Indian, VN garment firms tie up

The Indian Synthetic and Rayon Textiles Export Promotion Council (SRTEPC) last week announced a tie-up with lingerie maker Anh Khoa Production and Trading Company Ltd.

A memorandum of understanding was signed on the occasion of a visit by Smita Pant, the Indian consul in HCM City, to the Sai Gon Fabric and Garment Accessories Expo (Sai Gon Tex) which ended in the city on Sunday.

Under the deal, Anh Khoa will import materials from SRTEPC members.

Ngo Ngoc Hoa, CEO of Anh Khoa, said that initially his company would buy feedstock from India and the co-operation would later be expanded to other fields.

With Indian companies participating for the first time, Sai Gon Tex offered them an opportunity to look for partners in Viet Nam at a time when India plans to invest US$300 million in the Vietnamese garment and textile industry as committed by its Government during Prime Minister Nguyen Tan Dung's visit last year.

Joint stock firm gets GMP status

Joint-stock drug firm Savipharm yesterday received a certificate of good manufacturing practice (Japan-GMP) from Japan's Ministry of Labour, Welfare and Health for its factory in HCM City's Tan Thuan Export and Processing Zone for the 2015-20 period.

The factory employs advanced technology, and Savipharm is among several drug firms in Viet Nam managed by a modern supervisory control and data acquisition (SCADA) system, according to company chairman Tran Tuu.

The certification will help the company boost exports. Its products have entered the markets of Japan and several ASEAN countries, but the volume is still modest.

"We'll make major investments from this year in building additional three workshops and a research and development centre in the zone where our current land has sufficient space for them," said the chairman.

He also told Viet Nam News that he would look for foreign capital and that several multinational firms have shown interest in becoming partners.

He expects to achieve turnover of VND1 trillion (US$45 million) in 2020, which would be an annual increase of 30 per cent compared to current figures.

Huge ship enters Hai Phong Port

Maersk Nicolai, with a capacity of 2,274 24-foot containers (TEU), is the first feeder vessel owned by Maersk Line.

It sailed from Cai Lan port and made its call at Tan Vu port in Hai Phong last week.

Maersk Nicolai is the biggest ship that has ever stopped at Hai Phong port. This was the first voyage of Maersk Line's upgraded NV5 service. The ship's capacity of 35,000 tons is a third higher than that of previous ships used on this service.

The NV5 service is one of Maersk Line's biggest feeder services in Viet Nam, contributing to the flow of imports and exports. The main commodities carried on the service include garments, footwear and electronics.

The ship calls on Hai Phong bi-weekly. The ship's port of calls are Hai Phong, Da Nang, Tanjung Pelepas (Malaysia) and Singapore.

Seminar casts light on investment opportunities in Cuba

Vietnam-Cuba bilateral trade jumped more than 45% to US$207.5 million last year, including US$206 million from Vietnam exports and US$1 million from its imports.

The figure was released at a seminar in Hanoi on April 14 with the purpose of helping Vietnamese businesses seize investment opportunities in the Caribbean nation.

In his speech, Vietnam Chamber of Commerce and Industry (VCCI) Vice President Doan Duy Khuong, said Vietnam mainly exports food, cereals, confectionery, footwear, ceramics, sanitation goods, construction materials, coal, textiles and garments, and chemicals, while imports are mostly pharmaceuticals and supplementary food.

The two governments have paid special attention to promoting cooperation in many fields, especially economics, construction, transportation, bio-technology, agriculture, education, health care, sports and physical training.

The two countries have signed a series of economic and trade agreements to support bilateral trade cooperation, such as an investment encouragement and protection agreement in 1995, a tourism cooperation agreement in 1999, a plant protection and quarantine agreement, and a double taxation avoidance agreement in 2002.

President of the Cuban Chamber of Commerce, Orlando Hernandex Gillen, highlighted the normalization of bilateral relations between Cuba and the USA (signed in December 2014) would provide a good opportunity for Cuba to develop economically, noting that this would offer a chance for Vietnam businesses to invest in Cuban tourism, agriculture, telecommunications, footwear, and textile industries.

According to the latest statistics from the Ministry of Planning and Investment, by December 2014, Cuba had poured US$6.6 million in one project in Vietnam, ranking 69th among 101 foreign investors, while Vietnam has invested in two oil and gas projects in Cuba.

Poland, Vietnam enhance trade cooperation

The Ministry of Economy of the Republic of Poland and the Poland Embassy in Vietnam on April 14 co-organised a workshop in Hanoi, discussing investment opportunities for the businesses of both nations.

The event also offered a good opportunity for businesses to introduce their products, seek out future partners, consolidate existing alliances and strengthen both trade and investment.

Polish ambassador to Vietnam, Barbara Szymanowska, said over the years, both nations have actively cooperated in the economic field. Poland is one of the first nations to establish diplomatic ties with Vietnam, and they are celebrating the 65th anniversary of diplomacy this year (1950-2015).

Ambassador Szymanowska expressed hope that this event will add fresh impetus to the long-term cooperation between both nations.

The Ministry of Industry and Trade’s European Market Department Deputy Head Duong Hoang Minh, said economic and trade ties between Vietnam and Poland have progressed with import-export turnover up 32.2% to US$660.6 million last year alone.

He emphasized that the EU- Vietnam Free Trade Agreement (EVFTA) to be signed in the near future will open up more favourable prospective opportunities for the businesses of both nations.

Minh said in the time ahead, the two governments will set up the inter-governmental committee to strengthen cooperation in potential fields and accelerate economic and trade cooperation.

Polish Minister of Economic, Grazyna Henclewska, highlighted the history of economic and trade corporations of both nations, and expressed hope to further boost cooperation with Vietnam (in such fields as mining, food, green technology, hi-tech and chemicals).

Minister Henclewska underscored that the Polish economy ranks sixth in Europe and takes the lead in all of Eastern Europe. Therefore, Poland continues to expand investment activities and exported its high quality products to foreign markets.

Vietnam, Cuba foster trade ties

Investment opportunities in Cuba was the central theme of a workshop organised by the Vietnam Chamber of Commerce and Industry (VCCI) on April 14 in Hanoi.

Addressing the opening ceremony, VCCI Vice President Doan Duy Khuong hailed the 55 years of cooperative ties between Vietnam and Cuba as a faithful partnership.

The two Governments have fostered comprehensive relations, especially in economic development, construction, transport, biotechnology, agriculture and education, he said.

The two nations have a number of long-standing economic-trade agreements, such as the agreement on trade exchanges and other economic cooperation in 1996; the agreement on investment encouragement and protection in 1995; and the agreement on tourism cooperation in 1999, Khuong added.

Meanwhile, President of the Cuba Chamber of Commerce and Industry (CCCI) Hernandez Guillen said the recent normalisation of bilateral relations between Cuba and the US presents huge opportunities for Cuban businesses.

He also highlighted opportunities for Vietnamese investors in tourism, agriculture, telecommunication, footwear and garment-textiles, some of the major sectors in both nations.

Cuba also boasts cooperation potentials in pharmaceuticals, education and healthcare with Vietnam, he added.

Additionally, the establishment of the Mariel Special Development Zone (ZEDM) is expected to facilitate Vietnamese investment in the Caribbean and offer a gate to the US and other Latin American countries.

In 2014, trade between Vietnam and Cuba reached 207.5 million USD, a 45 percent increase from the previous year. Vietnamese exports to Cuba hit 206 million USD, with the majority in food, cereal, confectionary and garment-textiles.

According to the Ministry of Planning and Investment, Cuba has one investment project in Vietnam with registered capital of 6.6 million USD. Vietnam has two projects in Cuba in oil and gas exploration.

Small- and medium-sized enterprises will have access to preferential loans from the Vietnam Military Joint Stock commercial Bank (MB) with a debt limit up to 20 trillion VND (920 million USD).

The programme will include long-term loans in Vietnamese dong and USD and medium-term loans serving production and business activities, agricultural and rural projects and infrastructure development.

The interest rate for loans will fluctuate between 6.9 to 9.5 percent per year.

Recently, the Vietnam Bank for Industry and Trade (VietinBank) also committed to providing 2 trillion VND (92.6 million USD) in credit to a number of projects in the northwest, mostly in healthcare, education and security-defence.

VietinBank General Director Le Duc Tho said the bank has allocated over 1 trillion VND (46.3 million USD) to the region so far, contributing remarkably to its socio-economic development. VietinBank is now one of the ten strongest banks in Vietnam . It has been listed among the world's top 500 banking brands with a brand value of 197 million USD by the world's leading brand valuation consultancy firm, Brand Finance.

Intellectual property law enforces creativity, innovation

Intellectual property law enforcement not only protects enterprises but also pushes them to create and innovate, Deputy Head of the National Office of Intellectual Property (NOIP) Le Ngoc Lam said in a Ho Chi Minh City-based seminar on April 14.

The seminar was organised by the NOIP on the occasion of World Intellectual Property Day (April 26).

According to Lam, it is vital for Vietnamese businesses to expand their budget for research and innovation or technological transfer, facilitating the development of technology nationwide.

The NOIP received over 38,700 applications for trademark protection registration last year. Over 29,000 patents were granted, nearly 1,270 of which were for inventions, 86 for utility solutions and over 1,630 for industrial designs.

The number of industrial property registration applications has grown by 10 percent annually, reflecting increasing public awareness of the significance of intellectual property rights.

However, applications from Vietnamese businesses remains low, accounting for only 10 percent and only 3 percent received patents, noted Nguyen Van Bay, Director of the Centre for Research and Training at the NOIP.

Bay said the lack of business acknowledgement of the issue coupled with poor application quality were the main contributing factors to the low number of applications.

The number of applications also varied geographically, with Ho Chi Minh City leading the way with 12,000 applications followed by Hanoi with 8,000.

Northern Lai Chau province had the lowest number of applications with only 2, followed by northern Bac Kan and Dien Bien provinces with 5 and 9, respectively.

Seminar participants agreed that intellectual property violations are still rampant.

Sustainable consumption in Vietnam under discussion

A workshop themed “Sustainable consumption in Vietnam- small actions, great changes” took place in Hanoi on April 14, focusing on measures to promote sustainable consumption practices across the country.

The event is part of the GetGreen Vietnam project funded by the European Union and implemented by the Dutch Delft University of Technology, the Vietnam Cleaner Production Centre and the Asian Institute of Technology in Vietnam .

According to the Ambassador-Head of the Delegation of the EU to Vietnam , Franz Jessen, the project aims to change consumption practices in Asia and targets consumers and relevant non-governmental organisations.

GetGreen project helps generate higher demand for sustainable products thus enhancing small- and medium-sized enterprises’ supply capacity, said Franz.

Since October 2014, the project has trained over 1,000 people to call on consumers to change their habits and lead an environmentally friendly lifestyle.

Dr. Marcel Crul, coordinator of the project, said those trained have contributed to improving the environment in Vietnam by practicing sustainable consumption practices.

A handbook with over 75 instructions was developed to benefit consumers.

Additionally, as many as 16 co-creative working sessions among consumption groups and 16 enterprises operating in tourism, food and travel were organised with the aim to share ideas for sustainable products and services.

SBIC urged to put equitization on fast track

Minister of Transport Dinh La Thang has called on Shipbuilding Industry Corporation (SBIC) to speed up the restructuring and equitization of its member enterprises, according to the ministry’s website.

SBIC general director Vu Anh Tuan told a meeting with the minister last Friday that the corporation attained revenue of over VND560 billion (US$25.9 million) in the first three months of 2015, down 19% compared to the same period last year and meeting only 7.9% of this year’s target.

Tuan said SBIC was grappling with a lot of woes this year as it has had to concentrate resources on restructuring and equitization.

Ending the first quarter, SBIC had cut staff by over 36,700 to over 17,000. It had also restructured foreign debt of US$135 million and domestic debt of more than over VND16 trillion at the first stage.

Currently, SBIC is focusing on the second phase settlement of domestic debts and international bond debts.

Regarding member enterprises, Tuan said SBIC is able to complete the restructuring of 122 out of 149 units. For the remaining 27 firms, SBIC will assess and report specific schemes to the ministry.

At the meeting, Minister Thang asked SBIC to put the equitization process on fast track. He set the second quarter of this year as the deadline for the corporation to let the insolvent units file for bankruptcy, and finish corporate evaluation and equitization of Ha Long shipyard.

The State-owned SBIC was established in 2013 by reorganizing the parent firm and some units of Vinashin in line with the transport minister’s decision signed in January of the same year.

Fake goods threaten local producers

The rampant presence of fake goods in Vietnam is threatening local producers and the health of local consumers as well, heard a forum in Hanoi last week.

Le The Bao, chairman of the Vietnam Association for Anti-counterfeiting and Trademark Protection (VATAP), told the forum that counterfeits are widely seen on the local market and threatening 30 groups of consumer goods, including cosmetics, beverages, electronic and electrical products, interior decorations and clothes.

“Fake goods have hurt the economy,” Bao told the forum organized by the Government’s portal.

Beverages, cosmetics, apparel and fertilizer were among the popular fake goods detected last year, according to Nguyen Trong Tin, deputy dead of the Market Management Department at the Ministry of Industry and Trade.

Tin said market monitors seized 4,000 boxes of fake alcohol and beer, over 439,000 cosmetics items, 70,000 apparel products, 25,000 kilograms of fertilizer and 30 tons of monosodium glutamate last year.

However, Tin said only 11 out of over 21,000 violation cases found last year were turned over to investigation agencies and the remainder were subject to fines only.

Nguyen Van Can, deputy head of the General Department of Customs, asked why the number of prosecutions was too small although the Penal Code regulates that traders of fake goods worth VND30 million (some US$1,400) could be treated as criminal offenders.

Tin said as counterfeit products are made in small quantities and skillfully, it is difficult for market monitors to detect them.

Can said 26,000 tons of buffalo meat was imported from India and other countries into Vietnam last year, but few shops sell this red meat.

“Was this meat sold as beef on the local market,” asked Can, who is also head of the National Steering Committee on Prevention and Control of Smuggling, Trade Fraud and Fake Commodities (Committee 389).

Currently, customs, border police, police, tax authorities, maritime police and market management forces are assigned to deal with smuggling and trade fraud, but the domestic market is still overwhelmed with counterfeits.

Fake goods accounted for 10% of the trade fraud cases market monitors unearthed last year, and the problem was attributable to ineffective co-ordination among Government agencies and law enforcement forces, according to the forum.

On top of that, fake goods have caused huge injury for local enterprises, but they are not willing to join forces with law enforcement agencies to fight it.

Exporter unconcerned about January-March seafood export fall

Minh Phu, the country’s leading seafood exporter, said that the 23% decline in seafood exports in the first quarter of this year is not a big worry as the situation can improve in the coming months.

Chu Van An, deputy general director of Minh Phu Seafood Corporation, said the country’s seafood shipments in Q1 of last year went up beyond projections due to limited supply in India, Thailand and China. However, exports of these three Asian seafood exporters shot up in January-March this year.

An told the Daily that his experience showed demand for seafood, particularly shrimp, in importing markets is usually weak in the first three months of year but grows strong in the following months.

“In general, I think seafood exports would not be as tough as some exporters have bemoaned,” An said.

The Vietnam Association of Seafood Exporters and Producers (VASEP) estimated seafood exports in the January-March period at US$1.27 billion, dropping 23% compared to the same period last year.

Despite the sharp fall, seafood revenue was US$121 million higher than in the same period of 2011 and US$9 million in Q1 of 2013.

Seafood exports in the first quarter of 2014 were higher than in the same period of previous years, for example US$390 in 2012 and US$381 in 2013.

“I think the breakthrough rise in seafood exports in last year’s quarter one is an exception… and the fall in the first three months of this year is in line with the normal market movements,” An said.

Last year, Vietnam obtained over US$7.83 billion from seafood exports, US$1 billion higher than VASEP’s forecast.

Foreign investors pledge US$300 million for projects in Binh Duong

Twenty-eight foreign-invested companies last week registered a combined US$303.8 million in fresh and operational projects in Binh Duong Province.

There are five apparel, wooden furniture, paint and paper projects involving Chinese investors with a total of US$17.5 million. Meanwhile, investors from Hong Kong and South Korea will spend some US$32.5 million on four projects in the southern province.

The South Korean projects include Remote Solution Co. Ltd.’s US$10-million venture to turn out remote controls and other products at My Phuoc 3 Industrial Park (IP) and Castec Vina Co. Ltd.’s production of auto parts and mechanical components with an investment of US$14.5 million at My Phuoc 3 IP.

Investors from other countries and territories had fewer projects licensed in Binh Duong but their registered capital is much higher. For instance, an investor from Samoa will spend US$40 million producing four million scooters and one million bicycles per year at Song Than 3 IP.

Regarding operational projects, Thailand’s Srithai Vietnam Co. Ltd. registered to raise its capital by US$30 million to US$70 million to produce high-quality industrial plastic and other items for both domestic and global markets.

Sakata Inx Vietnam Co. Ltd. was licensed to increase investment in its operational facility at Vietnam-Singapore Industrial Park (VSIP) by US$7 million to US$21.5 million to increase its printing ink capacity from 10,000 tons to 13,000 tons per year.

The Malaysian firm said the favorable investment environment and stable labor supply are among the main reasons for the company to carry out its long-term investment in Binh Duong Province.

Tran Van Nam, chairman of Binh Duong Province, said the province will continue improving the investment environment; focusing more on transport infrastructure, water supply and drainage improvements; and meeting investors more frequently to timely solve their problems.

Binh Duong has licensed 85 foreign direct investment (FDI) projects with total registered capital of US$402 million in the year to date, making it the country’s second leader after HCMC in terms of FDI approvals. Many of the projects are in technology and supporting industries.

Binh Duong Province now has 2,440 valid FDI projects worth a total of US$20.8 billion.

HOSE sees plummeting deal value

The number of securities transactions and the deal value in the first quarter at the HCM Stock Exchange fell to the lowest levels since the first quarter of 2014, according to statistics provided by the exchange.

Last year, listed companies (there were 305 companies but sufficient data was collected from only 254 of them) posted a 15.64 per cent increase in turnover and a 8.1 per cent growth in net profit. Photo bizLIVE

Almost 5,600 million securities changed hands, compared to around 8,400 million units in the fourth and third quarters last year. The figure was more than 6,000 million in the second quarter and 7,700 million in the first quarter in 2014.

The total value of transactions was VND97.236 trillion (US$452 million) during the first quarter, almost equal to the figure of the second quarter, but down from more than VND152 trillion in the third and fourth quarter of last year. The same period in 2014 totalled more than VND131 trillion.

Last year, listed companies (there were 305 companies but sufficient data was collected from only 254 of them) posted a 15.64 per cent increase in turnover and a 8.1 per cent growth in net profit.Their average return on asset (ROA) ratio was 2.27 per cent, down by over 5 per cent from 2013.

Their return on equity (ROE) ratio was 18.85 per cent, up 0.8 per cent from the previous year.

Saigon Securities Inc. (SSI) ranked first among 10 leading brokerage houses with a market share of 12.24 per cent, followed by HCM City Securities Company (HSC) with a market share of over 11 per cent. Ban Viet Securities Company was third with 7.78 per cent.

Vinatex strives to perfect supply chain

The government is stepping up efforts to help the textile and garment sector effectively seize the golden opportunities brought about by Vietnam’s future signing of diverse free trade agreements with the international community.

Earlier this month, Vinatex International Joint Stock Company (VTJ), a member of state giant Vietnam National Textile and Garment Group (Vinatex), and its Japanese partner Toms Limited had inked a joint venture (JV) agreement to build a textile-dyeing-garment complex in the central region province of Quang Tri’s Hai Lang district.

Accordingly, the JV complex aims to produce elastic T-shirts, a key item of Toms Limited, at the Dien Sanh industrial cluster. The complex is planned to operate a complete production model, capable of processing goods from start to finish.

The project, worth $12 million in total investment capital, will consist of three plants: a textile dyeing plant with an annual capacity of 2,500 tonnes of knitted fabrics, a garment plant producing more than 10 million items a year and a waste-water treatment plant with a daily capacity of 1,200 cubic metres.

According to Vinatex deputy general director and VTJ general director Dang Vu Hung, once completed, the project will be the most state-of-the art knitwear manufacturing base in Vietnam’s central region

The whole complex is slated to finalise construction and put into operation within this year and is expected to generate $8 million in revenue at first, increasing to $40 million by 2017.

Le Tien Truong, Vinatex’s general director, said the combined comparative advantages of foreign and domestic partners could help JV projects of this kind operate more efficiently, through capitalising on the foreign partners’ stable output market.

VTJ’s foreign partner Toms Limited is a leading garment maker in Japan, specialising in T-shirts, Polo-shirts, Sweat shirts, blousons and uniforms.

The company’s trading branches have expanded throughout Japan, making up a retail system reaching from Hokkaido in the north to Kyushu in the south.

In Japan, Toms Limited has opened a fully Japanese-owned plant with a complete production process which achieves a revenue of $200 million per year.

Prior to the deal with Toms, Vinatex and Japan’s Itochu had signed a framework agreement to implement a string of new projects on textile dyeing and material supply in Vietnam which envisages generating $60 million in revenue during the next five years and creating thousands of jobs in future project sites.

After the Quang Tri textile-dyeing-garment complex, Vinatex was reported to set eyes on several northern locations such as Thai Binh and Nam Dinh to expand the complete production JV model, planning to follow the working investment procedure of teaming up with foreign partners wishing to tap Vietnamese market potential.

Strengthening local businesses

Focusing on turning local businesses into strong pillars of the economy is necessary to reduce the reliance on foreign direct investment (FDI), an important stimulus for the Vietnamese economy, and encourage utilising FDI effectively.

Since the Law on Foreign Investment was passed in 1987, the FDI flow into the country has been stimulated, strongly affecting the economy. According to Dr. Do Nhat Hoang, Director of the Ministry of Planning and Investment (MPI)'s Foreign Investment Agency (FIA), FDI contributes around 22-25% of the total investment and 14% of the State budget. The segment of FDI in the gross domestic product (GDP) has steadily risen for years, accounting for around 20% of GDP in 2014. The FDI sector has created over two million direct jobs and about three to four million indirect jobs, helping improve the quality of human resources and change the labour structure. It has also made important contributions to the export revenue with US$25.1 billion, including the turnover from crude oil export, in the first quarter of this year, accounting for 70.3% of the total export value.

