Sat. Dec 3rd, 2022

Minister slams Vinalines for tardy restructuring process

Minister of Transport Dinh La Thang has criticised General Director of Vinalines Nguyen Canh Viet for being absent from a meeting on restructuring Ministry of Transport companies, including Vinalines.

The minister frankly outlined the problems facing Vietnam National Shipping Lines (Vinalines) and Vietnam Shipbuilding Industry Group (Vinashin) at the meeting.

After some Vinalines members said that the firm’s general director had gone to Cambodia, Minister Thang said, “Going to Cambodia could help him to save Vinalines?”

The minister said the pace of Vinalines’ restructuring was too slow, and he urged greater speed. He also wanted to confirm whether Vinalines could finish the government’s restructuring project or not.

Vinalines Deputy General Director Le Anh Son said, “Without the restructuring, Vinalines would face high risk of bankruptcy. Currently, the group is insolvent and the banks are not in favour of extending the debt payment schedule for the corporation.”

Mr. Son said Vinalines was negotiating with banks to facilitate the restructuring process.

Minister Thang noted that, “Vinalines’ restructuring comprises of many steps, but the most important thing is financial resources. It is essential to clearly report which firms should be maintained, liquidated or merged. In necessary cases, the minister and deputy minister will work with banks on debt-related issues.”

The minister said that in reality, Vinalines had failed to repay its debts, and it wasn’t the banks who had wanted to extend the debt payment. He attributed the slow restructuring to lax management.

Vinalines has 216 companies which need to be restructured, 19 of which have negotiated with a debt trading firm for privatisation. However, to date, Vinalines has not yet finished the privatisation of any affiliates.

For Vinashin, General Director Vu Anh Tuan said no improvement had been seen in the group’s restructuring.

Vinashin has lost nearly all its equity and does not have capital for its business and production activities, yet it still faces outstanding loans.

Minister Thang has urged Vinashin to sell any planned ships for debt payment from now to June 30.

Credit institutions banned from opening gold accounts

Credit institutions have been banned from providing loans to customers to buy gold, according to the State Bank of Vietnam (SBV).
The SBV requested credit organisations not to turn gold deposits into currency
Credit institutions are only allowed to lend to customers who wish to buy gold upon the approval of the governor of SBV, which would generally be reserved to loans for jewelers.

The SBV also requested credit organisations not to turn gold deposits into currency or use gold deposits as collateral for loans from other credit institutions.

Under SBV regulations, customers must pay fees to credit institutions that keep their assets, including gold, but the fees must be fully disclosed.

The SBV’s move is aimed at slowing down gold deposits and curbing the practice of commercial banks liquidising gold deposits for lending or for use as collateral for inter-bank loans.

Today (March 28), the first gold bar auction will be held by the SBV in a bid to stabilise gold prices.

Government proposes PPP reciprocal funding

Public-Private Partnership investment forms will be encouraged with a VND20 trillion (USD959 million) fund as proposed incentives for the projects on March 27.
The Ministry of Planning and Investment (MPI) proposed to use the money as reciprocal capital for PPP projects at a review conference after 25 years of attracting foreign direct investment to Vietnam.

The ministry also said they would complete necessary procedures to establish a Project Development Fund for PPP projects, and submit the guidelines for the fund in the second quarter this year.

According to the plan, at least five to ten projects will be chosen for the pilot implementation of PPPs.

During the last months of 2013, the Ministry of Finance will have to build plans for infrastructure funds and issue regulations and guidelines on procedures to disburse and manage the state’s capital in PPP projects.

In the second quarter, the Ministry of Industry and Trade will submit all the shortcomings related to the negotiation process related to Build–Operate–Transfer (BOT) projects.

Measures to supervise the capital flows of FDI enterprises were also mentioned at the conference. Furthermore, supporting industries will be able to enjoy tax incentives as well as legal framework for mergers and acquisitions in the future.

Vietnam enjoys US$480-million trade surplus in Q1

Vietnam runs into trade deficit again in March, but exports and imports in the entire quarter produce a surplus of US$480 million.

Exports in March are estimated at US$11 billion, up 15.9% over the same period in 2012, while imports amount to US$11.3 billion, up 22%, leading to a trade deficit of US$300 million.

Overall, exports in the first three months fetch some US$29.69 billion and imports reach US$29.21 billion, recording a year-on-year rise of 19.7% and 17% respectively, and resulting in a US$480-million trade surplus, said the ministries of industry-trade and finance.

Industrial goods greatly contribute to the export growth as the export turnover of this group of items surges 30% year-on-year, making up 68.7% of the country’s total exports.

