Wood products makers eye Canada
 
Wood products businesses should boost exports to Canada, a potentially lucrative market, a seminar held in HCM City last Saturday heard.

Nguyen Thanh Xuan, deputy director of the city-based Investment and Trade Promotion Centre (ITPC) said Canada was a huge market with large demand for wood products and furniture.

It was the world's fifth largest importer of wooden furniture and its imports were growing at 2 per cent annually, she said.

Thanks to their improvement in quality and design and reasonable prices, Vietnamese wood products were attracting increasing interest in Canada, especially items requiring high quality, she said.

Robert Mackinnon of the Trade Facilitation Office Canada (TFO), who is leading a delegation of six Canadian buyers to Viet Nam, said Canada was a major importer and exporter, even during the ongoing economic crisis.

"Imports of goods per capita are about double the US level."

Just like the US market, however, Canada required high-quality products at reasonable prices, he said.

Last year Viet Nam had been the top exporter of furniture products to Canada among ASEAN members, he said.

Tran Quoc Manh, deputy chairman of the Handicraft and Wood Association of HCM City (HAWA), said: "It is the right time to boost exports to the Canadian market since [its] potential is no less than the US'."

Though Vietnamese exports of wooden products to Canada had increased in recent years, it remained low compared to the market's total demand, he said.

Canada has high demand for indoor furniture made of hard wood like white oak and red oak and soft wood like pine, he said.

Customers there preferred environmentally friendly products, he said.

Mackinnon said two-way communication between buyers and sellers was very important, meaning Vietnamese suppliers should know English.

Suppliers should keep buyers informed of problems such as late delivery and deal with problems like damage during shipment, he said.

"Product development is very important because buyers do not buy the same thing forever but are always looking for new products," he said.

In addition, companies should pay close attention to packaging and enclosing certificates involved in the production and other processes, he said.

They should ensure the products delivered to buyers are exactly the same as the samples sent earlier, he added.

Huynh Van Hanh, also the HAWA vice chairman said exports of wood products to Canada was worth US$84.9 million last year compared to $54.6 million in 2009.

It was $56.1 million in the first eight months of this year.

In the first nine months overall wood products export topped $2.8 billion, an increase of 16.3 per cent year-on-year, according to the Ministry of Industry and Trade.

Export for the whole year is expected to be $3.8 billion.

HAWA, ITPC, and TFO Canada, in collaboration with the Vietnamese Trade Office in Canada, invited the Canadian buyer delegation to Viet Nam to directly meet Vietnamese furniture and handicrafts makers and explore buying opportunities.

Besides attending the seminar, the visitors also held business meetings and visited factories.

Vietnamese coffee brand sells in US and Korean supermarket stores

G7 instant coffee brand produced by Trung Nguyen Coffee Company of Vietnam has been on sale in Costco supermarket stores in the US and the E-mart discount supermarket stores in South Korea since October 2011.

The first order from Costco of 100 containers and from E-mart of 15 containers will be delivered from now till the end of 2011.

For acquiring orders from Costco and E-Mart supermarket chains, the G7 instant coffee brand had to pass verification by the SGS certification company, the world's leading inspection, verification and testing company, and the Bureau Veritas International Group.

Costco and E-Mart supermarket chains are represented by SGS and Bureau Veritas.

G7 instant coffee is the first Vietnamese coffee brand to sell in Costco supermarket chain stores.

SCG puts down a marker to flag its big growth targets

Thailand’s SCG has set its long-term vision for Vietnam’s business growth as one of its core regional markets.

The group last week reported its revenues from sales at 7.05 billion Thai baht ($229 million) in Vietnam in the first nine months of 2011, an on-year growth of 15 per cent. Until now, SCG’s total assets in Vietnam have increased 13 per cent to 10.05 billion baht ($326.51 million), due to the investment in corrugated paper container business by acquiring stake in Alcamax Packaging (Vietnam) Joint Stock Company in the second quarter of 2011, said Kan Trakulhoon, SCG president.

“SCG seeks to fulfill the vision to become ASEAN sustainable business leader by 2015, we continue to expand business across ASEAN countries, especially in strategic countries, namely, Vietnam, the Philippines and Indonesia,” Trakulhoon said. SCG began its regional expansion with Vietnam as its strategic hub in 1992. Currently, SCG has 13 operations in the country with more than $470 million of sales and trading volumes annually, and employs more than 2,000 local employees.

