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BUSINESS IN BRIEF 5/4

Nearly 400 businesses to participate in VietnamExpo 2013; SBV has room to further cut deposit rates; Industrial production sees good signs; Vinacas wants to raise cashew nut prices
Cherry blossom tours sell well

The short but sensational cherry blossom season in Japan has started with thousands of Vietnamese tourists off to the land of the rising sun.

Tours departing for Japan and South Korea as well as Japan-U.S. tours were launched early in HCMC. Fiditourist, TST Tourist, Saigontourist, Vietravel and Samurai Tours are among travel firms offering such tours but most are already sold out.

The five-day and six-day tours to Japan are the best-sellers and priced at VND37-47 million per tour. Most tours are not available as the cherry blossom season will end in the next two weeks.

Tran Thanh Hanh, tour operation manager of Samurai Tours, said that the firm had 150 customers and stopped receiving new bookings, and its last tour would depart on April 6.

“This year the cherry blossoms have appeared around ten days earlier than normal. Therefore, if departing after April 10, tourists will be unable to see the cherry blossoms in bloom,” she said.

According to Hanh, the price of cherry blossom tours this year is lower than last year. For instance, the tour lasting seven days and six nights is priced at VND47 million per person compared to VND52 million last year.

Saigontourist Travel Service Company on Tuesday also stopped receiving bookings as all 815 tour places have been sold.

Cherry blossom tours offered by Saigontourist are Tokyo-Hakone-Mount Fuji-Disneyland and Tokyo-Mount Fuji-Kyoto-Osaka-Kobe in Japan; cherry blossom tour to South Korea for the elderly and Seoul-Nami-Everland Resort in South Korea; East Coast-West Coast in the U.S. and the tour to both Japan and the U.S.

All tours of Saigontourist depart within the next few days, with 565 tourists coming to Japan, up 45% year-on-year.

Vietravel does not have exact numbers of customers buying cherry blossom tours. However, in the last two weeks alone, the number of customers for Japan and the Japan-U.S. tour has been 360 and 100 respectively.

Nguyen Minh Man, media manager of Vietravel, said that the number of customers in each group this year increased to 40 from 25 last year.

25,700 taels of gold sold at SBV second auction

The second gold auction held by the State Bank of Vietnam (SBV) on April 4 ended in success with 25,700 of the 26,000 taels of gold bullion sold.

Twenty out of 22 registered bidders bought gold bars at the bidding price ranging from VND43.23 million to VND43.37 million per tael. One tael is approximately 1.2 ounces or 37.5 grammes.

The second auction took place after domestic gold fell sharply by VND400,000 per tael, while the difference between the domestic and global prices was about VND4.3 million per tael.

This was part of the SVB’s efforts to increase the supply of gold bar and stabilise the domestic gold market.

The first of SBV’s gold bullion auctions on March 28 was less successful with only 2,000 of 26,000 taels of gold sold, at VND43.81 million per tael.

The bank announced that it will continue to hold gold auctions in April to increase the supply of gold in the market. The next auction is expected to be held on April 5.
Another further three auctions may be organised in the next week.

Phideco proposes PPP for Cho Lon coach station

Phuoc Hoa Investment & Development Joint Stock Company (Phideco) has submitted to the HCMC government a plan to reconstruct Cho Lon coach station in District 6 with total investment of VND1.1 trillion.

The HCMC government and Phideco have met to discuss the possibility of applying the public-private partnership (PPP) model to the project.

Phideco presented a design with three basements, one ground floor and four floors for the coach station that covers an area of 9,035 square meters and surrounded by Trang Tu, Le Quang Sung, Nguyen Thi Nho and Phu Huu streets.

The old Cho Lon coach station has for long used as the station for both public and inter-provincial buses.

With the new design, prepared with support from Meinhardt Vietnam Ltd., the two lowest basements will be the overnight parking lot for buses while the other basement will be used for 110 small cars and 310 motorcycles. Besides, the ground floor will serve as the area for the management of the stations’ operations, and the four upper floors will be for commercial activity.

According to Phideco, the firm’s available capital accounts for 30% of the station’s total investment, and the balance will be mobilized from banks.

At the meeting, HCMC vice chairman Nguyen Huu Tin showed concerns over the traffic density in the area. According to Tin, the commercial center at the station will increase the volume of traffic.

Tin also assigned the Department of Transport and the Department of Zoning and Architecture to check and evaluate impacts of the plan to soon work out suitable traffic regulation plans.

Agricultural trends for 2013 outlined

Prospects for Vietnam’s agricultural sector in 2013 were discussed at a seminar in Hanoi on April 4, attended by representatives from ten institutions which specialise in agricultural development and economic forecasting.

The event was co-organised by the Institute of Policy and Strategy for Agriculture and Rural Development (IPSARD) and the National Agricultural Policy Centre.