Cell phone achieves the highest export turnover, approximately US$5 billion, an increase of nearly 90% against the same period last year.

Agricultural products suffer a sharp decline in export volume, while fuels and minerals record a rise in turnover despite a significant fall in price.

The export turnover of fuels and minerals in the first quarter is estimated at US$2.63 billion. Only the group of ores and other minerals enjoys export growth (35.1%) thanks to the huge increase of 228.5% in export volume, offsetting the price drop of 58.9%.

Foreign-invested enterprises (FIEs) perform the best, achieving a trade surplus of over US$3 billion in the first quarter.

FIEs export US$19.25 billion worth of products, including crude oil, in the first quarter, a growth of 25.6% over the same period last year, accounting for 64.8% of the total export turnover of Vietnam. Meanwhile, they import US$16.14 billion worth of goods, up 25.5% year-on-year, standing at 55.2% of the nation’s total imports.

As such, this business sector enjoys a trade surplus of US$3.11 billion, up 21% over the year-ago period.

This positive result is attributed to the strong growth in exports of Samsung mobile phones and the fact that crude oil exports are counted as exports by FIEs.

Excluding crude oil, FIEs in the first quarter gain US$17.36 billion from exports, an increase of 27.1% year-on-year, making up 58.48% of the total exports of the country.

Le Thi Minh Thuy, director of the Trade and Service Statistics Department under the General Statistics Office, said crude oil extraction is assigned to FIEs, so crude oil is included in the goods exported by this sector, although it is Vietnamese firms who export crude oil under consignment contracts.

Tra fish output falls sharply

The volume of tra fish has dropped strongly in the year’s first three months, posing difficulties for local processors in securing tra fish to meet export orders.

The Ministry of Agriculture and Rural Development in a report on agricultural production for the first quarter said the volume of tra fish harvested in most of the Mekong Delta provinces has declined in the quarter.

Dong Thap Province harvests over 53,000 tons in the first quarter, down 6.5% year-on-year, while that of Ben Tre Province is only 18,500 tons, down 48.6%. The respective volumes in Can Tho City and Tien Giang Province are 12,100 tons and 6,700 tons, falling by 33.7% and 21.6% year-on-year.

According to the ministry, tra fish farming is in difficulty due to high production costs, and farmers are suffering huge losses resulting from a decline in price in combination with an increase in input costs.

The average tra fish material in February sold for VND20,750 a kilo while the average production cost was estimated at VND23,500, making farmers suffer a loss of some VND2,750 per kilo.

Besides, although the price has increased to VND22,500 a kilo this month, farmers still lose around VND1,000 for every kilo of tra fish harvested.

Russian tourist arrivals hit new record high

Russian tourist arrivals set a new record this month with a tremendous growth of 80.3% year-on-year, whereas tourist arrivals from other markets witness a drop or just a slight increase.

Vietnam has welcomed nearly 587,400 international tourist arrivals in March, up 1.6% over the same period last year, with over 30,600 of them from Russia. Therefore, Russia makes it to the top five visitor-generating markets for Vietnam, together with China (130,000 tourist arrivals), South Korea (67,700), Japan (58,000) and the U.S. (37,000).

In the year to date, the number of Russian tourists coming to Vietnam has reached nearly 85,000, a rise of 50.8% year-on-year, according to the Vietnam National Administration of Tourism.

However, the spectacular growth in Russian tourist arrivals and the modest increase in tourist arrivals from South Korea, China, Indonesia and Thailand do not help brighten the overall picture of the local tourism industry.

With a decline in tourist arrivals from other major markets like Japan, Taiwan and the U.S., the total number of foreign tourists visiting Vietnam in the first three months is only over 1.8 million, down 3.9% year-on-year. In the same period last year, the country achieved a year-on-year growth of 24.5% in international tourist arrivals.

The inbound tourism segment will enter the low season next month. Many tour and hotel operators have gone to international fairs in Germany, France, the U.S. and Russia to prepare for a new tourism season.

After attending an international fair in Berlin, Germany, Bui Viet Thuy Tien, managing director of Asian Trails Co. Ltd., told the Daily: “We find not so many positive things when meeting partners at this fair. The number of booths is smaller than in previous times.”

Communications manager of a five-star in HCMC’s District 1 said the sales department of the hotel was working very hard in preparation for the upcoming low season. “This month, our hotel is fully occupied on a couple of days, but the situation seems to be difficult in April,” she said.

