Business in brief 4 Dec 2012
The largest manufacturer and exporter of “regenerated polyester staple fiber” in Korea, Dae Yang Industrial Co Ltd, has carried out a market survey in Vietnam to find partners for consumption and distribution of its product in Vietnam. Regenerated polyester staple fiber, which is mainly used for home furniture like sofas, chairs, cushions, pillows and blankets, is lighter than cotton and cheaper than other chemical fibers. The company is also looking forward to co-operating with Vietnamese textile enterprises such as Viet Tien Corporation or Phong Phu Corporation to carry out joint projects. The Dae Yang has been exporting regenerated polyester staple fiber for more than 20 years to USA, Japan and the EU, with a production capacity of 500 tons per month, but this is the first time the company has approached the Vietnamese market.
The 7th Vietnam International Exhibition on Machinery Equipment, Raw Material and Industrial Products (Vinamac Expo 2012) will be held in HCM City from December 5 - 8 at the Tan Binh International Exhibition & Convention Centre. The show will attract 215 booths sponsored by 180 local and international exhibitors from many countries and regions, according to Vietnam Advertisement and Fair Exhibition JSC – VIETFAIR, the event’s organizer. The exhibition will offer enterprises the chance to select and source high-quality products from many developed countries as well as to promote their products and expand business networks in Vietnam.
Overseas remittances to Ho Chi Minh City are expected to hit US$3.4 billion by the end of this year, higher than last year’s figure. Nguyen Hoang Minh, Deputy Director of HCM City-based State Bank of Vietnam branch, said that most overseas remittances were channeled through credit organizations. This year’s gain came from major labor markets, including Taiwan, Japan, and the Republic of Korea. In addition, the real estate and stock exchange also contributed greatly to the increasing amount of overseas remittances, especially for the development of restaurant and hotel services.
The Vietnam-New Zealand Joint Committee for Economic and Trade Cooperation held their fourth meeting in Hanoi on December 3. The Vietnamese delegation was led by Deputy Minister of Industry and Trade Nguyen Cam Tu and the NZ delegation was led by Deputy Minister of Foreign Affairs and Trade Andrea Smith. Both sides discussed measures to increase bilateral cooperation by speeding up the implementation of signed agreements and memorandums of understanding. They agreed to accelerate negotiations for a double tax avoidance agreement and market access for Vietnamese farm produce to New Zealand. Two-way trade between Vietnam and New Zealand rose 12.6% in 2011, hitting US$535.4 million. Between January-October 2012 bilateral trade fetched US$462.3 million, a year-on-year increase of 6.3%. By September 2012, New Zealand had 18 valid projects in Vietnam with a total registered capitalization of US$76.4 million, ranking 41st amongst foreign investors in the country.
The Ministry of Agriculture and Rural Development (MARD) has asked foreign exporters to strictly adhere to its Circular 13, ensuring food hygiene and safety for local consumers. Under Circular 13, all types of imported fruits and vegetables must be carefully examined before being shipped to Vietnam. Border crossing inspections are a special priority. From December 31, 2012, Vietnam will temporarily halt fruit and vegetable imports from countries who fail to complete the specified procedures. MARD Deputy Minister Nguyen Thị Xuan said that all fruits imported into the Vietnamese market must have clear origins and meet minimum quality requirements. She revealed that Vietnam currently imports fruits and vegetables from 59 countries and territories around the world.
The number of the Republic of Korean tourists to Vietnam in November showed the highest year-on-year increase of 31.5 pct, according to the General Statistics Office (GSO). It was followed by Malaysia (up 25.6 pct), Thailand (up 24.6 pct), Japan (up 20.8 pct) and Taiwan (up 17 pct). Some markets had low augmentation, including France (up 6.5 pct), the US (up 2.7 pct), China (up 0.8 pct) and Australia (0.2 pct). In eleven months, Vietnam has received 6.5 million foreign arrivals, rising by 24.4 pct compared to October and 7.2 pct against the same period last year. In November, the number of travelers to the nation for tourism and convalescence showed a year-on-year rise of 23.2 pct, while those went for work up 28.5%, visiting their relatives up 26.8 pct and other purposes up 17.1 pct.
Singapore Airlines is offering promotional fares for travel out of Ho Chi Minh City or Hanoi to Australia, Europe and USA in either Economy Class or Business Class. The fares quoted are available until December 20, 2012, subject to seat availability, and valid for round-trip travel between January 5 and May 31, 2013, including Tet (Lunar New Year), said Erwin Widjaja, Singapore Airlines’ general manager for Vietnam. Fares quoted in Vietnam dong are inclusive of taxes, surcharges and subject to currency changes. Tickets are non-refundable but dates can be changed subject to VND1,050,000 ($50 plus) administration fee and seat availability in the promotional class. Widjaja added in order to book online with a stopover in Singapore, passengers needed to choose "Multi-city itinerary" on the Singapore Airlines homepage at singaporeair.com.
An agricultural and craft village product fair featuring more than 150 booths, has been scheduled for Hanoi between December 14 and 17. The fair, organized by the Ministry of Agriculture and Rural Development, will display premium products including safe vegetables, fruits, agro-aqua-forestry produce, processed food, fresh food, and plant varieties from and northern provinces and various craft villages. This is an excellent opportunity for enterprises to promote trade, advertise and enhance the reputation of their trademarks for domestic and foreign customers, and ultimately hopefully attract new investment to the agricultural sector. A series of seminars on developing craft villages and introducing new models and advanced technologies into existing production processes will be held during the event.
The Electricity of Vietnam (EVN) Group plans to issue bonds as a way to tackle its mounting debts. Dinh Quang Tri, Deputy General Director of EVN, said at a Ha Noi press conference on Monday: "EVN is considering and working on procedures to issue bonds worth VND9,000 billion [US$435 million] in a period of 2-3 years to repay its debts for electricity purchase". According to the Electricity Regulatory Authority of Vietnam, EVN lost VND56 ($0.0028) per 1kWh of electricity in 2011. The authority said one of the main reasons for EVN losses was the unfavorable weather conditions which affected the hydroelectric plants’ electricity production during the dry season. Other reasons given included fluctuations in currency exchange and high fuel prices which increased production costs. According to EVN, electricity production for the first 11 months of 2012 reached over 105 billion kWh, an increase of 13.4 per cent on the same period last year.
Foreign ownership in Refrigeration Electrical Engineering Corp (REE) will be adjusted down from 49 per cent to 43.7 per cent of REE’s charter capital from yesterday, the State Securities Commission announced. Foreign investors are allowed to sell but not buy unless they negotiate with one another. Earlier, REE asked to block foreign ownership in the company to save foreign room for its upcoming issuance of convertible bonds. It plans to issue VND558 billion (US$26.7 million) worth of convertible bonds to Platinum Victory Pte Ltd, a wholly owned subsidiary of Singapore’s auto distribution and retail giant Jardine Cycle & Carriage Ltd.
Bao Viet Securities Investment Fund has registered to sell nearly 3.42 million shares, equivalent to 8.68% of its stake in the Truong Thanh Furniture Corp (TTF), from December 5 to January 3, 2013. The deal will be carried out by both order matching and negotiation methods. Earlier in October, the fund registered to unload those shares but could not succeed because of lower-than-expected prices. From August to date, the fund has gradually decreased its holdings from 14.41 per cent to 8.68 per cent. During this time, TFF shares plunged 15 per cent from VND5,500 to VND3.700 a share. The shares are currently traded at VND4,500 a share.
Vietnam Bank for Social Policy successfully sold VND700 billion (US$33.5 million) worth of Government bonds, or 85 per cent of its total call, on the Ha Noi Stock Exchange on Friday. Three-year bonds worth VND500 billion ($23.9 million) were sold at an interest rate of 10.9 per cent per annum, while five-year bonds worth VND200 billion ($9.6 million) were sold at an interest rate of 11.1 per cent per annum. Since the beginning of this year, the bank has raised Government-backed bonds worth a total of VND14.63 trillion ($700 million) through auctions.
Habeco will hold an unusual shareholders’ meeting on December 7 to vote on whether the company can sell shares to Carlsberg Breweries A/S. Carlsberg Breweries A/S will buy more than 30 million shares with voting rights, equivalent to 13 per cent of Habeco’s charter capital, from state shareholders at the price of VND50,015 (US$2.39) a share. This sale, proposed by the Ministry of Industry and Trade, has been approved by the Government.
Isobar, a leading digital communications agency within the Aegis Media group, has entered the Vietnamese market by appointing Emerald Digital Marketing as its official affiliate in the country. This partnership marks the penetration of Isobar into Vietnam, one of the fastest growing digital markets. Emerald will help Isobar provide digital marketing services from consulting and strategic planning to social media. Founded in 2009, Emerald has grown rapidly in Vietnam, with a strong client list including Heineken, Samsung, BMW, Air France, Rhoto, Holcim and Ajinomoto.
The Gross Regional Domestic Product (GRDP) of the capital city is estimated to slow to 8.1 percent this year, a figure which is much lower than the set target of 10-10.5 percent. However, the local economy has achieved a higher growth rate on a quarterly basis and 1.55 times higher than the national average, said Nguyen Van Suu, Vice Mayor of Hanoi, at the Municipal People’s Council’s year-end session on December 3. The services sector is expected to gross a growth rate of 9.3 percent, construction-industry 7.7 percent, and agro-forestry-fisheries 0.4 percent. The capital’s export earnings are estimated at US$10.3 billion, a year-on-year increase of 5.3 percent, but failing to meet the set target. Its total development investment capital is estimated at VND222.5 trillion, up 13.2 percent against 2011, and not meeting the annual set target.
SATO, a leader in barcode printing, labeling and EPC/RFID solutions, has announced the official opening of its sales office in Ho Chi Minh City. For the last eight years, SATO has been operating a manufacturing factory in Hanoi and providing locally based companies auto-identification and data collection (AIDC) solutions through an established network of business partners. "Vietnam is a key market for SATO and we are no stranger to Vietnam. We have already been operating locally for a number of years and with Vietnam leading the region’s growth, technology will play a huge role in supporting the various industries in the country. To meet this growth, the opening of our office will allow us to introduce AIDC technology to a broader audience, faster. And it complements our factory which manufactures label printers and hand labelers," said Kaz Matsuyama, President and CEO of SATO Holdings Corporation.
