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BUSINESS IN BRIEF 28/9   2010-09-28 - VietNamNet/VNA

Agro-forestry-seafood exports continue soaring


The agro-forestry-seafood sector earned 1.75 billion USD from exports in September, raising its total export turnover in the first nine months of the year to 13.93 billion USD, a year-on-year increase of 22.3 percent.


Of the total, agricultural products brought home 7.32 billion USD, up 21 percent and seafood, 3.47 billion USD, up 14.2 percent.


Rice topped the list of agro-forestry products in terms of both export volume and value with 5.55 million tonnes worth 2.56 billion USD in the nine-month period, representing respective increases of nearly 12 percent and over 14 percent. The prices of Vietnamese rice have come close to those of Thailand , the world’s largest rice exporter.


Several other agricultural products also recorded increases in both export volume and value, including coffee with 925,000 tonnes, earning over 1.3 billion USD, up 4.2 percent in volume and nearly 1 percent in value. Germany was Vietnam ’s largest coffee consumer with 13.5 percent of the country’s total export volume, followed by the US with 12.7 percent.


Rubber exports rose only 10.9 percent in volume but saw a double growth in value compared to the same period last year thanks to an 86-percent increase in price. In the first nine months, Vietnam shipped 531,000 tonnes of rubber, earning 1.45 billion USD. China was Vietnam ’s biggest rubber importer that accounted for over 57 percent of the country’s total export value.


The country’s tea export turnover reached 146 million USD, soaring 16.7 percent year-on-year while the export volume increased only 4 percent with 100,000 tonnes. Pakistan was the largest importer of Vietnam ’s tea products, followed by Taiwan and Russia .


Vietnam remained the number one cashew nut exporter in the world. In the reviewed period, the country exported 143,000 tonnes worth 780 million USD, up 10 percent in volume and 30 percent in value. Vietnamese cashew nuts were shipped to 50 countries and territories worldwide with the US being the largest consumer, accounting for nearly 34 percent of the country’s total export value.


Pepper saw a decrease of 5.6 percent on volume but its export value was up over 30 percent over last year’s correspondent period with 102,000 tonnes and 345 million USD respectively.


Forest products and timber recorded a high export turnover of 2.6 billion USD. However, the nine-month import turnover of timber material still reached 827 million USD despite a year-on-year drop of up to 30.9 percent.


Seafood continued to affirm itself as the country’s strategic export item with 3.5 billion USD in nine-month export turnover. Japan and the US were the two largest consumers of Vietnamese seafood with respective proportions of 18.4 percent and 18 percent.


In the nine-month period, Vietnam imported 9.5 billion USD worth of materials for agro-forestry-seafood production, up over 27 percent year-on-year.


Apparel exporters to pass benchmark


The textile and garment sector’s export value is expected to earn 7.5 billion USD during the first nine months, a 17 percent increase against the same period last year, reports the Vietnam Textile and Apparel Association.


The industry is likely to surpass its scheduled 10.5 billion USD benchmark for the year.


The sector’s solid performance is attributed to an increase in orders from foreign clients and the products’ prices increased by 15-20 percent.


Export growth to the European market keep stagnant, while other markets remain accelerating during the period.


The country’s export to the US market increases around 20 percent and to Japan raises by 15 percent and to ASEAN nations goes up by 17 percent.


Especially, the trade agreement between ASEAN with the Republic of Korea has helped boost Vietnamese garments’ export to the market with the sharp increase of 80 percent.


The association reported that many garment makers had so far received enough orders for export this year, and signed contracts for export next year.


However, the association claimed that the early orders may shrink profit of the enterprises amid on-rising prices of input materials, accessories and higher salaries.


To satisfy increasing demand of international contracts, ten companies under the Vietnam National Textile and Garment Group (Vinatex) have recently made production expansion investments to meet increasing orders from foreign partners as well as higher demand at the local market.


The Nha Be Garment Joint stock Co has approved a plan to inject thousands of billions of dong to implement tens of projects on textile, garment, washing and dyeing.


The Dap Cau Garment Joint Stock Co invested nearly 100 billion VND (5.13 million USD) in a new factory in the northern province of Bac Ninh. It was put into operation in February and has the capacity to produce 9 million products annually.


Nguyen Dang Luan, chairman of Dap Cau Co, said the new facility would help the firm meet the rising number of export contracts.


"When the factory was prepared to begin operating the first 16 production lines the firm had already signed export deals for the whole year with three partners, generating 1,800 jobs," Luan said.


Central bank holds steady on prime rate


The prime rate would be kept unchanged at 8 percent for the 11th consecutive month as part of the ongoing effort to help commercial banks lower lending interest rates, the State Bank of Vietnam said on Sept. 27.


The refinancing and overnight rates for electronic payments on the interbank market would also remain at 8 percent and the discount rate at 6 percent, the bank said.


Since the central bank gave the go-ahead for a negotiable interest rate mechanism in March, the prime rate had not had direct impact on the market lending interest rate that it used to, analysts said.


However, the benchmark interest rate was seen as a way of signalling the monetary policy direction of the central bank at any given period.


The Government has ordered commercial banks to cut lending rates to 12 percent and deposit rates to 10 percent in order to help enterprises access credit.


Prevailing loan rates now range between 12-15 percent.


Many banks expected Circular No13’s review to result in important changes that would loosen credit requirements and help banks have more capital on hand to make money and reduce interest rates.


Philippines remains Vietnam’s largest rice importer


The Philippines remains Vietnam ’s largest rice importer which accounts for nearly 41 percent of the country’s total export value, according to the Ministry of Agriculture and Rural Development (MARD).


In the first nine months of this year, Vietnam shipped a record 5.55 million tonnes of rice worth 2.56 billion USD, up nearly 12 percent in volume and 14.5 percent in value.


The price of Vietnamese rice in the first eight months reached 470 USD per tonne, up 3 percent over the same period last year. The price hike was attributable to scanty supplies resulting from consecutive natural disasters in large rice consumers and exporters such as China , Thailand and Pakistan .


The Vietnam Food Association (VFA) forecast that Vietnam is likely to export 7.2 million tonnes of rice this year.


According to the MARD’s Cultivation Department, the country’s total rice output in 2010 is expected to exceed 39 million tonnes. Of which, around 1.5 million tonnes of rice will be reserved for exports.


At present, it is necessary to encourage rice exports as the domestic rice supplies are abundant, the department said.


High-tech multinationals invest in VN


Many giant corporations like Intel of the US , Nidec of Japan and Robert Bosch of Germany are pouring more money into the high-tech field in HCM City.


Intel Vietnam , for example, has opened its plant, one of the largest in the Asia-Pacific region that makes and tests electronic chips.


The plant, which is located in the Sai Gon Hi-Tech Park (SHTP) in District 9, began operating its first production line for test purposes earlier this year.


Le Thi Thanh My, deputy head of the management board of the SHTP, said since July Intel had exported goods for more than 30 orders.


In addition, Germany Robert Bosch Vietnam next month will put into operation the Centre for Research and Production of Software, one of only two centres of the company in the Asia-Pacific region. The other centre, located in India , employs 70,000 engineers.


Vo Quang Hue, managing director of Robert Bosch Vietnam Company, said the company had also disbursed 24 million EUR (31.2 million USD) out of the total committed capital of 55 million EUR (71.5 million USD) for a project to develop an assembly-line plant to make automatic automobile gear boxes.


The plant, in Dong Nai southern province’s Long Thanh district, has a capacity of 2.3 million products per year.


Robert Bosch Vietnam will develop the second phase of the project and disburse the entire capital of 55 million EUR by 2015.


Vietnam is the only market in Southeast Asia in which Robert Bosch has invested in all three areas of operation, including sales, production and research.


According to Lu Thanh Phong, deputy director of HCM City ’s Department of Planning and Investment, of the 3,000 foreign direct investment (FDI) projects with a total capital of 37 billion USD in the city, Japanese businesses account for 397 projects. They operate in mechanics, spare parts production, food processing and others.


Japan has been cautious in expanding its investment in the hi-tech field in HCM City due to limited capital resources.


However, many Japanese corporations that produce semi-conducting spare parts had increased their investment in HCM City recently, Phong said.


According to Nagamori Shigennobu, chairman of the Japan-based Nidec Corporation, Nidec will continue to invest in research and development at the SHTP.


Nidec has developed three projects and recently received a licence for another project. Total capital for the projects at the park is 500 million USD.


Nagamori Shigennobu has also committed to encouraging small and medium-sized Japanese businesses to invest in the park. Most of the businesses make spare parts for Nidec products.


With more high-tech projects in the pipeline, Vietnam has more opportunities to promote investment and enhance its competitiveness capacity in the field.


Hue said Vietnam has advantages over other countries in the region due to its low labour costs and good location for transporting products to other countries in Southeast Asia and other parts of the world.


Vietnam should create the most favourable conditions for foreign corporations so that they can produce and export hi-tech products here, Hue added.


Taiwan, Vietnam move to increase trade ties


A trade exchange to promote trade for Taiwanese businesses in Vietnam market and other ASEAN markets opened in Ho Chi Minh City on September 27.


The event was held by the Taiwan External Trade Development Council (TAITRA) and the Vietnam Chamber of Commerce and Industry in Ho Chi Minh City (VCCI-HCMC).


Attending the event were 63 leading Taiwanese businses in cosmetics, household appliances, trade, electricity, energy and environment along with 100 Vietnamese businesses. They said it is a good opportunity for the two sides to share experiences and seek out partners.


At the event, Wayne Wu, deputy chairman of the TAITRA and Vo Tan Thanh, director of the VCCI-HCMC, spoke highly of bilateral trade ties between Taiwan and Vietnam over the past time and expressed their belief that the relationship will continue to develop in the near future.


Wayne Wu said that Vietnam is Taiwan’s important trade partner and largest importer, followed by mainland China and Hong Kong. So far, the Taiwanese total investment in Vietnam has reached 21,700 million USD and in the first eight months of the year, two-way trade reached 5,633 million USD.


VCCI-HCMC’s director Vo Tan Thanh said that at present, Taiwan (China) is the largest investor in Vietnam, both in registered capital and the number of projects.

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