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BUSINESS IN BRIEF 10-1Ineffective IPR protection a thorny issue in Vietnam

Counterfeit goods continue blighting Vietnam due to weak intellectual property right regulations and enforcement.

Both local and foreign enterprises are struggling to protect their trademarks and branches in Vietnam, while the National Office of Intellectual Property of Vietnam (NOIP) admitted it faced limitations in handling intellectual property right (IPR) infringement cases.

According to Viva Life, the sole authorised distributor of Korea-based Hankook Anderson, some products distributed in Vietnam were counterfeited which irked by Korean agencies. Viva Life and Hankook Anderson handed written requirements to Vietnamese agencies to take aim at these products in Vietnam, but agencies struggled to act effectively and the counterfeiter has faced no punishment.

Other distributors also agreed that IPR protection in Vietnam was hard and making lawsuits after discovering counterfeits or infringements was difficult.

Nguyen Tran Trong Nghia, vice general director of Ben Thanh Tourism – a famous tour firm in Vietnam, said “Vietnam has no effective solutions to fight against counterfeits and infringing goods.”

“We have suffered damages because other companies use our trademark and tour design without permission,” he said.

Vietnam lacked IPR legal regulations with teeth to deter fraudsters, said Nghia.

According to some experts, enterprises should protect their IPR themselves instead of looking to authorities in Vietnam.

Augustine Ha Ton Vinh, president of Stellar Management Corporation and Dean of Executive Education & Training-Vietnam at California Miramar University, said enterprises in Vietnam could not depend on the government to protect IPRs.

Nguyen Thanh Binh, head of NOIP’s Ho Chi Minh City office, admitted that the administrative machinery of IPR Implementation System in Vietnam was not effective because various agencies overlapped and cases slipped through the cracks.

According to Eurocham’s White Book 2013, IPR is one of three main reoccurring themes besides pricing and the role of state sector.

At present, the protection and enforcement of IPR falls well short of what is necessary to attract more value-added high-tech manufacturing to Vietnam, said the White Book.

“Investors are unlikely to bring their technology to Vietnam unless there is real protection of intellectual property rights. Unfortunately, whilst there are laws on the statute books, in practice real protection for IPR remains very limited,” according to Eurocham’s White Book 2013.

Saigon Hi-Tech Park phase two is approved

Ho Chi Minh City People’s Committee has signed off on Saigon Hi-Tech Park’s (SHTP) VND8,175 billion ($392.64 million) second phase.

The second phase covers 587 hectares in District 9, connecting with the phase one to make SHTP’s total area 913ha.

The second phase would build main infrastructure, plus technical infrastructure for a science space specialising in science development, research and development and enterprise creation.

The project will be implemented from 2012 to 2020. The investment is funded by the state budget and Ho Chi Minh City budget, ODA and loans.

Ho Chi Minh City is in charge of 70 per cent the total investment and the remaining 30 per cent capital is funded from the state budget, according to SHTP’s management board.

Steel consumption rises 3 per cent

The construction steel volume consumed last year only reached 4.5 million tons, down 10 per cent from the previous year, but the consumption of other steel products increased by 20-40 per cent, pushing the total steel consumption up by 3 per cent.

Pham Chi Cuong, chairman of the Vietnam Steel Association (VSA), told the Daily that the rise of 3 per cent was not too low when the economy was still in difficulty. The hardest-hit segment last year was construction steelmakers due to the long-frozen property market.

He did not expect any robust growth in 2013.

“With difficulties forecast to continue this year, the association can only expect this year’s steel consumption to increase by 2-3 per cent,” Cuong said.

Many plants producing construction steel have been running below 60 per cent capacity for years, and some other plants have had to suspend operation due to a steep fall in consumption.

Dinh Huy Tam, general secretary of VSA, said that the increasing import of low-price steel containing boron from China has made local steel producers run into troubles.

According to statistics of Vietnam’s customs, the volume of such steel imported from China in last year’s seven months was 5.5 times higher than the same period of 2011.

Tam said that although there has been news about Government support for the property market in recent days, it is still impossible to deal with problems of the property market in a short span of time. Therefore, the steel industry is forecast to face many difficulties this year, he added.

MB launches money transfers by phone

The Military Commercial Joint Stock Bank (MB), in association with Western Union, has announced a new service enabling people to receive money from overseas Vietnamese via their registered mobile phone numbers (MB Mobile Money).

Accordingly, MB’s customers can quickly get SMS Banking messages and receive the money a few minutes after the money is sent. The receiver does not have to pay any fee or go to the bank to get the money.

