Foreign businesses seek opportunities in Vietnam

A number of foreign business organisations and associations took part in a trade and investment promotion conference held in Ho Chi Minh City on March. 29 to seek partners and opportunities in Vietnam.

The businesses come from such countries and territories as Thailand , Canada , Germany , Indonesia , Malaysia , Singapore and Hong Kong ( China ).

The annual event this year focused on the city’s economic restructuring in 2012, the development of industrial clusters, mechanism and policies to attract investors in the high-tech industry, monetary policy and solutions to support businesses.

Vietnam ’s consumption market in 2012 is forecast to develop faster than that of regional countries such as Thailand , the Philippines and Malaysia and thus remaining attractive to foreign investors, the seminar was heard.

Experts said the country’s retail market is forecast to keep its high growth rate of about 23 percent during the 2012-2014 period with one of the best profitability in the world.

Domestic businesses took the occasion to display their products.

The annual event was coorganised by the Ho Chi Minh City Businesses’ Association, the Vietnam Union of Friendship Organisations and the HCM City Department of Planning and Investment.

Air route between Laos and Danang opens

The first Pakse-Savannakhet-Danang flight landed at Danang International Airport on March 29 with 170 passengers, including some Lao senior officials.

This is one of two maiden flights before Lao Airlines conducts regular ones every Tuesday, Thursday and Saturday by ATR72, each with 65 passengers on board.

The opening of the new air route marks the 50th anniversary of the establishment of diplomatic ties between Vietnam and Laos, and the 35th anniversary of the signing of the Treaty on Friendship and Co-operation.

First Lao passengers will have the chance to play golf and visit heritage sites in the central region before making a fact-finding tour of Ba Na, Son Tra Peninsula, Ngu Hanh Son (Five Marble Mountains) and Cham Sculpture Museum.

Bank learn to look after number one

Banks are scaling up efforts to address credit quality and drive down bad debt rates.

Firms’ dismal production and business results in 2012, which could undermine their debt repayment capacity, is banks’ biggest concern.

An ACB representative said the bank had exerted energy into analysing the root of the problem and rendered warnings about bad debt threats.

This year, ACB will focus on promoting lending in retail and medium-sized enterprises and individual customer groups. Besides, the bank will foster credit sources’ risk management aiming at minimising bad debt rates. Particularly, it will strive to keep the debt rate of group 3 to 5 loans at less than 1 per cent and that group 2 at 2 per cent of total outstanding loans, according to ACB.

In 2011, Vietcombank’s bad debt rate was kept at 2.03 per cent, lower than 2.3 per cent projected which was approved by the annual shareholder meeting.

This year, Vietcombank set to retain bad debts of less than 2.8 per cent and step up efforts to boost debt recovering efficiency.

“In 2012, our bank will tightly control medium and long-term credit and growth in foreign currency reserve as well as keep close eyes on central bank’s management policies and the system’s liquidity to be able to draw suitable policies aimed at restricting bad debts,” said Vietcombank general director Nguyen Phuoc Thanh.

As with DongA Bank, the bank saw VND742 billion ($35.3 million) in bad debts (from group 3 to group 5 loans) in 2011, tantamount to 1.69 per cent of its total outstanding loan, but it was still higher than 1.4 per cent in 2010. The bank also contributed VND296 billion ($14.1 million) for loan loss provision, said general director Tran Phuong Binh.

This year, Dong A Bank will strive to keep bad debts of 1.5 per cent of total outstanding loans and set aside 2-3 per cent of its assigned 15 per cent credit growth in 2012 to make provisions.

In 2012, the State Bank continues its tightening credit policies to tame inflation and ensure macroeconomic stability. Ceiling credit growth targets were set at 17, 15, 8 and zero per cent depending on bank health. Lending to non-priority areas was kept at less than 16 per cent of total outstanding loans. However, according to HSBC Vietnam, banks could hardly surpass those set credit growth targets on the back of current very low market demands.

Funds find opportunities in crisis

Despite the current economic downturn, venture funds say they will continue to invest in profitable enterprises and have no intention of divesting capital from existing projects.

Nguyen Manh Dung, chief representative of Japan’s CyberAgent Ventures Fund in Vietnam, said this year would be a good time for hedge funds that specialize in technology and Internet to inject capital into Vietnam.

“While the economy is facing many challenges and enterprises, including those working in IT and Internet, are struggling to mobilize capital, venture funds will enjoy advantages in speeding up investment in the sector,” Dung said.

Dung said venture funds usually had long-term investment strategy so they weren’t much interested in daily events influencing the economy.

David Do, managing director of Vietnam Investments Group (VIG), a fund that pours capital into different business fields, also sees a big investment opportunity in the local IT industry.

