Agriculture prices to remain stable
 
The prices fetched by leading agricultural exports were unlikely to change significantly this year, forecast industry insiders.

The Ministry of Agriculture and Rural Development forecast stable or even declining rice prices due to an increasingly competitive global market. Rice last year fetched an average export price of $457 per tonne, the ministry said.

Among other major cash crops, only pepper was expected to see export prices increase significantly this year. A representative from the Viet Nam Pepper Association, Tran Duc Tung, forecast that export prices would be higher than last year due to declining global supplies.

Pepper exports last year fetched a whopping $6,700 per tonne on average, nearly $1,000 higher than in the previous year, Tung noted. He therefore recommended that exporters sign contracts with early delivery dates to avoid losses in case of price surges after the contracts are signed.

Viet Nam Coffee and Cacao Association general secretary Nguyen Viet Vinh anticipated that the export price for coffee would fluctuate around US$2,000 per tonne this year, down modestly from last year's average of $2,137. Coffee exports last year rose about 40 per cent over the prior year to 1.76 million tonnes, while the value of exports increased by 36 per cent to $3.75 billion, Vinh said.

The Viet Nam Cashew Association also forecast that cashew prices would inch up to about $7,000 per tonne, as stricter food safety regulations imposed by the US, EU, Australia and China could have an impact on global demand.

The head of the export-import division of the Viet Nam Rubber Association, Dinh Van Tien, also predicted that rubber prices would remain unchanged at roughly $3,000 per tonne this year. However, he expected that rubber exports to China, Viet Nam's largest rubber market, would be easier as China planned to cut import taxes on several varieties of rubber in order to boost import volume.

Seafood and rice exporters face difficult first quarter

Seafood and rice exporters are reporting that they have received few new export contracts so far this year, with only a few major players landing contracts for the first quarter and all voicing concerns about the state of the global market.

Lam Ngoc Hai, the deputy director of the Saigon-Mekong Fisheries Co in the southern province of Tra Vinh, a company which already saw a 5-per-cent decline in tra fish exports last year, said that his company has been unable to secure a major contract for the first few months of the year.

Viet Nam Association for Seafood Exporters and Producers (VASEP) general secretary Truong Dinh Hoe said that the association was unable to make any forecasts about this year's demand due to too many uncertain variables.

But he affirmed that seafood exporters would find it very difficult to meet their target of US$6.7 billion in exports this year.

According the association, only 20 per cent out of about 70 tra exporters were operating well, and the association was concerned there would be a significant inventory of tra accumulating in the first quarter – a state of affairs that could result in seafood export volumes this year declining by at least 15-20 per cent.

Rice exporters have also landed only a few export contracts to China, with no orders yet from other major importers such as the Phillippinnes, Malaysia and Indonesia.

Viet Nam Food Association (VFA) vice chairman Pham Van Bay warned that rice exporters could face difficulties if demand remains low when the winter-spring crop is harvested between January and March. The Government might then have to buy rice for stockpiling in order to protect farmers.

Vietnamese rice was expected to continue to face stiff competition from cheaper products from India, Myanmar and Pakistan, Bay said.

The Ministry of Agriculture and Rural Development forecast that agricultural exports would earn $28.5 billion in 2013, up from a record $27.5 billion last year.

Ca Mau faces threat from saltwater intrusion

The entire western coastal area, including Phu Tan, U Minh and Tran Van Thoi districts in southern Ca Mau Province, is suffering from serious saltwater intrusion.

Research jointly implemented by the provincial departments of agriculture and rural development and natural resources and environment last month showed that saltwater intrusion has worsened this dry season due to high tides. In some places, saltwater penetrated up to 3 kilometres into agricultural land.

Nguyen Van Su, director of the provincial Department of Agriculture and Rural Development, said that the department had helped farmers dig canals along their fields to stem the inflow of saltwater.

However, he said, this was only a temporary measure. The western coastal area played an important role in the provincial economy and defence, so it was vital to reinforce the dyke system to keep out saltwater.

The western coastal area is 97 kilometres long. Ca Mau Province invested VND60 billion (US$2.8 million) to build a 100 kilometre dyke to protect 100,000 hectares of agricultural land in 1990.

Since then, however, many parts of the dyke have broken, causing saltwater to intrude into cultivated land. Each year, the province invests billions of dong to upgrade the dyke, but these measures are yet to prove effective.

Binh Duong starts $16.6 million project

The southern province of Binh Duong has initiated a project worth over VND345 billion (nearly US$16.6 million) to deal with pollution around the Ba Bo Canal, which borders Binh Duong Province's Thuan An District and HCM City's Thu Duc District.

The project, expected to be completed this year, will help improve the canal's drainage system, eliminating polluted water.

HCM City reviews status of state-owned enterprises

Le Hoang Quan, Chairman of the People's Committee of Ho Chi Minh City, hosted a conference on January 8 to review production and business activities of state-owned enterprises in 2012 and implement plans for 2013.
 
Dao Thi Huong Lan, HCMC Finance Director, stated in a report to the People’s Committee that the City had in all 108 state-owned enterprises but only 13 are in the process of merger, dissolution or near bankruptcy, while other businesses are operating normally.

Sales from 95 companies in 2012 reached VND122,512 billion, down 24 percent from 2011.

According to Lan, in these 95 businesses, there are 29 at risk of losing capital with debt accumulating to a total VND720 billion, including disposable assets, inventories, bad debts, and other losses.

There are 17 state-owned enterprises that need restructuring as they invested in non-registered fields such as banking, real estate, securities, etc.

Speaking at the conference, Chairman Le Hoang Quan directed the Department of Finance to collaborate with state enterprise management units to grant prizes to the enterprises that conduct business effectively and penalize those that run theirs badly.

He ordered that in the second quarter of 2013, relevant organs must promptly liquidate eight state-owned enterprises that have repeatedly caused losses for successive years.

Mekong Delta has least FDI projects in Vietnam

The number of Foreign Direct Investment projects in the Mekong Delta are the lowest in the country with only 736 projects with capital investment of US$10.7 billion, accounting to as little as five percent of projects in Vietnam.

Long An Province leads with 477 projects worth $3.7 billion, accounting for 30 percent in the entire region. Can Tho City has an airport as well as a seaport, but despite efforts has only attracted 57 projects. Several other provinces have also tried to get more investments but so far have none.
 
Vo Thanh Hung, head of the Management Board of Industrial and Export Processing Zones in Can Tho City, said that 70 percent of goods to the Mekong Delta are transported by waterway. However, larger vessels cannot enter ports, especially on the Hau River.

According to Vo Thanh Thong, deputy chairman of the People’s Committee in Can Tho City, the Mekong Delta has too many industrial zones in similar fields like seafood processing.

The quick development of industrial zones has led to a surplus of 60 percent of their capacity, causing a lot of plants to shut down.

Besides, some believe the Mekong Delta has not created an attractive and professional investment environment and lacks basic orientation to promote the region.

Pham Thanh Khon, deputy director of the Department of Science and Technology in Vinh Long Province, said that local authorities should inform investors on difficulties and limitations in their provinces. This will help the investors anticipate challenges and make suitable production and trade decisions.

Head of the Vietnam Chamber of Commerce and Industry in Can Tho City said that high transport and logistic costs is the main obstacle for FDI businesses.

The Mekong Delta should have policies to first encourage investment in infrastructure including traffic, electricity and Internet. They should also have a specific mechanism to attract investments for the entire region.

Sharing the same view, Bui Ngoc Suong, deputy head of the Southwest Region Steering Committee, said that the Mekong Delta should propose to the Government to issue policies to attract foreign direct investment to the region.

They should also propose to the Government to have preferential policies on tax and land and invest more in infrastructure development.

Hoa Lac Hi-Tech Park attracts huge investments

Hoa Lac Hi-Tech Park in Hanoi City has granted investment certificates for 68 projects so far with a total registered capital of VND52.24 trillion.

Among the projects, 20 have started operations while 13 are under construction. In 2012, the park gave investment certificates and land use rights of 110.57 hectares to seven projects with a total registered capital of about VND20.81 trillion.

Last year, some big projects like Vietnam National Satellite Center, Viettel Group, FPT University, Nissan Techno Vietnam, and Vietnam Space Center, came up at Hoa Lac Hi-Tech Park.

Garment, textile exports enjoy robust growth

Although global buying power for garments has dropped from US$704 billion in 2011 to $697 billion in 2012 and demand from most major markets such as the US, EU and Korea fallen to an all time low,  Vietnam’s garment industry still managed an export growth of 12 percent with revenues at $15.8 billion.

Last year, garment and textile exports touched $17.2 billion, up 8.5 percent compared to 2011. Of which, the country only imported materials for $8.8 billion and used nearly 50 percent from domestic suppliers. Last year, trade surplus in garment and textile industry hit $8.4 billion.

As for the Vietnam National Textile and Garment Group, exports exceeded $2.6 billion, an increase of 16 percent compared to 2011.

The industry has still set export growth target of 12-15 percent for this year and is expected to bring in revenues of $18.8-19.3 billion.

Huge demand for fresh flowers in China

Hundreds of Vietnamese traders are transporting fresh flowers to the northern province of Lao Cai for export to China, where a sudden huge demand has sprung up after consecutive cold waves destroyed their flower crops.

