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BUSINESS IN BRIEF 11-1Petrol importers receive quotas

Thirteen petroleum wholesale distributors nationwide have been allocated import quotas for 2013 by the Ministry of Industry and Trade in order to ensure sufficient supplies during the year.

The leading national petrol distributor, Petrolimex, received the largest import quota and has been ordered to import a minimum of 5.18 million cu.m of petroleum products. It was followed by PetroVietnam Oil Corporation (PV Oil), with a quota of one million cu.m and Saigon Petro with a quota of 536,000cu.m.

The ministry said that the importers would not be allowed to import less than the allocated minimum quota in order to ensure a well-regulated supply and maintain minimum reserves.

The ministry also requested enterprises to base imports on market demand and available supplies from Dung Quat Oil Refinery. The Dung Quat refinery this year expects to produce 6.5 million tonnes of petrol, its highest production level since it began operations in early 2009. The refinery last year produced 5.5 million tonnes.

The ministry last year cut import quotas for 10 distributors as the economic slowdown depressed domestic demand.

The quota for Petrolimex went from 5.8 to 4.9 million tonnes, while PV Oil’s quota was lessened by 336,000 tonnes and Petec’s by 315,000 tonnes.

Fuel imports last year reached over 8.8 million tonnes, with a value of US$ 8.6 billion, down $953 million from the previous year, according to customs figures.

Nation ranks third in rubber

Viet Nam’s rubber output bounced up to 1.01 million tonnes last year, representing a volume increase of 23.8 per cent from 2011, according to the Viet Nam Rubber Association (VRA).

But despite the production boom, the annual earnings of US$2.85 billion were down 12.6 per cent on the previous year due to a drop in value.

Last year, the Vietnamese natural rubber price fell 33 per cent, due to reduced demand from China, its biggest consumer, and the increasing application of synthetic rubber over natural rubber.

Regardless, recent efforts mean Viet Nam has become the 3rd largest exporter of natural rubber in the world after Thailand and Indonesia.

The Association of Natural Rubber Producing Countries (ANRPC) had previously forecasted that Viet Nam would produce 955,000 tonnes of in 2012, and in doing so would replace Malaysia as the world’s third biggest rubber producer.

According to Ministry of Agriculture and Rural Development, by the end of 2012, Viet Nam had roughly 910,000ha of rubber trees, accounting for 7 per cent of the total global rubber area and surpassing the planning objectives of reaching 800,000ha in 2015.

The capacity of Vietnamese rubber trees now stand at 1.7 tonnes per ha, which also ranks as the third highest worldwide.

According to VRA’s General director Tran Ngoc Thuan, the Government has approved plans to develop the rubber industry until 2015 with a vision to extend until 2020.

Under the plan, the country will grow 800,000 hectares of rubber trees, which will provide 1.2 million tonnes of rubber latex per annum by 2015. Of this, 30 per cent will be used for the domestic processing industry and the rest exported.

Statistics from Viet Nam General Department of Customs show the average rubber export price is $2,829 per tonne, while the unit prices to sell to the two leading importers of rubber, India and China reach $2,967 and $2,706 respectively.

In 2012, Viet Nam exported around 65,272 tonnes of rubber to India, worth $187.7 million and an increase of 112 per cent on 2011. The trend indicates a definite swing in Vietnamese export patterns from China to India.

Hong Kong carrier to begin service to Da Nang

Hong Kong-based air carrier Dragonair is expected to launch a direct route between Hong Kong and Da Nang in March.

This will be the airline’s second destination in Viet Nam, following on from its Ha Noi service.

Flights by Airbus A320 aircraft will take place on Tuesdays, Thursdays and Sundays.

Dragonair, an affiliate of Cathay Pacific Group, now serves over 40 regional destinations.

Maritime Bank rolls out new debit card

The joint stock Maritime Bank in co-operation with DDSaigon Company has launched its Capella debit card, enabling holders to draw money at the ATMs of around 30 banks free of charge.

The policy will continue, even when banks are expected to start charging fees on withdrawals by their own customers.

A total of 300 brands in areas including hotels, restaurants, cafeterias, supermarkets and fashion have joined the promotion programme for card users, offering price reductions of up to 50 per cent.

VietJetAir launches hotel booking service

VietJetAir has teamed up with international hotel reservation group Agoda to launch a hotel booking service, offering passengers greater discounts on holidays or business trips.

As a result, passengers can save up to 75 per cent on accommodation fees through a network of 265,000 hotels in Viet Nam and across the world by booking hotel rooms on www.vietjetair.com.

