Overseas Vietnamese can boost export sales
 
There are currently some 2.7 million Viet Kieu (overseas Vietnamese) living in 90 countries and territories across the world. They present an extremely valuable market for products made in Viet Nam, with estimated annual spending on these items totalling about US$100 million. Meanwhile, the value of products bought in Viet Nam during their visits to the country adds up to tens of millions of US dollars.

According to Do Thang Hai, director of the Ministry of Industry and Trade's (MOIT) Trade Promotion Department, these figures are still very small compared to the nation's export potential. He said that the purchasing power of the overseas Vietnamese is very great, and more should be done to increase trade to countries with large Vietnamese populations.

Tran Dang Lam, a student in London, England, said that the Vietnamese products sold there were mainly food, and the consumers were mainly Asians. He said information about Vietnamese products was hard to find there.

Nguyen Thanh Cong, an overseas Vietnamese living in the Federation of Russia for seven years said that when living far away from the homeland, it is common for Vietnamese people to miss food.

"Information about Vietnamese products, particularly in markets, super markets and convenience stores is very scarce," Cong said.

According to Pham Quoc Toan, director of the Marketing Unit of the Incentra Investment Company Ltd in Moscow, the main channel importing Vietnamese food to the Russian market works through international trade events, such as the annual World Food Fair and international tea and coffee trade fairs.

Vu The Hoang, deputy director of the Representative Office of the N-M company in Ukraine said the demand for Vietnamese products is big there due to a large Vietnamese population of over 10,000. He said the popular products are quite diverse, and range from clothes to leather shoes, artwork, food and agricultural products. He called for the Ministry of Industry and Trade to focus more attention on promoting Vietnamese exports to Ukraine.

Hai reinforced the demand that Vietnamese people living abroad have demand for more Vietnamese products, particularly food. He admitted that there are comparative disadvantages for Vietnamese products in foreign markets compared to other trade marks. In addition, he argued that Viet Nam has not promoted trade well for the overseas Vietnamese market.

Other important factors were that, he said,the products have not received due attention including the building and protecting of trade marks by Vietnamese enterprises. Quite a few products have been well received by clients, yet faked versions have later appeared in the market. As a result, this has led to clients boycotting the original products.

Hai said that to overcome these issues, his department would focus on promoting trade, advertising the merits of Vietnamese products and strengthening production capacity of domestic enterprises.

"In co-operation with Viet Nam Trade Offices and Trade Promotion Offices abroad, MOIT will organise more trade fairs and exhibitions overseas while sending delegations to investigate opportunities in the hope of expanding the markets in countries that have many Vietnamese people living and working there, including the US, European Union, East Europe and others," Hai said.

He added that MOIT has planned to invite overseas Vietnamese entrepreneurs to visit their homeland to seek opportunities for co-operation with trade partners and manufacturers to bring Vietnamese products to the world.

World Bank funds Vietnam’s power distribution project

The World Bank on Thursday signed a loan agreement with Vietnam Electricity Group to fund the Vietnam distribution efficiency project, which aims to provide electricity users with better quality and reliable electricity services, and to reduce greenhouse gas emissions.

“The efficiency and modernization investments under this project will improve the reliability of energy supply to industries and households and contribute to Vietnam’s socio-economic development,” said Victoria Kwakwa, the World Bank Country Director for Vietnam.

“Successful implementation of this project will help strengthen Vietnam’s competitiveness and environmental sustainability, which are also key pillars of the World Bank’s strategy for Vietnam in the 2012 – 2016 period,” she said.

The project, costing US$800 million with US$449 million supplied by the global lender, covers the construction and reinforcement of electricity distribution networks and introduction of smart grid technologies.

It also includes a technical assistance and capacity building facility for the Electricity Regulatory Authority of Vietnam and five provincial power companies to develop efficient electricity tariffs and design effective energy demand programs.

Apart from US$449 million supplied by the World Bank, the Clean Investment Fund will provide US$30 million to support the implementation of smart grid technologies, while the Australian Agency for International Development provides US$8 million in technical and capacity building grants. The remaining US$313 million will come from the Government of Vietnam in counterpart funds.

The World Bank has closely collaborated with the Government of Vietnam over the last decade to expand the power network and to provide electricity to all parts of the country. As a consequence, access to electricity has increased from 50% in 1996 to about 97% in 2011.

Move to scrap grace period on import taxes draws fire

Exporters have slammed the proposal to remove the 275-day grace period on tax payments for imported raw material for local production.

They believe it will lead to more difficulties in their export and production plans.

The Ministry of Finance, the drafter of the Law on Tax Management, proposed to remove the grace period to limit tax fraud and evasion. The ministry planned to amend Article No 42 so the law would require taxes to be paid before customs clearance.

The amended regulation would apply to businesses that outsourced for foreign partners who imported materials and made products domestically for export. In principle, businesses still could enjoy the grace period if they were guaranteed by commercial banks.

However, Viet Nam Textile and Apparel Association (Vitas) said it was nearly impossible to obtain a guarantee from a bank because of their overly strict requirements. Businesses would have to pay a deposit and mortgage assets plus a fee. Vitas said garment companies would have to arrange US$800 million a year to pay tax and only get a tax refund later.

Many businesses, especially foreign-invested, had exploited the tax payment grace period. Some foreign-invested garment and textile enterprises owed a huge sum of tax on imported raw materials and then went out of business, according to the Ministry of Finance.

Customs reported that the tax debt had reached VND1.496 trillion (US$71 million) by the end of August this year.

A senior executive of a garment company said that with a stricter regulations it would take businesses much more time to follow the procedures for importing each consignment of goods.

The problem of garment companies was that they had to import different kinds of materials from different supply sources while import consignments arrived at different times of the year. They would have to spend too much time following procedures to get imports cleared. The delay in customs clearance would badly affect their production plans, and businesses would be punished for late deliveries.

Ministry of Industry and Trade import-export department deputy director Pham Thi Dieu Ha said the ministry received feedback from five associations concerning the lifting of the grace period.

Ha said, as the Ministry of Finance had reported, many businesses were involved in trade fraud and tax evasion, causing losses to the State. However, authorised agencies said honest businesses should not be blamed for the deeds of violating businesses and strict measures introduced which caused difficulty for local production and export activities.

Regarding the fisheries sector, imported raw materials to process products for export accounted for 15 per cent of a processor's revenue. If the current regulation on the grace period was lifted it would discourage seafood importers from buying materials for export processing.

For instance, if seafood processors spent $60 million annually to import raw materials for processing, they would have to spend an additional sum of VND70 billion ($3.3 million) to obtain the guarantee from banks.

The tax payment grace period was to support production and exports. Violating businesses alone must be held responsible for their violations, while honest businesses should not be punished, said a company respresentative who required to be anonymous.

Sharing this view point, Viet Nam National Petroleum group (Petrolimex) deputy general director of Pham Duc Thang said lifting the 275-day grace tax payment period was not a good solution to ensure tax collection for the State as it caused difficulties for businesses.

Soaring rice exports fail to benefit farmers

Notwithstanding the good news that Viet Nam may become the world's No 1 rice exporter, shipping some 7.7 million tonnes this year, farmers remain unhappy because the profits from the grain are much lower this year compared to last.

According to the Viet Nam Food Association (VFA), as of October 30 Viet Nam was the year's top rice exporter with contracts of over 7.6 million tonnes.

Truong Thanh Phong, the VFA chairman, said the country would surpass India to export 7.7 million tonnes.

The average export price this year has been US$433.7 per tonne, $50 less than in 2011. This has led to a decrease in the prices of paddy in the domestic market.

Nguyen Van Giau, a farmer in the Mekong province of An Giang's Phu Tan District, said after the 2011-12 winter-spring crop, hearing about the Government's campaign to buy for the national reserve, he kept his paddy instead of selling it.

But prices did not rise much, and Giau had to sell his dried paddy for VND5,200 per kilogramme as he needed money to plant the 2012 summer-autumn crop.

"We could only earn a profit of VND25 million (US$1,190) from the two crops on 1.7ha of land this year, 20 per cent less than in 2011."

Such a meagre income would not help him put his children through university.

Obviously, farmers who have less than 1ha face even greater difficulties.

Vo Thi Tiem, a farmer in Kien Giang Province's Giang Thanh District, said in the past, in addition to cultivating rice, her family also used to catch fish during the flood season in the Cuu Long (Mekong) Delta.

But the rapid exhaustion of aquatic resources in the past few years forced farmers with less than 1ha to look for odd jobs such as at construction sites.