“In developed countries in Europe or America, the industry makes up around 7 percent of the gross domestic product while it is 2 percent in Vietnam. However, VIG will not invest in new businesses. We choose profitable firms that have a certain rank on the market and are thirsty for capital to speed up development,” Do said.

Tran Tuan Tai, an expert from FPT Capital, said the technology investment market had much potential in the coming time, especially because there were few opportunities in the real estate, financial and stock channels.

Internet is also a good sector for venture funds to diversify their portfolios and FPT Capital is interested in this sector, Tai said.

Dung of CyberAgent Ventures said his fund would boost investment in Internet and mobile phone service providers.

“The fund will not limit the number of enterprises to be invested in and will be willing to invest in many enterprises as long as they meet all standards,” he said.

CyberAgent’s criteria include an enterprise’s market share of ideas for the future, target customers and value it will offer, distinction and strong points of services compared to others on the market, vision and determination for realizing ideas of company leaders.

Early this year, CyberAgent poured capital into three companies, NCT (NhacCuaTui.com), ColorBox software and online bookstore Tiki.vn, bringing the total number of enterprises it has invested in so far to 10.

Meanwhile, VIG has plans to seek 20 to 30 projects from now to 2013 with disbursement estimated at around US$50 million.

VIG will also invest VND600-800 billion in three to four companies. The Internet and IT sector will account for 15 percent -20 percent of the total capital.

“VIG will prioritize enterprises specializing in one single sector or those with strong investment in manpower development,” David Do said.

Do said Vietnamese enterprises in the technology sector had to compete toughly with foreign firms due to changeable knowledge so manpower was thus the most valuable asset of each company.

Electronic commerce services also draw much attention of investment funds given rapid Internet development and an increasing number of Internet users in Vietnam, he said.

Tai of FPT Capital said as his fund operated on the private equity sector, it had yet to invest in newly-established enterprises.

FPT Capital eyes developed firms that need more capital to expand business but it expects new technology firms to make a breakthrough and may consider investing in start-ups with good business ideas, growth model and revenue.

FPT Capital is managing a large sum of capital that can ensure quick disbursement. A financial statement released in 2010 shows that the fund would be managing around VND5 trillion now.

“To attract venture funds, enterprises should prove they have good business model, excellent operation capability, devoted founding members and determination to overcome difficulties in early days,” Tai said.

Huynh Luu Thanh Giang from the HCMC Science and Technology Development Fund said his fund specialized in supporting enterprises to commercialize results of study works and technology transfer.

The fund will provide loans of up to 70 percent of the total investment of a project but not exceeding VND10 billion.

There is no classification among new and old companies, she said, adding that interest rates were just 50 percent of bank rates and the maximum term is four years.

The fund currently offers rates of under 8 percent per annum.

To be qualified for loans, enterprises should complete their technological products and be in the commercialization process.

They must also have product consumption contracts to ensure feasibility of the project and credit solvency because investment in science and technology is risky.

Established in 2008, the fund has provided loans to just seven enterprises so far.

Explaining the modest number, Giang said enterprises had to provide documents and information such as annual financial statements besides conditions mentioned above.

They must also present their products so that the fund can evaluate their technology, economic efficiency and capital recovery capability.

“Many enterprises need capital but fail to meet the conditions while some firms are afraid to make public their business information,” Giang said.

Prices expected to rise despite reports of lower inflation

While the consumer price index (CPI) is not expected to rise much over the first quarter, both consumers and businesses are still facing difficulties in the price of overhead, particularly transport.
 
Transportation fees are forecast to increase as long as the price of petrol continues to go up.
 
Many have attributed the slight rise in the CPI to lower demand for food products after Tet. However, this does not mean that the prices of other commodities are also falling.

According to a report from the General Statistics Office (GSO), transportation fees have increased by 5.94% from the final quarter of 2011 and, 18.71% compared to the same period last year.

The transportation industry has seen the largest increase in prices, with an increase of about 33% from the year before. The price for transport of goods has also seen a significant rise.

Air transport fees have gone up nearly 20%, while shipping saw a 2.5%; railway transport saw an increase of 6%.

Transportation fees are forecast to increase as long as the price of petrol continues to go up.

Statistics from the GSO’s report showed that prices of operational costs for businesses, especially for raw materials has increased by more than 2% over the last quarter, and almost 19% from the same quarter of 2011.

The manufacturing sector has taken an across the board hit, including businesses involved in textiles, electronics and high-tech components.

At the same time, these companies are facing a tougher market as demand has been falling.

By March 1st, the inventory lever of this industry has been up by 34.9% compared to the same period last year.

Some other industries also seeing high inventory lever include vegetable and fruit processing (up by 87.2%), steel, cement, fertilizer (all up by over 50%).

