Bibica leader reassures shareholders

Bibica Joint Stock Company’s general director, speaking to the press, said he would seek to protect the interests of Bibica as news has emerged that the confectionery producer is facing the risk of being taken over by its foreign partner Lotte.

Truong Phu Chien stressed he has been trying to protect the interests of Bibica, a joint venture with South Korea’s Lotte, and to prevent Bibica from being acquired by this investor.

Chien said he had requested Lotte to let Bibica live up to the terms of the cooperation contract signed between the two parties in 2007 to ensure the interests of the two sides.

When Bibica sold a 30% stake, or 4.5 million shares, to Lotte in 2007, the two parties committed to promote comprehensive cooperation in production, management and investment.

For instance, Bibica can use the Lotte brand for locally-made products, and Lotte transfers technology to develop production. Bibica can import Lotte products for sale in Vietnam, while its products will be exported via Lotte.

The chocolate Lotte Pie produced by the Binh Duong-based Eastern Bibica Factory is a typical outcome of this cooperation.

However, Chien admitted Lotte enjoyed more benefits than Bibica in the last three years. Bibica’s sales volume in the domestic market has recorded good growth, and its partner is enjoying benefits with the products under the brand of Lotte.

Meanwhile, Bibica did not receive necessary support from the South Korean firm in export markets, he said, as Bibica’s request to display its products in the Lotte supermarket system has yet to be met.

Therefore, according to him, the local partner is seeking to clarify the relationship between the two sides in the venture as they have equal interests.

Bibica wants to have a product line under its brand to be produced in the Lotte Pie production line.

Bibica is looking for local investors who are able to acquire at least 25.5% of the shares to counterbalance Lotte, preventing Bibica from being taken over. Chien said some investors have showed interest but he declined to give further details.

US announces decision on steel pipe from VN

The US Department of Commerce (DOC) on March 27 announced its preliminary determinations in the countervailing duty investigations of imports of circular welded carbon steel pipe from some countries, including Vietnam .

According to the investigations, two Vietnamese companies, namely Haiphong Hongyuan Machinery Manufactory Co. Ltd. and SeAH Steel Vina Corp., enjoyed preliminary net subsidy rates of 8.06 percent and 0.04 percent, respectively.

The preliminary determinations were made on investigations conducted by the DOC after the US International Trade Commission (USITC) approved petitions from four US steel pipe companies in December, 2011.

VN, US hold consultations on frozen shrimp lawsuit

Vietnam and the US on Mar. 28 started holding consultations on the second lawsuit over US anti-dumping taxation on Vietnamese export frozen shrimp, after Vietnam ’s request to the WTO Dispute Settlement Body on Feb. 20.

The 60 day consultations focus on US compliance with the July 11, 2011 conclusion of the previous lawsuit, its moves in amending laws on calculating dumping margins and the US’s implementation of procedures relating to anti-dumping on goods shipped from Vietnam.

During the consultation, if the US accepts Vietnam ’s arguments, the disputes will be settled and the US must remove all unfavourable calculations on anti-dumping duties and regulations, otherwise, Vietnam will ask the WTO to form a panel to mediate the differences.

In the first Vietnam-US lawsuit, WTO concluded that US use of zeroing to calculate the common tax rates for Vietnamese frozen shrimp was inconsistent with WTO regulations.

The zeroing the US applied on Vietnam made anti-dumping duties much higher than normal calculations, which brought about considerable losses to Vietnamese shrimp exporters.
 
Agri-firms bemoan hardship

Despite their great contribution to the economy over the years, local agricultural companies are still struggling with the lack of capital, premises, management skills and technology, and with poor market access.

Meanwhile, the State’s support policies have yet to enter into practice, causing more problems for agricultural enterprises.

There are over 8,700 agricultural companies nationwide, accounting for 3.5% of the country’s total number of businesses. Up to 98% of the agricultural enterprises are small and medium-sized, said Deputy Minister of Agriculture and Rural Development Diep Kinh Tan at an agribusiness forum in Hanoi on Tuesday.

More specifically, over 90% of the agricultural firms have equity of below VND10 billion, 6.5% of them have capital of VND10-50 billion and only 1% over VND200 billion. The average operational capital per labor of agribusiness is VND200 million, equal to one fourth of the average level of other sectors.

Companies in the sector also face difficulties in capital and investment in machinery, equipment and technology, which are currently out of date.

Doan Trong Ly, chairman of Animal Production Processing and Import Export Joint Stock Company (Aprocimex), said the State released many support policies for enterprises during the four years of economic crisis, but such polices have yet to be translated into reality.

Moreover, the suggestion on developing specialized industrial parks or land fund for the livestock industry was mentioned in many previous forums, but yet to be realized.

The bank loan issue has also been constantly repeated. Since 2010, the Government has published many documents saying agricultural enterprises must be given priority access to loans, but none of them has come into force, said Ly.

The central State Bank of Vietnam only regulates the deposit rate ceiling, while the lending rates are neglected. This allows lenders to gain profits from agricultural enterprises.

Regarding this issue, Nguyen Viet Manh, head of the Credit Department under the central bank, said agriculture and rural areas are one of the four sectors on top priority in 2012. The credit growth stood at 13% last year, with loans for agriculture and rural sector rising 28%.

“We do not lack capital for lending. The point is enterprises seeking to access the bank loans must have particular business plans that are highly feasible,” said Manh.

Pham Xuan Hoan, deputy head of the Agricultural Enterprise Reform and Management Committee, recommended the State have policies on reduction or exemption of land use fees, land rentals, and water surface rentals. In addition, the State should assist investors in personnel training, market development, consultancy services, technology application and transport fees.

High insurance coverage for luxury outbound tour buyers

Saigontourist Travel Service Company on Tuesday clinched a cooperation deal with Chartis Vietnam Insurance Company Limited to offer an insurance coverage of up to VND2.1 billion per case to buyers of luxury outbound tours.

All customers taking package tours in the Premium Travel program of Saigontourist Travel to America, Europe, Africa, Australia, New Zealand and Japan from next month will be given this free insurance, said Saigontourist Travel director Vo Anh Tai.

Previously, Saigontourist Travel only provided a general coverage for outbound tourists, which was VND630 million at most per customer while the coverage of VND2.1 billion only applied to certain customers in HCMC and Hanoi.

“According to our survey, insurance is one of the top five issues that tourists care about when traveling, so we’ve decided to add more benefits for customers,” said Tai.

With this new insurance package, tourists can enjoy 17 benefits such as medical support in foreign countries, accident support, extended benefits in case of terrorism, disasters and epidemics.

In addition, tourists can enjoy some new benefits, for instance a reimbursement of VND105 million per tourist per case if the tour is canceled, or a maximum medical expense if tourists have accidents or fall ill while abroad.

Tai said the number of customers buying Premium Travel tours has increased and currently accounted for 25-30% of the buyers of outbound tours at the company. Besides, the annual growth of this luxury tourism segment is 30-40%, he added.

Bigger wave of investment from Japan

Investment inflows from Japan are becoming very strong, including those from small- and medium-sized enterprises, a Vietnamese Chief Executive Office has affirmed.

Having recently returned from a Japan visit, Nguyen Hoang, President of N&G Company, said his assessment is based on not only the presence in Vietnam of Japanese giants such as Shimizu, but also the clear willingness of Japanese enterprises in overseas investment.

“During our working sessions in Japan, we found out that up to 214,000 Japanese small- and medium-sized enterprises in manufacturing have never invested abroad and they are now shifting their attention to destinations in Vietnam,” Hoang said. “The question is if Vietnam can quickly meet their conditions.”

Japanese businesses want to rent ready-to-use workshops which have medium sizes and offer competitive rentals in multiservice integrated parks to reduce production costs.

In the first quarter of 2012, Japanese capital inflows overwhelmed all others, making up about US$2 billion out of a total of US$2.26 billion in foreign direct investment in Vietnam.

Most large projects are Japanese funded.

Vietnamese goods displayed in Cambodia

An exhibition fair called Ho Chi Minh City Expo 2012 opened in Phnom Penh, Cambodia on March 28.

There are 250 stalls put up by more than 150 Vietnamese businesses with the motto “Vietnamese Products-More Choices-Greater Confidence”.

Speaking at the opening ceremony, Cambodia’s Permanent Deputy Prime Minister Men Sam An said this is an important event to mark the 45th anniversary of the establishment of diplomatic ties between the two countries and celebrate the Chol Chhnam Thhmay festival in mid-April during the Cambodia-Vietnam friendship year.

She said the Cambodian Government is carrying out an open economic policy to attract foreign investors, particularly from Vietnam, to boost national economic growth, as well as regional and international integration.

During the exhibition fair, a ceremony will be held to offer gifts for poor people on the occasion of the Chol Chhnam Thhmay festival.

HCM City Expo 2012 will last until April 1.

US to impose countervailing duty on Vietnam’s steel pipe

The US Department of Commerce (DoC) on March 27 announced its affirmative preliminary determination in the countervailing duty investigations of imports of circular welded carbon-quality steel pipe from Vietnam.

The department determined that Vietnamese exporters or producers have received subsidies at certain rates, which are much lower than India’s.

It found that most Vietnamese producers or exporters received a preliminary net subsidy rate of 8.06 percent compared to India’s 289.95 percent rate. Vietnam’s SeAH Steel Vina Corp. was given a rate of 0.01 percent.

This preliminary determination is based on investigations undertaken by the US Department of Commerce.

The US International Trade Commission is expected to continue its investigation into the case until August 2012, while the US Department of Commerce will do the same work until September 2012, before both agencies make their final determinations on certain steel pipe imports from Vietnam and India.

US companies hold that welded carbon-quality steel pipes with an outside diameter of no more than 16 inches imported from some countries are being offered at unusual prices thanks to subsidies, which they argue has resulted in market share and job losses since 2008.

A total of 40 exporters of steel pipe to the US are being sued.

Indonesian pharmaceutical firm to expand into Vietnam

Indonesian pharmaceutical company PT Kimia Farma plans to open business in Vietnam in an attempt to increase its market share in Southeast Asia.

In the meantime, PT Kimia Farma still maintains operations in its domestic market by establishing a joint venture with a Chinese company.

PT Kimia Farma director Syamsul Arifin said his company would soon begin negotiations with various Vietnamese companies.

”I will go to Vietnam next week to talk about what forms of business we might undertake there. From Vietnam, we will also be able to cover Cambodia, Laos and Myanmar,” Syamsul Arifin said.

The expansion to Vietnam will deepen Kimia Farma’s presence in other countries after its previous entry into the Malaysian market. The company cooperated with Malaysian company Averroes to build three drug stores there last year.

Techcombank wins “Best Emerging Market Bank 2012 in Asia” Award

Global Finance Magazine has presented the “Best Emerging Market Banks 2012 in Asia” Award to the Vietnam Technological and Commercial Joint Stock Bank (Techcombank).  

Techcombank has surpassed other local banks in meeting all the criteria set by the jury. Last year, the bank made a pre-tax profit of VND4.203 billion, up 53.18 percent compared to the previous year. Its total assets rose 20.35 percent to VND180,874 billion.

To contribute to stabilizing the macro-economy and easing the pressure of the trade deficit, Techcombank has provided comprehensive financial solutions for businesses operating in the field of production and export.

In addition, Techcombank plans to invest in renewing technologies and providing customers with high quality products such as F@st Easy, F@st Invest and other convenient products.

The award ceremony will take place on October 13 in Tokyo, Japan during the meetings of the World Bank and the International Monetary Fund.

Dialogues with businesses for sustainable development

Representatives from different countries attended dialogues with businesses and industrial groups for sustainable development at UN headquarters on March 26.

The event, co-organised by the Permanent Missions of Vietnam, the Netherlands, Benin and Barbados to the UN and the Business Action for Sustainable Development (BASD), is part of activities to prepare for the Rio+20 United Nations Conference on Sustainable Development, to be held in Rio de Janeiro, Brazil, from June 20-22, 2012.

Representatives from the UN and the BASD highlighted the business community’s efforts in the implementation of development programmes at national and international levels, especially opinions contributed by more than 6,000 businesses to the preparation of the agenda and draft document for Rio+20 conference.

Participants also focused on issues related to green development, the application of information technology, the building of government policies for businesses, the legal system for green development and the UN’s role in devising policies and delegating more rights to women.

The Vietnamese ambassador, who is Head of the Vietnam Permanent Mission to the UN, Le Hoai Trung, spoke of the establishment of the Vietnam Business Council and the Vietnamese government’s efforts to get the private sector involved in the sustainable development of the national economy as well as farmers’ contributions to improving food security.

The Vietnam mission to the UN said it will continue to have further dialogues with the private sector to promote public-private partnership in the implementation of sustainable development goals.

Official calls for tax incentives to assist firms

Local businesses should be assisted with tax deferrals or exemptions in order to overcome their hurdles and escape from the brink of bankruptcy, Vu Tien Loc, chairman of the Vietnam Chamber of Commerce and Industry (VCCI), told Tuoi Tre.

The roots of businesses’ hardship, Loc said, are the exorbitant input costs and interest rates, while the outlets for their products are obstructed.

Many manufacturers have good business plans, which can help them to develop and contribute more to the state budget, but only in case they are sufficiently supported, he said.

While many businesses are facing capital and liquidity shortages, they cannot access bank loans since they have failed to prove the effectiveness of their business plan amid the ongoing economic turbulence.

Hence, they need stronger and more active support from the government, said Loc.

“The government, and its administrative bodies, can follow the example of the central city of Da Nang, whose authorities held meetings with local enterprises to evaluate the importance and effectiveness of their projects,” elaborated Loc.

“Authorities would later recommend businesses whose projects are necessary for the city’s economic development to credit institutions to provide financial aid for them to continue the projects.”

The chairman added that besides cutting lending interest rates, the government should also prioritize tax deferral and exemption for businesses this year.

He cited figures from the Ministry of Finance as saying that the state budget collection in 2011surpassed the target, so it is feasible for tax incentives to be released.

“Once the enterprises are able to overcome difficulties thanks to the tax relief, they can boost production and contribute more to the budget later,” he stated.

Loc said local authorities should also defer the land use fee, or other fees to be paid in implementing projects.

“Meanwhile, the government should also try not to set any new fees, in order to avoid burdening input expenses on the businesses,” he added.

The government also has to create conditions for small- and medium-sized enterprises to access ODA loans for their production.

“Moreover, paperwork and administrative procedures should be simplified to reduce expenses,” he concluded, adding that the National Assembly should take action to assist local enterprises.

Trung Nguyen opens new coffee plant in Bac Giang

Trung Nguyen Coffee Group inaugurated a plant, the fifth in its largest and most modern coffee processing facility system in Asia, in northern Bac Giang province on March 28.

The G7 coffee plant has an investment capital of more than 30 million USD and will process and package more than 100 tons of instant coffee per day in its first stage of operation to meet market demand in the north and for export to China.

Its products are also expected to be shipped to the Republic of Korea, Japan and other East Asian markets.

The group’s G7 coffee is exported to more than 50 nations and sold in supermarkets in the US and E-Mart in the Republic of Korea and China.

Vietnam, RoK enhance financial cooperation

Finance Minister Vuong Dinh Hue has made commitments to furthering financial cooperation between Vietnam and the Republic of Korea (RoK) during his meetings with senior RoK officials engaged in the field.

During his meeting with Minister of Strategy and Finance Bahk Jae-wan on March 27 as part of his visit to the RoK, Minister Hue expressed his hope that the growing cooperation between the two ministries will foster bilateral economic and trade relations.

The Finance Ministry of Vietnam will actively work with the RoK Strategy and Finance Ministry, as well as RoK investors in Vietnam, to build an open, transparent and friendly business environment for investors to carry out long-term operation.

Minister Bahk Jae-wan thanked the Vietnamese Government and the Finance Ministry in particular for their support for RoK agencies and enterprises operating in Vietnam.

He spoke highly of new cooperative contents between the two sides, showing his belief that comprehensive cooperation will see further developments, contributing significantly to the two countries’ strategic partnership.

At his talks with President of Korea Eximbank Kim Dong-soo, Minister Hue praised the bank’s positive contributions and effective operation in Vietnam, especially the comprehensive cooperation between the Finance Ministry and Korea Eximbank.

They also reviewed Vietnam-RoK cooperative activities in preferential loan provision and talked about orientations for future cooperation.

Minister Hue called for Korea Eximbank’s further support given Vietnam’s high demand for investment in infrastructure.

The bank executive informed that the RoK government will continue to invest in infrastructure, green growth projects and climate change programs in Vietnam.

The same day, Finance Minister Hue also met with National Tax Service Commissioner Lee Hyun-dong to evaluate the two agencies’ cooperative program.

Lee Hyun-dong affirmed that the RoK National Tax Service is willing to cooperate effectively with the Vietnam General Department of Taxation, contributing to the development of the Vietnam-RoK strategic partnership.

The RoK is one of the most important partners of Vietnam in the fields of economics, investment, culture, education and labor, while Vietnam is an important partner of the RoK in Southeast Asia.

It is always among the top three investors in Vietnam. In 2011, the country committed 411.8 million USD to Vietnam, a year-on-year increase of 39 percent.
 
Vietnam co-hosts sustainable development dialogue

The Vietnam Permanent Mission to the United Nations co-hosted a dialogue with enterprises and industrial groups for sustainable development in New York on March 26.

The event, held on the threshold of the UN Conference on Sustainable Development (Rio+ 20), attracted 300 delegates.

At the dialogue, delegates exchanged views on how to increase the participation and contributions of the private sector to sustainable development.

Ambassador Le Hoai Trung, Permanent Representative of the Vietnam Mission, spoke about the contributions made by the private sector to Vietnam ’s development and the establishment of the Vietnam Business Council for Sustainable Development.

He highlighted the Vietnamese Government’s efforts in encouraging the private sector to contribute to sustainable development, including urging farmers to take part in production and trade activities to improve food security.

Representatives from the UN and co-organiser, the Business Action for Sustainable Development (BASD) presented action plans of the business community in the implementation of national and international development programmes.

After the dialogue, the Vietnam Mission to the UN will co-organise dialogues with the private sector to boost public-private partnerships in sustainable development.

Property attracts most FDI in 1st quarter

The property sector has again become the sector with the greatest amount of new foreign direct investment (FDI) in the first quarter, after a long period of sharp decline.

Real estate accounted for 45.5 percent of the total registered capital in the year’s first three months, said the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment.

This achievement is partially attributed to the US$1.2-billion Tokyu Binh Duong Garden City project developed by Becamex IDC and Japan’s Tokyu Corporation.

Having a long term goal in Binh Duong, these investors kicked off the project right on the day they received the investment certificate early this March in order to promptly complete the 71-hectare project before Binh Duong becomes a centrally-governed city in 2020.

The billion-dollar Tokyu Binh Duong Garden City project helped bring the total newly registered and additional FDI capital in the first three months of the year to $2.63 billion, or 63.6 percent of the same period last year.

As of March 20, there were 120 new projects licensed nationwide worth $2.26 billion, or 77.2 percent of the same period last year.

In the mean time, 29 operational projects registered to raise their investment capital by an additional $368 million, or 30.4 percent of the same period in 2011.

Manufacturing and processing industries, which topped the list in the first two months, fell to the second place with 51 newly registered projects and 25 projects with additional capital, worth $1.17 billion in total, or 44.6 percent of the total registered capital.

Transport and storage took the third position with $180 million in new and additional FDI capital, or 6.8 percent of the total registered capital in the first quarter.

According to FIA, in the last three months, the foreign capital inflows to the big projects came mostly from Japanese investors.

Specifically, apart from the $1.2-billion property project mentioned above, there were also a project worth $574 million invested by the Japanese tire maker Bridgestone Corporation in Hai Phong-based Dinh Vu Industrial Park and the $180-million project of Oshima Shipbuilding Co. Ltd.

With many large-scale projects, Japan has become the biggest foreign investor in Vietnam in the first quarter, with the newly registered and additional capital reaching US$2.3 billion, equivalent to 88.8 percent of the nation’s total.

The Netherlands ranks second with $46.1 million, or 1.7 percent, followed by Taiwan with $42.9 million, or 1.6 percent.

FDI disbursement in the first quarter of the year also showed positive signs, said FIA.

Particularly, FDI enterprises disbursed $1.52 billion in March, bringing the total disbursement of the first three months to $2.52 billion, or 99.2 percent of the same period last year.

Difficulties force property investors to change

The troubled property market is forcing investors to be more efficient - by restructuring investment, transferring projects, or simply leaving.

In the heyday of the property market several years ago, numerous enterprises active in other sectors sought to make their way into the market and develop apartment projects.

Hoa Sen Group for instance aimed to move beyond its five major business fields - steel, building materials, financial investment, seaports and logistics - by investing in the realty sector.

The Pho Dong-Hoa Sen Building project in Ho Chi Minh City’s District 9 kicked off in late 2009 was the group’s first step to step into the property market.

It was one of the three projects Hoa Sen planned to develop in District 9, with 200 apartments expected to be launched into the market.

However, after two years of deployment, the group decided to transfer its 50 percent stake to its partner Pho Dong Development Investment Joint Stock Co.

The unfavorable property market has also forced the group to halt other projects.

Particularly, Hoa Sen Group is seeking partners to transfer the apartment projects Hoa Sen Phuoc Long B and Hoa Sen Riverview, both in District 9, together with a land plot along Tran Nao Street in District 2.

Macro-economic upheavals, coupled with the slump in the realty market, spark a need for Hoa Sen to sell property projects to focus on its core businesses.

According to Chairman Le Phuoc Vu of Hoa Sen Group said the group would not make dispersed investment anymore.

Similarly, the Vietnam National Oil and Gas Group (PetroVietnam) will pull out of the complex project consisting of a five-star hotel, a commercial center, a theme park, and a petroleum tower in Tu Liem District, Hanoi, upon the Prime Minister’s request last week.

The project is taken over by PetroVietnam Construction Joint Stock Corporation (PVC).

While outside investors are divesting their capital in the property sector, insiders are striving to transfer their projects and land.

Van Phat Hung Corporation said it would liquidate the land plots in District 2 and 9 in HCMC, and offer the land for the company’s office in District 7.

Besides the target to sell 70 apartments of the Lacasa project within this year, the real estate company will issue VND300 billion worth of convertible bonds in order to have more working capital for the its plans in short and medium terms.

Likewise, Pacific Property and Infrastructure Development Joint Stock Co. (PPI) is looking for investors to cooperate or transfer two projects in Thu Duc District, HCMC.

The company is offering the 2,400-square-meter land plot of the PPI Tower office and apartment building in Hiep Binh Chanh Ward at VND29 million per square meter, as well as seeking partners for the Water Garden complex project also in Hiep Binh Chanh.

The two-hectare land site for the project development is being offered at VND15 million a square meter.

2012 is considered the year of mergers and acquisitions (M&A) activity with many opportunities for the financially-capable investors.

Phan Xuan Can, chairman of the property service provider SohoVietnam, said the demand for realty project transfer was now higher than ever.

The service provider has been asked by other developers to offer 80 projects of several segments from apartments, office land, and urban areas to resorts.

The rising number of projects offered for changing hands is ascribed to tightening monetary policy, high banking interest rates, and the weak liquidity of the market.

Can said that the property market was undergoing thorough selection and only financially-capable and experienced investors would be able to survive.

“The market is restructuring itself and in the next 2-3 years, the Vietnam property market will have a new face,” he said.