Italian businesses eye investments

HA NOI — A delegation of Italian engineering companies and contractors in transport, energy and environment sectors will visit Viet Nam from Sunday to Wednesday, Trade Commissioner Marco Saladini said in Ha Noi yesterday.

The purpose of the mission was to aid the nation's rapid development by improving the country's infrastructure, presenting Italian companies with co-operation opportunities, Saladini said.

Over the past five years, infrastructure investment in the country had not kept pace with the GDP growth of 7.3 per cent. To meet demand and development goals, it was estimated Viet Nam's overall infrastructure spending requirements over the next five years alone were in the range of US$165 billion, about $33 billion a year.

Italian Trade Commission research indicated initiated projects to be completed by 2015 in the three key sectors' infrastructure were worth $85 billion.

Even this smaller figure implied a strong acceleration from the current overall expenditure level of $5 billion or 9.4 per cent of the country's GDP, which was the average of the last few years, Saladini said.

The trade commission would conduct a seminar next Monday and Tuesday on infrastructure development and co-operation opportunities with Italian companies. — VNS

Related Articles

• SMEs believe in decisive role for national development
• Foreign sea leases deprive locals of living
• IFC: Vietnam needs to increase PPP to support economy
• Most ice is unhygienic
• Government vows to bail out insolvent shipbuilder Vinashin

Vinashin's new motorcycle product sparks debate

A new motorcycle put out this month by a subsidiary of state-owned shipbuilder Vinashin has set off a heated debate regarding design patent and the origin of its engine.

Vu Manh Ha, general director of Vinashinmotor, said that the  Diamond Blue scooters use a modern engine produced by the Sundiro Honda Motorcycle Co in China.

Honda Vietnam insisted that the engine was not manufactured by any branches of the Japanese company around the world, and not by Sundiro Honda specifically. Honda Vietnam also said it is the only company that has the right to produce and distribute Honda engines and motorcycles in the country.

Speaking to local news website VTCNews, Ha said Honda was trying to “mess up” with his company and inspire doubts in consumers. He said local authorities verified the origin of the engines when they were imported.

But the engine is not the only question that comes up in the ongoing controversy surrounding the Diamond Blue. There have also been concerns over design patent infringement as the scooter is a definite look-alike of the popular Vespa LX model.

Diamond Blue retails at around VND50 million (US$2,560) while a Vespa LX costs around $4,000.

Ha said the design was provided by a Chinese company and Vinashinmotor has not violated any regulation. 

The Italian scooter company, Piaggio, issued a press release saying it has known about “a motorcycle that is similar, in design, to the Vespa LX”.

“Many companies have made products based on the design of Vespa but they all failed because their products lack the same design quality and high-tech value as Vespa,” the company said in its statement.

Piaggio, however, did not mention Diamond Blue or any intention to take legal action to protect its product. It said “Vietnamese consumers are wise enough to tell the difference between genuine products and copycats.”

Analysts say this response is a smart move considering Piaggio has not patented the design of Vespa LX in Vietnam.

To Duc Long, an official at the Vietnam Register, a government body responsible for technical supervision of vehicles, said both Piaggio and the National Office of Intellectual Property of Vietnam had been alerted about the similarities in design. However, both of them confirmed that Piaggio did not have a local patent on the design of the Vespa LX.

The controversy has not affected Diamond Blue sales. Analysts say the bike's reasonable price and the engine claimed to be made by Honda have caught the attention of many consumers.

According to a sales representative for Vinashinmotor, around 300 scooters have been sold over the past three weeks in the northern region. The company’s assembly plant will continue to supply 50-70 scooters for the market every day, he said.

Related Articles

• Vinashin's new motorcycle product sparks debate
• Spanish firms see Vietnam as good production base
• Timber-product exporters sign $3b deals
• Imported Chinese toothpicks dominate domestic market
• Party leader urges province to hasten pace of development

Power firms may be given more freedom in pricing

Vietnam may allow power companies to adjust prices on a quarterly basis as the country plans to create a more market-based pricing scheme for its power sector.