Although local banks have lowered their loan interest but local enterprises are have still found difficulties in accessing credit.

Vietnam largest cement company under investigation for embezzlement

An investigation has been launched into the financial workings of the state-owned firm Vietnam Cement Industry Corp. (Vicem), after they reported debts totaling thousands of billions of VND.  

Nguyen Viet Thach, Deputy Chief of Anti-Corruption Investigation Department, was appointed to lead the inspection team for the ten-day investigation, which started on March 26.

According to Thach, Vicem subsidiaries, such as But Son and Bim Som Cement Company are also receiving scrutiny. The inspection team will carry out audits of all companies involved, as well as look at their business practices, recruitment of staff and executive appointments. Any corruption exposed before will also be dealt with.

Though Vicem is one of the biggest state-owned cement companies in Vietnam, its profit in first nine months of 2011 was only around VND540 billion (USD25 million). Returns on their various investments accounted for just under 2%, while interest on equity added almost 4.5%.

The company is currently in debt for VND4.7 trillion (USD225 million).

Vicem has already stirred up public outrage after it reported losses totaling VND200 billion (USD9.6 million) in the first three quarters of 2011, despite a reported income of VND20 trillion (USD957 million).

Japan helps Vietnam control expressways

Japan will provide 527 million JPY (6.3 million USD) for Vietnam to implement a project to develop a traffic control system for expressways in Hanoi.

An exchange note to this effect was signed in Hanoi on Mar 29 between the Vietnamese Ministry of Transport, the Japanese Embassy in Vietnam and the Japan International Cooperation Agency (JICA) in Vietnam .

Apart from building highways for socio-economic development in recent years, the Ministry of Transport and JICA have cooperated in applying the intelligent transport system (ITS) in Vietnam .

The project includes installing and putting the system into operation on Hanoi Belt Highway 3 from Highway 5 to Phap Van and Cau Gie.

The project is scheduled to be carried out from the second quarter of 2012 to the fourth quarter of 2013.

Prudential fund says last year’s losses hefty

Prudential Balanced Fund (PRUBF1) suffered a loss of 8.8% of its net asset value due to the gloomy stock market in 2011, said chairman Dinh Ba Thanh at the fund’s annual general meeting held on Wednesday in HCMC.

According to Thanh, this is still a positive result when compared to a dip of about 50% of the HNX-Index and 28% of the VN-Index. The fact that the performance of the fund is not so bad is due to the coupon of the three-year term bond in the portfolio investment.

In 2011, PRUBF1 enjoyed an annual profit of 11.7% from government bonds while its investment ratios in shares, bonds and cash were recorded at 47.1%, 42.9% and 10% respectively at the end of last year.

Speaking to the Daily on the sidelines of the meeting, Ngo The Trieu, director of fund’s bonds and public stocks investment department, said restructuring the investment portfolio late last year brought his company additional 8% of profits from bonds within this month. As of now, he noted, the investment ratios have been restructured in line with changes of the stock market.

Trieu reported the investment capital for stocks accounts for 60% of the total portfolio while the bonds amount has tumbled. Prudential fund in the coming time will consider increasing investment in stocks but this does not mean that opportunities to acquire bonds are over, Trieu asserted.

Thanks to the recovery of the stock market, the market value of PRUBF1 investment portfolios as of February 2 rose by VND37.7 billion from VND386.1 in late 2011.

Regarding the question on how investors will get back their money when the fund is closed, Trieu stated the fund will be closed on October 5 next year instead of becoming an open fund due to complicated legal procedures. PRUBF1 will use revenues from selling assets to return money to investors on schedule.

PRUBF1, managed by Eastspring Investment with total chartered capital of VND500 billion, has operated since 2006.

With the loss of over VND38.3 billion in 2011, the fund will not pay dividends to investors this year.
 
VN’s established online portal engages MatchMove

Fast-rising technology company, MatchMove, has just taken another step forward in cementing itself as one of Southeast Asia’s top social networking platforms.

MatchMove on 29th March announced its launch of games site for VietnamPlus at http://vietnamplus.matchmove.com/, the news website under Vietnam’s biggest and most respected media agency – Vietnam News Agency.

MatchMove’s cutting-edge technology and the all new MMAD plug-and-play social features will drive much more user engagement on the VietnamPlus website, keeping them as the far-and-away leader in this space.

Nate Wang, Vice-President at MatchMove, said “We are flattered that someone as established and experienced as VietnamPlus picked us. We are confident that our technology can help VietnamPlus achieve what they need and we will be looking forward to a long and successful working relationship with them.”

MatchMove Games is a Singapore-based games provider serving computer game enthusiasts across the world. MatchMove Games provides gamers with an entertaining and unique venue where they can purchase or play games, make friends, virtual enemies and even take part in events with the chance to win prizes and recognition for their skills.

