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BUSINESS IN BRIEF 19/3

HCM City’s trade promotion focuses on regional countries; Gov’t pledges support for Samsung; Big home loan rate cuts unlikely: experts; Funds prioritized for key traffic projects in city
Cut costs to integrate: U.S. execs

Domestic small and medium enterprises (SMEs) should cut costs and improve their competitiveness in order to integrate into the global supply chain, said U.S. multinationals at a workshop in HCMC on Tuesday.

The ASEAN SMEs training workshop called “Improving Competitiveness Tools for SMEs to Connect to Global Markets” was held by Vietnam Asia-Pacific Economic Center (VAPEC) in HCMC and the U.S.-ASEAN Business Council.

SMEs in Vietnam can save money and boost competitiveness by improving the supply chain and online payment and marketing methods, Emre Olcer, general manager of Procter & Gamble (P&G) Vietnam, told the event at the Saigon Times Group head office.

A company sees 15-40% of its costs associated with the supply chain. Therefore, if the chain is adjusted reasonably, the company can sharply reduce costs, said Jeff McClean, general manager of UPS Vietnam.

For freight forwarding and logistics firms, a modern business model is to customize their products. In addition, they have to connect e-commerce with the supply chain, he said.

There are now over 1,000 logistics companies in HCMC. Most of them still have to cover high costs and thus earn modest profits, leading to low foreign direct investment (FDI) in logistics.

To improve the supply chain, McClean suggested enterprises better understand the market, review their business models and choose third-party partners.

One of the reasons why Vietnamese enterprises bear high costs is the small number of SMEs making and accepting card payments, said Lorijon Bacchi, VISA country director for Vietnam.

The percentage of SMEs using cards to make payments in Vietnam is much lower than in other nations in the region like the Philippines, Thailand and Singapore, she said, adding SMEs mainly use bank cards to buy tickets and pay for tourism, entertainment and daily activities.

A survey by VISA Vietnam shows that the charge of 3.5% on each credit card payment is unattractive. The charge should be lowered as competition among banks is growing stronger and the number of e-commerce participants is increasing, she said.

HCM City’s trade promotion focuses on regional countries

The HCMC Investment and Trade Promotion Center (ITPC) will strengthen trade promotion activities in Myanmar, Laos and Cambodia to help HCMC-based enterprises sell products.

Speaking to the Daily on the sidelines of the meeting launching the year’s plan of ITPC held in HCMC on Tuesday, Pho Nam Phuong, deputy head of ITPC, said that the center would help enterprises sell products and expand distribution networks.

Therefore, Laos, Cambodia and Myanmar are the three major markets which have much potential and are Vietnam’s traditional markets.

In every country, ITPC will have different trade promotion programs, specifically with three exhibitions in Cambodia April, June and November. Besides, there will be promotion conferences and an exhibition to be held in Laos in May.

Meanwhile, Myanmar as the emerging market is considered to be full of potential. In addition to exhibitions, business groups of HCMC will visit and explore this market in June.

According to Phuong, besides these three focal markets, ITPC will continue exploiting established markets such as Japan, European countries, the U.S. as well as new markets like African and South Asian countries.

To make trade promotion programs work effectively, ITPC will work with trade offices in foreign countries to arrange meetings and facilitate business matching among enterprises, Phuong said.

The HCMC government will assist enterprises producing consumer goods by paying the advertising costs on posters, radio and Cambodia’s Apsara TV in June. Such assistances were offered last year and delivered high efficiency.

Most of trade promotion programs mentioned above have received positive responses from enterprises, most of which are ones operating in the sectors of textile, garment, footwear, food processing, electronics, and interior decoration, according to Phuong.

HCMC vice chairwoman Nguyen Thi Hong said at the meeting that ITPC should work with enterprises from other provinces and ask them to join those promotion programs for synergy.

Besides, ITPC this year will have four investment promotion teams tasked with calling for investments into HCMC in the high-technology and supporting industries. Promotion teams will visit the U.S. next month, Singapore in May, Germany in July and Cuba and Chile in September.

CAAV accredits VietJetAir engineers

VietJet Aviation Joint-Stock Co., better known as VietJetAir, has received an approved maintenance organization (AMO) certificate from the Civil Aviation Authority of Vietnam (CAAV), more than one year after the low-cost carrier launched commercial flights.

The certification allows VietJetAir’s engineers to conduct daily maintenance of its fleet consisted of six Airbus A320 planes, the carrier said on Wednesday. It said the accreditation made it more flexible in planning and controlling maintenance activities, helping reduce management costs and maximize operational efficiency.

Lai Xuan Thanh, director general of CAAV, said the AMO certification took effect from March 1 this year and would be reviewed on an annual basis.

“VietJetAir meets our requirements in excellence of manpower, engineering facilities, spare parts and tooling, and documentation,” he explained.

Thanh believed the certificate would further facilitate VietJetAir’s commitment to providing passengers with flights of safety and high-quality services at the lowest possible cost.

Desmond Lin, director of business development at VietJetAir, said the air carrier had continued to reinforce its aircraft fleet maintenance and operation quality, in addition to heavy investment in new, modern and cost-saving planes.

