Thu. Feb 22nd, 2024

Seafood industry faces slow export growth

Vietnamese seafood producers are facing slow export growth and a shortage in material, after the US Department of Commerce levied higher tariffs on export of frozen pangasius fish fillets, effective from August 1, 2010 to July 31, 2011.

Figures by the Vietnam Association of Seafood Exporters and Processors show that export turnover of the country’s seafood industry merely touched US$6.2 billion last year, compared to a target of $6.8 billion. With a growth rate of nearly 1 percent, last year was considered the worst year for the local seafood industry in recent years, as breeding, producing, and exports, all faced difficulties.

Breeders struggled with fluctuating prices and diseases since the beginning of the year, causing a decline in shrimp crops. Meanwhile, firms faced a financial crunch, shortage of material, and were forced to operate perfunctorily or even run the risk of bankruptcy.

Last year, demand from the EU market, the major market of Vietnam’s seafood industry, sharply fell due to the region’s sovereign-debt crisis, so the US market officially became the biggest seafood importer of Vietnam with import value of more than $1 billion, up 6.7 percent year-on-year, accounting for 20 percent of the total seafood export turnover of Vietnam.

Meanwhile, seafood export value to the EU market dropped 14.6 percent and merely accounted for 18.7 percent of the total seafood export turnover of Vietnam. Of which, four biggest importers consisting of Germany, Italy, Holland, and Spain posted a sharp drop of 15-17 percent.

In Asian market, seafood export to Japan showed positive growth with more than 15 percent but Vietnamese firms have gradually lost competitiveness against other countries, such as India, Thailand, and Indonesia.

Business results of seafood companies in 2012 were rather gloomy. Among 21 listed seafood companies, there were 12 companies with revenues declining compared to the same period last year, and 17 companies with post-tax profits dropping.

In general, revenues of seafood companies fell 7.7 percent and post-tax margins plunged 35.7 percent while overheads climbed by 15-35 percent. Especially, epidemic diseases and the cost for ethoxyquin check also made the cost price of shrimps increase significantly. Moreover, breeders and seafood producers were unable to access low-interest loans, which affected production and export activities.

As a result, stocks of seafood companies were no longer given priority by investors. Many stocks fell to below face value, including CMX, TS4, ANV, and FBT, while AVF, VHC, AGD, HVG and AGF were stricken by high anti-dumping tariff on pangasius, by the US Department of Commerce. Equities of seafood companies are therefore expected to decline drastically in the near future.

Province to scrap industrial clusters

The Department of Industry and Trade of the southern coastal province of Ba Ria-Vung Tau has proposed to do away with 12 industrial cluster projects which have not found developers, said Tran Thi Huong, director of the department.

In the zoning plan, Ba Ria-Vung Tau has 29 industrial clusters with a total area of 1,443ha. However, only 17 of them have found developers so far, with five getting off the ground.

The infrastructure construction at these industrial clusters is slow, falling far behind schedule, the department said.

Investors have halted expansion or new projects as the demand of tenants declines. Developers of the industrial clusters have also met with many difficulties in capital and site-clearance compensation.

In addition, the drastic increase of land rents has also forced several investors to give up their projects.

The department, therefore, proposed the 12 clusters be eliminated to avoid impacts on residents at the sites.

Five of the 12 clusters are in Tan Thanh District, five in Chau Duc District; and one each in Ba Ria City and Dat Do District.

Their removal would not affect the province’s industrial investment and development plan, the department said.

To encourage industrial cluster development, experts have requested the province to assist with land rents if the enterprises could create products which were in demand and had the potential to attract other industries.

The total investment capital of the17 industrial clusters that already have found investors was VND565 billion (US$26 million).

Five have already started infrastructure construction at a total cost of VND549 billion ($26.2 million), with Hac Dich 1, Boomin Vina and Ngai Giao having six secondary projects in operation with a combined cost of nearly VND2.6 trillion ($123.8 million), creating jobs for about 4,000 workers.

$8 million animal feed factory opens

Adeco Cooperation yesterday opened its animal feed factory in the Nhi Xuan Industrial Park at the Xuan Thoi Son commune in Hoc Mon District, HCM City.

The VND168.9 billion (US$8 million) facility has a total area of over 15,000 square metres. Its main production lines were imported from the Netherlands.

Other technological equipment was manufactured in Viet Nam under the supervision of Dutch experts.

Fair honours high-quality products

Developing a strong network of distributors and stepping up information dissemination can bring more Vietnamese products to consumers, according to experts speaking at the High-quality Vietnamese Products Fair that opened in the Cuu Long (Mekong) Delta province of An Giang on Tuesday. The fair was the first in a series of similar fairs being held across the country this year.

The fair is hosting 400 booths of 180 businesses in and outside the province, offering a chance for distributors and businesses to discuss partnerships.

It is also putting on an exhibition called “the Common House” where products exported to ASEAN and Chinese markets and locally-made items seeking distributors and consumption markets are displayed.

Banks favour Government bonds

Viet Nam’s government bond market saw robust development last year and experts expect it will continue to grow this year thanks to high demand from commercial banks.

According to Tran Van Dung, chairman and CEO of the Ha Noi Stock Exchange, G-bonds had continued to develop rapidly in the first quarter of this year on both primary and secondary markets.

As of March 15, the northern stock exchange has mobilised nearly VND43 trillion (US$2 billion) worth of G-bonds for the State budget. The transaction value of G-bonds on the secondary market reached VND69.8 trillion ($3.3 billion), about three times higher than the first three months of last year.

“I think demand from commercial banks for G-bonds will remain at a steady high in the near future, which could stem from positive macro-economic signals in the first two months as well as a soft increase in February inflation of just 1.32 per cent,” Dung was quoted as saying by Lao Dong (Labour) newspaper.

He said that bank liquidity was abundant at the moment due to growing deposits, while credit growth was unlikely to rise in the short term. In addition, the number of G- bonds maturing this year was rather large, creating a pool of capital for financial institutions to finance their investments.

“Because deposit interest rates are likely to fall in the near future, G-bonds are drawing interest from commercial banks,” he explained.

According to the report “Asia Bond Monitor” by the Asia Development Bank in March 2013, Viet Nam’s local currency bond market saw the most rapid growth among emerging East Asian nations, growing 42.7 per cent on a year-on-year basis in the last quarter of 2012.

The growth of the country’s bond market was entirely driven by the G-bond market which saw a 54.6 per cent increase year-on-year while its corporate bond market shrank 47.6 per year during the same period.

Of the total $25 billion raised in the forth quarter last year, $24 billion came from G-bonds while corporate bonds were worth just $1 billion.

“New issuance in Viet Nam’s corporate sector remained constrained by a combination of high interest rates and investor concerns about corporate sector credit quality as Vietnamese banks have become more cautious about extending new credit,” the report said.

The rapid growth of the Vietnamese market has been attributed to the fact that it is one of the smallest markets in the region and thus has great potential for future growth and development.

At the same time, Viet Nam’s bond market is drawing higher participation of foreign investors thanks to its improved economic situation.

According to 2012 statistics from the H Noi Stock Exchange, the value of winning bids by foreign investors in the primary market last year accounted for more than 10 per cent of the total market value. On the secondary market, foreign trading also made up over 29 per cent of total transaction value.

Fund sells off stake in mobile retailer

Mekong Capital announced yesterday that its Mekong Enterprise Fund II has completed a partial exit from MobileWorld Investment Corp, the country’s leading mobile phone retail chain, by selling an almost 7 per cent stake to an unnamed financial investor.

The fund’s ownership in Mobile World goes down from 32.5 to 25.8 per cent.

While not revealing the deal value either, Mekong Capital said the sale represented an 11-fold return, including dividends, since its investment in 2007.

MobibleWorld’s subsidiary TheGioiDiDong has 230 stores nationwide and approximately 20 per cent of the mobile-phone market share.

Another subsidiary Dienmay has 12 consumer electronics stores, mostly in the south and HCM City.

Mekong Enterprise Fund II, one of three funds managed by Mekong Capital, made 10 investments of which it has already fully sold two: ICP (consumer products) and Mai Son (retail).

Loans needed to fund infrastructure

The Central Highlands province of Lam Dong has asked the Asian Development Bank to support eight infrastructure development projects that require nearly VND52 trillion (US$2.48 billion) investment.

Worthy of note is the Dau Giay – Lien Khuong Expressway project which requires an investment of VND44 trillion ($2.1 billion).

Meanwhile the programme to build Da Lat into a green and sustainable development city needs an investment of VND4.7 trillion ($221 million).

Others include the Da Lat City’s Beltway; the beltway of Bao Loc City; the bypass in the western section of Bao Loc; and the beltways for the towns of Thanh My (Don Duong District), Lien Nghia (Duc Trong District) and Dinh Van (Lam Ha District).

The provincial authority of Lam Dong said feasibility studies for all these projects had been completed.

Meeting with ADB representatives yesterday, the chairman of Lam Dong Province People’s Committee, Nguyen Xuan Tien, said that ODA (official development assistance) loans from international donors and financial support from ADB were major sources of capital for the projects, along with locally mobilised capital.

Tien said the ADB had not only provided financial support but also helped the province train its staff in management.

Lam Dong has six ODA-funded projects using ADB loans in agriculture, forestry, biology, education and training, health and water supply, with total investments of over VND1.03 trillion ($49.2 million), including VND775 billion provided by the ADB.

According to the provincial authority, most ADB-funded projects in the province have been carried out smoothly, benefiting local residents.