Trakulhoon said that the group was also studying additional investment opportunities in Vietnam.

SCG, one of the leading conglomerates in the ASEAN region, comprises five core businesses of SCG Chemicals, SCG Paper, SCG Cement, SCG Building Materials and SCG Distribution. 

With more than 100 companies under its umbrella and 34,000 employees, SCG creates and distributes innovative products and services that respond to the current and future needs of consumers.

Trakulhoon disclosed the unreviewed consolidated financial statements of SCG for 2011’s third quarter, which showed revenues from sales of 94.281 billion baht ($3.06 billion), an increase of 19 per cent year-on-year. The profit for the period registered 7.377 billion baht ($239.7 million), up 13 per cent on-year, partly from divestment gains in SCG chemicals.

Tokyu, Becamex join forces to develop urban project

Japan’s Tokyu Corporation and Vietnam’s Becamex IDC Corp. on Thursday cut a deal in Tokyo to develop manufacturing, urban areas and services in Vietnam.

The project is to improve urban quality within the southern province of Binh Duong in particular and in Vietnam in general.

Both sides will set up a joint venture to develop a new modern urban and service center of international standards following the signing ceremony of the memorandum of understanding (MOU). Located in Binh Duong New City, the scheme is invested by Becamex as the project owner.

Under the MOU, the two sides agreed to establish a research and development (R&D) group responsible for sounding out cooperation and investment opportunities in Vietnam.

The local company will help the R&D team to collect information on the locality’s development as well as that in other regions. Furthermore, Binh Duong Province-based firm will work with local related agencies on behalf of the group as well.

Based on Tokyu Corporation’s support, the group can learn experiences of project management, operation and development. Also, the Japanese partner plans to lure other Japanese investors for an effective cooperation between the two sides.

The Japanese partner is active in numerous sectors, such as electric railway, urban development, logistics, supermarkets and hotels.

Meanwhile, as a multi-industry group, Becamex has succeeded in investment and construction of residential and transport infrastructure projects besides finance, insurance and banking industries.
 
Adecco enters Vietnam employment services market

The human resource service firm Adecco Group on Wednesday announced to enter Vietnam’s employment services market with specialist divisions in sales and marketing, and finance and legal areas.

Adecco Vietnam is part of the Adecco Asia Pacific network with offices in Australia, China, Hong Kong, Japan, Malaysia, New Caledonia, New Zealand, Singapore, South Korea, Taiwan and Thailand.

“Adecco’s launch into Vietnam is timely and allows the company to further extend its support and services to regional and global clients,” Lynne Ng, regional director of Adecco South East Asia, said in a statement.

Adecco’s operations in Vietnam will be headed by British national Nicola Connolly, who has resided in Vietnam for the past seven years, and has extensive global recruitment experience gained in both the UK and Vietnam. She said at the launch on Thursday that Vietnam’s employment services market was very big.

She said that 80% of her company’s 150 global customers have arrived in Vietnam, and the company would provide services to both local Vietnamese and international organizations.

Adecco Group, based in Switzerland’s Zurich, has over 32,000 employees and close to 5,500 branches in over 60 countries and territories. It is a Fortune Global 500 company.
 
Funding earmarked for domestic violence victims

Domestic violence is on the rise in Viet Nam, with 33,904 cases across the nation reported from January to September, according to deputy director of Ministry of Culture, Sports and Tourism's Family Department Hoa Huu Van.

More than a third of domestic violence cases during the first nine months of the year were against women.

In an effort to counter the trend, the ministry had issued a legal document on funding for activities against domestic violence. The funds, which come from the State Budget, would be spent on activities to collect information and provide financial assistance for both victims and those who provide safe accommodation to victims.

The ministry also plans to expand its community-based domestic violence prevention model. In each commune, there would be a club acting as a forum for families in the community to exchange experiences in family life, while teams have been set up to intervene in cases of domestic violence.

There are 44 out of 63 provinces which have adopted the model and more than 11,500 organisations and individuals have volunteered to provide accommodation for domestic violence victims.

