Germany’s ODA funds afforestation efforts in Hoa Binh province

Nearly 2,600 ha of forest have been cultivated in the northern province of Hoa Binh under a project using official development assistance (ODA) from the German Government.

The work was kick-started in May 2007 in Hoa Binh city and Luong Son, Kim Boi, Lac Son and Ky Son districts, focusing on forestation, community-based forest management, and biodiversity conservation.

According to Deputy Chairman of the provincial People’s Committee Nguyen Van Dung, the project has helped improve the local living standards and the environment.

In 2013, more than 227,000 ha of land nationwide were covered with trees, according to the Ministry of Agriculture and Rural Development.

The country aims to raise the rate of forest coverage to 41.5% this year.

Vietnam studies Japanese ‘Abenomics’ model

A Vietnamese delegation led by Head of the Party Central Committee's Economic Commission Vuong Dinh Hue is on a six-day visit to Japan with the aim of learning more firsthand about Abenomics and obtaining an answer to the question.

The delegation is exchanging experience with Japanese research institutes and agencies in building and implementing the Abenomics economic model through fiscal and monetary policies and economic growth policies.

They are also seeking cooperative opportunities in economic development and taking fact-finding tours of economic models in typical Japanese localities and multinational groups.

Hue and his entourage have worked with Vice President of the Liberal Democratic Party Masanhiko Komura, Chairman of the Lower House Budget Committee Toshihiro Nikai and a host of other Japanese politicians.

During their visit from August 5-10, they have also made several fact-finding tours of Kanagawa and Fukuoka prefectures as well as some companies like Nissan Motor, Sumimoto and Sozitsu.

During meetings, Japanese representatives are expressing an avid interest for the two sides to further promote partnership for economic development and strategic investment in finance and banking and properly implement signed agreements in economics, trade and industry.

TPP creates obstacles for timber processing sector

The Trans-Pacific Partnership Agreement (TPP) may signal golden opportunities for exports in many of Vietnam’s sectors, but it is creating big challenges for the timber processing.

Pham Minh Duc, an expert from World Bank (WB) told this  at a conference on economic and timber business sector prospects in Ho Chi Minh City on August 7.

Duc explained that according to TPP regulations timber products have to achieve a localization rate of 55% and Vietnamese enterprises are allowed to import a maximum of 45% of materials from outside the TPP bloc. Achieving this localization rate is a major obstacle for wood products to comply with.

A report by WB research experts shows that over 80% of materials needed by Vietnamese wood processing firms are imported from foreign countries. On average, Vietnam has imported nearly 3.5 million cubic metres per year, of which, sawed timber imports serving the processing industry accounted for 65%, well over the allowed localization rate.

Despite facing many difficulties in the long term, development prospects,  Duc predicted a bright outlook for the timber processing sector while emphasizing the Government‘s  important role in stimulating the growth of the industry.

Phan Chi Dung, head of the Ministry of Industry and Trade'(MoIT) Light Industry Department suggested that the State should create more favourable conditions for Vietnamese enterprises to access loans to utilise as capital to develop the sector and implement other incentives.

The timber processing sector is one of the major revenue contributors to the country’s GDP.  According to the MoIT,  wood export turnover surged 19% to US$5.7 billion in 2013. The sector is expected to hit a record US$6.5 billion in gross revenues for 2014.

Vietnam, Africa cotton industries eye closer links

A delegation of cotton producers and exporters from eastern and southern African countries met with their Vietnamese counterparts in Ho Chi Minh City on August 6 to explore business opportunities.

According to the Vietnam Cotton and Spinning Association (Vcosa), more than 51% of the materials needed for short-staple yarn production is natural cotton, but last year local production met only 1.2% of demand.

The country has to import a lot of cotton from the US, South Asia, and Africa, it said, adding that imports will continue to be the main source of raw materials for the spinning industry.

At a seminar titled "Market transparency – East and Southern African Cotton for Vietnamese Spinners", Nguyen Hong Giang, Vcosa General Secretary, said last year Vietnam imported more than 581,000 tonnes of cotton for 1.17 billion, up 39.1% from 2012, mainly from the US, India, Australia, Brazil, Ivory Coast, and Pakistan.

In the first seven months of this year the country imported 458,000 tonnes, up 34.9%, he said.

But imports from Africa accounted for a modest portion, he said, adding however that he saw great potential for Vietnamese and African cotton businesses to boost cooperation.

Do Huu Huy, deputy head of the Ministry of Industry and Trade's Africa and South West Asia Market Department, quoted Vietnamese firms as saying African cotton is of fairly good quality and suitable for their yarn production.

But most of the imports from Africa are done through commercial firms in France, Switzerland, and India, making them more expensive than direct buying, he pointed out.

Another problem is that cotton from east Africa usually has high sugar content, affecting the production process and product quality, he said, while Vietnamese firms sometimes also found cotton batches contaminated.

Due to imports through intermediaries, feedback on quality is a complicated process and takes a lot of time, he said.

The seminar – organised by the International Trade Centre and Vcosa – is expected to enable Vietnamese importers to work directly with African cotton producers and exporters, he said.

Vietnamese firms can expand imports from the region, share experience and research, and invest in spinning mills in African countries, he said.

GE appoints first Vietnamese CEO

American multinational conglomerate General Electric (GE) recently announced the appointment of Vu Thu Trang as CEO of its GE Haiphong Division.  

GE said that Trang is the first Vietnamese national to manage the GE Haiphong Division since its founding in 2008.

Trang began work for GE in 2008. Since then, she has served as the Project Director in charge of managing and distributing new products and subsequently was appointed to Finance Director.

GE Haiphong specializes in manufacturing wind turbine generators and other energy products. Its products are exported to GE production and service centres around the globe.

MobiFone, Vietnam Post strike cooperation deal

Mobile service provider MobiFone and Vietnam Post on August 5 inked a cooperation agreement on service and product distribution and development.

Vietnam Post will distribute MobiFone’s services and the latter is also supported to boost sales through the transaction points of Vietnam Post nationwide. The two firms prioritize using services of each other and cooperate in developing shops to sell equipment using service packages of MobiFone.

Vietnam Post said all of its 40,000 employees will use the services provided by MobiFone.

Under the agreement, MobiFone is allowed to make the most of Vietnam Post’s premises and infrastructure for equipment installation, branch and transaction center opening and advertisement. The two sides will explore opportunities to jointly invest in production and trading projects.

Mai Van Binh, general director and chairman of MobiFone, expected business results of the two firms will be improved significantly after the cooperation agreement is signed.

Do Ngoc Binh, chairman of Vietnam Post, reckoned that setting up and expanding retail network for telecommunications products and services will help unlock all the strengths and potential of the company.

MIV recalls imported Subaru cars over engine defect

Motor Image Vietnam Limited Company (MIV), a 100% foreign-invested firm, has announced a campaign to recall Subaru Forester 2.0 XT cars to check, repair and replace the parts that cause errors in motor control system free of charge, according to Vietnam Register.

The company will take back 33 vehicles manufactured between December 2013 and April 2014. The popular errors with the recalled vehicles are the engine management warning light turning on, and noisy and vibrating engine when it works. This will likely cause engine failures in the long term.

The defect is attributed to the programming process of the Engine Control Unit (ECU) in the direct injection turbo which may result in high temperature in the combustion chamber as well as noise and vibration when the engine is turned on.

The Subaru car importer advised customers to drive their cars to authorized service dealerships for checking and reprogramming the ECU box or replacing spark plugs when needed.

This recall campaign applies to the vehicles having chassis and engine numbers in line with the list provided by Fuji Heavy Industries Group.

Subaru Forester 2.0 XT model has been imported and retailed in Vietnam since the end of 2013 at VND1.57 billion.

ANZ launches e-customs tax solution for enterprises

ANZ Vietnam Bank on August 5 announced that it has joined Vietnam’s e-customs tax system to help corporate customers with their payment management.

ANZ is the first and only foreign bank in Vietnam to offer this solution to customers, which enables the bank to update a customer’s tax payment status online, thus reducing time and cost as a result of the straight-through connectivity between ANZ and the General Customs Department.

Aseem Goyal, head of Transaction Banking of ANZ Vietnam, said in a statement that digital technology is increasingly driving how it operates and how it serves customers.

“We know our corporate customers are embracing technology in every aspect of their lives, and they are demanding the same technologies in their working environments. The launch of this solution is another step in responding to that demand.”

In the digital space, the bank launched ANZ Transactive, an online corporate banking platform, last year, allowing clients to access more convenient cash management service through advanced payments, collections and liquidity management services.

Full-moon festival in the heart of Vietnamese

These days, Vietnamese people have indulged themselves in the bustling atmosphere of the Mid-Autumn Festival – a time to strengthen relationships and honor cultural traditions of Vietnam. The festival has always stayed in the heart of Vietnamese people and reached out to foreigners working in the country.

Besides the traditional Lunar New Year, the Mid-Autumn Festival is the second biggest festival for Vietnamese family reunion. The festival lasts just one night but people are eager to prepare for the festival almost a month ago, creating an interesting cultural feature.

Moon-cakes vending kiosks have mushroomed along the streets while children are dreaming of colorful lanterns. Elderly people in families are contacting their members to arrange a happy reunion day. On the early days of August, families and enterprises have chosen eye-catching moon-cake boxes to give to customers, partners, employees, friends and teachers.

For every Vietnamese, Mid-Autumn is not only a festival but also a chance to express gratefulness to God for favorable weather, for people to get together and show their sincere and love to beloved.

In the animated atmosphere of the Mid-Autumn Festival, more and more enterprises in recent years have paid attention to giving gifts to staff on the occasion. To each employee, the gift is not only the show of caring and respect from their employers but also a pride for those receiving it for a stronger attachment to companies. Therefore, the culture of sharing the festive moment with employees has spread among Vietnamese and foreign businesses.

Ngoc Thanh, a staff member of a British company, says that the company has touched her heart by giving her a moon-cake box during Mid-Autumn Festival over the past two years. “The gift is more meaningful as most leaders of the company are British. Everybody is happy and proud to show the gifts to their family. The company really cares about spiritual life of employees by helping us organize a cozy festival. They are thoughtful and always honor Vietnamese cultural values.”

Vietnamese people see moon-cake boxes as a solemn and warm greeting in the Mid-Autumn Festival. Understanding the cultural feature, giving gifts and greeting staff on the occasion is an affective way to bolster ties between the employer and the employee.

Cat Lai port revises down container lift charges

Cat Lai Port in HCMC’s District 2 will on August 6 revert to its former container lift charges given export and import firms’ strong objections to the charge spike.

As the General Department of Customs no longer requires companies to inform container numbers when they conduct customs procedures, the port now does not charge the registration fee for container numbers, Ngo Minh Thuan, deputy general director of Saigon Newport Corporation, said at a dialogue with sea transport firms and port authorities on August 5.

At the dialogue, a representative of the Vietnam Association of Seafood Exporters and Producers (VASEP) complained about container backlogs at Cat Lai Port, which have made storage and container lift charges heavier for seafood firms.

The VASEP representative urged the Ministry of Transport to help seafood import and export firms out of difficulties. Transport Minister Dinh La Thang told Saigon Newport Corporation to find ways to pull them out of the situation.

In response, Thuan said the container lift charge at Cat Lai Port will be adjusted down to VND275,000 for a 20-foot container and VND485,000 for a 40-foot container, as goods overloads at the port have been eased.

Earlier, Saigon Newport Corporation pushed up the charge by the length of storage time. The charges for 20-foot and 40-foot containers from the seventh to the 15th day increased from VND415,000 to VND550,000 and from VND730,000 to VND970,000 respectively.

From the 16th day, the charge rose by an additional 30%, from VND550,000 to VND715,000 for a 20-foot container and from VND970,000 to VND1.26 million for a 40-foor container.

The charge adjustments, as explained by Saigon Newport Corporation, were aimed to speed up container clearance from the port.

Saigon Newport Corporation also proposed the Ministry of Transport quickly set the minimum prices for container loading and unloading services at ports in HCMC and Haiphong City.

Thuan said the floor prices are necessary to prevent ports from undercutting their service fees. He proposed the new floor prices at Cai Mep-Thi Vai port complex be at least 5% higher than those at HCMC ports.

Kong Wai Keong, general director of Vietnam International Container Terminals (VICT), supported the floor prices for seaports in HCMC. However, he suggested two floor price levels for ports in HCMC as their infrastructure is in different stages of development.

Deputy Minister of Transport Nguyen Van Cong said the Vietnam Maritime Administration is setting floor prices for ports in HCMC and Haiphong, which will go before the Government as soon as possible.

SOE leaders responsible for restructuring sluggishness: PM

Prime Minister Nguyen Tan Dung has asked ministries, sectors and State-owned enterprises (SOEs) to speed up their restructuring, saying that if the work is not completed as schedule, their leading officials should voluntarily step down.

Addressing a Government conference to review the restructuring of SOEs in the first seven months of 2014 in Hanoi on August 6, PM Dung noted that the important tasks are to re-arrange and strengthen the managerial personnel and make the divestment process transparent.

Ministries and sectors need to better policies to deal with difficulties arising during the restructuring and equitisation, he added.

The Ministry of Labour, War Invalids and Social Affairs was requested to work out measures coping with labour redundancy during the process. Meanwhile, the Ministry of Agriculture and Rural Development was urged to intensify assistance for ethnic people who have participated in forest planting and protection.

According to a report by the National Steering Committee for Enterprise Reform and Development, 76 businesses have been re-organised so far this year, of which 55 were re-arranged, two dissolved, 15 merged, three filed for bankruptcy and one was sold.

Several ministries, localities and enterprises remain sluggish in restructuring, including the Ministries of Culture, Sports and Tourism, Health, and Industry and Trade, the provinces of Binh Dinh, Nghe An, Quang Ninh and Tay Ninh and the Vietnam National Chemical Group. Meanwhile, 84 businesses reported making no progress at all.

In the first seven months, SOES divested 2.975 trillion VND (140 million USD), showing a threefold rise from 2013. The process remains slow in comparison with the set plan.

Joinus announces financial readiness for Van Don Airport

Joinus Company Limited – a company incorporated in Vietnam by South Korean businessmen – has announced it has nearly completed raising the needed finances to develop the Van Don International Airport project in Quang Ninh province.

Dolien Han, CEO and chairman of Joinus, yesterday revealed to the media that the company had confirmed that Australia-based investment firm CastlePines Corporation will invest in the project. Accordingly, the corporation will put $100 million into the project. Total investment needed for the Van Don International Airport is $700 million.

“We are now financially prepared to build the airport,” Han said.

He said that while the total investment is $700 million, the firm had already created access to $1 billion for the project.

Han’s statement came after Prime Minister Nguyen Tan Dung agreed to Quang Ninh People’s Committee selecting Joinus and its partners as “potential investors”. Quang Ninh is home to World Natural Heritage site Ha Long Bay.

Apart from CastlePines Corporation, Han said Joinus had already signed agreements with Posco E&C and Korea Airport Corporation to establish a consortium for the project. Posco is slated to join as engineering, procurement and construction contractor, while Korea Airport Corporation will oversee operations once it is complete.

“This is good news and what we will do next is finish the feasibility study for the project’s next steps,” said Han. He expects the airport to go operational in 2018.

According to Quang Ninh People’s Committee, the project will be implemented under the build-operate-transfer investment form. Joinus and its partners will run the airport over 35 years, starting when the project goes into use.

Van Don international airport is a key infrastructure project in the Van Don Economic Zone, near Ha Long Bay. The Vietnamese government is planning to develop the zone into an international trade and high-class tourism and entertainment centre to serve the development of the northern key economic region.

Joinus and its partners plan to build the airport to have an annual throughput capacity of 6.6 million passengers. Once operational, it is expected to play a headline role in the tourism development of Quang Ninh.

Lion state investors roar into Vietnam’s lucrative real estate

Singaporean investors are increasingly seeking new opportunities to invest in Vietnam’s real estate market.

The island state’s SLP International Consultant and Investment Group recently met with the Real Estate Association in Vietnam seeking investment opportunities.

According to Tricia Teo, managing director of SLP, Singaporean investors see great opportunities in the Vietnamese real estate market thanks to the country’s stable economy and policies, as well as the increasing demand for housing.

“Vietnam is considered a very attractive destination among Singaporean investors, and we have the investment sources and private funds required for real estate projects as well as a clear strategy and experienced human resources,” Teo said during her visit.

If a proposed policy allowing foreigners greater rights to buy houses in Vietnam was passed, Teo added, Singaporean investors would be even more keen on the market.

According to experts, over the last several years the number of Singaporean investors entering Vietnam’s real estate market has risen considerably.

Many large-scale Singaporean developers are already present and have had great success. They include Keppel Land, CapitaLand, VSIP, Sembcorp, Ascott, Mapletree, and many others. Several have recently announced new developments.

Keppel Land, one of Vietnam’s largest foreign real estate investors with a diverse portfolio of properties in Hanoi, Ho Chi Minh City, Dong Nai and Vung Tau, recently announced they were joining the Hanoi Westgate urban development project, with a total investment of $140 million.

With 19 licensed projects, Keppel Land has built nearly 22,000 homes in Vietnam.

According to Linson Lim, Keppel Land’s president for Vietnam, the firm was confident about the long-term growth potential of Vietnam’s property market due to the country’s young population and growing middle class.

“We are confident in the long-term growth potential of Vietnam’s property market. It has a young and dynamic population and a growing middle class with strong aspirations for home ownership. The city’s high urbanisation rate, improving infrastructure, and declining interest rates will also support the demand for housing. We are confident that the subsequent phases of the development will enjoy the same positive demand from homebuyers and investors seeking quality properties with strong attributes and value offerings,” Lim said in a recent statement.

CapitaLand, another Singaporean developer, entered Vietnam in 1994 and has thus far built five projects in the country for a total $1.2 billion. It has introduced more than 5,500 units to the Hanoi and Ho Chi Minh City markets and plans to expand its portfolio with a second residential project in Hanoi.

SUTL Corporation, which is also active in the Vietnamese market, recently announced it would expand its investment in the country via the construction of Vung Ro Bay yacht club, in the central coastal province of Phu Yen. The club is one of four sections of the Vung Ro Bay resort owned by Vung Ro Petroleum, with an estimated capital of $2.5 billion.

Vietnam Singapore Industrial Park (VSIP) is one of the most successful Singaporean projects in the country, with 6 industrial parks in Binh Duong, Haiphong, Bac Ninh, and Quang Ngai province, attracting nearly 500 projects and more than $6.4 billion in registered capital.

Mapletree, another leading real estate developer from Singapore, is focused on developing real estate projects throughout Asia. The firm, a member of Temasek Holding, has a wide range of projects in Vietnam such as logistics centres in Binh Duong and Bac Ninh provinces, the Pacific Place building in Hanoi and SC VivoCity in Ho Chi Minh City, with a total investment in the country of $1 billion.

As of July 2014, Singapore was Vietnam’s third biggest foreign investor with 1,294 projects and total registered capital of nearly $30.6 billion, of which one third belonged to the real estate sector.

Managing director of Savills Vietnam Neil Alexander MacGregor said his firm believed that Singaporean investors, together with those from Japan and Korea, would continue to have considerable interest in Vietnam’s real estate market. “Vietnam’s real estate market is at an attractive phase in its development, having recently bottomed out, and is showing some encouraging signs of recovery,” MacGregor said at the recent Singaporean Business Forum held in Vietnam.

“Whilst Vietnam is at the bottom of its real estate cycle, many other Asian markets are at the top of their cycles and may be set for a downturn over the next few years. Vietnam is therefore attractively positioned for investors to take advantage of market recovery while other markets begin to cool,” he said.

“We believe Vietnam is still a key destination for real estate investment in the Southeast Asia region and we will continue to see demand from a variety of investment locales such as Japan, Singapore, Korea and elsewhere,” MacGregor said, adding that he saw increasing investment from Singaporean investors and anticipated this to rise over the coming months and years.

Vietnam-Singapore trade flourishing

Two-way trade turnover between Vietnam and Singapore is thriving, hitting more than $5.01 billion in the first half of this year, an on-year increase of 9.86 per cent, according to Vietnam’s Ministry of Trade.

“Singapore is Vietnam’s third largest trading partner within ASEAN, and its sixth largest partner in the world following China, Japan, the US, Korea and Taiwan,” said Tran Tuan Anh, Deputy Minister of Industry and Trade

Trade between Vietnam and Singapore has burgeoned in recent years, with two-way trade turnover rising significantly to $8.4 billion in 2013.

Vietnam’s exports to Singapore reached $2.7 billion in 2013, up 15 per cent on-year with major products including seafood, agricultural, wood products, garments and textiles and handicrafts.

Meanwhile, Vietnam imported $5.7 billion worth of petroleum, computers, electronics and components, machinery, equipment, telephones and chemical products from Singapore, down 15.4 per cent against 2012.

The Singaporean market also offers huge potential for Vietnam’s rice exports, Anh said, with Vietnamese rice already accounting for over 20 per cent of Singapore’s rice imports. Vietnamese businesses could benefit from the export of high quality and jasmine rice to the city state and Deputy Minister Anh underscored that there was ample opportunity for future export growth.

Although Singapore is the largest trading partner of Vietnam in the region, Vietnam has continuously registered a trade deficit with Singapore. The trade deficit hit $2 billion last year.

Vietcombank backs VNCB to work through woes

This week Vietcombank will send some of its professional staff members to the struggling Vietnam Construction Bank (VNCB) to offer help after three former leaders of the latter were detained last week.

“Vietcombank will send VNCB experienced professionals to help improve the efficiency of governance, risk management, auditing, internal control and information technology development,” said Nguyen Phuoc Thanh, deputy governor of the State Bank of Vietnam at the signing of a comprehensive strategic cooperation agreement between the two banks in HCMC last Friday.

Thanh told the media that VNCB’s liquidity is stable though VNCB chairman Pham Cong Danh, VNCB general director Phan Thanh Mai and former board member Mai Huu Khuong were arrested on alleged charges of intentionally violating State rules on economic management causing severe consequences.

VNCB has yet to get financial support from the central bank, he said.

A source from Vietcombank said Vietcombank would inject funds into VNCB to allow it to return cash to depositors who want to withdraw it. The two sides agreed to support each other in carrying out transactions in capital and currency trading when needed.

Vietcombank is willing to cooperate with VNCB to develop banking services, look for customers, and share information on research and development.

The two sides will also cooperate in other on-demand services.

“This assistance helps stabilize the banking system in Vietnam. Vietcombank wants to support VNCB in the long term although this is a challenging job,” said Nguyen Hoa Binh, chairman of Vietcombank. “Vietcombank has enough human and material resources to prop up VNCB. The comprehensive partnership with VNCB will contribute to the restructuring of banks in Vietnam.”

Nguyen Phuoc Thanh of the central bank said the cooperation between the two banks would help VNCB cope with the current difficulties and restructure its operations, including bad debt and liquidity matters.

“The goal of this program is to restructure banks effectively and help VNCB get through this difficult time,” said Thanh.

Binh of Vietcombank said, “The governor of the State Bank of Vietnam has said weak and strong banks will be restructured altogether.”

Dao Quang Duc, deputy general director of VNCB, said VNCB would draw up a scheme to make the most of this support.

HNX to raise VND3-trillion from bonds for Hanoi

The Hanoi Stock Exchange (HNX) will hold an auction for VND3 trillion worth of capital construction bonds on August 15 to raise funds for Hanoi.

The bond will be issued at a face value of VND100,000 with a tenor of five years and a fixed coupon. However, bond yields have yet to be announced.

Based on the interest rate frame regulated by the Ministry of Finance and the market situation at the time of issuance, the city government will decide the coupon but not lower than that for government bonds and comparable to the interest rates offered by commercial banks.

The principle will be paid upon maturity while the interest will be paid annually. Payment sources will come from the capital city’s budget.

The city government may buy back the bond before maturity to reduce or restructure its debt.

According to HNX, the proceeds will be used to invest in social welfare projects, including key traffic infrastructure.

Local authorities will arrange capital for 11 projects scheduled for completion in 2014-2015 and three official development assistance (ODA) projects underway.

Last year, Hanoi mobilized VND4.4 trillion from three capital construction bond issues for eight vital projects, HNX said.

G-bond sales hit VND23.2 trillion in July

* The Hanoi Stock Exchange raised VND23.2 trillion via five government bond auctions last month, according to Vietnamplus.

Of the total, the State Treasury mobilized over VND22.9 trillion and the Vietnam Bank for Social Policies raised VND250 billion.

In July, bond sales on the primary market increased 16% from the previous month. Notably, coupons for all tenors declined, according to a report by the bourse.

Two-year bonds carry coupons of 5.25-5.37% per annum, three-year bonds 5.68-6.2%, five-year bonds 6.68-7.04%, and 10-year bonds 8.48%. They dropped by around 0.05 to 0.38 percentage point against the previous month.

On the secondary market, the total volume under normal mode reached 558 million bonds worth VND59 trillion while that under repo mode reached 193 million units worth over VND19.8 trillion.

Foreign investors’ acquisitions in normal mode exceeded VND8.3 trillion while their sales reached over VND7.3 trillion. In repo mode, they sold over VND156 billion worth.

Agriculture offers food for thought

Singaporean firms are eagerly eyeing market share in Vietnam’s agricultural, consumer goods and foodstuffs sectors.

Being the largest exporter of farm produce in Vietnam, Olam Vietnam is a typical example of a Singaporean firm carving out a specific niche in the country.

“Olam has been annually increasing investment in research and development and production. Our firm is preparing some more projects in Vietnam, like a cashew processing project in Phu Yen province,” said Le Tran Anh Dung, director of Olam’s branch in Dak Lak province.

“In the first half of this year we reaped good revenues, and that’s likely to continue through to 2015,” he said. “Olam is focusing on coffee, cashew and pepper processing.”

Olam is the largest exporter of cashews, pepper and instant coffee in Vietnam, with eight large factories across Vietnam.

According to the Singapore Businesses Group in Vietnam, other Singaporean firms are expanding business in Vietnam’s agricultural, consumer goods and foodstuff market. These firms include milk product maker F&N, drink makers Gold Roast and Super Coffeemix, tissue producer New Toyo, furniture maker Serrano Vietnam, foodstuff producers Hock Hin Foodstuffs and foodstuff additive maker ApecChem.

“There are a number of notable Singaporean brands that have risen to prominence in the beverage sector, food products, and bakery chains. There are an even greater number of multi-national companies successfully operating where Singapore acts as a supplier to Vietnam,” said the group’s president Norman Lim.

For example, SuperCoffeemix Vietnam (SCV), which manufactures and distributes various instant beverages and convenience foods, said it “wants to become the leading maker of foodstuffs and beverages in Vietnam,” and will “constantly create new and innovative products with high quality ingredients, customised to suit the palates of its consumers in Vietnam.”

SCV is now boosting the sales of its nutritious cereal, instant diet cereal, soya milk and ginger tea products in Vietnam.

Meanwhile, F&N Vietnam Foods Company Limited, a subsidiary of Fraser and Neave Limited, is operating a manufacturing plant at the Vietnam-Singapore Industrial Park (VSIP) in Binh Duong province to produce and distribute foodstuffs, dairy and beverage products in Vietnam.

The Singapore Business Group has claimed that Vietnam is proving to be an exciting destination for retail as many Singaporean enterprises are searching for the next high-growth market. Vietnam has a rapidly growing young population and a consumer market of some 50 million people. It is estimated that within the next ten years, 16 million new consumers will come of age in Vietnam.

Vietnam’s middle class has doubled over the last five years, with rising disposable incomes leading to increased consumption. This has led to a growing demand for goods and services, particularly for better quality and premium products. There has been a consumer shift from unbranded to branded goods, an increased demand for packaged and convenience goods, as well as a trend towards healthier products.

According to the London-based Business Monitor International Ltd’s Vietnam Food and Drink Report for the third quarter, food and drink consumption within the country will grow at an impressive pace, delivering double-digit annual growth through the forecast period to 2018.

Specifically, 2014’s total food consumption will grow 19.2 per cent, while the annual growth rate during 2014-2018 will be 15.5 per cent.

This year, per capita food consumption will grow 18.1 per cent, and the annual rate will be 14.7 per cent during 2014-2018. The respective rates will also be 12 and 8.7 per cent for alcoholic drinks value sales, and 10.5 and 7.5 per cent for soft drinks value sales.

However, Lim said the presence of Singaporean consumer goods and foodstuff enterprises “is still rather limited in Vietnam, as Singapore’s commercial presence tends to focus more on other sectors like property, logistics and financial services.”

He noted that Vietnam, despite significant advances in terms of structural reforms, still needed to become more business friendly. “Burdensome bureaucratic procedures, as well as unclear and sometimes contradictory legislation can create critical problems in doing business. Vietnam needs to reduce red tape and create more incentives in order for its business environment to be more conducive to foreign firms.”

Investors seek to build wastewater treatment plant under PPP

A consortium of UE Newater (Vietnam) Ltd. under Singapore’s United Engineers Limited and DPD Investment and Construction Co., Ltd. is seeking approval from the HCMC government to develop a wastewater treatment plant under the public-private partnership (PPP) format.

The West Saigon facility would cost nearly US$80 million and be able to treat 150,000 cubic meters of wastewater per day discharged by households in the Tham Luong-Ben Cat- Nuoc Len canal basin in the city’s districts of Tan Phu, Binh Tan and 12.

Previously, the HCMC government put the wastewater treatment plant on the list of projects for investors to develop under the build-transfer (BT) and build-operate-transfer (BOT) formats.

A source from the consortium told the Daily that the investors have strong experience, financial capacity and modern technology to build a system to collect wastewater and translate the wastewater treatment plant project into reality.

If the project is approved for implementation under the PPP format, the consortium would recover its investment capital by collecting fees from the city government. However, the investors have to wait for detailed regulations on fee collection for wastewater treatment and investment under the PPP format.

The consortium also wants to build a system to collect rainwater and wastewater as well as a pumping station in the basin in western HCMC with total investment capital of around VND11 trillion.

The Ministry of Planning and Investment is urgently completing a draft decree on PPP investments to have it approved by the Government this year in order to attract more investment via this channel. The draft decree also covers investment in clean water supply, wastewater and solid waste collection and treatment and drainage projects.

As planned, there would be three wastewater treatment plants of West Saigon able to treat 150,000 cubic meters per day, Tham Luong-Ben Cat with 250,000 cubic meters per day and Binh Tan with 180,000 cubic meters per day to go up and running in the basin of Tham Luong-Ben Cat-Rach Nuoc Len canals.

Attracting investments to the wastewater treatment projects in HCMC in the past years has faced a host of difficulties involving investors’ financial capacity and foot-dragging site clearance, according to the HCMC Steering Center of the Urban Flood Control Program.

Environment experts estimated the total volume of untreated wastewater discharged by households into the canals and rivers in HCMC at more than 1.2 million cubic meters a day. This wastewater then flows into the Dong Nai River.

Binh Hung is the only one operational wastewater treatment facility in HCMC, with a daily treating capacity of 141,000 cubic meters.

Restructuring plans at eight subsidiaries of SBIC appraised

The Ministry of Transport in collaboration with Shipbuilding Industry Corporation (SBIC), the successor of the debt-laden Vinashin, has appraised restructuring plans of eight subsidiaries of SBIC after the parent company itself went through the restructuring process.

It is not true that all the eight subsidiaries of SBIC suffered losses or went bankrupt as previously thought by many. For instance, Song Cam Shipbuilding Joint Stock Company has enjoyed profits for several straight years.

In the restructuring plan Song Cam submitted to the ministry, there is no debt needed to be settled. On the contrary, its revenues in three consecutive years, from 2010 to 2013, jumped from VND814.5 billion to VND1,004 billion. Last year, the company gained VND90.6 billion in profit.

This year’s target of Song Cam is to transfer a 70% stake held by the State to Dutch shipbuilder Damen Shipyards Group. Song Cam entered a joint venture with Damen for ten years and their ships have been exported to several countries around the world.

Damen also intends to buy into Halong Shipbuilding Co, Ltd after the local company completed its restructuring process.

However, Halong belongs to the seven remaining enterprises that need to restructure debts. In 2013, the firm suffered losses of nearly VND400 billion.

Meanwhile, among 16 subsidiaries of Bach Dang Shipbuilding Co, Ltd, the parent company must divest capital from five firms and transfer five others to SBIC.

Enterprises under SBIC have already finished the first step in the financial restructuring process, helping them clear 70% of their debts. They are now restructuring their debts as well as undergoing equitization.

As planned, SBIC must complete the financial restructuring and equitization processes at three enterprises including Chan May Port Co, Ltd, Halong Shipbuilding Co, Ltd and Cam Ranh Shipbuilding Co, Ltd. SBIC and the remaining firms must finish the equitization process next year.

Among 200 enterprises established by Vinashin previously, only one has been handed over to the State Capital Investment Corporation (SCIC) and another transferred to Debt and Asset Trading Corporation (DATC) under the Ministry of Finance.

More An Giang specialties to enter HCMC stores

Companies in HCMC have signed more than 50 deals with partners in the Mekong Delta province of An Giang to put specialties on the shelves of stores in both localities.

The signing of the contracts took place at a trade promotion conference held last Friday.

There were eight contracts in which the city’s companies will supply goods for Tu Son supermarket in An Giang and another memorandum of understanding aimed at building agricultural and fish farming areas in the province.

Supermarket chain operator Saigon Co.op made deals with three An Giang enterprises to sell their products in its supermarket chain as well as in Singapore via a joint venture between Saigon Co.op and Fairprice.

A number of An Giang products such as rice, aquatic products and seafood and sugar have been made available at Co.opmart stores of Saigon Co.op. The store chain last year sold more than 13,500 tons of products worth over VND300 billion from the Mekong Delta, with more than 3,000 tons of products worth over VN80 billion supplied by 17 enterprises from An Giang.

Tu Son supermarket used to buy commodities from the city via intermediaries. However, it has entered into a deal that allows it directly buy from the city’s businesses at more affordable prices.

Up to 80% of 1,500 suppliers from HCMC are supplying Tu Son supermarket with total sales revenues of VND90 billion in the year’s first half and VND136 billion last year.

This trade promotion program has also helped the city’s companies to build a stronger link with business partners in other localities, expand their operations there and expand their distribution networks, said Nguyen Thi Hong, vice chairwoman of HCMC People’s Committee.

At the same time, products from the Mekong Delta have now appeared on the shelves of a number of the city’s retail stores and have gone to other parts of the country via the city as a transshipment point.

The trade conference between the two localities was organized within the framework of a trade program between HCMC and other southern provinces. There were 31 companies participating in the conference including 12 distributors and 19 producers in fields such as foodstuff, food processing, stationery and household appliances.

Rice prices forecast to rise

Vietnamese rice prices are projected to surge in the coming time as Thailand’s rice farmers are suffering from severe drought and the recent storms are forcing the Philippines to import more rice to stabilize local prices.

According to a report by the Vietnam Food Association (VFA), Thailand’s rice output is estimated at 34 million tons in the 2013-2014 crop, down 10% versus the previous crop due to drought and the cancellation of a rice mortgage scheme.

The National Food Authority (NFA) of the Philippines has said it will import an extra 500,000 tons of rice, instead of 200,000 tons as earlier expected due to the impact of Typhoon Rammasun.

The NFA will open a tender for importing 500,000 tons of rice on August 12, taking the total rice import volume this year to 1.3 million tons. Delivery is set for early September.

Vietnam has already won an 800,000-ton rice export contract from the Philippines.

The price of 5% broken rice in Vietnam is now US$465-475 per ton, US$30 higher than India and Pakistan, while Vietnamese exporters quote 25% broken rice at US$410-420 per ton, US$20 and US$35 higher than India and Pakistan respectively.

Vietnam’s prices of 5% and 25% broken rice have edged up US$10 and US$5-15 per ton against last week. The growing prices of export rice have pushed up local prices to a one-year high.

Statistics from the VFA showed that Vietnam had shipped over 3.3 million tons of rice worth nearly US$1.5 billion by July 22. The country will continue to export two million tons under the signed contracts.

Nguyen Hung Linh, chairman of the VFA, said the association is still sticking to a rice export target of 6.2 million tons for this year though rice export activity is faring well.

Japan looking for local distributors

Ten companies from Japan worked with potential local business partners at a meeting organized in HCMC last week by the Japan External Trade Organization (JETRO) over the possibility of distributing their foods and beverages in Vietnam.

Nine of the 10 companies are strangers on the Vietnamese market.

Osato Kazuhiko, investment and trade director of JETRO in HCMC, said the Japanese government is helping its food and beverage companies expand their operations worldwide. JETRO with support from the Japanese Ministry of Agriculture, Forestry and Fisheries has held a number of meetings to build business links between Japanese and Vietnamese firms.

The potential of the local market is huge as incomes of Vietnamese consumers are growing. Therefore, Japanese companies are boosting their investments in Vietnam, he added.

In a related development, the Mainichi, one of the major newspapers of Japan, has got funding from the Japanese Ministry of Economy, Trade and Industry to support small and medium firms to find distributors in Vietnam.

The newspaper has also worked with Japan’s Partners Plus Company to open Plus Mainichi stores in HCMC’s District 1.

Another Japanese firm has been picked to manage these stores and find potential partners to sell Japanese goods in the local market.

Hirotaka Yasuzumi, executive director of the JETRO office in HCMC, earlier told the Daily that Japanese food and agriculture investments in Vietnam are rising. Since last year, 30 Japanese businesses have come to the organization to sound out investment opportunities.

There are 220 Japanese manufacturing and service companies doing business in the southern region with 300 Japanese restaurants in HCMC.

Jetstar Pacific to fly to Thanh Hoa in September

Jetstar Pacific Airlines has said it will commence daily service between HCMC and Thanh Hoa Province on September 5 this year using Airbus A320 aircraft configured with 180 seats.

Jetstar Pacific will become the first low-cost carrier and the second local airline to fly on this route after the national flag carrier Vietnam Airlines. The new air service is expected to offer passengers more options and help them save air travel cost between HCMC and the central province.

As scheduled, Jetstar Pacific’s BL489 flight will take off at Tan Son Nhat Airport at 10 a.m. and the return service leaves Tho Xuan Airport at 12:45 p.m.

Jetstar Pacific will sell 10,000 promotional tickets from VND3,000 for its some domestic air routes, including the HCMC-Thanh Hoa route on www.jetstar.com from 2 p.m. Friday, and pay on the website.

On August 3, the airline will launch another promotional program for all of its air routes, with single fares from VND259,000 for its HCMC-Buon Ma Thuot flights, from VND399,000 for the HCMC-Nha Trang and from VND359,000 for the HCMC-Phu Quoc route.

The local airline currently operates domestic flights connecting Vietnam’s main airports in HCMC, Hanoi, Danang, Vinh, Haiphong, Hue, Buon Ma Thuot, Nha Trang and Phu Quoc Island.

Jetstar Pacific looks set to launch HCMC-Singapore service on October 27 this year and plans to fly between HCMC and Bangkok (Thailand).

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