BUSINESS IN BRIEF 2/6
Petition filed against steel dumping
Two local steelmakers have submitted a petition to the Vietnam Competition Authority saying imported cold-rolled stainless steel is being dumped on the local market.
The authority under the Ministry of Industry and Trade on May 6 received the petition from Posco VST Company Limited and Hoa Binh Inox Joint Stock Company. The local steel firms propose an anti-dumping investigation into steel imports from China, Taiwan, Malaysia and Indonesia.
According to Ordinance 20/2004/PL-UBTVQH11, the Minister of Industry and Trade will decide whether an anti-dumping investigation would be launched or not within 60 days after a petition is received.
This is the third time local producers have filed a petition against imported products. The two previous cases were brought against float glass and vegetable oil imports.
Most stainless steel items enjoy a zero import tariff. Only stainless steel with a circular cross-section is subject to a 10% duty, according to Circular 193 dated November 15, 2012 of the Ministry of Finance.
In October last year, the finance ministry brought forward the amended version of Circular 157 dated November 14, 2011, with the duty on cold-rolled stainless steel imports raised from 5% to 7%. Such an adjustment was made after Posco VST, the largest cold-rolled stainless steel producer in Vietnam, had complained about poor sales.
The company had been struggling to maintain the most competitive prices for its products as imported products were levied a tariff of only 5%. Although the tariff on stainless steel was increased from 0% to 5% on January 1, 2012, the import volume in the first five months of the year only dropped 11.62% year-on-year.
Binh Dinh to set up advisory group for oil refinery plan
The central province of Binh Dinh plans to set up a consulting group for the US$27-billion oil refinery project in Nhon Hoi Economic Zone proposed by Thai firm PTT.
This is one of the major contents in Document 1839/UBND-KTN issued by Binh Dinh Province’s government at the Prime Minister’s request.
The tentative consulting group should comprise representatives of the central development research fund, Bank for Investment and Development of Vietnam (BIDV), economists and former oil business executives. The economic zone management authority of Binh Dinh is assigned to work with the provincial Department for Foreign Affairs on the consulting group’s establishment.
As per the document, the local authorities ask the management authority to consider their proposal to ask PTT to map out the investment plan as required.
The foreign affairs department is told by the local government to propose contents for the document to be sent to PTT, including the content of Dispatch 652/TTg-KTN issued by the Prime Minister on May 10, 2013. The Government in the document requests PTT to clarify a number of contents in the investment report and draft invitations to call for organizations and individuals to join the consulting group.
Binh Dinh vice chairman Ho Quoc Dung earlier said Deputy Prime Minister Hoang Trung Hai had signed a document allowing for the deployment of the oil refinery project in Nhon Hoi.
Dung deemed this as the important step to officially affirm the project’s feasibility.
The Government in the document tells Binh Dinh to request PTT to draft the investment plan and submit it to the Ministry of Industry and Trade before transferring it to the Prime Minister for approval. The province is also told to help the Thai investor submit an environmental impact assessment report to the Ministry of Natural Resources and Environment.
The project owner will spend 12 months drawing up the tender invitation document, five months calling for bidders and six months considering the bidding results while the feasibility study and other procedures on investment preparations should be completed later.
Nhon Hoi oil refinery plant, which is expected to start construction in 2016 and commercial production in 2019, will be developed on 2,000 hectares with a designed capacity of 660,000 barrels a day.
The plant will import some 45% of crude oil from the Middle East, 25% from Africa and the remainder from South and Central America, with its products for domestic sale and export.
SOEs pose threats for domestic economy
A report from the NA's Economic Committee on public debt has raised grave concerns over state-owned enterprises (SOEs) showing poor business performance.
Since 2010, the laws has stated that debts incurred by state-owned enterprises are not the responsibility of the government. However, in fact, many SOE's that have suffered losses have received financial support from the government.
In 2010, SOEs' foreign debts guaranteed by the government accounted for 14.3% of the country's total foreign debts.
When Vietnam began economic reform in 1986, over 50% of banking resources went to state-owned sector. Though the rate has gone down in recent years, it is still around 30%.
The financial advantages enjoyed by SOEs also means that they are more highly leveraged than other firms. The ratio of debt to equity in the SOEs in 2009 was 2.52, 1.78 times higher than private firms and 1.39 times higher than FDI companies.
The report also showed that government backed SOEs during difficulties, taking over the huge debts.
For example, Vinashin's debts reached VND86 trillion (USD4.1 million), but the company was rescued with various support and stimulus packages.
