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BUSINESS IN BRIEF 21/3   2011-03-21 - Viet Nam Net

Banknetvn, KFTC to boost cross-border transactions

 

Vietnam National Financial Switching Joint Stock Co (Banknetvn) and Korea Financial Telecommunications & Clearings Institute (KFTC) have signed a contract to boost cross-border ATM transactions in Hanoi.

 

Witnessing the signing ceremony was Bui Quang Tien, head of the Payment Department under the State Bank of Vietnam (SBV) together with other leaders and strategic members of Banknetvn.

 

The contract will enable card holders of Banknetvn's members to make transactions at ATM machines of KFTC's member banks in Korea and vice versa with a hope to bring more utilities for cardholders and increase the added value for member banks.

 

After the signing ceremony, the two signatories will carry out ATM connection projects, which will be inaugurated in early July this year.

 

The total number of ATM cards saw a rapidly growth during past time. So far, Vietnam has about 30 million cards, 49 ATM card issuers and more than 200 brands of cards issued in Vietnam.

 

Kohler opens biggest showroom in Vietnam

 

Leading American kitchen and bath product manufacturer Kohler unveiled its 5th and also biggest showroom in Vietnam last Saturday.

 

Located in Ho Chi Minh City, the 1600- meter-square showroom exhibits almost all Kohler products, including high-end as well as lower-priced items.

 

The showroom also offers interior design consultant services.

 

Since it entered the Vietnamese market in 2006, Kohler has opened 5 showrooms in Hanoi and HCMC with a local partner, Saigon Rita.

 

Ministry: CPI to increase two per cent in March

 

The Ministry of Industry and Trade expected the consumer price index in March to increase by two per cent due to a surge in the cost of electricity and petrol.

 

The domestic commodities market had suffered the impacts of a sharp rise in the prices of material and fuel, the ministry said.

 

Besides the cost of electricity and petrol, the high exchange rate between the Vietnamese dong and foreign currencies had also forced many traders to increase the cost of goods and services.

 

The country's consumer price index increased by 2.09 per cent in February against the previous month due to the high prices of most goods over Tet (lunar new year), announced the General Statistics Office (GSO).

 

The high CPI was due to greater consumption during the lunar new year, said the GSO. Other factors also contributed to the increase, including the Government's decision to increase the minimum wage, high bonuses for labourers and the high cost of many goods during the holiday in response to changes in the exchange rate and strong fluctuation of gold and US dollar prices.

 

February CPI rose by 12.31 per cent over the same period last year, up 3.87 per cent against last December.

 

Total retail sales of goods and services surged 23.7 per cent in the first two months of this year against the same period last year to VND304.3 trillion (US$13.9 billion).

 

Total retail sales would have risen by just 10.2 per cent if prices had not increased in the two months, said the ministry.

 

Cashew sector aims to earn $1.4b in exports

 

The cashew industry has set itself an export target of over US$1.4 billion this year, 32 per cent up from 2010, according to the Viet Nam Cashew Association (Vinacas).

 

Vinacas chairman Nguyen Thai Hoc, speaking at a recent conference in HCM City, said it was an ambitious target but achievable with sufficient support and clear policies, especially in the banking sector.

 

"The target is included in a cashew industry development strategy … whose main objectives are sustainable development and maintaining the world's number one cashew exporter status and high competitiveness. The draft will soon be submitted to the Government for approval," he said.

 

The strategy calls for keeping the area under cashew at 350,000 ha in 2011-15, with average productivity of one tonne per ha, and at 330,000ha by 2020 with productivity averaging around 1.4 tonnes.

 

"To improve the productivity and quality of processed cashew, the industry plans to increase mechanisation in processing to 70 per cent in 2015 and 90 per cent in 2020," Hoc said.

 

Training was another important objective of the industry which wanted to ensure between 1.5 million and 2 million workers receive professional training, he said.

 

To realise the targets, he said, the industry would have to take several measures, including maintaining the three main cashew growing areas – the south-eastern region which has 200,000ha under the crop, and the Central Highlands and the south-central coast which together have 150,000ha.

 

Based on the Government's cashew industry plans, provincial agriculture departments would be entrusted with restructuring cashew-growing areas with high-quality trees, he said.

