Cement association worries about foreign competition
Many Vietnamese cement companies are on the verge of bankruptcy, which would lead to them being bought out by foreign partners, according to the Construction Material Association.
The massive investment in the domestic cement market has lead to the redundancy
According to the association, due to the economic difficulties, domestic demand for cement during the 2011 – 2013 period was forecast to decrease by around 14-15 million. Meanwhile, new projects had continued being implemented.
The association said by 2015, total cement output of the country would reach 94.24 million tonnes, resulting in a 25 million tonne excess, this would rise to 129.5 million tonnes by 2020.
The association suggested reviewing the list of cement projects to more realistically match market demand and focus on raising the efficiency of plant management. It has also recommended the cancellation of nine planned cement projects and a reconsideration over nine others scheduled to receive investment between 2016 and 2030 as their technology would be largely redundant by 2030.
A number of cement projects which have been licensed have been delayed due to weak investor financial capacity, such as projects in the central provinces of Binh Phuoc, Nghe An, Thua Thien-Hue and Quang Binh.
In reality, several loss-making cement companies have had to sell their projects to foreign partners. In November 2012, Indonesia’s Semen Gresik bought 70% of Thang Long Cement Joint Stock Company’s stake, equal to around USD230 million, becoming the company’s strategic partner.
The Indonesian cement firm will also co-operate with Thang Long Cement Joint Stock Company to expand the second production line of Thang Long JSC and build An Phu Cement Plant in Binh Phuoc Province.
According to the association, it was essential to restructure cement companies and establish cement production complexes which are strong and competitive enough to control the domestic cement market.
“At present, Vietnam is home to 46 cement companies, but only, Vicem can produce over 20 million tonnes annually,” said Chairman of the association Tran Van Huynh said.
Enterprises removed from fastest-growing companies list
Vietnam Report JS Company has had to review the recent ranking of 500 fastest-growing companies (FAST500) 2012 due to mistakes in the figures, resulting in the removal of a number of firms from the list.
The review was made after DTiNews reported surprise among the business community that SME Securities Corporation (SMES) had been ranked 30th on the list despite the fact they were on the verge of bankruptcy.
Five other firms, Vimeco Joint-stock Company, NTACO Corporation, Song Hong Corporation, Vinaconex No. 7 and Century 21 Joint Sock Company were taken off the FAST500 because they failed to meet requirements for total assets, profits and a compounded annual growth rate (CAGR) of at least 20%.
Vimeco Joint-stock Company, for example, had a CAGR of only minus 1.87%.
Earlier, Vietnam Report JS Company announced that SME achieved high revenues during the period of 2008-2011 period, but, according to further investigation by DTiNews, the firm had not released their business records for 2011.
A number of other companies were also eliminated from the FAST500 ranking.
Vietnam Report JS Company has also reviewed the ranking of 500 small and medium-sized enterprises with the fastest growth in 2012, removing 11 firms from the list.
Vietnam Report JS Company has continued asking companies updating their databases to send all pertinent information to the organising board before April 4 to avoid possible mistakes in the official lists, which are scheduled to be released on April 9.
Ports lie idle because for lack of connecting roads
Huge port projects in HCM City are being deserted because of a lack of roads to link them to the transportation system.
The VND2.73 trillion port project, Saigon-Hiep Phuoc, was slated for completion by 2014, with an expected capacity of over 8 million tonnes of cargo per year. But a habour bridge and port routes to connect it with main highways and roads have failed to materialise.
Nguyen Hoang Dung, Director General of Saigon-Hiep Phuoc Port Company said they asked permission for temporary use of completed piers and floating docks until more permanent infrastructure is available.
He said the port could only reach full capacity when the D3 route, which would link the port to Hiep Phuoc Industrial Park, is complete.
However, Hiep Phuoc Industrial Park Company has halted their plans for the D3 route, along with other projects related to the port due to capital shortage. The company asked the Ministry of Transport and Finance to make advance payment to speed up the construction.
Phu Huu Port in District 9 hosted by Ben Nghe Port Company faces a similar situation. Even though the construction began in 2007 and had an expected capacity of 4 million tonnes of cargo per year, it has yet to become operational because there no road to the port has been built.
The area needed to connect Nguyen Duy Trinh Street to Phu Huu industrial park remains stalled because of problems with site clearance. But the head of Ben Nghe Port Company said that even if the port road were put into use, there would still be transportation problems because Nguyen Duy Trinh Street is so small.
Pham Van Dong, Head of HCM City Economic-Budget Committee, said after a field survey conducted on March 19, that they would ask HCM City People’s Committee for more synchronised approach to dealing with the infrastructure problem.
Export value reaches nearly US$30 billion
Official statistics show that Viet Nam’s export value reached nearly US$30 billion in the first quarter of 2013.
The figure rose by 19.7% against the same period last year while it nearly doubles the Government’s whole year target of 10%.
The gain is so meaningful as the global economy is now experiencing slow recovery and many of Viet Nam’s trade partners have erected technical barriers.
During the reviewed period, 10 categories of commodities posted an export volume of over US$1 billion each. Top exports included phones and spare parts (US$4.48 billion) and garments (US$3.79 billion).
Meanwhile, with US$3.15 billion, the US ranked first among biggest export markets of Viet Nam, followed by China (US$1.89 billion), Japan (US$1.88) and the Republic of Korea (US$1.09 billion).
Viet Nam gained a trade surplus of US$500 million in the first quarter, however, the foreign investment sector enjoyed a high trade surplus of US$3.12 billion.
More flyovers built to keep HCM City moving
Three more flyovers will be built in Ho Chi Minh City to help ease traffic congestion at key intersections.
Work on the steel flyovers is scheduled to begin on April 30 with a total cost of over 1 trillion VND (approximately 48 million USD), said the municipal Department of Transport on March 25.
The three flyovers will be built at the junctions of Cong Hoa-Hoang Hoa Tham streets, Nguyen Tri Phuong-Ba Thang Hai-Ly Thai To streets and Vong Xoay Cay Go, which are heavily congested sites.
The overpass at Cong Hoa-Hoang Hoa Tham junction in Tan Binh district measures 238 metres in length and has two traffic lanes. Construction of the overpass is slated for five months.
Meanwhile, the two-lane flyover at Nguyen Tri Phuong-Ba Thang Hai-Ly Thai To junction is 358.2 metres long and the other is designed to have the Y shape, which connect with Hong Bang and Ba Thang Hai roads.
This is part of the city’s efforts to ease traffic congestion at 12 key junctions.
Earlier, two flyovers at Thu Duc and Vong Xoay Hang Xanh junctions were put into service last year.
A 121 billion VND overpass at Lang Cha Ca intersection in Tan Binh district is also scheduled to complete in June this year.-
Firms in line for some tax relief
Tax reforms are on the way to help firms alleviate procedure burdens amid a stormy economy.
Apart from reducing value added tax (VAT) payments from 12 times to four times per year, the Ministry of Finance (MoF) is contemplating allowing small- and medium-sized enterprises (SMEs) to apply a direct VAT payment method instead of the deduction method, striving for procedure simplification.
Under existing regulations, household units, co-operatives and income-raising administrative units are deduction method VAT payers which amount to around 550,000 units. One-third of them are small and micro small units with annual revenue below VND1 billion ($47,600) whose VAT payment just account for 0.3 per cent of the country’s total paid VAT amount each year.
“Most small and micro small businesses have yet to properly adhere to the Accounting Law and many did not seriously follow regulations on VAT declaration and payments. Besides, this provides a loophole for not a few businesses making faulty tax declarations causing losses to state budget and hurting the business environment,” said deputy minister of Finance Vu Thi Mai.
Mai said that that was one among reasons why the MoF proposed the SMEs apply direct method instead of the deduction method in VAT calculation.
Other important reasons behind the proposal were to simplify procedures, reduce the need for invoices and associated documents, improve tax management, slash costs associated with tax bodies’ management and firms’ obedience, thus accelerating the tax administrative procedure reform pace.
According to a MoF survey, many countries currently apply the VAT, have set a threshold to annual business revenue to determine which firms will be eligible to direct method VAT payment with low rate rates from 1 to 4 per cent on revenue figures. This aims to reduce procedures, save costs for taxpayers and avert trade fraud.
The MoF is considering two revenue thresholds for direct method VAT payment. First, household businesses, cooperatives and administrative units having incomes of VND1 billion ($47,600) and second the revenue figure is raised to VND2 billion ($96,000).
Under the first scenario, around 30 per cent of businesses and 80 per cent out of 1.7 million household businesses, currently VAT payers, will be subject to direct method VAT payment. Meanwhile, in the second scenario around 35 per cent of businesses and 85 per cent of household businesses would incur VAT payments using direct method, according to Mai.
The MoF proposal was generally appreciated by lawmakers. Head of National Assembly’s Economic Committee Nguyen Van Giau, however, assumed since tax was a sensitive issue to society and the corporate community, so a explicit revenue threshold for VAT calculation should be included in the amended VAT Law for consideration by the National Assembly in May.