In 2010, the Ministry of Construction also asked the Ministry of Finance to save several member companies under Song Da Group, who had hundreds of billions of VND in foreign debts.
According to many, SOEs are one of main causes for the state budget deficit, and to set off the deficit the state resorted to issuing bonds and increasing the public debt.
Meanwhile, the state-owned sector has not shown any improvement, with many enterprises seemingly going the way of Vinashin and Vinalines.
Authorities consider policy for property insurance contracts
The Ministry of Construction is considering the implementation of property insurance contracts so customers who have made payment for unfinished homes would be compensated if investors go bankrupt.
Real estate companies have encountered troubles stemming from high inventories as well as lack of customers and capital.
Another problem the sector has seen is investors who gather capital for housing projects but use the funds for other business ventures. In some cases the projects were discovered to be illegal and the investors fled, leaving customers with no apartment and no way to recoup their investment.
In the last three years lawsuits and accusations have increased across the country, with hundreds of strikes held, some outside the offices of the Ministry of Construction.
A representative of the Vietnam Real Estate Association said, "There are families that have fallen apart because the husband poured all the family's money into an incomplete apartment project that did not materialise."
At a conference addressing housing and real estate law in Hanoi, deputy minister of construction, Nguyen Tran Nam, said, "It seems like there is a misunderstanding of the difference between capital mobilisation and contract payment. Vietnamese people rarely consult lawyers and the court is ill-equipped in dealing with these matters, which leaves the government as the de facto arbitrator in many cases."
The Ministry of Construction said they are studying the ways in which South Korea applies insurance policies for contracts for the sales of apartments. The ministry said that people who make payments on apartments before construction is complete should be protected.
"Real estate investors will be forced to purchase insurance, and if the investors go bankrupt, if the project becomes stagnant or the capital is put to other uses, customers will be compensated." Nam said.
Thua Thien – Hue works on tourism planning to 2025
The central province of Thua Thien-Hue has hired Singapore-based Akitek Tenggara company as a consultant in devising a tourism development scheme for the 2013-2025 period.
According to Chairman of the provincial People’s Committee Nguyen Van Cao, the scheme must create a new vision for the sector and specify directions and measures to turn the province into a top destination in the region using foreign and domestic models of sustainable tourism development.
The scheme should also make full use of the local natural and social advantages as well as potentials of the province.
Chairman Cao said Thua Thien-Hue and the Singaporean partner have agreed to focus on devising 14 key projects as part of the planning. Among these, priority will be given to five projects with the hope of creating a breakthrough in the province’s tourism development.
Playing the central role will be a plan combining urban and rural development, paving the way for developing countryside tourism following the green economy model. The other priority plans aims to develop the cruising industry, cruising tours on Huong (Perfume) River, the Hen islet and the Lang Co-Chan May green city.
The provincial Department of Culture, Sports, and Tourism is authorised to work with the Singaporean consultant on the plan, in order to submit it to the provincial People’s Council for approval at the upcoming session.
Hanoi builds over 1,000 social housing units
The Vietnam Housing and Urban Development Corporation (HUD) and the BIC Joint Stock company (BIC) on May 28 started the construction of a social housing project in Hanoi to partly meet housing demand in the city.
The project covers 2.2 hectares in the new south western urban area Linh Dam, providing 1,037 apartments, equivalent to 75,815 square metres.
The project will cost 710 billion VND (33.8 million USD), which is the first instalment of a 10,000 billion VND concessional loan (476 million USD) that the Bank for Investment and Development of Vietnam (BIDV) and HUD signed earlier this year.
According to Minister of Construction Trinh Dinh Dung, the building sector needs to perfect its mechanisms and restructure construction projects to meet people’s high demand for housing.
The Government has proposed many measures to thaw out the “frozen” property market to give people access to social housing and deal with social security issues, Dung added.
This is the first project implemented in line with Government Resolution No.02 that eases difficulties in Vietnam’s property market.
The ministry calls upon all enterprises, especially state-run companies to pioneer the social housing development movement.
The social housing project matches the State and Party’s policies, helping realise the 2020 national strategy on housing development with a vision towards 2030, according to HUD Chairman Nghiem Van Bang.
RoK enterprises seek opportunities in Da Nang
A delegation of 11 Republic of Korea (RoK) businesses attended an exchange with their counterparts in central Da Nang city on May 28 to seek business and investment cooperation opportunities.
The exchange was jointly held by the Da Nang branch of the Vietnam Chamber of Commerce and Industry (VCCI Da Nang), the Da Nang Investment Promotion Centre, and the Hwaseong Chamber of Commerce and Industry (HCCI) of the RoK.
