Home » Business » BUSINESS IN BRIEF 8/12

Open bidding for Metro line 2 in first quarter 2013

Ho Chi Minh City’s People’s Committee has approved bidding plans for major components of Metro line 2, including construction and erection, and device supply.

The tender will be announced in the first quarter of 2013, according to Ho Chi Minh City’s Management Authority of Urban Railway (MAUR). MAUR and Implementation Consultant (IC) are in charge of prequalification and issuing bidding documents.

The package of alignment design of Metro line 2 (Ben Thanh-Tham Luong) is expected to be finished and submitted to the authority by the contractor Metro Team Line 2 JV in December 2012.

Metro Team Line 2—involving a consortium of Germany-based Pöyry Infra GmbH, Pöyry Infra AG, Obermeyer Planen + Beraten GmbH, ILF Beratencde Ingenieure GmbH and Vietnam-based TEDI South–has been awarded I.C. Services contract signed on January 17, 2012.

The IC Services, providing engineer, design and supervision consultancy services, are to be financed from German Funds through KfW Bankengruppe (KfW) in two tranches and the contract follows the FIDIC Client/Consultant Model Services Agreement. The share of the works undertaken by the German members of the consortium is around 79 per cent.

According to MAUR, package CS3 (Social Development and Gender Mainstreaming Consulting Services) and package CS4 (Integrated Sustainable Urban Transport Consulting Services) funded by $40 million first loan from Asian Development Bank (ADB), are in process of prequalification. The IC services of CS3 and CS4 are planned to start in the second quarter and third quarter 2013 respectively.

Package CP1—the official building and initial depot Tham Luong, shared ADB’s first loan–is now in a detail design phase. Bidding will open for construction and erection contract in first quarter 2013.

Moreover, a bidding process for main packages of construction and erection, device supply of Metro line 2–funded by ADB’s $500 million second loan–has also been approved by Ho Chi Minh City’s People’s Committee. The construction and erection contract as well as supply and install contract are planned to be signed in July and August 2017 respectively.

These contracts are expected to be finished in December 2017, with test operations planned for the following six months.

According to MAUR, line 2 will run from Thu Thiem Peninsula in District 2 to the Tay Ninh Bus Station in District 12, passing through Pham Hong Thai, Cach Mang Thang Tam and Truong Chinh streets. Out of the main section’s total length of 11.3km, 9.6km will be underground.

Government to apply new minimum wage rates

The government will increase the minimum wage to VND1.65-2.35 million (USD79.1-112.7) per month from January 1 next year.

The new basic salary will be divided by area, with the highest increases going to the most developed areas.

Area 1 includes Hanoi, HCM City, Quang Ninh, Danang, Binh Duong, Dong Nai and Vung Tau, which will see the minimum wage increased to VND2.35 million (USD112.7), up from a current VND2 million.

Area 2 includes Haiphong, Vinh Phuc, Thai Nguyen, Khanh Hoa, Binh Phuoc, Tay Ninh, Long An, An Giang, Can Tho and Ca Mau, and will set VND2.1 million as the minimum wage, compared to current VND1,780,000.

Areas III and IV will respectively set VND1.8 million and VND1.65 million as their minimum wages, up from a current VND1.55 million and VND1.4 million.

The new basic salaries are from VND250,000 to 350,000 per month higher than the current rates.

The Ministry of Labour, Invalids and Social Affairs proposed two planned minimum wage increases, to be applied from January 1, 2013 with the highest set at VND2.7 million and the lowest VND1.8 million.

Leading firms pessimistic about new year prospects

Over half of Vietnam’s leading companies believe that the economy will not improve considerably in 2013, according to a report released on December 4.

The report conducted by Vietnamreport interviewed nearly 200 representatives from companies ranked in 2012 among Vietnam’s top corporate income tax payers (V1000), 500 biggest firms (VNR500) and 500 fastest-growing companies (FAST500).

According to the report, 50% of representatives from the V1000 thought that their business results in 2012 would be worse than 2011. All those interviewed in the banking and financial sector believed that their results in 2012 would also be lower than last year.

The number of enterprises pessimistic about their business activities in 2013 was higher than those with positive forecasts.

Most of the surveyed corporate leaders said that their enterprises were profitable in 2012 thanks to cutting production costs. Only those from the garment and textile sector said that their profits were the result of business and production expansion.

Many companies also pointed out challenges they will face next year, including an unstable business environment, a decrease in consumer demand and higher input prices. They also express their worry about policy implementation and easier access to capital next year. However, they continued to pin their hopes on the government’s inflation-curbing policies.

Around 76% said that they would take loans from banks in 2013, while up to 50% of firms expected to use their own capital next year.

Experts call for policy reforms

It is vital that more drastic solutions are made to reform the nation’s mechanism and policies as the current regime is too outdated and is in dire need of another renovation to speed up economic development, experts said.

