Investors target pharmaceuticals
 
Foreign investors are actively buying pharmaceutical shares on the nation's stock markets.

Domesco Medical Import-Export Co (DMC) last week approved the transfer of shares by five existing shareholders to a new foreign investor. Viet Capital Healthcare Fund, KITMC Vietnam Growth Fund 2, KITMC Worldwide Vietnam Fund 2, Dragon Capital Vietnam Mother Fund and Amersham Industries Ltd will sell 6.45 million shares, representing 36 per cent of DMC's total capital, to Chile's CFR International SPA.

DMC general director Huynh Trung Chanh said CFR International was a large pharmaceutical group in Chile with eight factories in 16 countries across South America. As a strategic shareholder in DMC, Chanh said, CFR would support DMC in technology, production and export.

Meanwhile, Singapore-based Pure Heart Value Investment Fund last week bought over 440,000 shares of OPC Pharmaceutical Co (OPC) on the HCMC Stock Exchange, becoming the company's large shareholder with a 5.4-per-cent stake. A company source said the fund wanted to increase its holdings in OPC as it highly evaluated the pharma's stable performance and development potential. The newspaper Dau tu Chung khoan (Securities Investment) also revealed that a Japanese pharmaceutical would likely invest in Cuu Long Pharmaceutical Co (DCL) in the near future, with the aim of becoming a strategic shareholder and directly participating in company management.

Dinh Quang Hoan, director of the financial consulting department of Viet Capital Securities Co, said current moves by foreign investors were understandable since the pharmaceutical sector had long been one of the most attractive sectors for foreign investment, alongside food products and consumer goods.

The relatively small size of Viet Nam's pharmaceutical companies also made them suited to the investment strategies of foreign institutional investors, Hoan added.

Thang Long Securities Co deputy director Pham Thu Trieu also noted that, beginning next year, the nation's WTO commitments would require the pharmaceutical sector to open up further to foreign competition. Therefore, some foreign companies were making exploratory steps by taking over existing domestic companies, Trieu said.

He also attributed the low value of the Vietnamese dong relative to other foreign currencies as a factor driving some foreign companies to move their factories to Viet Nam.

"Whatever the reasons, these foreign investor moves are not coincidental and like it or not, domestic companies should make better preparation for their expansion into the market," Trieu said.

Trade Minister in US on investment search

Vietnamese Minister of Industry and Trade Vu Huy Hoang chaired a conference on investment opportunities in Viet Nam on Thursday in Washington.

At the conference, Hoang highlighted Viet Nam's policies and priorities to attract foreign investment in energy and finance areas. He also witnessed the signing of memoranda of understanding on cooperation between PetroVietnam and McKinsey-&Company.

On the same day, the Vietnamese minister had a working session with Fred P Hochberg, Chairman and President of the Export-Import Bank of the United States (US Exim Bank). They discussed ways to enhance co-operation between Viet Nam‘s Ministry of Industry and Trade and US Exim Bank for bilateral cooperation in industry and trade, thus increasing economic and commercial exchanges between the two countries.

Minister Hoang also toured Honeywell and Tangible companies which operate in aviation and space technology, automation solutions, transport, special materials, and energy and security.

Earlier, on Tuesday, the minister attended the Joint Transportation and Energy Ministerial Conference held by the Asia-Pacific Economic Co-operation (APEC) in San Francisco.

Addressing the public-private roundtable on developing energy-efficient transport systems for livable low-carbon communities, Minister Hoang said to establish energy efficient, low-carbon transportation systems, Viet Nam needed to overcome many challenges such as lacking experiences, proper technologies, expertise and financing. He expressed the hope to co-operate with other APEC member economies in terms of experiences and information exchange, assistance in technology transfer, human resource development, and technical and financial support.

Also at the joint conference, on behalf of the Vietnamese delegation, Deputy Minister of Transport Ngo Thinh Duc addressed the public-private roundtable on greening the supply chain, energy-efficient freight transportation. He called upon international investors and organisations to invest in infratructure and to transfer technologies for developing supply chains during socio-economic development in Viet Nam.

