Listed firms list more shares despite bear market  

While investors sell off shares to retreat from a prolonged bear market, many listed enterprises announce to issue bonus shares for their shareholders.
 
Investment and Construction Project JSC No. 3 says it will offer shareholders bonus shares at the rate of 25 percent.

Hanoi-listed electricity cable producer Thien Truong announces to pay dividend in shares at the rate of 15 percent, while mineral miner Binh Thuan Hamico issue more than 2.5 million additional shares to pay dividend at the rate of 20 percent.

Some others including pharmaceutical firm OPC pay dividend in both cash and shares at the rate of VND1,000 per share and two shares for every one held.

Many listed firms have registered to issue bonus shares this month despite the slumping market.

Construction company PetroVietnam – Nghe An released the biggest amount of bonus shares this month, issuing 44.5 million new shares that will be offered to shareholders at the rate of 445 shares for every 100 held.

The benchmark VN-Index has slipped 16 percent this year. The Asian Development Bank said the Vietnamese stock market lost the most in the region, while other markets remained at above pre-crisis levels.

Statistics show there are 11 companies making debut on the stock exchange last month, with the total capitalization value of nearly VND3 trillion (US$150 million).

Their shares, however, have dipped into the red and been sold off heavily.

Share price of property firm Century 21 plunged more than 50 percent to below VND16,000 per share after the firm started listing on the Ho Chi Minh Stock Exchange two weeks ago.

Financial experts say listed firms were forced to issue bonus shares, which had been on schedule earlier.

Yet some companies still delay their share issuance due to the negative market.

Tu Liem Urban Development Joint Stock Company has earlier gained approval at the annual general meeting to double its registered capital of VND328 billion ($16.4 million) through share issuances.

The Hanoi-based builder has eventually announced to halt the issuance due to bearish market.

Figures from the bourses show in the first seven months of 2010, the amount of cash dividend reached nearly VND20 trillion, while the amount from additional share sales was VND5 trillion only.

The figures show share issuances are not as efficient as dividend payments, says a broker in HCMC.

Cash dividend will encourage investors to reinvest in companies as stock remains attractive in long terms, says Nguyen Hoang Hai, general secretary of the Vietnam Association of Financial Investors.
 
Cashew export prices on the up  

The quantity of cashew nuts exported from Vietnam in the first seven months of this year is reported to have reached 84,000 tons with a turnover of US$656 million , according to Nguyen Thai Hoc, chairman of the Vietnam Cashew Association (Vinacas).

Volume declined 16 percent but the value was up 14.8 percent, Hoc said.
 
The average export price in the period was US$7,600 per tonne compared to US$5,300 last year.

Raw cashew output for the whole year was likely to be slightly less than previous years at 330,000 tons due to unseasonable monsoon rains and the advanced age of many cashew trees.

In the first half processors had imported 120,732 tons of raw cashew from Nigeria , Ghana , the Ivory Coast , Indonesia , and Cambodia.

To achieve the export target this year, some 329,300 tonnes were expected to be imported in the second half.

With lower world output and increasing demand, prices would remain high this year.

But exporters should only sign export deals when they had the nuts in hand, he said.

The Ministry of Agriculture and Rural Development (MARD) said full year's exports were expected to be US$1.32 billion from 163,000 tons, a 17.6 percent fall in volume but 16 percent increase in value.

Average cashew export price this year would be around US$8,098 per ton, it added.

The increased export price has made local purchasing prices higher. By the end of July, the purchasing price of dried cashew nuts fluctuated between VND 39,500 - VND 40,000 per kg VND2,000 - VND 4,000 per kg higher than the previous month. The price of fresh cashew nuts also rose to between VND 6,000 - VND 8,000 per kg.

According to Vinacas, there will not be much change in the remaining months. If demand increases, prices may rise in August and September. The price of cashew kernels may fall sharply within the next three or four months, but the decreased sales volume in the first half of this year makes this unlikely. In addition, the cashew reserves of importers are now very low, forcing them to buy unprocessed cashews to meet their demand.

Vinacas predicts that the price increase in food and foodstuffs in local markets can raise the price of cashew nuts. The stocked volume of cashew kernels in the US and EU remain low, while China and India will have a large demand by year's end.

In addition, the Ministry of Finance has issued a circular to revise the export tax levied on cashew nuts. As of August 25, 2011, the export tax on unprocessed cashew nuts will be lowered from 5 percent to 3 percent.

