Automobile industry out of the woods

The domestic automobile market is showing signs of bouncing back with auto sales in July increasing slightly.    

According to the Vietnam Association of Automobile Manufacturers (VAMA), vehicle sales in July, including domestically assembled and imported vehicles, reached 7,433, 15 percent higher than the previous month.

In the reviewed period, car sales rose by 21 percent to 2,729 units and truck sales increased by 10 percent to 4,704 units.

Twelve out of 18 car makers have demonstrated impressive sales growth. VMC’s auto sales increased 656 percent over June, followed by Vinasta with 172 percent, GM VN 80 percent, Visuko 61 percent, Honda 50 percent and Vinamotor 39 percent.

The six car manufacturers that saw a drop in sales volume during July were Hino, which fell by 33 percent, Samco by 52 percent, Vinacomin-Vinacoal 71 percent, Vinaxuki 3 percent, Veam by 29 percent, and Sanyang by 45 percent.

Truong Hai grew by six percent in July and currently holds the top spot in car sales with nearly 2,000 units sold in July and 13,152 units in the first seven months of 2012.

Toyota Vietnam ranks second with sales hitting 1,727 in July, up four percent over June, and totaling more than 12,000 in the first seven months of this year.

GM VN is third, selling 471 vehicles in July, 80 percent more than July 2011, and 3,200 in the past seven months.

Meanwhile, Ford’s car sales recorded satisfactory results with 2,000 units sold in the first seven months, thanks to major sales promotion campaigns.

Despite its second place ranking, Toyota Vietnam recently launched four of the five bestselling car models on the market, including Fortuner, which sold 456 units, Corolla Altis, selling 339 units, Innova 324 units, and Vios 315s. The GM VN Spark is the fifth bestselling car model with 200 units.

Higher car sales in July indicate the auto industry is starting to gain ground after three consecutive months in sharp decline.

However, the seven-month sales of domestically assembled and imported cars reached only 50,361, down 39 percent over the same period last year.

To increase sales in the remaining months of this year, domestic car makers are continuing their stimulus programmes by lowering prices and introducing new models to spur market demand.

A Honda Vietnam representative says sales will still face difficulties from now until the end of this year. Therefore, it is essential for all car manufacturers to launch promotions or new models to stimulate purchases.

Honda Vietnam debuted the new, reasonably priced 2012 Civic with 1.8 and 2,0 litre engines, while Toyota Vietnam is preparing to launch the 2012 2.0R, 2.5G and 2.5Q Camrys and Ford Vietnam is planning to market a new version of the Focus.

Mercedes-Benz Vietnam has found another way to stimulate consumer demand by cooperating with Techcombank, which is offering customers loans with zero percent interest for the first six months to purchase a personal vehicle, excluding the M-class.

Car importers are also launching sales promotions. Renault in Vietnam has announced discounts of VND179-216 million on the two models, Koleos and Fluence. Another French car maker has also offered 20 percent discounts on post-sale service, 15 percent on spare parts and 10 percent on oil changes and vehicle check-ups.

With the slight recovery in the market and proactive stimulus programmes, VAMA Chairman Laurent Charpentier believes that the automobile sector will see improvements in the remaining months of this year, with total annual car sales expected to reach 93,000 units, 16 percent more than the volume predicted in June.

Foreign businesses seek Vietnamese partners

A delegation from Sri Lanka representing businesses operating in agriculture, food, garment, packaging and construction materials is currently visiting Ho Chi Minh City to seek new partners.    

At a trade exchange between Vietnamese and Sri Lankan businesses on August 14, senior advisor to the Sri Lankan Minister of Industry and Commerce S. H. Harischandra said his country has implemented many policies to promote investment and business with developing countries to exploit their potential markets.

A representative from the Kitchenex Group said that after visiting some processing and industrial parks and factories they see that Vietnam shares a number of similarities with Sri Lanka, such as natural conditions, education and labour, which is favourable for promoting partnerships between businesses from both sides.

The representative said that his company is currently seeking partners that are furniture producers.

A business delegation from Japan also visited HCM City on the same day. The municipal Business Club, in coordination with the Japanese BSO Company, held an exchange for businesses from the two countries to meet, exchange information and seek partners.

Sci-tech university helps train Laos officials

The University of Science and Technology of Hanoi (USTH) will grant 15 scholarships to students from Laos to follow master’s degrees at its university.
 
These students will major in bio-technology, pharmacy, water and environmental sciences, oceanography and space technology and applications.

A memorandum of understanding (MoU) to this effect was signed in Hanoi on August 14 between representatives of the USTH and the Laos Ministry of Education and Sports (MoES).

The MoU will help promote cooperative ties between the USTH and MoES in science and high technology training and research. It is also part of Vietnam’s assistance for Laos to improve the qualifications of Lao officials.

