Samsung exports three times higher than city’s IPs, EPZs

Exports from the Samsung phone factory in Bac Ninh in the first six months totaled some US$11 billion, three times higher than the combined value of all firms active in the HCMC-based industrial parks (IPs), export-processing zones (EPZs) and Saigon Hi-Tech Park.

Samsung Electronics Vietnam (SEV) found its exports in the first half of 2013 almost hitting the level of US$12.6 billion recorded in the whole of 2012, said the Bac Ninh Industrial Zones Authority.

Meanwhile, enterprises in Saigon Hi-Tech Park exported some US$1.26 billion worth of products in the first six months, up 70.2% year-on-year. Those operating in the city-based IPs and EPZs exported a total value of US$2.2 billion, an increase of 14% over the same period last year.

In comparison with businesses in IPs and EPZs in HCMC with an average 10-12 years of operations, SEV is quite young with only a three-year history. However, the cell phone maker has outdone the entire textile-garment industry of Vietnam in export turnover.

SEV has played an important role in making mobile phones and components the group of export items generating the largest turnover for Vietnam. This group of items is expected to bring in US$20 billion in 2013, with a huge contribution from the Samsung factory in Bac Ninh.

The export turnover of mobile phones and components grew 198.4% in 2011 and 98.8% in 2012, or over 5.5 times higher than the figure in 2010. In the first half of 2013, this group of items recorded an export growth rate of a staggering 97%.

Not only greatly contributing to Vietnam’s exports, mobile phones and components also helps reduce the country’s trade deficit with their large trade surplus.

In the first six months, 30 nations and territories imported cell phones and components from Vietnam, with over 20 markets buying more than US$100 million worth, proving the high technology content and competitiveness of mobile phones made in Vietnam.

The Bac Ninh facility of SEV has created jobs for around 40,000 workers.

While delivering a strong export performance, this production facility has also imported a significant volume. In the first half of the year, it imported over US$9.3 billion worth of goods.

Meanwhile, enterprises active in the HCMC-based IPs and EPZs imported US$1.8 billion and those in Saigon Hi-Tech Park imported about US$1.06 billion worth of goods.

It is explained that manufacturers are forced to import parts and components for assembly given the underdeveloped supporting industries in Vietnam, leading to a low added value of the products made in Vietnam.

If such a value was higher, Vietnam could benefit a lot from the large-scale projects of Samsung, said analysts.

To improve the added value, Vietnam must continue to invest in and introduce preferential policies to encourage investment in supporting industries.

Policy incentive boost for high tech projects

Policy incentives and further investment to bolster support industry development would help Vietnam gain more from foreign hi-tech projects.

Latest statistics show that in the first six months of the year, Samsung Electronics Vietnam (SEV), a subsidiary of the South Korean global giant Samsung, earned $11 billion from exporting handsets and vacuum cleaners against its 2012 full-year export figure of $12.6 billion.

During the same period, the US-owned Intel shipped abroad $956 million, while the Tien Son facility and the Que Vo facility of Japan’s Canon reporting figures of nearly $192 million and more than $491 million, respectively.

According to Professor Nguyen Mai, deputy chairman of the State Commission for Cooperation and Investment, now the Ministry of Planning and Investment, these figures have contributed to Vietnam’s surging export value and reflect that Vietnam has pursued the correct path in terms of attracting foreign investment.

However, large foreign investors are also major importers. In the first six months of the year, SEV imported $9.3 billion. Intel also racked up $855 million in imports, while Canon’s facilities in Tien Son and Que Vo imported $104 million and $203.4 million in value respectively.

However, in terms of added-value brought to Vietnam’s economy in the first six months, SEV contributed $1.7 billion, Intel $101 million and Canon over $348 million from its two mentioned-above facilities.

SEV added value to Vietnam’s economy last year totalled some $1.15 billion, with Intel providing $200 million and Canon $777 million.

Mai, however, claimed these added value figures were below expectations. For instance, in the case of SEV it only accounted for around 10 per cent of the company’s total export value last year and about 15.5 per cent of its total export value in the first six months of this year.

“Vietnam’s economy would gain more, and the added value figures could increase, but this heavily depends on the performance of Vietnam’s support industries,” said Mai.

SEV general director Shim Won Hwan said SEV wanted to hike the rate of localisation and added value but Vietnam’s support industries and firms were still unable to meet Samsung requirements.

“SEV has around 60 suppliers but there are only five Vietnamese suppliers which do not give us electronic devices but are more likely to provide less valuable inputs such as packaging or foam boxes,” Shim said.

