VietNam Business

Saturday, September 11, 2010

Japan invests $12 bln to rebuild ASEAN cities

About 400 Japanese enterprises will join the US$12 billion Smart East Asian Community Initiative by the government to rebuild the cities of the ASEAN member countries, including Vietnam, under a public-private partnership.

According to the daily Nikkei, Japan’s New Energy and Industrial Technology Development Organisation (NEDO) will work as a manager of the joint ventures with corporations including Toyota Corporation, Tokyo Energy Power Company, Tokyo Gas Company and Itochu Corporation.

These joint ventures will work with local authorities to set up an overall plan in March, 2011, to rebuild the urban areas in the cities of the ASEAN bloc, and will begin construction in Jakarta, Hanoi and Ho Chi Minh City in the next five years.

Under the project, the Japanese businesses will help these cities install smart electric systems, energy-efficient public transport and build water treatment facilities utilising green technology.

The Japanese Ministry of Economy, Trade and Industry and NEDO plan to supply technology and capital for feasibility studies.

Once implemented, the Japanese government will provide loans worth 70-80 percent of the total cost of each project through Japan Bank for International Cooperation and consider the use of Official Development Assistance for some projects.

Trade deficit passes 8 billion USD

The trade deficit hit a record 8.15 billion USD in the first eight
months of the year, an increase of 700 million USD compared with last
month's figure, the General Statistics Office (GSO) said on August 24.

Excessive imports helped push the total to 18.3 percent of the year's total export turnover.

The country imported products worth 52.68 billion USD in the first
eight months, a rise of 24.4 percent over last year. The domestic sector
accounted for 30.3 billion USD of the imports, an increase of 13.2
percent, while the foreign direct investment sector imported 22.37
billion USD worth of goods, a rise of 43.6 percent.

Import turnover in August was 6.9 billion USD.

Imported commodities with the highest import turnover included
materials for industrial export production such as mechanical machines
(14.9 percent); electronics, computers and accessories (31.5 percent);
clothes (26.6 percent); textile and garment materials (38.1 percent),
and metals (79.9 percent).

Imported automobiles and fertiliser decreased by 30.5 percent and 10.8 percent, respectively.

The general export turnover was estimated at 44.52 billion USD during
the period, an increase of 19.7 percent compared to the same period last
year. The domestic sector contributed 46 percent, or 20.56 billion USD,
of the turnover, while the remaining 23.96 billion USD was imported by
foreign invested companies.

GSO's Acting Director of
Trade Department Le Minh Thuy said that August exports were slower,
decreasing 0.5 percent in comparison with last month. However, the
export of gold contributed significantly to the export turnover in
helping to keep the total turnover steady.

"If we
did not count gold exports, the trade deficit in the first eight months
would be 9.8 billion USD instead of 8.15 billion USD, and would make up
22 percent of the total export turnover," she said.

Commodities that experienced a significant increase in export turnover
included steel, 220 percent (466 million USD); rubber, 89.3 percent (543
million USD); chemical products, 83.9 percent (185 million USD);
transportation and accessories, 83.0 percent (458 million USD); and
electric wire and cable, 72.2 percent (347 million USD).

Other industries that experienced export turnover included textiles
and garments (17.8 percent), wood and wood products (36.1 percent),
rubber (89.3 percent), footwear (18.8 percent), electronics and
computers (30.2 percent); and mechanical machines and accessories (61.2
percent)./.

Argentine businesses keen on doing business in VN

The Vietnamese embassy in Argentina on August 24 hosted a get-together
with 60 local enterprises who are interested in doing business in
Vietnam.

They were coming from mining, tourism, law
consultant, transport, confectionary, electric and electronic import
and export, food, seafood, chemical, rubber, pharmacy, leather and
machinery industries.

Vietnamese Ambassador Nguyen Van Dao reaffirmed trade development priority in Vietnam ’s foreign policy.

He also said the Vietnamese embassy is willing to support Argentinean
enterprises to seek partners and learn about import-export demands as
well as related issues of the Southeast Asian country.

Vietnam-Argentina
bilateral trade value has seen increases over the last 15 years,
reaching 653.2 million USD in 2009, including 53.39 million USD worth of
Vietnam ’s exports.

Vietnam exports footwear,
rubber, garment, agro products, agricultural machinery, mechanical
instruments, handicrafts, electronic appliances, wood, sports and
plastic products to Argentina while importing soybean, animal feed,
fruit, seafood, wine, material leather, wood, chemical and
pharmaceutical products from the Latin American country./.

