Vietnam becomes hand-made hub

China, Turkey and Sweden are looking to Vietnam for cheap, well-made handicrafts

Vietnamese pottery products on display at an exhibition in Ho Chi Minh City. Local suppliers of hand-made products are highly competitive on the global market, experts say.

International manufacturers are looking to Vietnam to make their hand-made products thanks to the country’s cheap labor and competitive pricing.

In the meantime, growing Chinese wealth has translated to skyrocketing imports of high-end Vietnamese furniture.

IKEA, the world’s largest furniture retailer plans to double its orders from Vietnam in the next three years. At the moment, the conglomerate is the largest buyer of Vietnamese hand-made products.

Mikael Demitz-Helin, manager of IKEA Trading in Southeast Asia, says Vietnamese suppliers of products like textiles, furniture, handicrafts and ceramics were highly competitive on the global market.

IKEA, which has been doing business in Vietnam for 14 years, shipped out 25,000 containers of hand-made Vietnamese products last year to its stores worldwide. Its Southeast Asian headquarters are based in Ho Chi Minh City and the firm currently does business with 42 Vietnamese companies producing textile, wood and metal products. IKEA has 1,047 suppliers, worldwide.

Demitz-Helin told Thanh Nien Weekly that Vietnam is a choice manufacturing destination due to its competitive advantages of cheap, skilled labor and abundant raw materials.

He said many Vietnamese firms hoping to break into the global market have been hindered by a shortage of investment. Without proper funding, many hand-made product manufacturers find themselves unable to increase their production to meet soaring international demand.

“Local businesses have utilized the nation’s low labor costs and need to invest in technology [to meet] bigger orders from international buyers,” said Demitz-Helin.

He said IKEA has extended technical support to small manufacturing firms seeking to become IKEA’s long-term suppliers.

Talking Turkey

Selman Aycan, a representative from Turkish Businessmen and Industrialists in Vietnam (TUSKON) said buyers in the European-Asian country have discovered Vietnam as a new source of home products like furniture, rattan and bamboo handicrafts in addition to products like building materials and plastics.

Aycan said that two-way trade between Turkey and Vietnam doubled last year nearing US$500 million.

An unofficial source said the exchanges amounted to $390 million during the first eight months of this year.

Turkish buyers had been previously unaware of Vietnam due to the geographical distance between the two countries, said Aycan, who led a delegation of Turkish businesses to join an export exhibition of furniture in HCMC last week.

He said the association will invite a delegation of Vietnamese craft sellers to visit the Turkish market next summer.

Fine China

China has emerged as a major buyer of Vietnamese handmade products, according to an official from the Handicraft and Wood Industry Association of HCMC or HAWA.

Dang Quoc Hung, deputy chairman of the association, said furniture factories have reached their capacity to fill orders from international importers, especially Chinese buyers.

“It is strange that local firms have received many orders for high-quality products from China, the world’s biggest wooden product exporter,” said Hung.

Hung told Thanh Nien Weekly that Vietnam’s export of high-quality furniture to China soared from $100 million to $230 million in the first eight months of this year. Vietnam exported $890 million and $270 million worth of furniture to the US (the world’s largest importer) and Japan respectively in the same period, according to HAWA.

China’s manufacturers have focused on low-priced products and left a big hole for high-quality furniture in the domestic market, said Hung, adding that demand for the product has grown as China’s high-income demographic continues to flourish.

Expanding Chinese wealth could bring opportunities for other producers as well, he said.

Meanwhile, Vietnam’s rattan and bamboo furniture exports have been valued at $2.41 billion and $153 million respectively. The figures represent a 34.5 and 18 percent year-on-year increase in the first nine months of 2010, according to the General Statistics Office.

The office also said the country shipped $8 billion worth of textiles and garments – a 20 percent increase from January to September.

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Vietnam becomes hand-made hub

China, Turkey and Sweden are looking to Vietnam for cheap, well-made handicrafts

Vietnamese pottery products on display at an exhibition in Ho Chi Minh City. Local suppliers of hand-made products are highly competitive on the global market, experts say.

International manufacturers are looking to Vietnam to make their hand-made products thanks to the country’s cheap labor and competitive pricing.

In the meantime, growing Chinese wealth has translated to skyrocketing imports of high-end Vietnamese furniture.

IKEA, the world’s largest furniture retailer plans to double its orders from Vietnam in the next three years. At the moment, the conglomerate is the largest buyer of Vietnamese hand-made products.

Mikael Demitz-Helin, manager of IKEA Trading in Southeast Asia, says Vietnamese suppliers of products like textiles, furniture, handicrafts and ceramics were highly competitive on the global market.

IKEA, which has been doing business in Vietnam for 14 years, shipped out 25,000 containers of hand-made Vietnamese products last year to its stores worldwide. Its Southeast Asian headquarters are based in Ho Chi Minh City and the firm currently does business with 42 Vietnamese companies producing textile, wood and metal products. IKEA has 1,047 suppliers, worldwide.

Demitz-Helin told Thanh Nien Weekly that Vietnam is a choice manufacturing destination due to its competitive advantages of cheap, skilled labor and abundant raw materials.

He said many Vietnamese firms hoping to break into the global market have been hindered by a shortage of investment. Without proper funding, many hand-made product manufacturers find themselves unable to increase their production to meet soaring international demand.

