To achieve deeper US market penetration

Domestic businesses should improve their competitiveness and respect “mutual benefits” to meet the high demand for diversified products in the huge US market.  

A large number of Vietnamese people living in the US serve as a bridge to help bring Vietnamese products to US customers, says Nguyen Duy Khien, head of the American Market Department under the Ministry of Industry and Trade (MoIT)

Vietnam joined the WTO and the US established its permanent trade relations with Vietnam and removed quotas for Vietnamese garments, laying a firm foundation for Vietnamese companies to penetrate its market. Currently, the US is Vietnam’s leading export market.

Two-way trade turnover between the two nations have increased considerably in recent years. Vietnam’s exports to the US in the first eight months of 2011 reached US$11.3 billion, a year-on-year increase of 20.6 percent while the US’s exports to Vietnam in the same period hit US$2.7 billion, up 21.5 percent.

The value of Vietnamese goods exported to the US reached around US$10.8 billion (up 16.14 percent) in the first seven months of this year and is expected to hit US$20 billion by the end of the year.

In general, bilateral trade increased by 13.8 percent to US$13.56 billion over the same period last year and Vietnam continued to enjoy an export surplus of US$8 billion against the US.

Le Xuan Duong, Director of the Export Support Centre under the Trade Promotion Department, says 40 percent of Americans have average annual incomes above US$50,000. He also noted that US imports totalled US$2,314 billion in 2011.

Vietnam’s traditional exports to the US include garments, footwear, seafood, and timber products. However, last year saw significant growth in new export lines such as mechanical parts, handicrafts, toys, agricultural products, paper and paper products.

In Khien’s view, it’s a challenging task to achieve deeper US market penetration. In fact, Vietnamese goods manufacturers and distributors are facing fierce competition from China, not to say most domestic companies do not benefit as much as expected from most-favoured-nation (MFN) treatment as they have not yet established brand names internationally.

Khien insists that greater attention should be paid to developing long-term strategies to support exporters accessing market information and engaged in trade negotiations for mutual benefits.

According to the Trade Promotion Department, it seems almost impossible to persuade US importers to shift from their established partners to Vietnamese ones.

So, the State should adopt suitable policies and measures to help domestic companies gain a leg up on international competition through trade promotion fairs.

For their part, they improve their design and quality of their products, and establish their own supply links and websites

As Khien and Duong suggest, they should pay more attention to US business culture as it is more pragmatic and Americans place great store in the notion of time as money and care much about to anti-corruption laws overseas.

Digital entertainment explodes
 
The digital entertainment industry is developing strongly and there were 2.4 billion internet users around the world by the end of July.

The market share of digital entertainment and television increased from 25 per cent in 2010 to 30.3 per cent this year, with US$42.4 billion being spent on video games.

With the advent of more and more smart phones and tablets, this is expected to reach over 36 per cent by 2015.

But Viet Nam, despite its young, highly connected population, remains in the middle ranks in the neighbourhood in terms of per capita spending on digital entertainment. Revenues last year were worth $3.3 billion.

Le Thanh Tam, managing director of International Data Group (IDG) ASEAN, told a conference titled "Viet Nam's ICT Outlook" in HCM City last week: "Viet Nam should change its economic development trend because of limited competitive advantages. The digital entertainment industry would be an answer to improve its economic situation."

A recent survey by IDG found that in the country domestic social networks account for 30 per cent, domestic games on mobile accounts for 30 per cent, and games on computers for 6 per cent.

"Television is limited, mostly using foreign content, and customers do not have many choices," Tam said.

But with attention from policy makers and good infrastructure, digital entertainment revenues could rise to $10 billion by 2020 as internet use almost doubles to 58 per cent of the population, he said.

"A young population, lot of time spent accessing the internet, and an increasing number of internet and smart-phone users along with improving infrastructure and legal framework [will] boost the industry," he said.

But he expressed concern about the rampant copyright violation despite having protection laws.

Viet Nam has its own satellites in space and 120,000 IT experts, and these are guarantees for the industry's development, he added.

New auto import rules aid dealers
 
The General Department of Customs last Thursday asked the Ministry of Finance to loosen requirements for imports of new cars in a bid to increase import tax revenues and save struggling car dealers.

The move, which asks for an amendment to Circular 20, would also allow more car importers and dealers to join the market while boosting supplies of imported cars with a wider variety of brands.

Circular 20, which came into effect last June, stipulates that importers of cars with less than nine seats have to show proof that they are authorised dealers for foreign car manufacturers.

The documents have to be notarised by Vietnamese diplomatic representatives in the country of origin.

