Home » Business » BUSINESS IN BRIEF 9/11

Experts urge corporate tax cuts; Agricultural R&D on back burner; Ministry sets fast-track growth for modern shopping; HCM City to issue VND5 trillion of bonds soon; EU businesses downbeat about Vietnam’s outlook

Hanoi to host Conbuild Vietnam 2012

More than 100 businesses have registered to attend the 6th International Trade Fair for Construction, Building and Mining – Machinery, Equipment, Materials, Vehicles, Technology and Services (Conbuild Vietnam 2012).

The event will be held simultaneously with the 2nd International Trade Fair for Electricity and Lighting by Messe München International Asia Pte Ltd (MMI Asia) at the Vietnam Exhibition Fair Centre (VEFC) in Hanoi from December 4-7.

MMI Asia Chairman and CEO Ronald Unterburger said that this year the two exhibitions will focus on the mining industry, as Vietnam has become more aware of the potential for exploiting its natural resources and has improved administrative procedures to create a favourable environment for investors.

The construction industry in the country has also developed well thanks to the fast pace of urbanization.

The event has still attracted special attention of businesses from Germany, China, the Republic of Korea, Singapore and Malaysia, despite their many ongoing economic difficulties.

Dang Kim Giao from the Ministry of Construction says Conbuild Vietnam 2012 will help domestic enterprises gain access to advanced, cutting-edge equipment and technologies and foreign businesses learn more about local markets and policies before they invest in Vietnam.

The organizing board has also cooperated with the Vietnam Mining Science and Technology Association and the Vietnam Oil and Gas Group to host a national conference on the theme, “Strategy for Vietnam Minerals Development – From Vision to Action,” as well as others on energy-saving and environmentally friendly materials and opportunities for cooperation between German and Vietnamese construction businesses.

Korean businesses honoured

Eight businesses from the Republic of Korea (RoK) operating in Vietnam were presented with the Corporate Social Responsibility Award at a ceremony in Hanoi on November 6.

These businesses, which are involved in various fields such as construction, heavy industry, garments, electronics and insurance, have made significant contributions to Vietnam’s social development by improving working conditions, supporting workers who are victims of labour-related accidents, and protecting the environment.

Speaking at the awards ceremony held by the Vietnamese Ministry of Planning and Investment and the RoK’s Ministry of Knowledge Economy, the chief representative of the Posco Vietnam Company, An-Sung-Gu, said it is a great honour for the company to receive the award. He promised that the company will continue implementing further social activities in Vietnam.

As of the end of September 2012, the RoK ranked second among foreign investors in Vietnam with more than 3,000 projects worth over US$24 billion.

Experts urge corporate tax cuts

Experts called for the corporate income tax (CIT) to be cut from 25 per cent to 20 per cent as soon as next year to help enterprises overcome the economic downturn and accelerate production.

The current rate of 25 per cent was higher than other countries in the region, President of the Viet Nam Chamber of Commerce and Industry (VCCI) Vu Tien Loc said.

Thailand recently cut its CIT from 30 per cent to 23 per cent, while those of Japan, South Korea and Taiwan hovered around 15-17 per cent only on small and medium ones.

Loc also disputed the contention that tax cuts would not help troubled enterprises because these firms were struggling to turn a profit, so they would have no income to be taxed anyway. “The tax rate of 20 per cent is reasonable,” he said, making the case that the tax cut would offer a chance to many enterprises to increase their investments and create jobs.

According to a recent survey conducted by VCCI, 30 per cent of small- and medium-sized enterprises had closed down, and the rest were deep in difficulty. Loc said that the fact they had survived at all could be attributed to capital they had accumulated over previous years.

It was estimated that 50,000 enterprises would shut down this year. In the last two years, about 100,000 have closed – equal to half of the total closings since the Law on Enterprises was passed 20 years ago. “The situation is really alarming,” Loc said.

He predicted that enterprises would continue to encounter difficulty for one or two years, while the public investment remained tight, access to credit and foreign capital mobilisation continued to be difficult and the prospects of the stock market were still dim.

The VCCI also proposed reducing the land tax and creating measures to increase salaries and improve enterprises’ access to credit.

Agricultural R&D on back burner

Viet Nam’s current policies fail to motivate scientists and researchers to develop agricultural technology, said Dang Kim Son, Director of the Institute for Policy and Strategy of Agriculture and Rural Development.

Hi-tech agriculture is, in his view, the most effective way to make Vietnamese farmers more competitive and raise farmers’ incomes.

