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BUSINESS IN BRIEF 9-1Finance approved to build power plants

The Electricity of Viet Nam (EVN) yesterday signed a credit contract worth VND2.5 trillion (US$119.05 million) with the Viet Nam Development Bank (VDB) to develop the Vinh Tan 2 and Duyen Hai 1 thermo-electric plants.

The amount will be financed by the State Bank of Viet Nam. The two factories have a combined capacity of 2,400MW and a total investment capital of over VND52.7 trillion ($2.5 billion).

EVN board chairman Hoang Quoc Vuong said the conclusion of the contract was very important for power supply development in the context of economic difficulties. The projects are being developed in order for the plants to contribute further to the electricity systems of the southern region and the country as part of a national master plan to develop power sources up until 2015. The electricity company began construction of Vinh Tan 2 in the south-central province of Binh Thuan in August 2010, and started construction of Duyen Hai 1 in partnership with a Chinese company in the Mekong Delta province of Tra Vinh the month after.

At the end of last year, EVN had over 80 power supply and grid projects sponsored by the VDB with a total registered funding value of about VND36.9 trillion ($1.76 billion). These included key national projects including the Son La, Lai Chau, Huoi Quang and Ban Chat hydroelectric plants.

According to VDB general director Nguyen Quang Dung, about 39 per cent of the bank’s total outstanding loan went into power projects, 45.6 per cent of which were invested in by the EVN.

Quang Ngai chases investment

The central province of Quang Ngai aims to improve its investment climate this year in a bid to sharpen its competitive edge and draw more investment capital, secretary of the provincial Party Committee Vu Van Thuong said during an investment promotion conference in the province on Saturday.

Top priority would be given to supporting foreign and domestic investors and creating more jobs for local people, he said.

Speaking at the event, chairman of the provincial People’s Committee Cao Khoa said he considered industrial development a key task of the province by 2015.

“We strive to become an industrialised province by 2020,” Khoa said. “Besides the Government’s preferential policies, we have prepared fresh land and other sources to attract foreign and domestic investors.”

During the event, which emphasised the importance of drawing investment into the Dung Quat Economic Zone and other industrial zones and trade villages in the locality, participants were briefed on the large-scale projects going on in the province, such as the Dung Quat Economic Zone (EZ), home to Viet Nam’s first oil refinery.

The Prime Minister recently approved a plan to expand the EZ about 4.5 times in area to 45,332ha by 2025, with the goal of turning it into an open industrial city.

It was among five coastal economic zones around the country to receive prioritised fundings from the State’s budget in the next three years.

After the Prime Minister’s decision to expand the zone, a rising number of investors have come to seek investment opportunities.

Dung Quat aims to attract total investment capital of US$15 billion by 2015 and $25 billion by 2020 with a focus on heavy industries, hi-tech industries, services and urban development, said deputy head of the zone L Van Dung.

Quang Ngi’s economic and industrial zones have attracted 289 projects to date, worth a combined VND177.5 trillion ($8.65 billion).

Of the sum, 22 were foreign-invested, capitalised at $3.9 billion.

Vietnamese property developer targets Myanmar

In contrast with the dismal state of the real estate market in Viet Nam, the Hoang Anh Gia Lai Group has announced it has invested in a US$300 million mega-complex building in Yangon this year.

The group said it expected to reap large profits from the project within five years, the group’s director Doan Nguyen Duc was quoted as saying on the online site VNExpress.

The second wealthiest man in Viet Nam’s stock market said this was the best time to invest in Myanmar’s property market. For three years, the local property market has cooled down to “0 degrees Celsius”, but Myanmar’s has heated up, Duc was quoted as saying.

He noted that the swift-footed would win big if they entered the Myanmar market now.

The first phase of the project is expected to be completed this year and put into use in 2014.

The group will export about 30,000 tonnes of steel and 200,000 tonnes of cement and other materials from Viet Nam, including stone, glass and wood, to Myanmar for the project’s construction.

Duc said he had received favourable conditions to invest in Myanmar.

He pointed out that transporting steel from a factory in Viet Nam to Yangon would cost 20 per cent less than transportation in Viet Nam.

For example, expenses for transporting cement from Viet Nam’s Quang Ninh Province to Yangon by sea would be cheaper than road transport from the province to HCM City.

In addition, labour costs in Myanmar are only half those in Viet Nam.

Duc, who said he had been studying the market for the last two years, pointed out that supply in the Myanmar property market was low and three to four times higher in price than in Viet Nam.

A grade-B office in Yangon rents for $80 per sq metre a month, four times higher than in HCM City. Grade-A offices rent for $100 per sq metre a month. A room at a four-star hotel is $300-400 a night, with many hotels booked because of the lack of supply.

Duc said that he would receive about $300 million after selling 1,000 apartments, with a selling price of $300,000 on each 60 sq-metre apartment.

With a leasing price of $80 per sq metre a month, he could earn $100 million for an office building.

With broad economic reform and incentive policies, Myanmar has become a target for investors from every corner of the world.

The demand for offices, trading centres, hotels and apartments will rise sharply, according to Duc, who has invested in Viet Nam and Thailand, predicted that Myanmar’s real estate market would reach “80 degrees Celsius in 2018”. So, he needs to complete the first phase of the project this year.

Viet Nam’s investment in Myanmar is expected to reach $2 billion by 2015, according to the Association of Vietnamese Business Investors in Myanmar.

Tourism industry fears surge in visa prices

Tourism companies fear higher fees for visas from January 1 might affect the growth of the tourism industry.

The fee for a single-entry visa rose from US$25 to $45 while multiple-entry visas of one-month, six months and over six months went to $65, $95 and $135 respectively.

Residence cards now cost $80, $100 and $120, depending on their validity of one, two or three years.

Vice President of the Viet Nam Tourism Association Vu The said international tourist arrivals would decrease, which might damage the tourism industry and the economy as a whole, reported online Saigon Economic Times.

Tour company director Nguyen Thi Kim Lan said higher fees would increase tour costs and lower the competitiveness of Viet Nam in comparison to other countries in the region.

In times of economic difficulty, prices were an important factor in deciding destinations for tourists, he said.

This year, the tourism industry aimed to lower prices to attract tourists but the policy would become a barrier to that development, he said.

At a recent meeting of the HCM City Association of Tourism, many tourism companies suggested the visa fee hike to be cancelled, saying that the economic crisis would continue to impact on the tourism industry.

Statistics show international visitors in December last year numbered 614,673- 6.26 per cent lower than the previous month. The figure for the full year reached 6.847 million, a rise of 13.86 per cent over 2011.

Viet Nam expects over 7 million visitors in 2013

Viet Nam’s tourism sector has set a target of 7.2 million foreign visitors for this year, and expects to serve 35 million domestic tourists – increases of 5.15 per cent and 7.69 per cent respectively over last year.

The sector anticipates tourism will generate VND190 trillion (US$9 billion) this year, up 18.75 per cent from last year.

According to deputy director of the Viet Nam National Administration of Tourism Nguyen Manh Cuong, if the targets were reached, Viet Nam would be two years ahead of its previously set schedule.

First desalination equipment sent to Saudi Arabia

Doosan Heavy Industries Viet Nam has shipped 3,500 tonnes of desalination equipment to a project in Saudia Arabia after two-years of processing.

It’s the first cargo the company has sent this year, and the second made-in-Viet Nam multi-stage flash shipment to the Ras Al Khair development projects in Saudi Arabia.

As scheduled, the Quang Ngai-based heavy industries company will complete production and shipments of 7,000 tonnes of equipment and components – the last cargo – to the project next month, the company told the Viet Nam News.-

Central city’s businesses to receive BIDV loan

The Bank for Investment and Development (BIDV) of Viet Nam has agreed to provide a loan of VND10 trillion (US$476 million) for infrastructure projects in the central city.

In a meeting between BIDV and the Da Nang People’s committee on Sunday, the city’s administration guaranteed access to bank credit for six top businesses.

Following the agreement, the Sun Group will be granted a loan of VND2.5 trillion ($119 million), while the Trung Nam Group will receive VND1.8 trillion ($86 million) for key infrastructure projects.

SBV grants gold trading licences to more firms

State Bank of Viet Nam (SBV) plans to continue granting gold bullion trading licences after the Lunar New Year, including four credit institutions and further enterprises.

According to SBV branch in HCM City, 31 enterprises, including 17 credit institutions and 14 enterprises have received licenses and are preparing to start trading gold on Thursday.

After Thursday, SBV will conduct inspections on these firms to deal with any violations.

The central bank will also continue its strict management of the gold market as stipulated by Decree 14 and Circular 16.

Southern province gains investment in December

The southern Long An Province attracted nine new investment projects in December, boosting the total number of projects in the province last year to 101, according to the Management Board of Industrial Zones.

