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BUSINESS IN BRIEF 14/3   2010-03-14 - VietNamNet

2010 Buon Ma Thuot Coffee Festival to kick off
 
The Ministry of Culture, Sports and Tourism has agreed to a plan to organise the Buon Ma Thuot Coffee Festival in 2010 in the Central Highland province of Dak Lak.

The event aims to boost the development of the Vietnamese coffee trademark and boost its export to foreign markets.

Similar festivals were held in 2005 and 2008, while a coffee cultural week took place in Hanoi and Ho Chi Minh City in 2007.

The Dak Lak provincial People’s Committee has proposed that the Government and the Ministry of Trade and Industry include the Buon Ma Thuot Coffee Festival in the national key trade promotion programme, which is launched every two years.

Vietnam-Singapore trade increases sharply 
 
Bilateral trade between Vietnam and Singapore has increased by fivefold to more than SGD50 billion since the two countries signed a framework agreement to connect their economies in 2005.

The figures were revealed at a conference held in the Central Highland resort of Da Lat on March 13 to review five years of implementing the Framework Agreement on Vietnam-Singapore Connectivity.

The meeting was co-chaired by Vietnamese Minister of Planning and Investment Vo Hong Phuc and Singaporean Minister of Trade and Industry Lim Hng Kiang.

Currently, Singapore is the fifth largest foreign investor in Vietnam, with 792 operational projects capitalised at US$17.3 billion. They focus on the processing and manufacturing industries, real estate, infrastructure construction, entertainment, services and the hospitality industry. These projects alone are valued at US$15 billion, making up 88 percent of Singapore’s registered FDI in Vietnam.   

Both sides shared the view that progress has also been made in other areas such as education and training, information and communication technology, and transport.

They said in the coming years Vietnam and Singapore will focus on developing financial-banking services, encourage Singaporean businesses to invest in Vietnam, connect their tourism industries and develop human resources in the post-crisis period.

Minister Vo Hong Phuc said after the meeting both sides will work together to identify specific areas of cooperation between their ministries, sectors and localities.

Ministers Phuc and Lim witnessed the signing of a memorandum of understanding to upgrade Da Nang port to become a major tourism port in Vietnam.

Hotels, coffee brand launch joint promotional campaign

Accor, a large international hotel operator in Viet Nam, announced last Tuesday the establishment of a partnership between three Mercure hotels in Viet Nam and popular local coffee brand Highlands Coffee.

The partnership will bring together two brands in a promotional campaign that will offer any customer who buys a cup of Coffee Jelly Freeze – the latest product from Highlands Coffee, a chance to win a 3-night stay in a suite in Mercure Hue Gerbera, Mercure Da Lat Hotel Du Parc or Mercure Ha Noi La Gare.

Automobile electric wire factory begins production

Japanese company Furukawa Automotive Systems Corp has begun operations at its automobile electric wire production factory with capacity of 3.6 million products a year in Giao Long industrial zone in Ben Tre Province.

The US$16 million factory is situated on 3.5ha and provides job for 3,000 employees.

Jetstar offers heavy discount till Monday

JetstarPacific Airlines will cut 15-35 per cent off their ticket prices for all flights of JetSaver Light. The price does not include luggage and will be available until 10pm on Monday.

The price of domestic flights will be from VND315,000 (US$16.50) to VND650,000 ($34), and international flight prices from $29 to $149.

Local goods to land in Myanmar

A Viet Nam goods fair will be held in Yangon City, the capital of Myanmar, on April 3-6.

The fair, which will introduce products and promote investment, is expected to attract 40-50 enterprises with goods ranging from garments, leather, comestics and medicine to appliances and electronics.

IBM, Maritime Bank sign IT contract

IBM Viet Nam pledged to provide the Maritime Bank with latest IT banking technologies under a co-operation agreement signed in Ha Noi yesterday.

Besides solutions for both hard and software, IBM would also support Maritime Bank to introduce a vision for their information systems strategy.

FPT readies 25% cash dividend

FPT is preparing to pay a 25-per-cent cash dividend on 2009 profits. The software giant is also planning to offer additional shares to existing shareholders in two phases, at ratios of 1:3 and 1:4, respectively. Both proposals will be put to a shareholder vote at the company's upcoming annual shareholders' meeting.

SAM revises profit targets

Cable and Telecommunications Materials Corporation (SAM) has targeted profits this year of VND231 billion (US$12.1 million), representing an 18.4-per-cent decline from 2009 profits. The firm's management has prepared a, business plan for approval at its shareholders meeting on Sunday.

PetroVietnam gets B+ credit rating

Credit-rating organisation AM Best has assigned a financial strength rating of B+ (good) and an issuer credit rating of "bbb-" to PetroVietnam Insurance Co, with a positive outlook. The ratings reflect the insurer's capitalisation, operating performance and strong position in the Vietnamese non-life market. The ratings also take into account management's commitment to improving all aspects of the company, while the positive outlook reflects AM Best's expectation that capitalisation and operating performance will further improve.

Policyholders and depositors refer to Best ratings and analysis as a means of assessing the financial strength and creditworthiness of risk-bearing entities and investment vehicles.

Kinh Do cooks up stock offer

Commercial baker Kinh Do Co has set next Thursday, March 18, as the final day for shareholders to register to buy bonus shares. The company will offer the shares at a 4:1 ratio during March 25-April 5. Kinh Do posted an estimated profit of VND450 billion ($23.7 million) in the first two months of the year.

Removing trade barriers
 
2010 is expected to bode well for Vietnam’s exports as the world economy is showing signs of recovery. However, businesses will have to face trade barriers, especially anti-dumping suits, set up by importing countries.

Vietnam’s exports to major markets have not bounced back yet as the world economy is just beginning to recover. Many people think when the global crisis brought Vietnam’s exports to a standstill, this would reduce the risks of anti-dumping suits.

In fact, the risks remain imminent, as many countries are applying protectionist measures, including anti-dumping, to maintain domestic production and increase the competitiveness of their products against imports.

As anti-dumping suits against Vietnamese fish, shrimp and plastic bags, lodged by the US and the European Union, have not yet been settled, experts now warn the country of possible new suits against its exports.

In addition, importers have tended to sue multiple exporters of a similar product rather than just one as before, putting Vietnam at a disadvantage. This means it will be confronted with suits against products that are not its key exports.

Although the Agreement on Anti-Dumping Practices (ADP) is observed by World Trade Organisation (WTO) members, it still causes several difficulties for Vietnam, including calculations of the minimum dumping margins or taxes.

According to the WTO, dumping is, in general, a situation of international price discrimination, where the price of a product when sold in the importing country is less than the price of that product in the market of the exporting country.   

Lawyer Tran Huu Huynh, head of the Legal Affairs Department under the Vietnam Chamber of Commerce and Industry, says under the regulations, importing countries will file suits without caring about why the imports are offered at lower prices than their products.

Low product prices can be the result of government subsidies, the application of advanced technology, managerial improvements or cost-saving programmes. However, these factors are not included in the WTO agreement, says Mr Huynh.

Over the years, Vietnamese businesses have taken great pains to cope with anti-dumping suits, but their capabilities remain limited. In addition to solutions to increase their competitiveness, the businesses should be well prepared for possible suits in the future, says Huynh.

Peter John Koeing, senior lawyer at the US law firm Squire Sanders, suggests that businesses clearly document financial and accounting activities to show to auditors if required. In addition, they should build more factories in different markets and localities to protect themselves if local authorities want to launch an investigation.



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