Uncontrollable prices on baby formula challenge authorities

Improper management policies have created huge rip-off possibilities in the market place for imported baby formula, which is putting more burden on local parents.

According to the statistic from the General Department of Vietnam Customs, the import price is only USD4-5 but the retail price is as high as USD20-43.

"Consumers have always had to bear the sky-high advertising costs." Mai Thanh Tong, Vice President of the Accounting Association in HCM City, said. Advertising costs of imported baby formula  ranks second, just behind cosmetic products. On top of this there's the commission fee for experts, who are paid to recommend the use of certain milk  powders.

According to the current laws, enterprises are only allowed to spend 10% of their revenues on advertising, but in reality, the percent might reach as high as 40%. The advertising helps firms imprint their brand names on consumers' minds.

A consumer said, "There's only imported formula milk at hospitals. My child is already used to the milk so I can't change the brand now."

Experts said Vietnamese people prefer foreign products so enterprises have taken advantages of the situation to fix the prices. "Vietnamese mothers like foreign milk formula and with the effects of advertising, a few companies can monopolise the market and fix prices." said Nguyen Tien Thoa, secretary of Vietnam Valuation Association.

In the mean time, Nguyen Anh Tuan, head of Department of Price Management under the Ministry of Finance, said these products are not under their control so they have not carried out any inspections. Enterprises have classified these products as food supplements and nutritional products to avoid the department's price stabilisation policies.

"If we change the standards and names now, we'll have trouble in price stabilisation of milk products that were once called food supplements or vice versa." Tuan said.

The Department of Price Management said they are working with Food Safety and Hygiene Department, part of the Ministry of Health, to extend the stabilisation policies over food supplements and nutritional products.

Until the proposal becomes real, and prices are stabilised, the costs will continue to increase--the cost for milk powder has already increased five times in the last six months.

New strategies to make waves in housing market

As Hanoi’s housing investors adjust to the slumping market, private homes for rent are facing tough competition from high-end apartments which were bought expressly to re-lease.

Examples of the evolving market can be found in West Lake area, long a popular destination for foreigners. Now many private villas are adorned with signs advertising their availability for lease.

Nguyen Van Khoi, a landlord in the area, said that his latest tenant just finished their leasing contract some weeks ago. He has been advertising for new tenants but attracting little interest.

“In the past I found it easy to lease my villa, but now it is so difficult, even though the price was negotiated at the most preferred level for the tenants,” Khoi said.

Meanwhile, a property agency said that most landlords are reducing prices, since many of their previous tenants decided to move to high-rise buildings, where they can enjoy better security and services.

Prices, according to this agency, have been reduced from 10 to 30 per cent compared with the same period last year.

The average price in Tay Ho now is from $500 to $700 for a studio unit and $1,000 to $1,500 for a two bedroom unit per month.

Khoi agreed that landlords are struggling to meet tenants’ demands.

“Alongside reducing prices, we are supplying more free of charge facilities and accept more flexible payments from our tenants,” Khoi said.

“We actually accept sharing or short-term contracts, which was not okay in the past,” Khoi said.

Tenants now have more options as a lot of apartments for sales have come back to the leasing market since homebuyers seek to earn a return on their investment.

According to Nguyen Thi Hai Minh, senior research manager from Cushman & Wakefield Hanoi, serviced apartments in Cau Giay and Tu Liem districts are facing tough competition from buy-to-let apartments.

Keangnam Hanoi Landmark Tower, The Manor and Indochina Plaza Hanoi are mostly coveted by foreigners.

“The buy-to-let trend continues adding competition to this sector and providing tenants with other options. However it is still evident that serviced apartments do offer better services and amenities that are sought after by tenants who may occupy them on both a long and short-term basis. Project developers and apartment owners offer apartments for lease across the city and in addition, some hotels are also considering converting part of their facilities into serviced apartments,” stated a CBRE report.

There is a major demand gap between buy-to-let and serviced apartment which encouraged many investors to buy apartments and sublease them.

At present, the monthly rentals at Keangnam Landmark Tower serviced apartments range from $2,000 to $2,400 per one-bed room unit and $2,600 to $2,700 for two bed-room units.

Nguyen Viet Dung, head of the leasing department at CBRE, said that some apartment-for-sale developers in Hanoi were considering converting their projects into the apartment-for-lease option.

The developers of The Lancaster in Ba Dinh district are pursuading their customers to convert their homes into serviced apartments for lease to foreigners.

Apart from that, some other developers are convincing their customers to buy and then sublease their apartments. Refico – the developer of the high-end apartment building Watermark in Hanoi, offered its customers a commitment to pay a leasing fee of up to VND80 million per month for a unit in the first year, regardless of whether the apartment can be leased or not.

The supermarket chain Big C and the French-Viet Nam Management Centre (CFVG) on Tuesday signed a co-operation agreement to train young people for top management positions in the near future.

