Business in brief 27/7
Vietnam’s consumer price index (CPI) in the first seven months of this year is expected to increase 9.25% year-on-year, said a report of the General Statistics Office of Vietnam on July 24. The July’s CPI is expected to be up 0.52% against June, said the report. The office said that the increase of CPI in July was mainly due to the high costs of input materials and imported materials including coal, electricity, and oil. Among ten groups of goods and services used to calculate the CPI in Vietnam, the transport and communication cost is estimated to see the highest increase by 3.05% month-by-month. It is followed by the 1.89% month-on-month price growth of housing and construction materials. Other groups are expected to see a slight increase including culture, sport and entertainment by 0.45% and household appliances and goods by 0.37%, said the report. The price of food and foodstuff is estimated to decrease by 0.05% compared with that of June, said the report.
About 1.8 million foreigners visited Vietnam in the first half of the year, down over 19% compared to the same period last year, according to the Vietnam National Administration of Tourism (VNAT). Nguyen Manh Cuong, deputy general director of the VNAT under the Ministry of Culture, Sports and Tourism said that the decline was attributed to the impact of the global financial crisis and the A/H1N1 flu epidemic. However, the VNAT forecast that the number of foreign tourists to the country is likely to increase again once the world economy recovers late this year and early 2010. Currently, along with short-term policies under the tourism stimulus program, the tourism sector has been asked to create a roadmap to promote tourism in the long-term. Businesses have been also urged to fully tap Vietnam’s traditional cultural assets to attract more tourists.
Foreigners working for three months or more in Vietnam without a valid work permit could be sent home once a draft decree released this week takes effect. Employers would be fined VND15- 20 million (US$842-1,123) for failing to have valid permits made for their foreign employees, stated the draft released by the Ministry of Labor, Invalids and Social Affairs. Also, recruiting foreign workers without reporting to the city or provincial labor agency would result in fines of VND20-30 million or criminal charges against the employers. The same fines would be levied on foreign employers found abusing their laborers, according to the draft. The ministry is gathering opinions from concerned agencies before submitting the draft to the Prime Minister.
Prime Minister Nguyen Tan Dung has signed a decision to approve a protocol on Vietnam’s admission to the Advisory Centre on WTO Law (ACWL). The PM asked the Ministry of Foreign Affairs to finalise procedures in line with the existing regulations, and the Ministry of Finance to pay membership fees on request from the Ministry of Trade and Industry.
Vietnam’s foreign debt stood at 29.8 percent of its gross domestic product in 2008, down from 32.5 percent in 2007, according to the latest finance ministry figures. Of the US$21.8 billion taken in loans last year, the government borrowed $18.9 billion while the remaining $2.9 billion went to businesses, the ministry said. Almost 42 percent of the loans were yen-denominated as Japan was the biggest lender, with loans worth $6.77 billion. Loans denominated in Special Drawing Rights, an International Monetary Fund-managed asset based on a basket of international currencies, accounted for 27.4 percent. Dollar and euro loans stood at 16.6 percent and 10.68 percent respectively. Vietnam had to pay $424 million in interest and loan fees last year.
Vietnam’s January to July rice exports surged 46.3 percent from the same period last year to an estimated 4.28 million tons, the government said on Friday (24 July 2009). The General Statistics Office estimated the seven-month rice exports would bring in $1.98 billion, or 4.4 percent more in revenue than a year earlier. The export volume so far this year represents 85.6 percent of the government’s rice shipment target for the year of 5 million tonne. Vietnam is the world’s second largest rice exporter after Thailand. Exports this year could reach a record 6 million tons. Exporters have contracts for 5.4 million tons and top export firm Vinafood 2 has been in talks to sell up to 500,000 tons to the Philippines.
Chevron Corp., the second-biggest US energy company, Mitsui & Co., and Vietnam Oil & Gas Group signed an initial agreement for a US$4 billion project to develop offshore natural-gas fields in Vietnam. Under the non-binding accord, the three companies together with Thailand’s state-controlled PTT Exploration & Production Ltd., will start design work for the project to develop two blocks named B&48/95 and 52/97, Mitsui Oil Exploration Co., a unit of Tokyo-based trading house Mitsui & Co., said in an e-mailed statement Friday. Chevron’s Vietnamese unit, holding a 42.38 percent stake in the B&48/95 block and 43.40 percent in 52/97, is the operator of the project, which entails production of natural gas and construction of pipelines, according to the statement. Commercial production is slated to begin in 2014.
Lam Dong Province’s Bao Lam District will have over 3,000 hectares of grafted coffee bushes by next year, according to the district government. Accordingly, the Bao Lam People’s Committee will provide seedlings - the first-generation (F1) coffee grafted onto the Liberia coffee (coffea excelsa), and send experts to show cultivating techniques to farmers. Nguyen Van Trieu, chairman of the committee, said the grafted coffee is impervious to drought, disease-resistant and yields large beans which ripen evenly. This tree yields 7-8 tons of coffee beans per hectare, two times the output of the current breed, and is a favorite of many farmers, he added. According to Trieu, Bao Lam is the first district to be selected to grow this kind of coffee on a pilot basis.
