VietNam Business: October 2010

Sunday, October 31, 2010

Furniture expo opens in City

HCM CITY — The best of wood works that Viet Nam has to offer will be on display at the HCM City International Furniture & Handicrafts Fair 2010 scheduled to be held here next month.

Nearly 300 enterprises will present furniture, handicraft items, wood-processing machinery and materials in some 700 booths at the Tan Binh Exhibition and Convention Centre from October 6-10.

Organisers said the five-day annual event will play an important part in helping furniture and handicraft industries boost export and obtain their targeted export revenues of US$4.5 billion this year.

As part of the national trade promotion programme, it will also help local, mostly small and medium sized wood and handicraft enterprises, introduce new products and build business links with foreign importers.

Additionally, the exhibition will feature the Online Expo, which so far has attracted more than 800 enterprises with 7,000 products, an increase of 21 and 40 per cent respectively over last year.

Local enterprises will have the opportunity to establish Business to Business contacts with foreign importers at a seminar on purchasing demand and product standards that will be held during the exhibition.

The fair is being co-organised by the city's Department of Industry and Trade, the Viet Nam Trade Promotion Agency and the HCM City Handicrafts and Wood Industry Association. — VNS

Honda Viet Nam opens new auto showrooms

DONG NAI — Honda Viet Nam Co Ltd and Tuyet Tan Phat Auto Co Ltd opened its third auto centre, Bien Hoa Honda, in the southern Dong Nai Province.

There are now eight auto centres in the country.

Bien Hoa Honda is located at Amata Industrial Park in Bien Hoa City. The centre covers 6,000sq.m. that includes a showroom, services and a warehouse.

Wind power plant to break ground in Bac Lieu

BAC LIEU — Construction of the first wind power plant in Viet Nam's Cuu Long (Mekong) Delta started on September 9 at Binh Dong A hamlet in southern Bac Lieu Province.

The 500-ha wind power plant will have 66 wind turbines that will produce 310 million KWh per year.

Cong Ly Construction-Trade-Tourism Ltd Co is investing VND4.5 trillion into the project. The plant will be finished in the next 36 months.

Jetstar Pacific offers cheap fares on domestic flights

HCM CITY — The low-cost airline Jetstar Pacific is offering 1,000 tickets on the HCM City-Ha Noi-HCM City for VND100,000 each on the occasion of the 1000th anniversary of Thang Long-Ha Noi.

The promotion began on September 9 and will end October 10. Every week, there will be 200 tickets on sale on the website www.jetstar.com on a random day. Customers must register and pay for the ticket with a credit card.

FPT to distribute Siemens production software

HCM CITY — FPT Information System Soft has become the official distributor in Viet Nam for Siemens Teamcentre Product Lifecycle Management Software (PLM), the world's most widely used PLM system.

The Teamcentre software connects people in global-product development and manufacturing organisations with the product and process knowledge they need to succeed.

The software helps enterprises increase productivity, speed up time to market, meet business and regulatory requirements, optimise operational resources, and facilitate global collaboration.

Local advertising creatives to vie for Young Lions title

HCM CITY – Young Vietnamese who work in the advertising and marketing industry will take part in the Viet Nam Young Lions Competition 2011, which is part of an international competition that will end next year.

The Sun Flower company is the official representative in Viet Nam for the Cannes Lions International Festival.

The competition has three categories: print, film and media.

To participate, each team, including two members aged 18-28, must send no more than five print advertisements or television commercials and three submissions on media strategy to the organising committee before October 1. Information is available at www.sunflowermedia.com.vn. — VNS

Credit card growth sluggish despite incentives

Many banks in Vietnam have tied up with electronics stores, supermarkets, restaurants, spas, and others to offer discounts to card users

High interest rates, annual fees and safety considerations have prevented the credit card industry from getting off to a roaring start in Vietnam.

Although both domestic and foreign banks have launched several promotion programmes, they still have failed to attract enough customers to use credit cards for their shopping and other needs.

Because they expect the market to be a lucrative one in the future, the banks are pushing the use of cards so as to acquire and expand their market share.

The promotion campaigns have included direct marketing and the granting of credit cards without any fees.

Ho Anh Ngoc, head of retail banking in the southern region for Techcombank, said his bank plans to increase the number of its credit card users to 23,000 by the end of this year. It is targeting customers from all income segments.

Other banks such as Vietcombank, Eximbank, Asia Commercial Bank have launched their own promotions to expand the use of credit cards.

Customers travelling to Singapore between August 27 and September 30, can get a set of X-mini Capsule speakers from Eximbank if they spend at least $500 using their Visa card over three days.

Phi Thi Phuong, head of Eximbank's card management department said since early this year, Eximbank has issued 4,000 credit cards, increasing the total number of customers to 30,000.

To attract more customers, international banks like HSBC and ANZ have sought to increase their market share by marketing on websites and through emails and phone calls to customers.

The banks have also linked up with trade centres and supermarkets to offer discounts for those using Visa or MasterCard for their shopping.

Hoang Long, who works for a transportation company in District 3, said he received an invitation to open a credit card from ANZ, but failed to get one because his monthly salary was less than VND5 million (US$256).

Furthermore, late payments on a Visa card attract very high interest rates of between 1.5 percent to 1.9 percent per month, and this is something that gives pause for thought to Vietnamese clients.

HSBC and Techcombank levy overdue fees of 1.87 percent and 1.6 percent per month respectively.

Card owners also have to pay other kinds of fees.

Nguyen Tu Anh, director of Smartlink Card Joint Stock Co, said customers have to pay considerable attention to opening fees, annual costs, loan rates and exchange rates for international payments.

Hai Duyen, a regular customer of Techcombank, said credit cards were not all as safe as presumed. Recently, she had her pocket picked, and lost VND20 million ($1,025) through her visa card.

According to Duyen, credit cards do not require any password like the ATM card. Thieves can use a forged signature.

Moreover, Vietnamese customers are still not used to using cards for their shopping, and prefer to use cash instead.

Also, many shopping centres are yet to install POS machines to accept credit card payments.

Auto industry suffers from structural weaknesses

Vietnam's auto industry has survived its first decade, but had failed to live up to expectations because of a limited market, supply industries and roading, an expert has said.

" Vietnam is a developing market with a very limited size, but it has 11 joint venture companies with a production capacity of just thousands of vehicles per year. How can it be effective?" senior independent economic commentator Pham Chi Lan said.

As a result, domestic vehicle makers like Vinaxuki and Truong Hai Auto struggled to compete against foreign enterprises who had more advantages, she said.

Ministry of Industry and Trade heavy industry department deputy Ngo Van Tru said the domestic auto consumption of just 100,000 vehicles with 400 models per year was hardly enough to support the industry.

Lan said countries like Japan and China had several auto producers, but they were able to create healthy competition and to meet demand.

The sluggish development of domestic auxiliary industries didn't help the situation. Carmakers had to import components and parts, which pushed up prices and made them less competitive.

Lan said most local carmakers did not trust the quality of components and parts made in Vietnam . Enterprises, on the other hand, considered it too risky to produce components and parts in Vietnam .

Hanoi Export Processing and Industrial Zone management board head Nguyen Xuan Chinh said one of main reasons auxiliary industries hadn't developed was that auxiliary enterprises and auto assembling companies did not trust each other.

A representative of Vinaxuki, who asked to remain anonymous, said: "Vinaxuki produces 40 percent of its own components and parts. We plan to raise that to 60 percent."

Meanwhile, another fact against the development of the car industry was the nation's poor roading.

Main roads in Hanoi and HCM City , for example, could adequately accommodate only 15 percent of all vehicles, instead of the standard 40-60 percent. The density of vehicles per kilometre in Hanoi was 6,500, including motorbikes.

The sources said authorities should give tax incentives to encourage domestic auto production by a certain deadline.

Economist Lan said: "Auxiliary enterprises should produce components and parts for many different vehicles, which would help them save production costs and human resources."

The Government should encourage local firms to produce autos which satisfied the demands of motorbikes and made the vehicles more competitive with foreign one, Lan said.

Computer market grows 19 percent

The Vietnamese computer market is predicted to see a year-on-year increase of 19 percent thanks to a dramatic increase in laptop sales, according to market research firm International Data Corporation (IDC).

In the second quarter of this year, computer sales marked a 12 percent increase on Q1, the IDC reported.

The increase was attributed to Vietnamese consumer preferences for laptops rather than desktop based PCs, it said.

In Q2, the number of laptops imported to Vietnam rose by a dramatic 38 percent over Q1, and 33 percent over the same quarter last year.

Laptop sales in the second quarter totalled 462,407, the corporation said.

It believes that the start of the new school year in August, combined with sales promotions, would give computer manufacturers a well-needed shot in the arm, ensuring that they were likely to achieve their turnover targets.

With manufacturers looking to clear old models, free accessories and big discounts are likely to be offered to consumers, it said.

The brand-name laptop market grew 38 percent in the second quarter, with Dell, HP, Acer, Lenovo and Asus doing well.

Dell became the market leader for the first time, with an 11 percent share of the market thanks to efficient distribution and competitive prices.

HP cut imports due to high stock levels and was second with a 10.5 percent market share. They were followed by Acer with 9.9 percent, Lenovo with 5.1 percent, and Asus with 4.8 percent. While the laptop market recorded good business results, the PC market showed a distinct downturn.

In the second quarter, the IDC reported, only 273,101 PC units were imported, down 8 percent over the first quarter, just a 1 percent increase compared with the same period last year.

It said almost all computer companies had recently faced challenges caused by lower demand and over-stocking of personal computers.

This would become more serious when demand dropped, and Government projects cut IT spending.

IDC spokeswoman Phan Yen said the Vietnamese computer market in the first half of this year had faced many challenges because of lower demand, which was predicted to slacken towards the year-end.

The recent depreciation in the dong was not likely to help matters, she added.

Vietnam, Guangxi sign 54 cooperation projects

As many as 54 trade, investment and credit cooperation projects with a total value of US$1.9 billion were signed during an economic-trade forum between Vietnam and China’s Guangxi province in Hanoi Saturday.

The projects cover mostly areas of mechanical engineering, machinery, cement, urban infrastructure, wind power, irrigation and hydropower.

Speaking before over 1,000 delegates being senior government officials and businesspeople at the forum, President of the Vietnam Chamber of Commerce and Industry (VCCI) Vu Tien Loc affirmed that the Vietnamese Government always attaches importance to developing the friendship with China and will do its utmost to foster the bilateral ties, particularly the economic, trade and investment relations with Guangxi province.

The VCCI President spoke highly of the dynamic cooperation between Vietnamese and Guangxi businesses, expressing his belief that Vietnam ’s business environment which is getting more favourable and the country’s deeper economic integration will help ensure Guangxi investors’ success here.

Loc said he hoped that through the forum, Guangxi businesses will strengthen trade and investment cooperation with their Vietnamese counterparts in order to improve the trade balance between the two nations.

According to Chinese Ambassador to Vietnam Sun Guoxiang, the economic-trade cooperation between Guangxi and Vietnam has rapidly developed in recent time. Vietnam has become Guangxi’s largest trade partner with two-way trade reaching over $4 billion in 2009. The figure exceeded 2 billion USD in the first half of this year, accounting for nearly 16 percent of the two countries’ trade turnover.

The ambassador affirmed that the Chinese government pays attention to and supports Guangxi businesses’ economic-trade cooperation with Vietnam and will continue facilitate the two sides’ businesses in implementation of cooperation projects in the coming time.

Governor of the Guangxi Zhuang Autonomous Region Ma Biao stressed that Guangxi always attaches importance to developing its economic-trade ties with the Association of Southeast Asian Nations (ASEAN), including Vietnam .

He suggested the two sides speed up the building of the Nanning-Hanoi expressway, develop infrastructure and strengthen coordination in the Greater Mekong Subregion (GMS) cooperation framework as well as facilitate exchanges and cooperation between Guangxi and Vietnam ’s border localities.

At the forum, Vietnamese Deputy Minister of Planning and Investment Nguyen The Phuong also committed to creating more favourable conditions for Guangxi businesses to implement their projects in line with Vietnamese law and called for their continued investments in the country.

Ninh Thuan attracts FDI in ethanol production

Photo: Reuters

The central province of Ninh Thuan has become the third locality in Vietnam that received foreign directed investment (FDI) in producing bio-ethanol.

Covering an area of 60 hectares at Phuoc Nam Industrial Park, the US$50 million manufacturing complex for ethanol, fertilizers and animal feeds of Thai-Viet Bio Ethanol Jsc is a joint venture between Thai investors, which holds 70 percent of stake and Vietnamese partners.

Set to begin construction in 2011 and go into operation by the end of 2012, the project will provide over 60 million of litres of ethanol annually for the domestic market and overseas markets such as Japan, Thailand, the Republic of Korea and the European Union.

In addition to manufacturing facilities, the company also plans to invest in material trees planting, thus generating jobs for thousands of farmers in Ninh Thuan and neighbouring provinces.

Earlier, two projects with a combined annual capacity of 220 million of litres of ethanol by Japanese investors were also licensed in the Central Highland province of Dak Lak and the southern province of Binh Phuoc.

Considered a clean fuel, bio-ethanol is likely to replace the traditional fossil fuels in the future.

Attracting FDI in using or producing clean energies for sustainable growth is also one of priorities of the Vietnamese government.

Ninh Thuan attracts FDI in ethanol production

The central province of Ninh Thuan has become the third locality in
Vietnam that received foreign directed investment (FDI) in producing
bio-ethanol.

Covering an area of 60 hectares at Phuoc Nam Industrial Park, the 50
million USD manufacturing complex for ethanol, fertilizers and animal
feeds of Thai-Viet Bio Ethanol Jsc is a joint venture between Thai
investors, which holds 70 percent of stake and Vietnamese partners.