To be called the "Mini MBA", the programme is estimated to cost VND4.7 billion (US$222,222). It will last one year (2013-14).

Under the programme, the supermarket will provide full scholarships for 16 trainees from HCM City, Ha Noi, Nha Trang, Dong Nai, Nam Dinh, Ninh Binh and Viet Tri.

In recent years, the retail industry in Viet Nam has developed strongly, with many supermarkets and trade centres opening. This has led to a high demand for human resources, especially for management positions, the supermarket said.

The large-scale training programme aims at training talent for key positions in the future, serving the supermarket's expansion plan as well as its long-term development in Viet Nam.

Apartments go on sale in Gia Lam

Viglacera announced it would start to sell apartments in the Dang Xa low-income housing project in Gia Lam District on the outskirts of the capital on September 16.

The project, which covers an area of 3.7ha and has five blocks, will supply the market with 1,139 apartments at a price of VND9 million per square metre.

The project is due for completion in the first quarter next year.

Those who buy apartments automatically qualify for loans from the Government's VND30 trillion housing support programme with a lending interest rate of 6 per cent.

Pomina steel price rises again

Pomina Steel Co (Pomina) will increase its product price by VND150,000 per tonne to VND13.5 million from yesterday.

Pomina general director Do Duy Thai attributed the price hike – the third since early in the third quarter – to rising input costs.

Lending in Dong Nai Province soars

Outstanding loans of commercial banks in the southern province of Dong Nai increased 6.35 per cent between December and August, according to the State Bank of Viet Nam's Dong Nai branch.

Loans to small- and medium-sized firms accounted for nearly 25 per cent of the VND72 trillion (US$3.27 billion) in total. Lending to agricultural industries made up 15.8 per cent and 11.7 per cent went to import and export sectors.

Director of the Dong Nai branch Tran Quoc Tuan said that the branch aimed for credit growth of 16-18 per cent this year, though it would have to make great efforts to meet this target as only 30 per cent had been reached in the past eight months.

By the end of August, commercial banks in the province attracted VND86.8 trillion in deposits, up 9.57 per cent against December.

HCMC green lights Japan projects

The People's Committee of HCM City on Tuesday granted licences to three Japan-funded projects with a combined investment capital of US$166 million in the city's industrial parks and processing zones.

The Unika Group will now develop a project in Hiep Phuoc Industrial Zone to build Japanese-standard warehouses for small and medium-sized enterprises and support them during operation.

Meanwhile, Saigon Precision and Nidec Tosok Akiba Viet Nam will increase investment in two operating projects in the Linh Trung 2 and Tan Thuan export processing zones, respectively. The two projects are mainly involved in precision engineering components.

Speaking at the granting ceremony, chairman of the municipal People's Committee Le Hoang Quan applauded the new funding from Japanese investors, saying that it marked important progress in the hi-tech industry, contributing to the development of the city.

HCM City is now one of the leading cities and provinces in attracting Japanese investment.

The HCM City Export Processing and Industrial Zones Authority (HEPZA) said most of the Japanese projects in the city's zones were doing well, and many had expanded following a successful period of operation.

Over the first half of this year, it issued licences for 20 Japanese projects with a total investment of more than $183 million, which accounted for 54 per cent of the total foreign investment.

HEPZA said it would solicit investment in the machinery and electronics industries and was planning to carve out a Viet Nam – Japan Industrial Area in the Hiep Phuoc Industrial Zone in HCM City.

It said it would also organise trade promotion events in Japan to attract investors.

Vietcombank lending rises 2.8% in August

Vietcombank's total outstanding loans have increased again after declining by 1.47 per cent in the first half of the year.

Vietcombank executive officer Nghiem Xuan Thanh said that the bank's lending by the end of August rose 2.8 per cent against December last year.

Thanh attributed the lending growth to a rise in credit needs of businesses in the past two months, especially in August.

Besides, it was also thanks to the bank's improvement in marketing policies to gain better access to businesses and offer them more attractive interest rates.

The lender said it could cut dong short-term lending rates to below 5.5 per cent, and even down to 5.2 per cent per year for good businesses.

Thanh said that Vietcombank expected to achieve a credit growth of at least 10 per cent this year given increasing credit demands, a relatively stable lending rate policy and committed capital disbursement to customers.

Low lending expansion was one reason attributed to the bank's lower profit in the first half period.

The bank reported a pre-tax profit of VND2.91 trillion (US$138.5 million) in H1, or 45 per cent of its whole-year plan. Profit after taxes and minority interests also inched down to VND2.2 trillion ($95.24 million), meeting 45.6 per cent of its yearly plan.

Vietcombank targets a credit growth of 12 per cent and profit before tax of VND5.8 trillion ($276.2 million) in 2013.

Chip industry sets up int'l trade ties

The HCM City Semi-conductor Industry Association on Wednesday signed a deal with a global trade association to boost the city's chip industry.

Under the memorandum of understanding, Semiconductor Equipment & Materials International (SEMI) and the association will strengthen information exchange and investment in the electronics and chip industries.

The association's member companies will co-operate with SEMI for research, development, production, and distribution of chip products and services and participating in international fairs.

SEMI will help the Vietnamese firms and provide them booths at annual international fair SEMICONS Singapore to showcase their products.

It will help them with manpower training and also provide training at universities and training centres.

VN nears fertiliser self-sufficiency

Viet Nam produces more than eight million tonnes of fertilisers a year, meeting 80 per cent of demand, according to the Ministry of Industry and Trade.

Speaking at a seminar in Can Tho on Tuesday, Vo Van Quyen, head of the ministry's Market Department, said the country imports most of its ammonium sulphate, potassium, and DAP (diammonium phosphate) for its needs but is virtually self-sufficient in most others.

By 2015 it will fully meet its urea, phosphate, and NPK (nitrogen, phosphorous and potassium) needs as well as 70-80 per cent of DAP and 30 per cent of SA needs, he said.

However, SA fertiliser has low content of protein and can be replaced by urea fertiliser, he said.

The department reported at the seminar that it carried out 1,057 inspections in the first half of the year and uncovered 258 cases of fake and low-quality fertilisers.

Nguyen Van Tuynh, deputy head of the department's southern office, said the problem of spurious and low-quality fertilisers has become complicated.

Quyen said to efficiently manage the market, it is required to inspect the quality of fertilisers produced and sold, balance supply and demand through storage policies, and regulate imports through tariffs.

Support policies are needed to improve the distribution system to reduce the number of layers of middlemen to stabilise prices, he said.

Deputy Minister of Industry and Trade Ho Thi Kim Thoa said it is necessary to strengthen inspections since the sale of fake and low-quality fertilisers has affected genuine traders and producers and farmers.

The Government has ordered the Ministry of Industry and Trade to draft a new decree for management of the fertiliser market, she said.

Under the decree, her ministry would manage inorganic fertilisers while the Ministry of Agriculture and Rural Development would manage organic fertiliser, she said. Penalties for violations would be made more stringent, she added.

Weak sales push listed firms to cut profit predictions

Many listed companies have cut their annual profit targets after seeing disappointing business performance in the first half due to unpredicted market difficulties.

Petrolimex Insurance JSC (PJICO), code PGI, slashed its goal for this year by 22.22 per cent from VND135 billion (US$6.37 million) to VND105 billion ($4.96 million).

Chairman Nguyen Van Tien said this was the most difficult year for insurance providers in two decades. In the first six months, the company made only VND3 billion ($141,643) in pre-tax profits.

The executive board planned to send details of the reduction to shareholders, though Tien promised that the company's commitment to pay a dividend of at least 9 per cent would stand.

Education Financial Investment JSC (EFI), code EFI, previously predicted it would make VND15.4 billion ($727,101) in pre-tax profits.

However, the company recently cut this figure in half to VND8.3 billion ($391.879), in line with a decrease in predicted revenue from VND25 billion ($1.18 million) to VND18.4 billion ($868,744).

At the same time, Phu Son Livestock JSC, code PSL sharply reduced its profit target by 77.14 per cent from VND17.5 billion ($826,251) to VND4 billion ($188,857).

And Thong Nhat Rubber JSC, code TNC, sliced its profit outlook by 22.09 per cent to VND33.5 billion ($1.58 million)

According to H1 reports, many listed companies have reached less than 20 per cent of their full-year profit targets. Consequently, other companies are also considering lowering their forecasts.

Hoang Mai Cement JSC (HOM) said it would likely be impossible to reach the profit target of VND95 billion ($4.48 million), as in the first six months HOM experienced losses of VND23 billion ($1.08 million).

Company accused of selling fake Iphones

Vietnam Telecom Services Company (VinaPhone) sent a petition to police, accusing another company of using its name and logo to sell fake Iphones.

The accused company is VinaiPhone, with its head office on Dong Nai Street, HCM City.

Dao Nham Tuat, a resident of Hanoi, said he ordered an Iphone 4S and an Iphone 5 at a 60% discount.

"I bought the phones from the company's branch in Khanh Hoa Province for a total of VND14.7 million (USD705)," Tuat said. "They soon arrived, but after a quick check, I found out that they were fake Iphones imported. I made a complaint to the company and they said they would call me back in 20 minutes, but I haven't heard anything from them since." He added that he has made several attempts to get into contact with the company to no avail.

When asked, the hotline operator in HCM City assured that their phones were genuine, but the hotline operator in Khanh Hoa Province admitted that due to some mistakes, they had sent out fake phones and that they would compensate Tuat.

Vinaiphone quickly took down their banner

However, Pham Dong Nam, the warehouse manager, said, "If it's our fault then we'll take responsibility. We have procedures to carry out so we want more information to find out how we made such mistake. Still, Tuat insisted on a refund, but we can't just return the money right away."

