Business in brief 7 Oct 2011
Vietnam’s sugar production may reach 1.4 million tons this crop year compared with 1.15 million tons a year earlier on the back of an increase in planted area under cane and higher yields, Vietnam Sugar and Sugar Cane Association General Secretary Nguyen Hai said Friday. Vietnam, which usually imports sugar from Thailand and Brazil, may not have to import any in the crop year that began Sept. 1, as domestic production will likely match local consumption, he said. Vietnam’s harvest season usually runs from September to July, he said. But crushing started Aug.1 this year due to favorable weather, he added.
Vietnam’s garment and textile sector is likely to achieve the target of $13.2 billion worth of export turnover in 2011, even it may exceed the target to touch $13.5 billion this year, said Le Tien Truong, deputy general director of Vietnam Garment and Textile Group (Vinatex), while addressing a press briefing with the Ministry of Industry and Trade (MoIT). Truong said that in the first months of this year, garment and textile sector has posted satisfactory growth. Till the end of September 2011, the country’s export turnover for apparel products reached $10.5 billion, rising 32% from the same period last year. However, from September 2011, the growth started to slow down from previous months with actual export turnover in September at only $1.3 billion, lower than $1.6 billion in August. The reason was attributable to the decline in consumption of some key markets such as the US and EU.
Production and business activities of footwear enterprises have been more favorable after the European Commission (EC) terminated anti-dumping duties on Vietnam’s leather shoe products and the country’s footwear export turnover this year may reach $6 billion, according to the Ministry of Industry and Trade (MoIT). Particularly, in Jan-Sept., the country’s export turnover for footwear products earned some $4.76 billion, rising 30.8% from the same period last year. Basing on this figure, Vietnam Leather and Footwear Association (Lefaso) forecasts the country’s footwear export this year is likely to reach $6 billion as targeted by early this year. Currently, some biggest foreign buyers for Vietnam’s footwear products are the US, Belgium, Italy, France and Spain. New importers such as Portugal, Philippines and Thailand also have reached higher export growth rate from the same period last year.
Modern technologies, adequate Government incentives and reasonable production costs would help facilitate the development of renewable energy in Vietnam. Deputy head of the National Agency for Science and Technology Information Le Thi Khanh Van made the statement during a press conference held yesterday in Ha Noi. About 200 booths will feature information about technologies and equipment for solar energy, wind energy, hydro-electric power, bio energy, geothermal energy and the conversion and transmission of renewable energy. A conference discussing methods to export renewable energy will be held on the sidelines of the event. Renewable energy will account for 4.5 per cent of the nation’s total power supply by 2020 and 6 per cent in 2030, according to a 10-year national power development plan approved by the Prime Minister.
The State Bank of Vietnam (SBV), the country’s central bank on Friday October 7 continued to increase the interbank average exchange rate to 20,653 dong US dollar, an increase of 5 dong compared to yesterday. Thus, the inter-bank exchange rate has been raised for three consecutive days, posting a total increase of 25 dong, the highest level since May 28, 2011. The exchange rate ceiling of commercial banks today was 20,859 dong/US dollar. The US dollar selling price of Eximbank has been increased by 6 dong compared to yesterday to 20,860 dong/US dollar. Yesterday, the SBV issued Decision No. 2209/QD-NHNN about reducing the interest rate of statutory reserves for deposits in foreign currency from credit institutions at the central bank from 0.1%/year to 0.05%/year, effective from Oct. 2011. It also cut down the foreign currency deposit interest rate and treasury interest rate at the central bank from 0.1%/year to 0.05%/year, effective from Oct. 10, 2011.
The Ministry of Agriculture and Rural Development has approved a national master plan for developing the seafood industry from now until 2020. Under the plan, the processed seafood output is expected to hit about 2.1 million tons per year by 2020 with an annual growth rate of 3.5 percent and export earnings of US$10 billion. To achieve this target, the ministry said the industry will need about VND2.55 trillion in the next ten years from all economic sectors, both domestic and foreign loans and government bonds. The master plan for developing seafood emphasized the need to implement a number of projects to upgrade or build industrial-scale factories for processing seafood, buy storage and preservation facilities for ships, and set up a research center. Another focus of investment will be on training laborers, promoting trade, and developing domestic markets and technologies.
Vietnam, the world’s top robusta producer, has cut its annual coffee export projection for the calendar year 2011 to 1.12 million tons, or 18.7 million bags, from a previous forecast of 1.17 million tons, the agriculture ministry said. August’s export volume of 36,000 tons was below previous forecasts, leading to the downward adjustment for the whole of 2011, the ministry said in a report. Early last month the ministry lowered its forecast for coffee exports this year to 1.17 million tons, from 1.20 million tons projected in early August.
The Ministry of Agriculture and Rural Development (MARD) has drawn up a food security strategy to ensure a balance between production and consumption. However, economists say that Vietnam should have a macro policy based on the prospect of rice exports in the world. The Ministry of Industry and Trade (MoIT) has proposed a number of projects to improve market research and competitiveness. Vietnam is expected to export about seven tons of rice this year. By September 2011, the country already shipped 6.8 tons of rice to foreign markets, up 13.17 percent over the same period last year, according to the Vietnam Food Association (VFA). Meanwhile, the government of Thailand on October 7 announced a new price for the purchase of rice from Thai farmers, about US$498/ton, 47 percent higher than the current figure. This move has created an opportunity for Vietnam to become the world’s leading rice exporter.
Vinpearl Joint Stock Company will be officially merged into Vincom Joint Stock Co in Vietnam’s largest merger and acquisition deal to date, according to the Vingroup. Chairman of the Vingroup Management Board Le Khac Hiep said the merger aims to create stronger management, mobilize human resources and integrate business strategies. The merged businesses will operate under the name Vietnam Investment Group or Vingroup. Following the deal, Vinpearl shares, listed as VPL, will begin trading under Vincom shares, code VIC. VIC and VPL currently rank 4th and 5th on the HCM Stock Exchange in terms of capitalization with VND40 trillion (US$1.9 billion) and VND17.5 trillion (US$841.3 million) respectively.
The Vietnam Tourism Association and the Vietnam National Administration of Tourism will grant the 2010 Vietnam Tourism Awards to excellent businesses in the field on October 17. The ceremony, to be held at the Hanoi Opera House, will honor 50 leading tourism companies, including Vietnam’s top 10 five-star hotels, domestic travel firms, and international travel companies. The event is expected to provide an opportunity for businesses in the service and tourism industries to meet and exchange experience. Initially, the awards only targeted travel companies and hotels, but they have now expanded to other tourism-related services such as shopping establishments and tourist transport companies. The awards are designed to constantly boost the quality and diversification of tourism services as well as the professionalism of companies. This is the 12th year the awards will be presented.
Sapporo Vietnam Ltd. (SVL), a joint venture between Japan-based Sapporo Holdings Ltd. and Vietnam National Tobacco Corp (Vinataba), will open its brewery in Long An Province this November. The US$100-million brewery, covering an area of 6.4 hectares in Duc Hoa 3 Industrial Park, has an output of 100 million liters per year in the first phase. The maximum output of the plant can reach 150 million liters. Yuki Hattori from Sapporo Holdings Ltd. told the Daily on Wednesday that his firm currently owned 71 % of SVL instead of 65% like before. The remaining stake is held by Vinataba. Sapporo’s beer will be distributed early next year through Vinataba’s distribution channels. SVL also sets a production target of 150 million liters per year in 2019, equivalent a domestic market share of 3%.
Lee & Man Paper Manufacturer Ltd has restarted two postponed paper plant projects in the Mekong Delta province of Hau Giang as promised, Truong Canh Tuyen, a provincial official said after a recent inspection. Tuyen reported the company has leveled the ground and built a fence. It has also finished 100% site clearance as well as called for contractors to build a warehouse. Cheng Ching Kay, director of Lee & Man Vietnam, estimated it will go into commercial production in October 2013. The paper mill will cover 200 hectares, have a designed capacity of 420,000 tons per year and cost US$280 million. Meanwhile, the pulp factory covering 70 hectares with annual output of 330,000 tons will require total investment capital of US$348 million. The project kicked off construction in late 2007 and it was set to be put into operation in 2009.
