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Ministry eyes Mideast market
The Middle East were emerging as a high-potential market for Vietnamese products, a senior official said at a seminar in HCM City yesterday.
Ly Quoc Hung, head of the Ministry of Industry and Trade's Southwest Asia and Africa Market Department, said that with a total population of 300 million, the Middle Eastern region, which consists of 15 countries, was an attractive market for Vietnamese exporters.
Since their economies were based on oil and gas, many countries in the region except Turkey and Israel had to import large volumes of food to meet local consumer demand, he said.
Le Thi Cam Van, director of the Ben Tre Import-Export Company (Betrimex) which does good business in the region, said demand from these markets was very stable since they were less affected by the global economic downturn.
The markets also did not require the same strict standards as the US, the EU or Japan, she said.
Hung said many countries in the region, such as Qatar and Saudi Arabia, were building large infrastructure projects, creating opportunities for Vietnamese companies to export building materials to the region.
In addition, the region also had a large demand for guest workers, he added.
Currently, around 6,800 Vietnamese labourers are working in Saudi Arabia. The country is willing to receive an additional 400,000-700,000 Vietnamese guest workers to diversify its guest worker sources, but local labour export companies were not able to meet the demand. Bilateral trade between the two sides has increased significantly in the past few years, topping US$2.15 billion last year.
Exports still modest
In the first nine months of the year, the figure reached $2.37 billion, of which $1.19 billion came from Vietnamese exports.
Viet Nam's key export items to the Middle East include rice, coffee, textiles and garments, computer and electronic components, footwear, seafood, rubber, coal, tea and wooden furniture. It imports petroleum, petrochemicals, fertilisers, chemicals, steel and plastic products from the region.
However, Viet Nam's exports to the region remained modest compared to their potential due to the lack of information on each other's markets, their geographic locations, customer preferences, legal systems and customs regulations, Hung said.
Moreover, instability in some places had also discouraged local business from exploiting this market well, Hung said.
Despite the potential, there were still risks that Vietnamese companies have to prepare for while doing business in the Middle East, including those associated with payments, Hung said.
To avoid this risk, payment should be made by banks via Letter of Credit at sight or exporters should negotiate with importers to receive at least 20-30 per cent of total export value in advance, he said.
Trade barriers set by importing countries in the region have also caused many difficulties for Vietnamese exporters since each country has its own regulations that are different from others.
Turkey, for example, requires strict product quality and other standards, and has a restricted list of eligible importers.
Exports to Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates must be labeled in accordance with requirements set by the Arab Gulf Countries' Council. Also, because the region had very low import taxes of 0-5 per cent, Vietnamese firms had to face harsh competition from foreign rivals, Hung said.
Domestic firms needed to study the region's business customs and customers' tastes carefully if they wished to penetrate the market successfully, Van of Betrimex said.
She also recommended that local firms focus on building brands to increase product value.
Companies should ask trade offices in the region for information about potential partners and co-operate with these offices to solve disputes (if any) as soon as possible, she added.
Van also asked Government organisations to intensify support for businesses via trade promotion activities and assist domestic enterprises in opening branches or representative offices in the region.
Work starts on linking three power plants with national grid
Construction of a transmission line to link the Krong No 2 and 3 hydropower plants and Yan Tann Sien Hydro-power plant in the Central Highland province of Lam Dong with the national grid began yesterday.
Trungnam Krong Noâ Hydro-power JSC and Red River Hydro-Power No 7 JSC will invest VND100 billion (US$5 million) to build the 26-kilometre, 110KV line.
Trungnam Krong No is building the 46MW Krong No 2 and 3 Hydro-Power Plants at an estimated cost of VND1.15 trillion ($57.5 million).
Red River has earmarked VND406 billion ($20 million) for the 19.6MW Yan Tann Sien Hydro-power Plant which is also under construction.
They are expected to ease the power shortages plaguing the country and also mitigate flooding in the lower section of Se Re Pok River in Dak Lak and Lam Dong provinces.
Trung Nam Group, the parent company of Trungnam Krong No, also plans to build a 200MW wind-power plant in Ninh Thuan Province.
Construction of the $500 million plant is scheduled to begin in Thuan Bac District next week.
High-quality salt plant takes shape in Ninh Thuan Province
The Viet Nam Development Bank branch in southern Ninh Thuan Province and Ha Long Ltd Company on Thursday signed a credit contract to build a plant processing high-quality salt.
The 40ha plant with a total investment of VND350 billion (US$16.6 million) will be built in an industrial park that processes salt, including iodized salt, in the province's Thuan Nam District. When complete, the plant will have an annual capacity of 200,000 tonnes.
The raw material for the project will be sourced from the 2,000ha Quan The salt field in Phuoc Minh Commune that has an output of 300,000-340,000 tonnes per year.
Provincial authorities have pledged to find solutions for problems relating to production and consumption, and to support enterprises in building trademarks for local salt products in order to ensure sustainable development of salt production.
The province has asked the Viet Nam Development Bank branch in the province to offer loans with preferential interest rates to businesses that have quality projects in accordance with the law to promote the province's socio-economic development.
Chinese in $300mil power deal
The Export-Import Bank of China signed yesterday an agreement with the Vietnamese Ministry of Finance to provide US$300 million in financing for the Vinh Tan Power Plant No2 in central Binh Thuan Province.
Electricity of Viet Nam (EVN) has sunk about VND23.4 trillion ($1.1 billion) into the coal-fired plant which has a capacity of 1,200MW and an area of 397ha.
The EVN started construction of its second plant in Vinh Tan in August, and will use the new funding to continue. The first of the plant's two turbines is expected to be operational in December 2013 with the second to follow in June 2014. At the ground-breaking ceremony in August, Deputy Prime Minister Hoang Trung Hai said the Vinh Tan No2 project would go a long way to easing the country's power shortage. It would also supply industrial and economic zones in the province. Coal-fired plants would help minimise the national electricity grid's dependence on hydroelectric power plants.
Power plants covered in the master plan will increase capacity to 50,000MW during 2006-2015.
Petec prepares for its first IPO
The IPO will constitute 13 million shares repres-enting a 5-per-cent stake in the company. The shares will be offered at an initial price of VND21,000 (US$1) and will be listed in 2011 to ensure liquidity.
Under the plans announced Thursday, the PetroVietnam affiliate would spend about VND1.7 trillion ($81 million) during 2011-15 to complete construction of petroleum warehouses and ports, as well as to beef up its distribution system.
The projects include PETEC Cai Mep, which will include a 200,000cu.m warehouse and a 60,000DWT port and is slated for completion in late 2012 and at a cost of VND698 billion (US$33.2 million).
The company will also invest VND40 billion ($1.9 million) in expanding the capacity of the An Hai petroleum warehouse by 20,000cu.m, as well as expading its Can Tho, Long An, and Ha Nam-Nam Dinh-Ninh Binh storage facilities.
These projects would increase the company's total storage and distribution capacity to 300,000 tonnes in 2015 – giving the company the potential to claim a 30-per-cent market share.
Petec now holds a market share of 13 per cent, following PetroVietnam Gas Corporation (PV Gas) and Petrolimex.
PetroVietnam deputy director Vu Quang Nam said the participation of foreign strategic partners was key to Petec's business development.
The company had sent a prospectus to some potential foreign investors and was waiting on their feedback, Nam said.
Under its plan, Petec will sell up to 43.8 per cent of its shares to one or more strategic partners, while PetroVietnam would continue to hold a majority interest.
PV Gas completed its IPO in October at an average winning price of VND31,000 ($1.4).
VNPost Express co-operates with French
P&T Express Joint Stock Company (VNPost Express) and GeoPost Intercontinental SAS (GeoPost) under La Poste Postal group (France) have signed a Memorandum of Understanding (MoU) in providing express parcel and logistical services in Viet Nam.
Under the MoU, VNPost Express and GeoPost will supply high-quality and economical national and international parcel services within GeoPost and VNPost Express networks.
Through the MoU, La Poste expressed its desire to strengthen the co-operative relationship between Viet Nam and France Post, while exploring opportunities to raise their position in international postal market through co-operation, direct investment and M&A.
Hundreds of farm products listed online
The first e-market for Viet Nam's agricultural, forestry and aquatic produce made its debut yesterday.
The site www.agro-mart.com.vn. hosts up to 150 businesses and is expected to help lower costs and increase efficiency, says its owner, the Agriculture and Rural Development Min-istry.
More than 340 products were immediately listed on the Vietnamese-English site.
Member enterprises can link their own web sites or "stalls" to the site as well as complete basic trans-actions.
Each Agromart member is also provided with an account to manage and update information about their products and services.
Deputy Agriculture and Rural Development Minister Diep Kinh Tan said: "Agromart will provide both enterprises and the public will have better access to information related to products and legal documents.
"Enterprises could also better establish and maintain contacts with customers and partners."
Agromart would also provide links with other units in the agriculture sector including the National Agro-Forestry-Fisheries Quality Assurance Department (NAFIQAD) and the Plant Protection Department.
Viet Nam's agriculture had scored significant achievements despite numerous difficulties and "growth of the sector is always high," the deputy minister said.
Total exports for 2010 is expected to be worth more than US$18.6 billion, an increase of 12 per cent compared with 2009.
Source: VNS
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