Vietsovpetro unearths fresh oil

The Russian-Vietnamese oil and gas joint venture, Vietsovpetro announced on July 2 that it has discovered a new deposit of oil in lot 09-1 to the northwest of Bach Ho (White Tiger) oil field.

Vietsovpetro Deputy General Director Le Viet Hai said the oil flow of 1,690 barrels a day was discovered at a depth of 3,500-3,650m in well ThT-1X in the Tho Trang (White Rabbit) structure. The new oil supply is in a separate geological structure in lot 09-1, Hai added.

The JV is scheduled to test four other potential deposits in the upper layers of the well.

Hai also said that after well ThT-1X, Vietsovpetro will drill well ThT-2X to make an assessment for the oil and gas reserve in the Tho Trang structure and conduct further economic and technical solutions to exploit the supply in 2013.

Brazil sues Vietnam for tyre dumping

The Ministry of Development, Industry and Foreign Trade of Brazil (MDIC) has decided to sue Thailand, China, Taiwan and Vietnam for dumping motorbike tyres on its market.

The MDIC announced on June 25 that it will conduct investigations into tyre imports from the aforementioned countries over the period from July 2010 to June 2011.

The decision came after Brazil’s National Tyre Industry Association (ANIP) filed a lawsuit to the MDIC, accusing tyre manufacturers from Thailand, China, Taiwan and Vietnam of injuring domestic production.

According to the Vietnam Competition Authority, Thailand’s dumping margin of US$7,790/tonne (equivalent to 279.21 percent) will be used as the benchmark for the investigation.

This is Brazil’s third anti-dumping lawsuit against Vietnam this year, following those on fibre and flat-rolled stainless steel.

Exports to Myanmar fetch US$50 million

Vietnam earned nearly US$50 million from exports to Myanmar in the first six months of this year, up 36.3 percent over the same period last year.

The two-way trade turnover reached US$130 million, representing a year-on-year increase of 65.6 percent.

Vietnam is Myanmar’s 13th largest exporter of steel, garment and textiles, mosquito nets, fertilizers, construction materials, electricity equipment, stationary, plastics, pesticides, chemicals, cosmetics and computer equipment.

The country is among the top ten importers of farm products, rubber, timber and seafood from Myanmar.

The two countries are strengthening bilateral trade ties through a series of event in 2012, including a business forum in Yangon and two trade fairs in Yangon.

Vietnam’s manufacturing index declines in June

Production continues to decline Vietnam, says the Hong Kong and Shanghai Banking Corporation (HSBC).

According to HBSC’s latest report the country’s manufacturing index (PMI) dropped from 48.3 in May to 46.6 in June.

The index has now posted below the neutral value of 50.0 for three months running.

The report says that output prices dropped markedly amid weaker demand and falling raw material costs. A number of manufacturers say that lower-than-expected sales have resulted in unwanted inventory build up.

The deterioration in business conditions reflected the significant decline in new orders during June. Incoming new business fell for the second successive month and at the fastest rate since the survey began in April 2011.

Anecdotal evidence widely suggests that the global economic slowdown has caused a squeeze on spending among clients. The latest data points to a marginal reduction in new exports, which is attributed to the softer demand from both developed and emerging markets.

Fewer new orders meant reduced production in June, with output volumes declining for the third consecutive month and at the most accelerated pace since February. Manufacturers sought to utilise their spare capacity in June by reducing their levels of work-in-hand that has not yet been completed, therefore outstanding business dropped at its fastest pace in the 15 months data has been collected.

Post-production inventory increased steadily in June, reversing May's downward trend. A number of manufacturers noted that lower-than-expected sales had resulted in unwanted inventory building. This, in turn, encouraged firms to alleviate pressure on working capital by cutting input buying. June data signaled a sharp drop in purchasing and a steeper fall in pre-production inventories in May.

Softer demand and lower production has led to a decrease in the employment figures for June, thereby ending a three-month period of net job creation. That said, most manufacturers noted that lower workforce levels is a result of not replacing those who voluntarily left employment, not staff downsizing.

Meanwhile, average input costs fell for the first time since January and more quickly than at any time since the survey began in April 2011. Reports from survey respondents frequently mentioned lower oil prices. Output charges in the manufacturing sector also fell more quickly in June than in the previous month.

