VietNam Business

Friday, February 11, 2011

Vietnamese Rice Promoted Through Arts

Cherishing a dream of promoting the image of Vietnamese rice, three youths in their 20s have managed to collect over VND60 million to open a workshop making pictures from rice grains

Would the rice fall off pictures that have been kept for a long time? Would pictures made of rice be invaded by pests? What is the duration of rice paintings? A series of similar questions were raised by guests coming to view Thai Hoang rice pictures at the Vietnam-Binh Duong Ceramic Festival held in Binh Duong Province’s Thu Dau Mot Town last September.

According to 23-year-old Nguyen Thai Hau, one of the three founders of ThaiHoang Rice Picture in Bien Hoa City, there are eight steps involved in crafting a rice picture. First, select material – uncooked, even and fine rice grains that would not break or burst when being roasted. Next, color the rice by roasting it in a frying pan. Then draw a sketch, place the rice onto it piece by piece, glue the rice to ensure it remains stuck to the picture and allow it to dry in the sun for three days. The last step is chemical treatment for rice preservation before framing the picture.
“It normally takes two to seven days, or sometimes even a whole month to complete a rice picture, depending on its size. Currently, the smallest picture we can make is 20 square centimeters in size,” Hau said.

Hoang Minh Thai, the founder of Thai Hoang Rice Picture, born in 1986, made a graduation thesis at Dong Nai Arts College two years ago. He did not want to use natural materials like tree barks, soil and rattan for his artwork like what previous generations of students did. So he thought of using rice as a medium to create paintings as rice embodies Vietnam, a country with rich paddy fields. And he was not the first in the country to come up with this idea.

After graduation in 2009, Thai has collaborated with Hau and Nguyen Quoc Hung (born in 1984) to establish the rice painting facility with an initial capital of slightly over VND60 million. Thai is in charge of product design; Hau supervises production and looks for ways to extend the painting duration; and Hung oversees accounting and trading.

At the beginning, market access was difficult for the new product that was monotonous in theme and limited in colors. “Feedback from customers shows certain problems like grains falling off paintings after some period of time or due to movements while being transported; or moisture penetrating paintings while being framed in glass”, Hau said.

Aware of their product’s shortcomings, the trio sought to improve production techniques, use better quality glues and widen the color variety to 17 different hues. From the three base colors, white, yellow and brown, they found a formula to roast rice in a way to get more color tones. Not only did they succeed in enriching their color palette, Thai Hoang was also able to develop art themes to five, including landscape, calligraphy, arts, animals and portraits.

Hau considers portraits to be the hardest to create, demanding artisans’ attention to details, patience and persistence in creating contrasting hues. That’s why the price of this kind of paintings is higher than other products. A 60cm x 80cm painting costs VND1.5 million while a portrait of the same size is priced at VND2.2-2.5 million.

According to the three founders, while their crafting technique has been improved, business relationship establishment and product promotion still remain areas of great concern. Apart from the retail sales at their facility in Bien Hoa City and participation in trade fairs, Thai Hoang fulfills orders from a number of businesses and shops in HCM City.

Thai Hoang’s current goal is to develop a website soon to introduce their products and trademark, and ultimately realize their dream of bringing the image of Vietnam’s rice to the world.

Thursday, February 10, 2011

Credit-Thirsty SMEs Seeking Ways To Survive

Customers seek consulting for their borrowing at Prudential Finance in HCM City

Small- and medium-sized enterprises (SMEs) are regarded as the backbone of the economy, accounting for 97% of the 470,000 registered businesses. Over the years, they have played an increasingly significant role in the economy, contributing to the GDP and generating employment.

Vietnam’s SMEs are presently very much in need of capital to expand their operations and profits. However, they are facing tremendous difficulties in gaining sufficient access to finance, the most important obstacle to their growth.

Vu Cong Hoa, head of Phuong Nam Packaging and Mechanical Engineering Cooperative in HCM City, is struggling to find funds to continue the project that is two-thirds complete. His business, which is conducting a study on creating a waste processing line to turn garbage into organic fertilizers, has not generated any revenue since the beginning of the year. Up to now, 70% of the work done has resulted in various types of machinery lying in heaps in the cooperative’s warehouse.

Unable to raise sufficient capital from cooperative members as well as failing to obtain bank loans, Hoa has resorted to every credit fund but to no avail. He has yet to know how to overcome the capital shortage in the future.
Hoa’s dilemma is typical for many local SMEs which are thirsty for investment capital and have no idea how to quench their thirst. Inadequate access to finance remains a great concern for SMEs despite numerous Government moves and banks’ efforts. On the one hand, SMEs can articulately present to banks all their difficulties in terms of capital, technology renovation, facility construction and investment. On the other hand, banks frequently face problems in evaluating loan applications from enterprises.

Indeed, experts have pointed out two major issues among others that are borrowers’ financial statement and collateral. Financial reports of businesses are deemed to be unreliable and lack transparency. Some businesses may maintain two to three different accounting records on their operation: A financial report which often declares loss aiming at evading tax; another for internal use that would not be revealed to outsiders; and maybe a third one for shareholders’ review.

Applications for bank loans with a financial statement declaring loss would surely be rejected. Banks would set aside money for credit-worthy SMEs, those with accurate reports, feasible business plans and high possibility for solvency.

Even when banks neglect the misleading financial statement and switch to scrutinizing project feasibility, many businesses still cannot meet this requirement. In many cases, enterprises try to seek short-term loans to finance long-term assets like machinery, equipment and facility construction. Besides, collateral and financial capacity are other hurdles that block businesses from access to bank loans.

Where to turn to for funding

Experts said SMEs can seek loans from credit sources offering long-term loans, finance sources formed under joint ventures, finance leasing companies and credit funds. They can also approach foreign financial institutions that promote projects related to climate change or clean production with minimal impact on the environment. To ensure success, applicants should fully understand the institution’s evaluating criteria. Generally, lenders want a coherent financial statement that has been audited and a profitable business plan.

The first capital source for enterprises came from Government policy. According to Tran Buu Long, vice director of the HCM City Credit Fund, credit policy for SMEs has been implemented through various municipal programs. The large scale program provides the investment stimulus package while smaller programs cover a series of funds for various purposes. There are a fund that revolves the money to facilitate cleaner and greener production for businesses, fund to mitigate environmental pollution, fund to support science and technology development, and fund to assist businesses in building warehouses and transportation infrastructure.

The city’s Science and Technology Development Fund has an initial capital of VND50 billion with non-mortgage interest rate ranging from 0%. Its maximum level is half of that of commercial banks. The fund can provide non-refundable loans for certain projects. Its capital is expected to reach VND200-300 billion by year-end.

The HCM City Finance Investment Company that holds many capital sources of the city is also a potential lender for businesses.

The city’s Credit Guarantee Fund has provided guarantees for businesses to borrow a total of VND400 billion up to now. However, banks have turned down many applicants who have been guaranteed by the fund. Currently, the fund’s balance of about VND277 billion is too modest for the demand of over 200,000 businesses in the city.
Commercial banks are probably best positioned to improve SMEs’ access to finance. Many banks are carrying out promotion programs targeting SMEs considered to be their potential customers. ACB has some projects to aid SMEs; some in collaboration with the Japan Bank for International Cooperation while others linking with projects in the European Union.

Another example is the partnership between the International Finance Corporation and Techcombank in a program worth US$125 million that focuses on supporting local SMEs in renovating technological equipment and saving energy.

SMEs’ journey to seek capital seems to be full of hardships. Yet amid those difficulties, the authority of Long Hau Industrial Park in Can Giuoc District, Long An Province has managed to find a practical solution. Well aware of businesses’ financial woes, the authority of Long Hau has borrowed capital and lent it to businesses operating in their park.

Long Hau Industrial Park has built facilities and workshops for lease or sale to businesses and allow them to pay by monthly installments over a duration as long as 10 years. The park also helps businesses obtain long-term bank loans in cash. Besides, it works on creating funding channels for businesses by collaborating with financial institutions and banks. Long Hau’s efforts have eased businesses’ financial pressure and lured more customers into the park.

Largest auto show set for late Oct in Hanoi

The unveiling of the Mercedes SLK200K at the Vietnam Motor Show 2009 in HCMC attracts a large pool of journalists - Photo: Quoc Hung

HCMC – Vietnam Motor Show 2010 in Hanoi, the industry’s largest exhibition in the country, will feature key automakers from October 29 to November 2.

Up to 15,000 square meters at the Vietnam Exhibition & Fair Centre (VEFAC), 248 Giang Vo Street, Ba Dinh District will be used to display the latest vehicle models of 11 members of the Vietnam Automobile Manufacturers’ Association (VAMA).

The exhibiting firms will be Toyota Motor Vietnam, Mercedes-Benz Vietnam, Ford Vietnam, Honda Vietnam, Suzuki Vietnam, GM-Daewoo, Vinastar, Mekong, Samco, Hino and Vinaxuki.

The 6th edition of the Vietnam Motor Show, which is being organized by VAMA, will also be attended by more than 100 local and foreign suppliers of spare parts, supporting products, interior furnishings, sound systems, and banking and insurance services.

Going with the theme of “Become Better”, the event will provide automobile manufacturers with the opportunity to reach out to customers.

A feature of the forthcoming exhibition will be to introduce green auto making technologies, according to VAMA.

Though the event is taking place at a time when the economy is not yet out of the woods, with automakers facing a host of challenges, it is expected to draw over 120,000 visitors.

Through the exhibition, VAMA expects to help warm up the market and draw the attention of consumers.

September sales of locally assembled automobiles fell 17% year-on-year to more than 9,140 units, according to VAMA. This was the third consecutive monthly decline in sales.

VAMA members sold nearly 78,180 units in January-September, down 3% year-on-year. The SUV/MPV vehicle segment was hardest hit with sales plunging a hefty 14% to 16,280 units. Toyota alone sold more than 21,600 units in the first nine months.

Commercial pilots to be trained in Vietnam

The Vietnam Airlines Corp. and the Bay Viet (Viet Flight) Flight
Training Joint Stock Company have made a deal to train 60 pilots in
Vietnam during the 2010-2012 period.

Under the contract, signed in Ho Chi Minh City on October 14, every
72-week training course will be held in Vietnam and France, each
with 20 trainees. The training courses will be completed by the end of
2012.

Vietnam Airlines estimates it will need at
least 636 pilots by 2010, 60 percent of them Vietnamese. To raise the
rate of Vietnamese pilots to 75 percent by 2015, the carrier plans to
recruit at least 100 extra pilots a year to raise the number of pilots
by 10 percent during 2011-2020.

The Chairman of
Vietnam Airlines Corp Nguyen Sy Hung said that the contract with Bay
Viet, the first pilot training centre in Vietnam to have an Air
Transport Pilots Licence (ATPL), will help the airline to take the
initiative and train its own pilots, cutting costs and raising
efficiency.

The deal also proves the airline’s
commitment to its domestic partners to implement its strategy on
personnel development to ensure sustainable growth and fulfill its plans
to develop the country’s aviation industry.

Bay
Viet’s General Director Nguyen Nam Lien, said the company will start
four other pilots courses for other airlines in Vietnam and around
the region in 2010 and 2011.

In the first phase,
Bay Viet will work with Vietnam ’s Aviation Academy and provide
flight training at Cam Ranh Airport in Nha Trang.

These are the first important steps in the setting up of a pilots
training centre to ensure the aviation industry’s development in the
future./.

First wind energy turbine factory opens

Vietnam ’s first wind power turbine production factory was
inaugurated at the Nomura industrial zone in the northern port city of
Hai Phong on October 15.

The 61 million USD project, invested by the US-based GE group, rolled
out over 200 turbines for export in the past five months of test run.

In the first stage the factory will produce 1.5 MW turbines for
export and is scheduled to mass produce some 10,000 parts and assorted
turbines annually. Its products will be forwarded to GE production
facilities worldwide to be assembled into end products.

The factory now provides stable jobs for over 250 local workers and
contributes to domestic production and daily life as well as for export.

John Krenicki, Vice President of the GE Group and
President cum General Manager of GE Energy operations in Vietnam ,
hailed Vietnam as an ideal destination for investment and expansion
of production capacity thanks to its skilled workforce and the bright
prospects of the regional energy industry.

The
US giant unveiled a plan to upgrade and expand the factory into a
complex specialising in power equipment for clean energy production to
meet national and global demand./.

Retaliation in reserve as China faces yuan tensions

An employee counts Renminbi yuan banknotes next to US dollars at a branch of Bank of China in Hefei, Anhui province September 15, 2010.

Photo: Reuters

BEIJING - Expect harsh words but no concrete retaliation from Beijing if the US labels China a currency manipulator in a report due later on Friday.

China is focused on trying to defuse tensions with the US by yielding some ground in a mini-burst of yuan appreciation and hopes that these efforts will still pay off, even if Washington brands it a manipulator.

But should the US ratchet up the pressure yet further by passing into law a bill that could penalize China, Beijing will not be so docile, Chinese analysts say.

"China is telling the US that it is willing to help to resolve the problems. Things have not gotten out of hand yet and both sides still have some room to maneuver," said Zhao Xijun, an economist at Renmin University in Beijing.

President Barack Obama's administration faces a deadline on Friday to decide whether to formally label China as a currency manipulator.

A desire to look tough on "unfair" trade practices ahead of US congressional elections on Nov. 2, in which Obama's fellow Democrats are battling to retain control of Congress, could tempt the administration to cite China for the first time in 16 years.

The Chinese commerce ministry made its feelings clear on Friday, warning the US not to make a scapegoat of the yuan. Rhetoric aside, though, Beijing knows that the currency manipulator designation carries no specific consequences, apart from forcing Obama to seek consultations with China.

Preparing for the worst

A different calculus would apply if the Senate approved a bill already passed by the House of Representatives that would allow the US to slap duties on countries with undervalued currencies.

"It will be a very serious issue if the US legislation is approved by the Senate and signed by the president," said Li Wei, a researcher under the commerce ministry.

For starters, China would challenge the US law at the World Trade Organization -- a case that some trade experts think China would be able to win.

Analysts say Beijing is also bracing for the law by considering possible retaliation, from imposing curbs on US businesses in China to the so-called nuclear option of dumping its holdings of US Treasuries.

But Beijing is not going to jump the gun. It is first taking what it sees as pre-emptive steps to keep US anger from boiling over -- and to keep the legislation from becoming law.

"If China doesn't let the yuan appreciate a little bit, foreign criticism will be stronger. China wants to avoid a trade war with the US," said Guo Tianyong, an economist at the Central University of Finance Economics in Beijing.

To that end, Beijing has allowed the yuan to gain 2.6 percent since it scrapped a 23-month dollar-peg on June 19, quickening the appreciation in recent weeks as pressure mounted.

On their own terms

Ever sensitive to appearing weak domestically, Chinese leaders have insisted that the yuan's rise is not a response to US pressure but part of a broader reform agenda to spur domestic consumption.

They have also said that currency reforms will be done on China's own gradual terms.

Central bank chief Zhou Xiaochuan told International Monetary Fund meetings in Washington that demands on China to let the yuan rise rapidly are akin to seeking a magic cure to a problem that requires a slow-working, herbal remedy.

Foreign ministry spokesman Ma Zhaoxu tried to inject some levity into the dispute on Thursday: "If appreciation of a currency could solve all of the world's economic problems, then what use would economists be?"

But it will be no laughing matter if the US follows up the currency manipulator report with real punitive measures.

Although retaliation by China would likely hurt its own interests, rising nationalistic sentiment on the currency issue might force the government to take a tough stance, analysts say.

"China wants to use diplomacy before a confrontation. It will have no choice but to engage in a trade war if all courteous means fail," Guo, of the Central University of Finance Economics, said.

Retaliation in reserve as China faces yuan tensions

An employee counts Renminbi yuan banknotes next to US dollars at a branch of Bank of China in Hefei, Anhui province September 15, 2010.

Photo: Reuters

BEIJING - Expect harsh words but no concrete retaliation from Beijing if the US labels China a currency manipulator in a report due later on Friday.

But should the US ratchet up the pressure yet further by passing into law a bill that could penalize China, Beijing will not be so docile, Chinese analysts say.

President Barack Obama's administration faces a deadline on Friday to decide whether to formally label China as a currency manipulator.

Preparing for the worst

A different calculus would apply if the Senate approved a bill already passed by the House of Representatives that would allow the US to slap duties on countries with undervalued currencies.

"It will be a very serious issue if the US legislation is approved by the Senate and signed by the president," said Li Wei, a researcher under the commerce ministry.

For starters, China would challenge the US law at the World Trade Organization -- a case that some trade experts think China would be able to win.

But Beijing is not going to jump the gun. It is first taking what it sees as pre-emptive steps to keep US anger from boiling over -- and to keep the legislation from becoming law.

To that end, Beijing has allowed the yuan to gain 2.6 percent since it scrapped a 23-month dollar-peg on June 19, quickening the appreciation in recent weeks as pressure mounted.

On their own terms

Ever sensitive to appearing weak domestically, Chinese leaders have insisted that the yuan's rise is not a response to US pressure but part of a broader reform agenda to spur domestic consumption.

They have also said that currency reforms will be done on China's own gradual terms.

But it will be no laughing matter if the US follows up the currency manipulator report with real punitive measures.

Although retaliation by China would likely hurt its own interests, rising nationalistic sentiment on the currency issue might force the government to take a tough stance, analysts say.

"China wants to use diplomacy before a confrontation. It will have no choice but to engage in a trade war if all courteous means fail," Guo, of the Central University of Finance Economics, said.

VietNam Business

Friday, February 11, 2011

Vietnamese Rice Promoted Through Arts

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Thursday, February 10, 2011

Credit-Thirsty SMEs Seeking Ways To Survive

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Retaliation in reserve as China faces yuan tensions

An employee counts Renminbi yuan banknotes next to US dollars at a branch of Bank of China in Hefei, Anhui province September 15, 2010.

Photo: Reuters

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An employee counts Renminbi yuan banknotes next to US dollars at a branch of Bank of China in Hefei, Anhui province September 15, 2010.

Photo: Reuters

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