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FDI to flow into garments
Vitas vice chairman Le Van Dao said Taiwan, Hong Kong and South Korea would remain the biggest investors in Viet Nam's garment and textiles industry.
He said several Taiwanese investors had plans to enlarge their investment in Viet Nam. For example, Eclat Textile Co, which has a factory in southern Dong Nai Province's Nhon Trach Industrial Zone, plans to buy a US$2.5 million factory capable of producing about 3-3.5 million units of garments and knitwear a year.
Eclat also plans to invest roughly $4 million to set up a new garment factory that will have the capacity to produce 2.5 million units each year.
Another Taiwanese investor, Makalot Garment Co, which currently has a factory in northern Hai Duong Province, also plans to invest more than $6 million to increase its production in Viet Nam in a move to cut input costs, which are rising in China.
A North Korean enterprise has also expressed interest in investing in mulberry cultivation, raising silkworms and fibre production. The enterprise said it would invest in equipment and technology while Vietnamese partners would provide facilities and human resources.
Vitas said that while the rising foreign investment into the clothing industry was a good sign, it also meant that Viet Nam was not receiving any backing for development of weaving and dyeing factories.
Viet Nam currently has to import up to 80 per cent of the material needed by the garment sector annually. Domestic companies can only supply 30 to 50 per cent of the country's demand for cotton, fibre and other materials required to make shirts, jeans and other basic clothing.
Manufacturers have also faced difficulties as prices for imported materials have leapt by 30 to 40 per cent this year.
To meet some of the demand for textiles, the Viet Nam Garment and Textile Group (Vinatex) and the Viet Nam Oil and Gas Group (PetroVietnam) have built the Dinh Vu fibre production factory in northern Hai Phong City. Vinatex has also built four weaving and dyeing industrial zones in an attempt to attract domestic and foreign investors.
The Ministry of Industry and Trade also plans to develop a material and a dyeing zone in southern Dong Nai Province by 2015.
Higher interests will help curb inflation, government told
The strong rise of commercial-bank interest rates was unavoidable but it would help reduce capital access and control rising inflation, State Bank Governor Nguyen Van Giau told the Government meeting this morning.
Monetary policy markers had either to raise compulsory credit-institution reserves or raise interest rates, he said.
But the first was impossible because of the harm it would do to liquidity.
So while higher interest rates might not be good for the economy, "We don't have any other choice," he said.
The governor assured the meeting the measures would apply for just three to six months and would have no long-term consequences.
Overnight yearly interest rates ranged from 8-8.5 per cent on the interbank market while other short-term loans attracted interest of at least 13.5 per cent.
Some small banks raised short-term deposit interest rates to 16 per cent this week.
Yearly lending interest rates went to 18-21 per cent.
Exchange rate
Governor Giau attributed the divide between official foreign exchange rates and the higher street rate to the domestic economy and international currency volatility.
Street vendors have been trading the US dollar at VND20,500-21,500 for the last two months; The price at commercial banks has been maintained at about VND19,500.
Viet Nam status as middle-income country meant changes in the giant economies would affect the country, he said.
Further, Viet Nam's trade deficit was usually high; the US dollar value was pegged to the gold price and speculators put heavy pressure on the exchange rate.
The central bank had worked with the Industry and Trade Ministry to provide oil and petrol importers US$400 million to meet their payments, he said.
But this did not mean the central bank would meet all such requirements because foreign reserve were mainly to support policy management, he said.
The central bank move has increased the foreign reserves at commercial banks from minus $355 million on Sunday, November 21 to minus $94 million yesterday.
Governor Giau said the central bank was committed to other measures to free any foreign-exchange bottlenecks.
Knight Frank opens property centre
The British real estate service provider Knight Frank opened a property centre in Ha Noi on Tuesday.
Companies including Indochina Land, CapitaLand, Grand Capital, PVC Hong Ha, Venesia, NovaLand, and Havana will display their properties at the center.
"The centre is about encouraging the whole industry to work together rather than the common method of closing doors to outside agents in fear of losing a sale," Ross Lightfoot, Head of Residential Sales and Marketing for Knight Frank Vietnam said.
Footwear sector aims to diversify
The leather and footwear industry will focus on diversifying product designs and improving quality of human resources as part of a new development plan.
The plan, ratified by the Ministry of Industry and Trade, aimed to shift the leather and footwear sector to a spearhead export industry, dominating the world market and generating more jobs.
It also defined that footwear remained the sector's key product with an estimated output of 1.6 billion pairs. In addition, the sector would pay attention to producing fashion leather shoes, briefcases and wallets in order to exploit new markets.
Priority would be given to building new industrial complexes to provide input materials for the industry in an attempt to raise the percentage of domestic input materials to 60-65 per cent in 2015, 75-80 per cent in 2020 and 80-85 per cent in 2025.
Under the plan, the sector targeted to earn US$9.1 billion from exports in 2015, $14.5 billion in 2020, and $21 billion in 2025.
To realise the plan, the sector required more than VND59.5 trillion ($2.9 billion) in investment, of which 43 per cent would come from domestic funds.
This year marked strong growth of the domestic leather footwear sector. Over the past 11 months, it posted an export turnover of over $4.5 billion, up 10 per cent year-on-year.
The Viet Nam Leather and Footwear Association has forecast the sector could generate $5 billion from exports by the year-end, $300 million higher than the target set earlier.
Despite positive export performance, the association said the sector still encountered weaknesses that hindered its sustainable growth, including dependence on imported materials and inadequate workforce which resulted in lower competitiveness and trade barriers from importing countries. It suggested the domestic footwear companies seek ways to penetrate smaller markets such as Turkey, Australia, South America, Africa and Canada besides traditional export markets like the EU, Japan and the US.
Developing the domestic market was described as an important solution. If the firms dominated the domestic market, paid more attention to building trademarks and produced high-grade products, they could do less outwork for foreign companies, build their reputation on the international market and increase exports to make higher revenue.
Steel exports reach $910m in 11 months
The rate of growth for steel exports surpassed that of the garment and footwear sectors for the first 11 months of the year, according to the Viet Nam Steel Association (VSA).
The country earned nearly US$910 million from steel exports in the first 11 months of the year, a year-on-year increase of more than 179 per cent in value and 20-fold in volume.
During the period, exports of cold rolled steel reached 650,000 tonnes, more than nine times higher than the same period last year.
Exports of construction steel also rose robustly, reaching 140,000 tonnes, the association said.
VSA deputy chairman Nguyen Tien Nghi said removal of preferential policies for the steel industry in several countries had created higher demand for more steel exports from Viet Nam.
Local steel production this year was expected to be about 8.7 million tonnes, a year-on-year increase of 26 per cent, the VSA said, noting that the country was projected to export about 1.3 million tonnes of steel this year.
Steel imports this year would be only 1.8 million tonnes, a fall of 15 per cent over last year.
The VSA also estimated that consumption of construction steel in the domestic market this year would surge by 17 per cent over last year, reaching about 5.4 million tonnes.
HCMC looks to stabilise economy, achieve 12% GDP
The municipal administration will concentrate efforts on boosting its production and business sectors, stabilising the city's macro-economy and keeping inflation under control as it aims at a 12 per cent gross domestic product (GDP) growth next year.
According to the HCM City People's Committee's report approved by the second meeting of the Ninth Party Committee of HCM City yesterday, the city targets a GDP of VND475.9 trillion (US$23.8 billion) and per capita income of $3,130 next year.
The city targets a 13 per cent growth rate for the service sector; 11 per cent for industrial production and construction sectors; and 9 per cent in export turnover.
It will also strive to keep the consumer price index (CPI) under 7 per cent.
In his report, the deputy chairman of HCM City People's Committee, Nguyen Thanh Tai, said HCM City will generate employment opportunities for 265,000 workers and reduce the number of households living under the poverty line (under the city's standards) to below 5.4 per cent of the city's population.
He added clean water access will be expanded to cover 85 per cent of households in 2011.
The Polibureau member and Secretary of HCM City Party Committee, Le Thanh Hai, asked the city authorities to continue with efforts for economic re-structuring in order to raise productivity, to improve quality and to enhance the effectivity and competiveness of the city's economy.
Hai asked Government agencies in the city to resolve the issues encountering the city residents such as floods and price fluctuations in the local markets.
Development
Delegates at the second meeting of the ninth HCM City Party Committee also reviewed the city's 2010 achievements in socio-economic development.
The report said the city's economy has been restored to the level it had reached before the global financial crisis and the ensuing economic downturn.
The city attained higher economic growth for every quarter in 2010, and its gross domestic product is set to grow by 11.5 per cent over 2009.
New infrastructure facilities brought into operation have contributed significantly to the city's socio-economic development, the report says, noting that progress have been made in many social and cultural areas.
The city continued to maintain political stability and social order and safety.
However, this year has also witnessed weaknesses in the city's economy, including the slow pace of restructuring, price fluctuations in the local market and slower than expected improvement in human resources development, the report says.
Source: VNA
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