Vietnam, Myanmar increase two-way trade

A conference on trade between Vietnam and Myanmar, held by the Vietnamese Ministry of Industry and Trade and Ho Chi Minh City People’s Committee in Yagon, Myanmar has successfully ended.

The conference attracted the participation of representatives from both countries’ ministries, administrative agencies and businesses working in the field of electronics, , building materials, pharmaceuticals, medical equipment, footwear, garments, cosmetics, chemicals, food processing, plastics, fertilisers, tourism and import-export services.

They also pointed out the potentials of both countries’ potentials and cooperation opportunities in trade, economics, investment and tourism.

In 2009, two-way trade turnover between Vietnam and Myanmar reached US$99 million and jumped to US$129.7 million in the first ten months of 2010. The import-export turnover this year is expected to pass US$160 million.

Forum to boost US investment in southern hub

Business and investment prospects and opportunities for the US in the southern key economic region was the theme of a Vietnam-US business forum held in Ho Chi Minh City on December 16.

The region accounts for 60 percent of the State budget and over 70 percent of the country’s export turnover and is now leading the country in Foreign Direct Investment (FDI) attraction.

At the forum, the Deputy Director of the Ho Chi Minh City Economic Institute, Nguyen Thieng Duc said the region has gain considerable advantage from industry, hi-tech, electronics, information technology, oil and gas technologies and petrochemical products as well as high-end services such as finance and banking, telecoms and tourism.

The Ministry of Planning and Investment said that by August 2010 the US had 544 investment projects in Vietnam with a total registered capital of US$16.4 billion, ranking sixth among 92 countries and territories investing in the country.

In the first nine months of this year, US investment reached nearly US$1.8 billion, accounting for 15.7 percent of the total newly registered capital, and was poured mainly into Ba Ria-Vung Tau, Dong Nai and Binh Duong provinces and Ho Chi Minh City.

Two-way trade between Vietnam and the US has continuously increased over the past years. The US remains Vietnam’s largest export market with an export turnover reaching US$9.1 billion in the first eight months of 2010, up 25. 7 percent over the same period last year.

Vietnam exports mainly garments, footwear, wood and wooden products and seafood to the US, while importing machinery, equipment, cattle feed and materials from the North American country.

HCM City takes lead in e-commerce

An international seminar on e-commerce took place in Ho Chi Minh City on December 16, attracting the participation of businesses, executives and lecturers in the country and abroad.

At the seminar, the first of its kind in Vietnam jointly held by the Viet Trung Hoa Investment and Development Joint Stock Company and Vietnam E-commerce Development Centre, participants discussed how to promote made-in-Vietnam products on international markets through e-commerce, while working on business strategies in line with global development trends.

The participants engaged in an exchange with Vietnamese businesses who are pioneers in applying e-commerce to business and with foreign experts to update information about e-commerce across the world.

The seminar also included direct talks with disabled people who have actively contributed to the development of society in general and to Vietnam’s information technology in particular, such as Le Dan Bach Viet MA, a blind teacher from Nguyen Dinh Chieu school for visually-impaired children, and Huynh Thi Kim Cuc, an IT expert.

Tran Vinh Nhung, Deputy Director of the HCM City Department of Industry and Trade, said businesses in HCM City are taking the lead in applying e-commerce, engaging in e-commerce trading floors and offering a wide range of online services.

However, Nhung said, they are facing numerous obstacles while using e-commerce, particularly regarding security and electronic payment systems.

The seminar provided an opportunity for participants to make suggestions to the HCM City People’s Committee on a plan to develop e-commerce in the 2011-2015 period.

International seminar aims to build tourist destination brands

An International seminar on developing destination trademarks was held in Hanoi on December 16, attracting representatives from the Ministry of Culture, Sports and Tourism and the World Tourism Organization.

Attending the event were also 150 international tourism experts, managers and businesses from the tourism sector, representatives from the Vietnam Administration of Tourism, the Malaysia Tourism Promotion Department, the Netherlands Development Organization, the China National Tourism Administration and some Vietnamese travel companies.

The seminar included a presentation on the role of tourism promotion strategies and tourism promotion departments, and discussed ways of penetrating potential markets and developing tourist destination brands for countries in the region and the world.

Despite the rapid development of the tourism sector in recent years, Vietnam still exposes limitations in comparison with other countries in the region. Therefore, it is essential to find new ways to help the Vietnamese tourism sector achieve international integration.

The seminar will close on December 17.

Vietnam produces its first electric cables for ships

For the first time, a Vietnamese company has been able to produce electric cables for ships.

The Middle Area Construction and Shipbuilding Industry Company (Macshinco), an affiliate of Vinashin Group, officially handed over 20 tonnes of ship electric cables to the Saigon Shipbuilding Industry Corporation on December 16 at the Hoa Khanh Industrial Zone in the central city of Danang.

This success is believed to enable the Vietnamese shipbuilding industry to save foreign currencies for imports of input materials.

With a total investment of US$20 million, Vinashin’s plant for ship electric cables can produce 8,000 tonnes of cables annually.

After five months of operation, it was granted quality certificates by foreign and domestic registration agencies.

Tran Quang Tuan, director of Macshinco, said that the establishment of the plant is of particular significance in the context of Vinashin’s restructuring.

Difficult to fulfill leather and footwear targets 

In the last 11 months, the leather and footwear exports only reached US$4.5 billion, an increase of 25,3 percent over the same period last year. However, the target of US$5.4 billion set for this year is still out of reach.

Authorities say it will be difficult to attract US$1 billion more this December from the leather and footwear exports.

In November, the sector earned US$450 million from export and it is expected to get US$450-600 in December.

Construction of new coffee processing plant begins 

Vinacafé Bien Hoa JSC held an opening ceremony of its third coffee processing plant in Long Thanh Industrial Zone, Dong Nai province on December 15.

The plant covers an area of 5 hectares with the invested capital of VND5 billion. By 2013, it will create more than 600 jobs and double Vietnam’s current soluble coffee output to the world over present.

The Vinacafé General Director said the new plant will help raise the prestige of Vietnamese coffee in the world market.

After 40 years of establishment, the Vinacafé has become a leading manufacturer of coffee products in Vietnam.

Its trademark has been well known not only to domestic but also international consumers, and chosen as one of high quality made-in-Vietnam goods for years and recently as Vietnam’s best product in 2010. It received several other awards such as the Vietnam strong trademark and the Vietnam Gold Star.

Deposit interest rates will not exceed 14 percent per year: SBV

The State Bank of Vietnam has issued a document to ask credit institutions and its branches nationwide to hold interest rates on Vietnam dong deposits at 14 percent.

The rate is expected to take effect on December 15 and will be adjusted in accordance with the inflation situation and supply-demand for capital in the domestic market.

At the same time, interest rates will be listed on public boards at transaction centres, commercial banks’ branches and saving funds under the regulations of SBV.

Under the document, SBV’s branches in provinces and cities were asked to inspect and supervise credit institutions’ interest rates on dong deposits and take measures against those which violate the regulations.

Earlier on December 14, representatives from more than 50 commercial banks nationwide and the Vietnam Banking Association (VNBA) met to agree on adjustments to deposit interest rates and monetary policies in the future. Accordingly, banks agreed that deposit interest rates will be held at 14 percent per year.

Vietnam eyes African markets

Vietnam will use South Africa and Tanzania as export gateways to southern and eastern Africa, a Vietnamese trade official told Tuoi Tre after visiting the two countries this month.

Ly Quoc Hung, head of the Ministry of Industry and Trade’s Africa – West Asia – East Asia Department, said he paid special attention to South Africa which spends half of its total import on food, footwear, and clothing - Vietnam’s core exports.

Tanzania, being a poor country, has to import almost all kinds of goods, he added.

Vietnamese coffee, rubber, footwear, textile and garment, peppercorns, furniture, and plastic products are well liked in these countries, he said.

But he admitted Vietnam faces challenges in cracking the markets: customers there have little knowledge of its products while competition from China, Thailand, and Indonesia will be fierce.

Vietnamese firms need to carefully research the markets and undertake trade promotion to penetrate them, he said.

Understanding the countries’ culture and consumer behavior are vital, he pointed out.

The firms should keep in touch with the Ministry of Industry and Trade and Vietnamese representative agencies in those markets to get updates and other information.

Trade between Vietnam and South Africa, which was worth US$378.32 million last year, topped $500 million in the first 10 months this year, a 25 percent rise.

With Tanzania, bilateral trade was worth $67.9 million last year, a 41 percent increase over 2008. It jumped to $72.1 million in the first three quarters of this year.

Vietnam Airlines links southern hub with Beijing

Vietnam Airlines began a direct service between Ho Chi Minh City and Beijing Thursday.

The carrier will operate thrice weekly on the route using Airbus 321 aircraft.

It said it will offer a promotional fare of VND5.8 million (US$299) for bookings made until December 31 for travel until January 31.

Vietnam Airlines already has a direct service to the Chinese capital from Hanoi.

Nielsen names Vietnam’s top 10 brands

Half of Vietnam's top ten brands in 2010 are domestic, an encouraging sign compared to only two in the list last year, according to a recent survey by Nielsen Vietnam and the Singapore-based Campaign Magazine.

The November survey on over 1,000 Vietnamese consumers within the age bracket of 15 to 45 and with a minimum monthly income of VND3 million revealed that MobiFone, Vietcombank, Saigon Co.opMart, Viettel, and Vinamilk has made the list this year.

Only Vinamilk and Viettel were in the top ten list last year.

Topping this year’s list is Honda. With the motorcycle market of about 20 million users, it is the first choice for Vietnamese consumers when it comes to acquiring a two-wheeled vehicle for personal transportation.

In second place is Nokia. The Finnish brand continues to be the top choice for Vietnamese consumers in all market segments, from economy to premium, despite fierce competition from new brand names on the market such as iPhone, Blackberry, HTC, Samsung, and Q mobile.

French-owned hypermarket chain Big C ranks third, followed by MobiFone, Vietcombank, Saigon Co.op Mart, Viettel, Sony, Vinamilk and Coca-Cola.

The consumer market of Vietnam in the next 10 years will be very encouraging, said Darin Williams, executive director of Nielsen Vietnam, who is quoted by the Singapore-based Campaign Magazine as saying.

Given the ever increasing income per capita of the Vietnamese population, they are expected to spend more on goods and services such as health, beauty and electronic products.

The number of subscribers to 3G, cellular and Internet services in Vietnam is also expected to boom in the next few years.

Works starts on Vinacafe’s new instant-coffee plant

Vinacafe Bien Hoa Joint Stock Co Wednesday started construction of an instant-coffee making plant in southern Dong Nai Province.

The VND500 billion (US$25.6 million) plant at Long Thanh Industrial Park, the company’s third in the area, is equipped with European technology.

The plant will have a capacity of 3,200 tons a year when it is expected to open in the first quarter of 2013; most of it will be mainly for the domestic market.

Corporate governance under par in Vietnam: report

Corporate governance (CG) in Vietnam falls short of global standards in areas of transparency, board’s responsibility and stakeholders’ role in CG, according to a recent survey.

According to the latest Vietnam Corporate Governance Scorecard, a publication released by the International Finance Corp (IFC), CG practices at local companies are mainly driven by regulations, leaving extra-legal issues, such as those relating to external auditors and stakeholders’ profits, poorly attended to.

By surveying 100 biggest companies listed on Hanoi and HCMC bourses and using public information, including annual reports and financial statements, the Scorecard reveals that CG practices in Vietnam are below average.

Most firms satisfy only 50 percent or less of international standards when measured against five criteria - shareholders’ rights, equitable treatment of shareholders, stakeholders’ role in CG, disclosure and transparency, and board’s responsibilities.

Accordingly, the best compliance with Global Good Practices’ standards falls in the area of “equitable treatment of shareholders” (65.1 percent).  

The lowest compliance is in “role of stakeholders” (29.2 percent). Other subpar domains include “disclosure and transparency” (39.4 percent) and “board’s responsibility” (35.3 percent).

The report reflects the current situation of Vietnamese companies that have a mere basic knowledge of CG, according to Vietnam State Securities Commission which assisted in the survey.

The publication aims at improving Vietnam's corporate governance standards and practices as well as raising awareness and standards of international corporate governance and disclosure practices.

It seeks to develop a benchmark of CG practices by exploring firms’ compliance with laws and regulations, including local governance regulations and globally recognized practices.

"Vietnamese companies with good CG are better positioned to attract external financing, increase profitability, and hire and maintain a quality workforce," said Simon Andrews, IFC Regional Manager for Vietnam, Cambodia, Lao, and Thailand.

"We expect that the scorecard will help both the public and private sectors adopt transparent, timely, and standardized practices that will enable them to integrate into an increasingly selective and competitive global market."

IFC is a member of the World Bank Group.

Russian airline begins Nha Trang service

Vladivostok Air, one of the largest carriers in Russia's far east, Wednesday began operating flights from Vladivostok and Khabarovsk to Nha Trang on Vietnam’s central coast.

There will be six monthly flights in either direction between the two cities in Russia and Cam Ranh International Airport.

From Vladivostok, the service will operate on two Wednesdays and Thursdays every month and from Khabarovsk, it will operate on two Thursdays a month.

Nearly 10 four-five-star hotels and tourist sites in Nha Trang have promised to cut prices by 20 percent to 50 percent for Russian tourists arriving by these flights.

A round trip from Vladivostok to Cam Ranh will cost from 25,744 rubles (US$ 835) while the Khabarovsk-Cam Ranh fare starts at 28,774 rubles ($933).

Securities watchdog flags crackdown on fraud

The State Securities Commission is again turning the scanner on possible manipulation of stock prices following its first ever probe recently which was followed by the arrest of a suspected manipulator.

A source at the watchdog said one case that will be investigated is the unusual fluctuation in the share price of the Hanoi-listed An Phat Plastic and Green Environment Joint Stock Company between August 18 and September 16.

Rumors that a Japanese company wanted to invest in An Phat sent demand for its shares surging to VND91,400 (US$4.7) from VND 44,500. A major shareholder then sold three million shares and the price collapsed.

An Phat rejected allegations of manipulation, including rumors the drop was precipitated by directors dumping their shares, instead blaming it on uncontrollable external elements.

Two other shares that will come under scrutiny are the Ho Chi Minh City-listed Ha Tien Transport Joint Stock Company and the Hanoi-listed Cai Lay Veterinary Medicine JSC – MEKOVET.

The “pump and dump scheme,” one typical trick used by manipulators, refers to spreading news of an impending acquisition of a company to inflate the price of its stock.

Le Van Dung, former chairman and CEO of the HCMC-listed Vien Dong Pharmaceutical Joint Stock Company, who became the first to be arrested in Vietnam on suspicion of stock manipulation, allegedly employed this strategy.

He was taken in last month on charges of creating false demand for the stock of Ha Tay Pharmaceutical Joint Stock Company in which he has a major stake.

Together with his associates, he reportedly opened different trading accounts in the names of family members and friends to buy the stock, jacking up its price all the way to VND100,000 from VND30,000, before dumping the whole thing after a rumored acquisition.

Many unwary investors lost a lot of money.

Nguyen Kim Phuong, who once held an 8.5 percent stake in the Hanoi-listed Cement Materials and Transportation Joint Stock Company, also allegedly committed such a fraud.

In February she bid to buy its newly-issued shares, creating artificial demand. After the price rose, she secretly unloaded her own stocks without buying anything.

She earned big bucks, insiders revealed.

An official from the Commission admitted that the regulator is unable to stop stock manipulation.

But Dung’s arrest has set a precedent for future clampdowns and given manipulators some food for thought, the official added.

Four people have been arrested in the Vien Dong case, including its CEO, deputy CEO, a board member, and a shareholder.

Vietnamese consumers top Asia confidence index

Vietnam consumers are more optimistic about economic growth and new jobs next year than their counterparts in other fast-growing emerging economies in Asia, according to a survey by TNS Vietnam.

The market information company’s TNS AP Temperature found 48 percent of 500 respondents saying the economic and employment situation in Vietnam is positive, a higher proportion than in China, India, and Indonesia.

Asked about Vietnam's prospects next year, 68 percent of respondents were hopeful the economic situation will be better, while 69 percent expected new jobs to be created. These rates are also higher than in the three countries.

Ho Chi Minh City’s efforts to achieve 12 percent growth in 2011 is a good sign for consumer confidence in the growth prospects of Vietnam since this city is a spearhead of the economy, Ralf Matthaes, managing director of TNS Vietnam, said.

The per capita GDP of the city is expected to stand at US$4,800 by the end of 2015 compared to over $2,800 estimated for this year.

In the last two years Vietnamese consumers have been more cautious with their spending, tending to buy reasonably-priced rather than expensive products.

According to TNS Vietnam, Vietnamese consumers will spend more in 2011, especially on expensive products, but will remain careful when making buying decisions.

Vietnam's tea makes global recovery

The price of export tea has recently increased after experiencing a two year down turn, according to the Vietnam Tea Association (VTA).

"After two years, the price has increased. In the first 10 months of this year, the average tea price was more than $1,460 per tonne, an increase of more than 11 per cent over the same period last year," said Tran Van Gia, deputy chairman of the VTA.

In Thai Nguyen province, the northern tea hub, the price currently stands at about VND70 million ($3,500) per tonne, a year-on-year increase of roughly 20 per cent, and the price of higher-quality tea is much more, at between VND90 million ($4,500) and VND120 million ($6,000) per tonne.

"Vietnam's tea has become highly regarded in the world market. Its price has reached the regional level," Gia said.

"The price will continue to increase strongly, especially for the coming Lunar New Year Festival," he added.

Thanks to the higher price, the total tea export turnover for the first 11 months of 2010 increased by 11.5 per cent year-on-year to $182 million, a significant increase given that the export volume during that time only increased by 2 per cent to 125,000 tonnes.

"Vietnam's tea industry has earned this reward because it has worked hard to improve quality and ensure food safety," Gia said, adding that the industry had held training course for farmers to help them improve their produce.

Vietnam is the fifth largest exporter of tea in the world, exporting to 110 nations and territories. The "Che Viet" trademark is registered and protected in 70 markets.

Tea has played an important role in eradicating hunger and reducing poverty. About 6 million people in Vietnam work in the tea industry.

High interest rates exaggerate enterprises’ burdens

High lending rates have cast big impacts on Vietnamese enterprises’ export contract negotiations.

Phuoc Long Textile’s Business Department head Bui Thi Kim Phuong said local businesses had found it hard to negotiate with foreign partners in price terms to seize export contracts.

“Foreign partners are very careful in price negotiations. Formerly, we used lending rates of around 12-13 per cent per year when negotiating export contracts. With current [lending] rates, we cannot win the export contracts,” Phuong said.

Deputy chairman of the Ho Chi Minh City HandicraftandWood Industry Association(HAWA) Tran Quoc Manh said businesses would face stagnant production if current high lending rates continued.

“At a time when lending rates are soaring, businesses are in high gear for completion of year-end export orders, driving them into a financial distress and adversely affecting production,” Manh said.

In this situation, Manh said that some export companies had decided to source US dollar loans with lending rates of around 7 per cent, per year, but it was not easy to access to US dollar loans.

General director of Vinh Thong Footwear Company Nguyen Quoc Tuan said his company had accessed to US dollar loans after seeing the lending rates on dong loans surging above 14 per cent, per year.

Tuan, however, said businesses would prefer dong to dollar loans if the government took measures to drive the lending rates down to reasonable levels because they still used local currency to buy domestic materials.

Current lending rates fluctuate between 20.5-21.5 per cent for dong loans and around 8-9 per cent for US dollar loans. However, sourcing dollar loans may be risky in the long term with exchange rate adjustments, he said.

PV