Their advanced game platform offers games from numerous genres, including Casual Games, Social Games, MMOs, and Music games. MatchMove Games is the exclusive game service provider for leading global and regional brands

Binh Dinh bans titanium transport to other provinces

Binh Dinh Province has banned the transport of crude titanium to other provinces in an effort to curb the illegal titanium export to China and reduce losses for Vietnam’s natural resources.

Ho Quoc Dung, vice chairman of the province, told the Daily on Wednesday that many local people have taken advantage of titanium transport out of the province over the past time to ship the ore illegally to China. Such shipments are often transported by road to Quang Ngai Province or by sea to Haiphong City first.

“In fact, titanium after being carried out of the province is exported illegally to China, and thus the province has imposed the ban to control the export of crude titanium which causes losses in natural resources tax and resources,” Dung said.

According to Nguyen Kim Phuong, director of the provincial Department of Industry and Trade, Binh Dinh Province is now having ten titanium processing plants whose exports fetch an average price of US$280 per ton.

However, a ton of crude titanium when illegally exported to China is only priced at around VND500,000, which has resulted in a lack of material for processing plants in the province.

The authorities of Binh Dinh Province have recently detected and seized hundreds of tons of titanium being carried out of the province on 15 trucks, Phuong told the Daily.

“According to our statistics, the volume of titanium illegally transported out of the province and exported to China amounts to hundreds of thousands of tons every year,” Phuong said.

Besides, Binh Dinh Province only allows individuals and firms to trade in crude titanium with processing plants in the province and has asked Quy Nhon, Thi Nai ports and Central New Port not to handle procedures to transport crude titanium.
 
Battery-powered tourist cars roll through Da Nang streets

The central coastal city launched the first battery-powered car service in a ceremony yesterday.

The first 15 cars, officially put in operation yesterday, will transport tourists during the International Fireworks Competition and summer holidays.

The first route will run a long beach from Pham Van Dong Street to But Beach Resort and Hoang Sa Street, while the second route will wind through Truong Sa Street and Ngu Hanh Son (Marble Mountains) destination in Son Tra peninsula.

It's the first environmentally friendly project that the city has launched so far. Da Nang is set to be a "green" city by 2020.

Vietnam invests heavily in Cambodia

Since mid-2009, the number of Vietnam-invested projects in Cambodia has doubled with a total amount of capital rising five times compared to the period before 2009.

The information was released at a meeting in Hanoi on March 29 between the Governor of the State Bank of Vietnam, (SBV) Nguyen Van Binh and Vietnamese investors in Cambodia.

In his speech, Binh affirmed the Vietnamese Government always creates favourable conditions for businesses to invest in Cambodia. The SBV, for its part, will allow more commercial banks to open their branches in Cambodia to provide payment and capital support for Vietnamese investors.

According to a report from the Association of Vietnamese Investors in Cambodia, by the end of 2011, Vietnam had invested in 98 projects in Cambodia with a total capitalization of US$2.4 billion.

Last year, Vietnamese businesses poured more capital into such areas as banking, securities, energy, tourism, hotel and transportation apart from telecommunications and aviation. Currently, Vietnam has five large banks operating in Cambodia with total registered capital of more than US$116 million.

Vietnam now ranks fourth among foreign investors in Cambodia after China, the Republic of Korea and Australia.

The Government of Vietnam has recently approved a US$800 million project to build Ha Se-san 2 hydroelectric power plant in Cambodia and is prepared to inaugurate the first rice processing plant in Cambodia with a design capacity of over 100,000 tonnes per year. A fertilizer plant funded by the Investment and Development Joint Stock Company of Cambodia (IDCC) will be inaugurated and put into operation this year.

Development bank told to restructure operations

Viet Nam Development Bank (VDB) has been asked to submit its restructuring plan and development strategy to 2020 to the Government for approval.

Under Instruction 118/TB-VPCP issued by the Government on Wednesday, Deputy Prime Minister Vu Van Ninh asked the State Bank of Viet Nam (SBV), in co-operation with the Ministry of Finance, to help the VDB classify its debts, and make provisions for bad debts and forex operations under existing regulations.

Specifically, the bank was asked to review its existing policies regarding State investment loans and export financing. It must also review its operational model and look into similar bank models in foreign countries.

Good experiences from similar bank models in foreign countries that meet Vietnamese standards would be applied to the VDB's restructuring plan and its development strategy during the next period, the instruction stated.

Deputy Prime Minister Ninh said the bank needed to clarify its role, position, functions and tasks in the national banking and financial system. VDB was still expected to operate as a bank as assigned by the Government to lend in certain fields with specific tasks.

