Da Nang to open Vietnam’s first cable car line

A groundbreaking ceremony was held on July 26 in the central city of Da Nang to commence construction on Vietnam’s first pull cable route called, ‘Ba Na – Bynight’.

The cable, with a capacity of 80 passengers in each cabin, will travel at an average speed of 18 kilometres per hour along the 380m route. The system will be able to carry 1,600 passengers per hour.

The equipment and technology were supplied by the Garaventa company in Switzerland.

 The first cable line will contribute to the development of tourism in the city, particularly to the cable tourism.

The system is expected to be completed and put into operation in March, 2014.

Viedam opens mold R&D center at SHTP

Vietnamese-Danish joint venture Viedam on Wednesday received the investment certificate to set up Viedam Mold R&D Center at Saigon Hi-tech Park (SHTP) in HCMC’s District 9.

With an area of 7,500 square meters, the center worth US$7.5 million is expected to be kicked off in the fourth quarter and be operational after one year of construction.

According to Vo Cong Hai, managing director of Viedam, the project will apply new materials in molding, and Viedam will train 50 engineers for the center.

In addition to opening the research and development center, Viedam will also build a high precision molding plant producing complicated molds for the electronics and healthcare sectors. Most of products produced will be exported to European countries.

Hai said that Viedam has studied and produced such products for years. However, due to an increasing global demand, the joint venture has decided to build a new plant together with the research and development center at SHTP to meet the demand of customers.

According to the management board of SHTP, products of Viedam belong to the supporting industries and thus can enjoy investment attraction incentives. This is also the project which SHTP is calling for.

The new project has increased the total number of valid projects at SHTP to 56 with total registered capital of over US$2 billion.

Local firms keen to make strong investments in Laos

HCMC Show, an exhibition of investment, trade and tourism from Monday to this Friday, and a market survey for Vietnamese enterprises to set up distribution systems in Champasak Province in Laos signify local firms’ interest in the neighboring country.

The trade event is being organized by the HCMC Investment and Trade Promotion Center to help local enterprises further penetrate the neighboring market, where many Vietnamese companies have come knocking.

Champasak, a large province in Laos’ southwest, is over 650 kilometers from Vientiane and has a population of some 700,000 people. With a strategic economic location in the East-West Corridor bordered by Thailand and Cambodia, the province is considered a gateway connecting Thailand, Cambodia and Vietnam.

With 415 Vietnamese-invested projects totaling US$5 billion licensed as of now, Laos is considered the top destination for Vietnamese investors, said Tran Bac Ha, chairman of the Vietnamese Investors Association in Laos.

Bilateral trade posted a pickup of 22% year-on-year to over US$900 million in 2012, and the figure is expected to hit the US$2-billion mark in 2015.

Vietnamese companies have developed about 50 projects in southern Laos, including Champasak, with total capital of around US$2.2 billion, representing nearly half of the country’s total investment in Laos. Up to now, capital disbursement by Vietnamese enterprises in southern Laos has totaled roughly US$600 million.

The latest Vietnamese-invested project commissioned is the sugar and sugarcane industrial complex Hoang Anh Attapeu, which was opened on February 25 this year. Doan Nguyen Duc, chairman of Hoang Anh Gia Lai Group (HAGL), said his firm had grown over 5,000 hectares of sugarcane in Attapeu and that the rest would be developed by Laotian farmers. The sugarcane farming areas totaling up to 12,000 hectares will provide materials for the sugar plant with a daily crushing capacity of 7,000 tons of sugarcane.

Besides, HAGL has already constructed a thermo-power plant with a designed capacity of 30 MW connected to the national power network of Laos.

The total investment on this complex is US$87.8 million, with US$68.7 million for the thermo-power plant and the sugar factory and US$19.1 million for the material region.

Similarly, Tin Nghia Corporation, a local firm in the southern province of Dong Nai, has also entered the Laotian market from the very beginning. The enterprise since 2007 has invested in agriculture, industrial parks and tourism in Champasak, including two coffee farms.

Thai firms encouraged to invest in Vietnam

Thai entrepreneurs are encouraged by their government to invest in Vietnam to expand operations and await the formation of the ASEAN Economic Community (AEC), said Vatchari Vimooktayon, permanent secretary of Thailand’s ministry of commerce.

Vimooktayon, leading a delegation of 12 members, met HCMC Vice Chairman Le Manh Ha on Tuesday to discuss how to strengthen trade and investment ties between Thailand and Vietnam.

Thailand recognizes strong economic development in Vietnam and the country’s high potentials for further development in the future. Even without support and encouragement from the government, Thai firms would still be interested in Vietnam, said Vimooktayon.

She hoped the HCMC government would assist Thai investors in the city as well as in Vietnam.

