An Giang boosts multifaceted cooperation with Lao provinces
The Mekong Delta province of An Giang and Laos ’ Champassak province have signed cooperation agreements in politics, socio-economics, culture and science and technology for 2011.
The agreements were reached during a working session between a Champassak delegation of the provincial chapter of the Lao National Construction Front and the An Giang chapter of the Vietnam Fatherland Front.
Under the agreements, the two sides will strengthen information exchange on policies, achievements and experiences in the development cause of the two countries in general and the two provinces in particular.
Champassak province will inform Vietnamese people about An Giang’s foreign policies and provide material and spiritual support for Vietnamese with difficulties in its locality.
Meanwhile, An Giang province will introduce the customs and cultural traditions of Laos to its local people. The province will build five houses of great unity worth VND250 million in total for its neighbour and organise a fair of high-quality Vietnamese goods in the Lao province, looking towards the establishment of the An Giang-Champassak Friendship Association.
An Giang and Champassak have enjoyed close ties for a long time. The An Giang provincial Fatherland Front Committee presented 10 sets of computers for Champassak, helping strengthen the friendship and solidarity between the two provinces.
During its stay in An Giang, the Champassak delegation offered incense at the temple of late State President Ton Duc Thang in My Hoa Hung commune, Long Xuyen city, and visited An Giang University.
Vietnamese shrimps’ success and challenges
In 2010, Vietnam earned US$2.1-2.2 billion from shrimp export. This proves Vietnamese shrimp’s competitive capacity in international markets, but also creates new challenges.
Vietnam’s shrimp export increased in most of its markets, except for Canada.
According to the Vietnam Association of Seafood Exporters and Producers (VASEP), the success was brought by factors outside the country’s control.
Firstly, the oil leak in Mexico Gulf in April 2010 led to the growing demand for shrimp in the US market. Secondly, there was widespread epidemics in some ASEAN countries, which normally produce 75 percent of the world’s shrimp for export.
In 2011, Vietnamese shrimp will face severe competition from other nations.
This will be a great challenge for Vietnamese products because of the weak forecast system, and the lack of effective communication between shrimp breeders and exporters.
Vietnam-India trade turnover reaches nearly US$2.6 billion
The two-way trade turnover between Vietnam and India enjoys an annual increase of 20 percent to reach nearly US$2.6 billion in 2010, far exceeding the level of US$1 billion in 2006 and US$50 million in the mid-1980s.
This was announced by Huynh Thanh Lap, President of Ho Chi Minh City’s Vietnam-India Friendship Association at a meeting in commemoration of the 61st anniversary of the Republic Day of India, organised by the HCM City Union of Friendship Organisations on January 21.
When sharing the joy and optimism about the development of friendship and cooperation between the two countries, the Consul General of India in HCM City, Abhay Thakur, said the bilateral trade was expected to grow more quickly with the implementation of India-ASEAN Free Trade Agreement.
Lap emphasised that the agreement was signed in 2009, opening many economic cooperation opportunities between India and ASEAN countries, including Vietnam. In 2010, as ASEAN chair, Vietnam made a great effort to develop the cooperation in all fields, he noted.
Food, beverage sector expands
The food and beverage production sector has grown 11.6 per cent since 2009 and accounts for the largest proportion of HCM City’s industrial production value, Bui Duy Duc, chairman of HCM City Food and Foodstuff Association, said at a meeting last Friday.
The industrial production value reached VND609 trillion (US$31.2 billion), an increase of 14.2 per cent compared to 2009.
Last year, association members including Sai Gon Trading Group (SATRA), Vissan Co, Ba Huan Co, HCM City Foodstuff Co, Sai Gon Technology Foodstuff Co and Cau Tre Export Goods Processing Co joined the city’s price stabilisation programme.
This year, the association would organise more seminars and training courses on market information, business law, State policies, foodstuff safety and hygiene, intellectual property for city businesses.
It would also seek new export markets and promote Vietnamese goods overseas, Duc said.
Seafood processors waste energy, says study
Cuu Long (Mekong) Delta seafood processors, which are leading export industries, use energy inefficiently, according to a new survey.
The survey was conducted in 11 shrimp and 10 tra fish processing factories in the Cuu Long (Mekong) Delta by International Finance Corporation (IFC), in co-operation with the Viet Nam Association of Seafood Exporters and Producers (VASEP).
“Our survey revealed that energy policies and human resource training are the two weakest points of these enterprises. All the plants worry about the initial investment but the way they manage energy is below average,” said Le Hoang Viet, director of the Energy Conservation Research and Development Centre, that carried out the survey.
The survey organisers said Viet Nam’s GDP/energy demand growth proportion was double in comparison with developed countries making energy saving a must to be competitive internationally.
The 21 plants surveyed in Can Tho City and An Giang, Dong Thap, Ca Mau, Bac Lieu, Soc Trang and Hau Giang provinces, processed 41,000 tonnes of shrimp and 155,000 tonnes of tra fish in 2009. They spent VND212 billion (US$11 million) on energy.
Viet pointed out that all the factories had already set up other management systems, such as International Organisation for Standardisation (ISO), Good Manufacturing Practice (GMP), Hazard Analysis Critical Control Point (HCCP), making a good foundation for the seafood processors to set up Energy Management Systems (EMS).
“Plants should apply the principles of reduction, recycling and renewing into managing energy,” he said.
Viet advised managers to calculate the factories’ energy demands precisely, turn off machines that aren’t being used and reduce the use of refrigeration, steam and ice.
“Managers should regularly maintain storage at 18 minus degrees centigrade,” Viet added.
He said recycling all steam ice, and cold air from refrigeration would help enterprises save a lot of money.
“Biogass should be made from waste treatment and used for generating electricity,” Viet said.
He said old machines were power wasters and investing more in power efficient machinery would save up to 50 per cent of energy costs in the long term.
Ocean Group targets VND1 trillion profit
Ocean Group JSC (OGC) announced late last week its business results for 2010 and a business plan for 2011.
Under the plan, the group set targets of VND4.6 trillion (US$235 million) in sales revenue, up more than 200 per cent over the previous year, and pre-tax profit of VND1trillion ($51.2 million).
OGC is involved in many areas including financial resources, securities, real estate, hospitality and media. It has a charter capital of VND2.5 trillion (over $128 million). As part of a five-year strategy, OGC will maintain and promote its real estate and finance arms with the aim of becoming Viet Nam’s leading diversified commercial group.
Chairman of the board Ha Van Tham said in 2011, the group’s revenue and profits would grow substantially, and they would speed up the implementation of real estate projects while expanding investment activities.
Tham said the group was currently implementing a number of major real estate projects such as StarCity Centre, StarCity Le Van Luong, VNT Ha Dinh, PVN Tower in Ha Noi, Saigon Airport Plaza and Thu Thiem 2 Bridge in HCM City.
In 2010, OGC made a total revenue of VND2.24 trillion ($115 million), up 10 per cent against its annual target and 7.6 times more than 2009.
According to Tham, the group’s profits rose sharply from real estate and finance activities.
The group’s Oceanbank made a pre-tax profit of VND691 billion ($35.4 million), 133 per cent of its annual target.
The bank has a total capital of nearly VND55.2 trillion ($2.8 billion).
Investors take to VN property
Viet Nam would be among the top five emerging real estate markets for investment this year, according to the Association of Foreign Investors in Real Estate (FIRE) based in the US.
Brazil, China and India dominate the market (in that order), but Viet Nam, unranked in 2010, jumped to the fourth position. Mexico ranked fifth, losing last year’s position to Viet Nam. Russia, which has been amongst the top five for the last two years, dropped to the tenth place.
Peter Ryder, general director of Indochina Capital, which currently has several real estate projects under construction in Viet Nam, said the recent rise in investment in Viet Nam was due to the rapid growth of the country’s real estate market and the open regulations that allow the participation of foreign investors.
“Viet Nam’s entry at number four in the survey actively demonstrates investors’ belief in the attractive demographics of the country and its stable growth environment from an investment perspective,” said Richard Emerson, head of investment, Savills Viet Nam Ltd Company’s Ha Noi Branch.
“Based on such statistics, those surveyed clearly anticipate that the country will provide potentially higher returns than those available in other emerging markets such as Russia and Turkey, both of whom have fallen out of this year’s top five ranking,” he said.
Meanwhile, Marc Townsend, CB Richard Ellis Viet Nam Ltd’s managing director, said the survey showed a trend that Viet Nam was being viewed more and more as an attractive option for investment.
“This is in line with our experience, having seen increased interest in the country from foreign investors in recent times, as lower than average investment returns in more developed markets force investors to move up the risk curve in order to achieve results,” Emerson said.
“Viet Nam should benefit from inclusion in the survey, as it will further help promote the country as a valid investment destination. Positive international perception of the country as a result of the survey can only assist in driving FDI in the future.”
Last year, the real estate sector received the largest registered FDI at US$6.8 billion, according to a report on FDI for 2010 from the Ministry of Planning and Investment.
Construction Ministry plans investment trust
The Construction Ministry has proposed the Government to set up real estate investment trust funds to help raise capital for the property industry.
The proposal is part of the housing development project that will be implemented by 2020. The ministry is set to ask for the Government permission on the project.
Real estate investment trust (REIT) is a tax designation for a corporate entity investing in real estate that reduces or eliminates corporate income taxes. In return, REITs are required to distribute 90 per cent of their income, which may be taxable, into the hands of investors.
The ministry said that REIT would help verify the sources that are available to raise capital for housing projects, instead of relying on one source from commercial banks.
Phan Thanh Mai, general director of the property investment fund VPREIT, said that the establishment of REITs in Viet Nam was essential when many investors were paying attention to property.
Mai said that the trust fund was popular and worked effectively in developed countries. For example, the US Congress passed legalisation that allowed for the establishment of REITs in 1960. Now there are 300 REITs and two-thirds of them are publicly traded companies that have more than US$300 billion in total capitalisation.
City furniture firms enlists UN help to get competitive
The United Nations Industrial Development Organisation and the Handicraft and Wood Industry Association of HCM City (Hawa) yesterday signed an agreement to help small firms upgrade their competitiveness and integrate in the global markets.
The Small- and Medium-Sized Enterprise Cluster Development Project, funded by Italy, chose the wood processing and furniture cluster in Binh Duong Province and HCM City as a pilot site for development interventions, Francesco Russo, its chief technical advisor, said.
Under the MoU, there will be seminars and training workshops offering opportunities for the firms to learn new aspects of design, quality maintenance and marketing.
Many activities to foster partnerships between local and Italian industries and develop institutional linkages between Hawa and partnering Italian associations and institutions will also be held.
The Vietnamese industry achieved positive results last year, becoming the largest producer and exporter among ASEAN member countries, Russo said.
But it continued to face old challenges and needed to improve to ensure sustainable growth and value-addition through increased capacity in design, marketing, quality and innovation, productivity and technology, and respect for international standards, he said.
“With the agreement signed today, UNIDO, Hawa and local enterprises will work together to address these challenges.”
Italian industries and experts would contribute experience, design capacity, technology and know-how, he added.
Business confidence stays high
Viet Nam’s small business confidence index remains positive at 156, the second highest in the world, over the global average of 125, according to a bi-annual small business confidence monitor recently released by HSBC.
Though there is a slight drop, this is in line with the economic outlook of all as small-andmedium-sized enterprises (SMEs) in Viet Nam with 60 per cent believing that the economy will continue to grow in the next six months.
Over half of the surveyed enterprises in the country are involved in international business, much higher than the average global figure of 29 per cent.
Mainly, these enterprises are conducting import (71 per cent) and export services (34 per cent) as well as marketing products and services through international subsidiaries or offices (10 per cent). Off-shore services, including call centres and service centres accounted for 7 per cent.
Over half of the Vietnamese SMEs have plans to either expand (42 per cent) or continue their existing international activities (9 per cent) while 18 per cent have plans to go international while the rest of 31 per cent do not.
When asked about the intention to do business internationally in the next two years, 82 per cent of the international companies in Viet Nam believe they will expand their business, double the global figure. Thirty-seven per cent of domestic enterprises have plans to do business internationally.
Availability of financing (49 per cent) and concerns about dealing in foreign currencies (48 per cent) remain at the top of barriers for doing international business.
Aside from that, other concerns for these businesses include the complexity of certain international markets (taxes, foreign currency controls), local regulations, legal complexities of contacts, and experience of overseas markets.
While considering the expansion of their business internationally, 48 per cent of the surveyed SMEs said that they needed information about foreign exchange risk and regulations, while another 46 per cent needed to know more about financial options that they may have.
They also consider tax implications and legal advice as vital to their business should they wish to expand globally.
Increasing their revenue is the top reason that drives businesses to trade beyond their national borders, with 95 per cent of Vietnamese SMEs agreeing on this. Forty-eight per cent wish to expand abroad to tap new customers.
The top three concerns for the next six months are inflation (62 per cent), economic conditions (52 per cent) and difficulties in accessing credit (48 per cent).
This is also in line with the latest result from the HSBC Emerging Market Index survey.
The survey results also highlight that Government policy measures such as monetary policy and stimulus packages play a key role for local economic growth as 53 per cent of local SMEs believe that these help their businesses significantly.
Twenty-eight per cent of the enterprises say the increased demand from the domestic market will also boost economic growth. Globally, confidence in future business growth among SMEs within the developed markets has dropped, while that of those in the emerging markets continue to increase.
A quarter of SMEs in the developed markets expect the pace of growth within their local economy to slow down in the next six months, while 43 per cent in emerging markets forecast an increase.
Alan Keir, HSBC’s Global Head of Commercial Banking, said: “Increased private consumption, global re-stocking and liquidity from the West have helped boost the emerging market economies. The emerging markets play a vital role in driving the global economy and SMEs in these markets are once again demonstrating their strength and positivity on the global stage.”
The bi-annual HSBC Small Business Confidence Monitor gauges the six-month outlook of SMEs on local economic growth, capital investment plans and recruitment drives.
The results were used to calculate an index ranging from 0 to 200 where 200 represents the highest confidence level, 0 the lowest, and 100 neutral.
Vinachem sets aside $300m for key projects
The Viet Nam Chemical Group (Vinachem) was planning to set aside more than VND5.89 trillion (US$302 million) for seven key projects this year, Vinachem’s board chairman Nguyen Quoc Tuan announced on Thursday.
The projects include Ninh Binh Urea Fertiliser Plant, which is expected to supply 560,000 tonnes of fertiliser each year; the expansion of Ha Bac Urea Fertiliser Plant that is projected to produce 500,000 tonnes per year by 2014; and two truck tyre plants that will make 900,000 tyres annually.
In order to ensure funding for the development, Vinachem was looking to foster links between the group’s affiliates to promote the use of internal financial resources, Tuan said. This suggests that the Government and the Ministry of Industry and Trade will draw up priority credit policies for fertiliser projects to promote market stability.
Vinachem, the 10th State-owned economic group, posted an industrial production value of VND13.79 trillion ($701 million) last year, a 14.5 per cent increase over last year’s figures. The fertiliser sector grew by 25 per cent last year, while chemical products increased by 15 per cent.
Its revenue recorded a year-on-year increase of 16 per cent, earning VND29.66 trillion ($1.52 billion) while its profit topped VND2.4 trillion ($123 million).
Banks limit gold deposit terms to curb dollarisation of economy
A number of commercial banks have continued to limit deposit terms and lower interest rates for gold deposits, in a bid to restrict these types of deposits pursuant to instructions issued by the central bank. Eximbank, a leading bank in the gold business, has eliminated terms of 12, 18 and 60 months on gold deposits, leaving only terms of under a year at interest rates of 0.2-1 per cent annually.
Asia Commercial Bank (ACB), a pioneer in the gold business and one of the busiest gold traders in the system, has also removed terms of 12, 13, 24 and 36 months from its deposit board. The bank now only accepts deposits of gold from one to nine months, at interest rates of only 0.65-1.1 per cent per year.
“These actions are aimed at gradually restructuring capital sources and making final settlement on gold deposits,” said ACB gold centre director Tran Trong Quoc Khanh. ACB wasn’t worried about meeting the June deadline for settling gold deposits since gold trading accounts were already suppressed, Khanh added.
Last October, the State Bank of Viet Nam ordered commercial banks to stop converting gold deposits into cash and using the funds for loans or foreign exchange trading, partly to help ease the downward pressure on the dong and reduce further dollarisation of the economy.
Under State Bank Circular No 22, gold which had been given in security for loans had to redeemed and the loans repaid no later than June 30 this year. The central bank last year also shut down gold trading floors and banned gold trading abroad.
Sai Gon Commercial Bank, Oriental Commercial Bank and HD Bank were among other banks that had earlier reduced the interest rates they offered on gold deposits from an average of 2.7 per cent to just 0.8 per cent per year.