Local firm wants to take over Nam Can Port

A local company whose name is not yet revealed has expressed its desire to take over Nam Can Port, which has been inactive for years as its operator is struggling with financial distress, said a senior source from the government of Ca Mau.

Located on the left bank of the Cai Lon River in Ca Mau’s Nam Can District, Nam Can Port was upgraded from a river port to a seaport in 1995 with total investment of over VND111.6 billion. The units under the Ministry of Transport were in charge of design, supervision and execution.

As per the design, Nam Can Port is capable of catering to vessels weighing 5,000-12,000 tons and handling 800,000 tons of cargo every year. After receiving the port from the transport ministry, the government of Ca Mau set up a company to operate the port.

In late April 2006, at the request of Vinashin, the provincial government handed over Nam Can Port to the State-run shipbuilder. When Vinashin ran into troubles, the port was transferred to Vinalines.

The current operator of the port is Nam Can Port Company under Vinalines. An upgrade project worth over VND335 billion suggested by Nam Can Port Company has been granted an investment certificate from the authority of Ca Mau Economic Zone, but so far it has made little progress as the company is facing financial distress.

A leader of the Ca Mau Department of Planning and Investment told the Daily that it was essential that Nam Can Port be put into operation since the province now needed to ship seafood and fertilizers overseas. Currently, these items are transported in container trucks to Saigon Port for export, causing a waste of time and money and causing road damages.

Early this July, the leadership of Ca Mau asked the Prime Minister, the transport ministry and Vinalines to consider transferring Nam Can Port back to the provincial government for operation and investment.

A province-based company has shown its interest in operating and investing in Nam Can Port. When retrieving the right over Nam Can Port, the government of Ca Mau would discuss with this investor the way to accelerate investment in this port, said the source.

When Nam Can Port was established, Ca Mau Province hoped it would serve as an important gateway for export of agro-products. However, the port is now used as a bus station and a place for loading and unloading building materials.

Rice traders fret over extra conditions for export

Rice exporters are feeling uneasy about the information that Decree 109 will be amended with extra conditions for rice export, including the requirement for a material zone.

Nguyen Van Don, director of Viet Hung Co. Ltd., said he had voiced his opinion about this requirement at a recent meeting with representatives of the Ministry of Agriculture and Rural Development and the Ministry of Industry and Trade.

He said the current conditions set by Decree 109 issued in 2011, requiring rice traders to invest in infrastructure to get eligible for export, were reasonable. However, it is very difficult for traders to shoulder the stage of production, with both capital and expertise needed.

“Except the material zone requirement, we have no problem with the other conditions that will be added such as an annual export volume of over 10,000 tons in two consecutive years,” said Don.

A representative of Saigon Trading Group (Satra) expressed his concern over additional conditions for rice export as rice traders are now struggling with many problems.

“In the context of difficult export, setting extra requirements for infrastructure and material zone is even more difficult than granting rice export licenses in 2012,” he said.

In July, the Prime Minister requested the trade ministry to join hands with the agriculture ministry and relevant agencies to consider amending Decree 109/2010/ND-CP on rice trading and export in a bid to link production with processing.

The above agencies are asked to pass a rice exporters planning in which traders with material zones and those cooperating with farmers have the priority to become major rice exporters, while those who are simply traders are restricted for export. In addition, they have to draw up a roadmap to require major rice exporters to develop material zones or form partnership with rice farmers.

Expressway toll collection right to be transferred in Dec

The toll collection right over the HCMC-Trung Luong Expressway will be transferred this December after a bidding round slated for November to select a unit which will collect toll fees for five years, said a transport official.

Speaking to the Daily on Wednesday, Deputy Minister of Transport Nguyen Hong Truong said that the bidding price would be announced on October at the latest, and an official bidding round would be opened one month later.

Any capable investor can join the bidding irrespective of local and foreign organizations and individuals. Participating investors are required to have bank guarantees.

There have been two foreign investors eyeing the toll collection right of HCMC-Trung Luong Expressway, according to Truong.

Responding to a question why the collection right is only five years instead of 25 years as planned before, Truong said that if the collection right was longer, the bid price will be correspondingly higher, and it was not easy for investors to mobilize enough capital. The term of 25 years as previously signed includes the BOT Trung Luong-My Thuan section which has not been built, he added.

Under the scheme presented to the Ministry of Transport by the current operator Cuu Long Corporation for Investment, Development and Project Management of Infrastructure (CIPM), the transfer price is VND1.603 trillion, or nearly US$80 million, for a five-year collection term. Besides, there will be three phases of payment over a period of ten months.

Previously, BIDV Expressway Development Company (BEDC) has purchased the collection right of this expressway at over VND9.1 trillion to collect toll fees in 25 years. However, due to difficulties in capital mobilization, BEDC has given it back. Therefore, CIPM has been assigned to collect fees on behalf of the transport ministry since February 25, 2012.

