Plastics firms urged to form cluster

Plastic producers and investors have been urged to join a plastic industry cluster in the Dung Quat Economic Zone.

The Dung Quat Economic Zone Authority said the planned cluster would have advantages of material supply and convenient transport.

Authority management board deputy director Le Van Dung said the linchpin of the zone was the Dung Quat Polypropylene Plant which had an annual capacity of 150,000 tonnes.

Also, waterways and air transport from Dung Quat were convenient thanks to the Gemadept Dung Quat Port and the Chu Lai Airport, Dung said.

HCM City Plastic Association chairman Tran Cong Hoang Quoc Trang said the authority's zone plan would suit plastic producers who were planning to move out of the city to meet the municipal environmental protection target.

Relocating producers were seeking new positions close to material sources with easy access to transport, Trang said.

Dung said the authority, together with PV Building, a subsidiary of the Dung Quat Oil Refinery, was seeking partners to invest in a project to produce plastic products using the refinery's polypropylene resin.

The authority expected the 20ha plant, which would churn out plastic products for homes, high-tech use and construction, would attract other plastic producers to the zone.

Dung said the authority planned to give incentives on land, labour training and infrastructure development to producers in the zone.

The plastic association said the nation's plastic industry had grown by an average 15-20 per cent a year for the past decade.

Trang said, however, its competitiveness had remained restricted due mainly to an 80 per cent dependence on imported material.

A domestic material supply source would be a major competitive advantage for plastic producers in the Dung Quat zone, Trang said.

The 14-year-old zone was one of the first and most successful in the country with a development growth rate of 18.53 per cent and an average industrial output of 53.6 per cent, he said.

In the zone priorities would be given to an oil refinery and petrochemical plant, a thermo-power plant, oil and gas hub, support industry projects, engineering, high technical agricultural projects and infrastructure services.

Book market suffers from escalating price hikes 

Since early this year, escalating prices of goods have driven people to tighten their belts and cost cut, particularly on non-essential items.  

Items such as books and publications are severe casualties of people spending. Nguyen Minh Nhut, director of Tre Publishers said that with increased prices, paper and ink have also become more expensive. Publishers and bookstore owners are finding it difficult to share this burden with book readers. He added that publishers are calculating ways to increase the price of books without affecting the purchasing power of readers.

Cao Xuan Son, a representative of Kim Dong Publishers in the south said since the beginning of the year the price of paper has increased three times. Material prices have increased so rapidly that the publishers were unable to modify the book prices.

Other publishers are facing a similar situation. They are trying to maintain a stable price on books so as not to affect customers.

Unlike publishers, booksellers are facing lesser problems from the pressures of increased prices.

Pham Minh Thuan, director of PHS Joint Stock Company said since petrol prices increased, paper prices have also increased and so have printing prices. However, most books currently in bookstores were published before the price hike, therefore book prices must remain the same.

Thuan said that if prices continue to increase until May and June, publishers would increase book prices, which will surely affect readers and book purchasing will reduce substantially.

Luong Anh from Go Vap District said that earlier she spent VND200, 000 to buy books for her children every month, but now she had cut down on that expense. She only spent on the very important books such as schoolbooks and writing books for her children.

Comic books are favourites of children but now parents do not buy them and are choosing to rent comic books or read e-books online.

Financial, tax reports important for obtaining loans

Small and medium businesses should pay more attention to financial and tax reports when applying for loans, HCM City Credit Guarantee Fund deputy head Tran Buu Long said on Saturday.

He was speaking at a discussion in the city organised by the Saigon Entrepreneurs Club, HCM City Credit Guarantee Fund and the Orient Commercial Joint Stock Bank (OCB).

Long advised enterprises to improve their capacity to complete financial and tax reports prior to applying for loans.

The reports must be transparent, Long said, not only for the bank and the guarantor but also for future investors in the company.

Companies should also pay taxes on time because overdue tax payments had a negative impact on loan applications.

"Our fund will not issue a credit guarantee to an enterprise with overdue tax bills or tax fines," Long said.

Maintaining a healthy credit record on the black list of the Credit Information Centre would also assist a loan application, he said.

Plus enterprises should have at least 10 per cent of the capital for the investment project or business plan for which the financial assistance was being sought.

This showed the management's commitment to their plans, he said.

Many small businesses outsourced their accounting, which was frowned on by banks, Dien Quang Technology Joint Stock Company director Nhu Tin said.

He advised firms to employ their own accounting staff.

OCB deputy general director Tran Hoai Phuong stressed the need for persuasive business plans as well as debt payment plans.

"Banks and credit guarantee organisations need such information," Phuong said.

Being a member of an organisation like the Sai Gon Entrepreneurs Club would also be an advantage, he said.

National Monetary and Financial Policy Advisory Council member Dr Tran Hoang Ngan said bank credit specialists could advise firms on the most experienced consultant.

A co-operation agreement was reached at the meeting to help enterprises to gain access to the bank's capital.

Southern projects drag their heels

A snail’s pace site clearance and drawn out development procedures have seen many major property projects in Ho Chi Minh City fall behind schedule.

Malaysia’s Berjaya Corporation Berhad’s largest project in the southern hub - the Vietnam International University Township (VIUT) is the longest standing of these problems.

According to Mor Chun Lin, chief representative of Berjaya Corporation Berhad in Vietnam, as of March 2011, the project developer had received just 500 hectares of cleared land.

This was up from 200ha from 2010, but there was still more than 400ha to go.

He said the company had transferred compensation funds to the city’s authorised agencies and was waiting for their approved compensation prices..

He added that Berjaya was also waiting for the city’s approval of our proposal of developing VIUT’s first 180ha instead of having to develop the whole 500ha of the current cleared land as requested by the city. We plan to first build basic infrastructure and affordable houses for sale, which are now in high demand.

Lin added that in the context of high interest rates and high inflation, it would be hard for it to go ahead and develop all of the 500ha.

Granted an investment licence in July 2008, the VIUT project will cover 925ha at Tan Thoi Nhi commune of Hoc Mon district with total investment capital investment of some $3.5 billion.

VIUT is scheduled for completion in stages from 2011 to 2021. The township will feature the most modern university urban complex in Southeast Asia, with a 110ha training centre and international universities and colleges as well as international and local schools.

Another long-delayed project by Berjaya in Ho Chi Minh City is the $930 million Vietnam Financial Centre in District 10.

According to Nguyen Hoai Nam, CEO of Berjaya Vietnam, the project’s design had been adjusted 14 times to meet the Department of Construction’s requirements for planning-scale 1/500.

“We are still progressing well with this project and any problems with it are just the result of time-consuming construction formalities,” Nam said.

Covering 6.8ha, the development’s licence was granted to Berjaya in 2007 and will comprise a complex of five towers ranging from 39 to 48 storeys.

Meanwhile, Singapore’s Keppel Land Limited and joint venture partner, Chiap Hua Group, which received the investment licence for Saigon Sports City in Ho Chi Minh City in 2003, have also faced the same issues.

The project ground to a halt because of slow land clearance work and there has still been no signs of construction.

Saigon Sports City is Keppel Land’s first township development in Vietnam. The 64ha site is located in District 2 and will offer public sports facilities including an Olympic-size swimming pool, a tennis academy, a football field with grandstand seating, an auditorium and a sports training hall.

Exporters get accustomed to changes

Export processing businesses are feeling the pinch with a new customs draft circular.

Under current regulations, export processing businesses are subject to customs check-ups when the customs bodies are doubtful of their addresses, operational or managerial capacity in handling contracts.

However, much more businesses will incur customs checks under the new draft circular guiding customs procedures towards products made under export processing contracts. Some of them are those for the first time getting involved in export processing, businesses that outsource their export processing contracts in whole or in part and businesses importing materials but not having products for export several months later.

Accordingly, businesses must show papers certifying their legal ownership and usage of the workspace, machinery and equipment at the workplace. The customs bodies may also check firms’ human resources capacity relevant to the processing contracts’ implementation.

The draft circular has shocked footwear, textile and garment firms since they have to import up to 70-80 per cent of production materials.

“I felt uneasy after reading the draft circular as it has too many regulations,” said Vietnam Textile and Apparel Association general secretary Dang Phuong Dung.

A Hanoi-based footwear firm representative said many regulations in the new draft circular were unnecessary. He argued that to get business registration licences and tax codes businesses must prove their capacity with the tax, planning and investment authorities, so that the General Department of Customs (GDC) has no need to do the same thing.

GDC deputy head Vu Ngoc Anh said the customs authorities would consider enterprises’ comments before making the circular known to public.

Anyhow, the customs sector gave a warning that tightening management of export processing was of great importance because in reality a great many businesses active in export processing had abused state tax incentives for tax evasion.

New dollar rates ‘won't affect remittances'

The lower interest rates will not affect the inflow of remittances by Vietnamese abroad, the Viet Nam Association of Financial Investors has assured.

"No country in the world sets high dollar-deposit interest rates with the aim of attracting remittances from their citizens abroad," the Vietnam Economic Times quoted Nguyen Hoang Hai, VAFI general secretary, as saying.

The assurances come after analysts warned that the 3 per cent cap on dollar interest rates could cause remittances by overseas Vietnamese to dry up and possibly increase flows in the reverse direction.

Sai Gon Tiep Thi (Saigon Marketing) newspaper claimed in a story that large amounts of remittances have been flowing into the country because interest rates are higher than elsewhere in the world.

The remittances rose 17.9 per cent on average between 2000 and 2007, before jumping by 30.9 per cent in 2008, and 27.3 per cent in 2010.

In that period, the interest for three-month dollar deposits rose from 4 per cent in 2007 to 6.5 per cent in mid-2008. Again it shot up from 1.5 per cent in mid-2009 to 4 per cent in mid-2010.

The 3 – 4 per cent gap between dollar interest rates in Viet Nam and the US between 2008 and 2010 were large enough to attract dollar to Viet Nam.

Last year alone $600 million were remitted to Viet Nam to take advantage of this gap, Sai Gon Marketing said.

VAFI, however, attributes the sharp rise in remittances mainly to the jump in the number of Vietnamese working abroad.

In the past few years 70,000 to 80,000 Vietnamese have gone abroad every year, and most remitted their savings home since they did not qualify to resettle abroad.

Asked about a possible repatriation ofdollar abroad, Hai said without the State Bank of Viet Nam's permission, remitting foreign currencies abroad is "illegal" and not "an easy task."

According to SBV figures, inward remittances went up from $1.2 billion in 1999 to more than $8 billion last year.

But the media has said this only takes into account the remittances received through formal channels and does not consider the money brought home by returnees and sent through other channels.

Lifestyle Vietnam kicks off in town

International trade fair “Lifestyle Vietnam 2011” kicked off Monday in Tan Binh Exhibition and Convention Center in HCMC’s Tan Binh District.

The four-day event, one of the largest home decor and gifts fairs in Southeast Asia, was joined by local exporters and 1,500 foreign importers from 28 countries, including 320 firms with annual turnover exceeding US$100 million.

Foreign businesses will have the chance to view firsthand local products on display at over 700 pavilions at the event which is jointly organized by the Vietnam Crafts Exporters Association (Vietcraft) and the Trade Promotion Department under the Ministry of Industry and Trade.

Major products which are on display at the fair include home décor and handicrafts, tabletop and house wares, furniture and furnishings, home textiles and embroidery, gifts and ethnic items, garden accessories and personal accessories like handbags, scarves, and jewelry.

This is the best opportunity doe foreign importers to find the most reliable suppliers -- both mass production and high-end segment -- at the country of origin that have been carefully audited and selected by Vietcraft among over 4,000 suppliers nationwide, said the organizer.

The supply capacity of the exhibitors is mostly ranging from $300,000-$35 million a year, Vietcraft said.

Deputy Minister of Industry and Trade Ho Thi Kim Thoa said fine art articles and handicrafts are among Vietnam’s major hard currency earners and the sector is expected to boost its international credentials through this opportunity, according to the Vietnam News Agency.

Vietnam to import 1 mln tons oil products in July

Vietnam will import around 1 million tons of petroleum products to compensate domestic demand due to Dung Quat Refinery Plant's maintenance work starting July, said the CEO of Binh Son Refining and Petrochemical Co, the refinery’s operator.

The $3 billion facility will temporarily shut down from mid-July to mid-September for its first scheduled maintenance process which will be performed by international and local engineers and experts, said Binh Son’s CEO Nguyen Hoai Giang.

The US$25 million maintenance contract signed between the company and Korean contractors of Jcon, Dong-II, Ubec, and Deachang will have five subcontracts, excluding the costs of spare parts.

The plant has been running at 105 percent of its capacity to produce about 1,000 tons of petroleum products worth around VND20 billion per day to meet rising demand of the domestic market.

Almost all of its products, meeting 33 percent of local demand, are sold to three giant corporations including Petrolimex, Petect and PV Oil.

Dung Quat is targeted to produce 10 million tons of oil products per year by 2015 to keep up with the country’s surging demand.

Mills cut capacity as coconuts fell short from exports

In Ben Tre province, known as the land of coconuts, many coconut manufacturers have reduced capacity down to 20-30% since mid 2010 as they could not obtain inputs for processing when most coconuts have found their way to China.

Le Thi Cam Van, the manager of Ben Tre Coconut Import and Export Joint Stock Company says that her 4 coconut manufacturing factories need 600,000 dry coconuts a day to produce 100 tons of output products.

“But since July, 2010, we have to reduce capacity to only 20% because there are no coconut inputs. That means 80% of the workers have to lose their job,” she says.

Similarly, coconut manufacturing factory Thanh Vinh also needs 400,000 coconuts a day but has had to work at 30-50% capacity recently, says Cu Van Thanh – the director.

Tran Van Dau, deputy director of Ben Tre Department of Industry and Trade says that all domestic coconut manufacturers only obtained an input of 250 million coconuts in 2010, falling short of 100 million.

One of the main causes for such a shortage, according to Dau, is the mass exportation of coconuts.

Only in the year 2010, Ben Tre exported a total of 100 million coconuts into China. Other destinations include Thailand and Cambodia.

Coconut export tax applicable next month

The shortage of coconuts as raw material has been occurring for years, says Dau.

But good news at last.

The Ministry of Finance has imposed a new 3% tax on coconut exports starting May 20th.

Le Thi Cam Van says each of the coconuts exported will merely benefit the sellers. But once manufactured, its value will be much increased than unprocessed coconuts.

“Exporting raw coconuts only earns 10 dong per coconut, and this all goes to the sellers. But if the manufacturers make it into different products, they will earn hundreds of dong per coconut,” Van explains.

Many coconut growers say that coconut export tax is necessary to save the coconut manufacturing industry, but also worry that this will reduce the price, bringing disadvantages.

However, Van says that most of the manufacturing factories in Ben Tre are designed to work with high capacity and will operate in full capacity if they have sufficient inputs.

Besides, many manufacturers, including Ben Tre Coconut Import and Export Joint Stock Company, have planned to make new products like coconut powder milk, charcoal to enhance coconut’s values.

Therefore, coconut price is unlikely to go down.

In early 2010, 12 coconuts were sold for VND40,000. This peaked to VND110,000 per 10 coconuts at the end of the year.

Some manufacturers shifted to exporting raw coconuts for a higher income.

Japanese Uniqlo to hire Vietnamese employees

Japanese clothing retail chain Uniqlo will employ a number of Vietnamese graduates to work overseas as store manager/area manager and production manager.

It has launched five workshops in Hanoi and Ho Chi Minh City to seek potential Vietnamese candidates who will contribute to the company’s global expansion project.

It is a part of the New Graduate Global Hiring program -- the expansion of its new graduate hiring overseas -- aiming at new graduates who have the potential of becoming its next generation of managers for the globalization of the Uniqlo brand.

Asked about the number of expected Vietnamese employees to be hired, the representatives said the more the better since a great quantity of human resources is in need in its global expansion scheme.

Vietnamese graduates of any majors from big universities in Hanoi and HCMC or those are competent in business-level English (Japanese language skill is not required) with business acumen / business management knowledge or study background will have a chance to apply for the jobs.

Recommended universities include Hanoi University of Technology, Vietnam National University Hanoi, Foreign Trade University Hanoi, University of Social Sciences and Humanities HCMC or HCMC University of Technology.

Opportunities are also opened up to all university graduates meeting the requirements, and to those who have experience in the field, said Uniqlo’s representatives at the final company briefing session organized at HCMC University of Technology on Sunday afternoon.

Store managers are expected to increase sales through designing the layout of store merchandise, maintaining inventories, managing store staffs and ensuring customer satisfaction in stores in all over the globe or in Uniqlo headquarters in Japan.

Production managers at manufacturing site or in production headquarters in Shanghai are expected to perform production process management, quality control, maintain relationship with material manufacturers and so on.

The applicants who have attended the workshop can log on for Uniqlo’s online CV entry, write an essay and join an online skill test. Those who are chosen will take part in an interview session in Vietnam which is expected on May 26-29.

The finalists will participate in the final interview in Japan and be offered an internship at Uniqlo there by June this year, while production manager candidates will have a production internship in Shanghai, China one month earlier. 

They will start as a store employee during a minimum of 6 months to a maximum 2 years in Japan. During this period, the first goal of each candidate is to attain a UNIQLO store manager certification in Japan.

The production manager trainee would continuously need to work at production related departments in HQ and manufacturing site before promotion to production manager.

With the target to be the world leading clothing manufacturer- retailer by 2020 with annual sales of 500 million yen ($60 billion), Uniqlo is speeding up opening more stores in European region and Asia.

It has a total of 953 stores, including 809 stores in Japan, 144 stores in foreign countries like the UK, France, Russia, South Korea, China, Singapore, Malaysia and the US.

The brand, the world No.1 retail chain with revenues of US$8.15 billion as of the latest fiscal year ended on August 2010, enjoyed an annual growth of about 19 percent last year.