Firms broker deals at water expo

Millions of US dollars in transactions are expected to take place during the sixth VietWater 2014 Expo and Forum which opened yesterday in HCM City.

Speaking on opening day, M Gandhi, the managing director event organiser ASEAN Business (UBM ASIA), said this year's event was 25 per cent bigger in comparison with the latest edition, with the participation of 300 companies from 32 nations and territories worldwide.

"This is where we can address problems in a frank and open manner by assisting investors and entrepreneurs in the country's fledgling water industry," he said.

Launched six years ago, the event is the country's number-one international water supply, sanitation, industrial wastewater treatment and purification exhibition and forum.

During the three-day forum, participants will showcase the latest modern technologies and seek business opportunities in the Vietnamese market.

As one of the biggest delegations joining the event, Japan has brought 37 companies that will demonstrate their modern water-supply and wastewater treatment technology.

In an interview with Viet Nam News at the event, Toshihiro Mitshuhashi, director general of the Manufacturing and Environment Industry Department under the Japan External Trade Organisation, said nearly 2,400 meetings among Japanese and Vietnamese companies took place at last year's event, with four of them successful and 76 others promising.

He expects the number of meetings and contracts to increase this year as Viet Nam is one of Japan's most important partners and many Japanese companies have projects in the country.

France is one of 15 countries with a pavilion at VietWater 2014. With eight companies, the delegation is highlighting its technologies in soil and polluted-site decontamination and rehabilitation; biological treatment of organic waste; water and sanitation; and complete ductile cast-iron pipeline systems.

All of the French companies have operated in the country, and expect to have fruitful meetings.

Business matching, which will also occur at the French pavilion, is expected to lead to memorandums of understanding and letters of intent.

The French delegation hopes that Vietnamese companies and institutes will trust their suppliers, said Vincent Huynh, commercial counsellor of French in Viet Nam.

VietWater 24 will be open through tomorrow at the Sai Gon Exhibition and Convention Centre (SECC) in District 7 in HCM City. Workshops will also be held tomorrow.

Canada imports more tra fish

Viet Nam's tra fish exporters should expand their market to Canada to avoid a state of dependence on existing key export markets, experts said.

According to Viet Nam's General Department of Customs, the value of the country's tra fish exports to Canada in the first nine months of 2014 reached US$28.9 million, a 4.5-per cent year-on-year increase.

The price of frozen Vietnamese tra fish exports to Canada likewise surged compared with that of last year, the customs department said.

The Trade Office of Viet Nam in Canada revealed that the North American country has a consumption style similar to that of its neighbour, the United States, but without the strict regulations of the US market.

If domestic seafood companies enter the Canadian market, they could increase the volume of their exports to the US, said the Cong thuong newspaper.

For Canadian customers, nutrition, safety and convenience are the quality standards that they expect exports to meet, and they are ready to pay a high price for quality products, the trade office said.

Some domestic seafood enterprises admitted that Canada was likewise an attractive market for other Vietnamese seafood products because it has an average import value of US$500 billion per year.

This makes the US neighbour an attractive market for all countries in the world, including Viet Nam, reported the Thoi bao Kinh doanh (Business Times) newspaper.

To promote seafood exports in this potential market, domestic exporters should improve the quality of their products to increase competitiveness and adopt professional marketing strategies, the trade office added.

They should pay special attention to the labels of products, as well as the time and conditions for delivering goods, prices and the ability to supply goods.

According to Hua Van Hao, president of Kien Fat Trade Company in Toronto, Viet Nam should strengthen the state management of tra fish exports in terms of quality and price in order to meet international standards.

Lenny Wong, executive director of Ocean Parkers Inc., stressed the large potential of the Canadian market for Vietnamese seafood products, adding that his company had imported and distributed 600 containers of tra fish and ba sa fish all over Canada every year.

Wong also said Viet Nam should set up a quality control system suitable to Canadian market standards to ensure that domestic seafood products pass the tests of the Canada Food Investigation Agency.

Banks offer credit priority in Mekong agriculture sector

The banking system has contributed much to socio-economic development in the Mekong Delta by providing local farmers and enterprises with the funds required to fully exploit the region's agricultural potential.

And this flow of capital is expected to increase, with the governor of the State Bank of Viet Nam, Nguyen Van Binh, saying at a recent conference held in Soc Trang Province that banks should to give priority to the agricultural sector in the delta.

The delta is the country's main rice and seafood producing area, accounting for 90 per cent of exports of the former and 65 per cent of the latter.

Banking credit grew by 14 per cent, 10.7 per cent, and 12.4 per cent in the three years since 2011. As of September 30 this year agricultural loans outstanding amounted to VND332.6 trillion (US$15.8 billion), nearly 8 percent higher than at the end of last year.

At the conference, titled the Mekong Delta Economic Cooperation Forum, banks signed credit contracts with 17 agro firms based in four provinces – Tien Giang, Soc Trang, Ninh Thuan, and Thanh Hoa – and the cities of Da Nang and Hai Phong.

It was under a nation-wide pilot lending programme set up by the central bank and Ministries of Agriculture and Rural Development and Science and Technology. So far, 27 companies have got total loans of VND4.6 trillion.

But economists warn that bank lending for socio-economic development faces hurdles since the planning and management of programmes are not competent.

VNPT submits plan to split up businesses

In keeping with Viet Nam Post and Telecom Group (VNPT)' June-approved grandscale restructuring plan, a recent proposal to establish three new firms was submitted to the Ministry of Information and Communications (MIC) and the Prime Minister.

The three firms, VNPT- Net, specialising in network infrastructure; VNPT- Vinaphone, operating in telecommunications; and VNPT- Media, operating in multi-media services, will divide VNPT's core businesses into specialised firms, similar to a split-up.

The restructuring of VNPT will need to reallocate human and financial resources to avoid overlap, said the group's general director, Tran Manh Hung.

The three new firms will operate independently and will be vigorously evaluated for efficiency by the VNPT group.

According to Hung, restructuring will help tighten the budget, simplify organisation, and reduce corporate red-tape. Siphoning off the group's core businesses into specialised firms is a molve to enhance competitiveness and efficiency, he added.

Rebound seen for VN rubber shares

In spite of the declining profits of rubber producers listed on the Vietnamese stock markets following a decline in world rubber prices, future prospects for the rubber industry remain bright.

With global rubber supply increasing beyond demand, profits from Vietnamese rubber exports in the first 10 months of 2014 plunged by 26 per cent year-on-year to US$1.45 billion.

Phuoc Hoa Rubber (PHR), the Vietnamese rubber producer with the largest charter capital, achieved an average selling price of VND42.2 million ($1,900) per tonne, or VND2.6 million ($122.6) short of expectations. Its net profit in the first three quarters of the year likewise dropped by 37 per cent to VND143.5 billion ($6.7 million).

As a result, PHR plans to scale down its revenue target by 10.6 per cent to VND1.36 trillion ($64.1 million) and its profit target by 22.5 per cent to VND207 billion ($9.7 million).

Other companies such as Dong Phu (DPR), Hoa Binh (HRC), Tay Ninh (TRC) and Thong Nhat (TNC) likewise experienced a reduction in profits by more than 30 per cent and had to scale down their targets by half.

However, companies in the rubber industry are still better off than those in other industries. For instance, they managed to pay high dividends ranging from 10 to 30 per cent this year in spite of the difficulties.

According to Nguyen Dinh Thanh, MB Securities Company head of brokerage, the companies' price-to-earning and price-to-book value ratios were lower than the market's average.

"This signals a long-term potential for investment activities as the prices are cheap," Thanh said. He predicted that rubber prices would rebound because international buyers, especially those from China and India, were expected to buy more cars and tyres, and demand might recover following the reduction in the number of rubber plants.

Deputy director of VNPT, Pham Duc Long, said the division of operations would not create difficulties for the reallocation of VNPT's profits, nor the group's capacity to oversee the management of day-to-day operations.

He said that new accounting departments would be set up to monitor the allocation of profits and new a new management model would be put in place.

The Government's decision 888/QD-TTg, made back in June, approved VNPT's restructuring plan which promised to divest capital from 63 non-core companies.

The group has successfully divested VND400 billion (US$18.8 million) from Sacom Investment and Development Corporation (SAM) and will continue withdrawing its VND700 billion ($32.9 million) from Maritime Bank.

The divestment strategy takes on its largest investments first before rounding up the process with smaller ones. Divestment from the 63 companies will be completed next year, said a VNPT representative.

So far the communications and media group has maintained stable growth despite the restructuring process started this summer. The group's revenue in the first nine months of this year has remained healthy at VND77 trillion ($3.6 billion).

Hung said that the group set a growth target of 10 per cent for the 2014 year. However, for the next year the target growth rate was set at 25 per cent as things hopefully become more stable and restructuring is well under way.

HCM City bourse dips, Ha Noi stocks gain

Trading on the HCM Stock Exchange yesterday repeated Wednesday's performance by losing ground in the last minutes, while stocks continued to grow on the Ha Noi Stock Exchange.

The VN-Index in HCM City inched down 0.14 per cent to close the session at 603.16 points as investors increased selling blue chips to gain marginal profits.

Large-cap shares like Masan Group (MSN), PetroVietnam Drilling Wells Service (PVD), Kinh Do Corp (KDC), Bao Viet Holdings (BVH) and Hoa Sen Group (HSG) all fell steeply.

The VN30 which tracks the top 30 shares by market value and liquidity dipped by 0.47 per cent to end at 638.87 points.

Money continued to pour into realty stocks such as FLC Group (FLC), Tan Tao Investment Industry Corp (ITA), Kinh Bac City Development (KBC). However, all of these shares still lost value.

FLC remained the most active stock with more than 21 million shares traded, but the share price slumped by four per cent to close at VND11,900.

Liquidity improved over Wednesday's market as both market volume and value rose 20 per cent, totalling 157.5 million shares worth almost VND2.5 trillion (US$118 million).

Foreign investors continued to unload shares in HCM City's market yesterday, responsible for a net sale value of VND109 billion ($5.1 million) worth of shares.

By contrast, the HNX-Index in Ha Noi climbed to an eight-month high of 91.49 points, up 0.39 per cent over Wednesday's close.

Hot stocks like KLF Joint Venture Global Investment Co (KLF) remained the centre of attention in Ha Noi. The share continued to be the most active code with 18.7 million shares changing hands, but the price dropped by 4.2 per cent to VND13,700 after recent strong gains.

The trading volume was little altered from the previous day, totalling just under 78 million shares at a net worth of VND1.15 trillion ($54.2 million).

Foreign sectors again concluded the day as the largest buyers with a pick up of VND14.5 billion ($731,100) worth of shares.

"Money is still flowing well in the market and the outlook remained in a positive sideways condition. However, we recommend investors to keep a reasonable ratio of cash in preparation for active buys when the market declines," analysts of FPT Securities Co said yesterday.

EU-funded project to help domestic enterprises

A project that seeks to promote trade among Vietnamese enterprises, as well as between them and European Union (EU) firms was launched in Ha Noi on Wednesday.

The three-year-long Trade Capacity Viet Nam project, worth 525,000 euros (more than US$650,000), will see the participation of more than 150 Vietnamese small- and medium-sized enterprises (SMEs).

It will also facilitate the involvement of associations in developing trade policies and international investment, while improving the trade capacities of SMEs.

The project's Director Nguyen Van Toan said that a nuclear trade network of 300 Vietnamese SMEs will be established in order to increase the links between domestic firms in this field.

Vietnamplus quoted Jean Jacques Bouflet, Minister Counsellor of the EU delegation to Viet Nam, as saying that the free-trade agreement between Viet Nam and the EU, which is expected to be signed soon, will bring huge opportunities for domestic enterprises, including tax reductions for major products such as apparel, seafood and footwear.

In order to take full advantage of the agreement, SMEs should improve their understanding of the EU market and its consumers, while getting deeply involved with the EU distribution system, Bouflet said, adding that the reviewed project will help these firms by improving their capacities and providing trade support.

Former Trade Minister Truong Dinh Tuyen agreed that Vietnamese businesses will get several opportunities when the Viet Nam-EU free-trade agreement gets inked. However, he warned that there are also challenges ahead such as of competition, financial capacities and human resources.

Domestic enterprises, especially SMEs, need to overcome these challenges and make full use of the new opportunities that the agreement will bring to expand their trade and investment relations, he said.

Last year, the Viet Nam-EU bilateral trade reached US$33.6 billion, a year-on-year increase of 16 per cent, of which Viet Nam's exports accounted for $24.4 billion.

The EU is one of the biggest investors in Viet Nam, with 1,401 investment projects and a total registered capital of $18.02 billion in various sectors, including industry, construction and services, Tuyen pointed out.

Viet Nam mainly exports apparel, footwear and coffee, besides furniture and seafood to the EU, while the EU exports machinery, medicines and aircraft, as well as equipment and vehicles.

Export firms need to be aware of trade laws

Vietnamese export firms need to improve their awareness and preparations to cope with the World Trade Organisation's trade defence that allows importing countries to take action against exporting nations, a senior official said.

Speaking at a seminar in HCM City yesterday on "Sharing experiences on how to cope with and take advantage of the WTO's trade defense and dispute settlement mechanism," Nguyen Phuong Nam, deputy head of the Ministry of Industry and Trade's Competition Department, said: "Knowledge of the WTO's trade defence is very important for export firms to reduce risks and losses in the international trading environment."

The WTO recognises three principal trade defences — anti-dumping, anti-subsidy, and safeguard instruments.

Anti-dumping is designed to allow countries to take action against imports that cause or threaten to cause material injury to the domestic industry.

Anti-subsidy measures allow importing countries to take action against certain kinds of subsidised imports. "Subsidies" are defined as financial assistance from a government to a company.

Safeguard measures are defined as "emergency" actions with respect to increased imports of particular products, where such imports have caused or threaten to cause serious injury to the importing member's domestic industry.

Since 1994 Viet Nam has come up against 80 lawsuits under the WTO's trade defence provisions, a fifth by the US and 22 per cent against the steel industry.

"Because of limited financial and human resources, export firms have limited knowledge of the law and always suffer very big losses in the long term," Nam said.

They also suffer because they do not know foreign languages and are reluctant to face lawsuits, he said.

Trade defense lawsuits hit export companies' competitiveness and exports, often cause them to lose markets and spend huge amounts of money on lawsuits, and see them hit with high import tariffs for five years and more.

"Viet Nam won two anti-dumping lawsuits in 2010 and 2012 by using safeguard measurements," lawyer Dinh Anh Tuyet said.

"However it took one to two years to persuade the Government and companies had to spend a lot and lost many opportunities."

She said enterprises must learn about international laws when they start exporting and be well prepared to avoid lawsuits.

Investors show faith in Viet Nam

Viet Nam has ranked sixth among the top 10 investor destinations in the Asia-Pacific Economic Co-operation (APEC) Forum, a study of PricewaterhouseCooper (PwC) has revealed.

The PwC's study, entitled "New Vision for Asia-Pacific – Connectivity Creating New Platforms for Growth," was based on the thoughts and experiences of more than 600 chief executive officers and industry leaders across 39 economies, with key focus on the 21 APEC economies.

According to the study, about 15 per cent of the CEOs chose to invest in Viet Nam and put the country in sixth place among the 10 top investor destinations after China, Australia, the United States, Indonesia and Hongkong-China.

Viet Nam likewise ranked seventh among APEC economies that are expected to receive intensive investments next year, after China, the US, Indonesia, HongKong-China, Singapore and the Philippines. This is based on the preferences of 45 per cent of the CEOs in the study.

The study also noted that 67 per cent of the CEOs planned to increase their investments in the Asia-Pacific region in the next 12 months.

As much as 57 per cent of respondents likewise expressed intentions of investing in capital projects in the region over the next three to five years. China, where 37 percent of large-scale projects are located, remains the dominant destination.

Capital projects are being planned in each of APEC's 21 economies. For instance, some CEOs had plans of building a new production plant in Malaysia, a distribution centre in South Korea and an expanded office in Singapore to accommodate a new headcount.

The study was carried out between June and August 2014, and its results were announced during the APEC CEO Summit in Beijing last November 10.