According to officials at border gates in Lao Cai Province, consecutive cold fronts have hit China’s flower crops resulting in a huge demand for fresh flowers.

Border gate authorities estimate that about 1,500-2,000 boxes of flowers, mainly roses and daisies, are being exported across the border every day. Each box contains about 1,200-1,500 stems.

Until Tet Lunar New Year, the demand for fresh flowers in China is expected to continue to surge.

In related news, since January 1, China has begun to implement a policy to stick labels and give certificates of origin right at fruit orchards sites to authenticate the produce for export to Vietnam.

Desperate firms call for government lifeline

Struggling businesses are in urgent need of government support to keep their heads above water.

The latest figures from the Ministry of Planning and Investment (MPI)’s Business Registration Department revealed that 54,261 businesses either dissolved or halted operations in 2012 compared with 53,912 in 2011.

Only 69,874 businesses were established in 2012, a 7,674 fall on 2011.

“This reflects the hardships that are clearly visible in the business community,” said Le Quang Manh, director of the Business Registration Department.

MPI chief Bui Quang Vinh also expressed concerns over Vietnam’s USD284 million trade surplus in 2012.

“It’s an issue of concern, rather than something to be pleased about. For an export-based country like Vietnam, a trade surplus means local businesses are struggling, and indicates that they’ve been forced to retrench production with sharply falling demands for import of inputs,” Vinh said, adding that this would overshadow export and economic growth perspectives for the foreseeable future.

In parallel to the massive dissolution and cessation of business operations the industrial production index (IIP) only picked up 4.8 percent in 2012 against 2011, which in itself was considered rather low against the set target of 8.5 percent, dramatically highlighting decelerating production in the economy.

Management authorities in localities throughout the country highlighted the difficulties facing businesses in late December 2012 at an online meeting between the government and local authorities.

Chairman Vuong Binh Thanh of An Giang Province People’s Committee in the Mekong Delta said around 26,000 tonnes of processed Tra fish worth VND1 trillion (USD48 million) remained unsold locally.

“Tra fish farmers have been hard hit since 2008. Businesses are in urgent need of support, because if they go bust, farmers will also be driven into a corner,” said Thanh.

Up to 1,343 businesses in agriculture, forestry and fisheries were either dissolved or halted operations in 2012 compared to 1,193 such firms in 2011.

Meanwhile, just 1,191 new firms were registered in 2012, a drop from 1,574 such businesses in 2011, according to the Business Registration Department figures.

“Agriculture, forestry and fisheries are one of five areas incurring sharp declines in new business set-ups in the past year. The same situation is replicated in the construction sector, with less dramatic examples found in the property, insurance, finance and banking sectors,” said Department chief Le Quang Manh.

Approximately 475,700 businesses were active in the country by the end of 2012. However, Small and Medium-size Enterprises Association chairman Cao Si Kiem admitted that throngs of firms might have their growth derailed and have to stop operations in the coming period amid persistent economic woes.

“Increasing numbers of firms will go to the wall unless they receive rapid support from the government as they can’t continue alone anymore,” said Kiem.

Billion dollar projects remain paper dreams

The majority of 24 projects valued in billions of dollars licensed in Vietnam since 2007 have not yet been implemented, while a number of them have had their investment licenses revoked.

Those projects that have had their licenses revoked include the USD9.8-billion Ca Na Steel Complex in Ninh Thuan Province, USD4-billion Dragon Beach Resort in Quang Nam Province and USD1.68-billion Creative City in Phu Yen.

Construction of the USD3.1-billion Vung Ro Oil Refinery may be delayed until mid-2013 although a contract on purchasing technology copyrights and overall technical design with the US’ A HoneyWell’s UOP LLC was carried out in August 2012.

Other big projects such as the USD2-billion new city in Dong Nai Province, USD1-billion Kobelco steel plant in Nghe An, USD4.1 billion Saigon Atlantis Hotel in Ba Ria-Vung Tau, USD1.6-billion Starbay tourism resort in Kien Giang and USD2.25-billion thermal power plant in Hai Duong have yet to begin construction.

A billion dollar hotel project site invested in by the Kinh Bac City Development Holding Corporation in Hanoi remains a wasteland. In 2009, Japan’s Riviera Group withdrew from the project due to financial difficulties. After that, the Hanoi People’s Committee allowed Kinh Bac City Development Holding Corporation to take over the project with investment valued at USD500 million.

However, there was some good news early this year, with Vinacapital working with the management board of the Chu Lai Open Economic Zone to introduce its partner to take over the USD4-billion South Hoi An entertainment complex project, replacing Genting Malaysia Berhad (Malaysia) who announced their withdrawal from the project.

