CG meeting to be held in Hanoi in December

The 2012 Consultative Group (CG) Meeting for Vietnam will be held in Hanoi from December 10-12, according to the Ministry of Planning and Investment.
    
Discussions will focus on the socio-economic situation in 2012 and the Government’s priorities to improve macroeconomic performance, competitiveness and efficiency in 2013. Delegates will also review the implementation of restructuring policies in banking, public investment and State-owned enterprises.

The CG meeting will cover issues related to education and skills, aiming to achieve the middle income country target, revised Land Law, anti-corruption, business and aid efficiency.

Vietnam, Argentina sign customs agreement

Vietnam and Argentinean customs agencies will assist each other in the prevention of  customs violations in line with national and international laws.

The agreement was reached at a signing ceremony between Vietnamese Deputy Minister of Finance Nguyen Cong Nghiep and head of the Argentina’s tax agency AFIP, Ricardo Echegaray, in Buenos Aires on November 27.

The signatories stressed the importance of customs cooperation, especially since the 2006 bilateral trade agreement which has increased trade significantly. Two-way trade turnover has risen from US$272 million in 2006 to more than US$1 billion in 2011.

Nghiep and Echegaray said the two sides will soon negotiate the Double Tax Avoidance Agreement to regulate  trade, economics and investment cooperation between the two countries.

Vietnam, Holland enhance energy cooperation

The Netherlands wants to increase cooperation with Vietnam in five prioritised sectors, especially energy.

The statement was made by Minister for Foreign Trade and Development Cooperation Lilianne Ploumen  at a meeting with visiting Deputy Prime Minister Hoang Trung Hai on November 28.

The Dutch minister said Vietnam has become the Netherlands’s development partner, creating sustainable benefits for both sides.

Deputy PM Hai said he hopes Minister Ploumen will continue to promote cooperation projects on climate change, water resource management, agriculture, energy, oil and gas, seaport and logistics, while creating favourable conditions for Dutch businesses to expand their operation and investment in Vietnam.

Later on, the Deputy PM attended the Vietnam-Netherlands CEO conference on energy cooperation.

Addressing a large audience, which included representatives from the world’s leading groups such as Shell, Global Energy and Winel Industry Group, Hai said with diverse sources of energy, Vietnam considers oil and gas, coal and power industries the main pillars of the nation’s energy security.

Vietnam welcomes outside partners to participate in the sustainable development of the energy sector, on the basis of long-term, effective and mutually- beneficial cooperation, he said.

Participants from both countries presented their plans and needs in energy cooperation. The National Oil and Gas Group (PetroVietnam) called on investors in oil and gas exploration and exploitation, oil processing, renewable energy development and energy saving.

The Netherlands, in recent years, has emerged to become one of the EU’s leading investors in Vietnam.

By the end of October, the country had 172 projects worth US$5.88 billion, ranking 11th out of 96 countries and territories investing in Vietnam.

Koreans top foreign travelers list in Vietnam

The number of the Republic of Korean tourists to Vietnam in November showed the highest year-on-year increase of 31.5 percent, according to the General Statistics Office (GSO).     

It was followed by Malaysia (up 25.6 percent), Thailand (up 24.6 percent), Japan (up 20.8 percent) and Taiwan (up 17 percent).

Some markets had low augmentation, including France (up 6.5 percent), the US (up 2.7 percent), China (up 0.8 percent) and Australia (0.2 percent).

In eleven months, Vietnam has received 6.5 million foreign arrivals, rising by 24.4 percent compared to October and 7.2 percent against the same period last year.

In November, the number of travelers to the nation for tourism and convalescence showed a year-on-year rise of 23.2 percent, while those went for work up 28.5 percent, visiting their relatives up 26.8 percent and other purposes up 17.1 percent.    

Vietjet Air opens new route to Bangkok

Vietnam’s leading low-cost carrier VietJet Air has annouced that it will launch a new route from Ho Chi Minh City to Thailand’s Bangkok capital in early 2013.    

Vietjet Air will conduct one daily direct flight between the two cities, starting on February 10. The 90-minute fight will depart from HCM City at 11.00 am and from Suvarnabhumi at 13.30 pm.

The airline has recently lauched a domestic route from HCM City to the former Imperial City of Hue.This is Vietjet Air’s seventh domestic route after destinations of Hanoi, HCM City, Haiphong, Danang, Nha Trang and Vinh.

As scheldued, the airline will open direct routes from HCM City to Phu Quoc and Hanoi to Dalat, aiming to bring the best services to Vietnamese and foreign tourists.

