Trade surplus with Malaysia hits over US$1bln

Two-way trade turnover between Vietnam and Malaysia reached more than US$7.9 billion in 2012, up 17 percent from the previous year.

According to the Vietnam Trade Office in Malaysia, Vietnam's exports to Malaysia were estimated at US$4.5 billion, representing a trade surplus of more than US$1 billion.

Among key export items were crude oil, computers and components, rubber, rice,mobile handsets, steel, vehicles and spare parts, and coffee, while its main imports included electronics and appliances,  animalfat, vegetable oil, plastics, and machinery and equipment.

Bilateral trade turnover is expected to hit US$8 billion this year, of which Vietnam’s exports will generate US$5 billion in value, a year-on-year rise of 11 percent.

HCM City sets target of export upsurge

HCM City aims to post export turnover of US$34 billion this year, a year-on-year increase of 13.5 per cent, according to the City’s department of industry and trade.

The ambitious target demonstrates the city administrators’ eagerness to shift the nature of exports during the 2011-15 period.

With the goal of achieving an annual growth rate of 13 per cent, the city hopes to increase the export of industrial products by 13.1 per cent each year, agro-forestry and fisheries products by 11.9 per cent and other commodities by 14 per cent.

The city will focus on exporting highly-valued industrial products as well as software and digital content. As planned, industrial products will account for 54.4 per cent of the city’s total export turnover, and high-tech and software products will also constitute a significant percentage of exports.

In contrast, unprocessed products with a low value will see fewer exports, except for crude oil. Agro-forestry and seafood products will account for only 23.1 per cent of exports. Export growth of garment and footwear will be maintained.

The city will also make every effort to keep total import costs low, around $29 billion.

The HCM City Department of Industry and Trade warned local businesses to diversify their products, both in terms of design and distribution channels, and seek more importers.

According to the department, the growth rate of the city’s export turnover was 12.5 per cent last year and export turnover reached $29.9 billion - an increase of 63 per cent against 2011.

Ceramic company's arms to make losses

Viglacera Thang Long Tiles Company (TLT) gained approval to withdraw nearly 7 million shares from the Ha Noi Stock Exchange, having the last trading day on February 27.

According to the latest financial report, the company’s losses as of the third quarter last year reached around VND118 billion (US$5.6 million), exceeding its equity by VND48 billion ($2.3 million). If last year’s fourth quarter statement appeared to make loss, TLT would be forced to delist

Meanwhile, another ceramic arm, Viglacera Ha Long I, also posted a loss of VND3.25 billion last year.

Rubber firm sees declining profit in January

Dong Phu Rubber Company (DPR) was among the first enterprises to report profit in January, showing a fall compared to the same period of last year.

The company achieved VND31 billion (US$1.5 million), down 73.35 per cent compared to last year’s January. It has reached 6 per cent of this year’s target.

Although rubber production increased 22 per cent over the same period last year, the average price of rubber declined from VND88.96 million per tonne from January 2012 to the current VND61.7 million, weighing on revenue and profit.-

Vinacomin issues bonds to raise funds

The Viet Nam National Coal and Mineral Industries Holding Corporation (Vinacomin) has announced it issued VND2.5 trillion (US$119.6 million) worth of bonds, coded VNC2013, on January 18.

The bond term is five years.

As announced, the yield applied for the first year is 14.5 per cent. All of the proceeds from the bond issuance are to be used to increase the size of working capital and will be allocated to investment projects.

Last year, Vinacomin issued VND3 trillion ($142.8 million) worth of bonds, but sold only 17 per cent of them.

National chemical group sells rubber shares

The Viet Nam National Chemical Group (Vinachem) was reported to have sold 10 per cent of Da Nang Rubber Co (DRC) to a Japanese partner.

At the price of VND60,000 (US$2.87) per share, the total value of the transaction was worth VND400 billion (nearly US$20 million).

After the deal, Vinachem still holds a dominant stake of 50.5 per cent in the rubber processor.

Under the Government’s scheme to restructure Vinachem during the 2012-15 period, the group would divest from some companies such as insurer Bao Minh and Vietnam Industrial and Commercial Securities Corporation (VIG).

DRC shares closed yesterday’s session 4.1 per cent higher at VND40,500 a share.-

Border markets back VN produce

A programme to bring Vietnamese products to rural areas has begun to show results in the southern province of Tay Ninh, with more provincial residents choosing products with a domestic trademark.

Despite the province’s geographical position in a border area, a majority of the products being sold in local markets ahead of Tet this year are Vietnamese products that have been shipped in from markets in neighbouring Tay Ninh and Long Hoa or from the Tan Binh Market in HCM City.

“Most of goods being sold for Tet, like candy, snack products and drinks, are domestically made,” said Bui Thi Xuan, a vendor at the Hoa Binh Market in Thanh Hoa Commune in Tay Ninh’s Chau Thanh District. “People don’t complain about the quality of Vietnamese products like they used to.”

Made-in-Vietnam products have improved in quality and price competitiveness in recent years, she said, while increasing numbers of imported goods have turned out to be counterfeit.

Le Thi Kim Yen, a clothing vendor at Hoa Binh Market, said that she had a lot of clothing imported from China that has turned out not to be marketable.

Hoa Thanh communal People’s Committee Chairman Tran Hong Thien said that local authorities have conducted public campaigns to get shoppers to give priority to locally-made products. The campaigns have successfully increased public awareness.

“Imported products seem to have no more breathing room here since local people have become suspicious of counterfeit products and most of the shops in the commune mainly sell local products,” said Thien.

Truong Thi Muoi, a vendor at Hoa Binh Market, also noted that more Cambodians have come to buy Vietnamese products along the border due to lower prices than products imported from Thailand.

Bus stations have fewer fares

Local bus stations are seeing more travellers in the run-up to Tet (Lunar New Year) holiday, but the number is lower than last year, according to station managers.

Thuong Thanh Hai, deputy director of Mien Dong (East-bound) Coach Station, said the number of travellers to the southeastern, central and northern regions had doubled in recent days.

More than 1,500 coaches with a total of 45,000-47,000 passengers left the station on Tuesday.

The station expected 48,000 – 53,000 passengers a day during the February 6-8 period, the peak days before Tet, which falls this year on February 10.

The number of passengers, however, has fallen at Mien Dong (East-bound) station before Tet (January 30 – February 5) by 16,820, or 19 per cent, compared to the same period last year.

Illegal coaches and buses arranged by workers’ companies have taken away customers, according to Hai.

Also, more workers were having financial difficulties this year, and thus have decided not to travel.

The Mien Tay (West-bound) Coach Station, which transports passengers to the Cuu Long (Mekong) Delta, served more than 30,000 passengers on Tuesday, a slight increase compared to normal days.

The number of passengers at Mien Tay planning to travel during Tet has also fallen compared to last year.

Since many routes from Mien Tay to the Delta’s provinces are short, workers have chosen to travel by motorbike.

Tran Van Phuong, deputy director of Mien Tay, said the station was expected to transport 61,000-63,000 passengers a day from February 6-8.

Coach stations in the Mekong Delta said they would add more buses during peak days of the holiday period.

Nguyen Dinh Suu, deputy general director of the Can Tho Ferry – Bridge Standage Joint Stock Company, said the number of passengers at coach stations in Can Tho City was expected to increase.

The Can Tho – Hau Giang Province route has buses departing every 15 minutes. They will leave from 4:50am to 9pm every day, compared to the normally scheduled 5:35pm.

Also, Can Tho’s inner-city bus routes will add 10-15 bus trips a day during Tet.

Travel agencies set sights on regional tourists

Travel agencies hope to attract more tourists from Viet Nam’s regional neighbours, following a successful ASEAN Tourism Forum in Laos last week, a representative of the Viet Nam National Administration of Tourism (VNAT) told Viet Nam News on Monday.

Vietnam Airlines and 30 travel agencies attended the forum with a strong commitment to boosting tourism in Viet Nam, the VNAT source said.

Luxury Travel Viet Nam, which has offices throughout Viet Nam, Cambodia, Laos, Myanmar and Thailand, set out to promote high-end and luxury tourism at the forum with its new promotional programme entitled Viet Nam: Timeless Charm.

“Viet Nam has been a favourite destination to worldwide travellers with the country’s culture, cuisine, history and daily life,” said Luxury Travel founder and CEO Pham Ha. “We hope that this annual tourism forum will become a good opportunity for us to introduce the country’s destinations to ASEAN member nations.”

Ha Noi-based Luxury Travel Viet Nam has also launched the country’s first luxury halal tour and holiday operator focusing on Muslim tourists from Brunei, Malaysia, Singapore, Indonesia, India, Turkey, and the Middle East.

Tourists aplenty, but travel firms struggle to survive

The country welcomed 6,847,000 foreign travelers in 2012, an increase of 13.86 per cent over 2011, according to the Viet Nam National Administration of Tourism (VNAT).

The Ha Noi Department of Culture, Sports and Tourism reported that the city received 2.1 million international tourists in 2012, up by 11.3 percent over the previous year.

However, these figures have not meant better business for travel agencies. 2012 has been a tough year for them.

Small and medium travel firms in Ha Noi have confirmed that they have cut down 25-40 per cent of their staff, relocated head offices to suburban areas and are doing everything possible to survive.

The HCM City Department of Culture, Sports and Tourism reports that hotels in the city suffered sharp declines in profit in 2012 due to high input costs. Occupancy rates at 3-5 star hotels were down 2.3 per cent over 2011.

Tet tours offer foreigners festive experience in Mekong Delta

Many foreigners are set to enjoy Tet tours launched by leading travel firm Saigontourist this year.

The firm’s Mekong Delta tours start from the 23rd to the 29th of the last lunar month (February 3-9). The tours will enable visitors to experience the pre-Tet atmosphere in My Tho City, visit the local flower market as well as the Vinh Trang Pagoda. They will also be taken to local homes where they can join Tet preparations, like making banh tet (sticky rice cake with green beans and pork fat stuffing), traditional confections and other dishes.

Commission amends regulations

As the stock market closes for the Tet holiday, the State Securities Commission has issued legal amendments to help ease financial burdens for investors.

As stipulated in Decision 53/QD-UBCK, monthly depository fees were reduced from 0.5 dong per share or fund certificate to 0.4 dong.

Previously, securities firms claimed they had to pay billions of dong in depository fees each year.

In addition, investors who cannot afford to pay the fees may be considered for an extension.

However, if securities companies fail to pay the fees by the end of the extension period, the stock exchanges will seek to end their membership.

Brokerages with terminated memberships will not pay annual operation fees for the following year, while brokerages that have their operations suspended by the State Securities Commission will still have to pay annual fees during their suspension.

Yesterday, the State Securities Commission published a draft decree detailing violations and relevant penalties. Notably, those who manipulate shares can now be fined up to VND2 billion (US$95,700).

The draft also proposes a number of additional penalties, including the suspension of trading or listing activities, depriving firms of licenses, certificates and practising certificates and confiscating material evidence of the violations.

The previous sanctions were alleged to be too mild to deter violators. For example, the current punishment for manipulation ranges between VND200-300 million ($9,500-14,200), while violators can make profits of billions of dong.

Projects need push to get funds

Deputy Prime Minister Hoang Trung Hai has called on managers of projects funded by Official Development Assistance (ODA) to speed up work so that the funds can be received in time.

At a meeting of the national steering board for ODA and other concessional loans chaired by Hai on Wednesday, officials reviewed implementation of ODA-funded programmes and the impact they have on socio-economic development.

The board also discussed weaknesses in implementing the projects, especially those related to procedures, supervision, and funds allocation.

It mapped out measures to get, manage, and use ODA and other concessional loans from international donors through the period until 2015.

The board will review 20 years of obtaining and using ODA loans and organise events to thank foreign and domestic organisations and individuals who have helped establish co-operation with international donors.

It will also organise a Viet Nam Development Partnership Forum and ask donors to support the IDA (International Development Association) 17 Programme.

It will collaborate with ministries and localities working on ODA-funded programmes to resolve difficulties to speed up work and improve efficiency. 

Vietnam exports 400,000 tonnes of rice in January

Vietnam shipped abroad more than 400,000 tonnes of rice in the first month of this year, earning 183 million USD, reported the Vietnam Food Association (VFA).

Another 400,000 tonnes are expected to be shipped in February and 600,000 tonnes more in March.

VFA has forecast that rice export this year can reach 7.5-7.6 million tonnes.

According to the association, the world rice market will be tough this year for exporters, due to high supply and low demand.

Last year, the country exported a record 7.72 million tonnes of rice, earning 3.45 billion USD, based on VFA statistics.-

France grants 75 million Euro to power transmission project

The French Government has given US$75 million towards a Vietnamese power transmission project spanning from the Central Highlands to the south.

The aid agreement was signed in Hanoi on February 7 by Minister Delegate for Francophony Yamina Benguigui and Vietnamese Deputy Finance Minister Truong Chi Trung.

The signing ceremony was witnessed by French Ambassador Jean-Noel Poirier, and French Development Agency (AFD) Director Jean-Marc Gravellini.

The power transmission project, which is also funded by the AFD and the Asian Development Bank (ADB), will run through five provinces and cities from the Central Highlands’ Gia Lai province to Ho Chi Minh City, with a total length of 437 km.

The project is expected to increase transmission capacity to 5,300 MW and help meet the southern region’s rising power demand during the dry season. It will also help raise revenue for the Electricity of Vietnam Group (EVN) and optimise power generation capacity.

The 500kV transmission line from Gia Lai’s Pleiku city to HCM City will enter operation in 2015, enabling power imports from Cambodian and Laotion hydroelectric plants by 2018.

VietJetAir to launch HCM City-Bangkok air route

VietJetAir will officially inaugurate its Ho Chi Minh City-Bangkok air route on February 10.

It is the carrier’s tenth air route and its first international opened by a private Vietnamese airline.

The company said the daily flight between HCM City and Bangkok will be serviced by Airbus A320s.

The flight will depart from HCM City at 11.45am and arrive in Bangkok at 1.15pm.

Another flight will take off from Bangkok’s Suvarnabhumi Airport at 2.30pm and land in HCM City at 4pm.

VietJetAir Business Development Manager Desmond Lin believes 2013 will be an eventful year for the carrier.

VietJetAir plans to expand into more domestic and international air routes, contributing to the development of Vietnam’s tourism industry and the promotion of its image overseas, he noted.

A call centre ((+66) 22777111) in Thai and English has been opened in Bangkok. VietJetAir will also establish a Thai language website.

VietJetAir currently operates over 300 flights per week linking Vietnam’s major cities.

Nearly 144,000 tourists to celebrate Tet in Danang

The number of tourists staying in Danang for Lunar New Year (Tet) celebrations is estimated at 143,199, up 10.4 percent against last year.

According to the local Department of Culture, Sports and Tourism, five cruise ships will dock at Tien Sa port, bringing 6,504 foreign tourists from the US, UK, Canada, Australia and China in addition to 41 direct flights from Kuala Lumpur, Singapore and Incheon carrying 5,160 foreign passengers.

The central city will offer gifts to first in 180 passengers from Kuala Lumpur on February 10 and another 1,400 from the SuperStar Aquarius cruise ship on February 12.

So far, more than half of three and five-star hotels in Danang have been booked in advance.

All four-five star coastal resorts and some three-star hotels are fully booked from February 11 to 14.

Dubai group invests US$30 bln in HN

Global Sphere, a Dubai-based company, just announced a US$30 billion investment in real estate development in Ha Noi.

The company plans to build about 70 residential towers in the area, which dubbed as “Ha Noi Wall Street”.  The mega project covering an area of 35 square kilometers will have all urban services.

The project’s first phase, requiring US$10 billion, is scheduled to be completed by 2020, said Global Sphere Chairman Dr Abdullah Al Sayegh.

This is the ever largest project carried out by a UAE company in Viet Nam, he added.

The project can accommodate between 300,000 to 400,000 residents after its completion by 2030.

Samsung’s second plant to take shape in Vietnam

Samsung Electronics Vietnam will build a plant to produce and assemble mobile phones and hi-tech electronic products as part of a high-tech project in northern Thai Nguyen province.

A land lease was signed on February 6 by Samsung and its Vietnamese partner to carry out the Samsung Hi-tech Consortium project in Yen Binh Industrial Zone.

Provincial leaders appreciated the company’s decision to invest in the region and asked local departments, agencies and authorities to create favourable conditions for the company to implement the project.

This is Samsung Electronics Vietnam’s second plant in Vietnam. Its first plant was built in 2009 in Yen Phong Industrial Zone, northern Bac Ninh province, manufacturing 11 million products per month and employing 24,000 workers.

When its second plant in Thai Nguyen enters operation, Vietnam will become Samsung’s world biggest hand device producer for exports.

Clothing exports surge by 28 percent

Export revenue of textiles and garments surged 28.4 percent to US$ 1.05 billion in the first month of the year, according to the Ministry of Industry and Trade.

The ministry also reported that production of woven fabrics made from synthetic and artificial fibers reached 81.8 million square metres, a 12.9 percent increase, while clothing for adults also surged 21.6 percent to 184.8 million units. Natural fabrics output in January increased 2.2 percent to 22.1 million square metres.

Most Vietnamese garment and textile enterprises reported having received orders to the end of the first quarter. A number of large businesses even received orders for the second and third quarters.

The ministry said that this is an optimistic sign for the textile and garment industry and suggested firms invest more in boosting the image of Vietnamese products overseas.

Textile and garment producers should also focus on making their own materials to minimise dependence on imports, the ministry said.

Vietnam’s textile and garment industry ailment to grow by 12-15 percent this year and earn export revenues of US$18.5-19 billion.

The US is expected to remain Vietnam’s largest textile and garment importer with an import value of US$ 8.5 billion, up 11 percent against last year. Exports to Japan and the EU are also estimated to reach US$ 2.4 billion each while shipments to the Republic of Korea are expected to surge 15 percent to US$ 1.5 billion.

Vietnamese seafood gains firm foothold in US

Vietnam earned more than US$15.2 billion from 2.22 million tonnes of seafood exported to the US market in the first 11 months of last year.

The figure accounted for more than 7 percent of the US market’s total seafood import volume worth US$16.8 billion in 2012, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

Vietnam’s key export items to the US included shrimp, and tra and basa fish. The volume of tra and basa fish shows a year-on year increase of 17 percent while that of catfish coming from other countries is on decline.

The US imports seafood from 130 countries around the world. Among them Vietnam ranks fifth after China, Canada, Thailand and Indonesia.

Vietnam, Laos boost finance cooperation

Vietnamese Minister of Finance Vuong Dinh Hue and his Laos counterpart Phuphet Khamphunvong reviewed the two countries’ financial ties at a working session in Hanoi on February 5.

In 2012 both sides jointly launched projects to upgrade facilities of Northern Laos’ Finance School and Dongkhamxang Institute of Economics and Finance (Phase II).

They held the 9th session of the Vietnam-Laos steering committee for finance cooperation and the fifth exchange of financial staff between the two ministries.

In 2013, Hue said priority will be given to improving qualifications of the Lao financial sector’s officials and teachers by implementing financial school upgrade projects under the Laos Ministry of Finance.

Both sides will cooperate in finalising legal documents and the organisational apparatus of Laos’ financial sector, especially its newly established national reserves agency.

Hue assured his guest that the Vietnamese Ministry of Finance will continue to provide financial and technical support for its Lao counterpart.

Hue presented the State President’s Independence Order, first class to Lao Minister of Finance Phuphet Khamphunvong, and the Independence Order, second class, to Lao Deputy Minister of Finance Santiphab Phomvihane in recognition of their substantial contributions to strengthening the friendship, special solidarity and comprehensive cooperation between Vietnam and Laos.  

Minister Phuphet Khamphunvong conferred Laos’ ITSALA Order, second class, to Minister of Finance Vuong Dinh Hue and Deputy Minister of Finance Nguyen Cong Nghiep.

More overseas remittances pouring in

Many people are now selling large amounts of money remitted from overseas to banks, demonstrating their increased confidence in the Vietnam dong.

The trend will help stabilise exchange rates and increase the nation’s foreign currency reserves.

The State Committee of Overseas Vietnamese Affairs (COVA) estimates 2012’s overseas remittances hit US$10 billion, rising by 10 percent over the previous year.

A large proportion of the total originated from the more than 4 million Vietnamese expatriates and approximately 400,000 guest workers in Japan, the Republic of Korea, Malaysia, Taiwan (China), and the Middle East.

Simplified banking transaction procedures deserve some of the credit for last year’s increase in overseas remittances.

State Bank of Vietnam (SBV) HCM City Branch Director Nguyen Hoang Minh said remittances sent to HCM City accounted for 42–43 percent of the national total.

The city attracted around US$4.1 billion from overseas Vietnamese in 2012, with 70 percent of the amount invested in production and 23 percent injected into real estate, he said.

Dao Cong Hai, Deputy Head of the Department of Overseas Labour (DOLAB) under the Ministry of Labour, Invalids, and Social Affairs (MoLISA), predicts 2013’s total overseas remittances may climb to as high as US$1.8–2 billion, mostly arriving from Taiwan, Japan, Malaysia, and the Republic of Korea.

No price hike during Tet

As the traditional lunar New Year (Tet) holiday is drawing near, the trade sector has secured reliable supplies of goods to ensure there is no goods hoarding or price hikes.

Hanoi’s Department of Industry and Trade expects the local consumer demand will increase by 20-25 percent compared to normal months, focussed mainly on festive necessities such as food, food stuffs, confectionary, and beverages.

Nguyen Van Dong, Vice Director of the Department, said the purchasing power has risen over the past few days, listing best sellers including cakes and cookies, fresh foodstuffs, vegetable oil, instant noodles, canned food, beverages, clothes, and electronic appliances.

The price of foodstuffs has also begun to rise, with pork up 5-10 percent, and chicken 10-20 percent.

However, the Municipal Department of Industry and Trade has confirmed the city is maintaining a commodity supply sufficient to satisfy local demand.

The city has advanced VND376 billion to 15 businesses for stockpiling 6,000 tonnes of rice, 900 tonnes of pork, 350 tonnes of chicken, 6 million poultry eggs, 2,000 tonnes of vegetables, 550 tonnes of processed foodstuffs, 450 tonnes of frozen seafood, and 200 tonnes of sugar.

Meanwhile, HCM City has seen strong sales after the recent Promotion Month.  Local businesses have kept large amounts of Tet goods in stock, committing to stable market prices.

The Municipal Department of Industry and Trade has dispatched inspection teams to monitor supplies and food hygiene, nipping any goods hoarding in the bud.

Nguyen Khanh Hiep, Vice Director of the Municipal Department of Industry and Trade, said almost half of the demand for items such as vegetable oil, poultry meat, eggs, and processed foods, has already been met.

The Ministry of Industry and Trade (MoIT) has reported there is growing concern about a possible return of inflation after the consumer price index (CPI) surged 1.25 percent in January.

Healthcare service costs were adjusted in 10 provinces and cities in January, driving the country’s CPI up 0.37 percent, the ministry said.

The CPI would have risen only 0.9 percent in January if hospital fees were not adjusted, the MOIT explained, adding that high food and foodstuff prices in the pre-Tet month also contributed to the CPI hike.

At a review meeting on February 4, MoIT Minister Vu Huy Hoang warned that there is no room for complacency, noting that January’s CPI climbed despite low market demand.

He said any management laxity would affect the government’s inflation containment target this year.

 “Our primary task is ensuring plentiful supplies and keeping market prices in check,” said Hoang.

To date, 37 localities have implemented the price stabilization programme with a total of VND1,551 billion earmarked for stockpiling goods.

Foreign banks lend US$155 million to Vietinbank

Two foreign banks signed a US$155 million loan agreement with the Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank) in Hanoi on February 4.

They are Sumitomo Mitsui Banking Corporation (SMBC) and KFW IPE-Bank in Germany.

The five-year loan which needs no the guarantee from the Government or any the third party aims to support Vietinbank operation in the first months of 2013.

Vietinbank’s Chairman of the Board of Directors Pham Duy Hung said the bank will use the loan to prime the pump for enterprises and keep domestic projects purring along in the long run.

Christof Kuhnlein KFW Director in charge of the financial institutions, trade and commodity finance business, remarked that the loan agreement offers a new opportunity for Vietinbank to access the international capital market.

Mekong Delta city boosts rice and seafood exports

Can Tho exported 76,660 tonnes of rice and 14,166 tonnes of seafood in January, earning more than US$82 million, a year-on-year increase of 3.3 percent.

The city is expected to ship 860,000 tonnes of rice and 170,000 tonnes of seafood abroad by the end of this year, pushing revenue from the city’s ten key export items to US$1.46 billion—up 17.8 percent over 2012.

The Mekong Delta city is upgrading infrastructure, expanding industrial zones, and completing transport projects to boost its exports. It is also improving the quality of agricultural products for export and taking advantage of incentive policies.

Municipal authorities are intensifying measures designed to stabilise market prices and ensure an adequate supply of essential goods for domestic consumption.

In order to attract more investors, Can Tho is also simplifying administrative procedures, offering incentive tax policies, and improving its business climate.

VND16.9 trillion invested in power transmission

The Vietnam National Power Transmission Corporation (NPT) will invest VND16.9 trillion in the power transmission system in 2013, up 1.36 times from last year.

The NPT plans to put into operation 54 110kV – 500kV transmission lines and launch another 50 similar projects to improve the capacity of the northern power grid.

It has asked the Government to create favourable conditions to secure new loans from domestic and foreign financial organizations so that its power transmission projects will get off the ground soon.

130,000 jobs generated in January

Vietnam created jobs for 130,000 people in January, of whom 7,000 were sent to work abroad under labour contracts.

In 2013, the Ministry of Labour, Invalids and Social Affairs (MOLISA) aims to provide employment for 1.6 million people, including 85,000 guestworkers. It plans to reduce the urban unemployment rate to below 4 percent, and reduce the poverty rate by an additional 2 percent compared to 2012.

More than 1.4 million people secured employment last year, reaching 95 percent of the annual plan.

About 80,000 workers were sent abroad, meeting 89 percent of the set target. Taiwan recruited the largest number of Vietnamese workers (over 30,000), followed by the Republic of Korea (over 9,200) and Japan (over 8,700).

Linking the RoK’s tourism market to Thua Thien Hue

Thua Thien Hue’s provincial Department of Culture, Sports, and Tourism Director Phan Tien Dung has announced the February 4 signing of a cooperative agreement linking the province with the Republic of Korea’s tourism market.

The agreement details how the RoK’s Zeta Plan F & Investment Co, Ltd will serve as a brokerage company helping Korean tourism enterprises establish relationships with counterparts in Thua Thien Hue, maximising potential mutual benefits and industry development.

Zeta Plan F & Investment Co, Ltd’s 2013 plans include launching medical tourism ventures, tours exploring the World Heritage-listed attractions of Seoul and Thua Thien Hue, and cruise ship tours to Vietnam’s central coastal provinces.

Both sides have also reached consensus on applying recent material technology advances during future infrastructure upgrades. The Korean Company will contribute RoK’s material technology innovations to a rural road transport project in Thua Thien Hue Quang Dien district.

Ben Van Don Street opens for traffic in HCMC

The Department of Transport in Ho Chi Minh City opened Ben Van Don Street for traffic in District 4 on February 3.

The 2.5km street, stretching from Khanh Hoi Bridge to Nguyen Kieu Bridge, has been broadened from two lanes to six lanes at total capital VND253 billion (US$12.15 million).

Ben Van Don Street receives vehicles plying across Khanh Hoi, Calmette, Ong Lanh and Nguyen Van Cu Bridges from District 4 to reach District 1.

The road is parallel with Vo Van Kiet Highway and they are separated by Ben Nghe Canal.

Industrial production rises in January

The country saw a big increase in industrial production and export in January, according to the Ministry of Industry and Trade during a teleconference reviewing the country's industrial performance in Hanoi on February 4.

Industrial production rose by 21.1 percent in January, which was attributable to rising consumer demand ahead of the Tet holiday in February.

The country's export turnover posted 10.1 billion USD, a year-on-year increase of 43.2 percent. This has been hailed as a good signal for the country's export sector this year.

Also in January, the country's import is estimated to have reached 9.9 billion USD, a 0.4 percent increase from December 2012 and a 42.3 percent rise compared to the same period last year.

Speaking at the teleconference, Minister of Industry and Trade Vu Huy Hoang said that although export in January was up it remained unstable and he reminded businesses to focus on manufacturing high value items for export in the electronics sector to raise the country's export value.

The Ministry of Industry and Trade reported that the inventory index remained high in some industries such as the processing and manufacturing sectors. The sugar processing industry has seen a high inventory of 65 percent, a year-on-year increase of 18.2 percent.

The revenue collected from retail sales and services in January totalled 209 trillion VND, a year-on-year increase of 8.1 percent.

To ensure supply during Tet, price stabilisation programmes are being carried out in 37 cities and provinces. Businesses have also prepared a large volume of goods to be supplied for Tet.

Thailand intends to build giant oil refinery in Vietnam

The Ministry of Industry and Trade is seeking opinions from different ministries and agencies concerning a USD27 billion oil refinery project by the Petroleum Authority of Thailand (PTT) before submitting it to the government.
 
Authorities in Binh Dinh Province affirmed on January 5 that PTT requested building the large oil refinery there last year.

At a press conference held on February 4, the Deputy Minister of Industry and Trade, Le Duong Quang, said they have not yet seen any solid plans for the project after the work with Binh Dinh Province authorities.

"There is no specific information about the supply raw materials, capital or distribution. Binh Dinh Province authorities have said they would request more detailed plans from the investors," Quang said.

Currently the ministry is collecting opinions before sending a report to the Prime Minister.

The project would be a collaboration between PTT and Binh Dinh Privince for the last three years and is expected to involve other Vietnamese partners.

According to the investors, the refinery would be built in the Nhon Hoi Economic Zone with the capacity for producing 660,000 barrels per day. The estimated cost is around USD27 billion, and the hope is to penetrate markets in Vietnam, Japan, China and neighbouring countries.

45% of the crude oil will be imported from Middle East, 25% from Africa and 35% from South and Central America. The oil refinery would produce 11 kinds of refinery products, including qualified petroleum gas, A1 jet fuel and 10 other petro-chemical products.

If the project is approved, construction could start in 2016, with operations beginning in 2019.

Due to the large investment required, the public has expressed concerns over feasibility, but the Thai investors have insisted that they are determined and have the financial capacity to complete the project.

Masan buys beverage firm through subsidiary

Private sector company Masan Group (MSN) has announced that its consumer goods arm - Masan Consumer - would purchase 24.9 per cent of bottled beverage company Vinh Hao.

On the back of the transaction, Masan Consumer plans to launch a cash tender offer process at similar commercial terms to increase its stake. The potential transaction and tender offer will be subject to customary corporate and regulatory approval.

Established in 1930, Vinh Hao was Vietnam's first domestic mineral water producer. Its portfolio comprises of mineral water, purified water and mineral water based soft drinks. Masan Consumer is currently a market leader in sauces, instant noodles and instant coffee.

Strong retail expansion in 2012

Despite poor demand in the context of the current economic difficulties, the local market last year witnessed vigorous competition among existing retailers and newcomers.

Total sales of retail commodities and consumer services in 2012 marked up 16% against 2011, a modest growth compared to the 20-25% in previous years, the General Statistics Office reports. A.T Kearney removed Vietnam out of the top 30 global retail markets in terms of attractiveness but the nation has still remained potential destination to retailers who are racing to expand their networks in many different segments at home.

Supermarket systems had joined a tough competition to develop convenient food store chains during last year given the high economic efficiency of the business model. Nguyen Thanh Nhan, deputy general director of Saigon Co.op supermarket chain, noticed that investors and retailers now have focused on developing convenient food stores, though back in 2008 Saigon Co.op was the only company embracing the Co.op Food model.

Saigon Trade Cooperative Union as the owner of Saigon Food and the well-known supermarket chain Co.opMart, has additionally opened 24 Co.op Food stores, raising the total number of its stores to 55. Co.op Food has posted strong growth regardless of the on-going economic hardship, much higher than the average level of the whole system encouraging the firm to boost the development pace of the food store chain.

Similarly, Saigon Trading Group (Satra) has started expanding Satrafoods stores since the middle of 2011. Satra in 2012 alone opened 12 new stores, taking the total to 18 citywide. An executive of Satra said the firm will continue to concentrate investment on the segment in 2013, with the 19th store opened in HCMC’s District 4 today.

France’s retailer Big C has also opened seven convenient food stores bearing New Cho brand, including two opened last year. Big C has developed the store chain since 2011 and it even set up C Express brand with the same model to New Cho in the same year. Local producers have also shown their presence in the bustling market. For instance, Vissan specializing in making fresh meat and processed products now has 106 outlets selling and introducing not only its own products but also items made by other producers.

Foreign retailers who have been operational in Vietnam like Big C and Metro Cash&Carry and Shop&Go were busy carrying out expansion plans last year.

Retailer Big C of France’s Casino Group has this year opened three new supermarkets in Binh Duong, Can Tho and HCMC, raising its network to a total 21 in Vietnam.

Germany’s Metro Cash&Carry in 2012 put into operation seven distribution centers in the country.

South Korea’s Lotte Mart put into service Lotte Mart Dong Nai and Lotte Mart Danang late last year. Newcomers in the local industry like Japan’s Aeon has poured some US$109 million into a shopping center project in HCMC’s Tan Phu District and US$95 million into another in Binh Duong Province’s Thuan An Town while Family Mart has operated 37 stores in the nation so far.

Screening to continue in property market

The real estate market will probably continue to undergo screening this year, so more quick-buck opportunists will be eliminated, leaving the playground for professional and financially healthy investors.

Statistics of the Ministry of Construction show that 2,600 out of 56,000 enterprises active in construction and property trading dissolved or suspended operations in 2012. Among them, 2,110 were construction firms and the others were real estate companies, up 6% and 24% against 2011 respectively.

It is believed that if the market continued the current trend, the number of disbanded and inactive businesses would rise further. From another angle, this would be beneficial to the market for eliminating the profiteering property traders

Le Chi Hieu, general director of Thuduc Housing Development Corp. (Thuduc House), said 2013 would be a year for brave investors with enough money to buy cheap projects to further grow and wait for the market recovery.

The make-or-break movement depends on talent and skills of each investor. The important thing is which segment they will choose, high-end or low-end.

The market is leaning towards the low-cost segment, targeting low-income earners. The Government’s Resolution 02 issued early this year is also aimed at removing difficulties for this segment, focusing on condos of below 70 square meters each, priced at VND15 million per square meter.

The central bank’s governor Nguyen Van Binh in a directive on the monetary policy released last Thursday said the central bank would join hands with the construction ministry to draw up and issue a guideline for lending to buyers of low-cost houses and investors converting their projects into low-cost ones.

He added the central bank would set aside a sum for refinancing with reasonable terms and interest rates in a bid to help banks give loans to the aforementioned borrowers in the spirit of Resolution 02.

It is still unknown if this remedy will be effective, but the market has recorded positive changes as a number of enterprises decided to shift their projects to the low-cost segment.

In the northern market, at least four projects have been turned into low-cost housing projects. They are the apartment project AZ Thang Long of Thang Long Confectionery Co. Ltd., the high-rise commercial housing project Song Da developed by Song Da Urban Development Joint-stock Co. in Ha Dong District, the urban project Trung Van of Hanoi Construction Investment JSC in Tu Liem District, and the project of Tourist Material Joint-stock Co.

The shift towards the low-end segment is understandable since low-cost home developers can enjoy preferential loans, land use fee and corporate income tax.

In the southern market, several realty firms have increased investment in the low-cost housing segment, which will lead to a larger supply of budget condos in the coming time. In particular, Le Thanh Commercial Construction Co. is seeking permission for investment in two apartment projects in HCMC’s Binh Tan District.

The company’s director Le Huu Nghia informed his firm would build a low-cost housing project consisting of 2,500 apartments and a commercial one with about 900 flats.

Similarly, Thuduc House will develop small-sized apartments called S-Home, with each unit covering 40-60 square meters. The company plans to launch 700-1,000 S-Home apartments in District 9 and Thu Duc District in the coming time.

It is unknown how the market will respond to this kind of apartment, as well as how the supporting polices for the market will be carried out. However, one thing for sure is that with many projects in the low-end segment, a fierce competition will take place.

Inflationary pressure keeps building up

Vietnam must practice prudence if it is to maintain inflation at the single-digit level as the inflationary pressure keeps rising while response policies are not enough, say HSBC economists.

In January, headline inflation increased 7.1% against the same period last year, while the year-on-year rise in December was 6.9%. Compared to the preceding month, it picked up 1.3% in January, versus 0.3% in December, says a report on Vietnam’s macro-economic outlook released by HSBC on Monday.

The year-on-year food inflation rate grew from 1% in December to 1.3% in January. Without seasonal adjustment, food inflation rose 1.3% month-on-month this January, while in December 2012 it inched up 0.3% over the month before.

Meanwhile, the core inflation, excluding food and energy costs that are more seasonally impacted, remained high, at 12.6% in January, versus 12.2% in December.

Significantly higher core inflation, along with rising oil prices, makes headline inflation probably surge if food inflation also goes up. When China is on its recovery trend, global goods prices will likely increase, so Vietnam needs to be prudent if wanting to maintain the single-digit inflation.

The latest survey of HSBC to collect data for the manufacturing purchasing managers’ index (PMI) shows that enterprises are more concerned about input price hikes than the weak overseas demand. The gap between input and output prices are widening, giving manufacturers few chances to raise prices as they are suffering shrinking demand and fierce competition.

Meanwhile, the factors helping rein in inflation have not seen any positive change.

The domestic demand, which may help cope with external inflationary pressures, remains lackluster.

Although the country recorded positive economic data in January, the economic recovery is still fragile. For instance, PMI after surging in November 2012 slipped below the neutral mark in December and only inched up in January.

Export is growing strongly, but it is distorted by seasonal factors. The Lunar New Year holiday this year falls on February, while it took place in January last year, meaning export and import growths this February will be weak compared to the year-ago period.

The State Bank of Vietnam (SBV) has promised interest rate reductions, but any move to fulfill this promise will slightly affect credit growth.

Credit growth is put at 8.9% in 2012, down from 14.4% in 2011. Bad debt is still haunting the banking system, further eroding the credit demand.

“Therefore, we are concerned that the Government would inject credits into the troubled sectors without specific reforms to improve transparency of the financial sector and State-owned enterprises (SOEs). Such measures will pose more risks to the system rather than solving the radical challenges of the economy,” says the report.

HSBC experts say: “Should we worry about the solutions SBV has adopted to boost the domestic demand through interest rate cuts? It depends on the tools that SBV uses.”

If the central bank brought down open market operations (OMO) interest rate or lowered the reserve requirements, interest rate reductions would hardly promote credit growth because the slow growth at present is not caused by liquidity shortage but falling demand.

The Government must take measures to settle bad debt and improve efficiency of SOEs, with policies to convince citizens they are purifying the apparatus.

If the Government tried to prop up the ailing sectors such as real estate, demand would be stimulated. However, the radical problems of the economy, including improper resource allocation, would not be resolved, say HSBC experts.

“The sooner the Government brings about specific reforms to raise efficiency of public investment and improve the local business environment, the faster the country will realize its potentials,” says the report.

In the near future, Vietnam will lose its advantage of cheap workforce and have to face an increasingly tough competition, especially with ASEAN nations.

“Therefore, we are anxiously awaiting more good news from the Government. Restrained inflation will be an evidence to assess efficiency and commitment of the Government to the economy,” says the report.

Manufacturing PMI inches up

The Purchasing Managers’ Index (PMI) of the Vietnam manufacturing sector stood at 50.1 in January, versus 49.3 in December, says a report by HSBC released last Friday.

This is the tenth time HSBC has unveiled the Vietnam Manufacturing PMI based on the data from monthly surveys on operating conditions in the local manufacturing sector. The reading above 50.0 points to improvement in business conditions, while that below 50.0 indicates decline.

“The seasonally adjusted HSBC Vietnam Manufacturing PMI edged back above the 50.0 no-change mark. Although the headline index was consistent with a broad stagnation of the manufacturing sector, it was nonetheless above its series average of 48.9,” says the report.

Notably, production level rose for the third successive month in January, as companies benefited from a modest improvement in new order volumes from the domestic market.

However, overseas demand remained lackluster, leading to another sharp decrease in new export orders.

Vietnamese manufacturers reported lower levels of new work from the Eurozone and China. A number of respondents also ascribed weaker export volumes to subdued global market conditions.

January data signaled a further slight job growth in Vietnam’s manufacturing sector. Payroll numbers have now increased in each of the past four months, generally in response to the recent modest upturn in production volumes.

January saw a solid increase in average input prices, a marked turnaround from the reduction in the preceding month.

Higher purchase prices were linked to rising costs for raw materials and transportation. There were also reports of higher prices paid for imported goods, materials and services.

Lackluster demand and strong competition continued to erode the pricing power of local manufacturers and thus, output prices fell for the ninth month running. The rate of decline eased sharply, however, as a number of companies passed on higher raw material costs to their clients.

Vietnamese manufacturers maintained a preference for leaner inventory holdings during January, highlighted by further depletion of both raw material and finished goods stocks. The decline in inventories of finished products was the steepest in the 22-month series history.

Trinh Nguyen, Asia Economist at HSBC, said: “The expansion of the manufacturing sector in January points to a gradual recovery of the economy, although the process is still quite a bumpy one. Improved domestic demand lifted the output level while external demand remains sluggish, primarily dragged down by weak growth from the EU.”

“The significant rise of input prices, however, poses a risk to the sector as it raises costs for producers… Inflation is a concern, as it is trending up due to both an unfavorable base effect, a China recovery, and a rise of domestic demand,” she added.

Investment violators may be fined up to VND1bil.

Those committing any violations in the investment-planning sector may face maximum fines of VND1 billion for enterprises and VND500 million for individuals, which are much higher from the current ceiling of VND70 million.

This is specified in a draft decree on administrative fines put forth by the Ministry of Investment and Planning for public opinions.

According to the draft decree, violations in the use of State capital as well as the management of ODA loans, non-governmental aid, domestic and foreign investments in the country, and Vietnam’s investment in foreign countries will face heavy sanctions.

Violating enterprises and individuals will be warned or fined depending on the extent of their violations.

A fine of VND80 million will be imposed on enterprises committing violations which drive them into bankruptcy while a VND100-million fine will be slapped on those violating the management of public assets and business registration.

Besides, ones found with bidding and investment violations will be fined up to VND300 million, and the highest fine of VND1 billion will be given to enterprises violating zoning plans and construction investments.

Meanwhile, the maximum fine for individual violators will be half of enterprises’ levels.

Moreover, enterprises and individuals may have their license revoked or operation suspended.

The draft decree if approved will replace Decree 53/2007/ND-CP issued on April 4, 2007.

Purple sweet potato prices shoot up

After a long falling streak, prices of purple-fleshed sweet potatoes in the Mekong Delta have suddenly picked up on the threshold of the Lunar New Year.

Traders are now buying the first-grade purple sweet potatoes at VND1.1-1.2 million per 60-kilo bag, up VND500,000-600,000 against a month ago, said Son Van Luan, chairman of the sweet potato co-operative Tan Thanh in Binh Tan District, Vinh Long Province.

Meanwhile, red-fleshed sweet potatoes are currently sold at VND600,000-700,000 per bag, a rise of VND100,000-300,000 compared to one month ago.

Sweet potato growers in Vinh Long and Dong Thap attributed the sharp price increases to surging demand, while the supply is limited.

In addition to mainland China, many traders from Singapore, Malaysia and Hong Kong have recently come and placed bulk orders for purple sweet potatoes through Binh Thuan Fruits & Greens Co., said Luan.

“The leader of Binh Thuan Fruits & Greens has contacted me, asking for sale of purple sweet potatoes at VND23,000 a kilo, but we have turned down because the supply is now very small,” he said.

With the current prices, growers of purple sweet potatoes earn a profit of some VND180-200 million per hectare, according to the division of agriculture and rural development of Vinh Long’s Binh Tan District.

“In my experience, sweet potato prices will likely remain high until the end of March,” said Luan.

HCM City’s biggest travel center now open

Saigontourist Travel Service Company on Monday opened the biggest travel information center in HCMC, at 102 Nguyen Hue Street, District 1.

Having an area of 650 square meters, it consists of several booths providing information for both domestic and international tourists.

From next month, there will be other services such as hotels, insurance, shopping, ATM booths and cafés available at the center to serve tourists.

Tourists will be provided with free information in English, French, German, Russian, Japanese and Chinese and tourism maps. Employees at the center will provide information about art performances, festivals, events, hotels, tourist sites, shopping, food, souvenirs and traffic.

Besides, tourists can buy Saigontourist’s tours and services nationwide as well as services of other agencies. On the occasion of opening, the center will offer a 50% discount for customers buying half-day or one-day tours today.

“We want to make the center a venue providing travel information and services for our customers in particular and for international tourists coming to HCMC,” said Vo Anh Tai, director of Saigontourist Travel Service Company.

In addition to this newly-opened center, Saigontourist is also running Travel Information and Service Center at its office at 45 Le Thanh Ton Street, District 1.

According to Saigontourist, it provided services for over 450,000 domestic and international tourists last year, with tourism revenue amounting to over VND2.08 trillion, up nearly 26% from 2011.

HCM City keen to relocate Saigon Station’s repair shops

HCMC authorities are seeking approval from the Ministry of Transport for relocating repair shops in Saigon Railway Station in District 3 to make room for resettlement housing projects for locals whose land will be recovered in the coming time.

As per the city’s proposal, the existing Saigon Station as the key railway station in the south will be developed into a terminal square linked with Cach Mang Thang Tam Street and a station of the Metro Line No. 2 connecting Ben Thanh Market in District 1 and Tham Luong in District 12.

Construction of the square will cost a huge capital volume for making compensations for site-clearance and resettlement for affected locals living along Cach Mang Thang Tam Street. The area’s population density is crowded, so it is necessary to prepare resettlement housing sources to stabilize livelihood of local people there.

The city’s government asked the transport ministry to instruct the Vietnam Railway Corporation to move the railway repair shops from the station to Binh Trieu Station and transfer the area to the city for resettlement housing development.

The local government also urged the ministry to construct the elevated railway section running from Binh Trieu Station to Saigon Station soon to remove railway lines running across roads to reduce congestion and traffic accidents.

Ascott manages property in Hanoi

The Ascott Limited announced last Friday to have secured a management contract for a property project in the capital city of Hanoi, following a recent opening of the 100-unit Somerset Vista in HCMC.

The Singapore-based company said the new development named Somerset West Central Hanoi will join the local serviced apartment market with 252 units, allowing the company to better meet the accommodation demand in the country.

With the addition, the company further strengthens its position as the largest international serviced residence owner-operator in Vietnam with over 1,800 apartment units in 13 properties across four major cities including Hanoi, HCMC, Hai Phong and Danang.

Somerset West Central Hanoi will be situated in the Nam Trung Yen New Urban Area in Cau Giay District. When in place by 2016, the property will offer apartments ranging from studio, one- to three-bedroom units, which will be fully furnished with a well-equipped kitchen, separate work and living areas and home entertainment system.

“We remain confident in the long-term economic outlook of the emerging country, underpinned by its large, young workforce and pro-growth policies,” said Alfred Ong, Ascott’s managing director for Southeast Asia and Australia, adding Ascott’s serviced residences in Vietnam have maintained occupancies of over 80%.

Besides the property, Ascott will be opening other properties in Vietnam over the next few years. These include its first property in Hai Phong – Somerset Central TD Hai Phong City, which will open in 2014, and first property in Danang – Somerset Danang Bay, in 2015.

Ascott is a wholly-owned subsidiary of CapitaLand Limited, managing serviced apartments in Vietnam for nearly two decades. Besides running four properties in Hanoi, Ascott currently operates four properties in HCMC, including Somerset Chancellor Court, Somerset HCMC, Somerset Vista and Vista Residences.

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