Local steel pipe makers to face anti-dumping case

Four U.S. steel pipe producers have demanded initiation of an anti-dumping and anti-subsidy investigation into steel pipe products imported from ten Vietnamese firms.

Petitions on such investigation were laid to the U.S. Department of Commerce on Wednesday by four steel makers stateside namely Ailled Tube and Conduit, JMC Steel Group, Wheatland Tube and United States Steel Corporation.

According to the Vietnam Chamber of Commerce and Industry (VCCI), beside Vietnam, steel pipe exporters from India, Oman and the United Arab Emirates (UAE) may also be investigated.

The U.S. Department of Commerce will consider and officially decide whether to start the investigation or not 20 days after the petition is received, or on November 11. However, local steel exporters have to answer a preliminary questionnaire and submit it before November 12.

The final investigation result is estimated to be released on October 5, 2012, along with the specific tax rates applicable for each nation or enterprise.

The ten steel pipe producers in Vietnam listed on the petition include Huu Lien A Chau, Daiwa Lance, Hoa Phat, Hoa Sen, Hyundai-Huy Hoang, SeAH, Tianjin Lida, Viet Duc, Vinapipe and Vingal.

There is a rumor that Chinese steel pipe products are jointed in Vietnam and labeled as Vietnamese products. This event, if true, goes against customs regulations because steel pipe jointing does not change the product’s origin.

The U.S. market demand for steel pipes is some US$3 billion a year. The biggest exporter China holding a 95% market share has been imposed anti-dumping tax rates at 17.7-39.2% since October 2009.

According to the Ministry of Trade and Industry, Vietnam’s export revenue of iron and steel in January-September has significantly risen to US$1.26 billion. The U.S. market only contributed 0.2%.

Meanwhile, the export revenue of steel pipes in nine months reached US$61.3 million, or 4.8% of the total value of iron and steel export, according to the General Department of Customs.

In the petition, the U.S. steel makers quoted the statistics on the export turnover of Vietnamese steel pipes to the U.S. market being some US$34 million as of August, or surging by 62.6% against the same period last year.

Military Bank to list on HOSE  

730 million shares of the Military Bank, one of the largest banks in Vietnam, will be officially listed on the Ho Chi Minh City Stock Exchange by November 1 this year.  
 
The Military Bank has a chartered capital of VND7.3 trillion, and in the first six months of 2011 pre-tax profits of the bank were VND1.08 trillion. It plans to increase its chartered capital to VND10 trillion this year and achieve pre-tax profits of VND2.91 trillion.

Last year, bank’s revenue topped VND10.23 trillion, up by 79.3 percent over the previous year, while pre-tax profits reached VND2.28 trillion.

Vinalines to focus on core business
 
The Ministry of Transport has required the Viet Nam National Shipping Corporation (Vinalines) to restructure its business after the company incurred a huge loss of VND613 billion (US$29.1 million) during the first half of this year.

Vinalines needed to withdraw capital from associate companies in which it owns less than 30 per cent of charter capital in order to muster up all capital for its core business, Minister Dinh La Thang said in a meeting with the company in mid October.

With capital contributions worth VND3.46 trillion ($164.8 million) to 53 affiliates and associate companies, Vinalines now ranks first among State-owned enterprises in terms of the amount of capital invested outside the parent company.

In addition to its ship-building, port infrastructure and ship repair work, Vinalines has also pumped VND370 billion ($17.6 million) into non-core sectors such as securities, banking and real estate.

Vinalines now holds shares in Capital Securities Company, Vinalines Land Joint Stock Co, Vinalines Land Vinh Phuc Joint Stock Co and Maritime Bank. Last year, it received a total dividend of only VND240 billion ($11.4 million), equivalent to 8 per cent each year.

"It is such a low dividend level that Vinalines is forced to review the effectiveness of its investment," the company's general director Nguyen Canh Viet told Dau Tu (Viet Nam Investment Review) newspaper.

Vinalines has also encountered financial difficulties in its core business of marine transport and port infrastructure, according to trade experts.

Despite global freight charge fluctuations, Vinalines still went ahead with massive investments in purchasing and building new vessels. These purchases put the company under strong financial pressure, experts said.

