BUSINESS IN BRIEF 15/6 Vietnamese products face stiff competition Although consumer confidence and trust in Made-in-Vietnam products is on the rise, Vietnamese businesses still face obstacles to sustainability and stiff competition from Chinese and Thai entrepreneurs, eager to encroach in the According to recent statistics released by the Central Steering Committee for the campaign “Vietnamese people give priority to using Vietnamese goods”, local products comprise roughly 80% to 90% of products stocking the local supermarket shelves. Additionally, 71% of Vietnamese consumers say they have faith in the high quality of Vietnamese supermarket products. However, the Ministry of Industry and Trade (MoIT) reports that sustainability for Vietnamese products is not assured and the import of Thai products is on the rise, ranking third in the local market just after Vietnamese and Chinese products. The Committee reports that Vietnamese products are also showing weakness in the electronics retail market as imports from Vu Thi Kim Hanh – President of the Business Association of High-Quality Vietnamese Goods, said that to more effectively compete, local businesses should renovate technologies and devise improved strategies on marketing, distribution and advertising. In particular, an improved strategy on the distribution of products is critically important, insuring that goods are distributed to remote areas throughout the country as well as the more populated urban areas, Hanh said. Deputy Minister of Industry and Trade Do Thang Hai stated that the Ministry has coordinated with relevant ministries and localities to implement improved forecasts of the market and prices of essential goods. However, to help Vietnamese products secure a solid foothold in the market, it is necessary to raise public awareness and Vietnamese producers should improve competitive edge, and cooperate with distributors to insure goods are effectively distributed throughout the country, Hai said. First-ever BPO development centre opens in Danang According to the Danang Today online, before the new centre began operating, its employees were sent to the GROP Company for training and internship. Its first project is to implement a customer information management system for one of the largest restaurant chains, with over 700 outlets, in In the near future, the centre aims to attract customers in The centre is expected to earn US$1 million in revenue by late 2015. BPO is an inevitable development trend in the era of globalisation. It is predicted to become one of the top technology trends because it is suitable for the wave of global labour division. Finland looks for new partnerships in Vietnam Deputy Director General for the Department of Asia and the The visit is also part of the framework of During the visit, Rotinen held official negotiations with the Ministry of Planning and Investment on Together with Ambassador of Finland to The topics of development cooperation and strengthened business ties are tightly intertwined, as the relationship between In the second phase of the development cooperation project Innovation Partnership Program (IPP), The fast development of WB approves US$500 million credit to The World Bank’s Board of Executive Directors recently approved a US$250 million credit to the Government of Vietnam, for the Second Economic Management and Competitiveness development policy operation (EMCC-2). The credit aims to support the Government’s economic management reforms to enhance the country’s competitiveness. The EMCC-2 is focused on strengthening financial sector governance and fiscal management for macroeconomic stability; enhancing public administration, SOE management, and public investment management for more transparency, efficiency and accountability in the public sector; as well as reforming tax and procurement policies and reducing administrative burdens to create a more enabling business environment. “This program supports reforms that should help address some of the binding constraints to private sector investment. Promoting a stronger role for the private sector in the economy is critical for In another development, the WB’s Board of Executive Directors also approved a US$250 million credit to fund the Results-Based National Urban Development Program in the Northern Mountains Region (RBNUDP-NM), using an innovative approach to financing that links funds directly to results. Seven cities in the “The growing urban centers in Cities participating in the Program will receive funds for specific measures to enhance their management capacity and for developing local infrastructure such as roads, bridges and drainage, as well as for upgrading low-income areas. The Ministry of Construction will coordinate and oversee the Program and provide technical assistance to the participating cities. Overall planning for southern economic zones announced The Ministry of Planning and Investment recently announced overall development plans for two southern economic zones through to 2020, which are focused on expanding key fields and boosting GDP growth. Under the plans, approved by Prime Minister Nguyen Tan Dung, the Southern Key Economic Zone is expected to lead localities throughout the country in broadening electronics and software production and a range of services, including