VietNam Business

Sunday, December 12, 2010

Travel expo to upgrade into Mekong Sub-region event

HCMC – The organizing committee of the International Travel Expo in HCMC is working on a plan to heighten its status to make the expo a Mekong Sub-regional event by engaging Myanmar and China’s Yunnan Province, an official said.

La Quoc Khanh, deputy head of the committee, said that an invitation has been extended to Myanmar, calling this nation to join this year’s event rather than only three Indochina countries. Later, Yunnan of China will also be asked to participate in following events to make it a professional travel expo of the sub-region in the near future, he said.

“We want to make a new theme to promote the common image of the four countries in 2011 once a common voice is reached among the four tourism ministries of Vietnam, Laos, Cambodia and Myanmar in this travel expo,” he said in a meeting to promote the event in HCMC last Friday.

The sixth annual event will take place from this Thursday to Saturday at the Saigon Exhibition & Convention Center in Phu My Hung, District 7.

As of last Friday, 170 local and foreign exhibitors have registered to join the expo. More than 150 foreign buyers will also join the event compared to 100 buyers last year.

Alongside the exhibition will be the ASEAN Tourism Investment Forum, Tourism Ministers Meeting, Tourism Alliance Awards and the ITE HCMC 2010 Golf Tournament. Familiarization trips will be organized for foreign guests to explore tourist attractions and services.

At the event in 2007, tourism ministers of Vietnam, Laos, and Cambodia inked a joint declaration on tourism cooperation to make the three countries a common destination for international tourists.

Khanh said the tourism sector has not been doing well some joint activities like developing human resources and drawing a common tourist map. However, via the cooperation, the travel expo has been better known worldwide, and at the same time, the three Indochina countries’ tourism image has also been better promoted.

The Vietnam National Administration of Tourism and the HCMC Department of Culture, Sports and Tourism are collaborating with IIR Exhibitions Pte Ltd and VINEXAD to organize the international travel expo.

Khanh said that the organizing committee in this year offers incentives to small and medium-scale companies who want to join the event. “Such companies can enjoy a discount of up to two-thirds compared to big-scale companies,” he said.

China sees Vietnam as gateway to free-trade ASEAN

Chinese officials at a meeting in HCMC on Friday to discuss trade ties - Photo: Thu Nguyet

HCMC – Many Chinese enterprises are keen on Vietnam’s market, considering it as a gateway to enter ASEAN now that a free trade agreement between China and the block is already in place, a Chinese official said in HCMC on Friday

“The free trade area between ASEAN and China has officially been created. Chinese businesses are discovering more and more opportunities to co-operate with Vietnam,” said Deputy Secretary-General of China-ASEAN Business Council Xu Ningning.

“In the first eight months of this year, about 40 conferences have been held in China to help Chinese enterprises go into the ASEAN free trade area… All Chinese enterprises joining the conferences showed keen interest in Vietnam and wanted to invest into the country,” he added.

He explained that as Vietnam and other ASEAN countries had set up a free trade area with almost all goods traded tax-free tax, while Chinese products exported to these markets now did not enjoy such incentives, so “Chinese enterprises consider Vietnam as a gateway to other markets.”

Xu said he is encouraging Chinese enterprises to heighten cooperation with Vietnamese partners via joint ventures, adding Vietnamese businesses should also make the most of the ASEAN-China FTA to boost trade to China.

Xu and leaders of Zhuhai, a city on the southern coast of Guangdong Province, together with 35 enterprises in the city had a meeting with HCMC businesses last Friday to enhance trade ties.

According to Chen Hong Hui, vice mayor of the city, Chinese companies want to boost export of equipment, electric devices, textile and garment and household devices to Vietnam. Meanwhile, they want to buy more farm products and natural minerals from the country.

Data provided by Chinese officials at the meeting show two-way trade between Vietnam and China has increased 6.5 times in the period of 2001-2009. The two-way trade increased 46.3% year-on-year to US$17.8 billion in the January-August period, and is expected to hit US$25 billion this year.

