Bank inks co-operation pact with rubber group

Vietcombank and Viet Nam Rubber Group (VRG) signed an agreement on Thursday to cooperate in their services, investments and human resource development.

The bank undertook to provide the company with financial assistance for its production and business activities, and with services such as deposits, payments, guarantees, foreign current management and risk prevention.

To seal the commitment, the bank signed a VND750 billion (US$35.71 million) credit contract on the same day with MDF VRG Quang Tri, a member company of the group.

The contract will be used to finance the construction of a medium density fibreboard (MDF) factory, costing nearly VND1.23 trillion ($58.57 million).

The factory will manufacture 120,000 cubic metres of fibreboard per year in central Quang Tri Province.

"This agreement proves that the relation between Vietcombank and VRG has achieved a new level, opening up new co-operation opportunities for both sides to promote advantages, exploit potential and enhance competitiveness," the bank said in a press release.

Vietcombank said it had supported VRG investments in such areas as rubber growing, wood processing, and infrastructure, traffic and industrial zone development, with a total fund of over $145 million.

VRG, one of the nation's major economic groups, is expected to manage 500,000ha of rubber plantations by 2015. It is expected to reach an annual output of 1.5 million tonnes and export revenues of $3 billion by 2020.

VN-Chile pact likely to boost bilateral trade: official

The Viet Nam-Chile Free Trade Agreement, to take effect in January, is expected to boost investment and trade between the two countries, a Ministry of Industry and Trade official has said.

Speaking at a seminar on trade opportunities with Chile as well as the US in HCM City yesterday, Nguyen Duy Khien, director general of the ministry's America Market Department, said under the agreement Chile was committed to eliminating tariffs on almost 84 per cent of Vietnamese goods within 10 years.

Certain goods like footwear, garment and textiles, seafood, coffee, tea, computers and accessories, wood products, mobile phones, and handicrafts, which currently attracted 6 per cent tariff in Chile, would enjoy zero tax immediately after the agreement came into effect.

But to enjoy the lower tariff, goods had to meet requirements related to their origin.

Vietnamese firms therefore needed to conduct more research about the market and carefully study the terms of the agreement to take full advantage.

Nguyen Thanh Quang of the Chile Trade Commission said though trade between Viet Nam and Chile was still modest, it had expanded strongly in recent years to top US$606 million last year.

Chile enjoyed a trade surplus with Viet Nam since Viet Nam imported a large volume of copper from Chile, which accounted for 47 per cent of the world's copper reserves.

Viet Nam mainly exports leather footwear, cement, garment, frozen seafood, coffee, electronic products, and rice, and imports copper, salmon, pinewood, wine, fruits, and fish paste.

Besides investment and trade, Quang said, Vietnamese firms also needed to co-operate with Chilean partners in tourism.

But language and payment problems could cause difficulties for Vietnamese firms in doing business with Chile.

Speaking about the US market, Khien said though Viet Nam's exports to the US had grown strongly, they accounted for less than 1 per cent of the US's total imports.

The signing of the TPP would help increase exports of Vietnamese goods to the market.

La Thi Lan, deputy chairwoman of the HCM City Union of Business Associations, said Chile was a promising market for Vietnamese products, but businesses knew little about it.

The seminar was held to help businesses understand more about the Chilean market and preferential treatment under the FTA so that they could make plans to effectively exploit the market, she added.

Plenty of business opportunity in US, Chile

Ministry of Industry and Trade (MoIT) official Vo Ta Luong has said learning more about the US market—Vietnam’s biggest exporter— and Chile—a gateway to Latin America – will help businesses with trade promotion and market development.

Luong was speaking at a seminar in HCM City on December 13.

The US, Chile and Vietnam are among the 12 negotiators of the Trans-Pacific Partnership (TPP) agreement. When the trade pact comes into force, it will create plenty of opportunity for Vietnamese businesses to penetrate these two most important markets in Americas, Luong said.

He said trade ties between Vietnam and the US and between Vietnam and Chile have grown and flourished over the years.

Vietnamese exports to the US rose nearly 18% in the first 10 months of this year to US$17 billion, while its export earnings to Chile also increased 39% to US$177 million.

The MoIT hopes its support will help Vietnamese businesses export their goods to 35 continental American countries in the near future, reducing its reliance on traditional markets.

Nguyen Duy Khien, another MoIT official, said Chile will slash tariffs on 99.62% of commodities imported from Vietnam when a bilateral free trade agreement (FTA) takes effect as of January 1, 2014.

Vietnam has also committed removing tariffs on 87.8% of commodities imported from Chile under the FTA.

Tax cuts will help Vietnam increase the competitiveness of its export products and encourage renowned brand makers to manufacture products in Vietnam for export to Chile.

Meanwhile, Vietnam raked in more than US$20 billion from its exports to the US in 2012, making up just 0.88% of the US’s total import value. Major export products include garments, footwear, woodworks, electronics, and seafood.

The US shipped more than US$4.6 billion worth of goods to Vietnam last year.

However, Khien noted Vietnamese businesses are vying with those from China and Canada to get a larger market share in the US. Vietnamese products are faced with technical and trade barriers, and complex regulations on labour and the environment.

