Work starts on delta’s largest tourist site

 

Song Hau-Can Tho Tourism Joint Stock Co. on Sunday commenced work on Song Hau tourist site on Cai Khe Islet in Can Tho City.

 

The project covers 9.4 hectares in Ninh Kieu District with the invested capital of VND490 billion. It will include a 210-room hotel, a restaurant for wedding parties, convention centers, a resort, sports and entertainment zone.

 

The project will be implemented within 42 months and the restaurant is expected to start operating next year, said Nguyen Ngoc Ha, general director of Song Hau-Can Tho Co. The tourist site, the largest of its kind in the Mekong Delta, can serve around 5,500 guests and create jobs for 3,000 locals.

 

May auto sales down 19%

 

May sales of locally assembled automobiles in Vietnam fell 19% year-on-year to more than 7.660 units, down by nearly 1,750 units from April, the Vietnam Automobile Manufacturers’ Association (VAMA) reported on Sunday.

 

Last month, sales of commercial vehicles were down 21% against May of 2010 to just over 4,170 units, while sales of sport utility vehicles (SUV) and multi-purpose vehicles (MPV) were down 31% to 1,282 units.

 

VAMA reports that sales of passenger cars also decreased 6% to over 2,200 units. With January-May figures combined, however, sales of VAMA members grew 11% year-on-year to 44,996 units thanks to better results at the start of the year.

 

The passenger car segment was most impressive with sales expanding a hefty 32.9%, while SUV and MPV sales increased 17%. But commercial vehicle sales decreased 4%.

 

However, last month alone the value of car imports reached US$132 million with 5,500 completely built-up units (CBU) imported.

 

Since January, the General Statistics Office revealed, the number of CBU cars imported into Vietnam has hit 26,900 with an import value of nearly US$524 million, increasing by 45.7% in quantity and 65.4% in value against the same period last year.

 

If automobile components for local assembly were included, the total value of automobile imports in the January-May period would reach US$1.34 billion, an increase of 23.7%.

 

Eximbank joins with JVN on Master’s education

 

The Vietnam Export Import Commercial Joint-Stock Bank (Eximbank) has signed a memorandum of understanding on Master’s education with the Center of Excellence John von Neumann (JVN) under the Vietnam National University in HCMC.

 

According to the agreement clinched last Friday, from the academic year 2011-2012, 20 students studying postgraduate education in International Master of Science in Information and Communication Technologies and International Master of Science in Quantitative and Computational Finance at the center will have their school fees paid by Eximbank and be recruited by the bank after graduation.

 

JVN will be responsible for enrollment and training, while Eximbank will fund full scholarships for the best students in the two majors. Each scholarship is worth US$18,000 for the two-year course but students have to commit to working for Eximbank for a minimum of five years.

 

A representative of Eximbank told the signing ceremony in HCMC that the bank now had 5,000 executives and in the near future the number would be doubled to 10,000.

 

Lac Viet to digitalize Dong Nai’s library system

 

Lac Viet Computing Joint Stock Co. is waiting for approval from Dong Nai Province’s government to digitalize its library system.

 

If the project gets nod, Lac Viet will complete the project by the end of the year, helping readers and government staff to search for books on the Internet without having to go to the trouble of coming into libraries, said Ha Than, general director of the company.

 

Lac Viet will apply cloud computing technology and scanners, make online books available and provide better services for readers using smart phones, tablets and laptops.

 

The enterprise completed the installation of an electronic library system for the southern province that has been in use over the past two years. The system helps readers easily search for books and documents and save time given the automatic book lending and returning procedures.

 

Than added that the technology should be applied in schools with costs ranging between VND10-100 million annually.

 

Central bank stands firm on credit growth cap

 

Central bank governor Nguyen Van Giau, in a meeting on credit growth with banks in southern provinces last Friday, reaffirmed all banks must keep credit growth below 20% this year or they will be punished.

 

According to sources who participated in the meeting, although banks pointed out many reasons for applying a credit growth cap at different levels for different banks, Giau still steamed ahead with the central bank policy of imposing the same credit growth cap of 20% on all banks.

