VietNam Business

Sunday, October 17, 2010

Official calls on Indian drug firms to invest in Vietnam

Cao Minh Quang (R ), deputy minister of health, chats with Indian businessmen at a tea break during the seminar on Vietnam’s pharmaceutical industry - Photo: Dao Loan

HCMC – A deputy health minister on Monday called on Indian pharmaceutical firms to invest in manufacturing in Vietnam rather than largely confining their business to drug trading only.

Deputy Minister of Health Cao Minh Quang told a seminar held in HCMC that India was most active in the Vietnamese pharmaceutical market with up to 128 firms having gained licenses to do business here.

Furthermore, the number of valid circulation visas given to Indian drugs also accounts for the largest number with over 4,500 products, or 37.8% of the total number of foreign drugs, far higher than the second position held by South Korea with over 19%.

“Indian firms have played a big part in Vietnam’s pharmaceutical market,” Quang told the seminar “Existing and Future Prospects in Vietnam’s Pharmaceutical Industry” organized by the Indian Business Chamber in Vietnam.

But the deputy minister noted that Indian drug firms engaged in trading only while ignoring the manufacturing segment in Vietnam. He urged Indian firms to take a bolder approach to expand their business activities in Vietnam.

“Only one Indian company has set up a manufacturing plant in Vietnam, but now the plant, named Ranbaxy, has already been acquired by ICA and thus it is no longer a foreign direct investment enterprise,” Quang said.

Quang said the local industry still had opportunities for investors to grasp regarding production of raw materials and hi-tech pharmaceutical products, which is the strength of Indian enterprises.

Vietnam’s pharmaceutical industry is in need of investment, including in medication packaging materials, equipments, herbal medicines, and other related services, according to Quang.

“That’s an opportunity. Let us think about this. We will give very good conditions to those companies wanting to invest in the production of hi-tech pharmaceutical products. It’s a priority investment sector,” he said.

Indian entrepreneurs at the seminar said they were interested not only in selling drugs but also in other business segments like infrastructure for the industry. The Ministry of Health should work closer with the Ministry of Planning and Investment to bring out better policies to help the investors develop their projects in the country, said a participant.

“Indian enterprises can invest in infrastructure, technology transfer for manufacturing advanced drugs, collaboration for the manufacturing of vaccines and bio-products, and others,” said Kailash Patki, country manager of Dr. Reddy’s Laboratories Ltd.

According to Abhay Thakur, Indian consul general in HCMC, Indian pharmaceutical export to Vietnam last year amounted to US$193 million.

Low demand prompts airlines to cut fares, drop service

Planes of Vietnam Airlines and Jetstar Pacific are seen at Noi Bai Airport. Low demand results in a big fare reduction by the flagship carrier and an air route suspension by the budget carrier - Photo: Mong Binh

HCMC - Decreasing demand for air travel after the summer rush has forced Vietnam Airlines to slash its fares and Jetstar Pacific to suspend its daily service between Hanoi and Nha Trang which was launched in early June.

Vietnam Airlines on Monday announced that it would knock more than 50% off the fares for many domestic flights as one of its programs to diversify fares and to encourage domestic air travel in the low season.

The big discount pushes one-way fares down to the range of between VND400,000 (roughly US$20) and VND860,000 applicable for bookings and departure flights from September 15 to October 30 this year. These rates do not include taxes and surcharges.

The national flag carrier will sell more than 300,000 discount tickets during the period, or nearly 7,000 tickets a day on its website at www.vietnamairlines.com, booking offices and agents for the flights between Hanoi and HCMC, and between these cities to other destinations in Vietnam.

Vietnam Airlines now flies to almost all business and tourist spots in the country, including Nha Trang, Hue, Danang, Tam Ky, Quy Nhon, Tuy Hoa, Dong Hoi and Vinh in central Vietnam, Phu Quoc, Can Tho and Rach Gia in the south, and Dalat and Buon Ma Thuot in the Central Highlands among others.

Vietnam Airlines announced the big program of discount fares one week after Jetstar Pacific sold one-way air tickets from VND315,000 (some US$16) for the flights from Hanoi and HCMC to Danang or vice versa, VND600,000 for the HCMC-Haiphong service, and from VND615,000 for the HCMC-Hanoi run.

Jetstar Pacific’s discount fares apply to the flights between September 7 and October 27, which is said by local airlines and travel firms to be the low season for the domestic tourism market segment after the summer vacation.

Because of low demand for air travel, Jetstar Pacific suspended its two daily flights between Hanoi and Nha Trang, the latter being one famous destination in central Vietnam for vacationers rather than business people.

Jetstar Pacific told the Daily that it operated Hanoi-Nha Trang services from June to September 5 to meet surging demand in the summer time. The route drop left Hue, Danang and Vinh the only three destinations in central Vietnam that the carrier now has daily flights to.

Usually, the low tourism season in Vietnam starts from September till November, leading to a sharp fall in the domestic demand for air travel, especially to central Vietnam.

Low demand prompts airlines to cut fares, drop service

Usually, the low tourism season in Vietnam starts from September till November, leading to a sharp fall in the domestic demand for air travel, especially to central Vietnam.

US$900 million committed to Mekong Delta

Prime Minister Nguyen Tan Dung (2nd, L), Minister of Planning and Investment Vo Hong Phuc (2nd, R) and Victoria Kwakwa (R), country director of the World Bank (WB) for Vietnam, at the conference on Mekong Delta investment and development in Can Tho City on Monday - Photo: TTXVN

CAN THO – Foreign investors committed to pouring over US$900 million into the Mekong Delta while they were attending a conference on Mekong Delta investment and development in Can Tho City on Monday.

There were 10 memorandums of understanding and a letter of intent signed for 11 projects in a range of sectors such as infrastructure, energy, tourism, seafood processing, education, housing, industrial park, trade and services.

Speaking at the conference, Prime Minister Nguyen Tan Dung said the conference provided an opportunity for investors and local authorities to learn about investment policies and find ways to cope with difficulties and improve connectivity in the region.

The conference was aimed at calling for domestic and international investors to get involved in projects in the Mekong Delta which is responsible for around 18% of Vietnam’s gross domestic product (GDP). The region also contributes 50% of the nation’s rice output, 52% of the seafood output, 70% of the fruit production, 90% of the rice export volume and 60% of the seafood export value.

However, foreign investment activity there remains lackluster in the 13-province region around 450 projects worth over US$7.7 billion licensed there so far.

Minister of Planning and Investment Vo Hong Phuc said insufficient infrastructure and manpower were major bottlenecks for investment in the delta. Although the region has Can Tho and My Thuan bridges connected to National Highway 1A, its national, interprovincial and regional road networks still have limited or no connectivity, Phuc said.

The Mekong Delta has a population of 18 million but over 85% of the work force remains untrained. Among the skilled workers, only 0.65% of them have obtained certificates, 1% vocational training diplomas and 2.57% college, university or post-graduate degrees.

Victoria Kwakwa, country director of the World Bank (WB) for Vietnam, said the WB would help the Mekong Delta attract human resources given its development potential. With WB support, the region will be able to attract more investment, she said.

In the 2006-2010 period, the delta has reached a GDP growth rate of between 10% and 12% a year. However, there remain many shortcomings in socioeconomic development in the region given slow economic restructuring, and inadequate scientific and technological applications.

The competitiveness of local businesses and products are poor and investment attraction is lower than in other parts of the country.

Ashok Sud, vice chairman of the Europe Chamber of Commerce in Vietnam, said the Mekong Delta provinces should establish specific plans for investment in key industries. He pinned high hopes on the region’s ability to make it more attractive to investors.

The conference was co-held by the Ministry of Industry and Trade and the provincial authorities in the region, and attended by over 500 local and international delegates. This was part of the national investment promotion program.

Major amusement park in the offing in Long An

An artist’s impression of Happyland Vietnam project in Long An Province - Photo: Courtesy of Khang Thong Group

HCMC - Phu An Infrastructure Development and Construction JSC, a subsidiary of Khang Thong Group, announced on Monday to start building a big amusement project in the Mekong Delta province of Long An next year.

Nguyen Thanh Su, deputy general director of Khang Thong Group, told the Daily on the phone on Monday that the Happyland Vietnam project would require around US$2 billion, with US$600 million going to a theme park similar to Disneyland and Universal Studio, the famous amusement destinations in the world.

The first phase of the project will start on 338 hectares, stretching along the Vam Co Dong River. It will be expanded in the second phase, according to the company which on Monday introduced the project’s investment opportunities in the capital city of Hanoi to potential investors in the northern region.

In addition to the amusement section, the project will have a commercial section providing some 160,000 square meters of space, a section for three -and five-star hotels with some 1,000 guest rooms and a section for residential development with villas and shophouses, among other facilities.

The firm said Happyland could receive around 14 million visitors a year and generate jobs for about 10,000 people in the province.

Answering a question about the financial capability of the investor, Su said the group would use its own budget and join hands with strategic partners. “We are mulling a plan to list on the bourse to pool capital,” Su told the Daily on Monday.

The company is expected to organize an investment opportunity seminar in HCMC, about 30 km from Long An, in the middle of this month.

Su said the group was working with its partners to begin work on the project by January next year and complete it by April 2014.

Call for FDI licensing rules to become tougher

The Foreign Investment Bureau (FIB) under the Ministry of Planning and Investment was urged to keep a close eye on unqualified projects in order to boost disbursement.

Participants at a workshop in the southern province of Ba Ria-Vung Tau Tuesday asked the FIB to review the practice of disbursing foreign direct investment (FDI) at the grassroots level in an effort to help local administrations to speed up the process.

They called on the FIB to take firm measures against unqualified projects.

“Those projects which apply obsolete technology or have a negative impact on the environment must not be granted licences for investment. The FIB should also be determined in withdrawing land lots and licences of those FDI projects which are slow in deployment,” the workshop heard.

Participants from the Association of FDI Enterprises, planning departments and industrial zone management boards in southern provinces and cities, also asked the FIB to withdraw land areas left unused by some FDI projects to allow reallocation to other projects.

The FIB forecast a further rebound of the national economy during the rest of the year after a fast recovery since early this year.

The first half of the year witnessed 438 projects licensed for investment capitalised at US$7.9 billion, representing an increase of 43 percent over 2009.

Up to July, 2010, a total of 11,759 FDI projects operated nationwide with a combined investment of over $187 billion. Investors came from 91 countries and territories.

Fish processors decry circular, say shutdown imminent

HCMC – Fish processors at a meeting in HCMC on Monday blasted the Ministry of Agriculture and Rural Development over a circular that imposes tough control on imported materials, saying many plants would face shutdown if the circular is not withdrawn.

Circular 25/2010/TT-BNNPTNT, which took effect last Wednesday, requires that food materials imported into Vietnam must be registered with quality control agencies in the countries of origin. These agencies then are required to send such registrations to the National Agro-Forestry-Fisheries Quality Assurance Department (Nafiqad) under Vietnam’s agriculture ministry.

At the meeting on Monday, local processors and the Vietnam Association of Seafood Exporters and Producers (VASEP) called on the Government and the ministry not to apply the circular, otherwise many plants will be closed down due to the lack of materials. They petitioned that the circular not apply to such imported materials as cod, salmon and tuna.

Tran Thanh Chien, vice chair of VASEP, told the meeting that as of Monday, only ten out of 80 countries and territories that exported fishery materials to Vietnam had agreed to observe the circular, as registered with Nafiqad. That means many contracted shipments cannot be delivered to Vietnam due to the new rule, Chien said.

The circular has been forwarded to Vietnam’s trading partners via their embassies, but many countries have not had their representatives in Vietnam, said Chien. Meanwhile, several economies like Thailand, Myanmar, and Taiwan have answered that they do not observe Vietnam’s circular because they have not asked for the same from Vietnam.

The agriculture ministry has explained that many countries worldwide have imposed regulations on Vietnam’s food products, so Vietnam is now doing the same to raise the stance of the country. But Chien of VASEP rejected the reasoning, saying the regulations may apply well with other food materials like cattle and poultry meat, but not fisheries.

The meeting on Monday heard numerous outcries.

Nguyen Xuan Nam, director of Hai Vuong Company in Khanh Hoa Province, said his company began to import fishery materials since 1999 for processing and export to other countries.

“To ensure jobs for 2,000 workers all year round, we have to import 70% of our demand for fish materials. If Circular 25 still prevails, we will have to close down our factories early next month as materials will run out by then,” Nam said.

Nguyen Pham Thanh, general director of Highland Dragon in Binh Duong Province, said his company needed 5,000 to 6,000 tons of tuna a month to produce canned food. “Now materials are enough for our processing until mid-September, and we will have to scale down production or shut down one or two factories,” he said.

Meanwhile, Cao Thi Kim Loan, director of Binh Dinh Fishery Joint-stock Company, expressed concern that her company would have to pay compensation for partners when having not enough finished products for delivery.

In his petition sent to the Prime Minister, Nguyen Quang Tuyen, director of Cafico Vietnam, said the circular will only trim the material supply sources and thus eliminate competition, which will hit Vietnamese processors. That in the end will cut into the competitiveness of Vietnamese enterprises against rivals from China, the Philippines and Thailand.

VietNam Business

Sunday, October 17, 2010

Official calls on Indian drug firms to invest in Vietnam

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