In addition, Vietnamese businesses have yet to develop reputable brands in the US, and they mostly work on manufacturing contracts.    

Delegates offered local businesses advice on how to best tailor their approaches to Chilean and US customers.

Japan supports Hanoi’s urban railway project

The Japan International Cooperation Agency (JICA) worked with the Hanoi Municipal People’s Committee on December 13, discussing an urban railway project in the capital city.

Japan’s Tokyo Metro Group is one of the major investors of Hanoi’s 13-km Metro route No1 linking Cat Linh and Ha Dong.

The project is due to be put into operation in 2015, helping ease traffic congestion and reduce environment pollution.

At the meeting, Nguyen Van Khoi, Vice Chairman of the Hanoi People's Committee, revealed Japan has committed to providing official development assistance (ODA) to the project to ensure it is completed as scheduled.

Tokyo Metro Group representatives agreed a safe, convenient, and comfortable urban railway would encourage Hanoi’s integration and economic development.

VCB cooperates with 40 Japanese banks

The Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) will be the only Vietnamese institution serving the Japanese business customers of 40 specified Japanese Regional Bank (JRB) branches.

A memorandum of understanding to this effect was signed between Vietcombank and the Japan Bank for International Cooperation (JBIC) in Hanoi on December 13.

Vietcombank’s recently established Japan Desk specialises in providing banking products, services, and consultancy tailored exclusively to Japanese business needs.

Vietcombank has also offered direct cooperation with individual JRB branches. Six of the 46 JRB branches working with Vietcombank have accepted so far.

Cuba offers Vietnamese businesses incentives

Cuba will give top preferences to Vietnamese businesses wishing to invest in the country, Consul General Bernabe Carcia Valido has said.

At a December 13 meeting with Can Tho City leaders, Valido invited Vietnamese businesses to explore investment opportunities in Cuba’s recently constructed tax-exempt industrial zone.

Cuba currently prioritises tourism, communal healthcare, agriculture, and industry.

Vo Thanh Thong, Vice Chairman of the Municipal People’s Committee thanked Cuba for the privileges it grants to Vietnamese businesses and especially those investors based in the Mekong Delta investors.

He pledged to direct the Can Tho Trade, Investment, and Tourism Promotion Centre to pass on news of the incentives to relevant businesses and work with the Cuban Embassy to introduce the policies in detail.

Ten contracts signed with Chinese businesses

Vietnamese and Chinese businesses signed five trade contracts and five more on tourism at a Quang Ninh province seminar on December 13.

Participants proposed a number of initiatives to promote trade and tourism traversing the border marked by Vietnam’s Mong Cai and China’s Dongxing. These included border tourism services, border infrastructure investment, raising tax exemption thresholds for border trade, and easing travel between the two countries.

The two sides will jointly promote cross-border tourism and build tourism cooperation areas.

Trinh Dang Thanh, Vice Director of Quang Ninh’s provincial Department of Culture, Sports, and Tourism, said the two sides will develop self-driven tourism vehicles to increase available space for border tourism development.

He said he believes cooperation can be improved between Quang Ninh and Guangxi province management agencies and their respective business constituents, especially in regards to tours and the standard of tourism services.

Mong Cai City People’s Committee Chairman Duong Van Co, said developing tourism and trade across the Vietnam-China border trade accelerates local economic growth, generates local employment, and improves the cultural and spiritual life of local citizens.

Binh Duong opens customs office at int’l seaport

The southern Binh Duong province has established a customs office at its international seaport, which is located at the centre of the land and water transport network in the southeastern region.

The new customs office is hoped to facilitate administrative and customs procedures for export-import activities in the region.

In addition, it will help reduce transport cost and time for local businesses as they no longer have to travel to Ho Chi Minh City to complete customs procedures for their import-export goods.

Binh Duong has so far counted 28 industrial parks and eight industrial complexes covering a total area of 9,800 ha, with many of them have been filled.

As one of the country’s biggest economic hubs, the province hopes to gain an export value of over US$14.44 billion this year, up 15.7 percent annually, with the foreign-invested sector making up 81.3 percent of the total.

Its imports are forecast to reach US$11.58 billion, with raw materials for production as well as machinery and equipment adding to a year-on-year increase of 16.5 percent.

Ireland funds rural area development projects

The Irish Government has committed up to US$18.3 million for infrastructure development in ethnic minority and mountainous areas during 2013-15, as part of Programme 135.

The funding was pledged in an agreement signed yesterday between Minister, Chairman of the Committee for Ethnic Minorities of Viet Nam Giang Seo Phu and Irish Ambassador Damien Cole.

Under the agreement, the funds will be used for the construction of small scale infrastructure projects in the poorest communes in eight provinces, including Cao Bang, Ha Giang, Bac Kan, Dien Bien, Thanh Hoa, Quang Ngai, Kon Tum and Tra Vinh.

The Irish and Vietnamese governments will evaluate the effectiveness of the grants on an annual basis. If any of the participating provinces fail to fulfill their commitments, the funding will then be allocated to other provinces.

Speaking at the ceremony, deputy chairman of the committee, Son Phuoc Hoan, said Viet Nam has received strong financial and technical assistance from international organisations and friends, including Ireland, which had helped the country successfully reach its development and rebuilding targets.

He expressed special thanks to the Irish Government for its contributions to Viet Nam's achievements in eliminating hunger and reducing poverty, saying that the assistance had helped maintain and consolidate the co-operation and friendship between the two countries.

Programme 135 seeks to improve the lives of people living in communes, who face extreme hardship in ethnic minority and mountainous areas, in order to narrow the gap in living standards among Viet Nam's regions and ethnic groups.

From 2006 to 2010, the programme received VND14 trillion ($666 million), more than half of which came from international donors, deputy chairman Hoan said, adding that it was considered by donors to be a transparent and efficient programme.

He stressed that localities receiving funds have promised to use the Irish Government's resources for the improvements agreed upon.

Irish Ambassador Damien Cole said sustainable poverty reduction in ethnic minority areas was one of the top priorities of the Irish Government.

Therefore, it committed to continue supporting the Vietnamese Government's efforts to improve the living standards of millions of poor people in the upcoming years, he said.

SBV sells all gold offered at auction

Thirteen credit institutions purchased all 15,000 taels of gold offered by the State Bank of Viet Nam, at the cost of VND35.37-35.42 million (US$1,684-1,686) per tael yesterday.

Gold prices in both local and world markets have fallen slightly.

In Viet Nam, the Saigon Jewellery Company (SJC) posted gold prices between VND35.29-35.42 million ($1,680-1,686) on its website, while on the kitco.com trading floor gold was selling at $1,224.70 per ounce, or $1,475 per tael.

Prices in Viet Nam remained $211 higher per tael than global gold rates.

The bank has sold over 1.785 million taels of gold since its first auction in March.

METRO raises exports of Vietnamese produce

Do Kim Dung, the Fresh and Frozen Sourcing Manager at the METRO Singapore Trading Office, has highlighted the great potential of exporting fruits and vegetables to China and other countries.

"The first 23-tonne batch of Vietnamese dragon fruit shipped to Shanghai earlier this month had signalled the great potential of exporting quality fruit and vegetable products from Viet Nam to China and other countries," she stated.

During the last several months, METRO Cash&Carry Viet Nam, the METRO Singapore Trading Office and Viet Nam's agencies have joined hands to boost Vietnamese exports via the METRO network.

"This was the first trial order delivered by Red Dragon, a Vietnamese company," said Dung. "The volume of this order is small, but we hope it will grow within the next few years."

Czech firm opens electronic components plant in Quang Nam

Hydra, an electronic Czech company, has opened a plant at the Dien Nam-Dien Ngoc Industrial Park in central Quang Nam province.

The plant, which has been fully financed through a foreign investment of US$8 million during the first stage, plans to produce electronic components and accessories for exports, starting next year.

It will employ 250 local workers.

Thaco to produce diesel engines for trucks, buses from 2015

The Truong Hai Automobile company (Thaco) will begin producing diesel engines for trucks and buses from 2015, the company said.

The company's engine manufacturing plant, whose construction commenced last year with an investment of US$185.5 million, will produce nearly 20,000 engines meeting the Euro 2 and Euro 3 Emission Standards between 2017 and 2018.

Half of these will be for sale in the domestic market.

Last year, Thaco produced 24,500 vehicles, generating total revenue of VND12 trillion ($571.4 million).

Thaco, in partnership with French automaker Peugeot, will also begin manufacturing and assembling the Peugeot 408 and 3008 models.

Residential construction lags behind in Ha Noi

More than 90 per cent of urban areas in the capital are grappling with the problem of slow construction, the municipal People's Committee was quoted as saying in the Business Forum online newspaper.

The percentage makes up for 137 out of Ha Noi's 152 urban areas.

Of these, 45 residential areas are in the process of building technology infrastructure, while 92 others have been granted approval by planners for the land clearance process.

The committee stated that the 15 urban areas that had finished infrastructure planning included the Linh Dam complex, Trung Hoa-Nhan Chinh, Dinh Cong, Dai Kim, My Dinh 1, My Dinh 2, Phap Van-Tu Hiep, Van Quan-Yen Phuc, Southeast Tran Duy Hung Street, Phu Thinh-Son Tay, Vincom Village and Trung Yen.

HCM City to keep land prices unchanged

The municipal People's Committee has announced its decision in principle to maintain land prices at current levels next year.

However, the city could consider promulgating new land prices for some new roads, which became operational this year.

Land prices on the Dong Khoi, Le Loi, Le Thanh Tong and Le Lai streets in District 1 are estimated to be the highest at VND81 million (US$3,850) per square metre, while those in the suburban districts, including Can Gio, Nha Be, Binh Chanh, Hooc Mon and Cu Chi are pegged at the lowest level of VND110,000 ($5.2) per square metre.

Capital plans to build 33 industrial zones

As per the Government's planning for 2030, which envisions development till 2050, Ha Noi will have 33 industrial zones and high-tech parks.

The city currently has 19 industrial zones and high-tech parks, which have been approved by the Prime Minister. The city manages 18 of these zones, while the Hoa Lac high-tech park falls under the management of the Ministry of Science and Technology.

Eight zones falling under the city have a filling rate of 95 per cent; five others have been under construction, while the five remaining zones have been listed under the list of industrial zone planning by 2020.

The municipal People's Committee has asked the Industrial Zone and Processing Zones Management Board to conduct surveys and collect planning results for the city's districts and report them to the Government next year.

VN grappling with limited land resources: report

Viet Nam has been listed as one of countries that have the lowest land resources globally, with less than 0.5 hectares of agricultural land per capita.

The information was released at a conference on Natural Resources and Environment held in Ha Noi on Thursday. It revealed that there had been a boom in urban land speculation in the country, which had affected housing funds for low-income people, while a big chunk of industrial zones had been left unutilised.

In addition, Viet Nam's natural resources at sea had been placed at risk by illegal exploitation. 

Eximbank introduces Eximbank-JCB int’l payment card

Japanese card issuer JCB and Vietnam Export-Import Commercial Bank, or Eximbank, yesterday jointly introduced international payment card Eximbank-JCB, facilitating payments of customers in the country and overseas.

JCB credit card enables payments for goods and services at JCB international points of sale (POS) and via the Internet in Vietnam and 190 countries. The Eximbank-JCB card will also help cardholders pay for electricity, water, telephone and cable TV bills.

Besides, cardholders are allowed to withdraw cash at one million automated teller machines (ATMs) worldwide. Users can check transactions with the card thanks to Internet Banking, Mobile Banking and SMS Alert services.

According to JCB representatives, Eximbank is one of the first banks JCB has cooperated with to issue its cards in Vietnam.

The lender has also offered many incentives for customers who register to use the product such as annual fee exemptions in the first year, bonus money for the first shopper who has the highest purchase value from now to March 1, 2014, with the prize being a trip to Japan. Customers will also enjoy other preferential policies at POS of JCB Plaza and Eximbank.

Speaking at the launching ceremony of Eximbank-JCB card yesterday, Koremitsu Sannomiya, chairman and managing director of JCB International Co. Ltd. (JCBI), said that the enterprise entered Vietnam in 1991 to increase the number of POS at stores and restaurants for Japanese tourists. Now, as part of its business expansion, JCBI has issued the card for Vietnamese clients to support their payments at POS globally.

Sannomiya also pledged to join hands with Eximbank to expand the payment card market share in Vietnam.

Concerning competitiveness of JCB on the local market where there have been many international card issuers, Sannomiya said that JCB will try will create distinctions of Japanese culture to bring about new experiences to users.

To attract customers, the enterprise will launch promotion programs and improve customer services. The local market has seen around two million credit cards versus a population of 90 million. This is a potential market for card issuers and banks, he said.

In addition, information security will be the most important issue.

Dinh Thi Thu Thao, deputy general director of Eximbank, said that the bank has strongly invested in security software to protect benefits of customers. ATM protection will also be improved to prevent data piracy.

For online transactions, Nguyen Dinh Quy, director of Eximbank Card Center, told the Daily that Eximbank has applied security measures such a 3D Secure. When a transaction is made, an identification code will be sent to the customer’s cell-phone. The transaction is only done when the client enters the code on the payment website.

For ATM transaction, the bank is going to launch fingerprint identification service to prevent information loss.

Sannomiya said that JCB first launched card service in Japan in 1961. At represent, it has expanded its network to 25 million POS and over one million cash advance points in 190 countries and territories.

The JCB card has been issued in 16 nations and territories with over 82 million members. In Vietnam, JCBI has cooperated with Sacombank and VietinBank to issue international credit cards.

Singapore’s UOB eyes GPBank

Singapore’s United Overseas Bank Limited (UOB) has got clearance to begin due diligence at Global Petroleum Bank (GPBank) in a bid to acquire this local lender, said a senior official of the central bank.

UOB is currently a strategic shareholder of Southern Commercial Bank and current laws do not allow a foreign organization to invest in two local banks at the same time. However, UOB plans to acquire GPBank and turn it into a 100% foreign-owned branch.

UOB has been looking into GPBank for four months already. They are very careful, the official said.

Concerning the possibility of GPBank recovering after UOB’s investment, he said the local bank has poor liquidity. If a financially strong foreign investor injected capital in it, it would be able to maintain and revitalize its operations some day, he said.

GPBank is among nine banks in the central bank’s restructuring scheme. The lender has a high bad debt ratio that has made inroads into its equity.

If UOB proceeded with the acquisition, it would become the first foreign institution to take over a local bank in the country. This case would also pave the way for foreign investors to get more involved in Vietnamese banks than the current foreign ownership limit (FOL) of 30%.

Aside from UOB, many foreign organizations have shown interest in acquisition of 100% stakes in local banks.

Dinh Quang Hoan, deputy general director of Viet Capital Securities Company, said some foreign organizations and big investment funds would be ready to invest if they were allowed to hold a majority stake in domestic banks.

Concerning an increase of FOL to 49%, the official said the FOL increase should be considered if the local economy remained in difficulty and if the financial capacity of domestic investors ran dry.

Foreign investors can help local banks to solve problems. However, the FOL increase must ensure that foreign capital would be channeled into dealing with short-term difficulties, such as improving liquidity for banks.

Local investors also want to invest in banks but their limited financial resources are a major hindrance, he said, adding when they are strong enough, they can buy back banks from foreigners.

According to the bank restructuring scheme approved by the Government, the FOL can only be raised to 30% or higher when the Government gives approval on a case-by-case basis.

Forex loan requirements to remain loosened

Local exporters will still be able to take out forex loans for business activities next year with conditions continue to be loosened, according to a circular recently issued by the central bank.

Export companies can take out short-term forex loans from banks and exchange them into Vietnam dong to carry out business and production plans if they have enough foreign currency incomes from exports to repay debts. However, exporters borrowing foreign currency will have to sell disbursed loan to lenders at the spot price.

The new circular will be applicable until December 31, 2014. It replaces the Circular 37/2012/TT-NHNN on giving foreign currency loans to resident borrowers that will end its validity at the end of this year.

This is the second time the central bank has postponed forex loans restrictions given in Circular 03/2012/TT-NHNN.

Accordingly, credit institutions and branches of foreign banks are only allowed to provide foreign currency loans to customers to make payment for the import of goods and services to overseas parties, not to convert them to Vietnam dong for business.

Given the new circular, local banks are also allowed to provide short-term loans to fuel wholesalers that the Ministry of Industry and Trade has allocated the 2014 quotas when these enterprises need foreign currency to pay foreign partners for imported fuel or do not have enough foreign currency incomes to pay the bill. The regulation will also be applicable until December 31, 2014.

Other importers are also eligible for foreign currency loans if they have enough foreign currency incomes to pay debts.

Concerning forex loans to implement outbound investment projects, the circular only allows credits for national key projects approved by the National Assembly and the Government and licensed by the Ministry of Planning and Investment.

Under Circular 03, importers are ineligible to borrow foreign currencies at banks either for payment purposes or for conversion into dong to carry out business and production activities. As a result, foreign currency credits have tumbled since early this year.

In HCMC, total outstanding loan in foreign currencies as of the end of November had declined 22.1% against late 2012 while dong outstanding loan increased by 12.1%.

In previous years, corporate borrowers usually had strong demand for the greenback to pay bank loans. This year, the enterprises do not have high dollar demand, resulting in stability in the dong-U.S. dollar exchange rate.

Recently, the central bank has announced to maintain the exchange rate until the end of this year. Since early this year, the dollar has appreciated by only 1% against Vietnam dong, lower than earlier estimation of this agency.

Local banks currently offer foreign currency short-term lending rates from 4-6% per annum while dong lending rates hover from 9 to 11% per annum.

Specific bankruptcy rules for banks needed, experts say

Although managing agencies in Vietnam have repeatedly affirmed to keep Vietnamese credit institutions from bankruptcy, some experts believe that it is necessary to let ailing banks go bust and establish specific regulations for their bankruptcy.

Economic experts and consultants under the World Bank (WB) in Vietnam have sent a document to the composing board of the Amended Bankruptcy Law and other related agencies, suggesting that now is the right time to set up clear regulations for credit institutions’ bankruptcy. There should be a specific chapter, exceptions and other rules for the issue, they said.

The law must stipulate that bankruptcy procedures must be opened soon enough to prevent adverse impacts on society, maintain financial stability and confidence in the financial system. Therefore, early actions in the court’s receivership are a must, the experts said.

Speaking to the Daily, the general director of a joint stock bank in HCMC said that a bank is also an enterprise operating for the goal of profit. “While other companies that have performed poorly can declare bankruptcy to re-establish a new business, why can’t banks go bankrupt, too?” he said.

However, the banker noticed that bankruptcy procedures for banks must ensure stability of the financial system, including normal operations of the payment network, money transfer and protection of depositors.

Some local banks now see high vulnerability and systematic risks. As banks take out short-term loans to provide long-term credits, they will be very vulnerable to massive withdrawals.

When a bank collapses, it will cause a domino effect on other credit institutions, resulting in a systematic crisis. For a bank that has made mistakes and lost its liquidity, the problem must be solved, the banker added.

The WB specialists also said that the situation will get worse if State agencies continue to protect poorly-performing banks.

The Government has hinted that the State is standing behind banks, so residents will not discriminate between good and bad banks. As a result, they will flock to deposit money at banks with high mobilization rates while such lenders are those facing capital shortages, they explained.

In the long term, the Government’s commitments may harm local banks, put more pressure on macro management agencies and result in high social expenses for the economy. Therefore, timely intervention of managing agencies to shut down incapable banks is important to prevent adverse impacts on their bankruptcy, the experts added.

Seasonal labor demand for Tet drops sharply

With two weeks to go before Christmas and less than two months before the Lunar New Year holiday, or Tet, seasonal labor demand among many companies in HCMC have declined by 20-30% despite posting a strong rise at this time last year.

Tran Anh Tuan, deputy director of the HCMC Center of Forecasting Manpower Needs and Labor Market Information, said that at this time in previous years, multiple enterprises normally register to recruit workers through job placement centers in the city but few have done that this year.

Meanwhile, there is a rise in the number of enterprises resorting to other channels including employing workers by themselves or seeking the applicants via the Internet or labor supply companies, Tuan said. However, he said, less than 10,000 seasonal positions are expected from now until the end of next year’s first quarter, tumbling roughly 20-30% against last year.

Tuan ascribed the fall to the fact that plenty of confectionery and garment packing firms had tried to avoid recruiting more employers to save on expenses, saying that demand for domestic helpers during the Tet holiday still picked up some 50%.

Kim Phung of the Thanh Nien job placement center said the labor recruitment demand transferred to the center from local businesses shrank sharply over the same period in 2012. The drop in labor demand is from companies specializing in packing Tet confectionary, processing calendars, delivering Christmas presents or those working at entertainment areas, she clarified.

In the meantime, salary levels are rising, with most workers given a daily wage of VND150,000-250,000, although their working hours are less than eight hours. In particular, Phung reported that her center had recruited 100 students to distribute leaflets during rush hours who were paid roughly VND200,000 per shift. But she noted the current job supply failed to meet working demand from local students.

Tuan estimated seasonal labor demand from the service industry to run high in January. Specifically, Tuan predicated a strong rise in labor demand in February and March compared to January and the final months of 2013 will come from manufacturing and processing industries in need of unskilled workers such as textile-garment, leather-footwear, foodstuff processing, plastic-packing and construction, he said.

In the first quarter, labor demand from local companies will be around 55,000 people including about 15% for seasonal labor and 40% for unskilled labor, he projected.

VN-Russia trade expands four times

The Viet Nam-Russia two-way trade volume was estimated at US$ 4 billion in 2013, increasing fourfold from five years ago.

The news was announced today in Ho Chi Minh at a seminar on business opportunities in Russia and the EU.

The EU is the biggest export market of Viet Nam with US$20.3 billion in 2012 and US$ 17.8 billion in the first nine months of 2013.

Both Russia and the EU are potential markets of Viet Nam. However, export turnovers still failed to meet respective potentials and advantages.  

A large number of delegates attributed the lack of market information to inefficient approach of Vietnamese enterprises.

In the Russian market, for example, exporters must ensure quick delivery and good quality.

Regarding the EU market, Vietnamese enterprises were suggested to producing products which would be able to meet different tastes of EU member states.

In addition, due to high barriers of protection, Vietnamese enterprises would be subjected to anti-dumping tax or preventive polices if they want to quickly ship goods to the EU.

Bank deposits remain safest investment

Despite the rising popularity of more risky investments, such as in the stock market and gold investment, bank deposits are still considered the safest and surest way to keep money and earn stable returns in 2014.

According to Dr.Dau Anh Tuan, from the Vietnam Chamber of Commerce and Industry (VCCI), even though some enterprises are still expanding and taking risks in tough economic times, most are merely trying to survive.

He said, "Since 2000, the entrepreneurial spirit has never seen such a low, especially at small and medium-sized firms. This is worrisome because domestic firms are the key force driving our economy forward."

On the other hand, deputy CEO of MB Securities JSC, Quach Manh Hao, said doing nothing makes economic sense in difficult times, but that business should not give up on looking for opportunities. "I think it will take at least two or three more years for the economy to recover," he said.

Hao went on to say that bank deposits are a solid investment choice for the next year because the future of the stock market and real estate is unclear.

He added that people can still bet on the stock market and government's efforts to push economic growth. The stock market will rise, not because of better economy but because people will become more optimistic. "I like this channel of investment because of its high liquidity," he said.

Former deputy head of National Financial Supervisory Commission Le Xuan Nghia, was more cautious. He recommended, "People should keep half of their money in the bank before investing the rest on stock market."

On the subject of investing in gold, one of the most popular investments for Vietnamese, Nghia said people must be more flexible since gold prices are on the decline. Instead of depending on gold, Nghia said, sell it when the prices are high, people now can borrow gold, liquidate it then buy the gold back when the prices get lower.

In the meantime, the real estate market does not seem to be a profitable investment channel now.

The former minster of Natural Resources and Environment, Dang Hung Vo, said before 2008 real estate was extremely profitable. This channel only fell out of favour when the government applied monetary policies to reduce inflation.

"I think it finding the best investment channel will depend on individuals perceptions of the situation," he said.

Dong Nai to expand eco-industrial parks

The southern province of Dong Nai has ratified a project to develop eco-industrial parks (EIP) until 2020, with a vision towards 2025, aiming to expand the environmental industry into a high-profit sector.

Under the project, the province will prepare specific plans to establish eco-industrial parks and clusters in close connection with its realistic conditions between next year and 2015.

Besides the sustainable use and renewal of natural resources, Dong Nai is expected to increase the number of environmentally friendly businesses and organisations that apply advanced technologies in environmental protection by 2015.

Priorities will be given to the promotion of environmental consulting services, the building of works to limit environmental pollution, waste recycling and clean energy.

The province also encourages local enterprises to invest in researching and producing equipment to constrain environmental pollution and develop a waste treatment system.

In the coming time, many eco-industrial clusters will be established at existing parks which have not yet attracted investment such as Ho Nai, Song May and An Phuoc Industrial Parks.

Vietnam’s tourism sector maintains growth momentum

2013 is set to be a bumper year for the tourism sector as it has already welcomed 6.8 million visitors in the first eleven months so far, which represents an increase of 10.2 percent over the same period last year, says Nhan Dan Online.

This sharp increase in growth could mean that the sector sees 42.4 million tourists, including 7.4 million foreigners; possibly reaching total revenue of 195 trillion VND in 2013.

After four-years of recovery from impacts felt within the sector due to the world’s economic recession in 2009, the number of foreign holiday-makers to Vietnam has doubled and the revenue earned from tourism is 2.2 times higher.

The figures show that the sector has reached 2015 targets set in the Strategy on Developing Vietnam’s tourism two years ahead. It is likely that the targets for 2014 of attracting 48 million visitors, including 8 million foreigners, and earning 220 trillion VND in total revenue, could be met.

These impressive achievements are the result of clear-sighted guidelines set by the Party, State and Government over the past years, as part of aims to build tourism up into a key industry. Favourable conditions, including a sharp increase in interest from foreign visitors in visiting Vietnam’s abundant tourist attractions; with which the country is naturally blessed, have contributed to the success.

Notably, at the beginning of this year, the number of visitors to Vietnam slumped slightly; leading those working in the field to investigate why. They found that some shortcomings in the sector’s operation, which can be dealt with, include weak management, poor sanitary conditions, increases in tourists being cheated during high season, unattractive and unoriginal tourist products, limitations in marketing and the lack of human resources working in the field.

However, throughout the entire sector efforts were made and, helped by effective co-ordination with relevant units, most of the weaknesses have begun to be addressed, ensuring the sector’s development stays on track. The infrastructure for the country’s tourism sector has been improved and the staff, directly and indirectly working in the field, are increasing and their training is improving.

For the upcoming peak tourist season of New Year 2014, the hospitality sector will focus on realising the Government Instruction on health and safety as well as ensuring security for visitors. One of the goals under this is to build hygienic toilets at all tourist sites.

It is expected that the hospitality sector will continue to create momentum for its robust development in a bid to achieving its 2014 target of attracting 48 million visitors, including 8 million foreigners, and earning 220 trillion VND in total revenue.-

Fiscal policy shake-up in energy sector needed

United Nations Development Programme (UNDP) experts in Vietnam have pressed for the overall financial reform of the energy sector, including prices of fossil fuels, as Vietnam is restructuring its economy aligned with its shift to a sustainable green growth model.

A workshop in Hanoi on December 10 looked into fiscal policy shake-up in the fossil fuel sector and green growth, with experts at home and abroad in attendance.

According to them, the shake-up matches the National Strategy on Green Growth goals, requiring reforms in energy markets and the State-run enterprises involved.

Vice President of the Vietnam Academy of Social Sciences (VASS) Nguyen Quang Thuan stated that the gradual removal of energy subsidies is a key part of domestic economic restructuring.

It will force businesses to turn to energy-efficient technology and encourage the private sector to invest in the industry.

Some said that there needs to be a proper and transparent roadmap so that policy reform does not come as a shock to businesses.

The workshop was a joint effort between the UNDP and the VASS.

Christmas market sees weak purchasing power in City

Ho Chi Minh City is currently bustling with preparations for the Christmas festive season with many promotional programs being launched by stores; and trade centers, supermarkets, hotels, restaurants, shops, churches and homes already bedecked with lights and festive decorations.

Hundreds of different kinds of Christmas decorations are being seen at many supermarkets and gift shops, a large number of which have been made in Vietnam. What is noticeable from the previous Christmas was preference for Chinese rather than Vietnamese items. Thanks to lower prices and more pleasant designs, Vietnamese made items have gained ground.

However, just two weeks before Christmas, the markets are still dull with consumers showing weak purchasing power.

Christmas decorations at offices, hotels, restaurants, shops and cafés have decreased by 20-30 percent year-on-year. Bakeries have not launched new kinds of Christmas cakes, only Santa-shaped and stick-shaped cakes (Bouche) for VND200, 000 and VND500, 000 each.

Most supermarkets such as Metro, Big C, Co.op Mart, Maximark and trade centers are offering a discount of 5-40 percent on hundreds of goods.

Businesses hope that purchasing power will improve in the last week before Xmas. The economy is still unstable, and most families have tightened spending on Christmas and luxury goods.

Trade plaza project in dispute with provincial authorities

In a recent meeting with Quang Ninh province authorities, director of Bai Tho Trade JSC Pham Trung Tam expressed the company’s desire to continue executing the $2.5 million Bai Tho Trade Plaza.

Tam said Bai Tho Trade JSC was awarded an investment certificate for the project in January 2011, nearly five years after the first proposal was approved by the local People’s Committee.

At the time, the company mulled completing the project by the fourth quarter of 2013, but due to economic difficulties, the company later asked the authorities to scale down construction from four floors and a basement, to just two floors.

In January 2012 the People’s Committee put their stamp of approval on Bai Tho’s new plan that incorporated the proposed changes.

In May 2012, the company was granted a construction permit that required the company to begin work no more than three months later.

That deadline was long passed when in July this year the People’s Committee said they would take back the space allocated to Bai Tho for the project.

Last month the People’s Committee went a step further by revoking the trade plaza’s investment license from the company.

Tam said the company did not receive any warning letters or other documents prior to authorities repossessing the land and revoking the license.

“Authorities did not consider the difficulties our company faced with this project that particularly disadvantaged us against foreign players in the same field such as BigC and Metro,” said Tam.

He revealed that in late 2012, the company was requested to change the location of the trade plaza, and that contributed to construction delays.

He also noted that by that time, bank interest rates were as high as 25 per cent per annum and had suspended medium and long-term loans to firms. The company couldn’t move forward with construction until it found a reasonable source of capital.

“We have arranged capital for the project and if we get the necessary documents, we can complete it within nine months after breaking ground,” Tam said.

As of yet there has been no response from Quang Ninh authorities.

Foreign partners ditch local banks

While most banks are scaling up efforts to attract foreign strategic partners to bolster their strength, the market has also seen several foreign entities break up with their local partners.

In late November, the market saw the parting of Singapore’s Oversea-Chinese Banking Corporation (OCBC Bank) from local partner Vietnam Prosperity Bank (VPBank)

OCBC Bank reportedly disposed of its nearly 15 per cent stake in VPBank, more than 85 million shares, valued at $55 million.

The stake was transferred to a group of local investors.

VPBank said it facilitated OCBC’s withdraw as it was an opportunity to find a new strategic partner more compatible with its growth strategy.

The market has seen foreign partners withdraw from other banks as well.

Australia and New Zealand Banking Group (ANZ) sold its 9.73 per cent stake in local partner Sacombank to Eximbank, a domestic group.

It was rumoured that ANZ left after failing to find footing with Sacombank’s Board of Directors.

The two banks had previously mulled cooperation in several areas, but once ANZ became a wholly foreign-owned company in Vietnam it cancelled these plans, including a card centre that was near completion.

“Splits are inevitable when investors cannot find a common voice with their partner and have difficulty participating in the governance of their local partner banks,” said one executive from a foreign bank in Vietnam.

General director of Saigon Commercial Joint Stock Bank Vo Tan Hoang Van said that to ensure a suitable strategic partner, banks should discuss their cooperation ideas and plans to ensure there is a mutual understanding.

Satra opens cold storage facility in Binh Dien Commercial Zone

Saigon Trading Group (Satra) on December 10 opened the Satra Cold Storage facility in Binh Dien Commercial Zone in District 8 in Ho Chi Minh City.

Built over an area of nearly 28,000 square meters at a cost of about VND250 billion, the Satra Cold Storage has capacity for 20,000 pallets and includes separate cooling chambers to maintain temperatures from minus 25 degrees Celsius to 5 degrees Celsius to cater to various storage and preservation demands of clients for seafood, vegetables, fruits, and fresh flowers.

The storage also provides additional services such as packaging, labeling, preliminary treatment, and freezing.

Tet run-up means harder work for many

Hearing about the expected lower Tet bonus this year, employees at many companies are trying to find extra work to earn some money for the holiday.

Nguyen Thi Hang, from Nam Dinh Province’s Y Yen District, who is working at a household goods company in Hanoi, said that so far this year, she has received only six-months of her salary. Her director promised to pay the rest by the end of the year along with a Tet bonus. However, the accountant said to her that the company’s staff members can only expect to get the three-month salary more and a very small Tet bonus.

Nguyen Thanh Huyen, from Hanoi’s Quoc Oai District, a worker at a garment company, worried that her Tet bonus this year would be the same as last year, when she and her colleagues were given 80 pairs of shorts. To date, the company still owes her three-month salary.

Disappointed at last-year Tet bonuses, along with pressure on Tet spending this year, many employees are seeking to find part-time jobs to cover the low bonuses. However, it is not easy to find jobs at this time.

Hong Lien in Ton Duc Thang Street, Hanoi, from a construction company said her firm has very little work, so she found a delivery job for another company.

Initially, she only intended to spend afternoons doing this extra work, but now the situation has changed. Due to the current urgent demand, she often has skip her main job.

One female employee at an electronic company in Hanoi, spent part of her time at the office selling cosmetics. She is constantly worrying about being found out by her manager when she leaves to get more product.

She says it is extremely tiring trying to hold down both jobs at the same time.

Tet bonuses for employees at Vietnamese enterprises are expected to be less than previous years due to the economic downturn, said Tong Thi Minh, head of the Ministry of Labour, Invalids and Social Affairs' Labour and Salary Department.

Tet bonus will be divided into three groups, the highest bonuses will be in the hundreds of millions of VND; the second, for medium-level employees and the third group may get nothing, she added.

Ministry to manage OTT services

Minister of Information and Communications Nguyen Bac Son has requested the Department of Telecommunications to develop policies for over-the-top (OTT) service, which offers users free phone calls and text messages.

The department will suggest mechanisms, policies and solutions to be implemented in 2014 that lower the impact on the efficiency of telecom businesses, while ensuring the rights of service users and companies.

Earlier, on October 31, the ministry issued Instruction No 75 on international telecommunications service management and development enhancements, including instructing telecom companies to perform research and development.

Meanwhile, Pham Hong Hai, head of the department, said the number of mobile phone subscribers using the system in November 2013 was 120 million, including those not making outgoing calls. With a total population of 90 million people, each Vietnamese person owns 1.3 SIM cards, on average, he said.

Hai added that it is time to restructure the market to ensure sustainable development of telecom firms because small companies, such as S-Fone and Gtel, are facing many difficulties.-

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