Entrepreneurs asked to ‘take and give’

Entrepreneurs while pursuing profits should also seek ways to contribute to the community, as that “take and give” attitude will help bring about sustainable development for them as well as the economy, experts told a forum on Saturday.

Environment protection can be deemed both a mandate and a challenge for enterprises, they said at the forum organized by Vietnam Report Co. to present certificates to the top 500 Vietnamese enterprises in 2010.

Alex Malley, chief executive officer of CPA Australia, told Vietnamese corporate leaders to successfully manage the two challenges of profits and environmental issues at the same time to achieve sustainability for their businesses in this market.

The double challenge was not easy for corporate leaders in an emerging market like Vietnam to deal with but they had to, Alex Malley told the forum.

CEOs in the emerging economies have to navigate their companies in terms of not only profit drive but also effective solutions to social, economic and environmental issues, said the CEO of CPA Australia, which is one of the largest accounting bodies in that country.

Ton Nu Thi Ninh, former vice chair of the National Assembly’s Foreign Affairs Committee, told reporters on the sidelines of the event that companies should hold responsibility for contributing to the Government’s efforts to address issues in relation to growth and inflation.

Growth often goes with inflation, Ninh noted. But, she suggested that corporate leaders take action to minimize the pressure of their growth on goods and services prices, the country’s economy and the environment.

“Enterprises cannot ignore the impact of their operations on the interest and benefit of the community and the society, and should be responsible for resolving related consequences to others,” Ninh told the Daily.

Ninh pointed out environmental polluter Vedan Vietnam as an example of those companies that only want to take without feeling responsible for giving back to the society, saying that operating responsibly was what companies were able to do to give back to the society and the environment.

Ninh also questioned the responsibility of pharmaceutical and dairy producers and traders for setting prices of the products that affect health of people. “It is not reasonable if prices of pharmaceutical and dairy products in Vietnam are reportedly higher than in other markets. This must be fixed.”

Malley of CPA Australia said achieving the targets for both profits as well as social and environmental responsibility was very tough, especially for Vietnamese companies because most of them were small and medium-sized enterprises. But, he stressed local businesses had to look to a long-term future.

“We need to make choices that we have little benefit now but will help make the economy much stronger in the next 10 or 20 years,” Malley said. “It is easy to come up with an idea to set up a business but not easy to have a business that lasts long-term.

Malley encouraged Vietnamese companies to prepare long-term plans with both commercial and environmental considerations, as this would add more values to and sustain their operations.

Cement sales up 10%

Cement consumption in Viet Nam is expected to increase by nine to 10 per cent to 56 million tonnes this year, according to the Ministry of Industry and Trade.

During the year, about 12 new cement plants will come into operation with a total estimated yield of 10.18 million tonnes per year.

Nguyen Van Diep, an official of the Viet Nam Cement Association, said the new operations would lift total cement production to more than 60 million tonnes, providing four million tonnes for export.

As for prices, Diep said that they would remain the same until Tet (Lunar New Year). "After that, however, the price will depend on the price of coal and electricity," Diep said.

City committed to curbing Tet price rises

HCM City is deploying several solutions to keep consumer prices stable for the up-coming Lunar New Year.

Le Ngoc Dao, deputy director of the city's Department of Industry and Trade, predicted that the commodity revenue in the city would increase by 30 per cent compared to other months and 15 per cent against last Lunar New Year.

"Supply is abundant this year. The food volume of 15 enterprises taking part in the price stabilisation programme makes up 30 to 40 per cent of the market share. So there will be no price hikes during Tet," Dao said.

The department has asked the city's Department of Transport to grant licenses to enterprises taking part in the programme to operate vehicles that sell food during peak hours.

Saigon Co.op Mart and SATRA Group have deployed more than 140 mobile food stalls in industrial parks and in out-lying districts for the rest of the month.

Tran Tan An, deputy general director of VISSAN, the largest meat processor in the country, said for this year's Tet, the company decided to increase food production by 20 per cent against last year.

The company has worked with all super market chains in HCM City to create a common discount rate to help curb prices hike. A food company representative in the city said that thanks to thorough preparations this year by many enterprises, prices would not fluctuate to the extent they did in past years.

Last year's price stabilisation programme made food prices in HCM City 10 per cent lower than in neighbouring provinces. As a result, traders from other provinces came to the city to buy goods.

This year, speculation will be managed well and there will be sufficient food supply in areas that have faced shortages in the past. As opposed to previous years, the city's super market chains will resume work on the second day of the New Year to abate consumer concerns over supply shortages and price increases.

Workshop examines economic transition

The role of State management in a market economy is to provide regulations for all economic sectors to develop instead of controlling and deciding production, distribution and prices, according to a workshop in Ha Noi on Tuesday.

The workshop, which was held by the Swedish Embassy and the Vietnamese Ministry of Planning and Investment's Central Institute for Economic Management (CIEM) was part of a programme funded by Sweden on reviewing the role of state management in a transforming market economy.

Speaking at the event, head of CIEM Le Xuan Ba said the renewal of State management has seen positive changes, significantly contributing to the country's socio-economic development.

However, he added that the country should strive to improve the State management's efficiency for sustainable development during the global economic integration process.

"The Government should legislate to guarantee the rule of law concerning private ownership and contracts and primarily prescribe policy guidelines that foster economic growth."

Ba said State management must also help deal with market failures such as asymmetric market information.

PhD Soren Haggroth, a senior advisor to the Swedish government from the Professional Management AB consulting company said the doi moi (renewal) programme launched in Viet Nam in 1986 had achieved impressive results after gradually decentralising decision making and promoting the importance of markets and prices in guiding policy.

"The inflation level was brought down and nominal interest rates were reduced, creating more stable investment conditions," Haggroth said.

He added that trade reforms resulted in a rapid increase of foreign trade and investment as well as improvements in the Vietnamese people's living standards.

"The balance between the market price mechanism and public regulations varies from country to country and also over time," he said, adding that in practice, almost all countries today are mixed economies.

He said globalisation of the economy was likely to require new instruments of macro-economic management.

"Liberalisation of financial markets should be combined with strong measures to increase transparency and supervision of banks and other financial institutions."

Despite successes in controlling inflation, Haggroth said a new institutional environment was needed to maintain price stability.

He suggested considering a strategy for further developing the country's private sector and its ongoing process of equitisation.

Arne Svensson, president of Professional Management AB, said the public sector had not adapted to the changes in the Vietnamese economy.

"Effective macro management must take into account the role of the private sector and civil society and the need to create level playing fields for all actors," he said.

Viet Nam enjoys strong economic growth but is hindered by small financial markets. It is necessary to attract more foreign investment by providing a transparent business environment in order to make use of the large potential for further economic development, said Svensson.

Senior economic expert Pham Chi Lan said that to improve the role of State management in the market economy, the Government should reduce public ownership while developing an effective mechanism to manage the macro-economy.

"The important task is figuring out how to develop the economy without depending on the State while encouraging all economic sectors to develop," Lan said.

Japan provides $700m loan for development

Japan will lend Viet Nam US$700 million as the first batch of its Official Development Assistance this year, the Japan International Co-operation Agency (JICA) said yesterday.

The loan agreement, to be signed next Monday in Ha Noi, will be used to build the second phase of the Nhat Tan Bridge, the second phase of Nghi Son Thermo Power Plant and the 9th Poverty Reduction Supporting Credit.

It is part of a $1.76 billion commitment that Japan – the largest bilateral donor to Viet Nam – offered in 2011 as it announced at the Consultative Group Meeting in Ha Noi last December.

The agency also confirmed Viet Nam as the most important partner of Japan in its development and support strategy in Asia.

Last year, Japan's ODA reached over $2 billion, including an $500 million of emergency aid to help mitigate the effects of the global economic crisis.

US$5b in seafood exports targeted

This year, the country's seafood industry targets to farm and catch 5.3 million tonnes of seafood, and earn US$5 billion in exports, according to the Ministry of Agriculture and Rural Development's Directorate of Fisheries.

Deputy Minister of Agriculture and Rural Development Vu Van Tam said the sector would develop through increased focus on quality and value improvement, by expanding farming areas, and by further developing key product such as tiger prawns, white-leg shrimp, catfish and oysters.

Aside from expanding the scale of catfish and shirmp production, localities should create favourable conditions for qualified and hygienic breeding to ensure enough materials for production, he said.

To increase export value, the sector plans to develop traditional as well as potential markets, such as China, South Korea, Russia, the US, the EU and Japan.

Le Thanh Luu, head of the Aquaculture Research Institute No1, said promoting trade and predicting changes in natural resources related to the industry were crucial.

Nguyen Viet Thang, chairman of the Viet Nam Fisheries Society, said that to maintain long-term sustainable development of the sector, Viet Nam should not focus only on exports but also on domestic consumption.

Currently, there are 150 enterprises and 4,000 household businesses producing goods for domestic consumption. Labourers working in these businesses, however, only account for 12.7 per cent of the total workers in the sector, according to Tran Thi Dung, director of the Centre for Fisheries Planning.

Most of them were unskilled and only learned about the profession by working, she said, adding that they lacked basic knowledge of technology, food safety and hygiene.

Dung said that despite an abundance of workers, their lack of training affected product quality, making it difficult to satisfy increasing domestic and foreign demand.

Viet Nam's seafood export ranked sixth among 10 leading seafood exporters in the world and ranked fourth in Asia behind China, India, Indonesia and the Philippines.

There are currently 396 Vietnamese seafood processing enterprises qualified to export directly to the EU market.

Last year, the country's seafood export value reached $4.94 billion, a rise of 16.3 per cent on the previous year's figure. The result was due to the Government's policies that support fishermen and encourage them to use modern processing and preservation technology.

Opportunities open for business in US

Vietnamese firms have ample opportunity to do business in the US, especially in California, which is home to the biggest Vietnamese community, a trade conference held in the state recently heard.

Seventeen Vietnamese businesses in the tourism, processed foods, fine arts and handicrafts and household items production industries attended the conference and the Asia – US trade fair.

Demos Vardiabasis, chairman of a California-based entertainment and tourism consultancy, called the event a good opportunity for Vietnamese businesses to introduce their products to the US market.

But firms looking to do business in the US should invest time in looking for partners, he said.

Tu Minh Thien, director of the HCM City-based Investment and Trade Promotion Centre and head of the Vietnamese delegation, told other delegates about his country's economy and the advantages of doing business in Viet Nam, especially in HCM City.

He urged US and Asian businesses to invest in Viet Nam.

The annual trade conference and fair, organised by the non-profit China US Business Association, aims to create business opportunities and bridge the US and Asian markets.

The event in which Viet Nam participated for the first time attracted businesses from China, Indonesia, the Philippines, Malaysia, Sri Lanka and Mongolia.

Firm signs airline crockery contract

Binh Duong-based porcelain maker Minh Long 1 Co Ltd signed a contract yesterday to provide the tableware for Vietnam Airlines business-class.

Minh Long will provide with the national flag carrier for five years beginning mid-2011.

Addressing at a press conference shortly after the signing certemony, general director of Minh Long 1, Ly Ngoc Minh, said the porcelain tableware set called "Apricot Bossom", designed for Vietnam Airlines, was befitting of the beauty of Viet Nam.

In the first two years of the contract, Minh Long would provide Vietnam Airlines with nearly one million items worth about VND30 billion (US$1.5 million), he said.

"The introduction of the newly-designed crockery will help Vietnam Airlines improve its services, especially for business-class passengers," said Pham Ngoc Minh, general director of Vietnam Airlines.

"The co-operation with Minh Long 1 is part of a plan to make Vietnam Airlines one of the top ten Asian airlines providing best ground and in-flight services to passengers."

Vietnam Airlines, which is currently flying on 20 domestic and 26 international routes, has increased the number of flights from 250 per day in 2009 to 350 in early 2011.

Vietnam Airlines eyes Danang-Tokyo flights

Vietnam Airlines, which operates direct one-way flights from Tokyo to Danang, is considering launching services in the reverse direction too.

The carrier also hopes to cooperate with the city government and tour operators to attract more Japanese tourists to sustain this segment.

Vietnam Airlines and the Danang People’s Committee co-hosted a conference in the city Tuesday to promote the Danang-Tokyo service and discuss business opportunities for Vietnamese and Japanese tour operators.

Le Hong Ha, the carrier’s central region director, said there are plans to start the

Danang-Tokyo service if there is enough demand.

Vietnam Airlines began flying seven times a week on the Tokyo – Danang - HCMC sector

December 15 to accommodate demand from Japanese winter vacationers.

The program is now scheduled to run until March 31.

Japanese make up the third largest group of tourists to Vietnam after Chinese and Koreans.

WTO proves mixed blessing for local farmers

World Trade Organisation (WTO) membership has brought mixed blessings for the country's agricultural sector, according to officials.

Ho Xuan Hung, deputy minister of Agriculture and Rural Development, said the sector had progressed well because it had updated its technology to be globally competitive.

Thanks to WTO membership, exports of farm produce had increased, Hung said, adding that export earnings had rose significantly in recent years, reaching US$19.2 billion last year, an increase of 22.6 per cent over 2009.

Las year, the country had 18 items each reaching export revenue of $1 billion or more, six of which were in the agricultural sector, including rice, pepper, cashew and tra fish.

However, many industry experts said after four years of WTO membership, the country's capacity still remained weak in building brands.

In addition, local businesses had not worked well with one another, and there was still unhealthy competition among them.

After joining the WTO, the country's farm produce exports encountered technical barriers, antidumping duties and lawsuits imposed by importing countries.

Due to lower import tariffs, foreign produce had penetrated the domestic market, causing difficulties for locally grown items.

In the 2011-15 period, most protective measures for the agricultural sector will be gradually abolished due to the WTO commitments, which will put pressure on the prices of locally grown produce, both in foreign and local markets, according to Tran Thi Mieng, deputy head of the Department of Agro-Forestry Products Processing and Salt Industry.

However, Hung said the Government would continue to support the sector because of such risks, particularly those of the weather.

"Even a big country like the US still offers many subsidies for its farmers," he said.

But the Government would not offer direct support, only indirect support, including investment in infrastructure and human capacity, and training farmers in production and marketing skills.

The country had been relying on its cheap labour force to make agricultural products competitive in export markets. This would not be sustainable in the long term for the country to develop further, he said.

Improvement in processing technology and the value added to agricultural products, along with better quality, processing and a wider variety of products, would help the agricultural sector become more competitive.

In addition, improvements in hygiene standards, food safety, trademarks and distribution were also very important to develop the sector in a sustainable manner.

Vinacomin to cut coal production

State-owned mining giant Vinacomin Group plans to reduce coal mining this year in order to maintain reserves for national energy security, saysVinacomin general director Tran Xuan Hoa.

The group had targeted to exploit 44 million tonnes of coal this year, 2.8 million tonnes lower than in 2010, Hoa said. This target would allow revenues from coal exports to still post a 10-per-cent increase this year due to higher prices, he added.

To further enable greater reserves of dwindling domestic coal supplies, Vinacomin would also focus on mining high-quality, high-value coal for export, while importing lower-value coal for domestic electrical, cement, fertiliser and paper production, he said.

Last November, Vinacomin sought the Government's approval to increase coal prices for these four leading coal consumers to levels only 10 per cent lower than export prices. The Prime Minister and the Ministry of Finance issued an instruction that prices of coal sold to these sectors should increase gradually until consistent with market prices.

Hoa said he expected the State to soon undertake a further measures for the domestic coal market that would allow all prices to be set by market forces. Meanwhile, a separate plan to increase coal prices for electricity producers would be carried out in two phases. In early 2011, prices would be set based on the 2010 production costs. Then, in the fourth quarter of this year, coal prices for power plants would be set at the same levels applied to other major consumers.

PV