BUSINESS IN BRIEF 25/6
Highway 1 expansion projects begin
Two Build-Operate-Transfer projects to expand National Highway 1 in Quang Binh and Quang Tri provinces were launched yesterday.
The projects are expected to cost around $97.5 million in total.
Attending the launching ceremony, Deputy Prime Minister Nguyen Xuan Phuc said the projects would be an important motivating force for the provinces and the northern central area to expand trade exchange, investment promotion and socio-economic development and to minimise traffic accidents.
Phuc also asked the Ministry of Transport, investors and contractors to ensure construction quality and progress to meet the project's deadlines, stressing that National Highway 1 running from northern border Lang Son Province to southernmost Ca Mau Province was the country's traffic lifeline.
"It played an important role in socio-economic development, national defence and security and the country's industrialisation and modernisation," he added.
In central Quang Binh Province, around 33km will be expanded with an investment of VND980 billion (nearly US$47 million) by the investor of Truong Thinh Group.
In central Quang Tri Province, more than VND1.067 trillion (around $50.8 million) would be invested to build more than 15.5km of the National Highway section linking Gio Phong Commune of Gio Linh District with Dong Ha Town.
The two projects are expected to be completed by 2015.
On the same day, a project on upgrading National Highway 14C across the Dak Nong Province was kicked off by the Ministry of Transport.
With an investment of more than VND900 billlion (around $42.8 million) from the Asian Commercial Bank (ACB), the project aimed to upgrade and expand 30km of the Highway from Cu Jut to Dac Mi districts in the province. The project is expected to be completed in January 2016.
Realty firms say rules forced them to build large condos
While strong investment in large-sized condos and the lack of mini apartments are blamed as the culprit of the imbalanced condo market, realty project developers said they had to build large apartments due to prevailing regulations.
Speaking at a seminar in HCMC on Monday, Dang Hung Vo, former Deputy Minister of Natural Resources and Environment, pointed out a paradox in the real estate market with overabundance of high-class and large condos while there are not enough small-sized apartments for low-income earners.
One of solutions for the problem is to allow for investors of unsold large condo projects to split up the apartments, offering small-sized projects that fit the pocket of low-income earners. For example, Bao Gia Joint Stock Company has sought approval to split some penthouses of The Flemington project in HCMC’s District 11.
However, real estate companies said that they had to build large condos because of current regulations.
Nguyen Canh Ha, director of An Thien Ly Construction & Services Co. Ltd., said that enterprises did not overlook projects for low-income people to focus on high-class apartments.
“No one makes things that can’t be sold,” Ha said.
However, as per the general planning, each condo is presumed to accommodate four persons with the average housing space target abided by, enterprises have to build large-size apartments.
For a condo building with a total floor space of around 25,000 square meters and 1,000 residents, the investor has to build 250 condos measured at an average 100 square meters each given these regulations. If the investor builds certain 50-square-meter condos in such a project, there must be apartments of 150 square meters each to ensure the number of condos.
As a result, the investor may find it hard to sell large condos.
In fact, there are many condos that just one, two or three persons live in. Therefore, investors at Monday’s seminar suggested that each flat have an average number of only two persons.
Many enterprises also said that the 1:2:1 ratio, meaning 25% of condos being small-sized ones, 50% being medium-sized and 25% being large-sized units, is not suitable to market conditions any longer.
Therefore, such regulations should be removed, and how condos will be built should be driven by market factors, they said.VASEP pursues int’l cooperation to deal with shrimp lawsuits
The Vietnam Association of Seafood Exporters and Producers (VASEP) will coordinate with regional countries to deal with lawsuits related to shrimp anti-dumping and anti-subsidy duties imposed by the U.S.
Speaking in HCMC on Monday, VASEP general secretary Truong Dinh Hoe said the shrimp lawsuits will be discussed at the annual session of the ASEAN Seafood Federation (ASF), which is expected to take place in the city on June 26.
The meeting aims to seek a common voice and cooperation among seafood producing and exporting countries, especially in anti-dumping and anti-subsidy matters.
Last week, a working group of the U.S. Department of Commerce (DOC) launched an inspection into Minh Phu Corporation and Nha Trang Seafoods Joint Stock Company. The two shrimp exporters faced with the anti-subsidy lawsuit are being asked to provide information to two U.S. agencies, DOC and the International Trade Commission (ITC).
DOC on May 30 announced its preliminary decision on anti-subsidy duties on frozen shrimp imported from seven nations including Vietnam. Products from Minh Qui Company, an affiliate of Minh Phu Corporation, are subject to a 5.08% anti-subsidy duty while the rate for Nha Trang Seafood is 7.05%.
According to Nha Trang Seafoods, the investigation group of DOC had reached its farming areas to study and collect information.
Having announced a preliminary decision, DOC always checks enterprises subject to the duties. DOC and ITC operate independently during the investigation.
Last Friday, ITC announced that the U.S shrimp industry has suffered damages due to shrimp imported from Vietnam, China, Ecuador, India, Indonesia, Malaysia and Thailand, saying that the nations have been receiving government subsidies. Its decision has thrown support to DOC’s investigation.
Hoe said that other regional countries have also strongly reacted to the decision and said that they neither receive government subsidies nor cause losses to the U.S. shrimp farming industry. The unanimity of the countries may fetch better results at the final decision expected to be announced on August 13, Hoe said.
DOC announced its initial decision to impose an average anti-subsidy tariff of 6.07% on Vietnamese frozen shrimp, 2.5% upon Thailand, while Indonesia and Ecuador were exempted from duties.
According to ITC and DOC, the U.S. has around 58 enterprises with factories in nine states. In 2011, the nation was estimated to consume nearly 600,000 tons of shrimp which was mostly imported from the seven countries in the lawsuit. Imported shrimp value accounted for 87.6% of the U.S. market.
Latest export, import performances unveiled
The latest data on January-May exports and imports released by the General Department of Customs shows that export value is higher and trade deficit is lower than estimated earlier, the Government reports on its website at chinhphu.vn.
The country’s export value, at US$50.65 billion, is higher than the US$49.94 billion predicted earlier, growing 16.7% compared to the estimated rise of 15.1%.
This is good news as exports have posted larger scale and stronger growth in the context that inventory remains a big bottleneck and global economic movements are seen as unpredictable.
Exports by both local economic sectors and foreign direct investment (FDI) areas saw good growth in the first five months. However, the FDI sector performed far better, registering export growth of 26.3% year-on-year to bring home US$33.54 billion, higher than US$17.11 billion or a year-on-year export growth of only 1.6% contributed by domestic firms.
As such, export value of FDI enterprises nearly doubled that of local economic firms, or 66.2% versus a mere 33.8%.
For many kinds of products, FDI entities even hold a dominant ratio of the country’s total exports, including crude oil with 100%, cameras, movie recorders and accessories 99.6%, mobile phones and components 99.1%, computers, electronic products and components 98.2%, glass and related products 93.4%, vehicles and spare parts 93.1% and other machinery, equipment, tools and components 88.3%.
Multiple key commodities achieved high export growth in the period. Among 40 key products enlisted, 30 items marked higher export value than they had done in the same period in 2012, with certain items experiencing a sharp rise.
For instance, mobile phones and accessories picked up 113.5%, computers, electronic products and components 41.1%, vegetables and fruit 31.3%, bags, wallets, suitcases, hats and umbrellas 22.1% and textile and garment items 17.4%.
Export value of 11 other products, meanwhile, declined. It is noted that a slew of products recorded considerable falls in export revenue, with coffee slipping 20.4%, rice 5.6%, coal 15%, fuel products 39.3%, fertilizers 19.2%, rubber 24%, cameras and video recorders and accessories 30%, seafood 1.5% and other machinery, equipment, tools and components 1.7%.
Among roughly 80 export markets, 14 nations contributed US$1 billion or more from January to May, with the U.S. as Vietnam’s biggest importer with US$8.85 billion, followed by Japan with US$5.29 billion, China US$4.95 billion, Singapore US$1.04 billion and India US$1.02 billion.
The latest report indicates that the trade deficit in May only stayed at US$548 million, taking the five-month value to a combined US$1.2 billion compared to about US$1.92 billion forecast for the five first months. Therefore, pressure on trade balance has been eased, lessening pressure on foreign exchange rate as well.
Vietnam to benefit greatly from RCEP, say experts
Vietnamese enterprises will enjoy many benefits from the Regional Comprehensive Economic Partnership (RCEP) between 10 ASEAN nations and six partners, namely Australia, China, India, Japan, New Zealand and South Korea, Japanese experts said.
Speaking at a seminar on free trade agreements (FTA) organized by the Japan External Trade Organization (JETRO) in HCMC on Monday, Kazunobu Hayakawa of JETRO’s Bangkok Research Center said that it is complicated to make use of FTA incentives within the ASEAN region.
For example, enterprises must spend a lot of money and efforts to meet rules of origin that demand products to have ASEAN value content of 40% or more, he said.
Meanwhile, RCEP, a single FTA with standardized rules of origin, will help enterprises reduce costs in implementing these rules.