During the event, the RoK businesses, operating in the fields of garment, electronics, mechanical engineering and hydraulic devices, introduced their products and establish cooperation ties with local firms.
The RoK now ranks second among 30 countries and territories investing in Da Nang city, with 27 projects worth over 700 million USD in total.
Thua Thien-Hue supports FDI enterprises
The People’s Committee of the central province of Thua Thien-Hue on May 28 held a seminar to seek way to support foreign-invested businesses operating in the locality.
According to Deputy Chairman of the provincial People’s Committee Phan Ngoc Tho, the province has tried to create a favourable investment and business environment for FDI firms.
Towards the target of attracting from 10 - 15 FDI projects with total registered capital at 150 million USD this year, the province is focusing on completing a land use plan, accelerating reforms of administrative procedures, particularly those related to FDI management, and increasing investment promotion activities.
Up to date, there have been 66 FDI projects worth nearly two billion USD operating in Thua Thien-Hue province. During the first quarter of 2013, local FDI enterprises earned 110 million USD in revenues, up 48 percent over the same period last year. They contributed 273 billion VND (some 13 million USD) to the state budget, an increase of 5 percent.
The province’s FDI projects are getting bigger in scale, and more diverse in fields, including garment and textile, tourism, food processing and beverage.
Pink books for CapitaLand project
CapitaLand’s first residential development in Vietnam, The Vista, has been granted first batch of housing ownership certificates, normally known as pink books.
The books were welcomed by The Vista home purchasers in Ho Chi Minh City’s District 2. The Vista is jointly developed by CapitaLand as the lead developer, Thien Duc Trading Construction and Phu Gia Investment.
The construction was completed on schedule and the apartments were handed over to home purchasers from end 2011.
“With the pink books, home purchasers can enjoy their legal rights in accordance with the Land Law and the Law on Residential Housing, such as right to assign, right to lease, right to inherit, right for capital contribution,” said a company release.
Yip Hoong Mun, deputy CEO of CapitaLand Vietnam, said: “The Vista marks several milestones achieved by CapitaLand in Vietnam. When The Vista was officially launched in October 2007, it received overwhelming response from the Vietnamese. “Notwithstanding the challenging market, the project was completed as scheduled in September 2011 and has since been handed over successfully to homebuyers. And now the first batch of pink books has been issued. In addition, we are regularly organising various activities for residents, neighbors, and public, such as Vista Christmas Bazaar, Vista Tet Bazaar, Earth Hour event. The Vista is more than just a residence, it is also a community for our residents,” Mun said.
Located in An Phu Ward, the 2.3 hectare prime residential precinct is close to the city centre, The Vista comprises 750 luxurious apartments across five 28-storey towers overlooking the Saigon River.
The development also comprises approximately 8,500 square metres of commercial space including a retail podium, named The Vista Walk.
In addition, The Vista has Vista Tower with 100 serviced residence units under Somerset Vista and more than 11,000 square metres of office space, kindergarten and health clinic.
Vietnam is one of CapitaLand’s key markets in Asia. The real estate market in Vietnam is supported by the country’s strong economic growth, rapid urbanisation and a young and growing population. CapitaLand is committed to being a long term real estate developer in the country.
In the residential sector, CapitaLand has a portfolio of close to 6,000 quality homes across six residential projects in Ho Chi Minh City and Hanoi.
In the serviced residence sector, its wholly-owned serviced residence business unit, The Ascott Limited, has a portfolio of more than 1,800 apartment units in 12 properties across the four major cities, making it the largest international serviced residence owner-operator in the country.
Monetary policy under greater pressure
The government will help ignite the economy by cutting the lending rate to allow credit growth to reach 12 per cent in 2013, after a low level in 2013’s first five months.
The prime minister has just released Instruction 09/CT-TTg on financial and budget management in 2013, under which the State Bank is required to continue reducing lending rates, for credit growth of 12 per cent for the whole year. It should also focus on lending in priority sectors, carrying out restructuring plans for credit institutions and stepping up addressing the bad debt problem.
According to the State Bank's Monetary Policy Division, up till May 22, credit growth rose by 2.29 per cent year-on-year. It is expected to reach only 3 per cent by the end of May.
Despite improvements during the same period of 2012 when credit growth stayed negative, this level is considered low compared to the 12 per cent target for this year.
Since March 2012 till now, the State Bank has cut interest rates eight times and consecutively lowered the ceiling Vietnam dong rate. In early May, the State Bank governor called for banks to consider reducing lending rates for old loans down to 13 per cent per annum.
In fact, many experts said to lower lending rates to support enterprises, the government and the National Assembly should consider tightening targeted inflation to 7-8 per cent, instead of 6-6.5 per cent as currently.
Phone handset exports to UAE increase sharply
Vietnam earned US$1.02 billion from exporting phone handsets to the United Arab Emirates in the first 4 months of this year, 4 times higher than last year’s corresponding figure.
The export of the products to this Middle East market rose 207% to US$204.6 million in April alone, according to the Vietnam Customs.
Vietnamese exports to the UAE have maintained high growth over the years, says the Africa, West Asia and South Asia Department under the Ministry of Industry and Trade.
Phone handsets took the lead among the export items to this market, with the value increasing from US$108.3 million in 2010 to US$363 million in 2011 and US$1.5 billion, in 2012.
Novel automobile- motorbike products on show
Nearly 300 items relating to the automobile- motorbike industry are on display at an international exhibition which opened in Ho Chi Minh City on May 30.
The 9th Saigon Autotech and Accessories Show 2013 involves some 250 domestic and foreign manufacturers, including those from Taiwan Indonesia, Malaysia, Thailand, China and India.
This year’s event sees an increase of 40 percent in the number of booths displaying accessories, assembling, and maintenance equipment, automobile interiors, and other things.
Visitors to the four-day event will see a host of novel automobile models of all types, including BRZ, Subaru XV 2.0i premium, Legacy 2.5GT sedan, Outback 2.5i SUV and 7-seat Tribeca 3.6R.
There is a large space for high-end and bizarre types of motorbikes like Harley Davidson, Rebel and Ducati.
Visitors will also have the chance to enjoy stunt performances by record holder Rus Swift from the UK.
The organisers will hold trade exchanges and field trips to Vietnamese factories for participating foreign businesses who want to study the Vietnamese market and seek cooperation opportunities with local partners.
EuroCham announces Vietnam's BCI in Q2
Results of the 11th quarterly EuroCham Business Climate Index (BCI) survey announced on May 30 showed that business confidence and outlook among European businesses in Vietnam continues to improve – even if hesitantly.
This quarter the Business Climate Index has risen to the mid-point- from 48 to 50 points – following three quarters below 50.
This is the second consecutive increase, and it seems to suggest that European companies are regaining trust in the Vietnamese market.
The key indicators of this development are the improved business outlook, the increase of revenue/orders and the optimism about the overall economic outlook.
However, it is important to keep in mind that the BCI remains at 50, far below the highpoint of 79 in 2011 and that the improvements over the last two quarters remains limited, with an increase of 2 points per quarter.
More than half of the businesses that participated in the survey are active in the services industry, a quarter in manufacturing and the rest in trading and other activities.
Looking to the future, the business outlook for respondents has seen a significant improvement with members having positive expectations rising from 30% to 43%, a development which may be linked to the ongoing EU-Vietnam Free Trade Agreement (FTA) negotiations. Yet, this still means that 57% assess their outlook as either ‘neutral’ or ‘negative’.
Reported investment plans also seem to be improving. More companies are intending to ‘significantly increase investment’, having doubled from last quarter’s 7% to 13%.
Overall, investment plans look more positive than they did a year ago, with 76% of respondents either expecting to keep or increase their investment levels versus 72% one year ago and the number of respondents expecting to cut investments further declined to 19% from last quarter’s 24%.
This again indicates a returning faith in Vietnam’s medium term future and that Government initiatives are inspiring increasing confidence and optimism.
When asked about their expected number of orders and revenue in the medium-term the answers have also slightly improved.
Whilst the share of companies expecting revenue to increase improved from 45% to 53%, those expecting a drop in orders fell further from 23% to 16%, which is a significant improvement. In other words, 84% of respondents consider their orders/revenue to remain constant or to improve.
This positive development has also had a positive impact on recruitment plans, with 39% expecting to increase head-count versus 14% expecting to decrease - a very positive ratio.
Comparatively, the numbers at the same time last year were 33% and 19%, respectively. Government initiatives and the prospect of a strong FTA between EU and Vietnam seem to have led to an increase in confidence in the Vietnamese economy.
Concerns about inflation are declining, with 65% of companies expecting inflation to have no, or limited impact on their business in the medium-term, as compared to 55% last quarter and up from 43% a year ago.
Members were also asked to indicate what they think the rate of inflation will be and the average came to 5.13%, which is extremely close to last quarter’s estimate of 5.12% and down half a percentage point on last year’s 5.63%.
Respondents’ appreciation of the macroeconomic situation is also improving. Whereas last quarter a considerable 57% expected a further deterioration in conditions (and a staggering 72% the quarter before), this has now fallen below the midpoint to 48%.
In other words, 52% of the respondents believe that the economy will stabilize and improve in the future, something which has not been seen in our Business Climate Index since 2011.US imposes anti-subsidy tariff on Vietnamese frozen shrimp
The US Department of Commerce (DOC) announced on May 29 that it will impose anti-subsidy tariffs of nearly 63% on frozen shrimp imported from China, India, Malaysia, Thailand and Vietnam.
In its preliminary decision, the DOC will impose countervailing duties on products imported from Thailand (2.09%), from China (5.76%), from Vietnam (7.05%), from India (11.32%) and from Malaysia (62.74%).
In 2012, five Asian countries exported around 258,000 tonnes of frozen shrimp worth US$2.3 billion to the US.
Many products from these countries have been subject to different anti-dumping tariffs for several years.
Indonesia and Ecuador – two major shrimp exporters – are exempted from anti-dumping tariffs as the DOC has found no evidence of state subsidies.
The preliminary decision was based on the results of DOC investigation into the recent petitions by shrimp producers and packagers under the US-based Coalition of Gulf Shrimp Industries. The final decision will be made in late September.
Vietnamese exporters have described the US Department of Commerce (DOC)’s recent levy of anti-subsidy duties on frozen shrimp imported from seven countries including Vietnam as absolutely unreasonable.
The General Secretary of the Vietnam Association of Seafood Exporters and Processors (VASEP) Truong Dinh Hoe said the DOC’s decision was only based on Vietnam’s policies to develop its fishery sector without giving any persuasive factual evidence.
Moreover, the DOC is yet to take into account borrowing interest rates and aquatic feed prices in Vietnam, which are far higher than those in other countries, he added.
Under the DOC’s preliminary decision, products of Minh Quy company are subject to a 5.08 percent anti-subsidy duty while the rate for Nha Trang Seafood is 7.05 percent, which is extremely high, according to domestic seafood processors and exporters.
If this rate remains until the final decision is made in late August, Vietnamese shrimp firms will find it difficult to ship their products to the US.
The VASEP General Secretary said Vietnamese companies will continue campaigning for more reasonable duty rates.
Price stabilization programme needs better co-ordination
The price-stabilized-product system should be developed nationwide and co-ordination among enterprises in creating a “goods reserve” should be improved, a conference was told on May 29.
The Ministry of Industry and Trade recently held the conference to evaluate the price stabilization programme and to discuss how to expand it.
Deputy Minister of Industry and Trade Ho Thi Kim Thoa said the programme and related policies to aim to control the consumer price index and prevent speculation.
Under the programme, she said, essential commodities such as rice, sugar, oil, meat, eggs, vegetables and seafood products were sold at 5-10 percent lower than market prices.
However, price-stabilized products have not reached residents in remote rural areas, said Hanoi Department of Industry and Trade deputy director Nguyen Van Dong.
Dong said the distribution network should be enhanced in traditional markets, rural areas and industrial zones to better serve low-income earners and ensure they enjoy the benefits of the programme.
Van Duc Muoi, director of Vissan, said enterprises need to be provided with preferential loans to manufacture and store goods for the price stabilization programme.
“It is also important that enterprises co-ordinate with each other to ensure stable raw material sources for production and a smooth transition between production and distribution,” Muoi said.
Director of the Domestic Market Department Vo Van Quyen said many localities now provide support to manufacturing enterprises, instead of mainly retail enterprises as in previous years.
“The price stabilization programme was not non-market,” Quyen said. He pointed out that enterprises have accessed Government loans to reserve necessary goods during economic difficulties.
HCM City Department of Industry and Trade deputy director Le Ngoc Dao said the price stabilization programme should encourage the participation of other economic sectors besides the Government.
She said that this year the city called for credit institutions and commercial banks to join the programme to help enterprises get access to loans at reasonable interest rates (about 6 percent for short term and 10 percent for long term).
Thoa told the conference that the ministry would have policies to encourage enterprises to join the programme by themselves without receiving loan support from the Government.
During 2012 and Tet holiday, a total of VND1.803 trillion (US$85.86 million) was provided to 45 out of 63 provinces and cities to participate in the price stabilization programme.
About 300 enterprises got involved in the programme, 20 percent of which did not get loan support from the Government, the ministry’s report showed.
Exhibition promotes energy efficient technology
The fifth International Energy Technology – Environment Hanoi 2013 (ENTECH) kicked off in Hanoi on May 29 on the theme of “Energy Efficiency – Environment, Business Efficiency, Sustainable Development.”
The three-day exhibition is showcasing energy-saving and environmentally-friendly technologies and products of nearly 100 enterprises from Vietnam, the Republic of Korea, China, and Japan.
ENTECH aims to create favourable conditions for local businesses to access advanced technological solutions, gradually replace low productivity devices with better ones, thus reducing expenses and improving their competitiveness.
The event is also a good chance for enterprises to publicize their hi-tech products and devices that save energy, and cleaner manufacturing technologies.
Technologies and products on show include lighting systems; electrical and heating equipment, gas systems, home appliances, renewable and new energy; clean manufacturing technologies; and environment technologies.
A workshop on energy saving solutions for small-and medium-sized enterprises will also be organized within the framework of the exhibition.
Binh Duong, Italian localities seek business partnerships
Italy’s Fordenone and Emilia Romagna provinces will invest in high-tech agricultural production, processing and industrial projects in Binh Duong province.
The commitment was made at the signing of a cooperative agreement between Binh Duong province and the two Italian regions in Binh Duong on May 29.
The signing was witnessed by Le Thanh Cung, chairman of the provincial administration, Alessandro Criani, governor of Fordenone, and Albertto, President of the Emilia Romagna Chamber of Commerce.
Binh Duong welcomes Italian investors and creates the best possible conditions for them to operate in the locality, Cung assured his Italian guests.
Albertto said Italy currently has five projects in Binh Duong that are operating efficiently.
He said 90 Italian automobile, high-tech, and processing businesses are keen to invest in Vietnam and consider Binh Duong a key destination for carrying out their projects.
A delegation from two Italian regions and representatives from the Italian Chamber of Commerce also visited the My Phuoc Industrial Zone and Binh Duong industry-services and urban area complex.
Binh Duong is one of the leading Vietnamese localities in attracting foreign investment. It has so far licensed 2,160 investment projects capitalized at more than US$18 billion from 35 countries and territories.
Seafood exports hit US$500 million in May
Vietnamese seafood exports in May are estimated at US$479 million, bringing the total five-month export value to over US$2.2 billion, down 5.6 percent against last year.
Seafood experts attribute the decline to difficulties with input materials, as well as anti-dumping tariffs and barriers set by the Japanese and Republic of Korea markets.
Australia and Canada have recently warned about the quality of Vietnamese seafood products as they found residues of antibiotics such as Fluoroquinolone, which is banned in seafood batches shipped to their markets.
As a result, exports to three major markets – the US, Japan and the RoK – have dropped significantly compared to 2012. Meanwhile, exports to China and Thailand have increased by 41% and 19 %, respectively.
However, the Vietnam Association of Seafood Exporters and Processors (VASEP) reports that, despite recent market recovery, the aforementioned factors will continue affecting the fisheries sector in the next few months.
It will be difficult for exports to rebound in the second quarter of this year and experts forecast that they may even decrease slightly.
Many export businesses still hope that shrimp exports to Japan – the leading importer of Vietnamese shrimp – will increase again after this country has removed regulations to test for Trifluralin residues in Vietnamese shrimp.
To promote exports in the coming months, experts suggest the fisheries sector find ways to reduce indirect costs and those related to services, and businesses pay more attention to quality, food hygiene and safety in order to expand their export markets.
Businesses seek opportunities in South America
A large number of Vietnamese and Argentinean businesses attended a business forum in Buenos Aires on May 28.
The forum was held during a fact-finding tour by a delegation of 12 Vietnamese businesses operating in the fields of construction, infrastructure development, water supply, and waste treatment, as well as food, farming and plastic products.
President of the Argentinean Chamber of Commerce (CAC), Carlos Raul dela Vega, Director of the Argentinean Foreign MinistryExports Promotion Agency, Agustin Wydler, Vietnam Chamber of Commerce and Industry (VCCI) official Nguyen Vu Kien and Vietnamese Ambassador to Argentina Nguyen Van Dao spoke highly of the potential for economic cooperation between the two countries.
They agreed that the global economic crisis has created an opportunity for both sides to support each other and increase mutually beneficial cooperation within the framework of South-South Cooperation in trade, investment, and other fields.
Argentinean participants emphasised that Vietnam is a potential market of around 90 million consumers and with high and steady economic growth.
Vietnamese businesses met with their Argentinean counterparts at the forum to seek cooperation opportunities in technology transfer, product development, product distribution and joint venture partnerships.
On the same day, the Vietnam-Argentina Centre held meetings among business representatives from the two countries.
Carlos Castelli, President of the Blue Star Group, which has 530 shops in Chile, Mexico, Peru and Argentina, said his group plans to open its first shop in Vietnam in the near future.
Two-way trade between Vietnam and Argentina has gradually increased to US$1 billion in 2011, and it reached nearly US$244 million in the first quarter of this year, up 33 percent over the same period in 2012.
US measurement company enters Vietnam market
Agilent, the world’s premier measurement company in the US, has decided to open two offices in Hanoi and HCM City to provide local customers with sales, applications and support services.
In a press release, the US-based multinational company says these offices will have specific centers to deliver greater levels of engineering and support expertise for customers and partners.
As one of the fastest developing infrastructure and business regions in the world, Vietnam is a critical component in Agilent's key emerging markets strategy," said Dr. Nick Roelofs, president of Agilent's Life Sciences Group.
"We look forward now to directly participating with customers to deliver the products and solutions in electronics, chemical analysis and life sciences that will help accelerate their work and ultimately contribute to the growth of Vietnam."
Soon-Chai Gooi, president, Order Fulfillment and Supply Chain of the company, describes the Vietnam expansion as a major milestone for Agilent.
"Each office will be fully staffed to provide the high level of service that Agilent is known for to help our customers excel with the latest measurement technologies for electronics, life sciences and chemistry,” said Gooi.
“Our customers and partners in Vietnam can now look forward to faster response times and the highest quality of service which Agilent is renowned for worldwide."
Agilent Technologies Inc. is the world's premier measurement company and a technology leader in chemical analysis, life sciences, diagnostics, electronics and communications. \
It employs 20,500 workers in more than 100 countries. It obtained net revenues of US$6.9 billion in its fiscal year 2012.
HCM City forum fosters Vietnam-EU business links
Vietnamese and European Union experts made proposals at a joint forum in HCM City on May 29 to facilitate business operations and raise bilateral trade ties.
Experts from the European Union Delegation to Vietnam introduced new approaches to the value chain to capitalise on the free trade agreement (FTA) once it is signed between Vietnam and the EU.
They also presented new ways of developing business strategies to Vietnamese businesses to effectively penetrate the demanding EU market.
A Ministry of Industry and Trade (MoIT) representative said with the ministry’s assistance, Vietnamese businesses have kept abreast of the generalized system of preferences (GSP) of the EU in the 2014-2016 period.
Accordingly, exports such as footwear, handbags and umbrellas will no longer enjoy GSP as of January 1, 2014. Technical specifications and food safety are major barriers to Vietnamese commodities to be exported to the EU.
Vietnamese businesses were advised to log on to the EU trade portal to seek accurate information about their partners and markets.
In 2012 the EU overtook the US to become Vietnam’s largest goods importer and second largest trade partner, with two-way trade reaching US$29.1 billion, an increase of 19.77 percent over 2011.
In the first quarter of 2013, two-way trade value rose 26.18 percent to US$6 billion, including US$4.34 billion worth of Vietnamese exports.
RoK enterprises seek opportunities in Danang
A delegation of 11 Republic of Korea (RoK) businesses attended an exchange with their counterparts in Danang city on May 28 to seek business and investment cooperation opportunities.
The exchange was jointly held by the Danang branch of the Vietnam Chamber of Commerce and Industry (VCCI Danang), the Danang Investment Promotion Centre, and the Hwaseong Chamber of Commerce and Industry (HCCI) of the RoK.
During the event, the RoK businesses, operating in the fields of garment, electronics, mechanical engineering and hydraulic devices, introduced their products and establish cooperation ties with local firms.
The RoK now ranks second among 30 countries and territories investing in Danang city, with 27 projects worth over US$700 million in total.
Heavy fine for those illegally sending laborers to Angola
Any enterprises illegally sending laborers to Angola will be heavily fined and required to repatriate laborers, according to the Ministry of Labor, Invalids and Social Affairs.
Deputy Minister Nguyen Thanh Hoa said on the sidelines of a seminar on labor export held last week in Hanoi that the ministry has yet to allow any enterprises to send workers to Angola.
Vietnamese who are currently working in Angola are health, agricultural and educational experts sent to that country under a labor cooperation agreement signed between the governments of the two countries years ago. Meanwhile, sending workers to Angola has not been allowed.
The Overseas Labor Management Department and the Consular Department will publicize the warning so that workers can take prudence if working in Angola.
“There are currently 30,000-40,000 Vietnamese working and living in Angola. The ministry has received some labor export contracts from Angola but none of them have met requirements,” Hoa said.
Meanwhile, the number of people going to work in Angola has not declined as Vietnamese workers are attracted by high income with an average of US$900-1,000 per month or even US$1,500-1,700. However, such income is precarious as the jobs are not stable.
At the seminar, the Vietnam Association of Manpower Supply with assistance from international organizations issued the code of conduct (CoC-VN) for labor exporting enterprises which will be used to score and evaluate the prestige and quality of enterprises concerned.
VND550 billion for Hiep Phuoc IP expansion
Hiep Phuoc Industrial Park Joint Stock Company (HIPC) will invest an additional VND550 billion to expand the park by nearly 600 hectares to make room for industries specializing in mechanical products, home appliances, seaport services and foodstuff processing, said Doan Hong Tam, general director of the company.
HIPC will sign an agreement with Vietinbank for a loan of VND550 billion on June 4 to develop the second phase of the facility, Tam told the Daily yesterday.
As much as 93% of the first phase of Hiep Phuoc Industrial Park (IP) has been occupied by 96 enterprises. HIPC next week will license two more mechanical companies, taking the total number of investors in the park to 98.
IP developers now are in a fierce competition to access bank loans as they are no longer subject to preferential lending rates as before, Tam said.
Under the HCMC IP development zoning plan by 2020 with a vision to 2025, the city will continue constructing high-tech IPs, attracting manufacturers to already-planned IPs and industrial clusters, developing supporting industries and minimizing labor-intensive schemes.
The city has 14 IPs and export processing zones (EPz) with more than 1,200 valid investment projects using nearly 260,000 workers. As per the plan, the city will have one hi-tech area, 20 concentrated IPs, EPZs and local industrial clusters on a total area of roughly 8,000 hectares in the next ten years.
Many IPs in the city have focused on investment in 2016-2020, including Bau Dung, Hoa Phu, Le Minh Xuan 2, Le Minh Xuan 3, Phu Huu, Vinh Loc 3, Xuan Thoi Thuong and Hiep Phuoc’s the third phase.
CBU auto imports up sharply
A slight recovery of the local automobile market over the past two months is enough to fuel an increase in the import of completely built-up autos this month, according to the General Statistics Office (GSO).
The nation has imported an estimated 4,000 automobiles this month worth a combined value of US$60 million, the highest compared to four months earlier, GSO reports.
The auto import volume and value have been rising. For instance, the country only imported 1,000 units with a total value of US$38 million in February, which then increased to 3,000 units worth some US$48 million in March.
In April, even though the auto import volume was unchanged at 3,000 units, its value grew to US$50 million.
The aforesaid results show that the import value of completely built-up cars has been on the rise, which is described as a considerable market movement by local traders. The auto market has changed for the better since March versus previous months, according to local assemblers and completely built-up auto importers.
Local traders believe the market growth is partly due to the Government’s moves to slash tax and registration fee. On the other hand, the great effort of auto makers in launching plenty of new products and offering discounts to stir up local demand has also helped improve the situation.
Similarly, the Vietnam Auto Manufacturers’ Association (VAMA) reported the auto market this month posted higher growth than expected. The association, however, insisted the growth rate is still slim.
As such, the number of imported completely built-up cars amounted to an estimated 14,000 units from January-May with a combined value of around US$247 million, up 13% in volume and 3.5% in value over the year-ago period. With such a positive trend, local traders expect the number of imported completely built-up cars to rebound slightly or to equal to this month’s result.
More completely built-up cars are forecast to be imported in the final months of the year when local auto demand traditionally picks up.
With more than 8,780 cars sold last month or a year-on-year sale growth of 26%, VAMA predicts this year’s sale volume at about 103,000 units, 3% higher than estimates in previous months.
People’s credit funds need changes to survive
The Central People’s Credit Fund and nearly 1,200 similar funds across the country are suffering from several shortcomings and need changes for sustainable development.
Speaking at a workshop themed “Improving and developing people’s credit funds” held in Hanoi last week, Phi Trong Hien from the central bank said many people’s credit funds do not strictly comply with the credit process, leading to great risks.
Moreover, most people’s credit funds have poor facilities, low equity and human resources with limited skills, hindering their expansion for sustainable development.
Nguyen Tien Huan, chairman of the people’s credit fund Quang Trung in Hanoi’s Ha Dong District, proposed establishing criteria on objectives and principles for operation of people’s credit funds. Adhering to such objectives and principles, people’s credit funds will be able to grow in a sustainable way, he said.
Participants in the workshop suggested turning the Central People’s Credit Fund into a cooperative bank, operating in accordance with the Law on Credit Institutions and relevant laws. The cooperative bank will expand its network to the localities where there are many people’s credit funds to support them and increase the credit access.