Policy dialogue spotlights green growth

“Green growth - Opportunities, challenges and options for Vietnam ” were the main topic of a policy dialogue, which was held in Hanoi on August 24.

The dialogue provided an overview of green growth and global development trends; global green cooperation trends and opportunities for Vietnam ; Germany ’s experience in building and implementing green growth strategy; and the UN Environment Programme’s method of approach to the green economy.

Dr. Vo Tri Thanh, Deputy Director of the Central Institute for Economic Management, pointed out a number of shortcomings regarding Vietnam ’s sustainable development, such as the over-exploitation of natural resources for economic growth, out-of-date technology, environmental pollution and the community’s consumption acts and behaviour.

To build a green economy, Director of the Institute of Strategy and Policy on Natural Resources and Environment Dr. Nguyen Van Tai said the economy should be restructured in a more environmentally-friendly direction by developing green economic sectors, environmental services and clean energy.

Vietnam needs to remove barriers and create a favourable legal foundation to promote clean production, apply clean technologies, save energy and treat waste, Tai added.

He suggested that Vietnam should pour more investment in developing a number of spearhead economic sectors such as eco-tourism, regenerating natural forests and mangrove forests, and developing renewable energies and environmental services.

The dialogue was co-organised by the Institute of Strategy and Policy on Natural Resources and Environment (ISPONRE) under the Vietnamese Ministry of Natural Resources and Environment and the Hanns-Seidel Foundation of Germany.

Labour rules challenge small firms

Most Vietnamese enterprises are small- and medium-sized and do not have sufficient capacity to comply with the strict requirements of corporate social responsibility, according to Patrick J Gilabert, country representative of the UN's Industrial Development Organisation (UNIDO).

Speaking at a forum on labour relations on August 23 in Ho Chi Minh City, Gilabert said that small- and medium-sized enterprises needed help in meeting such requirements.

Since last year, UNIDO and the Vietnam Chamber of Commerce and Industry (VCCI) have been working with SMEs on a project to improve their environmental and social performance.

The project also helps SMEs enhance their sustainable integration in global supply chains through increased awareness of corporate social responsibility, including environmentally sound production and improvement of labour practices.

The forum was held as a dialogue between employers, workers and other stakeholders, including trade unions and buyers.

The forum gathered labour experts from the Ministry of Labour, War Invalids and Social Affairs, the International Labour Organisation (ILO) and other local and international organisations and enterprises in the textile and garment and footwear industries.

Vu Huu Tuyen, deputy director of a USAID-funded project on industrial relations in Vietnam, said that critical industrial relations issues included minimum wage, strikes and dispute prevention, overtime payment, migration, female employment and cross-cultural management.

Global integration had had a strong impact on textile and garment and footwear enterprises. Many countries had strict regulations regarding policies for workers, labour relations and the working environment, Tuyen said.
 
Pharmaceutical options good medicine for firms

Vietnam’s pharmaceutical industry is increasingly appealing to excited investors.

For example, in April local giant Hau Giang Pharmaceutical Joint Stock Company broke ground on a $24 million drug production plant in Tan Phu Thanh Industrial Zone in southern An Giang province. The plant, with an annual capacity of three billion tablets, is slated to come online in late 2012.

Later South Korea’s leading group Korea United Pharma aired its long-term investment plan in Vietnam. The group will pump $5 million into expanding its drug production plant in southern Binh Duong Industrial Zone whose construction began in late 2009. The plant currently churns out products made from ginseng for export to over 30 countries around the world.

Thomson Medical Centre, a big private healthcare group based in Singapore, recently had a working session with southern Ninh Thuan province to discus building a specialised hospital for tumor treatment combined with nursing in the province.

According to centre chairman Hwee Tiong Yeo, Ninh Thuan’s propitious geographical and natural conditions were ideal for healthcare service and tourism promotion.

“Our group will soon embark on the project once getting high investment incentives and support in legal setup from local governments,” said the executive.

US-based AmeriSure and Hanoi-based Vimedimex pharmaceutical group recently inked a cooperative deal under which Vimedimex will act as AmeriSure’s exclusive distributor of drugs, medical equipment, vitamins and supplements, and cosmetics in the Vietnamese market. Vimedimex also acquires exclusive rights to market and sell these products in the ASEAN region, China, Japan and South Korea. In exchange Vimedimex will get AmeriSure support.

India-based Fortis Healthcare Group just wrapped up the acquisition of 65 per cent stake in Ho Chi Minh City-based Hoan My Medical Corporation at $64 million.

Ministry of Planning and Investment’s Foreign Investment Agency statistics show that Vietnam was home to 75 foreign healthcare projects valued over $1 billion as of July 2011.

However, most of these Vietnam-based factories cannot turn out high-value drugs for specific treatment. That is why the country spent $1 billion on drug imports each year.

The latest report by Business Monitor International, a leading provider of forecasts covering 175 countries and 22 industry sectors, reads that Vietnam ranked 13th out of 17 of the world’s fastest growing markets for drug spending.
 
Work accelerates Tan Thanh sewage treatment complex

Officials of the Long An southern province and Ho Chi Minh City on August 23 surveyed the implementation of Tan Thanh industrial sewage treatment complex project.

Invested by the Vietnam Waste Solutions company, the $700 million complex in Thu Thua, Long An province will be equipped with the latest technologies from the US to treat solid waste collected from Ho Chi Minh City and Long An.

Once finished, it will become a large-scale complex in the Southeast Asian region.

Nguyen Van Phuoc, deputy director of Ho Chi Minh City’s Department of Natural Resources and Environment said that once operational by the end of 2012 or early 2013, the complex can process 10,000 to 15,000 tonnes of household solid and industrial solid waste per day, and up to 30,000 tonnes at peak time.

Darryl Petker, director of the Tan Thanh project said that the complex would include solid and industrial waste recycling areas, a compost fertiliser production area and a wastewater treatment area.

City price subsidized program a success  

Nguyen Thi Hong, deputy chairwoman of the People's Committee of Ho Chi Minh City, called the city's price subsidized program a success as it has achieved its aim in supplying goods in the market at much more affordable rates.

Hong was discussing the price subsidized program at a meeting in preparation for the forthcoming Lunar New Year. She said that after four months since its implementation, the price subsidized program had yielded great and expected results.

Prices of commodities in supermarkets and traditional markets have remained stable. The bigger supermarkets like Co-op Mart, Big C, Lotte Mart and Maxi Mark said that suppliers had not asked for an increase in any of the commodity prices either.

Ho Chi Minh City will continue to lower prices of commodities under the price subsidized program during the city’s “Promotional Program Month” in September. Enterprises participating in the price subsidized program are planning to stockpile for the coming Tet season (Lunar New Year).

From now until the Tet season, the city plans to open more stores in industrial and processing zones and remote districts aimed at bringing subsidized goods closer to the people living in far off places.
 
First Vietnam-made oil rig to be launched September  

The Vietnam National Oil and Gas Group (PetroVietnam) says it will inaugurate the first locally manufactured jack-up rig on September 9 in Ba Ria-Vung Tau Province, where the mobile platform was built.

A jack-up rig is a type of mobile platform that is able to stand still on the sea floor, resting on a number of supporting legs.

PV Shipyard in the southern province has been building the platform for 26 months. The PetroVietnam member said Wednesday that it would start the test-run of putting the 90-meter rig into the sea on August 31 before delivering it to PetroVietnam.
 
The first made-in-Vietnam platform, 12,000 tons in weight, would be put onto a barge from the construction site and tugged to the test position four kilometers off the coast. Then it would be tugged back to the coast.

The rig includes blocks, cantilevers, living quarters, the pipe system and a helicopter deck.

Building rigs at home is part of Vietnam policy on shifting core mechanical engineering in oil and gas to Vietnamese companies.

Prime Minister Nguyen Tan Dung, during his working trip to Ba Ria-Vung Tau Province in July, came to visit PV Shipyard and examined the building of the first locally made rig.
 
