Confab urges renewed focus on Japan market
 
The Japanese market was one that carries high potential for Vietnamese firms, but it was also a challenging one, speakers said at a conference held yesterday in HCM City.

Akira Kojima, director of KeyPlus, a HCM City-based investment promotion and trade representative firm, said that with a population of 120 million, most of them affluent, Japan presented a very large and attractive consumption market for Vietnamese exporters.

Furthermore, the Viet Nam-Japan Economic Partnership Agreement that became effective in October 2009, has opened the door for many kinds of Vietnamese goods to enter the Japanese market, he said.

The current appreciation of Japanese yen and depreciation of Vietnamese dong have made Vietnamese goods cheaper in the Japanese market, and this was a particularly good time for Vietnamese firms to boost exports of their products to Japan, Kojima said.

In addition, with higher production costs in China, many Japanese companies have shifted their production base to Viet Nam, he noted.

Ngo Trung Hieu, director of Keyplus, said "Japan has high demand for agricultural, forestry and fisheries products and these are Viet Nam's strengths."

Local firms therefore should focus more on boosting the export of these items to Japan.

However, firms should invest in advanced processing facilities to add more value to their seafood and farm produce, he said.

Tu Minh Thien, director of the HCM City Investment and Trade Promotion Centre (ITPC), said besides seafood, other commodities including mechanical equipment, computer parts, handicraft, foodstuff, textile and garments, wood products and farm produce were also items that have high potential for export to the Japanese market.

However, with high requirements in quality, hygiene and food safety of the Japanese markets as well as fierce competition among exporters, local companies have faced a lot of challenges when entering the market, Thien said.

Vietnamese enterprises did not really understand the Japanese market, he said, adding that his agency would boost trade promotion activities to help the processed food and handicraft sectors enter the Japanese market.

For successful entrance to the Japanese market, it was very useful to understand the business culture, institutions and networks of Japanese enterprises, said Tadashi Kikuchi, economic attache of the Japanese Consulate General's office in HCM City.

"Vietnamese SMEs will have to learn certain aspects of Japanese businesses, such as punctuality in all business operations," he said.

Akira Kojima agreed, saying that Vietnamese firms should understand the market and business culture of Japan and relentlessly improve their products and service quality if they wanted to successfully penetrate the Japanese market.

In addition, Vietnamese firms had to conduct research on the Japanese market and customers' tastes to know how to pitch their products and services most effectively, he said.

They should also focus on quality and ensuring delivery time to win the trust of Japanese partners, he said.

Delegates at the conference advised that local firms strengthen promotion activities and take part in international trade fairs to market their products and seek more partnerships.

Organised by ITPC, more than 50 businesses participated in the conference that was titled "Japanese market: Export opportunity for Vietnamese companies."

Paper maker urged to report on delayed mill projects

The People's Committee of the southern province of Hau Giang has asked Hong Kong-based Lee&Man Paper Manufacturing Limited to give a progress report on two paper and pulp projects by September 20.

The two paper and pulp projects, located in Song Hau Industrial Zone in Chau Thanh District, reportedly failed to meet the requirements set by local authorities and were stalled for a long time before work resumed in April.

If there is no response from the investor as of September 30, 2011, the province has pledged to revoke the project's investment licence.

Decree to set minimum capital requirements for auditors

The auditing enterprises operating under a limited company model need to possess legal capital of at least VND3 billion (US$144,000), according to a draft decree on legal guidelines for independent auditing.

Under the draft decree, the members as organisations could contribute money to the company, with a maximum amount set as 35 per cent of the company's charter capital.

A foreign auditing enterprise, which conducts its auditing activities in Viet Nam, needs to have an owner's equity of at least $500,000.

Bonded warehouses to be inspected in Quang Ninh

The Department of Viet Nam Customs has requested that the Customs Department of northeastern Quang Ninh Province check the operations of provincial bonded warehouses.

Bonded warehouses found to be without goods for a period of six months will be closed. Others will be forced to decrease their stocks if they appear overloaded. The managers of bonded warehouses will be required to report on warehouse operations and the state of stored goods to customs agencies.

