Ministry proposes coffee board

The Ministry of Industry and Trade has proposed a National Coffee Co-ordination Board aimed at assisting Government advisors in issuing and implementing policies related to the coffee industry.

According to the ministry, the new board would additionally be responsible for regulating domestic and foreign market prices as well as export activities.

Until recently, despite having become the world's largest Robusta exporter, the Vietnamese coffee industry had been operating disjointedly, firms doing trade on individual basis instead of in a unified manner.

With foreign businesses expanding into the Vietnamese market, domestic companies have come under increased pressure in buying raw material from local farmers.

Establishing the new board comes at a time when both the local coffee industry and exporters are in need of a new developmental boost.

A Ministry of Agriculture and Rural Development report revealed that, in July, only 65,000 tonnes of coffee, valued at US$145 million, were exported, a month-on-month decline of 50,000 tonnes in volume and $105 million in value.

Experts have attributed decreasing volumes to small stockpiles.

Nguyen Nam Hai, general secretary of the Viet Nam Coffee Exporters' Club, said that small stockpiles had caused companies much trouble as well as delays in exports.

Compared to the first months of this year, current coffee export volumes had declined by 50 per cent, Hai added.

During the first seven months, coffee exports were reported to have hit $2 billion on 930,000 tonnes, an increase of 24 per cent in volume and 92.6 per cent in value thanks to price hikes.

Currently, average export prices stand at nearly $2,200 per tonne, a year-on-year increase of 57 per cent.

This year, insiders have predicted that the industry was capable of producing 1.38-1.44 million tonnes of coffee, an increase of around 30,000 tonnes compared to the Viet Nam Coffee Association forecast.

No further rate cuts in sight

With the year-on-year inflation rate topping 22 percent in July, there are unlikely to be any more rate cuts this year.

The rise in the consumer price index (CPI) has started gathering pace again after two months of decline, with prices rising by 1.17 percent month on month in July, taking the seven-month figure to 14.6 percent.

This, along with the unfavorable factors for price stabilization and inflation control that usually emerge by year-end, has cast a shadow on the inflation fight.

As members from the National Assembly's Economic Committee have warned, any loosening of monetary policy, signaled by lowered interest rates due to strong demand for funds and lower-than-expected public spending cuts, will hinder the efforts to combat inflation.

Being aware of the trajectory of the inflation, the government recently increased its inflation target for this year to 17-18 percent.

But it would be “very difficult” to slow inflation to 17 percent for this year, Ha Van Hien, head of the Economic Committee, told the NA opening session in Hanoi July 21.

The State Bank of Vietnam on July 4 reduced its repurchase rate to 14 percent from 15 percent after a spate of increases since November, leading the International Monetary Fund to say the cut may confuse investors.

“We are a bit concerned that the cut in rates will confuse the market about the government’s commitment to sustaining the stabilization effort under Resolution 11,” Bloomberg quoted Benedict Bingham, the IMF’s senior resident representative in Vietnam, as saying.

Resolution 11 refers to a list of measures for tightening monetary and fiscal policies this year.

“A strong commitment to sustaining this effort is essential to re-establishing confidence in the dong and restoring macroeconomic stability more generally,” Bingham said.

“The markets were very surprised by the easing,” Bloomberg quoted Prakriti Sofat, a Singapore-based economist at Barclays Capital, as saying before the release. “It’s too early to go into a full-blown easing cycle given that inflation and inflation expectations remain elevated.”

The inter-bank interest rate for six months has been raised to 16.5 percent, while for three months it is around 14.5 percent, indicating high demand for long-term funds.

Thang Long Securities Joint Stock Co's has forecast an increase in the overnight inter-bank interest rate in dong from 12-12.5 percent to 13-13.5 percent at the end of this month.

The State Bank of Vietnam reportedly withdrew around VND9 trillion ($438 million) between July 11 to 15 as a result of which inter-bank rates are soon expected to rise.

With the aggressive competition between banks to attract deposits pushing up interest rates, many are depending on the inter-bank market for liquidity, driving up rates.

Deputy PM orders speeding up on competitive power market project  

Deputy Prime Minister Hoang Trung Hai has asked concerned parties to set up investment and operation plans to put the competitive power market in use at the beginning of next year.
 
The deputy PM ordered the Ministry of Industry and Trade to cooperate with the Electricity of Vietnam (EVN) to set up minimum investment plan for information technology infrastructure and personnel training for the operation.

EVN, the country’s power monopoly, is allowed to speed up on several projects that serve the opening of the market.

The group can consult the Prime Minister if it faces issues beyond its authority.

Mr. Sang asked EVN to form power generation corporations in the third quarter this year and experiment the information technology by the end of November 2011.

The company should continue its cooperation with the World Bank to have the bank subsidize parts of the cost once the market power prices are implemented, he said.

He said a fund for stabilizing power prices would be set up if necessary.

The deputy PM also asked the Ministry of Industry and Trade to plan for the establishment of a national power price adjustment and big power units to join the market.

The development of competitive power market is Vietnam’s long-term strategy which was legalized in the 2004 Law of Electricity and detailed in a Prime Minister’s Decision in 2006, according to a statement on the government website early this month.
 
Banks post whopping profits despite tight money

Several commercial banks have reported impressive second quarter profits despite the tight money situation.

Vietnam Joint Stock Commercial Bank for Industry and Trade, or Viettinbank, has achieved a pre-tax profit of VND2.59 trillion (US$129.5 million), taking profit for the first half to VND3.62 trillion, a 68 percent rise.

The Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank)’s H1 profit rose by 8.2 percent year on year to VND3 trillion.

Vietnam Export Import Bank (Eximbank) and Saigon Thuong Tin Commercial Bank (Sacombank) announced profits of VND1.69 trillion and VND1.49 trillion, 78.9 percent and 72 percent higher year on year.

Navibank posted H1 profit of VND127.56 billion, up 72 percent year on year.

Military Bank, Dai A Bank, and An Binh Bank too have announced big profits.

Nguyen Thi Ngoc Van, deputy CEO of Ho Chi Minh-based Dong A Bank, said most of the banks’ profits were from interest income.

The CEO of another bank, who wished to remain unnamed, said interest income accounted for 80 percent of his bank’s VND1-trillion profit in the first half.

Nguoi Lao Dong newspaper quoted an economist as saying that the 20 percent ceiling on credit growth only affects small banks with low liquidity, but is actually advantageous to big ones.
 
US company to design 79-storey tower in Hanoi

The US architectural firm Pelli Clarke Pelli Architects has won a US$30 million contract for investment planning and technical design services of a 79-storey commercial building invested by PetroVietnam Construction Joint-stock Corporation.

The US contractor will have six months to January 2012 to plan investment and four months to May 2012 to draft architectural plans for the $600 million project in order to start construction at the end of the first quarter of 2012.

The project, called “Vietnam Oil and Gas Tower,” will have first-class offices and apartments, a five-star hotel and a shopping centre alongside a museum, and an information centre of the oil and gas industry.

It is a complex aimed at being friendly to the environment and resistant to earthquakes measuring six degrees on the Richter scale, higher than national standards.

Pelli Clarke Pelli Architects was the architect of the Twin Towers in Malaysia. Its entry with a dazzling flame icon won a contest run in March to find the best design for the project.

Goods, services sales value up 5% this year
 
The total retail sales value of goods and services increased by only 4.7 per cent to VND1,065.8 trillion (US$51.7 billion) during the first seven months of this year, according to a General Statistics Office (GSO) report.

Recent declining growth rates have been amongst the lowest recently experienced with sales value increasing just 8.7 per cent in the first three months, 7.7 per cent in the first four, 6.4 per cent in the first five and 5.7 per cent in the first six, according to statistics.

Purchasing power has gradually reduced due to consecutive consumer price index (CPI) surges during recent months.

Annual inflation hit 12.17 per cent in the first month of this year, 12.31 per cent in the first two months, 13.89 per cent in first three, 13.95 per cent in first four, 19.78 per cent in first five, 20.82 per cent in first six and 22.16 per cent in the first seven.

Vu Manh Ha, an expert at the GSO's internal economics department, said that people had tightened their purse-strings due to high inflation, only spending money on essential items such as rent, food, fruit, vegetables, electricity, tap water and fuel, all of which have experienced price hikes of their own.

During the first seven months, rice prices jumped by 27.88 per cent, food prices by 36.83 per cent while the group of rent, electricity, tap water and fuel prices shot up by 22.75 per cent in comparison with the same period of last year.

Although consumption was expected to recover by the end of this year due to seasonal demand, the retail sales value growth rate would remain largely the same as now, Ha said.

Malaysia interested in HCM City’s retail market

Malaysia will enter Ho Chi Minh City’s retail market in the coming time with the opening of hypermarkets which will be joined by almost all leading retailers of this country.

The information was released by Malaysian Minister of Domestic Trade, Cooperatives and Consumerism Dato’ Sri Ismail Sabri bin Yaakob at a meeting with Chairman of the Ho Chi Minh City People’s Committee Le Hoang Quan on July 26.

Sabri bin Yaakob highly valued the rapid development and great potential of Ho Chi Minh City, saying that his visit aimed to seek cooperation opportunities for Malaysian investors, especially retailers.

At present, Malaysia’s WCT Group is implementing the US$600 million shopping mall project Platinum Plaza. Covering an area of 9 ha in Binh Hung Commune, Binh Chanh District, the complex will include a trade centre, entertainment and residential areas.

WCT also plans to join a Vietnamese partner in another complex of trade centre and residential areas with a total investment of $200 million.

The Malaysian minister expressed his wish that the city will create favorable conditions for the implementation of these projects.

According to the HCM City mayor, Malaysia is one of the city’s leading trade and investment partners. In late 2010, Malaysia was named on the list of the top three largest investors in HCM City with $6 billion.

There are many cooperation opportunities between HCM City and Malaysia’s localities and businesses, especially in import-export, trade, investment and tourism, Quan said.

He affirmed that the city is ready to create conditions and solve difficulties for Malaysian investors.

Vietnam 2011 bad debt could rise to 5 pct of loans

Bad debt in Vietnam's banking system could rise to 5 percent of total loans by the end of this year under a worst-case scenario, a state-run newspaper on Wednesday quoted a central banker as saying.

That level would be nearly double the ratio seen in mid-June.

Deputy Governor Nguyen Van Binh gave the projection in a story in the Vietnam Economic Times newspaper.

Non-performing loans as of June 10 rose to 2.72 percent of outstanding loans from 2.17 percent at the end of 2010, state-run media quoted central bank governor Nguyen Van Giau as saying late last month.

Vietnamese businesses have been facing high interest rates and higher input costs, which could force delays in many projects, the National Assembly's Economic Committee said in a report last week.

Giau now heads that committee, following a vote by the parliament last weekend.

Banks have been charging between 18-20 percent for medium- and long-term dong loans, making it difficult for businesses to operate, business executives said.