CMC Corp merges two telecom affiliates

CMC Corp, one of the leading technology firms in Viet Nam, has announced a merger of its two affiliates, CMC Telecom and CMC TI, as part of a development strategy.

As a result of the move, CMC Telecommunication Infrastructure Joint Stock Co (CMC Telecom) will become the company’s only unit involved in the internet and telecommunications sectors.

CMC Telecom general director Nguyen Duc Thanh said: “The merger marks an important landmark in restructuring our business areas in order to reduce costs and foster the development of potential sectors and products.”

The company has targeted 250,000 customers and VND1 trillion (US$48.8 million) revenue by 2015.

Vinacomin begins January push to sell more coal

The Vinacomin Group has set a goal of selling 4 million tonnes of coal in the first month of 2013. The move is considered ambitious as the group’s coal consumption reached only 9.5 million tonnes in the first quarter of last year.

Vinacomin also revealed two business plans for this year – an intention to produce 43-46 million tonnes while selling 41.5-43 million tonnes.

Delta drafts plan for industry

The Cuu Long (Mekong) Delta provinces target industrial production value of nearly VND188 trillion (US$9 billion) in 2013, a year-on-year increase of 17.4 per cent.

Delta provinces will work with each other to produce seven key products, including seafood, rice, beer, fertiliser, footwear and cement as well as fruits and vegetables.

To reach their goal, the provinces will first offer training courses in management skills to local businesspeople.

In addition, authorities in the region will try to improve business competitiveness by developing industries that have high added-value products. As part of their plan for this year, the region’s authorities will create advantageous conditions for companies so they can have good production results.

The plan also aims to develop an equitable and healthy competitive environment for all companies..

To assist small- and medium-sized enterprises with capital and management, the Delta provinces will set up a credit-guarantee fund, which will also help companies tap new markets.

Export and trade promotion activities will be increased so that companies can have up-to-date information about trade barriers in other countries. This information would help businesses overcome risks in the global market.

The provinces have also encouraged companies to create appropriate business strategies, lower prices, improve product quality and use more advanced technologies.

The plan urges companies to work together to find more partners to export rice, seafood, cement, footwear and other products.

The provinces, for their part, have pledged to invest more in technology and science to develop rice and seafood production.

They also plan to help local farmers and companies use new technologies in the harvesting, processing and storing of rice and seafood.

Such practices can improve quality and help meet the demand of big markets such as the US and the EU.

Last year, the Delta region’s industrial production value hit nearly VND158 trillion, an increase of 15 per cent over 2011.

The region’s leading provinces, Long An, Can Tho, Kien Giang and Dong Thap, have the most developed industrial and trade sectors in the area.

VN–UK trade turnover increases

Bilateral trade turnover between Viet Nam and the UK has seen average annual growth of about 20 per cent in recent years despite the global economic recession, according to the Vietnamese Embassy in the UK and North Ireland.

In the first 10 months of 2012, bilateral trade turnover reached more than US$3.5 billion, a jump of 36 per cent compared to the same period in the previous year.

During the same period, Viet Nam earned US$3.2 billion from exports to UK, a year-on-year increase of 44 per cent, according to the embassy’s report.

Key Vietnamese exports to the UK are mobilephones, footwear, garments, coffee, tea, spices and plastic.

Imports from the UK for the first 10 months of last year totalled $378 million, a surge of 91 per cent year-on-year. The main imports were chemicals, machinery, medicine and steel.

During this 10-month period, Viet Nam enjoyed a trade surplus of $2.8 billion with the UK.

The embassy estimates that bilateral trade turnover would reach more than than $4 billion for last year.

Despite such promising results, experts said that Vietnamese products in the UK were still less competitive than those from Thailand, China and India, mostly due to the smaller volume that is exported.

To enhance trade relations and maintain growth, the embassy urged Vietnamese companies to do more marketing and advertising so that UK partners and consumers could learn more about their products.

In order to maintain trade growth, more key products should be exported to the UK as well as an increased volume, experts have suggested.

According to the Ministry of Industry and Trade, trade turnover between the two countries in 2011 was more than $3 billion.

Overseas investment benefits VN firms

Viet Nam’s overseas investment was expected to hit US$1-1.5 billion in registered capital this year, while disbursed capital was estimated at $0.9-1 billion, according to the Foreign Investment Agency.

Statistics showed that there were 712 overseas Vietnamese projects as of December last year with total registered capital of $12.4 billion in 60 countries and territories. Total disbursed capital was at $3.8 billion.

