Government to help Vietnam firms market

Vietnamese firms and industries who want to promote their products or brand names in foreign markets shall receive financial support from the government when a new policy takes effect August 1.

The government will subsidize by 70 percent the cost of advertising in the foreign media.
Firms or industries that invite the foreign media to write or make a film about their products will also get the 70 percent subsidy.

Also eligible for the subsidy are those hiring local and foreign consultants for quality, branding, and entry strategies.

Firm setting up booths at foreign fairs will each receive up to VND200 million to pay rent and for advertising and other costs.

HCMC to build apartments for low-income earners

Ho Chi Minh City has drawn up a plan to build 30,000 apartments in the next five years to meet low-income earners’ increasing demand for low-cost housing.

The municipal Department of Construction said the city had set a target of carrying out seven projects with 10,000 units, and joining hands with private sector property developers to build another 20,000 units.

The department said around 33 companies had registered to participate in a housing development program with 14,000 units. The city has given approval to six developers to develop some 8,760 units more.

Among the projects underway are Hanh Phuc with 672 apartments in Binh Chanh District which got off the ground last June, Thanh Loc with 336 units in District 12, Vinh Loc A with 1,400 units in Binh Chanh District, Truong Tho in Thu Duc District and Minh Thanh in Hoc Mon District.

According to the construction department, supply of low-cost housing has yet to keep pace with rising demand.

One reason is the lack of attractive incentives for investors to get involved in this segment. Difficulties in finding land, clearing sites, compensating affected families, and gaining access to bank loans also discourage property companies from venturing into low-cost housing projects.

Unlike commercial projects, low-cost condo projects have found it hard to ask buyers to advance money. Meanwhile, if investors choose to lease out their apartments or allow buyers to pay by installment, it will take them a long time to recoup their investment capital.

To deal with the financing issue in low-cost condo projects, the Vietnam Development Bank has listed 44 housing projects that can get preferential loans from a fund of VND6.6 trillion. However, just five of them have succeeded in taking out loans from the bank.

HCMC’s construction department proposed that the Ministry of Construction should give clearer guidance to support the low-priced housing segment and extend financial support to potential buyers.

Catfish farmers opt for losses due to bank duress

Catfish prices have gone down but many farmers in the Mekong Delta are forced to sell due to the pressure from the high interest rates on bank loans.

Le Thi Dao, a catfish farmer in Can Tho, said she had managed to sell only one out of her three ponds in which she farmed catfish.

She was unable to find buyers for the other two though prices had fallen to VND23,000 (US$1.1) per kilogram from VND28,500 at April end.

She was extremely worried since her bank debt was due on June 27.

“If I do not manage to sell the fish, I will not be able to clear the debt in time. The high interest rate plus the fine for overdue payment will cause me a big loss.”

Nguyen Thi Mai, a catfish farmer in An Giang Province, contracted with Tuan Anh Corporation to sell 130,000 kg of catfish at VND26,000 each in May.

But the firm refused to buy the fish until the price dropped to VND22,000.

Fearing that price would fall further, she had no option but to sell at that price to pay her loan in time.

Thai An Lai, deputy head of the Dong Thap Seafood Association, said a price of VND23,000 would cause farmers a loss of VND1,000 on every kilogram they sell.

However, the pressure to repay loans and the 20 percent plus interest rate had forced farmers to sell at a loss.

Some firms had taken advantage of this to force the price even lower.

Nguyen Van Thanh, head of the An Giang Department of Agriculture and Rural Development, said farming costs had increased by 30 percent this year.

The banks had worsened their plight by increasing interest rates.

Le Van Thanh, an An Giang farmer, said he had borrowed VND1 billion ($50,000) from a bank at an interest rate of 19 percent.

But the bank had recently hiked the rate to 21 percent.

There have been reports of banks hiking the rate to even 25 percent.

Many seafood associations in the Mekong Delta have called for policies to support farmers.

Nguyen Ngoc Thach, director of the Dong Thap branch of the State Bank of Vietnam, said the bank would consider offering farmers more time to repay if they were unable to sell their fish and not slap fines for late payment.