 

He urged cashew processing firms to take concrete steps to procure raw materials.

 

For the domestic market, he said, processors needed to buy around 358,000 tonnes of cashew from domestic sources at reasonable prices to ensure they would have sufficient supplies while farmers would not suffer losses.

 

They would also have to increase cashew imports to an estimated 450,000 tonnes, 70 per cent of it from West Africa, 10 per cent from East Africa, 5 per cent from Indonesia, and rest from other countries, Hoc said.

 

He stressed the need for processors to continue modernising technologies and equipment to expand processing capacity, improve quality, diversify products, ensure hygiene and food safety, and protect the environment.

 

The US, the EU, China and Australia would remain the main export markets while trade promotions would be launched in the Middle East, Eastern Europe, Northeast Asia, and ASEAN member countries.

 

Vinacas' deputy chairman Nguyen Duc Thanh warned that the cashew industry would face many difficulties this year, including labour and raw material shortages, increasing costs, and power shortages.

 

To cope with them, cashew firms should co-operate closely, especially for purchasing raw cashew to ensure the whole industry would benefit.

 

Last year Viet Nam exported 198,000 tonnes of cashew for more than $1.13 billion, a year-on-year increase of 11.8 per cent in volume and 34 per cent in value.

 

VFA decreases floor price of export rice

 

The Vietnam Food Association (VFA) has decided to decrease the floor prices for rice exports.

 

Accordingly, from March 12, five percent broken rice stands at US$520 per tonne (down US$20) while 25 percent broken rice sells for US$480 per tonne (down US$10).

 

This is the fifth time the VFA has adjusted the floor prices of export rice since early 2011.

 

Meanwhile, the purchase price of all kinds of rice in the Mekong Delta region is going up. Five percent broken rice is bought at VND9,450-9,600 per kilo, 15 percent broken rice at VND8,900-9,050, and 25 percent broken rice at VND8,600 per kilo.

 

Vietnam, UK promote cooperation in finance and investment

 

A delegation of businesses from the UK led by the Lord Mayor of the City of London, Alderman Michael Bear, will visit Vietnam from March 19-23 to seek investment opportunities and strengthen cooperation in finance and trade.

 

At a press conference on March 11, Mayor Michael Bear said that the delegation is scheduled to work with Vietnamese government officials and the Governor of the State Bank of Vietnam, Nguyen Van Giau. He will also attend a round-table conference in HCM City on developing urban areas at the HCM City Securities Trading Centre.

 

Mayor Bear said that he wanted to visit Vietnam because it signed an agreement with the UK to develop their relationship into a strategic partnership when Deputy Prime Minister Pham Gia Khiem visited the UK late last year. This partnership has also opened up many opportunities for both nations to strengthen bilateral investment and trade.

 

Mayor Bear said London can provide solutions for developing the economy. Businesses in London have capital sources and are willing to provide technical expertise and management experience for Vietnamese partners.

 

In response to Vietnam News Agency reporters in the UK, Mayor Bear said the Vietnamese market is very important, adding that two-way trade turnover reached only GBP1.2 billion. He expressed wish for that figure to double or triple in the future.

 

He also emphasized that the UK has a lot of experience and financial products to offer Vietnam for developing its financial sector. “Vietnam has many major development programmes and we want to get involved”, he added.

 

During his visit to Asia, he will also pay a working visit to Malaysia and Taiwan.

 

Vietnam, UK promote cooperation in finance and investment

 

A delegation of businesses from the UK led by the Lord Mayor of the City of London, Alderman Michael Bear, will visit Vietnam from March 19-23 to seek investment opportunities and strengthen cooperation in finance and trade.

 

At a press conference on March 11, Mayor Michael Bear said that the delegation is scheduled to work with Vietnamese government officials and the Governor of the State Bank of Vietnam, Nguyen Van Giau. He will also attend a round-table conference in HCM City on developing urban areas at the HCM City Securities Trading Centre.

 

Mayor Bear said that he wanted to visit Vietnam because it signed an agreement with the UK to develop their relationship into a strategic partnership when Deputy Prime Minister Pham Gia Khiem visited the UK late last year. This partnership has also opened up many opportunities for both nations to strengthen bilateral investment and trade.

