BUSINESS IN BRIEF 17/11
VN, Kazakhstan to boost ties
Viet Nam and Kazakhstan have agreed to speed up co-operation in various areas such as industry, trade, investment, tourism and aviation.
The consensus was reached at the sixth session of the Viet Nam-Kazakhstan Inter-Governmental Committee on Economic, Trade and Scientific-Technological Co-operation in Ha Noi on Tuesday.
During the event, Vietnamese Deputy Minister of Industry and Trade Le Duong Quang spoke highly of bilateral relations between the two countries, especially in trade and commerce.
He said the visits of Government leaders had helped to open a new page in the two countries' relationship.
In order to facilitate bilateral ties, Kazakhstan would open its Embassy in Viet Nam next year, said Kazakh Deputy Foreign Minister S Sarubai.
The Vietnamese Ministry of Industry and Trade said that two-way trade had experienced encouraging growth in recent years, reaching US$85.6 million in 2012, up 176 per cent year-on-year.
Over the first half of this year, trade topped $74.7 million, surging over 200 per cent against the same period last year.
Viet Nam's major exports to Kazakhstan include phones and accessories, farm produce, garments and textiles, machinery and steel, while it imports chemicals, metals and ore.
In an effort to create a legal framework for economic and trade co-operation, the two nations have taken an initiative to start negotiations for a free trade agreement between Viet Nam and the Customs Union of Belarus, Kazakhstan and Russia earlier this year.
They have also accelerated co-ordination in tourism, aviation and investment with the launch of direct flights from Almaty to HCM City by Kazakhstan's national flag carrier, Air Astana.
Firms urged to plan for disasters
Most Vietnamese businesses have ignored the necessary preparations to avoid and reduce losses during natural disasters, according to experts.
"It's time for the business community to increase awareness about how to manage natural disaster's risks and in return support for society," said an expert.
Nguyen Thai Thuy Hoa, training manager of the Small and Medium Enterprises Development Support Centre was speaking at a seminar held in HCM City yesterday that discussed businesses adaptation to climate change.
Viet Nam is one of five countries considered to be the most vulnerable to climate change, with 70 per cent of the population affected by natural disasters. The country loses 1.5 per cent of GDP each year because of the impact of climate change.
A survey, carried out in 2011 by the Viet Nam Chamber of Commerce and Industry (VCCI) and the Asia Foundation, found that 85 per cent of businesses were affected by storms, 45 per cent by floods and 12 per cent by whirlwinds.
"Most businesses haven't paid attention to drawing up plans to manage the risks of natural disaster. They should also be ready to support and assist the local community as well," she added.
Around 57 per cent of Vietnamese businesses have not bought insurance for natural disaster, 47 per cent have no plans to protect database and equipment, and 55 per cent have not thought about how to recover after a natural disaster.
Hoa suggested that business leaders take the initiative and change awareness about natural disaster's risk reduction by incorporating this in their yearly business plans and corporate social responsibility strategy.
Next week, a seminar on how to deal with natural disaster's risks will be held and early next year, two training courses for enterprises will be organised, along with consultancy support for businesses who want to make a plan.
"In future, we will expand training programmes to all of Viet Nam; increase information technology allowing enterprises to get more information; and promote public-private partnerships and activities for natural disaster risk-management, along with increasing social responsibility," Hoa added.
The HCM City Natural Resources and Environment Department has set up the Enterprises Club Adapting to Climate Change in order to enhance the role of enterprises in this endeavour.
The club will exchange knowledge, skills and solutions to help each other cope with climate change.
SSC seeks extension for draft decree on derivatives market
The State Securities Commission asked the Government to extend the deadline for a draft decree on the derivatives market from the end of this year to next year.
Although Viet Nam urgently needs derivatives regulations, the complicated topic requires careful consideration and consultation with people from relevant organisations, the commission said.
While the country's stock market has been operating for more than 13 years, there is not yet a derivatives market. Such a market is expected to be introduced in 2015.
Derivatives include four main instruments: forward contracts, swap agreements, futures contracts and option contracts. Currently, only stocks, bonds and fund certificates are traded in Viet Nam.
According to chairman of the State Securities Commission Vu Bang as quoted by Dau Tu Chung Khoan, the derivatives market would operate under the management of the Viet Nam Stock Exchange merged from the two existing bourses.
The commission proposed that only securities companies with minimum equity of VND500 billion (US$23.8 million) and good financial status be allowed to join the derivatives market.
Well-trained human resources, a consistent and transparent legal framework and risk control management are critical for the derivatives market's success, experts said.
Vietnam-China int’l trade fair in Lao Cai
The 13th Vietnam – China International Trade Fair 2013 opened at the Kim Thanh Fair center in Lao Cai on November 13.
In his opening speech, Deputy Minister of Trade and Industry Nguyen Cam Tu stressed that the event is part of trade promotion program to promote cooperation in economics, investment, tourism and services between the northwestern province of Lao Cai (Vietnam) and the and the southwestern province of Yunnan (China) in the economic corridor of "Kunming - Lao Cai - Hanoi - Hai Phong - Quang Ninh ".
