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BUSINESS IN BRIEF 26-1Thua Thien-Hue plans to attract VND2.9 tril. investment into IPs

The central province of Thua Thien-Hue has planned to lure VND2.9 trillion worth of investment in its industrial parks (IPs) this year.

This year, enterprises in IPs are expected to disburse nearly VND 2,890 billion and employ some new 3,000 people (up 21.9% against last year).

In 2012, they made industrial production value of VND3,247, accounting for 39.2% of the province’s total, and export turnovers of US$294.6 million, representing 64% of the total.

IPs have lured 78 investment projects, including 42 operational ones. They enticed VND7,200 billion worth of investment in 2012, trebling the figure in 2011.

Phu Quy wind farm opens

The 6-megawatt Phu Quy wind farm in Phu Quy island district , Binh Thuan province began full operation on January 24, after a successful testing period in August, 2012.

The wind farm, funded by the PetroVietnam Power Corporation, is the first one in Vietnam that uses both wind and diesel to generate power.

Built at a cost of 335 billion VND (17 million USD), it includes three turbines and generates 25.4 million kWh per annum.

The plant will ease the current power shortage for 27,000 residents on the island, and fuel socio-economic development in the region.

Exports soar 43 percent in January

Vietnam is estimated to earn 10.1 billion USD from exports in January, a year-on-year increase of 43.2 percent, according to the General Statistics Office (GSO).

Foreign invested sector contributed significantly to the country’s total export value with 6.61 billion USD. The sector’s export turnovers surged 47.3 percent against the same time last year.

Among staples recording the highest turnover were crude oil, garments, seafood, footwear, mobile handsets and spare parts.

During the month, the country also posted an import turnover of 9.9 billion USD, marking a yearly rise of 42.3 percent with foreign invested sector making up over half of the total with 5.55 billion USD, up 52.7 percent year-on-year.

Following an optimistic result in 2012, the nation continued enjoying a trade surplus of 200 million USD in the first month of this year.

After 20 years of running in a deficit, Vietnam achieved a trade surplus of 780 million USD in 2012, according to the latest statistics from the General Department of Customs.

Export turnover for the year totalled 114.57 billion USD, an increase of 18.2 percent over 2011 while import value reached 113.79 billion USD, representing a year-on-year rise of 6.6 percent, the department said.
The statistics also showed that the foreign invested sector accounted for 54 percent of the country’s total trade value in 2012.

The sector recorded an export turnover of 64.05 billion USD, up 33.8 percent year-on-year, while roughly 59.94 billion USD worth of goods were imported, an increase of 22.7 percent on the same period.-

Real estate absorbs 23 percent of FDI

The real estate sector has accounted for almost one fourth (23 percent) of all foreign investment in Vietnam , with 49.8 billion USD poured into 389 projects by the end of 2012.

With 163 projects worth 12.4 billion USD, Ho Chi Minh City tops the list of localities attracting FDI in property. The city is followed by Hanoi , Ba Ria – Vung Tau, Phu Yen, Binh Duong and Dong Nai.

Singapore is the largest investor in Vietnamese property with 55 projects totalling 8.6 billion USD. The Republic of Korea ranked second with 79 projects worth 6.7 billion USD. Other key players are Malaysia , Brunei and Canada .

According to the Ministry of Planning and Investment, almost all FDI property projects have been implemented in line with registered purposes.

However, in the current freezing real estate market brought about by the economic downturn, a number of foreign investors did not complete their projects as pledged. Several major projects have had their licences withdrawn due to long delay, including the 11.4 billion USD Innovative City project in Phu Yen and the 4.15 billion Dragon Beach bio-tourism Park in Quang Nam .

In addition, legal and administrative bottlenecks also slow down the pace of a number of urban area development projects.

The ministry said that in the coming time, it is necessary to set up a legal foundation for both domestic and foreign property investment in order to attract greater FDI to the sector.

At the same time, it is essential to build effective management mechanisms to prevent foreign investors from registering high-capital projects, then to only invest a small amount with the majority of investment coming from domestic clients.-

FDI companies dominate Vietnam’s detergent market

The detergent market in Vietnam has posted a steady growth in the past few years but has also seen an oligopoly, with more than 30 domestic manufacturers being gradually overshadowed by just two Foreign Direct Investment companies.

According to figures by London-based market intelligence firm, Euromonitor, during the period 2006-2011, the detergent market showed robust growth with revenues rising from VND3.8 to VND7.3 trillion. Forecasts are that revenues will surge from VND7.5 to VND8.6 trillion during the period 2012-2016.

