More than 1.3b shares issued in first quarter

More than 1.3 billion shares were issued on Viet Nam's stock market in the first quarter of this year. There were 520 million newly-listed shares and over 780 million additional shares issued through capital raising and dividend payouts, according to the March report of the financial information portal cafef.vn.

New share supplies were concentrated mostly on the HCM City and Ha Noi stock exchanges,with listings on the unlisted public companies market making up a small proportion.

In addition, in the first quarter, up to 570 million additional shares issued in the previously quarter were also listed on the HCM City bourse, and almost 400 million shares were listed on the Ha Noi bourse.

Meanwhile, both stock indices fell in th first quarter, with an accumulative decline of 5 per cent in the HCM City market and 20 per cent in the Ha Noi market.

Vinashin gradually stabilizes production and business

Some members of the Vietnam Shipbuilding Industry Group Vinashin have recovered from the economic crisis and stabilised their production and business to create more jobs and ensure workers’ incomes.

On April 9, Vinashin’s Party Committee held its second Party Congress for the 2011-2015 term in the presence of politburo member and Deputy Prime Minister Nguyen Sinh Hung, who is also head of the Steering Committee for restructuring the Vinashin group.

Deputy Secretary of the group’s Party Committee Nguyen Quang Khai briefed Mr Hung on his organisation’s production and business management and the implementation of the project since September, 2010 to restructure Vinashin and enhance Party building.

Last year, Vinahsin produced 54 ships worth US$577 million, including 28 for export and 36 for domestic ship owners. So far, the group has finalised personnel restructuring, revised management methods at the mother company, and established 15 functional committees and appointed key leaders.

For the 2011-2015 term, the Vinashin Group’s Party Committee elected 33 members of the Executive Board which will be headed by Nguyen Ngoc Su.

Vietnam’s seafood exports inspected for radiation

Some European Union nations have asked Vietnamese seafood businesses to inspect the level of radiation in their products before exporting them to this strict market.

On April 8, the Binh Thuan Association of Seafood Exporters and Producers said that the EU has been worried about the risk of radiation from Japan, so Vietnamese seafood exports to France and Italy have been thoroughly inspected.

In future, other EU nations will also require Vietnamese seafood exports to be inspected for radiation. 

Vietnam attends TTP Agreement negotiations in Singapore

A Vietnamese delegation led by Deputy Minister of Industry and Trade Tran Quoc Khanh joined the sixth round of negotiations on the Trans-Pacific Strategic Economic Partnership  (TPP Agreement) in Singapore from March 27 to April 1.

Also taking part in the negotiation were more than 400 negotiators from Australia, Brunei, Chile, Malaysia, Peru, the US and Singapore.

This round of negotiations focused on commodity trade, cross-border service trade, investment, public spending, policies on competition, intellectual property, the environment and customs cooperation.

TPP members achieved encouraging results which will serve as the foundation for promoting negotiations in the near future.

Many businesspeople and scholars were also invited to take part in a round-table discussion on the sidelines of the talks to update information and share their views with the negotiators on measures to make the TPP Agreement more beneficial for businesses of all member countries.

Representatives from Vietnamese businesses also presented reports on Vietnam’s interests related to the TPP Agreement.

Garment exports grow higher

Despite a number of difficulties due to a lack of labour force and rising interest rates Vietnam’s garment exports achieved higher growth in the first quarter of this year than the same period last year.

Labour shortage is the biggest issue facing the garment sector. Each business lacked around 18 percent of the total workforce, especially after the traditional Lunar New Year Festival (Tet). In addition, increases in interest rates and input material costs pushed production costs up by 15-20 percent.

Despite difficulties, garment exports increased by 27.9 percent to US$2.8 billion in the first quarter compared to the same period last year. Many businesses have signed contracts for the third quarter of this year.

The Vietnam Textile & Apparel Association (VITAS) has urged its members to stabilise their workers and improve their skills to avoid losses in compensating for importers due to late delivery.

VITAS Vice Chairwoman Dang Phuong Dung said most businesses face difficulties in recruiting workers, however, they have gone to remote areas to recruit labour. They have also applied advanced technologies to increase productivity and sharpen their competitive edge.

Vietnam wants to see more investment from France

Vietnam expects France, a major European partner in trade, investment and development cooperation, to make new investment waves in the country on the back of its gradual recovery after the global economic crisis, said Ambassador to France Le Kinh Tai.

The diplomat attended a “Vietnam’s Day” event held in Lyon, France, on April 7, with the aim of introducing to businesspeople from Lyon and the Rhone-Alpes region potential cooperation opportunities in Vietnam.

The event brought together 100 representatives from the economic circle in the region as well as overseas Vietnamese businesspeople.

Ambassador Tai said that the model of the Public-Private Partnership (PPP) have come up with many opportunities for French and Vietnamese businesses to cooperate, in such fields as safe water supply, environmental protection, waste treatment, urban transportation and infrastructure.

He affirmed that French enterprises’ commitments to cooperation with Vietnam have worked to boost the two countries’ economic cooperation and also help them gain access to Southeast Asia.

President of the France-Vietnam Friendship Association, Honorary Senator Helene Luc praised Vietnam’s growing position in the regional and international arena and expressed her hope that Vietnam would become a destination with many cooperation opportunities for those from the Rhone-Alpes region.

Rhone-Alpes Vice President Bernard Soulage noted the fact that the presence of French businesses and investors in Vietnam has not matched their role and position.

Rhone-Alpes, France’s second largest economic hub, has cooperated with Ho Chi Minh City for nearly 15 years, starting with an urban light project. It plans to sign a cooperation agreement with HCM City for the 2012-2015 period in October this year.

SMEs to get one-year tax payment deadline extension

Prime Minister Nguyen Tan Dung has issued a decision on extending the corporate income tax payment deadline for small-and medium sized enterprises (SMEs) for another year.

Accordingly, the quarterly payment normally due at the end of this month, would be settled until April 2012, while tax payment for the whole year of 2011 until March 2013.

The decision will be applicable to SMEs operating in real estate, finance, banking, insurance and securities, as well as importers of luxury goods.

Businesses to benefit from Vietnam-EU Free Trade Agreement

Both Vietnamese businesses and EU companies operating in Vietnam will benefit from the Vietnam-EU Free Trade Agreement (FTA), which is expected to be signed in the coming time.

Truong Dinh Tuyen, former Trade Minister, made the comment at a seminar in Hanoi on April 7 on opportunities and challenges for FDI businesses in Vietnam when the Vietnam-EU FTA is signed.

The seminar was jointly held by the Vietnam Association of Foreign Invested Enterprises (VAFIE) and the National Committee for International Economic Cooperation.

Mr Tuyen expressed his belief that the EU’s investment in Vietnam will increase due to the country’s continuously improved investment environment.

In addition, he pointed out that when investing in Vietnam, EU enterprises will not only sell their products to the local market but also export them to a potential market of 3.5 billion people of the EU and countries which have FTAs with Vietnam.

Last year, Vietnam and the EU agreed to negotiate for a free trade agreement, marking a new milestone in their bilateral relations.

The EU is a leading export market of Vietnam, which earned an export value of US$15.4 million in 2010 from US$5.6 billion in 2005. Between 2008 and 2010, the EU had accounted for 18 percent of Vietnam’s export market share.

The EU is also a leading investor in Vietnam with 1,079 projects with a total registered investment capital of over US$16 billion.

Foreign banks fund Mao Khe thermal power plant

BNP Paribas of France and Bank of China will provide an export credit agency (ECA) worth US$275 million to the Mao Khe Thermal Power Plant.

The ECA to the effect was signed by the Vietnam National Coal, Mineral Industries Corporation (Vinacomin) and the two banks in Hanoi on April 7.

At the signing ceremony, Deputy Minister of Industry and Trade Le Duong Quang said the signing of the ECA reflected the French and Chinese banks’ confidence in Vinacomin.

According to Vinacomin General Director Le Minh Chuan, the corporation has already signed an engineering, procurement and construction (EPC) contract worth US$429.5 million with China’s KAIDI Electric Power Co. Ltd. for the US$577-million plant. The 275 million ECA to fund the EPC contract is guaranteed by Vietnam’s Finance Ministry and insured by Sinosure of China for 13 years.

Invested by Vinacomin, the Mao Khe Thermal Power Plant in the northern coal-mining province of Quang Ninh will include two turbines with a combined capacity of 440MW and consume dust coal from Mao Khe, Trang Bach, Khe Chuoi and Hong Thai mines to generate electricity.

Work on the plant was commenced on July 8, 2009. Once operational by the end of 2012, the plant is expected to provide around 2.6 billion kWh of electricity for the national grid per year.

Power rationing worries firms

 

Electricity rationing has been implemented in the northern city of Hai Phong to deal with the serious power shortage this dry season.

Planned electricity rationing has been defined based on the amount of electricity apportioned to Hai Phong and average business consumption in the first half of last year.

Electricity rationing plans were announced at a meeting held by the city People's Committee on March 11 with representatives of 14 districts and 67 major enterprises, whose power consumption totals 3 million kWh per day.

Many of the enterprises have expressed concern about the transparency of electricity rationing plan, and businesses already have to register their monthly electricity usage in order to help in power supply planning.

"Electricity rationing for March was based on average electricity consumption in the first half of last year," said deputy director of Hai Phong MTV Electricity Company Ltd Tran Ngoc Quynh.

However, using such criterion creates a paradox, where the more enterprises save energy, the less electricity they will be apportioned, which would not encourage energy savings, according to investment manager of Vinausteel, Nguyen Dang Quang.

In addition, the priority for enterprises with modern energy-saving production lines was also a question to be pondered, as the electricity saved had reached its maximum level with the temporary production line, Quang said. The only solution to saving more was to buy completely new lines, which required large levels of investment while the amount of electricity saved would be negligible, he added.

Concern was also expressed about sudden power cuts, as this would affect the machinery, and could cause major losses to enterprises, Quynh said. A weekly and monthly rotating power cut was preferred.

Co-ordination between electricity suppliers and enterprises was essential, VSC-POSCO Steel Company proposed. Plans for electricity rationing should be widely distributed in advance so that businesses could plan their production timetables based on the schedule.

At the meeting, the People's Committee also agreed to let enterprises propose their own electricity supply timetable.

With over 1,000 small- and medium-sized enterprises, electricity rationing would fall under the responsibility of local electricity suppliers.

However, power wastage was still common and exceeded real business rates of consumption, said Quynh. For example, the difference of 130,000kWh per day of the Noura Industrial Zone could be equal to an entire day's energy consumption in Tien Lang District, he added.

According to estimates, 67 major enterprises in the city consume up to 43 per cent of the city's total electricity supply, yet are currently using only 84 per cent of the amount they claim they need.

Hai Phong Electricity hoped enterprises would do more to save electricity, said Quynh.

He also added that Hai Phong Electricity in co-ordination with the city's People's Committee and the Department of Industry and Trade would try their best to ensure equality and transparency in electricity rationing and prevent under-the-counter electricity sales by energy suppliers.

According to national power supplier Electricity Viet Nam, the country will face a major power shortage of about 3 to 4 billion kWh, triple that of 2010, while demand for electricity is increasing.

In Hai Phong, power shortages totaled 3-4 million kWh per day, said Quynh.

"Power shortages undeniably have a negative affect on production" said Tran Dinh Long, who is in charge of electricity management at the Dinh Vu Steel Company.

Production could be reduced up to 40 per cent due to the shortage, he added.

Plenty of investment opportunity in Laos and Cambodia

Laos and Cambodia introduced a series of investment projects to Vietnamese enterprises at a recent conference hosted by Vietnam-Laos-Cambodia Economic Development and Cooperation Association (VILACAED) in Hanoi.

The Head of Economic Development and Cooperation Committee with Cambodia Le Van Tuy said among major projects calling for investment in Cambodia, of the most noteworthy are the manufacturing of electric cables, the building of an Olympic stadium worth 156 million USD, a special economic zone and a 500-hectare land terminal in the area between Cambodia’s Ratanakiri provinces and Gia Lai of Vietnam.

VILACAED Chairman Lai Quang Thuc said that Vietnamese enterprises should take full advantage of the fact that Vietnamese consumer goods are very popular in Laos to invest in commodities production and distribution in the neighbouring country.

He added that from now till 2015, Vietnamese enterprises should focus their investments on the fields of industry, forestry and service in Laos.

According to the Ministry of Planning and Investment, over the past time, the number of Vietnam’s projects and investment capital in Laos and Cambodia has increased rather quickly.

Vietnam has invested in 195 projects in Laos with a total registered capital of US$3.95 billion and 87 projects in Cambodia with a combined capital of US$1.9 billion.

By February, 2011, Laos and Cambodia ranked top among 55 countries and territories as Vietnam’s overseas investment destinations.

Malaysian group to build power plant in Hau Giang

The Malaysian group TOYO is planning to build Song Hau 2 thermal power plant in the Mekong Delta province of Hau Giang, with an estimated investment of US$2.5 billion.

Provincial authorities agreed in principle and promised to ask the Prime Minister for approval of the project at a working session with the investor on April 7.

The province will work closely with TOYO to complete all legal procedures to submit to concerned ministries, agencies and the government for approval.

Located at the Song Hau Power Centre (SHPC) in Chau Thanh district, the 2,000 MW coal and petroleum-fueled power plant is expected to begin generating electricity in 2018 or 2019 if the project is carried out on schedule.

As the largest thermal power centre in Vietnam, SHPC was designed to accommodate three power plants with a combined capacity of 5,200 MW.

The first project, the 1,200 MW Song Hau 1 power plant, invested by the Vietnam National Oil and Gas Group, is scheduled to generate electricity by 2013 or 2014.

Cambodia hosts Ho Chi Minh City Expo 2011

As many as 150 Vietnamese businesses have taken part in the Ho Chi Minh City Expo 2011 being held in Phnom Penh from April 6-10.

On display are a wide range of high quality products for Cambodian customers to choose, including garment and textiles, plastics, agricultural products, decorative objects, cosmetics, footwear, processed food, computer softwares and education services.

Other activities such as market research, trade promotion, cultural exchange and gift presenting are also held on the occasion to mark Cambodia’s Chaul Chnam Thmey (New Year Festival).

Speaking at the exhibition Cambodian Deputy Prime Minister Men Som On stressed that the event helps promote Cambodian trade.

It provides a good chance for Cambodian consumers and businesses to gain valuable experience and seek new partners, she added.

US firms’ high-profile standoff

Ba Ria-Vung Tau People’s Committee is at loggerheads with two United States companies that are refusing to advance site clearance costs for massive tourism projects.

A Department of Planning and Investment (DPI) source said authorities were struggling to come up with the funds for site clearance for the giant projects.

These include the $1.3 billion Wonderful Theme Park project developed by Good Choice Limited and Winvest Investment LLC’s $4.1 billion Saigon Atlantic.

The two are among the largest tourism projects in Vietnam and their four- and five-star hotels, convention centres, entertainment centres, shopping malls, restaurants and office space are expected to give big lift to Ba Ria-Vung Rau province’s tourism.

However, if the clearance cost issue is not sorted out soon, development of these projects could stall.

Ba Ria-Vung Tau cannot afford all the site clearance costs for projects in question and had tried to push the process forward by asking developers to advance some of the costs. In exchange, the developers would receive tax and land rental exemptions.

But, developers turned up their noses at the province’s offer.

“The costs are too large compared with the provincial budget. We will try to persuade developers to help us advance the costs. There is no other way to deal with this issue,” a provincial official said.

Under government regulations, local authorities must compensate residents for the reclamation of land and site clearance. However, most local authorities ask investors to clear site in advance. Investors then recoup the costs through tax and land rental exemption.

The DPI calculates site clearance costs at Saigon Atlantic project to be nearly $30 million. The people’s committee already spent $4.8 million while Winvest Investment advanced $4.73 million for site clearance.

But, the DPI source said the developer had refused to advance the outstanding cost of site clearance.

Winvest Investment LLC has received 100 hectares out of 300ha to date for this project, according to the DPI.

Meanwhile, land has yet to be handed over to Good Choice Limited. Site clearance costs for Wonderful Theme Park project are tipped to be $72.4 million.

In a different situation, Ba Ria-Vung Tau’s People’s Committee and Skybridge Dragon Sea Limited, the American investor behind the $902 million Skybridge Dragon Sea tourism project, last week reached an initial agreement whereby the latter would advance site clearance payment.

However, the DPI source said a final agreement could only come after site clearance cost estimation was available.

Corsair Marine is sunk by high land clearance costs

Australia’s Corsair Marine International has pulled the plug on plans for a trimaran manufacturing project in Ba Ria-Vung Tau province, blaming high site clearance costs for the decision.

The company had officially given up on the project in Vung Tau city, said Huynh Xuan Vinh, head of international cooperation and investment for the Ba Ria-Vung Tau Department of Planning and Investment.

“Late last year, Corsair’s leaders complained they could not afford the cost of site clearance and had decided to withdraw from the project,” said Vinh.

The Department of Planning and Investment was now finalising procedures to revoke its investment certificate, Vinh added.

Corsair Marine International’s 27 hectare project was granted an investment certificate in July, 2007. But by the end of 2010, the firm waited for a land grant so it could start building the production facility.

While Corsair Marine International blamed the high costs of site clearance for its decision to pull out of the project, the firm did not name the figure in question.

“The investor agreed to cover site clearance costs so they had to negotiate with residents and calculate those costs. We don’t have the specific number but we acknowledge that site clearance costs have been rising sharply since Decree 69/2009/ND-CP took effect,” Vinh said.

The decree, which came into force on October 1, 2009, means that compensation costs for agricultural land could be 1.5-5 times higher than before.