“Local businesses have utilized the nation’s low labor costs and need to invest in technology [to meet] bigger orders from international buyers,” said Demitz-Helin.

He said IKEA has extended technical support to small manufacturing firms seeking to become IKEA’s long-term suppliers.

Talking Turkey

Selman Aycan, a representative from Turkish Businessmen and Industrialists in Vietnam (TUSKON) said buyers in the European-Asian country have discovered Vietnam as a new source of home products like furniture, rattan and bamboo handicrafts in addition to products like building materials and plastics.

Aycan said that two-way trade between Turkey and Vietnam doubled last year nearing US$500 million.

An unofficial source said the exchanges amounted to $390 million during the first eight months of this year.

Turkish buyers had been previously unaware of Vietnam due to the geographical distance between the two countries, said Aycan, who led a delegation of Turkish businesses to join an export exhibition of furniture in HCMC last week.

He said the association will invite a delegation of Vietnamese craft sellers to visit the Turkish market next summer.

Fine China

China has emerged as a major buyer of Vietnamese handmade products, according to an official from the Handicraft and Wood Industry Association of HCMC or HAWA.

Dang Quoc Hung, deputy chairman of the association, said furniture factories have reached their capacity to fill orders from international importers, especially Chinese buyers.

“It is strange that local firms have received many orders for high-quality products from China, the world’s biggest wooden product exporter,” said Hung.

Hung told Thanh Nien Weekly that Vietnam’s export of high-quality furniture to China soared from $100 million to $230 million in the first eight months of this year. Vietnam exported $890 million and $270 million worth of furniture to the US (the world’s largest importer) and Japan respectively in the same period, according to HAWA.

China’s manufacturers have focused on low-priced products and left a big hole for high-quality furniture in the domestic market, said Hung, adding that demand for the product has grown as China’s high-income demographic continues to flourish.

Expanding Chinese wealth could bring opportunities for other producers as well, he said.

Meanwhile, Vietnam’s rattan and bamboo furniture exports have been valued at $2.41 billion and $153 million respectively. The figures represent a 34.5 and 18 percent year-on-year increase in the first nine months of 2010, according to the General Statistics Office.

The office also said the country shipped $8 billion worth of textiles and garments – a 20 percent increase from January to September.

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Vietnamese companies penetrate Cambodian market

A trade fair showcasing Vietnamese and Cambodian industrial products
will take place in the Cambodian capital city of Phnom Penh from
December 15-18.

When addressing a press briefing
on October 15, Vice Chairman of the HCM City Mechanical Engineering
Association, Pham Ngoc Tuan, said that the event will help Vietnamese
businesses to promote their products and seek out new markets in
Cambodia .

With almost 350 stands, the fair is
divided into two themes, one of which is being run by the Cambodian
Ministry of Commerce, focusing on exports from Cambodian provinces.

The other will introduce international industrial products, not only
from Vietnam and Cambodia but also from other countries such as
Japan , Singapore , China and Thailand . The area will be
administered by the HCM City Mechanical Engineering Association and the
Dang Khoa Trade, Investment and Services Promotions Company.

At the event, Vietnamese products will be showcased in 100 stands,
including mechanical engineering, information technology,
transportation, construction and the biochemical’s industry.

According to the organising committee, the Vietnamese and Cambodian
governments have signed a number of economic agreements, which have
created the best possible conditions for Vietnamese businesses to expand
their operations in the Cambodian market.

Market
surveys in Cambodia showed Vietnamese products account for a
substantial amount of the country’s market share. However the
availability of industrial machinery and equipment is still limited./.

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City consumers benefit hugely from sales promotion month

Consumers buy fashion products at a supermarket in HCMC. Discounts for fashion products averaged out at 22% during September - Photo: Minh Tam

HCMC – Consumers in HCMC enjoyed nearly VND300 billion, or some US$15 million, under the form of discounts during September chosen as the Big Sale Promotion Month, the city’s Department of Industry and Trade said on Wednesday.

In its overview of the sales month released on Wednesday, the department said the total promotional value amounted to VND296 billion, a hefty increase of 120% against the similar activity last year.

As many as 608 traders with 2,200 outlets participated in the sales program, increasing by 22.7% and 38% respectively. Most of the participating traders are trade centers, supermarkets, and marketplaces.

The department in its report said sharpest discounts belonged to cosmetics-fashion at an average 22%, followed by digital equipment and ICT devices at 18.5%, tourism-hotel and foods and beverages both at 16.2%, and household appliances at 15.9%.

Many traders reported sharp increases in sales during the month.

Saigon Co.op with its stores chain Co.opMart saw sales revenue increase 40% against the previous month and 50% year on year, while BigC witnessed the number of shoppers increase a staggering 110%. Other less-known supermarkets also reported agreeable growth rates, at 15-25% at Maximark, and 30% at Citimart.

Electronics centers were also big gainers in the month. Thien Hoa Electronics Shopping Centers reported an increase of 120% against August and 136% against the year-earlier period.

A highlight of this year’s sales program is the attraction of green products marketed by Unilever, Vinamilk, Colgate Palmolive, and Kido JS Company.

Revenues of these enterprises introducing green products at Saigon Co.op’s chain were said to increase by between 30% and 40% during the week-long showcase.

The Sales Promotion Month is a regular activity organized by the city’s Department of Industry and Trade in collaboration with the Department of Culture-Sports-Tourism to boost sales in September, when retail revenues often plunge. The annual activity was first organized in 2005.