Commenting on the Vietnam Manufacturing PMI survey, Asia economist for HSBC Trinh Nguyen says the continued slowdown in manufacturing suggests   businesses continue to face tough conditions in Vietnam. “Internal and external demand is low. Prices are continuing to drop due to the low demand and commodity prices, as indicated by the drop in input costs. The State Bank of Vietnam lowered interest rates in the first half of the year to spur spending in the country. This is likely to filter through into the second half of 2012 and boost economic activity,” he said.

Vietnam, Portugal promote trade ties

A Vietnamese-Portuguese business meeting was held in Hanoi on July 3 to boost economic cooperation between the two countries.

The event, held by the Vietnam Chamber of Commerce and Industry (VCCI), was attended by many Vietnamese and Portuguese businesses who were keen to study the local market and seek trade partners.

Local businesses had an exchange with Portuguese leading firms operating in the fields of publication, food processing, recycled industrial product distribution, construction machinery, plastic films, and animal feed production.

Since Vietnam and Portugal established their diplomatic ties in 1975, two-way trade turnover has grown significantly, from US$100 million in 2008 to US$170 million last year.

Nguyen Tuan Hai, an official from the VCCI, said Vietnam always attaches importance to strengthening cooperation with Portugal - a key trade partner of the Southeast Asian country. Businesses from both countries should plan the leading role in bringing bilateral trade to a higher level, Hai said.

Helena Ramos, an official from the Portugal Business Association, said the two countries should fully tap their potential to tighten economic ties in a more dynamic manner for mutual benefits.

Indonesian bank plans to open branch in Vietnam

The Bank of Mandiri, the largest  in Indonesia, has announced that it plans to open branches in Vietnam, Myanmar and Thailand, as part of its plans to become the foremost lender in Southeast Asia.

According to the bank’s Vice President Riswinandi, Mandiri has set a target of becoming one of the five leading banks in ASEAN by 2013 and one of the top three banks in the region by 2020.

Created by the merger of four State banks more than a decade ago, the Bank of Mandiri started its first overseas commercial operation in Shanghai in China last November.

At present, the Jakarta–based bank has total assets of around US$58 billion.

Largest FDI project starts in Haiphong

The Japanese group, Bridgestone, began construction on a US$575 million automobile tyre manufacturing plant in the northern port city of Haiphong on July 2.

This is Haiphong’s largest foreign direct investment (FDI) project, covering 102 hectares in the Dinh Vu industrial zone (IZ).

The plant is scheduled to be operational in March 2014, creating jobs for 1,900 labourers. It aims to reach full production capacity of approximately 24,700 tyres per day in 2016.

The Bridgestone group currently has 47 tyre manufacturing plants in 20 countries and territories around the world.

Total foreign investment in the Dinh Vu IZ has reached US$1.5 billion, 45 percent of it coming from Japan.

Addressing the plant’s ground-breaking ceremony, Deputy Prime Minister Hoang Trung Hai highlighted Haiphong’s success in attracting FDI, saying the city has garnered more than US$962 million in FDI since early this year, ranking second among the most attractive investment destinations in Vietnam.

He asked the municipal authorities to work closely with Bridgestone to recruit skilled workers, ensure the progress of the project and protect the environment.

The Vietnamese Government aims to provide the best conditions for foreign investors, including those from Japan, to run businesses in the country for mutual benefit, he said.

There is a growing trend of Japanese businesses increasing investment in Vietnam. In the first half of this year, Vietnam attracted US$4.16 billion from Japanese investors, which accounts for 65 percent of its total FDI.

Cashew nut exports increase in six months

Vietnam earned US$666 million from exporting 97,000 tonnes of cashew nuts in the first six months of this year, a year-on-year increase of 26.6 percent in value and 41.2 percent in volume.

About 20,000 tonnes were shipped abroad in June alone, according to the Ministry of Agriculture and Rural Development.

However, the average export price decreased 8.1 percent to US$6,842 per tonne at present due to inactive market transactions and falling prices.

