Bullet train gets a second look

 

The Ministry of Transport is conducting a new feasibility study for the construction of North-South Express Railway, with a focus on two initial sections – Ha Noi - Vinh and HCM City - Nha Trang. The study has been initiated after the National Assembly last June rejected the complete 1,570km North-South Express Railway project, saying the cost of US$55.85 billion was prohibitive.

 

"We have to build an express railway, but every step of the construction will be studied carefully and properly and we are conducting a new feasibility study for that," said Transport Minister Ho Nghia Dung.

 

He told the Sai Gon Giai Phong (Liberated Sai Gon) newspaper that the study would define clearly the technology to be used, capital mobilisation, project process and construction duration as required by the National Assembly.

 

Dung estimated the study would take two to three years to complete and would include an investigation into the country's resources and capacities for starting a new project before submitting it to the parliament for approval.

 

The ministry had no intention to replace the express railway project with one that expands the existing railway system to 1.45m from the current 1m as suggested by a few NA deputies and citizens, he said.

 

Dung said an expansion would require that the whole railway system stop working.

 

He said that when the country's express railway system was completed, it would connect with other systems in the region, like China's Kunming Province.

 

Illegal coal barges seized by customs

 

The Customs Control Team No 2 of the Quang Ninh Customs Department on Monday seized two ships carrying over 200 tonnes of coals worth VND100 million (US$5,000) for having no invoices and being of unknown origin.

 

Pham Ngoc Truong and Dinh Van Bon, two coal shipowners admited to buying coal from Hoanh Bo District's Do Bang Port for sale in Ninh Binh Province.

 

The provincial police have discovered eights ships carrying illegal coal over the past two weeks.

 

Electronics retailers dangle false promises

 

Consumer electronics retailers are apt to offer big discounts on thousands of products to commemorate various occasions, be it a festival, a birthday, or an establishment anniversary.

 

However, a Sai Gon Giai Phong (Liberated Saigon) report cites market observers as saying customers have to be careful in taking advantage of these promotions lest they end up buying low-quality products or paying higher prices than normal for better quality products.

 

On the occasion of Christmas and New Year, the Thien Hoa Electronics Center in District 10 had advertised discounts on many products, not to mention a chance to win a seven–seat Nissan Grand Livina. The promotion programme was called "Vui Giang sinh, rinh qua tang" (Happy Christmas, take away your gift).

 

Holding some of the store's advertising notices, Tran Xuan Trung, a resident of District 10's To Hien Thanh Street said "At first glance, everybody feels that the supermarket is offering big preferential prices to customers. But, reality does not match the advertisement."

 

Nguyen Linh, a customer who lives in District 5, said: "I bought a Canon Powershot A495 at Thien Hoa Electronics Center two days ago for VND2.49 million (US$127) with a freebie of a 2G memory card. The sales price before the discount was listed as VND3.49 million ($178).

 

"But when I looked at other electronics shops, I discovered that the camera was priced at just VND1.9 million ($97.4) along with the free 2G memory card and even a camera case," she said.

 

Under the "Big Bang" promotion programme, the Nguyen Kim Electronics Supermarket is offering big discounts on more than 500,000 products.

 

However, many of them are priced higher than at other electronic shops.

 

For instance, a Sony DSC-W310 camera is sold for VND2.9 million at Nguyen Kim, VND1million higher than at other places.

 

Similarly, a Nokia X6-8G mobile phone is priced at VND6.38 million while other shops are selling it for VND6.155 million.

 

Price of laptop products is also different at electronic and computer shops, making customers confused, they don't know which stores offer real promotion.

 

For the same kind of Acer laptop (AS5745G-382G 59 Mnks), the Hoan Long and Phong Vu computer shops charge VND13.299 million with a mouse, VND400,000 and Bitdefender anti-virus software as gifts, while the Thien Hoa shop sells it for VND12.79 million.

 

Vu Quang Truoc, a resident of Go Vap District, said he bought a Transcend 8G USB worth nearly VND150,000 at an electronic supermarket in District 12. However, when using it, he figured out that its 8G of storage capacity is virtual.

 

"The USB was advertised to have 8G of storage capacity, but I can store only 1G," Truoc said.

 

He asked the supermarket to exchange it for another USB, but is still worried about the quality of the new one. "I don't know for how long it can work."

 

A week ago, Ngo Thi Giang in District 5 bought a Thermaltake Fan for VND688,000. After five days of use, the fan stopped working.

 

She took the fan to the shop, however the seller said that the producer does not have a warranty for the fan, so the shop could not change or fix the fan for her.

 

Also, many customers tend to buy products attracted by the big discounts on offer, not because they really need them.

 

Currently, there are no figures available on how many per cent of consumers who buy products from promotion programmes end up not using them or use them only to have the products spoilt after a short time.

 

"The average Vietnamese customers' mental make-up shirks from confrontation with other people. They rarely protest against sellers after buying poor-quality products. This should be changed," the newspaper quoted an expert on consumption trends as saying.

He also recommended that sellers clean up their act before their fraudulent practices prompt consumers to boycott them.

 

Exports to Japan increase by 23% to $7.7 billion

 

Vietnamese exports to Japan earned US$7.7 billion last year, a 23 per cent increase year on year, according to the Ministry of Industry and Trade (MoIT).

 

Key export items included textile and garments, equipment and components, seafood, electric cables and wooden goods.

 

Deputy head of MoIT's Multilateral Trade Policy Department Le Quang Lan urged Vietnamese firms to further take advantage of the Viet Nam-Japan Economic Partnership to effectively approach the potential market.

 

The deputy head called for closer co-operation between firms and Japanese importers, which could help companies better understand the market and the country's tax policies.

 

Firms need to improve their products' quality to comply with Japan's high hygiene standards and create innovative products that will be competitive at this market, said Lan.

 

It was not an easy task for Vietnamese enterprises to build trust with their Japanese counterparts and then establish a close partnership, said Nguyen Thi Bich Thuan from Cau Tre Export and Processing Joint Stock Company.

 

But if the firms were able to establish strong relationships, then they would have huge opportunities to enhance their presence in the market while seeking out other partnerships, she said.

 

Under the agreement, which became effective on October 1, 2009, Viet Nam's leather shoes, garments, seafood and farm goods enjoyed a tariff-free period. The agreement also offered Vietnamese companies advantages concerning export-import prices and incentives to boost export of promising goods such as electronic products and chemicals.

 

Head of the ministry's Asia-Pacific Market Department Vo Thanh Ha said that there was still a door for the firms to expedite trade ties due to the two countries' close political and economic ties. Vietnamese goods make up only 1 per cent of Japan's imports, while Chinese goods account for 20 per cent, Thai's make up 2.9 per cent and Malaysian goods have a 2.8 per cent market share.

 

Long An exports total $1.4 billion

 

Export turnover of the southern province of Long An hit US$1.44 billion last year, a 35 per cent increase over 2009.

 

Export turnover of domestic enterprises accounted for $445 million, up 20 per cent against 2009. Export turnover of foreign -invested enterprises totalled $996 million, rising 43 per cent.

 

Main exported commodities also increased in turnover, including rice, cashew nuts, garments, food wear, and seafood processing; with garments rising 43 per cent and footwear products increasing 46 per cent.

 

Coffee prices reach 18-month high

 

Coffee prices increased to VND37,000 per kilo on the domestic market on 31 December. Prices of one kilo of the commodity rose by VND900-VND1,000 against the previous day, marking the highest price for the product since the middle of 2008.

 

The increase in coffee prices on the domestic market was due to rising prices on the London coffee trading floor, which registered a US$70 per tonne increase to $2,065 per tonne.

 

Cooking gas price to decrease this month

 

Petroleum Viet Nam Gas (PV Gas) Co will reduce gas prices by $10 per tonne.

 

The reduced price is part of a price stabilising programme of the Government. Gas price in the world market increased by $2.5 per tonne over December, 2010.

 

Twin towers constructed in Nghe An

 

PetroVietnam Nghe An Construction JSC inaugurated its twin-tower in the central province of Nghe An with a total investment capital of VND630 billion (US$30 million).

 

The 25-floor twin-tower, covering an area of 4,700sq.m.

 

Hai Duong achieves $3b in export value

 

Hai Duong's export value totalled nearly US$3 billion in the 2006-10 period, an average increase of 55.7 per cent per year.

 

Total export value hit over $1billion last year, a rise of 36.5 per cent over 2009. Of which, the export turnover of cable to the US and Japan market accounted for $280 million and the garment and textile turnover, $220 million respectively.

 

Standard Securities finalises private offerings

 

Standard Securities Company finalised a private offering of 26.5 million shares, which helped to increase its charter capital to VND300 billion (US$14.3 million).

 

The company sold 21.1 million shares to seven existing shareholders, 600,000 other shares to Viet Nam Maritime Bank and 37,000 shares to their remaining employees.

 

After the sale, the company's founders hold 20.17 per cent stake in the company, while major shareholders hold 62.02 per cent. Major shareholders include Tin Phat Fund Management, Alpha Fund Management and the Development Investment Construction Corp.

 

Vincom to sell shares overseas

 

HCM City-listed Vincom will sell a maximum of 93 million shares on the Singapore market to raise capital to complete its ongoing projects and to increase its working capital.

 

The sale, which is worth VND8.8 trillion ($419 million), is expected to be implemented in the first quarter. Shares will be listed on the Singapore Stock Exchange after the issue.

 

On December 29th, the company increased their charter capital to VND3.7 trillion ($176.1 million).

 

Hoang Anh Gia Lai issues bonus to shareholders

 

Property trader Hoang Anh Gia Lai issued a share bonus to existing shareholders at the 2:1 ratio. The bonuses were generated by capital surpluses.

 

The company's shareholders approved the overseas lending plan by green lighting a bond issue that was worth US$200 million. The five-year bonds are expected to be issued in January. The bond coupon is paid every six months.

 

The property trader estimated the company earned VND800 billion ($38.1 million) in pre-tax profits during last year's fourth quarter, which would raise the company's profits for the year to VND3 trillion ($142.9 million).

 

US group to double export assistance

 

The US-based non-profit organis-ation Kearny Alliance plans to double the scope of its Developing Country Export Assistance Programme this year.

 

"We have published 28 Developing Country Sourcing Reports and supported hundreds of exporters over the past two years.

 

"We plan to double the scope of the Developing Country Export Assistance Programme by publishing 24 Developing Country Sourcing Reports next year, up from 12 this year," said Alexander Boome, programme director.

 

Many exporters from Viet Nam and other emerging economies have benefited from the programme so far.

 

The complete aid package offered to Vietnamese exporters includes marketing channels that give them exposure to global buyers such as Global Sources' B2B marketing websites, emerging market reports and training in making effective inquiries.

 

Programme supplier beneficiaries in five countries, half of whom are in Viet Nam, have so far received US$725,000 worth of export orders.

 

Most supplier beneficiaries expected to generate a further US$5.5 million within the next 12 months, a Kearny Alliance survey has found.

 

Over the last two years, the programme has helped create more than 2,000 jobs in Viet Nam, India, Cambodia, the Philippines and Indonesia.

 

"By receiving more sales orders, suppliers are expected to hire additional workers, thus joining hands with us to provide decent and lasting employment for the local community," said Jason Vu, manager of the export assistance programme in Asia.

 

"We're expanding due to the success of the programme to date as measured by export sales generated and jobs created. Also, we see growing buyers‘ interest in information on reliable export suppliers from emerging Asian supply markets," Boome said.

 

Dang Quang Thang, director of Tiamo Ltd Co which makes handbags and fashion accessories, said, "We are pleased and excited to have received good sales through this free programme as we started uploading our products on to Global Sources Online in 2009.

 

"We have received ten orders so far from the US and Europe for our handmade handbags, requiring us to employ more than 100 workers."

 

Pham Hoa, export specialist at the Sunhouse Group JSC, said featuring in the Viet Nam Sourcing Report and using the B2B marketing website to market their kitchenware products had proved fruitful.

 

"We've got very good sales leads from this programme. We will try to convert them into more export orders."

 

"Viet Nam is among the most dynamic market economies on which the programme is extensively focused," Vu said.

 

"Our programme is looking for small- and medium-sized firms, dedicated entrepreneurs who aspire to work with global buyers and tap new export markets," Boome said.

 

The number of supplier beneficiaries from Viet Nam has reached around 250 so far, making up 50 per cent of total beneficiaries participating in the programme, according to the Kearny Alliance.

 

Kearny Alliance is a non-profit foundation that partners with other international organisations to further its mission of "Aid through Trade", to advance international development through trade-related business, education, training and applied research.

 

CMC plans to divest stake in Bao Viet Bank

 

Software and IT services provider CMC Corporation will withdraw its investment in Bao Viet Bank, under a plan approved last week by CMC's executive board.

 

However, a representative of Bao Viet Bank told Viet Nam News by telephone yesterday: "This was just an approval of a master plan to withdraw its stake in the bank. But, in theory, a founding shareholder is not able to transfer its stake within the first five years of operation. So, this plan to recover CMC's investment may be carried out only after two or three more years – or may never be done at all if CMC finds the plan infeasible."

 

No one from CMC was available for comment yesterday.

 

Bao Viet Bank was established in 2009, with insurer Bao Viet Group owning 52 per cent, CMC Corporation 9.9 per cent, and Vinamilk 8 per cent.

 

Gas imports to be reduced in 2011

 

The Ministry of Industry and Trade has passed a regulation for gasoline imports in 2011.

 

Under the regulation, domestic gas enterprises will be able to import 11 million cu.m of gas, of which 6.35 million cu.m will go to the Viet Nam National Petroleum Corporation.

 

Hai Phong welcomes cruise ship passengers

 

Five-star cruise liner Europa, which is transporting 450 foreign tourists, docked at the port in Dinh Vu, Hai Phong, on Sunday.

 

The ship was on a one-day tour in Hai Phong, during which tourists were able to visit villages and places of interest in the inner city.

 

Hai Phong is aiming to welcome 900,000 foreign tourists in 2011, which would be a 7.14 per cent increase over the previous year.

 

Military bank opens new branch in Laos

 

Viet Nam's Military Bank (MB) launched a branch in the Lao capital city of Vientiane on on Sunday with US$12 million in initial capital.

 

The branch will provide business and individual clients with short-, medium- and long-term loans for expanding investment and consumption activities for individuals and businesses.

 

On the occasion, the branch signed co-operative contracts with Unitel, a joint-venture between Viettel Global and Lao Star Telecom, PV Oil and Phou Luong Company.

 

The presence of the MB in Laos aims to further promote trade ties between Viet Nam and Laos.

 

Plastics industry needs long-term strategy

 

 Although the fledgling plastics industry has recorded remarkable growth over the recent period, it still faces many difficulties and it is essential to devise a long-term development strategy, experts have said.

 

This conclusion was drawn at a conference to discuss a draft plan for the development of the plastics industry until 2020 held in Ha Noi on Sunday.

 

The industry posted US$1 billion in export turnover last year, 21 per cent up against the previous year. It is expected that the sector will retain an annual growth rate of 18-20 per cent by 2020.

 

The industry currently exports products to 41 countries, including the US, the EU, Japan and the Philippines.

 

According to the Ministry of Industry and Trade (MoIT), the country now has more than 1,000 plastics companies, located mainly in HCM City and the southern provinces of Dong Nai, Binh Duong and Long An, generating about 118,000 jobs.

 

Le Quang Doanh, chairman of the Viet Nam Plastics Association (VPA) said the sector needed restructuring to raise the proportion of value-added products such as packing and construction materials by 2015.

 

Ho Thi Kim Thoa, deputy minister of MoIT, affirmed the sector had great potential for the domestic sale of household products.

 

In terms of technical products made for electronics, construction and other manufacturing sectors, Vietnamese products were greatly appreciated by importers, she said.

 

"To sharpen the competitive edge of local producers, manufacturers need to further improve the quality of their products, diversify designs and expand their distribution networks," she said.

 

Doanh recommended the Government and relevant State bodies develop systems to collect waste plastics more systematically, as the resources would help ease pressure to import raw materials for local production in the face of a global price hikes.

 

"This will not only help Viet Nam protect environment, but also save foreign currency spent on imports," he said.

 

Viet Nam currently needs about 2.2 million tonnes of raw materials such as polyethylene (PE), polypropylene (PP) and polyvinyl chloride (PVC) and hundreds of other chemical accessories, whereas local sources can only provide 450,000 tonnes.

 

Dao Duy Kha, deputy general director of the Viet Nam Plastics Company, pointed out deficiencies in the sector, particularly in design and products that lacked the qualifications necessary to meet standards set by international importers, with export value only accounting for a tiny 0.02 per cent of the total global export value.

 

Experts have urged companies to apply modern technologies to improve product quality and cut costs.

 

Truong Thi Huyen Nga, an official from the MoIT's financing department said that to encourage local companies to produce materials, the Government should offer preferential interest rate loans for a duration of 10-15 years.

 

Corporate income tax should be reduced to 10 per cent from the current rate at 25 per cent in the first five years of operation since it makes profit, and to 15 per cent in the next five years, she suggested.

 

Nga also urged firms to conduct further market in existing markets and explore new opportunities.

 

Foreign investment tipped to rise

 

Foreign investment in the Vietnamese stock market is expected to rise this year by about 20 per cent compared to last year, says the head of HCM City Securities Co's research department, Fiachra MacCana.

 

The net stock buys of foreign investors surpassed VND16 trillion (US$768.6 million) in 2010, second only to the 2007 peak of VND23 trillion ($1.1 billion), and this was remarkably high for a year in which many investment funds had faced difficulties in raising capital.

 

"The level of [foreign] investment is quite low in Viet Nam in comparison with other Asian markets, and, due to the cheap share prices here, Viet Nam will attract more investment this year," MacCana predicted.

 

Foreign investment inflows last year, while positive, remained small compared to the amounts that foreigners were pouring into similar markets in Malaysia, Indonesia or Thailand.

 

Vietnamese shares were cheap and their price-to-earnings (P/E) ratio good, but those factors had not been enough to overcome such negative factors as high inflation, exchange rate fluctuations and State policies that have continued to undermine the confidence of foreign investors, he said.

 

"Solutions lie in Government policies, and when it sets a target, it should stick to it, at least in the medium term, for the market to have clear signals."

 

Foreigners only increased their buys whenever the market fell significantly and were active to sell whenever the indices climbed to high levels. "In other words, they were not confident enough to push the market too much higher," he said.

 

Nevertheless, over the past time, foreign money frequently supported the market and cushioned declines in major indices – especially on the HCM City Stock Exchange, the market to which over 94 per cent of net foreign investment was directed.

 

Blue chips in the financial and real estate sectors attracted the greatest foreign attention, with the five codes most active in among this investor segment last year being property developers Hoang Anh Gia Lai (HAG) and Kinh Bac City Development (KBC), insurer Bao Viet Holdings (BVH), Saigon Securities Inc (SSI), and financial conglomerate Ocean Group (OGC).

 

"Return on investment in these sectors is much quicker than in other sectors," MacCana explained, noting that profit margins in the manufacturing sector were low.

 

VN firms invest $3b overseas

 

Vietnamese enterprises pumped about US$3 billion into 25 countries and territories last year, according the Ministry of Planning and Investment's Foreign Investment Agency (FIA).

 

Of the total, $2.93 billion was for 107 new projects. The other $87 million came from nine existing projects that increased their capital levels.

 

However, actual capital disbursed totalled about $900 million – mainly in the mining industry, in agro-forestry and fisheries, telecommunication, distribution and retail, FIA said.

 

During the past 12 months, Venezuela attracted the largest share of Vietnamese investment with $1.83 billion. It was followed by Cambodia with more than $387 million, Mozambique with $345 million and Laos with $132 million.

 

The rate of return on overseas investment remained modest as most large-scale projects were in their early stages, the agency said in its latest report.

 

FIA director Do Nhat Hoang said it was necessary to monitor overseas investment to regulate capital outflow – and keep the economy stable.

 

Registered capital for overseas investment in 2011 is expected to reach $1.5-2 billion and a total of $700-900 million actually disbursed.

 

Vietnamese businesses, including 70 per cent in the public sector, have so far invested more than $8.75 billion in 559 overseas projects. However, only 300 submitted annual reports to agencies.

 

To better manage overseas investments, the ministry plans to work with provincial business registration offices, tax offices and the police to inspect firms that did not file reports on their overseas projects.

 

The ministry will ask the police to investigate them and possibly revoke their licences to invest abroad.

 

Ha Noi bond market enters adolescence

 

xSince separate bond trading systems officially began operations on the Ha Noi Stock Exchange in September 2009, the market has grown to a listing of 500 bond codes with a value of VND223.3 trillion (US$10.6 billion) – equivalent to about 12 per cent of the national GDP, according to the exchange.

 

Government bonds account for about 75 per cent of the total market value.

 

The members of the bond exchange now include 25 securities companies, 16 domestic banks andfour foreign-invested banks, with the few foreign players accounting for up to a fifth of the total average trading value.

 

The bond exchange allowed transfers more directly without paying brokerage fees for brokers as well as controlled risks, with bonds being deposited at the depository centre rather than at a brokerage, said the deputy director of the Military Bank's capital department, Luu Tien Cuong.

 

High yields had a negative impact on the growth of the bond market last year, according to an analysis from the Bank for Investment and Development of Viet Nam (BIDV).

 

"This has resulted in the ineffectiveness of bond auctions and low market liquidity in 2010," said a senior official who asked to remain anonymous.

 

To improve the situation, the State Treasury, the Ha Noi Stock Exchange and the Viet Nam Securities Depository last week signed agreements enabling them to jointly conduct auctions, and register, list, deposit and pay for Government bonds. Under the new system, the Treasury will also give the exchange early notice of capital mobilisation plans and release quarterly and annual reports.

 

Under the agreement, these bodies will also co-ordinate to shorten the duration for trading newly-issued bonds from 10-14 days to six days after the initial bond auction.

 

Tran Van Dung, director of the Ha Noi exchange, said the exchange would also restructure the way bonds are listed by matching bond codes with the same duration and interest rates, making it easier for investors to trade.

 

PetroVietnam sets $23 billion target

 

PetroVietnam Group announced a target of VND486 trillion (US$23.1 billion) in revenue this year, in an online press conference yesterday.

 

At conference sites in Ha Noi, HCM City, Ba Ria-Vung Tau and Quang Ngai, the group said that its revenue would come from crude oil, gas, power, fertiliser, petroleum, chemical products and other services, and it expected to contribute VND101 trillion ($4.8 billion) to the State Budget this year.

 

Among its products, Petrovietnam planned to churn out 15 million tonnes of crude oil and 8.2 billion cu.m of gas this year.

 

To realise these objectives, the group would further restructure its organisation and its member companies; remodel management; develop human resources; apply advanced technologies; boost oil and gas exploration locally and abroad and make bold investments, said Le Minh Hong, the group's deputy director general.

 

Dinh La Thang, the group chairman said: "PetroVietnam needs a total investment capital of $5-6 billion this year, 30 per cent of which will come from its ownership capital and the remainder from equitisation, initial public offerings by its members and commercial loans among others."

 

This year it will officially start the construction of the Viet Nam Oil and Gas University, the first such institute in the country.

 

Petrovietnam also mapped out a five-year plan from 2011-15 with a combined revenue estimated at VND3,040 trillion ($144.8 billion), VND650 trillion (nearly $31 billion) of which will go to State coffers.

 

It anticipates to produce about 90 million tonnes of crude oil and more than 51 billion cu.m of gas over the next five years.

 

Last year, it turned over VND478 trillion ($22.8 billion), a year-on-year increase of 59 per cent.

 

"Oil and gas services contributed around VND152 trillion, making up 32 per cent of the total turnover," Hong said.

 

"The commencement of operations at the country's first oil refinery in Dung Quat and a polypropylene factory last year marked a significant milestone for the oil and gas industry's development and completed a comprehensive model from exploring and exploiting to processing final products," he added.

 

Vietsovpetro, an oil and gas joint venture between Viet Nam and Russia, will officially celebrate the exploitation of the 190 millionth tonne of crude oil in Ba Ria – Vung Tau today.

 

The joint venture exploited 1 million tonnes in 1998 and 100 million tonnes in 2001 and 180 million tonnes in 2009, and it is expected to churn out 200 million tonnes early next year.

 

Vietsovpetro produced 6.4 million tonnes of crude oil last year, about 200,000 tonnes higher than expected, with a total revenue of nearly $4 billion.

 

"Last year was a good year for the joint venture because it produced the same quantity as in 2009, despite having decreased year-on-year since 2003," said Nguyen Huu Tuyen, Vietsovpetro's director general.

 

Garment sector aims high

 

Viet Nam's garment and textile industry has set an ambitious target of US$13 billion in export earnings for this year, according to the Viet Nam National Textile and Garment Group (Vinatex).

 

The General Statistics Office reports that garment and textile exports in December passed $1.15 billion, bringing the total export turnover of the industry to $11.17 billion, a 23.2-per-cent increased over 2009.

 

To achieve the target for 2011, the sector would focus on maintaining current customers and instructing makers to seek out new markets and customers, Vu Duc Giang, chairman of Vinatext, told online newspaper VietnamPlus.

 

It had also made efforts to expand its market share in traditional and new markets.

 

Viet Nam is the fifth largest garment and textile supplier in the world.

 

The sector would also raise its localisation ratio to between 55 and 60 per cent in 2011.

 

In July polyester manufacturers would turn out the first products in the country with 80-90 per cent domestically sourced polyester thread, reducing reliance on imports.

 

Giang added that cotton growing remained problematic for the local garment and textile industry. Viet Nam was a country with a large population and not much land and did not have a comprehensive policy to develop industrial crops for industrial sector.

 

Viet Nam did not have cotton growing farms, said Giang. Vinatex was currently working with provinces to encourage farmers to alternate cotton plants with other crops.

 

The country's garment and textile sector was developing strongly with a growth rate of between 20 and 25 per cent while rates of cotton growth remained very low because of poor soil quality and small cotton farming area.

 

He said it would be difficult to develop a cotton growing industry that met the requirement of the garment and textile industry.

 

"In the context of an open market, import and export are indispensable. The country's current export surplus remains higher than export by between 40-50 per cent. We should not worry about cotton imports," said Giang.

 

Vinatex was preparing to establish a raw material manufacturing joint stock company with its member companies to work with provinces to earmark farm land for cotton growing. It was looking for farmland ranging in size from 50 to 100ha.

 

Domestic garment and textile production was expected to achieve growth of between 18 and 22 per cent in 2010.

 

Viet Tien Garments had a growth rate of 40 per cent and a total revenue of more than VND3.7 trillion ($176 million). Phong Phu garment makers saw an increase of 258 per cent.

 

Vietnam plans to create 1.6 million jobs in 2011

 

The Ministry of Labour, War Invalids and Social Affairs (MoLISA) plans to continue implement synchronous measures with the aim to create 1.6 million new jobs in 2011.

 

The target, which was announced at MOLISA’s review conference held in Hanoi on January 5, includes 87,000 jobs overseas.

 

In 2011, the ministry will focus on developing the labour market, building harmonious labour relations, increasing the scale and improving the quality of vocational training following the market’s demands. It will also work to shift the restructure towards higher industrial and service percentage while reducing the number in agriculture.

 

According to the ministry’s report, in 2010, over 1.6 million jobs were generated, an increase of 6 per cent over 2009, with over 85,000 people sent to work abroad.

 

Industry and construction led in creating jobs in the country. Especially, the project to train rural labourers made a breakthrough in connecting enterprises, vocational training establishments and local authorities, contributing to generating stable jobs.

 

The National Fund for Employment poured over VND1.9 trillion (nearly $95 million) in loans for farming, agriculture and handicraft projects, which helped create about 250,000 jobs.

 

Labour export was boosted in 2010 despite the impacts of the global economic crisis. Traditional markets for Vietnamese labourers including Taiwan, Malaysia, South Korea and Japan were maintained and even saw growth. New markets like Libya, Macao and the United Arab Emirates have opened their doors to Vietnamese workers.

 

More labour transaction floors were open, creating effective linkages between enterprises and labourers, especially at localities with labour markets like Hanoi, Danang, Ho Chi Minh City, Binh Duong and Dong Nai.

 

The efficiency of job generation over the past year contributed to help reduce unemployment rate in urban areas from 4.66 per cent in 2009 to 4.43 per cent in 2010.

 

Vietnam leads FDI in Vientiane

 

Vietnam led other foreign investors in the Laos capital city of Vientiane during the 2006-2010 period with more than $1.5 billion in 162 projects.

 

It was followed by China , which has poured $705 million in 242 projects and Thailand , with $411 million.

 

The figures have been released recently by the Vientiane Department of Planning and Investment.

 

In the reviewed period, Vientiane attracted 1,052 foreign-invested projects with a combined capital of $3.5 billion, an 80 per cent surge over the previous five-year period.

 

The Vientiane administration expects to lure more foreign investors with new amendments in the country’s Investment Law, including tax reduction and the granting of land ownership to developers of prioritised housing projects.

 

Vietnam’s retail sales hit $78 bln in 2010

 

Total retail sales of commodities and services surged by 24.5 per cent year on year to VND1,561 trillion ($78 billion USD) in 2010.

 

The tourism and trade sectors recorded the highest annual growth rates, at 28 per cent and 25 per cent, respectively.

 

The retail industry has annually contributed over 15 per cent to the country’s gross domestic product (GDP) and created stable jobs for more than 5.4 million workers, representing over 10 per cent of the total workforce.

 

The Ministry of Industry and Trade (MoIT) attributed these positive results to the government’s demand stimulus policy as well as businesses’ success in taking full advantage of prices.

 

This move has been manifested by consecutive large promotions offered by both producers and distributors. During the year-end and Christmas promotional campaigns alone, the purchasing power at a number of supermarkets in the two biggest cities of Hanoi and Ho Chi Minh City soared by approximately 30 per cent compared with the same period of 2009.

 

The MoIT said the domestic market is becoming a “fulcrum” to foster business and production, and recover growth, thus contributing greatly to the national economy’s sustainable development economy. Despite its small scale, Vietnam ’s retail market remained very attractive to investors.

 

A survey conducted in the fourth quarter of 2010 by the audit firm Grant Thornton Vietnam shows that the Vietnamese retail market has lured more foreign investors, as 70 per cent of correspondents considered retail as a more fascinating and promising investment field than others such as education, real estate and healthcare.

 

Another survey recently released by the market research company Nielsen indicates more than 80 per cent of producers are optimistic that their business would post two-digit growth rates within the next 6-12 months. In particular, up to 80 per cent of them are planning to expand outlets to rural areas.

 

With these positive signals, Vietnam ’s retail market is likely to retain an average annual growth rate of between 20-25 per cent in the years to come. The country’s retail sales are forecast to reach $85 billion by 2012.

 

Auto strategy to hit top gear

 

According to the Ministry of Industry and Trade estimates, passenger cars will see booming growth after 2020 as a result of people’s significantly improved standards of living amid vigorous economic development. Accordingly, car density was expected to average 50 units per 1,000 residents and passenger cars would be in excess of 70 per cent of total car consumption by that time.

 

Many car manufacturers and traders assume that Vietnam needs to adopt supportive policies, select a strategic vehicle for development and concentrate diverse resources into promoting this one.

 

“We hope the Vietnamese government would soon present the auto industry development strategy for 2010-2020 and vision towards 2030 with consistent and stable development orientations which will serve as a basis for car manufacturers to develop their business development plans and set their mind at ease when operating in Vietnam,” said a Toyota Vietnam representative.

 

A Toyota Vietnam executive said that the tax policies needed to become stable for at least 10 years.

 

“We expect the Ministry of Finance would soon pronounce tax policies as well as introduce tax reduction trajectory towards cars in line with the common effective preferential tariffs within ASEAN free trade area (CEPT/AFTA) scheme until 2018,” said the Toyota Vietnam representative.

 

Audi Vietnam general director Laurent Ganet used Thailand as an example to demonstrate how a clear and proper development direction could support the car industry augmentation.

 

“Thirty years ago Thailand featured an under-developed car industry. The Thai government then worked out clear and long-term development orientations for the car industry and defined pick-up as a strategic vehicle for promotion,” he said. Thailand has grown into one of world leaders in design and manufacture of pick-up.

 

Vietnam’s car industry remains minuscule with 140,000 car units at present, far below Indonesia with 464,816 cars, Malaysia 489,269 cars and Thailand 999,378 cars.

 

The European Chamber of Commerce (EuroCham) recently noted that Vietnam’s auto industry abounded with a lot of potential for development in the medium and long terms. However, it also said that the auto sector’s development would be unstable in the short term which was evinced through a decline of 20 per cent in car consumption in 2010 against 2009.

 

Dung Quat Oil Refinery inaugurated

 

The Dung Quat Oil Refinery is a national key project that has been the largest in scale of both construction and investment capital so far, said Prime Minister Nguyen Tan Dung at a ceremony to inaugurate the factory in the central province of Quang Ngai on January 6. 

 

PM Dung stated that putting Vietnam’s first oil refinery into production is of political, socio-economic, national defence and security significance in the process of national industrialization and modernization. It confirms the correct investment decision of the Party, and the State.

 

With a design capacity of 6.5 million tonnes of crude oil per year, the factory has produced different types of high quality oil and petrol products, meeting 30 percent of the demand for fuel in the domestic market as well as reducing Vietnam’s dependence on oil supplies from overseas.

 

The project also marks an important milestone in achieving strategic goals, as well as laying a firm foundation for the establishment of the oil refinery industry in Vietnam. The factory will bring about remarkable changes not only for the key economic region in Quang Ngai but also for the central region as a whole.

 

Mr Dung highlighted great efforts made by investors, contractors, engineers and workers involved in the project and expressed thanks to local people in Binh Son district, especially those who had abandoned their land for the construction of the factory.

 

The PM also asked the local authorities to co-ordinate with the Vietnam National Oil and Gas group (PetroVietnam) to implement social welfare policies for those who had to move away from the construction site.

 

He affirmed that the national key project will allow Vietnam to process crude oil and increase its value in the country, limit the import surplus and reduce its dependence on oil and petrol supplies from overseas.

 

The construction and operation of the Dung Quat Oil Refinery will promote the development of other economic and industrial sectors in the country such as design, construction, mechanical engineering, manufacturing and assembly, steel, electronics, transportation, shipbuilding, petrochemistry, chemicals and services.

 

At the ceremony, Quang Ngai provincial party secretary Nguyen Hoa Binh thanked the Party and State’s decision on building the first oil refinery factory in Vietnam. He pledged to cooperate with PetroVietnam to preserve, protect and exploit the factory effectively.

 

Salt and sugar import quotas for 2011

 

The Ministry of Industry and Trade (MoIT) has issued a circular on salt and sugar import quotas for 2011.

 

Under the circular, 100,000 tonnes of industrial salt will be imported for businesses using salt as material for chemical production, and 2,000 tonnes of pure salt for those using salt as material for medicine production.

 

150,000 tonnes of refined and raw sugar will be imported for businesses using sugar in their production, and 50,000 tonnes of refined sugar for others to supply to the market.

 

This circular took effect on January 1 and will be invalid after December 31, 2011.

 

Dak Lak to host third Buon Ma Thuot Coffee Festival

 

The Central Highland province of Dak Lak will host the third Buon Ma Thuot Coffee Festival in Buon Ma Thuot City from March 10 - 13 this year, announced the provincial People’s Committee on January 6.

 

The aim is to promote Buon Ma Thuot coffee trademark to the market and prove the important role of Vietnamese coffee to the world, as well as state the nation’s special coffee culture.

 

Buon Ma Thuot Coffee Festival 2011 will include an exhibition of coffee products, an international seminar on coffee production and consumption and development of Buon Ma Thuot coffee, inauguration of an international coffee museum, and other cultural activities.

 

The event is expected to attract 1.000 million domestic and international visitors.

 

Nghe An attracts 287 investment projects in five-year period

 

Nghe An province has attracted 287 projects with a total investment capital of nearly VND99,280 billion since 2006.

 

Among those projects, the TH milk factory project has the largest scale with an investment capital of US$350 million, followed by the Smart City Vinh new urban area (VND2,299 billion), the rubber tree planting area (VND704 billion), the forest area (VND1,020 billion) and the Nghe An oil and gas building (VND630 billion).

 

Special foreign investment projects include the sponge iron factory of the Kobelco Vietnam Company with an investment capital of US$1 billion, the Big C supermarket and the banana-planting project of the Republic of Korea’s Global Farm Company, each worth US$4 million.

 

Draft decree gives priority to supporting industries

 

The Ministry of Industry and Trade (MoIT) last week released the final draft decree to provide supporting industries with special treatment and support.

 

According to the draft decree, some incentives will be given to enterprises operating in supporting industries in five fields in Vietnam, including mechanics, apparel, footwear, electronics and informatics, and auto assembling.

 

The draft was submitted to the Prime Minister more than one month ago and was expected to be approved before the end of 2010, Tran Hung, Deputy Director of the Department of Light Industry under MoIT, told the Daily on Friday.

 

Supporting industries manufacture materials, parts, components and semi-finished products in Vietnam to supply assembly factories and industries making finished or consumer products.

 

These companies will be given priority to benefit from trade and investment promotion programs as well as national technology development funds, and given priority rights to suitable land and land in industrial zones. The companies will also be supported financially to recruit and train employees and given free advertising on MoIT’s website. In addition, import tariff incentives and preferential loans from Vietnam Development Bank (VDB) will be offered to projects to develop the supporting industries.

 

Project owners will need to make an application for specific benefits to the project assessment board to consider before they submit it for the Prime Minister to approve.

 

Hung said there were concerns that the decree wouldn’t provide the promised support for supporting industries. He said the decree needs to be able to force banks to provide loans.

 

According to Nguyen Thi Bich Van, deputy director of the Foreign Investment Agency of the Ministry of Planning and Investment, developing supporting industries is one of the two focuses of the Ministry in 2011 to attract investment. The official, however, added that many provinces and officials don’t have a good understanding of the supporting industries or know how to make it more attractive for foreign interests to invest in the industry.

 

Tien Phong Bank spurs capital to VND3 trillion

 

Tien Phong Bank has just spurred its chartered capital to VND3 trillion (over US$150 million) from VND2 trillion through a share issue, thus meeting a requirement from the central bank for commercial banks to raise capital to that level.

 

The bank has successfully issued 100 million shares with the face value of VND10,000 each to its existing shareholders. The increased capital will enable Tien Phong Bank to expand its network and upgrade technology, as well as to boost its financial investment and credits for clients.

 

The Government has recently approved a proposal by the State Bank of Vietnam to extend to December 31 this year the deadline for commercial banks to spur capital to VND3 trillion. The earlier deadline was December 31, 2010.

 

A source said currently ten banks and finance companies have not been able to raise their chartered capital as required.

 

Vinh Hung starts building condo in Hanoi

 

Local firm Vinh Hung Housing Trading Co. Ltd. has commenced work on the foundation of a 35-story apartment building in the capital of Hanoi as part of a broader property development project.

 

The apartment building with three basements and 24 units on each floor from the 5th to 35th stories is one of three components of the Vinhhung Dominium project. The other two are a 25-story apartment building with 20 units on each floor from the third to 25th stories and a row house section with 48 units.

 

The company said it would set aside some VND2 trillion to develop the Vinhhung Dominium project which covers 12,400 square meters on Linh Nam Street in Hoang Mai District.

 

The project will also have a section for commercial services.

 

Tran Le Nghia, director of the company, said in a statement Vinhhung Dominium was a typical project that targeted young families and middle-income families as potential homebuyers.

 

PV