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BUSINESS IN BRIEF 7/2
Germany
– a big trade partner of Vietnam
Vietnam
Customs statistics show Vietnamese exports to
Its
major export items include mobile phone handsets and components, footwear,
garments, coffee, timber products, seafood, rucksacks, bags, purses,
handicrafts, computers, and electronics.
Among
the exports, mobile handsets and components topped the list, earning US$1.54
billion, representing an annual increase of 32% and making up one third of
the total export value.
Computers
and electronics posted the highest growth of 108%, raking in US$337 million
in value.
Other
export items attaining high growth include seafood (up 2.6%), handbags, hats,
cases, umbrellas (17.6%), plastics (6.4%), steel (9.3%), cashew nuts (6.7%),
rubber (35.7%), cookies and cereals (49.8%) and fruit and vegetables (16%).
Local
company boosts
Xuan
Thien Ninh Binh has been licensed to invest in a 2,000 MW hydro-power plant
and a cement factory in
Under
the license, the company, an affiliate of the Xuan Thanh Economic Group, will
manufacture first commercial cement products in 2015 and generate power in
2018.
With a
population of nearly 1 billion and rich mineral ores,
Doan
Trinh, a CEO of Xuan Thien Ninh Binh, explains the company has a wealth of
experience in developing hydro power and cement, and
its
population and industrial production, but it currently meets only 16% of its
demand.
The
company is conducting other market surveys in Central and
Vinamilk
expands world market
Since
its establishment 37 years ago, Vinamilk has developed a reputable brand in
Its
products are now available in 26 countries worldwide, with its 2013 export
earnings reaching US$230 million, a year-on-year increase of 27%.
The
company plans to set up a factory in
It has
a joint venture company with a dairy product factory in
Last
year the US Food and Drug Administration (FDA) licensed Vinamilk to ship its
products to the
In
2013 Vinamilk invested in two modern factories in Binh Duong to produce
54,000 tonnes of powdered milk and approximately 400 million litres of fresh
milk per year.
The
two state-of-the-art production lines are expected to market highly competitive
products, meeting international standards.
In
2010 Vinamilk was the first and only Vietnamese business recognised as one of
the 200 leading Asian businesses by Forbes Asia.
Its
CEO Mai Kieu Lien was honoured as one of the 50 female Asian entrepreneurs in
2012-13 by Forbes.
Vinamilk
also topped the list of the 50 leading businesses on the Vietnam Stock
Exchange in 2013.
Binh
Dinh unveils prioritised investment projects
The
central coastal
It
prioritises investment in infrastructure construction, real estate, trade,
services, tourism, agro-forestry fisheries, and health care.
The
province hosted a ceremony on February 3 to call on domestic and foreign
businesses to invest in these projects.
At the
ceremony, the provincial Entrepreneurs Association committed more than US$500
million to investment and VND10 billion to social welfare over 2014-15.
The
Bank for Investment and Development of Vietnam (BIDV) agreed to pour VND10
trillion into industrial production and aquatic product processing over
2014-16, alongside its VND10 billion commitment to local social welfare.
Deputy
Prime Minister Nguyen Xuan Phuc acknowledged Binh Dinh’s efforts in
maintaining high economic growth and competitiveness index in 2013.
He
reminded the province to fully tap its natural resources to develop its
chemical, tourism, and aviation services.
Big
challenge for economy in 2014
Maintaining
last year’s reasonable rates of economic growth in 2014 presents a major
challenge in the current economic context.
Lam
says economic restructuring that favours the quality of growth over its
magnitude will help
Industrial
production showed sign of recovery in 2013. The Index of Industrial
Production (IPP) rose 7.4%, much higher than 2012’s 5.5% improvement. The
processing and manufacturing industry accounted for more than 70% of added
value.
Nearly
half of the value of industrial production came from the foreign direct investment
(FDI) sector. Impressive IPP improvements of 9–22% were seen in FDI
businesses manufacturing textiles, drinks, clothes, electronics, computers,
and leather. Exports also grew by more than 20%.
The
increases in FDI production promote growth, expand export markets, and
generate jobs. It demonstrates the health of
The manufacturing
and processing industry’s consumption index is also following positive
trends, rising from 1.5% in 2011 and 3.6% in 2012 to 9.2% in eleven months of
2013.
