VIETNAM - BUSINESS IN BRIEF 17/12

by lexie Sat Dec 17, 2011 2:49 pm

Last update 17/12/2011 07:00:00 AM (GMT+7)

BUSINESS IN BRIEF 17/12

The French Development Agency (AFD) may consider offering direct loans for Vietnam instead of giving technical assistance capital, said Yves Guicquéro, deputy resident manager of AFD in Asia.

At a meeting with HCMC Vice Chairwoman Nguyen Thi Hong on Monday, Guicquéro said AFD had provided some 30 million euros as development aid for Vietnam in the last five years and the French government was considering further supply of 20 million euros. The meeting was also attended by Jean-Marc Gravellini, general director of AFD in Vietnam.

According to Vice Chairwoman Hong, gratis aid given by AFD to HCMC has been efficiently used for healthcare, education, social housing and the environment.

Regarding the direct lending, Hong called for AFD participation in two projects, namely the irrigation project on the right bank of the Saigon River and the municipal metro line No. 5.

In response, Guicquéro said the irrigation project had been put in the capital registration list and will receive the fund by 2013.

HCMC youth spend big to buy Christmas spirit

Despite rising prices of Christmas decorations compared to last year, many young people in Ho Chi Minh City, which leads the country in income per capita, do not hesitate to spend millions of dong buying the festive atmosphere of the season.

On streets like Vo Thi Sau and Hai Ba Trung in District 3, and supermarkets around the city, many young shoppers purchase small decorative items like Santa Claus figurines, Christmas balls, garlands, or ribbons.

Hoang Minh Thu, a 12th grader, said it was her third trip to a shop for Christmas goods. This year, her parents are letting her invite friends over to her house, and she wants to decorate her own room to welcome everyone.

“The more I buy, the more I realize there are things I am still missing. Hopefully this is the last time I have to shop,” Thu said.

Thu spent more than VND400,000 (US$20) that evening, and almost VND1 million ($50) the two previous times.

“It costs a lot, but my parents approve. It is my last year in high school so I’m taking this opportunity to decorate a little. As New Year’s approaches, I will be busy with studies,” she explained.

Many shoppers put a number of items into their cart and are surprised by how much they cost once they reach the cashier. Nonetheless, most of them do not return the goods, but instead choose to pay for them all.

Having shopped for the same items before several previous Christmases, Khai said the products are more expensive this year.

“The cheapest are tens of thousands dong, and it is quite a lot when everything is added up. It is hard to find items worth less than VND10,000 (US 50 cents). If there are any, they are usually ugly,” he said.

This year, small items like colorful Christmas balls and figurines cost around VND30,000-70,000 ($ 1.5-3.5). Greetings cards start at VND10,000, and Christmas gifts are even more expensive.

“I have a habit of giving gifts on Christmas, so I have to spend. I need five presents, which usually cost me around VND50,000 ($2.5). But after going to the shops this year, I found that I need to pay double to get beautiful presents,” said Ha Linh, who lives in District 2.

Christmas is also an opportunity for young people to buy costumes, shoes, and scarves to wear when they hang out at night. Many have spent millions of dong to create sparkling looks for this festive day.

“Previously, Christmas ornaments were targeted at families, but now youngsters account for a majority of our customers. Their parents may be cutting down on their budget, but they love to spend as long as they like. Thanks to them, my shop can sell a lot of items. There was one customer who spent VND3 million ($150) to buy stuff to decorate a room,” revealed a shop owner on Vo Thi Sau street.

Legal climate for green economy needed

Deputy PM Nguyen Thien Nhan has stressed the need to create a favourable legal environment as well as mechanisms and policies to foster green economic growth in Vietnam.

Nhan made the suggestion at a forum, entitled “Green economy in the context of sustainable development in Vietnam ,” which was held in Hanoi on Dec. 13 by the Ministry of Planning and Investment.

The deputy PM said green economy is a new model, which helps ensure social security and environmental protection, while increasing energy renewal and efficiency.

Meanwhile, Setsuko Yamazak, UNDP Country Director in Vietnam , said a green growth strategy will enable Vietnam to mobilise public and private financial sources and renovate technology, especially within the framework of international agreements and climate change.

UNDP is willing to assist Vietnam in improving the quality of growth, restructuring the economy, protecting the environment and restoring natural resources, the official said.

Delegates to the forum also emphasised the necessity to shift to a green economy and introduced the viewpoints and green economic development models in the world.

They also pointed about difficulties and put forward solutions in terms of policy to help Vietnam build a green economy in the context of sustainable development.

The delegates held that strengthening international cooperation on climate change will help enhance energy efficiency, promote the use of renewable energy, and reduce water and air pollution.

Three possible trends for bank restructuring: newspaper

With the first bank merger successfully carried out earlier this month, Sai Gon Tiep Thi newspaper analyzes three possible trends for other changes to be made under the State Bank of Vietnam’s restructuring plan.

On December 6, Ficombank, TinNghiaBank and Saigon Commercial Bank (SCB) became the first three banks to be merged, as the central bank began to implement its banking reform plan.

The successful merger will lay the ground for the State Bank of Vietnam to fortify their plan on restructuring the banking system next year, which would likely unfold one of the following three possible scenarios.

First, banks that have the same owners and are governed by the same major shareholders can merge with each other to become one single bank.

One typical example for this is the case of Nam Viet Bank and Western Bank, both of which have most of their stakes held by Dang Thanh Tam, either directly or indirectly via the Saigon Invest Group, which Tam is chairing.

Second, small banks whose controlling interest held by a larger bank or the board members of a larger bank will tend to merge with that large bank to solve the liquidity problem.

For instance, Asia Commerce Bank is currently the majority shareholder of certain banks such as Kien Long Bank, Dai A Bank and VietBank.

In the last scenario, small banks will be acquired by other credit institutions that assume their controlling interests. These outsiders will restructure the banks’ operation, pumping more capital to help them overcome difficulties and have healthier operation.

To do this, banks will increase their capital by issuing stakes for new shareholders, which has been observed in the case of Gia Dinh Bank, which has recently been renamed Ban Viet Bank.

Meanwhile, majority shareholders of such banks can also divest and sell their stakes to outside holders.

This last trend is likely to be strong in the next five years, as many state-run enterprises are asked to divest from non-core businesses, including the finance and banking sectors, to concentrate on their core sectors.

Examples for this trend are the Petrolimex Bank, whose 40 percent stake held by the state-run fuel wholesaler Petrolimex; the Ocean Bank, where PetroVietnam holds a 20 percent stake; An Binh Bank, with 24 percent shares held by the Vietnam Electricity Group (EVN); and Saigon Hanoi Bank, where both of the Vietnam National Coal and Mineral Industries Group and the Vietnam National Rubber Corporation hold a 15 percent stake.

In related news, the newly bank that emerged from the merger of SCB, Ficombank, and TinNghiaBank yesterday told investors in Ho Chi Minh City that they will fund three major real-estate projects in the city -- the Times Square, Royal Garden, and the Saigon Peninsula projects, all located at the prime positions of the city.

Of these, the $125-million Times Square project is now seeing its decoration completed, and expected to reach completion by 2012, while construction of the other two is in the preparation process.

Le Hoang Chau, chairman of the HCMC Real Estate Association, said the newly-merged bank is the projects’ largest sponsor.

Doctor Lee George Lam, chairman of Macquarie Capital Indochina and chairman of the consultant board of the three banks, promised that he will assist the new bank.

Vegetable and fruit exports hit US$600 million

Vietnam is expected to earn US$600 million from vegetable and fruit exports and become the fifth largest exporter in Asia.

The figure was released at an international conference on Vietnamese tropical vegetables and fruit in Ho Chi Minh City on December 14.

The Vice Chairman of the Vietnam Vegetable and Fruit Association (VVFA) Huynh Quang Dau, said by the end of October the country’s vegetable and fruit export earnings reached US$515 million, an increase of 40.6 percent from a year earlier and much higher than the yearly target for US$470 million.

A large volume of dragon fruit, star apple, mangosteen, longan, and litchi was shipped to many Asian and European countries.

Vegetable and fruit exports to Japan alone hit more than US$51.2 million, up 21 percent compared to the same period last year.

Doan Xuan Hoa, an official of the Ministry of Agriculture and Rural Development said there will be a growing demand for agricultural products from now into next year as the adverse weather in many countries, including the US, Germany and Pakistan, has caused a shortfall in supply.

Spring fair 2012 to open in Hanoi

2012 Spring Fair will take place at the Giang Vo Exhibition and Fair Centre in Hanoi from January 12-21.

Businesses will put up nearly 1,000 stands, showcasing essential products and specialities from all over the country.

The fair co-organised by the Ministry of Culture, Sports and Tourism and the Hanoi People’s Committee will provide a good chance for domestic businesses to introduce their products with the aim of encouraging the Vietnamese people to use Vietnamese products and boosting exports to foreign markets.

Vietnam's PVI Holdings sees 2012 gross profit up 55.6 pct: report

Vietnam's PVI Holdings has projected its gross profit next year will jump 55.6 percent from 2011 to 700 billion dong (US$33.3 million), a local newspaper reported on Wednesday.

Its gross profit would hit 450 billion dong this year, exceeding its annual target by 7 percent, Chief Executive Officer Bui Van Thuan was quoted in the magazine Dau Tu Chung Khoan as saying.

The higher profit next year is projected as revenue is expected to rise by a quarter to 6.5 trillion dong from 5.2 trillion dong expected this year, Thuan was quoted as saying.

The projected 55.6-percent rise in profit next year is faster than this year's profit growth of 34 percent, as PVI Holdings expects to boost its core business in the insurance sector and expand coverage to overseas markets, the report said.

PVI shares were trading down 1.66 percent at 17,800 dong apiece at 0310 GMT on Wednesday.

PVI Holdings, a Hanoi-listed subsidiary of state oil and gas group Petrovietnam, is 25 percent owned by a subsidiary of Germany's third-biggest insurer, Talanx.

Formerly known as Petrovietnam Insurance Joint-Stock Corporation, the company was restructured in June to form PVI Holdings, which included its non-life insurance business as a subsidiary.

Oman Investment Fund owns 12.6 percent in PVI Holdings, which holds a monopoly on Vietnam's energy insurance market.

The group has a 25 percent share of the country's non-life insurance market, providing risk coverage and insurance for property in the energy and maritime sectors. ($1=21,018 dong)

Local mobile operators set prices for iPhone 4S

On Tuesday Vinaphone and Viettel announced the price for international versions of the iPhone 4S, starting from VND15.6 million (US$750).

Vinaphone will sell versions of the iPhone at VND15.6 million ($750), VND18 million ($860), and VND20.5 million ($984) for 16GB, 32GB and 64GB models, respectively.

Subscribers to this provider will receive discounts of up to 43 percent off the original price.

Meanwhile, Viettel will charge VND16.4 million ($787), VND18.9 million ($907) and VND 21 million ($1008) for the same iPhone models.

This price range is VND500,000-900,000 more than Vinaphone’s offer.

However, Viettel said that those who only buy a phone will receive a monthly plan consisting of a 300MB data package within 12 months. Their subscribers will also receive service promotions worth VND1.89-12.96 million ($90-622).

The iPhone 4S goes on sale in Vietnam on December 16.

Five key solutions for industrial development

Vietnam has achieved a rather high industrial growth in recent years but the quality of industrial development need to be further improved, according to the United Nations Industrial Development Organization (UNIDO).

Vietnam has industrial development policies, many of which have proved ineffective as trade performance still depends a lot on imports and domestic technologies are limited.

The Vietnam Industrial Competitiveness Report 2011 (VICR 2011) refers to the two elements in connection with industrial competitiveness - namely the role of trade liberalization in economic restructuring and production, and the need for industrial policies and strategies which take into account national priorities as well as global advantages and disadvantages.

From 2005-2009, Vietnam has made great strides in improving its industrial competitiveness, jumping 14 notches in four years to overtake big rivals such as Egypt, Morocco and Russia.

VICR 2011 says the nation’s export growth in manufactured products was strong enough to overshadow China’s in the 2000-2009 period.

Manufacturing value added (MVA) growth increased from US$5.8 billion in 2000 to US$15.4 billion in 2009 thanks to the strong links between industrialization and economic development.

According to VICR 2011, industrial competitiveness shows the capacity of nations through strong industrial presence in both domestic and international markets and development of industrial structures based on higher technological added value.

Industrial development in each nation depends on the business environment, labour efficiency, technology, finance, input, infrastructure and the quality of training support and technological services.

UNIDO points that despite achieving remarkable progress in industrial development, Vietnam’s industrial competitiveness index is still lower than other countries (15 notches lower than Indonesia and 25 notches lower than the Philippines).

Since 1995, Vietnam has devised 80 development strategies and plans for independent industrial sectors. However, the country has failed to come up with a master plan to carry out these strategies effectively.

UNIDO Managing Director Wilfried Luetkenhorst says industrial competitiveness does not depend totally on a nation’s reserve of natural resources and low- tech manufacturing areas. So, Vietnam needs to develop products from renewable natural resources and consider industry a core factor in its economic growth.

Judging from Vietnam’s industrial environment, VICR 2011 proposes five key solutions to the country’s industrial development in the future.

First, remaking industrial policies and strategies: There should be an industrial code serving as a legal foundation for issuing legal documents on industrial development. It is essential to adopt specific policies for small and medium-sized and State-owned enterprises.

Second, diversifying industrial sectors with products of high added value: Priority should be given to developing potential areas in order to create more jobs and upgrade technological standards.

Third, developing human resources for the manufacturing industry: It is essential to build an education and training system in charge of improving professional skills and quality of the workforce.

Fourth, developing technologies: It is imperative to limit import surplus of high-tech products. The Government and private sectors need to coordinate in renovating national technologies.

Fifth, attracting foreign direct investment (FDI) for production: FDI structure should be focused on the balance of trade to lessen dependence on imports.

Tra Vinh attracts nine foreign-invested projects

The southern province of Tra Vinh has attracted nine foreign-invested projects worth VND466 billion.

These are listed among 12 projects with a total capitalization of more than VND510 billion in a cluster of industrial and economic zones.

In recent years, the province has adopted preferential procedures to improve the investment environment including granting income tax exemption in 2-7 years to businesses, providing financial support for labourers to take vocational training, and assisting foreign-invested businesses in licence application.

Footwear exports to reach US$6 billion

Vietnam is expected to earn US$6 billion from its footwear exports by the end of the year, according to the Ministry of Industry and Trade.

By far it has already fetched US$5.11 billion, an increase of 25.8 percent from a year earlier.

Footwear is just after garment and textiles, and crude oil in terms of export earnings for the country.

However, Vietnam’s footwear exports to the European Union (EU) are showing signs of declining due to the impact of economic downturn in the region.

Firms think outside the square

Firms are stepping into more practical fields to survive current tough market conditions.

For example, Son Ha International Joint Stock Company’s (SHI) extraordinary shareholders meeting rubber stamped a move to build a commercial centre next to its head office to jump into the retail sector in 2012.

The move showed that retail sector would be the core in SHI’s long-term business strategy.

During 2010-2011, Son Ha claimed industry, property, waste treatment and retail its core businesses. However, in fact only industry brought it dividends.

To make inroads into the retail sector, SHI will establish a subsidiary providing retail services with chartered capital of VND10 billion ($476,000), while trying to divest from the real estate sector and delaying investment in waste treatment.

Speaking of the strategy change, SHI’s deputy general manager Pham Phu Truong said: “SHI prefers the hypermarket model like Big C and Co.opMart other than traditional modest-size supermarkets which are now commonplace.”

Similarly, Bac Viet Steel Co shifted into producing high-tech products.

“In 2012, the company will shift into operating under original equipment manufacture model which requires less investment capital while we can experiment with multiple business ideas and products and can quickly enter the market,” said Tran Anh Vuong, general director of Bac Viet Steel.

Head of Saigon Asset Management’s (SAM) financial department Huynh Thien Quan said market factors and macro-economic situation greatly affected enterprises’ business plan feasibility. Hence, parallel to balancing budgets, market factors’ adequate analyses were crucial in business planning for enterprises at this time.

Song Da Investment Construction and Development Company recently announced it would review the list of investment projects in 2012 and focus on ongoing projects.

Another lifeline for local realty market

The realty companies that have struggled with the stagnant market have strong expectations from newly-issued Instruction 2196/CT-TTg by the Prime Minister, which orders local lenders to hold back credit growth, especially in the property sector, in an appropriate way.

The new rule shows the Government’s determination to ensure banks can offer the realty sector loans at a reasonable credit growth rate and rational portion in line with Resolution 11/NQ-CP released by the Government on February 24.

“The move is a positive signal for the local realty market,” said Le Hoang Chau, chairman of the HCMC Real Estate Association (Horea).

Besides loosening credit for building houses for sale or lease to low-income people and workers in industrial parks or accommodation for those in need of housing, the Prime Minister requested banks to review and continue lending to projects which will be completed and sold next year.

However, banks will restrict lending money for compensation and site-clearance purposes and new projects as well as high-end property schemes while putting lending to firms or individuals involved in realty business under tight supervision.

Echoing the views of numerous real estate trading firms, Dang Duc Thanh, general director of Can Nha Mo Uoc Investment JSC, said the Prime Minister’s instruction had sent a good signal of helping ease the shortage of funds in the market.

To some extent, the tightening credit policy to new projects will partly reduce supply in the short term, facilitating unsold condos to be bought up. Based on unofficial figures, there are around 200,000 apartments in both small and big schemes nationwide, with around 50,000 unsold in HCMC.

Meanwhile, a survey by Cushman & Wakefield indicates that there have been about 13,000 condos released onto the market in HCMC this year alone. The survey also said that the current supply is predicted to satisfy the demand in the next three years.

A large number of real estate enterprises believe that credit loosening for projects close to completion will make no sense in the context of slowing housing demand. In other words, it is hard for the market’s liquidity to be improved since buyers have yet to recover their confidence in the market.

Tran Minh Hoang, chairman of Vinaland Limited, stated that the market now focuses on liquidating securities offered by lenders trying to take back their principles from their cash-strapped borrowers.

The biggest risk of industry players is the time when they cannot sell products to service bank loans but at the same time have to deliver finished products to homebuyers as scheduled.

Numerous developers under huge financial pressure are forced to offer products at discount prices but no one wants to buy them, Hoang said. Hence, he supposed that lowering lending rates to support homebuyers is the key to solving the problem.

A few experts forecast that lending rates will go down next year but how much they will decline depends on the future market movements.

Rush to buy cars before rise in registration fees

The automobile market is being patronized by a large number of customers of late, even though policymakers proposed to raise registration fees to reduce number of private automobiles to curb traffic congestion.

Buying demand unexpectedly jumped a week after Hanoi and Ho Chi Minh City suggested an increase in registration fees of automobiles to 15-20 percent from January 1, 2012.

Although a raise in automobile registration fees had been mentioned in Decree 45 since end of June, the automobile market actually became vibrant after recent meetings of the People’s Council of Hanoi and Ho Chi Minh City.

A month before the new regulation officially takes effect several automobiles stores in Ho Chi Minh City have amassed all kinds of cars, from regular models to luxury class. Thus, with only a little more than two weeks left for implementation of the new registration policy, car stores are well stocked and ready to serve customers.

According to Ngo Thanh Tri, in charge of sales in Western Ford, after seeing a slump in sales during the first months of the year, the local automobile market has positively changed thanks to the issue of Decree 45. However, the market actually heated up only when more customers began visiting car stores to buy. This raised company revenues by more than 30 percent in the last few months.

Automobiles stores on Tran Hung Dao Street in District 1 and Dien Bien Phu Street in Binh Thanh District have seen a large number of customers recently. Customers asked for new cars, domestically-assembled cars, imported cars and even second-hand cars.

A salesman at Hoang Nam Automobile Trading Company, which mainly trades imported cars, said more than 30 customers have visited the store the past week, and the company has successfully signed contracts to sell cars to more than 50 percent of the customers.

“Our cars are priced at around VND500-700 million, but there were also many customers asking for automobiles priced above VND1 billion. These customers have deep pockets and care less about raised registration fees,” he said.

Meanwhile, Nguyen Minh Dong, a lawyer in Hanoi, said that he decided to buy a Mazda 2 automobile costing more than VND690 million instead of his favorite Innova V by Toyota, priced at VND790 million, to be able to save the extra VND200 million before the new regulation takes effect.

When raising automobile registration fees to 15 percent in Ho Chi Minh City and 20 percent in Hanoi, policymakers aimed to reduce the number of private vehicles to solve traffic congestion and increase the city budget to reinvest in traffic projects. However, reality shows that this solution not only seems ineffective but is also proving disadvantageous for people wanting to buy cars.

According to economic experts and automobile traders, regular automobiles priced around VND500-700 million, account for 70-80 percent of the demand. Above average income customers can afford to buy a car at this price level.

Before the new regulation takes effect, people are rushing to buy second-hand cars or registering their cars in other provinces to avoid the high fees.

Parboiled rice exports to increase

Viet Nam hopes to increase export of parboiled rice by a third next year to 400,000 tonnes.

President of the Viet Nam Food Association, Truong Thanh Phong, said production of parboiled rice would not only increase the diversity and quality of Vietnamese rice but also help farmers make the most of the summer-autumn wet rice crop.

This year’s planned exports of at least 300,000 tonnes would meet 10 per cent of annual global demand for the variety.

Parboiled rice refers to paddy boiled in the husk and is favoured by many people for its nutritional value.

In some countries, especially in areas with people with high incomes, parboiled rice is increasingly replacing white rice.

Phong said parboiled rice fetches a US$50-60 higher export price per tonne than 5 per cent broken white rice.

Parboiled rice from Viet Nam, the world’s second largest rice exporter after Thailand, was exported to countries in East Europe, Africa, and Asia at $570 on average, Nguyen Ngoc Trung, general director of Vinh Phat Investment Corporation, which exported 42,000 tonnes this year, said.

Experts say the quality of Vietnamese parboiled rice is quite high, which gives it a competitive advantage over regional rivals such as India and Pakistan.

The Viet Nam Southern Food Corporation would soon complete construction of three more plants to parboil rice for exports. They would be operational next year, producing 300,000 tonnes a year, while the rest of the export target would be made up by private producers.

The country started exporting parboiled rice last year, shipping more than 10,000 tonnes. But despite the fact that this kind of rice fetches a higher price, Vietnamese producers are hesitant about investing in this field.

An executive from a Mekong Delta-based rice firm attributed this to the higher amount of investment required than for processing white rice.

But grabbing market share from top exporter Thailand and others was the main challenge for Vietnamese producers, the executive said.

The summer-autumn crop is usually harvested during the storm season, and if Viet Nam captures at least 30 per cent of the international market share, farmers will be less worried about their harvest.

Viet Nam eyes record high coffee exports

Viet Nam expected to gain a record high of US$2.4 billion in coffee exports this year, 58 per cent higher than last year, said the Viet Nam Coffee and Cacao Association.

The sharp increase in export value was due to a surge in the average export price, rising from $1,368 per tonne last year to $2,134 per tonne this year, the association said.

The export volume of coffee this year was estimated to reach 1.3 million tonnes.

The association reported the country exported 1.1 million tonnes of coffee in the first 11 months of the year, earning $2.3 billion. Key export markets for local coffee included the US, Germany and Belgium. -

Lack of capital slows major dam projects

Capital allocation must be sped up to complete the construction of Son La and Lai Chau Hydroelectric Plants alongside the damming of the Da River, the State Steering Committee decided at a provincial meeting yesterday.

The two final turbines (No 5 and 6) of the former factory were expected to become operational during April and August 2012.

The damming of the Da River was one of the most important priorities at present and was expected to start at the end of next year’s first quarter.

To date, dam designing, land clearance and resettlement of local residents for the Lai Chau project were reported to be on schedule, according to Project Management Board Director Nguyen Hong Ha.

Meanwhile, slow capital allocation has been a major factor in effective project implementation, causing disagreement between Electricity of Viet Nam (EVN) and commercial banks in terms of interest rates and loans.

To improve the situation, meetings among the State Bank of Viet Nam (SBV), EVN and commercial banks were held to reach consensus on interest rates associated to the Son La Hydroelectric Plant, according to a SBV representative.

EVN Director Pham Le Thanh said that disbursement would be made every three months towards the Son La project, adding that bidding related to the Lai Chau project would be sped up.

In addition, the Ministry of Finance ordered the Viet Nam Investment and Development Bank to provide enough investment capital towards the projects while sufficiently compensating resettled residents. Around 65 per cent of resettlement payments have been made to date.

At the meeting, Deputy Prime Minister Hoang Trung Hai praised the efforts of investors in implementing the project on schedule during difficult economic times.

Efforts should be focused on allocating land to residents to help them recover production, he said.

Hai also called for sped up capital allocation and salary payments ahead of Tet (New Year holiday).

The Son La Hydroelectric Plant, with more than VND42.47 trillion (US$2.03 billion) invested in it, started operating its first turbine last year while construction on the Lai Chau Hydroelectric Plant, located in Muong Te District’s Nam Hang Commune, started in January.

Region strengthens economic ties

Viet Nam, Laos and Thailand agreed to boost geo-economic axis co-operation during a meeting held in the central province of Kon Tum yesterday.

The axis includes the central provinces of Kon Tum, Quang Ngai and Binh Dinh of Viet Nam, Ubon Ratchathani and Sisaket of Thailand, and Champasak, Salavan, Sekong and Attapeu of Laos.

Nguyen Van Hung, chairman of the provincial People’s Committee of Kon Tum, said: “The linkage will reinforce common provincial strengths and complement shortages in diversifying products”.

Ubon Ratchathani enjoys advantages in agriculture and tourism while Sisaket is famous for its rubber and rice. Lao’s Champasak, Sekong and Atapeu provinces are abundant in energy, tourism and mineral plants.

Viet Nam’s Binh Dinh Province has potential to develop marine tourism while Quang Ngai is well-known for its Dung Quat Economic Zone. Kon Tum itself is a haven for eco-tourism.

Based on individual specialties, provincial authorities agreed to co-operate in the fields of tourism, rubber and coffee cultivation, agricultural facility production, energy and power projects, mineral exploration and forest conservation.

Agreement was also reached on raising funds to invest in infrastructure upgrades, such as the expansion of the 50km route between the Bo Y border gate and Attapeu.

Provinces would also implement measures towards human resource training and exchange, setting up information centres serving trade, tourism and investment activities.

In addition, Da Nang University’s branch in Kon Tum is set to sign a co-operation deal with Thailand’s Ubon Ratchathani Rajabhat University while enterprises participate in another meeting on investment opportunities at the Bo Y International Border Gate Economic Zone.

Seoul-Da Nang direct route launched

Asiana Airlines of the Kumho Asiana Group from the Republic of Korea has officially inaugurated a new air service linking the Korean capital of Seoul and Vietnam’s central city of Da Nang.

The route now has two flights per week on Tuesdays and Saturdays, using 177-seat Airbus 321-200s which depart from the Incheon international airport at 7.30pm and Danang airport at 11.40pm.

Launching the new Seoul-Da Nang route, Asiana Airlines now has a total of 37 flights per week on routes linking the two countries.

Overseas trade offices help boost agricultural exports

Advantages and challenges of trade promotion for agricultural, aquatic, and forestry products were discussed at a workshop in Hanoi on December 16.

The event, jointly held by the Ministry of Agriculture and Rural Development (MARD) and the Ministry of Industry and Trade (MoIT), attracted the participation of 64 Vietnamese trade counselors and representatives overseas.

In recent years, Vietnamese exports have faced a number of technical trade barriers, such as green dragon fruit to the US and Taiwan and seafood to the EU and the US. Thus, it is necessary to understand the handling processes of export markets for these cases.

MoIT Deputy Minister Tran Quoc Khanh said there is a lack of information exchange between state administrative agencies, businesses, and trade representatives in foreign countries.

The MoIT proposed that the MARD work together with trade offices and representatives to boost the signing and implementation of mutual recognition agreements on food safety and hygiene and agreements on technical conditions for agricultural, aquatic and forestry products with Russia, the Commonwealth of Independent States (CIS), the Middle East, Western Asia, and Africa.

The two ministries will employ measures to support and encourage businesses to increase trade promotion activities at the CIS market.

The MARD gave its departments the task of studying the new US laws and regulations on agricultural issues, namely the Food Safety Modernization Act (FSMA) and the country’s reviewed policy on Vietnamese exports of shrimp and fish to the market.

Boosting Vietnam-RoK cooperation

The Republic of Korea (RoK)’s businesses want to seek investment cooperation opportunities with their Vietnamese partners.

The statement was confirmed by Kim Young Jung, Deputy Director of the RoK’s Cosmic Round Company at a seminar in Hanoi on December 16 introducing the RoK’s science and technology products.

At the event, Korean businesses presented waste treatment systems, the building of power plants using renewable energy, household electrical appliances and technical solutions for pasteurizing in the agriculture and forestry sectors.

The seminar is part of a visit to Vietnam by 10 RoK businesses.

In recent years, trade relations between Vietnam and the RoK have steadily increased. Two-way trade turnover reached over US$9 billion in the first seven months of this year and is predicted to hit US$20 billion by 2015.

The RoK is regularly listed among the top three investors in Vietnam, mostly focusing on the electricity, electronics, ship-building, real estate, and infrastructure fields.

Vietnam-China Int’l Trade and Tourism Fair opens

The 2011 Vietnam-China International Trade and Tourism Fair took place in Mong Cai City in the northern province of Quang Ninh on December 16.

It has attracted businesses showcasing their products and services at nearly 300 stands. Businesses from Indonesia and the Republic of Korea are also displaying products at the fair.

Within the framework of the event are a series of activities including international seminars, the signing of business contracts, and culture and sports exchanges among localities.

Nguyen Manh Ha, Director of Quang Ninh province’s Department of Industry and Trade, said the fair is organized alternately in Quang Ninh (Vietnam) and Guangxi (China) to help strengthen trade cooperation and promote investment between the two countries.

The event will last until December 20.

New breakthroughs in Vietnam-Cambodia cooperation

Vietnam and Cambodia have made new breakthroughs in road, water, and air transport cooperation.

On the sidelines of the 17th ASEAN Transport Meeting (ATM-17) held in Phnom Penh on December 15, both Vietnamese Minister of Transport Dinh La Thang and Cambodian Minister of Public and Transport Tram lv Tek met to discuss concrete measures.

The two ministers agreed on orientations for cooperation in the 2011-2015 period with a vision for 2020, which lays stress on construction and upgrading of road links in Asia, ASEAN, and the Mekong Subregion. They also agreed to boost the implementation of bilateral and multilateral road transport agreements.

The two ministers pledged to coordinate with donors in building a railway line linking Phnom Penh and Ho Chi Minh City and to accelerate the signing of an agreement on railway transport in ASEAN. They expressed hopes that a Cambodia National Airline will be set up soon on the basis of the Angkor Air carrier.

At the meeting, Minister Thang told his Cambodia counterpart that the Vietnamese government has assigned the Ministry of Foreign Affairs to negotiate the signing of an agreement on Dak Dam bridge project in the border area between Cambodia’s Mondon Kiri province and Vietnam’s Dak Nong province.

Minister Thang invited Cambodian Minister Tram Iv Tek to visit Vietnam next year and his invitation was accepted with pleasure.

http://english.vietnamnet.vn/en/business/16550/business-in-brief-17-12.html