But most dealers said they would never be able to get the required documents as foreign auto companies which had joint ventures in Viet Nam would not give any such authorisation to importers.

The rule, which seems to solely allow joint ventures in Viet Nam to import cars, sent 80 per cent of private car importers and dealers nationwide bust.

According to the Ministry of Customs, Viet Nam imported 16,000 cars worth US$335 million in the first seven months of 2012, down 58 per cent in terms of volume and 44 per cent in terms of value over the corresponding period last year.

As a result, import tax revenue has also fallen.

According to a statistics from the Ministry of Finance released earlier this year, the local auto industry slump would dim the annual contribution of the sector to the State budget, which is estimated at US$2 billion annually.

Asked about his business plan if the measures came into effect, director of the Ha Noi Automobile Company Nguyen Van Dung said he would resume imports and trading of foreign cars.

Late last year, Dung was forced to turn his 300 sq.m showroom in Gia Lam District into a restaurant under a similar name, the Ha Noi Automobile Beer Restaurant.

Meanwhile, Nguyen Ba Hoc, director of the Hung Long automobile company, another prominent car importer which was fined VND40 million last year for importing 16 Lexus luxury sedans without the correct documentation, said it would renew his business if the Government loosened import sanctions.

"However, everchanging policies in the automobile sector discourage the development of the industry as a whole," he added.

Sales of locally manufactured autos in Viet Nam fell 39 per cent year-on-year in the first seven months of 2012 to 42,462 units, slowed by the economic recession, according to the Viet Nam Association of Automobile Manufacturers (VAMA)

In July, 7,433 vehicles were sold, down 26 over the corresponding period last year but up 12 per cent compared to the previous month, added the association, which represents 18 car manufactures in Viet Nam, mostly foreign invested.

According to VAMA's chairman Laurrent Charpentier, auto sales for the year were projected to hit some 95,000 units as sales in second half were always better than the first half.

The Ministry of Industry and Trade in April forecast that Viet Nam's total car sales in 2012 would drop drastically and return to 2007's level of around 80,000 units.

Last year, sales reached 138,000 units, a drop of 5 per cent compared to the previous year.

HCM City real estate market back on track

Many real estate projects in HCM City are back on track after long delays caused by a shortage of capital.

As of the end of last month, for example, an apartment building in Go Vap District invested in by the Khang Gia Joint-Stock Company reappeared on the market with many promotions.

The project, which was to begin at the end of 2008, has completed only two out of three buildings.

At the same time, the company officially re-opened its sale programmes with 321 apartments at the price of VND11.2 million (US$530) per one square metre.

Another project in Go Vap District, invested by Gia Dinh Real Estate Company, has also officially introduced model rooms after a long delay.

Because of a shortage of capital, work on the project, which began in April 2010, had been postponed.

Many other projects in the city have also resumed, including the Investment and Construction 557 Company Ltd's apartment building project in Tan Phu District.

These projects were able to be placed on the market because of support from banks as well as mergers and acquisitions.

The Louis IX – Bay Hien project in Tan Binh District is one example.

Initially, Thang Long Company invested in the project, but after a long delay because of capital shortage, the company was sold to Long Hung Phat Company Ltd, which has restarted the project.

Although many projects are now back on the market, they face tougher requirements for selling.

In the past, investors could sell their products after finishing the foundation, but now the house frame as well must be completed before selling.

In addition, to sell products, investors must prove their financial capacity, said Doan Chi Thanh, general director of the Hoang Anh Sai Gon Real Estate Company.

Nguyen Khanh Hung, the deputy director of Dat Xanh Group, which is involved in many real-estate projects, said that previously he needed only to check the legality of a project, but now he must meet consumers'demands about the completion schedule before making a sale.

Shoppers set for sales promotion month

A big sales promotion campaign with the participation of around 750 businesses was launched by the municipal departments of Industry and Trade and Culture, Tourism and Sports on Thursday night (August 30).

During the Sales Promotion Month, ten groups of goods including textile and garments, foodstuff and beverages, cosmetics, electronics, tourism and banking services, are being sold at over 2,700 stalls at various venues with discounts ranging from five to 50 per cent.

Over 250 businesses are displaying and selling their products at 430 stalls at the Sales Promotion Fair 2012 that opened at the Phu Tho Stadium in District 10 on August 30. The fair will remain open until September 3.

Big price deductions are also being offered at supermarkets joining the sales promotion month, including BigC, Co-op Mart, Vinatexmart, Citimart and Metro.

The campaign also includes six fairs that will bring goods to workers at industrial parks and export processing zones, students living in dormitaries and residents of remote areas.

