Vietnam-Cambodia trade rises sharply

Two-way trade between Vietnam and Cambodia in the first five months of this year reached over $1 billion, representing a year-on-year rise of 41 per cent.

During this period, Vietnam exported $891 million worth of goods to Cambodia, an increase of 139 per cent while Cambodia earned $124 million, compared to $120 million from its exports to Vietnam.

The Vietnam Trade Office in Cambodia said Vietnam’s exports to Cambodia rose sharply due to growing investment by Vietnamese companies in Cambodia, especially in the fields of rubber, farm produce processing and health care.

According to the Statistics Department under the Cambodian Ministry of Commerce, this growth was in line with the two governments’ goal of raising bilateral trade to $2 billion by 2011.

Export revenue soars in first six months
 
Total export revenue for the first six months of the year would reach US$41.5 billion, up 27.8 per cent against the same period last year, the Ministry of Planning and Investment said in a report submitted to the National Assembly's Economic Committee on Tuesday.

The increase nearly tripled the target of 10 per cent set earlier this year by the National Assembly (NA), the ministry stated in its report.

Export turnover of many products also increased sharply. Rubber topped the list with the growth rate of nearly 96 per cent.

Coffee followed with an 81 per cent increase while textiles and garments also surged more than 30 per cent during the period.

The ministry estimated that a rise in export volume and a sharp price hike on the world market had contributed to lifting the country's export turnover in the first half of the year by roughly $2.7 billion.

Exports to a number of large markets including the US, EU, Japan and China rose between 22-40 per cent, the ministry said.

Imports, meanwhile, were up 26.4 per cent compared with the same period last year, at $49 billion.

This puts the trade deficit for the first half of the year at around $7.5 billion, equal to 18 per cent of the total export value and higher than the ceiling rate of 16 per cent targeted by the NA earlier this year.

Industry insiders were concerned that the trade deficit would continue to rise due to increased imports, and urged ministries and agencies to take bolder measures to control the trade gap. The General Statistics Office reported last month's trade deficit increased by 17.3 per cent to $1.7 billion, the highest level since January this year.

Race to meet power demands

Vietnam will build nearly 100 power plants to meet its soaring power demand by the end of this century.

Electricity of Vietnam (EVN) said at the ongoing 2nd Vietnam Power Summit 2011, taking place on June 22-23, in response to critical energy security issues, Vietnam had commissioned more power projects to add electricity to the grid in the next few years and had rolled-out new initiatives toward liberalising the power sector with new independent power projects.

Over the next 10 years, Vietnam plans to build 95 power plants with an estimated investment of $39.58 billion, whose total capacity would be 49,044 megawatts, of which a large part of investment capital will be sourced from foreign investors. This will be aimed to meet the growth rate of 12 per cent per year in power demand by 2020.

At present, Vietnam has 38 power projects which are under construction, of which 26 belong to EVN.

EVN said it would need over $3 billion each year to invest into the plants and power grids.

It is expected that the country’s power consumption by 2015 will grow by 15 per cent, while the power supply will grow by 14.5 per cent.

Also by late 2015, Vietnam’s total power capacity will be 48,497MW.

With rapid industrialisation and economic growth, Vietnam’s power infrastructure is now incapable of meeting increasing demand for electricity.

At the seminar, key questions discussed at the event include challenges faced by independent power producers, investors and financiers in developing power projects in Vietnam, how to ensure financing and investment flows meet these challenges, and the changing expectations, issues and challenges of independent power producers and international financiers

The two-day networking summit brings together key Vietnamese regulators, local power players, international power producers, developers and operators, multilateral agencies, financiers, investors, legal experts and consultants.

The summit is organised by the Ministry of Foreign Affairs’ The World and Vietnam Newspaper and Euromoney Seminars, which is a division of Euromoney Institutional Investor PLC.

Car market has room to zoom ahead

With modest car ownership rates, Vietnam’s car market offers multiple opportunities for development.

There were 1.6 million automobiles in circulation in Vietnam as of December 31, 2010, up 110,000 units or 7.5 per cent against 2009, according to Ministry of Industry and Trade (MoIT) figures. Automobile growth in Vietnam averaged 12.8 per cent, per year during 2001-2010.

Current car ownership of 18.7 units per 1,000 residents was low and tantamount to Thailand’s level 15 years ago, said deputy head of MoIT’s Research Institute for Industry Policy and Strategy Pham Van Liem.

Also according to institute appraisals, locally-made passenger cars and trucks have a leading competitive edge in the domestic market, following by less than nine-seater vehicles. Sales of competitively priced vehicles from four to nine-seats sharply rose in the past years and this was an important and potential market segment to car assemblers and manufacturers.

However, to boost the local industry development and encourage car manufacturers to raise the localisation rate the Vietnamese government should present concrete, inter-connected and long-term development policies towards the car industry, said Ford Vietnam general director Laurent Charpentier.

Large local car manufacturer Truong Hai Auto Joint Stock Company’s general director Tran Ba Duong said auto policies’ constant changes had driven local auto manufacturers into a spin.

Duong said more tax incentives would be needed to spur auto supporting industry development.

“If the tax policies are more stable, more investors will jump into the car industry, giving premises to heighten the localisation rate and making local car manufacturers more engaged in the global value chain,” Duong said.

The MoIT figures show that around 95 per cent of over 10-seater vehicles and 77 per cent of trucks in Vietnam are made by domestic and foreign-invested auto firms. Figures for locally-made less than nine seater vehicles and specialised vehicles were 64 per cent and less than 10 per cent, respectively.

For instance, in 2010 Vietnam Automobile Manufacturers Association members turned out 112,224 vehicles against an imported volume of 53,841 vehicles. Corresponding figures in the first five months of 2011 were 44,966 vehicles and 26,900 vehicles.

Imported car growth averaged 20.6 per cent per year in volume and 23.9 per cent, per year in value during 2001-2010, nearly double growth in locally-made cars in the same period (around 11.4 per cent, per year).

Imports of less than nine-seater vehicles shot up the strongest averaging 51.6 per cent, per year while that of trucks rose slightly 2.9 per cent and of more than 10 seater vehicles 13 per cent, per year.

Giant cabinet factory opens its doors

Hawee manufacturing & Trade Company (Hawee) has just held the opening ceremony of Hawee cabinet factory, which is considered the largest modern cabinet factory in Vietnam.

Located at Bac Ninh province’s Son Industrial Park, the Hawee cabinet factory is one of the first cabinet factories in Vietnam was equipped with two line punching machines, cutting and bending machine of the German-backed Trumpf.

With completely modern machine system, after installed, 100 per cent cabinets are tested before being released. Electrical wire making machines up to 30000A will ensure all cut-off devices are checked.

Duong Xuan De, director of Hawee, said: “After seven years of development, Hawee is now among the leading electrical contractors in Vietnam. However, on the way to development, one of the problems affecting the progress and quality of the project is providing special products such as cabinets, ladder cables, trays and wind conditioning tunnels for particular projects.”

“Hawee’s management board decided to build its own manufacturer of the above products so as to reach success and provide the market with the best products, the fastest delivery schedule and the best service.”

Japanese funds sought for support industries

A seminar was held in Hanoi on June 22 to discuss measures to attract Japanese small and medium-sized enterprises (SMEs) to invest in developing supporting industries in Vietnam.

Co-organised by the Ministry of Planning and Investment (MPI) and Japan International Cooperation Agency (JICA), the seminar took place in the context where support industry development in Vietnam is attracting interest among domestic and foreign investors, especially those from Japan and the Republic of Korea.

Speaking at the event, MPI Deputy Minister Dang Huy Dong said that Vietnam planned to build a modern and industrialised economy and focused on calling for investment in developing hi-tech industries.

The Vietnamese government will develop SMEs, improve business competitiveness and increase added value for products towards joining the world’s high-value product chain while boosting the development of support industries, he said.

According to Ryoichi Nakagawa, director of the Investment Support Centre of Japan, Vietnam is a potential market with low labour costs and more business opportunities from free trade agreements.

However, he said that Vietnam’s foreign investment encouragement policies should pay more attention to supporting industries. The country also needs to attach importance to policies on developing industrial clusters.

According to the MPI, Vietnam currently has 15 economic zones and over 260 industrial zones (IZs). Of the IZs, 173 have become operational.

Procedures trouble Korean firms
 
Customs and tax-related problems fueled a meeting between South Korean business representatives and Vietnamese authorities held here yesterday by the Government Office's Department of Administrative Procedures Reform to gather opinions from the S. Korean business community.

"Viet Nam has simplified about half of its administrative procedures so far and is determined to complete the process now," said the department's deputy director, Ngo Hai Phan.

The Korean Chamber of Commerce and Industry (Korcham) would collect opinions from Korean firms so that the Ministry of Finance and other concerned ministries and agencies might study and resolve the issues raised, Phan said.

The general director of automobile manufacturer GM Daewoo Viet Nam, Kim Jung In, told the meeting that the biggest obstacle to doing business in Viet Nam were import and export procedures.

"Many of our papers have never been satisfactorily processed," Kim said.

In addition, customs officials required detailed lists of components and their rate in finished products.

"This is very difficult to implement because these lists are considered the proprietary secrets of our business," said the general director of bedding importer Everpia Viet Nam, Lee Jae Eun.

Lee also suggested the use of local letters of credit to speed the processing of imports. These were successfully utilised in South Korea and would help reduce administrative procedures and attract more investment, he said.

However, since the application of a local letter of credit would require the co-ordination of the entire banking system, Viet Nam would need time to study and implement such a process, responded a Ministry of Finance representative.

Another issue raised at the meeting was that different codes were applied to the same imported products. However, an official of the General Department of Customs said, "If businesses see customs officials applying two different codes for the same product, they should report immediately to the authorities."

Lee also voiced concerns about tax payments and the application of tax incentives for foreign investors.

"We have not even received promised tax incentives in some cases, so the company has had to increase product prices, which in turn has affected Viet Nam's export competitiveness," Lee said.

"We have also been able to enjoy tax refunds two months after completing all paper work, while interest rates are rising."

Lee proposed tax declarations on a quarterly basis rather than monthly to reduce administrative burdens on investors.

According to Korcham, around 2,500 Korean enterprises worth a combined $23 billion are operating in Viet Nam, of which 70 per cent are small- and medium-sized enterprises.

Up to 60 per cent of the questions raised by Korean businesses about administrative procedures were due to their inability to master all of the regulations, but the other 40 per cent have encountered real shortcomings with procedures applied in Viet Nam, Deputy Minister of Finance Do Hoang Anh Tuan told an earlier meeting.

Deepwater container ports key to enhancing marine economy

Developing deep-water and container seaports is key to spurring on the development of Viet Nam's marine economy.

Prime Minister Nguyen Tan Dung called on the Ministry of Transport (MoT), in conjunction with the Viet Nam Marine Department, to make every effort in building deep-water seaports, complete with effective centres for cargo distribution and logistics services, in Lach Huyen-Hai Phong, Cai Mep and Ben Dinh-Vung Tau during the next five years in order to help support economic development.

Over the years, investment in deep-water projects has included Build-Operate-Transfer (BOT), Build-Transfer and Public-Private Partnership (PPP), according to the Ministry of Transport.

Do Thang Hai, director of the Trade Promotion Agency, said that, in order to add to the country's GDP, Viet Nam had to expand its aquaculture and fishery exploitation capacity with the view of generating quality products at competitive prices through sustainable environmental development.

Hai emphasised the necessity for hosting domestic and international trade fairs, exhibitions and market survey in order to help develop marine economy.

According to the Viet Nam Marine Department, the country is currently home to 266 large and small-scale seaports, only able to handle 100 million tonnes of cargo and no large vessels.