 

One of the reasons given by the banks was that some small banks had just increased their chartered capital to VND3 trillion due to regulations but they cannot widen their operations this year to raise capital growth.

 

The number of outstanding loans small banks can increase this year is even less than the capital figure raised, ensuring their capital is used ineffectively. However, this reason could not convince the governor.

 

Another issue was that banks have to ensure the ratio of loans for non-manufacturing sectors over outstanding loans is 22% or lower by the end of this month and 16% by the end of the year. Banks who cannot meet those requirements will be slapped with a required reserve ratio that is double the normal ratio and they cannot even widen their networks later.

 

The central bank, in the meeting, said that if a bank was found breaking the credit growth cap of 20%, it would be stopped from its lending operation until the credit growth had decreased to less than 20%.

 

The central bank earlier worked with 19 small and medium banks with total assets of less than VND75 trillion each to look into their operation. The total assets of the 19 banks were VND582.46 trillion by late May.

 

Among the 19 banks, there are eight with credit growth at more than 10% including Western Bank with 27%, Vietnam Thuong Tin Commercial Bank 24.7%, and TrustBank 17.7%, much higher than the 6% growth of the banking system.

 

Loans for non-manufacturing sectors of the 19 banks by May 31 were VND59.7 trillion, accounting for one-fourth of total outstanding loans while loans for real estate were VND43.58 trillion.

 

In the future, the central bank will work with big banks to gleam information on their operations. The governor also asked banks to obey the deposit rate cap at 14% per year and said the central bank would strictly punish banks that break the ceiling rate.

 

Some banks suggested lifting the deposit rate cap to 15% per year but Governor Giau told the meeting that he would consider applying the lending rate cap of 18% per year on certain banks, including Vietcombank and VietinBank.

 

Although banks said the current credit growth limitation was a tight policy, foreign institutions in the mid-term meeting of a consultative group last Thursday said that monetary tightening should continue in the near future to ensure the Government’s goal to curb inflation.

 

Pay back time for steel firms

 

According to the Ministry of Finance (MoF), steel firms had benefited from cheap power prices.

 

In reality, from March 1, 2011 the average power price stood at VND1,241 per kWh (up 15.3 per cent on average against the previous level) while that sold to steel firms was only VND535 per kWh. Thus, in churning out a tonne of steel products steel firms would enjoy profits ranging from VND214,000 ($10) to VND321,000 ($15) depending on steel furnace technology level on the back of power price differences.

 

The MoF proposed to impose 3 per cent export tariff on some sorts of steel products including construction steel, cold rolled steel, steel pipes and galvanised iron sheets with an aim to put a cap on the export of such products.

 

Earlier, in August 2010 Vietnam power authority Electricity of Vietnam (EVN) proposed the prime minister require the developers of big steel projects to self build their power plants and sell extra power output to the national grid.

 

According to EVN statistics, the price of power sold to the steel sector is currently 8.12 cents per kWh in Thailand, 14.1 cents in Singapore and 6.7 cents in Indonesia. That was why investments were poured into steel production in Vietnam over the past couples of years, according to relevant state competent agencies and industry experts.

 

EVN reportedly spent over VND30 trillion ($1.45 billion) into developing power network and sources in the past years to ensure sufficient power supply to the steel sector which now stands at around 3,500 million kWh.

 

Vietnam Steel Association (VSA) chairman Pham Chi Cuong, though echoing the proposal to sell power at prices set by market rules to the steel sector, assumed power prices only made up a small proportion of steel items’ production costs.

 

According to VSA, steel billet production was the biggest power consumer (600kWh per tonne) among steel items which use an average 100-120kWh per tonne only. Meanwhile, steeping up local steel billet production is a state investment priority to ease dependence on imported products. The VSA said 11,300 tonnes of steel billets exported in 2010 were first imported by commercial firms that it was all exported.

 

The VSA also suggested bolstering steel exports to expand output markets, ameliorate investment efficiency of businesses and ensure employment.

 

A senior industry expert said investors jumping into steel production would continue due to the sector’s high profit margins and a glut of steel would be inevitable.

 

In 2010 after-tax profits of privately-run Hoa Phat Group, a leading steel manufacturer, was VND1.376 trillion ($66.4 million) with 36 per cent coming from steel trading. Pomina’s 2010 after-tax profit of around VND660 billion ($31.8 million) chiefly came from the steel business.

 

Oil exports fall behind petrol imports

 

The Ministry of Industry and Trade has raised concerns regarding the import value of refined petrol products against the export revenue of crude oil, saying that it was a major challenge in curbing the trade deficit.

 

Deputy Minister of Industry and Trade Nguyen Thanh Bien said 2011 differed from past years when the export of crude oil was enough to offset the import of refined petroleum.

 

Ministry statistics report that the country had to import more than 5.14 million tonnes of refined petrol, valued at US$4.58 billion, an increase of 15.6 and 41 per cent in terms of volume and value during the first five months of this year. Only 3.44 million tonnes of crude oil, valued at $2.89 billion, were exported during this period.

 

The Dung Quat Oil Refinery meets around 30 per cent of the country's total refined petroleum demand, necessitating the import of refined petroleum in order to satisfy an annual 7-10 per cent surge in domestic demand.

 

Industry insiders attribute the disparity to the high prices of refined petroleum compared to that of crude oil, adding that domestic petroleum demand was still in its infancy while crude oil output has decreased.

 

Statistics revealed that, during the first five months of this year, the global price of crude oil increased by 25 per cent while the price of refined petroleum products increased by 32-43 per cent in comparison with the same period last year.

 

Viet Nam's crude oil output decreased from 18.8 million tonnes in 2005 to 15.01 million tonnes last year.

 

Cashew nut exporters upbeat about future

 

Viet Nam's cashew exports are likely to rise to US$1.5 billion in 2020 from $1.13 billion last year, the Viet Nam Cashew Association has said.

 

Speaking at an international cashew conference in HCM City last week, Nguyen Thai Hoc, its chairman, said under the industry development strategy, the area under cashew would remain at 350,000 hectares until 2015 when average productivity would be 1 tonne per hectare, before reducing to 330,000ha by 2020 when the yield would rise by almost half.

 

The industry would focus on raising the ratio of fully processed kernels to satisfy the high requirements of customers and add more value.

 

To achieve the targets, the industry would take several measures like modernising technologies and equipment to expand processing capacity, improve quality, diversify, and ensure hygiene and food safety.

 

It would provide training to 1.5 -2 million workers in cashew growing and processing.

 

Last year Viet Nam, the world's top exporter with a 37 per cent market share, exported 198,000 tonnes of cashew, a year-on-year increase of 11.8 per cent.

 

Deputy Minister of Agriculture and Rural Development Luong Le Phuong said cashew was one of Viet Nam's main agricultural exports.

 

However, Vietnamese firms only undertook production phases that contain little value addition while those that generated the most profits, like processing, increasing brand value, and commercialising products, were done by foreign enterprises.

 

He called on international buyers to work with local businesses to invest in processing in Viet Nam and help build brands.

 

Hoc said the sector currently faced many challenges, including shortages of workers and raw cashew for processing for export and increasing costs.

 

Abnormal weather patterns decreased yield and many growers preferred rubber and other trees for higher profit to chop cashew.

 

Bui Van Thach, deputy chairman of the Binh Phuoc Province People's Committee, agreed with Hoc, saying that if the Government did not support cashew growers, the area under the crop would plunge.

 

He called for establishing a fund to stabilise cashew prices and support growers.

 

Many attendees called on processing companies to focus on the lucrative domestic market.

 

Dinh Thi My Loan, general secretary of the Viet Nam Retailers Association, said the cashew industry depended too much on exports, shipping more than 95 per cent of output.

 

"Cashew consumption in the domestic market accounted a very modest rate of 1.8-2.2 per cent. In India, the world's largest cashew producer, as much as 40-60 per cent of cashew is sold in the domestic market."

 

Loan attributed the low demand at home to the high prices, poor marketing, and lack of diversified products.

 

Nguyen Phi Long, director of Nam Long Co Ltd, said because of its high price cashew was considered a "high-end" nut, and so many people did not eat it despite its high nutritional value.

 

Besides, cashew processors were not interested in the local market because of the very low margins.

 

But Loan and Long agreed that with a population of nearly 100 million, the Vietnamese market was lucrative for cashew nut and cashew nut-based products.

 

Delegates heard that with demand for the nut expected to increase sharply but area under cashew reducing, prices would remain high.

 

Hoc announced that Vinacas and cashew associations from other countries had agreed to establish the Temporary International Cashew Association with its first meeting to be next September in Gambia.

 

The two-day event, organised by Vinacas, was attented by 350 delegates, including buyers from the US, China, Australia, Russia, and Canada.

 

Khang Dien begins HCM City villa project

 

Khang Dien House Trading and Investment Joint Stock Company has launched on Saturday the Goldora Villa ecological project in HCM City's District 9 despite the challenging economic situation.

 

The project will consist of 81 detached villas and 38 semi-detached villas.

 

Apart from modern facilities, a gymnasium, and green spaces, it will also have a one-ha artificial lake.

 

Khang Dien listed on HOSE last year and in September increased its charter capital from VND332 billion (US$16.11 million) to VND439 billion ($21.1 million).

 

Trade fair displays top products

 

A trade fair showcasing high-quality Vietnamese products is taking place in central Khanh Hoa Province's Nha Trang City.

 

The six-day event, which started last Friday, features office supplies, house-hold appliance, beverages, pharmaceuticals and electronics. A programme that aims to foster new links between businesses will be held on the sidelines of the event.

 

Brewery opens $23m factory in Hai Phong

 

The Ha Noi Beer, Alcohol and Beverage Corp opened its new factory, worth VND472 billion (US$23 million), in the northern port city of Hai Phong last Saturday.

 

Located in the city's An Lao District, the plant has an annual production capacity of 50,000,000 litres of beer.

 

500 firms join Ha Noi sales promotion month

 

About 500 firms are set to join Ha Noi's sales promotion month, organised by the city's Department of Industry and Trade in November. Companies involved in the campaign are in the food and beverage, garment, footwear, electronics, furniture, banking, hotel and tourism sectors.

 

The month will also feature two special days which fall on November 12 and 13. Offers will include discounts at 20 places in every district of the city.

 

The annual, large-scale trade event is promoted as a good chance for enterprises to increase sales while creating opportunities for consumers to access high quality goods at reasonable prices.

 

Thai beverage firm to build VN plant

 

Thai Beverage Can Ltd yesterday officially signed a US$60 joint venture agreement with America's Ball Corporation to build a $60 million aluminium can plant in Viet Nam's southern province of Binh Duong.

 

The project, slated for operation in mid 2012, will cover an area of 80,000 square metres in the Viet Nam-Singapore No 2 Industrial Park, with an annual production capacity of 850 million beverage cans.

 

"This project is a milestone for us to approach the regional market, of which Viet Nam is a very important and emerging one," said Ball Corporation's president and chief executive officer John Hayes.

 

He also said that the growing numbers of middle class and young to working age population in Viet Nam had made it a very attractive country for investment.

 

"We expect that Viet Nam's demand for aluminium cans will grow 15 per cent annually for the next few years," Hayes said.

 

This is the first time the Ball Corporation has set up business in Viet Nam. The corporation aims to sell 80 per cent of its products to domestic beverage companies while the rest will be aimed at Laos and Cambodia.

 

Aswin Techjareonviful, president of Berli Jucker Public Company (BJC), of which Thai Beverage Can Ltd is a subsidiary, said when the plant was finished, it would provide jobs for about 1,200 local workers.

 

"We will bring the technology and technical training to Viet Nam but hire local employees," he said, adding that BJC already employed about 1,000 Vietnamese workers under its various joint projects in Viet Nam.

 

The joint venture received a business licence from Binh Duong People's Committee in March.

 

$109m loan for Lao Cai iron, steel factory

 

VietinBank will grant the Viet Nam-China Mineral Resources and Metallurgy Co a loan worth over VND2.24 trillion (US$109 million) to develop a cast iron and steel factory in the northern mountainous province of Lao Cai, pursuant to a contract inked yesterday between the two sides in Ha Noi.

 

The first phase will see the factory hit an annual capacity of 500,000 tonnes of steel ingots by the end of next year, and after the second phrase from 2012-15, that will rise to 1 million tonnes.

 

The $307 million factory will use iron ore from the local Quy Xa mine, Viet Nam's second largest iron ore mine with a reserve of 122 million tonnes.

 

Once operational, it is expected to contribute VND700 billion ($34 million) to the provincial budget each year while creating thousands of local jobs.

 

Five new steel plants would open this year, according to the Viet Nam Steel Association (VSA). The new plants would have a combined annual production capacity of up to 1.7 million tonnes of construction steel and around 250,000 tonnes of pig iron.

 

The opening of the new plants in Vung Tau, Binh Duong and Da Nang would also remove the reliance on imports, according to the association.

 

SOEs urged to shift equitisation model

 

The model for equitising State-owned enterprises needs to be renewed, says Viet Nam Association of Financial Investors (VAFI) general secretary Nguyen Hoang Hai.

 

"The Viet Nam Steel Corporation, in its recent initial public offer, went the right way by equitising the entire corporation," Hai said.

 

Many other State-owned enterprises, he said, have equitised their member companies first, or only offered minority stakes, approaches which have proven ineffective.

 

"Proceeds from dividends have mainly flowed back to parent companies," he said, noting that parent companies then frequently owed more in taxes to the State.

 

"Many people believe that Viet Nam Steel was not successful in its IPO, but I think it actually was, in the context of sluggish stock market," Hai added. Shares representing just under 10 per cent of the corporation's charter capital were offered, with over half being purchased at a share price of VND10,100.

 

The equitisation would also create more opportunities for the corporation, with greater transparency, improved channels for raising capital and stronger governance, he said.

 

The corporation carried out the IPO behind schedule due to difficulties in corporate valuation, Viet Nam Steel general director Le Phu Hung told the newspaper Dau tu Chung khoan (Securities Investment).

 

"Regulations on the equitisation of State-owned enterprises were not finished, and there were many valuation methods applicable to businesses," Hai said, adding that, in fact, some enterprises had overestimated the value of their assets. The lengthy delays of many equitisation plans had to be blamed on the desire and determination of management.

 

Site clearance starts for Ke Ga deepwater port

 

Prime Minister Nguyen Tan Dung has allowed the south central province of Binh Thuan to start site clearance for the construction of Ke Ga Port.

 

The PM called on provincial authorities to clearly define how much land it would need for the successful and efficient completion of the project.

 

With investment from the Viet Nam Coal and Mineral Industries Holding Corp (Vinacomin), construction is set to take place on land within Tan Thanh Commune in the Ham Thuan Nam District of Binh Thuan Province, previously allocated to 12 tourism projects. The completed deep-water port will cover 366ha, including 2km of coastline.

 

"Assisted by both investors and related authorities, we believe we have found the best spot for constructing the port," a local official confirmed.

 

Port construction will be divided into four phases, the first of which will see the development of a 3.5-million-tonne-per-year capacity.

 

All four phases are planned to reach completion by 2020, hopefully to assist in cutting transportation costs associated with bauxite projects amongst others.

 

"Bauxite will be transported from the Central Highland province of Dac Nong to Binh Thuan Province by train, after which it will be sent to customers from Ke Ga Port," the official said.

 

Key industrial products to make up 10% of capital's total exports value

 

The Ha Noi People's Committee has ratified a programme on developing key industrial products to account for 10-15 per cent of the city's total export revenue during 2011-15.

 

Under the programme, the city expects the key products to represent 30-35 per cent of its total industrial production value and the annual growth rate of the products set 5-10 per cent higher than the city's average industrial growth rate.

 

In order to meet its targets, the programme focuses on measures for enhancing the management competence of State bodies within the industrial sector, boosting participation of the city's industrial producers and exporters in domestic and foreign trade promotion programmes in order to enlarge market shares.

 

Besides speeding up administrative reforms, the programme is set to assist science and technology as well as trademark building and development.

 

Director of the Ha Noi Department of Industry and Trade, Trinh Thi Ngan, said that the programme was aimed at creating favourable conditions for the continued development of local industrial products using all available resources.

 

The capital initiated its first 5 year programme for developing key industrial products in 2005, under which the city categorised 53 products from 47 businesses into six groups including mechanical engineering, electronics, chemicals and plastics, footwear, textiles, paper and packaging as well as processed food.

 

According to the department's statistics, the 53 selected industrial products made up 34.23 per cent of the city's total industrial production value last year compared to 27.6 per cent a year earlier.

 

Besides meeting domestic market demand, the selected products earned $760 million from exports last year, accounting for 10 per cent of the city's export turnover.

 

Ngan said that, despite positive results, assistance had been poorly co-ordinated between agencies, especially within the land and environmental protection sectors. Assistance programmes had been too general and not all enterprises were informed of what they were entitled to, she said.

 

Kon Tum and An Giang to get airports

 

Minister of Transport Ho Nghia Dung has ratified a plan for airport development in the Tay Nguyen (Central Highlands) province of Kon Tum and the southern province of An Giang.

 

The combined cost of the two projects, which would serve general aviation as well as search-and-rescue and military flights, was projected to exceed VND4.9 trillion (US$233 million).

 

The airport in An Giang would be built on a site of 235ha at a cost of VND3.4 trillion ($161 million), with the first phase through the year 2020 to be budgeted at VND1.5 trillion ($71 million).

 

The first phase would focus on airport infrastructure, including an eight-lane road leading to the airport, as well as airport runways and service roads, and a 2,800 sq.m carpark that would be expanded to 10,850sq.m in the second phase between 2020 and 2030. Terminal facilities would be built on a 3,000 sq.m site in the first phase, to expand to 4,500sq.m after 2030.

 

The Kon Tum airport project is budgeted at VND1.54 trillion ($73 million).

 

The ministry has assigned the Civil Aviation Administration of Viet Nam (CAAV) and relevant authorities to begin the projects.

 

Timber industry misses export target

 

The wood industry could not reach its target export this year due to obstacles in production and trading, said experts.

 

Nguyen Ton Quyen, deputy chairman of the Viet Nam Wood and Forest Product Association (Viforest), said total export value of wood products for the first five months of this year had a yearly increase of 20 per cent, or US$1.5 billion; this fell short of its 28 per cent target growth.

 

"By the end of this year, if the export value remains at its current growth rate, the industry will not reach its total goal of $4.5 billion for the year," Quyen said.

 

The long-term domestic inflation reduced Vietnamese exported wood products' competitive edge because processors had to increase export prices to match the higher production cost, he said.

 

But growth did not increase alongside the production cost. Therefore, they limited production to reduce their losses.

 

Nguyen Chien Thang, general director of Scansia Pacific Ltd Company, said producers must delay expansion until next year due to the high interest rate on banking loans at present and the upcoming increases in price of petrol and electricity.

 

Representative of Long Tuan Kiet Ltd Company said lack of capital made the company cut workforce and advertising cost.

 

By the end of this year, the company would focus on implementing signed export contracts and discuss with partners ways to increase export price, he said.

 

Meanwhile, Quyen said, local wood product exporters should boost exports to Japan because demand was expected to increase after the natural disaster in March. The exporters must pay attention to quality of products exported to Japan.

 

Nguyen An Diem, chairman of Fisico company based in central Binh Dinh Province, said that besides signed export contracts, the company would also trade at local markets to maintain growth in production and trading for this year.

 

Long Tuan Kiet Company said it wouldl increase trading at the domestic market within several months as a means of increasing volume of sales.

 

Ngo Thi Hong Thu, deputy general director of Truong Thanh Wood Joint Stock Company, said that besides exports, the company would implement a long-term investment strategy for the domestic market. The domestic market has so far accounted for 30 per cent of total revenue of the company.

 

The association also made a proposal to reduce the import tariff on wood materials and lower interest rates on banking loans to support production enterprises, said Quyen.

 

During this difficult period, the enterprises should cut production cost, increase export price and strive to expand its export market, he said.

 

Two airlines fail to pay fuel bills

 

The Viet Nam Air Petrol Co (Vinapco) announced this week that it was facing insolvency after two air carriers had fallen in arrears on payments for fuel to the tune of VND210 billion (US$10.24 million) – a figure equipvalent to half of Vinapco's charter capital.

 

Jetstar Pacific owed the jet fuel supplier VND173 billion ($8.43 million) while Indochina Airlines owed another VND27 billion ($1.32 million), said Vinapco general director Tran Huu Phuc.

 

Vietnam Airlines, the national flag carrier and the leading State shareholder in Vinapco, has asked the Ministry of Finance and Deputy Prime Minister Hoang Trung Hai to resolve the situation, Phuc told Viet Nam News yesterday, adding "it is in process and I expect solutions will be drafted soon".

 

Vinapco was relying solely on the reputation of Vietnam Airlines in order to secure financing to import additional fuel, Phuc said.

 

"Now, they make on-the-spot payment for jet-fuel costs every day, but the prior debts are still unpaid."

 

Indochina Airlines had already defaulted on its debut, but Jetstar Pacific had committed to paying principal and interest as of July 31, Vinapco said. However, Vinapco was also requiring underwriting documents from Jetstar.

 

The Viet Nam Competition Authority has said that the debt should be resolved based on payment terms in the contract between Vinapco and Jetstar. If conciliation failed, the case could go to court. An official from the authority said on condition of anonymity that the agency had received details from Vinapco relating to the debt collection.

 

However, court-related legal proceedings were time-consuming and costly and fuel stoppage would cause numerous problems to the carriers, Phuc said.

 

Indochina Airlines, Viet Nam's first private airline, founded by musician Ha Dung, began operations in November 2008 but has been grounded for the last two years due to financial difficulties, defaulting on debts totalling VND70 billion ($3.41 million).

 

Firms urged to build trademarks

 

Vietnamese businesses and their counterparts in other developing countries should focus on developing their brands and trademarks to become competitive both at home and abroad, a seminar in HCM City on Thursday heard.

 

Louis Chan, legal counsel for Procter&Gamble Asia Pte Ltd, said a brand was a "personality" that identifies a product or service to customers.

 

A trademark was an important part of the brand and strongly influenced consumers' decision making about choice of products and services, he said.

 

Brands could help increase revenues, create customer loyalty, gain and maintain market share, introduce new products or reposition existing ones, and provide lucrative franchising opportunities, he said.

 

Strong brands were also large intangible assets, he said, pointing to the examples of Coca Cola and IBM, whose brands were valued at US$70.45 billion and $64.72 billion last year.

 

Ye Min Than, senior programme officer at the World Intellectual Property Organisation's Asia Pacific regional bureau, said: "Trademarks are indispensable for the efficient provision of products demanded in a modern economy. Brands are generally recognised as a key asset for creating value for a business."

 

Any enterprise, small, medium or large, could develop a brand image, he said, adding that businesses, especially SMEs around the world, were depending on brands to enhance their competitiveness in a globalised economy.

 

He listed some famous Vietnamese brands like Vinacafe, Chi Thanh plastic, and Phu Quoc fish sauce.

 

However, many firms still paid little attention to developing brands because of a lack of understanding about their value, he said.

 

"Many SMEs may not know how to go about developing a brand image or perhaps erroneously believe that brand development is a privileged sphere reserved only for large, multinational enterprises.

 

"In fact, developing a brand image is not an out-of-reach venture for SMEs. Of course, it does require time, effort, and commitment and certainly some financial resources."

 

He said a brand image should be developed together with the business and a branding strategy should be an integral part of any business plan.

 

The conference, organised by the World Intellectual Property Organisation, the National Office of Intellectual Property of Viet Nam, and the HCM City Department of Science and Technology, was attended by business executives and officials.