Participants said that 2013 marks five years since Vietnam joined the World Trade Organization (WTO) and fulfilled its commitments with the opening of market and tax reductions on numerous products, such as processed farm produce and foodstuffs.

At the same time,, agricultural exporters have had to face strict quality controls, new trade conditions, and fluctuations on the world market which have all had a strong impact on agricultural production.

Dr Dang Kim Son, IPSARD Head said that apart from input factors and new policies, up-to-date market information plays an important role in helping agricultural enterprises operate successfully.

Therefore, the Ministry of Agriculture and Rural Development (MARD) and relevant ministries should research and disseminate the latest market data to help people make informed decisions.

The seminar offered an opportunity for those who are responsible for agricultural and rural development to have access to policy researchers, scientists and agricultural businesses.

Cambodia, Vietnam boost trade cooperation

The Vietnam -Cambodia Trade Service Exhibition 2013 (Ho Chi Minh City Expo 2013) officially opened at the Mondial Centre in Phnom Penh on April 3.

The five-day exhibition features 250 booths displaying high-quality products in the field of household plastics food and foodstuffs processing, interior decoration, garments, footwear, leather footwear, handicrafts, cosmetics, electronics and construction materials.

In her opening speech, Cambodia’s permanent Deputy Prime Minister Men Som Ol praised Ho Chi Minh City’s sponsoring annual exhibitions in Cambodia as a pratical contribution to promoting bilateral economic trade and services cooperation and strengthening the traditional friendship between the two countries.

Vietnam’s investment in Cambodia has increased significantly in the areas of agriculture, telecommunications, air transport, banking and tourism, she added.

She wished that Vietnamese and Cambodian enterprises would spare no effort to contribute to sustainable growth and peace in the region.

Nguyen Thi Hong, Vice Chairwoman of the Ho Chi Minh City People's Committee, said the exhibition provides a golden opportunity for Vietnamese businesses to explore the investment environment in Cambodia.

A series of trade and tourism promotions and cultural exchanges will also be held during the exhibition.

Vietnam is Cambodia’s second largest trade partner. Two-way trade turnover between the two countries reached US$3.3 billion in 2012, 17 percent higher than last year’s figure.


Vietnamese footwear regains niche in EU market

Footwear - one of Vietnam’s key hard currency earners in the European Union (EU) - looks to benefits it will reap from the General Scheme of Preferences (GSP) offered by the market in 2014-2016.

According to the Ministry of Industry and Trade, the European Commission has officially resumed GSP for Vietnamese footwear after ceasing it for five years.

The EU’s decision, which will become effective from January 1, 2014, will allow Vietnamese footwear to re-enjoy duty preferences in the EU market.

Vietnam is now the second largest footwear supplier to the EU market after China.

Among products sold to the EU market, footwear is Vietnam’s second biggest hard currency earner, with $2.65 billion in 2012.

Last year, the country earned $7.26 billion from selling footwear abroad, which accounted for 6.3 per cent of its total export revenue.

GEF supports 140 poor fishing communities

The World Bank (WB) approved an additional grant of $6.5 million to the Coastal Resources for Sustainable Development Project (CRSD) in Vietnam on March 29.

The credit comes from the Global Environment Facility (GEF) – a Trust Fund managed by the WB to help address six critical focal environmental areas: biodiversity, climate change, international waters, ozone depletion, land degradation and persistent organic pollutants.

The money will be used to finance inter-sectoral planning for coastal areas and the co-management of near-shore capture fisheries.

The grant will provide direct support to around 140 poor fishing communities in eight provinces across the country to help them prepare and implement co-management plans for coastal fisheries to improve their sustainable management.

The original CRSD project (funded by US$100 million from IDA credit) was approved by the WB on May 10, 2012 and has four components: strengthening institutional capacity for sustainable fisheries management; good practices for sustainable aquaculture; sustainable management of near-shore capture fisheries; and project management, monitoring, and evaluation.

Nearly 400 businesses to participate in VietnamExpo 2013

The 23rd International Trade Fair (VietnamExpo 2013) will take place from April 10th-13th 2013 in Vietnam Exhibition and Fair Centre (VEFAC) in Hanoi.

The event aims to promote exports, expand the domestic market and provide opportunities for domestic and international businesses to establish ties, seek trade and investment cooperation, and transfer technology.

In addition, the event is also expected to step up Vietnam’s economic integration into the global economy, contributing to controlling inflation, stabilising the macro-economy and ensure social security, as well as promoting Vietnamese products and services with potential and strong trademarks.

So far, nearly 400 businesses from the Republic of Korea, India, the Republic of Belarus, Indonesia, Cuba, Cambodia, Hong Kong (China), Slovakia, Laos, Malaysia, Russia, Nigeria, Singapore, South Africa, China and Vietnam have registered to showcase their products and services in 500 standard booths at the VietnamExpo 2013.

