Vietnam attends Baikal Economic Forum in Russia

A 12-member delegation from the Vietnamese Embassy in Russia headed by Ambassador Pham Xuan Son is for the first time attending the seventh Baikal Economic Forum (BEF-7) that opened in the Russian province of Irkut from Sept. 12-14.

Under the theme “State policy on the development of the Far East and Baikal region”, 1,795 delegates from 31 countries and territories, including renowned politicians, economists and businessmen, will discuss major economic issues of the host country and the world and analyse possible trends of the regional and international financial market.

Dozens of exhibitions, forums and conferences will be held within the framework of the forum, focusing on the economic cooperation between Russia and nations, organisations and regions worldwide.

There will be also a wide range of cultural and artistic activities to celebrate the 350 th anniversary of Irkutsk city.

The first BEF was convened in 2000. Since 2010, BEF has become an annual political and economic event of the East Siberia and the Far East jointly held by the Federation Council of Russia, the Russian Ministries of Regional Development; and Economic Development and Trade, and Irkut provincial authorities.

Logistics industry faces challenges to integration

Domestic logistics companies have only a year to meet commitments to integrate into global transport services.

A report from the Ministry of Industry and Trade states that about 60 percent of the country's commercial value is from logistics services, which make up between 15-20 percent of GDP.

The Vietnamese logistics industry has attracted a number of foreign investors and there are currently close to 1,000 companies that have been established in the country.

These firms have under performed in the domestic market and in the international market, according to the report.

The Vietnam Freight Forwarders Association (Viffas) says the Vietnamese logistics services have not yet fulfilled their potential.

The association says only 10 percent of companies truly provide logistics services and the remainder just work for foreign companies, adding that a lack of transparency has impacted on competition.

According to Viffas, Vietnamese companies are only able to supply simple logistics services.

Marketing abilities are also noted as weak, lacking professionalism, the association says.

Due to these shortcomings, about 70 percent of the market share was captured by foreign companies.

This figure may increase when the commitments to the World Trade Organisation to open the market to foreign transport service companies comes into effect in 2014, and similar commitments to ASEAN are put place in 2013.

Viffas has proposed to set up a national logistics committee and a logistic association to address these issues.
 
Govt targets 2012’s CPI below 10pct

Vietnamese government has set its goal of containing consumer price index (CPI) rise in 2012 to below 10 percent, according to a recent meeting.

Vietnamese government said at a recent regular cabinet meeting that its overall goal for 2012 is to continue to focus on curbing inflation, stabilizing the macro economy and achieving a reasonable growth associated with growth model renewal and economy restructuring.

The government also oriented some key socioeconomic indicators for 2012 with gross domestic product (GDP) growth at 6.5 percent, trade deficit and state budget deficit at lower than the actualized targets in 2011.

In 2011, trade gap target was below 16 percent of the export turnover and state budget deficit at less than 5 percent of GDP.

From now to the year-end, the government will direct the State Bank of Vietnam (SBV) to continue its close and flexible monetary policy in accordance with the market signs, gradually lowering the credit interest rate along with the downtrend of CPI and regulating credit growth at below 20 percent.

The central bank will also have to cooperate with Ministry of Public Security and related agencies to manage and control trading activities of gold and foreign currency.

The Ministry of Finance has been assigned to continue the tightening fiscal policy together with SBV’s close monetary policy to reduce budget deficit and save by 10 percent of frequent expenditures for the 9 remaining months in the 2011 fiscal year’s estimate.

The government also assigned the ministries of planning and investment and finance to complete the evaluation report on the socioeconomic situations in the first eight months and the whole year 2011, socioeconomic development planning in 2012, assessment report on the state budget in 2011 and state budget estimate in 2012, to submit to the National Assembly.

Vietnam's CPI in September is expected to slow down, reaching about 1 percent, thanks to the decline in price of some commodities, especially the reduction of VND500 per liter of gasoline recently, according to economist Vo Tri Thanh.

The reduction of gasoline price will also help CPI fall by 0.21 percent, of which, it helps the CPI decrease directly by 0.07 percent.