The scholarships will begin in the 2012-2013 academic year and will last until 2016.

Binh Duong licenses 17 new FDI projects

The Binh Duong provincial People’s Committee on August 14 granted investment licenses to 17 foreign direct investment (FDI) projects, capitalised at US$629.4 million.    

Among these were five new projects worth a total of US$136.4 million.

Fourteen of these projects will be implemented in the Vietnam-Singapore Industrial Park (VSIP).

Le Thanh Cung, Chairman of the provincial People’s Committee, said despite the economic difficulties at home and abroad, Binh Duong’s socio-economic development has been steady, thanks to measures taken to iron out snags and create favorable conditions for attracting investment and boosting production.

The province has recently been paying more attention to developing infrastructure in 24 industrial parks and offering better services for investment and production, in addition to accelerating administrative reforms and improving the quality of its human resources.

Since the beginning of this year, Binh Duong has attracted US$2.3 billion in FDI capital from 69 new projects and 72 existing projects that increased their capital. The province currently has 2,087 FDI projects worth more than US$17 billion.

Chinese businesses eye investment in Quang Ninh

Many businesses from Guangdong, China, gathered at a meeting on August 14 to learn about investment environment in Vietnam’s northern province of Quang Ninh.      

Deputy Chairman of the Quang Ninh provincial People’s Committee Do Thong briefed the participants on the province’s advantages and social-economic development.

A number of large Chinese groups, including Lilai, Hongyun and Tex Hong, have already poured hundreds of millions of US dollars into the province, he said.

Thong called for investment in the US$610 million road linking Ha Long city to the Hanoi-Haiphong highway and the 709.ha Phuong Nam industrial zone focused on machinery, electronic and garment, manufacturing and post-harvest processing.

Quang Ninh provincial leaders also answered the businesses’ questions regarding project licensing procedures, land policies and preferential conditions for investors involved in mineral exploration and tourism.

Increasing Vietnam- Ukraine trade ties

Enterprises should pay more attention to Ukraine to increase trade and investment between the two countries, according to Vietnam's Ministry of Industry and Trade (MoIT).

The MoIT says Ukraine is an emerging market with a high and diverse consumer demand, but Vietnamese enterprises have failed to capitalise on this potential market.

Enterprises should actively promote trade with Ukraine to gain further access to this market in the future, the ministry says.

Two-way trade between the two countries increased year-on-year by 68.1 percent to US$194.5 million in 2011, and in the first half of this year, it gained 47 percent to US$96.6 million.

Vietnam mainly exports farm products, footwear, and textiles and garments to Ukraine.

Another advantage is that about 10,000 Vietnamese nationals live and work in Ukraine, bridging gaps between the two countries.

Vietnam and Ukraine have signed 20 economic and trade co-operation agreements which lay a great foundation for the development of bilateral trade and investment ties in the future.

However, many enterprises from Vietnam and Ukraine are struggling to gain a foothold in their respective markets. Language barriers, cultural understanding, legal information, consumer demand and the physical distance between the two countries have pushed costs up and turnover down.

To support local enterprises' trade activities in Ukraine, the MoIT plans to implement trade promotion programmes and market research, organise exhibitions and trade fairs, and open branches and representative offices in the country.

An international trade exhibition to be held in Kiev from September 16-22 will be a good chance for Vietnamese enterprises to find trade opportunities.

Businesses from several countries in Asia and Eastern Europe, including Vietnam and Ukraine, are expected to participate in the exhibition at the Rainbow Trade Centre.

The fair will showcase a wide range of goods including agricultural products like tea, coffee, seafood and processed foods, consumer goods, textiles and garments, furniture, cosmetics, medicine, electrical goods, household appliances, and construction materials.

Thai group to enter Vietnam’s telecoms market

Thailand’s telecoms group, True Corporation, has announced its plan to penetrate the Vietnamese market in 2015.
    
Bangkokpost reported that True Corp will set their footprint on the Vietnamese telecoms market in 2015 after the ASEAN Economic Community is officially established.

The Thai firm is seeking for investment license in the fields of infrastructure and digital TV services, with the aim of becoming a large telecoms service provider in Vietnam.

True Corp has just invested in Myanmar’s TV cable marker with an estimated investment capital of US$31,4 million.

Vietnam’s telecoms market is regarded as a fierce competition environment where several foreign businesses such as SK Telecom of the Republic of Korea and Vimpelcom of Russia had to quit the market despite their strong initial decisions.

True Corporation is a big communications group in Thailand with many subsidiaries operating in the three main areas of mobile, Internet and TV cable services. It is managing Thailand’s biggest TV cable company (True Vision), largest internet supplier (True Internet) and No.3 mobile provider, True Move.

Tuna export value jumps 42%
 
Viet Nam's tuna exports were valued at nearly US$312 million during the first seven months of the year, a rise of 42.3 per cent compared to the same period last year, according to the Viet Nam Association of Seafood Exporters and Producers (VASEP).

The main markets for Vietnamese tuna exporters are the US, Japan, the EU and the Middle East, with the US accounting for 50 per cent of all tuna exports.

The association said Viet Nam recorded a 33 per cent increase in earnings for tuna exports to the US during the first seven months, compared to the same period last year, bringing total earnings to nearly $144 million.

Similar to the US market, Viet Nam's tuna export to Japan hit record highs, up by about 46 per cent compared with the same period last year, with $39.5 million in earnings, said VASEP.

As predicted, Viet Nam's tuna exports to Europe are also on the rise.

The association reported that Viet Nam saw a year-on-year increase of 82.5 per cent in the value of tuna exports during the second quarter with earnings of $28.3 million.

Tuna exports to the Middle East were also growing, but earnings were still at a modest level, said VASEP.

Israel, Sudan and Lebanon were among the biggest regional importers of Vietnamese tuna, spending a total of $6.4 million, which accounted for 70 per cent of all tuna exports to the Middel East, VASEP added.

HCM City targets new per-capita GDP

A Politburo resolution signed by Party General Secretary Nguyen Phu Trong enjoins HCM City to achieve a per capita gross domestic product (GDP) of US$8,500 by the end of 2020.

Resolution 16-NQ/TW calls on the city to fully exploit its potentials to achieve sustainable economic development as well as renovate and restructure the economy to enhance its competitiveness.

The city needs to post GDP growth that is 1.5 times higher than that of the country in the 2011-20 period.

It should focus on the development of service sectors, including international finance, trade and banking, ports, storage, logistics, import and export, transport, and tourism, the resolution says.

Particular focus on industries is called for: mechanics, electronics – IT, pharmaceutical, chemicals – rubber, and food processing.

The resolution says city would need to ensure enterprises are more effective and competitive, enhance the collective economy, particularly focusing on the roles of cooperatives.

It needs to further improve urban infrastructure and improve the quality of urban planning in line with the country's socio-economic development and national security needs.

In addition, the city has been asked to call on investment from all parts of the economy.

One of the major tasks for the city is to develop a more advanced public transport system with high capacity to meet the increasing demand, including monorails, trams, buses, subways, expressways and waterways.

It also needs to invest in building and upgrading sea dykes and irrigation works along the Sai Gon river.

According to the Resolution, the city will be allowed to carry out pilot schemes on issues where improvement is needed but regulations are lacking.

It will also be given more autonomy in public finance management and budgeting, planning and investment.

The Resolution asks the city to improve and amend laws to attract investment from many sources from within and outside the country under many models, including build-operate-transfer (BOT), build-transfer (BT), public private partnership (PPP).

Garment firms lower outlook

A plunge in export growth and declining orders have led the Viet Nam Textile and Apparel Association to scale down its export-value target from US$19 billion to US$17-17.5 billion.

Domestic exporters said the weak global economy and sinking textile and garment consumption were the reasons behind the move.

Figures from the Ministry of Industry and Trade showed that the sector's export value increased 14.7 per cent year-on-year in the first four months of 2012, hitting $4.4 billion.

However, in the first five months, growth fell to 7.7 per cent, reaching $5.3 billion, and in the first seven months, the sector's export growth was at 8.8 per cent, much lower than the country's general year-on-year export growth of 19 per cent.

Although exports of textiles, garments and fibres increased 7.5 per cent year on-year to $9.2 billion for the first seven months, the figure was much lower compared to the 30-per-cent increase over the same seven-month period last year.

Dang Phuong Dung, deputy chairman and general secretary of VITAS, said: "Although textile and garment export turnover was still positive, it has not met the expectations of the sector."

The textile and garment sector has had problems getting big quantity orders, and has not yet built trademarks to compete with others globally.

Moreover, heavy reliance on imported materials and outsourcing orders that see a low return rate have not increased added value for export items or the competitiveness of the sector.

The textile and garment sector is vulnerable to economic crisis, which affects orders, price fluctuation, transportation fees and cost of raw materials.

According to the deputy chairman of VITAS, Pham Xuan Hong, only big textile and garment exporters have orders for the third quarter of this year, while many small – and medium-sized enterprises have to cut production because of a shortage of orders.

Consumption demands in the EU have fallen strongly in the past months and export orders have decreased by 20-30 per cent compared to the same period last year.

VITAS forecasted that difficulties would continue for two to three months due to lack of access to capital, shortage of raw materials and higher input costs. Besides, no signs of resuming consumption in the world market are in the horizon at this time.

Guillaume Crouzet, executive director of the French Chamber for Commerce and Industry in Viet Nam (CCIFV), said that the European market had strict requirements for products. They should be environmentally safe, have good after-sales service, and be well-designed and of reasonable price and quality.

Vietnamese businesses have not paid much attention to these criteria, so their products were not favoured in the markets.

He advised Vietnamese enterprises to create better designs to suit the tastes of consumers.

Southern province attracts investors despite tough times
 
The southern province of Binh Duong yesterday granted investment certificates to 17 projects worth a total of US$606 million.

The certificates have been given to both domestic and foreign firms, the provincial People's Committee said.

Five of the 17 projects are new, valued at $136 million, the others have been allowed to raise their capital by a total of $470 million, the committee said.

Projects that received investment certificates yesterday are mostly in retail and production sectors, it added.

The biggest project, invested in by the Sai Gon Stec Company Ltd to the tune of $340 million, will produce camera circuit boards.

It is followed by a $240 million project of Wonderful Sai Gon Electrics Company Ltd producing camera modules.

The third biggest project is the 62,000sq.m Binh Duong Canary shopping centre that the Aeon Viet Nam Company Ltd. will invest $95 million in.

"There are more and more domestic and international investors coming to Binh Duong now. Since the beginning of this year, their projects have played an important role in the province's socio-economic development," said Le Thanh Cung, chairman of the provincial People's Committee.

Cung said that in the first seven months of this year, the province has attracted 78 new projects and allowed 72 projects to increase their capital.

During the ceremony held to grant the investment certificates, provincial authorities said they were able to attract many investors during the current challenging times because they had improved infrastructure, invested in training human resources and providing better services.

"To attract more investment in the coming time, the province will continue to simplify administrative procedures and strengthen trade promotion activities," Cung said.

Last year, foreign and domestic investors invested $1.12 billion and $1.25 billion respectively in the southern province.

 Regulations govern boards of public companies

The Ministry of Finance issued Circular No 121/2012/TT-BTC on July 27, regulating management of public companies. Under the circular, at least one-third of the management board of a large-scale public company or listed company must be non-executive members. A non-executive member must meet certain conditions as regulated by law. The circular also supplements regulations on the audit board, the head of which must be "good at accounting" and at least one member of which must be an accountant or auditor. The circular also emphasises the importance of honesty and the prevention of conflicts of interests between members of the board of management and audit board and the managing officers of the company. The circular takes effect September 17 and replaces Decision No 12/2007/QD-BTC and Decision No 15/2007/QD-BTC of March 2007.

New rules on capital reserve funds

The Government issued Decree 57/2012/ND-CP on July 20, regarding the financial schemes of credit institutions, including branches of foreign banks. The decree strengthens the requirement in Decree No 146/2005/ND-CP that credit institutions must publicise their participation in a deposit insurance organisation at their heardquarters and branches. It also requires that credit institutions maintain actual value of their charter capital. When seeking to increase or decrease charter capital, a credit institutions must make a public announcement.

Decree No 57 also provides that State-owned banks and banks organised as single-member limited liability companies must place 5 per cent and 10 per cent of the revenues, respectively, into a capital reserve fund. However, the accumulated amount of such fund must not exceed the charter capital of the credit institution.

The decree takes effect on September 15, replacing Decree No 146/2005/ND of November 2005 and Decree No 22/2006/ND-CP of February 2006.

Exceptions to temporary corporate tax break

The Government has issued Decree No 60/2012/ND-CP to enforce National Assembly Resolution No 29/2012/QH13 on a 30-per-cent of corporate income tax rates in 2012. The tax break is applicable to small- and medium-sized enterprises and co-operatives, except businesses operating in lottery, real estate, securities, finance, banking, insurance, or manufacturing of goods and service subject to excise taxes, as well as labour-intensive enterprises in manufacture and processing of agricultural products, textiles and garments, leather and footwear, electronics (as specified in Decision No 10/2007/QÐ-TTg), and labour-intensive enterprises engaged in infrastructure development (as listed in Article 2.2 of Decree No 60/2012/NÐ-CP). Decree No 60 takes effect on September 20.

HEPZA welcomes $255 million investment

The HCMC Export Processing Zone and Industrial Park Authority (HEPZA) received new investments worth US$255 million in the first seven months of 2012, reaching more than half of its target, HEPZA said.

Cai Lan Oils and Fats Industries Company (CALOTIC) has invested to expand its operation and improve products' quality in Hiep Phuoc Industrial Zone, increasing its total investment in the IZ to $56 million.

Sri Lanka firms come looking for business

A visiting delegation of business executives from Sri Lanka yesterday met with more than 20 Vietnamese counterparts in HCM City to explore trade and investment opportunities.

The executives are mostly from the farm produce trading, food, garment accessories, construction materials, and tyre industries. The meeting was organised by the Viet Nam Chamber of Industry and Trade's HCM City office and the Investor Association of Industrial Estate Dankotuwa.

Viettel to provide mobile service in Timor Leste

Viettel, the country's leading telecom firm, said it will invest in a mobilephone network in Timor Leste (East Timor) as part of its global business expansion plan.

The military-run firm will establish an affiliate in the Southeast Asian island nation under the name of Viettel Timor Leste, with an initial investment of US$15 million to carry out the project.

According to the Timor Leste Ministry of Infrastructure's website, Viettel and Telin of Indonesia both received licences to invest in mobile networks in the country of 1 million.

While Telin vowed to provide 94 per cent of the population with mobile service and 3G (third generation) Internet access in the next six months, Viettel pledged to supply the same services to 95 per cent of Timor Leste's population in the next three years.

Viettel's project in Timor Leste will bring the number of its worldwide subsidiaries to six. The others are in Laos, Cambodia, Haiti, Mozambique and Peru.

The company, which in May this year launched its first African mobile network in Mozambique, said it also plans to invest in a mobile network in the South American country of El Salvador.

Ranked the 15th largest telecom firm in the world, the company last year earned a turnover of $6 billion, registering an annual growth rate of 20 per cent.

HCM City hosts int'l security expo

More than 110 local and foreign companies will take part in Secutech Viet Nam, an international exhibition and conference on security held in HCM City from August 22 to 24.

The fifth edition of the annual conference will be held at the Sai Gon Exhibition and Conventional Centre in District 7.

It will feature more than 200 booths displaying latest security products and solutions, including video surveillance technologies, fire prevention and safety equipment, intrusion alarms, management software, home automation and integrated solutions.

The show will be an important platform for individuals and organisations in the security, fire and safety industries to exchange information and seek business partners, organisers said.

The three-day event, organised by the Viet Nam Advertisement and Fair Exhibition Joint Stock Company and the Messe Frankfurt New Era Business Media Ltd, is expected to welcome about 5,000 visitors.

JICA helps Da Nang improve infrastructure

The Japan International Co-operation Agency (JICA) Viet Nam will help Da Nang improve the city's Lien Chieu water supply plant and Tien Sa port's second phase with funds totaling US$86 million from the Asia Development Bank.

As scheduled, groups of Japanese investors will come to study the feasibility of these Public-Private-Partnership (PPP) projects next year.

JICA will also provide funding to relocate the city's railway station and rebuild Lien Chieu Port in the next few years.

Tien Sa port only allows access to 30,000 DWT (deadweight tonnage) ships, while 50,000 DWT container ships can dock at Lien Chieu.

Japan helps formulate technology strategy
 
Deputy Prime Minister Hoang Trung Hai yesterday chaired the first meeting of the steering board to oversee co-operative work with Japan on Viet Nam's industrialisation strategy.

The Prime Minister signed a decision to establish the board on Monday.

The strategy, which was developed by the Ministry of Planning and Investment, is a step in realising a Joint Declaration made by the Vietnamese and Japanese Prime Ministers in October last year.

In the declaration, the Vietnamese side said it hoped co-operation and assistance from Japan would help shape and implement policies and work related to the country's industrialisation towards 2020.

Under the strategy, the work will focus on the areas of electricity and power supplies, energy savings, food processing, shipbuilding, agricultural machinery and environmental protection.

Beside the five prioritised areas, Viet Nam and Japan are considering potential to further develop sectors such as motorbike and automobile production, textiles and garments, and steel production.

The two countries' relevant agencies have together worked out action plans, measures and suitable policies to create favourable conditions for their co-operation in developing industry.

Japanese Minister of Economy, Trade and Industry Yukio Edano said Japan pledged to actively participate in drafting out the Strategy and specific action plans.

In the coming time, the Japan International Co-operation Agency (JICA) would take part in carrying out the groundwork for coming discussions between the two sides, he said.

He said Japan would always support investment and co-operation with Viet Nam in the area of technology and environmental-friendly projects.

Yasuaki Tanizaki, Japanese Ambassador to Viet Nam, expressed his hope that the two sides would soon reach agreements on portfolios and criteria of the basic industries and co-ordination and supervision mechanisms among the two countries' agencies during the implementation of coming action plans.

Deputy PM Hai asked the members of the steering board to redouble their efforts and work with their Japanese partners to finalise work on which sectors should be the focus of the two countries' co-operation so that this could be submitted to Prime Minister in November.

The country's draft Strategy on Industrialisation under the Viet Nam – Japan co-operation framework will receive feedback from experts before getting official approval.