Twenty-five leading businesses in the city, incuding Sai Gon Co-op, Sai Gon Trading Corppration and Ba Huan will send trucks selling goods, especially essential goods, under the city's price stabilisation programme, to customers in surburban areas and remote IPs and EPZs.

Seminar focuses on Myanmar

Vietnamese businesses will have an opportunity to gain practical knowledge about Myanmar's investment environment, regulations and changes in key business sectors at a seminar in HCM City on September 13.

Held by IRVING Seminar and Training, the seminar is designed for businesspeople that operate in the multinational market with a special focus on Myanmar.

Speakers will discuss sectors with high potential, successfully navigating an investment path in Myanmar; main challenges and risks; and legal, taxation and labour law issues as well as customs procedures.

Experts said there has also been a growing interest in business opportunities in Myanmar.

According to the latest figures, total foreign investment in Myanmar reached US$40 billion by May 2012 ever since the country opened to foreign investors in late 1988.

The regulatory landscape is slated to undergo substantial reforms in the upcoming year, including changes to the foreign-exchange regime, land rights, foreign investment incentives and procedures, taxation and financing.

Quang Nam's tourism booms

The central province of Quang Nam hosted a record 2.3 million tourists in the first eight months of this year, earning VND3 trillion (US$143 million).

The figure was announced last Thursday at a conference in Hoi An to sum up 15 years of Quang Nam tourism.

Last year, the province, home to world heritage sites Hoi An, My Son sanctuary, and Cham Island biosphere reserve, hosted 2.5 million tourists.

In 1997 the province earned only VND47 billion ($2.2 million).

Coffee exports hit $2.66 billion

Coffee exports in the first eight months of this year are estimated to reach 1.26 million tonnes, earning US$2.66 billion, up by 31.9 per cent in volume and 26.3 per cent in value against the same period last year.

The Ha Noi Moi (New Ha Noi) newspaper reports the two biggest import markets for Vietnamese coffee, the United States accounting for 12.5 per cent of Viet Nam's export value and Germany, 12.4 per cent, are continuing to grow both in volume and value.

Within the review period, exports to Indonesia have risen 9.5 times and to Mexico nearly 3.5 times more.

According to the Viet Nam Coffee and Cacao Association, coffee exports may fall in the future due to supply shortages.

However, exports can expect to see a sharp increase once the next crop is harvested in late 2012.

Occupancy up for Da Nang hotels

The Da Nang hotel industry is looking up in terms of number of rooms available and occupancy rates.

In the second quarter the number of rooms increased by 7 per cent from the previous one to 3,100 rooms at 29 hotels and resorts, according to a survey by property consultancy Savills Viet Nam.

In the second quarter, normally the peak season for domestic travel, the average occupancy also increased by 7 per cent and the average room rent by 14 per cent to VND2.06 million (US$99.5) per night.

In the period the city welcomed 736,000 visitors, an increase of 24 per cent from the previous quarter. However, foreign arrivals, who accounted for 146,000 of them, decreased by a whopping 30 per cent while domestic tourist numbers were up by more than half.

Six new hotels are expected to open this year with around 900 rooms.

Expo boosts construction industry

The VIETBUILD 2012 exhibition, geared to energise the contruction, interior decoration and real estate sectors, will be held September 13-17 at HCM City's Phu Tho Sports Complex.

Event organisers told the media last Friday that 800 enterprises will present their wares at 2,200 stalls.

These include 194 foreign enterprises from 22 countries and territories.

VIETBUILD is an annual event held by the Ministry of Construction Information Center, VIETBUILD Construction International Exhibition Organisation Corporation, VNREBUILD Real Estate International Exhibition Ozganizing Corp. and AFC International Exhibition Fair Corporation.

Energy efficiency boosts competitiveness
 
The experiences of small and medium-sized enterprises (SMEs) have shown that cutting energy waste is essential to raise competitiveness at a time when resources are limited.

Saving energy helped not only reduce production costs but also protect the environment, according to Nguyen Quoc Toan from Hung Long Garment Company.

The company reported that it saved 21 per cent on monthly electricity bills and reduced carbon dioxide emissions by 100 tonnes per year thanks to the installment of electricity-saving lamps and machines and the application of modern technologies.

Long-term competitiveness and profitability would also be increased, Toan stressed, and there would also be improvements in the working environment for company employees.

Toan said that it would take only around two years to retrieve capital invested in energy saving equipment.