Binh Dinh Province People’s Committee and the Petroleum Corporation of Thailand will meet the Ministry of Industry and Trade on January 10 to discuss an oil refinery project worth USD27-billion that is set for construction in the province.

In December 2012, the Binh Dinh People’s Committee submitted the project to the Prime Minister for an investment license.

The feasibility of the project is in doubt due to its huge capital; however, Petroleum Corporation of Thailand have insisted that they have sufficient capacity to implement it.

After being halted due to financial difficulties last year, some major projects have resumed, including the USD4.5-billion Ho Tram Strip and Formosa’s USD9.8-billion steel project.

An official from the management board of Ba Ria-Vung Tau Province’s industrial parks said the USD1.15-billion China Steel Sumikin project would be put into operation in the first half of 2013, creating over 1,200 jobs.

Banking graduates face unemployment

Students with banking and finance degrees are worried about their job prospects as banks have tended to cut their workforces amid worsening business results.

According to a survey on financial and banking human resource supply and demand implemented by Institute of Manpower, Banking & Finance (BTCI) and Hay Group, Vietnam would have around 32,000 additional financial and banking graduates in 2013, however, just 20,000 are likely to be recruited by a financial and banking institutions. Meanwhile, the rest are likely to face a high risk of unemployment or do jobs that are not related to their degree.

The country is likely to see roughly 13,000 banking and finance students unemployed in the next four years, the survey said.

A senior manager of Vietcombank said parents often wanted their children to study “hot” majors such as banking, finance, accounting or business administration. However, given the current difficult situation, banks have had to slash recruitment because many of them were unable to even pay their staff wage bills.

A recent recruitment programme by Vietcombank’s branch in HCM City attracted more than 1,000 applications for just 30 positions. Most of people who were recruited are graduates with a master’s degree from abroad, while the remainder were graduates from some big local universities.

The Vietcombank official said, “Students who are trained abroad have much better language and soft skills compared to those studying locally.”

Skills and experience prioritised, not degrees

According to a deputy director of human resources at a commercial bank in HCM City the bank would only offer jobs to replace current staff vacancies. Banks were tending not to open new branches. Many banks wanted to cut the staff numbers, in contrast to their previous recruitment plans.

“It would be a waste of time and money for pupils and their parents not to select degrees which offer job prospects, but to just focus on trendy courses such as banking, business administration and accounting is a mistake. Graduates would face the risk of being unemployed,” he added.

A degree in banking, business administration and accounting was previously considered an advantage, but students who graduated with law and social science degrees could also apply for banking positions.

“It is important that candidates have skills, not just degrees in a particular subject,” he said.

Nguyen Thi Van Anh, Managing Director of Navigos Search, said recruitment requirements for banking, accounting and business administration were among the strictest of all subjects. Therefore, students who had experience and real knowledge as well as good communication skills would have a better chance of being employed rather than new graduates.

Vietnam set to earn $19 billion from exports

The garment and textile sector has set a target of earning 18.5 – $19 billion from exports in 2013, said Deputy General Director of Vietnam National Textile and Garment Group (Vinatex) Le Tien Truong at a press briefing on Jan. 8.

The group will follow a strategy of fast growth, high efficiency, suitable usage of investment capital and no mistake in 2013, Truong said.

According to the official, many businesses have received orders for the entire first quarter of the year. However, he added, the sector will continue facing a lot of difficulties relating to consumption markets, source of goods, clients and ability to occupy markets.

In order to develop the garment and textile industry in a sustainable manner, this year Vinatex will focus its investment on building knitting factories and yarn-dyed plants in the north and the south, and developing material areas.

The US, Japan and the European Union (EU) still remain the mainstay markets for the sector in 2013. The Republic of Korea is also a new remarkable destination which contributed more than one billion USD to Vinatex’s export turnover last year.

The garment and textile sector earned $17.2 billion in revenue from exports last year.

Hi-tech training centre breaks ground in HCM City

The US-based Saigon Advanced Institute of Technology LLC (SAIT) and its strategic partner Hoang Quan Real Estate Corp. (Hoang Quan) started construction on their SAIT high technology training centre at the Saigon Hi-Tech Park (SHTP) in Ho Chi Minh City’s District 9 on January 8.

The $6 million SAIT LLC-funded 1,000 square-metre project includes a post- graduate training centre and hi-tech product design and development hub.

“The centre will provide the students with hands on experience of real-world problems and projects as well as opportunities to hone their English, collaborative abilities and even work ethics, among other skills. This centre will also serve as a platform to provide strategic consultation and development services for corporate clients,” said SAIT LLC chairman and CEO Cao Huu Tri.