However, Vinacas predicts that in the remaining months, cashew exports may run into difficulty, if the circular 13/2011/TT-BNNPTNN is not modified.

Under circular 13, as of July 1, imported food must be inspected even from countries that meet the hygienic requirements of the Vietnamese authorized agency. Critics said this mechanism hindered the process and deterred exporters.

To solve the problem, deputy minister of Ministry of Agriculture and Rural Development Bui Ba Bong said Vinacas would petition MARD not to apply circular 13 to the cashew industry.

Bong said the industry was seeking ways to raise income for cashew farmers, in order to encourage domestic productivity. One of the most effective methods was to grow cacao trees alternately with cashew trees.

The industry plans to develop intensive cashew growing areas with at least 200,000 ha in Binh Phuoc and Dong Nai provinces, hoping that productivity will increase to 1.5 tons per ha.

The association petitioned the Government and the State Bank of Vietnam to provide them preferential loans to buy raw cashew at home and abroad.

Part of their export consignments go missing from containers by the time they reach importers, many cashew exporters complained at a meeting held in HCM City Aug. 10 and sought assistance from the Ministry of Public Security.

Long Son, Tan Hoa, Huynh Minh, and Donafoods Co, Ltd and several other companies reported such losses in transit.

Tong Dai Phong, head of the planning and marketing department of Donafoods, said his company lost 538 boxes worth US$102,000 earlier this month.
 
Major banks unable to lend

Three out of the four biggest commercial banks in Vietnam have almost no ability to lend, newswire Vneconomy reported.

A source told Vneconomy that the latest balance sheet of one of these bank for instance showed that the bank's total deposits were VND450 trillion while its total outstanding loans reached VND423 trillion.

Of these deposits, only VND300 trillion was mobilized from the primary market, which means that the bank used as much as VND123 trillion raised from the secondary market for its lending activities in the primary market. The source said all of this goes against the central bank’s rules.

According to Vneconomy, these banks are also finding it difficult to attract deposits because of the central bank’s interest rate ceiling.

Yet, even those that have enough to lend can’t do so because their credit growth is almost reaching the central bank’s 20 percent cap.

Some banks with a surplus of capital have thus come up with a solution: issue corporate bonds to ease their credit growth. This method however may no longer be an option as the central bank is likely to consider them credit.

Another option is to buy government bonds, but the yields are too low to attract banks.
In the meantime, businesses are sorely in need of capital and some are willing to accept lending rates of 20 percent to 22 percent per year.

SBV - the only agency allowed to export gold

The State Bank of Vietnam (SBV) is drafting a decree aimed at regulating the gold market in a flexible manner and controlling gold trading according to the market-based mechanism, said SBV Governor Nguyen Van Binh.

Under the draft decree, SBV is the only agency in Vietnam which is allowed to export and import gold.

SBV may also authorize selected businesses to export gold, Binh said.

He added that gold export-import should now be considered a regular activity of the economy.

Regarding the foreign exchange rate, the Governor emphasized the SBV’s efforts to stabilize the value of the Vietnam dong, or led it appreciate a bit more.

Supporting Vietnamese goods in US market

A conference on ensuring the quality of export products to meet US consumer goods safety requirements was held in Ho Chi Minh City on August 11.

The event, co-organised by the US Consulate General in Vietnam, the US Consumer Product Safety Commission (CPSC) and the Ho Chi Minh City Investment and Trade Promotion Centre (ITPC), aim to keep Vietnamese businesses and exporters updated on the US safety criteria for imported consumer goods, especially those for U12 children.

According to the Consumer Product Safety Improvement Act of 2008, consumer goods imported to the US market must acquire a general certificate and another product safety certificate granted by an independent third party organisation or laboratory approved by the US government.

Richard O’Brien, US Office of International Programs and Intergovernmental Affairs Director, said Vietnamese businesses need to enhance the manufacturing process and the quality of products to improve their competitiveness as well as constantly updating new CPSC requirements.

CPSC is ready to provide information on the US market, its legal documents and training courses to support Vietnamese businesses, he added.

The US is a large and potential market accounting for more than 20 percent of the Vietnam’s total export revenue.

Binh Dinh to house power plant, oil refinery

The Khang Thong Group on August 10 signed a feasibility study contract for the US$972 million Binh Dinh Thermal Power Plant (phase I) with the Zarubezhenergoproekt Group of Russia.