Another food company in southern Dong Thap Province also invested VND430 million (US$20,500) in replacing outdated machines with modern ones, which helped save more than 100,000kWh per month and reduce 50 tonnes of carbon dioxide per year, according to the on-line portal of the National Energy Efficiency Programme.

According to the Ministry of Industry and Trade, many industries had great potential for energy saving. These included the garment industry, the mining industry and those involved in cement and steel production. These energy-consuming industries accounted for roughly 47 per cent of the country's total electricity output.

Meanwhile, wastes of energy were still common, especially in industries relying on outdated technology, leading to rising energy costs.

Statistics from the garment industry showed that energy costs accounted for 10 to 12 per cent of the product's prices, while the percentage of wasted energy might reach 30 per cent.

Nguyen Xuan Quang from the Institute of Heat Engineering and Refrigeration, as quoted in Thoi Bao Kinh Te Sai Gon (The Sai Gon Economic Times weekly) said that a lack of knowledge as well as financial difficulties resulted in SMEs wasting large amounts of energy.

He pointed out that SMEs with limited capital often used outdated technologies and production equipment, ignoring the fact that maximising energy efficiency would help them save money.

In addition, the success of energy efficiency programmes depended on the awareness and determination of the companies' managers, Quang added, saying that a dedicated personnel was needed to take charge of supervising energy consumption.

Toan said companies should have commend-and-reward policies to get workers involved in saving energy.

According to Electricity Viet Nam, the country saved around 1.3 billion kWh last year, equal to around 1.03 per cent of the commercial power amount. More than 900 million kWh of electricity was saved during the first nine months of this year.

Sustainable farming key to food security
 
More than 500 delegates from 150 countries and 20 international organisations gathered in Ha Noi yesterday, calling for more efforts on development of climate-smart agriculture that will better ensure food security.

Speaking at the opening plenary session of the 2nd Global Conference on Agriculture, Food Security and Climate Change (AFC), Minister of Agriculture and Rural Development Cao Duc Phat stressed the increased negative impacts of climate change on agriculture production, especially in regions with adverse natural conditions.

"We are facing unprecedented challenges in the context of over-exploitation of natural resources, increased negative impacts of drought, flooding, salinity, a rising sea level and other environmental consequences that are directly caused by humans," Phat said.

"This requires countries to come up with smart and comprehensive policies in developing agriculture and integrating them in their national strategic plan."

Hans Hoogeveen, the Netherlands' Vice Minister for Agriculture, said the concept of climate-smart agriculture was still fairly new when the Netherlands - host of the first AFC at the Hague in 2010 - brought together the agendas of agriculture, food security and climate change.

"Now, the world has learned that the task of feeding 9 billion people by 2050 could only be achieved through a green revolution, and that climate-smart agriculture is "at the heart of green growth," he said.

According to experts, climate-smart agriculture includes proven practical techniques such as mulching, inter-cropping, no-till farming, improved grazing and better water management.

It is sustainable as it increases productivity, resilience, reduces greenhouse gas emissions and enhances food security.

Without strong adaptation and mitigation measures, climate change will reduce food crop yields by 16 per cent world-wide and by 28 percent in Africa during the next fifty years, experts estimate.

Climate change in South and South-east Asia is expected to reduce agricultural productivity by as much as 50 per cent during the next three decades.

Alenxander Muller, assistant director-general of the Food and Agriculture Organisation of the UN in Rome, said attention must be given to small-scale farmers, who are more vulnerable to changing weather patterns and poverty.

World Bank Country Director in Viet Nam Victoria Kwakwa said studies have shown that effective investment in agriculture could be three times more beneficial to the poor than growth in other sectors.

"We need agriculture to be part of the solution, and not part of the problem," she said. "We have no other choice to feed 9 billion by 2050 without destroying our planet."

And that could mean the use of innovative technology, early warning systems and changes in dietary patterns, in addition to long-term programmes and investment, she added.

Nguyen Van Bo, head of the iet Nam Academy of Agriculture Science and a member of the International Commission on Sustainable Agriculture and Climate Change, said Viet Nam has made efforts to make its agriculture more adaptable to climate change by improving crop varieties and efficiency of water use, changing cropping patterns and using adaptive technologies such as mulching and no-tillage farming.

"We can no longer look at food security, poverty and climate change and environmental sustainability separately," he said.

The commission estimates that 43 percent of the country's greenhouse gas emissions come from agriculture, especially in growing paddy rice, raising livestock, crop residues and activities such as recycling and burning.

The week-long Ha Noi conference will also look at the implementation of the road map for action that was developed at the first AFC in the Netherlands to mobilise action on achieving climate-smart agriculture.