Following the first-ever joint Transportation and Energy Ministerial Conference hosted by US Energy Secretary Steven Chu and Transportation Secretary Ray LaHood, energy and transportation ministers from 21 Asia-Pacific economies promised to make transportation cleaner and more energy efficient.

First oil to enhance nation's energy security

Hoang Long Joint Operating Company held a ceremony yesterday to celebrate the first flow of oil pumped from the Te Giac Trang Oil-field off Ba Ria-Vung Tau Province.

The Te Giac Trang H1 well-head platforms (WHP) pumped the first barrels of oil on August 22 after 12 years of exploration by Hoang Long.

Located some 100km southeast of Vung Tau on Viet Nam's continental shelf, 20km from the Bach Ho Field and 35 km from the Rang Dong Field, Te Giac Trang was discovered in August 2005.

Its commercial exploration was announced in September 2009 after the Te Giac Trang 1X Well was drilled.

"Early production from the Te Giac Trang Field will make a significant contribution to ensuring the country's energy security and attaining revenues for Hoang Long's partners as well as the Viet Nam Oil and Gas Corporation (PetroVietnam)," said Ngo Huu Hai, general manager of Hoang Long JOC.

Hai said Te Giac Trang has been producing 42,800 barrels of crude oil per day.

"Half a million barrels of crude oil valued at US$60 million are being traded from the Armada Te Giac Trang 01 FPSO (floating, production, storage and off-floating vessel) to international clients," Hai said.

He added that Hoang Long would continue to drill other production wells, and fabricate and install the topsides of the H4 WHP which is scheduled to become operational next year.

Hoang Long JOC's partners include PetroVietnam Exploration and Production Corp (PVEP), SOCO of the UK, PTTEP of Thailand and OPECO of the US.

During the First Oil Ceremony, the President awarded Hoang Long with the Labour Order, Third Class.

Operators key to successful hotels

Hotel investors and developers must carefully consider the choice of operators to run their hotels, experts told a conference held in HCM City on Thursday.

Franck Daviniere, managing director of Irving Seminar&Training, told the Viet Nam Hospitality Management Conference 2011 that many investors began work on projects only to discover later that their project may not be feasible in the current market.

It could be due to overestimating revenue projections or room tariffs, or simply executing decisions in the wrong way, leading to loss of time and capital, he said.

A myriad hotel and resort management companies offered partial or full hotel management and operational packages to save investors headaches, he said.

Le Thi Thu Ha, board member of Ninh Van Bay Travel Real Estate Joint Stock Co, said property owners hoped to get advice on technical services in the beginning from hotel operators they partnered with.

The owners also wanted them to draw up a development blueprint, including plans for asset management, SWOT analysis, and challenges in competing with another hotels.

But the relationship could sour because of diffences in goals, objectives and motivations.

There could also be disagreements over sales and marketing expenses and simply because many property owners were not experienced in the hospitality industry.

She suggested ways to align the interests of both sides and build effective relationships.

"While drawing up the hotel's strategic plans, owners should lead the way but the plans should be a joint effort between owners and operators.

"The strategic plans should be evaluated regularly and amended jointly based on changes in the economy and competitive environment."

Staff training was a big challenge, and owners expected to be assisted by the operator.

Patrick Basset, vice president of Accor Viet Nam, Philippines, South Korea and Japan, said the main roles of a hotel management company were to maximise revenue, deliver a robust distribution system, manage human resources, leverage expertise in property management, and deliver and grow the value of the brand.

The company needed to determine pricing strategies and tactics, control inventory, and provide innovative tools and systems.

It should advise and provide guidance on acquisitions, maintenance, design and technical issues in the hotel to ensure that products and services meet the brand's standards and requirements.

Ha compared the two main styles of management currently popular in Viet Nam.

In some cases, owners' families or acquaintances ran the property or a general manager (foreign or Vietnamese) was hired, but the owners directly controlled finances.

In others, especially joint venture and State-owned companies, hoteliers hired a foreign or home-grown hotel management company.

The latter practice delivered higher quality that met regional and international standards.

Petrol prices would have risen without price stabilisation fund
 
The petroleum price must further increase from 2010 if a stabilisation fund was not established, according to the Ministry of Finance (MoF).

The ministry added that without the fund, the petroleum price, which had remained unchanged at Tet holiday (Lunar New Year), ought to have been pushed up by as much as VND700 to VND1,200 per litre.

At the end of February, the petroleum price surged by only VND2,110-3,550 per litre, while the figure was VND3,500-5,850 per litre based on the world price.

From the end of October 2010 until February 2011, the price should have increased four times, equal to the amount of times that companies had made use of the price stabilisation fund.

Thanks to the fund's effectiveness, the ministry plans to draw up a draft focused on regulations for establishing and using such a fund.

In another development, the ministry confirmed that the State Audit of Viet Nam is monitoring the operations of price stabilisation funds at various companies, the MoF and the Ministry of Industry and Trade (MoIT).

The petroleum price stabilisation fund operates on Vietnamese consumer contributions of VND300 per litre.

Wholesale companies are allowed to use the fund in accordance with MoF and MoIT guidance with the aim of stabilising the domestic price.

Similar funds have been set up and effectively operated in many countries around the world.

Vietnam imports 25% more from China

Vietnam’s imports from China in the first eight months of this year were worth US$15.2 billion, up $3 billion year-on year, the General Customs Office reported.

Equipment and machinery was the top import item at $3.3 billion, an 8 percent rise.

Vietnam also imported fabrics worth $1.87 billion, computers worth $1.27 billion, and mobile phones worth $911 million.

In related news, the customs office also said the number of imported cars in August dropped 15.8 percent month-on-month to 3,331 units.

In the first eight months 41,324 vehicles were imported for $730 million, a 29.1 percent increase in volume and 31.6 percent rise in value.

Second-hand car imports declined due to a massive new import tariff since August 15.

Now, vehicles with less than nine seats and of 1,500-2,500 cc capacity also have to pay a tariff of 82 percent and a fixed tax of $5,000.

Cars of more than 2,500 cc will be taxed at 77 percent while the flat tax was $15,000.
 
US official tells Vietnam to diversify exports

Vietnam has to diversify its exports as well as improve design and quality to increase exports to the American market, a top US commerce official told Tuoi Tre.

Suresh Kumar, Assistant Secretary of Commerce and director general for the US and Foreign Commercial Service who is now on a visit to Vietnam, said many things had to be done to strengthen the bilateral trade cooperation.

Considering Vietnam an important market, the US had sent 14 more trade experts to work in its embassy in Hanoi and consulate in Ho Chi Minh City.

Vietnamese businesses should contact them if they had any questions about US technical barriers and import quality regulations.

Quality was the top priority for US importers and Vietnamese exports were acceptable since most of them were able to meet the former’s requirements.

Vietnam’s major exports to the US like textile and garment, furniture, and footwear would continue to increase, but the country should develop strategies to diversify its exports.

For this, Vietnam needed modern machinery and equipment as well as a high-quality workforce, and US businesses were willing to provide support in this regard.

The US was also willing to cooperate with Vietnam to increase the export of fruits as well as enable export of more kinds of fruit.

The US market was always open to other items like textile and garment, frozen shrimp, and children’s toys.

“The most important thing is that Vietnamese exporters should meet all US import requirements.”
Vietnam had attracted many US investors in clean energy such as wind and solar power.

General Electric had contracted to supply 10 wind turbines to wind farms in the Mekong Delta province of Bac Lieu.

“US businesses are also eyeing the fields of high technology, public health, and education.”

In December a delegation with executives from many major US companies would visit Hanoi and Ho Chi Minh City to explore opportunities for cooperation.

“We will focus on business trademarks and franchises.”

Central bank licenses new gold imports

The State Bank of Vietnam yesterday licensed 10 banks and gold trading companies to import a total of four tons of gold.

Saigon Jewelry Co, the country’s largest gold trading company, and Phu Nhuan Jewelry Co were allowed to import 700 kilograms and 500 kilograms of the metal.

The gold is expected to arrive in Vietnam on September 21.

Domestic gold prices fell by VND200,000 (US$10) a tael (37.5 grams, 1.21 troy ounces) following the central bank’s licensing to VND47.05 million.

SJC said Monday sales that day were around 7,000 taels and purchases, only 2,000 taels. PNJ reported sales of 2,500 taels and purchases of 800 taels.

At 6.30 pm Vietnam time Monday, global prices retreated to $1,820 an ounce, or lower than Vietnamese prices by VND1.22 million a tael.

On August 23 the central bank had authorized at least one firm to import gold to bring down the soaring prices, after having allowed an import of five tons in early August.

Honda Vietnam produces 10 millionth motorcycle

 Honda Vietnam has turned out its 10 millionth motorcycle this month 15 years after its arrival in Vietnam.

Honda Vietnam Co. Ltd. was established in 1996 and turned out its first motorcycle in February 1998.

The company has so far contributed over 20,000 billion VND in tax to Vietnam ’s State budget and generated jobs for nearly 8,500 people at the company and thousands of jobs at its satellite companies and shop systems.

When the company’s third plant is put into operation late 2012, Honda Vietnam is expected to provide jobs to a total of over 100,000 people.

Interest-free loans to lure businesses

The HCM City government will offer interest-free loans to local companies doing business in the city, Laos and Cambodia.

With a stimulus package of 8 trillion VND (381 million USD), the city has approved interest-free loans of up to 100 billion VND (4.7 million USD) over a seven-year period.

Representatives of more than 100 companies in the HCM City Enterprises Association attended a conference held Sept. 16 in HCM City to learn about the policy.

Priority will be given to projects related to medicine, education, culture, production and environment.

The city has promoted the use of high technology at hospitals, educational facilities, vocational training schools, theatres, cinema, waste treatment systems, forest plantations and others.

Other projects such as trade investment in Laos and Cambodia, automobile production, food production and others will receive a 50 percent interest rate subsidy.

Pham Linh, deputy general director of Orient Commercial Joint-Stock Bank, said during the conference that he supported companies and will try to help overcome their difficulties.

"I believe the support will contribute to stabilising the economy in the city and the country as well," he added.

Vietnam - an important market for US

Vietnam-US bilateral trade relations are special and Vietnam is an important market to the US, said US Assistant Secretary of Commerce Suresh Kumar, in Ho Chi Minh City, on Sept. 19.

Kumar, who is also Director General of the US and Foreign Commercial Service, said the US-Vietnam trade relations have seen progress. In particular, since a bilateral trade agreement was signed in 2001, two-way trade rose from 2 billion USD to 18.6 billion USD in 2010, he said.

The US is the biggest export market for Vietnam, Kumar said, adding that the US consumes Vietnam’s goods more than any other markets despite being the country’s third-largest trade partner.

Kumar, who is also head of President Obama’s Trade Promotion Agency, reaffirmed one of important strategies in Obama’s National Export Initiative is to focus on trade promotion with top priority markets, including Vietnam.

Vietnam is defined as an important export market for US businesses, but that does not mean that the US wants to reduce Vietnam’s trade surplus with the US to balance bilateral trade, Kumar said.

In order to promote US exports to Vietnam, the key factor is the impetus from Vietnam’s market, he added.

A trade delegation from the US will visit Hanoi and Ho Chi Minh City in December to seek cooperative opportunities with Vietnamese partners, with a focus on business trademarks and franchises, he said.

On a number of difficulties and hindrances that Vietnamese goods and businesses meet when exporting to the US market, Kumar said Vietnamese businesses should contact US trade experts and commercial missions to grasp information on technical barriers and import and goods quality regulations of the US.

The US Commercial Affairs Service is always ready to assist Vietnamese businesses, the US trade official said.

Laos moves to develop IT market

General Director of the ASEAN International Data Group (IDG) Le Thanh Tam has expressed his belief that cooperation between Vietnam and Laos in information technology (IT) will be further promoted.

Addressing an international conference on banking and telecommunications in Vientiane, Laos, on Sept. 17 and 18, Tam said Laos’ IT market will continue rising in coming years in both quantity and quality due to its development in e-government, education, healthcare and e-trade.

Meanwhile, many Vietnamese companies have effectively integrated into world IT markets, he added.

Lao Deputy Minister of Post and Telecommunications Padaphet Sayakhot said Laos now has around 5.4 million mobile phone subscribers, representing 83 percent of the country’s total population.

More than 6,700 hamlets and villages have access to the mobile phone network and the number of rural people with access to the Internet is on the increase, he added.

Laos’ IT service market is expected to post a turnover of 100 – 116 million USD in 2011, a 26 percent year-on-year increase, the conference was told.

Rice exporters start stockpile on possible hike

Many Vietnamese rice exporters have started to stock rice in anticipation of a possible price hike caused by Thailand’s policy to buy its local products at high prices next month, Saigon Tiep Thi newspaper reported.

In Ho Chi Minh City, rice retail prices have been rising by up to VND2,000 a kg during the past few weeks.

“Since early this month, the distributors have been announcing price hikes almost every day,” Hai Khuyen, owner of a rice store in Phu Nhuan District, said.

“The lowest price is now VND11,000 (US$0.5) a kg, up by VND500 compared with early this year,” she said, adding that price of rice with higher quality fetched up to VND22,000 a kg.

Analysts said export prices of Thai rice would climb to $750 a ton from $620 a ton since October 7, when the Thai government began to buy rice from local farmers with higher prices.

Since Thailand is the world’s biggest rice exporter, export price from other countries, including Vietnam, would also change accordingly, they said.

Nguyen Trung Kien, deputy chairman of the Vietnam Food Association (VFA), said the Mekong Delta countries would harvest more than 500,000 hectares of paddy crops towards the end of this year.

In theory, he said, there was always adequate rice supply for domestic market and it was unlikely for the market to have a sudden shortage or price fluctuation.

However, he also admitted that the price adjustment in Thailand would also affect domestic prices.

“Global importers would turn to other markets when Thai rice prices up, which could force prices in Vietnam to soar,” he said.

Therefore, many local rice exporters have stockpiled a large amount of rice in case prices fluctuate.

Khuyen said she had stockpiled enough products to sell in a month.

Meanwhile, Huynh Tin Dung, director of Minh Cat Co Ltd, said the company had spent VND6 billion on a 600-ton stockpile of aromatic rice.

Some other member companies of VFA also have plans to stock rice to meet domestic demand.

Bamboo, rattan exporters turn inward

With domestic demand for environmentally-friendly products rising and exports falling, many Vietnamese bamboo and rattan product exporters are eyeing their home market.

Le Phuc Thinh, director of Saigon Palm Co, said he had realized the potential of the domestic market after receiving orders to supply bamboo products to some resorts in Da Nang and Phan Thiet.

The bamboo furniture and picture frames he had to supply for 60 to 70 rooms added up to much more than an export order.

“I used to think that bamboo and rattan products were only good for exports.

“But now I know that the local demand is promising, and can even fetch bigger profits.”

Nguyen Hoang Tan, director of Anh Tan Cuong Co Ltd, said his firm had changed its business strategy by reducing the share of exports from 90 percent to 60 percent.

It had set up a showroom in Ho Chi Minh City last year to exploit the rising demand from resorts around the country, he said.

“Bamboo and rattan products are the top choice for resorts and restaurants since they prefer environmentally-friendly materials.”

Dang Quoc Hung, deputy chairman of the Handicraft and Wood Industry Association of HCMC, said since there was not much competition in the domestic market, businesses could negotiate better prices than for exports.

But they had to invest more to capture market share, spending money on leasing showrooms and other expenses like marketing and warranty.

Leasing a 100-square-meter showroom in Binh Thanh and Tan Binh Districts could cost VND80 million (US$4,000) a month, and possibly higher in the downtown area, he said.

“Since most of the manufacturers are small or medium-sized, funds were the biggest difficulty for them.

Da Nang advised to attract more MICE
 
The central city of Da Nang should take advantage of its favourable location and conditions for hosting international events, a workshop heard on Sunday.

Local Economic Strategy Institute director Ho Ky Minh said the city had many advantages to develop meetings, incentives, conferences and exhibitions (MICE) hosting.

The advantages included being near three world cultural heritage sites – Hue ancient capital, Hoi An ancient town and My Son sanctuary – and having access by road, rail, sea and air.

"The city also is a gateway to the Central Highlands region and neighbouring countries such as Laos, Cambodia, Thailand and Myanmar on the East-West Economic Corridor," he said.

