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New bond trading system launches

The second version of the Government bond trading system was introduced by the Ha Noi Stock Exchange last week and will be used for the first time next Monday when Circular 234/2012/TT-BTC takes effect.

The system was upgraded in response to provisions in the circular concerning risk management and repurchase agreement (repo) trading. A repo agreement occurs when the selling party agrees to repurchase bonds in the future.

The new version integrates bond and treasury bill trading, information systems and a yield curve.

“The Government bond market has actively contributed to investment resources of both the State budget and financial institutions this past year,” said Deputy Minister of Finance Tran Xuan Ha.

In addition, Ha said, the liquidity of the market improved significantly –boosting capital turnover and creating conditions for short-term capital to develop into long-term funding, which would help the domestic economy.

The deputy minister told the exchange to improve the market structure of types of bonds and terms, in addition to boosting market liquidity and transparency.

The performance of bidders should be assessed and issuance plans should be made public, he said.

Ha also called for market operators to coordinate with the State Bank of Viet Nam in implementing fiscal and monetary policies in order to maintain a proper interest rate level.

Government bonds increased in value twice last year, totalling nearly VND67.6 trillion (US$3.2 billion). Bond yields declined over 2011 and were 1-2 per cent lower than deposit rates. The deployment of the first bond trading system in August created an effective link between issuing organisations, managing agencies and investors.

This year, the Government expects to mobilise a total of VND150 trillion ($7.1 billion) through bonds, including VND90 trillion ($4.2 billion) to address the budget deficit. The remainder will go towards investment projects.

Ford Vietnam’s February sales rise 62 per cent

Ford Vietnam today announced February retail sales that jumped more than 62 per cent year-over-year to 351 vehicles, as the overall industry continues with a steady recovery from a year ago.

The strong February performance allowed Ford to capture 8.3 per cent of the overall vehicle market for the month, which is traditionally light in sales due the Lunar New Year holiday.

“We’re encouraged with a gradual and continuing recovery of the industry this year,“ said Laurent Charpentier, managing director of Ford Vietnam. “We’re equally as pleased that customer response to our full lineup of One Ford vehicles continues to be very positive, and is helping widen the appeal of the Ford brand to so many new-to-Ford customers.”

The popular Ford Transit commercial van continued to drive Vietnam’s overall performance with February retail sales that more than doubled from a year ago to 107 units.

In its third full month of availability in Vietnam, sales of the all-new Ford Focus also more than doubled from the previous generation Focus a year ago to 66 units.

This exciting next-generation model continues to gain in appeal among Vietnamese consumers by delivering an unmatched combination of smart technologies, innovative design and safety features, and fuel efficiency.

“The all-new Focus features a number of first-in-class technologies, including Active Park Assist, Active City Stop, Blind Spot Information System and Active Grille Shutter that truly help set it apart from the competition,” said Charpentier.

The all-new Ford Ranger delivered sales that rose 103 per cent from a year ago to 57 units. The versatility and capability of the class-defining all-new Ranger continues to attract consumers who appreciate its class-leading performance, comfort and features.

Ford also continued to enhance its dealership showrooms and customer care network across the country, including the recent upgrade of Thang Long Ford Thanh Xuan in Hanoi to a fully authorised dealer named Thanh Xuan Ford of Ford Vietnam.

“The quality of our service is equally as important as the quality of our Ford vehicles,” explained Charpentier. “As we continue to introduce new segment-leading cars and trucks, and our customer base continues to expand, we remain committed to further enhancing our service to ensure we’re providing a world-class customer experience.”

All-new Chevrolet Colorado LTZ pickup arrives in Vietnam

The all-new Colorado, which was designed and engineered to be Chevrolet’s toughest, highest-performing and most refined pickup truck ever, was introduced in Vietnam today by General Motors Vietnam.

The all-new Colorado is the product of a five-year, $2 billion vehicle programme. It offers more technology and delivers more features and value than ever before. Interiors, exteriors and major mechanical features are all new, representing the most clean-sheet midsize truck programme in Chevrolet’s more than 100 years of history.

The first member of the Colorado being introduced by GM Vietnam is the Colorado LTZ which is equipped with an all-new Duramax turbo-diesel engine that provides a leading combination of performance and fuel efficiency, as well as better performance on Vietnam’s roads than other engines. This 2.8L diesel engine delivers a power of 178 hp/3,800 rpm & torque of 440 Nm/2000 rpm. This is the best and most powerful engine in Vietnam market in the segment.

“No brand knows pickups and the expectations of pickup buyers better than Chevrolet. Being the first CBU of GM in Vietnam, our new pick up will strengthen Chevrolet’s image in the market. ” said Gaurav Gupta, GM Vietnam’s managing director. “We are confident that this is the right vehicle for even the toughest truck users in Vietnam”

GM Vietnam’s head of Sales and Marketing Le Thanh Hai added: “Today a vehicle is more than just about its functions. It is also a reflection of personal character and style. We have gone beyond just meeting the needs of our customers for a strong and reliable vehicle by offering a product that will excite entrepreneurs and car enthusiasts as well. The Colorado LTZ also addresses the needs of ‘men of steel’ with its styling, powerful and fuel-efficient engine, and luxurious interior.”

GM Vietnam has headquarters and a manufacturing facility in Hanoi. It has an annual assembly capacity of 30,000 vehicles and operates a nationwide sales network with 25 dealers, 26 showrooms and upgraded aftersales service centres in major cities of Vietnam.

Businesses respond to e-customs procedures

As many as 28,948 enterprises nationwide, or nearly 93 percent of those conducting import-export activities, have used e-customs service since it was officially launched earlier this year.

The procedures were processed by all 34 customs departments across the country during the first two months of the year, according to the General Department of Customs.

A total of 696,218 customs declarations were computerised, helping with an import-export volume of 33 billion USD, which accounted for nearly 92 percent of the country’s total figure.

E-customs was piloted in 2005 in the northern port city of Hai Phong and HCM City , under the Government’s Decision 149.

The procedures have so far been handled at 90 customs sub-departments across 20 cities and provinces nationwide, including Hanoi, central Da Nang city, and the southern provinces of Dong Nai and Binh Duong, which house a large number of FDI projects.-

First BPO joint venture established in Southeast Asia

Japan ’s AGREX Company and Vietnam ’s FPT Software Company have set up a joint venture to provide high-quality global business process outsourcing (BPO) service to the Japanese market.

The establishment of the venture, F-AGREX, the first of its kind in Southeast Asia was announced in Hanoi on March 12.

According to Chairman of FPT Software Company Hoang Nam Tien, the joint venture is in line with the companies’ strategic orientations.

F-AGREX will bring into play AGREX’s strengths in providing BPO services and FPT’s cooperation experience with Japanese partners, said the chairman.

In addition to providing services for the Japanese market, the joint venture will consider expanding its service to Vietnam and other Southeast Asian countries in the future, said Tien.

He added that the BPO service, which is very suitable to the Vietnamese market, requires a great amount of human resource.

The event prepares the direction for the country’s BPO industry.

On the occasion, the two firms signed a Memorandum of Understanding to start their “Global BPO” plan, providing worldwide BPO services of Japanese quality at a Vietnamese price.

Plans surrounding Vietnam’s largest int’l airport

An area of 21,000 hectares surrounding the impending Long Thanh International Airport, the largest in the country, in the southern province of Dong Nai has been earmarked for development.

The plans for the area, which covers 12 communes of Long Thanh and Cam My districts (excluding the 5,000-hectare airport), were unveiled by the provincial People’s Committee to collect opinions from local authorities on March 11 in the locality.

Under the plans, the area will be transformed into a prosperous economic development zone to make full use of the economic benefits the airport will create, according to the Dong Nai Construction Department.

Construction on the new airport is expected to start in 2015. It will be operational by 2020 and capable of handling 25 million passengers and 1.2 million tonnes of cargo per annum. By 2030, these figures are expected to reach 100 million passengers and 5 million tonnes.

The airport will be able to receive large jumbo jets like the A380-800.-

Da Nang moves to lure Japanese investment

The People’s Committee of central Da Nang city has recently met with Minister at the Japanese Embassy in Vietnam Hideo Suzuki to seek his help in drawing more Japanese investment to the city’s hi-tech parks.

Da Nang has to date seen the 40 million USD project of the Tokyo Keiki Group and the 11.2 million USD project of Niwachuzo in its hi-tech park.

Minister Suzuki has pledged to do his best to promote the image of Da Nang to Japanese people and businesspeople.

There are 87 Japanese enterprises and representative offices with a total investment capital of 350 million USD operating in the city.-

Telephones and spare parts become potential exports

Export of telephones and spare parts expanded 5.5 times in 2012 against 2010 to become promising export lines of Viet Nam.

In the first two months of this year, export of the products picked up 67.3% against the same period last year, representing the fastest growth rate among export lines.

The products quickly became the second largest hard currency earner of Viet Nam by accounting for 3.2% of export turnover in 2010; 7.1% in 2011; 11.1% in 2012; and 14.1% the first two months of 2013.

Experts predicted that the commodities would exceed US$20 billion in export value this year or next year to top the export list.

In 2012, made-in-Viet Nam products were present in 29 countries and territories.

Vietnam Airlines to temporarily disrupt flights to Hue

The national flag carrier Vietnam Airlines announced on March 11 that all flights to the central province of Thua Thien-Hue will be temporarily disrupted for the next eight months.

All flights will be on hold from March 20 until November 20, to facilitate repair work at Phu Bai International Airport.

During this period, Vietnam Airlines will supplement with flights to the neighboring city of Da Nang. The number of flights will increase by seven a day on the Hanoi-Da Nang route and by nine on the HCMC-Da Nang route.

Passengers who already have confirmed tickets to Hue will be able to board an alternate flight to Da Nang City without further charge.

ASEAN Textiles Symposium to attract foreign craftmen

Around 300 guests and artisans representing 10 ASEAN member countries, Canada, Japan, India, and the US will attend the 4th ASEAN Traditional Textiles Symposium in Thai Nguyen province from March 15–18.

At a press briefing in Hanoi on March 12, Nguyen Van Tinh, Head of the Ministry of Culture, Sports, and Tourism’s International Cooperation Department, said it is the first time Vietnam will host such a large event.

It will help introduce the unparalleled weaving crafts of the country’s ethnic minority groups to international friends.

The symposium, themed “Traditions, Innovations, Interactions: Paving Creative Path for Traditional Textiles of Southeast Asia”, includes two scientific workshops.

The first will focus on traditional weaving villages’ transition to light industry, while the second will discuss the preservation of weaving and embroidery fabrics in museums.

The symposium will hold an exhibition showcasing the history of the textile industry, tracing its growth from the self-sufficient economy all the way through to modern industrial production. A fashion show will model the traditional dresses of Vietnamese ethnic minorities as well as the special fashions of participating countries.

Vietnamese artisans will demonstrate their skills by making the linen cloth of the Mong, the brocades of the Pa Then, Tay, Thai, Nung, Muong, Ede, M’nong,  and Cham, and silk of the Kinh and Khmer .

Other activities, such as folk games, Vietnamese bamboo and stone musical instrument performances, chau van (spiritual singing), quan ho (romantic duets), cheo (traditional opera), and Central Highland gong arrangements, will also be held to help international guests deepen their understandings of Vietnamese culture.

Columbus 2 cruise liner makes first visit to Vietnam

The four-star international cruise ship Columbus 2 of Germany with 900 tourists and crews on board, anchored at Saigon Port in Ho Chi Minh City on March 11 for the first time.

After landing, the tourists were taken to well-known local attractions such as Ngoc Hoang (Jade Emperor) pagoda and Cu Chi underground tunnels. Later, they want shopping at Ben Thanh market to see how to cook Vietnamese food and watched puppet show.

During their one-day trip they also enjoyed traveling by boat to coconut candy workshops and bee farms in the Mekong Delta.

The visit of Columbus 2 was arranged by Saigontourist Travel Service Company.

In 2012, the company served 170,000 tourists coming from aboard the luxury international cruise ships, up 40 percent from a year earlier.

Cocoa production under control of foreign companies

Cocoa is a potential lucrative farm produce of Vietnam with prices double that of coffee, but unfortunately benefits of cocoa are under control of foreign companies.

In 2012, global cocoa production dropped drastically as cocoa growing countries faced many upheavals. Particularly Malaysia, one of the largest cocoa growing countries in the world, had shifted to palm oil cultivation over 200,000 hectares of cocoa growing area. Production in Indonesia, one of the largest cocoa producers in Asia, Ivory Coast, and Ghana fell by 19-20 percent. A slump in production caused a scarcity, pushing cocoa prices up, as demand for cocoa remains huge.

Surveys showed that the EU, US, and Japan markets love to buy cocoa products and account for 76 percent of world consumption. Meanwhile, consumption of cocoa products in Russia, Brazil, and countries in the Middle East also signaled an increase.

Earlier, Vietnamese cocoa was not able to draw attention of importers due to low production. However, in recent years, as cocoa supply by large growers lessened, processors started to establish trade with Vietnam’s market, encouraging the country to grow more cocoa. This demand has helped farmers feel secure about future consumption.

Data by the Ministry of Agriculture and Rural Development showed that Vietnam’s cocoa industry posted a rapid growth rate. In 2003, cocoa growing area was merely 3,000 hectares but by the end of 2011, the area increased to 20,100 hectares with production of 5,500 tons annually. According to the industry, cocoa area will be expanded to 35,000 hectares with a production of 26,000 tons by 2015, and to 50,000 hectares with 52,000 ton production by 2020.

Along with this, the government plans to train firms and farmers about requirements in producing clean cocoa to obtain UTZ Certification, a worldwide standard for coffee, cocoa, tea, and palm oil.

In recent years, having realized the value of cocoa beans, firms have started to invest in growing and buying cocoa. Nevertheless, in the past two years, only 11 firms have received UTZ Certification.

Since the entry of foreign companies, Vietnam’s cocoa market has become more vibrant. According to analysis of firms in the industry, with preliminarily-treated cocoa, firms can earn 15 percent profit while by producing cocoa products such as powder, candy, and chocolate, profits rise 400 percent.

However, this high-level benefit mostly belongs to FDI companies whereas local companies merely play an intermediary role as purchasers. In the market, foreign firms have not only gained an upper hand but also been competing with each other for cocoa supply.

The US-based Cargill is the most prominent in Vietnam’s market. Entering the market in 2009 via Cargill Vietnam Company, the company spent a large sum of money to establish several purchasing hubs across the country. With this methodical move, the company purchased upto 80 percent of cocoa production in Vietnam.

While foreign companies were competing with each other fiercely, local ones merely operated in growing and providing fermented cocoa beans for purchasing hubs of Cargill, the UK-based ED&F Man, and Japan-based Mitsubishi Corporation.

Nguyen Phuc Linh, director of Thinh Phuc Company, shared that there are a few companies who meet standards to provide cocoa beans to producers in and out of the country. However, they are unable to directly export cocoa but have to export via these hubs.

For instance, cocoa produced by some Vietnamese companies was highly appreciated by Mars Incorporated, who created Mars bars, M&Ms, Milky Way, and Dove, but they still had to buy material from Cargill because Vietnamese firms have not been able to fulfill big orders. In addition, in order to earn higher margins, some companies recently started to produce cocoa powder, chocolate, cookies, and wine–but due to poor technology, they failed to build a reputation.

According to Tran Van Lieng, the cost of building a cocoa processing plant is not too much but most domestic cocoa beans are bought by foreign companies. So if local firms want to manufacture cocoa products, they will have to import nearly 80 percent of material from other countries at a higher price and suffer transport costs, hence, not many are interested in producing finished cocoa products.

Without coordination, Vietnam’s cocoa industry ruined its strong points and potential, leaving foreign companies dominating the market while local ones resigned themselves to be purchasing hubs, earning low profits and causing huge losses to the country’s cocoa industry.

Vietnam among leading furniture exporters in ASEAN group

According to the ASEAN Furniture Industries Council, Vietnam exported around US$4.67 billion worth of furniture last year, to become a leading furniture exporter in the ASEAN group.

In 2012, the Southeast Asian nation became the sixth biggest furniture exporter in the world and the second in Asia, earning a turnover of around US$4.67 billion, a year-on-year increase of 19 per cent.

Moreover, its export market has shown an impressive growth, such as with the US at 24.4 per cent, China with 14.3 per cent, and Japan with 12.5 per cent.

Key import markets including the US, EU and Japan are consuming more Vietnamese furniture, accounting for 80 per cent exports in this sector.

According to forecasts, in 2013 export growth in key markets will remain stable despite economic woes and it is also possible that exports to the US will soar by 18 per cent, to Japan by 11 per cent and to China by 15 per cent. Nonetheless, the sector has to strive hard to achieve such growth.

The EU has applied new policies such as the Lacey Act, asking enterprises to give proof of legal origin of wood and wood products. Under the regulation, Vietnam will face difficulties and there will be no growth in the EU export market.

In 2012 many furniture producers improved their techniques thanks to transfer of technology and hence received many orders from large markets like Italy, the US and Germany.

Vietnamese enterprises are dependent on orders, design and distribution from foreign partners and customers. In addition, Vietnam is reliant on wood import from neighbor countries, resulting in higher prices and low competition.

To develop this sector sustainably, the country should plan to grow forests for raw material, while enterprises must spend more on imparting skills, acquire better designers and train more skilled workers in a bid to beat competition.

The Handicraft and Wood Industry Association of Ho Chi Minh City (HAWA) announced that Vietnam International Furniture & Home Accessories Fair 2013 (VIFA 2013) will take place from March 11-14 at Saigon Exhibition and Convention Center on 799 Nguyen Van Linh Street in District 7.

More that 126 enterprises with 603 booths will be participating at the event, with 15 per cent foreign companies being from countries such as Singapore, Malaysia, Japan, Korea, China, France, Denmark and Canada.

Vietnam’s consumer goods market attracting foreign investors

Since 2011, the consumer goods industry had become one of the most in-demand industries for mergers and acquisitions in Vietnam.

A report by Nielsen shows that the consumer goods market in Vietnam grew 23 percent in 2012, followed by India with 18.8 percent, and China with 13 percent. This is why many foreign investors are being attracted to the Vietnamese consumer goods industry.

A survey by Bain & Company and SVCA showed that 80 percent of investment funds invested in countries in Southeast Asia considered consumer goods as an attractive industry for investment with Vietnam being the most interesting market in the region.

Masan Consumer has currently caught the most attention in the consumer products industry in Vietnam thanks to huge M&A business deals. Of late, after receiving US$200 million more from KKR, Masan Consumer announced a 24.9 percent stake in Vinh Hao Mineral Water Corporation. Accordingly, the company wants to acquire 100 percent stake in the mineral water business at a cost of VND700 billion. Earlier, Masan had bought 53.2 percent stake in Vinacafe Bien Hoa and 40 percent stake in Proconco, a cattle feed producer.

Experts say that Masan Consumer is adopting a wise strategy by buying stakes in leading companies in the industry. Particularly because Vinacafe Bien Hoa holds 40 percent market share in the instant coffee market in Vietnam; Proconco is the second largest company to produce cattle-feed; and Vinh Hao mineral water has been a well-known brand in the country’s market.

Sweetmeats producer Kinh Do has also caught foreign investor attention. Last year, company revenues hit VND528 billion, an increase of 52 percent compared to the previous year. At present, foreign investors are holding about 49 percent stake in the company with major shareholders being Ezaki Glico, VinaCapital’s Vietnam Opportunity Fund, Deutsche Bank, and DWS Vietnam Fund.

In context that many local firms in need of capital for operations, it is necessary to draw attention of investors. However, what should firms do if they do not belong to the group of ten leading companies in the industry or do not own a certain advantage? Ma Thanh Loan, co-chairwoman of Thunderbird Private Equity Center in Asia and CEO of Auxesia Holdings, a private equity advisory group, advised that besides building a strategy to access foreign investment capital, firms should ask for support from professional advisory companies.

Besides M&A business deals with foreign companies and funds, in order to enter and increase market share in Vietnam’s consumer goods market, local firms also have expansion plans to catch up with the race.

Beverages are currently in the consumer goods industry with high growth. According to the Vietnam Beer-Alcohol-Beverage Association, a Vietnamese merely drinks three liters of non-alcohol bottled drink in a year while an average Filipino consumes 50 liters a year. This has raised investor confidence, urging them to increase investments.

The first company on the list was Tan Hiep Phat Beverage Group. In mid-2012, the company built Number One Chu Lai Factory in central Vietnam at an investment of VND1.82 trillion which was expected to start operations in December this year. This year, the company will also build a second factory in the northern province of Ha Nam. Tran Uyen Phuong, deputy CEO of the company, said that besides its traditional products, its two new plants will also produce new products.

In August last year, Quang Ngai Sugar JSC started construction on the 60,000 square meter Vietnam Vinasoy-Bac Ninh soy milk plant in Tien Son Industrial Park in Bac Ninh Province. The factory will operate in April this year. Presently, Vinasoy is holding about 80 percent of market share of soya milk sector in Vietnam and building more plants shows its determination to strengthen its foothold in the market.

The appeal of the beverage sector had also drawn a seasonings producer like Vedan to now add bottled green tea under Thien Tra brand onto its products list.

Also, in order to be known, firms have been running high-cost advertisement campaigns.

Similarly, firms in other consumer goods sectors have stepped up so as not to be left behind in the survival game. A country with a population of 90 million of which 68 percent of the population is below the age of 40 and higher income is now becoming more attractive to investors.

However, Vietnamese consumers still expect that local companies will survive because in the past many Vietnamese companies sold to foreign buyers leaving former owners to regret their move.

Dak Lak discusses local coffee industry’s prospects

The Central Highland province of Dak Lak hosted a March 10 conference as part of its ongoing four-day coffee festival to discuss the local coffee industry’s prospects.

The event, co-organised by the Ministry of Agriculture and Rural Development (MARD) and the Dak Lak provincial People’s Committee, aims to encourage Vietnamese coffee products to join the ranks of value-added goods.

The conference’s domestic and international delegates exchanged views on local and global coffee markets, discussed ways to renovate coffee industry, and shed light on the policies required to ensure sustainable development of the coffee sector.

Vietnam has grown into the world’s second largest coffee exporter over the past two decades. From a coffee planting area of 21,200 ha in 1961, Vietnam has expanded the area to its current 614,500 ha, with an average output of 2.32 tonnes/ha.

Recent years have seen an average annual 1.7 million tonnes of coffee with export earnings of U$3.74 billion. This revenue has helped make the coffee industry an important contributor to the wider agricultural sector’s export turnover.

Many delegates voiced concerns regarding the quality of Vietnamese coffee products, suggesting the local coffee industry should proactively adapt to the repercussions of climate change and improve collaboration with other sectors to secure steady long-term growth.

Latest business report includes some surprises

Despite the fact that SME Securities Corporation (SME) is on the brink of bankruptcy, it was still ranked 30 among the 500 fastest-growing companies (FAST500), released by Vietnam Report JSC on March 11.

SME has been facing losses and in financial crisis for years. In August, 2012, two SME leaders were detained for defrauding PetroVietnam Insurance JSC (PVI). Since then the firm has had both its securities depository and brokerage licenses revoked.

In addition, the company was delisted from the Hanoi Stock Exchange in October 2012 after violating transparency regulations. The company’s stocks were put under “special control” from December 4, 2012 to April 4, 2013 because of continual failure to pay debts.

Currently the stock prices of SME remain relatively low. According to the latest report, the company’s combined losses for last nine months of 2011 were VND35 billion (USD1.7 million), and they have yet to release their financial reports for the years of 2011 and 2012.

This is the third year consecutive FAST500 report that has been released in Vietnam. This year it showed an average growth rate for the top 500 businesses of 62.2%. In the period between 2007 and 2010 the rate was 59%.

Though Hanoi and HCM City continue to top the list of economic hubs, many of the fastest-growing firms in top 10 were located in other provinces and cities, such as Nghe An, Hai Duong, Khanh Hoa.

Real estate companies dominate the FAST500

Real estate companies continue to dominate the list, with agriculture and forestry companies following. The mechanical engineering had the strongest overall growth rate of 86% from 2008 to 2011. The telecom came in second at 72.2%.

For the first time since early 2011, more business people were optimistic than pessimistic about the economy. Over 62% of those asked said that they expected their profits to increase this year and planned on hiring.

However, the report went on to warn that, “Hasty decisions to rescue certain sectors may pose a risk to the rest of the economy, and in the long run could lead to market instability and inflation in addition to eroding confidence in the government.”

Official defends central highlands bauxite mines

Despite pubic concerns, Tan Rai and Nhan Co. bauxite projects in the central highlands region are necessary for the development of Vietnam’s aluminium industry, one official said.

The projects had been carefully considered before assigning them to the state-owned company Vietnam National Coal and Mineral Industries Group (Vinashin), said Vu Huy Hoang, Minister of Industry and Trade.

According to Hoang, Vietnam is estimated to have bauxite reserves of between 10 and 11 billion tonnes, mainly located in the central highlands region. Annual demand for aluminium has increased considerably in recent years, and is expected to be 750,000 to one million tonnes by 2020 and between 1.6 and 2 million tonnes by 2030.

“Currently, Vietnam has to import all aluminium for local production, so these two bauxite projects are of great importance,” Hoang emphasised.

He attributed the stagnation of the mines to technological issues in building red mud dams, an area in which the expertise of the workforce in Vietnam lacks experience.

He added that it would take between 30 and 40 years to assess the economic benefits to the country, considering the drop in prices for aluminum on the world market, which are now at USD326.5 per tonne.

He said that the government has assigned the Ministry of Natural Resources and Environment to coordinate with the Ministry of Industry and Trade to carefully supervise the design of red mud dams and assess their possible environmental impacts.

The Vietnam Academy of Science and Technology is doing a pilot study on the processing of red mud for sponge iron production.

“With the help of several state agencies and scientists, we can feel safe about the environmental impacts of these projects,” he said.

Online office furniture sales boom

The recession has meant giant liquidation sales on office furniture at knock down prices.

Mrs. Loan in Hanoi said she had bought a second-hand letter L-shaped table and chair online for just VND500,000 (USD23.8). Bought new the set would have cost at least VND1.4 million (USD66.6).

Avid second-hand online “hunter” Mrs. Hoa in Cau Giay District had recently bought a new desk and chair. “The company decided to sell the stock as they were downsizing their office. Despite costing VND800,000 (USD38), it was two thirds the original price.”

Online office furniture liquidation sales have flourished since October 2012.

Mrs. Ly who has offered some office furniture for sale, said that while still popular, good value and customer service was key to success in the business, including door-to-door delivery.

Mr. Thang, a trader of second-hand office furniture online, said that in previous years businesses had wanted to upgrade their offices at the end of the year; but since the middle of 2012, many companies posted their sale news online, explaining that they were moving to smaller offices. Every day, his company bought items from websites.

According to Mr. Thang, his store in Linh Nam Province was entirely full. Most of customers were newly-established offices which wanted to save on set-up costs or families looking for a bargain.

Minister and Chairman of the Government Office Vu Duc Dam said that 8,600 companies had halted operations in the first two months of this year, while some 8,000 had been established.

Cambodia, Vietnam target USD5 billion trade

Vietnamese businesses are enjoying more investment opportunities in Cambodia thanks to preferential trade conditions offered by both countries.

Vietnam is expected to increase its Cambodian market investments to US$3.2 billion. The value of two-day trade is predicted to hit US$5 billion in 2015.

Cambodian Planning Minister Chhay Than says Cambodia is improving conditions for foreign investors, including those from Vietnam.

A Vietnam-Laos-Cambodia ministerial meeting has been scheduled for the end of March 2013 to draw up plans aimed at developing the triangle area into a famous industrial and rubber production zone, he says.

According to Vietnam Customs’ 2007 statistics, Vietnam-Cambodia trade turnover stood at US$1.19 billion with Vietnamese exports valued at US$991 million. One year later, Vietnam increased its Cambodian export revenue by 31 percent to US$1.431 billion, representing a trade surplus of US$1.221 billion.

In 2009, despite the repercussions of the global economic downturn, the two countries’ trade value stabilised at US$1.333 billion, with Vietnam’s trade surplus dropping slightly to US$961 million. In 2010, trade turnover resumed its upward trend, reaching US$1.83 billion with Vietnamese exports contributing US$1.552 billion. 2011’s figure hit US$2.829 billion—up 54.75 percent—and Vietnam’s export revenue climbed to US$2.4 billion.

Last year’s two-way trade value was estimated at US$3.3 billion. Vietnamese exports contributed US$2.9 billion.

Vietnam is currently Cambodia’s second largest trade partner. The country’s key Cambodian exports include plastic home appliances, instant noodle, and spare electric parts. It imports mainly rubber, wood, tobacco, and raw materials for the garments and textiles sector.

The Vietnam Ministry of Planning and Investment (MPI) statistics show that by the end of 2012, Vietnam had 104 projects in Cambodia representing a total registered capital of US$2.42 billion— four times higher than the previous three years’ level.

Vietnamese businesses disbursed nearly US$300 million in Cambodia in various socio-economically important fields like telecommunications, agriculture, and financial services.

Minister Chhay Than is optimistic about bilateral trade’s prospects. He says, however, that recent two-way trade turnover has yet to realise the relationship’s full potential.

He suggests both countries should reinvigorate trade relations to fulfill the set two-way trade turnover target of US$5 billion in 2015.

Le Minh Dien, the MPI’s External Economic Department Deputy Head, says Vietnamese businesses should exploit their advantages and the incentivised investment policies in Cambodia’s telecommunications and industrial tree planting.

Exploring opportunities in emerging industries like construction and real estate would also be wise, he adds.

Foreign capital ploughed into securities market

Around US$2.34 billion of foreign capital was poured into the local securities market last year, including about US$340 directly channeled into stock trading on the two bourses, according to an official of the State Securities Commission (SSC).

The remaining US$2 billion, meanwhile, was pumped into the domestic market via merger and acquisition (M&A) deals between local firms and their foreign strategic partners.

Specifically, Vietcombank last year struck a deal with the highest value of US$567 million when transferring 15% equity to Japan’s Mizuho Bank at VND34,000 a share. Besides, there were many other high-value deals such as Ezaki Glico acquiring 10% equity from Kinh Do Corporation and Sumitomo Life buying 18% equity of Bao Viet Corporation from HSBC with US$340 million.

The SSC official said the foresaid statistics were recorded as money of the deals was already present in the domestic bank accounts, adding other deals that have been agreed but the payment is yet to be made will not be recorded accordingly.

For instance, he said, the Bank of Tokyo-Mitsubishi UFJ Ltd acquired 20% equity of Vietinbank with a total value of US$743 million but the deal is yet to be complete, so it is not counted in the 2012 figures.

It has been suggested that Sacombank will sell 15% equity to a foreign partner this year. Although it is not yet certain that Sumitomo Mitsui Banking Corporation will be the buyer, the board of directors of Sacombank informed the would-be partner will come from Japan.

With the big deals at Vietinbank and Sacombank, indirect investment capital into Vietnam in 2013 might be a positive figure.

Foreign capital volumes flown directly into the local securities market via the two bourses were US$1 billion in 2010, US$240 million in 2011 and US$340 million in 2012.

Housing market still moving

Negative information on the property market had worried Trang, who was seeking to sell her apartment in the Nam Long residential area in HCMC’s District 7. She was concerned that she couldn’t sell the home at a good price given oversupply and falling housing prices at present.

However, just two weeks after the sale announcement fixed with the starting price of VND1.7 billion, Trang sold the home measuring 75 square meters at VND1.62 billion and now she is in the process of finalizing the deal.

In fact, while numerous realty developers are facing high risks of bankruptcy given financial constraints, the property market has still been moving on, with certain segments having recorded many successful transactions.

Nguyen Duy Minh, general director of Hung Thinh Land, reported that his firm has still done good business with the apartment segment over the past time. Minh’s company has been really busy with trading, with a good sale growth recorded in 2012.

Hung Thinh Land marketed six condo projects in HCMC last year, with over 400 flats sold, with an average of some 33 units changing hands a month.

The present market is not so bustling as the previous heyday but it is still moving forward thanks to a large number of customers in dire need of housing, Minh noted.

Therefore, Minh said, project owners have to change their views, meaning they have shifted to analyzing consumer demand to adjust products and selling prices accordingly. Homebuyers have become stricter which is shown by the fact that they scrutinize designs, materials and selling prices prudently before making the decision, he added.

Homebuyers used to consider locations as an important element in the past but now they are interested not only in the location but also the selling prices of apartments and prestige of developers.

Similarly, Nam Long Investment JSC also recorded a positive reaction from homebuyers when launching the Ehome 3 Tay Saigon project in HCMC’s Binh Tan District. The company has almost sold out 300 condos after the sale launch in August, 2012.

The on-going movement of the realty market is ascribable to affordable prices and flexible payment methods given by projects owners.

Binh Chanh Construction Investment JSC, for instance, will this month launch onto the market 150 flats of the Nhat Lan 3 project at the starting price of VND562 million a unit. Home buyers will have to pay half the price in the first installment before being handed over the flats in September, while the balance will be paid within two years without interest rate charged on the balance.

Meanwhile, for the higher-quality segment, Phu Long Real Estate JSC is also offering 352 flats at the Dragon Hills Residence and Suites project. Homebuyers will also pay half the value in advance to be handed over the home, while the rest will be paid in two years with financial support from banks.

Minh of Hung Thinh Land noted that there are always opportunities even in times of difficulties if the project owner and marketing agencies can sit back to offer a good price and support policy for customers.

Legal stamp on furniture export contracts

All contracts signed between participants at the Vietnam International Furniture and Home Accessories Fair 2013 (Vifa 2013) opening in the city today will have terms stating the origin of timber is legal.

This is a commitment of the local wood processing industry to international buyers after Regulation 995/2010 of the EU came into force on March 3, said Huynh Van Hanh, vice chairman of the Handicraft and Wood Industry Association of HCMC (Hawa).

Regulation 995/2010 on the Forest Law Enforcement, Governance and Trade (FLEGT) Action Plan prohibits the import of timber and wooden products of illegal origins into the EU. First-time wood suppliers for this market are asked to ensure their accountability.

The U.S., the EU and New Zealand are currently the three largest timber suppliers for Vietnam. Local wood processors have to gradually stop doing business with suppliers from the markets with high risks in order to ensure timber traceability and legality, said Hanh.

In February, timber and wooden product exports brought in some US$342 million, taking the turnover of the first two months to US$831 million, up 36.2% year-on-year.

Timber and wooden product exports to the major markets rose sharply over the same period last year. For example, exports to the U.S. grew 79.89%, Japan 56.03%, China 92.4% and South Korea 30.67%, according to the Ministry of Agriculture and Rural Development.

Vifa 2013 will open today at the Saigon Exhibition & Convention Center in HCMC’s District 7. As of last Friday, some 1,240 participation applications had been submitted, up 6.6% compared to last year’s event.

As part of the event, a seminar on the U.S. goods safety standards and the EU’s requirements is held by the U.S. Consumer Product Safety Commission, TUV SUD PSB Vietnam Co. Ltd. and Hawa, with an aim of helping enterprises better understand the requirements of furniture importers.

EU gives import tariff incentives to footwear

Exports of Vietnamese footwear, hats and umbrellas to the European Union (EU) market will enjoy tax incentives under the generalized system of preferences (GSP) that will come into force in early January 2014.

Currently, there is a high possibility that some of the main export items of Vietnam cannot be eligible for GSP. The EU has adopted a mechanism in which GSP incentives will not go to a number of products that are imported from the nations with a high level of export growth.

The incentives will only be offered to the items imported from a country holding a share of at most 17.5% in the total volume of GSP-eligible products imported by the EU.

It is good news that the EU will continue to provide Vietnamese footwear products with GSP incentives as it is the most important market for the local leather-shoe industry, said a footwear exporter.

Exports to the EU have been shrinking due to the sovereign debt crisis faced by some EU nations. Tax incentives will be a great help for Vietnamese footwear products in the competition with the same items from other countries.

The volume of hats and umbrellas exported to the EU market grew significantly last year.

The EU surpassed the U.S. to become the largest consumer of Vietnamese goods in 2012, with revenues amounting to US$20.3 billion, up 22.5% against 2011 and accounting for 17.7% of the total exports of Vietnam. The major items for export to the EU had high proportions in the country’s total export turnover, such as cell phones making up 43%, footwear 36%, computers 19% and apparels 16%.

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

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