Conference participants are also expected to call on developed countries and their partners to scale up early-action programmes on climate-smart agriculture and emphasise the importance of government-led partnerships with non-state agencies to ensure more sustainable farming.

A high-level ministerial meeting will be held on Thursday, with Prime Minister Nguyen Tan Dung scheduled to attend.

Assortment of moon-cakes flood markets

A month and a half before the Mid-Autumn Festival, moon-cake manufacturers had announced that they would increase the quantity of moon-cakes by 10-20 percent and price them 5-20 percent higher than last year, however, with more variety in taste and design.

There are said to be around 250 different varieties of moon-cakes in the market--the most popular being those stuffed with mung beans and lotus seeds, and more varieties being added with almonds, green tea, gac fruit, pandan leaves and aloe vera. In addition, manufacturers also made nutritious moon-cakes with low fat, low sugar and more natural and healthy ingredients like fruits and nuts.

This year, Bibica has produced around 525 tons of moon-cakes, an increase of 5 percent from the previous year, with more than 50 different kinds of flavors like mung bean collagen, spirulina seaweed, and bird’s nest with lotus seeds. Bibica also aims to serve various market segments by offering an average price of VND33,000-72,000 per cake.

Kinh Do Group has also produced 2,100 tons of moon-cakes, targeting customers who buy moon-cakes to savor or to give to their relatives, especially to their business partners. High-end moon-cakes are priced from VND290,000-750,000 for four-pieces, while some special moon-cakes have been priced upto VND1.2 million per box.

This year, super-luxury moon-cakes have started to appear in the market. Super-luxury moon-cakes are covered with pure gold and are being made Dai Phat for nearly VND1.3 million a box. Although super-luxury moon-cakes named Long Dinh An Quy, produced by Hanoi-based moon-cake producer Long Dinh are stuffed with familiar flavors such as green tea, lotus seeds, mung beans, seaweed, red beans, taros, chestnut, pandan leaves, and almonds, its price is nearly VND4.5 million for eight-pieces in a  box that itself is made of wood and beautifully designed. Moreover, besides eight pieces of moon-cakes, a Long Dinh An Quy moon-cake box also includes a bottle of wine and high-quality tea.

Crystal Jade Palace Restaurant in Legend Saigon Hotel, Shang Palace, Sheraton Saigon Hotel, and Dynasty Restaurant at the New World Hotel have also presented their own high-end moon-cakes.

However, it is difficult to determine whether the moon-cake quality matches its price and it is harder to know whether it is more delicious and nourishing than normal moon-cakes.

For a moon-cake box priced above VND1 million, the discount allowance, advertising and other promotions cost more than 50 percent of its retail price. The net weight of an expensive moon-cake box is around 800 grams to 960 grams, of which flour, sugar, salted eggs account for 400 grams and the rest are ingredients such as mung beans, watermelon seeds, sesame, sugar-preserved winter-melon, and Chinese sausage, mixed with precious ingredients such as caterpillar fungus, ginseng, bird’s nest, fin, caviar, Beijing abalone, red frog crab, and Hong Kong scallop.

Moon-cake producers have never revealed the actual proportions and secret ingredients in each moon-cake. Some people even think that producers only use aromatic spices instead of exotic ingredients for stuffing as these are always well-ground and blended. Accordingly, customers have to pay much more money for the container and packaging, as the actual moon-cakes just accounts for 20-25 percent of selling price.

Purchase power increases during National Day holidays

During the long week-end holidays for National Day, purchase power has increased and so has the demand for various essential commodities.

Prices of items in markets are quite stable, but in some traditional markets like Van Thanh, Tan Son Nhat, Nguyen Dinh Chieu, demand for fresh foods increased by 30 percent while it hiked 50 percent for seafoods such as shellfish, crab, shrimps and prices of some seafood leaped 5-10 percent.

This year, Vu Lan Festival, a Buddhist holiday held annually on the 15th of the 7th lunar month, also coincides with these holidays so consumption of mushrooms, vegetables and fruits, soya cheese and water seaweeds for cooking vegetarian dishes also jumped.

Supermarkets in Ho Chi Minh City reported an average increase of 30-50 percent  on food items during these holidays.  Co-op Mart supermarket announced a turnover increase of 65-90 percent in the first week of the ‘Sale Promotion Month’ during the National Day weekend.

Nguyen Thanh Nhan, deputy director of Saigon Co.op supermarket said sales rose as demands for fresh food and necessities increased. Moreover, sales in supermarkets in provinces also went up as people returned to their hometowns to enjoy their holidays.