The biggest problem research centres in Viet Nam faced was not a shortage of funding or infrastructure, but a lack of enthusiasm, he said.

Son went on to list regulations he considered unreasonable: regular wage increases based on working experience, formalistic assessments of staff performance [where the assessment was not based on real performance or efficiency at work], insufficient encouragement for staff to improve foreign language skills.

Moreover, when working in co-operative projects with international organisations, State employees were not given any further financial support, even though competent human resources could really drive the growth of agriculture, he said.

For many years, Viet Nam’s agricultural growth rate has increased about five per cent annually, mostly thanks to input factors like land, water, labour and materials.

However, most of those resources are now limited, slowing agricultural growth.

Dr Vu Van Liet from Ha Noi Agriculture University noted that experienced scientists with insufficient foreign language skills found it hard to work with foreign partners, while junior scientists with the requisite language abilities lacked experience.

As a result, co-operative work would not be as effective as expected, he said.

Meanwhile, Dr Le Quoc Thanh, director of Centre for Technology Transfer and Agriculture Extension under Viet Nam Academy of Agriculture Science, said that the technology transfer sector was also short of trained staff.

Most of those working in the sector had originally worked in other fields, so they lacked expertise in technology transfer, he said.

He noted that the faster technology was transferred to farmers, the more economic value farmers could generate.

Ministry sets fast-track growth for modern shopping

The Ministry of Industry and Trade has just mapped out a fast-track growth plan for modern shopping facilities comprised of supermarkets and commercial centers with an aim to have some 1,500 such facilities nationwide by 2020.

Under the plan, modern shopping facilities rather than traditional markets will be the main channel for boosting retail sales. The retail growth at modern shopping facilities should reach 26%-27% annually by 2015 and around 29%-30% by 2020, while the proportion of retail sales via this channel should be 27%-30% by 2015 and 43%-45% by 2020.

Currently, traditional markets are still taking the lion’s share in retail sales, though their sales growth have slowed down or even almost stalled of late.

According to the master plan just endorsed by the ministry in late October, the country will have 1,200-1,300 supermarkets, 180 commercial centers and 157 shopping centers in 2020. Under the planning, the number of supermarkets in Vietnam will increase by 585-695 supermarkets in 2020 compared to the number of last year.

Specifically, the Red River Delta will have 15-24 first-grade supermarkets, 60-66 second-grade and 100-115 third-grade ones, raising the total number of supermarkets in this region to 372-403. Hanoi will have the highest number of new supermarkets with 188-200.

Among 360-390 supermarkets planned for the southeast region, HCMC will have 265-287 supermarkets, which is much higher than neighboring provinces.

Similarly, there will be 40 commercial centers in HCMC in 2020 while the figure in Hanoi will be only 28. Other provinces will have 1-10 commercial centers in 2020, but some provinces will have none.

Besides, commercial centers of grade 1 must be located 20km apart, while second-grade and third-grade supermarkets must be six and one kilometer apart respectively.

Shopping malls and trade centers must have their own parking facilities to facilitate shoppers and to avoid traffic congestion, according to the master plan.

According to the ministry, competent State agencies will create favorable conditions for investors from all economic sectors to develop modern shopping facilities in line with the master plan. The plan is also meant to create a sound legal corridor for the development of retail facilities in accordance with commitments Vietnam has made with the World Trade Organization regarding market opening so as to provide a level-playing field for both local and international retailers.

However, the State will also enhance its control over foreign retailers trading in products listed as exclusive items, as well as their proposals to open more facilities after their first ones. Foreign investors will be encouraged to develop supermarkets and trade centers farther from city centers, and investors building such facilities in provinces where the GDP per capita is lower than the national average will enjoy stronger incentives.

HCM City to issue VND5 trillion of bonds soon

HCMC authorities will this month issue municipal bonds valued at a combined VND5 trillion to urgently mobilize private capital sources to meet rising demand for development investment in the city.

A plan to issue the 2012 bonds of the city was ratified by the local government last Saturday, with bonds having terms of three and five years set to be issued this month.

As such, three-year-tenor bonds will make up 60% of the total volume and are equal to VND3 trillion. The remaining bonds which have a tenor of five years will account for 40% and are worth VND2 trillion.

The bonds will have a face value of VND100,000 and will be issued under the form of bidding and underwritten by securities firms, banks and financial institutions that are allowed to provide bond issuance services.

If VND5-trillion bonds cannot find enough investors this month, the city will continue issuing the bonds next month in order to mobilize VND5 trillion as expected, according to the municipal authorities.

The city’s budget in 2012 has paid off urban bonds worth VND756 billion. If the Ministry of Finance reschedules the repay of the advanced VND2 trillion and if the city issues VND5 trillion worth of bonds successfully, total borrowing balances of the city’s budget as of late this year will be an estimated VND11.4 trillion or 75.2% of the allowable borrowing balance amount.

To satisfy surging local investment demand for infrastructure, the city expects to need total investment capital of VND983 trillion in the 2013-2015 period, with around VND81 trillion sourced from the city’s budget.

Therefore, the capital volume the city needs to supplement between now to 2015 is some VND46.1 trillion which is set to be contributed from various sources including municipal bonds.

EU businesses downbeat about Vietnam’s outlook

Nearly three quarters of European businesses in a survey are pessimistic about Vietnam’s macroeconomic outlook in the next six months, but their confidence in the economy over the medium term remains solid with plans to spur investments.

Results of the 9th quarterly EuroCham Business Climate Index survey, conducted in October 2012 and released on Monday, show that business confidence and outlook among European businesses in Vietnam continues to drop.

Up to 72% of them think that they will see a further deterioration of an already difficult economic situation, while only 28% think that the situation will stabilize and gradually improve.

EuroCham members that participated in the survey expressed increasing concern about their current business situation as well as the impact of increased taxes, fines and official scrutiny. More than half of the businesses that participated in the survey are active in the services industry, a quarter in manufacturing and the rest in trading or other activities.

“Compared to our last survey, there was a further drop in respondents assessing their current business situation as positive (‘good’ or ‘excellent’) from 30% to 26%. More than a third of businesses continue to have a negative view of their current situation, while at the same time the neutral assessment of the current situation grew to 37%, or up by 7 points compared to last quarter.

The business outlook also continues its negative trend, with 35% of respondents assessing their business outlook as ’not good’ or ’very poor’. Additionally, this quarter sees a further decline in businesses having a ‘good’ or ‘excellent’ outlook, down from 31% last quarter to 26%.

Interestingly, however, when asked about their investment plans for 2012,  the percentage of respondents planning to increase their investments has grown. Since last quarter there has been an increase of 7 points to 39%.

Similarly, there has been a reduction in the percentage of businesses aiming to reduce their investments ‘significantly’ in 2012, down from 20% last quarter to only 13%. This shows a change towards businesses’ plans to invest in Vietnam.

The number of companies that are looking to maintain their current level of investment remained relatively constant at 32%. This development probably reflects the medium term optimism linked to the recent improvements in macroeconomic stability of Vietnam.

When asked about their expected number of orders and revenue in the medium-term the answers were mixed. At 44% the share of companies expecting revenue to increase experienced a small drop, down 1 point as compared to last quarter. A relatively consistent 20% of respondents expected revenue to remain the same in the medium term.

However, around one third (32%) still expect their orders to decline, much in line with last quarter’s survey  and significantly higher than previous years, where the numbers were much lower.

EuroCham Chairman Preben Hjortlund commented on the survey that “during the past 12 months, EuroCham’s BCI has declined from 56 to 45 points, a drop of 11 points!  This indicates a declining confidence in Vietnam as an investment destination for European business.”

However, he also noted that EU businesses “remain hopeful that recent developments such as the beginning of negotiations for the FTA between Vietnam and the EU will encourage Vietnam to improve its competitiveness and attractiveness and turn around the declining business climate.”

Car import volume unchanged, value down

The number of completely built-up (CBU) cars imported into Vietnam in October is only 2,000 with an import value of some US$50 million, unchanged in volume but falling US$12 million in value compared to the preceding month.

The import volume in October is also equal to the figures in July and August, with a small difference of some millions of U.S. dollars in values.

Since January, the monthly CBU car import volume has always been around 2,000 units. Imports in the first ten months totaled 22,000 units worth some US$498 million, down 54% in volume and 44.9% in value against the same period last year.

This development is not surprising as many adverse changes have been made in the policy for car import in particular and the automotive market in general, said observers.

Changes in new car import procedures and adjustments in taxes on used cars in 2011 under Circular 20 of the Ministry of Industry and Trade and Decision 36 of the Prime Minister directly affects auto import and gradually eliminates unofficial importers.

In addition, the hike in car registration and license plate fees in early this year, along with a scheme on personal vehicle restriction and downtown entrance fees, deal a hard blow to both auto importers and assemblers.