 

Mayor Bear said London can provide solutions for developing the economy. Businesses in London have capital sources and are willing to provide technical expertise and management experience for Vietnamese partners.

 

In response to Vietnam News Agency reporters in the UK, Mayor Bear said the Vietnamese market is very important, adding that two-way trade turnover reached only GBP1.2 billion. He expressed wish for that figure to double or triple in the future.

 

He also emphasized that the UK has a lot of experience and financial products to offer Vietnam for developing its financial sector. “Vietnam has many major development programmes and we want to get involved”, he added.

 

During his visit to Asia, he will also pay a working visit to Malaysia and Taiwan.

 

Krong H’nang Hydroelectric power plant inaugurated

 

The Krong H’nang hydroelectric power plant was inaugurated in Ealy commune, in Song Hinh district, of the south central coastal province of Phu Yen on March 12.

 

The factory has two turbine groups with a design capacity of 64 MW and an annual output of nearly 250 million kWh of electricity. Construction on the plant began in May 2005 with total investment capital of VND1,477 billion and Song Ba Joint Stock Company as the main investor.

 

After five years of construction, the main investor put the first turbine group into operation in June 2010 and the second in September. Both are now connected to the national power grid.

 

To date, the Krong H’nang has provided the national power grid with 212 million kWh of electricity. This is the third hydroelectric plant in Phu Yen province to be officially put into operation after the Song Hinh and Song Ba Ha hydroelectric plants.

 

A Sales Week for Consumers opens in Hanoi

 

“A Sales Week for Consumers” opened at Pico Plaza, 173 Xuan Thuy Street, Cau Giay district, Hanoi on March 12 as part of “Action for consumer rights” programme. 

 

During the week organised by the Hanoi municipal People’s Committee, and consumers will enjoy attractive customer care programmes at many supermarkets in Hanoi from March 13-20 such as Pico Plaza, Viet Long Electronic Centre, Hapro, and Co.op mart. For example, shoppers will be offered discounts on goods and receive free transportation fees, and gifts.

 

According to the organizing board, the “Action for consumer right” programme aims to raise awareness of the Law on Consumer Protection, and raise businesses’ awareness about respecting consumers in their production and business activities, thereby improving the important role of related organisations in the protection of consumer rights.

 

In addition to the Sales Week for Consumers, the programme will continue with other activities such as disseminating the Law on Consumer Protection which will take effect on July 1, 2011 through training courses at districts and wards in Hanoi as well as “Vietnamese Businesses for Consumers” trade fair to be held in June and a “Day to buy goods over the phone” in July.

 

Vietnam grows more attractive for Russian visitors

 

Vietnam has become an increasingly attractive destination for Russian visitors, according to the Voice of Russia.

 

Vietnam ranked on par with Mexico, Thailand, Portugal and Cuba as the nations most visited by Russians in 2010.

 

It is a popular trend for Russian people to go abroad and last year, the number of Russians travelling abroad increased by one-third. Vietnam is now listed among the leading nations most attractive to Russian tourists.

 

The country’s reasonable prices, safety and convenient services are all reasons to travel to Vietnam year round.

 

Favourite Vietnamese destinations for Russian visitors are Phan Thiet and Nha Trang cities.

 

Experts discuss cloud computing

 

Cloud computing would soon become the most important technology used in all aspects of life, experts said at conference held in HCM City last Friday.

 

"In the near future, cloud computing will help enterprises and organisations save a lot of expenditure for IT infrastructure and energy and provide more suitable applications for users," said Phan Thanh Son, chief technology officer of Cisco Systems Viet Nam.

 

Cloud computing delivers infrastructure, service and software on demand via the internet.

 

Traditional IT computing needs dedicated consumption, traditional hardware procurement, manual addition of new services and manual repair of system failure. Its provisioning is made on a monthly basis and costs based on incremental purchases.

 

On the other hand, cloud computing offers shared consumption, self-service for easy use, scale on demand, automated recovery, provisioning on minutes and cost based on pay per use.

 

Other companies like EMC, VMWare, ADC Krone, Panduit, NetApp and Hitachi Data Centre also shared their experiences on developing cloud computing for different tasks and settings.

 

Cisco, which organised the conference, said it planned to make it an annual event, providing enterprises with the opportunity to deploy cloud computing applications effectively.

 

In related news, Viet Nam's IT giant, Financing and Promoting Technology Corporation (FPT) has announced it will launch its cloud computing products based on the Microsoft platform at the end of this year.

 

Late last year, the corporation had set up a data centre with cloud computing applications. The company said it planned to release some management software and other products like eTax, eCustom, eHospital and eClinic into the local market soon.

 

Lach Huyen port close to reality

 

Vietnam and Japan will this month sign a loan agreement for the construction of the biggest port in northern Vietnam.

 

Chairman of Haiphong People’s Committee Duong Anh Dien said the detailed design for the Lach Huyen international port would be released between March and November 2011.

 

According to the Japanese embassy in Vietnam, both sides have been preparing an agreement document for the extension of the Lach Huyen port’s scope, which was proposed by the Japanese investors in order to receive big vessels in the future.

 

The proposal was already approved by the Vietnamese government.

 

Japanese contractors including Mitsui O.S.K Lines (MOL), Nippon Yussen Kaisha and Itochu recently suggested Vietnamese authorities to adjust the project’s scope in consideration of the future cargo throughput forecast.

 

Accordingly, the first two terminals are designed for accommodation of 100,000 tonne vessels with standard channel of 160 metres in width, 14m in depth, breakwaters of 760m and 3,200m in length.

 

The Vietnamese government allowed a pilot investment form of public-private partnership (PPP) to build the two first terminals.

 

Construction on the two terminals was initially scheduled for 2010, but due to some difficulties in arranging funds and changes in scope, the works have been delayed until this year.

 

The Vietnamese government will use a Japanese ODA loan for implementation of the project. It includes component A – infrastructure comprising channel, waterfront and breakwaters with Vinamarine the investor and component B – two terminals constructed by Mitsui O.S.K Lines (MOL), Nippon Yussen Kaisha and Itochu.

 

Japan’s ambassador to Vietnam Yasuaki Tanizaki said Vietnam had no first class international ports. “The existing port in Haiphong is not able to receive big vessels because the depth of water is only 7m. In that sense, the Lach Huyen port construction is a very important project in Vietnam that Japan decided to provide ODA for development,” the ambassador said.

 

The three Japanese firms recently set up a joint venture called as Molnykit Co., Ltd. to participate in the first two berth construction portion, different from their original plan to join in the project as individual investors.

 

“That was actually a technical issue. The three firms established just one company which is financed by those three ones. In reality, Mitsui O.S.K Lines (MOL), Nippon Yussen Kaisha and Itochu are de facto in charge of developing the terminals,” Tanizaki said.

 

The ambassador stressed that total portion of private finance in the component B construction had not been decided. Bidding procedures are planned from November 2011 to September 2012 and construction of the state works is from September 2012 to December 2015.

 

The first berth will have its construction completion in 2014 and start commission in the same year, while the second berth’s operation being scheduled for 2015.

 

According to Dien, prompt completion of the project would ease the burden for the inland port in front of the rapid increase in cargo volumes, while accelerating economic exchanges of the northern key economic area and Haiphong as well within the region and the world.

 

Haiphong has so far received up to $600 million in disbursement from the Japanese ODA for local socio-economic development. Overall investment of Japanese enterprises in Haiphong had accumulated to $900 million until late last year, accounting for 25 per cent of total foreign direct investment in the city.

 

Honda Vietnam cars escape global recall

 

Honda Vietnam-produced Civic sedans are not subject to a global recall of many thousands of vehicles the Japanese firm announced in early March.

 

Honda is to recall about 52,000 of its Civic hybrid vehicles globally on concerns over problem in a voltage converter relaying power from the motor assist system to the vehicle’s electrical components could fail and cause headlight outages and engine stalls.

 

Subject to the recall are model year 2006-2007 Civic hybrid vehicles which have been sold in the United States, Japan and other countries. Notices will be sent to clients from March 18 and the problem will be fixed free of charge.

 

Honda Vietnam was assembling Civic sedans, but not a hybrid model, in the country, according to the Japanese invested firm.

 

The company is also importing other vehicles into Vietnam mostly from Thailand, the manufacturing hub of Honda which supplies for the majority of Asian and Oceania markets.

 

It has not yet received any notices from Japanese headquarters of any cases in the Vietnamese market so far.

 

Honda Vietnam experienced a 20 per cent month-on-month fall in sales in February to 371 units from 465 units in January.

 

More power cut misery

 

Increased power prices and abrupt electricity cuts are tormenting many enterprises in Vietnam.

 

Nguyen Huu Quang, deputy general director of Vietnam Cement Industry Cooperation, said the recent power price hikes forced the state-owned corporation to add at least VND20,000 ($1) to the price of one tonne of cement.

 

“But, from April we will have to further add VND80,000 to the price of a tonne of cement due to coal and petroleum price escalation,” he said.

 

The government from last March raised electricity prices by 15.3 per cent on average, from VND1,077 (5.2 cents) to VND1,242 (6 cents) per kWh.

 

However, Quang claimed the sudden power cuts were the most damaging.

 

“We will suffer from a 20 per cent drop of our needed power this year. But, instead of power cuts, Electricity of Vietnam (EVN) should diminish the power volume provided to us, so that we will be able to ensure stable production. Otherwise, the local cement market will be affected. A sudden power cut within an hour can result in thousands of dollars in losses to us,” he said.

 

Vietnam Steel Association chairman Pham Chi Cuong shared the view. He said the steel industry was not scared of power price hikes, but of “sudden power cuts”, which caused heavyweight financial damages.

 

“For example, when steel is being manufactured, a sudden power cut can freeze the process. Thus, the manufacturing process must be started from scratch,” Cuong said.

 

Hanoi’s Planning and Investment Department vice director Nguyen Van Tu said that EVN needed to give power-providing priorities to enterprises producing export-oriented products and products which could replace imported ones.

 

“If power shortages continue attacking the city’s exporters, they will not be able to boost exports and the city’s economic picture will be darkened with a bigger trade deficit,” Tu said.

 

Nguyen Thanh Hoa, vice head of the Ministry of Industry and Trade’s Planning Department, said that power provision priorities would be given to enterprises producing export-oriented products and energy-saving projects.

 

In early this year, EVN deputy director Duong Quang Thanh said that Vietnam would face a power shortage of 3 billion kWh this year due to scarcity of water in all reservoirs.

 

EVN said additional charge this year was expected to reach 117.6 billion kWh, a rise of 17.63 per cent against last year.

 

EVN reported that during 2011’s first two months, in order to meet the country’s year-on-year 13.5 per cent increase in demand, EVN produced nearly 6.4 billion kWh, up 10 per cent year-on-year and purchased 8.98 billion kWh, up 14.4 per cent. Some 956 million kWh was imported from China, up 29 per cent against the same period of 2010.

 

Foreign exchange rates eat into car sales

 

Unfavourable foreign exchange rates in February have taken a toll on the sales of imported automobiles.

 

Total sales by members of the Vietnam Automobile Manufacturers Association (VAMA) reached just 7,889 units in February, a decrease of 24 per cent from January sales, with passenger car and SUV sales declining by an even more substantial 35-37 per cent, according to VAMA representative Nguyen Anh Tuan.

 

January auto sales had totalled 10,424 units, an increase of 48 per cent over the prior January but still 17 per cent lower than sales in December 2010.

 

Imports of completely-built units (CBUs) fell from 6,100 units in January to just 4,500 in February, according to figures from the General Statistics Office.

 

Meanwhile, marques such as Toyota , Ford, GM Daewoo, Mercedes-Benz, BMW and Hyundai have all increased their retail prices substantially since the devaluation of the Vietnamese dong against the US dollar last month.

 

Toyota 's sticker prices have risen by VND34-101 million (1,619-$4,809), while Ford has hiked prices by 37-64 million VND (1,761-3,047 USD) and Honda by 13-32 million VND (619,000-$1,523) per vehicle. A buyer of a Honda Accord 3.5 AT, for instance, can now expect to pay VND50 million more.

 

Tran Kien, a car dealer on Le Van Luong Street in Hanoi , said auto sales slowed substantially in February. Many automobile dealers were also ceasing imports of new cars with the aim of first selling existing inventories, he said.

 

The continued rise of the dollar, higher interest rates on consumer loans, and higher VAT and registration fees would add up to a sluggish car market this year, Kien predicted.



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