and Vietnamese pilots and mechanics’ professionalism, and laid out the plan to put the EC-225 into operation in October.

The Southern Helicopter Company has operated EC-225s since 2008. The company was the first EC-225 operator in Vietnam and owns the largest EC-225 fleet in Southeast Asia.

With advanced equipment, the EC-225 is a popular choice for offshore oil and gas exploration and rescue at sea operations.

Hong Leong Bank opens branch in Binh Duong

The wholly-foreign-owned bank Hong Leong Bank Vietnam on Wednesday inaugurated a new branch in Binh Duong Province, also the fourth one in Vietnam since the Malaysian bank started operation here in October 2009.

The Binh Duong branch is located at the Canary Plaza on Binh Duong Boulevard and next to the Vietnam Singapore Industrial Park 1.

Yvonne Chia, group managing director of Hong Leong Bank, said at the opening ceremony that the bank aimed at corporate customers in Binh Duong, which is now home to 28 industrial parks.

The expansion in tough times now shows the commitment and confidence of Hong Leong Bank in the Government’s current economic reform, Chia said. She believed that Vietnam would enter a new economic cycle and the country’s economy would get better in the coming time.

Andrew Liew, chief operating officer of Hong Leong Bank Vietnam, said that last year the bank’s outstanding loans increased by five times while deposit rose by four times. “That means Hong Leong Bank has been recognized in Vietnam,” he added.   

Beside Binh Duong branch, the bank also has outlets in Hanoi, Danang, and HCMC.

Hong Leong Bank Berhad is the first Southeast Asian bank to be granted a license to operate a wholly-foreign-owned commercial bank. Hong Leong Bank Vietnam is headquartered in HCMC.
 
Auto firms seek ways to heat up market

Joining the Vietnam Motor Show 2012 opening in Hanoi on Wednesday, many auto firms displayed a variety of products of different makes and diverse designs in a bid to attract potential customers.

This is the first time in the eight-year history of the event that it has been attended by car importers, including distributors of Audi, BMW, Land Rover, Luxgen, Porsche and Renault, together with local assemblers such as Ford, Honda, Mercedes, Mitsubishi, Suzuki, Toyota and Vinaxuki.

Laurent Charpentier, chairman of the Vietnam Automobile Manufacturers Association (VAMA), organizer of the event, said auto producers and importers brought to the exhibition their best and latest models.

This year’s event is themed “Toward Consumers” with an apparent aim to woo buyers at a time the local auto market is extremely dreary due to the impacts of the economic downturn as well as tax and fee policies.

According to VAMA, in August 2012, the total sales volume of the entire market is 7,056 units, down 5% against July and 34% year-on-year. Auto firms expect the exhibition will help heat up the sluggish auto market.

On the opening day, most participating automakers and traders hosted performances featuring beautiful models to lure attention of visitors and potential customers. In addition, many promotion programs were launched at the event, including discounts and car registration fee supports.

Tourism firms pin hopes on Russian visitors

Representatives of a number of local travel firms and high-class hotels attended the tourism fair Leisure 2012 in Russia as the Eastern European nation has emerged as a potential market for Vietnam’s tourism industry.

The enterprises included Saigontourist, Huong Giang, Focus Asia, Anh Duong, Hyatt Regency Danang Resort and Spa, Mui Ne Bay and Ocean Villa.

State management agencies such as the Vietnam National Administration of Tourism, and tourism promotion agencies of HCMC, Danang and Binh Thuan also joined the event, which took place last week.

Nguyen Van Khoa, general director of Mui Ne Bay Resort, said that Russia is a huge potential market and the number of Russian tourists coming to Vietnam is expected to increase sharply in the near future.

“Many Russian travel firms have introduced Vietnam to their clients. Russian vacationers currently account for around 40% at our resort and the figure will increase further next season,” Khoa told the Daily on Wednesday.

Pegas Touirstik, one of the Russian firms offering tours to Vietnam, is the most active firm in promoting new destinations and it received excellent feedback from customers at the fair.

The firm only entered the Vietnamese market 12 months ago but its impressive growth is heartening. The enterprise sent 50,000 visitors to Vietnam during the previous travel season and the number is expected to double for the peak season from November to early next year.

