BUSINESS IN BRIEF 28/6 US$748 million for national power transmission project The National Power Transmission Corporation will allocate about US$748 million for the national power transmission project, nearly 27 percent higher than last year’s level. Over the past five years, the corporation has mobilised almost US$1.74 billion including, US$796 million from domestic financial institutions and banks, and US$943 million from international organisations, namely the Nippon Export and Investment Insurance, the World Bank, the Asian Development Bank (ADB) and the French Development Agency (AFD). With additional funding it hopes that key hydro-electric and thermal power plants in the country will be completed as scheduled. Australia, Vietnam cooperate in science-technology Vietnam and Australia on June 26 inked an agreement on scientific and technological cooperation, marking a new step forward in bilateral cooperation in this field. Signatories to the agreement were Vietnam’s Minister of Science and Technology Nguyen Quan and Australia’s Science and Research Minister Don Farrell. Addressing the signing ceremony in Canberra city, Minister Quan made a brief review of Vietnam’s recent achievements in the field of science and technology. He stressed that the Vietnamese Government has adopted the National Strategy for Scientific and Technological Development until 2020, with the goal of developing an advanced scientific and technological foundation. For his part, Farrell affirmed the signing of the agreement is an important step for Australia in a century of Asia, contributing to reinforcing Vietnam-Australia bilateral ties. He said issues of the two countries’ common concern are climate change impact, suitable adapting solutions, and low-carbon economic development. The cooperation in science and technology between Vietnam and Australia was established in 1992 on the basis of a Memorandum of Understanding reached during Prime Minister Nguyen Tan Dung’s visit to Australia in 2008. Vietnam boosts trade ties with Egypt, Israel, Sudan A Vietnamese trade delegation led by Deputy Minister of Industry and Trade Le Duong Quang is on a fact-finding tour of three African countries. At a working session with the Egyptian Ministry of Foreign Trade and Industry (MFTI) on June 26, the two sides discussed opportunities for cooperation in industry, agriculture, fisheries, tourism and pharmacy business. Quang said despite Egyptian political disorder in 2012, two-way trade turnover hit around US$300 million, up 12% from a year earlier, with Vietnam’s exports to Egypt rising 16% to US$297.1 million. He insisted that the two sides actively prepare for the 5th meeting between the two inter-governmental joint committees and the 50th anniversary of Vietnam-Egypt diplomatic ties. Quang affirmed that the Vietnamese Embassy and Chamber of Commerce in Egypt will be a bridge to the promotion of trade exchange between the two countries. The host expressed hope that Vietnam would cooperate with Egypt in processing products for exports as many processing zones are located in a favourable geographic position. Earlier, from June 22-25 the Vietnamese delegation visited Israel. It worked with the Ministry of Economy and Trade and the Ministry of Environmental Protection and attended a business conference. After visiting Egypt, the delegation will fly to Sudan for meetings with government officials and business leaders to learn about the local market trend and trade policy. 170 businesses attend timber fair Around 170 domestic and foreign timber businesses will showcase their products at a fair in Binh Dinh province from June 28 to July 3. On display at the Timber and Forest Product Fair, the second of its kind, are household and office furniture, forest and fine art stone products. The third congress of the Vietnam Timber and Forest Product Association will be held during the fair, along with a seminar on Vietnam’s wood processing industry. Vietnam currently ranks first in Southeast Asia, second in Asia and sixth in the world in terms of timber exports. Its major importers are the US, EU and Japan. Timber exports have increased sharply since 2006 and reached US$4.67 billion in 2012. They are expected to bring in US$5.5 billion this year. Wood processing and manufacturing businesses in Binh Dinh province resumed production after difficult times. They expect to earn US$267 million from exports this year. The first fair was held in Binh Dinh in 2011, seeing a number of contracts signed worth more than US$5 million in total. Bosch expands operations in Vietnam The world’s leading technology and services supplier Bosch has announced that it will continue expanding its operations in Vietnam following success in 2012. Last year, the German group’s global sales reached US$68.3 billion (up 1.9 percent against 2011), with Asian sales fetching US$16.4 billion. In Southeast Asia alone, its revenue was US$912.6 million, of which US$286.4 million came from the Vietnamese market, up 31.3 percent. At a press briefing in HCM City on June 26, Vo Quang Hue, Managing Director of Bosch Vietnam, said Bosch is the largest European investor in Vietnam, with its facilities operating in Hanoi, HCM City, Danang and Dong Nai. Sales of its products last year saw growth rates of between 14 and 40 percent, making Vietnam the group’s second key market in Southeast Asia. Bosch considers Vietnam as its strategic investment destination in Southeast Asia, said Hue. Despite the impact of the global economic recession, the number of the groups employees increased 36 percent in 2012 to 1,200. In 2013, Hue said Bosch Vietnam will market new products and solutions and open new distribution networks across the country. In the next 3-4 years, Bosch Vietnam is planning to hire up to 500 research and development engineers. In the future, the group will help build vocational training centres meeting German standards, to supply human resources to the company.    