Vietnam-favourite destination for investors

With liberalization, privatization and globalization of the finance market, Vietnam is becoming a favourite destination for investors, confirmed by the US Research and Markets Company.

Research and Markets conducted a recent study, forecasting Vietnam’s finance industry by 2013. Results reported Vietnam’s finance market has developed quickly in the past and gained great strategic importance on the global scale, as well as the fields of banking and insurance attracting source of investment from foreign countries due to their potential.     

The company’s report has emphasized Vietnam is reforming the field of banking and leaving out unreasonable procedures, pushing development for the coming years.

The field of banking is attractive to investors because Vietnamese banks’ scheduled annual growth rate during 2011-2013 period stands at 29 percent.

Also, according to the US Research and Markets Company, Vietnam’s insurance field in recent years has developed quickly and drawn the participation of many foreign companies, stimulating competitiveness and bringing advantages to consumers.

The company predicted that the micro-finance field has huge potential for Vietnam, with 73 percent of the population living in rural areas and about 54 percent of the labour force doing farming work.

It estimated the total lending capital, without payment, in rural areas occupy 17 percent of the banks’ credit source and over 80 percent of population in rural areas hasn’t approached any finance source from a finance institution.

HCM City trade centre puts focus on US, Japanese export markets

The HCM City Investment and Trade Promotion Centre (ITPC) has identified the US and Japan as the largest markets for exports this year, the ITPC director said on Wednesday.

Speaking at a meeting in HCM City, Tu Minh Thien said the Japanese market was now wide open to Vietnamese-made products because of the signing of the Viet Nam-Japan Economic Partnership Agreement (VJEPA), under which many of the country's export items to Japan will enjoy a 0-per cent tax rate.

With the tax cuts, Vietnamese businesses can compete on price with other rivals in the Japanese market.

ITPC plans to open a centre in Japan's Nagoya City in April, aiming to push up business co-operation and trade promotion programmes in the Japanese market.

Thien noted that the US Government would also strengthen business co-operation with Viet Nam this year.

Last year, the US President in his State of the Union address announced a National Export Initiative (NEI) to double exports over the next five years.

A core mission of the NEI is exploring ways to seize opportunities in countries with high-growth potential.

China, India and Brazil are critical countries where resources will continue to be directed.

In addition, federal agencies have identified "next tier markets," including Saudi Arabia, South Africa and Viet Nam, where the US aims to develop longer-term commercial engagement strategies to cultivate future opportunities.

In January, ITPC also organised a business trip to the US, aiming to promote trade and tourism between the two countries.

There will be one more business trip to the US in March and to Japan in August.

Apart from the US and Japan, ITPC will increase trading activities in other markets such as Cuba, Cambodia, Myanmar, Laos, Africa and the Middle East.

Together with organising many exhibitions and business trips, the centre will map out specific strategies for every market with the aim to make investment more effective.

The key export sectors include food, processed foodstuff, handicraft, household appliances, industrial products and electronics products.

For example, ITPC will focus on investing property and tourism in Cuba and strengthening consumer goods and household appliance products in Cambodia and Myanmar this year.

For the domestic market, Thien said the distribution network and trademark building were key points in developing the market.

In addition, the businesses need to combine trade activities with tourism and service activities to promote their products.

Also, they should update information about trade and technical barriers, foodstuff hygiene and safety regulations for their exports, he said.

This year, ITPC will coordinate with the Netherlands' Centre for Promotion of Imports from developing countries to assist Vietnamese exporters in their efforts to increase exports to Europe.

They will hold export coaching programmes that will offer technical assistance, training and market entry activities.

At the meeting, ITPC signed a co-operation agreement with the HCM City Credit Guarantee Fund for Small- and Medium-Sized Enterprises, Minh Tran Ltd Co, Economic News and Viet Nam Investment Review.

Its aim is to help ITPC's Viet Nam Exporters Association members to easily access the credit fund and support them in further penetrating the Japanese market.

Industrial production up 16.1% in January

The nation's industrial production value this month is estimated to grow by 16.1 per cent to VND73.7 trillion (US$3.5 billion) against the same period last year, according to the General Statistics Office.

The growth rate was better compared with last January but the value declined by 2.5 per cent compared with December, said Statistics Office economist Nguyen Quang Ha. The industrial value early last year was low due to the economic downturn but got better in the latter part of the year thanks to economic recovery.

The increase in production value in the first month of this year was a sign of possible high-speed growth in the industrial sector this year, he said.

Many key industrial sectors had strong growth in production during January against the same period last year, including liquefied petroleum gas (36.2 per cent), sport shoes (35.1 per cent), ceramic tiles (32.5 per cent), auto and tractor tires (26.8 per cent), glass (20.7 per cent), cement (18.9 per cent, clothes (17.2 per cent), steel (15.9 per cent) and electricity (14.3 per cent).

However, some consumer goods had a reduction in output for the first month. The output fell by 78.2 per cent for air conditioning, 41.6 per cent for trucks, 15.3 per cent for televisions and 13.6 per cent for assembled autos.

During the first month of this year, the foreign-invested sector showed the largest industrial production value at VND31.7 trillion ($1.5 billion), 18.5 per cent higher than the same period last year.

Meanwhile, the private sector saw a 18.9-per-cent year-on-year rise in production value to VND27.2 trillion ($1.3 billion) and the value made by the State-owned industrial sector had a slight increase of 6.7 per cent to VND14.8 trillion ($704.7 million).

Song Tranh's second turbine goes operational

The second turbine at the Song Tranh 2 Hydroelectric Plant yesterday began to generate electricity for the national grid.

The 95MW turbine successfully started operation last Friday, 33 days ahead of schedule. The plant's water tunnel was finished in November and it begun driving the turbines.

The plant, located in central Quang Nam Province's Bac Tra My District, has two turbines with a total capacity of 190MW designed to provide 680 million kWh per year.

Invested in by Electricity of Viet Nam, the plant has a total investment capital of more than VND5trillion (US$256.4 million). It became the second hydroelectric plant on the Vu Gia-Thu Bon River system to have become operational. The plant would help reduce floods downriver, providing water for agricultural production and people living in the province.

Water levels at the reservoir have proved sufficient to allow both turbines to operate at full capacity.

The plant's first turbine has provided nearly 30 million kWh after its connection to the national power grid.

The Song Tranh plant and its turbine were expected to ease the country's power shortages, especially in dry season.

The plant is expected to be inaugurated this September.

Mekong Capital triples ownership in Traphaco

Mekong Capital announced today that its Vietnam Azalea Fund Limited had tripled its ownership in traditional medicines producer Traphaco Joint Stock Company, increasing its shareholding percentage to 20 per cent from 6.5 per cent.

The step was made three years after the fund started investing in the company with initial investment capital of over $3 million along with other foreign partners such as ANZ and BVIM.

Traphaco has been establishing more company-owned distribution branches in key provinces across the country and taking actions to acquire full control of its manufacturing affiliates. Meanwhile, they have continued to invest in the development of their brand.

“We believe these are the right steps for a Vietnamese pharmaceutical company to achieve sustainable profit growth over the coming years.

We look forward to partnering with Traphaco to fulfill on their vision,” said Chris Freund, managing partner of Mekong Capital.

Traphaco is a pharmaceutical company which specialises in the development, marketing and distribution of Vietnamese traditional medicines. Traphaco produces and sells more than 230 products focusing on central nervous system, digestive, cardiovascular, analgesics, respiratory and ontological system and eye care among others.

The company owns a GMP-compliant factory in Hanoi, and it is a minority-shareholder of another GMP-compliant factory in northern Hung Yen province, called Traphaco CNC.

Vietnam Azalea Fund Limited targeting Vietnamese future blue-chip companies, both privately and formerly state-owned also acquired a minority stake in property developer Nam Long Investment Corporation for approximately $9.1 million in June last year before exiting its investment from Masan Food Corporation in November last year.

Three new bridges to cross Saigon River

In addition to the existing Thu Thiem 1 Bridge, three more bridges will span the Saigon River to link the Thu Thiem New Urban Area in District 2 to Districts 1, 4 and 7 of Ho Chi Minh City.

The new bridges – Thu Thiem 2, 3 and 4 – will be built under the technical infrastructure planning for the Area that has been approved recently by the Ho Chi Minh City People’s Committee.

Thu Thiem 1 now links District 2 to Binh Thanh District.

Besides these four bridges, the planning also includes a bridge for pedestrians and an East-West Highway tunnel that is in its last stage of construction.

PV