According to new regulations drafted by the Ministry of Industry and Trade, power wholesalers will be allowed to raise their prices accordingly if production costs increase by more than 1 percent from the previous quarter. In case of a price hike of more than 10 percent, the government will take measures to stabilize the market.

Power companies will be required to set aside parts of their profits for a price stabilization fund which will be used to offset future losses when production costs surge. The fund resembles a stabilization fund used by fuel traders.

Vietnam’s government currently allows power prices to change once a year. The most recent change was a 6.8 percent hike in March based on higher input costs for power production.

The new regulations are expected to be approved by the end of this year and new power prices will be announced in March 2011.

Officials at the Industry and Trade Ministry and state power utility Electricity of Vietnam (EVN) have said that the increase will be small and will not have any significant impact on daily life or production.

According to the Vietnam Energy Association, current power prices of around 5 US cents per kilowatt-hour are not attractive enough to encourage investment in the sector, as manufacturers only earn profits at prices of about 7-8 cents per kWh.

EVN posted a loss of more than VND3 trillion in the first six months this year because retail prices were set so low, the association said.

An EVN official said a more market-based pricing mechanism could help improve the companies financial situation and make it easier to secure loans.

Related Articles

• Power firms may be given more freedom in pricing
• Assoc insists on power price hike despite protests
• Spanish firms see Vietnam as good production base
• Foreign sea leases deprive locals of living
• IMF boss sees low risk of 'currency war'

Power firms may be given more freedom in pricing

Vietnam may allow power companies to adjust prices on a quarterly basis as the country plans to create a more market-based pricing scheme for its power sector.

According to new regulations drafted by the Ministry of Industry and Trade, power wholesalers will be allowed to raise their prices accordingly if production costs increase by more than 1 percent from the previous quarter. In case of a price hike of more than 10 percent, the government will take measures to stabilize the market.

Power companies will be required to set aside parts of their profits for a price stabilization fund which will be used to offset future losses when production costs surge. The fund resembles a stabilization fund used by fuel traders.

Vietnam’s government currently allows power prices to change once a year. The most recent change was a 6.8 percent hike in March based on higher input costs for power production.

The new regulations are expected to be approved by the end of this year and new power prices will be announced in March 2011.

Officials at the Industry and Trade Ministry and state power utility Electricity of Vietnam (EVN) have said that the increase will be small and will not have any significant impact on daily life or production.

According to the Vietnam Energy Association, current power prices of around 5 US cents per kilowatt-hour are not attractive enough to encourage investment in the sector, as manufacturers only earn profits at prices of about 7-8 cents per kWh.

EVN posted a loss of more than VND3 trillion in the first six months this year because retail prices were set so low, the association said.

An EVN official said a more market-based pricing mechanism could help improve the companies financial situation and make it easier to secure loans.

Related Articles

• Power firms may be given more freedom in pricing
• Assoc insists on power price hike despite protests
• Spanish firms see Vietnam as good production base
• Foreign sea leases deprive locals of living
• IMF boss sees low risk of 'currency war'

Small firms steered towards higher interest consumer loans

Small companies are complaining that they are not able to access loans to do business unless they accept higher interest rates.

Nguyen Hai Son, who owns a small transport company in Hanoi, said he wanted to apply for a bank loan to buy three new cars to expand his business.

Son visited three banks and he was told that a corporate loan would only cover half of the cars' value. For a larger loan of up to 90 percent of the value, he was advised to take out consumer loans instead.

The problem is the interest rates on consumer loans are higher, at 16-18 percent a year compared to 13.5 percent on business loans. Son said his company is now stuck with either accepting high interest payments or being given much less money than needed.

Many other small companies also said they have been encouraged to get consumer loans to do business.

The government earlier this year ordered banks to bring down interest rates to make sure local businesses have enough capital. Borrowing costs are set to be cut to 12 percent and the deposit rate to 10 percent by the end of this year.

To ensure their profit targets are met, many banks have tried to boost consumer lending so that they can charge high interest rates.

Tran Xuan Quang, deputy general director of Bao Viet Bank, said banks do not have large amount of funds available for lending, so they try to choose clients who can bring them more profit.

Moreover, it would be easy for a business to meet consumer loans requirements, he said.

Economist Nguyen Duc Thanh of the Hanoi National University said small businesses are not large clients and it’s hard to tell whether their owners will use the loan for consumer or business purposes. As a result, they can be treated by bank rather harshly.

According to the central bank’s branch in Ho Chi Minh City, consumer loans as of the end of August accounted for 5.2 percent of total loans in the city.

Related Articles

• Small firms steered towards higher interest consumer loans
• Power firms may be given more freedom in pricing
• Spanish firms see Vietnam as good production base
• Timber-product exporters sign $3b deals
• Greenback firmer on signs of rising demand

Early warning system on anti-dumping cases kicks off

HCMC – The website to give early warnings on anti-dumping investigations against Vietnam’s exports bound for the U.S. and EU was officially launched last Wednesday by Ministry of Industry and Trade.

Trinh Tuan Anh, head of International Cooperation Board in Vietnam Competition Authority of the ministry, told the Daily via the phone that the website keeps local enterprises informed of potential risks of anti-dumping investigations against Vietnamese exports.

Commodities put under consideration include textile and garment, footwear, seafood, furniture and electric cables imported by the U.S. and the EU.

Based on legal regulations of importing countries, the system gives red warning as the highest warning level, or yellow for lower risk and green for no risk. Besides, the web also provides information on anti-dumping duties and timeline of cases.

The system is expected to be updated and adjusted regularly based on data of the U.S. and EU imports from Vietnam, Anh said.

Bach Van Mung, director general of the Vietnam Competition Administration Department under the ministry, had earlier said that the early-warning system was expected to help reducing anti-dumping cases against Vietnamese exporters. The official, however, did not deny the possibility of wrong warnings.

The project of running the system is implemented in three phases. Anh said the second phase will begin in this November to give early warnings on risks of anti-dumping against products of ten industries exported to five markets. The warning will later cover 20 industries and ten markets.

Le Danh Vinh, deputy minister of Industry and Trade, was quoted by the government website www.chinhphu.vn on Wednesday as saying that local exporters are facing more than 34 anti-dumping and countervailing cases.

Related Articles

• Early warning system on anti-dumping cases kicks off
• Cashew traders yet to embrace trading center system
• Indian textile exhibition kicks off Wednesday
• Lawrence S. Ting Fund gives VND8.8 billion birthday gift
• Assoc insists on power price hike despite protests

Early warning system on anti-dumping cases kicks off

HCMC – The website to give early warnings on anti-dumping investigations against Vietnam’s exports bound for the U.S. and EU was officially launched last Wednesday by Ministry of Industry and Trade.

Trinh Tuan Anh, head of International Cooperation Board in Vietnam Competition Authority of the ministry, told the Daily via the phone that the website keeps local enterprises informed of potential risks of anti-dumping investigations against Vietnamese exports.

Commodities put under consideration include textile and garment, footwear, seafood, furniture and electric cables imported by the U.S. and the EU.

Based on legal regulations of importing countries, the system gives red warning as the highest warning level, or yellow for lower risk and green for no risk. Besides, the web also provides information on anti-dumping duties and timeline of cases.

The system is expected to be updated and adjusted regularly based on data of the U.S. and EU imports from Vietnam, Anh said.

Bach Van Mung, director general of the Vietnam Competition Administration Department under the ministry, had earlier said that the early-warning system was expected to help reducing anti-dumping cases against Vietnamese exporters. The official, however, did not deny the possibility of wrong warnings.

The project of running the system is implemented in three phases. Anh said the second phase will begin in this November to give early warnings on risks of anti-dumping against products of ten industries exported to five markets. The warning will later cover 20 industries and ten markets.

Le Danh Vinh, deputy minister of Industry and Trade, was quoted by the government website www.chinhphu.vn on Wednesday as saying that local exporters are facing more than 34 anti-dumping and countervailing cases.

Related Articles

• Early warning system on anti-dumping cases kicks off
• Cashew traders yet to embrace trading center system
• Indian textile exhibition kicks off Wednesday
• Lawrence S. Ting Fund gives VND8.8 billion birthday gift
• Assoc insists on power price hike despite protests