VN, RoK promote business, investment network

 

The Korea Trade-Investment Promotion Agency (KOTRA) will hold a conference on business and investment networks between Vietnam and the Republic of Korea (RoK) in early March.

 

The conference will focus on three major issues: orientation and policy for economic development in Vietnam in the next 5 years, plans for infrastructure development and key projects and the investment environment in Vietnam-preferential policy and opportunity.

 

Over the past years, the RoK is always Vietnam’s important trade partner. The two countries have established Vietnam-RoK Trans-Government Committee on Economic Cooperation and organised regular meetings to boost bilateral economic cooperation.

 

Leaders of both countries have agreed to raise the two-way trade turnover to over US$20 billion by 2015 and improve the trade balance. To achieve this goal, Vietnam and the RoK will have to obtain an annual average trade growth of 15 percent in the 2010-2014 period.

 

Recently, RoK investors have turned from investing in labour intensive industries to the sectors that require large amounts of capital such as infrastructure construction, electricity and electronics and retailing.

 

RoK imports Vietnamese puffer fish

 

The increasing demand for Vietnamese puffer fish (ca noc) in the Republic of Korea (RoK), Japan, Taiwan and mainland China is opening up a great opportunity for Vietnam’s seafood industry to develop, said the Seafood Department of the Ministry of Agriculture and Rural Development.

 

The Director of Mai Sao Seafood Company in Kien Giang province, Cao Huong Thien, said that his company has reached a deal with the RoK’s Poseidon Seafood Company to export more than 56 tonnes of puffer fish.

 

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

 

Khanh Hoa and Kien Giang are the two pilot provinces that are allowed to catch, process and export puffer fish to the RoK in cooperation with the Korea Poseidon Seafood Company.

 

 ILO project to generate jobs in Quang Nam

 

The International Labour Organisation (ILO) and the central province of Quang Nam launched a project to generate jobs for young people on February 17.

 

The project has a total budget of US$1.17 million and is expected to be extended to include other cities and provinces.

 

In 2010, the project obtained many positive results in improving the business environment, vocational training and careers guidance for young people in Quang Nam.

 

In 2011, the project will help to upgrade and promote a provincial business and investment portal, hold a local economic development forum, provide training on how to forecast the labour market and draw up a strategy for the provinces labour market until 2015 which it will submit to the provincial People’s Committee for approval.

 

It also helps raise the capacity of the rural economy, improve people’s business management skills and provide knowledge on post harvest technologies.

 

 ABVietFrance keen to invest more in VN

 

Members of the Vietnamese Entrepreneurs Association in France (ABVietFrance) want to invest in 14 projects in Vietnam, which focus on education, retailing, the environment, trade and the manufacture of construction materials.

 

During an interview with the Dau Tu (Investment) newspaper, Nguyen Hai Nam, President of ABVietFrance said that three projects are likely to be carried out this year, of which one will be in Vietnam and the other two will help to promote trade with the French market.

 

Under the first project, trade and economics courses at universities, with the support of the French government and businesses will give Vietnamese undergraduates and graduates the chance to stay and study in France.

 

The second project aims to promote one leading Vietnamese brand to France every year. This year, ABVietFrance and the Union of Vietnamese Students in France will hold a tea and coffee sales promotion, the most consumed beverages, and an essential currency earner for Vietnam at the 2011 Paris Trade Fair.

 

The third project named “Vietnam Village”, aims to attract capital from domestic sources. In the first phase, it will build a Vietnamese culinary village with the chefs and catering staff all Vietnamese.

 

First established in France in September 2010, ABVietFrance has 120 members, both businesses and individuals, who would like to invest in Vietnam.

 

Almost all Vietnamese businesses operating in France are in the services, information technology, finance and retail sectors.

 

New accord to boost trade with China

 

The Vietnam Chamber of Commerce and Industry (VCCI) and China External Trade Centre have pledged to open up access to information for businesses from the two countries.

 

An agreement of strategic cooperation signed by the two agencies in Hanoi on February 17 also offers more opportunities for businesses from the two neighbours to seek partners and expand investment and business in each other’s country.

 

In the immediate future, the Chinese side will provide Vietnamese businesses with information on a China import-export fair scheduled to take place in Guangzhou from April 17 to May 5.

 

The centre was also committed to help the Vietnamese businesses easily take part in China’s largest international trade fair.

 

Deputy Head of VCCI’s International Relations Department Pham Quang Thinh described the event as a good opportunity for Vietnamese businesses to promote their products to Chinese customers and international partners.

 

VCCI reported that China is a leading market of Vietnamese products as a number of consumer goods - such as farm produce and electric appliances- are to Chinese liking.

 

Bilateral trade reached a record US$30 billion last year, with Vietnam enjoying an increase of 47 percent in export value to over US$7 billion, which made up almost 10 percent of the nation’s gross export revenue.

 

In regard to investment, up to late December last year China had invested almost US$3.2 billion in 749 projects in Vietnam. In January this year alone, two Chinese projects with a combined investment of US$1.3 million were licensed, placing China in eighth ranking on the list of foreign investors in Vietnam.

 

Political continuity helps Vietnam fulfill targets

 

The Vietnamese leaders will lead the country’s development and modernisation to be achieved by 2020, wrote Songrit Phonnguan on Thailand’s Nation Magazine.

 

The 11th National Party Congress selected new leaders so as to ensure political continuity and will thus ensure Vietnam’s fulfillment of development targets, the author of the article writes.

 

The article also reviews the country’s achievements in weathering the global financial crisis. The flexibility in adjusting the foreign exchange rates has boosted the country’s economy, especially exports. Vietnam’s export revenue in 2009 and 2010 surged toUS$60 billion, the record high in its foreign trade history. Foreign investment has also shown some remarkably positive results.

 

The Vietnamese Government under the leadership of the Prime Minister Nguyen Tan Dung set a clear goal to make Vietnam a developed country, the article says.

 

Phonnguan also analyses the country’s weaknesses and strengths saying that the political stability will help its development plan by creating an environment for an uninterrupted implementation of industrial policy.

 

Another strength is the policy to attract overseas Vietnamese investment. Thanks to this, the amount of remittances has increased dramatically to over US$8 billion in 2010.

 

The article goes on to say that Vietnam is now world’s number two rice exporter after Thailand. But with the annual growth in the export volume, Vietnam will overtake Thailand to become the world’s leading rice exporter. Despite facing with natural disasters every year, the country’s spirit of national solidarity will help it overcome the difficulties on the way toward further development.

 

Regarding infrastructure, the Government will focus on rapid construction of a modern network of roads and railways, as well as build deep water seaports to serve large cargo ships.

 

Public transport in Hanoi and Ho Chi Minh City will also be improved. Finally, Vietnam will invest in nuclear power to supply electricity for rapid industrialisation.

 

Retail sales of goods, services rise 22 percent in January

 

The national total retail sales of goods and services last month reached nearly VND150 trillion (US$7.1 billion), a year-on-year increase of 22.1 percent, the General Statistics Office reported.

 

The growth will be 8.9 percent if the factor of rising prices were excluded, the office said.

 

Of this number, trade business gained VND118.3 trillion (US$5.6 billion), surging by 23.1 percent over the same month last year, and retail sales of hotels and restaurants was up 17.6 percent to VND16.4 trillion (US$781 million).

 

The service sector gained VND13.6 trillion (US$647 million), a year-on-year rise of 19.6 percent. Revenue from the tourist sector was VND1.5 trillion (US$71 million), up 14.5 percent against the same period last year.

 

Last year, the country's total retail sales of goods and services jumped 24.5 percent against the previous year to VND1,561 trillion (US$80 billion).

 

The retail industry annually contributes more than 15 percent of the country's gross domestic product (GDP) and employs more than 5.4 million workers, representing over 10 percent of the total workforce.

Currently, modern retail chains currently account for 20 percent of distribution in the country. This level is low compared with regional countries.

 

However, experts have predicted this figure will grow to around 31.2 percent by 2015.

 

With a population of more than 80 million, Vietnam's retail market remains very attractive to investors, especially those abroad. Retail therefore will provide one of the fastest growing and most inherently scalable investment areas in the country.

 

Encouraging French businesses to invest in Vietnam

 

Vietnam will not be reducing its exports to France, and it will encourage imports of France, especially of hi-tech products.

 

The statement was made by Minister of Industry and Trade Vo Hong Phuc during a meeting with State Secretary for Foreign Trade, Mr. Lellouche, held in France on February 16-19.

 

Mr. Lellouche said the French side would send their experts to Vietnam to provide training courses. Also according to the plan, every year there will be about 30 groups of Vietnamese staff attending a six-month training.

 

Both sides discussed opportunities for strengthening cooperation in such fields as energy, electricity, transportation, food processing and healthcare.

 

Besides, an agreement was signed on cooperation in observing fishing boats using satellite, about 3,000 large fishing vessels will have satellite equipments installed, both to ensure safety for fishermen and boost the development of seafood industry.

 

On the French side, Collecte Localisation Satellite CLS Company, will provide the equipment and help to transfer the technology. The project, worth EUR13.9 million, will be carried out in three years (2011-2014) using ODA fund of the French government.

 

Later, Minister Vo Hong Phuc had meetings with French Secretary of State for Health, Nora Berra; Head of State-Controlled Power Group, Proglio; and former French ambassador to Vietnam, Serge Degallaix. He also attended a business forum and talked with Vietnamese embassy’s staff and Vietnamese Students’ Association in France.

 

Vietnam to join International Energy Forum

 

Vietnam will officially join the International Energy Forum (IEF) at the IEF Ministerial Meeting in Saudi Arabia on February 22.

 

The decision made by Prime Minister Nguyen Tan Dung was announced by the Government Office on February 16.

 

At the meeting, leaders of the Ministry of Industry and Trade, on behalf of the Vietnamese Government, will sign the IEF’s Charter.

 

Established 20 years ago, the IEF is currently the world’s largest energy forum and is held every two years.

 

It consists of countries of the Organisation of the Petroleum Exporting Countries (OPEC), the International Energy Agency (IEA), and newly-emerging economies, including Brazil, China, and India.

 

Vietnam attends New York Toy Fair

 

For the first time, a Vietnamese company has attended the New York Toy Fair, displaying three high-tech toy products.

 

TOSY Robotics, the first Vietnamese robotics firm that produces 4 types of products - Gigantic robots, Service robots, Industrial robots and High-tech toys - showcases the AFO flying object, the TOOP top, and the TOSY fire ring.

 

Visitors to the fair, held from February 14-17, and foreign companies that take part in the event highly value the products made by TOSY for their creativeness and originality as well as reasonable prices.

 

This year’s international toy fair exhibits about 100,000 toys manufactured by more than 1,000 toy companies from 100 countries, attracting over 30,000 visitors to view the latest products in the toy industry.

 

The fair is considered one of the three world largest industrial events.

 

Vietnam’s economy highlighted in Japan

 

The Vietnamese embassy in Japan and the Tokyo Chamber of Commerce and Industry held a seminar on February 18 to introduce Japanese businesses to the latest information on the economic situation and investment opportunities in Vietnam.

 

Addressing the ceremony, Sumitaka Fujita, Chairman of the Business Study Committee on the Greater Mekong sub-region, affirmed the increasingly developing ties between Japan and Vietnam, especially the Vietnamese Government’s decision to choose Japan as its partner in building two nuclear reactors in the southern province of Ninh Thuan and mining rare earth minerals.

 

Mr Fujita said he hoped Japanese technology would contribute to socio-economic development in Vietnam.

 

At the seminar, Vietnamese counsellors briefed those in attendance on Vietnam’s Socio-Economic Development Strategy for the 2011-2020 period, its policies on developing and attracting foreign investment to the industrial sector, as well as investment opportunities in other sectors.

 

Many Japanese businesses expressed strong interest in investment in supporting industries and developing information technology human resources in Vietnam as well as the Vietnamese Government’s measures to cope with recent macroeconomic changes.

 

Logistics experts gather for annual meeting in Vietnam

 

The annual meeting of the World Cargo Alliance Family of Logistics Networks (WCA) will be held in Ho Chi Minh City for the first time from February 20-27.

 

According to WCA Chairman David Yokeum, the event is expected to break the record for the number of participating members in the past 12 years, with 1,600 professional logistics companies from more than 160 countries and territories around the world.

 

The meeting, which is full of promise to open ample new and stable cooperation opportunities for enterprises, will create favourable conditions for transport agencies to improve their relations.

 

Vietnam’s logistics market has made strong and positive advances. Vietnam ranks 53rd among 155 economies in the ranking table of the logistics sector, according to a World Bank report.

 

The WCA, with more than 3,600 member offices in 173 countries, is an association of the largest transport service supply agencies.

 

Credit growth slows in January

 

Credit grew by just 0.43 percent in January, slowing from December's 2.28 percent pace, the State Bank of Vietnam SVB) announced on its website on February 15.

 

Modest VND credit growth at commercial banks in January was blamed on high interest rates which had encouraged borrowers to seek dollar loans at more modest rates. As a consequence, credit in US dollars expanded by 2.37 percent in January.

 

The pattern was an exaggeration of the situation in January a year earlier, when dollar credit growth reached 14.07 percent while dong credit growth stagnated.

 

Lending interest rates for dong-denominated loans for consumers or to finance real estate or securities investments ranged as high as 18-20 percent per year in January, while rates for loans to exporters or to enterprises in rural areas were only slightly more competitive, at 14-16 percent per year.

 

Meanwhile, interest rates for dollar-denominated loans averaged 6.37 percent per year in January.

 

The SVB has targeted credit growth this year at 23 percent, a modest easing from last year's credit growth of 27.6 percent.

 

Other indicators for the dong were all down in January. Total dong deposits in the banking system were down 4.12 percent from the previous month, even as dollar deposits rose by 4.43 percent.

 

Overnight deposit rates in January rose to 11.2 percent per year on average in January, from 10.5 percent in December, as inflation pressures increased and bank liquidity tightened before the recent Tet (Lunar New Year) holidays.

 

The SVB kept the prime rate unchanged at 9 percent but increased its seven-day reverse repo rate to 11 percent on January 10, up from 9 percent in mid-December.

 

Government bond yields in January also rose to their highest levels since last May.

 

The SVB injected VND132 trillion into the nation's banking system in January 30 to support liquidity and payment demand.

 

Huge potential for Vietnam’s puffer fish exports

 

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

 

The Director of the Mai Sao Seafood Company in Kien Giang province, Cao Huong Thien, said that his company has reached a deal with the Korea Poseidon Seafood Company to export more than 56 tonnes of puffer fish.

 

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

 

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

 

Khanh Hoa and Kien Giang are the two pilot provinces that are allowed to catch, process and export puffer fish to the RoK in cooperation with the Korea Poseidon Seafood Company.

 

Polyester fibre plant to begin production

 

Construction of the Dinh Vu polyester fibre plant is almost complete, according to PetroVietnam Petrochemical and Textile Fibre Joint-stock Co (PVTex).

 

The mill is expected to start operations by May and will be transferred to investors by August this year.

 

Located in the northern port city of Hai Phong's Dinh Vu Industrial Zone, the plant is developed by PVTex with a total investment capital of $324.85 million.

 

Dinh Vu polyester and fibre plant has a designed production capacity of 500 tonnes of fibre a day.

 

PetroVietnam pulls back from Moroccan venture

 

PetroVietnam and PetroVietnam Fertiliser and Chemicals Corporation (PVFCCo) recently unveiled they would stop implementing a diamonium phosphate fertiliser production project in Morocco.

 

That was because the project would yield low business efficiency with an estimated less than 9 per cent pretax internal rate of return. Besides, the Vietnamese partners had to accept stringent requirements and advance a huge sum for bidding procedures.

 

The project began feasibility studies in 2008. It reported a total investment capital of $1.5 billion and a designed annual production capacity of one million tonnes of diamonium phosphate fertiliser.

 

CBUs ruffle VAMA’s feathers

 

After a poor 2010, Vietnam Automobile Manufacturers’ Association members are deeply anxious about the growing presence of complete-built cars imported into Vietnam.

illustration photo

 

In January, 2011 France-based Citroen jumped into the Vietnamese market with its Citroen DS3 vehicles which are distributed by CFAO, a leading automotive importer distributor in Africa and French territories.

 

In 2011, CFAO planned to found the Automotive de France firm to import and distribute Citroen vehicles in Vietnam.

 

Imports of complete-built-unit (CBU) cars have become a smart option for Vietnam-based car joint ventures with an aim to expanding their presence in the local market and satisfying customers’ diverse tastes.

 

This was evidenced by Honda Vietnam’s (HVN) recent rolling of Honda Accord 2011 vehicles in the Vietnamese market. HVN’s decision on importing the mid-size sedans for sale in Vietnam indicates that it did not envisage the opportunity for success once it embraced on assembling this sedan line in Vietnam.

 

In 2010, HVN sold 3,140 vehicles (including 1,827 Civic and remainder were sport utility vehicles CR-V), down 26 per cent compared to 2009.

 

Nissan Vietnam also reports importing CBU cars to sell in Vietnam though it also engages in assembling cars in the country. The firm lately launched Nissan Navara pickups into the Vietnamese market after its locally-assembled Nissan Grand Livina did not report upbeat sale figures.

 

Mercedes Benz Vietnam leads in terms of offering Vietnamese customers a wide range of choices when it brings into Vietnam many CBU cars. Of over 30 less-than-nine seat vehicle lines it introduces to customers assembled-in-Vietnam vehicles just account for a handful.

 

Ford Vietnam's managing director Laurent Charpentier said that it was necessary to refer to China experiences in developing the car industry. He said China has introduced clear and unified regulations towards the car industry which would remain stable for 20-30 years.

 

“This [legal document stability] will help businesses set their mind at ease when doing business in the industry,” he said.

 

In January 2011, Vietnam imported over 6,000 CBU cars with value of around $107 million, nearly double the same period in 2010.

 

Sales by VAMA members were down 6 per cent in 2010 against 2009 with commercial vehicles losing 4 per cent, sedans and hatchbacks 3 per cent and multi-purpose vehicles 13 per cent.

 

Southern firms swim against the tide

 

Ho Chi Minh City-based firms are desperately trying to maintain stable production amid  inflation, plus volatile deposit and exchange rates.

 

Anh Khoa Production & Trading deputy director Nguyen Khoa Van said the price of garment materials and accessories rose 80-90 per cent in 2010 with the Vietnam dong-US dollar exchange rate difference contributed around 10 per cent to the price hike.

 

The company, therefore, shifted into launching fashionable items instead of common ones to shirk competition from low-cost products.

 

“Scores of garment firms took the low-price regime as an effective tool to stay afloat of market competition in 2010, they then faced a mountain of difficulties amid soaring material prices,” Van said. He said the firm was set to achieve a 55 per cent jump in sales revenue in the first quarter of 2011 compared to the same period last year through spotlighting fashionable products.

 

Van, however, said it was still very difficult to access bank loans. “Banks often require collateral and not always willingly support businesses through offering factoring services or allowing us to mortgage end products for loans,” he said.

 

ThyssenKrupp Materials Vietnam’s Financial Department head Dang Thi Anh Tho said the exchange rate would heavily influence businesses’ activities. As 90 per cent of the company’s products are imported, the firm found it difficult to source US dollars to pay material suppliers.

 

“I think banks still do not have available dollars to lend in the first quarter. Therefore, from now on our company will shift into signing orders using other foreign currencies rather than US dollars,” Tho said.

 

Thep Viet Company Limited chairman Do Duy Thai said Vietnamese firms could not survive competition from similar items made in other regional countries given the high lending rates of 17-18 per cent.

 

“To mitigate difficulties, the company has injected capital into cutting-edge equipment to save fuel and lowering production costs,” Thai said.

 

He assumed that businesses’ efforts alone were insufficient to prevail and the government needed to advance efforts to help stabilise the macro-economy and pull back banks’ lending rates.

 

Thai said: “2011 would be another challenging year for Vietnamese companies if the price of essential input products such as electricity continues to hike amid current unfavourable lending and Vietnam dong-US dollar exchange rates”.