The Ministry of Transport has reassured auto traders and consumers that it would take a couple of years until the scheme can go ahead. This reassurance, together with massive promotions of auto firms in recent months, still cannot prop up the market

Local auto assemblers said auto part imports in the past ten months had dropped by 30-40% year-on-year due to the market slump.

Although the final months of the year are considered the season for car trading, some businesses forecast it would be difficult for the market to revive in the current difficult economic situation.

Ca Pass Tunnel yet to get going

The Ca Pass Tunnel project connecting Phu Yen and Khanh Hoa provinces did not start construction last month as scheduled since the project owner had failed to complete site clearance for the scheme.

Ho Minh Hoang, general director of Deo Ca Investment JSC, told the Daily that his firm now is still working with local authorities to recover 25 hectares of rice farmland in Phu Yen to make room for the project. After finishing the site clearance, the company will work with the Ministry of Transport before fixing the construction date for the tunnel scheme, Hoang said.

In terms of mobilizing construction capital, credit institutions now have agreed to provide loans to the project including site clearance costs, Hoang added.

Minister of Transport Dinh La Thang at a signing ceremony of the tunnel project’s investment under the format of build-operate-transfer (BOT) and build-transfer (BT) said that the project would get going on September 2. After that, the project’s construction was rescheduled until last month but no work on the scheme has kicked off so far.

The whole Ca Pass Tunnel scheme has a total length of 13.4 kilometers, with Ca Pass Tunnel and Co Ma Tunnel stretching 3.9 kilometers and 500 meters respectively. The project also includes approach roads and a bridge stretching more than 9 kilometers and two parallel tunnels covering 8.5 meters in width for two traffic lanes.

The work will cost total investment of some VND15.6 trillion, or around US$750 million, of which BOT capital is more than VND10.5 trillion, BT fund around VND4.5 trillion and site clearance cost VND539 billion.

It was earlier scheduled for commencement last month and completion in 2016 and is expected to help vehicles reduce travel time by three-fourths compared to running across the pass.

Product supply for Tet bountiful

The supply of basic food products under the price stabilization program in HCMC for the coming Tet holiday will be plentiful with the total stock prepared have risen by over 60% from the amount sold in the previous holiday.

Le Ngoc Dao, deputy director of the HCMC Department of Industry and Trade, said that these products would reach consumers in suburban and remote areas thanks to the widespread sales network having been established.

According to a report of the department, enterprises joining the stabilization program have set aside a combined VND3.44 trillion worth of commodities, up VND605 billion from the Tet holiday 2012.

During the peak days of Tet alone, the amount of goods under the program is worth over VND1.51 trillion, far exceeding the amount of VND262.2 billion that the city lends to enterprises with a preferential rate for the scheme.

Saigon Co.op has spent over VND1.13 trillion stocking products for the stabilization program among its total of nearly VND3.5 trillion for Tet products. Meanwhile, the capital amount set aside by Vissan and Pham Ton is VND1.01 trillion and VND383.3 billion respectively.

With such huge capital amounts, enterprises can supply over 30,000 tons of rice, accounting for 20% of the demand and increasing by 115% from the previous Tet holiday. Similarly, the RE sugar reserve is now staying at 12,800 tons but enterprises can provide up to 13,700 tons.

According to the department, the product supply of enterprises joining the stabilization program will account for 30-40% of the total demand in the coming Tet holiday.

Other products needed for the holiday will be provided from three wholesale markets of Binh Dien, Hoc Mon and Thu Duc and other food firms in HCMC.

Pharmaceutical firms find new offices in Vietnam

Several pharmaceutical companies have moved into new office quarters in Ho Chi Minh City and Hanoi in recent months, according to the commercial real estate firm Cushman & Wakefield Vietnam.

Robert Johnston, national head of Cushman & Wakefield Vietnam said that these tenants were taking advantage of the favorable market conditions and the improved build specification from the new supply in the market.

A recent example of this trend includes the relocation of the Hanoi Representative office of Merck Sharp & Dohme Asia Ltd. (“MSD”), from Asia Tower in Nha Tho Street, Hoan Kiem district to Keangnam Landmark Tower at Pham Hung boulevard, Cau Giay district on the west of Hanoi.

MSD’s new Hanoi office will be officially put into operation in January 2013 after three months of renovation.

Pharma firms are seeking offices with close proximity to hospitals, hotels, and the national administrative center along with amenities for employees.

Keangnam accommodated their requirement for 1,000 square metre on one floor plate with competitive commercial terms.

Stephen Morris, MSD Real Estate Portfolio manager – Asia Pacific commented: “This relocation was vital to MSD to support their growth objectives in Hanoi; Keangnam is an excellent building offering high-quality office space in a new strategic location. Many thanks for Cushman & Wakefield for their support through the negotiation process.”

According to Cushman & Wakefield, tenants will negotiate hard to achieve better lease conditions and terms, while established, well-respected landlords will retain their long-standing tenants with rental reductions upon lease renewals.

Aging buildings with poor building management will risk losing their tenants due to the attractive relocation options in the market.

Goldenization and dollarization put under control

The prevention of dollarization and goldenization (or reversion-to-gold) has yielded initial outcomes in the Vietnamese market.

As of 2011, the Vietnamese economy had around US$120 billion. Experts estimated that up to 300-400 tons of gold worth of around US$ 15-20 billion were not put into investment, production and business.

The public gold and foreign currency blockage amounted to 30-40% of GDP and was equivalent to the total social investment every year. The problem of goldenization and dollarization is unfortunate for socio-economic growth and causes negative impacts on the economy.

In Viet Nam, gold and foreign currencies have been used as payment tools, leading to complications in currency policy management.

Gold prices increased by 9.1 times in the 2001-2010 period, a 3.5-fold rise against the growing CPI. High gold prices posed psychological pressure on inflation expectation.

Accordingly, the Government issued Decree 24 on the gold market management and Decree 95 on gold and foreign exchange trading.

The inflow of foreign currency to Viet Nam increased relatively, including US$10-11 billion of overseas remittances; US$9 billion of FDI disbursement and US$6.5 billion to be predicted to come from international tourism, for 2012.

So far, the banking system has bought 60 tons of gold equal to US$3 billion, serving to reduce goldenization and mobilize capital for the economy.

After ten months, even though gold prices surged by 2%, people did not rush to buy gold. The import of precious stone and jewelries decreased sharply against previous years.

The exchange rate dropped by 0.88% on average in the first ten months, showing a rare sign over the last five years. The State Bank of Viet Nam bought US$10 billion in foreign reserve.

These outcomes contributed to improving liquidity and reducing pressure on inflation expectations.

However, there are some problems in the domestic and foreign currency markets including the gap between domestic and global gold prices, weak linkages between the domestic and global gold markets and the enactment of regulations on gold bar production.

New Air Mekong CEO quits job ‘for personal reasons’

The managing director of Air Mekong, Luong Hoai Nam, stepped down from his position last Thursday, just five months into his tenure.

A representative of the Air Mekong said Nam, who began working for Air Mekong in July, quit his job due to personal reasons.

Before working for Air Mekong, Nam spent 11 years at national carrier Vietnam Airlines, before becoming general director of Jestar Pacific in 2004.

Vietnam aims for 5.5 percent economic growth

The National Assembly (NA) has approved the Resolution on 2013 the plan for socio-economic development.

On November 8, more than 90 percent of NA deputies voted for the Resolution aimed at stabilizing macroeconomy, achieving higher economic growth and controlling inflation.

They agreed that the main focus will be on removing obstacles to businesses, promoting exports, renovating education, and increasing the quality of human resources.

They stressed the need to boost the economic restructuring process, shift growth models, ensure social welfare, increase national defence and expand external relations, and thus creating a firm foundation for future development.

The deputies overwhelmingly approved the goals of achieving 5.5 percent GDP growth, 10-percent export growth, 8-percent import surplus, and 8-percent CPI growth, while keeping the overspending rate under 4.8 percent of GDP.

They set targets generate 1.6 million new jobs and reduce the rate of poverty to below 2 percent among households, the rate of urban unemployment to less than 4 percent and the rate of malnutrition among children under 5 to less than 16 percent.

They also emphasized the importance to improving healthcare services and protecting the environment.

$24m to be invested in JV weaving, knitting plant

HA joint venture agreement signing ceremony to establish Thien Nam Sunrise Textiles JSC was inked on Monday by Chinese Sunrise Shengzhou textile company and Vietnamese Thien Nam Investment and Development JSC in HCM City.

The project will cost a total of US$24 million to build a factory in Bao Minh Industrial Park in northern Nam Dinh Province with a production capacity of 1 million metres of woven fabrics and 300 tonnes of knitting fabrics a month.

Thien Nam is a leading spinning enterprise in Viet Nam, owning four spinning factories with a total of nearly 150,000 spindles and yarn production capacity of 25,000 tonnes per year.

Over 70 per cent of products are exported to overseas markets such as Turkey, Brazil, Indonesia, South Korea, and China.

Firms to link up with Russia

Vietnamese and Russian enterprises have been urged to accelerate co-operation in promising sectors such as oil and gas, nuclear, light industries, machinery engineering and agriculture.

Russian Deputy Prime Minister Arkady Dvorkovich delivered the message yesterday during a roundtable discussion between businesses from the two countries in Ha Noi.

“The Russian Government is willing to offer incentives and encouragement for Vietnamese companies to develop their projects in Russia,” the Deputy PM said.

The bilateral trade and investment relations between the two countries still lagged behind potential, with two-way trade reaching an estimated US$3 billion this year, said Vietnamese Deputy PM Hoang Trung Hai.

With a population of over 140 million, Russia is regarded as both a traditional and promising market for Vietnamese firms, according to Hai. However, Vietnamese exports now account for a modest 0.5 per cent of total Russian import turnover.

The two governments had set a target of raising bilateral trade to $7 billion in 2015, with a focus on promoting the export of Vietnamese goods to Russia, Hai said.

He described yesterday’s meet as a good chance for firms to explore new opportunities, especially in lucrative sectors including renewable energy, electronics and processing industries.

During the event, representatives of major Vietnamese and Russian enterprises proposed the two governments improve conditions by simplifying investment procedures and reforming policies related to taxation, labour, finance and banking.

“The negotiations for a free trade agreement between Viet Nam and the Customs Union of Russia, Belarus and Kazakhstan.”

VN, Denmark spark indoor energy ties

Viet Nam and Denmark have pledged to work hand-in-hand on the advancement of indoor energies, under an agreement signed yesterday by Minister of Construction Trinh Dinh Dung and Danish Minister of Climate, Energy and Building Martin Lidegaard.

Dung appreciated Denmark’s support for the local construction industry, especially projects involved in minimising pollution and exhaust fumes from cement production.

He said that Viet Nam’s position as a nation highly susceptible to the impacts of climate change — especially for coastal provinces and localities in the Cuu Long (Mekong) Delta — meant the ministry expects Denmark’s support in developing coastal urban areas that can adapt to climate change.

It also expects the country to join hands with Viet Nam in building green urban areas that meet international standards, he said.

“At present, Viet Nam is concentrating on dealing with issues to protect the environment in urban and rural areas. Thus, we hope the Danish Government will co-operate with us in building programmes to help small- and medium-sized enterprises provide waste and sewage management services in these areas,” Dung said.

Martin said Denmark hopes that, by assisting Viet Nam in using indoor energies and reducing greenhouse exhaust fumes effectively, it will help the local economy increase its competitiveness.

Viet Nam was among the nations Denmark selected as strategic partners in fighting global climate change, he noted.

Worldtech gets tick to build $300m solar panel plant

The government has shone the green light on a US$300 million solar panel manufacturing plant in the central province of Thua Thien-Hue after granting a licence on Monday.

The plant is backed by Viet Nam’s WorldTech Transfer Investment in co-ordination with the United Arab Emirates’s Global Sphere.

Phase one of the project, located in the province’s Phong Dien Industrial Park covers an area of 15ha with a total investment worth $300 million.

It is slated to be built late next month and completed in May 2015.

Japan Tobacco helps elderly people get eye operations

Japan Tobacco International (JTI) has donated US$25,000 to Thanh Nien News’ medical programme to provide 650 cataract operations for underprivileged elderly people in Cuu Long (Mekong) Delta.

A representative of Thanh Nien News said the contribution of JTI would help improve the living conditions of elderly people in the region.

The project will be implemented in Kien Giang, Long An and Hau Giang provinces and will be completed by the end of the year.-

Vietnam-Uruguay business opportunities introduced

Visiting Uruguayan Vice President Danilo Astori has expressed his wish for Vietnam to choose Uruguay as a gateway to export goods to the Common Market of South America (Mecosur).

Astori co-chaired a seminar on Vietnam-Uruguay business opportunities in HCM City, with the participation of a large number of companies from both countries.

He provided information on Uruguay’s strengths as well as incentives the country grants to those who invest and do business there.

He said he believes  more and more Uruguayan businesses will arrive in HCM City to seek investment opportunities. Uruguay welcomes Vietnamese businesses to invest in his country, he added.

Chairman of the municipal People’s Committee Le Hoang Quan said that Uruguay and HCM City have great potential for investment cooperation.

He affirmed that the city will do its utmost to foster all-around ties between the two countries.

The same day, Vietnam and Uruguay issued a joint press announcement on Uruguayan Vice President Danilo Astori’s visit to Vietnam.

Raising Vietnam-Russia trade to US$7 billion in 2015

Deputy Prime Minister Hoang Trung Hai and his Russian counterpart Arkadij Dvorkovic have agreed to double the current two-way trade turnover of over US$3 billion within three years.

While co-chairing a roundtable discussion between Vietnamese and Russian businesses in Hanoi on November 7, the two Deputy PMs highlighted both countries’ huge potential and opportunities for cooperation.

They discussed important issues including boosting economic development and building a collaborative investment environment in Vietnam and Russia.

Representatives of major Vietnamese and Russian enterprises proposed the two governments improve conditions by simplifying investment procedures and reforming mechanisms and policies related to taxation, labour, finance, and banking.

The ongoing negotiations for a free trade agreement between Vietnam and the Customs Union of Russia, Belarus and Kazakhstan will offer special opportunities for enterprises to boost investment and business, they said.

Hai and Dvorkovic emphasised the importance of policies that address businesses’ proposals on how to ensure favourable investment conditions and remove barriers inhibiting further development.

Deputy PM Hai stressed that businesses from Vietnam and Russia must take the initiative to promote trade exchanges to realise their potential and opportunities.

Dvorkovic reaffirmed that the Russian government respects the recent achievements in its bilateral relationship with Vietnam and that Russia is eager to help enterprises from both countries cooperate with each other more effectively.

Garment makers see orders from Japan increase

Orders for apparel products from Japan are increasing, possibly due to certain Japanese buyers shying themselves from China, with several Vietnamese textile and garment firms having won export contracts sufficient for their production in many months to come.

Vu Dinh Hai, deputy general director of Dongnai Garment Corp. (Donagamex), said his firm now has obtained orders from Japan for production from now until the end of September 2013.

Many Japanese customers have even asked Donagamex to increase the volume of orders as they are shifting to Vietnamese products from Chinese items. This is a positive sign that the exports of the nation’s apparel products to Japan will post strong growth in 2013.

Donagamex had shipped labor protection uniforms and sports clothing to Japan valued up to US$30 million in January-October. At the moment, 60-70% of the company’s output is bound for the Japanese market while the remainder is exported to South Korea, Europe, the United States and others.

Donagamex already built a new factory in Binh Phuoc Province and another plant in Xuan Loc District, Dong Nai Province. The Xuan Loc plant has recruited workers since March while the factory in Binh Phuoc is nearing completion and expects to recruit laborers next month. Both plants are expected to need a combined 5,000 workers by 2015.

Huynh Van Nghi, general director of Phan Thiet Garment Export Joint-stock Company, said his company had signed contracts to export products to Japan from now till March next year. The enterprise, which mainly trades with Japan, exported US$20 million worth of goods to Japan in the first nine months of the year.

Japanese customers told Phan Thiet Garment about the ability of placing more orders from April and they proposed that the company scale up its production as well.

Phan Thiet Garment has since last year worked with Japanese clients and has revised up its output volumes by constructing an additional factory that will be operational in April.

According to the Vietnam Textile and Apparel Association (VITAS), Japan’s import of apparel items of Japan picked up 2.4% in value and 4% in volume in this year’s January-July, at up to 190.2 million products.

Vietnam’s apparel exports to Japan reached over US$1 billion in the first seven months, a year-on-year surge of 22%. Meanwhile, Japan saw its imports of Chinese products shrink by 0.6% to US$16.1 billion, but China still remains the biggest garment supplier of Japan.

Silicon Valley ‘stars’ to feature at conference on technology

Famous Silicon Valley innovators will take part in a conference on how to succeed with technology business start-ups in southern Binh Duong Province on November 20.

Becamex Technology Innovation Centre, which provides finance, facilities, and advice to tech start-ups, will organise the event.

Four-time Emmy Award winner – for outstanding achievements in television – and creator of the famous Minority Report interface Dale Heristad will talk about how to design a winning user experience.

Ed Fries, a former vice president of Microsoft, will share his experience in and insights into how to build products and businesses.

Jerry Gramaglia, former president of online stock trading company E-trade and former CMO of Pepsi Co, and US Marketer of the year 1999, will speak about the opportunities in the new data era.

One of the top names in the video games industry and founder of Funzio, Jamil Modelina, will share his insights on the current and future trends of technology and more importantly how to build and engineer exits for technology startups.

Do Hoai Nam, founder and CEO of Emotiv Systems, which develops brain-computer interface, and a rare Vietnamese success in Silicon Valley, will share his experiences as a Vietnamese who has succeeded globally.

Henry Bao Hoang, founder and managing partner of IDG Ventures Viet Nam, and Le Hong Minh, founder and CEO of Vinagames, Viet Nam’s most successful tech startup, will also take part.

The conference will be held at the Eastern International University campus.

HCM City to host tyre, rubber conference

The first international rubber and tyre industry exhibition to be held in HCM City next April will provide a forum for domestic and foreign firms to compare notes and explore business opportunities.

Products to be displayed at Rubber and Tyre Vietnam 2013 will include the latest equipment and technologies used in the industry, various kinds of tubes and tyres, and products and services related to the rubber, rubber materials, rubber chemicals, and testing-equipment industries.

Conferences and seminars would be held to discuss the future development of the industry, Nguyen Ba Vinh, director of Minh Vi Exhibition and Advertisement Services Co Ltd (VEAS), one of the event organisers, said.

Speaking to the media in HCM City yesterday, Tran Thi Thuy Hoa, head of the Viet Nam Rubber Association office, said the country was the world’s fifth largest producer and fourth largest exporter of natural rubber, with exports of 816,000 tonnes last year.

China was the biggest buyer, accounting for more than half of these exports, followed by Malaysia and Germany.

Viet Nam mainly exports natural rubber after basic processing.

Domestic consumption, mainly for tyre production, accounts for around 18 per cent of its output.

Production of motorbike and bicycle tyres meets local demand, but the country has to import a significant volume of truck and bus tyres besides other rubber-based products like rubber gloves, soles, and conveyor belts, according to Hoa.

A Government master plan to develop the industry through 2020 seeks to raise domestic consumption of natural rubber to at least 30 per cent by 2020 to develop the rubber-based manufacturing industry.

Demand for rubber would rise in the long term, Hoa said.

Co-organised by VEAS and the China National Chemical Information Centre, the event will be held at the Saigon Exhibition and Convention Center in District 7 from April 11 to 13, and is expected to attract more than 100 local and foreign exhibitors.

Weak bank shares slow capital flow

Most commercial banks have delayed plans to increase charter capital because of difficulties in the monetary and stock markets.

Banking sector share prices have reduced sharply, making it difficult to attract investors.

Earlier this year, most banks had plans approved by shareholders to improve financial capacity and competitiveness and expected to complete them this year.

This was to avoid being caught up in a merger and acquisition (M&A) as the Government kicked off its banking restructuring process.

Smaller banks have become the target of bigger banks so less competitive banks need to increase their charter capital to protect themselves.

For example, Nam A Bank planned to list on the HCM City Stock Exchange and increase its charter capital, said management board chairman Nguyen Thi Xuan Loan. The bank would not accept a M&A. However the time was not right for a listing.

VietA Bank also planned to issue shares to increase its charter capital to VND5 trillion (US238 million), 61 per cent higher than last year. The bank is waiting for a better share price before trying to raise capital.

Another is Orient Joint Stock Commercial Bank (OCB) which planned to lift its charter capital to VND4 trillion ($190.4 million) by the end of this year from its current VND3.4 trillion ($162 million).

However, OCB management board chairman Nguyen Quang Tien said timing was of the essence in the stock release. He pointed out that last year the bank’s plan to increase charter capital had not succeeded because shareholders lacked the funds.

Sharing those sentiments, DongA Bank general director Tran Phuong Binh said increasing his bank’s charter capital to VND6 trillion ($285.7 million) would have to wait until a more suitable time.

Meanwhile, banks said they had not been able to rely on foreign sources as the percentage of foreign strategic partners at some banks was limited to 20 per cent.

Contributing to bank woes was the Government’s requirement that private and State companies sell non-core investments, causing banks to lose shareholders.

At VietA Bank for example, Sai Gon Jewellery Company Limited’s sale of VietA shares on the market would affect the bank’s plan to increase charter capital, according to Dau Tu newspaper.

Member of the National Advisory Council on Monetary and Finance Policies Le Xuan Nghia believed banks should accept mergers. He warned it would not be easy for small and weak banks to increase capital.

“Merging into other more powerful banks may prove to be the best solution,” he said.

(Vietnam Net)

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