According to the organising board, the main product lines on display at the fair will include agricultural machinery and equipment; construction, building materials and interior-exterior designs; electric appliances, electronics & information technology; materials for textile, garment and footwear and textile machinery; food, beverages and food additives; household goods; cosmetics and beauty products; and services.

The fair Opening Ceremony will start at 9.00 am on April 10th 2013. During the event, a number of seminars and forums will be held.

Cooperation between military businesses and bank promoted

Deputy Defence Minister, Senior Lieutenant-General Le Huu Duc, on behalf of the Defence Ministry’s leaders, met with CEO of the Vietnam Development Bank (VDB) Nguyen Quang Dung on March 28th in Hanoi to discuss a mechanism to support military businesses to carry out socio-economic projects, while consolidating national defence and security in major areas.

Director of the Finance Department (the Defence Ministry) Major-General Tran Trung Tin, CEO of the Military Bank Senior Colonel Le Cong and representatives of Military Zones 7 and 5, military companies and the VDB’s branches also joined the discussion.

CEO Nguyen Quang Dung pointed out the important role of military companies in the cause of national defence and construction, and their current difficulties and challenges in approaching preferential loans. To deal with these issues, the bank established a special division, headed by a Vice CEO, in association with the Defence Ministry’s Finance Department and the Military Bank.

Addressing the ceremony, General Duc acknowledged delegates’ ideas and hoped that VDB would continuously offer the State’s preferential loans to military companies. Besides, the Deputy Defence Minister affirmed that the army units should run their business safely and effectively to maintain their prestige.

In addition, the General assigned the Finance Department to work together with relevant agencies of VDB and military businesses to build up the mechanism and then report to the Defence Ministry and the Prime Minister to gradually solve their difficulties.

Rubber demand to increase

The demand for natural rubber is expected to rebound from now to 2020, Tran Thi Thuy Hoa, General-Secretary of the Vietnam Rubber Association (VRA) has said at a recent conference held in southern Binh Phuoc province.

The conference, themed “Sustainable Rubber Development”, drew the participation of more than 550 delegates from ministries, departments, institutions, groups and associations in the field of agriculture.

According to Hoa, the rubber area has increased quickly thanks to high rubber prices on foreign markets.

To meet the high demand of natural rubber in the coming time, the industry needs to further expand the acreage under rubber and ensure the quality of rubber products, she noted.

According to the VRA, Vietnam has become the third largest exporter of natural rubber in the world after Thailand and Indonesia , with its output bouncing up to 1.01 million tonnes last year, representing a volume increase of 23.8 percent from 2011.

SBV has room to further cut deposit rates

The State Bank of Vietnam has the margin to further cut dong deposit rates to 7 percent and lower lending rates to below 10 percent, the National Financial Supervisory Commission (NFSC) recently revealed.

In a study on the country's macro-economic performance in the first quarter of 2013, the commission found that with domestic consumption and credit demands remaining weak, this year's inflation is likely to remain under 7 percent.

This is further evidenced by average statistics for the past decade showing that inflation in the first quarter often accounted for roughly 40 percent of the whole year's rate.

The commission observed that in the first quarter, bank liquidity generally remained stable and interest rates tended to fall in tandem with inflation movements; yet the rate of deflation did not match up to businesses' expectations.

Slow credit growth in the manufacturing sector reflected weak capital absorption of the economy, the report noted. As of March 21, total lending increased only 0.03 percent, while deposits rose 3.86 percent from the end of 2012.

Government bonds are still an attractive investment channel for banks with their attractive yields and apparently low risks.

However, with non-performing loans still posing major obstacles for enterprises to access bank capital, the credit growth target of 12 percent this year is unlikely to be achieved.

According to the NFSC, the exchange rates remain stable due to the trade surplus and improved short-term investments.

The NFSC further recommended the government to give more support to enterprises in order to boost production and business by cutting interest rates, reducing corporate income tax to 20 percent as well as considering cuts to value added tax (VAT).

The commission highlighted the need to accelerate the process of dealing with non-performing loans, explore the possibility of starting a debt asset management company in the near future, and actively launching a preferential credit package to support the construction sector and the real estate market.

Industrial production sees good signs

Vietnam’s industrial production is expected to improve in the second quarter of this year as many domestic enterprises step up raw material imports for production, said Nguyen Tien Vy, an official from the Ministry of Industry and Trade (MoIT).

The planning department director told a meeting in Hanoi on April 1 that inventory levels in the steel industry have fallen sharply and hovered at about 280,000 tonnes. He said many garment and textile enterprises have already received stable orders for the second quarter and are negotiating for the third.

In the first quarter, the index of industrial production (IIP) reached a low level of 4.9 percent, compared with 5.9 percent in the correspondent period last year.
Vy said inventories began to increase in March, adding that the rate for manufacturing and processing industries was 16.5 percent higher than those of the same period 2012.

Sectors with high inventories included electricity cable (62 percent), metal components (35.5 percent), motor vehicles (37.3 percent), concrete, cement and plaster (28 percent), and chemicals (27.4 percent).

He attributed the reduction of industrial production to the 9-day-long Tet (Lunar New Year) holiday and to economic difficulties.

Vietnam is expected to have a trade surplus of 482 million USD in the first quarter of this year with a total export turnover of 29.68 billion USD, a year-on-year rise of 19.7 percent.
Ministry statistics showed that the surplus will mainly come from the foreign direct investment (FDI) sector. The domestic sector saw imports exceed exports by more than 2.6 billion USD while FDI businesses had a trade surplus of 3.1 billion USD.

MoIT Deputy Minister Tran Quoc Khanh said the FDI sector helped the export value of mobile phones and components hit 4.48 billion USD, and electronic products, 2.42 billion USD.

However, the nation’s key export products slowed, with rice export value falling by 3.1 percent and fishery products down 5.5 percent.

A rice reserve of 1 million tonnes helped push up the rice price by 100-300 VND per kilogramme, said Nguyen Minh Toai, director of the Department of Industry and Trade of the Mekong Delta city of Can Tho .

But many enterprises did not buy rice directly from farmers and profits mostly fell into the hands of intermediaries, he said, urging an increase in the floor rice price to be considered carefully to improve farmer’s incomes.

MoIT Minister Vu Huy Hoang said the ministry will further assist enterprises with capital, administrative procedures and markets to help them overcome the hard time.
“The ministry will keep a close watch on market changes so that it can advise enterprises when to limit business risks,” he said. “We will also take necessary steps to assure goods reserves to prevent falls in export prices.”

Hoang urged organisations to strengthen promotional activities to boost consumption and reduce inventories.

“Drastic measures must be taken during the remainder of the year so that the year’s target can be fulfilled, especially when the nation’s major export markets, including the US, the European Union and Japan haven’t shown any clear signs of recovery,” said Khanh.

According to economic expert Nguyen Minh Phong, domestic enterprises should enhance their competitiveness, especially raising the added value of their products.

Central Highlands hopes on linkages for higher growth

Vietnam’s coffee capital, the Central Highlands, is looking forward to partnering with other developed centres and localities around the country in long lasting, specific cooperation projects to fully tap its potentials.

Future partnerships are expected to be set up during a conference on investment promotion and social welfare in the Central Highlands, which is scheduled for April 12 in Pleiku city, Gia Lai province, it was reported at a press briefing in Gia Lai on April 1.

The conference also looks to bolster the linkages among localities in the region towards a robust socio-economic growth for the entire area, which has a total land area of 54,461 square kilometres with 5.1 million people and holds a key strategic position in the national economy, politics, security and defence.

It will hear economic organisations and investors’ opinions regarding local management and administrative procedures for further improvement, said Tran Viet Hung, Deputy Head of the Central Highlands Steering Committee.

At the press briefing, Hung also reported that t he Vietnam Bank for Agriculture and Rural Development (Agribank) will invest 6 trillion VND to develop farm products and coffee tree plantation in the Central Highlands.

This is one of the projects on sustainable social welfare development and investment attraction in the region, the work that will see the involvement of other commercial banks, Hung noted.

The Bank for Investment and Development of Vietnam (BIDV) plans to sign contracts worth 7.3 trillion VND with regional businesses while the Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) has committed to providing almost 40 billion VND for social welfare programmes in the region.

The Central Highlands is home to five provinces, namely Kon Tum, Gia Lai, Dak Lak, Dak Nong and Lam Dong.

In 2012, the region made a GDP growth of 11.8 percent, with per capita income averaging 26.9 million VND (1,287 USD) and export revenue recording a year-on-year increase of 11 percent.

$6.7m power project in doubt

If the Tan Tao Investment and Industry Corporation (ITACO) fails to arrange capital for investment in Kien Luong Power Centre before June 30, the project will likely be halted.

The statement was made by deputy chairman of Kien Giang Province's People's Committee Pham Vu Hong.

Despite being licensed five years ago, the project has barely made headway.

Kien Luong Power Centre was supposed to be built in Binh An Commune in the province's Kien Luong District with investment of about US$6.7 billion.

Thermal power plant Kien Luong 1–the first phase of the project–was scheduled to come into operation by the end of this year.

According to ITACO, a subsidiary of Tan Tao Group, land clearance for the construction of Kien Luong 1 was completed over 18 months ago, but the project has since made no progress due to a lack of capital.

The $800 million Nam Du Deep Sea Port in Kien Hai District's An Son Island Commune, 60km from the Centre, was designed to receive ships of 150,000 DWT and 50 million tonnes of coal to transfer to the Centre and thermal power plants in the south. However, the port still only exists on paper.

ITACO General Director Thai Van Men said that some foreign banks had agreed to lend the corporation capital to continue the project. But to sign credit contracts, the company required the Govern-ment's guarantee, which had so far not been forthcoming.

