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Japanese consumers keen on Vietnamese goods

Vietnam’s share of the Japanese consumer market remains modest, making up just 1.3 percent of its total import demand.

The Ministry of Industry and Trade said in the past two months, the country’s exports to Japan reached US$1.87 million, up 0.84 percent against the same period last year.

Among major items were crude oil, seafood, rice, garments and textiles, timber and wood products, and electric cables.

Since 2005, Vietnam’s export earnings from Japan has risen 159.9 percent, from US$4.41 billion, to US$13.05 billion by the end of last year.

Vietnam’s key competitors in the market are China, the Republic of Korea and Indonesia.

In recent years, Vietnam’s garment and textile exports to Japan have grown by 12 percent on average to become the third largest supplier to Japan, just after the US and the EU.

According to the Trade Promotion Agency under the Ministry of Industry and Trade, Japanese consumers have a huge demand for up to US$3.7 billion worth of clothes, of which only five percent are made in Japan. But they are keenly interested in the quality and design of consumer goods for convenience rather than fashion.

Vietnam, Australia hold high-level consultation

Vietnam and Australia held a high-level consultation in Hanoi on March 22, examining Vietnam’s socio-economic development, its opportunities, challenges and development priorities in 2011-2015 and beyond.

Deputy Minister of Planning and Investment Cao Viet Sinh said over the past 20 years the Australian government has maintained high levels of official development assistance (ODA) for Vietnam, focusing on infrastructure construction, human resources development, agriculture and rural development, and increasing the capacity and institutionalisation of the economy.

These Australian ODA-funded projects have made a significant contribution to Vietnam’s socio-economic development, said Sinh.

James Batley, Deputy Director General of the Asia-Pacific and Programme Enabling Group of the Australian Agency for International Development (AusAid), spoke highly of the close Australia-Vietnam relations and pledged to assist Vietnam to fulfil United Nations Millennium Development Goals and other national targets.

Australia will continue to help Vietnam meet its development targets through bilateral and multilateral aid, he said.

Australian ambassador to Vietnam Hugh Borrowman noted that Australia-Vietnam relations have developed well and that besides providing ODA, Australia has drawn up other aid programmes for Vietnam.

Delegates discussed Vietnam’s future challenges and priorities to political, socio-economic development, time frames, and obstacles to its ongoing economic restructuring, primarily for public investments and State-owned businesses.

They also reviewed two years of implementing the 2010-2015 Australia-Vietnam Joint Aid Programme Strategy, and Australia’s new aid policy, as well as progress in realising the Busan Partnership for Effective Development Cooperation Agreement.

ANZ named Vietnam’s best retail bank

ANZ Vietnam, an affiliate of the Australia and New Zealand Banking Group (ANZ), has been recognised as the “Best Retail Bank in Vietnam” by the Asian Banker magazine.

Addressing the awards presentation ceremony in Seoul on March 21, ANZ Vietnam’s Head of Retail Banking Duong Duc Hung said: “We differentiate ourselves from the competition through our clear and focused strategy and our successful execution of targeting Vietnam’s affluent and emerging affluent market segments. Our significant progress in 2012 has laid a solid foundation for our ambitious growth plan in 2013 and beyond.”

“This year marks the 20th year of ANZ’s operations in Vietnam, a milestone clearly demonstrating the sustainability of our franchise throughout economic cycles. We will continue investing in our people, technology, and operations to deliver superior products and services to our customers,” he added.

ANZ Vietnam outstanding performance in 2012 involved a remarkable improvement in its retail financial performance thanks to upscaling its sales and operations while keeping costs and risks well managed. ANZ’s consistent leading position in the wealth management space and strong growth in its mortgage and credit card businesses helped ANZ maintain its winning edge over its peers.

ANZ was one of the first international banks to operate in Vietnam, establishing a Vietnamese office in 1993. It has expanded to its 10 current Vietnamese branches and transaction points that offer a full range of services including retail banking, institutional banking, and commercial banking catering to small, medium, and emerging businesses.
In February 2013, ANZ won the Visa Vietnam “Leadership in Card Activation” Bank Award. Trade Finance Magazine voted ANZ Vietnam the “Best International Trade Bank in Vietnam” in 2012.

Exports expected to receive a boost

Vietnamese trade counsellors overseas on March 22 proposed a number of measures to boost exports in the context of the slow economic recovery.

Local businesses have so far this year encountered numerous difficulties in seeking overseas outlets for their products, while Vietnam’s major markets such as the US, EU and Japan are struggling to settle their internal affairs.

The US economy is forecast to recover slowly; the EU is still bearing the brunt of its prolonged debt crisis, and the Japanese economy is not out of the woods yet.

In addition, many countries are setting up technical barriers through exchange rate adjustment and anti-dumping lawsuits to protect domestic production.

Nguyen Trung Dung, trade counsellor to Japan, suggested that the government encourage Japanese businesses to joint venture with their Vietnamese counterparts in processing agro-forestry and fisheries products to take advantage of Japan’s advanced technology and lower the ratio of raw exports.

Vietnam and Japan need to work together to simplify import-export procedures, he said.

Vietnam aims to obtain US$29 billion in two-way trade with Japan (up 16 percent over 2012), US$15 billion of which will come from exports (up 20 percent).

Nguyen Bao, trade counsellor to Australia, said the US$5 billion two-way trade turnover last year ranked Australia 9th among Vietnam’s business partners. The two economies can support each other, with Vietnam exporting its key items such as garments, footwear and seafood to Australia while importing some of Australia’s key products like wheat, milk, and timber.

Nguyen Thi Hong, Vice Chairwoman of the HCM City Municipal People’s Committee, said this year the city will continue to ease difficulties for businesses to facilitate their operations. Its trade portal run by the Investment and Trade Promotion Centre (ITPC) will be upgraded to showcase products and provide up-to-date information for local and foreign businesses to seek partnerships and expand markets.

The city will promote links between businesses and banks and between local businesses and trade counsellors overseas, especially in key markets, to boost trade promotion.

Trade counsellors and local businesses exchanged views on export trends in 2013 and shared experience in penetrating key markets.

Despite the current economic difficulties, Vietnam’s export turnover totalled US$114.57 billion in 2012. Ho Chi Minh City’s exports exceeded US$29.9 billion, 6.3 percent higher than in 2011.

The forum, held at HCM City’s White Palace Convention Centre on March 22, attracted representatives of the Ministry of Industry and Trade, Vietnamese counsellors to Australia, Japan, and Myanmar, and representatives from leading export enterprises.

Japan committed US$2 billion ODA to Vietnam

The Japanese government has agreed to grant 202.926 billion yen (more than US$2 billion) in official development aid to Vietnam in the 2012–2013 fiscal year.

The agreement formalising the pledge was signed in Hanoi on March 22 by Japanese Ambassador to Vietnam Tanizaki Yasuaki and Vietnamese Minister of Planning and Investment Bui Quang Vinh.

Under the agreement, 12 Japanese-funded projects, worth a total US$2.16 billion, are seeking the participation of Japanese bidders.

Eleven of these projects are expected to receive investment capital through the Japan International Cooperation Agency (JICA), about to sign its own funding agreement with the Vietnam Ministry of Finance. The remaining project—the first phase construction of the O Mon 3 thermal electric power plant—will need to wait for loans because of certain procedures as yet incomplete.

Four of the projects will enjoy a preferential interest rate of 0.2 percent/year. These include the construction of Cai Mep Seaport in Ba Ria-Vung Tau, the construction of the Nhat Tan bridge and urban railway route in Hanoi, and the upgrade of the Hanoi-HCM City railway route. However, all four of the preferenced projects must involve Japanese bidders in accordance with the special condition the JICA imposes on its economic partners.

Another project on climate change adaptation will also receive an incentive interest rate of 0.3 percent/year over a period of 30–40 years.

The remaining projects will accept the standard rate of 1.4 percent/year.

Japan resumed its ODA loans to Vietnam at the end of 1992 and is currently the Southeast Asian country’s largest ODA donor. So far, nearly 2,118 billion Japanese yen in ODA has been granted to Vietnam, primarily in the fields of infrastructure development and climate change response.

Fishery sector aims for stronger capacity

Domestic and foreign experts and businesses in the fishery sector have discussed measures to improve the sector’s development capacity, with a focus on observing trade standards.

At a workshop held recently in Hanoi, delegates agreed that Vietnam has the ability to provide a stable supply of premium seafood products in line with the Government and businesses’ commitments on food safety and environmental responsibility.

However, the sector is struggling to overcome domestic difficulties, as well as barriers into the global market.

Over the past year, the fishery sector has become one of Vietnam’s key economic industries. Vietnamese seafood has been shipped to 156 countries worldwide, with export turnover reaching US$6.1 billion last year.

Vietnam is one of three countries with a stable labour force, and has bilateral cooperation agreements with many other countries in this sector.

The workshop was jointly held by the National Agro-Forestry-Fishery Quality Assurance Department, the UN Industrial Development Organisation and the Japan Trade Promotion Organisation.

Consumers encouraged to buy local products

The campaign “Vietnamese people use Vietnamese goods” has received a warm response from local enterprises and consumers since its launch by the Party’s Political Bureau in 2009.

Ninety percent of consumers in Ho Chi Minh City and 83 percent of those in Hanoi surveyed so far this year said they will use more Vietnamese goods.

Confidence in locally-made commodities has grown thanks to hundreds of trade fairs bringing Vietnamese goods to rural areas, and a scheme showcasing high-quality Vietnamese products in all provinces across the country.

Vu Kim Hanh, General Director of the Business Research Centre and Business Support Agency (BSA), said that the campaign has brought practical benefits for domestic businesspeople.

There are greater opportunities to promote their strengths in marketing strategies, market expansion, production line modernisation, and creation of new and premium products at a competitive price, meeting domestic demand and well suited for export.

She added that the campaign has left a strong impression on the public, changing people’s shopping habits and stimulating interest in domestic brand names.

Vietnamese products occupy up to 90 percent of space at big shopping malls, like Co.op Mart, Maximark, Citimart and foreign-invested supermarkets as Lotte Mart, Big C, and Metro.

However, Hanh also pointed out the difficulties that Vietnamese businesses encounter, including poor and ineffective competitiveness among retail businesses, poor supply and quality of products, and unremarkable packaging designs.

Weak management, substandard equipment, unprofessional sales staff and the commercial fraud situation in some businesses are attributed to discouraging domestic consumers from local products.

Hanh suggested that all local administrations pay due attention to intensifying communication campaigns, especially in rural areas, and gradually forming a buy-local consumer culture.

Nguyen Huu Thang, Chairman of the Management Board of Hanoi Trade Corporation, said that businesses not only need to improve their models and reduce production costs, but also need to understand consumer psychology and taste.

The People’s Committees should mobilise small businesses to work with producers and distributors to promote the consumption of Vietnamese goods in the local market.

The State will devise specific policies to support businesses in developing a modern retail system and promoting Vietnamese goods in traditional markets, which also requires the effort of market managers to prevent the import of goods with unknown origins, he added.

Nguyen Lam Vien, Vice President of the Business Association of High-Quality Vietnamese Goods, said that his association is promoting a cooperation programme with the Department of Local Industry under the Ministry of Industry and Trade in order to connect rural industrial producers with the market.

The Association will pilot a programme to upgrade the district markets in seven provinces and cities in the southern and central regions.

The programme will also focus on promoting Vietnamese goods’ penetration into ASEAN and Chinese markets by enhancing links with multi-national trade commissions and business associations in Vietnam.

Central coast focuses on tourism development

The central coastal region should enhance its sea-borne tourism potential and natural resources to attract investment and development, said Nguyen Ba Thanh, Head of the Central Coastal Regional Coordination Board.

Thanh, who is also Head of the Party Central Committee’s Internal Affairs Commission, told a March 22-23 conference that the central coastal region has great potential for socio-economic development but achievements have so been below expectations.

He said the region needs to work out measures to tackle problems related to infrastructure, incentive policies and mechanisms, and human resources.

Ministry of Planning and Investment Development Strategy Institute director Bui Tat Thang said the most prominent advantage of the region is sea-borne tourism.

Along 1,400km of coastline, nine provinces in the region stretching from Thua Thien-Hue to Binh Thuan boast beautiful beaches, many islands and four world cultural heritage sites.

The region also has abundant natural resources such as titan, iron, aluminium and oil.

To date, six economic zones and 34 industrial zones have been established and connected to the seaport and domestic and international airports.

Statistics showed investments in the region during 2007-2012 hit VND605 trillion (U$28.8 billion) with an annual growth rate of 11 percent.

As of 2012, the region attracted 709 foreign direct investment projects with a total registered capital of US$25.25 billion, making up 12.14 percent of the country’s registered FDI.

The average GDP growth rate per capita was 12.5 percent in 2006-11, nearly doubling the country’s average.

Deputy Minister of Planning and Investment Dang Huy Dong told the conference that enhancing the regional link is the optimal solution to turn the region into a single economic space to exploit the competitive advantages of each locality.

He urged the provinces to complete infrastructure in economic and industrial zones, provide support to investors by speeding up land clearances, and attracting investment corresponding to regional competitiveness.

Head of the Consultative Group for Development of the Central Region Tran Du Lich said connectivity between the deep-water port, airport and economic and industrial zones also needs to be enhanced to reduce transport costs.

He said mechanisms and policies should focus on investments in key industries.

At the two-day conference, investors committed more than US$30.8 million to the central region. Nine projects in regional provinces and cities received investment licences worth a combined value of nearly US$197 million.

The Bank for Investment and Development of Vietnam also signed credit contracts with enterprises totalling about US$221 million.

March CPI drops 0.19 percent

Vietnam’s consumer price index (CPI) in March fell just 0.19 percent from February, bringing the three-month price index to 2.39 percent, according to the General Statistics Office (GSO).

The decline reflects the true nature of the market trend as the prices of commodities are stabilized due to a low consumer demand after the traditional Lunar New Year (Tet) holiday.

As a result, many businesses are now struggling with high inventory levels.

The March CPI represented a year-on-year increase of 6.64 percent, or 6.91 percent higher than last year’s average.

Food and foodstuff prices fell dramatically by 0.53 percent, while beverages and tobacco prices decreased slightly by 0.08 percent.

Transport and telecom service costs dropped by 0.25 percent and 0.05 percent, respectively.

The GSO said that rice prices in the world market are plummeting, and the export price of Vietnamese rice has dropped US$10-20 per tonne.

Overall, economists say the low inflation in March was mainly due to the weak supply and demand as the Government continued to prioritize its goals of controlling inflation and tightening monetary and financial policies.

Local gold prices also decreased remarkably following globl fluctuations as well as the State Bank of Vietnam (SBV) policy for managing gold bullion.

In the first quarter of this year, the gold price in Vietnam dropped 0.8 percent while the Vietnam dong (VND) and US dollar (USD) exchange rate dropped 0.05 percent compared to the previous year.

Business need to safeguard themselves

Anti-dumping and anti-subsidy lawsuits are posing a big challenge to Vietnam during its international integration process.

The country has been faced with 50 anti-dumping and four anti-subsidy lawsuits since the first one filed by Columbia in 1994, according to the Vietnam Chamber of Commerce and Industry (VCCI).

Many global economies have recently used commercial safeguards as a new technical barrier to their protect domestic production.

As a result, many Vietnamese economic sectors are struggling against high anti-dumping and anti-subsidy tariffs on commodities imposed by importing countries.
Seafood is one of Vietnam’s key hard currency earners (Photo: internet)

In its latest administrative review, the US Department of Commerce decided to levy new, much higher margins on frozen Vietnamese fish fillets imported into the US.

Nguyen Duy Khien, Head of the American Market Department under the Ministry of Industry and Trade, points to the fact that the number of lawsuits will increase as the economy continues to encounter difficulties.

Countries that maintain large trade exchanges with the US usually face more lawsuits, and Vietnam is no exception. It has so far dealt with seven anti-dumping lawsuits instigated by the US.

An increase in bilateral trade with Brazil means Vietnam is encountering even more lawsuits. Among the goods Brazil imported from Vietnam in 2012, footwear accounted for 36 percent, machinery 16 percent, seafood 10 percent, household utensils 7 percent, rubber 6 percent, and garments and textiles 3 percent.

In 2011 alone Brazil sued Vietnam for dumping its textiles on its market, and the number of legal proceedings, focusing on imports of stainless steel, automobile and bike tyres, increased to three in 2012.

Domestic production under pressure

Meanwhile, several domestically-manufactured products have come under great competitive pressure from similar imports.

Steel is a case in point. Vietnam imported nearly 1.5 million tonnes of steel from China between January-November 2011. The figure rose to 2.148 million tonnes a year later, with hot rolled coils skyrocketing 170 percent, hot rolled sheets 199 percent, and rolled wire 557 percent.
Businesses are advised to research their importers thoroughly (Photo:internet)

Building glass and vegetable oil are also in the same fix. Large amounts of imported vegetable oil put domestic production at a disadvantage. Statistics show that Vietnam purchased 291,230 tonnes of vegetable oil in 2011, and which doubled in the following year. In late 2012, domestic vegetable oil producers lodged an appeal to the Vietnam Competition Authority, proposing that it implement commercial safeguards for their product.

Experts suggest that businesses only apply safeguard measures if imports affect domestic production. Vietnam has issued a number of legal documents, including the 2004 National Assembly anti-dumping and anti-subsidy ordinances, enabling businesses to sue foreign exporters if their exports damage domestic production.

The Ministry of Industry and Trade has warned businesses to thoroughly research the US federal and state legal systems before they sign trade contracts. Price competition usually results in anti-dumping lawsuits.

To this end, Vietnamese businesses are advised to improve their production capacity by cutting costs, material inputs, and fuel consumption, in addition to increasing labour productivity. Comprehensive production records should also be kept in case a lawsuit is filed.

Businesses are also encouraged to familiarise themselves with their counterparts before signing any wholesale contracts.

