Samsung Electronics to increase capital to US$1.5 billion

Samsung Electronics Vietnam, a wholly-owned subsidiary of South Korea’s Samsung Electronics, will push up its investment pledge for a project in northern Vietnam from US$670 million to US$1.5 billion by 2020.

The Industrial Parks Authority in Bac Ninh Province has granted a modified investment certificate for Samsung Electronics Vietnam to develop Samsung Complex project with special incentives.

According to a source of the Bac Ninh Industrial Parks Authority, the authority has adjusted the investment certificate of the company following Government approval, paving the way for the company to revise up the capital for the project to US$1.5 billion.

With this, Samsung Electronics becomes the leading investor in electronics and electrical machinery in the country.

Samsung Electronics Vietnam said the extra capital would allow the complex to become one of its largest manufacturing bases in the world. The complex will produce mobile phones, laptops and other electronic products.

The modified investment certificate says that apart from the registered capital of US$670 million, Samsung Complex will enjoy corporate income tax (CIT) of 10% in the entire lifespan of the project, CIT exemption in four years, 50% reduction in CIT in the following nine years (meaning 5% CIT only). The CIT rate normally applied in Vietnam is 25%.

In addition, the investor will enjoy import tariff exemption for all materials, accessories and support components that cannot be produced domestically to serve assembly and production of mobile phones within five years starting from April 2009.

Nguyen Van Dao, deputy general director of Samsung Vina told the Daily on the phone that the investment capital increase would be carried out in phases.

In a report Samsung sent to the authorities of Vietnam, it said it would disburse the entire initial capital amount of US$670 million from 2013 to 2015, and then raise it to US$1.5 billion in 2015-2020.

The Korean firm also committed to increase the localization ratio to 30-50% 3-4 years after production.

Being operational from late 2009, the Samsung Electronics Vietnam plant in the Yen Phong industrial zone of Bac Ninh is operating efficiently. By the year’s end, the plant is expected to reach the export turnover target of US$3.5 billion.

If the investment expansion project takes off, export turnover of the complex may reach US$16 billion by 2015.

Samsung Electronics Vietnam is the first and only complete hand-phone factory in Vietnam to date. The phone manufacturing project has become the largest in terms of scale and the most successful production base of Samsung Electronics outside South Korea.  

Vietnam is the fifth country where Samsung Electronics has phone production facilities after South Korea, China, India and Brazil.
 
OceanBank signs off on two loans for fiber firms

Hanoi-based Ocean Commercial Bank, or OceanBank, on Wednesday approved two loans totaling over VND500 billion for two companies active in the fiber sector.

Petrochemical and Textile Joint Stock Company (PVTex) will take out a one-year loan of US$21 million to increase its working capital.

PVTex on Wednesday launched the first polyester fiber lot, according to Vietnam News Agency. Its 175,000 tons/year factory will be able to meet 40% of materials for the garment and textile industry and help reduce US$400 million in annual fiber imports.

Nguyen Minh Thu, CEO of OceanBank, said in a statement that PVTex had posted steady growth since its establishment in 2008. It is the first corporation in Vietnam to produce polyester fiber which can partly replace the synthetic fiber that is nearly 100% imported at the moment.

Meanwhile, OceanBank will extend a VND70-billion credit to PVTex Phu Bai Fiber Joint Stock Company to finance a fiber factory project in Dinh Vu Industrial Park in Haiphong City. The two-year loan accounts for 65% of the project’s total investment capital.

Since early this year, OceanBank has inked many credit contracts with big corporations like Lao Cai International Hotel Joint Venture Company and Vietnam Airlines.
 
Vinacas wants unshelled cashew checks canceled

The Vietnam Cashew Association (Vinacas) has repeated its request that the Ministry of Agriculture and Rural Development halt quality checks on unshelled cashew imports into Vietnam as regulated by Circular 13 on food safety and hygiene.

According to farm produce and fishery quality agency Nafiqad, no cargo of unshelled cashew imported into Vietnam has ever been denied entry due to food safety reasons.

Companies testing for agricultural export products such as Vinacontrol and Cafecontrol confirmed there is no risk of food safety in unshelled cashew. Thus, the item should not be regulated by Circular 13.

Vinacas also proposed the ministry let them join any future discussions on unshelled cashew.

Six days after Circular 13 took effect, 400 containers of cashew were kept at Cat Lai port for inspection.

Nguyen Thai Hoc, chairman of Vinacas, said countries selling unshelled cashew to Vietnam such as Cambodia, Indonesia, Ghana and the Ivory Coast have not registered with Nafiqad.

Vietnam has big trade deficit with Asia

Vietnam’s first-half trade with Asia, especially Southeast Asian countries and China, expanded a staggering 33% year-on-year to US$61.7 billion but had a whopping trade deficit with Asia.

Vietnam Customs figures released on Wednesday show Vietnam’s shipments to Asian countries amounted to US$29.1 billion, up 40% from a year ago while its imports from those markets grew 30% to US$39.8 billion. This left a trade deficit of US$10.7 billion.