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Going rogue

Vietnam’s brokers are anxious for more investment options – so anxious that they’re taking matters into their own hands

An investor checks stock prices at Ho Chi Minh City Securities Corporation. Many securities firms believe that the market will benefit from new products and risk mitigating measures.

Securities companies are asking authorities to give them more autonomy so that they can diversify their products for the good of the market.

Industry insiders have expressed dissatisfaction that, after ten years of operation, Vietnam’s stock market is still limited to just a few basic products such as shares, bonds and fund certificates.

Over the same period, the stock regulator has not approved any new products.

Every time brokerages attempt to launch a new service, they have been ordered to stop. Derivatives like futures and options are not officially available in the country. Investors here are not allowed to buy stocks on margin nor conduct short-selling.

Some securities companies say they want to exercise the freedom to offer financial products that existing laws do not expressly prohibit. The State Securities Commission, in the meantime, argues that it is not the right time to introduce the products.

Speaking at a July conference in Ho Chi Minh City, Vice Chairman of the State Securities Commission Nguyen Doan Hung said eventually Vietnam’s stock market will need additional products. However, the appropriate launch time depends on the development of the market; it cannot be rushed.

The Vietnam Association of Securities Businesses has recently asked the State Securities Commission and the Finance

Ministry to legalize margin trading - in which investors borrow money from brokerages to buy shares with a loan of up to 50 percent of the shares’ value. The association also wants the authorities to allow investors to open multiple accounts and to both sell and buy the same stock in a trading session if they want.

“All of the nearly 100 members of the association support these requests and we hope that the authorities will facilitate a healthy development of the stock market soon,” said Nguyen Thanh Ky, general secretary of the association.

Nguyen Phuc Long, chairman of the Vietnam Industry and Commerce Securities Company, said securities firms should be at liberty to offer services whose risks they can manage on their own. Repurchase or “repo” transactions, for instance, should not be restricted.

Speaking on condition of anonymity, one official from a brokerage firm said delays in legalizing repo transactions, margin trading and multiple-accounts showed that the authorities have not succeeded in managing the market well.

The authorities were concerned about the negative impacts that these products might have on the market’s stability. But, since the market has been restricted for such a long time, many companies have broken the rules, making the market even harder to manage, the official said.

In a recent case, Hanoi-based VnDirect Securities Company launched a new options trading service.

The options were offered on around 20 stocks listed in the country’s two exchanges. Similar to the option-type derivative in other countries, the product gives the holder the right to buy (call option) or sell (put option) on a stock for a specific price and time period.

This product has not been approved by the stock regulator. Pham Hong Son, a senior official at the State Securities Commission, told Thanh Nien that the agency has not authorized derivatives on the local stock market. Therefore, if securities firms offer such products, they have to take full responsibility for the consequences.

Some experts do not support this type of derivative trading, either. Economist Le Dat Chi said if options are available across the market, the risks can be reduced. However, it will be really risky if only certain firms offer the product under the table.

Economist Le Tham Duong of the HCMC Banking University said options are a risk management instrument that can be used for all commodities including currency, gold, steel and coffee. But when abused for profits, options trading can become a form of gambling.

“Vietnam’s stock market is not ready for derivatives like options because of the limitations in management, market size and investors’ forecasting abilities,” Duong said. “The problem is when it’s difficult to identify the real motive behind the use of derivatives, the risks can’t be prevented.”

Many securities firms believe that the market will benefit from new products and risk mitigating measures.

Diversification would increase liquidity and help investors protect themselves better and give them more options to cut losses, they said. Many among this group have attributed recent market sluggishness to the limited range of products.

Vietnam’s share index has fallen 10 percent so far this year.

Ky of the Vietnam Association of Securities Businesses said it’s urgent that the authorities start approving “healthy” products provided by securities firms as long as they follow international norms.

If this request is ignored, the association will take matters into its own hands and launch such products after making sure they don’t violate existing laws.

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Going rogue

Vietnam’s brokers are anxious for more investment options – so anxious that they’re taking matters into their own hands

An investor checks stock prices at Ho Chi Minh City Securities Corporation. Many securities firms believe that the market will benefit from new products and risk mitigating measures.

Securities companies are asking authorities to give them more autonomy so that they can diversify their products for the good of the market.

Industry insiders have expressed dissatisfaction that, after ten years of operation, Vietnam’s stock market is still limited to just a few basic products such as shares, bonds and fund certificates.

Over the same period, the stock regulator has not approved any new products.

Every time brokerages attempt to launch a new service, they have been ordered to stop. Derivatives like futures and options are not officially available in the country. Investors here are not allowed to buy stocks on margin nor conduct short-selling.

Some securities companies say they want to exercise the freedom to offer financial products that existing laws do not expressly prohibit. The State Securities Commission, in the meantime, argues that it is not the right time to introduce the products.

Speaking at a July conference in Ho Chi Minh City, Vice Chairman of the State Securities Commission Nguyen Doan Hung said eventually Vietnam’s stock market will need additional products. However, the appropriate launch time depends on the development of the market; it cannot be rushed.

The Vietnam Association of Securities Businesses has recently asked the State Securities Commission and the Finance

Ministry to legalize margin trading - in which investors borrow money from brokerages to buy shares with a loan of up to 50 percent of the shares’ value. The association also wants the authorities to allow investors to open multiple accounts and to both sell and buy the same stock in a trading session if they want.

“All of the nearly 100 members of the association support these requests and we hope that the authorities will facilitate a healthy development of the stock market soon,” said Nguyen Thanh Ky, general secretary of the association.

Nguyen Phuc Long, chairman of the Vietnam Industry and Commerce Securities Company, said securities firms should be at liberty to offer services whose risks they can manage on their own. Repurchase or “repo” transactions, for instance, should not be restricted.

Speaking on condition of anonymity, one official from a brokerage firm said delays in legalizing repo transactions, margin trading and multiple-accounts showed that the authorities have not succeeded in managing the market well.

The authorities were concerned about the negative impacts that these products might have on the market’s stability. But, since the market has been restricted for such a long time, many companies have broken the rules, making the market even harder to manage, the official said.

In a recent case, Hanoi-based VnDirect Securities Company launched a new options trading service.

The options were offered on around 20 stocks listed in the country’s two exchanges. Similar to the option-type derivative in other countries, the product gives the holder the right to buy (call option) or sell (put option) on a stock for a specific price and time period.

This product has not been approved by the stock regulator. Pham Hong Son, a senior official at the State Securities Commission, told Thanh Nien that the agency has not authorized derivatives on the local stock market. Therefore, if securities firms offer such products, they have to take full responsibility for the consequences.

Some experts do not support this type of derivative trading, either. Economist Le Dat Chi said if options are available across the market, the risks can be reduced. However, it will be really risky if only certain firms offer the product under the table.

Economist Le Tham Duong of the HCMC Banking University said options are a risk management instrument that can be used for all commodities including currency, gold, steel and coffee. But when abused for profits, options trading can become a form of gambling.

“Vietnam’s stock market is not ready for derivatives like options because of the limitations in management, market size and investors’ forecasting abilities,” Duong said. “The problem is when it’s difficult to identify the real motive behind the use of derivatives, the risks can’t be prevented.”

Many securities firms believe that the market will benefit from new products and risk mitigating measures.

Diversification would increase liquidity and help investors protect themselves better and give them more options to cut losses, they said. Many among this group have attributed recent market sluggishness to the limited range of products.

Vietnam’s share index has fallen 10 percent so far this year.

Ky of the Vietnam Association of Securities Businesses said it’s urgent that the authorities start approving “healthy” products provided by securities firms as long as they follow international norms.

If this request is ignored, the association will take matters into its own hands and launch such products after making sure they don’t violate existing laws.

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Oil products pile up, no storage space

Vietnam’s first oil refinery is facing the problem of having huge stockpiles of products that it has no place to store.

The Dung Quat oil refinery has 750,000 tons of oil and gasoline products in stock and not enough space to store them, said Vu Quang Nam, deputy chief executive of state-owned oil and gas group

PetroVietnam. He told a Monday conference in Hanoi that the plant has been running at full capacity, or 30 percent higher than the plan for this year.

According to Petrolimex, a subsidiary of PetroVietnam that has more than a 50 percent share of the domestic fuel market, the refinery was not able to project its output accurately at the beginning of this year.

Petrolimex therefore had to sign contracts to import 70 percent of the fuel it needed and only planned to buy the remaining 30 percent from Dung Quat. These import contracts could not be canceled, the company said.

Deputy Minister of Industry and Trade Nguyen Cam Tu said fuel traders had placed import orders early this year to ensure sufficient supply for the market. But the refinery’s output was higher than expected, leaving the ministry with a difficult logistical problem on its hands, he added.

The ministry has ordered PetroVietnam and Petrolimex to work together and balance demand with domestic production and imports.

The Dung Quat refinery, which cost US$3 billion to build, is designed to supply about one-third of the country’s fuel demand this year. The government in August approved a plan to increase its annual capacity from 6.5 to 10 million tons.

Vietnam spent $4.9 billion on petroleum product imports in the first nine months, a 4 percent rise, while earning $3.7 billion from the sale of crude oil, down 22 percent year-on-year, according to the General Statistics Office.

Nguyen Hoai Giang, general director of PetroVietnam subsidiary Binh Son Petrochemical Refinery Co., the operator of the 140,000-bpd refinery, said Dung Quat has supplied 5.5 million tons of fuel products to the market since it began commercial production in February last year.

Giang admitted that the plant was having a problem with slow sales right now. However, it will continue purchasing crude oil and maintain its production schedule, he said.

In the long term local fuel traders should build more storage facilities with a total capacity of 800,000 to one million tons, then “there will be no problem,” he said.

Vietnam plans to build two more refineries, aiming at self-sufficiency in oil products by 2015. Previously, the country had to import all of its fuel products.

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C/O fraud prevention council to debut next week

HCMC – A council responsible for preventing certificate of origin (C/O) fraud will be launched in Hanoi on October 14, said an expert in the industry.  

Tran Thi Thu Huong, director of the trade documents attesting center of the Vietnam Chamber of Commerce and Industry (VCCI), told the Daily on the phone that the VCCI-affiliated council would issue early warnings about suspected C/O fraud.

The launch comes at a time when many experts are warning of rising C/O fraud in other countries where companies want to evade anti-dumping tariffs.  

“Enterprises should take caution when signing commercial and investment cooperation contracts with partners for products having high risk of being imposed anti-dumping tariffs,” she said, adding the council would work companies via industry associations.  