By
December 1, 2013, the manufacturing and processing industry’s stockpiling
index had risen 10.2% above the previous year’s levels—another positive sign.
Statistics
indicate domestic manufacturing lags behind in growth, management,
competitiveness, and professionalism. Support industries and input material
production is still substandard.
Sustainable
development depends on high productivity, investment, and competitiveness in
both the domestic and FDI sectors.
Lam
acknowledges the Government’s 5.8% growth target is a major challenge in
2014. Achieving its nine specific tasks will require united and assiduous
efforts from all ministries and departments.
World
prices, rising levels of investment, and the forecast spikes in the costs of
commodities will affect the Consumer Price Index in 2014.
The
lessons learned from recent macroeconomic management experiences, together
with monetary and fiscal policy flexibility, should keep a 2014 inflation
rate below 7% well within reach.
The
Haiphong Economic Zone Management Board has just granted an investment
license to
The
US$14 million factory, to sit on 29,810sq.m., is designed to produce 12
million pairs of high-quality stockings a year at the Vietnam-Singapore
Industrial Park (VSIP)
The
project is scheduled to get off the ground in June 2014 and churn out first
commercial products a year later.
Apex
is the third foreign direct investment (FDI) project
The
Ministry of Planning and Investment reports
A
total of US$465 million was disbursed in the reviewed period, a year-on-year
rise of 3.3%.
The
northern key economic region’s ascendancy
The
northern key economic region (NKER), as a leader in economic development, is
expected to account for 32 percent of total national exports.
Prime
Minister Nguyen Tan Dung has approved a master NEKR socio-economic
development plan that incorporates a vision towards 2030 and explicitly
positions the region as an emerging national political, cultural, scientific,
and technological centre.
The
strategic convergence of national resources and competitive advantages makes
the region the nucleus of Red River Delta development, a hub for trade
exchange, international integration, and a status marker within ASEAN and the
global community.
The
plan also elaborates how the NKER is at the centre of national economic
restructuring, growth model renewal, and the next stages of national
industrialization and modernization.
Projections
place regional per capita income at US$5,500 by 2020. The
agro-forestry-fishery sector will contribute 5.5 percent of GDP, the service
industry 45.4 percent, and industry- construction 49.1 percent.
The
NKER wants to reduce the number of regional households formally classified as
poor by 2 percent annually and raise poor household per capita income 2.5–3.5
times every five years. Authorities want at least 80 percent of regional
communes to meet national health standards.
The
NKER is also striving to bring the trained proportion of its labour force to
80–85 percent, with 40–45 percent of workers receiving specialised vocational
training.
Under
its master plan, the NKER’s service industry, trade activities, and cultural
sphere are intimately linked to
It
will concurrently focus on modernising financial and banking services and
cultivating a business environment capable of transforming the capital city
into a finance centre of international standards.
The
NKER prioritises improving the competitiveness of highly localised industrial
sectors with footholds in the global value chain, including electronics,
science and technology, telecommunications, mechanical engineering, ship
building, maritime facilities, high quality steel, construction materials,
pharmaceuticals, food processing, garments and textiles, and leather &
footwear.
The
region wants to encourage industrial sectors that are technologically
advanced, minimise carbon emissions, and produce environmentally products.
The
development of rural areas and agriculture should be linked to the region’s
expanding pharmaceutical and food processing industries.
Industry
and construction is set to grow at a rate of 8.2 percent for 2011–2015, 10
percent for 2016–2020, and 9 percent for 2021–2030.
The
region will develop intensive farming to maximise the income value of its
cultivated area.
Newly
formed fishing industry logitistics centres in Hai Phong, Cat Ba, and Bach
Long Vi Island will be in charge of intensifying offshore fishing while
subsuming smaller scale inshore fishing into more efficient economic activities.
Cattle
and poultry husbandry and aquaculture will be subject to food hygiene and
safety and environmental protection regulations. The region will invest in
building refrigerated warehousing to serve its exports.
The
NKER has outlined a network of “nucleus and satellite” municipalities as a
framework for regional development. Relatively established urban centres such
as Bac Ninh, Vinh Phuc, Ha Long, and Hai Duong will support satellite urban
areas in Son Tay, Tu Son, Xuan Mai, Chi Linh, Cam Pha, Uong Bi, and Mong Cai.
The
NKER divides itself into two sub-regions. The
FDI
down 22 per cent in January
The
country attracted US$397.1 million in foreign direct investment (FDI) during
January 2014, down 22 per cent against the same period last year, the General
Statistics Office reported.
Forty
new foreign-invested projects, capitalised at $211 million, were granted
licences, representing yearly decreases of 51 per cent in the number of
projects and 53 per cent in the level of capital invested.
Six
other projects, however, were given permission to add a cumulative $186.1
million to their existing investment.
There
was good news, though, as January's FDI disbursement saw a slight increase of
3.3 per cent to $465 million, the office said.
During
the month, processing and manufacturing industries made up 47.6 per cent of
the nation's total FDI, luring $189 million, while the real estate sector
accounted for
44.4
per cent, attracting $176.3 million, and other sectors shared the remaining 8
per cent, absorbing $31.8 million.
New
projects were licensed in 12 provinces and cities. Among these localities,
southern Ba Ria –
This
was followed by the
Officials
report that the majority of January FDI capital came from
Last
year, FDI topped $21.6 billion, up 54.5 per cent, according to the Ministry
of Planning and Investment.
Of
this, $11.5 billion has already been brought into the country, an increase of
nearly 10 per cent over the previous year.
Analysts
said this indicated that foreign investors feel confident about investing in
Foreign-invested
enterprises last year added $88.5 billion to the country's exports, a rise of
22.4 per cent from the previous year.
VN's
exports to
According
to Vietnamese trade counsellor in Russia Pham Quang Niem, Russia's accession
to the World Trade Organisation (WTO) in August 2012, and the free trade
agreement with the Customs Union of Belarus, Kazakhstan and Russia that is
expected to be completed by the end of this year, will bring opportunities to
Viet Nam for penetrating a large market with preferential taxes.
After
Niem
also said that the FTA between
During
the past three years, the turnover of Vietnamese exports to
In
2013, the turnover of Vietnamese exports to
Capital
inflow into stock market expected to grow
The
capital inflow into the stock market is expected to grow in the Year of Horse
along with innovations in policies and improvements in the macro-economy.
This
would boost the benchmark indices on both the bourses. During the January 27
trading, the VN-Index on the HCM City Exchange lost 0.66 per cent to close at
556.52 points, while the HNX-Index on the northern bourse gained 0.76 per
cent to reach 74.22 points.
According
to FPT Securities, investors will remain cautious when they return to the
market after the nine-day holiday for Tet (the Lunar New Year). The market
will resume operations tomorrow.
In the
short term, the VN-Index is expected to fluctuate in a narrow band of 550-560
points but the market trends will be positive, FPT Securities said.
In the
long term, experts forecast that the VN-Index could reach 600 points in the
best-case scenario, 550 in the medium-case scenario and 500 points in the
worst-case scenario.
The
stock market in
Foreign
capital was the highlight of blue chips. In December 2013 and January 2014
alone, the net buying value of the foreign investors reached VND2.37 trillion
(US$1.12 billion), reflecting investor confidence in the recovery and
development prospects of the stock market of
More
room for foreign investors at listed companies was a hot topic over the past
few months. Once the regulation was passed, it will boost foreign capital in
the stock market, experts said.
The
State Securities Commission said that the regulation was under consideration
and would be issued soon.
In
addition, a series of large State-owned enterprises such as Vietnam Airlines,
Vinatex and Vinamotor, which are expected to be privatised or offer initial
public offerings (IPO) this year, would help improve the equity supply.
The
founding of the Viet Nam Asset Management Company (VAMC) with its capacity to
handle bad debts is expected to have positive impact on the stock market this
year.
In
addition, the decree about derivatives, expected to be issued this year,
would be another stimulator.
Tuy
Hoa seamen hope for a bumper year
As
many as 77 tuna fishing boats based at Ward 6 Port in central Phu Yen
province’s Tuy Hoa city sailed to the Truong Sa (Spratly) Archipelago on
February 5 on their first offshore fishing voyage this lunar new year.
Tran
Van Dong, together with his nine-person crew, are spending over 150 million
VND (7,050 USD) on the trip. They expect to return home in one month.
Fisherman
Le Duc Tuyen in Phu Dong ward said he is hoping for a successful mission,
adding that he gained almost 80 million VND (3,760 USD) during an expedition
before the Tet holiday.
According
to Captain Nguyen Ngoc Ry from the Tuy Hoa border post, there will be more
than 150 vessels heading to sea by February 11.
Other
boats operating between one and five nautical miles from the shore can bring
back up to 200 kilograms of fish, earning a profit of up to 3 million VND
(141 USD) every day.
Meanwhile
in Quang Ngai province, fishing unions in Binh Son district and Ly Son Island
held ceremony to launch the fishing season in 2014, hoping to catch more than
142,000 tonnes of aquatic products this year.
Positive
year forecast for industrial production
The
industry and trade sector of
Restructuring
will continue to be a priority this year, according to the Ministry of
Industry and Trade (MoIT).
Industrial
production showed signs of recovery in 2013, with the IIP increasing by 5.9
percent and inventories decreasing. However, the macro-economy did not fully
stabilise, consumers continued to budget carefully and free trade agreement
negotiations remained unfinished. In addition, natural disasters and diseases
presented a continued threat.
Deputy
Minister of Industry and Trade Le Duong Quang said that industrial production
of
He
added that technology remained low-level and the support industries did not
receive adequate investment, meaning the country had to depend on imports for
many raw materials.
Nguyen
Tien Vy, MoIT’s Director of Planning Department, said that the industry and
trade sector would hasten restructuring, especially of State-owned
enterprises, to enhance efficiency and competitiveness.
He
added that technology should play a bigger role in production and the
localisation rate should be increased.
According
to the Vietnam Chamber of Commerce (VCCI), 42.5 percent of companies planned
to expand business in 2014 while 50.7 percent would maintain the size of
their businesses.
This
suggested that enterprises felt a better business year was coming in 2014,
said Pham Thi Thu Hang, VCCI's General Secretary.
Hang
suggested enterprises improve their risk management capacity in order to take
advantage of the Government's support policies.
Chairman
of the Vietnam Association of Mechanical Industry (VAMI) Nguyen Van Thu said
that preferential capital sources should be made accessible to enterprises to
help them boost production.-
One
third of
More
than 30 percent of provinces and cities nationwide enjoyed export turnover of
over 1 billion USD in 2013.
According
to data from the General Department of Customs,
The
Red River Delta, Mekong Delta and southeastern regions earned the most, with
five localities from each region exporting over 1 billion USD last year.
In
January 2014, the country earned 10.3 billion USD from exports, down 10.8
percent against the same period last year.
The
decrease has been attributed to the fall in the export turnover of coffee,
tea, rice and crude oil.
Secretary
of the municipal Party Committee Le Thanh Hai stressed that the key task for
the city this year is to make full use of available resources to remove
difficulties for businesses, restore production and expand markets for the
four major industries and nine services sectors.
“The
municipal administration must stand shoulder by shoulder with businesses at
times of difficulty,” he said.
At a
year-end working session with the city’s officials, Prime Minister Nguyen Tan
Dung instructed that the city should continue with measures to stabilise the
macro-economy, particularly controlling inflation at a suitable level and
maintaining stable foreign exchange rates and the gold market.
At the
same time, the city should try to improve the quality of growth and increase
the productivity and added value of its industries in order to perform its
leading role in economic growth and restructuring, both locally and
nationally.
The
city’s growth rate is 1.7 times higher than the national figure, and as the
country’s largest economic hub, it has helped the country achieve a suitable
GDP growth of 5.6 percent in 2013, despite negative impacts from the prolonged
financial crisis and economic downturn worldwide.
As a
result, per capita GDP in the city has increased to 4,513 USD for the year,
and is projected to reach 4,800 USD in 2015.
Foreign
investment in the city totaled 1.7 billion USD for 2013, which was poured
into 450 new and 130 existing projects.
A total
of 80,000 households in the city have escaped poverty during the 2011-2013
period, bringing the poverty rate down to 0.8 percent.
A
major setback for the city recently has been a drop of 5 percent in export
value, which stood at an estimated 26.33 billion USD. In addition, local
banks reported a high bad debt rate at 5.49 percent of outstanding loans.
The
target was approved at a recent meeting of the municipal People’s Council,
which reviewed the implementation of goals set for 2013, and put forward
targets and tasks for 2014.
Under
the targets, the city’s services sector is expected to expand by 9.4-9.8
percent; the industry-construction sector, 8.0-8.8 percent; and agricultural
production, 2.0-2.5 percent, while export turnover will climb 6-7 percent.