Le Khac Ghi, director of the provincial Planning and Investment Department, said those responsible for a project – whether conducted under the Build-Operation-Own or Build-Operation-Transfer model – must prepare at least 20 per cent of total investment from their own budget in order to be eligible for a loan.

While the Government sought to restructure the economy and manage the public debt with a new level of scrutiny, according to Ghi, the project's standstill presented a major obstacle – hindering the country's economic and energy development and making it difficult for the province to attract other investors with stronger financial capacities and experience.

Belgian dredging project underway

The dredger Uilenspiegel arrived in HCM City's Saigon port on Sunday as part of the second phase of a Belgian-funded project to increase the depth of the Soai Rap River so that it can accommodate larger ships.

The ship will dredge 54 kilometres of the Soai Rap River, creating a shorter route for vessels coming from the sea into Hiep Phuoc Port area in Nha Be District.

The ship, 142.8 metres long and 26.8 metres wide, has a container of 13,700 cubic metres, and can dredge up to 70,000 cubic metres of mud a day.

In addition to the Uilenspiegel, about 30 smaller ships are also being used to dredge the river. The ship is operated under a contract signed between the Soai Rap River Dredging Investment Management Board under the HCM City Transport Department and the Belgium-based Dredging International NV Company.

The project's second phase is expected to be finished by April next year.

At least 54 kilometres of water will be dredged, increasing the river's depth to 11.5 metres, according to the board.

Originally, the river had a depth of five to six metres, but in the first phase (2009-10) of the project, the river was dredged to a depth of 9.5 metres, allowing vessels of 40,000-50,000DWT to traverse it. After the second phase, the Hiep Phuoc Port in HCM City's Nha Be District will be able to receive larger ships with a loading capacity of 50,000-70,000DWT.

The final phase of the project will dredge this same section of the river to a depth of 12 metres, allowing it to receive vessels with a loading capacity of more than 70,000 tonnes by 2015.

Of the investment of nearly VND2.8 trillion (US$134 million), VND2.2 trillion ($105 million) comes from Belgian Official Development Assistance (ODA) loans and the rest from the city budget.

Nguyen Van Cong, Deputy Minister of Transport, said the project would help increase connectivity among seaports and enhance logistics and export services in HCM City.

A representative from the Viet Nam Seaports Association said dredging the Soai Rap River would help to reduce transport costs and make Vietnamese products more competitive.

The use of the Soai Rap River, together with Cai Mep – Thi Vai River in Ba Ria – Vung Tau Province, is expected to help the southern economic zone become one of the country's most important zones and Hiep Phuoc Port one of the major ports in the region.

Vinacas wants to raise cashew nut prices

The Viet Nam Cashew Association proposed raising the price for cashew nuts for export by 15-20 per cent.

In the first two months of 2013 the volume of cashew nuts for export reached 34,327 tonnes, resulting in export turnover of over US$200 million - a 66.8 per cent decrease in volume and 37.71 per cent increase in value.

But Vietnamese exporters still faced many risks in importing raw cashews, according to Vinacas, especially in terms of quality.

Importing unprocessed cashews results in a profit of about $180 per tonne for Vietnamese businesses.

Vietcombank unveils new brand recognition

Vietcombank, the Joint-Stock Commercial Bank for Foreign Trade of Viet Nam, launched a new logo to mark the 50th anniversary of its founding and received the nation's Independence Order.

The bank's new logo is primarily green and made up of inter-connected letters, highlighting its commitment to bring trust and success to all of its customers.

Goods, services sales up 11.6% in Ha Noi

Ha Noi saw a year-on-year increase of 11.6 per cent in sales of goods and services during the first quarter this year, in which retail sales went up 11.5 per cent.

The purchasing power during the first three months was still weak due to the prolonged economic downturn, which forced many enterprises to stop operations, resulting in fewer jobs created and workers' incomes reduced.-

Building materials sales tumble in first quarter

The consumption of building materials in the first quarter of this year decreased by 20-30 percent over the same period last year.

Cement sales during the three-month period was 10.94 million tonnes, only 19.54 percent of the annual plan.

Many cement producers adjusted their operations to keep inventory rates at 5.5 percent in March, lower than the normal rate of 10 percent.

Building glass sales also fell 40 percent compared to the same period last year, according to the vice chairman of the Viet Nam Association of Building Materials, Nguyen Quang Cung. The use of other building materials dropped between 60-75 percent, Cung said.

New Peaks property opens service in Da Nang

New Peaks Real Estate Service Joint-stock Co officially opened its MIINH Premier Business Circle brand in the central city yesterday.

New Peaks, a grade A real estate management firm in Viet Nam, aims to provide a full spectrum of real estate services from serviced offices, office leasing and property manager training to full property management consultancy.

Da Nang is home to many hotels and coastal resorts in Viet Nam, with 14 projects scheduled to be added to the already over saturated market. The central city's apartment projects sold well in the 2008-10 period, with about 180 apartments sold each quarter, but the figure reduced sharply in 2011 and 2012.

The apartment market has seen few sales, with 2,800 units still available.

Deep-water port welcomes Panamanian vessel

The Nghi Son deep-water port in the central province of Thanh Hoa has recently welcomed a Panamanian vessel of 45,000 DWT.

It is the second largest ship of its kind ever docked in the port.

The well-equipped port welcomed the vessel named Qi Yuan without resort to transshipment, which helped save cost and time of cargo handling.

Earlier in February, the port hailed Mega Grace ship from the Republic of Korea.

Nghi Son port strives to welcome one ship of up to 40,000 DWT and two ships of between 20,000 and 40,000 DWT a month. This will help it achieve its target of handling 2 million tonnes of cargo this year.

House projects brought down to earth

The Ministry of Construction has given permission to the developers of 12 housing projects in HCM City to convert them into low-income housing, according to the city Department of Construction.

The move is aimed at helping developers solve their inventory problem and enabling government workers, low-income people, and military personnel to acquire housing.

The Anh Tuan Housing Construction and Trading Ltd Co can now convert its apartment project with 520 units in Nha Be District into one for low-income people.

Lan Phuong Co can sell its 1,100 flats in a project in Thu Duc District as low-cost housing.

Transport Engineering Construction and Business Investment Company 584 had sought similar treatment for its 1,000-unit project in Binh Chanh District.

Commercial projects have to meet certain requirements to be eligible for the conversion: each apartment must be less than 70 square metres and priced at no more than VND15 million (US$715) per square metre.

The Ministry of Construction had issued a circular hoping to prop up the dormant housing market by offering incentives to promote housing for low-income earners.

But developers who have not begun construction will not be allowed to convert.

This is because the city had already approved 25 low-cost housing projects, 22 of them set for completion by 2015, meaning around 17,900 flats will be available by then.

Several housing projects to serve resettlement programmes will also be completed by 2015.

The construction department has made it clear that public money will not be used to buy housing, meaning social-housing developers will have to directly sign sales and lease agreements with buyers.

The city now has 1,321 housing projects, of which 131 are already complete.

They are worth over VND30 trillion ($1.44 billion), and include 14,500 apartments as well as 59,000sq.m of office space.

Industrial production looking good

Industrial production is expected to improve in the second quarter of this year as many domestic enterprises step up raw material imports for production, Ministry of Industry and Trade official Nguyen Tien Vy said at a meeting here yesterday.

According to the planning department director, inventory levels in the steel industry have fallen sharply and hovered at about 280,000 tonnes. He said many garment and textile enterprises had already received stable orders for the second quarter and were negotiating for the third.

In the first quarter, the index of industrial production (IIP) reached a low level of 4.9 per cent, compared with 5.9 per cent in the same period last year.

Vy said inventories began to increase in March, adding that the rate for manufacturing and processing industries was 16.5 per cent higher than for the same period last year.

Sectors with high inventories included electricity cable (62 per cent), metal components (35.5 per cent), motor vehicles (37.3 per cent), concrete, cement and plaster (28 per cent), and chemicals (27.4 per cent).

Vy attributed the reduction of industrial production to the 10-day-long Tet (Lunar New Year) holiday and to economic difficulties.

Viet Nam is expected to have a trade surplus of US$482 million in the first quarter of this year with a total export turnover of $29.68 billion, a rise of 19.7 per cent over the same period last year.

Ministry statistics showed that the surplus will mainly come from the foreign direct investment (FDI) sector. The domestic sector saw imports exceed exports by more than $2.6 billion while FDI businesses had a trade surplus of $3.1 billion.

Deputy Minister of Industry and Trade Tran Quoc Khanh said the FDI sector helped the export value of mobile phones and components hit $4.48 billion, and electronic products, $2.42 billion.

"Samsung Viet Nam's mobile phone exports have a great impact on the country's overall export situation. If this company's contribution is excluded, the first quarter will see an export growth rate of only 12.3 per cent," he added.

However, the nation's key export products slowed, with rice export value falling by 3.1 per cent and fishery products down 5.5 per cent.

Nguyen Minh Toai, director of southern Can Tho City's Department of Industry and Trade, said that a rice reserve of 1 million tonnes helped push up the rice price by VND100-300 per kilogram.

But many enterprises did not buy rice directly from farmers and profits mostly fell into the hands of intermediaries, he said, urging an increase in the floor rice price to be considered carefully to improve farmers' incomes.

Minister of Industry and Trade Vu Huy Hoang said the ministry would further assist enterprises with capital, administrative procedures and markets to help them overcome the hard time.

"The ministry will keep a close watch on market changes so that it can advise enterprises when to limit business risks," he said. "We will also take the necessary steps to assure goods reserves to prevent falls in export prices."

Hong urged organisations to strengthen promotional activities to boost consumption and reduce inventories.

