Vinacomin to explore bauxite in Cambodia

Vietnam National Coal and Mineral Industries Group, or Vinacomin, has started sending its workers to Mundikiri Province of Cambodia to explore bauxite.          

Bui Van Khich, deputy general director of Vinacomin, told the Daily that Cambodian authorities had allowed Vinacomin to carry out a bauxite exploration and exploitation project in Mundikiri.          

The workers will be responsible for surveying a site covering around 1,500 square kilometers in Mundikiri, which borders Vietnam’s highland province of Dak Nong, to determine bauxite reserves, Khich said.

He said it would take nearly two years to complete the bauxite reserves assessment. After that, Vinacomin will report to Cambodian and Vietnamese authorities before moving on to the next stages of the project.          

A preliminary assessment by Vinacomin shows Mundikiri has geological characteristics similar to Dak Nong, which has huge bauxite reserves, according to Khich.

The group is carrying out the first two key bauxite projects in Vietnam – Tan Rai in Lam Dong Province and Nhan Co in Dak Nong. Each project has a total alumina processing capacity of some 600,000 tons a year.

Inflation control, managing exchange risk top priorities

Viet Nam needs to tightly control inflation and have policies to manage foreign exchange risk, a conference heard in HCM City yesterday.

Rowan Luke, head of treasury operations at the Commonwealth Bank in HCM City, said foreign exchange represents one of the biggest risks for importers or businesses remitting dividends.

"The future direction of the currency will depend on a number of factors such as inflation, economic, policy, FDI, trade balance, and domestic confidence in the dong. While in the past many of the above factors have been working against the currency, recent market developments have shown a greater cause for optimism."

Inflation had risen significantly in the past 12 months as the Government prioritised high growth rates, he said.

But now the policy objective was to reduce inflation and some key measures had been taken, including a hike in reverse repo rate by the State Bank of Viet Nam and cut in fiscal expenditure.

Besides, domestic confidence was a key factor in foreign exchange management, especially given the closed nature of dong trading.

This had been fragile for the last three years, and changing these market perceptions would be difficult.

However, if real rates of return on the dong remained positive and policy targeted inflation, they would change over time.

The trade deficit was likely to improve this year, and FDI was likely to improve over the next 12 months.

It was driven by improvement in the global economy, and the dollar's low exchange rate against major currencies.

Michel Henry Bouchet, head of SKEMA Business School's Global Finance Centre and director of the North Sea Global Equity Management Fund, spoke about how global capital markets currently assess Viet Nam's country risk.

He quoted the International Monetary Fund and World Bank as saying Viet Nam had fragile market stability due to confusion over the Government's policy intentions and the region's highest inflation rate (11 per cent last year and 13 per cent this year).

Weak governance will cause obstacles to sustainable investment, capital market development, and domestic savings and FDI.

The conference was organised by the French-Vietnamese Center for Management Education (CFVG).

Companies urged to open branch offices in Russia

Establishing representative offices in Russia would be a good way for Vietnamese companies to effectively penetrate the market and reduce business costs, said Viet Nam Chamber of Commerce and Industry (VCCI) vice chairman Pham Gia Tuc during a conference on Wednesday.

Several Vietnamese corporations have already opened representative offices in Russia, but the number was still modest, said Tuc, adding that more and more domestic firms wanted to do business in Russia.

Bilateral co-operation between Vietnamese and Russian businesses were enjoying new advantages due to increasing attention from both countries' leaders, Tuc said.

Attending the conference on helping Vietnamese companies open offices in Russia, Deputy head of the Russian Justice Ministry's National Registration Bureau Vladimir Vorobiev said Russia was willing to create the most favourable conditions for Vietnamese businesses to speed up bilateral co-ordination.

Vietnamese enterprises still encountered challenges in doing business in Russia, and so we were here in Viet Nam to help these firms solve the difficulties, he said.

During the event, the delegation introduced legal procedures on representative offices in Russia and services to assist foreign businesses to obtain visas and labour licences.