In Canon’s case, its localisation is mainly in the mechanical engineering segment, which has caused problems, as it is extremely hard to source Vietnamese electronic component suppliers. In a recent forum, Canon Vietnam’s LBP Purchasing Division general manager Okada Kinya voiced the photography giant’s intention to source Vietnamese electronic part suppliers for the company, but no Vietnamese candidates seemed capable at present. It appears that spurring support industry development is the only way to help foreign invested businesses increase their added value and make a greater contribution to Vietnam’s economy.

Piaggio Vietnam’s test track system opened

Piaggio Vietnam today officially opened the Piaggio Global-Standard-Test Track System in Vietnam, marking another significant step to research and development (R&D) process for new product projects.

This system is designed by Piaggio Global’s R&D Centre, applied its global test track technology. The system also imitates all kind of typical Asian road conditions which focus on endurance test, durability test, and function test.

Piaggio Vietnam’s industrial complex located in the northern province of Vinh Phuc has vehicle assembly factory and engine production factory. The vehicle factory began production in June 2009, successfully produce Vespa scooters, Liberty high-wheel scooters, Fly innovative compact scooters and Zip entry scooters. The engine production factory opened in March 2012.

The Piaggio Vietnam’s industrial complex in Vinh Phuc also houses an R&D centre for the two-wheeler vehicles – the first R&D unit set up by the Piaggio Group in South East Asia – which operates synergistically with the Group Headquarters in Pontedera, focusing on the vehicle and engine ranges produced for the Asia Pacific markets.

According to the company, in May Piaggio Vietnam celebrated its 300,000th scooter and 50,000th engine produced in this industrial complex.

In addition to winning a leading role in the premium sector of the Vietnamese market, Piaggio Vietnam has enabled the group to move into very important new markets in South East Asia, notably Indonesia, Thailand, Taiwan and Malaysia, the Philippines and Cambodia.

Microsoft Lync 2013 supports VNG’s business success

Deploying optimal IT infrastructure from Microsoft, VNG Corporation, the leader in the field of digital content in Vietnam, has improved the level of customer satisfaction.

In order to improve operational efficiency and bring better services to the community, VNG uses both Microsoft technologies and open source, with over 60 per cent using open source technologies. The biggest challenge of VNG is the integration of systems on many different IT infrastructures for the unity and convenience of the users.

Currently, Microsoft Lync 2013 is identified as a relatively appropriate solution for integration requirements, so VNG decided to use Microsoft Lync 2013. The Microsoft Lync 2013 platform can integrate the entire systems of communication into a unified system, bringing flexibility to the users.

“Thanks to the deployment of technology platforms and solutions of Microsoft Lync, VNG has been able to maintain business operations with high productivity while ensuring the safety and security of information. This would be useful for VNG customers who wish to seek accurate information and services from VNG in the shortest possible time," said Nguyen Thanh Phong, director of IT Department at VNG.

Advanced platform technologies and efficiency-increasing features from Microsoft will support VNG’s management board to operate their work more smoothly, with stability requirements and high efficiency. On the users’ side, Microsoft Lync 2013 will help increase the flexibility in any situation, at anytime, anywhere and in any space. With these effective tools, Microsoft solutions have demonstrated its supports allowing users to concentrate more on their tasks, develop their creativity, rather than take time to do the unnecessary administrative tasks such as editing, searching or sorting out etc.

"With approximately 2,000 staff working in offices in Hanoi and Ho Chi Minh City, VNG activities are required to be completely done online. Internal operations such as conversations, online exchange information, conference or live meeting through Lync are easy, flexible with high quality and security. Thanks to the multimedia tools, such as email, instant messaging, voice and video calls over IP which are available in Lync, the collaboration on projects or regular work of the employees or with customers are fast and more flexible thanks to the “real” status updates, especially operating costs and traditional telephone calls or communications are reduced by over 10 per cent. Implementing Microsoft Lync integrated with existing platforms is a right choice for VNG, because in fact, Microsoft Lync has been helping employees stay connected with VNG system anywhere, anytime, and in many multimedia tools,” added Phong.

Through the deployment of Microsoft Lync technology, VNG said it had significantly improved its business performance and enhanced the ability of providing services to millions of customers.

Microsoft Lync 2013 has been implemented by IT Department of VNG and deployed for the last two-three months. It has enabled VNG to create the integrated communication channel including email, phone, mobile, video conference among others. This has brought benefits to work and subsequently improve the company‘s efficiency. VNG still keeps searching for the latest IT solutions and innovations in accordance with new technology trend.

Unlike current solutions for media and communications, which will require replacing existing IT systems, the Microsoft Lync 2013 solution will not only smoothly integrate with Microsoft Exchange platform, but also be capable of integrating with many other communication tools such as Yahoo Messenger, Skype, PBX,.. Microsoft Lync solution is interactive, integrating well with the current video standard being used (H323) by LifeSize, creating unified interface for many different communication channels. In addition to the cost savings in tangible new platform infrastructure, this solution helps VNG stay out of troubles of information interruption or decreasing labor productivity during implementation and training.

Unified Communications Integration with other messaging systems such as Yahoo and MSN for those who are required to work on many different systems on different platforms of Microsoft, to ensure jobs stay connected without interruption is not easy. And this is one of Microsoft Lync’s strengths. Moreover, by allowing companies to consolidate their communications infrastructure, not only can Microsoft Lync reduce the total cost for communication infrastructure, it also provides a network of communication with reliable quality to complete the important tasks easily. Additionally, the system is seamlessly integrated, and through a familiar, friendly interface, VNG staffs can minimise unnecessary errors as well as the period of interruption system, or when they switch between applications.

"Microsoft Lync solution is highly appreciated by a number of ministries of Defence in Asia, for example the Cambodian Ministry of Defence, thanks to the ability to integrate Microsoft Lync with the existing equipment, while maintaining joint security communication by pre-installed encryption protocols. This is a major guarantee for the enterprise to make the decision of implementing the Microsoft Lync," said Vu Minh Tri, general manager of Microsoft Vietnam.

Japan retailer Nojima enters local electronics market

Nojima, one of Japan’s leading electronics retailers, has entered the local electronics market after acquiring last week a 10% stake in Tran Anh Digital World Co., a deal that further proves the significance of the local electronics retail market.

At the investment collaboration signing ceremony in Hanoi last Friday, Tran Xuan Kien, chairman and general director of Tran Anh, informed his firm would make the most of the deal value of VND64 billion from Nojima to expand its network. The local retailer aims to develop a large-sized supermarket chain of electronics, computers and mobile devices at home.

Tran Anh now is running the largest electronics supermarket chain in the country’s north. It is looking to increase the total number of supermarkets in Hanoi to 10 before the end of this year before expanding business to HCMC and other big cities.

Besides contributing investment capital, Nojima will send Japanese experts to Tran Anh to jointly build up a long-term business strategy and improve customer services for the local company. With 54 years of experiences in the Japanese electronics retail market with nearly 180 electronics supermarkets, the Yokohama-based retailer is expected to blow a fresh wind into Tran Anh, starting from customer services, to bring the highest benefit for customers at its retail stores.

Hiroshi Nojima, president of Nojima Corporation, said his company had studied the Vietnamese electronics retail market thoroughly before deciding to make a business tie-up with Tran Anh. Nojima sees Tran Anh as a local retail company with a proper business strategy and corporate governance system appropriate with the long-term development vision.

Tran Anh, floating its shares on the bourse in early 2010, now is the only listed retail company specializing in electronics products, computers and mobile devices in Vietnam.

Although retailers of electronic products and phones have been in trouble in the past two years due to the declining buying power, the market is still appealing to foreign investors via mergers and acquisitions (M&A).

Before Nojima, Robert A. Willet, former CEO of BestBuy International, had invested in Thegioididong.com after Mekong Capital Enterprise Fund II divested partly from the local retail chain.

Together with an investment of Willet, CDH Electric Bee Limited also invested in Thegioididong.com. Willet and Electric Bee hold a combined stake of 20.41%, Mekong Capital holds 25.84% and the remaining stake at Thegioididong.com with 51.26% is held by founding members.

Two years ago, TD Mobile of Japan had also purchased a 30% stake in the retail chain Vien Thong A.

Nguyen Duc Tai, chairman of Thegioididong.com, said that with a network of over 220 stores nationwide, the firm’s future challenges was not simply to expand the network but also to increase profits and operation efficiency. Therefore, Thegioididong.com is in need of Willet’s experiences.

Thegioididong.com will open many electronics stores in the coming time. Besides, it targets to raise online shopping at the websites Thegioididong.com and Dienmay.com to 20% of total revenues.

Vincom MegaMall Royal City ready to open

Developers, tenants and visitors are eager to wait for the opening of Vincom Mega Mall Royal City – the biggest ever underground trading and recreation complex of South East Asia on July 26.

According to Vingroup – the developer of this mega complex, the opening ceremony of Vincom Mega Mall Royal City will be implemented at Royal City, 72A Nguyen Trai street, Thanh Xuan district of Hanoi.

The opening will be added with many different and sophisticated art performances and special promotion and gift presents will also be taken on this occasion.

Vincom Mega Mall Royal City is the first ever entertainment complex in Vietnam which has been developed accordingly to the international Mega Mall model which can meet the highest demand of the customers and visitors.

Organised with “all in one” model, the complex combines a range of values of tourism, shopping and entertainment, as well as social exchanges, friendship gathering and especially family entertainment. It is not a home for more than 800 booths but also offering unique and new entertainment activities to its visitors.

Vincom Mega Mall Royal City combines a range of different unique facilities. It has the largest indoor water park in South East Asia, the first ice-skating rink in Vietnam, Vinpearl games, Fairytale Garden, Cinema, hypermarket, electronics and furniture centre. It also has food street of 44,000 square metre with more than 170 restaurants.

Vinpearl Water Park Royal City is listed in the top attractive games of Asia countries. In the total area of 24,000 square metre, Vinpearl Water Park Royal City is divided into 14 different items such as family and children swimming pool, professional sport pool, waves created pool, extreme free-fall water slides, super-speed spiral slides and concave super sliding tube.

Apart from that, Vincom Mega Mall Royal City also has the biggest in Vietnam - Vinpearl Ice Rink Royal City. With total area of more than 3,000 square metre, the Ice Rink will serve 150 players for every turn and especially players will be trained by Russia trainers – the homeland of skiing.

World Games is also another item which can not be missed in this complex with different games and the KixCity – especially served for children from 3 to 15 years.

The opening Vincom Mega Mall Royal City will be served with a special art performance attended by leading singers in Vietnam now such as Dang Duong, Viet Hoan, Hoang Tung, Semi Classic orchestra and Ho Ngoc Ha – one of the most favour singers in Vietnam, and dragon dance.

Especially street activities under the European style will be held from 17 to 21pm on July 26, 27 and 28 at the Royal City Square to welcome visitors with many other greeting activities such as photos shooting with status, music performance, portrait painting and street magic.

Vincom Mega Mall Royal is developed by Vingroup – the owner of four strategic brands: Vincom in real estate, Vinpearl in tourism, Vincharm in healthcare and Vinmex in high-quality healthcare services.

GE helps training Vietnamese medical workers

GE Healthcare, a unit of General Electric Company (NYSE:GE), in coordination with Vietnam Ministry of Health  recently conducted a GE LEAN management training course for individuals associated with the healthcare sector in Vietnam.

LEAN is a methodology that encourages hospital staff to work together to improve the efficiency of their processes by eliminating waste without the requirement of extra resources. Hospitals operating to LEAN principles benefit from improved efficiency, better employee engagement and financial performance. This streamlining also affords more time for patient care.

GE LEAN principles have been applied in hospitals around the world and have been successful in improving operational and financial performances as well as staff retention rates. Last year, GE’s first LEAN training in hospitals in the Mekong Delta’s Dong Thap province received positive feedback from senior managers.

This year’s training programme was attended by senior-level managers including leaders from the Ministry of Health, university lecturers, and members of the board of management from hospitals such as Viet Duc Hospital, the Central Pediatric Hospital and the Central Obstetric Hospital. The programme will be split into two stages. First, GE personnel teach selected trainees until they are qualified to be trainers. Once they have mastered the initial training, they will be able to move onto the second stage and spread the message of LEAN.

This training is also part of the company’s initiative to address the need for healthcare education and capacity building across ASEAN. GE Healthcare in ASEAN recently launched the GE ASEAN Healthcare Learning Institute (‘AHLI’), a virtual academy in collaboration with renowned healthcare professionals and leading healthcare providers within the region and globally, AHLI offers clinical, technical and leadership education. These trainings include online, classroom as well as immersion programmes.

“We are proud to deliver GE LEAN training in Vietnam’s hospitals. As part of the dual-stage training initiative, LEAN principles will be applied on a wider scale to address concerns in local hospital management, help contribute to upholding the quality of healthcare services and offer better access for patients,” said Tran Anh Tuan, country manager of GE Healthcare in Vietnam.

The LEAN approach to improving Vietnam’s hospital system is one of the commitments made by GE following the Memorandum of Understanding signed between the company and Vietnam’s Ministry of Health in August 2012. The MOU, which was witnessed by GE chairman and chief executive Jeffrey Immelt and, Vietnam’s Minister of Health Nguyen Thi Kim Tien, is part of GE’s “In-country, For-country” (ICFC) initiative, which focuses on improving local innovation and building products, resources and technology for local needs. The goal is to develop products that are tailored specifically to Vietnam’s conditions and actual needs.

GE was one of the first American companies established in Vietnam during 1993 even before the US Embargo was lifted. GE first set up a representative office in Hanoi in 1993, and subsequently in Ho Chi Minh City in 2001, working in partnership with local organisations. In 2003, GE established GE Vietnam Ltd, a 100 per cent GE capital investment that offers a wide range of after-sales services in the fields of medical, electrical and energy equipment.

BIDV, construction bank finance home, road projects

The Bank for Investment and Development Bank of Vietnam (BIDV) and Vietnam Construction Bank have signed five deals with partners to fund highway upgrade and budget home projects in the central region.

The agreements, inked in the central province of Binh Dinh July 19, started up a scheme involving four sides – banks, investors, contractors and building material makers.

Of the five deals, four are for upgrading and refurbishing national highways 1 and 14, as well as building Hoang Quan Plaza in the central region.

The newly-launched scheme enables investors, contractors and building material companies to get access to bank loans. The Vietnam Construction Bank acts as the sellers’ bank, with the sellers being the building material makers, while BIDV will issue its guarantees for the buyers, including home buyers.

Previously, BIDV and the Ministry of Transport signed a cooperation agreement to upgrade the National Highway 1 with the total loan of VND30 trillion ($1.4 billion plus), with VND20 trillion used to finance build-operate-transfer (BOT) projects.

The Vietnam Construction Bank made its debut late this May following a State Bank of Vietnam announcement that the southern province of Long An province-based TrustBank turned into the construction bank. Its extraordinary shareholders’ meeting late June agreed that its currently chartered capital of VND3 trillion ($143 million) would increase to VND7.5 trillion ($359 million).

Technological fair offers investment opportunities

The Japanese Embassy to Vietnam announced that there would be a Japanese technological exhibition in Hanoi during September 6-9, 2013.

The exhibition will showcase state-of-the-art technologies in many industrial sectors, with the participation of many famous Japanese firms and Vietnamese firms in Japan.

The firms include Shimizu Corporation operating in infrastructure construction, JFE Group engaging in environmental technology and energy, Hitachi Asia Vietnam Company with social infrastructure solutions.

Besides, the exhibition will also be joined by vehicle manufacturers like Honda Vietnam Co.,Ltd, Toyota Motor Vietnam, Isuzu Vietnam Co., Ltd, Yamaha Motor Vietnam Co.,Ltd. and Terra Motors Vietnam Company Limited.

Electrics product makers like Panasonic Vietnam Co., Toshiba, Sony Electronics Vietnam Company Limited and Mitsubshi Electric Vietnam Co.,Ltd will also showcase their technologies at the exhibition.

Technologies in making robots and the performance of robot Ashimo will also be introduced at the event.

“With this exhibition, Vietnamese people will help support the companies in their hi-tech innovation and development, and have better understanding about the supporting industries,” said a document from the embassy.

This event is part of the “exhibition on supporting industries’ technology” jointly organised by Vietnam’s Ministry of Industry and Trade and the Japan External Trade Organization (JETRO).

At present, Japan is supporting Vietnam to build its industrialisation strategy which will help Vietnam become an industrialised nation by 2020.

“Such support and the introduction of Japanese technologies via this exhibition will help boost Vietnam’s industrialisation strategy,” the document said.

Gov't monitors rising forex rate closely

The exchange rate between the Vietnamese dong and US dollar is likely to continue rising in the remaining months of the year, but it would still be under the control of the State Bank of Viet Nam, according to a source from the Ministry of Industry and Trade.

The ministry's Commercial Information Centre predicts that the rate may increase from VND21,500 to 21,700 per dollar by the year-end due to increasing demand for the greenback, but there would be no major change in supply.

The recent forex rate increases have been caused by various factors that have resulted in an imbalance between supply and demand for the dollar, the agency says.

However, there are other factors that will stabilise the forex rate in the remaining months of the year, one of which is that the lending and deposit interest rates of both dong and US dollars would continue to fall.

Another factor is that the central bank has affirmed that it would not devaluate the dong.

As the value of the dong is maintained and interest rates on dollar loans and deposits go down, the greenback will become less attractive and people will stop hoarding it.

In addition, although the market's demand for the greenback is predicted to rise during the rest of the year, there will be adequate supply because disbursement of the direct foreign investments will be stable.

In the last five months, about US$4.6 billion was disbursed, up 1.6 per cent over the same period last year.

The country's foreign exchange reserves will be maintained in a stable manner, creating a firm financial basis for the central bank to intervene and stabilise the financial market if there are strong fluctuations, the centre says.

It concludes that the market will not experience a foreign exchange "fever" that has previously had a shock effect on the economy.

Developer pounces on stagnant real estate sector

Vietnamese real estate developer Son Kim Land has received a US$37 million investment from EXS Capital, an independent investment firm based in Hong Kong, according to director Trinh Bao Quoc.

On top of that, EXS Capital may raise its investment up to $80 million in the future, Quoc told Viet Nam News yesterday.

The HCM City-based company is the real estate arm of the Son Kim Group and is currently operating six development projects, including two large complex areas with apartments, offices and a commercial centre in District 2 in the city.

"Money will be invested to develop the company's ongoing projects as well as buying other real estate projects," said Quoc.

According to the co-founder and CEO of EXS Capital, Eric Solberg, the Vietnamese company is selected because of its solid track record and attractive projects in the pipeline, especially the planned metro line and metro stations in District 2 in HCM City.

Although the real estate sector in Viet Nam is fairly stagnant at the moment, Solberg believes in the company's investment.

"Real estate development is a long-term game. Anything we start to build today will not reach the market for a couple of years. We have great faith in the Vietnamese economy over the long term, so as the market is relatively weak at the moment, it is a very logical time to buy in," he said.

"We believe Son Kim Land's projects will work quite well, even if the current market conditions continue. Any recovery is good news for both Son Kim Land and its shareholders, including our investors."

EXS Capital, founded in 2007, has offices in Hong Kong and Tokyo. The group has injected over $250 million in alternative investments in Asia, representing over $1 billion in enterprise value. This is EXS Capital's first sponsored investment in Viet Nam.  

Insurance firms to lift their game

The insurance sector will focus on restructuring the market as well as its businesses so as to maintain stability and sustainable development, the Ministry of Finance's Insurance Supervisory Authority (ISA) has said.

The industry expects to see a total premium of VND43.711 trillion (US$2.082 billion) this year, a rise of 6.5 per cent over last year.

Non-life insurance is hoping for a record growth rate of 5 per cent, to reach VND23.9 trillion, while life insurance is aiming at VND19.7 trillion, an increase of 9 per cent year-on-year.

The total investment made by the insurance sector is projected at VND7.3 trillion, up 10 per cent over last year.

To meet these targets, several insurance firms have concentrated on becoming more professional and improving the quality of their services.

Nguyen Truong Giang, general director of the Post and Telecommunications Insurance Joint Stock Company (PTI), said that they would become more competitive by improving the quality of their key products.

Stephen Clark, the AIA Insurance Company's general director, said the company would focus on developing agencies into a standard.

Sharing this idea, Le Van Thanh, general director of Bao Minh Insurance Joint Stock Company, said they planned to restructure their organisations not only at the head office level, but including subsidiaries as well.

In addition, the company wants to develop its distribution network, restructure its range of products and investments structure as well as improve the quality of services.

The sector experienced a lower rate of growth in the first half of this year because of economic difficulties.

Statistics from the ISA show that non-life insurance premiums in the first six months of this year stood at VND11.8 trillion ($562 million), up by only 2.2 per cent over the same period last year.

Life insurance also struggled to maintain a growth rate of 13 per cent, making just VND9.1 trillion ($434 million).

In total, insurance premiums experienced a growth rate of 6.86 per cent over the same period last year, down from the growth rates of 2012 and 2011, which came in at 17.8 per cent and 22 per cent respectively.

VN, Thailand fight money laundering

The State Bank of Viet Nam and Thailand's Anti-Money Laundering Office have signed a Memorandum of Understanding on information exchange to fight money laundering.

Speaking at the signing ceremony in Ha Noi on Monday, SBV Deputy Governor Dang Thanh Binh said the MoU would facilitate the collecting and analysing of information that would help prevent money laundering.

Binh said Viet Nam was making every effort to promote international co-operation and information exchange with other countries, especially those in the Asia-Pacific region.

The SBV praised Thailand's anti-money laundering measures and said it would co-operate further with the country in this area.

Thailand issued a law on anti-money laundering in 1999 and another anti-terrorism law this year.

Viet Nam has signed MoUs on information exchange about anti-money laundering with six foreign financial-intelligence agencies.

Big names to hit woodwork fair

Up to 260 businesses from 19 countries and territories will take part in the 10th Viet Nam International Woodworking Industry Fair in HCM City from September 25-28.

Spread over more than 500 pavilions, businesses can expected 20,000 visitors.

The European Federation of Woodworking Machinery Manufacturers will attend the event, along with similar associations from Germany, Italy, the US and Taiwan.

In the first half of this year, Viet Nam exported US$2.46 billion worth of wood products, a year-on-year increase of 12.5 per cent.

The figure is forecast to hit $5.5 billion, said HCM City Handicraft and Wood Industry Association vice chairman Dang Quoc Hung.

Electrical equipment goes on show

More than 100 domestic and foreign enterprises are showing their goods in two trade fairs which opened in HCM City yesterday.

They are the 6th Viet Nam International Technology and Equipment Exhibition and the 3rd International Exhibition on Technologies of Green Energy and Energy Saving Products.

The combined 250 booths feature exhibitors from Japan, India, South Korea, mainland China, Spain, Turkey, Malaysia, Singapore, Australia, Taiwan and Viet Nam.

The exhibitors are also introducing energy-saving products and devices using renewable and environmentally friendly energy.

Vingroup to build finance centre

Vingroup Joint Stock Company has gained approval to build an international finance-banking centre and a trade and service complex in Thu Thiem urban area in HCM City.

According to the municipal People's Committee, the projects will cover a total area of 250,000sq.metre.

The committee said Vingroup would commission international consultants to draw up detailed plans for the projects.

Shell Viet Nam launches new oil

Shell Viet Nam has launched a new product, Shell Rimula R4 X diesel engine oil, with triple-protection benefits.

The new product improves engine and oil durability by offering acid control and prevention of deposits, thus keeping engines clean for better performance.

It also keeps apart the moving metal engine surfaces and prolongs engine life.

Local business sentiment falls

Business optimism in Viet Nam dropped by a third in the second quarter to 14 per cent, one of the lowest rates in the region, according to a quarterly global business survey by Grant Thornton.

Kenneth Atkinson, managing partner of Grant Thornton Vietnam, said: "The figures make interesting reading. They reflect business owners' concerns over their current business situation but with some optimism for growth in the economy over the next 12 months.

"In addition to the numbers reported here, there are still constraints on growth due to the cost and availability of finance and red tape.

"These are not new and are constantly being brought to the attention of the Government.

"However, with the recent growth in credit, there is some causes for optimism on one of the issues but interest costs do remain relatively high."

Though optimism is falling, expectations of revenue growth and profitability were stable at 86 per cent and 88 per cent respectively.

But 64 per cent of respondents were either neutral or expected a better performance by the economy over the next 12 months.

There has been a steep fall in the number expecting to increase R&D spending — from 40 per cent to 20 per cent.

There was a significant increase —from 36 per cent to 64 per cent — in those stating that cost of finance was a constraint on their business.

The International Business Report, polling more than 3,200 businesses in 44 economies and released on July 23, also showed a dramatic reversal of fortunes for business leaders in the world's two largest economies.

SME competitiveness sharpened by US funding

Small and medium-sized enterprises (SMEs) in Viet Nam will be networked to develop under a project sponsored by the US Embassy in Viet Nam.

The project, which began on July 19, aims to create opportunities for young entrepreneurs to learn from economists and successful entrepreneurs from major groups and companies.

This year, the project will be implemented in the north for 10 months, helping young local entrepreneurs experiment with business solutions and experience.

According to Central Institute for Economic Management (CIEM) Deputy Director Vo Tri Thanh, Vietnamese SMEs lacked strong co-ordination and connectivity, which would pose a risk to the national economy.

Strong connectivity would help them secure a firm foothold in the market, Thanh added.

Launched in October 2011, the project is one of 36 worldwide of their kind to have been selected for funding by the US Department of State.

Bankruptcies to go ahead

Deputy Prime Minister Hoang Trung Hai has instructed Viet Nam National Shipping Lines (Vinalines) to complete procedures to bankrupt two of its members, while the Viet Nam Shipbuilding Industry Group (Vinashin) plans to stop the operation of 216 subsidiary companies.

Hai chaired a recent meeting on the operation and implementation of Vinalines' restructuring plan with relevant ministries, the State Bank of Viet Nam and Vinalines. Hai told the company to focus on solving financial problems and accelerating the equitisation of its members following the approved restructuring plan.

He instructed Vinalines to complete bankruptcy procedures for two of its members, Vinashinlines and Falcon, which were unable to pay back massive debts they owed last year.

Concerning Vinalines'debts, Hai told the group to work with the SBV and commercial banks to find a solution. According to local media, Vinalines has a debt of US$321 million itself and billions of dollars more in its subsidiaries.

Vinashin's general director, Vu Anh Tuan, said the group would only focus on the parent company and 42 core units, while 216 underperforming units would be merged with existing companies or bought out.

With regards to debt restructuring, 19 banks have agreed to cut the US$1.35 billion the group currently owes by 75 per cent.

Minister of Transport Dinh La Thang said that at the end of this month, his ministry must submit a report to the Government on Vinashin's progress, so the group needed to review all existing problems and propose solutions to resolve them.

Leading plastics company signs contract with Japan

Tien Phong Plastic Joint Stock Company signed a contract with Sekisui Chemical Co Ltd from Japan on Monday in a bid to promote investment and expand their markets and operations in regional countries.

Under the contract, Tien Phong, a leading plastics producer in Viet Nam, will sell Sekisui Chemical's products to Japanese ODA projects in Viet Nam, among others.

The Japanese company will transfer equipment and provide technical assistance for Tien Phong to produce these products. It will also share information relating to patents, technology and trademarks.

If sales total 300 million JPY (US$3 million), the two sides will consider the establishment of a joint venture in Viet Nam.

Mercedes Benz invests in advanced coating facility

Mercedes Benz is increasing its investment in Viet Nam by opening its first electro-dipping coating facility worldwide in HCM City.

The advanced and eco-friendly facility has an investment of nearly US$10 million.

Mercedes is using Viet Nam as a pilot country for this type of plant.

Located inside the Mercedes-Benz Viet Nam factory in the city's Go Vap District, the facility covers an area of 5,000 square metres.

$386.9 million profit for Vinamilk during first half

The Viet Nam Dairy Products Joint Stock Company (Vinamilk) has recently announced its second quarter business results of nearly VND8.125 trillion (US$386.9 million) in net revenue, up 14 per cent from the same period last year.

In the first six months of the year, Vinamilk gained VND14.85 trillion ($707 million) in net revenue, up 14 per cent year-on-year, of which 87 per cent came from the domestic market, the company said.

After tax profits in both Q2 and H1 jumped 22 per cent to VND1.822 trillion ($86.8 million) and VND3.347 trillion ($159.4 million) respectively.

Vinamilk's total assets have increased 6 per cent to over VND21 trillion ($1 billion) since the beginning of this year.

Mushroom farms come out of the dark

The agricultural sector should come up with appropriate measures to develop mushroom cultivation more effectively in the country, experts said at a forum last week.

The Ministry of Agriculture and Rural Department's Cultivation Department said mushrooms had a surprisingly high nutritional value, and this had seen demand for the fungi increase in foreign countries.

Mushroom consumption has increased by 3.5 per cent per year on average in the US, EU and Japan. Per capita consumption of mushrooms in these countries and regions is about 4-6 kilogram a year, according to the department.

Mushroom cultivation in some Asian countries and territories, including the Republic of Korea, Japan and Taiwan, has been industrialised and become an important economic sector.

Vietnamese farmers now produce 16 kinds of mushrooms, including straw, button, oyster, wood ear and reishi.

Mushrooms are mainly cultivated in southern provinces including Dong Thap, Soc Trang, Tra Vinh, Can Tho City, Dong Nai, HCM City, Ba Ria-Vung Tau and Binh Phuoc.

The country produces about 250,000 tonnes of mushrooms a year, with more than half of that sold in domestic markets as fresh produce and earns about US$25-30 million per year from exports.

With an abundance of mushroom growing materials, including straws, logs and enriched sawdust, which could reach 40 million tonnes per year, Viet Nam had a great potential for developing the mushroom industry, delegates agreed.

Current production did not match existing potential, they said at the forum organised by the National Agricultural Extension Centre in Dong Thap Province.

Mushroom cultivation was still scattered and conducted mostly at the household level, which yielded low economic efficiency, said Nguyen Nhu Hien of the Cultivation Department.

The number of mushroom processing firms and exporting companies remained modest, so there was a shortage of stable outlets, he said.

The country plans to expand mushroom cultivation and produce about 1 million tonnes of mushrooms of all kinds by 2020, of which 500,000 tonnes will be for export.

To meet the target, the agricultural sector should seek reasonable measures to develop the mushroom industry, said Le Hong Vinh, deputy director of the Agricultural Genetics Institute's Biotechnology Centre.

Restructuring cultivation and diversifying mushroom strains to satisfy market demand as well as conducting researches to diversify mushroom growing materials were among the measures, he suggested.

Meanwhile, the Government should provide tax incentives to enterprises involved in this sector, he said.

Hien called for the establishment of concentrated mushroom cultivation areas and set up a close link between production and consumption.

He also urged the sector to enhance the use of hi-technology in production, preservation and processing and build brand for Vietnamese mushroom in the world market.

Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR