BUSINESS IN BRIEF 25/5

Source: VietNam Feeds


Vietnam, Japan research genetically modified cassava


Vietnamese and Japanese scientists will conduct joint research into gene transplants designed to increase the starch synthesis capacity of cassava varieties.


A document to this effect was signed in Japan’s Yokohama City on May 22 by representatives of the Japan Institute of Physical and Chemical Research (Riken) and the Vietnam Institute of Agricultural Genetics (IAG).


Riken Directorate Board Member Kenji Oeda affirmed Vietnam’s importance as a Southeast Asian partner, and joint research between the two countries will deliver benefits to the region and its agricultural issues in particular.


IAG Director Le Huy Ham said cassava is an important biological material for Vietnam. It has become one of ten key export products, with value reaching US$1.2 billion in 2012.


Professor Kazuo Shinzaki, head of the research team, said Vietnamese and Japanese scientists will collaborate in a laboratory in Vietnam.


Deputy Prime Minister Nguyen Thien Nhan, attending the signing ceremony as part of his visit to Japan, expressed his hopes for the project’s success, saying it would lay a firm foundation for future bilateral cooperation in agricultural research.


EuroCham launches Green-Biz 2013


The European Chamber of Commerce in Vietnam (EuroCham) on May 23 launched Green-Biz 2013 at a seminar themed Energy Savings and Sustainable Profits.


Green-Biz is an integrated two-day Business-to-Business and Business-to-Government event, to be held in Hanoi from September 19-20.


It will include a conference with an international exhibition and networking events, presenting the most pressing issues for sustainable development in Vietnam.


Prior to the main event, a Green Empowering contest, a Green Building programme and a Clean Business seminar will take place to introduce various European green business solutions for Vietnam.


Preben Hjortlund, EuroCham’s Chairman, said that in 2013, EuroCham will focus on implementing the third version of Green-Biz, facing up to challenges and mobilising resources to develop a “green future”.


This year’s event will attract key European and Vietnamese participants from academia, public bodies, civil society, international organisations, press and private companies.


Green-Biz 2013 is the third event of its type organised in Vietnam after Green-Biz 2009 and 2011.


Lao, Vietnamese localities boost cooperation


The wish was expressed by Party and administrative leaders of Bokeo, Luang Namtha and Oudomxay while meeting with newly-accredited Ambassador Nguyen Manh Hung during his visit to three provinces from May 20-23.


Lao officials sincerely thanked the Vietnamese government and people for helping them upgrade infrastructure, boost economic growth and improve people’s living condition in the three localities.


Ambassador Hung briefed his hosts on Vietnam’s socio-economic situation and plan for long-term cooperation with Laos.


He urged them to create more favourable conditions for Vietnamese residents and investors.


Seminar shares experience in water sector PPPs


The National Economics University and Germany’s Institute of Environmental Engineering and Management held an international seminar in Hanoi on May 23 to share experience in public-private partnerships (PPPs) in the water sector and environmental service.


Ho Cong Hoa, a representative from the Central Institute for Economic Management, brought out the forecast on the potential of Vietnam’s environmental industry and the role of PPPs up to 2025, noting that sewage and solid waste from now until 2025 is a big problem as there is disparity between the State’s investment capacity and real demand to tackle sewage and solid waste.


PPPs are a good choice for environmental infrastructure as in the 2014-25 period, the State may lack about VND250 trillion to manage the issue and only 34 percent of sewage in industrial zones is dealt with, Hoa said.


Prof. Dr. Carsten Haneke from Germany’s Bremerhaven University of Applied Sciences introduced to the participants the country’s policies on PPP management in the water sector and shared its experience in PPP models.


At the event, participants also analysed research on private investment in Vietnam’s environmental service, together with the difficulties Vietnam has faced collecting taxes and fees for waste water, as well as global experience in PPPs in clean water and urban sanitation.


They agreed that to implement the PPP model effectively, Vietnam needs to complete policies and a legal framework on PPPs, select pilot PPP projects, distribute capital for State participation, and call for greater international support to develop PPP programmes.


Seafood subject to higher anti-dumping duties


The US Department of Commerce (DoC) has decided to increase anti-dumping duties on Tra fish imported from Vietnam by an additional US$0.52-1.29 per kilo, said the Vietnam Association of Seafood Exporters and Producers (VASEP).


VASEP Secretary Truong Dinh Hoe said the tax hike was announced after the US checked errors in the calculation of the previous tax, saying that the increase was consistent with the calculated data.


In March, the US imposed a high tax rate of US$0.77 per kilo on Vietnamese tra fish. It chose Indonesia as the sole benchmark country to calculate the anti-dumping rate, VASEP said.


On a brighter note, Japan - one of the leading importers of Vietnamese seafood - has lifted a regulation that imported Vietnamese shrimps must be tested for trifluralin, a type of antibiotic, it said.


The regulation has been applied to all kinds of shrimps imported from Vietnam since October 2010.


The ban led to a close watch on the industry – from shrimp breeding to final processing – by Vietnam's Ministry of Agriculture and Rural Development.


However, experts believe Vietnam is heading in the right direction in controlling seafood quality.


To boost seafood exports to the Japanese market, Deputy Director of the Department of Fisheries Nguyen Huy Dien said localities need to further focus on preventing shrimp diseases.


In addition, Dien said it is also necessary to pass on shrimp raising methods that ensure low Ethoxyquin content, an anti-oxidant substance popularly used in preserving aquatic feed.


In the first four months of this year, Japan imported shrimp worth more than US$168 million from Vietnam, an increase of 2.4 percent compared with the same period last year.


Boosting sustainable development in Mekong delta


Members of the Mekong sub-region, including Vietnam, have made practical contributions to socio-economic development in each of their neighbours as well as to the environmental sustainability of the region as a whole.


They are currently focusing on strengthening economic cooperation and expanding external relations with other countries around the world.


Viettel workers are installing telecom cable in Laos


Foreign Investment Agency (FIA) Deputy Head Vu Van Trung said Vietnamese businesses have invested in 335 projects in the Mekong sub-region, with the registered capital of US$7 billion accounting for over 50 percent of the country’s total overseas investment.


In Laos alone, Vietnam has 222 projects worth US$3.9 billion, ranking second among its Indochinese neighbor’s foreign investors.


The country has made significant contributions to Laos and Cambodia’s industrial development, especially in the areas of rubber plantation, hydro-electricity power plant construction, sugar production, and mineral exploration.


Vietnam has also effectively cooperated with regional countries in protecting the environment, upgrading infrastructure, and improving social welfare.


Vietnam’s Hoang Anh Gia Lai Group has allocated US$40 million to social welfare programmes that will help the Lao province of Attapeu construct roads, bridges, office buildings, hospitals, and new resettlement areas.


Vietnam’s telecom giant Viettel has also helped improve Lao and Cambodian telecommunications services, particularly in rural areas. The group generated jobs for more than 225,000 local workers in Cambodia and nearly 20,000 others in Laos.


HCM City scheme for exterior bus advertising


HCMC is studying a scheme for advertising on the outside of buses in order to reduce subsidies for bus services.


This is a new point in the plan for development of public transport in HCMC until 2020 published recently.


Currently, enterprises are only allowed to put ads inside commuter buses using interior televisions, said Pham Dinh Duc, director of the Public Passenger Transport Management and Operation Center under the HCMC Department of Transport.


The transport department is in charge of the scheme for bus exterior advertising. The scheme is still in its infancy, so there is no specific detail as yet, said Duc.


Subsidies for commuter bus services totaled VND6.8 trillion from 2002 to 2012. Despite this huge support, buses only account for 10.6% of transport demand of citizens.


Subsides for buses have been rising over the years, amounting to VND1.36 trillion in 2011, over VND1.4 trillion in 2012 and is expected to reach VND1.47 trillion this year.


To reduce the burden on the State budget, bus advertising has constantly been suggested, but the municipal government did not approve, saying that this form of advertising would badly affect traffic safety and urban landscape and the content of advertisements would be hard to manage.


In neighboring provinces like Binh Duong and Dong Nai, advertisements on bus exteriors are common.


HCMC will need 3,100 commuter buses from now to 2015. In the 2016-2020 period, the city will invest in an additional 3,500 vehicles.


By 2020, buses will account for 16% of transport demand of citizens. The city will try to ensure the percentage of passengers satisfied with bus services hits 90%.


Nha Trang to have 1,000 new hotel rooms


Best Western and Crowne Plaza Nha Trang, two luxury hotels in Khanh Hoa Province’s Nha Trang City, will be put into service this year and supply a total of around 1,000 rooms for this coastal city.