In September, 2010, VCCI inked a co-operation agreement with the bureau in a move aimed at better supporting domestic businesses in launching operations in Russia.

To date, 60 firms have received assistance from the chamber in fulfilling necessary procedures and were awaiting approval from Russian authorities.

Vietnamese businesses last year carried out 20 projects in Russia with capital totalling US$1.6 billion.

Noodle and fast food production by Vietnamese firms made up 60 to 70 per cent of market share in Russia while textiles, garments and footwear also enjoyed a strong market presence in terms of reputation for quality, said vice chairman of the Viet Nam-Russia Business Council Nguyen Van Pham.

Bilateral trade ties have developed significantly, rising from $350 million to $400 million in the mid-1990s to $2.4 billion last year.

Viet Nam exported garments, footwear, tropical agricultural products, seafood and handicrafts to Russia, while importing petroleum, fertiliser, chemicals and machinery.

Two-way trade is expected to reach $3 billion by 2012, according to the Viet Nam-Russia medium-term action plan on trade and investment.

Trade fair in capital promotes Thai products

The Thailand Outlet Fair 2011 will showcase Thai brands and products today through Sunday at the Ha Noi's Friendship Culture Palace. Products to be showcased will include textiles, electronics, food and beverages, cosmetics, jewelry, automobive accessories, and consumer products. The Department of Export Promotion under the Thai Ministry of Commerce and the Viet Nam National Trade Fair and Advertising Co (VINEXAD) are co-organising the event.

Telecommunication suits attend mobile Asia meeting

Over 200 telecommunications executives from around Asia gathered in the central coastal province of Khanh Hoa on Tuesday for the Mobile Asia Congress, a regional conference sponsored by the Global System for Mobile Telecommunications Association (GSMA) to boost technology exchanges.

Minister of Information and Communications Le Doan Hop shared with delegates the nation's recent efforts to perfect its legal system, creating a healthy competitive environment for all economic sectors.

Delegates heard reports on IT and communications development in Viet Nam, with fixed telephone subscriptions reaching 18 per cent of the national population and internet 32 per cent by late 2010.

Viettel expands optic cable cover, develops 3G service

One year after launching its mobile 3G service, Viettel has doubled its base transceiver stations (BTS) from 8,0000 to 17,000, the largest number in Southeast Asia.

By expanding the service, Viettel has attracted subscribers to its wireless internet Dcom 3G service, which is currently at 60 per cent capacity. Viettel's network covers 90 per cent of the nation's communes (9,911 out of 11,072) with 130,000km of fibre optic cabling.

Exhibition to promote cosmetics and wellness

An international exhibition and conference on cosmetics, beauty, hair and spa (Cosmobeaute Vietnam) opened in the Sai Gon Exhibition and Convention Center in District 7 yesterday.

The fourth Cosmobeaute Vietnam exhibition, which runs until April 23, has attracted more than 150 exhibitors, including those from the US, Thailand, Japan, Hong Kong, Italy, South Korea, Singapore, Taiwan and Malaysia. Products on display include new equipment, technologies and products in cosmetics, hair and nail industries.

HSBC chooses Viet Nam to launch receivables solution

HSBC's customers in Viet Nam will be the first in the Asia-Pacific region to be offered its new Integrated Receivables Solution that summarises all their receivables for easy reference.

Speaking about the IRS that was launched on Wednesday, Puneet Gupta, head of the bank's payment and cash management said: "IRS gives companies a comprehensive view of their daily cash position, allowing them to use cash more efficiently and make decisions based on real time information."

It fully integrates all receivables transactions and summarises them into a single consolidated report.

Damco opens multipurpose logistics centre

Damco, a global leader in supply chain solutions and freight forwarding, on Wednesday opened a new 26,000-square-metre modern distribution centre to better satisfy export needs of enterprises in southern Binh Duong Province, supporting its growth in both international and domestic markets.

After eight months of construction with total investment of US$4 million for phase 1, the multipurpose centre, which provides 200 jobs, will help customers reduce the total logistics cost to Cai Mep seaport in the coastal province of Ba Ria – Vung Tau. This centre offers integrated logistics solutions, or all-in-one solutions: CFS or cargo freight station, bonded and general warehouse.

In terms of CFS cargo, the logistics centre may meet the total annual capacity up to 1 million cubic metres.

The distribution centre is well-connected by road transport and allows it to serve both Cat Lai (in HCM City) and Cai Mep ports.

Plans are also underway to further link the facility to barge infrastructure as a supplement to truck transport.

This will allow customers to reduce overall transportation costs and carbon emissions.

"With this new facility, our customers will have greater flexibility in managing fluctuations in demand for warehousing," said Narin Phol, country manager for Damco in Viet Nam and Cambodia.

"It is also our vision to develop this facility into an international consolidation hub, linking the Indochina region through our cross-border solutions," he said.

The warehouse was built in accordance with Damco's global quality standards, said Brent Williams, Contract Logistics General Manager for Damco in Viet Nam and Cambodia.

"It deploys state-of-the-art Warehouse Management Systems, supports efficient warehouse solutions, and follows international Health, Safety, Security and Environment standards," he said.

Damco plans to continue to invest in infrastructure to meet the growing needs of its customers.

Damco currently has nine warehouse facilities in Viet Nam.

Auditors need to provide more info to shareholders

Narrative reports have focused primarily on meeting regulatory demands rather than providing shareholders with essential information on corporate performance.

Deputy director of Deloitte Viet Nam, Thai Thi Thanh Hai, in a seminar yesterday on narrative reporting suggested that information in the narrative reports issued by HCM City-listed companies were too general and lacking specific detail.

This shortfall meant that shareholders and investors lacked enough information to make sound decision on their investment strategies into the corporates, Hai said.

Isobel Sharp, vice president of the Deloitte, said that companies today were trying to serve two clients simultaneously. While they wanted to satisfy their shareholders, they also had to comply fully the disclosure regulations by market regulators.

To simultaneously serve them was a major challenge, Sharp said.

Association of Chartered Certified Accountants (ACCA) director Helen Brand concurred that corporate narrative reports were being questioned even before the financial crisis occurred. The matter was how much information in the narrative reports was really necessary while the reports themselves fully complied with regulatory demands.

Hai pointed out that Vietnamese corporates were short of detailed instructions on the essential information to make narrative reports. "Shareholders themselves are uncertain about their needs from corporate reports, while the cost and time spent on them also affects the quality of the reports."

She noted some points that local enterprises should consider in their making of annual reports, including further information on business strategy and prospects, possible risks or influential factors on business performance, and key performance indicators and corporate governance.

But, most important was the professionals who could theoretically help corporates make narrative reports, said Ha Thi Thu Thanh, director of Deloitte Viet Nam.

Low dollar savings rate discourages depositors 

People have switched to saving in Vietnam dong instead of US dollar ever since USD deposit interest rates were capped at less than three percent per year, in line with the Government Resolution 11 for stabilizing the foreign currency market and interest rates.

People prefer to deposit in dong because the savings rate of the dong is 11 percent higher than that of the dollar.

 

Since April 13, when the new ceiling on USD deposit interest rates was applied, the amount of dong flowing into banks has soared sharply, as people have changed dollars to dong for saving deposits.

 

This switch has helped to keep dong deposit rates stable.

 

People have also begun to trade their dollars through banks rather than trade in the open market. The USD buying rate in the bank is VND65/dollar higher than the open market, while the USD selling rate in the bank is VND65/dollar lower.

 

Some commercial banks said they have bought millions of dollars a day. Since banks have been able to buy more dollars from people, they can meet increasing demands by enterprises.

 

The current total dollar demand is US$165.1 million, while the total volume of dollars bought by banks is US$161.4 million.

