Developing leather & footwear into key export industry  
The Ministry of Industry and Trade has approved a master plan to develop Vietnam’s leather and footwear industry through 2020 with a vision to 2025. 

Under the plan, the leather and footwear industry will enter a new development period with orientations and targets to ensure sustainable development.

The sector will continue to boost exports, hold the lion’s share of the domestic market, develop the production of input materials and supporting industries, and  become more deeply engaged in the value added chain of the world market in order to raise labour productivity and economic efficiency.

Focus will be also on integrating into the regional and international economies and changing the production model, from manufacturing for export to self production and business.

The major target for 2020 is to turn leather and footwear into a key export industry in the national economy, continue to be among the world’s leading leather and footwear producers and exporters, and create more well-paid jobs with greater social responsibility for workers and increasing number of trained workers.

The sector’s projected growth target is for export turnover of US$9.1 billion by 2015, US$14.5 billion by 2020 and US$21 billion by 2025.

Increasing the locally-made proportion of different products is one of primary issues of concern in the process of creating the master plan for 2020, with a vision to 2025. The proportion of locally-made materials will reach 60-65 percent by 2015, 70-80 percent by 2020 and 80-85 percent by 2025.

Building industrial parks to produce leather and footwear materials to sharpen its competitiveness and developing more centres for vocational training, scientific and technological research, quarantine, trade promotion and fashion are long-term goals for the sector’s steady development.

Special attention will also be paid to the possibility of designing products and developing human resources for the leather and footwear sector as well as the fashion sector. The Ministry of Industry and Trade will direct the leather and footwear sector to work together with the garment and textile sector and other relevant sectors to give fresh impetus to developing the Vietnamese fashion industry in major urban areas and cities.

Under the plan until 2020, footwear will remain the sector’s key product but priority will also be given to producing high-quality fashionable shoes, suitcases, hand bags and wallets to penetrate new, high-class and domestic markets. The sector will apply advanced and environmentally friendly technologies to produce tanned leather. Investment for producing tanned leather will go along with developing herds of cattle to reduce the import surplus and boost production.

By 2020, total production value is predicted to hit 1.6 billion pairs of footwear, 300 million suitcases, briefcases, handbags and wallets, and 63,000 tonnes of hard tanned leather.

Under the zoning plan for the sector’s development, there will be four major regions targeted, including the Red River Delta, the southeastern region, the north-central and coastal central region, and the Mekong River Delta.

The total investment required for the 2011-2020 period will be VND 59,570 billion of which, 43 percent will come  from domestic sources and 57 percent from foreign investment.

Gold prices to keep increasing  
Gold prices on December 4 soared to VND36.7 million/tael, after the world price of gold rose by 2.1 percent. One expert predicts gold prices may increase to US$1,900 per ounce in the future, much high than the current price of US$1,413 per ounce.

At closing time on December 4, domestic gold prices were listed at VND36.5-36.6 million/tael. SJC gold at Sacombank was listed at VND36.45-36.7 million/tael.

In Hanoi, SJC gold at Sai Gon Jewelry Company stood at VND36.4-36.52 million/tael, and Thang Long Dragon gold at Bao Tin Minh Chau Company was transacted at VND36.5-36.62 million/tael.

On the verge of reaching VND36.7 million/tael, gold prices on December 4 increased by VND500,000/tael compared to the previous day and by VND800,000/tael against transactions early in the week.

Vietnam contractors – capacity and cooperation opportunities  
This is the theme of a seminar on the sidelines of the 4th International Trade Fair for Construction & Building - Machinery, Equipment, Materials, Vehicles, Technology & Services (Conbuild Vietnam 2010).

At the seminar, General Secretary of the Vietnam Association of Construction Contractors (VACC), Vu Gia Quynh said that the seminar provides a good chance for businesses to seek partners and set up long-term trading relationship. VACC is willing to support businesses through its information system.

Ronald Unterburger, managing director in Asia-Pacific region of the Messe Muenchen International (MMI) group, said the seminar in particular and the fair overall help contractors meet and establish working networks as well as services suppliers, management agencies and other relevant agencies to work closely with, and share information, experiences and technologies.

Mr Unterburger added that Vietnam has a stable society and high economic growth rate so it is attracting a lot of foreign investors. The Conbuild Vietnam 2010 will help partners gain a better understanding of the attractive investment environment in Vietnam.

Conbuild Vietnam 2010 is taking place at the Giang Vo Exhibition Centre in Hanoi from December 1-4. It features more than 200 businesses from 20 countries, including Germany, China and Singapore.