DP World, the Dubai-based port operator, on Tuesday (21 July 2009) said it will open a new terminal in Ho Chi Minh City’s Nha Be District in October. DP World said in a statement the terminal will be located 15 km north of the city and well-placed to serve the city itself, but also the surrounding industrial zone. The terminal will handle cargo that currently moves through several ports on the Saigon River that will likely be closed down in the next several years. DP World owns 49 terminals and 12 developments in 31 countries, making it one of the largest marine terminal operators in the world.
Saigon-Quy Nhon Mineral on July 24 held the inauguration ceremony of its large, modern titanium slag plant in the central province of Binh Dinh. The plant cost VND1 trillion (US$57 million) to build and covers ten hectares. With a capacity of 60,000 tons of titanium slag and 30,000 tons of iron by-products a year, it is expected that the plant’s operations will contribute hundreds of billions of dong per year to the State budget. Binh Dinh has three titanium processing plants operating with a capacity of over 100,000 tons of titanium slag and over 50,000 tons of by-products a year.
The Su Tu Vang (Yellow Lion) - Su Tu Den (Black Lion) – Rang Dong gas pipeline was officially opened on July 24, said Vietnam Petroleum (PetroVietnam). A view of Bach Ho (White Tiger) offshore oil rig in Ba Ria- Vung Tau Province.The Bach Ho gas field is an important energy resource with a total output of 1.5-2 billion cu.m of gas per year. The project is part of an integrated gas line project, providing pipeline links from gas fields to the coast, and adding more gas to the Bach Ho Integrated gas project. The gas pipeline system will transfer around 1.25 million cubic meters of gas per day from the Su Tu Den and Su Tu Vang gas fields, as well fields from Cuu Long to Rang Dong and continue onto to Bach Ho (White Tiger) through Rang Dong- Bach Ho gas pipelines.
Visiting Australian Minister of Trade Simon Crean on Friday (24 July 2009) pledged US$9.8 million to help Vietnam meet the requirements of World Trade Organization (WTO) membership. The Australian minister said the funding was part of the five-year Beyond WTO program focused on the "capacity-building needs" of Vietnam after joining the WTO in 2007. The aid is aimed at strengthening Vietnam’s market economy and assisting the rural sector adjust to the changes, an Australian Embassy news release said. Beyond WTO is a joint initiative of the Australian, British and Vietnamese governments and the World Bank. The Australian trade minister also said his government would fund the Vietnam Agriculture Cooperation Program to help Vietnam improve pest risk analysis and pesticide residue detection to comply with international standards for traded goods.
Vietnam’s Export-Import Commercial Joint Stock Bank (Eximbank) signed a technical service contract with Japan’s world-leading Sumitomo Mitsui Bank (SMBC). Under the contract, the SMBC will share experiences with Eximbank in modern banking management, provide advanced technology, help create a sustainable development strategy, and promote the application of information technology and security systems, thus improving the bank’s competitiveness in the local market. The contract will help Eximbank implement its development strategy and facilitate the expansion of the banks retail and business banking services, along with enhancing risk management, corporate management, and information technology, as well as providing training at international-standards, said Truong Van Phuoc, Eximbank General Director.
The new general director of Liberty Insurance said he was upbeat about the growth of the non-life insurance sector in Vietnam. According to a study released last month by Global Market Research & Consultancy Company (RNCOS), the non-life insurance sector in Vietnam will grow by 25 percent from 2009– 2013, despite the global economic slump. Carlos Vanegas told reporters on Thursday that there was ample opportunity for insurance companies to invest and compete in Vietnam. Liberty Insurance does not offer life insurance.
A shortage of phone numbers has lead Vietnam to impose a limit on the number of phones that each customer can own. The limit is hardly onerous though, with each person limited to just three SIM cards each. "Because the number of mobile phone numbers is limited, the telecom resources must be put into effective use," the government said in a circular seen by the Reuters news agency. According to estimates from the Mobile World analysts, the country has 73 million active mobile phone users, which represents a population penetration level of 84.4%. The country is reported to have 111 million recorded phone lines, although that figure would include SIM accounts that are no longer counted as active by the operators.
Jerr-Dan Corp., an Oshkosh company and a leading manufacturer of towing and recovery equipment, announced that it has received an order for 14 vehicles - 12 Jerr-Dan HPL-3560 standard-duty wreckers and two Jerr-Dan MDL 320 medium-duty wreckers. The Vietnam Ministry of Public Security, Police Department ordered the trucks, which will be delivered and placed into service in Hanoi this fall. "This order from the Vietnam Ministry of Public Security is testament to the strength of our products, and we look forward to serving our customer in Vietnam with the reliable wreckers," said Wilson Jones, Oshkosh Corporation executive vice president, Fire & Emergency and interim president of Jerr-Dan Corporation. "We continue to make inroads throughout Southeast Asia with sales such as these that demonstrate the increased awareness and preference for our towing and recovery vehicles that have always been recognized for their outstanding reliability and durability in the United States."
