BUSINESS IN BRIEF 26/4

EWEC 2013 Fair to be held in Danang city

The East-West Economic Corridor (EWEC) Trade and Tourism Fair 2013 will be held at the Danang Exhibition Centre from August 9-13.

As many as 500 stalls will be set up by domestic and foreign businesses, mostly from Vietnam, Laos, Thailand, Myanmar, Japan, China, Singapore and the US to display different kinds of products related to the real estate, electronics, IT,  industrial and agricultural machinery, chemicals and fuels, wood products, textiles, tourism banks and construction materials.

They will have the chance to seek business and investment cooperation with partners.

Ninh Binh strives to increase competitiveness

The northern province of Ninh Binh needs to improve the quality of human resources, cut time spent on bureaucratic procedures, reduce informal charges and facilitate access to land for businesses.

This aims to raise Ninh Binh’s provincial competitiveness index, according to experts at a conference held in the province yesterday.

The province dropped two places to the 23rd position out of 63 cities and provinces. The annual index is based on a survey conducted by the Viet Nam Chamber of Commerce and Industry.-

Law necessary to improve function of business groups

Legislation is necessary to streamline the functioning of business groups and ensure they offer their members better support, a workshop heard in HCM City.

Speaking at the event held by the HCM City Union of Business Associations (HUBA) on Monday to improve the functioning of business groups, a delegate said there are no laws regulating industry associations, only a decree on their organisation and operation.

Because of this and a lack of mechanisms, most industry associations can only make recommendations and cannot make any decisions, he said.

Also due to the lack of mechanisms, member companies cannot establish close co-operation with each other, especially for export-related activities, which affects their business.

Delegates said HCM City has around 70 industry associations, including 30 for foreign businesses.

A survey by the HCM City Institute of Development Studies (HIDS) found that the business groups are good at providing information to their industry, making policy-related proposals, and organising seminars and fairs. But they do not offer specific and effective support to members, it found.

Prof Vo Thanh Thu of the HCM City Economics University said the number of business groups has increased rapidly and they have attracted many members.

Some of them help member companies improve their competitiveness and find export outlets, he said.

Some major associations have become a bridge linking members and authorities, enabling the two to understand and support, thus boosting development of the local economy, he said.

Many have actively provided information to members, promoted them at home and abroad, and protected their interests through international lawsuits, he said.

Thu also pointed out some of the shortcomings of the system.

The number of firms belonging to business groups remains very modest at just 35,000 out of a total of 150,000, he said.

While most industries involved in exports have associations, they have not been very effective and rely on Government support, he added.

Vu Kim Hanh, director of the Business Studies and Association Centre, said industry associations should operate with support from their members, not taxpayers’ money.

After the country’s accession to the World Trade Organisation, the associations’ role of supporting member companies has become more important, she said.

The associations should act as a forum where companies can work with each other to outline plans to develop the industry and cope with challenges thrown up by international integration, she said. They should also be responsible for conveying businesses’ inputs to authorities to help the process of policy making, she added.

Nguyen Bang Tam, chairman of the Binh Thanh District Enterprises Association, said the Government should allow associations to participate in enterprise support programmes and projects run by the Government.

Garments, textiles to lead exports if growth maintained

The Ministry of Industry and Trade forecast that textile and garments would become the nation’s top exports this year if the sector maintains the 19 per cent growth rate achieved in the first quarter.

Dang Phuong Dung, deputy chairperson of the Viet Nam Textile and Garment Association, said total export turnover of the industry reached US$ 4.2 billion and there are many good points of a recovery for the industry.

Le Tien Truong, deputy chairman of the Viet Nam Textile and Garment Group, said textile and garment exports often increased after the first quarter, predicting that they will reach record export turnover this month.

Than Duc Viet, CEO of the May 10 clothes company, said a business trip to Greece this year resulted in several contracts signed with Viscotin, 2Gether and Siamidis to export their products to Greece and on to markets in the Balkans, south-eastern Europe and the Mediterranean.

Viet said his company’s exports during the second and third quarters will increase by about 10 per cent over the same period last year.

While the company has sent its representatives abroad to seek customers, Gia Dinh Garment and Textile Company (Giditexco) has won more contracts with their formers Japanese customer thanks to the brand’s growing reputation.

According to a representative from HCM City’s Garment, Textile, Embroidery and Knitting company, prospects for export enterprises this year are bright as the global economy seems to be recovering.

Some enterprises in the city have not only enough orders for the second and third quarters, but all the way to the end of the year.

While the future looks good for exports, Vinatex Deputy chairman Le Tien Truong raised concerns over rising input costs for manufacturers such as increasing petrol and electricity prices.

Truong said rising prices required textile enterprises to improve labour productivity while increasing incomes for workers.

Truong says enterprises should also pay attention to the huge local market of 90 million people in Viet Nam as more competitors from abroad are considering this market for their garment products.

Food, hotel fair offers chance to learn from foreign players

The Food Hotel Viet Nam 2013 (FHV) exhibition opened yesterday in HCM City, offering visitors a platform to source, network and learn from market leaders of the international food and hospitality industry.

Phan Thi My Dung, vice director of VCCI Exhibition Services, said that 434 exhibitors from 35 countries and other areas were displaying their products and services, an increase of 65 per cent compared to last year.

A total of 20 exhibitors from Europe are displaying a vast selection of premium products, including cheeses, meats and wines and spirits.

Silva Rodriguez, special adviser to the European Commission’s director general for Agriculture and Rural Development, said the participation of the EU for the first time was an important sign for Vietnamese and European producers to promote quality in the international market.

Attending the US pavilion’s ribbon-cutting ceremony, David Shear, US Ambassador to Viet Nam, said that since the last show in 2011, American food and agricultural exports to Viet Nam had continued to grow, reaching a record of nearly US$2 billion last year.

“During the first two months of this year, our food and agricultural exports were up 70 per cent compared to the same period last year, and I am confident that after this show, our export sales will track even higher,” he said.

There are 21 US companies and four associations such as US Meat Export Federation; United States Potato Board; USA Dry Pea and Lentil Council; USA Poultry and Egg Export Council attending the FHV 2013.

The show, which will end tomorrow, will include a franchising seminar and the Viet Nam Culinary Challenge, Viet Nam Barista Competition, Latte Art Competition and Basic Barista Course.

Da Nang kicks off Vietbuild trade fair 2013

The International Exhibition for Construction, Building Materials, Housing and Interior Decor (Vietbuild) officially opened at the Da Nang International Exhibition Fair Centre in Da Nang City on April 24th.

The event drew the participation of more than 500 booths by 270 businesses, domestic and international, to introduce their latest achievements in new construction technologies and environmentally friendly products, helping promote convenience for consumers as well as reduce prices.

Besides, some seminars will be held during the fair to put forward measures for the construction sector to surmount the crisis period.Vietbuild Da Nang 2013 will last till April 28th.

Viglacera to expand market in Russia

The Vietnam Glass and Ceramics Corporation (Viglacera) plans to seek its counterparts and expand operations in Russia.

The corporation wants to promote sales of its major products such as sanitaryware, Granite tiles, ceramics, and high-quality tiles and bricks in Russia, says Nguyen Quang Vinh, a Viglacera representative.

Vinh said Russia has been a regular consumer of Viglacera products for the past 10 years, with the import value increasing year on year.

Many Russian businesses showed their keen interest in the corporation’s items branded Monaco, Terracade and Granite displayed at the recent Mosbuild Exhibition in Moscow.

Last year, Viglacera’s export earnings reached US$27 million, surpassing its annual plan by 10 percent.

Samsung set to increase investment in Vietnam

Samsung is planning to invest in Vietnam’s infrastructure construction and chemical production.

Shim Won Hwan, General Director of Samsung Vietnam, told Deputy Minister of Industry and Trade Nguyen Cam Tu at a recent meeting that there are many opportunities for cooperation in those areas.

Samsung has built a factory in Bac Ninh province, and expects to see another project getting off the ground in Thai Nguyen province.

Samsung is also keen to cooperate with Vietnam in the energy and high technology sectors.

Myanmar seen as lucrative market of Vietnamese goods

The Vietnam-Laos-Cambodia Association for Economic Cooperation Development VILACEAD) and the Vietnam Young Business Association held a talk themed “Myanmar – the emerging market” in Hanoi on April 24.

Vietnam’s Ambassador to Myanmar Chu Cong Phung said the Myanmar Government is determined to open its doors to economic integration and foreign investment.

Some nations have already removed the embargoes and economic sanctions against Myanmar. Vietnamese goods are popular with Myanmar’s consumers thanks to prices, durability, and designs that match or exceed comparable Thai and Chinese goods.

Soe Thet Naung, a counsellor at Myanmar’s Embassy in Vietnam highlighted his country’s bright 2013 economic outlook, adding that investment opportunities will arise through incentive schemes and law reform.

Myanmar‘s 60 million-strong population currently enjoys an average annual economic growth rate of 7 percent and an average annual GDP growth rate of 6.5 percent.

According to the Ministry of Planning and Investment’s Foreign Investment Department, Vietnam licensed seven Myanmar-based investment projects last year, capitalised at around US$460 million, ranking sixth among the 60 nations and territories operating in Myanmar.

The Vietnam-Myanmar Economic Joint Committee wants to push bilateral import-export turnover to US$500 million and Vietnamese investment in Myanmar to US$1 billion, both by 2015.

Ambassador Chu Cong Phung said Vietnam’s aviation, petroleum, and banking sectors are successfully taking advantage of Myanmar’s economic liberalisation. Myanmar is especially interested in cooperating with Vietnamese agriculture in the near future.

Chu Lai Economic Zone expects wave of FDI

Construction of the newly licenced industrial park infrastructure in Chu Lai Economic Zone in central Quang Nam province will be kicked off in August 2013

The announcement was made when the Quang Nam Provincial People’s Committee handed over an investment certificate for CN Vina Company to develop $25 million/200 hectare industrial zone in Chu Lai.

CN Vina Company, a leading South Korean developer of industrial parks, would operate the facility for 50 years.

Last year, the province signed a memorandum of understanding with this company to build a complex including an industrial park, an urban-service area and a tourism area. This complex covers on 1,600 hectares in Chu Lai Korea-Vietnam urban area. The industrial park will have an area of 700 hectares, the urban-service area 350 hectares and the tourism area 550 hectares.

By the end of 2012, the management authority granted investment certificates for 20 foreign invested projects with the total registered investment capital of $162 million.

Hanoi slumps in competitive index

Hanoi’s authorities have criticised several departments and agencies for their lack of responsibility which has led to the city’s low provincial competitiveness index (PCI).

Nguyen Van Suu, vice chairman of Hanoi People’s Committee in the review meeting on improving the city PCI during 2011-2015 criticised departments for ignoring the city’s goals.

Hanoi’s PCI was calculated based on a Vietnam Chamber of Commerce and Industry (VCCI) survey of 257 of 90,000 enterprises. According to the VCCI, Hanoi ranks 51 out of 63 cities and provinces.

The city suffers from some lowest indexes such as access to land and land use stability index is at the bottom of the ranking.

Index on time spent on state procedures ranked the city in 54th place and for dynamic and pioneering leadership is 61st out of 63.

Suu said most of the agencies had failed to draw up their own action plans in accordance with the city’s requests.

For example, the Department of Planning and Investment has not collaborated with other agencies to create and announce the list of projects that need investors.

The city authorities also asked the Department of Natural Resources and Environment to find out the reasons why the index on land access and land use stability is low. The department has been asked to review their administrative procedures and propose measures to prevent officials from harassing people.

The city’s People’s Committee Office was also reprimanded for not co-operating with other departments.

In order to improve the indexes, Hanoi authorities requested all agencies to complete their development plan in 2013 and submit them to the city People’s Committee Office or the Department of Planning and Investment by April 22.

The heads of the departments or agencies will be punished if they do not submit their plans on time.

 Hanoi’s Starlake awaits revisions

Deputy Prime Minister Hoang Trung Hai approved the municipal People’s Committee of Hanoi’s proposal to revise the master plan for the Starlake – the biggest urban development project ever in Hanoi.

Perspective of the Starlake urban residential area. The project will transform the western area of West Lake into a multi-purpose centre

The project, on which construction started last November after several years of delay due mainly to slow site clearance, would transform the western area of West Lake into a multi-purpose centre for culture, education, commerce and finance.

The Starlake area will stretch over more than 200 hectares and was chosen to accommodate a number of key ministries.

Hai asked the Committee to continue to work with relevant stakeholders to speed up the implementation of the project.

As much as US$2.5 billion will be invested in the project, all by South Korean investors. It is expected to be completed in 2019.

Food Hotel exhibition in HCM City

The Food Hotel Vietnam 2013 fair which opened in Ho Chi Minh City on April 24 has attracted the largest ever number of participating businesses including representatives of 434 enterprises from 35 countries and territories.

Sapporo Beer, one of the oldest and most popular beer brands in Japan, and many other food products of Japan are being showcased for the first time, besides an impressive pavilion of the European Union.

The exhibition, the sixth of its kind, creates opportunities for domestic and international firms to share experience and learn from the world’s leading experts in the food and hotel sector.

First organised in 2004, FoodHotel Vietnam has become one of the leading events in Vietnam, driving the development and growth of food beverage and hotel industries in the country.

These industries in Vietnam are gaining momentum, said Tee Boon Teong, Country Head Representative of Singapore Exhibition Services Company.

Malaysian company joins Vietnam’s top e-payment firm

Malaysia’s e-payment services provider, MOL AccessPortalSdnBhd, has agreed with Vietnam’s e-commerce group, PeaceSoft Solutions Corp, to share 50 percent stake in Ngan Luong Joint Stock Co.

Under the agreement, MOL and PeaceSoft will jointly operate one of Vietnam’s first online payments, together with other related e-payment services in the country, according to Malaysian National News Agency (Bernama).

The news agency quoted MOL Global Group chief executive officer Ganesh Kumar Bangah as saying that Vietnam is one of the largest Internet markets with over 31 million users in Southeast Asia,.

Opportunities for e-commerce and e-payment growth in Vietnam are great, given the rapid adoption of mobile devices and Internet usage, he said.

Meanwhile, Peace Soft Group president and chief executive officer Nguyen Hoa Binh expressed his hope that MOL will bring its global network of merchants to Vietnam.

He said Vietnamese merchants and publishers expect to sell their products directly to over 12 markets through MOL’s growing payment network.

Capital industrial production soars

Hanoi’s index of industrial production (IIP) this month increased 7.8 percent over last month, and rose 12.1 percent compared with the corresponding period last year, the General Statistics Office (GSO) have announced.

The figures released by the office show that most industrial sectors saw IIP increase on the previous month. The exceptions were the weaving sector, which dropped 12.6 percent, and the pharmaceutical chemistry industry, which saw its figure fall 0.2 percent.

The mineral industrial rose 21.5 percent, processing and manufacturing increased by 7.8 percent and electricity production recorded a 1.3 percent hike.

The IIP in the first four months of the year increased 4.9 percent over the same period last year. Key sectors are performing well, with weaving up 44.5 percent chemical production up 52.1 percent and metal production up 12.1 percent.

The office said that while the IIP is not the same as high growth rate, its rise indicates industry is remaining stable and sustainable throughout the economic difficulties.

Industrial businesses have striven to save costs by improving production technology and seeking new markets to retain their growth rate.

Intercontinental Hanoi Landmark 72 announces key fb positions

Gearing towards its opening in the third quarter of 2013, InterContinental Hanoi Landmark 72 has announced two key personnel appointments in the food and beverage department – Laurent Casteret assumes the responsibility of director of food and beverage and Eric Fettke takes charge in the kitchen as executive chef.

Laurent was born in France in the Cognac region and studied in Bordeaux up to a Master degree in International Business and Trade with a strong specialisation in wine trade. After three years as Sales and Marketing manager for a Wines and Spirits importer Celliers d’Asie based in Hanoi, Laurent’s journey with IHG started in 2007 when he joined the pre-opening team of the InterContinental Hanoi Westlake as Restaurant manager and later on, as director of food and beverage at the Intercontinental Manila and Holiday Inn Suites Makati in the Philippines.

South African Eric Fettke is a seasoned InterContinental hand, having cooked his way through Africa, Europe and Asia for InterContinental hotels over the past 12 years. Stints in Johannesburg, Poland and recently Vietnam have exposed him to a rainbow of cuisines from which he has created his own unique signature style.

Classically trained and a member of the Elite Disciples of Escoffier, he is dedicated to his art with an unwavering desire and determination to succeed, Fettke has a taste for trendy and modern cuisine with an emphasis on artistic presentation which is highlighted by his passion for using both local and seasonal ingredients.

No stranger to the high demands of the culinary field, Fettke has cooked for numerous presidential dignitaries including the likes of Nelson Mandela, Oprah Winfrey and Mick Jagger and will continue as he now takes on the reigns at the soon to open InterContinental Hanoi Landmark 72

Located in the new business district “West Hanoi”, InterContinental Hanoi Landmark 72 is the tallest hotel in Vietnam and South East Asia. The hotel features 359 luxury guest rooms with panoramic views of the city.

The hotel is a part of the Landmark 72 complex with expansive fitness spa facilities, retail shops, cinemas, offers the best for both business and leisure guests.

InterContinental Hanoi Landmark 72 boasts an extensive meeting and event facilities with a grand pillar-less ballroom of 1,000 square metres, spacious pre-function area of a similar size, fourteen meeting rooms with various configurations, all in one floor.

The hotel is scheduled to open in the third quarter of 2013.

Milking the market to keep children healthy

Locally-owned Hanoimilk is rolling out  a new type of milk expected to help improve Vietnamese kids’ health.

National Nutrition Institute and Hanoimilk last week introduced IZZI milk with S+, a new milk formula exclusively used for Vietnamese kids.

The S+, an achievement made after years of research by the institute, includes fresh milk, fat, protein, carbonhydrat, calci, iron, zinc, magie, vitamin A, Vitamin D3, lysine, palatinose and synergy 1.

The institute’s vice head Nguyen Thi Lam said that the IZZI milk S+, produced by sterilised technologies from Tetra Pak – the leading milk technological developer in Sweden, had been blind-tested over 1,100 kids of 2-15 years old in Hanoi and Ho Chi Minh City. Results showed that up to 95 per cent of the kids said this milk was tastier than other types of milk also used for the blind test.

Hanoimilk’s chairman Ha Quang Tuan said IZZI S+ would be developed into Vietnam’s top milk for Vietnamese kids. The milk had been recognised as having international quality by Karlsruhe Institute of Technology, one of the largest and most prestigious research and education institutions in Germany.

“This type of milk is very good for kids of 2-15 years old and can help improve Vietnam’s mal-nutrition because it contains all substances for a kid’s comprehensive physical development,” Tam said.

Nui Phao mining project begins operation by the end of April

Nui Phao Mining and mineral processing Company Limited (Masan Resources company, a subsidiary of Masan Group) has announced that the first product will be in the market by the end of this April.

The project began since 2004, when the Ministry of Planning and Investment issued the license to Tiberon Minerals Company.

As per the license, the company is permitted to hire the land area of four communes of Dai Tu district, Thai Nguyen province in 30 years.

Up till now, nine years have passed. However, the project really came into operation since it was transferred to Masan Group in 2012 with a new license for hiring land in 16 years since 2013 at two communes Ha Thuong and Hung Son, Dai Tu district.

Nui Phao Mining and mineral processing Company Limited so far has spent about VND 6.5 trillion to do the compensation for site clearance, initial investment and implementation of social security sub-projects.

VND 1.2 trillion was spent for compensation, supporting local residents who were affected by the mining project to find their new means of earning a living.

As a result, by Dec 2012, the Company had completed the acquisition over 98% of the land required for the Nui Phao project through land compensation agreements with 2,700 households.

It is expected that in the first year after the project putting into operation, Nui Phao company will export minerals worth US$ 100 million, creating over 3,000 jobs.

The company was also pledged to invest new techniques in processing minerals since 2014 to raise the value of exports, to protect environmental remediation and social security.

So far, more than 2,200 people in the area affected by the project have been trained, equipped with working knowledge of livestock and agricultural techniques, thus enable them to access new opportunities to find new jobs to earn their livings.

Mobile World appoints Bob Willett to the board of directors

Mobile World Investment Corp announced the appointment of Robert Willett as an independent director to provide strategic expertise in support of its major growth strategy.

Willett is currently the chairman of MetaPack in Europe, a director of LightHaus Logic in Canada, a chairman of Occa Home in Europe and a chairman of Eagle Eye in Europe. He is also an advisor to Sabanci Holdings, the parent company of Teknosa, the dominant electronics retailer in Turkey.

Willett was previously executive vice president of BestBuy Operations, and then the CEO of BestBuy International, where he led the development of the very successful BestBuy mobile phone business in the US.

He also led BestBuy’s partnership with Carphone Warehouse, the largest mobile phone retailer in Europe, where he was chairman from its inception to his retirement in January 2010. He also led BestBuy International’s investment into the Five Star electronics chain in China, and subsequently the opening of BestBuy stores in Mexico. Willett has a passion for delivering superior customer experience. He has significant international operating experience in corporate strategy, business transformation, procurement and supply chain management, brand positioning, technology transformation and customer segmentation.

Mobile World is Vietnam’s leading mobile phone retailer. The company’s TheGioiDiDong retail network has 209 mobile phone and mobile device stores nationwide, with approximately 20 per cent market share in mobile phone sales. The company’s Dienmay retail network has 12 consumer electronics stores, concentrated in southern Vietnam and Ho Chi Minh City.

Mammoth $4.3 billion Hanoi-Can Tho expressway upgrade under scrutiny

Capital planning for mammoth Hanoi-Can Tho expressway upgrading and expansion project is put under the microscope in anticipation of a National Assembly review for bond financing.

Under Document 2738/BGTVT-KHDT the Ministry of Transport (MoT) submitted to the prime minister in late April 2013 regarding capital resources for 17 road sections under 1,887 kilometre long Hanoi-Can Tho expressway upgrading and expansion project the capital need will be offset through issuing government bonds.

These road sections have failed to attract private equity capital for implementation. Accordingly, the MoT proposed the prime minister source National Assembly approval for government bond issuance to handle the project.

Earlier, in its January plan the MoT wanted the capital for handling these 17 road sections will be offset using project bonds with the government acting as the underwriter and the Vietnam Development Bank acting as distribution organization.

However, this January plan was viewed as unfeasible by the Finance, Planning and Investment inter-ministries. “The project bonds issued by businesses could hardly be feasible despite enjoying the government guarantee since bonds would incur high distribution expenses against low credibility rate,” stated MoT chief Dinh La Thang.

In light of MoT’s April plan, in respect to National Highway 1 expansion project’s 1,887km Hanoi-Can Tho section, except 27km long Ninh Thuan-Binh Thuan section the entire route would consist of 37 projects, including 17 projects under build-operate-transfer (BOT) form stretching 562km at an estimated investment of VND42.502 trillion ($2.02 billion); two projects using state budget capital which are in the development pipeline covering 60km valued at VND3.387 trillion ($161 million) and 17 projects (as mentioned above) sourcing government bond capital stretching 678km with a total investment capital of VND47.843 trillion ($2.2 billion).

Thanks to financial incentives, sourcing capital for BOT projects has proven favourable. As of April 18, 2013 the MoT had kicked off the construction of six BOT projects after they found investors. “The MoT is ramping up efforts to be able to start construction of remaining BOT projects in the second quarter of 2013,” said Deputy Minister of Transport Truong Tan Vien.

For projects intended to go underway using government bond capital, the MoT is basically finalising appraisal work. “Difficulties in handing the April plan involves to sourcing National Assembly approval since National Highway 1 is not listed among projects eligible for using government bond capital,” said deputy chairman of Vietnam Bridge and Road Association Nguyen Ngoc Long.

Long stressed the need for BOT and government bond funded projects going parallel to boost capital usage efficiency. To address capital woes, the MoT also seeks government approval to appoint several capable businesses to handle urgent road sections, first using their investment capital, then later getting refund.

Under the April plan, construction of a bypass and road expansion stretching over 627km sourcing government bond capital will be completed in 2013. Expansion of the remaining 1,038km and road surface enforcement will be completed before the end of 2016.

Three-year bond rate falls 12 basis points

In good economic news, the State Treasury successfully auctioned Government bonds with a total face value of VND4.5 trillion ($216 million) through the Hanoi Stock Exchange (HNX) on April 22 at a substantially reduced interest rate.

A HNX report shows that the State Treasury issued VND1.5 trillion ($72 million) worth of two-year bonds at an annual yield of 7.4pct, unchanged from the previous auction.

Meanwhile the three-year bond yield fell by 12 basis points to a yield of 7.68pct per year. The total face value of three-year notes issued at the April 22 auction was VND3 trillion ($144 million).

Year to date, the State Treasury has issued nearly VND61.5 trillion ($2.95 billion) worth of Government bonds.

Banks continue to hedge bets when it comes to profits

Banks are not optimistic on projecting their year-plan profits as the current economic situation remains uncertain for the finance industry.

About 18 banks, including large and small-scaled ones, are holding annual general shareholder meetings (AGM) this week, with modest profit expectations for 2013.

Specifically, giant state-run Vietcombank envisions profit growth of only 0.6 per cent this year, reaching VND5,800 billion ($278.5 million). In 2012, the bank targeted a profit growth of 15 per cent but in fact, its profit only grew by 1.17 per cent. This lackluster performance prompted the low profit target this year.

Eximbank, a large commercial bank with total chartered capital of VND12,355 billion ($593.2 million), plans to increase its profit to VND3,200 billion ($153.6 million) this year. While in 2012, the bank’s profit was expected to reach VND4,600 billion ($220.8 million), it in fact achieved only 62 per cent of the year-plan.

Oceanbank, a small-scaled bank with total chartered capital of VND4,000 billion ($192 million) in 2012, aimed for a pre-tax profit of VND750 billion ($36 million), but it could earn only VND310 billion ($14.9 million). In 2013, the bank set the profit target of only VND216 billion ($10.37 million).

Lower profit growth is stated in business plans of many banks such as Military Bank, BIDV, Sacombank and ACB. Based on the documents sent to shareholders prior the AGMs, many banks forecast that the financial market and banking sector in 2013 would be bleak. The problems include little sign of improving settlements of non-performing loans, inflation pressures, an unstable macro-economy and low demand for loans.

Another factor affecting the profit of the banking system in 2013 is the State Bank’s requirement to increase loan loss provision. Based on the State Bank’s Circular 02/2013/TT-NHNN, which will come into force on June 1, 2013, many current debts of banks may be classified as bad debts, which means that banks will have to spend more on their risk provisions.

According to Phan Huy Khang, general director of Sacombank, the impact of this circular meant that, the overdue debts of the banking system could increase, and banks’ profit would be affected by increased provisions.

Nguyen Van Le, general director of Saigon-Hanoi Bank, said that Circular 02 would not make the bank’s non-performing loan increase, but agreed that it made the provision cost increase and lower bank profit.

According to Alan Pham, chief economist of VinaSecurities, many banks told him they expected the State Bank to adjust the effective time of Circular 02. The State Bank issued this circular in January, 2013 which will take effect this June. “They hoped that Circular 02 will become effective at least at the beginning of next year. Given both current capital demand and supply being low, the State Bank could adjust the effective date to create breathing space for banks,” said Pham.

CPI sees slight increase in April

The consumer price index ( CPI ) in April increased slightly by 0.02 percent against the previous month, the lowest level for the same period since 2004, according to the General Statistics Office (GSO).

The GSO on April 24 added that with the latest small increase, the CPI showed an accumulative rise of 2.41 percent compared to last December, and 6.61 percent higher than that of April last year.

Eight out of 11 categories of the goods basket experienced rises from 0.05 percent to 3.62 percent with medicine and health service seeing the highest increase and education registering the lowest one.

According to Nguyen Duc Thang, Head of GSO’s Price Statistics, increases in medicine and health service and transport, at 3.62 percent and 1.2 percent, respectively, were attributable to the country’s CPI small rise in April, despite the decline of the figures in Hanoi and Ho Chi Minh City.

In April, prices of foods and catering services, which accounted for the almost 40 percent in the goods basket, fell by 0.91 percent as supply was higher than demand.

Thang said despite a long holiday in early May, consumers tend to cut down their expenses due to economic difficulties. As a result, CPI in May is expected to see a slight increase as in April.-

Hanoi takes three products off price stabilisation list

The capital city has decided to take processed foods, sugar and notebooks off the city’s price stabilisation programme.

The municipal Department of Industry and Trade said the decision was due to an abundant supply of these goods over three years since the programme began

This year, the city set aside 319 billion VND (15.14 million USD) for its price stabilisation programme, which includes seven goods: rice, pork, poultry, eggs, frozen seafood, cooking oil and vegetables

Enterprise will be given interest-free advances to keep these goods’ prices down.-

M.U signs cooperation deal with Vietnam’s bank

The UK’s Manchester United Football Club (M.U) and the Bank for Investment and Development of Vietnam (BIDV) signed a cooperative agreement in Hanoi on April 24.

The signing ceremony was attended by M.U Ambassador Peter Schmeichel, who is a former famous goalie of the football club, among others.

Under the deal, the two sides pledge to promote the trade names of each other.

Their first collaboration will be the issuance of BIDV-Manchester United Bronze Card, which will allow holders to buy tickets to M.U matches or buy M.U souvenirs at preferential prices. A ceremony to debut the card will be held in Ho Chi Minh City on the evening of April 25. This will be also a chance for Vietnamese fans meet the former M.U goalie.-

Trade deficit estimated at 1 billion USD in April

Vietnam’s export turnover in April is expected to reach 9.7 billion USD and import volume, 10.7 billion USD, resulting in a trade deficit of 1 billion USD, a ccording to the General Statistics Office (GSO).

The FDI sector, however, gained a trade surplus of 730 million USD.

In the first four months, export value was supposed to reach 39.5 billion USD, up 16.9 percent against the same period last year. Meanwhile, import turnover was estimated at 40.2 billion USD, a year-on-year increase of 18 percent.

Vietnam had a trade deficit of 722 million USD from importing computers, electronic products, fabrics, telephones and spare parts, and petrol.

As of the first half of April, trade ran a deficit of 941 million USD, representing 2.7 percent of the country’s total exports.-

Int’l workshop discusses Mekong Delta development

Development planning for the Mekong Delta was discussed at an international workshop in Hanoi on April 24, hosted by the Vietnam – Netherlands Friendship and Cooperation Association and the Water Resources University.

The event saw the presence of the Dutch Ambassador to Vietnam Joop Scheffers, Chief Consultant of the “Mekong Delta Plan” (MDP) project Prof. Martijin Van de Groep, among Vietnamese and Dutch experts and researchers.

Prof. Martijin Van de Groep said the MDP project signed by the governments of Vietnam and Netherlands, aims to create a premise for the long-term development and environmental change adaptation of Vietnam ’s biggest granary.

Participants to the workshop discussed characteristics and impacts of floods on the livelihood and economy in the south-western region; statistics on major floods in Mekong Delta in recent years and their serious consequences; and flood related issues.

Based on the current development in the delta as well as national, regional and industrial development objectives, four socio-economic development scenarios for the region were brought forward, each of which gives priority to rice and fish production; agricultural added value; industrial job; and total production respectively.

However, which scenario would be closest to reality depends on economic development exogenous impacts, as well as strategic policies related decisions.

The Mekong Delta is an area with advantages in water resources, alluvium, aquaculture resources… The delta, however, is also impacted by activities in upstream regions, such as increasing floods due to deforestation or droughts caused by the exploitation of water resources, which brings about salt intrusion and water pollution.

Through considerations are required during the building of the plan, with focus on the problems the delta may face in the future when the negative impacts by environmental changes become more obvious.

Project on greenhouse gas emission control launched

A project on improving the Vietnamese industrial and trade sectors’ capacity to control greenhouse gas emissions and increase their adaptation to climate change has been recently launched in Ha Noi by the Ministry of Industry and Trade in coordination with the United Nations Development Program (UNDP).

According to Deputy Minister of Industry and Trade Le Duong Quang, the over US$3 million project, which will be implemented between 2013 and 2016, aims at improving the awareness and capacity for policy makers, seeking suitable mechanisms to respond to climate change, reducing greenhouse gas emissions and exploiting green trade opportunities to promote sustainable production of the industrial and trade sectors.

The project comprises of three components. The first one focuses on analyzing and reviewing current policies and recommending mechanisms and solutions to reduce the emissions towards a sustainable industrial production. The second aims to improve policy makers’ awareness of climate change and support the connectivity among businesses. The last and third one will help financial institutions and service suppliers promote the investment in developing a sustainable industrial production, reducing the emissions and expanding the market.

To realize the project’s targets, Viet Nam should have decisive and effective measures for energy usage, production should be cleaner and more modern, the behaviors of consumers and businesses must be improved, and relevant agencies should work closely together, said UNDP Deputy Country Director Bakhodir Burkhanov.

Viet Nam is implementing the National Strategy of Green Growth in the 2011-2020 period, with a vision to 2015, in which it has targeted to reduce emissions by 8-10% by 2020 compared to 2010./.

Imported vegetable oil subject to 5% tariff from May

The Ministry of Industry and Trade (MoIT) will impose a 5% duty on imported vegetable oil including refined soya and palm oil.

The move is seen as a temporary self-defense measure in case the imports of these products increase too rapidly posing a threat to the domestic production.

Viet Nam has so far produced vegetable oils with similar quality as imported ones.

The vegetable oil subjected to the import levy belongs to trade codes including 1507.90.90, 1511.90.91, 1511.90.92 and 1511.90.99.

The decision will take effect on May 7, 2013 and last less than 200 days.

Earlier, Vocarimex, a domestic oil producer holding 28.27% of the domestic market share and seven other vegetable oil manufacturers asked for the application of safeguard measures to protect the local vegetable oil industry.

Last year, Viet Nam imported 604,375 tons of vegetable oil, which doubled the imports in 2011 and 2010.

This has led to the sharp falls in Vocarimex’s turnover and profit in 2012 by 66% and 197%, respectively.

Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR

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