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BUSINESS IN BRIEF 24/9   2009-09-24 - VietNamNet/VNA, TN

Furniture fair opened in HCM City

A two-in-one international exhibition on machines and equipment for wood processing and interior furniture making industries opened in Ho Chi Minh City on September 24.

More than 250 companies, including those coming from overseas, have participated in the event, officially known as the 2009 Vietnamwood and Furnitec Fair and displayed their products at over 450 stands.

Enterprises from the US, China, Italy and Spain are prominent at the event with their well-known trade marks of Homag, Boark, Yan’s, APP, Holz-Her and Hafele.

In addition to showcasing their products, businesses will also provide knowledge and experience in wood processing techniques and methods and opportunities to penetrate into new markets through a series of trade seminars.

The fair, organised by the Ministry of Industry and Trade in coordination with the Vietnam National Exhibition and Vinexad branch in Ho Chi Minh City , the Hong Kong Exhibition Service Company and Yorkers-Hong Kong Marketing Service Trade Company, will last till September 27.

More than 16,000 people are expected to visit the event.

More investment needed for rural development

Although investment in agriculture and rural areas has improved remarkably in recent years, the number of projects and the volume of investment capital in this sector are still less than in other economic sectors.

According to the Foreign Investment Department under the Ministry of Planning and Investment (MPI), in 2008, the agro-forestry-fisheries sector attracted 45 new projects with a combined investment of over 252 million USD; accounting for 3.8 percent of all projects and 0.42 percent of newly registered investment. The respective percentages for the first eight months of the year were 2.57 percent and 0.46 percent.

The sector now has 480 valid investment projects with a total registered capital of over 2.98 billion USD, making up 4.5 percent of all total projects and nearly 1.8 percent of the total investment capital.

The majority of the projects are small-sized, except for a number of sugar, animal feed, afforestation and wood pulp projects that have cost tens of millions of USD. Many countries with modern agricultural industries have yet to invest in Vietnam .

Many domestic businesses have also invested in agriculture and rural areas. According to the National Institute for Economic Management, more than 39,400 businesses are registered to invest in agriculture and rural areas but most of them are small or medium sized.

In addition, there are around 2,000 craft villages in rural areas. However, due to their small scale, the contributions craft villages make to their local economies are still humble.

A survey conducted by the Agricultural and Rural Development Information Centre shows that since 2000, the average size of rural businesses has increased by only 1.7 percent. The proportion of agricultural businesses operating in rural areas has also decreased from 5.2 percent to 1.2 percent while the rate of industrial enterprises has climbed from 67.5 percent to 70 percent.

To lure more investment into agriculture and rural areas, the Ministry of Agriculture and Rural Development has recently put together an action programme to attract FDI into the agricultural sector. It also provides a list of projects that are looking for investment and has put forward plans to raise more domestic and foreign investment.

The MPI is also drafting a plan to encourage businesses to invest in agriculture and rural development with a wide range of preferential policies, including land rental exemption and reduction.

EC decision to affect Vietnam’s seafood exports

Vietnam ’s seafood exports will certainly be influenced by the strict requirements stated in the European Commission (EC)’s Regulation 1005, to take effect in January 2010, said a Vietnamese official.

Under the regulation, which covers establishing a system to prevent, deter and eliminate illegal, unreported and unregulated (IUU) fishing, each batch of seafood exported to the EU must be accompanied by a written commitment from the processing factory on the origin of products, or a catch certificate, said Nguyen Viet Manh, Deputy Director of the International Cooperation Department under the Ministry of Agriculture and Rural Development (MARD).

He added that these documents must be checked by authorised agencies in the importing countries before commodities are transported to their ports of entry.

The regulation specifies that the EU bans the import of illegally-caught seafood products. In cases where seafood exporters import materials from other countries, and include them in products for export, the same regulations on the certification and authorisation of such materials apply.

The EU also requires that catch certificates and commitments by processing factories must furnish details on fishing vessels, fishing zones, processing facilities, and export procedures, as well as the volume and types of seafood.

According to MARD Deputy Minister Luong Le Phuong, under international law, fishermen have the right to fish in their territorial waters. Therefore, it is difficult to give details on fishing zones and dates as well as to change the methods used by fishing communities to catch fish, he said.

Because Vietnam lacks supervision and certification systems and a large-scale fleet of vessels, with fishing operations dispersed over a wide area, it will face serious difficulties in ensuring IUU-compliance, managing fishermen, and providing them access to information on the application of the EC’s new regulation.

According to the Department of Production and Protection of Aquatic Resources, Vietnam now has around 130,000 fishing vessels, most of which are small-sized, and are expected to catch 2 million tonnes of aquatic products per year.

The MARD has established a working team which is responsible for implementing the requirements of EC Regulation 1005. However, a working team member said that it will be hard for them to meet all the requirements as the IUU will become effective within four months.

The EU is now Vietnam ’s largest seafood importer with 26 out of its 27 members importing products. In 2008, Vietnam ’s seafood volume shipped to the EU accounted for over 40 percent of its total seafood exports and 25.4 percent of its total export turnover.

Over the past years, Vietnamese businesses have always satisfied all standards set by the EU, a market with strict requirements on food quality and hygiene.

This was not only recorded by increasing volumes of seafood products to the EU over the years, but also reaffirmed by the recent EC approval of the inclusion of 30 more Vietnamese companies on its list of businesses entitled to export seafood to the EU, raising the total of Vietnam’s seafood businesses allowed to ship products to this market to 330.

Local firms raise salaries despite recession

The average gross salary increased 16.47 percent during the period from April 2008 to March 2009, according to the latest announcement from the Navigos Group, the leading recruitment solutions provider in Vietnam.

This is one of the final results of the Vietnam Salary Survey 2009 which was released on September 23 in Ho Chi Minh city.

The survey collected data from 163 companies across Vietnam, spanning more than 15 industries and covering 75 job categories.

Gross salaries have increased for most industries, the survey said, adding that leading the pack is the real estate and property development sector, ringing in at 23.25 percent.

Financial services, which had led the salary increases for the last two years, dropped down to second place with 21.78 percent.

However, Winnie Lam, Director of Human Resource Advisory Services of the Navigos Group said these figures may underestimate the real trend, as some industries have been slow to respond to the growth of the economy until recently, and thus will need to implement a more sizable increase to meet the surge of demand, even in a slow economy.

Contrary to last year’s survey, companies from the southern provinces included in the Vietnam Salary Survey 2009 reported the highest rise with over 20 percent, jumping ahead of both Ho Chi Minh city and Hanoi.

Among the companies surveyed, 47 percent are wholly foreign-owned. Local companies made up merely 11.7 percent, a rather small percentage.

However, they did report a higher salary increase at 16.45 percent compared to 15.61 percent for the foreign-owned enterprises.

The Vietnam Salary Survey 2009 is expected to be announced to Navigos Group’s clients in Hanoi on September 25.

Since 2005, the survey has offered comprehensive and insightful information, which accurately reflects changing trends in salaries, benefits, allowances, and bonuses in the Vietnamese labour market.

Vietnam buys rice from farmers to stabilize prices

Prime Minister Nguyen Tan Dung Tuesday asked the Southern Food Corporation to buy 500,000 tons of rice from farmers in order to keep prices stable and ensure farmers make profits.

The nation’s top rice exporter, also known as Vinafood 2, has been asked to purchase the summer-autumn crop rice within two months. The rice will be kept in stock until January 20 next year.

The government will subsidize 100 percent of the interest rates on loans taken by Vinafood 2 to purchase the rice.

The 13 southern provinces of the Mekong Delta, Vietnam’s largest rice growing area, are expected to produce a total of 7.75 million tons of unmilled rice in the summer-autumn crop, which ends this month.

Early this month many farmers in the region said they failed to sell their huge rice stockpiles harvested from the bumper harvest.

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