There are two more years until AEC springs to life in 2015. Thailand wants to cooperate with Vietnam to further boost trade and economy to develop together in the AEC era, said Vimooktayon.

Vice Chairman Ha appreciated Thailand’s economic development, especially in supporting industries, electronics, mechanical engineering, agriculture and tourism.

He said the city would welcome Thai investors and give them favorable conditions for business development in Vietnam.

He informed there were currently over 100 Thai-invested projects in HCMC, but Thai investment per project remained small. He expected Thai investment inflows to expand in the coming time.

So far, Thai companies have got involved in 313 projects in Vietnam with total registered capital of some US$6.38 billion, ranking ninth among the nations and territories with investment in Vietnam, according to the Foreign Investment Agency under the Ministry of Planning and Investment.

In HCMC, there are now 108 Thai-invested projects with total pledged capital of US$155 million, mainly in processing, commerce and construction services, said the municipal Department of Planning and Investment.

Vietnamese consumers less optimistic: Nielsen

Confidence of Vietnamese consumers continued to wane in the second quarter as the economy has shown no signs of recovery, according to Nielsen’s survey of global consumer confidence and spending intentions released on Tuesday.

The survey was conducted among over 29,000 consumers in different regions, including 3,000 consumers in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

According to the survey, Vietnam’s consumer confidence index dropped by one percentage point to 95 in the second quarter compared to a significant rise of six percentage points in the year’s beginning. This level was still higher than the global average of 94 points and lower than the regional benchmark of 105 points.

Some 42% of the Vietnamese respondents said that their job prospects were good and excellent in the second quarter, unchanged compared to the first quarter and lower than the regional average (61%).

However, nearly half of the Vietnam respondents (48%) expressed concerns over future financial outlooks, which shows a drop of six points from the first quarter and is also lower than the region’s 61%.

Regarding spending demand and intentions in the next 12 months, the number of consumers felt good and excellent inched up from 33% to 37%.

However, consumers in Vietnam as well as regional countries are big savers.

According to Nielsen, 68% of Vietnamese consumers saved their spare cash compared to 47% of the global average. Meanwhile, the respective figures in Indonesia, the Philippines, Thailand, Malaysia and Singapore were 71%, 70%, 63%, 61% and 60%.

In the aforementioned Southeast Asian markets, over three among five consumers said they changed their spending to save household expenses over the past year. Most consumers tried to save spending on gas, electricity, new clothes and out-of-home entertainment activities.

Some 36% of the Vietnam consumers said they would travel compared to 47% recorded in Singapore and 43% in Malaysia. Such figures were all higher than the global benchmark of 33%.

New technology products are also appealing to consumers in Southeast Asia. 34% in Thailand, 32% in Vietnam, 31% in Indonesia and 31% in the Philippines spent their spare cash on such products. Meanwhile, the global figure was only 25%.

Inflation seen well above 7% this year

The nation is facing risk of a return to high inflation after the Government has revised up prices of some necessities, with inflation forecast to exceed 7% by the end of this year, according to a macroeconomic analysis report of Viet Dragon Securities Company (VDSC).

The nation’s inflation was around 2.4% in the first half of this year, the lowest since 2009, offering great chance of speeding up a plan to let prices of electricity, coal, oil and gas and public services be decided by market forces.

Therefore, in the second half, VDSC said that price hikes in some necessities will cause negative impacts on the consumer price index (CPI).

For oil and gas products, retail gasoline price has increased around 2% this month after having shot up by around 3.4% in June. The retail price of A92 gasoline has hit a record high after three bouts of upward price revision. This factor will cause the strongest impact on the nation’s CPI in July and the third quarter.

Meanwhile, prices of health services in Hanoi City and HCMC are expected to move up in the third and fourth quarters respectively. This factor will also add more inflationary pressure.

However, impact of health services may be mild and VDSC said that electricity prices were a wild card.

Vietnam Electricity Group (EVN) has yet to revise up electricity prices in July. However, another round of power price hikes is inevitable after coal prices have jumped 27% and the exchange rate has increased 1% while power consumption is expected to increase in the second half of this year.

Electricity prices may be revised up by 10-15%, adding a 0.7% rise to the nation’s CPI. Of this, 0.4% is caused by direct impacts and 0.3% is triggered by indirect impacts.

VDSC projects the nation’s CPI at around 0.3% in July while inflation may surpass 7% this year. With these levels, the possibility of further interest rate cuts is low.

However, this is a good sign for credit growth in the second half. As inflation is on the rise while further rate cuts are impossible, enterprises with capital demand will not be hesitant in taking out bank loans any more. Banks will also try to speed up credits to meet this year’s credit growth target of 12%, the report said.