Stamp mark to differentiate genuine, fake goods  

The country’s central committee for anti-trafficking of counterfeit goods and trade fraud has decided to introduce a new stamp mark that will have an identity code number, serial number and telephone number on products of genuine origin crossing custom checkpoints.  

Customers wanting to verify genuine products from counterfeit goods can check the identity numbers and ascertain their genuineness by text messaging an operator.

Statistics brought out by the Vietnam Consumer Rights Protection Association reveal that at least 62 percent of consumers have at some point bought counterfeit goods.

Foreign brand goods and cosmetics were the two categories targeted by counterfeiters at 70 percent and 50 percent respectively.

This new method of an identification stamp marking should help in reducing the damaging effects of counterfeit goods, which are causing great loss to genuine manufacturers.
 
HAGL Group conducts ERP with SAP package  

Hoang Anh Gia Lai, a major multi-business group in Vietnam, has commenced its Enterprise Resource Planning (ERP) project with solutions provided by a global market leader in enterprise application software – SAP.

The ERP project runs on infrastructure with IBM servers and storage equipment consulted and implemented by CSC.
 
HAGL, SAP, IBM and CSC announced this ERP at a ceremony in Ho Chi Minh City late July.  

The group says the project is carried out in the business areas of real estate, rubber exploration, mining and hydropower.

The project requires an investment of VND100 billion, or almost US$5 million, an HAGL source said on anonymous conditions.

It is said to be one of the largest ERP projects among multi-business groups in Vietnam, Laos and Cambodia, according to market analysts.

HAGL is currently expanding its brand overseas, and conducting ERP is seen as a further step to support the strategy.

Germany-based SAP (NYSE: SAP) – the ERP solution supplier – says the project is designed to enable HAGL to comprehensively manage its enterprise resources and address business issues in real-time, both at operational level and strategic level.

The solution package also enables the group to assess potential risks and to make business decisions in a quick and accurate manner, according to Mr. Srinivas Adimulam, country manager of SAP Vietnam.

Mr. Vo Truong Son, deputy general director of HAGL, said at the announcement ceremony in Ho Chi Minh City on July 26, “We decided to choose SAP solutions, IBM infrastructure and consulting and implementation services from CSC because these are experienced vendors with proven and successful solutions.”

“The most important factor is the existing cooperation and support between SAP, IBM and CSC in many previously undertaken ERP projects,” he added.

IBM, SAP and CSC have been collaborating in the implementation of ERP for a number of Vietnam enterprises, including major companies like beverage manufacturer Tan Hiep Phat, and TH True Milk Food and Milk.
 
Supermarket kicks off promotional program  

Saigon Co-op Mart, a leading supermarket chain in Vietnam is planning to kick off a promotional program to motivate the people to buy more “Made-in–Vietnam Products” from August 29 to September 25.

The supermarket chain is expecting to spend more than VND50 billion (US$2.2 million) on the program.

More than 186 suppliers will take part in the event, offering discounts up to 50 per cent on over 1,500 items in 50 Co-op Mart supermarkets and 22 Co-op Food stores throughout the country.

Customers of Co-op Mart and Co-op Food will also have an opportunity to receive gifts and join lucky draws for prizes that include nearly 50 taels of gold!

The promotional event is part of the annual “HCMC sales promotion month” and aims to encourage and motivate the Vietnamese people to buying more ‘made-in-Vietnam’ products.

FTA to increase trade with Russia
 
A free trade agreement between Viet Nam and the Russia, Belarus and Kazakhstan customs alliance is expected to reduce tariffs on Vietnamese goods exported to Russia.

Dang Hoang Hai, the director of the Ministry of Industry and Trade's European Market Department, said the agreement would reduce barriers to services and trade, simplify customs procedures and improve payment conditions.

It will also increase investment, tourism activities and the number of remittances.

The two sides are conducting research on the FTA's impact and final negotiations on the deal are expected soon.

Trade between Viet Nam and Russia had great potential but had yet to be fully tapped, said Alexander Kardo-Sysoev of the Russian Trade Office in Viet Nam.

He blamed the situation on a lack of information about each other's markets and geography.

"Viet Nam mainly export raw materials and semi-processed farm produce, and their costs go up due to high transport expenses," he said.

He called for spreading the cost by increasing exports of value-added products and refined goods.

Hai said Russia is a potential market for wooden products, but the current high import tariff has prevented local companies from increasing their export to the market.

In addition, he said payment risks and taxes as well as non-tax barriers in Russia have discouraged Vietnamese businesses from entering the market.

Letters of credit are not popular in Russia, and Russian importers usually pay an advance of only 20-30 per cent, posing a high risk for exporters saddled with unreliable clients, he explained.

He urged businesses to improve the quality of their exports as the Russian market requires high technical standards, even higher than the EU's.

Last year, two-way trade between Russia and Viet Nam was worth US$1.8 billion. The two countries have targeted $3 billion by 2012 and $10 billion by 2020.

Viet Nam imported goods worth $353 million from Russia in the first six months of this year, mainly oil and petrol, steel, fertilisers, and equipment.

Vietnamese exports were worth $628 million, with the major items being seafood, textiles, footwear, agro-forestry products, and handicrafts.

Companies urged to build trademarks
 
Vietnamese companies should unite to build and develop industry brands on the international market or they will continue to struggle for global recognition.

The message came at a forum in Ha Noi yesterday titled "Building and Developing Trademarks for Industries", hosted by the National Trademark programme, the Trade Promotion Agency of the Ministry of Industry and Trade, and the Vietnam News Agency's Tin Tuc newspaper.

Several Vietnamese companies such as VNPT, Trung Nguyen, Vinamilk, Agifish and Vinacafe had separately succeeded in building and developing their trademarks and increasing their competitive capacity, Nguyen Quoc Thinh, Director of the Trademark Centre of the Viet Nam University of Commerce told the forum.

However, Deputy Minister of Industry and Trade Nguyen Thanh Bien said that: "One of the weakest points about Vietnamese enterprises is that they only take care of themselves. Producers need to be aware that establishing trademarks is not the sole responsibility of the Government's authorities."

Speakers at the forum said that most Vietnamese companies lacked the experience to develop trademarks as a real marketing tool, reducing their competitive capacity against imports and multinational firms operating in Viet Nam.

"Building national industry brands will help strengthen our enterprises, but enterprises must unite to build those brands first," Thinh said. He gave an example of a survey conducted in the US that showed just 12 out of 127 American consumers said they knew about a typical Vietnamese industry such as coffee, textile and garments and seafood, and just three knew of a specific trademark.

"Most of our products are exported as raw materials. Foreign companies refine them and label them with foreign brands, and that's why our products are not widely recognised," Thinh said.

Tran Le Hong from the National Office of Intellectual Property of Viet Nam said that the role of associations was really important in helping enterprises to build a collective industry trademark. He gave the example of ‘Cafe de Colombia', with 527,000 cultivators complying to unique standards set by the National Federation of Colombian Coffee Growers.

It required industry associations to set up strict standards from the cultivation stage to the production and distribution stages, and their members shared the same collective industry trademark, Hong said.

The union of enterprises doing business in a same industry in Viet Nam was so weak that their conflicts hampered the building of an industry brand.

When Buon Ma Thuot City in the central highland province of Dac Lac planned to register the ‘Coffee of Buon Ma Thuot' brand, its neighbouring province Dac Nong didn't agree because a small part of the coffee was cultivated in Dac Nong, Hong sampled.

The forum also agreed that brand registration was conducted without long-term strategies or a master development programme. Representatives from Masso Group, Tan Hiep Phat Co, and the Viet Nam Tea Associations said that the very first vital foundation for building a trademark was quality and consistent plans to retain and improve that quality. That was what made customers remember and return.

Bien said that the ministry was working with relevant offices, enterprises, associations and provinces to draft a direction for collective industry trademarks.

The National Trademark Forum is an annual event started in 2003 that focuses on helping Vietnamese enterprises to raise competitiveness, develop and manage trademarks and increase the added value of products and services.

Vietsovpetro unearths fresh oil

The Russian-Vietnamese oil and gas joint venture, Vietsovpetro, has announced that its workers had discovered a new oil supply at its Meo Trang (White Cat) site on Tuesday.

The oil was discovered at a depth of 3,350m and measured to produce 250cu.m per day.

Vietsovpetro Deputy Director Tran Van Hoi, who is also in charge of geological surveys, said that the offshore White Cat site was located southwest of the Bach Ho (White Tiger) mine.

Based on its geological potential and exploratory drilling, the White Cat site might be a potentially great new source of oil.

Vietsovpetro plans more onsite exploration over the coming days in order to establish oil output and a comprehensive drilling sketch.

Alongside Gau Trang (White Bear), White Cat is the second oil mine that Vietxovpetro has managed to uncover this year.

100 extra shops to open in capital to offset inflation

Ha Noi plans to open a further 100 outlets selling price-stabilised goods by the end of this year, bringing the total number of cut-price outlets to about 700 in the city, according to the Ha Noi Department of Industry and Trade.

The capital launched a programme entitled "Stabilisation of prices on essential goods in Ha Noi 2011" four months ago.

Nguyen Van Dong, deputy director of the Ha Noi Department of Industry and Trade, said at a press conference in Ha Noi on Tuesday that local authorities in the capital had granted loans totalling VND319 billion (US$15.3 million) to 11 enterprises to control price fluctuations since the programme's launch.

About 560 outlets – 271 of which are located in the suburbs – are selling essential commodities at fixed prices that are clearly marked on the goods.

Ha Noi authorities planned to further disseminate information about the programme and encourage more firms – particularly in rural areas, industrial parks and export processing zones – to join the scheme, Dong said.

Local authorities said they would regularly check prices in these outlets to ensure retailers were honouring their obligations and to resolve any problems that had arisen, he added.

The city CPI in August rose 1.06 per cent in the capital, according to the Ha Noi Statistics Office – a 15.56 per cent rise against last December and 22.66 per cent up on the same period last year.

Reserve rice may be used to beat hikes

National reserves of rice may be tapped into to reduce the price on the domestic market, which has soared over the last few weeks due to increasing export demand, a deputy minister of agriculture and rural development said.

Diep Kinh Tan said about 1 million tonnes of rice held in reserve could be released onto the market if necessary to reduce the local price.

However, so far, the rice price has not risen excessively, he said.

Over the last two weeks, the price of processed five-per cent broken rice for export has increased by roughly 10 per cent to US$538-$543 per tonne, while 15 per cent broken rice now costs $514-$519 per tonne.

Southern Food Corporation (Vinafood 2) has signed contracts to export 300,000 tonnes to Indonesia at a price of $550 per tonne. Meanwhile, rice exports to Thailand have also increased.

The price is expected to continue rising, even though Viet Nam has increased production by 4 per cent this year to 41.6 million tonnes against last year, Tan said.

Viet Nam Food Association said the price increase was due to increasing exports.

Meanwhile, the price of exported Vietnamese rise has surged to $568 per tonne (5 per cent broken rice) and $530 per tonne (15 per cent broken rice).

The high export price is expected to remain until the first quarter of 2012, depending on the price of Thai rice and the amount of rice India agrees to export, the association said.

By August 18, Viet Nam had exported 4.87 million tonnes of rice, worth $2.3 billion. Of that total, 4.1 million tonnes came from the Cuu Long (Mekong) Delta.

Monetary policy should be flexible: Deputy PM

The State Bank of Vietnam (SBV) should take prompt action to complete a system of mechanisms for strengthening banking inspection, said Deputy Prime Minister Vu Van Ninh.

Deputy PM Ninh made the request at a working session with the SBV on August 25. He asked the SBV to analyse business difficulties and give priority to each type of business transaction, especially the profit sharing between banks and businesses during the gloomy economic situation.

Regarding the gold market, the SBV should have long-term policies to stabilize the foreign exchange market and narrow the gap between the domestic and global prices of gold, Mr. Ninh said.

According to SBV, it will maintain lending interest rates and will only lower them when the rate of inflation drops.

The 14 percent ceiling on deposit rates will also be maintained to help credit institutions lower their lending interest rates, the SBV said, adding that they will be removed when need be.

The SBV will work with commercial banks to lower lending interest rates for the production sector to 17-19 percent a year.

The SBV has kept a close watch on the foreign exchange and gold markets to take appropriate management measures. It has also submitted to the government measures to stabilize gold prices in the short term and mobilise gold from the economy to increase the foreign exchange reserves, and a draft decree on gold production and business.

Vietnam, Italy businesses pursue joint opportunities

A workshop on capital assistance for Vietnam-Italy joint ventures to strengthen cooperative opportunities and investment between the two countries’ businesses took place in Hanoi on August 25.

The workshop was co-organised by the Vietnam Chamber of Commerce and Industry and the Italian Embassy in Vietnam.

At the event, the Italian side presented a government programme to support Italian-Vietnamese joint ventures.

The workshop discussed development trends in sectors and fields which have potential for cooperation, such as public services relating to energy, telecommunications, transportation, water and waste; agriculture; breeding; aquaculture and processing; handicraft products; microfinance; trade expos; tourism; cultural heritage preservation, and environmental protection.

According to economic experts, Vietnamese enterprises will receive many benefits through forming joint ventures with Italian businesses. The cooperation will also help Italian businesses develop new markets in Vietnam.

Vietnam sees growth in rice exports

Vietnam has so far this year exported 4.98 million tonnes of rice worth US$2.36 billion, up 11.14 percent in volume and 22 percent in value over the same period last year, said the Ministry of Industry and Trade (MoIT).

The Vietnam Food Association (Vietfood) is expected to export 7 million tonnes of rice this year.

This year’s rice output is likely to reach 41.6 million tonnes, 1.52 million tonnes higher than last year.

As from October 1 this year, rice exporters need certificates from the MoIT as businesses are now allowed to export rice without having to adhere to industry regulations.

Vietfood has asked rice exporters, who meet MoIT storage and husking requirements (regulated by Decree ND109/2010/ND-CP issued in November last year) to register early.

Under Decree ND109/2010/ND-CP, rice exporters are required to have a storage capacity of at least 5,000 tonnes and husking facilities with an output of at least 10 tonnes per hour.

Storage and husking facilities have to be located in cities and provinces home to rice granaries or international ports to serve rice exports.

Metalex Vietnam 2011 to attract 500 leading trademarks

The International Machine Tools and Metalworking Technology Exhibition - Metalex Vietnam 2011 - will be held in HCM city from October 6-8.

The event has attracted the participation of 500 global trademarks in the field of technology from 25 nations and territories around the globe. During the exhibition, there will also be five additional international pavilions from Singapore, China, Japan, Taiwan and the Republic of Korea.

At the same time, NEPCON Vietnam 2011- Vietnam’s Only Electronics Parts Manufacturing Event will also be held, showcasing the latest in robot technology, as well as displaying hi-tech products and services.

Seminars will also be held during Metalex Vietnam 2011 to meet the demand for the development trend of technology and manufacturing industry.  

Seminar discusses Vietnam-Republic of Korea cooperation

A seminar entitled ‘Economic cooperation between Vietnam and the Republic of Korea (RoK) - vision for 2020’, took place in Hanoi on August 25, with the attendance of senior Vietnamese officials and 40 RoK scientists and managers.

The event, jointly held by the Hanoi National Economics College and the Republic of Korea embassy, also saw the participation of many members of the embassies of other countries.

According to the seminar, Vietnam’s relations with the RoK have grown into promising bilateral ties of cooperation. The two countries’ trade revenues have grown strongly and steadily. Specifically, bilateral trade turnover in 2010 was 86 times higher than in 1990 and exceeded both countries’ expectations for the year by US$10 billion.