Five foreign bank branches increase registered capital

The State Bank of Viet Nam has allowed five foreign bank branches in HCM City and Ha Noi to increase their capital.

In HCM City, Woori Bank increased its capital to US$67 million, First Commercial Bank to $40 million, Industrial Bank of Korea to $115 million and NA Bank to $77 million.

The Korea Exchange Bank in Ha Noi was also allowed to increase its capital to $67 million.

ATM cardholders enabled to transfer funds between banks

Beginning Wednesday, Vietcombank, ACB, Sacombank and Eximbank have allowed their cardholders to transfer money between banks through ATMs.

This service permits customers to transfer money from anywhere, at anytime with no extra fee. In the past, customers of a bank could only transfer money to certain individuals via a transaction office or internet banking services.

By the end of this year, cardholders will be able to transfer money among any of 10 participating banks.

Capital city gives $7.4m to firms for price stabilisation

The Ha Noi People's Committee has decided to give a second-stage advance of VND155.5 billion (US$7.4 million) to enterprises in order to stabilise prices of essential commodities in and around the city.

The money, which was taken from the city's reserves, will help 12 enterprises to maintain prices of products including rice, pork, chicken, eggs, seafood and cooking oil.

The funding is expected to stabilise prices in the city's markets until April 2012.

Expos promote support industries
 
The manufacturing of parts is fundamental to the growth of all industries including motorbike, automotive and electronics, the managing director of Reed Tradex Co said.

Chainarong Limpkittisin was speaking at the opening ceremony for three exhibitions on support industries held yesterday in Ha Noi.

Chainarong said a healthy parts-making sector would help Viet Nam reduce import costs, enhance the efficiency of its productivity and improve product value, thereby strengthen the country's economy as a whole.

The Vietnamese Government has provided increasing support over the years to local parts' makers. However, it was necessary for domestic manufacturers to further upgrade machinery and access to advanced technologies to better meet demand, he said.
 
The Reed Tradex-hosted Viet Nam Manufacturing Expo, along with the Industrial Components and Subcontracting Viet Nam Expo and the fourth Viet Nam-Japan Exhibition on Support Industries would help parts' manufacturers find the technologies they needed, as well as future customers, Chainarong said.

Difficulties in purchasing parts was one of biggest challenges facing Japanese enterprises in Viet Nam, said Takezo Yanagida, executive vice president of the Japan External Trade Organisation (JETRO) in Ha Noi, which organised the fourth Viet Nam-Japan Exhibition on Support Industries.

A recent JETRO survey found that the ratio of components purchased by Japanese companies in Viet Nam was far lower than in other ASEAN countries.

As a result, enterprises were forced to import parts from other nations in the region such as Japan, Thailand and China. That has weakened competition of firms'finished products, as well as reduced Viet Nam's trade turnover, Yanagida said.

He said he hoped the fourth Viet Nam-Japan Exhibition on Support Industries would make an effective contribution to developing the Vietnamese support industries, and boosting co-operation between Vietnamese and Japanese parts manufacturers.

Meanwhile, Nguyen Van Suu, vice chairman of the Ha Noi People's Committee , said the three events would not only help parts producers expand their operations but also give State authorities the chance to review the role and status of the sector as a whole. The State would then be able to draw up strategies to further assist the sector.

The three expos will end on Saturday.

Meanwhile, the Centre for the Promotion of Imports from developing countries (CBI), an affiliate of the Netherlands' Ministry of Foreign Affairs, introduced its Engineering Export Coaching Programme to Vietnamese industrial exporters at the Viet Nam Manufacturing Expo.

Under the programme, companies would receive individual support by means of on-site consultancy, training schemes, market information, trade-fair participation and business-to-business activities.

Depending on specific needs, they would receive support in the fields of business development, certification and product-improvement. Over three to five years, SME exporters would be able to improve their competitiveness in European markets, CBI said.

Prime Minister Nguyen Tan Dung has announced that investors would meet with favourable conditions if they targeted specific industrial support products, reported a Government website.

According to the website, the products belonged to the garment, footwear, electrical and information technology, auto assembly, mechanical and high-tech industries.

In the garment industry, those products included natural fibre, cloth, dye, and other accessories such as buttons and zippers.

In the footwear industry, products included leather, imitation leather, soles, chemicals and thread.

Priority would also be given to investment in electrical components, laptop batteries and mobile phones.

To develop the auto-industry, the Government would also pave the way for investment in motors, brake systems, wheels and plastic spare parts.

In the high-tech industry, spare parts for systems that produced green electricity as well as high-quality plastic components were included in the PM's list.

During the implementation, industries would propose suitable priorities to be submitted to the Government for approval. — VNS

Vietnam the largest market for Cambodia’s tourism

Cambodian Minister of Tourism Thong Khon asserted on Wednesday that Vietnam is the largest visitor-generating market for his country’s tourism industry, and the country is seeking to attract more tourists from Vietnam.

The minister said at the launch of the Cambodian Night held at the five-star Rex Hotel on Wednesday that Cambodia welcomed 470,000 visitors from Vietnam last year, and the figure is expected to rise to 550,000 this year.

The Cambodian Night was held by the Cambodian Ministry of Tourism as part of the 7th International Travel Expo (ITE) HCMC 2011, aiming at introducing its culture and tourism to Vietnamese customers.

Cambodian Night attracted 500 representatives from travel agencies and hundreds of international buyers worldwide who took part in the travel event.

The Cambodian dignitary also said 24 Cambodian tourism companies were taking part in this year’s ITE, almost triple the number from the similar event last year.

“We will expand our promotion activities in an effort to bring you all the information you need about Cambodia,” Thong Khon said.

The ministry will also organize an art show in HCMC Opera House with the participation of hundreds of Cambodian artists on Thursday’s evening. The show is free to all guests.

At the ITE, Cambodian enterprises also set up their own stall next to their country’s common pavilion. Particularly, NagaWorld Hotel and Entertainment Complex in the Cambodian capital city of Phnom Penh invited celebrities to attract visitors and offer special tourism programs for Vietnamese customers at its large stall.
 
EVN signs EPC contract for Mong Duong

The Electricity of Viet Nam (EVN) and South Korean Hyundai Engineering and Construction Co Ltd signed an Engineering, Procurement and Construction (EPC) contract yesterday in Ha Noi to build the main plant for Mong Duong 1 Thermopower project.

The US$1.274 billion agreement formed part of the national electricity development programme in the period 2006-15, approved by Prime Minister Nguyen Tan Dung, which applied to coal-powered plants in Mong Duong Ward in Quang Ninh Province, 250km north-east of Ha Noi.

Covering an area of 55hectares, the 1,080-MW Mong Duong 1 Thermopower Plant was expected to generate 6.5 billion KWh annually.

The plant would use coal with thermopower technology suitable for Viet Nam's low-quality anthracite coal.

This technology has a high capacity with low costs, in addition to ensuring environmental protection.

The plant would consume about 3 million tonnes of coal per year.

The plant's first turbine was expected to become operational in the first quarter of 2015, with a second to follow in the third quarter of 2015.

Ministry rejects import-export tax changes

The Ministry of Finance has rejected proposals by the Ministry of Industry and Trade to raise import and lower export taxes on a number of commodities, including fertiliser, steel, aluminium and coal.

At an earlier working session between the two ministries, the Ministry of Industry and Trade (MoIT) requested the Ministry of Finance (MoF) to hike import tariffs on NPK fertiliser from the current 6 per cent to 6.5 per cent; delay imposition of a 3-per-cent export tax on steel ingots and finished steel; and slash the export tax on coal from 20 per cent to 10 per cent.

MoIT also suggested lower export taxes for bauxite mined in the Central Highlands province of Lam Dong, proposing an export tax of 5 per cent on initial shipments of aluminium products from the province. However, the proposal ignored the fact that export taxes on fine ore were set at 15-40 per cent under an ordinance passed by the National Assembly Standing Committee, MoF said.

MoF also rejected a suggestion that its Price Management Department provide more timely information on global price fluctuations of raw materials to help enterprises avoid losses. MoF said the department's role was to regulate prices of such commodities of electricity, coal and petroleum, and it advised enterprises to take the initiative to seek information from trade associations, manufacturers, foreign suppliers and the mass media.

