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 VIETNAM - BUSINESS IN BRIEF 21/12

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PostSubject: VIETNAM - BUSINESS IN BRIEF 21/12    Tue Dec 20, 2011 7:46 pm

DEC.21,2011


BUSINESS IN BRIEF 21/12

Green development the new future

The most important element in future urban planning will relate to the scope of green development, Vice President of the Viet Nam Urban Planning and Development Association Luu Duc Hai has said.

He said that the concept of green space should be widespread to include not only green trees, parks and water, but also green corridors, green belts and high-quality agricultural production areas.

With an increasing quality of life, Vietnamese people not only demand comfortable and convenient services and material, but also pay attention to their living environment. Confronted with this situation, the ‘green urban' concept has attracted many citizens and investors.

Hai said that although the concept was new, it had received special attention. Green urban areas were important in reversing the effects of environmental and noise pollution. Accordingly, people tended to own comfortable and spacious houses in natural environments.

Accordingly, Hai highlighted green space, green projects, green traffic, green industry, good conservation of nature and a green urban environment and community as important "Green urban" elements.

Le Trong Binh, director of the Architecture Institute and the Viet Nam Architects Association, said that criteria related to green architecture included a sustainable location, green resources, green energy and green technology, the impact on the environment and human culture alongside the preservation and promotion of traditional values.

Development Director of The Empire project Torsten Illgen said that ‘Green urban' concept was becoming a trend throughout Viet Nam's urban areas.

The development of ‘Green urban' spaces not only benefits the environment with more fresh air, but also increases economic and social values, attracting more investors.

In the past, most real estate projects only invested in quality and supply to meet the large demand for housing in urban areas. However, they did not pay attention to many other factors such as the environment and quality of life.In response, Deputy General Director of the Thanh Do Construction And Development Investment JSC Nguyen Thanh Nam said that the development of ‘Green urban' spaces is an inevitable trend in the real estate market not only Viet Nam but also in the world.

Vietnamese people have suffered from air, water and noise pollution. However, when society develops, the demand for "green" living spaces would become integral to personal life, according to Nam.

Crocodile farmers face losses

Crocodile farmers in the Cuu Long (Mekong) Delta provinces of Kien Giang and Ca Mau are facing financial losses as disease outbreaks and a weak market have affected sales.

Duong Van Au, owner of the Phu Hai crocodile-farm company in Kien Giang's Phu Quoc Island, said late last year 2,500 out of 5,500 crocodiles died at his farm. His losses totalled VND1 billion (US$48,000).

The outbreak came at a time when there was insufficiency of fresh water. In addition, the animals were not treated promptly because there was no veterinary staff on the island.

In Ca Mau Province, farmers have faced a similar situation. Nguyen Van Hai, a farmer in the province's Tan Hung Dong Commune, said crocodiles grew well in the early stages, but gained only 10kg when disease broke out.

The price drop has also hit farmers hard. According to Au, the selling price of crocodiles is VND120,000 ($5.7) per kilo, a decrease of 20 per cent over last year.

Au said he found it difficult to find a market where he could sell the crocodiles at higher prices.

Nguyen Van Luom of Tan Hung Dong Commune said he had a loss of VND200 million ($9,500) because the price of young, small crocodiles during this breeding season was high, but the selling price was low.

Farmer Tran Van Han could not find a market for his crocodiles, even at a low price. But keeping the crocodiles on the farm cost him VND200,000 ($9.5) a day for feed alone.

The local agriculture authority said many crocodile farms had developed independently without any input from authorities or experts.

Thus, the authority could not assist farmers in finding markets for their crocodiles.

They can only help the farms that have officially registered to raise crocodiles in standardised conditions and those that raise baby crocodiles that meet certain requirements.

Ca Mau's Department of Agriculture and Rural Development said the province had 500 household farms that had raised a total of 5,000 crocodiles. The farmers could not find markets to buy their animals.

Poor use of insecticides promotes problems

Advertisements for insecticides and trade promotions for their sale will be banned to help curb the misuse of pesticides, according to a new draft circular by the Ministry of Agriculture and Rural Development (MARD).

The draft circular on insecticide management was drawn up to replace its previous version issued last year. The new regulation is expected to be put into effect this coming April, said director of MARD's Plant Protection Department Nguyen Xuan Hong.

The information was announced during an international meeting held in Ha Noi yesterday by MARD and international organisations. The meeting aimed at searching for measures to curb the abuse of insecticides in rice cultivation in Asia.

The International Rice Research Institute (IRRI) has called for a ban on certain insecticides in rice production as part of its new Action Plan to reduce plant hopper damage to the rice crop in Asia, including Viet Nam.

Dr Bas Bouman, head of the Crop and Environmental Sciences Division at IRRI and leader of the Global Rice Sciences Partnership programme on sustainable production systems, said: "We need to seriously rethink our current pest management strategies so we do not just cope with current outbreaks but prevent and manage them effectively in the long run."

The MARD draft circular was written after research showed that when insecticides were misused, they could cause pest problems like the outbreak of brown plant hoppers, as the pests had became immune to the insecticide, he said.

"Moreover, insecticide was recently advertised widely, causing some farmers to forget the modern manufacturing processes they had been trained in," said Hong.

In 2006, the country experienced severe outbreaks of the brown plant hopper, which transmits yellow dwarf disease and ragged stunt disease to rice, causing heavy damage to rice production in the Cuu Long (Mekong) Delta.

In 2007, Viet Nam had to suspended rice exports because of losses caused by plant hoppers, he said.

The new circular also requires enterprises to re-evaluate any products which are reported to be substandard in order to phase-out insecticides that are highly toxic to humans, ecological services, aquatic organisms and the environment, said Hong. The new circular sets a higher technological standard for new registered insecticides to prevent toxic products from entering the country.

Another addition to the new circular is strict punishments for entities who spray in the tillering stage, or those that spray organic phosphate, carbamate, synthetic Pyrethoide or a mixture of these groups on rice seedlings during their first 40 days of growth.

"We encourage farmers to use more bio-pesticides, biological controls and pesticides with low toxicity following the four rights – using the right chemical, the right dose, the right timing and the right target," he said.

With help from IRRI, Thailand banned the use of two insecticides from rice – abamectin and cypermethrin – just three months ago because they are known to be major causes of plant hopper outbreaks.

In March, Viet Nam's southern province of An Giang began adopting ecological engineering practices such as growing flowers in nearby paddies to nurture predators of plant hoppers.

Dr K L Heong, an insect ecologist at IRRI, said: "It's a first step and there's a lot more to do, but openness to change is nothing new to Viet Nam".

Envoy advises local exporters to better exploit US market

Commercial Counselor to the US Dao Tran Nhan advises local exporters to pay closer attention to long-term strategies, rather than the short ones, to better exploit the US market.

Nhan said there is still a lot of room for Vietnamese exports to grow in the US, but local businesses have to conduct comprehensive research about the market demand, legal procedures, as well as the technical barriers, of this market.

Vietnamese businesses should also join US industrial associations and pay attention to lobby tasks in order to have better support in case of disputes.

He said that although the US is currently Vietnam’s largest export market, many local exporters have yet to establish adequate investments for this market, especially in the market research, marketing, and product and business promoting activities.

For instance, he said, to introduce themselves to US partners, many local businesses have sent mass emails to up to 200 companies.

“However, the emails only contain sparse information about their companies and products,” he said.

“And what local businesses do not know is that US companies consider such emails as spam and never even read them.”

Nhan added that many Vietnamese firms have even sent emails to the Vietnam Trade Office in the US to ask for market information, rather than conducting research on their own.

“They simply want to gain good results quickly without putting in any effort, which is unacceptable in the export industry, a sector that is time-consuming and demands effort,” Nhan emphasized.

Nhan advised that local businesses should seek opportunities to enter the US through their own initiatives in the future.

They should attend trade fairs and exhibitions in the US, in order to spread their business images to potential partners, he said.

“They can also consult the US Embassy in Hanoi or the Consulate General in Ho Chi Minh City for more information.”

Regarding anti-dumping lawsuits -- one of the largest challenges facing local exporters in the US, Nhan advised that Vietnamese exporters should not sell their products at too low of a price in comparison to their locally-made counterparts in the US market.

“Prices that undercut domestic prices will be a pretext for US associations and businesses to sue Vietnamese exporters,” Nhan said.

Nhan said local food exporters should strictly follow the US regulations on food safety and hygiene in order to maintain their growth in the US market next year.

Specifically, the US will implement its newly-issued Food Safety Modernization Act at the beginning of next year.

He said the Vietnamese Trade Office in the US has demanded that the Ministry of Agriculture and Rural Development introduce this new act to local businesses so that they can acknowledge the new requirements regarding the food safety and hygiene of exports to the US.

Nhan also suggested that Vietnam invite US experts to provide more comprehensive instructions on how to appropriately interact with American companies.

“This is very important since it will help local businesses increase their food, agricultural products, and beverage exports to the US in the future.”

Remittances from OVs increase

The volume of overseas remittance into Vietnam is estimated at nearly US$10 billion in 2011, US$1.6 billion more than the record high recorded last year.

Vietnamese guest workers alone sent home about US$1.8 billion in 2011, according to the Department of Overseas Labour under the Ministry of Labour, Invalids, and Social Affairs (MOLISA).The money sent back to Vietnam by Vietnamese expatriates around the world made up 4.2 percent of the country’s GDP in 1999, 7.8 percent in 2002, and around 7.7 percent in 2010.

This source of capital offset nearly 50 percent of the trade deficit in 2010, according to the State Bank of Vietnam.

Vietnam ranked 16th among the nations receiving the most remittances from their respective expatriates in 2010, reports the World Bank. In Southeast Asia, Vietnam placed second, after the Philippines.

Recently, the price of US dollars has inched up so many local people prefer selling their US dollars to gold shops.

Representatives of the Sacomrex Company say that the number of people wanting to receive foreign currencies from Vietnamese expatriates depends on the exchange rates of foreign currencies. If the exchange rate on the free market is higher than that of the banks, people want to receive money in foreign currency, and vice versa.

Thai investors tied up

The Thai investor has to show that it has advanced and environment friendly technology.

Two Thai investors’ oil refinery and thermoelectricity plant investment plans in central Binh Dinh province have stalled due to environment pollution concerns.

Man Ngoc Ly, director of Binh Dinh Economic Zone Management Authority, said the local authority was worried that the thermoelectricity plant could pollute the environment and the project had not been submitted to the government for approval.

The 700 megawatt power plant project was proposed at Binh Dinh Economic Zone by Thailand’s STFE Company last year. Early this year, the investor and Binh Dinh People’s Committee signed a memorandum of understanding for developing this project.

STFE Company plans to invest $850 million into a power plant, covering 60 hectares. It will import coal from Indonesia and Australia for the plant.

But Ly said the provincial committee could only submit this project to the government for adding into national power development master plan if STFE Company proved this project was environmental friendly.

“We don’t want any project polluting the environment. The Thai investor has to show that it has advanced and environment friendly technology,” said Ly.

At the end of this month, a delegation from Binh Dinh People’s Committee would go to Thailand to learn how STFE Company protects the environment at its power projects in Thailand.

“The final decision will be made after this trip,” said Ly.

The delay of STFE Company’s investment led to a delay of an oil refinery project proposed by Thailand’s Rayong Purifier Public Company, a partner of STFE Company. This oil refinery project, proposed at the same time with the thermoelectricity plant, has an annual capacity at three million tonnes of oil in the first phase. The investor announced it could double the total capacity in the second phase.

Rayong Purifier Public Company, founded in 1995, is now operating an oil refinery at Map Ta Put Industrial Estate in Thailand’s Rayong province. The refinery has a production capacity of 17,000 barrels a day, or 80 million litres per month. This company has also invested in a petrochemical factory in southern Can Tho city.

“Rayong Purifier Public Company said it would not push the oil refinery project ahead till the thermoelectricity project was approved. It explained that the investment could only be efficient if the oil refinery was built in line with the thermoelectricity plant,” Ly said.

Ly said the thermoelectricity and oil refinery projects had significant importance to provincial economic development and energy security of the country. “But we have to make environment protection the first priority,” he added.

City orders 35,000 mobile subscribers cut off line

The Ho Chi Minh City Department of Information and Communications has ordered mobile operators to stop providing services to more than 35,000 prepaid cell phone subscribers who have ignored the requirement of registering their personal information on subscription.

The penalties were levied after the department conducted inspection into seven services operators on their management over prepaid subscribers in the city as ordered by the city People’s Committee.

The military-run Viettel Telecom Group has the most subscribers that are to have their services cut, followed by Vinaphone and Mobiphone.

The order came after the subscribers had either failed to provide personal information, or provided false information, when registering for activating a new cell phone account.

According to Circular No 22 issued by the Ministry of Information and Communications, subscribers are required to provide service operators with information including full name, ID or passport number, and date of birth, when registering to use a new mobile phone number.

The circular, which took effect in August 2009, also bans the act of activating a mobile service when the subscriber has yet to provide personal information.

But most mobile operators have paid little attention to such stipulation and failed to strictly manage their subscribers.

Overseas trade offices seek to boost 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), drew the participant of 64 Vietnamese trade counsellors and overseas representatives.

In recent years, Vietnamese exports such as green dragon fruit to the US and Taiwan and seafood to the EU and the US have faced technical barriers.

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

MoIT proposed that MARD work together with trade commissions 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 for the CIS market.

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

Deal to engineer a sound future

A comprehensive geotechnical engineering training programme is on track.

On December 16, 2011 the Foundation Engineering and Underground Construction JSC (FECON) signed a Memorandum of Agreement with Asian Institute of Technology (AIT), Thailand relative to the provision of quality international training in geotechnical engineering for Vietnam and in particular for FECON staff.

The programme will be conducted by a teaching team of well-known AIT faculties, professors from Japan, Canada, America, Thailand and Korea with fulltime in Vietnam. It is designed for working staff to improve the knowledge without disturbing the working time.

Besides, AIT and FECON will closely collaborate in research and application of technology and new technical solutions that have been successfully applied in countries having similar geological conditions with Vietnam servicing the country’s infrastructure development, especially in foundation engineering, underground and urban tunneling.

In recent years, many problems relevant to infrastructure development such as failures of foundation and settlement due to lack understanding of the underlying clay, especially soft clay layers, low quality of geotechnical investigation and design, application of appropriate technology.

Hence, the training of foundation design and construction on par with international standards is imperative to minimise those problems for sustainable development and protect people from risks.

A team of design and construction professionals with modern construction technologies will help the infrastructure projects not only save cost and construction time but also safe and sustainable over time.

The Asian Institute of Technology is an international institute of higher learning in engineering, science, technology and management, research and capacity building in the region.

FECON, founded in 2004, is a leading company in providing comprehensive solutions for foundation projects in construction sector in Vietnam.

Projects get bogged down

Scores of Ho Chi Minh City-based property projects are stuck due to unreasonable compensation and inconsistent legal documents.

North Rach Chiec residential area project in Ho Chi Minh City’s District 9 was approved by the prime minister in 2001. Developer Real Estate Joint Stock Company 10 (Res 10 JSC) was later handed over 78.5 hectares for technical infrastructure construction. The project affected 438 households in Phuoc Binh and Phuoc Long A wards which were subject for relocation.

According to a Phuoc Binh ward’s inspection board report, scores of households in affected areas refused to hand over their land due to low compensation, stalling project implementation for couples of years.

Besides, after getting the land developer Res 10 transferred investment rights to eight other firms who are secondary investors to source investment capital.

One secondary investor Truong Van Quyen, director of Trade, Construction and Transport Services Enterprise belonging to Auto Transport Services JSC 6, said: “The city authorities just honoured the land use right in Phuoc Long A area to developer Res 10 JSC to empower it to split land areas to local households while it is still a long way for our secondary investors to get the same right due to incomplete site clearance and infrastructure construction.”

Res 10’s actions were counter to prime minister’s guidance since the prime minister demanded “After finalising North Rach Chiec residential area’s technical infrastructure construction, Res 10 must hand over entire land to city authorities for the city to lease land to secondary investors pursuant to the Land Law regulations.”

A plot-based housing project in District 9’s Phu Huu ward is in the same position.

In light of city authorities’ commitment on mini-housing developments in 2001, Pham Trong Thuan and 10 other households in Phu Huu ward pooled capital to carry out a plot-based housing project over 4.5ha. In August 2001, the project’s detailed planning was ratified by Ho Chi Minh City Chief Architect Office.

After finalising compensation for 32,079 square metre fields and 12,885sqm of public land Thuan had engaged in site clearance and completed infrastructure building in 2004.

However in late 2005, District 9 People’s Committee issued a document requiring a land appraisal of a land plot in the project site. Later in 2007, it enacted a decision taking back all land use right certificates already given to Thuan and other stakeholders without legitimate explanations.

The local government did not take any move to support investors since then. The project site is now laid idle. Technical infrastructure worth several million dollars faces serious quality deterioration.

“Lengthy settlement eroded our shareholder confidence. Local government needed to take back absurd documents and support us in project completion,” said Thuan.

Tax dodgers in for a fight

Scores of foreign-invested enterprises are on tax bodies’ inspection radars in the fight against transfer pricing.

Everbest Vietnam is a wholly Hong Kong-China owned shoe maker based in northern Quang Ninh province and since its foundation in 2003, the company continually counted losses.

Phuong Dong Pearl Company Limited, wholly Japanese, bears the same fate. Its pearl products are often sold to a foreign partner. Since going into operation in 2000, the firm bogged down in losses.

These two firms’ transaction figures are under Quang Ninh Tax Department’s microscope and these firms subject to undergo inspections during 2011-2012 to detect whether they involve in transfer pricing cases.

In fact, these cases are multiple and take place in localities nationwide.

For instance, in southern Dong Nai province, wholly Taiwanese Hualon Textile Company also incurred continual losses which exceeded VND1 trillion ($47.6 million) by late 2010, according to Dong Nai Tax Department figures.

Inspection results showed that the firm had unclear transactions with associate foreign firms in purchases of major production materials. However, the Dong Nai Tax Department temporarily did not give final conclusion about the case due to insufficient information and has send all relevant records to the General Department of Taxation seeking support.

In fact, a number of foreign invested firms, though claiming they were at losses for couples of years, have been expanding production and business continually.

According to Ho Chi Minh City Tax Department’s Inspection Office 1 officer Phan Phung Hung, transfer pricing may involve firms which have counted losses for couples of years, but could still build new factories and operate smoothly.

According to a Ba Ria-Vung Tau tax officer there almost does not exist a price database of commodities and products being transacted between independent and associate companies. “Hence, in case internal transactions taking place among associate firms or firms under the same group it is extremely difficult for tax bodies to source similar transactions to define whether the parties involving these internal transactions strictly abide to market prices in their cases,” said the officer.

Audit uncovers fuel wholesalers’ hefty profits

Although fuel wholesalers have repeatedly claimed a “refrain” bemoaning of losses, they have actually been operating with enormous profits, Deputy Minister of Finance Vu Thi Mai said in a press briefing yesterday, citing audit results.

At the press conference held to publicize the audit results conducted on four major fuel wholesalers, Le Hoang Hai, deputy head of the Business Finance Agency under the Ministry of Finance, said that on August 26, when the gasoline retail price was cut by VND500 a liter, the finance ministry claimed that fuel wholesalers were operating with a gain.

In fact, audit results show that in the period between July 1 and August 26, Petrolimex enjoyed a profit of VND130 billion (US$6.24 million), while the respective figures for Saigon Petro and Petimex are VND48 billion, and VND22 billion, Hai said.

“Therefore, the price cut imposed on August 26 was completely reasonable,” he concluded.

Hai elaborated that the wholesalers have gained profits from most of the fuel commodities.

Petrolimex, for instance, generated a VND202 profit on every liter of gasoline they sold, and VND365 on diesel.

Meanwhile, Saigon Petro reaped VND1,110 a liter for kerosene, and VND232 for A92 gasoline.

“These huge profits do not even include the fixed profit of VND300 a liter as stipulated by the Ministry of Finance on the wholesalers’ prime cost calculation,” Hai said.

“Since the wholesalers always lament their supposed losses, the finance ministry wants the public to know what their actual finance state is.”

However, Hai added that in the first half of this year, the wholesalers have actually incurred losses from their fuel trading activities.

Specifically, Petrolimex suffered a VND1.31-trillion loss, Petimex, VND136 billion, Saigon Petro, VND7.5 billion, and PV Oil, VND382 billion.

However, the main cause for these losses is the fact that the wholesalers have granted commission for their dealers that are too high.

Deputy Minister Mai said that although there is no regulation on the specific commission rate wholesalers are allowed to pay their dealers, the Ministry of Finance has stipulated the “fixed” business expenses at VND600 in the fuel retail price calculation.

The expenses include the commission for dealers, but the audit has found that many wholesalers pay a commission exceeding that limit, Mai said.

“This is because the wholesalers are allowed to negotiate with their dealers on how high the commissions should be.”

Mai said Petrolimex has paid its dealers commissions worth VND210-830 a liter in the first six months of the year, resulting in an overrun of VND516 billion in business expenses. In the same period, dealers of Petimex received VND867 in commission for every liter of fuel they sold.

“While consumers have to suffer from high fuel retail prices, and the government has been putting in an effort to tame the high inflation, it is unreasonable for wholesalers to offer such high commissions,” Mai said.

“This occurs because there is no regulation specifying a limit rate for commissions.”

Mai demanded that such a commission limit be stipulated soon, since dealers of different wholesalers are facing unhealthy competition with each other due to the different commissions offered.

“There were instances in which a wholesaler paid its dealers only VND100 a liter, while dealers of another wholesaler received as much as VND1,000 a liter,” Mai said.

The audit results show that while wholesalers suffered from losses, their dealers enjoyed hefty profits, which has raised skepticism among insiders about the former’s transfer pricing activity.

Hai said his unit had called on the Ministry of Finance to continue its inspection on wholesalers to clarify the issue.

Regarding the fuel prime cost calculation, which is made based on the average fuel import price in the previous 30 days, Mai said this lengthy period has prevented wholesalers from adjusting their prices in time with the global price fluctuation.

“The Ministry of Finance will petition the government to reduce the average period to around 10 days, in order to enable domestic prices to fluctuate in accordance with its global counterpart,” Mai said.

“The ministry will also demand the exclusion of the fixed profit from the prime cost calculation, in order to bring more transparency to the wholesaler’s financial status.”

Hanoi machinery expo set for March

The ninth Vietnam International Precision Engineering, Machine Tools and Metalworking Exhibition (MTA) will return to Hanoi in March.

Co-organised by the Singapore Exhibition Services Pte Ltd (SES) and local organiser VCCI Exhibition Service Co Ltd, MTA Hanoi 2012 will include Metrology Hanoi 2012, ToolTec Hanoi 2012, SubCon Hanoi 2012, Automation Hanoi 2012, and WeldTech Hanoi 2012.

MTA Hanoi 2012 will showcase international technologies, including metal-cutting machine tools, metal-forming machine tools, test and measurement equipment and systems, cutting tools, tooling systems, and industrial tools and components.

The event is the leading platform for industry professionals to network with both international and reputable local exhibitors offering the latest solutions for Hanoi 's blooming manufacturing sector.

There will also be ample opportunities for local industry players to establish business partnerships.

According to a General Statistics Office report, the manufacturing sector in Vietnam experienced growth rates of about 10 percent.

Based on the national Index of Industrial Production, Hanoi 's economic growth rose 12.5 percent between January and October 2011 compared with the same period last year.

William Lim, project director of Machinery Events at Singapore Exhibition Services (SES), said the exhibition was especially timely, as reports had shown that Vietnam 's manufacturing industry had been growing at a steady pace, including in Hanoi as well.

MTA Vietnam was first launched in HCM City in 2005, and the show has since grown to become Vietnam 's most comprehensive manufacturing-solutions trade event, with 80 percent of exhibitors from overseas.

Ministry to merge State-owned firms

The Ministry of Transport plans to establish four economic groups by merging several State-run corporations involved in construction, consultancy and exploitation.

The construction group merger will include the Civil Engineering Construction Company No 1 (Cienco 1 ), Cienco 8 and the Thang Long Construction Corporation, all from the North as well as Cienco 4, Cienco 5 and Cienco 6 in the South.

Construction, consultation, finance and credit corporations were all scheduled to be merge with the Viet Nam Expressway Corporation to become the Viet Nam Expressway Investment Group.

The three airport corporations (North, Central and South) were to be merged into the Viet Nam Investment and Airport Group. The merger would be implemented over two separate periods of approval.

Minister of Transport Dinh La Thang said these groups would take on large-scale transport infrastructure projects and public utility duties in underprivileged areas in addition to accumulating capital to boost competitive edge.

Call to push trade promotion

The efficiency of trade promotion activities needed to be enhanced in the coming year, heard a conference yesterday in Ha Noi.

The conference, under the framework of the Commercial Counsellor Meeting held by the Ministry of Industry and Trade, focused discussion on measures to better support enterprises to develop their business at home and abroad.

Director of the Ministry's Department of Trade Promotion Do Thang Hai said the investment for trade promotion in recent years had not met the demand of enterprises and lacked competitiveness with other countries.

The State budget allocation for trade promotion has also been on a downtrend year on year. This year's allocation was cut to VND55 billion (US$2.6 million), half of the amount in 2010 and nearly one-third of the 2009 figure. Meanwhile, the demand from enterprises was reported to reach more than seven times higher than the allocated amount.

Viet Nam's investment in trade promotion was also reported to be much lower than foreign countries, equalling one-thirtieth of the world's average rate, which lowered the competitiveness of local enterprises in foreign markets, he said.

Local trade promotion organisations and Viet Nam trade offices abroad did not work or link closely to each other which also hindered trade promotion, said Hai.

The department reported that only 25 per cent and 23 per cent of the local trade promotion organisations in the country's northern and central parts maintained their regular relationship with their trade offices. In the southern region, the rate was 64 per cent.

Although 70 per cent of the local trade promotion organisations had their own websites to introduce local enterprises, the websites have not proved to be very efficient except for those in big cities such as Ha Noi, HCM City, Hai Phong and Da Nang.

The lack of a network providing information about domestic enterprises had wasted many business opportunities, said Dao Tran Nhan, Vietnamese commercial counsellor in the US.

The application of information technology in trade promotion played a significant role in connecting enterprises, Nhan emphasised.

Commercial counsellors at the conference also agreed to boost the foundation of Viet Nam trade promotion offices in foreign countries, saying it would help widen the export market while speeding up the integration of Viet Nam into the world economy.

According to a commercial counsellor in the UK, An The Dung, the capacity of trade promotion organisations must also be enhanced, especially those at the local level, to foresee and tackle barriers to enterprises in domestic and foreign markets and raise measures to better support enterprises.

Support would also be given to strengthen the capacity of trade associations to facilitate their greater involvement in trade promotion activities.



http://english.vietnamnet.vn/en/business/16750/business-in-brief-21-12.html


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