Vietjet Air will continue to open more new international flights, connecting HCM City and Hanoi to Southeast and North Asian countries.

Passengers can also buy ticket at sale agents or through the airline’s website www.vietjetair.com.

Vietnamese tourists to Cambodia rise sharply

Vietnamese tourists topped the list of foreign visitors to Cambodia during the past ten months with 638,000 arrivals, showing a year-on-year increase of 24 percent.     

The Republic of Korea came next with 337,000, up 23 percent, and China with 265,000, up 34 percent, according to the data released by the Cambodian Tourism Ministry on November 27.

Two Cambodia’s neighbours-Laos and Thailand-were placed 4th and 5th in the standings seeing the sharpest increase of 90 and 75 percent compared to the same period last year.

In the reviewed period, Cambodia received 2.86 million foreign travelers, rising by 24 percent against 2011. Of the figure, 75 percent were from the Asia-Pacific region and 16.3 percent from Europe.

There were 1.2 million arrivals from ASEAN countries, up 36.2 percent against the previous year.

The country aims to receive about 3.3-3.4 million foreign arrivals this year, or 200,000-300,000 more than the set target.

Industry remains sluggish, inventories high

Industrial production continued to see low growth this month with the nation's Index of Industrial Production (IIP) increasing just 4.8 per cent over October, according to the General Statistics Office (GSO). The index for the first 11 months has risen by just 4.6 per cent over the same period last year.

The rate of increase in the IIP this year has been much lower than in comparable periods in 2011 and 2010, said GSO expert Vu Quang Ha, noting that the IIP rose 6.9 per cent last year and 9 per cent in 2010.

The trend of low industrial growth was due to impacts of the global recession which has lowered domestic purchasing power as well as demand in major export markets, such as the US, EU and Japan.

In specific industries, electrical generation and distribution saw a growth of 12.4 per cent, and water supply and treatment grew by 8.1 per cent during the 11-month period, but manufacturing and processing industries – which account for over 70 per cent of all industrial production value – grew by only 3.9 per cent. The mining industry saw a similarly anaemic 4-per-cent growth.

For a number of leading export-driven sectors, it was even worse. The textile and garment industry saw growth of only 3.4 per cent, while the wood products grew by only 1.9 per cent. Some sectors even saw negative growth, including footwear (down 0.6 per cent), cement (down 6.2 per cent), paper (down 9 per cent) and machinery (down 14 per cent).

The low figures reflected the stagnation in many of these industries, which have seen many production facilities closed and many enterprises liquidated.

Among the few bright spots, the manufacturing of telecommunications devices saw rapid growth of 50.4 per cent in the first 11 months of the year, while electronics grew by 18.3 per cent, pharmaceuticals by 15.3 per cent and crude oil production by 11 per cent. The consumption index of products of manufacturing and processing industries during the first 11 months lagged behind the production index. October saw the consumption index at a 10-month low of only 3.3 per cent.

Due to weak consumption, inventories continued high, with no improvement since August. As of November 1, the inventory index was 20.9 per cent. Telecommunications devices, fertiliser, motorbikes, tobacco, cement, paper and fisheries were among those with high inventories.

EU free trade big advantage

A free trade agreement with the EU would bring Viet Nam tangible benefits in terms of removed tariff barriers and increased legal certainty as well as wider intangible benefits that could help strengthen Vietnamese production chains, said the head of the Trade and Economic Section of the EU Delegation to Viet Nam, Jean Jacques Bouflet, at a workshop here yesterday.

Entitled Challenges in 2013: The Road Ahead to an EU-Viet Nam Free Trade Agreement, the workshop was hosted by the Viet Nam-EU Business Forum.

Viet Nam has became the third Asian country to kick off free trade negotiations with the EU following Singapore and Malaysia, the director of the Ministry of Industry and Trade's Multilateral Trade Policies Department, Luong Hoang Thai, told the gathering.

Negotiations for a free trade agreement with the EU have begun in the context of a global economic crisis, so it would be more difficult to reach strong commitments than when the economies were seeing good growth, Thai said. However, negotiations were proceeding with a long view towards long-term growth, he said, noting that recession was simply part of the economic cycle.

The negotiations also included new aspects not previously discussed in trade negotiations, including public purchasing, Thai said.

There was great potential for enhanced trade and economic relationship, said Bouflet, pointing out that the EU common market of 500 million consumers still had abundant market opportunities for Vietnamese products. In return, the EU would offer top-quality investment, advanced environmentally-friendly technology, management expertise and more.

However, to achieve an agreement within two years, strong political commitments, goodwill and a frank and practical approach were needed, he stressed.

"It's important that Viet Nam enhance economic restructuring and boost enterprise competitiveness to overcome challenges that a free trade agreement would bring," said economic expert Pham Chi Lan.

The former vice chairman of the Viet Nam Business Association in the Czech Republic and Slovakia, Pham Xuan Ha, stressed that the legal system needed to be reformed to create a more favourable business environment.

The EU was the second biggest market for Vietnamese products in 2011 and in the first nine months of this year and was a key foreign investment partner and source of official development assistance for Viet Nam, Bouflet said. The EU imported goods from Viet Nam worth over US$16.5 billion in 2011, equal to 17.6 per cent of Viet Nam's total exports. The figure for the first nine months of this year was $14.4 billion, compared to $14.7 for the US.

Bank chiefs arrested on fraud counts

Four Agribank officials in HCM City have been arrested for allegedly committing serial fraud to help a customer swindle VND150 billion (US$7.2 million).

Nguyen Thi Hoang Oanh was head of the Ben Thanh branch, Truong The Thanh was her counterpart at Branch No.3, and Cao Bao Hieu and Nguyen Quoc Viet were the former's subordinates.

According to the Ministry of Public Security's Investigation Police, in 2009 Le Xuan Tinh, director of two companies, sought to borrow from the Viet Nam Bank for Agriculture and Rural Development – as Agribank is formally known.

The four officials, despite knowing that Tinh did not meet Agribank's lending conditions, approved his loan.

Tinh got two loans of 3,100 taels of gold (approximately US$7 million).

But in 2010, when the loans became due, he was unable to repay the bank.

To raise money for this, Tinh again colluded with the four, applying for a fresh loan based on fake business plans and "mortgaging" assets he had already mortgaged the first time.

He now owes Agribank VND150 billion (US$7.2 million) in all.

Vinh Son-Song Hinh hydro-power profit down

Vinh Son Song Hinh Hydro-Power Co (VSH) posed a reduced net profit of just VND45.45 billion (US$2.2 million) in the third quarter, down 20 per cent compared to the same period of last year.

The company's power production reached 149.71 million kWh during the period, down more than 11 per cent year-on-year. Electricity sales totalled VND56.86 billion ($2.7 million), down at a higher rate of over 21 per cent year-on-year because the company has yet to sign a power purchase agreement with Electricity of Viet Nam (EVN).

According to the semi-annual report review, the audit said the old power purchase contract between EVN and VSH expired in 2009 and the company has not signed a new contract yet.

Vinacomin Ha Lam Coal to raise charter capital

Vinacomin Ha Lam Coal Co (HLC) will raise its charter capital to VND300 billion (US$14.4 million) by the end of this year as part of a strategy approved at its recent shareholders' meeting.

The company will issue an additional 16 million shares to existing shareholders at the ratio of 1:1.34 (meaning one share holding can buy 1.34 shares) at a price of VND10,000 a share. It will also issue another 2 million bonus shares to shareholders at the ratio of 6:1 (six shares can obtain one bonus share).

Sai Gon Cable announces to make another payment

Sai Gon Cable Corporation (CSG) have announced that they will make a second payment to investors to fulfil a commitment made by the company following its dissolution.

CSG's investors will receive VND700 a share holding on December 6. The company has already paid investors VND9,300 a share. It is expected to make payments in three phases, taking the total money paid out to investors from VND13,000 to VND15,000 (US$0.62-0.72) a share.

CSG was delisted from the HCM City Stock Exchange on October 4 after applying to dissolve. CSG shares closed the last trading at VND12,200 a share.

Engineering company to raise dividend payout

Fecon Foundation Engineering & Underground Construction Co (FCN) have decided to raise the dividend rate paid for this year from 20 per cent to 30 per cent. A 10 per cent cash payment will be made next month, with the other two-thirds being paid in the form of stocks later.

Vinatex to auction shares in brewery company

The Viet Nam National Textile and Garment Group (Vinatex) will auction almost 1.7 million of their shares in the Sai Gon–Quang Ngai Brewery Company at a price starting from VND10,000 (US$0.48) a share, the HCM City Stock Exchange has announced.

Information about the auction and depositing is available from today, and the auction will take place at 2pm on December 28.

