BUSINESS IN BRIEF 25/10 Border fair promotes Vietnam-Laos trade exchange A week-long border trade fair in the northwestern province of Son La has attracted tens of thousands of visitors. More than 100 businesses from Son La and Hoa Binh provinces, Hai Phong city and Laos’ Houaphanh and Oudomxay provinces brought to the fair a wide range of products from garment, electronic products, household goods, and basic foodstuffs to farm tools and telecommunications services. The event was a good venue for them to promote trade market expansion and linkage between themselves and local retailers. The fair also helped residents in the border areas access quality goods at reasonable prices. Local people had the chance to introduce their agricultural and brocade products to the Lao market. The fair closed on October 23. Japan IT Week opens in Hanoi More than 80 meetings between Japanese and Vietnamese businesses have been scheduled during the 2013 Japan IT Week, officially launched in Hanoi on October 23. The four-day event includes seminars on cooperation between Japanese and Vietnamese businesses, an offshore business development forum, a writing contest on applying smartphone and tablet technology, a job bazaar, partnership and networking mixers, and a series of cultural and tourism exchange activities. Vietnam has grown into Japan’s second biggest information-technology partner over the past decade, trailing only China. With competitive cost burdens, highly qualified human resources, and preferential tariff and tax schemes, Vietnam has welcomed investment from nearly 80 Japanese IT companies. Another 20 Japanese companies are expected to enter the Vietnamese market later this year. According to a Vietnam Software and IT Services Association (VINASA) survey, 61 percent of business respondents cited language barriers as the most constricting limit on Vietnamese- Japanese cooperation. The survey noted businesses that began cooperating with Japan in 2012 have enjoyed high growth rates of 30–50 percent. Japan Information Technology and Services Global Affairs Vice President Junko Kawauchi said Japanese businesses and their employees feel comfortable working with Vietnam. Ms Kawauchi acknowledged improvements are needed in project management capacity, management quality, and the English and Japanese language abilities of both Vietnamese and Japanese engineers. VINASA Vice President and General Secretary Pham Tan Cong affirmed Vietnam’s IT development is on the right track. The Japanese software market, with annual expenditure exceeding US$130 billion, is the fourth largest in the world and is constantly seeking foreign partners. Over the past ten years, Vietnamese businesses have reaped impressive revenues and international prestige from participating in the VINASA’s Japanese market programmes. The current Japanese demand for international partners offers Vietnamese businesses unparalleled opportunities to push IT cooperation to higher levels. Nghi Son EZ calls for investment The Nghi Son Economic Zone (EZ) with a focus on heavy and basic industries will become the locomotive for economic development in the northern central region, Deputy Prime Minister Nguyen Xuan Phuc said at a forum to promote investment in the EZ on October 23. He stressed that the EZ, situated to the south of the central province of Thanh Hoa, 200km from Hanoi, enjoys a convenient location easily accessed by land, railway, sea and air. Thanh Hoa province is well positioned to expand trade exchange with neighbouring provinces and the whole country and with an international border gate with Laos, the province can reach out to other ASE AN member countries. The Deputy PM affirmed that the Vietnamese government always creates the most favourable conditions for foreign investors while continuously improving its infrastructure and legal system, and renovating the administrative procedures in order to facilitate investors in Thanh Hoa in particular and Vietnam in general. He noted that Thanh Hoa has emerged to be the sixth most popular destination in the country for foreign investors, attracting 43 projects worth US$12.3 billion, of which 15 projects worth nearly US$10 billion are in Nghi Son EZ. Deputy PM Phuc added that the Government highly valued the province’s comprehensive development, including policies on investment attraction, especially quick site clearance for investment projects. On the occasion, the Thanh Hoa provincial People’s Committee granted investment licences to 20 projects with registered capital of over US$4.7 billion. Vietnam Motor Show 2013 opens in HCM City The 9th Vietnam Motor Show themed “Together to Success” opens at the Saigon Exhibition and Convention Centre (SECC) and will last until October 27. The fair attracts the participation of 15 leading automobile makers in the domestic market, such as BMW, Audi, Mercedes-Benz, Ford, Land Rover, Toyota, Nissan, Suzuki and Vinastar, which have brought their latest models and innovative technologies. Audi is introducing nine models at the show including the Audi R8 Spyder 5.2 V10 quattro and Audi R8 Coupe 5.2 V10 quattro, while Mercedes-Benz puts on show 18 new models. Toyota shows its six most popular models including the Camry and Land Cruiser Prado version 2014. The Vietnamese market is showing an increasing demand for cars as the living standard and income is rising and infrastructure is improved, according to officials from the Ministry of Industry and Trade. It is an opportunity for car makers to expand their business and contributing to the development of Vietnam’s domestic automobile industry. In the first ninth months of this year, the total number of vehicles sold reached 77,000, a year-on-year increase of 18 percent. Thai Binh calls for Indonesia’s investment The Red River Delta province of Thai Binh has called on Indonesian businesses to invest in the locality, particularly in the support industry, rice processing, engine manufacture and tourism. Chairman of the provincial People’s Committee Pham Van Sinh made the call during a working session on October 23 with Indonesian Ambassador to Vietnam Mayerfas who visited the province to study opportunities for cooperation. Chairman Sinh gave the ambassador a brief introduction on the province’s situation as well as its achievements in economic development over the past time, especially its strength in industry and agriculture, specifically rice variety production. The two sides agreed to set up twin relationship between Thai Binh and an Indonesian province to expand long-lasting cooperation. The Indonesian Ambassador invited the provincial leaders and businesses to make a field trip to his country in the earliest time possible. Dong Nai attracts US$830 million in FDI By late September, Dong Nai Industrial Zones Authorities (DIZA) licensed 59 new foreign direct investment  (FDI) projects worth US$315.5 million and 54 existing ones with an additional capitalisation of US$515.1 million. It also approved eight new domestic projects with a total registered capitalisation of nearly VND1,441billion and 3 operational projects with an additional amount of US$332 billion. In the first nine months of this year, Dong Nai attracted US$830 million from foreign sources and VND1,773 billion from domestic sources. FDI capital is expected to reach 78% compared to the same period last year and 83% against set target of attracting US$1 billion investment capital in 2013. Currently, Dong Nai has 31 industrial parks covering 9,832 hectares. But it is hitting snags in paying land clearance compensation, signing new land lease agreement, and getting bank loans for infrastructure construction. Vietnam seals Philippines rice contracts Vietnam recently scored contracts to sell 120,000 tonnes of rice to the Philippines ending a dry spell for the country's grain exports, said director of the Thinh Phat Food Co Lam Anh Tuan. Under the deal, Vietnamese rice export prices have been increased in recent weeks, with loading to begin next month. The 5-percent broken rice was quoted last week at US$400-405 a tonne, free-on-board (FOB) Sai Gon Port, up around 10% from early this month. Vietnamese rice sales have also risen following agreements with the Philippines and increased demand from China. The Vietnam Food Association (VFA) said that China, Vietnam's biggest rice importer in the first eight months of this year, bought roughly 1.68 million tonnes, up 3.2% over the same period last year. However, the association last week called on the Ministry of Industry and Trade to strictly monitor border rice sales to China as it was difficult to know how much of the grain was being sent across the border. It is said rice exported via border trade, was not included in the country's statistics and escaped quality restrictions, risking damage to the image of Vietnamese rice VFA chairman Truong Thanh Phong forecast that the country's rice exports would reach 1.8 million tonnes in the fourth quarter this year, 128,000 tonnes below the targets, due to a slump in exports in September. Vietnam plans to ship around 7 million tonnes of rice abroad this year, 0.5 million tonnes less than expected. By September 30, Vietnamese rice export volume had reached 5.2 million tonnes. Vietnam attends global auditors congress in China State Audit General Nguyen Huu Van is joining approximately 700 foreign delegates at the 21stcongress of the International Organisation of Supreme Audit Institutions (INTOSAI) being held in Beijing from October 22-25. Plenary sessions and workshops will focus on the two themes: national audit and national governance, and the role of Supreme Audit Institutions (SAIs) in safeguarding long-term sustainability of finance policies. Established in 1953, INTOSAI gathers supreme audit institutions of UN member states. Currently the organisation has 191 official and 4 alternate members. Its congress takes place every three years. Since being admitted to INTOSAI in July 1996, the State Audit of Vietnam has actively accelerated international integration, expanded relations, and signed cooperation agreements with dozens of SAIs and relevant organisations across the globe.   Vietnam attends CLMV business forum in India By the end of September, India had had 24 projects worth US$5.16 million in HCM City. Nguyen Thi Hong, Vice Chairwoman of the HCM City People’s Committee, confirmed this at a Cambodia-Laos-Myanmar-Vietnam (CLMV) Business Forum in New Delhi on October 22. The forum was held by the Confederation of Indian Industry (CII) and the Indian Ministry of Commerce and Industry to provide a good chance for leaders and businesspeople from the four countries to research markets and seek investment and partners in India. Participants discussed opportunities for Indian businesses to invest in infrastructure, agriculture, manufacturing industry, services and other potential areas that need local human resources. CII General Director Chandrajit Banerjee said two-way trade turnover between India and CLMV is much lower than expected. Bilateral trade between India and ASEAN reached US$76.7 billion in 2012-2013, of which trade between India and CLMV stayed at US$8.53 billion, including India’s US$4.65 billion exports to CLMV. Over the past 15 years, India has invested more than US$500 million in CLMV, mainly in the fields of agriculture, forestry, oil and gas, infrastructure and technology. At the forum, Hong briefed participants on Vietnam’s economic growth as well as its investment and business environment, particularly in HCM City. She said in the 20- year Doi Moi (Renewal) process, Vietnam has created a dynamic business environment with high growth rates in many areas. As a major economic, cultural, educational, training, scientific and technological hub, HCM City has become an attractive investment destination for foreign investors, including India, she stressed. HCM City now has 4,795 valid foreign invested projects worth US$32.62 billion. In the first nine months of this year, it attracted 330 new projects with a total capitalisation of US$740 million, mainly in the fields of processing, manufacturing, science-technology, trade and construction. Hong extended an invitation to India to attend the “five countries-one destination” tourism fair in HCM City in 2014. Lam Dong attractive in foreign investors’ eyes The Central Highland province of Lam Dong has signed a Memorandum of Understanding (MoU) to boost cooperation with the Singapore-based Republic of Korean Chamber of Industry and Commerce. The signing is part of the province’s activities aiming to promote investment in Singapore. Addressing the signing ceremony on October 22, Jung Young Soo, President of the Chamber, noted Da Lat city and Lam Dong province in general show potential for agricultural products and tourism. The launch of the Da Lat-Singapore air route will help hasten tourism and trade activities between not only the two sides but also Da Lat and other countries, he said. Young Soo affirmed his chamber is willing to call for businesses of the RoK and Singapore to invest in the locality, while supporting Lam Dong’s businesses in accessing capital sources so that they can expand investment in foreign markets. For his part, Chairman of the Lam Dong People’s Committee Nguyen Xuan Tien expressed his belief that the two sides will coordinate in realising agreed contents in the spirit of the MoU, saying the province will do all it can to lure investment. RoK businesses expressed their hope to foster investment in Lam Dong, particularly in agriculture. The RoK Chamber of Industry and Commerce will visit the province on November 15. Opportunities for cooperation with Iran businesses Vietnamese businesses should be wise to explore opportunities beyond the US and the EU and recognise the potential of emerging partners like Iran. Vietnam Chamber of Commerce and Industry (VCCI) Ho Chi Minh City Director Vo Tan Thanh made the recommendation at a Vietnam-Iran trade seminar in the city on October 22. The event attracted representatives from almost 20 visiting Iranian businesses operating in industry, construction and construction materials, electronic components, garments, import-export, banking, services, healthcare, and cosmetics. Experts noted expanding economic cooperation between Vietnam and Iran requires removing regulatory barriers in finance and banking. In addition to macro-solutions like legitimising domestic currency transactions and bartering, the two countries’ business communities must be more proactive. Iranian ambassador to Vietnam Hossent Alvandi said official visit exchanges play an important role in linking businesses across international borders. Iran and Vietnam should increase trade and investment promotion with greater efficiency, minimising the intermediary expenses interested businesses are currently forced to bear. Iranian consumer demand is surging for imported seafood, agricultural produce, footwear, motorbike spare parts, and mobile phones. Its businesses are looking to cooperate in refining oil, construction, and agriculture. Two-way trade turnover has boomed from US$6.5 million in 2001 to nearly US$185 million in 2011. In 2012, Iran poured US$10,000 into a single project in Vietnam. The Vietnam National Oil and Gas Group has conducted an Iranian oil exploration project worth US$115 million and completed preliminaries for an oil exploitation project worth US$1 billion. Netherlands explores market opportunity in An Giang A Dutch business delegation arrived in the Mekong Delta province of An Giang on October 22 to study the possibility of distributing An Giang’s commodities to the Netherlands and Europe. The delegation, representing European and Dutch market wholesale distribution businesses, made a fact-finding tour of An Giang Fruit, Vegetables & Foodstuffs Join Stock Company (Antesco), Viet An Tra Fish Processing and Export Company, Thuan An Production Trading and Services Co. Ltd, An Giang’s export rice processing factory, and Khiem Thanh Co. Ltd. At a working session with local authorities, both sides discussed expanding cooperation between the province and Oss City, improving links between its key export commodities and retail distribution networks in the Netherlands and Europe. They also noted their plans to develop the province’s logistics sector and work together on a potato cultivation project. Provincial People’s Committee Chairman Vuong Binh Thanh said An Giang’s rice, Tra fish, and fruit and vegetable produce would be popular with Dutch consumers. He asked Dutch enterprises to assist with technology transfers and invest their efforts in the province’s planned potato export pilot project. Green growth promoted in Mekong Delta The Global Green Growth Institute (GGGI) is eager to cooperate with Vietnam in studying the relationship between water resources and green growth in Mekong River areas. A GGGI representative expressed the institute’s desire at a working session with the Ministry of Natural Resources and Environment (MNRE) in Hanoi on October 22. The representative explained the GGGI, established last year, is focusing its research on the relationship between water resources and green growth. Vietnam’s geography and its dependence on the Mekong River Basin’s abundance makes it perfect for such investigations. MNRE Deputy Minister Nguyen Thai Lai said the green growth movement and minimising carbon emissions have become key pillars in Vietnam’s sustainable economic development strategy. The national strategy on green growth that covers the 2011–2020 period formalises this orientation, creating a roadmap for guiding economic restructuring, environmental protection, and water resource security. Lai said the proposed GGGI research must inform Vietnam’s green economic development and water management policies, and the MNRE will work with the GGGI to achieve this. Vinacomin to export three million tonnes of coal in Q4 The Vietnam Coal and Mineral Industries Group (Vinacomin) plans to sell 11 million tonnes of coal in the last three months of this year, including 3-3.5 million tonnes for export. Vinacomin Deputy Director General Nguyen Van Bien announced the goal at a press conference in Hanoi on October 21, recapping the corporation’s trading and production in the first nine months of the year and its business plan in the fourth quarter. He noted that demand for coal serving domestic thermoelectricity power plants is expected to surge in the dry season, while coal-export tax has been reduced to 10% from 13% in the first half of the year, thus facilitating exports. The group’s coal sale in the third quarter only fulfilled 15.6% of the entire year’s target, down 40% from the previous months due to a reduction in domestic coal consumption and dropping export price. In the January-September period, Vinacomin earned VND39 trillion (US$1.83 billion) in turnover and made a VND1.5 trillion (US$70.5 million) profit. This year, the group strives to sell more than 39 million tonnes of coal, equivalent to last year’s aggregate figure, including 11.5 million tonnes for export, a year-on-year decrease of three million tonnes. Chinese contractor builds Vinh Tan 3 thermal power plant China’s Harbin Electric International Company was named the contractor of Vinh Tan 3 thermal power plant project in Binh Thuan Province after a contract was signed with Vinh Tan 3 Energy Joint Stock Company (VTEC) on Monday. The investor expects to commence work on the project in the third quarter of 2014 with total investment of around US$2.7 billion. According to a statement released by Electricity of Vietnam (EVN), the project has three turbines with the combined capacity of 1,980 MW. This is one of three large power plants of Vinh Tan Power Center in the province. The Government assigned VTEC to develop the project under build-operate-transfer (BOT) format in 2010. The enterprise is now negotiating the BOT contract with the Ministry of Industry and Trade and the electricity trading deal, expecting to sign them both at the end of the year. VTEC was established in April, 2009 by EVN, One Energy Ventures Limited and Pacific Corporation. The shareholders hold a 29%, 49% and 22% stake in the enterprise respectively. EVN expects that the first turbine will be connected to the national grid in 2018. The plant has an average output of 12 billion kWh a year, helping balance power supply and demand in Binh Thuan and southern provinces. Vinh Tan Power Center includes three power plants, including Vinh Tan 2 thermal power plant with the capacity of 1,244 MW. Invested by EVN, the plant is expected to start operating before the end of the year, generating total output of 7.2 billion kWh each year. Meanwhile, Vinh Tan 1 thermal power plant has been developed under BOT format. The plant has a capacity of 1,200 MW. FMCG demand falls on spending cuts Pessimistic economic prospects have led consumers in major cities to tighten spending, explaining why the fast-moving consumer goods (FMCG) segment has failed to maintain strong growth as seen in previous years, heard a seminar in HCMC on Tuesday. At a seminar on Tuesday, Antonie Louat De Bort, customer service director of the marker research firm Kantar Worldpanel, said the FMCG segment had gained slower growth since early this year. FMCG segment posted growth of 10% in this year’s first half while the same-period figure was as high as 16%. Compared to many other Asian nations, the six-month growth rate remained good but it showed a slowdown. De Bort ascribed the slower growth to the fact that local people had changed FMCG consumption behavior given their negative outlooks on the economy. The survey conducted by the company unveils that more than half of household respondents in Hanoi, Danang, HCMC and Can Tho said that now was not the right time to make big purchases. This means consumers are tightening spending. In particular, while households with high incomes have continued spending heavily and choosing pricey items, those with lower incomes have cut down on spending, especially on dairy products, bottled drinks and canned foods as they consider those items nonessential. Low-income households are inclined to buy goods in small volume and those with promotions and discounts, and do the shopping near their homes, instead of going to faraway supermarkets and hypermarkets. Those consumer behavior changes require producers to take proper solutions to stay competitive, including continuing investments in branding, publicity enhancement, and packaging. Binh Dinh and HCMC enterprises sign deals Member enterprises of the Binh Dinh Businessmen Club and their partners in HCMC have signed cooperation deals worth a total of VND1 trillion at a meeting held on the occasion of Vietnam Entrepreneurs’ Day (October 13). The enterprises present at the meeting were Thanh Nien Corp., Hung Thinh Real Estate Trading Investment Co., INTOC Co., Benthanh Group, Van Phat Wine Co., Toan Phat Co., Vietnam Peace Tour Co. and Hoa Sen Group. The Binh Dinh club also granted scholarships worth VND50 million to students achieving high academic records at HCMC Architecture University, HCMC University of Economics, Posts and Telecommunications Institute of Technology, and National Academy of Public Administration. The Binh Dinh Businessmen Club, which was set up a year ago, plans to open a restaurant selling specialties of Binh Dinh Province in HCMC this year. South Africa praises Vietnam’s development achievements President Jacob Zuma has valued Vietnam’s Renewal achievements and expected stronger bilateral cooperation, including between the Communist Party of Vietnam (CPV) and the African National Congress (ANC). Zuma made the statement while receiving Vietnamese ambassador to South Africa Le Huy Hoang, who presented credentials to him in capital Pretoria on October 16. He said African leaders and people admire Vietnamese people’s past struggle for national independence, freedom and unification, considering it a source of encouragement to South Africa’s struggle against Apartheid, culminating in the ANC’s historic victory in the 1990s. Zuma expressed his belief Hoang will fulfil his mission in South Africa, contributing to strengthening friendship and cooperation between the two countries. For his Part, Hoang conveyed President Truong Tan Sang’s regards and invitation to visit Vietnam to Zuma. He congratulated South Africa on its recent tremendous achievements under the leadership of the