ITC spends VND600 billion to buy cranes

International Transportation and Trading Joint Stock Co. (ITC) on Wednesday signed a contract worth some VND600 billion with Germany’s Kocks Krane and Finland’s Cargotec to buy cranes for ITC International Port located in HCMC’s District 9.

Under the contract, the foreign partners will supply 40-ton Ship To Shore (STS) cranes produced by Kocks Krane and Rubber Tire Gantry (RTG) cranes of the same capacity.

According to ITC, these machines are of the ‘green technology,’ friendly to the environment and totally run on electricity instead of DO oil. Besides, they can generate electricity and reduce the energy consumption by over 30%, creating the competitive advantage for the port with low costs.

In the plan’s first phase, ITC will buy four STS cranes and eight RTG ones with half of these products handed over in next year’s first quarter to ensure the operating schedule of the port.

Having an investment of over US$180 million, the port started construction in June 2010 over an area of 41 hectares in Phu Huu Ward, District 9. The port can handle 2,000-TEU container ships and 36,000-DWT ships.

In the first phase, the 600-meter pier is set for operation in the second quarter of next year.

Laos' Sakai mining in operation

A Sakai mineral exploitation and processing plant was officially put into operation in Sakai, Vientiane on July 19.

Speaking at inauguration ceremony, Le Hong Anh, Politburo member of the Communist Party of Vietnam Central Committee, praised this joint venture between Vietnam’s Hong Quang Work Construction & Real Estate Investment Company and the Vientiane Trade Ltd Compaby as a practical contribution to mark the 50th anniversary of diplomatic ties and the 35th anniversary of the signing the Friendship and Co-operation Treaty.

He urged the company’s managers and workers to achieve and maintain a high level of productivity and efficiency.

For his part, Lao Deputy Prime Minister Somsavat Lengsavad said the two countries will engage in other joint projects in spirit of traditional ties of friendship, close solidarity and comprehensive cooperation.

The Sakai Mining project, with an initial capitalisation of more than US$30 million, is expected to produce 250 tonnes of minerals per day.

Combine harvester wins first invention prize

The combine harvester and the bed for paralyzed people have won the two highest prizes of the third HCMC Invention Awards 2010-2011 in the award ceremony held on Wednesday in HCMC.

Phan Minh Tan, director of the HCMC Department of Science and Technology, told the Daily on Wednesday that after three annual awards, inventions of scientists, institutes, farmers and owners of small production firms have met the real demands and put into use.

“Specifically, among ten inventions receiving the awards in 2008 and 2009, there are five inventions being commercialized and two others under negotiation of patent transfer,” he said.

The rice harvester winning the first prize and invented by Pham Hoang Thang is not only easy for operation and repair but also much cheaper than imported machines and more suitable to characteristics of Vietnam’s agriculture.

“I sold over 50 machines in the domestic market alone until last month,” Thang said.

HCM City urged to underscore PPP

Ho Chi Minh City needs to promote public-private partnership (PPP) investment to develop infrastructure, said Minister of Planning and Investment Bui Quang Vinh.

He told the city to work out rules for the private sector to conveniently carry out this investment.

“As for what the private sector can do, just fully facilitate it to do [it].”

The city administration agreed it would select some transportation projects attractive to the sector for PPP investment on a trial basis.

Vinh said he knew the PPP investment form was not easy to carry out and a better legal framework was needed.

Demand for public infrastructure is high in the country, but a lack of legislation has discouraged PPP investment.

Between 2011 and 2025, Ho Chi Minh City needs about $42 billion for infrastructure development and Vietnam needs some $160 billion to build the transport system in the 2010-2020.

At a PPP seminar in Ho Chi Minh City recently, lawmakers and economists called for a better legal framework for this partnership.

National Assembly deputy Tran Du Lich said Vietnam needed a law on PPP investment with transparent and clear regulations. An absence of such a law makes domestic and foreign investors believe it is risky to invest in infrastructure development.

Vu Thanh Tu Anh, from the Fulbright Economics Teaching Programme, said time-consuming and complicated bidding procedures slowed PPP projects.

The city has used PPP investment to develop infrastructure, with several projects carried out under the build-operate-transfer form.

However, more than 20 infrastructure and public service projects around the country suggested for PPP investments are staying still or moving at a snail’s pace because of an incomplete legal frame, according to reports heard at the seminar.

The country only has a decision issued in 2010 by the prime minister to serve as legislation for this investment format.

Lich said Decision 71 deals with attracting PPP investments, was not enough to lure investors.

Nguyen Dang Truong, deputy chief of the Bidding Management Department, said 20 projects had submitted to the government by localities and ministries, but only a few were feasible.

He said it would take much time to make such the law. To facilitate the current PPP projects, the ministry would propose the government to revise Decision 71 or issue a new one.

Many seminar participants shared the idea that the private sector should partner with the government in developing infrastructure as the state budget for basic development was limited and official development assistance funds had shrunk because Vietnam was a middle-income country.

Nguyen Trong Hoa, director of the Ho Chi Minh City Institute for Development Studies, said it was necessary to work out ways to lure other sources of investment funds.

More subsidised loans for business rolled out

Local banks have been rushing to make more subsidised loans available for corporate clients over the past three months.

Sacombank on Tuesday struck deals with 16 businesses to provide a credit line of over VND1.1 trillion with an annual interest rate of 13 per cent for the first three months. Under the special lending program, the loans may vary from VND30 billion to VND300 billion with the maximum term of six months and money will be disbursed from now until end-December.

This is part of the program ‘Soft loans in U.S. dollar and dong for corporate customers’ by Sacombank starting last Tuesday. The bank’s credit line of VND2 trillion is on offer at 13 per cent per annum for all new loans while its US$50 million is for exporters and importers with interest rates starting from 4.5 per cent a year.

Phan Huy Khang, general director of Sacombank, said his bank as of Monday had disbursed more than VND400 billion and $30 million for corporate customers so that they could increase their working capital for production and business operations in the second half.

Since the beginning of the year, the bank has launched 12 preferential lending programs for companies with a combined value of VND5.5 trillion and $180 million.

Similarly, Eximbank CEO Truong Van Phuoc told the Daily that the low-interest lending program combined with a hedge against exchange rate volatility his bank has introduced since the middle of last month has had over VND5 trillion disbursed with a rate of 7 per cent a year. The disbursed amount has improved Eximbank’s credit growth over the past month, Phuoc said.

With the soft loans made available, Eximbank’s corporate borrowers pay a maximum interest rate of 13 per cent if the exchange rate rises up to 3 per cent, equivalent to the preferential rate applicable at other banks. However, upon the repayment of principal, if the exchange rate increases more than 3 per cent compared to the time of disbursement, Eximbank will bear the difference.

Pham Linh, deputy general director of OCB, said his bank had already used up the VND2 trillion set aside for preferential lending. Now the bank is offering $35 million in credits to small and medium sized exporters with an interest rate of 5.5-6 per cent annually thanks to financial assistance from International Financial Corporation, a member of the World Bank Group.

Deputy general director Luong Ngoc Quy of DongABank said his bank also set aside a credit line of VND1 trillion for enterprises of small and medium sizes and members of the Ho Chi Minh City Young Business Association (YBA), with VND100 billion treated as unsecured loans. But he declined to disclose the specific figure for disbursed loans.

According to Nguyen Hoang Minh, deputy director of the HoChi Minh City Branch of the State Bank of Vietnam, the city government is directing relevant agencies to carry out a host of credit programs to pull firms out of difficulties in bank loan access. There have been two programs launched in the city so far, one of which is to target companies in Tan Binh District and the other is for manufacturers initiated by Sacombank.

Minh said his branch is working with the authorities of Phu Nhuan and Can Gio districts to provide soft loans to firms in the localities.

Minh said many firms in Ho Chi Minh City since early June have been able to borrow from banks with preferential rates of 12-13 per cent while the city’s financial package to support troubled businesses has also lent out VND25.2 trillion, nearly equivalent to the VND30 trillion as targeted earlier by the city government.

Besides soft loans, banks are cutting interest rates for old loans owed by corporate clients to below 15 per cent as requested by the central bank.

There are 20 major banks with credit market share of up to 90 per cent of the total having reduced old loan rates as of Tuesday, according to Cac Quang Duong, deputy head of the credit department of the central bank.

He added lending rates for old loans at the banks would be lowered to 14 per cent while the rates imposed on the four priority groups will be revised down to 12 per cent.

Rural sales push glut of goods
 
The campaign to encourage Vietnamese citizens to use Made-in-Viet Nam goods had achieved encouraging results, and authorities and businesses would continue to promote the idea in an effort to resolve high inventories currently held by domestic producers, said experts at a seminar.

The event was organised by the Ministry of Industry and Trade (MoIT) in Ha Noi on Wednesday. It aimed to review the campaign in the first half this year and look at solutions to bolster its effectiveness.

According to MoIT's Domestic Market Department, the Government and about 1,130 businesses held 152 sales programmes in rural areas in the first six months, and earned VND51 billion (US$2.4 million) during that period.

Since launching the campaign, there have been 1,311 promotional programmes with the participation of 11,372 enterprises nationwide. The total value of sales promotions hit over VND13 trillion ($619 million).

In addition, 35 fairs and exhibitions have been organised, attracting 3,097 enterprises. They earned a total revenue of more than VND1.6 trillion ($76.2 million) and signed many contracts, totalling some VND252 billion ($12 million).

A survey by the US Grey Group conducted before the campaign showed that up to 77 per cent of consumers in Viet Nam "loved" foreign goods.

However, at present, according to the FTA Market Research Co, 71 per cent of local consumers believed Made-in-Viet Nam goods were high quality commodities. In rural areas, people have started to get used to locally-produced goods, and in supermarkets, Vietnamese goods still account for around 80-90 per cent of commodities.

The implementation of the campaign was not without difficulties. Expansion of the distribution system required professional strategies and large investment capital, while small and medium-sized enterprises had limited capital and resources, said experts.

Nguyen Nhu Mai, deputy director of the Ha Noi Department of Industry and Trade, said that the relationship between producers, livestock breeders and processors with distributors was still shaky, and some companies took unfair advantage of sales promotions to sell old, fake and out of date goods.

Obstacles such as high inventories and slow consumption are expected in the second half, so the main goal of the campaign in the future is to stimulate consumption in a bid to resolve inventories and help enterprises.

Duong Thi Ngoc Dung, director general of Vinatextmart, confirmed that sales promotions in rural areas were only short-term measures, and Vietnamese goods needed to take a permanent place as part of a long term strategy.

"To do this, companies should build stores and trade centres instead of just bringing the commodities to rural areas for a few days and then leaving," she said.

Le Ba Trinh, Vice President of the Central Committee of the Viet Nam Fatherland Front suggested that it was necessary to boost trade infrastructure development in rural and border areas to create favourable conditions for distribution system expansion in those regions.

Besides the efforts of ministries and departments, enterprises had to quickly innovate management, improve quality and reduce production costs, as well as build and develop local distribution systems and maximise consumer satisfaction, said Deputy Minister of Industry and Trade Ho Thi Kim Thoa.

In addition, trade departments and businesses should collaborate with industrial associations and organisations to find solutions to bring Vietnamese goods to traditional markets, she said.

Land clearance problems delay elevated rail project
 
The Ha Noi elevated railway project has been delayed due to difficulties in land clearance, project management board director Tran Van Luc told a meeting of the Ha Noi Party Committee on Tuesday.

Under the plan for the project, land for the line connecting Cat Linh Street to Ha Dong District was to have been cleared by June, allowing construction to continue. The project has now requested Ha Dong District urgently complete the land clearance process by the end of next month and to relocate the cemetery in Van Noi Commune by the end of November, Luc said.

The 13-km elevated railway, stretching from Cat Linh Street to Yen Nghia bus station in Ha Dong District, will have 12 stations and run at a maximum speed of 80km/hour. As planned, a train would take about 24 minutes to complete the run from Cat Linh to Ha Dong and be able to transport 57,000 passengers per hour.

The railway is being funded by foreign sponsors and the Government at a total estimated cost of VND8.8 trillion (US$417 million).

Luc told Tuesday's meeting that construction of 42 bridge piers has been completed so far, while 31 other piers for the Hao Nam-Hoang Cau and La Khe-Ba La lines and for Beltway Road 3 were currently in progress.

Meanwhile, he urged the Ha Noi Department of Transport to speed up the grant of construction licences for the Nguyen Trai-Tran Phu-Quang Trung-National Highway 6 line and make proper traffic arrangements for the area so that construction could begin in August.

The construction of the railway line from Cat Linh Street to Ha Dong District was officially commenced in October of last year and was targeted for completion by late 2014, with trains to begin running in 2015. This year, 30 per cent of land clearance work, as well as infrastructure construction for the depot and 150 bridge piers was to have been completed.

Banks resist order to lower rates
 
Commercial banks are admitting that progress has been slow in complying with a recent Government order to refinance outstanding loans to enterprises at lower interest rates, a measure designed to help struggling businesses.

Some existing commercial loans bear interest rates as high as 19 per cent or more, and banks have been ordered to reduce these rates to 15 per cent or less by July 15 to help enterprises avoid defaults.

Small and Medium-Sized Enterprises Association chairman Cao Sy Kiem said that the State Bank of Viet Nam announced the measure earlier this month in a meeting held to review banking sector performance in the first half of the year. It ordered commercial banks to review outstanding loans and consider the financial capacity of businesses in order to refinance loans at lower interest rates and help struggling businesses maintain operations.

However, Kiem said, the reductions in interest rates have been slow in coming. Many enterprises have been forced to contact their lenders to seek the lower rates, but many of these banks have yet to issue specific decisions.

Some banks claimed to be waiting on approvals from shareholders before refinancing the loans, Kiem said, while others have argued that lower interest rates to below 15 per cent across the board would put weaker banks at a disadvantage against their larger competitors. Slashing interest rates on existing loans might drive some weaker banks into losses or insolvency.

Kiem said the State Bank needed to issue a regulation ordering the lower interest rates, rather than simply making an announcement at a meeting and expecting banks to adhere. Many banks are hesitating to comply, fearing that their competitors will resist doing so and thereby put them at a competitive advantage.

To counter the concerns, the deputy director of the State Bank branch in HCM City, Nguyen Hoang Minh, said that any businesses refused lower interest rates by on exitsing loans should report the situation to the central bank, which would be strictly handled.

State Bank deputy governor Le Minh Hung has also said the State Bank would take measures to handle any banks which did not want to implement the interest rate cut.

Vietinbank chairman Pham Huy Hung said his bank had complied with the order and would offer new loans to businesses at interest rates of 11-12 per cent per year. Borrowers with sound financial positions would be offered rates of 10-11.5 per cent.

Hung blamed the losses of many businesses, however, on careless management, and he criticised those which have invested in non-core lines of business such as real estate development and securities, forcing them into losses after the real estate and stock markets fell into difficulties.

LienViet Post Bank vice chairman Nguyen Duc Huong agreed, saying that businesses had put capital into risky investment portfolios.

Economist Dinh The Hien said high financing costs weren't the only problem plaguing businesses. The biggest problem for many was big inventory stockpiles.

APEC warned on business risks

Asia-Pacific economies should promote greater economic integration by taking resolute actions to guard against financial and sovereign risks while pursuing trade and investment, and maintain a robust growth trajectory toward achieving certain goals, according to regional business learders at the third session of APEC Business Advisory Council (ABAC).

In their 1994 Bogor Declaration, leaders of the Asia-Pacific Economic Cooperation agreed to the common goals of free and open trade and investment by 2010 for industrialised economies and 2020 for developing economies.

They agreed to pursue these targets, known as the Bogor Goals, by reducing barriers to trade and investment to promote the free flow of goods, services and capital among APEC economies.

The three-day meeting, which concluded yesterday in HCM City, aimed to finalise APEC business learders' recommendations to be submitted to APEC leaders at a summit in Vladivostok, Russia in September this year.

In its news release, ABAC said that business leaders noted that "the global economy remains fragile, exposing economies in the Asia Pacific region to serious downside risks. Re-escalation of the euro-zone crisis looms as the primary threat to global growth and protectionism is on the rise."

"Regional economic integration and achieving the Bogor Goals remain ABAC's top priority," said the ABAC Chair for 2012 Ziyavudin Magomedov.

"ABAC calls for substantive progress to be made towards the Free Trade Area of the Asia Pacific (FTAAP), and urges that all pathways to FTAAP should reflect the key principles of inclusiveness, transparency and comprehensiveness."

ABAC urges further improvement of regional supply chains, addressing chokepoints and greater use of global data standards and supply-chain infrastructure technologies, according to Leyla Mamedzadeh, ABAC executive director for 2012, who spoke at the press meeting.

"From 2010 to 2020, Asia-Pacific economies will require roughly US$8 trillion infrastructure investment, a level of demand that cannot be met without substantial involvement of the private sector, " she said.

According to ABAC Viet Nam Chairman Hoang Van Dung, "Viet Nam is no exemption. We are thirsty for that investment. The State budget cannot satisfy it due to our limited budget.

Therefore, we have to look for capital elsewhere, and one of the ways out is the public-private partnership."

"The cooperation with APEC economies has an especially important role for Viet Nam. Asia-Pacific economies are our biggest ODA donors, up to 65 per cent FDI capital, and markets for 60 per cent of Viet Nam exports. Seventy-five per cent of visitors to Viet Nam are also from regional economies."

"Viet Nam actively integrates into regional and global economies and we are involved in the TPP negotiation. This is a very good opportunity for us to widen markets and help us attract new capital and new investment flows, especially for technology transfer, science and management capability, to maintain economic growth," he added.

To attract more investment, Wayne Golding, acting chair of the Finance and Economics Working Group, said the Vietnamese Government should still continue to work hard, thinking what sectors could be liberalised.

"Viet Nam should make Government procedures easier, when issuing a licence or any kind of approval needed from the Government. Step it up, make it simpler, more transparent, and more consistent. All of those things help attract investors."

Tony Nowell, chair of the Regional Economic Integration Working Group, recommended that the Government open Viet Nam more to investment in services, including architecture services, insurance services, bank services and IT services.

If these services are of good quality, it would help Viet Nam ensure a good position in the global supply chain.

Leyla said the issue of food security remained high on the agenda of the ABAC.

The Council welcomed the inaugural meeting of the APEC Policy Partnership on Food Security (PPFS) held in Kazan, Russia last May, and supported its working plan.

The long-term goal of the PPFS with the guidance of ABAC is to shape a food-system structure by 2020 that would provide lasting food security to APEC member countries.

Fostering innovative growth continues to be an important priority for ABAC. Effective technology dissemination, an eco/living city approach in urban development, and energy-efficient practices are key innovation drivers.

ABAC views small-, medium- and micro-enterprises (SMMEs) as the backbone of the modern economy based on innovative growth, and recommends capacity-building initiatives to raise SME awareness of cross-border business development opportunities, including the use of information and communication technology tools.

Petrol price stabilisation fund needs a new management form
   
Many enterprises have incurred losses and unfair treatment due to mismanagement of the petrol price stabilisation fund.

While there is no law regulating the formation of this fund, the Pricing Ordinance and the government’s decree on financial measures mention that the fund will be used to stabilise the market if sudden price fluctuations occur.

At a press conference on July 18, the State Audit of Vietnam (SAV) reported on the current use of the petrol price stabilisation fund, and said that asking enterprises to continue contributing the same amount of money to the fund is unreasonable.

Le Minh Khai, Deputy General Auditor of the SAV, emphasised that petrol enterprises have different revenues due to different distribution systems. Timing of imports can also play a large part, with the changing global market affecting domestic prices.

In the past times, many companies have complained that they have to contribute to the fund while incurring losses, causing more difficulties.

"I think we should have a more competent and suitable mechanism to manage the stabilisation fund." Khai said.

Last week, the Ministry of Finance said that the fund should come under the national treasury since the public expressed concerns that the money they spent on fuel that contributed to the fund remained in the hands of petrol companies. The fund should be managed by the State Treasury so that enterprises do not misuse the money.

On the contrary, Nguyen Duc Kien, deputy head of the National Assembly's Economic Committee said, "The move will gain the public's trust, but it may not be as effective as the current system. Most firms obey the regulations about collecting and using the fund."

Khai approved of the Ministry of Finance's decision but said it's only a temporary measure. He further said that the government could use the money to offer as loans to financially sound enterprises, because it is a waste to leave such a huge amount sitting idle.

Different registration fees applied on same pick-up auto line    

Cities and provinces in Vietnam have imposed different registration fees for the same models of pick-up vehicles due to a disagreement over their use, according to the Vietnam Automobile Manufacturers' Association (VAMA).

Some localities consider vehicles including the Ford Ranger, Mitsubishi Triton and Toyota Hilux as passenger cars, while others classify them as commercial vehicles.

Hanoi imposes registration fees of 2% for these models, while the rate ranges between 10% and 20% in HCM City and other provinces. For example, in Binh Duong Province it’s 10%, Son La Province 12% and Danang City 15%. The fee can even vary in the same province or city. In Binh Duong Province, the fee is 2% in Bien Hoa City, while it is 10% in Nhon Trach District, VAMA said.

On March 5 this year, the General Department of Taxation issued a circular on registration fees for pick-up cars, saying that a fee of 10-20% will be valid for pick-up autos and vans used to transport passengers which have from 4-10 seats.

Manufacturers such as Toyota and Mitsubishi have asked the Ministry of Finance to apply a 2% fee for these models.

According to VAMA, the Vietnam Register recognises these models as commercial vehicles on their import certificates.

Therefore, it is violation of the ministry’s regulations for cities and province to impose fees of 10-20% that are usually applied to passenger vehicles. This is not only affecting customers’ rights, but also causing difficulties for auto businesses.

The Saigon Times said that VAMA has sent documents to tax departments, the General Department of Taxation and the Ministry of Finance to explain the problem and clarify that the cars should be classed as commercial vehicles.

VAMA has persuaded tax agencies in some localities, including Hanoi, Haiphong, Quang Ninh, Danang and Di An Town in Binh Duong to apply fees of 2% for these cars. However, many cities and provinces nationwide have maintained levels of 10-20%.

The association is waiting for a specific instruction from the General Department of Taxation for local tax agencies to ensure the correct registration fee rate of 2%.

Vietnamese product campaign needs a boost

The Ministry of Industry and Trade (MoIT) will tighten market controls and organise more Vietnamese Goods Weeks to stimulate consumer demand and boost production.

MoIT Deputy Minister Ho Thi Kim Thoa delivered the message at a conference in Hanoi on July 18 to review the on-going campaign “Vietnamese use Vietnamese goods”.

The MoIT reported that business inventories rose 26 percent on average in the first half of this year, scaling down industrial production. A boost to the campaign is one of the effective solutions the MoIT hopes to put in place to support businesses in difficulty.

However, there are major barriers that have limited the awareness of the campaign, especially amongst rural and remote communities.  

Pham Nhu Mai, Deputy Director of the Hanoi Municipal Department of Industry and Trade, cited several weaknesses of the implementation of the campaign, including limited supplies of quality goods, loose links between farmers and processors, and difficulty in attracting different investment sources for trade.

She pointed to the fact that imported products outweigh locally-made goods, making up two thirds of the domestic market.

Businesses are interested in profits, and if locally-made products are unmarketable, they will shift to imports, Mai confided.

The crux of the matter is to raise business awareness of the importance of the campaign, said Mai.

Duong Thi Ngoc Dung, Deputy General Director of the Vietnam National Textile and Garment Group (Vinatext), presented the results of a Vinatext-conducted survey, saying up to 96 percent of Vietnamese polled like Vietnamese goods.

It will be a setback if we do not succeed in raising national consciousness of the campaign, said Dung.

He suggested completing a set of Vietnamese standard and conformance criteria on all consumer goods and strictly dealing with businesses that produce substandard products.

Dinh Thi My Loan, General Director of the Vietnam Retailers Association, said it is necessary to slash the value added tax on businesses, citing the fact that the current policy of tax deferment does not support those in difficulty.

According to Loan, advertising expenses also need to be raised from the current 10 percent to 20 percent of total business costs, making it easier for consumers to access up-to-date information about locally-made products.

To boost the campaign, Loan said retailers need to prioritise Vietnamese products in their distribution network, establish wholesale trading floors for Vietnamese products, offer free retail services online, and diversify promotions.

Vu Kim Hanh, President of the High-Quality Vietnamese Product Business Association, suggested selling Vietnamese products in traditional markets alongside bringing them to rural areas.

“We will introduce policies to encourage more domestic businesses to display their products in traditional markets following the success of pilot programs in Ho Chi Minh City and Hanoi,” said Hanh.  

Industrial parks introduced in Tokyo

Some 160 Japanese individuals and organizations attended a seminar held in Tokyo on July 19 by the ASEAN-Japan Centre in coordination with representatives from 12 major industrial parks (IPs) in Vietnam.

The seminar provided a good chance for IPs, including Thang Long 1, 2, Amata Express City Urban Resident, Long Duc, and My Phuoc, to introduce their development potential, advantages, investment environment and opportunity.

All IPs are located close to airports, deep-water ports and highways and can meet the demand of Japanese investors for infrastructure facilities, restaurants and shops and other services.

Currently, many Japanese businesses plan to invest overseas, particularly in Vietnam which they consider as one of potential places for investment, thanks to political stability, abundant human resources and cheap labour cost.

Dong Nai invests US$1.1 billion in Champassak

The southern province of Dong Nai has so far injected over US$1.1 billion into Champassak province in Laos, according to the provincial Department of Planning and Investment.

This amount accounts for 33 percent of total Vietnamese investment in the neighbouring country.

Investment is mainly focused on rubber and coffee plantation and real estate, including resorts and hotels.

The projects have contributed greatly to Champassak’s socio-economic development, generating jobs for many local people and increasing the provincial budget, said Saithong Sayavong, the Director of the Champassak Department of Planning and Investment.

Worthy of note is Long Thanh Golf JSC which operates two projects with total committed investment of US$1.1 billion and Tin Nghia Company with two projects worth over US$40 million.

Vietnam welcomes foreign investors

Vietnam always welcomes foreign businesses to invest in the country, in all sectors, while creating very favourable conditions for them.

National Assembly Chairman Nguyen Sinh Hung said this at a reception for the visiting Chairman of the Republic of Korea (RoK)’s Kumho Asiana Group, Park Sam Koo, on July 19 in Hanoi.

Mr Hung spoke highly of the results produced by Kumho Asiana-funded projects in Vietnam, emphasizing that the expansion of such projects vividly reflects the practical effectiveness and increasing strength of the Vietnam-RoK strategic partnership.

He also said he hopes the group will continue its effective investment projects in Vietnam.

For his part, Park Sam Koo said Vietnam is a promising market and committed to further investment in the country.

He said he hopes Vietnam will perfect its policies to provide an attractive business environment for investors.

In future, Kumho Asiana will strengthen cooperation and expand its business in Vietnam, he said, adding that the group will improve the operational efficiency of its cultural foundation to promote cultural exchanges and mutual understanding, as well as cooperation between the two countries.

CIO ASEAN Summit 2012 takes place in Hanoi

The leadership role of chief information officers (CIO) in Southeast Asia was highlighted at the CIO ASEAN Summit 2012 in Hanoi on July 18.

The event, themed “Build vs. Buy and Scalability vs. Capability”, was co-organized by International Data Group (IDG), the Ministry of Information and Communications, the Ministry of Home Affairs and the Vietnam Chamber of Commerce and Industry (VCCI).

Participants, including leading information technology (IT) experts, policy-makers and senior government officials, shared their practical experience in the successful implementation of IT projects. They emphasized the effective use of technological advances to improve the quality of products and services, especially in the banking and finance sectors.

CIO Summit 2012 is considered an important forum for organizations and enterprises get the right perspective to compare notes on the role and responsibility of CIOs and get a new perspective on their performance in the age of information technology.

In the morning session, five important presentations by leading experts and outstanding entrepreneurs from Southeast Asia dwelled on the latest trend of IT development in the region and the world.

An awards ceremony will take place in the afternoon to honour the most outstanding CIOs in Southeast Asia.

Trade relations promoted between Vietnam and RoK

With more than 3,000 projects worth over US$24 billion invested in Vietnam so far, the Republic of Korea (RoK) is the fourth largest partner of the Southeast Asian economy, after China, the US and Japan.

The information was released at a seminar in Hanoi on July 19 with the participation of more than 200 businesses from Vietnam and the RoK.

Deputy Minister of Industry and Trade Tran Quoc Khanh said the two countries have great potential for strengthening trade relations. If the Bilateral Free Trade Agreement, which is now under negotiations, is reached, it will further promote political, economic, and cultural relations and tighten strategic partnerships between the two countries, said Khanh.

In recent years, many Vietnamese products, such as seafood, garments, timber products, rubber and coffee have been favored by the Korean people.

Two-way trade turnover increased by 37 times from 1992 to US$18 billion in 2011. The RoK is currently Vietnam’s fourth largest exporter and second largest importer.

During a Seoul visit by Prime Minister Nguyen Tan Dung in March 2012, both countries agreed to raise bilateral trade value to US$20 billion by 2015.

For his part, Rok Deputy Minister of Knowledge Economy Yoon Sang-Jick noted that since the establishment of diplomatic ties the two countries have expanded cooperation in many fields, including politics, socio-economy and culture. He expressed his hope that trade exchange will develop strongly in the future.

The seminar, co-organised by Vietnam Trade Promotion Agency (VIETTRADE), the Trade Office of the Korean Embassy in Vietnam and the Korean Importers Association (KOIMA), marks the 20th anniversary of bilateral diplomatic ties and the Vietnam-RoK Friendship Year.

150 footwear businesses attend int’l exhibition in HCM City

The 14th annual Shoes and Leather Vietnam Exhibition opened at the Saigon Exhibition and Convention Centre on July 19.

It attracted 150 footwear producers and suppliers from numerous countries, including China, Thailand, Italy, Germany, Spain, India, the Republic of Korea, Indonesia, Japan, and the host Vietnam to showcase machinery, footwear materials, chemicals, leather fashion, and accessories.

Ho Thi Kim Thoa, Deputy Minister of Industry and Trade, said that Vietnam’s footwear sector is integrating strongly into the international market and its position is improving. Vietnam is a significant supplier of footwear, so the annual exhibition attracts other world-leading producers and suppliers.

The organising board said the event, which runs until July 21, is expected to lure more than 6,000 domestic and foreign visitors.

India cooperates with Vietnam in off-shore oil exploitation

India's oil company ONGC Videsh Ltd (OVL) will continue its oil exploration and exploitation at Block 128, which is under Vietnam’s sovereignty in the East Sea.

An OVL senior official has told Hindistan Times that his company accepted an offer from Vietnam's national oil company, PetroVietnam, to stay on for another two years.

OVL's decision is a volte-face by the company, which had indicated several months ago that it intended to exit Block 128 because of its rocky seabed and difficult exploration conditions.

A Government official said the decision could affect relations between New Delhi and Beijing.

OVL’s decision means that India has indirectly involved in the East Sea dispute and rejected China's sovereign claims.

Public-Private-Partnership formula fails to lure investors

The Public-Private-Partnership formula has failed to attract investors for infrastructure projects because of a lack of a properly organized working framework, said delegates at a forum hosted in Ho Chi Minh City recently.

Delegates proposed that the State should issue a clear legal operating framework to lure investors from the private sector for infrastructure development projects.

Dr. Tran Du Lich, deputy head of the HCMC National Assembly, said that a law was necessary to implement the Party’s policy.

Lawyer Nguyen Quang Hung said that the Public-Private-Partnership formula and matters related to public investment should be amended in the Investment Law.

Besides, Public-Private-Partnership projects should not only concentrate on infrastructure but also public services as well, to improve quality and effectiveness of related services, he said.

Electronics market in somber business

Manufacturers and importers as well as distributors of electronic and home appliances are tearing their hair out over the current disastrous business performance.

Sales are falling across the board despite a desperate bid from both distributors and manufacturers to launch numerous promotions and discount programs to woo customers.

A logistics division director of an electronics importer from Japan complained to the Daily that electronics producers have had to join hands with retailers to launch promotions constantly in an effort to attract buyers.

Despite this, they have seen no improvements as expected as the sales volume is not enough for them to cover input costs.

“We all acknowledge the impossibility of luring clients right now but we have no other choice but to continue launching promotions and that is frustrating,” he stressed.

According to the director, due to limited resources of marketing expenses in the backdrop of financial constraints, electronics producers are shifting to cooperation with qualified distributors instead of accepting any partners like before.

As for electronics shopping centers, most refused to disclose information on the current purchasing power but they all shared the view that the market is in difficulties. This is the reason why traders are making full use of all holidays, not just National Day on April 30 and International Labor Day on May 1, to initiate promotions constantly with attractive prices applicable for several days.

Tran Thach Quang, in charge of marketing of Vietnam Fan Joint Stock Company (Asia Vina), said the electronics market and centers now have to accept break-even-point sales and many of them are even cutting the prices of low-value products to below input costs to stimulate consumption. All this has adversely affected the business activities of outlets of Quang’s company.

A staff member responsible for sales at a domestic electronics producer told the Daily that the market is experiencing its toughest ever period now which many people think has been was over.

For instance, the staff members at one electronics center said that from last year to earlier this year they still ordered products from producers steadily regardless of the stagnant consumption then. But the firm now has seen no demands for its new products while its sales volume has tumbled by over 20%.

Similarly, the logistics director of the aforesaid company also complained that the business situation of his enterprises is extremely dreary, with no signs of recovery for the foreseeable future. The point is that there are no wholesale customers who are project owners given public investment cuts, while end-users are only present as window shoppers, he asserted.

“When visiting a large electronics shopping center in District 1 last weekend, I noticed that customers were just there to have a look at products instead of buying them. The reason is people consider going to shopping centers as a way to relax, not to shop for goods like before,” he explained.

He believed that the market is increasingly tough because consumers are sticking to cutting expenses, adding that this is inevitable as local residents are most vulnerable to the negative outcomes of the ongoing economic slowdown.

The fact that consumers are keeping a tight grip of their money has pushed electronics manufacturers and shopping centers into a tailspin. Consequently, producers have decided to halt new product imports while distribution centers are holding inventories, especially high-value products like televisions or air conditioners.

“We are forced to postpone the plan to introduce new products in September since we understand that no products will be sold,” the logistics director said, adding that electronics centers, meanwhile, are keeping inventories given their commitments with producers.

Under the current climate, producers and distributors still pinned hopes on the recovery of the market towards the year-end although they understand that expectation is groundless.

Exporters fret over markets in 2nd half amid global gloom

Exporters joining an online conference organized by the Ministry of Industry and Trade on Tuesday worried that their performance in this year’s second half would remain difficult given the dismal global economic outlook.

Traders said they had never encountered huge challenges like in this year’s first half, but added the second half might pose greater difficulties.

Le Phuoc Vu, chairman of Hoa Sen Group and vice chairman of the Vietnam Steel Association, remarked Brazil, India and China were seeing their growth rates falling, while Japan, European and the U.S. showed no optimistic signs.

Therefore, he predicted Vietnam’s steel export would likely decline and the situation would get tougher.

Deputy Minister of Industry and Trade Nguyen Thanh Bien said the biggest difficulty in the first six months was outlets. In particular, the purchasing power of several markets considerably weakened, resulting in fewer long-term orders for many exporters.

“Previously, enterprises received orders six months, or even one year in advance, but now few enterprises have long-term orders, mostly 2-3 months or even one month,” said Bien.

Mai Thi Anh Tuyet, deputy director of the An Giang Department of Industry and Trade, said the province exported only 214,000 tons of rice, equal to 79% of the year-ago figure, meeting 40% of the target. Therefore, An Giang’s authority is now very worried, as export makes great contribution to the provincial GDP.

To reduce the dependence on rice and tra fish, whose prices have dropped sharply, An Giang Province is gradually switching to other crops.

Particularly, the cooperation program between An Giang and Saigon Trading Group (Satra) to grow the vegetable okra for export was launched in May 2012.

Pilot cultivation is carried out on 16 hectares, which will be expanded to 50 hectares by the year’s end and 100 hectares in 2013. Satra directly exports this item to Japan.

An Giang also joins hands with another enterprise to make a plan for exporting mushrooms to Hong Kong. Tuyet said the enterprise would look into the market demand to order farmers to produce.

In addition to product and market diversification, businesses are seeking ways to boost labor capacity and access credit capital with reasonable lending rates.

Do Ha Nam, chairman of the Vietnam Pepper Association, suggested the Government should encourage enterprises to establish companies abroad and borrow from foreign lenders to diversify capital sources.

* Dien Quang Hiep, director of Mifaco Company, member of the executive board of the Handicraft and Wood Industry Association of HCMC (Hawa), said on the sidelines of the conference that Hawa had petitioned the HCMC Department of Customs to help the furniture export shipments denied for custom clearance at Cat Lai port.

Hiep informed some 11 enterprises had reported their shipments were disallowed to go through customs under Circular 01 the Ministry of Agriculture and Rural Development.

“We are awaiting statistics to calculate the accurate losses. But I think the biggest loss is delivery schedule. Enterprises have committed to deliver products on time, or else they would pay penalties, not to mention a loss of prestige,” Hiep stressed.

Last week, Cat Lai port customs announced it would not clear furniture shipments that lacked forest product lists certified by forest rangers.

Lixil to start works on US$450-million factory soon

Lixil Corporation, Japan’s largest building material and housing equipment manufacturer, is committed to implementing a US$450-million factory in Dong Nai Province as scheduled.

“Construction works on the factory will kick off late this year and it is set for completion within the next three to five years,” said Morita Nguyen, sales director of Inax Corporation in Vietnam, one of Lixil’s owners.

Lixil Corporation is a consortium of five Japanese companies including Inax Corporation, Tostem Corporation, Shin Nikkei Co., Ltd, Toyo Exterior Co., Ltd and Sunwave Corporation.

Lixil has been given the green light by Dong Nai Province authorities to develop a 55-hectare factory which produces building materials, housing equipment and interior furnishing materials. It is situated in Long Thanh District’s Long Duc Industrial Zone.

Morita stated Lixil is committed to constructing the facility on schedule given current tough economic conditions. “We believe in such huge potential markets in Asia, including Vietnam,” he said.

Dong Nai has been chosen as the venue for Lixil factory since the corporation surveyed the location across regional countries three years ago. After Thailand’s flood crisis, Lixil has made the final decision to locate the facility in Vietnam, Morita added.

Inax Corporation has developed nine factories worth US$100 million in the country.