Two-way trade between Vietnam and its biggest trading partner China in the first half amounted to US$15.7 billion, up 30% from a year earlier. The country’s exports to China rose 60% to US$4.6 billion but China remained the biggest exporter to Vietnam with total revenue of US$11.1 billion, up 22.4%, resulting in a trade deficit of US$6.5 billion.

ASEAN imports from Vietnam accounted for 30% of the country’s total exports to Asia, at US$6.55 billion, up 22%.

The first six months saw Vietnam shipping nearly two million tons of rice to ASEAN countries, down 14.7%, including Indonesia with 702,000 tons, the Philippines with 637,000 tons, and Malaysia with over 300,000 tons.

Vietnam imported US$7.39 billion worth of gasoline, machines and equipments, plastic materials, computers, electronic equipments and others from ASEAN countries in January-June, according to Vietnam Customs.
 
DHL says to invest more in Vietnam

DHL is pooling more than US$1 million to expand its express and logistics network in southern Vietnam after the global leading logistics company completed US$14 million investments via a venture here in the country.

DHL said on Wednesday that the fresh investment was going to a new depot that just went online in Duc Hoa, Long An Province to meet the fast growing import and export volumes driven by increased investment activities in the southern province.

The new facility can process an estimated 80,000 shipments a year and help improve efficiency and better time-to-market capabilities for customers in Long An, a province in the Southern Focal Economic Zone, which is expected to grow 14% annually from 2010 to 2015 and become one of the emerging industrial provinces.

Tim Baxter, general director of DHL-VNPT Express, said customers in the province would be able to benefit from the increased capabilities such as later daily cut-off times, and reduced transit times for their inbound as well as outbound shipments.

Baxter said the commercial base continued to expand in Long An as manufacturing enterprises took advantage of labor, availability of land and well-structured industrial zones, among others. “Long An’s close proximity to HCMC makes it a desirable place for investors and this will continue to drive increasing demand for logistics services,” he commented.

Baxter described the new depot in Long An as another significant milestone for the joint venture and DHL’s confidence in the long term growth prospects of the logistics industry in the country after 22 years of the company operating in Vietnam.

Despite macroeconomic woes, Vietnam is one of the fastest growing economies in Asia Pacific and poised to continue its growth momentum in years to come. “Vietnam’s rapidly expanding economy presents vast opportunities for DHL,” Baxter said.

He added the new depot in Long An together with DHL Express’ other facilities nationwide seamlessly connected the company’s customers in Vietnam to the region and worldwide.

In previous years, DHL Express invested US$14 million in airside facilities, service centers and fleet expansion all over Vietnam. In 2010, DHL-VNPT Express inaugurated a US$5-million HCMC gateway at Tan Son Nhat Airport as part of the company’s investment commitment to Vietnam’s express and logistics market.

Equipped with infrastructure aligned to DHL’s Global Standard Operating Procedure, the 2,200-square-meter center at the Tan Son Nhat Cargo Express Service area has direct airside access, motorized conveyor and modern x-ray screening systems and in-house container loading and unloading capability for normal packages and heavyweight shipments.
 
Vietnam to coordinate ASEAN river tourism cooperation

ASEAN tourism authorities have selected Vietnam as a coordinator for regional cooperation in river tourism products development.

Nature, community, river cruise and heritage-culture tourism are four main products that Southeast Asian nations will develop in the 2011-2015 period.

Hoang Thi Diep, deputy head of the Vietnam National Administration of Tourism, told the Daily this was an opportunity for the administration to work out plans to link Vietnam’s tourism with other regional countries’.

This is quite a coincidence with a river tourism development plan underway in HCMC, the country’s biggest travel hub. The plan is envisaged developing river tours of the city and some neighboring provinces and it may be expanded to the Mekong Delta region and Cambodia.
 
VinaCapital to sell office building in city

Cushman & Wakefield, a property services provider, said it has been selected by VinaCapital Real Estate Company to help sell an office building under construction in HCMC’s District 7.

The property consultant firm told a news briefing in the city on Tuesday VinaCapital Real Estate was seeking a buyer for the whole building in the new urban town of Phu My Hung.

The owner would also consider selling individual floors of the Metroplex office building near the Saigon Exhibition and Convention Center and the Parkson department store.

The company, however, has declined to reveal the selling price of the office building.

Metroplex is designed with nine floors with total space of 14,000 square meters.

Matthew Koziora, director of sales and marketing at VinaCapital, said in a statement that besides giving an opportunity for potential investors to buy the building, Metroplex would offer occupiers a chance to own their offices.

Unlike the traditional office for rent, buying individual floors and owning a part of an office building has become popular in major cities in the world but relatively uncommon in Vietnam.

The office building has a lease length of 32 years, until May 2043, and its construction is scheduled for completion in the next 18 months.

Cushman & Wakefield on Tuesday released its quarterly report about the office market in HCMC, saying average rentals continued to soften for the 10th successive quarter, with US$36 per square meter for Grade A and US$22.5 for Grade B office buildings.

Leasing activity improved in the second quarter as compared with the previous one, but it was some 40% lower than the same period last year.