State-run firms set for restructuring

Ha Noi authorities are expected to restructure 30 businesses in the capital to enhance their production and make them more competitive this year, according to the director of the municipal Finance Department, Nguyen Don Toan.

Toan was speaking at a meeting on restructuring and renovating the city’s State-run businesses on Tuesday in Ha Noi.

The director said there were 15 businesses suffering losses, combining to form a total deficit of VND55.97 billion (US$2.6 million) in 2012, although he said this figure was an improvement on those recorded in 2011.

Of these companies, four suffered losses of below VND1 billion and the remainder suffered losses ranging from VND1 billion to over VND10 billion.

Toan said that the imminent restructuring work would equitise 16 businesses and 14 other companies will be restructured in different methods. The State will hold more than 50 per cent stake in businesses.

Under the equitisation process of all State-run enterprises in Ha Noi this year, the city authority will officially equitise two companies (Thuy Khue Footwear Company and Mai Dong Company Ltd).

Other companies, including the Ha Noi Bus Station Management Company and the Ha Noi Sport Investment and Development Company will be equitised by December this year, while city authorities will merge eight other businesses.

From March to December this year, three businesses are expected to file for bankruptcy: Ha Noi Construction and Industrial Production Company (Hacipco), Dien Thong Elenco and Sic Son Catering Tourist Services.

Speaking at Tuesday’s meeting, vice chairman of Ha Noi People’s Committee Nguyen Huy Tuong said equitising State-run businesses in the city has been carried out since 1996 at the direction of the Government.

From 1996 to the present day, the city has equitised 420 businesses, while 105 have been restructured in different ways – including MA, dissolution and bankruptcy.

By late December 2012, Ha Noi transferred all State-run companies to a single-member limited liability business model in line with Enterprise Law.

Tuong said the restructuring and renewal of State-run companies in the city aimed to enhance their management and generate better working condition for labourers.

Every company to be equitised has gone on to improve and contribute large capital to the city budget, Tuong added.

Annual report contest champions corporate sustainability

Vietnam’s sixth Annual Report Awards (ARA) competition was launched on March 19, with fresh awards to promote corporate social responsibility.

The 2013 ARA programme presents, for the first time, Sustainability Reporting Awards (SRA) for reports selected for their environmental and social issue achievements.

As for the new awards, the World Bank’s private sector arm IFC and Britain-based global body Association of Chartered Certified Accountants (ACCA) will judge the awards.

The contest’s launch also witnessed the signing of a memorandum of understanding between the ARA’s Organising Board, IFC and ACCA for a new partnership for an annual business programme.

The programme aims to encourage listed companies to further improve their professionalism, norms and transparency in making their annual reports. The awards are co-organised by the Ho Chi Minh Stock Exchange (HOSE) and Vietnam Investment Review’s sister publication Dau tu Chung khoan, and exclusively sponsored by the high-profile fund management Dragon Capital Group.

The Sustainability Reporting Awards come into being this year to encourage the companies to publicise information on issues related to the environment and society, along with raising awareness of sustainable development associated with environmental social responsibility.

HOSE chief executive Phan Thi Tuong Tam, head of the Organising Board and chief of the Board of Judges, said: “With the SRA coming into being, the sixth ARA moves to a new development stage. It points out a direction where companies must publicise information and build the business environment based on sustainable development through corporate social responsibility criteria.

“This also serves as a platform for listed companies as Vietnam will soon introduce regulations on sustainable development,” she said.

Dominic Scriven, CEO of Dragon Capital – the exclusive sponsor for the competition over the past six years, said: “Responsible investment is the backbone of Dragon Capital’s investment philosophy. International institutional and individual investors are showing increasingly interest in understanding the approach and commitment of companies in managing sustainability aspects of their operations, particularly providing stakeholders with real insight into how environmental, social and corporate governance practices being integrated into their core business process and strategy.

“Thus, sustainability reporting is needed to further strengthen the company’s competitiveness to attract stable and long-term capital flows,” he said.

Simon Andrews, IFC regional manager for Cambodia, Laos, Myanmar, Thailand and Vietnam, said: “IFC is pleased to contribute our expertise to this important Annual Report Awards initiative.

We believe that good reporting should be linked to corporate strategy. Deciding how to report and what to report helps focus a company’s efforts and resources on tackling the most important sustainability issues affecting its business. It also demonstrates good management and performance and attracts investors who are increasingly concerned about these issues before investing.”

Reza Ali, ACCA’s head of emerging markets in Asia, said: “ACCA is delighted to be part of the inaugural Vietnam Sustainability Reporting Awards initiative. We believe that organisations have a responsibility to account for their impacts on society and the environment. ACCA also believes that accountants have an important role to play in assisting companies to adopt green economic practices.”

The criteria for sustainability reporting include completeness, credibility and communication, with key considerations being integrated business conduct, reaching relevant user groups, legal risks, robust information and monitoring systems, as well as readiness to go beyond combining reports.

VIR Editor-in-chief Nguyen Anh Tuan – also head of the Organising Board, said norms, transparency, professionalism and creativeness continued to be the major criteria for this year’s ARA competition. Winning the awards depends on the way the listed companies publish their information rather than on their business performance.

He underlined that the listed companies have to observe standards stipulated by Ministry of Finance circular 52/2012/TT-BTC replacing the ministry’s 09/2010/TT-BTC as guidelines on publishing information in the stock market.

The jury would pay close attention to the assessments of performance and financial conditions, as well as the capability to analyse, predict risks and share information in corporate management, Tuan said. He added IFC’s involvement in the competition aimed to assess corporate governance work in annual reports.

The contest is also for annual reports from enterprises listed on the HOSE and Hanoi Stock Exchange (HNX). More than 700 annual reports from firms listed on both exchanges are expected to undergo selection this year.

Launched in 2008, ARA has increasingly attracted blue chip investors and listed companies.

Between 2008 and 2012, the organisers honoured 129 reports out of the 1,702 entries, including 299 qualified for the final rounds. The rate of winning reports out of the finalists increased steadily from 13 per cent in 2010 to 17.8 per cent in 2012.

HCM City eyes Dubai tourism link-up

HCMC’s tourism firms will organize two promotions in Dubai over the next few months in a bid to access the market and provide Middle East tours for Vietnamese.

Nguyen Bao Anh, deputy head of the Tourism Promotion Division, said that the plan of organizing a tourism promotion program in Dubai next month and attending the Arabian Travel Market in May has received the thumbs up from the HCMC government.

“The first program aims to work with enterprises and tourism agencies in Dubai to provide new destinations for Vietnamese tourists, while the second aims to attract tourists from Dubai to the city,” he said.

The Dubai promotion will have the participation of big travel operators such as Saigontourist, Hoa Binh, Huong Giang and Dong Thap. According to the enterprises, the market is full of potential and has convenient transport thanks to Qatar Airways, Emirates and Turkish Airlines.

According to Anh, after the trip, the HCMC Tourism Association, the HCMC Society of Travel Agents and travel enterprises will create products suitable for Dubai tourists.

After that, travel agencies from Dubai will be invited to Vietnam to study local tourism, with HCMC firstly introducing river, shopping and MICE (Meeting, Incentive, Convention and Exhibition) tourism products.

In addition to promoting tourism in Dubai, HCMC will explore Cuba as another new market and hold annual promotions in the U.K. and Russia.

EU importers to favor ASC tra fish

Many European countries will shift to importing tra fish qualified for Aquaculture Stewardship Council (ASC) certification with an aim of controlling fisheries farming in line with global criteria.

The Center for the Promotion of Imports (CBI) from developing countries and Dutch Sustainable Trade Initiative (IDH) announced the information in their research on tra fish markets with ASC certification in the EU.

The Vietnam Association of Seafood Exporters and Producers (VASEP) on its website at informed ASC is looking to become the leading certification issuer in seafood farming worldwide.

For instance, the retail market of the Netherlands will only trade in ASC tra fish either later this year or later next year. ASC will replace GlobalGAP standards to become a major certification issuer and tra fish products given ASC will be the consumer tendency of European buyers while their export price will be higher than that of those failing to get the certifications.

In the Netherlands, 93% of tra fish volume in the market is consumed via retail systems, with ASC’s tra fish price 25% higher than that of others. In Germany, about 70-75% of tra fish supply is distributed by retail stores while the remainder is in the foodstuff services segment. Specifically, frozen tra fish fillets labeled ASC sell for much higher prices in the European market.

Similarly, the Italian market shows a keen interest in environmental issues which are expected to be taken care of better in the long term, CBI said. This is also a chance for sustainable certification to be approached as a way to ensure food safety and hygiene of seafood products, which is good for tra fish and helps change negative awareness of the products.

In Italy, the public food supply chain said they are willing to pay more money to get ASC-labeled tra fish as long as the price is adjusted up less than 10% compared to prices of other types.

The ASC criteria is based on major requirements, focusing on the responsibilities of fish farming areas towards the environment and society. They are legal compliance, construction design, farming management without bad effects on environment and other users, reduction of negative impacts on land and water, deduction of impacts on the genetic intactness of the local tra fish population.

Also, ASC applies strict requirements to using and managing fish feed and controlling health, veterinary drugs and chemicals to minimize impacts on ecology and human health whilst best ensuring health, fish security and food safety and hygiene.

HCM City flooded with smuggled Chinese products

HCMC market monitoring forces last year detained nearly three million products weighing more than 380 tons smuggled into the city, with most of them coming from China.

Their report presented at the 2012 review meeting held on Tuesday shows that Chinese goods were responsible for most of the overwhelming presence of illegally-imported commodities citywide due to their cheap prices and diversified designs.

