VietNam Business: sector

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Thursday, February 17, 2011

Co-operatives ‘are still a vital force'

HA NOI — Vietnamese co-operatives had made much progress in improving living conditions, especially in rural areas, and creating jobs, Deputy Prime Minister Hoang Trung Hai said here yesterday.

Hai, who was speaking at the third Patriotism Emulation Congress of the Viet Nam Co-operatives Alliance, urged co-operatives to fully utilise their economic potential.

Co-operatives have been the core of the collective economic sector in Viet Nam for more than 50 years. They operate on the voluntary participation of individuals and organisations and are particularly strong in rural areas.

Together with economic sectors run by the State, collective economic sectors are the foundation of Viet Nam's multi-sector economy.

Co-operatives enable members easier access to capital and techniques.

At the congress, the co-operatives alliance summarised the outcome of emulation movements launched five years ago to raise the effectiveness of co-operatives in alleviating poverty and building a new rural model.

"The two movements helped speed up the development of the collective economic sector with new models of large-scale co-operatives that offered jobs and improved living conditions for millions of labourers," said Hai.

Vice chairman of the alliance Nguyen Van Bien said that at present, Viet Nam had more than 18,200 co-operatives, 53 unions of co-operatives and 360,000 co-operative groups, 20 per cent higher than in 2005.

The sector created jobs for more than 12.5 million labourers in different economic fields, especially agriculture, handicrafts and aquaculture.

Moreover, Bien said, co-operatives also mobilised money from members to shift the economic structure and expand production.

For example, more than 1,000 credit funds offered loans worth a total of VND21 trillions (US$1billion). More than 80 per cent of the loans were used to help co-operative members develop agriculture and handicrafts.

The collective economic sector contributed about 5.45 per cent of the national gross domestic product, joining hands to reduce poverty rates in the last five years from 30 to 14 per cent.

However, the collective economic sector in general and the co-operatives in particular still face shortcomings. They often lack the management ability to provide close co-ordination with other co-operatives or with other sectors. — VNS

Sunday, February 13, 2011

Private sector plays greater economic role

Customers shop at a PT2000 store in Ha Noi. Hanh Fashion's PT2000 is popular in the domestic clothing industry. — VNS Photo Truong Vi

HCM CITY — The private sector has played an important role in the national economy in recent years, and now contributes 47 per cent of GDP and 54 per cent of jobs.

Most private-sector companies have developed from small businesses.

Over the last 20 years, for example, bakery manufacturers, including Kinh Do, Duc Phat and A Chau, invested in modern technologies and began to dominate local markets with high quality goods.

Although the textile and garment sector exports most of its goods, some private companies like Thai Tuan and Phuoc Thinh produce brocade for women that sells locally.

Hanh Fashion is well-known for office dresses, while Foci, Viet Thy and PT2000 are highly recognised by youth.

In addition, Minh Long pottery company has reached a very high level of production.

In the industrial sector, Truong Hai has grown as a reputable automobile manufacturer, and 30 other private enterprises have provided components for FDI enterprises.

Along with fast growth in quantity and awareness about corporate governance, the market vision of private companies has led to changes in the way foreigners are investing in Viet Nam.

Foreign investors have begun to co-operate or develop franchise production rights for local private enterprises.

Successful companies have proven their professional ability in modern management and have shifted from a family-company model.

All have achieved significant economic effectiveness.

"Local businessmen have suffered stiff challenges because of the global financial crisis, but they have successfully adapted as only a small number of enterprises have closed operations," Pham Chi Lan, senior economic expert, said.

Private enterprises created 4.3 million jobs or 54 per cent of all jobs during the 2000 – 2008 period. The number is four times higher than that of State-owned businesses.

The average yearly income of workers in 2000 is VND8.2 million or 1.4 times higher than GDP per capita, but in 2008 the ratio doubled to reach VND32 million.

Working capacity has also improved. Average yearly turnover for each worker has increased three times, from VND225 million in 2000 to VND710 million in 2008.

Of the 1,000 enterprises that contributed the highest earnings to the State budget, private enterprises and State-owned and FDI companies each contributed 33 per cent.

The rate illustrates the effectiveness of the private sector and its value to the country.

In addition, many ideas to adjust agency policies developed by the private sector have been rec-ognised.

However, at present, the number of large private enterprises is still low because of the lack of capital and qualified human resources.

But in coming years the number will increase as Viet Nam's membership in the World Trade Organisation provides a trade environment for the development of financially healthy, large businesses.

"Private enterprises have always tried their best to survive and develop," Lan added.

She noted that when Viet Nam cut import taxes following AFTA and WTO roadmaps, many foreign investors immediately closed their factories and began importing products.

However, many local enterprises continued to invest in modern technology and expand their production because of a more favourable trade environment. — VNS

Wednesday, February 2, 2011

HCM City hosts trade and technology conference

Vietnam’s Trade and Technology Conference 2010 opened in Ho Chi Minh
City on October 13, attracting 200 representatives from businesses
operating in technology, banking and finance.

Speaking at the conference, Deputy Minister of Information and
Communications Tran Duc Lai said that over the past 10 years, Vietnam’s
Information Technology and Communications (ICT) sector has thrived and
obtained an annual growth in revenue of over 20 percent. This year, the
sector is expected to earn 8.8 billion USD.

According
to Deputy Minister of Science and Technology Nguyen Van Lang, the focus
of the development strategy on science and technology for the 2011-2020
period is to build and develop a sustainable sector, tap into the
country’s human resources, culture and natural resources and ensure the
country fully integrates into the international scientific community,
helping to improve local human resources in the long term.

During the two-day conference, the participants will take part in
group discussions on important issues for the future of the Vietnamese
technological sector, including the States role in developing
technologies and introducing the necessary legislation and tax policies.

Leaders from leading technology companies discussed
global technological trends in the next five years and shared their
views on opportunities and challenges that the companies are facing in
emerging markets.

The conference also witnessed the
signing of two cooperative agreements, between Hoa Lac Hi-tech Zone and
the company SAVVi and between the IDG Venture Investment Fund and DFJ
Vina Capital./.

Thursday, January 13, 2011

Ministry mulls curbs on cement production

Photo: Reuters

The Ministry of Construction plans to propose to the Prime Minister a suspension in the licensing of new cement production projects to limit the sector's overheating development, and unnecessary waste of energy.

Vu Quang Diem, Deputy Director of the Ministry's Building Materials Department, said in terms of the building materials production sector, the cement sector was the most energy-inefficient.

For each million tons of cement produced, the power sector had to supply 90-95 million kWh, Diem said.

The rapid growth of the building materials production industry, including the cement sector, had put pressure on infrastructure, especially the power sector, Diem said.

The most worrying problem was the number of new cement projects, many of which were inefficient and used out-of-date technology, would continue to rapidly increase if management was not tightened, he said.

The boom would lead to a waste of energy and harm the environment, he added.

The Department was developing a plan for cement sector development until 2015, with an orientation to 2025 to submit to the Government.

The ministry proposed a suspension of investment in 13 projects which had been approved in Prime Minister's Decision 108/2005/QD-TTg issued in 2005, but had not been carried out or would be harmful to the environment if continued.

As an alternative, the authority petitioned the Prime Minister to agree to the construction of nine projects which had more favorable local conditions and would have a significantly beneficial affect on the development of the region where they were located.

The ministry also asked for stricter punishment on projects that failed to meet schedules.

The head of the ministry's Department of Science, Technology and Environment, Nguyen Trung Hoa, said that it was difficult to compel enterprises to spend hundreds of millions of US dollars to renew technology.

Therefore it was necessary to offer preferential lending policies, so that companies would find it easier to access loans to upgrade energy-saving technology, he said, adding that a raft of complicated administrative procedures was one of obstacles that made companies hesitate when considering upgrading their technology.

The Government should strictly implement the regulation that forced cement factories to re-use exhaust fume heat discharged to generate power, as the temperature of the exhaust fumes could reach up to 370 degrees Celsius, Hoa said.

If factories could take advantage of this energy source, they could save 30 per cent of the electricity they consumed, he added.

Although the policy had been outlined in Decision 108, many enterprises had not been interested in it, Hoa said.

Diem suggested that the Government only license new projects which included the construction of a power generator using exhaust fumes.

According to the ministry, by the end of 2009, total design capacity of all cement factories nationwide was 57.4 million tons per year, which could fully satisfy domestic consumption demand. However, this year, total capacity had added an additional 11.7 million tons to output.

Wednesday, January 12, 2011

Industrial sector urged to surpass year's target

HCM CITY — The industrial production sector should strengthen production, investment and exports in the remaining months of the year to surpass the annual target set by the Government, says Vu Huy Hoang, Minister of Industry and Trade.

Speaking at an online – meeting to review the sector's performance in the first nine months and set tasks for the last three, Hoang said industrial production for the whole year is expected to increase by 14 per cent, higher than the Government's 12 per cent target.

Industrial production in the first nine months of the year surged 13.8 per cent year-on-year, reaching roughly VND574.5 trillion (US$30.24 billion), he said.

In September alone, industrial production was valued at VND70.7 trillion ($3.7 billion), up 15.1 per cent over the same period last year.

The fourth quarter is the most important stage since high growth in this stage will create the proper momentum for the sector to enter a new year, he said.

Although the sector has achieved strong growth in the past several months, industrial production has not created export products of high added value, mostly focusing on outsourcing products.

The sector's development efficiency therefore remains low while supporting industries have not developed, delegates at the meeting said.

In addition, power shortages and high interest rates have caused and will continue to cause difficulties for businesses, they added.

Hoang asked the Electricity of Viet Nam Group to co-operate with the Viet Nam National Petroleum Group (PVN) and Viet Nam Coal and Minerals Industries Corporation to step up efforts to meet power consumption demand.

PVN, for instance, should shorten the time taken for gas pipeline maintenance at its power plants in Ca Mau Province, he said.

"The power sector must ensure sufficient power supply for industrial production in any situation," Hoang stressed.

Regarding high bank loan interest rates and exchange rates, Hoang said the recent appreciation of the US dollar against the dong has benefited exporters, but caused difficulties for import companies.

He ordered relevant agencies to work with the State Bank of Viet Nam (SBV) to ensure sufficient supply of dollars for enterprises who need to import materials for their production.

He also suggested that the SBV reduces interest rates to support enterprises in developing their production and trading activities.

To ensure the sector's sustainable development, it needs to improve labour productivity, promote development of auxiliary industries and improve investment efficiency, said Le Van Duoc, director of the Planning Department under the Ministry of Industry and Trade.

Developing auxiliary industries would help businesses become more active in production and gradually reduce reliance on imports, he said.

Delegates at the meeting petitioned the Ministry of Industry and Trade to enhance the programme that brings Vietnamese goods to rural areas and set up distribution agents in these areas so that domestic products can gain a strong foothold in the rural market. — VNS

Ministry mulls curbs on cement production

The Dien Bien Cement Plant began operations in the northern province of Dien Bien this month. — VNA/VNS Photo Manh Thanh

HA NOI — The Ministry of Construction plans to propose to the Prime Minister a suspension in the licensing of new cement production projects to limit the sector's overheated development, and unnecessary waste of energy.

Vu Quang Diem, Deputy Director of the Ministry's Building Materials Department, said in terms of the building materials production sector, the cement sector was the most energy-inefficient.

For each million tonnes of cement produced, the power sector had to supply 90-95 million kWh, Diem said.

The rapid growth of the building materials production industry, including the cement sector, had put pressure on infrastructure, especially the power sector, Diem said.

The boom would lead to a waste of energy and harm the environment, he added.

The Department was developing a plan for cement sector development until 2015, with an orientation to 2025 to submit to the Government.

As an alternative, the authority petitioned the Prime Minister to agree to the construction of nine projects which had more favourable local conditions and would have a significantly beneficial affect on the development of the region where they were located.

The ministry also asked for stricter punishment on projects that failed to meet schedules.

If factories could take advantage of this energy source, they could save 30 per cent of the electricity they consumed, he added.

Although the policy had been outlined in Decision 108, many enterprises had not been interested in it, Hoa said.

Diem suggested that the Government only license new projects which included the construction of a power generator using exhaust fumes.

According to the ministry, by the end of 2009, total design capacity of all cement factories nationwide was 57.4 million tonnes per year, which could fully satisfy domestic consumption demand. However, this year, total capacity had added an additional 11.7 million tonnes to output. — VNS

Thursday, January 6, 2011

Footwear industry submits strategy

The Vietnam Leather and Footwear Association (Lefaso) has submitted to
the Government a strategy to develop the sector from now till 2020 with a
vision to 2015 which focuses on the support and material industries.

Lefaso President Nguyen Duc Thuan said the strategy
aims at ending the sector's dependence on foreign materials and
technologies, and shifting from sub-contracting to direct contracting.

Under the strategy, the sector will need 18.8
trillion VND (989 million USD) to produce shoe trees and footwear
models, and expand the production of materials including leather and
leatherette.

The plan is expected to help the sector
earn 8.5 billion USD from exports by 2015 and 11 billion USD by 2020 by
boosting the localisation rate to 65-75 percent from the current 50
percent.

Thuan explained that the strategy was
developed because the sector has been suffering from a serious shortage
of materials for many years due to the lack of a support industry.

The country currently has only 30 enterprises, including five with
foreign investment capital, producing tanned leather, the main material
used by the footwear sector. These enterprises can only meet 30 percent
of the material demands of domestic footwear enterprises.

Thuan further explained that the sector has to cope with the EU's anti-dumping tax on Vietnamese footwear.

In an effort to boost exports, Lefaso has carried out many promotional
activities, including hosting the 29th international conference of the
Asian footwear sector, and the international fair for footwear materials
and machines

As customers are shifting their
attention from China to Vietnam , Vietnamese shoe makers currently
have export orders until the first quarter of 2011.

In the first nine months of the year, the sector earned over 3.6
billion USD from exports, a year-on-year increase of 23 percent. The
figure is expected to surpass 5 billion USD by the end of the year./.

Sunday, January 2, 2011

Footwear sector plans to develop supporting industry

Photo: AFP

The Vietnam Leather and Footwear Association (Lefaso) has submitted to the government a strategy to develop the sector from now till 2025, focusing on the supporting and material industry.

According to Lefaso President Nguyen Duc Thuan, the strategy aims at ending the sector’s dependence on foreign materials and technologies and shifting from sub-contracting.

Under the strategy, the sector will need VND18.8 trillion (US$989 million) to produce shoetrees and models and expand production of materials including leather and leatherette.

The plan is expected to help the sector to earn $8.5 billion from exports by 2015 and $11 billion by 2020 with the localization rate of 65-75 percent from 50 percent at present.

Thuan explained that the strategy was prompted by the fact that the sector has been suffering from a serious shortage of materials for many years, due to a lack of supporting industry.

At present, the country has only 30 enterprises, including five with foreign investment capital, producing tanned leather, the main material for the footwear sector. Those enterprises can meet only 30 percent of the demands for materials of domestic footwear enterprises.

The Lefaso leader further said that the sector has also to cope with the EU’s anti-dumping tax on Vietnam’s footwear products.

In an effort to boost exports, Lefaso has carried out many promotion activities, including hosting the 29th international conference of the Asian footwear sector and the international fair of footwear materials and machines.

At present, Vietnamese shoe makers have got orders for exports to fill until the first quarter of 2011, as customers are shifting their attention from China to Vietnam.

In the first nine months of the year, the sector earned over $3.6 billion from exports, a year-on-year increase of 23 percent. The figure is expected to hit over $5 billion by the end of the year.

Footwear sector plans to develop supporting industry