Cashew exports surpass US$1 billion  
Vietnam will export around 180,000 tonnes of cashew nuts, earning more than US$1 billion this year, the highest value ever, according to the Vietnam Cashew Nut Association (VCNA).

Since 2007, the cashew nut sector in Binh Phuoc province, which is considered a “cashew metropolis” has developed strongly. Processing factories in the province are currently gearing up production to meet contract orders with partners. Most businesses have already fulfilled their production plans for the whole year.

The Thien An Company had planned to export 1,700 tonnes of cashews this year, however, it has already exported more than 1,800 tonnes, earning more than US$12 million, up 150 percent compared to last year. Vietnam’s cashew nut exports achieved such high results because raw cashew nut harvests in India, Brazil and Indonesia decreased sharply while the world demand is increasing strongly. In addition, Vietnamese cashew nuts are high quality and they are favoured by American and European consumers. The export price rose by 28-30 percent compared to last year.

Vietnam is the biggest exporter of cashews in the world. This year is the first time cashews have joined the country’s list of products with an export value of more than US$1 billion a year.

However, the sector is facing several challenges. First, materials are becoming scarce and the price of raw materials hit a record high of VND35,000 per kilogram. Meanwhile the current export price of cashews is the same as their highest price in 2007 - US$7 per kilogram. Therefore, export businesses’ profits will increase due to exchange rate between the US dollar and Vietnam Dong. On the other hand, being too dependent on export markets poses inherent risks as it means it is governed by prices on the world market. Only 4-5 percent of the sector’s products are consumed in the domestic market. Therefore, the VCNA must find ways to boost domestic consumption.

VCNA president Nguyen Thai Hoc says the sector must promote the nutritional benefits of cashew nuts in the domestic market. Vietnam has a population of more than 80 million as well as many foreign visitors and investors. If our products are good enough they will be consumed at home, Hoc says.

The Ministry of Agriculture and Rural Development has set a target of consuming 30 percent of the cashew nut production in the domestic market by 2020, he adds.

Another challenge facing the cashew nut sector is weak business capacity that does not meet international standards, such as HACCP and GMP to improve the Vietnamese cashew nut’s prestige on the international market. Only 5 percent of the cashew businesses in Binh Phuc, the country’s largest cashew producing areas with more than 200 factories, have met the international criteria for exports.

Furthermore, while the production and processing capacity of businesses in Binh Phuoc is about 200,000 tonnes per year, they only process around 50,000 tonnes and the remainder has to be imported. The shortage of raw materials and price hikes will cause many difficulties for businesses in the next crop.

Currently, cashew nuts are competing fiercely with other tree crops, especially rubber, because the price of rubber has stayed high over the past several years. Therefore, if the cashew sector does not take measures to step up intensive farming, improve productivity and expand growing areas it will find it difficult to maintain its export value of more than US$1 billion in the next few years.

TransUnion penetrates Vietnamese market  
TransUnion, the leading global company in credit and information management, announced on December 4 that it received an investment license to establish a branch in Vietnam.

The Chicago based company now has branches in 25 countries around the world.

TransUnion works with businesses to gather, analyse and deliver information that will help them improve efficiency, manage risk, cut costs and increase income.

The company provides its clients with tools and resources to better understand and manage credit so they can achieve their financial goals.

No tax applied for two product groups from Laos, Cambodia  
The Minister of Industry and Trade (MoIT) has issued two circulars regulating the 2010 and 2011 quotas for products imported from Laos and Cambodia that will not have import taxes levied on them.

Accordingly, rice and dry tobacco exported to Vietnam from Cambodia with custom declarations from November 11, 2010 to December 31, 2011 and from Laos with custom declaration within 2011 will not be imposed taxes.

Those products must have a certificate of origin approved by the Cambodian and Lao custom offices.

The circulars will be valid from January 17-Decmber 31, 2011.

Introducing Vietnam investment opportunities in Hong Kong  
Vietnam attended the International Small-and Medium-Sized Enterprises Fair in Hong Kong from December 2-4 to promote its image and potential as well as cooperation and investment opportunities in the country.

Visitors were provided with information and publications on Vietnam’s investment environment, human potential, and socio-economic conditions as well as opportunities for foreign investors, especially small-and medium-sized enterprises that want to do business in Vietnam. The literature and samples of some goods attracted a lot of attention from visitors.

Dao Ngoc Chuong, Deputy Head of the Asia-Pacific Markets Department under the Ministry of Industry and Trade (MoIT), said that this is the second time Vietnam has attended such a fair. After the first time in 2009, many foreign investors went to the MoIT and the Vietnam Commercial Office in Hong Kong to obtain further information about the Vietnamese market.

During its time in Hong Kong, the Vietnamese delegation participated in seminars and meetings to exchange experiences with other countries in improving competitiveness and dealing with the current challenges.

The annual fair held by the Hong Kong Trade Development Council attracted more than 680 businesses, including more than 50 Vietnamese enterprises.

700 more businesses invest in Binh Phuoc  
Binh Phuoc has attracted nearly 700 businesses that have invested nearly US$388 million in the province since early this year, a year-on-year increase of more than 50 percent.

The provincial People’s Committee said that more than 3,000 businesses with a combined investment capital of more than US$1,600 million are operating in the province.

To attract more investment, the province will focus on improving infrastructure in eight industrial zones and the Hoa Lu Border Economic Zone, a total area of more than 33,000ha.

It will also promote advertising and simplify administrative procedures to create the best conditions for investors.

Thai is top foreign visitors to Hue 
More and more visitors from Thailand are traveling to Hue via the West-East Economic Corridor.

The number of Thai visitors to Hue increased from 4.7 percent in 2005 to 24 percent in 2010, putting them at the top of the list of foreign arrivals in Hue. As many as 6,000 Thai visitors arrived in Hue in a single day this year.

This is the result of close coordinated efforts between Vietnam, Laos and Thailand in improving transport infrastructure, expanding trade across the borders and reforming immigration procedures to create favourable conditions for tourism services to develop.

The West-East Economic Corridor stretches through Myanmar, Thailand and Laos to Vietnam. There is high hope that visitors will prefer to travel to Hue by road.

The province of Thua Thien-Hue had received 1.36 million visitors as of early December, a year-on-year increase of 11.7 percent, and earned VND774 billion, up 20.4 percent. The number of foreign visitors to Hue City increased by 7.9 percent.

Developing human resources in southwestern region  
A seminar on human resources development in the southwestern region in 2011-2020 was held in Can Tho on December 4 by the Ministry of Planning and Investment.

The Mekong Delta region comprising 13 cities and provinces is the nation’s key agricultural and seafood zone. It has a population of 17.7 million, including nearly 10 million people of working age. However, in 2008 only 20.5 percent of the workforce were considered qualified or skillful enough. The region has 38 universities, 35 high schools, and 312 vocational training centres. It also has the highest number of pupils who quit school in the country.

The region plans to raise the number of skilled workers to 45 percent in 2015 and 60 percent by 2020 and to create 35,000 jobs each year.

To achieve this target, the region will increase investment in improving the quality of teachers at vocational training schools.

Giant agriculture port reopens  
Cai Mep Agriculture Port in Ba Ria – Vung Tau province, which has been expanded to become the country's largest and also one of major ports in the region, reopened on December 1.

The 308-metre-long port has raised its capacity from 30,000 tonnes to 160,000 tonnes at present, then to 200,000 tonnes next year. It is capable of accommodating ships of up to 75,000DWT.

Expansion of the port, built in 2003 by the Singapore- owned Interflour Vietnam Ltd Company, costs US$50 million.

Interflour has installed automatic handling equipment with a capacity of 1,200 tonnes per hour and support equipment such as four electronic weighing systems and two weigh stations with a capacity of 60 and 80 tonnes.

On December 2 Interflour held a ground-breaking ceremony for its second flour mill, which has a capacity of 1,000 tonnes a day. When finished at the end of next year, it will make the company the country's largest wheat flour producer.

Its existing flour mill in Cai Mep Industrial Park in the province produces 500 tonnes a day.

The company has six mills in Southeast Asia and a research and development centre in Malaysia.

ANZ wins best deal award 2010 in Vietnam  
The Australia and New Zealand Banking Group (ANZ) has won the “Best Deal” award for Vietnam presented by the Asset Triple A Country Awards, Asia’s most prestigious award in recognition of excellence in financial services.

The award highlights ANZ’s arrangement of FPT Corp’s VND1.8 trillion bond issue with warrants.

This is the first deal from a Vietnamese issuer to be structured in bonds with detachable warrants format, opening up an alternative funding avenue at a lower interest rate.

The deal offers investors a coupon of 7 percent per annum with a term of 3 years. Some 1,158 warrants were issued for every VND1 billion of the bonds and the warrants were immediately detachable after the settlement.

PV