Speaking at a seminar on mechanism in a developing economy in Vietnam held by the University of Economics and Law in HCMC on Wednesday, Associate Professor Dr. Nguyen Van Luan of the university used the Personal Income Tax Law as an example to illustrate the poor quality of local policies. The personal income tax threshold was raised to VND9 million a month but it will be inappropriate soon, he said.

Many policies and regulations have been issued in recent times but their quality always causes real concerns for the public, Luan noted. For instance, he said, heavily decentralizing a large number of areas has resulted in provinces and cities being mired in thinly-spread investment, causing a waste in public investment and low economic efficiency.

Luan insisted that there should be another mindset change in order to undergo the restructuring of the economy.

Another example as cited by another expert is the case of Decree 69/2009/ND-CP relating to land use fee collection in line with market changes. The law has driven realty developers into terrible difficulties. The question on how land prices are fixed based on market moves still remains unknown and this has resulted in thousands of tax documents being stuck at domestic tax agencies.

“Local firms have had no other choice but to burden all the outcomes while no policymakers have taken the responsibilities for what they have caused so far,” he stressed.

The expert deemed it necessary to let policymakers get the blame for their ineffective policies. “If policymakers are forced to be more responsible for their actions in case of mistakes, they will be more prudent in issuing legal documents,” he told the seminar.

Besides, one of the subjects that captured great attention of participants is the role of State-owned companies. Experts at the seminar urged the Government to eliminate the key role of State-owned enterprises in a much more active way since the shortcomings of the economic sector have been exposed, failing to regulate the economy as expected.

The number of State-run entities is 1,309 while the number of companies with majority State-owned holdings is 1,900 at present, Dr. Nguyen Tan Phat from the University of Economics and Law said.

“The Government has drafted a road map to complete the equitization of more than 1,000 firms by 2015, meaning an average 327 companies will go public annually,” he noted.

The speed of equitizing State-owned enterprises has slowed in recent years given economic difficulties. The equitization of over 1,000 State-run businesses in the next three years thus is not easy at all.

Luan underlined the low efficiency of equitization, saying State assets have been turned into personal assets in several cases. The seminar saw experts sharing the same view that State corporate reform along with the economic restructuring process needs to be done in a harsh way now the economy is turning to a market-driven status.

Car import stays low at festive time

Although the auto market often turns active at the year-end due to a strong demand spurring a high import volume, the number of completely built-up (CBU) cars imported last month remained low compared to previous months.

According to the General Statistics Office, the volume of imported cars stayed at 2,000 units last month with a value of around US$50 million, marking the eighth month in a row the import of CBU cars is unchanged.

Such a figure is also the lowest in the past three years for the year-end period with many festivities that often drive up car demands. Economic difficulties and high car fees have resulted in a strong drop in demand of consumers and enterprises as well as in car import and assembling volume since the year’s beginning.

Unlike previous years when the year-end period often comes with a shopping spree, this year is contrary although consumers can enjoy low prices and receive many supports from trading firms and automakers.

The year almost ends, and car traders are not optimistic about a high consumption volume like previous years.

According to trading firms, with the low car import of only 2,000 units per month, the hope for a recovery of the auto import market has faded. Amid the sluggish market, local auto importers and distributors have continuously launched many promotion programs to stimulate the demand.

According to the General Statistics Office, the total import volume of completely built-up cars this year is estimated to reach 24,000 units with a value of US$537 million, down 53.3% in volume and 43.9% in value from last year.

Gold bar trading applicants okayed

The majority of companies applying for gold bar trading are eligible to do the job, according to Nguyen Hoang Minh, deputy director of the HCMC Branch of State Bank of Vietnam (SBV) in charge of inspecting the corporate candidates.

As per Decree 24/2012/ND-CP, enterprises wanting to trade gold bars are required to have charted capital of at least VND100 billion and at least two years’ gold trading experience. Besides, they are required to have tax payments of at least VND500 million from gold trading annually for two consecutive years and have branch networks in at least three centrally-governed provinces and cities.

As for credit institutions, SBV will consider granting business licenses for gold bar trading if they meet three conditions on charted capital of at least VND3 trillion, having registered for gold trading and having trading networks in at least five centrally-governed provinces and cities.

According to Minh, his agency so far has inspected a large number of banks and companies asking for permission to act as gold bar traders, most of them satisfy the required conditions. The central bank will complete the issuance of licenses to qualified firms this month.

The regulation on certain enterprises allowed for trading gold bars is one of the steps of the central bank to make it easier for it to manage the local gold market. At the same time, the monetary authority also targets to ease the high pressure of public gold holdings given the limited number of gold selling points compared to previous times. However, the move along with the new law banning commercial banks from gold mobilization and gold lending are yet to be effective as expected.

Nguyen Cong Tuong, deputy sales manager of Saigon Jewelry Company (SJC), said local people over the past few days had rushed to buy gold instead of selling the yellow metal. And SJC has had to manage to seek supply to meeting rising buying demand.

This is also the reason why local gold prices in the last two days were up to more than VND4.1 million per tael higher than global prices, the highest gap recorded so far.

The proposal for temporary gold export and re-import from local lenders has yet to receive the central bank’s official approval. Tuong said the solution if allowed will directly help local banks replenish their gold supply to repay gold depositors, meaning the gold will not be sold out.

On the other hand, the solution will indirectly reduce purchasing pressure for the market as members in the banking industry will not have to buy gold to repay their customers.

Reprocessing gold bars into products meeting SJC standards is still being done at a slow pace. After nearly three months carrying out the process, some 175,000 taels have been reprocessed, with about 270,000 taels set to be reprocessed in the coming time.

SJC has imported one more inspection machine to speed up gold reprocessing but the machine has yet to arrive at the firm.

SJC bought one tael of gold at VND46.6 million and sold it at VND46.75 million on Thursday, up VND130,000 a tael against the previous day. Gold prices since the month’s beginning have only gone down VND370,000 or 1.25% a tael at home while global prices have shrunk by 2.15% in the same period.

VNPost to get separated from VNPT at month-end

Vietnam Post Corporation (VNPost) will be separated from Vietnam Posts and Telecommunications Group at the end of this month to operate independently.

VNPost will then be put under the administration of the Ministry of Information and Communications. The transfer of VNPost from VNPT, including the whole organization and labor, postal networks, capital and assets, is set to be carried out on December 19-21.

At a recent meeting with the Ministry of Information and Communications, chairman of VNPT Pham Long Tran said that VNPT was ready for the transfer of VNPost. Regarding some assets jointly used by other postal firms under VNPT, VNPT will transfer them after evaluating the asset values.

According to Deputy Minister Nguyen Thanh Hung, the separation and transfer is carried out based on Decision 1746/QD-TTg issued on November 16 by the Prime Minister. The transfer of VNPost to the ministry is just a change in ownership, and all operations of VNPost are still as usual.

HCM City budget target under scrutiny

The target for HCMC budget collection in 2013 was dissected at the ongoing meeting of the city’s People’s Council on Wednesday.

Deputy To Thi Bich Chau from District 4 said: “Domestic revenue in 2012 fails to meet the target (VND111 trillion versus VND123.3 trillion). Then why is the domestic revenue target for 2013 set at VND134.08 trillion regardless of the current tough times?”

Deputy Huynh Cong Hung from Thu Duc District suggested the problems of inventory and bad debt should be resolved, or else the city’s budget collection target would hardly be obtained.

In response, Dao Thi Huong Lan, director of the HCMC Department of Finance, said: “The Ministry of Finance allocates annual budget target beyond the ability of the city.” She demonstrated that since 2006, domestic revenues in HCMC had always been lower than the targets set by the ministry.

As for next year, the target that HCMC aims for and the one the finance ministry wants the city to achieve had a difference of VND7.5 trillion. The National Assembly then requested this target to be raised by VND4.05 trillion, widening the gap to over VND11 trillion

Since the HCMC budget collection target for 2013 was already decided by the National Assembly and the finance ministry, Chairwoman of the HCMC People’s Council Nguyen Thi Quyet Tam asked the deputies to discuss how to reach this target.

Nguyen Dinh Tan, director of the HCMC Department of Taxation, said the city should nurture revenue sources, suggesting extending VAT and corporate income tax payments.

He proposed the HCMC government carefully consider Decision 64 on land use fee and land use right transfer, which charges high land use fees on enterprises and citizens.

The municipal tax authorities will continue administrative reform to make it easier for tax declaration and payment, he said.

Promoting economic growth is another way to increase budget revenue. Deputy Huynh Cong Hung suggested raising added value of goods to help the economy overcome the difficult situation.

In order to do so, the city should invest more in science-technology research to add more values to products, he said.

The cumbersome procedures at present discourage scientists from conducting researches. Moreover, human resources and facilities for scientific research in HCMC are very poor, said Phan Minh Tan, director of the HCMC Department of Science and Technology.

Open-end model gains popularity

Domestic fund management companies have recently become more active in preparing for the establishment of open-end funds.

The Vietnam Active Fund (VFA) has drawn up a plan to convert to an open-end fund next year which was approved at the annual shareholders’ meeting earlier this year. It held another meeting yesterday to adopt a conversion scheme.

The fund plans to delist from the HCM City exchange by the end of this year, in line with regulations for open-end funds, and get the ball rolling for the planned launch next April.

Vietnam Fund Management Company (VFM) also plans to convert its Vietnam Blue Chips Fund (VFMVF4).

An open-end fund is a collective investment scheme that can issue and redeem shares on demand. Investors buy and sell fund certificates directly from the fund itself, rather than from existing shareholders. This contrasts with a closed-end fund where all shares are issued in an IPO and then traded on an exchange.

According to the VFM, investment habits were likely to change when open-end funds were introduced, including transaction times and costs. However, net asset value and market price of the fund certificates would always be in equilibrium, which could not happen with close-end funds.

Nguyen Doan Hung, vice chairman of the State Securities Commission, said establishment of open-end funds was an inevitable step in Viet Nam as 95 per cent of funds in the world were open-end.

Manulife Growth Investment Fund (MAFBF1) and EastSpring Investments Fund Management LLC also plan to establish open-end funds next year.

The establishment of open-end funds in Viet Nam was approved under Circular No 183 which took effect from March 1. However, the prolonged market downturn led to investors turning their backs on the new product.

VFM planned to introduce the first open-end fund, the VFM30, earlier this year, but postponed due to lacklustre market development. Investors have also voiced their concerns over the current high tax policy which is discouraging potential investors. According to international practice, to attract investors, the Government should introduce preferential policies, including tax incentives.

However, with more firms looking to set open-end funds, it is a positive sign given the current state of the gloomy market. “Spending VND50 billion (US$2.4 million), the minimum for an open-end fund, to test the new model is not too much for most large domestic investors,” Nguyen Van Duong, general director of An Phuc Securities Investment Fund Management Company was quoted as saying in Dau tu Chung khoan (Securities Investment).

EU nations’ trade potential eyed

Viet Nam and four central and eastern European countries – Czech Republic, Hungary, Poland and Slovakia – have the potential to boost trade and investment co-operation in many sectors, a senior official said at a conference in HCM City yesterday.

The ties with each country would generate unique advantages, said Nguyen Duc Thuong, deputy director general of the Ministry of Industry and Trade’s European Market Department.

He said the four countries “have high demands for products that are our strength, including agriculture products, footwear, garment and textile and wooden products.”

Trade between Viet Nam and these four countries increased strongly in recent years, with Viet Nam enjoying a surplus, he told the seminar that sought ways to find co-operation opportunities to enhance trade and investment ties with Czech Republic, Hungary, Poland and Slovakia.

“As I know, the mechanical engineering industry, food industry and high technology industry in these countries are well developed, providing good quality machinery and equipment at competitive prices,” he said.

“Therefore, besides seeking chances to boost exports to these markets, Vietnamese enterprises should pay more attention to importing mechanical products, machinery and equipment and even some hi-tech products from these countries,” he said.

Milan Vagner, Economic Counsellor at the Embassy of Czech Republic in Ha Noi, said enterprises from his country could provide Viet Nam with advanced technology in environmental treatment, mining, agriculture, packaging, food and beverage, and other sectors.

Cars and auto spare parts, aircraft, software and communication are other areas that present good co-operation potential, he said.

The Czech Republic can also help Viet Nam to develop its glass industry, glassware, biotechnology and nanotechnology, Vagner said.

Lenart Istvan, Commercial counsellor of the Embassy of Hungary, said that apart from the food items, medicines, and medical devices, Hungary could provide Viet Nam with agriculture and harvesting technology, environmentally friendly fertilisers and biofertilisers, milk processing technology, water management technology, energy recycling technology and banking software security systems.

“We can also provide more facilities in the field of biotechnology, nanotechnology and automotive technology,” he said.

He called on Vietnamese companies to open representative offices or set up joint ventures in Hungary, citing low property prices and competitive labour costs compared to other European countries.

In the last few years, Vietnamese enterprises had shown increasing interest in investing in Hungary, he noted.

More and more Vietnamese banks are interested in the European market, with BIDV and Vietinbank both opened offices in Europe recently.

“I hope that other banking institutions will come to Hungary to invest,” he said.

Hungary prioritised the creation of more jobs, so the government “has many ways to support investors” including tax reduction and other incentives, he said.

Wojciech Gerwel, economic counsellor of the Polish Embassy and Jaroslav Jelenik, economic counsellor at the Slovak Embassy also presented their respective strengths of their countries and highlighted areas that have high co-operation potential with Viet Nam.

Besides the agriculture, hi-tech and pharmaceutical industries, Poland can offer high-end technology in coal exploitation to Viet Nam, since it is the 8th top coal producer in the world, said Wojciech.

Jaroslav said that Slovakia was looking to boost trade and investment ties with Viet Nam in machinery, precision engineering, metal processing, electronics, mechanical and pharmaceutical industries, as well as other areas that it is strong in.

“Slovakia wants stronger business ties so that it can narrow the trade deficit it now has with Viet Nam,” he said.

With its favourable geographic location, Slovakia can be a gateway for Vietnamese businesses to reach the big population in Europe, he said.

As of November this year, Slovakian firms had invested in five projects in Viet Nam with a total registered capital of US$235.5 million; Polish firms had 10 projects with a combined capital of $100 million; the Czech Republic had 27 projects with $65.5 million; and Hungary had 12 projects worth $47.3 million.

Myanmar licenses US$300 mil Vietnam project

The Myanmar Investment Commission has granted an investment license to a US$300 million housing project to Hoang Anh Housing Development and Construction Joint Stock Company (HAGL Land).

The company will build a trade centre-hotel-apartment complex called Hoang Anh Gia Lai Myanmar Centre on an area of 8 hectares in the former capital city of Yangon.

HAGL Land leaders said that after a long time for negotiations, legal procedures have been completed and land clearance has been carried out.

The project is divided into two phases, with the first to be implemented within three years, focusing on building a trade centre, offices for lease and a five-star hotel. In the second phase, a residential area and the second office block will take shape in three to four years.

Increasing cooperation in Development Triangle Area

Delegates from Cambodia, Laos and Vietnam gathered on December 6 at separate meetings of four subcommittees of Economy, Security-External Relations, Environment-Society and Local Coordination to discuss measures to foster cooperation between the three sides.

The meetings are part of a series of events for the 8th Meeting of the Joint Coordination Committee for the Cambodia-Laos-Vietnam (CLV) Development Triangle Area, which is taking place in the Central Highlands province of Kon Tum, Vietnam.

At the discussions, the three parties assessed the implementation of agreements reached at the 7th meeting that took place in Attapeu province of Laos in 2011, and future orientations for cooperation.

Delegates touched upon issues of mutual concern, including bomb clearance and unexploded ordnance (UXOs) clearance in the border regions, and the upgrade of border gates for better connectivity in the economic corridor.

They suggested holding regular and timely information exchanges, solutions to accelerate border demarcation between Vietnam and Cambodia, and planting and upgrading border markers between Laos and Vietnam.

At the Economic Subcommittee meeting, officials discussed new proposals for an agreement that will boost trade cooperation among the three countries.

The parties also suggested hosting a CLV conference with sponsors, including Japan, the Republic of Korea, the World Bank and the Asian Development Bank in 2013.

Vietnam, China border provinces boost cooperation

The fifth meeting of the joint working committee of four Vietnamese provinces Cao Bang, Lang Son, Quang Ninh, and Ha Giang and China’s Guangxi Zhuang Autonomous region was held in Cao Bang on December 6.

Addressing the meeting, Minister, Chairman of the Government Office Vu Duc Dam affirmed that the cooperation mechanism between the four Vietnamese provinces and Guangxi province of China has proved its effectiveness, bringing practical benefits for the people of the border localities.

To further increase development, both sides should maintain regular exchanges between leaders of the four Vietnamese provinces and China’s Guangxi Zhuang Autonomous region, increase delegation exchanges between border districts and establish relations between branches, agencies and organisations to promote mutual understanding and trust, Dam said.

They should strengthen the popularisation of the Vietnam-China friendship to raise peoples’ awareness of the importance of the two countries’ comprehensive strategic partnership of cooperation, he added.

At the meeting, the two sides agreed that during the last year, Vietnamese and Chinese provinces have made full use of their advantages, encouraged business investment and held joint investment and trade promotion activities within the framework of the Vietnam-China “two corridors, one economic belt” framework agreement.

They also reached a common perception on further enhancing their comprehensive cooperation in many fields.

Leaders of the Vietnamese and Chinese provinces signed the minutes of the meeting and witnessed the signing ceremony of an MoU on the building of an information exchange mechanism between the Foreign Affairs Departments of Cao Bang, Lang Son, Quang Ninh and Ha Giang, and the Foreign Affairs Office of China’s Guangxi Zhuang Autonomous Region.

Vietnam-India investment under discussion

A seminar was held in HCM City on December 6 to discuss investment opportunities and promote trade ties between Vietnam and India.

At the event, business representatives shared information on the markets macro economic policies, the ASEAN-India Free Trade Agreement, as well as issues relating to education and training, information technology, agriculture and pharmaceuticals.

According to the Vietnam Chamber of Industry and Commerce in HCM City, two-way trade turnover between Vietnam and India reached just under US$4 billion in 2011, up four-fold on 2006 figures.  Turnover has reached US$2 billion over the first half of 2012.

There is a positive sign that Vietnam’s trade deficit with India has narrowed in recent times, hitting just over US$330 million in the year to June, down 45 percent against the same period last year.

Indian ambassador to Vietnam Ranjit Rae highlighted that 2012 marks the 20th anniversary of the ASEAN-India partnership, the 40th anniversary of diplomatic ties between Vietnam and India and the 5th anniversary of their strategic partnership.

He expressed his expectation that bilateral trade will reach US$7 billion in 2015, but it will require greater efforts from both governments and their respective business communities. .

He emphasised the need to put forth new initiatives, such as conducting surveys in each sector, making concrete recommendations and exchanging trade delegations regularly.

At present, India is investing in 61 projects in Vietnam, capitalised at US$258 million. Both nations are striving to bring two-way trade to US$7 billion by 2015.

Telephone and component exports to EU hit US$5bil

Vietnam’s telephone and component exports to the EU have continued to grow, worth an estimated US$5 billion this year.

The information was unveiled at a seminar in HCM City on December 6 to discuss cooperative opportunities in trade and investment between Hungary, the Czech Republic, Slovakia and Poland.

Nguyen Duc Thuong, Vice Head of the European Market Department under the Ministry of Industry and Trade, said that from 2000 to 2011, Vietnam-EU trade turnover has increased 5.9 times, from US$4.1 billion to US$24.3 billon.

Vietnam-EU trade turnover saw positive results despite the global economic downturn in 2011-2012, up 36.9 percent over 2010 and 16.5 percent over 2011.

Vietnam’s key export items include footwear, garments and textiles, seafood, coffee, wood products, and electronics. Other products have also maintained high growth rates, such as rubber, plastics, cashew nuts, and pepper.

At the seminar, trade officials were briefed on the Vietnamese business environment, key industries, transport network and strategic locations, as well as the role of infrastructure in their own countries, serving as a bridge for Vietnamese goods to penetrate the EU market.

In response, they called on Vietnam’s business community to consider investment in their respective countries.

Hungarian Commercial Counsellor Lenart Istvan said that bilateral trade turnover between Vietnam and Hungary has reached US$80-90 million per annum. Both nations have also implemented cooperation programs in the import-export of food. However, Hungary has comparative advantages in pharmaceuticals, automobile manufacturing, and food packaging.

Currently, many Hungarian companies are seeking to invest and build factories in Vietnam.

Polish Commercial Counsellor Wojciech Gerwel said that Poland has a dynamic and developed economy and Vietnamese businesses have many opportunities to do business there. Poland has comparative advantages in areas such as scientific research, cosmetics, food and confectioneries.

Vietnam attends World SME Expo in Hong Kong

Vietnam has opened a stand to promote its trade, commerce and investment environment to thousands of visitors at the World Small and Medium Enterprise (SME) Expo, which opened in Hong Kong on December 6.

Expo attendees gained valuable knowledge of key Vietnamese businesses, as well as trade and investment policy and staple export products, such as garments, seafood, cashew nuts and coffee.

The Hong Kong Trade Development Council (HKTDC), the Expo’s organising board, praised the success of the Vietnamese stand, saying that it will help boost exports from Vietnam to Hong Kong and other countries in the coming years.

This year’s World SME Expo drew 700 exhibitors from 20 countries such as the US, Canada and various ASEAN members.

Trade turnover between Vietnam and Hong Kong has developed rapidly in recent years, reaching US$3.7 billion in just the past 10 months of 2012, and already surpassing the total for 2011.

By October this year, Hong Kong had invested in 692 projects in Vietnam with a total registered capital of US$11.916 billion, ranking it sixth out of 96 investor countries or territories.

Conference improves Vietnamese competitiveness

Redefining Vietnam’s competitive advantages through improving its capacity to cope with risk was the main theme for discussion at a conference held in Hanoi on December 6.

At the event, jointly held by the Vietnam Ministry of Foreign Affairs (MoFA) and the World Economic Forum (WEF), Deputy Minister Bui Thanh Son stressed that Vietnam’s top priority is to improve its competitiveness to meet the needs of economic development, while minimising the negative impacts of the global financial crisis.

After 20 years of pursuing the renewal process, Vietnam has changed from an underdeveloped country to one with more sufficient average incomes, recording remarkable achievements in many important fields, he said.

Deputy Minister of Industry and Trade (MoIT) Tran Tuan Anh said the Vietnamese economy has shifted from planned to  market-orientated and has gradually integrated into the world economy.

However, it now has to face with many challenges caused by the global economic recession.

Therefore, Vietnam needs to adjust its economic model, with a strong focus on enhancing the capacity of its labour, which is presently lower than many other equivalent regional and international nations. The government should pay due attention to raise the contributions from its key economic sectors, especially from industry and services, he concluded.

The conference provides a good opportunity for attendees to share experience and to work out proper policies for economic development and attracting foreign investment.

Mekong Delta business forum kicks off

The 2012 Mekong Delta Business Forum opened in My Tho city, Tien Giang province, on December 6.

More than 300 delegates will engage in discussing measures to help the Mekong Delta region achieve sustainable growth, implement the modernization process and integrate well into the world economy.

The focus of discussion will be generating jobs, expanding markets and improving the competitiveness and social responsibility of domestic businesses.

They suggested local firms seek appropriate growth models for the benefit of healthy business operations.
On this occasion, a Mekong Delta business association has made its debut with the participation of more than 44,000 domestic and foreign-invested businesses on a small or medium scale.

Vietnam joins WTO Government Procurement Agreement

Vietnam has been approved for participating in the WTO’s Government Procurement Agreement (GPA) as an observer.

The approval was made by the GPA Committee on December 5, bringing the number of GPA observers to 26.

Ambassador Nguyen Trung Thanh, head of the Vietnamese Delegation to the United Nations and the World Trade Organisation in Geneva, said that since Vietnam joined the WTO in 2007, the country has been opening up its market and ensuring transparency in line with the organisation’s regulations.

Despite the negative impact of the global financial crisis, Vietnam has actively integrated into the world economy thanks to its economic reform process, he said.

Thanh affirmed that over the years, Vietnam has made constant efforts in adjusting its policies and legal documents in line with GPA regulations. As an observer of the WTO’s GPA, Vietnam is trying its best to become an official member.

The GPA Commitment’s Chairman, Bruce Christie, emphasized that GPA is one of the WTO’s most important agreements which is designed to ensure transparency, increase competitiveness in bidding activities, and raise the efficiency of budget spending, especially in developing countries.

Representatives from the WTO’s GPA members such as Canada, the Republic of Korea, Singapore, Switzerland, and Norway, praised Vietnam’s participation in the agreement as an observer, and expressed their support for the country’s official membership bid.

Stabilizing market prices during New Year Festival

Deputy Prime Minister Hoang Trung Hai has asked ministries and agencies to stabilize the prices of essential commodities during the coming traditional New Year Festival (Tet).

Addressing a conference held by the Ministry of Agriculture and Rural Development (MARD) in Hanoi on December 5, Mr Hai stressed the need to ensure an adequate supply of commodities to prevent price hikes.

According to the Vietnam Food Association (VFA), more than 1,200 price stabilization shops have been set up in all provinces and cities across the country with 1.44 million tonnes of rice and a huge volume of other essentials such as sugar, milk, cooking oil, processed food, and noodles already in stock.
In the northern region, market prices remain under control despite a drop in meat output compared to last year due to the spread of epidemics like bird flu, blue-ear disease in pigs and foot and mouth disease in animals.

In the southern region, the prices of basic goods, especially raw meat, are predicted to rise 5-8 percent.

The MARD has provided assistance to provinces and cities to help them develop the breeding and aqualculture sector, combat epidemics, and prevent cross-border smuggling.

Participants in the conference raised their concerns over the smuggling of pork through the border. They said the shortage of meat on the local market might be caused by China’s purchase of Vietnamese pork at higher prices.

MARD Deputy Minister Vu Van Tam emphasized that it is urgent to control the prices of feed for animals which are growing by 10-15 percent.

World Bank urges widescale reforms

The World Bank warned that Vietnam would continue to face risks to its macro-economy stability, predicting the nation’s GDP would close at 5.2 percent in 2012 in stead of the planned 6.5 percent.

At the press conference before the bi-annual Consultative Group Meeting, to be held in Hanoi on December 10, Deepal Mishra, leading economist for the bank in Vietnam, said the risks included high-core inflation and low levels of foreign-exchange reserves, a vulnerable banking sector, and delays in equitisation of State-owned enterprises.

This year’s meeting will focus on the elements laying the foundation for Vietnam’s sustainable growth, which also includes discussion on the nation’s land law and education reforms.

World Bank country director Victoria Kwakwa said donors considered land-law reform as the critical element for Vietnam’s inclusive and sustainable growth.

Kwakwa also noted that donors have been talking about making changes to the Consultative Group’s platform as Vietnam entered a new stage of development, noting that in the future it would move away from resources mobilization to candid conversation on all solutions.

“It’s more about policy dialogue, not so much about the money”, she said.

Still, donors are expected to release a new funding commitment for Vietnam in 2013 at the end of this year’s meeting. Last year, donors pledged nearly US$7.4 billion in Official Development Assistance (ODA) for the country.

Fuji Xerox invests US$110 mil to build a factory in Vietnam

Fuji Xerox Co, Ltd has decided to invest US$110 million to build a factory at Vietnam-Singapore Industrial park in Hai Phong city.

At a press conference on December 4, Executive Vice President and Director of Fuji Xerox Co, Ltd, Hitoshi Fujiwara, said that the construction of this factory is part of the company’s plan to increase productivity and expand business around the globe.

Construction work on an area of 176,700 square metres will start in January, it scheduled for completion in December next year.

The factory will provide 500 jobs for local labourers in the initial stage and around 3,000 jobs when it goes into stable operation.

Mr Fujiwara said that the factory will produce digital colour multifunction devices and small-sized light-emitting diode (LED) printers with a design capacity of around 2 million units per year as well as printed wiring boards and drum cartridge components for domestic consumption and export to other markets in the Asia-Pacific, the US and Europe.

Fuji Xerox representatives said that they selected the location of factory in the northern port city of Hai Phong due to its convenient transport network. Moreover, Vietnam is advancing steadily in the industrialisation process.

Mr Fujiwara said after the factory in Hai Phong is put into operation, the company will build another in Vietnam-Singapore Industrial Park in the future.

VietJetAir announces promotion

The low-cost carrier VietJetAir will launch a huge promotion for its forthcoming HCM City-Bangkok route, selling tickets for only VND12,000 (US$0.57).

This dramatic promotion will run from 9pm to 11.59pm next Wednesday. The carrier will also offer a second sale at the same time on December 20 in which tickets will cost only VND99,000 ($4.5).

Promotional tickets can be applied to flights from February 10 to December 31, 2013 and must be paid for online with a Visa or Mastercard credit card.

VietJetAir is Viet Nam’s first private airline to be eligible to open an international route.

Sunrise Hoi An ranks Gold Circle

Sunrise Hoi An Resort received the 2012 Gold Circle award from Agoda.com, the global hotel booking site.

Launched in 2009, the awards are a unique Agoda initiative created to recognize outstanding hotel partners that work closely with Agoda to create a superior online product.

This year, Agoda also took into consideration several criteria such as aggregate scores for customer reviews, top-performing properties and competitive pricing. Hotels were also awarded points for showing an understanding of the complex business dynamics that define the industry.

Ariston Thermo Group builds new plant

The Italian Ariston Thermo Group began the construction of a US$18 million plant in northern Bac Ninh Province yesterday, its first plant in Viet Nam and the second largest one in Asia.

“Ariston plans to have 80 per cent of its business come from high efficiency and renewable solutions by 2020,” said General Director of Ariston Thermo Viet Nam Stefano Cartoni. “The new plant, therefore, will lay a solid foundation for the Group to achieve its vision and mission in the Viet Nam market.”

Located on a 5-ha area of the province’s Tien Son Industrial Park. the plant is expected to come into operation in February 2014 with a capacity of 1 million products per year, mainly supplying Viet Nam and the Southeast Asian markets.

Employing advanced technology such as an Italian water heater production line and on-site waste water treatment system, the plant is expected to shorten the product development and launch stages in order to meet the increasing demand for thermic comfort in Viet Nam.

Exhibition highlights health care wares

Viet Nam Medi-Pharm Expo 2012 got underway in Ha Noi on Wednesday showcasing latest medical equipment and products.

The exhibition witnessed the participation of 120 companies representing 15 countries and territories in the world such as the US, Russia, Italy, Japan, India, Thailand, Pakistan, Chinese Taiwan and the host country.

Besides a wide range of products on display in 150 pavilions, the four-day event also offers chances for participants to share experience, seek partners and boost trade ties.

Apart from the exhibition, a seminar providing updated information on Viet Nam’s medicine and pharmacy market and fact-finding tours to pharmaceutical producers and hospitals in Ha Noi will also be held.-

Crew supply vessel for oil rigs launches

The Song Thu ship-yard, in co-operation with Damen Group from the Netherlands, has launched a crew supply vessel following a contract with joint venture company Vietso Petro, the ship-yard builder told Viet Nam News yesterday.

The ship, which is 53.2m long and 10.1m wide, was built to serve offshore oil rigs and travel as fast as 27 nautical miles per hour.

In May, the Vietnamese shipyard and Dutch Damen Group handed over a fast crew supply vessel to Mexico’s Naviera company.

The company has also begun construction work on a rescue ship for the Viet Nam Marine Police force.

Regional connection, sustainablity targets for Delta forum

The Mekong Delta Economic Co-operation Forum is under way in southern Tien Giang Province, with sustainable development of the nation’s biggest rice bowl high on the agenda and improved connections with HCM City and other regions also a priority.

Deputy Prime Minister Vu Van Ninh and more than 600 Vietnamese and foreign participants attended the opening of the five-day forum in My Tho city on Wednesday.

Addressing the forum, Ninh encouraged government officials and businessmen to exchange information, choose potential projects and solve difficulties together.

He also asked the authorities of Mekong Delta provinces to pay more attention to planning in the region, especially in the fields of irrigation, aquaculture and seafood processing.

The forum, held annually by the People’s Committee of Tien Giang Province and Southwestern Steering Committee, gathers opinions of business communities, investors, scientists and farmers to submit proposals to the Government.

Based on their submissions, the Government will produce policies to support investment in the region for a green, sustainable and effective agriculture.

Bui Ngoc Suong, deputy chief of the Southwestern Steering Committee, said the term “regional connection” had been on the table for several years.

“Connection is not only the target but also the motive and method for Mekong River Delta provinces to develop sustainably in a relationship with HCM City and other local and international regions based on their geographical and economic advantages,” said Suong.

Themed “Agriculture of High Quality and Sustainable Development”, the forum features a series of events, including an Entrepreneur Conference, Farmers Forum, International Consultant Conference, Economic Forum Steering Committee Conference and a Mekong Fruits Fair.

At the International Consultant Conference, delegates will discuss four scenarios on how to develop the Delta in the context of coping with climate change.

Meanwhile, the Trade Promotion Conference is expected to establish an association of Delta businesses to gather their ideas and economic strength.

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

No comments yet... Be the first to leave a reply!