The centre will initially train over 4,000 students in 2014, with enrolments set to increase by 25 per cent annually in following years. SAIT intends to expand its training and services to biotechnology, medical equipment and devices, and green technology in the future, he added.

Tri blamed the slow progress on the project, which was initially granted its investment license in 2009, on the time taken to prepare course materials and the correct paperwork.

The Hoang Quan Real Estate Corporation is responsible for every aspect of the project’s design and construction. Work is expected to finish at the end of this year and the centre will start operation in first quarter of 2014.

Hoang Quan in its role as strategic partner to SAIT LLC has contributed around 35 per cent of the investment in SAIT LLC. SAIT LLC and Hoang Quan plan to upgrade the centre to a university level, with the intention to specialise in hi-tech training, said Hoang Quan chairman and CEO Truong Anh Tuan.

Vietnam’s seafood industry faces tough challenges in 2013

Last year, the country’s seafood industry failed to achieve the export target of $6.5 billion, and this year too, the industry is preparing to face even tougher challenges with difficulties mounting up.

Despite a slump in demand from Vietnam’s traditional markets such as the EU, the US, and Japan, many seafood producers still received orders to deliver by end of first quarter of this year. Among these, Bianfishco signed 40 contracts to export seafood to the US and is expected to bring in revenues upto $90 million.
Workers process shrimps at Minh Phu Seafood Corp.

However, not every seafood producer can confidently sign big contracts like Bianfishco. Avoiding big contracts and receiving smaller ones has become a reality in the country’s seafood industry as exporters worry they will not be able to fulfill the contract due to capital shortage.

Duong Ngoc Minh, chairman of Freshwater Fish Committee under the Vietnam Association of Seafood Exporters and Producers, shared that a shortage of capital and unstable input material are currently tricky problems for most enterprises in the seafood sector.

Receiving smaller export contracts is a solution to avert losses. According to a company in Can Tho City, in order to compete with rivals from Thailand, India, and Indonesia, Vietnamese seafood producers had to lower prices continually. With output price dropping while input overheads climbing, firms suffer bigger losses, Minh said.

It is expected that the cost for producing seafood will escalate by about 30 per cent. The association had asked the government for capital at favorable interest rates to help seafood producers, but until now it remains a matter of controversy.

Of late, the association has proposed extending credit limits for 20 leading pangasius exporters. These companies currently account for more than 60 per cent of total seafood export turnover of Vietnam and most of them own breeding farms so they are able to ensure material source as well.

Owning breeding farms seems to be the right solution for seafood exporters, however, most firms found it difficult to maintain operations at their breeding farms, mainly because of a financial crunch.

Besides lacking capital, firms also worry about the instability of material source because the country has not developed seafood source sustainably.

Shortage of material had been a persistent issue of the seafood industry for several years, but in the past three years, it has become more serious as more seafood breeders stopped farming due to losses.

In 2012, firms failed to achieve export targets for shrimps because of a deficiency of material as shrimps died enmasse from unknown reasons. If this situation prolongs, it will cause a bad effect to seafood exports this year.

Hence, authorities should start a project for material source as soon as possible to help seafood producers and exporters. Because there is no such project, seafood breeders and exporters have been managing for themselves. So it is not a surprise if they drop their business when they can handle it no longer. Up to now, about 30 per cent of seafood companies have announced bankruptcy and nearly 50 per cent of them in great despair, while the numbers of breeders who quit raising seafood were plenty.

There was an opinion that at first small breeders should associate with each other and comply with regulations on seafood breeding to prevent diseases as well as use of banned medicines to breed seafood.

In particular, the government should help breeders’ access loans at favorable interest rates. According to the Directorate of Fisheries, the industry will need VND301 billion for further development.

This year and following years, the government should take action to decrease the number of bankrupt companies, raise profits for businesses, and help the country’s seafood industry to maintain its position as the fourth largest seafood exporter in the world.

Gov’t mulls sanctions against false ads

The authorized agencies would impose a fine to the tune of VND 50 million (US$2,500) on any advertisement providing false information, according to the draft Decree on sanctioning administrative violations related to post, telecommunication, information technology, and radio frequencies.

Specifically, advertising activities, which carry deceitful information on product quality, hurt people’s honor and prestige, or violate rights and legitimate interests of organizations and individuals are proposed to get fines of between US$1,500-2,500.

Advertisements with images, words or sounds incompatible with Viet Nam’s traditions and customs shall be subjected to fine levels ranging from US$500-250,000, the draft document says.

A fine up to US$1,000 shall be imposed on acts of falsifying information, providing wrong information to bait customers.

The draft is now provided for public comments.

VN-Japan Industrial Development Cooperation Strategy outlined

Deputy PM Hoang Trung Hai on January 7 asked the Ministry of Planning and Investment to submit to the PM the country’s Industrialization Strategy in the Viet Nam-Japan cooperation framework till 2020, with a vision to 2030.

The strategy aims to realize the two countries’ Joint Declaration issued in October 2011.

Japan’s cooperation and assistance in forming and realizing policies and actions related to Viet Nam’s industrialization till 2020 were appreciated.

The strategy proposes some potential strategic industries in Viet Nam, which are seen as actively affecting the development of other industries and the industrialization process and making breakthrough in attracting Foreign Direct Investment (FDI), especially from Japan, to create globally competitive industries.

After examining and evaluating the draft content and related documents, the Deputy PM has assigned the Working Group to work with the Japanese side to submit the draft strategy to the PM in March 2013.

Rubber group’s restructuring plan ratified

Under the plan for the period 2012 – 2015, the core business lines of Vietnam Rubber Industry Group are rubber growing, processing and trading, artificial wood processing and rubber industry.

The group is also permitted to operate rubber industrial parks on its land converted in accordance with the land use plan ratified by the government.

The approved plan maintains the parent company – Vietam Rubber Industry Group and other units like Rubber Research Institute, Rubber Professional Technical College, Rubber Journal and Rubber Medical Center.

The Group will hold 100 per cent charter capital of 22 single-member limited liability companies, 50 per cent charter capital of 18 joint-stock firms, and under 50 per cent in other 20 companies.

Meanwhile, the Rubber Finance Company will be merged into the parent company VRIG.

In terms of financial and investment restructuring, VRIG must divest its capital in 23 companies and withdraw part of its capital contribution in two firms.

Moreover, additional capital shall be invested to gain the dominant power in Ben Thanh Rubber JSC and to turn Nghe An Rubber JSC into a subsidiary of the Group.

In Decision No. 38/QD–TTg, VRIG is responsible for developing a development strategy for the period 2012 – 2015, orientations to 2020 and submit it to the Prime Minister for consideration and approval.

VASEP: Vietnam’s shrimp producers not subsidised

Vietnam’s shrimp producers and exporters have been operating under the market mechanism for many years and not received any subsidy from the Government.

Tran Thien Hai, President of the Vietnam Association of Seafood Exporters and Producers (VASEP), made the statement in response to US companies’ filing of an anti-subsidy lawsuit against shrimp imports from Vietnam.

According to the Competition Management Department under the Ministry of Industry and Trade, on December 28, 2012, US shrimp producers filed a petition asking the US Department of Commerce (DOC) to conduct anti-subsidy investigation into frozen warm-water shrimp imported from several countries, including Vietnam.

They also asked the US International Trade Commission (ITC) to review losses caused by the imports, he added.

This is the US businesses’ fourth anti-subsidy lawsuit against products imported from Vietnam since 2009, after plastic bags, circular welded carbon-quality steel pipes and steel hangers, and the first against the country’s agricultural products.

Hai said that VASEP has informed Vietnamese businesses of the case and encouraged them to gather necessary documents and date to serve the US investigation.

According to VASEP, in the first 11 months of 2012, the US was the second largest importer of Vietnamese shrimp, after Japan. The turnover of Vietnam’s shrimp exports to the US in the period exceeded US$425 million, accounting for 20.6 percent of the country’s total shrimp exports.

47 investment projects licensed in Lao Bao

Lao Bao, a special economic- commercial zone in the central province of Quang Tri has attracted 47 projects capitalized at nearly VND3,430 billion as of December 2012, of which 34 projects are operational.

The Lao Bao is the starting point of the East-West Economic Corridor (EWEC), linking Laos, Thailand, Myanmar and Vietnam.

Annual total export-import turnover though the Lao Bao international border gate shows constant growth, already rising  to US$70 million in 2012 from US$ 23.6 million three years ago.

The Quang Tri Provincial People’s Committee has called on relevant ministries and agencies to help upgrade Lao Bao infrastructure facilities under the Prime Minister’s plan for border gate economic zone development till 2020.

Exports to Middle East hit US$4.2 bln

Exports to key Middle East markets, including the United Arab Emirates (UAE), Turkey, Saudi Arabia, Israel and Iraq, brought in US$4.2 billion to Vietnam last year.  

The figure represents an increase of 65 percent over 2011, Vietnam Customs reports.

The UAE continued to be the largest consumer of Vietnamese goods in the region, with imports reaching US$2 billion.

It was followed by Turkey with US$850 million and Saudi Arabia with US$597 million.

Vietnam’s key exports to the region include cell phones and spare parts (earning US$1.5 billion), fiber (US$340 million), seafood (US$218 million), computer and electronic products (US$160 million) and garments (US$136 million).

According to the African, West and South Asian Markets Department under the Ministry of Industry and Trade, some big economies in the Middle East have regained growth momentum, while the UAE, Turkey, Saudi Arabia and Israel have had stable political and social environments, facilitating trade cooperation and investment.

Coffee sector gearing up for sustainable growth

Public-Private Partnership (PPP) for coffee development is considered an ideal solution for the coffee sector, as investors involved in the project are committed to purchasing products in advance.

The objective of the PPP model aims to help farmers improve the value of agricultural products and ensure that all partners enjoy the best benefits from a commodity-oriented agriculture.

According to Minister of Agriculture and Rural Development Cao Duc Phat, the Government of Vietnam is pressing ahead with administrative reform to create favourable conditions for investors in agricultural and rural areas.

Since an initiative was put forth at the World Economic Forum in HCM City in June 2010, the task force has conducted six multilateral meetings to identify major challenges and develop key strategies for sustainable development of the coffee sector in Vietnam. Currently, the task force is implementing two pilot projects in the provinces of Lam Dong, Dak Nong and Dak Lak.

The PPP project on coffee development is a venture between foreign and domestic investors, including international associations such as the World Economic Forum, 4C Association, Rainforest Alliance, Utz Certified, and local institutions such as farmers associations, the Ministry of Agriculture and Rural Development, the Western Highlands Agro-Forestry Scientific and Technical Institute (WASI), VICOFA, local authorities, and processing factories.

The project includes two major groups, one in charge of inputs and the other of outputs. The first is comprised of Syngenta, Bayer, BASF and Yara International with the Ministry of Agriculture and Rural Development and the National Agricultural Encouragement Centre as providers of technical know-how.

Nestle and Neuman are in charge of ensuring the quality of the final products and maintaining distribution outlets. Meanwhile, the International Cooperation Department under the Ministry of Agricultural and Rural Development is managing coordinator of the project.

Representatives from Syngenta Vietnam said that the PPP project in Dak Lak is a typical success story, starting with only 20 households on just 2 hectares in 2010. Two years later, the number of households increased to 70 on 20 hectares. Up to now, it has established close links between coffee growers and farmers in value chain for various kinds of coffee products.

As the value of Vietnamese coffee in the world market is not high, the focus of the project is on improving the quality of coffee growing and processing.  

Le Ngoc Bau, Director of WASI, spoke of the duties and responsibilities of all companies involved in the project. For example, plant protection companies are responsible for providing pesticides, while fertilizer companies are in charge of stable production and supply. After the project is completed, it is possible that foreign companies will no longer have enough funding for further investment and, maybe, farmers will have to find financial support on their own, Bau said.

As for those involved in the PPP project, what’s worth doing is worth doing well at any cost, he added.

70,000 sea travellers to visit Vietnam

The country’s leading tour operator Saigontourist has already welcomed 4 five-star cruise ships since January 1, carrying more than 6,900 passengers to Vietnam.

The travel agency is scheduled to receive another 41 five-star cruise ships operated by Star Cruises to Vietnam, which will bring over 70,000 passengers to Ha Long, Danang, Nha Trang and Ho Chi Minh City.

The event is under a new cooperation programme signed between Saigontourist and Star Cruises, marking an important development in the long-term relationship between the two enterprises since 1996.   

Over 2012, Saigontourist welcomed 96 cruise ships, delivering 170,000 visitors to the country.

On January 7, five-star liner Costa Victoria, under Costa Crociere S.p.A, arrived in Ho Chi Minh City with 2,400 passengers and crew members on board mainly from Italy, Spain and the UK.

Two days later, it went on to Danang, where passengers made a tour of Ngu Hanh Son (Marble Mountains), the Cham sculpture museum, Linh Ung pagoda and Han market.

On January 9 more than 200 tourists from the US, Australia and Canada set foot in Danang on the My Aegean Odyssey cruise ship, visiting key sightseeing spots in the central region.

January is considered a peak time for Danang to receive cruise ships, as the present schedule affirms. Sixteen cruise ships are planned to dock at Tien Sa port alone, carrying about 15,000 foreign arrivals.

According to Danang’s Department of Culture, Sports and Tourism, there will be 48 cruise ships arriving in Danang with 45,000 passengers over the first quarter of 2013, up 32.7 percent on the same period last year.

Vietnam makes top 10 travel list

The UK-based travel website iWantSun listed Vietnam among the top 10 countries to visit this year.

The Luxpresso paper of India also rated Vietnam as one of the places to discover in 2013.

Many foreigners see Vietnam and Thailand as the most popular destinations in Southeast Asia.

Visitors especially like Hanoi, known for its charming cultural heritage. Hoi An and Hue are popular for their culinary delights and Nha Trang for its white sandy beaches.

On top of the UK’s iWantSun were Mexico, Sri Lanka, Brazil, Turkey, the US, the Republic of Korea, Slovakia, Tanzania and Grenada.

According to the General Statistics Office (GSO), more than 6.6 million international visitors came to the country in 2012, a year-on-year increase of 9.5 percent.

Expert says ‘ministries are making unwise moves’

Citizens and businesses are suffering higher fees and prices of power and water, inconsistent with what the Government has vowed to do and reflecting the heartlessness of ministries, said economist Pham Chi Lan.

In late 2012, the Ministry of Finance proposed a lower corporate income tax of 20% for small and medium-sized enterprises, along with value-added tax cuts. Though agreeing with this proposal, Lan suggested the finance ministry should petition the Government to take stricter control on price and fee hikes.

“The Government gives with one hand and takes back with the other, but it takes more than it gives,” she told the Daily in an interview.

While tax reductions are awaiting approval of the National Assembly, local enterprises are burdened with fees.

Directly impacted by the road use fee, transporters are seeking to raise charges, while producers have to cope with higher transport charges and production costs, as power and water prices are also up.

Citizens are suffering more. Due to higher power and water prices, they will likely curtail spending during the upcoming Tet holiday, said Lan.

“The Government fully realizes this paradox, but still allows ministries to do so. If generating revenues for the State budget is given as an excuse, it is totally unconvincing,” she stressed.

The reason why the State budget revenue was off target in 2012 lies in the desperate trouble of local enterprises, she explained. Fee hikes create more difficulties for them when they are unable to sell goods and raise prices as purchasing power is very poor.

“Ministries are making unwise moves. When it is necessary to nourish sources of revenue, they do the opposite. This shows that they are indifferent to people’s livelihood and difficulties of businesses,” said the economist.

She expressed concern that many enterprises could not survive 2013 and as a result, a lot of workers would be jobless. Then, consumption would further weaken and so the vicious circle would continue, she noted.

High inflation will remain a headache in 2013, she predicted. The consumer price index (CPI) will likely rise at a same rate, but what matters is the reason behind it, she noted.

By the end of 2012, CPI had picked up 6.81% against end-2011. Still, the average growth rate in 2012 against the average rate in 2011 was still some 10%.

“In comparison with other countries in the region, CPI in Vietnam is higher, yet growth is lower. The reason is shrinking consumption rather than improved productivity and efficiency,” she said.

The key solution for this problem, according to Lan, is economic restructuring, in which the central task is to reallocate resources to all economic sectors in a transparent way. The resources should not be prioritized for State-owned enterprises any longer.

Restructuring of State-owned enterprises, the banking system and public investment must continue to be done. Meanwhile, in the short term, ministries should cut back on their spending and investment, she suggested.

Packaging factory meets international standards

The first pharmaceutical packaging materials factory in Vietnam to meet the international Good Manufacturing Practice Standard has started operation.
 
The factory, built by the Oai Hung Company, is also the first to use the UV inkjet technology, following the Ministry of Health's regulations that start from April 1, factories labeling packaging materials in direct contact with the products must use the new printing technology.

Drugs in Vietnam are manufactured  to meet GMP Standards, however many of the label packaging materials don’t meet international requirements.

The new factory will focus on PVC, PET film, PVdC film, and Aluminium film which are currently imported by most of the food companies in Vietnam.

O Cam Tai, Head of Oai Hung Company said, "Providing pharmaceutical packaging materials that meet international standard is vital. We want to provide better products and improve Vietnam's products position in the international market." The company also has clean laboratory system dedicated for label and packaging materials.

The factory was built in Tan Binh Industrial Park, HCMC with total VND320 billion (USD15 million) of capital. It has the capacity to produce 6,000 tonnes of aluminium foil per year.

Hoa Lac Hi-Tech Park attracts huge investments

Hoa Lac Hi-Tech Park in Hanoi City has granted investment certificates for 68 projects so far with a total registered capital of VND52.24 trillion.

Among the projects, 20 have started operations while 13 are under construction. In 2012, the park gave investment certificates and land use rights of 110.57 hectares to seven projects with a total registered capital of about VND20.81 trillion.

Last year, some big projects like Vietnam National Satellite Center, Viettel Group, FPT University, Nissan Techno Vietnam, and Vietnam Space Center, came up at Hoa Lac Hi-Tech Park.

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