Scores of power projects fall behind schedule

Scores of power projects nationwide have fallen behind schedule by two to three years due to the incompetence or poor financial capacity of Chinese contractors, said the Vietnam Energy Association’s chairman.

Tran Viet Ngai told the Daily on Thursday the snail’s pace is seen at many thermo-power projects undertaken by Chinese contractors, including such as Hai Phong 1 and 2, Cam Pha 1 and 2, Quang Ninh 1 and 2, Mao Khe, Thai Nguyen, Vinh Tan 2, and Duyen Hai 1.

The situation calls for the Government’s intervention.

Ngai said his association submitted a document on September 12 to the country’s top leaders to propose tackling slow-moving projects relating to power generation, power grid, and coal exploitation, which have been delayed for two or three years.

Ngai said the delay in progress of the many power projects could exert huge negative impacts on the country’s socio-economic development.

According to the energy association, the causes of the delay lies in Chinese EPC contractors’ lack of technology, limited capacity, inexperience, problems in financial arrangement, inconsistent equipment, and low quality of equipment. All these qualifications of Chinese contractors cannot compare with those of contractors from developed countries, resulting in the postponement of construction and completion.

In addition, Chinese contractors also brought Chinese workers into the projects they won instead of hiring Vietnamese engineers and workers as per the law.

Ngai’s association noted that coal-fired and diesel-fuelled thermo-power plants as well as gas-powered plants had to apply China’s design standards that are deemed still far from advanced while Vietnam has yet to issue its own design standards so far.

To remedy the situation, the association proposed the Government instruct relevant ministries and agencies to modify and amend the law on bidding which authorizes the investment owners to select high-quality equipment and experienced EPC contractors from developed countries.

It is also necessary to verify EPC contractors’ capacity so as to find out seasoned contractors while the localization rate of equipment manufacturing in Vietnam should also be defined, according to the association.
 
Money flows out of banks on lower deposit rates

Local commercial banks have seen mobilization slumping over the past week after applying the ceiling deposit rate of 14% per annum as regulated by the State Bank of Vietnam.

Speaking at a conference held by the central bank’s Hanoi branch on Thursday, Han Ngoc Vu, chairman of Vietnam International Commercial Bank, said customers withdrew nearly VND1 trillion after the regulation took effect on September 8. The banking system cannot stand it if the move keeps going on, Vu was quoted by the online newspaper Vnexpress as saying.

For Southern Commercial Bank, customers also took back around VND200 billion, said its deputy director Phan Cong Khoa, while Vietnam Bank for Agriculture and Rural Development (Agribank), the biggest lender in Vietnam in terms of assets and network, saw hundreds of billions of dong running out last week.

Tran Phuong Binh, general director of DongA Commercial Bank, said its mobilization has dropped by over VND20 billion each day.

“Most customers have been familiar with high deposit rates, so they take money back to buy stocks, gold or real estate as deposit rates are not attractive anymore,” Binh told the Daily on Thursday.

The general director of a HCMC-based commercial bank also said that VND250 billion was withdrawn from his bank in one week alone, saying that the lender will suffer poor liquidity if the situation keeps on. Lending rates on the inter-bank market are higher than 14% while the central bank only pumps limited capital via open market operations, he added.

Bankers do not know where the money has run.

Andy Ho, managing director of VinaCapital, said the capital flow might have run into stock markets as liquidity has surged strongly on the equity markets in recent days. Trading value on the two exchanges has shot up to over VND2 trillion daily compared to previous levels of VND600-700 billion.

If liquidity keeps rising on the market for a while, capital flow thing will run into property channels.

“It is good to invest in stocks or real estate but it is risky for investors to buy U.S. dollars,” Ho said.

The greenback has inched up to nearly VND21,000 on the unofficial market over the past few days while it is around VND20,834 in banks. People might have bought dollars but the central bank has sold out the greenback to stabilize the forex rate.

Given falling mobilization, many banks are afraid that the 14% ceiling deposit rate will be lifted again if the central bank does not pump in more funds. However, the central bank cannot put in much capital this year as money supply is limited at 15-16%, making the ceiling rate of 14% a big challenge to the managing body.
 
