Seminar discusses product development

 

Developing lines of new, high-quality products at reasonable prices would give Vietnmaese businesses a competitive advantage, said participants at a seminar yesterday in HCM City.

For example, the Dien Quang Lamp Joint-Stock Company began making compact lamps that can be used in humid environments following months of research and testing, said Tran Quoc Toan, deputy general director of the company.

Compared with incandescent bulbs, the lamps were more energy-efficient and durable, he said, adding that many farmers, who typically use incandescent bulbs, wanted to buy the new product.

The seminar is part of the "Tiep suc hang Viet" (Improving Vietnamese Goods) programme organised by Tuoi Tre newspaper, the Viet Nam Dairy Products Company (Vinamilk) and the Business Study and Assistance Centre.

The programme helps the local business community develop new products and improve competitiveness for Vietnamese-made products in the domestic market.

Bui Thi Huong, foreign affairs director of Vinamilk, said the company had developed new products with high quality and competitive prices.

It also worked with foreign partners in research and development of nutritious products targeted for the Vietnamese market, especially for infants.

During periods of "price fever", consumers tend to choose affordably priced products that have similar quality to imported ones, she said.

Price, quality, marketing and distribution were the most important factors in developing new products, said Nguyen Quoc Khanh, Vinamilk's executive director for product production and development.

Consumers were usually most concerned about price, he said, adding that companies should use advanced technology in production and cut all unnecessary costs.

Besides focusing on developing products that ensure food hygiene and safety standards, marketing and distribution strategies were also important, he said.

Vinamilk last year achieved a growth rate of 49 per cent, with more than VND16.8 trillion (US$802.6 million) in turnover, Huong said, adding that the company expected to achieve a revenue of $1 billion this year.

Representatives of other businesses, including Tai Ky Food Flour Corporation, Bich Chi Food Company and Thao Huong Co Ltd, also spoke about their efforts to conduct research and develop new products to maintain market competitiveness.

Better State supervision, transparency would reduce mining industry losses

 

The Government should strengthen institutions and policies as well as improve the transparency of mining activities as an effective way of reducing industry losses.

Speaking at a conference on the Extractive Industries Transparency Initiative (EITI) and Viet Nam's Ability to Participate in the Initiative held in Ha Noi on Thursday, deputy director of the Constancy on Development Institute (CODE) Pham Quang Tu said transparency in the industry could help the country benefit more from mining.

Deputy head of the Viet Nam Chamber of Comerce and Industry (VCCI)'s Legal Department Dau Anh Tuan said the mining industry would tackle illegal exploitation in a bid to preserve oil and coal supplies.

Lax State supervision meant that illegal exploration and mining was occurring in many provinces by companies with little experience or knowledge of the industry, complained Tuan.

Laiï Hong Thanh, deputy chief of the office of the Natural Resources and Environment Ministry said according to the law on minerals, revenue from the sector was subject to a mineral tax. However, companies had been declaring false figures to authorities regarding their mining yields, except for oil which was monitored and controlled.

VCCI's deputy general secretary Tran Huu Huynh said transparency in the industry would be an important way of managing and using mineral resources effectively. In addition, it would attract more sustainable investment and force foreign enterprises to publicise their accounts, he said.

The State budget would benefit from more efficient mining activities and it would build people's trust in the Government and confidence in investors.

Experts said that admission to the EITI could help Viet Nam limit losses and ineffective mineral exploitation.

"In particular, the country's participation in the EITI would help boost national confidence in transparency and the fight against corruption," Huynh said.

However, researchers also predicted that the implementation of the EITI in Viet Nam would be difficult, due to regulations regarding human resources and financial issues.

Le Van Khoa, director of CODE, said the country should focus on strategic minerals which contributed considerably to GDP including oil and coal.

Participants also said mining exploitation rights should be auctioned to ensure sustainable development.

EITI participation is considered an option for the sustainable development of the mining industry using environmentally friendly technology.

Reports from the institute showed that Viet Nam had a lot of mining potential, with large deposits of bauxite, titanium and rare earths, along with extensive oil and gas reserves.

The industry's contribution to the country's GDP increased from 4.81 per cent in 1995 to 11 per cent in 2008, while the petroleum sector contributed 24.37 per cent to the State budget in 2008 and the value of mining exports reached US$8.5 billion in 2009.

"Viet Nam needs to develop its mining industry because it is time for the country to take advantage of its rich mineral resources," Tu said.