Vietnam remains the world’s biggest cashew nut exporter, making up 60 percent of the global volume. Its major consumers are the US (that purchases 37.7 percent of the total), China (26.3 percent) and the Netherlands (17.4 percent).

Vietnam is expected to export nearly 200,000 tonnes of cashew nuts this year.

Vinh Long: 36 projects need investment

The Vinh Long provincial People’s Committee has announced a list of 36 major projects that need investment in the 2012-2015 period.

The total amount of capitalization is estimated at VND18 billion.

Three major projects are related to building infrastructure in Binh Tan industrial park at a cost of VND2,000 billion, Dong Binh industrial park (VND1,750 billion), and An Dinh industrial park (VND1,000 billion).

In addition, a cluster of six industrial projects in districts cost VND2,380 billion and two projects on high technology at Mang Thit and Binh Minh about VND220 billion and VND340 billion, respectively.

It’s customers who pay for power losses
 
With the power loss rate in Vietnam still standing at as high as 9 – 10 percent, despite a huge effort to cut the figure over the last few years, the generator has counted the losses into their power prices, and in the end it is consumers who have to pay for the damages.

Power loss in 2012 is expected to reach 9.2 percent, according to Duong Quang Thanh, deputy CEO of the Electricity Group of Vietnam, commonly known as EVN.

With the country scheduled to produce and buy a total of 118 billion kWh this year, the loss will be an enormous 11 billion kWh.

“Of course the loss will be added into the power prices sold to consumers,” an official from the Vietnamese Energy Association said.

Meanwhile, an EVN report said it has cut power loss by 0.93 percent on an annual basis, helping to save some VND200 billion.

EVN currently counts power loss into its power cost price, as “they have no other choices and, in principle, they are allowed to do so,” said Dinh The Phuc, deputy head of the Ministry of Industry and Trade’s Electricity Regulation Agency.

Phuc said power loss is a technical matter, an idea shared by EVN CEO Pham Le Thanh, who said transmitting electricity via wires always produces losses.

“So it’s impossible to completely remove power losses,” he said.

Meanwhile, an EVN official told Tuoi Tre that it is essential that the electricity transmission system be enhanced, in order to reduce power loss.

“But this requires a huge amount of capital, which runs beyond EVN’s reach,” he said, adding that the power generator thus has to gradually complete the progress.

“It can’t be done quickly,” he said.

“We have the ability to reduce the loss rate to below 5 percent, but this would require several hundreds of trillion of dong to replace old power wires and electrical substations.” (VND1 trillion = US$48 million)

On June 28, during an online meeting on the government website, the Deputy Minister of Industry and Trade ordered EVN to try to cut the power loss rate to around 5 percent, which is the average rate of the region.

But this seems an unachievable task, as the rate is expected to increase next year when the southern region faces a power shortage, and will need to source power from the north, said Thanh of EVN.

In 2015, the rate will still be somewhere between 7 and 9 percent, he said.

Gasoline price cut by VND600 per liter

The retail prices of gasoline and other petroleum products have been cut for another time, by VND200-600 per liter/kg, according to a decision by the Finance Ministry.

The price cut took effect at 7:00 pm today, June 2.

Accordingly, A92 and A95 gasoline prices were reduced by VND600 per liter to VND20,600 per liter and VND21,100 per liter respectively.

The prices of diesel oil and kerosene were cut by VND200 per liter to VND19,900 and VND19,850 per liter respectively .

The fuel oil price went down by VND300 per kilogram to VND17,650 per kilogram.

The price adjustments were made after the world oil prices continued to fall.

Thus, the retail prices of gasoline have been adjusted down 5 times so far this year with a total reduction of VND3,200 per liter.

Along with the price cut, the ministry decided to increase the import duty on gasoline and oil products by 2 percent.

Eximbank launches online registration for debit card
 
Vietnam’s Export Import Commercial Joint-Stock Bank (Eximbank) has launched an online registration service for debit cards, in an effort to provide better and more efficient customer service.

From now on, customers need not go in person to the bank to register credit cards but can avail of the service in the comfort of their home by logging onto the Bank’s website.

Within 48 hours, a bank staff member will contact the customer and provide all necessary information, answer all queries and do the needful.

The Bank’s staff will provide all assistance in filling in the required   documents to receive an Eximbank V-TOP local debit card or a Visa debit card.

Retail sales leap 6.5% in first half

Despite a decrease of 0.6 per cent in June, the retail sales value of goods and services in the first half of the year surged 6.5 per cent against the same period last year to VND1,137 trillion (US$54.2 billion), according to the General Statistics Office (GSO).

However, the rise was lower than the 7-10 per cent recorded in the same period in recent years.

Among the total, trade made up VND880.7 trillion ($41.93 billion), followed by the hotel-restaurant sector, which was worth VND132.8 trillion ($6.32 billion).

GSO expert Vu Manh Ha attributed the decline to slow economic growth, high interest rates and stagnancy in production, which had affected spending power.

Ha forecast that the sale of goods and services would improve in the second half of the year thanks to the Government's stimulus programmes. To boost production and consumption, the Government recently cut interest rates and approved a VND29 trillion ($1.4 billion) tax break package to support businesses.

Though Viet Nam was no longer among the 30 most attractive retail markets in the world as listed by A T Kearney, experts said the domestic market still had great potential in the eyes of retailers.

Nguyen Thi Anh Hoa, owner of the CitiMart chain, said the report by A T Kearney would in no way affect foreign investors' plans to penetrate the Vietnamese market.

Hoa said some foreign distributors had attempted to penetrate the Vietnamese market through CitiMart, as had occurred with a number of retailers in Singapore.

The Vietnamese market was one of the most dynamic among newly emerging economies in Southeast Asia and had a number of attractive advantages, Hoa said. The country had seen average economic growth of 7.3 per cent over the last 20 years, which had led to improved living standards. That had resulted in increased purchasing power, she said.

Pascal Billaud, general director of Big C Viet Nam, told Saigon Economic Times that modern retail channels held just 20 per cent of the total distribution market. That meant there were great opportunities ahead for investors, he said.

This was why Big C, Parkson, Metro Cash&Carry, Lotte Mart, and Family had been trying to expand their chains, while new distributors such as Aeon and E-Mart, were looking to move into Viet Nam, Billaud said.

Trade associations need facelift
 
The role of trade associations needs to be enhanced to support enterprises during difficult times, according to Nguyen The Thao, chairman of the capital's People's Committee.

Nguyen Xuan Son, chairman of the Viet Nam Association of Small-and Medium-Sized Enterprises, said that trade associations had to call for help on behalf of their members when needed.

According to figures from the General Statistics Office for the first half of the year, more than 26,000 enterprises had gone bankrupt or ceased operations, an increase of 5.4 per cent over the same period last year.

Capital shortage has been a major reason for bankruptcies. Although the State Bank decided to reduce interest rates to 13 per cent maximum, the implementation is different. Tran Hong Phuc, deputy general director of Renaissance Holdings Construction JSC, told Kinh te & Do thi newspaper that the company still borrowed at an interest rate of 15 per cent per year.

According to the Ministry of Industry and Trade, the country has more than 300 trade associations, founded to protect the interests of its members, however many of them did not assist in growth.

Under investigations by the Viet Nam Chamber of Commerce and Industry (VCCI), up to 71 per cent of associations do not have specific departments specialising in law.

Some operating in the mechanical industry, for instance, have not actively responded to association activities. Many believed that by sharing experience, customers would reveal business secrets, so they decided not to participate, according to Pham Thi Thu Ha, a member of the Viet Nam Association of Mechanical Industry.

She said many associations were born "just for fun". The activities of these have not been progressive or brought businesses many benefits, hence making enterprises afraid to participate. Moreover, it not only takes time but also money to pay membership fees.

Besides, some retired officials who kept high positions in State groups or offices often appeal to enterprises to establish associations in order to create fame. "They don't really worry about supporting their members," she said.

However, Deputy Minister of Trade and Industry Nguyen Thanh Bien said via the Government web portal that trade associations face a lot of difficulties such as lack of resources, specialised staff and a legal framework for development.

Dao Phan Long, vice chairman and general secretary of the Viet Nam Association of Mechanical Industry, said that a specific law differentiating between societies and associations needed to be built.

Son said the status of associations should not be the same, and that levels of support to their businesses should differ.

Associations are formed to support industries and businesses to grow, but to do that, there should be clear policy and regulations on capital, he stressed.

Bien suggested the State clarify the role and function of trade and support associations, aiming to promote the export of goods to foreign countries, strengthening the domestic market, developing mechanisms to exchange market information and business customer membership.

Rice yield rises by 466,000 tonnes

The Ministry of Agriculture and Rural Development (MARD) estimated a 466,000 tonne increase in this year's winter-spring rice crop compared to that of 2011 with farmers, having already harvested 20.26 million tonnes by June 15.

It said southern and central regions had completed harvesting and were busy cultivating summer-autumn crops while in the north, farmers in the rice hubs of Thai Binh and Nam Dinh provinces were still busy collecting winter-spring produce.

According to Do Hai Dien, head of the Nam Dinh Cultivation Office, local farmers have so far harvested 40 per cent of their rice crops.

With winter-spring paddy so quickly harvested, producers across the country had started planting their summer-autumn crops earlier, said Nguyen Tri Ngoc, deputy director of the MARD's Cultivation Department.

The ministry said local farmers had planted more than 3.12 million ha of summer-autumn produce with an estimated capacity of 6.5 tonnes per ha.

For this crop, some farmers have even recorded 10 tonnes per ha for their winter-spring rice.

Though the ministry praised the good result and said it would encourage farmers to expand rice areas to ensure food security and exports, low prices remain a concern.

Similar to many other rice production localities, central Quang Binh Province enjoyes a high yield of winter-spring crops, but local farmers are still worried about current low prices at about VND4.5 million (US$215) per tonne, compared to nearly VND7 million ($330) last year.

Nguyen Dai Trung from Phong Thuy Commune, Le Thuy District complained he wanted to sell his rice, but he would surely suffer losses. Farmers needed money to buy fertiliser and other facilities for the next crop.

To cope with the matter, Minister of Agriculture and Rural Development Cao Duc Phat said to further stabilise local rice prices, ensuring farmers a profit, the MARD suggested temporarily buying and storing a million tonnes of rice. Enterprises that participate would be supported with low interest loan from July to September.

Cambodia ripe for more exports

Cambodia offers plenty of oppor-tunities for Vietnamese exporters although there is intense competition from countries such as Thailand and China, delegates said at a conference in HCM City last Thursday.

Le Quoc Phong, general director of the Binh Dien Fertiliser Group, said the Cambodian market had been familiar with fertilisers imported from Thailand and China. Therefore, the company faced difficulties in the initial step of penetrating the market.

Thanks to providing training courses for its sale agents as well as farmers, the company had gradually won consumers' confidence in its products. As a result, sales had increased strongly in recent years, Phong said.

He said last year the company earned US$50 million from the export of 90,000 tonnes of fertilisers to the Cambodia market. It expects to export130,000 tonnes of fertilisers worth $70 million this year.

Kao Sieu Luc, general director of ABC Bakery, also said Cambodia had very high export potential, but "we must understand consumers' taste and produce suitable products."

The company's revenue from the Cambodian market went up more than 40 per cent year on year, Luc told the conference organised by the Business Study and Assistance Centre.

He said the company planned to open 10 bakery shops in the coming time.

It also planned to build a bakery factory in the market.

Tang Quang Trong, sales director in Indochina region of Dai Dong Tien Corporation, said Cambodia was also a large market for Vietnamese plastic products for which Thailand posed stiff competition. Hence the company had focused on improving their products' quality and expanding its distribution system.

Currently the company enjoyed very good sales in Cambodia, Trong said, adding that it planned to construct a warehouse there as part of its expansion plan.

He said Vietnamese products exported to Cambodia must have labels in English.

Le Xuan Khue, deputy chairman of the Vietnamese High-Quality Products Business Association, said the association would organise a five-day trade fair of Vietnamese high-quality goods and exports in Cambodia from August 9-13.

The 10th edition of the fair would be a good chance for Vietnamese firms to reinforce their brands in the Cambodian market, Khue said, adding more than 150 Vietnamese businesses would take part in the event.

City's collective economy model viewed as success

HCM City has achieved positive results in the implementation of its collective economic model, contributing to the success of the country's economy.

Le Hong Anh, member of the Party Politburo, praised the results achieved by the city, saying one of the most significant achievements of the city was to help all cadres, Party members and residents improve their awareness of the roles of the collective economy.

He was speaking at a meeting held in HCM City last Friday to review the results of the Party Central Committee Resolution 5, after 10 years of implementation.

He noted that the city had successfully carried out many policies to support co-operatives, including those about land, finance and credit, technology and market expansion.

After 10 years of implementation, the city's collective economy had asserted its essential roles in socio-economic development of the city, especially in production and services.

The number of co-operatives that generate profits is rising, many of which have a profit of 20-35 per cent per year, according to Anh.

Some co-operatives have opened branches in many localities across the country. Co.opMart supermarket, for instance, has expanded branches to 30 provinces and cities.

Models of co-operation and association among co-operatives in the city have proved to be effective and efficient.

The collective economic model of HCM City has been expanded to 27 provinces and cities.

Nguyen Van Dua, permanent deputy secretary of the HCM City People's Committee, said the policy developed to deliver land (without collecting or reducing land-use fee) to agricultural co-operatives had not been carried out yet.

At present, many co-operatives can rent houses for doing business for short term only. In addition, many co-operatives are finding it difficult to access bank loans.

The city recommends that the Government amend the Co-operative Law in 2003 in order to ensure the operation of co-operatives, including reducing or waiving taxes for agricultural co-operatives.

Anh asked the city to continue to disseminate information about the collective economic model to residents to provide them with better understanding about its roles and benefits.

The city must issue more policies to help co-operatives in agriculture, environment, credit and housing, as well as improve the capacity of poorly trained officers in co-operatives, according to Anh.

In addition, Anh asked the city to thoroughly assess the results that it had achieved in implementing the resolution and report to the central steering committee.

Putting shop assistants on the front line

Singapore-based marketing guru Ron Kaufman yesterday spoke about how to build strong relationships with both internal and external customers at a seminar in HCM City attended by more than 300 people.

Defining service as taking action to create value for someone else and not just a reaction to a request, he said customers "remember surprising and unbelievable things" companies did for its customers.

Numerous organisations and studies had proved that better service was a key to retaining a company's best customers.

All over the world, people were taking practical steps to understand their customers better, create more positive experiences, generate greater value, deepen loyalty, and build long-term relationships for the future, he added.

Companies needed to teach their staff to think about service not just a procedure to follow but as a mindset of purposeful engagement and proactive communication that led to productive behaviour.

One problem among Asians was that people were always "waiting for the boss to give them permission or to tell them what to do".

Those days were over and the person at the frontline should be able to make a decision and act upon it, the guru concluded.

Speaking to Viet Nam News, he said: "Service is very important today for Viet Nam – because service is improving all over the world, and people who come to Viet Nam like me always compare the quality of service they experience."

Viet Nam had to compare and compete to create a better service experience.

As Viet Nam continued to develop, improvement in service should happen around the country, including in public services, Government services, educational services, medical services, and financial services.

"To uplift your service, you must focus on who you are servicing, who you are taking action for, what they want, what they need, what they tell you," he said.

Some customers wanted speed, some did not, some just wanted low prices, some would pay more but wanted you to teach them to explain to them.

"If you want a stronger relationship with the customer, you have to be willing to give more first."

The seminar, titled "Ron Kaufman Live! Uplifting Service", was organised by the ERC Institute Viet Nam.

Smaller industrial parks preferred
 
Now that it has been classed as a medium-income country, Viet Nam is encouraging the development of industrial clusters, a smaller version of industrial zones or parks.

This was stated by Nguyen Trong Hieu, deputy director of the Ministry of Planning and Investment's Enterprises Development Agency at a workshop on small- and medium-sized enterprises (SMEs) in Ha Noi on Thursday.

Hieu said pilot schemes, backed with US$3.7 million from the Italian goverment three years ago, were set up in three sectors — garments and textiles, wood processing and furniture, and leather and footwear.

Industrial clusters are concentrations of small and medium enterprises operating in the same value chain and connected by a dense network of business linkages.

This creates efficiency and competitiveness through complementary specialisation and co-operation for innovation.

Industrial clusters can increase business productivity because they support new and improved technology, the development of human resources and the expansion of markets.

The workshop was run by the United Nations Industrial Development Organisation (UNIDO).

The Vietnamese Ministry of Planning and Investment is backing the development. It is also supporting Italian SMEs in Asia through trade promotion and technical co-operation agreements between enterprises.

"Viet Nam has a large number of SMEs suitable for industrial clusters," Hieu said. He said there were many potential sectors for industrial clusters, such as textiles, footwear, furniture and seafood processing.

"Cluster grouping enhances competitiveness by improving productivity, encouraging start-up innovations, including competitor enterprises, and creating new opportunities for business activities," Hieu said.

He added that the approach to industrial clusters was still new and that the legal framework for cluster development was not clear.

The fact showed that provinces were forming clusters by simply filling up space and not adding to a value-chain network.

The deputy director suggested that potential models of industrial clusters should be selected and used as the basis for expansion and creating a legal foundation.

Francesco Russo, the project's chief technical adviser, said the three sectors had been chosen for pilots in HCM City, Ha Noi, Hung Yen Province and Binh Duong Province.

"The sectors have been among top five Vietnamese exporters. However, they are known for low added value, low integration and the need for better design and marketing capacity," Russo said.

Bike firms slip on banana skin

Japan-backed Honda Vietnam (HVN) had had to revise its 2012 production plan, said company general director Masayuki Igarashi.

Accordingly, HVN envisaged retrenching its motorbike production in 2012 to around 1.93 million units against 2.15 million units in 2011. The production capacity of HVN’s two manufacturing plants in northern Vinh Phuc province is two million units per year.

“Monthly production will be cut by 1 per cent, tantamount to 12 per cent for the whole year. From early year until the present, the company posted 104 per cent production output, hence production must be revised in later months,” said Masayuki.

Sinking sales have not only hurt HVN’s production in 2012 but could also threaten its plan to operate the third factory with an initial capacity of 500,000 units per year based in northern Ha Nam province.

As planned, construction will be finalised in late 2012 and the plan will come into service from 2013.

“Our third factory would not be commissioned on schedule if things did not improve even though construction was finished and associated equipment assembled,” said Masayuki.

Honda Vietnam makes up 60 per cent share in Vietnam’s motorbike market.

For its part, to fuel sales Italy-backed Piaggo Vietnam just rolled out its ever extensive promotional programme reserved for scooter Vespa and Fly versions. Accordingly, customers picking Vespa or Fly at its any dealers across the country during the time of Euro 2012 will enjoy special incentives worth VND3 million ($140) for Vespa and VND4 million ($190) for Fly lines.

Locally-invested motorbike firms are not an exception. Chairman Pham Cuong at Vietnam Auto Motorcycle Bicycle Association (Vaboma), also motorbike producer Sulfat Vietnam Company director said many motorbike firms kept on production just to pay bank loans and interest.

Motorbike firms’ critical state has also badly impacted on spare part manufacturers. Pho Yen Mechanical Joint Stock Company, one of 10 parts producers to Honda Vietnam, saw its sales revenue with HVN halving when this Japan-backed firm consumption sank.

Vung Ang power plant project speeds up

Construction of the $1.4 billion Vung Ang 1 thermal power plant in the central province of Ha Tinh is in its final stage and will be completed by the end of this year, contractors said.

Head of project management Pham Van Dinh said about 98 per cent of equipment for the plant has been completed while 66 per cent of construction and installation is done.

He said contractors have installed the 7,500 tonnes boiler number 1, one of the most important tasks of the project and also completed building the boiler house.

With investment from the Vietnam National Oil and Gas Group (PetroVietnam), the project is part of the National Power Development Plan for 2006-15. It will be the first coal-fuelled power plant to be built in the northern central region.

Nguyen Duy Loi, deputy head of LILAMA’s project management board, the project’s main contractor, said as many as 100,000 tonnes of equipment have been installed and of which 46,000 tonnes were produced locally.

“We have increased the number of workers in the construction field from 2,500 to 3,500 to accelerate the speed of construction.”

Once fully operational by the first quarter of 2013, the 1,200 MW plant will supply nearly 7.2 billion kWh a year to the national grid.

The government last year approved the plan on national power development for 2011-20, which is also called the seventh master plan.

According to the plan, Vietnam strives to have a power generation capacity of 75,000 MW by 2020 and 146,800 MW by 2030.

Hydropower plants would generate 23.1 per cent of the total capacity, pumped storage hydro-electric plants 2.4 per cent, thermopower coal-run plants 48 per cent and gas-run thermopower plants 16.5 per cent.

The country also plans to draw 5.6 per cent of the total capacity from renewable energy, 1.3 per cent from nuke plants and 3.1 per cent from import. The total investment capital of the power industry would be $48.8 billion by 2020.

Deputy PM okays Vinafood venture

The Vietnam Northern Food Corporation has received approval from Deputy Prime Minister Hoang Trung Hai to establish a joint venture specialising in rice processing and exports with a foreign enterprise.

On May 9, the corporation asked the deputy prime minister to consider its project to establish the joint venture with Louis Dreyfus Commodities Asia Pte Ltd (LDC) from Singapore.

Hai has asked the corporation to read comments from departments and ministries before completing legal documents on the establishment of the company and its operations.

LDC, which is the biggest importer of Vietnamese rice, belongs to the European-based Louis Dreyfus Corporation, which plays a key role in the global food market.

Over 3.3 million int’l tourists visit Vietnam
 
Vietnam welcomed over 3.3 million overseas arrivals in the first six months of this year, up 13.9 percent against the same period last year, according to the General Statistics Office.

Vietnam ’s major tourism markets include the Republic of Korea , Thailand , Malaysia , Japan , France , China and the US .

Of the total, nearly 3 million arrived in Vietnam by air while 27,000 came via sea routes and 500,000 by land.

However, June saw a slight year-on-year drop of 6.6 percent, with just more than 417,000 arrivals.

The contraction is attributed to the impacts of the global economic turmoil that leads to the tightened spending on tourism.

The number of Chinese tourists registered the largest reduction at 12.3 percent, followed by that of Cambodia.

Upgraded traditional markets cause trouble for traders

Hanoi authorities are encountering troubles with traders when trying to rebuild and upgrade deteriorated traditional markets. Traders complain the improvements are ruining their businesses.

Recently, nearly 500 traders at Nghia Tan Market gathered at Cau Giay District People Committee headquarters to oppose the decision to upgrade the market.

According to the plan, Nghia Tan market would be changed into an office and shopping complex with indoor market.

Although the traders approved of rebuilding the downgraded market, they did not agree with the choice of commercial building, claiming the change would ruin their businesses.

A prime example they said is the rebuild of Hang Da Market.

In 2007, despite the traders' proposals to contribute capital after the change of Hang Da market, traders have had to work in an underground market behind the new building. Business has slowed considerably since the location is hard to find. Many traders have to put their kiosks up for sale.

After one year, Tuyet, a trader admitted she would sell her kiosk. "After we moved here, income dropped constantly. People are reluctant to come and buy because they think since we sell goods in a commercial building, the prices must be high."

The city's policy is to change deteriorated markets into multifunctional buildings. The investors provided bigger kiosks, reasonable rental prices and better businesses.

However, Vu Vinh Phu, Chairman of Hanoi Supermarket Association said the market 'function' is overwhelmed by the office and commercial functions in the new design. "A market shouldn't be an enclosed space. It has to be ventilated even underground."

At a conference on managing traditional markets on June 20 held by the Ministry of Industry and Trade (MIT), many traders protested against turning traditional markets into commercial buildings.

Dr. Hoang Tho Xuan of MIT's Trade Research Institute said traditional markets offered diverse, fresh groceries, cheap prices and a unique relationship between traders and buyers. He also said that a supermarket model should not be applied to traditional markets because it would cause inconvenience for both traders and buyers.

Dr. Stephanie Geertman of Canada's HealthBridge Centre said if the government only focused on modern retail channels, they would hand over the control over food supply for private companies.

The deputy head of MIT said the change should be reconsidered. Rising rental fees not only caused trouble for traders but the lack of customers had also caused losses to investors.