Le Thi Thu Hanh, deputy director of the Department of Foreign Affairs, said every year municipal authorities welcomed about 100-120 international working delegations, a significant potential for MICE development.

She said the city was becoming known for its ability to host and organise important international events, including the Asia Inter-Parliamentary Organisation, Asia Pacific Economic Co-operation forum and ASEAN meetings.

But participants in the workshop pointed out difficulties in servicing events in Da Nang. The city lacked large-scale convention and exhibition centres, experienced tourism employees and long-term strategies, while facing tense competition in both domestic and regional events markets.

Gilbert Whelan, president of the Viet Nam MICE club, said the country in general and Da Nang in particular had not prioritised and did not have adequate policies to develop events hosting and management.

"It's necessary that hotels, resorts, travel agencies and national carriers join efforts to send a message to potential MICE clients that the city is well-prepared to hosting events," he said.

Vitours Co deputy general director Cao Tri Dung suggested the city open direct flights to important MICE markets, set up a specialised MICE management agency, build professional staff of convention organisers and enhance the quality of human resource for the area.

Furama Resort deputy general director Nguyen Duc Quynh urged the city to take a greater role in tourism associations and organise more media and familiarisation tours to promote the city's image as an attractive destination for MICE.

Vietnam Gold Star honours outstanding businesses

250 trade names have been chosen to enter the final round of the Sao Vang Dat Viet (Vietnam Gold Star) Awards.

The list of selected businesses will be made public on websites www.dntvn.org.vn, www.saovangdatviet.org.vn, www.thanhnien.com.vn and www.thanhgiong.vn.

From September 16-30, the jury will examine carefully to choose the best 200 trade names. In addition, 10 businesses will be honoured for their contributions to the country’s social development.    

The awards ceremony will be held at the My Dinh National Convention Centre in Hanoi on October 15 and broadcast live on Vietnam Television.

Businesses invest in 601 overseas projects

Vietnamese businesses have registered more than US$10 billion for 601 overseas projects so far this year, announced the Department of Foreign Investment.

Most of the projects in 53 countries around the world are focused on energy, oil and gas, electricity, mining, handicrafts, forestry, agriculture, production and communication.

Vietnam exports over 5.5 million tonnes of rice

Vietnam exported 218,896 million tonnes of rice worth US$113 million in the first half of September, raising the total shipments to 5.536 million tonnes and earnings to US$2.638 billion so far this year.

Since early January, rice exports have increased by 9 percent in volume and 23 percent in value compared to last year’s same period.

Currently, the price of rice in the Mekong River Delta hovers around VND6,550-6,600 per kilogram.

Despite difficulties, Vietnam earned US$2.912 billion from its rice exports last year and is expected to fetch US$3.5 billion this year.

Vietnamese group builds hydroelectric power plant in Laos

The Saigon Invest Group of Vietnam (SGI) has engaged in a contract with Laos to develop the Nam Sum hydroelectric power project in the province of Huaphane.

The contract was signed in Vientiane on September 19 by Lao Deputy Minister of Planning and Investment Thongmy Phomvixay and Ngo Tuan Dung, General Director of SGI Lao Hydroelectric JSC, which was set up by the group to pool resources for the implementation of the project.

With a design capacity of 288 MW, the project will be built at an estimated cost of nearly US$450 million.

Scheduled for operation in 2016, the plant will generate 1,000 GWh each year, of which 85 percent will be transmitted to Vietnam and the remainder to local ties in Laos.

As part of Vietnam’s electric development plan for 2011-2012 and the following years, this major project will significantly contribute to meeting power demand in the two countries.

Survey conducted for nuclear power plant

A ship of the Japan-based Kawasaki Geological Survey Company is conducting a marine geological survey to prepare for the construction of the Ninh Thuan 2 nuclear power plant.

The ship M.T.CHOYO will do the survey off the coast of Vinh Hai commune, Ninh Hai district, in the southcentral province of Ninh Thuan, which will accommodate the plant, with an expanded radius of 40 kilometres at sea. The survey is expected to last 43 days.

Ships BP 36-04-01 and BP 36-04-02 of the provincial Border Guard High Command will escort the Japanese vessel.

PV