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BUSINESS IN BRIEF 27-1Imports undercut sugar mills

Sugar producers in the Cuu Long (Mekong) Delta provinces are losing huge profits to illegal imports of Thai sugar, which is being sold at VND500,000 ($24) a tonne lower than domestically produced sugar.

Sugar is packaged by workers of the Thoi Binh Sugar Mill. Local producers cannot compete with illegal imports from Thailand because they must ensure sufficient profits for cane farmers.

Local producers cannot compete with the Thai imports because they must ensure sufficient profits for factories and sugarcane farmers, according to the Viet Nam Sugarcane and Sugar Association.

An average of 400,000 tonnes of sugar have been illegally imported yearly for several years, representing about 30 per cent of the total sugar sold in domestic markets, according to Nguyen Thanh Long, chairman of the association.

The Market Management Bureau in southwest An Giang Province, where Thai sugar crosses the border, said it had been able to prevent only minor cases of sugar smuggling.

Farmers in Kien Giang and Hau Giang provinces in the Delta are facing losses as the local departments of Agriculture and Rural Developments have demanded that they sell sugarcane to sugar factories.

But the association has also told farmers to not raise prices as factories were suffering financial losses. The factories fear that higher prices could lead to a drop in market demand.

Long told the Viet Nam Economic Times that the factories were selling sugar at VND13 million ($623) per tonne, while production costs were VND14 million ($671) per tonne.

Farmers are now rushing to harvest their sugarcane to sell to factories because they believe that buying prices could fall even further.

Meanwhile, factories have more than enough sugarcane on hand and are stockpiling sugarcane in the provinces of Long An, Ben Tre, Soc Trang and Tra Vinh.

Nguyen Hoang Ngoan, deputy general director of Casuco sugar company, said that factories, to avoid losses, could buy sugarcane at lower prices from farmers, but many farmers would then refuse to plant sugarcane in the next crop because of low profits.

As the Tet holiday nears, the smuggling of Thai sugar continues. But authorities have not been able to control the illegal activity at the border with Cambodia and Viet Nam.

CEO confidence in growth down

A majority of CEOs say global economy to remain stalled this year, according to PwC’s 16th Annual Global CEO Survey.

For PwC’s 16th Annual Global CEO Survey, 1,330 interviews were conducted in 68 countries during the last quarter of 2012. By region, 449 interviews were conducted in Asia Pacific, 312 in Western Europe, 227 in North America, 165 in Latin America, 95 in Central & Eastern Europe, 50 in Africa and 32 in the Middle East.

According to the survey, only 36 per cent of CEOs worldwide are ‘very confident’ of their company’s growth prospects in the next 12 months That’s down from 40 per cent who were ‘very confident’ of short term growth last year and 48 per cent in 2011, but still above the lows of 31 per cent and 21 per cent in 2010 and 2009.

Looking at the economy generally, 28 per cent of CEOs say the global economy will decline further in 2013, and only 18 per cent predict economic improvement; 52 per cent say it will stay the same. While the CEOs’ outlook remains gloomy, the forecast is an improvement on last year when 48 per cent of CEOs predicted the global economy would decline in 2012.

CEOs in Western Europe were least confident of short term revenue growth. Faced with ongoing recession, just 22 per cent of Western European CEOs said they were very confident of growth, down from 27 per cent last year and 39 per cent in 2011. Confidence in short term growth also declined in North America to 33 per cent (42 per cent in 2012) and in Asia Pacific to 36 per cent (42 per cent in 2012). Even in Africa, seen by many as the next high-growth economy, CEO confidence in company growth slipped to 44 per cent, from 57 per cent last year.

Latin American CEOs, however, bucked the trend. Their short term confidence rose to 53 per cent of CEOs, up slightly from last year.

At the country level, confidence varied widely: CEOs are most confident in Russia where 66 per cent are very confident of revenue growth in 2013, closely followed by India (63 per cent) and Mexico (62 per cent). They were trailed by countries including Brazil (44 per cent), China (40 per cent), Germany (31 per cent), the US (30 per cent), the UK (22 per cent), Japan (18 per cent), France (13 per cent) and finally Korea, where only 6 per cent of CEOs are very confident of revenue growth in the year ahead.

Longer term, overall CEO confidence remained stable; 46 per cent of CEOs worldwide said they were very confident of growth prospects in the next three years, about the same as last year. CEOs in Africa and the Middle East were most confident of long term growth, at 62 per cent and 56 per cent respectively. In North America, 51 per cent were ‘very confident’ of long term growth, while 52 per cent in Asia Pacific were very confident. Long term confidence was weakest in Europe at 34 per cent.

Releasing the survey results on the first day of the World Economic Forum annual meeting in Davos, Dennis M. Nally, chairman of PricewaterhouseCoopers International, said:

“CEOs remain cautious about their short term prospects and the outlook for the global economy. However, given the high levels of concern among CEOs about issues – such as over-regulation, government debt, capital market instability – it is no surprise that CEO confidence has declined in the last 12 months,” Nally said.

“We find CEOs working to deal with the ongoing risks. Strategically, CEOs continue to refine their operations, looking to cut costs without reducing value as they manage through sluggish times.

They are seeking growth opportunities organically, avoiding large outlays that could strap resources for the future. Most important, they have a clear focus on customers, collaborating with them more closely than ever on programmes to stimulate demand, loyalty and joint innovation.”

As the difficult economic conditions persist, CEOs are generally more worried about a wider range of issues than they were a year ago. Top of the list, a concern among 81 per cent of CEOs about continuing uncertainty over economic growth.

Sending a clear message to governments around the world, other key CEO worries are the government response to the fiscal deficit (71 per cent), over-regulation (69 per cent) and lack of stability in capital markets (61 per cent). CEO concerns about over-regulation are at their highest since 2006. When asked directly about the government response to the regulatory burden, CEOs are even more blunt, with just 12 per cent agreeing that their government has reduced the regulatory burden in the last year.

When asked about the major threats to their business growth, CEOs also cited the increasing tax burden (62 per cent), availability of key skills (58 per cent) and the cost of energy and raw materials (52 per cent).

CEOs remain relatively cautious on plans for increasing headcount for this coming year. 45 per cent of CEOs plan to recruit in 2013 (down from 51 per cent in 2012) while 23 per cent plan to reduce the size of their workforce.

The full survey report with supporting graphics can be downloaded at www.pwc.com/ceosurvey.

Textile and garment industry focus on key markets

The US, Japan, the EU and the Republic of Korea will remain key export markets for Vietnam’s textile and garment industry in 2013, according to the Vietnam Textile and Apparel Association (VITAS).

The association believes the US will continue to be the national textile and garment industry’s largest market in the coming time. Japan is expected to surpass the EU to become the second biggest importer with a turnover of 2.37 billion USD, an 18 percent increase from 2012.

VITAS forecasts a slight increase in global demand for textiles and garments, including a 3 percent increase in the US, 18 percent in Japan and 5 percent in other markets.

Vietnam’s textile and garment industry has high expectations for the Trans-Pacific Partnership Free Trade Agreement (TPP) in 2013. Businesses are taxed highly in the US, affecting the competitiveness of Vietnamese goods. But when the TPP is signed, a number of import duties will be reduced.

To help businesses overcome difficulties in 2013, VITAS has submitted a proposal to the Government for more investment to improve the image of the nation and the industry, boosting closer cooperation between Vietnamese businesses and the country’s embassies abroad to carry out promotional activities.

The association has also proposed a mechanism for cooperation among businesses, VITAS and the Government.-

Tourism sector works out development plan to 2020

The tourism sector’s a master development plan to 2020 with a vision to 2030 was approved by the Prime Minister on January 22.

Accordingly, the sector’s overall target to 2020 is to make the tourism industry a key economic sector with high professionalism and modern and synchronous infrastructure.

Tourism products will be highly competitive, diverse, and unique which are deeply characterised by national cultural identity.

The sector’s specific goals are to form seven tourist areas with their typical products, 46 national tourist zones, 41 national tourist destinations and 12 tourist cities, in a bid to create a driving force to spur tourism nationwide.

There are main development orientations and measures to realise the master plan.

State firms increase investment for development

State groups and corporations plan to pour around VND 507,000 billion in development plans in 2013, up 32.4% against 2012.

Businesses under the Ministry of Industry and Trade rank first in terms of development investment with 46.6%, followed by businesses under the Ministry of Transport (34.5%).

Eight State economic groups expect to spend more than VND 274,000 billion in the year, up 18.4% from 2012, which account for 50.7% of combined investment of State groups and corporations in 2013.

Viet Nam Electricity, Petro Viet Nam and Viettel Group have set big plans for development in 2013.

In 2012, 78 State groups and corporations spent VND 382,754 billion on development plans.

The PM has recently allowed the northern province of Thai Nguyen to organize tea festival in the fourth quarter every two years.

