Raw material shortage in furniture export sector
Wood furniture is fast becoming a key export product from Vietnam, showing signs of strong growth with monthly export revenues hitting an average of $500 million in the first three months of the year.
This year there is possibility that export revenues can reach US$5.5 billion, an increase of nearly $41 billion compared to 2012.
However, according to the Ministry of Agriculture and Rural Development, the country has not taken the initiative to produce its own raw material but has to import from other countries; hence growth in this sector cannot remain stable.
The country is striving to reduce import of raw wood. In 2012, around 66 percent of raw wood was imported, but in the first few months of 2013 this decreased by 30 percent as compared to the same period last year.
Ha Cong Tuan, deputy minister of Agriculture and Rural Development, said around 400,000 cubic meters of wood per year had been used up in the last 10 years ago, but in 2012 this went down to 15 million cubic meters.
Calculations show that the wood furniture export sector needs around 22 million cubic meters of wood for manufacturing by 2020. With more than 2.5 million hectares in the country, there is supply of around 16 million cubic meters till 2020, not including outside sources. The government now plans to seal off natural forests for a time by 2014.
On the flip side, most of the forests planted are in the North and the central regions, where most of the wood manufacturing factories to export wood furniture have been mushrooming without future planning.
These factories are facing severe shortage of material now, and as a result are resorting to using immature trees for making furniture. This has led to low quality products and customers are taking advantage of this situation to offer lower prices.
A ton of wood chips cost VND500,000, while a ton of wood planks are four times higher. As a result, Vietnamese furniture products are unable to compete in the market.
Another paradox is that the Vietnam Paper Corporation exported more than 606,000 tons of wood chips at $125 per ton instead of using 65,000 tons of paper pulp, and then imported paper pulp at $1,000 a ton.
PetroVietnam increases investment in Russia
The Vietnam National Oil and Gas Group (PetroVietnam) increased its investment in a project at the Rusvietpetro joint venture company in Russia to US$1.4 billion in the first quarter of 2013.
According to the Overseas Investment Department under the Ministry of Planning and Investment, by March 20, Vietnamese businesses had 742 overseas investment projects with a total registered capital of US$15.5 billion.
Laos topped the list of Vietnamese investors’ destinations with 227 projects totaling over US$4.2 billion, accounting for 30.6 percent in the number of projects and 27.1 percent in capital. It was followed by Cambodia, Russia and Venezuela.
Thua Thien – Hue lures investment to IZs
The central province of Thua Thien – Hue has taken a number of measures to attract more investment to its industrial zones (IZs).
Apart from speeding up site clearance, the province is accelerating administrative reforms, improving legal framework, and offering preferential policies. It is also helping investors build factories, and mobilize capital resources for infrastructure construction in industrial zones.
Thua Thien-Hue focuses on human resource development, particularly vocational training for spearhead industries, as the demand for trained labourers is increasing. Its industrial zones need 15,000 trained labourers each year, and the figure is expected to increase in the coming time.
The province has attracted 66 foreign investment projects with a total registered capitalization of nearly US$2,000, covering a wide variety of fields such as garment and textiles, tourism, food and beverage processing.
In the first quarter of the year, FDI businesses earned US$110 million in revenue, up 48 percent over same period last year and contributed over US$11 million to the State budget.
Hanoi welcomes 5.12 million visitors in Q1
The capital city of Hanoi received 5.12 million tourists, including 615,000 foreigners, in the first quarter of 2013, representing a year-on-year increase of 17 percent.
According to the municipal Department of Culture, Sports and Tourism, in the second quarter, Hanoi’s tourism sector will increase the promotion of its image and improve the quality of tourism products, especially tours of traditional craft villages.
It will also create new products linking tourist sites and heritages.
In response to the National Tourism Year of Red River Delta-HaiPhong 2013, the sector will coordinate with the Vietnam National Administration of Tourism (VNAT) and the Vietnam Tourism Association in organising the Vietnam International Travel Mart (VITM Hanoi 2013) this month and a festival of trade villages in the Red River Delta in October this year.
Last year, Hanoi greeted 14.4 million visitors, including 2.1 million foreigners and 12.3 domestic tourists.
Phu Yen to invest in strong sectors
Prime Minister Nguyen Tan Dung yesterday urged leaders of central Phu Yen Province to improve its investment environment as a way to make a breakthrough in its development process.
The province should create favourable conditions for investment in the sectors which are deemed to be the driving forces for socio-economic development, he said.
The province’s strengths lay in agriculture, aquaculture and seafood processing and tourism, according to the Prime Minister.
Dung requested the provincial leaders to find solutions to help businesses and producers overcome difficulties in the current economic downturn, while paying much more attention to health care, education, job creation and poverty reduction.
The authorities should also diversify models of investment to speed up the implementation of key infrastructure projects in the province and ensure the capital is used effectively.
Chairman of the provincial People’s Committee Pham Dinh Cu affirmed that this year, Phu Yen would make its best efforts to reach a GDP growth rate of 12.5 per cent, create 23,500 jobs, and build 400km of rural road.
Last year, the province’s GDP growth rate was at 10.5 per cent, and more than 22,500 people got employment. Industrial production value in the first quarter of the year increased by 12.2 per cent compared to the same period last year.
Earlier the same day, Dung inspected the combat training at Air Force Regiment 910 and worked with the Air Defence-Air Force.
The PM affirmed the importance of national defence and asked the Air Defence-Air Force to always heighten vigilance and preparedness as it continues to build a strong air force to fulfil all assigned tasks.
At a meeting with its officers and soldiers, Dung praised the regiment’s achievements, as well as its contributions to the country over the past years, noting that the defence building task is still extremely important for a peaceful country.
The regiment has to give lessons on patriotism, morality and dignity to pilots and officers in the new revolutionary period so that they become a unified unit, which is absolutely faithful to the Party, State and people, and deserving of the heroic regiment’s glorious tradition, he added.
He asked the regiment to actively renovate its training methods, especially for pilots.
Over the past 54 years, Regiment 910 has always fulfilled its assigned duties, including the training of thousands of Vietnamese pilots, thus improving the fighting capacity of the country’s Air Force. It has also actively participated in search and rescue activities.
Peugeot announces its return to Vietnam
French automaker Peugeot announced Monday that it was returning to Vietnam with the creation of a distribution network and local production of its 408 model along with a Vietnamese partner, Thaco.
French automaker Peugeot announced that it was returning to Vietnam with the creation of a distribution network and local production of its 408 model along with a Vietnamese partner, Thaco.
A Peugeot statement said that it would set up six dealerships in Vietnam, a former French colony, three in the northern region around Hanoi and three in the southern region of Ho Chi Minh City, and added that the network could eventually comprise 15 sites in all.
Peugeot was present in Vietnam through the 1980s before withdrawing from the country.
The 408 that is slated to be built there is a saloon (sedan) model which is already sold in China and Latin America, and Peugeot expects to locally produce around 80 percent of all the vehicles it sells in Vietnam, owing in large part to high customs duties, a spokesman said.
According to the French group, 80,000 new cars were sold in Vietnam last year, and the market is estimated to grow to 300,000 by 2020, with Peugeot hoping to account for five percent of the total.
Strategic partnership bolstering Vietnam-France trade
Representatives of Vietnam and France are working to forge a strategic partnership which will help promote and expand bilateral trade.
The last days of March saw Vietnam’s Minister of Foreign Affairs Pham Binh Minh and his French counterpart Laurent Fabius agreed in Paris to make preparations for lifting the two countries’ relations to strategic partnership in 2013.
The agreement was underscored in a landmark joint announcement, which stated that: “Forty years after the two countries forged diplomatic ties and twenty years after French President François Mitterrand’s historical visit to Vietnam to open a new chapter in the two countries’ relations, and based on the importance of the two countries’ common historical relations, with confidence in the two economies’ ever-bigger development and with a desire for strengthened cooperation for the sake of peace, international security and a shared future, the two sides have agreed that it is time for them to work more closely to raise their bilateral relations to strategic partnership in the French Year in Vietnam [in 2013].”
One of the major focuses of the strategic partnership is to “strengthen bilateral economic-trade ties” in order to “facilitate investment and business activities of the two countries’ enterprises. This target will be implemented based on industrial and technological cooperation in sectors that are strategic to Vietnam’s development.”
Marie-Cécile Tardieu-Smith, economic counselor and head of the French Embassy to Vietnam’s Economic Section, also said such partnership would help “the two countries’ trade ties develop stronger, especially in such sectors that France has advantages and needed by Vietnam as health care, traffic, education and training, infrastructure, sustainable development and energy.”
According to the embassy, the establishment of the bilateral strategic partnership will create greater confidence in trade and investment ties and further facilitate bilateral trade via preferential tariff schemes.
Vietnam’s Vietnamese Ministry of Industry and Trade’s Department for European Market reported that Vietnam’s export-import turnover with France grew strongly from $1.67 billion in 2009 to $3.75 billion by late last year.
France’s exports to Vietnam rose from $356 million in 2002 to almost $1.6 billion last year, while France’s imports from Vietnam grew from $925 million in 2002 to $2.16 billion last year.