ANC, increasing its role and position in Africa and the world. He voiced Vietnam’s strong resolve to boost friendship with South Africa, and vowed to work hard to deepen all-round cooperation between the two countries, especially in economics, trade and education. President Zuma said he will arrange time to visit Vietnam in the near future. ODA – an important source for development The effective use of official development assistance (ODA) over the past 20 years has helped Vietnam make great socio-economic strides in the comprehensive renewal process. Prime Minister Nguyen Tan Dung affirmed this at a meeting in Hanoi on October 17 to mark the 20th anniversary of development cooperation between Vietnam and donors. PM Dung highly appreciated and sincerely thanked the Governments of donor countries, international organisations and international non-Governmental organisations (INGOs) for having provided a huge amount ODA funding to make it possible for Vietnam to grow from a poor and least developing country into a middle developing country at present. He expressed his hope that Vietnam will continue receiving stronger and more effective assistance from donors to maintain its sustainable and prosperous growth. At the meeting, Victoria Kwakwa, World Bank country director for Vietnam said a fundamental reason for the extraordinary success of Vietnam’s ODA partnership is the strong Government ownership of its development vision and agenda. Vietnam sought ideas, knowledge and even advice from development partners and then found ways to contextualise and adapt it in line with Vietnam’s own context. Kwakwa added that despite Vietnam’s remarkable success, its development journey is far from over. Poverty reduction gains while impressive are still highly vulnerable to reversal. In equality both in access to economic opportunities and social services is growing and a source of concern in a society that places significant emphasis on equality. To achieve its longer term objective of becoming an industrialised economy, development partnerships will continue to be important and relevant for Vietnam going forward. She reiterated the World Bank’s strong support for Vietnam’s continued efforts to establish new partnerships and find innovative and creative ways of cooperation. Japanese Ambassador to Vietnam Hiroshi Fukada said since Japan resumed ODA loans in 1992, the country has constantly supported Vietnam’s socio-economic development. Japan’s ODA to Vietnam has surpassed US$20 billion. He said now is the time to tackle challenges for more vigorous Vietnam. In order to help Vietnam address the challenges, Japan will utilise ODA that includes technical cooperation in economic restructuring and human resource development in addiiton to infrastructure development in the years to come. Pratibha Mehta, UN Resident Cooridnator in Vietnam, said whilst recognising the dramatic progress Vietnam has made over the past two decades, the country still faces many challenges that continue to need strong support from international development partners. Given Vietnam’s low Middle Incomes Status, not only will ODA contributions reduce but the way ODA is being provided will change. It is therefore necessary to review other development finance sources as well as new partnerships and build necessary capacity in this regard. The UN is strongly committed to further supporting Vietnam in overcoming challenges to its development, Pratibha said. ODA commitments for Vietnam over the past 20 years are vivid proof of donors’ support for the Government’s proper socio-economic development policy, which benefit people, especially poor people in rural, mountainous and ethnic minority areas. They have encouraged foreign investors to expand business and investment in Vietnam, with the contribution of foreign direct investment (FDI) to the country’s GDP rising considerably from 2% in 1992 to 18.9% in 2012. Each year, donors provide around US$3 billion in ODA for Vietnam. The funding has helped Vietnam stabilise macroeconomy, especially since early 1990s when Vietnam decided to adjust economic growth models by restructuring State-owned enterprises, supporting the private economic sector, and reforming the financial and banking system. ODA is an important source for Vietnam to improve the quality of social services, develop policy, reform and manage sectors, develop agriculture, reduce poverty, improve urban and rural environment, mitigate natural disasters and cope with climate change. Saigon Hi-Tech Park attracts US$2 billion investment Saigon Hi-Tech Park until now can boast of 58 valid projects of which 29 are foreign direct investment projects, with total registered capital of more than US$2 billion. This year, the Park attracted five more hi-tech projects worth US$120 million, in fields of hi-technology and training of high quality human resource, such as in microchips, and in Hutech Institute and FPT Center for Training and Technology. On October 18, the Management Board of Saigon Hi-Tech Park held a ceremony to celebrate its 11th founding anniversary. At the ceremony, Le Manh Ha, Vice Chairman of the Ho Chi Minh City People’s Committee, said the City will continue to offer preferential policies in the near future to help the park become a key science and technology center not only in the country but also in the Southeast Asian region. VinaCapital: Vietnam still has edge over Myanmar Myanmar has emerged as a potential market in Southeast Asia but has yet to have a competitive edge over Vietnam in foreign investment attraction in the short term, said Andy Ho, managing director of VinaCapital. Ho said on Thursday at a press briefing on a VinaCapital investors conference in response to the Daily’s question about the interest of foreign investors in Myanmar. VinaCapital will hold a roundtable to discuss investment opportunities in Myanmar for those investors attending the conference. Besides, VinaCapital plans to open an office in Myanmar in the coming time to explore opportunities there. However, in short term, Myanmar is still unable to compete with Vietnam in attracting foreign investment as its legal framework is not yet complete. Investors, when considering doing business in Myanmar, will care about issues like asset ownership and the stability of Myanmar’s currency. “Foreign investors have thought about investment there but they have not poured money,” said Ho. Vietnam should worry about regional countries such as the Philippines and Thailand when it comes to attracting foreign investments, he noted. Another point Vietnam should take into account is that foreign investors will withdraw money and place it in developed countries like the U.S. as prices of assets would turn cheap when the U.S. tapers stimulus. Currently, the U.S. spends US$85 billion a month buying long-term bonds but when the stimulus stops, investors will get back to America as seen through the recent capital outflows from India and Indonesia, according to Ho. “If so, capital flow into Vietnam would partly decline,” said Ho. Steve Almond, global chairman of Deloitte, earlier told the Daily that in addition to developing markets, Vietnam would have to compete with developed economies in attracting foreign investments as well. VinaCapital is still calling for new capital from foreign investors. Around 80 foreign investors putting their money in the funds managed by VinaCapital gathered at the investors conference in Vietnam on Thursday to get a clearer understanding of the investment situation in Vietnam. This is the eighth such annual conference held by VinaCapital. At the conference, Deputy Prime Minister Hoang Trung Hai fielded some questions of investors concerning the Government’s policies for foreign investments and economic stabilization in the coming time. Investment funds managed by VinaCapital have paid dividends of around US$150 million to foreign investors in the past 18 months. VinaCapital forecasts VN-Index to stay at over 500 points late this year, according to Ho. VinaCapital currently runs three closed-end funds trading on the London Stock Exchange, including Vietnam Opportunity Fund (VOF), VinaLand (VNL) and Vietnam Infrastructure Limited (VNI) having total net asset value of US$750 million, US$466 million and US$200 million respectively. Besides, VinaCapital together with Draper Fisher Jurvetson co-manages the technology fund DFJ VinaCapital L.P. Smaller rice farmers cannot live on main incomes Average monthly incomes of small rice farmers in the Mekong Delta, the country’s biggest rice growing area, are VND535,000 per capita, just half the minimum wage, forcing growers to find alternative sources of income. The information is seen in a report on who benefits from rice price increases, conducted by the Institute of Policy and Strategy in Agriculture and Rural Development (IPSARD) in Vietnam and Oxfam Vietnam, and announced in Hanoi on Thursday. Those households growing less than two hectares of rice cannot manage to live on their earnings from this food staple, so to earn a better living, they have resorted to other means of subsistence like livestock and fish farming, and non-farming activities. The report indicates rice production has been a major driver of economic growth in Vietnam over the past two decades and that increased rice prices have primarily benefited trading firms, most of them State-owned, not millions of small rice cultivators. Those farmers have never reaped much from any export price hikes but they would immediately feel the impact when rice prices went down, according to the report. Once global rice prices fell, farmers were always forced to cut prices, thus earning less. When rice surged from US$430 a ton in early 2008 to US$900 in May that year, farmers enjoyed a price rise of a mere US$100 a ton. Tran Cong Thang at IPSARD said trading companies had profited from the hard labor of farmers. “In the rice value chain, growers got the least benefits from the high rice prices in 2008 and 2011 though they spent a lot of labor and money.” In analyzing the rice value chain in the Mekong Delta province of An Giang, the report pointed out that farmers just got 30% of total profit while the rest went to intermediary rice buyers and export firms. “Just 30% of the profit is unacceptable because farmers have to cover 60-70% of total cultivation cost and are vulnerable to natural disasters and diseases,” Thang said. Rice export operations are in the hands of a few big firms, mostly state-owned ones or those converted from state ownership to shareholders’ ownership. For example, two State-owned companies – Vietnam Northern Food Corporation (Vinafood 1) and Vietnam Southern Food Corporation (Vinafood 2) – account for half of the country’s total rice export volume. Though these big businesses have earned much, they have invested insignificantly in the rice farming sector. The rice exporting firms that support farmers in terms of input materials, technical assistance, farming area development and rice sale make up a mere 5-7% of the total. Meanwhile, the other exporters are more active in a variety of sectors such as fish farming, livestock cultivation, motorcycle and automobile trading, and even real estate, thereby paying less attention to rice farmers. Nam Con Son Pipeline supplies 50 billion cu.m of gas after 10 years Nam Con Son Gas Pipeline Company on Wednesday marked a milestone of reaching total output of 50 billion cubic meters of gas after ten years of operating as a key fuel supplier for nearly 40% of Vietnam’s power generation. Le Dinh Chau, operation manager of Nam Con Son Gas Pipeline Company, told local media that at the moment, the company has total gas capacity of 22 million cubic meters a day to satisfy the fuel needs for producing one third of the nation’s electric power output. The company supplies gas – which is pumped from the offshore fields of Lan Tay, Rong Doi, Chim Sao and Hai Thach-Moc Tinh – for many thermo-power stations in the nation’s southern region such as Ba Ria, Phu My 1, Phu My 2, Phu My 3,  Phu My 4 and Nhon Trach. With total investment capital of US$1.3 billion, the Nam Con Son gas pipeline project is now operated by three partners: PetroVietnam Gas Corporation with a 51% interest, ConocoPhillips with 16.33% and TNK Vietnam with 32.67%. According to Nam Con Son Pipeline, the company expects to obtain total revenue of US$226 million this year, a 5% pickup from last year. In 2003-2012, the company paid some VND1.3 trillion in taxes. Speaking to the Daily during a media trip to the company’s gas treatment terminal in An Ngai Village, Long Dien District in Ba Ria-Vung Tau Province on Wednesday, Chau said the current gas demand of power plants had declined considerably in the past two months. As observed by the Daily at the terminal on Wednesday, nine power plants in the southern region on Wednesday consumed nearly 12 million cubic meters of gas from Nam Con Son Pipeline while its designed output is 22 million cubic meters a day.                      Chau explained that in the rainy season, State utility Vietnam Electricity Group (EVN) often intensifies purchases of power from hydropower plants to enjoy lower prices. He added the gas treatment terminal often operates at full capacity in the dry season from March to May when the output of hydropower plants declines. Hanoi announces plan for clean industrial park The Hanoi Department of Planning and Architecture has announced its detailed plan for a clean industrial park in the city’s suburban district of Soc Son. The industrial park is set to cover 340 hectares in Minh Tri and Tan Dan communes. It will include an area for clean industries, and another for administrative centre and public facilities plus a supporting area containing a vocational school and housing for workers. Vice Chairman of the Soc Son People’s Committee Pham Van Tao said this will be the second park of its kind in the district, after Noi Bai industrial park. It will help fuel development in the west of Hanoi as well as create jobs for locals. Export forecast to beat year’s target The Ministry of Industry and Trade has forecast that Vietnam’s 2013 export revenues will rise 14% to US$131 billion, up from the 10% approved by the National Assembly. Vietnam’s import and export performance in the first nine months of this year was good, said a ministry representative at a review meeting on export held in HCMC on Thursday. Vietnam fetched US$96.27 billion from export in the period, up 15.5% year-on-year, with domestic enterprises accounting for US$32.2 billion, up 3.5%, and foreign firms for the remainder, up 22.6%. With its export turnover of US$67.44 billion, the manufacturing and processing sector gained growth of 26.8%. Most export items in the sector posted positive growth, except fertilizer which fell 23% and video cameras that dropped 15%. Export shipments of mobile phones and accessories brought US$15.52 billion, up 80%, followed by garments and textiles with US$13.1 billion, up 17.3%, footwear with US$6 billion, up 15.1%, and machines and components with US$4.37 billion, up 5.1%. At the meeting, the ministry also unveiled that it had just sent a report to the National Assembly. It targets US$144 billion in export turnover in 2014, up 10% from 2013 while trade deficit will make up 5% of total export turnover. Local furniture, handicrafts showcased in U.S. A delegation of nine woodwork and handicraft exporting firms led by the Vietnam Trade Promotion Agency (Vietrade) on Thursday left for the U.S. to attend High Point furniture trade fair. Tran Viet Tien, director of Gia Long Fine Art Joint Stock Company, said the pavilion of Vietnamese enterprises at this year’s fair had been carefully prepared in hope of attracting many visitors. A representative of Vietrade said that unlike in previous years, this year the agency and participating enterprises focus mainly on marketing and allocating human resources in preparation for the fair. The Vietnamese delegation has also bought a list of U.S. buyers before the fair is opened.   Information about the pavilion of Vietnamese enterprises is inserted in specialized magazines like Furniture Today. Participating in the fair, the Vietnamese enterprises do not have to cover exhibition, decor and marketing costs thanks to Vietrade’s sponsorship. High Point having a display area of over 900,000 square meters attracts an average of 75,000 visitors and over 2,000 exhibitors from around 100 countries. Vietnam’s woodwork export to the U.S. reached US$168.3 million last month, up 13% year-on-year, taking the total in the first nine months of the year to US$1.4 billion, up 8.5%. Aussie beef prices low on tax incentives Local beef products are facing fierce price competition with imported Australian beef whose competitive prices are ascribed to lowered import taxes under a free trade agreement between ASEAN, Australia and New Zealand (AANZFTA) effective three years ago. As observed by the Daily, the retail prices of fresh Australian beef at stores and supermarkets in HCMC range from VND180,000 to VND320,000 a kilo while similar local beef products are priced at more than VND280,000 a kilo. Tran Le Chau, an office worker in Tan Phu District, said the gap between Australian and Vietnamese beef prices was inconsiderable, from 10% to 15%. “Compared to two years ago, prices of imported beef in Vietnam have decreased sharply, so they are competing well with domestic items,” she remarked. According to the AANZFTA effective from 2010, import tariffs on semi-processed Australian beef in ASEAN member states including Vietnam are from 14% to 30%, much higher than the import duty of 5% on cows. This explains why importers have chosen to buy live Australian cows and slaughter them at home to avoid paying the high tariffs on beef. Pham Binh An, director of the Center of Integration WTO Technical Assistance of HCMC, said besides the tax incentives that beef products were subject to when imported into the nation, Australia’s technology and management experience in cow farming are also much better than local farming. Vietnam imported a total of 32,500 Australian cows in January-September, the Animal Health Center for Zone 6 reports. The authority, however, didn’t have statistics on Australian cow imports in 2012 given the small number. Local experts believed that industry players had started importing cows from Australia to explore the local market and establish business ties with Australian suppliers to take advantage of tax incentives within the Trans-Pacific Partnership agreement that would come into force next year. Pham Duc Binh, general director of Thanh Binh Company, said the country’s meat imports had risen remarkably over the past time. “Other bilateral trade agreements that Vietnam has signed with foreign partners in recent times extend a slew of tax incentives to the foreign nations exporting farm produce to the country, including meat,” said Binh, who is also vice chairman of the Livestock Association of Dong Nai Province. Tra fish prices drop again Having shot up to VND24,000-24,500 a kilo early this month, which allowed farmers to earn some VND1,000-1,500 a kilo, unprocessed tra fish prices in the Mekong Delta have fallen again. According to the An Giang Fishery Association (AFA), white-meat tra for export is being purchased at only VND22,500-23,500 a kilo by local processors and exporters while low-grade tra is selling for VND21,000-21,500 a kilo, down VND1,000-1,500 a kilo versus early this month. Truong Dinh Hoe, general secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP), said that he couldn’t explain the price falls that are happening at a time of stable exportation. He suspected this might have resulted from unstable supply at home. Hoe said it was difficult to say exactly what had caused tra fish price volatility as statistics on tra farming areas in the Mekong Delta are not available. “Export processors may face severe tra shortages in near future but no reliable statistics prove this,” he said. Nguyen Van Kich, general director of Cafatex Corporation in Hau Giang Province, said local tra fish supply was not as abundant as before and that export prices had recently surged by US$0.25-0.3 a kilo from last month. In the meantime, he noted, local live fish have declined in price as farmers have asked for cash rather than deferred payment for fear corporate buyers might fail to pay. Kich however expected the price of the fish to bounce back in the coming time. Supply would continue dropping as enterprises have difficulty gaining access to bank loans to fund farming due to credit tightening and rising losses of farmers, he reasoned. Le Chi Binh, vice chairman of AFA, said establishing a tra fish supply chain ranging from production to consumption between processors and farmers could help develop the industry in long term. Fuel price fund still feeds sellers despite profit With a sharp fall in the 30-day import price, fuel wholesalers are continuing enjoying handsome profits from the fuel price stabilization fund that local residents have to pay every day for costly petrol purchases. Statistics by the customs show that fuel wholesale enterprises this year have bought fuels at prices much lower than last year. However, consumers now have to buy higher prices than the same period last year. As per the base price calculation released by the Vietnam Petroleum Association (Vinpa), as of Monday, the 30-day average import price calculated from September 14 was some US$112 a barrel for RON92 petrol, about US$123.1 a barrel for diesel oil 0.05S and around US$122.1 a barrel for kerosene, shrinking considerably from previous days In recent days, in spite of rising petrol prices in the Singaporean market, Vietnam’s major petrol exporter, the 30-day average price has declined. Therefore, the base prices, which comprise import prices, taxes and fees, have got closer to retail prices, which slipped by VND390 a liter on October 7. In particular, the base price of gasoline now is VND221 a liter higher than the retail price, while that of diesel oil is VND335 a liter higher and that of kerosene is VND686 a liter higher. The point is that wholesale companies have got a nod from the ministries of finance and industry-trade to receive VND300 for a liter of gasoline or a liter of diesel oil and VND800 for a liter of kerosene sold from the fuel price stabilization fund. This means they earn an extra profit of VND97 and VND114 for one liter of gasoline and kerosene sold respectively and just incur a loss of VND35 for every liter of diesel oil consumed. These are additional profits apart from the fixed profit of VND300 a liter of gasoline and VND100 a liter of diesel oil or a liter of kerosene provided by the prevailing law. The Ministry of Finance last week announced the fund’s balance at over VND55 billion, with deficits recorded at many firms. A recent report by the General Department of Customs says wholesale companies had imported more than 236,000 tons of fuels worth over US$228 million in the second half of September. January-September fuel imports totaled over 5.4 million tons worth some US$5.1 billion, says the report. For the two major products of gasoline and diesel oil, the country had imported a total of 1.7 million tons worth some US$1.7 billion and 2.4 million tons costing US$2.2 billion respectively in the first nine months. With the average import price of US$1,036 a ton of gasoline and US$932.9 a ton of diesel oil in September’s second half, the respective nine-month average prices of the two items were US$1,032 and US$919.9 a ton. Meanwhile, the year-ago period’s figures were much higher, with the average price of gasoline amounting to around US$1,079 a ton and that of diesel oil hitting US$991.2 a ton in the second half of September in 2012. Similarly, the nine-month average prices in 2012 stayed high, at US$1,058 and US$957.5 per ton. Regardless of this, the current retail prices are higher than those recorded in the year-ago period, with RON92 petrol now sold at VND23,880 a liter and diesel oil at VND22,210 a liter compared to VND23,650 and VND21,850 a liter in October last year. Petrol imports in January-September tumbled sharply versus the same period in 2012, with the total import volume plummeting 27% year-on-year, with gasoline falling 24% and diesel oil plunging 38%, the department reports. Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR