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Vietnam AirlineBUSINESS IN BRIEF 24-10s launches Da Nang – Vinh route

The national flag carrier Vietnam Airlines announced on October 22 that it will launch direct flights linking the central cities of Da Nang and Vinh, from October 28.

There will be four flights weekly on Monday, Wednesday, Friday and Sunday using ATR72 aircraft which seats 68 passengers.

This is the 38 th route in the domestic air network operated by Vietnam Airlines, which connects the three big cities of Hanoi (north), Da Nang (centre), and Ho Chi Minh City (south), to 20 cities and provinces nationwide.

On the occasion, Vietnam Airlines started a promotional campaign, offering return tickets for the Da Nang – Vinh route at only 600,000 VND, exclusive of taxes and fees, until December 28.

Foreign labourers buck system

Southern Binh Duong province is getting hot under the collar over foreign labour violations.

The province’s Police Department, in conjunction with the local Department of Labour, Invalids and Social Affairs, has detected and withdrawn 25 work permits from foreign workers in Taiwan-invested Omexey Home Furnishing Vietnam for recruitment and management violations.

The Department of Labour, War Invalids and Social Affairs also reported that it had detected other cases of using counterfeit employment certificates, including those at Quoc Thang International.

Nguyen Phung Trung, Department of Labour, Invalids and Social Affairs deputy director, rang the alarm bells that some foreign direct invested (FDI) enterprises in the province were intentionally faking employment certificates to receive work permits.

Trung said a total of 7,313 work permits for foreign workers had been issued by Binh Duong authorities.

According to Vietnam’s existing Labour Code, foreigners entering Vietnam to work for a period of more than three months must hold business visas and obtain work permits. However, many FDI enterprises in the country have not complied with this regulation.

“Also, many foreign labourers working in FDI enterprises in the province are unskilled or having not education and training degrees,” Trung added.

Similarly, according to Ho Chi Minh City Department of Labour, Invalids and Social Affairs, the agency has so far issued 27,236 working permits to foreign labourers in the second city. But only a half of them or 14,732 issued licences are still valid.

A recent Ho Chi Minh City Department of Labour, Invalids and Social Affairs survey showed that 30 per cent of foreign workers in the city did not have their paperwork in order.

The neighbouring Dong Nai province is facing the same problem.

“There are many foreigners working in the province without work permits,” said a deputy director of Dong Nai Provincial Department of Labour, Invalids and Social Affairs, which has issued 4,814 work permits for foreign labourers in the province.

Tourism projects fail to see the sun

Many tourism projects in southern Ba Ria-Vung Tau province face a dilemma.

Land procedures and rental rates were a hot topic on the agenda of a recent mid October meeting co-hosted by provincial Department of Planning and Investment, Ba Ria-Vung Tau Tourism Association with representatives from diverse state agencies, about 40 travel businesses and investors attending.

Firms voiced their great concern over constantly increased land lease rates, which were adjusted, based on market prices, significantly driving up their investment costs.

For example, according to US-based Skybridge Intercontinental Development Corporation – developer of Dragon Sea international tourism and exhibition-convention centre project in Vung Tau city’s Chi Linh-Cua Lap area, the project was licenced in February, 2010 to cover 43 hectares worth over $900 million.

The project had completed terrain and topographic surveys, environmental impact assessment reports and is awaiting approval for its detailed planning scale1/500. However, it faces hardships due to constantly revised land lease rates which were significantly higher year-on-year.

A representative from Binh An Tourism, developer of top-notch Binh Chau-Phuoc Buu resort project in Xuyen Moc district, said the company was handed 8ha coastal land costing more than VND30 billion ($1.4 million) in land rental, averaging VND400,000 ($19) per square metre.

The company argued the land value set pursuant to Decree 69/2009/ND-CP was unreasonable since the project area is now under management of Binh Chau-Phuoc Buu nature reserve and did not incur land use rights hand-over so the land value should not be subject to constant changes.

Decree 69 additionally provides for land use planning, land prices, land recovery, compensation, support and resettlement.

Surveys by provincial Economic and Budget Committee also mirrored land procedures as key reason behind delays of a number of tourist projects.

Ho Tram O Cap Resort in Xuyen Moc district’s Ho Tram site developed by O Cap Dai Duong is a typical example.

This 2.8ha project had its investment proposal approved by provincial management in June 2011 and reached an agreement on investment location in July 2011. Shortly after that, the developer completed site clearance and associated financial obligations.

However, in March 2012 the project record was suspended by the Department of Natural Resources and Environment upon hand-over by the developer because the province’s land use planning for 2011-2016 had yet to be approved.

The department said the project needed to wait for approval of the province’s land use planning for 2011-2020. When such planning will be ratified remains unknown at present.

Many other projects got stuck due to land procedure dilemma. This practice requires the southern province to ramp up efforts sourcing breakthrough remedies to tackle investors’ land woes.

Textile firms in need of long-term loans

Unlike the business slowdown seen in some sectors, several textile firms have a demand for loans to expand their business.

At a conference on the textile and garment sector held by Dun & Bradstreet (D&B) Vietnam in HCMC last week, Dau Tri Dung at Bank for Investment and Development of Vietnam (BIDV) said that prior to the conference, BIDV conducted a survey of 15 textile enterprises.

According to the survey, 60% of enterprises who have revenues of over US$10 million said that they needed to take out medium- and long-term loans.

Dang Phuong Dung, vice chairwoman and general secretary of the Vietnam Textile and Apparel Association (VITAS), said textile-garment export was in difficulty due to a consumption decline in many markets.

However, enterprises are affected differently depending on their customers. Therefore, there are still enterprises which have good markets and need to expand investment to compete.

Currently, many joint stock companies have to mobilize capital by issuing bonds and shares. “If enterprises are able to get access to bank loans, they will not have to struggle like this,” Dung told the media on the sidelines of the conference.

To tap the U.S. market and opportunities to be brought by the Trans-Pacific Partnership (TPP), Saigon Garment Manufacturing Trading Joint Stock Company (Garmex Saigon) is building a plant in the central province of Quang Nam with an investment of VND45-50 billion. The plant is set for operation early next year with 12 production lines.

According to Nguyen An, general director of Garmex Saigon, it costs less to making investments at this time. For example, the firm has imported modern machines from Japan, but the price is only half the previous price.

Huynh Van Nghi, general director of Phan Thiet Garment Export Joint Stock Company, said his firm developed a garment plant having 15 production lines last year, and the plant was operational in April.

According to Nghi, Phan Thiet Garment’s orders from Japanese customers are enough to do until next March. Besides, the firm’s apparel export to Japan in the January-September period was US$20 million, up 15% from the same period last year.

Japan expert reassures Saigon River tunnel safety

Saigon River Tunnel will be safe in the next 100 years, Japanese Professor Osamu Kiyomiya at Waseda University in Tokyo stressed at a meeting with the HCMC government last Friday.

With his 40 years’ experience in immersed tunnel design, Prof. Kiyomiya was invited to Vietnam by the Japan International Cooperation Agency (JICA) to look into the water seepage at the tunnel under the Saigon River and assure the city that it is safe, according to sources from JICA.

The tunnel, which people often refer to as Thu Thiem Tunnel, was opened to traffic less than one year ago.

Through the first two parts of his presentation “Immersed tunnels in Japan” and “Leakage problem on concrete tunnel element”, Kiyomiya said that not only in Japan but in the U.S. and Europe as well, immersed tunnels had faced the same problem.

In the final part of the presentation about the current problem of the tunnel, he confirmed that with proper and regular maintenance in accordance with the manual, there would be no trouble in the next 100 years.

Kiyomiya said he had inspected water seepage in many immersed tunnels, especially joint leaks in Naha and Kawasaki tunnels in Japan. “Most thermal cracks on the walls are less than 0.2 mm wide and waterproof and thus do not need fixing.”

The cracks were first found in the four tunnel sections when they were still in Nhon Trach, Dong Nai. As more and more cracks appeared on the concrete surface, Vietnamese people began to doubt the quality of the work.

The professor suggested some measures to handle the cracks. He said Japanese engineers use polyurethane rubber and steel plates to fill the cracks, and even use prestressed tendons to fix the fractures against the impact of external forces.

As for Saigon River Tunnel, he said the cracks had been sealed twice before the tunnel was opened to traffic. In addition, the contractor, Obayashi Corp., has carried out repair work two times this year.

“Inspection of water seepage is done weekly, and the number of places with water leak has gradually dropped since the tunnel was opened to traffic. In July, the total amount of water seeping was very small, at only 270 ml per hour, so steel corrosion will not happen because concrete is alkaline while the tunnel is now very dry,” said Kiyomiya.

However, scientists said applying epoxy glue to the cracks would not completely fix water seepage because water in concrete will look for other ways to get through.

Strong recovery for rice market after price revision

Local rice prices have rebounded strongly after the Vietnam Food Association (VFA) set higher floor prices for export rice while supply from local farmers has declined.

Rice prices in Can Tho City and Hau Giang Province jumped by VND300-500 per kilo after the new floor prices took effect on October 10. Rice prices dropped steadily in the two Mekong Delta localities around two weeks ago.

In An Giang and Dong Thap provinces, fresh paddy IR 50404 has been priced at VND5,100-5,200 per kilo after plunging to VND4,500-4,600 a kilo at the end of September. The dried type also increased to VND6,000-6,100 per kilo.

Traders in Tien Giang and Long An provinces have raised buying prices of the paddy IR 50404 to VND5,000-6,000 a kilo, although prices in the two provinces are lower than in An Giang and Dong Thap.

Although rice prices have bounced back, supply from farmers is running dry. The supply will not increase until farmers in Dong Thap and An Giang begin to harvest the autumn-winter crop in around 20 to 25 days’ time, said Duong Van Men, a rice trader in Dong Thap Province’s Lap Vo District.

Material rice and finished rice prices in big food markets in the Mekong Delta have moved up strongly compared to two weeks ago.

Material rice of the IR 50404 has been priced at VND7,700-7,800 a kilo while material rice prices of long-grain types have risen by VND300-400 against early October to VND7,800-7,900 per kilo.

Finished rice prices are VND8,900-9,000 and VND8,700-8,800 a kilo for 5% and 15% broken rice respectively, up by an average VND400 a kilo compared to early October.

However, rice supply has become scarce as farmers have yet to begin the autumn-winter harvest season.

Tran Van Tien, a rice trader at Ba Dac Market in Tien Giang Province’s Cai Be District, said that many traders like him have paused rice buying over the past 10 days as farmers’ rice stocks have finished.

Meanwhile, local enterprises and experts expect rice prices to rise further given positive signs of the export market.

Vinafood 2 has signed a contract to export 300,000 tons of 15% broken rice to Indonesia with delivery between October and December, amid the Mekong Delta’s autumn-winter harvest season.

Truong Thanh Phong, chairman of VFA, said farmers will enjoy benefits from rising rice prices and high demands of importers from now to early 2013.

Some rice trading enterprises at Ba Dac Market and An Thanh industrial complex in Tien Giang Province have also estimated positive exports until early next year.

According to VFA, Vietnam’s offering rice export prices have jumped by US$10-20 per ton compared to over two weeks ago. Specifically, the 5% broker rice is offered at US$450-460 per ton while the 25% broken rice is US$415-425 a ton.

Viet Nam attends Paris Food, Beverage Fair

Sixteen Vietnamese businesses showed their products at the International Food and Beverage Fair which got under way in Paris on Sunday.

The biennial fair, known as SIAL Paris, is one of the biggest of its kind in the world, attracting 6000 businesses from 200 countries. It will end on Thursday.

Vu Thanh, from the Agriculture Trade Promotion Centre of the Ministry of Agriculture and Rural Development, said firms are also learning about the French and European Union markets and co-operation and investment opportunities.

Sri Lanka-Viet Nam business council debuts

The Sri Lanka-Viet Nam Business Council made its debut late last week in Sri Lanka.

The council aims to promote and expand economic co-operation between the two countries, especially in the field of trade, investment and tourism.

Two-way trade turnover between the two sides reached US$113.2 million last year and is expected to be $150 million this year.

Talks held on tourist property investment

The second annual conference on tourism property investment and management in Viet Nam will take place in HCM City on December 15.

Attendees will review tourism property investment for this year and discuss the restructuring of hotel and resort projects in this economically difficult period.

Experts and consultants in the property sector will also suggest ways investors and enterprises can become more efficient with regards to the building and management of hotels, service apartments, villas and resorts.

Houston City touts its opportunities

The American city of Houston is an attractive destination for Vietnamese enterprises to seek business and investment opportunities, businesspeople heard yesterday at a workshop in Ha Noi.

The Viet Nam Chamber of Commerce and Industry held the workshop with the Greater Houston Partnership (GHP) to discuss trade opportunities and potential co-operation with Houston in fields the city is strong such as chemical industry, energy, aviation, biological technology, construction, health care, and logistics.

Houston – with a business-friendly environment, low cost of living, a sophisticated transportation system, and developed health care and education services – would bring a lot of advantages to Vietnamese enterprises considering investments in the city, according to GHP.

Genaro Pena, vice president of the GHP’s International Investment and Trade, said that Houston also offered the lowest costs for doing business.

Le Dung, Vietnamese Consulate General to Houston, said that two years after the consulate opened in the city, the trade co-operation of Viet Nam with the US had seen improvement and the relationship between the two countries had been enhanced.

Dung said that Houston was located in a very advantageous position, as goods that reached the city could be easily transported to markets throughout the country.

The consulate was always ready to provide Vietnamese enterprises with support when they expanded to the US, he added.

Houston Port is the US’s leading port in terms of the amount of foreign goods imported. Houston is the fourth biggest city in the US and the biggest city in Texas and ranks among the country’s most cost-competitive cities.

Prices tipped to keep rising

Prices of essential goods and services were expected to continue increasing till the end of the year and beyond due to an increase in demand, said the Ministry of Finance.

This included prices of rice and fresh food which would be in high demand through the February 14 Lunar New Year celebrations and holidays.

However, the price of sugar would continue its downward trend because of over-supply and competition from low-priced illegal imports, the ministry said.

And the prices of building materials, including steel and cement, would remain stable for the rest of the year. Vu Vinh Phu, chairman of the Ha Noi Super-market Association, said most supermarkets in Ha Noi had faced a 5-10 per cent increase in wholesale prices of goods – mainly apparel, plastics, chemicals and cosmetics.

But supermarkets had postponed increasing retail prices because of the reduction in customers’ purchasing power. The supermarkets would need to work out a schedule to increase retail prices in the future in conjunction with promotion programmes to increase consumption, Phu said.

Economist Pham Chi Lan said inflation was expected to reach 7-8 per cent for the year but the inventory index was still high at 21 per cent for the first eight months.

She said index had dropped from a peak of 35 per cent early this year because some large enterprises had stopped producing.

She said stability in the macro-economy and controlling inflation were important targets this year but the Government still needed to grow the economy.

To help enterprise sales, the Government should increase credit availability and reduce interest rates on borrowing by enterprises so they could reduce prices, Lan said.

The Government should also increase consumer incomes and thus their purchasing power, she said.

HCM City to build 2.7 million square meters of low-cost housing

Low-income people, students and workers in HCMC may have the opportunity to own a home as the city government has decided to build an additional 2.7 million square meters of low-cost housing from now to 2015.

The city late last week struck a deal with the Ministry of Construction to jointly implement this huge plan.

By 2015, the city and the ministry will construct an additional 600,000 square meters of housing for about 100,000 students, 1.3 million square meters or 17,500 condos for low-income earners in urban areas and 800,000 square meters for workers in industrial parks and export processing zones.

The city will also rebuild 25 aging apartment buildings which have severely deteriorated on total areas of 350,000 square meters or around 6,500 apartments.

According to the city Department of Construction, the city will make plans for deploying every specific project and projecting costs. The city’s chairman Le Hoang Quan told the signing ceremony that the city as of late 2011 had achieved the target of building 17.5 square meters of housing per capita.

Speaking with local media last Saturday, Nguyen Tran Nam, deputy minister of construction, said his ministry had proposed the prime minister allow construction of low-cost homes with a minimum area of 25 square meters a unit. As part of the housing development plan, the city will consider changing purposes of slow-moving serviced apartment projects into low-cost homes, and publicizing a list of projects in need of investors.

Investment in low-cost homes is classified into three categories, with one by the State, one by enterprises with State support and one by individuals, said Minister of Construction Trinh Dinh Dung.

Low-cost homes built with 100% Governmental investment will be leased to students and civil servants. Meanwhile, companies and citizens that get involved in low-cost home projects will be entitled to land use fee support, preferential credit, and tax reductions.

The ministry is drafting a decree on these incentives and will soon submit it to the Government for approval.

The total area of housing built in 1999-2009 nationwide is equivalent to the combined area constructed in the period before 1999, Dung said. However, housing distribution in the population remains unfair as there are many people owning many homes at a time while others are living in low-quality accommodations, he noted.

The city on Sunday inaugurated five blocks of housing with 30,000 units for students at the Vietnam National University in HCMC’s dormitory in Linh Trung Ward, Thu Duc District, which is also part of the housing development plan for students in the city.

Sluggish real estate projects face suspension risk    

Property projects that have yet to finish site clearance and compensation issues despite being granted licences should be suspended, said Construction Minister Trinh Dinh Dung at a recent press conference.

The local property market has been in a very difficult situation as land and housing prices in all segments have sharply decreased, which has caused financial problems, particularly for small and medium-sized firms.

“In this context, projects which have yet completed site clearance and compensation activities should be stopped because the on-going massive investment would push investors into risk of bankruptcy due higher supply compared to the demand,” the minister added.

The Ministry of Construction has asked agencies to consider current real estate market demand. Localities are also required to check property projects to define which should be cancelled, delayed or re-considered.

Developers at the press conference also requested that the ministry review policies on investment procedures, interest rates and land use fees.

Nguyen Manh Ha, Head of the Department of Housing and Property Market Management under the Ministry of Construction, said Hanoi had seen a great rise in the number of unsold apartments, especially in suburban areas, even though prices in almost every price range have sharply decreased.

Around 40,000 apartments currently lie vacant. In Ho Chi Minh City, roughly 20,000 apartments are still up for sale.

Economist Vu Dinh Anh said “If an average apartment costs about VN1 billion or USD47,000, that means the total value of the unsold apartments in the two cities is probably in the region of 2.86 billion dollars.”

Country’s largest dairy producer builds two robot-operated factories

Vinamilk, Vietnam’s largest dairy producer and on the waiting list to becoming Asia’s 50 best public traded companies in the Asia-Pacific region, is building two dairy processing factories in the southern province of Binh Duong which will be operated by robots.

Vinamilk said that as it is striving to become one of amongst the top 50 largest dairy enterprises in the world with turnover of US$3 billion in 2017, the company must construct factories whose operations are hi-tech.   Currently Vinamilk is standing at 53rd position in the globe.

The total investment for the milk processing factory will be around VND4 trillion (nearly $200 million). In the first phase, the factory will produce 400 million litres of milk in a year and in the second phase it will produce 800 million litres.

The second factory will make formula Dielac, producing 54,000 tons a year.

According to Vinamilk, the company revenues in the first nine months stood at VND21 trillion ($1 billion) a 25 percent year-on-year increase. Profits before tax were VND4 trillion, a 35 percent year-on-year increase. In 2012, it is estimated that Vinamilk’s turnover will be around VND26,500 billion.

In 2010, Vinamilk also received the Forbes Asia 2010 Best Enterprise Award among Top 200 Best Enterprises in Asia, while its CEO and chairwoman, Mai Kieu Lien, was among the 50 path-breakers on the list of Asia’s 50 Most Powerful Businesswomen. Two months later she also appeared on the list of best CEO’s in Asia as compiled by the Hong Kong-based Corporate Governance Asia Journal.

In related news, the food processing company VISSAN opened its 98th convenience food store in the country, as part of its strategy to expand in the domestic market.

The store is located at 344-346 Le Van Viet Street in District 9 in Ho Chi Minh City and offers many processed food items as well as commodities under the price subsidized program such as Vissan pork, Ba Huan eggs, rice and fish sauce, and Tho Viet vegetables.

Unfavorable weather raises vegetable prices

Heavy rains and high tide over the last few days has suddenly raised the price of many vegetables in provinces in the Mekong Delta.

In most central markets in cities like Can Tho, Vi Thanh, and Vinh Long, the price of lettuce was around VND25,000-27,000 per kilogram, an increase of VND10,000 per kilo over the previous month. The price of other popular vegetables such as malabar nightshade, mustard green and bok choy, climbed to around VND15,000-16,000 per kilo.

Bitter melon surged by VND4,000-6,000 per kilo compared to that in September. The price of scallion, in particular, doubled from VND10,000-12,000 per kilo to VND20,000 per kilo. Watercress jumped to VND40,000-45,000 per kilo.

According to the Department of Economics of Binh Minh District in Vinh Long Province, prices of vegetables rose sharply because now there is lesser amount of vegetable to harvest while farmers have been unable to replant due to continuous rainfall and high tide flooding.

Apparently farmers will be unable to sow their next vegetable crop until the end of lunar October, when vegetable prices may start to fall.

Deal worth $150m signed to build hydro plant

The Trung Son Hydropower Co Ltd, a subsidiary of Electricity of Viet Nam (EVN), yesterday signed a deal worth close to VND3 trillion (US$150 million) with a joint venture company to build and equip the Trung Son Hydropower Plant.

The joint venture is formed between Samsung C&T Corporation and Construction Company 47.

The total cost of the project is VND7.7 trillion ($410 million),with VND6.2 trillion ($295.2 million) being provided by the World Bank (WB), accounting for 80 per cent of the value. The remaining money has been invested by the Trung Son Hydropower Company Limited.

Speaking at the signing ceremony, Ngo Viet Hai, chairman and director of the Trung Son company said yesterday that the deal was the biggest so far on the project. He also confirmed that it is the first hydropower project that WB has financed in the country.

Keiko Sato, WB’s Portfolio and Operations Manager, said he expected that the bank’s capital would be used effectively.

Pham Le Thanh, EVN’s general director asked the company to closely co-operate with the successful bidder and its consultancy units to ensure that targets set in the contract are met.

Located on the Ma River in the Quan Hoa District o central Thanh Hoa Province, the plant – with its eventual capacity of 260MW – is expected to provide 1.55 billion kWh to the national power grid every year. A reservoir will be created, covering an area of about 13.13 sq.km.

The project aims to meet growing domestic demand for electricity, and bring flood control and irrigation benefits to rural and poor communities in the province.

There are four components to the project; dam and ancillary construction, transmission line creation, social and environment impact management and capacity development. EVN wants to increase its capacity for preparing hydropower projects that meet international standards.

The first rotor is expected to generate electricity by 2017 and project completion is expected by 2018.

Half of Vietnamese labourers work in agriculture: ILO

Around half of Vietnamese workers are engaged in low productivity, agricultural activities, says the International Labour Organisation (ILO).

According to ILO’s October 2012 Asia-Pacific Labour Market Update, two out of three workers in the country are informally employed. Informality is high in both rural and urban settings – accounting for two-thirds of rural, non-farm employment and half of all urban employment.

The highest levels of informality are in the trade sector (81 percent in rural areas and 63.7 percent in urban areas), the report says.

The ILO report also recognizes Vietnam’s significant development such as the introduction of the Unemployment Insurance Scheme and the endorsement of the Social Protection Floor Initiative which commits to providing basic income security and services to all people.

The Government has ratified the ILO Employment Policy Convention and is making efforts to develop a national employment policy and an employment bill to create conditions for full, productive and freely-chosen employment for all women and men.

ILO Bangkok labour economist Phu Huynh emphasised the close relations between employment and educational attainment.

Workers in informal sectors are not as qualified as those in formal sectors, Huynh said, citing that most people with tertiary education are formally employed, while  a majority of those with incomplete primary education or less are in informal employment.

Huynh also proposed that Vietnam pay due attention to developing skills and promoting stable employment.

Vocational training institutions should train professions that meet businesses’ demand, he said.

Domestic foods and drinks displayed at SIAL fair in Paris

Vietnam is attending an international food and drinking fair- SIAL – in Paris Nord Villepinte, France from October 21-25.

The fair has attracted nearly 6,000 businesses from 200 countries and territories in the world, including 16 ones from Vietnam.

The biennial event is considered a major festival for global food and drinking services.

Although the public debt crisis has put a danger on its trade activities, the EU is still one of important markets for Vietnamese businesses, especially when Vietnam is negotiating the Free Trade Agreement with the European Union.

Vu Thanh, an expert from the Department of Trade Promotion for Agriculture under the Ministry of Agriculture and Rural Development, said joining the event, Vietnamese businesses want to know more about regulations and technical barriers of France and the EU in general to grasp cooperation opportunities with foreign partners.

Vietnamese Ambassador to France, Duong Chi Dung, described the participation of domestic businesses as a success of the agricultural sector.

Vietnam Human Resources Day 2012 opens

More than 1,000 entrepreneurs, directors, economists and managers participated in Vietnam Human Resources Day 2012 (Vietnam HR Day) at the White Palace Convention Centre in HCM City on October 21.

This was an open forum to connect businesses leaders and the human resources from EduViet Corporation, the Vietnam Young Business Association, Hanoi National Economics University, Vietnam Human Resource Forum – HRlink.vn and Vietnam Director Human Resources Club.

Participants focused on discussing solutions to improve the management capacity of Vietnamese businesses.

In addition, an exchange was held between entrepreneurs, students and labourers about business leadership and staff motivation.

Vietnamese footwear sells well in Brazil

Vietnam has surpassed other large exporters like Indonesia, China and Paraguay to hold a 48.3 percent share of the Brazilian footwear market.

It has emerged as the largest supplier of footwear products to this South American nation, with export revenues hitting US$221.3 million in the first nine months of 2012, a year-on-year increase of 48.8 percent, according to the Vietnam Trade Office in Brazil.

Trade turnover between the two countries reached more than US$1.3 billion in the past three quarters of this year, up 24.1 percent over last year’s figure. Vietnamese exports have already earned US$597.2 million, filling 87.7 percent of the year’s set target.

Vietnam ships mostly footwear, seafood, computers, electronics, spare parts, transport vehicles, garments and textiles, and steel and rubber products to Brazil. It imports animal feed, tobacco, machinery, automobile accessories, chemicals, timber products, and raw materials for the garment sector.

Vietnam also expects to enjoy a favourable trade surplus with Brazil in the future, reports the Vietnam Trade Office in Brazil.

Mazda to build car engines in Vietnam

Japanese carmaker Mazda has intended to develop an engine factory in Vietnam with total investment capital of around US$600 million, the Dau tu (Vietnam Investment Review) reported.

The newspaper quoted a source as saying that the company had asked local authorities to recommend a suitable location for the plant. “The site may be in Hanoi or one of its neighbouring provinces,” the source said.

Vina-Mazda, a member of the Truong Hai Auto Co., opened a factory last October to assemble Mazda sedans in the Chu Lai Open Economic Zone in the central province of Quang Ngai.

This facility had an investment capital of VND750 billion (US$35.7 million) and will be capable of assembling 20,000 units per year by 2016.

If the project is materialized, it will help the development of an automobile industry that is yet to take shape in the country, the newspaper commented, noting that joint ventures here have only imported car components for assembly.

Truong Hai Auto communications officer Le Hoang Lan declined to provide any detailed information.

The US$185.5 million Chu Lai-Truong Hai engine manufacturing factory, the construction of which started in June, is the only engine production project in the country at present. It is expected to turn out 20,000 engines per year when it goes into operation.

Germany’s Robert Bosch Co also has a factory which produces driving belts for car gear-boxes with investment capital of 100 million euros (US$130 million), an amount expected to be raised to 230 million euros (US$299 million) by 2015, but all of its products are exported to Japan.

Deputy Prime Minister Hoang Trung Hai said national strategies prioritized the development of mechanical products which could take part in global production networks and value chains, as well as helping foster domestic support industries.

Boosting Sri Lanka-Vietnam trade ties

The Vietnam-Sri Lanka Business Cooperation Council made its debut on October 19 in Sri Lanka’s capital Colombo, aiming to boost bilateral trade, investment and tourism cooperation.

Addressing the opening ceremony, the President of Sri Lanka’s National Chamber of Commerce, Asoka Hettigoda, emphasized that as a branch of the chamber, the council aims to expanding the relationship between Vietnam and Sri Lanka, as well as economic cooperation, by bringing the business communities of both countries closer together.

He underlined that since the 17 major Sri Lankan businesses visited Vietnam last year, several of them have established a business relationship with Vietnamese partners and have already become members of the council.

Vietnamese Ambassador to Sri Lanka Ton Sinh Thanh applauded the inception of the council, describing it as an important event which will herald in new developments in bilateral trade, investment and tourism cooperation.

He praised the efforts made by the business communities from both countries, especially Sri Lanka’s National Chamber of Commerce, which has contributed significantly to increasing two-way trade in recent years. Last year, bilateral trade reached US$113.2 million and is estimated to rise to US$150 million this year.

Thanh said that he hopes that the council will promote its role and exploit the potential of each country, strengthening cooperation between the two businesses circles.

He stated that the Vietnamese Embassy in Sri Lanka will support and create the best possible conditions for Sri Lankan businesses to seek out opportunities in Vietnam.

HCM City October CPI up 0.4 percent

Ho Chi Minh City’s consumer price index (CPI) in October increased 0.4 percent compared to September.

According to the city’s statistics office, the index was 3.8 percent higher than in January and 4.86 percent more than the same period last year.

Prices of housing, electricity, water, and fuel saw the sharpest increase of 1.46 percent, followed by goods and other services, (1.02 percent), and garments, hats and footwear (0.58 percent).

Post and telecommunications enjoyed a slight rise of only 0.03 percent.

Household appliances and cultural and tourism services saw decreases of .044 and 0.02 percent, respectively.

Gold prices were up 5.9 percent, while the VND-USD exchange rate was down 0.22 percent.

Spectre of bad debts prompts banks to curb lending

Although the year will end in December, banks in HCM City are not exactly scrambling to give away loans to achieve their credit growth targets since they are wary of bad-debt risks.

The banking sector’s growth target has been lowered to a modest 8-10 per cent this year, but many banks seem unlikely to achieve it.

Many of them may have announced preferential credit packages but their sights are set firmly on risk management.

The City Housing Development Bank (HDBank), for instance, is offering personal loans at just 8.6 per cent interest, and the Viet Nam Joint Stock Commercial Bank for Industry and Trade (Vietcombank) is offering credit to companies involved in exports at 9 per cent.

Many others have similar schemes. But actual lending has been sluggish.

According to latest figures, deposits are up by nearly 11 per cent from last year, but loans outstanding have risen by a measly 2.5 per cent.

Sai Gon Thuong Tin Joint Stock Commercial Bank (Sacombank) was allowed by the central bank to grow credit at 17 per cent this year, but the increase has only been 8 per cent so far.

Sacombank does have several credit schemes on easy terms and low interest rates.

Its lowest rates now are between 11 and 12 per cent, but loans are only given to companies against collateral, general director Phan Huy Khang told Lao Dong newspaper.

“The bank offers unsecured loans only to individual customers who want to borrow for a short term, and exercises strict control over these loans to reduce risk,” he added.

The Import and Export Joint Stock Commercial Bank (Exim-bank) has seen outstanding credit actually decline by 2.3 per cent.

A bank spokesperson said despite this the bank would not lend without careful consideration.

Like Sacombank, it too has a credit growth quota of 17 per cent.

“Eximbank’s main task now is to focus on restructuring loans to gradually reduce bad debts,” he added.

Tran Phuong Binh, general director of the Dong A Joint Stock Commercial Bank, said the bank is not focused on achieving the credit growth target, but rather on sustainable development.

“The bank’s top priority is also to restructure loans to reduce bad debts,” he said.

Independent analysts said commercial banks have freed up credit compared with a few months ago, and as evidence pointed to the fact that they have earmarked large sums to lend to the property sector, which until recently was a no-go area for many.

But they are more focused than before on credit risk, they said.

Tra fish firms must follow hygiene rules

Tra fish business should have to meet stricter hygiene and registration conditions to guarantee quality and improve management of the sector, says the Ministry of Agriculture and Rural Development.

Under a draft decree presented to the Government, producers and companies who farm, process or export tra fish would only receive business licences if they obey food safety and hygiene requirements, clearly define food origins and protect the environment.

Deputy Minister Vu Van Tam said that under the decree, producers would have their business licences revoked if they failed to meet the conditions.

The draft aimed to crackdown on the “spontaneous” appearance of tra fish production companies, which were causing difficulties in balancing supply and demand, he said.

If approved, the decree could be a catalyst to reform regulations for tra fish exports to international markets, Tam said.

Only producers who met the conditions would receive loans from the State Budget, he said.

The proposed new mechanism would fit in with World Trade Organis-ation requirements, he said. It would also regulate the mechanisms for export contracts, floor prices of materials and production cost, he said.

And it would help avoid barriers being put in place against tra fish from Viet Nam, he said.

Duong Nghia Quoc, director of the provincial Agriculture and Rural Development Department, said the Mekong Delta’s Dong Thap Province had around 1,500ha of tra fish farms and Tra fish exports accounted for up to 75 per cent of the total export turnover of the province.

It was therefore necessary to remove overlapping and other obstacles to the sector’s management, he said.

Meanwhile, deputy head of the Viet Nam Association of Seafood Exporters and Producers Nguyen Huu Dung, said domestic export companies were competing against each other on selling price.

He said the export price was US$2.80 per kilo three years ago compared to $1.80 per kilo now because companies had undercut each other.

Also, there needed to be more co-ordination among tra fish farmers, processors, and exporters, he said.

The nation’s tra fish exports totalled $1.8 billion last year, equal to 2 per cent of GDP. Statistics show 290 tra fish processing companies had a combined capacity of 2 million tones of tra fish each year.

Import buffer to help struggling steel firms

The government is looking to come into bat to help struggling local steel makers.

Raising import tariffs on stainless cold-rolled steel products from 5 to 7 per cent is on the cards with the Ministry of Finance collecting comments to amend its Circular 157/2011/TT-BTC on preferential import and export tariffs.

An Sung Gu, chief representative of Posco-South Asia Hanoi, in a letter sent to the Government Office recently proposed it double the import tax rate on stainless cold-rolled steel products from 5 to 10 per cent to help domestic firms fight against cheap imports.

Gu said domestic firms’ total annual output of stainless cold-rolled steel reached 3.47 million tonnes annually, while domestic demand was only 1.3 million tonnes per year. That meant a big supply surplus. Despite a 5 per cent tax rate, stainless cold-rolled steel was imported into Vietnam at low prices and easily.

Dinh Huy Tam, general secretary of the Vietnam Steel Association (VSA), said in addition to Posco, other Vietnam steel-makers faced tough times due to imported steel.

Vietnam imported 440,000 and 228,000 tonnes of stainless cold-rolled steel in 2010 and 2011, respectively. This was despite the stainless cold-rolled steel tax rate revised up to 5 per cent in January, 2012 from 0 per cent. The volume of this product imported into the nation was 50,000 tonnes from January to May, according to VSA.

Gu said that ASEAN countries, especially Indonesia, Thailand, Malaysia had tightened the import of steel products through applying non-tariff barriers for imported steel products. The non-tariff barriers included greater documentation for applications, sampling inspection for each import, and auditing of importer or manufacturer. It often took 40 to 60 days to get an import permit, Gu wrote.

By contrast, “the process of imports into Vietnam is very simple,” he stressed, including no auditing requirements.

The Ministry of Industry and Trade said that the country would see the supply of steel products be 1.5-1.8 times greater than demand in 2015. Vietnam-based steel firms will have overall manufacturing capacity of 35.3 million tonnes per year in the next five years, while demand will be only around 15 million tonnes.

(Vietnam Net)

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