Ninh instructed the ministries of Finance, Planning and Investment and the State Bank to review part of Government Decree 75/2011/ND-CP on State investment credit and export credit which has been blamed for several obstacles affecting VDB's lending operations.

The list of priority sectors to receive access to State loans for implementing key projects and a support mechanism for the State Major Programme were expected to be updated soon to help the bank lend more effectively.

VDB is the successor to the Development Assistance Fund and was established through a Prime Minister decision in May 2006.

VDB is a non-profit, policy lending institution. Together with the Viet Nam Bank for Social Policy, VDB is required to undertake the State policies regarding loans reserved for investment, development and export financing.

The bank has been assigned special tasks by the Government for reducing poverty through providing financing for construction of irrigation and rural transport works, traditional village infrastructure and socio-economic infrastructure in remote areas.

Customs authorities to assess imported milk price

The General Customs Department has listed import dairy products in risk management list in an effort to prevent the price from going up wildly in the coming time.  

The customs agency will collect tariffs in full if milk powder importers set a lower price than the level recorded in the database. It will also re-assess the shipment if importers report the price as much as 15% higher than the level recorded in the database.

Provincial customs departments are encouraged to gather information on import milk in a bid to address illegal practices. Importation of milk powder for children under six and milk will be a focus of inspection for customs agencies.

The decision to put dairy products into risk management list enables custom authorities to detect wrong-doing in customs declarations and charge proper tax. It will effectively prevent importers from lifting up milk price unconditionally, said Luu Manh Tuong, deputy head of department of Export-Import Tax.

The move is apparently aimed to prevent milk prices being chased up in an uncontrollable manner as seen recently on the local market. Prices of dairy products, especially of foreign brands, are in most cases much higher than the global and regional levels.

Previously, custom declaration of import dairy products has been managed by importers and the customs agencies will evaluate their dossiers later to make it easier for operations of related businesses.

It is hard for competent agencies to trace the illegal practices made by importers after a long period of time. The price of import dairy products could be inflated so that importers earn higher profits.
 
Vincom issues convertible bonds worth 185m USD

Vietnamese property developer Vincom JSC on March 27 successfully issued convertible bonds worth 185 million USD with maturity of five years and a coupon rate of 5 percent a year.

The bonds will also be listed at the Singaporean securities exchange after the issue.

Vincom said the bonds will be converted into equity 41 days after issue at a price of 112,200 VND each.

Vincom was the first business in Vietnam to issue convertible bonds ¬– in December, 2009. It raised 100 million USD from the initial issue and 99.9 percent of the bonds were converted into equity in June, 2011.

It plans to issue convertible bonds worth up to 300 million USD this year.

Printers aim to reach global standards

Good marketing and reasonable prices will help promote the development of digital printing in Viet Nam, the chairman of the Viet Nam Printing Association said at a conference held yesterday in HCM City.

At the conference organised by Fuji Xerox Co Ltd, Nguyen Van Dong said in recent years, with the extensive development of the internet, e-books and other access, the adoption of digital printing in the country would be easier.

But the problem, he noted, was how to market the utility of digital printing to consumers and businesses and increase investment in digital technology.

Digital printing is expected to develop strongly in the future, especially when orders become larger, when rapid changes are required, and strict control over quality and design are needed.

"Once customers realise the advantages it offers, including capacity to print large quantities and change data quickly, and printer prices fall, digital printing would become more popular," Dong said.

The other big hurdles are customers' habits and the low cost of offset printing.

Businesses must spend hundreds of thousands of dollars to buy a digital printer, while offset printing machines cost in the tens of thousands.

The suppliers of equipment and digital printing technology in Viet Nam should consider lowering the cost, Dong recommended.

The widespread use of digital printing is behind three to four years in Viet Nam, compared to other countries.

However, in the future, the market share of digital printing is expected to increase and catch up with the share it holds in other countries.

For comparison, he cited the example of a printing facility in Guang Dong Province in China, which has 30 digital printing machines, more than the total amount sold in Viet Nam every year.

Yoshio Hanada, general director of Japan-based Fuji Xerox Viet Nam, said the Vietnamese printing market was changing quickly, and to meet customers' requirements, the company had launched a colour-on-demand publishing system, Color 1000/800 Presses, for high-end professional use.

The company was also helping the industry learn more about trends in the printing market and develop business opportunities in the growing digital market around the world.

In Viet Nam, the growth of the printing industry was strongest between 1993 and 2005 but slowed down to 10 per cent from 2005 to 2008.

Since then, due to the economic downturn, the industry's growth rate has been 5-7 per cent.

Currently, offset printing still accounts for 80 per cent of all printing done in Viet Nam.

Fruit, vegetable exports to EU suspended from licensing

The Plant Protection Department under the Ministry of Agriculture and Rural Development has recently suspended licensing for 15 different types of fruits and vegetables for export to the EU, while the importing market has yet to announce any prohibitions.

The ban has panicked a large number of fruit and vegetable exporters, since they have inked many export contracts, and the products which are ready for shipment will now have to pile up in the warehouses.

“I was stunned to learn of the news that some of my vegetables are now banned from being exported,” said Ngoc, an overseas Vietnamese living in the Netherlands, who runs a large vegetable farm in Vietnam.

Ngoc has deployed European safety standards on her 2-hectare farm in the Mekong Delta city of Can Tho, and has planned to expand the area by five times, as well as set up two more deep freeze storage units, as her exports are favored by Dutch consumers.

All these plans have been put on hold thanks to the prohibition, said Ngoc.

“What is most harmful is that customers will switch to buying from Thailand or Malaysia if supply from my farm is obstructed,” she said worriedly.

Similarly, Tran Danh Manh, chief of the Ho Chi Minh City-based Dat Vinh Co, said the company has purchased batches of grapefruits from farmers in the Mekong Delta, but cannot ship them to the EU.

“We do not know why, and for how long, the licensing is suspended, as well as how to solve the problem,” lamented Manh.

With the company exporting a total of 10,000 tons of grapefruits to the EU on an annual basis, the suspended export will cause great damage for him, he added.

Meanwhile, Mai Xuan Thin, director of the Rong Do Co, said his company has only received the information from the Plant Protection Department.

“We do not know whether or not the EU really banned all of these Vietnamese fruits and vegetables,” said Thin.

“If there is indeed a prohibition, the department should state clearly what particular types are banned, rather banning on the whole.”

Nguyen Huu Huan, deputy head of the Plant Protection Department, said many export batches of Vietnamese fruits and vegetables to the EU have been announced as violating safety standards, and failing to pass quarantine tests, as they have been contaminated with microorganism and other diseases.

“During the two months between June 1 and July 31, 2011, 50 out of 63 exporters were detected with such violations,” he said, citing the department’s figures.

Consequently, the Directorate General for Health & Consumers under the European Commission announced that if five similar cases were detected after January 15, 2012 the EU would place a complete ban on Vietnamese fruit and vegetable exports, he added.

“Therefore, the department has announced that 15 commodities which have a high likelihood of breaching the standards will be suspended from obtaining a license to be shipped to the EU,” said Huan.

“Despite the suspension and tightened checkups, two other cases have recently been discovered, which means there are only three violations left before Vietnamese fruits and vegetables will never be able to enter the EU market.”

However, exporters said the department should not provide the ban for the entire sector.

“It is unreasonable to count the exporters with adequate sources of materials as being at the same level of those buying from dubious origins for exports,” the director of a fruit exporter said.

For his part, Huan also admitted that most of the violators are small businesses with a small amount of fruits and vegetables shipped.

Meanwhile, Diep Kinh Tan, Deputy Minister of Agriculture and Rural Development, demanded that the Plant Protection Department foster monitoring on exporters with unclear sources of materials, and provide assistance to those with safe-certificated material areas.

“The department should also clarify the particular commodities banned by the EU, rather than stating generally as ‘fruits and vegetables’,” he urged.

Tank manufacturer opens factory

RK Engineering, a wholly foreign invested company from Japan yesterday inaugurated a high-pressure resistance tank, tank top, heatproof material and equipment plant in Dinh Vu Industrial Zone in the northern city of Hai Phong.

Speaking at the inauguration ceremony, the company's general director Yuzuru Tsuchiya said they were aiming to provide high quality products to the Asian market at competitive prices.

The US$14 million project would process 300 to 480 billion tonnes of products annually to serve the petrochemical and food industries.

Most of their finished products would be exported to Japan and other Asian countries.

Construction of the plant started last July, and it should be ready to go into operation next month as scheduled.

It will create jobs for 40 people initially, and 100 employees when it is fully operational.

Nippon Kyohan is the company's main investor.

Nippon Kyohan selected the Dinh Vu IZ because of its strategic location, access to the port, reliable utilities and tax incentives.

After the development of its first phase of 164ha, the IZ is currently developing and marketing its second phase of 377ha.

A 20,000dwt wharf and new waste water treatment plant are now operational.

The IZ is proud to have Nippon Kyohan as one of six Japanese tenants. It has attracted more than 43 projects with total investment of $41.54 billion, of which Japanese investment represents approximately 45 per cent.

It is expected to appeal to many Japanese investors and other nations, with total investment of $205 million projected by the end of this year.

It has welcomed clients in the petrochemical, heavy industry and general light industry sectors, such as Nakashima, Bridgestone, Shin-etsu, Shell, Chervon, PVTEX, Vinachem, Petrolimex, Dinh Vu Steel Plant, Proconco, Toyota Tsusho and Mitani.

Incentives pave way for Chinese goods to Vietnam

Chinese goods are penetrating into Vietnam in an increasingly professional and well-prepared way thanks to substantial support from the Chinese government’s policy of developing their export markets.

“[The Chinese government] has been implementing a series of policies to support their home enterprises to ship their products to neighboring countries, among them Vietnam,” said Nguyen Lam Viet, chairman of Vinamit dried fruit manufacturer, who has just returned from a market study trip in China.

“The incentives include tax refunds and preferential lending interest rates to encourage local businesses to increase their exports as much as possible.”

Even Vietnamese companies opening representative offices in China are subject to the Chinese government’s incentives, added Vien.

“If such companies buy Chinese raw materials and other goods for export, they can enjoy a zero interest lending rate for 30 percent of the contract value,” he elaborated.

“All of the shipped batches of goods will receive a 17 percent refund of value-added taxes, and Vietnamese businesses in China can also buy locally-manufactured machinery at the best preferential prices.”

Vien said the Chinese government also encourages local businesses to set up plants and factories by granting loans for them at interest rates of only 1 – 2 percent, enabling them to produce in large quantities at the minimal expense.

“China is making use of every means to spread their products in the Vietnamese market in the shortest amount of time,” commented Vien.

“Besides agricultural products and food, our consumer goods and garments can hardly compete with their Chinese counterparts.”

Meanwhile, Lam Hai Vuong, head of the export-import department of Vifon noodle manufacturer, said the loan and tax incentives have enabled Chinese businesses to be flexible in price negotiation, and supply large orders at soft prices.

Some Chinese traders have also opened large stores, and even warehouses, in Vietnam to facilitate their goods distribution to Vietnamese partners, he added.

In a recent meeting with Vietnamese businesses To Quoc Tuan, the Vietnamese consulate general in Guangzhou, said he has received a demand from the representative of the Chinese businessmen club to set up a supermarket in Vietnam to bring products of around 15,000 Chinese producers to local consumers.

While waiting for the plan’s approval, Chinese manufacturers have joined hands with Vietnamese businesses and traders for the latter to become their distributors in Vietnam.

For his part, Tran Vu Nguyen, in charge of trade promotion in the Chinese market for the Vietnam High Quality Goods Association, said many Chinese companies with strong financial muscles are eying buying factories and manufacturing plants of local businesses in order to enter the Vietnamese market.

"[Chinese businesses] are willing to acquire failing companies to enjoy tax incentives from the loss declarations,” said the chief of a food manufacturer.

Vietcombank plans $1 bln overseas bond issue: chairman

Vietcombank, Vietnam's fourth-largest lender by assets, plans to raise $1 billion selling bonds in international markets, its chairman said.

The debt, with terms of up to 10 years, could be issued in 2012 pending shareholder approval, Nguyen Hoa Binh said in a report seen by Reuters on Thursday. The report was scheduled to be delivered to shareholders at a meeting on April 2.

Hanoi-based Vietcombank, 15 percent owned by Japan's Mizuho Corporate Bank, a unit of Mizuho Financial Group, also needs permission from the central bank to sell the debt.

Binh said proceeds will be used to supplement medium- and long-term foreign currency funds of Vietcombank, also known as the Bank for Foreign Trade of Vietnam.

Foreign currency funds account for 30 percent of the total deposits at Vietcombank and foreign currency loans account for about a third of its outstanding loans.

In January Standard & Poor's revised its outlook on the long-term rating for Vietcombank to stable from negative and affirmed the "B+/B" counterparty credit ratings. It said Vietcombank's capital and earnings would be weak.

Vietcombank shares closed down 1 percent at 28,700 dong.

Vietnam is seeking to improve its image in the international financial markets as its companies and banks turn more and more to overseas investors for funds at a time when foreign investment in the southeast Asian nation is declining.

Vietcombank may have to raise funds at higher costs after a scandal at state shipbuilder Vinashin, said Quach Manh Hao, deputy director of Thang Long Securities.

He was referring to Vietnam Shipbuilding Industry Group, which nearly went bankrupt in 2010 under almost $4.5 billion of debt after it became overextended and was hit by a slump in ship orders amid the global financial crisis.

"The (Vietcombank) plan is highly feasible, and higher costs may be offset by the country's positive economic outlook because the interest among foreign investors in Vietnam's banking sector is rising," Hao said.

Standard Chartered Bank said it will advise the Vietnam government on improving its sovereign credit rating as Vietnam seeks to attract more foreign investment.

Vietcombank's plan to raise overseas bonds follow those by other Vietnamese companies and VietinBank. Vincom Joint Stock Co, Vietnam's leading real estate developer, said it had raised $185 million via five-year dollar bonds, at an annual coupon of 5 percent, and plans to list them on the Singapore stock exchange.

VietinBank, Vietnam's largest partly private lender by assets, has begun roadshows to sell bonds in Asia, Europe and the United States, which could involve an issue of $500 million. ($1=20,800 dong)

Fuji Xerox to debut high-end color printer in Vietnam

The Japanese printer manufacturer Fuji Xerox will launch its publishing systems Color 1000/800 Presses in Vietnam within Q1/2012, according to its Vietnamese arm.

“Color 1000 Press/Color 800 Press commercial printers are the first high-end ones to employ the Emulsion Aggregation-Eco Toner, or EA-Eco Toner, renowned for its advanced image quality.”

“Additionally, the newly developed Clear Toner, an option of the Color 1000 Press, adds specialty to application design such as glossy finish and watermark printing,” said Sue Threlfo, market manager of Fuji Xerox Asia-Pacific.

“Furthermore, together with a newly developed belt roll fuser, which is capable of maintaining stable fusing temperature even during high-speed printing, the range of printable colors has been expanded, adding extra expressiveness to printouts.”

The new systems have employed newly developed full-color tandem engine and large diameter seamless intermediate transfer belt to achieve high-speed full-color output of 100 pages per minute (Color 1000 Press) or 80 pages per minute (Color 800 Press) at paper of all weights ranging from 55 to 350 grams per square meter.

“They improve overall productivity without changing print speed by the weight of paper. With a broader range of paper handling, Color 1000 Press/Color 800 Press can handle applications that conventional digital printing could not deliver.”

“It has been 14 months since the new system hit the global market, and we think it is the right time to bring them to Vietnam,” she said.

“The new systems, worth some $320,000 with discount programs applied for special customers, provide advanced image quality and productivity, as well as stability and reliability,” said Yoshio Hanada, general director of Fuji Xerox Vietnam Co.

“By leveraging digital printing, it is possible to deliver added value to applications used in a variety of communications aiming at strengthening relationship – corporate marketing andIR activities targeting stakeholders, and municipalities’ communication with local residents,” he said.

“Variable printing can customize and increase added value of sales promotion tools as well as publications, including catalogs, direct promotional mails, flyers, labels, packages, and photo books.”

“Fuji Xerox Vietnam, established in May 2010, will continue to reinforce its product lineup as the pioneer of production printing to contribute to customers’ business expansion.”

The establishment of Fuji Xerox Vietnam Co Ltd not only reinforces the activities of the dealers, but also enables direct sales and maintenance services operations in Vietnam.

Regarding Fuji Xerox market share in Vietnam, Yoshio said he did not have the most updated data, but added that the company stood in the 3rd place worldwide.

“Vietnam’s digital printing market is so small, much smaller than a private-owned printing house in Guangdong, China with 30 such modern digital printing machines,” said Nguyen Van Dong, chairman of Vietnam Printing Association.

“Our digital printing industry is 3-4 years lagging behind that in regional countries.”

“Traditional printing solutions, like offset printing, have its own downsides, which digital printing solutions can be use as a supplement for offset printing business.”

“Like the printing of tickets for the Backstreet Boys show in Vietnam last year, while offset printers could not customize the seat number for thousands of different tickets at a time, digital printers can,” Yoshio Hanada said.

Gucci showroom fined $3,600 for trading in dollars

A Gucci showroom located on Ly Thai To Street in Hanoi was recently fined a hefty sum of VND75 million (US$3,600) by the State Bank of Vietnam for violating the regulations on trading in foreign currencies.

Earlier on January 5, the shop’s cashier was caught receiving a $300 payment from a customer, newswire Dan Tri reported.

The money was confiscated, as was another sum of $400, including $1, $2, $5, and $100 banknotes found at the cash desk.

In Vietnam, making payments in foreign currencies or gold is considered breaching the central bank’s monetary regulations, a violation that is subject to a fine of VND50-100 million, according to a government’s decree released last October. Such violations were previously not subject to any sanctions.

The new decree also raised the penalties on quoting prices of goods and services in foreign currencies up to VND500 million ($24,300), a sevenfold increase over the previous rate.

Many gold shops, hotels, and other businesses have been fined over the last few months under the new currency policy.

In one case, the central bank on December 31, 2011, slapped a VND500-million ($24,000) fine on the joint-venture Thong Nhat Metropole Hotel Co Ltd, which manages Hanoi-based Sofitel Metropole Hotel, for listing its restaurant and bar menus and signing space rental contracts with local customers in US dollars.

Similar penalties were also issued to three other violators, including FPT University, Ngoc Long Gold Processing Co, and My Phuong Co, all located in Hanoi, for listing tuition fees in US dollars and illegally trading in the greenback.