trade, logistics, finance, telecommunications and tourism. These are expected to boost national socio-economic development. The zone targets GDP growth ranging from 8.5-9% in the 2016-2020 period. The industry-construction-service sectors will account for 95-96 percent of the GDP. The GDP per capita will reach US$3,900-4,000 by 2015 and over US$5,000 by 2020. The figure is expected to climb to US$12,200 by 2030. The zone groups Meanwhile, the Mekong Delta Economic Zone, constituted by Can Tho city and the three provinces of Ca Mau, An Giang and KienGiang, will be developed into a large-scale tourism and service centre in At the announcement ceremony, Deputy Minister Dang Huy Dong required the aforementioned localities to work more closely with ministries, agencies and research institutes to specify the investment in key fields and utilise policies and mechanisms in realising the goals in a flexible manner. Ministries and agencies should direct the localities to step up their key programmes and projects, particularly traffic and irrigation systems and those designed to cope with climate change, the official added. Rice exports to China up in volume, value Vietnamese rice exports to The price of rice also rose 4.4%, hovering around US$456.19 per tonne on average. The Vietnam Food Association (VFA) forecasts A group representative announced that Interbank payments between Vietnam and Russia hit more than US$4 billion in 2013 and more than US$1 billion in the first quarter of this year. Studies show that accelerating the settlements of payments has a positive impact on gross domestic product of a country, the representative said. At the meeting, Deputy Governor of State Bank of Vietnam Le Minh Hung and Deputy Governor of the Central Bank of Russia Skobelkin Dmitry exchanged views on the operation of the two countries’ banking system and the implementation of reached agreements. The Russian side was committed to encouraging its commercial banks to use available tools for boosting bilateral payment, especially national currency and retail payment methods. The two central banks will increase information exchange on related policies, particularly the development of the Russian payment system and experience in using local currency in payment with They pledged to cooperate in developing infrastructure for credit payment links, building Vietnam-Russia information gateway, using national currency in payment and encouraging commercial banks to accelerate payments through accounts, credit and money transfer. The two sides signed the minutes of the meeting and agreed to hold the following session in Samsung invests over US$1 billion in Vice Chairman of the municipal People’s Committee Le Manh Ha said the decision by Samsung to proceed with the project is a strong signal that investor confidence remains unaffected by recent social disorder, which sprung out of the It demonstrates investors’ continued faith and trust in the city’s effort to accelerate administrative reforms, simplify investment procedures and offer incentives to facilitate foreign businesses operating in the city. Regarding the social disorder earlier in May, a number of workers and people demonstrated against A handful of extremists took the occasion to violate the law and vandalize some foreign direct investment (FDI) businesses, causing property damage and loss of profits as business had to temporarily shutdown. The city timely responded to the incidents, directed forces to take control of the situation, restoring law and order enabling the business to resume full-unimpeded operations. Samsung’s investment in the electronic factory is in line with the city’s guidelines encouraging investment in high-tech products so the city will soon complete procedures, clearing the pathway for the Samsung to proceed, Ha affirmed. In 2009, Samsung Group inaugurated a US$2.5 billion factory in Bac Ninh province manufacturing mobile phones. In March 2013, it started construction of a second high-tech complex in Thai Nguyen on 100ha at a cost of US$2 billion. Once completion, the factory will produce and assemble mobile phones and other hi-tech products. Vietnam endorses investment protection agreement with Palestine The Government has approved an agreement on reciprocal investment promotion and protection between Under a resolution dated June 5, the government asked the Ministry of Foreign Affairs to complete external procedures and inform relevant agencies of the effective date of the agreement. The agreement was signed in The document helps create sound legal foundations for the two business communities to expand investment, stimulate business innovations, generate jobs, and bring quality products for their consumers. The two business circles will have the chance to share investment experience in the areas of their strength. A new study on Crowded Level of retail markets in the Asia-Pacific region by commercial real estate firm CB Richard Ellis, showed that The study also revealed that This is the third consecutive year that The firm said retailers overall have been focusing on more mature markets that already have a strong retail footprint. Only one of 19 global cities – There were 18 mature retail cities on the list in 2013 as compared to 14 in 2012. The firm defined mature retail cities as those with 25% or more of the 334 retailers that CBRE tracks. Hong Kong group set to further investment in Binh Duong Hong Kong’s Esquel Group - one of the world’s leading producers of premium cotton shirts – plans to expand investment and production in the southern Esquel CEO and chairwoman Marjorie Yang revealed the information during a meeting with Chairman of the provincial People’s Committee Le Thanh Cung last week, during which she also expressed her hope that the local authorities will work harder to ensure the legitimate interests for investors operating in the locality. According to Yang, Esquel opened three plants in For his part, Cung pledged to create favourable conditions for Esquel to foster its production and investment, vowing to ensure public order and safety for the businesses. In March this year, Esquel inaugurated its third garment factory in Hoa Binh province, which is expected to produce about 7 million shirts for export a year. Apart from The group now earns more than US$200 million each year from exports produced at its factories in Pilot programme increases agriculture connectivity A pilot programme will aim at financing connectivity models between businesses and farmers in order to promote high-technology application in agricultural production and exports. The State Bank of Vietnam (SBV), the Ministry of Agriculture and Rural Development and the Ministry of Science and Technology are considering cooperation on the pilot programme. Director of the Credit Department under the SBV Nguyen Viet Manh stated that there have been many agricultural production models promoting connectivity between businesses and farmers across the country. A number of these models have proved to be successful, including the large-scale rice field model in the Mekong Delta province of An Giang and some other localities, the high-tech vegetable and flower cultivation model in the Central Highlands province of Lam Dong and the dairy farming and milk product production model in Nghia Dan in the central province of Nghe An. Using these models, businesses have not only created large-scale rice fields and mechanised agricultural production, but also had stable raw material production areas and constructed trademarks and geographical indications for their products in both domestic and foreign markets. The models benefited both farmers and businesses. At a government's regular meeting in February this year, SBV Governor Nguyen Van Binh suggested the construction of a credit programme for connectivity models and high-technology applications and farm export promotion projects. The SBV, the Ministry of Science and Technology and the Ministry of Agriculture and Rural Development are working together to survey, research and construct experimental policies for a large-scale application of this pilot credit programme. According to Manh, the pilot credit programme will reduce the input costs of the products of the connectivity models by offering preferential credit for the models. The programme could provide unsecured loans for businesses and farmers as members of a connectivity model. With this pilot programme, the banking sector can not only increase credit growth related to agricultural production but also promote large-scale, competitive agricultural production, contributing to gradually improving farmers' living standards and constructing and developing new rural areas. Manh reported that about 20 connectivity models would be selected as the pilot credit programme's beneficiaries. These include the large-scale rice field model, the product value chain-based connectivity model and the high-technology application business model, among others, with priority given to rice, seafood, livestock breeding, vegetables and fruits. Two years after the completion of the pilot credit programme, the SBV will consider policy improvements and multiplication of the models. Manh added that agricultural insurance policies, farm produce planning and its management, farm export promotion and law-based assistance and market information are important for the success of the pilot credit programme. Dung Quat EZ calls for investment worth US$2 billion The Dung Quat Economic Zone (EZ) in the central Pham Nhu So, vice chairman of the Quang Ngai provincial People’s Committee, who is also head of the management board of the EZ, says that the EZ will have licensed 125 projects worth US$10 billion by 2015 and another 40-50 projects capitalized at US$4-5 billion by 2020. From 2011-2014, the management board has received more than VND781 billion from the state budget for infrastructure construction to attract investors. In the reviewed period, it has granted investment licenses to 21 projects totaling over VND15,000 billion (roughly US$730 million), and Quang Ngai is one of the leading investment attractor in the central region. So far, Dung Quat EZ has approved 113 projects with total registered investment capital of more than US$8 billion. To lure more investment, the zone is advised to further improve its investment environment by upgrading infrastructure and timely addressing investor concerns. Timber exports to hit US$10 bln by 2020 Wood and timber product exports are expected to hit US$10 billion by 2020, according to an action plan for developing the wood market, approved by the Ministry of Agriculture and Rural Development (MARD). Nguyen Ton Quyen, General Secretary of the Vietnam Timber and Forest Products Association (Vietfores), believes Vietfores will beat this goal, reasoning that the Wood and timber product exports are now fifth among the ten main export industries of Ministry of Industry and Trade statistics show that wood and wood product export earnings reached US$2.42 billion in the first five months of this year, a 17.5% rise compared to the same period last year. The US, Japan and China are Vietnam’s largest consumers of this kind of commodity, making up 66.16% of total export value, with growth rates of 25.58%, 16.96% and 28.78% respectively. Over US$200 mln invested in VSIP Quang Ngai The Quang Ngai-based Vietnam-Singapore Industrial Park (VSIP) has attracted 8 FDI projects capitalized at US$200 million in total since it got off the ground nine months ago. These projects focus on food processing, garment making, and footwear manufacturing, with some having quite high investments. A case in point, the Among the 8 projects, three plants specializing in footwear, garments and food, are under construction and due to be put into operation this September, creating 5,000 jobs for labourers. VSIP Quang Ngai has set a target of generating 20,000 jobs for local people in central As planned, VSIP Quang Ngai is divided into two areas: one for production covering approximately 600 hectares in expanded Dung Quat Economic Zone, and the other for urban and services centres covering more than 600 hectares along the Tra Khuc River. VSIP Quang Ngai is the fifth Vietnam-Singapore industrial park built in Taiwanese investor Chung Jye invests in Hai Duong The The US$13 million shoe factory project will cover nearly 77,757 square metres in Kim Thanh district. Once finished, the factory is expected to produce around 3.6 million products a year and generate jobs for 2,500 local labourers. According to provincial officials, Hai Duong is sparing no effort in collaborating with ministries and agencies in investment promotion activities to lure funding from multinational and trans-national groups. Various incentives have been given to underway foreign-invested projects, while the province has eased difficulties facing the developments and built investor trust in the local business climate. The province has further boosted its administrative reforms by simplifying regulations across a wide range of fields, including investment, construction, land use, import-export, labour management and environmental issues. It has worked closely with relevant agencies and other stakeholders to ensure security and safety for foreign investors in the locality. Since the beginning of this year, Hai Duong has lured newly registered and additional investment of US$319.4 million from 15 FDI projects, up 116% year-on-year in value. The locality now has 264 FDI projects invested by 23 countries and territories with a total capital of more than US$6.1 billion, of which US$2.7 billion has been disbursed. ASEAN Exchanges have introduced an expanded FTSE ASEAN index series which will include Vietnamese stocks for the first time, in a bid to provide a comprehensive suite of indices covering the growing ASEAN equity market. ASEAN Exchanges said the creation of broader benchmark indices, meaningful sector indices and new ASEAN centric products would generate more ASEAN-based opportunities for investors and increase liquidity flows between exchanges. The three new tradable ASEAN indices are the FTSE ASEAN All-Share Index, FTSE ASEAN Stars Index and FTSE ASEAN All Share Ex-Developed Index. The FTSE ASEAN All-Share Index represents the performance of large, mid and small cap ASEAN companies. The FTSE ASEAN Stars Index comprises the 30 most salient companies of each ASEAN country as ranked by market capitalisation and liquidity, with the exception of The existing FTSE/ASEAN 40 Index, which reflects the performance of the largest companies in the ASEAN market, will continue to be calculated as part of the series. All the indices are free-float adjusted and calculated in accordance with the Industry Classification Benchmark (ICB). BIDV branch in The Bank for Investment and Development of Vietnam (BIDV) recently signed a deal with Yagoon-based Small and Medium Industrial Bank (SMIDB), paving the way for the establishment of a BIDV branch in With this agreement, BIDV and SMIDB will be fellow partners ensuring long-term and unshakeable cooperation through close supports in order to promote each side’s strengths and potentials in such fields as information exchange, service development, monetary and foreign exchange. In addition, the two sides will regularly meet to explore opportunities for enhanced cooperation in other areas. BIDV will support SMIDB in information technology application, career consulting, training and surveys in BIDV CEO Tran Bac Ha said that the agreement will help BIDV establish firm relations with Samsung launches Enterprise Experience Centre in Hanoi Samsung Electronics Co opened a centre in The centre, the first of its kind in Utilizing the services of the centre, customers can access over 200 of the latest high-tech products such as LED lighting, air conditioners, digital screen, mobile devices and printers in researching and solving business problems. The centre also will enable users to learn and share in advanced technological knowledge and experiences, including Samsung’s school education and training programmes. In June and July this year, Samsung plans to open four more centres in Japanese businesses invited to purchase Vietnam NPLs The State Bank of Vietnam (SBV) governor Nguyen Van Binh has expressed hope that the Japan Financial Services Agency (JFSA) will encourage Japanese businesses to purchase Binh made the proposal at a working session in The Vietnam Asset Management Company (VAMC), an arm of SBV, was set up last July to acquire NPLs from commercial banks, providing much needed capital to enable the banks to lend again. This is part of the central bank’s efforts to overhaul Vietnamese lending institutions and spur economic growth. VAMC is developing a roadmap for selling loans it has purchased in recent times. However, incomplete legislation prevents the company selling loans to its partners. According to a recent draft circular of the Ministry of Justice, the VAMC is only allowed to sell the assured debts worth less than VND10 billion to financial institutions. If the circular is approved, it would cause extreme difficulties for VAMC in solving NPLs. On June 6, SBV and JFSA signed a cooperation document under which the latter will provide experts for SBV’s technical assistance projects. JFSA has invited JW Marriott Hanoi wins Asia-Pacific Property Award JW Marriott Hanoi, a leading five-star hotel, has received top honors for excellence in the Asia-Pacific Property Award Winners 2014-2015, the world’s most prestigious real estate industry accolades. The hotel was selected overall best in the Asia-Pacific region for new hotel construction and design, voted on by 70 of the world’s leading experts. JW Marriott Hanoi hotel was inaugurated in the third quarter of 2013. It has total investment capital of US$250 million. It is designed with nine storeys and 450 rooms and is one of the largest hotels in the capital city. The hotel offers 2,400 square meters for workshop space, including two Ballrooms, a studio area for senior events and major forums, as well as space to organize outdoor events with a chain of Europe-Asia restaurants, healthcare area and facilities meeting five-star standards. Ministry facilitates exports to Africa The Ministry of Industry and Trade (MoIT) will continue to provide domestic companies with latest trade information about potential markets in This will help the firms accelerate their exports to the continent, the ministry's Africa, The ministry will also join hands with commercial banks both in Cooperation with Vietnamese Commercial Offices in the region, in introducing business opportunities and prestigious customers to Vietnamese companies will also be included. Statistics from the General Department of Customs showed that Vietnamese exports to most large markets in During the reviewed period, Three other markets with high growth rates include Conversely, export turnover to some markets declined sharply. Exports to Experts have urged Vietnamese businesses to be proactive in overcoming obstacles such as geographic distance, high transport costs, trading through intermediaries and language barriers. They suggest that in the future, firms should boost shipments of high-value electronics, electric devices, household goods and consumer items. Shipment of foodstuffs, canned foods, and mechanical and plastics products besides traditional items should also be increased. HCMC seeks to ease business difficulties Businesses in The proposal was made at a meeting on June 9 between Currently, HCM City-based businesses import machinery, equipment, spare parts, garment accessories, footwear and pesticides from Since the beginning of this year, To reduce dependence on the Chinese market, local enterprises are gradually diversifying import-export markets. Businesses are keen to be proactive in finding sources of materials for production to replace those Chinese imports which are inefficient on fuel and require intensive labour. City leaders said that they would monitor the situation closely to assist businesses in capital, market access, tax policy and customs services. Vietcombank makes Forbes Forbes Surpassing other large commercial banks, the Bank for Foreign Trade of Vietnam has become the only representative in the Forbes list for two years in a row. On the list are companies that have outstanding performance, hold key positions in the market, and bring great benefits for investors. As of April 25, 2014, total market capitalisation of these 50 companies reached VND741 trillion, accounting for 65% of the combined capital of the HCM City Stock Exchange (HOSE) and Hanoi Stock Exchange (HNX). Forbes With revenue of VND31,040 billion, Forbes holds that Vietcombank is known for its increased trust amongst businesses, international payment and trade, and it plans to get the lion’s share of the domestic retail market. Vietcombank has been recognised as the “Best Retail Bank in Vietnam 2014” by the Asian Banker magazine, with an awards ceremony held in Forbes magazine (USA) launched the Vietnamese version in June 2013- its 29th edition published worldwide, and is considered the new reference point for entrepreneurs beginning careers in Vietnam, as well as sharing lessons and experiences for Vietnamese businesses to reach out to the world. Japanese enterprises eye A number of Japanese companies will attend two exhibitions on machinery and technology for support industries, at the The Vietnam Manufacturing Expo 2014 (VME) and “Industrial Components and Subcontracting (ICS) Vietnam 2014 are seen as the most important manufacturing industry events. Masato Hayashi, Head of Business Office of Hitachi Cable Company He added that the company has also spent time studying the Vietnamese government’s policy and even culture. According to Seiji Masuda, general director of Sanko Fastem company, “We are the largest anchor bolts manufacturer in “The exhibition is an effective marketing tool for us. Moreover, it provides a golden opportunity for us to explain and offer guidance to Vietnamese customers using the product”, he added. There are 520 Japanese invested projects operating in However, Japanese investors say Pangasius exports to reach US$1.6 bln in 2014 The export value of Tra fish (Pangasius) is expected to fetch US$1.6 billion by the end of this year, falling by 5% compared with 2013. According to the Ministry of Agriculture and Rural Development (MARD), in the first five months of this year, the Mekong River Delta set aside 2,954 hectares for Pangasius farming, down 19% from a year ago. Local farmers have caught 335,023 tonnes on 1,487ha, a year-on-year decrease of 20% in output. Between January-April 2014, Tra fish businesses earned US$546 million from exports, an increase of 2% compared to the same period last year. Several markets experiencing high growth of Pangasius imports include Brazil-36.7%, Mexico-13%, ASEAN countries-11% and China-25%. In contrast, the EU and Due to shrinking markets, the price of Pangasius is currently decreasing to VND22,000-23,000 per kilogram. Vietnam-Turkey trade up 38.2% Vietnam Customs statistics show that two-way trade between Of the total, Telephone handsets and components topped the list of export commodities to Other products with high growth included garments and textile, computers, electronics and components, machinery, equipment and tools, rubber, footwear, and wood and timber products. Recently, telephone handsets and components surpassed textile to rank first on the list of exported products, helping drive up export growth and bilateral trade value. In the reviewed period, Other imported products experiencing high growth were machinery, equipment and tools, pharmaceuticals, ore and other minerals, chemical products and plastic products. Exports to Spanish Ambassador to Vietnam Alfonso Tena Garcia has said enterprises from his country are satisfied with their business in He also said that Two-way trade between the two countries surmounted a record EUR2.16 billion (US$2.98 billion) last year, with a rise in exports from both sides. Foreign investment helps revive housing market Liberal policies and incentives from the Government and huge foreign investment are gradually pulling the property market out of its long slump. Phan Thanh Huy, General Director of developer Novaland, said in the first four months of 2014 his company sold some 2,300 apartments in three projects in These include 1,600 in Huy said these projects sold well despite the stagnancy in the housing market because of their "good prices" and prime locations. A spokesperson for the National Housing Organisation Company (NHO) said the Korean company would soon invest over VND20 trillion (US$950 million) in 14 property projects in Hanoi, Hue, Quang Ngai, Danang, Ho Chi Minh City, and An Giang. NHO will invest some VND4 trillion (US$188.67 million) in a 79ha residential complex in Ho Chi Minh City's Binh Chanh district and develop its 51ha An Phu Sinh Residential Complex in Quang Ngai into one of the best in the central region. The NHO management has said that the US$950 million investment will fulfill the company's commitment to the Ministry of Construction to sell some 100,000 apartments in the next decade. Property services firm CBRE said the Vietnamese housing market is attracting the attention of foreign investors. In 2013 FDI in the sector amounted to around US$1 billion. This year it ranks only behind the manufacturing sector in terms of investment. The biggest foreign-invested property projects this year include a US$200 million residential complex in Ho Chi Minh City's Binh Thanh district to be built by Sunwah Vietnam, a US$2.5 billion resort complex in Vung Ro, Phu Yen province, by US developer Rose Rock and Vung Ro Oil and Gas Co Ltd, and the US$300 million Alma Resort in Khanh Hoa province. The latest report on the housing market from the construction ministry confirms that the market is rebounding with the number of properties traded in both In Cambodian market lures Vietnamese investors Vietnamese enterprises are running 128 valid investment projects in Agro-fishery projects account for 50.58% of the funding, energy 27.05%, banking-finance and insurance 8.7%, and telecommunications 5.1%. The investment climate in Additionally, investors in The Cambodian Government has planned to lure investment inflow in its agriculture, infrastructure, banking, and telecommunications sectors. Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR |
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