Speaking to stock investors in a recent workshop, economist Tran Du Lich said that high inflation and the stagnant market would cause more difficulties for the economy.

Although inflation was only 2.4% in the first six months, risk of high inflation is here to stay as the economy is still plagued by protracted woes, such as low consumption, high stockpile, production slowdown, bad debt, slackened credit and slow economic restructuring.

Economy to get back on fast-growth track in 2015: EY

Vietnam’s economy is forecast to recover and become stable with a rapid growth rate of 7% in 2015, according to Ernst & Young (EY).

The assurance, tax and advisory service firm in a report noted that although the monetary and financial policy is being loosened as inflation has been put under control, this year’s growth will still remain low at 5-6%.

Besides, the report indicates that the factor impeding private investments is still excessive supply and weak demand.

Meanwhile, the credit growth keeps staying limited as banks continuously encountered increasing bad debts last year.

Therefore, the investment proportion in State-owned companies and infrastructure projects as well as the slow recovery of the EU and the U.S. will limit this year’s export growth.

However, Vietnam’s GDP growth will be over 7% in 2015 due to improved export and greater industrial investments and increasing personal spending.

However, this also indicates the country’s independence on local and foreign investments to hit the growth target of 7% or more in the medium term.

The aforementioned evaluations are included in the Rapid-Growth Markets Forecast released globally this month.

The quarterly report evaluates the economic prospects of 25 countries with high growth rates to give timely analysis about emerging markets and their roles in the global economy.

ICP successfully defends X-MEN trademark

The trademark X-MEN is now officially property of International Consumer Products Co. Ltd. (ICP) since the time for Marvel Characters Inc. to lodge an appeal against the judgment of the Hanoi City People’s Court has run out.

ICP in June 2003 applied for registration of the trademark X-MEN for its cosmetic products. Two years later, the National Office of Intellectual Property of Vietnam (NOIP) granted the company a trademark registration certificate.

In August 2006, Marvel Characters Inc. proposed invalidation of such a certificate, accusing ICP of making the use of its famous X-men characters, causing confusion among consumers.

ICP is a producer of home care and personal care products in Vietnam, known for its men’s personal care brand X-MEN with the tagline “the real man”. Meanwhile, Marvel is a U.S. producer of cartoons, comics and video games, owner of several fictional characters including a team of mutant superheroes called X-Men.

NOIP rejected the proposal of Marvel Characters, saying the trademark X-MEN that ICP registered is written in capitalized letters with a stylized X placed in a circle, different from X-men of Marvel Characters.

Moreover, X-MEN is a trademark of a commodity, not of a publication. Therefore, the case could not be seen as a copyright infringement.

NOIP stated names of fictional characters are not protected by Vietnamese laws.

After much debate, Marvel Characters brought the case to court. The Hanoi City People’s Court handled this case.

It was reasoned that ICP sent its application for trademark registration to NOIP in 2003, when Marvel Characters had not registered for the trademark X-men in Vietnam.

Besides, as products of ICP and Marvel are different from each other and the Copyright Law of Vietnam does not protect names of fictional characters, it is not right to conclude that ICP makes use of the reputation and the copyright of Marvel.

Evidence provided by Marvel Characters was not powerful enough to prove its lawsuit against ICP justified. Therefore, the Hanoi City People’s Court this March cancelled the petition of Marvel Characters.

The time for Marvel Characters to lodge an appeal has run out now. Thus, the court’s judgment becomes effective and ICP still has its X-MEN as its property.

Several disputes over intellectual property have occurred in Vietnam recently.

Binh Minh Plastics Joint Stock Company earlier filed a lawsuit against Binh Minh Plastic Pipes Manufacturing, Service and Trading Co. Ltd. over the brand name Binh Minh. The case lasted for three years, with the plaintiff ending up the winner.

Vincom Joint Stock Company sued Vincon Real Estate and Financial Investment Company over its similar name to Vincom’s. Eventually, Vincon had to change its name to Vicoland in 2011.

However, an expert said many enterprises were not patient to pursue such cases and did not bring them to court.

Auto imports from South Korea, Thailand surge

The total number of completely built-up (CBU) vehicles imported into Vietnam in this year’s first half amounted to 17,000 units worth US$314 million, up 22.2% in volume and 9.4% in value, with imports from South Korea and Thailand accounting for two thirds.

According to a recent report of the General Department of Customs, auto imports from South Korea alone surged 38.8% year-on-year to 8,450 units, representing nearly half of the total number of cars imported into the country.

In the meantime, auto imports from Thailand totaled nearly 3,300 units in the six-month period, a pickup of 988 units. Notably, a sharp rise in auto imports from Indonesia and Japan was also recorded in January-June.

According to the general customs department, most CBU cars imported by the country in this year’s first six months were vehicles of less than nine seats, at over 8,900 units, an increase of 12.5%. The number of imported trucks, meanwhile, was 6,860 units, jumping 41.1%.

Among ASEAN countries, only Thailand and Indonesia have exported cars to Vietnam. Under the ASEAN Free Trade Area (AFTA) commitment, tax rates imposed on CBU cars imported into Vietnam from other ASEAN members will be slashed to 0% in 2018.

Meanwhile, South Korea, China and Japan have already signed free trade agreements with ASEAN, allowing auto imports from the three nations into ASEAN member countries to be slashed to 5% by 2018.

Experts therefore forecast Vietnam’s auto imports from the five above countries will rise strongly in 2018 due to import tax rates being lowered to 0-5%.

As for the luxury segment, Vietnam mainly imports CBU products from Germany, France and Britain. Auto imports from these markets all marked up in the first six months as recorded by the department.

Vingroup picked to build Thu Thiem financial center

The HCMC government has selected Vingroup Joint Stock Company to develop an international trade-finance-banking-housing center in Thu Thiem, said the Investment and Construction Authority of Thu Thiem New Urban Area (Thu Thiem ICA).

Vingroup will carry out the project on a total area of some 170,000 square meters at the main functional zone No.1, Trang Bao Son, deputy head of Thu Thiem ICA, told the Daily on Tuesday.

The local company will be also in charge of developing a trading-services-residential area at the functional zone No.6 on around 79,000 square meters on Thu Thiem Peninsula, which is opposite the city’s central business district.

It will spend its own money hiring a consulting firm to map out a zoning plan with scale 1/500, and another with scale 1/500 for the two projects in line with the zoning plan of scale 1/2,000 that was already approved.

Construction on four main roads and low-rise residential areas is underway in Thu Thiem, which is envisaged becoming a new modern town of the city.

In addition, a scale-1/500 planning for the peninsula’s southern part, considered as a main greenery of the city in the future, is being done by a consulting company hired by Thu Thiem ICA.

Unemployment numbers fall as companies recover

The number of jobless residents in Ho Chi Minh City fell 22.5 percent in the first half of this year against the same period last year, according to the municipal Department of Labour, War Invalids and Social Affairs.

Local media on July 25 cited the department as saying that of 49,973 people out of work recorded during the period, 43,526 sought unemployment insurance, and 36,171 were successful.

The 143,522 people who were introduced to jobs in the first six months of the year include those whose properties had been reclaimed for public projects.

Department head Tran Trung Dung said the fall in unemployment reflected the fact that enterprises have overcome difficulties and revived production.

Nguyen Tan Dinh, deputy head of the HCM City Export Processing Zone Authority said that many companies in the city’s industrial and export processing zones have shown signs of recovery.

The food, engineering and textile industries are likely to need more workers as they expand production in the third quarter and the remaining months of the year, he said.

According to the municipal People’s Committee, the city’s first-half GDP was 340.6 trillion VND (14.5 billion USD), an increase of 7.9 percent over the same period last year.

Its first-half export turnover was 13.7 billion USD, up 6.2 percent year-on-year.

The city’s industrial production index also increased 5.2 percent in the first half over the same period last year.-

IBM named leader in Smart City Suppliers

The US’ IBM has been named the leader in the Smart City Suppliers market by Navigant Research.

According to the report, IBM’s (NYSE: IBM) commitment to smart cities has become a key component of its broader Smarter Planet strategy. Its continued investment in research and development (R&D), products, and city engagements has allowed it to maintain its leadership position despite the growing number of heavyweight competitors.

With deep expertise in helping cities, IBM has worked with thousands of cities globally to help transform their systems and provide better service to citizens.

For example, Singapore, Australia’s Brisbane city and Sweden’s Stockholm city are using IBM smarter systems to reduce traffic snarls-up and environmental pollution. Such systems are also used in New York to secure social order and prevent crime and deploy preventive measures.

In Vietnam, IBM has been working with authorities of big cities like Hanoi, Danang and Ho Chi Minh City to support them in implementing their visions of building smarter cities.

The new Navigant Research Leaderboard Report on smart city suppliers examines the world’s leading companies that support smarter cities projects including energy, water, transportation, building management and government services. The report specifically compares companies that provide an integrated approach to city operations, technologies and solutions.

“IBM continues to be the leader in the Smarter Cities market, helping transform cities of all sizes,” said Tran Mai Huong, manager of IBM Vietnam’s banking and government section. “Our collaborations in the world and Vietnam range from massive and complex strategic projects, to highly focused initiatives using proven solutions that deliver measurable return on investment.”

Mass urbanization, innovations, and new intelligence are changing the look of cities and challenging the next generation of leaders with new opportunities in public safety, healthcare, transportation, water and energy.

Navigant Research estimates that the global market for Smart Cities technology will grow from $6.1 billion annually in 2012 to more than $20 billion in 2020, a compound annual growth rate (CAGR) of 16.2 per cent. This represents a cumulative investment of over $117 billion in smart city technologies between 2012 and 2020.

Navigant Research Leaderboard Report evaluates smart city suppliers on the basis of market share, product performance and features, product integration, marketing and financial resources to support large-scale smart city projects on a global basis.

Leading plastics company cooperates with Japan

Tien Phong Plastic Joint Stock Company, a leading plastics producer in Vietnam, signed a contract with Sekisui Chemical Co. Ltd. from Japan in the northern city of Hai Phong on July 22 in a bid to promote investment and expand its markets and operations in regional countries.

Under the contract, Tien Phong and Sekisui Chemical will cooperate in selling the latter’s several products to Japan’s ODA-funded projects in Vietnam among others.

The Japanese company will transfer necessary equipment and give technical assistance to Tien Phong to produce these products. It will also share information relating to patents, technology and trademarks with the Vietnamese side.

If sales total 300 million JPY (3 million USD), the two sides will consider the establishment of a joint venture to produce these plastic products in Vietnam.

With three factories in Hai Phong, the southern province of Binh Duong and Laos’ Vientiane, Tien Phong produces 75,000 tonnes of products per year. Recently, the company received the 2012 Global Performance Excellence Award from the Asia-Pacific Quality Organisation.

Banking system’s safety ratios better

The State Bank of Vietnam (SBV) has unveiled a number of basic indices of the banking sector on its website, indicating that operations of credit institutions have improved compared to previous months.

The network’s capital adequacy ratio (CAR) stood at 14.25% at the end of May, a mild increase from 13.41% by late April.

The ratios of return on equity (ROE) and return of assets (ROA) in May were unchanged compared the previous month, standing at 2.52% and 0.23% respectively. By late March, the ratios were 3.97% and 0.48% respectively.

The ratio of short-term capital used as long-term loans had declined from 16.64% to 16.27%. The credit-to-deposit ratio had also eased to 87.44% from 87.87% in late April.

The total assets of the entire system had reached over VND5,200 trillion, a slight rise compared to late April and up 2.7% against the end of 2012. Meanwhile, chartered capital of the system had picked up 2% against late 2012 to over VND400 trillion.

There have been concerns over reliability of data of the banking system over bad debts. For instance, Barclays predicted the bad debt ratio of the local banking system at 20% while Fitch’s projected it at 15% at the end of 2012.

Concerning the problem, a leader of SBV told the Daily that the figure calculated basing on current lawful regulations must be recognized.

Each organization will give a figure basing on its own calculations, suggesting organizations have different evaluation methods. This is normal, the official said.

He said that banking data are relative. The most important thing is that administering agencies should understand the nature of the problem and they should not be fooled by the figures.

Singapore becomes largest investor in Vietnam

Singapore has poured nearly US$2.5 billion into Vietnam in the past seven months, ranking it the largest foreign investor in the country.

Its investment accounted for 35.9 percent of the total capital of newly invested projects in Vietnam, according to the General Statistics Office (GSO) under the Ministry of Planning and Investment (MPI).

Other major foreign investors in the reviewed period included Russia (US$1 billion), Japan (US$1 billion), the Republic of Korea (US$667.3 million), Hong Kong (US$575.7 million), and Thailand (US$309.3 million).

The GSO reported that as of July 20 Vietnam had attracted US$11.9 billion in foreign direct investment (FDI), representing a year-on-year increase of 119.6%. Of the total value, US$6.92 billion came from 677 newly licensed projects, up 110% from a year earlier.

A large amount of FDI was injected into key areas such as manufacturing (US$10.44 billion) and real estate (US$580.8 million).

Thai Nguyen province led the nation in FDI attraction, with total registered investment in the past seven months reaching US$2.141 billion, followed by Binh Dinh (US$1 billion), Hai Duong (US$611.6 million), Binh Duong (US$460.7 million), Dong Nai (US$338.8 million), Haiphong (US$335.4 million), and HCM City (US$333.5 million).

Vietnam remains world’s largest pepper exporter

Vietnam raked in US$618 million from exporting 94,000 tonnes of pepper in the first seven months of this year, retaining control of the global pepper market.

According to the Ministry of Agriculture and Rural Development (MARD), in July alone the country shipped approximately 12,000 tonnes of pepper abroad, earning US$81 million.

However, MARD said, the average price of export pepper in the past seven months saw a year-on-year decrease of over 4% to US$6,563/tonne.

The US and Germany were Vietnam’s largest pepper importers, making up about 33.2% of total market share.

At present, Vietnam exports pepper to more than 80 countries and territories around the world.

The Vietnam Pepper Association (VPA) predicted that local farmers will have harvested 90,000-95,000 tonnes of pepper on 60,000 hectares by the end of this year.

The association has set a target of exporting 105,000-110,000 tonnes in 2013.

Northern central region aims for sustainable sea economy

The northern central region is targeting rapid and sustainable growth as a national sea-based economic hub by 2020.

According to a draft report on the regional socio-economic development master-plan, the region will expand its tourism sector and tourist sites, and serve as one of the key gateways of Vietnam and regional countries through international sea ports and airports.

Thanh Hoa city in Thanh Hoa province will be turned into a development centre, while Vinh city (Nghe An province) will be developed into a cultural-economic centre of the region, under the Prime Minister’s Decision.

Hue city in Thua Thien-Hue province will become a city of festival and tourism, as well as a top-grade trade-service-training-healthcare centre.

The plan also gives priority to developing five marine economic zones (EZs), with Nghi Son EZ to become the country’s second refinery and petrochemical complex while Vung Ang EZ will house the country’s largest steel producer and a national-level sea port, turning it into an international trade zone in the region.

The three other EZs are Chan May-Lang Co, Southeast Nghe An and Hon La.

Regarding tourism development, the north central region can be divided into two sub-regions based on the allocation of natural resources.

The first, stretching from Thanh Hoa to Ha Tinh province with Vinh city as its centre, is home to beautiful beaches, such as Sam Son, Cua Lo, Xuan Thanh and Thien Cam, to name just a few, where a wide range of tourism services can be developed, such as eco-tourism, cruising, resorts and adventure tours.

The second sub-region, home to three World Heritage sites including Phong Nha-Ke Bang, encompasses provinces from Quang Nam to Thua Thien-Hue with the ancient imperial city of Hue as the centre.

Many nice beaches are also located here, such as Nhat Le, Cua Tung, Cua Viet, Thuan An, Canh Duong and Lang Co.

To reach their sea and island–based economic development goals, localities in the region are asked to develop specific plans to implement the Government’s policies in this field in accordance with their own real situation.

They also need to strengthen management agencies and create links between themselves and central ministries and industries.

Dong Nai attracts over US$700 million FDI

Dong Nai province claims to have attracted nearly US$709 million foreign direct investment (FDI) by the end of July.

In seven months, local authorities licensed 42 new projects worth US$339 million and approved an additional capital worth US$369.5 million for 39 operational projects.

Meanwhile, Dong Nai withdrew investment licenses granted to 4 projects worth US$7.72 million. By far, 1,037 projects have been operating effectively with a combined capitalisation of US$19.17 billion.

According to the provincial Management Board of Industrial Zones, 39 countries and territories have invested in 31 IZs, and more than 70 FDI projects have stopped operation with an estimated capitalisation of over US$250 million, accounting for nearly 7% of total registered projects.

Currently, the provincial People’s Committee is calling for investment in five major projects: the Dong Nai bio-technological application centre in Cam My district, the DOFICO industrial-agricultural complex in Xuan Loc district, the support industry subdivision in the Giang Dien IZ in Trang Bom district, the support industry subdivision in Nhon Trach 6 IZ, and the support industry subdivision in An Phuoc IZ.

Plastic exports set record

Export revenue from plastics in the first half of 2013 surpassed US$1 billion, up 9.3% year-on-year, according to the Vietnam Plastics Association (VPA).

Revenue from finished plastic products rose by 11.5% to reach US$851 million.

According to the VPA, plastics firms are still investing in new equipment and technology to enhance their capacity as the demand for plastic materials and products remains strong in major markets such as the US.

The association said that home and car accessories made of plastics are selling well in 2013 and predicted to remain strong in the coming years thanks to its wide applicability and large global demand.

Under a plan running until 2020, Vietnam aims to increase its share of the market for plastic products used by construction and industry, and to reduce the proportion of plastics used for packaging and household goods.

Indonesian coal firm eyes Vietnamese market

Indonesian coal mining company Bukit Asam (PTBA) plans to build a thermal power plant in Vietnam, said PTBA director Milawarma.

Milawarma revealed that his firm will also get involved in exploration and supply of coal to the Vietnamese market, alongside its plan to run business in Myanmar.

In the first half of this year, PTBA exported 500,000 tonnes of coal to Vietnam, which the firm considered a potential market as the Vietnamese energy industry sought to power the country’s rapid economic growth.

In Indonesia, the State-owned PTBA is implementing projects to build many power plants, including 2x8 MW Lampung, 2x 110 MW Banjarsari and 3x 10 MW Enim in southern Sumatra, which are expected to be operational later this year and in early 2014.

PTBA exports 55% of its annual output. Between January-June 2013, it sold 8.81 million tonnes for US$527 million up 20% in volume but down 6% in value due to lower prices on the global market.

Over 4 million tonnes of rice exported in seven months

Vietnam shipped 4.22 million tonnes of rice abroad, earning US$1.88 billion, in the first seven months of this year, according to the Ministry of Agriculture and Rural Development.

In July alone, 633,000 tonnes were delivered to foreign importers for US$293 million.

China remained Vietnam’s largest rice consumer, with 1.29 million tonnes worth US$526.5 million in the first half, accounting for 33.9% of total rice export revenue.

Other key export markets included Singapore, Angola and Hong Kong, which obtained impressive growth of 37%, 30.6% and 22.7% from a year earlier, respectively.

However, the price of export rice saw a year-on-year decline of 6.7% to US$443/tonne during the January-June period. As a result, in the past seven months, rice exports decreased 11.3% in volume and 13% in value compared to the same period last year.

Bankruptcy law needs revising

The Bankruptcy Law, despite amendments in 2004 since entering into effect in 1993, is still unable to prevent many insolvent businesses from littering the national economy.

Ministry of Planning and Investment statistics show more than one fourth of over 600,000 operational businesses remain unaware of their legality. The General Department of Taxation reports nearly one third of those businesses have stopped paying taxes.

At the recent mid-term Vietnam Business Forum 2013, the Vietnam Chamber of Commerce and Industry (VCCI) painted business bankruptcy in a gloomy light.

According to VCCI, the revised 2004 Bankruptcy Law, which was intended to address the shortcomings of its 1993 original, has yet to live up to public expectations. Courts and relevant agencies have proposed at least half of its articles require further amending to keep up with recent market developments.

Article 3 stipulates that any businesses or cooperatives unable to pay debts by a specific due date should be considered as threatened by bankruptcy.

In reality, most businesses and cooperatives are both creditors and debtors. In some cases, businesses and cooperatives with credits much higher than their own overdue debts are still forced to declare bankruptcy.

Filing for bankruptcy is also a preventatively complex process. Article 22 says once a court receives a business’s official request to file, it can ask for any further information it deems relevant to be submitted within 10 days.

Hanoi People’s Court Judge Pham Tuan Anh says the impractical deadline ignores the fact businesses find it difficult to collate the request evidence themselves, not to mention the widespread unwillingness to cooperate with the court.

Out of Hanoi’s hundreds of thousands of businesses covering all sizes and industries, tens of thousands could be teetering on the edge of bankruptcy or dissolution. Anh notes that none of them, however, have been officially declared bankrupt so far.

State businesses’ bankruptcy declarations are themselves delayed by the requirement for approval in writing for their ministry or provincial People Committee governing bodies.

The economic slowdown has prompted legal experts have propose another revision of the 2004 Bankruptcy Law, arguing the courts’ failure to properly deal with insolvent businesses is impacting economic relations.

These “zombie” businesses are forced to halt their operations while courts consider their decisions, wasting resources and damaging other healthy businesses.

The Zombie phenomenon creates illusions that could fuel long-term problems. Banks often respond to profit losses with rollovers or by injecting more capital into insolvent businesses, eventually threatening the integrity of the banking system as a whole.

The State’s business governing bodies sometimes drag their feet admitting the extent of their responsibility’s troubles for fear that bankruptcy will affect their reputation and performance assessments. They claim bankruptcy’s repercussions, like rising unemployment and welfare system burdens, are the real reasons behind the delay.

There is no doubt that the nation’s business environment will be healthier when insolvent businesses are officially declared bankrupt as soon as possible. The declarations free up funds once earmarked for moribund businesses, allowing reallocation to the wider restructuring process that will create entities better able to compete in the current economic context.

Hanoi Industrial and Economics College Dr Duong Duc Chinh notes business bankruptcies are a normal part of a functioning economy. He says eliminating inefficient businesses and cooperatives is even more imperative in a market economy to ease their burden on the State budget.

Experts say the Bankruptcy Law needs revision to simplify bankruptcy filings for inefficient businesses. Bankruptcy’s winnowing effect should be considered a valuable impetus driving economic development.

Agricultural exports’ 7 month total hits US$15.57 billion

July’s agro-forestry and seafood exports are estimated to have earned US$2.39 billion, bringing their seven-month export value to US$15.59 billion.

The figure is a 1.6% slide from a year earlier.

Major agricultural exports are valued at US$7.84 billion, down 11.9%. In contrast  export earnings of seafood edged up 0.7% to US$3.14 billion, and forestry product exports rose 12.2% to US$3.05 billion.

Vietnam exported 4.22 million tonnes of rice over the reviewed period, earning US$1.88 billion, down 11.3% in volume and 13% in value compared to 2012. Prices remained at an unfortunately low level. China is still Vietnam’s largest rice importer.

Vietnam’s coffee exports totaled around 890,000 tonnes in the 7 months, worth US$1.91 billion, representing a sharp fall of 23.7% in volume and 22.4% in value.

The country’s other major export commodities include tea (US$120 million, up 4.1%), cashew nuts (US$759 million, up 5.9%), pepper (US$618 million, up 17.7%), wood and timber products (US$2.9 billion, up 12.3%), rubber (US$1.21 billion, down 18.4%), and cassava (US$629 million, down 22.5%).

Sugar supply far in excess of demand

Sugar supply is now far in excess of demand by about 100,000 tons, before the next sugarcane crop, according to the Ministry of Agriculture and Rural Development.

The Ministry revealed this information at a meeting to review sugar production in the Mekong Delta province of Hau Giang for the period 2012-2013.

The Vietnam Sugar Association has proposed to the Government to have flexible mechanisms to boost sugar exports and for authorized organs to strictly tackle sugar smuggling.

According to the Ministry, there are 40 sugar processing plants operating with total capacity of 134,200 tons per day.

They have so far processed 16.6 million tons of sugarcane to yield 1.53 million tons of sugar, an increase of 224,000 tons over the previous crop.

The sugar industry still faces a lot of difficulties. The biggest concern is that farmers cannot sell their sugarcane right after harvesting.

In addition, farmers have been forced to reap sugarcane early to avoid expected flooding in Hau Giang Province, which lowers the sugarcane quality and price.

Over the last three years, the sugar industry has remained quite stable in comparison to other agricultural sectors. Ninety-three percent of sugarcane cultivation has been contracted by processing plants in the country. Some businesses have also mapped out good policies to assist the development of sugarcane cultivation.

Salary disparity between managers at state-owned corps and affiliates

A report announced by the State Audit of Vietnam showed that there is a big disparity in average salary between managers at state-owned corporations and groups and managers at their affiliates.

In 2011, managers’ average income at Vietnam Northern Food Company No. 1 (Vinafood 1) was VND56.5 million (USD2,667) per month compared to VND6.5 million (USD309.5) for those at its affiliate Vinh Ha Food Processing and Construction JSC. Meanwhile, Vinh Ha Food Processing Construction JSC has the highest average salary among Vinafood 1's audited affiliates.

The situation was the same at Vietnam Northern Food Company No. 2 (Vinafood 2). The average monthly income of Vinafood 2’s managers was 79.74 million. Whereas the average was just VND11.17 million at Dong Thap Food Company which has the highest salary among Vinafood 2’s audited affiliates.

At Civil Engineering Construction Corporation No. 4 (Cienco4), the member council and deputy general director had an average monthly salary of VND39.9 million compared to just VND5.49 million for labourers.

The auditing result submitted to the National Assembly last November showed that in 2011 Petrolimex made a loss of VND1.42 trillion (USD67.6 million). In that year, the corporation chairman had a monthly salary of VND58 million and the members of the board of director’s salaries were VND42 million. The salary level for the head of the board of supervisors was VND41 million and deputy-general -director was VND40 million.

The salary unit cost at wholly state-owned enterprises is approved by the ministries of Labour, Invalids and Social Affairs and the Ministry of Finance. At joint stock companies, however, this is decided by the member council, said Nguyen Hong Long, an official from the State Audit of Vietnam.

Regarding the salaries of managers, Long said, Vinafood 1 and Vinafood 2 have made a profit and the salary unit cost is approved by the Ministry of Labour, Invalids and Social Affairs.

Vietnam National Petroleum Group (Petrolimex) is an exceptional case, he said, explaining that in spite of making a loss, it still offered a high salary unit price because the corporation has joined the market petroleum stabilisation.

According to the State Audit of Vietnam, a number of units at corporations and groups have not yet formed its salary unit price or initiated a suitable one.

Viet Nam plastic exports set record

Viet Nam export revenues from plastics in the first half of 2013 surpassed US$1 billion, up 9.3 per cent year-on-year, according to the Viet Nam Plastics Association (VPA).

Revenue from finalized plastic products rose by 11.5 per cent to reach $851 million.

According to the VPA, plastics firms are still investing in new equipment and technology to enhance their capacity as the demand for plastic materials and products remains strong in major markets such as the US.

The association stated that home and car accessories made of plastic are selling well in 2013 and predicted to remain strong in the years to come thanks to its wide applicability and large global demand.

Under a plan running until 2020, Viet Nam aims to increase its share of the plastic products market used by construction and industry, and to reduce the proportion of plastics used for packaging and household goods.-