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Improved logistBUSINESS IN BRIEF 17-2ics and infrastructure is an urgent need for the growing fisheries sector in Binh Dinh, says Nguyen Huu Hao, deputy director of the province’s Department of Agriculture and Rural Development.

Last year, the central province exported over 8,100 tonnes of ocean tuna, nearly 73 per cent higher than the previous year, bringing in revenues of about US$51.3 million.

In the first month of this year, local fishermen caught over 618 tonnes of ocean tuna, an increase of 54.5 per cent compared to the same period of last year.

Hao said offshore fishing and tuna export had become major contributors to the province’s economic growth, with the catch increasing year after year.

Having seen decent profits accrued from offshore tuna fishing, locals have become more and more confident bout investing and upgrading their vessels for longer fishing trips that also go further out to the sea.

As many as 242 fishing groups have been formed in the locality with the participation of over 800 local vessels with engine capacities ranging from 250HP to 900HP.

”When the fishing vessels work in groups, each vessel can be given timely support including information about fishing grounds and weather conditions, supply of fresh water, food and fuel during long trips,” Hao said.

Nguyen Van Ai, a fisherman from the province’s Phu My District, said that his fishing group had one 99HP, an 800HP and two 450HP vessels. Together, they generated revenues of VND20 billion last year from catching ocean tuna.

Each member in his crew enjoyed an annual income of VND150-160 million, making them high income-earners in the locality, he said.

However, Ai was worried about falling tuna prices. Enterprises were paying VND 60,000 – 70,000 for a kilo of tuna now, just half of the price they offered last year, he said.

Many fishermen had to borrow money from processing enterprises to prepare for their fishing trips, so they were reluctantly selling tuna to the lenders at prices offered by the latter, Ai said.

Pham Van Truong, Vice Chairman of the Hoai Nhon District People’s Committee, said local authorities need to help fishermen assess the quality of tuna and find suitable prices. Until now, fish quality and prices had been decided predominantly by the enterprises with farmers having little say, he noted.

However, Cao Thi Kim Lan, director of the Binh Dinh Fishery Joint Stocks Company, said local tuna prices were low because they were mostly being caught manually in shallow waters, despite assertions by officials that offshore fishing has increased of late.

In coastal Quy Nhon City, the Quy Nhon fishing port opened last April as a place for tuna auctions where sellers and buyers both could get reasonable prices. No auction has been organised so far.

The fisheries sector in the province has several other problems.

Several ports, including the Tam Quan Port in Hoai Nhon District and the De Gi Port in Phu My District are suffering from sedimentation.

Furthermore, sedimentation at the estuary is preventing vessels, especially ones with high capacity, from reaching the ports.

According to Hao the province is spending billions of Vietnamese dong each year to dredge the estuary around the ports. The sedimentation also poses difficulties for vessels to find shelter during the storm season.

Phan Trong Ho, director of the provincial agriculture and rural development department, said investors from Japan and the UK visited the province to look at opportunities in the fisheries sector.

To make the sector more attractive to foreign investors and expand fisheries, the province would have to improve its port infrastructure, price management and logistics sector, he emphasised.

City sets target of achieving high export turnover

HCM City aims to post export turnover of US$34 billion this year, a year-on-year increase of 13.5 per cent, according to the city’s department of industry and trade.

The ambitious target demonstrates the city administrators’ eagerness to shift the nature of exports during the 2011-15 period.

With the goal of achieving an annual growth rate of 13 per cent, the city hopes to increase the export of industrial products by 13.1 per cent each year, agro-forestry and fisheries products by 11.9 per cent and other commodities by 14 per cent.

The city will focus on exporting highly-valued industrial products as well as software and digital content. As planned, industrial products will account for 54.4 per cent of the city’s total export turnover, and high-tech and software products will also constitute a significant percentage of exports.

In contrast, unprocessed products with a low value will see fewer exports, except for crude oil. Agro-forestry and seafood products will account for only 23.1 per cent of exports. Export growth of garment and footwear will be maintained.

The city will also make every effort to keep total import costs low, around $29 billion.

The HCM City Department of Industry and Trade warned local businesses to diversify their products, both in terms of design and distribution channels, and seek more importers.

According to the department, the growth rate of the city’s export turnover was 12.5 per cent last year and export turnover reached $29.9 billion – an increase of 63 per cent against 2011.

Experts contribute opinions to draft law on State capital management

The Ministry of Finance’s draft law guiding the use of State capital in enterprises will be opened to public opinion before it is submitted to the Government in July.

Deputy Minister of Finance Tran Van Hieu said the law, if approved, would help State agencies avoid losing control over enterprises they owned. It would also prevent State owners from interfering too much into their enterprises’ operations, limiting the companies’ flexibility and creativity when doing business.

Experts agreed that the law was necessary but raised concern that the scope of regulations was too narrow.

The draft bill only covers limited liability companies completely owned by the State. But it was the loose management of State-owned groups like Vinashin and Vinalines that caused the loss of trillions of dong, seriously damaging the economy. The losses caused by inefficient use of State capital would be difficult to curb if only wholly State-owned companies were covered, warned Le Dang Doanh, former director of the Central Institute for Economic Management (CIEM).

Currently, State capital granted to companies was often re-invested in their subsidiaries, so subsidiaries must be subject to the law just as their parent companies were. State capital belonged to the people, so it must be strictly controlled, Doanh stressed.

Dang Van Thanh, chairman of the Viet Nam Accounting and Auditing Association, said that internal auditing regulations would help control business risks and avoid financial mismanagement. In addition, the actions of chairmen of management boards and general directors responsible for business and production must be clearly regulated.

Vu Nhu Thang, director of the Ministry of Finance’s Financial Strategy and Policy Institute, said that if State capital invested in enterprises was re-invested in businesses beyond their core operations, it must be strictly managed.

Doanh agreed, saying that enterprises must regularly report operation results, as modern corporate governance required high transparency and accountability. He added that the law should also regulate how staff are recruited to ensure that qualified people are hired to deal with State funds.

PM okays restructuring plan for Vinatex, Vinacomin

Prime Minister Nguyen Tan Dung has approved the restructuring plan for the Vietnam National Textile and Garment Group (VINATEX) during the 2013-2015 period to increase the group’s efficiency and competitiveness.

Under the scheme, the group will further concentrate on its core businesses, including the manufacturing, sale, import and export of garment and textile products, as well as production and trading of raw materials, spare parts, chemicals, dyes, and equipment for the textiles sector.

After the completion of the restructuring plan, the mother corporation will maintain a 100pct stake in four of its subsidiaries, while reducing its stake to 50-65pct in six companies and less than 50pct in 20 others.

VINATEX is required to complete the divestment in 37 non-core subsidiaries within the next three years.

The PM also approved a plan to restructure the Vietnam National Coal and Mineral Industries Group (Vinacomin) in the 2012-2015 period to improve the corporation performance and sustainable development to be environmentally friendly and ensure national energy security.

Vinacomin will focus on four main business lines, including the coal industry, mineral- metallurgy industry, industrial explosives, and electrical industry.

Under the plan, Vinacomin will be a parent company with 16 dependent entities. The mother corporation will hold 100pct of its stake in five subsidiaries, maintain 65-75pct of the registered capital in nine companies, reduce its stake to 50-65pct in another 11 companies, while owing less than 50pct of registered capital in 11 others.

The group will divest itself of nine companies and dissolve two subsidiaries, namely Dong Vong Coal company and Vietnam-Japan Gemstones company, as well as allows for the bankruptcy of Song Ninh-Vinacomin Shipbuilding Co., Ltd.

More consumer goods M&A deals expected in 2013

The fast growing consumer goods market in Vietnam is expected to see more mergers and acquisitions deals in 2013 as it remains attractive to international investors, economics experts say.

Consumers are seen buying confectionery products at a supermarket in Ho Chi Minh City, February 13,

The Vietnamese consumer goods sector posted the highest growth rate in Asia, according to a report released in January by Nielsen. It grew by 23 percent, while the figures of India and China are 18.8 percent and 13 percent, respectively.

The door is open wide for international investors to enter the Vietnamese consumer goods market as local businesses are facing capital difficulties and lack professional administrative management, commented a representative of the DI Asian Industrial Fund (DIAIF).

Consumer goods market saw the most M&A deals by international investors last year, with some worth as much as millions of US dollars.

One of the most remarkable deals is that of the US-based Kohlberg Kravis Roberts (KKR), which added an investment of US$200 million in Masan Consumer Corporation (Masan Consumer) in January.

KKR was completely appealed by the consumer goods market in Vietnam, when it was seeking for a new investment destination in the region, its regional head Ming Lu said in a statement.

Vietnam emerged as a hot spot for investment with its 90 million young population, and fast urbanization and rising income, he added.

Meanwhile, Toshiaki Muramoto, deputy CEO of Technopia Vietnam, the manufacturer of Jumpo mosquito coils, said Japanese investors see Vietnamese consumer goods market as a blossoming flower, full of attractiveness and exploration.

“That’s why Fumakilla has recently spent $8 million to acquire the Jumpo manufacturing plants in Vietnam from the Malaysian partner,” he said.

While many other sectors have been struggling to maintain operation over the economic slowdown, those in the consumer goods sector still posted high growth and whopping profits in 2012.

Vietnam’s largest dairy producer Vinamilk enjoyed a VND27.3 trillion ($1.31 billion) profit in 2012, a 23 percent year on year increase, according to its financial report.
2012 is also a successful year for NutiFood, another local milk producer, with its sales growing by 30 percent.

Beverage and confectionary manufacturers too reported positive business results in 2012.

Tan Hiep Phat said its plant in Binh Duong had to operate at full capacity last year to produce 1 billion liters of beverage of all kinds to meet demand. The company is investing in two more plants in the central and northern regions to expand market, its external relation director Nguyen Tan Phong said.

Kinh Do Bakery also announced a VND528 billion profit in 2012, an enormous 52 percent growth compared to 2011.

Japan exports environment technology to Vietnam

Japan’s Ministry of Internal Affairs and Communications has announced Vietnam will be the first destination for the planned export of its cutting edge environmental information technology and social infrastructure.

The first step of this new policy, which will take the form of a public-private partnership, is a Japanese pilot project investigating and assessing Vietnamese water and air quality, beginning in March.

Prime Minister Shinzo Abe’s government attaches great importance to “exporting most modern Japanese social infrastructure” and “supporting Japanese enterprises’ information technology system exports”, regarding it as the backbone of the country’s future economic growth strategy.

NTT DATA Group will conduct the Vietnamese pilot project, endowed with a ​​government budget worth JPY150 million.

The group has already made great contributions to the development of social infrastructure and information technology in Japan’s modern urban areas.

The pilot project requires installing data collection equipment across Vietnam, as well as establishing centres with the capacity to analyze environmental data including water and air quality.

With integrated data analysis technology, NTT DATA Group will simultaneously monitor Mekong River water levels and water quality and air quality in Ho Chi Minh City, investigating any links discovered and informing future treatment plans.

In the northern industrial zone on the outskirts of Hanoi, NTT DATA Group will also measure temperature, humidity, and power consumption for determining the best approach to improving energy efficiency.

Shops and cafes exploit Tet to cash in

Many coffee shops and restaurants have raised their prices following the new lunar year.

Price gouging 20% increases for basic goods

Coffee shops in Tran Hung Dao Street, Hanoi have exploited the festive period to raise prices by 20% since the 29th of the lunar December, 2012, to the 6th of the lunar January, 2013 (February 09-16).

Coffee shop staff claimed it was very difficult to hire employees during the Tet holiday, therefore, the manager had to offer higher wages for people working during the period.

Nam who works at a coffee shop on Tam Trinh Street said his shop had opened during Tet and he’d decided to raise prices by 30% while claiming it hadn’t affected the number of customers.

“Just few shops open during Tet. Our coffee shop has been full of customers since the first day of the lunar new year. Most of them are younger people,” he added.

Food prices in cheaper street places are two to three times higher than normal.

A bowl of crab soup noodle is being sold at an extortionate VND45,000 (USD2.14) compared to just VND20,000 before Tet, but the restaurants have remained crowded.

“If anyone who complains about high prices, they can find a cheaper place. Most of people have stopped work to enjoy Tet, except for us. So we’re using this chance to earn money,” a noodle seller said.

In Hanoi, many noodle restaurants have announced to raised bowls of noodles to VND15,000.

Restaurants remained crowded despite extortionate prices

Restaurant owners also explained that the higher prices were attributed to the price increases in chicken, meat and beef.

Lien, owner of a restaurant in Nguyen Luong Bang Street, said a kilo of beef was currently sold at between VND250,000 and VND270,000, compared to VND200,000 and VND220,000 before Tet.

According to Lien, the price gouging would eventually return to normal.

VNS, dtinews, VIR, SGGP

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