Vietnam offers huge potential success: U.S. governor

Washington state governor Chris Gregoire helps promote American potato among Vietnamese students at a KFC outlet in HCMC on Thursday - Photo: Kinh Luan

HCMC - Washington state’s governor Christine Gregoire said Vietnam’s expanding economy is promising substantial potential success in the future for American companies, particularly those from her state.

Gregoire stressed the point in response to the Daily’s question about American companies’ interest in this emerging economy at her meeting with reporters in HCMC on Thursday to review the trade mission of the Washington state in Vietnam.

“We believe that the economy of Vietnam is growing rapidly and has a huge amount of potential success in the future,” she said. “So, there’s significant interest from American companies to either have a plant or start a company here.”

The rising interest was demonstrated by the participation of around 60 business, agriculture and education leaders in the trade delegation led by Gregoire to Vietnam. “We are here to promote trade,” she said, adding the aim was to promote sales of the state of Washington’s products to Vietnam and help more Vietnamese products go to the state.

Gregoire told reporters that Washington state’s number one trading partner was China and that Vietnam was emerging in the state’s list of trading partners.

“We have identified Vietnam as one of the fastest growing… greatest opportunities for trade between Washington state and Asian countries.”

Pepper, rice, cashew nut, tea, coffee and furniture are among the Vietnamese products exported to Washington. Gregoire said one of Vietnam’s most popular fruit in the state was the dragon fruit. “We do not have it (dragon fruit) so we are importing it and it is becoming very popular.”

Gregoire said she was not able to give a specific number regarding trade between Washington state and Vietnam, but stressed the trade was very balanced regarding agriculture.

Last year, Washington exported almost US$1 million worth of frozen potatoes, US$5 million of apples, some US$11 million of beef and US$2.5 million of milk powder to Vietnam. Washington is the second largest grower of potatoes in the United States and the number one exporter of frozen French fries.

Gregoire said Vietnam agreed to open up the market to fresh Washington potatoes this summer and “we are here now talking how we actually take that position to make the work on the ground.”

She said her state wanted to promote two-way trade with Vietnam. “We want Washington people to enjoy dragon fruit and Vietnamese people to enjoy cherries.”

The Washington delegates explored opportunities in a wide range of business scopes in Vietnam, including education, healthcare and other services. As for education, Gregoire said four universities came this time to attract more Vietnamese students and promote student and teacher exchange programs between the state and this country.

“We believe that trade cannot be built on economics alone but has to be built on a foundation of mutual respect and friendship. The best way to do that is to share education and students so we can learn the culture and the language, and have a better foundation,” Gregoire said.

Some 1,200 Vietnamese students are studying at universities in Washington, Gregoire said.

Over the past four days, Gregoire had a number of meetings with government and business leaders, including that with Prime Minister Nguyen Tan Dung in Hanoi on Monday before she went to Hue on Wednesday for the opening of a primary school sponsored by Boeing.

Vietnam offers huge potential success: U.S. governor

Washington state governor Chris Gregoire helps promote American potato among Vietnamese students at a KFC outlet in HCMC on Thursday - Photo: Kinh Luan

Gregoire told reporters that Washington state’s number one trading partner was China and that Vietnam was emerging in the state’s list of trading partners.

“We have identified Vietnam as one of the fastest growing… greatest opportunities for trade between Washington state and Asian countries.”

Gregoire said she was not able to give a specific number regarding trade between Washington state and Vietnam, but stressed the trade was very balanced regarding agriculture.

Gregoire said Vietnam agreed to open up the market to fresh Washington potatoes this summer and “we are here now talking how we actually take that position to make the work on the ground.”

She said her state wanted to promote two-way trade with Vietnam. “We want Washington people to enjoy dragon fruit and Vietnamese people to enjoy cherries.”

Some 1,200 Vietnamese students are studying at universities in Washington, Gregoire said.

Top 1,000 corporate taxpayers named

HCMC – Vietnam Report Co. and the online newspaper VietnamNet have announced the 1,000 largest corporate income tax payers in the country in the V1000 list.

The rankings, announced for the first time in Vietnam, aim to identify enterprises for outstanding business performance and significant contributions to the country’s tax revenue for three consecutive years.

Data used to do the rankings was collected from business results and individual data by Vietnam Report, and Taxation magazine of the General Department of Taxation along with domestic and foreign consultants.

State-owned groups and corporations, especially in the telecom sector, remained the biggest tax contributors with MobiFone and Viettel coming first and second respectively in the list, followed by those in the construction-building materials, real estate and banking industries.

The private sector made a significant improvement in the overall ranking as the number of private firms on the list is equivalent to that in the State-run and foreign-invested sectors.

The ranking also shows enterprises in Hanoi and HCMC still took the lead in terms of ranking and quantity that make up 22.5% and 37.6%. Major taxpayers in the southern provinces of Dong Nai and Binh Duong account for 7.8% and 6.8% respectively.

According to Vietnam Report, the local economy is still dominated by a few large corporations. The top 200 enterprises contribute up to 80% of taxes collected from the 1,000 firms.

Meanwhile, other State-owned conglomerates such as Vietnam Post and Telecommunications Group and Vinashin are not on the V1000 list due to their tax payments of below VND9 billion or tax arrears. The rankings are based on the total corporate income tax paid between 2007 and 2009.

Top 10 corporate income tax contributors

No Company name

1. Vietnam Mobile Telecom Services Company (MobiFone)

2. Viettel Corporation (Viettel)

3. PetroVietnam Gas Corporation (PVG)

4. Bank for Foreign Trade of Vietnam (Vietcombank)

5. Vietnam Oil and Gas Group (PetroVietnam)

6. Vietnam National Coal and Mineral Industries Group (Vinacomin)

7. Vietnam Bank for Agriculture and Rural Development (Agribank)

8. Vietnam Bank for Industry and Trade (VietinBank)

9. Prudential Vietnam

10. Phu My Hung Corporation

Vietnam sees share offerings booming

HANOI – The State Securities Commission (SSC) this year has approved the largest ever number of share offerings by listed firms, sparking concerns of oversupply.

SSC as of the end of July had permitted enterprises issue around VND61 trillion worth of shares while it was only VND19.3 trillion in the whole 2009, said Bui Hoang Hai, deputy director of SSC’s Issuance Management Department.

Hai told a seminar in Hanoi last week that SSC had approved nearly 500 share issue applications this year.

In the first six months of 2010 alone, SSC had allowed listed organizations to issue VND18.6 trillion worth of shares to the public, VND1.1 trillion for their staffs and VND25 trillion for strategic shareholders. In addition, there were VND717 billion of shares offered via auctions at the stock exchanges, VND50 billion of bonus shares and VND86 billion worth of dividend stocks.

Hai said that many enterprises are seeking to offer huge amounts of shares this year as they failed to do so last year due to poor profits. Meanwhile, commercial banks also want to offer shares to increase capital given new regulations requiring them to spur capital to at least VND3 trillion each or get disbanded.

However, due to the lack of transparency on the part of listed firms, stock investors may face risks.

The quality of information released by listed companied in Vietnam is still poor. Most enterprises have no specific and long-term issuance strategies and announce information barely at compulsory requirements, Hai said.

“Some information is not trustworthy and may cause misunderstanding,” Hai said. There are enterprises providing information of business results or share prices on the basis of non-standard calculations. “Few enterprises have responsibility for what they say in the announcements,” he stressed.

While some enterprises release information regularly, others have no official websites and rarely send notices to stock watchdogs. “I think that many investors cannot receive the information either,” Hai said.

Hai also noted that while share issuance in the world aims to attract capital from new investors, listed enterprises in Vietnam primarily offer shares to existing shareholders.

David Gerald, president of the Singapore Securities Investors Association, advised investors at the seminar to study the stock market thoroughly.

“Don’t join the market if you have no knowledge. You have to check the issuing companies,” he said.

“We have to create an equity market where investors have responsibilities, knowledge and bear the blame for their decisions,” Gerald added.

Other experts said transparent information and proper release via the media could help Vietnamese enterprises maximize the value in their initial public offerings (IPO).

According to SSC, Vietnam’s stock market capitalization as of the end of August reached VND650 trillion, or US$33.5 billion, equivalent to one-third of the country’s gross domestic product.