Vietnamese staples exported to France are mainly consumer goods such as shoes, clothes, furniture, jewelry, home appliances and electronic spare parts. Last year, Vietnam earned about $1.23 billion from exporting electronic equipment and mobile phones to France, up 19 per cent on-year. The next products with big export turnover from France included footwear ($635.2 million, up 7.9 per cent) and home appliances ($173.2 million, up 14.6 per cent).
Meanwhile, last year, France’s main exports to Vietnam included pharmaceuticals ($186.16 million, up 7.4 per cent), agro-products ($167.3 million, 27.1 per cent), chemicals, perfumes and cosmetics ($92.3 million, up 2.1 per cent), industrial and agricultural machinery and various machines ($72.54 million, up 24.8 per cent), and computer, electronic and optical products ($65.1 million, 43.7 per cent)
France is now the second largest European investor in Vietnam and the leading EU provider of official development assistance (ODA) for the country, which has amounted to 1.2 billion EUR so far, not to mention other aids and financial loans worth 840 million EUR, including those provided by the French Ministry of Economy and Finance.
French firms prioritise skilled employees
Many French firms have developed their own tactics for using Vietnamese employees to build business in Vietnam.
One example is giant retailer Big C. Human Resource Section’s director Serge Cao said BigC had just opened its 22nd supermarket in Vietnam, in southern Binh Duong province, where it simultaneously opened its 21st commercial centre.
“We will open more supermarkets and commercial centres in Vietnam. This means we will continue recruiting many more local employees,” Cao said.
At present, BigC stably has over 8,000 employees in Vietnam, including 230 managers with 40 foreign ones.
“Besides allowance and pay raise possibilities, those able to speak foreign languages will be promoted quicker. When we receive their application forms, we ask them whether they can speak foreign languages like French, English or Chinese well,” Cao said. “If they can, they are immediately accepted to work for BigC.
“After that, those who show a passion for the work and some other skills, will be trained for months to become managers,” he said.
Antoine Lhuguenot, general manager at French-backed Sofitel Plaza Hanoi Hotel, said French-invested hotel developer Accor group, which managed this hotel, would open two high-end hotels in Vietnam by late this year, raising Accor’s number of total high-end hotels in the country to 16.
“We have high demand for local employees,” he said. “Our employees are trained professionally after they are recruited. Those having passion in work and good command of foreign languages will get chances of promotion transparently.
“Our training courses are organised both locally and abroad, with updated lessons both theoretically and practically. We have also provided 12 scholarships to Vietnamese staff to study abroad. Attractive vacations and festivals are also annually organised for all staff,” he said.
Sofitel Plaza currently has 3,200 employees in Vietnam, with 1,500 in Hanoi and 450 in Sofitel Plaza Hanoi.
Diederick Douellou, head of Hanoi office of French Chamber of Commerce and Industry in Vietnam, said many French firms in Vietnam considered employees the key for their success in the country, but local employees should improve their capabilities if they wanted to work for a foreign firm for a long term.
“I am sure that those who can speak foreign languages and have good skills in communications and computing will get promoted and well-paid quicker than those who don’t. Our chamber has 277 operational member companies offering promotion opportunities for all qualified staff transparently,” Douellou said.
He said almost French firms had a good strategy in using staff in the most suitable manner. “The absence of such a strategy means the firm will have no loyal employees and have to pay much for recruiting workers, while workers often seek employers giving them good benefits.”
Do Khac Quynh, a representative from the Ministry of Labour, Invalids and Social Affairs, reported that Vietnam had two million jobless people last year, of whom 60 per cent were young people.
“The majority of graduates in Vietnam cannot speak a foreign language fluently and have no skill in dealing with practical situation,” he said. “Many have excellent diplomas but they cannot land a job in a local enterprise, let alone a foreign one.”
Railway planning gathers steam
This month the Vietnam Railway Administration (VRA) reported amendments to the Ministry of Transport (MoT) regarding Vietnam’s railway development planning to 2020, with vision toward 2030 (2009 planning).
Accordingly, under a proposal from the consultancy unit responsible for amending 2009 planning, in respect to the north-south railway network from now to 2020 in parallel to modernising the existing system, Vietnam will weigh up building a trial electrified 1,435mm Ngoc Hoi-Phu Ly gauge dual track line with velocity ranging from 160 to 200 kilometres per hour.
The total expense for overhauling existing 1,726km north-south railway is estimated at VND39.873 trillion ($1.9 billion). Of this, the capital demand to 2020 is set at VND18.611 trillion ($886 million).
The consultants put the capital expenditure for the 50km hi-speed Ngoc Hoi-Phu Ly session at VND36.750 trillion ($1.75 billion).
In March 2013, MoT chief Dinh La Thang said from now to 2020 the VRA needed to focus on bettering the existing railway system and mull building several new 1,435mm gauge dual track lines along the north-south railway.
Under the amended planning the railway sector would require around VND365.242 trillion ($17.4 billion) to 2020 for upgrading six existing lines, putting into place three new arterial routes, including some lines heading seaports and economic zones and building eight urban track lines.
Relative to building hi-speed 1,435m gauge railway in the period from 2020 to 2030, the consultants only suggested building two new lines, the 234km section from Phu Ly to Vinh city and the 366km section from Ho Chi Minh City to Nha Trang city at a total cost of VND406.413 trillion ($19.3 billion).
Former Vietnam Railway Union director Doan Van Xe said railway transport had strong container transport advantages and would help alleviate road chaos.
“Building railway for container transport is to protect the road system. Besides, railway planning should be unveiled to reserve land for railway projects, to avoid driving up project costs,” Xe noted.
In respect to implementation of 2009 railway sector planning, the MoT said most of the targets and programmes set in the planning were not reached due to multiple reasons.
For instance, all projects on upgrading and overhauling existing railway network were from one to three years, and rarely five years, later than schedule due to capital scarcity.
As for building new rail lines, many important projects remain in paper only, including the Bien Hoa-Vung Tau line and the lines under the two corridor-one economic belt programme.
That was why at present railway transport just accounts for 4.1 per cent of passenger transport and 1.8 per cent of a freight transport market share.
“The railway sector could hardly achieve the target of making up 13 per cent of passenger transport and 14 per cent of freight transport market share by 2020 if it insisted on using current infrastructure background,” said Vietnam Railway Corporation former deputy general director Vuong Dinh Khanh.
Seafood exports likely to rise 5 percent
Seafood export is expected to reach 6.5 billion USD this year, a rise of 5 percent from 2012.
The forecast was made by Deputy President of the Vietnam Association of Seafood Exporters and Producers (VASEF) Nguyen Huu Dung.
Shrimp export is expected to value at 2.2 billion USD, equal to that of last year, while tra fish export is predicted to bring in 1.9 billion USD, up 5.5 percent.
The export of other seafood products is expected to rise by 10 percent to 2.4 billion USD.
Dung said that the export of fish and seafood to major markets is expected to recover in the second quarter of this year after a drop of 8 percent in turnover in the first quarter.
Exports to the European market are expected to total 1.2 billion USD, up 5.3 percent over last year. Meanwhile, exports to the US are estimated to exceed 1.3 billion USD, up 9 percent.
The testing on shrimp for the preservative ethoxyquin before they are imported to Japan is also expected to be removed. Meanwhile, demands for fish and seafood products from China, the Republic of Korea and ASEAN countries are forecast to increase.
The VASEP official said that this year, aquaculture will face a lack of capital, rising input costs and challenges related to technical barriers and food hygiene and safety standards.
“Shrimp production would continue to suffer until the emerging early mortality syndrome ( EMS ) is brought under control,” he said, adding that although seafood output levels are stable, quality has not yet seen much improvement.
The prices of imported raw materials are expected to increase by 20 percent from last year.
Fish and seafood export turnover last year was reported at 6.12 billion USD, only equal to 94.2 percent of the goal and that of 2011.
State Bank may double charter capital
The State Bank of Vietnam is likely to double its charter capital to 10 trillion VND (476.2 million VND) from August 15 this year in a bid to better stabilise the country’s monetary market, according to a draft circular.
It the increase goes ahead, the Fund for National Monetary Policies will also be doubled as the draft states that the fund must be equal to the SBV’s charter capital.
The SBV will be allowed to use the fund to stabilise the country’s monetary market. Besides addressing the threat posed by credit institutions that fail and damage the banking system, the SBV can also use the fund to contribute capital to or buy stocks of credit institutions that are put under SBV’s special control due to weak finances.
Deposit Insurance of Vietnam will also be allowed to borrow from the fund to maintain the stability of credit institutions in case other funds are not available for payment.
With the charter capital’s increase, the SBV will likely have to set aside double provisions for the Fund for National Monetary Policies to 20 percent of annual difference between the central bank’s revenues and expenses.
According to the draft, SBV will still maintain 10 percent of its annual revenue expense difference for the financial provision fund, but it will not be allowed to exceed 25 percent of the central bank’s charter capital.
The SBV will report the fund’s revenues and expenses to the Ministry of Finance every quarter.
Outward investment totals 2.65 bn USD in Q1
Global investment by Vietnamese businesses reached 2.65 billion USD in the first quarter this year, according to the Foreign Investment Agency ( FIA ) under the Ministry of Planning and Investment.
In the reviewed period, 22 new overseas investment projects worth 720.7 million USD were granted licenses, while five projects got additional investment of 1.9 billion USD.
Rusvietpetro joint venture of PetroVietnam in Russia added 1.4 billion USD to its capital and the Vietnam National Chemical Group poured 518.9 million USD in a rock salt mine in Laos .
Vietnamese investors mainly engaged in mine ores, accounting for 72.3 percent of the total registered capital, followed by hotels and food service (12.6 percent) and information and telecommunication (8.9 percent).
In the first quarter, 12 foreign countries and territories absorbed Vietnamese outward investment of which Russia received 1.4 billion USD, representing 52.7 percent; Laos, 20.1 percent and Myanmar, 11.3 percent.
The FIA reported that as of March 20, there were 742 outward investment projects with total registered capital of 15.5 billion USD in 59 foreign countries and territories.
Laos took the lead with 227 projects worth over 4.2 billion USD; followed by Cambodia with 129 projects with 2.7 billion USD, Russia and Venezuela .
Statistics showed that 2.9 billion USD went into petroleum sector; 500 million USD into rubber planting; 400 million USD in hydro-electricity and 249 million USD in telecom.
Construction on Da Nang Hi-Tech Park starts
A ground-breaking ceremony to mark the start of construction on the Da Nang Hi-Tech Park was held in Hoa Lien commune, Hoa Vang district, the central city of Da Nang on April 6.
The park, which covers over 341 hectares and will cost 278 million USD, will follow the Silicon Valley model in the US and the Hsinchu Science Park in Taiwan (China). It aims to attract domestic and international scientists, engineers and businesses in the IT field, and to promote hi-tech training and education in local universities.
The park hopes to draw some 100 businesses in the next ten years.
The city is the first place in Vietnam where investment from a foreign private group will be used to construct an IT zone’s infrastructure.-
French group helps train hi-tech engineers in Vietnam
A cooperation agreement in hi-tech engineer training was signed in Ho Chi Minh City on April 8 by France’s Dasault Systèmes Group, the French Education Ministry and the University of Science and Technology of Hanoi (USTH).
Under the agreement, Dasault Systèmes, a world leader in three-dimensional (3D) design and product lifecycle management (PLM), will establish a PLM competency centre in USTH to help its students experience lessons using 3D technology.
It will introduce PLM, 3D software and applications to Vietnamese teachers and students, and provide staff with advanced teaching methods using technology.
Phillippe Forestier, the group’s Executive Vice President of Global Affairs and Communities, pledged to help USTH create a high-tech learning environment.
Next week, it will recruit French professors to travel to Vietnam and lecture at the university in the 2013-2014 academic year, he added.
Jewellers ask Gov’t to help boost gold exports
Gold jewelry makers have asked the Government to help the local market increase its exports by adjusting current policies on gold.
According to the Viet Nam Gold Traders Association, other countries are more competitive than Viet Nam because the production of gold jewelry here is small-scale.
With the Government’s tigher control over the imports of raw gold, local gold jewelry producers have found it more difficult to make jewelry because raw materials are limited.
Nguyen Thi Cuc, deputy director of Phu Nhuan Jewelry Company, suggested that the Government ease import-export procedures or procedures for temporary import of raw material gold for re-export of semi-finished products and jewelry.
“Since 2011, the Ministry of Finance has applied a 10-per-cent export tax to jewelry that has 80 per cent to under 99.9 per cent gold content. That made exports of Vietnamese gold jewelry come to a standstill,” the association said in a statement.
Delegates also raised concerns about the quality of gold jewelry.
Nguyen Van Dung, chairman of the HCM City Association of Fine Arts, Gold Jewelry and Gemstone, said: “Low-quality gold jewelry is increasing in the domestic market, badly affecting the prestige of the domestic gold jewelry industry.”
Other countries were applying strict controls over the quality of gold jewelry, especially imported products, the association said in a statement.
As of today, the country does not have any appropriate appraisal agency to manage the quality of gold jewelry in the market. As a result, more low-quality gold jewelry is flooding the market.
Conference attendees said the Government should eliminate the export tax imposed on jewelry. This would help domestic gold traders and jewellers become more competitive on the international market.
To help producers have sufficient raw gold, the State Bank of Viet Nam should grant import quotas to eligible gold jewelry producers each quarter or year instead of deciding the amount case-by-case, as is done now, they suggested.
The Government should set up a quality standard system for gold jewelry, and jewelry producers must disclose the quality and quantity of their products.
Convention delegates also asked local producers to focus more on improving their product design to add more value.
Prudential VN maintains high growth
Despite a challenging macro-economic environment in 2012, Prudential Vietnam was able to maintain its growth momentum with record new business premiums of over VND1.47 trillion (US$70 million).
Total premium income grew 9 per cent to a record VND6.59 trillion ($313.9 million), accounting for approximately 36 per cent of the total premium income of the country’s entire life insurance industry.
As a result, Prudential has remained the insurance leader in Viet Nam with the largest market share in both new and total premium income.
Kaspersky claims better IT security solutions
Kaspersky Lab and its Viet Nam distributor, Nam Truong Son Group, have unveiled a new generation of business security solutions.
These solutions were designed to help Vietnamese companies overcome the latest challenges in managing a secure, efficient network.
Kaspersky Endpoint Security for Business is built to simplify IT security management and ensure advanced protection for businesses of all sizes.
The new suite offers mobile security and device management, data encryption and provides endpoint control tools and systems management and other features.
Electric tuk-tuk makes inroads into Viet Nam
Terra Motors Corporation, a Japanese electric-motorcycle manufacturer, plans to offer a three-wheel electric vehicle, or e-tuk-tuk, in Viet Nam within the year.
Powered by a lithium battery, the e-tuk-tuk can carry up to six people and operate at a speed of 50km per hour.
The vehicle, 3.3 metres long and 1.47 metres wide, can run 50km on one full charge. The vehicles will be imported from the Philippines.
Despite a narrow road system in Viet Nam, the company sees potential for this concept in the country over the long term.
Shingo Hayashi, general director of Terra Motors Viet Nam, told Vietnam News that the vehicle was best suited for special-use areas, including sight-seeing spots, golf courses, universities and industrial parks.
Hayashi said in the future the market for the vehicle could increase after the metro system begins to operate in HCM City, when traffic congestion on the roads is expected to ease.
Currently, the use of such vehicles in all areas of HCM City would exacerbate road traffic conditions, he said.
Using the battery-powered vehicles can reduce air pollution and gasolione consumption.
The Japanese company aims to become the world’s number-one seller of electric tuk-tuks over the next two years.
The corporation also plans to enter the Indonesian market in early 2014. It views Cambodia as a potential market as well.
Firms celebrate diplomatic ties
Ninety-one French small- and medium-sized enterprises took part in the second Viet Nam – France Business Forum, which opened yesterday in HCM City as the first event to celebrate the 40th anniversary of diplomatic ties between Viet Nam and France.
“Viet Nam is one of the 47 countries that France would like to increase relations with, and I hope that the two countries will sign a strategic co-operation agreement soon,” said the French Minister of Trade, Nicole Bricq, during the opening ceremony of the forum in HCM City.
French enterprises have strengths in water treatment, cosmetics, telecommunications, software and food processing. They plan to work with 500 local companies, and 20 French experts will provide consultancies on doing business in Viet Nam.
Despite the global economic downturn, French trade with Viet Nam last year increased 22 per cent year-on-year, reaching US$4 billion.
“France is second in total investment in Viet Nam and third in ODA from European countries,” said Vu Ten Loc, chairman of the Viet Nam Chamber of Commerce and Industry.
Loc suggested that France supported Viet Nam in finance, banking, pharmacy, fashion, and high-tech agriculture. Although only 6 per cent of France’s population are farmers, food exports total $6.6 billion.
At the forum, Truong Hai Auto signed a co-operation contract with Peugeot to assemble and distribute the French-made cars in Viet Nam.
In addition, Dassault Systemes signed a partnership to bring its 3D software to students at the University of Science and Technology of Ha Noi (USTH).
The forum was organised by the French Agency for Export Promotion (UBIFRANCE), and the French National Public Establishment of Industrial and Commercial Nature (OSEO) supporting innovation and growth for SMEs and CCI International.
By the end of 2012, France was the 16th investor in Viet Nam with total investment of $3.1 billion focusing on telecommunications, water, electricity, gas manufacturing and distribution, and hotels, restaurants and construction.
There are around 300 French enterprises working in Viet Nam.
Viet Nam exports textiles and garments, footwear, rubber and plastic products to France.
To mark the 40th anniversary of bilateral diplomatic ties, the French Year in Viet Nam will be held from April to the middle of 2013 and the Vietnamese Year in France in 2014.
The French Year in Viet Nam will feature about 100 events, including those on culture, arts, architecture, fashion, economics, and science and education exchanges.
Activities are aimed at introducing today’s France to the Vietnamese people.
The Central Highlands city of Da Lat will organise an event to mark its 120th anniversary, including a ceremony to commemorate French-Swiss doctor Alexandre Yersin who established the city.
APEC discusses transport solutions
An APEC (Asia-Pacific Economic Co-operation) working group meeting, now underway in HCM City, seeks ways to improve transport and logistics within the region.
Chaired by Viet Nam’s Ministry of Transport, the 37th APEC Transportation Working Group Meeting opened yesterday and will end on Friday.
Attending the meeting are 16 APEC members and representatives from the APEC Business Advisory Council, Committee on Trade and Investment, Environmental Working Group, Counter-Terrorism Task Force, APEC Policy Partnership on Women and the Economy.
The participants will discuss issues related to aviation, maritime traffic, road traffic, transport security, energy and others.
The Asian-Pacific region is the most rapidly developing area in the world. In upcoming years, experts predict a significant growth of the regional countries’ cargo turnover.
With promising growth of exports, logistics infrastructure must be expanded, and new transportation routes built.
The efficient and safe transportation of goods and people is still key to APEC’s goal of free and open trade in the Asia-Pacific region.
During previous meetings, APEC economies targeted sustainable and efficient supply chain systems that enhance cross-border business linkages in the Asia-Pacific region and improve connectivity.
This would support trade volume growth through diversification of routes that make the movement of people and goods easier, safer and faster.
The goal of APEC economies is to achieve a 10 per cent increase in regional supply-chain performance by 2015.
First Pullman resort debuts in Viet Nam
Accor, the leading hotel operator in Asia Pacific and Viet Nam, announced the rebranding of Lifestyle Resort Da Nang to Pullman Da Nang Beach Resort on Saturday.
The 187-room resort, positioned on a stretch of pristine beach of My Khe, just 10 minutes from Da Nang International Airport, is the first Pullman resort in Viet Nam, and the second Pullman-brand property in Viet Nam.
Year bodes well for property market
Continued monetary easing by the State Bank of Viet Nam, including the recent cut in interest rates, gave the real estate market reason for cheer during the first quarter.
The cut, according to CBRE Vietnam managing director Marc Townsend, increases the chances of mortgage lending to expand and gives cause for investors to move away from bank deposits and into other asset classes.
Stocks were one asset class that improved notably in the first quarter, with the HCM Stock Exchange ending the quarter up 12.5 per cent year-on-year.
“Lowering interest rates and an improving stock market gives the real estate market hope, especially residential developers who have faced the brunt of the negative sentiment which has prevailed within the market,” Townsend said at a press briefing about the market in the first quarter on Wednesday.
“In past cycles we have noted how profit taking from the stock market and the availability of financing are key to driving residential sales. Whilst sentiment does remain icy, there is light at the end of the tunnel.”
Though economic growth slowed in the first quarter, falling to below 5 per cent year-on-year, inflation remained low and stable at 6.6 per cent year-on-year.
The first quarter was busy for the HCM City office market with a number of significant transactions as tenants took advantage of what is seen as a market bottom. Rents remained flat or went up moderately for both grades A and B.
Grade A rental rates stood at US$31.36 per square metre at the end of the first quarter, a 1-per-cent quarter-on-quarter increase.
The vacancy rate continued its downward trend, closing the quarter at 13.1 per cent.
Grade B rents also increased in the quarter, by 3.5 per cent, ending at $18.11. The increasing rental was particularly notable given the new supply of 37,449 square metres that came into the market and caused the vacancy rate to increase modestly.
Dung Duong, senior manager of research and consulting at CBRE, said: “As predicted in the previous quarter, office rentals have temporarily reached a bottom. We expect no new Grade A or B supply until at least the first quarter of 2014, thus there is little reason to suggest any softening in rents and reason to believe some landlords’ positions may strengthen.”
The recalibration in rentals that has occurred has made the country’s office market comparable with others in the region, thus providing multinationals with a genuine cost incentive to enter the market, consolidate, or even expand.
During the first quarter, there were a notable number of deals in the 1,000-6,000sq.m bracket, marking a notable change from the historical trend where the majority of deals were less than 1,000 square metres.
The first quarter saw more new projects launched than in both the previous quarter and in the corresponding quarter of last year.
Notably, two of the four projects launched were in the high-end segment, according to Dung Duong, while the other two were in the affordable segment.
The projects launched in the first quarter were Happy Valley in Phu My Hung (163 units), The Prince Residence in Phu Nhuan District (277 units), Nhat Lan 3 in Binh Tan District (240 units), and Metro Apartment in District 2 (104 units).
Competitive pricing was the key selling point for developers, with the projects launched costing 10 per cent down from 12 months ago.
Commenting on the trend, Townsend said: “The transactions that have occurred in the market are reflective of the existing demand for products with the right pricing and in the right location.
“I have long been a believer that the market it not ‘over supplied,’ [only] there has simply been a lot of badly positioned projects.”
The majority of transactions in the quarter took place at newly launched projects. Phu My Hung’s Happy Valley, for instance, sold the majority of units it brought to the market.
Prices in the luxury and high-end sectors saw a 2.2-per-cent and 1-per-cent decrease respectively from the previous quarter, whilst the affordable and mid-end segments saw pricing remain flat.
“Buyers are only interested in projects which can absolutely justify their selling price through the quality of construction, delivery, their location, and the reputation of the developer.
“We expect to see no change in these characteristics as the market moves forward.”
Four firms found to be polluting Ha Long Bay
Four jellyfish-processing enterprises in northern Quang Ninh Province have been found releasing waste water into Ha Long Bay, local police announced.
According to the police, the violators have been using around 1,000 square meters of the bay’s entire surface area and have been discharging tonnes of waste into the World Heritage Site every day.
The violation has lasted for over one month and caused serious pollution to the sea.
The enterprises will be treated in line with current regulations.
Garment exports reach US$3.79 billion in Q1
Garment exports in the first quarter of this year hit US$3.79 billion to maintain its leading position, said Le Tien Truong, Deputy Director General of Vietnam National Textile and Garment Group (Vinatex).
The country’s major export markets include the US, Japan and the Republic of Korea (RoK) with exports to the RoK enjoying impressive growth of 25 percent, almost twice as much as to the EU.
Truong said many domestic businesses have invested in equipment and workforce to catch up with the shift of Japanese importers to other countries. By far, they all have received adequate orders for production up until the end of the first or second quarters of the year.
The garment sector is seeking to approach new markets like Russia, Eastern Europe and the Middle East, he added.
This is high hope for a boom in factory orders when the Trans-Pacific Partnership (TPP), ASEAN and Vietnam-China free trade agreements and the Vietnam-EU bilateral trade agreement bring duties for Vietnamese garment exports to these markets down to 0 percent.
Vietnamese honey allowed in EU market
The European Union (EU) has lifted the ban on the import of fresh bee honey from Vietnam, according to the European Market Department under the Ministry of Industry and Trade.
The department said the EU has recently approved plans submitted by third countries on residue control measures on fresh animal products, including that of Vietnam.
With this decision, the EU also accepts entry of bovine from Japan, poultry, aquaculture and eggs from Moldova and poultry, milk, eggs and honey from Bosnia and Herzegovina.
Italian company to invest in Vietnam
Italy’s multinational catering and retail company, Autogrill will run 82 cafés at Vietnamese airports.
Autogrill managing director, Gianmario Tondato Da Rous, announced on April 9 that the company will set up a joint venture with Vietnam’s beverage and food company.
The company is expected to earn around US$20 million a year.
Mekong Delta’s competitiveness index improves
The Mekong Delta has seen a sharp jump in the Provincial Competitiveness Index (PCI), an indicator of economic governance and business environment performance, over the last three years.
The assessment was announced at a seminar held in the Mekong Delta province of Bac Lieu on April 9 by the Vietnam Chamber of Commerce and Industry (VCCI).
Experts and local authorities analysed the index and put forth measures to improve the business environment for better foreign investment while accelerating administrative reforms.
VCCI Vice Chairman Hoang Van Dung stressed the role of the Mekong Delta in the country’s economic strategy. He hailed the Government and local leaders’ efforts to change the region’s investment and business environment.
Mekong Delta provinces have topped the PCI list since the index was set up in 2006.
In the 2012 PCI, the Mekong Delta ranked first nationwide. Dong Thap, An Giang and Tra Vinh provinces took the lead while six other regional provinces were among the top 10.
Downtown apartments not allowed to be split
Apartments at existing projects in the downtown area will not be allowed to be divided into smaller ones or change their use purposes, according to a proposal of the HCMC Department of Construction.
In areas outside the downtown quarter, the department will only consider changes to projects which have had technical infrastructure completed or have not been kicked off, according to the proposal that has been submitted to the city government.
Commercial housing projects when changed into low-cost ones will be priced at a maximum of VND12 million per square meter, inclusive of VAT. Besides, the selling prices or rental will be set based on auditing principles.
According to the department, the State will not use its budget to buy commercial housing projects to provide low-cost apartments. Project investors will have to sell apartments directly to buyers upon approval from the councils for renting and buying low-cost houses of the city or districts.
There will be 20 low-cost housing projects joining the market from now until 2015 with around 21,000 apartments.
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR