Province to get tough on tardy tourism projects

Authorities in the Mekong Delta province of Kien Giang warn they will get tough with tardy tourism projects and have started by canceling five that investors have not completed in time.

Kien Giang Tourism Joint Stock Co was to have developed three of them, namely Ba Hon Park and Bai Duong Resort in Kien Luong Commune and an amusement park in the Dam Chit urban area in Giang Thanh Commune.

The two others are a film studio and resort in the Hai Tac archipelago in Ha Tien village by Nhat Tam Lasta Film Joint Stock Co, and a resort in Doi Moi island by the Phu Quoc Tourism Joint Stock Co.

The projects had been licensed between one and two years ago, but the investors had either not begun work on them or failed to furnish investment plans to authorities.

Japanese firm, fund buy 34% of Saigon Paper

Japanese paper manufacturer Daio Paper Corp and the Development Bank of Japan’s Bridgehead fund have acquired a 34 percent stake in Saigon Paper Corp as part of their expansion plans for Southeast Asia.

Cao Tien Vi, general director of Saigon Paper, said the two will provide financial, technological, management, and training support to his company.

They have plans to later increase their stakes in Saigon Paper, which is a leader in the Vietnamese tissue-paper market with a 24 percent share.

Daio Paper is among the three largest tissue manufacturers in Japan and has branches in 21 countries and annual revenues of US$5 billion.

DBJ is the largest state-owned bank in Japan with total assets of $190 billion.

WB lends $330 mln for northern hydropower project

The World Bank (WB) Board of Executive Directors has approved a new loan of $330 million for Vietnam to support the Trung Son Hydropower Project (TSHPP) in northern Thanh Hoa Province.

The mid-sized multipurpose hydropower project will help meet growing domestic demand for electricity and bring flood control and irrigation benefits to rural and poor communities in the northern province.

Electricity consumption in Vietnam has been growing at 15 percent annually for the past several years and Trung Son’s 260 Megawatts project will help meet the increased demand.

Through the project, the World Bank will also provide technical support to Vietnam Electricity (EVN) in improving the performance of its hydropower projects in dam safety and operations as well as in adopting international standards in social and environmental practices.

“Trung Son will contribute to Vietnam’s energy mix and energy security as part of the least cost solution in meeting the country’s energy needs. Furthermore, it will also contribute to the climate change agenda by avoiding an estimated 1 million tons of CO2 emissions per year,” said Victoria Kwakwa, World Bank Country Director for Vietnam.

“The World Bank’s engagement in hydropower is an integral part of its approach to development. With 1.4 billion people without access to electricity globally and the impact of climate change increasingly evident, hydropower –when done well—offers a clean, affordable and reliable source of electricity to help drive growth, poverty reduction and sustainable development,” Kwakwa said.

The TSHPP includes a robust development program to address the social impact from Trung Son’s construction and provide support to people living in the project area.

This includes the construction of infrastructure: roads, power supply, water service for households, irrigation, schools and housing in the resettlement areas.

In addition, an environmental management plan has been put in place to address the preservation and mitigation measures of three natural reserves of high biodiversity surrounding the project site.

“Trung Son will be developed with the highest social and environmental standards to ensure the benefits flow to the people. Development of hydropower could have an important impact on Vietnam’s future emissions path, since the construction of Trung Son means it will avoid building new coal fired plants,” said Richard Spencer, Project Team Leader.

Hydropower is a vital source of renewable energy for many countries and Vietnam is no exception. TSHPP is the first hydropower project the World Bank has financed in the country. The financing is being provided through the International Bank for Reconstruction and Development (IBRD) lending window - with 27 years maturity and 6 years of grace period for loan repayment.

The World Bank’s IBRD ending window provides development financing for eligible middle-income countries.

First Vietnamese securities firm makes debut in Cambodia

Cambodia-Vietnam Securities Co (CVS) has become first Vietnamese joint venture securities firm to make its debut in Cambodian capital of Phnom Penh.

The debut of the company with a chartered capital of $10 million has taken place on the sideline of Vietnam-Cambodia Investment Promotion Conference under the chair of the prime ministers of the two countries.

CVS was established by founding shareholders such as Bank for Investment and Development of Cambodia (BIDC), Cambodia Development and Investment Joint Stock Co (IDCC), Bank for Investment and Development of Vietnam (BIDV), Cambodia-Vietnam Insurance Joint Stock Co (CVI) and BIDV Securities Co (BSC).

CVS was licensed with full ranges of securities operations in Cambodia such as investment consultancy, securities brokerage, corporate financial consultancy, issuing underwriting and investment bank operation.

Earlier, BIDV also contributed capital to set up other companies such as Cambodia Development and Investment Joint Stock Co (IDCC), Bank for Investment and Development of Cambodia (BIDC) and Cambodia-Vietnam Insurance Joint Stock Co (CVI).

IDCC has also been selected to be settlement bank for Cambodian stock market by Cambodian Securities Commission.

Dong Duong Securities Co (DDS) has also been granted the license for making capital contribution to establish the Angkor VDS Securities Plc, second Vietnamese joint venture securities firm, in the capital city of Phnom Penh.

Angkor VDS Securities PLC has a charter capital of $2 million, to which $400,000 and $300,000 were contributed by DDS and Song Ngan Joint Stock Co, and the remaining by foreign partners.

This is the first securities company to be allowed for operating in Cambodia in the fields of investment consultancy, IPO consulting, listing and issuing shares on the stock markets, enterprise re-structuring, M&A, stock investment by Cambodian Securities Commission.

The Cambodia Stock Exchange was expected to officially operate in July this year.

Exports see slight decrease in April

The country’s exports earned 7.3 billion USD in April, down by 150 million USD from the previous month, according to the Ministry of Industry and Trade (MoIT).

However, the total export turnover in the first four months of this year reached 26.94 billion USD, up 35.7 percent compared with the same period last year.

Among exported staples, coffee, rubber and cassava, saw a more-than-double increase; fruit and vegetables, pepper, iron and steel registered a 1.5-fold rise and many exported goods hit double digits.

Meanwhile, tea, coal and precious metals products experienced a contraction in value over the corresponding period last year, and cashew nuts, tea, pepper and coal plummeted in volume.

The ministry said price increases helped raise the export turnover by over 2 billion USD.

The nation’s import value reached 8.7 billion USD in April, down slightly from March’s figure, bringing the total import turnover in the first four months of the year to 31.83 billion USD, a year-on-year increase of 29.1 percent.

According to the MoIT, cotton imports saw double rise in value, the import value of wheat, petrol, weaving, and automobiles also increased half as much against that of corresponding period last year; while the imports of fruit and vegetables, animal feeds, transportation means dropped compared with 2010.

As a result, the country’s trade deficit for the January-April period was estimated at nearly 4.9 billion USD, up 6 percent in comparison with the same period last year.

Pepper price reaches record high

Vietnam’s domestic pepper price has reached its highest rate ever at VND120,000 (US$5.7) a kilogram, Vietnam Pepper Association (VPA) announced at its annual conference in Ho Chi Minh City yesterday.

The pepper price has increased by nearly VND50,000/kg, or 66 percent, compared with the beginning of the crop (mid-December last year).

The price hike is partly due to the undersupply on the world market. At present, the export price of black pepper is US$4,456/ton, a year-on-year increase of over US$1,600, while white pepper has risen stronger (by more than US$3,000/ton) to approximately US$7,000/ton.

Unlike other agricultural sectors, farmers stock their pepper at home to sell for a high price.

“Only in the pepper sector can farmers determine the selling price for their products while people in other sectors are forced to sell at certain prices,” said Do Ha Nam, chairman of the VPA.

Nam said pepper growers surf the Internet every day to see the world price before fixing the selling price for dealers and companies. They sell the pepper if the world price goes up and stock the product if its price drops.

A representative of an Indian pepper exporter in Vietnam said in previous years people begged buyers to buy pepper but it is on the contrary now when the buyers begged sellers to sell to them.

According to the VPA, Vietnam’s pepper output for this year reaches 100,000-110,000 tons. The country exported 25,000 tons of pepper in the first quarter, earning US$123 million, a growth of nearly 45 percent year on year.

Imported cars increase by 60 percent in April

More than 23,000 foreign-made cars have been imported to Vietnam since early this year, according to statistics from the Vietnam Customs.

It estimated the import surplus at US$1.4 billion in April, a slight decrease from the previous month.

However, in April alone, as many as 7,875 cars were imported, up 60 percent in quantity and 75.4 percent in value compared to the previous month.

The number of cars in completely-built units (CBU) in March increased by 53.3 percent over February.

