VietNam Business: industry

Showing posts with label industry. Show all posts

Saturday, February 19, 2011

HCMC: hi-tech industry popular with investors

Many world leading hi-tech groups such as Intel from the US , Nidec
from Japan and German based multi-national Bosch are increasing the
scale of their investment in Ho Chi Minh City , an indication of how
attractive the hi-tech industry has become to investors.

Intel Vietnam said it would officially inaugurate the first phase
of its largest global micro-chip plant, with an investment capital of 1
billion USD, at the Ho Chi Minh City Hi-tech Zone later this month.

The first batch of Intel chips worth 120 million USD is expected to be exported later this year.

Also in October, Bosch Vietnam will have its software research and
production centre in Ho Chi Minh City up and running, the company’s
second major production facility in the Asia-Pacific region.

According to Bosch Vietnam ’s Managing Director Vo Quang Hue, by
the end of this year, the company will have begun the first phase of a
24 million USD auto-parts factory in Long Thanh district, Dong Nai. It
also plans to inject an additional 30 million VND to finish the factory
by 2015.

Vietnam is now the only Southeast
Asian market where Bosch are involved in all three stages, research,
production and sales.

Despite operating four
projects in HCM City , with a combined investment of nearly 500
million USD, Nidec President Nagomori Shigennobu still says his company
will continue with its investment, research and development activities
in the HCM City Hi-tech Zone, as well as call on its Japanese partners
to invest more in this field.

According to the
General Secretary of the Vietnam Electronics Businesses Association Tran
Quang Hung, the presence of foreign groups in the hi-tech industry
creates opportunities for Vietnamese workers to learn and improve their
skills and gradually expand the number of subsidiaries producing
components for overseas companies in the next 5-10 years.

Many small and medium sized Vietnamese companies investing in the
hi-tech industry could also become partners of foreign groups to
manufacture spare parts and help to improve the country’s
competitiveness in this sector, he added.

Vietnam
has several advantages over other regional countries, such as cheap
labour costs and a convenient location for transporting goods to other
markets in the Asia-Pacific region, said Hue, adding that in order to
develop its hi-tech industry, the country should define itself as a
destination for large manufacturers./.

Tuesday, February 8, 2011

Vietnam’s hi-tech sector still in infancy: expert

Vietnam’s hi-tech industry is still in infancy, so there will be ample room for investment and development.

So Vietnam is in dire need of incentives and legal framework for venture capital funds for the industry, said Arthur Trueger, chairman of venture capital firm Berkeley International Capital Corp, in the 4th annual Technology Business Conference opened Wednesday in Ho Chi Minh City.

The country, therefore, has yet made a strong presence on the global hi-tech industry map despite its potentials.

But improvements are underway.

The country will set up 15 software parks and mobilize funding for training high-tech human resources, said Tran Duc Lai, Information and Communications Minister, told participants at the two-day event hosted by IDG Ventures Vietnam, DFJ VinaCapital, IBM and Strategic Alliance Vietnamese Ventures International.

Vietnam is considered a promising technology market. Last year the sector generated US$6.26 billion, accounting for 7 percent of Vietnam's GDP.

The number of internet users exceeds 22 million, a penetration rate of over 25 percent.

The digital content industry saw a dramatic growth rate of 50 percent with revenues topping $700 million. The software industry also achieved an impressive 40 percent growth rate and revenues of $880 million.

Tuesday, January 18, 2011

Cashew sector to need VND11 tril.

HCMC – The local cashew industry will need around VND11 trillion to sustain development within the next ten years.

The sum will help the sector expand growing areas, modernize production and invest in research, according to the 2011-2020 cashew development plan devised by the Vietnam Cashew Association (Vinacas).

The fund will be mobilized from banks, corporate bond sales, share issues and the State budget.

Vinacas plans to pass the project to relevant ministries and submit it to the Government in the fourth quarter of this year for approval. The industry will spend VND4.5 trillion in the 2011-2015 period and VND6.5 trillion until 2020.

The industry is facing difficulties due to unstable material sources as farming families have switched to growing rubber or cassava for higher profits. Besides, cashew export in the coming years will be affected by a labor shortage and higher input costs.