Competitiveness report in 10 economic areas to be published

The Ministry of Industry and Trade’s Competition Management Department
(CMD) will for the first time announce the Competitiveness Report in 10
economic areas in late September or early October this year.

The information was released by Tran Phuong Lan, Head of the CMD’s
Competitiveness Law Desk, on the sidelines of a ceremony to launch
ASEAN’s two new publications, namely t he ASEAN Regional Guidelines on
Competition Policy and the Handbook on Competition Policy and Law in
ASEAN for Business, in the central city of Da Nang on August 24.

The selected areas include aviation, banking, insurance, petrol
distribution, telecommunication, cement, steel, chemical fertilizer,
cattle-feed and dairy.

According to Lan, these
areas are selected because they usually see unsound competitiveness
lawsuits or contain unsound competitiveness factors.

The announcement of the Competitiveness Report will provide enterprises
with new concepts in business and investment as well as ways to
approach to new markets from the angle of the Competitiveness Law, she
said.

The CMD will conduct competitiveness
researches and supervisions in other economic areas to announce their
competitiveness reports annually, he added.

Vietnam ’s Competitiveness Law was approved by the National Assembly
in December 2004 and officially took effect on July 1, 2005 with focus
on preventing monopoly and handling unsound competitiveness cases, thus
facilitating the equal participation in the market among businesses as
well as protecting customers’ interests./.

Friday, September 10, 2010

Mekong province promotes foreign investment

Photo: Tuoi Tre

Long An province in the key southern economic zone presented a list of its advantages and made offers to Japanese businesses at a meeting with the Outward mission Monday.

Pham Van Ranh, Vice Chairman of the provincial People’s Committee, said like other parts of the country, Long An has emerged as a destination for foreign investors, citing advantages of political stability, steady economic growth and an industrious workforce.

“The province has a good land reserve for industrial and urban development and infrastructure construction,” Ranh said.

Long An authorities confirmed that labour strikes in foreign companies did not make any impact on the province. They also presented a new model for small investors who may rent a lot of just 100 sq. m. of land in the Long Hau industrial zone. Japanese investors were also assured of administrative reforms with very simple paper work.

Licences will be issued in 24 hours after all forms are filled, authorities emphasised.

The Mekong Delta province has so far granted licences for 328 foreign investment projects capitalised at almost US$3.18 billion, including the 11 projects by Japanese investors with a combined investment of $188 million.

One of the 11 Japanese-invested projects was licensed in 2010 with a capital of $100 million.

The Japanese business mission, led by Sato Shi Abe, Director of the ASEAN investment sharing sector under the Japan centre, was shown around several industrial zones. The guests also visited the Vina Eco Board Limited Liability Company under the Sumitomo Group and the Kaiyo Seafood Processing Company.

Furniture makers ‘neglecting' local market

Vietnamese wood furniture firms are focused mostly on export markets, leaving the local market to imports, especially from China.

Huynh Van Hanh, deputy chairman of the Handicraft and Wood Industry Association of HCM City (HAWA), said with its population of 86 million and increasing incomes, Vietnam is a promising market for furniture and other wooden products.

Demand for wooden indoor furniture has grown at an annual rate of 15-20 per cent in recent years, he said.

But Vietnamese firms, among the world's largest exporters of wood products, continue to ignore the local market, which, at 3 billion USD, is equal to the export market, Hanh said.

They accound for just 20 percent of the Vietnamese market, with imports from mainland China, Malaysia, Taiwan, Hong Kong and Thailand accounting for the rest.

Dien Quang Hiep, director of Binh Duong-based Minh Phat Furniture Company, said companies prefer exports to domestic sales because orders are usually big. The domestic market not only places small orders but also requires various designs.

And then there is the cost of setting up distribution systems, he pointed out.

Furniture shops on Ngo Gia Tu and To Hien Thanh streets in District 10, Nguyen Thi Minh Khai in district 3, and other places in HCM City, display a lot of imported furniture products.

Tran Hoang Trung, owner of a shop on Ngo Gia Tu street, said most of his products are from China and they come in a range of designs and materials.

As for local products, he sold the odd table made of natural wood, he said.

Many foreign companies, mostly Chinese, import large quantities of timber from Vietnam at cheap prices and export finished products at high prices to Vietnam.

Many distributors import 30-40 containers of furniture every month from China, according to insiders.

Nguyen Ton Quyen, general secretary of the Vietnam Timber and Forest Product Association, said the low import tariffs on wooden products, of 0-3 percent, encourage furniture distributors to import them, creating pressure on domestic producers.

Furniture makers ‘neglecting' local market