Spain assists Quang Nam in socioeconomic development

Spain’s Peace and Development (PyD) organisation has helped the central province of Quang Nam carry out a project on socioeconomic development combined with gender issues.

A cooperation document to this effect was signed between the Quang Nam provincial People’s Committee and PyD in Quang Nam province on April 27.

The 3.6 million EUR, which also covers Cambodia and East Timor, was designed to ensure the implementation of socioeconomic rights and poverty reduction through a gender approach and improvement of social equality.

It aims to improve the living conditions of project beneficiaries, with a focus on the most disadvantaged, through economic initiatives in combination with the gender issue.

The project also encourages the involvement of the beneficiaries and relevant agencies and branches in sustainable rural development and promotes initiatives on gender fairness, gender equality and domestic violence reduction.

It is focused on promoting socioeconomic development in rural areas, supporting for development of traditional trades, helping increase incomes, reducing domestic violence and raising women’s role in the society, said Tran Minh Ca, Deputy Chairman of the Quang Nam provincial People’s Committee.

The project will be carried out till 2014 in 10 communes of Duy Xuyen, Hiep Duc and Phuoc Son districts pf the province.

Established in 1991, PyD is a non-governmental organisation. It has helped carry out a five-year project on enhancement of capacity and promotion of economic, microcredit opportunities and gender equality plans in Vietnam since 2006.

Hanoi offers loans to stabilize prices

The Hanoi municipal People’s Committee has decided to provide local enterprises with non-interest loans worth VND475 billion to buy and stock essential goods as part of its price stabilisation plan for 2011.

Accordingly, local businesses will use the money to buy ten kinds of essential goods, including rice, pork, poultry meat, eggs, sugar, cooking oil, fruit and vegetables, and papers and notebooks for students.

The Hanoi municipal Department for Industry and Trade has asked businesses to focus on serve low-income earners in remote rural areas, as well as in industrial and processing zones. Trade fairs and markets will be held in these areas to help stabilise prices and curb inflation.

Import surplus in April continues to increase sharply

Vietnam’s import surplus in April continued to surge, reaching roughly US$1.4 billion, said the General Statistics Office (GSO) on April 27.

The country’s export turnover in April is estimated to reach US$7.3 million, up 37 percent against the same period last year while the import turnover stands at US$8.7 million, up 34 percent.

Over the past four months, the country’s import surplus reached US$4.8 billion, up 5.9 percent from a year earlier. Key imported goods include oil and gas, cotton, fabric, fertilizer, plastics and paper.

Import turnover of equipment and machines in the reviewed period increased by just 17 percent, much lower than the common growth rate. Meanwhile, the import turnover of cars in completely-built units (CBU) rose by 75.2 percent, and motorbike up 16 percent.

Meanwhile, HCM City’s export surplus reached US$400 million in the first four months of the year. Export revenues are also estimated at US$8 billion, up 26.3 percent compared to the same period last year. The city’s key export items are seafood, garment and textiles and footwear.

HCM City’s import turnover in April is expected to reach US$1.9 billion, up 3.1 percent from a month ago while export turnover is US$2.3 billion. In the first four months, import turnover is estimated to stand at US$7.6 billion. Key import items are fuel, garment materials, milk and milk products, iron and steel.

Total import-export turnover of goods in the reviewed period excluding crude oil reached more than US$13.149 billion, up over 22 percent against the same period last year.

Industrial output tops $13b in four months

 

The nation's industrial production in the first four months of the year reached VND270.5 trillion (US$13.07 billion), an increase of 14.2 per cent over the same period last year, the General Statistics Office announced yesterday.

"Industrial production is strongly recovering from the economic crisis, with a stable growth rate of over 14 per cent," GSO industrial and construction statistician Vu Quang Ha told Viet Nam News.

Private-sector industry achieved a growth rate of 16.8 per cent during the period, with an indsutrial value of VND101.1 trillion ($4.9 billion), while the foreign-invested sector grew by 16.7 per cent for a value of VND114.43 trillion ($5.5 billion).

The State-run sector, meanwhile, saw growth of just 5.1 per cent, fetching a turnover of VND54.95 trillion ($2.65 billion).

The nation's industrial production reached VND198.7 trillion ($9.5 billion) in the first quarter of the year, a rise of 14.1 per cent against the same period last year. The processing industry saw the greatest growth of 15.1 per cent year-on-year, averaging 9 per cent per month.

The General Statistics Office earlier announced that Viet Nam's consumer prices jumped 17.5 per cent in April from a year earlier - the fastest pace since December 2008, further casting doubts on the ability of authorities to cap inflation at 7 per cent this year. Last year, inflation reached 11.75 per cent.

Local company cooperates with Japanese investors

The Saigon Paper Joint Stock Company (SGP) signed a strategic investment cooperation agreement with two Japanese partners in Ho Chi Minh City on April 27.

Under the agreement, Japan’s Daio Paper Company (Daio) and BridgeHead Investment Fund under the Development Bank of Japan (DBJ) will hold a 38 per cent stake in SGP and have roadmaps to continue investment in the company.

Besides capital, the Japanese partners will also provide comprehensive assistance in technology, management and human resource training for the Vietnamese company.

On the occasion, SGP received ISO 14001 certificate and the state’s third-class Labour Order.

Consistent measures needed to curb inflation

Measures to curb inflation need to be implemented more drastically and synchronously in the context of continuing rises in the consumer price index (CPI) in recent months, economic experts said.

The requirement has become more urgent at a time when April’s CPI climbed to 3.32 per cent, the highest and most extraordinary level since May, 2008.

Statistics show that between 1994 and 2010, April CPI reached an average increase of 0.3 per cent over the previous month. Even during the global financial crisis in 2008, the April CPI stood at 2.2 per cent.

April’s CPI pushed the country’s inflation in the first four months of this year to 9.64 per cent, outdistancing targets set for the whole year.

According to experts, this scenario had been forecast after the government decided to devalue the VND against the USD by 9.3 per cent at inter-bank transactions and raise petrol and power prices, adding that inflation was spreading globally, especially in Asia, exerting great pressure on Vietnam’s economy.

Duong Thu Huong, Vietnam Banking Association’s General Secretary, and Tran Hoang Ngan, member of the National Advisory Council for Financial and Monetary Policies, agreed that the government’s timely adoption of Resolution No. 11 had prevented inflation from getting even worse.

They also put stress on the need to be consistent on tightened monetary policy, avoiding easing the policy too soon as inflation could hit double digit growth at the end of this year.

“If the government is resolved with the tightened monetary policy between now and the third quarter, inflation could decrease at the end of the third quarter and the beginning of the fourth,” said Vu Thanh Tu Anh, Director of Fulbright Economics Teaching Programme.

A number of financial organisations such as the Asian Development Bank (ADB) and Barclays Bank of the UK shared gloomier views on Vietnam 's economy, saying that the inflation rate in the next several months would continue to increase as the price level is already 13 to 14 per cent higher than the same period last year.

ADB forecast that the country’s inflation may stand at 13.3 per cent this year while Barclays Bank said the figure would be 15 per cent.

The experts said short-term measures, including exchange rate adjustments, repeal of the free foreign currency market and a cut in public expenditure were only the start in effort to bring inflation under control. They underlined more consistent measures for the long term, especially economic restructuring.

Property market bustling with M&A this year

Following the tendency last year, Vietnam ’s property market is bustling with a large number of merger and acquisition (M&A) deals that also see the largest volume of trading value.

According to Troy Griffiths, an expert with Savills Vietnam , there is a need to quickly establish capital mobilisation funds by investors who boast a large number of land reserves but face difficulties in accessing capital, resulting in the rising number of M&A deals.

Dang Xuan Minh, Director of AVM Vietnam, M&A research and advisory company, said that the rise in M&A deals in the real estate sector is attributed to the bloom of themarket which was seen in rising property prices, and a considerable amount of capital flown into the market.

M&A is an effective tool to promote revenue growth and restructuring and screen the most competent investors to carry out the projects, Minh said.

He said that with potential in capital, foreign investment funds and enterprises and strong domestic private conglomerates will have advantages at M&A deals.

Since the beginning of this year, the property market has witnessed a series of major M&A deals, as evidenced by Thien Minh Tourism Company’s acquisition of a chain of six hotels and resorts from Hong Kong’s EEM Victoria valued at $45 million and Vinaland Company’s transfer of all shares in a housing development project to a Vietnamese partner, worth up to $10.9 million.

Concerning this activity, Vietnam Investment Review newspaper and the AVM Vietnam Company will host the M&A Vietnam 2011 forum, themed “Time to Deal” in Ho Chi Minh City on June 9.

A seminar on M&A strategy and an exhibition to introduce businesses and investment promotion opportunities will be also held at the event.