Brazil investigates Vietnamese cold-rolled steel The Brazilian Department of Trade Defense (DECOM) will hold the final hearing on an anti-dumping investigation into cold-rolled steel imported from Vietnam and other countries on July 16. Brazil has accused China, Germany, the Republic of Korea, Finland, Taiwan and Vietnam of dumping their steel products on its market. The Vietnam Competition Authority, under the Ministry of Industry and Trade, said DECOM asked defenders to send their presentation in writing 10 days before the hearing and revised reports 15 days after the hearing. The final decision will be announced in August 2013. On April 13, 2012, DECOM under the Ministry of Development, Industry and Foreign Trade (MDIFT) began an anti-dumping investigation into cold-rolled steel imported from those six countries. On December 19, 2012, it held the first hearing with relevant agencies, including importers, exporters and relevant government officials, who presented comments and opinions on the issue. Vietnam, India boost trade ties India has become one of the ten largest trade partners of Vietnam, with annual bilateral trade increasing 12.2%. The information was released at a roundtable conference on India-Vietnam investment and trade held in HCM City on June 26. According to the Ministry of Industry and Trade (MoIT), Vietnam’s exports to India grow by 46.3% annually, while annual import growth is 1.1%. Two-way trade value in the first five months of this year hit US$2.24 billion, with US$1.02 billion coming from Vietnamese exports. By April, India had more than 70 valid projects in Vietnam, with a total investment capitalization of around US$252 million. In addition, cooperation in industry and energy has been developing well through investment and joint venture projects in garments, footwear, chemical and steel. Le Thai Hoa, Deputy Head of MoIT’s West-South Asian Department, said cooperative potential between the two countries is huge, especially in trade, industry and energy. The signed ASEAN-India Trade in Goods Agreement (AITIG) will give fresh impetus to economic, trade and investment between Vietnam and India, he said. To take advantage of the signed agreements on trade, goods and services active contribution is required from businesses of two countries, while , both countries’ relevant agencies should provide market information for the business community. Talleen Kumar, Head of the Department of Industrial Policy and Promotion, said in recent years India has accelerated reform to promote international economic integration and attract foreign investors by issuing transparent policies, limiting administrative procedures and ensuring a supportive business environment. Foreign investors in India will be introduced and guided to use online services to apply for investment licenses, and protect trademark and intellectual property rights. At the conference, Indian businesses operating in food processing, seafood, automobile spare part manufacturing, logistics, infrastructure, chemical, energy and telecommunications, had a chance to meet directly with their Vietnamese partners. Vietnam, Brazil eye US$2 billion trade this year Two-way trade between Vietnam and Brazil is well on track to reach US$2 billion by the year’s end, according to the Vietnam Trade Office in Brazil. During the first half of this year, bilateral trade hit US$970 million with US$500 million coming from Vietnamese exports, fulfilling its target set for the whole year. The impressive export turnover has revealed the great efforts made by Vietnamese enterprises to penetrate and exploit business opportunities in the market. Bilateral trade is expected to reach US$5 billion by 2018 and US$8 billion by 2020, creating foundation for the two countries to successfully improve their economic, trade and investment climates and boost the confidence of investors. The Trade Office suggested domestic firms better utilise opportunities in Brazil - a huge market with strong purchasing power and an increasing demand for imported goods. Currently, the market share of Vietnamese exports accounts for only 0.3% of import demand in Brazil. Alongside seafood, footwear, electronic parts, textiles and garments, Brazil also has a strong demand for cosmetics and medicine. The country is also seeking foreign investment in sectors such as seaports, ship building, oil and gas and bio-fuels. Brazil opened a consulate earlier this year in Ho Chi Minh City to support businesses in