The new schemes include five domestic projects with a total registered capital of VND190 billion (US$9 million) and four FDI projects worth $13.1 million.

The projects are expected to create 700 new jobs.

As the end of 2012, the province had attracted 59 domestic projects and 42 FDI projects with total registered capital of over VND2.575 trillion ($123 million) and $125.45 million respectively.

Rice exporters face tough year

Viet Nam’s rice exporters face difficulties ahead, especially in the first quarter because of low demand in the global market and stiff competition among other exporting countries, according to the Viet Nam Food Association (VFA).

Speaking at a meeting in HCM City yesterday to set tasks for 2013, the VFA’s deputy chairman, Pham Van Bay, said that businesses had exported a record high of 7.72 million tonnes of rice for a free-on-board (FOB) value of US$3.45 billion last year.

This represented an increase of 8.29 per cent in volume but a fall of 1.98 per cent in value compared to last year, due to lower export prices.

The average FOB export price in the period was $446.86 per tonne, a year-on-year drop of $46.85 per tonne.

“There was a big change in the country’s rice exports last year since exports of high-grade and fragrant rice increased strongly compared to 2011 and accounted for nearly 54 per cent of total exports,” he said.

Countries in Asia and Africa were the main buyers of Vietnamese rice, accounting for nearly 71 per cent and 21.7 per cent of the country’s total export volume, respectively, he said.

Currently, rice inventories at businesses are about 787,000 tonnes, much lower than last year.

In general, last year was a difficult year for the country’s rice exporters because of an abundance of supply and stiff competition from cheap rice sources in India, Pakistan and Myanmar.

“Viet Nam’s rice trade is expected to face last year’s situation again, when the trade was sluggish in the first quarter due to low demand,” Truong Thanh Phong, VFA chairman, said.

“With fewer contracts in the first quarter, the rice export sector will face even more difficulties ahead,” he said.

The traditional import markets of Vietnamese rice such as the Philippines, Indonesia and Malaysia are expected to import rice again but not in the first quarter, he said. With high inventories, countries in Africa will reduce rice imports this year, particularly in the first quarter.

India will continue to export rice but the export volume may be lower than last year’s due to lower output from the 2012-13 crop.

“Because of higher purchase prices, Thailand has accumulated a large inventory. So any measure to clear its stock has also had a strong impact on the world rice market,” Bay said.

“Asian and African countries will continue to be the main import markets of Vietnamese rice;” however, low-grade rice will have a difficult time entering these markets, especially Africa, since Vietnamese low-grade rice cannot compete with India’s.

“The association will resort to flexible management measures in rice exports this year, and keep a close eye on changes in the world rice market,”Phong said.

“It will also provide enterprises with up-to-date information to help them overcome difficulties,” he added.

Nguyen Van Tien, general director of Angimex, asked the Ministry of Agriculture and Rural Development and local authorities to instruct farmers to produce more “safe rice” so that Vietnamese rice quality will satisfy strict requirements demanded by markets such as Japan and South Korea.

Demanding market such as Japan has opened to Vietnamese rice, Tien said.

Enterprises asked the Government to quickly develop measures to stockpile 1.5 million tonnes of rice from the winter-spring crop in the first quarter to ensure profit for farmers.

They also asked farmers to increase the cultivation of high-grade rice in order to raise export value.

Pham Van Du, deputy head of the Cultivation Department, called on rice exporters to be more involved in large-scale rice field models by placing orders to buy rice produced at the model.

Viet Nam hopes to export about 7.5-7.6 million tonnes of rice this year, slightly lower than last year, with 1.4 million tonnes expected to be shipped in the first quarter.

President urges firms to tap potential in world markets

President Truong Tan Sang has called on Vietnamese businesses to tap the potential in domestic and international markets and to continue promoting the country and people.

Sang was speaking at a meeting of entrepreneurs who received the 2012 National Trademark Award.

Last year, enterprises participating in the award programme signed contracts totaling more than US$1 billion. Their business helped the nation’s growth despite difficulties inside and outside the country.

Sang said great efforts had been made by the programme council and the Ministry of Industry and Trade to popularise the country’s brand names.

Sang also told them to continue creating favourable conditions for businesses to reach their targets, especially since the domestic and global challenges were forecast to continue.

With many foreign products actively gaining a foothold in the domestic market, local companies are finding it difficult to compete. To address the problem, the Prime Minister has approved the National Brand Programme with a view to promoting the image of Vietnamese products. The National Brand designation will be attached to a diverse range of high-quality products.

The programme has attracted active support of the local business community, hoping that it will help them build and enhance their brand names on both local and international markets, said Minister of Trade and Industry Vu Huy Hoang.

The programme aimed to increase competitiveness of Vietnamese products and services on both local and international markets, helping spur exports of industrial and processed products while limiting the export of unprocessed products and raw materials, Hoang said.

The National Brand designation would also help sharpen consumer awareness of both local and foreign products and help boost the image of Vietnamese products for quality and innovation, he said.

One of the primary elements of the programme would be to assist businesses gain market access and affirming the prestige of their products. Through the national trade promotion programme, businesses and associations would have chance to favourably impress local and international distributors, Hoang said.

Deputy Minister of Industry and Trade Tran Tuan Anh said that products selected to receive the National Brand designation would be expected to represent the pinnacle of their industry and keep pace with national value.

The 54 firms initially selected to join the programme operate in engineering, textile and garment, leather and footwear, financial services, electronics, IT, energy, and food products industries.

The criteria for their selection was that their products were well-recognised by consumers, built on sustainable development strategies, committed to allocating resources for brand development strategies, and dedicated to allocating resources for brand development.

Starch plant blamed for water contamination

A cassava starch processing plant in the central province of Quang Binh’s Quang Ninh District has been violating environmental protection regulations.

Deputy chairman of the district people’s committee Nguyen Ngoc Thu said on Sunday that Long Giang Starch Processing Factory had been releasing chemical waste into the environment and contaminating local water sources.

The factory has been instructed to halt operations until it implements measures to control such pollution.

Thua Thien-Hue expects to receive 2.5–3 million tourists in 2013

The central province of Thua Thien-Hue has implemented a key tourism initiative in the hope of attracting 2.5–3 million visitors this year.

The province will explore the international markets of ASEAN and Northeastern Asian countries; keep catering to the traditional overseas Vietnamese market as they visit their homeland from Europe, Northern America and Australia; and penetrate other potential markets including India, Russia, Latin America, South Africa, and the Middle East.

Developing high-end and luxury services will be a priority.

The province plans on making the most of its various festivals and folk games like the wrestling competitions in Sing and Thu Le villages.

It will expand some notable relic sites such as Ho Quyen (tiger fighting) arena, Voi Re temple, Tinh Tam Lake, and Tang Tho tower. The region’s intangible cultural heritage, like the tradition of Hue Royal Court Music, will be the centerpiece of promotional campaigns.

Other tourism products based on the province’s traditional crafts will also be introduced, such as bronze casting, paper painting, and flower making in Thanh Tien village, weaving in Bao La village, conical hats in My Lam, and knitting in A Luoi.

Hue will develop health and wellbeing tourism in some of the resorts near the hot springs of My An, Thanh Tan, and A Roang, and adventure tours—including skateboarding kayaking and sea diving—in Chan May-Lang Co and Canh Duong beach on Son Tra island.

Eco-tours will be run along the Huong River and its lagoons. The province is also intent on expanding its range of meetings, incentives, conferences, and exhibitions (MICE) tourism.

The province has recently focused on shopping tourism, establishing night and food market streets, and launching special offers and events to attract more tourists during the low season.

Vietnam increases investments abroad

According to the Ministry of Planning and Investments, Vietnamese enterprises invested in 712 projects abroad in 2012, with total registered capital of US$12.4 billion in 60 countries and territories.

In 2012 alone, 75 new investment projects were granted licenses with total registered capital of $1.3 billion in 28 countries and territories.

Several industries are developing rapidly, such as mining with capital of $2.3 billion; production of tools for electricity, gas, water heating and air conditioning crossed $400 million; agriculture, forestry and fisheries touched $500 million; and IT technologies reached $249 million.

Forecasts for 2013 show registered capital in foreign investment from Vietnam will be from US$1 to 1.5 billion.

Vietnam expects to attract $13-14 billion in Foreign Direct Investment (FDI) this year, according to the Ministry of Planning and Investment.

The Foreign Investment Agency under the Ministry of Planning and Investment announced at a press briefing in Hanoi on January 4 that the ministry will focus on improving the quality and effectiveness of FDI capital and how it is managed by the State.

Vietnam is focusing on two measures to increase FDI in 2013.One is removing barriers for investors involved in the service industry and the other is reducing inappropriate projects and dismantling the technical barriers related to international assistance.

FDI capital exceeded $13 billion in 2012. Japan was the largest investor with $5.13 billion, accounting for 39.5 percent of all FDI in Vietnam.

Up to $9.1 billion of FDI was registered in the processing and manufacturing sector– equivalent to 70 percent of the total in 2011.

MPI sets economic targets for 2013

Vietnam’s goals for 2013 are to strengthen its macroeconomic stability, cut level of bad debt, reduce inflation, and strive for GDP growth of 5.5 percent and a 10 percent increase in export turnover.

The Ministry of Planning and Investment (MPI) set these targets at a press conference in Hanoi on January 4, during which it also introduced socio-economic solutions to help fulfil its 2013 targets.

According to Minister of Planning and Investment Bui Quang Vinh, Vietnam’s inflation rate of 6.81 percent and GDP growth of 5.01 percent in 2012 will help the country obtain even higher GDP growth this year.

To solve bad debt and remove business obstacles, the ministry will submit to the Government and National Assembly a three-year plan (2013 to 2015) to allocate State budget to localities, ministries and sectors.

The Government and the MPI have directed localities, ministries and sectors to prioritise the settlement of bad debts in capital construction field in 2012 and provide capital for projects that will complete in 2013.

The ministry will also focus on providing market support, resolve inventories, create favourable conditions for production, and restructure the economy to ensure social welfare and improve the lives of people.

Many projects set up on southern trade cooperation

HCMC-based enterprises have established 110 projects in 20 southeast and Mekong Delta provinces in 2012 under a trade cooperation program between the city and these provinces, a city official said on Thursday.

The program has produced positive effects on developing goods distribution networks. However, it has more things to do in order to get into the deep, heard a review conference on the program held in HCMC on Thursday.

Le Ngoc Dao, deputy director of the HCMC Department of Industry and Trade, reported the city-based firms last year carried out 110 projects and joint projects in the provinces in the southeast region and the Mekong Delta.

They include 75 projects in livestock farming and agricultural production and 35 projects in the retail sector. The total cost of these projects are nearly VND8 trillion.

In particular, Vissan invests in five livestock farming projects in Binh Duong, Dong Nai, Ba Ria-Vung Tau and Long An, while Ba Huan spends some VND350 billion on breeds, animal feeds and technology, and provides consumption guarantees for farmers in Long An, Kien Giang and Binh Duong.

As for retail, Saigon Co.op sets up three supermarkets and Vinatex develops 11, among 35 markets, supermarkets and commercial centers that have been put into operation.

Dao said that after the cooperation agreement had been signed, the provinces introduced favorable policies to lure investors. Enterprises had regular meetings with provincial leaders and thus their problems were timely solved, she told the Daily on the sidelines of the conference.

Chau Minh Nguyen, deputy director of the trade department of Dong Nai, said the province greatly welcomed the projects aimed at retail network expansion.

Last year, Dong Nai helped Vinatex Mart seek six locations to open supermarkets. So far, two supermarkets have been completed, and the other four are in land rent negotiations, he said.

Bui Hanh Thu, deputy general director of Saigon Co.op, described the trade cooperation program between HCMC and other localities as a catalyst for faster and more favorable investment.

Saigon Co.op last year received strong support from the provinces through the recommendation of locations for supermarkets and purchasing power survey. Ten localities even allocated the company VND85 billion to implement the price stabilization program.

Dao said the trade cooperation program had a lot of shortcomings though. Enterprises from HCMC still mainly invest in the neighboring provinces to reduce transport costs, while neglecting the farther provinces like Ca Mau and Kien Giang.

Connection between producers and distributors and formation of a supply chain remain inefficient because many key products still have not joined the distribution system.

Phan Thi My Thanh, vice chairwoman of Dong Nai Province, noted that not only do localities need to join hands with one another, but the Ministry of Industry and Trade also needs to connect with other ministries.

Meanwhile, representatives of Vinh Long and Dong Thap wanted to join HCMC in trade promotion trips in order to boost efficiency. Most localities have organized costly trips to foreign countries to call for investment and introduce their products, but the efficiency of such trips is very low.

Industrial goods exports rise sharply

The growth in farm produce and mineral exports markedly slowed down in 2012, while there was a steep surge in exports of industrial items.

All three main groups of export items scored year-on-year growth, but their growth rates significantly differed. Agro-forestry-fisheries products recorded a growth rate of less than 7%, much lower than in previous years.

Similarly, fuel and mineral exports only obtained growth of 4.2%. On the other hand, exports of processed industrial items surged 24.7% against 2011, much higher than the average growth rate.

Foreign-invested enterprises (FIEs) greatly contributed to the export growth. Last year, they exported US$63.9 billion worth of products, excluding crude oil, making up 56% of the total export turnover and rising 33.5% compared to 2011.

In 2012, 22 items recorded export revenues of over US$1 billion each, 11 items brought in over US$3 billion, seven items fetched more than US$5 billion each and two items exceeded the level of US$10 billion. Typical products were apparels, electronic components and mobile phones.

Exports generated US$114.6 billion in 2012, up 18.3% against 2011 and 13% higher than targeted. The average export turnover per capita was over US$1,300, versus US$1,083 in 2011 and US$831 in 2010.

The ratio of export to GDP exceeded 75%, higher than the levels in previous years, according to the Industry and Trade Information Center under the Ministry of Industry and Trade.

Exports to the major markets such as the U.S., the EU, Japan and ASEAN continued to achieve high growth rates of 17-28%.

Vietnam, India look to US$7 billion two-way trade in 2015

Two-way trade between Vietnam and India is poised to rise to US$7 billion by 2015, according to a seminar held in Danang City on Thursday.

The seminar was held by the Embassy of India in Vietnam, in coordination with the Vietnam Chamber of Commerce and Industry (VCCI) and the India Chamber of Commerce, to mark the 40th anniversary of Vietnam-India diplomatic ties, the fifth anniversary of Vietnam-India strategic partnership and the 20th anniversary of India-ASEAN relations.

Ranjit Rae, Indian Ambassador to Vietnam, said two-way trade between the nations amounted to nearly US$4 billion last year, four times higher than in 2006, and that India is one of Vietnam’s top ten trading partners.

Speaking at the seminar, Hoang Van Dung, vice chairman of VCCI, said the two countries were still holding trade growth potential, citing the long-established relationship between the countries and India’s “Look East” policy.

Rae said India was a big market for Asian countries and expected Indian enterprises to come to sound out business opportunities in Vietnam. He also expected Vietnam to send business missions to India to explore the Indian market and said the Indian government would offer support for Vietnamese enterprises interested in doing business with Indian partners.

A direct air service between Vietnam and India which may either connect New Delhi with Hanoi or Bombay with HCMC may be launched late this year. The service would help boost bilateral cooperation in culture, science, education and training, economy and trade.

The Vietnam-India strategic partnership is faring well in five areas, namely politics, security, economy and trade , culture and human resource development.

U.S. mulls anti-subsidy lawsuit against Vietnam shrimp

A group of U.S. companies last week filed an anti-subsidy lawsuit against warm-water shrimp products imported from Vietnam, China, Thailand, Indonesia, Malaysia, India and Ecuador, the law firm Mayer Brown JSM said.

The anti-subsidy action is considered on top of the anti-dumping tax on warm-water shrimp of Vietnam currently imposed by the U.S.

The U.S. Department of Commerce (DOC) will soon launch an investigation to find out whether Vietnamese shrimp enterprises have received subsidies from the Government or not. If the subsidies were found, DOC would impose an additional anti-subsidy tariff on shrimp imports from Vietnam.

The plaintiff is the Coalition of Gulf Shrimp Industries. At present, total import value of warm-water shrimp from the seven nations accounts for 85% of the total shrimp import stateside, and over three-fourths of the U.S. market, according to the coalition.

In 2011 alone, the U.S. spent US$4.2 billion importing shrimp from the seven countries and the shrimp volume made up 76.1% of the U.S. market and was 86.3% of the total value of warm-water shrimp imported into the nation.

From November 2011 to October 2012, Thailand accounted for 28.03% of the States’ total shrimp import spending while Ecuador gained 15.59%, Indonesia 14.8%, India 12.29%, Vietnam 8.02%, Malaysia 4.49% and China 3.31%.

The plaintiff accused that shrimp of the seven exporting countries has been imported into the U.S. at lower prices than local products.

The U.S. had been the second largest importer of Vietnamese shrimp after Japan in January-November 2012, according to the Vietnam Association of Seafood Exporters and Producers. The country’s shrimp exports to the U.S. brought home more than US$425.5 million in the period, slipping 15.6% year-on-year and accounting for 20.5% of the total shrimp export turnover.

Yen depreciation unfavorable for Vietnam exports to Japan

The yen depreciation is forecast to adversely affect exports to Japan, the main market for many export items of Vietnam.

The Japanese yen on Thursday slightly firmed against the U.S. dollar, but it still stayed at a 29-month low, with 87.26 yen in exchange for one U.S. dollar.

In 2012, the greenback appreciated 12.8% against the yen, the highest level since 2005, while Vietnam dong has been closely pegged to the dollar. The appreciation was sharp in the final months of the year.

In comparison with November 2012, the U.S dollar has appreciated 10% against the yen, according to Reuters.

Nguyen Huu Thanh, director of Vietfoods in Can Tho, specializing in shrimp export to Japan, predicted the yen depreciation would be detrimental to export in 2013.

“The government of Japan is seeking to depreciate its currency. In my opinion, the yen in the coming time will likely depreciate to the rate of 90 yen to the U.S. dollar. This means Vietnamese products will be more expensive. Japanese will cut down consumption or ask suppliers for discount,” he said.

Vietnamese shrimp prices are now US$2.3 per kilo higher than the same products of Thailand and India, which will pile more pressure on local shrimp exporters, Thanh said. The reason for rising production costs in Vietnam no longer lies within factories, he said.

“The reason for higher production costs of Vietnamese shrimp comes from the stage of farming, not from processing plants. The planning for a standardized shrimp farming zone has been mentioned for years, yet there has been a modest improvement,” he said.

Le Van Quang, chairman of Minh Phu Seafood Corp., said prices in Japan were always better than in other markets. Still, there are technical barriers in the Japanese market.

Now, as the yen is depreciating, the situation will be more difficult, he said.

Huynh Van Nghi, general director of Phan Thiet Garment Export Joint Stock Company in Binh Thuan, told the Daily that the yen depreciation might not affect export volume. However, local exporters will hardly raise prices even though input costs will continue to surge.

Export efficiency will be impacted, but the level of impact cannot be measured at the moment, he added.

Meanwhile, Pham Tuan Kien, director of Tan Chau Garment Export Co., forecast the yen fall against the dollar would have little impact. Vietnamese apparels made of materials originated from ASEAN countries enjoy preferential tariffs in Japan, so their competitive advantage in this market will remain intact, he explained.

Because of the gloomy situation in the EU, Japan is becoming a key market for Vietnamese apparels and leather-footwear products.

Japan is currently the main market for the major export items of Vietnam like textile-garment, shrimp and plastic products.

In the first 11 months of 2012, Vietnam exported US$1.79 billion worth of textile-garment to Japan, up 17% year-on-year, accounting for 13% of the total export turnover of the industry. Meanwhile, footwear exports to this market brought in US$299 million, a year-on-year surge of 34.6%, standing at 4.5% of the total export turnover of this item, according to the General Department of Customs.

Statistics of the Vietnam Association of Seafood Exporters and Producers (VASEP) show that Japan is now the biggest shrimp importer of Vietnam, representing 27.7% of the total shrimp export turnover of US$2 billion in the first 11 months of 2012.

Investors shunning underground car park projects

Investors were attracted to underground car park projects in HCMC in the past but they are now turning their back on it due to financial distress.

There are currently four underground parking projects in downtown HCMC, located at Le Van Tam Park, Trong Dong Outdoor Theater, Hoa Lu Stadium and Tao Dan Stadium.

Investment and Development for Underground Space Corporation (IUS) is the owner of the project at Le Van Tam Park, while Urban and Industrial Zone Development Investment Corporation (IDICO) is in charge of the one at Tao Dan Stadium. The other two will be developed by Indochina Group.

The HCMC Department of Transport last month suggested the municipal government cancel the projects at Hoa Lu Stadium and Tao Dan Stadium if Indochina Group and IDICO failed to submit the development schemes for approval by June 30, 2013.

Bui Xuan Cuong, deputy director of the department, said underground car park projects in the city were all inactive because of the inexperience of project owners and consultants, difficulties in determining land rents and making financial plans, along with high lending rates.

“So far, no underground car park project has got off the ground,” he said in a document sent to the city’s government.

Recently, Nguyen Van Loc, general director of Indochina Group, wrote to the HCMC government saying that partners in the underground car park at Hoa Lu Stadium had pulled out of the project due to financial distress. They include Water Supply and Sewerage Construction and Investment JSC (Waseco) and HCMC Finance and Investment State-owned Company, holding a respective 18% and 12% in the project.

Therefore, Loc proposed the city’s government postpone the project until Indochina Group has found new partners. However, he said his firm would have no complaint if the municipal authorities decided to cancel the project.

Meanwhile, the underground parking project at Le Van Tam Park is constantly delayed. In the latest report sent to the HCMC government, IUS general director Le Tuan pledged the project would get going on June 30 this year.

As for the project by Indochina Group at Trong Dong Outdoor Theater, the transport department has asked relevant agencies to help the project owner promptly carry out the project.

However, so far, the department of natural resources and environment has not set the time for land allocation, so the department of finance cannot determine financial obligations. Therefore, Indochina Group cannot kick off the project as it can only apply for project commencement after land rent is determined and land use right certificate is issued.

Similarly, IDICO has not finalized its financial plan for the car park at Tao Dan Stadium, and thus it cannot ask the Ministry of Construction for opinion on the basic design for the project.

Eliminating bad debts not enough for Vietnam: HSBC

HSBC Global Research in a just-released report says Vietnam’s effort to eliminate bad debts in 2013 is not enough as the fundamental issue is to improve the efficiency of the economy to lure foreign capital for long-term development.

HSBC expects a fiscal stimulus to spur growth is unlikely in 2013 as tax revenue has been decreased and state expenditure must be cut.

Tax revenue collected dipped to 10.8% of GDP last year from 24.3% in 2011 while the Government, to carry out its fiscal consolidation policy, reined in public spending, which slowed to 18.9% from 35.5% in 2011.

Therefore, with a tight fiscal policy in 2013 Vietnam needs more foreign capital investment to prop up the slackened domestic investment, said the bank in its report on Vietnam’s macroeconomic picture.

Additionally, the infrastructure needs are immense, ranging from shortages of electricity to public transportation systems, which would benefit from world-class technology that foreign firms bring.

But to lure foreign capital, Vietnam would need to improve its business environment, most notably reducing red tape and creating clearer laws on how to cope with insolvency, said HSBC.

“Without doing so, firms are entering Vietnam only to take advantage of the wage costs rather than to take advantage of the dynamic domestic market. This shows in the contraction of registered FDI (with the exception of Japan) as they have other attractive markets such as Indonesia and Thailand to enter,” said the report.

Competitiveness of Vietnam has declined given its worsening in major global competitiveness rankings. According to the report, registered direct investment capital from top five countries and territories investing in Vietnam like Singapore, Hong Kong, Korea, and China fell in 2012, excepting Japan.

“Although the contraction of registered FDI inflows is partly due to sluggish global growth, it also reflects Vietnam’s gradual loss of competitiveness,” said the report.

The report says although growth slowed, there are five major developments that are considered positive in 2012 that will eventually build a foundation for more sustainable growth of Vietnam. They are the trade balance surplus thanks to weaker import growth and strong exports; inflation slowing to 6.8% in December 2012 from 17.8% in January 2012; the budget deficit narrowing, lowering Vietnam’s debt burden; foreign reserves having risen significantly; and FDI inflows from Japan surging, which is considered positive for Vietnam’s industrialization process.

Therefore, with a cautious optimism, HSBC researchers expect 2013 to be a better year than 2012 for Vietnam but it still depends on how the Government embraces reforms.

The bank expects 2013 growth rate of Vietnam at 5.5%, and average consumer price index at 9.5%.

HSBC also expects credit growth of Vietnam in 2013 at 13%, which is close to the expectation of the central bank at 12%. However, taking inflation into account, real credit should only give a marginal boost to growth, said the report.

Korean Life renamed Hanwha Life

The Korean life insurance company Korea Life Vietnam on Thursday held a press briefing in HCMC to announce its brand name being officially changed into Hanwha Life Vietnam.

The change was announced after its parent company Korea Life Insurance had earlier been renamed Hanwha Life Insurance.

Even though the new name does not result in any changes in the business strategy as well as the operation of the insurance company in Vietnam, it is unavoidable that there will be certain impacts on customers, Hanwha Life Vietnam’s general director Back Jong Kook said.

Hanwha Life Vietnam has devised steps to minimize the impacts, including sending letters to the existing 23,000 clients and providing more training to its financial consultants at the same time.

Hanwha plans to train 9,000 financial consultants this year besides recruiting more financial consultants in the coming time with an aim to realize its business development goals.

Hanwha as of late 2012 obtained total premiums of VND168 billion, realizing 112% of the year’s plan. It has set the target of increasing the 2013 premiums to VND300 billion and will raise the amount to VND1 trillion by 2016 with a market share of 10% at home.

Hanwha now ranks seventh among 14 life insurance companies operational in Vietnam with 3.2% market share.

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

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