US$5.6 bln for Long Thanh airport, phase 1

The Ministry of Transport (MoT) has submitted to the Prime Minister a construction plan for Dong Nai-based Long Thanh International Airport, with the first phase estimated to cost US$5.6 billion.

The MoT proposed building a terminal capable of serving 25 million passengers a year and two parallel runways in the first phase. Together with compensation for approximately 5,000ha land clearance, total budget for the first phase was estimated at US$7.8 billion.

The ministry insisted it is difficult to mobilise such a huge amount of capital in the current context of domestic and global economic slowdown.

It later decided to divide phase 1 into phase 1A and 1B. Accordingly, more than 2,500ha of land will be acquired for a runway and a terminal capable of receiving 17 million passengers a year in Phase 1A, costing US$5.6 billion.

An additional US$2.2 billion will be mobilized for the acquisition of the remaining 2,400ha of land to build the second runway in phase 1B.

In phase 1A, approximately US$2.7 billion will be sourced from the State budget, government bond sales, and official development assistance (ODA). The remaining US$2.9 billion will be mobilised from businesses and through joint venture and public-private partnership (PPP) models.

MoT Dinh La Thang has revealed a number of foreign investors from Japan, France and the Republic of Korea are keen to invest in the project in the form of PPP or BOT (build-operate-transfer).

Phase 1A is scheduled to get off the ground in 2017 and complete by 2023.

Hanoi CPI picks up in April

April’s Consumer Price Index (CPI) in Hanoi rose 0.12% from the previous month and 6.27% compared to the same period last year, according to the Municipal Statistics Office.

The capital city experienced a slight improvement in its price index after a 0.15% fall in March, signaling the purchasing power has already bounced back.

Garments, hats and footwear saw the highest price growth, at 0,44%, followed by food and restaurant services, at 0.32%.

However, housing, electricity, water, fuel and construction materials prices decreased for the third consecutive month.

Domestic gold prices fell 0.87% over the previous month, while the VND/USD rate dropped 0.01% from the previous month.

Japanese businesses eye agriculture partnership in Mekong Delta

As many as 40 Japanese businesses operating in seafood industry, farming, trade, and also financial services attended a seminar on investment environment and cooperation potential in agriculture between Japan and the Mekong Delta region in Can Tho city on April 21.

Kohei Watanabe, Head of the Japan-Mekong Business Cooperation Committee under the Japan Chamber of Commerce and Industry, said that the attendance is part of a trip organised by the Chamber to explore investment environment in the Mekong Delta – the region that is hoped to produce grains for Asia.

He stressed that farming cooperation and the transfer of seafood processing technologies, quality management and know-how about the formation of a value chain will shape up a win-win partnership between Japanese businesses and the region.

The Japanese participants were introduced to 122 projects that the Mekong Delta region is calling for investment.

According to Deputy Head of the Steering Committee for the Southwestern Region Nguyen Phong Quang, as Vietnam’s largest rice granary and fruit and aquatic product provider, the Mekong Delta holds great potential for developing agriculture.

The region is inviting investment in transport and irrigational infrastructure, including roads, seaports and airports in order to better serve development demand and goods transportation, stated Quang.

On the occasion, the Steering Committee for the Southwestern Region and the Japan-Mekong Business Cooperation Committee signed a memorandum of understanding on economic cooperation.

Following the seminar, the Japanese businesspeople will continue their fact-finding tours of other localities in the region.

A golden chance for market stimulation

A large number of retailers in Vietnam have launched promotional offers to stimulate consumer demand in the lead up to the five-day long holiday, starting April 30.

Supermarkets in Hanoi and Ho Chi Minh City have stockpiled goods for this long holiday since the start of April.

Saigon Co.op Mart is offering huge discounts of up to 49% on 3,000 items, gift vouchers worth VND30,000-VND50,000 and other attractive deals to mark its 18th anniversary and national days.

It is also doubling the bonus point for Co-op Mart card and VIP card holders on Thursdays and Fridays.

Nguyen Thanh Nhan, Director of Co.op Mart supermarket chain, said Co-op Mart has prepared large amounts of fresh foodstuff, processed food, vegetables, meat, poultry, sausages, instant noodles, beverages, and fashionable clothing for those who want to go for a picnic or hold party at home.

The long holiday season is also an excellent chance to travel operators to market discounted tours to attract visitors.

TransViet Travel has introduced attractive deals for travelers, including a VND 2 million discount on a tour for all groups of more than 2 people. It plans to launch a promotional programme in the summer with competitive prices on tours of Singapore- Malaysia, Hong Kong, Japan, Dubai, Europe and the US.

The company has worked with airlines, hotels and service providers on plans to ensure customers receive quality services at highly competitive prices.

“We do hope the number of visitors booking via TransViet Travel will increase fourfold this time,” said Doan Van Truong, sales manager of TransViet Travel.

Electronic and entertainment centres do not miss this golden chance, offering massive discounts. Tran Anh electronics and computer supermarket, Vincom Center, HC Electronics Supermarket are running a series of promotion programmes to attract customers during the holiday.

Doosan Vina ships desalination evaporator to Saudi Arabia

Doosan Vina’s Water Shop announced on April 21 that they has tightened down the final bolts on a 4,500 ton plug-n-play multistage flash desalination evaporator and shipped it to Saudi Arabia.

Because of its mammoth size and weight, movement of the desalination plant to Doosan Vina’s dedicated and purpose built port facility had to be calculated down to the centimeter.  The intense planning and precision assure that personnel will be safe and the integrity of the equipment won’t be compromised.

A Doosan Vina press release says the transfer, loading and lockdown on the gigantic Dong Bang 3 took more than four hours to complete.  After leaving the Doosan Vina’s port the evaporator will be at sea for 25 days to reach its final destination in Saudi Arabia.

This is the fifth desalination plant that Water Shop has completed since starting production in 2009. Three other evaporators in the Yanbu 3 project are currently being assembled and the second is expected to ship on June 21, 2014.

They will produce enough water to meet the daily needs of more than a million people in the Kingdom of Saudi Arabia.

The Yanbu Phase 3 contract was signed in March 2013 for four of the massive desalination units to be made in Vietnam at Doosan’s Quang Ngai complex. Each of the units includes the size of a football pitch, five stories high and capable of producing 95 million liters of fresh water per day.

At the ceremony, Ryu Hang Ha, Doosan Vina’s Senior Vice President made a brief to honor the 233 men and women of Doosan Vina’s Water Shop and celebrate the completion of the first of four desalination plants being built by the company for the Yanbu Phase 3, Saudi Arabia desalination project.

Seafood exports to Russia increase sharply

The Vietnam Association of Seafood Exporters and Producers (VASEP) has forecast Vietnamese bivalve mollusk exports to Russia will increase significantly in the second quarter of the year.

Three year ago, squid and octopus exports to Russia unexpectedly dropped over the span of a few months. The market began to rebound in June 2013 and exports ever since have steadily edged up, experiencing exponential growth of between 163% and 966%  over the previous year.

Vietnamese businesses have outdone their opponents from Portugal, China, Spain, Tunisia, Thailand, India, and Indonesia to get the lion’s share in Russia.

However, Vietnam will still face stiff price competition if the country wants to massively expand exports and penetrate deeper into the Russian market, VASEP cautions.

In 2013, Vietnam was Russia’s second biggest frozen squid supplier after China while it was the biggest frozen octopus exporter to the market.

Healthy jump in exports to Egypt points to recovery

Vietnamese statistics show exports to Egypt climbed 40.7% to US$81.42 million in the first quarter of 2014, signaling that trade between the two nations is recovering strongly.

Despite significant progress in bilateral trade during the period 2009 to 2012, two-way trade volume in 2013 tapered off sharply by 24% compared to 2012 on the back of political unrest that erupted in Egypt.

However, with this latest good news, leading government economists and market analysts are now optimistically forecasting that Vietnamese exports to Egypt have bottomed out and are now on the rebound, expected to exceed more than US$200 million for 2014.

The Ministry of Industry and Trade reports Vietnamese export earnings from Egypt were US$221.61 million, US$297.14 million and US$256.09 million in 2013, 2012 and 2011, respectively.

On the flip side, Egypt’s exports to Vietnam also fell sharply from US$14.4 million in 2011 to US$7.55 million in 2012 and US$8.73 million in 2013.

Egypt is a highly lucrative potential market with more than 85 million consumers. Last year, the African nation spent roughly US$59.22 billion on importing machinary, equipment, food, chemicals, wood and fuels, a market that Vietnamese businesses savour.

In the first four months of 2014, seafood and agricultural products topped the list of Vietnamese exports to Egypt with a value of US$28.94 million, accounting for 35.5% of total market share.

Textile, fibre and garment exports surged 27 folds against the comparable period in 2013 to US$11.46 million. Other products also experiencing high growth included steel (up 184% to US$1.58 million), means of transport (up 59% to US$4.67 million) and machines, equipment and tools (up 10.2% to US$4.26 million).

In the first quarter of this year, Egyptian exports to Vietnam hit around US$2.1 million, substantially unchanged from the same period last year, primarily consisting of garment, leather and footwear accessories, ore and minerals, pharmaceuticals, milk and dairy products, fibre, and petroleum products.

In late October 2013, the Egyptian Government approved an economic stimulus package worth US$3.2 billion, aimed at helping its economy rebound. It is hoped that this legislation will spillover and materialize in a substantial bump in bilateral trade between Vietnam and Egypt in the coming time.

According to the Vietnamese Trade Office in Egypt, Vietnamese businesses should revise their marketing strategies to attract new business in Egypt, including boosting the number of trade promotions.

Although Egypt has not superimposed strict requirements on imports, goods exported to the market must jump through some fairly rigorous quality standards, which Vietnamese business need to be keenly aware of, the office reports.

Vietnam and Egypt have in the past entered into a series of economic agreements, such as a Trade Agreement in May 1994, an Aviation Agreement in April 1999, an Investment Encouragement and Protection Agreement in February 2004, a memorandum of understanding on fisheries cooperation in 2006 and an Avoidance of Double Taxation Agreement in 2006.

Development Triangle Area receives a boost

Leaders of Cambodia, Laos and Vietnam (CLV), development partners, and representatives of international organisations met in Dak Lak province to set the course for the Development Triangle Area.

Vietnamese Minister of Planning and Investment Bui Quang Vinh said CLV cooperation will help speed up the implementation of prioritised projects and programmes in the region.

At the 7th Development Triangle Area Summit in Vientiane, Laos, in March 2013, CLV leaders agreed to popularise the area’s development potential and opportunity, mobilise official development assistance (ODA) for prioritised projects, and boost domestic and foreign investment in the region.

leaders of Cambodia, Laos and Vietnam and development partners evaluated opportunities and challenges for the Development Triangle Area in Dak Lak on April 21 (Photo:VGP)

The fact is that people, development partners and private businesses know little about CLV cooperation compared with other cooperation initiatives such as ASEAN or the Greater Mekong Sub-region (GMS), said Vinh, adding  it is essential to raise public awareness of the region’s potential, opportunities and challenges.

In addition, he said it is necessary to consider institutional and policy making reforms to facilitate ODA and private investments in the three countries.

Tomoyuki Kimura, Asian Development Bank (ADB) Country Director for Vietnam, suggested the Development Triangle Area outline an overall vision for developing the region in a comprehensive and sustainable manner.

He said obstacles as well as priority areas should be clarified to support the drawing up of practical development plans.

He asked stakeholders to formulate an implementation roadmap and a consistent investment framework, identify priority areas, use resources effectively, and diversify investment sources.

Vietnamese Deputy Prime Minister Nguyen Xuan Phuc highlighted the region’s underdevelopment, poor infrastructure, low living standards, and limited resources as the major obstacles to its development.

He said the implementation of the master plan on socio-economic development and preferential policies for the Development Triangle Area, has yet to meet the countries’ expectations.  

Phuc stressed the need to improve the region’s poor transport infrastructure which is currently a huge hindrance to progress.

Priority should be given to building and upgrading infrastructure at border economic zones and border markets to facilitate the efficient transportation of goods, he said.

The Deputy PM reminded the CLV localities to pay more attention to agricultural development, poverty reduction and human resource training, while maintaining rapid and sustainable development in association with environmental protection and climate change adaptation.

Each locality needs to improve its competitiveness, investment attraction and administrative reform capacity, and to intensify border security measures to stabilise border areas and support development, he concluded.  

PGBank, Vietinbank may not merge

Vietinbank was not mentioned in the new merger proposal submitted by the Management Board of Petrolimex's PGBank at PGBank's shareholder meeting held yesterday.

The document only mentioned the merger with another bank as part of its restructuring process, with no reference to Vietinbank or any other banks, although the previous proposal said that 99 per cent of PGBank's stake would be sold to Vietinbank, to become a banking unit under the nation's second largest bank by assets.

If the merger of PGBank with another bank is passed, the ownership of Petrolimex, the national petroleum group at PGBank, would be reduced to 20 per cent, from its current 40 per cent.

According to PGBank, the merger and acquisition was PGBank's effort to restructure, in a bid to create a healthy banking system. A merger with Vietinbank was just one choice, among many options.

At its shareholder meeting yesterday, with the participation of 38 stakeholders who represented the ownership of 93.24 per cent of the voting shares, PGBank also sought to achieve a pre-tax profit of VND250 billion (US$11.9 million) this year, four times higher than last year, through resolving bad debts.

With a high bad debt ratio, at 2.98 per cent as of the end of last year, resolving bad debt is seen as a real challenge to the management board.

A large level of bad debt, coupled with the Government's interest rate cuts, had impacted the bank's profits last year, according to chairman of the Management Board, Bui Ngoc Bao. PGBank reported pre-tax profits of nearly VND52 billion ($2.4 million) last year, while only meeting 13 per cent of its goal and being 9 per cent lower than in 2012.

The bank also planned to pay dividends at a ratio of 1 per cent of its charter capital.

A proposal to offer PGBank's shares to be traded on exchanges also passed at the shareholder meeting yesterday.

Vingroup prepares to issue additional shares

Property developer Vingroup Joint Stock Company (VIC) will issue 120 million additional shares between the second quarter of 2014 and first quarter of 2015.

This information was released by the company during a shareholders' meeting held in Ha Noi yesterday. This latest development was reported by the news website ttvn.vn, which reported that the additional shares will be listed on the Singapore Exchange or another foreign bourse.

The company currently caps the maximum foreign investor holding ratio at 27 per cent of its total shares.

According to the Vingroup management board, the company's turnover and profits reached its highest levels last year, despite global economic slowdown.

In 2013, the net turnover from business activities reached about VND18.38 trillion, or US$875.24 million, up 132 per cent over the previous year. The after-tax profits attained were VND7.15 trillion, or $340.48 million, a year-on-year increase of 287 per cent.

These results were attributed to timely completion, delivery, and operation of major projects, including Royal City, Times City, and Vincom Mega Mall. New developments, such as Vinschool, Kids World, and VinEcom also contributed to the results.

Last year, the company successfully raised $200 million from international bond issuances, mobilised $200 million from global private equity investor, Warburg Pincus, and borrowed and disbursed $150 million worth of other international finances.

Vingroup leaders noted that the company was already planning to stabilise investment capital sources for its projects within the next two years. Business revenues alone were expected to reach about VND25 trillion, or $1.19 billion, this year.

In 2014, the company will boost growth from shopping centres, hotels, entertainment, healthcare and education projects, including Vincom Center, Vinpearl Land, and Vinmec.

It will develop new projects in Ha Noi, HCM City, the central Quy Nhon City, and the southern Can Tho Province, when the real estate market rallies and macroeconomic conditions are favourable.

VIC shares yesterday closed down 1.5 points at VND65,000, or $3.1 per share on the HCM City Stock Exchange.

MDB shareholders approve merger

The Mekong Development Bank (MDB)'s shareholders' meeting on Tuesday adopted a plan for it to merge with a credit institution.

This was reported by Dau tu (Vietnam Investment Review) online, citing bank sources, which stated that the shareholders authorized the bank's management board to finalise the merger plan, but did not divulge further details on the name of the institution with which it is planning a merger. Some media reports had previously claimed that the bank will possibly merge with Maritime Bank, which holds 10.16 per cent of its total equity.

On Tuesday, Maritime Bank Securities Co. Chairman Le Dinh Ngoc and Viet Nam Investment Development Group Capital Manager Chu Duc Tuan were voted as the new members of the MDB's management board. The group is believed to have a close relationship with Maritime Bank. According to a representative from the Maritime Bank, a merger will be among the key issues to be discussed at its shareholders' meeting this weekend.

According to Dau tu, MDB has a charter capital of VND3.75 trillion (US$178.57 million). In this case, strategic foreign partner Fullerton Financial Holdings holds a stake of 20 per cent, Securities Investment Fund Manager An Phuc holds 13.34 per cent, Phuc Tien Investment holds 10 per cent, and Maritime Bank Securities represents 7.39 per cent.

MDB estimates its total assets to be around VND9.8 trillion ($466.67 million), pre-tax profits of VND222 billion ($10.57 million), and a dividend rate of 3.5 per cent for this year. Maritime Bank has VND8 trillion ($380.95 million) in equity, achieving VND107 trillion ($5.09 billion) in total assets.

FPT offers new telecom solutions

The US Vidyo Inc. and FPT Telecom of the FPT giant software are offering Vidyo services and solutions aimed at mass deployment, including in Vietnamese businesses and government agencies.

Pham Duy Phuc, the CEO of FPT Telecom International noted that using Vidyo's solution, FPT Telecom customers can reduce business travel, save on transportation costs, and enhance productivity in the workplace.

Ofer Shapiro, the co-founder and CEO of Vidyo, emphasised that in order to meet the growing market demands, it is critical for businesses and government agencies to choose affordable desktop and mobile video conferencing solutions that are software-based and are scalable for mass deployment. Vidyo's solutions offered by FPT Telecom International can immediately be availed by the public.

Experts suggest ministries employ external IT experts

Many experts have stressed that ministries and local government offices need to hire IT service providers to manage their computer systems, rather than attempting to build and maintain their own – a practice that is currently widespread.

They made the call at a meeting chaired by Deputy Prime Minister Vu Duc Dam, who is also Vice Chairman of the recently-established National Committee on IT Application, in Ha Noi on Tuesday.

Chairman of the FPT Group Truong Gia Binh said employing external IT experts is a growing trend among top businesses around the world. He claimed that if encouraged in Viet Nam, it will forge sweeping reform across State bodies.

Participants hailed the establishment of the committee led by the Prime Minister, which they said would create breakthroughs to turn Viet Nam into an IT powerhouse.

Others said that it is advisable to address constraints in putting IT projects in place. They recommended subtracting part of earnings from public services to pay for IT services.

Global supply rise to hit VN cashew exports

Viet Nam is expected to face difficulties in exporting cashew products since global supply has increased, a seminar in HCM City heard last Saturday.

"Global output is forecast to increase by 10-15 per cent this year to around three million tonnes of raw nut thanks to favourable weather conditions," Nguyen Minh Hoa, director of BIMICO, a processor based in Tay Ninh Province, said.

In Viet Nam it would increase by 15-20 per cent to 500,000-550,000 tonnes, he told the seminar organised by the Viet Nam Cashew Association (Vinacas) and the Agricultural Economic Reporters' Club.

According to the Ministry of Industry and Trade, exporters shipped 51,000 tonnes of processed cashew for US$319 million in the first quarter, a year-on-year increase of 19.1 per cent in volume and 21.6 per cent in value.

But exports would begin to slow down until June, Hoa said.

The US and EU, major markets both, have not imported much this year and so for at least two more months, they would have high demand, he said.

Ta Quang Nguyen, director of Hoang Son 1 Co, Ltd in Binh Phuoc Province, said in the first quarter China had high demand for Vietnamese cashew, but this is likely to dry up this quarter due to a depreciation of the Chinese yuan, higher transportation costs, and other reasons.

The cashew harvest season has ended in the south-eastern region, and the association urged its members to buy out the raw nuts from farmers by the end of this month.

As for import of raw cashew for processing for export, Nguyen Duc Thanh, Vinacas chairman, said firms should carefully consider prices and timing to avoid risks since processed-cashew prices are lower than last year.

The association unveiled a Viet Nam cashew value programme that targets raising the value of exports, promoting consumption both in the domestic and foreign markets, and build brands for the country's cashew products.

For the programme, to be implemented from this year through 2020, the association will co-operate with the HCM City Nutrition Centre to research and assess the nutritional benefits of cashew, Dang Hoang Giang, Vinacas deputy chairman, said.

It will collaborate with the Global Cashew Council and its nutritional research programme to promote the nutritional aspects of Vietnamese cashew globally.

The VND20 billion ($947,000) programme will build national cashew brands, register trademark to protect Vietnamese cashew products in key markets like the US, China, and EU, and develop new products suitable for local tastes, Giang said.

Despite being the world's largest cashew exporter and having quality products, Viet Nam is unable to get higher export prices than for lower-quality products due to lack of marketing and brands, he said.

The programme is expected to improve the situation and enable stable development of the local industry, he added.

Domestic retailers go in search of rural prospects

Rural areas are a promising market for domestic retailers as they face intense competition from foreign businesses, especially given the full opening of the retail market from next year.

Mai Thi Tuyet Hoa, director of Niesel Viet Nam's Research Department, said at a conference on the country's retail sector held in Ha Noi last Friday.

Hoa said that several domestic retail companies wanted to expand their market share in rural areas. The expansion to rural market was considered as one of the best solutions, although urban areas were the main focus of their development strategy.

"I think the impact of retailers in rural markets will be larger than in urban markets. Several big retailers, for example, Unilever P&G, as well as small firms have asked us to provide information about the characteristics of rural areas and the strategies that should be employed in these markets," Hoa said.

According to a survey conducted by Nieisel, customers in rural areas were strongly affected by advertisements and introductions from retailers. In addition, 90 per cent of the retailers in the area tended to introduce products and advice buyers.

The survey also revealed that with 477,000 big and small shops in the country's rural areas, if on an average 64 customers visited a shop in a day, there will be about 2.75 million buyers who will buy products after retailers' introduced them.

"The data surprised many retailers and led them to rethink their development strategies in the rural market," she added.

Dinh Thi My Loan, chairwoman of the Viet Nam Retailers Association (VRA), said these areas were promising markets because of the young population, integration trends and a modern retail system that was in its infancy.

"However, domestic retailers should not only expand their markets, but also ensure quality and gain customers' trust to compete with foreign firms," Loan said.

She added that customers' trust had gone down because of problems relating to products' quality.

The problems were unavoidable because of the sheer number of items in the market. However, it was important for the retailers to learn from the problems and make efforts to gain the trust of customers, she added.

Under the World Trade Organisation's commitment, Viet Nam will fully open its retail market to foreign retailers by the beginning of next year.

Experts said foreign retailers with their financial might, trademarks and market experience will prevail in the market.

Several big retailers from Japan, the US, South Korea and Singapore are slated to start operations in the country.

In addition, the country already has two big foreign retailers, Big C and Metro Cash&Carry. Big C had expanded its chain. It now has 24 supermarkets nationwide.

It was forecast that the modern retail channel will account for 45 per cent of the market in Viet Nam by 2020.

The country's growth rate in the retail market was 23 per cent, indicating its large potential.

Agriculture now main business for HAGL

Five years after beginning to invest in agriculture, Hoang Anh Gia Lai Joint Stock Company last Friday said the sector is now its major source of revenue and profit.

At its annual shareholders' meeting in HCM City, it said the sector accounted for 39 per cent of turnover and 59 per cent of earnings last year.

The company's profit was VND999 billion (US$47.5 million) on revenues of nearly VND2.8 trillion ($118 million).

Profits from rubber and sugarcane were VND165 billion and VND537 billion ($25.6 million) on revenues of VND241 billion and VND838 billion.

Real estate, which used to be its mainstay, contributed to only 3.2 per cent of its profit; others such as hydroelectricity, services, construction, and mining accounted for 0.9-20 per cent.

HAGL's turnover last year was almost 25 per cent below the target, and its chairman Doan Nguyen Duc, rated the second richest man on the Vietnamese stock exchange, attributed it to the company's restructuring.

He said it had sold six hydroelectricity plants in Viet Nam, sold stakes in Hoang Anh Gia Lai Timber Corporation, and pulled out of some real estate projects.

At the meeting, Nguyen Van Su, a director, created a stir by promising to resign if the company did not achieve a growth of 50 per cent in after-tax profit this year.

Duc said the company plans to raise cows and grow corn, rubber, oil palm, and sugarcane in Laos and Cambodia.

Duc backed Su, saying he too was confident because crops like corn, oil palm, and sugarcane in Laos and Cambodia would soon be harvested and yield large profits thanks to the use of advanced technologies.

Agriculture firm offers farmers shareholder status

Truong Van Bon, a farmer in An Giang Province who bought 1,500 shares of the An Giang Plant Protection Joint Stock Company (AGPPS), cannot believe that a farmer like him is an owner of a large company.

He spent many nights thinking about it before deciding to invest VND45 million (US$2,130) to buy "a paper," as he called the preference shares, because he did not know anything about stocks.

The unlisted company, which pioneered the large-scale rice production model in the Cuu Long (Mekong) Delta by linking up many farmers' small holdings, sold its shares to farmers who are members at VND30,000, or half the market price.

Bon said: "However, I trust in AGPPS since its linking model in rice production has brought results to farmers. Therefore farmers desired to have a long-term attachment with the company."

Le Van Nhut, another rice farmer in An Giang, said the company's production model promises sustainable development.

It has solved for farmers the problems of what kind of rice variety to plant and where to sell, enabling them to feel more secure, he said.

For instance, rice prices dropped in many places after the recent winter-spring crop harvest, but farmers participating in the company's programme still enjoyed a profit of at least VND30-35 million ($1,420-$1,657) per hectare, he said.

"Therefore, when AGPPS sold preferential shares to farmers, my family bravely spent VND300 million ($12,200) to buy 10,000 shares," he said.

Bon and Nhut are among thousands of farmers in the delta who had for the first time an opportunity to become shareholders of the country's leading agricultural company.

AGPPS said this time it plans to sell 1.8 million shares to 1,724 farmers in the delta again at VND30,000.

For several years now it has been providing technology and inputs to farmers and buying their produce.

Huynh Van Thon, the company's chairman and general director, told Sai Gon Giai Phong (Liberated Sai Gon) newspaper: "From now on, farmers have the right to determine the price of their produce, a thing that has never happened before."

Dr Vo Tong Xuan, an agricultural expert, hailed the company's programme, saying that after harvests farmers would now sell their paddy to the company and not intermediaries, and would no longer face price pressures.

Vo Van Dung, secretary of the Bac Lieu Province Party Committee, said AGPPS's rice production model has seen "high acceptance in many quarters."

It is an advanced model, resolving difficulties faced by farmers and the agricultural sector and ushering in modern rice production, he said.

Experts said if more rice production models like this are developed, strict oversight is possible, leading to improved rice yields and quality and lower production costs. More rice of the same varieties can be grown, making it easy for the industry to build brands and increase the value of Vietnamese rice.

New ASEAN community offers export opportunities

The ASEAN Economic Community (AEC) would bring challenges, as well as improved export opportunities for Viet Nam when the AEC is formed in 2015, according to experts.

The AEC marks the commitment of ASEAN leaders to building and promoting a single market and production base, a highly competitive economic region tempered with equitable development, and a region fully integrated into the global economy.

ASEAN includes the Association of South East Asian Nations consisting of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Viet Nam.

Experts said the AEC would also create greater opportunities for exporting goods and services to the ASEAN market, though local enterprises have faced many difficulties in production and business.

Deputy Minister of Industry and Trade (MIT) Do Thang Hai said the trade turnover between Viet Nam and ASEAN has quadrupled over the past decade, climbing to nearly US$40 billion in 2013 from $9 billion in 2003. Last year, Viet Nam took in $18.47 billion from its exports to the bloc, the country's third largest importer only after the US and the EU, which was an increase of 4.4 per cent from the previous year, added Hai.

Meanwhile, export turnover was estimated at $4.7 billion in the first quarter of this year, a year-on-year increase of 6.4 per cent. However, the figure has tended to remain steady, and even slowed on occasion, as domestic enterprises have not yet taken full advantage of the close geographical distance and incentives offered by the ASEAN Trade in Goods Agreement (ATIGA).

Hai said ASEAN is one of Viet Nam's leading trade partners, accounting for 15 per cent of the country's total trade. The regional grouping made up 22.4 per cent of total foreign direct investment (FDI) capital in 2013 with Singapore, Malaysia and Thailand being key investors.

AEC and free trade agreements (FTAs) have helped promote Viet Nam's exports to ASEAN, Hai stressed.

Thanh also forecast that exports to these markets wouldcontinue to grow steadily as more than 99 per cent of tax rates of six ASEAN countries – Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand – will be slashed to zero in 2015 under the ATIGA signed in Thailand in 2009.

This would provide plenty of opportunity for Viet Nam to balance its trade, Thanh added.

Hai said Viet Nam would have a significant opportunity for major export products, such as textile, garments, rice, seafood and electronic components.

When the AEC is formed, Viet Nam could sell goods to ASEAN market in ways that are similar to selling in home markets, because of simplified trade procedures and new procedures for certifying the origins of products.

However, Chu Duc Khai, general secretary of the Viet Nam Steel Association, said most local steel enterprises have had a lack of information about conducting business in the ASEAN market, the AEC and the benefits, as well as challenges, of doing business in the regional market.

They have not had the chance to study the ASEAN market, and steel companies have only exported small amounts to ASEAN countries, including the Philippines, Cambodia and Indonesia, with a total volume of 1.7 million tonnes and a value of $1.4 billion, Khai said.

Meanwhile, Tran Thanh Hai, Deputy head of the Import-Export Department under the Ministry of Industry and Trade (MoIT), was concerned because 80 per cent of local enterprises that were surveyed about the AEC have little information about interests and challenges available for them in the ASEAN market, reported Thoi bao Kinh doanh newspaper.

This lack of knowledge would also be a great challenge for local production and business enterprises when the AEC is formed in 2015, Hai said.

Additionally, local products would face competition with products made in other ASEAN countries and China.

Moreover, Vietnamese export products would compete with other countries in the ASEAN market to export raw products, because the country had mainly exported raw products and components, including farming, seafood and mineral products, as well as electric and electronic components, said Pham Thi Hong Thanh, deputy head of Asia Pacific Department under the MoIT.

Thanh pointed out challenges for Vietnamese products in the context of fierce competition, especially when barriers to protect domestic products no longer exist.

She suggested domestic businesses should accelerate exports of key products to ASEAN in the short term, such as mobile phone handsets and components, computers, electronics and components, the means of transport, tools, machinery, equipment, and steel and rice. They should also devise long-term business strategies to take full advantage of incentives post-2015.

Tran Thanh Hai, Deputy Director of the MoIT Import-Export Department, said local firms needed to raise the competitiveness of their exports through quality improvement, especially by following regulations related to originating certification (OC) of products, if they want to fully utilise the opportunities the AEC will provide. He also proposed that domestic businesses should set up their development strategies to enlarge the production scale to meet larger orders in the near future. Meanwhile, the Government had corrected policies to become more suitable with the process of integrating into the AEC.

Bui Huy Son, head of the Trade Promotion Agency, said to support local enterprises in entering further into the ASEAN market, the agency had conducted market studies and compiled market information, as well as sponsored seminars and training courses to improve exports and the competitive abilities of businesses, and organised exhibitions and trade fairs to create business bridges for local firms with ASEAN partners.

So far this year, the agency had submitted to the MoIT to receive approval for 183 projects under the national trade promotion programme, including projects on supporting local firms in trade promotion activities in ASEAN countries, Son said.They also needed to specify the contents of their strategies and measures to further boost exports to the ASEAN market, participants suggested.

Japan Desk launched to help investors in Ha Noi

The Investment Promotion Centre under Ha Noi's Department of Planning and Investment and Forval Vietnam jointly launched the Japan Desk last week to assist Japanese investors in the city.

The desk will focus on eight main activities, such as providing information on the investment environment in Ha Noi, introducing partners for investment and solving the difficulties faced by Japanese firms in the city.

Talking with Dien Dan Doanh Nghiep (Enterprise Forum) newspaper, Masahiro Ariga, chairman of Forval Vietnam, said that small and medium sized enterprises in Japan are tending to make investments abroad, including Viet Nam.

"Only Vietnamese agencies such as the Ha Noi Department of Planning and Investment can provide useful information on Viet Nam and the contact points for Japanese firms.

I think this is very necessary for the investors in Viet Nam. Therefore, I do not think that the Japan Desk has come into operation late. I think it is essential to assist Japanese enterprises for a long time," he said.

Japan is the biggest of 101 countries and territories that have invested in Viet Nam as of last month with cumulative investment of US$35.4 billion in more than 2,237 projects, according to the Foreign Investment Agency.

The average capital of Japanese projects is also the highest at $15.8 million.

While Japanese investors have a presence in most sectors, manufacturing and processing account for a lion's share of their investments at nearly $30 billion. It is followed by property at $1.4 billion and construction at $1.05 billion.

Thanh Hoa Province topped investment destinations with total capital of $9.67 billion, followed by Binh Duong with $4.18 billion, and Ha Noi with $3.86 billion.

March jump in car sales mark 12 months' growth

The Vietnamese automobile market saw impressive sales of cars with 10 seats and below, trucks and commercial vehicles in March.

According to the Viet Nam Automobile Manufacturers Association (VAMA), more than 11,600 cars were sold last month, an increase of 59 per cent over February. These comprised 7,179 cars with ten seats and below, and 4,477 trucks and commercial vehicles.

The March sales grew 39 per cent year over year, and it was also the 12th consecutive month of sales being higher year over year.

The volume of sales of locally assembled cars reached 8,275 units, rising by 58 per cent over the previous month. Meanwhile, nearly 3,400 imported completely built units (CBU) have been sold, marking a growth of 62 per cent.

The increase in sales figures has led VAMA to adjust its estimation of car sales to 125,000 units this year, 5,000 higher than the previous estimate and 13 per cent higher than 2013.

VAMA also reported that its members have sold 24,168 units in the first quarter of this year, an increase of 29 per cent year over year. These comprised 8,465 passenger cars, 8,811 trucks and commercial vehicles and 2,694 multi-purpose vehicles.

The Custom Office reported on April 17 that Viet Nam imported nearly 4,400 CBU cars in March, a rise of 47.4 per cent compared with February. With this the CBU import figure for the first quarter this year rose to 10,420 units, 49.2 per cent higher year over year. These comprised 5,290 imported cars with nine seats and below, 4,410 trucks and 719 other vehicles.

South Korea retained its lead in exporting CBUs to Viet Nam with nearly 3,700 cars, an increase of 5.5 per cent. It's followed by Thailand, India and China with nearly 1,750 cars, more than 1,700 cars and 1,260 units, respectively, all higher than the previous months.

GE, Saudi Aramco hold global challenge

GE ecomagination and Aramco Entrepreneurship have launched an open global technology challenge to accelerate the development of solutions focused on improving the energy efficiency of seawater desalination.

GE is seeking entries from Viet Nam for the US$200,000 challenge to accelerate the development of innovative solutions to increase energy efficiency of seawater desalination.

The goal of this challenge is to identify novel ways to lower these costs around the world, either through technology advances, process improvements, or both.

Can Tho City backs e-commerce

Can Tho City assisted local businesses in boosting e-commerce via Internet, websites, and online transactions, stated Duong Nghia Hiep, the deputy director of Can Tho Department of Industry Trade.

The city has also encouraged local businesses to train staff to specialise in e-commerce, improve websites, and enhance the quality of online customer services.

By 2015, Can Tho will make an effort to have 80 per cent of 10,800 businesses to start using email in trading activities, 35 per cent of businesses using websites to promote products, 10 per cent of businesses performing online transactions, and 20 per cent of the enterprises applying software in business performance and management.

Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR