Home » Business » BUSINESS IN BRIEF 28/11

Assoc. wants furniture quality higher to safeguard consumers

The Handicraft and Wood Industry Association of HCMC (Hawa) has petitioned the Ministry of Industry and Trade to set specific criteria on the quality of wooden products to protect the health of consumers.

Huynh Van Hanh, vice chairman of the association, said the proposal is among many suggestions which Hawa has submitted to Deputy Minister of Industry and Trade Tran Tuan Anh during his business trip to the association on Wednesday. Hawa in the petition proposed the ministry apply standards on formaldehyde and lead residue in woodworking products and control products imported via cross-border trade as well as raw materials for export. Such chemicals are often used in glue during wood processing.

The petition is drafted based on criteria set for Vietnam’s wooden products bound for choosy markets like the United States and Europe.

Hanh noticed the price difference between materials with high risks and safe ones is not considerable, so wood processors need to attend to this.

“The problem is that local makers and importers are yet to be aware of using safe materials to protect customers,” Hanh noted. He called for relevant ministries and agencies to launch compulsory health safety thresholds.

Meanwhile, a local official said the nation had already issued and applied national technical criteria for wood, plywood and artificial hardboards along with many other quality standards. Trinh Minh Tam, deputy director of the city’s Department of Science and Technology, in a document sent to Hawa said Vietnam has also issued technical standards for plywood and other wood materials imported into the country.

Conditional cashew export seen hitting small traders

If the proposal that only cashew producers with an annual capacity of 2,500 tons or above are qualified for export was passed, 150 cashew traders, almost half of the total, would have to leave the playground, according to the Vietnam Cashew Association (Vinacas).

A senior source from Vinacas said the association had sent a petition to the Ministry of Agriculture and Rural Development and the Ministry of Industry and Trade calling for reconsideration before the draft decree on cashew trading and export is submitted to the Government.

“The proposal that an output of over 2,500 tons per year should be used as the main condition for cashew export was made by the club of 20 largest cashew exporters (G20) and Vinacas agrees with this proposal,” said the source.

The number of unqualified cashew exporters will likely exceed 150. If dumping and sale of low-quality products were not stopped, Vinacas would impose stricter requirement to further bring down the number of cashew exporters.

Vinacas’s purpose when making this proposal is to cut the number of cashew exporters to 75 in the coming years in order to help Vietnam control cashew prices in the world’s market.

Vinacas came up with the idea of conditional cashew export in early 2012. However, the association did not introduce any specific conditions back then.

In fact, not only Vinacas, but the Vietnam Coffee and Cocoa Association (Vicofa) and the Vietnam Association of Seafood Exporters and Producers (VASEP) also want to turn their businesses into conditional ones.

Nevertheless, the conditions set by Vicofa to reduce the number of coffee exporters from 150 to 100 faces opposition of small traders that did not export more than 5,000 tons per year in two consecutive years as required.

So far, only rice export has been turned into conditional business under Government Decree 109, aimed at pulling down the number of rice exporters from 262 to 100. However, 150 rice traders remain qualified for export.

Decree 109 fails to obtain its goal, so other sectors should think carefully if they really want to limit the number of qualified exporters, said deputy agriculture minister Diep Kinh Tan.

As of end-October, 181,000 tons of cashew nuts had been exported, bringing in US$1.22 billion, up 25.8% in volume and 2.1% in value. In the first nine months, export cashew prices averaged out at US$6,774 per ton, a fall of 18.2% year-on-year.

Vietnam’s bond market grows the fastest in East Asia

Vietnam had the fastest growing local currency bond market in emerging East Asia in the third quarter of 2012, said the Asian Development Bank (ADB) in its latest Asia Bond Monitor released on Thursday.

At the end of September, Vietnam had US$21 billion in outstanding bonds, growing 21.4% year-on-year. On a quarterly basis, however, the market shrank by 2.7% with both the government and corporate bonds volumes smaller at the end of September compared with the end of June.

The quarterly drop in outstanding sovereign bonds came because of a 62% drop in outstanding State Bank of Vietnam’s bills. However, the Government bill and the government bond markets were larger, with the government pursuing fiscal stimulus policies to offset the impact of the global crisis on Vietnam’s exports.

ADB warned that emerging East Asia’s local currency bond markets continue to expand and are performing well, but risks loom large on the horizon.

“There are a number of downside risks to the local bond markets. The U.S. could fall over the fiscal cliff and the new Chinese leadership has to deal with slowing growth in the world’s second largest economy,” said Iwan Azis, head of ADB’s Office of Regional Economic Integration.

“A surge in volatile capital inflows and rising inflation in the region are also potential threats,” he underscored.

Volatility spillovers from mature markets to local bond markets are another major risk. The report showed that external shocks and volatility are also increasingly being transmitted between domestic markets and between markets across Asia as they expand and their influence grows. This means that regulators in Asia need to monitor and coordinate market policies nationally as well as regionally and globally.

At US$6.2 trillion, the region’s local currency bond market was 3.5% bigger than at end of June 2012 and 11.0% larger year on year.

Overall bond issuance differed sharply between countries over the quarter, however, with gross bond sales rising 38.1% in Malaysia, 13.0% in the Philippines, and 10.5% in China but tumbling 81.3% in Vietnam, 25.9% in Hong Kong, and down 8.1% in Thailand.

Small apartments still built

Despite the current negative economic situation, the construction of  small apartments is still being achieved with a moderate ratio, heard a realty forum held by Thanh Nien Newspaper in HCMC on Wednesday.

At the forum themed “Which opportunities for the property market?”, Nguyen Phung Thieu, general director of Saigon-Gia Dinh Real Estate JSC, said local residents are refusing to budge from their ‘wait-and-see’ attitude for further falls in housing prices due to the lack of confidence in the property market.

Local citizens have still found it hard to buy homes given the current sky-high housing prices and loan rates, Thieu noted. Therefore, it is necessary to carry out financial policies to help local people gain access to home loans, he stated.

Thieu, however, underlined the need to take prudent consideration for developing small condos to avoid making local urban areas look unsightly in the next five to ten years.

Architect Khuong Van Muoi, chairman of the HCMC Architects Association, noticed that the present urban development tends to pay much attention to organizing living space, landscape and architectural solutions.

These are the vital elements allowing industry insiders to build up brands and to compete with one another in the realty market, Muoi clarified.

Launching zoning plans, arranging space as well as implementing architectural solutions for low-cost housing projects of small flats is essential at the moment, Muoi told the forum. It is because local demand for low-cost housing schemes is rising, he reasoned.

A recent report of the Ministry of Construction shows that the volume of unsold fixed assets in 44 provinces and cities as of end-August included 16,469 condos, 5,176 low-storey homes, 1,624,000 square meters of land lots and 25,870 square meters of office areas and commercial centers with a total value of about VND40.7 trillion.

China, Taiwan targeted for local tourism

The Vietnam National Administration of Tourism (VNAT) is visiting Taiwan until Sunday to discuss cooperation plans with Taiwanese counterparts after a group of enterprises attended the China International Travel Mart 2012 (CITM 2012).

According to VNAT, both activities are part of a plan to exploit the Chinese market in particular and the Chinese-speaking market in general.

At CITM 2012 in Shanghai last week, tourism images of Vietnam were introduced not only at a separate booth but also at the joint pavilion of ASEAN countries to attract Chinese tourists.

The Chinese-speaking market provides Vietnam with a large number of tourists, with Chinese and Taiwanese markets generating over 1.44 million of a total of over 5.3 million international tourists arriving in Vietnam in the January-October period.

With a slight growth in the early months of the year, China is still regarded as one of the top markets of Vietnam’s tourism.

According to Saigontourist Travel Service Company, the firm will welcome 99 ships bringing Chinese tourists to Vietnam from now until April, 2014.

Doan Tri Thanh Tra, marketing manager of Saigontourist, said that to exploit the Chinese market as well as Chinese-speaking markets, the firm has joined numerous travel fairs, held roadshows to introduce tourism and conducted promotions for partners in China and Taiwan.

VNA opens new services, travel agencies discount tours

Vietnam Airlines (VNA) will next month open two more new services from HCMC to Jakarta and from Hanoi to Phu Quoc while many tourism companies are racing to introduce promotion package tours at home.

VNA from December 2 will operate the HCMC-Jakarta route with four weekly flights on Tuesday, Wednesday, Friday and Sunday using Airbus A321. The flights will take about three hours, departing from HCMC at 10a.m. and arriving in Jakarta at 1:15p.m.

On December 12, VNA will open the Hanoi-Phu Quoc route with five flights a week on all weekdays but Tuesday and Saturday. The service will leave Hanoi at 10a.m. and come to Phu Quoc at 1:15 p.m., taking about two hours and 25 minutes.

The national flag carrier will offer a 22% discount for roundtrip tickets of the HCMC-Jakarta service, at VND2,905,000. Similarly, the route HCMC-Jakarta-Bali will have its airfares reduced by 11% to VND7,085,000.

Discount airfares, exclusive of other taxes, fees and surcharges, are available from October 22 to December 31 with departure schedules from December 2 to March 30.

Meanwhile, several tour operators in HCMC had launched promotion package tours. Vietravel offers “Jakarta discovery” tours for four days at VND7,690,000 a person, exclusive of taxes. The tours are planned for starting every Wednesday and Sunday.

Saigontourist Travel Service Company introduces four-day tours to Jakarta at VND10,990,000 a person while other travel agencies in Hanoi like Hanoi Redtours revises down prices for Hanoi-Phu Quoc tours slated for next month.

Seafood firms want access to forex loans until end-2013

Given the wide gap of lending rates between Vietnam dong and foreign currency loans, the Vietnam Association of Seafood Exporters and Producers (VASEP) has proposed the central bank extend the deadline for borrowing foreign currencies until late next year instead this year, said the VASEP chairman.

Tran Thien Hai said that VASEP members are in dire need of capital to maintain business, and given the numerous difficulties now, they should be allowed to take out foreign-currency loans until the end of next year.

The central bank on May 2 issued Decision 857/QD-NHNN extending the deadline of taking out foreign currency loans for seafood enterprises to December 31 instead of May 2 as regulated by the previous Circular 03/2012-TT-NHNN.

“However, the industry now is mired in difficulties in producing, processing and exporting aquatic products while lending rates of loans in Vietnam dong still stay high, at 11-13% annually,” Hai said. Therefore, the association has petitioned the central bank to continue the credit program until the end of next year.

Loans in foreign currencies, mainly in the U.S. dollar, come with an annual interest rate of only 7-8% per annum, Hai explained.

According to VASEP, the current high lending rates in Vietnam dong along with the tightened credit policy has driven many seafood firms into a tailspin. The number of companies scaling down operation and going bust is on the rise at the moment, the association said.

For instance, the country in this year’s January-September only had about 600 seafood firms active as exporters, shrinking by some 30% year-on-year.

The tendency is expected to continue as a result of surging production costs and volatile demand, Hai stressed.

VASEP predicts the industry will face more difficulties in 2013 if the capital shortage is not tackled in a timely manner.

The association forecasts imports of input materials for processing and exports in 2013 will jump by 30% over the year-ago period to an average of US$65-70 million a month. But seafood exports to a number of major markets are predicted to fall sharply, with the volume bound for European nations tumbling 12-15% year-on-year and that to Japan declining 1.5-2%.

The country’s seafood exports to other Asian nations, meanwhile, are said to mark up between 10% and 20% next year.

SOEs going unchecked

The Government is facing a severe lack of legal instruments to supervise operations of State economic groups and corporations, whereas this corporate sector is enlarging but performing poorly.

This is reflected in a research project “Supervision and evaluation of State-owned enterprises (SOEs)” released on Thursday by the Central Institute for Economic Management (CIEM).

“One serious problem is no agency or ministry is in charge of monitoring SOEs,” said Pham Duc Trung, deputy head of CIEM’s Committee for Enterprise Reform and Development.

This is due to conflicting legal documents such as the Enterprise Law, the Government’s Decree 25 and decisions on State conglomerates and corporations 91, he pointed out.

Under the current regulations, SOEs have to submit their quarterly and annual financial statements to State agencies, business registration offices and State capital representatives. However, the Ministry of Planning and Investment said 80% of SOEs had not sent their reports to business registration offices.

Tran Tien Cuong, an expert of SOE reform, said the Government could hardly control the State corporate sector because the system of documents for SOE management had broken down. Specifically, the State Enterprise Law expired in July 1, 2010, but no new document has been introduced to replace it.

Cuong said: “No legal document specify an agency with the primary responsibility.” That is why no State agency was to blame for the collapse of Vinashin, Vinalines and some other State firms.

Speaking to Thoi bao Ngan hang on Thursday, Pham Viet Muon, deputy chief of the Steering Committee for Enterprise Reform and Development under the Government Office, said the Prime Minister is not managing State groups and corporations.

“The Prime Minister is not managing SOEs… No documents and regulations specify the person in charge of SOEs. It has never been stated that SOEs is subject to management of the Prime Minister,” he said.

He complained it was groundless to say the Prime Minister is in charge of this or that group.

According to the Ministry of Finance, assets of 91 State groups and corporations totaled more than VND2,093.9 trillion in 2011, up 16% against 2010. Meanwhile, debts of State groups and corporations almost reached VND1,300 trillion last year, a rise of nearly 19% year-on-year.

More securities firms suspend business

More securities firms have suspended all or part of their services to survive tough times even though they don’t violate the financial safety thresholds regulated by the State Securities Commission (SSC).

Sao Viet Securities Co. (SVS) has recently asked SSC for approval to stop its brokerage services.

The board of directors of SVS has already agreed to remove securities brokerage service and cease its membership of the two bourses and the Vietnam Depository Center. SVS plans to organize an extraordinary general meeting at the final week of this month over the issue.

Au Viet Securities Co. had earlier asked its investors to transfer their accounts to other securities enterprises as it had been allowed to stop brokerage service and its activities at the two stock exchanges as member.

Similarly, large numbers of other securities companies have also pulled out of many services.

For instance, SaigonBank Berjaya Securities Co. (SBBS) has already consulted its shareholders over a plan to withdraw from the service of securities issuance underwriting. The company is now a broker and corporate financial consultant only.

Vien Dong Securities Co. (VDSE) last week also announced to withdraw from self-trading activities from Monday. The firm had suffered an accumulated loss of VND27 billion as of end-September. It only provides brokerage, consulting and depository services at the moment.

The protracted gloom of the local securities market has sent a lot of small securities firms into a state of insolvency, with a slew of firms put under special surveillance.

Therefore, downsizing operations is seen as necessary to survive the current difficult market conditions. According to SSC, about 10 securities firms have stopped brokerage services so far and the number is expected to rise in the near future.

Government urged to delay road maintenance fund plan

The Government should weigh rescheduling a road maintenance fund scheme to give a much-needed lifeline for transporters struggling with the current economic slump, transport associations told a seminar in HCMC on Thursday.

The seminar was held to collect comments from local industry insiders on a draft circular guiding the mechanism of collecting fees for the fund, and managing and using the fund.

At the seminar, representatives of associations and companies expressed outcries over many points in the draft. Tran Viet Hoe, chairman of the Danang Cargo Transport Association, quoted Deputy Minister of Transport Nguyen Ngoc Dong as saying that enterprises in the transport industry can pay the fee every three to six months after the Government decree on the road maintenance fund comes into force.

The draft, however, requires companies to contribute to the fund upfront as a condition to obtain an operating certificate. This shows that even authorities in charge have different ideas on how to collect the fee.

Tran Huy Hien, general secretary of the HCMC Freight Forwarders Association, said the fact that the Government proceeds with collections for the fund while local transporters are being mired in difficulties will strongly push up prices of goods.

“As transport accounts for 50-60% of logistics services costs, local enterprises will have no other choice but to borrow to pay the fee,” he said.

Hien said the circular fails to clarify how the fund will be managed and how the quality of roads will be improved accordingly. Therefore, he insisted, the Government should delay the collection to have time to weigh pros and cons.

When the road maintenance fund becomes effective, toll stations along the state-upgraded or built roads will be removed. Since the number of build-operate-transfer toll stations makes up a great proportion in the country, Tran Ngoc Tho, director of Trung Viet Transport Co., said local transporters will shoulder many high fees.

Echoing Tho’s view, Tran Tri Minh, vice chairman of the Haiphong Cargo Transport Association, cited a series of taxes and fees that transport enterprises are paying. They are automobile import tax, special consumption tax, corporate income tax, registration and number plate fees, fuel fee, fuel price stabilization fund, automobile inspection fee and insurance fee. Even worse, industry players would be charged with the environment protection fee and road maintenance fee soon, Minh stated.

When Vietnam joins bilateral and multilateral transport agreements with other Asian nations, local transport firms will go bust.

Up to 40% of transport companies have gone bankrupt or changed their vehicles in Haiphong and the number is expected to rise further in the coming time when the road maintenance fund takes effect, Minh added.

Food producers feel the blues on faltering demand

In the upcoming Tet season, many food producers will have to reduce or stop production of high-grade products to focus on average-priced goods for budget-conscious consumers at a time of economic hardship.

Le Thi Thanh Lam, deputy general director of Saigon Food, said high-grade goods could hardly sell well in the coming Tet. Therefore, the company will not launch luxury Tet gift boxes or any new products.

At Tet, people mainly buy goods as gifts for friends, family and business partners. Still, in the current difficult situation, they have to cut spending on presents, said Lam.

For the Lunar New Year 2013, Saigon Food will launch 500 tons of products, the same as last Tet, instead of an increase.

Similarly, Nguyen Lam Vien, general director of Vinamit, said his firm would supply 500 tons of Tet goods, a slight drop year-on-year, over forecasts of low consumption. The company will not launch luxury boxes of Tet goods like previous years, but will offer products in simple packages to lower prices.

Meanwhile, Le Hoang Thanh at beverage maker Tan Quang Minh said his firm would diversify products to meet the demand of different consumers, including gift boxes with reasonable prices.

Producers said they would have to keep prices unchanged while expanding their distribution networks.

Nguyen Xuan Luan, deputy general director of Kinh Do Corporation, stated goods prices in the coming Tet season would remain unchanged from the previous Tet. In addition, the company will make use of all distribution channels to bring its products to consumers, especially those in rural areas.

Phan Van Thien, deputy general director of Bibica Joint Stock Company, said his firm would turn out products that are as good as foreign items but their prices are 20-30% lower.

Bibica products will be distributed to 60,000 outlets nationwide. Moreover, the confectionary producer will offer sales promotions to attract buyers.

“If a price hike was unavoidable, we would only raise prices by 5-7% at most to retain our clients,” said Thien.

Meanwhile, members of the Association of High-Quality Vietnamese Goods Producers are preparing for a program called “Tet goods launch day”, set for December 4 at the Continental Hotel in HCMC. Around 1,000 producers, purchasers, retailers, small traders and consumers will be invited to the event, said the organizer.

On this occasion, producers will introduce their Tet products to customers. In addition, many products of local producers and specialties of trade villages will be wrapped in packages with four themes and displayed at 60 supermarkets of Saigon Co.op across the country.

Bank of China rolls out international debit card in Vietnam

Bank of China (BOC) on December 1 will launch its Great Wall International Debit Card in Vietnam.

The launching ceremony is part of the 17th anniversary of BOC Ho Chi Minh City Branch. This year also marks BOC’s 100th anniversary.

The debit card, for Vietnam dong use, is a modernised E-payment tool with saving, consuming and cash withdrawing functions to serve the local market.

It will provide customers with more convenient, faster, and safer financial solutions through BOC’s network bases and UnionPay marked ATMs, allowing customers to “Enjoy worldwide payment with Great Wall International VND debit card in hand”, said Wang Hao, general manager of the branch.

The card is not only for dong deposits but also for withdrawing cash in RMB, USD, HKD and other foreign currencies at ATMs and during shopping.

When the cardholder goes to the mainland China, Hong Kong, Macau and other countries and regions in Southeast Asia, the debit card can be used in millions of merchants specified by BOC and hanging UnionPay label all over the world.

“The cardholder will enjoy the safety and convenience brought to him or her by BOC,” said Wang.

The debit card can be used for withdrawals and inquiries at millions of ATM with UnionPay label in Vietnam and in the world 24 hours a day. “Without limitation of business hours and places, you can use the debit card at anytime, anywhere. It is like our slogan Always With You,” he added.

Kirby caters to Vietnam and region

Kirby South East Asia, a subsidiary of Kuwait-headquartered Kirby Building Systems, maker of pre-engineered steel building, has marked its fifth anniversary in Vietnam with a firm position in this market.

In its recent fifth anniversary celebration held both in Ho Chi Minh City and in Hanoi, hundreds of guests attended and networked, and the company’s management reiterated their commitment and efforts to keep working out tailor-made solutions of the best quality for the clients.

“Our new state-of-the-art factory in Vietnam is the 5th plant globally and the first for Southeast Asia with annual capacity of 50,000 tonnes. It is located in Dong Nai province. From this facility, we serve the domestic market and export steel buildings to Singapore, Malaysia, Indonesia, Thailand, Australia and Africa,” said D. Raju, managing director of Kirby India and South East Asia.

Kirby officially started operations in Vietnam in 2008, and now it has supplied over 500 buildings in the country and the region. The company has a total capital investment of around $11 million and has over 350 experienced employees at present.

Kirby South East Asia’s products include industrial buildings, warehouses, supermarkets, commercial buildings, offices, schools, aircraft hangars, workshops, stadiums, hospitals, complexes and high rise buildings. The Vietnam company has sales offices in Hanoi, Danang, Ho Chi Minh City, Thailand’s Bangkok, Singapore, Australia, South Africa, Ghana, Nigeria and Ethiopia.

Since the 1980s, the pre-engineered buildings method has dominated the low rise building market in the world. It provides customized solutions for various needs, features sophisticated manufacturing facilities and engineering systems leading to precision. PEB systems are manufactured in fully controlled conditions in factories and shipped to job sites in knock-down conditions for easy assembly and erection. PEB uses combine elements such as sheeting panels, secondary elements, main frames and bracings to act integrally as a whole system offering considerable stability and strength.

To achieve the success in Vietnam just in five years, Kirby said it follows stringent quality policy with use of top quality raw materials, a highly skilled engineering team. The company also engages Ernst & Young as its statutory auditor, and has strong supports HSBC Vietnam in terms of document credit, working capital funding and bank guarantee for any projects performed in the country. As the result, Kirby has already gained trust of many customers. So far, this company has provided steel buildings for many companies, including Gemadept, Vinamilk, Mong Duong I Thermal Power plant, diary company Nestle, Muto, kitchenware maker American Standard, tobacco joint venture BAT-Vinataba, Universal Steel factory and Daigaku factory.

Pharmaceutical Central No. 2 Company factory, dairy farm of TH Milk in Nghe An province, Viet Thang Paper Factory in Hai Duong province, Sun Steel Factory in Vinh Phuc province, Century Synthetic Fiber factory in Tay Ninh province, Huayuan Machinery Co. in Binh Duong province, Bidiphar factory in Binh Dinh province, Thaco Car showroom in Ho Chi Minh City, Saigon Air Cargo terminal at Ho Chi Minh City’s Tan Son Nhat Airport, Kewpie factory of Shimizu Corporation in Binh Duong, Groz Beckert Factory in Danang, Bourbon An Hoa factory in Tay Ninh, and European Plastic Window factory in Binh Duong.

Binh Duong lures bigger FDI

The southern province of Binh Duong has so far this year attracted FDI of over US$2.4 billion through 82 fresh projects and 88 operational ones, according to the provincial Department of Planning and Investment.

Of the projects, there is a US$ 1.2-billion project on developing Tokyu Binh Duong Urban Area by Vietnamese group Becamex Binh Duong and Japanese firm Tokyu.

Binh Duong has housed 167 Japanese-invested projects totaling over US$3.1 billion. The province has lured 2,096 foreign-invested projects with total capital of more than US$17 billion.

Spiritual tourism thrives in Quang Ninh

The northern province of Quang Ninh is not only popular with visitors for its landscape, notably UNESCO-recognised world heritage Ha Long Bay, but is also attractive thanks to its ample spiritual tourist areas.

The province is home to over 620 historical, cultural and tourist attractions. Of these, there are three special national relics: Ha Long Bay, Yen Tu historical relic in Uong Bi city and Bach Dang historical relic in Quang Yen town.

Additionally, the locality houses a number of classic relics that include the royal tombs of Tran Kings, Cua Ong temple, Tra Co communal house, Cai Bau pagoda, Truc Lam Giac Tam Zen monastery and Long Tien pagoda.

Such spiritual tourist areas draw visitors from across the country, especially during spring festivals. It offers them a chance to learn about the culture and beauty of Quang Ninh and its people.

Early each year, such places are flooded with strolling visitors. Yen Tu relic attracts millions of tourists each festive season. The figure can amount to tens of thousands on peak days.

The Uong Bi municipal People’s Committee said the number of domestic and foreign pilgrims to Yen Tu grows each year, jumping from 40,000 in 2006 to over 2.2 million in 2011. It is estimated that a total of 3 million tourists will visit the site in 2012.

Like the popular Yen Tu relic, the Tran dynasty complex in Dong Trieu district, which boasts a system of historical sites including An Sinh temple, royal tombs of Tran Kings, Ho Thien, Ngoa Van and Quynh Lam pagodas, is undergoing renovation to bring into full play its potential as a spiritual tourist destination.

In recent years, with support from central and local authorities and departments, many of the artifacts within district relic sites have been restored and upgraded using State budget, making them more beautiful.

According to travel agencies, despite emerging tourism ventures in MICE and ecological tourism, spiritual tourism is a growing trend that they are aiming at.

Spiritual tourism is often associated with national culture and history in harmony with religious faith and righteousness. It leads people to the good, which is the reason to its popularity with travellers.

Apart from learning the history, culture and unique architecture of the tourist attractions, spiritual tourism helps visitors experience tranquility in their soul.

Mekong Delta intensifies investment promotion in Hong Kong

Can Tho City hosted a seminar on November 26 to strengthen the effectiveness of investment and trade promotion targeting businesses from Hong Kong Special Administrative Region (HKSAR).

The event was co-organised by Can Tho City’s People’s Committee and the China Manufacturer Alliance (CMA).

Delegates heard introductory briefings on the potential advantages of the entire Mekong River Delta region and Can Tho City, particularly in terms of agricultural, seafood, and processing industries.

They hoped local investment incentives will encourage Hong Kong investors to seek out the localities’ business opportunities.

A CMA representative said that Hong Kong has offered business-friendly policies under its free market orientation.

Hong Kong is an international trade centre with professional and efficient services. The HKSAR currently hosts the consular offices of approximately 110 nations and the headquarters or offices of around 3,750 multinational corporations.

The CMA is willing to coordinate with international agencies and foreign trade associations on information sharing, new market development, and international business cooperation – including in Vietnam and the Mekong Delta provinces, said the representative.

HKSAR has treasured a time-honoured relationship with Vietnam. Both sides signed an agreement on aviation services in September 1999 and an agreement on double tax avoidance in December 2008. In April 2009, the Vietnam Trade Promotion Agency and the Hong Kong Trade Development Council signed an agreement on trade promotion between Vietnam and the HKSAR.

As of October 2012, Hong Kong has invested in 692 projects in Vietnam with a total capitalisation valued at US$11.96 billion, ranking sixth among foreign investors in the country. Among them, 33 projects worth US$569.9 million are in the Mekong Delta region.

Vietnam, Japan cooperate in improving investment environment

The Japan International Cooperation Agency (JICA) will further support Vietnam in improving the investment environment, said Minister of Planning and Investment Bui Quang Vinh.

While working with JICA Vice President, Arakawa in Hanoi on November 26, Minister Vinh said the Vietnam-Japan Joint Initiative on improving the investment environment has finished the fourth phase with positive results.

Minister Vinh expressed hope that JICA will further support Vietnam in implementing the fifth phase for a better and effective investment environment, a green growth strategy, a programme to cope with climate change, and an e-custom programme.

For his part, Vice President Arakawa said that JICA is willing to cooperate closely with the Vietnamese side in the implementation of the Vietnam-Japan Joint Initiative.

The President of the Japan Business Federation (Keidanren), Hiromasa Yonnekura, pledged to promote cooperation among businesses of the two countries and contribute to the modernization and industrialization process in Vietnam.

Japan’s Parliamentary Senior Vice Minister for Foreign Affairs, Kazuya Shimba, told Minister Vinh that the two ministries have played an important and active role in promoting the strategic partnership between the two countries and both sides are actively preparing for the 40th anniversary of Vietnam-Japan diplomatic ties next year.

Quang Ninh attracts strong FDI inflows

The northeastern province of Quang Ninh licenced four foreign-invested projects capitalized at US$412 million in the first nine months of this year, up 15 times in value against 2011.

It is now home to 93 valid foreign direct investment (FDI) projects, with a total registered capital of US$4.2 billion.

The US takes lead among 17 countries and territories pouring investment in six projects, accounting for US$2.4 billion of the registered capital, or 59 percent of the total FDI in Quang Ninh.

Notably, most FDI projects come from Asia with China and Hong Kong making up 57 percent of the province’s total projects but only 18 percent of total registered capital. Meanwhile, nations such as Germany, the UK and Japan with financial and high-technology expertise invest a moderate figure.

Quang Ninh aims to renew its economic growth model, focusing on efficiency, productivity, competitiveness and quality products.

The province plans to increase the quality and scale of each investment project, striving to raise the technological content of each project to 40 or 50 percent of the value, switching focus from heavy industry to hi-tech support industries in order to mitigate the negative impact on environment, reduce raw exports and fully utilize the tourism potential of Ha Long Bay and Bai Tu Long Bay.

It has offered incentives to businesses participating in 18 key projects in the five major areas including tourism and entertainment services; seaport, border gate and logistic systems; trade; infrastructure; training and high-quality human resource services.

The Secretary of the Quang Ninh provincial Party Committee, Pham Minh Chinh, stressed that the province has attached importance to improving its investment climate to attract FDI, ODA and investment from the private sector into Quang Ninh.

Vietnam, Palestine boost audit cooperation

Deputy Prime Minister Vu Van Ninh met the President of the State Audit and Administrative Control Bureau (SAACB) of Palestine, Samir A.O Abuznaid, in Hanoi on November 26.

Ninh applauded the outcomes of the talks between the high-ranking delegation of Palestine’s SAACB and the Government Inspectorate and other relevant agencies of Vietnam.

He highly valued the cooperation between the two countries in various fields, saying that there is still great potential for Vietnam and Palestine to further their cooperation, especially in economics.

The Deputy PM confirmed Vietnam’s stance to share the difficulties that Palestine faces, and support the country in its struggle for national independence and construction.

In response, Samir Abuznaid thanked Vietnam for supporting Palestine’s effort in establishing an independent State.

Palestine has a lot in common with Vietnam and has studied Vietnam’s fight to protect itself and its process of national construction and development, he said.

He expressed his hope that in the future, Palestine’s SAACB and Vietnam’s Government Inspectorate will work towards a cooperation agreement in areas of mutual concern.

PM approves EVN restructuring scheme

Prime Minister Nguyen Tan Dung has approved a scheme to restructure the Electricity of Vietnam (EVN) company over the next three years.

The plan will see EVN focus more on manufacturing and trading electricity, in the hope that this will improve the corporation’s competitiveness as well as ensuring there is a sufficient supply of electricity to the economy.

EVN currently operates in four main areas of business. They are production, distribution and trading of electricity; import and export of electricity; investment and management of power projects; and operation, management, maintenance and upgrading of electrical equipment and power transmission systems.

The scheme will also see EVN rearrange the internal operation of the organisation, improve its governance mechanism and strengthen its authority and responsibility over other enterprises where it has invested capital, and which it thinks fit in with its central aims.

PM Dung has asked the company to ensure that its affiliate companies increase their specialisation and avoid internal competition.

It is expected that after implementing the new measures, the charter capital of EVN will be more than VND143.4 trillion following the re-valuation of assets.

EVN is also required to divest capital from six enterprises by the end of 2015, including An Binh Bank, An Binh Securities Co, Global Insurance Joint Stock Co, Sai Gon Vina Real Estate Joint Stock Co, EVN Land Central and the Vietnam Investment and Construction Electricity Company.

In July this year, EVN announced that they wanted to withdraw more than VND1.1 trillion from affiliates whose operations are not in line with their main business aim. However, they encountered difficulties in negotiating an acceptable selling price.

By the end of last year, EVN poured around VND757 billion into An Binh Bank, held shares worth VND125 billion in Global Insurance Co, invested VND103 billion in property projects and VND114.8 billion in An Binh Securities Co.

Vietnam ratifies ASEAN Customs Agreement

The Government has issued Resolution No.78 on ratifying the ASEAN Agreement of Customs signed in Cambodia on March 30, 2012.

The Ministry of Finance will cooperate with relevant ministries and agencies to implement the Agreement.

The Ministry of Foreign Affairs will complete external procedures as required.

The ASEAN Agreement of Customs, based on the revised Kyoto Convention, is a collection of commitments of ASEAN economic integration regarding customs such as the ASEAN one-door mechanism, the sixth Chapter of the ASEAN Trade in Goods Agreement and ASEAN Harmonized Tariff Nomenclature.

Under in this agreement, apart from fulfilling its commitments, Vietnam will receive financial support to prevent, investigate and deal with customs violations.
In addition, Vietnamese products exported to other nations and territories will enjoy some preferential treatment from simple processing of customs procedures, information technology application, and the Authorized Economic Operator Programme.

‘Dollar Store’ marketing concept has potential in Vietnam

The ‘Dollar Store’ concept is relatively new in Vietnam and was introduced only a few years back with big cities cashing in on it particularly with women customers.
Customers choosing items at a Dollar Store Daiso in Ho Chi Minh City

However, only supermarkets offering foreign brands have achieved some success in this business model.

Dollar stores are quite popular in Europe, the US, and Japan. For instance, Japan’s leading retailer Daiso introduced the concept in 1972 and has now grown to more than 2,500 large and small outlets across Japan, and with 500 retail franchises in the US, Canada, and Vietnam. In the US, China and Italy, the dollar store concept has been mushrooming rapidly selling in equivalent to their own currency.

In Vietnam, the dollar stores were launched in 2008 and are flourishing in big cities like Ho Chi Minh City, Hanoi, and Da Nang.

Tri Phuc, a franchisee of Daiso, opened its first outlet in Nowzone Commercial Center on a 200 square meter area. The new supermarket supplies more than 90,000 different kinds of products imported from Japan, such as cosmetics, stationery, fashion items, toys and household goods at a fair price of VND40,000 ($1.9) per item. Tri Phuc now plans to open an additional 20 such outlets in the country.

Economists say that the dollar store concept makes good business sense, especially in the current economic downturn when customers have tightened spending and are favoring buying only need based items. Dollar store businesses can also enjoy high profits, as around 80 percent of products in the store cost lower than their sale price.

Sensing good profits by selling products under this business model, big supermarkets like Co.opMart and Big C have also begun to adopt it in their promotional programs. They noticed that this concept brings in a higher turnover than normal promotional programs. However, supermarkets need the support of enterprises and suppliers to make it a success.

Most of the businesses adopting the dollar store concept are selling foreign brand items while home enterprises in the country are struggling by trial and error.

Untapped market in children’s clothes, bra segment

Despite the government’s call to ‘Be Vietnamese Buy Vietnamese’–an effort to help domestic enterprises expand in the consumer market–some sectors like the textile and garment industry have failed to tap potential in many segments which look promising.

Home textile and garment firms have not focused on children’s clothes in the age group from 7-12. Vietnamese parents nowadays have 1-2 children and want to give their children the very best of things and don’t hesitate in spending large sums on items such as clothes.

However, the local textile and garment firms have been disappointing and hence there is a huge void in this segment which is being filled by foreign made children’s clothes, mainly being brought into the country in small quantities by tourist agents or flight attendants.

Prices of these clothes are not cheap. For instance, an outfit for a nine-year-old boy costs from VND300,000-VND500,000 (US$14.39-$24) and a girl’s dress can cost upto VND800,000 ($38) or more.

Mrs. Tram, an assistant at a children’s clothes store on Xo Viet Nghe Tinh Street in Binh Thanh District, said the store was opened three years ago and such clothes have done well recently. The store imports goods from Hong Kong once a week so it has new designs and most of the customers are people with an average income who look for good designs and material rather than prices.

Meanwhile, people of a lower income usually choose Chinese-made clothes at cheaper rates and an assortment of designs.

Similarly, Chinese-made underwear for females is available in markets across Vietnam and is very popular as it is cheap at VND20,000-VND50,000, while domestic made bras are priced at VND100,000-VND250,000 a piece.

Most Vietnamese bras are displayed in supermarkets and some famous brands have established distribution networks in many districts. However, this segment is taken by international brands such as Triumph, Pierre Cardin, Bon Bon and La Senza.

The country has more than 2,000 textile and garment firms which have no interest in making bras. According to a company, to manufacture a bra, it needs 20 subsidiary materials plus wages of VND25,000 per bra, with the cheapest sale price being VND60,000, excluding tax. In any case, Vietnamese-made bra cannot be cheaper than Chinese-made bras.

Moreover, an investment for an assembly production line costs hundreds of dollars and training workers takes a long time as making a bra needs skilled workers. As a result, Chinese-made bras that were embedded with strange pills were selling across the country, and authorities cannot do anything as customers with low incomes have no choice but to buy these low priced bras.

The Vietnamese textile and garment sector has not exploited local markets in such important segments, which raises the question whether Vietnamese commodities can meet all demands and whether the problem can be resolved with government help.

Sacombank to merge with Eximbank

The merger of Sacombank and Eximbank is no longer a mere rumour, confirmed Eximbank Chairman Le Hung Dung yesterday, admitting that the two banks have been in negotiations.

The merger talk was initiated when Eximbank acquired a 9.73 percent stake in Sacombank from ANZ Banking Group. Virtually no information was disclosed about the deal, prompting rumours of a merger in the pipeline.

Dung told reporters that the merger would be a good idea if it met necessary conditions.

The two banks will become major players in the nation’s banking sector, with more than 600 branches, a charter capital of VND30 trillion (US$1.4 billion) and assets worth VND400-500 trillion ($19-24 billion).

Sacombank has a charter capital of VND10.7 trillion ($500 million), while Eximbank has nearly VND12.4 billion ($590 million). When the two banks merge, the new entity capital and assets will currently dominate State-owned banks like Vietcombank, Agribank, Vietinbank and the Bank for Investment and Development of Vietnam (BIDV).

The merger will contribute to national economic development and the restructuring of the banking sector by reducing the number of banks and increasing the overall health of the financial system, Dung said.

However, any deal would require the approval of the State Bank of Vietnam and other relevant authorities as well as shareholders of both banks.

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