In
2013, although meeting with difficulties and challenges caused by global
economic risks as well as the domestic economic downturn, the city attained
three key targets of socio-economic development - it stabilised economic
growth, curbed inflation and ensured social security.
The
city’s GDP growth rate for 2013 is estimated at 8.25 percent (the set target
was 8.0-8.5 percent), up 0.19 percent over the previous year’s figure and
equivalent to 1.53 times the national rate.
The
rise of the consumer price index (CPI ) was kept under eight percent, while
the capital mobilisation of credit organisations saw a rise of 12.78 percent.
During
the year, the city government undertook drastic measures to solve
difficulties faced by enterprises, stabilise and develop production and
business, expand markets and boost exports, as well as to thaw the real
estate market.
It was
reported that about 14,950 enterprises were set up in 2013, up 12 percent
over the previous year, while there was a decrease in the number of business
dissolutions.
The
city also focused on developing the urban infrastructure system by hastening
the construction of many transport projects, contributing to reducing
congestion and accidents.
Remarkable
achievements were seen in the new rural development programme, with as many
as 48 communes in the city achieving all 19 criteria in new rural area
construction at the year end.
Other
fields such as culture, education, science-technology and healthcare were
given priority and heavy investment; national defence and social order were
ensured and reinforced; external relations and exchange were broadened and
promoted.
In
addition, main sectors have basically completed their development plans on
the basis of the city’s socio-economic development strategy to 2020 with a
vision to 2030.
However,
great efforts will be required of the municipal authorities in the new year
to boost exports and budget collection, as the city failed to achieve the
targets in these two fields in 2013.
Environmental
pollution, particularly at trade villages and industrial areas, remains a big
challenge for the city.
Vietnam-South
Asia 2013 trade turnover tops 6 bil USD
Figures
from the Ministry of Industry and Trade's department for Africa, West Asia
and South Asia markets showed that bilateral trade between
In the
region,
Vietnamese
industrial products including telephones, spare parts, machines, computers,
electronics and their accessories accounted for a high percentage of exports
to
The
combined export turnover of these products last year was 1.5 billion USD,
accounting for 70 percent of the country's total exports to
Export
turnover to
Statistics
from the General Department of Customs also revealed that last year's total
bilateral trade turnover between
For
However,
investment cooperation between
By the
end of last year, India had 77 projects invested in Vietnam, with total
capital of 250 million USD, while Sri Lanka had nine projects; Pakistan , 10;
and Bangladesh, two.
Vietnamese
businesses invested in only three projects in India, with total capital of
860,000 USD, and one project in Bangladesh, Vietnam and countries in the
region have targeted strengthening their multi-faceted cooperation efforts in
the future to better exploit their full potential./
Insurance
market seeks to thrive
Insurance
is an important sector to any country and it has proved itself a potential
industry in
Ensuring
financial safety for production and trade is a regular requirement to
insurance businesses.
The
important intermediary financial market has been officially run since 1993
when the Government issued Decree 100 on establishing and organizing
insurance businesses in Viet Nam.With the participation of groups and
multinational corporations, the market has recently seen all forms of
business ownership, which are regulated by a modern legal system and a
specific strategy.
According
to the Ministry of Finance, the market with a 20%/year average growth is
attractive to foreign insurance companies. The premium turnover reached
VND40,968 billion ($1.9 billion) in 2012 and VND20,922 billion ($938 million)
in the first half of 2013.
The
local insurance businesses have grown by learning international-standard
management approaches and experience of international companies and accepting
fair competition. Though facing the pressure of making profits and
limitations on advertising costs, State-owned companies have competed
successfully with international insurance businesses.
The
insurance market has worked as an important medium-term investment channel
for the national economy. In the first half of 2013, insurance businesses
re-invested approximately VND100 trillion ($4.7 billion) in the economy,
doubling the figure in 2008. Through diversified and effective investments in
socio-economic development projects, they have provided a shield for the
national economy.
The
global economic downturn in the past is still challenging the health of the
insurance market.
Therefore,
to realize its set targets for the 2011-2015 period, there is a need for it
to improve the legal system, enhance the safe performance, management and
competitiveness of players, as well as promote international cooperation and
integration.
Source:
VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Năm, 6 tháng 2, 2014
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