However with the positive effects on the economy and the country’s sustainable development, the sector conceals many shortcomings. Analysis by the MPI’s National Center for Socio-economic Information and Forecast says that the country’s FDI structure is not balanced with numerous FDI projects in natural resource extraction, pollution-causing industries and real estate. It is an unsustainable structure as investment in natural resource extraction has no spillover effects; pollution-causing industries leave consequences and remedial costs for the country while FDI businesses yield profits; and FDI in real estate can result in property bubbles, causing instability. In addition, many FDI businesses regularly declare losses for many consecutive years to avoid taxes and engage in transfer pricing. Notably, many of them have gained monopoly power, disturbed and distorted the market, decimated competitiveness, and impacted local businesses’ development.

Evaluating FDI’s impact on the economy, Le Quoc Phuong, Vice Director of the Industry and Trade Information Centre, under the Ministry of Industry and Trade, said that FDI flow accounts for 25% of total investment, which is quite high, may entail risks and shows the weakness of local investment.

The economy depends greatly on FDI. The FDI sector makes up 70% of the total export turnover (including crude oil export) while surplus or deficit totally depends on the sector as it can cause a deficit for the economy with its surplus reduction. The sector’s industrial production accounts for over 60%, even 100% in many industries.

Dr. Vo Tri Thanh, Vice President of the Central Institute of Economic Research and Management, wondered why the country has few large-scale businesses after nearly three decades of the renewal process while FDI businesses’ presence has become produced. He questioned what would stimulate national economic development when the State-owned sector is tapered off and the economy is so reliant on FDI.

However, Thanh felt optimistic as the draft political report to the upcoming 12th Party Congress, set to be publicised, states that the private sector is an important stimulus for the economy. When being supported effectively, the private sector can become an important pillar of the economy and ensure sustainable development, a counterweight to the FDI sector to help reduce the economy’s current reliance on foreign investment.

Agreeing with Thanh’s viewpoint, Dr. Do Nhat Hoang from the FIA said that though FDI is very important, local businesses, particularly medium and small-sized businesses, which form the foundation for the economy, need support through preferential policies in capital and technology to take advantage of potentials in the integration process.

Vu Quoc Huy, Vice Director of the MPI’s Department of Economic Zones Management, suggested that local businesses, which are weak in capacity, technology, management, promotion and market expansion skills, should learn from FDI businesses.

As the ties between local and FDI businesses have not been promoted, the State should better its role in linking them together, sharing information, supporting and creating close relations between the two sectors while improving the roles and responsibilities of FDI businesses, especially large-scale businesses, in connecting and supporting local businesses, Huy said.

BIDV finances Lao infrastructure development projects

The Bank for Investment and Development of Vietnam (BIDV) inked two agreements with the Lao Ministry of Finance over the weekend to lend nearly US$147 million to infrastructure development projects.

The loans will go to a road project worth US$26.84 million and an infrastructure development project worth US$120 million, raising the total value of loan pacts signed between BIDV and the Lao government to US$200 million. Both projects will be implemented in Houaphan Province in the neighboring country.

Besides, the US$30-million loan for an irrigation dam in Luang Namtha Province is still under negotiation and the two sides look set to clinch a deal next month.

BIDV will disburse the loans early next month and expects the Lao government to finish the entire projects in the second quarter of 2017.

Under the cooperation agreements between Vietnam and Laos, the governments of the two countries have agreed on assigning BIDV to study plans to provide loans for the projects.

According to BIDV, the loans have an average term of 15 years and a fixed interest rate of 3% per year.

Loans for the projects, especially the road one, will help connect border gates of Vietnam’s Nghe An and Thanh Hoa provinces to Laos; promote economic development, trade, investment and tourism links among localities of Vietnam and northern localities of Laos.

Over 1,700 American brand names registered in Vietnam

The National Office of Intellectual Property under the Ministry of Science and Technology received more than 1,700 trademark registration applications from American businesses in 2014, announced director of the Research and Education Center of the National Office of Intellectual Property on April 10.

The department saw 1,300 trademark applications of Japanese firms; 900 registration applications of Chinese enterprises; and 800 South Korean applications.

The number of registration of trademarks has increased by 10 percent in recent years, he added.

The National Office of Intellectual Property also received around 4,400 invention registration applications, including Vietnamese people’s submissions accounted for 10 percent of the total number.

Only 3 percent of Vietnamese people have been licensed among the total number of 1,500 Invention Certificates.

Prime Minister urges acceleration of SOE restructuring

Prime Minister Nguyen Tan Dung has urged ministries, branches and localities to direct drastically the implementation of the equitisation of 289 State-owned enterprises (SOE) in accordance with the plan.

The PM has urged the the equitisation of 289 State-owned enterprises (SOE) in accordance with the plan.

During the SOE restructuring, relevant agencies must ensure harmony between interests of the state, workers and other stakeholders as well as link the equitisation with the securities market.

The PM required the 82 enterprises that have established its Steering Committee for Equitisation to expeditiously determine their values by the second quarter of 2015, striving to complete their equitisation by the fourth quarter.

One hundred and twenty six businesses determining their values should strive to announce the values by second quarter and complete equity procedures by the third quarter.

Meanwhile, the other 52 enterprises that have announced their values are expected to complete the equitisation by second quarter.

The PM also ordered ministries and localities to direct divestment from non-core businesses strictly and effectively.

Leaders of the enterprises that are not performing or that are ineffectively restructuring, equitisation and divestment must be punished strictly, urged PM Nguyen Tan Dung.

Auditor delves into Petrolimex losses

The Viet Nam National Petroleum Group (Petrolimex) suffered a loss of nearly VND9.10 billion (US$433,000) last year, an audited financial report posted on the company's website revealed.

The result, concluded by auditor Deloitte Vietnam, was different from the VND4.8 billion ($228,000) profit Petrolimex had reported earlier for 2014.

Petrolimex Deputy General Director Tran Ngoc Nam explained in an online statement that the difference was because the company had not established provisional funds for risks posed to inventory price reduction on December 31 last year.

The Petrolimex directorate assessed that this move was suitable at the time, when the declining trend in global crude oil prices had slowed since December.

The directorate also said that the company had accounted for the results in line with the way the Government operates petrol prices.

As per a November 1, 2014 Decree on regulating petrol trading, the base price used by domestic fuel dealers to set their retail prices will be calculated every fortnight.

Meanwhile, Petrolimex was asked to guarantee an adequate petrol volume reserve for about a month. Thus, its selling prices were adjusted later than the time prices of imported commodities fluctuated.

This is why the company did not establish provisional funds on December 31, and recorded business results in practical selling times.

The aforementioned explanations have been identified by Deloitte.

Domestic petrol prices were increased five times and lowered 12 times last year. During 2014, the retail prices were down 26 per cent for gasoline and diesel, 22 per cent for diesel, and 28.2 per cent for mazut.

The Viet Nam Petroleum Association told news website Dan tri that national regulations had not caught up with the practice of petrol price fluctuations. Policies had often been worked out to cope with fuel price hikes, and were not adequate for coping with the extraordinary downward spiral in global oil prices last year.

This had resulted in some disadvantages for petrol dealers in assuring their reserves, the association said, adding that many businesses reported inefficient performance in 2014.

The Deloitte report pointed out that the net turnover from sales of goods and services, which Petrolimex obtained last year was VND206.78 trillion ($9.85 billion), or VND20 billion ($952,000) lower than the previously reported figure.

In 2013, the company earned VND1.58 trillion ($75.24 million) in after-tax profits and VND195.93 trillion ($9.33 billion) in net revenue.

Firms should invest in e-commerce

Vietnamese companies should seek to expand exports through e-commerce, which is becoming an effective channel for approaching importers.

Experts said that import demand from developed countries was huge and these were markets where e-commerce was dominant, adding that e-commerce could help also save costs and result in greater efficiency for exporters, compared with the traditional trade transaction channels.

However, the gap in the application of e-commerce remains considerable between developed and developing countries, experts said, urging Vietnamese firms, especially small and medium-sized companies, to grasp the chance of exploiting e-commerce to expand markets as e-commerce was growing rapidly.

According to Tran Dinh Toan, deputy director of OCB Technology and Investment Company, e-commerce is an effective tool for export firms to explore new markets and expand into them.

Toan pointed out that many export firms in Viet Nam had approached importers and signed contracts through the website Alibaba.com.

Dang Quang Vu, a representative from Hapro, which now exports products to more than 70 countries with an estimated total export turnover of VND9 trillion (US$422.5 million), said e-commerce had been an effective channel for Hapro to expand into more export markets.

Products of the Nhan Minh Company were now placed on shelves of retail channels of more than 10 countries thanks to e-commerce, the company's representative said.

Goretti Lee, marketing manager of Alibaba.com was quoted by Thoi Bao Kinh Te Viet Nam (Vietnam Economic Times) as saying that many importers were showing an interest in Viet Nam, which was evident in the growing number of inquiries via the website. She said the application of e-commerce would help Vietnamese firms to seek more trade partners.

Currently, the potential of applying e-commerce for boosting exports had not been fully exploited by Vietnamese firms due to a lack of knowledge and human resources, experts said, adding that it was necessary for firms to invest in e-commerce.

BIDV Securities plans to raise charter capital

The Bank for Investment & Development of Viet Nam's Securities Company (BSI) plans to hike its charter capital from VND865 billion (US$40.4 million) to VND1 trillion ($46.7 million) this year through an issue of additional 13.5 million shares.

The share issue is expected to be implemented in the second quarter of the year.

According to a document sent to shareholders before the annual shareholders' meeting on April 11, BSI said its current charter capital as well as long-term capital was quite modest compared with that of the top three brokerage companies in the market.

The capital hike also aimed to meet the criterion set in a legislative proposal that charter capital of securities companies must be no lower than VND1 trillion if they want to offer brokerage service for derivative products, the company said.

Viet Nam is making plans to develop a derivative market in the next two years.

BSI was the ninth largest brokerage firms in terms of stocks and bonds on the HCM Stock Exchange in the first quarter with 4.07 per cent of market share. Meanwhile, it ranked fifth on the Ha Noi Stock Exchange with market share of about 5.2 per cent.

The company's executives also believe bank lending to securities investment would fall in the future after Circular 36 took effect in February. This requires loans for stock business not to exceed five per cent of a bank's charter capital.

"The increase in charter capital is to offset the reduction in short-term loans by commercial banks in 2015," the document said.

It is planned to sell the shares to financial investors with a preference for foreign companies. The selling price will not be lower than VND10,000 (46US cents) a share.

For the longer term, BSI wants to lift its charter capital to VND1.5 trillion ($70 million) during 2019-20 and up to VND2 trillion ($93.5 million) by the end of 2020 - if market conditions are favourable.

Charter capital of big brokerage companies, including Saigon Securities Inc (SSI), HCM Securities Corp (HCM), ACB Securities Co and MB Securities Co, is between VND1.2 trillion ($56.1 million) to VND3.5 trillion ($163.6 million). Other mid-sized companies also have plans of growing their capital this year.

First quarter results give optimistic indicators

A General Statistics Office survey of over 3,245 local and foreign processing and manufacturing enterprises nationwide in this year’s first quarter has revealed promising data.

Generally speaking, 57% of surveyed enterprises said their first-quarter business was far better than the end of last year. Nearly 88% forecast that their second quarter business will be far better than the first quarter, commented GSO head Nguyen Bich Lam.

According to the GSO, the sectors forecasted to grow higher than the first quarter include medicine (82.1% of respondents), electricity equipment (69.6%), garments (65.4%), electronics (65.3%), drinks (62.8%) and foodstuff (60.7%).

Some 62% of state-owned enterprises (SOEs) said their second-quarter business would be better than in the first quarter while the rate was 59.6% for foreign enterprises and 52.7% for locally-invested enterprises.

Some 88.3% of respondents were expecting that their orders would increase and keep stable in this year’s second quarter. Only 11.7% said their orders would decrease in the second quarter.

Nearly 61% of SOEs were upbeat about the surge in their second quarter orders while the rate is 57.3% among foreign enterprises and nearly 49% among locally-invested enterprises.

Stronger rises in orders during the second quarter include for medicines (80%), power equipment (66.7%) garments (61.7%), chemicals (60.7%), drinks (58.7%), paper (57.3%) and electronics (57.5%).

Regarding export orders, 75.3% of respondents said their first quarter export orders had increased. Some 86% forecast that their export orders would climb higher in the second quarter.

Da Lat Flower Biotechnology Joint Stock Company’s general director Nguyen Dinh Son said the company had reaped annual revenue of VND6 trillion (US$280.37 million) and currently had 5,000 hectares of greenhouses used for cultivating flowers.

We intend to expand this to five times its current size. The local business and investment climate has remarkably improved, Son said.

Anonymous spokesperson from locally-owned fresh milk maker TH Group told VIR that it was quite optimistic about its business performance.

The firm is planning to implement dairy cow projects in Thanh Hoa, Lam Dong and Dak Lak provinces. It is also working to implement a large scale fresh milk project in Russia. The total capital for these projects could amount to billions of dollars.

Currently, the group is operating a US$1.2 billion hi-tech dairy and fresh milk producing project in the central province of Nghe An. This project’s products have been registered in 60 nations. Products will be exported to the US in July.

Daniel Bach, chairman of cement producer Holcim Vietnam, also said the local economy was recovering, with rising demand for cement. He said this would help Holcim Vietnam operate at a full capacity of 3.4 million tonnes of cement this year.

Production is strongly bouncing back and will help the economy grow 6.2% this year. If we make more efforts, the rate will likely be 6.4-6.5% for 2014, said Deputy Minister of Planning and Investment Dao Quang Thu.

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