Ministry inspects bean sprout supply

Minister of Agriculture and Rural Development Cao Duc Phat yesterday asked the Department of Plant Protection to keep running tests on samples of bean sprouts to ensure they are safe for consumption.

Nguyen Xuan Hong, head of the department said it had worked in co-operation with its branch in HCM City to test samples of bean sprouts from seven big producers, and proved that spouts contaminated with dangerous chemicals originated from China.

The results of tests on bean sprouts in Ha Noi are going to be released in a week. However, according to the initial assessment, a kind of chemical boosting the growth process is suspected to be used in these samples.

Hong said people usually eat bean sprouts raw, so it was necessary to ensure these vegetables were free from harmful bacteria.

The department also reported that grapes imported from China were found to contain a level of plant protection chemicals that was three to five times higher than what was permitted by law.

He said random checks on imported fruits, especially apples, pears, oranges, watermelons and grapes would continue in the coming time.

Minister Phat said relevant agencies were also considering new regulations on food safety and hygiene that would better minimise negative impacts on business.

 Ministry rejects construction of sugar plant in Cao Bang

The Ministry of Agriculture and Rural Development has rejected the construction of a sugar plant in Trung Khanh District in the northern province of Cao Bang, said Diep Kinh Tan, deputy minister of Agriculture and Rural Development on August 13.

Previously, Cao Bang Province had sort permission from the Ministry of Agriculture and Rural Development for the construction of a sugar plant in Trung Khanh District, near the Chinese border.

The investor for the sugar plant was to be the Corporation for Investment and Development of Northeast Industrial.

However, the offer has been rejected by Diep Kinh Tan, deputy minister of Agriculture and Rural Development, who said that the country already has 40 sugar mills in operation with total capacity of 139,000 tons per day, producing 2.7 million tons of sugar, while domestic demand is only about 1.4 million tons.

In 2011-2012, Vietnam produced enough sugar for domestic consumption and exported about 200,000 tons.

However, the export of sugar is difficult and often runs at a loss because the price of sugar production in Vietnam is still higher than in many countries in the region, and the sugar quality is far from meeting standards required by sugar-exporting countries in the world.

Meanwhile, in a master plan for development of agricultural production from 2010 to 2020 and future plan till 2030, the Prime Minister has decided not to build new sugar plants, focusing on expanding the capacity of existing plants, with intensive investment in modernization of production lines to improve yield and product quality.

The Ministry of Agriculture and Rural Development concluded that the project proposed in Trung Khanh to build a sugar mill with a capacity of only 2,000 tons per day is too small and uneconomical, as it will be difficult to apply modern technology and will take in higher investment.

Therefore, the Ministry of Agriculture and Rural Development does not agree with the proposal of building a new factory in Cao Bang.

HCM City exceeds target on number of foreign visitors in July

According to the Department of Culture, Sports and Tourism in Ho Chi Minh City, in the month of July alone 226,000 foreign tourists visited the City, a year-on-year increase of 10 percent and with turnover that touched VND3,754 billion (US$178 million).        

In the first seven months around 2,040,000 foreign tourists arrived in the City, meeting 53 percent of the total annual target. Turnover for the first seven months reached VND37,754 billion, accounting for 56 percent of the entire year target.

Organizers of the 8th International Travel Expo-Ho Chi Minh City (ITE-HCMC) are preparing activities to receive travel organizations and enterprises from Indonesia, South Korea, Thailand, Turkey, India, Hong Kong, the Philippines and Malaysia, together with local tourism promotional units and businesses in fields including airlines,   resorts, hotels and restaurants, to promote Vietnamese tourism.

The 8th International Travel Expo-Ho Chi Minh City will be held at the Saigon Exhibition and Convention Center from September 13-15.

The event will focus on the quality of international tourism. The organizers have coordinated with international partners and airlines to invite more than 100 foreign buyers from southern Europe, South Africa, Turkey, Russia, China,  northern Europe, the US and India to take part in the event.

The travel expo will include a series of activities as well as a discussion on exploiting the Greater Mekong Sub-Region Economic Cooperation Program and a conference on tourism attended by mayors of Ho Chi Minh City, Phnom Penh (Cambodia), Viengchan (Laos), Yangon (Myanmar), Bangkok (Thailand), Kunming in Yunnan (China), Jeju and Busan (South Korea).

Established in 2005, the International Travel Expo-Ho Chi Minh City is an annual travel exhibition. The event is a chance for local and international travel enterprises and organizations to exchange and enhance business cooperation.

Long Beach presents Phu Quoc pearl farm

Long Beach Corp. has introduced a VND60 billion pearl farm covering 30,000 square meters in the island district of Phu Quoc offshore Kien Giang Province.

The project is Long Beach Corp.’s joint effort with Japan’s Kuramoto Pearl, France’s Tahiti Pearl Farm and Thailand’s PF Jewelry. The four firms will set up Phu Quoc Pearl Joint Stock Company to run the forthcoming pearl farm.

Tatsu Kuramono, general director of Kuramoto Pearl, said that after a long time of studying Vietnam’s marine environment, the firm found Phu Quoc was the most suitable place to grow Akoya pearls on an industrial scale.

Kuramoto will be in charge of growing pearls on Phu Quoc while Long Beach will be responsible for developing the pearl store chain in major cities nationwide and seeking export markets.

Three other kinds of pearl, including Tahiti, South Sea and Mabe, will be brought from foreign countries to Phu Quoc and have the name of Long Beach Pearl.

According to Huynh Quang Hung, vice chairman of Phu Quoc Island District, the district has four pearl growing areas, with the Phu Quoc Pearl farm being the biggest.

Vietnam has three provinces growing pearls with Quang Ninh, Khanh Hoa and Kien Giang. Phu Quoc pearls are seen being of highest quality.

VASEP says nation will meet seafood export target

Despites difficulties such as material and capital shortage and slow consumption, the Vietnam Association of Seafood exporters and Producers (VASEP) maintain the nation will meet its seafood export revenue target of US$6.5 billion for this year compared to US$6.1 billion in 2011.

According to VASEP, the nation’s seafood export revenue hit US$3.4 billion in the January-July period, a 6.5% year-on-year increase. This means that the seafood industry should fetch US$3.1 billion more from now until the end of this year to fulfill its target.

VASEP general secretary Truong Dinh Hoe presented three reasons for maintaining the target, saying that there was a mild decrease in seafood export value in the second quarter, when consumption on the European market usually slows down during summer vacations. VASEP expected seafood exports to bounce back by the end of the month or September when the holidays are over.

Secondly, exporter sentiment has also improved given the Government’s solutions on rescheduling loans and lowering interest rates, Hoe said.

VASEP estimated seafood export revenue in the third quarter will reach US$1.84 billion, rising by 17% against the previous quarter and 7% compared to the same period last year and taking to US$4.7 billion the total export value in the January-September period. Of which, exports in August and September need to be high to compensate for low figures in July.

However, Nguyen Van Kich, general director of Cafatex Company, said that seafood exports have been slow so far due to difficulties in import markets.

Shrimp exports have been hindered by Japan’s Ethoxyquin content test while other markets like the U.S. and Europe have limited imports. Besides, the nation finds it hard to compete with India, which provides much cheaper shrimp than Vietnam.

“I am not sure about VASEP’s seafood export forecast of US$6.5 billion this year due to slow consumption,” Kich added.

Other enterprises also told the Daily that it will be difficult to obtain seafood export value of US$6.5 billion this year as material sources are declining while enterprises have yet to access bank loans.

* Vietnam has plans to expand white leg shrimp farming areas in the future, while reducing the areas of tiger shrimp given market demands.

Accordingly, the nation will produce 30 billion tiger shrimp in 2015 but only 29 billion in 2020. Meanwhile, white leg shrimp output will rise from 33 billion in 2015 to 57 billion in 2020.

VASEP general secretary Truong Dinh Hoe told the Daily that market demands are the main cause of the plan adjustment.

Consumers in import markets have gradually shifted to use products made from white leg shrimp instead of tiger shrimp. Therefore, Vietnam has to adapt to these new habits, Hoe said.

Central bank okays higher credit growth targets for lenders

The central banks has just raised credit growth targets for several banks in a move to pump more funds into the economy, with some enjoying a sharp increase of ten percentage points to 27% from the previous 17%.

Early this year, the State Bank of Vietnam set credit growth rates of 17%, 15%, 13% and 8% for four groups of banks depending on their performance in the previous year.

TienPhongBank said the central bank in Dispatch No. 4879/NHNN-CSTT issued on August 6 agreed to lift its credit growth rate to 27%. This means total loan balances of the lender including the amount invested in corporate bonds as of the end of this year will be scaled up to a maximum level of 27% compared to end-2011.

The decision of the central bank is based on the lending performance of TienPhongBank in the year’s first half, with its credit disbursement soaring 6.8% in the second quarter alone.

OceanBank on Monday also announced the new credit growth target of 27% versus late 2011. As of the end of last month, total outstanding loans of the bank reached VND30.169 trillion, up 16.7% year-on-year.

Military Bank, or MB, also obtained the permission from the monetary authority to revise its credit growth target up to 27% against the previous year.

It is likely that Bank for Agriculture and Rural Development, or Agribank, will also get the green light soon to raise the credit growth rate for this year given its strong lending activity in the year to date.

At the seminar ‘Connecting banks and enterprises to remove difficulties and boost production and business operations” in Ca Mau last Tuesday, Tran Quoc Khoi, director of Agribank’s branch in Ca Mau, said total outstanding loans of his branch in Jan-Jun picked up 2.5% over the year’s beginning. Total lending balances of the Thanh Hoa Branch of the lender in the same period was VND35.48 trillion, a rise of 4.9% compared to early this year.

Well-informed sources told the Daily that the central bank in the next few days will continue widening credit rooms for a number of other commercial banks. It is noted that a handful of commercial banks and 100% foreign-invested lenders had sent petitions to the central banks for higher credit growth adjustments.

The central bank early this year put the year’s credit growth target of the whole banking system at 8-10% and then lowered the figure to 6-8% due to economic difficulties in the country. However, the total amount of credits system-wide in the year’s first half rose by less than 1%, sources said.

Industry insiders expect the revised credit growth targets will help them improve profits of 2012 as a whole. Low credit growth over the past months had cut inroads into many banks’ profits.

ANZ introduces structured investment product

ANZ Vietnam Bank on Monday launched a new investment solution called Structured Investment Product, which aims at maximizing investor returns amid poor performance of traditional investment products.

The product is a combination of a traditional deposit and a derivative product, where returns are dependent on the performance of underlying financial assets including currencies and gold. Structured Investment will allow customers to diversify their portfolios, giving principal protection at maturity and the potential for enhanced returns.

Investment capital is fully guaranteed and this product gives customers the flexibility of investment tenors from one month to one year to help with liquidity management. Minimum investment is US$10,000 or equivalent.

ANZ head of Retail Banking Vietnam Duong Duc Hung said in a statement released on Monday that the new product aims to meet customers’ individual requirements, helping them diversify portfolios and maximize returns in the current volatile economy.

ANZ is the pioneer among foreign banks to introduce this investment tool in the Vietnamese market.

Gold shops turn to footwear sales due to slow trade  

Tighter control over the gold market has pushed many gold shops to the brink of closure, and in response they’ve turned to selling other products.

The gold mark has warmed up following the sharp rise of the global gold market from now to the year end. On August 11, Saigon Jewellery Company Limited (SJC) listed the buying price and purchasing price of VND42.28-42.37 million per tael, up VND160,000 and VND80,000 compared to the previous day.

However, Nguyen Cong Tuong, Deputy Head of SJC's Sales Department, said, the gold market was not as animated as prior to the announcement of Government’s Decree 24 due to tighter management over gold bullion sales. The decree has restricted gold bar trading to around 1,000 taels per day.

Most of the buyers are small investors and those buying gold for their wedding. Many people have taken advantage of the low interest rate to buy gold for speculation.

Tran Thanh Hai, General Director of Vietnam Gold Business (VGB), said that despite the increasing trend in world gold prices, buyers remained cautious about buying gold at this time. Gold prices are predicted to fall in late August and early September following the implementation of Government Decree 24.

The gold market has only enjoyed a warm spell over the past week. For the last three months gold sales have been slow. Even the sales of SJC which account for up to 90% of the domestic gold bar market have fallen by half compared to previously. Small gold shops have been pushed into an even worse situation.

Tuyen, owner of My Tuyen gold shop at Van Thanh Market, Binh Thanh District, HCM City, said her shop sometimes only received customers who were buying gold for their wedding or for savings. Only a few people bought gold bullion for transactions.

While shouldering losses, many small gold shops have had to move into other areas. The shops around Van Thanh, Ba Chieu, Pham Van Hai and Tan Binh markets have had to sell other products or simply go bankrupt. Many others have cut their rental space to save money, while others have turned to selling footwear to make a profit.

Truong, the owner of Kim Truong gold shop at Van Thanh Market said, "Footwear sales have helped business. I can earn millions of VND per day compared to just thousands of VND before. To meet increasing demand, I’ve has cut the gold space occupied by the gold counter and expanded the space devoted to footwear.”

Tuyen has also cut her gold selling counter’s space, leasing the remaining area to a footwear shop. She now only focuses on selling jewellery made from gems or pearls.

Being recognised as a national gold brand, SJC is willing to move into jewellery which is considered another way to shift gold. The firm is also considering exporting its products to Thailand, Cambodia.

According to Dr. Le Xuan Nghia, Deputy Head of the National Financial Supervision Committee, despite gold tending to rise from now to the year end, gold investments remain risky due to the disparity between gold prices on the local and world market.

He said the State Bank of Vietnam (SBV) should consider removing the gold import quota, and instead move to an automatic quota mechanism within the regulated limit. The bank should also allow commercial banks to receive the deposited gold to balance the market and prevent risks. After that, the SBV can convert the gold into cash, depending on currently monetary policy objectives.