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BUSINESS IN BRIEF 22/3   2011-03-23 - Viet Nam Net

ANZ Bank receives Asian Banker’s Best House Lending Award

The ANZ Vietnam has lately been named the Best House Lending Award by The Asian Banker Magazine, thanks to the bank's sharp growth rate in the segment with a variety of products and services to their customers.

The Asian Banker has selected ANZ Bank as the winner because of the sustainable business results, professional customers' database, customer satisfaction, and variety of the bank's products and services.

ANZ Vietnam is the first bank in the country to introduce and apply the new method of re-lending the capital.

This method allows customers to re-lend the amount that they have paid for the bank before in the house-lending packages with simple procedures lasting only four hours.

HCMC rejects 40 tons of chicken meat from US

The Vietnam’s Department of Animal Health’s VI Zone Veterinary Agency in Ho Chi Minh City has proposed a Vietnamese meat import company return 2 containers of chicken meats to America.

40 tons of frozen chicken meats in these two containers have been found to fail necessary veterinary standards.

Around 12,700 tons of frozen foods were imported to Ho Chi Minh City in the first 2 months of this year, 80% of which are chicken meats from America and Brazil, according to the agency.

Higher fuel prices proposed to fight smuggling

Oil companies and authorities in the southern provinces have recommended including price hike, to cope with the rampant smuggling of gasoline and diesel oil into Cambodia.

The lower fuel prices in Cambodia than in Vietnam has fueled smuggling along the border, which had gone out of control.

The Ministry of Industry and Trade said A92 gasoline in Vietnam is VND19,300 per liter while the price in Cambodia is around VND24,000.

The ministry Monday convened a meeting with authorities of southern provinces and some key fuel trading firms to seek solutions to combat gasoline and diesel oil smuggling from Vietnam to Cambodia.

Fuel smuggling is now active in Tay Ninh, An Giang, Dong Thap and Kien Giang provinces.

In the firs two months of this year, the police seized more than 25,000 liters of smuggled petrol.

Last year, more than 573,000 liter of petrol was seized from smuggler.

The severe petrol smuggling in the recent years has caused loss to many domestic industries as it declines total supply of petrol of Vietnam.

Price change to balance the difference between domestic and the world market price level of petrol can be the fundamental cure for the problem.

Textile-garment industry confident to earn $13 bln in export

Vietnam's garment and textile sector is very confident of fulfilling the export target of US$13 billion this year, according to an official from Vietnam Textile and Apparel Association (Vitas).

The annual target is within reach since in the first two months of this year, Vietnam's exports of the textile and garment industry gained more than $2 billion, with good signals from large markets such as the US, Japan, Europe, said Dang Phuong Dung, vice president cum general Secretary of Vitas.

Vietnam's garment and textile exports in the first two months of this year have risen very high over the same period, reflecting the sector's efforts in completing the targets in 2011, she added.

In particular, investors are moving away from investment in textile and dyeing to garment. Vietnam's garment sector is also looking to increase market share to other major markets.

In 2010, Vietnam exported $11.2 billion of textiles and garments. Particularly, textiles and garments exported to the US market reached more than $6 billion, up 22 percent compared to 2009.

Therefore, export market share of Vietnam's garment sector in the US market also increased from 4.6 percent to 5.1 percent. European markets remained difficult despite a growth rate of nearly 14 percent to $1.8 billion.

According to the Vietnam Textile and Apparel Association, in 2011 and a few years, Vietnam's garment and textiles are still having many opportunities to increase market share in Europe.

Vietnam is considered the 7th largest supplier of garments into this market.

Exports of garment and textiles to the Japanese market also rose 20 percent to $1.2 billion.

Coffee industry confers on growth path

Industry professionals offered solutions to the challenges faced by the Vietnamese coffee industry like poor quality, low competitiveness, inadequate distribution, and others at a conference held Sunday as part of the third annual coffee festival being held in Buon Ma Thuot.

The coffee industry needs bank loans at soft rates for its sustainable development, Luong Van Tu, chairman of the Vietnam Coffee and Cocoa Association, said.

This will fund the replanting of coffee plants that are old or damaged by pests which annually account for 30 percent of the total planted area, he said.

It can also be used to expand the area under the arabica variety of coffee which normally fetches up to 2.5 times the value of robusta, he added.

Branding and diversifying are keys to the industry’s growth, several delegates said.

The government needs to assist the coffee sector in tailoring its market strategies, standards, and technical requirements to global benchmarks, some said.

There should also be focus on electronic trading to strengthen Vietnam’s position in the global coffee market, others said.

Skilled workers are needed to bolster the growth of the industry, they said.

Vietnam is the world’s biggest exporter of robusta coffee with an annual production of around 1 million tons.

Furniture fair garners $10 mln exports

Around 100 export contracts worth US$10 million were signed at the three-day Vietnam International Furniture and Home Accessories Fair 2011 which wrapped up Monday, organizers said.

The fair, an annual event hosted by the Ho Chi Minh City Handicraft and Wood Industry Association, this year had more than 650 booths set up by 150 local and foreign manufacturers of wooden products, machinery, furniture, and home accessories.

Held at the Saigon Exhibition & Convention Center, Nguyen Van Linh Street, District 7, it attracted 1,000 visitors from 76 countries.

The organizers spent $200,000 to promote the event in the foreign media.

Vietnam to start soy processing, boost bean buys

Vietnam's soybean imports are likely to climb five-fold next year as the country starts first domestic bean processing facilities to feed its rapidly expanding demand, a U.S. soy industry official said on Monday.

Vietnam – with one of the fastest growing animal feed business in the world – is expected to buy soybeans from the United States and South America, which will come at the expense of soymeal being bought mainly from India and South America.

"It is going to change the country's import profile completely," John Lindblom, East Asia regional director of ASA International Marketing, told the Reuters Global Food and Agriculture Summit.

"I don't know how long it will take the plants to get to full capacity but they represent 40 to 45 percent of the meal consumption in Vietnam."

Agricultural processor Bunge Ltd is setting up a 3,000-tonne-per-day soybean crushing plant in the country, while domestic players are investing in a unit which will have a capacity of 1,000 tonnes a day.

Both facilities are expected to start operations later this year, Lindblom said in Singapore on Monday.

Vietnam's move to start soybean processing facilities comes as grain buyers rush to boost imports to ensure ample supplies in the face of higher food costs.

U.S. soybean and corn have climbed to multi-year highs in recent weeks, lifted by shrinking global supplies, although the grain markets have lost some ground on economic concerns arising from Middle East unrest and Japan’s devastating earthquake.

Vietnam, which buys soymeal for feeding pigs, fish and chickens mainly from India and South America has seen its annual feed production double to 8 million tonnes in 5 years.

"It is one of the most exciting markets. It is not the magnitude of China but the growth is faster than China," he said, referring to Vietnam's giant neighbor China, which is the world's biggest importer of soybeans.

"The business will be split between U.S. and South American beans. We will export around half and the rest will come from South America."

ASA International Marketing is working toward the promotion of U.S. soybeans and its members include farmers, soybean handlers, oilseed crushers, feed manufacturers, seed suppliers and government officials.

Lindblom said investors in Vietnam's soy processing business are also likely to benefit from prospects of an increase in vegetable oil consumption.

"In Vietnam per capita consumption of vegoils is still very low compared to other countries around," he said. "So investors definitely see a growth in vegoil consumption. Vietnam is importing all of their edible oil and refining it locally."

Sacombank to set up subsidiary in Cambodia

The State Bank of Vietnam late last week approved the Saigon Thuong Tin Commercial Bank (Sacombank)’s proposal to set up a subsidiary bank in Cambodia.

The subsidiary bank is named Sai Gon Thuong Tin Bank Cambodia Limited (Sacombank Cambodia), headquartered in the capital city of Phnom Penh.

Sacombank Cambodia is licensed to operate for 50 years under Vietnamese and Cambodian regulations.


Indian chemical makers look for Vietnam partners

More than 50 percent of Indian chemical manufacturers are looking for Vietnamese partners to set up joint-ventures in what is a promising market, Kishore M. Shah, President of the Indian Specialty Chemical Manufacturers Association, said.

He is in Ho Chi Minh City with a delegation of more than 40 chemical manufacturers from India for an exhibition of specialty chemicals at the Rex Hotel on March 14 and 15.

Most of them make organic and inorganic chemicals, industrial chemicals, and food additives used in the printing, dyeing, construction, rubber, and food industries.

Vietnam has highly developed rubber and garment industries but they are dependent on imports for specialty chemicals.

Last year Vietnam imported US$75 million worth chemicals from India, a 27 percent increase over the previous year.

Locals to be offered tours to Turkey, Israel

Turkey Airlines and Vietnamese partner, Huong Giang Travel will launch tour packages to Turkey and Israel at the end of this month.

The tours, titled “Hello Israel – Turkey,” seek to put the two Middle Eastern countries into Vietnamese tourists’ map.

HG Travel’s director Ngo Minh Duc said Turkey Airlines, which now offers weekly flights from Vietnam to Istanbul and Tel Aviv, would be the tours’ carrier while his company would design tours and help tourists with visa procedures.

A 10-day tour leaving from HCMC will cost US$ 3,719 and from Hanoi, US$ 3,949.

Turkish Airlines and HG Travel are also offering discount tours for tourists from HCMC to Bangkok.

A tour including a one-way ticket, airport taxes, breakfast for 2 days and 2 nights at hotel costs US$ 259 for economy class and US$ 409 for business class.

Experts proclaim benefits of commodity exchanges

Vietnamese exporters, producers and investors would benefit greatly from the establishment and effective management of commodity exchanges in the country, experts said yesterday.

Nguyen Duy Phuong, chief executive officer of the Viet Nam Commodity Exchange (VNX), said: "Vietnamese exporters are always put in a more disadvantaged position because they do not have reserves or tools to limit price volatility."

Addressing a workshop on enhancing State management of commodity exchanges and improving the regulatory framework, he said recent "complicated fluctuations in the economy" and climate change impacts had reduced the volume of agricultural products all over the world, making their prices unpredictable.

Furthermore, although Viet Nam was a leading exporter of rice, coffee, cashew nuts and pepper, it suffered from many problems in the chain of production and trading agricultural products, he said.

"Once a commodity exchange is established, it can link the production process with market demand. Furthermore, with direct participation of financial institutions and investment, the exchange can mobilise funds for production."

Phuong said VNX, established last year with a charter capital of VND150 billion (US$7.5 million), was an organised commodity exchange for all individuals and institutions.

VNX, whose operational model is similar to that in other countries, currently listed two products – coffee and rubber – and was expected to provide transaction contracts of steel next month, Phuong said.

He said it was necessary to invest in IT infrastructure and trading software to ensure accurate actions and connections between VNX and its members, investors, settlement banks, not to mention between Viet Nam and the rest of the world.

He stressed the need to co-operate with partners that have relevant experience in warehousing, logistics and inspection to maximise utilisation of resources.

Phuong said a consultation committee should be established to gather expert knowledge in different fields needed to "develop procedures, products, services and expand the market".

Pham Dinh Thuong of the Ministry of Industry and Trade's Department of Legal Affairs said there were more than 70 exchanges worldwide, more than 30 of which were located in Asia.

He said Vietnamese rice had already been traded on exchanges in India and Thailand, rubber on Japanese exchanges, and coffee on the US, Japan, the UK and Singapore exchanges.

Chong Kim Seng, chief executive officer of Malaysia Derivatives Berhard, shared experiences gained in developing Bursa Malaysia, an exchange holding company that operates a fully integrated exchange and offers a complete range of exchange-related services including trading, clearing, settlement and depository services.

Chong said that it was important to let people know what kind of commodities are traded on the exchange.

He also said unlike stocks that were localised or regionalised, commodities had to be globalised so there would be a lot of risk that can be avoided by buying insurance.

He said Malaysia's three strategic intents were to develop Malaysian Derivatives Industry, internationalise derivative exchange, and globalise crude palm oil, adding Malaysia had put its exchange on the global platform and set the goal of doubling its trading volume in three years.

The half-day workshop was organised by the Ministry of Industry and Trade's Domestic Market Department and the EU-Viet Nam Multilateral Trade Assistance Project III.

State Bank scrutinises foreign loans

The Ha Noi branch of the State Bank of Viet Nam has announced that it will monitor the lending and repayment of foreign loans as well as foreign transfers by organisations, agencies and individuals.

The move is designed to reduce the pressure that foreign currencies put on the economy and help curb inflation and stabilise the macro economy.

The branch has also instructed credit institutions to control lending and forex trading in accordance with the law. It has strengthened foreign exchange management to ensure foreign currency liquidity and to control the exchange rate to meet the needs of the economy, and increased forex sources for credit institutions.

The branch has instructed credit institutions to execute the exchange rate mechanism in accordance with regulations, actively improve internal rules and apply precautionary measures to cover the risks of forex trading.

Branch director Nguyen Thi Mai Suong said apart from monitoring, controlling and auditing, the branch would co-ordinate closely with relevant agencies such as the Ministry of Public Security, the Market Watch Team and the central bank to stabilise the currency market and monitor forex activities of organisations and individuals in Ha Noi.

HCM City furniture fair fosters lucrative deals

Export contracts worth US$10 million were signed during the international exhibition of furniture and home accessories FIFA 2011, according to the Handicrafts and Wood Industry Association of HCM City (Hawa).

Hawa said the organisation board spent about $200,000, or 30 per cent of their outlay on the expo, on promoting the exhibition in the world media. More contracts would eventuate as many MOUs were signed.

VIFA 2011, co-hosted by Hawa and Hawa Corporation, was held from March 11-14 at the HCM City-based Sai Gon Convention and Exhibition Centre.

HSBC named top private bank in Viet Nam

HSBC Bank (Vietnam) Ltd has been named the Best Overall Private Bank in Viet Nam in the Euromoney Private Banking and Wealth Management Survey 2011.

The survey evaluates banking services targeting high net worth clients, in which the respondents are private banks that identify the companies they perceive as the top providers of both competitive and non-competitive services.

Components of the survey include a bank's performance figures and the opinions of individual frontline banking staff on the relative merits and demerits of their banks and its competitors, according to an HSBC statement released yesterday.

The results of this year's survey were based on the votes of more than 1,500 private banking professionals across the globe.

Coal export prices to increase 8-22%

The export prices for coal dust products shipped to Asian countries, excluding South Korea and Japan, have been adjusted by up to 22 per cent, according to the Viet Nam National Coal and Mineral Industries Corporation.

Hon Gai/Cam Pha coal dust prices increased by 8.6 to 20.5 per cent. Vang Danh/Uong Bi coal, which contains a sulphur volume lower than 1.1 per cent, rose to 11.9 per cent from 9.5 per cent in prices.

Mao Khe coal saw the highest increase by 22 per cent, from US$54 to $66 per tonne of the coal dust No 11C. Coal dust No 12A's freight on board price at Cam Pha Port is up to $58 per tonne from $50.

French enterprises eye Viet Nam's airports

A delegation of 10 French companies specialising in airport infrastructure arrives in Viet Nam today to explore the domestic airline market. The visit is being hosted by the French Embassy's commercial agent, UBIFRANCE, and will last until Friday.

This is an opportunity for French companies (including ADPi, APAVE, Bouygues, DEXTRA, EGIS-Avia, GATE, HGH, Thales, Vinci Construction, WFS) to learn more about the potential for upgrading, renovating and building new airports in Viet Nam.

The visit offers a lucrative chance for both sides, with the foreign companies being able to provide hands on experience, from counselling and design, building and operating airports, to ground equipments, advanced security technology and air traffic management.

HCM City expo celebrates innovations

The sixth ProPak Viet Nam will return to HCM City to spotlight award-winning innovations by more than 240 companies around the world this month.

ProPak Viet Nam will be coupled up with PIA Viet Nam, the leading event for pharmaceutical manufacturing, instrumentation, laboratory and scientific equipment

The three-day event has attracted 243 companies from 28 countries and territories.

"Brand owners and processing and packaging professionals have embraced the ProPak Viet Nam and conference to penetrate the Vietnamese market to promote and sell their products in a more business orientated environment," Davis Aitken, managing director of Bangkok Exhibition Services, co-organiser of ProPak Viet Nam, said.

Many local companies would use the exhibition to discuss future deals, he added.

PIA Viet Nam 2011

PIA Viet Nam 2011 involves leaders and suppliers from all facets of process engineering, manufacturing, R&D, scientific and educational communities from Asia, Europe, the America and others.

The 2011 show comprises three components: Pharmatech Viet Nam 2011; Instrument Viet Nam 2011; and Analysis&Lab Viet Nam 2011.

A series of conferences will be organised during the event. For instance, the Viet Nam Association of Food Science and Technology will organise a conference on enhancing food marketing through packaging with sessions focusing on a range of topics that are top of the mind with packaging professionals, especially creativity and food safety.

Another conferences are the 4th Testing and Laboratories Conference by VinaLab; Innovation on turnkey Packaging Technology by SCC Conference and Department of Industrial Promotion Seminar and Benefiting from Free Trade Agreements by IE Singapore.

The events will be organised by Bangkok Exhibition Services Ltd, members of the Allworld Exhibition Alliance, in co-operation with the local partners VietCham Expo, member of the Viet Nam Chamber of Commerce and Industry at Sai Gon Exhibition and Convention Centre from March 23 – 25.

Interest rates to fall in second half 

Interest rates would remain high till the second quarter but would fall slightly in the latter half, vice chairman of the National Financial Supervision Committee Le Xuan Nghia said yesterday

Nghia told a conference on the macroeconomic situation and corporate tactics that the slight fall might be a result of the reallocation of financial resources, as well as the cuts of public investment and spending.

Instead, more capital would be spent on the private sector which would help cool down interest rates and cheer up stocks.

The vice chairman remained optimistic on the exchange rates issue, believing the forex market would soon turn stable.

He said the widening gap in the exchange rate wasn't due to the nation's trade deficit, but rather was caused by the country's high inflation rate compared to the US inflation rate.

"If the exchange rate followed the inflation rate, the dong would appreciate 13 per cent against the dollar.

"Due to the weakness of the US dollar against other currencies, our foreign exchange rate is now reasonable," he said.

The forex matter could settle down if the Government continued stabilising inflation. However, if the volatility continued it would be due to confidence, which couldn't be changed in a day.

Nghia said the gold price could peak at US$1,600 per ounce in June-July after which it may fall sharply, depending on the Chinese reserves policy.

If China determined to buy gold for its foreign reserves, the gold price would increase, he said, adding that if the US achieved positive business growth and the US dollar rose, the gold price would drop because China would buy gold from Chinese companies. Looking at the real estate industry, Nghia foresaw the Ha Noi property market rising again from September or October.

"The Vietnamese real estate market seems to have the most potential in the Asian region thanks to the fact migration to the cities is stronger than in Singapore and Hong Kong."

Nghia said there might not be a real estate bubble because the income per capita was still low.

New rules govern customs agents

Government Decree No 14/ND-CP, issued on February 16, specifies conditions for registration and operation of customs agents. Organisations or individuals wishing to act as customs agents must (i) complete business registration; (ii) be engaged in the business of providing freigh forwarding services or of providing customs services, with such business purposes stated in the business registration certificate; (iii) have at least one employee qualified to act as a customs agent; and (iv) have a computer network connection enabling connection with customs offices for conducting e-customs procedures through provincial-level customs departments which offer these procedures.

A customs agent must be a Vietnamese citizen with an intermediate or higher degree in economics or law and a customs operation training certificate, and must have worked for a licensed customs agent for at least three months.

Under the regulation, customs agents may sign contracts with owners of goods; request owners of goods to fully and accurately provide documents and information necessary for completion of customs procedures for each export or import lot; perform duties related to customs procedures as agreed upon in contracts, including making declarations and signatures, appending seals on customs declaration forms, producing goods for customs inspection, and paying taxes, fees and charges.

The new decree specifies that customs agents who properly observe the customs law would be commended and rewarded, while others face suspension from operations. The decree takes effect on April 1 and replaces Government Decree No 79/ND-CP of June 2005.

Other news

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Japanese nuclear catastrophe prompts Chinese to purchase salt in Vietnam   2011-03-23

Hanoi shares outpace HCM City   2011-03-23

Hanoi shares outpace HCM City   2011-03-21

Underground fees discouraged foreign investors   2011-03-21

BUSINESS IN BRIEF 21/3   2011-03-21

Hanoi’s CPI increases by 2.41 percent in March   2011-03-21

Underground fees discouraged foreign investors   2011-03-20

As one dollar market is cleared away, another appears   2011-03-20

Luxuries flood Vietnam despite price woes   2011-03-20

Plunging blue chips drag on Index   2011-03-18