RoK-Vietnam conference on digital content
A conference covering the current status of digital content in Vietnam and the Republic of Korea (RoK)’s vast contribution to the industry was held by the Ministry of Information and Communications (MIC) in Hanoi on March 27.
MIC Deputy Minister Nguyen Minh Hong said the event provides assistance to businesses and scientists involved in the information technology (IT) industry to seek cross-border partnership opportunities.
Digital content is a new but very promising sector that has already contributed to Vietnam’s economic growth. Although estimated to account for just 10 percent of earnings from IT industries, revenue from digital content has grown 20-40 percent over the past ten years.
In 2011, Vietnam’s IT sector consisted of 500-600 enterprises generating over 60,000 jobs and earning over US$1 billion.
Choi Youn Chel, a representative from the Korean Creative Content Agency (KOCCA), said the RoK has the leading digital content industry in the world, with the market valued at nearly US$3 billion in 2012. The country is now focusing on new technologies for personalisation, 3D and virtual reality.
Timber exports face hardships
According to the Vietnam Timber and Forest Product Association, the country has approximately 80 furniture manufacturers consuming 3.5 million tons of raw wood every year, even as precious forest area is being gradually denuded and reduced.
In February, timber and wooden product exports brought in some US$342 million, taking export turnover in the first two months to $831 million, up 36.2 percent year-on-year.
Timber and wooden product exports to major markets has risen sharply since last year. Timber exports have risen from 400,000 tons a year to 15 million tons a year. For example, exports to the U.S. grew 79.89 percent, Japan 56.03 percent, China 92.4 percent and South Korea 30.6 percent, according to the Ministry of Agriculture and Rural Development. This indicates the mushrooming of manufacturing factories.
The consequence of unplanned development of such factories will lead to competition between enterprises, which will in turn purchase immature trees to meet production demand. Enterprises in the central provinces of Quang Ngai and Binh Dinh are quickly falling into this bracket.
Nguyen Ni, director of Dung Quat Paper, said 21 factories in Quang Ngai have capacity of 100 tons a year. Therefore they will consume 21,000 tons a day while the supply can barely meet 30 percent. This will lead to unhealthy competition in purchasing trees, even immature ones, resulting in low quality.
At the beginning of 2013, timber exports went for $138 per ton, later falling to $120 per ton and now it is $129 per ton. The slight rise in export price cannot help enterprises recover losses.
Gov’t should do more than lower interest rates
With the State Bank of Vietnam lowering interest rate on deposits of upto 12 months by 0.5 percent from March 27, there is hope the market may once again stabilize.
The Central Bank is prudent in just lowering the rate on deposits for one and three month terms from 8 percent to 7.5 percent a year, in an effort to meet the macro-economic target for 2013.
Subsequently, many banks simultaneously slashed deposit interest rates, in anticipation of an official rate cut by the Central Bank.
The Central Bank also cut other benchmark interest rates by 1 percentage point.
Thanks to the Government’s effective control on the inflation, liquidity has increased in banks and lower deposit interest rates have resulted in more money flowing into manufacturing.
The Central Bank has targeted a 12 percent credit growth for this year, a plan experts say is only achievable if lending interest rates were lowered to 10 percent for short-term loans, and 12-13 percent for long-term loans.
Economists said this move happened at the right time as March inflation is less than 7 percent. The decision to lower deposit interest rates at this time is quite in order. Noticeably, lending interest rate for five preferential sectors, including agriculture, exports, support industries, businesses that use high technology, and small and medium sized enterprises, will be capped at 11 percent a year, down from the current 12 percent ceiling.
However, the question is to what extent lowered deposit interest rate will affect lending interest rates, because in reality the lending interest rates are still so high that enterprises cannot endure them.
In many meetings between the Central Bank and local businessmen, many complained that enterprises still suffer lending interest rates at 13-15 percent, resulting in difficulties in manufacturing. Therefore, SBV governor Nguyen Van Binh last week called on banks to cut lending rates to retain old customers and attract more potential clients.
Accordingly the Central Bank should have measures to shrink the lending interest rates. As for enterprises; they said the Government should support consumption of their products rather than lower lending interesting rates.
In fact, credit growth has just increased recently. By Central Bank statistics, by March 21, credit growth increased by 0.31 percent compared to February and 0.03 percent compared to last December.
Hence, the Government should carry out synchronous measures in addition to lowering lending interesting rates, as well as deal with bad debts and large inventories.
PM green lights highway expansion
Prime Minister Nguyen Tan Dung gave the go-ahead for the expansion of National Highway 1A in the central province of Nghe An at a ceremony yesterday.
The 34km section connecting Nghi Son in nearby Thanh Hoa Province and Cau Giat in Nghe An will be built under the Build-Operate-Transfer (BOT) model by the Civil Engineering Construction Corporation No. 4 (Ministry of Transport) and the 319 Corporation (Ministry of Defence).
The partnership will invest more than VND3.6 trillion (around US$180 million) in the project.
Considered the most important highway in Viet Nam,National Highway 1A runs through half of the provinces and cities in the country, linking Ha Noi, Da Nang, Ho Chi Minh City and Can Tho.
Addressing the ground breaking ceremony, Dung praised the efforts made by both contractors and provinces.
He also asked relevant ministries and localities through which the road runs to help implement the project.
Last Sunday, another project to expand a section of the highway in the central province of Quang Nam also commenced. The 40km section will be expanded with investment of over VND1.6 trillion ($80 million).
On the same day, Dung went to supervise the construction of National Highway 1A on the southern side of Ben Thuy 2 Bridge, which connects the central provinces of Nghe An and Ha Tinh.
Dung also paid a floral tribute to thirteen local volunteers who lost their lives while working to deactivate explosives left from the war in Truong Bon, My Son Commune in Do Luong District, Nghe An.
Over 19.4 million tourists visit Mekong Delta in 2012
Mekong Delta region attracted more than 19.4 million visitors in 2012 and earned about VND4.3 trillion from tourism-related activities, an increase of 23.2 percent compared with the previous year, according to newly-released statistics.
The figures were issued at a meeting of the Mekong Delta Tourism Association held to review its activities in 2012.
In 2013, the association will focus on boosting tourism cooperation in the region and expand its tourism programmes eastwards to Long An, Tien Giang, Ben Tre Vinh Long and Tra Vinh provinces.
The famous travel website Lonely Planet last year listed Mekong Delta as one of the best value destinations in the word.
Paper industry shows impressive growth
The paper industry has grown rapidly at a rate of 15-17 percent over the past five years, producing more than 2 million tonnes and supplying 64 percent of the domestic market annually.
A report from the Vietnam Pulp and Paper Association (VPPA) showed that the country’s paper consumption reached 2.9 million tones last year. Average consumption per capita in Vietnam rose from 26.44kg in 2010 to 29.61kg in 2011 and 37.2kg in 2012.
VPPA Secretary General Vu Ngoc Bao said last year’s paper exports to 18 countries, mostly to the US, Taiwan and Japan, were estimated at US$425 million, less than half the value of paper products for domestic use.
Although the domestic production of pulp jumped remarkably from 345,000 tonnes in 2010 to 373,400 tonnes in 2011 and 484,300 tonnes in 2012, it was far from meeting local demands. And Vietnam had to import a similar amount of pulp and paper.
In fact, Vietnam has huge potential for developing the paper industry as it owns large areas of forest which are yet to be fully exploited.
Most of the shavings from gum trees and acacia hybrids are shipped abroad with volumes jumping 10-fold over recent times, from 400,000 tonnes in 2001 to more than 5.4 million tonnes in 2011, making Vietnam the largest exporter of such shavings.
By a curious paradox, China and Japan purchased wood shavings at a low price of US$110-120 per tonne and used them to produce and resell pulp for around US$900-1,000 per tonne.
To deal with the shortage of materials Vietnam has concentrated on recycling used paper, including old corrugated containers (OCC), old magazines (OMG), old newspapers (ONP) and residential mixed paper (RMP), which are imported from the US, Japan and New Zealand.
Nearly 100 percent of packaging paper, 90 percent of tissue and 60 percent of newspapers in Vietnam are now made from recycled paper.
Last year, the total amount of recycled paper consumed reached 1.45 million tonnes, 987,100 tonnes of which are locally made and 463,000 tonnes imported.
In 2013 the paper industry is forecast to face snags in finding outlets for its products as the economic recession has led to stockpiles of paper.
Statistics from the Ministry of Industry and Trade (MoIT) said the volume of paper in stock has increased by 33.7 percent in the first two months of this year compared to the same period two years ago.
VPPA Secretary General Bao said due to a decline in paper consumption, some domestic producers have had to reduce or even stop their operations to minimise their stock holdings.
In addition, there is fierce competition between the sales arms of these producers, Bao added.
The MoIT predicted that the total paper production output will reach 2.18 million tonnes in 2013, 17.7 percent higher than last year.
However, something of a paradox remains as Vietnam still has to import about 1.3 million tonnes of assorted paper worth US$1.35 billion to meet local demands.
Over 450 businesses to attend Vietbuild 2013
More than 450 businesses from 18 nations in the world will participate in the international exhibition on construction, building materials, real estate, interior and exterior decoration (Vietbuild 2013) in Hanoi from March 28 to April 1.
The event is co-organised by the Information Centre under the Ministry of Construction, Vietbuild Construction International Exhibition Organisation Corporation, and AFC international Exhibition Fair Corp.
At a press conference in Hanoi on March 25, the organizing board said both local and foreign businesses will have the chance to introduce their new products and sign contracts with their partners.
As many as 1,350 pavilions will be set up to display a wide range of construction materials, interior decoration designs, electric equipment, sanitation, and glass products, as well as new production technologies.
Among domestic companies are Viglacera Corporation, Dong Tam Joint Stock Company, and Eurowindow Joint Stock Company.
During the event, the organizing board will present the VTOPBUILD Golden Cup and Medals of the construction sector to outstanding businesses.
Farm produce exports hit US$6.56 bln in Q1
Export earnings of agro-forestry and fishery products rose 6.2 percent in the first quarter of this year to US$6.56 billion, according to the Ministry of Agriculture and Rural Development.
However, seafood exports fell 5.9 percent to earn US$1.21 billion. The US was Vietnam’s leading seafood importer, consuming 18.85 percent of the total volume, followed by Japan (14.93 percent) and the Republic of Korea (6.73 percent).
Rice exports grew 34.3 percent in volume to 1.38 million tonnes, but still declined 5.7 percent in value to US$616 million.
The tea sector sold 29,000 tonnes overseas for US$43 million, down 14.1 percent in volume, but up 2.5 percent in value. Pakistan remained Vietnam’s largest tea importer with 17.6 percent of the market share.
The pepper sector shipped 39,000 tonnes overseas for US$242 million, down 15.4 percent in volume but up 11.6 percent in value. Major pepper importers included the US (21.13 percent of the total), Germany (11.16 percent), the United Arab Emirates (7.39 percent) and Singapore (6.77 percent).
The timber processing sector defied expectations, increasing its three-month export revenue by 16.5 percent to US$1.18 billion. Timber exports to China rose 63 percent, to the Republic of Korea 27.55 percent, to Japan 16.32 percent and to the US 13.18 percent.
Economists say the global economic recession continues to impact the Vietnamese economy and has negatively affected farm produce exports. Establishing technical specifications instead of non-tariff protection measures is also causing difficulty for agricultural exports.
National economy grows by 4.89pct in Q1
Vietnam is expected to achieve a GDP growth rate of 4.89 percent in the first quarter of this year, a bit higher than last year’s corresponding figure of 4.75 percent.
The Ministry of Planning and Investment (MPI) reported on March 26 that agro-forestry and fisheries obtained a growth rate of 2.24 percent, industries 4.95 percent, construction 4.79 percent, and services 5.65 percent.
In March alone, the industrial production index (IPI) rose 31.9 percent over the previous month and 5.6 percent against the same period last year. Overall, the three-month IPI saw an increase of 4.9 percent from a year ago.
Among industries, mining edged up 4.9 2.1 percent, manufacturing and processing 5.4 percent, power production and distribution 8.5 percent, and water supply and water waste treatment 9.5 percent.
In the first quarter, as many as 15,707 businesses were established with total registered capital of nearly VND80 trillion, a year-on-year decrease of 6.8 percent in the number of businesses and 16.1 percent in capital value.
MPI Deputy Minister Dang Huy Dong stressed that industrial production remains in a fix and businesses need stimulus packages to increase sales and reduce inventories.
Although commercial banks lowered interest rates to support business operations, many businesses still find it difficult to access preferential loans, he said.
Pham Xuan Hoe, a representative of the central bank, explained businesses’ bad debts and high inventories are hampering national economic recovery efforts and this matter cannot be solved overnight.
He said guarantee funds for small and medium-sized enterprises have been established, but they have yet to operate efficiently as expected in localities.
Banks will examine business evaluation reports thoroughly to make these funds more efficient, said Hoe.
To unfreeze the property market, Hoe proposed that the State Bank of Vietnam, the Ministry of Construction and the Ministry of Finance to formulate an inter-ministerial circular allowing asset mortgage in the future.
Representatives of the Ministry of Industry and Trade and the State Bank of Vietnam attributed Vietnam’s trade deficit to lack of support industries, forcing businesses to import large quantities of materials for production.
They asked localities to focus on developing support industries, considering this a long-term solution.
Electricity of Vietnam (EVN) representatives reported on power production, saying if power shortages occur during the upcoming dry season, EVN will mobilise high-cost fuel-run power sources for production and domestic use.
TPP facilitates Vietnam’s global integration
The Trans-Pacific Partnership (TPP) agreement will be an opportunity for Vietnam to continue deeply integrating into the global economy, said Mary Beth, Economic Counsellor of the US Embassy in Vietnam.
Vietnam, a member to TPP negotiations, has advantages on human resources and economic potential, she said at a workshop on TTP and its impact on Vietnam’s economy held by the Ministry of Industry and Trade and the US Agency of International Development (USAID) in Hanoi on March 26.
The agreement will open up a huge market for Vietnam to export more to TPP members, said Prof. Peter A.Petri from Brandeis University.
The country has to take part in negotiations of thorny issues such as origin norms, social matters relating to labour and environment, he added.
However, Vietnam will be the nation to enjoy the most benefits compared with others in terms of export-import performance, foreign direct investment flows and closer ties with international production chains, the professor stressed.
Ngo Chung Khanh, Deputy Head of the Ministry’s Multilateral Trade Policy Department, said the involved parties have conducted 16 official rounds of negotiations, adding that Vietnam has been actively participating in discussions on matters of multilateral concern.
The Vietnam Garment and Textile Group said the country’s garment exports to the US are expected to increase 12 to 13 percent from current 7 percent, bringing home US$30 billion a year when negotiations of the Trans-Pacific Partnership (TPP) are successfully concluded.
If the TPP is put into place, the US market will make up 55 percent of Vietnam’s total exports of garment and textiles instead of the current level of 49 percent, offering an opportunity for attracting investment to the apparel industry.
A representative of the Vietnam Chamber of Industry and Commerce said that Vietnamese enterprises hope to increase their exports, access to goods and materials at low prices and enhance the competitiveness of domestic service market.
There are currently 11 TPP members including Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam.
Japan’s Nidec reveals investment plan in Vietnam
Japan’s Nidec Corporation plans to expand its investment in Vietnam to US$1.5-2 billion from now to 2015, with a focus on manufacturing car spare parts and robots, Nidec Chairman Shigenobu Nagamori has said.
In an interview granted to Tuoi Tre (Youth) newspaper during his market research tour in Vietnam, Nagamori said Nidec is investing in 30 countries worldwide, and has established nine factories with a combined investment capital of US$800 million in Vietnam alone.
Nidec has designed plans to conduct product research and development — the phases which were once done in the US and Japan before going to producers, along with opening plants and workshops in Vietnam.
The research-development model has been used in the corporation’s plants in the Tan Thuan export processing zone and is being carried out in the Ho Chi Minh City Hi-tech Park, according to the Nidec executive.
However, he said, this model needs the Vietnamese government’s assistance in human resources training and preferential policies to become productive.
The executive spoke of the importance of recruiting excellent Vietnamese students to work for Nidec’s RD centres and hi-tech manufacturing plants in Vietnam.
He also talked about the development of the support industry in the future, mentioning the fact that his factories in Vietnam still import components and spare parts from China and Thailand.
The Nidec executive said his corporation shows special interest in the development of the support industry as an important factor in considering investment expansion in Vietnam.
Nidec’s upcoming strategy aims to enable Vietnamese businesses to produce all necessary spare parts of a product in the long run.
In the short run, it will be increasing Vietnamese businesses’ participation in the corporation’s production chain to 50 percent from the current 20 percent, according to Nagamori.
Nidec corporation’s nine companies in Vietnam are employing more than 20,000 workers and earn total revenue of US$800 million a year.
Five of the companies are located in the Saigon Hi-tech Park, namely Nidec Sankyo VN, Nidec VN Corporation, Nidec Servo VN, Nidec Copal VN and Nidec Seimitsu VN Corporation.
Vietnam, Holland cooperate in developing fruit and vegetables
The establishment of a Vietnam-Netherlands cooperation forum on fruit and vegetables was discussed at a round table conference in Hanoi on March 27.
Deputy Minister of Agriculture and Rural Development Vu Van Tam said that the establishment of the Vietnam-Netherlands cooperation forum is in line with the broader diplomatic policies of both parties, opening up new opportunities for partnerships in agriculture
Tam said Vietnam has natural conditions which are favourable for the production of a wide variety of fruit and vegetables to meet both domestic consumption and international demand. Currently, Vietnam is one of the world’s top-five nations in the export of fruit, vegetables.
However, the sector has not reached its full potential and needs further support from state agencies, businesses, and international organisations.
The Netherlands Minister for Economic Affairs, Agriculture and Innovation Hans Hoogreveen said that identifying the most lucrative fields for cooperation is a very important precursor to devising an approach method and building development strategies.
He expressed his wish that the private sector will play a leading role in the cooperation forum, which will focus not only on training, investment and processing, but also on sustainable development to cope with climate change.
At the seminar, Trinh Khac Quang, Director of the Vietnam Fruit and Vegetable Research Institute, made several proposals for new partnerships in research and development with the Netherlands.
Currently, Vietnam exports fruit and vegetables to nearly 40 nations and territories around the globe. The total export turnover of fruit and vegetables in 2012 reached over US$800 million, with the major product lines including cucumbers, tomatoes, carrots, onions and cabbages.
Both sides are expected to sign a cooperative agreement regarding fruit and vegetable trade and development on March 28.
Cuba, Vietnam cooperate in drug manufacturing
Vietnamese and Cuban officials discussed the possibility of strengthening drug manufacturing cooperation between the two countries at a workshop in Hanoi on March 27.
Doan Duy Khuong, Vice President of the Vietnam Chamber of Commerce and Industry (VCCI), noted that although Vietnam and Cuba established diplomatic relations more than 50 years ago, their trade and investment ties have yet to match the potential.
Last year’s two-way trade reached merely US$475 million, mostly from Vietnamese exports such as rice, chemicals, plastics, coal and garments.
Meanwhile, Cuban exports to Vietnam remained modest at US$6 million, half of which came from pharmaceutical exports. Its cancer, meningitis, and hepatitis B drugs have been widely used in Vietnam.
Cuba has invested US$6 million in a project in Vietnam, ranking 68th among foreign investors in the country. Vietnam has so far carried out two oil and gas projects in this Caribbean nation.
Cuban ambassador to Vietnam Fredesman Turro Gonzlez said that Cuba’s pharmaceutical industry has developed constantly over the years. It has invented a number of drugs that cannot be found anywhere else in the world. Many of the products are available in Vietnam.
He said the two countries are implementing joint projects to manufacture several pharmaceutical products in Vietnam in the form of technology transfer or other forms in agreement.
The diplomat expressed his belief that medicine manufacturing will be one of the most prospective areas for cooperation in bilateral economic and trade ties in the near future.
Khuong said VCCI will work closely with the Cuban Embassy, the Cuban Trade Office in Vietnam, Cuban trade promotion agencies and Cuban business communities to promote trade ties.
Vietnam Expo 2013 to take place in Hanoi
The 23rd Vietnam International Trade Fair will take place from April 10 to 13 at the Exhibition Fair Centre in Hanoi.
Vietnam Expo 2013, sponsored by the Ministry of Industry and Trade, is expected to feature 800 booths for companies from more than 20 countries and regions.
Numerous local companies like Petrol Vietnam, NhatLinh, Hapro, Bao Minh and Phu My Hung will also take part in the event.
The products and items displayed in the expo include machinery and electronic, beverages and textiles.
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.
Fertiliser companies urged to make new products
Deputy Prime Minister Hoang Trung Hai has urged the PetroVietnam Fertiliser and Chemicals Corporation (PVFC) and its Phu My Fertiliser plant to develop products which are in short supply in Vietnam in an effort to gradually ease the country’s reliance on imports.
At present, 24 percent of Vietnam’s fertilizers and other chemical products are still imported from other countries to meet local demand, Deputy PM Hai said at a ceremony to award the State’s Labour Order, first class to PVFC and Phu My fertiliser plant in Ho Chi Minh City on March 26.
He said PVFC should improve its competitiveness and corporate governance to efficiently deal with the increasingly fierce competition at home and abroad, especially when the country’s free trade agreements with regional and global partners are due to be signed.
Hai elaborated that Phu My fertiliser plant operating as scheduled has helped meet 40 percent of domestic nitrogenous fertiliser demand for agricultural production.
With its Phu My and Ca Mau fertilizer plants, the PVFC has to date supplied 70 percent of nitrogenous fertilisers to the market, helping stabilise domestic supply and ensure national food security, Hai said.
Since its establishment, the PVFC has churned out over 6 million tonnes of Phu My fertilizer.
It has also contributed more than 550 billion VND (26 million USD) to social welfare programmes and built over 16,000 houses for the poor and dozens of health care and educational facilities.
At present, 24 percent of Vietnam’s fertilizers and other chemical products are still imported from other countries to meet local demand, Deputy PM Hai said at a ceremony to award the State’s Labour Order, first class to PVFC and Phu My fertiliser plant in Ho Chi Minh City on March 26.
He said PVFC should improve its competitiveness and corporate governance to efficiently deal with the increasingly fierce competition at home and abroad, especially when the country’s free trade agreements with regional and global partners are due to be signed.
Hai elaborated that Phu My fertiliser plant operating as scheduled has helped meet 40 percent of domestic nitrogenous fertiliser demand for agricultural production.
With its Phu My and Ca Mau fertilizer plants, the PVFC has to date supplied 70 percent of nitrogenous fertilisers to the market, helping stabilise domestic supply and ensure national food security, Hai said.
Since its establishment, the PVFC has churned out over 6 million tonnes of Phu My fertilizer.
It has also contributed more than 550 billion VND (26 million USD) to social welfare programmes and built over 16,000 houses for the poor and dozens of health care and educational facilities.
Northwest, Central Highlands to call for investment
The State Bank of Vietnam and four other commercial banks will join hands with the Northwest and Central Highlands to promote investment in the regions.
It was announced at a press briefing in Hanoi on March 26 that the investment promotion conference for the Northwest will take place in Tuyen Quang province on April 3 and a similar conference for the Central Highlands in Gia Lai province on April 12.
At the briefing, Deputy Governor of the State Bank of Vietnam (SBV) Dao Minh Tu reported that BIDV, VietinBank, Vietcombank and Agribank will participate in calling for investment for these regions.
Around 20 trillion VND and 35 million USD are expected to be poured into the Northwest which comprises of 14 provinces, Tu added.
At this year’s conference for the Northwest, the third of its kind, specific cooperation models are expected to be set up in each sector and each area to fully utilise the entire region’s potential, said Deputy Head of the Northwest Steering Committee Le Kha Dau.
The Bank for Investment and Development of Vietnam (BIDV) plans to sign six credit agreements worth 3.4 trillion VND to sponsor the region’s paper, textile and apparel, farm produce, mineral exploitation and hydro power sectors.
In 2013-2015, BIDV pledged to provide 15 trillion VND on credits to promote economic development and around 90 billion VND for social welfare activities in the region.
In 2013 alone, VietinBank will pour 205 billion VND in the Northwest’s social welfare activities.
At the briefing, Deputy Head of the Central Highlands Steering Committee Tran Viet Hung said the conference will offer a chance for each locality in the Central Highlands to call for investment in its coffee, rubber and other key projects.
BIDV plans to sign contracts worth 7.3 trillion VND with businesses in the region while Agribank and coffee associations and businesses are expected to ink financing contracts at an estimated value of round 6 trillion VND.
VietinBank has committed to providing almost 40 billion VND for social welfare programmes in the region, whose position in terms of socio-economics, defence and security is important to the country.
The Central Highlands is home to five provinces, namely Kon Tum, Gia Lai, Dak Lak, Dak Nong and Lam Dong.
Exchanges experience slow movement
Shares opened low on the HCM exchange on the morning of March 27 but gradually improved with the benchmark VN–Index gaining 0.37 percent to close the day at 491.26 points.
Trading was sluggish, however, with nearly 39 million shares worth 757 billion VND (36 million USD) changing hands, down 17 percent in volume and 9 percent in value compared to the previous session.
Decliners edged advancers by 107 – 101 while the other 101 code closed flat.
Trading of shares of transport firm Gemadept (GMD) was the bright spot in the session, hitting its ceiling price for a third straight day, closing at 39,400 VND a share.
With over half of the shares in the VN30 closing flat, the VN30 was down 0.43 per cent two 554.83 points.
Tan Tao Investment-Industry (ITA) was again the most active code with 2.7 million shares changing hands, sliding 2.78 percent to 7,000 VND a share.
Meanwhile, the HNX-Index on the Hanoi Stock Exchange lost 0.38 percent to finish at 60.62 points on a total trading value of 247.2 billion VND (11.8 million USD).
Sai Gon – Hanoi Bank (SHB) is leading the northern market trades with over 6.9 million shares exchanged, closing flat at 6,700 VND a share.
Foreign investors remained net buyers on both exchanges, responsible for a combined net buy of 51.6 billion VND (2.5 million USD) worth of shares.-
Transport sector transforms fully for higher strength
The Ministry of Transport has set to restructure its wholly state owned enterprises completely in 2013 to make them highly competitive with better governance and operation in local and global competitions.
To that end, the enterprises in the sector are advised to gradually tackle the bad debts they still owed coupled with market development, according to instructions issued by Transport Minister Dinh La Thang at a meeting held by the ministry in Hanoi on March 27.
Minister Thang asked relevant agencies to assist the enterprises in removing hindrances so that the later can complete the assigned business duties, viewing the work as a precondition for restructuring and equitisation to be carried out to the maximum.
During this process, the target companies should conduct state audits in an open and transparent manner to build up trust and determination for those involved in the work, the minister added.
By the end of 2012, the ministry has 88 wholly State-owned enterprises. It completed the appraisal of and approval for the project on restructuring state corporations steered by the Prime Minister.
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR