Southern province sees leap in coffee exports

The southern province of Dong Nai exported over 14,300 tonnes of coffee in January, a rise of 23 percent against the same period in 2013, according to the province’s statistical office.

The commodity was mainly shipped to the US, Germany, Italy and the Philippines during the reviewed period.

Experts forecast Vietnam’s coffee exports will thrive in 2014 with surges to be seen in both value and volume.

Last year, the country exported 1.32 million tonnes of coffee, earning 2.75 billion USD, the fourth best performance of Vietnam’s exports.

Lang Son targets increased border trade

The northern mountainous province of Lang Son has identified trade with China’s Guangxi province, with which it shares a border line stretching 231 km, as key to unlocking the locality’s economic development potential.

Border trade has significantly benefitted Lang Son over the past two years, said Nguyen Quoc Hai, Deputy Director of the provincial Department of Industry and Trade.

The official reflected on the province’s total import-export revenue in 2012 which exceeded 2.2 billion USD, stressing that this was the first time the locality’s export turnover has surpassed its import value.

Last year, the figure climbed to 2.5 billion USD, up 19.7 percent against the previous year, of which export value made up 56 percent to 1.3 billion USD, he added.

Lang Son mainly shipped abroad cassava, fruits and farm produce while importing autos and auto appliances, machinery, chemicals and production materials.

According to Hai, with more than 3.6 trillion VND (169.2 million USD) contributing to the State budget last year, the province has invested in upgrading infrastructure and accelerating border trade.

Nguyen Tien Bo, head of the Huu Nghi Border Gate’s Customs Branch, said the Lang Son Customs Department has aided struggling businesses while coordinating with relevant agencies to organise dialogue with them.

Thanks to these efforts, the Huu Nghi border gate has attracted a large number of businesses, he said.

Lang Son targets total import-export revenue of over 2.5 billion USD in 2014, up 0.8 percent over 2013. Of the amount, export value stands at more than 1.4 billion USD.

To fulfill the target, the province will give more importance to infrastructure development, market building, investment attraction and the reform of customs procedures.

Lang Son will also organise fairs in the province and China’s Pingxiang town, plus regular meetings for the two countries’ businesses to handle any operational difficulties they are facing.

Vietnam more selective in FDI attraction: official

In an effort to optimise national development, Vietnam is becoming more selective regarding foreign direct investment (FDI), screening and declining projects incompatible with long-term goals. Report by radio The Voice of Vietnam (VOV).

Deputy Minister of Planning and Investment Nguyen Van Trung at a recent media interview pointed to what was once Vietnam’s undiscerning hunger for FDI. Resources were needed to fuel the opening economy and address employment problems.

Trung said Vietnam’s focus has now narrowed to environmentally friendly, energy efficient projects that use advanced technology and operate in crucial areas like the support industries, manufacturing and processing industries, and agriculture.

He explained the shift in relation to finalising the legal framework for FDI, first and foremost of which involves revising the Enterprise Law and related legislation, weighing the advantages of decentralising FDI attraction and management, and fine-tuning policies promoting investment.

Vietnam needs to improve infrastructure, cultivate sufficiently qualified human resources, develop support industries, and accelerate capital disbursement.

The official stressed there is no discrimination between local and foreign businesses, saying FDI businesses operate in Vietnam, use a majority of Vietnamese workforce, and make large contributions to the State budget.

The FDI sector generates 25 percent of the country’s total social investment, 18 percent of GDP, 64–67 percent of export earnings, and 12–14 percent of State budget revenue. It creates millions of jobs and helps balance the country’s trade.

Rather than decrying the dominance of FDI businesses in head-to-head competition with domestic rivals, Trung welcomes it, suggesting Vietnamese businesses could use the push to hone their operations and shore up their independent market viability.

Vietnam attracted more than 20 billion USD in FDI during 2013 in the context of ongoing economic difficulties.-

OV investment to rise if policies improved: expert

Vietnam has so far attracted 3,600 overseas Vietnamese businesses with total registered capital of 8.6 billion USD.