Nguyen Tuan Phuoc, deputy director of the An Giang Bank for Agriculture and Rural Development, said his bank would offer a two-month extension.

Vietnam's Mekong Housing Bank sets IPO on July 20

Mekong Housing Bank (MHB), one of Vietnam's five remaining wholly state-owned lenders, plans to raise at least VND710.6 billion (US$34.6 million) in its initial public offering next month, the country's main stock exchange said.

Ho Chi Minh City-based MHB is expected to auction nearly 64.6 million shares at a starting price of VND11,000 on July 20, the Ho Chi Minh Stock Exchange said in a statement issued late on Thursday.

The shares planned for the IPO represent 14.31 percent of MHB's registered capital of nearly VND4.52 trillion.

The state will retain a 68.1 percent stake, while MHB can sell 14.34 percent in a domestic auction, 0.56 percent to its employees, 2 percent for the trade union, and 15 percent to a strategic partner, the central bank has said.

Vietcombank and VietinBank are Vietnam's first two state-run lenders to have sold shares and listed on the Ho Chi Minh Stock Exchange.

VietinBank has sold a 10 percent stake to the International Finance Corporation.

Another state-run lender, the Bank for Investment and Development of Vietnam, or BIDV, said in March it plans to step up its privatization process. The plan has been on hold for several years.

The government has cut Vietnam's annual credit growth target to below 20 percent this year to curb inflation, from an initial target of 23 percent, after loans jumped 27.65 percent in 2010.

($1 = VND20,560)

Project to mitigate central region disaster risks

A project to minimise the risks of natural disasters on vulnerable communities in two districts of the central city of Da Nang will be launched early next month.

The project, funded by Save the Children Viet Nam, will focus on several major activities, including providing support to the city's centre for disaster prevention and mitigation to enhance co-ordination in disaster response and relief.

It will provide the centre with technical equipment and facilities to aid with rescue work and training aids such as generators, computers, portable speakers, flashlights and lifebuoys.

Approximately 147 training courses, extracurricular activities and rehearsals for almost 6,000 people, mainly teachers, pupils, coastal area residents and flood control officials, will also be organised under the project.

These activities are expected to provide basic knowledge on natural disasters, mitigation and response.

45 aqua facilities awarded GlobalGAP

45 Vietnamese aquaculture facilities that raise tra fish have been recognized internationally after being awarded the GlobalGAP certificate or Global Good Agricultural Practice.

An additional 18 facilities are to be granted the certificates or in the process of applying for one.

The figures were released by the Vietnam Association of Seafood Exporters and Processors (VASEP).

GlobalGAP is an international standard assuring transparency of origin, quality and food safety at each stage of production for cultivation, animal husbandry and aquaculture.

Meanwhile, many farms raising tra fish in Vietnam have also been awarded with other international certificates like AquaGAP and SQF (Safe Quality Food).

In the first quarter of the year, Vietnam exported over 153,000 tons of tra fish worth over $376 million, an increase of 5.2 percent in quantity and 21.6 percent in value compared to the same period of the previous year.

City, delta commune enriched by birds’ nests  

Houses built specially for birds’ nests have brought handsome profits to many people in Ho Chi Minh City and Tien Giang Province in the Mekong Delta since the business first started ten years ago.

Land price at Tam Thon Hiep Commune of HCMC’s Can Gio District has surged since the swiftlets came. People from other places bought land to build houses for the birds.

A local woman named Ba just earned more than VND1 billion (US$48,560) selling a piece of land more than 200 square meters. Ba said she doesn’t have money to build bird nest houses, so she sold land to others who can. “The birds are God’s blessing, whoever can have it have it.”

It costs around VND700-800 million to turn a normal house into one for bird nests and more than VND1.5 billion to build a brand new house for bird nests, including wood for the nests, sound equipment to attract the birds, and the equipment to create humidity for the house.

According to locals, a house of a Malaysian man in the area attracts the most birds, producing more than ten kilograms of bird nests every month.