Customers only use the MB Mobile Money when they subscribe with Viettel’s telecom services and register accounts at the bank.

Ca Mau aims for export revenue of 1 bln USD in 2013

Vietnam’s southernmost province, Ca Mau, with economic strength in offshore fishing, has set an export revenue target of more than one billion USD for 2013, a year-on-year increase of 10.5 percent.

To meet its target, the Ca Mau Association of Seafood Exporters and Processors is urged to increase trade promotions and further develop the seafood export market.

Meanwhile, local businesses are encouraged to invest in technology to improve their products’ competitiveness.

To support local enterprises, the province will expand administrative reforms and implement a number of preferential policies, including offering credit and reducing interest rates and tax, introduce tax.

At present, there are 33 frozen seafood processing plants and four fish powder manufacturers in the province.

In 2012, Ca Mau exported 83,000 tonnes of seafood at a value of 940 million USD.-

Pearl oyster cultivation shines in Van Don

Van Don island district in the northern coastal province of Quang Ninh is home to the first village specialising in pearl oyster cultivation in the northeast which has become a tourist attraction for over 40 years.

Vietnamese pearls have been celebrated for hundreds of year. The legends of Minh Chau (shining pearl) island and Ngoc Vung (dazzling pearl) island in Bai Tu Long Bay remain.

According to experts, Van Don’s natural fresh water creates the pure and luxurious colour of the district’s pearl, not seen anywhere else in Southeast Asia.

Recognising Van Don’s strength and potential in pearl farming, Taiheiyo Shinju, a leading Japanese pearl cultivation company, has worked with several Vietnamese partners in the region.

Operating for 10 years, the company has affirmed its position in the domestic and international pearl market.

The company’s Vietnam Director, Le Nam Trung, said Van Don’s pearls meet all six requirements specified by the Japan Pearl Exporters’ Association. The pearls have maximum levels of thickness, shine and colour.

SPICA, the trademark of Van Don pearls, is highly valued in the world market. 90 percent of the pearls are exported to Japan.

Besides, Van Don is developing ecological tourism following the model seen in many countries in the world, including China , Japan and India.

The number of visitors to Ha Long Bay is growing, which creates favourable conditions for Taiheiyo Shinju Vietnam to accelerate production, diversify its marketing methods, and improve the quality and design of its products to promote Quang Ninh’s economic and tourism potential, and develop pearl oyster farming-trade village tourism.-

Khanh Hoa strives to boost seafood export

The People’s Committee of central Khanh Hoa province has approved a programme on developing sustainable and highly competitive aquatic products.

Accordingly, local businesses will invest in enhancing the quality of products, so that by 2015, 100 percent of local aquatic products meet national standards for food safety and environmental protection, as well as export markets’ requirements on products’ origin.

Khanh Hoa seafood sector will maintain traditional markets, especially the three key markets of Japan, the US and EU, while gaining entry into new promising markets such as ASEAN, the Republic of Korea, China, the Middle East, and South America.

The province sets the goal to increase total seafood export to over 63,000 tonnes, worth 406 million USD in 2015.

Mekong Delta targets GDP growth of 11 pct in 2013

The Mekong Delta region aims at a GDP growth rate of 10-11 percent and per-capita income of over VND36 million (USD1,700) in 2013.

These are two of the targets set for the region announced by the Southwestern Regional Steering Committee (SRSC) at a press briefing held in Can Tho city on January 3.

The region will also strive for a total social investment of over VND212 trillion, State budget collection of VND42 trillion and spending of below VND75 trillion.

It expects to earn more than USD11 billion from exports and generate jobs for around 400,000 people.

To reach these goals, the SRSC will coordinate with relevant ministries and agencies to define the potential and strengths of each locality in order to work out policies to invest and attract investment in key areas.

The committee will effectively implement the regional linkage project and encourage the expansion of sustainable agricultural production models to create drastic changes in the field in combination with boosting rural economic development, thus improving the people’s living standards while narrowing the gap between urban and rural areas.

It will focus on removing difficulties for businesses by providing them with loans and clearing their inventories while effectively solving bad and outstanding debts.

The SRSC will carry out key projects on transport, irrigation, health, education and vocational training. It will coordinate with the Ministry of Education and Training and schools in building human resources development plans and implement the national target programme on climate change adaptation.

The committee also works out measures to reduce poverty and ensure social welfare, especially taking care of ethnic and religious people in the region.

More than 80,000 workers sent abroad in 2012

According to the report of the Overseas Labor Management Department, in 2012, over 80,000 workers were sent to work in foreign countries, bringing remittance of USD1.7 – 2 billion.

South Korea, Taiwan, Malaysia and Japan are still the traditional markets attracting a large number of Vietnamese workers, of which Taiwan received 30,533 employees; South Korea, 9,228; Malaysia, 9,298 employees; and Japan, 8,775 workers.

In 2012, Taiwan received the largest number of Vietnamese workers working in the many fields such as manufacturing, engineering, garments, agriculture and furniture, with base salaries of approximately VND8-9 million, excluding working overtime and working on holidays, for additional payment of 30-60% or double the normal salary.

The representative of the Overseas Labor Management Department predicted that in 2013, South Korea and Taiwan would remain the markets attracting the largest number of workers because the two markets have the basic wage and overtime pay higher than in other markets.

Danang seaport to process 4.8 million tonnes of goods

The seaport in the central city of Danang is aiming to process 4.8 million tonnes of goods in 2013 despite the ongoing global economic difficulties.

To reach the target, the seaport will receive an additional VND100 billion in investment for equipment purchases, VND150 billion for infrastructure construction and upgrades, and VND1 billion for staff training.

A 200m quay in Son Tra port will enter operation soon, easing the workload of Tien Sa port. The ground clearance process for Nam Hai Van-Tuy Loan byway’s planned logistics depot will also be accelerated.

Last year, the Danang seaport handled 4.5 million tonnes of products. Its success can be credited to the switch from strictly serving as an unloading port to one prioritising containers and tourism.

In order to be capable of hosting larger container and tourism vessels, the seaport has purchased modern unloading machines worth VND64 billion, including Gantry and Atiri cranes dramatically reducing processing time to only 3–4 minutes per container. It also spent VND4 billion on customer management software making port procedures simpler and more efficient.

The seaport now receives 10–12 container ships per week compared to the 2–3 before, helping exporters and importers reduce time and transport costs.

Work begins on solar cell plant in Hue

Construction on a solar cell plant funded by WorldTech Transfer Investment, began in Phong Dien industrial zone in central province of Thua Thien – Hue on January 7.

The US$300 million facility will take 30 months to build and have a capacity of 60 MW a year.

In the second phase, the plant’s capacity will be raised to 250 MW.

To date, the 400 hectare industrial zone has attracted five projects worth a total of US$50 million, employing more than 4,000 workers.

By 2020 the zone will have expanded to 700 hectares and house projects on information technology, machinery, automobile assembly, electronics, packaging, agro-forestry-fishery, and garments.

Emerging businesses awarded with national trademarks

President Truong Tan Sang met with leaders of national trademark-winning businesses on January 7, acknowledging their contributions to the national economy’s development.

On behalf of the Vietnam National Trademark Council (VNTC) and the business community, Minister of Industry and Trade Vu Huy Hoang briefed President Sang on the National Trademark Program’s results.

A host of business support consultancies, conferences, seminars, and training courses were launched over the past year to help raise business awareness of the importance of improving marketing capacity and protecting product trademarks.

The program’s participating businesses signed contracts worth more than US$1 billion during 2012 and earned VND1,300 billion in sales revenue.

Products deemed worthy of trademarks are selected biennially based on objective professional criteria. Despite the woes of the global economy, national trademark businesses maintained high profit margin and turnover growth rates, with some even recording a growth rate of 207 percent.

Representatives from 54 businesses proposed trademark development strategies and expressed their desire for more State support, particularly as they work on building national trademarks according to global criteria

Addressing the meeting, President Sang praised the VNTC, the Ministry of Industry and Trade (MoIT), and relevant agencies for their initiatives promoting Vietnam’s international image, including the National Trademark Program.

Sang stressed the importance of expanding markets and increasing the quality of products in the context of the country’s deepening international integration.

Vietnamese businesses must pay more attention to exploring potential domestic and international markets, reinforcing solidarity, and sharing experiences to benefit both the business community and national interests, he noted.

The President asked the VNTC and MoIT to organise more regional conferences for businesses to share their methodology in the hopes of increasing the number of national trademark businesses.

The MoIT should coordinate with other agencies to provide businesses with the necessary incentives and resources, helping them develop further and thus contribute more to the nation, Sang added.

Five-star cruise ship docks in Vietnam

Vietnam’s leading tour operator Saigontourist has warmly welcomed around 2,400 passengers and crew of the Costa Crociere cruise line’s luxury ship Costa Victoria to Ho Chi Minh City on January 7.

During their stay in the city, the travelers will visit the Cu Chi tunnels and fruit gardens in the Mekong Delta province of My Tho.

They will also watch a water puppet show, shop in Ben Thanh Market, and visit fish quay, coconut candy firms, and honey bee breeding plantations in Tan Thanh Commune.

Two days later, the ship will dock at Tien Sa seaport in the central city of Danang to tour Hoi An ancient town and My Son sanctuary.

It will cruise to Ha Long Bay the following day, offering passengers the opportunity to climb to Yen Tu pagoda, buy goods in Thanh Nien (Youth) Market Fair and Hong Gai Market, and experience the daily life of local people.

The cruise is expected to return to Vietnam on January 14, 18, 26, and 30, anchoring in Ha Long and Danang seaports.

Costa Victoria has a maximum capacity of 2,394 passengers and 790 seamen and is equipped with five restaurants, 10 bars, three swimming pools, a theatre, a gym, and areas for entertainment.

Enterprises compete to launch Tet gift baskets

Enterprises are busy competing to launch an assortment of gift baskets full of Vietnamese-made commodities at affordable prices, with just one month left for Tet Lunar New Year.

Co.op Mart, Big C, Metro, Maximark and hundreds of stores are flooded with Tet goods and customers can choose gift baskets ranging from a couple of hundred thousand to millions of dong.

These gift baskets contain items like confectionaries, tea packets and wine, mostly imported.

Gift baskets are not only available in supermarkets and stores but also via online shopping websites.

In addition to displaying gift baskets in eye-catching spots in supermarkets, they are competing with consumer catalogs which have detailed information of each item in the baskets.

Aware of the current economic crisis, supermarkets are coordinating with partners to provide affordable but interesting gift baskets that are packed with Vietnamese-made goods from well-known companies such as Bidrico beverage, Ngoc Viet Rice, Tuong An Cooking oil, Lien Thanh fish sausage, Yen Hoang sweets, and Xuan Hong fruit jam.

Purchasing power stagnant, depressed markets ahead of Tet

In previous years, people started buying goods for Tet Lunar New Year at least a month ahead, creating robust sales and a vibrant market, one that is seriously lacking this year.

This year, despite several promotional campaigns, purchasing power remains stagnant and markets are facing a depression.

A survey of supermarkets in Ho Chi Minh City shows that purchasing power in the bigger supermarkets such as Co.opMart, BigC, and Maximark is still doing well but in other supermarkets there is no change.

According to a representative of Co.opMart, sales across its entire network during the first days of New Year rose by 30-40 percent. However, as purchasing power became weaker, this level went lower than in previous years. Consumers mainly go shopping at weekends while on weekdays supermarkets see just a few customers.

Notably, purchasing power at some supermarkets even dropped, including purchasing power for essential foods. Manager of a supermarket complained that this year supermarkets in the City had prepared more goods than last year; however, until now there was no sign of increase in purchasing power so they will probably suffer high inventory.

In order to boost purchasing power for Tet festive season, supermarkets have run various alluring promotional campaigns. For instance, BigC is offering a discount of 5-50 percent on more than 1,200 products; Co.opMart is offering discount of 20-45 percent on household goods and children’s clothes. But sales were mainly for fresh foods, processed foods, beverages, and clothing whereas purchasing power for other products has not changed significantly as yet.

Many consumers said that because of the economic slump, they will not buy goods for Tet early and only buy necessary goods instead of spending as freely as before.

Wholesale markets in the City have been experiencing the same situation. Currently, only fresh foods saw strong demand, hence, traders had to offer discount of 50 percent on some produce to clear stocks.

Smaller markets also underwent the same dilemma with demand focusing on foods and foodstuffs while household goods or clothes had few or no buyers. Many traders in Ba Chieu, Thu Duc, Tan Binh markets said that they have not even stockpiled goods for Tet festive season.

Although purchasing power was concentrated on foods and foodstuffs, foods producers worry that it will not climb higher so they will closely watch market movements and draw suitable supply strategy depending on the situation.

In the electronic markets, retailers have run several programs to stimulate purchasing power with the hope of making up on early sales. Many methods of promotional campaign were carried out at the same time to give the lowest price on products to consumers.

Most electronic supermarkets said that purchasing power rose by 50 percent. But in reality, electronic supermarkets still saw very few buyers. Most customers went to Tam Hoan Chau, Ideas, and Thien Hoa electronic supermarkets for window-shopping. With various promotional campaigns, bigger electronic supermarkets like Nguyen Kim and Cho Lon have attracted a large number of customers. However, customers mostly bought inexpensive products with high discount, such as electric cookers and irons while they were not interested in expensive products like mobile phones, notebooks, televisions, and washing machines.

According to Nguyen Van Dao, deputy CEO of Samsung Vietnam, most retailers forecast that electronics would flourish at year end as consumers would increase spending. But as the economy remained stagnant, this seems impossible.

At this time each year, people usually go to fashion shops to buy clothes for the New Year. However, this year, although many shops are offering a discount of 50 percent, they fail to lure customers. Employees of fashion shops in Nguyen Trai Street said that it was their lucky day if they sell five or six items. Sometimes, there are no customers at all, not even for window shopping.

Meanwhile, shopping centers are still highly patronized thanks to their decorations for festive season but most customers were only window-shoppers. In order to promote buying, famous fashion brands also ran various promotional campaigns but purchasing power remains poor.

According to employees of Parkson Hung Vuong, purchasing power has weakened since the middle of this year. In previous years, the center had to add more employees to serve customers.

Vietnamese enterprise wins brand name case in China  

The Beijing Commercial Court has ruled in favour of the Vietnamese dried fruit manufacturer Vinamit’s ownership of the Duc Thanh brand name over a Chinese rival.

Vinamit’s Chinese distributor, Xie Hong Yi, illegally registered the Vietnamese company’s brand name. This has become an increasingly difficult problem in recent years, with local businesspeople offering to sell back the names at high prices or using the name to win market share.

Vinamit’s Chairman Nguyen Lam Vien entered the Chinese market in 1997. Vien said, “In 1993, We registered the trade name Vinamit in Vietnam and later, we registered Duc Thanh in China. Yet we still fell foul. The Chinese laws requires a Chinese name besides the original registered name.”

In 2007, after he saw that the Duc Thanh brand had registered by another individual, he knew he had to win the rights to the name.

As predicted, in 2009, Vinamit started to lose their market shares in China. “In 2010, we decided to build our headquarter in Guangzhou and branches in Nanjing, Beijing and Shanghai. Directly selling our products to big supermarkets such as Wal-mart, Carre Four or Lotus would boost our business.” he said.

However, Vinamit’s distributors told him that the Duc Thanh didn’t belong to Vinamit. Vinamit then decided to bring the matter to court.

On December 25, 2012, at the third session, the Beijing Commercial Court reached a ruling that stated that, “Xie Hong Yi – a Chinese businessman – knew that Vinamit owned a well-known brand name and took the chance to register it first. This action violated Article 31 of the Trademark Laws. Therefore, the name will be withdrawn.”

Most Vietnamese products are brought to China via border trade or even by the foreign traders because the cost for official trade is 20% higher. Currently, Vietnamese farm products are gaining a foothold in the Chinese market, prompting increasing numbers of brand name disputes.

Vien advised that companies should not only thoroughly analyse potential markets, but also register their brand names in the target markets before signing any contracts.

“I called the Chinese government for help because our company has its headquarters in their country. I want our Vietnamese brand names to be protected in foreign markets.” Vien said.

Vietnam cuts red tape on luxury imports

The Ministry of Industry and Trade has issued Circular 301 to ease the import of mobile phones, spirits and cosmetics.

The circular taking effect from January 1, 2013 and has replaced the ministry’s Circular 197 issued on May 6, 2011, which only allowed the import of these products through Haiphong, Danang and Saigon seaports.

The move is aimed to simplify administrative procedures for importers.

Under Circular 197, besides submitting receipts for customs agencies to complete import procedures under the current laws, traders are required to show papers proving that they were selected for product distribution and import by producers. These papers must be recognised by Vietnamese diplomatic agencies in foreign countries.

This regulation, which was part of efforts to curb the trade deficit by restricting the import of non-essential goods in 2011, faced complaints from importers who said it had created severe difficulties for them.

The demand for products such as mobile phones, spirits and cosmetics sharply increases as the Tet holidays near, so the eased import regulations are expected to increase supply.

Vietnam saw a trade surplus of USD284 million in 2012 according to the General Statistics Office.

Auto dealers fear sales slump on possible fee cuts

Auto manufacturers and dealers are concerned that their sales might go down since a possible car registration fee reduction could lead consumers to suspend their purchase plans.

The Government is working on the draft of a resolution thrashing out measures designed to help the corporate sector the difficulties for production and business activities, including lowering the automobile registration fee.

If the resolution comes out, the fee for cars with fewer than 10 seats would fall to 10%.

The auto market has long been sluggish, so the forthcoming Government move would drive up auto consumption, especially in the shopping season in the lead up to the Lunar New Year holiday.

Some said the timing of the car registration fee cut is not appropriate.