The forthcoming council will also work with the Ministry of Planning and Investment to provide advice for foreign companies before they set up shop in Vietnam if their products belong to the list of goods already subject to anti-dumping duties. It aims to prevent the possibility that their products don’t meet requirements for C/Os.

“An early warning will help investment licensing agencies that will in turn let investors know whether their products are eligible for certification of origin or not,” said Huong. “This procedure can prevent foreign investors from building factories without a single production line in Vietnam or with pro forma production facilities just to apply for C/Os.”

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C/O fraud prevention council to debut next week

HCMC – A council responsible for preventing certificate of origin (C/O) fraud will be launched in Hanoi on October 14, said an expert in the industry.  

Tran Thi Thu Huong, director of the trade documents attesting center of the Vietnam Chamber of Commerce and Industry (VCCI), told the Daily on the phone that the VCCI-affiliated council would issue early warnings about suspected C/O fraud.

The launch comes at a time when many experts are warning of rising C/O fraud in other countries where companies want to evade anti-dumping tariffs.  

“Enterprises should take caution when signing commercial and investment cooperation contracts with partners for products having high risk of being imposed anti-dumping tariffs,” she said, adding the council would work companies via industry associations.  

The forthcoming council will also work with the Ministry of Planning and Investment to provide advice for foreign companies before they set up shop in Vietnam if their products belong to the list of goods already subject to anti-dumping duties. It aims to prevent the possibility that their products don’t meet requirements for C/Os.

“An early warning will help investment licensing agencies that will in turn let investors know whether their products are eligible for certification of origin or not,” said Huong. “This procedure can prevent foreign investors from building factories without a single production line in Vietnam or with pro forma production facilities just to apply for C/Os.”

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HCM City hosts furniture-handicrafts expo

Over 300 woodwork and handicraft businesses from both in and outside of
the country are displaying their products at the International Furniture
and Handicrafts Fair (EXPO 2010) which opened in Ho Chi Minh City
on October 6.

The event, jointly held by HCM
City’s Department of Industry and Trade and the Trade Promotion
Department under the Ministry of Industry and Trade, is to boost exports
of domestic wooden and handicraft products.

With
700 stands, the five-day fair will bring domestic woodwork and
handicraft businesses together, especially small and medium-sized
enterprises, who have little opportunity to take part in overseas
exhibitions, with their international partners.

As
part of the event, an online expo will be set up to help businesses
promote their trademarks by posting their information and products,
saving transaction times and costs.

So far, over
800 companies have registered 7,000 products on the online expo, an
increase of 21 percent in the number of businesses and 40 percent in
products compared with 2009.

In addition, there will be seminars for Vietnamese businesses and importers held by Turkey and Japan .

Over the past year, the International Furniture and Handicrafts Fair
has attracted a large number of participants, helping to raise the
industry’s export turnover from 590 million USD in 2001 to 2 billion USD
in 2005 and 3 billion USD in 2009. This year’s figure is expected to
reach almost 4.5 billion USD./.

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Mounting inventory puts refinery under tenterhooks

A view of Dung Quat Oil Refinery in Quang Ngai Province. The facility is facing huge inventory of oil products at the moment - Photo: Van Nam

HCMC, HANOI – Mounting inventory at Dung Quat Oil Refinery is threatening to cripple production at the facility as local distributors have signed irrevocable import contracts earlier and cannot shift to local products at the moment, sources said.

Minister of Industry and Trade Vu Huy Hoang said at a regular meeting of the ministry on Monday that the country’s first oil refinery was having a backlog of two million cubic meters of liquefied petroleum gas (LPG) plus over 700,000 tons of oil products.

Meanwhile, local oil traders refused to buy products from the refinery based in the central province of Quang Ngai despite rising demand.

Dung Quat, if running at full capacity, can turn out 150,000 tons of petrol, 240,000 tons of diesel oil, 23,000 tons of LPG and others, which is enough to meet one-third of local demand.

Vu Quang Nam, deputy general director of PetroVietnam as the parent firm of the refinery operator, told the meeting that if consumption of its finished oil products continues to go slow, the refinery will have to scale down production due to the lack of storage facilities.

“So I suggest the Ministry of Industry and Trade instruct all oil and petrol traders in the country to quickly increase their purchases of our products,” Nam said. He noted imports were still increasing while local products were piling up.

Figures at the meeting show the country in the January-September period imported US$4.87 billion worth of oil products, an increase of 4% year-on-year.

However, traders have pointed an accusing finger at the oil refinery operated by Binh Son Oil Refinery and Petrochemical Co., a subsidiary of PetroVietnam.

Pham Thi Huyen, deputy general director of the country’s biggest oil trader Petrolimex, explained that oil traders were still importing oil products from foreign suppliers since production at Dung Quat was not stable.

Due to the unstable production at Dung Quat plant since 2009, several oil traders have since early this year signed contracts to import enough petrol for local demand until the year-end, Huyen said.

She added that domestic oil traders could not stop importing oil products under the signed contracts by this time, otherwise they will have to pay compensations.

So, she said, the reasonable thing now is that Binh Son Oil Refinery and Petrochemical Co. to secure more tanks for storing its products to avoid disrupting the Dung Quat refinery’s production plan.

The Petrolimex executive also traded barbs with PetroVietnam over what she termed as an illogical trading mode when the oil and gas group demanded that all local oil traders buy Dung Quat’s products via PV Oil. Huyen said her company wanted to buy products directly from Binh Son Oil Refinery and Petrochemical Co. to cut cost as PV Oil imposed a high intermediary fee.

Minister Hoang agreed to her point, asking PetroVietnam to allow oil traders to have direct access to Binh Son Oil Refinery and Petrochemical Co.

Nguyen Cam Tu, deputy minister of industry and trade, remarked that the operator of Dung Quat refinery was not serious in complying with production schemes that had been announced, posing difficulties for oil traders in selling its products.

Tu also requested that oil traders to purchase more from the oil refinery. “In the coming time, petroleum traders should limit imports and increase purchases from Dung Quat.”   

It is not known after the meeting whether oil traders would buy more from the oil refinery, or whether the facility would have to limit production.

The US$3 billion refinery has plans to process some 5.2 million tons of crude oil to turn out some 4.1 million tons of oil products this year.

The refinery is also expected to have a total processing capacity of 6.5 million tons by 2011 to meet 30% of the country’s demand.

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Binh Dinh to host first forest product festival

The first Vietnam Forest Product Festival will take place in Quy Nhon, the central coastal city of Binh Dinh Province, from March 26-29, 2011.

The Ministry of Agriculture and Rural Development, the Vietnam Timber and Forest Product Association (VIFORES) and the provincial People’s Committee announced the event on Tuesday in Ho Chi Minh City.

Le Huu Loc, deputy chairman of the provincial People’s Committee said that over 400 domestic and international organizations are expected to attend with 700 pavilions.

Besides, seminars to promote trade in this field as well as cultural and culinary festivals will also be held, he added.

Hua Duc Nhi, Deputy Minister of Agriculture and Rural Development said that the festival aims to highlight the contributions of the forestry sector and step up the cooperation among forestry businesses both at home and abroad.

According to the VIFORES, wood products export is scheduled to reach US$3.1 billion this year, becoming one of five major hard currency earners of the country.

Vietnam currently ranks second in Southeast Asia in term of wood products export. Its products are shipped to 120 countries worldwide.

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Imported Chinese toothpicks dominate domestic market

Workers make toothpicks in Dien Chau town in the central province of Nghe An. The higher price of domestic toothpicks have reduced their competitiveness. — VNA/VNS Photo Tran Canh Yen

HCM CITY — The bamboo toothpick market in HCM City, once dominated by domestic producers, has been inundated with Chinese products.

The Sai Gon Customs Department Zone 1 reported that during the first eight months of the year, 911 tonnes of bamboo toothpicks were imported through the Cat Lai Port, 200 tonnes in August alone.

The imports reached a turn over of US$125,000.

Tran Van Phuoc, owner of a company that imports bamboo toothpicks in HCM City, said the imported products only cost VND2.6 million ($135) per tonne, which was half the price of their locally made counterparts.

"Because of the huge price difference, many businesses prefer to buy imported products," he said.

Chinese toothpicks are more diverse in price, packaging and appearance, with prices ranging from VND2,300 ($0.12) to VND23,000 ($1.2) for 10 packages.

Nguyen Lan Huong, a customer in Tan Binh District said "Chinese toothpicks are white, smooth and clean, while some Vietnamese-made products do not look clean and are even rough."

A representative from Tre Viet Enterprise in Central Highlands' Lam Dong Province said that Vietnamese producers often made toothpicks manually while Chinese companies used more advanced technology.

"Our labour is more expensive and the products do not look as good as Chinese ones," he said.

Leader Vu Ngoc Quynh of Dong A, another toothpick producer, holds a different view, however.

He said "toothpicks are most frequently used in restaurants in Sai Gon, not in households, and restaurant owners choose Chinese toothpicks because they are cheaper".

"We have lost about 30-40 per cent of our customers this year," Quynh said, adding that each month their company sells about four tonnes of toothpicks.

To compete with the imported toothpicks, Quynh said his company was planning to produce a cheaper variety to meet the needs of different types of customers.

"We will try to cut down on costs for large packages to restaurants and supermarkets," he said. —VNS

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Binh Dinh to host first forest product festival

The first Vietnam Forest Product Festival will take place in Quy Nhon,
the central coastal city of Binh Dinh province from March 26-29, 2011.

The Ministry of Agriculture and Rural Development, the Vietnam Timber
and Forest Product Association (VIFORES) and the provincial People’s
Committee announced the event on September 28 in Ho Chi Minh City.

Le Huu Loc, deputy chairman of the provincial People’s Committee said
that over 400 domestic and international organisations are expected to
attend with 700 pavillions.

Besides, seminars to promote trade in this field as well as cultural and culinary festivals will also be held, he added.

Hua Duc Nhi, Deputy Minister of Agriculture and Rural Development said
that the festival aims to highlight the contributions of the forestry
sector and step up the cooperation among forestry businesses both at
home and abroad.

According to the VIFORES, wood
products export is scheduled to reach 3.1 billion USD this year,
becoming one of five major hard currency earners of the country. Vietnam
currently ranks second in Southeast Asia in term of wood products
export. Its products are shipped to 120 countries worldwide./.

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Japanese retailer puts Vietnamese products on shelves

Japanese retailer Aeon Corporation has begun carrying Vietnamese products in its stores in Japan to take advantage of lower import duties under a free trade agreement signed between the two nations.