Raw bird nests in the commune are sold at more than VND40 million a kilo, depending on how the nest looks. The commune also has a store selling bird nests in small plastic boxes.

Each box of 100 grams is sold at VND4 million, which the shop owner said is much cheaper than in HCMC, where bird nests are put in prettier wrappings.

People Can Gio District started to raise swiftlets for their nests in 2006 and the number of bird nest houses has increased faster then expected by local authorities. The district is now home to 77 bird nest houses and 69 of them are invested by outsiders.

The Southern Institute of Science and Technology, based in HCMC, has set up several houses at the commune to study swiftlet development.

Le Vo Dinh Tuong, an expert from the Institute of Chemistry Technology, said that if invested properly, a bird nest house of six square meters, can receive one kilogram of bird nests worth around VND30 million a year.

The business pays back quickly, after three to five years, and the investors do not have to spend on food or work staff as the birds handle everything itself, Tuong said.

Go Cong Town in Tien Giang Province made many headlines of bird nest houses in recent years.

A total of 32 multi-story houses for swiftlets have been built in Long Binh Commune of the province. The HCMC-based Vietnam-Australia Service and Construction, Ltd. is investing more than $1 million in five more houses.

Muoi Thiet, the first swiftlet raiser in the area, recalled that the birds came to him as a destiny.

In 1988, he was handed a two-story house, which already had some swiftlets there as the house had been left unused for nearly 20 years.

“My children then tried to chase the birds away, but they kept staying, living among us. So I let them stay,” Thiet said.

Then he saw the birds making milky nests. He told the story to a partner in Khanh Hoa, the land of bird nests in the central coast, and was told to sell the nests.

Thiet said he didn’t know anything about bird nests at the time, thus he broke them when trying to remove them from the house, yet he still earned VND600,000 from 240 grams of the nests in 1989.

Since then, his family moved out to save the houses for the birds, which have come more and gave birth to many. Each kilogram of bird nest from Long Binh sells at VND40-42 million, and a processed one VND60 million.

Thiet said birds from his house can make around seven kilograms of nests in 10 days during prime time.
 
Made-in-Vietnam footwear popular  

Vietnamese shoemakers have gradually regained a hold in the local market as half of the 130 million pairs of shoes sold yearly in the country are made in Vietnam.  

Only a few years ago, shoes made in China, Thailand and Taiwan flooded the Vietnamese markets while local footwear companies tried hard to meet the fierce competition in the global market.
 
Although Vietnam is one of the five biggest footwear exporters in the world, it still had a tough time selling shoes in the local market. Only 20-30 percent of shoes available in the local market were made by Vietnamese firms.  
 
Determined to regain the market, large corporate giants focused their resources in the local market by expanding retail outlets nationwide.
 
Vietnamese brands like Biti, Bita, Vina, T&T, Hong Thanh, Tan Thanh and Hong Anh have now become quite popular in the country, with some selling in the Chinese market as well.
 
Vietnamese shoppers now hesitate to buy Chinese made goods after many Chinese products were found to be of poor quality and tainted with toxic chemicals.
 
Ms. Le, owner of An Ha footwear shop in Nguyen Chi Phuong Market in Ho Chi Minh City’s District 10, said footwear from China has a variety of beautiful designs that are very eye-catching but they are of poor quality and don’t last long.
 
She has decided not to sell Chinese made footwear to maintain credibility and now 80 percent of footwear in her shop is made by her own family set up or bought from established footwear companies in Ho Chi Minh City. Some of the bulk though is foreign made.
 
Le said designs of domestically made shoes are quite in vogue. Most of the sandals for students and men’s shoes available in the market are made in Vietnam. They are durable and 20-30 percent cheaper than Chinese footwear, hence a local shopper seems rather interested in buying them.
 
According to the Vietnam Leather and Footwear Association, living standards of Vietnamese people have risen much more. The average consumption rate of shoes in 2011 per person has increased 2.5 times since 2000.
 
With a population of 86 million, the country demands 130 million pairs per year. This figure accounts for a remarkable portion of the approximately 780 million pairs produced annually by the country’s footwear industry.  
 
Vietnamese-made shoes have an advantage in the local market because of low distribution costs.
 
The footwear industry is forecast to see a growth rate of 8 percent per year in the future and with increasing demand from local shoppers.
 
The country is estimated to need 355 million pairs of shoes per year by 2020, 70-80 percent of which will be made in Vietnam.

Europe wine exporters partner for major Vietnam fairs

The trade commissions of France, Italy and Spain will bring their wine producers together in both HCMC and Hanoi in July to showcase their products in a joint effort to expand European wine sales in Vietnam.

Nineteen wine producers and traders, with six from each of France and Spain and the remaining seven from Italy, will put on show their quality wines typical of European traditions at the Traditional Quality Wine Fair 2011 in HCMC on July 5 and Hanoi on July 7, representatives of the commissions told reporters in HCMC on Thursday.

A wide range of wines will be available for Vietnamese wholesalers, distributors and key end-users to try. The fair will also include wine and food pairings.

Deals are expected after business-to-business meetings between the exhibitors and local importers.

Carlos Domínguez Agulleiro, chief trade officer and deputy head of the Spanish Economic and Commercial Office in HCMC, said there remained much room for imported wines in Vietnam. Marco Saladini, director of the Italian Trade Commission in Vietnam, said the market was expanding.

Figures of the General Statistics Office showed Italy exported US$1.5 million worth of wines to Vietnam last year, a year-on-year increase of more than 28%. Spanish wine exports to Vietnam last year jumped over 155% to US$700,000 compared to 2009.

Though France’s wine sales from Vietnam experienced a slight value drop by 3.5% last year from a year earlier, the country was still Vietnam’s largest wine exporter with a total value of US$9.78 million. French commercial counselor Jean-Louis Poli told the Daily that this number represented the direct export of French wines to Vietnam.

Italy and Spain were Vietnam’s eighth and tenth largest wine exporters last year. Spanish economic and commercial counselor Alberto Cerdán said Spanish wines still took a small market share in Vietnam as this was a new market, but he was optimistic about this market given the encouraging wine sales last year.

Cerdán said Spain produced wines valued at US$6 billion with half of them for export and that Spanish wine sales in Asia grew 50% in Asia last year.

Saladini of the Italian Trade Commission told the Daily after the press conference that consumers of Italian, French and Spanish wines were middle- and high-end users in Vietnam. However, he said competitive products of these countries started to enter this country to offer local consumers with more choices.

Wine imports into Vietnam last year exceeded US$53 million, up 85% on the year before.

Firms need legal advice to break into Korean market

Commercial Service Korea (CS Korea) recommends that Vietnamese businesses seek legal consulting before signing contracts with Korean partners so they can avoid risks in the South Korean market and achieve success.

Speaking at a seminar on the South Korean market held in HCM City on Wednesday, Kim Euk Guen, director of Glocal Kim Co, said businesses also should seek legal consulting on intellectual proprety and trademark registration with the Korean Intellectual Property Office because of the need to protect their business interests.

They should set up a representative office or search for a local business representative as a partner to develop a thorough understanding about the market, especially when they face language barriers and different manners and customs.

International Partner Search under the support of CS Korea would help foreign businesses, including Vietnamese firms, to seek partners through linking networks with industries and business associations, he said.

Vietnamese enterprises can find useful services offered by KOTRA's Invest Korea, investment promotion agency of South Korea under the sponsorship of the Government.

Invest Korea will help businesses identify necessary administration procedures, offer consulting on investment, M&A, joint-venture, real estate, tax and law.

He said the market for consumer goods was concentrated in major cities with diversified distribution and sale channels, including hawkers, small stores, and retail shopping centres.

"Three factors for being successful in the Korean market are having products suitable for customers' tastes, keeping in contact with Korean partners and customers frequently, and making the right commitments in contracts."

At the seminar, Hong Sung Hae, operation director of South Korea International Trade Association, said consumer goods, processing foodstuff, clothes and shoes were export potential to the Korean market.

In the past, South Korea ranked fourth among Viet Nam's most important trade partners.

Viet Nam and Korea plan to increase bilateral trade to US$20 billion by 2015. To meet the target, annual trade growth needs to reach an average 15 per cent in the 2010-14 period.

Viet Nam's key exports to South Korea are materials, fuels, plastics, seafood, garment and textiles, and cotton.

Park Sukhwan, South Korean ambassador in Viet Nam, said Viet Nam and Korea governments had agreed to build a "strategic partner" relation.

The South Korean market is a traditional trade partner of Viet Nam; on the other hand, Viet Nam is also the key partner of South Korea in the ASEAN region.

"A favourable and transparent investment environment in Viet Nam will attract more South Korean investment in the coming time," he said.

Currently, South Korean businesses have invested in most sectors in Viet Nam, including infrastructure, telecommunications, industry, mechanics, real estate, automobile manufacture, shipbuilding and the hospitality sector.

Nguyen Anh Ngoc, deputy director of the Investment and Trade Promotion Centre (ITPC), said HCM City had twinned with some cities of South Korea such as Seoul and Pusan.

In the coming time, HCM City will strengthen cooperation with other localities of South Korea to expand its market.

The seminar was organised by ITPC in collaboration with the Consulate General of South Korea in HCM City.

Belgians step into the gap

Vietnamese firms’ thirst for capital will be partly relieved with support from Belgian development finance institution Bio.

Bio is the Belgian Kingdom government investment fund having EUR465 million under management. Bio aims to support small-and -medium size enterprises (SMEs) in developing countries. Its loan portions range from EUR300,000 to EUR2-3 million in 5-10 year duration, according to Bio Vietnam representative Nathalie Brisbois.

“In Vietnam, Bio has lent out to scores of businesses. It has injected $15 million in Sacombank or $18 million in Mekong Enterprise Fund to expand lending to SMEs,” said Nathalie Brisbois.

Director Nguyen Cong Dang at Grand Place - a Bio loan recipient, said in 2006 the firm wanted to build the second factory on chocolate production with an annual capacity of 3,000 tonnes to meet burgeoning market demands. However, it could not source sufficient investment from local banks or investment funds.

“In this critical period, we came to Bio and our capital needs were satisfactorily met. With Bio capital support and advice, Grand Place could not only foster production and enlarge export market, but also turn out chocolate products entirely made sourcing local materials,” Dang said.

Bio Vietnam has benefited from Belgian embassy support. “To bolster economic, trade and investment relationships between the two countries the Belgian embassy in Vietnam has partnered with Bio to assist Vietnamese firms with promoting export to Belgium and the EU market at large,” said Belgian ambassador to Vietnam Hubert Cooreman.

Hundreds of Vietnamese firms active in infrastructure development, renewable energy, information technology, telecommunications, and agriculture areas came to Bio Vietnam to source loans, according to Belgian Ministry of Foreign Affairs’ head of Asia section Bertrand de Crombrugghe.

In the context Vietnamese firms are critically short of investment capital, Bio’s support is the kiss of life to a number of SMEs, said deputy minister of Planning and Investment Cao Viet Sinh.

“The Vietnam-Belgium Joint Commission on Economic Cooperation will lend a hand to help enhance cooperation between Bio and Vietnamese firms, from there cementing economic, trade and investment ties between the two countries,” Sinh said.

According to Vietnam Chamber of Commerce and Industry chairman Vu Tien Loc, more than 30 per cent of local firms could not access loan loans, and most of them are SMEs.

Myanmar, a new face in travel expo

The Ho Chi Minh City 2011 International Travel Exposition will include Myanmar in its regional tour link, together with the old faces of Vietnam, Cambodia and Laos, organisers said.

La Quoc Khanh, Deputy Director of the municipal Department of Culture, Sports and Tourism, said on June 24 that this year’s event was themed “Four nations - one destination”, after six years of focusing on merely three Indochinese markets.

