Brand forum to promote Viet Nam

The Trade Promotion Agency, run by the Ministry of Industry and Trade, joined hands with the Viet Nam News Agency in organising a forum based on the Vietnamese brand in Ha Noi this coming Wednesday.

The event is expected to attract 43 organisations as well as 200 representatives from various enterprises, including brand experts and marketers.

Discussions will centre on the development of brands related to Vietnamese commodities in order to improve the efficiency of promotion.

Prudential reels in $30 million

Prudential Assurance Viet Nam reported a new business premium of VND615 billion (US$30 million) during the first half of the year, an increase of 21.2 per cent year on year.

Total premium income increased to VND2.8 trillion ($137 million), a rise of 12.3 per cent, which in turn accounted for a 38 per cent market share, total assets reaching VND30 trillion ($1.5 billion), an increase of 13.3 per cent.

Prudential Plc, at the same time, experienced a 20 per cent rise in new business profit while International Financial Reporting Standards (IFRS) operating profit and European Embedded Value (EEV) operating profit increased by 25 and 28 per cent, respectively.

ABBank cuts lending interest rate

An Binh Bank yesterday announced a 1.5 percentage cut in borrowing interest rates aimed at private, individual and household businesses to around 19-22.5 per cent annually.

The interest-privileged programme will run until the end of this year. Commercial banking interest rates currently range from 20-24 per cent annually.

By the end of July, ABBank's total outstanding loans reached VND18 trillion (US$864 million), an increase of 11 per cent against the same period last year. Total mobilised capital manged to hit VND27 trillion ($1.29 billion), a rise of 29 per cent year on year.

PetroVietnam eyes Bolivian gas

The Vietnam National Oil and Gas Group (PetroVietnam) has signed a cooperation agreement with the state-owned oil and gas company of Bolivia (YPFB) aimed at studying the South American country's gas potential.

The Bolivia News Agency (ABI) reported that results from the study would lay the foundation for partners to sign contracts on natural gas exploration, exploitation, development and production in the Isipote, Yoai and Algarrobilla areas in southeastern Bolivia.

Bolivia is estimated to have natural gas reserves of around 281 billion cu.m and is calling for foreign investors to exploit its huge resources. The country exports around 30 million cu.m of gas to Brazil and some 7 million cu.m to Argentina annually.

Beer distributors face flat sales

Beer distributors are facing difficulties as retails sales have fallen.

Nguyen Thi Phuong, who runs a company distributing beer and beverages in HCM City, said recently her company was currently selling only 500 barrels per month, less than half of previous levels.

Sales of other beverages and snack items had also fallen by about 30 per cent, resulting in her company holding a large stockpile of unsold goods and suffering losses, Phuong said.

Hue Brewery Co general director Nguyen Mau Chi has also noted a drop in beer consumption, requiring him to step up sales to distributors and reduce prices by about 9 per cent in order to move inventory and avoid higher inventory taxes. Sevicing bank loans and avoiding product expiration dates were also increasingly problematic, Chi said.

Slow construction causes steel build up

With construction already in its annual seasonal slump, sales of construction steel have fallen even further than usual and stockpiles have reached a near-record of about 600,000 tonnes, according to the Viet Nam Steel Association.

The association blamed rising prices and the Government's austerity measures taken to curb the inflation for the slowdown in construction and steel demand. Among the items of public spending target first for cutbacks were State budget-funded construction works deemed inessential.

Tighter credit policies for enterprises in non-manufacturing sectors were also hurting the construction industry, the association said.

The sales manager for a steel company who asked to remain anonymous said that his company's inventory stood at about 700 tonnes, a potential disaster in the context of skyrocketing interest rates and a drastic slowdown in new construction.

The company would have no choice but to wash out inventories at discounted prices, causing it to eat huge losses, he said.

Steel companies pay an average of VND200-300,000 in interest costs on each tonne of finished steel products each month, according to the association, many members of which now face monthly interest costs of VND120-180 billion (US$5.7- 8.6 million).

Many steel companies were scrambling to find foreign markets for export, it said.

Meanwhile, the Ministry of Industry and Trade has urged enterprises to draw up suitable production plans while maintaining proper stockpile indices. In the first seven months of this year, the stockpile index of the manufacturing and production sector rose by 16 per cent against the same period last year, according to the General Statistics Office.

HCMC enjoys surplus, capital faces deficit

The country's two largest cities recently posted opposing sets of results related to trade turnover achieved during the first eight months of this year.

While HCM City announced a trade surplus of US$1.53 billion, the capital city reported a trade deficit of nearly $10 billion.

HCM City's Statistics Office said that in August alone, the city's export value reached an estimated $2.5 billion, a month-on-month decline of 20.8 per cent.

Export value of State-owned firms decreased by 25.3 per cent while export turnover derived from foreign-invested firms saw a growth of 0.9 per cent.

August figures revealed the total export value of the city having hit nearly $18.3 billion, a rise of 20.5 per cent over the same period last year.

Import value during the same period managed over $16.7 billion, a year-on-year increase of 24.5 per cent.

The Ha Noi statistic office reported the city's total import value in the January - August period declined by 18.1 per cent over the same period last year to nearly $16.4 million.

While exports managed to increase by 27.2 per cent, it was unable to help the city cut down its trade deficit as total export value reaching only $6.4 billion.

In August alone, Ha Noi earned $982.5 million from exports while spending nearly $2 billion on imports.

Resort villas bask in sunshine amid gloom of property market

Though the property market remains depressed, one segment is doing relatively well: resort villas.

Dozens of resort-villa developments are taking place in locations like Da Nang, Ba Ria – Vung Tau, Nha Trang, Quang Ninh, Hai Phong, Phu Quoc, Con Dao, and Phan Thiet.

Some major projects include Blue Sapphire in Vung Tau, the Nam Hai in Hoi An, Hyatt Regency in Da Nang, and Amco Mibaek Vina in Hai Phong City.

Developers say demand for million-dollar units has been fair, while investors say they prefer to put money in resort villas because it will earn them rentals from tourism.

Nguyen Thu Huong, CEO of the Chicago, US-based MH Golden Sands Group which is developing the Saint Simeon project on Long Hai Beach in Ba Ria – Vung Tau, said only 37 villas are planned to be built. Five of them were finished late last year and sold out at US$0.9-1.9 million, she said.

The next batch of five were put on sale recently and several customers had come to look, she said, adding investors are especially attracted to villas in advantageous locations and with luxurious facilities.

The $72-million development will be finished in 2014.

International property management company CBRE confirms that resort villas are the most marketable segment in the property market.

It estimates that there are more than 55 projects under development along the coast and rivers and on islands, mostly in the Central region, with more than 5,300 resort villas and 6,600 luxury apartments.

Many of the resort villas have come into the market since last April. Analysts say this sector is a much better investment option in Viet Nam than trading foreign currency, gold, or stocks.

Da Nang tops in the number of developments.

Entrepreneurs move to private firms

Tran Kim Thanh, chairman of the HCM City Stock Exchange-listed confectioner Kinh Do Corp, and his wife registered to sell all of their 14.5 million shares in the company this month.

Thanh explained he was merely consolidating his family's holdings under the PPK one-member limited company owned by him to ensure more effective management.

He also planned to move his holdings in all other companies to PPK, he said.

This is becoming a popular trend among Vietnamese entrepreneurs.

In July, family members of Dang Van Thanh, chairman of Sacombank (STB), transferred almost 15 million STB shares to Thanh Thanh Cong Trading and Production Joint Stock Company, which is chaired by his wife Huynh Bich Ngoc.

The STB chairman also said the transfer from individuals to a company was meant to make their management more "professional."

As far back as in 2009, Nguyen Duy Hung, chairman of Sai Gon Securities Inc, listed on HOSE as SSI, moved more than 14 million SSI shares he held to his own Nguyen Duy Hung Company.

Industry insiders said that such a move also enables the use of the shares as security to get loans easier and causes less negative impacts on other investors even in the case of divestment in future.

Besides, having corporate status while discussing capital contribution to a future joint venture or investment projects appears more professional, they pointed out.

Another major benefit is the savings on tax payments: while the tax rate on securities trading is either 0.1 per cent of the transaction value or 20 per cent of the profit, the corporate income tax is 25 per cent after deducting all kinds of expenses and costs, including operations, marketing, and even losses on investments.

The latter is usually likely to be lower.

Third Son La turbine turned on

Son La Hydropower Plant was hooked up to the national grid early this morning.

Viet Nam's biggest power plant can now generate 30 million kWh a day.

The plant's third turbine began generating electricity in a safe and correct fashion, said Nguyen The Chinh, deputy director general of Lilama 10 JSC, an affiliate of Viet Nam Machinery Erection Corporation (Lilama), which built the turbine.