VietJetAir said it was now is supported by major aviation services and technology corporations, including Airbus, CyberSource and Singapore International Airlines Engineering Co. (SIAEC).

VietJetAir took off in December 2011 for its first route linking HCMC and Hanoi. One year later, the airline transported more than one million passengers on its six Airbus A320 aircraft that fly within a domestic network connecting HCMC, Hanoi, Dalat, Danang, Phu Quoc, Hue, Nha Trang, Vinh and Haiphong.

The private carrier VietJetAir commenced the HCMC-Bangkok service last month and also has plans to link HCMC and Hanoi with other Southeast and Northeast Asian countries later this year.

Synchronized IT standards needed for e-government

Vietnam needs to issue a common set of standards on connecting information technology (IT) systems between ministries and agencies and localities as soon as possible to help the e-government model develop in a sustainable way, local experts said.

According to Chu Tien Dung, chairman of the HCMC Computer Association, the absence of strategic plans of IT application at mid-level State management authorities has resulted in unsynchronized or even conflicting IT applications. Consequently, he said, many State agencies at all levels are making IT investments separately and inconsistently, Dung said.

Speaking with the Daily, Truong Minh Thuan, director of the Department of Information and Communications of the Mekong Delta province of An Giang, said there are several State entities using different software products on information system and administration documents management internally. This has made it difficult to connect and exchange documents among State agencies, with plenty of entities failing to connect with one another, he said.

“Failing to connect information systems among State agencies will hinder the development of the e-government model,” Thuan noted.

To deal with the situation, Thuan urged the Ministry of Information and Communications to soon set up a common set of connection standards to help develop suitable IT infrastructure at every agency. Software solutions must be able to get linked with one another to pave the way for local management authorities to exchange documents and handle administrative tasks in a consistent way.

Sharing the same view, Nguyen Van Hien, general director of Inet Solutions specializing in providing solutions based on open source codes for governmental agencies, said the information ministry needs to make specific details for common software. In this way, producers will conform to the criteria, allowing for software connection helping avoid the current costly and thinly-spread IT investment.

Gov’t pledges support for Samsung

The Government will offer Samsung Electronics Vietnam (SEV) favorable conditions for further development, including support in human resource training and establishment of a research and development center.

In Notice 102 of the Government Office signed this Monday, Deputy Prime Minister Nguyen Thien Nhan said SEV had closely cooperated with education facilities in Vietnam in human resource training.

Such cooperation activities are appropriate with the Government’s policy for human resource development. Therefore, the Government will create favorable conditions for SEV to further develop in Vietnam, said the deputy prime minister.

The Ministry of Education and Training is asked to join hands with the Ministry of Labor, War Invalids and Social Affairs and relevant agencies to look into the agreements on human resource training, development and supply, meeting SEV’s demand.

SEV is encouraged to continue to train information technology personnel in collaboration with education facilities in Vietnam like Posts & Telecommunications Institute of Technology and Institute of Information Technology under the Vietnam Academy of Science and Technology.

Regarding the research and development center, Deputy Prime Minister Nhan suggested SEV set up the center at Hoa Lac Hi-Tech Park in Hanoi and consider information security as a field for research.

SEV will discuss a suitable location with the authority of Hoa Lac Hi-Tech Park. If the company wants to place the center somewhere else, it has to ask the authorities for specific guidelines.

The Bac Ninh Industrial Zones Authority in November last year granted SEV a certificate to carry out the second phase of its cell phone factory, taking the total investment of SEV in this province to US$1.5 billion.

SEV needs an additional 40 hectares in Yen Phong Industrial Park to develop its plant in Bac Ninh into a large Samsung complex. In the second phase, SEV will produce not only cell phones, but also electronics and telecom products for export.

The second factory of SEV also receives great incentives from the Government.

SEV’s investment expansion plus establishment of the research and development center will raise its revenue to over US$20 billion and attract some 300 satellite companies, according to the authorities of Bac Ninh.

In 2012, SEV exported US$12.6 billion worth of products, nearly double the year-ago figure. The company currently has over 28,000 employees and will recruit 10,000 more this year.

Big home loan rate cuts unlikely: experts

Experts said there would not be a steep fall in home loan interest rates, while those in need of homes are still awaiting further cuts in house prices and lending rates before taking the plunge.

Banks keep launching preferential home loan packages with no difference in interest rates from packages they offered last year.

Sacombank has carried out a preferential program with VND1 trillion worth of loans for those wanting to buy, build or repair houses. Clients can borrow up to 100% of the value of home purchase, construction and repair contracts with a maximum term of 15 years for home purchase and ten years for construction and repair.

A preferential interest rate of 9.9% per annum is applied to such loans in the first two months. The rate will equal the bank’s deposit rate plus 2 percentage points in the next ten months and 4 points in the remaining years.

Borrowers do not need to pay principal sums in the first year for home purchase loans and six months for loans for home construction and repair. This program will last until May 31.

Meanwhile, home loans given by HSBC Vietnam have the highest interest rate of 13.5% per annum. The bank also has soft loans with a rate of 8.8% in the first three months.

Each client can borrow VND8 billion at most. The limit can be raised in some particular cases, said Phuong Tien Minh, senior manager of product management and development strategy and personal finance services at HSBC Vietnam.

Vietinbank has launched a VND2-trillion lending program targeting individual clients who want to buy houses or cars, or acquire land use rights. From now until the end of June, the bank will offer loans with an interest rate of 10% in the first three months.

Many other banks like Eximbank and Vietcombank have also set aside trillions of dong for home loans with preferential interest rates.

However, home loan interest rates have not fallen against the year-end and will hardly drop sharply in the coming time.

Minh predicted interest rates of home loans might go down 0.5-1 percentage point, equal to the rates three years ago. Lending rates are hovering around 13-16%.

Although house prices have been dwindling since June last year, the demand for home loans has not increased, suggesting that homebuyers are still waiting for deeper price and interest rate cuts.

From the middle of this year to early next year, the demand for home loans would get stronger as policies become clearer, said Minh.

One manager said his bank was offering loans at only 12% per annum, but the number of borrowers was negligible. He stated such a lending rate was already too low.

“Even those who have money available do not dare to buy houses, let alone those having to borrow loans. Only when house prices stand still or pick up will people rush to take out loans for fear of further price rises,” said a financial expert, who is a member of the National Advisory Council for Monetary Policy.

He added that as long as support for homebuyers remained on paper and solutions to the frozen real estate market have not been implemented, people will continue to play the waiting game.

Nestle Vietnam supports coffee replanting

Nestle Vietnam commits to support coffee farmers, subsidizing half of prices of coffee seedlings provided by the Western Highlands Agriculture & Forestry Science Institute (WASI) to replace the current aging coffee trees.

WASI said this kind of coffee variety can turn out a yield of seven tons a hectare, doubling the present average productivity.

Le Ngoc Bau, director of WASI, said Nestle Vietnam’s assistance is part of the public-private cooperation program between the two sides aimed at removing difficulties of coffee planting. Besides, Nestle Vietnam has also helped WASI upgrade its laboratory, purchase tissue implant multiplication equipment and construct an experimental area for growing coffee with resistance against diseases.

There are about 50,000-60,000 hectares of coffee that needs replanting in the next two years, WASI reports. The area was planted more than 25 years ago, with a yield slumping by up to 50% compared to the average. Many farmers have replanted coffee by seedlings without clear origins, with only 12-14% of the replanted area surviving until the second year.

Syngenta Vietnam Co. earlier also cooperated with WASI to introduce disease treatment methods for replanted coffee trees. Replanting one hectare of coffee costs some VND100-120 million, WASI said.

In related news, the Vietnam Association of Coffee and Cacao (Vicofa) reported that WASI in the coffee crop 2012-2013 will provide farmers with nearly 300,000 seedlings free of charge for replanting around 270 hectares. Vicofa will fund the seedling purchasing.

Nestle Vietnam is one of the enterprises carrying out supporting programs targeting coffee farmers such as the Sustainable Agricultural Initiative project, the Agriculture Competitiveness project and the Common Code for the Coffee Community.

* Vietnam currently represents 30% of the world’s coffee trade volume, but the country’s export turnover accounts for only 10% of the global value, indicating the need for deep processing in the local coffee industry.

Luong Van Tu, chairman of the Vietnam Coffee and Cocoa Association, said Vietnam exported some 1.6 million tons of coffee and earned over US$3.4 billion last year.

“The quality of export coffee is unstable. The country mainly exports coffee beans without deep processing,” he is quoted by chinhphu.vn.

He was speaking at the coffee outlook conference themed value added in commodity chain held in Daklak Province’s Buon Ma Thuot City last weekend as part of Buon Ma Thuot Coffee Festival.

Vietnam’s coffee growing area is large, but scattered, making it difficult for large-scale farming and processing. Old coffee trees currently make up 30% of the total coffee area, which may rise to 50% in the next ten years, said Tu.

In addition, Nguyen Van Hoa, deputy director of the Department of Crop Production under the Ministry of Agriculture and Rural Development, said climate change had led to difficulties in watering and many other problems such as poor coffee quality and weak competitiveness.

The country now accounts for nearly 30% of the world’s coffee trade volume, but only takes up a 10% portion of the global trade value. The reason lies in the small percentage of deep-processed coffee.

There are currently over 50 coffee processing plants with total capacity of more than one million tons. The volume of the deep-processed coffee is less than 10% of their output, said Doan Xuan Hoa, deputy director of the Department of Processing and Trade for Agro-Forestry-Fisheries Products and Salt Production.

Participants in the conference suggested Vietnam should focus on improving the quality of coffee beans and increase the proportion of deep-processed coffee.

The current processing capacity of soluble coffee and coffee powder is 80,000 tons. By 2030, it will rise to 135,000 tons, said Hoa.

For sustainable development of the local coffee industry, there must be a development strategy and uniform standards for export coffee. The area of certified coffee should be expanded while the inappropriate area should be removed, said Tu at the conference.

