South Korean businesses focus on Vietnam

Photo: Reuters

Businesses from the South Korea see Vietnam as a promising market for their investments and intend to maintain their position as Vietnam’s number one foreign investor.

The Director of the ASEAN- Korea Center (AKC) for Planning and Development, Jae Hyun Cho stated this at a workshop on trade and investment between Vietnam-South Korea in Hanoi Wednesday.

Jae Hyun Cho is leading a delegation of 23 RoK leading enterprises that operate in agricultural machinery, forestry, seafood and foodstuffs, on a fact-finding tour of Vietnam from September 7-10 to seek out business and investment opportunities.

Investment and trade ties have developed steadily between Vietnam-RoK since Vietnam introduced the Law on Foreign Investment in 1988. The RoK has invested in nearly 2,600 projects, with a total registered capital of over US$23 billion in Vietnam.

The Deputy Trade and Industry Minister Le Duong Quang, said that businesses from the RoK, who are often amongst the top three foreign investors in Vietnam, have made their presence felt in property and infrastructure, ship building, electricity and electronics.

Despite the negative impacts of last year’s global economic crisis, bilateral trade between Vietnam and the RoK reached $9 billion in 2009 and is expected to climb to $20 billion in 2015.

At the workshop, the Director of the Foreign Investment Agency under the Planning and Investment Ministry, Do Nhat Hoang, pledged to continue supporting RoK investors to do business in Vietnam, to boost trade and investment between the two countries.

Hoang also called on RoK businesses to continue investing in Vietnam, especially in agriculture, agricultural machinery and forestry, in order to retain its position as one of Vietnam ’s leading investors.

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Vietnam footwear industry eyes runaway exports

Vietnam footwear exports this year could top a record $5.4 billion, well above the target of $4.6-$5 billion

Photo: Tuoi Tre

Footwear exports this year could top a record $5.4 billion, well above the target of $4.6-$5 billion, Nguyen Duc Thuan, chairman of the Vietnam Leather & Footwear Association, said.

Exports maintained their high growth rate in August, he said, with the month’s shipments of $450 million taking the year-to-date figure to $3.22 billion, a 19 percent increase year on year.

Exports had been worth $4.1 billion last year despite the global recession. The number of contracts signed this year is already 16 percent higher than for the whole of last year, Thuan said without specifying their value.

Vietnam is the world’s fifth biggest footwear exporter but the domestic industry faces many difficulties, especially the shortage of workers and dependence on imported raw materials.

The country still imports 70-80 percent of tanned leather and high-quality leatherette to make shoe caps, certain soles, and decorations.

Its support and machine tools industries are in a very primitive stage while footwear marketers and designers lag behind their foreign rivals, making it hard to create international brands for Vietnamese footwear.

Exporters have come up against protectionist barriers in the EU, Peru, and Turkey.

But the industry is aiming to expand exports to markets like the US and ASEAN member countries to take advantage of free trade agreements.

Vietnam has an advantage over its main rival, China, in labor costs since China’s GDP per capita is now $3,000 compared to its $1,200, Thuan said.

Vietnam’s per capita income is forecast to rise to $3,500 only in 2020, which means the leather-shoe industry can continue to be competitive through the next decade, he added.

Another factor in its favor is that demand for leather footwear remains very high.

Worldwide, some 17 billion pairs of shoes are produced every year, of which six to seven billion are manufactured under contract.

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Textile firm discharges waste

HA NOI — Two employees of Pangrim Neotex, a Korean textile company, were caught discharging around 1,000cu.m of untreated waste water into the Hong (Red) River in Viet Tri City on Sunday, according to Phu Tho Province's Environment Police Bureau head Ngo Quy Trieu.

"A sample of the waste water was sent to the provincial Department of Natural Resources and Environment for testing to determine the company's violation," Trieu said.

Yoon Wou Suk, a representative from the company, admitted to the wrongdoing. However, Suk explained that the company's waste treatment facility was in operation as of 1997 but the company was building a new treatment facility, which is expected to open in just over one year.

The provincial People's Committee fined the company VND23 million (US$1,173) last year for violating environmental regulations.

In 2003, the Prime Minister approved a plan to impose harsher punishments on companies that cause severe environmental pollution. This includes Pangrim Neotex.

Under the current regulation, polluters will be fined between VND100,000-500 million ($5.2-25,500) depending on violation. — VNS

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Firms fail to meet export orders due to labour shortage

Enterprises in HCMC's export processing and industrial zones are struggling to complete increasing orders because they are short of workers.

Textile, footwear, electronic assembly and seafood processing establishments typically receive more orders towards the end of the year.

Nguyen Thanh Tung, director of the Job Opportunity Centre under the HCMC Export Processing Zones Authority (HEPZA), said enterprises needed 49,000 workers from now until the end of the year, but the centre can only meet 70 percent of this demand.

Around 300 enterprises in textile, footwear and electronic assembly are facing severe labour shortages. The Tan Thuan export processing zone alone needs 10,000 workers badly.

Besides non-skilled labour, enterprises are also having difficulties in finding suitable candidates for middle management positions, from commercial to production ones.

"The middle management force accounts for 10 percent of recruitment needs and despite the low level of scarcity; there is aggressive competition between enterprises," Tung said.

Tung said that to improve the situation that has been a constant headache for enterprises in recent years, Hepza will only accept new projects that deploy high technology, especially in mechanical, electrical and electronics.

Experts have said that enterprises need to effect changes in their salary policies, improve other working conditions and apply technological innovations.

The demand for labour is expected to rise with the city planning to build seven new IZs and expand existing IZs to cover an additional area of 3,000ha.

Furthermore, the city also faces stiff competition from neighbouring provinces which have also opened new IZs. HCMC now has three export processing zones and 10 industrial zones with 1,200 projects that employ 252,000 workers.

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Vietnam seeks to elevate status of seaports

Vietnam should seek every possible way to promote its marine advantages and potential as well as make the best use of investment sources to develop seaport infrastructure to meet future demands of growth and development.

Deputy Prime Minister Hoang Trung Hai made this statement while attending the 7 th Congress of the Vietnam Sea Port Association (VPA), which opened in the northern city of Hai Phong Wednesday.

The two-day congress has drawn the participation of more than 200 delegates from over 50 seaport businesses nationwide.

“Creating favourable mechanisms for port development is necessary to promote the efficiency of investment sources,” Hai stressed.

In the future, VPA should continue taking measures to stabilise seaport service prices and amend several customs procedures in order to improve the competitiveness of Vietnamese seaports, he said.

The association was also urged to actively participate in activities of ASEAN and international seaport associations.

Established 16 years ago, VPA now has a network of 53 port members, which handled nearly 172 million tonnes of cargo in 2009, up 20 percent over the previous year.

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Vietnam employment manual released

Vietnam’s leading recruiting firm Navigos Group and US law firm Russin & Vecchi jointly released the Vietnam Employment Manual Wednesday.

The manual is provided free of charge to help employers, especially those of foreign-invested businesses, to understand and apply the complex and often confusing labour regulations.

“We believe it’s an essential guide for any company operating in Vietnam or planning to start a business in Vietnam,” said Navigos Group Managing Director Nguyen Thi Van Anh and Russin & Vecchi Managing Lawyer Sesto Vecchi.

“Vietnamese labour law continues to develop,” said Anh, adding that however, some labour law regulations remain ambiguous. Understanding labour regulations and applying them correctly can help to avoid disputes and improve employee retention, she added.

According to a recent survey conducted by Navigos Group, almost 80 percent of more than 14,000 surveyed people asserted that they would not join a company if they know that company violates the labour law.

Another survey revealed that 87 percent of over 8,000 surveyed people believe their company does not properly apply 100 percent labour laws. These findings indicate that compliance with labour laws should be taken into account in developing talent retention strategies.

Businesses failing to abide by labour laws, especially working hours and wages, have caused labour disputes and rising strikes.

The Ministry of Labour, War Invalids and Social Affairs reported that there were 216 strikes nationwide last year and more than 200 cases in the first seven months of this year.

 

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Drastic measure planned to boost public investment management

Cua Viet Bridge, which was built from the State budget, is one of the key projects for central Quang Tri Province's socio-economic development strategy. The Government is expected to improve its public investment management with drastic measures and mechanisms. — VNA/VNS Photo Ho Cau

HA NOI — The Vietnamese Government is to implement drastic measures and transparent mechanisms to improve its public investment management, international participants at a seminar in Ha Noi yesterday were advised.

The Government would focus on improving its policies and structures on investment management, especially regarding State funded projects, the head of the Planning and Investment Ministry (MPI)'s External Economy Department, Ho Quang Minh told the participants.

The seminar was held to share international experiences in public management and help Viet Nam learn lessons from other countries in the field.

To improve the effectiveness of public investment, said Minh, the government was speeding up the completion of guidelines related to investment management. The policies and mechanics on consulting, supervising and managing of publicly invested projects will be improved to make the processes more transparent, according to Minh.

According to MPI statistics, around VND286 trillion (US$14.6 billion) was spent on public investment during the 2001-05 period, accounting for more than 23 per cent of the total investment in all social fields. Total expenditure is expected to rise to VND739 trillion (nearly $37.9 billion), accounting for more than 24 per cent of total investment, during the 2010-15 period. That means huge investment from the State budget on the public projects and targeted programmes, according to the MPI.

It is vital to have efficient management to make the most effective use of investment. The Government therefore needs to have proper measures and policies to ensure national investment funding is effectively used.

Viet Nam had a high rate of public investment, throughout a wide range of different fields, accounting for nearly 40 per cent of the nation's gross domestic production, Martin Rama, head of the World Bank's East Asia Development office, told the seminar.

There were, however, weaknesses in many of the country's investment fields, said Rama, the bank's lead economist, who pointed out the drawbacks in public investment at the meeting. Regional development as a component of the comprehensive investment plan had not received adequate attention and a strategic environment evaluation had not been completed to determine key fields for investment, said Rama.

Decentralisation has resulted in inefficiencies and an overlapping in the public investment management, according to the bank's economist.

Sharing the South Korean experiences in economic renovation, head of the Public and Private Infrastructure Management Centre of the country's Development Institute Kim Jay-hyung said he agreed with the Vietnamese Government's plan which would see investment project assessment at both central and local levels.

The Vietnamese Government would adopt comprehensive measures when assigning responsibilities to relevant authorities and investors based on the grade of the project, said Minh. The works on assessment, supervision and inspection will be improved while ineffective projects and investment funds which did not meet the requirements of the comprehensive plan reviewed, according to Minh. — VNS

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