Commenting on the market, Robert Johnston, associate director of tenant strategies and solutions for Cushman & Wakefield, said abundant supply, coupled with low absorption levels, had posed a depressing effect on rents across all sectors.

“As a result, tenants are able to either renegotiate with their existing landlords for favorable lease terms or relocate to new office stock as new landlords are offering attractive terms to entice new tenants,” Johnston said.

HCMC’s office market has some 1.1 million square meters, with some 140,000 square meters for Grade A, some 520,000 square meters for Grade B and the remainder for Grade C.

Cushman & Wakefield projected that rent would continue to soften in the second half of this year and beyond, and the overall vacancy rate would remain elevated in the coming time given new supply continuing to increase.
 
Price management law to be submitted next year

The Government will submit 11 draft laws to the National Assembly (NA) at the third meeting expected to convene in May 2012, including the controversial Law on Price Management.

Speaking in Hanoi on Tuesday, NA Office Chairman Tran Dinh Dan said the first meeting of the 13th NA will set aside 11 days on election or approval of key positions in the NA and the Government, such as chairperson and vice chairpersons of the NA, members of its Standing Committee, the State President and Vice State President, and the Prime Minister. The session will convene in Hanoi on Thursday.

The session will look into the socioeconomic situation in the first six months of this year especially the high inflation and its adverse impact on local residents and businesses. The legislative body will discuss whether to issue a resolution on tax solutions such as corporate and personal income tax reduction or exemption as submitted by the Government.

The Government will send reports on the East Sea situation to NA deputies and the conflict may be discussed at the meeting.

The NA will also consider measures to implement socio-economic development plans and the State budget in the last six months of 2011, and approve the 2009 State budget balance.
 
City to take back 60 villas for public use

The HCMC government has decided to retain a total of 60 State-owned villas in 10 districts for development into social and public works such as school, park, public administrative building and public utility between 2011 and 2015.

The decision mentions 17 villas in District 3, 11 in District 1, 11 in Thu Duc District, 7 in District 6 and the remainder in districts 2, 11, Phu Nhuan, Tan Binh and Binh Thanh.

Those old villas have an area of 150 to 3,580 square meters each. The revocation of these villas, according to the decision, will help improve economic efficiency and the cityscape.

The city government will relocate the families living in the villas and proceed with reconstruction work between now and 2015. The city’s top priority is to turn these properties into school, hospital, park, public service facility, and social home.

Site clearance will start next year.
 
Big bio-agriculture complex to be built

Viet Nam's biggest hi-tech bio-agriculture complex will be built in the Central Highlands province of Lam Dong early next year, according to the deputy director of the provincial Department of Science and Technology, Dr Le Xuan Tham.

The project will cost about VND2 trillion (US$97 million), of which VND350 billion ($17 million) is from the State and local budgets while the rest is expected to be rallied from domestic and foreign investors.

The complex, located in Da Sar Commune, Lac Duong District about 15km from Da Lat City, will focus on researching and developing science and technology projects that can help enterprises.

Under the project, a technology transfer centre will be opened, where enterprises can trade and exchange information.

The project received good responses from the Ministry of Science and Technology, Ministry of Agriculture and Rural Development and Vietnamese leading scientists when it was presented to them at a meeting last month, according to Tham.

One of the scientists, Professor Nguyen Lan Hung, secretary general of the Viet Nam Association of Biology, told Viet Nam News yesterday that he supported the idea.

"The complex can gather together many scientists and specialists from around the country," said Hung.

The first products from the complex will include high-quality mushrooms, genetically-modified plants, Da Lat cold-water fish, farm seeders and a water-saving lawn sprinkler, said Tham.

A detailed project plan is expected to be finished and approved by the Ministry of Science and Technology in August.

Women adopt new e-commerce system

An e-commerce system for small- and medium-sized enterprises (SMEs) has been established by the Ha Noi Association for Female Entrepreneurs, as part of the Viet Nam – Finland Innovation Partnership Programme (IPP).

Located online at http://kinhdoanhdientu.vn, the system is designed to assist SMEs, especially those run by female entrepreneurs, in promoting trademarks, products and services, while also helping enterprises look for business partners.

According to the system's representative Tran Thi Thu Huong, more than 40 companies have already registered to join.

"The IPP will help foster scientific and technological innovation, speed up co-operation between the State and private sector and combine creative networks between Viet Nam and Finland," said IPP director Tran Quoc Thang at a forum on Viet Nam – Finland IPP and enterprises in Ha Noi yesterday.

With a grant of EUR5.6 million (US$7.9 million) from the government of Finland, the IPP aims to develop institutions and improve managerial skills at State offices and private enterprises. It also funds enterprises that are developing innovative projects in the fields of ICT, biological and environmental technology, services and education.

The IPP had provided support to between 30 and 50 innovative projects run by SMEs each year, and successfully connected enterprises from Finland and Viet Nam, said Thang.

FPT corporation makes high profits in H1

Despite the global turmoil, FPT corporation continued to perform well in the first six months, posting a revenue of VND12.1 trillion (US$592 million), up 22 per cent over the same period last year.

The corporation's deputy general director, Nguyen The Phuong, said the corporation's pre-tax profit reached VND1.2 trillion ($60 million), an 11-per -cent growth over the same frame last year.

After-tax profits stood at more than VND712 billion ($34.4 million),with an EPS of VND3,682 per share.

After the corporation's shareholder meeting approved a restructuring plan, the FPT quickly implemented a strategy to adjust growth targets this year from 20 to 30 per cent. In the first half of this year, the corporation earned 46 per cent of its target.

At the end of June, business performance in software, telecommunications and training remained stable. The corporation's other business had also achieved positive results and high percentages, Phuong said.

FPT Telecom had a revenue of VND1.55 trillion ($75.2 million), a growth of 35 per cent over the same period last year and 49 per cent of the yearly plan. FPT Information Systems achieved sales of VND1.61 trillion ($78.2 million), growing 16 per cent over the same period last year and completing 38 per cent of its yearly plan.

In the first six months, FPT Software posted a revenue of more than VND586 billion ($28.4 million), a growth of 28 per cent over the same period last year.

General Director Truong Dinh Anh said FPT Trading continued expanding its business activities with foreign and local partners such as Taiwanese Asus and Mai Linh. It has started to carry out its internet service with partners in Laos and Cambodia.

Anh said 95 per cent of sales revenue came from other countries, adding that the FPT had also expanded its business to Nigeria.

In addition, the corporation planned to invest further in its communications, studio, and on-line game projects.

Garment firms eye bottom line
 
Local garment and textile companies are concerned about whether they will be able to earn sufficient profit in the next two quarters to meet their annual export targets.

Export revenue of garments and textiles topped US$6.16 billion in the first half, retaining the industry position as the country's largest earner.

The sector expects to earn more than $7 billion in the latter half of the year to reach its target of $13.5 billion.

In previous years, the remaining months of the year were the sector's major export season, with many high-value export contracts.

But this year, the market is not expected to develop in the same way, Sai Gon Giai Phong newspaper reports.

The general director of Sai Gon Garment Manufacturing Trading JS Company, Nguyen An, said foreign importers predicted that garment and textile sales in the US and EU would fall 30 per cent compared to the same period last year because of economic difficulties in those countries.

This would affect the number of contracts and export contract volume, he said.

Local garment and textile companies should adjust their production and trading plans for the remaining months, he added.

Pham Xuan Hong, deputy chairman of the Viet Nam Textile and Apparel Association, said local companies would probably face a shortage of export contracts because demand for garments and textiles in the country's traditional markets was decreasing.

In the last two years, costs in China for production of garments and textiles has increased, and, as a result, many importers have shifted their orders from China to other countries.

In an effort to attract international buyers of garments and textiles to return to China, the country recently adopted measures to cut prices.

With advantages in raw material sources and production capacity, Chinese enterprises can offer more competitive prices than other countries in the region.

Despite these changes, the production level and the number of contracts of local enterprises had changed only a little, Hong said.

He also asked them to update market information and take precautions to avoid price pressure from importers.

Many local garments and textiles said with current high input costs, it was difficult to achieve profits despite having many contracts.

Phung Dinh Ngo, director of Binh Hoa Garment Company, said export prices for this year increased by 10-15 per cent over last year, while input costs went up two – to three-fold.

In addition, the adjustment in minimum salaries for workers also affected companies.

Enterprises in the sector hope the Government creates new policies to help companies weather the economic storm.

Sugar imports will help cut prices
 
The Department of Processing and Trade for Agro-Forestry-Fisheries Products and Salt Production under the Ministry of Agriculture and Rural Development has asked the Ministry of Industry and Trade to resume sugar imports in order to avoid rising prices in October and November this year.

"Up to the middle of July, domestic manufacturers produced 1.15 million tonnes of sugar, a year-on-year increase of 260,000 tonnes," said deputy head of the department Tran Thi Mieng.

"This volume, however, is insufficient to meet the domestic demand. This year, the country needs around 1.3-1.4 million tonnes of sugar," Mieng said.

Mieng affirmed that the price would remain stable from now until October, unless there was movement on the world market.

However, she added, prices in many markets such as Thailand were on the rise, and in addition, the stockpiled volume was small, which could still lead to a price hike.

Meanwhile, Viet Nam had imported just 93,000 tonnes of sugar out of the 250,000 tonnes that were allowed this year, so it was necessary to resume imports, she said.

Minister of Agriculture and Rural Development Cao Duc Phat said he supported the proposal because "after balancing supply and demand, the ministry found that Viet Nam was still lacking sugar, so the industry needs to resume imports before the new crop starts in September". Phat also said that the sugar price was stable but may increase slightly in the coming days, so the department needed to follow market movement and co-operate with the Ministry of Industry and Trade in order to supply correct information to sugar manufacturers and consumers.

Previously, due to falling prices and oversupply, the Viet Nam Sugar and Sugarcane Association called on the Ministry of Industry and Trade to extend the final date for import quotas past December 7, thanks to which the market was sufficiently warmed up.  

Rice export contracts signed

Vietnamese exporters have signed contracts to export about 1.3 million tonnes of rice in the third quarter, according to the Viet Nam Food Association.

In the second half this year, the country expects to sell 3.1 - 3.2 million tonnes of rice, bringing the total figure for the whole year to 7.4 million tonnes of rice.

Viet Nam's new rice importers are China, Indonesia and Bangladesh.

Equipment maker launches brand

The Viet Nam Electrical Equipment Corporation (VEEC) officially launched its new trade name GELEX on Tuesday.

VEEC currently has nine subsidiaries and operates in electrical equipment manufacturing and real estate development.

With registered capital of VND1.4 trillion ($66.7 million), the corporation expects to reach a revenue of VND10 billion ($480,000) by 2015.

Petrochemicals firm obtains loan

OceanBank (OCB) signed a $21 million credit loan contract yesterday with PetroVietnam Petrochemical&Textile Fibre JSC (PVTEX) in the northern port city of Hai Phong.

Under the contract, the credit loan will mature in one year and will be used for manufacturing and trading activities. OCB also commits to supplementing working capital and issuing letters of credit for PVTex free of charge.

On the same day, OCB inked another credit contract valued at VND70 billion ($3.3 million) with PVTex Phu Bai with a two-year maturity to build a fibre mill in Dinh Vu industrial zone, Hai Phong City.

Apartment project to cost $57m

AZ Land JSC has started construction of the AZ Van Canh apartment building complex in Hoai Duc District, west of Ha Noi.

The project is a part of the Van Canh urban area, an investment of the Viet Nam Housing and Urban Development Holdings Group (HUD Holdings). It occupies 9,920sq. m and includes four multi-story towers and a basement.

FPT signs consulting contract

The Corporation for Financing and Promoting Technology (FPT) signed a contract last Friday to set up an e-mail system for the Government, the largest consulting contract FPT has ever acquired.

The Ministry of Information and Communications will invest $316 million in the project, with KPMG as subcontractor, to begin work within six months.

Housing project gets go-ahead

The Ha Noi People's Committee has approved the construction of the Mic Tower housing complex, to be built in Tu Liem District, west of Ha Noi.

With a total investment of around VND1.49 trillion ($71.2 million) by the Military Insurance Company, the project will be built on an area of 25,000sq m. The first sod is expected to be turned in the last quarter of this year for completion in late 2017.

Investors want securities tax reduced

Dividend and securities transfer taxes should be removed to encourage investors and help the stock market develop, said Viet Nam Association of Financial Investors.

Association general secretary Nguyen Hoang Hai said only 30 per cent of idle cash from citizens had flowed into the domestic banks and securities markets compared to 100 per cent in other countries.

Low supply and high demand had caused domestic bank deposit and lending interest rates to soar much higher than in other countries in the region, Hai said.

To attract the entire idle cash from society to flow into the banking system and the securities market, investors should be given securities transfer tax exemption," he said.

When the market was stable and healthy, enterprises found it easier to lure capital, thereby reducing loan burdens from commercial banks.

Also, gold bar trading should be restrained by only allowing citizens to possess or sell through authorised agents assigned by the central bank, Hai said. Citizens should not be allowed to buy gold bullion.

A property tax should be imposed in order to limit real estate speculation, he said. Such a tax would need to be implemented gradually when the property market heated up, with better liquidity.

Anti-dollarisation methods should continue, he said.

On the issue of a dividend tax, Hai said securities was considered one of the most risky investment fields, at least riskier than a fixed deposit in a bank. In many countries, deposits in banks were insured against a bank going bankrupt.

However, when a company went into liquidation, securities investors could lose their money.

In Viet Nam, personal income tax was not impose on a depositor's interest because the State wanted to encourage citizens to deposit their idle money, Hai said.

However, there was a tax on dividends, which was unreasonable because investors have recently been receiving much higher interest from deposits than dividends.

Last week, the Government submitted to the National Assembly a proposal on tax reduction, extension and exemption from August 1 to the end of 2012. The proposal would be brought to the next Assembly session for approval.

Over past months, the domestic stock market has been faced with many difficulties, causing the VN Index to decline by 20 per cent over the end of last year. In reality, most shares had decreased 30-60 per cent over the last few months.

3 UK retailers pull out tainted Vietnamese catfish

Three leading British retailers have withdrawn Vietnamese catfish imported by a local company after some of the fish was found to have some illegal substances generally used to increase their weight, according to the Vietnam Association of Seafood Exporter and Processors (VASEP).

Tesco, Asda and Morrisons, ranked 1st, 2nd, and 4th in the UK, pulled the catfish products off their shelves in Seaham, a small town in Durham County, after detecting excess levels of sodium chloride and phosphate.

The products had been imported by Cumbrian Seafood Group, the VASEP said citing newswire Intrafish.

The substances were discovered by the Trading Standards Department of North East Lincolnshire following a random check.

It found nine out of 10 imported catfish samples contaminated with the substances which enable the fish to absorb more water and increase weight. The water evaporates when the fish is cooked.

Tesco stopped selling the fish since the middle of last month after an inspection by the importer Cumbrian found they failed to meet quality standards.

Asda, owned by Walmart, said it withdrew the product more than two weeks ago after conducting its own inspection.

