Business in brief 20 Oct 2011
Vietnam’s gross domestic product is expected to expand 6% this year, Prime Minister Nguyen Tan Dung said Thursday, with a target for 2012 of 6% to 6.5%. Mr. Dung, speaking at the opening session of a biannual meeting of the National Assembly, the country’s lawmaking body, said the consumer price index is expected to rise 18% this year. The government’s goal is to cap inflation at 10% in 2012 and 5% to 7% in 2015, he added. Mr. Dung said this year’s budget deficit will be 4.9% of GDP, compared with an initial target of 5.3%. The assembly meeting, scheduled to end Nov. 26, will also discuss economic targets for 2012 and the 2011-15 period.
Vietnam aims to limit its trade deficit to no more than $10 billion next year, the National Assembly said in a document handed to reporters at a briefing in Hanoi today. The trade deficit will be kept at below 10 percent of the country’s total exports in 2012, according to the document. The nation will also aim to keep its budget deficit at below 4.5 percent of gross domestic product, and limit public debt to no more than 60 percent of GDP in 2012.
The Danish government today announced $135 million in ODA for Vietnam to focus on green growth in 2011-2012. According to the statement released by Danish embassy in Hanoi, in the coming years Denmark will have strong focus on green growth, including clean water, energy efficiency, research, climate change adaptation. Funding will be provided for improving the quality and access to drinking water for poor households at the same time reducing the loss of water. Research will be undertaken related to climate change topics. Denmark will continue funding the National Target Program on Climate Change and possibilities as regards wind energy will be pursued. The ODA funding will be combined with transferring high quality, cost-effective and environmental-friendly technologies from Danish companies to their Vietnamese partners within waste management, solar energy and wind power.
The 11th Vietnam Int’l Textile and Garment – VTG opened at the Saigon Exhibition and Fair Centre in October 19 and will run until October 22. The event attracted 230 businesses from fifteen countries and territories. Many big companies, such as Brother, Calmat, Cixing, Chee Shiang, Van Su Loi, Namoto, Taiwan Giu Chun, and Yow Jih displayed their latest products and technologies in the textile and garment sectors. The Ministry of Industry and Trade said Vietnam earns more than US$1 billion from textile and garment exports each month. The country’s total garment exports reached US$9.1 billion in the first eight months of this year, and are expected to hit US$13-13.5 billion by the year’s end. Three key markets of the Vietnamese garment products are the US (accounting for 51% of total exports), the EU (17%) and Japan (12%). During the exhibition, a seminar on leading techniques and technologies in the garment sector was held.
The 2011 Vietnam International Industrial Fair (VIIF) opened at Hanoi’s Vietnam Exhibition and Fair Centre on October 19. Covering an area of 6,500sq.m, the fair attracts 150 Vietnamese businesses and 100 foreign enterprises. On display are machinery, equipment and technology for mining, automation, and measurement as well as cutting edge industrial products for mechanics, electricity, electronics, and telecommunications. In particular, the United Nations Industrial Development Organization (UNIDO) in coordination with the Vietnam Chamber of Commerce and Industry (VCCI) will organize an area for support industry products.
Anglo-Russian joint venture TNK-BP Ltd. Said Wednesday it has been granted a license to operate Vietnam’s offshore gas production Block 06-1, which it agreed to buy from BP PLC (BP) last year. TNK-BP’s 35% stake in the block, which contains the Lan Tay and Lan Do gas condensate fields, will bring the company’s daily production in Vietnam to 17,000 barrels of oil equivalent, TNK-BP said in a statement. TNK-BP, which is half-owned by BP, last year signed a deal to buy a stake in the block along with a 32.7% stake in the Nam Con Son pipeline and terminal and a 33.3% stake in the Phu My 3 power plant from the U.K. oil major. The latter two acquisitions are still subject lender and government approval, TNK-BP said.
Research and Markets has announced the addition of the “Vietnam Sourcing Report: Garments 2011” report to their offering. An optimistic outlook prevails across Vietnam’s garments industry as its exports continue to fare strongly despite the sluggish global economy. As a whole, foreign shipments have been steadily expanding over the past 10 years. Growth has become more pronounced since 2007, however, with large customers increasingly shifting from China to Vietnam, which is considered to be a more cost-effective alternative. The development of the sector has propelled the country to turn into one of the world’s leading supply centers for garments. Prominent apparel and retail brands are among the numerous clients being catered to by domestic manufacturers. This report focuses on the main types of garments from Vietnam – casual wear, formal wear, sportswear, baby & children’s wear, and underwear & sleepwear.
E.Sun Financial Holding Co yesterday said it aims to expand into China, Singapore and Vietnam next year to capitalize on the region’s growing demand for corporate banking and wealth management services. “Overseas expansion in China, Singapore and Vietnam sits on top of the company’s agenda next year,” E.Sun Financial president Joseph Huang said on the sidelines of a public function. E.Sun Bank is also looking to upgrade its representative office in Vietnam into a full branch to take advantage of the country’s fast-growing need for banking services, Huang said.
The Electricity of Vietnam posted a loss of 31.5 trillion dong as at June 30, 2011, including 23.647 trillion dong loss made in 2010, the local newspaper Sai Gon Giai Phong reported on October 18. Prime Minister Nguyen Tan Dung has ordered the Ministry of Industry and Trade (MoIT) to issue and publicize electricity prices (buy and sell) from different generators (hydropower plants, thermal power plants), and to work with the Ministry of Finance to work out solution for electricity prices. The PM also ordered investigation and evaluation EVN’s investments in securities, banks, insurance and in EVN Telecom. EVN is reported to have invested 2.1 trillion dong or 2.8 percent charter capital in noncore businesses.
Viettel has officially launched a production line of electronics and telecommunications worth over VND200 billion ($9.5 million). The line is designed to develop 5 million 3G USB, 3 million mobiles and 900,000 computers per year to sate Viettel’s domestic and international market demand. This will be the first modern production line in Vietnam to produce mobile phones, tablet computers and networking infrastructure.
In the first nine months of this year, the Ministry of Finance has fined enterprises VND272 billion (US$13 million) for violating transfer pricing rules. It also collected VND978 billion ($47 million) in tax, a press conference heard on Tuesday. The ministry said it planned to increase inspections and strictly punish those that violated price transfer rules in the remaining months of this year.
The Vietnam Association of Seafood Exporters and Processors (VASEP) said that 70 out of 100 small-scale tra fish processing plants in Cuu Long (Mekong) Delta provinces had closed. It said the plants closed when the price of tra fish soared due to falling supplies caused by flooding and pollution in the region. The tra fish price is currently about VND27,500 (US$1.3) per kilo, up VND5,000 ($0.24) since the beginning of the month.
Vietnamese firms exported goods worth US$94.35 million to Mexico in August, a year-on-year rise of 28 per cent, according to the Vietnamese embassy’s Commercial Office. In the first eight months of this year, Vietnamese exports to Mexico reached $622 million, up 21 per cent over the same period last year. Meanwhile, imports from Mexico in the first eight months dropped 20.5 per cent to $41.5 million.
The Vietnam National Administration of Tourism (VNAT) and the Vietnam Tourism Association jointly presented the 12th Vietnam Tourism Awards 2010 to top-performing firms. At the ceremony on Monday in Ha Noi, Nguyen Van Tuan, the VNAT’s director, presented certificates of merit and commemorative cups to 50 companies that included the top 10 five-star hotels and the top 10 international travel companies. Vietnam is aiming to attract 10 million foreign visitors in 2020 and 18 million in 2030. The country has targeted tourism earnings of US$18 billion in 2020 and $36 billion in 2030. Some awarded hotels included New World, Caravelle, Renaissance Riverside, Vinpearl Resort and Spa and Ha Noi Daewoo.
The Haier Group and SANYO Electric Co on Tuesday signed an agreement for Haier to acquire SANYO’s washing machine and consumer refrigerator businesses in Japan. Under the deal, Haier will also acquire electrical appliance businesses in Indonesia, Malaysia, the Philippines and Vietnam. The transfer of the business will take place between January and the end of March in 2012, according to a Haier press release. Haier will implement a dual-brand strategy, with the Haier and SANYO in Southeast Asian markets and the Haier and AQUA in Japan.
Vietfund Management saw the net asset value (NAV) of its three managed funds decline by nearly VND51 billion (nearly US$2.5 million) during last week. The Vietnam Securities Investment Fund (VFMVF1) decreased by VND33.5 billion ($1.6 million) to a NAV of VND1.5 trillion ($72.3 million), while the Vietnam Blue Chip Fund (VFMVF4) lost VND13.9 billion ($670,500) to a NAV of VND530.5 billion ($25.6 million). Vietnam Active Fund (VFMVFA) saw its NAV decline by VND3.6 billion ($173,660) to VND183 billion ($8.8 million).
HCM City Infrastructure Investment Co (CII) has reported a third-quarter profit of VND79.9 billion (US$3.86 million), doubling last year’s figure for the same period. However, total profits for the first nine months of the year reached only VND147 billion ($7.1 million), a year-on-year decrease of 53 per cent. CII shares closed down 3.7 per cent yesterday to VND20,800 per share.
Real estate developer Long Hau (LHG) has registered to sell 5 million shares to its strategic partners, including investment firm Jaccar Holdings, Au Viet Securities Co, South Sai Gon Development Corp and Tan Binh Industrial Park MTV Co Ltd. The price of shares in the issuance will be no less than VND25,000, and the money raised will be contributed to the Long Hau 4 Industrial Zone project.