The volume of cargo clearance through seaports reached 259 million tonnes, of which 6.52 million tonnes were container goods, 51 million tonnes liquid cargo and 29 million tonnes of goods in transit, last year.

Such figures reveal that planning is outdated compared to the fast economic development of the country, causing congestion and reducing the competitive edge of domestic import-export which in turn discourages foreign investment.

Thai Nguyen zones off national tourist site

Deputy Prime Minister Hoang Trung Hai has highlighted a plan to develop the Nui Coc Lake national tourism area in the northern mountainous province of Thai Nguyen until 2020 with a vision to 2030.

Addressing the announcement ceremony on June 25, Deputy PM Hai said that the plan opens a new period of development for Thai Nguyen in the next decade and will help the province tap its potential for tourism development and boost its economic restructuring.

Hai asked the province and investors to take measures to protect the environment and surroundings of the area in order to turn the Nui Coc Lake tourist site into a key national tourism area.

According to the plan, the 19,000 ha Nui Coc Lake tourism area will have a tourism, sport and trade service area in the northeast of the lake, recreational area, a goft course, a eco-tourism site in the southwest of the lake, a new administrative area, and an urban and tourism service area.

Vincom plunge leads market reversal

The VN-Index retreated by 0.7 per cent yesterday following a strong rebound on Tuesday, closing yesterday's trades on the HCM City Stock Exchange at 439.63 points.

The value of trades rose by 11 per cent over the previous session to VND647 billion (US$31.4 million), but the overall volume of trades fell 16 per cent to just 24.9 million shares, the lowest level in two weeks.

Decliners outnumbered advancers by 126-80.

Blue chips such as Vietinbank (CTG), property developer Hoang Anh Gia Lai (HAG), steel producer Hoa Phat Group (HPG) and software giant FPT all rose.

Meanwhile, insurer Bao Viet Holdings (BVH) dropped by 1.2 per cent and Phu My Fertiliser (DPM) slumped 0.3 per cent, helping drag down the VN-Index. Investors dumped shares of real estate developer Vincom (VIC), which bottomed out after five consecutive sessions last week in which they hit their ceiling prices.

VIC denied issuing any information last week that affected its share price.

"The buys of our shares stemmed from actual demand on the stock market and were beyond our control," the company said in a statement.

Saigon Securities Inc (SSI), with 1.55 million shares changing hands, was the most-active share on the southern bourse, closing unchanged at VND19,000 ($0.90) a share.

On the Ha Noi Stock Exchange, the HNX-Index lost another 0.83 per cent to close at 76.41 points. The value of the day's trades rose 12 per cent to VND468.6 billion ($22.7 million) on a volume of 38.2 million shares. Losers edged gainers by 131-122.

VNDirect Securities (VND), which had climbed 3.5 per cent the previous day to VND11,900 ($0.60) per share, was the most-active share nationwide with almost 4 million changing hands.

"Hot shares on the northern bourse, despite witnessing great profit-taking, finally ended the session in green," said Stoxplus Financial Media Co analyst Dang Anh. "Corporate investors, instead of waiting for further economic signals, may likely sell off in the sessions at the end of this week as the time for making net asset valuations is approaching."

Foreign investors continued to buy shares worth a net of VND27.2 billion ($1.3 million) in HCM City but sold a net of VND3 billion ($145,600) worth of shares on the northern bourse.

Thailand hosts rice conferences

Two events were held in Thailand this week to help Vietnamese and Thai rice growers boost crops and develop international trade.

Yesterday, Viet Nam attended the annual World Rice Standard Summit in Nakhon Sawan. It was joined by the world's largest rice-trading nations.

Earlier in the week, Viet Nam sought international trade partners at Thailand's National Rice Conference held in Bangkok.

Nguyen Thanh Hung, Commercial Counsellor at the Vietnamese Embassy in Thailand, said Viet Nam's rice exports had increased by about 20 per cent in the first five months of 2011 and were expected to reach 7 million tonnes for the year.