Morrisons stopped after receiving a request from the importer.

Cumbrian is the only catfish importer of Vinh Hoan Co which is headquartered in the Mekong Delta’s Dong Thap Province, Vietnam.

Vinh Hoan has a GlobalGAP certification and is currently taking part in ASC certification programs run by the World Wide Fund for Nature and hopes to obtain it by year-end.

UN-backed technical assistance program for SMEs launched

A technical assistance program, backed by the United Nation Industrial Development Organization (UNIDO) for Vietnamese small and medium enterprises (SMEs) in garment-textile industry, has been launched in Hanoi and Ho Chi Minh City.

The “SME Cluster Development“ program, kicked off at a recent workshop in Saigon 2 Garment Co, aims at upgrading 18 and 16 selected garment enterprises in the capital city and its neighbor Hung Yen Province and HCMC respectively.

The first actions of the program, two workshops on marketing for fashion industry and two on pattern making and product development for men’s garment, will be held in Hanoi and HCMC on July 20-August 12.

Individual, in-factory consultancy on product development will also be delivered, by senior Italian designers.

These actions start a long-term assistance program which will be deployed along one year and will be focused on 4 main upgrading areas: design, product development and pattern making, marketing and branding, production planning and costing systems.

Assistance actions will be implemented through practical workshops and tailored, individual in-factory consultancy, mobilizing high level international experts and building capacity of local experts, said Anita Travaini, international project advisor of garment sector.

Additional upgrading actions will cover areas as HR management, corporate social responsibility, environment and energy saving, finance and costing, product labels, international standards and certifications.

Beneficiary enterprises have been selected among those applying to a project’s public call for applications launched in March 2011, and the upgrading program has been designed based on enterprise audits run by teams of international and national consultants.

A core component of the assistance program is the promotion of business partnerships with international companies, Italian SMEs in particular, as a vehicle for knowhow transfer and market integration.

Partnerships will be facilitated through business missions to Vietnam and study tours to Italy, which will enhance market penetration into ASEAN and EU markets by the two sides, Francesco Russo, Chief Technical Advisor, told Tuoi Tre.

A first important initiative will be a workshop promoted within the International Convention planned in HCMC on September 8-10 by International Association of Clothing Designer and Executives (IACDE), which will bring to Vietnam representatives of around 100 international garment companies.

An innovative feature of the project’s industry upgrading program is the cluster development approach, fostering business linkages, cooperation and joint initiatives among enterprises and with supporting institutions as a key to achieve higher competitiveness and overcome individual limits of SMEs.

It will also run a first feasibility study aimed at upgrading a national service center supporting garment and textile enterprises. The project is also working with national institutions to develop a proposal for introducing cluster development policies within national industrial promotion strategies.

The project also works in close cooperation with sector industry associations, including AGTEX and VITAS for garment, HAWA for furniture, SLA and LEFASO for footwear, will involve local consultants, education and training institutions in its upgrading programs in order to build local capacities.

Upgrading plans for the footwear and the furniture sector are going to start in September.

The 3-million euro project, funded by the Government of Italy and implemented by UNIDO together with the Enterprise Development Agency under the Ministry of Planning and Investment, was launched in July 2009 with duration of 3 years.

Textile industry plans to expand in next decade

Le Tien Truong, Chairman of the Vietnam National Textile and Garment Group (Vinatex) told Tuoi Tre in an interview Vinatex plans to raise US$1.4 billion for expansion in the next decade.

Truong said Vinatex would try to mobilize loans and investments from financial institutions and strategic investors in addition to its own capital to fund the expansion, which will be its largest expansion plan ever.

Truong said even though the local textile and garment industry has seen modest export surplus, it’s still enjoying a high rate of turn, which would attract foreign investors.

“Many equitized firms under Vinatex have a dividend of 20 percent, or even over 40 percent a year,” he said.

Vinatex has also been creating many jobs and contributing to poverty reduction in Vietnam, Truong added.

Yet, Truong admitted that the industry is still facing a great challenge: heavy reliance on imported materials. In the first half of this year for instance, Vinatext import up to US$5.7 billion worth of cotton fiber, fabrics and other materials.

To help solve the problem, Truong said Vinatex just launched the DinhVu – Hai Phong polyester fiber plant in early July to produce as much as 40 percent of the industry’s demand for fiber.

Jointly invested by Vinatex and the Vietnam Oil and Gas Group (PetroVietnam), the $325 million plant is the first of its kind in Vietnam and is expected to produce 175,000 tons of polyester staple fiber (PSF) and filament polyester a year, Truong said.

When the plant reaches its full production capacity in 2012, the industry will be able to save $450 million from not having to import polyester fiber.

Truong said Vinatex has also started new programs to grow fiber plants around the country.

UNIDO helps improve business competitiveness

A project to boost the competitiveness of Vietnamese garment and textile businesses has been launched by the United Nations Industrial Development Organisation (UNIDO) and the Association of Garments, Textiles, Embroidery and Knitting (Agtek).

During the one-year project, domestic and international experts will offer training courses in design, marketing, management, and brand building as well as seeking business partners in the European market.

It will provide US$3 million support for 18 businesses in Hanoi and Hung Yen and 16 others in Ho Chi Minh City.

EU grants 11 million EUR to tourism project in Vietnam

An action plan for the EU-funded project “Environmentally and Socially Responsible Tourism Capacity Development Programme” was discussed at a seminar in Hanoi on July 22.

This was the second project funded by the European Union (EU), following the recently completed “Tourism Human Resources Development” project in 2010.

Of the project’s total investment, the EU offered 11 million EUR while the Vietnamese Government contributed 1.1 million EUR.

With responsible tourism as a focus, the five-year project, starting from 2011, aimed to reduce adverse impacts of the tourism sector on the environment and maximise socio-economic and cultural benefits.

Activities to be launched within the framework of the project will support policies, raise competitive capacity and develop vocational education and training.

The project will also expand opportunities for the poor, women and ethnic minorities. It is expected to train over 5,000 workers from disadvantaged localities.

Addressing the seminar, Deputy Minister of Culture, Sports and Tourism Ho Anh Tuan, who was also head of the project steering committee, described tourism development as an important solution to create a breakthrough in the service sector, generate more jobs and raise social income, contributing to achieving socio-economic development targets for 2011-2015 and the National Tourism Development Strategy for 2011-2020.

The Government, ministries, branches and agencies of Vietnam have adopted policies to facilitate tourism development and attract investors into the sector, especially high-quality tourism, he said.

PMH back to home market via condo sale launch

Phu My Hung Corporation (PMH) announced on Thursday to come back to the residential market by launching a new condo project in HCMC’s District 7 early next month.

The company had seen its sale activities coming to a standstill since a land-use-fee dispute erupted around two years ago.

PMH will gauge the market feedback through the Canh Vien 3 condo project under development near the Crescent mall and the commercial and financial center in the new urban town of Phu My Hung.

Canh Vien 3 covering 4,000 square meters will have two 13-story buildings with 116 apartments measuring a minimum of 119 square meters each. Besides a commercial section, the project will consist of serviced facilities such as swimming pool, fitness center, children’s playground and parking lot for 116 cars and motorbikes.

This is the 32nd condo project the corporation has developed in the town, and when in place it will increase the total area of housing in the town to some 1.9 million square meters.  

PMH said the average selling price of those apartments was VND40 million per square meter, and a flexible payment method would apply with 10 installments over 18 months. As scheduled, the developer will hand over the apartments by December this year.

As for the land-use-fee dispute, Phu My Hung has received approval for extending the deadline for paying the fee to early December this year, instead of June 30 as required by the city government.

Buyers must pay the duty based on the date of the sale contracts being signed. After the period, the fee will be calculated based on the land price at the time buyers submit the document for tax payment.

Nguyen Thanh Tai, vice chairman of HCMC, said in a document issued on June 9 that homebuyers would have to hand their land-use fees to PMH, which would then transfer the money to the State.

The land use fee will be paid when PMH and buyers sign contracts, and the amount will be calculated based on the land prices decided by the HCMC government each year.

The spat over who would pay the fee has caused difficulties for the corporation and buyers who have been unable to pay the duty so as to get home ownership certificates. There are some 8,000 files piled up relating to the payment of the fee.

PMH has set August 30 as the deadline to receive requests for home ownership certificates from buyers. Those requests will be passed to relevant authorities before the new deadline expires in early December this year.
 
ACB allows money transfers via ATMs

Asia Commercial Bank (ACB) has launched a new service that allows its cardholders to transfer money to other banks through automatic teller machines (ATMs), becoming the first institution in the nation to make this kind of transfer possible.

This is the outcome of a cooperation deal between ACB and Smartlink Card Services Joint Stock Company that runs the Smartlink card network with 27 bank members.

This month ACB cardholders can conduct money transfer transactions with those of Sacombank and the service will be expanded to Vietcombank in August. By the year’s end, money can be transferred between cardholders of the Smartlink network member banks.

ACB cardholders pay no extra charge for using the service within three months starting July 19.

Money transfer via ATMs among cardholders of different banks is a goal in HCMC’s plan to develop banking services from now to 2015. The plan is envisaged deploying the service in the entire banking system in 2013-2015.

At the moment, customers of a bank can only transfer money to accountholders at other banks at that bank’s transaction offices or via Internet banking service.

In 2011-2012, banks will expand their point of sale (POS) networks to raise the ratio of revenue from POS transactions to 20% of the total from the current 5-7%.

By late 2010, HCMC had seen 6.67 million cards issued, 85% of them local payment cards. There had been 20 million individual banking accounts by late last year.
 
Xpress Money, local partner provide home delivery service

Global money transfer firm Xpress Money and DongA Money Transfer have struck a deal on cooperation in home delivery service.

Xpress Money will add the home delivery service to their operations via the cooperation with DongA Money Transfer. This will provide more options for customers of Xpress Money in the world.

Trinh Hoai Nam, deputy director of DongA Money Transfer, told the Daily that via the cooperation, the local company could gain access to overseas Vietnamese clients, especially those working in the Middle East where Xpress Money is present. International money transfer companies are not familiar with the service to deliver money to the customer’s door. Before arriving at the deal, the foreign firm had carefully weighed the service’s quality, Nam said.