In 2012, although the economy tumbled and purchasing power of consumers weakened, the detergent market still maintained a growth of 10 percent. According to forecasts, with a population of more than 90 million with increasing average earnings and steady demand for essential goods, there is still potential in the detergent market for businesses to develop. However, a few foreign companies have been dominating the market and collecting high yields while most domestic manufacturers are barely able to maintain market share.

A report by the Vietnam Competition Authority under the Ministry of Industry and Trade showed that among 10 economic sectors, there were upto seven sectors facing oligopoly. Of which, the detergent sector saw the highest rate of oligopoly with market share belonging to two FDI companies, Unilever Vietnam and Procter & Gamble Group.

During the period 2008-2011, Omo brand of Unilever dominated Vietnam’s detergent market with more than 65 percent market share and Tide brand of P&G followed with about 23 percent market share. The rest 12 percent market share was divided equally among imported and domestic brands like Daso, My Hao, Lix, Vi Dan and Duc Giang.

On the other hand, while domestic detergent manufacturers overwhelmed foreign manufacturers by volume their product remained   inferior in quality.

Lix Detergent Joint Stock Company was seen as one of the 30 domestic companies that were competitive enough with foreign manufacturers. However, since 2000, the company has become a processor for Unilever. At that time, processing accounted for 70 percent of the company’s production and until 2011, despite the company’s efforts to expand business and increase products–the rate remained at 34 percent.

In reality, the familiarity of Lix in the domestic market remained poor as its products were mainly exported to Cambodia, Philippines and Japan. Currently, the company has mainly distributed products in the south-west area for consumers of average-income segment. Meanwhile, other trademarks, including Daso, Vi Dan, My Hao and Bay, merely account for 5 percent of market share and were being overshadowed more and more in the domestic market.

After winning most of market share in Vietnam, Unilever and P&G narrowed their manufacturing and hired smaller firms or local factories to process products for them. Without production pressure, these FDI companies concentrated on building their brand name and developing distribution channels.

In order to survive, several Vietnamese detergent manufacturers had no choice but to process products for bigger firms. At first, they received many orders at high price so they rarely cared about building their own brand names. But when the economy slumped and consumption declined, their partners reduced orders. At that time, many firms wanted to gain back market share but it was too late.

According to experts, products of Unilever and P&G are currently leading and determining consumer demand. Thus, domestic producers have to offer much lower price to attract consumers. In the market, the current price of local detergents such as My Hao, Bay, Net, Lix, Duc Giang and Vi Dan, was cheaper by 30-40 percent compared to that of Omo, Viso and Tide.

Meanwhile, 50 percent of material to produce detergent is imported, causing many difficulties for Vietnamese manufacturers. Increasing price to make up for overheads not only loses them consumer confidence but also a slump in revenues.

Unilever and P&G on the other hand are flush with liquidity and can import raw material. When local manufacturers face difficulties these companies present many new products lines to win consumers in the low-end segment and penetrate deeper into the rural market.

Tran Phuong Lan, head of Competition Supervision and Management Department, said that with few firms dominating the market the competition is unfair, causing a loss to consumers and local manufacturers. Therefore, authorities should carry out inspections to eliminate oligopoly, create fair competition and help Vietnamese firms to grow in the domestic market.

Experts discuss ways to boost services sector

The services sector can only developed when the scope of production is expanding, said experts at a recent conference.

Le Xuan Nghia, former deputy head of the National Financial Supervisory Committee, spoke highly of the sector’s considerable contributions to the economy’s GDP growth rate of 5.03 percent.

Despite the fact that transport, restaurant and hotel services continue growing, the finance and banking sector remains in a bind, he said.

To help domestic businesses, Nghia said, lending interest rates should be cut to approximately 9 percent this year.

Nghia argued that for a long time, they have not paid due attention to promoting brand names or investing in sales and marketing. He suggested it is now time for them to develop marketing strategies to secure a foothold in foreign countries.

Nguyen Duc Kien, deputy chairman of the National Assembly’s Economics Committee, urged them to deal with their large stockpiles in the first place to keep the seafood, textile, steel and iron industries purring along.

Truong Dinh Tuyen, former Minister of Trade and member of the National Monetary Policy Advisory Council insisted that they should not hesitate to lower product prices. If not, they will lack necessary capital to clear outstanding debts and maintain production activities.

Nguyen Van My, director of Lua Viet Tourism Company, recommended the Government provide businesses practical support instead of issuing new regulations that would put them in a difficult position.

BigC supermarket sued for chicken trademark infringement

Giang Son Joint Stock Company has announced it intends to sue the Big C supermarket chain for violating the trademark of Yen The chicken.

Nguyen Nhu Giang, Deputy Director of Giang Son JS Company located in Bac Giang Province, said the provincial Department of Industry and Trade had told the firm to develop its trademark. The local Department of Science and Technology granted a trademark certificate to the company.