HCMC-Truong Luong Expressway worth VND9.880 trillion has a total length of 62 kilometers, with the expressway stretching 40 kilometers and linking roads accounting for the rest.

Realty developers asked to make reports frequently

Real estate companies will have to frequently report on their project development as well as their operations, or else they would be penalized, when a new rule is applicable this October.

Circular 11/2013/TT-BXD requires realty firms to make reports on the basic information of their projects and regularly provide updates on the progress in project development until their projects are finished. They will also have to report on their operations, including trading and capital mobilization.

Having struggled with insufficient information about the property market, the Ministry of Construction now takes a drastic measure with this circular in a bid to force businesses to provide their data so as to make the market more transparent.

Over two years ago, the ministry planned to develop a set of indicators for the property market to closely follow the trading of apartments, terraced houses and land plots as well as properly leasing. However, the ministry so far still has not gone ahead with its plan due to the lack of information.

At a recent workshop, the HCMC Department of Construction said the lack of information was one of the current problems in the property market.

For the lack of database, there have been no accurate statistics on the number of ongoing property projects, total office and commercial space as well as property prices.

Although property project owners and trading floors have been long asked to make reports, there have been no sanctions forcing them to do so, said the department.

Even in certain cases when realty companies comply with this requirement, their data is questionable.

The problem would never be solved if management agencies did not receive reliable data from enterprises, said Nguyen Van Duc, deputy director of Dat Lanh Real Estate Company.

“Inaccurate data constitute a misleading report, and as a result, the illness of the real estate market will not be correctly diagnosed,” he said.

Citing the inventory ratio as an example, he said many enterprises deliberately made false reports so that others might think their projects sold well.

Under the new rule, if owners of property projects did not make reports, failed to submit their reports on time or provided inaccurate information, they would receive warnings on the first offense.

They would be named on the website of the construction ministry and the local construction department and have to pay penalties. It remains to be seen whether penalties will be heavy enough to force property firms to make reports and if data reliability will improve.

Agifish to double chartered capital

An Giang Fisheries Import & Export Joint Stock Company (Agifish), one of leading catfish processors in Vietnam, has announced share issuance to double its chartered capital.

The move aims to help the enterprise raise working capital for its Tra fish farming projects. Agifish, which is now capitalized at VND128.5 billion, will issue over 12.8 million new shares to existing shareholders at VND12,000 each. The shares will be offered to shareholders at the 1:1 ratio.

According to the enterprise’s prospectus, the enterprise aims to raise VND154.3 billion after this issuance to invest in three fish farming areas in Can Tho City, An Giang and Dong Thap provinces. Total investment for the three projects is expected at VND169.5 billion.

As of March, Agifish had 121 hectares under fish farming, of which water surface was 79.5 hectares, meeting 40-50% of its material demand. The enterprise expects to raise the ratio to 70% in the coming time to secure revenues of VND3 trillion and after-tax profits of VND95 billion this year.

Last year, Agifish obtained nearly VND2.7 billion in revenues and VND31 billion in after-tax profits.

The enterprise has announced August 15 as the record date for share issuance. Time for buying right transfer will be from August 29 to September 20 while registration time will be from August 29 to October 4.

The reference price of AGF (stock code of Agifish) on the ex-dividend date is VND23,500 each. The enterprise currently has three major shareholders, Hung Vuong Corporation with a 51% stake, Pan Pacific Corporation with 20.2% stake and State Capital Investment Corporation (SCIC) with nearly 8.2% stake.

SCIC early this week announced to auction Agifish shares on its website. SCIC offers over one million buying rights at the starting price of VND25,600 each, meaning that investors must spend at least VND37,600 to own an AGF share.

Time for registration and deposit will run till August 30.

Masan thrives with Nui Phao and new products

Masan Group achieved impressive growth in revenue and gross profit last quarter thanks to the launch of new products and the increased capacity of its Nui Phao project.

In the second quarter, Masan reaped over VND2.73 trillion in revenues, up 8.4% year-on-year, and its gross profit totaled VND1.11 trillion, up 7.1%, with a major contribution from Masan Consumer, says a business performance report published by Masan on Wednesday.

Its earnings before interest sums, taxes, depreciation and amortization (EBITDA) amounted to VND660 billion, an increase of 3.7% over the same period last year.

Masan Consumer, a subsidiary of Masan Group, continued to make sizable investment in the second quarter to promote brand building, with a focus on coffee trading at Vinacafe Bien Hoa.

Vinacafe Bien Hoa has introduced a new formula for Wake Up Saigon through a national advertisement targeting middle-class consumers. In addition, the company has launched a 2-in-1 instant coffee product named Phinn.

A new factory of Vinacafe Bien Hoa has been opened in Long Thanh, raising the capacity by 3,200 tons from 1,200 tons.

Masan Consumer also invested in convenience food with an ambition of spurring its share in the instant noodle market to some 30% by the end of this year.