Meanwhile, the highly anticipated joint ventures between Vinalines, Sai Gon Port and foreign partners, including the newly-operational SP-PSA International Port Co Ltd and Cai Mep International Port Co Ltd (CMIT), were also reported to have suffered a loss of VND460 billion ($21.9 million).

Vinalines should review its existing and future projects and then decide which projects should receive the top priority, said Thang, suggesting that the company should focus on developing Lach Huyen Port in the north and Van Phong Port in the central region while upgrading existing ports in the south.

The company also needed to concentrate on developing logistics services, which could be a breakthrough for its development rather than purchasing old ships, Thang said.

Vinalines has been given a deadline of the end of November to submitt its overall restructuring scheme to the ministry.

Coffee deal to promote exports

The Viet Nam Technical and Commercial Joint Stock Bank (Techcombank) will lend a total amount of VND2 trillion (US$96 million) to coffee enterprises during the 2011-12 crop.

The loan, signed on Wednesday, aimed at helping domestic coffee enterprises improve their competitiveness and business performance.

Da Nang targets slow projects

The central city of Da Nang's Export Processing and Industrial Zones Authority (DIEPZA) reported on Wednesday that it had revoked two more foreign-invested projects due to slow deployment.

The first project is worth US$2.5 million and planned to produce specialised industrial tanks with investment from the South Korean-based Tradamco Viet Nam Co Ltd. The other project, worth $10 million, was in seafood processing and backed by investment from the Hong Kong-based Rativiet Co Ltd.

According to DIEPZA, since 2010, a total of 17 projects have been withdrawn due to slow implementation, including eight foreign-invested projects.

Firms told to make monthly reports

The Ministry of Industry and Trade (MOIT) has issued Circular number 38/2011/TT-BCT, requesting all share-holding companies and firms with over 50 per cent State ownership under the ministry to prepare periodical statistical reports.

The reports must include statistics on revenues, total costs, total assets, pre-tax profits and receivables. They have to submit monthly reports on the 17th of each month, semi-annual reports on June 17 and November 17 and yearly reports on April 17 of the following year, according to the new circular.

The circular will be effective from December 1.

Unilever opens distribution centre

Unilever in Viet Nam on Wednesday officially completed the second phase of its Warehouse Project, opening the country's largest consolidated distribution centre in the Viet Nam-Singapore Industrial Park (VSIP), located in the southern province of Binh Duong.

JV Raman, chairman of Unilever Viet Nam, said: "With a total investment estimated of more than US$20 million, the centre will enable us to satisfy our growth needs for the next few years and create jobs for more than 700 local people."

Seafood firms call for tax change

The Viet Nam Association of Seafood Exporters and Producers (VASEP) has requested the tax on imported "sugpo" prawns, white-legged prawns, sea prawns, octopus and squid be reduced to a uniform 1 per cent.

The request was made due to a lack of local seafood for processing and exporting.

At present, the tax on imported shrimp, squid and octopus ranges from 12 to 20 per cent.

Rubber export taxes change

The Ministry of Finance will impose a new export tax rate of 3 per cent for latex and other rubber products coded 4001 from December 8.

The rate on synthetic rubber coded 4002 will be 5 per cent instead of 3 per cent.

The rate for rubber products coded 4005 will be reduced from 5 per cent to 3 per cent.

Ninh Binh Fertiliser gets greenlight

The Prime Minister has approved plans by the Viet Nam Chemical Group (VINACHEM) to establish the Ninh Binh Fertiliser Company Ltd Co.

At first, the company will have charter capital of VND2.5 trillion (US$120 million) owned by VINACHEM. The government has also required VINACHEM's board of directors to accelerate the company's capital raising process and equitisation by 2015.

VINACHEM holds 100 per cent of charter capital at seven other limited companies, 50 per cent at 21 joint-stock companies and less than 50 per cent of 16 other businesses.

Fisheries, rubber firms see profits soar in Q3

Fisheries and rubber companies have reported high profits in the third quarter of this year, which could be seen as bright spots in the context that many listed companies were forced to reduce their targets due to continued business hardships.

According to the HCM Stock Exchange, 75 of the total 297 listed companies have submitted their third quarter financial statements.

Most companies operating in fishery and rubber sectors reported their profits exceeded the targets set for this year by the end of September. Cuu Long Fish Co's (ACL) pre-tax profit surpassed its yearly goal by 64 per cent, while Mekong Fisheries Co (AAM) also exceeded its profit target by over 34 per cent.

Thong Nhat Rubber Co (TNC) reported it had already surpassed its annual profit target, despite having raised it by 51 per cent.

Favourable factors including increased rubber prices played a key role in helping rubber companies attain high business results, said Banh Manh Duc, a member of the supervisory board of the Hoa Binh Rubber Co (HRC) – the fifth rubber company to have exceeded its annual target in the first nine months.

Duc said rubber prices had increased by 150 per cent since the beginning of the year.

Ha Viet Thang, a member of the board of directors of the Hung Vuong Corp (HVG), also said increased price and production helped seafood companies achieve high profits. He added that prices had soared by up to 20 per cent between May and July.

HVG exported a healthy 19,000 tonnes in the first five months of the year, but the volume increased to 31,000 tonnes by the end of September.

With these industry advantages, fisheries and rubber enterprises achieved high business results despite difficulties in both domestic and foreign markets, but several other companies also went against the norm to also post profits.

HCM City Metal Corp (HMC) posted a nine-month profit of VND90.5 billion ($4.3 million), tripling the figure of the same period last year and exceeding its annual target by 81 per cent.

Binh Dinh Minerals Co (BMC) also reported pre-tax profit up 20.7 per cent against its target for the year, Viet Nam Italia Steel (VIS) by 41 per cent, and Ninh Hoa Sugar Co (NHS) by 40 per cent.

In the context of unfavourable business conditions, companies achieving high profit results should be praiseworthy. However, according to many experts, such results should be looked at from many angles, such as correlation between revenue and profit growth, or businesses that set far lower targets this year compared to last year.

Mekong Delta rice farmers boost production

Rice farmers in the Cuu Long (Mekong) Delta came in for much praise for increasing output by more than a million tonnes this year as targeted by the Government at a review conference last Friday.

Speaking at the conference in Hau Giang Province which also discussed plans for the next rice crop, Deputy Minister of Agriculture and Rural Development Bui Ba Bong admitted: "Early this year, the target seemed hard to reach due to challenges like erratic climate."

However, output in the southern region was 25.2 million tonnes, with the delta accounting for more than 23 million tonnes, 1.52 million tonnes higher than last year.

The achievement had been due to the recent implementation of the large-scale rice field model in the delta, he said.

Under the model, land was pooled and hundreds of farming households and businesses co-operate to grow crops. In the delta, more than 6,400 households farmed a total of around 8,000ha to grow the winter-spring and summer-autumn rice crops this year.

The advantage of this model was that businesses help the farmers by providing them with seeds, fertilisers, irrigation, advanced technologies, and modern farming techniques, thus helping reduce production costs and improve productivity and quality, and by selling their products.

The businesses benefit by having long-term suppliers.

"Without large-scale paddy fields, the Cuu Long (Mekong) Delta farmers would continue to be poor," Bong said.

The model should be expanded to other regions while the delta needed to implement the model on an area of 50,000ha in 2012 and 100,000ha in 2013, he said, adding it would greatly enhance the Government's new rural development plan.

Pham Van Du, deputy director of the Cultivation Department, said the new model, which met VietGAP Good Agricultural Practices standards, attracted businesses and farmers.

Rice output and exports had been good, helping farmers earn profits. New high-quality rice varieties had been developed and used, increasing yields, he added.

Viet Nam's rice exports are likely to top 7 million tonnes this year.

But Pham Van Bay, deputy chairman of the Viet Nam Food Association, said while Viet Nam had the opportunity to overtake Thailand in rice exports next year, it was more important to make exports sustainable.

"The target is to develop a national trademark for Vietnamese rice and achieve GlobalGAP standards."

VFA estimated rice exports next year to be 6.5 – 7 million tonnes. But it worried that too many businesses have been licensed to export, making the domestic rice market chaotic.

The Ministry of Industry and Trade needed to carefully review the list of businesses registered for rice trading and export, Bay said.

Nguyen Van Dong, director of the Hau Giang Department of Agriculture and Rural Development, said many challenges still needed resolving, including poor preservation after harvest and lack of close ties between the Government, scientists, farmers, and businesses.

Organic vegetables raise farmers' profits

Hang Nguyen
 
The big garden, green with many organic vegetables and a joy of local farmers from northern Hoa Binh Province's Luong Son District, has found success under a pilot project launched by the Agriculture and Rural Development Ministry's Institute of Policy and Strategy and Rural Development.

The project was launched in 2009 and sponsored by the Spanish Agency for International Development Co-operation (AECID).

Nguyen Thi Thuy, 43, a local Muong-ethnic-minority farmer said, "I've earned VND2 million (US$97) per month from growing organic vegetables, as opposed to growing rice and receiving half in the past."

"I took part in a three-month course to learn how to grow and care for organic vegetables at a local college named Bac Bo Agricultural and Rural Development," she said.

"That was the first time I heard about organic vegetables and I wondered whether growing them was hard," she said.

Processing home-made pesticides from chilli, garlic and ginger to prevent worms for the vegetables is the hardest step, Thuy said.

"However, scientists of the institute supported me very much," she said.

The organic vegetables are planted in an area of 1.5ha under Participatory Guarantee Systems (PGS), an international organic certification for small farmers, said Nguyen Xuan Te, vice chairman of the district People's Committee.

Around 80 local households benefited from the pilot project, he said.

"We receive around 1.2 tonnes of organic vegetables per month, said Pham Ngoc Ben, a representative of Green Link Co Ltd – one of the distributors of the vegetables.

The price of the organic vegetables is often double what it usually is in the markets, he said.

He explained the reason was because organic vegetables are grown under the PGS and need more time to harvest than vegetables grown using artificial methods.

However, the organic vegetables are safer for customers because no chemicals are used to grow them, he added.

Dang Kim Son, head of the institute said the success of the pilot model, with the co-operation of farmers, scientists, businesses and the State, is the first favourable step the local authority has taken to implement organic vegetable growing in the province.

"The move also aims to better carry out targets of Project 1956 to provide vocational training courses for rural labourers issued by the Government," he said.

In a related move, a co-operative of organic vegetable was set up yesterday in the province to repeat the model in other districts.

The organic vegetables are planned to cover nearly six ha, said Nguyen Duc Xuong, head of the co-operative.

The co-operative will provide about 77 tonnes of organic vegetable each year to the market, not only in Hoa Binh province, but other places as well, he said.

Growing organic vegetables will reduce the costs of buying fertiliser, pesticides. It takes advantage of manure, minimises environmental pollution and is good for the health of the customer, he said.

Mekong rice crops see high yields

Farmers in the Cuu Long (Mekong) Delta, the country's rice granary, are harvesting a bumper autumn-winter rice yield, the Cuu Long Delta Rice Research Institute has said.

Half of the 650,000ha under the rice crop, the year's third, has been harvested, and the average yield so far has been 5.1 tonnes of paddy per ha, a 0.4 tonne rise from last year.

The total harvest is expected to top 3.15 million tonnes of paddy, taking the year's total output to 22.8 million, 1.3 million tonnes higher than last year.

At current rice prices, farmers can earn a profit of VND4,100-5,500 per kilogramme of paddy, the institute said.

In An Giang Province, which has the largest area under rice in the country, farmers have harvested around 6,000ha out of the total of 131,000ha.

Le Van Nung, deputy chairman of the provincial People's Committee, said the harvest was likely to be finished in early December.

Though the floods had destroyed 4,200ha of in An Giang, farmers had not panicked and continued to tend the crop, he said.

"The Ministry of Agriculture and Rural Development has designated the autumn-winter crop as the main rice crop.

"Every year we will increase or decrease the area under autumn-winter rice based on the flood forecast."

Dong Thap Province planted 98,500ha.

It has harvested 77,000ha so far, according to its Department of Agriculture and Rural Development.

In some places where farmers only grow two rice crops a year, the harvest of the summer-autumn crop was completed on October 20.

The 1.66 million ha yielded an average of 5.21 tonnes per ha, according to the Plant Cultivation Department.

PV