Truong Dang Tuyen, director of the provincial Department of Culture, Sports and Tourism, said that the two projects located on the seafront Tran Phu Street would open in September.


Khanh Hoa Province currently has some 4,000 rooms of three- to five-star standards. Therefore, the 1,000 new rooms will substantially increase the quality of accommodation service.


Besides, construction of many hotels projects in the province has resumed after a quiet period.


Recently, Mien Nhiet Doi Nha Trang Co. has announced the design of the Tropicana Nha Trang complex also located on Tran Phu Street. The complex will consist of 400 five-star hotel rooms, around 900 serviced apartments and commercial center.


According to Tuyen, projects on Tran Phu Street are being implemented quite well while around 20 tourism projects, especially resort ones along the Long Beach area, are moving slowly.


Khanh Hoa Province welcomed around 2.3 million tourists last year, with international tourists accounting for 530,000, and earned over VND2.568 trillion in tourism revenues, up 14%. In addition to 4,000 rooms meeting three- to five-star standards, the province has around 13,000 rooms of lower standards.


Regarding the planned relocation of Ana Mandara hotel on Tran Phu Street to clear space for a coastal park, the hotel will be operated as usual and not be relocated until 2020, according to the provincial government’s instruction.


The Ana Mandara hotel located on a land site of some 20,000 square meters belonged to a foreign investor in the past and is now run by Khanh Hoa Trading and Investment Co.


Trade deficit starts soaring in half May


As of May 15, Viet Nam ran a trade deficit of US$1.51 billion, according to the General Customs.


In the first half of May, trade deficit amounted to US$830 million. Total trade volume reached US$11.06 billion.


Of the trade volume, export turnover fetched US$5.11 billion, down 5% against the same period last month while import volume reached US$5.94 billion, up 16.2% over the same period last month.


Since the beginning of the year, total export-import turnover valued at US$89.94 billion, a year-on-year increase of 16.8%, including US$44.21 billion (up 16.4%) in export and US$45.73 billion (up 17.1%) in import.


Viet Nam’s trade deficit of US$1.51 billion accounted for 3.4% of export turnover. /.


IMF positive about Vietnam’s macro-economy


The International Monetary Fund (IMF) has made positive assessments on Vietnam ’s macroeconomic situation as well as the policy management of the State Bank of Vietnam (SBV) over the past time.


A press release, posted after IMF concluded the annual consultation mission to Vietnam in late April, said that Vietnam ’s macro-economy has shown signs of recovery mainly thanks to strong exports.


It pointed out that the country’s headline inflation reduced from double digits to about 7 percent year-on-year in March, while calm has return to the financial market with the SBV’s efforts to provide liquidity and the merger of several small, weak banks.


The achievements gained during the macroeconomic and financial market stabilisation in 2012 helped improve the credibility of the SBV with market participants, IMF affirmed, noting that while headline inflation has come down, core inflation (excluding basic food and energy) still remains high, limiting the room for interest rate cut.


The fund suggested the Vietnamese Government accelerate reforms in the banking and State-owned enterprises sectors to reduce vulnerabilities and restore Vietnam to a higher, sound and sustainable growth path.


The recent stabilisation gains need to be consolidated through appropriate macroeconomic policies to further bolster international reserves and fiscal buffers, it said.


At a recent interview granted to the Vietnam Television, the IMF Mission Chief Alfred Schipke also affirmed that Vietnam’s economic policy has rather succeeded in restoring macroeconomic stability over the past more than one year, which is reflected in the strong decline of headline inflation and the increasing trust in domestic currency.


Regarding the gold market, the IMF mission said that the SBV’s recent moves to manage the gold market, including the rejection of the monetary intermediary role of gold, help reduce fluctuations in the financial sector caused by gold speculation.


It also agreed with the central bank’s measures to ban other banks from receiving deposits in gold, saying that it is for the benefit of financial stabilisation.-


Japan ends Trifluralin tests on Vietnamese shrimp


Japan has announced to end tests for Trifluralin, a commonly used pre-emergence herbicide, on Vietnamese shrimp exported to the country, according to the Vietnam Association of Seafood Exporters and Producers.


Following the start of Japan ’s tests on October 21, 2010 , Vietnam ’s Ministry of Agriculture and Rural Development banned the use of 44 Trifluralin-contained products in aquatic farming as part of efforts to win back Japan ’s confidence in Vietnamese shrimp.


