Business in brief 11 Jan 2013
Textile and garment exports from Vietnam earned a record US$ 17.15 billion in 2012, registering an increase of 8.5 percent year-on-year, according to the data released by the Vietnam Ministry of Industry and Trade (MOIT). Vietnam’s textile and apparel exports were mainly destined to the US, the EU and Japan during the year. While exports to Japan surged by 19.3 percent year-on-year, those to the US jumped 9.2 percent year-on-year. Among sub-sectors, Vietnam’s revenues from the garment sector grew by 12 percent year-on-year to US$ 15.8 billion, while the textile sector exports accounted for the remaining US$ 1.35 billion. Last year, Vietnam imported US$ 8.8 billion worth of raw materials for use in the manufacturing of textiles and apparels. For the current year, MOIT aims to achieve around US$ 19 billion from textile and clothing exports.
The Vietnam Automobile Manufacturers’ Association’s (VAMA) latest report revealed December 2012 sales reached 9,983 units, up 4 per cent versus November 2012. Of the total, 3,858 cars and 6,125 trucks were sold. Completely-knock down (CKD) volume reached 7,701 units, down 1 per cent against November and completely built units (CBU) totaled 2,282 units, up 28 per cent month-on-month. According to VAMA’s chairman Laurent Charpentier, the 2012 calendar year was among the most difficult faced by the domestic motor manufacturing industry in the last decade, with total sales reaching 93,000 units, marking a 33 per cent year-over-year decrease against 2011.
The Vietnam Trade Office in Japan urged local exporters to keep a close watch on coffee exported to Japan, as the country will soon impose tighter quality controls. The volume of Vietnamese coffee products consumed in Japan increased last year, but Vietnamese enterprises need to follow Japanese regulations closely to continue exporting to the market. Under Japan’s Plant Protection Act, dried coffee beans that have not gone through heat treatment are still considered fresh and must comply with plant quarantine requirements. Ground coffee and processed products are not bound by those requirements but are subject to safe quarantine procedures under the country’s Food Safety Law. Vietnamese coffee products exported to Japan also need to have clear origins and must undergo checks for additives, pesticide residues and other substances banned from entering Japan. The export turnover last year was US$160.47 million, up 40 per cent year-on-year.
Air Mekong plans to add more flights to meet passenger demand during the upcoming Tet (Lunar New Year) holiday. Accordingly, it will add 4-8 flights to each day during the weeks before and after the Tet festival, bringing the number of daily flights between HCM City and Quy Nhon to 98 and increasing trips between HCM City and Buon Ma Thuot and Pleiku and between Ha Noi and HCM City to Phu Quoc and Con Dao to over 200. The airline has denied news that it delayed jet fuel payments to the country’s main supplier Vinapco, saying that it always fulfilled contractual terms and its fuel payments were fully guaranteed.-
The Ministry of Agriculture and Rural Development (MARD) has asked for permission from the Government to allow the import of frozen white innards again. Deputy minister of Agriculture Vu Van Tam said the ban on imports of white innards such as cow stomach, intestine and testicles caused difficulties in the country’s trade relationships with major partners such as the US, Australia and Poland. A 2010 decision halted imports of both white and red innards, which include cattle and poultry heart and liver, due to a huge wave of frozen poultry and cattle innards imported to Vietnam. One year later, red animal innards were permitted to be imported again. Since then, nearly 1,000 tons of frozen red innards have been imported to the country from the US, Australia, Canada, France, Spain and Poland.
E-mart, one of the leading retailers in South Korea, is looking for supply from Vietnamese enterprises in order to open its first supermarket in the country. According to the Vietnam Trade Promotion Agency under the Ministry of Industry and Trade, E-mart intends to set up a modem supermarket in Hanoi this year. Therefore, the retail group wants to secure supplies from local enterprises, including interior and exterior decoration items. Next Thursday, the Vietnam Trade Promotion Agency will organize a meeting between Vietnamese entrepreneurs and representatives of E-mart in Hanoi. In addition, E-mart representatives will visit and make direct transactions at factories of local firms.
The number of telephone and Internet subscribers has posted slow growth last year as shown by a recent report of the General Statistics Office (GSO) but the information is doubted. In fact, slow growth of telephone users is ascribed to the market’s saturation while data collection for examining the Internet segment is reportedly improper. Vietnam had an additional 12.5 million customers of telephone services last year, surging 5.5% year-on-year, GSO reports. The number of telephone subscribers nationwide as of the end of last month had reached an estimated 136.6 million, a pickup of 2.7% over the same period in 2011. The figure includes 14.9 million customers of landline phone services, down 2.9%, and 121.7 million users of mobile phone services, up 3.5%. Total net revenues of the post and telecom industry were VND179.9 trillion last year, marking up 7.6% year-on-year, says GSO’s report.
Exports to key Middle East markets, including the United Arab Emirates (UAE), Turkey, Saudi Arabia, Israel and Iraq, brought in US$4.2 billion to Vietnam last year. The figure represents an increase of 65 percent over 2011, Vietnam Customs reports. The UAE continued to be the largest consumer of Vietnamese goods in the region, with imports reaching US$2 billion. It was followed by Turkey with US$850 million and Saudi Arabia with US$597 million. Vietnam’s key exports to the region include cell phones and spare parts (earning US$1.5 billion), fiber (US$340 million), seafood (US$218 million), computer and electronic products (US$160 million) and garments (US$136 million).
Vietnam’s cement sales in 2012 reportedly fell by 3.5% to 54 million tons due to low demand in the domestic market, according to the Vietnam Cement Association (VNCA). The country’s cement sales in its domestic market fell by 7.71% year-on-year to 45.5 million tons. Cement and clinker exports rose by 30% to 8.5 million tons. In 2012 local cement makers faced many difficulties such as large inventories and low domestic demand created by a static real estate market. Cement and clinker exports have also been disrupted due to some firms ’unfairly’ cutting their export prices. For 2013 the VNCA has predicted that local cement producers will continue to face difficulties. However the government has approved spending of US$480m on new rural constructions and will encourage the use of local cement for transportation infrastructure projects. Vietnam’s domestic cement sales are predicted to rise by 5-8% year-on-year to 48-49Mt in 2013, equal to the total sales seen in 2011.
South East Asia Port Expansion Summit will take place in Ho Chi Minh City, from 21-22 February, 2013. This event will be great opportunity to get the latest insight from government representatives, port authorities and the world’s leading container shipping lines, cargo owners, logistics companies, ports, terminal operators, port equipment and services suppliers…also update trends in global ports sector – providing sustainability and growth, modernization of cargo handling & storage facilities and learn the successful port expansion projects. Investment in ports located in South East Asia’s fastest growing economies will accelerate in the coming years. The South East Asia region has considerable historical experience of the virtues of private sector participation in the maritime and transport sector – from early developments in Singapore and successful privatization programmers in Malaysia, through to more recent reform successes in Indonesia and Vietnam.
Vietnam Electricity Group has awarded a $127 million contract to an Alstom S.A. and Hydrochina Zhongnan Engineering Corp. consortium for electro-mechanical equipment. The equipment is for the 1,200-megawatt Lai Chau hydroelectric station in Lai Chau province in northern Vietnam, Vietnam Electricity said in a statement Friday. Building of the plant began in January 2011 and should be finished by 2017, it added. The contract includes delivery, supervision of installation, testing and commissioning of three Francis 400-megawatt turbines and generator sets and mechanical and electrical auxiliaries, Alstom said in a separate statement Thursday. The equipment will be manufactured at Alstom’s hydroelectric industrial facility in Tianjin in China, it added.
Lao Bao, a special economic- commercial zone in the central province of Quang Tri has attracted 47 projects capitalized at nearly VND3,430 billion as of December 2012, of which 34 projects are operational. The Lao Bao is the starting point of the East-West Economic Corridor (EWEC), linking Laos, Thailand, Myanmar and Vietnam. Annual total export-import turnover though the Lao Bao international border gate shows constant growth, already rising to US$70 million in 2012 from US$ 23.6 million three years ago. The Quang Tri Provincial People’s Committee has called on relevant ministries and agencies to help upgrade Lao Bao infrastructure facilities under the Prime Minister’s plan for border gate economic zone development till 2020.
Vietnam ranks fourth in the world for the highest percentage of compromised computers and hosts 5.6 per cent of the world’s spam-sending ‘zombies’, according to a new report by global internet security firm Commtouch entitled Internet Threats Trend Report - January 2013. A zombie is a computer connected to the internet that has been compromised by a hacker, computer virus or worm that can be used to perform malicious tasks under remote direction. India accounted for 15.6 per cent of zombies during January, followed by China (9 per cent) and Russia (6.4 per cent). However, the percentage of zombies in Vietnam decreased from 6.5 per cent in December, while Russia’s percentage of zombies rose from 5.9 to 6.4 per cent. Educational and shopping websites were most likely to be compromised with malware, the report said, while pharmaceuticals continued to top the list of spam topics.
Cavico Manpower Services Co (CMS) will pay last year’s dividends at 20 per cent compared to the planned rate of 30 per cent. Dividends will begin to be paid on February 5. In November, CMS decreased its revenue target by 39.3 per cent to VND185.14 billion (US$8.8 million) and profit target by 49.7 per cent to VND19.6 billion ($933,300). The company’s shares finished yesterday’s session at their ceiling price of VND11,900.
Vinaconex Infrastructure Development and Investment Co (VCH) announced that a major shareholder – Vinaconex Engineering Construction and Investment Co – would sell its entire 49.5 per cent stake, equal to 1.98 million shares, in order to restructure its capital in affiliates. Meanwhile, sugarcane processor Bourbon Tay Ninh (SBT) will increase its transactions with 10 affiliates this year. The total value of purchasing contracts will not exceed 50 per cent of the company’s total assets.
Logistics firm Vinafco (VFC) will voluntarily delist 34 million shares, worth VND340 billion (US$16.1 million), from the HCM City Stock Exchange on January 31. The company said its revenue in the first nine months of last year dropped 44 per cent to just VND1.56 billion ($74,200) due to the country’s economic difficulties. The closing price of its debut year, 2006, was VND30,000 ($1.4), while it closed yesterday’s session at only VND7,200 (34.2 US cents). Data showed that 22 businesses left the stock market last year, while 14 came close to delisting and one was dissolved.
Vietinbank (CTG) estimated it earned over VND8.2 trillion (US$390.4 million) last year, exceeding its annual target by 10 per cent. The bank’s total assets hit VND505 trillion ($24 billion), increasing 9.8 per cent compared to 2011. Returns on equity reached 19.8 per cent, while bad debts accounted for 1.35 per cent of total loans. Last year, the lender’s subsidiaries and branches in foreign countries were profitable. Vietinbank plans to increase its total assets by 15-20 per cent this year and gross profit by 10-15 per cent while keeping bad debts under 3 per cent.
Posco Engineering & Construction Co, the construction arm of South Korea’s largest steelmaker, Posco, has beat 10 other contractors to secure the US$302 million deal to build the Formosa Raw Material Handling Yard in Vietnam. Under the contract with Formosa Ha Tinh Steel Corp, an affiliate of Vietnam’s Formosa Group, Posco E&C will build the facility in a steel complex in central Ha Tinh Province. Construction on the project, which will have an annual production capacity of 7 million tons per year of crude steel, will begin in February and finish by January 2015.