"Drastic measures must be taken during the remainder of the year so that the year's target can be fulfilled, especially in the nation's major export markets in the US, the European Union and Japan haven't shown any clear signs of recovery," said Khanh.

Economic expert Nguyen Minh Phong said that domestic enterprises should enhance their competitiveness, especially raising the added value of their products.

High-quality workforce vital for business

Demand for high-quality human resources is rapidly increasing throughout Viet Nam, a trend expected to continue in the coming decade, say experts.

The forecast was made by the Center for Forecasting Manpower Needs and Labor Market Information HCMC and local job recruitment agencies.

Le Thi Kim Anh, Vice President of the Viet Nam Human Resource Club (VNHR) and Managing Director of Dynamic Consulting, said that most enterprises, especially domestic firms, faced many challenges in attracting employees that they actually need.

One major obstacle she cited was that the country's education system does not teach certain skills that are required in the context of global economic integration.

High-quality human resources were vital for any enterprise, particularly those who were expanding their business, she noted.

To deal with this problem, a number of enterprises have invested their own capital in re-training newly graduated students or developing various strategies to attract skilled employees from different sectors.

This in fact requires significant investment of both time and money. Compared with local companies, foreign-invested companies are more proactive in this domain as they are stronger in both capital and strategy.

A local HR director who declined to give his name emphasised the importance of devising a transparent policy on salaries and bonuses to attract the best talent.

In his view, improving the working environment includes not only hiring competent managers and offering competitive and fair remuneration – it also means empowering employees to take initiative and be creative.

Each enterprise should clearly define its development strategy and then recruit a competent and committed workforce, Kim Anh suggested.

One strategy that helps organisations manage the workforce effectively is IT solutions.

IBM, one of the leading IT solution providers, has recently launched Smarter Workforce solutions in the Viet Nam market, which aims to help businesses attract talent, understand employees and empower teams across departments.

Smarter Workforce solutions would help executives to easily identify, attract and retain the best people, develop their skills, cultivate new leaders and capitalise on collective intelligence by applying good behavioral practices, social and analytic tools to transform the way they work, said Luu Quoc Bao, Collaboration Solutions leader, IBM Viet Nam.

Global companies were also facing the problems of recruiting employees with the skills they need, said IBM ASEAN's HR Director Tho Lye Sam, and for many companies, retention was a major challenge.

"The new ways that people interact and today's workforce challenges make it critical for companies to rethink how they leverage and manage talent," she said.

By creating a smarter workforce, employers can resolve problems before they arise. According to a McKinsey Global Institute 2012 report, smart workforce tools can lead to a 25 per cent increase in the productivity of knowledge workers.

Today, IBM Smarter Workforce supports almost 9,000 organisations worldwide across a variety of industries, including financial services, pharmaceuticals, retail and consumer.

Tax cuts help publication sector grow

The publication sector recently announced after-tax profits of VND73 billion (US$3.5 million) for 2012, a year-on-year increase of 36 per cent.

The increase in profits was seen even when revenues declined 20 per cent over 2011 to about VND2.1 trillion ($100 million) last year, said the Publishing Department under the Ministry of Information and Communications.

"This is a good sign for the sector that its profit has increased. It means that publishing houses have improved their management skills and effectively use their advantages," said Chu Van Hoa, head of the department.

However, he also told Viet Nam News that one of reasons for increased profits last year was the cut in corporate tax, which now stood at about 10 per cent.

According to the department, despite the overall positive picture, it was only a few big businesses like the Kim Dong, Tre (Young) and Giao Duc (Education) publishing houses that did well.

"Most of the publishing houses last year faced challenges and difficulties. Some of them have not made any profit for many years in succession and have even suffered losses,"Hoa said.

She named the Van Hoa – Thong Tin (Culture – Information) and Thong Ke (Statistics) publishing houses as the loss making ones.

The department also reported a trade turnover of $23.4 million last year, up by 4 per cent over 2011.

The country imported 50 million books and 7.9 million magazines worth $19.8 million last year. Most of these books were in education, social science, natural science and economics.

The industry earned $3.6 million from exporting more than 365,000 books and 6.3 million newspapers and magazines, the department said.

Van Don aims to boost eco-sea tourism

The island district of Van Don in northern province of Quang Ninh has set its sights on attracting 620,000 tourists to the area this year and become a hub for eco-sea tourism in the north.

To prepare for this summer, the local authorities and travel agencies have spared no expense on advertising campaigns in addition to enhancing and developing tourism services to attract tourists.

According to Le Quang Thach, deputy chairman of Van Don District's People's Committee, the roads in the district leading to central beaches, fresh water and electricity supply have been upgraded.
The small islands' docks have been rebuilt while a larger-scale tourism port has been constructed in the southern port of Cai Rong Town.

The district has also invested in training for tourism staff and encouraged local tourism companies to organise domestic and overseas classes for their employees.

