New airport in Dong Nai expected to open by 2020

The transport ministry has asked the Prime Minister to approve the construction of a new international airport in Long Thanh, Dong Nai Province.

The airport is expected to be put into operation by 2020 in order to reduce the overload at the HCM City-based Tan Son Nhat international airport.

Total investment capital for the first phase of the project is estimated at more than US$6.7 billion.

The ministry has proposed to mobilise investment capital for the project from the State budget, Government bonds, Official Development Assistance capital and from businesses.

Partners crucial for local retailers

 

Co-operation was one of the most crucial factors to help domestic retailers survive in the domestic market since the country opened its doors to international retail at the beginning of 2009 under its commitment to the World Trade Organisation (WTO), a seminar was told.

At a meeting held by the Ministry of Industry and Trade (MoIT) in Ha Noi on Tuesday, Huynh Van Minh, chairman of the Viet Nam Distribution Network Development and Investment Joint Stock Company said Vietnamese retailers should work with both local and foreign partners under joint stock, capital contribution and joint investment models.

Chairman of Phu Thai Joint Stock Company Pham Dinh Doan agreed with Minh, saying that domestic retailers should create favourable conditions to attract foreign investors.

"Foreign companies are very interested in co-operating with Vietnamese partners in the retail field. In a joint venture, the Vietnamese partner should hold 51 per cent or more of the charter capital, so they are financially secure. Therefore, co-operation should be encouraged," Doan suggested.

At the meeting, Nguyen Thi Hong Huong, director of Vinatex Mart conceded that co-operation among domestic retailers was still lacking sustainability, saying that foreign retailers were controlling the market which forced local retailers to follow their lead.

Huong also said co-operation among Vietnamese retailers would help sharpen their competitive edge in the retail field while boosting domestic production and their grip on the market.

Vinatex was co-operating with several large local retailers in the fashion field, including Intimex, Fivimart and Hapro. However, they were struggling to work together, due to problems regarding location, she said.

Several retail representatives expressed their concerns over the sudden influx of foreign retailers with abundant capital, following Viet Nam's commitment to the WTO. They went on to suggest that foreign companies received preferential treatment when it came to choosing retail locations.

Meanwhile, Vietnamese retailers were mostly small-and-medium-sized companies with low competitiveness, due to a lack of capital and human resources, and were not given the preferential treatment that their foreign competitors enjoyed.

A representative from Hapro said Vietnamese retailers should focus on retail infrastructure development, adding that they were faced with difficulties in finding locations to built trade centres. As a result, they had to sub-lease land from private firms while foreign retailers were given priority regarding land to build trade centres.

To help them compete, Minh said that domestic retailers should be allowed to rent land with long-term contracts at preferential rates.

Chairman of the Viet Nam Retailers Association Pham The Rue said the Government should create a playing field for both foreign and local retailers regarding the business environment and land policies.

At the meeting, MoIT's deputy minister Ho Thi Kim Thoa said the ministry would mull over policies on distribution and retail system development.

Regulations for joint-ventures between foreign and domestic retailers with a 51 per cent or more share held by local partners would also be considered, she said, adding that the ministry would also review policies on logistical system development and "Made in Viet Nam" programmes in order to help retailers become more competitive.

Thoa said MoIT would co-ordinate with the Ministry of Natural Resources and Environment to set up a land fund for distributors and retailers.

"Smuggling, counterfeit commodities and trade fraud would be strictly punished," she added.

Workshop examines co-operatives law

A two-day workshop on ways to improve the management of trade co-operatives ended Monday in the central province of Quang Nam's Tam Ky City. 

The workshop aimed to highlight German experiences in improving the management of co-operatives to help Vietnamese experts who are considering proposing changes to regulations on co-operatives.

Viet Nam Co-operative Alliance's deputy chairman Nguyen Xuan Hien said participants had addressed the problems with Viet Nam's system.

Christian Albrecht, an audit expert from Germany's Co-operative and Raiffeisen Confederation (DGRV), said reformed co-operatives needed to be highly market-oriented, while also acting as a group that represented each member's rights.

"Only by that way of operation can fairness be achieved in a co-operative," said Albrecht.

He said lawmakers should streamline procedures and regulations to stimulate the development of co-operatives, while also ensuring labour rights.

The workshop was jointly hosted by the Viet Nam Co-operative Alliance and the DGRV.

Companies learn to be more competitive, with Italy's help

 

Vietnamese small and medium enterprises will be provided technical assistance to sharpen their competitive skills in global markets through a cluster development approach, as part of a project funded by Italy.

The 3-million-euro (US$3.4 million) "SME Cluster Development" will help enterprises from three clusters: (1) textiles and garments in Ha Noi, the northern province of Hung Yen and the southern hub of HCM City, (2) footwear and leather industries, and (3) wood processing and furniture in HCM City and southern Binh Duong Province.

The selected firms must operate for at least two years, meet the projects' demand for financial capacity and have development and export potential.

Deadline for applications is March 22.

Chosen enterprises would receive support in designing, branding, market targeting, production efficiency, quality assurance and finishing processes to produce higher value-added products, said project chief technical advisor Francesco Russo.

Knowledge of market standards, requirements and best practices would also be offered to help the firms better access international markets, he said.

In addition, new market and partnership opportunities, in particular linkages with Italian enterprises, would be opened up.

"Through business co-operation, the project will help Vietnamese firms upgrade and be more competitive," Italian Ambassador Lorenzo Angeloni said. "Italian enterprises will also get opportunities to know and enter into one of the fastest developing economies in the world."

"Individual SMEs, mostly due to their size, are often unable to identify and capture opportunities. Business linkages among enterprises within clusters will lead to a better chance of tapping the opportunities," said Nguyen Trong Hieu, deputy director of the Enterprises Development Agency under the Ministry of Planning and Investment.

Clusters are local economic systems characterised by a significant aggregation of SMEs in the same area, producing a range of similar or related products, and interconnected by an intense network of business relations.

In many countries such as Italy, clusters have been the environment where SMEs could reach high degrees of competitiveness and efficiency, overcoming their individual limits through close interaction, specialisation and co-operation.

Yesterday also witnessed the signing of a memorandum of understanding between the Italian Chamber of Commerce in Viet Nam and the Ha Noi Business Association.

These understandings were expected to make effective contribution to developing the bilateral relations in business, trade and investment between the two countries.

As of October last year, Italian businesses had invested more than $189 million in 40 projects in Viet Nam. Italy ranked 31st among 93 countries and territories investing in the country.

Two-way trade reached $797 million in the first half of last year, up 7.7 per cent compared to the same period last year. Viet Nam's export value to Italy accounts for 10 per cent of Viet Nam's total export earnings from the EU market, according to statistics from the Viet Nam General Department of Customs.

Viet Nam's major exports to the market are footwear, seafood, garments and textiles, coffee and wood and wood products. Viet Nam's imports from Italy are mainly machinery, equipment and production materials.

Investors hesitate to convert SSI bonds

Twelve institutional investors who bought VND2 trillion (US$95.2 million) worth of one-year convertible bonds from Saigon Securities Inc (SSI) last year are reluctant to convert the bonds into common shares due to the dwindling value of SSI share prices on the market.

SSI closed yesterday's trades at just VND21,400 (about $1) per share, but investors who opted to convert the bonds to shares would be acquiring shares at the equivalent of VND35,639 ($1.70) per share – fully 66.5 per cent higher than the stock market price.

If the bondholders do not convert the bonds into shares, SSI will have to repay the value of the bonds.

March 24 is the deadline for bondholders to register to convert and March 28 will be the day for SSI to issue repayment to those who do not opt to convert. The company has affirmed that it has sufficient money to repay the bondholders.

According to SSI financial statements at the end of last year, the company's cash and other liquid assets (excluding investor deposits) totalled more than VND1.3 trillion ($61.9 million).

However, SSI deputy director Nguyen Hong Nam said the firm realised that stock market conditions were unfavourable and was prepared to return all money to bondholders.

"After redeeming the bonds, we will still have enough cash and other resources to operate as normal," Nam said.

SSI share prices have lost over half of their value in the year since the bond issue. In March 2010, they traded at VND40-45,000 ($1.90-2.15) per share.

Analysts have suggested that firms issue bonds at longer terms, such as three years, with a partial conversion rate over the time, in order to reduce risks of stock price fluctuations.

Garment industry eyes $20b exports

 

The garment sector hopes to almost double exports to US$20 billion by 2020, a conference heard in HCM City yesterday.

Pham Gia Hung of the Viet Nam Textile and Apparel Association (Vitas) said the Viet Nam Garment and Textile Development Strategy also targeted increasing domestic consumption to $6 billion by then.

Exports were worth $11.2 billion last year and domestic sales, $4.2 billion.

Local content would account for 70 per cent in 2020, he said.

Last year, the industry imported $8.9 billion worth of cotton, fabric, fiber and accessories.