In September alone, the fall of gasoline price will help the CPI decrease by 0.04 percent because as prescribed, the 15th day of month will be the closing day to calculate the CPI.

Therefore, the fall in gasoline price will make stronger impacts to the CPI in October, Thanh said.

Economist Le Dang Doanh, on the oher hand, said that the slowdown of CPI in September would be attributable to the decline in price of foodstuff, food and drinks.

Though the reduction of gasoline price is not the main cause, the country's CPI in September will rise around 0.7-0.9 percent and the rise will be maintained at below 1 percent in the next months if the price of gasoline in both local and global markets remains stable, Doanh added.

Thus, the country's CPI for the whole year would rise 19-20 percent, he said.

Cashew exports fall on rising prices
 
Viet Nam expects to export no more than 150,000 tonnes of cashew nuts this year, down 48,000 tonnes against last year, according to the Viet Nam Cashew Association (Vinacas).

Speaking at a conference in HCM City yesterday, Vinacas chairman Nguyen Thai Hoc said raw cashew production this year had been about 300,000 tonnes, equal to last year.

As of August 31, enterprises imported 200,000 tonnes of raw cashew from Nigeria, Ghana, the Ivory Coast, Indonesia, and Cambodia, Hoc said, adding that about 30,000-40,000 tonnes would be imported from Africa this month.

Imports will cease in the fourth quarter of this year and the first quarter of next year due to high prices and low quality.

There is enough raw cashew for processing for export this year, but a shortage of 150,000-200,000 tonnes would occur in the first quarter of next year.

Hoc said the country exported more than 107,500 tonnes of cashew nuts, earning US$857.17 million in the first eight months of the year.

That was a decline of 13 per cent in volume but an increase of more than 25 per cent in value year-on-year.

Cashew processors and exporters have faced many difficulties this year, including a shortage of capital and labourers and higher input costs, Hoc said.

Recently, many enterprises were forced to sell the nuts at lower prices to settle bank loans.

Hoc said Vinacas would send a petition to the State Bank of Viet Nam to suggest the bank to extend loan term for enterprises by three months.

N. Ashok, director of the India-based Orion Commodities and Services Pvt.Ltd, a buyer of Vietnamese cashews, said similar to Viet Nam, India's cashew export volume this year was expected to be lower as well.

Cashew prices reached an all-time high this year.

"Despite the problems in the global economy, demand for cashew nuts has not gone down," he said.

The US imported less in May and June but consumption in the Middle East and some new markets increased in the first half of the year.

Currently, the volume held by buyers is lower than what they need in the next four months, he said.

A slightly upward trend for prices will be expected over that period.

Ashok also called on local companies to focus more on maintaining the nut's quality to ensure the Viet Nam's prestige as the world's largest cashew supplier.

International tourism investment promotion conference kicks off in HCM City

Representatives from four regional countries are determined to co-operate to enhance their tourism sectors in order to improve socio-economic development.

The International Tourism Investment Promotion Conference "Four Countries – One Destination" 2011 to enhance regional tourism development in Cambodia, Laos, Myanmar and Viet Nam kicked off this morning in HCM City.

Attendees included Thong Khon, Cambodia Minister of Tourism, Bosengkham Vongdala, Lao Minister of Information, Culture and Tourism, Tint Hsan, Myanmar Minister of Hotels and Tourism, Hoang Tuan Anh, Viet Nam Minister of Culture, Sports and Tourism, and HCM City chairman Le Hoang Quan.

"The conference reveals the common determination of the four countries in intensifying co-operation and attracting investment," said Hoang Tuan Anh in his opening speech.

Tourism in a crucial factor in attracting foreign currencies, creating jobs, increasing incomes, eliminating hunger and reducing poverty, he said.

Despite many advantages, the tourism sector in each of the four countries faces many difficulties, including low economic growth, a lack of synchronised tourism infrastructure and a shortage of qualified human resources, Anh said.

Last year, the four countries welcomed around 10.9 million international tourists, up 25 per cent year-on-year.