A source from Ford Vietnam said the company had asked some customers to take delivery in late December, but those buyers have asked for a rescheduling of the delivery. It has occurred mostly at Ford sales agents in Hanoi.

Nguyen Mot, communication director of Truong Hai Auto Co., said the information about car registration fee reduction had affected the purchase decisions of customers in Hanoi. The sales in Hanoi in the last few days are 20% lower than expected by Truong Hai.

According to the Government’s draft resolution, the registration fee for below-10-seat cars would be slashed to 10%. City and provincial authorities could decide to add up to five percentage points, making the total 15%.

The change is insignificant, though. The current fee in Hanoi is already 20%, said Mot. “At present, HCMC is levying a fee of 15% and Quang Binh is charging 12%. I believe the city would not lower the fee to 10% like other parts of the country,” he said.

The upcoming lowering of the fee might have little impact on the Hanoi market. However, the fee would not actually go down until the nearest People’s Council meeting, which is slated for March.

Until then, auto dealers are worried their sales in Hanoi, one of the two biggest markets in Vietnam, may be affected.

Experts also share this view, saying that when the resolution is officially released, there would be scope for city and provincial authorities to decide their car registration fee. Then, the decree on car registration fees should be revised to be consistent with the new regulation.

In addition, the decree would require a guidance circular that will take some time to come out, so a lower fee would not be introduced soon enough to create new auto sales momentum.

Startups in city outnumber bankrupt ones

Despite economic difficulties, the number of business startups in HCMC last year was still higher than that of bankrupt and dissolved ones, according to the HCMC Statistics Department.

There were 23,708 enterprises established in HCMC from last year’s beginning to December 15, down 2.5% year-on-year. According to the department, the total number of enterprises stopping and temporarily suspending operations in last year’s 11-month period was 21,746.

Among the startups last year, there were 913 private, 3,043 joint stock and 19,751 limited liability businesses. Their total registered capital amounted to VND184.2 trillion, up 6.1% year-on-year.

Of the total, startups in the construction sector accounted for 23.1%, while service firms made up 76.3%, rising 2.3 percentage points over 2011.

According to statistics of the department, HCMC currently has around 380,800 household businesses with 696,500 staff. Among these small-scale businesses, there are 91.9% in the service sector, 5.7% in the industrial sector and the rest in the transport sector.

Exporters’ alliance to open interior furnishing center

South Asia Furniture (Safurni), an alliance comprising local exporters of interior furnishing items, has signed an agreement with the first distributor to open a center in HCMC within this month.

Representatives of Safurni last week clinched an agreement with the first distributor, ADS International Design and Arts School, to open a distribution center in HCMC specializing in products of member companies.

The center’s main products include decoration items such as pictures, pots, statues, lamps, mirror frames and clocks, and wooden products like indoor and outdoor furniture, beds, cabinets, shelves, doors and stairs. Besides, the center will sell kitchen cupboards and floorboards along with many other interior furnishing items.

Safurni has 11 member exporters that are members of the Handicraft and Wood Industry Association of HCMC and Binh Duong Province’s Wood Processors Association.

Tran Viet Tien, director of Gia Long Fine Arts JSC which is a Safurni member, said the alliance’s establishment is to meet the need for a distribution center for the local wood processing and interior furnishing industries.

Safurni targets interior furnishing items stores, building projects, hotels, resorts, residential clusters and e-commerce enterprises. As Vietnam has yet to have interior furnishing items wholesale centers, local stores have little chance of purchasing high-quality products at affordable prices, Tien noted.

Retail space segment fares well in dreary realty market

While most segments of the HCMC real estate market were struggling to seek tenants and stabilize occupancy, the retail space segment did better business last year, CB Richard Ellis Vietnam (CBRE) said in a report released last week.

There was an extra retail space supply of 78,000 square meters in the final months of 2012, with 38,000 square meters at the Vincom Center A project in the heart of the city and 40,000 square meters at the Pandora City project in Tan Phu District.

The two projects report high occupancy rates, with the Vincom Center A having 95% and the Pandora City project gaining 80%.

Numerous high-end brands including Banana Republic, Hermes, Christian Dior, Sisley, Ermenegildo Zegna and Rauph Lauren, are foraying into the domestic market for the first time, making the retail space segment busier.

Similarly, fast-food joints like Subways, Burger King, Lotteria and KFC are rushing to win larger slices of the pie while Starbucks, McDonalds and 7-Eleven will enter the nation some time this year.

The average offered rent on the market are on the rise thanks to the high offered price at the Vincom Center A, at some VND2.7 million, or US$135 a square meter.