In 2012 alone, 75 new investment projects were licensed with total registered capital of $1.3 billion in 28 countries and territories. Last year’s total disbursed capital reached $1.2 billion, representing an increase of 28 per cent over 2011.

According to the agency’s director Do Nhat Hoang, overseas investments had been largely successful, gaining a profit of $430 million to date.

Projects were mainly focused on mining, telecommunications and agriculture, with increased investments in Laos, Cambodia and Myanmar.

Hoang added that they had helped to create jobs for thousands of Vietnamese workers as well as local people.

According to the agency, Vietnamese enterprises abroad still faced difficulties such as insufficient legal frameworks and slow implementation of many projects.

The agency asked for a legal framework to support enterprises on overseas investment to be completed, together with specific policies for investment in Laos and Cambodia.

VN exports to France jump by 40 per cent

Viet Nam’s exports to France surged by 40 per cent to 2.7 billion euros (US$3.54 billion) last year, according to statistics from French Customs.

Among its key export items were mobile phones, electronic parts, furniture, household utensils, garment, footwear and seafood.

Experts said that Vietnamese enterprises should form strategies to exploit the market, study trade rules, consumer tastes and culture, as well as set up long-term partnership with local businesses.

They also emphasised the importance of organising trade promotion programmes and international fairs while strengthening ties with Vietnamese entrepreneurs in France.

MobiFone 2012 profit shows modest gains

MobiFone has reported a pre-tax profit of VND6.6 trillion (US$322 million) last year, marking a modest increase of 6 per cent.

MobiFone accounted for 77.6 per cent of the parent telecom group VNPT for the period.

The operator’s revenue reached VND40.8 trillion ($1.99 billion), equivalent to 31.2 per cent of VNPT’s total revenue for the year.-

Trading band to increase on both bourses

The State Securities Commission yesterday increase the daily trading band for stocks on both the HCM City and Ha Noi stock exchanges, effective January 15. Under the decision, the amount by which a stock’s price can increase or decline within a single trading day will increase to plus-or-minus 7 per cent in HCM City and plus-or-minus 10 per cent in Ha Noi.

The commission yesterday also lifted the limit on margin trading from the current ratio of 40-60 per cent of debt to equity to a 50-50 ratio, effective February 1.

Commission chairman Vu Bang said the decision aimed to help invigorate sluggish trading on the securities market and was reached through close co-ordination by ministries and agencies. Any measure taken by the commission, he said, required approval from the Government and the Ministry of Finance.

Further measures to address the difficulties on the securities market would be undertaken gradually, he said. Rasing the limit imposed on foreign ownership in listed companies would depend upon a decision by the Prime Minister, but the commission has proposed that strategic foreign investors in some types of listed companies be able to hold shares without voting right in excess of 49 per cent of equity in the company.

Regarding capital gains on securities transactions, the commission and the Ministry of Finance have called for legislation in the National Assembly to reform the taxes levied on securities investors. In order to continue attracting foreign capital to the market, the two agencies have proposed that the Government offer tax incentives for new forms of investment, such as open-ended funds, real estate funds, securities investment companies and pension funds.

Bang also said that rising bad debt levels in the commercial banking system needed to be addressed before the stock market was likely to recover.

The commission has also petitioned the State Bank of Viet Nam to place the securities industry on its list of non-manufacturing industries eligible for preferential interest rates from banks, said Bang.

Cambodia trade target surpassed

Viet Nam and Cambodia have fulfilled their trade potential over the last decade and will continue to do so in the future, Industry and Trade Minister Vu Huy Hoang has declared.

Speaking at a conference on the two countries’ border trade co-operation yesterday, the minister said that both nations were set to meet their target of boosting the value of bilateral trade up to US$5 billion by 2015.

Sharing a border stretching nearly 1,000km with Cambodia, Viet Nam has become a major exporter to the country, trading key products such as petroleum, steel, building materials, fertiliser and medicine. The country also imports rubber, unprocessed timber, cashew nuts and sliced cassava from Cambodia.

During 2001-11, their bilateral trade value increased 17 times, from $169 million to $2.83 billion, with an average yearly growth rate of 23 per cent. Last year alone, the figure was reported to have reached over $3 billion, exceeding the set target.

At the conference, Hoang and his Cambodian counterpart Cham Prasidh signed an agreement to develop a plan for a market network in border areas.

They declared that they would accelerate the approval of a pilot programme to build markets in the targeted areas.

They also committed to continuing the development of mechanisms and preferential policies including tariff incentives as well as fostering administrative reform to facilitate trade activities.

On Tuesday, a ground breaking ceremony for the opening of a market belonging to the pilot programme was organised at Thary Special Economic Zone in Cambodia’s Kampong Cham Province.

One stop shop at the VSIP

Electronic manufacturing facilities at the VSIP-Bac Ninh outside Hanoi will benefit from on-the-spot logistics  and customs services.

In an announcement recently released, Deputy Prime Minister Hoang Trung Hai approved the Bac Ninh Provincial People’s Committee proposal for developing a warehouse for air logistics at the park.

The warehouse will facilitate import and export operations of manufacturers located inside VSIP-Bac Ninh, located 40 kilometres from Noi Bai International Airport.

The VSIP-Bac Ninh, developed by Vietnam-Singapore Industrial Park and Township Joint Stock Company, has attracted many foreign investors in hi-tech electronic industry such as Foster, Unigen Fujikin and Nokia.

When all these electronic manufacturing projects are operational this year, the air logistics warehouse is expected to save cost and time to manufacturers in import and export operations.

Bac Ninh province’s proposal was based on the effectiveness of a warehouse for air logistic built inside the province’s Yen Phong Industrial Park, home to Samsung’s $1.5 billion manufacturing complex.

This warehouse has significantly contributed to successful export and import operations of Samsung’s mobile phone facility, the local authorities said in their proposal previously sent to the Vietnamese government for approval.

It is estimated the total throughput capacity last year in the warehouse in Yen Phong Industrial Park to reach around 40,000 tonnes, doubling the amount of 2011. This volume accounted for 35 per cent of the total cargo handled through Noi Bai airport.

Aviation Logistics Joint Stock Company, which also built the warehouse in Yen Phong Industrial Park, will be the investor of the newly approved warehouse in the VSIP-Bac Ninh.

ITC Spectrum gets a stay of execution

The US’ ITC Spectrum LLC has failed to meet the deadline given by Binh Dinh Provincial People’s Committee for advancing money for land compensation costs to build two luxury hotels under Ritz-Carlton and JW Marriott brands in the central province.

However, the local government will not revoke the investment certificate of the investor as previously threatened.

Man Ngoc Ly, director of Binh Dinh Provincial Economic Zone Management Authority, said ITC Spectrum had not transferred VND21 billion, or $1.04 million at the current exchange rate, before December 31, 2012 as committed.

“The investor said they had trouble with procedures for money transfer, so that they failed to make commitment on time,” said Ly.

In September 2012, Binh Dinh Provincial People’s Committee asked the investor to advance the $1.04 million sum before October 31, 2012 or the provincial committee would revoke the investment certificate of this project. But the investor asked the government to extend this deadline by the end of 2012 and this petition was approved.

“Site clearance and land compensation will not complete if the investor does not advance money. We understand that they are in a difficult situation, therefore we will not withdraw the project’s investment certificate at the current time,” said Ly, adding the local authorities continue to support the investor.

Under the commitment with Binh Dinh, Ly said, ITC Spectrum would have to cover all VND135 billion ($6.4 million), of compensation and site clearance costs. The $1.04 million is just a part of the total amount. Until now, only 135 out of 325 hectares of the project site have been cleared.

ITC Spectrum is developing Vinh Hoi resort project through a wholly-owned subsidiary Vietnamese-American Hotel and Resort Limited Company. In 2010, Marriott International signed a management agreement with the US firm to manage the project under two luxury hotel brands including Ritz-Carlton and JW Marriott.

According to Marriott International, the project will be an oceanfront, fully-integrated, mixed-use development including three resorts, a championship 18-hole golf course designed by Robert Trent Jones II, residential villas, a retail village, an arboretum and other recreational amenities.

However, construction of this project, licenced in 2007, has never begun due to site-clearance difficulties. In September 2012, the Vietnamese government agreed to extend lifetime of this project to 55 years from 50 to partly compensate for the time delay caused by these difficulties.

Local firms seek good times overseas

Even though many Vietnamese companies are struggling at home, the latest report of the Ministry of Planning and Investment shows that some have been successfully expanding outbound investment projects.

The Foreign Investment Agency (FIA) under the Ministry of Planning and Investment reported that Vietnamese companies last year registered to invest in 75 overseas projects in 28 countries with the commitment capital of $1.3 billion.

At the same time, the disbursement capital of Vietnam’s outbound investment projects reached $1.2 billion, an impressive increase of 28 per cent from a year earlier.

Until December 20, 2012, Vietnam’s total outbound investment commitment was $12.4 billion in 712 projects in 60 countries, and the disbursement was $3.8 billion. Most of the projects are focusing on mining, oil and gas, hydropower, telecommunications and forestry, according to the report.

“There is a growing trend of overseas investment projects in Laos, Cambodia and Myanmar that is appropriate to the orientation of Vietnam,” the FIA said in the report.

The agency also reported that some of Vietnam’s outbound investment projects were operating with profits and they brought home $430 million last year.

This year, it is forecasted that Vietnam’s outbound investment commitment will be around $1.5 billion and the disbursement will stay around $900 million.

Over 80,000 guest workers sent abroad in 2012

Viet Nam sent more than 80,000 workers abroad last year and brought back US$1.7-2 billion remittance, according to the Department of Overseas Labor Management (DOLM).

Viet Nam still sends over 80,000 workers abroad in 2012 despite hard global economic time – Illustration photo
In its latest report, DOLM said that the Republic of Korea (RoK), Taiwan, Malaysia and Japan remain Vietnamese traditional markets, among which Taiwan received 30,533; RoK 9,228; Malaysia 9,298; and Japan 8,775.

In 2012, Taiwan is the biggest labor market for Vietnamese workers who chiefly specialize in manufacturing, engineering, garments, agriculture and carpentry.

A DOLM representative forecast that in 2013, the RoK and Taiwan would employ biggest number of Vietnamese workers thanks to higher basic salaries and more benefits for extra working hours in comparison with other markets.

Statistics showed that in 2011, 88,000 Vietnamese workers were sent abroad to key markets like the RoK, Japan, Taiwan and Malaysia./.

Quang Ngai calls for investment in 38 projects

Quang Ngai Province’s People’s Committee has approved 38 Foreign Direct Investment projects till 2020.

A bird view of the Dung Quat Economic Zone in Quang Ngai Province
Leaders of the province committed to boosting up administrative procedures reform and creating open mechanisms and best investment environment for investors.

Since 2006, Quang Ngai has licensed investment certificates for 318 projects with the total registered capital of VND 181,507 billion, including 22 FDI projects, worth around US$3.9 billion.

The province now has one economic zone, three concentrated industrial parks and 16 industrial handicraft village complexes.

The Dung Quat Economic Zone in the province has attracted 111 licensed projects with the registered capital of more than US$8 billion and the realized capital of over US$4.8 billion, creating jobs for nearly 13,000 laborers.

The zone sets the goal to attract foreign and domestic investment of around US$12-15 billion, of which 50-60% will be disbursed.

PM Dung: credit growth must be in line with set targets

Prime Minister Nguyen Tan Dung has emphasised five major tasks for the State Bank of Vietnam (SBV) to implement this year, with a focus on ensuring credit growth reaches the set targets.

Speaking at a January 9 conference in Hanoi to devise the 2013 tasks for the SBV, Dung asked the SBV Governor to help the government keep a check on inflation.

The challenge of reducing inflation while maintaining economic growth in 2013 is a difficult one, because if growth goes below 5 percent, the unemployment rate is likely to increase. To fulfill this task, the SBV will need to manage monetary policy in a more flexible and effective manner to reduce the inflation rate of 2012.

This challenge shows the political determination of the Party, National Assembly and Government, Dung said.

The PM underlined the need to ensure liquidity and the operations of credit organizations for the national economy, and to pour more capital into priority areas such as agriculture, rural development, exports, support industries and small and medium sized enterprises (SMEs).

Ensuring that credit growth is in line with the set targets is a task not only for the State Bank of Vietnam, but also for commercial banks, as the interests of commercial banks are also those of businesses. Therefore, the banking sector must help businesses iron out inefficiencies.

It is imperative to deal with bad debts in conjunction with the restructuring of banks to help them operate more effectively, as well as to manage the gold market and exchange and interest rates to help stabilize the macroeconomy, he said.

Dung also asked the SBV to intensify its inspection and supervision of banking institutions, revamp their operations where required and to create a transparent and fair legal foundation for credit organizations.

Coffee sector gearing up for sustainable growth

Public-Private Partnership (PPP) for coffee development is considered an ideal solution for the coffee sector, as investors involved in the project are committed to purchasing products in advance.

The objective of the PPP model aims to help farmers improve the value of agricultural products and ensure that all partners enjoy the best benefits from a commodity-oriented agriculture.

According to Minister of Agriculture and Rural Development Cao Duc Phat, the Government of Vietnam is pressing ahead with administrative reform to create favourable conditions for investors in agricultural and rural areas.

Since an initiative was put forth at the World Economic Forum in HCM City in June 2010. The task force has conducted six multilateral meetings to identify major challenges and develop key strategies for sustainable development of the coffee sector in Vietnam. Currently, the task force is implementing two pilot projects in the provinces of Lam Dong, Dak Nong and Dak Lak.

The PPP project on coffee development is a venture between foreign and domestic investors, including international associations such as the World Economic Forum, 4C Association, Rainforest Alliance, Utz Certified, and local institutions such as farmers associations, the Ministry of Agriculture and Rural Development, the Western Highlands Agro-Forestry Scientific and Technical Institute (WASI), VICOFA, local authorities, and processing factories.

The project includes two major groups, one in charge of inputs and the other of outputs. The first is comprised of Syngenta, Bayer, BASF and Yara International with the Ministry of Agriculture and Rural Development and the National Agricultural Encouragement Centre as provider of technical knowledge.

Nestle and Neuman are in charge of ensuring the quality of the final products and maintaining distribution outlets. Meanwhile, the International Cooperation Department under the Ministry of Agricultural and Rural Development is managing and co-ordinator of the project.

Representatives from Syngenta Vietnam said that the PPP project in Dak Lak is a typical success story, starting with just 2 hectares. Only 20 households were involved in the project in 2010. Two years later, the number of households increased to 70 on 20 hectares. Up to now, it has established close links between coffee growers and farmers in value chain for various kinds of coffee products.

As the value of Vietnamese coffee in the world market is not high, the focus of the project is on improving the quality of coffee growing and processing.

Le Ngoc Bau, Director of WASI, spoke of the duties and responsibilities of all the companies involved in the project. For example, plant protection companies are responsible for providing pesticides, while fertilizer companies are in charge of stable production and supply. After the project is completed, it is possible that foreign companies will no longer have enough funding for further investment and maybe, farmers will have to find financial support on their own, Bau said. As for those involved in the PPP project, what’s worth doing is worth doing well at any cost, he added.

Vietnam, Cambodia strengthen cross border trade

The Ministry of Industry and Trade (MOIT), in conjunction with the Cambodian Ministry of Commerce, held the 5th Conference on Vietnam-Cambodia Border Trade Development Cooperation in southern Binh Phuoc province on January 9.

The event reviewed the results of cooperation in cross border trade between the two countries, and propose major orientations and measures to exploit the border area’s potential.

According to MOIT Minister Vu Huy Hoang, bilateral economic and trade relations have developed in recent years. Customs statistics showed that two-way trade turnover reached US$2.83 billion in 2011, a year-on-year increase of 55 percent. The figure for 2012 is estimated to exceed US$3 billion.

At the conference, the two ministries agreed to coordinate the development of the border market system, continue building preferential policies and mechanisms for border trade, and provide each other with customs incentives, especially for agricultural products.

The two sides will continue to implement signed agreements within the framework of bilateral economic, cultural and science-technology cooperation, as well as regional agreements and cooperation.

They will establish border trade development programmes to attract greater investment from other countries in the region and the world to reduce poverty and improve the living standards for local people in the two countries’ border areas.

At the event, Minister Hoang and his Cambodian counterpart Cham Prasidh signed an agreement to implement the development plan of the Vietnam-Cambodia border market network. Nguyen Cam Tu, Deputy Minister of Industry and Trade, and Keo Sok Nay, Secretary of State of the Cambodian Commerce Ministry, signed a Memorandum of Understanding on the 5th Vietnam-Cambodia border trade development cooperation.

Earlier on January 8, the construction of a pilot Vietnam-Cambodia border market began along the border between Vietnam’s Tay Ninh province and Cambodia’s Kompong Cham province.

Vinatex turnover increases in 2012

The Vietnam National Textile and Garment Group (Vinatex) earned US$2.6 billion from exports in 2012, a year-on-year increase of 16 percent.

This was an impressive export growth compared to the 8.5 rate obtained by the whole garment sector.

Despite the domestic economic slowdown, its total revenue rose 16 percent over 2011, hitting nearly VND41 trillion and exceeding the annual plan by 2 percent.

The figures testified the group’s all-out efforts in maintaining production and increasing product quality in the context of low demands from big markets like the US, the European Union and Japan.

The group shifted to the domestic market, by opening nearly 20 new Vinatext Marts in 2012, bringing the total number of its retail distribution agents across the country to 80.

At a review conference on January 8, Vinatex’s Deputy Director General Le Tien Truong said in 2013 the group aims to achieve a growth rate of 12 percent over 2012.

He revealed that Vinatext has received bulk orders from its importers in the first and second quarters of 2013.
To fulfil the set target, the group will give priority to accelerating the equitisation of its parent company – Vinatext – and prepare for an initial public offering (IPO) in the second quarter of this year.

Boosting rice exports to Japan

Japan has become a lucrative market for Vietnamese exporters as it annually needs nearly 200,000 tonnes of rice.

Last year, Japan imported 70,000 tonnes of rice, of which 30,000 tonnes came from Vietnam.

Nguyen Van Tien, General Director of Angimex Joint Stock Company – a leading rice exporter to Japan – says Angimex is cooperating with other domestic businesses to boost rice exports to Japan, which is in need of about 72,000 tonnes of imported rice this year.

However, Tien says, local exporters should pay attention to meeting Japan’s strict regulations on chemical residue to secure a firm foothold in this promising market.

He insists that the Ministry of Agriculture and Rural Development strictly monitor key rice growing areas in Vietnam to ensure food hygiene and safety. Local exporters should improve the quality of rice to compete against Thai rivals which are shipping a large volume of rice to the Japanese market.

If Vietnam successfully control chemical residue in rice, both local exporters and farmers can earn more profits as the price of imported rice in Japan is normally 10 percent higher than the average price in other markets.

Truong Thanh Phong, Chairman of the Vietnam Food Association (VFA), says three years ago Vietnam exported nearly 200,000 tonnes of rice to Japan. As local rice exporters have failed to meet Japanese importers’ strict regulations on chemical residue, their export volume is on the decline.
He suggests local rice producers and exporters study Japan’s market trend and consumer taste as it likes to import 15-percent broken rice with low chemical residue.

High unemployment and economic gloom

Economists have reported the national economy faced numerous challenges during 2012, with many businesses suspending operations or declaring bankruptcy and contributing to the year’s rising unemployment rate.

The latest statistics released by the Ministry of Planning and Investment (MPI) reveal that as of November 30, 2012, more than 65,000 businesses were operating with a total registered capital of over VND418,853 billion. It represents a 10 percent fall in quantity and an 8.4 percent fall in value compared to the same period in 2011.

As many as 39,936 businesses were suspended and more than 8,500 others dissolved, mostly in the country’s two largest cities Hanoi and Ho Chi Minh City.

Bui Anh Tuan, Deputy Head of the MPI’s Business Registration Management Department, says that the number of newly-established businesses also declined over the past year – from 17,820 in the first quarter to 16,195, 16,978, and 17,300 in the second, third, and fourth quarters, respectively.

He attributes the decline to a frozen real estate sector that had previously enjoyed impressive annual growth of 6–7 percent. A large number of real estate businesses were forced to declare bankruptcy, while many firms have shown interest in moving into other sectors like education, health care, culture, and tourism.

Tuan says other countries including Japan and the US have also suffered increasing incidences of business dissolution in recent years – as much as 10-15 percent. Vietnam’s dissolved and suspended businesses (over 48,470) are still comparable.

In his view, the balance between dissolved and newly-established businesses demonstrates real market development and accords with the national economy’s internal strength.

According to the General Statistics Office (GSO), more than 52 million Vietnamese people were of working age in 2012—up 2.3 percent compared to last year’s figure. Although 2012’s 1.99 percent working age unemployment rate was lower than 2011’s 2.22 percent, the number of unemployed workers rose by 195,000. At present, nearly one million workers are seeking jobs, while 1.45 million others want additional part-time employment.

The GSO says the focus of social welfare should be on stimulating employment to improve people’s living standards.

Vietnam-UK trade turnover increases sharply

The two-way trade turnover between Vietnam and the United Kingdom reached GBP2.23 billion (US$3.57 billion) in the first ten months of 2012, up 36 percent against the same period last year.

Statistics released by the Embassy of Vietnam in London on January 8 show Vietnam’s export earnings, mainly from cell phones and electrical equipment, footwear, garments and textiles, furniture, machinery and equipment, coffee, tea, spices and plastics, were estimated at GBP1.99 billion (US$3.19 billion) (up 44 percent).

While its imports from Europe’s third biggest economy reached GBP235.97 million (US$377.55 million), up 91 percent compared to the same period last year.