Experts say, in order to take advantage of the opening up through Vietnam’s global integration, domestic businesses need to carefully study the markets and follow developments closely. They also need to strengthen links with other businesses, craft associations and authorised agencies to deal with problems that may arise.

Trade deficit returns on high imports

Imports exceeded exports in March by US$300 million, marking the return of the trade deficit in Vietnam after the country experienced a trade surplus in the first two months of this year and in 2012.

The country exported US$11 billion worth of goods in March and imported US$11.3 million in the same period, according to the General Statistics Office (GSO).

Head of the GSO’s trade department Le Thi Minh Thuy attributed the trade deficit to the increased import demands of domestic businesses, while the export value of some key products declined considerably.

However, she said the trade balance in the first three months remained positive with exports exceeding imports, at US$29.687 billion and US$29.206 billion, respectively.

Most of the trade surplus came from the foreign direct invested sectors, with export value at US$19.256 billion and import value at US$16.140 billion, up 25.6 percent and 25.5 percent.

The domestic sector’s export value hit US$10.431 billion in the same period, and import value reached US$13.066 billion.

Export earnings of electrical products and components alone reached US$7.2 billion, of which mobile phones accounted for US$4.5 billion.

The GSO said some key products saw falls in export value during the period, including seafood (US$1.26 billion, down 2.3 percent), coffee (US$1.92 billion, down 1.5 percent) and rubber (US$522 million, down 16.7 percent).

Items that posted high import value during the period included garments and textiles (US$3.8 billion, up 18.5 percent), footwear (US$1.7 billion, up 14.7 percent), and crude oil (US$1.8 billion, up 13.1 percent)

The country achieved an annual trade surplus in 2012 for the first time in two decades after three years of narrowing deficits, as the slowest economic growth in 13 years curbed import demand.

Telco titan told to focus on core business

The Ministry of Information and Communications has urged the country’s largest telco VNPT to focus on its core business and tap its potential to stay profitable in the increasingly competitive market.

The ministry, which recently took control of the Vietnam Post and Telecommunication Group (VNPT) under Government circular 90/2012/ND-CP, said it would carry out inspections of most of VNPT branches.

The move follows turbulence in VNPT over recent years.

The country’s oldest telecom service provider last year for the first time was surpassed by its rival military-run Viettel in profit and turnover.

VNPT in January adjusted its profit in 2012 to VND8.66 trillion (US$412.38 million) from the previously reported VND8.5 trillion (US$404.76 million).

However, the adjustment was unable to help VNPT to regain its crown as Viettel earned a profit of VND27 trillion (US$1.3 billion), up from VND20 trillion (US$953 million) in 2011 and triple VNPT profits.

Viettel’s earnings through December totalled an estimated VND140 trillion (US$6.6 billion), compared to VNPT’s projected total for the year of VND130 trillion (US$6.1 billion).

In addition, VNPT earnings depend on its two mobile network operators, MobiFone and Vinaphone, that contributed a turnover of VND66.3 trillion (US$3.2 billion), accounting for more than half of the group’s total.

Vinaphone earned revenue of VND22.579 trillion (US$1.09 billion), while Mobifone contributed the other 60 percent.

FDI capital sees sharp rise in March

Vietnam attracted US$5.4 billion in foreign direct investment between February 20-March 20, a monthly record figure.

Of the total, US$2.93 billion came from newly-licensed projects, a year-on-year increase of 2.2 percent, and the remaining US$3.10 billion was additional capital from operational FDI projects, up 277 percent.

The March figure helped bring the total FDI capital of the past three months to US$6.034 billion, according to the General Statistics Office (GSO).

Processing and manufacturing attracted most investment with 84 new projects, capitalized at US$5.539 billion, accounting for 91.8 percent of the total.

Real estate came in second, recording newly registered and added capital of US$249.84 million, or 4.1 percent of the total.

It was followed by wholesale, retail and repairs with 29 new projects valued at US$85.2 million.

Japan was the largest investor in Vietnam during the first quarter of this year, pouring US$3.16 billion into the country. Singapore and the Republic of Korea were the second and third biggest investors, respectively.

Thanh Hoa province has attracted the most foreign investment thanks to the added US$2.8 billion from the Nghi Son oil refinery project, followed by Thai Nguyen, Binh Duong, Dong Nai and Haiphong.

As of March 22, US$2.7 billion in FDI has been disbursed, an increase of 7.1 percent from a year earlier.

Vietnam-Chile trade exchange exceeds US$600 million

The two-way trade turnover between Vietnam and Chile hit more than US$606 million in 2012, up 24.5 percent compared to last year’s figure.

In 2012, Vietnam’s exports to Chile earned US$189.8 million, a rise of 27 percent, while the country’s imports from the South American nation reached US$416.2 million, accounting for a year-by-year increase of 23.4 percent.

Key export items included footwear, garments and textiles, cement, frozen fish, coffee and rice.

It is expected that the trade exchange between the two countries will rise sharply in the near future after the bilateral Free Trade Agreement (FTA) between Vietnam and Chile takes into effect.

FDI companies dominate cattle feed market

In the animal husbandry industry, cattle-feed manufacturing is considered the most lucrative sector, however, Vietnamese companies have not until now been able to develop or access its full potential in the market.

Like companies in other sectors, cattle-feed manufacturers also faced economic difficulties. This year, with fierce competition from FDI companies, the situation has become even more drastic.

According to Nguyen Thanh Phuc, a representative of a cattle-feed company, it is impossible for local producers to compete with foreign cattle-feed companies, as the former have to cope with higher interest rates than the latter.

For instance, in 2011, local companies paid interest rate at 18-24 percent per annum, and although loan interest rates declined last year, they still remained at a high 15 percent per annum. This year, just a few companies can access loans at an interest rate of 10 percent per annum.

On the other hand, loan interest rate for foreign producers was around 3-5 percent per annum or even lower, not including financial support from parent companies.

A shortage of capital or high-interest capital has made local cattle-feed producers hesitate in buying large amounts of material stock. The Vietnam Feed Association said that last year local firms had to import 8 million tons of material at a cost exceeding US$3 billion.

Consumption of cattle-feed was also not steady which prevented producers from confidently increasing production. Moreover, local producers have to pay value added tax and land rental while foreign producers are free of these overheads.

Le Ba Lich, chairman of the Vietnam Feed Association, said that the Government and credit institutions should have favorable policies for local firms in lending capital and help them build warehouses for temporary material stockpiling.

In addition, firms should upgrade their facilities and coordinate with each other to strengthen their power. In reality, there were still some companies in the local industry that have outstanding potential and have the ability to take on foreign producers, such as Vina Cam Company and Hong Ha Company.

With annual average revenue of $6 billion and growth of 13-15 percent, Vietnam’s cattle-feed market has become a lucrative sector for foreign groups to develop. Currently, there are more than 230 cattle-feed plants across the country, of which 58 plants belong to foreign-invested companies with production accounting for 60 percent of total production in the country.

Familiar names, such as CP Vietnam, New Hope, and Cargill all have plans to open more plants. Particularly, CP said that by 2014, it would build six more cattle-feed plants in Vietnam. Similarly, New Hope also plans to build around 5-6 plants in the coming years.

Last year, 95 percent of FDI capital for husbandry industry was pumped into the cattle-feed manufacturing sector; 4 percent for producing breeding stock; and 1 percent for other sectors in the animal husbandry industry.

Lately, Japanese cattle-feed producer Kyodo Sojitz officially opened in Long An Province at a cost of $24 million and capacity of 200,000 tons annually, making this the first Japanese cattle-feed company in Vietnam.

More foreign plants will lower market share of local companies. Some plants of Vietnamese firms will have to stop production or shift to another business because they cannot withstand pressure from foreign companies, causing the country’s animal husbandry industry to depend on FDI companies.

At present, the cost for cattle-feed accounts for 70 percent of cost price for breeding. Once dependent on foreign companies, the local market will be easily controlled. For instance, at the beginning of this year, CP irrationally raised the price of poultry eggs.

Some animal husbandry companies and cattle-food producers have started to develop farm-to-table models to reduce dependence, for which Vissan has already made a mark. However, capital and experience remains a tricky question for most local firms.

Forum sees growth potential for exports from Vietnam

At an Export Forum hosted by the Investment and Trade Promotion Center in Ho Chi Minh City on March 22, delegates were of the view that this year exports from Vietnam show much promise and growth potential in the global market.

According to Tran Anh Tuan, Deputy Minister of Industry and Trade, the U.S., EU and Japan are offering good deals and growth opportunities for Vietnamese businesses.

The quality of several export items like garments, footwear, seafood, and wood products has already been well accepted. Other products like electronic components, cell phones, mechanical items, transport and machinery might grow in the future.

Nguyen Trung Dung, Commercial Counselor of Vietnam in Japan, said that Vietnam’s export potential is huge in items like garments, seafood, cashew nuts, vegetables and fruits, all of which are popular in the Japanese market.

Vu Cuong, Commercial Counselor of Vietnam in Myanmar, said that businesses now have a good opportunity to broaden their market base in Myanmar, where people highly appreciate Vietnamese goods.

Ha Noi to foster production growth

Ha Noi is setting up a new group that will include representatives from local business associations in a bid to remove obstacles to business development and foster growth in production.

The new standing board would hold its first meeting next month, said chairman of the Ha Noi People’s Committee Nguyen The Thao at a conference held in the capital yesterday.

Addressing the conference on measures to boost business growth, Thao said that the municipal authorities would invite representatives from business associations of Ha Noi to take part in the board.

In addition, the city would organise dialogues with businesses to find better ways to spur production as the domestic and global economy was forecast to continuously face difficulties.

Thao said to help local businesses who were facing ever increasing inventories, the city would set aside VND50 billion for trade promotion this year to help them find customers.

The city has provided aid of VND328 billion for firms to supply necessary commodities in the city’s pricing stabilisation programmes, he said.

The city will also support prioritised businesses in exports, high-tech, rural and agricultural development and support industries as well as aid small and medium-sized businesses with a VND100 billion preferential interest rate package, he announced.

Under the scheme, Sacombank, Military Bank and VIB Bank are setting aside VND5 trillion for businesses at low interest rates.

To support businesses in expanding production, the city is also implementing a post-investment preferential interest rate package worth VND100 billion in addition to setting another VND80 billion aside for a credit guarantee fund for small and medium-sized businesses.

To reduce high inventories in the cement and steel industries, the city would invest more in building more transport infrastructure in rural areas as well as diversifying the investment methods of BOT (built-operation-transfer) and PPP (public-private partnership) development models.

As for the real estate industry, city authorities will consider investor proposals of converting commercial apartments into social housing and resettlement housing for civil servants.

According to statistics from the Ministry of Construction, the capital currently has roughly 5,789 vacant apartments.

To reduce supply of commercial apartments, authorities will not consider all investment, construction and trading proposals for commercial housing projects in the city from now to December 31, 2014.

The city would also work on providing low-interest rate loans for low-income people, civil servants and officials in the armed forces to buy or rent social housing or commercial housing (of less than 70 square metres with prices of less than VND15 million per square metre).

To further support real estate businesses, Ha Noi authorities will direct commercial banks to continue funding uncompleted property projects.

Owners of housing projects for sale, rent or infrastructure trading that are in financial difficulties may also benefit from an extension for land-use fee payments.

Central Provinces join hands in investment projects

Nine central coastal provinces from Thua Thien-Hue to Binh Thuan together hosted a conference in Da Nang City on March 21 and 22, to promote investments in the entire region as a coordinated effort.

Nguyen Ba Thanh, head of the Central Committee’s Internal Affairs Commission, said that potential and advantages of the central coastal regions have not been fully exploited as yet.

He called on economists, researchers, local and central authorities and investors to join hands to put best foot forward in developing, tapping and marketing the available resources.

One representative of the Ministry of Planning and Investment said that besides Government assistance, local authorities have taken steps to develop coastal urban areas like Chan May-Lang Co, Da Nang, Hoi An, Van Tuong, Quy Nhon, Tuy Hoa and Nha Trang. This has created a climate for further development in each coastal province and has also boosted the regional economy.

So far, this region has six economic and 34 industrial zones near deep-water ports like Chan May, Tien Sa, Ky Ha, Dung Quat, Quy Nhon and Vung Ro.

However, the central coastal region faces several disadvantages in natural as well as socio-economic conditions.

According to Dr. Tran Du Lich, deputy head of the National Assembly Delegation in Ho Chi Minh City, the central coastline regularly suffers storms and flooding and the land is not too fertile either, making it the poorest region in the country. Deforestation and excessive hydropower development have worsened threat of flooding and water shortage.

In addition, there are overlapping key economic industries in localities in the central coastal region which has led to conflicts in dispersal of investment funds and growing competitive jealousies.

Dr. Bui Tat Thang, head of the Development Strategy Institute, proposed that relevant sides improve seaport and traffic infrastructure, especially inter-provincial and inter-regional traffic systems.

The development of deep-water ports, international and national airports should be in accordance with construction of economic and industrial zones to boost connection between the northern and southern regions, and between the Central Highlands and nations in the Greater Mekong Sub-region, he said.

Dr. Thang said that the most outstanding potential of the central coast is sea tourism and provinces have taken advantage of this potential quite well.

At the conference, local leaders showed a determination to join hands to attract investments and bring a new look to the entire region.

They called for more investments for key projects in the region and prioritise projects with higher socio-economic need, environment-friendly technology, more human resource development and inter-regional impact.

Activities, mechanisms and policies to promote investments from abroad must be transparent and unanimous; based on potential, advantages and benefits for the entire central region.

Gross Domestic Product (GDP) grew 8.82 percent to reach VND87.27 trillion in the central coastal regions last year, accounting for 14.21 percent of the country’s GDP.

Last year’s GDP per capita was VND30 million.

Total export value was estimated at US$5.13 billion, accounting for 4.48 percent of the country’s exports. The region received nearly 17 million visitors, of them four million were foreigners.

Central coastal provinces have 705 foreign direct investment projects with total registered capital of $24.57 billion.

Most int’l visitors want to return to Hanoi

More than 80 percent of foreign tourists to Hanoi said they want to return to the capital city after their first visit, according to a municipal survey.

The Hanoi Department of Culture, Sports and Tourism surveyed a total of 1,420 visitors at Noi Bai international airport and various cultural and historical relic sites in city.

About 81.32 percent described the city as safe and attractive due to local hospitality and convenient shopping.

However, many complained about environment-related issues, traffic infrastructure, and the behavior of some taxi drivers, street vendors, and salesclerks.

The municipal Department for Culture, Sports and Tourism is taking measures to improve its tourism profile  by building more parking lots, improving signage, providing more public services and changing the behavior of service providers.

The Department will also increase its supervision of travel agents, tour organisers, and hotels to ensure better quality services for visitors at reasonable prices.

Last year, Hanoi received more than 2.1 million international arrivals, and is expected to welcome 2.25 million foreigners by the end of this year.

Central Coastal Region needs focus on economic zones

The Central Coastal Region should focus on the development of economic zones as they have proved effective in luring foreign direct investments, agreed several delegates on the last day of the two-day conference on investment promotion, held in Da Nang City on March 22.

According to Dr. Bui Tat Thang, head of the Development Strategy Institute, while industrial zones have attracted low investments, economic zones have shown encouraging results.

Six out of 15 economic zone projects approved by the Government have been built over an area of 123,500 hectares in the Central Coastal Region, which include Chan May-Lang Co, Chu Lai, Dung Quat, Nhon Hoi, Nam Phu Yen and Van Phong.

These economic zones are fully operational and have attracted 384 projects with total registered capital of US$28.39 billion. Total production value in these zones reached VND150 trillion ($7.17 billion) in 2011, accounting for 85.4 percent of the production value of 15 economic zones in the country.

Delegates at the conference therefore emphasized the need for the Central Coastal Region to focus more on developing economic zones to attract investments and create a larger industrial production base.

At the conference, delegates also mentioned that the Central Coastal Region had rushed to open industrial and economic zones without   calculating their effectiveness.

Several areas have demarcated hundreds or even thousands of hectares of agricultural land for this purpose, sending farmers to eke out a living elsewhere. Some projects have taken possession of this land but have let it lie undeveloped due to lack of investments, causing much waste.

The Central Coastal Region should once again replan economic and industrial zones to gain better effectiveness.

Dr. Tran Du Lich, deputy head of the National Assembly Delegation in Ho Chi Minh City, said that provinces should clearly determine their roles and advantages to find a productive development strategy.

For instance, Da Nang City should focus on the high technology sector while Quang Nam Province should develop in the automobile industry sector.

Quang Ngai Province must focus on oil filteration; Binh Dinh Province on wood processing; and Khanh Hoa Province on shipbuilding.

Ninh Thuan Province must head towards environment-friendly and nuclear energy; and Binh Thuan Province can easily boost agro-aqua-forestry processing.

This development strategy will help lure potential investors and create a growth environment in each province of the Central Coastal Region, he said.

$10 million to protect critical ecosystems in Southeast Asia

The Critical Ecosystem Partnership Fund has committed to provide another US$10 million in grants to address the environmental crisis engulfing mainland Southeast Asia.

The ground-breaking biodiversity fund was launched in 2008. During the first phase, $10 million was invested in efforts to conserve the critical ecosystems in the Indo-Burma Hotspot, which includes the Irrawaddy, Thanlwin (Salween), Chao Phraya, Red, Pearl and Mekong Rivers and Tonle Sap Lake system.

Collectively, these systems sustain the economy, cultures and biodiversity of one of the biologically richest and most densely populated regions on earth.

The funding strategy was developed by hundreds of conservationists and researchers from Cambodia, Laos, Thailand and Viet Nam.

Past grants were used for many projects, such as one that employed community rangers to address threats to the Saola, one of the rarest animals on Earth, found exclusively near the border of Viet Nam and Laos.


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