The total area that found tenants in the fourth quarter last year was nearly 58,000 square meters, up four times against the preceding quarter, according to CBRE.

Real estate still attractive to FDI

The still-dormant real estate market has proven to be a long-term fertile soil for the foreign direct investment (FDI) sector, with new capital commitments still flowing in last year.

FDI inflow to the real estate sector amounted to US$1.85 billion last year, more than doubled the figure in 2011 (US$850 million). The 2011 FDI pledges in this sector made up only 5.8% of the total registered FDI capital.

But in 2012, FDI in the property sector accounted for 14.2% of the total FDI in Vietnam, ranking second after manufacturing-processing, which lured 70% of the total pledged capital, according to the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment.

The sharp increase in FDI in the realty sector was ascribable to the US$1.2-billion urban project Tokyu Binh Duong Garden City in Binh Duong. The project developed by the joint venture between Becamex IDC and Japan’s Tokyu Corporation is part of Binh Duong New City.

The project comprising 7,500 apartments, entertainment facilities, commercial and office space has recently got off the ground. According to management of the joint venture Becamex Tokyu, although the property market remains in trouble, the project owner has a long-term vision.

Meanwhile, Keppel Land of Singapore, the owner of a large number of high-end projects in Vietnam, is still seeking opportunities to invest in the local property market, including a residential complex with more than 6,000 apartments in HCMC’s District 2.

The Singaporean investor is also finalizing the first phase of the high-end condo project The Estella in District 2 and the villa project Riviera Cove in District 9, and promoting the second and third phase of Saigon Centre on Le Loi Street in District 1.

Foreign investors in the local property market believe that the market will soon recover, given political stability, signs of economic recovery and still-high demand for homes and commercial space in major cities.

Now is the time for financially capable foreign investors to participate in realty projects in Vietnam, said analysts, explaining that local firms are facing financial distress and seeking to transfer projects.

Many domestic corporations with involvement in the real estate sector, such as Vinaconex, PVN, EVN, Hoa Sen and Mai Linh, have recently withdrawn from the playground to focus on their core business operations, offering opportunities for foreign property investors to take over their projects.

Big-ticket oil refinery project makes new progress

An oil refinery project costing a staggering US$27 billion in the central province of Binh Dinh has made new progress as the provincial government will present a report on the venture to the Ministry of Industry and Trade soon.

Speaking at a business forum on Saturday, Binh Dinh’s vice chairman Ho Quoc Dung said his province and the Thai investor of the project, PTT, would meet the ministry this Thursday.

The province has been in talks over this huge undertaking over the past three years, Dung said, adding oil firm PTT had chosen Nhon Hoi Economic Zone in the province for its oil refinery owing to the site’s strategic location, ready land and deep-water port.

The huge cost has sparked skepticism over the viability of the project but, Dung said, PTT is Thailand’s biggest oil company and that it has promised to move ahead with the project.

Moreover, PTT would be joining hands with Vietnam Oil and Gas Group (PVN) and another Thai oil firm to work on the project, he noted.

The government of Binh Dinh asked the Prime Minister on December 25 last year for the go-ahead as a requirement for preparing the project.

PTT has proposed developing the refinery on 2,000 hectares with a daily processing capacity of 660,000 barrels, which would be sourced from the Middle East with 45%, Africa with 25% and South and Central Americas with the rest.

The refinery would produce LPG, gasoline, jet fuel and diesel oil as well as petrochemical items like LLDPE, Poly-propylene and DEG for markets such as Vietnam, Japan and China.

If procedures were completed as scheduled, work on the project might begin in the first quarter of 2016 and the facility would be ready by 2019.

Farm produce price volatility unlikely

Prices of coffee, pepper, cashew and rice will unlikely fluctuate as sharply this year as forecast by industry associations.

The Vietnam Cashew Association (Vinacas) forecast cashew nuts would be exported at an average price of US$7,000 per ton. Local processors just have a small material supply left while the world’s demand for cashew nuts might remain unchanged, the association said.

Still, cashew export prices may be affected by trade barriers such as the Food Safety Modernization Act of the U.S. and import control regulations of the EU, Australia and China.

Nguyen Viet Vinh, general secretary of the Vietnam Coffee and Cocoa Association (Vicofa), said coffee prices would stay above US$2,000 per ton this year.

“Unlike previous years, this year each coffee grower can borrow a minimum unsecured loan of VND50 million, so farmers did not rush to sell coffee at the beginning of the crop because coffee prices tend to be stable,” he said.