Marketing group's five-year strategy to focus on developing new members

The Advertising Association of HCM City (HAA) plans to focus more on new member development in the 2011-16 period, according to its chairwoman Nguyen Thi Thanh Mai.

Speaking at the association's third congress to review the last five-year period, Mai said the group had been an effective bridget between the Government and businesses, communicating Government policies and taking companies' feedbank and requests.

It had also held professional training courses and seminars for members to exchange information, she said.

The association admitted 22 new members in the last term, raising the total number to 65 by the end of March.

However, the association's operation during the last five years had also exposed many shortcomings, participants said. Members of the association's executive board were business leaders who often do not have time for assocation activities.

Many participants said the association website was not effective and that it should have updated information.

The association should also work with foreign partners to improve human resources in the industry.

"International integration has opened up opportunities as well as challenges for businesses. The role of the business association becomes more important than ever in sharing experiences and protecting the legitimate interests of its members and promote the growth and development of businesses," Mai said.

The Viet Nam advertising industry was still very young, and local companies must work together to create a healthy competitive environment, she said.

Nguyen Thanh Dao, general director of Dong Nam Advertising and Commercial Promotion Joint-Stock Company, said that despite the economic downturn, the industry's revenue last year was about US$1 billion, up 15 per cent on the previous year.

He said advertising revenue would continue to improve strongly in the coming year as the economy recovers.

Textile, garment industry hopes Pacific nations trade deal will open US market

A trade deal between Pacific nations is likely to secure full tariff waivers for Vietnamese textile and garment products in the US but insiders warn the industry will face a new challenge with regard to origin.

The nine-member Trans-Pacific Partnership is still in the negotiation stage with its sixth session held in Singapore earlier this month.

It groups Brunei, Chile, Malaysia, New Zealand, Australia, Peru, Singapore, the US, and Viet Nam.

Viet Nam is hoping to boost exports to the other eight TPP countries, particularly the massive US market.

Experts said successful TPP negotiations would see 95 lines of Vietnamese textile and garment products become tax-free in the US.

The US is already the largest market for Viet Nam, accounting for 55 per cent of its overall textile exports of US$11.2 billion last year, while textiles accounted for 43 per cent of all Vietnamese export to the US.

It is also the second largest textile exporter to the US after China but accounts for a mere 5-6 per cent of the US's imports of $95 billion.

But the zero tariff comes with a catch – only textiles made using US yarn will qualify for it.

Le Van Dao, deputy chairman of the Viet Nam Textile and Apparel Association, said this rule would hamper Viet Nam's efforts to enjoy zero tax since it did not produce much fabric and was only competent in making apparel.

Viet Nam itself was a large producer of yarn but exported 60-70 per cent of it, he added.

Though the TPP negotiations have yet to conclude, Vietnamese textile and garment industry is hopeful of a desirable outcome.

It has reached favourable bilateral and multilateral agreements with Japan and South Korea, managing to increase exports to Japan by more than 20 per cent last year to account for 10 per cent of that market.

Investors from Japan seek opportunities

More than 500 Japanese companies are looking to invest in Viet Nam, said Hirokazu Yamaoka, chief representative of the Japan External Trade Organisation (JETRO) in Viet Nam, at a press briefing in Ha Noi last week.

Vietnamese support industries should focus on producing high-quality low-cost goods to boost their regional competitiveness, he said.

"If you are not able to produce these products in Viet Nam, local firms will have to import goods and spend foreign currency. That will affect exchange rates and impact on the economy. It is very important that Vietnamese companies produce high-quality value-added products."

He said Viet Nam was a particularly attractive destination because of its low labour costs.

The majority of Japanese manufacturers looking to buy parts in Viet Nam were involved in the manufacture of cars, motorbikes, home appliances and packaging, he said.

To make Viet Nam more regionally attractive to foreign firms, the Vietnamese Government should improve the country's infrastructure, Yamaoka added.

Ta Hoang Linh, deputy director of the Viet Nam Trade Promotion Agency, said domestic support industries lagged 10 years behind their regional counterparts.

Meanwhile, JETRO plans to hold a trade fair in Ha Noi from September 15 to 17.

"Japanese companies always require high-quality products from partners. If Vietnamese companies meet Japanese standards, they will also meet the strict requirements of other countries in the world," Linh said.

"The fair this year will be different. This, the fourth exhibition, will combine with two others – Viet Nam Support Industry 2011 and Metalex Viet Nam 2011."