Business in brief 11/27/2008
Micro-entrepreneurs to be honoured in Hanoi
The Citi Vietnam Mirco-entrepreneur Award 2008’s presentation ceremony will take place in Hanoi next week, announced the Vietnamese Micro-finance Working Group and the Micro-finance and Development Centre.
The event, held for the second time in Vietnam , is funded by the Citi Foundation and organised by the State Bank of Vietnam and the Vietnamese Micro-finance Working Group.
This year, the Citi Foundation pledged over 1.3 million USD to organise the Citi Micro-entrepreneur Awards in 26 nations, including Vietnam .
The goal of the awards is to support micro-entrepreneurs and raise their awareness about micro-finance’s role in providing financial support for the poor, especially small loans to help people start their own businesses.
The award aims to honour excellent micro-entrepreneurs who have made efforts to boost their household income through their businesses and to promote local economic development.
Besides organising this year’s awards ceremony, we plan to bring out some new rating standards for businesses who registered to participate in the awards, which will assess the amount they have increased in revenue in the past three years and their ability to apply advanced technology,” said director of the Micro-finance and Development Centre, Nguyen Bich Vuong. Additionally, 2008’s ceremony will award three micro-finance organisations that have provided new products for the local market.
Quang Ninh FDI promotion pays off
The north-eastern province of Quang Ninh has attracted an increased flow of foreign direct investment (FDI) this year as a result of efforts to expand investment promotion activities abroad.
Since the beginning of the year, the province has granted licences to more than 10 projects with a combined registered capital of nearly 135 million USD, 2.5 times higher than the same period last year. This figure has brought the total number of FDI projects in the province to 110, with total investment exceeding 1.2 billion USD.
More than 100 business delegations from countries and territories worldwide such as mainland China , the Republic of Korea , Japan , Taiwan , Hong Kong , Thailand , Canada , Australia , the US and the United Arab Emirates , have flocked to the province to explore investment opportunities. Quang Ninh encourages FDI investment in projects that focus on infrastructure and industrial development, high-quality tourism and technology, as well as other areas that require supportive projects and employ large numbers of workers.
To facilitate the operations of investors, the province has spared no effort to accelerate administrative reform and project site clearance procedures, develop high quality human resources, and allocate land for the construction of houses for workers, particularly those working in industrial zones (IZ). Quang Ninh is now home to five IZs, namely Cai Lan, Viet Hung, Hai Yen, Hai Ha and Dong Mai, with areas ranging from 150 to 300ha.
HCM City urges more investment in ports
HCM City expects to expand development of seaports in the next few years, city officials told the 34th annual conference on seaports organised by the ASEAN Ports Association on Nov. 25.
The conference focused on ways of developing the city’s port system, staff to operate the systems, and privatisation.
Nguyen Trung Tin, deputy chairman of the municipal People’s Committee, said upgrading seaports was vital for the city’s economic growth. Tin added that incentives would be offered to companies that invest in developing the city’s ports. According to the Vietnam Port Association, 50 million tonnes of commodities are transported annually through the city’s port system. They predicted that goods transported through city ports would increase to 100 million tonnes by 2011.
Vietnam has about 150 ports of varying sizes. Those in the south play a key role in the movement of commodities.
Vietnam, UK negotiate mutual legal assistance treaty
Vietnam and the UK began the first round of negotiations on the mutual legal assistance treaty on civil and commercial matters in Hanoi on November 25.
The two sides’ discussion, which will run until November 27, is based on an agreement drafted by the Justice Ministry of Vietnam.
On Nov. 25, Deputy Minister of Justice Hoang The Lien met with representatives from the UK Justice Ministry, during which the two sides said if it is signed, the treaty will create a legal foundation for better protecting the legitimate interest of agencies, organisations and citizens of the two countries, as well as better serving international integration.
HCM City hosts int’l pepper conference
The 36th International Pepper Conference takes place in Ho Chi Minh City from November 25-27, offering an opportunity for local and foreign producers and traders to develop their partnership and promote trade and investment.
President of the Vietnam Pepper Association (VPA) Do Ha Nam said that the event, the first of its kind in Vietnam , drew the participation of almost 400 foreign and 150 domestic delegates. It was really a good chance to promote Vietnam ’s pepper.
Vietnam is currently the world’s largest pepper producer and exporter, contributing more than 30 percent to the world’s output and commanding nearly 50 percent of its export market.
In 2005, Vietnam joined the International Pepper Confederation, which also includes Brazil , India , Indonesia , Malaysia and Sri Lanka. Vietnam exported 82,000 tonnes of pepper of all kinds in 2007. In the first seven months of this year , the country shipped abroad 58,000 tonnes of pepper, earning 202 million USD.
Fimex VN expands seafood exports to Japan
The Sao Ta Food Joint Stock Company (Fimex VN) has won a contract for export of 1,000 tonnes of farm produce to Japan .
Fimex VN General Director Duong Ngoc Kim said under the contract signed with the Toyota Tsusho Company, Fimex VN has so far shipped 20 tonnes of food to Japan. In an efforts to increase its production capacity for export, the company has put a farm produce processing system with a capacity of 20 tonnes of products a day into trial operation.
According to the Vietnam Association of Seafood Producers and Exporters (Vasep), Fimex VN has so far this year exported almost 1,000 tonnes of seafood, worth more than 9 million USD, an increase of 63 percent in volume and 57 percent in value compared to the same period last year. Fimex VN is among top seven shrimp exporters in Vietnam , said the Customs General Department.
Canon to build electronic component plant in Hung Yen
Northern Hung Yen province has licensed Canon’s project to build a 134 million USD electronic component and equipment plant at its Pho Noi Industrial Zone.
The 110 sq.m plant, the fourth of the Japanese company in Vietnam , is expected to produce annually more than 136.3 million sets of super-small motors for electronic products in the first phase of operation. The products will be provided for Canon’s factories in Vietnam and other Asian countries. The plant’s construction for Dec. 2008 and is expected to complete in July next year. The Republic of Korea ’s Huyndai Kia Motos corp. also plans to invest in an automobile manufacturing plant worth 1 billion USD in the province.
All you need for a greener life in 2009
A national exhibition and conference aiming at supporting the technological revolution and promoting the trade in environmentally-friendly products and technologies will be held in Hanoi from March 17-20, 2009.
This information was announced by the Ministry of Industry and Trade (MoIT)’s Industrial Strategy and Policy Institute (ISPI), the Department of Science and Technology and CIS Vietnam Advertising & Exhibition Co. Ltd at a press conference in Hanoi on Nov. 25.
According to ISPI Director Phan Dang Tuat, the National Exhibition & Conference on Environmentally-Friendly Products and Technologies 2009 (Vietnam EFProtech 2009) will showcase a range of local eco-friendly products and environmental solutions, as well as products from Singapore , Russia , China , Malaysia and Thailand .
A plethora of environmentally-aware service providers will be participating in the event, including companies offering air pollution control, water equipment, observation systems, solid waste treatment technologies and harmful waste management services.
During the event, a series of seminars will be held, covering topics such as the current situation and developmental orientations of Vietnam s environmental industry, the government’s environmental support policies, energy-saving issues, natural resources management, the use of new and renewable energies and waste treatment technologies.
The MoIT’s official periodical, which includes feature articles and experimental research, will be officially launched during the conference.
HSBC named best bank in 2008
The Hong Kong-Shanghai Banking Corporation (HSBC) has been named Best Bank in Vietnam by The Asset Magazine in its Triple A Country Awards for 2008 for excellence in banking and finance within Asia. This is the second time the bank has been recognised with the award, after scooping it in 2006.
“HSBC is very proud to be named Best Bank in Vietnam for its achievements from October 2007 to September 2008,” said Thomas Tobin, President and CEO of HSBC in Vietnam .
Winning the award for the second time confirms customers’ trust in HSBC as well as showing recognition from independent industry leaders for its world-class products and services and ongoing commitment to excellence, he added.
The award recognised a chain of HSBC’s achievements in 2008, including being one of the first foreign banks to obtain a licence for local incorporation and the first foreign bank to increase its stake in a local joint stock bank to 20 percent, namely in the Vietnam Technological and Commercial Joint Stock Bank (Techcombank), one of the largest and best managed joint stock banks in Vietnam.
HSBC Vietnam is now the country’s largest foreign bank in terms of investment capital, transaction network, varieties of products and the numbers of staff and custormers.
The Asset Magazine selected the award winners according to their financial performance, size of operation, spread of business, investment banking performance, corporate and transaction banking performance, contributions to the domestic market and client testimonials.
Index treads water on low demand
The VN-Index largely held its ground in Nov. 24’s trading on the HCM Stock Exchange, although demand remained sluggish.
The VN-Index shed a mere 1.03 points, or 0.32 percent, to close at 317.93. but trading volume dropped a substantial 30.8 percent from the previous trading day. Only about 13 million shares changed hands, for a turnover of 354.27 billion VND (21.5 million USD).
Most codes saw minimal activity, except for Sacombank (STB), with orders for 2.75 million shares.
Among blue chips, FPT, Vincom Joint Stock Co (VIC) and PetroVietnam Drilling (PVD) increased slightly, while PetroVietnam Finance (PVF), Pha Lai Thermal Power (PPC) and Vinamilk (VNM) all declined.
Foreign investor transaction levels were also modest, with 1.6 million units sold and only 605,000 shares bought. Net sales values reached 27.7 billion VND (1.7 million USD) for the day.
The Vietnam International Securities (VIS) analyst department said that investors remained unconvinced by recent Government efforts – such as prime rate cuts – to support the domestic market and economy but were paying a great deal of attention to global developments.
“There’s little motive for the market to go up this week,” said VIS analysts. “The US economy faces recession and needs more rescue plans.”
“The market is still in a downward trend, as the world financial crisis, especially the US situation, has not seen a clear way out,” wrote Dai Viet Securities in a report. “However, it is not likely that the market will slump sharply further; an overly depressed market would stimulate investors ‘greed’.
The An Binh Securities analysis department expected the VN-Index to be steady, ranging between 313 and 342 this week. It noted that the market was still feeling significant pressure from foreign investor sales.
“The only bright point for the market in the current downtrend is the improvement in trading values,” said a Hanoi Securities report. “This shows that many investors are waiting for opportunities and ready to enter the market.
In Hanoi Nov. 24, the HASTC-Index also held steady, gaining a mere 0.59 percent to end the day at 104.51 points. About 7.5 million shares changed hands for a total value of nearly 159 billion VND (9.6 million USD).
Asia Commercial Bank (ACB) led the northern market but with only 792,000 shares, followed by Kim Long Securities (KLS) with 732,000 shares traded.
Investment bank finances coffee export
The Bank for Investment and Development of Vietnam (BIDV) will provide a loan of 800 billion VND for the Tay Nguyen Coffee Import-Export Co. to support the latter’s export activities.
The coffee exporter said on Nov. 24 that BIDV’s loan is expected to facilitate its activities amid coffee prices’ fluctuations and upheavals in the world financial market.
The Tay Nguyen Coffee Import-Export Co. is one of the world’s leading Robusta coffee exporters, with its average export volume reaching 160,000 tonnes a year. The company plans to ship abroad 200,000 tonnes of coffee in the 2008-2009 crop.
Local banking service provider scoops int’l award
Kieu Hoi Dong A (East Asia Remittance), a subsidiary of the East Asian Joint Stock Bank has been presented with an award for the “Best support in Product launch” by the US-based company MoneyGram, the world’s leading payment services provider.
At a workshop attended by MoneyGram’s agents in the Asia-Pacific region, the company presented the award to the eight partners that provided the most effective assistance throughout the launch of its new MoneyGram service. Kieu Hoi Dong A was the sole Vietnamese partner to receive the award.
In August of this year, Kieu Hoi Dong A and MoneyGram agreed to cooperate in the launch of a new door-to-door money transfer service.
Manpower establishes partnership with MoLISA
Manpower Inc., a world-leading employment services provider, has entered into a partnership with the Ministry of Labour, War Invalids and Social Affairs (MoLISA) in order to create employment opportunities and stimulate economic development in Vietnam .
A memorandum of understanding (MoU) formalising the three-year partnership was signed between Manpower and MoLISA representatives in Hanoi on Nov. 24.
Under the MoU, Manpower and MoLISA will jointly implement a pilot project regarding employment services, in addition to organising a series of seminars and research programmes to promote the exchange of information covering international practices and experiences.
Speaking at the signing ceremony, David Arkless, Manpower’s Senior Vice President of Global Corporate Affairs, said this partnership is a tremendous milestone as it combines Manpower’s global expertise in labour markets and employment services with MoLISA’s thorough knowledge and insight of Vietnam ’s labour market policies.
According to David Arkless, Manpower made the decision to invest in Vietnam following the country’s recent rapid economic development and its increasingly important future role on both regional and global stages.
Manpower’s investment in Asia ’s most dynamic emerging economy will generate numerous sustainable jobs for those in need, he added.
MoLISA Deputy Minister Nguyen Thanh Hoa expressed his hope that this cooperation with Manpower will help Vietnam to build a skilled and competitive labour force, thus increasing its attractiveness to foreign investors.
Manpower Vietnam plans to open its head office in Hanoi .
Manpower Inc., which owns total assets of 21 billion USD, has a network of 4,500 offices in 80 countries and territories worldwide.
French strategic partner assists SeABank
France ’s Societe Generale, strategic partner of the Southeast Asian Joint Stock Commercial Bank (SeABank), has provided a team of experts to assist the latter in business administration and risk control procedures.
According to the SeABank, Societe Generale will also assist the SeABank’s in the formulation of strategies to improve its services, expand its networks and ensure the professional development of its personnel.
This move is part of an agreement on comprehensive strategic cooperation and technical assistance between the SeABank and Societe Generale.
In August 2008, the French bank, one of Europe ’s leading financial and banking groups, officially became the SeABank’s strategic partner, purchasing a 15 percent stake in the Southeast Asian bank.
With a 144-year history, the Societe Generale Bank now owns total assets of over 1.68 trillion USD, employs 150,000 staff, and can boast 30 million clients and a network covering 85 countries worldwide.
Despite the global financial crisis, the bank posted post-tax revenues of 1.74 billion Euro (2.6 billion USD) for the first half of 2008.
Hai Phong port strives for 13.8 million tonnes of cargo
Hai Phong port is trying to handle 13.8 million tonnes of cargo by the year-end to gain 860 billion VND in turnover ( 16.6 percent higher than the initially-set target) , according to the Hai Phong Port One-Member Ltd. Company.
The company is expected to contribute 46.1 billion VND to state budget and invest 253 billion VND in production development.
To achieve the objective, the port authotity plans to renovate and reorganise production and management toward specialisation so as to meet the port’s development requirements in line with the market mechanism.
They also plan to build a new model for the port on Dinh Vu peninsula. According, the company has invested 185 billion VND in a number of construction works; expanded the application of information technology in port management, exploitation and security in order to raise the port’s competitiveness against the regional ones.
Forits efforts, Hai Phong port has become an official member of the International Sea Port Association, which is expected to facilitate its integration into the regional and international economy.
Online payments open nation to e-commerce
A new online payment portal, PayNet, is set to open up the world of e-commerce in Vietnam after being launched at a ceremony on Nov. 22.
Paynet chief executive officer Nguyen Chien Thang, said he was optimistic about the development of the online payment system in Vietnam over the next few years.
Vietnam currently boasts more than 60 million mobile subscribers, 15 million bank accounts and more than 20 million people access and use the internet. That means huge potential for online payment service providers, he said.
Paynet online payment portal, which could be reached at http://netcash.paynet.vn , will function similarly to Paypal in the United States , which has more than 160 million accounts globally, or to Chinese Alipay that has around 100 million online payment accounts.
In order to ensure the privacy and security of sellers and buyers, the portal is made based on OpenWay’s Way4 technology. Buyers can make online transactions via the portal without having bank accounts, Visa and Master Card like other portals in Vietnam .
Each customer will set up an account with a private code number, to be able to do online shopping. All the money that buyers put into the account will be deposited into banks after being transferred to sellers. All transactions will be followed up with email or SMS mobile phone message.
Present, the portal is on a trial run at e-commerce floor www.hlink.vn .
Thang said he hoped the portal would soon become a standard system and would make an active contribution to fostering the development of online payments in the country.
According to the Ministry of Industry and Trade, 30 of the country’s 63 cities and provinces have approved e-commerce development plans, and a number of leading international firms in the field of electronic payment systems have targeted the Vietnamese market.
The expansion of e-commerce has been made easier by the creation of a legal framework. The Law on Electronic Payments was passed in 2006. The Government also issued Decree No. 57/2006/ND-CP stipulating that electronic documents have the same legal validity as traditional paper documents. The decree applies to all commercial activities such as soliciting and accepting offers and signing and implementing contracts.
The e-commerce sector, however, still has hurdles to overcome. They include poor network security, a common distrust of e-commerce among the general population, a relatively new and untested legal framework, and the lack of a comprehensive and reliable goods delivery system.
100,000 tonnes of rice be exported to Malaysia
Vietnam Southern Food Copt., Vinafood II, will export 100,000 tonnes of 5-percent-broken rice to Malaysia at the price of 460 USD per tonne, according to a contract it has concluded.
Under the contract, the largest one in the last two months, the rice will be delivered between now and December with the seller paying the freight (CF).
Vietnamese free-on-board (FOB) rice of the same quality has recently been offered at between 390-400 USD per tonne, compared to 380 USD per tonne early last week.
Vietnam railway group to be formed
The Vietnam Railway Corporation will be reorganized into the Vietnam Railway Group, according to the Strategy for Railway Transportation Development by 2020, which has been approved by the Prime Minister.
The Vietnam Railway Group will be an umbrella group and will operate under the holding-subsidiary model.
The holding company will be state-owned and responsible for administration, organization and maintenance of the group’s transport activities.
Subsidiary companies will operate their own independent account systems but will have close ties with the holding company in terms of brand, capital, technologies and other various fields.
Electrical equipment firm exports $1 mln worth transformers to Cambodia
The Vietnam Electrical Equipment Company (THIBIDI) yesterday dispatched over 400 transformers of various capacities to the Electricity Corporation of Cambodia.
The export comes under a US$1 million contract to develop the rural electricity network in Cambodia.
This takes THIBIDi’s transformer exports this year to US$3 million, three times the last year figure.
Trade ministry wants rice smuggling from Cambodia stopped
Minister of Industry and Trade Vu Huy Hoang has called on the agriculture ministry and other agencies to prevent smuggling of rice into Vietnam from neighboring Cambodia.
It is estimated that 1,000 tons of Cambodian paddy have been illegally entering southern provinces every day in the last two months.
A rice retailer in the Mekong Delta said more and more people prefer Cambodian rice because of its good taste and low prices. It costs VND5,000-6,000 per kilogram.
Huynh The Nang, deputy chairman of the An Giang Province People’s Committee, complained about the fact that in the delta high-quality rice is only grown for export. He said it is time provincial authorities switch their attention to local demand.
Agricultural and trade authorities should reconsider the structure of rice exports and local markets and come up a proper plan to boost the upcoming winter-spring crop output to serve both markets, he added.
Seafood exports reach US$4 billion
Vietnam’s total seafood exports hit US$4 billion, according to the Vietnam Association of Seafood Exporters and Producers (VASEP) on November 21.
This is a great achievement for the seafood sector in 2008 because many experts said that it would be very difficult to fulfill the set target due to the global financial crisis.
Currently, frozen shrimp, tra and basa catfish, and cuttle-fish have retained a high export growth rate. Over the past 10 months, frozen shrimp has accounted for 35.4 percent of total seafood exports with 158,527 tonnes worth US$1.354 billion, while tra and basa catfish made up 32.4 percent with 550,000 tonnes, worth US$1.24 billion.
The EU ranks first among Vietnamese seafood importers and accounted for 25.3 percent of the total seafood exports worth nearly US$970 million.
Optimism shown at HK fair
The HCM City Association of Property Businesses (HAPB) was one of a number of Vietnamese real- estate developers who attended the MIPIM Asia 2008 exhibition, which took place in Hong Kong from November 19-21.
The event, the third regional real-estate exhibition, attracted over 2,000 businesses from over 50 countries and territories, 611 of whom displayed their products.
Le Huu Duy, from the HAPB, told the Vietnam News Agency that many foreign real-estate developers were gathering information about implementing major projects in Viet Nam and displaying an interest in the market, despite the current bleak financial picture.
During a workshop on Viet Nam last Thursday, participants were optimistic about the Southeast Asian market’s future, praising the recent measures taken by the Vietnamese Government to stabilise the economy. They also predicted that the Vietnamese economy, particularly its property market, would stay the course in the future.
Interest-rate cuts not big enough to attract real-estate investors
Although commercial banks have slashed interest rates, property buyers in HCM City remain uninterested because the rates are still too high for most of them and the market is showing no signs of a revival.
Lending rates have dropped from 18-19 per cent to 15-16 per cent per year while the director of a city real-estate company, who declined to be named, said although housing prices were currently 50 to 60 per cent down, there were few transactions. Though banks have cut rates to as low as 15 per cent, he said he did not dare to borrow to invest in real estate.
"Hundreds of houses and land plots remain unsold. If I continue to buy more houses and no one buys them, I cannot pay interest," he said.
This is a common sentiment among businesspeople many of whom, in any case, already owe money to banks after the property-market crash. Some analysts said interest rates were still too high to make profits. Le Hoang Chau, chairman of the HCM City Real Estate Association, said at such high rates, only those who desperately needed capital would borrow.
However, banking analysts have said banks would continue to cut interest rates.
The real-estate market is likely to recover between 2009 and 2011, property analysts said.
HCM City to help promote SMEs
The city will support small-and medium-sized-enterprises (SMEs) in the coming period with trade fairs and exhibitions that will promote high quality products and services provided by the sector, a senior official has said.
Nguyen Van Lai, director of the HCM City Department of Industry and Trade, said that these events would help the sector get information and find new export markets, business opportunities, potential customers and partners.
Many activities and events organised by the city’s Centre for Investment and Trade Promotion have seen about 70 foreign delegations from 15 foreign countries and 233 businesses visit the city so far this year to explore business and investment opportunities.
HCM City attracted more than US$8 billion in foreign direct investment (FDI) in the first nine months of the year, a sixfold increase over the same period last year, the centre announced at a review meeting held recently.
It began the year with meetings between Government representatives and officials from the Association for American Business in Singapore (Singapore Amcham) to open investment opportunities in the field of infrastructure, including roads, ports, airports and energy.
A recent investment and co-operation forum organised by the centre drew the participation of more than 300 Vietnamese and Spanish businesses.
At these meetings and events, city officials committed to help investors in sorting out site clearance problems and guide them in the implementation of investment procedures.
The centre said it planned to co-operate with the Japan External Trade Organisation (Jetro) in the near future to hold events designed to promote exports and attract FDI.