Meanwhile, the Nui Phao project of Masan Resources marked important milestones in the second quarter. The project began to produce tungsten and copper ores meeting international standards and sales revenue was recorded for the first time.

Recently, the Nui Phao project has successfully produced sodium tungstate from deep processing of tungsten ore.

A sales guarantee contract has been signed between Masan and H.C. Starck, one of the world’s leading tungsten producers.

H.C. Starck holds a 49% stake in a joint venture running the Nui Phao project with an aim of producing high value-added tungsten ores in Vietnam. The joint venture will help increase the surplus value of the Nui Phao project through deep processing of tungsten.

The first half of 2013, according to Masan Group, was the period of major investment with the development of new products, the initiatives for Masan Consumer brand building and the operation expansion of Nui Phao Mine.

Devondale dairy company officially enters local market

With pure fresh milk products on offer, Australia’s dairy producer Devondale expects to soon dominate the local market with a market share of some 30% in the high-class fresh milk product segment.

Suzan Douglas, general manager for marketing, innovation & special projects of Devondale, said the firm’s dairy products have already been available in Vietnam in the last decade through local distributors. After scrutinizing the market, Devondale has decided to enter here thanks to the support of DKSH Vietnam as its local distributor, she informed.

Devondale is a subsidiary of Murray Goulburn, a big dairy producer which turns out around one third of total milk output volume in Australia and posted total sales of US$2.4 billion in 2012. With a herd of up to 580,000 dairy cows with an annual yield of some three billion liters of milk, the company has shipped products worldwide.

Vietnam is considered as a strategic market by Devondale in Asia in the context that local demand for milk products is rising, Amar Srivastava, head of consumer brands in South East Asia, remarked.

The Vietnamese market with a population of 90 million people consumes up to 1.2 billion liters of liquid milk annually while local supply only meets 22-25%, forcing the country to resort to imports to make up for the shortfall, with powder milk products representing as much as 96%, he reported.

Devondale therefore is confident that it will be successful in the local market, citing its survey indicating up to 70% of Vietnamese people highly appreciate quality when shopping dairy products while local fresh milk demand is on the rise.

Prices of Devondale dairy products are pretty high, nearly doubling those of local ones, with one 200 ml Devondale Smart Milk pack priced at VND13,000 and one 200 ml Devondale Full Cream VND12,000.

Devondale’s products do not compete with domestic dairy brands but those coming from the U.S., Europe or New Zealand in the high-end segment, Srivastava noted.

Business assistance fund swells to over VND45 trillion

The Fund for Business Assistance, Rearrangement and Development managed by State Capital Investment Corporation (SCIC) currently has a balance of more than VND45 trillion, a fourfold increase from September 2008, says a SCIC newsletter.

Previously, the fund balance was kept confidential, but experts expected it would be huge and would provide a great help for State-owned enterprises to overcome their difficulties and carry out restructuring.

The Fund for Business Assistance, Rearrangement and Development has been administered by SCIC since late 2008, when it was still called the Central Fund for Business Assistance and Rearrangement.

Under the regulations for management of the fund dated July 2012, the fund was turned into the Fund for Business Assistance, Rearrangement and Development for more efficient management of earnings from State stakes in companies, including earnings from rearrangement of wholly State-owned enterprises. SCIC is in charge of fund collection and spending and has to make periodic reports to the finance ministry.

Regarding off-budget funds, the State Audit of Vietnam in a report reveals the fund for debt repayment had a balance of over VND35.6 trillion on December 31, 2011. The fund of interest rate difference achieved a balance of some VND360 billion in 2010 and the sum collected in 2011 and 2012 (about VND466 billion) is now deposited in banks.

Russian aid for training Vietnamese officials under an agreement on converting debt into aid as of end-2011 had reached US$12.32 million, or some VND256 billion.

The social insurance fund in late 2011 had some VND183.5 trillion idle for investment, and it has spent a total of VND180.9 trillion, up 31% against 2010.

However, the State Audit of Vietnam says the social insurance fund does not have specific plans for investment. In addition, the fund has shown signs of violations when lending its idle money to a finance leasing company under Vietnam Bank for Agriculture and Rural Development, leading to difficult debt recovery and risking a loss of VND1.05 trillion as of end-2011.

Card payments increase strongly

Payment via bank cards has become a strong tendency in the country with transaction value and card issuance volume shooting up recently, according to the central bank’s Payment Department.

In the second quarter, some 6.57 million transactions worth nearly VND27.9 trillion were made via cards, up 33% and 57% against the same period of 2012. The figures also moved up quarterly during the period.

These transactions did not include international payments, transactions by cards issued by overseas banks, money deposits, withdrawals or transfers of the same sender and recipient and payment transactions between banks and customers. Therefore, card transactions mentioned above were purely goods trading.

Local banks have seen issuance of both international and domestic payment cards increase. As of the end of the second quarter, the nation had 54.9 million domestic payment cards and nearly 5.3 million international payment cards. Of this, there were 55.7 million debit cards, 2.1 million credit cards and 2.3 million prepaid cards.