The conference was organized by the Western Highlands Agriculture & forestry the Science Institute and the Institute of Policy and Strategy for Agriculture and Rural Development under the agriculture ministry, says a report on chinhphu.vn.

Keppel Land keen on realty projects in Vietnam

The leader of Keppel Land during a meeting with HCMC authorities on Wednesday said that the group will continue investment in real estate projects in the country, including the Saigon Centre commercial center project in HCMC.

Besides, Keppel Land will also develop other projects such as Saigon Sports City and Riviera Point, said Ang Wee Gee, CEO of Keppel Land, who just wrapped up a visit to Vietnam.

The second phase of Saigon Centre project comprises a 45-storey complex with retail space, offices and apartments. Located on Le Loi Street in the heart of the city, the project is expected to complete in 2015, supplying the market with a 50,000-square-meter commercial center, grade A offices on a total area of 40,000 square meters and around 200 high-class serviced apartments.

Around 30% of the retail section has been leased via a deal signed with retailer Takashimaya, which has pledged to hire around 15,000 square meters in long term.

The first phase of the project has seen stable operations over many years.

The group will cooperate with Toshin Development Singapore Pte Ltd to set up an enterprise that will provide retail management services for Keppel Land’s projects in Vietnam.

The enterprise is also speeding up construction of Saigon Sports City urban complex in District 2. Once completed, the project will supply the market with around 3,000 condos.

In District 7, Keppel Land is developing Riviera Point, a riverside high-class condo project with 12 towers and 2,400 apartments. The first phase is estimated to finish in 2015.

Besides, Keppel Land is carrying out other large projects, including Nam Rach Chiec with over 6,400 condos, retail shops, commercial centers, education and healthcare facilities on the total area of one million square meters.

The group has committed long-term investment in Vietnam despite difficulties in the real estate market, saying that it will seek investment cooperation chances in the future.

Keppel Land up to now has won licenses to develop 18 projects in big cities such as Hanoi, HCMC, Vung Tau and Dong Nai with the total capital of around US$2 billion. The projects are expected to launch 22,000 condos onto the market.

Realty developers get nod to transform big-size condos

A number of projects on developing commercial homes and urban areas can be converted into low-cost homes or public facilities in line with a new circular just issued by the Ministry of Construction.

As per the circular, big-size condos can be split into smaller ones to enhance their affordability and attract customers, but the revised size will not be smaller than 45 square meters each, as provided for in the prevalent Housing Law.

Those projects to have their apartment size adjusted or converted into low-cost homes are commercial housing and urban area development schemes which were already approved by relevant authorities. But the projects must be those which have yet to start construction or already got off the ground but see their condos’ structure or usage purposes inappropriate with local demand.

For instance, project owners are allowed to adjust large-scale commercial condos into smaller ones or change low-storey apartment blocks and commercial condo buildings into low-cost homes or serviced facilities like hospitals, clinic centers, schools and hotels.

However, the adjustment is only applicable to construction works and apartment buildings whose developers have yet to sign capital contribution and trading agreements with customers. In case such agreements have been signed with homebuyers, the developers need to get written permission from all customers with before adjusting the structure or size of apartments or converting usage goals.

It is noted that the target commercial housing projects and urban area development schemes having 500 condos or more each will have to win permission from provincial authorities based on the construction ministry’s approval.

Specially, the ministry’s circular, which allows for developers to register changes from April 22, 2013 to December 31, 2014, rules that every apartment converted would not be smaller than the minimum 45 square meters designed for commercial homes subject to the prevailing housing law.

Construction departments in centrally-governed cities and provinces will be in charge of receiving and handling documents from developers for adjusting and converting housing projects. Registration for such changes should be between April 22, 2013 and December 31, 2014. The applications after that will be submitted to provincial governments for approval.

Realty developers pin high hopes on the prompt administrative procedures on conversion, which is set for less than 30 working days from the date of submission of documents as regulated by the circular.

Nguyen Van Duc, deputy director of Dat Lanh Real Estate Co., complained that his firm in the middle of 2011 applied for turning 15 flats of the Thai An apartment project into smaller ones from the initial 102-242 square meters but has received no response over the past 20 months.

VIDIFI to develop main roads in Thu Thiem

To accelerate the construction progress of four main roads in Thu Thiem New Urban Area in District 2, the HCMC government will hand over land sites to Vietnam Infrastructure Development and Finance Investment Co. (VIDIFI) sooner than expected.

The total investments of the four projects are estimated at VND7 trillion, and VIDIFI will carry out these projects under the build-transfer format and the format of ‘land in exchange for infrastructure’.

At a meeting held last Friday with the HCMC government, Duong Hong Thanh, deputy director of the HCMC Department of Transport, proposed the city to reconsider the ‘land in exchange for infrastructure’ format to remove difficulties for the investor. It is because VIDIFI does not have enough capital to construct such roads if the city makes the payment late or only assign the land sites until VIDIFI finishes constructing the four roads, he added.

After considering proposals of relevant agencies, HCMC vice chairman Nguyen Huu Tin has assigned the Investment and Construction Authority of Thu Thiem New Urban Area (Thu Thiem ICA) to give land to VIDIFI sooner. Besides, Tin stressed that the HCMC Department of Planning and Investment was responsible for the financial evaluation while the HCMC Department of Transport was in charge of technical consultation.

To construct four main roads in Thu Thiem New Urban Area, VIDIFI has signed a consulting deal with Japan-based CHODAI and South Korea-based YOOSHIN.

Funds prioritized for key traffic projects in city

HCMC this year will focus on key traffic projects, including 16 new projects and 12 ongoing projects.

On the priority list are the steel overpasses at major intersections in a bid to reduce traffic congestion. The overpasses at Cay Go Roundabout in District 11, Ba Thang Hai-Nguyen Tri Phuong crossroad in District 10 and Cong Hoa-Hoang Hoa Tham crossroad in Tan Binh District will be completed within this year.

The important projects that have been moving at a slow pace, such as Provincial Road 10 expansion, Thanh Da Canal landslide prevention and Nguyen Thi Thap Street upgrade, will have to be completed in 2013, said the HCMC government at a meeting on Monday.

As for the projects financed by other sources than the city’s budget, several of them are being developed on schedule. For instance, the Saigon Bridge 2 project is being built by the HCMC Infrastructure Investment Co. (CII) and will be finished late this year.

The ODA-funded projects like the metro lines no. 1 and no. 2 and the second phase of the Soai Rap River dredging project are also asked to accelerate implementation.

HCMC will spend over VND3 trillion on the 16 new traffic projects in 2013. The total fund for the key traffic projects in the city, including non-budget funds and ODA, is more than VND145 trillion.

Tat Thanh Cang, director of the HCMC Department of Transport, said the city would prioritize funds for the most urgent projects. A number of projects, despite their not-so-large scale, are so important that if they are not carried out early, economic development will be affected.

Citing the approach road to Hiep Phuoc Port as an example, the project is very urgent as the Soai Rap River dredging is set for completion in 2014.

Highway section in Quang Nam to get facelift soon

Civil Engineering Construction JSC No. 5 (Cienco 5) on Tuesday cut a deal with the Ministry of Transport to expand a section of National Highway 1 going through the central province of Quang Nam under the build-operate-transfer (BOT) format.

The highway section stretching 40 kilometers will be expanded into four traffic lanes, the transport ministry said in a statement released on Tuesday. Once completed, the section will allow for a designed vehicular velocity of 80 kilometers an hour outside the urban area and 60 kilometers an hour for the section passing through Tam Ky City.

To recoup the investment capital, Cienco 5 will operate a toll station in Tam Ky City for nearly 23 years starting from 2016.

Cienco 5 will start construction on March 24 for completion in two years. The project requires an estimated cost of some VND1.6 trillion, or around US$77 million.

Le Anh Tuan, a ministry official in charge of public-private partnership projects, said dividing the whole project into sections of about 30-40 kilometers in the current economic difficulties will be more feasible and suitable for investors.

Bank for Investment and Development of Vietnam, or BIDV, had earlier struck a deal with the ministry to provide a loan of VND30 trillion for the whole expansion project of National Highway 1.

Expanding National Highway 1 running from Hanoi to the Mekong Delta city of Can Tho with a total length of up to 1,260 kilometers costs more than VND120 trillion as calculated by the ministry.

In the meantime, the capital volume sourced from State budget, government bonds and toll collection right transfers is only some VND20.5 trillion. With the VND30-trillion loan by BIDV, the project is still short of about VND70 trillion.

However, to reduce the cost, the Government has decided not to expand National Highway 1 at sections running in parallel with expressways. The expansion is expected to be complete by 2016.

National Highway 1 is the country’s traffic backbone running from Huu Nghi border gate in the northern province of Lang Son to the Mekong Delta province of Ca Mau’s Nam Can District with a total length of 2,300 kilometers.

At present, the 1,887-kilometer-long Hanoi-Can Tho route already had 554 kilometers expanded.

The narrow road surface of the highway is said to have caused many serious traffic accidents over the years.

Riverside resort opened in Hue

Vuon Xua Co. on Tuesday will officially open a resort called Hue Riverside Resort lying on the Huong River’s bank in Thua Thien Hue Province’s Hue City.

Located at 588 Bui Thi Xuan Street, the four-hectare resort consists of garden houses with 40 rooms and offers many services for tourists.

“We have invested VND50 billion in this resort and will pour another VND50 billion to build rooms and other amenities,” said Phan Xuan Anh, chairman of Vuon Xua Co.

Before officially opened, the resort has received tourists, most of whom are cruise ship tourists.

Anh is also the key investor of Mekong Garden Co., which owns Mekong Riverside Resort covering seven hectares in the Mekong Delta province of Tien Giang’s Cai Be District. The resort has been operational for nearly one year, and the firm is under preparation to kick off the second phase.

“Currently, the resort is fully booked and we plan to start the second phase this summer. The resort’s total investment cost is also around VND100 billion,” he said.

More int’l cruise ships arrive in HCMC

The German cruise ship Columbus 2 on Monday made a port call at Saigon Port with 900 visitors on board.

Saigontourist Travel Service Co. is catering to the foreign visitors who will visit Ngoc Hoang Pagoda, enjoy water puppet shows and go shopping at Ben Thanh Market. The visitors will also visit Cu Chi Tunnels and take part in cooking classes before heading to My Tho City in the Mekong Delta province of Tien Giang.

The cruise ship will leave Vietnam on Tuesday.

Saigontourist has since early this year been busy handling international cruise ships visiting Vietnam regularly such as the Costa Victoria, the SuperStar Aquarius and the SuperStar Gemini. Every cruise ship carries an average of 1,500-1,800 visitors and crewmembers.

Meanwhile, the cruise ship Seabourn carrying 200 American tourists also docked at the city’s port on the same day, as arranged by Viet Excursion.

Phan Xuan Anh, chairman of Viet Excursion, said that his company on Monday also welcomed another American cruise ship named Silver Shadow with some 450 visitors to Chan May Port in the central province of Thua Thien-Hue.

Phu Quoc tourism achieves phenomenal growth

The number of tourist arrivals in Phu Quoc Island off Kien Giang Province since early this year has been rising sharply, almost doubling year-on-year.

This marks the first time the number of visitors to Phu Quoc has suddenly grown after the year-end peak season, said Le Minh Hoang, director of the Department of Culture, Sports and Tourism of Kien Giang Province.

Usually in the low season, Phu Quoc welcomed some 20,000 tourists each month, but last month the number of tourists visiting the island was 38,000.

Hotels on Phu Quoc are often full. Currently, there are about 17 flights and eight ships taking tourists to Phu Quoc every day.

“The new airport has connected Phu Quoc with many other localities. Traveling by sea is also more convenient thanks to two additional passenger ships, and thus the tourist number is surging significantly,” said Hoang.

In mid-December, Airports Corporation of Vietnam inaugurated Phu Quoc International Airport in Duong To Commune after four years of construction. The airport can receive long-range, wide-body aircraft like Boeing B777-300 and Boeing B747-400.

It is estimated that Phu Quoc Airport will have a capacity of 2.65 million passengers per year by 2020 and seven million passengers a year by 2030. Phu Quoc has been connected with the country’s big tourist centers, such as HCMC and Hanoi.

Hoang said the new airport encouraged many investors to accelerate their projects on Phu Quoc Island.

Four hotel and resort projects have got off the ground since early this year. The largest project covers an area of 250 hectares and consists of 1,000 rooms, while the remaining three have a moderate scale. A number of projects are being conceived.

There are now some 98 standard tourist accommodation facilities with more than 2,900 rooms on the island.

Last year, Phu Quoc welcomed around 400,000 visitors, an increase of 14% over the preceding year. The island is usually most crowded during the summer.

Ford Vietnam’s Feb sales rise 62%

Ford Vietnam on Tuesday announced that its February retail sales jumped more than 62% year-over-year to 351 vehicles, thus raising its market share for the month to 8.3%.

“We’re encouraged with a gradual and continuing recovery of the industry this year,” Laurent Charpentier, managing director of Ford Vietnam, said in a statement.

“We’re equally as pleased that customer response to our full lineup of One Ford vehicles continues to be very positive, and is helping widen the appeal of the Ford brand to so many new-to-Ford customers.”

The Ford Transit commercial van continued to drive its overall performance with February retail sales more than doubling the year-ago figure to 107 units.

In its third full month of availability in Vietnam, sales of the all-new Ford Focus also more than doubled from the previous generation Focus a year ago to 66 units.

The new Ford Ranger sales rose 103% from a year ago to 57 units.

* General Motors Vietnam (GM Vietnam) on Tuesday launched the new Chevrolet Colorado pickup truck imported from Thailand.

The Colorado LTZ is equipped with an all-new Duramax turbo-diesel engine that provides a combination of performance and fuel efficiency, as well as better performance on Vietnam’s roads than other engines, the company said. This diesel engine is rated at 178 horsepower (130 kW) with a five-speed manual transmission.

Like a luxury car, the pickup has leather seats and automatic air-conditioning. The audio system includes six speakers along with a CD player, USB hub and Bluetooth wireless connection.

The four-wheel-drive, four-door pickup is available with seven colors. The pickup is distributed as a completely built-up vehicle imported from Thailand in GM Vietnam’s dealer network nationwide at a price of VND729 million per unit, including VAT.

High cashew price threatens local processors

Local cashew processors may run into deep losses as the raw cashew price at home has surged to over VND30,000 a kilo, up some VND7,000, which is contrary to a previous forecast of the Vietnam Cashew Association (Vinacas).

According to Vinacas, the high cashew price in Binh Phuoc and Dong Nai, two provinces with large cashew areas, results from drought. Speculators have chased up the price to buy a large volume of cashew in the hope of pushing up the price to VND40,000 per kilogram.

Small cashew processors are purchasing more cashew now, pushing the price up after a short time. Meanwhile, big enterprises do not buy cashew locally but import it from Africa at a price of US$850-950 per ton, or VND18,000-20,000 per kilogram.

Nguyen Duc Thanh, chairman of Vinacas, said that with the current export price of nearly US$8,000 a ton, enterprises buying local cashew for export would suffer a loss of around US$330 per ton while they would earn a profit of US$180 per ton if using imported cashew.

According to Thanh, Vietnam may have a poor cashew crop, but other cashew exporting markets such as India, Nigeria and Brazil achieve higher yields. Therefore, the low cashew volume in Vietnam will not affect the global supply.

Vietnam currently ranks fourth in the raw cashew production volume but has ranked first in cashew nut export volume since 2006. Statistics of the Ministry of Agriculture and Rural Development showed that Vietnam exported 223,000 tons with a total value of US$1.48 billion last year.

Apart from the cashew price, the coffee price has also risen over the past days to VND44,400-44,600 a kilo in the Central Highlands. This is the highest price since September, 2011.

The coffee price, according to the Vietnam Coffee and Cocoa Association (Vicofa), rises due to drought in the region, and the country’s coffee production can drop by 30% if not sufficiently watered.

Besides, Vietnam is the biggest Robusta coffee exporter, and thus information about the drought can push up the market price.

However, the pepper price currently stays at VND120,000 per kilogram, down VND5,000 from the same period last year. It is because Vietnam’s pepper export in the year’s first two months rose by 106% with over 20,000 tons, and importers have imported sufficient amounts.

According to the Vietnam Pepper Association (VPA), the pepper price decline is just a short-term fluctuation, and the price will go up in the long term.

VASEP says not pinning hopes on U.S. market

The Vietnam Association of Seafood Exporters and Producers (VASEP) has said it is not pinning hopes on an impressive growth in sales to the U.S. market this year though it was the second largest importer of Vietnamese seafood last year.

VASEP was speaking about this outlook while local processors and exporters were joining the International Boston Seafood Show (IBSS) in the U.S. from Sunday to Tuesday, one of the biggest seafood fairs in the world.

The country exported nearly US$1.2 billion worth of fisheries to the U.S. in 2012. Truong Dinh Hoe, general secretary of VASEP, said it would be encouraging if local seafood companies are able to maintain the same export growth as last year.

Meanwhile, Tran Thien Hai, chairman of VASEP, predicted this year would continue to be a difficult year for the Vietnamese seafood industry, especially shrimp and tra fish segments.

According to VASEP, the annual IBSS event in Boston is considered a venue for exchanges between worldwide seafood exporters and importers, and for equipment and services providers to introduce products involved in the fisheries industry.

Regarding price undercutting by Vietnamese seafood exporters at international seafood fairs, the situation would be controlled this year, said Hai, who is also general director of Minh Hai Seafood JSC in Bac Lieu Province.

“A few enterprises committed acts of price undercutting at some fairs in the past because they wanted to reduce inventory as soon as possible,” Hai explained.

However, he said, the local seafood industry has experienced protracted difficulties, so VASEP members were aware that selling on the cheap would cost them dearly.

Ministry okays sugar export

The Ministry of Industry and Trade finally allowed for sugar exports after the Vietnam Sugar and Sugarcane Association (VSSA) had petitioned for the permission three times.

However, VSSA declined to elaborate on the specific export amount while the association earlier asked for permission to export 300,000 tons of sugar in the sugar crop 2012-2013 to cut down on inventory.

An official of VSSA expects sugar exports to help local plants reduce mounting sugar inventories to have enough money to pay farmers. Only trading companies in mountainous areas and Vina Sugar I Corporation and Vina Sugar II Corporation are allowed to export sugar.

The official is concerned that troublesome procedures will take local export companies a lot of time to export sugar. His concern is based on the fact that the industry ministry on November, 2011 allowed players in the industry to ship abroad 30,000 tons of sugar but the exporters only completed the job in March, 2012 due to intricate procedures.

Sugar inventories at local plants and trading enterprises reached more than 450,000 tons as of Monday as reported by VSSA.

However, it is not easy to ship sugar abroad now due to the low competitiveness of the local product. Sugar prices stay at VND13,800-14,500 a kilo at home while sugar products bound for the Chinese market are priced at  VND14,180 a kilo.

Meanwhile, the sugar price on the London commodity exchange with delivery slated for May is US$534 a ton or VND11,200 a kilo, meaning local sugar prices are about US$120 a ton higher than global prices.

Netherlands helps Vietnam boost food exports to EU

The Netherlands will assist Vietnam in boosting export of processed food products to Europe and carry out the cooperation program’s second phase between HCMC and Rotterdam, said Consul General in HCMC Simon Van der Burg.

Speaking at a meeting with HCMC vice chairman Le Manh Ha on Wednesday, the consul general said that the Netherlands’ Center for the Promotion of Imports from Developing Countries (CBI) would sign a memorandum of understanding with the HCMC Investment and Trade Promotion Center (ITPC) next month to help Vietnam ship more processed food products to the EU market.

This is new expansion of the program of training export consultants for the food processing industry which was jointly conducted by CBI and ITPC in 2011 and 2012.

According to a local economic expert, such assistance is very necessary. CBI has previously helped Vietnamese enterprises so that they can compete in the EU market, but now it will facilitate enterprises to export products to European countries.

Regarding the cooperation program between HCMC and Rotterdam, the deputy mayor of Rotterdam will visit Vietnam early next month.

“After the first phase of the program ends, the two cities will discuss and signed the cooperation for the second phase,” said Van der Burg.

Besides, the diplomat also proposed to organize the second Holland Village event in HCMC this November to celebrate the 40th anniversary of diplomatic ties between the two countries.

There were over one million visitors at the first Holland Village held in HCMC in 2010.

Cashew exporters required to meet food safety standards

Cashew processors failing to meet food safety and hygiene standards may not be given permission to export products, said Nguyen Duc Thanh, newly-elected chairman of the Vietnam Cashew Association (Vinacas).

In the long run, guarantee of food safety and hygiene should become a mandatory requirement for cashew exporters. It is a way to improve cashew export value, he said.

There are now about 100 cashew processing plants nationwide, but there are 330 cashew exporters, with only 22 having been granted ISO or HACCP certifications. A recent inspection by Vinacas and the Ministry of Agriculture and Rural Development finds many production facilities falling short of food safety and hygiene standards set by Circular 75 of the agriculture ministry.

Previously, Vinacas proposed only cashew processors with an annual capacity of 2,500 tons or above are qualified for export, but it has evoked angry responses. If the proposal was passed, 150 cashew traders, almost half of the total, would have to leave the playground.

“The idea of compulsory 2,500-ton capacity was thought up by 16 enterprises, and Vinacas included it in the draft decree to ask for opinions. However, this condition incurred displeasure, so we will eliminate it,” said Thanh.

Conditional export is indispensable not only in the cashew industry, but also in other farm produce industries. Therefore, Vinacas will continue to work towards this goal, he stated.

Can Tho calls for Korean, Japanese investors

Can Tho City’s government on Wednesday asked relevant agencies to set up plans to call for South Korean and Japanese investors to join infrastructure projects, especially industrial zones and residential areas, in the Mekong Delta city.

Vo Thanh Thong, vice chairman of Can Tho City, said that the Department of Planning and Investment and related units have been told to lure South Korean investors to Hung Phu 2A and Hung Phu 2B industrial zones (IZs), building up industrial workshops there.

For Hung Phu 1 Industrial Zone, local authorities have also asked the department to organize a business trip to Japan in a few months’ time to seek industrialists and investors for IZ infrastructure projects.

Local authorities will have measures in place to help complete these projects and start operating soon, Thong said.

Located in Cai Rang District and near Cai Cui Port, the three IZs were planned and handed over to investors around 10 years ago. However, infrastructure investment in these projects has been slow due to challenges in site clearance.

These IZs cover areas from 134 to over 260 hectares each but just small sections from 26 to 32 hectares in the projects have been cleared.

SOE reform will help FTA talks with EU: expert

Vietnam should boost reform of State-owned enterprises and make transparent its public acquisition procedures as these two efforts will facilitate the negotiations for a free trade agreement with the European Union, said an EU official.

The problems are how the Vietnamese Government identifies the role and position of State-owned companies in the economy and the Government’s viewpoint on public acquisition, he told reporters on the sidelines of the ASEAN-EU Business Summit 2013.

EU Trade Commissioner Karen De Gucht told assembled reporters in Hanoi last Friday that trade and investment ties between Vietnam and the EU are moving on the right direction, and the next step should be to foster such ties in a stable and sustainable manner. Such development requires both sides to have a fully-fledged FTA, he stated in response to a question if an FTA could be concluded in 2014.

“Vietnam and EU need to achieve a trade frame that will create bilateral benefits and the business growth should be controlled in the long-term as it is what we are looking forward to,” he said.

He said that the openness of Vietnam’s economy mainly pertains to the competition among enterprises. The State shouldn’t intervene in this competition but create a legal environment bringing transparency and fair competition for local entities, he cited. But he also said State monopoly is acceptable in certain areas.

Undergoing restructuring at State-owned companies is really important and urgent to the local economy and this is the State’s responsibility to do so.

“I hope that the active efforts to improve the role of State-run firms will lead to a more open economy. Since the first round of FTA negotiations, we have shared that is the job of the Vietnamese Government and that we are always interested in this area during the negotiation process,” he added.

EU now is the second largest trade partner of Vietnam and the country’s leading export market, with bilateral trade reaching US$29.1 billion in 2012, the Ministry of Industry and Trade reports.

Vietnam last year exported US$20.3 billion worth of commodities to EU while its imports from the partner totaled US$8.8 billion. Vietnam’s key products exported to EU are footwear, textile, coffee, wooden items and seafood.

EU is also the largest investor in Vietnam, with a combined 1,781 projects worth a total US$33.4 billion as of October, 2012.

Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR

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