Aeon, Japan’s second largest retailer, was looking for Vietnamese suppliers in clothing, food and household products, said Toshihito Hirai, deputy general director of AIC’s Foods Supervision Division. AIC is in charge of purchasing products for Aeon.

Hirai said Vietnam has become a potential supplier of the group as it targets reduced costs and improved competitiveness.

He said the Japanese government had eliminated or reduced tariffs for almost Vietnamese agricultural products after the Economic Partnership Agreement between two countries took effect late in 2008.

The tariffs would reduce to zero from the current 1 to 5 percent for these products, especially seafood, and trading in Vietnamese products would fetch more benefits for the group, said Hirai.

He said shipping charges from Vietnam to Japan were reasonable and affordable and added to the company’s ability to improve its competitiveness in the retail market.

China, Thailand and Vietnam were the group’s top suppliers in Asia, he said. However, Chinese suppliers were focusing on the domestic market and the group had to look for other suppliers.

Vietnam was strong in export of agricultural and farm products like rice, vegetables, coffee, cashew, cassava, tea and oranges, he said.

He told Thanh Nien Weekly that quality was the group’s top concern in trading with Vietnamese suppliers, but many of them were trying to apply international standards in producing and packaging now.

The group would send a team to investigate Vietnamese factories processing seafood and other products in November as part of preparations for its first direct shipment from Vietnam, he said.

Aeon CEO Nagahashi Oyama had said during a visit to Vietnam last year that the retailer was looking for locations to develop a US$50 million trade, service and entertainment complex on 10 hectares in Ho Chi Minh City.

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Bianfisco enjoys zero-percent tax in US market

Vietnam’s tra and basa catfish have found a place among the 10 favorite seafood products in the US for the first time

Photo: Tuoi Tre

The US Department of Commerce (DOC) has agreed to a zero-percent tax rate for all products that the Can Tho-based Binh An Fishery Joint Stock Company (Bianfisco) exports to the US until 2012.

This is the second time DOC has cleared Bianfisco from its tariffs, making the company the sole Vietnamese tra and basa fish exporter enjoy the zero-percent tax in the US market in the two consecutive years.

Bianfisco CEO and Director General Pham Thi Dieu Hien said the DOC based on the secured quality of Bianfisco’s products to make that decision, which will enable the company to accelerate its penetration into the US market, the one of a high potential.

Bianfisco has invested heavily in building a fish material breeding zone to the Global Partnerships for Good Agriculture Practice (GAP) and applied a management system to track down the entire processing process of its products, from breeding zone to dinner table.

Established in 2005 with initial charter capital of VND500 billion (US$26.3 million), Bianfisco has emerged as one of the top ten tra and basa fish exporters in Vietnam in 2010.

The company has recently focused on developing a fishery research institute with a staff of more than 20 scientists and experts working in the fields of fish farming, organic chemistry, pathology, biology, water organisms, analytical chemistry, aquatic heredity, reproduction, nutrition, food industry, biotechnology and food processing with the aim of ensuring its product quality.

At present, Bianfisco’s products are sold in more than 80 countries and territories worldwide, with its key markets being the US and the European Union.

If the DOC gives the zero-percent tax rate to Bianfisco for the third time after 2012, the Vietnamese company will enjoy this tax preferential treatment forever, said Bianfisco CEO Hien.

 

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Companies encouraged to know their customers

HCM CITY — People buy products not merely for their utility value, but also for what they mean.

Understanding this and other aspects of consumer behaviour was crucial for Vietnamese enterprises looking to build customer loyalty, experts said at a conference in HCM City last week.

However, the bottom line of quality, durability and convenience of products remained unchanged, and enterprises needed to ensure this before paying attention to competition via promotion programmes, they added.

Participants at the conference, titled "Understanding customer behaviour to be successful in business", agreed that now, more than ever, building customer loyalty was critical for a business to thrive in the marketplace.

"Customer behaviour is the study of processes involved when individuals or groups select, purchase, use or dispose of products, services, ideas or experiences to satisfy their needs and desires," said Prof Ton That Nguyen Thiem, director of Brussels-based United Business Institute's MBA programme in Viet Nam.

He said customers' purchasing decisions were influenced by what a product means or how it projects their personality or defines their place in modern society.

This explained why many local consumers were fond of foreign goods, he said, noting that if local producers wanted to win consumers' hearts, they might find measures to create pride for consumers when they used their products.

"Researching consumer behaviour will help us understand it clearly and scientifically and help managers make better marketing decisions," he added.

Understanding consumer behavior would be a sound basis for developing marketing strategies including product positioning, identifying market segments, developing new products as well as developing brands, said Cao Thi Ngoc Dung, general director of Phu Nhuan Jewelry Company.

Each primary marketing activity would be more effective if it was based on knowledge of consumer behaviour, she said.

To convince customers to use local products, enterprises must display the strengths of their products, not merely call on the patriotism of Vietnamese people, said Vu Kim Hanh, director of the Business Study and Assistance Centre in HCM City.

According to a research on consumer behaviour conducted in HCM City by the Sai Gon Tiep Thi magazine, top concerns for Vietnamese consumers are durability and safety of the products, not their prices.

Customers also tend to pay more attention to the product's brand, model and information listed on the package when they opt to buy it.

Along with the surge in e-commerce, there are now unlimited places for customers to spend their money, especially the youth.

Modern distribution channels, including supermarkets and shopping centres are attracting more customers.

However, long-standing customs and community culture have ensured that traditional channels like local markets and grocery stores still play an important role in the retail sector, the research has found.

This required businesses not only to widen their distribution systems, but also to improve them to reach out to different markets in order to expand their market share, experts said. — VNS

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More counterfeit products flood Vietnamese market

Photo: AFP

The production and trade of fake products was becoming increasingly common, said Deputy Minister of Industry and Trade Nguyen Cam Tu.

Many officials agreed with the deputy minister that fake products were pervasive during a meeting which has been held to review the Prime Minister's direction No 28/2008/CT-TTg to fight the production of counterfeit goods.

Fake products are available across the country in urban centres and in rural markets.

Counterfeit goods are produced with sophisticated methods and modern technology, which makes it hard for consumers to distinguish between fake and genuine products, reported the Vietnam Fake Production Prevention and Trademark Protection Association.

Fake wine accounts for 20 to 50 percent of the market share.

Popular methods of marketing fake products include producing counterfeit registered trademarks. Production can include the use of low-quality materials mixed with genuine products.

Modern technology gives producers of fake goods the opportunity to sell well-forged products, including official-looking wrapping and labeling.

However, the lack of a legal framework and technology to evaluate products, and ineffective co-operation between relevant ministries and agencies makes it difficult for authorized agencies to stamp out the production and trade of counterfeit products, according to the association.

"The lack of comprehensive cooperation by relevant agencies and essential tools to conduct their work hinders the fight against counterfeit products," said Chairman of the Vietnam Anti-Fake Production and Trademark Protection Association Le The Bao.

Meanwhile, businesses themselves paid little attention to protecting their products with registered trademarks, he said.

The association proposed the Ministry of Justice to give Market Watch groups the power to punish violators to help improve the situation rather than keeping that capacity solely with chairmen of local People's Committees which is currently the case, he said.

"Businesses should actively work with authorized agencies to protect their trademarks," Bao added.

Deputy Minister Tu proposed the establishment of a decree on punishing producers and traders of fake products.

It was also essential to review and finalize all legal regulations against counterfeit and low-quality products and supplement the regulations on prosecuting violators, he said.

"Increasing information dissemination to raise public and business awareness about protecting their legal rights is also important," he added.

During the first six months of the year, market watch forces nationwide handled nearly 41,000 violation cases, according to the Ministry of Industry and Trade.

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More counterfeit products flood Vietnamese market

The production and trade of fake products was becoming increasingly common, said Deputy Minister of Industry and Trade Nguyen Cam Tu.     

 Many officials agreed with the deputy minister that fake products were pervasive during a meeting held on Sept. 6 to review the Prime Minister's direction No 28/2008/CT-TTg to fight the production of counterfeit goods.    

Fake products are available across the country in urban centres and in rural markets.   

Counterfeit goods are produced with sophisticated methods and modern technology, which makes it hard for consumers to distinguish between fake and genuine products, reported the Vietnam Fake Production Prevention and Trademark Protection Association.   

Fake wine accounts for 20 to 50 percent of the market share.   

Popular methods of marketing fake products include producing counterfeit registered trademarks. Production can include the use of low-quality materials mixed with genuine products.   

Modern technology gives producers of fake goods the opportunity to sell well-forged products, including official-looking wrapping and labelling.   

However, the lack of a legal framework and technology to evaluate products, and ineffective co-operation between relevant ministries and agencies makes it difficult for authorised agencies to stamp out the production and trade of counterfeit products, according to the association.   

"The lack of comprehensive cooperation by relevant agencies and essential tools to conduct their work hinders the fight against counterfeit products," said Chairman of the Vietnam Anti-Fake Production and Trademark Protection Association Le The Bao.   

Meanwhile, businesses themselves paid little attention to protecting their products with registered trademarks, he said.   

The association proposed the Ministry of Justice to give Market Watch groups the power to punish violators to help improve the situation rather than keeping that capacity solely with chairmen of local People's Committees which is currently the case, he said.   

"Businesses should actively work with authorised agencies to protect their trademarks," Bao added.   

Deputy Minister Tu proposed the establishment of a decree on punishing producers and traders of fake products.   

It was also essential to review and finalise all legal regulations against counterfeit and low-quality products and supplement the regulations on prosecuting violators, he said.   

"Increasing information dissemination to raise public and business awareness about protecting their legal rights is also important," he added.   

During the first six months of the year, market watch forces nationwide handled nearly 41,000 violation cases, according to the Ministry of Industryand Trade./.     

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Businesses urged to promote exports

Businesses should work out measures to reduce input prices, solve the shortages of skilled labour and production materials as well as boost exports in the remaining months of the year.

Minister of Industry and Trade Vu Huy Hoang made the request at an online meeting on the country’s production in Hanoi Monday.

According to the ministry’s report, the country’s export turnover in the first eight months of the year reached US$44.5 billion, up 20 percent over the same period of last year while the import value was still high, with trade deficit standing at $8.16 billion, a year-on-year increase of $3 billion - and expected to increase to $13.6 billion by the end of the year.

At the meeting, the representatives pointed out that dependence on import materials affects the price of export products, and products can also become subject to trade barriers from other countries.

The ministry also urged businesses to use domestic equipment, step up the construction of electrical works, stabilise prices of domestic products and carry out promotion programmes in domestic markets.

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