There are more than 1,200 rooms for rent in the district, 29 per cent of which reached 2-star standard. The district aims at increase on last year's tourist numbers of 540,000, up 13 per cent against 2011.

Firms must help break ‘circle of corruption'

Vietnamese firms are contributing to the vicious circle of administrative corruption in the country, but they also have the capacity to break it, participants agreed at a roundtable conference yesterday.

Tran Thi Lan Huong of the World Bank said that firms and citizens provided the incentive to keep the circle going by choosing the quickest way to solve difficulties created by officials – paying them.

In a survey commissioned by the Govenrment Inspectorate and the Anti-Corruption Steering Committee, and carried out with assistance from the World Bank and other institutions, about 44 per cent of respondent firms admitted to making unofficial payments.

About 59 per cent said they sometimes reacted to difficulties by giving gifts or money. More than 75 per cent admitted that they had paid up without being asked to do so.

"Corruption is becoming more complex. Fewer corruption cases being detected does not mean that there is less corruption but that corruption has become more sophisticated and harder to detect," Huong said.

Ngo Manh Hung, a Government Inspector, said many companies have not joined the fight against corruption because they were willing to pay up or wait for the Government to help.

Increasing transparency was crucial to fighting corruption effectively, participants of the roundtable agreed.

They also said companies and firm must become more active in fighting corruption by setting up a code of conduct for businesses, building campaigns to say no to corruption, organising events to improve knowledge of non-corrupt ways to resolve difficulties, reviewing and rotating positions that carry corruption risks, and participating in anti-corruption initiatives.

Another idea mooted at the meeting was for companies to co-operate and set up a system to fight corruption with the support of the Government.

This system has been successful in many countries including Malaysia, some participants noted.

The importance of fighting corruption was stressed at the meeting, with speakers saying it had serious negative impacts like making the country less competitive and less attractive to investors.

The survey was conducted over 18 months in 10 provinces across the country with the participation of more than 1,000 firms and companies and 2,600 citizens.

While the survey may not reflect the opinions of the whole population including citizens, firms and public officials, the results are significant and can be used to promote anti-corruption measures in the country.

The roundtable was organised by the Viet Nam Chamber of Commerce and Industry (VCCI) and the World Bank.

Viet Nam's tra fish exports to US see 10 per cent price hike

The export price of Vietnamese tra fish bound for the US has risen by US$0.3-0.4 per kilo, 10 per cent higher than in mid-March, when the US Department of Commerce levied a new range of anti-dumping duties on the staple.

According to deputy chairman of the Vietnamese Association of Seafood Exporters and Processors Duong Ngoc Minh, the new export prices are $3.75 a kilo for high-quality fish and $3.56 for the normal breed.

Export volume has dropped since mid-March following the DOC decision, but a recent market survey found that most US importers are running out of stock, so they had to bid higher in order to maintain supplies, Minh said.

Exports are expected to grow again next month, with prices forecast to increase up to $0.15 per kilo due to the US supply shortage and rising prices in other exporting countries.

"Tastes of Europe" on show at Food&Hotel Viet Nam 2013

The European Union (EU) will participate for the first time at Food&Hotel Viet Nam on April 24-26 in HCM City, with an exhibition stand that will host 20 EU producers and producers' associations from all over Europe.

A vast variety of European food and beverage products will be displayed, including ham, feta cheese, top-quality olive oil and wine from Spain, Portugal and Austria.

Visitors can attend a series of workshops, food tastings, presentations, cooking demonstrations and meetings with producers.

As negotiations for an EU-Viet Nam Free Trade Agreement continue, the programme demonstrates to Vietnamese producers and food professionals various EU quality schemes already in place that they can benefit from.

These schemes guarantee the quality and authenticity of food and beverage products and help consumers identify products of genuine quality.

Vietnamese producers can register their typical products in the EU and receive protection offered by these schemes, which could in turn facilitate the marketing of their products in international markets.

Ha Noi People's Committee seeks golf course reports

The Ha Noi People's Committee has asked relevant organisations to check on the planning, land use and construction of golf course projects in the city.

Reports must be sent to the committee within a month with proposals to ensure that planning complies with a Prime Minister's directive.

Soc Son, Skylake and Long Bien golf courses along with Ho Quan Son and Tan Vien resorts will all be subject to inspections.

Nghia Do residential area receives upgrade

he Ha Noi People's Committee has given permission for work to start on the upgrade of the Nghia Do residential quarter in Cau Giay District, estimated to cost about VND995 billion (US$47.380 million).

The project, jointly implemented by three companies, is expected to be finished by the first quarter of 2016 and will provide 515 apartments to replace buildings A and B that have badly degraded.

The project covers a total area of nearly 7,770 square metres and will provide accommodation for about 2,100 people.

Over half of the apartments will be designated for relocation while the investors will use the rest for sales to recover capital.

Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR

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