Although both payment revenue and issuance volume have leapt, the growth is still modest compared to the total number of cardholders. In the second quarter, a transaction was made on one of every nine cards nationwide, while each card posted up transaction value of less than VND500,000 in the second quarter.

The reason is that although a lot of cards have been issued, many are inactive and users mainly use cards for cash withdrawals from automated teller machines (ATMs).

Statistics of the central bank show that there were over 14,400 ATM and over 110,000 points-of-sale (POS) transactions nationwide by June 30. However, over 134 million transactions were made via ATMs with the total value of VND237 trillion while only 5.7 million transactions were made via POS terminals worth over VND29.6 trillion.

Bui Quang Tien, head of the Payment Department, said that although card issuance volume has shot up, many cardholders have yet to use cards to pay for goods and services. As a result, payment cards have yet to promote their roles while there has been increasing pressure on maintaining operations and injecting cash into ATMs.

As the Government is building a non-cash economy, the central bank is studying solutions to encourage payments via POS such as tax incentives for sales or payment services via this channel. The nation is expected to have 250,000 POS terminals by the end of 2015, Tien said.

Gold auction frequency reduced

From this week onwards, only two gold auctions will be organized each week instead of three as in the past four months, says a notice the central bank sent to gold bidders.

Gold auctions will be held on Tuesdays and Thursdays. The central bank will announce in advance the volume of gold to be auctioned and the maximum and minimum amount each unit can buy.

This notice is consistent with the statement made by the central bank after stopping selling gold for banks to settle their gold contracts in early July.

A gold bidder remarked the demand for the yellow metal among citizens was declining. Thus, the reduced frequency of gold auctions does not affect gold reserves at banks and companies.

Meanwhile, the gap between local and global gold prices on Tuesday was narrower than last weekend. With around two tons of gold supplied each week, it is expected that the price gap will not widen.

At the gold auction on Tuesday, the floor price was VND37.6 million per tael, equivalent to the buying price quoted by gold trading companies. Most of the participating units made their bids, said the above bidder.

Saigon Jewelry Holding Co. (SJC) at 11 a.m. on Tuesday quoted the precious metal at VND37.55 million for buying and VND37.95 million for selling, unchanged from the preceding day. Meanwhile, gold in the New York market this Monday night surged from US$1,314.7 to US$1,337.3 per ounce, an increase of US$22.6.

As such, the local gold price on Tuesday was about VND3.8 million per tael higher than the world price, versus over VND4.5 million last week.

Meanwhile, the U.S. dollar on Tuesday was a little weaker.

After hiking the greenback from VND21,100 to VND21,140 last weekend and early this week, most banks on Tuesday quoted a slightly lower price. Each U.S. dollar on Tuesday bought VND21,120-21,125, down VND15-20.

Meanwhile, in the unofficial market, one U.S. dollar exchanged for VND21,220, just 0.4% higher the price quoted by banks.

Falling demand hits desktop computer firms

Desktop computer trading and assembly companies have been forced to make business changes to survive tough times in the context that market share of the product has constantly plummeted in recent years.

A recent report of market research firm IDC indicates local sales of desktop computers have dropped by an average of between 15% and 30% in the last two years. Demand has come from companies, offices and the educational sector, especially the areas that are still making heavy investments in computer education.

According to Nguyen Duc Dien, public relations manager of Robo Technology Investment and Development Joint Stock Company, his firm has suffered a sharp fall in desktop computer sales volume in the last five years due to staggering technological development and rising laptop and tablet computer demand.

The desktop computer segment is also affected by import tax rate cuts soon to be applicable in line with the country’s trade agreements.

The Tax Policy Department under the Ministry of Finance has recently informed Vietnam by 2014 will slash import tax rates to 0% on completely built-up computers under the World Trade Organization’s commitment. The tax reductions have directly caused negative impacts on local electronic assembling companies, including computer assembling firms.

The local computer market has been scaled down and has been dominated by imported products, prompting many enterprises in the industry either to go bust or to switch businesses to trading or services activities.

At a recent seminar in HCMC, Tran Thi Bich Ngoc, deputy director of the Import-Export Department of the finance ministry, reported nearly half of around 60 local electronic components and computer-assembling enterprises were forced to shut down due to the import tax rate reductions. The tough business conditions have forced a number of computer assembly firms to change business strategies.

Dien added that his firm was undergoing restructuring and was accelerating information technology services instead of only focusing on assembling and selling computer components like before. Specifically, Robo has coordinated with Cisco to specialize in providing consulting services and solutions on desktop virtualization to local enterprises.

Two gas fields start operation

Vietnam Oil and Gas Group (PVN) has begun to extract gas from Hai Thach and Moc Tinh, two gas fields under the Bien Dong 1 project.

These gas fields are available for extraction in 25 years with an output of 8.5 million cubic meters of gas and 25,000 barrels of condensate per day.