To increase local content, the industry planned to seek more investment in growing cotton and in facilities to manufacture fabric and accessories, Hung said.

He called on the industry to achieve a better balance between downstream (garment and terry towel) production capacity and upstream (cotton ginning and spinning) to reduce the imports.

To achieve the export and other targets, the association would also focus on exports of high-medium and high-end products and on training human resources in technology, fashion design, production management and fashion marketing.

It would set up production facilities in the areas where human resources were abundantly available and transportation was convenient besides opening textile and dyeing industrial zones in Da Nang and Nam Dinh, Thai Binh, Nghe An, Dong Nai and Tra Vinh provinces, Hung said.

He urged garment companies to ensure quality.

The recent acceleration in the shift in export orders from China to Viet Nam was a positive sign but also a challenge since the industry depended on import of raw materials, Hung said.

The US is the biggest importer of Vietnamese garment and textile products (55 per cent), followed by the EU (18 per cent), Japan (11 per cent), South Korea (3 per cent), and ASEAN member countries (2 per cent).

The main export items are T-shirts, polo shirts, trousers and shorts in the low and medium segments.

There are 3,700 companies in the garment and textile sector, 35 per cent of them foreign owned, based mainly in HCM City and the southeast.

The conference was organised by the HCM City branch of the Viet Nam Chamber of Commerce and Industry in HCM City and the US-based Dun&Bradstreet, a global business information provider.

Bank funds animal breeding project

A US$79 million project, funded by the World Bank, has been of great benefit to the country's animal husbandry sector, according to the Ministry of Agriculture and Rural Development.

The Livestock Competitiveness and Food Safety Project (LIFSAP), which began last year, aims to improve husbandry products in all three stages — production, processing and consumption.

Introduced in Ha Noi, HCM City and Dong Nai and Thai Binh provinces, the five-year project encompasses investment in breeding infrastructure, animal feed, breedstock, competitive production, animal hygiene, animal-disease control, and construction of slaughterhouses.

A good animal husbandry practice (GAHP) zone or area has been set up in each of these places.

Hoang Kim Giao, head of the Breeding Department, said the project had already helped reduce animal mortality rate and improve their growth.

It had also helped animal farmers reduce the environmental pollution caused by their activity.

This year some 2,000 breeding households are expected to receive financial support to buy equipment, including bio-gas trenches.

Each GAHP area will get $30,000 to build a station to produce compost from animal excrement.

All breeding households in GAHP areas will receive free training in GAHP.

Eight other provinces and cities have identified 48 GAHP areas that meet the criteria, out of which 39 have been approved and will be implemented this year.

The World Bank has agreed to provide each GAHP $10,000 per hectare, up from the earlier $5,000.

Many slaughterhouses and food markets will be upgraded and a waste management system built this year.

Some 45 abattoirs have already been chosen in seven provinces and cities, with 15 of them set to be upgraded this year.

The World Bank recently agreed to increase funding for the upgrades from 25 per cent to 50 per cent and the maximum assistance per slaughterhouse from $30,000 to $50,000.

Public abattoirs will get 100 per cent funding.

The project also focuses on the management of food safety at markets, including sanitation control, improving quarantine service, training for market management staff, and meat preservation at stalls.

But the process is running behind schedule, with none of the 12 markets getting upgrades planned for last year.

Of 223 food markets in 11 provinces and cities that were considered, 190 fulfilled the conditions required to join the project this year.

They will get 100 per cent financial support for their upgrades.

Largest commercial centre to be built in Hanoi

The Savico Mega Mall project, the largest commercial venture in Vietnam, was introduced by CB Richard Ellis Vietnam and the Saigon General Service Corporation (Savico) in Hanoi on March 9. 

The commercial centre will be situated in the Long Bien district covering an area of 63,000m2 with 30,000m2 for outdoor activities, parking and green areas.

According to Richard Leech, CBRE Vietnam’s Executive Director, the retail sector’s total revenue in Vietnam raised by 30 percent last year, while, the spaces for retail activity increased only slightly by 14 percent at 118,480m2.

In addition, some old commercial centres such as Vincom and Trang Tien Plaza are now being upgraded or repaired.

With the rapid development of urban areas and the huge demand for large commercial centres, they will soon become popular models for retailing in the future, Leech added.

Minimising risks when trading with Africa

The African market has great potential, however, there are many hidden risks for traders, said Ly Quoc Hung, Head of the Ministry of Industry and Trade (MoIT)’s Africa-West Asia-South Asia Markets Department.

Hung stated this at a seminar in Hanoi on March 8 about minimizing risks when trading with Africa.  

Participants in the seminar talked about the advantages and disadvantages of doing business in Africa, the contents of import-export contracts, methods of preventing risks in trading and resolving disputes through an arbitrator.

Vietnam-Africa trade turnover increased from US$15.5 million in 1991 to US$2.56 billion in 2010. With high purchasing power and great demand for imports, Africa is a significant potential trading market for Vietnam, Hung noted.

Nevertheless, most African countries are under developed, the laws and policies are still being shaped, infrastructure is backward, the banking system isn’t growing well and there are still limitations on information. This has caused some difficulties and made Vietnamese businesses shy of doing business, widening cooperation with African partners and penetrating the African market.

To increase trade cooperation with Africa, the Government launched a national action plan to promote relations with Africa in the 2008-2010 period. On October 4, 2010, the MoIT approved the plan to push exports to Africa.

Vietnam-Africa trade turnover is expected to reach US$4-5 billion in the future.    

Vietnam looks for new markets to export rice

Vietnam exported nearly 1,2 million tonnes of rice, earning US$600 million in the first two months of this year, up 63 percent in volume and 50 percent in value compared to the same period last year.

The Vietnam Food Association said this year’s rice exports are facing challenges from changes in the purchasing methods of some traditional markers and rising input costs.

The Philippines, which often imports one-third of Vietnam’s rice output, has changed from competitive bidding to commercial purchasing.

Bangladesh has decided to buy 200,000 tonnes of Vietnamese rice, including 100,000 tonnes of rice parboiling at US$575 per tonne and 100,000 tonnes of 15-percent broken rice at US$530 per tonne.

Improving business capacity for EU market

 

Improving the capability of associations and businesses in accessing the European Union market and enhancing the relationship between the private economic sector and State management organisations were discussed at a seminar in Hanoi on March 9.

Vice President of Vietnam Leather and Footwear Association (Lefaso) Nguyen Thi Tong said this is part of the project "IN_TRADE: Innovation and Trademark as a tool to successfully compete in global markets" under project MUTRAPIII funded by the EU.

The nation’s leather and footwear sector and other sectors are increasing their export revenues to potential markets, more than half of which comes from the EU market, she said.

However, she said, this was a good opportunity for Vietnam’s associations and businesses to better understand difficulties and challenges when penetrating the market.

Meanwhile, Director of the Hanoi Rubber Joint Stock Company Pham Hong Viet emphasised the urgent need for small and medium-sized enterprises to have plans to restructure their businesses and professionalise their management methods when joining in a common market.

Businesses need the Government and social organisations’ assistance to take part in the programme, he said.

He also laid stress on the necessity to have professional methods for domestic businesses to access their customers, as a number of businesses have to work with a number of trade companies in the Republic of Korea, Hong Kong, Taiwan and China when entering the EU market.

The Italian and Belgian experts shared their experiences in building trademarks, technical assistance for businesses, assistance from the Government and trade promotion programmes and negotiations to benefit from the generalised system of preferences (GSP).

VinaCapital: VN still leading emerging economy

VinaCapital has expressed belief in Vietnam’s economic development, saying it is still one of the world’s leading emerging economies and a destination for foreign investors.

The financial group CEO, Don Lam said at a press briefing in Ho Chi Minh City on March 9 that in recent meetings with foreign investors, VinaCapital continued to hear their recognition of the Vietnamese economy’s long-term potential. They, however, expected Vietnam’s reaction to economic challenges in 2010-11.

VinaCapital is a leader in asset and investment management and real estate development in Vietnam, running a property portfolio worth over US$1.7 billion in total.

Andy Ho, Executive Manager of VinaCapital, unveiled a plan to attract US$300-500 million from foreign investors to establish two more member funds, VOF II and VinaLand II, to further invest in local companies and the property market. In 2011, the group also expanded the operation of VinaSecurities after signing an agreement with Macquarie Capital. It has also inaugurated VictoryCapital company in Phnom Penh, Cambodia, to help Vietnamese companies interested in Cambodia, besides its main goal of running investment over there.

For his part, Alan Pham, head economist of VinaSecurities, said 2010 was a relatively successful year for the Vietnamese economy despite its double-digit inflation. Recently, the Vietnamese Government has for the first time issued comprehensive monetary policies, including fiscal targets and foreign exchange rates to curb inflation.

These polices are expected to work in the near future, he added.

On this occasion, Don Lam was presented with the Labour Order by the State President. He said VinaCapital’s success was based on stable economic growth and its long-term growth process in Vietnam.