Domestic goods on display include Thanh Kim wine, Tham Duong sticky rice, Lang Giang eggs, agro-aqua-forestry products, machinery and equipment, and furniture and handicraft products.
During the fair, there will be exchanges between Vietnamese and Chinese businesses and the signing of contracts estimated at US$240 million in total.
The international fair will run until November 18.
Exports to Malaysia up in first nine months
Vietnam earned nearly US$3.76 billion from its exports to Malaysia in the first nine months of this year, up 16.4% from the same period last year, according to the Trade Office at the Vietnamese Embassy in Malaysia.
Computers and electronic products and components topped the list of key exports to Malaysia, fetching US$882 million, followed by crude oil (US$785.3 million), telephone and spare parts (US$501.5 million), rubber (US$367.1 million) and steel (US$147.3 million).
In the same period, Vietnam spent US$3.01 billion purchasing commodities from Malaysia, a year-on-year increase of 23.8%, bringing two-way trade turnover in the reviewed period to US$6.77 billion.
The main goods imported from Malaysia include computers (US$639.3 million), petroleum products (US$363 million), animal and vegetable oil (US$324 million), chemicals and chemical products (US$205 million), crude oil (US$202.6 million) and plastic materials (US$201 million).
As of October 20, Malaysia had 477 valid investment projects in Vietnam valued at US$10.32 billion in total, ranking 8th among 100 countries and territories investing in the nation.
Meanwhile, Vietnamese investors are running nine projects worth more than US$800 million in Malaysia.
Furniture fair promotes locally made products
The Vietnam Furniture and Home Furnishing Fair, called VIFA Home 2013, opened at the Tan Binh Exhibition and Convention Centre in Ho Chi Minh City, on November 14.
It aims to promote locally made furniture, home decor and handicraft products in the domestic market.
VIFA Home 2013, which will run until November 17, is of a bigger scale than last year with the participation of 90 local firms displaying products in 435 booths.
On display are indoor and outdoor furniture, outdoor garden decorations, gifts, souvenirs, support services, handicraft items and lacquerware.
Huynh Van Hanh, Deputy Chairman of the Handicraft and Wood Industry Association of Ho Chi Minh City (Hawa), said sale of locally made furniture and handicraft products in the domestic market has reduced significantly in the past years.
He attributed the decrease to the slowdown property market, which accounted for 40% of the domestic wood demand.
With a stable macro-economy this year as well as the Government's policies to warm up the property market, recovery and growth should be seen from next year, he said.
He hoped furniture sales will recover in 2014 following the government's measures to warm up the property market.
Vietnam, EC step up support of SMEs
Minister of Planning and Investment Bui Quang Vinh and Vice President of the European Commission (EC) Antonio Tajani signed a Letter of Intent on fostering support to small- and medium-sized enterprises (SMEs) in Hanoi on November 13.
Under the document, the two sides will share their experience and policies to support the expansion of the SME sector, as well as enhancing activities to link domestic and EU firms together, with a view to promoting the establishment and development of their linkage clusters and value chains.
Both sides will also work together to raise their technical capacity to assist SMEs, especially in high-tech applications, a strong point of the EU.
At an earlier working session, Antonio Tajani, who is also Commissioner for Industry and Entrepreneurship, said that many EU firms want to do business in Vietnam, adding that 40 business representatives are accompanying him during this trip to seek opportunities.
He said SMEs have contributed greatly to economic development in Europe, and are known for their technological innovations. Therefore, they can help with Vietnam’s economic development.
Minister Vinh noted SMEs, which account for over 90% of the total number of firms in Vietnam, play an important role in national socio-economic development. He declared the Government always pays much attention to facilitating the development of the sector.
Two-way trade turnover between Vietnam and the EU reached more than US$24.8 billion in the first nine months of this year, up 20.8% over the same period last year.
As of September 2013, the club had 1,800 valid investment projects in Vietnam valued at US$32.8 billion including an implemented capitalization of US$13.1 billion.
The EC Vice President is leading a business delegation on a visit to Vietnam on November 12-13 as part of the EU’s efforts to deepen economic relations with the country.
On November 12, he witnessed the inaugural of the EU-Vietnam Business Network (EVBN) in Ho Chi Minh City, aiming to serve as a bridge connecting business communities of Europe, Vietnam and ASEAN region.
US$200 million ODA for Quang Tri’s East-West corridor
he central province of Quang Tri has attracted 21official development assistance (ODA) projects worth nearly US$200 million investing in the East-West Economic Corridor (EWEC) in the 2007-1013 period.
They made up 32% of the total ODA projects and 52% of ODA capital in the province in the reviewed period.
Among the key large-scale projects investing in EWEC are the US$101.6 million Towns Development Project in the Greater Mekong Sub-region (GMS), a US$123.6 million project on water sypply in Dong Ha city and adjacent areas, the US$17.05 million Dong Ha Drainage and Wastewater Collection and Treatment project, and a US$10 million project on water drainage and waste water treatment system upgrade in Quang Tri township.
In addition, more than VND150 billion in ODA was also invested in the infrastructure development of the Lao Bao special trade and economic zone.