The Quang Ngai-based company has a charter capital of VND450 billion ($21.5 million). It incurred losses from 2010, posting a loss of VND1.09 billion ($52,000) in 2010 and VND68.2 billion ($3.3 million) in 2011. This year, it is expecting another loss of VND71 billion ($3.4 million), as the new factory has yet to generate profit this year.

Price of sugar cane rises $5 per tonne

The price of sugar cane had a month-on-month increase of VND100,000 (US$4.7) per tonne to VND900,000-1 million ($42-43) in the Cuu Long (Mekong) Delta region due to an increase in the average recovery of commercial cane sugar (ccs), a measure of recoverable sugar in the cane.

Shrimp export value to rise 6.5% in fourth quarter

Viet Nam will gain a quarter-on-quarter increase of 6.5 per cent in the export value of shrimp, as the value will rise to US$650 million for the last quarter this year, said the Viet Nam Seafood Exporters and Producers (VASEP). However, during the first three quarters of the year, shrimp exports saw a year-on-year drop of 3.9 per cent, falling to $1.62 billion in value. The association expected total exports to have a year-on-year fall of 8.3 per cent to $2.2 billion.

Da Nang exports reach $81.8m in November

The central city's exports reached over US$3.2 million in the past month, the city's statistics department has said. Export turnover in November hit $81.6 million – 10.03 per cent more than the same period last year. Figures showed that exports of FDI firms reached $42.3 million, while State owned enterprises exported products valued at $17.17 million.Imports were $78.47 million, of which material for export processing accounted for the majority.

Businesses to show off products at Triangle Fair

Over 140 businesses from Laos, Cambodia and Viet Nam would be participating in the Cambodia-Laos-Viet Nam Triangle Development Cooperation Fair in the Central Highlands province of Kon Tum from December 4-8, the provincial department of trade and industry told Viet Nam News yesterday.

It will be the biggest trade show in the central region this year involving the participation of enterprises from the three countries.

"We will see enterprises from across Viet Nam and six provinces in Laos and Cambodia displaying products in 348 pavilions," said Phan Khanh Trinh from the department.

"They will introduce various products used in the processing of coffee, pepper, cashew, mechanics, electronics and textiles."

He said a series of conferences would be held during the four-day fair creating opportunities for businesses in the fields of investment and market expansion.

The fair is part of the 2012 National Trade Promotion Programme organised by the Ministry of Industry and Trade.-

Medi-Pharm Expo to open next week

The 19th Viet Nam Medi-Pharm Expo 2012 will take place in the capital city from December 5 to 8, said Trinh Xuan Tuan, deputy director of the Viet Nam National Trade Fair and Advertising Company (Vinexad).

Over 350 domestic and international companies from 15 countries and territories will showcase their medical products and services at 150 booths.

Held by the Ministry of Health,Viet Nam Medi-Pharm 2012 will introduce the achievements and progress of the health industry in Viet Nam and the outside world. The event is expected to create a playing field for businesses to seek partners, exchange experience and expand market shares.

According to the organising board, major exhibits include medical/surgical instruments and devices, hospital equipment, fixtures and fittings, pharma raw materials, processing and packing equipment, disposable medical /first-aid supplies, dietary supplements, and dental equipment and supplies.-

Khanh Hoa gains trade surplus of $466 million

The central province of Khanh Hoa has breached the US$1 billion dollar mark for the very first time with its export turnover this year, leading to a healthy looking balance sheet.

Having recorded US$1.1 billion worth of export turnover in the first 11 months of the year, the province's import turnover hit $577 million during the same period, leading to a trade surplus of $466 million.

The huge trade surplus ranks the province as one of the highest in the country.

The export turnover comfortably exceeds the year's target of $950 million and represents a 22 per cent increase over the same period last year.

The main export commodities are coffee, sea products, vessels, garments and textiles, while import commodities include machinery, equipment, animal feed, tobacco materials and chemicals.

About 37,000 tonnes of coffee, an increase of 56 per cent, 57 tonnes of sea food, a growth of 13 per cent, garments and textiles, an increase of seven per cent, 15 vessels, among others, have been exported.

Local enterprises said they would produce and export as much as possible before Tet (The Lunar New Year) which takes place next February.

Trade with Russia tipped to triple in 3 years

Viet Nam and Russia hope to achieve US$7 billion in bilateral trade value by 2015 through expansion of different trade channels, especially in energy, according to Vo Tan Thanh, director of HCM City branch's Viet Nam Chamber of Commerce and Industry (VCCI).

