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BUSINESS IN BRIEF 26-10Delta to expand surf’n’turf farming

Alternating the cultivation of rice and shrimp has proved effective in coastal areas of the Cuu Long (Mekong) Delta and has great scope for further development, experts say.

They say the model offers higher returns than the farming of only paddy or shrimp.

The area under the rice-shrimp farming model in the delta has increased rapidly in recent years, from a few thousand hectares in 2005 to 160,000ha at present, according to the Plant Cultivation Department under the Ministry of Agriculture and Rural Development (MARD).

With the rice-shrimp farming model, farmers in coastal provinces let salt water enter the fields to farm shrimp during the dry season and use rainwater to grow rice in the rainy season.

With the development of high-quality rice varieties that are saline-resistant and suitable for use in the combined farming model, coastal provinces in the delta have been expanding rice-shrimp farming.

For instance, ST, a fragrant rice variety developed in Soc Trang Province, has been found suitable for planting in the rice-shrimp fields.

The province’s My Xuyen District has increased its rice-shrimp farming area from 8,000ha in 2009 to 19,000ha at present.

Rice-shrimp farming, which is being carried out in the delta’s Soc Trang, Tra Vinh, Bac Lieu, Ca Mau, Ben Tre, Kien Giang and Long An provinces, could increase to 180,000ha by 2015 and 200,000ha by 2020, the Plant Cultivation Department estimates.

Speaking at a seminar held early this month in Soc Trang, Truong Thanh Phong, chairman of the Viet Nam Food Association, said the cultivation of one rice crop and one shrimp crop per year in the same field was very special to Viet Nam.

“If farmers choose high quality rice varieties to grow in rice-shrimp fields, they will get high economic returns,” Phong said.

He said the export outlook for high quality and fragrant rice varieties would be bright.

Rice-shrimp fields yielded profits 15-30 per cent higher than when only rice or shrimp was cultivated, participants said at the seminar.

There were less disease outbreaks and rice grows better in rice-shrimp fields, they claimed.

Rice-shrimp farming also produces “cleaner” shrimp and rice as this production model used less fertilisers and pesticides, and was therefore more environmentally friendly, they said.

Nguyen Van Luat, former head of the Cuu Long Delta Rice Research Institute, said that under the new model, shrimp was still the main crop, and rice cultivation had a beneficial impact on the former.

At the seminar, representatives of rice-shrimp farming provinces petitioned MARD to issue policies encouraging investment in small and medium scale infrastructure facilities that would facilitate application of the new model.

The ministry should also encourage the development of more rice varieties suitable for the rice-shrimp farming model and help market the farms’ produce, they said.

They also asked the ministry to set up an agriculture extension project in the delta that would provide guidance on different ways to apply the rice-shrimp farming model as recommended by scientists.

Ho Quang Cua, deputy director of the Soc Trang Department of Agriculture and Rural Development, said not enough attention has been paid to investment in research and infrastructure development for rice-shrimp farming.

This has caused avoidable losses to rice-shrimp farmers in several provinces, he said.

For example, Cua said, saline water intrusion had badly affected more than 10,000ha of rice fields in Kien Giang Province in 2009. As many as 5,000ha were totally destroyed.

MARD Deputy Minister Bui Ba Bong said the delta’s coastal provinces had advantageous conditions to develop rice-shrimp farming.

Rice-shrimp farms should focus on high quality produce so farmers earn higher incomes compared to areas where two to three rice crops were harvested every year, he said.

He said delta provinces should develop organic rice production in rice-shrimp farming areas as organic rice got higher selling prices and would support sustainable shrimp cultivation.

His ministry planned to develop irrigation systems to serve rice-shrimp farming areas, Bong added.

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 biannual 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.

CPI cools down in October

Vietnam’s consumer price index (CPI) tumbled in October, rising just 0.85 percent compared to 2.2 percent in September, according to the General Statistics Office (GSO).

The October figure represents an increase of 7 percent against the same period in 2011, but is the highest growth rate for a single month since 1995.

According to a GSO report released on October 24, this month’s CPI result brought the total figure for the first ten months of 2012 to 6.02 percent.

Price surges  ranging between 0.17-5.94 percent  seen in 10 out of the 11 commodity groups contributed to the October price calculation. The highest growth was in the cost of healthcare services, beverages and tobacco. Conversely,  postal and telecommunications services experienced a small decline of 0.02 percent.

Nguyen Duc Thang, Director of the GSO CPI Department, attributed the increase to the rising costs of essential goods and services, including education and health care, which makes up 10 percent of the country’s total CPI increase.

Economists said that to keep Vietnam’s inflation at a single digit, State management agencies should enhance their forecast capacity to effectively adjust market prices.

They voiced concern about the rise in prices of food and beverages, which account for nearly 40 percent of the contributing commodity groups, especially in the current context when epidemics are breaking out and major year-end festivals are approaching, putting considerable pressure on food supply.

Economists stressed the need to tighten fiscal policies and help local businesses ease difficulties. It is also necessary to conduct market surveys to ensure an adequate supply of commodities and avoid price hikes at year-end, they added.

Top priority given to stabilizing macroeconomy

There are positive signs of economic growth, though still below par, to lay a firm foundation for Vietnam’s stable development in the coming years.

Against the backdrop of  world and national economic developments, it is maintained that there will be greater pressure to bear upon the government to fulfill this year’s major 2012 socio-economic targets approved by the National Assembly in its resolution.

With many economic sectors gaining momentum, Vietnam’s Gross Domestic Product (GDP) in the last quarter of 2012 is expected to reach 5.2 percent compared to the set target of 6-6.5 percent.

The service sector is predicted to grow by 6.3 percent, the industry and construction sector by 5 percent and the agro-forestry-fishery sector by 2.6 percent.

Analysing the quality of growth in recent months, both the government’s report and the NA Committee for Economic Affairs’s assessment report admit that there remains a major problem to be solved in this connection.

As Tran Du Lich, a deputy from the HCM City NA delegation, put it, there are snags in stimulating “growth” in harmony with “restructuring” measures.

In his view, it is crucial to prevent policies from creating a negative impact on the market and a price hike in essential goods such as electricity and gasoline.

Ha Sy Dong, another deputy from Quang Tri, says despite facing a lot of difficulties, Vietnam has managed to achieve stable economic growth and maintain national security and political stability.

In order to stabilise the macroeconomy, Lich proposed some specific measures to build confidence in consumers, businesses and investors.

He cites bad debts and high inventory levels as the two key problems that are hindering economic growth.

In the case of some commercial banks, they would rather lend more than get debt payment on schedule.

Some major businesses, even promising ones, have to scale down their production due to the lack of capital.

Lich argues that it is possible for banks to solve their bad debts worth VND202 trillion in total if they set up risk-reserve funds instead of shifting the burden on to economic sectors.

He also stresses the need to make domestic businesses fully aware of their own problems, even possible risks of going bankrupt if they are too dependent on bank loans.

Meanwhile, Dong points out that the bank restructuring project to help businesses with  better access to capital is slow going at some point.

Dong proposes setting up credit guarantee funds to assist small-/ medium-sized enterprises and cash-strapped ones in the first place.

Vietnam joins Tripartite Business Club meeting

The Vietnam-Cambodia-Laos (VCL) Business Club in Paris held its 10th meeting in the French capital on October 23.

Participants included French entrepreneurs and those from the three countries residing in France.

They discussed the regional and international economic and political situations and measures to strengthen trade links between Vietnam, Laos and Cambodia, as well as between the three countries and their host.

Nguyen Canh Cuong, the Commercial Counsellor at Vietnam’s Embassy in France, briefed the meeting on trade relations between Vietnam and France in recent years.

The meeting will help Vietnamese businesses seek out and access new partners, said Cuong.

Established in March 2009 in France, the VCL Club has around 1,650 members from 37 countries across the world.

Its annual meeting gives entrepreneurs from the three Southeast Asian countries the opportunity to meet with their French partners and introduce projects that promote socio-economic and cultural development in each country.

Int’l fair promotes hi-tech application in agriculture

The 2012 International Fair on High Technology Agriculture and Food Processing Industry (Hi-Tech Agro 2012) opened in Ho Chi Minh City on October 24, attracting the participation of more than 130 domestic and foreign businesses.

The 250 booths are showcasing various agricultural products using high technologies, ranging from foodstuff and ornament creatures to high tech equipment and machines.

Pho Nam Phuong, Director of the Ho Chi Minh City Investment and Trade Promotion Centre, said participants come from as far as the US, Italia, the Netherland, the Republic of Korea, Japan and Canada.

This is an opportunity for Vietnamese and foreign enterprises to exchange experience and boost cooperation, contributing to luring more investment to the agriculture and food processing sector, and implementing the national target programme on building new rural models in the 2010-2020 period, she said.

Within the framework of the fair, which will run until October 27, many activities and conferences on high technology application in agriculture will be held.

Vietnam, DPRK strengthen agriculture cooperation

Secretary of the Party Central Committee and head of its Commission for Mass Mobilisation Ha Thi Khiet received a delegation from the Central Committee of the Union of Agricultural Workers of the Democratic People’s Republic of Korea (DPRK) led by Chairman Ri Myong Kil in Hanoi on October 24.

Ri Myong Kil expressed his delight at achievements Vietnam has recorded during its renewal under the leadership of the Party, saying he hopes that the country will notch up further success.

He highly valued the traditional relationship between the two Parties, States and peoples which has been increasingly developed and affirmed the DPRK’s constant policy of strengthening ties with Vietnam.

He also briefed his host on the political and socio-economic situation of his country.

For her part, Khiet underlined the traditional ties between the two countries, highly valuing the fine cooperation between the Vietnam Farmers Association and the Union of Agricultural Workers of the DPRK.

She urged the two sides to promote exchanges of experience in developing agriculture and building new models of rural areas, focusing on farmers.

Stronger cooperation between the two organisations will contribute to deepening the traditional ties between the two countries, she added.

EU assistance to go to specific fields

The European Union (EU) wants to hear Vietnam’s opinions on specific fields for assistance, said the EU Director General for Employment, Social Affairs and Inclusion Koos Richelles at a press briefing in Hanoi on October 24.

2013 is the final year of the EU development support program for Vietnam in the 2007-2013 period, and the EU is drafting a new program for 2014-2020.

The EU will examine targets that recipients of its official development assistance (ODA) want to achieve in their socio-economic development plans.

Instead of providing assistance for individual projects, the EU will focus its aid on specific fields in the future after assessing the impact of their policies on the beneficiaries.

VND13 billion more for trade promotion

The Ministry of Industry and Trade (MoIT) has approved the third phase of the National Trade Promotion Programme which comprises 44 projects worth VND13.68 billion.

The third phase is expected to ease business difficulties and stimulate market consumption in the context of the economic slowdown.

It will concentrate on export markets and domestic trade promotions, especially in remote and border areas.

Goods distribution networks will be established to bring Made-in-Vietnam products to consumers in mountain, island and borer areas.

It encourages businesses to participate in overseas trade fairs, exhibitions and seminars to attract investment and seek partnerships.

To date, The Ministry has approved three phases of the national trade promotion programme for 2012, with a total of 114 projects worth VND93.08 billion.

Tra fish favored by Dutch consumers

Vietnamese Tra fish is taking the lead of the most consumed seafood in the Netherlands with 5,500 tonnes imported last year, up 900 tonnes over the 2010 figure.

Queens Products, the largest Tra fish supplier to the Dutch market, alone imported 3,000 tones from Vietnam’s Vinh Hoan Corporation.

Following Spain, the Netherlands presently ranks second in consuming the Vietnamese fish.

Tan Hoa, owned by the Vinh Hoan Corporation, is the first farming area in Vietnam to be granted certification from the Aquaculture Stewardship Council (ASC).

ASC was founded by the World Wide Fund For Nature (WWF) in 2010 to manage global standards for aquaculture activities.

Drastic fall in domestic steel price

The Ministry of Industry and Trade has announced a drastic fall in the price of domestic steel, even though this is peak construction season in the country and the Southeast Asian markets have reported a hike in steel prices.

Although steel price increased by US$10 per ton in the Southeast Asian markets, domestic steel has fallen to VND900,000 per ton.

Steel at factory rates is from VND15.7 to VND16.2 million per ton in the North, excluding VAT, and from VND15.3 to VND17.1 million per ton in the South.

Agents continue to down the prices from VND300,000 to VND1.2 million a ton, but the consumption is still too low. The reason for this is the current economic downturn and lesser construction activities than before.

Plastics industry forms regional plan   

Countries in Asia are drawing up plans to make the plastics industry sustainable, with a focus on plastic recycling, officials from regional plastic associations said at the 22nd Asia Plastics Forum held on Tuesday in HCM City.

Customers visit a booth displaying new plastics technology at the Saigon Exhibition and Convention Centre during a four-day International Plastics and Rubber Industry Exhibition in HCM City

Callum Chen, secretary-general of the Asia Plastic Forum, said countries and government were putting in place environmental criteria for companies to adopt, including requirements on suppliers.

Chen said that sustainability actually helps build efficiency, minimise waste and maximise resources.

Incorporating sustainable measures in business can save money and enhance companies’ reputation as well, he added.

A representative of the China Plastics Processing Industry Association pointed out that Chinese processing companies use a green low-carbon development model and emphasise a recycling economy, gradually reversing the investment – led growth model.

In China, recycled plastic waste, including imports, totalled 21, 884 million tonnes last year, accounting for one-third of the 66.14 million tonnes of synthetic resin consumption.

Recycling in China has enabled huge savings of raw materials and reduced crude-oil imports, as well as the volume of garbage landfill. It has also contributed to reductions in carbon dioxide and sulphur dioxide emissions.

At the conference, representatives of Malaysia and Vietnam said the two countries had implemented reduce-reuse-recycle activities for sustainable environment programmes to help change the public’s mindset and perception of the plastics industry.

The Malaysian Plastics Forum has worked with Waterfall Survivors, an environmental NGO, on an anti-litter campaign at selected shopping malls and streets in the capital city of Kuala Lumpur, as well as other major cities.

The Malaysian Plastics Manufacturers Association’s branch in Johur recently pledged keeping the environment clean by saying “no” to litter.

Vietnam instead has focused on plastic-waste collection and classification. According to the Waste Recycling Fund, plastic is the leading recycle industry (80 percent) in the country, followed by paper, metal and glass.

In HCM City, 274 recycling shops are located in households and small industrial areas. There are 11 recycling factories in industrial zones.

Ho Thi Kim Thoa, deputy minister of Industry and Trade, said the plastics industry played an important role in ASEAN, posting a stable average annual growth of 9 percent.

In Vietnam, the industry has registered an annual growth rate of 15-20 percent in recent years. It aims for a 17.5 percent growth rate by 2020.

Interest cap to stay put

In order to maintain market stability, the State Bank of Viet Nam will not remove the current cap on deposit interest rates, State Bank Governor Nguyen Van Binh said yesterday in a meeting here with a citizens’ group.

Binh told the voters that now was not a suitable time to remove the cap, noting that, while the liquidity of many banks had improved, some ailing credit institutions still faced difficulties.

“If the deposit interest rate cap were removed, these ailing banks would raise deposit interest rates to attract depositors, causing an overall rise in lending rates as well,” Binh said.

The State Bank regulates interest rates based on inflation rates and monetary market and has tightened the cap on deposit rates four times since March. A current cap of 9 per cent has been imposed on bank deposits of less than 12 months.

“When the country’s production and businesses bounce back, the State will remove the cap,” Binh said.

Meanwhile, Binh said, the cap was beneficial in helping control the nation’s inflation rate.

“The rate helps deposits in dong become more attractive than US dollars and gold, minimising speculation in these assets,” he said.

As some banks were still offering higher interest rates to attract depositors, Binh said that the central bank was working closely with other relevant agencies to better supervise enforcement of the interest rate cap and reveal any violations.

He said that the central bank would also continue to impose a lending interest rate cap for the benefit of several priority industries to ease their access to needed credit. Four priority industries are currently entitled to receive loans at no more than 13 per cent per year.

Hi-Tech Park told to attract best

The Sai Gon Hi-Tech Park should develop incentives to attract quality human resources in high-tech fields, including leading Vietnamese, overseas Vietnamese and foreign scientists to the park, Le Thanh Hai, Secretary of the HCM City Party Committee has said.

Speaking at a meeting to celebrate the park’s 10 years of operation yesterday, Hai said that although the volume of production and exports were much lower than those from export processing zones and industrial parks in the city, the park’s achievements were significant because of the nature of its high-tech products.

The park has been recognised an important facility, and an impetus for the modernisation and restructuring of the city’s economy, Hai said.

According to Le Hoai Quoc, head of the park’s management board, the park has attracted 66 investment projects, and currently houses 61 projects with registered capital of more than US$2.2 billion.

Tenants include 33 foreign direct investment projects capitalised at nearly $1.79 billion and 33 domestically-invested projects with total capital of over $430 million.

Foreign investors in the park include the chip manufacturer Intel and electronics component manufacturer Jabil, both from the US, and Nidec from Japan and Datalogic from Italy.

Twenty-nine projects are operational, attaining accumulative production of $3.612 billion, including exports of $3.5 million.

Production from these projects rose from $1 billion in 2011 to over $1.6 billion in the first nine months of 2012. The projects employ a total of 17,000 local residents.

Under the master plan for development of HCM City by 2020, hi-tech products are expected to make up 35 per cent of the city’s GDP.

The Minister for Science and Technology, Nguyen Quan, said the park deserved its leading position in attracting investment and infrastructure development.

Quan also asked the park management board to continue to focus on research and development activities to enhance expansion of the park.

High-tech agriculture fair opens

An international hi-tech agriculture and food processing fair (Hi-tech Agro) opened yesterday at Le Van Tam Park in District 1.

Hi-tech Agro, the first of its kind held in the country, has attracted more than 130 exhibitors from many countries, including the US, Canada, the Netherlands, Korea, Japan and Viet Nam.

Products on display include machinery and equipment used for breeding and tissue culture to produce clean seeds and seedlings, new flower varieties, ornamental fish and trees, hydroponic vegetables, edible and medicinal mushroom production models with advanced cultivation processes, post-harvest technologies and semi-processed and processed products.

Pho Nam Phuong, director of the HCM City Investment and Trade Promotion Centre, the organiser, said the event would provide opportunities for local firms to access advanced production technologies and exchange information and experience with international firms to raise their product quality.

The fair also aims to promote Vietnamese agricultural brands and help attract investment to the agriculture and food processing industry, she said.

Counterfeit goods flood Delta region markets

A national programme to increase consumption of Vietnamese goods in rural areas has been abused by many people to sell fake products, the Lao Dong (The Labour) newspaper reported.

It said famous brand names in both luxury items and essential goods were being duplicated and sold in rural shops and markets.

On October 10, police in Dong Thap Province’s Lap Vo District found 47-year-old Ngo Van Luan, a native of Nam Dinh Province, producing and packing fake Omo washing powder at the Thuy Oanh boarding house.

Police seized 300kg of the Yes brand washing powder, 55kg of the Omo washing powder, 3kg of various chemicals, two scales, one packing machine, and several kinds of packaging bearing the Omo bran.

Luan confessed that he was producing fake Omo washing powder to sell to retail outlets at lower prices than the real one.

In Can Tho City, there have been 201 cases of smuggled and counterfeit products recorded since early this year, a year-on-year increase of almost 20 per cent, the paper reported.

According to the Market Management Bureau of Tra Vinh Province, 159 cases involving fake goods recorded in the first nine months of the year.

On August 14, Tra Vinh police seized a lot of counterfeit goods at a facility making cooking oil and MSG (monosodium glutamate) run by 38-year-old Duong Van Thich of northern Nam Dinh Province.

They included 72 bottles of cooking oil, 528 empty bottles, four 25kg packages of MSG from China, two packing machines, 600 packages with the Omo brand printed on it.

Thich told the police he had bought the goods for low prices in Long An Province and HCM City.

Earlier, Tra Vinh police had stopped two buses on the way from HCM City to Tra Vinh that were carrying 1,000kg of MSG of unknown origin that had been packed under the Ajinomoto brand.

The provincial market management bureau said increasing numbers of small factories were producing poor quality goods or packing them under famous brand names for sale in rural areas.

Nguyen Xuan Hiep, deputy director of the Department of Industry and Trade and head of the Market Management Bureau in Tra Vinh Province, said most of traders and administrators were focused on markets in big cities.

Taking advantage of this laxity, many unscrupulous people were abusing the programme to bring Vietnamese products to rural areas. They were helped in this fraudulent enterprise by the lack of knowledge and awareness among rural consumers.

Hiep said concerted action involving authorities, enteprises and consumers was necessary to deal effectively with the problem.

Margin trading rules cause concern

VNDirect Securities Co has been ordered by the State Securities Commission to cease providing new margin contracts within 60 days, exposing some ongoing concerns over current margin trading rules.

The brokerage was cited for three violations: failing to ensure that clients had deposited at least VND10 million (US$476) on account, as regulated in Ministry of Finance Circular No 74/2012/TT-BTC; failing to calculate the limit on margin loans based on each stock but instead basing the calculations on client accounts; and allowing clients to engage in margin trading on ineligible stocks.

VNDirect’s chief investment officer, Pham Minh Huong, asserted that it was time to rethink the regulations governing margin trading.

“While the most important function of the stock market is to create liquidity, margin trading is not allowed on such high-demand stocks as Saigon Securities Inc (SSI) and Kim Long Securities (KLS) but only on some low-quality shares,” Huong said.

She also argued that requiring investors to maintain a minimum of VND10 million in their accounts was unnecessary.

Huong said that securities companies knew best how to secure their own assets and those of their clients, and she suggested that brokerages be allowed to determine for themselves which stocks would be eligible for trading on margin.

While saying that it would consider amending some regulations, the commission ordered the halt to new margin contracts and told VNDirect to cease supporting the involvement of Vietnam FNM Investment Service Co Ltd with VNDirect’s customers.

The brokerage was ordered to come up with measures to address its violations no later than November 22.

Huong said the two-month suspension would not fundamentally affect the company’s performance. Margin loans accounted for only 20 per cent of its charter capital, and funds were abundant for other operations despite the current low liquidity of the stock market, she said.

Woodworking industry mired in paradox

While the country is exporting a large volume of raw wood, enterprises in the woodworking industry have to import processed materials to serve production, according to the Vietnam Administration of Forestry.

Speaking at a workshop on business connection and international exchange in HCMC on Tuesday, Nguyen Tuong Van, deputy director of the Department of Science, Technology and International Cooperation, said that around 6.3 million cubic meters of wood was exploited from local natural and replanted forests in 2011. However, a large ratio of this raw material has been exported.

Meanwhile, local wood processors and producers had to import from four to 4.5 million cubic meters of processed wood, including plywood, to maintain production. The paradox of exporting raw wood and importing processed materials remains a big problem of the local woodworking industry, Van said.

The local forestry sector targets to expand the area of reforestation with an aim to supply 20 million cubic meters of replanted wood for the woodworking industry in 2020, Van added.

Speaking on the sidelines of the workshop, a sales manager of an equipment provider for Vietnamese plywood factories said that there is a huge demand for plywood. However, local firms still have to import plywood from China, Taiwan and Thailand.

More plywood factories have been established in Vietnam year after year but they fail to meet local demand, he added.

Tran Thanh Hai, deputy head of the Import-Export Department of the Ministry of Industry and Trade, said that Vietnam’s export market has changed significantly. Earlier, the nation focused on intermediary markets such as Taiwan, Singapore and South Korea that re-export Vietnamese products to a third country but now local firms have directly shipped their products to many nations.

However, the change has exposed many challenges for local enterprises such as requirements on legal origin of products. As local processors cannot reach legal wood supply in the country, they have to import materials from North America, the European Union and Africa.

In 2011, Vietnam spent over US$1.3 billion importing material wood while export revenue was US$4.2 billion. The nation expects to spend US$1.5 billion on wood material imports this year.

A Vietnamese delegation will join negotiations for forest law enforcement, governance and trade (FLEGT) voluntary partnership agreement with the EU in Belgium next month, aiming to ensure the legality of timber and timber products entering the EU market. Vietnamese enterprises will be subject to the requirement and have to show the FLEGT certificate before entering this market from March 2013.

Plastic firms report higher profits in Q3

A large number of listed plastic firms have reported higher profits in the third quarter of the year than in the preceding quarter, attributing the positive change to lower costs of input materials.

Binh Minh Plastic Company’s report on business shows that sales of the firm in the third quarter tumbled from the same period last year. However, the firm enjoyed an after-tax profit of over VND90.3 billion, an increase of 3.7% against the second quarter and a surge of 30.4% year-on-year.

The company ascribed its positive performance to the fact that its input costs in the third quarter plummeted 19.8% from the same period last year as prices of input materials were lower than the year-ago period.

Similarly, Vegetable Oil Packing JSC also achieved an after-tax profit of VND41.2 billion in the same period, jumping by up to 195% over VND4.8 billion reported in the third quarter 2011.

The firm achieved such an impressive growth as its sales in the past quarter marked up 43.7% year-on-year. Also, it is because the enterprise had mainly used material stockpiled from end-2011 while major materials prices had remained stable during this year’s January-September.

Besides, the positive result of the firm is also thanks to its effective cost management, with the third quarter’s financial costs slipping 45.8% year-on-year.

Rang Dong Plastic JSC obtained more than VND12.4 billion in after-tax profits, up some 96.8% over the same period last year while its after-tax profits in the second quarter 2012 reached VND7.9 billion.

The high growth of profits of Rang Dong is said to be owing to its good business strategy which brought about a 30.02% increase in sales and high profit growth for the third quarter.

Tan Tien Plastic Packaging JSC is the only one among the four listed to record a falling after-tax profit, earning VND6.8 billion, or a decline of 9.3% year-on-year and a fall of 16% compared to a quarter earlier.

Local digital communication firms succumb to competition

A report of IDC shows that Vietnamese enterprises in the digital communication industry are facing tough competition from foreign companies.

For social networking, domestic websites such as Yume, tamtay and Zingme hold a 30% market share. Meanwhile, five foreign social networks such as Facebook, Twitter, Linkedin, Flicks and Youtube hold a dominant market share of a staggering 70%.

Regarding online games for cell-phones, domestic revenue accounts for a mere 30%. Notably, the market share of locally-made computer games is only 6% while imported games account for up to 94%.

The television sector is also underdeveloped as both official and hired channels fail to give as diversified programs as those in regional nations.

Le Thanh Tam, general director of International Data Group (IDG) Vietnam, said that the digital communication industry is developing dramatically in the world market with connection devices turning smaller and smarter. However, the local industry is still young and its development is far behind potential.

IDC researches have suggested that the local digital communication has fetched around US$3.3 billion in revenue, mainly from Internet users and readers of e-newspapers and magazines, not from social networking, e-commerce or online game services.

Meanwhile, digital communication revenues of regional countries such as Thailand and Indonesia reach US$4.9 billion and US$5.4 billion respectively. The two countries have seen comprehensive developments in many fields such as electronic advertising, video game, digital music and movies and e-commerce following B2B (business to business) model.

The difficulties of local enterprises result from their haphazard development and the lack of orientation of managing agencies, Tam said.

HCMC to display hi-tech products

Vietnamese hi-tech products will be exhibited for the first time in HCMC under the framework of the 16th Annual Conference of Asian Science Parks Association (ASPA 16) in the city.

Speaking at a press briefing on Tuesday on the upcoming conference, the authority of the Saigon Hi-Tech Park (SHTP), the organizer of the 16th ASPA meeting, said that over 40 enterprises are expected to join the exhibition.

Le Hoai Quoc, head of SHTP, said that around half of these corporate participants are local and international firms active in the park. They will display their latest and typical products at the event.

The exhibition will offer scientists and students opportunities to learn about the industry.

The ASPA 16th Annual Conference with the theme of “Science Parks toward Green Economy” will take place in the city on October 25-26, with over 140 delegates from over 20 countries and territories attending. Targeting sustainable and environmentally friendly development, the conference stresses the importance of science parks in selecting science and technology projects following the current development trend.

More EU support for Vietnam

Following the conclusion of the EU-funded Multilateral Trade Assistance Project III (MUTRAP III), Vietnam will continue getting support from the EU through MUTRAP IV called European Trade policy and Investment Support Project.

Pham Ngoc Khoi, an official of MUTRAP, said the new project would help Vietnam further integrate into the global trade system and boost trade and investment ties between Vietnam and the EU.

The estimated budget for MUTRAP IV is 15 million euros. Preparation work for this project is underway.

MUTRAP III ended in late May this year after four years of operation. The project completed 70 activities, or 160% of the initial plan, attracted 84 foreign experts and 198 local ones, and made 64 research reports to support policy formulation.

During the project lifespan, 240 workshops and conferences were organized with participation of 22,000 delegates from ministries, enterprises, business associations, research institutes, universities and media. In addition, 30 publications were disseminated in English and Vietnamese and seven internet portals and websites were created.

Wellcome parts company with Citimart

Dong Hung Co., the owner of supermarket chain Citimart, has taken back all premises from Wellcome supermarkets in Vietnam as the deal between them has expired.

Nguyen Thi Anh Hoa, director of Dong Hung Co., said three Wellcome supermarkets – one in HCMC, one in Kien Giang Province and one in Can Tho City – have been converted into Citimart supermarkets.

Giant South Asia Vietnam under Hong Kong-based retail group Dairy Farm leased Citimart premises to open Wellcome supermarkets in 2007 under a five-year contract.

After five years of operation, according to local retailers, the brand Wellcome failed to attract the attention of Vietnamese consumers.

However, Dairy Farm does not stop its business in Vietnam’s potential retail market as the retailer has opened a Giant supermarket in the Crescent Mall in HCMC’s District 7.

Dairy Farm, which operates over 5,000 retail stores in Asia, has cooperated with ACB Hanoi Investment Joint Stock Company to expand the brand Giant in Vietnam.

Giant is a leading food and grocery retailer in Southeast Asia with several supermarkets and hypermarkets in Singapore, Malaysia, Indonesia and Brunei.

Unlike the Wellcome supermarket model in Vietnam, Giant needs larger premises like an area of over 3,500 square meters at the Crescent Mall.

After ending the contract with Wellcome, Citimart will continue to expand its system. Dong Hung Co. now has 28 supermarkets nationwide and is looking to have an additional 100 stores in the next five years to compete with other retailers.

(Vietnam Net)

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