According to Deputy Chairman and General Secretary of the Overseas Vietnamese Entrepreneurs' Association Bui Dinh Dinh, if sound solutions and policies are in place, overseas Vietnamese capital inflows into the country will increase strongly.

Dinh told the Vietnam Economic News in an interview published on February 7 that overseas Vietnamese have invested back in Vietnam for reasons such as stable politics, low production costs, low labour costs, abundant material sources and their love for the country and desire to contribute to developing Vietnam and providing local jobs.

Generally, overseas Vietnamese businesses spoke highly of the Vietnamese investment environment, he said. However, those who wish to make investment have still faced barriers and, for this reason, they have begun expanding their investment to neighbouring countries like Laos, Cambodia and Thailand.

Dinh said in the short run, apart from major tasks including further reforming and simplifying administrative procedures for investment projects, the Government needs to work on specific policies and measures to encourage and support overseas Vietnamese investors such as exempting and reducing land and corporate income taxes during the first 3-5 years of operation.

“It also needs to improve economic transparency, law equality and the quality of human resources, while at the same time stabilising its policies. If this happens, overseas Vietnamese investment inflows into the country would soar in the near future,” he added.

Apart from direct investment, overseas Vietnamese have increased their remittance to the country, which amounted to almost 8.6 billion USD in 2011, almost 10 billion USD in 2012 and an estimated 10.6 billion USD in 2013, making Vietnam among the top ten countries worldwide in terms of overseas remittances.

Most of the money has been invested in domestic production, real estate and trade, thus creating many jobs.-

Work resumes on upgrades of North-South highway

Work on upgrades of a 76.44-km section of National Highway 1A that runs through Cam Xuyen and Ky Anh districts in the central province of Ha Tinh resumed on February 6 after the Lunar New Year (Tet) holidays.

The project was launched on September 5, 2013, with the Ha Tinh provincial Department of Transport, the Traffic Safety Project Management Board and the Project No.6 Management Board of the Transport Ministry, as the major investors.

At the ceremony, the investors, constructors and supervisors committed to speeding up the project’s tempo, striving to complete it in December this year.

The same day, all businesses and units involved in upgrading a section of National Highway 1A running though the central province of Quang Binh also returned to work.

The work on the 144-km stretch needs a total investment of more than 6.9 trillion VND (324.3 million USD).

The North-South highway, which is of significant importance to the country’s socio-economic development and national defence, has seriously deteriorated in recent years, leading to severe traffic congestion and accidents.

An Giang strives to become Mekong tourism hub

Leaders of An Giang have planned to turn the province into the main tourism centre of the Mekong Delta by capitalising on its potential.

By diversifying tourism products, upgrading infrastructure and training human resources, in 2014, the province hopes to attract 5.8 million local and foreign tourists, a growth of 2 percent against 2013.

According to provincial authorities, religion-related tourism is among the new angles they are hoping to maximise.

As part of this, tourists will visit Cam and Sam mountains, Mother Goddess Temple, and take part in traditional ox racing held annually by the local Khmer ethnic groups.

The province also plans to build a Chau Doc entertainment complex and Cam Mountain site aimed at medical tourism with cool weather on the mountain, similar to the well-known Da Lat resort city in the Central Highlands.

Meanwhile the Tra Su cajuput forest will focus on eco-tourism, with activities including fishing and boating through the forest in addition to visits to historical sites.

Alongside this, the canvas-weaving craft villages of the Cham ethnic groups will also be restored.

Famers' Association of An Giang province recently introduced a tour package entitled 73 Hours in That Son (Seven Mountains), which gives tourists an introduction to typical farming practices and families in the locality.

Last year, 13,000 tourists including 600 foreigners took the tours which involved them in local life, such as farming, fishing, cooking and listening to traditional music.

In the previous year, with support from Dutch farmers, An Giang announced an investment of 18.4 billion VND (0.86 million USD) for agriculture tourism development in the province.

Farmers of 15 communes in the province registered to participate in the programme. Each commune now has five to 10 families involved in tourism services.-

Year of the Horse hoped to boost leather industry

Export revenue of bags and suitcases was 1.92 billion USD in 2013, up by 26 percent year-on-year.

Local manufacturers are expecting better growth this year, with increasing global market demand prompting t he Vietnam Leather and Footwear Association (Lefaso) to forecast an export growth of 30 percent for this group in 2014.

According to Lefaso, many foreign enterprises are seeking providers of finished products, and some manufacturing factories are even moving to Vietnam from China and Indonesia to gain access to lower tariffs and a relatively better-skilled workforce.

To benefit from preferential tariffs under various free trade agreements and the Trans-Pacific Partnership Agreement, several foreign companies of ancillary industries have also invested in Vietnam.

Nguyen Duc Thuan, Lefaso chairman, told VnEconomy that eight out of the 10 global leading brands had expressed interest in moving their orders to the country.

The movement will create a great opportunity for the local firms to expand production. Local firms would strive to increase investment, expand production scales, and improve the quality of their products to compete with foreign invested firms in Vietnam.

Businesses primarily use domestic leather to make student handbags and backpacks, whereas higher quality materials are imported to make luxury handbags.

Thai Binh Shoes is a pioneer in the manufacturing of luxury handbags for world-famous brand names, including Coach of the US.

The largest importers of made-in-Vietnam bags and suitcases are from North America (44 percent), the European Union (28 percent), and Asia (21 percent).

In the past, foreign investors dominated the handbag export market. However, domestic businesses have gotten into it over the past two years and set their sights on becoming suppliers to world-famous brands.

Bags and suitcases were part of the leather and footwear exports worth a total of 10.3 billion USD last year, an increase of 18 percent over the value of exports in 2012.

The export value of footwear products was estimated at 8.4 billion USD in 2013, which is 15 percent higher than the previous year, while the export value of handbags surged 26 percent from the previous year to 1.9 billion USD, according to Lefaso.

As the industry increased the use of local inputs for production, it only paid 3.7 billion USD for raw material imports last year, which widened the trade surplus to 6.6 billion USD, noted Thuan.-

Farm exports reach 2.32 bln USD in January

Vietnam earned an estimated 2.32 billion USD from export of farm, forestry and fishery products in January, down 9.7 percent against the same period in 2013, according to the Ministry of Agriculture and Rural Development.

Specifically, farm products were estimated to rake in 1.17 billion USD, down 17.9 percent, while forestry items were to bring in 534 million USD, up 3.3 percent and fishery, 552 million USD, up 13.9 percent.

Decreases were seen in several major export staples such as coffee, rubber, pepper and cassava products with rubber suffering the strongest decline.

In the year’s first month, Vietnam exported 90,000 tonnes of rubber worth 199 million USD, down 17.5 percent in volume and 32.8 percent in value over last January.

In 2013, Vietnam's agro-forestry-fishery exports hit about 27.47 billion USD.-

Quang Ngai-based ports have exported a whopping 137,000 tonnes of wood chip to China and Singapore in just three days of the traditional Lunar New Year (Tet) from February 2-5.

The local Gemadept-Dung Quat international port successfully shipped 60,000 tonnes of the product to Singapore, while the Dung Quat port 1 exported 67,000 tonnes of wood chip to China.

This was the first time the two ports have sent abroad such a big volume of wood chip during Tet.

The former strives to ship 1.6 million tonnes of wood chip to China, Japan, the Republic of Korea and Singapore in 2014.

Its wharf is being upgraded to help ships of up to 70,000 DWT land safely.

The wharf is expected to serve as the largest of its kind in the central region, welcoming ships serving major projects including the Singaporean Sembcorp’s 1,200 MW thermal power plant.

Tien Giang expands fruit growing area

The Mekong Delta province of Tien Giang has expanded the growing area for local key fruits to almost 33,000 hectares, hoping to produce nearly 640,000 tonnes of fruit on an annual basis.

The key fruits have been named as Hoa Loc mango, Co Co grapefruit, Ngu Hiep durian, Tan Phuoc pineapple, Vinh Kim star apple, Cho Gao dragon fruit and Go Cong cherry, according to Director of the local Department of Agriculture and Rural Development Nguyen Thanh Can.

Besides expanding the cultivation area, the province has applied advanced farming techniques and manufacturing processes in line with Vietnam Agricultural Practice (VietGap) standards, in order to better fruit quality.

As a result, local farmers can earn an extra 100-200 million VND per hectare a year, double or three times higher than that from rice growing. Some arboriculturists even fetched a record profit of 500 million VND (23,800 USD) per hectare per year.

The locality has set up 43 agricultural cooperatives, including 17 producing and selling fruits with star apples and pineapples meeting Global GAP and VietGAP criteria.-

HCM City aims for more FDI

HCM City has already licensed 15 new foreign direct investment (FDI) projects totaling US$19.9 million in January, up 15.4% in volume and 51.5% in value from a year earlier.

The city also authorised US$3.3 million in additional investment for two projects, bringing total FDI capital to US$23.2 million or 32.4% higher than January 2013.

City authorities licensed 1,415 newly established businesses with registered capital of VND7,111 billion.

But other Vietnamese cities and provinces saw January 2014 FDI flows slow to a trickle, down 50.6% in volume and 52.4% in value compared to a year ago.

Garment exports off to a good start

Orders placed with garment factories in the first days of the Lunar New Year herald a bonanza for the garment sector, boosted by breakthroughs created by the Trans-Pacific Partnership (TPP) Agreement.

Members of the National Textile and Garment Group (Vinatex) customarily place their orders in the first three months and this year’s rise bodes well for 2014 being an opportunistic year for Vietnam tapping into the burgeoning global garment market.

In recent days, the Duc Giang Garment Company has been busily packing products for export to the EU, the US and Japan. Workers at its 20 factories in Hanoi, Thai Binh, Ha Nam, Thanh Hoa, Thai Nguyen and Hoa Binh provinces are in a cheery rush to fill the orders on the first days of the Lunar New Year.

Many other garment businesses are also sanguine about the prospects for exports this year. They are actively searching for quality domestic materials to reduce dependence on imports, mindful of the need that domestic suppliers ensure delivery of goods on schedule.

This contributes to raising a competitive edge and is attracting more orders from well-known trademarks in Spain, Germany, the UK, the US and Japan.

The Dong Tien Garment Joint Stock Company is not only focusing on keeping its traditional clients but is pursuing expansion into new markets with specialty designed products, such as clothes for skiing, elastic coat and underwear.

Particularly, the TNG Trade and Investment Joint Stock Company has invested heavily in promoting its brand and building a domestic distribution network with clothes for teenagers. The TNG brand is now gaining popularity across the country and is favoured by many young people.

Garment 10 Company Director General Nguyen Thi Thanh Huyen says since early this year the company has received a large number of orders for exports so it is stepping up production of high quality shirts in Thieu Do district, Thanh Hoa province and 12 others in Quang Binh province, as well as one production line to make luxury jackets in Thai Binh province.

Nguyen Ngoc Lan, Vice General Director of the Nha Be Garment Corporation, says like many other Vinatex members, Nha Be orders are up this year and it is hopeful exports will be better than the previous year.

A leading Vinatex member, the corporation has continually poured investment in production to meet the increasing demand of customers. European clients are shifting their original design manufacturer (ODM) products to Vietnam to reduce human cost in residing countries and save time, Lan says.

To seize the opportunity, Nha Be has built a sample unit to make ODM products for European clients only. It has drawn up a carefully thought out marketing plan and if it is successful, Nha Be and other garment makers stand to gain a competitive edge.

Vinatex General Director Tran Quang Nghi says Vinatex has gradually reduced its dependency on imported materials for exported products and promoted self-designed products to increase the added value of the products.

It has focused on quality improvements, helping the group move to a higher position in the global garment chain and businesses make full use of capital assets available.

Vinatex has obtained both targets of restructuring – market and investment efficiency, Nghi says.

Quality growth is a key task of Vinatex this year, he says, adding the group will keep export growth of 12% and raise ODM products from 10% in 2013 to 12-14% this year.

The group will expand its “lean” manufacturing method which has been successfully applied in some businesses to reduce inventory and raise competitiveness, Nghi says.

With 57 projects afoot, 2014 is expected to be a boom year in investment for Vinatex. Most projects centre on developing material areas in an effort to raise the ratio of local contents in products – a necessary step towards grasping the opportunity brought about by TPP and breaking into the global market.

Dong Nai’s coffee exports rise sharply in Jan

Coffee exports of Dong Nai province climbed impressively by nearly 23% in January from a year earlier to more than 14,300 tonnes, reports the local Statistics Office.

The Office cited the largest export markets as the US, Germany, Italy and the Philippines.

Minh Huy Company, Tin Nghia Corporation, Armajaro Vietnam Company and Dong Nai Import Export Processing Agricultural Products and Food Company were listed as the major coffee exporters from Dong Nai.

The price of coffee beans is now hovering around VND35,000-35.500 per kilo.

According to government economists, Vietnam’s coffee industry is forecast to see a sharp increase in both volume and value in 2014.

An Giang to join “US$1 billion export club”

The southern province of An Giang plans to join the “US$1 billion export club”, focusing on rice, tra fish, garments, and fruits, and vegetables.

As well as increasing industrial zone investment to promote the processing industry’s development, the province will attempt to encourage rural industrialization by applying manufacturing engineering principles to agricultural production.

It will also expand trade promotion in emerging markets to raise the export value of important commodities, ensure traditional markets are not neglected, and strengthen export quality management.

An Giang has drafted targeted policies encouraging businesses to invest in fields using advanced technology. It will support agro-forestry and seafood businesses looking to broaden their customer base and work to improve the international reputation of provincial trademarks.

While acknowledging many risks, the provincial Department of Trade and Industry forecasts the global economy will rebound, creating opportunities for its rice, fish, and frozen produce exporters.

The domestic economy’s signs of recovery and business policy reforms in late 2013 lend additional weight to An Giang’s optimism.

Businesses shift to social media services

Businesses are currently making full use of social media to access clients, promote brands and increase turnover.

Vietnam E-commerce Index 2013 statistics show 43% of surveyed companies have their own websites and 37% promote brands through social networks.

Another survey recently conducted by Nielsen, a leading global information and measurement company, shows a large number of Vietnamese people tend to use mobile phones to search for information about discounts and review products they want to purchase.

The strong development of Over-the-top content (OTT) services, particularly on mobile phones, has helped promote this type of consumerism.

Domestic OTT service providers are going into competition with foreign rivals such as Viber or Line to get the lion’s share.

HCM City, Bac Ninh most productive localities

More than 30 per cent of the provinces and cities nation-wide enjoyed an export turnover of over US$1 billion last year.

According to data from the General Department of Customs, HCM City and northern Bac Ninh province are the two most productive localities, earning more than $25 billion each from exports.

The Song Hong (Red River) Delta, Cuu Long (Mekong) Delta and the east-southern regions earned the most, with five localities from each region earning over $1 billion from exports last year.

Bag, suitcase exports fetch $1.92b

Export revenue of bags and suitcases was up by 26 per cent, reaching US$1.92 billion in 2013.

Local manufacturers are expecting better growth this year, with increasing global market demand.

The Viet Nam Leather and Footwear Association (Lefaso) is forecasting an export growth of 30 per cent for this group in 2014.

According to Lefaso, many foreign enterprises were seeking providers of finished products. Some manufacturing factories are even moving to Viet Nam from China and Indonesia to gain access to lower tariffs and a relatively better-skilled workforce, the association said.

To benefit from preferential tariffs under various free trade agreements and the Trans Pacific Partnership Agreement, several foreign companies of ancillary industries have also made investments in Viet Nam.

Nguyen Duc Thuan, Lefaso's chairman, told VnEconomy that eight out of 10 global leading brands had expressed interest in moving their orders to Viet Nam.

The movement will be a great opportunity for the local firms to expand production. Local firms would strive to increase investments, expand production scales, and improve the quality of their products to compete with foreign-investor-driven firms in Viet Nam.

Businesses primarily use domestic leather to make student handbags and backpacks, whereas higher quality materials are imported to make luxury handbags.

Thai Binh Shoes is a pioneer in the manufacturing of luxury handbags for world-famous brand names, including Coach of the United States.

The largest importers of Made-in-Viet Nam bags and suitcases are from North America (44 per cent), the European Union (28 per cent), and Asia (21 per cent).

In the past, foreign investors have dominated the handbag export market. However, domestic businesses have gotten into it over the past two years and have set their sights on becoming suppliers to world-famous brands.

Bags and suitcases were part of the leather and footwear exports worth a total of $10.3 billion last year, an increase of 18 per cent over the value of exports in 2012.

The export value of footwear products was estimated at $8.4 billion in 2013, which is15 per cent higher than the previous year, while the export value of handbags surged 26 per cent from the previous year to $1.9 billion, according to Lefaso.

As the industry increased the use of local inputs for production, it only paid $3.7 billion for raw material imports last year, which widened the trade surplus to $6.6 billion, noted Thuan.

Central Highlands provinces connect to boost tourism

The provinces of Lam Dong, Dak Lak, Dak Nong, Gia Lai and Kon Tum have joined hands to develop infrastructure and design various kinds of tours to popularise regional culture to serve the 2014 national tourism year, themed “Central Highlands, Great Jungle”.

Promotion campaigns have been organised to introduce tours to areas and villages of ethnic minority people in the region.

Such sites as Da Lat in Lam Dong and Don village in Dak Lak have received due attention and become popular destinations for both domestic and foreign visitors.

Last year, the region welcomed five million tourists from home and abroad, earning 8.134 trillion VND (387.3 million USD).

However, there are still shortcomings that need to be addressed to make full use of the region’s tourism potential.

Currently, travel agents only pay attention to developing eco-tourism and tours attached to culture, neglecting trekking due to the high investment needed, thus diverse tours are lacking.

Furthermore, the erosion of the space of “Gong” culture, which was recognised as an intangible cultural heritage by UNESCO, and forest destruction pose challenges for the provinces.

The Central Highlands has been recognised as a land of mysterious mountains and forests with a significant population of ethnic minorities whose varied customs and lifestyles are an anthropologist's delight.

The region is also home to some of the most endangered species in Vietnam and Southeast Asia, such as the Indochinese tiger, the gaur, the wild Asian water buffalo and the Asian elephant.

The rich and unique natural beauty and cultural diversity make it an ideal site for tourism development.

The 2014 national tourism year is a good chance for the five provinces to find ways to tap the region’s tourism potential.

A series of tourism promotion activities will be held throughout the year, including a traditional brocade-weaving festival, a traditional costumes show, a national chess tournament, a traditional instruments festival, a food festival, a sport-culture festival and an international gongs festival.

Various new tours will be designed for tourists such as Jungle Tours to Madagui Forest, Dambri Waterfall, Pongour Waterfall, Tuyen Lam Lake, Langbiang Mountain; golf holidays in Da Lat; and tours following the footsteps of French biologist Alexandre Yersin who discovered the Langbiang plateau in 1893.

The Central Highlands region plans to turn tourism into an economic spearhead between now and 2030, contributing to socio-economic development, poverty reduction, social security and maintaining security and social order.

Specifically, the region sets to welcome 2.7 million domestic visitors and 450,000 foreign tourists, earning 260 million USD in 2015.-

HCM City’s new VND115 billion bridge

The HCMC Department of Transport closed the Kieu Bridge on Tuesday to facilitate construction of a VND115 billion alternative.

This is an important bridge linking districts 3 and Phu Nhuan with the city center and is funded by the World Bank (WB).

Kieu Bridge is the last phase of a project to build four bridges across Nhieu Loc-Thi Nghe and Tau Hu canals.

Earlier, Bong, Le Van Sy and Hau Giang bridges have been closed to make way for construction of new bridges. WB has funded nearly US$37 million for the construction.

The new bridges are expected to be completed before October.

To help prevent traffic jams the department has built two temporary bridges. Besides, vehicles have been instructed to use alternative routes in this area.

Sagri to boost investment in HCMC

Saigon Agriculture Incorporation, or Sagri, will develop several slaughter house and milk processing plant projects in HCMC’s Cu Chi District this year.

Huynh Huu Loi, Sagri’s board chairman, said the cattle and livestock slaughter house project is part of a plan to move polluting slaughter houses out of the city center. The enterprise also has plans to build a milk processing plant in the district and is considering selecting a trademark for the dairy product.

Last year, Sagri met many challenges in business and production activities as meat and egg products were sold at below cost between August and September. Meanwhile, latex prices plunged by over a half against 2012, affecting the firm’s business results.

The enterprise obtained VND175 billion in pre-tax profit, meeting 44% of last year’s target.

Sagri launched a wastewater treatment plant of An Nhon livestock slaughtering center into operation in 2013. It expects to begin the trial run of a similar plant at Nam Phong slaughtering center this month.

LOTTE Mart seeks Vietnam suppliers

South Korea’s LOTTE store chain is searching for Vietnamese suppliers as it has sent a team to the country to work with some domestic companies.

Wood processor Duc Thanh was one of four domestic companies LOTTE’s purchasing department has worked with, said Lee Eun Seung from the purchasing department of LOTTE. Supply contracts, if any, would be signed after the Vietnam visit this time.

LOTTE would be distributing Vietnamese products at 150 stores in its worldwide retail system.

The LOTTE team also visited Big C and Metro stores in HCMC in order to look for any appropriate items for distribution at its LOTTE Mart stores. Vietnamese suppliers, when chosen, would ship their goods directly to LOTTE Mart stores worldwide.

A LOTTE representative said the company was shifting orders for goods from China to Vietnam due to better prices and quality, and Koreans’ increasing preference for Vietnamese goods.

Tran Thuy Minh Tram, deputy sales director of Duc Thanh, said the items which LOTTE is interested in were chairs and hangers and that since her firm had already shipped products to LOTTE Mart stores, it would be convenient to clinch new supply deals.

South Korea has emerged as a major market for Duc Thanh in the last two years, Tram said, adding South Korean customers, including LOTTE Mart, now account for around 30% of Duc Thanh’s export volume. Duc Thanh’s annual export revenue averages out at about US$10 million.

Net increase in foreigners buying shares

The local market reported positive foreign net buying value since September, as investors were expecting approval of higher foreign limit ownership (FOL) in listed enterprises.

Last month, foreign investors bought over VND4.2 trillion worth of shares on the Hochiminh Stock Exchange (HOSE) while selling over VND2.6 trillion. They posted up a net buying value of around VND1.6 trillion, a 25% rise against the previous month, despite fewer sessions due to the Lunar New Year holiday, or Tet.

This was the fifth consecutive month foreigners reported net buying value in the local market.

On the Hanoi market, foreigners also bought net shares in January after staying on the selling side in the previous month. They bought VND523 billion worth of shares while selling VND268.8 billion.

Concerning the FOL increase, Vu Bang, chairman of the State Securities Commission, said that the draft with some new regulations has been submitted to the Government. The Government is collecting suggestions from related agencies.

The issue has drawn much attention from foreigners as most promising stocks have seen their foreign room filled up. Among 302 enterprises listed on HOSE, 21 stocks including VNM, DHG, HCM and FPT have no more room left for foreign investment. These firms have reported positive growth rates over the past few years.

Meanwhile, large investment funds usually target large-caps with strong liquidity. For small-caps, they will meet challenges in transactions due to poor liquidity.

The director of a foreign investment fund said that higher FOL, though, at any level will offer more opportunities to foreign players.

In Vietnam right now, investors are less interested in the macro economy. They care more about the real situation of businesses. They want to know whether the firms could make a breakthrough and sustain development after the economy recovers and the Government’s incentives reduce.

At present, foreign investors have regularly received company update reports released from securities firms and investment funds to consider disbursement in the local market, the director said.

Foreign players are also expecting the listing of large enterprises such as MobiFone and Vietnam Airlines. As a fund has capital of up to US$500 million, it is not easy to invest in Vietnam as there is not enough room to disburse money, the director said.

VAMC likely to sell some bad debt this year

VAMC, the country’s leading debt trading firm, may sell dozens of trillions of dong worth of bad debt at book value this year following a classification of debt it has bought from commercial banks nationwide.

Nguyen Quoc Hung, vice chairman of the company, told the Daily that his firm had no plan to purchase more bad debt early this year so that it could focus on reviewing and revising documentation for the bad debt it had acquired.

The company will also issue several hundred billion dong worth of special bonds for the banks that have transferred bad debt to it, and classify bad debt for settlement.

VAMC will classify debt into groups of tradable and non-tradable debt by sector or type of mortgage.  For tradable debt, Hung said, the company will either sell it or ask the debtor in the manufacturing sector to pay and sell certain real estate on signs of the property market warming up.

“We had sold more than VND100 billion worth of real estate debt by end-2013,” he noted.

In addition to purchases of bad debt at book value, the firm will take over more bad debt at market prices and sell it on to interested investors. It is mapping out a plan for this.

VAMC is planning to restructure a couple of cash-strapped enterprises from which it has acquired bad debt from banks, exempt or reduce the interest on some debts, and raise funds from foreign sources to restructure the debt-ridden businesses.

Hung said VAMC could sell VND70 trillion to VND100 trillion worth of special bonds to finance additional debt buying this year.

By the end of last year, it had bought VND38.9 trillion worth of bad debt by issuing VND32.4 trillion special bonds.

Securities firms still in distress in tough market conditions

A majority of securities firms have entered into the new year with great uncertainties ahead as the stock market has yet to get out of the woods.

Up to 58 of 94 stock brokerages are facing huge losses, five are being monitored due to their poor performance, and nine under special surveillance.

A latest report which the State Securities Commission sent to the Ministry of Finance says that last year SSC had ordered six brokerages to stop stock trading consulting, two to suspend securities trading, four to withdraw from stock issuance underwriting services, and one to stop providing stock investment consulting.

The commission also allowed two stock brokering companies to merge, three to be disbanded, and two to stop stock custody service.

The tough business conditions last year led to 15 stock brokerages to disappear from the market. More firms are expected to succumb to the ongoing difficulties this year as a number of companies are in the process of implementing merger plans to strengthen their operations.

The commission has requested securities firms to submit their financial safety reports every two weeks, instead of each month.

Last year saw SSC conducting 66 scheduled and snap inspections into securities firms, fund management firms, listed enterprises, auditing firms, and transactions by individual and institutional investors.

The commission issued 102 decisions imposing fines of over VND7.7 billion on individuals and organizations over violations.

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