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BUSINESS IN BRIEF 2/10   2010-10-02 - VNS

Retail sales soar 25% in first nine months


Total retail sales revenue of commodities and services in the first nine months of the year increased 25.4 per cent year-on-year to more than VND1,146 trillion (US$58.7 billion), according to the General Statistics Office (GSO).

September’s revenue alone increased 2.93 per cent against the previous month to nearly VND134.9 trillion ($6.9 billion), the GSO said.


The trade sector reported a year-on-year revenue surge of 26.4 per cent to VND905.1 trillion ($46.4 billion), accounting for 79 per cent of the country’s total sales revenue during the nine month period.


The hotel and restaurant sector saw a rise of 21.8 per cent to VND126.25 trillion ($6.47 billion). The increased figures for the tourism and service sectors were 37.4 per cent and 20.5 per cent to VND12.16 trillion ($625.6 billion) and VND102.6 trillion ($5.26 billion), respectively.


The surge’s retail sales revenue was due primarily to the organisation of promotional programmes, including the Sales Promotion Month 2010 in HCM City, one of the country’s largest shopping centres.


The HCM City’s September programme saw the participation of nearly 600 businesses, mostly involved in garments and textiles, food and beverages, home utensils and tourism services, with roughly 2,000 sales promotion points. Roughly 1,500 products received 10-50 per cent reductions, 90 per cent of the products were high-quality Vietnamese goods.


According to the HCM City Department of Industry and Trade, sales of businesses taking part in the Sales Promotion Month increased 10-15 per cent compared to the same period last year. The number of consumers also rose sharply.


Director of the Ministry of Industry and Trade’s Domestic Market Department Truong Quang Hoai Nam said foreign investors continued to consider Viet Nam a promising investment destination.


Meanwhile, global ratings agency AT Kearney predicted that Viet Nam’s retail industry would grow over the next few years, and that consumer spending would rise above its current level of 70 per cent of household income.


The Ministry of Industry and Trade forecast that the country’s retail sales and services revenue would soar 22 per cent from a year earlier to $78.9 billion.


US reduces anti-dumping tariff on Vietnamese shrimp


The US Department of Commerce (DOC) has announced the final adjustment for the anti-dumping tariff on Vietnamese frozen shrimp from February 1, 2008 to January 21, 2009.

The Vietnam Association of Seafood Exporters and Processors (VASEP) said that the tariff is lower than the rate that DOC announced in August.


The tariff was reduced from 2.96 percent to 2.9 percent from shrimp of the Minh Phu Seafood Joint Stock Company, from 5.58 to 4.89 percent from products of the Nha Trang Seaproduct Company, and from 4.27 to 3.92 percent for other companies.



Car imports fell 20% last month


As many as 4,000 cars were imported to Viet Nam in September, worth US$90 million, according to the General Statistics Office (GSO) estimate.



If these estimates prove correct, it would signal a decrease in both import volume and value for a second consecutive month, the GSO reported.


Compared with last month, the numbers marked a 20 per cent decrease in volume and 2.17 per cent decline in value.


"This month, auto traders have limited their imports as they have had to balance their stockpiles of imported vehicles which were imported several months ago," said Tran Thai Duong, head of the Marketing Department under the Kylin GX668 Joint Stock Company.


He added that companies had not imported large volumes of vehicles as they now had to pay all taxes in advance, following a Government crack-down on tax evasion in the car sales sector.


"Part payment of taxes such as VAT, import duties, and special consumption taxes in arrears is no longer allowed," Duong said.


Duong added that although import volume had decreased, there had been some positive signs that indicated consumers were still interested in new car purchases. These cars would be imported in the next few months, so import volume would increase.


Nguyen Trung Hieu, an official from the Viet Nam Automobile Manufacturers’ Association (VAMA) said in the last months of this year, the volume of imported auto would increase.


Last month, the GSO estimated that the number of autos imported to Viet Nam totalled 4,000 units, worth US$78 million.


However these estimates proved inaccurate, and the country had imported 5,000 units worth $92 million.


The GSO explained that its estimate was based on many factors, including the number of vehicles imported in the first half of August.


However, it added, the changes in the last half of the month had been a surprise, so that an exact estimate was difficult to predict.


In previous months, the volume of imported cars had declined, but import turnover had continued to increase.


The number of cars imported to Viet Nam from May to July stood at 5,300 units, 4,600 units and 4,000 units, respectively.


In May and June, car imports cost the country $89 million each, with $96 million in July.


Experts attributed the increase in value to the new trend for luxury cars among domestic consumers.


Domestic gas cost rises for second successive month


Higher world prices and the depreciation of the dong forced retailers to increase the price of domestic gas from yesterday.


The price of a 12-kilo Sai Gon Petro tank had been increased by VND14,000 to VND272,000, said its business division deputy director Do Trung Thanh.


Other gas retailers in HCM City, including VT gas and Gia Dinh Gas, planned to increase their prices.


In Ha Noi, many retailers raised the price by VND15,000 to VND311,000 for a Petrolimex 12-kilo tank, to VND299,000 for a PetroVietnam Gas 12-kilo tank, and to VND316,000 for a Shell gas tank.


The global gas price for October has already increased $52.5 per tonne to $692.5 compared with September when it increased VND14,000-15,000 per 12-kilo tank.


The increase is attributed to the high price for crude oil and winter demand.


Decree No 107 issued yesterday requires all cooking gas distributors to maintain a storage tank with a capacity of at least 800cu.m; a standard extraction system and at least 300,000 gas tanks that meet the necessary quality standards. Each distributor is also required to have a network of at least 20 dealers.


VN firms may qualify for S Korea exchange listing


About 22 Vietnamese companies currently listed on domestic stock markets could qualify to list shares on Korean stock exchanges, according to an assessment by South Korean-invested Woori CBV Securities Co published at a conference here on Wednesday about raising capital on Korean markets.


Vietcombank, Vinamilk, real estate developer Hoa Phat Group, software giant FPT and the PetroVietnam Technical Services Co were among those that could list in South Korea, the assessment found. Vietnamese firms could benefit greatly by listing on the Korean market, said Lee Daegyu, the assistant director of listing promotions for the Korean Stock Exchange.


Besides raising capital through initial public offers, the companies could access investment opportunities in South Korea and more effectively market themselves to Korean investors, Lee said.


The Korean Exchange was working to attract more foreign companies to list, Lee added. In 2007-10, 15 foreign firms listing shares on the exchange, with 13 coming from China, one from Japan and one from the US.


The Korean Exchange has two separate markets, the Kospi and Kosdaq stock exchanges.


A foreign firm wishing to list on Kospi needs a total market capitalisation no less than US$16.6 million, while a listing on Kosdaq requires a firm to have capitalisation in excess of $7.5 million.


Since early 2009, the success of Government bond issues overseas has open more doors to local companies to raise capital on overseas markets. HCM City-listed property trader Vincom, for instance, has offered $80 million in convertible bonds overseas.


Convertible bonds could become the most favourable channel for Vietnamese companies to raise capital overseas, affirmed the director of Woori’s HCM City branch, Lim Song Hak.


But the head of market development for Viet Nam’s State Securities Commission, Nguyen Son, warned that regulations on securities offerings, listings and disclosure on overseas markets still remained difficult for Vietnamese firms.


The commission was drafting an instruction to support local firms seeking to list overseas, Son said.


Textile firm Mirae Joint Stock Co, currently listed in HCM City, is the only firm now actively seeking to comply with listing procedures for the Korea Exchange.


Mirae received permission from the Vietnamese Government in May 2009 to pursue the overseas listing.


Trade promo push in Mexico, Canada


The Ministry of Industry and Trade will speed up trade promotion activities in Mexico and Canada in the fourh quarter.


The ministry has issued instruction No8/CT-BCT about pushing exports and enlarging markets to meet the country’s annual export target of US$60 billion.


Sectors involved are mainly garments and textiles, footwear, seafood, wood products, arts and handicrafts and processed food.


Promotion activities were scheduled to take place mainly in Toronto and Mexico City.


The North American Free Trade Area, with a population of 520 million, is considered as a key export market of Viet Nam. Canada and Mexico are big markets for Vietnamese goods behind the US, which accounts for 82.5 per cent of Viet Nam’s export turnover to the area.


Vietnamese Ambassador to Mexico Pham Van Que said two-way trade between Mexico and Viet Nam surged from $60 million in 2001 to nearly $720 million last year, $600 million of which were exports to Mexico.


The main exports were garments, footwear, seafood, printing-machines, sports equipment and wooden products.


Que expected that following the first session of the Mexico-Viet Nam Joint Business Committee in Mexico recently, trade between the two countries would increase significantly.


He said the session was the start of a partnership for sustainable development between the two countries.


Last year’s trade turnover between Viet Nam and Canada reached $1.3 billion, $1 billion of which were Viet Nam’s exports to Canada.


The ministry predicted that the country’s export volume to Mexico and Canada would rise dramatically in the next three months, especially of vegetables and fruits.


Viet Nam shipped fruit worth $2.8 million to Mexico and Canada in July this year alone, up 21.7 per cent on the same period last year.


Fruit and vegetable export prices rise


Fruit and vegetable export prices increased by 0.9 per cent against August, this year. Prices of fruit and vegetables saw a 7.8 per cent year-on-year increase according to Viet Nam Fruit and Vegetables Association (Vinafruit). Prices of some food items, such as fresh chilli, dry garlic, and dragon fruit all registered significant increases.


Vinamilk ups purchase price of milk


The Viet Nam Dairy Products Joint Stock Company (Vinamilk) on September 30 increased its purchase price of milk from farmers by VND1,000 per kilogramme.


The move aims to help farmers overcome difficulties due to rising animal feed costs while encouraging them to improve both yield and quality of milk from their herds, the company said.


The company will now buy milk for between VND9,250 and VND10,250 per kilo depending on the location, it said.


Air Mekong test flies City to Phu Quoc route


The Mekong Airlines Joint Stock Company (Air Mekong) ran a test flight to carry 60 passengers from HCM City to Phu Quoc Island on Tuesday.


Following the trial, the carrier will officially launch flights from Ha Noi-HCM City-Phu Quoc three times a day from October 8. It is expected to open two additional direct flights between Ha Noi-Phu Quoc and HCM City-Phu Quoc in November.


VDB invests $62m in Phuoc Dong


Sai Gon Investment Holding Corporation (SVI), (a member of Viet Nam Rubber Group – VRG) and Viet Nam Development Bank (VDB) signed a contract on Wednesday to provide VND1.2 trillion (US$62 million) for the Phuoc Dong service-urban-industry complex zone in the southern province of Tay Ninh.


The VDB will provide VND1 trillion ($51.28 million) for industrial zone infrastructure construction, covering an area of 3,200 ha with total capital of $1 billion.


23-storey Capital Tower opens in Ha Noi


The 23-storey Capital Tower opened its doors on Wednesday on Ha Noi’ls Tran Hung Dao Street, announced project investor Thu Do Tourism, Trading and Investment Joint Stock Company.


The VND500 billion (US$26.3 million) building covers 30,000sq.m. It is expected to help meet the growing demand for international standard office space .


Savills to act as Hapro’s exclusive leasing agent


Savills Viet Nam Ltd Company was officially appointed as exclusive leasing agent for the Hapro Centre retail mall and offices which are owned by Ha Noi Trade Corporation (Hapro).


The Hapro Centre complex, located on Cat Linh Street, Ha Noi, is currently under development with an estimated investment capital of VND293 billion (US$15 million).


It comprises five retail floors and nine floors of grade B office space. Each floor includes more than 1,000sqm of space.


Upon completion, which is expected in late 2011, the centre will provide a total gross area of 17,730sqm and nearly 5,000sqm of parking space.


New Ana Mandara beach resort opens in Hue


The Ana Mandara Hue Resort officially opened yesterday on Thuan An Beach, a 20 minute drive from the centre of Hue.


This is the first project managed by Hotel Collection Indochine, a new Vietnamese hotel management company.


The company plans to inaugurate its second resort, Ana Mandara Ninh Binh, south of Ha Noi, in January.


Novaland begins Central Plaza construction


Property developer Novaland recently began construction of its Central Plaza, which will be comprised of four 31-and 35-storey towers in District 7.


The US$500 million project is the second phase of the larger Sunrise City project.


Upon its completion, Sunrise City will include 12 towers with 1,800 apartments, and a 70,000 sq.m shopping centre. The company has already completed 70 per cent of the first six towers, comprising 752 apartments and 21,000 sq.m of retail space. The second phase is scheduled for completion in 2012.


Canal Park development project building progresses


The new Canal Park development project will include two 11-storey towers with apartments ranging in size from 86 sq.m to 272 sq.m. Construction is estimated to be completed at the end of 2011, according to investor Berjaya-Handico 12.


Phase one of the project, the underground portions of the complex, have already been completed.

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