All-in-one solution warehouse unveils in Binh Duong

The world’s leading provider of logistic service Damco has inaugurated a new all-in-one solution warehouse this Wednesday in Di An district, the southern province of Binh Duong.

The 26,000 square meters warehouse with total investment up to US$4 million can offer different storage services includes: container freight station (CFS), bonded warehouse and general cargo warehouse with capacity up to 1 million three-dimension meters (m3).

It is now connected by land to Cat Lai seaports in Ho Chi Minh City and Cai Mep seaports in the coastal Ba Ria - Vung Tau province. In the near future ferry and barge will be used to provide more transportation solutions.

Began construction in August 2010, this is now the ninth warehouse of Damco in Vietnam.

SMEs owned by large firms denied tax extension

Small and medium-sized enterprises which are at least 50 percent owned by large companies are not eligible for the government’s one-year tax deferral program.

Besides, SMEs’ income from property, financial, banking, insurance, and securities transactions and services that attract special consumption tax too will not be eligible under the program. In other words, tax on these incomes has to be paid in the normal course.

A company is considered an SME if it has a capital of less than VND10 billion and no more than 300 employees.

Local tissue maker to export to Japan

Saigon Paper Corporation said it had received a US$120,000 order for its paper tissues from Japan.

Luu Quy Phuong, head of the company’s trade department said this was a positive sign considering foreign paper tissues have to satisfy numerous stringent requirements before they can enter the Japanese market.

Phuong said his company would ship to Japan thirteen 40-foot containers of paper tissues every month in the first half of this year and in the later half, switch to 50-foot containers when its new My Xuan II plant is up and running.

The Japanese importer would sell Saigon Paper Corp.’s tissues at over 200 retail stores in Japan, Phuong said.

The Vietnamese company’s brand name and logo would remain on the label.

More professional training needed for auditors

Methods used to train auditors and accountants need fundamental change, said Viet Nam Association of Accountants and Auditors president Dang Van Thanh at a forum yesterday in Ha Noi.

Viet Nam's accounting and auditing systems needed greater capability to analyse economic and financial information and make forecasts, Thanh said.

"It's necessary to put an end to passive teaching methods that compel students to view State accounting standards as the standard for accounting knowledge," he added. "Students need to understand and develop intrinsic theories instead."

"The perception about accounting needs to be changed," agreed Prof Nghiem Van Loi from the University of Labour and Social Affairs. "Many universities in Viet Nam are still training bookkeepers, not real accountants."

Vietnamese exporters had encountered international lawsuits because of the differences in accounting data from foreign firms, noted Thanh.

"It was not because Vietnamese accounting and auditing regulations were not in line with international practices, but because enterprises did not strictly follow tax and accounting regulations," he said. "In 2003, I was directly involved in the basa fish lawsuit, through which I found that enterprises had not seriously complied with regulations." he said, noting that some Vietnamese firms were found to have no accounting or internal audit systems in place.

An international standardised accounting and auditing system needed to be built and applied effectively in practice, he said. Both were critical elements to creating a healthy business environment and helping Viet Nam be recognised as a market economy.

Dang Thai Hung, head of the Department of Accounting and Auditing Policies of the Ministry of Finance, said: "Legal provisions should be mixed with specific case studies to prepare human resources with practical knowledge."

"Virtual accounting departments should be established to provide actual accounting and auditing templates and case studies for students," agreed Thanh.

Rhys Johnson, head of the Association of Chartered Certified Accountants (ACCA) in the Asia-Pacific region, shared a Chinese experience in offering embedded programmes in universities.

"Students took auditing courses from both the universities and the ACCA," Johnson said. "These programmes were applied in the second year at universities, so they helped students save a lot of time to earn ACCA papers."

Chinese universities faced similar challenges, including a lack of qualified lecturers, he said, but the challenge could be met here by co-operating with the private sector to deliver courses for embedded students.

Firms urged to develop innovative products

Developing new products can offer opportunities but create potential risk for businesses, a professor at a seminar said yesterday in HCM City.

"The opportunity for new product innovation is to protect the market you have and protect customers you have. It can enable you to penetrate new markets, find new customers and find new opportunities," said George Abe, lecturer at the University of California and Los Angeles (UCLA).

Businesses developed new products in response to competitive pricing pressure, said Abe, who is faculty director of the Applied Management Research Program at the UCLA Anderson School of Management.

They should also be developed to respond to a fast-changing market. Many new products failed, however, because businesses did not carefully conduct market researches before launching the products.

"There are two ways to launch and market new products: product first or market first," he said.

The product-first strategy meant that the entrepreneur conceived of the product before the customers were even aware that they needed or wanted the product.

This strategy required highly creative management and "disruptive innovation," he said, adding that it was a high-risk but high-reward strategy.

Many businesses in California had followed this strategy, he said.

Asian businesses usually chose the "market-first" strategy, he said. Businesses observe the market, find a market need, and then build the product to fit the market. This was "sustainable innovation" with fewer risks but also fewer rewards, he said.

"A market-first approach can cause too many products or improvements to be introduced," causing branding confusion for existing products, he said.

If a company wasn't careful in introducing new products, their brand might be negatively affected, he said.

When a company had too many products in their product portfolio, management for a wide range of products becomes increasing complex, he said. Abe also advised local companies to focus more on developing the domestic market first before marketing products to other countries.

"I see many businesses think of going to the US and EU so early," he said, noting that these markets were highly competitive, with many well-trained buyers as well as other challenges.

"With a population of nearly 90 million in Viet Nam, I think a good market is here," he said.

If companies did not have a good portfolio in the local market, they would not have enough "market maturity" to penetrate other markets, Abe said.

Product piracy damaging economy

Greater awareness of the real impacts of Intellectual Property Rights violations is key to fighting piracy and counterfeiting, experts said at a workshop yesterday.

Those who engage in violations as well as those who support them by buying counterfeit products should know that they harm the economy, businesses as well as a majority of the consumers, they said.

IPR violation was a major hazard for honest businesses, consumers and national economies in terms of loss of sales, loss of competitive standards, low quality and risk to consumers, said Prof Laurent Manderieux of Italy's Bocconi University.

"For national economies, losses due to IPR violations include losses to public revenue, reduction in technology transfer from foreign investor, lower labour standards and skills, and threats to national heritage and cultural diversity," he said.

Manderieux, a senior expert to the EU-Viet Nam Multilateral Trade Assistance Project (MUTRAP III), was addressing a workshop on IPR enforcement held by MUTRAP III, the Viet Nam Chamber of Commerce and Industry (VCCI) and the Viet Nam Association for Anti-counterfeiting and Trademark Protection in HCM City.

Experts at the workshop said Viet Nam had a firm institutional base for dealing with IPR violations.

Viet Nam was a signatory to the Paris (protection of industrial property), Madrid (international registration of trademarks) and Berne (protection of art works) conventions and other bilateral and multilateral agreements on IPR, thus fighting the violations was an essential task, said Nguyen Cam Tu, deputy minister of Industry and Trade.

He said Viet Nam needed to focus on perfecting the legal system and implementing a strong campaign to raise public awareness on IPR enforcement.

Tran Huu Huynh, deputy general secretary of VCCI, said that the country had a relatively firm legal system but there was a great distance between the laws and their enforcement.

"I can say that public awareness of IPR is rather high, reflected in rising number of registration petitions for IPR, more enrolment in universities for IPR study and thousands of stories in newspapers against counterfeiting and piracy," Huynh said.

Hoang Cong Son of HCM City's Market Watch Bureau agreed with Huynh, saying businesses and consumers should join hands in tackling IPR violations actively.

Businesses whose products are counterfeited have not been active in co-operating with agencies to fight against goods imitating their products. They have also not paid enough attention to helping consumers distinguish fake goods from real ones," he said.

"A majority of consumers do not boycott counterfeit items. They still prefer cheap prices and attractive models".

The Viet Nam Anti-counterfeiting and Trademark Protection Association also called for changes in the public's attitude to the fight for IPR protections.

Le The Bao, chairman of the association said was necessary to remove the mindset that "it is reasonable to have counterfeit items at a time real goods are too expensive."

Bao called for closer co-operation between agencies enforcing IPR laws and enterprises and business associations.

Second home market: potential investment in central and southern region

The second home market in the central and southern regions was showing its potential, with investors snapping up more than 50 per cent of the available properties in the area recently, according to commercial real estate services firm CB Richard Ellis Viet Nam (CBRE).

According to CBRE, Government measures to control gold trading and foreign currency exchange, as well as the stock market slump, had made property a more attractive investment.

"Diversifying the real estate portfolio beyond the main cities of Ha Noi and HCM City into emerging second home markets is a way to minimise risk as well as gaining a vacation home," said CBRE.

Da Nang leads the emerging second-home market, followed by Mui Ne in Phan Thiet Province, Long Hai in Vung Tau Province and Phu Quoc in Kien Giang Province.

A second-home is defined by investors as not a primary home. It serves to provide a relaxing place for families to stay on weekends or holidays. However, when unused, second homes can be available for lease, which can bring in additional income.

Frequently, second homes are in a hotel, resort or golf club complex or in the mountains. Services such as maintenance, management and rental payments are looked after by a resort management board.

Cashew industry eyes loans to store harvest

The Vietnamese cashew industry needs bank loans to stockpile its harvest to prevent a fall in prices, the head of the industry association has said.

Nguyen Thai Hoc, chairman of the Viet Nam Cashew Association (Vinacas), told a cashew purchase conference yesterday that larger businesses with deep pockets capacity should buy harvested cashew and the association would consider urging relevant agencies and banks to provide them loans.

"The industry is facing some unusual developments this year, like drying up of credit, high interest rates, and tough requirements for getting bank loans," he said.

The cashew crop is due for harvest in Binh Phuoc Province on May 10, while in Vung Tau and Dong Nai provinces, it is May 20.

Frequent and heavy rains had adversely affected the growth of cashew plants this year, Hoc said.

With the cost of processing rising to US$1,200-1,300 per tonne of nuts, processors would only break even at $4 a pound (453gm), he said.

But many were selling at $3.7-$3.9, he said, blaming it on three reasons: Small businesses tend to buy raw cashew and process and sell immediately, loans are very expensive at 20-25 per cent but still hard to get, and rainy weather has tempted businesses to sell out and buy again.

Pham Van Cong of the Nhat Huy Joint-Stock Company agreed, saying some businesses sold cashew at low prices to repay expensive loans.

He urged Vinacas to persuade banks to lend on easier terms.

Doan Xuan Hoa, deputy director of the Department of Agriculture, Forestry and Fishery Products Processing and Salt Industry, said the cashew industry was facing a hard time.

He called on Vinacas to monitor raw-cashew and export prices and the quality of cashew nuts.

There was a need to control export prices since a wrong forecast could lead to needless stockpiling of cashew, resulting in heavy losses, he added.

Inflationary pressure mounts in HCM City

The April consumer price index (CPI) in HCMC is forecast to rise 3.16% from the previous month, pushing up inflation in the first four months to 8.2%, according to the city statistics department.

All 11 groups of items in the basket of goods used to calculate the CPI are projected to pick up in prices this month, with transport, food services and building materials seen climbing over 4% from the previous month.

Prices of food services, a major group in the basket, are up 4.56% from March as food has increased 1.23% and foodstuff 6.19%.

The department said food prices had continued to soar 1.23% due mainly to the rising prices of products made from rice. Prices of cereals and rice are up 2% and 0.61% respectively this month.

In the foodstuff group, livestock, poultry, processed meat, eggs, seafood, vegetables, fruits and sugar are also forecast to mark up.

The transport group has seen prices increasing a sharp 5.77% as a result of a 10.96% rise in fuel prices.

It is expected to see the country’s CPI in April reaching 3%, and the figure in the first four months may exceed 7%, the target set by the Government for the whole year.

Special mechanism sought for Vietnam Air IPO

The Ministry of Transport has written to the Prime Minister seeking a special bidding mechanism for Vietnam Airlines Corp. to select an international finance consultant for a plan to equitize the national flag airline.

The ministry said the consultants proposed by Vietnam Airlines were foreign institutions and were not on the list of the organizations announced by the Ministry of Finance. Therefore, the transport ministry proposed the Prime Minister consider approving candidates for a forthcoming tender to select a qualified consultant for the airline’s plan to launch an initial public offering.

A special bidding mechanism will let the IPO plan move forward as it has been behind schedule for years. According to the transport ministry, Vietnam Airlines previously contacted eight international banks and the cost of a proposed consulting package was almost US$3.9 million. 

Vietnam Airlines has yet to decide on the amount as the current regulations limit consulting fees to VND500 million (some US$24,000). However, the corporation said it cost millions of U.S. dollars to evaluate an international carrier based on merger and acquisition cases related to airlines.

According to Vietnam Airlines, one of the conditions for reducing consulting fees is the foreign consultant should establish a joint venture with a local subcontractor to do the assessment of the airline.

The transport ministry said choosing an international consultant through a tender for Vietnam Airlines’ equitization plan was just the first step of this plan and should be in accordance with international practices.

Guidelines provided in Government Decree 85 for the Law on Tender and relevant regulations are still inadequate.

HBC wins US$23 million construction deal

Local construction and real estate corporation Hoa Binh (HBC) has won a US$23 million housing construction contract in HCMC.

The Sanctuary project will cover more than 9,000 square meters in Phuoc Long B Ward in District 9. Owned by CapitaLand and Novaland, the project will provide medium and higher medium products in line with Singapore standards.

The project will have total floor space of 60,000 square meters and 530 apartments which are expected to be ready within 22 months.

Hoa Binh is an experienced building contractor in the country, having developed major projects like Kumho Asiana, Keangnam Hanoi Landmark Tower, Sunrise City, Kenton Residences and the Crescent of Phu My Hung town.

The construction firm late last year also won two major contracts worth a combined VND620 billion.

It has been contracted by Phu My Hung Corp., the developer of a modern town in Saigon South in HCMC's District 7, to build a residential complex. The project includes seven blocks of four to 19 stories.

It is also responsible for building the second training building of RMIT International University Vietnam, or RMIT Vietnam, in the Saigon South Campus.

Last year, HBC became the first domestic contractor to win a bid to build the five-star hotel Le Meridien Saigon in HCMC.

The investor of Le Meridien Saigon, Tien Phuoc & 990 Co. Ltd., will spend US$120 million on the hotel and grade-A office property at 3C Ton Duc Thang Street in District 1, which is scheduled to be up and running in mid-2012. The property will comprise 350 hotel rooms and nearly 14,000 square meters of office space.

Starwood Hotels & Resorts Group will manage the Le Meridien Saigon Hotel. Tien Phuoc & 990 is a joint venture between two local businesses – Tien Phuoc Real Estate Company and 990 Co., a construction, trading and service firm.

HBC’s BDO-audited financial report shows the corporation achieved revenue of over VND1,768 billion last year, a 12% increase from a year ago, and after-tax net profit of VND139 billion, about 46% higher than projected and 189% more than in 2009.

Kumho to change retail area into food emporium

Kumho Asiana Plaza Saigon Company and management firm Colliers International Vietnam announced on Tuesday to totally refurbish the retail area in the five-star InterContinental Asiana Saigon Hotel into a food emporium.

Brad Gee, director of property management for Kumho Asiana Plaza Saigon, told a news briefing at the hotel in downtown HCMC that tenants of the shopping center would move out and that the company would have the 6,800-square-meter retail area redesigned into the Kumho Link food emporium.

The new food and beverage concept will range from fast food outlets, coffee shops and food court. Those facilities will be located on the ground floor, the first floor and roof garden areas where various foods originating in South Korea, Japan, Vietnam and Thailand will be served.

Peter Dinning, managing director of Colliers International Vietnam, said there would be some 20 eateries at the Kumho Link which will be put into service by September this year. The world-famous chef Bobby Chinn has leased 390 square meters to set up his signature restaurant at the Kumho Link.

Talking about the conversion, Gee said the company wanted to differentiate from the competitors, and benefit from the company’s available investment including hotel and office buildings. The success of the food and beverage sector in HCMC is another reason for the company to invest in food services.

According to Colliers, retail space supply in HCMC will grow significantly from the existing 342,000 square meters to some one million square meters by the end of this year, and some 1.4 million square meters by 2014.

The company said some international retailers were looking for business opportunities in Vietnam’s retail market, and that rents would fall in the years to come given abundant retail space supply.

Toshiba set to open 10 service centers through May

Japanese-invested electronics firm Toshiba Vietnam on Monday opened its first service center in District 10, HCMC as part of its plan to launch 10 such facilities in major cities by end-May.

The other nine Toshiba Pro Service centers will be located in Hanoi, Vinh, Hai Duong, Haiphong, Danang, Nha Trang, Can Tho, Long Xuyen and Bien Hoa.

Shinji Terasawa, general director of Toshiba Vietnam, said these service centers would enable Toshiba to improve its customer services.

To mark the inauguration of the center at 310 Le Hong Phong Street, Toshiba Vietnam is offering free maintenance and repair services for Toshiba products.

POS system connected in Danang

The State Bank of Vietnam (SBV) along with 15 commercial banks and three switching companies, Banknetvn, Smartlink and VNBC, on Tuesday announced connection of points of sale (POS) network in Danang.

Vo Minh, director of SBV branch in Danang, said this was part of the central bank’s project to encourage payment without cash in the country and the city joins Hanoi and HCMC in developing the program.

With the successful connection of POS network, cardholders of one of these 15 banks can use their card for payment at 500 POS terminals of other banks.

POS machines are available at restaurants, hotels, commercial centers and supermarkets in the city.

Danang vice chairman Vo Duy Khuong said the POS connection will help modernize electronic payment infrastructure and convenience and payment methods to cardholders. The facility will help Danang develop its tourism services.