Deputy Minister of Culture, Sports and Tourism Ho Anh Tuan said the expanded regional tour connection was in line with the goal set by the Association of Southeast Asian Nations (ASEAN) for joint action in promoting tourism among member nations and speeding up integration of the industry by 2015.

Tuan added that organisers would gear to a broader theme “ASEAN - one destination” for the expo, the largest hospitality industry event in Vietnam, in years to come.

The organising board said the expo, which was to take place from September 14-17, had so far filled up 70 percent of its pavilions. Participants will come from a large range of markets, from India to Taiwan, the Republic of Korea, Hong Kong, Indonesia, Malaysia and Australia, in addition to travel agents from the four host nations.

Vietnamese companies expand reach in Cambodia

The Vietnamese-invested Bank for Investment and Development of Cambodia (BIDC) and Cambo Pay Company on June 24 officially launched a new service venture – SMS Banking – in Cambodia .

Vu Thinh Cuong, commercial counsellor at the Vietnamese Embassy in Cambodia , BIDC Director General Nguyen Van Hien and Cambo Pay Chairman Tran Tri Manh attended the launch ceremony.

The opening of SMS Banking services tapped into a business trend compatible with the Cambodian market, home to some 6.5 million mobile subscribers out of a 14-million population, Manh said, noting that most subscribers also had bank accounts.

Through the BIDC system, customers can gain access to bank services such as checking trade balances, transaction history and forex rates and transferring money at anytime and anywhere by sending messages to fixed numbers, he said.

BIDC, a branch of the Bank for Investment and Development of Vietnam (BIDV), was formed in September, 2009, is the second-largest bank in term of charter capital in Cambodia and was among top five banks in the country with the largest asset and credit loans.

Biggest Thai manufacturing expo propels supporting industries

South East Asian automobile manufacturers looking for innovative technologies to improve production efficiency and competitiveness has seized their chances at Manufacturing Expo 2011, held in Bangkok, Thailand from June 23-26.

Manufacturing Expo 2011 brings together a broad range of machinery, technologies and industrial parts in its exhibitions and new knowledge and business networks in its concurrent activities, involving some 1,500 exhibitors from 30 countries.

The event comprises seven shows serving the most comprehensive range of the manufacturing and supporting industries, including InterPlas Thailand for mold and die makers, Automotive Manufacturing for auto parts manufacturers, Assembly Technology featuring industrial automation and assembly technologies, NEPCON Thailand for electronics manufacturers, Industrial Components & Subcontracting showcasing industrial parts and subcontractors, and INDEE Bangkok organised by the Indian government’s Engineering Export Promotion Council (EEPC India).    

“The exhibitions feature every technology needed to produce an entire automobile,” boasted Chainarong Limpkittisin, managing director of Reed Tradex Company, the event organiser.

He said Manufacturing Expo 2011, which “can be marked as the day of the biggest gathering of remarkable events in the trade exhibition history”, and its co-locating events “can help all participants clearly see the direction of the industry, so they can be prepared and confidently and firmly move forward”.

Limpkittisin said it was the biggest edition of Manufacturing Expo in term of the size of the event, the number of overseas exhibitors, support from power groups and involvements of ASEAN industrialists. Over 38,000 visitors are expected at this year’s event.

“We [Reed Tradex] create this event with a commitment to deliver as many tools and opportunities the industrialists may need to grow their businesses,” he said.

The organiser expects the event will generate business worth over THB3 billion ($100 million).

According to Reed Tradex’s statistics, the Manufacturing Expo 2010 held in Bangkok in June last year attracted 1,300 companies from 25 countries and seven official pavilions. It drew 35,823 quality visitors and 120 groups of business delegations from 42 countries, and 150 conferences and seminar sessions were held during the event.

Reed Tradex is ASEAN’s leading exhibition organiser. The company is a member of Reed Exhibitions, the world’s leading events organiser which creates high profile, targeted industry events where buyers and suppliers come together to do business. Reed Tradex’s global portfolio includes over 460 events in 36 countries serving 44 industries. In Thailand and Vietnam, it organises 16 strong brands of international exhibitions and conferences.