Capital approves infrastructure deal

The Ha Noi People's Committee recently approved the infrastructure development of a 9.8ha-land lot in Thuy Lam Commune of Dong Anh District.

The VND208 million (US$10,000) project, with investment from the District People's Committee, will include the development of water treatment and supply systems, electricity and lighting systems as well as a fire prevention system.

On completion, the project is hoped to create a new rural area with comprehensive infrastructure conditions for effectively exploiting local land and developing local socio-economy.

Firms in VN, China seek trade boom

Vietnamese businesses and their counterparts in Zhengzhou in China's Henan province sought ways to promote bilateral exchanges at a seminar here on Tuesday.

It was organised by the Viet Nam Chamber of Commerce and Industry and the Zhengzhou Bureau of Commerce.

Hu Suojin, Economic and Trade Counsellor of the Chinese Embassy in Viet Nam, said that the embassy would do its utmost to foster ties.

Pham Quang Thinh, Deputy Director of the International Relations Department of the chamber, said it would serve as a bridge for Chinese businesses to expand investment and co-operation with Vietnamese partners.

The event promoted the 17th Zhengzhou Commodity Fair and Consumer Goods Expo, which will feature commodities from throughout Southeast Asia.

Indochina Plaza Ha Noi set to open

A new Indochina Plaza shopping centre will open in Ha Noi during the first quarter of next year.

The 18,000-sq.m plaza will consist of a three-tower residential, retail and office complex situated on Xuan Thuy Street in Cau Giay District.

Development will be conducted by Indochina Land in partnership with a world-class team of international designers, led by renowned architecture firms Gravity Partnership from Hong Kong, Benwood Studio Shanghai and PTW from Australia.

Laos, VN boost rubber co-operation

Viet Nam's southern province of Binh Duong and the Champasak province of Laos have decided to step up co-operation in planting rubber trees during the next five years.

This was part of a nine-point agreement signed by the two provinces on Tuesday during a visit to Viet Nam by Champasak Party Secretary and Governor, Sonsay Siphandone, who is also a member of the Lao People's Revolutionary Party Central Committee.

At the talks, participants reviewed a project that led to the planting of 10,000ha of rubber trees in Laos between 2006 and 2010, 4,100ha of which were located in Champasak province.

Dragon Capital's net assets lose value

Dragon Capital, one of the leading investment groups in Viet Nam, has reported that net asset values in five of its six funds reached US$623 million at the end of May, a decline of $85.5 million from April's figures.

The calculation included the securities funds Viet Nam Enterprise Investments Limited (VEIL) and Viet Nam Growth Fund (VGF), as well as the bond funds Viet Nam Debt Fund (VDeF) A and B and the Viet Nam Property Fund (VPF).

The Viet Nam Resources Investments (VRI) fund has not reported its net asset value (NAV) for May.

Excluding VRI, the five funds run by Dragon Capital have lost a total of $123 million in value in the first five months of this year.

VEIL, which invests in listed and unlisted companies, reported its NAV decreased to about $339 million at the end of May, a decline of $52.5 million from April. The decline tracked a 15.8-per-cent slump of the VN-Index during the month.

VEIL's portfolio, which largely focuses on blue chips, declined substantially when diversified financials Masan Group and Hoang Anh Gia Lai Co plunged by 24.6 per cent, followed by shares in the real estate sector, which declined by 11.4 per cent during the month; banking shares, which saw a loss of 4.5 per cent; and food and beverage stocks, which fell by 6.3 per cent on average during May.

VEIL's NAV rose to $365 million as of June 9, however, tracking recent gains on the stock market.

VGF, which primarily invests in listed securities, also saw its NAV decrease by over 12 per cent to about $180 million. VGF's NAV had risen again to $197 million as of June 9.

The NAV of property fund VPF exceeded over $71.5 million on May 31, a decrease of just 0.34 per cent from April, mostly due to the poor performance of listed real estate companies. However, VPF earned a return of 103 per cent by selling 1.4 million shares in construction contractor CotecCons.

Dragon Capital predicted improved economic conditions and fund performance in the final quarter of this year.