The Bien Dong 1 project comprises two wellhead platforms named Moc Tinh 1 and Hai Thach 1, each weighing nearly 10,000 tons, a processing platform with a weight of nearly 21,000 tons and a condensate floating storage and offloading (FSO) vessel, says a statement from PetroVietnam Gas Corporation (PV Gas) on Tuesday.

Last Wednesday, the first gas from Moc Tinh 1 wellhead platform safely flowed through a 20-kilometer pipeline to the processing platform. Gas will be transferred onshore via Nam Con Son pipeline under a gas distribution contract with PV Gas.

Gas extraction from Hai Thach and Moc Tinh helps ensure energy security for Vietnam in the coming time.

An expert in gas-fired power generation said that with Hai Thach and Moc Tinh gas fields now in operation, gas-fired power plants in the nation’s south would have more stable gas supply. The estimated gas volume of two billion cubic meters per year is enough to feed three plants that are as large as Nhon Trach 2.

Auto assoc revises up sale forecast for 3rd time

The Vietnam Automobile Manufacturers’ Association (VAMA) has revised up the auto sales forecast for this year to between 110,000 and 112,000 units from 108,000 last week, the third time it has made an upward adjustment.

July’s auto sales announced on Tuesday reached 9,360 units, rising by 23% year-on-year. This is the fourth month in a row the sales volume has exceeded that of last year’s same periods.

The total auto volume sold in January-July increased by 18% to nearly 59,200 units, with car sales rising 25% on-year to over 23,800 units and truck sales increasing 13% to 35,380 units.

Forecasts have been continuously adjusted up in recent times.

Auto sales of the domestic market were some 93,000 units last year, down 33% from 2011. Therefore, early this year VAMA forecast the year’s sales at around 100,000 units.

However, with April’s sales results higher than forecast, VAMA predicted the auto volume sold this year might hit some 103,000 units, or 3% higher than the initial forecast.

The month of May witnessed another robust sales figure, totaling 9,731 units, up 11% from the previous month and 42% from last year’s same period due to a reduction in new auto registration fee on under-nine-seat cars. This upsurge prompted the association to adjust the auto sales volume to 108,000 units.

According to auto firms, growth of the auto market in the past months mainly results from the Government’s development policy, especially the registration fee reduction for car buyers.

The sales volume is forecast to keep rising towards the year-end. Thus experts said that VAMA might continue to make more changes in sales forecast.

Among the automakers under the association’s umbrella, Ford Vietnam achieved the highest sales growth in January-July.

The automaker’s sales in July rose by 46% from last year’s same period to 685 units, taking the total volume in the seven-month period to 4,100 units, up 102%.

According to Ford Vietnam, sales of all products in its car lineup increased strongly, with several posting a two-fold increase.

The company sold as many as 790 Ford Ranger pickups in the seven-month period, rising 251%, while the respective figures of Ford Transit, Ford Escape and Ford Focus were 930 units and 178%, 433 units and 112%, and 761 units and 105%.

Investors told to report on imported machinery

The Prime Minister has issued a directive requiring investors to explain technology and machinery they plan to import in dossiers applying for the investment certificates.

Enterprises will have to explain and make a list of machinery and equipment with their basic parameters and technical specifications. Besides, such a list must be approved by management agencies before the machinery can be imported.

This regulation will be a mandatory requirement for projects submitted to the authorities for licensing.

For technology, machinery and equipment that are part of the engineering, procurement and construction (EPC) contract, enterprises must make a separate list with information about specifications, features, origins, years of production, and their state of quality.

According to the directive, enterprises are allowed to import only new machinery and technology, and priority will be given to those of advanced technology, suitable with approved investment projects, and are energy efficient and friendly to the environment.

The ministries of technology, investment, finance and industry have to work closely together on monitoring the import of machinery, equipment and technology as well as to regularly report on compliance of enterprises, especially that of State corporations and groups.

There have been many enterprises importing old, outdated and substandard machinery and equipment, which does not meet business requirements, pushes up production costs and pollutes the environment. This problem partly results from the lax control of State agencies regarding the import of such products.

New ‘herbal’ rice introduced

Nghe An Province-based Vinh Hoa Company has just launched what it terms as “herbal” rice created from the VH1 rice strain which has high nutritional value as tested by the National Institute of Nutrition.

The Vinh Hoa purple rice has been successfully produced after a long time of studying and cross-breeding rice strains, said Vinh Hoa Company’s director Phan Van Hoa, who is also the inventor of the new product. He was speaking at a seminar on Vietnamese rice values held by Sai Gon Tiep Thi newspaper and Gao Restaurant in HCMC on Tuesday.

According to testing results of the Quality Assurance and Testing Center 1 (Quates1) and the National Institute of Food Hygiene Control, Vinh Hoa herbal rice contains many nutrients not available in other types of ordinary rice.