Nguyen Minh Nhi, a former chairman of the An Giang People's Committee, said to be prosperous a farmer needs to grow more than 3ha of rice. With smaller areas, a farmer's family can be trapped in poverty especially if a member falls sick.

Dr Nguyen Van Sanh, head of the Cuu Long (Mekong) Delta Research and Development Institute, said the top rice exporter title will help Viet Nam gain prestige in the world market.

But Nhi said the No 1 position would be "insignificant" if the majority of rice growers remain poor.

Seafood firm aids breeders

The Tien Giang Province-based Hung Vuong Seafood Co has launched a support scheme for farmers that could rescue the local tra fish industry that has been troubled for the past several months.

The VND500 billion (nearly $24 million) programme envisages Hung Vuong supplying its Viet Thang brand of fish feed on credit to tra farmers, who can pay the company once they sell the fish following harvest.

It offers many farmers an economic lifeline after months of financial problems.

Ngo Van Triet, a tra farmer in My Luong town in An Giang Province, said the feed supplied by Hung Vuong would help him increase the weight of the fish in his breeder farm from the present 650 grammes to 800-1,000g.

Unable to get cheap loans under Government programmes to buy feed for his fish, Triet had to reduce the size of his farm from over 10ha to just 1ha now.

Ngo Van Them, a tra farmer in Can Tho city's Thot Not District, said he too has reduced the size of his farm from 3ha five years ago to just 1ha ha.

Nguyen Van Ky, a member of the Hung Vuong Corp board, said the scheme is aimed at helping farmers who cannot afford feed for their fish, and the two-month credit is interest-free.

But to benefit, farmers must have tra farms with each fish weighing at least 500g.

Ky said when the fish grow large (800-1,000g), Hung Vuong would buy them at VND23,000 per kilogramme.

"Farmers can sell their tra fish to other processors, but have to pay 1 per cent interest per month for the feed," Ky said.

Soon after the programme was launched, around 40 farmers have signed up with Hung Vuong Corp, which expects to supply 10,000 tonnes of feed.

"While the scheme would help farmers cut costs, they would be forced to reduce the size of their farms if tra prices remain lower than production costs," Nguyen Ngoc Hai, chairman of the Can Tho-based Thoi An Seafood Co-op, told Viet Nam News.

Air fares take off for Tet

People complain about the difficulty in buying air tickets online or from travel agents for Tet, which falls in early February 2013.

Ironically, almost all local carriers have announced fleet expansion plans to increase the number of seats during the Lunar New Year, the country's primary festival, which sees a mass exodus every year as people return home to their families.

"I entered the Vietnam Airlines website early in the morning right on the first day of the campaign, but it had only business-class tickets," Pham Van Son of District 9 in HCM City said.

He contacted the airlines' authorised agents later in the morning but they could not sell him tickets either.

A Vietnam Airlines spokesperson admitted there was a problem situation, but blamed it on many people surfing its website at the same time. It was fixed in the afternoon, he claimed.

The bad news for passengers is that all tickets for the week before Tet have been sold out.

The carriers also claim that they are offering the tickets gradually to avoid speculation by travel agents. They usually book large numbers of tickets in advance and later sell them at much higher prices close to Tet.

Jestar Pacific has said there will be two more ticket-selling campaigns before Tet.

They also promise to assist passengers in buying tickets online.

Local steel industry faces pressure to restructure

Recent economic stagnation has had a strong impact on domestic steel industry, with high competition from Chinese imports posing further challenges to the sector.

The consumption of construction steel decreased 10 per cent year-on-year in the first eight months of the year to a total of 2.9 million tonnes, the largest decline in the past several years, according to the Viet Nam Steel Association, which blamed the downturn on the frozen real estate market.

Average monthly consumption reached just 360,000 tonnes, while it needed to be 420,000 tonnes for steelmakers to maintain stable production, the association said.

Yet the demand for construction steel has been predicted to continue low throughout the rest of the year.

Production capacity within the industry was now twice the level of domestic demand. Steel prices have therefore dropped 2-4 per cent and many steel mills were now operating at only 30-45 per cent of capacity. Gross profit margins for the industry were therefore forecast to fall to 3-4 per cent, even if 40 per cent capacity can be sustained.

With Chinese steel entering the market at about $560-600 per tonne less than the price of domestic steel, imports from China have also become a substantial threat. China's cost advantage has also allowed it to boost imports to other countries in the region, keeping prices low.

As an industry requiring large amounts of capital, steelmakers often have a high leverage coefficient. Among five listed steel companies – Hoa Phat (HPG), Pomina (POM), Thai Nguyen Iron and Steel (TIS), Viet Nam-Italy (VIS) and Dana-Y Steel (DNY) – that has climbed to 1.9. Therefore, financial costs have become a burden that also affects the business results of these enterprises, even as borrowing interest rates have declined.

The steel industry has a large surplus inventory, much of it generated by smaller firms. The industry needs to restructure to eliminate inefficient companies and ensure a market share for the five listed companies of 60-80 per cent. Hoa Phat and Pomina in particular have advantages in scale and technology over other players in the industry, allowing them to reduce costs and save energy.

HPG shares can currently be acquired at as low as VND26,000 per share, making the stock appropriate for a long-term buy strategy. Moreover, the company's industry-leading position and plans to expand production capacity by 77 per cent next year will ensure stable growth during the upcoming restructuring of the sector. The company's profit during 2012-16 was also expected to grow by 20 per cent per year.

More than VND400bn invested in job centres

Over VND400 billion will be earmarked for the national programme on employment and vocational training in 2013 to improve the capacity and upgrade facilities at job centres across the country.

About VND155 billion will go to 10 such centres under the Ho Chi Minh Communist Youth Union, according to the Employment Department under the Ministry of Labour, Invalids and Social Affairs.

More than VND390 billion has been invested in the programme from 2006-2012, a department representative said at a conference in Thai Binh province on November 10.

At present 46 of job centres across the country have job trading floors. So far this year they have organized nearly 2,000 trading sessions at their headquarters and hundreds of others at their branches, serving as an effective link between labourers and employers.

Participants at the conference also reviewed the application of information technology in the centres, including e-portals, unemployment insurance software and databases for the demand and supply of jobs.

More than 34,600 people have registered as unemployed, and HCM City took the lead with nearly 8,800, followed by Hanoi with over 2,300.

Currently, 29,300 people are receiving monthly unemployment premiums and 4,200 others have been introduced to new jobs.

Hundreds find employment at Jobs Fair in HCMC

Eight hundred people found employment at the 18th Job Exchange Floor hosted by the Job Center in Binh Thanh District and the Unemployment Insurance Agency in Hoc Mon District in Ho Chi Minh City on November 12.

As many as 72 businesses took part in the Jobs Fair with demand for almost 3,500 workers. Of these, 19 businesses made direct recruitments while 53 recruited workers online via websites www.vieclamvietnam.gov.vn and www.vieclamhcm.net.

The businesses were in related fields like sales, garments, textiles, human resource management, financial consultancy, pharmacy, mechanism and unskilled labor.

By 6pm on November 12, the 18th Job Exchange Floor had attracted 3,630 job seekers out of which 800 found employment.

Besides job seekers, nearly 4,000 people under the unemployment insurance policy also came to find jobs.

Prosperity Bank wins trade service award

The Viet Nam Prosperity Bank late last week won a trade service award by the Viet Nam Economic Times.

The award was the result of a vote by readers under three criteria: product and service quality, post-services and purchasing plans of customers.

Carlsberg to increase minority stake in Habeco

The Ministry of Industry and Trade has asked the Ha Noi Beer Alcohol & Beverage Joint Stock Co (Habeco) to sell an additional 13-per-cent stake in the company to foreign strategic partner Carlsberg Breweries A/S. Carlsberg already owns 17.2 per cent of the local brewer, and has been a stakeholder in the company since 2008.

Under the proposed deal valued at a total of over VND1.5 trillion ($72.4 million), Carlsberg would buy around 30 million additional shares at VND50,015 per share, the publication Dau Tu (Vietnam Investment Review) reported. Habeco, which has 231.8 million shares outstanding, posted a net profit of VND237 billion ($11.2 million) in the first half of this year, a decline of 5.4 per cent from the same period a year ago.

Thousands of plant and animal genes preserved

Viet Nam has preserved more than 14,000 genetic samples of 200 different plant species, according to the Ministry of Science and Technology.

The conserved plants include different varieties such as rice, fruit, medicinal plants and industrial trees. By applying different methods, the scientists have saved 42 forest trees and trees used for paper production along with 26 medicinal herbs from extinction.

Scientists from the ministry have selected 30 rice genetic resources, five vegetables, three taro and two flower varieties carrying typical local features.

So far the genetic resources of nearly 100 animal species have been preserved including 25 pigs, 24 cows, 40 chickens and three buffaloes, of which 70 were on the verge of extinction.

Cement factory uses waste heat for power

All waste heat emitted from the clinker production process at cement producer Holcim Viet Nam's factory in Kien Giang Province will be used to produce electricity, starting last Friday.

The company said in a statement that the new move is expected to help the Hon Chong factory reduce about 25,000 tonnes of carbon dioxide emissions a year.

This production process would also help the factory save 25 per cent of electricity taken from the national power grid, it said.-

SHB processes online electricity bill payments

The Sai Gon-Ha Noi Commercial Joint Stock Bank (SHB) started to process online electricity bill payments yesterday for households and businesses.

Customers can pay their monthly electricity bill through SHB's internet banking and mobile bank services without fees.-

Nation world's third rubber producer

Viet Nam will soon outstrip Malaysia to become the world's third biggest rubber producer, according to a recent report by the Association of Natural Rubber Producing Countries.

The association estimated that Viet Nam would produce 955,000 tonnes of natural rubber in 2012, representing a year-on-year increase of over 17 per cent.

In its earlier September report, the association predicted the country's rubber output in 2012 would be 930,000 tonnes, overtaking India 's output of 920,000 tonnes to take fourth position on the list of world's biggest producers.-

Building contractor to list shares in HCM City

Nam Long Investment Corporation has filed to list shares on the HCM City Stock Exchange. The company, a real estate developer and construction contractor which also trades in building materials, has a charter capital of over VND955 billion ($45.4 million).

PetroVietnam Drilling sees 40% rise in earnings

PetroVietnam Drilling (PVD) has announced a third-quarter net profit of VND522.7 billion (US$24.8 million). The company's net earnings in the third quarter stood at VND3.3 trillion, an increase of nearly 40 per cent ovver the same period last year The company's earning-per-share were VND5,252 during the first nine months.-

Brokerage sells Eximbank shares to 3.93%

ACB Securities Company announced it had sold more than 9.7 million Eximbank (EIB) shares to reduce its ownership in the bank to 3.93 per cent on November 6.

Meanwhile, Asia Commercial Bank (ACB) - the parent bank of the brokerage - is holding more than 12.8 million EIB shares. The combined ownership of ACB Securities and its subsidiary in Eximbank are currently 61.4 million units, or 4.97 per cent of the bank's charter capital.

Eximbank's Q3 profit dropped 45 per cent to VND561.3 billion US$27 million over the same period last year. Meanwhile, it is rumoured in a merger with Sacombank (STB).

Ha Noi to see small hike in land prices
 
Ha Noi land prices to be applied next year will not drastically alter the current price framework, with the highest price remaining at VND81 million (US$3,860) per square metre, according to the draft of land prices in 2013 recently released by the city People's Committee.

The new prices of non-agricultural land used for business and production purposes in central districts range from VND47.81 million ($2,277) to VND2.04 million ($97), from VND19.124 million ($910) to VND1.221million ($58.2) in bordering areas and from VND1.62 million ($77) to VND245,000 ($11.7) in rural areas – the minimum level in the land price framework.

According to Nguyen Huy Tuong, vice chairman of the municipal People's Committee, the slight increases in the prices of some kinds of non-agricultural land would not affect the business operation of enterprises because the adjusted levels were within the Government's land price framework.

The prices of residential land in the city's central districts will be from VND81 million ($3,860) to VND3.645 million ($174).

Prices of agricultural land will be kept unchanged.

In fact, the transference prices of land were much higher than the prices promulgated by the People's Committee, especially in the city's centre, which migh be 10-15 times higher than the ceiling price, experts said.

The city aimed to amend Decision 108/2009/QD-UBND to ensure that land compensation for site clearance and relocation better reflects market prices.

Accordingly, investors should hire independent consultant units to specify the land prices of particular clearance sites. District People's Committees would take charge of evaluating the conpensation prices.

Vice chairman of the municipal People's Committee Vu Hong Khanh said the adjustments of compensation prices to better reflect market prices would help speed up the site clearance of construction projects in the city.

New rules provide for one-time licensing of pharmacists

The Government issued Decree No 89/2012/ND-CP on October 24, regulating implementation of the Law on Pharmacy. Under the new decree, an individual licensed to practise as a pharmacist may only operate from a single business location.

Under prior regulations, a pharmaceutical practice certificate was valid for five years and had to be renewed thereafter. The new decree provides that the certificate will be issued once and valid nationwide. Holders of outstanding certificates with a validity of five years would be required to apply for the permanent certificate.

The new decree takes effect on December 10.

Re-exported goods exempted from environmental taxes

The Ministry of Finance issued Circular No 159/2012/TT-BTC on September 28, exempting imported materials for processing of goods for re-export from environmental protection taxes. The new circular, amending Circular No 152/2011/TT-BTC of November 2011 and guiding provisions under Government Decree No 67/2011/ND-CP of August 2011, takes effect tomorrow.

Conference seeks to spur British investment

There were untapped opportunities for Vietnamese and British enterprises to work together, said Tran Thien Cuong, head of the Viet Nam Chamber of Commerce and Industry's International Relations Department, during a matching conference between businesses from the two countries yesterday in Ha Noi.

Cuong said agricultural products, textiles, seafood, hi-tech industries and education were all promising sectors for bilateral co-ordination. Two-way trade between Viet Nam and Britain has developed significantly, reaching US$2 billion over the past nine months.

Cashew nut processing machines to be exported to India

Some Indian businesses have ordered cashew nut processing machines that are being manufactured in Vietnam, informed Nguyen Thai Hoc, chairman of the Vietnam Cashew Association.

He was speaking at an exhibition of cashew nut processing machines in the southern province of Binh Duong on November 12. The exhibition was attended by 13 domestic companies.

The various stages to process cashew nuts like peeling and treating are all conducted by machines, which helps in reducing 80 percent of manpower, a seriously short and unaffordable commodity in recent years.

The price of cashew nut processing machines in Vietnam is 40-50 percent less than in other countries.

VietJetAir named friendliest airline

The low-cost airline VietJetAir was honoured as the friendliest airline and best airline for promotion deals in Viet Nam by the Trust&Consume 2012 market research report in HCM City.

Research for the Trust&Consume 2012 Report is conducted by Spend&Consume Magazine with the backing of the Viet Nam Standard and Consumers Association in conjunction with market management solutions Mancom Company. The report announced the top 100 products and services favoured by both Vietnamese and foreign consumers in Viet Nam.

SeABank celebrates platinum award

South East Asia Commercial Joint Stock Bank (SeABank) has been voted and awarded with the "Platinum Category" of the "World Quality Commitment" (WQC) by the Business Initiative Direction (BID) based in Madrid, Spain.

This is the second consecutive year that SeABank has been honoured with this prestigious award by BID; in 2011, the bank was given "International Arch of Europe Award for Quality and Excellence" (IAE) by BID.

"World Quality Commitment" (WQC) is a prestigious annual award distributed by BID since 1986 to honour companies and organisations throughout the world that have made outstanding achievements in business management and brand development.

Initial success in macroeconomic stabilisation

Vietnam has achieved a degree of macroeconomic stabilisation, but ANZ warns the shift to a banking system viable over the long term will still take time and continue to impact growth prospects.    

Addressing a seminar on economic updates and banking restructure in Hanoi on November 13, ANZ specialist Aninda Mitra, head of the bank’s Southeast Asian Economics division, acknowledged Vietnam’s economy has stabilised but activity remains weak, and slowing credit growth is resulting in significant drag.

He highlighted the country’s financial leverage revealing an up-and-down trend in the credit/GDP ratio. Lower inflation and trade imbalances are easing pressure on the local currency (VND) but healthcare cost increases are strongly affecting inflation, he said.

Vietnam’s exports are undergoing structural change processes, with foreign investment driving a shift towards more technologically advanced areas.

Mitra suggested speeding up the restructuring of the domestic banking system, saying that managing sovereign finances effectively is going to be critical.

According to him, Vietnam has undergone macroeconomic stabilisation but banking de-leveraging remains on the horizon. A viable strategy for reforming State-owned enterprises (SOEs) and banking is needed to limit negative risks to long-term GDP growth, he noted.

The November 13 seminar was organised by ANZ, which has confirmed its No.1 position in Vietnam’s fixed income market by winning all categories in the 2012 AsianMoney fixed income poll. The ANZ claimed best bank for credit services, best for credit research and market coverage, best for credit sales, best for interest rate research, best for interest rate products and sales, and best for interest rate derivatives.

ANZ Vietnam CEO Tareq Muhmood said the awards prove ANZ’s continued market leadership in Vietnam’s capital markets. Given the turbulence in both the global economy and in Vietnam’s business environment, winning these awards reflects ANZ’s efforts and its commitment to providing the best services to customers.

ANZ was among the first international banks to begin operating in Vietnam, establishing its first office in 1993. The bank currently has 10 branches and transaction points across Vietnam offering a full range of services. In June 2012, ANZ was voted “the best international trade bank in Vietnam” by Trade Finance Magazine.

Japanese firms seek software partners

More than 31 per cent of Japanese information and communication technology (ICT) companies prefer to choose Vietnamese enterprises as partners, compared to 20.6 per cent for India and 16.7 per cent for China.

The Japan ICT White Book 2012 was released at the two-day Japan ICT Day 2012 in HCM City, which closes today.

"ICT is playing more and more an important role in economic development and I'm pleased to see strategic co-operation between Viet Nam and Japan," said Nghiem Vu Khai, deputy minister of Science and Technology and chairman of the Viet Nam – Japan Friendship Organisation.

For the last five years, software processing and exports have contributed 30-35 per cent of total turnover for the sector.

Japan, the US and Europe are the three largest customers with revenue of hundred millions of US dollars each year.

"There is a great deal of potential for Vietnamese enterprises to work with Japanese enterprises as contract value is only one-third compared with China," said Takashi Igarashi, a representative of the Japan IT Services Industry Association (JISA).

However, quality of human resources, professional skills and language are all still a challenge for Viet Nam.

"Human-resource training should be done in multiple forms at companies," K. Hirata, general director of Nissan Techno Viet Nam, said. "Vocational training schools should work closely with companies to seek new and more effective training models for human resources."

In addition, management and sales ability are both new challenges for local companies.

"However, there is not any barrier in Viet Nam – Japan co-operation relationship. Japanese companies should feel reassured to order from Vietnamese companies," said Pham Tan Cong, deputy chairman and general secretary of the Viet Nam Software and IT Services Association (VINASA).

Twenty leading Japanese software companies met and worked with 120 Vietnamese partners at the event, organised for the sixth time by VINASA and the Viet Nam – Japan IT Co-operation Club (VJC) in co-operation with JISA and Japan External Trade Organisation (JETRO).

Investor mood remains gloomy: survey

Private-equity investors' negative sentiments about the next 12 months has risen about 100 per cent over survey results in the second quarter, according to auditing and consulting firm Grant Thornton.

The survey showed that the results were at about the same level of the 2011 fourth quarter, which at the time was the most pessimistic outlook of the last eight surveys conducted by the company.

The Grant Thornton Private Equity in Viet Nam – Investment Sentiment and Outlook survey, carried out in October and released yesterday, showed that investment attractiveness, as a result of the negative sentiment about the economy, dropped by half from 56 per cent in the second quarter of this year to 27 per cent in the fourth quarter.

However, despite the negative outlook, there was a small uplift in the increasing allocation of investments to Viet Nam by 41 per cent by all respondents.

However, 44 per cent of investment-fund respondents believed there would be "no change" in their portfolio in Viet Nam in the next 12 months. Twenty-five per cent of those respondents said they would decrease accounts while 31 per cent said they would increase their investments.

Secondary buyouts were no longer the most expected source of deals, dropping by 19 per cent, compared with the second quarter.

Private/family owners were considered the biggest source of deals by 32 per cent of respondents. Corporate divestments increased more than 100 per cent, reaching 31 per cent.

Healthcare and pharmaceuticals as a sector was still considered to be the most attractive industry to invest in, with 53 per cent of the respondents saying so.

In comparison with the previous survey, retail surpassed education and agriculture to be the second most favoured industry with 42 per cent of respondents.

The healthcare and pharmaceutical industry was selected as the most favoured industry in Grant Thornton's two surveys this year.

This is the first time the survey asked participants for their experiences on issues that caused deals to fail.

Differences in valuation expectation were seen by 55 per cent of respondents as the most common issue that could break deals.

In addition, changes in terms of deal agreements were a common factor that could break deals, ranked second with 50 per cent of respondents.

The survey found a movement in the expectation of private-equity investors about the length of time they plan to stay invested in Vietnamese companies, with fewer of them planning to stay a shorter period (one to three years) and more of them expected to invest for a longer period (more than five years).

The report also presents other information that concerns private-equity investors in Viet Nam, such as investment allocation, investment obstacles, important drivers of value growth, level of hands-on involvement expectation, and level of exit multiples and key factors to be considered.

The bi-annual report analyses were based on the opinions of decision-makers based in Viet Nam or those who have a significant focus on the country

More opportunities for exporters to the US

Huge customer demand makes the US a promising market for Vietnam.    

Domestic businesses must therefore enhance their capacity to exploit the market to best advantage.

According to HIS Global Insight, a world-leading economic forecasting company, the US’s import demand will increase slightly from US$2,312 billion in 2012 to US$2,334 billion in 2013.

Alibaba.com—a business-to-business (B2B) trading floor—says that despite a recent slump, the US still tops the list of orders for products from Vietnam, accounting for 10 percent of the country’s total export earnings compared to 12 percent in 2011.

The General Department of Vietnam Customs claims that during the first three quarters of 2012, Vietnam earned US$16.56 billion from exports to the US, up 14.83 percent on the same period last year. Textile and garment products were the top earner (US$5.6 billion), followed by footwear products (US$1.65 billion), and wood and timber products (US$1.29 billion).

Vietnam imported goods worth US$3.6 billion from the US over the same period.

The Ministry of Industry and Trade predicts that Vietnam can achieve its yearly target of US$20 billion in export earnings as the world demand tends to be increasing in the closing months of 2012.

Economists say the US market will be more stable in 2013 on the back of a modest economic recovery.

Judging from price adjustments caused by a decline in the world demand, the US Department of Agriculture expects agricultural product imports will increase from the current level of US$106.5 billion to US$117 billion by August 2013.

Timothy Leung, Channel Sales Director at Alibaba.com, says US enterprises are increasingly seeking goods supplies from regions offering cheaper prices— including Southeast Asia.

He stresses that Vietnamese businesses should be prepared to penetrate and exploit the demanding US market to full advantage.

In addition to their competitive prices, they should focus on meeting strict customer requirements and improving sales and marketing methods.

Under the provisions of the Food Safety Modernisation Act of 2011 (FSMA) as of October 1 2012, foreign food exporters to the United States must register with the Food and Drug Administration (FDA) for a registration number. Re-registration must be completed between October 1 and December 31 in even-numbered years. Those that do not go through the re-registration process will be cancelled and/or declared void by the FDA as of January 1 2013.

In addition, the FDA also requires foreign food exporters to have representatives serving as their mandatory US Agent, who will be responsible for answering any FDA questions within 24 hours.

These new regulations mean they will be subject to more non-tariff barriers.

Vietnam, UK firms accelerate cooperation

Vietnam and United Kingdom (UK) businesses gathered at a meeting in Hanoi on November 13, discussing means to increase bilateral cooperation.

The event, organised by the Vietnam Chamber of Commerce and Industry (VCCI), created an opportunity for UK firms to seek counterparts and outlets in Vietnam for their products, including those in telecommunications, education and training and services.

The two sides’ cooperation results have yet to match each other’s potential, said Tran Thien Cuong, head of the VCCI’s International Relations Department, stressing that there is much room for further cooperation.

In the near future, the two sides need to focus on market access and implementing new projects. Vietnam’s forte in agricultural production, the garment and textile industry, and aquatic produce should be utilised. Meanwhile, attention should be focused on the UK’s expertise in high-technology, industrial equipment, biological and educational knowledge, Cuong added.

Two-way trade between Vietnam and the UK in the first three quarters of 2012 reached US$2 billion, according to VCCI.

Trade surplus hit US$64 million

The nation’s trade surplus climbed to US$64 million in the first 10 months of the year, according to the General Department of Customs.  

Total trade topped US$187.5 billion during period, an increase of 12.5 percent over the corresponding period last year. However, exports rose at a faster pace, fetching US$93.8 billion, an increase of 19 percent, while imports rose 6.7 percent to US$93.7 billion.

The trade surplus in October alone was US$662 million.

Foreign-invested enterprises accounted for 55 percent of the nation’s export value during the 10-month-period, with exports totalling US$52 billion, an increase of 36 percent over the same period last year. Meanwhile, the import value of foreign-invested enterprises rose 24 percent to US$49 billion, accounting for 53 percent of the nation’s total imports.

Source: VNN/VNA/VNS/VOV/VIR/SGT/SGGP/Dtinews/VGP