Viet Nam has already approved the Construction Sector Transparency Initiative and the Integrity and Transparency in Business Initiative for Viet Nam.

The EITI is an initiative based on a voluntary alliance between governments, companies, social and international organisations to enhance transparency in the mining sector.

The EITI is based on two main mechanisms. Mining companies must make comprehensive reports on expenditure for governments, while governments must publicise the revenue it receives from the companies. An independent agency then compares the data.

Over 30 countries were participating in the EITI as of May 2010. Over 50 of the worlds largest mining companies approve of the commitments outlined in the initiative.

HSBC offers discounts for credit card holders

HSBC Bank (Viet Nam) Ltd (HSBC Viet Nam) is offering HSBC credit-card holders discounts of 30 to 50 per cent at hundreds of leading merchants across Ha Noi and HCM City.

Its Red Weekend Promotion takes place on the third weekend each month.

DongA Bank wins Viet Nam Strong Brand 2010 Award

The joint-stock DongA Bank has been granted the Viet Nam Strong Brand 2010 Award by the Trade Promotion Agency (Ministry of Industry and Trade) and the Vietnam Economic Times.

The bank successfully completed its 2010's key targets, which included a capital increase to VND4.5 trillion (US$220 million) and its asset growth to VND55.873 trillion.

Last year's outstanding loans rose 11 per cent to VND38.5 trillion and mobilisation went up over 31 per cent to VND47.756 trillion.

Its profits totalled VND858 billion.

Property service provider joins hands with China firm

China's Hopefluent Properties Group on Thursday signed a franchise contract with Compareal, a property services company in Viet Nam.

Under the contract, Compareal will provide real estate services under the brandname of Hopefluent in Viet Nam, according to Compareal chairman Huynh Du An.

His company will also employ the foreign partner's business model and experience in its operations.

Hopefluent Comparreal provides consultancy on project planning, marketing and sales strategy consultancy, property evaluation and management, among others.

US group eyes central region airport projects

The US-based Cedona Group has submitted a proposal to the Ministry of Investment and Planning to invest in airports in central Viet Nam in the form of public-private partnership.

The Cedona Group is a consultant for the consortium of Canada-based Airport Development Corporation and US-based HAS Development Corporation.

Proposed airports include Chu Lai in Quang Ngai Province, Phu Bai in Thua Thien - Hue Province, Da Nang in Da Nang City, Tuy Hoa in Phu Yen Province, Quy Nhon in Binh Dinh Province, Pleiku in Gia Lai Province and Cam Ranh in Khanh Hoa Province.

The airports had a great deal of potential, said the Cedona group.

The group also said that the investment was in line with Viet Nam's development plans.

Kim Long Securities fails to make quorum

Kim Long Securities Co failed to secure a quorum for its second general shareholders meeting yesterday.

Only 28.55 per cent of shareholders attended, according to a source present at the meeting, while the Law on Securities requires a minimum quorum of 51 per cent.

The firm, which recently stirred controversy for announcing last month its withdrawal from the brokerage business only to subsquently reverse the decision, will now convene a third meeting next Thursday, which will not be subject to a quorum requirement under the law.

KLS shares yesterday closed unchanged at VND9,600.

Trading suspended in shares of plastics maker

Trading in shares of Tan Hoa Plastics Co (VKP) will be suspended on Monday due to consecutive losses in 2009 and 2010, under a decision by the HCM City Stock Exchange.

The company suffered a loss of VND35.7 billion (US$1.7 million) last year and a loss of about VND50 billion in 2009.

The exchange will consider a resumption in trading once the company has submitted an explanation and plans to return to profitability.

PetroVietnam Insurance meets targets

Ha Noi-listed PetroVietnam Insurance (PVI) yesterday announced first-quarter earnings totalling VND1.4 trillion (US$66.7 million), an amount equal to 25.8 per cent of the year's target and representing a year-on-year increase of 22.8 per cent. Of the total, earnings from insurance premiums accounted for VND1.1 trillion (US$52.4 million), while earnings from non-insurance activities totalled VND136 billion ($6.5 million) and returns on financial investmens, VND135 billion.

The company's shareholders yesterday approved a business target for 2011, including earnings of VND4.9 trillion ($233.3 million) and a profit of VND420 billion ($20 million), on which it will pay a 15-per-cent dividend.

It also plans to increase charter capital from VND1.59 trillion ($75.7 million) to VND1.8 trillion.

Import-export company offers shares to staff

Tan Binh Import Export Co (TIX) would offer 1.2 million bonus shares to employees this month at a 1:1 ratio, the company announced, setting Tuesday as the final day to register for the bonus shares.

A 15-per-cent dividend will also be paid on May 4.

TIX has set an earnings target of VND885.9 billion (US$42.2 million) this year, up nearly 21 per cent compared with 2010. It has targeted net profits of VND93.8 billion ($4.5 million), an increase of 24 per cent.

BIDV Insurance to list shares in HCM City

 BIDV Insurance will list on the HCM City Stock Exchange later next month. The company, which has a charter capital of VND660 billion (US$31.4 million), made its initial public offering last August, in which 11.5 million shares were auctioned at an average price of VND11,225 per share.

 

Imported looms boost textile industry

 

The demand for imported textile machines is increasing because few are being made in Viet Nam and the industry is growing, says former chairman of the Viet Nam National Textile and Garment Group Le Quoc An.

However one of the major difficulties with imported machines was the high price, An said.

"Many companies have shifted to buying from Asian suppliers who offer more affordable machines."

Textile machines exported to Viet Nam last year by Germany, a typical supplier, increased 114 per cent in value compared to 2009, reaching 34 million euros (US$23.13 million), of which 30 million euros ($20.4 million) was for spinning machines.

"Production lines in a textile company may require 200,000 different machines, costing around $200 million, a lot of money," An said.

Textile equipment from Germany, France and Japan were of good quality but they were really expensive.

Expanding international co-operation to make the most use of technology from other countries was one of the solutions proposed by the Viet Nam Textile and Apparel Association.

Two expos this month had given access to modern machines and technology from foreign countries with explanations of their technology and capacities without the need to go abroad to learn about them, the association said.

At the Vietnam Saigon Garment and Accessories Machinery Expo 2011, companies were able to buy weaving and industrial sewing machines directly from foreign firms.

And the recent German Technology for Vietnamese Textile Industry expo provided useful information about the latest developments and technological solutions.

The Vietnamese textile industry has seen a strong growth, with $11.2 billion of export turnover last year, up 29 per cent compared to 2009, which had made Viet Nam a destination for exporters of foreign textile equipment.

Businesses urged to exploit trade protection remedies

The local business community must develop expertise in trade protection remedies such as anti-dumping and anti-subsidy measures to prevent unfair competition from importers, experts said at workshops held in HCM City and Ha Noi this week.

Prof Claudio Dordi said EU-Viet Nam anti-dumping cases were primarily caused by the fact that Viet Nam was classified as a non-market economy by EU and the US.

Viet Nam was also used by foreign companies to circumvent Chinese trade tariffs, he said.

Dordi is technical assistance team leader of MUTRAP III, a multilateral trade assistance project in its third phase implemented by the European Commission to help Viet Nam prepare for, carry out and follow up on World Trade Organisation (WTO) commitments.

Because of Viet Nam's status as a non-market economy, the EU and US required that business decisions and costs of Vietnamese firms be based on the market, and there must be no State interference, he noted.

Vietnamese companies are required to have clear accounting records, according to International Accounting Standards (IAS), and they must show legal stability under bankruptcy and property laws.

In addition, currency exchanges must be carried out at the market rate.

James Lockett of the law firm Baker&McKenzie Viet Nam Ltd said the catfish anti-dumping lawsuit brought by the US against Viet Nam in 2002 was highly significant. But a number of even larger anti-dumping cases against Viet Nam had originated in the EU.

These have involved Viet Nam exports of integrated electronic compact fluorescent lamps, ring-binder mechanisms, zinc oxide, and footwear with leather uppers.

Lockett said businesses should develop a quick response when they were charged with dumping, and should be counseled by professional trade counsels or lawyers.

He said proper strategies, real evidence and persistence to follow each case, among other factors, were important criteria in fighting anti-dumping lawsuits or charges.

Dordi said in the case of footwear, six Vietnamese businesses failed to meet several criteria, including having proper accounting records.

"Four businesses were under obligation to export all or a significant part of the production, while the other two were entirely State-owned, one with a direct management link with the State," he said.

Three of the businesses had no records, and the records of the other three were not in line with International Accounting Standards.

Vu Ba Phu, deputy director of the Viet Nam Competition Agency, encouraged business associations and companies to develop anti-dumping petitions to prevent unfair competition from importers to Viet Nam.

"Businesses can create a petition with careful counsel from experts and agencies, collect strength from domestic partners, and gain consensus in an association," Phu said, adding that they should be persistent in chasing the pertinent cases.

The workshops, held by MUTRAP III and the Viet Nam Competition Agency on April 14-15, also included Korea Trade Commission delegates who spoke about their experiences with anti-dumping issues.

Banks fumble over timing for listing

The developments of the stock market and the unsatisfactory national economic situation are making commercial banks think twice before deciding on the time for their listing although many listing plans have been approved at their shareholders’ meetings.

The Dong A Bank Board of Directors once again put its listing plan on the table at the annual shareholders’ meeting on March 12, after this plan was unable to be implemented late last year when the stock market was facing many difficulties.

Now, the bank plans to list its shares on the Ho Chi Minh Stock Exchange (HoSE) in the fourth quarter of this year.

Dong A Bank General Director Tran Phuong Binh said that the decision aims to create conditions for the bank to complete the raising of its chartered capital to VND6 trillion from the current VND4.5 trillion, including VND900 billion to be sold to foreign partners, before it offers shares to the market.

The Military Commercial Joint Stock Bank (MB) also decided to suspend its listing due to unfavorable developments in the second half of last year though it had got the State Bank approval for its listing on HoSE in the second quarter of 2010.

“We will continue making preparations and selecting an appropriate time for listing,” said MB Deputy General Director Cao Thi Thuy Nga.

Despite finishing its plan to raise chartered capital to 3 trillion VND under its roadmap, Western Bank still proves to be cautious about its listing. According to the bank’s leaders, the listing will be only implemented if market conditions are favorable.

At present, six banks are listing shares on HoSE and HNX, including STB, VCB, CTG, EIB, ACB and SHB. In the context of the declining stock market, these banks’ shares see few transactions and the situation is predicted not to improve immediately due to unsatisfactory economic developments.

Experts said that prices of banking shares are yet to recover and may decrease due to the massive issuance wave of banks.

Builders hit by material price rises

The recent increase in prices of building materials has caused financial difficulty for building contractors and individuals building their own homes.

The price of most building materials, including cement, steel, bricks, paint and interior decorations, increased by 10-20 percent this month over last month, building-material traders said.

This was not the first increase after Tet (Lunar New Year), they said, adding that in late February, the prices had risen by 20 percent and up to 30 percent for certain items compared to the end of last year.

The increase in transport and input costs have pushed up prices of building materials, they said.

Nguyen Van Tu, owner of a furniture shop on To Hien Thanh Street, said higher prices of imported wood materials, additives used in furniture-making, and an increase in workers' salaries had increased prices by 10-20 percent of furniture products, including wooden doors, kitchen cupboards, wardrobes and others.

Lam Cong Tan, owner of a plywood shop on the same street, agreed with Tu saying that price of rubber wood, medium-density fiberboard and other kinds of wood also increased by 5-10 percent this month.

A representative of a company that distributes decoration lights imported from China said prices had gone up by 15-30 percent recently.

For example, small lamps cost between VND100,000 and VND150,000, medium lamps, VND350,000 to VND450,000 and high-end lamps, VND500,000.

She attributed the price hike to the higher exchange rate and transport costs.

Hoang Thanh Binh, director of the Vietnam Project Co Ltd, said building material prices as well as labour costs had increased dramatically since the beginning of the year.

The main builders' salary increased to VND220,000 per day compared to VND180,000-200,000 per day as before, while the cost for an assistant builder currently stands at VND150,000-170,000 per day.

This means that building one square meter of housing floor now require up to VND3 million instead of only VND2.6 million as before, he said.

Costs for house design and decoration had also increased, which led to higher prices in construction contracts, he added.

One resident in Binh Thanh District said he had to pay an additional VND150 million ($7,166) compared to his initial construction estimate for building a three-storey house.

Steel prices are expected to fall slightly in the second quarter of the year due to oversupply and low demand, according to the Vietnam Steel Association (VSA).

Steel consumption volume in March from VSA members fell by 30.79 percent over the previous month, partly because steel trading companies bought less steel to stock, said VSA.

In addition, the Government's slashing of public spending also contributed to pulling down steel demand, it said.

Bank seeks foreign investors

 

The joint-stock Vietcombank (listed on the HCM City Stock Exchange as VCB) plans to have strategic foreign shareholders via private placement by the end of this year or early 2012.

More than 492 million new shares, or 20 per cent of its total, are expected to go to foreign buyers, who are expected to be banks, financial institutions and global investment organisations that want to expand operations in Asia, particularly in Viet Nam.

Foreign buyers are expected to have successful investment experience, a financial capacity of at least regional scale, among other items, which will support the bank's development.

The bank, however, has not disclosed information about the potential buyers.

The price for private placement will be negotiated based on advice from international financial consultancy so that the bank and shareholders benefit and laws are met.

The private placement is a part of the bank's plan to increase its charter capital by 40 per cent to over VND24.622 trillion (US$ 1.172 billion) from the current VND17.587 trillion.

For this year's second quarter, VCB will issue 211 million shares to pay dividends to shareholders, who will receive 12 for every 100 equities they own.

The issuance plan was released on Wednesday at the company's annual shareholders meeting.

Central bank raises interbank forex rate

The State Bank of Vietnam (SBV) Friday raised the average interbank forex rate for the weekend to VND20,728 a US dollar, rising VND5 a US dollar from VND20,723 a US dollar set on Thursday.

Accordingly, the ceiling forex rate for commercial banks will be VND20,935 a US dollar.

On Friday morning, Eximbank listed the US dollar buying price at VND20,910 and selling price at VND20,930 a US dollar. The respective prices at Asia Commercial Joint Stock Bank (ACB) and Vietcombank were VND20,920/VND20,930 and VND20,925/VND20,930 a US dollar.

The interbank forex rate saw the highest level of VND20,723 a US dollar on three days, Monday, Wednesday and Friday since early this week.

Tuoi Tre reporters have found that the US dollar buying price at HCMC-based banks was higher than the price in the free market.

The US dollar buying price on late Wednesday in the free market in HCMC was about VND20,900-20,910 a US dollar, while at some banks such as Vietcombank and ACB, the buying price was VND20,925 and VND20,920 respectively.

The US dollar selling price in the free market was about VND20,950-21,000 a US dollar.

EU free-trade pact requires thorough preparation: expert

Viet Nam should prepare thoroughly before signing the planned free trade agreement (FTA) with the EU as it is the biggest market for the country's exports, experts have said.

"A free trade agreement between Viet Nam and EU will boost bilateral trade and investment from the EU, but serious studies should be conducted to ensure that the country benefits and that we have proper solutions for the issues emerging from the FTA," said Prof Nguyen Mai, chairman of Viet Nam Association of Foreign-Invested Enterprises (VAFIE).

Prof Mai spoke at a workshop held yesterday in HCM City by the EU-Viet Nam Multilateral Trade Assistance Project (MUTRAP III), VAFIE and the National Committee on International Economic Cooperation.

This would be the first bilateral FTA signed by Viet Nam. The six previously signed FTAs were multilateral, including ASEAN-China, ASEAN-Japan and ASEAN-India.

Prof Mai said the country was inexperienced in dealing with such an FTA, which is influenced by both economics and politics.

In addition, negotiations for the FTA after the post-financial crisis would be difficult because the government has focused on the domestic market economy, which at times needs protectionism, he added.

Prof Claudio Dordi, MUTRAP III's technical assistance team leader, said it was necessary that the Government identify several strategies to eliminate obstacles and trade barriers among partners.

"Viet Nam should expect the EU to lower tariffs on Vietnamese products, and Viet Nam should also lower tariffs to benefit from cheaper European imports of technology and high-quality materials," he said.

In this context, Vietnamese enterprises would become more competitive over the long-term, and the EU would likely increase investments in the country.

"The EU has different reasons to conclude an FTA with Viet Nam," Dordi said, adding that an FTA targets investments in ASEAN and other Asian countries and gives EU service-providers and investors more access to Asia.

Truong Dinh Tuyen, former minister of trade, said an overview of the Viet Nam-EU FTA could not yet be defined because the two parties had not entered into significant negotiations.

The EU should ensure that "a slow roadmap be created in opening trade or service markets, just like the World Trade Organisation (WTO) commitments, according to the principle of special treatment for developing economies like Viet Nam," he said. The EU's lower tariffs on goods imported from Viet Nam would help increase exports to EU, especially for goods that compete with China and countries that also have low import tariffs with the EU, Tuyen added.

He also emphasised that Vietnamese and EU-invested enterprises should be involved in the preparation of the Viet Nam-EU FTA negotiations.

Prof Mai said business associations as well as enterprises should also be included because the business community would be directly influenced by the FTA. In addition, negotiators do not fully understand each business sector.

Matthias Duehn, managing director of EuroCham in Viet Nam, said business association played a significant role in raising awareness of FTAs among enterprises and collecting private-sector input and expertise.