PVN seeks US support for projects
 
The Viet Nam National Oil and Gas Group (PetroVietnam) called for foreign investment in 26 infrastructure, electricity and finance projects at a conference held yesterday in Washington.

The conference titled Opportunity to Invest in Viet Nam: Energy and Finance was part of a 10-day investment promotion programme organised by PetroVietnam, the Viet Nam Chamber of Commerce and Industry and the US Chamber of Commerce.

The event aiming at enhancing the group's co-operation with foreign partners seeking investment in PetroVietnam's important projects including Dung Quat Oil Refinery Plant, Long Son Oil Refinery Plant, Nam Con Son 2 Gas Pipeline project, Quang Trach 1 and Long Phu 1 thermo-electricity plants, Petro Tower, An Phuoc and Hon Khoi ports.

Under the programme, PetroVietnam met with leaders from US economic organisations and companies, including Goldman Sachs, McKinsey, TPG, Morgan Stanley and New York Stock Exchange.

The programme has brought significant results to the group by directly introducing projects to US investors. PetroVietnam signed a memorandum with McKinsey Group to support investment promotion activities, attract foreign investment and improve competitiveness.

DNN invests VND510 bil. to develop IZ in Long An

DNN Joint Stock Company under DNN Motorbike Accessories Corporation on Sunday held a ceremony to announce a new industrial zone (IZ) in the Mekong Delta province of Long An.

DNN-Tan Phu Industrial Zone located in Duc Hoa District covers an area of 363 hectares with investment capital of VND510 billion. The project is divided into two phases and site clearance work is basically completed.

According to Nguyen Dinh Huynh, general director of DNN Joint Stock Company, infrastructure development of the project’s phase one will be completed in two years’ time. However, under the successive construction method, after a four-month implementation, investors will likely build up their factories.

The industrial zone is classified into two sections: mechanics and biology. They are both synchronously developed in a bid to attract domestic and foreign investment, as well as adapt to new production techniques and advanced management process worldwide, Huynh added.

DNN-Tan Phu Industrial Zone is hoping to create economic ties between Mekong Delta provinces and HCMC and pave the way for export growth.

In particular, the industrial zone is 30km off Saigon-Trung Luong Expressway, 60km off Long An international seaport and 35km off Tan Son Nhat International Airport. Such convenient traffic connections will facilitate the industrial zone in terms of transporting cargo and materials.

To date, six investors have set up businesses in this industrial zone.

Local energy projects in US shop window

PetroVietnam today held a meeting ‘Investment opportunities in Vietnam - Energy and Finance’ in Washington DC presided over by Vietnam’s Minister of Industry and Trade Vu Huy Hoang, Vietnam’s ambassador in the US, PetroVietnam and Vietnam Chamber of Commerce and Industry leadership.

In the meeting, the leading state group presented 26 electricity, infrastructure, finance and investment projects needing foreign investment.

Among those projects there are ones such as Dung Quat oil refinery, Long Son petrochemical refinery plant, South Con Son 2 gas piping system, Quang Trach 1 and Long Phu 1 coal-fired thermal power plants and Phuoc An and Hon Khoi ports.

In the sidelines of the meeting PetroVietnam’s leadership met with diverse US business groups, firms and economic organisations such as Goldman Sachs, McKinsey, TPG, Morgan Stanley and New York Stock Exchange NYSE in search of investment opportunities.

During the trip, the state group inked a memorandum of understanding with McKinsey & Company which pledged to assist PetroVietnam seeking investments for its projects.

Preferential loans to businesses still inaccessible

Although many banks have offered lending packages with preferential rates to certain economic sectors, borrowers said they still cannot access these sources.

Truong Van Phuoc, CEO of Vietnam Export Import Bank (Eximbank), said his bank has disbursed only VND500 billion (US$25 million) to around 20 businesses under its credit package to support local exporters with VND lending rate of 17% a year.

The similar package for foreign currency lending, despite its lower rate of only 7%, had also managed to reach some borrowers, he said.

He said the package required that borrowers had to sell their currency earned from exports to the bank at an exchange rate arranged by the two parties.

The businesses were thus hesitant as they had to have a close watch over the forex rates, he said.

HDBank has also provided only VND300 billion to 30 borrowers in its preferential lending program targeting businesses in the supporting industry since early August.

Its CEO Nguyen Huu Dang said many businesses have applied for the fund but most of them were rejected due to their infeasible business plans and inadequate financial condition.

Phan Ngoc Hoa, deputy CEO of Vietnam Thinh Vuong Bank, said few businesses in the fields of agricultural, forestry and aquatic sectors have access to the preferential loans.

The main targets of the credit packages are those in the production sector, while trading companies are those that need the fund the most, he explained.

A CEO of a bank admitted that although lending interest rate with the preferential borrowers had been lowered, few of them could get access to it as banks preferred lending to exporters, which were their sources of foreign currencies.

For their parts, many businesses who borrowed from the packages have called for even lower rates.

Pham Hong Phu, CEO of the Southern Rubber Industry JSC, said since lending interest accounted for 5% of production cost, the current rate of 17.8% a year still lowered Vietnamese businesses’ competitiveness with their foreign rivals, who were charged lower rates at home.

Poland eyes closer trade ties with Vietnam

Poland hopes to boost trade and economic cooperation with Vietnam, Beata Stelmach, the European country’s undersecretary of state for foreign affairs, told Tuoi Tre ahead of a visit to Vietnam.

Bilateral trade last year was worth US$400 million, most of which was from Vietnamese exports to Poland, and it had risen by 40 percent year-on-year in the first half of this year. The figure was likely to rise in future.

The geographical distance between the two countries was not an obstacle for Polish businesses to invest in Vietnam since the two countries had developed trade cooperation since 1980.

Vietnamese products were already available in Poland while some Polish pharmaceutical and environmental products had also become well-known in Vietnam.

“Poland will be a gateway for Vietnamese products to enter the EU, and so will Vietnam for Polish goods entering the Southeast Asian market.”

Vietnam exported tea and coffee to Poland which was also be a promising market for Vietnamese textile and garment and seafood.

Poland had offered a $280-million credit line for Vietnam to reduce the trade deficit.

If Vietnam agreed, Poland would grant the loan to its shipbuilding industry and was willing to enlarge the sum.

“We have granted $17 million for a center for shipbuilding research belonging to the Vietnam Ship Building Industry Corporation.”

Stelmach is in Ho Chi Minh City for a Vietnam-Poland trade promotion conference to be held tomorrow.

Airlines seek higher fares during peak season

Airline operators in the country are seeking approval from the Ministry of Transport to hike ceiling fares on domestic routes by 50 percent during peak seasons like Tet and the summer vacations.

State-owned Vietnam Airlines and the private Jetstar Pacific and Air Mekong got approval last April for a 23 percent increase.

The carriers said they wanted to hike fares again since during the high season it was common for flights to return virtually empty in one direction.

For instance, before Tet, flights from Ho Chi Minh City to the central and northern regions are always full of people traveling back to their hometowns, while in the reverse direction, the occupancy rate is a mere 15 percent.

The situation reserves after Tet.

Pham Ngoc Minh, Vietnam Airlines CEO, said the new ceiling prices would enable the carrier to offer passengers greater choice in terms of classes of tickets.

Lai Xuan Thanh, deputy head of the Civil Aviation Authority of Vietnam, said since the airlines were in competition, it was unlikely that fares would become exorbitant.

“Air fares would go up by 15 percent,” he said.

But travel firms are concerned since their tour packages would be affected by the fare hikes.

Tran Quoc Bao, head of Saigontourist’s domestic tours department, said the company had announced prices for packages during autumn and Tet based on current fares.

“The prices would have to be adjusted, which would decrease their competitiveness compared to outbound packages, whose prices are equal or lower,” he said.

Bui Viet Thuy Tien, director of Asian Trails travel agency, expressed the same concern.

“Prices for domestic tour packages will go up and I am not sure if foreign tourists will be willing to travel to Vietnam at exorbitant prices,” she said.
 
PV