Import items included chemicals, machinery and equipment, pharmaceuticals, electronics and steel and iron.

The Embassy of Vietnam expects Vietnam-UK trade turnover in 2013 to exceed the target of US$4 billion set by the two countries in the agreement on strategic partnership signed in September 2010.

Commercial counsellor Nguyen Thi Hong Thuy said despite being affected by the global economic downturn in recent years, the two-way trade turnover between Vietnam and the UK keeps rising 20 percent on average year on year.

ANZ aims for long-term investment in Vietnam

Australia and New Zealand Banking Group Limited (ANZ) considers Vietnam its key market in the Asia-Pacific region.

Over the past five years, the Asia-Pacific has been one of ANZ’s most lucrative markets, contributing 20 percent of the bank’s total revenue or around US$3 billion.

During a working session with Deputy Minister of Finance Truong Chi Trung in Hanoi on January 7, ANZ Vietnam General Director Alex Thursby said the bank is seeking to introduce its latest products to the Vietnamese market.

ANZ’s development strategy focuses on offering Vietnam products and services already tested on global markets, helping Vietnam stabilise its financial market, Thursby said.

He pledged ANZ’s long-term commitment to investment and cooperation in Vietnam.

Deputy Minister Trung highlighted the business potential inherent in Vietnam’s sustainable economic growth, young population, and political stability. Vietnam always seeks to foster favourable conditions for investors, including foreign credit organizations, to operate and expand their businesses based here, he added.

Nine airline incidents under investigation

The Civil Aviation Authority of Vietnam (CAA) is conducting investigation into nine airline incidents that have posed a severe threat to flight security.

In 2012 the aviation sector had 224 airline incidents, a decline of 15.2 percent over 2011 with no accidents. Of these, 143 were caused by technical problems, 75 by objective reasons and 21 by passengers. Four serious cases are still under investigation.

Violations of flight security and public order at airports and on the planes were found and handled in time. The number of disturbances and bomb threats were also on the decline.

To ensure flight security and safety, the CAA will take effective measures to implement the National Safety Programme approved by the Ministry of Transportation.

Vietnam Airlines launches new domestic route

The national flag carrier Vietnam Airlines has announced it will launch a new direct route linking Ho Chi Minh (HCM) City and northern Thanh Hoa province on February 5.

The airline will offer five flights a week, using 184-seat Airbus 321, on Monday, Wednesday, Friday, Saturday and Sunday, to meet the increasing demand of transportation between the central and southern regions.

This is the 39th route in the domestic network operated by Vietnam Airlines, which connects the three big cities of northern Hanoi, central Da Nang and southern Ho Chi Minh City to 21 cities and provinces nationwide.

On the occasion, the carrier started a promotional campaign, offering one-way tickets for HCM City-Thanh Hoa route at VND1,150,000 (approximately US$54), exclusive of taxes and fees, until March 31.

Direct Hong Kong-Danang air route imminent

Hong Kong Dragon Airlines Limited (Dragonair) plans to launch a direct air route between Hong Kong and the central city of Danang on March 28.

Dragonair will operate three flights departing from Hong Kong (China) to Danang (Vietnam) a week – on Tuesdays, Thursdays, and Sundays.

The new route will expand Dragonair’s Asian network and provide passengers travelling to Vietnam with more options.

Danang is the airline’s second Vietnamese destination. Dragonair currently operates 10 flights a week from Hong Kong to Hanoi.

Dragonair’s parent company Cathay Pacific conducts 16 flights a week between Hong Kong and Ho Chi Minh City.

Dragonair Chief Executive Officer Patrick Yeng said Vietnam is an increasingly important economic and tourist destination. He believes the new Danang route will lure more Hong Kong tourists to Vietnam, and vice versa.

Travel magazine suggests must-see destinations in VN

The Lonely Planet Traveller of the UK, a leading travel magazine in the world, has suggested five must-see destinations in Vietnam for those who wish to make a vacation in the country.

The capital city of Hanoi is introduced as a wonderful urban place with graceful boulevards for discovering.

The northern mountainous city of Sa Pa, which is geographically featured with hike mountain tracks, is the best destination for walking tours.

The world’s heritage site Ha Long Bay is a draw for charming coastal lines fringed by white sandy beaches and surreal-looking limestone islands.

The graceful historic old port of Hoi An in the central is labeled as the best place to enjoy local culinary delights.

And, the southern Mekong Delta is suggested for those who love to have experiences of a life on the river.

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

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