Manulife Vietnam grows 19% in sales

Life insurer Manulife Vietnam reported a positive growth for 2012 with annualized premium equivalent insurance sales of VND718 billion, increasing 19% over 2011.

It total premiums and deposits were at over VND2.1 trillion, a 21% year-on-year surge. This is strong evidence of the company’s commitment to business development and market expansion in Vietnam, Chung Ba Phuong, CEO of Manulife Vietnam, said in a statement released on Tuesday.

The insurer focused on developing a customer-driven agency force as part of its strategy to differentiate itself from competitors. In 2012, Manulife Vietnam had the most MDRT (Million Dollar Round Table) qualified agents.

This internationally recognized title honors outstanding agents in the life insurance and financial services business. The enterprise had 286 MDRT qualified agents in 2012, up 55% from 2011.

Manulife Vietnam also promoted ties with strategic banking partners in 2012 to diversify products and services, improve service quality and reach out to new customers. It posted up an 85% increase in bancassurance sales last year.

HCMC banks lend VND100 trillion to preferred sectors

Banks in HCMC have given loans worth nearly VND100 trillion to enterprises in five preferred sectors, namely agriculture, small and medium-sized enterprises, export, supporting industries and high technology.

According to the central bank’s HCMC branch, these credits have been disbursed since last July to around 22,000 corporate clients.

The agency has cooperated with local authorities to carry out many connection programs between banks and enterprises to help businesses access capital sources.

Nguyen Hoang Minh, deputy director of the central bank’s HCMC branch, said that two connection programs have been organized this year, one in District 8 weeks ago and one in District 6 that took place on Wednesday.

Some 34 enterprises and traders of Binh Tay, Phu Lam and Minh Phung markets in District 6 on Wednesday were given loans with the total value of VND671 billion at lending rates under 11% per annum. The credits were given by VietinBank’s branch no. 6.

BIDV says will assist development of upland regions

Bank for Investment and Development of Vietnam (BIDV) pledges it will set aside nearly VND11 trillion to assist the Central Highlands and the Northwest in socio-economic development.

At the second Central Highlands Investment Promotion Conference slated for April 12 in Pleiku City, Gia Lai Province, BIDV will sign financing agreements worth over VND7.3 trillion with many entrepreneurs and owners of projects in this region.

Similarly, the bank will provide a total fund of VND3.4 trillion for the sectors of paper, textile-garment, agriculture, mineral and hydropower in the Northwest. The signing of financing agreements will take place at the 2013 Conference for Investment Promotion and Social Security for the Northwest to be held in Tuyen Quang on April 3.

In addition, BIDV will grant mid- and long-term loans for investment and development in the Northwest. From now to 2015, the bank will give this region VND15 trillion worth of mid-term loans.

The second Central Highlands Investment Promotion Conference is aimed at boosting the efficiency of investment attraction and use of investment capital to promote socio-economic development in the Central Highlands. The conference also serves as a forum for investors and entrepreneurs to discuss policies, potentials and investment opportunities and seek ways to raise funds for development of the region.

From 2009 to 2012, BIDV’s credits for the Central Highlands grew 15% every year. As of end-2012, the outstanding loans for this region had reached over VND18.5 trillion.

In 2012 alone, BIDV deployed five financing programs worth VND10 trillion, including a VND5-trillion credit package for rubber and coffee, the major items of the Central Highlands.

Meanwhile, BIDV’s credits for the Northwest had an annual growth rate of 28% in the period from 2008 to 2012. The total outstanding loans for this region had amounted to VND27 trillion by the end of 2012, three times higher than the figure in 2008.

In the last five years, BIDV gave some VND3 trillion to Son La Hydropower Plant.

VTV, HTV cut deal for pay TV services

Vietnam Television (VTV) and HCMC Television (HTV) on Tuesday signed an agreement to share technical infrastructure and contents of pay television services with each other.

With the agreement, Vietnam Cable Television (VCTV) under VTV and HCMC Television Cable (HTVC) of HTV will be in charge of deploying the cooperation.

Both sides agree to share their pay television services nationwide, including utilizing technical infrastructure of pay television services of the partner to save investment costs and other related resources.

The cooperation is also aimed at bringing benefits to viewers with a vast array of pay television channels of VTV and HTV around the country, meeting their demand for information and entertainment in different regions. For instance, VCTV will provide more channels to viewers of HTVC and vice versa.

HTVC, which was established ten years ago, now has more than one million subscribers in HCMC and over 1.2 million subscribers of relayed HTVC channel packages in other parts of the country.

VTCV is wholly owned by VTV that covers nearly 40 provinces and cities with nationwide satellite digital television, Internet services on cable television and other television services. The firm has produced more than 16 different television channels so far.

3G services keep growing strongly: Qualcomm

The 3G services market in Vietnam has continued growing strongly and even achieved the highest growth in Southeast Asia even though the technology has just been launched over the past three years at home, Qualcomm said.

Thieu Phuong Nam, general director of Qualcomm in Indochina, said the growth of 3G services in Vietnam is growing strongly and has attracted 20 million subscribers after three years of commercialization. He ascribed the impressive growth to the increasingly cheap prices of services and equipment.

Besides, Nam noted the overwhelming presence of smart phones is one of the factors that have contributed the most to the growth of 3G services in the nation. His enterprise forecasts the local smart phone segment to grow 50% this year.

Despite the staggering growth, 3G services in the country have still exposed many shortcomings, according to Qualcomm. For instance, the services are available nationwide but their quality still remains poor, Qualcomm said, explaining data transmission speed is slow while application contents of 3G services are weak and inconsiderable.

Nam predicts local demand for big data exchanges to get bigger in the near future, which will force service suppliers to optimize the current telecom infrastructure to meet volumes exchanged on broadband services.

Qualcomm said Vietnam is among the few countries that have high preparedness for developing potential frequency bands for broadband mobile services. But it pointed out the biggest challenge facing local mobile services providers is that the average revenue per user is too low while poor service quality fails to satisfy subscribers.

Qualcomm insisted that local mobile services providers need to overcome the challenges if they want to further boost 3G development.

Better incentives for sci-tech firms

Minister of Science and Technology Nguyen Quan on Tuesday said that the ministry will adjust the legal framework to create more favorable conditions for businesspeople and enterprises in the field of science and technology.

Speaking at a seminar in Binh Duong Province on Saturday, Quan said the nation expects to see 3,000 science and technology enterprises by 2015.

The ministry will encourage institutes and universities to establish applied science research centers to bring scientific works to reality.

Nguyen Huu Duc, deputy director of Hanoi National University, said that it is difficult to produce scientific and technological products which become commercial products.

It is also hard to commercialize research work as scientists are not businessmen and don’t know how to capitalize, Duc said.

Nguyen Thanh My, chairman of My Lan Group, said science and technology companies have yet to access capital and tax incentives. The enterprise, which specializes in energy saving products, has yet to receive any feedback after sending a tax reduction application to related agencies two years ago.

Hoang Duc Thao, chairman of Ba Ria Vung Tau Drainage and Urban Development Company, said that his company could not benefit from these incentives as most of its scientific products aimed to serve social welfare.

Economic expert Le Dang Doanh said that there will be no scientific revolution if the Government fails to apply a suitable mechanism. The current framework doesn’t encourage enterprises to renovate their technologies.

Between 2000 and 2010, real estate prices surged 10-fold, prompting many investors to pour capital into this sector instead of investing in science and technology, Doanh said.

However, economist Pham Chi Lan from a macro viewpoint said that the modest number of enterprises applying advanced technologies is not a new issue. This was a problem of the 90s and the problem has worsened now given widespread corruption.

No trace of banned antibiotic found in seafood now

Seafood products such as tiger shrimp, white legged-shrimp and tra fish in the Mekong Delta and other southern provinces have been found to have no toxic antibiotic in a quality examination of a relevant inspection agency.

The southern unit of the National Agro-Forestry-Fisheries Quality Assurance Department (Nafiqad) has launched an overall inspection into localities as Japan and South Korea have tightened ethoxyquin and trifluralin residue checks on shrimps imported from Vietnam. Seafood quality control delegations from the U.S., Russia, Australia and Brazil have also made more trips to the country compared to previous years.

Therefore, Nafiqad has asked its units to speed up seafood checks. In the South, seafood produced in 14 provinces and cities have been confirmed to be free from banned substances.

Nguyen Van Nhiem, head of My Thanh Shrimp Association in Soc Trang Province, said that local farmers have raised awareness on using banned antibiotic in shrimp or tra fish farming.

Besides, farmers have gained experience in using substitute substances. However, antibiotic is no longer a problem to members of this association but they are now facing capital shortage to continue shrimp farming.

Over the past years, shrimp farmers in Soc Trang have taken out bank loans to facilitate farming. However, they have suffered heavy losses as a large volume of shrimp died en masse, Nhiem said.

According to Nafiqad, Binh Thuan, Tien Giang, Tra Vinh and Kien Giang provinces have suffered shrimp diseases due to unstable environmental factors. Tra fish diseases have also been detected in Vinh Long Province.

White spot and liver diseases on shrimps have spread throughout the country. Last year, Tra Vinh Province suffered the biggest damage with nearly 36.5% of shrimp farming area contracted with the diseases.

Multi-metal mining project to kick off

Masan Group says it will officially commission the Nui Phao multi-metal mining project in the northern province of Thai Nguyen in a fortnight, over two years after taking it over from fund manager Dragon Capital.

Nui Phao multi-metal mining area, covering 9.2 square kilometers in Dai Tu District, Thai Nguyen Province, has been in the process of commissioning. It has total reserves of about 55.4 million tons of wolfram, florit, bronze, bismuth and gold worth an estimated US$9.6 billion. Masan now is making more surveys with an aim to lengthen the scheme’s exploitation period by over 16 years.

Masan in the near future will export metal products from the scheme to a number of foreign markets with a total value of about US$100 million. Next year the firm plans to process products deeply before selling them abroad to seek higher added-value.

The project’s license was first granted to Tiberon Minerals Pte. Ltd in 2004 but it was acquired by Dragon Capital three years later. In 2010, Masan purchased the license from Dragon Capital with an estimated value of US$250-300 million without using cash.

Nui Phao project was invested with over US$130 million before being taken over by Masan, with the reserve’s estimation, feasible study and delivery of most of the equipment already complete. However, the land recovery ratio for the project was only 2% at that time.

After acquiring the project, Masan has poured more than US$300 million into the project to speed up its construction pace.

An executive of Masan said there are about 3,300 workers at the project at present, most of them local residents. The acquisition of the project is the first step of the company to translate its target of becoming the biggest private company in terms of natural resources in Vietnam into reality, he said.

Masan in its long-term strategy is looking to become a leading natural resource firm in the local private sector by exploring, acquiring and developing large-scale projects. Besides, the firm is looking to regularly update the latest technology to enhance global standards for its operation.

Masan Group in 2012 posted VND10.4 trillion in sales, a year-on-year growth of 47%, while its after-tax profit shrank 10% to VND2.8 trillion.

Masan in recent times has mobilized considerable investment capital volume amounting to over US$1.2 billion, including a staggering US$359 million for Masan Consumer, one of the group’s three subsidiaries, from U.S.-based KKR fund.

With such a huge capital volume, local experts believe that Masan is going to cut more deals to take over other firms and that the group will at first offer to buy a stake of Vinh Hao mineral water company.

Oversupply will hit local rice farmers’ incomes: VFA

Global rice oversupply will make deeper cuts into local rice farmers’ income this year than in 2012, said Truong Thanh Phong, chairman of the Vietnam Food Association (VFA).

The average rice export price in the first months of the year stayed low compared to the same period last year and will unlikely get higher in the coming time given abundant global supply.

The country in January-March exported 1.38 million tons of rice worth US$616 million, up 34.3% in volume but down 5.7% in value year-on-year, the agriculture ministry reports. Notably, the two-month average export price was only US$450 per ton, tumbling up to 14% year-on-year.

Global rice supply is really huge, Phong said.

India needs only 14-15 million tons of rice for its own food security but the nation now is holding up to 35 million tons in stock, Phong told the Daily on the sidelines of a 2012 review meeting of the industry in Hanoi on Tuesday.

Similarly, he said, Thailand is stockpiling 14 million tons of rice and the ASEAN country expects to harvest 12 million tons of paddy or some seven million tons of rice in the coming crop. This means that Thailand will be able to export huge rice volumes, he said.

Thailand has still applied the price subsidy policy targeting rice farmers, meaning the Thai Government will have to sell out rice in stock to buy new products from farmers. In this case, it is impossible to forecast global rice prices, he stated.

The problems will negatively affect rice exports of Vietnam. Therefore, Phong believed chances of rice export prices rising are slim in the year’s first half. If Vietnam increases the price sharply, the nation will fail to compete with other foreign rice suppliers, leading to lower incomes for local farmers than in 2012, he explained.

Trade surplus reaches US$482 million in Q1

Vietnam’s trade surplus was recorded at US$482 million in the first quarter of this year, according to the Ministry of Industry and Trade.

The export turnover in Q1 was estimated at US$29.68 billion, up 19.7 percent compared to the same period in 2012.

Of that figure, State-owned businesses brought back US$10.4 billion, accounting for 35 percent of the whole country’s total and up 10.1 percent against last year.

Foreign-invested businesses raked in US$19.25 billion, making up 65 percent of the nation’s exports, a year-on-year increase of 25.6 percent.

Total three-month imports hit US$29.2 billion, rising by 17 percent compared to the same period in 2012.

The import turnover of foreign-invested businesses stood at US$16.1 billion, increasing by 25.5 percent against the previous year.

State-owned businesses imported US$13 billion worth of goods, up 7.9 percent.

The Ministry of Industry and Trade says that the 19.7 percent export growth in the first quarter is an encouraging sign, beating the 10 percent target set by the National Assembly.

The three-month exports have met 23.5 percent of this year’s target.

The processing industry showed the highest growth rate for exports with 31.8 percent, while mineral-fuels increased slightly by 1.2 percent.

In contrast, agricultural products and seafood exports fell by 0.3 percent.

High-quality workforce vital for business

Demand for high-quality human resources is rapidly increasing throughout Vietnam and is expected to continue in the coming decade, say experts.

The forecast was made by the Ho Chi Minh City Center for Forecasting Manpower Needs and Labor Market Information and local job recruitment agencies.

Le Thi Kim Anh, Vice President of the Viet Nam Human Resource Club (VNHR) and Managing Director of Dynamic Consulting, said that most enterprises, especially domestic firms, faced many challenges in attracting employees that they actually need.

One major obstacle she cited was that the country’s education system does not teach certain skills that are required in the context of global economic integration.

High-quality human resources are vital for any enterprise, particularly those who were expanding their operations, she noted.

To deal with this problem, a number of enterprises have invested their own capital in re-training newly graduated students or developing various strategies to attract skilled employees from different sectors.

This in fact requires significant investment of both time and money. Compared with local companies, foreign-invested companies are more proactive in this domain as they are stronger in both capital and strategy.

A local HR director who declined to give his name emphasised the importance of devising a transparent policy on salaries and bonuses to attract the best talent.

In his view, improving the working environment not only includes hiring competent managers and offering competitive and fair remuneration but also means empowering employees to take initiative and be creative.

Each enterprise should clearly define its development strategy and then recruit a competent and committed workforce, Kim Anh suggested.

One strategy that helps organisations manage the workforce effectively is IT solutions.

IBM, one of the leading IT solution providers, has recently launched Smarter Workforce solutions in the Vietnamese market, which aims to help businesses attract talent, understand employees and empower teams across departments.

Smarter Workforce solutions will help executives to easily identify, attract and retain the best people, develop their skills, cultivate new leaders and capitalise on collective intelligence by applying good behavioral practices, social and analytic tools to transform the way they work, said Luu Quoc Bao, Collaboration Solutions leader, IBM Vietnam.

Global companies are also facing the problems of recruiting employees with the skills they need, said IBM ASEAN’s HR Director Tho Lye Sam, adding that for many companies, retention is a major challenge.

“The new ways that people interact and today’s workforce challenges make it critical for companies to rethink how they leverage and manage talent,” she said.

By creating a smarter workforce, employers can resolve problems before they arise. According to a McKinsey Global Institute 2012 report, smart workforce tools can lead to a 25 percent increase in the productivity of knowledge workers.

Today, IBM Smarter Workforce supports almost 9,000 organisations worldwide across a variety of industries, including financial services, pharmaceuticals, retail and consumer.

Deep-water port welcomes Panamanian vessel

The Nghi Son deep-water port in the central province of Thanh Hoa has recently welcomed a Panamanian vessel of 45,000 DWT.

It was the second largest ship of its kind ever docked in the port.

The well-equipped port received the vessel named Qi Yuan without resort to transshipment, which helped save cost and time of cargo handling.

Earlier in February, the port hailed Mega Grace ship from the Republic of Korea. The ship weighed over 47,000 DWT and also made no use of transshipment.

The event was expected to help the port popularise its advantages to foreign investors, especially at a time when construction of the Nghi Son oil refinery nears.

Nghi Son port strives to welcome one ship of up to 40,000 DWT and two ships of between 20,000 and 40,000 DWT a month. This will help it achieve the target of handling 2 million tonnes of cargo this year.

Seafood exports down 8 percent in Q1

Seafood export earnings in the first quarter of this year are estimated at US$1.2 billion, a drop of 7.5-8 percent compared to the same period last year.

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), seafood exports in March reached US$447-450 million, down 17-18 percent against March 2012.

Domestic shrimp producers are facing difficulties due to decreasing demand and Japan’s strict technical barrier related to ethoxiquyn levels in the products.

VASEP estimated that shrimp exports fell by 10 percent to US$160 million in March and 7.9-8 percent to US$400 million in the first three months of the year.

The export of tra fish – one of the country’s major hard currency earners – saw a year-on-year decrease of 13 percent to US$140 million in March, driving down total tra fish export earnings in the first quarter to US$393 million, a fall of 7.6 percent from a year ago.

Tuna exports rose to US$145 million in March, up 12 percent compared to last year’s figure but down 16 percent for the first quarter.

Other sea fish exports reached over US$60 million in March, which is 28 percent lower than last year. Octopus saw a sharp decrease of 34 percent and 22 percent in March and the first quarter, respectively.

7-percent inflation predicted for 2013

The National Financial Supervision Committee has forecast that Vietnam’s inflation rate in 2013 will be controlled at less than 7 percent.

The committee cited the high economic growth in the first quarter as a positive sign that should create a foundation for successfully achieving the country’s 2013 economic development goals.

If the domestic market does not see strong fluctuations in the following three quarters, the 5.3 percent GDP growth target will be within reach, it said.

However, the committee warned the national economy is still experiencing numerous difficulties, such as weak production capacity and low consumer demands.

Export revenues, which are considered a key factor in boosting economic growth, are predicted to decline in 2013 due to falling prices for Vietnamese exports on the global market.

In addition, the credit growth in the past quarter was very low.

Over the past ten years, the average inflation rate in the first quarter accounted for 40 percent of the entire year’s figure. Weighing up the advantages and disadvantages of the economy in 2013, committee experts predicted this year’s inflation rate will be kept below 7 percent.

Such a low rate may force deposit interest rates to go down to 7 percent, while the lending rate may drop to 10 percent.

The committee has proposed boosting production and offering more assistance to businesses in order to fulfill the year’s set target of achieving higher economic growth than in 2012.

It stressed the need to continue adjusting bank interest rates, settling bad debts and putting the Vietnam Asset Management Company (VAMC) into operation. Preferential interest rates should also be given to construction and real estate projects.

The committee also suggested considering value added tax (VAT), reducing the corporate income tax to 20 percent to encourage private investment and attract more foreign investment, as well as speeding up the disbursement of investment in State-funded projects.

Manufacturing picks up in March

Vietnam’s manufacturing sector bounced back in March, with its Purchase Managers’ Index (PMI) rising above the neutral 50.0 mark, posting a 23-month high of 50.8.

Although the growth rate was only moderate, it was nonetheless the second-highest in the two-year series history, HSBC says in its Manufacturing PMI report.

March data pointed to modest recoveries in the levels of both manufacturing production and new orders, following contractions in the prior month.

Companies benefited from an improving domestic market, increased promotional activity and a slight expansion in the level of incoming new export orders.

New export business increased for the first time in 11 months during March. Manufacturers linked the latest growth in new export sales to improved demand from clients in China, Japan and Thailand.

Growth of new orders and production filtered through to the labour market, with March seeing employment rise for the fifth time in the past six months.

However, the bank says evidence of spare capacity remained present during the latest survey period, as highlighted by a further decline in backlogs of work. Outstanding business fell for the twelfth straight month, albeit to the least marked extent during the current sequence of decline.

Input cost inflation surged higher during March, amid reports of increased prices on international commodity markets. Vietnamese manufacturers reported the steepest increase in their purchasing costs since last September, with the rate of inflation rising back above the survey average.

Part of the increase in input prices was passed on to clients in the form of higher selling prices. Output charges rose for the second successive month and at the fastest pace since April 2012.

Yet, the rate of increase in selling prices remained well below that of input costs, and several companies attributed this to ongoing subdued market conditions and strong competition.

Vietnamese manufacturers maintained a preference for reduced inventory holdings in March, leading to further depletion of both raw material and finished goods stocks. In contrast, purchasing activity was raised for the second time in the past three months, reflecting increased production.

Trinh Nguyen, an Asia Economists at HSBC, says March’s expansion of manufacturing output is consistent with the bank’s view of a gradual recovery in Vietnam.

“The process is likely to be bumpy, however. What’s most positive moving forward is a rebound of external demand, which should help counterbalance weak internal demand in the coming months,” the economist says.

The HSBC Vietnam Manufacturing PMI is based on data compiled from monthly replies to questionnaires sent to purchasing executives in around 400 manufacturing companies. The panel is stratified geographically and by Standard Industrial Classification (SIC) group, based on industry contribution to Vietnamese GDP.

The PMI™ is a composite index based on five of the individual indexes with the following weights: New Orders – 0.3, Output – 0.25, Employment – 0.2, Suppliers’ Delivery Times – 0.15, Stock of Items Purchased – 0.1.

Can Tho establishes ties with Cambodian province

The Mekong Delta city of Can Tho and Cambodian province of Battambang have signed a memorandum of understanding (MoU) on economic, trade, investment, and tourism cooperation.

The MoU was signed between Prach Chann, Battambang governor, and Nguyen Thanh Son, Chairman of the Can Tho People’s Committee, on March 29.

The two sides will create favourable conditions for their businesses to cooperate in areas like farm produce processing, goods distribution, investment in processing plants for farm and aquaculture produce, animal husbandry, and tourism.

Can Tho has the best infrastructure in the Mekong Delta, comprising an international airport, a deep-water port, and personnel training capabilities. Its businesses have a wealth of experience in processing and exporting farm produce.

Several local businesses are seeking opportunities for cooperation with their Battambang counterparts to purchase and process rice for export.

Located in the north west of Cambodia, nearly 300km from the capital Phnom Penh, Battambang has a population of over 1 million, of whom 81 percent are farmers.

The province harvests 2 million tonnes of rice a year and has innumerable ponds and lakes suitable for aquaculture.

At the signing ceremony, Chann said agricultural produce from Battambang has been exported, mainly in semi-processed form, to several countries for the last couple of years.

The province is thus seeking investment in processing plants from Cambodian and foreign partners and to better develop distribution networks, promote exports, and improve financial, tourism, and training services, he added.

New business numbers fall in first quarter

As many as 15,707 new enterprises with total registered capital of nearly US$3.78 billion were established in the first quarter of 2013, according to the Ministry of Planning and Investment (MoPI).

The registered capital in the first quarter dropped 16.1 percent compared to the same period last year, while the number of newly established enterprises declined by 6.8 percent.

Compared with the fourth quarter of last year, the decline in capital and the number of firms was even higher at 26.7 and 9.4 percent, the ministry noted.

All cities and provinces reported a decline in the number of newly-established firms in the first three months, of which the mountainous provinces of Bac Kan , Hà Giang, Yen Bai and Kon Tum saw the strongest decrease of more than 35 percent. The falling figures in Hanoi and Ho Chi Minh City respectively were 13 and 7.8 percent.

The number of newly-established firms in agro-forestry and fisheries experienced the strongest drop of 34.7 percent. Information and communications also reported a drop of 29.5 percent. New firms in finance, banking, insurance, real estate and construction, which were hot industries last year, also declined between 18 and 20.5 percent.

The ministry also reported that in the first quarter, around 15,200 firms dissolved or ceased operations, up 19.92 percent year-on-year.

Hanoi and HCM City had the highest number of firms which dissolved or ceased operations in the period.

The decline proved that domestic firms were facing continued difficulties in production and business, the ministry noted, adding that a major problem facing local firms was credit access due to unresolved bad debts and reluctant banks.

The State Bank of Vietnam’s Credit Department said that its measures to boost credit had left outstanding loans in the banking system for the first two months of the year at minus 0.16 percent against late 2012.

Footwear re-gains niche in EU market

Footwear – one of Vietnam’s key hard currency earners in the European Union (EU) – looks to benefits it will reap from the General Scheme of Preferences (GSP) offered by the market in 2014-2016.

According to the Ministry of Industry and Trade (MoIT), the European Commission has officially resumed GSP for Vietnamese footwear after ceasing it for five years.

The EU’s decision, which will become effective from January 1, 2014, will allow Vietnamese footwear to re-enjoy duty preferences in the EU market.

Vietnam is now the second largest footwear supplier to the EU market after China .

Among products sold to the EU market, footwear is Vietnam’s second biggest hard currency earner, with US$2.65 billion in 2012.

Last year, the country earned US$7.26 billion from selling footwear abroad, which accounted for 6.3 percent of its total export revenue.

Software giant sets profit target of US$126 million

Vietnam’s software giant FPT Corp (FPT) plans to earn a total revenue of nearly US$1.29 billion year, up 6 percent on 2012.

Meanwhile, its pre-tax profit target is set at US$126 million, a 10-percent increase.

Its telecommunications business is expected to bring the largest share of the profit of US$39 million – or 31 percent of the company’s total profit.

Software production remains a core business with growth of 23 percent over last year, bringing US$29 million. Nearly 80 percent will come from software exports, estimated to amount to US$22.9 million.

FPT expects to expand its retail business with plans to open 50-60 new stores this year.

However, this expansion investment is projected to generate losses of around US$1.8 million for the company.

It also plans to pay 2013 cash dividends of 20 percent.


By vivian