According to Electricity of Viet Nam, this morning's event was of great significance, and will help the plant meet a significant proportion of the country's energy needs.

The turning on of the turbine comes just ahead of National Day on September 2.

Nguyen Dinh Tinh, director of Lilama 10 JSC's Son La branch, said workers had been working flat out to ensure the project was completed on time.

The first and second turbines, which came into operation last January and April respectively, have generated a total 3.25 billion kWh of electricity.

Construction of the VND37 trillion (US$1.8 billion) power plant, located in Muong La District, in the northern mountainous province of Son La, started in December 2005.

Vietnam, Myanmar boost agricultural cooperation

The Fisheries Departments of Vietnam and Myanmar will set up a working group on fisheries cooperation and hold its first session soon in Hanoi.

The plan was revealed during talks between Minister of Agriculture and Rural Development Cao Duc Phat and Myanmar Agriculture and Irrigation Minister Myint Hlaing, in Hanoi on August 22.

The two sides agreed to boost cooperation in personnel training and exchange of research results and scientific advances in the agricultural sector.

The Vietnamese side asked Myanmar to consider and sign an agreement on forestry and implement the memorandum of understanding on agriculture.

Minister Myint Hlaing pledged to create favourable conditions for Vietnamese businesses to invest in agricultural areas such as long-term leasing of land for industrial crop growing, processing and husbandry. Vietnamese businesses can rent land to grow rubber for 50 years or more, he added.

Minister Phat said that many Vietnamese businesses are ready to cooperate and invest in rubber, sugar cane planting and processing.

Knowledge-based economy way forward for Vietnam

An intellectual business community motivated by research and creation would help stop the country being heavily dependent on natural resources and low-cost labour.

First and foremost, it is clear that enterprises have yet to target science and technology as a driver for economic growth.

According to Ministry of Science and Technology’s (MST) Technology Application and Development Department of VND51.668 billion ($2.5 million) put into technology research, application and transfer contracts during 2008-2009, just 12-15 per cent of study results were put into production and life practices.

The private sector’s capacity in science and technology research and application remains low. According to the MST, only 10 private firms were recognised as science and technology businesses while minimal capital amounts were put into firms’ research and development activities every year.

Parallel to financial issues, a slew of legal hindrances deter firms from pouring capital onto research and development.

Enterprise scope is another issue as reality shows that up to 98 per cent of private equity firms are small, making it hard for promoting research and development.

Besides, rampant impingement of industrial property rights was one of key factors suppressing firms’ creativeness and Vietnam’s technology market development.

The MST inspectorate statistics show that during 2006-2009 19,167 cases of intellectual property right violations were unveiled, averaging 532 cases per month, resulting in over VND16 billion ($770,000 million) in fines.

Promoting firms’ sense for creativity is crucial for development. Firms should be considered the core of science and technology research, development and reform supportive programmes. Businesses should be encouraged to partake in research and creative activities servicing themselves and the community development.

This must be embedded in state development policies. Businesses want to know state’s proposed expenditure in research and development with clear figures on how much money will come from state coffers and what amount would be offset by businesses. These concrete figures, combined with relevant legal framework and supportive programmes will inspire firms, particularly those coming from the private sector, to jump into this field.

Increasing links between research and development bodies and the business community should also be strengthened. Several public-private partnership models in research need to be applied. Research projects and programmes must be commercially viable and feasible for application by firms.

Through this way, we could expect Vietnamese firms to be capable of creating and mastering some technologies which would be commercially viable in the world marketplace within the next decades.

Time finally runs out for delayed Gia Lai project

The door has slammed on a long delayed Gia Lai province Australian-backed project.

The province’s people’s committee has revoked the investment certificate of Dong Xanh Gia Lai Joint Stock Company’s seven year delayed, $4.5 million project to build a 195.8 hectare farm with modern Australian technology.

The company, located in the province’s Pleiku city, was headed by Pham Van Khoa, an overseas Vietnamese from Australia.

Early this year, the committee also enacted a decision ending the operation of this project. Under which, the company was required to remove all of its assets from the site already given to it by the province before July 25, 2011.

Granted an investment certificate in 2004 the project, located in Ia Pech commune, failed to be implemented despite several warnings, according to the provincial Department of Agriculture and Rural Development.

A department source said the company did not want to carry out the project as it wanted to transfer it to another investor.

The source said the project was given all possible preferential conditions for land sites, investment procedures and infrastructure works such as roads, electricity and clean water.

This project, expected to employ 200 local workers after completion, was divided into two stages. The 2005-2007 period would see construction of offices and breeding facilities and the post-2007 period to witness construction of slaughtering houses, and food and animal feed processing chains.

Market outlook unclear in short term: brokers

Securities firms have found it hard to predict what will happen next in the local stock market this week as last week’s rallies were not strong enough to secure a long-term upswing for the VN-Index.

The market fell back slightly last Friday over fears the U.S. economy might be in a second recession. The VN-Index still jumped 16.84 points against the previous week to close at 400.76 on four consecutive rising sessions.

Liquidity was almost unchanged from a week earlier with an average 26.1 million shares worth VND451 billion traded a day.

APEC Securities Co. in its weekly report said this was a big achievement of the local market last week while most stock exchanges plummeted worldwide. Despite bad news about the global economy, the Vietnamese economy showed signs of stability and resilience after some provinces reported slight increases of the consumer price index (CPI) and even declines this month.

Banks’ lending rates are also expected to ease in the coming time although it is hard to slash them to 17-19% in September as projected by the central bank’s governor, APEC said.

“Technical analysis suggests the market would see a short-term recovery. However, it is too soon to think about a medium or long-term rally given current macro uncertainties, especially strong domestic and global gold price spikes,” the broker added.  

Fiachra Mac Cana, managing director of HCMC Securities Corp., said guidelines will be in place allowing margin trading to become legal from an operational point of view this week at a limit of 30% and with a list of approved stocks published by the stock exchanges based on various criteria including liquidity.

“The framework is what was expected for some time but still amounts to much stricter interpretation compared to the recent status quo whereby actual market practices have been much laxer,” Mac Cana added.

“Then again, most larger brokers have already prepared for this eventuality so finally giving the green light may boost market liquidity somewhat. However, with banks still reducing lending exposure to the securities sector, we don’t expect much of a reaction from the market for the time being.”

The Hanoi market gained slight ground given two rising and three falling sessions last week, with the HNX-Index advancing 1.51 points, or 2.29%, against the previous week to close at 67.53. The market’s liquidity was sharply higher with the average daily volume of 33.2 million shares worth VND331 billion, both surging by around 31% from the week earlier. The market is expected to move up again this week.
 
Vietnam to promote direct purchase of African cotton

A delegation of 26 members representing 15 African enterprises is in Vietnam for a visit aimed at finding ways to directly export cotton into Vietnam, instead of shipping via a third country, a trade official said.

Ly Quoc Hung, director of Africa, Western and South Asia Markets Department under the Ministry of Industry and Trade, told the Daily last week that the cotton imported from Africa accounted for 20% of the total imported cotton volume at present.

However, as the two countries’ enterprises had little mutual knowledge as well as some problems over the payments, Vietnamese enterprises had long been importing cotton from Africa mainly via a third nation, which caused prices to surge, Hung added.

Therefore, the ministry has coordinated with the International Trade Center, Vietnam Textile and Apparel Association, and Vietnam Cotton and Spinning Association to hold meetings for enterprises of the two countries in Hanoi and in HCMC to bridge the direct trade.

The meetings are expected to facilitate Vietnamese manufacturers to boost exports of chemical products and fertilizers to Africa for cotton growers while African counterparts can directly ship their cotton to Vietnam.

According to the Department of Western and South Asia Markets, in 2010, Vietnam bought cotton from 22 African enterprises worth a total of US$164 million, including US$44.7 million worth of cotton from Tanzania, US$32.2 million from Ivory Coast, and US$24.1 million from Mali.

Currently, Vietnam is reliant on imported cotton mainly from the U.S., India and Africa. The country last year imported 300,000 tons of cotton while local production was merely at 3,500 tons, according to the Vietnam Cotton and Spinning Association.
 
Mercedes-Benz Vietnam offers incentives for customers

Mercedes-Benz Vietnam has said it has special offers for all buyers from now until September 30 in celebration of the birth of the first motor car in the world.

The automaker will support 5% registration fee for the Mercedes GLK and 10% for sport cars E-Coupe, SLK and CLS.

Mercedes-Benz Vietnam offers complete packages for fleet customers and partners in line with their business requirement in terms of special pricing, finance solutions, regeneration of used fleet, long-term rental from AVIS, Insurance from Liberty, and service solutions.

Corporate owners also have opportunities to let their cars be cared with comprehensive service solutions including 24h emergency service, genuine part installment, full warranty policy, maintenance package and courtesy cars as well as nationwide sales and Mercedes-Benz service network from the Mekong Delta to northern cities.

Mercedes-Benz celebrated the anniversary of the birth of the first motor car in the world with a 2-day event on August 19-20.

Mercedes-Benz has the history of 125 years in the world and over 16 years in Vietnam.
 
Road maintenance fund for all provinces, cities

Under a draft proposal which the Directorate for Roads of Vietnam has completed for submission to the Government for approval, a road maintenance fund would be established at both local and central levels.

Local departments would receive funds from the central department for the upkeep of roads in localities and toll collection related to the use of roads in accordance with regulations.

The central and local road maintenance funds will be coordinated to set up plans to collect, spend, supervise, speed up, check for fee collection and receive money from resources.

Annually, the council of the central road maintenance fund will gather reports on fund collection and spending and widely publicize this information to the public.

In addition, the Ministry of Transport is submitting three methods for collecting fees for the fund to the Government for approval.

Method one is to directly collect tolls from road vehicles at a level of VND180,000 a month for cars and VND80,000 a year for motorbikes, or from the price of gasoline and oil at a level of VND1,000 a liter of gasoline and VND170 a liter of diesel, while toll stations will continue to be maintained as now.

Method two is to directly collect tolls from road vehicles, excluding motorbikes, with VND180,000 a month for cars and a toll is also planned to be collected from gasoline and oil at a proposed level of VND1,000 a liter of gasoline and VND330 a liter of diesel.

Meanwhile, method three is to directly collect tolls from only road vehicles at the level stated in method one while the remaining sum of VND6,213 billion for road maintenance will be directly offset by the State budget.

However, the method that the ministry proposed to the Government to select is method two which according to the ministry can replace the method to collect fees through toll stations. This can also mobilize social contributions via the tax on petroleum imports more reasonably and the State’s toll stations will be cancelled if method two is applied.
 
Networking vital to business generation: European strategist

Andy Lopata, one of Europe’s leading business networking strategists, has encouraged companies to make the most of networking to generate and expand their business as this is a low-cost but efficient route to target customers, especially in a current challenging time.

Lopata conveyed the message to representatives of companies and business chambers, including the Nordic Chamber of Commerce in Vietnam at networking events during his first business visit to Vietnam last week.

The ‘Mr Network’ labeled by The Sun believed that networking was a vital tool in business, from sales generation to career development. But, he said networking was still not treated with the same strategic consideration as other business methods, leaving many companies failing to realize the potential their networks offered.

Lopata told reporters in HCMC last week that to make full use of networking, companies needed to build relationships and trust with their potential customers first through online and face-to-face networking rather than try to sell products and services immediately.

“So instead of meeting people and expecting them to buy from you straightaway, build relationships with them. My philosophy is that I would rather someone prefers me… and if they have enough trust in me to prefer me and understand enough what I do and offer, they will buy from me anyway,” Lopata said.

One of the factors behind successful business is to develop and consolidate a network of supporting companies and people. Lopata said the common mistake among businesses was that people went to networking events to find help but forget looking at their networks of those who have known, liked and trusted them.

“I have seen so many businesses making the same mistake when they have support in place but they don’t use it, instead they go out to strangers,” Lopata said. He stressed “better known, better equipped and better connected” should be considered as the three main reasons of fruitful networking.

Lopata urged companies to know why they were networking and what they wanted to achieve. Companies needed to raise their profiles to get better known in the industries they operated, understand and support clients as “The more connected you are, the easy you get introduction to the people you want to meet,” he said.

Nick Jonsson, general director of Sophie Paris Vietnam, backed Lopata’s insights into building a company’s network, saying this pointed had been demonstrated at Sophie Paris in many ways.

“We rely on people knowing people, people trusting people, and the network to grow and flourish naturally from these connections and this trust,” Jonsson told the Daily before the direct selling fashion firm ran courses on building and expanding business networks for members.

Jonsson said Sophie Paris had been able to build a member base of around 20,500 in its first nine months of operation in Vietnam.

Lopata said it was important for companies to sell quality products and services to win more confidence of the people they had built relationships with through networking otherwise their efforts would go to nothing.

Lopata reminded businesses of benefiting a lot of networking at no cost and took facebook and twister as examples. He said from a global point of view that it was made so much easier for any business to achieve its global reach and have its profile on the international market.

“So, I would say that in most cases networking is the least expensive but the most efficient route to the market,” Lopata said.

PV