Last year Vietnam exported over 1.76 million tons of coffee, bringing in nearly US$3.75 billion, up 40% in volume and 36% in value against a year earlier. However, the average coffee price fell 68% year-on-year to US$2,137 a ton.

As for rubber, Dinh Van Tien, head of the Import-Export Department of Vietnam Rubber Group, predicted the average rubber price would be US$3,000 per ton this year.

A sign of relief is China, the world’s largest natural rubber importer, will lower import tariffs on some kinds of rubber in order to boost imports, which will be favorable for Vietnam, according to the Vietnam Rubber Association.

Meanwhile, rice export prices may remain stable at low levels due to the absence of large export orders.

So far, there has been no large rice export order carried forward to this year, while a volume of some 800,000 tons was transferred from 2011 to 2012, said Pham Van Bay, vice chairman of the Vietnam Food Association (VFA).

As of December 6, 2012, Vietnam had exported over 7.25 million tons of rice, fetching more than US$3.2 billion. The export volume was higher than in 2011, but the value dropped US$300 million year-on-year.

The average rice export price in the first 11 months of last year was US$445.5 per ton (FOB), down US$43.03 versus the year-ago period, according to VFA.

Pepper is the only farm produce that is forecast to fetch a higher price this year. Tran Duc Tung, office manager of the Vietnam Pepper Association, said the average pepper export price last year was US$6,700 per ton, up nearly US$1,000 against 2011. He forecast pepper prices would surge further this year.

“To avoid unnecessary damages, enterprises should not sign contracts with late delivery but instead focus on those with early delivery as pepper prices may increase after the signing of contracts,” he suggested.

The Ministry of Agriculture and Rural Development on Wednesday announced a 2013 agro-forestry-fisheries export turnover target of US$28.5 billion, up US$1 billion against last year.

Others like Viettel and Q-mobile also had the same request.

Before Dispatch 197 was issued, local businesses mainly imported mobile phones by air, so shipments normally took a week or two. But the sea transport needed months.

In the period from January 1 to December 15, 2012, imports of mobile phones and their parts amounted to over US$4.72 billion.

Vietnam on the top 10 list for visitors in 2013

The U.K’s leading travel website iWantSun has listed Vietnam as one of the top ten countries that are worth visiting this year, local media reports.

According to estimates by the General Statistics Office, more than 6.6 million international visitors came last year, a year-on-year increase of 9.5%. Certain tourists fond of Vietnam have called the nation a second travel power in the region after Thailand. The most popular destinations for visitors include Hanoi which is known for its charming cultural heritage, Hoi An and Hue for their culinary delights and Nha Trang for its white sand beaches.

On top of the iWantSun list are Mexico, Sri Lanka, Brazil, Turkey, the U.S., South Korea, Slovakia, Tanzania and Grenada.

The Luxpresso paper of India has also rated Vietnam as one of the places that must be discovered in 2013.

Big shrimp exporter looks to escape CP Foods’ big net

Vietnam’s biggest shrimp exporter is seeking new investors after rejecting a bid from CP Foods to buy a 40 per cent stake, saying the Thai firm wanted to swallow the Vietnamese corporation hook, line and sinker.

Minh Phu Seafood CEO Le Van Quang said that CP Foods had emerged from 15 investors to show an interest in investing in Minh Phu. Among four shortlisted candidates, two investors wanted to buy Minh Phu shares at VND45,000 each ($2.16), CP Foods proposed VND50,000 ($2.4) and a Japanese company put at VND59,000 ($2.83). Minh Phu found CP Foods, with shrimp exports being one of its business scopes, more suitable than the others.

CP Foods then submitted its terms and conditions to buy a 40 per cent stake, which Quang said revealed that the Thai firm wanted to take over Minh Phu.

Phu said his corporation has since started to look for other investors, with plans to sell shares at VND80,000-90,000 ($3.84-4.32) each. Minh Phu’s trading price was in the range of VND31,000-32,000 ($1.49-1.54) per share in the first week of 2013.

The Vietnamese shrimp exporter, of which 10 per cent is owned by Singapore’s Temasek Holdings, is focusing on a plan to issue 30 million new shares through public auctions as mentioned in the company’s 2012 annual general meeting resolution. However, it was waiting for higher prices, said Quang.

Minh Phu decided to pay 25 per cent dividends for 2012, after not issuing a divided in 2011. Quang said his Mekong Delta-based corporation achieved better business results in 2012 compared with 2011, and saw no rush to sell stakes at “non favourable” prices.

Quang and his family hold more than 60 per cent of the outstanding shares in the company and at its annual general meeting in May, 2012 he agreed to continue as CEO.

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

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