seeking partners. Vietnam, Custom Union hold second FTA negotiations The second round of Free Trade Agreement (FTA) negotiations between Vietnam and the Russia-Belarus-Kazakhstan Customs Union was held in Moscow from June 20-25. Both sides discussed issues related to commodity exports, services, investment and customs cooperation, the application of sanitary and phytosanitary measures (SPS), the Agreement on Technical Barriers to Trade (TBT), and legal articles and institutions. Vietnamese Minister of Industry and Trade Vu Huy Hoang and the Eurasian Economic Commission (EEC) Trade Minister Andrei Slepnev underscored the need to conduct negotiations in line with the World Trade Organization (WTO) rules governing sensitive areas and development levels of each side. They agreed on extensive consultations to move towards the third round of negotiations scheduled for September 9-13 in Belarus. Australia highlights the quality of Vietnam’s seafood products A press conference was held in Hanoi on June 25 to launch a promotional campaign for Vietnamese aquatic products in Australian press. At the press briefing on the fact-finding visit by an Australian delegation, the President of the Seafood Imports Association of Australia Inc. (SIAA), Norman Grant, highlighted the quality of Vietnamese seafood products. He said Australia is a potential market as the country has to import 70 percent of seafood products a year. In the next ten years, Australia will need as much as one million tonnes of seafood products for domestic consumption. The Australian delegation consisting of representatives from SIAA and some journalists affirmed that it is quite safe to use seafood products imported from Vietnam. Independent journalists from Australia will visit Vietnam soon to get an objective judgment about the safety of Vietnamese seafood production. According to the Vietnam Association of Seafood Exporters and Producers (VASEP), there are favourable opportunities for Vietnamese seafood businesses to promote exports to Australia if they can meet strict requirements for food safety and hygiene.   Six-month GDP growth estimated at 4.9 percent Vietnam’s gross domestic product (GDP) in the first six months of 2013 was estimated to grow by 4.9 percent, almost equal to last year’s figure. The Ministry of Planning and Investment’s report said the agriculture-forestry-seafood sector achieved a growth rate of 2.07 percent; industry and construction, 5.18 percent; and services 5.92 percent. The country’s GDP growth in the second quarter of 2013 was 5 percent, up 0.24 percent against the first quarter. Although the GDP growth rate in the second quarter and the first six months were not as high as expected, but reasonable when there remained a lot of difficulties for both domestic and global economies to overcome. According to the Ministry the Index of Industrial Production (IIP) increased month-on-month to 5.2 percent in the first six months. In addition, there were some positive signs of economic development with the number of newly registered businesses rising 7.8 percent and about 9,300 enterprises resuming their operations in the same period. Siemens Vietnam Day in HCM City The Siemens Vietnam Day will take place in Ho Chi Minh City on June 28 tomark the 20th anniversary of Siemens Vietnam, one of the most successful multinational companies in Vietnam. Siemens Vietnam has engaged in many projects in the fields of energy, industry, health care and transport in the country, said Dr. Pham Thai Lai, Siemens Vietnam General Director. During the Siemens Vietnam Day in Hanoi, Siemens and the Vietnam Motors Industry Corporation (Vinamotor) launched the first bus model using ELFA technology, which helps slash fuel consumption by 50 percent, contributing to reducing gaseous emission to the environment. The company pledged to provide most advanced and efficient technologies for the country’s electricity production, along with new solutions for the oil and gas industry’s economical and sustainable exploitation of natural resources. Vietnam expands int’l public finance cooperation Hanoi hosted a June 25 public management partner group conference discussing the financial sector’s major projects and action plans as dictated by the overarching financial strategy with a vision until 2020. The Ministry of Finance (MoF) reported that with support from foreign partners including the Japan International Cooperation Agency (JICA), the European Union (EU), and the World Bank (WB), its implemented projects have delivered remarkable results in public administrative reform.   The MoF also presented a document formalising an action plan based on the broader financial strategy. It will help donors provide financial and technical support in a manner complementing each other’s contributions. Financial restructuring and effective public management relies on better coordination between foreign donors and the Vietnamese Government. The mid-term group conference is held every six months, offering donors and the MoF an opportunity to review progress made in public finance management reform and create new scope for cooperation. MoF representatives said its and its partners’ direct involvement in public finance management reform, information exchanges, and policy dialogues will strengthen these valuable established relationships.    