US$9 billion oil refinery project under construction

Construction of Nghi Son Refinery and Petrochemical Complex started in Nghi Son Economic Zone in Thanh Hoa province on October 23.

At the ground-breaking ceremony, Prime Minister Nguyen Tan Dung said the Nghi Son complex is of great significance to ensuring national energy security in the implementation of the socio-economic development strategy.

Built on 400 hectares at an estimated cost of US$9 billion, it has a design capacity of 10 million tonnes per year (200,000 barrels per day).

Once completed, the project together with the Dung Quat Oil Refinery will meet two-thirds of total requirements for oil refinery products in the national industrialisation and modernisation process.

The modern oil refinery complex also includes a 2,400MW thermal power, a cement plant to produce 9.3 million tonnes per year, and a transport system to link deep-water ports. It plays an important role in promoting investment in Nghi Son EZ and surrounding areas.

FPT opens new office in Nagoya

The Japan FPT company (FPT Japan) officially opened a new office yesterday in Nagoya, Aichi province, Japan. This is their third office and follows others in the cities of Tokyo and Osaka.

This new office will contribute from 10-15 per cent of total revenue of FPT Japan.

Nagoya is the fourth largest city in Japan and one of three major industrial centers. The region is home to most of Japan's automobile production, including Toyota, Mitsubishi and Suzuki.

XMC delists amid poor operating results

Vinaconex Xuan Mai Concrete and Construction (XMC) has announced it will de-list shares from the Ha Noi Stock Exchange.

To ensure the interests of small shareholders, the company's largest shareholder, construction firm Khai Hung Co Ltd pledged to buy shares from them at negotiated prices no less than XMC's floor price on October 11 (VND5,600, US$0.2) within six months from delisting.

The stocks closed yesterday's session at VND6,100.

Meanwhile, Vien Dong Investment Development Trading Corp (VID) faces the threat of delisting shares from the HCM City Stock Exchange.

The company posted a loss of VND50.7 billion ($2.3 million) in the first six months of this year after two years running without profit. VID finished yesterday at only VND2,500 per share.

Viet Nam post to collect fees for EVN

Electricity of Viet Nam (EVN) and the Postal Corporation of Viet Nam (Vietnam Post) signed a co-operation agreement last Friday in Ha Noi.

Accordingly, customers will now be able to pay electricity bills at post offices.

A signing ceremony was held to affirm the commitment between the two partners, who pledged to promote the strengths of each other in order to serve customers better.

Steelmaker Hoa Sen Group reports Sept profit

Steelmaker Hoa Sen Group reports Sept profit– Steelmaker Hoa Sen Group (HSG) announced it achieved a revenue of VND1.07 trillion (US$50.4 million) and a profit of VND8.6 billion ($405,600) in September.

During the period between October 2012 and September this year, its total revenue reached VND11.7 trillion ($551.8 million), 7 per cent higher than the set target. Profit during the period hit VND580 billion ($27.3 million), exceeding the target by 45 per cent.

Lotte increases stake in Bibica to 43.1%

South Korean firm Lotte announced that it would purchase an additional 686,000 shares in confectionery company Bibica (BBC) from October 18 - 23, increasing its stake to 43.1 per cent.

The current foreign ownership in Bibica is 48.69 per cent, almost approaching the limit of 49 per cent. Therefore, Lotte will have to negotiate to buy the shares from other foreign investors.

The second biggest shareholder of Bibica is Saigon Securities Inc (SSI) with a 38.05 per cent stake.

There has been speculation around a possible takeover of BBC by Lotte, but this has been denied by the Korean investor.

Financial woes grip VN-Italy Steel Company

Viet Nam-Italy Steel Company (VIS) posted a loss of VND36 billion (US$1.7 million) in the third quarter and an accumulated loss of over VND10 billion ($471,690) in the first nine months of this year.

During the first nine months of last year, the steelmaker still make profits of nearly VND10 billion. The reasons for the losses are the declining construction steel price and higher inventories.

Ha Noi growth rate to hit yearly forecast

The Ha Noi People's Committee has predicted that the city's economy in the fourth quarter could grow by 8.9-9 per cent and rise to 8.1-8.2 per cent for the entire year, fulfilling the yearly target.

In the third quarter, Ha Noi's GDP posted a growth rate of 8.35 per cent, higher than the rates of 7.5 per cent and 7.85 per cent of the first and second quarters respectively.

The rise in GDP for the first nine months of this year reached 7.88 per cent, much higher than the country's average growth of 5.14 per cent, with positive increases seen in such areas as services (8.9 per cent), industry and construction (7.42 per cent), and agriculture (2.35 per cent).

Also during the nine-month period, 11,410 new enterprises were established with a total capital of VND69.3 trillion (US$3.26 billion), up by 8.2 per cent year-on-year, while 6,538 enterprises ceased operations, down by 19 percent year-on-year.

Savings amongst local credit institutions has been safer and liquidity more secure, meeting capital demands for trade and investment from local enterprises.

Authorities said one of its key tasks was to remove difficulties for enterprises to boost production and business activities. From the beginning of this year, the municipal Department of Industry and Trade has made efforts to expand the export market.

Pham Duc Tien, Deputy Director of the department, last week told Radio the Voice of Viet Nam that so far, Ha Noi has spent VND50 billion ($2.4 million) on trade promotion. Apart from such traditional markets as the US and the EU, Ha Noi will approach new markets like South Africa, Brazil and South America. Some businesses have agreed to export goods to the Brazilian market.

The city's administration also said its key task in the last three months of this year is to be patient in the adoption of support measures for local enterprises, helping them boost production and business operations.

Ha Noi also created favourable conditions for enterprises by improving the management efficiency of local authorities at different levels, implementing administrative reforms with a focus on simplifying administrative procedures, intensifying the fight against corruption and waste, practising thrift and creating a transparent working environment for local enterprises.

Viet Nam prepares to make most of FTA

The theme of increased market opportunities and stiffer challenges was reiterated by many speakers yesterday at a workshop that dealt with the European Union's commercial policies relating to Free Trade Agreements.

The event was organised by the Viet Nam Multilateral Trade Project (MUTRAP). The project supports the nation's deeper integration into ASEAN and the regional and global commercial system; increasing investment ties with the EU; and extraction of maximum economic benefits from multilateral agreements.

"We are expecting that the Free Trade Agreement (FTA) between the European Union and Viet Nam would be signed next year after four rounds of discussion, "said Brynari Fornari, deputy head of EU's Co-operation and Development Department.

He said that besides traditional pledges like open market and tax reductions, the FTA will focus on investment environment, intellectual property, and sustainable development and will strongly affect many important Vietnamese industries.

EU now includes 28 nations but still is one single market, and the bloc is expanding its policies to admit more countries.

"In the new generation of FTAs, EU will pay attention to social issues relating to employees' benefit, environmental protection and other issues," said Claudio Dordi, team leader of MUTRAP EU – Viet Nam.

With a huge population and great manpower potential, Viet Nam should benefit handsomely from the FTA, but "the country needs to make proper policies: developing is economy in line with social targets," said the former deputy head of the European Commission's Commerce Department, Pierre Defraigne.

In related news, the European Union signed a five-year contract worth 4 million euros with the French Chamber of Commerce and Industry in Viet Nam to set up the Support Centre for European Small and Medium-sized Enterprises in HCM City.

"We have recognised a strong need of support for European SMEs as the economic integration in East Asia is very strong and fast, production is moving quickly to developing nations like Viet Nam, but the country is far away for European SMEs to find opportunities. Hence the need to set up this centre," said Franz Jessen, Ambassador, Head of European Union's Delegation to Viet Nam.

The centre seeks to assist new SMEs on the cultural, legal and administrative aspects of setting up shop in Viet Nam.

The centre will have its first opportunity on November 12 as EU vice president Antonio Tajani pays a working visit to Viet Nam along with a large delegation of European SMEs.

The prospect of FTA between Viet Nam and EU being signed next year has attracted interest from many European SMEs because they want to find a stable investment environment, said Pierre Jean Malgouyres, chairman of the French Chamber of Commerce and Industry in Viet Nam.

"And we hope more European companies will come to Viet Nam soon," he said.

Time's right for Algerian trade

Deputy Minister of Industry and Trade Tran Tuan Anh has urged Vietnamese and Algerian enterprises to foster trade and investment co-operation to bring bilateral relations between the countries to a higher level.

Speaking to representatives from 100 businesses at a meeting in Algiers on Sunday, Anh introduced Viet Nam's investment policies and incentives as well as its recent achievements in agro-aquaculture production.

He hoped that businesses from the two countries could find opportunities for co-operation in the production, processing and export of farm produce and seafood.

The head of the Algerian Investment Promotion Agency, Ferrouki Lyes, said that the forum was organised at the right time, as Algeria was prepared to establish a foundation for sustainable industrial production without depending on oil exports.

Algerian companies at the forum were provided with useful information about the prospects of a future partnership between the two countries and copies of the book Viet Nam – A Trustworthy Friend and Partner, published by the Vietnamese embassy.

Two-way trade is increasing significantly. Viet Nam's exports to Algeria hit US$129 million in 2012, a year-on-year rise of 28 per cent that made Algeria fifth among African importers of Vietnamese products. However, imports stayed a modest $1.2 million. During the past seven months, Viet Nam's exports to the country rose by 15 per cent to $101.33 million. Coffee topped the list of export items, earning $31.52 million, followed by rice, telephones and components, pepper, seafood, machinery, equipment and tools and steel.

To boost exports, the Africa, West Asia and South Asia Department said it would work with relevant Algerian agencies and the Vietnamese Trade Office to organize a seminar and conduct fact-finding tours of companies, seaports, commercial centers and management agencies to gain a better understanding of import-export and investment policies.

Saigon High-tech Park to boost exports

Saigon Hi-Tech Park targets an increase in export turnover by 2015, six times higher than in 2010.

This was announced by management officials at a ceremony celebrating the park's 11th anniversary held last Friday in HCM City.

The park also aims to raise its localization ratio in high-tech products to 25 per cent by 2015, and 40 per cent by 2020.

To reach their goals, the park's management board will develop support industries that will eventually be a key component of the industry.

Over the years, the park has applied IT to its operation and management activities, which has contributed to better transparency in administrative procedures.

Le Hoai Quoc, head of the park management board, said that the high-tech park had 58 projects with total registered capital of $2.1 billion, of which there are 29 domestic projects worth $359 million and 29 foreign-invested projects worth $1.743 billion.

This year, most of the projects are in hi-tech development and high-quality human-resource training by local and foreign technology companies such as Microchip, Hutech hi-tech Institute, FPT University Research and Training Centre.

Since the beginning of the year, the park has attracted an additional five high-tech projects with total investment capital of $120 million. More projects are in the pipeline.

The park's Microsoft Innovation Centre opened on May 18, marking an important milestone in the park's economic restructuring process.

The centre is responsible for inspiring creative ideas and value-added solutions based on Microsoft technology platforms.

It also plays an important role in the network of technology partners, government organisations and education and training institutions. It supports technology innovation projects by researching and identifying strategies and trends.

The park, in collaboration with the National University of HCM City's Center for Research and Training in IC Design, has conducted research and developed pressure sensor chips using micro-electronic technology (MEMS), which are used in many fields, such as industry, agriculture and defense security.

Local lending lags behind target

Credit growth this year could fall short of annual targets, with banks unlikely to increase lending significantly by the end of the year.

The remark was made by Nguyen Hong Minh, director of the State Bank of Viet Nam's HCM City branch.

Speaking last week, Minh said credit growth would struggle to exceed 10 per cent, below anticipated rate of 12 per cent.

Banks present at the meeting expressed reluctance to lend out for fear of accumulating bad debts, the cost of legal proceedings to recall collateral and stagnant market conditions.

Spokespersons also said the legal process of handling mortgaged assets was complex and made debt recovery difficult task for lenders.

The deputy general director of ACB, Bui Tan Tai, said it usually took three to four years to resolve issues pertaining to mortgaged assets. Some banks even had to spend up to 10 years recovering assets from defaulted loans.

The process also varied according to different provinces with borrowers also able to use loopholes to delay the process for banks.

In northern Hai Phong Port City, a bank wanting to liquidate a house as a mortgaged asset must provide the homeowner with new residency before the liquidation can proceed, according to the Constitution, said Tai.

The director of the HCM City branch of Mekong Housing Bank, Tran Ngoc Thanh, also said that banks could not sell mortgaged assets themselves, as banks are dependent on local bureaucracies to complete the sale.

Banks also said the gloomy real estate market had prevented them from liquidating mortgaged properties.

Heat goes out of VN solar projects

Solar panel production projects in Viet Nam are stalling mainly due to difficulties in the global solar panel market.

The general manager of Global Sphere, Nguyen Trong Nguyen, said a partner withdraw from their solar panel production joint venture one year ago.

The United Arab Emirates-based firm found out that its Vietnamese partner, WorldTech Transfer Investment, did not have sufficient financial security.

The project manufacturing solar panels in central Hue City had a total investment of US$300 million invested by WorldTech and Global Sphere, of which Global Sphere was responsible for 100 per cent of investment capital while Worldtech was to be responsible for building, managing and controlling the plant.

Construction of the project started in January 2013 in the Phong Dien Industrial Zone, Hue City. The first phase of the project would operate after 30 months of construction with an initial capacity of 60MW panels per year and then the annual capacity would increase to 250MW panels in the second phase.

However, since January this year, the project has stalled and the Hue Planning and Investment Department said they have not received official announcement on either stopping or continuing the project from the investors.

This is the third project of its kind that has faced difficulties in investment and construction. The two other projects included a project in HCM City with a registered capital of $1.2 billion and a project in central Quang Nam Province with a registered capital of $390 million.

Last year, First Solar, the US investor of a solar panel production project in HCM City, announced a temporary stop to the development of the project due to a negative balance of supply and demand in the world market for the panels.

While the Indochine Energy Industrial Company located in Chu Lai Open Economic Region, central Quang Nam Province, proposed to prolong construction of its project producing solar panels because of difficulties related with market and with production technology.

Red tape holds back investment in Binh Phuoc

The southern province of Binh Phuoc has promised to focus on streamlining administrative procedures and improving infrastructure to make it easier for investors who have been complaining about them.

C&N Vina Co Ltd, which built the Minh Hung-South Korea Industrial Park, for instance, said it encountered problems like poor infrastructure and tortuous procedures.

It took two years to wrap up administrative procedures for building a dormitory for workers, it said.

Minh Hung 3 Industrial Park's developers said the procedures for getting approval to increase capital and clearing land took too much time, affecting the progress of work.

In response, the provincial Department of Planning and Investment has called on the People's Committee to reform administrative procedures and generally improve the investment climate.

Vu Thanh Nam, the department's director, also said relevant agencies have been instructed to list all bureaucratic procedures on their websites to make it easier for investors.

The province plans to improve infrastructure and urge investors to speed up installation of infrastructure at industrial parks, he said.

It is considering changes to its incentive policies, like those related to labour training, subsidising investors' advertisement costs, and providing more land-rental incentives, he said.

Authorities plan to organise a promotional trip to Japan to seek investment for industrial parks in the province, he said.

The province is preparing to zone off an eco-tourism area in the districts of Bu Gia Map and Bu Dop and build an industrial park-trade and service areas cluster in Dong Phu District.

Nam said the province, which has carefully earmarked lands, expects to attract more investment in future.

Electronics, phones top domestic exports

Exports of electronics, spare parts and phones saw the highest growth rate among 10 items with high turnover, according to the Ministry of Industry and Trade (MoIT).

In the first nine months, exports of phones and parts reached US$15.5 billion, an increase of 75 per cent compared to the same period last year.

In 2009, export turnover of phones and parts ranked ninth, and climbed to fourth in 2010 after textiles and garments, crude oil and footwear.

In 2011 and 2012, phones and parts jumped to second and then topped the list during the first nine months of this year.

Products assembled in Viet Nam are available in more than 50 countries, including the EU and India, which have strict requirements.

Le Ngoc Son, chairman of the Viet Nam Electronic Industries Association, said that exports of electronics, phones and parts are forecast to hit $20 billion by the end of this year.

However, according to MoIT, the export growth of items comes mostly from foreign invested companies.

These include multinational corporations such as Samsung, Intel, Canon, Nidec, Fujitsu, Brother, Panasonic, Renesas, Foxconn, and Bosch.

They all have built factories in Viet Nam that export phones, electronics, computers, printer products and parts.

The multinationals have strengthened their market share by taking advantage of preferential policies and cheap labour costs in Viet Nam.

Economists said that while export turnover of phones, electronics and parts was high, the real gained value was still low compared to other countries in the region.

They said that the electronics industry still must import a large volume of raw materials.

Local electronic enterprises make a small part of export turnover since they mostly do outsourcing and assembling for foreign firms.

Few local Vietnamese firms are capable of supplying parts for foreign companies. For example, Nokia has used raw materials from 10 local suppliers.

Son said the Vietnamese electronics businesses should become part of supply chains of global big corporations to improve production levels and upgrade technology.

The aim is to make finished products with high localisation ratio.

HCMC Power Corporation promises to complete power projects before schedule

At a meeting on October 21, leaders and contractors of the Ho Chi Minh City Power Corporation have promised to complete three power transmission projects ahead of schedule.

The corporation will strive to complete the three power transmission projects including 220-kV Cau Bong-Cu Chi transmission line, the 220-kV Cu Chi substation and the 110-kV Cau Bong substation before March 30, 2014 -- one month earlier than schedule.

The three projects have investments of VND1.7 trillion, and will transmit power from the 220-kV Cau Bong substation to the 110-kV Cu Chi substation and other substations in the Northwest of Ho Chi Minh City.

Le Viet Toan, Director of the Project Management Board, said the 500-kV Pleiku-My Phuoc-Cau Bong transmission line will be complete by April 2014 and will boost power supply to HCMC and supply electricity to Cu Chi District and part of Hoc Mon District.

 Local businesses get updated on EU’s policies toward FTAs

The EU’s policies towards Free Trade Agreements (FTAs) were the highlights of an October 21 conference in Ho Chi Minh City .

Organised with the support of the European Trade Policy and Investment Support Project (MUTRAP EU-Vietnam), the conference aimed to assist Vietnam in integrating deeper into the trade system of the world, ASEAN and sub-regions, strengthening the Vietnam-EU relations and optimising benefit of the economic development process.

According to Brynari Fornari, Deputy Head of the Cooperation and Development Section of the EU Delegation to Vietnam said Vietnam and the EU have conducted four negotiation rounds on their FTA and expect to sign it in mid- 2014.

Apart from traditional commitments on market opening and tariff cut, the agreement also covers a number of new issues impacting many sectors of Vietnam , including investment environment, intellectual property and sustainable development.

Experts from the MUTRAP EU-Vietnam said EU is an open economic community comprising of 28 countries and a single market that possesses the largest investment source in the world.

Currently, EU tends to expand and accept new members, thus being more open to new markets, they said.

Meanwhile, Claudio Dordi, MUTRAP EU-Vietnam technical assistance team leader said that in its more recent FTAs, the EU focused more on social issues relating to human right protection, employees’ interest and environment preservation.

Former EU Deputy Director General for Trade Pierre Defraigne said new generations of FTA will not be limited at bringing trade and investment benefits to involving economies, but also help improve their competitiveness through measures to promote training and better workers’ skills, while ensuring fine business and investment environment.

With a large population and strong human potential and advantages in production and consumption, Vietnam can enjoy many benefits from FTAs, he said.

Defraigne added that the country should design proper policies and combine economic development with ensuring social goals basing on the real situation of the economy and international integration to make full use of the benefits.

FDI projects in Vietnam touch US$110 billion

Nearly 300 industrial parks and economic zones, 15 coastal economic areas and 28 border gate economic areas in Vietnam have attracted around 5,000 Foreign Direct Investment projects worth US$110 billion, while 6,000 domestic invested projects are valued at VND970,000 billion.

In addition, more than 100 industrial zones and seven coastal economic areas have been planned and built in northern cities and provinces with total infrastructure investment of US$10 billion.

Infrastructure investment of US$5 billion has gone into 180 industrial zones in operation in these cities and provinces. Among them, 120 industrial zones have wastewater treatment plants.

Project helps EU businesses seek opportunities in Vietnam

A 4-million-EUR project was signed in Ho Chi Minh City on October 21 to help business players from the European Union (EU) to seek investment opportunities in Vietnam.

The project is seen as a joint effort by the EU Delegation to Vietnam and the French Chamber of Commerce and Industry in Vietnam to lure more investment from European businesses, especially small-and-medium-sized (SMEs), in the Southeast Asian country.

It is expected to benefit both European and Vietnamese businesses as well as boost their economic-trade relations in the time to come, said Ambassador Franz Jessen, head of the EU Delegation to Vietnam.

Under the project, a SME supporting centre is scheduled to be set up in HCM City in November this year, which will help promote bilateral trade and investment, he added.

According to Chairman of the chamber Pierre-Jean Malgouyres, one of the priorities of the project is to create all favourable conditions for both sides’ businesses to promote their cooperation with specific support programmes and practical services.

As Vietnam and Europe have enjoyed an increasingly sustainable growth in their bilateral cooperation through a number of trade agreements, the two sides need to diversify their activities to cement their trade links, experts said.

European businesses hope to study the investment climate in such potential market as Vietnam, they noted.

Talk highlights EU trade policy on FTA

The European Union’s trade policy on Free Trade Agreements (FTAs) was the major topic of a talk held in HCM city on October 21.

Under the auspices of the European Trade Policy and Investment Support Project (EU-MUTRAP), the talk aims to help Vietnam integrate deeper into the global trade system,  ASEAN and sub-regional cooperation,  intensify Vietnam-EU investment links and take full advantage of benefits from the economic development process.

Issued tabled for discussion included strengthening capability to access information and regulations, market approach opportunities related to Vietnam’s trade commitments and  international investment.

Bryan Fornari, Deputy Head of Cooperation and Development Section of the EU Delegation to Vietnam said the EU and Vietnam, has finalized four rounds of talks on the EU-Vietnam FTA (EVFTA) and they are expected to reach the agreementinmid2014.

Apart from commitments on market opening, tariffs reduction, the EVFTA also covers issues on investment environment, intellectual property and sustainable development which have strong impacts on Vietnam’s important sectors.

Claudio Dordi, Technical Assistance Team Leader, EU-MUTRAP Project, said that among new generation FTAs, the EU also put forth social issues related to respect for human rights, worker interests and environmental protection.

For any country which fails to comply with the regulations will find it difficult to get approval from the EU Commission in the FTA negotiation and signing with the EU.

Pierre Defraigne, Former Deputy Director General of the Directorate General for Trade at the European Commission (EC) said that new generation FTAs has  delivered  trade and investment benefits to economies, sharpened competitive edge,  been subject to labour conditions to ensure a  good  investment environment.

He emphasized that high population density and abundant labour force will provide a springboard for Vietnam to enjoy benefits from FTAs.

However, the country needs to devise proper policies in line with socio economic development and international integration process, he noted.

HCM City high-tech park attracts huge investment

Since early this year, Saigon Hi-tech Park (SHTP) has attracted US$120 million in five new projects, bringing the total number of high-tech projects to 58 worth more than US$2 billion.

According to the SHTP managing board, there are 29 domestic invested and 29 foreign invested mainly in hi-tech development research and human resource training, such as Microchip, Hutech hi-tech and FPT.

Le Manh Ha, Vice chairman of the municipal People’s Committee, said the city will encourage further investment in SHTP to make it become a key scientific and technological centre in the country.

Dramatic rise in CBU vehicle imports to Vietnam

Vietnam imported 3,400 complete built unit (CBU) cars in September, up 61.9% from a month earlier.

Imported CBU cars totalled25,000 worth US$494 million after nine months, up 27.1% in quantity and 10.1% in value compared to last year’s same period.

Imported cars saw a sharp increase in trucks (1,950 units, up 59.7%), nine-seat cars (1,200 units, up 78.4%) and other types (217 units, up 52.8%).

Meanwhile, imports of over nine-seat vehicles were only 29 units, down 47.3% from the previous month.

The General Department of Custom said over the past nine months, the Republic of Korea has been the leading supplier for CBU with 10,880 units, up 39.3% and accounting for 43,2% of total imported CBU cars, followed by Thailand (5,700 units, up 51.2%), China (2,770 units, down 13.4%) and Japan (1,540 units, up 67.5%).

Silicon Valley model inspires new project

The Ministry of Science and Technology has launched a project geared to commercialise new inventions and scientific research in Vietnam.

The project, launched on October 18, is based on methods used in the Silicon Valley in the US, and is designed to help create an "ecosystem" of start-up businesses.

Firms will receive training on how to improve products as part of an entrepreneurship promotion programme, which will offer them marketing tips and free consultancy on how to attract venture capital.

The programme is intended to help build up the nation's tech firms to cater to market demand, incorporate feasible business strategy and employ qualified staff.

The project will seek help from successful entrepreneurs, venture capitalists, lawyers and technology experts from the US's Silicon Valley.

It is also expected to create a favourable investment environment and attract more private venture capital from domestic and international investors.

Under the project, Vietnam's own Silicon Valley will create favourable conditions for start-up businesses to attract venture capital, and spawn a new wave of innovative businesses to shift the economy from low-value, labour intensive products to competitive, high-value products.

Firms will receive support for products currently being developed, while scientists will be equipped with the commercial acumen necessary to commercialise new inventions.

Skills taught will include basic management and business planning in line with international standards.

Minister of Science and Technology Nguyen Quan, said thousands of research programmes and inventions were registered in Vietnam each year by domestic and foreign universities, research institutes, businesses, organisations and individuals.

However, the commercialisation of these advancements remain a challenge, he said.

During the 2013-14 period, promising start-ups will take training courses offered by Silicon Valley experts.

Once graduated, they will be invited to attend a Demo Day, similar to an event held annually in the US where start-ups are able to showcase their innovations and network with entrepreneurs.

A social investment fund named "Start-up Vietnam Foundation" will be set up to call for domestic and foreign investment while introducing new Vietnamese business players to various venture funds and start-up training networks across the US.

Silicon Valley is the southern region of the San Francisco Bay Area in Northern California of the US. It is home to many of the world's largest technology corporations as well as thousands of small start-ups.

Vietnam, Sudan to form inter-government committee

An inter-governmental committee between Vietnam and Sudan will be established soon to expand bilateral economic cooperation on a par with their fine political relations.

Minister of Industry and Trade Vu Huy Hoang was speaking while receiving Adil Ibrahim Mustafa Ahmed in Hanoi late last week.

Sudan is the gateway to the Middle East and larger Africa, offering a plenty of opportunity for Vietnamese businesses to enter this market.

However, two-way trade between Vietnam and Sudan has yet to match their potential.

Last year bilateral trade reached more than US$29.2 million, including US$28.9 million worth of Vietnamese exports.

Sudan mainly imports Vietnamese garments, rice and seafood, and exports steel scraps to Vietnam.

Both sides should increase economic cooperation, and the establishment of the inter-governmental committee will support this process, said Hoang.

For his part, ambassador Adil Ibrahim Mustafa Ahmed said Sudan is rich in natural resources such as gold, copper, nickel and crude oil. He expressed his hope Vietnamese businesses will seek investment and business opportunities in Sudan.

A Ministry of Industry and Trade delegation made a fact-finding tour of Sudan in July 2013 to study its market and the possibility of trade promotions in mineral ore exploitation, oil and gas exploration, rice and farm product trading, garment manufacturing and seafood processing.

Vietnam-Algeria business forum in Algiers

A Vietnam-Algeria business forum was held in Algiers on October 20 with the participation of around 100 businesses from the two countries to seek opportunities for investment cooperation.

Deputy Minister of Industry and Trade Tran Tuan Anh introduced Vietnam’ investment incentive and cooperative policies, and its recent achievements in the production, processing and export of agro-aquaculture products.

Anh hopes that businesses of the two countries will seize these opportunities for mutually-benefited cooperation.

The head of the Algerian Investment Promotion Agency, Ferrouki Lyes, briefed participants on his country’s investment, market and business situation. He said Vietnam is one of development models for Algeria.

He said the forum took place at the right time when Algeria was prepared to establish a foundation for sustainable industrial production without depending on its oil exports.

Participants were provided with useful information about the prospect of future partnership between the two countries and copies of the book titled “Vietnam- a trustful friend and partner” published by the Vietnamese embassy.

During their stay in Algeria, the Vietnamese business delegation led by Tran Tuan Anh worked with the Algerian Ministry of Foreign Affairs, and Ministry of Industry and Trade to strengthen economic and trade ties for mutual benefit.

HCM City: high-tech parks

Since early this year, Saigon Hi-tech Park (SHTP) has attracted US$120 million in five new projects, bringing the total number of high-tech projects to 58 worth more than US$2 billion.

According to the SHTP managing board, there are 29 domestic invested and 29 foreign invested mainly in hi-tech development research and human resource training, such as Microchip, Hutech hi-tech and FPT.

Le Manh Ha, Vice chairman of the municipal People’s Committee said the city will encourage further investment in SHTP to make it become a key scientific and technology centre in the country.

Foreign firms set high pay standards

The difference in base salaries paid by multinational and Vietnamese companies is widening from 26% last year to 29% now, according to a survey by human resources providers Mercer and Talentnet.

While the salaries for staff and professionals are comparable, the difference in the salaries of managers and executives is quite high, Hoa Nguyen, Director of Mercer Remuneration Surveys and Human Resource Consulting Services said at the Post Total Remuneration Survey seminar in Ho Chi Minh City on October 18.

But she said with local companies often paying much larger bonuses, the gap narrows a bit.

To compete with multinationals in attracting talent, Vietnamese companies are now willing to pay outside their salary range, she said.

The survey points out that like last year, salary increases this year have been higher than the inflation forecast — of 7.5% — noting that multinational companies (MNCs) give employees an average 11.1% salary rise and local companies, 11.3 %.

The raise is forecast at 11.1% next year at both MNCs and domestic firms.

Godelieve Kroonenberg, Mercer's Market Business Leader, ASEAN Information Solutions, said Vietnam has the highest salary increase rates in Asia this year, followed by India and Indonesia at 10.5% and 9.3-10 %.

The trend would continue next year, she said.

With the starting salary in Vietnam being one of the lowest in the region, it has more room to increase, she said.

Hoa said the pharmaceuticals, manufacturing, and consumer-goods industries offer the highest rise of 12%.

Those in banking, financial services, and real estate are at the other end of the spectrum due to difficult business conditions, she said.

The survey said oil and mining and banking continue to top in terms of salaries, while manufacturing remains the lowest-paying industry.

The employee turnover rate fell 2-3% from last year because of the current economic condition, making employers and employees wary of new recruitment and moving, Hoa said.

The technology sector, which faces a talent shortage, had the highest staff turnover rate, and oil and mining and chemicals, the lowest.

According to the survey, despite the difficult times, 60% of companies plan to increase their payroll, 8% less than last year and 3% plan to cut their headcount, the same as last year.

Survey respondents said the most challenging to recruit and retain were sales managers, marketing managers, and sales executives.

Kroonenberg told Vietnam News that local companies may not have big budgets like MNCs, so to attract and retain talents they "have to find your own strengths, that means what makes you different as a local company, maybe you have better facilities at the workplace or maybe you offer bigger benefits or maybe just a working culture that is more healthy."

Promotion and opportunities to grow are also very important, she said.

The survey shows that improvements in benefits are almost the same as last year, and mainly focus on insurance, medical treatment, cars, and loans, with local companies providing more car and loan benefits than MNCs.

A total of 418 companies with 142,587 employees in 13 industries took part in the survey.

Last year's survey polled 371 companies.

Leading economist Tran Du Lich warns the Vietnamese economy has yet to bottom out, saying alleviating the banking system’s non-performing loan burden—and thus facilitating capital circulation—is now the primary concern.

Vietnam has worked to stabilise its macroeconomy in 2013, reining in inflation, controlling the foreign currency market, and improving the banking system’s liquidity.

Its economy grew by an approximate 5% in the first nine months of this year and is forecast to rise to 5.3% by year’s end.

The nine-month consumer price index (CPI) was kept at 4.63% and the annual reading is expected to hover around 6–7% .

National Assembly Economic Committee member Dr Tran Du Lich says Vietnam has paid a high price for these gains. Many businesses filed for bankruptcy or halted operations. Outstanding non-performing loans continue to weigh heavily on the domestic economy.

He believes the threats of high inflation and market stagnation are preventing the economy from prospering, cautioning the CPI could surge next year unless bold measures are taken to improve the situation.

Commercial banks’ non-performing loans are another economic bottleneck. Banks now have sufficient available capital but businesses—especially those classified as small and medium-sized—still struggle to access it.

Although banks lowered lending rates several times this year, businesses are unwilling to take on debt when the shadow of market stagnation looms. Many banks fear increases in unsecured non-performing loans will affect their operations.

Dr Lich thinks it is unlikely banks will lower lending rates any further. Both business and bank inefficiency are to blame.

The government’s VND30,000 billion real estate stimulus package has yet to deliver practical results, and improving the market’s liquidity in the short term is proving very difficult.

Tax collection failures mean the possibility of budget deficits is also endangering the macroeconomy. Third quarter statistics show up to 70% of HCM City businesses could not cover their corporate income tax liabilities. The figures do not include a large proportion of bankrupt or suspended businesses.

Public investments keep rising, planting the seeds for budget headaches in 2014–2015. This thorny problem will be tabled for discussion at the National Assembly’s upcoming session opening in Hanoi on October 20.

Vietnam will maintain conservative budgets for the next couple of years because of the sluggish economic recovery and prolonged tax reschedule, Lich says.

The crux of the matter, according to Lich, is reforming budget allocation, increasing fund transparency, and efficiently mobilising all State resources. A partial solution could be found in State divestment from non-core businesses, freeing up time and resources for more essential economic areas.

Dr Lich cites the State’s difficulties in his weak recovery forecasts for the 2014 Vietnamese economy. The foreign direct investment (FDI) sector will remain the country’s largest contributor. The agricultural sector will find it hard to accelerate growth, and despite comparatively positive signs, the service sector cannot fuel the entire economy.

Dr Lich concedes 2014’s economic outlook is “brighter” than 2012–13, with GDP growth estimated at 5.5% and CPI at 7%.

Maintaining macroeconomic stability will be the most pressing mission over 2014–2015, along with expanding economic restructuring across the banking and State sectors, and restoring faith in the domestic market.

The government has foreshadowed increasing expenditure to stimulate demand and cutting public investments to control inflation.   

More Malaysian investment encouraged

Vietnam welcomes and creates the best possible conditions for Malaysian businesses to operate efficiently in the country.

Deputy Prime Minister Hoang Trung Hai made the commitment at a Vietnam-Malaysia business meeting in Hanoi on October 18.

Hai emphasised the future potential for Vietnam-Malaysia cooperation, especially considering Vietnam’s free trade agreement negotiations with six economic centres and the ongoing efforts towards establishing the ASEAN Community by 2015.

He said bilateral economic and investment ties have developed substantially over the years, affirming Malaysia is one of Vietnam’s most important ASEAN partners, pouring more than US$10 billion into 444 Vietnam-based projects.

Vietnam also invested more than US$700 million in 10 projects in Malaysia.

The forum marks the 40th anniversary of bilateral diplomatic ties. Vietnam considers it a valuable opportunity to promote recent investment environment improvements to interested foreign parties.

Malaysian Deputy Prime Minister Tan Sri stressed the importance Malaysia attaches much to its relationship with Vietnam, especially in economics.

He said Malaysian businesses accompanying him on his visit are eager to explore investment projects in Vietnam, describing it as one of the Malaysian business community’s prioritised destinations for expansion.

Both countries’ business representatives seized the chance to meet with the two Government leaders and discuss trade and investment policies, set targets and development goals, and specific projects.

Malaysian businesses were particularly enthusiastic regarding Vietnamese oil and gas, information technology, energy, construction, agriculture, and banking.

The two Deputy PMs and other managers answered queries concerning bilateral commitments and agreements, administrative procedures, investment licenses, and land policies.

Vietnam-Malaysia two-way trade turnover is approaching US$8 billion with an average annual growth of 15–17 percent. Vietnam’s 2012 exports to Malaysia rose 54% to US$5.2 billion.

Vietnam reveals US$2.13 billion ASEAN trade deficit

Vietnam ran up a trade deficit of 2.13 billion with other members of the Association of Southeast Asian Nations (ASEAN) in the first nine months of this year, or 15.5% of its export total to the bloc.

Vietnam Customs statistics show nine-month trade turnover between Vietnam and ASEAN reached US$29.57 billion, accounting for 15.4% of the country’s total import-export revenue.

Vietnamese businesses earned nearly US$1.53 billion from exports to ASEAN in September alone, falling 4.3% from the previous month.

But their nine-month exports to ASEAN markets rose 11.1% to US$13.72 billion compared to the same period last year.

Its ASEAN imports were worth US$1.8 billion in September and a cumulative US$15.85 billion in 2013 so far, a slight 2.6% increase on the first three quarters of 2012.

Malaysia was Vietnam’s largest ASEAN trade partner during the reviewed period, followed by Thailand, Singapore, and Indonesia.

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