Vietnam exports to Cambodia forecast at US$1.6 billion

Vietnamese-made products displayed at an exhibition in Cambodia in 2006 - Photo: Le Quang Nhat

HCMC – Vietnamese enterprises expect to export US$1.6 billion worth of goods to Cambodia this year, up from the US$1.1 billion recorded last year, said an official of the Ministry of Industry and Trade.

Chu Thang Trung, deputy director general of the ministry’s Department of Trade Policy for Asia-Pacific Markets, told the Daily on Tuesday that Cambodia had recently become one of the most potential Southeast Asian markets for Vietnam.

In the first six months of the year, he said, Vietnam’s shipments to the neighboring market amounted to US$728 million, a year-on-year increase of 34%.

Trung said the Vietnamese products for which the demand was running high in Cambodia included steel, machines, garment and textile materials, plastics, fertilizers, consumer goods and foodstuff.

To further promote local goods in Cambodia, Trung said, the HCMC Investment and Trade Promotion Center, or ITPC, will continue organizing two major exhibitions to introduce high-quality Vietnamese products to Cambodian consumers in late November with some 200 enterprises taking part.

Cambodia’s demand for Vietnamese products has rapidly increased in recent years. Two-way trade between the two countries has surged 30% a year on average since 2001.            

Trung noted Cambodia was not only an increasingly important market for Vietnam but a key destination for investment as well.

Vietnamese enterprises have pledged around US$900 million in 63 projects in Cambodia and these projects have generated jobs for 30,000 local people. Vietnam is the third largest investor in Cambodia in terms of investor numbers after China and Korea.

The industries where Vietnamese enterprises are committed to Cambodia include finance, energy, telecommunications, agriculture and mineral mining.

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Dollar lending rises post-devaluation

Companies in Vietnam may be finding it harder to repay dollar debt in the wake of its latest dong devaluation but demand for greenback loans is rising on speculation that the exchange rate will be stable in the short term, bankers said.

The State Bank of Vietnam cut the interbank reference rate to 18,932 dong per dollar on Aug 18 from 18,544 previously, aiming to help control the trade deficit.

The move took some pressure off the dong and helped stabilise the foreign exchange market, traders said, but bids offered by banks were hovering near the ceiling allowed within the dong’s 3 percent trading band.

It also put an expected squeeze on certain businesses, including importers and those with dollar loans coming due, state media reported.

Nevertheless, demand to borrow dollars has risen since the move, bankers said on Monday.

A treasury manager at a Hanoi-based lender, who declined to be identified, said the demand for dollar loans at his bank started to edge up again following two months on a downward path.

“After the latest devaluation, borrowers seem to think that the exchange rate will stay unchanged for three to four months. This makes them feel confident enough to take loans in the short term,” he said.

“There is also speculation there may be future changes in the rate and that this latest devaluation is a sign of that. In such a case, it would be beneficial to borrow now and settle the loans before the next change.”

A currency trader in another Vietnamese bank confirmed the rising demand for dollar loans, saying most of loans were short term and would be due in a few months.

Dollar credit jumped 34.4 percent in the first seven months from the end of last year, the Vietnam Economic Times said on Aug. 25, quoting the central bank data.

The central bank in June tried to slow dollar lending by requesting lenders monitor their dollar loans. In June and July, dollar loan demand was falling as the gap between dong and dollar rates narrowed, bankers said.

With dollar loan demand increasing, banks recently announced they would raise the interest rates on dollar deposits to as high as 5.5 percent from around 4 percent, state media reported.

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Dollar lending rises post-devaluation

Companies in Vietnam may be finding it harder to repay dollar debt in the wake of its latest dong devaluation but demand for greenback loans is rising on speculation that the exchange rate will be stable in the short term, bankers said.

The State Bank of Vietnam cut the interbank reference rate to 18,932 dong per dollar on Aug 18 from 18,544 previously, aiming to help control the trade deficit.

The move took some pressure off the dong and helped stabilise the foreign exchange market, traders said, but bids offered by banks were hovering near the ceiling allowed within the dong’s 3 percent trading band.

It also put an expected squeeze on certain businesses, including importers and those with dollar loans coming due, state media reported.

Nevertheless, demand to borrow dollars has risen since the move, bankers said on Monday.

A treasury manager at a Hanoi-based lender, who declined to be identified, said the demand for dollar loans at his bank started to edge up again following two months on a downward path.

“After the latest devaluation, borrowers seem to think that the exchange rate will stay unchanged for three to four months. This makes them feel confident enough to take loans in the short term,” he said.

“There is also speculation there may be future changes in the rate and that this latest devaluation is a sign of that. In such a case, it would be beneficial to borrow now and settle the loans before the next change.”

A currency trader in another Vietnamese bank confirmed the rising demand for dollar loans, saying most of loans were short term and would be due in a few months.

Dollar credit jumped 34.4 percent in the first seven months from the end of last year, the Vietnam Economic Times said on Aug. 25, quoting the central bank data.

The central bank in June tried to slow dollar lending by requesting lenders monitor their dollar loans. In June and July, dollar loan demand was falling as the gap between dong and dollar rates narrowed, bankers said.

With dollar loan demand increasing, banks recently announced they would raise the interest rates on dollar deposits to as high as 5.5 percent from around 4 percent, state media reported.

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Vietnam suspends Vinashin board members amid probe

Vietnamese Deputy Prime Minister Nguyen Sinh Hung suspended two board members of Vietnam Shipbuilding Industry Group, a state-owned company that came close to bankruptcy this year, as part of an investigation.

Tran Quang Vu and Tran Van Liem were removed from the board, Nguyen Xuan Phuc, chairman of the Government Office, which oversees implementation of state plans, said in a statement posted on the government’s website late Monday.

The board is also considering the dismissal of Tran Quang Vu, chief executive officer, Tran Tuan Anh, Hanoi-based vice head of personnel at the shipbuilder, said by telephone today. The government statement said the prime minister had asked for Vu to stand down.

In July, Chairman Pham Thanh Binh was suspended from his post at Vinashin, as the company is known, as the government began an investigation into financial difficulties at the state-controlled company, which almost collapsed under VND86 trillion ($4.4 billion) of debts.

Prime Minister Nguyen Tan Dung decided on the probe to review Binh’s “responsibilities and to investigate and clarify faults,” according to a statement on the government’s website on July 14. Deputy Minister of Transport Nguyen Hong Truong was appointed as the replacement chairman.

Vinashin doesn’t have enough funds for some projects after its customers and lenders were hit by the global recession that started in 2008, the Ministry of Transportation said July 1.

The company also over-diversified its businesses and didn’t manage its cash flow and debt properly, according to the transport ministry statement.

Nguyen Quoc Anh will be appointed acting chief executive officer of Vietnam Shipbuilding Industry Group Wednesday, he told Bloomberg News by telephone Tuesday. Anh is currently the state- owned company’s business manager.

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Vietnam 2010 GDP to grow 6.7 pct, beating target: gov’t

Vietnam's economy is expected to grow 6.7 percent this year, beating a government growth target of 6.5 percent, the government said.

The economic growth would accelerate to 7.18 percent in the third quarter ending September from a year ago, from an annual growth of 6.4 percent in the second quarter, it said.

"The GDP growth in the third and the fourth quarters of 2010 will be higher than the growth rate in the first and the second quarters as domestic production has gathered growth momentum and global trade is rising rapidly," the government said in a statement issued late on Tuesday.

The National Assembly, the parliament, has initially targeted economic growth this year at 6.5 percent, rising from 6.32 percent in 2009.

The growth forecasts were released at a monthly cabinet meeting ending on Tuesday, at which the government set a growth target of 7.5 percent for 2011, the statement said.

The target for next year needs approval from the National Assembly, which will review next year's projections during a month-long autumn session starting on Oct. 20.

Vietnam's industrial output between January and August rose 13.7 percent from a year ago to 69.51 trillion dong ($3.58 billion), more than doubling the annual expansion in the first eight months of 2009, government statistics show.

The Vietnamese government has projected average annual economic expansion of between 7.5 percent and 8.5 percent over the five years from 2011, local media reported in July.

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Vietnam tightens seafood import standards

HCMC – The Ministry of Agriculture and Rural Development will look into food hygiene and safety standards of countries exporting seafood to Vietnam, said Deputy Minister Luong Le Phuong.

Initially, inspections of seafood products from South Korea, China and Canada would be conducted.

This is part of the Circular No. 25/2010/TT-BNNPTNT on food hygiene and safety control for imported products of animal origin. The circular, released by the National Agro-Forestry-Fisheries Quality Assurance Department (Nafiqad), will take effect from Wednesday.

“Vietnamese exporters for many years have to follow technical requirements of international importers. So, we have to apply the same standards to protect local consumers and ensure quality of meat products on the market,” Phuong said. The ministry had earlier extended enactment of the circular from July 1 until September 1 due to difficulties on the part of foreign exporters.

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), around 80 countries are exporting seafood to Vietnam. The nation mainly imports material for processing to re-export to other markets.

“Assessing the seafood exporting enterprises will help the nation reduce risks in re-exporting the products to choosy markets such as Japan, Europe and North America,” Phuong added.

The circular lists imported foodstuffs of animal origin under the ministry’s management including seafood, cattle, poultry, additives, eggs and honey.

Under the new legislation, food business operator (FBO) is the term for the producer of the final product prior to export to Vietnam. They are producers, not exporters. For example, in case of live crab being exported, farming and packing sites must be registered with the ministry, while in the case of crab meat being exported, it is the processors not the farms that need to register.

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Big housing project set to join market next week

HCMC - Local property developer Van Phat Hung Corporation is pressing ahead with a plan to market its condo project in HCMC’s District 7 by launching a sales program for first apartments in the project next week.

Vo Anh Tuan, chairman of the corporation, says the La Casa condo project will gauge homebuyers’ feedback in the market with some 110 apartments with prices starting from US$1,000 (VND19.5 million) per square meter.

Tuan says the corporation has invested some VND3,000 billion, or over US$150 million, to develop the La Casa project, which is located on Hoang Quoc Viet and Dao Tri streets, facing the Nha Be River in District 7, some eight kilometers from the heart of HCMC.

The residential project is located on a 6-hectare area with 10 blocks of buildings from 28 to 35 stories, offering the local property market some 2,000 apartments and penthouses from 85 to 124 square meters.

Apart from commercial apartments, the project is designed with a section of apartments for lease and a section of 58,000 square meters for hotel and office spaces. Besides, it also includes spaces for retail and other serviced facilities such as an entertainment section, parks, fitness centers and schools.

“By launching the sales program, we want to stay ahead on the market when it is projected to look brighter in the coming time,” Tuan says in response to the Daily’s question why the corporation decided to launch its market program at a time when the local property market has witnessed stagnant trade.

He says the market has experienced difficulties for nearly three years, from 2008 – 2010, and following its cycle development, the market is foreseen to go up again in the coming time given the country’s positive trend of recovery.

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