 

Since people have turned their backs to the dollar free market, foreign currency trade shops have remained dull, with some even stopping trading in dollar.

 

Banks to be banned from mobilizing and lending gold 

The State Bank of Vietnam will issue new regulations banning banks from mobilizing and lending gold from May 2011.

The statement was made at a meeting on April 20 between the central bank and commercial banks to discuss issues relating to the gold market at the Prime Minister’s order.

The central bank will follow a 2-year roadmap to avoid shocks to the market and for banks to have time to re-structure their fund resources.

The new regulation will be effective from May 2011 and banks will then completely cease all gold mobilizing and lending operations by May 2013.

The Prime Minister has ordered the Ministry of Planning and Investment to tightly monitor licensing gold trade and severely penalize violators of foreign currency and gold trade.

According to the central bank, 22 banks have been mobilizing and lending gold, with the exception of the Bank for Agriculture and Rural Development of Vietnam (Agribank).

Last October, the central bank slowly tightened the operation by only allowing gold mobilization via issuance of valuable papers instead of gold savings as done previously. Banks were permitted to lend gold for jewelry production, processing and businesses only, while not allowing producing or trading in gold bars.

Once the ban is effect, it will further tighten the gold market as the Government resolution urges the central bank to gradually limit sale of gold bars in the market.

 

Imported vehicles see upsurge in March

 

According to the General Administration of Customs, as many as 5,727 cars were imported in March 2011, worth US$115.5 million.   

Compared to last month, the car imports showed a 53.3% increase in volume and 92.3% in value.

 

During the first quarter of this year, Vietnamese companies imported a total 15,493 cars, an increase of 62.6% in volume. The import value was worth nearly $278 million, a 72% increase compared to the same period last year.

The Ministry of Finance has just issued a Circular No. 31, which cuts down import taxes from 83% to 77-80% and is applicable to certain types of vehicles from April 23. This move may further boost import of cars from late April onwards.

Meanwhile, the number of imported motorbikes in March was 5,815, worth $5.1 million, an increase of 92% in volume and 67.7% in value compared to the previous month.

Son La plant’s second generator to start running

After being connected to the national power grid on Wednesday, the second generator of Son La Hydropower Plant, the biggest of its kind in Southeast Asia, will be up and running in late May.

The second generator, with a capacity of 400 MW, will go through two phases of trial: a 72-hour trial and later, a 30-day run.

Son La’s third generator is expected to start running at the end of August, while the fourth will be in operation in late December and the rest will be put to use next year.

By the time it is completed, Son La Hydropower Plant will have six power generators with a total capacity of 2,400 MW and can produce 10.25 billion kWh of electricity every year.

The US$2.1 billion power plant, located in Muong La District in the northern province of Son La, was built in 2005 with a 224-sq km reservoir that contains 9.26 billion cubic meters of water.

Domestic airlines to offer new flights

Private carrier Air Mekong will offer direct flights between Hanoi and Phu Quoc this month while state-owned Vietnam Airlines’ non-stop flights to London will be up and running later this year.

Air Mekong said it would use medium-size Bombardier CRJ 900 planes with a capacity up to 90 passengers for its 2-hour flights between Hanoi and Phu Quoc Island which will be available as of April 28.

The flights will depart from Hanoi at 6:00am and come back at 12:40pm.

This route will be the longest domestic route in the country. At present, flights from Hanoi to Phu Quoc have to transit at Tan Son Nhat International Airport in Ho Chi Minh City.

Tickets for Economy Class are expected to cost VND2,273 million (US$113) excluding taxes and fees.

Meanwhile, Vietnam Airlines’ non-stop flights from Hanoi or Ho Chi Minh City to London will be its fourth non-stop flights to Europe after flights to Paris, Frankfurt and Moscow.

Vietnam banks to stop gold deposit, gold lending

Vietnam banks will stop gold lending starting this May 1 and will stop gold deposit activities starting May 1, 2013, announced the State Bank of Vietnam yesterday.

The move of the State Bank of Vietnam (SBV) is considered its latest effort in tightening control of local gold market and ensuring safety in bank operations, a central bank’s official said.

The SBV is finishing a draft Decree on regulating local gold market which heads up to wipe off gold-trading transactions in the free market. However, the information of one way gold trading has not yet been clarified.

In late October last year, the SBV issued a circular to put restriction on gold deposit and lending activities of local credit institutions, asking local lenders to raise gold deposits only through issuing banknotes instead of raising gold deposits and lend gold only for jewelry production and trade purposes instead of lending for gold bullion processing and trading.

The SBV also banned local banks to convert gold value into the dong, deposit and lend the dong based on gold standard.

Earlier, the central bank announced closures of about 20 local gold exchanges and gold trading at foreign banks’ accounts, added gold import quota to local firms to meet mounting gold demand, and cooperate with local authorities to fight illegal gold import.

As of September 2010, Vietnam had 23 credit institutions that participate in gold deposit and lending activities, and the outstanding gold deposits were VND92.6trillion in the first nine months of the year.

Gold holdings by the public were estimated to be about 400-500 tons then, said Vietnam Gold Association.

Bank offers alternative way to pay for fuel

Vietnam Bank for Industry and Trade (VietinBank) and Sai Gon Fuel Corporation (SFC) on Wednesday signed a deal that enables all consumers to pay for petroleum and certain public services through an e-card.

Consumers can use VietinBank’s E-fast card to purchase petroleum at any retail points of SFC as well as pay for bus fees, road charges and certain entertainment services without having to have a VietinBank account.

The E-fast card will be sold at all SFC petrol stations and VietinBank branches at different price levels.

The card can be recharged at a VietinBank office or through an E-partner card, a debit card offered by the bank.

Pham Anh Tuan, vice director of VietinBank said in the near future, the bank would provide more recharging options for consumers such as recharging through sms message or the Internet.

SFC said this new payment method would help reduce labor cost and ensure more accurate revenue accounting.

At present, SFC operates 16 petrol stations within the HCMC area.

VN-Qatar aviation, tax agreements take effect

The Agreement on Aviation Transport and the Agreement on Double Taxation Avoidance and Prevention of Income Tax Evasion between Vietnam and Qatar have officially come into force.

Vietnamese Ambassador to Qatar Phung The Long and Ambassador Zayed Bin Rashid An Mansour Al-Nuaimi, Director of the Asia-Africa Department of the Qatar Ministry of Foreign Affairs, signed the minutes on the exchange of letters of approval of the Agreement on Aviation Transport in Qatar on April 21.

Zayed Bin Rashid An Mansour Al-Nuaimi also handed over to Long the Qatar Foreign Ministry’s diplomatic note, announcing the effectiveness of the Agreement on Double Taxation Avoidance and Prevention of Income Tax Evasion.

The agreements, which were signed in the Qatar capital city of Doha on March 8, 2009, will create a legal framework for the two nations to step up bilateral cooperation.

Italian life insurance group enters Vietnam

The Vietnamese Ministry of Finance has granted an operating licence to the Generali Vietnam Life Insurance Company, a branch of Italy’s leading life insurance group Assicurazioni Generali S.p.A.

Wholly owned by the Generali group, the company is headquartered in Ho Chi Minh City, where a representative office opened at the end of 2009, Generali said on April 21.

Generali highly valued the untapped potential of the Vietnamese insurance sector, as evidenced by its growth rate of 22 percent last year, a population of 88 million people coupled with a low insurance penetration ratio of 1.6 percent of GDP and a domestic saving ratio close to 30 percent of GDP.

Last year, Generali’s revenues from insurance operations in Asia rose by 43.6 percent. Established in 1831 in Trieste, last year, Assicurazioni Generali S.p.A was assessed the world’s second largest insurance supplier in terms of profitability, behind AXA group of France.