This rice variety has many micronutrients, vitamin A, B, lipid, calcium, iron, cellulose and especially omega (6, 9) which can help prevent cancer. It is rich in vegetable fat that does not contain cholesterol and is suitable for those on a diet or with heart diseases.

Its yield is as high as that of other varieties, Hoa said.

Farmed in northern Vietnam, the rice variety can turn out 7.4 tons per hectare. It can be harvested after over five months in the winter-spring crop and 106 days in the summer-autumn crop.

After farming rice in Nghe An Province, Vinh Hoa Company has also built a testing model in the Mekong Delta province of An Giang, targeting at transferring techniques to farmers in the region.

The purple rice has been used at Gao Restaurant, which is also its distributor.

Local shrimp exporters hope to win US anti-subsidy lawsuit

The Vietnam Competition Authority (VCA) is cooperating with the government’s lawyers and the Vietnam Association of Seafood Exporters and Producers (VASEP) to settle the US lawsuit against frozen warm-water shrimp imported from Vietnam.

Pham Huong Giang, Deputy Head of the VCA’s Trade Remedies Board, affirmed that the government of Vietnam does not provide any subsidy for local shrimp producers and exporters.

Vietnamese businesses and relevant agencies are actively cooperating with the US investigation agency to settle the lawsuit, which is unreasonable, she said.

She noted that local firms have answered the US Department of Commerce (DOC)’s inquiries on schedule and provided documents and evidence proving that they do not receive any subsidy from the government.

According to Giang, the DOC’s final decision on levying anti-subsidy duties on Vietnamese shrimp does not truly and properly reflect the real situation in Vietnam.

She said in its latest decision the Department lowers countervailing duties from 7.05% to 1.15% for Nha Trang Seaproduct Co, and from 6.07% to 4.52% for other local exporters.

However, she added, it maintains that Minh Qui Co, a subsidiary of Minh Phu Seafood Corp, will be taxed 7.88%, higher than the rate stated in its preliminary determination.

As a point of fact, Vietnam is imposed lower anti-subsidy tax rates compared to four other nations involved in the lawsuit, including China, India, Ecuador and Malaysia.  However, the rates are still higher than the lawsuit’s two defendants, namely Indonesia and Thailand.

Giang also raised her concern over double taxation as Vietnamese shrimp businesses are facing anti-dumping taxes ranging between 0.53% and 2.76%. This will create obstacles to local shrimp exporters to the US and heavily impact the lives of more than 630,000 aquacultural farmers in Vietnam which US consumers will also have to pay higher prices for imported shrimp.

The DOC’s final decision will be submitted to the International Trade Commission (ITC) for approval before being announced on September 26. If the ITC certifies that US businesses suffer property losses due to the Vietnamese government’s subsidy, the DOC will officially levy anti-subsidy duties on October 3, 2013. Otherwise, the DOC’s lawsuit against imported shrimp from Vietnam will come to an end when the ITC finds no property losses in US businesses.

Previously, Vietnamese steel pipe exporters won the US lawsuit after the ITC announced that US businesses suffered no losses.

Risks from high interest rates

With monthly interest rate reaching 3 per cent, investment advisory companies are luring huge capital amounts from the community which prove highly risky ventures since these monies are mostly poured into gold and forex trade but not serving production or business activities.

Hanoi-based Khai Thai Investment Advisory Company Limited was reported to offer customers 3 per cent per month interest rate, tantamount to 36 per cent per year, five times more than current mobilising cap at local banks.

Similarly, in the recent past Vipro Investment JSC, also based in Hanoi, launched an appealing ‘entrusted investment’ package where the customers would be given interest rates from 2-3 per cent per month (tantamount to 24 to 36 per cent per year) for their deposits from three month to 24 month terms at the company.

The country is now home to several dozen investment advisory firms providing entrusted investment services with similar interest rates to woo customers.

Usually, these firms require their customers to deposit money at least three months with a minimal amount of VND50 million ($2,380).

Such firms were reported to lure several dozen billion Vietnam dong (from hundreds of thousands to millions of US dollars) in the form of entrusted investments from their customers every month.

According to the staff at Khai Thai and Vipro, the main source of incomes from investment advisory firms like theirs comes from forex trading.

“The investors can put their mind at ease with save investments at Khai Thai. No investor incurred losses at our company in the past two years,” said a Khai Thai staff.

“Our company has a regulation that the advisory staff shall bear 75 per cent of the transaction order value if the orders entailed losses to investors, so the investors should not be worried,” the staff added.

Financial experts, however, assumed such investments were very risky. A typical example for this was the case with Golden Hanoi Financial Investment Company Limited’s southern branch in 2012. Accordingly, the branch denied paying back money to its customers when entrusted investment terms ended.

According to lawyer Truong Thanh Duc, chairman of Hanoi-based Basico law firm, the profit rate of 36 per cent per year is unrealistic for common production and business activities in current context. Besides, entrusted investment services relevant to gold and forex trade is also unusual, impinged on the law and the investors face losing their money at any time.

Senior financial and banking expert Dr. Le Tham Duong said entrusted investments as offered by such investment advisory firms were fraught with risks since this form of investment did not exist in any current legal document (including the Civil Code). Therefore, investors would be at disadvantages where disputes occurred.

GreenFeed Vietnam Joint Stock Company, a big producer of animal feed and targeting at clean food chain, has received much attention from investors.

There have been many local and foreign investors wanting to invest in GreenFeed Vietnam in the past time, which has been affirmed by the company’s communications representative. Currently, a Hong Kong partner is planning to invest in GreenFeed.

The representative said that GreenFeed was appraised at US$145 million in late 2011 and achieved a strong growth rate of over 60% last year. One of the strategic shareholders of GreenFeed is a Singaporean investor whose stake is not revealed.

According to GreenFeed, the firm may cooperate with one of the businesses to utilize its strategy in the future. “Meanwhile, the issue of selling GreenFeed to a partner as rumored is not what should be talked about right now,” the representative said.

According to another source, a large group specializing in food processing and animal feed production of South Korea has negotiated with GreenFeed to buy stake, but the two sides have yet to arrive at the stake proportion which will be sold and its price.

GreenFeed Vietnam’s orientation is to create a clean food value chain, from animal feed to farm and finally to supply clean food for consumers.

According to experts in the food sector, such a path is what many big international food groups have taken for a long time. This strategy, plus good business results in recent times, has made GreenFeed catch the attention of investors.

GreenFeed Vietnam Joint Stock Company established in 2003 in Long An Province as mentioned on its website www.greenfeed.com.vn specializes in producing animal, poultry and aquaculture feed. The company is one among the large producers of such feed as well as other products. It has five plants based in Long An, Dong Nai, Binh Dinh, Hung Yen provinces and Cambodia and over 1,000 employees.

Vietnam fast-food market sees bright future

The world of fast-food which is expanding in Vietnam, is expected to get a boost in the coming years with big new players arriving.

Since 1997, Vietnam's fastfood market has been on the rise with many big names such as Lotteria with 162 restaurants, KFC with 130 restaurants and Jollibee with 30 restaurants. The Subway restaurant chain announced its expansion plan in late 2012 and other names that are  becoming more familiar are Burger King, Pizza Hut and Popeyes.

Vietnam is a promising market with 90 million people, of whom over 65% are under 35 years old. Though people have tightened their belts during the economic downturn, the fast-food market is still growing at the annual rate of 26% while other industries saw a decline. Vietnam was also ranked 8th in the Asia Pacific region in terms of food and beverage business environment by Business Monitor International in 2011.

Lotteria Vietnam's business development director Nguyen Thanh Tam said they suffered a tough time when they were first established in 1998, and the growth rate only picked up in 2010 and now, they are expecting over 40% annual growth rate.

Kao Sieu Luc, Director of Asia Bakery and Confectionery, said they hope to provide bread for McDonald's in HCM City and Hanoi. "Eight years ago, the revenue from providing bread for fast-food restaurants only accounted for 2% of our total income, however, the figure went up to 28% in 2010. It's estimated that the revenue would rise to 32% this year." he said.

Marketer Hoang Tung said Vietnam's fast-food market witnessed the first milestone 10 years ago when KFC arrived and open the first fast-food restaurant chain. They will witness the second milestone in 2014, when McDonald's, the world’s largest restaurant chain, will open its first restaurant in HCM City.  Henry Nguyen, founder of Good Day Hospitality was given the license to operate McDonald’s in the country. The appearance of this giant may not only bring  fast-food closer to Vietnamese culture but also change the market shares again.

"Vietnamese people have already become familiar with fast-food. This is both an advantage and a challenge to McDonald's because competitors have already taken 90% of the market share and many prime locations." Lotteria Vietnam's business development director Nguyen Thanh Tam said.

A report in 2012 by W&S Group, an online market research group in the Asia Pacific region, with 272 people aged above 16, showed that young people come to fast-food restaurant at least once every three months.

Over 47,000 workers sent aboard in seven months

Viet Nam sent 7,230 guest workers abroad in July, bringing the total number of its guest workers in the first seven months of this year to 47,095, or 55.3% of its yearly plan.

According to the Department of Overseas Labor, under the Ministry of Labor, Invalids and Social Affairs, crucial markets such as Taiwan, Japan and Malaysia have been recruiting a higher number of Vietnamese workers compared to the same period last year.

Taiwan was the most attractive destination for Vietnamese laborers, hiring 23,270 in the reviewed period. It was followed by Japan with the employment of 5,068 people, Malaysia, 4,904 and the Republic of Korea, 2,751.

A labor cooperation agreement between Viet Nam and Laos signed on July 1 has promoted the export of Vietnamese laborers to Laos.

Confectionery enjoys a tasty growth rate against food rivals

Confectionery production will see the highest growth in the food technology industry, Vu Quang Hung, deputy head of the Ministry of Industry and Trade's Institute for Industry and Strategy Policies, has said.

Speaking at a conference discussing the development of the food technology sector by 2020 held in Ha Noi last week, Hung said the industry had a relatively high growth rate of 17 per cent in the 2006-10 period.

The food technology industry had become one of the most attractive sectors with a strong growth rate and high consumption, he said.

The sector's production value also showed high growth from VND6 trillion (US$285.7 million) in 2005 to VND17 trillion ($809.5 million) in 2011.

Of the total, confectionery production grew at 35 per cent, glutamate 10 per cent and instant noodles 10 per cent.

Confectionery was expected to expand a further 8 to 10 per cent annually from 2011 to 2014 and begin exporting by 2020.

He added that the food technology industry was targeting an initial 14 per cent export growth rate in 2020, rising to revenues of around $1 billion by 2030.

In addition, he said, the food technology industry showed remarkable changes. In 2011, instant noodles accounted for 30 per cent of the total while it took the lead in the sector in 2005, accounting for 40 per cent.

Confectionery production achieved impressive growth from 20 per cent in 2005 to 40 per cent in 2011.

The number of confectionery businesses also rapidly increased from 182 in 2005 to 324 in 2011.

The production was divided into three groups: imports accounting for 20 per cent, businesses holding high proportion such as Kinh Do Group, Hai Ha Confectionery Company and Bibica Joint Stock Company accounting for 42 per cent, and other enterprises.

However, he said confectionery consumption in Viet Nam was 1.9 kilos per person a year, which was much lower than the world's yearly average level of 2.4 kilos per person.

According to the industry's development plan, it targetted to achieve high and sustainable growth, improving product quality and diversification.

However, he said, the sector's competitive ability was mainly in domestic market while its exports were limited. For example, the glutamate export totalled only $100 million last year, which was much lower than its potential.

He said the sector should have a clear strategy for maximising local businesses' global competitiveness, upgrading assembly technology and promoting the reputation of its brands.

Deputy Minister Ho Thi Kim Thoa said the sector's technology and human resource quality was lower than other countries. The Government should be giving incentive policies, trademark registrations, trade promotions and accurate market data collection and analysis.

Thoa said global economic fluctuations made ensuring food quality, safety, and hygiene standards were reliably met all the more important.     

Breaking into lucrative Brazilian market

Businesses are advised to penetrate deep into the Brazilian market when this largest South American economy slashes taxes on numerous imports late this year.

Brazil raised tariffs on 100 Vietnamese industrial and processed products in September 2012 to protect its domestic production and limit the impact of the global economic downturn.

However, it later decided to cut import taxes on these products by 25%, and experts say Vietnamese businesses cannot afford to let such a potentially lucrative expansion opportunity slide idly by.

The decision is expected to benefit Brazilian sectors like metallurgy, chemicals, pharmaceuticals, machinery, vehicles, tyres and tubing, and construction materials.

It will also help contain inflation, reduce input costs, and improve competitiveness.

Imports are encouraged in Brazil as its input costs are currently unusually high, and the competitiveness of its consumer goods remains low.

The Vietnamese Trade Office in Brazil notes the country’s 195 million-strong population and impressive purchasing power makes it a market that should not be ignored. Notably, its import market share increased by 21.6% last year.

Vietnamese product prices are enticing compared to its international competitors, prompting Brazilian businesses to seek to import and distribute the products.   

Vietnam’s major export commodities include footwear, seafood, phones and components, computers, electronic appliances, garments, cotton fibre, steel, and machinery and equipment. Industrial product exports are becoming more popular.

Vietnam imports a range of famous Brazilian products—often for domestic production—like animal feed, soya beans, corn, cigarette materials, footwear and garment accessories, steel, machinery, wood and timber products, chemicals, and plastics.

Two-way trade turnover between Vietnam and Brazil has risen 65-fold over the past 12 years, from US$26.2 million in 2000[MM1]  to US$1.73 billion in 2012.

Despite the impressive growth, Brazil’s Vietnamese market share is an underwhelming 0.32%.

Vietnam Customs says two-way trade turnover hit US$1.030 billion in the first half of 2013, up 31.2%, of which Vietnamese exports generated US$499.4 million, up 57.6%.

The bilateral trade figure is expected to total US$2 billion by the end of 2013, with US$1 billion in Vietnamese exports. If such impressive growth is maintained, the trade value is predicted to rise to US$5 billion in the next five years and to US$8 billion by 2020.

Businesses are encouraged to boost trade promotions to capitalise this lucrative market. This year the Vietnamese Trade Office in Brazil has hosted a range of seminars and meetings, offering the business communities of the two countries to share information and establish partnerships.

A number of garment and footwear businesses have participated in international fairs and exhibitions in South America.

The office says businesses requiring further information and interested in establishing trade relations with Brazilian partners can send emails to its representatives, visit www.ecoviet.com.br for a list of reputable importers, or consult the websites of the Vietnamese Ministry of Industry and Trade.

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