According to Vinacas, the capital will help to ensure a stable cashew material cultivation area of 315,000 to 360,000 hectares in the country, 200,000 to 250,000 hectares in Cambodia and 50,000 to 100,000 hectares in Laos. Through this financing, enterprises can also train workers, improve processing technology and promote business at home and abroad.

Vietnam is the world’s leading cashew exporter but 30% of unshelled cashews are imported from Africa. As African nations plan to process cashews in the future as well, the local processing industry will certainly suffer a material shortage.

Monday, January 17, 2011

Apparel industry to achieve export target early

Photo: Reuters

The garment industry will achieve this year’s export target of US$10.5 billion by November, the Vietnam Textile and Apparel Association said.

In September, for a third consecutive month, exports topped $1 billion, taking year-to-date exports to more than $8 billion.

Since most firms have signed contacts for the rest of the year, exports will be worth at least $1 billion each month this quarter, VITAS said.

This year exports to major traditional markets have seen high growth. Exports to the US are up 22.1 percent to $3.94 billion, while shipments to the EU and Japan are 6.7 percent and 14.3 percent up at $1.18 billion and $691 million.

However, a surge in the global price of cotton has had a negative impact on the industry which imports 95 percent of its cotton needs. The price of a ton has risen 45 percent from the same period last year to $1,900-2,000.

Vietnam imported 260,000 tons of cotton in the first nine months and that figure is likely to reach 370,000 tons by year-end.

With the government setting export targets of $19 billion in 2015 and $25 billion in 2020, the industry is eyeing increased cotton cultivation and development of human resources to meet the increasing needs.

On the domestic front, in an effort to capture a greater market share, it is promoting trademarks and setting up distribution networks around the country.

Monday, January 10, 2011

Vietnam creative industry still in infancy

HCMC – Vietnam’s creative industry has remained weak since local companies have yet to pay due attention to creativity as an essential part in the production process, industry experts said at a seminar in HCMC.

Edward Gomez, design consultant at multinational Global Sources, told the “How Designs Influence Business Results” seminar last week, “To draw customers’ attention, the products should have typical and creative designs as well as useful functions.”

But local enterprises have not concentrated much on this aspect.

Tran Ngoc Danh, managing director of Arts & Design School, conceded local companies had not invested much in pattern designs because it required all sorts of things but finished products could not compete with those made in China, Thailand and Malaysia.

Creativity in Vietnam has been growing in the fields of advertising, fashion design, publishing, music, television and radio, but not interior decoration and industrial product design.

According to a survey carried out last December by Synovate Business Consulting, a global market research company, the creative industry contributes 7% of the world’s gross domestic product (GDP) and forecast 3% growth per year.

The seminar was organized by the British Council Vietnam and the HCMC Investment and Trade Promotion Center following the successful seminar “E-Technology Applications in Advertising and Communications”.

Saturday, January 8, 2011

Garment exports on target

The textile and garment industry will meet its annual export target of
10.5 billion USD by November, said vice chairman and general secretary
of the Vietnam Textile and Apparel Association (Vitas) Le Van Dao.

Dao estimated that the industry would earn more than 1 billion USD each month in the fourth quarter.

September was the third consecutive month the industry fetched more
than 1 billion USD from exports, bringing the sector's total export
value in the first nine months of this year to more than 8 billion USD, a
year-on-year increase of 20.6 percent, according to the General
Statistics Office.

Dao said many garment exporters had orders for the end of this year and even for the beginning of next year.

Over the past nine months, exports to the big markets have recorded
high growth. Exports to the US increased 22.1 percent to 3.94 billion
USD while the rising figures to the EU and Japan were 6.7 per cent
and 14.3 percent to 1.18 billion USD and 691 million USD, respectively.

Exports to the Democratic People’s Republic of
Korea surged 64 percent thanks to the impact of its Free Trade
Agreement with ASEAN.

However, Pham Xuan Hong, Vitas
deputy chairman, said the garment industry was facing a shortage of
labour and an increase in the price of transport and power.

A surge in the price of cotton on the world market also had a negative
impact on the industry. A tonne of cotton has risen 45 percent since
the same period last year to 1,900-2,000 USD while the industry has to
import up to 95 percent of its cotton. The industry imported 260,000
tonnes of cotton in the first nine months of the year and estimates that
figure will reach roughly 370,000 tonnes by the end of the year.

Hong said garment exporters were seeking new sources from Japan
and ASEAN countries in order to enjoy preferential taxes.

To fulfil the target of 19 billion USD from exports by 2015 and 25
billion USD by 2020, the garment sector is actively implementing
programmes related to cotton cultivation to increase domestic supplies
and develop human resources to meet the increasing demands of the
sector.

The sector is also promoting its trademark
and setting up distribution networks nationwide to take a firm foothold
in the domestic market./.

Friday, January 7, 2011

Garment exports on target

Workers make clothes for export at a factory in the northern province of Ninh Binh. The textile and garment industry is on track to reach its annual export target of US$10.5 billion by November. — VNA/VNS Photo Tran Viet

HA NOI — The textile and garment industry will meet its annual export target of US$10.5 billion by November, said vice chairman and general secretary of the Viet Nam Textile and Apparel Association (Vitas) Le Van Dao.

Dao estimated that the industry would earn more than $1 billion each month in the fourth quarter.

September was the third consecutive month the industry fetched more than $1 billion from exports, bringing the sector's total export value in the first nine months of this year to more than $8 billion, a year-on-year increase of 20.6 per cent, according to the General Statistics Office.

Dao said many garment exporters had orders for the end of this year and even for the beginning of next year.

Over the past nine months, exports to the big markets have recorded high growth. Exports to the US increased 22.1 per cent to $3.94 billion while the rising figures to the EU and Japan were 6.7 per cent and 14.3 per cent to $1.18 billion and $691 million, respectively.

Exports to North Korea surged 64 per cent thanks to the impact of its Free Trade Agreement with ASEAN.

However, Pham Xuan Hong, Vitas deputy chairman, said the garment industry was facing a shortage of labour and an increase in the price of transport and power.

A surge in the price of cotton on the world market also had a negative impact on the industry. A tonne of cotton has risen 45 per cent since the same period last year to $1,900-2,000 while the industry has to import up to 95 per cent of its cotton. The industry imported 260,000 tonnes of cotton in the first nine months of the year and estimates that figure will reach roughly 370,000 tonnes by the end of the year.

Hong said garment exporters were seeking new sources from Japan and ASEAN countries in order to enjoy preferential taxes.

To fulfil the target of $19 billion from exports by 2015 and $25 billion by 2020, the garment sector is actively implementing programmes related to cotton cultivation to increase domestic supplies and develop human resources to meet the increasing demands of the sector.

The sector is also promoting its trademark and setting up distribution networks nationwide to take a firm foothold in the domestic market. — VNS

Tuesday, December 28, 2010

Punters tune to broadcasting

HA NOI — With the deregulation of television broadcasting opening an opportunity for private invesment, the field is heating up, with more companies willing to face the high risks involved for an early stake in a potentially lucrative sector.

In a few short years, the nation's television viewers have seen choices grow from a few national channels operated by Viet Nam Television (VTV), plus a handful of provincial channels, to nearly 100 channels nationwide, many privately operated.

In addition to the promise of growing advertising revenues, investors are also attracted to the potentially limited number of broadcast licences available, with the licences themselves likely to become increasingly valuable assets.

Among the companies to enter the broadcasting industry are YANTVJSC, FPT Media, Ocean Group, BHD, Cat Tien Sa and Lasta, and they have created such channels as SNTV, Shopping TV, SCTV, InfoTV, O2, VITTV and Today TV YANTV, all generating original programming. A number of channels have also come and gone due to a failure to attract viewers and advertising revenue in this high-stakes. Others, seeking a quick profit, try to lure advertisers with hastily produced films or game shows.

The industry is driven by sales of 30-second advertising spots. The VTV, for instance, agreed with BDH Co Ltd to buy rights to broadcast the television series The Ugly Girl (the Vietnamese remake of the popular overseas series Ugly Betty) for VND300 million (US$15,384), plus the right to sell 30-second advertising spots during the series daily timeslot of 9-0pm daily on VTV3.

With BDH facing production costs for the series of VND100 million ($5,128) per episode, BDH would be able to recoup VND200 million ($10,256) per episode selling the advertising time. VTV3 would sell additional advertising slots, making it profitable for all concerned as long as the series is popular and viewers are tuning in.

The broadcasting industry burns cash in a wink, quipped one industry insider.

BDH has been successful in producing a number of popular TV programmes, including MTV Magazine, Sunday at Home and the Vietnamese version of the veteran US game show The Price is Right. Rival Cat Tien Sa has seen success with its Singing with the Stars.

Relaxed regulation of the industry and the burgeoning of private companies in television production, many of which have invested heavily in production facilities and human resources, suggest that the quality of programming may falter as a consequence.

But television writer Dang Thanh said private companies were more careful to maintain quality but success was in their economic interest. Many attracted professionals who considered television as their career, Thanh said.

A number of investors in the industry have also already gotten their fingers burned. Techcombank invested in the healthcare channel O2 in 2007, only to be forced to resell at a loss, despite a built-in advertiser base, the nation's growing pharmaceuticals market.

Ocean Bank has a similar problem with the Shopping channel. The channel's director, Hong Minh, said the channel responded by making programming more attractive to viewers and advertisers. Shopping TV was dedicated to providing consumers with an attractive retail channel, and Minh said she expected the channel to turn a profit in the near future.

Minh said competition in the broadcasting industry was not that fierce and was consistent with the country's level of economic development.

Some advertisers were expressing concern, however. Tran Duc Minh of CG Viet Nam said the poor quality of some game shows had caused viewership and advertising revenue to decline. Many viewers had also complained about the large amount of advertising during some programming. — VNS

Sunday, December 26, 2010

Seminar highlights safety in oil & gas industry

Enhancing safety during offshore oil and gas exploration and production
was the main topic of a seminar, hosted by the Vietnam National Oil and
Gas Group (PetroVietnam) in Ho Chi Minh City on Sept. 30.

PetroVietnam’s Deputy General Director Do Van Hau recalled the
Deepwater Horizon explosion which occurred in the Gulf of Mexico on
April 20, 2010, killing 11 people and triggering the largest-ever oil
spill in the history of oil and gas exploration.

The
incident set off alarm bells throughout the industry and reminded
management agencies and the oil and gas industry to re-examine safety in
the sector, he said.

Hau said that over the past 30
years, PetroVietnam and international contractors have spared no effort
in ensuring the safety of their staff and the environment, stressing
that there have been no serious accidents so far.

However, following the Deepwater Horizon incident, safety in offshore
oil and gas production has become a special concern for the State and a
priority task for the Vietnamese oil and gas industry.

The delegates, including managers and representatives from oil and gas
joint ventures and services companies from Vietnam and overseas,
reviewed and recommended various measures to ensure safety in the
industry.

They also discussed the lessons learnt
from the oil spill in the Gulf of Mexico as well as its impacts on the
international insurance market and the risk management measures and
insurance policies used by oil and gas companies./.

Monday, November 1, 2010

Chemical analysis labs need more domestic equipment

HCM CITY — Viet Nam should manufacture more machinery for chemical analytical laboratories as the market for such services is huge, experts have said.

Phung Minh Lai, deputy head of the National Agency for Science and Technology Information, said the annual growth rate of Viet Nam's chemical industry would be between 10 per cent and 15 per cent in the next few years.

As part of a chemical industry development plan, the government has set up production targets for the petrochemical and pharmaco-chemical industries by 2020.

The Ministry of Health estimates that the total value of drug consumption in Viet Nam this year could reach nearly US$1.5 billion.

The growth rate of the pharmaceutical industry has reached 15 per cent annually in recent years, but the scale of the industry still has been small.

The industry mostly produces typical pharmaceutical products with simple technology, according to Lai.

To reach the target, the Government will invest around 11 million euros (US$14 million) in the industry by 2015.

These include funds for many projects, including six phamarceutical production plants, some of which would make antibiotics and sorbitol products.

Moreover, pharmaceutical companies are looking for foreign partners to help them put biotechnology into actual practice.

For the petrochemical industry, Viet Nam has built three plants during the first phase, and the second phase will be implemented by 2015.

The government also will invest nearly 30 million euros ($38 million) in environmental-research projects, including water and sewage treatment as well as solid waste management.

Viet Nam has applied biotechnology in the agricultural and aquacultural sectors as well as the food processing industry.

Because water and food safety certification are two areas with high demand, where laboratories and modern equipment are necessary.

Currently, the State is investing in building 17 main laboratories, but Lai said this was insufficient.

Most of the equipment now in use was imported from Europe and Asia.

Nicole Klammer, head of the Analytica Viet Nam Project, said the country needed an outstanding platform for the analytical lab field.

Analytica Viet Nam on April 7-9 next year will hold a fair to display a variety of equipment that can be used in the country. — VNS

Sunday, October 31, 2010

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.

Saturday, October 30, 2010

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./.

Monday, October 4, 2010

Coffee exports fall in value, volume

HA NOI — The coffee industry in the first eight months of the year saw a decline in both export volume and value, according to the Ministry of Agriculture and Rural Development.

During this period, the industry exported 840,000 tonnes of coffee, earning export revenue of US$1.2 billion, the ministry said.

It added that the figures were a 1.3 per cent decline in volume and 4.7 per cent fall in value.

In August, the country earned $140 million from exporting 90,000 tonnes of coffee.

In the first eight months of the year, average coffee prices stood at about $1,415 per tonne, a year-on-year decline of 4.6 per cent.

Doan Trieu Nhan, from the Viet Nam Coffee and Cocoa Association, affirmed that although Vietnamese robusta coffee was of high quality, there were serious shortcomings in harvesting and processing resulting in lower prices than that of other countries including Indonesia.

"Farmers can't afford to build cement yards or buy machines to dry coffee so they are failing to ensure consistent quality," Nhan said.

To address this issue, Nhan suggested the Ministry of Agriculture and Rural Development (MARD) establish a quality control standard.

"The standard will help managers prevent low-quality coffee from being exported, and will protect the prestige of the national coffee industry. It will also provide both sellers and buyers a guarantee on place of origin and quality of coffee", Nhan said.

He added that Vietnamese coffee exports would strongly develop in the near future, but only when the industry had good management.

Bui Ba Bong, MARD's deputy minister demanded that provinces develop policies to help local farmers build cement yards or buy coffee drying equipment.

"Processing coffee in farmer households is very important. It directly affects the quality of the coffee," Bong said. — VNS

Saturday, September 25, 2010

IT sector targets $17bln over five years

The country's information technology industry has set a revenue target of US$17 billion by 2015, according to the Ministry of Information and Communications.

Software sales revenue would be $2 billion, hardware $12.5 billion and IT services $1.5 billion, the ministry said.

The plan to develop the country's IT industry until 2015 and 2020 has been drafted by the ministry to be submitted to the Government later this year.

Under the draft plan, the average growth rate of the country IT industry would reach 17.5 percent per year by 2015, with the hardware sector increasing 18 percent a year, software by 15 percent and digital content by 20 percent.

Exports will account for more than 60 percent of the total industry revenue.

The plan is to develop three production centres - in software, services and digital content - in HCMC, Hanoi and Danang.

Three strong regions of hardware and electronics will be established in the north, centre and south.

The ministry aims to develop two hardware and electronics businesses with an average revenue of over $2 billion and two software businesses with an average revenue of $200 million a year, plus two digital content businesses with a turnover of above $500 million a year.

Some 50,000 IT engineers would be trained and become proficient in foreign languages.

The draft plan aims to generate Made in Vietnam hardware products for the domestic market, which could be exported to international markets.

Some open source software products would be localised to be used in State agencies. The plan aims to develop a search engine in Vietnamese and three websites on procurement of goods in line with specific culture of Vietnam.

The draft plan envisages Vietnam would be among countries with the most attractive outsourcing industry and HCMC, Hanoi and Danang would be in a group of 10 emerging cities for outsourcing.

The plan also aims to attract over $5 billion in foreign investment for the information technology industry.

Wednesday, September 22, 2010

IT sector targets 17bln USD over five years

The country's information technology industry has set a revenue target
of 17 billion USD by 2015, according to the Ministry of Information and
Communications.

Software sales revenue would be 2 billion USD, hardware 12.5 billion USD and IT services 1.5 billion USD, the ministry said.

The plan to develop the country's IT industry until 2015 and 2020 has
been drafted by the ministry to be submitted to the Government later
this year.

Under the draft plan, the average growth
rate of the country IT industry would reach 17.5 percent per year by
2015, with the hardware sector increasing 18 percent a year, software by
15 percent and digital content by 20 percent.

Exports will account for more than 60 percent of the total industry revenue.

The plan is to develop three production centres - in software,
services and digital content - in HCM City, Hanoi and Da Nang.

Three strong regions of hardware and electronics will be established in the north, centre and south.

The ministry aims to develop two hardware and electronics businesses
with an average revenue of over 2 billion USD and two software
businesses with an average revenue of 200 million USD a year, plus two
digital content businesses with a turnover of above 500 million USD a
year.

Some 50,000 IT engineers would be trained and become proficient in foreign languages.

The draft plan aims to generate Made in Vietnam hardware products for
the domestic market, which could be exported to international markets.

Some open source software products would be localised
to be used in State agencies. The plan aims to develop a search engine
in Vietnamese and three websites on procurement of goods in line with
specific culture of Vietnam.

The draft plan
envisages Vietnam would be among countries with the most attractive
outsourcing industry and HCM City, Hanoi and Da Nang would be in a group
of 10 emerging cities for outsourcing.

The plan also aims to attract over 5 billion USD in foreign investment for the information technology industry./.

Monday, September 20, 2010

Shoe exports stride towards lucrative year

Domestic shoemakers expect to export goods worth US$5.4 billion by the year-end, industry leaders say.

Nguyen Duc Thuan, chairman of the Vietnam Leather and Footwear Association (Lefaso), said at a press conference last week that more than 500 leather-shoe makers were confident that the industry's export value would reach record figures this year.

The confidence was based on actual market conditions, Thuan said.

In 2009, the industry exported shoes worth $4.1 billion despite several difficulties caused by the global economic recession.

In the first seven months of this year, its export earnings climbed to $2.79 billion, up 15.3 percent year on year.

Members still held many high-value export contracts from now to the year-end, he said.

Over the last few years, the industry has grown by 10 and 15 percent per year, and emerged as the country's third largest export earner. It would strive to maintain the momentum this year, Thuan said.

Diep Thanh Kiet, vice chairman of the HCMC Leather and Footwear Association, said Vietnam was the world's fourth biggest exporter of leather footwear, with major overseas markets being the US and Japan. These markets each year consumed about 120 and 125 million made-in-Vietnam footwear, he said.

Industry leaders said some favourable conditions had helped them do well in the international market.

Thuan said the industry had a highly professional and skilled workforce of about 650,000 people.

Countries whose per capita GDP was less than US$4,000 per year would be able to be remain competitive for some time, he said.

In Vietnam , he said, per capita GDP was predicted to stand at $3,500 per year until 2020. This means that the domestic leather-shoe industry still had potential to compete with those in regional countries, he added.

Another favourable condition for the domestic shoe industry to keep its growth is that demand for leather footwear was still very high.

Worldwide, about 17 billion pairs of shoes are produced every year, of which six and seven billion were manufactured under export contracts.

Thuan said that despite the favourable conditions, the domestic leather-shoe industry also faced several obstacles to meeting its development potential.

The industry was heavily reliant on imported materials and accessories. The capital that shoemakers needed to buy materials accounted for up to 60 percent of the total value of a product, he said.

There were just 20 enterprises in the country involved in the leather tanning industry so they would not be able to supply enough processed leather for shoemakers, Thuan explained.

A representative of the Vietnam Leather-Shoe Joint Stock Company (Vina-Giay), also said one of the biggest problems facing the industry was poor tanning capacity and skills.

Meanwhile, shoemakers and suppliers of materials and accessories were yet to establish close co-operation with each other, he said.

Another limiting factor for the industry was that Vietnamese shoemakers were paying inadequate attention to the lucrative domestic lucrative market, said Vu Van Cham, chairman of the HCMC Leather and Footwear Association.

Half of the domestic market was now occupied by foreign shoemakers, which made domestic shoemakers over-reliant on export manufacturing contracts, and they suffered badly when overseas markets fluctuated, Cham said.

Up to 97 percent of the Vietnamese shoemakers are small and medium-sized enterprises who find it difficult to develop hi-tech production infrastructure and implement high-value contracts, he said.

Saturday, September 18, 2010

VN too dependent on imports

A production line at Viet Nam Key Plastics. The company, in southern Binh Duong Province, is 100-per-cent Japanese invested. — VNA/VNS Photo Chi Tuong

HA NOI — Viet Nam industry's dependence on imports for production was identified as a major weakness in the economy at a seminar in Ha Noi yesterday.

The country was passive in the input of materials for its industrial production, said Ha Noi University of Foreign Trade's Professor Dao Ngoc Tien.

"Therefor its exports are dependent on its imports."

And the increase in the price of input materials had exacerbated the imbalance, the professor told the meeting to promote Viet Nam's support industries.

Development of the support industry was a key to improving the quality of the country's growth, said Professor Tien.

It would help promote the development of domestic small to medium enterprises as well as create a wide-ranging, diversified production and business system.

Capacity

The result would lift the competitive capacity of all economic sectors.

Viet Nam's support industries include material production, spare parts, garments, leather and shoes, motorbike and car assembly and mechanical engineering.

Viet Nam has attracted billions of dollars in foreign investment and provided up to 1.5 million jobs to play a pivotal role in the country's economic development since the introduction of renewal.

But economists put Viet Nam's industry at 20 to 40 years behind its regional neighbours.

It matches China of the 1980s; Malaysia, the 1970s; and South Korea, the 1960s.

Both Professor Vu Thi Xuan Thuy of the Viet Nam Development Forum and Vu Hoai Nam of the foreign trade university told the gathering of international and domestic experts that "assembly" remained Viet Nam's major industry despite its high economic growth.

Support industries were under-developed with few scattered domestic spare-parts factories that were unable to produce products in the quantity or quality of the region's other developing countries, they said.

Importance

International Economics and Politics Institute director Luu Ngoc Trinh said all sectors, enterprises, lawmakers and the people would have to understand the need and importance of a developed support industry.

"Government policies favourable to the development of support industries is one of the most important measures," they said.

A majority of leather and shoe enterprises were aware of the urgent need to develop the support industry for their production, said foreign trade university professors Nguyen Hoang Chau and Nguyen Van Minh.

But the domestic support industry's capacity was poor and almost 90 per cent of the enterprises did not trust it.

They agreed with Professor Trinh saying that the Government should introduce policies favourable to international and domestic enterprises so as to attract more "anchor" firms and train personnel.

Japan International Co-operation Agency economist Kyoshiro Ichikawa said Viet Nam's support industry was facing serious competition from foreign – invested enterprises and imports.

There were a number of domestic support-industries but they faced fierce competition from imports in both quality and delivery.

The economist said the Vietnamese Government should introduce policies designed to attract international companies provide more FDI for Viet Nam so that domestic enterprises could learn and compete with them.

Enterprises and firms should also receive subsidies to transfer technology, he said. — VNS

Friday, September 17, 2010

Shoe exports stride towards lucrative year

Domestic shoemakers expect to export goods worth 5.4 billion USD by the year-end, industry leaders say.

Nguyen Duc Thuan, chairman of the Vietnam Leather and Footwear
Association (Lefaso), said at a press conference last week that more
than 500 leather-shoe makers were confident that the industry's export
value would reach record figures this year.

The confidence was based on actual market conditions, Thuan said.

In 2009, the industry exported shoes worth 4.1 billion USD despite
several difficulties caused by the global economic recession.

In the first seven months of this year, its export earnings climbed to 2.79 billion USD, up 15.3 percent year on year.

Members still held many high-value export contracts from now to the year-end, he said.

Over the last few years, the industry has grown by 10 and 15 percent
per year, and emerged as the country's third largest export earner. It
would strive to maintain the momentum this year, Thuan said.

Diep Thanh Kiet, vice chairman of the HCM City Leather and Footwear
Association, said Vietnam was the world's fourth biggest exporter of
leather footwear, with major overseas markets being the US and Japan.
These markets each year consumed about 120 and 125 million
made-in-Vietnam footwear, he said.

Industry leaders said some favourable conditions had helped them do well in the international market.

Thuan said the industry had a highly professional and skilled workforce of about 650,000 people.

Countries whose per capita GDP was less than 4,000 USD per year would be able to be remain competitive for some time, he said.

In Vietnam , he said, per capita GDP was predicted to stand at 3,500
USD per year until 2020. This means that the domestic leather-shoe
industry still had potential to compete with those in regional
countries, he added.

Another favourable condition for the
domestic shoe industry to keep its growth is that demand for leather
footwear was still very high.

Worldwide, about 17 billion
pairs of shoes are produced every year, of which six and seven billion
were manufactured under export contracts.

Thuan said that
despite the favourable conditions, the domestic leather-shoe industry
also faced several obstacles to meeting its development potential.

The industry was heavily reliant on imported materials and accessories.
The capital that shoemakers needed to buy materials accounted for up to
60 percent of the total value of a product, he said.

There were just 20 enterprises in the country involved in the leather
tanning industry so they would not be able to supply enough processed
leather for shoemakers, Thuan explained.

A representative
of the Vietnam Leather-Shoe Joint Stock Company (Vina-Giay), also said
one of the biggest problems facing the industry was poor tanning
capacity and skills.

Meanwhile, shoemakers and suppliers
of materials and accessories were yet to establish close co-operation
with each other, he said.

Another limiting factor for the
industry was that Vietnamese shoemakers were paying inadequate attention
to the lucrative domestic lucrative market, said Vu Van Cham, chairman
of the HCM City Leather and Footwear Association.

Half of
the domestic market was now occupied by foreign shoemakers, which made
domestic shoemakers over-reliant on export manufacturing contracts, and
they suffered badly when overseas markets fluctuated, Cham said.

Up to 97 percent of the Vietnamese shoemakers are small and
medium-sized enterprises who find it difficult to develop hi-tech
production infrastructure and implement high-value contracts, he said./.

Wednesday, August 25, 2010

Shoemakers unlikely to meet target

Customers shop for shoes at Viet Plaza Shopping Centre in HCM City. The leather and footwear industry is falling short of a target to meet 70 per cent of domestic demand by 2015. — VNA/VNS Photo Thanh Phan

HA NOI — The footwear industry would have to struggle to reach its target to of 70 per cent of the domestic market in five years without incentive policies, related production site and credit to encourage firms to expand, an industry analyst said.

Viet Nam is the world's fourth largest footwear producer and exporter with turnover of US$2.75 billion in the first seven months of the year, an increase of 13.8 per cent over the same period last year.

However, because the industry exports 90 per cent of production, it met only 40 per cent of domestic demand, the remainder being imported, mostly from China, HCM City Leather and Footwear Association chairman Nguyen Van Khanh said.

The Ministry of Industry and Trade estimated domestic demand would reach 130-140 million pairs of shoes (worth $1.5 billion) a year. The leather and footwear industry planned to supply 70 per cent of local demand by 2015, up from 40 per cent, and this was a tall order, Khanh said.

Viet Nam had more than 500 leather and footwear enterprises, 70-80 per cent of which were outsourcing for world brands such as Nike and Adidas and most of their samples, designs, material and technology were being provided by foreign firms, he said.

The Viet Nam-made leather and footwear products on the domestic market were made by small and medium producers, of which most were in HCM City – about 100 production bases– sized a few producers in the north, including in Ha Noi and Hai Duong.

Small- and medium- sized producers averaged 1,000-1,500 pairs of shoes a month , with only a few making from 6,000 to 15,000 pairs, a small volume compared with the domestic demand, Khanh said.

They faced many difficulties, such as a lack of capital and shortage of land and workforce, inexperienced management and outdated technology and plant.

For the country's leather and footwear industry to reach the target, the ministry and the Viet Nam Leather and Footwear Research Institute needed to conduct research, develop support policies and favourable mechanisms for the smaller enterprises, Khanh said.

There should be industrial zones created for footwear producers and credit funds made available for the development of trade villages and enterprises, he said. — VNS

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