Thanh spoke at a seminar held yesterday in HCM City and organised by VCCI in collaboration with the Ministry of Industry and Trade and Russian Trade Office in Viet Nam.

Thanh said that trade in the sectors of science-technology, education and training, and tourism would also be strengthened.

In 1994, the two countries signed a treaty on bilateral friendship. Bilateral trade turnover reached $1.98 billion last year, an increase of 8.1 per cent compared to 2010.

In the first nine months of the year, two-way trade turnover reached $1.77 billion, of which Vietnamese exports totalled more than $1.13 billion and imports $640 million.

However, the current level of trade does not match the potential of the two countries, according to Thanh.

The main Vietnamese exports to Russia are textiles and garments and agricultural and fishery products. Russia exports petrol, steel, fertiliser and machinery to Viet Nam.

As of September, Russia had 78 foreign-invested projects in Viet Nam with total registered capital of $919 million. It is ranked 23rd among countries that invest in Viet Nam. Most of the investment is in the fields of mining, processing, manufacturing, banking and telecommunications.

Viet Nam's investment in Russia in recent years has risen from more than $100 million in 2008 to $776 million this year.

Kardo Sysoev Alexander, a representative of the Russian Trade Office in Viet Nam, said Russia was a highly attractive investment environment, with current GDP growth of 4.4 per cent compared to last year and an inflation rate of 3.5 per cent this year.

In the next three to four years, Russia will lower import taxes on Vietnamese agricultural products by 30-50 per cent under Russia's trade commitments that it made when it became a member of the World Trade Organisation (WTO). Import taxes on clothes, leather items and seafood will also fall.

Moreover, tariffs could fall to zero on other goods if Viet Nam and the customs unions of Russia, Belarus and Kazakhstan sign a Free Trade Agreement.

Thanh said Vietnamese businesses and Russia should work together to develop further trade in the EU market.

Last year, two-way trade turnover reached $17.75 billion. In the eight months of this year, the bilateral trade turnover rose to $18 billion, an increase of 23.12 per cent compared to the same period last year.

Duong Hoang Minh, deputy director of the European Market Department under the Ministry of Industry and Trade, said that Vietnamese exports to the EU accounted for nearly 80 per cent of total exports.

Exports to Africa increase sharply

Viet Nam's exports to most large African countries have surged over the past 10 months, according to the General Customs Department of Viet Nam.

The country's exports to Nigeria soared 100 per cent against last year to reach US$100 million.

Key export items included computers, electronics and components, transport equipment and garments. Export earnings from Angola and the Ivory Coast also rose considerably, increasing by 80 per cent to $102.14 million and 54 per cent to $211 million, respectively.

Three other markets recorded high growth rates: Egypt (28 per cent to $261.39 million), Ghana (59 per cent to $176 million) and Algeria (35 per cent to $110 million).

Conversely, export turnover to South Africa and Senegal declined sharply. The former went down 70 per cent to $534 million mainly due to a slump in demand for Vietnamese precious stones and metals, while the latter sank 53 per cent to $86.45 million against the same period last year as the country shifted to cheaper Indian rice.

Currently, eight reviewed countries accounted for 68 per cent of Viet Nam's total export value to the African bloc.

Experts urged Vietnamese businesses to be proactive in overcoming obstacles such as geographic distance, high transport costs, trading through intermediaries and language barriers.

Domestic businesses should also step up marketing activities, conduct market surveys, join biddings for construction projects and seek more chances to export construction materials, said Ly Quoc Hung, director of the Africa-West-South Asia Markets Department under the Ministry of Industry and Trade.

Listen to company concerns, City told

Municipal authorities should hold in-depth discussions with enterprises to find effective measures to ease difficulties faced by them, Le Thanh Hai, Politburo member and Secretary of the HCM City Party Committee said on Tuesday.

Addressing a meeting of the city's Party Committee, Hai said the city should create conditions to support 17 State-owned corporations that are achieving high growth in tough economic conditions so as to ensure their restructuring or equitising process is on the right track.

He said more interest rate support should be provided to firms upgrading their equipment and technology.

"The city should also continue to promote the programme to stimulate consumption through the price stabilisation prog-ramme covering essential items, because it helps poor people, students and workers buy products at cheap prices, and at the same time, helps businesses solve their inventory problem," Hai said.

He also asked relevant agencies to continue seeking measures to address difficulties faced by the real estate market, be more active in dealing with commercial banks' bad debts and remove credit bottlenecks for enterprises.

"The city should not let businesses cease operations because they can't borrow capital," he said.

Hai said that in the context of national and international economic difficulties, HCM City has achieved encouraging socio-economic results this year.

He noted that the city has targeted a GDP growth rate of 9.5-10 per cent for the next year, but it should still strive to achieve more than 10 per cent so as to create an impetus for growth in 2014 and 2015.

The meeting agreed that the city would ask the central Government to allow it to study provisions of the Urban Planning Law, Construction Law, Housing Law and the Real Estate Law and find ways to make them practical and relevant to the actual situation in the city.

Following this, the city would propose to the Government that it permits the city to implement, on a pilot basis, measures to enhance self-control; and achieve greater autonomy in planning, construction and development.

Peak auto sales season suffers

It is the rush season right now, but there is no sign of bustle in the auto industry.

A report from the Viet Nam Automobile Manufacturers Association (VAMA) says that the domestic auto market has been on the decline since 2010.

This year, it is estimated that the market will consume just 100,000 units, the same level as in the years before 2008.

The disappointing results mean that there is no surge in sales even during the traditional rush season.

In a normal year, auto sales and manufacturing increase at the end of a year and the time near to Lunar New Year. This year, however, the figures remain were very modest.

Last month, just 6,800 units were produced, VAMA said, affirming that the figure was much lower than in previous years.

Sales in October was down 21 per cent year-on-year at around 8000 units, while for the first 10 months as a while, the figure of 94,000 marked a 37 per cent fall.

Many car makers have scaled back production plans.

According to the Vietnam News Agency, Toyota has changed its production target for the year from 36,000 to 25,000 units. Other companies have changed their production schedules as well, with some working just two or three days per week.

The situation is worst at companies importing cars.

The General Department of Customs says that in the first nine months of this year, auto imports year-on-year fell by 46.5 per cent in value and 56 per cent in volume.

Many big companies including Hyundai Thanh Cong, did not import a single vehicle or several months.

Many importers said that they have cancelled up to 60 per cent of their orders.

Experts as well as industry insiders say the government's policies on fees and taxes have worsened the situation for the auto industry. They say Viet Nam needs stable taxation policies that allow firms to make feasible development plans.

Currently, nine kinds of taxes and fees are imposed on cars in Viet Nam, pushing prices well beyond the reach of most Vietnamese citizens. This has to change soon for the auto industry to survive and become a major sector in the economy, they add.

Struggling firms slash targets for 2012

With over a month left in 2012, about 40 enterprises listed on both of the nation's stock exchanges have estimated losses or revised down their profit projections for the year, citing an economic climate that has been more difficult than expected.

Phu Hung Securities Co (PHS) decided to sharply reduce its target for the year from a modest profit of only VND1 billion ($48,000) to a loss of nearly VND95 billion ($4.5 million). As of September 30, PHS had posted a loss on the year of VND66.5 billion ($3.2 million).

And the number of companies following suit was expected to increase, since many must obtain shareholder approval of plans to adjust business targets.

The most dramatic case was Post & Telecommunications Investment and Construction Co (PTC), which sought shareholder approval to adjust its projections from a profit of VND12.5 billion (US$598,000) to a loss of VND23 billion ($1.1 million).

The move followed PTC posting a cummulative loss of over VND28 billion ($1.3 million) in the first nine months of this year. Despite the writing on the wall, PTC shareholders refused to approve the new target.

Passing adjusted business plans does not make much sense to investors, according to some market insiders. Inefficient businesses will see their share values decline and small shareholders who bought shares at high prices would be victimised.

However, with losses inevitable for many of these enterprises, transparency about them is not necessarily a bad sign, especially when it offers companies an opportunity to restructure their operations.

A large number of successful companies have proposed cutting their business targets by 15-50 per cent. Even banking giant Vietcombank (VCB) and coffee processor Vinacafe Bien Hoa (VCF) plan to lower their earnings targets.

Capital shortages accompanied by a weak real estate sector have also forced many real estate developers to revise their business plans.

Phat Dat Real Estate Development Co (PDR) reduced its profit target by 94 per cent, from VND50 billion ($2.4 million) to just VND3 billion ($143,500), while PVC Construction & Investment Co, an affiliate of construction giant Vinaconex, lowered its projections by 95 per cent, from VND140 billion ($6.7 million) to VND2 billion ($95,700).

British aid to keep business sustainable

Private enterprises in Viet Nam can receive financial support of up to US$800,000 from the British Government for innovative and sustainable business.