Tran Chi Cuong, deputy director of Danang City’s Department of Culture, Sports and Tourism, said the agency met some Russian travel firms on the sidelines of the fair. The companies insisted they were very keen to bring their clients to the central coastal city.

“We also met leaders of Pegas Touristik. The company promised to double the Russian tourist numbers to Danang,” Cuong said.

Hoang Thi Phong Thu, chairwoman of Anh Duong Co. Ltd., said Russian partners are eyeing new destinations such as Con Dao and Phu Quoc after launching flights to Cam Ranh and Danang. In Cam Ranh, Russian firms have plans to use Boeing airplanes to carry more tourists rather than Airbuses.

However, Russian partners at the fair complained about the lack of Russian-speaking tour guides. If Russia is seen as one of the key markets, manpower training is necessary to meet demand, Thu said.

UK investors need complete PPP legal framework: Mayor

UK firms are eying projects under public-private partnership (PPP) form in Vietnam, but they will only participate in these projects when the legal framework for this format is completed, said the Lord Mayor of London.

Speaking at a press briefing in HCMC on Wednesday, David Wootton said UK firms want to join PPP projects in Vietnam. They have showed keen interest in Long Thanh Airport and Thu Thiem New Urban Area, said the Lord Mayor of the City of London.

Many UK companies currently active in Vietnam are experienced in developing PPP projects abroad. They are operating in the fields of consultancy, technology, and project management, such as Foster + Partners, RICS Vietnam, Arup Vietnam, Knight Frank, and Savills Vietnam.

Nevertheless, the legal framework for PPP must be perfected, a prerequisite for the UK-based firms to join such projects, stressed Wootton.

Vietnam is an attractive destination for UK investors thanks to its large market with 90 million people and strong economic growth. However, the country needs to improve the legal system, reform State-owned enterprises and restructure the banking sector in order to lure investors, said the visiting Lord Mayor of London.

Wootton is heading a business delegation to Vietnam from September 22 to 26. The main focus of the visit is to further develop bilateral trade and investment opportunities between Vietnam and the UK.

UK companies highly appreciate the efforts of Vietnam to improve the investment environment as well as stabilize the economy.

Nick Holder, chairman of the British Business Group Vietnam (BBGV), said Vietnam is one of the nations where UK investors are doing business well.

“As for the firms currently operating in Vietnam, they see the strengths and the positive supports of the Government, and they will carry on their businesses.”

“But as for those intending to enter Vietnam, they often compare Vietnam with other countries in the region, so Vietnam has to try more attract these investors,” said Holder.

He was speaking on the sidelines of the signing ceremony for a memorandum of understanding between BBGV and the UK Trade & Investment (UKTI) in HCMC on Wednesday, under the witness of Lord Mayor David Wootton.

Many big UK companies have invested in the financial sector in Vietnam, such as HSBC, Standard Chartered, and Prudential, along with those active in real estate, production and service.

However, Holder said the advantage of cheap labor cost will soon fade away once the living standard of citizens is improved, plus the competition with the emerging markets like Cambodia and Myanmar. Therefore, the Government should pay attention to infrastructure, intellectual property, technology, and high value-added sectors, considering them as the nation’s competitive advantages.

Douglas Barnes, UK consul-general in HCMC, said UK investment in Vietnam had exceeded US$3 billion. The two countries are aiming at a two-way trade of US$4 billion in 2013, after achieving US$3.5 billion in 2011.

Rising input costs hinder exports

Rising input costs, together with high interest rates, taxes and institutional costs are threatening the competitiveness of local businesses.    

Regarding the economic prospects for the remainder of the year, economist Nguyen Minh Phong says that although there are signs of recovery, progress remains slow and the market is not prospering.

The government will continue managing the macro economy in the last three months of 2012 as directed by Resolution 13 with no changes of policy, he notes.

Phong says the total export-import value in the first eights months of this year reached US$147 billion, of which exports accounted for US$73.35 billion, up 17.8 percent against the same period last year, thanks to the US$45.6 billion in earnings by FDI businesses, representing a year-on-year increase of 34.1 percent.