RoK helps Vietnam improve design capacity Khanh Hoa’s provincial capital Nha Trang City has invited nearly 200 staff from Vietnamese businesses to attend industrial design training courses running over June 25–27. The courses are part of a 2010 Vietnam-Republic of Korea (RoK) project aiming to improve the former’s industrial design capabilities. Leading RoK experts will instruct attendees on the fundamentals of graphic design, product packaging design, and brand design. The courses focus on responding to consumer preferences and improving product quality and market reputation. There will also be lectures on the RoK’s design industry and policies and the potential for green architecture design in Vietnam. Ta Hoang Linh, the trade promotion agency’s deputy head, noted design is integral to the success of product trademark promotion, particularly on the world stage. The courses are co-organised by the Vietnamese Ministry of Industry and Trade’s Trade Promotion Department and the RoK’s Ministry of Knowledge Economy’s Institute of Design Promotion.  Hanoi hosts green finance and banking workshop The Vietnamese Ministry of Finance, the State Bank of Vietnam (SBV), and the GIZ’s Macroeconomic Reform Programme co-organised a Green Finance and Banking workshop in Hanoi on June 25. The workshop is part of the GIZ’s Vietnamese Macroeconomic Reform Programme, commissioned by the German Federal Ministry for Economic Cooperation and Development. The advisory function the programme assigns to GIZ is the first time it has served in such a role since its Vietnamese inception in 1993. German, UK, and French experts shared their experiences with Green Fiscal and Environmental Taxes from a global fiscal policy reform perspective and ran through the history of green credit lines in developed countries. Vietnam presenters clarified the interaction between growth strategy and green finance and other issues related to environmental taxes and environmental risks in bank credit and securities listings. Ministries, agencies, research institutes, and universities are included in a policy framework facilitating continuous feedback, recommendations, and planning ideas for specific long-term policies. The policies aim at encouraging financial institutions, banks, and financial firms to establish green finance and green credit programmes supporting the future implementation of the Government’s green growth strategy. Global experience shows successfully balancing environmental concerns and economic growth requires broad social consensus and the effective coordination of ministries and agencies. The Vietnamese Government appproved the 2011–2020 national green growth strategy, which includes a vision to 2050, in September 2012. Following through on this green growth and climate change adaption strategy will not only contribute to environmental protection, gas emission mitigation, energy efficiency, job creation, and a better quality of life, but also assist with economic restructuring and secure a future of sustainable development for the country as a whole. Price of poultry and pork falls, feed hikes While feed price has seen a continuous rise in the last six months, price of poultry and pork has fallen by 40-46 percent compared to the beginning of the year, said the Ministry of Agriculture and Rural Development on June 25. Pork price has continued to fall since the beginning of the year (Photo: SGGP) According to the Ministry, the breeding industry has faced much difficulty in the last six months, especially in the southern region. Selling price has been lower than cost price causing huge losses to breeders. A kilogram of industrial chicken fetched VND32,500 in January but has now dropped to only VND17,000-19,000 a kilogram in the southern region. Egg price has plunged from VND24,000-27,000 per pack of ten to VND18,000-19,000. While raw material for feed production has escalated by 24-42 percent. New chairman assigned to Vietnam Rubber Group The Vietnam Rubber Group, which was recently accused of land grabbing in Laos and Cambodia by Global Witness, has a new chairman. One June 24, the Prime Minister assigned Vo Sy Luc to become Vietnam Rubber Group's new chairman after the seat was left empty from January 2012. Luc will officially replace Le Quang Trung who retired last year. The leadership was temporarily taken by the group's CEO Tran Ngoc Thuan. In 2008, the chairman Tran Kien Quyet was dismissed for "violating regulations on land management while he was still director of the group's member company, Tan Bien Rubber Company." Ho Xuan Hung, Deputy Minister of Agriculture and Rural Development took the reins until March 2010 and passed the position on to Le Quang Trung. The group was recently accused of land grabbing and destroying forest with Hoang Anh Gia Lai Group by Global Witness. The group only made one statement to oppose the accusations a month later. True relationship between chairmen of Bao Son and Bao Long groups revealed Chairman of Bao Son Group, Nguyen Truong Son, exposed more details about the nature of the case which led to the arrest of the chairman