City to host Vietnam CEO Forum 2012

More than 800 businessmen will take part in the Vietnam CEO Forum 2012 in Ho Chi Minh City on September 20, according to the Young Businesspeople Association of Ho Chi Minh City.

The association will discuss about their survival problems such as risk management, effect of human capital, and weak and strong points of enterprises.

Leading local and international speakers will also join the event which is being co-organized by the Young Businesspeople Association of Ho Chi Minh City, Saigon Business Club, Leading Business Club, 20-30 Business Club, Ho Chi Minh City CEO Club and High-Quality Vietnamese Products Business Association.

This will be a chance for company leaders to meet, exchange views and share experiences in various fields.

Rural internet project faces halt

The Ministry of Agriculture and Rural Development has written to the Government Office asking for a halt to an internet development project for the benefit of rural communities.

In Dispatch 2659/BNN-KH, the ministry stressed the target of the project was beyond actual demand, so it could be hardly obtained. In addition, the components of the project overlap other projects and programs that the ministry is executing.

The project was initiated in 2008, but up to now it has yet to get going due to the huge cost of network infrastructure, making it difficult to recover capital, said the ministry.

According to the ministry, as of April 20, the Authority of Information Technology Application under the Ministry of Information and Communications had only finished an evaluation of the technical solution consultancy package and the component of the agriculture ministry.

After four years, the project has met 4.5% of the plan. Therefore, the agriculture ministry and the information ministry have agreed to stop the execution of the project.

The agriculture ministry said the VND58.9 billion originally planned to be used for the component of the ministry will be transferred to more efficient projects.

Internet development in rural Vietnam is a project invested by the information ministry, with total capital of nearly VND297 billion. The project was scheduled to last from 2008 to 2013.

Falling orders hit IP, EPZ workers

Some 120,000 workers at the HCMC-based industrial parks (IPs) and export processing zones (EPZs) now have less working days a week and take rotating leave due to a sharp fall in new orders.

Speaking to the Daily, Nguyen Tan Dinh, deputy head of the HCMC Export Processing Zones and Industrial Parks Authority (Hepza), said nearly 270,000 workers are employed at 14 IPs and EPZs in the city. However, many factories in the IPs and EPZs are now facing a drop in order volumes, so they no longer need overtime work.

Working days are down to 4-5 days from the previous six a week. Many companies let their workers take rotating leave and pay them 75% salaries.

The total number of employees affected by these policies is some 120,000, Dinh said.

Poor business performance also impacts the recruitment of new workers at IPs and EPZs in HCMC. According to Dinh, in previous years, enterprises registered to recruit an average of 50,000 workers per year and actually hired some 30,000, but this year they register their needs of only 30,000 workers. Worse still, many businesses have removed their recruitment notices.

* Hiep Phuoc IP in Nha Be District last Friday opened a dorm for some 560 workers, with the first floor used as a day-care facility for 150 children of workers.

According to Hiep Phuoc Industrial Park JSC, the facility is equipped with beds, wardrobes, fans, telephones, internet, free cable TV service, electricity and water calculated in accordance with State regulations. The monthly rent is VND200,000-250,000 per person.

Hiep Phuoc IP now has two dorms with a capacity of 1,100 workers, a facility for community activities and a supermarket for workers.

Nguyen Tan Dinh, deputy head of Hepza, said the 14 IPs and EPZs in the city employ  some 270,000 workers, 65% of them from other provinces.

However, to date, the dorms for workers at the IPs only meet 10% of demand, and day-care centers for children of workers are even scarcer. Currently, the city is completing the procedures for construction of an additional five day-care centers for children of IP workers.

Customs bid to loosen car import restrictions

The General Department of Customs in a report sent to the Ministry of Finance last Thursday suggested removing import restrictions imposed on completely built-up cars along with other items such as cell-phones, alcohol and cosmetics, according to website Autopro.

The department proposed many changes to the current import and export mechanism in a bid to boost tax collections. Notably, all suggestions of the department go against the Ministry of Industry and Trade’s ongoing policies on limiting imports of luxury items and consumer goods.

For completely built-up car imports, the department proposed an exemption of letter of attorney issued by manufacturers, which is set forth in the Ministry of Industry and Trade’s Circular 20. After the circular became valid in June, many car dealers in the country bemoaned the huge challenge, saying that the circular requires them to show documents they will never possess.

According to the department, loosening the import rules is a bid to help small businesses import automobiles and avoid a monopoly on the auto market. Currently, just foreign-invested authorized auto joint ventures are eligible to import cars into Vietnam.