Meanwhile, local business exports in August fell by 8.5 percent, bringing the total decline for eight months to 1.9 percent.

The current difficult market situation means that the garment and textile sector may have to consider lowering its set targets. The sector's total exports for the first eight months hit only US$9.72 billion, and export earnings are estimated at just US$16 billion, much lower than the target of US$19-19.5 billion.

The Vietnam Textile and Apparel Association (VITAS) says that consumer demand is falling in major markets such as the US, the EU, and Japan, and large exporting countries are reducing prices by 5-7 percent to improve their competitive edge.

VITAS Vice President Pham Xuan Hong predicts a five-percent decline in exports to the EU and US in the third quarter compared to the previous three months.

Due to the shortage of orders, it is likely that more businesses, especially small-sized enterprises, will be forced to halt operations.

Ngo Trung Kien, Chairman of the Saigon2 Garment Joint-Stock Company, said it is no easy task for enterprises to earn a profit and develop.

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), seafood exports earned more than US$4 billion in the first eight months of this year, up 6.4 percent against the same period last year, thanks to increased exports to the US, Japan, and China.

However, exports to the EU have seen continual decreases (7.9 percent in Q1 and 15.5 percent in Q2), which is estimated to continue until the year’s end.

It is predicted that seafood exports will experience further difficulties due to increasing input costs, falling product prices, and the shortage of capital for production.

Phong said high interest rates, increasing input costs and institutional costs are reducing local enterprises’ competitive edge.

Agreeing with Phong’s opinion, Phi Ngoc Trinh, Deputy Director of the Ho Guom Garment Joint Stock Company, says that increasing labour costs and electricity and petrol prices are posing great challenges to the garment and textile sector.

Therefore, Trinh said, preferential taxes are needed to help businesses iron out snags and get back in the game.

Trinh also suggested that a six to 12 month extension be granted for paying social insurance premiums as increased minimum wages are another burden on local businesses.

Promoting timber product exports

The timber processing sector’s failure to implement proper measures for sustainable development means all management agencies and businesses must devote more effort to effective reforms.   

Vietnam now has more than 3,900 wood processing businesses, most of them are small sized in terms of labour force and investment capital. More than half of these enterprises are simply-equipped and produce low-quality products for the domestic market.

The sector’s capacity is nearly 15 million cubic metres of circle wood per year. Before 2003, Vietnam mainly exported plank and outdoor wood products but now handicraft products and furniture are also exported.

Product diversification and trade activity promotion have fuelled significant growth in exports to major markets. Compared to 2011, exports to the US have increased by 31.3 percent, to China by 24.3 percent, and to Japan by 21.3 percent.

According to the Ministry of Agriculture and Rural Development’s (MARD) statistics, timber and handicraft product exports hit US$2.7 billion in the first seven months of this year, representing a year-on-year increase of 21.6 percent.

Vietnamese timber products can now be found in 120 countries and territories across the world, says MARD.

In addition to penetrating new markets in Western Asia and Eastern Europe, businesses are focusing on the domestic market with the aim of exploiting opportunities in direct retail as well as distribution networks.

However, made-in-Vietnam products still face tough competition from imports. Domestic businesses are at serious disadvantaged due to their lack of reputable trademarks, a good sense of the market’s tastes, and unreasonable prices.

The sector’s growth is primarily dependent on exports and processing for foreign partners. Only some businesses have actively invested in the technology required to produce their own designs and thereby increase the value of their brands in the market. Most businesses find it difficult to meet big orders because of their limited capitalization.

Nguyen Manh Dung from the Department of Agriculture, Forestry and Fisheries Products Processing and Salt Industry proposed that timber processing enterprises should focus on improving the quality of their products.

He says reforming management mechanisms and prioritising competitiveness is also needed to assist the production of furniture, outdoor timber products, and handicrafts. Dung advises upgrading small and medium-sized factories, developing larger-scale timber processing facilities, and diversifying products even further.

Phan Thi Thanh Minh, chief representative of the Ministry of Industry and Trade, says Vietnam must accelerate forest planting to ensure the stable supply of wood material and reduce dependence on imports.

She urges the MARD to devise measures for reforestation, allow businesses to scale up their reforestation projects, and provide loans to make those projects more effective.

Minh also recommends that research should be better utilised to target and tailor suitable products for specific markets. She urges businesses to consider expansion into newly- emerging markets.

In spite of the current difficulties, those businesses who make knowledgeable investments have the opportunity to build customer trust and advance their standings in the market.

Quality improvement, design diversity, and trademarking are all essential for greater success, she stresses, adding that material production businesses and processors should closely coordinate with each other.

In the future, the Ministry of Industry and Trade aims to develop the forestry product processing into one of the economy’s key industries.

The ministry has asked trade counselors overseas to support businesses with market information and favourable import-export policies, Minh says.

US$84 million for low-carbon agricultural support

Prime Minister Nguyen Tan Dung has approved the low-carbon agricultural support project (LCASP) with a total capitalization of US$84 million.    

Of the fund, US$74 million will be provided by the Asian Development Bank (ADB) as a preferential loan.

The government leader asked the Ministry of Finance to cooperate with relevant ministries and agencies in building financial mechanisms for the project.

He also said the Ministry of Agriculture and Rural Development is responsible for evaluating, adopting and implementing the LCASP following regulations on the management and disbursement of official development assistance (ODA) loans.

The project aims to reduce agricultural pollution by treating livestock wastes through the expanded use of biogas and bio-slurry processing technologies.

Nine-month industrial output rises 4.8 percent

The nation's Index of Industrial Production (IIP) increased 4.8 percent in the first three quarters of this year, compared to the same period last year.  

According to the General Statistics Office (GSO), the index in September rose 4.6 percent over the previous month and 9.7 percent over the same month last year.

Electrical generation and distribution grew 12.8 percent during the nine-month period, while water supply and treatment grew 8.4 percent. Manufacturing and processing rose 4.2 percent, while the mining industry saw 4 percent growth.

Car and motorbike parts production skyrocketed by 148.4 percent over the same period last year, while telecommunications equipment production grew by 57.3 percent. Shipbuilding and floating tanks saw a 44.5-percent increase, while production of electronic components rose by 22.3 percent.

The GSO attributed the slowdown in industrial production growth to global economic instability and domestic shortcomings, including high inventories. It noted that the IIP has risen between 10 to 17 percent in stable periods during previous years.

Manufacturing and processing, which represents up to 70 percent of all industrial production value, saw a 6.4-percent increase in the consumption index during the first three quarters, while inventory levels were at 20.4 percent as of September 1.

Around the country, the northern province of Bac Ninh posted the highest IIP growth of 23.5 percent during reviewed period, following by southern Binh Duong province, up 7.9 percent; Dong Nai, up 6.9 percent; the central city of Danang, up 6.1 percent; the northern city of Haiphong, up 5.1 percent; and Hanoi, up 4.3 percent.

Vinh Phuc and Hai Duong provinces saw declines of 4.7 and 1.7 percent, respectively.

Moody’s downgrades Vietnam’s credit rating

Moody's Investors Service has downgraded Vietnam's credit rating to B2 from B1, citing weaknesses in the country’s banking systems.
   
Vietnam’s long-term foreign currency deposit ceiling was also downgraded to B3 from B2.

Vietnam’s GDP growth rate has increased considerably over the past nine months, from 4 percent in the first quarter to 4.66 percent in the second, and 5.35 percent in the third.

During the Government’s regular meeting in Hanoi on September 27, Cabinet members said the domestic macro economy is still grappling with several difficulties. They identified the challenges posed by macroeconomic instability, bad debts, and the complexity of financial and monetary markets.

They also noted Vietnam’s Consumer Price Index (CPI) is likely to rise over 2012’s remaining months, blaming pressure stemming from the domestic and global economies.

Overseas remittances to HCM City hit US$2.8 bln

Overseas remittances to Ho Chi Minh City reached US$2.8 billion in the past nine months, equal to 81.5 percent of last year’s figure.    

Statistics released by the State Committee for Overseas Vietnamese showed overseas remittances to Vietnam surpassed US$6.3 billion, accounting for 70 percent of the country’s total amount recorded in 2011.

The country is expected to get US$10-11 billion remitted from Vietnamese expatriates abroad this year, up 30 percent compared to last year’s figure.

Most of the money has flowed into rural and far-flung areas where there is an abundant resource of labour for export.

Vietnamese Goods Week to be held in Italy in early 2013

A Vietnamese Goods Week has been scheduled for January 2013 in Italy as part of activities marking Vietnam Day and the 40th anniversary of the establishment of Vietnam-Italy diplomatic ties.

Representatives from the Ministry of Industry and Trade and the Vietnam Business Association in Italy have discussed with the Vice President of the Coop-Italy supermarket chain about the event’s organisation.

Following the success of Vietnamese Goods Weeks held in collaboration with the Casino-France and Metro (Germany) supermarket chains, the MoIT hopes that working with Coop-Italy will help Vietnamese goods better penetrate the European market. The Ministry believes promoting Vietnamese trademarks can benefit businesses and consumers in their respective countries.

The week will be held at the headquarters of Coop-Italy in Torino and across other major Italian cities.

Nation enjoys US$10.2 billion trade surplus to America

Vietnam enjoyed an export surplus of US$10.2 billion in trade with America over the first eight months of this year.    

According to the General Statistics Office (GSO), two-way trade between Vietnam and America reached US$20.8 billion during the period, up 17 percent compared to the same time last year.

Vietnam exported goods worth US$15.5 billion to the continent while importing US$5.3 billion worth of products, representing year-on-year increases of 18 and 13 percent respectively.

The US remained Vietnam’s biggest trade partner with two-way trade reaching US$16.2 billion, up 18 percent year-on-year, followed by Brazil with US$1.2 billion (up 38 percent), Canada with US$1.04 billion (up 22 percent), Argentina with US$593 million (down 1 percent), and Mexico with US$549 million (up 30 percent).

Vietnam’s main exports to America are textiles and garments, footwear, and wood and seafood products. while it imports animal food, machinery, cotton, computers, and electronics and associated parts.

Ba Ria-Vung Tau hosts Autumn Economic Forum

Vietnam’s leading economic experts, managers and scientists attended the 2012 Autumn Economic Forum in the southern province of Ba Ria-Vung Tau on September 28-29.    

The event, themed “Vietnam Economy in 2012, Prospect for 2013: Innovating Decentralisation in Institutional Reform” was held by the National Assembly’s Economic Committee, the Vietnam Academy of Social Sciences, the Vietnam Chamber of Commerce and Industry and the United Nations Development Programme in Vietnam.

It focused on highlighting Vietnam’s economic difficulties in 2012, together with prospects in 2013, and discussing the decentralisation innovation in institutional reform.

At the event, the participants said that Vietnam’s economy has faced more difficulties in 2012 than in 2011, with lower GDP growth and market trust along side huge inventory.

Economic experts suggested that tough measures should be taken to better Vietnam’s economic situation in the remaining months of this year.

Cotton banknotes to go out of circulation

Cotton banknotes in VND10,000 and VND20,000 denominations will be taken out of circulation as of January 1, 2013.

According to an announcement by the State Bank of Vietnam (SBV), the VND10,000 and VND20,000 cotton banotes will no longer be legal tender in Vietnamese territory after that date.

Organisations and individuals that possess these notes will be able to exchange them for polymer bills of equal value at SBV branches and representative offices, credit institutions, foreign bank branches, and provincial or municipal National Treasury offices.

Russian business honoured for contributions

Zarubezneft Company and its former director, Tokarev N.P, have been presented the Labour Order, first class, for their outstanding achievements in exploring and exploiting oil and gas in Vietnam.

At the presentation in Moscow on September 28, Vietnamese ambassador to Russia Pham Xuan Son, authorized by State President Truong Tan Sang, also granted the Friendship Order to Vasily Boichenko and Alexander Kojurin, members of the Zarubezneft management board and the Friendship Medal to Asgat Gumerov, General Manager of the Institute of Power Resources Transportation.

On the occasion, Prime Minister Nguyen Tan Dung and Minister of Industry and Trade Vu Huy Hoang also granted certificates of merit to Zarubezneft senior managers in recognition of their contributions to the development of Vietnam’s oil and gas sector.

The event also marked the Zarubezneft Company's 45th anniversary.

Vietnam, Laos promote agricultural cooperation

Vietnamese and Lao ministries of agriculture will continue boosting comprehensive cooperation through exchanging delegations and jointly implementing programs and projects.

The agreement was signed during the September 28 talks in Vientiane between Lao Minister of Agriculture and Forestry Vilayvan Phomkhe and the visiting Vietnamese Deputy Minister of Agriculture and Rural Development Bui Ba Bong, who is on a five-day visit to Laos until September 30.

Accordingly, both sides will develop the production of a number of cross bred maize, rice and cassava varieties, and poultry and cattle breeds; enhance cooperation in animal and plant quarantine; conduct joint research on sustainable forestry development and build a bilateral forestry cooperation agreement.

They will also update information on regulations on natural timber exploitation and exports, promote trade activities and agro-forestry and seafood exchange and facilitate Vietnamese businesses’ investment in tapping farms in Laos.

Vietnam will assist Laos to increase its capacity in investigating, monitoring and diagnosing dangerous and contagious diseases.

It will also send experts to help develop agricultural production models and build agricultural extension stations in Laos.

Vietnam-Venezuela oil and gas JV begins production

Petromacareo, a Venezuelan-Vietnamese oil and gas joint venture, has begun exploiting oil in the Orinoco Oil Belt.    

The commencement was announced in a September 27 report by the national news agency of Venezuela (AVN).

With an initial output of 800 barrels per day, the joint venture aims to reach 40,000 barrels per day one year after production began.

The Orinoco Oil Belt holds the world’s largest reserves, estimated at around 37 billion barrels. Under the 25 year-contract, the venture will exploit heavy crude oil and extra heavy crude oil from a field in the belt’s Junin 2 block.

The venture is one of Vietnam’s largest international oil and gas projects. According to a 2011 report from the State-run oil company Petroleos de Venezuela, S.A. (PDVSA), Petromacareo is expected to invest nearly US$3.9 billion in the construction of infrastructure and drilling wells.

Output could eventually reach up to 200,000 barrels per day.

In April last year, PDVSA signed an agreement with PetroVietnam to expand the Dung Quat oil refinery , facilitating an increase in heavy crude oil production.

Minister for Petroleum and Mining Rafael Ramirez recently said that Venezuela will begin exporting fuel oil to Vietnam by 2015.

Petromacareo is one of six joint ventures between PDVSA and foreign partners that are expected to begin operation in the Orinoco Oil Belt this year. Total production is predicted to reach 1.6 million barrels per day by the end of the year.

Vietnam urged to improve business environment

Vietnam must continually improve its business environment in the context of tough competition around the globe, urged World Bank’s Country Director for Vietnam Victor Kwadwa.

According to the recent World Economic Forum, Vietnam ranks 75th in the Global Competitiveness Report 2012, a slump of ten places compared to last year’s report.

Kwakwa attributes Vietnam’s position plunge to issues arising from macro-economic performance, incomplete infrastructure, lack of highly skilled workers, and inefficient management.

Noteworthy is that the WEF used 2011 statistics to evaluate Vietnam’s economy and the situation has changed for the better since early this year.

Kwakwa highlights the success of the Vietnamese Government’s policies aimed at stabilizing the macroeconomy, curbing inflation, both of which promote social security and maintain growth.

She believes these factors will play an active role in elevating Vietnam’s rankings in 2013.

However, the WB Country Director warns that Vietnam needs to increase the competitiveness of its business climate if it wants to achieve its goal given global fierce competitions.

The WEF report points out that Vietnam has not effectively operated public investment programmes, nor successfully controlled operations of state-owned enterprises (SOEs).

To deal with the issues, Kwakwa suggests that Vietnam ensure an equal playing field exists between SOEs and private enterprises, promote transparency in financial management, and improve the selection of public investments.

She encourages the country to speed up administrative reform by simplifying bureaucracy and applying modern technology in business and state management while settling bad debts in the banking sector.