of Bao Long Medical Group. On Saturday, June 15, the HCM City Police arrested Nguyen Huu Khai, following allegations that Khai had violated the law and misappropriated assets belonging to Bao Son Tourism and Construction Investment Group. According to Son, they became quick friends after Khai successfully treated him from a disease some 20 years ago. Son said that Khai approached him last Tet holiday, saying that he was in trouble because of a VND20 billion debt (USD960,000) with an interest rate of 21% per month. At that point Son decided to give Khai a loan of VND18 billion without a detailed contract. "I don't know why I conducted such a large transaction with such a simple contract. But Khai did say that he may be killed if he did not repay his debts. The next day I loaned him another VND12 billion." Son said. Khai allegedly continuing to ask for more money, admitting that his actual debt had been VND286 billion and the interest rate was VND11 billion per month. "Khai came to me and said that he would be too ashamed to ask for any more loans. Instead he proposed sell me all his assets. Of course he got the better end of this deal because he was the one who appraised their value," Son said. Son affirmed that the contract is legal. But he added that Khai asked Son to diverge from the contract, as if they were to remain bound by it, Bao Long Group would disappear as an entity. Bao Long Group would have had to pay VND75 billion in sales taxes. "So Khai asked me to pretend I had bought share in the Bao Long Group so that he could evade taxes. I ended up buying 100% stake in the group for VND227 billion. I was warned many times that he would shovel off his debt onto me, and in the end that's exactly what happened," he said. ANZ expert warns inflation resurface due to medicine price hikes An ANZ Bank expert has said that Vietnam may face the risk of inflation resurfacing in the coming time if the prices of medicine and health services continue rising. The group price is also the reason for Vietnam’s inflation surge of 17% in September 2012. Medicine prices have increased up to 13.88% compared to the beginning of this year, with health services posting a rise of 17.39%. The expert forecast that Vietnam’s inflation rate would reach 6-8%. The price rise of food would be another major pressure on inflation.                                                                                                                                     According to the General Statistics Office of Vietnam, CPI in June increased 0.05% against May. The CPI in the first half of the year rose 2.4% against last December and 6.69% against last June. In June, petrol prices increased 0.62%, while food prices slightly reduced 0.03%. The reduction of rice and food prices was due to high supply of those products, in addition to the fact that consumers consumed less poultry and cattle due to diseases at home and in neighbouring countries. Meanwhile, garments, textiles, leather and footwear saw the highest increase in June at 0.42%. Prices surged 0.32% for beverages and tobacco and 0.4% for culture, entertainment and tourism products. JICA wants Metro Line 1 development accelerated The Japan International Cooperation Agency (JICA) wants HCMC to speed up development of Metro Line No. 1 to prevent the cost from surging, said Mutsuya Mori, new chief representative of JICA in Vietnam. At the meeting with Mori on Tuesday, HCMC Chairman Le Hoang Quan informed work had started on the overhead section of Metro Line No. 1 and a contract had been signed for locomotive and wagon purchase. The only remaining problem lies in the construction package No. 1 for the underground section from Ben Thanh Market to Ba Son Shipyard. Construction has not begun because the contractor asked for a high price, posing a need to select another contractor. For Ben Thanh central station, the city’s leader hoped JICA would provide funding and technical advisory. He said the city intended to invite Japanese investors to join development of this component under the public-private partnership (PPP) format. Mori said the city should quickly complete this project to move on to other metro lines, saying that if this project was delayed further, its cost would surge. In regard to the construction package No. 1, he suggested JICA and HCMC should negotiate with the contractor over a new price, rather than conducting another bidding, which could take 6-7 months, affecting the progress of the project. Replying to the proposal for financial and technical aid for Ben Thanh central station, he said JICA was making a plan for funding. However, because of the fluctuations in the exchange rate between the yen and the U.S. dollar, he could not tell for sure whether JICA could finance the project or not. Funding for other projects will be considered based on their progress, said Mori. Chairman Quan suggested the two sides have a meeting and pay a visit to the construction site every quarter to jointly deal with any problem arising. Vietfish attendants pin hopes on 2013 outlook Many companies attending the Vietnam Fisheries International Exhibition 2013 (Vietfish 2013) have said they are pinning high hopes on this year’s business