At the seminar, representatives of the Korea Fund said more efforts should be made to encourage cooperation among people of the two countries. They added that a Vietnam-Korea Research Fund will be set up soon.

Statistics from the Ministry of Planning and Investment show that the RoK is now the second largest investor in Vietnam in terms of capital and is the nation with the most FDI projects in Vietnam.

Italy offers loans to joint ventures
 
Joint ventures between Vietnamese and Italian businesses may qualify for financial support from the Italian Government, a conference in Ha Noi heard yesterday.

Priorities would be given to joint ventures involving in agriculture, breeding, fisheries, food-processing and handicraft, said Massimiliano Bertollo of the Italian Embassy to Viet Nam.

Energy, transport, waste treatment, microfinance, fair-trade, sustainable tourism and cultural and environmental projects would be also included, said Bertollo, who represents the embassy's development co-operation office.

Under Article 7 of Italy's Law 49/1987 on development co-operation, Italian companies could demand soft loans to create joint ventures for projects in dozens of developing countries including Viet Nam. The total budget for 2010-13 was 100 million euros (US$144 million), Bertollo said.

The article aimed to mobilise financial resources and add capabilities through public-private partnerships (PPP) as a move to promote inclusive and sustainable development, giving priority to the creation of jobs and locally added value as a synergy with Italian co-operation activities, Bertollo said.

The loan would be offered to an existing or new joint venture, he said, adding that a local partner had to control at least 25 per cent of total capital.

The soft loan could only be sought by the Italian partner. It could be up to 70 per cent of the Italian partner's share, to a maximum value of 5 million euros ($7.21 million).

This would be a valuable opportunity for Vietnamese companies to establish join-ventures with Italian partners and take advantage of a big loan, he said.

Through these ventures, Vietnamese firms could access advantageous technologies and update their knowhow from their Italian counterparts as well as seek new export chances in the EU. The Italians would have the chance to further penetrate the vast markets in ASEAN, Japan and China, he said.

Despite an increasing demand for capital, Vietnamese enterprises had encountered many difficulties accessing credit resources, said Viet Nam Chamber of Commerce and Industry chairman Vu Tien Loc.

Accessing capital through the PPP model would be an ideal option for firms in the context of skyrocketing interest rates, Loc said. He hoped that, with financial support from the Italian Government, more joint ventures would be established. Bilateral trade between Viet Nam and Italy has developed from $1.2 billion in 2007 to $1.48 billion in 2010. Among Viet Nam's key exports to Italy were footwear, agricultural goods, seafood and furniture.

Meanwhile, Italian companies have paid increasing attention to the Viet Nam market. As of July, Italian businesses had invested $188 million in 39 projects in Viet Nam. That helped Italy rank 31st among countries and territories making investment in the country.

Vietnam’s investors foray into African markets

Vietnamese investors are pumping into African markets, which are offering many preferential policies to attract foreign investment flows.
 
African trainees attend a training course at a wood processing plant of the Truong Thanh Furniture Corporation

Furniture maker Truong Thanh has inked an agreement with South Africa to make strong investments in the African country.

The Vietnamese enterprise has finished the training course for 21 trainees from the African country.

“At the outset, we planned to hold the course in three months,” says Vo Truong Thanh, general director of Binh Duong Province-based firm.

“But then we gave those foreign trainees two more months as they would become the major staffs of our factories in South Africa.”

Under the agreement, Truong Thanh’s wood processing plants in South Africa will create 300-1,000 jobs, while the amount of Vietnamese labors will make out 10 per cent of the total workforce.

Truong Thanh will build a wood processing plant with an investment of $30 million, grow 10,000 hectares of forests for materials and open show rooms in the African country, Thanh says.

Software developer FPT has signed a deal with Nigeria’s 21st Century Technologies to provide broadband and digital services and telecommunication solutions.

Military-run telecom Viettel has been granted license to provide mobile phone services in Mozambique.

Figures from the Africa, West and South Asia Markets Department (AWSAM) indicate that 13 investment projects have been carried out in seven African countries and territories, with the total registered investment of more than $777 million.