But Vinh said that Corsair Marine International’s failure to provide an exact figure for the costs of land clearance was evidence it was actually ending the project because of the impact of the global financial crisis.

Established since 1984, Corsair Marine International has sold more than 1,600 trimarans through its global dealership network. Dealers represent and service Corsair Marine’s trimarans in over eight regions of the United States and 17 other locations around the world.

Currently, the firm has a single production facility in Ho Chi Minh City, which was set up after the company decided in 2006 to relocate its head office and production facility to the city from San Diego.

The firm said that relocation created an opportunity to avoid charging higher prices.

According to the company’s website, Vietnam was chosen for “its political stability, attractive foreign direct investment provisions, booming economy and its young, talented, skilled, energetic and resourceful workforce”.

Rising deficit only part of trading tale

A dramatic rise in exports has yet to rein in Vietnam’s large trade deficit with China.

The trade deficit with China stood at $1.73 billion in the first two months of this year, compared to $1.6 billion and $202 million in the same periods in 2010 and 2009, respectively, according to the Ministry of Industry and Trade (MoIT).

Vietnam imported $3.06 billion worth of Chinese products during January-February this year, up nearly 25 per cent year-on-year, while it exported $1.33 billion worth of goods to China, up 60 per cent - a record high in comparison with its other markets.

MoIT Asia-Pacific Market Department head Bui Huy Son said there had been a positive shift in the structure of Vietnamese goods sold to the Chinese market, with industrial and processing products making up an increasing portion, bringing about more stability and higher revenue.

In the first two months of the year, Vietnam exported some $302 million worth of industrial and processing goods to China, up 70 per cent in value on-year and making up 22.5 per cent of the country’s overall export revenue to China.

“As industrial products did not see any significant gains in price during the past months, the growth of Vietnam’s export revenue was almost entirely due to the rise in export volume to the Chinese market and distribution effectiveness,” Son said.

The January-February period also saw a double growth in Vietnam’s earnings from selling agricultural, forestry and fishery products to China, which stood at $633 million, up 113 per cent on-year and contributing 47 per cent to the country’s export value to China.

The shipment of fuel and mineral products to China, however, experienced a 3.12 per cent decline in value to $256 million, the MoIT reported.

Under the latest draft of China’s 12th five-year socio-economic development plan for 2011-2015, which has been delivered to local legislators for review, China would increase imports of consumer goods over the next five years.

Some Chinese experts considered a boost in imports would help ease pressures for the yuan’s appreciation, rein in inflation and provide more opportunities for foreign firms to access the Chinese market.

China, for the first time since March 2010, experienced a $7.3 billion deficit in foreign trade in February. A deficit is also forecast for March, 2011. “To some extent China’s import policy has resulted in the increase of exports from other countries to China. However, we have not yet seen any clear measures implementing the policy.

“It is not fair for Vietnamese producers and exporters to say that their increase in exports to China was the result of that import policy. It is clear that whatever the measure China may implement to open its market would be beneficial to all competitors, not only those from Vietnam. Therefore, the encouraging export result was almost due to constant efforts made by the Vietnamese firms to improve themselves and get a better access to the Chinese market during the past years,” Son told VIR.

Some well-known Vietnamese firms including Bitis and Vinamit have set up their offices and distribution networks in China to accelerate their sales and market shares.

Many Vietnamese firms actively joined the two big trade events the ASEAN-China Fair and the Western China International Fair held every year to increase networking with Chinese partners and boost exportation. “Vietnamese firms are now very active in building relationships with Chinese firms and clients,” Son said. On April 19, the China-Vietnam Joint Economic Committee meeting will open in Hanoi, where authorities of two sides will discuss further efforts and measures to help accelerate economic, trade, investment and tourism relationship between the two countries.

Hanoi-Lang Son highway a step closer

The final report of ADB-funded Hanoi-Lang Son highway project was recently submitted to the Ministry of Transport by the Oriental Consultants, Mott Mac Donald and APECO consultant consortium.

Accordingly, the highway will be around 160 kilometres long, consisting of four lanes in the first stage of investment which will be later upgraded into six lanes and cost an estimated $1.4 billion.

Construction will take place over 129km sections spanning from Huu Nghi border gate in northern Lang Son to Nhu Nguyet bridge in Bac Ninh province.

The remaining 30km sections from Nhu Nguyet bridge to Hanoi will involve upgrading existing roads to reach highway standards.

The highway’s 90km section in Lang Son will go across 20 communes in four districts and Lang Son city.

The Vietnam Expressway Corporation is the project developer.