Goods prices set for pre-Tet stability
The prices of many key goods would stay unchanged in the months approaching the lunar new year holiday, industry insiders have claimed.
The reason behind this forecast is that people's purchasing power remains weak and essential goods traders still have large inventories, they said.
According to market research from Bien Hoa Confectionery Joint Stock Company (Bibica), growth of purchasing power in the 2014 Tet holiday would represent a relatively low growth rate of 5 per cent against last year.
"Customers would be more selective in purchasing their goods," said Nguyen Quoc Hoang, Bibica deputy general director.
Local producers would be forced to focus on the quality of their goods and keep selling prices stable, he said.
Hoang said that this year, Bibica would increase confectionery output by 5-10 per cent for the Tet holiday, lower than the 20 per cent figure of previous years, in response to the lower purchasing power.
Vu Vinh Phu, chairman of the Ha Noi Supermarket Association, said retail revenues of goods and services in the first nine months of this year rose 5 per cent, a marked dip on last year's 6.5 per cent surge.
The total value of goods for an average supermarket shop currently stands at VND230,000, considerably lower than last year's VND270,000, said Phu, adding that volume of goods had also fallen.
The economic downturn would have a knock-on effect on consumption during the 2014 Tet holiday, Phu said. However, some popular Tet goods such as pork, chicken, vegetables and fruit would likely increase by 5-10 per cent in selling price, while 30 per cent of confectionery would be cheaper due to their large inventories, Phu said.
Ha Noi's demand for certain foods and vegetables could surge by 20 per cent in the month before Tet, the Ha Noi Industry and Trade Department said.
It further predicted that total retail sales of goods and services were expected to increase by 15-18 per cent to VND38 trillion (US$1.8 billion) against other typical months.
PM opens up to world credit ratings
National agencies will provide more information to international credit rating bodies to ensure accurate representations of Viet Nam's economic wellbeing, after Prime Minister Nguyen Tan Dung signed off on a new decision 61/2013/QD-TTg.
Currently, no ministry or organisation in Viet Nam is authorised to provide economic data to ratings bodies, meaning the information they collect is often inadequate and sometimes inaccurate.
Accordingly, information needed to calculate the national credit rating will be handed over, based on recommendations from ratings organisations in accordance with Viet Nam's legal regulations and ability to meet the requirements.
The mentioned information includes general socio-economic information, fiscal data, monetary and banking data, external economic information, plus political and other socio-economic information.
The decision states that socio-economic general information includes mid-term and long-term strategies, as well as annual solutions for socio-economic development.
Data on economic growth, national income, income per capita, savings ratio, investment ratio, inflation, population, jobs and unemployment will also be provided.
Ratings agencies will also be able to access fiscal information such as policy and mid-term financial budget plans; State collection, spending and budget balance data; SOE reforms; Government debts; provisionary Government debt liabilities; public debt and external national debt.
Monetary and banking information on exchange rates, interest, compulsory reserves and open market operation (OMO); performance of the State Bank of Viet Nam, credit institutions and restructuring of the banking system; balance of payments, foreign currency reserves, credit, non-performing loans (NPLs) and strategies to reduce them will also be available.
External economic information covers import-export figures, trade balance and overseas remittances. Political information includes Government policies and directions; Government personnel; Vietnam's relationships with other govern-ment's international financial institutions; administration reform and procedures control.
Under the decision, the PM also calls for stronger co-operation between relevant ministries and agencies to better implement the task.
Relevant agencies will have to report the aforementioned information periodically to the Ministry of Finance, which will be in charge of working with global ratings agencies to sign agreements on providing relevant data and ensuring agencies publicise the country's credit ratings, while making recommendations on the issues at hand.
The finance ministry will also co-operate with Government Offices; the ministries of Planning and Investment, Foreign Affairs and Industry and Trade; the National Committee on Financial Supervision and the State Bank of Vietnam, to meet and provide socio-economic information for international investors, financial and export credit organisations, plus ratings agencies to ease the country's capital mobilisation in the global market and raise the national credit rating.
In addition, the Ministry of Finance is expected to launch a State-run credit rating agency (CRA) next year in a move to create a government-run institution able to reliably rate the country's stocks and companies.
The purpose of the CRA will be to judge how likely it is that a company is able to meet its financial obligations. It is projected to be backed by VND15 billion (US$714,000) in capital and will rate both private and State-owned corporations, as well as financial, banking, insurance and non-financial institutions.
Trade deals can handicap farmers
Six years after Viet Nam gained full membership of the World Trade Organisation (WTO), its agricultural sector still had not taken full advantage of the economic integration, said Deputy Minister of Agriculture and Rural Development Nguyen Thi Xuan Thu.
Thu said the sector had a trade surplus for years, even during economic slowdowns, but still faced challenges. These included low competitiveness and low quantities of value-added products.
Thu blamed this on a shortage of proper studies, planning and legal or technical support - as well as outdated policies.
As part of free-trade agreements (FTAs) signed with 15 nations and economic communities since 1996, Viet Nam has been forced to introduce a tariff-cut road map for farm products. Since signing the biggest of these agreements, the WTO commitment, six years ago, Viet Nam has reduced 1,118 taxes on imported agricultural products, sending the average tax on these goods from 23.5 per cent in 2006 to 20 per cent in 2012.