Besides, lifting the strict rules will help reduce trade fraud, smuggling and tax evasion via overseas Vietnamese citizens bringing cars into the country.

Circular 20 also stipulates dealers to show certificates of maintenance service issued by the Ministry of Transport. However, enterprises say it is not a big deal as they can cooperate with car maintenance units to obtain the documents.

Explaining issuance of the Circular 20, the Ministry of Industry and Trade earlier said that it aimed to protect interests of consumers, limit trade deficit and ensure road traffic safety. The circular has benefited authorized auto importers and auto joint ventures over the past year.

Commenting on the customs department’s suggestion, a representative of a car import enterprise said previously it did not dare to invest in showroom network expansion, although it had authorization from manufacturers. It is costly to develop a showroom system following manufacturers’ standards while importing cars via official channels has to meet strict rules on prices, invoices and documents, the dealer explained.

After Circular 20 took effect, the enterprise made a large investment in developing a nationwide agent network. Therefore, if the Government loosens car import rules, it will incur a heavy loss for failing to compete with other showrooms with lower investment costs. Besides, enterprises will not feel secure in carrying out long-term business if policies change repeatedly, the dealer added.

According to the General Department of Customs, the nation estimates to import over 18,000 cars worth US$384 million in the January-August period, plunging by 56.3% and 50.7% compared to the same period last year respectively.

Around 9,500 cars under 10 seats were imported with a total value of US$99 million, declining by 65% and 71.6% respectively. Auto component and accessory import revenue also dropped 24.7% to US$983 million.

Vietabank awards prizes to depositors

Viet A Commercial Bank, or Vietabank, last Friday held a lucky draw for the “Depositing little money, winning big house” promotion program to present customers prizes, including a VND1.2 billion home.

The special prize went to Nguyen Thi Phuong, a client of Ninh Kieu transaction office in Can Tho City.

At the draw at the Saigon Times Club in HCMC, the bank also presented other valuable prizes such as Honda SH 125i scooters, Sony LCD TV sets, household equipment and 500 consolation prizes worth VND1 million each.

In the June 20-August 28 program, the HCMC-based bank gave customers scratch cards and lucky draws. Names of winning clients can be found at the bank’s transaction points and on its website www.vietabank.com.vn.

Petrolimex division proposed to avoid monopoly    

The Vietnam National Petroleum (Petrolimex) should be divided into different independent companies to avoid the possibility of a monopoly developing, said some local experts.

Petrolimex should be divided into different independent companies to avoid the possibility of a monopoly developing

Dr. Le Dang Doanh said independent firms should operate in import, export, distribution and retail. In addition the group’s privatisation process should be boosted, allowing the participation of experienced international partners in the group’s management board.

Associate Prof. Dr. Ngo Tri Long said the domestic petroleum market is running under the half-market mechanism. Currently, the market lacks real competition because Petrolimex accounts for more than 50% of market share, with PV Oil and Saigon Petro holding an additional combined 30% of the market.

Long also added that the privatisation of Petrolimex should be quickened to reduce its market share.

Sharing this opinion, Former Deputy Director of the Hanoi Department of Industry and Trade Vu Vinh Phu said, to remove the dominance of only a few companies in the petroleum sector, the government should speed up the construction of oil refineries and petrochemical plants in areas around the country in order to ensure supplies in the next 5-10 years. To provide an equal playing field and to help increase competition, foreign investors should be permitted to enter the domestic petroleum market.

“For many countries, they often divide companies with big market shares into small units or move them into other business activities. The privatisation of Petrolimex is not easy because of the state of the firm’s infrastructure and market share, therefore, this decision would need strong determination by the government and other agencies,” Long emphasised.

According to Dr. Le Dang Doanh, the concern that the division of Petrolimex would affect the national energy security is groundless because in many countries, all petroleum firms are privately-owned.

“Privatisation of a big bank like Vietcombank also allows foreign firms to take part in its management. Petrol sales are a form of retail sales, so the participation of foreign firms is nothing special. Besides breaking up the firm during the privatisation process, the name of petroleum group should be removed,” he suggested.

He pointed out that, to date, the Competition Management Agency under the Ministry of Industry and Trade has struggled to control the monopoly in the petroleum sector.

The Ministry of Industry and Trade proposed the power sector’s privatisation roadmap, but it was been rejected by EVN, revealing the ministry’s weak management.

“The role of Competition Management Agency needs to be enhanced and it should be separated from the Ministry of Industry and Trade, so that it could have an independent voice in controlling monopolies and competition. Such agencies abroad often belong to National Assembly,” he said.

At a recent petroleum conference, Dr. Vu Dinh Anh said to create an equal competitive petroleum market, the government should restrict the licensing of petroleum import and businesses. Petrolimex’s dominance should be lifted first and then the separate import and trading of petroleum products from retail activities should be introduced.

Vinashin begs for government financial support
   
The Vietnam Shipbuilding Industry Group (Vinashin) has asked the government to use the loan which was supposed to be used during the group's restructuring to repay tax debts.

Vinashin’s total outstanding debt has reached VND639 billion (USD30.6 million) including VAT, import taxes and other kinds of taxes. If they don't pay on time, they will have to pay interest of 0.05% per day.

In a report which was sent to Deputy Prime Minister Vu Van Ninh and the Minister of Finance on August 23, Vinashin said that five of their members had incurred VND637.8 billion in debts.

To avoid the punitive interest rate and to ensure the group's operation, four members have been provided VND353 billion from the loan.

The last member, the Nam Trieu Shipbuilding Industry and Construction JSC in Haiphong City still owe VND248.8 billion in taxes and fees. Vinashin is seeking permission to continue the use state loans combined with its revenue to pay the debt.

This is not the first time Vinashin ask for government financial support.

In early April, this corporation also sent a request to exempt its fine because they did not paid their debts on time. The group said their financial capacity was insufficient. However the Ministry of Finance ruled out the request.

According to the Prime Minister's directive, until 2013, Vinashin may have their tax debt payment deadline extend by one year. This exemption is applied to cancelled or unfinished contracts and Vinashin must pay their tax debts in full before apply for the next exemption.

Therefore, since Vinashin hasn't paid their tax debt of 2011 in full, they are not under consideration for a future exemption.

Giant belt road on path to construction

Detail planning of Hanoi’s largest transport project will be submitted to the premier in 2012’s fourth quarter.

The $4.7 billion belt route No.5 project’s mid-term report was approved in early August and its estimated investment scale was now available, said Ministry of Transport (MoT) chief of office Nguyen Van Luu.

“Hanoi’s outer beltway initial shaping is now relatively clear,” said MoT’s Thang Long Project Management Unit (PMU) director Vu Xuan Hoa. Thang Long PMU has taken charge of drawing the beltway project’s detailed planning.

Accordingly, the belt route No.5 will include highway and road sections from four to six lanes. The 385km belt route will run through eight provinces and cities, including Hanoi, Hoa Binh, Ha Nam, Thai Binh, Hai Duong, Bac Giang, Thai Nguyen and Vinh Phuc, connecting with huge satellite urban centres around Hanoi within a radius of 50-60 kilometres. The overall project will be finished by 2030.

In the near-term, both highway and normal road sections will consist of two-four lanes only in order to get the entire belt route 5’s complete version soon in place.

The Transport Engineering Design Incorporation (TEDI), the project’s planning consultant, suggested that the belt route No. 5 would pass scores of key routes turning to Hanoi such as the Ho Chi Minh road, Cau Gie- Ninh Binh highway, Hanoi- Lang Son highway and Hanoi- Thai Nguyen highway.

Apart from recalculating investment scale, the MoT required TEDI to work with the local authorities on the direction of the route, investment phases and closely study localities’ planning to take advantage of on-going projects.

“The MoT asked the TEDI to finish the detailed planning to submit the prime minister in 2012’s fourth quarter,” said Luu.

World Bank hydro plant to flow

Vietnam’s first World Bank-funded hydropower project has just been licenced.

Central Thanh Hoa province has licenced Trung Son Hydropower, a subsidiary of state-run Electricity of Vietnam, to develop a 260 megawatt hydropower plant, which is scheduled to put into operation in 2017.

The plant will have a total output of 1.55 GWh every year, with investment of $411.72 million in which enterprise’s self-financing is 20 per cent of total investment, and the rest is from World Bank loans.

The World Bank will provide a $330 million loan to Trung Son hydroelectric power project through the International Bank for Reconstruction and Development. The loan has a 27-year term after it signed financial agreements for the Trung Son hydroelectric power project with Vietnam’s State Bank last year.

World Bank’s director for Vietnam Victoria Kwakwa said it was the bank’s first hydropower project in Vietnam with an aim to helping diversify power supply resources in Vietnam.

“This also is part of Vietnam’s plan to develop resources of low-cost electricity to meet its demand for energy and alleviate climate change by cutting a million tonnes of carbon dioxide emissions every year,” she said

The World Bank would also provide technical support to EVN on dam safety and the plant’s operation in line with international standards.

VNN/VIR/SGT/VNS/VOV/Dtinews/ND/SGGP