HCMC, Vietnam Airlines team up to stimulate travel demand

The Ho Chi Minh City Tourism Association (HTA) has cooperated with the national flag carrier Vietnam Airlines to launch a discount programme with the aim of stimulating domestic travel demand in 2013.

Hoang Thi Khanh, HTA Vice Chairwoman, said the initiative will discount both flights and tours, contributing to price stabilisation in the national tourism market.

The programme helps address the illogical fact that foreign travel tour prices are often cheaper than domestic travel.

A similar discount programme has run since May 2012, drawing the participation of many local travel operators and achieving many good results. Vietnam Airlines held sales reducing select ticket prices by 45 to 52 percent. Travel agencies also slashed tour prices by 40 to 45 percent.

By the end of 2012, the programme serviced 15,810 visitors on tours from HCM City to southern and Central Highland destinations like Phu Quoc, Con Dao, Da Lat, and Buon Me Thuot. Many tours also ventured to the northern and central regions.

A tough year for rice exports

2013 is forecast to be a difficult year for Vietnam’s rice exports as competition from other global rice producers such as Thailand, India, Pakistan and Myanmar intensifies.

The Vietnam Food Association (VFA) reports that the global market’s abundant rice will put pressure on domestic rice businesses. Several rice producers, especially Thailand, also need to sell large quantities to settle their inventories.

VFA President Truong Thanh Phong says rice businesses have 780,000 tonnes outstanding from contracts signed in 2012, and the export of about 40 percent of that volume is facing likely suspension.

“Foreign dealers are trying to gauge the price of Vietnamese rice as we have yet to sign any large contracts to sustain domestic rice prices,” says Phong. “We should therefore be tactful in negotiations and rice export management.”

VFA plans to export 1.4 million tonnes in the first quarter of this year. Businesses are currently keeping 800,000 tonnes in stock, and an estimated 3.8 million tonnes is expected to be harvested from the winter-spring crop.  

Although it is attempting to reduce inventories, the association has also asked the government to start stockpiling 1.5 million tonnes from February.

The association has set a target of exporting 7.5 million tonnes in 2013, slightly less than 2012’s figure.

Last year rice exports hit a record high of 7.72 million tonnes, earning US$3.45 billion (FOB value), representing an increase of 8.3 percent in volume, but a fall of 2 percent in value.

The average FOB price was US$446.86/tonne, US$46.85 less than the previous year’s.

The market structure changed dramatically after traditional markets cut imports while emerging market imports increased sharply.

The quality of Vietnamese rice improved considerably, with high-grade rice making up 46.29 percent of total export volume, increasing 79 percent against 2011.

VFA concludes that 2012 was a comparatively difficult year for Vietnamese rice businesses due to cheaper than average global prices and undercutting by traditional rice producer competitors like India, Pakistan and Myanmar.

Against the odds, Vietnam finished the year with record high exported rice volumes, in addition to stabilising the domestic rice market, ensuring national food security and supporting rice farmers.

Thanks to accurate forecasts and close coordination between ministries and agencies, timely decisions were made to reserve farmer rice, thereby preventing a sharp fall in domestic rice prices and enticing foreign dealers to return and sign contracts.

However, VFA is aware that rice exports were overly reliant on commercial contracts for small amounts, low prices and high risk.

High bank rates and conditional regulations forced businesses to sell rice at low prices in the interest of capital turnover and in order to pay their bank debts.

Poor financial management contributed to a number of businesses’ bankruptcy declarations after pouring investment into infrastructure upgrades to meet rice export conditions.

At a recent conference in HCM City, representatives of the Ministry of Industry and Trade said the ministry will immediately introduce policies to ease rice export difficulties this year.

Lao Bao border economic zone lures more projects

The Lao Bao special economic zone in the central province of Quang Tri has attracted 47 projects worth US$164 million, 34 of which are already operational.

Trade though the Lao Bao border gate has also seen constant growth, rising from US$23.6 million in 2007 to US$70 million last year.

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

The Quang Tri provincial People's Committee has therefore called on ministries and agencies to help upgrade Lao Bao infrastructure pursuant to the Prime Minister's plan for border gate economic zone development through 2020.

Coal sector urged to settle inventories

Deputy Prime Minister Hoang Trung Hai has asked the Vietnam National Coal - Mining Industries Group (Vinacomin) to settle inventories at the beginning of the year.

Hai met with Vinacomin executives for a working session on January 12, stressing the importance of signing long-term contracts with consumers, lest the sector’s future plans fil to reach fruition.

He pointed out difficulties the coal sector is facing in 2013, including fierce business competition, and asked it to re-examine its business strategy to maintain stable production, boost sales, minimise costs, and increase productivity.

The sector must enhance its management and renovate technology urgently if it is to remain competitive in the context of ever strengthening market rivals, said Hai.

He also asked the sector to tighten labour principles, increase capital construction investment, and stop the illegal exploitation of coal.

In 2012 Vinacomin produced 40.4 million tonnes of clean coal (2 percent more than the set target) and sold 39.2 million tonnes (up 3 percent). It finished the year with 7.25 million tonnes in stock.

In 2013 it plans to sell 43 million tonnes (3.7 million tonnes more than 2012), and earn VND104 trillion in revenue (up 15 percent over 2012).

Vietnam to get US$1.36 bln in ADB loans in 2013

Vietnam is expected to borrow US$1.36 billion from the Asian Development Bank this year.

The information was unveiled at a recent working session between the Ministry of Planning and Investment and the ADB discussing the list of loans planned for 2013.

They worked on loans and non-refundable aid the bank plans to lend Vietnam, and agreed to sign a memorandum of understanding on these grants.

Among the grants, 11 loans are valued at US$950 million and 14 technical assistance loans worth US$10.6 million.

The detailed list of grants will be discussed further and officially approved before the end of January 2013, paving the way for both sides to sign an MoU facilitating the year’s loan schedule.

Tet market prices under strict scrutiny

The Ministry of Finance is keeping a close watch on market prices to forestall any illegal commodity hoarding and price hikes in the lead up to the traditional lunar New Year (Tet) festival.

Tet is considered the most tempting time for traders to stockpile necessities, mostly foods and foodstuffs, causing market scarcities of supplies and driving up prices.

The pricing management department under the ministry will dispatch inspection teams to all three regions of the country, putting market speculation and trade fraud under the microscope.

This year, inspection teams will also fan out to remote and mountainous areas to keep abreast of pricing trends there.
Supermarkets team up to stabilise market prices during the Tet holiday

The department will work closely with other sectors to balance commodity supply and demand in the hope of stabilising market prices.

Nguyen Anh Tuan, deputy head of the department, says his department has even devised plans to control the market after Tet – a sensitive period when commodities for daily consumption become scare.

“We will keep a tight grip on the market to ensure the prices of commodities, especially necessities, remain stable before, during and after Tet,” says Tuan.

He predicts that the consumer price index in the first months of 2013 will follow annual trends, hovering around 1 percent.

He says the government is intent on implementing appropriate price adjustment plans in 2013 to avoid any market shocks.

Commodities of special public concern such as electricity and medical services will be strictly scrutinised to minimise a double impact on people’s lives.

Pico Plaza opens in Ho Chi Minh City

Pico Joint Stock Company has opened its first Pico Plaza in Ho Chi Minh City.

The 55,000 square-metre, five storey mixed-use block will offer retail outlets and office space. The $33 million Pico Plaza is Tan Binh District’s largest multi-purpose commercial centre.

According to Hoang Hoc Hai, general director of Pico Joint Stock Company, the centre is its first shot in an expansion strategy into the south and marks Pico’s adoption of a new mixed-use commercial model, with the centre offering electrical goods and supermarket retail outlets, high-end fashion and cosmetics shops, banks, cinema and high quality offices.

Over 90 per cent of Pico Plaza’s retail outlets have already been leased, according to Hai.

Domestic garment and textile firms get into gear

Vietnam’s garment and textile sector has seen positive signs with many big names having acquired sufficient orders for 2013.

The Vietnam Textile and Apparel Association has reported that despite the tough economic climate, especially in major markets such as the US and Europe, almost all of Vietnam’s garment and textile firms had acquired sufficient orders, and companies have already begun working on new orders.

“The firm has acquired export orders until June. We have had to increase productivity to meet our deadlines,” said Dong Nai Garment Joint Stock Company (Donagamex) Board chairman Bui The Kich.

Kich added that Donagamex planned to recruit 1,000 workers for its existing factories and its new Dong Phuoc Garment Factory which is set to begin operations after the Lunar New Year. The company also announced VND1,350 billion ($64.3 million) in revenue and VND75 billion ($3.57 million) in profits as its 2013 targets.

Bac Giang Garment Joint Stock Company (Bagarco) also confirmed export orders for the first half of 2013.

Luu Tien Chung, deputy general director of Bac Giang Garment Company said that Bagarco was already shipping products on a daily basis and the firm’s 8,500 staff were already working at full capacity.

Chung added that Bagarco expected to achieve 10 percent growth in 2013. The company’s biggest obstacle stagnant retail sale prices despite rising input costs. “We’re looking to bolster importer confidence by increasing both productivity and quality,” said Chung.

Garment 10 Joint Stock Corporation (Garco 10) announced that despite the economic difficulties, the company was still targeting revenues of VND1,688 billion ($79.4 million), and profits of VND40 billion ($1.9 million), with average wage in the firm likely to remain at around VND4.8 million ($228) per worker per month.

“We’ve signed some large export contracts this year, so we’re concentrating on boosting productivity and reducing input costs,” said Garco 10 director Than Duc Viet.
 
Viettel named as 2012 National Brandname

The Vietnam Military Telecommunications Group (Viettel) has fought off stiff competition from more than 2,000 businesses nationwide to win the “National Brandname 2012” title, along with 54 other businesses.

After ten year’s operation, while maintaining a high growth rate even during the global economic recession, Viettel is the first Vietnamese telecommunications business with investment in international countries.

Other businesses winning the title included leading businesses in the industries of mechanics, machinery, garment and textile, shoes, foods, electricity, information technology and telecommunications.

Launched for the first time in 2008 by the Vietnamese Government, the “National Branding Program” aims to popularize the country’s image and national tradenames through high-quality products and services, as well as to promote the competitiveness of Vietnamese products in both domestic and international markets.

Toyota Vietnam opens new dealer in Hanoi

Toyota Motor Vietnam (TMV) and its partner Toyota Thanh Xuan Company on Thursday opened a new authorized service station in Hanoi, taking the total number of dealers/authorized service stations and branches of TMV’s dealers to 34 nationwide.

The new Toyota Thanh Xuan station at 315 Truong Chinh Street in Thanh Xuan District meets Toyota’s global standard requirements on human resources, equipment and factories, showrooms and infrastructure.

With total investment of $6.3 million, the new station is built up on an area of 8,500 square meters, with 24 general and maintenance stalls, and 18 painting and body stalls.

As planned, Toyota Thanh Xuan station will continue to expand their service area up to 28 general and maintenance stalls, and 46 painting and body stalls to receive 40,000 service turns a year.

At the first stage, the new station will operate as an authorized service station of Toyota with full functions of automobile maintenance, repair and replacement of Toyota genuine parts. After that, it will be organized as an official dealer of TMV with full functions of sales, after sales service and genuine parts business.

Pollution continues in Quang Binh

Long Giang Starch Processing Factory in the central province of Quang Binh's Quang Ninh District has been temporarily closed due to water and environmental contamination.

According to the district people's committee, the plant was licensed to process canna starch but produced cassava instead due to the lack of raw material. Two days ago the factory was found releasing untreated waste water into the environment.

VND135-billion coach station sits idle in Danang

A coach station in the central city of Danang costing VND135 billion (USD6.42 million) has already been deserted after being in operation for just months.

The well-equipped Danang Southern Bus Station, whose investor is Duc Long Gia Lai Group, became operational in September, 2012.

Deputy Director of the station, Duong Tam, said initially, the station had 30 staff members, but now most of them are not working and are not receiving a salary. Only some security guards have been kept on to keep people out, he added.

He added that the station has the capacity to serve 500 coaches per day and that figure would double in the second phase if it were expanded in the future.

The station was aimed to ease overload for the Danang Central Bus Station but there were no passenger transportation routes being operated through the station, Tam said.

He noted that the location of the station was approved by Danang authorities, however the problem was that it was up to 13km away from the centre city of Danang. Meanwhile, site clearance had not yet been finished for 35 households in front of the station for a facade to be constructed.

The most important obstacle was that the municipal authorities had not yet decided to make coach routes for the Southern Danang Bus Station, Tam emphasised, suggesting that routes to provinces to the north of Danang should be distributed to the Danang Central Bus Station, meanwhile, those running to the localities to the south of the city should come to Danang Southern Bus Station.

“It is impossible for Southern Danang Bus Station to compete with the Danang Central Bus Station. Without the authorities’ support, the Danang Southern Bus Station will probably not become operational,” according to Mr. Tam.

Preferential policies attract new businesses to HCM City

As many as 185,000 businesses had been licensed in Ho Chi Minh City by the end of last year, five times the figure in 2006, according to Nguyen Van Ranh, head of the municipal Party Committee's Public Relations Department.

The number of businesspeople in the city topped 500,000, accounting for one-third of the country's total, Ranh said at a meeting with the Central Public Relations Committee on Jan 8.

Fully aware that the large number of entrepreneurs in the city forms an important force that has made great contributions to the city's socio-economic development for many years, the city has issued many policies to help businesses overcome difficulties, he said.

Last year, the city approved 34 new projects with a total investment of more than VND1.8 trillion ($86.5 million) as part of its strategy to stimulate purchasing power. Of this amount, VND920 billion ($44.2 million) was provided as loans with preferential interest rates.

"The city is currently considering granting preferential loans to 184 projects worth more than VND523 billion ($25.1 million)," Ranh said.

Municipal authorities have also carried out a price stabilisation programme to help poor people, workers and students have access to reasonably priced products and help businesses clear their inventory at the same time.

To date, there are 4,884 outlets that sell products under the price stabilisation programme that has attracted the participation of 49 businesses dealing in four main categories: essential food items, stationery items for students, milk and pharmaceutical products.

Nearly VND4.5 trillion for power projects in south

The Southern Electricity Corporation has announced that it will invest nearly VND4.5 trillion ($225 billion) for major power projects this year in efforts to ensure electricity supply for people in southern region.

The projects include a sea cable system from Ha Tien to Phu Quoc island, and power transmission networks in rural areas.

The firm has signed an EPC contract with Italy’s Prysmian Powerlink Srl company for laying 56km of sub-sea cable to Phu Quoc island. The power transmission line, which also comprises of 7.6km of cable on land and a 110kV station, is scheduled to complete in 2014, connecting the resort island to the national power grid, meeting the demand of socio-economic development of the locality in the future. Total investment in the line surpasses VND2.3 trillion ($111 million).

Meanwhile, VND1 trillion ($49 million) will be poured into the construction of power grids in areas inhabited by Khmer people in Kien Giang, Soc Trang and Tra Vinh provinces. This year will see the second phase of the project completed, bringing electricity to 33,312 households of Khmer and other ethnic groups in the localities.

Besides, the German Development Bank-funded rural power distribution project will be accelerated to meet the deadline in 2014. With a total investment of VND1 trillion, the project aims to ensure stable electricity supply, improve safety and reduce power loss in rural areas.

The corporation reported that last year, it invested a total of VND2.9 trillion ($39 million) in 45 110 kV power grid projects and 218 distribution networks in the south.

A successful year for Hai Phong Port

Hai Phong Port One Member Limited Company earned VND1,300 billion last year, up 3.3 percent compared to 2011.
 
The port’s cargo handling revenue totalled VND1,250 billion, up 8.3 percent on the previous year.

The port processed 18.2 million tonnes of cargo (a 3.4 percent increase over 2011), recorded VND80 billion in profit (up 23.1 percent), and contributed VND77 billion to the state budget (up 30.97 percent).

The port has undertaken a number of dramatic reform measures by accelerating infrastructure investment projects, monitoring market developments, expanding marketing activities, rearranging personnel, and maintaining security.

Nguyen Hung Viet, General Director of Hai Phong Port, said the port will continue to invest in infrastructure upgrades and information technology equipment to the tune of VND530.4 billion.

It will improve service quality and increase cargo-loading capacity, particularly in regards to containers. It will also focus on managing production, coordinating with relevant agencies to remove any obstacles or difficulties.

RoK, Vietnam promote financial cooperation

The Vietnamese Ministry of Finance and the Republic of Korea’s (RoK) Ministry of Strategy and Finance on January 11 held talks and signed a cooperative plan in 2013.

Vietnamese Minister Vuong Dinh Hue praised the RoK Ministry’s support, highlighting the Official Development Assistance (ODA) it has allocated to Vietnam over the years. He also thanked the RoK Ministry for their generosity in sharing their experiences and strengthening the management capacity of cooperation and development programmes.

Since 2008, the RoK has always placed in Vietnam’s top three largest ODA donors, with most of the funding allocated to infrastructure, urban development, job training centres, medical equipment, and water supply maintenance and upgrades.

The RoK provided US$215 million for six projects in 2011 alone. They included hospital constructions in Lao Cai province and Danang city, the solar energy plant in Quang Binh province, the water irrigation programme in An Giang province, and a government’s climate change adaption programme that featured a new information and data centre.

The Ministry of Finance hopes 2013 will deliver even more opportunities to learn from the RoK’s experiences in restructuring state enterprises, managing state reserves, controlling the financial market, and reviewing the implementation of policies for credit investment and exports.

Developing megacity-opportunities for businesses

More than 250 businesses and experts attended the 2013 CEO World Forum in HCM City on January 11, discussing megacity development and investment opportunities.

The event is jointly organised by the International Data Group (IDG) and the CEO&CIO Club.

Le Manh Ha, Deputy Chairman of the City’s Municipal People’s Committee, said last year southern provinces and cities, with HCM City being the largest economic hub, created natural inter-links across various sectors, raging from transportation, healthcare and education to telecommunications, information technology, and banking.

He suggested local authorities promote cooperation to maximise the gains from these relationships and avoid overextending resources.

Nguyen Van Yen, Deputy Chairman of the Lam Dong Provincial People’s Committee, pointed to the fact that many cities and provinces already depend on inter-regional connections.

He said Lam Dong, located in the Central Highlands economic zone, has signed comprehensive cooperation agreements with 11 cities and provinces, supplying 40 percent of the whole country’s total fresh fruit and vegetables.

However, administrative links are not strong enough to foster business operations and local economies.

Dr. Nguyen Tri Dung, an economic expert, underlined the need to develop administration-business links and establish a regional development council to coordinate local economic links.

In addition to discussing regional link efficiency for megacity development, the forum also explored issues such as policies, infrastructure, the wholesale and retail markets, and opportunities for businesses and investors.

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.

Incentive for rice farms to join new growing model

Rice farmers who agree to volunteer in a large-scale cultivation project will receive VND5 million per hectare under a proposal currently being finalised by the Ministry of Agriculture and Rural Development (MARD).

The ministry, which released details of the proposal at a seminar held in HCM City on Tuesday, said the area would cover at least 50ha in the Cuu Long (Mekong) Delta, 30ha in the Hong (Red) River Delta, and 20ha in other regions.

The aim of the proposal is to improve the quality of the country's rice products.

A zero-interest loan would be given to farmers who invest in rice dryers and warehouses of under 10-tonne capacity. This is expected to account for about 70 per cent of the costs of such equipment.

Companies that cooperate with farmers to set up large-scale rice fields and build warehouses would be exempt from land rental fees and would also be offered loans to buy machines and equipment.

In addition, agricultural promotion centres that produce and transfer technology of rice seeds would benefit from the governmental preferential policies.

Such large-scale models are already in use in the Mekong Delta, and the ministry wants to introduce them in the north as well, according to Doan Xuan Hoa, deputy head of the ministry's Department of Processing and Trade for Agro-Forestry-Fisheries Products and Salt Production.

The large-scale models used in the south have been able to reduce the number of middlemen and have increased incomes for farmers.

The ministry solicited opinions from participants at the seminar, who were supportive of the proposal but were concerned about its feasibility.

The amount to be offered to farmers is higher than in the previous government programmes, according to Ho Quang Cua, deputy director of southern Soc Trang Province's Department of Agriculture and Rural Development.

Nguyen Van Dong, director of southern Hau Giang Province's Department of Agriculture and Rural Development, said the government's proposal to offer support to farmers to store paddy would be unfeasible.

"Most farmers have small areas for rice fields. Also, they lack investment capital and have a low level of education," he added.

Prof Vo Tong Xuan, former rector of An Giang University, urged support for the ministry's large-scale cultivation model, saying it would help improve rice quality and increase farmers' incomes.

Many food companies said they were not interested in investing in large-scale fields because they have limited capital capacity and difficulty accessing bank loans.

However, Pham Van Du, deputy head of MARD's Plant Cultivation Department, said that companies that supply rice seeds, fertilisers and pesticides should take part in the large-scale cultivation model.

Under the model, food companies would order rice from farmers and guarantee a sales outlet for the farmers.

According to Nguyen Thi Xuan Thu, deputy minister of MARD, more research on additional support policies as well as investments in rice dryers and projects that use rice by-products is needed.

"The Department of Processing and Trade for Agro-forestry-Fisheries Products and Salt Production will conduct the research," he added.

Shift to battery-powered bikes impossible for now

Battery-powered bikes will help save as much as 90% in gasoline costs compared to normal motorbikes but it is not easy to replace bikes running on petrol, heard a seminar in HCMC on Thursday.

At the seminar on greenhouse gas emission reduction via usage of electric bikes, Huynh Kim Tuoc, director of HCMC Energy Conservation Center (ECC-HCMC), presented comparison indicators between battery-powered and normal bikes.

A survey of 100 households using motorbikes in HCMC shows that traveling 30-50 kilometers consumes one liter of gasoline on average, he said.

Meanwhile, each battery-powered bike running 26-30 kilometers consumes an average of one kW. With the current fuel price, a normal bike costs VND544 for a kilometer, while electric vehicles only cost VND43.1 a kilometer. Notably, motorbikes discharge 2.297 kilos of carbon dioxide with one liter of fuel while battery-powered bikes discharge a mere 0.5764 kilos of carbon dioxide per kWh.

As such, using battery-powered motorbikes helps save up to 90% in expense in comparison with vehicles running on fuel, while carbon dioxide emissions of electric vehicles are lowered by 75% compared to normal bikes.

According to Tran Anh Duong, deputy head of the environment department under the Ministry of Transport, as Vietnam is involved in a few international conventions, the local transport industry needs to gradually shift to using vehicles running on clean fuels in the next few years.

Tomomichi Hattori, director of Japan’s Myclimate Company, noticed huge potential for using battery-powered bikes in Vietnam. Recent research of Honda revealed that there are about 25 million motorbikes in circulation at present, with almost every family owning one. Given the current poor infrastructure, local demand for motorbikes is expected to remain high in years to come.

Despite the good points of the battery-powered vehicle, many experts attending the seminar insist it is too difficult for locals to use these types of bikes.

Speaking with the Daily on the sidelines of the seminar, a lecturer of the HCMC University of Technology who declined to be named said it was easy for battery-powered bikes to come a cropper in flood-hit areas citywide. This kind of vehicle is very pricey as well, at around US$4,000 a unit, and it will take up to four hours to charge its power for only one-hour of travel, he noted.

E-mart looks for local suppliers

E-mart, one of the leading retailers in South Korea, is looking for supply from Vietnamese enterprises in order to open its first supermarket in the country.

According to the Vietnam Trade Promotion Agency under the Ministry of Industry and Trade, E-mart intends to set up a modern supermarket in Hanoi this year. Therefore, the retail group wants to secure supplies from local enterprises, including interior and exterior decoration items.

Next Thursday, the Vietnam Trade Promotion Agency will organize a meeting between Vietnamese entrepreneurs and representatives of E-mart in Hanoi. In addition, E-mart representatives will visit and make direct transactions at factories of local firms.

Earlier, Mai Huu Tin, chairman of U&I Corporation, Vietnamese partner of E-mart, informed the plan for opening the first supermarket of the South Korean retail group in late 2012 would be delayed until the middle of this year.

In July 2011, E-Mart and U&I jointly established a retail venture in Vietnam. The joint venture will have an initial investment of US$80 million, with 80% coming from the South Korean firm and 20% contributed by the Vietnamese partner.

Electronics retailers race to expand networks

Electronics retailers are racing to set up new outlets even though consumer demand is severely affected by the protracted economic woes.

Pico Electronic Joint Stock Company on Thursday opened an electronics supermarket at Pico Saigon Plaza on Cong Hoa Street in HCMC’s Tan Binh District. This retailer has been well known in the northern market with five outlets in Hanoi and is now expanding its network southward.

Meanwhile, Nguyen Kim Trading Joint Stock Company is preparing for the simultaneous opening of six new stores next week, including two in Hanoi, two in HCMC, one in Ca Mau and one in Binh Duong. With these six stores, Nguyen Kim will have 21 outlets nationwide to become one of the largest electronics retail networks in Vietnam.

Thien Nam Hoa Commercial Service Co. Ltd., the owner of Thien Hoa interior furniture and electronics store chain, has drawn up a plan to establish three more stores in 2013. Currently, the retailer is operating six outlets, including five in HCMC and one in Binh Duong.

Similarly, Dinh Anh Huan, general director of dienmay.com, said the electronics retailer will set up new outlets with prudence. The specific number of new stores will depend on market developments, and the company’s financial status and competition.

The retailer is running a network of 12 stores across the country, with four in HCMC.

In the northern market, Tran Anh Electronic and Computer Company has revealed its plan to open three new shopping centers in Hanoi’s Ba Dinh, Thanh Xuan and Tu Liem districts in April. Another store will be established in Hoang Mai District in the fourth quarter, taking the total to eight.

A senior source from an electronics company told the Daily that the industry players are competing for larger market share through retail network expansion. However, “in the current situation of the market, it is understandable that they are making losses. If they were financially capable enough to withstand losses in 2-3 years, then they might make it to the leading positions,” he said.

As big retailers are pushing for network expansion, the chances for small retail stores are dwindling, he added.

A sales staff member of an electronics shopping center on Hoang Van Thu Street in HCMC’s Tan Binh District said the company that owns this center has set up a number of new stores, but most of them are operating inefficiently.

Meanwhile, the HCMC branch of Ebest at 70 Lu Gia Street in District 11 has recently been shut down after one year of operation. Ebest is running three electronics supermarkets in Hanoi and one in Danang.

Renewable energy plant in Cu Chi

A biomass plant experimentally producing biomass energy from agricultural waste such as sawdust, straw and rice husk was put into operation in HCMC’s outlying district of Cu Chi on Thursday.

The plant located in Binh Ha Dong Hamlet, Thai My Commune cost a total of US$850,000, Dr. Le Thi Kim Phung coordinator of the project said.

The factory is designed with two systems; one is a coal gasification system with an hourly capacity of 60 kilos of straw for running electric generators. The other is a biogas basement system with a capacity of eight cubic meters which will turn out two cubic meters of gas a day used for cooking and operating electric generators.

“Renewable power will be used for the factory and a house model to experimentally provide energy to households in agricultural regions,” she said.

The plant and another specializing in making alcohol from straw at the HCMC University of Technology all belong to the project “Sustainable combination between local agricultural industry and biomass processing industry” funded by the Japan International Cooperation Agency.

Airline, travel agencies to offer discounted tours

Vietnam Airlines and the HCMC Tourism Association on Thursday said they would discount domestic package tours.

The travel stimulus program has been carried out since last May. Travel firms have sold 15,810 package tours to destinations with discounted airfares of Vietnam Airlines such as Phu Quoc, Con Dao, Dalat, Buon Ma Thuot and others in central Vietnam.

According to travel firms, the program has led to a strong tour price decline thanks to discounts on airfares and travel services. Promotional airfare programs over the past time have helped travel firms sell more tours.

“Amid the economic difficulties and the decline in air travel, the figure of over 15,000 is a good result,” said Nguyen The Vinh, deputy director of Saigontourist Travel Service Company.

This year, the HCMC Department of Culture, Sports and Tourism will coordinate with airlines and travel firms to expand the program of stimulating domestic tourism. “We will work with enterprises and tourism management agencies in Danang City, Thua Thien-Hue and Quang Nam provinces to offer more discounts to attract tourists,” said Nguyen Viet Anh from the department.

In related news, the number of flights to Phu Quoc of Vietnam Airlines has increased by 30% after the new airport in Phu Quoc went into operation last month, said Nguyen Thi Minh Yen, director of Vietnam Airlines’ Southern Regional Office.

Previously, with the old small airport on Phu Quoc Island, Vietnam Airlines used ATR72 aircraft having a seating capacity of some 60 passengers on the HCMC-Phu Quoc run. However, with the new airport, Vietnam Airlines has launched daily Hanoi-Phu Quoc flights using A321 aircraft and also used such aircraft for two flights in HCMC-Phu Quoc service.

Alstom to make equipment for Lai Chau hydropower plant

Alstom and its consortium partner Hydrochina Zhongnan Engineering Corp on Thursday signed a contract worth over 90 million euros with Vietnam Electricity (EVN) to provide equipment for the 1,200 MW Lai Chau hydropower plant located on the Da River in Lai Chau Province.

The scope of the contract includes the delivery, supervision of erection, testing and commissioning of three Francis 400 MW turbine and generator sets as well as mechanical and electrical auxiliaries. Alstom’s share in the contract is worth over 60 million euros.

The equipment will be manufactured at Alstom’s hydropower industrial facility in Tianjin in China, which is Alstom’s largest hydropower manufacturing base in China and across Asia.

Construction of the Lai Chau hydropower plant began in January 2011 and is expected to be completed in 2017. The plant will be the third largest hydro plant in Vietnam, generating more than 4.7 billion kWh every year to the national grid.

Jerome Pecresse, President of Alstom Renewable Power, said, “This success further reinforces our already long and successful partnership with EVN. Alstom is pleased to contribute to Vietnam’s strong socio-economic development by meeting significant growth in energy demands.”

Present in Vietnam for more than 20 years, Alstom has been supplying equipment for many projects in the country, including the 520MW Hoi Quang and 156MW Song Bung 4 hydropower plants, and the 2,400MW Son La power plant.

Banks take no action in gold bar trade

Government Decree 24 took effect on Thursday but many of the banks and companies that have been allowed to buy and sell gold bars in HCMC made no move.

A teller of a branch of Bank for Investment and Development of Vietnam (BIDV) told the Daily that this bank had yet to launch gold bar business across its network, and this branch was not cleared to trade gold on Thursday.

This teller also said gold bar sale staff should be well trained to identify fake and copycat gold before transacting with customers.

A branch of Maritime Commercial Bank in District 1 also received no guidelines on gold bar trading from its head office. Therefore, staff of this branch told customers to transact gold at other bank branches.

The central bank has also issued Circular 38 requiring credit institutions to keep their gold position not exceed 2% of their chartered capital and obtain a positive position with gold by the end of each day.

According to an expert, this regulation gives banks the right to stop buying or selling gold to secure their designated gold holding. Therefore, people will not be able to buy or sell gold to bank branches at any time.

People in need of gold transaction will be placed at a disadvantage as most qualified gold bar trading points are bank branches, the expert said.

Many enterprises and citizens were rushing to sell gold on Thursday for fears of a further decline in gold prices.

Saigon Jewelry Holding Company (SJC) reported strong selling in the morning, mostly by jewelry stores that lack a license to trade gold bars. Meanwhile, selling by the public increased slightly compared to previous days.

As a result, domestic gold prices slumped sharply, narrowing down the gap with the world price to around VND3.5 million a tael. However, lower gold prices lured back buyers from 2:00 p.m.

Nguyen Cong Tuong, SJC deputy sales manager, said total trading volume had amounted to around 1,300 taels as of 4:00 p.m. on Thursday, and that there was a pickup in selling by the public.

Transactions at jewelry retail stores also turned active. Kim Ngoc Phu gold shop in HCMC’s District 6 saw the number of clients doubling over previous days.

Most clients to this shop sold gold as they were worrying that gold prices would dip. As of 3:00 p.m., the store bought 500 gold taels and sold around 15 taels.

SJC at 4:00 p.m. quoted gold at VND45.8 million and VND46.08 million per tael for buying and selling respectively, or VND3.7 million higher than the world price. Last week, the difference widened to over VND5 million for a tael.

Electronics retailers race to expand networks

Electronics retailers are racing to set up new outlets even though consumer demand is severely affected by the protracted economic woes.

Pico Electronic Joint Stock Company on Thursday opened an electronics supermarket at Pico Saigon Plaza on Cong Hoa Street in HCMC’s Tan Binh District. This retailer has been well known in the northern market with five outlets in Hanoi and is now expanding its network southward.

Meanwhile, Nguyen Kim Trading Joint Stock Company is preparing for the simultaneous opening of six new stores next week, including two in Hanoi, two in HCMC, one in Ca Mau and one in Binh Duong. With these six stores, Nguyen Kim will have 21 outlets nationwide to become one of the largest electronics retail networks in Vietnam.

Thien Nam Hoa Commercial Service Co. Ltd., the owner of Thien Hoa interior furniture and electronics store chain, has drawn up a plan to establish three more stores in 2013. Currently, the retailer is operating six outlets, including five in HCMC and one in Binh Duong.

Similarly, Dinh Anh Huan, general director of dienmay.com, said the electronics retailer will set up new outlets with prudence. The specific number of new stores will depend on market developments, and the company’s financial status and competition.

The retailer is running a network of 12 stores across the country, with four in HCMC.

In the northern market, Tran Anh Electronic and Computer Company has revealed its plan to open three new shopping centers in Hanoi’s Ba Dinh, Thanh Xuan and Tu Liem districts in April. Another store will be established in Hoang Mai District in the fourth quarter, taking the total to eight.

A senior source from an electronics company told the Daily that the industry players are competing for larger market share through retail network expansion. However, “in the current situation of the market, it is understandable that they are making losses. If they were financially capable enough to withstand losses in 2-3 years, then they might make it to the leading positions,” he said.

As big retailers are pushing for network expansion, the chances for small retail stores are dwindling, he added.

A sales staff member of an electronics shopping center on Hoang Van Thu Street in HCMC’s Tan Binh District said the company that owns this center has set up a number of new stores, but most of them are operating inefficiently.

Meanwhile, the HCMC branch of Ebest at 70 Lu Gia Street in District 11 has recently been shut down after one year of operation. Ebest is running three electronics supermarkets in Hanoi and one in Danang.

FDI attraction still high: HSBC report

Relative to GDP, Vietnam attracts the second most foreign direct investment (FDI) in ASEAN after Singapore, according to a report named “The great migration” published by HSBC Vietnam on Thursday.

This result, according to the report, is because Vietnam’s wages are the cheapest among major ASEAN countries and its business environment is more competitive than India, the Philippines and Indonesia, although the country still trails behind Thailand and Malaysia.

“In the past couple of years, the country has lost its luster as one of the best performing countries in the region due to volatile inflation and inefficient management of the economy. This has slowed FDI inflow but it remains robust for a country of its size,” said Trinh Nguyen, Asia Economist at HSBC.

She added: “The urbanization rate is still low at 30% and should continue to accelerate in the coming years. This means that the increase in productivity from farmers moving into cities in the past two decades is still far from over.”

The rapid increase in Japanese involvement in Vietnam is considered positive for future productivity and growth in manufacturing, she remarked. In 2011, Japanese FDI made up 25% of total inflow into Vietnam, and had risen to 58% in the first ten months of 2012.

FDI flow to Vietnam and other ASEAN countries is rising because of the changes in China, says the report.

China has received the most FDI among the developing countries since 1993 thanks to a labor surplus, a large market and favorable policy. However, rising costs from increasing wages, an appreciating Chinese yuan and a shrinking working population are pushing multinationals to relocate.

Therefore, countries with large pools of labor, strong domestic demand and low costs are now attractive destinations. Vietnam and Indonesia look best positioned to gain from this shift in FDI, says the report.

However, HSBC experts note that while FDI inflow can be an important source of investment and employment, not to mention technological knowledge, attracting multinational companies (MNCs) without proactive policy to maximize the benefits can be risky for a host country.

FDI flow normally goes to where the environment is favorable, with tax incentives, trade preferential treatment, industrial zones, cheap wages and market access, however, the host country provides all the benefits without carefully analyzing how the entry of a foreign firm will benefit the country’s development, and the result could be costly.

For example, increased competition from more efficient MNCs could wipe out nascent domestic industries. If the MNCs leave when the advantages disappear, the host country would be left with a depleted domestic industry and a loss in capital and employment.

Experts warn that a lesser-developed country like Vietnam needs to carefully select the type of FDI that is most beneficial for its own development. At the same time, an active approach is necessary to support technology transfers, as leaving things to luck can be tricky.

Reform is the key word for most countries when it comes to maximizing the benefits of FDI, says the report.

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