Vietnamese investors have invested in various sectors, including oil refining, telecommunication and wood processing.

Local investors are pumping into African countries including South Africa, Mozambique, Central African Republic and Nigeria, which are offering preferential policies to attract foreign investments, according to AWSAM.

Preferential policies have encouraged Vietnam’s furniture maker Truong Thanh to opt for building a wood processing plant and growing forest in South Africa, says general director Thanh.

“South Africa’s government offered us low-cost loans, which amount to 50 per cent of the total investment,” he says.

“It also gave us 30 per cent of the costs of equipments and covered the expense of training local employees for the wood processing plant.”

Statistics from the Vietnam General Department of Customs show Vietnam’s export to around 10 African countries was worth $2.1 billion in the first seven months of the year, a significant year-on-year increase of 209 per cent.

Among the main exported products are rice, seafood, textile and furniture.

FTA to increase trade with Russia

A free trade agreement between Vietnam and the Russia, Belarus and Kazakhstan customs alliance is expected to reduce tariffs on Vietnamese goods exported to Russia.

Dang Hoang Hai, the director of the Ministry of Industry and Trade's European Market Department, said the agreement would reduce barriers to services and trade, simplify customs procedures and improve payment conditions.

It will also increase investment, tourism activities and the number of remittances.

The two sides are conducting research on the FTA's impact and final negotiations on the deal are expected soon.

Trade between Vietnam and Russia had great potential but had yet to be fully tapped, said Alexander Kardo-Sysoev of the Russian Trade Office in Vietnam.

He blamed the situation on a lack of information about each other's markets and geography.

"Vietnam mainly export raw materials and semi-processed farm produce, and their costs go up due to high transport expenses," he said.

He called for spreading the cost by increasing exports of value-added products and refined goods.

Hai said Russia is a promising market for wooden products, but the current high import tariff has prevented local companies from increasing their export to the market.

In addition, he said payment risks and taxes as well as non-tax barriers in Russia have discouraged Vietnamese businesses from entering the market.

Letters of credit are not popular in Russia, and Russian importers usually pay an advance of only 20-30 per cent, posing a high risk for exporters saddled with unreliable clients, he explained.

He urged businesses to improve the quality of their exports as the Russian market requires high technical standards, even higher than the EU's.

Last year, two-way trade between Russia and Vietnam was worth $1.8 billion. The two countries have targeted $3 billion by 2012 and $10 billion by 2020.

Vietnam imported goods worth $353 million from Russia in the first six months of this year, mainly oil and petrol, steel, fertilisers, and equipment.

Vietnamese exports were worth $628 million, with the major items being seafood, textiles, footwear, agro-forestry products, and handicrafts.

PCCW Global and FPT Telecom interconnect Ethernet networks

PCCW Global, a subsidiary of Hong Kong’s premier telecommunications provider, PCCW Limited, and FPT Telecom Corporation (FPT), Vietnam’s leading telecommunications services provider, have interconnected their Ethernet networks for improved international network coverage and service availability.

This collaboration is an expansion of the long-standing relationship between PCCW Global and FPT since their MPLS networks interconnected in 2008.

The interconnected MPLS and Ethernet infrastructures allow PCCW Global and FPT to offer enterprise customers MPLS VPN and Switched Ethernet with different classes of service (CoS), enabling optimum integration of offices and applications in any corporate environment with minimal capital investment.

Stephen Pang, PCCW Global’s senior vice president of Asia Pacific, said, “We are pleased to continue our long-term relationship with FPT. The enterprises in Vietnam have been looking for the best international connectivity solutions for overseas expansion and the collaboration will enable PCCW Global to capture this rising demand.”

FPT Telecom’s vice president Nguyen Van Khoa, said, “FPT is excited to extend the strategic relationship with our strong partner PCCW Global. With this collaboration, our customers will be able to enjoy full MPLS and Ethernet coverage of virtually anywhere in the world, and will further enhance our selling efforts to Vietnamese enterprises or Vietnam based enterprises to access globally.”

PV