The $11 million Viet Nam Business Challenge Fund (VBCF), launched in Ha Noi yesterday, is designed to enable private companies develop business models that help low-income populations through job creation, income improvement and access to affordable goods and services.

The fund has been built on the success of the recently completed Viet Nam Challenge Fund (2009–12), co-funded by Britain and the Asian Development Bank (ADB) – and managed by the ADB.

"The launch of this second and much larger challenge fund in Viet Nam demonstrates our confidence in this approach," said Fiona Lappin, head of the UK's Department for International Development in Viet Nam.

"We learnt from the impressive impact of our first venture that the creativity and capacity for innovation of the private sector in this country is abundant," she said, adding that the second fund could help catalyse the ambition of the private sector into tangible business projects as well as provide jobs and better incomes for the poor.

The VBCF, managed by the SNV Netherlands Development Organisation, will provide business mentoring support and award non-reimbursable funding to selected proposals through a competitive process.

It focuses on areas identified as key to the continuous development of Viet Nam – agriculture, low-carbon growth, infrastructure and basic services.

Technology lifts power output
 
The application of science and technology in the areas of power generation, transmission and maintenance is a key factor in ensuring sustainable growth in Viet Nam's power sector, according to the president of the Viet Nam Electricity Engineering Association, Dang Hung.

Speaking at a two day national conference on power, science and technology starting in HCM City yesterday, he noted that improved technologies are expected to help modernise power generation and stabilise the electrical grid by reducing power losses during dispatch and distribution to less than nine per cent by 2015.

The country's major power supplier, Electricity of Viet Nam (EVN), also mapped out a strategy for its power technology development in the next three years.

Under the strategy, EVN will focus on applying new technologies to the areas of coal combustion and the use of liquefied gases in power plants.

The supplier has also targeted more efficient electrical management and monitoring, an improvement in safety at hydropower plant dams, increased environmental observation and mitigation as a response to the impact of the magnetic field on electrical grids.

The group is also prioritising a boost in the production of domestic electrical equipment. By 2020, it aims to produce equipment that can serve lines up to 220kV and turbines for small and medium-sized power plants.

Head of EVN's Science, Technology and Environment Department Phan Thi Thuy Tien said that since 1996, the group has invested VND45 billion (US$2.1 million) to carry out about 500 scientific studies.

These then helped to boost production, ensure generation compatibility, stabilise transmission and distribution, take advantage of available resources and minimise impacts to the environment, she said.

Meanwhile, participants at the conference were urged to raise the domestic production of electrical equipment and maintenance.

Vice director of PetroVietnam's Power Service Joint Stocks Company, Ma Ngoc Ky, said that the use of locally-made equipment could help reduce costs, save time and take advantage of available human resources when maintenance is required.

At present, support from foreign experts allows the company to deal with maintenance work at power plants including Ca Mau 1 and 2. At Nhon Trach 1 Thermal Power Plant, his company has been able to master the technology used and deal with regular maintenance.

Ky also said that during the development and application of technology in the power sector, human resources and experience sharing among national and international agencies is crucial.

Internet marketing has great potential in Vietnam

At a seminar themed ‘Internet Marketing-Road to Success’ organized by the Ministry of Information and Communications, the Vietnam Association of Internet and New Horizon Internet Company on November 28, many experts were of the view that Vietnam has great potential for Internet marketing.

Experts at the seminar said the country has for the last 15 years been seeing the great potential in developing Internet marketing.

Vietnam is ranked among the countries to have the highest number of internet users--more than 31 million people.

On the current development path, many enterprises recognize the benefits of Internet marketing but have not fully exploited this technology to promote and sell their products.

Companies in Europe and the US spend at least 20 percent of their budget on internet marketing and developing countries in Asia spend around 16 percent --while Vietnam only spend a paltry 1 percent.

To Hoai Nam from Vietnam Small and Medium Enterprises Association, said small and medium enterprises have not really assessed the good features of Internet marketing.

For this purpose, the Ministry and the Association of Internet should find measures to orient and guide enterprises to apply Internet marketing effectively and to their advantage in businesses.

Vietnam sees great potential in puffer fish exports

The Ministry of Agriculture and Rural Development on November 28 sent a document to the Prime Minister asking permission for extension of a pilot project to export puffer fish (ca noc).

The increasing demand for Vietnamese puffer fish in the Republic of Korea, Japan, Taiwan and mainland China is opening up great potential for Vietnam’s seafood industry, said the Seafood Department of the Ministry of Agriculture and Rural Development.