"Production and business, if facing delays for a prolonged period, could lead to the risk of raising bad debts in banks in the last months of 2011 and in 2012," the parliament report said.

Exporters of coffee and rice, Vietnam's top agricultural cash earners, have been reluctant to take loans to stockpile the commodities even as demand is projected to rise, traders said.

Rice traders said the Vietnam Food Association postponed a plan to stockpile 1 million tonnes of milled rice from the summer-autumn crop partly because member companies have said they could not afford to make high interest payments on loans.

Initially they had scheduled to start buying paddy from July 15 and keep the grain off the market for three months to support prices at the harvest peak.

The Vietnamese government plans to keep the annual credit growth of the banking sector below 20 percent this year, following a rise of 27.65 percent in 2010.

Electronic imports taking over
 
Domestic electronics products have gradually lost their market share due to their low quality and high price compared with imported goods, experts have said.

"Domestic electronics products used to account for 70-80 per cent of sales at Thien Hoa Electronics Supermarket, but now they only account for half," said Bui Tan Cuong, director of the supermarket.

Duong Thuy, a representative of Dienmay.com Supermarket, said most electronics products sold at her supermarket were imported.

The same situation is occurring at lots of large electronics supermarkets such as Nguyen Kim, Cho Lon and Ideas.

In the 1990s, Vietnamese electronics enterprises thrived, providing products such as radio cassettes and televisions for domestic demand, said director of an electronics joint stock company, who wished to remain anonymous.

Made-in-Viet Nam products had their heyday during that decade, with high quality, good distribution and effective customer care systems, he said.

Then the Goverment allowed foreign electronics firms to enter the Vietnamese market, including Sony, Panasonic and Toshiba, with the expectation of developing the domestic electronics industry.

However, the Government did not specify that foreign firms would have to commit to developing the support industry and increasing domestically produced electronics components, experts said.

Over the past 10 years, a majority of foreign-invested firms have failed to train local designers, according to the Viet Nam Electronic Industries Association.

They had only trained workers to manage production lines, assemble products and carry out customer care services, the association said.

Meanwhile, under trade agreements in the region and the world, Viet Nam reduced the import tax on electronics products, making it impossible for domestic products to compete.

Relevant authorities were looking at building a development strategy for the domestic electronics industry, the association said.

Do Quang Hung, the association chairman, said Vietnamese firms should focus on developing their key electronics products in order to compete with their foreign counterparts.

They should form strategic partnerships in advanced countries to co-operate in production, investment and technology, Hung said.

Industrial zones need to integrate
 
Viet Nam needs to enhance the quality of industrial parks and zones to make them more deeply integrated into global production chains, economists told a workshop held here yesterday.

"It needs to build more specific policies for industrial zones in line with the country's ongoing integration process into the global economy," said Prof Nicola D. Coniglio from the University of Bari in Italy.

Participants at the workshop, held jointly by the Central Institute for Economic Management (CIEM) and the UN Industrial Development Organisation (UNIDO), agreed on the need for support industries to be more effectively developed in these zones.

"If we could build an effective support industry system, it would help Vietnamese enterprises reduce imports and reduce stress on balance of payments while enhancing competitiveness," said Deputy Minister of Planning and Investment Nguyen Van Trung.

Dr Tran Kim Hao from CIEM said setting up industrial parks and zones was fundamental to attracting investment and new technologies.

"Industrial parks and processing zones add an important dynamic to Viet Nam's economic development," said Hao, noting that they employ about 15 million workers.

The scale of the nation's 260 industrial parks remained small, however, with about half under 200ha.

"These are affected by outdated organisational models and technology and limited organisational efficiency, as well as a lack of connection between enterprises within the same industrial park," Hao said.

Sacomreal forges supply deal with eight partners

Sai Gon Thuong Tin Real Estate Joint Stock Company, better known as Sacomreal, on Tuesday cut a deal with eight local building materials companies in a move to establish a supply chain for its residential projects in the years to come.

Dang Hong Anh, board chairman of Sacomreal, said upon the signing that the cooperation would offer his company an edge over other competitors in the local residential market because it would enable Sacomreal to access quality materials and services at lower prices.

The agreement was signed in HCMC with INAX Vietnam Sanitary Ware, Pomina Steel, Dong Tam, DP, Phan Vu, Le Phan, Toan Thinh Phat and Bon Phuong, who pledged to provide products and services such as design, executing the work, supervising construction and building materials to Sacomreal’s projects.

Anh said the reduced input cost might help Sacomreal lower the selling price of its housing products by between 10% and 20% compared with other projects in the same location.

As planned, those companies will start providing their products and services to Sacomreal’s condo and mix-used projects such as Belleza in District 7, Carillon in Tan Binh District and Sacomreal-Hung Vuong in District 6 in HCMC this year.

Besides, Sacomreal is planning several residential projects in the coming time, including the Arista Villas project in HCMC’s Thu Duc District, which will be launched into the market in the fourth quarter of this year.

Early this month, Sacomreal was allocated a 10-hectare land site in District 7 for developing a residential project that comprises of condos, villas and row houses, and a section for a school and other serviced facilities. As planned, the residential development will get off the ground in the third quarter of this year.
 
Cheating gas firms leave industry fuming

The Viet Nam Gas Association has urged HCM City authorities to throw the book at retail cooking-gas suppliers who counterfeit brand names and cheat customers on quantity.

The city Market Watch on May 23 seized four trucks carrying 103 gas cylinders with Saigon Petro, Elf and Petrolimex brand names but without any proof of origin. They were found to belong to Mien Dong Co Ltd based in the Central Highlands Province of Lam Dong.

Earlier, in February, the police found nearly 2,000 cylinders at a storage depot belonging to Dong Phuong Trading Company in the city's Hoc Mon District.

They said all of them carried counterfeit names and did not have the full quantity of gas.

If a 12-kilogramme cylinder is a kilogramme underweight, consumers are cheated out of VND30,000.

The Viet Nam Gas Association said both Mien Dong and Dong Phuong had been operating without licences for a long time, while their use of others' brand names was a violation of trademark.

After receiving the letter from the association last week, city People's Committee vice chairwoman Nguyen Thi Hong ordered the Market Watch to monitor the case and report back at the earliest.

About 30 per cent of gas cylinders sold in the city were fake since oversight was lax and consumers lacked awareness, the association said.

Automobile imports plunge with tighter regulations, high tax

The number of automobiles imported into Viet Nam has dropped precipitously since the implementation of stricter regulations and higher taxes on auto imports, according to the General Department of Customs.

The number of cars imported has fallen by about 50 per cent in the past month, from 3,130 in the first half of June to just 1,500 in the same period of July, the department said.

Under Ministry of Industry and Trade Circular No 20, importers have to document that they are authorised sales agents by providing certificates or letters of authority from the vehicle manufacturer.

"With the implementation of the new regulation, unauthorised dealers will face obstacles in importing cars, and this will directly affect domestic sales," said Ford Thang Long Joint Stock Co sales consultant Chu Ngoc Hai.

Unauthorised dealers might have to abandon the market to domestic automobile assemblers since those enterprises were able to meet permit conditions, said Tay Bac Auto Joint Stock Co chief executive officer Ho Khac Hung.

A 20-per-cent rise increase in automobile registration taxes, effective on September 1, was also having a negative impact on auto imports.

A number of other factors were affecting the auto market, including tight credit and high interest rates, said Thien An Phuc Co director Nguyen Tuan.

KIS Vietnam says will lure more Korean investors

Korea Investment & Securities Co. said at the opening of its subsidiary KIS Vietnam Securities Corporation’s head-office in HCMC on Tuesday that the stock broker would serve as a go-between for Vietnamese companies thirsty of capital and Korean investors.

Sang-Ho Ryu, CEO and president of Korea Investment & Securities Co., said that in the coming time, besides developing brokerage and consulting services, KIS Vietnam would introduce more Vietnamese companies to Korean investors.

Ryu told a press meeting that the Korean stock broker would also make many reports on Vietnam’s economy to attract Korean investors.

Korea Investment & Securities has also managed funds investing in Vietnam’s stock market since 2006. The initial combined capital of the funds was US$170 million but it has been halved by now due to the gloomy stock market.

Ryu said the two biggest concerns for Korean investors when investing in Vietnam now were the fluctuating forex rate and high inflation. “If Vietnam Government can improve the two indicators, it would help restore foreign investors’ confidence,” he said.  

However, Ryu said Korean investors still had confidence in long-term prospects of Vietnam’s economy.

KIS Vietnam on Tuesday opened its new head office at Maritime Bank Tower in District 1 in HCMC, headed by Oh Kyung Hee.

In December 2010, the parent firm Korea Investment & Securities Co. bought a 49% stake of Empower Securities Co. and changed its name to KIS Vietnam Securities Corp. After six months of restructuring, the company has now moved to the new place to create convenience for their customers as it plans to focus on brokerage service in Vietnam in the coming time, Hee said.

He added the company’s brokerage market share was about 1.7% now compared to 0.38% in end-2010.

KIS Vietnam has chartered capital of VND263 billion, with the Korean investor holding a 49% stake.
 
Development planned for SMEs

The Ministry of Planning and Investment completed a draft programme on small-and medium-sized enterprises (SMEs) development for the 2011-15 period.

The draft will prepare for the successful launch of a five-year socio-economic development plan.

Under the draft, 350,000 SMEs are to be established nationwide within the next five years.

The ministry expects to receive recommendations on the draft from relevant ministries and bodies before August 30.

Software group hosts innovation forum

The Viet Nam Software Association (VINASA) will host the Open Innovation Forum in Ha Noi today.

The seminar is part of the Viet Nam – Finland Innovation Partnership Programme sponsored by the two countries' governments. It is designed to boost innovation within business, encourage technological advancements, improve management and develop new marketing ideas.

Vietnamese companies will have opportunities to expand their businesses and foster relationships with Finnish partners.

Insurer eyes $2.5m IT infrastructure

AAA Assurance will invest US$2.5 million in IT infrastructure by 2015, Do Thi Kim Lien, General Director of the non-life insurance company, has said.

The company signed a co-operation agreement with IBM Viet Namto realise the project.

IBM Viet Nam deputy general director Thieu Phuong Nam said his company would provide consultancy, draft an IT development road map, train IT staff and provide the latest IT solutions to the Vietnamese-owned company.

Techcombank, power firm to invest

The Viet Nam Technological Commercial Joint Stock Bank (Techcombank) and the Northern Power Corporation (EVN NPC), a subsidiary of the Viet Nam Electricity Group, signed a comprehensive co-operation agreement on Tuesday.

Accordingly, the two sides committed to carry out co-operation programmes and investment projects together.

Also, Techcombank will provide EVN NPC with working capital, short -and medium-term credit and other financial services.

Developing industries and industrial zones

More than 60 percent of areas in industrial zones (IZs) and one-fourth of areas in industrial complexes (ICs) have been rented so far.

The information was announced at an international seminar on the development of industrial zones and complexes in Da Nang on July 27.

Since 1991, the country has established 260 IZs, more than 170 of which have been put into operation. IZs with an area of under 20ha account for nearly half, while IZs with an area of under 100ha make up one-fifth.

Coordination among foreign and domestic invested businesses is low, leading to weak competitiveness.

Vo Tri Thanh, Deputy Director of the Central Institute for Economic Research and Management under the Ministry of Industry and Trade, said that to further develop ICs, large international groups like Canon and Samsung need to increase their cooperation with domestic partners. He stated that by transferring technology which would help Vietnamese businesses to develop, competitiveness could be improved, thus contributing more to national GDP.

Vietnam, Sierra Leone sign agricultural deal

Vietnam and Sierra Leone signed a memorandum of understanding (MoU) on cooperation in agriculture in Hanoi on July 27.

Signatories were Deputy Minister of Agriculture and Rural Development Nguyen Thi Xuan Thu and Sierra Leone Deputy Minister of Agriculture, Forestry and Food Security Ali Mansaray.

Under the MoU, the two sides will boost cooperation in fisheries and rice production and Vietnam will send experts to Sierra Leone to conduct surveys and provide proposals for practical projects.

HP drives real-time anywhere, anytime enterprise communications

New Unified Communications solutions advance the way clients communicate and collaborate.

HP has announced new solutions and services that will advance the way clients use Unified Communications (UC) to improve collaboration and business responsiveness, on July 26.  

HP’s new Voice Transformation Solutions, Virtual Workplace Solutions and Network Readiness Services address the problems organizations face when integrating telephony with communications applications, such as video or instant messaging.

“Clients need to understand how changes to their work environment can impact communications”, said Ms Tran Minh Thuan, General Manager of HP Vietnam. “By collaborating with HP, clients can use HP’s methodology and testing of multivendor UC solutions to create their unique Unified Communications journey, transforming their communications infrastructure to address needs today and into the future”, she said.

HP is collaborating with leading industry vendors – Microsoft, Avaya, Polycom and Alcatel-Lucent – to bring together a comprehensive range of technology components for these three solutions. HP also offers a full range of consulting and support services for these partner platforms.

HP Unified Communications solutions help businesses and governments in their pursuit of an ‘Instant-On’ Enterprise. In a world of continuous connectivity, the ‘Instant-On’ Enterprise embeds technology in everything it does to serve customers, employees, partners and citizens with whatever they need, instantly.

HCM City’s exports reach US$15 billion in seven months

Ho Chi Minh City’s exports earned over US$15 billion in the first seven months this year, increasing by 21.7 percent compared to the same period last year.  

Among them, exports in the state-owned economic sector rose by 22.5 percent while the foreign-invested sector was up 19.4 percent.

The city exported mainly crude oil, diary products, textiles, footwear and rice.

Total export turnover of the city is expected to reach about US$23.5 billion by the end of 2011, up 12.1 percent against the previous year.

Vietnam-RoK strengthen technology transfer

A seminar to introduce trade promotion and investment cooperation between Vietnam and the Republic of Korea was held in Ho Chi Minh City on July 27.

Kim Dong Sun, President of the Small-and Medium-Sized Business Association of the Republic of Korea (SMBA) said the Korean business delegation - including those specializing in ceramics, gas, environment, and energy – arrive in Vietnam this time with the aim of seeking business opportunity in the country. They hope that through bilateral meetings, businesses from the two countries will closely cooperate in clean technology transfer, human resources and financial investment.

Bui Van Quyen, Director of the Representative Office of the Ministry of Science and Technology in south, said the Vietnamese Government is paying significant attention to applying scientific technologies in production and trading and transferring advanced technologies from developed countries into Vietnam.

The seminar will help Vietnamese businesses access advanced technologies which they can then apply in production, thus improving the quality of their products, Quyen said.

On the same day, the Research Applications and Science -Technology Services Centre and the SMBA inaugurated a Korean technology transfer and trading office in Ho Chi Minh City in order to support Korean businesses operating in Vietnam.

Dragon Capital unloads Sacombank

Dragon Capital has reportedly sold its entire 8.17-per-cent stake in Sacombank (STB) to two other foreign companies, ending a 10-year investment in the bank.

The negotiated price of the shares was said to be higher than their current market value on the HCM City Stock Exchange. STB closed yesterday's session at VND13,800 per share.

"Buying and selling stocks is a normal activity for an investment fund like Dragon Capital, so we need not to comment on whether our company has sold the shares," said Dragon Capital's director for business development Pham Nguyen Vinh.

However, Dragon Capital was known to have planned to sell its entire stake in the bank since late last year, but it took time to negotiate a price, the investment group's CEO Dominic Scriven told the newspaper Sai Gon Tiep Thi (Sai Gon Marketing).

The sale was a strategic divestment to restructure the fund's portfolio, reducing the weight of banking shares while increasing investment in other sectors, Scriven said, noting that it was an appropriate time to realise gains from the STB shares while investing in other companies with potential.

Dragon Capital has also sold holdings in Southern Bank and VPBank within the past two years. However, the latest deal took place at the time when STB has faced rumours that it was a takeover target.

The volume of STB shares exchanged through negotiation yesterday on the HCM City Stock Exchange was remarkably high, accounting for as much as 63 per cent of the bourse's negotiated volume.

If a specific group of investors wanted to take over STB by purchasing the shares that Dragon Capital has sold, they would have to pay even more for the shares than the price for which they were acquired in the current deal. The number of shares transferred was also not enought to shift control of the bank.

Getting accustomed to change

The Ministry of Finance just enacted Circular 105/2011/TT-BTC dated July 12, 2011 to amend some conditions regulated in Circular 63/2011/TT-BTC dated May 13, 2011 stipulating pilot application of priority regime in state management on customs for enterprises.

In light of the new circular, firms will benefit from ‘eased’ conditions to become qualified for a customs priority regime. For example, minimal annual export values were lowered to $70 million (for export of agricultural, forest and seafood products of Vietnamese origin) and $350 million (for export of general products) from the previous $100 million and $500 million, respectively.

Besides, the new circular regulated only administration violations incurring fines of over VND20 million ($960) each time would be considered as faults by customs bodies when appraising priority enterprise application records.

“The amendment will bring opportunities for more firms to honour the priority scheme by customs bodies, particularly small-and medium-sized businesses,” said General Department of Customs (GDC)’s Post-clearance Audit Department head Pham Thanh Binh.

The priority enterprise programme triggered public great attention right after it was announced by the GDC as the programme gave huge and practical advantages to ‘priority’ enterprises such as reductions of customs procedures, quick customs clearance, reducing charges and increasing business efficiency.

However, the conditions for priority enterprise recognition are high, according to many firms. For instance, one of the criteria priority enterprises must satisfy is their administrative violations must not exceed three times in the last three years.

“Businesses may unintentionally incur faults with diverse fine levels due to meticulous customs regulations. Not many enterprises are, therefore, up to scratch when it comes to administrative violation criterion,” Binh said.

General director Le Duc Thong at 2/9 Daklak Import Export Company Limited, one of nine priority customs sector enterprises, said he expected the new status would help the firm significantly shorten the time working with customs bodies since currently around 10 per cent of its export shipments incur direct customs checks.

Among the priority enterprises, are Japan-backed Sumidenso and Brother Vietnam and South-Korea’s Samsung Electronics Vietnam.

Sumidenso Vietnam general director Ofuchi Ryuhei said the recognition helped the firm pare down huge administrative work volumes and quickly come through customs checks. “With the facilitation, we are committed to expand our footprint in Vietnam,” he said.

“We are happy with the [priority enterprise] recognition as it facilitates enterprise business and demonstrates the Vietnamese government’s recognition of Samsung efforts,” said Samsung Electronics Vietnam general director Yoo Young Bok.

Firms expect the GDC will soon hold negotiations and ink agreements on mutual recognition of priority enterprises with the customs authorities in other countries to effectively support businesses’ import and export activities.

Recently honoured nine priority enterprises:

1. Binh Son, Quang Ngai Petrochemicals Limited Company

2. Southern Food Corporation

3. Minh Phu-Ca Mau Seafood Corporation

4. Samsung Vina Electronics Co., Ltd.

5. 2/9 Daklak import-export one remember Co., Ltd

6. Brother Industries Vietnam Co., Ltd

7. An Giang Seafood Import-Export Joint Stock Company)

8. PV Oil Corporation

9. Sumidenso Vietnam Co., Ltd

University project chalking up a future

The ambitious Vietnam National University Hanoi construction project is showing some vital signs of life.

Construction of road No 11 was kicked-off in late July 2011, marking the commencement of the first tender package under the project’s 13 components.

In light of Decision 22/1998/QD-TTg dated June 21, 1998 and Decision 702/2002/QD-TTg dated August 23, 2002 approving Vietnam National University Hanoi’s overall planning the project will cover 1,000 hectares in Hoa Lac in Hanoi suburbs with an estimated investment of VND7.320 trillion ($353.6 million). As scheduled, the project will be split into two phases and construction will be finalised in 2016.

The initial design, developed by the university itself as assigned by the government, failed to create a modern university complex. Then the project was handed over to the Ministry of Construction (MoC) in late 2008 for implementation.

On March 11, 2011, the MoC made public Decision 234/QD-BXD ratifying the project’s general planning with scale 1/2000.

Under the new scheme, the prospective university faces national highway 21 in the east and Thang Long Avenue in the south and spans over 1,000ha planned area. The training size will be 60,000 students by 2020 and 100,000 by 2050.

In respect to the project’s progress, over 711ha out of a total 1,220ha due to be cleared were actually transferred to the National University Hanoi Project Management Unit (HPMU), according to HPMU director Nguyen Thanh Dang.

The project’s investment will be later revised to fit actual development requirements. Experts, however, assumed nearly VND30 trillion ($1.45 billion) would be needed to make the project come true from the initial figure of $353.6 million.

In terms of financial sources, Vietnam National University Hanoi deputy director Dr. Phung Xuan Nha said besides the state budget, the university was actively sourcing investment capital from domestic and foreign organisations and through making effective use of its existing facilities in Hanoi inner districts.

Nha said though the overall planning scheme was green-lighted by the government, detailed planning and management schemes of project components were in the making and searching suitable consultant partners.

Japan helps Vietnam with customs single window system

Japan will provide Vietnam with an online customs single window system to help the latter put this time-saving system into operation in the fiscal year of 2014 as targeted.

Japan calls the applying paperless trade system NACCS (Nippon Automated Cargo and Port Consolidated System), which is expected to help Vietnam reduce customs-related paperwork by half.

With NACCS, it will take enterprises only one day to get import permits for goods transported by air and 2.6 days for cargoes transported by ship, compared with the current 20 days.

Japan will transfer technical information of NACCS to Vietnam and helps the country train people in charge of operating the system.

Lending rate on dong for corporations show signs of retreat  

Some commercial banks have quietly reduced the interest rate on dong loans for corporations. US dollar lending rate, meanwhile, has been pushed up due to a shortage of the greenback.   

Eximbank allocated an outstanding credit worth VND2 trillion (US$100 million) with a preferential interest rate of 19.5 percent per annum to local exporters this month.

The six-month-term loan is meant to help exporters have enough capital to buy materials and cover production expenses, according to the Ho Chi Minh City-based lender.

The HCMC branch of Vietinbank followed a similar pattern, offering an outstanding loan worth VND2 trillion to exporters only.

Under the promotion package, the rate on dong and dollar loans will be 2 percent per annum and 1.5 percent per annum lower than the common rates.

Other banks including International Commercial Bank of Vietnam and Maritime Bank also reduce lending rate for corporate loans, including exporters and small- and medium-sized enterprises.

Banks have started to offer preferential credits to exporters as they loaned out previous years’ amount, says a deputy general director of Asian Commercial Bank, who asked to be unnamed.

In return, exporters have to enter an agreement that they will sell dollars to the lenders, he discloses.

While large-cap lenders provide loans to local exporters, some small joint-stock banks start to offer big enterprises long- and medium-term loans.

Ocean Bank last week loaned PetroVietnam Petrochemical and Textile Fiber Joint Stock Company $21 million in one year.

Foreign lenders have edge in dollar credit

Many foreign-owned banks say the number of dollar borrowers is increasing on the fact that many enterprises struggle to borrow from local lenders.

Singapore-based United Oversea Bank, also known as UOB, meets the greenback lending demand of local enterprises, who want to buy materials from abroad, thanks to its oversea low-cost fund, says director Duong Minh Toan.

“Businesses favor dollar loans to import materials as the dollar-dong exchange rate of the free market and banks are equal and the rate on dong loans remains high,” says Toan.

Many local banks have to raise their interest rate on dollar deposits by 0.1-0.25 percent to 7.5-8 percent per annum as they grappled to mobilize the greenback.

The monetary authority early in May ordered lenders to set aside more dollars as reserves. The reserve-requirement ratio on dollar deposits rose by 1 percentage point to a range between 4 and 7 percent.

The State Bank of Vietnam is considering a new rule that requires banks to reduce their dollar holding ratios to 20 percent of their equity from the current 30 percent.

According to a central bank's draft circular, all banks have to report their dollar holding status of the previous day to the State Bank on a daily basis. The central bank governor may consider allowing certain lenders to have more dollar holdings if necessary.
 
Investors and builders team up to weather hard time  

Property investors and builders have united to cope with the ongoing credit crunch, which had a significant impact on the real estate market and construction industry this year.  

Saigon Thuong Tin Real Estate Joint- Stock Co., a unit of the fourth-biggest bank on Vietnam’s main stock market, has cooperated with eight building material suppliers in an effort to weather the difficult time.

Under their agreement, the building material suppliers will help the Ho Chi Minh City-based property firm, known as Sacomreal, speed up its construction projects this year and cut input costs.

They also accept deferred payments and ones in installments without lending interest rate, enabling Sacomreal to cut the apartment cost by 10-20 percent, says the property firm’s chairman Dang Hong Anh.

Sacomreal has received permits for building apartment blocks including Belleza in District 7, Carillon in Tan Binh District and Sacomreal Hung Vuong in District 6.

Efforts to curb the credit crunch have also see investors team up with builders to conduct construction projects.

Duc Khai Joint Stock Company, contractor of the apartment building Era Town in District 7, gives construction firm Hoa Binh 240 apartments, instead of cashes.  

The HCMC-based builder sells a small amount of the apartments to its staffs at preferential prices before trading the rests on market, the firms says without disclosing the details.

Statistics show Hoa Binh has sold 160 apartments so far – impressive sales during the gloomy time, experts say.

Property firm Vinh Phong Thai also followed the pattern, paying apartments to builder Phuoc Thanh, which constructs its apartment block Hoang Kim The Gia in Binh Tan District.

Builders are willing to get payment in apartments since they can take good profits from the apartments, which they were offered at a very low cost compared to market prices, says a director of a real estate firm.

“Cooperation is the best solution for property enterprises to cope with this year’s credit squeeze,” says Nguyen Bao Hoang, deputy general director of the ThuDuc Housing Development Joint Stock Company.

The HCMC-based property company has partnered up with Vinatex Land to construct the apartment block TDH – Phuc Thinh Duc and the shopping mall Aquila Plaza.

The cooperation will not only help local enterprises to weather the hard time, but also boost their strength and competitiveness, Hoang told Dau Tu Tai Chinh Newspaper.

The State Bank of Vietnam is trying to keep this year’s credit growth below 20 percent in an attempt to control inflation.

In the meantime, commercial banks have been ordered to cut back on lending to the non-production sector, which includes the stock and real estate markets. The aim is to limit credit in this sector to 16 percent by the end of the year.
 
Vn Airlines offers discount to overseas students  

Vietnam Airlines is presently offering a 35 per cent discount on its flights to Europe for all Vietnamese overseas students.  
 
Vietnamese students studying in Europe can now purchase air tickets of VND 11,319,000 million (US$ 550) with free 40kg luggage allowance before August 6 or from September 1 to 30 on its flights from Hanoi, Ho Chi Minh City to Amsterdam (The Netherlands), Copenhagen (Denmark), Frankfurt (Germany), Helsinki (Finland), Kiev (Ukraine), London (U.K.), Oslo (Norway), Prague (Czech), Stockholm (Sweden), Warsaw (Poland) and Zurich (Switzerland).

The fare price is applicable on a one-way ticket only which excludes taxes and additional fees. The ticket offer is also subject to change as per the exchange rate of the US dollar at the time of delivery.

Students must produce valid visas or other documents of proof of their study overseas.

Foreign demand grows for Vietnamese furniture
 
Viet Nam's indoor and outdoor furniture industry should remain strong until the year-end on the back of demand from traditional markets, which bounced back after being affected by the global recession, said a report.

Exports of indoor and outdoor furniture this year expanded roughly 20 per cent, compared to previous years when exports dropped due to the recession, according to the Viet Nam Sourcing Report: Indoor and Outdoor Furniture, published by the US non-profit Kearny Alliance organisation.

Viet Nam's furniture output is categorised under two segments, depending on the materials used.

The larger line is wooden products, which recorded overseas shipments of US$1.4 billion in the first five months of this year, an increase of nearly 17 per cent compared to the same period last year.

The other line comprises rattan, bamboo, rush and carpet products.

From February to May this year, overseas revenue from this line amounted to $83 million, a decline of more than 7 per cent compared with the same period last year.

The drop was due to tighter governmental controls over the harvest and use of raw rattan and bamboo, the report said.

According to the Viet Nam Timber and Forest Product Association, exports of wooden items, which include furniture, are expected to reach $4.1 billion by the end of this year, an increase of 24 per cent over last year.

Since Viet Nam's accession to WTO in 2007, the sector has been one of the 10 leading export-revenue generators of the country, according to the report.

Wooden items were sold to nearly 120 nations and territories, with North America, the EU and the Asia-Pacific region as the key foreign markets, the report said.

According to figures from the Customs, the US is the largest destination for Viet Nam's wooden items, spending nearly $1.4 billion on the products in 2010.

Japan is next at about $455 million. Completing the top five are mainland China, South Korea and the UK.

For bamboo and rattan pieces, the US and Japan are also the two biggest importers, accounting for $34 million and $29 million, respectively.

Germany, Taiwan and the UK round out the five most important markets, according to the report.

The industry has strong OEM (Original Equipment Manufacturer) capability, allowing suppliers to readily meet buyers' design requirements.

An estimated 90 per cent of output is manufactured according to customised specifications.

Another major strength of the industry is the widespread availability of certain raw materials, allowing suppliers to source components easily.

In addition, Viet Nam is the world's sixth largest producer of bamboo products.

According to the Ministry of Agriculture and Rural Development, at least 14 million hectares of forests and farms are used to cultivate the plant, which result in an annual yield of 2.1-3.5 million tonnes, depending on the species.

The country also has vast plantations devoted to rattan. The material is harvested from 380,000 hectares, turning out 20,000 to 50,000 tonnes every year.

Moreover, Viet Nam is home to more than 2,000 craft villages specialising in handmade goods, including furniture.

Suppliers typically subcontract a number of procedures to artisans residing in these communities, which have gained years of experience in production techniques.

These competitive advantages have helped Viet Nam secure a niche not just as a major sourcing centre for furniture, but as an attractive option for offshore manufacturing for companies based in other countries.

According to the report, Viet Nam's exporters of indoor and outdoor furniture are expecting export sales to climb this year.

About 75 per cent of suppliers featured in the report expect to increase sales by 10 per cent by the end of this year.

The report's survey also showed that 45 per cent of featured suppliers would target the Asia-Pacific market and 35 per cent, the US.

"Viet Nam's wooden and bamboo furniture suppliers enjoy notable advantages because of the eco-friendly materials they use, such as wood, bamboo, fern and water hyacinth, obtained from their forests and plantations. This helps increase competitiveness against China-based manufacturers," said Khiem Vu, manager of the Export Assistance Programme in Asia.

One of the significant challenges of the indoor and outdoor furniture sector is the cost and availability of manpower.

In recent years, many businesses have suffered increasing labour expenditures as a result of government regulations and surging inflation rates, the report said.

The rising cost of raw materials is another challenge facing the industry.

Although Viet Nam has an abundance of forest-based components, environmental restrictions imposed by the government have limited makers' access to these components.

As a result, expenses for unprocessed bamboo and rattan have surged 10 – 15 per cent over the past 12 months.

Petrolimex IPO oversubscribed, nets $20 mln

Petrolimex, Vietnam's top fuel importer and distributor, raised VND412.3 billion (US$20.03 million) in its initial public offering on Thursday at an average price of VND15,032 a share, a shade over the starting price for the oversubscribed issue.

Investors put in bids for 30.1 million shares, or about 10 percent more than offered, the Hanoi Stock Exchange said.

In its prospectus, Petrolimex had said it expected to raise at least $20 million from selling nearly 27.43 million shares, which is 2.56 percent of the firm's registered capital.

The starting price was 15,000 dong and the highest winning price was 19,600 dong for the initial public offering, the exchange said.

State media have said shares amounting to 2.45 percent of the firm would be sold to staff and the trade union, leaving the state with a 94.99 percent holding. The shares were not available to foreign investors.

Petrolimex imports 55 percent of the oil products that Vietnam purchases abroad and has a 55 percent share of the domestic oil products market.

The company has said it plans to expand into oil refining and wants to build Vietnam's first pipeline to China to help the Southeast Asian country meet an anticipated rise in demand for products this decade.

PV