The UK-based Xpress Money is the second foreign partner to join forces with DongA Money Transfer in remittance home delivery service after MoneyGram.

Xpress Money and the DongA Money Transfer earlier cooperated in remittance delivery via counters and bank accounts with about 4,500 transactions done in 2010. Xpress Money has had 80,000 agencies in 90 countries worldwide.
 
Vietnam rice exports to Africa increase strongly

Vietnam’s rice exports to some African countries grew strongly last month but exports to ASEAN countries fell significantly.

According to Vietnam Customs, the nation in June shipped 120,000 tons of rice to Senegal, five times higher than in May.

Exports to Ivory Coast reached 64,000 tons, earning US$31.3 million, up almost ten times in volume and 11 times in value, while in Ghana they reached 20,100 tons and US$10.6 million, up 100% in volume and 104% in value.

Most of the shipments to Africa were low grade broken rice at an average of US$413 per ton.

In June, Vietnam signed a memorandum of understanding to ship the first 50,000 tons of a total 100,000 tons of rice to Sierra Leone.

Africa will be a key market for Vietnamese rice in the future as the Ministry of Industry and Trade deploys trade promotion activities.

According to the ministry, Africa buys between 15 and 20% of Vietnam’s total rice export volume. Nevertheless, Vietnamese rice makes up only 14% of Africa’s total demand.

Meanwhile, exports to ASEAN countries in June dropped significantly from the previous month.

Exports to the Philippines fell 44% to 174,600 tons, while shipments to Malaysia decreased 19.3% to 47,400 tons and the volume to Singapore fell 16.8% to 22,300 tons.

Indonesian officials held talks recently with Vietnam Southern Food Corporation (Vinafood 2), the nation’s largest exporter, on purchasing 400,000 to 600,000 tons of rice for delivery in the third quarter.

According to Reuters, Indonesia’s government has asked the State-owned food procurement agency Bulog to import more rice this year to keep healthy stock levels and Vietnamese rice was the top choice because Thai rice prices are still high.

Thai rice this week averages at between US$550 and US$555 per ton.  

According to Vietnam Customs, the country shipped more than 660,000 tons of rice in June, earning US$321 million, up 3.7% in volume and 2.2% in value from the previous month.

From Jan–June, rice exports totaled four million tons with a turnover of nearly US$2 billion, up 16% in volume and 14% in value year-on-year.

Bright spots amid the gloom

Leading firms FPT Corp. (FPT), Hoa Phat Group (HPG) and Tien Phong Plastic (NTP) estimated big second quarter profits amid the gloomy outlook of local enterprises’ business results.

FPT’s before-tax profit in 2011’a first six months grew 11 per cent to VND1.2 trillion ($57.97 million), helped by revenue hitting VND12.19 trillion ($588.89 million). That higher-than-expected result prompted the technology giant to increase its annual growth target to 30 per cent from 20 per cent.

With current earnings-per-share standing at VND3,682, FPT’s general director Truong Dinh Anh said the directors was trying to raise that ratio to VND8,300 by this year’s end.

In the long-term, FPT’s management wants to boost profits by four-fold within 2011-2014.

The general director said his company was largely saving operation costs by collecting back cash investments in affiliates and sharply cutting back-office operation expenses.

The technology firm is looking in new sectors like mobile telecommunication, online communications, social network, games in both home and overseas market like Laos, Cambodia and African nations.

“FPT’s wages and bonus policies are being adjusted in accordance with our top priority of expanding new products, new markets, new technologies and new revenue flows,” said Anh.

Hoa Phat Group announced it had reached 55 per cent this year’s profit target. Its profit reached VND1.03 trillion ($49.76 million) in the first six months, with second quarter’s after-tax profit and revenue reaching VND474 billion ($22.89 million) and VND4.57 trillion ($220.77 million) respectively.

Tien Phong Plastic’s first half year gross profit hit VND203 billion ($9.8 million) out of annual plan of VND366 billion ($17.68 million). Revenue was VND1.18 trillion ($57 million).

Tien Phong Plastic’s chairman Tran Van Phuc said his company’s current debt was of some VND327 billion ($15.79 million), of which some VND300 billion ($14.49 million) was borrowed at U.S. dollar.

However, managements of those companies also expect an even more difficult conditions within the second half of the year, with inflation accelerating, government continuing its tightening money policies and global input prices strongly fluctuating.

Japan invests in farm produce in Dong Nai

The Dong Nai Food Industry Corporation (Dofico) and Japan’s Marubeni Corporation have signed a strategic agreement on farm produce cooperation.

Under the deal signed on July 21, Dofico and Marubeni will build a production chain of farm produce through the establishment of joint venture or joint stock companies to supply clean food and foodstuff to Ho Chi Minh City market.

Both sides will jointly invest in infrastructure construction and call for investment in the Dong Nai-Agropark industrial and farm complex.

Marubeni is a major economic group in Japan, which has 119 branches and representative offices in 69 countries worldwide.

PV