After two years of implementation of the pilot project to catch, process and export puffer fish to the above countries, the participating provinces like Khanh Hoa and Phu Yen in the central region and Kien Giang in the Mekong Delta, have reached a deal with South Korea to export more than 70 tons of puffer fish.

Fishery experts said the shipment is expected to open up a new prospect for the country’s seafood exports.

Vietnam has around 40 species of puffer fish with estimated stocks of 37,287 tons and the annual puffer fish output from the Mekong Delta province of Kien Giang alone is between 6,000-10,000 tons.

Currently, demand for puffer fish is very huge in South Korea, resulting in the ministry’s request to extend the pilot project until 2015. In addition, the ministry has asked the southern province of Ba Ria-Vung Tau to join in the project.

Future targets for each province entail that they buy around 500-1,200 tons of puffer fish and export 200-500 tons of finished product to South Korea.

Observation Center for fishing boats set up in Hanoi

The Ministry of Agriculture and Rural Development on November 28 inaugurated an Observation Center in Hanoi to assist fishermen to operate smoothly while out at sea.

According to deputy minister Vu Van Tam, the Observation Center is part of a project called ‘Movimar Satellite System for Observation of Fishing Boats, Fishing Areas and Resources’, which was approved by the Prime Minister in 2008.

The project is being funded via the French Official Development Assistance at a cost of euro 13.9 million (US$18 million).

The Observation Center is equipped with advanced technology to monitor positions of fishing boats and receive their signals in case of an emergency, accidents or a pirate attack.

The center will handle remote sensing images and forecast safe fishing grounds for fishing boats to enter. This is the first center of its kind in Vietnam to assist fishing boats using a satellite system.

Tourism industry in Vietnam lagging behind

The Ministry of Culture, Sports and Tourism hosted a conference in Ho Chi Minh City on November 28 on furthering tourism development in Vietnam, which according to most of the delegates was lagging far behind despite it being one of the most important economic sectors.

The conference was attended by 200 tourism businesses and representatives from the departments of Culture, Sports and Tourism from 15 provinces and cities in the southern region.

According to many of the delegates, the present law for tourism has become redundant and unrealistic in the present context and there is little or no coordination between localities for improving tourism facilities and services.

The land lease costs have increased phenomenally and investors are permitted to only construct over 30-35 percent of their total area. The remaining area is to be declared a green belt, i.e. for tree plantation. This has greatly deterred and discouraged investors.

Besides, Vietnam has increased visa entry fee from US$25 to $45 from January 1 next year. Companies believe this will have a negative impact on the already floundering tourism industry.

Workshop discusses Vietnam-EU prospects

A workshop was held in Hanoi on November 29 to help businesses keep abreast of Vietnam’s economic prospects in 2013 and future challenges when a free trade agreement between Vietnam and the EU is signed.
 
 EU has been the biggest seafood importer from Vietnam. Photo by Vasep.
Doan Duy Khuong, Vice President of the Vietnam Chamber of Commerce and Industry (VCCI), noted that the EU is one of Vietnam’s largest trade partners, making up more than 80 percent of the country’s exports.

Despite the crippling debt crisis in Europe, he said, two-way trade between Vietnam and the EU in 2011 increased 36 percent over 2010, hitting US$24 billion.

Vietnam is implementing its 2011-2020 socio-economic development strategy and emerging as a dynamic economy in Southeast Asia.

It signed the partnership and cooperation agreement (PCA) with the EU in June 2012 and kick-started negotiations for a free trade agreement with the European bloc at the same time.

The PCA will help remove technical trade barriers, offering the business communities of both sides opportunities to enhance their competitiveness in international economic integration, Khuong concluded.

Luong Hoang Thai, head of the Multilateral Trade Policy Department under the Ministry of Industry and Trade, said the PCA will create a favourable environment for Vietnam in trade exchange with the European bloc when tariffs on farm products, food, footwear and garments imported from Vietnam are slashed to zero.

The agreement will open up prospects for Vietnam to enter this lucrative market in the long term and attract more investment from this bloc, he said.  

Jean Jacques Bouflet, Minister Councillor of the European Commission delegation to Vietnam, pointed to the fact that the EU and Vietnam have great potential for stronger economic and trade ties as the EU is a large market of approximately 500 million consumers.

The EU is the fourth largest foreign direct investor in Vietnam, committing US$1.77 billion in 2011. It is also a key provider of official development assistance (ODA) for Vietnam.

He expressed his belief that the PCA will bring substantial benefits to Vietnam, helping improve its economy in the global production chain.