This is part of a project to preserve and uphold tangible and intangible values of Thai Nguyen-produced tea.

The project targets to sustain and develop traditional and famous tea regions and villages namely Tan Cuong, La Bang, Khe Coc Trai and Song Cau.

It also aims to reorganize tea cultivation areas to raise output, quality and ensure hygiene of Vietnamese tea.

In addition, the project looks to perfect infrastructure system, services and products to offer tours to the tea homeland.

Earlier, the first international tea festival was held in Thai Nguyen in November 12, 2011, drawing the attendance of ten countries and territories, 30 localities, 50 traditional villages and 25 tea enterprises.

The event offered a good chance to advertize Vietnamese tea to domestic and international customers.

Bao Viet Insurance holds 23 percent of market share

Bao Viet Insurance continued to hold first place in the insurance market, with an original insurance turnover of more than VND54 trillion, accounting for more than 23 percent of the market share. The group’s pre-tax profit was more than VND47 billion.

Together with familiar trademarks in the local insurance sector such as Bao Minh, PVI, PJICO and PTI, Bao Viet was the leading group among insurance companies.

In 2013, Bao Viet Insurance aims to continue to hold the first place in the insurance market with market share of 24-25 percent and achieve original insurance turnover increase of 10 percent from 2012.

The corporation strives to earn pre-tax profit of nearly VND500 billion in 2013. To achieve these targets, it will focus on solutions of managing risks in insurance and financial investment, cutting management fees to fulfil the profit goal, and improving competitive capacity by raising customer service quality.

Pacific trade pact may boost healthcare costs

Provisions of the Trans Pacific Partnership Agreement (TPPA) relevant to medicine could seriously undermine healthcare in Viet Nam by driving up the price of vital medications.

According to a new Oxfam-sponsored research released yesterday, the soon to be announced agreement could cause new medicines to become too expensive for the government and most households in Viet Nam to afford.

Negotiations for the TPPA between Viet Nam, the United States and eight other countries in Asia and Latin America will resume in Singapore in six weeks time.

Under the current TPPA proposal, Viet Nam and other countries would be required to introduce new intellectual property and pharmaceutical pricing rules that could dramatically increase medicine prices.

Intellectual property rules create monopolies, which when applied to medicines prevent the introduction of low-cost generic versions or copies. Nevertheless, generic competition is one proven way to sustainably reduce medicine prices.

Phd Nguyen Thanh Huong, of Ha Noi School of Public Health, helped produce the research based on in-depth interviews with key informants from the Ministry of Health, national office of Intellectual Property, hospitals and organisations.

Huong explained that if the proposed TPPA is approved, it will require extensions beyond the patent term of 20 years because patent protection for new uses of older, known drugs and minor variations will be adjusted accordingly.

She said the research showed that the rule of patent linkage would not allow registration of generics that may avoid patent infringement but still rely on clinical trial data and would require the Government to delay marketing approval of generics on behalf of multinational companies.

Data exclusivity requires a change in the current practices of the authority to accept whole new sets of responsibility for the usage of submitted clinical data and trade offs between safety and affordability.

At present, the Government requires all companies to conduct clinical trials in Viet Nam if medicine has not been on the market internationally for 5 years, she added.

The TPPA would limit the ability of the Government in the future to manage medicine prices by enabling drug companies to interfere with and influence drug reimbursement decisions and would impair the future use of reference pricing.

Regulators could use “an alternative transparent and verifiable basis” for setting prices that would “appropriately recognise the value of the patented” products, e.g. give higher reimbursement prices for proprietary products as opposed to generics, she said.

Associate Professor Pham Tri Dung, also from the Ha Noi School of Public Health, noted medicine costs are currently a significant financial burden on both the Government and households across the country.

The national health insurance fund spends 60 per cent of its annual budget on medicines and many key medicines for the treatment of such diseases as cancer or Hepatitis C are not covered by the government.

In fact, medicine purchases are mostly paid for by households in the country, with 58 per cent of all medicine costs paid for out of pocket, he said.

Rohit Malpani, Oxfam’s policy advisor added: “New trade rules for medicines introduced by the United States could not have come at a worse time for Viet Nam. Research indicates medicine prices are already set to double in the next five years, and these rules, if imposed upon the country, could push medicine prices even more out of reach of both ordinary people and the Government.”

“Thousands of people remain without treatment, and many existing patients will soon need new, expensive medicines to survive. The TPPA will make it impossible for the government to control prices for these badly needed medicines.”

Malpani said the impacts of the TPPA go far beyond the price of medicines. The research also demonstrates that regulation of medicine quality and medicine safety will be undermined by the TPPA.

Furthermore, local production of medicines, a promising industry that keeps down medicine prices and provides employment opportunities, will also be undermined by the TPPA, he said.

Experts suggested many other countries such as Malaysia, Peru, Chile and even New Zealand do not agree with the US proposal so the Vietnamese Government can work with those governments to develop their own proposal.

Banks look to cash in on higher credit growth

Commercial banks are trying to increase credit growth this year as the State Bank has given them a target of 12 per cent.

The general director of Nam A Bank, Tran Anh Tuan, said his bank was not worried about reaching this target.

According to Tuan, this was the first year the central bank did not set an individual target for each bank’s credit growth. Rather, the bank has lifted the lending rate limit for non-manufacturing sectors.

Many believe this will be a chance for banks to boost their credit growth in 2013.

Banks with good liquidity and redundant capital reserves, as well as strategies to provide individual home loan programmes, would be at a particular advantage.

The general director of Eximbank said his bank would set aside VND5 trillion for an individual home loan mortgage programme with a preferential interest rate of 12 per cent per year.

“The interest rate would remain the same for the first two years,” he said, adding the bank would accelerate disbursement under the programme this year.

Trinh Van Tuan, chairman of OCB, said the fact that the central bank had nailed down explicit credit policies to provide lending to non-manufacturing sectors, especially the real estate sector, offering a good opportunity for banks to boost their lending.

Yet Tuan also warned that given the current climate of mounting bad debt and inventories and low purchasing power, banks needed to be careful when giving out loans.

In 2013, capital was likely to be set aside for prioritised industries such as exporting, manufacturing and trading sectors, he said.

According to State Bank Governor Nguyen Van Binh, the central bank’s monetary policies in 2013 were very cautious and flexible, focusing on curbing inflation and stabilising macro-economic development.

The Governor said this year the central bank could provide capital for credit institutions at more reasonable interest rates to boost lending for prioritised sectors.

According to economist Pham Do Chi, reducing the lending interest rate below 10 per cent per year would encourage businesses to take out loans to expand their production and business.

Meanwhile, member of the National Financial and Monetary Policy Advisory Council Dr Tran Hoang Ngan said the housing market would warm up after the central bank nailed down explicit policies to support this field.

Ngan, however, suggested lending rates be set at 5-6 per cent to support individual home buyers and thaw the frozen property market.

The Governor predicted that the lending interest rate might go down rapidly in the time to come, but also warned about the return of inflation in Viet Nam due to loose monetary policies early this year, saying the central bank will remain cautious.

The central bank confirms that there will be no ceiling interest rates applied for all borrowers. Rather, interest rates will apply to specific sectors: for instance, prioritised sectors will enjoy a 12 per cent lending interest rate per year.

At the same time, to handle difficulties in the real estate market and bad debt problems, the central bank is expected to lend VND20-40 trillion ($80-190 million) to individual home buyers this year to stimulate housing demand.

Latest EU trade talks begin

Viet Nam and the European Union started the second round of negotiations on the Viet Nam – EU Free Trade Agreement (VEFTA) in Brussels on Tuesday.

The Vietnamese delegation was led by Deputy Minister of Industry and Trade Tran Quoc Khanh and the EU delegation, headed by Mauro Petriccone, Director for Asia and Latin America of the European Commission’s Directorate General for Trade.

The four-day talks will focus on the exchange of goods and services, investment, intellectual property, labour and environmental issues.

Following the success of the first round which took place in Ha Noi in October last, the second round is expected to speed up VEFTA negotiation process as agreed by both sides’ leaders.

The two sides plan to hold four rounds of talks this year.

The EU is Viet Nam’s largest export market with a turnover of US$20.3 billion last year, up 22.71 per cent over the previous year. Viet Nam’s main export staples to the EU include footwear, textiles and garments, coffee, seafood, computers and components, and wood products.

Once the FTA is signed, it will help promote trade and investment co-operation between Viet Nam and the EU, bringing practical benefits to the business communities and people of both sides.

Retailers cut prices ahead of holiday

Retailers in HCM City are offering discounts of up to 80 per cent to stimulate sales before and during the Tet (Lunar New Year) holiday, which begins on February 10.

Many clothing stores on the city’s main streets, such as Le Van Sy, Cach Mang Thang Tam, Nguyen Trai and Hai Ba Trung, are selling items at discounts of up to 50 per cent, including well-known Vietnamese brandnames like Blue Exchange and Viet Thy.

The trend has spread to the city’s major shopping centres, including Sai Gon Square, Diamond Plaza and Zen Plaza. In some centres, discounts have reached 80 per cent.

Sellers said the end of the year was the best time for promotions as many people buy new clothes at Tet.

In the run-up to Tet, purchases often rise by 70-80 per cent as sellers deeply discount goods in an aim to increase profits as well as reduce inventory.

Electronic centres and shops, which have had sluggish sales for several months, are also rushing to attract customers by offering many promotions.

The Cho Lon Electronic Supermarket has discounted prices on thousands of products, and the Thien Hoa Centre has cut prices on about 100,000 products. Discounts at the latter have totalled nearly VND20 billion (US$952,000).

This year, domestic companies have offered many high-quality products at low prices, and have strengthened their distribution systems by directly bringing products to traditional markets, trade centres and supermarkets.

As a result, sales have increased for made-in-Viet Nam products, especially for fashion, food and confectionery items.

Thanh Thuy, a housewife in District 3, said that she had chosen many Vietnamese products because the design and quality had improved. Product safety was also better, she added.

With more sales from local customers, many companies have been able to develop their products and overcome business challenges.

For example, in 2011, the Sai Gon Union of Trading Co-operatives (Sai Gon Co-op) earned more than VND14 trillion, while the figure rose to VND17.8 trillion last year.

Ninety per cent of products sold at Sai Gon Co-Op market are now made in Viet Nam.

To further assist local companies, experts have asked local authorities to limit and strictly control low-quality or unsafe imported products.

Vinachem battles fake fertilisers

The Viet Nam National Chemical (Vinachem) Group should closely co-operate with relevant sectors in fighting against the trade of counterfeited fertiliser, said Minister of Industry and Trade Vu Huy Hoang.

Hoang urged the group to continue drawing up effective measures to remove difficulties for its affiliates, while focusing on ensuring efficiency of its operational projects and speeding up the implementation of new projects.

“Vinachem should also foster technical innovation to sharpen its competitiveness,” Hoang said during a conference earlier this week to launch Vinachem’s tasks for the year ahead.

Despite the global and domestic economic difficulties, Vinachem still produced encouraging business results last year, said chairman of the management board Nguyen Anh Dung.

Last year, the group posted an industrial production value of over VND41.88 trillion (US$2.04 billion), surging 6 per cent on the previous year. It earned an export turnover of $520 million and its profit for last year surpassed VND3.31 trillion ($162 million).

For 2013, Vinachem is aiming for a total industrial production value of VND47.96 trillion ($2.34 billion), representing a yearly increase of 15 per cent, a revenue at VND49.34 trillion ($2.4 billion), up 12 per cent, and profits equal to the 2011 figure.

During the conference, Vinachem petitioned the ministry to soon perfect and issue regulations on co-operation between the group and other firms in exploring and exploiting apatite ore for fertiliser production in the northern province of Lao Cai.

It also called on the Government to speed up the implementation of the Lao Cai–Hai Phong and Vat Cach–Dinh Vu railway routes that would help facilitate the development of Dinh Vu Industrial Zone which is home to its key project, DAP Hai Phong Plant.

Encouraging more people to use Vietnamese goods to reduce imports was also necessary, it said.

Under the three-year plan recently approved by Prime Minister Nguyen Tan Dung, Vinachem will withdraw its capital from many big firms in non-core business fields by the end of 2015.

Following the plan, Vinachem will still remain a State-owned enterprise that focuses on four main businesses including making chemicals, fertiliser and crop protection products.

Vinachem will retain its stakes in five equitised companies within its core area of business, including Lam Thao Fertilisers and Chemicals, Southern Fertiliser, Binh Dien Fertiliser, Van Dien Fused Magnesium Phosphate Fertiliser and Viet Tri Chemicals.

Meanwhile, it must soon finish withdrawing its capital from 13 units including companies in the fields of insurance and securities such as Bao Minh Insurance Corp, Viet Nam Industrial and Commercial Securities Co.

Seafood processor kicks off M&A season

Seafood company Hung Vuong (HVG) has heated the merger and acquisition (M&A) market at the start of the new year by announcing a series of deals worth hundreds of billions of dong as it seeks to expand operations.

In late December, HVG decided to buy 5.63 million shares in animal feed producer Viet Thang (VTF) to increase its ownership from 28.54 to 55.31 per cent.

The shares were purchased from one of HVG’s affiliates – Western Hung Vuong Aquaculture Company.

Transaction negotiations were not made public, and the deal was conducted in less than two weeks, starting on January 3.

In return, HVG approved the sale of a 58.33 per cent stake in both Hung Vuong Vinh Long and Hung Vuong Sa Dec, and its entire 90 per cent stake in An Lac Co Ltd to Western Hung Vuong Aquaculture Company.

Hung Vuong’s target – VTF – is now the leading animal feed producer in the Mekong Delta region with annual capacity of 350,000 tonnes. The company plans to bring its total capacity to 480,000 tonnes by next year, while also expanding its range of products.

The positive business results of VTF were one of the main factors in HVG’s decision to sell so many assets in order to acquire a majority holding.

In 2011, VTF enjoyed record net profits of VND175 billion (US$8.3 million), far exceeding its goal of VND70.38 billion ($3.3 million) despite extreme economic difficulties.

It was aiming for a VND137 billion ($6.5 million) profit in 2012, and achieved 84 per cent of the target in the first three quarters, meanly completion of the yearly plan is likely to be confirmed in the coming weeks.

The purchase will help HVG save huge costs for animal feeding.

In addition, the acquisition of the aquatic feed factory Viet Dan worth VND74 billion ($3.5 million) with a capacity of 100,000 tonnes per year has also increased HVG’s production of feed for fish.

Most recently, HVG announced plans buy 5 million shares in Sao Ta Food Co (FMC) for VND52.5 billion ($2.5 million), taking its holding to 38.46 per cent of Sao Ta’s new charter capital of VND130 billion ($6.19 million). HVG’s overall goal is to become Sao Ta’s strategic partner and expand feed exports.

HVG has a history of M&A, having been the first business to use the public bidding method to increase its holdings in An Giang Fisheries Import Export Company (AGF) to 51 per cent in 2009, in order to take advantage of its lucrative export markets in Europe and the US.

Meanwhile, the operation of AGF achieved more positive results after becoming HVG’s subsidiary, with better governance and distribution networks.

Three years later, AGF’s profits grew from VND20.5 billion ($0.97 million) to VND62 billion ($2.9 million) and in 2011, it became the third largest exporter with 30,653 tonnes on a turnover of $93.6 million.

With the ambition of accounting for 25–30 per cent of the sector’s total exports (around $3 billion) by 2015, HVG has been investing in factories and farming areas throughout seven provinces in the Mekong Delta.

By the end of September last year, HVG had eight subsidiaries, five joint ventures and long-term investment in three other seafood processors.

Its total assets by that time had reached over VND6.8 trillion ($323.8 million) and private equity VND2.34 trillion ($111.4 million). Charter capital also increased by 13 per cent to VND792 billion ($37.7 million).

Foreign investment pours into real estate market

As many as 389 foreign-invested projects were licensed to operate in the domestic property market in 2012, with a total capitalisation of around US$49.8 billion.

Foreign direct investment (FDI) injected in real estate projects alone accounted for 23.32 percent of Vietnam’s total FDI last year.

Ho Chi Minh City attracted the bulk of the real estate FDI, with 163 projects worth US$12.4 billion.  It was followed by Hanoi, Ba Ria-Vung Tau, Phu Yen, Binh Duong and Dong Nai, consecutively.

Singapore is currently the largest foreign trade partner of Vietnam’s real estate sector with 55 projects capitalised at US$8.6 billion. The Republic of Korea ranks second with 79 projects worth US$6.7 billion.

Most foreign investors are involved in the construction of luxury hotels, resorts, offices for lease, and high-end apartments.

According to the Ministry of Planning and Investment (MPI), progress was made in FDI disbursement, but a number of projects were slow going due to mechanisms and policies on land use and management.  Compounding the problem are difficulties caused by the economic slowdown, such as inflation, land acquisition and compensation, and complicated procedures on investment licenses.

To attract more foreign investors, the MPI suggested simplifying investment procedures, reforming the legal framework on mortgage loans, and setting up funds for housing development in specific localities.

Vietnam out of top business rankings

Vietnam has dropped out of the top 50 Best Countries for Business Rankings 2013 released by Bloomberg.

From Southeast Asia, Singapore ranks 8th, Malaysia, 28th and Thailand, 43rd.

Last year, Vietnam stood at 46th position.

According to Bloomberg, this year’s rankings included 161 economies from all over the world.

Countries are rated from 0 to 100 percent on six factors including degree of economic integration (10 percent), cost of setting up a business (20 percent), cost of labour and materials (20 percent), cost of moving goods (20 percent), less tangible costs (20 percent) and readiness of the local consumer base (10 percent).

This year, Hong Kong again took top honours, followed by the US and Japan.

National CPI up 1.25 percent in January

The consumer price index (CPI) in January rose 1.25 percent in January against the previous month, in line with expert expectations.

The figure is slightly lower than the 1.74 percent rise recorded in January 2011 and 1.36 percent in January 2010, according to the General Statistics Office (GSO).

Notably, prices of 10 out of the 11 groups of commodities used to calculate the CPI increased considerably, with tobacco and medical services taking the lead. Only post and telecommunications services fell by 0.05 percent.

Nguyen Duc Thang, a GSO official, said a 9.5 percent rise in hospital fees and medical services was the main cause for the CPI increase in January.

Meanwhile, food and foodstuff prices which were predicted to go up sharply before the traditional lunar New Year (Tet) holiday only inched up 1.34 percent.

However, Thang forecast that chicken will be in short supply in the coming months at a time when Vietnamese people celebrate the Tet holiday.

Last year farmers refused to develop new flocks due to high prices of feed and the low cost of imported chicken.

Following a recent crackdown on illegal imports of discarded chicken, scarcity of chicken on the market has driven up the prices of poultry products.

The GSO suggested that businesses and localities need to stockpile necessities to meet consumer demand for commodities during the Tet holiday and nip any price hikes in the bud.

The Tet holiday will fall on February 10 this year.

Russia-Vietnam trade hits record high in 2012

Two-way trade last year reached more than US$3.6 billion, a record figure so far, Russia’s ITAR-TASS news agency reported.

Of the total, Vietnamese exports rose more than 32 percent to US$2.3 billion, while Russian exports increased merely 16 percent to US$1.3 billion.

The agency said both countries maintained an upward trend in their trade exchange despite the negative impact of the global economic slowdown in 2012.

They recently agreed to implement big investment projects on a titanium slag plant, a power generator manufacturing plant, and a hotel complex in Vietnam.

In Russia they will jointly build light industry enterprises, and electronic appliances manufacturing plants, and exploit coal for export to Vietnam in the future.

ITAR-TASS reported that the 2012 trade figure excluded the value of military-technology exchange and weapon trading agreements, as well as the operational efficiency of the Vietnam-Russia oil and gas joint venture enterprise.

Last year Vietsovpetro pumped up more than 200 million tonnes of crude oil in Vietnam, and more than 2 million tonnes of crude oil in North Russia.

Vietnam, RoK cooperate in support industry

Vietnam and the Republic of Korea (RoK) signed a memorandum of understanding (MoU) in Hanoi on January 24 to promote cooperation in the support industry.

Signatories to the MoU were Le Duong Quang, Deputy Minister of Industry and Trade of Vietnam and Jae-Hong Kim, Deputy Minister of Knowledge Economy of the RoK.

Under the signed document, Vietnamese experts will be invited to training programmes on the support industry in the RoK.

Both sides agreed to strengthen bilateral cooperation in research and development, transfer of advanced technology, and human resource exchange.

Deputy Minister Jae said cooperation projects on support industry will be boosted, targeting industries of Vietnam’s concern such as garments, mechanics, and electronics, which are also strong areas of the RoK.

The same day, the Korea Institute of Industrial Technology and the Vietnam Textile-Garment Institute signed an MoU to implement joint research on development cooperation, organize workshops, forums and exhibitions, and cooperate in human resource training and technology development, as well as providing consultancy for technology investment projects.

Vietnam-Australia trade turnover exceeds US$5 billion

Two-way trade turnover between Vietnam and Australia in 2012 exceeded US$5 billion, up 29 percent from the previous year.

Vietnam’s exports to Australia rose to more than US$3.2 billion, mostly worth of cameras and components (138 percent), petroleum (113 percent), iron and steel (96 percent), pepper (68 percent), means of transport and spare parts (50 percent).

Although Vietnam’s imports from Australia stayed roughly US$18 billion (down 17 percent), two-way trade turnover surpassed the level of US$5 billion.

Vietnam promotes tourism in Russia

The Vietnam National Administration of Tourism (VNAT) has said that it plans to promote tourism in Russia, aiming to welcome 300,000 visitors in 2014.

To realize the target, the administration will participate in the 2013 Moscow International Travel and Tourism Exhibition (MITT-2013) held in Russia from March 20 to 23, the daily Hanoi Moi reported on January 24.

During the exhibition, Vietnamese travel agencies and localities will introduce popular sites of Vietnam, tourism products and services, especially the 2013 National Tourism Year to Russians.

Along with Japan and the Republic of Korea, Russia has emerged as a major market for Vietnam’s tourism industry in recent years.

The market showed a significant increase of nearly 71.5 percent year-on-year in 2012, with 174,000 Russians visiting Vietnam. Their favourite destinations are Khanh Hoa and Binh Thuan provinces in the southern central region.

Cam Ranh International Airport in Khanh Hoa has operated three daily direct flights carrying tourists from Russia’s Far Eastern region from late October until April 2013.

Between 70,000-100,000 Russian holiday-makers are expected to come to Khanh Hoa during the period.

Khanh Hoa still leads the central region in attracting Russian tourists, welcoming more than 53,000 visitors annually.

Boosting exchanges between OVs and businessmen

HCM City will host a get-together on January 28 for Overseas Vietnamese (OV) who return home for the upcoming traditional Lunar New Year (Tet) holiday.

The event’s framework encompasses exchanges between OVs and businessmen and women, stalls showcasing traditional Vietnamese products, and a calligraphy exhibition.

It aims to offer opportunities for OVs and business leaders to meet and foster cooperation for prosperity in the New Year.

Statistics reveal 4.5 million Vietnamese nationals are currently residing in 103 of the world’s countries and territories. As many as two million are originally from HCM City, and most of those now live in developed countries.

In 2012, overseas remittances sent to HCM City were valued at US$4.1 billion—2.4 times higher than the Official Development Assistance (ODA) capital disbursed.

Textile exports to focus on four key markets in 2013

Vietnam Textile and Apparel Association (Vitas) forecasts that this year the main export markets for the country’s garment and textile industry will be the US, Japan, the EU, and South Korea.

Among the four key export markets, the US market will continue to be the largest importer while Japan will possibly surpass the EU to become the second largest with import turnover of about US$2.37 billion, an increase of 18 percent compared to last year.

Until now, most garment and textile producers have received orders to deliver by the end of the first quarter of this year. Some bigger companies have even received orders for the second and third quarters.

According to Vitas, this year the demand for garment and textile products will inch up marginally. Of which, the US market will tick up 3 percent; Japan will surge 18 percent; other markets will climb by about 5 percent, while the EU market will not drop much–unlike previous years.

Kumho leader says will restructure Vietnam investment

President Park Sam Koo of Kumho Asiana Group on Tuesday met with HCMC Chairman Le Hoang Quan to discuss the stake transfer deal on Kumho Asiana Plaza Saigon as part of the group’s investment restructuring plan.

A 50% stake in the commercial center and hotel complex at 39 Le Duan Boulevard in HCMC’s District 1 will be acquired by Asiana Airlines. This was earlier informed by Won Il Woo, president and CEO of Kumho Engineering & Construction, the current owner of the complex.

“I’d like to clarify that this is an internal deal within Kumho as it is being made between its two subsidiaries, Asiana Airlines and Kumho Engineering & Construction,” said Park.

“This is part of the plan for restructuring Kumho’s investment in Vietnam in order to improve competitiveness. A hotel with participation of an airline will perform business better,” he said.

The fact that Asiana Airlines will hold a 50% stake in Kumho Asiana Plaza Saigon will bring benefits not only to Kumho, but also to HCMC. It is because Asiana Airlines is operating the most direct air routes from South Korea to Vietnam, where many South Korean people are living, including over 80,000 in HCMC.

In addition to the stake transfer deal, Kumho is looking for a location to develop a project similar to Kumho Asiana Plaza Saigon in Hanoi. The group will spend an additional US$100 million expanding the scale of its tire plant in Binh Duong during the second phase, while further promoting public transport services of the joint venture Kumho Samco, said Park.

At a meeting with HCMC Vice Chairman Le Manh Ha last Thursday, Won of Kumho Engineering & Construction asked about the necessary procedures under Vietnamese law for the deal between Asiana Airlines and Kumho Engineering & Construction. Ha replied the municipal government would review the project document and then give appropriate guidelines.

After consulting the HCMC Department of Planning and Investment, Chairman Quan at the meeting on Tuesday said: “If there is no problem in the document, it will be handled in a week.”

Completed in October 2009, the US$225-million Kumho Asiana Plaza Saigon project consists of a 21-story hotel of five-star standards with 300 guest rooms and three 32-story office and apartment buildings.

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

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