According to Nam, Tuat's phones might have been swapped during transport or when he brought the phones to other shops to install additional apps. Tuat has denied all these possibilities.

After the story was published, many readers pointed out that VinaiPhone's logos are suspiciously similar to Vinaphone's.

Vinaphone's said this case will badly damage their reputation and they will work with police and copyright agencies in HCM City for investigation.

Meanwhile, Nam said they will re-design the current logo. "We sincerely apologise to Vinaphone." he said.

Soc Trang Highlights Eco-tourism

Dung Islet, where there is an eco-resort on a salinity- intruded forest, an attraction in Soc Trang Province

In accordance with its tourism development master plan for 2020, the Mekong Delta province of Soc Trang has a driving ambition to develop eco-tourism by tapping its rich natural resources and local culture. The scheme also aims to get local people involved in environmental education, and sustainable bio-diversity preservation and development.

The “eco-tourism” concept Soc Trang’s leaders aspire to formulate is that natural resources are in primitive condition while people who want to exploit the resources must be committed to protecting and enhancing the surrounding natural environment. In this context, minimum human impact on the environment is the first priority.

Soc Trang Province is endowed with untapped potentials and advantages for developing eco-tourism. The province is home to Tran De and Dinh An estuaries and the My Thanh River. Furthermore, the islets along the Hau (Bassac) River, including Dung, My Phuoc and Song Phung 3 can be counted as local valuable assets together with the 72-kilometer coastline.

The province’s network of islets stretches over 50 kilometers along the Hau River toward the East Sea. My Phuoc Islet Resort boasts local landscapes. To celebrate the annual Doan Ngo Festival (falling on the fifth day of the fifth lunar month), the province hosts the “Song nuoc miet vuon” (waterways in the countryside) festival. In addition to giving visitors an insight into the traditional local culture, the festival creates a chance of enjoying fresh local specialties, including fruits. The event is held with a wide range of activities—for instance, a cooking contest, a fruit decoration competition, don ca tai tu (southern traditional amateur music) performances and folk games. Last but not least, local foods should be a feast worth being tried by tourists.

To call for domestic and foreign investment in eco-tourism projects, Soc Trang has drawn up policies and incentives, especially those involving site clearance, land lease, infrastructure construction, administrative procedure consulting and funding, vocational training and technology transfer.

Projects calling for investment will provide detailed information for investors—bidding documents, locations, functional areas, land-use rights, power and water supply, to name just a few.

The provincial authorities are now focusing on potential investors for Ho Be eco-resort project in Vinh Chau Town and Song Phung eco-resort project in Long Phu District. Earlier this year, several entrepreneurs showed their initial in these projects. The authorities are preparing to call for new investors in a hydrofoil port after the initial investor failed to realize it.

Definitely these projects’ operation will further the effort made by Soc Trang to foster local eco-tourism and make exclusive eco-tours combining pilgrimage, cultural festivals, craft villages and specialties. The effort will engage the province’s population in attracting more local and foreign tourists.

Eco-tourism is closely related to natural resources, local culture, environmental education and community. In that sense, eco-tourism services should be provided in a way that minimizes negative impacts on bio-diversity. Protection of beaches, rivers and forests must be prioritized. In practical terms, it involves training for tourism workers; links between tourism organizations and associations, travel companies and localities; raising awareness of environmental protection in the community; and enhancing the role of tourism authorities at all levels.

In addition to well-known tourist destinations such as Doi (bat) Pagoda, Dat Set (clay) Pagoda and Chen Kieu (porcelain bowl) Pagoda, Soc Trang is home to three peoples – Kinh, Khmer and Chinese – with many cultural festivals and religious rituals. The annual Ok Om Bok Festival and boat races attract thousands of tourists. Soc Trang also has rich supplies of fish. Furthermore, orchards on the islets along the Hau River yield delicious tropical fruits all year round.

Food and beverage consumption keeps surging

Despite the global and local economic downturn, Vietnam’s food and beverage consumption still rises rapidly in both volume and quality, exposing a highly potential sector for producers.

Deputy Minister of Industry and Trade Ho Thi Kim Thoa said that Vietnam’s food consumption is forecast to grow by 5.1% a year to an estimated US$29.5 billion by 2016.

Meanwhile, the consumption per capita will rise by 4.3% with around VND5.8 million per year by 2016, she told the opening ceremony of the international exhibitions on food-beverage (Vietfood & Beverage 2013) and processing-packaging (ProPack Vietnam 2013) which opened on Wednesday in HCMC.

Besides, Vietnam’s canned food industry will increase by 4.3% in volume and by 10.4% in sales.

Prospects of Vietnam’s beverage are also bright with sales in the 2011-2016 period forecast to grow by 7.5% and revenues by 10.5% per year as consumers tend to use drinks of higher value, Thoa said.

Non-alcoholic beverage is expected to see annual revenue growth of 8.2% in the period.

Such strong growth rates, according to Thoa, result from the stable economic development, increasing local consumption, urbanization, foreign investments and the rising number of tourists.

According to Business Monitor International (BMI), the food consumption per capita in Vietnam is rising by 4.3% per year. Vietnam is still an attractive market for local and foreign producers planning to make investments in the sector.

Together with the development of food and beverage, local enterprises are spending more on new production and processing technology.

Vietfood & Beverage 2013 and ProPack Vietnam 2013 taking place until Saturday at Tan Binh Exhibition and Convention Center attracts nearly 300 local and foreign exhibitors with nearly 350 booths from 18 countries and territories.

The event is organized by Vietnam National Trade Fair and Advertising Company (Vinexad), the HCMC Food and Foodstuff Association (FFA), the Vietnam Beer, Alcohol and Beverage Association (VBA) and the Vietnam Tea Association (VITAS). It is expected to attract over 10,000 visitors, most of whom are local and foreign enterprises wanting to seek goods supply, technology transfer, sales agents, and sales of processing machines and equipment.

Japan, Singapore investors to set up special IPs in city

A Japanese company on Wednesday won a license to set up a special hi-tech zone in the city to attract their fellow investors, while two Singapore investors also cut a deal on Wednesday with the authority of Saigon Hi-tech Park (SHTP) to establish a special park inside SHTP.

The Vietnam-Japan technological center will specialize in attracting Japan’s small and medium mechanical engineering enterprises using high technology.

Costing around US$31 million, the project will be carried out by the joint venture between Japan-based Unika Co. and HCMC’s Hiep Phuoc Industrial Park Joint Stock Co. on an area of 13 hectares at Hiep Phuoc Industrial Park. The project will be kicked off next month and put into operation in October, 2014.

Two other Japanese investors were also awarded investment certificates on Wednesday to expand projects in the city.

Saigon Precision Co. in Linh Trung II Export Processing Zone has increased its investment capital by US$129 million to expand and upgrade production lines, apply new technology and build the fourth plant in 2.2 hectares at the export processing zone. With such additional investment amount, Saigon Precision has raised its registered capital to US$219 million.

Nidec Tosok Akiba Vietnam Co. will also spend an additional US$10 million, raising registered capital to US$38.5 million, on upgrading production lines with new and modern machines and equipment.

Meanwhile, Singapore-based Ascendas and NP-Capital Partners on Wednesday signed a memorandum of understanding with SHTP to make a feasibility study and a detailed planning of a work-live-play-learn section at SHTP.

According to the park’s authority, the project which will cover around 12 hectares aims to attract talents and human resources of enterprises operating in the hi-tech sector.

The project will be pioneering in attracting foreign investments in the field of developing integrated scientific and technological space in the city. The signing of this MOU is within the framework of activities celebrating the 40th anniversary of establishment of Vietnam-Singapore diplomatic ties.

Shrimp exporters worry over anti-subsidy duty plan stateside

Shrimp exporters are fretting about anti-subsidy duties being weighed by the U.S. on shrimp imports from Vietnam which if in place would do greater harm to local traders than the anti-dumping tariffs, industry sources said.

In fact, the local shrimp industry is more concerned about anti-subsidy tariffs than anti-dumping duties, said Tran Van Linh, director of Thuan Phuoc Seafood and Trading Corporation in the central coastal city of Danang. That is because anti-dumping taxes are slapped on only a number of firms with exports to the U.S. while the anti-subsidy duties apply to all local exporters shipping products stateside, he explained.

The U.S. Department of Commerce (DOC) on Tuesday announced the final rule of the anti-dumping investigation into shrimp exported to the U.S. by 32 compulsory and voluntary Vietnamese defendants between February 1, 2011 and January 31, 2012. Shrimp shipments to the U.S. market by these enterprises in this period all enjoyed a zero anti-dumping tariff, the U.S. department said.

This final determination remains unchanged compared to the preliminary conclusion announced by DOC in early March, 2013 admitting 32 Vietnamese shrimp exporters had not dumped their products stateside.

Anti-dumping taxes are mainly imposed on traders making big shipments to the U.S. while common rates are applicable to those with low export value. Therefore, local traders that didn’t dump shrimp would be subject to gradually-falling tariffs after DOC’s administrative reviews, which were even slashed to zero like the case now.

Truong Dinh Hoe, general secretary of the Vietnam Association of Seafood Exporters and Producers, said the fact that Vietnamese shrimp enjoy an anti-dumping tax rate of 0% in the U.S. was foreseeable as domestic firms only sold products at market prices and did not compete by lowering selling prices.

Tablet computer sales post up strong growth

Local sales of tablet computers have still posted strong growth over the past months despite the current slackened demand for technology items at home.

Tablet computers have been the best-sellers among all personal tech products in Vietnam over the past eight months, according to Irving Oh, general director of HP Vietnam.

Oh ascribed the strong growth to the participation of many makers in the segment offering diversified and convenient products as well as the richly available applications. Furthermore, he said, the fact that table computers are increasingly affordable has also stimulated local demand.

A recent report of GfK Vietnam shows that local tablet computer sale volume totaled 113,537 units in this year’s first half compared to 37,198 units sold in the same period last year. Specially, the June sale volume posted a sharp rise with 29,140 units, higher than 22,344 units and 17,163 units consumed in May and April respectively.

Similarly, the market research company IDC reported that table computer sales were gaining robust growth in the Vietnamese market at the moment. The firm in a recent global survey indicates that tablet computer sale volume in Vietnam in the first quarter surged 28% versus the preceding quarter and jumped 130% year-on-year to 130,608 units. The figures are much higher than the January-June sale volume reported by GfK.

It is believed that the overwhelming presence of low-cost tablet computers running on Android operating system has boosted local demand.

Like tablet computer makers, retailers also asserted that tablet computers had been selling well in the local market.

The retail system Thegioididong.com sold a combined 6,800 tablet computers in June, which soared to 7,500 units in July alone. Other retailers such as Vien Thong A, Nguyen Kim, Phong Vu and FPT Retail also reported local demand for the technology product at their stores was strong but declined to elaborate on the specific sale volumes.

Local customers are inclined to choose tablet computers priced between VND3 million to VND6 million a unit while the high-value items with the price starting from VND8 million each are not favored, according to retailers

Samsung and Asus now are two brands dominating the local market. The strong sale growth has attracted many producers to join the segment recently.

HP on Wednesday launched the new product HP Slate running on Android operating system equipped with ARM chip having double core Cortex-A9 and 7-inch screens at a retail price of VND3.9 million a unit.

Lenovo last month also introduced tablet computers of the low-valued segment with the A1000 priced at VND3.49 million each and the A3000 worth VND5.49 million a unit.

HCMC seeks int’l cooperation for chip industry

The HCMC Semiconductor Industry Association (HSIA) signed a memorandum of understanding (MoU) on cooperation with Semiconductor Equipment & Materials International (SEMI) on Wednesday to facilitate development of the city’s semiconductor industry.

Richard Salsman, vice president and CFO of SEMI, said that SEMI through the cooperation will help HSIA members to expand their international networks.

According to the MoU, the two sides will boost cooperation in information exchange and investment in the electronic and chip industry. Member enterprises of both sides will also join hands in research, development, production and distribution of chip products and services by participating in international fairs in Vietnam and elsewhere.

SEMI will give aids and supply Vietnamese enterprises with booths at the annual international fair SEMICONS Singapore. This will help local firms introduce their products to international clients.

The organization will also help local firms in manpower training and providing training courses for universities and training centers.

The MoU was signed at the Vietnam Semiconductor Strategy Summit. Over 50 leaders of local and international enterprises and groups joined the three-day event, which wrapped up on Wednesday in the city.

According to HSIA, cooperation with SEMI is a huge opportunity as SEMI has nearly 1,800 members who are multinational enterprises and groups in the electronic and semiconductor chip sectors.

Lower deduction for vehicle insurers proposed

Enterprises providing compulsory insurance for civil liability of motor vehicle owners may have to contribute only 1% of premium revenue to the motor vehicle insurance fund instead of 2% like now.

The Ministry of Finance has made this suggestion in the draft amending and supplementing Decree No. 103/2008/ND-CP. If the proposal is passed, insurance enterprises will enjoy lower deduction rate.

Insurance enterprises currently deduct at least 2% of annually collected premiums of compulsory insurance for civil liability of motor vehicle owners as contributions to the motor vehicle insurance fund.

Motor vehicle owners have to buy compulsory insurance policies for their civil liability under this decree. Insurance enterprises are regulated to apply premium rates and insurance liability levels specified by the Ministry of Finance. They are prohibited from supporting insurance sale agents and providing promotional programs.

Ministry warns of overinvestment in rice warehouses

The Ministry of Industry and Trade has warned local enterprises of the consequences of rice storage overinvestment, saying that the nation will face huge waste if enterprises keep on building such facilities in the future.

According to statistics of the ministry and the Vietnam Food Association, rice exporters have strongly invested in storage facilities given the Decree 109/2010/ND-CP on rice trading and exports, spurring up total storage capacity by four million tons over the past two years.

Speaking at a conference in HCMC on Tuesday, Phan Van Chinh, head of the Import-Export Department, said that total storage capacity of rice exporters is 6.4 million tons, excluding storage systems of traders, processing mills and the national storage system, Chinh said.

Local departments of industry and trade have been told to advise enterprises to reduce investment in rice storage to avoid waste.

Chinh said that local authorities must solve the problem. Local government must have information of rice output and stocking demands in a locality to inform enterprises, preventing them from over-investing in rice storage and causing huge waste.

But it is the prevailing regulations that encourage such investments.

Under Decree 109, each eligible rice exporter must have one warehouse to store at least 5,000 tons of rice.

According to the Department of Agro-Forestry-Fisheries Product Processing and Salt Industry, while rice storage facilities have mushroomed, rice reserves remain modest, at just over one million tons. The figure has not increased since the issuance of the decree.

A recent report of the department shows that the number of rice storage facilities has increased because of the decree. In fact, many warehouses have been built with outdated technologies as enterprises have just invested to cope with the decree, not to stock rice for exports. As a result, they have triggered waste and adverse impacts on export rice quality.

Lam Thanh Hung, deputy director of Kien Giang Province’s Department of Industry and Trade, said that as the regulations have yet to suit reality, the number of rice storage buildings have shot up while there has been an imbalance between unhusked rice and rice storage capacity.

Rice exporters usually buy rice, not unhusked rice, as investment in rice storage is less costly than unhusked rice storage, which must include rice drying, processing and polishing facilities, Hung said.

Highlands highway makes headway

The investment climate in the Central Highlands region will be significantly improved as a road linking this region with economic hub Ho Chi Minh City is expected to be completed in 2016.

Last June, the Ministry of Transport (MoT) in cooperation with a consortium between construction companies Toan My 14 and Bang Duong started upgrading 30 kilometres of road stretching through the Central Highlands’ Dak Nong province. The infrastructure project, costing approximately $49 million, is a part of the National Road 14 that links southern key economic zones including Ho Chi Minh City, Binh Duong, Dong Nai and Ba Ria-Vung Tau to the Central Highlands.

The National Road 14, at a length of 663km, is actually a part of Ho Chi Minh National Highway which stretches the length of the country. Currently, the National Road 14 is in poor condition, making life difficult for the local community as well as travellers.

The Vietnamese government has successfully completed upgrading 187km of the road, funded by government bonds. The remainder is under construction with capital sourced from private investors like Toan My 14 – Bang Duong consortium as well as government bonds.

“We will complete this road in 2016,” said Deputy Minister of Transport Nguyen Hong Truong, adding this road was very important for the economic development of the Central Highlands.

For many years, poor transport infrastructure has been a major source of concern and has kept the cost of doing business in the Central Highlands high. Even though this region is said to have great potential for mining and agricultural processing, private investors are still wary of investing.

Statistics from the Ministry of Planning and Investment’s Foreign Investment Agency show that there have been only 140 foreign invested projects in five Central Highlands provinces of Dak Nong, Dak Lak, Gia Lai, Lam Dong and Kon Tum.

“To spur economic growth in the Central Highlands, we need to develop infrastructure network here first. That’s why we decided to invest in this project,” said Do Thi Kim Lien, a representative of Toan My 14 – Bang Duong consortium.

“In the near future, after the completion of the National Road 14, the Central Highlands will have easier access to Ho Chi Minh City, Dong Nai and Binh Duong. This should make doing business in the region easier,” said Lien, adding that the project had strong support from the local residents. Thanks to such support, the construction progress is running smoothly.

“The local residents understand the benefits of this road. This is the key to the success of an infrastructure project,” she said.

Lee & Man revives pulpy plan

Hau Giang Provincial Industrial Parks Management Authority has agreed to allow leading Hong Kong paper manufacturer Lee & Man to continue developing its much-delayed pulp and packaging paper project in southern province of Hau Giang.

The decision was disclosed to VIR last week by Pham Minh Toan, head of Hau Giang Provincial Industrial Parks Management Authority’s Investment Management Office.

Toan said the authority agreed that the investor should continue work on its first factory, capitalised at $600 million for the first phase with operations commencing in late 2014.

He added that to pursue this project, Lee & Man had to submit a revised plan, including details and deadlines for completing different components of the licenced project and the commitment to hastening implementation.

Lee & Man has plans to build two factories.

“Once Lee & Man finishes their first factory, then the investor can move on to its next factory,” Toan said.

Nguyen Ngoc Dien, deputy head of Hau Giang Provincial Industrial Parks Management Authority, said the local authorities carefully considered the decision, having extended the deadline already, and warned Lee & Man about the adverse impact the delays would have on residents and the province’s future as an improved investment destination.

Previously, the investor requested an extension on its projected completion to the fourth quarter of 2015, an additional two years after the current deadline of late 2013.

The investor has only completed a few segments of the total project thus far - partial site clearance, construction of three warehouses, internal roads, and a small workshop, together valued at $28 million, only 4.4 per cent of its $1.2 billion planned investment.

Lee & Man received its investment certificate in June 2007 to build two factories in Song Hau Industrial Park in Hau Giang, with the estimated output of 150,000 tonnes of pulp and 420,000 tonnes of packaging paper per year. These factories are expected to provide 1,000 jobs to local workers.

Lee & Man is a leading paper manufacturer in China, specialising in linerboard and corrugating medium – containerboard – used in the production of cardboard boxes.

It has four production centres in China and the Hau Giang projects are the company’s first ones outside China.

A thermal power plant to be built in Quang Ngai

A memorandum of understanding on developing Dung Quat thermal power plant under the build- operate- transfer investment form was signed between the General Department of Energy (GDE) under the Ministry of Industry and Trade and the Sembcorp Industries Ltd of Singapore in Hanoi on September 11.

The plant will be built in Binh Son district, Quang Ngai province, at a cost of almost 2 billion USD, said Director of GDE Pham Manh Thang. It is designed to have two turbines with a combined capacity of 1,200MW. Once completed and put into operation, the plant is expected to supply 7 billion kW per year.

As planned, the first turbine will operate in September 2020 and the plant is scheduled to be fully operational in March, 2021.

Thang also underlined the plant will be fuelled by imported coal with hope to help Vietnam meet national energy demand in the future.

Abbott destroys imported milk in Vietnam

Abbott Nutrition Vietnam announced it has destroyed all batches of imported milk for children suspected of containing the Clostridium Botulinum germ that may cause muscle paralysis.

In early August the company recalled a number of Similac Gain Plus Eye – Q batches imported into Vietnam from New Zealand for fear these batches may contain Clostridium Botulinum.

After careful examinations, the New Zealand Ministry for Primary Industries confirmed these products remain safe with children.

The Vietnam Food Administration also revoked requests for milk recalls and allowed the company to circulate this kind of milk to customers.

However, Abbott Nutrition Vietnam destroyed all the recalled batches for safety reasons, using environmentally friendly technologies.

In a report to the Vietnam Food Administration, the Vietnam-based Abbott office said the company had completed the culling of the recalled batches under the close supervision of relevant agencies.

Meanwhile, Danone Vietnam – the sole importer and distributor of another milk brand Dumex – has committed to destroying a batch of Dumex Gold for children aged 6 to 12 months, suspected of containing Clostridium Botulinum.

The batch is being stored at Song Than II Industrial Park in Binh Duong province.

The company is working with insurance agencies on necessary procedures for the culling scheduled to be completed before December 31.

Japan grants US$500 million in ODA to Vietnam

Japan will provide US$500 million in official development assistance (ODA) to Vietnam to implement key infrastructure projects in 2013.  

Foreign Minister Fumio Kishida announced the decision at a Vietnam-Japan Committee for Cooperation meeting in Tokyo on September 12.

At the meeting, the fifth of its kind, Kishida and his Vietnamese counterpart Pham Binh Minh agreed to strengthen the two countries’ strategic partnership, including implementation of infrastructure construction projects in Vietnam.

They agreed to bring into full play the Joint Vietnam-Japan Initiative with a view to improving Vietnam’s investment environment and sharpening its competitiveness, especially when Japan is Vietnam’s biggest investor, with more than 1,200 businesses operating in the country.

Minh said the Vietnamese government is accelerating the current economic reform towards sustainable development, further improving its investment environment and creating more favourable conditions for foreign companies to do long-term business in the country.   

He appreciated the valuable volume of ODA Japan has provided to Vietnam over the past 20 years and voiced Vietnam’s commitment to utilising the aid effectively.

Kishida said besides ODA, Japan will help develop Vietnam’s infrastructure in the form of the public-private partnership (PPP) model.  It will also consider strengthening education cooperation with Vietnam to generate young qualified human resources for the Southeast Asian nation.

The two FMs said Vietnam and Japan will work closely together at regional and international forums to promote regional economic connectivity such as the Trans-Pacific Partnership (TPP) agreement and the building of the ASEAN Community.

Kishida confirmed that Vietnam is one of Japan’s strategic partners and Japan wants to foster this strategic partnership.

Both sides agreed to convene the 6th meeting of the committee in 2014.

Vietnam ranks 2nd in ASEAN’s Japanese investment attraction

Vietnam currently ranks second in ASEAN in terms of attracting Japanese investors (around 1,200 firms), said Hirotaka Yasuzumi, Managing Director of the Japan External Trade Organization (JETRO) in Ho Chi Minh City.

Hirotaka Yasuzumi spoke highly of the business climate in Vietnam at a meeting jointly held by Vietnam CEO Club and the Japanese Business Association of Ho Chi Minh City (JBAH) in HCM City on September 12.

He said most Japanese companies are operating in assembling, health care, electronics, and support industries.

Dr. Tran Du Lich, an economic expert, highlighted Vietnam’s economic recovery as a result of inflation control, forex stabilization, and trade growth.

He forecast GDP in 2013 at 5.3-5.5% and export turnover up to 10%.

Many participants considered the event a good opportunity for them to explore market trends, establish strategic partnership and expand business operation in both countries.

They emphasized Japanese investors’ role in Vietnam’s foreign invested sector, especially when the two countries are negotiating the Trans-Pacific Partnership (TPP) agreement, which is expected to create new opportunities for both sides.

However, they, said Vietnam boost administrative reform, develop infrastructure and create a better legal framework for foreign investors, including those from Japan.

The focus will be on pushing up the restructuring process, with priority given to support industry, production activities, and financial market operations, they suggested.

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