outlook. Speaking at the opening of the event in HCMC on Tuesday, Le Van Quang, chairman of Minh Phu Seafood Group Joint Stock Company, said his firm had set a target of achieving 20-25% growth for 2013. Widespread shrimp deaths have been reported in many exporting countries such as Thailand, Indonesia and Mexico, he said, and the shrimp mortality rate is up to 80% in certain nations. In the meantime, shrimp demand of major markets remains huge, pushing up shrimp export prices, he added. Tran Van Han, deputy general director of Hung Ca Company, said his firm is looking to increase its sales by 20% to US$55 million this year. Nguyen Van Kich, director of Cafatex Company, said his entity is boosting the processing of value-added products for export, especially for the Japanese market. “Despite tough export conditions, we have set a sales target which is equivalent to or higher than last year’s figure.” At Vietfish 2013, Normal Grant, chairman of the Australian Seafood Importers Association, said Vietnamese shrimp and tra fish products are already present in many supermarkets in Australia like Woolworths, Coles, Aldi and Costco. Seafood demand of Australian consumers is big, he said. “Vietnamese seafood sales at Australian retail networks might double or treble in the next five years,” he forecast. Australia now is the fifth biggest importer of Vietnam’s seafood, with tiger shrimp being the most favorite. Tiger shrimp exports to Australia amounted to US$17 million from January to April, accounting for 65% of Vietnam’s total shrimp exports there. After tiger shrimp, Vietnamese tra fish is also a key seafood product for the Australian market. US$4-billion casino project in Phong Nha moves on South Korea’s Zeta Plan and Investment is still determined to pursue the development of a mammoth entertainment project, including a casino, in Phong Nha-Ke Bang National Park in the north-central province of Quang Binh, an official said. The firm is going to call for more South Korean partners to jointly develop the huge project worth an estimated investment of some US$4 billion, said a senior official from the investment promotion center of Quang Binh Province, who requested anonymity. Zeta Plan and Investment, a group that brings together South Korea’s leading financial and technological companies, has prepared an overall zoning plan accordingly. “After the province recommended the location, the investor has made surveys and drafted an overall plan and intends to go to South Korea with provincial officials to attract more investors to pour money into the costly scheme,” the source said. Quang Binh Province’s government signed a memorandum of understanding (MOU) with Zeta in September, 2012 on strategic socioeconomic cooperation, and the aforesaid entertainment area scheme is part of the MOU. The province then introduced to Zeta a location in Tram Hamlet in Son Trach Commune and Chay Lap Hamlet in Phuc Trach Commune in Bo Trach District for the project’s development. The source declined to disclose the date of Zeta’s official investment in the scheme but informed the recreational complex will have up to six components such as a hotel and a city in the mountain, an outdoor entertainment area and another entertainment area in the province’s cave system. Zeta therefore wants to lure more investors to contribute capital to do the job, the source added. At the same time, Zeta has also joined forces with Quang Binh to promote tours taking South Korean students to the province as visitors. In a related development, Taiwanese air carrier TransAsia is seeking approval from Quang Binh Province’s government to launch air services from Taiwan to Dong Hoi Airport. TransAsia told the province it wants to open flights in August. Phong Nha-Ke Bang National Park has a total area of around 85,700 hectares encompassing ten communes in Bo Trach, Minh Hoa and Quang Ninh districts. The national park has three areas - a strictly-protected area of nearly 65,000 hectares, a 17,500-hectare ecological preservation region and a 3,400-hectare administrative and service zone. Footwear exports post strong growth Vietnam’s footwear exports to many foreign markets have grown strongly since the beginning of the year, according to the General Department of Customs. They had amounted to more than US$3.6 billion as of the middle of this month, growing 14.5% year-on-year, the customs department reports. Footwear exports to the EU and the U.S., the two biggest importers of Vietnam, posted a year-on-year surge of 8.2% to US$1.09 billion and 20.4% to US$1.04 billion respectively from January to May. The two markets contribute a combined 66.3% of Vietnam’s total footwear export value. Vietnam’s footwear exports to several other markets also marked strong growth Jan-May. For instance, footwear exports to Thailand picked up over 43% year-on-year to nearly US$10 million while footwear imports from Vietnam to Argentina were over US$18 million (39%), Israel US$6.7 million (35%), Slovakia US$31 million (33%), and Russia US$33.8 million (over 31%) in the period. Diep Thanh Kiet, vice chairman of the Vietnam Leather and Footwear Association (Lefaso), earlier reported footwear exports to the U.S. as the second biggest market of Vietnamese footwear and leather increased sharply in the first five months as U.S. enterprises have shifted to placing orders at Vietnamese makers to take advantage of the nation’s forthcoming signing of the Trans-Pacific Partnership (TPP) agreement. With the nation’s TPP membership, the average tariff imposed on Vietnamese footwear and bags shipments to the U.S. will be revised down to 0% from the current 14.3%. U.S. importers will enjoy more benefits from the tariff reduction than Vietnamese footwear companies as subcontractors. Despite worldwide economic woes Vietnam’s footwear and leather exports still grew 15% last year, with footwear exports bringing home US$7.2 billion and bag exports US$1.4 billion. The remarkable growth is partly due to rising labor costs and political policy changes of some nations towards China, the world’s biggest footwear and leather supplier, Kiet said. Numerous import nations therefore have switched from China to buying Vietnamese products, he added. Intel continues search for local suppliers Intel Products Vietnam Co. Ltd. is looking for more local suppliers to raise the ratio of local content in the products it manufactures and assembles at its facility in Saigon Hi-Tech Park. Intel Vietnam on Tuesday organized the Local Supplier Fair at its factory to offer local suppliers a chance to study the needs of Intel. On this occasion, Intel presented information about its semiconductor assembly and test facility to local enterprises. In addition, the company unveiled its production strategy with the criteria for supplier selection and its commitment to development of supporting industries. Sherry Boger, general manager of Intel Products Vietnam, said the factory of Intel Vietnam was developing well and would further expand production. “This event is a great opportunity for potential local suppliers to understand more about Intel and what we are looking for, as well as to help us develop local supply chains for our long-term business in Vietnam,” she said. Jeff Prunty, director of global sourcing and procurement at Intel, said the majority of components for production at the Intel Vietnam plant are now imported from other countries where Intel factories are located, mostly from Malaysia. Local content in the products made at the Intel Vietnam factory makes up a fraction, at only 10%, but this offers a chance for local component manufacturers and service providers to become suppliers for Intel, said Prunty. The company wants to find good local suppliers to cut costs in a bid to enhance its competitiveness and promptly address the demand for mass production, he said. He believed that if local suppliers for Intel Vietnam fulfilled their role, they could join Intel’s global supply chain via exports to the countries with Intel factories. “Local suppliers for Intel Malaysia have exported their products to the Intel facilities in China and Vietnam,” he said. Still, Intel remarked the capacity of domestic enterprises was very limited. They now can supply simple products only. Intel currently has nearly 20 local suppliers, most of whom are joint-ventures of wholly foreign-invested companies, whereas the company is looking for Vietnamese suppliers. Intel has committed to a total investment of US$1 billion in the semiconductor assembly and test facility, which began production in 2010. By the end of 2012, Intel Vietnam’s export value had totaled over US$1.6 billion and the company had employed over 1,000 workers. When reaching its full capacity, the plant is projected to increase its export value to US$20 billion. Cocoa sees chance for stronger export to Europe Vietnam has shipped the bulk of its coffee to Europe via Belgium, and in the long term, it is expected that Belgium will also be a gateway for Vietnam’s cocoa exports, said Belgian Ambassador to Vietnam Bruno Angelet. Currently, 80% of Vietnamese coffee bound for Europe goes through two international seaports in Belgium. After coffee, it is expected cocoa will gradually become a key farm produce shipped to Belgium, said Angelet. He was speaking at a roundtable named “Promotion of Belgian Economic and Commercial Potentialities” held at the Saigon Times Group head office in HCMC on Monday. Soil conditions in Vietnam are very suitable for growing cocoa, he remarked. Currently, a Belgian enterprise is joining hands with farmers in Ben Tre and Binh Duong to develop cocoa zones and operate a chocolate factory whose products are exported to Europe. He expressed a great concern over the fact that farmers in a number of central and southeastern provinces are chopping down cocoa trees to switch to other crops. To prevent farmers from cutting down their cocoa trees, there should be support and connection between farmers and traders, processors, exporters and the State, forming a link in the supply chain, the diplomat said. An advantage of Vietnamese firms in the future is to export chocolate material to the world’s famous confectionery makers with factories in Belgium and other European countries, he told the Daily. Tran Van Lieng, CEO of Vietnam Cacao Joint Stock Corporation, said cocoa trees grown in Vietnam produced high-quality beans, but their sales were not really strong. He hoped that through the Belgian Embassy Trade Office in Vietnam, local cocoa traders would soon find opportunities for cooperation with European chocolate and confectionary producers. Tra fish farmers suffer losses on price fall Tra fish farmers are incurring big losses as the local price has tumbled further though tra fish exports have remained relatively stable this year. The total tra fish export value declined 1.5% year-on-year to nearly US$709 million as of the end of last month as a result of falling demand from Europe, the Vietnam Association of Seafood Exporters and Producers (Vasep) reports. The general export business, however, remains stable, Vasep said. Tra fish export to the U.S., meanwhile, jumped 16.4% year-on-year to more than US$170 million from January to May, a pretty high growth rate despite the anti-dumping tariffs imposed on frozen tra fish fillet imports from Vietnam by the U.S. Department of Commerce (DOC). Vasep ascribed stable exports to the U.S. to the fact that the U.S. customs has temporarily put on hold the high tariffs as per the recent administrative review by DOC after Vietnamese companies filed claims to the U.S. Court of International Trade (CIT) in April, 2013 to protest the move. Regarding tra fish exports in the first months of the year, Nguyen Van Dao, general director of Go Dang Joint Stock Company (Godaco) in the Mekong Delta province of Tien Giang, said except for the EU market with lower demand, purchasing power of global markets as a whole remains strong. However, prices of tra fish materials at home have plunged to the record low in the Mekong Delta in the past three to four years. According to the An Giang Fishery Association (AFA), tra fish is bought at a mere VND19,000-20,800 a kilo for the white-meat type by local seafood processors based on deferred payments. However, for contracts with payment at sight, the price of white-meat tra fish has shrunk to VND18,000-19,000 a kilo, said Nguyen Van Sang, a trader in An Giang’s Chau Phu District. This is the lowest price over the past several years. Up to 80-90% of tra fish farming areas have been abandoned in An Giang, Sang said. Farmers in the delta, meanwhile, complained that they are incurring a loss of at least VND5,000 for one kilo of tra fish for export processing. SBV sells more gold at auction The State Bank of Viet Nam (SBV) sold one tonne of gold yesterday in its 35th gold bar auction in the capital city. SBV set the reference price at VND38.65 million (US$1,840) per tael for 26,000 taels. Eight credit institutions and enterprises bought gold bars. The highest price was VND38.63 million ($1,839.50) and the lowest was VND38.57 ($1,836.60). The auctions aim to balance supply and demand and stabilise the market. Out of 978,000 taels offered, 891,000 have been sold. According to the SBV's latest report on the gold market, the bank is now checking applications by jewellery manufacturers seeking to import raw gold. Last April, the Gold Trading Association asked for more enterprises to be allowed to import gold. The association's petition pointed out that while SBV's Decree 24 allowed eligible enterprises to obtain licences for importing raw gold, so far only a few enterprises were allowed to do so. If enterprises could import raw gold, the gap between the price for gold in Viet Nam and the world price would go down, the association claimed. Additionally, the move would lower the local price for jewellery to improve local consumption and increase competitiveness in the international market. Tuna firms use dolphin-friendly nets to continue global exports Fifteen Vietnamese tuna processing and fishing businesses have been verified as being Dolphin Safe to export tuna to the EU, US and Australia, according to the latest report of the Earth Island Institute. The institute is reported to have required Vietnamese tuna exporters not to use drift gillnets to catch tuna, based on a report from the Western and Central Pacific Fisheries Commission on tuna exploitation in Viet Nam's central coastal provinces of Binh Dinh, Phu Yen and Khanh Hoa. The institute warned Vietnamese tuna exporters that they might not be granted the Dolphin Safe Tuna label because drift gillnets affected the dolphins' living environment and the marine ecosystem. The institute required the businesses to satisfy their concerns, the Viet Nam Association of Seafood Exporters and Processors (VASEP) said. These 15 Vietnamese tuna exporters confirmed they did not use materials exploited from drift gillnets because tuna caught with them did not meet the criteria for exports. The exporters' association said if its members were crossed off the list of Dolphin Safe certification, they would be unable to sell tuna in major markets in the world. Vietnamese tuna processing and fishing businesses said the institute also recommended that Vietnamese tuna exporters label all gillnet free tuna products with State certifications. The businesses include Kylan Seafood Processing Joint Stock Company, United Seafood Packers Joint Stock Company, Binh Dinh Fishery Joint Stock Company, Pataya Food Vietnam Co, Hai Vuong Co and Highland Dragon Enterprises. Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR