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BUSINESS IN BRIEF 19-1Binh Duong attracts Japanese enterprises

Japan leads the foreign capital flow in the southern province of Binh Duong, with 176 valid projects capitalised at US$3.1 billion.

Japanese investors contributed 18 percent of the total foreign direct investment (FDI) into Binh Duong province, mostly assigned to hi-tech and high value-adding industries, such as car manufacturing, food and beverage processing.

Noteworthy is Becamex IDC Co which has invested US$1.2 billion in one project alone, the Binh Duong Tokyu urban area. The project is built on 71 hectare, comprising 7,500 apartments, villas, amusement parks, trade centres and offices for lease.

Aeon, the biggest retailer in Asia, has injected a further US$95 million into a project to build a big shopping centre that covers more than 6 hectares.

Meanwhile, Dai Nippon Printing has developed a US$35-million factory that produces laminate film and printing and packaging materials.

The Saigon Stec Co has spent US$175 million expanding its factory to produce electronic circuit boards for cameras.

Another Japanese enterprise, Wonderful Sai Gon Electrics, channeled US$150 million into its hi-tech factory to produce camera modules used in mobile phones.

Fragrant rice exports to hit 700,000 tonnes

Vietnam hopes to export 700,000 tonnes of fragrant rice this year and one million tonnes in the near future, according to the Vietnam Food Association (VFA).

Exports of fragrant rice increased strongly last year, reaching 584,000 tonnes, the VFA has reported. Last year, Hong Kong, China and Western Africa were major consumers of Vietnamese fragrant rice.

With its competitive prices and good quality, the country’s fragrant rice sold more than its Thai rivals in these markets, all of which are top markets for fragrant rice. Vietnamese fragrant rice accounted for 40 percent of market share in the Hong Kong market, as well as in the Western Africa market.

Exports of fragrant rice yield higher profits than standard rice exports. However, exports have remained below the country’s potential because many farmers are reluctant to plant fragrant rice.

Although Vietnam produces rice in three seasons each year, only rice harvested from the winter spring crop and autumn winter crop have good quality.

The summer-autumn rice crop usually yields rice with a lower quality and weaker aroma.

To ensure that the country has a sufficient volume of fragrant rice to meet the target, the VFA has asked the agricultural industry to encourage farmers in the Cuu Long (Mekong) River Delta to expand cultivation of fragrant rice during the winter-spring crop season.

In addition, the agricultural industry should develop a specific zoning plan for fragrant-rice production and provide farmers with production techniques, according to VFA President, Truong Thanh Phong.

The industry should also work to ensure a sufficient supply of good quality seedlings for farmers, he said.

Vietnam’s rice exports in the first 10 days of this year reached 49,296 tonnes, worth more than FOB US$23 million, VFA reported. The association expects to export 1.4 million tonnes of rice in the first quarter.

Fund to help track development goals

The Ministry of Planning and Investment will receive US$2.2 million in non-refundable aid to improve Vietnam’s capacity to monitor and report on its progress towards achieving UN-established Millennium Development Goals.

The project, launched last September and set to run through the end of 2016, has an additional target of raising the nation’s prestige international through a more active role in South-South Cooperation-an exchange of experience and expertise among Governments, organizations, and individuals in developing countries.

Deputy Minister of Planning and Investment Nguyen The Phuong said the initiative is expected to help increase the country’s capacity to prepare socio-economic development plans which incorporate development goals, as well as to review existing plans.

Better social development monitoring and reporting will help provide more updated and comprehensive information about the implementation of plans, and pinpoint successful measures, Phuong said.

This will not only enhance capacity to meet development goals but to advance other social goals as well.

Vietnam reached its target of cutting poverty rate in half back in 2002 and instituted universalising primary education in 2000, Phuong said. It has also seen advancement in gender equality and children’s healthcare, consistent with the Millennium Development Goals (MDGs).

UN Development Programme (UNDP) Deputy Country Director Bakhodir Burkhanov said progress on these goals is being reviewed and reported regularly as part of an institutional monitoring process.

This will provide much-needed evidence of how social development policies in Vietnam are working, Burkhanov said.

Ongoing monitoring and reporting needs to be transparent and inclusive, involving public institutions as well as civil society groups and professional and mass organizations, he said.

Stakeholder contributions, both in terms of providing data for the MDG reports and actively participating in policy consultations, will be key to ensuring the quality of reporting and its impact on policy-making, he added.

In today’s golbalised world, he stressed, international integration and south-south co-operation will continue to gain further prominence. This project will facilitate Vietnam’s exchange of experiences with other developing countries and its ability to study proven MDG-acceleration strategies and development solutions, he said.

Another project funded by the United Nations Development Programme was officially launched on January 16 in the Mekong Delta city of Can Tho.

The administrative reform project, which will be implemented until 2016, has a total investment capital of more than US$1.4 million, of which US$1.15 million is from non-refundable Official Development Assistance (ODA).

The four-year project will help improve the performance of Can Tho’s civil servants and the quality of public administrative services through a one-stop-shop mechanism.

It will also aim to create a more favourable investment and business environment in the city.

The UNDP administrative reform project began late last year in two other locations, Danang City and Bac Giang Province. It will be implemented in Ha Tinh province in the near future.

Gov’t gets tough on State business equitisation

Prime Minister Nguyen Tan Dung has asked leading economic groups and State corporations to accelerate the equitisation process to improve its operational efficiency.

The Government leader’s request came after reports that the restructuring of State-owned enterprises (SOEs), including leading economic groups and State corporations is going slower than expected.

He asked the designated corporations and groups to focus on core business, divest from non-core areas and reduce State capital in equitised businesses.

The economic slowdown has taken its toll on all economic sectors, and the State economic sector is no exception. A number of major SOEs, including economic groups and corporations, have faced financial losses after pouring huge investment into non-core business areas. Consequently, divesture from the non-core areas is a must.

The PM requested that the economic groups and corporations clarify the responsibility of managers for financial losses, and restructure their capital and assets to reduce waste and free up additional capital for key projects and prevent waste.

“Divestment is a must, but the process requires cautious steps to prevent any unhealthy effects,” said Dung.

He also required the SOEs to promote the transparency in their financial operations, in addition to enhancing their governance and finalizing institutions.

“SOEs must make public the results of their operations to enable consensus in society,” said the government leader.

“They need to develop appropriate business strategies by reexamining their functions and core business areas, as well as investing in technology renovation in order to increase the economic value of end products and services,” said the PM

Dung acknowledged SOE efforts in maintaining production in the context of the global economic slowdown and confirmed that they are still the mainstay of the national economy.

In 2012 the designated economic groups and corporations earned a total of VND1,621 trillion in revenue, or 92 percent of their annual set target. Their pre-tax profit came in at VND127 trillion, down 5 percent against 2011.

Businesses that attained high revenue included those working in the oil& gas, electricity, petroleum, military-run telecommunications, post and telecommunications, aviation, and coal and mineral ores industries.

Seminar discusses Vietnam-EU FTA

A seminar was held in the central city of Danang on January 16 by the Vietnam Chamber of Commerce and Industry (VCCI) to discuss the contents of the Vietnam-EU Free Trade Agreement (FTA) that Vietnamese businesses need to consider.

The event was attended by representatives from the Ministry of Industry and Trade (MoIT), craft associations and major businesses having trade ties with EU member countries, and consulting experts from the European Trade Policy and Investment Support Project (EU-MUTRAP).

The European Union (EU), one of Vietnam’s top economic, trade and investment partners, has become the country’s biggest export market with total turnover estimated at US$20 billion in 2012, up 22 percent over 2011, and accounting for nearly 18 percent of Vietnam’s overall exports.

In his speech, Bui Huy Son, Head of the MoIT’s Asian Pacific Market Department said the first round of Vietnam-EU FTA negotiations officially started in October 2012 and the next four rounds will be held this year.

The signing of the Vietnam-EU FTA is forecast to bring not only benefits but also difficulties and challenges to Vietnamese businesses. As Vietnam’s important partner, potential market and FDI provider, the EU will help the country ensure its sustainable economic growth, Son said.

Participants in the seminar were briefed on the Vietnam-EU FTA and its possible impacts on the sectors of the national economy, as well as opportunities and challenges facing Vietnam after the signing of the FTA with the EU.

Cash to dominate real estate market in 2013

Cash will dominate the real estate market in 2013, said Marc Townsend, General Director of CBRE Vietnam at a seminar in HCM City on January 15.

Townsend said 2013 will see a higher proportion of first buyers involved, especially in middle class segment projects.

CBRE hopes that the office-for-lease market will be stable in HCM City in 2013.

For retail segment, he said, tough competition for leading positions will make rental prices at the centres become stable and high. The reason is both old and new retailers will compete to secure the best position in the market.

CBRE affirmed that Vietnam remains attractive to investors despite some negative signs of macro-economic growth in 2012. Even those housing projects bottoming out will draw foreign investors who are planning to penetrate the Vietnamese market.

Vietnam – a new dragon of ASEAN

Vietnam is considered a “new dragon” of ASEAN nations, said analysts at a seminar in Paris on January 15 to introduce Vietnam’s investment potential.

They said Vietnam is on the right track of development in the ASEAN bloc and has many prospects available for French businesses.

Addressing the seminar, Vietnamese ambassador to France Duong Chi Dung highlighted Vietnam’s achievements recorded in 25 years of renewal in the fields of economics, trade, investment, industry, agriculture, export and international integration. Over the last five years, Vietnam has reached an average economic growth of 7.5 percent.

In 2011 and 2012, despite the impact of the global economic downturn, Vietnam achieved economic growth rate of 5.9 percent and 5.2 percent respectively. Its exports rose from US$15 billion in 2001 to US$115 billion in 2012, of which foreign-invested businesses earned around US$72 billion, making up 63 percent of total export value.

Currently, Vietnam has welcomed investors from 90 nations and territories with a total of 13,700 projects capitalized at US$200 billion. Vietnam has established economic, trade and investment ties with more than 200 nations and territories in the world as well as international organisations and non-governmental organizations.

Two-way trade turnover between Vietnam and France increased by 13 percent to US$3.3 billion in 2012, US$2.9 billion higher than the previous year. Among European investors in Vietnam, France is second only to the Netherlands, with 340 projects capitalized at US$3 billion.

Dung said Vietnam and France are preparing to establish their strategic partnership within the framework of economics, trade and investment cooperation.

PVI signs insurance service contract with Nghi Son Oil Refinery

The Nghi Son Refinery and Petrochemical Limited Liability Company (NSRP) and the PVI Insurance Corporation signed a US$9 billion in Hanoi on January 15 to provide insurance services for the Nghi Son Oil Refinery Project.

This is the largest industrial insurance contract ever seen in Vietnam, affirming that PVI is the leading industrial insurer in the Vietnamese market, said PVI’s Director General, Truong Quoc Lam.

The contract will lay a solid foundation for PVI to expand its activities and provide high quality insurance services to foreign-invested projects in the future, Lam added.

The Nghi Son Oil Refinery Project has been implemented in line with the oil and gas sector’s development strategy to ensure national energy security. With a total investment capital of US$9 billion, it is a joint venture between PetroVietnam (25.1 percent) and major international partners such as Japan’s Idemitsu Kosan IKC (35.1 percent), Kuwait KPE (35.1 percent), and Misuit MCI (4.7 percent).

The project is expected to be completed by 2016 and put into operation in 2017 to produce 10 million tonnes a year and meet 40 percent of the total consumer demand for oil and gas in the country.

Ta Nung Int’l Trade Fair opens in Cao Bang

Vietnamese and Chinese businesses are attending the 2013 Ta Nung Border Gate International Trade Fair from January 15-22.

They have more than 100 stands displaying consumption goods, handicrafts, machinery and equipment, electrical devices, household appliances and garments.

The event marks the 63rd anniversary of Vietnam-China diplomatic ties.

Ta Nung is the most important border gate in the northern province of Cao Bang to promote trade exchange with China.

Over there, 30 projects have been licensed with a total capitalization of more than VND2.5 trillion, of which 11 are already operational.

Two-way trade revenue through the border gate has increased remarkably in recent years, hitting over US$200 million in 2012.

VBCSD helps promote business community

Deputy Prime Minister Nguyen Thien Nhan held a meeting with the Vietnam Business Council for Sustainable Development (VBCSD) in Hanoi on January 15.

The Deputy PM hailed the council’s successful organization of two important forums on sustainable development and food security, which attracted large numbers of businesses and mass media.

In addition, the council also well hosted some conferences on burning issues, including economic growth, environment management and climate change.

Notably, it has exerted efforts to bring the theme of business social responsibility into university education.

Deputy PM Hai hoped that VBCSD will play an active part in encouraging the business community to implement the national strategy for sustainable development and serve as a bridge between enterprises and related agencies at both central and local levels.

Dr. Doan Duy Khuong, Deputy Chairman of the Vietnam Chamber of Commerce and Industry (VCCI) briefed the Deputy PM on the council’s activities over the years and its future plan.

He said the VBCSD will continue to support businesses in improving their competitive capacity in 2013.

The council will work closely with related agencies to on the effective use of energy for sustainable growth in Vietnam.

Largest tourist complex to open

Vietnam’s the largest luxury beach resort in Vietnam – MGM Grand Ho Tram Beach – is expected to open soon.

Lloyd Nathan, chief executive officer of Canada’s Asian Coast Development Limited (ACDL), announced on January 16 that the first phase of the MGM Grand Ho Tram Beach project has been completed.

The five-star MGM Grand Ho Tram resort has 541 luxury guest rooms, world-class conference halls, a modern gaming area, a luxurious spa, an entertainment area, three outdoor swimming pools, and shopping malls.

The second phase of the project, which started in October 2012, includes building a new tower containing 559 additional guest rooms and installing state-of-art gambling facilities in entertainment areas.

Covering more 164 hectare in the southern province of Ba Ria-Vung Tau, the Ho Tram resort is designed to have 1,100 guest rooms, a series of luxurious restaurants, VIP areas, and a professional golf court with tourism and entertainment services stretching 2.2km along the coastline.

Following trial services for more than 600 customers last weekend, the resort is expected to welcome more tourists after its officially inauguration.

Ministry may import eggs to meet demand for Tet

The Ministry of Agriculture and Rural Development is considering import of eggs to meet the increased demand during Tet holiday season, after a sharp decline in the numbers of poultry and cattle in the country.

The ministry is ordering its subdivisions to check egg supplies from poultry farms as well as market demand, said Nguyen Xuan Duong, deputy head of the Livestock Department under the Ministry of Agriculture and Rural Development (MARD).

MARD and the Ministry of Industry and Trade will discuss whether it should import eggs to meet the demand ahead of Tet.

In 2012 and currently, although the numbers of poultry and cattle have decreased, quantity of meat, eggs and milk have increased.

Moreover, expected quantity of meat last year increased by five percent. With this increase, supply can definitely meet the domestic demand in Tet holiday season.

Some foreign businesses have suddenly increased the price of chicken eggs, causing upheaval in the market in North Vietnam. Several supermarkets confirmed stopping sourcing of chicken eggs from CP Vietnam Corporation after it announced an unreasonable price hike earlier this month.

Livestock Product Company CP Vietnam Corporation, based in Bien Hoa 2 Industrial Park, suddenly hiked egg prices. Nguyen Tien Dung, director of Co.opMart Hanoi said at a meeting with the Department of Industry and Trade and the Department of Finance in Hanoi that his supermarket had stopped purchase of eggs from CP since January 15 because of unreasonable pricing, and the supermarket had signed a contract to buy eggs from another company.

Le Thi Loan, deputy director of the Department of Industry and Trade in Hanoi, said her department and market managers will check the supply of chicken eggs in the market and deal with the company accordingly.

Thousands of workers laid off at Sanyo electronics factory

Japanese electronics manufacturer Sanyo laid off 3,750 workers due to loss making, from their factory in Bac Giang Province.

Le Quang Trung, deputy director general of the Department of Employment under the Ministry of Labor, Invalids and Social Affairs confirmed the news on January 15.

The company has terminated 3,750 contracts after it faced low profits and loss-making. To support unemployed workers, six other enterprises have offered to recruit these workers.

The province also opened a job fair to allow enterprises to interview the jobless workers.

The Sanyo electronic component factory at Quang Chau Industrial Zone in the northern province of Bac Giang broke ground in September 2008. Built over 60,000 square meters at an initial cost of US$95 million, the factory is Sanyo’s third in Vietnam, the first being the home electric appliances factory in the northern region and the second producing digital cameras in the southern region.

Gold market and encouraging signals in 2012

The pace of increase in gold prices has slowed down to 7.83% in 2012 compared to the annual rate 24% in years earlier, according to the data of the General Statistics Office .

This is an encouraging signal which would help restore market confidence and stabilize the macro-economy as the disparity between local and foreign markets has been narrowed, leading to a slight decrease in dollar price.

The signal was attributed to various reasons, including tamed inflation and shrinking consumer price index.

The declining gold prices in 2012 also stemmed from high deposit interest rates and effective management of the gold market and gold bars.

However, the disparity between local and foreign markets is still high as Viet Nam’s average gold prices sometimes closed at VND5 million per tael and remained there for long period of time.

To address the issue, the Government promulgated Decree 24/ND-CP dated April 3, 2012 to manage gold business activities in production and processing of gold jewellery and fine arts, purchase and sale of gold jewellery and fine arts, purchase and sale of gold bars among others.

The Foreign Currency Management Department under the State Bank of Viet Nam said that gold speculation has declined after the licensed gold bar market operated officially since January 10, 2013.

In Viet Nam, national gold reserve is modest. However, gold volume held by the public is estimated at 250-300 tons, equivalent to US$15 billion.

Gov’t guarantees to back refinery project

The Vietnamese Government on Tuesday gave a guarantee to important deals that would enable the planned construction and operation of Nghi Son Refinery and Petrochemical Complex (NSRP) in the central province of Thanh Hoa.

They include a Government guarantee undertaking (GGU) between the Vietnamese Government (represented by the Ministry of Industry and Trade) and foreign investors and the NSRP; a fuel product offtake agreement (FPOA) between the Vietnam National Oil and Gas Group (PetroVietnam) and the NSRP; and the NSRP’s letter of award for EPC contract (LOA) to the group of EPC contractors.

Accordingly, the Kuwait Petroleum International Company (KPI) will be a long-term crude oil provider for the NSRP.

The complex’s refined oil products will be secured by PetroVietnam and its petrochemical products to be bought by Japan ‘s Idemitsu Company.

At the signing ceremony Deputy Prime Minister Hoang Trung Hai said that the Vietnamese Government would continue creating favourable conditions so that the project will be deployed as scheduled and the complex can become operational in the third quarter of 2016.

The project has a total investment of $9 billion, of which $4 billion is contributed by the NSRP’s investors and the remaining comes from commercial banks and financial institutions.

Its investors include PVN, with 25.1 percent of stake; KPI, 35.1 percent; Japan’s Idemitsu Kosan Company (IKC), 35.1 percent; and the Japan’s Mitsui Chemical Inc. (MCI), 4.7 percent.

Approved in 2008 as a key national work, the 400ha plant was designed with total annual capacity of 10 million tonness or 200,000 barrels of oil per day.

The plant is set for completion in 2016 and will start production in 2017 with a focus on producing liquefied petroleum gas (LPG), gasoline products A92, A95 and A98, jet fuel and diesel oil.

It is the second largest oil finery plant project in Viet Nam in terms of the scale after the Dung Quat oil refinery plant.

When in place, the facility is expected to meet 40 per cent of local fuel demand.

The group will possibly increase the volume to 20 million tonnes annually after the project is expanded in the future.

World Bank’s support appreciated

The World Bank Board of Directors will likely approve a US$250 million programme to enhance Viet Nam’s economic competitiveness in March, officials announced following talks on reforming the financial sector and restructuring State-owned enterprises (SOEs) held in Ha Noi yesterday.

During the talks, Deputy Prime Minister Vu Van Ninh said restructuring credit organisations and SOEs was a crucial element of the country’s economic recovery plan.

The World Bank’s Country Director for Viet Nam, Victoria Kwakwa, briefed her host on the results of the WB-funded credit programme to reduce poverty in Viet Nam, which has seen total investment so far of $150 million.

She applauded Viet Nam’s commitment to reforming the financial sector and SOEs in 2013, expressing her continued support to the country during the process.

The two sides also discussed a wide range of related issues, including mechanisms to increase the effectiveness of State management of SOEs and the role that State capital should play in businesses.

Japanese among major investors in Hai Phong

Hai Phong attracted US$1.17 billion in foreign direct investment (FDI) last year, mainly from Japanese companies, according to Foreign Investment Agency’s statistics.

The port city surpassed the two major economic hubs of HCM City and Ha Noi, which lured $1.12 billion and $1.11 billion respectively.

Hai Phong approved 32 new projects, capitalised at $1.11 billion, while allowing 26 existing projects to increase capital, totaling $58.4 million.

Most of the investments were in Dinh Vu-Cat Hai Economic Zone and the city-based industrial parks, said Hai Phong Economic Zone Authority deputy head Mai Xuan Hoa.

Most of the projects used clean technology and invested in supporting industries, consistent with Hai Phong’s policy, Hoa said.

Among the Japanese invested projects was a $250 million factory producing medicine and medical equipment in the Viet Nam-Singapore Industrial Park. The factory was being developed by Nipro Pharma Corporation.

Others were the $119-million printing factory of Fuji Xerox and a $575 million tyre plant being developed by Bridgestone Corp in Dinh Vu Industrial Park.

The FDI influx from Japanese companies had helped boost the city’s economy and increased its ability to expand into international markets, not to mention created local jobs, the municipal Department of Planning and Investment said.

Hai Phong was considering to establish an industrial park for Japanese manufacturers, specialising in supporting industries, the department said.

The city was home to 95 Japan-invested projects, which combined were worth $2.6 billion, accounting for nearly half of the FDI registered to the city.

Although 2013 was forecast to be a tough year, the city remained optimistic of FDI attraction, especially from Japanese firms, Hoa said.

It was committed to continue addressing difficulties facing foreign investors, especially in land clearance, industrial zones’ infrastructure facilities and labour, he said.

648 businesses recognised for high quality products

684 businesses have been recognised for high quality products in 2013, according to a survey compiled by the Vietnamese High-Quality Product Business Association.

Ms. Vu Kim Hanh, President of the association, said that the survey was launched from September 2012 to mid-January, 2013 in twelve provinces and cities nationwide, with 19,984 inquiries to individuals, retailers and experts.

Specifically, 17 businesses retained the title for many consecutive years. In addition, the number of businesses gaining the title this year increased considerably.

The survey also defined the list of businesses with the highest customer satisfaction in six service fields.

Vinafruit targets USD1 billion of export turnover in 2013

The Vietnam Association of Fruits and Vegetables (Vinafruit) has announced its target to achieve USD1 billion of export turnover in 2013.

In 2012, Vietnam’s fruit and vegetable exports reached USD770 million, up 30 percent from 2011. Major export markets include China, Italy, Japan, and the US, of which China was the largest importer of Vietnam’s fruits and vegetables, followed by Italy.

Currently, Vietnam is one the five biggest fruit and vegetable exporters in the world. Aiming to retain this status, local businesses are improving food hygiene and safety quality, and heightening competitive capacity in the world market.

Vietnam’s fruit and vegetable export turnover has grown since 2005, estimating at USD300 million per year. In 2011, the country’s fruit and vegetable sector earned a turnover of USD630 million, up 35.5 percent from 2010.

SOEs create 1.2 million jobs 

State-owned enterprises (SOEs) secured jobs for 1.2 million laborers in 2012 with an average monthly salary of VND3.5-5 million (US$174-284) despite economic difficulties.

Of the labor figure, 679,000 people worked in Viet Nam’s eight biggest economic groups and corporations with monthly salary of VND9.41 million (US$468) each.

Especially, the Viettel military-run telecom group offered its employees with the highest rate of salary increase of 12%.

Earlier on January 19, 2012, the Ministry of Labor, Invalids and Social Affairs (MOLISA) reported that average income of workers in 2011 was VND4.17 million (US$207) per month.

The Ministry of Planning and Investment said total charter capital of 73 groups and corporations stood at over VND568 trillion. Last year, SOEs contributed nearly VND254 trillion to the State budget./.

Hi-tech park logs onto its future

Hanoi’s Hoa Lac Hi Tech Park planned to kick-off its infrastructure bidding packages in 2013.

Nguyen Van Lang, Deputy Minister of Science and Technology and head of Hoa Lac Hi-tech Park Management Board, said that in 2013, the management board and contractors would nail down its infrastructure bidding packages namely building transformer station, electricity transmission system, road and water treatment factory with total investment capital of 1.005 billion yen ($10 million).

Lang added the official development assistance (ODA)-based infrastructure bidding packages were funded by the Japanese government. Because the credit contract with the Japanese government was signed with the disbursement deadline April 2016, these infrastructure bidding packages would have to be completed by that time.

However, according to Lang, the biggest obstacle is the progress of site clearance. Until now, the park projects just cover 900 hectares out of 1,586ha, but only 500ha is clean land. That can bring effects on the progress of the ODA-based infrastructure bidding packages.

Pham Dai Duong, deputy head of the park’s management board, said to meet the site clearance deadline, the management board was struggling to compensate local residents before the Lunar New Year.

Besides, the manager board drafted special investment incentive policies for developers got thumb up from the prime minister. Accordingly, the lowest land rent here only equal 0.25 per cent in Hanoi. Developers will be enjoyed all incentives as area facing social and economic difficulties or enjoyed low personal income tax.

However, Vikomed chairman Tran Ngoc Liem said the company had operated for five years in the park, but Vikomed in general and other developers in particular were still facing difficulties.

Liem added that at present, the import duty rate for medical equipment was zero per cent, but import duty rate for components to produce medical equipment was to 10 per cent. Vikomed, hence, had petition to the management three years ago. However, its proposal still got no feedback until now. “The park should have policies more easy going,” said Liem.

In the same opinion, a leader from Viettel said the park’s electricity, transport system had not yet finished badly affected the company’s production.

The park, located in Hanoi’s Thach That district, was founded in 1999 covering 1,600ha.

The park targets promoting the development of information technology, especially software development, bio-technology, mechanical-electronic engineering, micro-electronics, new materials, and environmental friendly technologies.

Sacombank lends VND50 bil. to SMEs in Can Gio

Saigon Thuong Tin Commercial Bank, or Sacombank, last Friday clinched a deal to give VND50 billion worth of soft loans to 16 small and medium-sized enterprises (SMEs) and households in the outlying district of Can Gio.

The loan package includes VND20 billion with an interest rate of 11% per annum and VND30 billion with a rate of 12% per annum. Borrowers are those working in the farming, forestry and fishing sectors.

These loans aim to encourage local SMEs and households to shift to the urban agriculture industry under a plan of the city government in the 2011-2015 period.

Last year, Sacombank launched over 22 loan packages worth over VND16 trillion and US$180 million for 2,300 SMEs and those in important sectors such as export and import and rural development.

Established in 2010, Sacombank’s Can Thanh transaction office up to now has mobilized VND100 billion and posted total outstanding loan of VND66 billion.

Insuring against the unexpected

The insurance market is knocking itself into shape. Non-life insurance segment growth in 2013 is pegged at 12-13 per cent against 11.5 per cent hike in 2012, according to Vietnamese Insurers Association.

The non-life insurance market share is mainly on the hands of local leading businesses like PetroVietnam Insurance (PVI), Bao Viet Insurance, Bao Minh, Pjico Insurance Corp. and Post-Telecommunication Insurance PTI.

Foreign insurance players, still capturing modest market slices, have carved a niche in specific segments.

For instance, US Liberty Insurance targets motorised vehicles and health insurance area; France’s Groupama offers a wide variety of insurance services including health and accident liability, property and damage insurance, freight transport insurance and hull insurance; and Australia’s QBE focuses on fire and special peril insurance, reinsurance and insurance against risks to property.

“Insurance striving to bolster retail operations matches current development trend,” said Bank for Investment and Development’s Insurance (BIC) general director Ton Lam Tung, adding that firms needed to boost retail business in the face of current economic hardships and projects’ finite budget.

Besides, insurers are also scaling up efforts striving to foster and diversify distribution channels to get closer to customers.

Ngo Viet Trung, deputy head of Ministry of Finance’s Insurance Supervisory Authority, said current non-life insurance market featured over 800 products but showing little divergences. Hence, promoting distribution channels is important to help firms outshine their rivals.

Accordingly, in parallel to traditional channel of selling products through agents, firms were making efforts to boost sales through resorting to bank support, or selling via the Internet or mobile phones.

Industry experts, however, say that to get an upper hand in the market firms needed to set clear targets and capitalise on all resources accordingly.

“In fact, an insurer could hardly simultaneously achieve multiple targets, hence it must define what targets need priority,” said Ian Cheng, Ernst & Young Hong Kong’s advisory services director.

“For example, when a firm targets market share dominance, it must willingly accept lower profits in a certain period,” Cheng said.

More firms switch from cash to plastic

Almost 99 per cent of businesses still rely on paper money, but as commercial spending increases, a rising number of firms are seeking to make the move to plastic.

“Visa’s recent annual global Commercial Consumption Expenditure (CCE) index showed that Viet Nam’s commercial spending is expected to reach over US$236.6 billion in 2013,” said Lorijon Bacchi, Country Manager of Visa in Viet Nam.

“Businesses around the world have already migrated from cash and checks to electronic payment. It is time for local businesses to exercise this option.”

Viet Nam has more than 600,000 small and medium enterprises (SMEs), which each spend around $1,800 every month on cardable travel and entertainment (T&E) expenses, according to the Viet Nam Small Business Market Analysis 2012 conducted by BDRC Asia.

This sector, which represents the largest controllable expense for most companies, covers flights, dining, hotels and other expenses. More than 40 per cent of the survey respondents take international trips every year, with an average of 11 international business trips each year per company. Without the right tools, these trips can be difficult to manage.

Not only is using cash cumbersome, but companies also face difficulties in tracking expenses. Over a third of the firms surveyed let their employees use personal cards for business purposes, but this can be difficult as expenses are subject to personal credit limits and companies also have to reclaim interest charges.

Commercial cardholders are also eligible for benefits such as reduced fares, and special offers for business travel and accommodation and other travel-related services and business support services.

“When surveyed, 60 per cent of local businesses said they already have a credit relationship with their banks and 85 per cent are likely to apply for a ‘business card’ if made available,” Bacchi said.

“This shows a clear opportunity for financial institutions to optimise their commercial card programme to better meet the needs of their commercial and government clients.”

Firms learn how to tap Japanese market

Unique designs, quality materials and good workmanship are key for Vietnamese lifestyle products to do well in the Japanese market, experts said at a conference on Tuesday.

The conference was titled Enhancement of Design and Marketing for Lifestyle Products of Viet Nam for Japan Market. It sought to highlight factors that Vietnamese firms needed to pay attention to if they wanted to successfully tap the Japanese market.

Conference participants from Japan said they saw the relationship between the two countries develop day by day and Viet Nam emerge as an important partner.

To boost the export of lifestyle products to Japan, the most important thing is to understand the consumption habits of Japanese people, they said.

“I have spent some days in HCM City and visited some places producing handicrafts and interior decorations. I found that they have very good technology but their products are not suitable to the Japanese person,” said Hiroshi Sakamoto, chairman of Japanese Sense of Life Inc. Hiroshi said that to win over the Japanese, apart from the product being good-looking, Vietnamese companies must pay attention to developing its design as well as the quality of material used to produce handicraft works.

“You can enter the Japanese market only when you can produce particular products with your own features that no other country has. If you copy others’ ideas, you will not be successful,” he said. He suggested that Vietnamese co-operate with Japanese companies in gaining a foothold in the Japanese market.

“Co-operationg among Vietnamese companies is necessary. However, they should also enhance co-operation with Japanese companies to understand Japanese people’s tastes in design and material. Moreover, Japanese companies will help them introduce Vietnamese products in Japan,” he said.

Vietnamese firms attending the conference were also informed about the retail system in Japan and ways to distribute their products. They were also told of ways to effectively join exhibitions in Japan.

Images of some favoured handicraft products and new consumption trends in Japan were shown at the conference.

The conference, jointly organised by the Trade Promotion Agency (Vietrade) and Asean-Japan Centre drew participation of 100 companies and experts from Japan.

Seafood processor sells shares in affiliates

Seafood processor Hung Vuong Corp (HVG) announced the completion of its share sales in its three subsidiary companies, which brought the company a total of VND107.8 billion (US$5.2 million).

HVG sold all of its 90 per cent stakes, worth VND37.8 billion ($1.8 million), in An Lac Co Ltd, reduced holdings in Hung Vuong Vinh Long Co Ltd from 90 per cent to 31.7 per cent, earning VN35 billion ($1.7 million) and decreased its stakes in Hung Vuong Sa Dec Food Processing Plant from 70 per cent to 11.7 per cent, fetching another VND35 billion ($1.7 million).

All transfer values, realised in cash, were equal to the book value of these investments in the financial statement. By the end of the third quarter, HVG’s available cash totalled VND541 billion ($25.9 million).

Phu My Fertiliser to sell treasury stocks

Phu My Fertiliser (DPM) plans to sell all of its treasury stocks (the company’s stocks that were bought back by the company itself) comprising 2.45 million shares in the next 2-3 months, the company announced. The sales will be carried out by the order matching method.

DPM performed very well last year given the widespread economic woes. The company estimated a total pre-tax profit of VND2 trillion (US$95.7 million), exceeding its yearly target by 80 per cent.

Au Viet Securities Co plans to delist shares

Au Viet Securities Co (AVS) has surprised the market by asking for its shareholders’ opinions on the company’s plans to dissolve and delist its shares on the Ha Noi exchange given the market’s improved performance since the beginning of the year.

According to AVS chairman Doan Duc Vinh, the company will terminate its services of brokerage, underwriting, stock depository and investment consultancy. It will also sell assets and leave the stock market.

“I think the dissolution is the right decision in the context that the top 10 brokerage companies account for up to 60 per cent of the market share. Small brokerages cannot compete and exiting now will save money for both myself and shareholders,” Vinh said.

The company’s executives currently hold 85 per cent of charter capital. Market insiders forecast the company’s plan will likely be approved at its upcoming shareholders’ meeting, expected to take place on March 20.


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