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BUSINESS IN BRIEF 13/3   2010-03-13 - VietNamNet

Vietnam’s economy predicted to grow faster
Vietnam will see a sharp growth rate in GDP in the 2010-2011 period, says the Economist Intelligence Unit (EIU).

According to the world’s leading economic advisory firm, despite the challenges that Vietnam will have to face in the next two years, its long-term economic prospects remain positive.

The recovery of the world’s economy, which will have positive impact on the country’s exports, will also, in turn, help Vietnam overcome the negative effects of the global economic crisis.

In addition, increasing imports in recent times have shown that investment and consumption demand has been bolstered.

EIU, however, warned that pressure regarding budget deficits and inflation is still haunting the stability of the national economy.

Vietnamese businesses to take part in int’l seafood show
Member businesses of the Vietnam Association of Seafood Exporters and Producers (VASEP) will take part in the International Boston Seafood Show in the US from March 14-16.

The annual show, the biggest of its kind in the US, attracts as many as 800 processing, import and export companies, distributors and supermarkets from the US as well as other countries in the world.

The Boston show is considered a key event in helping Vietnamese businesses get up-to-date information and access to the American market.

According to the US Department of Commerce, in 2009, Vietnam’s seafood export turnover to the US reached US$677 million and it is now among the ten biggest seafood exporters to the country.

Border trade fair opens in Lang Son to promote trade
A trade fair 2010 kicked off in the northern border province ò Lang Son on March 12 in response to the “Vietnamese use Vietnamese goods” campaign.

The 200 booths, put up by businesses from 10 Vietnamế provinces and Guangxi province, China, showcase metallic and electrical products, production materials, construction materials and interior decorations, art and craft products, chemicals and cosmetics, pharmaceutical products, foods and other services. 

Co-sponsored by the Lang Son Trade Promotion Centre and VIASA Trade Fair Joinstock Company, the fair is part of activities for the Vietnam-China Friendship Year 2010 to promote trade and create opportunities for businesses to advertise their products and encourage domestic product consumption.

The fair, which will last until March 18, is also a good opportunity to strengthen economic cooperation between the two countries and ensure social security.

Lang Son province hopes the fair will provide foreign and domestic businesses access to the Lang Son market.

Vietnam helps Laos raise salmon and sturgeon
Vietnam’s project to raise salmon and sturgeon in Champassak province has been successful and become the first salmon- and sturgeon-breeding model in Laos.

Since Vietnam provided breeding salmon and sturgeon for Laos in September 2009, the two species of fish have done well and adapted to living conditions in the country, with salmon growing from 0.9-1 kg each and sturgeon 1-1.3 kg each.

Khampheng Heuangsisavath, an official of the project, says the project is very important for Laos as the country wants to meet its domestic demand for these species, helping reduce imports from neighbouring countries.

In the future, the Lao Government will expand this model to other localities nationwide, she says, adding that this month, the Vietnamese government will provide more breeding salmon and sturgeon for the project.

Tourism sector offers big discounts
The tourism sector launched a promotion campaign in Hanoi on March 12, offering discounts of between 10 and 30 percent on tourist services.

The Vietnam National Administration of Tourism (VNAT) expects that the “Vietnam -Your Destination” programme will help it fulfil the yearly targets of 4.2 million foreign arrivals and 28 million domestic holidaymakers.

The Head of the Travel Department under the VNAT, Vu The Binh, said the campaign will focus on overseas Vietnamese and encourage them to promote Vietnam’s image.

So far, about 80 percent of foreign arrivals say they have travel led to Vietnam based on recommendations from friends who had visited, Binh said, explaining the VNAT’s policy.

The “Vietnam’s Impression” campaign launched by the VNAT last year considerably contributed to increasing the hospitality industry’s revenues by 9 percent year-on-year to some VND70 trillion.

The VNAT reported that foreign arrivals in Vietnam surged by 27.4 percent to almost 880,000 in the past two months.

China took the lead with some 137,000, up 90.8 percent. Other major markets such as the Republic of Korea and Japan also showed signs of a rally with the number of arrivals up by 24.4 percent and 5.8 percent, respectively.

Kuwait Fund loans Vietnam US$ 14 million
The Kuwait Fund for Arab Economic Development has agreed to provide Vietnam with US$14 million in loans to carry out the Cha To – Muong Tung road construction project in Dien Bien province.

An agreement to this effect was signed in Hanoi on March 12 by Deputy Finance Minister Tran Xuan Ha and Kuwait Fund Deputy Director General Hesham Al-Waqayan.

To date, Kuwait has advanced Vietnam a total of 34 million Kuwait dinar (about US$124 million) for 8 rural infrastructure development projects. Many of the projects, like the Dau Tieng and Van Dinh hydro-electric power plants and the Dac Ta – Ngoc Linh highway, have been completed and put into operation.

Nghe An calls for investment in marine tourism projects
The central province of Nghe An has called for stronger investment in 22 marine and ecological tourism projects estimated at US$250 million in the next five years.

Some of the larger projects are the Thac Khe Kem ecological project (worth US$6.3 million), the Nui Quyet – Ben Thuy tourist site (US$6 million) and the Giang Son hot spring (US$5 million).

The projects will develop special new tourist attractions for both foreign and domestic tourists.

The province is also encouraging investment in projects to build shopping and sports centers and recreation parks by offering incentive policies in investment promotion, site clearance, road construction and land use fees.

 Rolls Royce to build an aircraft maintenance factory in Vietnam
Rolls Royce plans to establish a joint venture company with a Vietnamese business to build an aircraft Maintenance, Repairs and Overhaul (MRO) factory in Vietnam.

Miles Cowdry, Director of Rolls Royce Global Corporate Development, announced the plan while receiving Vietnamese Deputy Prime Minister Nguyen Thien Nhan at Rolls Royce Headquarters in the UK on March 12. He said his group and Vietnam Airlines are working on deal to build this factory in Vietnam.

Rolls Royce opened its office in Hanoi in January 2008, and two months later it signed a memorandum of understanding with the Vietnam Shipbuilding Industry Corporation (VINASHIN) to develop the maritime industry in the country. 

Mr Nhan welcomed the British group’s presence in Vietnam and said the Vietnamese government offers incentives to British businesses, including Rolls Royce, to operate efficiently in the country. 

He expressed his hope that Rolls Royce will transfer technology and train human resources for Vietnam.

Mr Nhan visited the UK on March 9-11.

Anti-dumping lawsuits on the rise
The number of lawsuits on anti-dumping and anti-subsidy along with other protectionist measures against Vietnamese exports will increase in the coming time.

The remark was made by Nguyen Thi Thu Trang from the Trade Remedies Council (TRC) under the Vietnam Chamber of Commerce and Industry (VCCI) at a seminar on the impact of anti-dumping lawsuits on Vietnamese exports held in HCM City on March 11.

2009 saw the highest number of suits lodged against Vietnamese goods in six markets. Investigated products included shoes, rubber shoe soles, plastic bags, DVDs, air- conditioners and rolled steel.

Dr. Peter Koenig, a member of the US Congress’s consultation group said a lawsuit normally lasts from 4-5 years and causes considerable damage to the production sector.

To minimize such lawsuits, Vietnamese businesses should expand export markets, ensure financial transparency and sell products that importers fail to produce, Mr Koenig emphasised.

Exports hit more than US$8.9 billion in two months
Having considerable difficulty expanding to new export markets, many local businesses have temporarily put such efforts on hold to focus on key markets with which they have strong relationships.

At a meeting in Ho Chi Minh City on March 11 experts forecast that this year’s exports will not see a breakthrough growth as Vietnam’s key markets have yet to recover completely. They said earnings from exports in the first two months reached only US$8.9 billion, equal to that of the same period last year.

According to the Ministry of Industry and Trade, Vietnam made a great effort to get a better foothold in markets in Africa, the Middle East and Latin America in 2010. However, these markets are far away from Vietnam and have various differences in terms of customs, culture and consumption habits. As a result, progress remains limited despite concerted efforts from both sides.

A number of exporters have even refused to ship products to Russia - a traditional market which is expected to help them boost their overall export turnover - due to import tariff barriers and the methods used to calculate taxes.

Chairman of the Vietnam Textile and Apparel Association (Vitas) Le Quoc An said the European Union (EU), Japan and the US remain the top choices for domestic companies.

The opinion is fuelled by the fact that most of the 57 overseas trade promotion projects funded by the Ministry of Industry and Trade target these markets. Along with such programmes, the enterprises join in specialised fairs to introduce their products abroad.

From April to October, a number of associations will participate in fairs and exhibitions in the US. Vitas plans to take part in the GlobalTex Fair in Los Angeles and the Magic Show Fair in Las Vegas, while the Vietnam Timber and Forest Product Association will join an international fair and exhibition on wooden furniture in Chicago and the Vietnam Coffee and Cocoa Association will conduct a fact-finding tour in New York.

In the EU market, the Vietnam Cooperative Alliance, the Vietnam Software Association and the Trade Promotion Centre for Agriculture will participate in fairs in Italy, Germany and France, respectively.

Also, domestic businesses are striving to fully tap the advantages offered by the Vietnam-Japan Economic Partnership Agreement to boost the export of garments, footwear, handicraft products, wooden furniture and agro-fishery products to this market.

Auto sales skid in February
Car sales by the Vietnam Automobile Manufacturers’ Association (VAMA) members reached just 5,030 units in February, down 25 percent against the same period last year.

VAMA said demand for SUVs (sport utility vehicles) and MPV (multi-purpose vehicles) declined sharply in the month.

The association said domestic carmakers sold just 1,167 SUVs/MPVs and 1,612 commercial vehicles in February, down 47 percent and 53 percent, respectively.

In the first two months of the year, total car sales reached 11,355 units, showing an increase of nearly 8 percent over the same period last year.

Meanwhile, 5,900 cars were imported in the first two months of the year, worth US$94 million, according to the General Statistics Office.

Vietnam Int’l Furniture and Home Accessories Fair opens
Vietnam’s International Furniture and Home Accessories Fair (VIFA) 2010 opened at Sai Gon Exhibition and Fair Centre in Ho Chi Minh City on March 11.

In his opening speech, Deputy Minister of Industry and Trade Nguyen Thanh Bien said wood is one of the principal exports of Vietnam. Its wood products are now being sold in 120 countries and territories worldwide. This achievement can be credited to businesses constantly seeking new markets, upgrading their equipment and training highly-skilled professionals.

The event, organised by the HCM City Handicraft and Wood Industry Association, has drawn as many as 600 stands from 150 businesses, many of them from Malaysia, Singapore, the UK and China.

The fair aims to help wood and handicraft businesses increase their exports, as well as both domestic and foreign entrepreneurs find new partners and new suppliers.

In coordination with VIFA 2010, a seminar was held to explore Italian wood import businesses, new technology in perfecting wood products, and a Vietnam-Germany forestry development programme.

Last year’s VIFA drew 15,000 visitors from 59 countries and territories and resulted in the signing of many major contracts worth US$70 million in total.

Deep water ports magnet for Japanese investment
Japanese investors are interested in building and operating deep water ports in Vietnam, said Japanese Deputy Minister of Land-Infrastructure-Transport and Tourism Fujita Takehino in Hanoi on March 10.

Apart from Cai Mep-Thi Vai port project in the southern coastal province of Ba Ria-Vung Tau, three major Japanese firms are conducting surveys to provide capital for construction of the Lach Huyen port in the northern city of Hai Phong.

The Lach Huyen port project will be invested under the form of a Public-Private Partnership (PPP). The first phase will entail to construction of a 700m-long wharf, capable of simultaneously receiving two 100,000-tonne ships and a logistic system.

The Japanese International Cooperation Agency (JICA) agreed to fund the construction of a road and a bridge linking Lach Huyen port to the Hanoi-Hai Phong highway.

JICA also agreed to provide additional capital to increase the receiving capacity of Cai Mep-Thi Vai port for 100,000 tonne ships from its current limit of 65,000-80,000 tonne ships.

Kansai businesses seek opportunities in HCM City
Representatives of twenty businesses from Kansai, Japan have paid a three-day visit to Ho Chi Minh City in an effort to seek business opportunities in the country’s largest city.

In a meeting with Chairman of the municipal People’s Committee Le Hoang Quan on March 10, Takeo Obayashi, head of the delegation and also Chairman of the Obayashi Corp., said that the Japanese businesses want to work with the city in the field of human resource training and urban development planning.

Ho Chi Minh City is in great need of good human resources as it is shifting to hi-tech industries and the urban planning and infrastructure in the city are still weak.

The municipal authorities are willing to create favourable conditions for Japanese investors.

He also lauded efforts Obayashi has made in the East-West Corridor project, which includes the building of Thu Thiem tunnel across the Saigon River, the first of its kind in Vietnam and will be the largest in Southeast Asia.

ABB opens new factory in Vietnam
ABB – the leading power and automation technology group – inaugurated a power product manufacturing plant in the northern province of Bac Ninh’s Tien Son Industrial Zone on March 11.

The US$30 million plant is part of ABB’s plan to increase production capacity in Vietnam and help the country meet the growing electricity demand for electricity and maintain grid reliability.

Bernhard Jucker, chiefh of ABB’s Power Products Division, says the new plant is expected to employ more than 100 workers.

VCCI plans to counter safeguard measures
The Trade Remedies Council (TRC) under the Vietnam Chamber of Commerce and Industry (VCCI) has joined the US law firm Squire Sanders to organize a seminar on anti-dumping and anti-subsidy legal actions against Vietnamese exports, their impacts and countermeasures.

The seminar, held in Hanoi on March 10, provided updated information on issues related to Vietnamese commodities in the US and EU markets.

Tran Huu Huynh, Head of the Legal Department under the VCCI, said that despite the gradual recovery of the global economy, Vietnamese businesses still face an increasing number of trade barriers in export markets, especially anti-dumping and anti-subsidy suits.

Two major markets - the US and EU - have shown no signs of ending suits against Vietnam’s commodities such as fish, shrimp, plastic bags, sandals and shoes, bicycles, and compact lamps, he said.

Economic experts warned that Vietnamese exports are no longer exempt from anti-subsidy suits in the US.

They said each safeguard investigation presents a great challenge for Vietnamese exporters. Quite a few Vietnamese businesses have had difficulty countering this issue.

So far, there have been 42 antidumping suits lodged against Vietnamese exports, according to Nguyen Thi Thu Trang from TRC. Though small, this figure is relatively disturbing as the Vietnamese economy is still highly dependent on exports.

In addition, a number of businesses do not understand, or only partially understand, the nature and impacts of safeguard measures. Therefore, they have taken incorrect actions such as evading or not cooperating with the measures, which lead to adverse consequences.

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BUSINESS IN BRIEF 11/3   2010-03-11

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