Besides, Vietnam ’s shrimp export business community has endeavoured to control Trifluralin in all exported shrimp, which had a significant impact on Japan ’s decision.


Japan remains the largest market for Vietnamese shrimp. In the first four months of 2013 Vietnam exported 168 million USD of shrimp to the country, up 2.4 percent from the same period last year.-


Savills Vietnam releases property index in Ho Chi MInh City May 2013


Savills Vietnam, one of the first property consultants to release its owned property index today confirmed that the first quarter of 2013 residential index stood at 89.2, a slight decrease of -0.4 index points quarter-on-quarter (QoQ) and -3 index points year-on-year (YoY).


The majority of projects that had price reductions still had sluggish performance.


“Although there is strong supply, the absorption rate this quarter remained stable due to the improved number of sold units. The number of sold units increased 2 per cent QoQ and 25 per cent YoY. The ‘sold’ volume has been trending upward for three consecutive quarters,” it cited.


Since the base period of early 2009, the average market price including new projects has decreased by approximately -22 per cent whilst the index, which is calculated on the constant project basket only decreased by -11 index points.


“This shows that the downtrend in the average price is mainly due to the lower price of newly launched projects rather than price adjustment of existing projects,” according to Savills’ press release.


Although the downward trend of the residential price index continued this quarter, the rate is slowing. Combined with the significant improvement in transaction volume, a gradual market recovery and more stabilisation might be expected in the near term, it continued.


Regarding the index in office segment, the consultant said that the QoQ office index rose sharply in 2006, peaked in the second quarter of 2008 and then dropped sharply during the two latter quarters of the same year. Since 2010, the market has been in a downward trend.


The office index in the first quarter of 2013 stood at 73, an increase of 1.7 index points QoQ.


“Despite a slight decrease in average market rent, increased occupancy this quarter has helped to bring up the index,” it commented.


The CBD area performed better than the non-CBD in terms of both rent and occupancy. As a result, the CBD index rose slightly by one index point QoQ whilst non-CBD decreased by -3 index points.


Along with improvement in the index, market take-up also had substantial increase of 173 per cent QoQ and 70 per cent YoY.


“These are very positive indicators for a more stable and improving performance of the office market in the upcoming quarters,” it cited.


A-Z of microfinance risk management tricks


Vietnamese microfinance institutions have received words of wisdom to manage their risks.


At a recent workshop on sustainable interest rate setting and risk management in microfinance institutions, International Finance Corporation senior risk management specialist Andrew Pospielovsky said that Vietnam’s microfinance risk management remained weak and that was one of the main challenges they would confront during their transformation into licensed microfinance institutions and growth process.


He said Vietnam’s microfinance institutions should apply seven principles of risk management as many other foreign advanced nations were doing.


Microfinance institutions must identify risks and assess and measure risks. Accordingly they must estimate potential loss associated with each specific risk if poorly managed. This is related different risks to each other, keep different risks in perspective and understand what risks to prioritise.


Microfinance institutions must also know how to mitigate and limit risks. The easiest way to mitigate a risk was not to do the business activity that generates that risk, he said.


“The first step to limit risks is you must define what business activity you will and will not do, from the perspective of what risks you are prepared to take on,” Pospielovsky said. “Limitations are not just with regards to products, but also to whom – to which client segments.”


Microfinance institutions must also create controls and systems and build controls and limits into their monitoring systems as much as possible.


He said the systems needed to be tested on an ongoing basis.


Microfinance institutions must also document their limits, controls and systems in policies and procedures. After that they conduct implementation of the risk management systems.


Finally, they must also test, monitor, review and improve their risk management systems, controls and limits. Risk drivers include business, market and macro-economic environment and staff expertise. Therefore, risk management systems, controls, limits, policies and procedures also needed continual development, he said.


“Risks that threaten the financial viability for the microfinance institutions, such as credit risk or liquidity risk, should generally be reviewed on at least a monthly basis by senior management. Others may be reviewed quarterly or semi-annually, including by board of management and board of directors,” Pospielovsky said.


Speaking about the issue of interest rate setting in microfinance institutions, Nguyen Thi Tuyet Mai, director of the Vietnam Microfinance Working Group – a network of microfinance institutions and practioners said the current interest rate caps would make microfinance institutions less sustainable to serve the low-income clients. If these microfinance institutions stopped offering convenient and cheap financial services to the poor, low income people had to approach money lenders at excessive interest rates of about 100 per cent, per year.


She compared commercial banks and microfinance institutions to prove that the client’s the borrowing cost for a loan from microfinance institutions was cheaper.


Recently, the State Bank of Vietnam has issued several circulars putting an interest rate cap for credit institutions including microfinance institutions.


Sharing global experiences on this topic, Eric Duflos, CGAP Representative for Asia and Pacific Region has emphasized the fact that 50 per cent of adults are unbanked in the Asia.


“We also need to consider about the majority of poor customers who were not served by the banks, so they caught off guard against seduction tactics of black creditors,” he said.


Duflos also shared with all workshop participants the comparison among some countries in Asia to indicate that current interest rates charged by Vietnamese microfinance institutions were relatively low. In conclusion, he made a recommendation to remove interest rate cap on microfinance institutions in order to develop a sustainable microfinance sector in Vietnam.


Getting accustomed to customs efficiency


The customs sector will ramp up check at material import businesses with greater attention paid to importers of materials for export production, processing, and commodities in transit, according to the General Department of Customs (GDC).


Risk-prone businesses will be black-listed and subject to closer controls.


Commodities in transit, and those placed at bonded warehouses and export processing zones will grab customs bodies’ special attention.


The customs bodies will gather diverse sources of information relevant to import goods and people filling in customs declarations, especially those placing head offices in one place, but handling customs procedures in other places.


Imported foods shall incur closer control to reduce threats to epidemic outbreaks.


Deputy minister of Finance Do Hoang Anh Tuan said customs procedure reforms would be one of core contents for better customs management.


“The time for customs clearance in Vietnam is longer than in other regional countries whereas customs-related factors account for one thirds of the factors leading to the delay,” Tuan said.


Therefore, to enhance transparence in customs field, the Ministry of Finance just enacted Decision 808/QD-BTC announcing administrative procedures in customs field which are under its management, including 22 amended, supplemented and one fresh procedure. The new procedure relates to e-signature registration.


In respect to e-signature registration procedures, the e-signatures in e-customs procedures are the public digital signatures which were verified by customs bodies as compatible to e-customs data processing system.


The GDC will scale up efforts to shortly make public the list of organisations supplying e-signature authentication services.


The customs bodies are also trying to extend the list of enterprises subject to enjoying priority in customs check for their long-time law obedience. Twenty businesses will reportedly be given the priority status as coming on par with GDC standards in 2013.


Maersk Line Vietnam on a fruitful voyage


Danish-backed Maersk Line Vietnam has reaped good operational results in this year’s first three months.


For the first quarter of 2013, Maersk Line Vietnam and Cambodia showed a positive result compared to same quarter last year. Its volumes grew by 2 per cent and revenue by 5 per cent.


“Globally, Vietnam is still considered an attractive sourcing destination with competitive advantages in low labour costs, a strategically sound geographical location, leading positions within agricultural exports, high gross domestic product growth rate, long term political stability, and a government committed to enhancing economic stability and development,” said Maersk Line Vietnam director Nguyen Thi Ngoc Bich.


“As a result, despite the gloomy situation of global economy, there are still great opportunities to pursue,” Bich said.


Maersk Line in Vietnam and Cambodia grew 7 per cent in 2012. For the remaining of 2013, Maersk Line will focus on maintaining the market position and increasing profitability levels. In order to achieve these goals, the world’s largest carrier will keep focusing on delivering excellent customer experiences, develop their people across local and global organisations and continuously cut its cost base.


Maersk Line Global in this year’s first quarter made a profit of $204 million - up from minus $599 million in last year’s first quarter - and a return on invested capital of 4 per cent – up from minus 12.7 per cent in last year’s corresponding period.


The significant turnaround in the financial performance was achieved by means of lower operating costs as revenue of $6.3 billion remained unchanged. The average freight rates increased 4.7 per cent compared to last year’s first three months, partly offset by 4 per cent lower volumes.


Viettel's charter capital set to double after restructuring


Its charter capital will be doubled to VND100 trillion ($4.7 billion) after restructuring and it is required to divest all capitals from financial investment, but allowed to invest in other projects, such as broadcasting in radio and television.


Accordingly, Viettel will focus business services on telecommunication, information technology, broadcasting, posting, delivery, equipment manufacturing and researching for IT, telecommunication and broadcasting.


Viettel must withdraw capital from Viettel Technologies Corporation, Vinaconex Commercial Development, EVN International, Vinaconex-Viettel Finance and Coecoo Rubber Industry.


In addition, it must merge EVN Telecommunications to Viettel’s parent company.


Specifically, during 2013- 2015, the corporations will retain 11 member subsidiaries including Viettel Telecom, Viettel Property, Viettel Broadcasting and 63 branches all over provinces, cities in Vietnam.


Besides, the corporation will hold 100 per cent stakes in five, one-member limited companies which are M1 Information, M3 Information, Viettel Import and Export, Viettel housing business, Viettel Technology Investment.


Moreover, parent company holds over 50 per cent of charter capital in seven subsidiaries, including Viettel Post, Viettel International Investment and under 50 per cent in four others, which are Vinaconex, Military Bank, Vinaconex-Viettel Urban Development, Vinh Son Joint Stock Company.


PM steps up overhaul of banks


The Prime Minister has approved the formation of an asset management company which will purchase non-performing loans from banks in an effort to speed up the clean-up of bad debts, which is preventing banks from providing more business loans and dampening economic growth.


According to Le Minh Hung, Deputy Governor of the State Bank of Vietnam (SBV), the soon-to-be established Vietnam Asset Management Company (VAMC) will be a wholly State-owned under the control of the SBV and is expected to start operations by the end of this quarter.


Last year, Vietnam’s gross domestic product grew 5.03%, the slowest pace since 1999.


In the first quarter of 2013, the growth rate was 4.89%, slightly higher than the 4,75% expansion in the same quarter of 2012 but significantly lower than 5,53% in the first three months of 2011.


According to the central bank, VAMC will issue special bonds to buy up bad debt from troubled banks.


NA Deputy Cao Si Kiem cited a Government report as saying that year to date the ratio of non-performing loans has fallen to 7.6% from 8.82% as of September last year but remained high.


Eximbank receives Asian Banker’ awards


The Asian Banker magazine has awarded the Best Managed Bank in Vietnam 2013 and the Asian Banker Leadership Achievement Award to the Vietnam Export Import Bank (Eximbank Vietnam).


The awards are the Asian Banker’s recognition to the Eximbank’s sustainable development over the past three years.


Last year, the bank received the “Best Domestic Bank in Vietnam ” by Asian Money and was named among the world’s top 1,000 largest banks by Banker magazine.


Over 24 years of development, Eximbank Vietnam has increased the owner’s equity to 15 trillion VND (about 722 million USD) from 13.3 trillion VND in 2010.


The banks has established correspondent banking relationship with over 852 banks and their branches in more than 80 countries in the world.


On the same day, the Bank’s Chairman Le Hung Dung was conferred with the Labour Order, third class, for his contributions.


Vietnamese defence businesses eye French market


Thirty businesses from the Vietnamese Defence Ministry on May 22 attended the France-Vietnam Business Forum in Paris ’s outskirts city of Neuilly-sur-Seine to seek potential partners in their fields.


The forum, co-organised by the Vietnamese Embassy’s Commercial Affair Office and the French municipal leaders, is part of Vietnam ’s national trade promotion plan approved by the Ministry of Industry and Trade.


Besides introducing their products, the businesses sought French partners, especially in construction, machinery, chemicals, garments and textiles, pharmacy, medical equipment, rubber, coffee and vocational training.


This is Vietnamese defence businesses’ first presence in the French market, said Head of the Economic Department under the Defence Ministry, Major-General Tran Trung Tin, who led the delegation to the forum.


France is one of Vietnam ’s major trade partners, he said, adding that many French businesses have shown their interest in Vietnamese defence enterprises, which contribute 8-10 percent to the national gross domestic product (GDP) annually.


Jean Christophe Fromantin, Vice Mayor of Neuilly-sur-Seine city located in the Il-de-France region, briefed on his city’s potential, describing the event as a starting point for cooperation between the locality and Vietnam , especially in the fields of each side’s strengths.


Alain Bui, an advisor at the Paris Il-de-France Chamber of Commerce and Industry, pledged that the chamber will do its best to steer the interests of small and medium-sized enterprises of Paris and the Il-de-France region to the Vietnamese market.


Earlier in April, 91 French businesses, including 26 from the French region, attended a business forum in Ho Chi Minh City .


The two sides have defined electricity, environment, farm product processing and transport infrastructure as promising areas of cooperation


Central route to better infrastructure


A landmark expressway project is expected to bring substantial changes to the central region’s infrastructure.


“With total investment of $1.47 billion, the North-South highway eastern branch’s Danang-Quang Ngai expressway will create substantial changes in both quality and quantity to central region dynamic development region’s infrastructure,” Prime Minister Nguyen Tan Dung said at the project’s construction kick-off on May 19.


“The expressway will help attract big investors to the region since when the project was finalised, travel time from Danang city, a nucleus city in the central region key economic zone to Quang Ngai-Vietnam’s largest oil refinery and petro-chemical complex would be shortened significantly to just one and a half hours,” the premier added.


Minister of Transport Dinh La Thang said the 140 kilometre long, four-lane expressway will not only contribute to eliminating central region transport bottlenecks, but also open cost-efficient capital raising channels for the country’s infrastructure projects.


In fact, it took a decade before the expressway project was given to developer Vietnam Expressway Corporation (VEC), Vietnam’s largest expressway developer.


“Until this time, the impediments for the project’s implementation were almost settled by VEC. Most significant was the fact that the World Bank and the Japan International Cooperation Agency have large credit packages to execute the project,” said VEC general director Mai Tuan Anh.


“Since the VEC borrows all project capital from the government and has to fully refund it, tightly controlling expenses and completing the project on schedule in 2017 are vital to the company’s business efficiency,” Anh noted.


Notably, tender package 3A on building Ky Lam bridge crossing Thu Bon River which jumpstarts the project construction was honoured on a consortium of two local contractors – Cienco 4 and Thang Long Construction Corporation at the bid price of VND1.416 trillion ($67.4 million).


“Local investors and contractors’ proven status at international bids involving implementing big transport structure projects like the Danang-Quang Ngai expressway is positive signs paving the way for infrastructure development successful breakthroughs in the coming years,” said Thang.


Foreign cash to drive highway


BT 20 Joint Stock Company and the US’ Goldman Sachs are coming closer to an agreement on $250 million funding for implementation of a project on repair and overhaul of 110-kilometre-long National Highway 20 in the first phase under build-transfer (BT) form.


This came during a recent gathering of project donors in Hanoi early this week with leaders from the ministries of Transport (MoT) of Finance, project developer BT 20 and representatives from Goldman Sachs and loan guaranteeing organisation- Multilateral Investment Guarantee Association (MIGA) under the World Bank.


The capital donor has completed the capital funding plan, including proposed interest rate, guarantee fees and disbursement pace for around $250 million commercial loan out of the project’s total investment capital of $275 million, according to a Goldman Sachs source.


The capital donor said 95 per cent of the loan would be guaranteed by MIGA following the principle that MIGA will ensure time payments on behalf of the capital donor in case the Vietnamese government faces hardships in sourcing capital for the project.


If the funding package was inked, it would be the first time a Vietnamese transport infrastructure investor approached a foreign loan under MIGA guarantee.


Besides National Highway 20, MIGA is reportedly considering provision of around $600 million risk guarantee package for the Hanoi-Haiphong expressway project.


According to BT 20 general director Do Ngoc Dung, the project had a sufficient legal base, including an investment certificate and a signed BT contract with a competent government agency.


“The project developer is a group of local leading businesses in material production and road, bridge construction,” Dung noted.


By mid-May 2013, the developer had succeeded in raising around $25 million for the project’s execution until end of July 2013, according to a BT 20 executive.


National Highway 20 is an arterial route linking southern economic and political hub Ho Chi Minh City and Lam Dong province’s Dalat city, one of major transport axles of Dong Nai province and serving economic and tourism development in Dong Nai and Lam Dong provinces, according to deputy MoT minister Truong Tan Vien.


Since state investment sources are still finite in current context, the project’s capital should be raised under BT form for investment execution.


“The MoT hopes the capital donor Goldman Sachs and loan guarantor MIGA shortly finalise negotiating with the developer for submission to competent government agencies and the prime minister for approval, paving the way for the project fulfillment by 2014,” Vien said.


Textile firms enjoy numerous export contracts


Many members in the local textile industry say they have won plenty of export contracts for this year and that they are running at full capacity to meet deadlines.


Nguyen An, general director of Garmex Saigon, said his firm had acquired a great deal of orders from foreign buyers and that the already-signed orders surpass its capacity by around 5%.


In the last two years, export orders earned by Garmex Saigon have mainly come from the United States instead of the Europe Union as before. Besides, the firm will start making products for the first order from a Japanese partner from November.


While Japanese enterprises have transferred many of their orders to Vietnam from China, U.S. companies are seeking to establish ties with Vietnamese partners to stay ahead of the Trans-Pacific Partnership agreement that the nation is expected to sign in 2015.


Similarly, Saigon 2 Garment Joint Stock Company is making an all-out effort to fulfill the orders, with those from the U.S. making up some 35-40% of the total, said Nguyen Huu Toan, deputy general director of the enterprise.


Like Saigon 2, many other apparel makers have also attracted a lot of orders for export, Toan noted.


The nation’s garment production and export will change for the better in the months to come since export orders are seen sufficient for production until the end of the second quarter or the third quarter, says a report from the Ministry of Industry and Trade. However, the ministry forecasts a sharp fall in this year’s profits for the textile industry against 2012, saying industry players in a fierce competition are unable to raise export prices at present.


Textile and garment export brought home nearly US$5 billion in January-April, growing 18% year-on-year, the General Department of Customs reports. Notably, textile export value contributed by foreign direct investment enterprises accounts for up to 59%, equivalent to US$2.9 billion.


Controversy keeps raging over swallow breeding


State managers and swallow breeders keep voicing contrary opinions about a draft circular on requirements for raising swallows in Vietnam.


The Ministry of Agriculture and Rural Development on Tuesday held a consultation session on the draft circular in HCMC with the participation of swallow farmers and representatives from State management agencies and the Department of Animal Husbandry. Although this had been the seventh consultation session, both sides were still at odds.


A representative from the agriculture department of Ninh Thuan said the circular should determine the distance from swallow breeding facilities to residential areas and permitted decibel levels. It is necessary to map out a zoning plan for swallow raising areas so that management agencies can better control diseases and quality of products from swallows, he said.


Nguyen Thanh Son, director of the National Institute of Animal Husbandry, said the ban on raising swallows in downtown areas should be reconsidered. He suggested specifying where swallow raising is allowed and where it is not, and establishing criteria for disease prevention and control.


Representatives of swallow breeding companies agreed that it is necessary to map out a plan for swallow farming areas. Still, they asked compilers of the circular to avoid gathering all swallow breeding households into a single area, which might affect the swallow density of each household.


Do Tu Quan, general director of the edible swallow’s nest company Cuu Long Phi, said the circular should regulate certifications on quality and origin of swallow’s products, such as certification of legitimate swallow breeding and certification of food hygiene and safety for swallow nests.


In response to various opinions of the delegates, the animal husbandry department said it would send a delegation to Malaysia, a nation with long experience in swallow breeding and swallow nest harvesting, to learn the way this country manages its swallow raising industry.


There are now over 700 swallow breeding facilities and some 1,500 swallow barns in 16 cities and provinces nationwide, said Deputy Minister of Agriculture and Rural Development Vu Van Tam.


S. Korean firms explore business chances


Ten companies from South Korea attended a business forum in Hanoi on Tuesday to sound out opportunities for investment in Vietnam.


These South Korean firms are active in electronics and information technology (IT), and include Dicapac, Tilon, Carrot Global, Yoi System and Icomer.


The forum offered Vietnamese businessmen a chance to meet with those from South Korea, discuss the topics of mutual interest and establish long-term partnership.


Vietnam is an important market for South Korean major export items such as textile-garment and leather-shoe materials, chemicals, fuels and automobiles.


At this forum, the South Korean companies introduced their electronics and IT products alongside traditional products like industrial computers, fire alarms and robotic chairs.


Steve Jeon, representative of Dicapac, said offering competitive prices was one of the strategies his firm would pursue when penetrating the Vietnamese market.


On behalf of the South Korean business delegation, Jerry Han said there would be many more delegations coming to Vietnam this year to look for opportunities in various fields.


South Korea is the fourth largest trade partner of Vietnam, after China, Japan and the U.S.


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





Đăng ký: VietNam News

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