For example, tariffs on products such as beef, dairy products and rice has been slashed from 10 per cent to zero.
In 2011, Viet Nam continued to reduce import taxes on dairy and confectionery goods. In that year, under the terms of the WTO agreement, foreign enterprises in Viet Nam were also allowed to import and export products on equal terms with Vietnamese companies.
At a workshop held on Wednesday by the agricultural ministry and Beyond WTO Programme, the director of the Institute of Policy and Strategy for Agriculture and Rural Development, Dang Kim Son, warned that agriculture could experience a trade deficit because of these deals.
He said this was likely to happen after 2020 if modern technology and systems were not introduced because tariff elimination would help foreign products enter the country with ease.
Last year, Viet Nam earned US$27.5 billion from exporting farm products, two-and-a-half times higher than in 2006. However, the sector's growth rate has slowed down.
During 2000-06 before Viet Nam joined the WTO, the yearly growth rate was 3.81 per cent, but after WTO accession, the rate fell to 3.26 per cent.
However, according to the agricultural institute, tariff elimination will eventually help lift the export value of four key products - rice, vegetables and fruit, cattle and dairy products as other farm products decline in value.
Meanwhile, the cost of economic integration is being felt as the prices of materials such as fuel and fertiliser increase. This will make production, particularly of fish and aqua farm products, more expensive.
In the past five years, the cost of fertiliser has more than doubled, helping push the cost of producing rice up 120 per cent. The increase in fuel prices have pushed the average cost of farm production up by 35-40 per cent.
Son, the director of the agricultural institute, said that to cope with the impacts of integration, the country needed more investment to process and export agriculture products.
He said that at present, support for farmers and enterprises was mostly concentrated on production. However, they still lacked market information, narrowing access to potential buyers.
He said that more links should be established between farmers and trade enterprises - and that public-private partnerships should be promoted.
According to the report, Viet Nam's sugar sector was hard hit by WTO accession. Eighteen of the 39 sugar factories surveyed were using low-tech automatic production lines, which were far more costly. This fact, together with import tax cuts, meant that sugar could be imported and sold at lower prices.
Do Thanh Liem, chairman of Khanh Hoa Sugar Joint Stock Company, said that the sugar industry provided jobs for about 1.4 million people, most of them low-skilled manual positions. This was a barrier to the introduction of higher technologies.
"Vietnamese farmers are finding it hard to adapt to changes brought about by so much integration, which has caught many of them unaware," Liem said. He suggested more time was needed to prepare for any further changes.
The report Assessments of impacts of implementation of WTO and regional commitment on agriculture and rural development is part of the Beyond WTO Programme funded by the Australian Agency for International Development and the UK Department for International Development.
It aims to strengthen Government capacity to manage Viet Nam's integration into the global economy and its transition to a socialist market economy.
Product quality causes concern for online shoppers
Only 5 percent of online shoppers in Vietnam are highly satisfied with shopping via the Internet, 29 percent satisfied, 62 percent made no comment and 4 percent were unsatisfied, a recent survey revealed.
According to a study carried out by the Ministry of Industry and Trade, product quality is the most worrisome factor when shopping online with 77 percent of those surveyed complaining.
They said that in many cases, the products they received were not as good as the advertised ones they ordered online, according to the survey, which questioned thousands of online shoppers from cities nationwide.
Meanwhile, 40 percent of them doubted the reasonability of prices, 38 percent were not satisfied with the delivery service and 31 percent were worried about the confidentiality of their private information while making online transactions.
Aside from the products themselves, 29 percent of those surveyed complained about the complexity of the online ordering process, while 20 percent questioned the professionalism of websites.
The findings of the survey, entitled "Revision of e-commerce development in Vietnam in 2013", were made public at an international conference on Vietnam – Japan E-Commerce Co-operation held in Hanoi on October 29.
According to the survey, as many as 36 percent of Vietnam's 90 million people are now accessing the Internet, and 57 percent of this are engaging in online shopping.
The most common online products are clothes, footwear, cosmetics, high tech devices, household appliances, air tickets, food, books, cinema tickets, hotel bookings and games.
The ministry in August established a portal to help consumers identify trust-worthy e-commerce sites as well as provide a blacklist of sites that have failed to provide good business practices.
According to the ministry, the portal updates the list of trusted e-commerce websites, which must register to offer e-commerce services and are required to meet standards established by the ministry.
It said customers can see if the websites are labelled with SafeWeb, a standard system in e-commerce transactions in Vietnam. Meanwhile, the ministry last month published a draft on developing e-commerce from 2014-20.
According to the draft, 350 billion VND (16.6 million USD) from the State budget will be used for building a national e-payment portal, developing an integrated e-commerce payment card and an online transfer management system.
The money will also be utilised to help train enterprises in e-commerce and to enable them to participate in trading floors inside and outside the country, building online shopping solutions for small and medium companies, developing e-commerce applications on mobile devices and improving on-line trade marks for Vietnamese products and services.
Vietnam Expo 2013 to expand investment opportunities
The upcoming 11th Vietnam International Trade Fair (Vietnam Expo 2013) in Ho Chi Minh City is expected to open up new investment opportunities for both domestic and foreign enterprises.
More than 300 firms from 15 countries and territories will display their products at the event, scheduled for December 4 – 7.
Running concurrently, the Vietnam Two-wheel Vehicle International Exhibition (Inter Cycle 2013) will provide visitors with new models of bicycles and electric bikes as well as their accessories.
Over the past years, despites the world economic slowdown, Vietnam ’s foreign investment attraction has still seen positive results. According to the ASEAN Business Outlook conducted by the American Chamber of Commerce in Singapore, in the eyes of foreign investors, Vietnam remains an attractive destination in ASEAN.
Since 2008, the country’s FDI has always stood at around 10 – 11 billion USD.
Aquaculture exports buoyed by shrimp shipments
Vietnam earned 4.8 billion USD from aquaculture exports during the first three quarters of 2013, up 6.4 percent against the same period last year, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).
Of the total, shrimp exports top the list with 2 billion USD, almost double the firgure of tra fish.
Thanks to the hike of 2-4 USD per kilogram in export price, the monthly average export turnover of shrimp at from January to September enjoyed a surge of from 19-66 percent year-on-year.
The sharp increase was also attributed to a remarkable decrease in supply to the US after the Department of Commerce’s (DOC) final decision on anti-subsidy duties on frozen shrimp imported from seven countries including Vietnam.
Vietnam’s shrimp export turnover are expected to hit 2.5-2.6 billion USD this year, up 12-16 percent on an annual basis.-
Vietnam’s export structure shifts vigorously
Vietnam has witnessed a relative export expansion in both scale and speed, and seen a positive shift in export structure, helping develop the scale and growth rate of export.
Total export turnover touched approximately 108 billion USD in the past 10 months, higher than the annual figure of the years prior to 2011, the Vietnam Government Portal reported quoting sources from the General Statistics Office (GSO).
The figure was estimated at 131 billion USD for 2013, soaring 14.4 percent against last year, it said, adding that export has demonstrated itself as an outstanding field, a momentum and a gateway for the economy.
Export turnover of raw materials declined by over a third in 2005-2010, according to the GSO. Specifically, crude oil export fell from around 18 million tonnes in 2005 to 9.25 million in 2012 (50 percent) and over 5.94 million in the first 10 months of 2013. Coal export dropped to over 9.8 million tonnes in January-October in 2013 from 32.1 million in 2007 and 15.2 million in 2012.
According to initial statistics, export turnover of raw materials and primary commodities stood at 32.1 billion USD in the first 10 months of 2013, representing almost 30 percent of export revenue, down around 4.5 percent against the same period last year.
Especially, coal witnessed the sharpest decline of 29.1 percent; followed by coffee 23.9 percent; rice 16.9 percent; crude oil 14.2 percent; and rubber 13.7 percent.
Meanwhile, export of processed products valued around 75.9 billion USD, occupying over 70 percent of total export revenue and surging 26.3 percent against the same period last year.
Overseas shipments of telephones and spare parts, computers, chemicals, suitcases, umbrellas, garments and textiles, and footwear were higher than the general growth rate of 15.2 percent.
Of the products, high-tech commodities gained higher growth rate and made up a considerable proportion. The group of product earned over 35.44 billion USD, making up 32.8 percent of total export revenue and picking up 44.2 percent against the same period last year.
The foreign direct investment sector contributed greatly to the shift in export line structure as they mainly operate in high-tech and processing industries.
Experts suggested the domestic sector seize the opportunities and accelerate the development of the support industries in order to generate more jobs and reduce heavy reliance on imports.-
Textile exports weave stellar 2013 performance
Vietnam's textile and garment industry expects to surpass its initial 2013 export target of 19 billion USD by an extra 1 billion USD.
Pham Xuan Hong, deputy chairman of the Vietnam Textile and Garment Association (Vitas), said the textile and garment industry, despite many challenges in production and business, was one of the two industries reaching more than 10 billion USD in export value for this year's first nine months.
Hong said the industry expected to achieve an annual growth rate of 15 percent in export value for the year thanks to the Government's export promotion policies and the textile and garment enterprises' efforts.
As a result, it will add 1 billion USD to its initial export value target to bring the industry's total export value to 20 billion USD for the whole year.
Nguyen An, general director of the Saigon Garment Production and Trading Joint Stock Company, said the company found new partners at a fashion fair held in the US in August and it expected to get new export orders and expand production by year's end.
In addition, the localisation rate for export products has increased to 40-50 percent against the previous year's 20-30 percent, Hong said.
This caused imports of material and sub-materials to fall, an advantage for the textile and garment industry in export activities once Vietnam joins the Trans-Pacific Partnership Agreement, he said.
The industry has paid attention to investment in design, production and new production technology to improve the quality and value of those products.
However, Hong said local producers must compete with rivals from other countries, such as Bangladesh, India and Cambodia, in export pricing due to higher salaries for workers in Vietnam over other countries.
Local producers have also faced difficulties in sourcing and importing material and sub-material for making textile and garment products due to competition with other countries in the region.
The Ministry of Industry and Trade's statistics show that in the first nine months of this year, the textile and garment industry earned an export value of 13 billion USD, up 18 percent from the same time last year.
The US, the EU, Japan and the Republic of Korea are the biggest importers of Vietnamese textiles and garments, with exports to these markets accounting for 49, 15, 12 and 9 percent of the industry's export revenue, respectively.-
Vietnam may fail to reach labour export target this year
Vietnam may fail to achieve their targets for sending 80,000 labourers abroad this year, experts said, forecasting that the situation would improve in coming years.
The Ministry of Labour, Invalids and Social Affairs’ Overseas Labour Management Department, said, in the first ten months of the year, Vietnam sent 70,253 labourers abroad, including 7,496 in October, compared to this year's target of nearly 80,000.
Dao Cong Hai, Deputy Head of the department, said the local labour export market has been extremely slow this year, which came partially from the of South Korea closing its job market to Vietnamese workers, which affected an estimated 13,000 in this country. In the last months of the year, 7,000 Vietnamese labourers would have to be sent overseas in order to to fulfill the goal.
An expert from the labour export sector raised doubts concerning the Overseas Labour Management Department’s statistics between January and October, especially statistics focusing on Vietnamese workers sent to Laos and Cambodia.
According to the department, as many as about 4,550 Vietnamese workers went to Laos to work in the first ten months, and 3,962 to Cambodia. Meanwhile, so far Laos and Cambodia are not listed among the countries which receive Vietnamese workers. “Whether the department has added these two countries to the list to narrow the gap between the real figure and the set target is unknown at this point,” said the expert.
He claimed that if the figures about labourers sent to Laos and Cambodia had to be compared with those countries, Vietnam would have to send an additional 18,258 people abroad to meet the target. In the context of economic difficulties, such a feat would not be easy.
According to a journalistic survey of some labour export firms, despite paying different fees to the companies, many labourers have to continue to wait on administrative procedures to be completed for months. This happens very often in Taiwan and Japan.
For South Korea, an official from the Ministry of Labour, Invalids and Social Affairs has always said that a special memorandum of understanding between Vietnam and South Korea will be signed soon in October. Under the memorandum, South Korea will open its doors to Vietnamese workers again. However, October is over, there have been no new statements about the signing.
Many officials from Vietnamese labour export firms said the situation will not improve in 2014. A general director of a labour export company in Hanoi said, next year the situation will be more intense. It is likely that less Vietnamese will be sent to Japan in 2014, because Japanese companies lowered their quotas for imported labour.
One reason it is difficult for Vietnamese workers to compete with those from other countries, such as China or Indonesia is that the rate of Vietnamese workers who quit before the contract is up is higher than those of other countries.
At the same time, “Airfare from China to Japan is much cheaper that from Vietnam, which is another reason for Japanese companies to choose Chinese laboruers,” the general director said.
Taiwan has opened its doors to Pilipino labourers who tend to be better at foreign languages, workplace skills.
Sanyo gauges plant sale deal
Japanese-owned Sanyo OPT Vietnam is putting its plant in the northern province of Bac Giang on sale.
According to Nguyen Anh Quyen, head of the Bac Giang Industrial Zone Authority, Sanyo OPT Vietnam has officially halted its operations since early this year due to losses, and was negotiating a handover to a new investor.
Another source from the authority, who declined to be named, told VIR the firm was negotiating to sell its assets to a subsidiary of Panasonic, Sanyo OPT Global’s largest shareholder.
Sanyo’s factory opened in 2009 at Quang Chau Industrial Park and produces infra-red detectors. It officially stopped production on January 31 this year, reporting poor operations. Roughly 4,000 workers, mostly female, were put out of work.
According to Quyen, Sanyo was the province’s largest investor and was a good, law-abiding company. The company attached special importance to building a business culture and looked after its employees. Its workforce peaked at 7,000.
In its notice suspending operations that was sent to authorities, general director Hiroyuki Mita said “We very much regret our inability to continue operations in Bac Giang. We have made this decision for reasons that are beyond our control.”
Quyen praised Sanyo’s behaviour despite the shutdown. “Sanyo acted graciously, particularly in supporting the interests of its workers. We will provide as much support as possible in their transfer of the business,” Quyen said.
Under Vietnamese law, a project shall have 12 months to be transferred to another entity since the date of stopping operation. The government can extend the hand-over period to 24 months maximum.
84 delegations to take part in Tea Festival 2013
Eighty-four delegations, including 3 foreign ones, will take part in the Second Thai Nguyen Tea Festival 2013 from November 9-11.
The Festival features a wide range of activities including a tea culture festival, Thai Nguyen tea carnival, a workshop on tea products and investment promotion, and a Miss Tea Land contest.
Particularly, the Miss Tea Land contest will be a highlight of the event.
Concurrently, at this event, two records of Thai Nguyen tea will be announced, namely a national record for “The most popular tea” and an international record for "One of the best gifts in Asia”.
The second Thai Nguyen Tea Festival is held to introduce and honor Thai Nguyen tea and tea growers, tea products and culture of Thai Nguyen tea in particular as well as Vietnamese tea in general.
It will contribute to the preservation and promotion of the tangible and intangible cultural values of Thai Nguyen tea.
Vietnam dong the third best performing currency in Asia
Citing figures from Bloomberg, the CEO of HSBC Vietnam Sumit Dutta said that Vietnam dong was the third among Asian currencies in terms of stability against the U.S. dollar since early this year to August.
He said in a business luncheon with members of foreign associations in Vietnam on Vietnam’s economy on Wednesday in HCMC that many regional currencies took a hard hit after the Federal Reserve (Fed) in late July revealed that they could gradually reduce the pace of the bond-buying package QE3. Emerging markets in Asia and elsewhere saw the wave of foreign outflows, prompting strong depreciation of those countries’ currencies against the greenback.
By August according to information given by HSBC, the Indian rupee had weakened by 15.47% against the dollar, while the Indonesian rupiah depreciated by 12.68%. Meanwhile, Vietnam dong had depreciated by 1.5% against the dollar by August, the third most stable currency behind China’s yuan and Hong Kong dollar.
Trinh Nguyen, an economist of HSBC, said that there were two reasons making Vietnam dong stable against the U.S. dollar over the past year. Firstly, the country’s trade deficit has been narrowed down significantly and Vietnam does not need to depend on foreign capital flows to offset the deficit.
She told the Daily that it was mainly because the Government had maintained such policies as increasing interest rates and controlling credits since 2011 which dampened the domestic demand and also the import demand.
Secondly, foreign capital flowing into Vietnam has been mainly foreign direct investment which is more stable so Vietnam dong has not been affected by the volatile portfolio flows.
Although Vietnam has not been as attractive as other regional countries in luring portfolio investment, but in the positive view, Nguyen said that situation hedged the country against vulnerable portfolio investment.
“In short term, Vietnam is not attractive to foreign investors, but in long term it is attractive as the foreign direct investment has strongly increased this year,” Nguyen said.
She also said that in her opinion, the worst of Vietnam economy is behind now but the best has yet to come. The Government has many things to do such as restructuring the banking system, making effective investment in infrastructure, and improving the business environment.
HSBC forecasts from now to the end 2014, Vietnam dong will gradually depreciate against the U.S. dollar and will hit VND21,250 by the end of this year, and VND21,500 by the end of next year.
Early this week, a report of ANZ on Vietnam’s economy also gave forecast that the foreign exchange rate would be VND21,500 to the dollar by the middle of next year.
HSBC has revised down its projection on Vietnam’s growth this year from 5.5% to 5.2%, while the average forecast of other institutions is 5.4%, equivalent to the target that the Government reported to the National Assembly. The foreign bank revised up the CPI forecast this year from 5.8% to 6.7%.
HSBC also expects Vietnam will have trade surplus of US$600 million in 2013 and trade deficit of US$700 million next year.
While ANZ in the recent report estimated foreign reserves of Vietnam at around US$32 billion, HSBC forecasts foreign reserves of Vietnam would be US$30 billion by the end of this year and US$35 billion by the end of next year.
Local firms have yet to fully tap South Africa market
South Africa is one of the potential growth markets for Vietnam in Africa, which foreign-invested companies gaining increasing access to but Vietnamese peers having not made use of.
Speaking at a seminar on Vietnam-South Africa trade and investment held on Wednesday in Can Tho City, Adrian du Pisannie, first secretary of the South African Embassy, said that two-way trade between the two countries has grown well in the past years with steady export-import turnover rises year after year.
While two-way trade was US$195 million in 2007, it rose to US$623 million last year and is expected to hit US$1 billion in the next one or two years. Vietnam’s export to South Africa reached only US$139 million in 2007 but amounted to US$613 million last year, according to Adrian du Pisannie.
However, Vietnam’s export to the market is mainly contributed by foreign-invested enterprises.
Up to 60% of Vietnam’s exports to South Africa last year were cell phones and electronic products of foreign-invested enterprises in Vietnam like South Korea’s Samsung and some Japanese electronics manufacturers.
According to South African Ambassador to Vietnam Kgomotso Ruth Magau, South Africa’s demand for farm produce and seafood products and for cooperating and investing in this sector is high. However, the export of farm produce from Vietnam to South Africa is quite small.
Explaining the low export volume, Nguyen Truong Thinh, director of Luong Thoi Coconut Processing Company Limited based in Ben Tre Province, said that farm produce exported to South Africa had to meet food safety and hygiene requirements similar to those in the European market.
According to Le Minh Truong, director of Song Hau Food Company, Vietnam’s rice exported to South Africa in particular and to Africa in general cannot compete with Indian rice. “The cost of transporting rice from India to South Africa is only US$40-50 per ton while that of Vietnamese rice is US$80-90,” he said.
Although Vietnam’s farm produce export to South Africa is still limited, this African country is a potential market and can be exploited in the coming time, according to some enterprises in the Mekong Delta.
Since 2010, Luong Quoi Coconut Processing Company Limited has exported 1,000-1,500 tons of grated coconut to South Africa each year and earned US$1.5-3 million.
“We will negotiate with some partners in South Africa to export canned coconut juice,” Thinh said.
PPPs foster sustainable agricultural growth in Vietnam
Public-private partnerships (PPP) may be a good solution to attract private domestic and foreign investment in agriculture in Vietnam, an official has said.
Vietnam has set up a public-private task force on sustainable agricultural growth which has shown considerable results over the past three years.
A meeting was held in Hanoi on November 4 to review the implementation of five commodity working groups after a three-year implementation period. The meeting drew the participation of officials from the Ministry of Agriculture and Rural Development (MARD), international organisations and officials from 15 trans-national groups such as Nestle, Unilever, Pepsico and Metro Cash & Carry.
“This is a really good chance for Vietnamese agriculture and the sector should fully utilised it to intensify cooperation with foreign partners and bring high quality Vietnamese products to the world market,” said Dr. Dang Kim Son, Director of the Institute of Policy and Strategy for Agriculture and Rural Development (IPSARD).
To date, Metro Cash & Carry has built up a fish supply chain in Vietnam. Fish from the Mekong Delta represents 60% of volume of METRO fish assortment.
It has set up the Can Tho fish platform, which serves 19 METRO Cash & Carry Vietnam stores nationwide. It has also trained and certified over 400 farmers and collectors and ensured a basic income for farmers of VND9 million (USD425.83) per month at the peak time.
As Vietnam has a surplus of rice but is still an importer of corn and soybeans, the commodities working group has been lobbying MARD to realise a plan to convert 100,000 hectares of low yield rice fields in the northern mountainous provinces to corn and soybean crops.
In 2013 about 1,000 ha of low output rice land has been covered to corn, specifically in Lao Cai and Yen Bai provinces, providing farmers with incomes five to six time higher than they previously earned.
In the Mekong Delta, the task force has successfully converted 2,200 hectares of rice to corn, and farmers earned VND9 million (USD425.83) per hectare, much higher than what they earned growing rice, just VND2 million (USD94.63) per hectare.
Meanwhile, the tea task force aims to help increase annual tea procurement in Vietnam by Unilever to 30,000 - 35,000 tonnes of Rainforest Alliance (RA) certified tea.
The first phase of the project, from 2011 to 2012, has already helped quadrupled import quantities from Vietnam to 12,000 and improved their quality. They target to export between 30,000 and 35,000 tonnes of fully RA certified tea by 2015.
In order to increase the efficiency of the coffee supply chain, a coffee coordination board was set up on July 31, 2013 with the membership of MARD, Ministry of Industry and Trade, coffee firms, local authorities and coffee growers. The board has helped map out development policies for the sector and desires to create trade promotion programmes.
The Global Sustainable AgroForestry Fund has been working closely with MARD to ensure realisation of the ambitious goals of the 2011-2015 Green Growth Strategy, which aims at transforming Vietnam’s agricultural sector to be able to create a 20% reduction in emissions, 20% reduction in poverty and 20% increase in growth.
“PPPs have the potential to give the development of professional supply chains a boost and ensure sustainable development of all stakeholders,” Son added.
Savills denies Keangnam home owners’ accusation
South Korea’s Keangnam Vina, developer of Vietnam’s tallest skyscraper, has been accused of illegally using Savills to register apartment sales by a group of apartment owners.
Buyers also claimed they had signed purchasing contracts directly with Keangnam Vina, which was confirmed by both sides.
The Ministry of Construction requires every property transaction be made via an authorised transaction centre.
Nguyen Thi Hang Nga, a lecturer at the Justice Institute under the Ministry of Justice and the group’s representative claimed that the transactions between the customers and Keangnam were not valid as they weren’t done via a transaction floor.
She also noted that documents showing the transactions were done via Savills’s trading floor were questionable as at that time, Savills had not even been licensed to open a trading floor.
A representative of Savills, when contacted by VIR, insisted they had followed regulations. Nguyen Dieu Hong, director of the Savills Trading Floor also said the buyers’ claims were untrue.
As the exclusive agent for Keangnam’s Landmark Tower, Hong said Savills signed a Residential Sales Agent contract with Keangnam Vina on January 25, 2008 and provided the contract details and filing number.
“The contract includes marketing and sales, initially provided services, and marketing methods,” she explained.
Accordingly, Savills was responsible for all sales activities and administration procedures while potential buyers directly contacted Keangnam for information, selecting an apartment and signing contracts.
“Savills took part in crucial steps including confirming the selected apartments, requisitioning, preparing and submitting documents, preparing documents on deposits and managing payments,” she said.
The owner group believed it was Keangnam, not Savills as was reported, that signed the required advertising contract announcing apartment sales in Vietnam Economic Times and Hanoi Radio Television. This, they said, violated regulations and they doubted whether Savills was even involved at all in the sale of apartments at that time.
Hong said that the contract between Keangnam and Savills stipulated the latter as the consulting agent for promoting the developers’ products as well as the required notices of sale.
“All advertising costs were signed under the developer’s name and they handled implementation. Savills’ role was consultancy and preparation but all documents were finally signed by Keangnam,” she added.
“According to the contract which identifies Savills as the exclusive sales agent, Savills is responsible for all sales activities. In this case, although customers work directly with the developer, Savills is responsible for organising the procedures mentioned,” she added.