Under the contract, the 700 MW-plant will be built on an area of more than 90 ha at the Nhon Hoi Economic Zone in the Central province of Binh Dinh. Its construction is scheduled to begin in the second quarter of 2012 and put into operation by 2015.

On the same day, Khang Thong also signed a technical design agreement to establish a joint venture to build the Binh Dinh Oil Refinery with the STFE Group and the PTT Energy Solutions Company Limited (PTTES) of Thailand.

The oil refinery, with a capacity of 12 million tonnes per year, will be also built at the Nhon Hoi Economic Zone.

According to the Khang Thong Group, Nhon Hoi was a multi-sector economic zone, including non-tariff areas, industrial parks, seaports and seaport service areas.

Investment in the oil refinery industry in Nhon Hoi will focus on utilising local resources and supplying fuel for domestic and foreign markets.

Mekong delta rice warehouse to be completed in 2013

The construction of a warehouse capable of string of 4 million tonnes of paddy rice in the Mekong delta will be completed by 2013, two years later than scheduled.

The Ministry of Agriculture and Rural Development announced the delay on August 10, adding the implementation of the plan faced many difficulties.

Under the plan, the construction of a storage system with a total capacity of 2.5 million tonnes of paddy rice and the upgrade of a 0.47 million tonnes system will be completed by the end of this year.

Additionally, local enterprises will modernize their repositories to increase the country’s storage capacity to 10 million tonnes of paddy rice a year by 2015.

Reconstruction in Japan and FDI attraction in Vietnam

The seminar provides investors with information on the Japanese economy and changes in overseas investment policy after the earthquake disaster.

The Vietnamese Ministry of Planning and Investment, Nikkei Economic Times and the Vietnamese Embassy to Japan held a seminar on Japan’s reconstruction and overseas investment trends in Hanoi on August 10.

Japanese ambassador to Vietnam Y.Tanizaki said Japan received aid from 159 countries and territories and 43 international organizations, including Vietnam, after the earthquake and tsunami disasters. The assistance has helped the country recover its economy.

By July 28, the disaster had caused 16,000 deaths, led to 5,000 missing persons and forced the evacuation of 92,000 people. From now to 2015 will be a period of reconstruction which will require a total capital of US$240 billion, Tanizaki said.

He added that 97 leading Japanese businesses tended to move their investment to other countries in Asia, providing a good opportunity for Vietnam in the face of disaster.

Ta Ngoc Tan, Director of the Ho Chi Minh National Academy of Politics and Public Administration said Vietnam should continue to strengthen exchange visits and cooperation between localities, businesses, institutes and universities. The Vietnamese Government should also identify policies and strategies in each potential cooperative field and quickly establish the Vietnam-Japan Economic Forum according to Japan’s proposal.

Tan added that Vietnam should focus on three breakthroughs: completing socialist-oriented market economic mechanisms, developing human resources - especially high quality labour forces - and building a comprehensive infrastructure system. In addition, Vietnam should better implement the Vietnam-Japan Joint Initiative, accelerate the implementation of major Japanese projects, deal with Japanese businesses’ obstacles and encourage Japanese investment according to the public-private partnership method.

Participants at the seminar put forth their opinions on Vietnam’s support industry development strategy and opportunities for Japanese investors.

Vietnam's Dai Hung crude output triples

Output from Vietnam's Dai Hung oil field nearly tripled to 11,600 barrels per day from Thursday as a newly installed wellhead platform started pumping, versus 4,000 bpd earlier, the official Vietnam News Agency reported.

The new output from Dai Hung, or Big Bear, is equivalent to around 5 percent of the total crude in the first seven months of 2011 lifted by the Southeast Asian country, which has been facing production falls in recent years due to ageing fields.

The new flow of 7,600 bpd came as Dai Hung's operator, a unit of Petrovietnam Exploration Production Corp (PVEP), brings five wells into production under a plan to raise output to 18,000 bpd, the agency said in a report late on Thursday.

The platform installation in June by PVEP production operating company, the domestic production arm of PVEP, would ensure 250,000 tonnes of crude oil was lifted in 2011 from the field, PVEP POC Chief Executive Hoang Ba Cuong has said.

In May PVEP also signed a credit agreement to borrow US$200 million from VietinBank for seven years to finance Dai Hung's expansion, part of a broader effort to increase national output by 2015.

Vietnam pumped an estimated 8.42 million tonnes, or 219,000 bdp, of crude oil between January and July, a fall of 5.6 percent from the same period last year, government statistics show.

Dai Hung field lies in the Nam Con Son basin, 265 km (165 miles) southeast of Vietnam's southern city of Vung Tau. PVEP is the exploration arm of state oil and gas group Petrovietnam.

Early this month the group launched the 2011 licensing round for nine oil and gas blocks offshore Vietnam, some of them in the Nam Con Son basin which Petrovietnam and industry experts said would be attractive due to its potential rich oil reserves.

Exporters plagued by container thefts

Many exporting businesses have been suffering great losses as their goods are often stolen on the way to the docks.

The container thieves are usually truck drivers who collude with others to steal the containers they are carrying.

They often use special tools to open the containers without damaging the customs seals on the doors and steal the contents before driving to the ports.

In the first half of this year, several cases of container thefts have been reported with losses amounting to hundreds of thousands of dollars.

Dong Nai Province-based food processor Donafood, for instance, recently lost more than 530 cartons out of the 700 cartons of cashew nuts it exported to India in June.

“We only learned about the theft when the container arrived in India,” he said, adding that the total loss was over US$102,000.

Earlier, Long Son Co Ltd. also had to compensate $135,000 to their partner as their cashew nut container was stolen on its way to Thailand.

Its chairman Vu Thai Son said the thief was yet to be arrested although the company has evidence.

Son said the global positioning system of the transporting company that carried the container showed that the driver had stopped for a long time in District 12 where he must have committed the theft.

“But he fled afterwards and couldn’t be traced because his profile in the transporting company was fake,” Son said.

Nguyen Thai Hoc, head of the Vietnam Cashew Association, said container thefts have caused a loss of up to $2 million for the cashew exporting industry since 2007.

“There also small [theft] cases which happened on a regular basis but the companies opted to keep silent to protect their reputation,” he said.

Exporters in the rubber, seafood and coffee sectors have also been fallen victim to container thieves.

A rubber company in central Vietnam said as much as 50 percent of the amount that it had shipped had been stolen but it was difficult to catch the thieves red-handed.

He said the best solution was for the exporters to tighten security. They are also advised to choose transporting and insurance companies that can take responsible for any loss of the contents, he said.
 
Thai investors cut deal for oil refinery, power projects

Two Thai investors STFE Group and PTTES Co. on Wednesday signed a technical design contract with the local company Khang Thong Group for developing an oil refinery and a power plant in the central province of Binh Dinh.

Under the agreement, the three investors will develop a big-scale oil refinery in the province’s Nhon Hoi Economic Zone with a designed capacity of 12 million tons of petroleum products per year meeting international standards on manufacturing and quality management. In the first phase, the facility should have an output of six million tons per year.

Phan Thi Phuong Thao, chairwoman cum general director of Khang Thong Group, told the signing ceremony in HCMC that the deal was truck after the three partners had worked together for two years.

At the ceremony, the local company also signed a contract with STFE Group and Russia’s Energoproekt Co. to build a thermal power plant in Nhon Hoi Economic Zone.

Accordingly, the 700MW thermal power plant will require an estimated cost of US$972 million. Construction of the 90 hectare plant will kick off in the second quarter next year for completion in 2015.

Nguyen Ngoc Toan, deputy director of Nhon Hoi Economic Zone, told Daily on the phone on Wednesday that both projects would be developed in the non-tariff area developed by HCMC-based Khang Thong Group in the province.

Khang Thong is spending more than VND4 trillion developing the non-tariff zone on 490 hectares, an industrial zone covering 70 hectares and a deep-water port covering 40 hectares inside the zone.

However, Toan said the investor had to wait for the Government’s approval.

Toan said the province would report the Government on the refinery project once the investors submit their project to provincial authorities.

The two Thai companies have also signed a memorandum of understanding with Binh Dinh People’s Committee for developing the projects.

Tran Thi Thu Ha, vice chairwoman of the province, said at the ceremony on Wednesday that these projects are big and important ones for the province, so authorities would support the investors to carry out the projects soon.

Once licensed, the Thai investors’ project will be the sixth oil refinery factory in Vietnam. The other projects are located in Thanh Hoa, Quang Ngai, Phu Yen, Can Tho and Ba Ria-Vung Tau, but so far only Dung Quat refinery in Quang Ngai Province has been put into operation.

Nhon Hoi Economic Zone in the central province of Binh Dinh, around 700 kilometers north of HCMC, is emerging as an attractive destination for investors in tourism, infrastructure and manufacturing projects. It is adjacent to the existing Quy Nhon Port, which is able to accommodate 30,000DWT ships.
 
Japan eyes Vietnam’s supporting industry

Many Japanese investors are seeing Vietnam’s supporting industry as an attractive alternative to their domestic suppliers which were badly damaged in the quake disaster in March, a conference heard yesterday.

Speaking at the conference on Japan’s reconstruction efforts held by the Vietnamese Ministry of Planning and Investment and Japan’s Nikkel Economic Times, Japanese Ambassador in Vietnam Yasuaki Tanizaki said the devastating tsunami and earthquake had destroyed nearly all of the production facilities in the eastern region of Japan, which was the main spare part and component supplier for the national manufacturing industry.

Tanizaki said to maintain production and development, Japanese businesses have been seeking an alternative supply of spare parts and components, especially in the Asian market.

Tanizaki cited an online poll by Nikkei Business Publications that said Vietnam is the most attractive destination for Japanese manufacturers, followed by India and Thailand.

However, it would not be easy for Vietnam to make use of this opportunity as the country’s fledging supporting industry may fail to meet Japanese firms’ demand.

Deputy Minister of Industry and Trade Tran Cong Anh admitted certain shortcomings of the local supporting industry such as underdeveloped infrastructure, low-skilled workforce and an inconsistent legal framework.

According to Japan Bank for International Cooperation, said a highly developed workforce and a ready supporting industry are not what Japanese businesses really want from Vietnam. Rather, it is a low-cost workforce and a potential consuming market.

As for Vietnam’s legal issues, Hikaru Oguchi, representative of Japanese law firm Nishimura & Asahi based in Ho Chi Minh City, said the Vietnamese legal system tends to change on a regular basis and there are inconsistencies in law enforcement among local agencies.

She said an unreasonable judiciary system and cultural differences are also major obstacles.
 
Million-dong moon cakes hit market

The Mid-Autumn Festival is still a month away but confectioners have begun to introduce premium moon cakes with unusual fillings costing millions of dong, mostly to be given as expensive gifts.

Brand names continue to be important for many consumers but packaging and fillings are also important factors these days.

Among the beautiful boxes at a shop selling the cakes on Hanoi’s Ba Trieu Street is a stunning imitation-leather box with glittering text that catches buyers’ eyes.

“This one is called De Nguyet, a premium product from Bibica confectionery,” the seller said.

“This box was ordered but the customer has not come to pick it up. So I just put it here as a decoration. If you like, I can order more for you.”

She said it cost “only VND1.2 million (US$60),” explaining the price was due to the nice cover and a filling that included abalone, shark fin, holothurians, and scallops with XO sauce and wasabi prawns.

“This one is great for gifting,” she recommended.

At another shop nearby there were other moon cakes at similar prices.

A Kinh Do product called Golden Moon Hung Thinh has eight cakes and six cans of bird’s nest and costs VND2 million.

“These are premium flavors such as king prawns, Alaska crabs, and macadamia that have been selected carefully,” a Kinh Do employee explained.

Long Dinh has a product called Long Dinh An Quy that comes in a pretty box with the cakes placed in a piece of golden silk cloth. It costs VND1.8 million.

Confectioners are also claiming to care for consumers’ health and have introduced products with less sugar and preservatives. Bibica claims its moon cakes are made of isomalt, a sugar substitute that has little impact on blood sugar levels and the tooth. Some add EGCG, an antioxidant found in green tea, and lycopene found in tomatoes and other red fruits that helps reduce fat in blood.

This year prices are up 10-20 percent from last year.

Big brands like Kinh Do, Huu Nghi, and Bibica also sell boxes of cakes containing one egg at VND37,000-49,000, two eggs at VND55,000-98,000, and so on.

“I don’t care about premium moon cakes since they’re overpriced,” Nguyen Huu Ninh, who lives in the capital’s Hang Bong Street, says.

“The main ingredients in moon cakes are just flour, lotus seeds, sugar, eggs … they cannot cost so much.”

Do Gia Phan, vice chairman of the Vietnam Standard and Consumer Protection Association, also says the prices are much higher than their actual cost.

In Vietnam, moon cakes are traditionally given as gifts or to family members as a treat. The emergence of these expensive ones is, however, a recent phenomenon.

Weak U.S. dollar expands impact

The U.S. dollar devaluation against most other hard currencies including the Singapore dollar, the Australian dollar, the Chinese yuan or the Japanese yen has led to declining profits for exporters and costlier outbound tourism for locals.

Pham Xuan Hong, vice chairman of the Vietnam Textile and Apparel Association cum general director of Saigon 3 Garment Co., said local enterprises would incur more losses if the currency devaluation kept on.

The U.S. dollar price has recently increased against Vietnamese dong but still at a low rate, while exporters earning weak dollar must deal with higher labor costs and production expenses, Hong added.

Enterprises also have difficulties negotiating to raise prices given the rising imported and domestic material costs. Hong said Saigon 3 Co. has lately failed to get its Japanese customer’s approval on raising product prices.

According to Director Dinh The Hien of the Economy and Information Technology Research Institute, even Japan and China do not accept the weak U.S. dollar. Particularly, Chinese goods may have a surge in prices when the dollar devaluates, which also impact Chinese product retailers in Vietnam.

Outbound tourists also decry the weak U.S. dollar.

An officer in HCMC’s District 1, having returned from her trip to Singapore, said the weak U.S. dollar caused more expensive shopping and dining in the island country. Singapore stores accepts U.S. dollar payment, she said, but with the ratio of one U.S dollar to one Singapore dollar.

At present, a U.S. dollar equals to 77 yens or 1.2 Singapore dollars, whereas an euro buys US$1.4 and an Australian dollar gets US$1.01, according to Bloomberg.

Gov’t seeks to promote agriculture insurance
 
An online conference named “Agriculture Insurance – Farmer Security” was held on Wednesday by the Government web portal with an aim to promote agriculture insurance following policies of support from the Government.

The conference had the participation of representatives from the Ministry of Agriculture and Rural Development and Bao Viet Insurance Corporation.

Agriculture insurance, according to the conference, is still little known in Vietnam, and farmers are still exposed to risks in agricultural production. To ease difficulties for farmers, agriculture insurance will be piloted in 21 cities and provinces in the 2011-2013 period under the Government’s Decision 315.

Deputy Minister of Agriculture Ho Xuan Hung ascribed the absence of agriculture insurance to the country’s troubled economy, underdeveloped policies and farmers’ ignorance.

For the policy to approach local farmers, related managerial personnel must be equipped with enough information and training, said Tang Minh Loc of the Department of Economic Cooperation and Rural Development under the ministry. Then steering committees must be set up to inform farmers of insurance terms, such as insured entities, supporting agencies, procedures and indemnity.

Loc said the agriculture ministry will soon compile guidelines for this new issue. In the mean time, related agencies must refer to Decision 315 and Circular 47 to instruct local farmers.

Nguyen Quang Phi, deputy general director of Bao Viet Co., said Decision 315 would help farmers manage their risks given their small scale production and the country’s regular disasters.

All insurance policy holders will receive premium support, Phi said. In particular, poor farmers will enjoy 100% support, while the near-poor receive 80% support and the others 60%.

As for the products, Phi suggested conditional insurance, basing on weather and productivity factors to decide on the compensation. Therefore, the new approach will prioritize the indemnity for disastrous and widespread damages rather than random and unexpected risks like before.

The 21 cities and provinces participating in the policy are encouraged to apply the pilot production process developed by the Ministry of Agriculture and Rural Development, said deputy minister Hung. Hence, farmers are advised to replace traditional spontaneous cultivation with high-technology farming.
 
Japan investor wants to build terminal at Noi Bai Airport

Japan’s Sojitz Corporation is exploring the chance to participate in developing the second terminal of Noi Bai International Airport to help ease overcapacity at the airport in Hanoi.

The Civil Aviation Administration of Vietnam (CAAV) confirmed Sojitz’s keen interest in the T2 terminal after a meeting between the agency’s deputy director general Dinh Viet Thang and representatives of the Japanese company last week.

CAAV said Sojitz started to look for opportunities at airport developments in Vietnam, including supply of equipment for Noi Bai International Airport since 2010, after the corporation worked with the local aviation authority over appropriate policies for air transportation in Vietnam in 2007.

Thang told the Daily that the T2 terminal was now in the process of bidding review and preparations were going on toward construction of this project. However, he did not say when the terminal construction would get off the ground.

Deputy Prime Minister Hoang Trung Hai told relevant agencies at a meeting in Hanoi last month to speed up preparations for the T2 terminal so that the facility would be put into use in 2014.

The T2 terminal was designed to have four stories and to handle 10 million passengers a year in the initial time for international flights and 15 millions passengers afterward. This is one of the major infrastructure projects underway in Hanoi to support the country’s socio-economic development.

Earlier this month, construction began on a 12-kilometer-long, six-lane road linking Noi Bai International Airport and Nhat Tan Bridge, and the distance between central Hanoi to the airport will be halved to 15 kilometers when it is opened to traffic by 2014.

The road project has investment capital of VND5 trillion (some US$245 million) funded by official development assistance (ODA) of the Japanese Government and local counter capital.
 
MICE club makes first handshakes to promote products

The first step has been taken to overcome the obstacle of disjoint and to boost MICE (meetings, incentives, conventions, exhibitions) tourism in Vietnam.

The Vietnam MICE Club had a discussion on Tuesday about promotion programs, fairs, and product sales for MICE, two months after its debut. The meeting figured out the problem of domestic MICE industry is the shortage of partner’s information and efficient methods to attract customers.

The lack of good-price packages created by the cooperation of MICE service providers has made international tourists prefer foreign packages, said Bui Le Quan of VCCI Exhibition Service Co.

“Sometimes land service is well prepared but airplane ticket is so expensive that the customers turn down the service. If more competitive-price products are cooperatively made, more customers will be attracted,” said Quan.

Chairman Phan Xuan Anh of Viet Excursions Travel Company echoed the point. He said many French tourists chose to fly to Hanoi via Air France or Thai Airways rather than Vietnam Airlines because the latter had its ticket priced higher and more difficult to book.

However, a representative of the airline said this was not the case.

Nguyen Hong Nga of Vietnam Airlines said the firm has pricing policies to promote MICE tourism. “We have low priced tickets available during certain periods, especially for MICE customers,” she said.

The member enterprises of the MICE club have decided to choose IT & CMA Expo, which will take place in October in Thailand, to be the first event of the coordinated promotion. The club will join in the expo with a 72 square meter wide pavilion to exhibit MICE products.

Vietnam Airlines will apply special pricing policies to certain flights with more MICE tourists, such as flights to Australia, Europe, Singapore and some other Asian countries. The airline also has favorable policies on luggage fees and ticket prices for the club members that will join the upcoming expo in Thailand, Nga of Vietnam Airlines said.

She added “it is not difficult to promote MICE products. The point is whether enterprises care about the cooperation to promote it or not.”

VN needs many more supporting industries

Sufficient support industries would help Viet Nam reduce its trade deficit, attract more international companies and catch up with new business trends, according to Viet Nam Chamber of Commerce and Industry chairman Vu Tien Loc.

During the Viet Nam Manufacture and Support Industries Forum, co-organised by the Ha Noi Department of Industry and Trade, the Japan External Trade Organisation and Thailand's Reed Tradex Co yesterday in Ha Noi, the chairman said that many foreign manufactures, especially Japanese ones, were currently seeking Vietnamese part suppliers.

Some international support companies have had the tendency to shift their factories to countries with lower production costs. Viet Nam could be a promising destination for support industry development amidst attractive investment conditions, Loc said.

Development could afford huge opportunities to local part producers in further participating in the global production chain, he said, adding that if firms could be made able to supply foreign companies in Viet Nam with parts, they could also be made able to supply companies outside of the country.

During the forum, FC Hoa Lac Technology Co deputy director Le Gia Bao outlined capital shortages, limited management capacities, insufficient technologies and a lack of skilled workers as challenges facing Vietnamese small-sized support industry enterprises.

To overcome such challenges, firms would have to further co-operate in fulfilling large contracts signed with foreign companies rather than trying to reduce their prices to gain more clients, he said.

"Price is not a decisive factor. Small businesses should join hands in meeting technical requirements set out by foreign clients while ensuring on schedule delivery," he noted.

Hitoyoshi Shii, an expert from the Japanese International Co-operation Agency (JICA), suggested that domestic part producers further improve their management capacities and pay more attention to human resource training.

Firms should also focus on machine maintenance, seeing as many have failed to upgrade their machinery due to inadequate finances, he said.

PV