Set to begin construction in 2011 and go into operation by the end
of 2012, the project will provide over 60 million of litres of ethanol
annually for the domestic market and overseas markets such as Japan,
Thailand, the Republic of Korea and the European Union.

In addition to manufacturing facilities, the company also plans to invest in material trees planting, thus generating jobs
for thousands of farmers in Ninh Thuan and neighbouring provinces.

Earlier, two projects with a combined annual capacity of 220 million
of litres of ethanol by Japanese investors were also licensed in the
Central Highland province of Dak Lak and the southern province of Binh
Phuoc.

Considered a clean fuel, bio-ethanol is likely to replace the traditional fossil fuels in the future.

Attracting FDI in using or producing clean energies for sustainable
growth is also one of priorities of the Vietnamese government./.

Vietnam footwear industry eyes runaway exports

Footwear exports this year could top a record $5.4 billion, well above the target of $4.6-$5 billion, Nguyen Duc Thuan, chairman of the Vietnam Leather & Footwear Association, said.

Exports maintained their high growth rate in August, he said, with the month’s shipments of $450 million taking the year-to-date figure to $3.22 billion, a 19 percent increase year on year.

Exports had been worth $4.1 billion last year despite the global recession. The number of contracts signed this year is already 16 percent higher than for the whole of last year, Thuan said without specifying their value.

Vietnam is the world’s fifth biggest footwear exporter but the domestic industry faces many difficulties, especially the shortage of workers and dependence on imported raw materials.

The country still imports 70-80 percent of tanned leather and high-quality leatherette to make shoe caps, certain soles, and decorations.

Its support and machine tools industries are in a very primitive stage while footwear marketers and designers lag behind their foreign rivals, making it hard to create international brands for Vietnamese footwear.

Exporters have come up against protectionist barriers in the EU, Peru, and Turkey.

But the industry is aiming to expand exports to markets like the US and ASEAN member countries to take advantage of free trade agreements.

Vietnam has an advantage over its main rival, China, in labor costs since China’s GDP per capita is now $3,000 compared to its $1,200, Thuan said.

Vietnam’s per capita income is forecast to rise to $3,500 only in 2020, which means the leather-shoe industry can continue to be competitive through the next decade, he added.

Another factor in its favor is that demand for leather footwear remains very high.

Worldwide, some 17 billion pairs of shoes are produced every year, of which six to seven billion are manufactured under contract.

Saturday, October 30, 2010

Touchscreen chipmakers tap tablet boom

The chipmakers behind the touchpads that are killing off the laptop mouse and the keys on a mobile phone are battling for supremacy in the latest blockbuster gadget -- the tablet PC.

Boosted by Apple's iPad, sales of tablet, or slate, touchscreen units will jump to more than 136 million in 2014 from just 15.4 million this year, says market research firm iSuppli.

Tablet PCs are set to capture three-quarters of the PC touch market this year, from below 4 percent in 2009, crushing opposition from notebooks, netbooks and monitors.

"The tablet market is going to be one of the largest for touch screen controllers," said Jennifer Colegrove, director at Display Search, which monitors trends in the display sector.

Colegrove expects the tablet PC market to generate $90 million in revenue for touchscreen chipmakers this year, and that could double in 2011.

And those numbers are expected to keep growing -- to as high as $500 million by 2012, forecasts Rodman & Renshaw analyst Ashok Kumar, dwarfing unit-for-unit the handset touchscreen market.

What began as a niche market 15 years ago -- when Silicon Valley-based Synaptics put a credit card-sized touchpad on the Apple Mac Book -- has exploded into a global touchpad market forecast to be worth $9 billion within a couple of years across PCs, handsets and other gadgets such as e-readers.

While smartphones have driven profits at Synaptics and peers Cypress Semiconductor Corp and Atmel Corp, these firms are now gearing up for the latest "killer device" -- the tablet computer, a device between a smartphone and a laptop.

Spurred by the success of the fully touch-based iPad, tech brands such as Samsung Electronics, Research in Motion, Motorola, Lenovo Group Ltd and others are expected to launch tablet-like devices soon, establishing a strong market for touchscreen chipmakers.

"The market growth has been explosive," said Rodman's Kumar. "The product category is here to stay and all the OEMs (original equipment makers) are throwing their hands in the rain."

Other companies getting into the touchscreen controller market include Broadcom Corp, Texas Instruments Inc, Chinese Pixcir Microelectronics and Taiwan-based Elan Microelectronics Corp.

These firms make chips that allow users to control phones, digital music players or PCs by touch -- from a simple tap to more complex gestures that enable zooming, pinching and rotating.

Typically, the dollar content for a touch chip on a tablet device is 3-5 times the average selling price of a mobile phone touch chip.

"There could be anywhere between $10-$15 worth of content apiece (in tablets) to go after for Cypress, Atmel and Synaptics," said Needham & Co analyst Rajvindra Gill.

Catching fast

While Synaptics leads the market in touchscreen chips, Cypress and Atmel are fast grabbing the attention of original equipment makers, scoring several design wins lately.

Among other tech giants reckoned to be preparing tablet-like devices are Toshiba Corp, Hewlett-Packard Co, HTC Corp and Cisco Systems Inc.

Cypress and Atmel have already snapped up some design wins for products expected to ship this year, giving them first-mover advantage as Synaptics lagged in unveiling its latest touch solution.

"Cypress is seeing design wins for (non-iPad) tablets that will be shipping in the third quarter," said Capstone Investments analyst Jeffrey Schreiner.

At least two analysts said BlackBerry maker RIM's upcoming tablet -- likely dubbed the BlackPad and expected to hit the market in November -- would use touch chips from Cypress.

Dell's Streak, unveiled last month, and Samsung's Galaxy Tab, due out this month, use Atmel chips, said Gleacher & Co analyst Ian Ing.

However, the tech brands are known to use more than a single supplier for many components, and Jefferies analyst Blayne Curtis noted Pixcir designs are also in Dell's Streak.

Apple doesn't reveal its part suppliers, but teardown firms say the iPad uses chips from Atmel, Broadcom and Texas Instruments.

As touch chipmakers slug it out for a share of the tablet PC pie, their sales pitch will focus on pricing, efficient power usage and the precision of the touch controller for the slate's larger screens.

"In terms of low-power, Atmel has a great product and, in terms of pricing, both Cypress and Atmel are better positioned," Curtis said.

Dong Nai pharma repacks expired drug

Land management looks to int’l standards

The Ministry of Natural Resources and Environment held a symposium in Hanoi Friday to listen to foreign land managers in an effort to catch up with developed economies in the region by 2020 as planned.

Experts from Sweden, Holland, South Korea, China and the World Bank shared experiences in land registry, land pricing, land information systems, digital land management, land fund development and land compensation.

Minister of Natural Resources and Environment Pham Khoi Nguyen emphasised three key points in the orientation on land management modernisation, based on a modern organisational mechanism, advanced technology and efficiency of land management.

“All this is necessary to contribute to poverty alleviation, democracy and social parity,” said the minister, revealing that the nation’s final goal was to reach international standards by 2030.

Acting Head of the Land Management Department Phung Van Nghe said land managers should no longer simply do an administrative job but should manage the business of national properties.

He explained that land management was geared towards providing administrative and legal procedures for land users and the community.

The Law of Land, promulgated in 2003, has opened up a new era where the Government has shifted land ownership or auctioned small parcels of land to enrich State coffers.

In 2009 alone, land auctions fetched VND40 trillion (US$2.04 billion), representing a 10-fold increase over five years ago.

Land management looks to int’l standards

Acting Head of the Land Management Department Phung Van Nghe said land managers should no longer simply do an administrative job but should manage the business of national properties.

He explained that land management was geared towards providing administrative and legal procedures for land users and the community.

The Law of Land, promulgated in 2003, has opened up a new era where the Government has shifted land ownership or auctioned small parcels of land to enrich State coffers.

In 2009 alone, land auctions fetched VND40 trillion (US$2.04 billion), representing a 10-fold increase over five years ago.

More funding to develop Hanoi’s craft villages

Hanoi will provide VND3.6 trillion (US$189 million) to preserve and develop craft villages over 2010-2015 to preserve traditional craft villages, develop tourism and build new ones while ensuring the environment is protected.

The city will prioritise 25 traditional villages that are under threat of falling beyond repair and that need to be restored and preserved.

They include Dong My lacquer village, Dai Ang conical hat village, Nghia Do “sac” paper village, Van Canh “do” paper village and Ngu Xa copper casting village.

The project will help to develop tourism at craft villages, assist family households to maintain their production for tourist purposes, provide finance for vocational training and encourage the production of high quality handicrafts.

The city is also paying more attention to developing new craft villages to help generate jobs and increase local residents incomes.

In order to attract investment to preserve craft villages, Hanoi will grant soft loans to businesses for a duration of 3-5 years, to help them to promote their trade marks and promote craft villages in the city.

Setting up and developing the sale of crafts in domestic and foreign markets with a focus on linking up with supermarkets and trade centres and assisting craft villages to boost exports will be also be conducted.

In order to avoid pollution, the city will encourage craft businesses to move to industrial complexes and help businesses to upgrade their equipment.

At present, Hanoi has almost 1,350 craft villages, making up 59 percent of the country’s total, that provide jobs for over 626,000 people, with an annual average income of VND13.1 million per person.

In 2009, Hanoi’s craft villages earned VND7.65 trillion ($402 million), equal to 8.4 percent of the city’s industrial production value.

According to the Hanoi Centre for Industrial Promotion and Consultancy, despite the assistance to help traditional craft villages in Hanoi , they have encountered many problems.

In order to promote Hanoi’s craft villages, a festival “Thang Long-Hanoi craft villages and streets” will be held in Hanoi between September 16-21.

Official rejects VN’s violations of WTO price policy

The Finance Ministry’s Circular 122/2010/TT-BTC does not break any of
Vietnam's price commitments to the World Trade Organisation (WTO),
said an official.

Director of the ministry’s Price
Management Department Nguyen Tien Thoa said the document strictly
adheres to the Government’s Decree 75/2008/ND-CP of June 9, 2008, which
defines milk as a commodity whose prices should be stabilised. It amends
and supplements earlier Circular 104 in order to prevent unreasonable
price hike of imported powdered milk.

The Finance Ministry did not promulgate any new policy, Thoa stressed.

Circular 122, which will take effect as of October 1, stipulates that
importers and traders must register and report prices of powdered milk
for under six-year-old children to the price management agency.

The Finance Ministry’s explanation followed feedbacks from several
foreign-invested milk trading companies and the Ambassadors of
Australia, Canada , New Zealand , the US and the European Union.

In a common letter addressed to the ministry, the
ambassadors said the new price control mechanism would affect Vietnam
’s efforts towards a market economy as well as its performance of WTO
regulations.

It could also hamper the attraction of foreign investment and development of the labour market, the diplomats said./.

Vietnam, Guangxi sign 54 cooperation projects

As many as 54 trade, investment and credit cooperation projects with a
total value of 1.9 billion USD were signed during an economic-trade
forum between Vietnam and China’s Guangxi province in Hanoi on
September 11.

The projects cover mostly areas of
mechanical engineering, machinery, cement, urban infrastructure, wind
power, irrigation and hydropower.

Speaking before
over 1,000 delegates being senior government officials and
businesspeople at the forum, President of the Vietnam Chamber of
Commerce and Industry (VCCI) Vu Tien Loc affirmed that the Vietnamese
Government always attaches importance to developing the friendship with
China and will do its utmost to foster the bilateral ties, particularly
the economic, trade and investment relations with Guangxi province.

The VCCI President spoke highly of the dynamic cooperation between
Vietnamese and Guangxi businesses, expressing his belief that Vietnam
’s business environment which is getting more favourable and the
country’s deeper economic integration will help ensure Guangxi
investors’ success here.

Loc said he hoped that
through the forum, Guangxi businesses will strengthen trade and
investment cooperation with their Vietnamese counterparts in order to
improve the trade balance between the two nations.

According to Chinese Ambassador to Vietnam Sun Guoxiang, the
economic-trade cooperation between Guangxi and Vietnam has rapidly
developed in recent time. Vietnam has become Guangxi’s largest trade
partner with two-way trade reaching over 4 billion USD in 2009. The
figure exceeded 2 billion USD in the first half of this year, accounting
for nearly 16 percent of the two countries’ trade turnover.

The ambassador affirmed that the Chinese government pays attention to
and supports Guangxi businesses’ economic-trade cooperation with
Vietnam and will continue facilitate the two sides’ businesses in
implementation of cooperation projects in the coming time.

Governor of the Guangxi Zhuang Autonomous Region Ma Biao stressed
that Guangxi always attaches importance to developing its economic-trade
ties with the Association of Southeast Asian Nations (ASEAN), including
Vietnam .

He suggested the two sides speed up
the building of the Nanning-Hanoi expressway, develop infrastructure and
strengthen coordination in the Greater Mekong Subregion (GMS)
cooperation framework as well as facilitate exchanges and cooperation
between Guangxi and Vietnam ’s border localities.

At the forum, Vietnamese Deputy Minister of Planning and Investment
Nguyen The Phuong also committed to creating more favourable conditions
for Guangxi businesses to implement their projects in line with
Vietnamese law and called for their continued investments in the
country./.

Computer market grows 19 percent

The Vietnamese computer market is predicted to see a year-on-year
increase of 19 percent thanks to a dramatic increase in laptop sales,
according to market research firm International Data Corporation (IDC).

In the second quarter of this year, computer sales marked a 12 percent increase on Q1, the IDC reported.

The increase was attributed to Vietnamese consumer preferences for laptops rather than desktop based PCs, it said.

In Q2, the number of laptops imported to Vietnam rose by a
dramatic 38 percent over Q1, and 33 percent over the same quarter last
year.

Laptop sales in the second quarter totalled 462,407, the corporation said.

It believes that the start of the new school year in August, combined
with sales promotions, would give computer manufacturers a well-needed
shot in the arm, ensuring that they were likely to achieve their
turnover targets.

With manufacturers looking to clear old
models, free accessories and big discounts are likely to be offered to
consumers, it said.

The brand-name laptop market grew 38 percent in the second quarter, with Dell, HP, Acer, Lenovo and Asus doing well.

Dell became the market leader for the first time, with an 11 percent
share of the market thanks to efficient distribution and competitive
prices.

HP cut imports due to high stock levels and
was second with a 10.5 percent market share. They were followed by Acer
with 9.9 percent, Lenovo with 5.1 percent, and Asus with 4.8 percent.
While the laptop market recorded good business results, the PC market
showed a distinct downturn.

In the second quarter,
the IDC reported, only 273,101 PC units were imported, down 8 percent
over the first quarter, just a 1 percent increase compared with the same
period last year.

It said almost all computer
companies had recently faced challenges caused by lower demand and
over-stocking of personal computers.

This would become more serious when demand dropped, and Government projects cut IT spending.

IDC spokeswoman Phan Yen said the Vietnamese computer market in the
first half of this year had faced many challenges because of lower
demand, which was predicted to slacken towards the year-end.

The recent depreciation in the dong was not likely to help matters, she added./.

Credit card growth sluggish despite incentives

High interest rates, annual fees and safety considerations have
prevented the credit card industry from getting off to a roaring start
in Vietnam.

Although both domestic and foreign
banks have launched several promotion programmes, they still have failed
to attract enough customers to use credit cards for their shopping and
other needs.

Because they expect the market to be a
lucrative one in the future, the banks are pushing the use of cards so
as to acquire and expand their market share.

The promotion campaigns have included direct marketing and the granting of credit cards without any fees.

Ho Anh Ngoc, head of retail banking in the southern region for
Techcombank, said his bank plans to increase the number of its credit
card users to 23,000 by the end of this year. It is targeting customers
from all income segments.

Other banks such as
Vietcombank, Eximbank, Asia Commercial Bank have launched their own
promotions to expand the use of credit cards.

Customers travelling to Singapore between August 27 and September
30, can get a set of X-mini Capsule speakers from Eximbank if they spend
at least 500 USD using their Visa card over three days.

Phi Thi Phuong, head of Eximbank's card management department said
since early this year, Eximbank has issued 4,000 credit cards,
increasing the total number of customers to 30,000.

To attract
more customers, international banks like HSBC and ANZ have sought to
increase their market share by marketing on websites and through emails
and phone calls to customers.

The banks have also
linked up with trade centres and supermarkets to offer discounts for
those using Visa or MasterCard for their shopping.

Hoang Long, who works for a transportation company in District 3, said
he received an invitation to open a credit card from ANZ, but failed to
get one because his monthly salary was less than 5 million VND (256
USD).

Furthermore, late payments on a Visa card
attract very high interest rates of between 1.5 percent to 1.9 percent
per month, and this is something that gives pause for thought to
Vietnamese clients.

HSBC and Techcombank levy overdue fees of 1.87 percent and 1.6 percent per month respectively.

Card owners also have to pay other kinds of fees.

Nguyen Tu Anh, director of Smartlink Card Joint Stock Co, said
customers have to pay considerable attention to opening fees, annual
costs, loan rates and exchange rates for international payments.

Hai Duyen, a regular customer of Techcombank, said credit cards were
not all as safe as presumed. Recently, she had her pocket picked, and
lost 20 million VND (1,025 USD) through her visa card.

According to Duyen, credit cards do not require any password like the ATM card. Thieves can use a forged signature.

Moreover, Vietnamese customers are still not used to using cards for their shopping, and prefer to use cash instead.

Also, many shopping centres are yet to install POS machines to accept credit card payments./.

Auto industry suffers from structural weaknesses

Vietnam's auto industry has survived its first decade, but had
failed to live up to expectations because of a limited market, supply
industries and roading, an expert has said.

"
Vietnam is a developing market with a very limited size, but it has 11
joint venture companies with a production capacity of just thousands of
vehicles per year. How can it be effective?" senior independent
economic commentator Pham Chi Lan said.

As a result,
domestic vehicle makers like Vinaxuki and Truong Hai Auto struggled to
compete against foreign enterprises who had more advantages, she said.

Ministry of Industry and Trade heavy industry
department deputy Ngo Van Tru said the domestic auto consumption of just
100,000 vehicles with 400 models per year was hardly enough to support
the industry.

Lan said countries like Japan and
China had several auto producers, but they were able to create healthy
competition and to meet demand.

The sluggish
development of domestic auxiliary industries didn't help the situation.
Carmakers had to import components and parts, which pushed up prices and
made them less competitive.

Lan said most local
carmakers did not trust the quality of components and parts made in
Vietnam . Enterprises, on the other hand, considered it too risky to
produce components and parts in Vietnam .

Hanoi
Export Processing and Industrial Zone management board head Nguyen Xuan
Chinh said one of main reasons auxiliary industries hadn't developed was
that auxiliary enterprises and auto assembling companies did not trust
each other.

A representative of Vinaxuki, who asked
to remain anonymous, said: "Vinaxuki produces 40 percent of its own
components and parts. We plan to raise that to 60 percent."

Meanwhile, another fact against the development of the car industry was the nation's poor roading.

Main roads in Hanoi and HCM City , for example, could
adequately accommodate only 15 percent of all vehicles, instead of the
standard 40-60 percent. The density of vehicles per kilometre in Hanoi
was 6,500, including motorbikes.

The sources said authorities should give tax incentives to encourage domestic auto production by a certain deadline.

Economist Lan said: "Auxiliary enterprises should produce components
and parts for many different vehicles, which would help them save
production costs and human resources."

The
Government should encourage local firms to produce autos which satisfied
the demands of motorbikes and made the vehicles more competitive with
foreign one, Lan said./.

Friday, October 29, 2010

Last-minute profit-taking weighs on VN-Index

Heavy sales in the final minutes of Sept. 10's session on the HCM Stock
Exchange dragged the VN-Index down to a close of 451.39 points, a
decline of 2.65 percent.

The volume of trades
continued to be modest at 52.5 million shares, totalling 1.3 trillion
VND (66.7 million USD), while Saigon Securities Inc (SSI) reclaimed the
place as the most active share, responsible for 2.27 million trades.

Blue chips did lose ground on Sept. 10. Masan Group (MSN) was one of
the few to escape the fall, closing unchanged at 49,000 VND. But Bao
Viet Holdings (BVH) plunged to its floor price, closing off 5 percent to
47,500 VND per share.

Among 26 gainers on the day, most were penny stocks.

Foreign investors contributed to the market correction by meagre buys
in HCM City, picking up a net of just 600,000 shares, worth 26.6 billion
VND (1.36 million USD).

On the Hanoi Stock Exchange, the HNX-Index shed 3.74 percent to end the session at 131.15 points.

The value of trades once again exceeded that on the HCM City exchange,
reaching 1.37 trillion VND (70.2 million USD) on a volume of 57.8
million shares.

Foreign investors were net sellers Sept. 10 in Hanoi, offloading a net of 97,000, worth 2.69 billion VND.

The next session on September 13 on HCM Stock Exchange would see the
introduction of a lengthened period of continuous trading. This change
was expected to boost trades./.

SMEs need to be better audited

Small and medium-sized enterprises should improve their auditing standards if they wish to access much needed capital, a conference in Hanoi heard Thursday.

There are about 450,000 enterprises in the country, according to Dang Van Thanh, chairman of the Vietnam Accounting and Auditing Association.

He said about 96 percent of those firms are SMEs, which contribute about 40 percent of Vietnam's total GDP.

However, he said almost every business in the country faces difficulties accessing credit.

Statistics from the State Bank of Vietnam 's Credit Department showed that just half of the 163,000 non-State enterprises had taken out bank loans, accounting for 27 percent of the country's total debt.

"It means that half of the non-State businesses, most of which are SMEs, are suffering a capital shortage," he said.

Another investigation released by the Ministry of Planning and Investment's Development Department shows that just one-third of SMEs has access to bank loans.

Nguyen Minh Tuan, deputy head of the Vietnam Chamber of Commerce and Industry's Business Development Institute, agreed that accessing credit is a problem for SMEs.

Economist Nguyen Dai Lai said banks pay particular attention to production and business plans and capital ability when they consider loan applications.

"Financial transparency and demonstrating the ability to make a profit are vital for any business that wishes to get credit," Lai said.

To meet bank requirements, participants at the conference were told about the need for independent auditing.

"Independent auditing could increase the reliability and accuracy of businesses' financial reports," Lai said.

Nguyen Thi Huong Nga, ANZ Bank's country head of Credit Risk, said financial reports need auditing certification because it increases confidence in the information provided.

"However, many SMEs are not aware of the importance of auditing in answering capital questions," said Le Thi Hong Len, head of the Association of Chartered Certified Accountants (ACCA) Vietnam.

Nguyen Thanh Trung, general director of Mazars, said financial reports are needed to access long-term credit businesses.

"Auditing is not a compulsory requirement for SME's. However, it is helpful and makes accessing credit easier," he said.

SMEs need to be better audited