Viet Nam expects to serve 10.3 million international tourists and 47.5 million domestic tourists in 2020 with numbers rising to 18 million and 71 million respectively in 2030, Anh said.

The country would invest US$94.2 billion into developing 39 national resorts, 30 national destinations and 10 tourism cities in the near future, he said.

MoIT approves 50,000 tonnes of high-quality salt imports

The Ministry of Industry and Trade granted domestic companies permission to import 50,000 tonnes of high-quality salt for use in chemical production.

This year's second batch of imported salt, which aims at mediating raw material shortages in chemical companies, meets a portion of the 2011 import quota, the ministry said.

Ministry of Agriculture and Rural Development statistics show that Viet Nam consumes more than one million tonnes of salt each year.

While the country is able to meet the demand in terms of quantity, its domestic salt industry can not produce the quality required by the medical sector and other industries.

Vietnam firms cut deals to invest huge sums in Laos

Vietnamese entrepreneurs accompanying Prime Minister Nguyen Tan Dung on a state visit to Laos ending Saturday cut deals worth over US$400 million to invest in the neighboring country.

At the investment conference in Vientiane co-chaired by Laos Prime Minister Thongsing Thammavong and his Vietnamese counterpart Nguyen Tan Dung, enterprises of the two countries signed agreements for six projects worth US$410 million, plus two credit contracts worth US$114 million.

At the investment conference, five Vietnamese-invested projects were also awarded licenses by Laos, the Vietnam News Agency reports. These include two hydropower projects by Hoang Anh-Gia Lai Group, the Petrolimex Laos invested by Vietnam’s petroleum trading firm Petrolimex, the five-star hotel Vientiane Complex, and a project by Laos-Vietnam Joint venture Bank to spur capital to US$35 million from US$15 million.

Laos Prime Minister Thongsing Thammavong stressed at the conference that his country would make the business environment favorable for Vietnamese enterprises so that Vietnam can emerge as the single biggest foreign investor in Laos from the second position now.

“The Lao Government always encourages and creates favorable conditions for Vietnamese investors, welcoming them to invest further in Laos,” he is quoted by Vietnam media as saying before over 300 entrepreneurs from the two countries.

The Laotian leader briefed the participants of his country’s potentials and investment encouragement policies, and discussed issues of concern to Vietnamese investors.

Vietnamese enterprises have so far pledged US$3.3 billion of foreign direct investment into the neighboring country.

PM Thammavong said Vietnam was a special investor in Laos as its investment has effectively contributed to socio-economic development in his country. They have also made important contribution to social welfare in Laos, he noted.

He called on Vietnamese investors to continue large-scale investment in Laos.

At the conference, the Laos Ministry of Planning and Investment pledged to coordinate with relevant agencies to adjust laws and policies, especially tax and customs ones, in favor of Vietnamese investors, according to local newspapers.

Representatives of Vietnamese enterprises that have investment projects in Laos proposed the Laos Government to have more flexible mechanisms and policies on labor training, infrastructure development, and procedure simplification. At the event, a license was issued for the establishment of the Association of Vietnamese Investors in Laos.

According to Vietnamese Minister of Planning and Investment Bui Quang Vinh, to date, Vietnamese enterprises have had 203 investment projects totaling over US$3.3 billion in Laos, mostly in energy, minerals, agriculture and services. Nearly US$1.1 billion has been invested in service, with the capital of Vientiane-Long Thanh Golf project alone amounting to nearly US$1 billion.

In the first eight months of this year, the total registered capital of Vietnamese firms in Laos reached US$469 million.

At the conference, according to local media, PM Nguyen Tan Dung and his Laotian host highly valued the effective cooperation between the two countries in recent years, particularly in trade, investment and tourism, saying this is a key factor for boosting bilateral ties.

However, both leaders emphasized that the two nations had not yet fully tapped their potentials. They pledged to create a solid legal framework to ease difficulties that businesses may encounter.

Market predicted to drop back slightly

Securities companies expected to see two or three falling sessions this week as the market would correct after an 11-session rising streak and clearer signs of profit-taking could be seen in the final session last week.

The southern market unlike earlier predictions continued to shoot up after the national holiday, gaining over 24 points, or 5.7%, against the previous week to close at 459.92 last week with liquidity rising to the highest level since June.

However, Viet Dragon Securities Co. noted negative signs on the bourse last Friday, especially lower liquidity and poor performances of strong market drivers like SSI, KLS, VND and PVX.

“Selling pressure has piled up day after day. If the cash flow is not strong enough, the market may enter a phase of correction and a losing week with low liquidity,” the broker said.

Meanwhile, APEC Securities Co. said the market seemed to continue rallying given technical analysis but correction was inevitable after the long rising streak. “The market might drop back this week after approaching a strong resistance level. Investors should halt buying but have no need to offload stocks in falling sessions as the uptrend has yet to end,” APEC said.

Fiachra Mac Cana, managing director of HCMC Securities Co., said after last Friday’s session the pattern of shallow corrections followed by mini buy surges seemed to be taking hold for now. He still noted a lot of money was on the sidelines having not yet had a chance to come in.

“Hence temporary price weakness is still viewed as a buying opportunity. This pattern is likely to continue into next week with positive sentiment likely to prevail for some time yet. Even so resistance will increase as the market moves higher,” he said.

“We would focus on interest rate sensitive ones like brokers, banks and real estate companies for the time being but in our opinion the most sustainable medium gains will be in those stocks that are viewed as better than average in terms of their growth potential, market share and price leadership and likely margin growth in the next business cycle.

“These are suitable for medium to long-term investment and this list includes larger counters like HAG, FPT, HPG, PVD, KDC and DPM and then among the smaller counters PNJ, DPR, PAC, DHG and TRA,” Mac Cana added.

The Hanoi market gained 1.42 points, or 1.88%, against the previous week to 76.78 with three falling and two rising sessions. The market’s daily trading volume averaged out at nearly 62.9 million shares worth nearly VND719.5 billion. The market is predicted to drop slightly this week.
 
Expert predicts inflation at single-digit rate in 2012

A high-profile securities expert predicted next year’s inflation to return to the single-digit rate from 20% or so at this year’s end, as the monetary tightening policy paid off.

Fiachra Mac Cana, managing director and head of research of the Hochiminh City Securities Co. (HSC), told a meeting with investors last Friday that 2012 inflation would be around 10% or so, as money supply has been choked off and the pressure on price increase has abated.

The global growth is slowing down so there is no much pressure on prices, and furthermore, the credit growth and money supply growth have come down substantially this year, he said.

According to the central bank, by late August, the credit growth was 8.85% and the money supply growth was 9.16% from late last year, much lower compared to the growth of 16.9% and 16.4% respectively at the same period last year.

Earlier, the central bank had set this year’s credit growth and money supply growth targets at low levels of around 18% and 16% respectively.

Experiences seen between 2006 and 2010 show that there was close correlation between credit growth and inflation. So, as the credit growth is coming down, the inflation should follow, “so my forecast for next year is much lower at 10%,” Mac Cana said.

Regarding factors behind the inflation in the rest of this year, the expert said key constituents of the consumer price index including food, building materials, consumer goods, and transportation have come down strongly in the last two months.

Therefore “I think month-on-month inflation can be capped at less than 1% for the remaining months of the year,” said Mac Cana. However, he expected inflation rate would be still high at the end of this year, around 20%, having peaked at over 22% in end-August.

The stock expert suggested that inflation rate would come down slowly in the rest of this year before settling down strongly in the first half next year. He therefore forecast the interest rate to make the same move, going down by two percentage points from the current level by the year’s end and hit around 12%-14% next year.
 
DNN invests VND510 bil. to develop IZ in Long An

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

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

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

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

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

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

To date, six investors have set up businesses in this industrial zone.
 
Investors ink colossal entertainment park deal

Khang Thong Group, the developer of Southeast Asia's biggest theme park in the southern province of Long An, signed on Friday an agreement with partners from the UK, the US and Germany to develop facilities for the 338-ha amusement park.

Under the agreement, the Britain-based Hyder Consulting Company would design the project's landscaping and the US-Viet Nam Joint-Venture Biscayne KT Viet Nam Limited Company would be responsible for consulting and design for the water-related entertainment facilities.

Rogich Sigmund, chairman of the Rogich Communications Group, has signed a deal with the group to invest in the US$2 billion Happyland project.

Phu An Construction Investment and Infrastructure Development JSC, a subsidiary of Khang Thong, has also signed deal with Peter Eliades, the founder of Yellow Checker taxi in Las Vegas, to develop 10,000 apartments in the Happyland theme park.

At the signing ceremony, Phan Thi Phuong Thao, chairwoman and general director of Khang Thong Group, said after the groundbreaking ceremony in February, the group had planted trees and completed a construction transport system and a 3.7-km concrete embankment along Vam Co River as well as other facilities.

Construction of other items including workers' accommodations, a vocational training school, wine castle and others have been completed.

The theme park is expected to be in use by April 2014, Thao said.

The project is expected to receive 14 million local and international visitors annually. The park's premises will be expanded after completion.

A day prior to the agreement signing ceremony, leaders of the property developer and partners from the US, Germany and Thailand had a meeting with President Truong Tan Sang, reporting the construction progress of the Happyland Theme Park project in Long An and other energy projects in Binh Dinh Province, which the group is constructing with partners.

Sang said this co-operation would speed up projects' construction progress as well as contribute to strengthening the diplomatic relations of Viet Nam and the other countries.

Among the foreign entrepreneurs who met with President Sang was Joe Jackson, father of the late singer superstar Michael Jackson. His father has invested in a five-star hotel in the theme park.
 
Japanese mid-sized logistics firms expand businesses in Vietnam

Japanese mid-sized logistics companies are expanding their distribution networks in Vietnam, a growing market where big players have still not solidified their positions, the Japanese daily Nikkei reported.

Among the firms, Japan Logistic Systems Corp. has invested an estimated 400 million JPY in building warehouses in Vietnam's three major cities of Hanoi, Danang and Ho Chi Minh City. It plans to put the warehouses into operation from the beginning of next month with the aim of boosting its annual revenue in the market from the current 4 billion JPY to 7 billion JPY in the next three years.

Mitsubishi Logistics Corp. set up a joint venture with a local firm to transport products from appliance factories to the parts of Vietnam where they will be sold. The Japanese firm hopes to eventually handle imports and exports of electronic parts, coffee and other products.

Meanwhile, Nissin Corp. has joined hands with Vietnam's national railroad to operate a freight train exclusively for Japanese companies in response to growing demand on the transport of cars and motorcycles.

The train makes two trips a week between Hanoi, where factories are concentrated, and Ho Chi Minh City, where the vehicles are sold. Appliances are shipped on the return trip going north. The products used to be transported on trucks, but deliveries were often delayed and products were sometimes damaged en route.

At the same time, Yusen Logistics Co. has begun considering regular truck deliveries between Hanoi and Ho Chi Minh City. Since the firm already operates Bangkok-Hanoi and Hong Kong-Hanoi routes, the new route would connect Ho Chi Minh City with Thailand and China by land.

According to the Nikkei, Japanese companies have been setting up factories in Vietnam, in part to take advantage of low labour costs and its proximity to the Chinese market. The Vietnamese government has indicated plans to create a special economic zone for Japanese businesses, another positive factor for midsize logistics firms.

Paper project phase gets wrapped up

The prime minister has demanded Vietnam Paper Corporation halt implementing a second-phase Bai Bang Paper Factory expansion project.

The decision came as the paper corporation (VPC) inked a contract for the purchase of a used equipment line from a Finnish partner when it had yet to get the nod from state agencies.

Besides, the northern Phu Tho province’s project’s loan/ equity ratio exceeds regulated levels, while pulp and paper production are not among areas prioritised for government guarantee to source loans.

Earlier, the second-phase Bai Bang paper factory expansion plan was ratified by the prime minister to take advantage of world economic recession to source quality, hi-tech equipment from developed countries at affordable prices.

In 2006, the Ministry of Industry (now the Ministry of Industry and Trade (MoIT)) submitted to the government second-phase Bai Bang Paper Factory expansion project with an annual capacity of 250,000 tonnes of pulp and estimated investment of over VND8 trillion ($386.47 million).

Of the investment, around VND5.755 trillion ($278 million) will be pumped into equipment purchases and VND2.606 trillion ($125.9 million) put into developing material areas.

The ministry (MoI) also proposed the government act as an underwriter for the project to source foreign loans for material and equipment purchases.

Later in October 2010, response to proposals from the VPC and relevant ministries, Deputy Prime Minister Hoang Trung Hai asked the MoIT to join hands with relevant ministries to draw accurate appraisals of the paper expansion project to report to the prime minister.

Firms face exchange rate puzzle

Sourcing funds is still a major headache for firms.

“Firms asked me should they take dong or dollar loans? I tell them if they have the greenbacks to pay off debts, they had better take on dollar loans to enjoy lower interest rates and I asked them to be cautious of the [dong-dollar] exchange rate risk by the year-end,” said economist Vu Dinh Anh.

Anh said if in the last four months of 2011 the consumer price index (CPI) growth averaged 1.96 per cent as seen during January-August, full-year CPI growth would be at least 23 per cent.

“The finest scenario is that the CPI average growth in the last four months will be tantamount to three recent months’ monthly average CPI growth of 1.06 per cent, driving 2011’s CPI growth to around 20 per cent,” Anh said, adding that with such growth, one could not expect the lending rate to drop lower than current average lending level of 18.6 per cent, per year.

“In this context, sourcing dollar denominated loans is more efficient then dong loans, however, firms face risks if the exchange rate escalates by the year’s end,” said Anh.

VPBank general director Nguyen Hung said the capital demands often picked up in the fourth quarter and banks faced low liquidity if they pulled deposit rates down.

“With a deposit ceiling of 14 per cent per year, plus obligatory reserve requirements and other sorts of expenses banks’ actual input costs came to 18-19 per cent per year, no banks will  lower their lending rates to below 17 per cent, per year,” Hung said.

One of the 12largest commercial banks in the country VPBank just set aside VND3 trillion ($145 million) to lend businesses in agricultural, forestry and fisheries production and export and those operating in healthcare and education sectors with preferable lending rates of 17-19 per cent, per year, said Hung.

“Firms can hardly run at a profit and keep production and business activities stable even with such preferred lending rates,” said Dong Bang Trade Services Development Joint Stock Company director Pham Quang Trung.

Trung also worried that banks could not maintain the concessionary interest rate policy long-term since the CPI growth in the remaining months of the year remained unpredictable.

“I still advise firms to borrow dollar loans amid a stable exchange rate. However, firms were also warned of the exchange rate situation later in the year, particularly this year, as firms have hooked into dollar loans,” said Informatics and Applied Economics Research Institute director Dr. Dinh The Hien.

Commercial banks’ quoted dong-dollar exchange rates are VND20,830 (buying) and VND20,834 (selling).

According to Hien, with such quoted rates, firms taking dollar loans with an interest rate of 7 per cent, per year would be more beneficial than those sourcing dong loans with an annual interest rate of 19 per cent.

“If the exchange rate augments to VND21,754 per dollar, sourcing dollar and dong loans with the said interest rates will be the same in terms of interest rates. If the [exchange] rate further increases to VND22,500 per dollar by the year’s end, dollar loans’ actual interest rates will be at least 3.91 per cent, per year higher than those of dong loans,” Hien said.

BIM group builds five-star hotel complex

The Ha Long Investment and Development Company (BIM group) has started construction of a five-star Vientiane complex in the Laos capital.

The US$70 million complex will be built on a 20,000 square metre site.

The first phase of the project has begun and the entire complex is scheduled to be operational by the end of 2012.

Other construction works are expected to completed by 2015.

Medikit opens factory in northern port city

The Medikit Viet Nam company has started operating its factory at the Nomura industrial zone in the northern port city of Hai Phong.

The factory will mainly produce medical components and devices for export and aims to make 5 million products per month.

The factory attracted $11 million in investment and has created more than 300 jobs for local labourers.

Vung Tau set to receive its fourth steel factory

The PEB Steel Building company has begun building its forth corrugated iron and prulin factory in the Dong Xuyen industrial zone in the southern province of Ba Ria-Vung Tau.

The factory covers 9,000 square metres and is scheduled to be completed and operational by November.
 
Foreign players’ feed appetite

The local animal feed market is being eaten into by foreign players.

Statistics show that though Vietnam just accommodated around 20-30 foreign-invested businesses producing animal feed, their market share accounted for around 70 per cent.

In the fisheries field, except for Tra fish, the market is almost in the hands of foreign players such as Cargill, Tomboy, Uni-President and Green Feed.

Financially capable foreign firms have pushed scores of local small players to the verge of bankruptcy.

Vietnam Animal Feed Association (VFA) figures show that local firms active in animal feed production shed by half within the past three years. Of them, 30 per cent were bankrupt and the remainder shifted into importing materials.

According to Vietnam Association of Seafood Exporters and Producers (VASEP), over 30 per cent of local firms processing fish and shrimp meals shut their doors in the first quarter of 2011 alone.

VFA’s chairman Le Ba Lich attributed local players’ dwindling share to the jump of foreign players in Vietnam’s animal feed market.

In June 2011 C.P. Pokphand Company Limited, the Hong Kong-listed affiliate of Thailand's Charoen Pokphand Group, announced it would buy Modern State Investments Limited for $608 million, gaining livestock feed and production facilities in Vietnam.

Modern State, registered in the British Virgin Islands, controls 70.8 per cent of CP Vietnam which currently holds a 20 per cent market share in the commercial feed and industrial farming markets in Vietnam. In 2010, CP Vietnam earned over VND20 trillion ($1 billion) in revenue and posted a net profit of VND964.6 billion ($50.3 million).

Later two Japanese groups Sojitz Group and Kyodo Shiryo Company (Japan’s leading animal feed producer) aired plans to inject JPY2 billion ($26 million) into building an animal feed plant in Vietnam to obtain a 10 per cent market share by 2020.

“One French firm also plans to set up one such factory in Ho Chi Minh City,” said Vietnamese Entrepreneurs Association in France chairman Nguyen Hai Nam.

“Small firms in the [animal feed production] industry face losing their market share to foreign players,” said VFA chairman Lich.

Lich assumed Vietnam’s easy policies relative to foreign investment in animal feed production were key reason why foreign firms leaped into this area in the country. “In some regional countries like China, Malaysia and Thailand such policies towards foreign investors are strict,” Lich said.

“The animal feed market would be controlled by foreign players if current relevant policies remain unchanged,” said Aprocimex chairman and general director Doan Trong Ly.

 August car sales jump 10 percent

Viet Nam Automobile Manufacturers Association (VAMA) members sold nearly 10,000 cars last month, a 10 per cent increase from the same period last year.

Of the 9,520 cars sold, the report stated 4,201 were passenger cars - a four per cent increase on last years figures and sports utility vehicles, multiple purpose vehicles and crossover vehicles totalled 2,153, up 21 per cent.

VAMA official Nguyen Trung Hieu said possible changes in the new registration fee tax may have boosted sales.

"Sales had slipped this year until August, which is the first month where VAMA members have enjoyed a growth in sales," Hieu said.

"It was said that the fee will start to increase from 10-15 per cent to 15-20 per cent in September, so that may be why consumers have decided to buy cars now," Hieu said.

Hieu concluded that these rumours may not eventuate as no city or province had changed their tax rules.

Association sales figures for the eight months to August reached 70,650 units, a 2-per- cent increase compared to last year and SUV, MUV and crossover vehicles rose by four per cent in the same period. Passenger cars jumped 28.9 per cent but commercial car sales fell by 13 per cent.

"During these eight months, the commercial car sector was strongly effected by the challenging economic condition," Hieu said.

Hieu said commercial cars were often bought to serve business purposes such as buses and trucks and that bank interest rates remained high, restricting more consumer spending on cars.

Despite these conditions, passenger car sales continue to surge.

"There is very high demand - passenger car sales will increase even more if economic conditions improve," Hieu said.

In these eight months, the Truong Hai Auto Corporation had the highest sales figures, selling 20,736 cars, followed by Toyota with 19,058 sold.

Housing week to focus on green development

The Building and Construction Authority of Singapore yesterday launched its third annual Green Building Week, which focuses on solutions in green building development, including innovative, sustainable, and actionable solutions for the tropics and sub-tropics.

"We all know that there is a critical and urgent need to build green and retrofit existing buildings into more energy-efficient and environmentally-friendly living spaces," Dr John Keung, CEO of BCA, told the opening session.

The highlight of the five-day event will be the International Green Building Conference.

Following the opening of the event, BCA organised tours to green building projects. The 4,500sq.m BCA academy is the first zero-energy building in Singapore, meaning it produces enough energy to run itself, saving S$84,000 (US$70,000) a year in energy costs.

Around 1,000 experts, practitioners, and policy makers from across the Asia-Pacific and North America will gather at workshops between September 14 and 16.

"The intention behind organising the conference was to enable industry practitioners to take action, not some time in the future, but now," Keung said.

There will be six symposiums at the conference, covering themes including eco-cities, sustainable infrastructure and sustainable construction.

Dr Maliki Bin Osman, Senior Parliamentary Secretary, Ministry of National Development and Defence, said other countries in the Asia-Pacific region were also building up momentum in their green building movement.

In Southeast Asia, for example, the number of green building councils had tripled from two in Viet Nam and the Philippines in 2006 to six now and from seven to 16 in the region, he said.

Project to boost trade in global depository receipts
 
The Government has approved a list of companies eligible to participate in a pilot project to develop use of the global depository receipt (GDR), a source close to the State Securities Commission told the newspaper Dau tu Chung khoan (Securities Investment).

GDRs are certificates issued by a depository bank which purchases shares of companies and issues them to foreign investors in overseas markets. They are traded on the secondary market like stocks.

Market insiders say that, if the project is put into practice, it will open a new funding channel for the Vietnamese companies to raise capital overseas, particularly in the face of increasing difficulties on the domestic market.

Real estate developer Hoang Anh Gia Lai Co (HAG) was the pioneer of GDRs in Viet Nam, successfully issuing US$60 million worth of GDRs to Deutsche Bank late in March after two years of preparation. HAG's GDRs are now traded on the London Stock Exchange's Professional Securities Market.

Ngo Quang Phu, the deputy director of Sacombank Securities Co, the consultantù for HAG's GDR issue, said that, in order to issue GDRs successfully, "businesses must operate efficiently, have clear development potential, professional management and transparent information."

HAG's success was primarily based on the group's long-term prospects in rubber, hydroelectric power and mining, Phu said.

Raising capital through GDRs in the current economic context would be more difficult and costly due to shrinking investment worldwide, according to Viet Capital Securities Co analysts. Nevertheless, they lauded officials for permitting this form of investment, helping businesses avoid "running risks without a sufficient legal basis".

Viet Capital Securities Co has said it would resume the process of issuing GDRs for food producer Masan Group (MSN) and Ocean Bank.

HCM City-listed commercial bakery Kinh Do (KDC) had said in May it would issue 20 millon shares to foreign investors in form of GDRs on the London Stock Exchange, so the new project should create more favourable conditions for KDC to carry out the plan.

Many Vietnamese businesses would be unable to meet strict international standards, including standards of size, with the the average size of each business on the London Stock Exchange being about $300-500 million (VND6-10 trillion), Phu said. Issuing GDRs was most suited to large businesses in the fields of agriculture, retail and consumer products, he added.

One of the biggest challenges for Vietnamese enterprises would be to obtain underwriting from a global depository banks – no easy task due to strict disclosure requirements, noted senior economist Huy Nam.
 
PV