Smuggled items were transported into the city via many ways, including road and railway transports from border provinces, or even formal imports in which importers falsified statements about types and designs, quantity and origin.

Specially, the illicit trade volume brought into the city from the north by road accounts for a large portion of the total, says the report. They range from alcohol, liquid milk, and foodstuff to clothes, mobile phones, cosmetics and machinery components.

Local relevant authorities last year also seized and dealt with more than 130,000 items and 9,000 kilos of fake products like watches, garments, footwear, electrical cables and gas containers. These fake items are either imported from China or made in Vietnam.

Market monitors noted at the meeting that the situation of fake goods and substandard products trading and trade frauds has still remained a headache in the locality.

Nidec boosts investment in Vietnam

Japanese electric motor manufacturer Nidec Corporation will pour an additional US$100 million into Vietnam to expand its operations, said Nidec Chairman Shigenobu Nagamori.

Speaking at a meeting with HCMC Chairman Le Hoang Quan on Monday, Nagamori said Nidec needs such an additional fund to carry out some projects. It is expected that Chairman Quan will grant Nidec a certificate for capital increase on March 28.

“Nidec in Vietnam will not simply assemble products, but it will have to follow the trend in many other countries like China and Singapore… That is to establish a research center so that its subsidiaries in Vietnam can do all the things – from thinking up ideas to design and manufacturing,” said Nagamori.

He stressed the need to develop human resources.

“Instead of bringing the researches from Japan over here, in the coming time, ideas will be formed and developed right in Vietnam. To do so, Nidec will recruit Vietnamese good students, send them to Japan for study and then bring them back here to work,” he said.

Previously, most of the important factories of Nidec were located in Thailand. After this country had been hit by the severe flood in 2011, Nidec’s customers asked it to relocate the factories to other countries.

After surveying Vietnam and Cambodia, Nidec chose Vietnam because “Cambodia does not meet the demand for highly-qualified human resources”.

Nidec Corporation has nine subsidiaries operating in HCMC-based industrial parks with total investment capital of over US$500 million. These companies generate annual revenue of some US$600 million for the parent firm.

Five of Nidec’s subsidiaries in HCMC are located in Saigon Hi-Tech Park. They are worth US$246.5 million in investment and four of them are now operational.

In addition, Nidec has a subsidiary in Hanoi with 400 staff members. The Japanese corporation has invested only US$6 million in this company, from which it earns around US$12 million every year.

With an export turnover of US$868 million in 2012, Nidec was the second largest hi-tech firm after Intel.

* Long Hau Corporation, investor of Long Hai Industrial Park in Long An Province, on Monday signed land leasing contracts with three Japanese firms which will build production plants in the park.

The three Japanese investors are Chubu Rika (Vietnam) Co., Ltd with the alumite plant, Vina Astec Co., Ltd with the stainless steel component plant and Nitta Gelatin Vietnam Co., Ltd producing gelatin and stabilizers.

The projects will be developed in a total area of 23,000 square meters, and products will be exported. The Japanese investors plan to kick off construction of their plants this year.

According Long Hau Corp., land leasing contracts has proved that the park is the favorable destination of Japanese firms.

To meet the demand of Japan’s small and medium firms as target customers, Long Hau Corp. has developed technical infrastructure, workshops, and other auxiliary facilities like kindergarten, supermarket, hospital, restaurant, and dormitories. Besides, the firm has set up a customer care team catering to Japanese customers.

Long Hau Industrial Park has so far attracted 114 investors, with 28 Japanese firms currently operating there and ten other Japanese firms constructing their projects.

Bad debt hard to completely settle: StanChart

It is very difficult to completely settle bad debt of Vietnam’s banking system in the short term, say the global research team of Standard Chartered.

“Bad debt is hard to tackle. We do not expect a short-term plan for bad debt settlement in Vietnam. This process must be done step by step,” say the researchers in the report “Vietnam – navigating the macro landscape” released last Friday.

Citing the data from Thailand, Indonesia and Malaysia during the Asian financial crisis and the experience of the nations hit by the crisis, the report states Vietnam’s bad debt ratio can be controlled as long as it does not exceed 20%.

“The refinancing cost in Thailand was 34% of GDP, versus 14.9% estimated for Vietnam, if bad debt reached 20% of the total outstanding loans,” says the report.

Vietnam’s banking system is not so connected to the global financial system and its products are quite simple. These factors will make the overall picture simpler though it still lacks transparency.

However, the major problem is that the ratio of bad debt in Vietnam is unclear, the researchers pinpoint.

International rating agencies find the actual bad debt ratio difficult to determine and the reason for different estimates lies in different accounting standards. Fitch noted that the bad debt ratio will be lower under Vietnamese National Accounting Standards.

The lack of transparency in the banking sector and the cross ownership are other reasons for the ambiguity.

Almost every major economic organization has a stake in at least one bank, while big banks hold stakes in smaller banks. This makes the identification and resolution of bad debt more difficult.

The report highlights four important steps towards solving the problem of bad debt in Vietnam effectively.

The record of bad debt should be done carefully. When to record bad debt and who will suffer eventually need to be studied in detail.

Provisions for bad debt must be made sufficiently. As per a circular recently issued by the central bank, banks have to spend more on provisions from June 2013.

Refinancing will give banks necessary funds to recycle their business. Standard Chartered lists five channels for refinancing, namely aids from the State budget, purchase of bad debts, use of foreign exchange reserves for capital injection, establishment of an asset management company and use of foreign funds, with the last one described as the best.

The banking industry needs to upgrade the mechanism for risk management. Local banks should learn from foreign banks how to conduct credit analyses based on cash flows and monitoring of borrower’s repayment ability.

In addition, it is important to have a coherent legal framework with adequate laws on bankruptcy and confiscation.

The researchers suggest there should be a couple of financing channels for bad debt settlement. The support of government (whether through credit or budget funding) will be a key to rapid deployment of this process.

An asset management company to tackle bad debt is being conceived although it is still unclear where the huge fund for reform will be sourced from.

Restructuring of the banking system, State-owned enterprises and the property market will be the major challenge for policy makers in Vietnam. The success of this process will be a very important milestone for sustainable growth, says the report.

Binh Duong lures over US$500 million of investment

The provincial government of Binh Duong on Tuesday awarded investment certificates to 29 foreign-invested projects with total newly-pledged and additional capital of over US$547 million.

Thirteen operational projects in the province raise their capital by some US$171 million, while 16 new projects with a combined investment capital of nearly US$376 million are registered.

Most of these projects are set up by investors from Asian economies like Japan, Singapore, Thailand, South Korea and Taiwan. The majority of them are manufacturing projects.

Still, foreign investors in Binh Duong are also involved in service, trade, real estate and production of hi-tech products, according to the provincial government.

The largest project licensed on Tuesday is VSIP Binh Hoa-Binh Duong Complex worth some US$199.6 million to be built on an area of 6.8 hectares in Vietnam Singapore Industrial Park I (VSIP I) by VSIP Joint Venture Company. The project consisting of a residential area with offices for rent, apartments and accommodations for specialists will get off the ground late this year.

Meanwhile, Toin Corporation of Japan will spend US$12 million developing a packaging-paper factory in My Phuoc 3 Industrial Park. The factory covering two hectares will be carried out this July and completed by the end of this year.

Panasonic Eco Solutions Vietnam Co. Ltd. will build a plant for production, assembly, processing, design and testing of electric and electronic devices. The plant worth US$38 million will be located in VSIP.

Taiwanese motorbike producer Kymco will set up a factory covering six hectares in Dai Dang Industrial Park. The US$23-million factory will be put into operation late this year to replace the current factory of Kymco in HCMC.

PepsiCo Vietnam will invest US$40 million in Song Than Industrial Park to make processed food.

Among the investors adjusting up their capital, URC Co. Ltd. of the Philippines spends an additional US$50 million expanding its food and beverage production, while Hariki Precision Vietnam Co. Ltd. pours US$11.5 million more into production of precision engineering components for industrial manufacturing.

Le Thanh Cung, chairman of Binh Duong, told the awarding ceremony the province still achieved good results in investment attraction despite the troubled economy.

Many large foreign groups have invested in service and real estate besides industrial manufacturing. Foreign investors are operating more and more efficiently, so they decide to raise capital to expand operations, he remarked.

Binh Duong last year lured over US$2.8 billion of foreign direct investment, up 253% over the preceding year, accounting for 17.1% of the nation’s total. There were 123 fresh projects with total registered capital of US$1.69 billion and 130 projects increasing their capital by nearly US$1.15 billion.

HCM City seeks to extend tourist bus life span

The HCMC Department of Culture, Sports and Tourism says it is going to submit a petition to the Ministry of Transport to increase the life-span of buses carrying visitors to 15-20 years from the current ten years.

Nguyen Duc Chi, deputy director of the Travel Management Division under the city’s tourism department, said the operational period of tourist buses is a mere ten years as regulated in Decree 91/2009/ND-CP. Therefore, the department plans to propose the transport ministry increase the time for a longer period.

The short period of utilizing tourist buses has made tourist agencies and transporters find it difficult to do business. It is because the fast depreciation has pushed up transport costs, raising tour prices and eroding industry players’ competitiveness as a result.

In fact, tourist buses are still in good conditions to serve visitors after ten years of operation as long as they are given timely maintenance.

Enterprises running large fleets such as Hoa Binh and Viet Travel have already reported the difficulty to the Ministry of Culture, Sports and Tourism, Chi said. As several other firms also complained about the same problem, it is rational to suggest revision now, he added.

Foreign investors eye city’s metro lines

The metro projects 3a, 3b, 4 and 6 in HCMC have caught the attention of many foreign investors, according to the HCMC Management Authority for Urban Railways.

The city plans to develop seven metro lines from now to 2020. Except Metro Line No. 1 (Ben Thanh-Suoi Tien) and Metro Line No. 2 (Ben Thanh-Tham Luong), the others are still awaiting investors.

Recently, Italian-Thai Development Public Limited Company of Thailand has sought permission for constructing Metro Line No. 4 (Ben Cat-Nguyen Van Linh) under the form of public-private partnership (PPP). The company is also interested in the monorail lines No. 2 and No. 3, said Le Khac Huynh, deputy head of the HCMC Management Authority for Urban Railways.

Metro Line No. 5 from Bay Hien Intersection to the Saigon Bridge (in the first phase) has also received good news. The Asian Development Bank (ADB) at a meeting with the HCMC government last Wednesday agreed to offer the project a financial aid of US$500 million, part of its total fund for Vietnam in the fiscal years 2014-2016.

Meanwhile, the European Investment Bank (EIB) pledged to grant the project some 200 million euros, or around US$257 million. Loan contracts will likely be signed in the middle of this year.

Previously, the Spanish government promised to provide Metro Line 5 with 500 million euros, but later cut the fund to 200 million euros as the country is affected by economic woes.

In addition, several investors from the U.S. and the U.K. have shown interest in the metro lines 3a, 3b, and 6.

Talking to the Daily about the progress of Metro Line No. 1, Huynh said topographic survey had been finished and geological survey was now 80% done. The contractor will put up fences along the Hanoi Highway late this month to start work on the 17.1-km overhead section.

As for the underground section stretching 2.6 kilometers from Ben Thanh Market to Ba Son Shipyard, it is calling for bids and expected to get going in the first quarter of 2014.

Meanwhile, Metro Line No. 2 is accelerating site clearance compensation. At the same time, the HCMC Management Authority for Urban Railways is inviting bids for its construction packages so that the project can get off the ground in 2013.

Rohto injects fund to build skin-care products

Rohto-Mentholatum (Vietnam) Co. on Tuesday started work on its second project in the southern province of Binh Duong, this time to build a skin-care product factory after the first one better known for eye-drop products.

The second project in Vietnam-Singapore Industrial Park (VSIP) will increase the company’s investment in Vietnam from US$18 million to US$33 million. The increased investment aims to help the company expand business to meet domestic and export demand, said Masaya Saito, general director of Rohto-Mentholatum Vietnam.

“The second factory is built to focus on skin care products to meet consumer demand not only in local but also foreign markets… This factory will be one of the key international plants of Rohto-Mentholatum,” he said in a statement.

Rohto Mentholatum Vietnam has over the past 15 years produced several lines of health-care products such as New V. Rohto eye-drop, LipIce lipstick, Sunplay sunscreen, and most recently the skin-care product of Hada Labo.

VFF’s fund unit sales complete

VinaWealth Fund Management JSC (VinaWealth) said it had successfully completed marketing fund units of Bao Thinh VinaWealth Enhanced Fixed Income Fund (VFF) under its management last week.

As an opened-ended fund, VFF got approval from the State Securities Commission to introduce its fund units to the public on December 12. The fund has attracted over 150 investors with an estimated VND50 billion, with most of them local, VinaWealth said.

At least 80% of VFF’s portfolio is for bond investment. The fund is allowed to make investment into government bonds, government-underwritten papers, treasury bills, corporate bonds or money market investments.

Roy Fong, Fixed Income Director of VinaWealth, said in a statement that VFF is looking to achieve a profit rate that is higher than the average deposit rate of 12 months at HSBC. Specifically, he noted, allocating assets of the fund needs to be active and strictly comply with an investment process in line with international risk management criteria.

VinaWealth was formerly known as Thep Viet Fund Management JSC which came into operation in 2008 with chartered capital of VND25 billion. Thep Viet issued an additional 1.42 million shares to VinaCapital to raise its chartered capital to VND39.2 billion later, with VinaCapital owning a stake of 49% worth of 1.92 million shares and the remainder for local individual investors.

Temporary gold exports almost finish

DongA Bank on Monday exported the final lot of gold as part of local commercial banks’ temporary export of gold bars and re-import of solid gold bullion, nearly completing the process turning non-SJC gold into the benchmark product.

Nguyen Hoang Minh, deputy director of the central bank’s HCMC branch, said that temporary export of gold bars has almost finished after over two weeks of implementation.

Gold processing has been halted as Saigon Jewelry Company (SJC) is producing gold bars for the central bank, facilitating the agency’s intervention in the gold market in the coming time.

The central bank has yet to disclose gold quantity to be launched onto the market. However, a leader from this agency has told the Daily that this gold volume will be small.

Gold transaction at large companies remains normal. For example, SJC reports transaction of around 1,000 taels each day.

While the central bank is going to use gold in the nation’s foreign exchange reserves to intervene in the market, some said that this action might cause many risks.

A member of the Vietnam Gold Traders Association said that other countries sell gold in their reserves just to serve foreign reserve policies such as changing the portfolios of currencies and gold in each period. The ultimate goal is to increase their reserves at the end of the year.

In Vietnam, the central bank has plans to sell gold to stabilize the market. Vietnam is different from other countries with people’s strong inclination of keeping gold while exports and imports of the precious metal is prohibited, causing a wide difference between local and global gold prices.

These characteristics have confused the central bank as this agency cannot refer to any markets worldwide to narrow down the gap while stabilizing other macro factors. Therefore, selling gold in the reserves is a risky decision of this agency, the member said.

Another expert said that there will be price risks in trading gold with the international market. It is hard to predict global gold prices as price fluctuations depend heavily on political, economic situation and trading of speculators.

However, the leader of the central bank said that selling gold in the nation’s reserves is a good solution as the State does not want to spend more foreign currencies on gold importing. In fact, gold volume to be sold onto the market is not high.

The central bank will regulate currency and gold portfolios in each period to avoid impacts on the total reserves. Safeness of the reserves remains the top priority, not investment to seek profits, the official said.

Luxury Vertu TI unveiled in Vietnam

FPT, the distributor of Vertu phones in Vietnam, on Tuesday introduced Vertu TI smartphone running on Android operating system and priced at 7,900 euros, or over VND200 million.

The 3.7-inch Vertu TI has the scratchproof sapphire crystal screen and the lightweight titanium casing which is five times harder than other smartphones.

Running on Android 4.0, the smartphone is equipped with the 1.7 GHz processor, an 8MP rear camera and a 1.3MP front camera.

Vertu TI is handmade by a single craftsman at Vertu’s headquarters in Hampshire, England. Every VERTU Ti is signed by the craftsman before being distributed to buyers worldwide.

In a related development, FPT Technology Products Company has set a target of selling 600,000 FPT-branded smartphones this year, said Le Hoang Hai, deputy general director of the company.

FPT forecast the sales volume of smartphones would increase twofold this year, accounting for 30% of the total number of mobile phones sold in the domestic market, versus 15% last year.

Smartphone consumption in Vietnam is rising rapidly. Therefore, FPT this year will focus on production of smartphones, which will make up about 70% of its mobile phone output, Hai on the occasion of FPT launching a new smartphone in Hanoi on Monday.

To achieve a smartphone sales growth higher than the average of the market, FPT would seek to access the world’s latest technology for smartphone production.

The company’s newly-launched smartphone FPT IV is said to be the first smartphone model in Vietnam using the quad-core chip Qualcomm Snapdragon MSM8225Q to boost performance and battery life.

The dual-SIM FPT IV with a display of 4.5 inches sells for VND4.45 million, which FPT described as the most competitive price in the local market at present.

The first FPT-branded smartphone was launched into the market in 2010. In mid-2011, FPT officially joined the smartphone market, and has ever since introduced six FPT-branded models at home, all designed by FPT and made in China.

FPT intends to introduce a new smartphone product every month, with software written in Vietnamese.

German firms support vocational training

German firms Messer and B. Braun on Tuesday signed a cooperation agreement in vocational training with Hung Yen University of Technology and Education.

Given guidelines by Germany’s Federal Ministry for Economic Cooperation and Development (BMZ), Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) organization will offer consulting and help carry out the training project.

Based on a parallel training model, the two enterprises will cooperate with the university to provide training in the electro-mechanic sector, including practice at their workshops.

The project aims to help students gain real experience in working at factories and outstanding students will be recruited, according to a statement released by the Embassy of Germany in Vietnam on Tuesday.

According to the Ministry of Labor, Invalids and Social Affairs, vocational training with close cooperation with businesses will be an important step to improve competitiveness of Vietnam in the ASEAN market.

Many industrial sectors in the country are desperate for skilled workers and a high-quality training system will decide participation of German firms or other investors in the local market.

This is part of a cooperation program between the countries. Germany is assisting Vietnam in a vocational training reform program participated by the National Institute for Vocational Training in Vietnam and the Ministry of Labor, Invalids and Social Affairs.

On Monday, Vietnamese Deputy Minister of Education and Training Tran Quang Quy, Deputy Minister of Labor, Invalids and Social Affairs Nguyen Ngoc Phi and German Ambassador to Vietnam Jutta Frasch signed a joint declaration of intent on human resources development in Vietnam.

Both sides pledged to raise cooperation in vocational training and draw participation of private enterprises.


By vivian