Besides, as RCEP regulates common incentives, enterprises have no need to check the incentive list for each country. Therefore, both large and small enterprises are able to make use of tax incentives, Hayakawa said.
Kohei Shiino, deputy director of JETRO Singapore, said that RCEP will bring about big advantages for Vietnam’s garment and textile industry.
Currently, to enjoy tax incentives of the ASEAN-Japan FTA, materials of Vietnam-made apparel products exported to Japan must have ASEAN and Japan origins. Meanwhile, over 33% of Vietnam’s apparel materials are imported from China.
Therefore, RCEP will bring about tax incentives for materials Vietnam import from China, Shiino said.
According to the General Department of Customs, Vietnam’s apparel and footwear material import value hit over US$4.3 billion in the first four months of this year, up 15.5% compared to 2012. The nation imported a large volume from China with total value of US$1.55 billion, a 26.4% year-on-year increase.
The first negotiation round for establishment of RCEP took place from May 9-13 in Brunei. The second round is expected to take place in Australia from September 23-27. All RCEP negotiation rounds are expected for completion in 2015.
RCEP negotiations cover some sectors such as goods (tax exemptions and reduction, rules of origins), services and investment.
Computer market bounces back: IDC
The local computer market in the first quarter posted growth compared to the same period in 2012 although concerns about rising inventory are still out there, the market research firm IDC reports.
IDC Vietnam in a report released on Monday said that nearly 500,000 computers were sold in the first quarter this year, shrinking 20% against the fourth quarter in 2012 but still growing 13% year-on-year.
Phan Thi Hoang Yen, market analyst at IDC Vietnam, ascribed the sale growth to the fact that suppliers and retailers have changed their strategies to focus on middle- and low-end products in an effort to boost sales of personal computers that are facing tough competition from smart phones and tablets.
Yen noticed computer makers and retailers have still been under huge pressure from shrinking investment in information technology among small- and medium-sized enterprises. Nevertheless, she remarked, the Government’s acquisition projects have helped the commercial segment of the computer market register growth of 8% year-on-year.
Daniel Pang, manager at IDC’s Asia/Pacific Client Devices Research team, meanwhile, said Vietnam’s computer suppliers have just spent a tough year for business. The signals of governmental reforms and new policies might help recover spending on information technology while public spending is also forecast to rebound in the second half of 2013.
Despite concerns over the long-term market stability, IDC expects the local computer market to grow 5% in 2013.
* Contrary to judgments of analysts that the development of smartphones will hinder the camera market’s growth, retailers say that cameras will still sell well thanks to good price strategies.
According to a report of the Ministry of Industry and Trade’s information center, the import of cameras in the year’s first four months reached 132,900 units with a value of US$26.64 million, increasing by 6.2% in number and 72.4% in value year-on-year. Besides, digital cameras priced under US$100 accounted for half of the market.
Nick Yoshida, chairman and CEO of Canon Marketing Vietnam, said that the sale of cameras was still high. Canon’s revenues grew by 25% last year and is expected to rise higher this year, he added.
Canon opened two direct retail stores in Hanoi and HCMC last year and plans to open 20 more stores from now until 2014.
Retailers also said Vietnam’s camera market is growing well.
Dinh Anh Huan, sales manager of Dienmay.com, said that the high camera sales recorded since the year’s beginning resulted from several promotion programs.
While low-cost digital cameras priced under US$100 sell strongly, the sale of high-end cameras having high image quality and priced at US$300-700 is slower.
To continue stimulating the buying power, retailers such as Nguyen Kim, Thien Hoa, Cho Lon and Phong Vu are providing many special offers for customers such as payment in installments with no interest in six months or giving valuable gifts.
Power cable for Phu Quoc to get rolling next year
A sea-crossing cable line from mainland Kien Giang Province to Phu Quoc Island will be installed in the seabed next March, and electricity will be transmitted to the tourism-rich island next July, the power supplier said on Monday.
Nguyen Thanh Duy, general director of the Southern Power Corporation under Electricity of Vietnam (EVN EPC) told local reporters that the special cable line is being manufactured by the Italian contractor.
“Prysmian Powerlink S.r.I will complete manufacturing the 55.8-km power cable, and will transport it to Vietnam next March for installation,” he said.
Phu Quoc Island, where numerous tourism projects are under progress, has so far relied on local diesel turbines with the combined output of only 20MW, and it therefore constantly faces a severe shortage of electricity. Many areas on the island often suffer from outages due to the problem.
The power shortage has hindered tourism development on the island, which is also known for fisheries.
In 2007, the Ministry of Industry and Trade asked Electricity of Vietnam to implement a 110KV sea-crossing cable line from Ha Tien in Kien Giang to Phu Quoc. The project requires an estimated cost of VND2.4 trillion, or over US$110 million, with the cable line alone costing VND1.98 trillion.
At the meeting on Monday, Duy of EVN EPC also revealed projects to be deployed to upgrade the southern power grid. These are the 220KV transformer station in Dong Thap Province’s Sa Dec Town, a similar station in Long An Province’s Can Duoc, and another one in Kien Giang’s Long Xuyen.
These three transformer stations cost some VND1 trillion, and work will start next year for completion in 2015, Duy said.
Fraudulent ads run rampant on TV
The Vietnam Competition Authority under the Ministry of Industry and Trade has given warnings about the explosion in fake and exaggerated TV shopping adverts.
Almost every channel have their own section for adverts and shopping that offer a vast number of products and price ranges.
For example, caterpillar fungus was promoted on SCTV5 Channel as a cure to illnesses such as back pain or impotency. However, doctors at HCM City Hospital of Traditional Medicine said caterpillar fungus was only used as a kind of supplementary medicine.
Experts said though the whole product only have some small quality substances, firms will still take advantage of that small percentage to promote for their product.
Many customers have not done research about the product because they are overwhelmed by the magical claims, attractive prices and convenient customer care. As a result, many people have bought overpriced and low-quality products.
Customers have filed complaints about bad service including frauds where companies took the deposits without providing the bought product.
A VND170,000 piece of massage equipment was said to have been worth VND2 million. Some mobile phone companies said they only sell online and refuse to let customers check product beforehand.
After receiving the complaints, the Competition Authority warned customers to be more cautious with TV shopping and carried out several inspections, especially at suspected mobile phone companies.
HCM City’s June CPI increases slightly
Ho Chi Minh City’s consumer price index (CPI) in June went up by 0.12 percent over last month’s figure and 2.78 percent compared with that of one year ago.
According to the municipal Statistical Office, culture-entertainment-tourism services saw the highest price rise of 0.57 percent, followed by restaurant services with 0.33 percent.
Slight increases were seen in prices of beverage and cigarette, up by 0.27 percent; and garment and textiles-headwear-footwear, 0.26 percent.
Household appliances, educational products, medicines and healthcare services did not experience any price hike.
Commodity groups that saw price decreases included housing-electricity-fuel and construction materials, post and telecommunications and transport services.
During the month, the gold price dropped by 0.06 percent while the US dollar price rose slightly by 0.02 percent against May.
Vietnam - ADB’s key partner
Vietnam is one of the pro-active members and important partners of the Asian Development Bank (ADB), ADB Vice President Bruce Davis has said.
At a June 21 meeting with Deputy Governor of the State Bank of Vietnam (SBV) Le Minh Hung in Hanoi, Bruce Davis said his bank is committed to supporting Vietnam in maintaining macroeconomic stability, stimulating economic growth, reducing poverty, developing infrastructure facilities, boosting regional cooperation and copying with climate change.
Hung spoke highly of the cooperation and support the ADB has given to Vietnam over the years, especially in policy consultation, experience sharing and financial assistance.
The bank’s support strategy is in line with Vietnam’s plan for socio-economic development. ADB-funded programmes and projects have significantly contributed to implementing the country’s socio-economic targets and improving people’s living standards, the SBV official said.
The ADB’s support has helped Vietnam overcome difficulties and challenges in order to lay a foundation for ensuring sustainable growth in the time to come, he added.
Hung said he hopes the bank will continue to assist Vietnam in various fields including finance and banking, adding that the SBV is coordinating with ministries and sectors to speed up the disbursement of capital for projects and use ADB loans effectively.
Programme boosts Vietnam’s handicraft development
The “Joint Programme on Green Production and Trade to Increase Income and Employment Opportunities for Rural Poor” has actively contributed to the development of Vietnam’s handicrafts and raised rural people’s income.
The outcomes were released at a recent conference to review the three-year implementation of the programme, financed by the Spanish Millennium Development Goals Achievement Fund, which was launched in February 2010.
The US$4.1 million programme is part of a series of programmes launched by the UN Millennium Development Goals Achievement Fund.
It aims to develop better integrated, pro-poor and environmentally sustainable “green” value chains, enabling poor farmers, collectors and producers to improve their products and connect to more profitable markets.
The targeted sector is handicrafts and light furniture, focusing on four value chains, including bamboo, rattan and sericulture; sea grass; lacquer ware; and handmade paper.
The programme targets about 4,500 poor households in Phu Tho and Hoa Binh in the north and the central provinces of Thanh Hoa and Nghe An, which are home to 11 of the 31 poorest districts in Vietnam.
Tran Tuan Anh, Deputy Minister of Industry and Trade, underlined the programme’s remarkable achievements and its significance to poverty reduction in Vietnam.
The Vietnamese Government is devising policies aiming to raise people’s income, generate more jobs, combine production with environmental protection and increase value chains, he said.
According to UN Resident Coordinator Prathiba Metha, the programme has significantly contributed to Vietnam ’s realisation of the millennium development goals of poverty reduction, gender equality and environmental protection.
This is one of 28 joint programmes financed by the Spanish Millennium Development Goals Achievement Fund, the Spanish Ambassador said, highlighting the programme’s contribution to Vietnam’s handicrafts.
Delegates at the conference agreed that the lessons learnt from the programme will be replicated for sustainable development.
ODA-funded transport projects under review
The Vietnamese Government will direct relevant ministries, agencies and localities to speed up the implementation and disbursement of capital for Official Development Assistance (ODA) funded transportation projects.
Deputy PM Hoang Trung Hai delivered the statement at a June 21 meeting in Hanoi to review the performance of ODA transport projects funded by the World Bank (WB) and the Asian Development Bank (ADB).
He proposed two concrete solutions to improve these projects: prioritizing the disbursement of capital for critically important projects and restructuring existing projects for more effective implementation.
The meeting came at a time when key ODA-funded transport projects are reported to be falling behind schedule, which has triggered more difficulties in disbursing capital as input prices have increased, according to WB and ADB representatives.
The Ministry of Planning and Investment, which organized the meeting, suggested that the Ministry of Transport takes a closer look at existing projects and adjust the capital allocation as appropriate to their scale.
Governing bodies and project management units should also coordinate with sponsors to design effective action plans, the Ministry added.
Transport plays a pivotal role in enhancing Vietnam’s competitiveness. Currently, 40 percent of ADB and 18 percent of WB total ODA for Vietnam goes to transport projects.
Vietnam, Italy sign aviation agreement
The Vietnamese and Italian Governments have signed an air transport agreement with a view to promoting flights between and through the two nations’ territories.
The document was signed on June 21 by Deputy Minister of Transport Pham Quy Tieu and Italian Deputy Foreign Minister Bruno Archi at the Italian Ministry of Foreign Affairs headquarters in Rome.
The 20 article agreement stipulates the rights and responsibilities of concerned parties in line with the laws of their respective countries and the Convention on International Civil Aviation.
These articles regulate transport rights, aviation safety and security, air schedules, tariffs, transport fees and formalities on granting licenses and certificates.
Addressing the signing ceremony, the Italian Deputy FM said that the signing of the agreement will provide a good foundation for the two countries to carry out specific steps in the aviation field that will help promote economic cooperation on a par with their traditional friendship.
Senior leaders have met many times recently and Party leader Nguyen Phu Trong’s visit to Italy earlier this year offered a new opportunity for both nations to increase bilateral cooperation.
The newly-signed agreement is evidence of closer relations between the two nations, the Italian diplomat said, adding that he is scheduled to visit Vietnam next month along with a business delegation.
Deputy Minister Tieu praised the continual development of bilateral relations over the years, particularly in 2013 when high-ranking leaders agreed to upgrade the two countries’ bilateral ties to a strategic partnership.
This is an important document for moving towards concretizing cooperation statements, with the main focus on economic cooperation. Promoting aviation connections with Italy, the third largest EU economy, will also open up many opportunities for Vietnam to develop into a modern industrialised nation by 2020, Tieu said.
Italy ranks the fifth among EU countries in terms of arrivals in Vietnam and the number is expected to increase sharply when the above mentioned agreement takes effect.
Tieu said that he hopes the two sides will also seek opportunities for maritime cooperation during the Italian Deputy FM’s visit next month.
Vietnam will send a delegation to Italy to research the possibility of signing a cooperation agreement in this field soon, he noted.
Prior to the aviation agreement signing, the two officials discussed the areas of their countries’ strengths and agreed that promoting bilateral aviation and maritime cooperation will foster favourable conditions for both nations to boost economic development, trade and investment.
Central coastal region strengthens international connectivity
Representatives from localities and the diplomatic corps met for a June 22 conference in the ancient town of Hoi An city in Quang Nam province to discuss ways to develop international tourism and boost cooperation towards sustainable green growth.
The attendees also included ambassadors, consul generals and representatives from foreign organizations and nine provinces in the coastal central region.
Delegates shared practical experiences and strategic orientations in socio-economic development and environmental protection, and discussed developing and effectively utilizing human resources.
Vietnam is a nation with an abundant supply of hard working, low cost labor. However, in order to meet international standards, localities and international cooperation organizations should coordinate closely to develop, train, manage and employ laborers effectively, they emphasized.
The Vietnamese economy is facing difficulties in the current economic downturn and sustainable socio-economic development is now a top priority of most localities.
To achieve this target, localities should review their socio-economic plans, identify key projects, seize opportunities and access foreign resources.
Deputy Minister of Foreign Affairs Nguyen Phuong Nga, said that the central coastal region has great potential for economic development and the conference offers provinces and cities in the region the opportunity to share experiences and promote Vietnam’s image to international friends.
Moroccan ambassador to Vietnam El Houcine Fardani noted that Quang Nam has numerous cultural heritage sites such as the My Son sanctuary, Hoi An ancient town and the Cu Lao Cham Biosphere Reserve that have become internationally known through various festivals.
This will help localities to share experiences and seek investment and cooperation from international organizations to boost their economies in the context of international integration.
Hong Kong Group invests US$200 million in garment project
The TAL Group from Hong Kong plans to invest US$200 million to produce fabrics, garments and textiles in Vietnam.
This is the second project of its kind in Vietnam.
During a recent working session in Hanoi with Deputy Minister of Planning and Investment (MPI), Cao Viet Sinh, TAL Hong Kong Development Director Roger Lee said that his group wants to expand its investments in Vietnam with a US$200 million project to manufacture fabrics, garments and textiles.
The products will be produced using modern technologies that do not cause pollution and the company will ensure environment standards, he said
Lee said that the group will also work on the project with representatives from the Vietnam National Garment and Textile Group (Vinatex) and the Ministry of Industry and Trade (MoIT).
The MPI is willing to support and create favourable conditions for TAL to expand investment in Vietnam and has assigned the Foreign Investment Agency to contact TAL on supporting the progress of the project, said Deputy Minister Sinh.
Dung Quat produces over 3 million tonnes in six months
The Dung Quat Oil Refinery has sold more than 3.1 million tonnes of products in the last six months, surpassing its set target for revenues and State budget.
Nguyen Hoai Giang, President of the Dung Quat Oil Refinery member council of Binh Son Refining and Petrochemical Company (BSR) said that in addition to fulfilling business and production targets, BSR is restructuring its company and seeking partners that will buy shares as a joint-venture.
It is also formulating a project to build the Dung Quat Hospital, Dung Quat Packaging factory and Dung Quat bio-fuel Factory.
To fulfill its production plan for 2013, BSR will focus on managing and operating the factory safely and stably, and optimizing the production process to improve efficiency.
To increase the efficiency of the Dung Quat Oil Refinery, the company will continue processing crude oil from various sources to replace oil from the Bach Ho field, upgrade and expand the factory as scheduled, and apply standard systems, as well as practicing thrift and combating wastefulness.
This year, the factory is expected to make a profit of VND2,100 billion and maintain stable operations.
Seminar discusses green growth for Quang Nam
The Investment Forum towards Green Growth for central Quang Nam province, co-organised by the provincial People’s Committee, the UN Human Settlements Program (UN-Habitat) and the Global Green Growth Institute (GGGI), took place in the province on June 23.
The first event of its kind in Quang Nam aims to promote initiatives and green growth strategies in association with other provinces in the region.
It also introduced investment opportunities to donors, development agencies and potential investors specializing in developing green cities and industries and eco-tourism.
Under the national strategy on green growth for the 2011-2020 period, with a vision to 2050, Quang Nam has implemented a project as part of its development strategy with a focus on local economic growth, environmental and natural resources management and climate change adaptation.
One of the province’s priorities is to promote the eco-city and green city models for Hoi An and Tam Ky and upgrade infrastructure and develop green industries and eco-tourism in line with preserving its cultural heritage and eco-systems.
To create an economic development strategy towards green growth, National Assembly Vice Chairman Huynh Ngoc Son suggested Quang Nam should speed up administrative reforms, educate the public about a green economy, and create a favourable investment environment for economic sectors.
Most importantly, economic development should align with promoting the efficient use of natural resources, protecting the environment and ensuring social equality.
It will also require the great determination of the Party, local authorities and the people to open up cooperative opportunities for sustainable development.
Delegates, through the forum, learnt about international models for urbanization and managing natural resources towards green growth that could be applied in the province.
Quang Ninh promotes trade, investment with Indonesia
A high-ranking delegation from northern Quang Ninh province paid a visit to Indonesia on June 19-20 to seek trade and investment cooperation opportunities with local partners.
During the visit, the delegation had a working session with the Batam Free Trade Zone Management Agency in the island province of Riau to study its development policies.
The QuangNinh officials also met with leaders of Indofood, the largest food corporation in Indonesia with annual revenues of more than US$5 billion, to learn about its potential, products and investment and market expansion strategy in Southeast Asian countries, including Vietnam.
At the meeting, Secretary of the Quang Ninh provincial Party Committee Pham Minh Chinh highlighted his locality’s strengths on trade and investment cooperation, noting that Quang Ninh is a centre for mineral exploitation, a leading tourist destination in Vietnam, and an important gateway for good trading between ASEAN countries and China.
The Indofood leaders praised cooperation potential with Quang Ninh in particular and Vietnam in general, affirming that the corporation considers Vietnam one of its strategic markets in Southeast Asia which serves as a gateway for its products to penetrate China’s southern provinces.
As part of the visit, the Quang Ninh delegation also worked with Indonesia’s National Committee for Special Economic Zone (SEZ) to seek ways to develop SEZs.
The two sides discussed interests that SEZs can bring about, difficulties, barriers and risks during the establishment and operation of SEZs as well as some emerging issues in SEZ development.
It also studied the Indonesian Government’s policies and experience in developing SEZs, economic and industrial zones, hi-tech parks and free trade areas.
Harmful insecticide in Chinese potato in guise of Da Lat home-grown variety
On June 22, food inspectors from Da Lat City raided potato storage facilities in Da Lat Farm Produce Market and Trai Mat area in Ward 11 and caught red-handed crooked sellers washing and coating Chinese potatoes with red soil to disguise them as Da Lat home-grown potatoes.
Some facilities were also using machines of 150 kilogram capacity to remove black dirt off Chinese potatoes.
According to receipts presented by traders, the consignments of Chinese potatoes were bought at VND3,344 per kilogram and sold to smaller traders for VND10,000 per kilo. Once these are wrapped in red soil they sell for more than VND20,000 per kilo.
This deception has been going on for years, but authorities seem powerless to prevent it because there is no law or regulation that bans traders from dyeing potatoes with red soil. Hence authorities barely check or slap penalties on potato consignments found with excess insecticides.
Traders wrap red soil on Chinese potatoes to disguise them as Da Lat home-grown variety. (Photo: SGGP)
However, according to a quick test done by Lam Dong Plant Protection Department, all potato samples collected at Da Lat Farm Produce Market contained harmful Chlorpyrifos insecticide.
Earlier, on June 15, authorities destroyed 26 tons of poor quality potatoes brought in from China and sold as Da Lat grown potatoes, as they were found exceeding permissible limits of Chlopyrifos pesticide by 16 times.
Excessive doses of Chlorpyrifos can lead to lung cancer and affect a baby’s health if consumed by pregnant women.
CPI rebounds in Hanoi, HCMC
The Statistics Office in Ho Chi Minh City recently announced that the Consumer Price Index (CPI) in June rebounded after dropping for three consecutive months, rising 0.12 percent over last month, 0.78 percent compared to December last year, and 2.78 percent year-on-year.
Generally, four commodity groups saw an increase in price, four saw a decline, while three were unchanged compared to the previous month. However, an increase in price this month, contributed mostly by restaurants and catering services with 0.33 percent, foods with 0.43 percent, and eating out with 0.4 percent.
This month, gold price index fell 2.06 percent while the US dollar index inched up 0.02 percent compared to the previous month.
Meanwhile, Hanoi CPI in June surged 0.08 percent compared to last month, snapping losing trend of the past three months, showing an increase of 1.74 percent over December last year, and 5.43 percent year-on-year.
Hanoi CPI increased as losing momentum in food and foodstuffs weakened while prices of other commodity groups soared slightly. Among 11 commodity groups, only transport saw a decline of 0.22 percent compared to last month.
This month, gold price index continued to plunge by 3.93 percent, whereas the US dollar index climbed 0.34 percent over last month.
With these results, the country’s CPI is expected to rebound to below 0.1 percent.
Three shipping lines form network
Three major shipping lines – Maersk Line, MSC and CMA CGM – have agreed to set up an alliance to run services on Asia-Europe, trans-Pacific and trans-Atlantic routes called P3 Network.
The establishment of this network will help quicken goods transport between ports in Vietnam and those in other countries as enterprises can choose vessels of any lines within the network.
According to Maersk Line in Vietnam, P3 Network will initially have 255 vessels on 29 loops with a total capacity of 2.6 million TEUs.
Maersk Line will contribute 42% of the total capacity, equivalent to 1.1 million TEUs. Meanwhile, MSC will contribute some 34% (0.9 million TEUs) and the rest will be taken up by CMA CGM (0.6 million TEUs).
P3 Network will be operated independently by a joint vessel operating center.
Regarding sales, marketing and customer service, the three routes will continue to have their own activities.
P3 Network is expected to be operational in next year’s second quarter, but the exact start date depends on the approval of the sides involved and management agencies. The contract signing between the three sides is scheduled for the fourth quarter.
In addition to faster goods transport, the alliance will provide more services a week than those supplied individually by each line. The P3 Network will offer an estimated eight weekly services between Asia and North Europe.
Moreover, enterprises can reduce damages in case of cancelled trips and do not have to face many transits as the P3 Network has many vessels make direct port calls.
German ambassador projects high ODA for Vietnam
Germany’s official development assistance (ODA) for Vietnam in the next two years will likely be the same as in 2012-2013 at 289 million euros, said Jutta Frasch, German ambassador to Vietnam.
Speaking during her three-day field trip to Germany-funded projects in Vietnam on Thursday, the German diplomat said the success of projects in Vietnam would result in a continued flow of high ODA for Vietnam.
It is not until July that the two governments will meet to discuss the cooperation programs for the next two years, but given the success of projects funded by Germany’s ODA in southern localities, Germany will maintain its ODA for Vietnam, she said.
Her field trip was aimed to evaluate the success of Germany-funded projects in the country, including the salinity-intruded forest conservation project worth 8.6 million euros in Bac Lieu and Soc Trang.
The ambassador also attended the inauguration of the wastewater treatment plant in Soc Trang, where Germany has funded 5.1 million euros. She also visited the vocational training college Lilama 2 in Dong Nai Province, which has received 16 million euros from Germany.
Lazada.vn gets US$100 mil. extra investment
The e-commerce group Lazada on Thursday informed it had received an additional investment of US$100 million from investors for business development in Vietnam and South East Asia.
Belgium’s Verlinvest Company as the new investor of Lazada, and existing investors Holtzbrinck Ventures, Kinnevik, Summit Partners and Tengelmann Group have pledged to pour an additional US$100 million into the firm to develop e-commerce services in Vietnam and South East Asia.
With the huge fresh investment, Lazada said it would speed up delivery time and optimize technological infrastructure to improve its services in the near future.
The entity has already launched a mobile application making customers’ shopping more convenient with smart phones. The application now runs well on Android operating system, with another version for iOS set to be introduced to local customers soon.
Lazada has been running the e-commerce website Lazada.vn in Vietnam in line with the business-to-customer (B2C) model since last year’s February.
The fast-growing e-commerce market in Vietnam over the past time has been the result of the complete Internet infrastructure and the increasing members of tablet computer and smartphone users at home, said Christopher B. Beselin, managing director of Lazada.vn.
However, Beselin said, this is still a nascent market as online sales here are facing a lot of hindrances such as lack of online payment channels and of professional logistics systems. Besides, the biggest challenge is that local buyers are already used to shopping by seeing and checking products by themselves, Beselin told the Daily.
Lazada, which was founded by Rocket Internet, a group specializing in investing in Internet services in Germany, has been present in Indonesia, Malaysia, the Philippines, Thailand and Vietnam.
Hoa Sen borrows VND2.5 tril. from VietinBank
Hoa Sen Group (HSG) on Thursday signed a cooperation agreement with Vietnam Bank for Industry and Trade (VietinBank) to take out a total credit limit of VND2.5 trillion.
Of this credit limit, there will be VND737 billion worth of medium to long-term credits for the enterprise to invest in two cold-rolled steel production lines with designed capacity of 200,000 tons a year each and a steel sheet production line with the annual capacity of 400,000 sheets. The enterprise will also use this fund to supplement capital for other business activities.
Short-term loans will bear an interest rate of 8% per annum while that of long-term credits will be 11% per annum.
Le Phuoc Vu, chairman of Hoa Sen Group, said the enterprise has exported its products to many countries in Southeast Asia.
In the first eight months of its fiscal year 2012-2013, the group obtained VND513.3 billion in after-tax profit with over 383,000 tons of products sold, raising its market share in Vietnam to 42%. Cooperation with VietinBank will help the enterprise reach revenue of US$1 billion and expand its business in the future, Vu said.