“We found that BigC Supermarket chain has developed a range of Yen The branded chicken as its own product, but they’re cheaper than ours. The supermarket sells the chickens for just VND120,000 (USD5.7) per kilogramme compared to VND150,000 (USD7.14) at other supermarkets,” he said, raising doubt over the supermarket’s chicken sources.

The company has urged management agencies to stop the supermarket’s Yen The chicken sales to protect its rights.

As of January 22, the supermarket had continued to sell Yen The chicken.

Meanwhile, Luu Xuan Vuong, Chairman of Yen The People’s District said the district had not yet signed any contracts with the BigC Supermarket over the Yen The chicken trademark.

BigC’s communication officer Nguyen Thi Thanh Huyen said her department was not responsible for answering media questions and that the company would issue a statement at a later date.

Yen The district has a reputation for free-range chicken.

The district alone produces 13-15 million fowl a year with an annual output of 17,000 tonnes of chicken. The business involves more than 3,000 local households.

Major telecom groups ignore regulations on subscribers

Vietnam’s largest telecom groups Viettel, VinaPhone and MobiFone, were fined VND100 million (USD4,800) after violating regulations on prepaid subscribers.

The Ministry of Information and Communications (MoIC) collaborated with the Ministry of Public Security to review data on prepaid subscribers, who must use their ID numbers to register their accounts.

Viettel, VinaPhone and MobiFone were asked to compare and review their subscriber accounts and submit reports to the MoIC.

The MoIC co-operated with other agencies to carry out spot checks and discovered that the telecom groups had done little to comply with the regulations.

All the telecom groups had accepted invalid documents from the subscribers. They also signed contracts with agencies who hadn’t met requirements to establish subscriber information registration offices.

Some enterprises have continued to provide services to subscribers who haven’t re-registered when their information proved to be invalid.

MobiFone was fined VND23.5 million, VinaPhone VND25 million and Viettel VND70 million.

The MoIC asked the groups to stop accepting invalid registration information from subscribers and guide the telecom facilities on how to update the information on prepaid subscribers who registered with their ID numbers.

The telecom companies must also make sure that their agencies met the requirements and the registration process is in accordance with regulations.

Sanyo layoffs part of wider unemployment problem

More than 3,700 workers of Sanyo OPT Ltd. Company at Quang Chau Industrial park in Bac Giang Province have been put out of work due to losses caused by the firm’s bad operations.

The company said it would officially stop operations as of January 31, but pledged to ensure certain rights to their workforce, including salary, social insurance by the end of January so that they would be able to claim unemployment benefits.

More than 3,700 workers of Sanyo OPT Ltd. Company have been put out of work due to losses caused by the firm’s bad operations.

Tu Minh Tung, the chairman of the of Sanyo OPT’s trade union, said most of the workers returned their hometowns after being informed of the company’s closure.

Sanyo OPT Vietnam is a wholly foreign-invested firm that started operations in 2009. It specialised in producing electronic component parts. In 2010, Panasonic acquired Sanyo OPT. The company now has 3,750 labourers but failed to secure enough contracts to keep the plant running.

Workers in many other localities also in the same situation

Three state-owned toll stations in Quang Ninh have been closed, leaving nearly 100 labourers to be unemployed. Also, as planed, 17 stated-owned toll stations will cease operations in the near future, leaving over 1,000 more without work.

According to the Deputy Minister of Transport, Nguyen Hong Truong, the station shutdown was aimed at avoid overlapping toll collections once the road maintenance fund is established this year.

Also, around 70% of the 40,000 labourers in Ca Mau Province are facing redundancy after 29 seafood processing companies there have scaled back their operations or closed down.

Meanwhile, Mai Linh Group, one of the largest taxi companies in Vietnam, had to sell off its assets to settle outstanding debts, leaving 6,000 staff members out of work. The company’s CEO, Ho Huy, said that to pay VND500 billion (USD23.8 million) in debts, Mai Linh had to sell 3,000 cars.

According to the Hanoi Federation of Labour, more than 41,000 labourers lost their jobs in 2012 as 12,000 companies ceased operations. A preliminary survey showed that only 50% of local industrial companies could provide job security to their staff, and 12.2% were likely to scale back their workforce. The average base salary last year was just VND2.86 million (USD136.2) per month.

Economist says green FDI projects essential for sustainable economy

Vietnam should only approve foreign direct investment projects that are environmentally friendly so as to foster green and sustainable economy, one economist said.

At a recent seminar in Hanoi focusing on building green economy, economist Pham Chi Lan said that in the race to attract more FDI local authorities have become less stringent in their standards for approving FDI projects.

This, according to Lan, has resulted in a situation where many of the projects use outdated or inefficient technology, increasing waste and substandard products. “It is a waste of both investment and the resources of the nation,” she said.

She said that recently, several foreign investors in HCM City have suddenly left, leaving behind large unsettled debts, including unpaid wages along with their outdated equipment. This , she said, should be a lesson for designing a better FDI approval process in the future.

“A number of Vietnamese firms are also to blame for buying inefficient or substandard equipment because it was cheap. In the end this costs more in terms of high energy use and low productivity,” she said.

She added that state-owned enterprises (SOEs) are among the most environmentally unfriendly businesses, consuming large amounts of energy and natural resources, while at the same time consistently reporting losses or falling profits. She recommended the hastening of the SOE restructuring plan, better management and more transparency in this sector.

Lan said that the fostering of a green economy should be among Vietnam’s top priorities, adding that although economic growth has brought advantages, some of the side effects have been a squandering of natural resources and widespread pollution.

“It’s essential for our nation to focus on the development of a green economy and to enforce environmentally-friendly criteria while developing our economy. Economic development must done with saving energy and natural resources in mind. Not only must all industries be more responsible for these issues, but each individual holds a responsibility as well,” she stated.

Recent studies have found that Vietnamese enterprises of all industries have very high production costs in comparison with many other countries, especially in terms of energy and input material costs. She recommended that enterprises review their production processes and switch over to greener, more efficient technologies.

Some of the difficulties facing businesses who wish to make such a shift include educating their staff and customers on the long-term benefits. There may also be some resistance because it takes a higher initial investment, she said, but the long-term benefits will pay off.

“The Government should put in place more policies that create incentives for efficiency in the use of energy, raw materials and cost-saving in order to protect the environment. Strict punishments should be applied to businesses that harm the environment and squander energy and natural resources,” she added.

Visa Infinite debuts in Vietnam

Visa Infinite, the highest-grade credit card of Visa, made its debut in Vietnam on Monday at an event held by Visa and Sacombank.

Visa Infinite is the most sophisticated of the three premium credit cards of Visa, namely Platinum, Signature and Infinite. Unlike other cards, Visa Infinite has unlimited credit and the bank will grant cardholders a credit line of at least VND1 billion, said a representative of Sacombank.

The number of Visa Infinite cardholders worldwide is small. In Vietnam, only 200 cards will be issued every year to the people of high income and social status.

At the launch of Visa Infinite, 100 holders of Platinum cards had their cards upgraded to Infinite. Sacombank is targeting the 500 richest investors on the stock market as its next clients.

On acquiring a Visa Infinite card, the holder will become a member of the Visa Infinite Club and receive incentives offered by luxury hotels and resorts, first-class golf-courses and famous fashion brands.

Customers can use Visa Infinite when shopping to defer payments by 45 days with no interest charged. The card also provides interest-free installment payment or discount of up to 50% at many shopping spots, dining venues and service points.

In addition, with accident insurance worth as much as US$1 million, cardholders can feel assured when traveling worldwide.

For those interested in playing golf, Visa Infinite cards issued by Sacombank will grant them 12 free entries per year into Long Thanh Golf Course in HCMC or Montgomerie Links Golf Course in Danang.

Cardholders can also enjoy free spa service at Anna Sanctuary Wellness Spa in HCMC or Le Spa du Metropole in Hanoi, together with other services.

* Eximbank has launched the non-contact card named MasterCard PayPass, applicable at hundreds of points of sale (POS) nationwide.

All the current Eximbank MasterCards will be converted into PayPass cards. PayPass cardholders in Vietnam can make non-contact payments at any of the 500 POS at home and abroad.

PayPass can be used to replace cash payment. It is convenient for daily small purchases.

Cardholders apply the PayPass cards to card accepting machines to make payments with no need to show the cards to sales clerks.

PayPass technology will help cardholders remember their transactions to better manage spending.

The first POS for MasterCard PayPass in Vietnam are fast food restaurants, convenience stores and supermarkets.

Cell phone buying energy not as strong as expected

Although the Lunar New Year 2013 is drawing near, the cell phone buying energy remains mild, contrary to expectation of retailers.

Dinh Anh Huan, sales director of the retail chain Thegioididong.com, said mobile phone sales had picked up slightly, estimated at 20%, versus a growth of 40% last year.

At this time in previous years, the buying energy was very strong, but it seems to cool down this year. This suggests consumers are tightening their purse strings under the impact of economic downturn, said Huan.

The latest statistics of Thegioididong.com show that its cell phone sales fell slightly in December last year and the sales volumes and revenues of the other months were almost the same, without any sudden growth. On average, the retail chain sold around 300,000 cell phones per month.

Other mobile phone retailers like Mai Nguyen, FPT Shop, Vien Thong A and Viettel Smart also record modest growth in purchasing power.

Smartphones with reasonable prices and high specifications running on Android operating system are the top option of consumers as they are suitable for first-time users. Meanwhile, smartphones of higher grade like iPhone 5, Galaxy SIII, Galaxy Note 2 and HTC One are less attractive because of their high prices.

Hung Cong Hien, director of the electronics retail center under FPT Trading Company, said average-priced smartphones sold the best. On the contrary, the high-end smartphone segment is quite sluggish even when the Lunar New Year is near.

Huan of Thegioididong.com described 2012 as a very tough year for the mobile phone market.

The total demand declined 10% against 2011, while in previous years, it often grew 15-20% year-on-year.

Moreover, the market welcomed many new players, while the existing traders continued to expand their networks, leading to a more intense competition, said Huan.

Specifically, the mobile phone market last year witnessed the participation of VNPT and Viettel in the retail segment. VNPT established the retail chain 5G, while Viettel opened multiple Viettel Smart stores in Hanoi, Danang and HCMC.

Few choices to balance economic targets: experts

Local and international experts in a conference held by World Bank (WB) in Hanoi on Monday said that policy makers in the country have very few choices to balance the two targets of macro economic stability and economic stimulation as many difficulties still remain.

Speaking at the ceremony announcing the 2013 Global Economic Outlook report on Monday, Deepak Mishra, WB chief economist in Vietnam, said that the global lender had yet to see any strong solutions for stimulating economic growth as internal shortcomings had yet to be solved.

The local economy started to recover in 2010 after the global economic crisis had broken out between 2008 and 2009. However, the nation plunged into recession again last year and posted up the lowest growth since 1995.

Besides, Vietnam has seen a decline in the global competitiveness index due to falling FDI (foreign direct investment) capital from Japan.

Mishra expected FDI disbursement this year to stand at around US$7.3 billion, which is equivalent to that in 2012. This estimation has raised many concerns in the context of public spending and private investment reduction.

The Ministry of Planning and Investment earlier this month said that the nation has targeted pledges of US$14-15 billion in foreign investment this year, of which US$10-11 billion would be disbursed.

Meanwhile, monetary policies seem to loosen. While money supply has increased, interest rates have declined and liquidity has improved over the past two months, and therefore high inflation may recur if the nation loosens fiscal and monetary policies too soon.

The real inflation rate or the basic inflation of Vietnam stays high at around 11%, a huge challenge as it will drag down the nation’s competitiveness, Mishra commented.

Concerning establishment of an asset management company, Mishra said Vietnam should calculate capital, evaluate assets and issue regulations on rights and obligations of related sides. The program restructuring State-owned enterprises has set up a schedule but specific actions are still needed.

Close and comprehensive cooperation between sectors is a must in dealing with macro economic situation of Vietnam. This problem cannot be solved quickly, Mishra added.

Vo Tri Thanh, deputy head of the Central Institute for Economic Management (CIEM), said that Vietnam has to revive the economy in short term while maintaining the macro economic stability.

In the first half of 2013, the Government will speed up fiscal policies because monetary policies fail to inject capital into the economy given bad debts and the headache of restructuring ailing banks, Thanh said.

Aside from VND45 trillion worth of government bonds, provincial authorities are expected to get approval to issue around VND30 trillion worth of bonds to facilitate construction projects this year.

Monetary policies should not be loosened until the end of this year, Thanh said.

Besides, bad debt handling is moving slowly due to the lack of determination and concerns over group interests.

Concerning the world economy, WB in this report also expressed a gloomy view, saying that the economy would not likely to quickly recover and regain strong growth this year.

Kien Giang to open sea tourism to Thailand, Cambodia

A sea tourism route connecting the Mekong Delta province of Kien Giang with Cambodia’s Sihanoukville and Thailand will be launched this year, heard a meeting of representatives of the province and Thailand’s Trat and Chanthaburi provinces in Kien Giang on Monday.

Le Minh Hoang, director of the provincial Department of Culture, Tourism and Sports, said Kien Giang and Thailand had agreed on opening the sea route to Cambodia. Therefore, the meeting was only attended by representatives of Thailand and Vietnam on Monday.

The sea route when in place will be attractive to international visitors, especially European travelers. Vietnam will also benefit from the route as many foreign visitors traveling to Thailand and Cambodia want to go to Phu Quoc Island offshore Kien Giang Province by the route.

“This afternoon we agreed to make surveys of tourist sites from Ha Tien, Rach Gia and Phu Quoc to Sihanoukville, Trat and Chanthaburi and the route will be opened after that,” Hoang told the Daily right after the meeting.

The new tourism route will help tourists shorten traveling time to attractive destinations in the three nations. It will take visitors about two and a half hours to go to Sihanoukville by boat from Phu Quoc and two more hours to go to Trat.

However, all the three provinces are lacking qualified tourism boats for the route. The side preparing enough ships will be allowed to be operational first as per the agreement.

“In Kien Giang, only the Duong Dong ship is qualified for this route, so we will encourage local companies to build more ships with capacity of 250-300 tourists to serve travelers,” he noted.

Hoang said Kien Giang, Trat and Chanthaburi provinces will set up more rest stops on islands so that visitors can stop by there.

There were nearly 5.6 million local and foreign visitors to Kien Giang in 2012, a year-on-year growth of 10.1%, the local tourism department reports. The number of visitors to the province is estimated at more than 5.88 million people this year.

Power firm fury at ‘sneaky’ steelmakers

Ba Ria-Vung Tau Power Corporation has reported to Vietnam Electricity Group (EVN) that local steelmakers are making use of low power prices to expand operations, leading to huge losses for the power industry every year.

There are currently eight steel plants in Ba Ria-Vung Tau. Last year, they consumed 1.2 billion kWh of electricity, one-third of the province’s output, said Nguyen Van Giap, deputy general director of Ba Ria-Vung Tau Power Corporation.

Taking advantage of the price of power sold to the steel industry far below the production cost, many steel plants are raising capacity, said Giap. Now that the factories of VinaKyoei and Posco SS started their operations last month, the total amount of power consumed by steel producers in the province will rise to nearly three billion kWh per year.

As the price of power sold to the steel industry is now VND200-per-kWh lower than the generation cost, the power industry will incur an annual loss of some VND600 billion on three billion kWh of electricity sold to the steel industry.

Giap informed that Ba Ria-Vung Tau achieved a GDP growth of 6.1% in 2012, while the commercial electricity growth was 17.3%. Therefore, the ratio of power demand increase to GDP growth was relatively high in 2012, standing at three, versus one in previous years.

Ba Ria-Vung Tau Power Corporation has suggested EVN apply a specific power price mechanism for the steel industry to prevent steelmakers from expanding operations on cheap power.

Chinese cruise ship to make frequent port calls in Halong

A cruise ship called Hanna with a capacity of some 1,500 passengers will arrive in Halong Bay on January 27 on the opening of the route from China’s Sanya to Halong and Danang.

Hanna is owned by Hainam Group, a large Chinese group providing cruise, air transport and logistics services, and operated by the cruise line StarCruises. Saigontourist will cater to tourists coming on this cruise ship.

Vu Duy Vu, deputy director of Saigontourist Travel Service Co., said Hanna would make 64 trips to Vietnam between now and this April.

The cruise ship will bring tourists from China and other Asian countries from Sanya to Danang and Halong, with two weekly trips to each destination. A portion the cruise passengers will enter Vietnam by laissez-passers.

“Sixty four trips is an estimated number. We hope to welcome more international tourists via the tourism form Fly-Cruise, because Hainam Group has an aircraft fleet carrying passengers from Europe and the U.S. to China,” Vu told the Daily.

Cruise tourism will remain stable this year, he forecast. Cruise lines plan to increase frequency of cruise ships to Vietnam or replace old ships with bigger ones.

Saigontourist has been welcoming cruise ships of StarCruises sailing from Sanya to Halong and Danang every week before getting the contract for catering passengers on board the cruise ship Hanna.

Popeyes opens first restaurant in Vietnam

The U.S-based fried chicken restaurant chain Popeyes on Monday opened its first outlet in Vietnam at 62 Nguyen Duc Canh street in HCMC’s District 7.

Vietnam Food and Beverage Service Co. Ltd. is the master franchisee for Popeyes in Vietnam.

Vietnam is the 27th nation with the presence of the renowned brand Popeyes originated in Louisiana. There are now over 2,000 Popeyes restaurants worldwide, said Ron Whitt, vice president for international operations at Popeyes.

After reaping successes in South Korea and Singapore, Popeyes chooses Vietnam as its next destination to promote the spicy fried chicken with a 40-year history.

Popeyes intends to set up seven restaurants in Vietnam this year. Chicken is supplied by a domestic firm that fully meets the strict requirements on food origin, hygiene and safety.

Viettel provides service for bank customers

Military-run telecom company Viettel has cooperated with credit institutions BIDV, VIB and HDBank to provide BankPlus service to customers.

The service enables clients to carry out banking functions with their mobile phones, such as checking balances, money transfers and telecom-fee payment without the need to install software or connect to the Internet.

Transactions can be made anywhere as long as users have a Viettel mobile signal and is protected with a PIN and OTP (one time password). BankPlus is installed in SIM cards and is compatible to all cell-phones.

Viettel launched the service in 2011, which is also connected with Military Bank, Vietcombank, VietinBank and ABBank, to deploy BankPlus service.

This year, Viettel has plans to develop cooperation with more banks and launch more services such as taxi fares, air tickets and electricity and water bill payments. Transaction value via BankPlus has reached around VND200 billion monthly, while the number of BankPlus subscribers has grown around 16%.

Hoang Son, director of Viettel Telecom Company, said that Viettel is currently serving over 50 million mobile subscribers.

SMEs suffer from fund delay

The development fund designed for small and medium-sized enterprises (SMEs) has remained inactive while Decision 03/2011/QD-TTg on underwriting loans for these entities has yet to be deployed, said an executive of the Vietnam Development Bank (VDB).

VDB will be granted an additional VND250 billion for loan guarantees targeting SMEs but in fact, that is just information.

The global economic recession plus local macroeconomic difficulties over the past four years have resulted in capital shortages at numerous local SMEs, putting them at high risk of bankruptcy. Therefore, the Government has promised supporting measures for these companies, including solutions designed to help them have easier access to bank loans.

However, Dao Ngoc Thang, deputy general director of VDB, said his bank is still unable to make loan guarantees because related ministries and agencies have still failed to release specific instructions over 12 months after the decision’s issuance.

As for the VND250 billion that the Government is going to provide to VDB for loan guarantees, Thang said it is a provision that VDB will use for tackling bad debts when making guarantees and that VDB hasn’t received the capital so far.

VDB deems it necessary for close cooperation between the lender with other ministries and agencies to minimize risks when lending the target corporate borrowers, and without specific instructions, the bank finds it impossible to do so.

As such, State loan guarantees for SMEs have not made any progress. Thang said if guidance had been announced earlier, VDB would have undergone guarantees in the first quarter this year. The fund has been seen as operational in some big cities like HCMC and Hanoi but just a few entities have been able to approach underwritten loans, which is attributed to limited sources and cautiousness of local lenders.

The General Statistics Office records that there are over 540,000 companies in operation in the country, with 97% of them SMEs. There were about 55,000 enterprises having gone bankrupt or disbanded in 2012, according to the Ministry of Planning and Investment.

VDB from 2009 to 2012 screened and issued more than 1,500 letters of credit for domestic firms, just a small number compared to the total number of SMEs active at home, reports the ministry. Meanwhile, VDB said this activity had stopped, citing no new policies from the Government at the moment.

E-commerce traders see more chances in difficulties

Several companies active in online trading services said the current economic slump has created great opportunities for this kind of business model in 2013, with many enterprises racing to shift sales to the IT-based business model at the moment.

Ho Anh Tung, sales director of Nhat Nguyet Computer Co. which is operating the online trading floor 5giay.vn, expected growth of e-commerce activities at his firm to rise against last year. “Since the beginning of the last quarter in 2012, we have seen a month-on-month advertising sales rise of about 10-15% collected from vendors,” Tung noted.

Echoing Tung’s view, Nguyen The Dong, director of the trading floor 123mua.vn of VNG Corporation, said individuals and entities would strongly switch to online business from other traditional channels this year.

As of now, 123mua.vn has attracted 100,000 virtual stalls with roughly 20,000 paying fees, Dong said, adding the floor welcomes 2,000 new web-based booths a month. “Therefore, we have set the growth target of about 40% for the year 2013,” Dong stated.

According to Nguyen Anh Tuan, logistics director of SCJ TV Shopping Co. specializing in online trading services, his company receives an average of about 40,000 online orders a month, with its sales growing some 10-15% monthly.

Tung of 5giay.vn said his company is heavily investing in information infrastructure for the website with an aim to top the searching result list of Google in terms of consumer numbers. At the same time, it will have stalls arranged by locations to create more trading chances between sellers and purchasers.

Dong meanwhile said 123mua.vn would set aside more money to develop want ads, provide more ad channels to the stalls and offer the market trend column to keep consumers updated on new products and stalls with promotion activities.

Demand from local people, mainly housewives and office workers, has been changing and diversified. “Based on clients’ ideas, SCJ TV Shopping is experimentally selling functional food, packed foodstuff, milk, nappy or baby shampoo besides traditional items like electronic appliances and utensils,” Tuan told the Daily.

Specially, Tuan added his enterprise also sells cosmetic, artistic gymnastics tools and others whose sales account for about 30% of the total.

Workshop explores ways for breakthroughs

As the economic situation is forecast to remain difficult in 2013, the workshop named “Breakthrough Thinking” taking place in HCMC today suggests ways for enterprises to make breakthroughs in order to overcome the tough times

The workshop is organized by the Saigon Times Group in collaboration with the Overseas Human Resources and Industrial Development Association (HIDA) of Japan and the Institute of Management and Technology Promotion (IMT), with sponsorship of Dai-ichi Life Vietnam.

At the workshop, Prof. Dr. Shozo Hibino, co-author of the concept of breakthrough thinking, will have a speech about the new thinking paradigm with an aim to help Vietnamese entrepreneurs develop new initiatives for their business activities in time of crisis.

The workshop is expected to draw the participation of about 130 guests, including business owners and board members of companies.

When making business plans for a new year, companies often review their revenues in the old year and the remaining contracts. Then, they collect market data, determine possible new contracts, consider their resources and set targets for the new year, usually 20% higher than the preceding year.

Meanwhile, with breakthrough thinking, the process is purpose – target – result, contrary to conventional thinking. Specifically, enterprises set targets for the future first, and then look for solutions and mobilize resources to implement the solutions.

Hibino said: “The type of thinking based on analysis of the past and the present to predict the future is becoming dangerous when the future is not aligned with the past and the present.”

“Why do we have to analyze the past and the present to infer a future?” he asked. “With the current changes in the world, we must learn from the future, stand in the future to look back and develop ways and even a philosophy of action to take a shortcut and save time,” he stated.

Vietnam Airlines to withdraw from 10 firms by 2015

Vietnam Airlines will pull out of 10 companies by 2015 to focus on its core business operations, according to a restructuring plan for the air carrier approved by Deputy Prime Minister Vu Van Ninh last week.

Vietnam Airlines will sell out its shares in Techcombank, Bao Minh Insurance Corp., Hoa Binh Securities JSC, Aviation High Grade Plastic JSC, Air Service Supply JSC, Aviation Investment JSC, Aviation Logistics Services JSC, Saigon Posts and Telecommunications Co., Aviation Hotel JSC and France Telecom.

The airline’s core business operations clarified in the plan are passenger and goods transport and air services for socioeconomic, security and defense purposes. Its other main business operations include aircraft maintenance and aviation equipment manufacturing, technical services for domestic and foreign airlines and import-export of aircraft and parts.

Other activities directly serving the airline’s core business activities like passenger terminal services, airport infrastructure investment and agent services for other airlines will be decided by the minister of transport.

Vietnam Airlines, according to the plan, will wholly own Vietnam Airlines Engineering Co. (VAECO), and maintain 50%-plus ownership of eight subsidiaries and below-50% ownership of 11 others in the aviation industry.

PetroVietnam to ramp up divestitures

PetroVietnam has been told  to accelerate its equitisation process and pull capital from  its affiliates.

According to PetroVietnam’s restructuring project from 2012-2015 which got the prime minister’s go-ahead, the group should focus on oil and gas exploration, reconnaissance and exploitation, oil refining, gas industry, electrical industry and high quality gas services. Among which, oil and gas exploration and exploitation are core business lines.

Accordingly, the state group continues retaining entire charter capital at PetroVietnam Exploration Production Corporation (PVEP) and maintaining current charter capital stake at PetroVietnam Drilling & Well Service Corporation-PV Drilling (50.38 per cent), PetroVietnam Technical Services Corporation (PTSC) (51 per cent), Russian-Vietnamese VietsovPetro Joint Venture (51 per cent) and RusvietPetro Company Limited (49 per cent).

However, a string of PetroVietnam’s affiliates are also required to be equitised as well as reduce the group’s stake during the period, namely Binh Son Refining and Petrochemical Company Limited (BSR), one-member PetroVietnam Ca Mau Fertiliser Company Limited (PVCFC) and Dung Quat Shipbuilding Industry Company Limited.

Post-2015, several other members shall be equitised, including PetroVietnam Oil Corporation (PV Oil), PetroVietnam Power Corporation (PVP), in which PetroVietnam stake will be scaled down to 75 per cent.

The government also proposed PetroVietnam entirely divest from Lai Vu Shipbuilding Industrial Zone Company Limited, Ocean Bank, Green Indochina Development, PetroVietnam Trade Union Finance Investment (PVFI) during 2012-2015. After 2015, PetroVietnam shall contemplate withdrawing entire capital from Petrosetco and several others.

PetroVietnam’s shakeup plan involved a number of its affiliates and their employees, according to its chairman Phung Dinh Thuc. “However, PetroVietnam will do its utmost to get the project underway in the upcoming period,” said Thuc.

Amid current financial hardships at home and abroad, it will be extremely difficult for PetroVietnam to carry out equitisation plan and sell stake at affiliate units to take back capital as required by the government.

However, many affiliates were still appealing to investors as benefiting from diverse incentives like the case of BSR, said Thuc.

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

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