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BUSINESS IN BRIEF 3/4   2010-04-03 - Viet Nam Net

Metro breaks ground on second Mekong Delta store 

International wholesale giant Metro Cash & Carry started work on a US$17 million self-service outlet in Long Xuyen City in the Mekong Delta Province of An Giang on March 31.

The center will be the second of the German wholesaler in the Mekong Delta after the one in Can Tho City, and the 10th unit nationwide.
Spanning over three hectares, the center will open this year to offer business customers in the Mekong Delta more than 25,000 food and non-food items.
The new store will create 400 jobs for local people and help An Giang farmers sell their products closer to home.
The Metro Cash & Carry wholesale network contains modern equipment including a close cold-storage chain from farms to stores to supply customers with fresh, quality and safe products.
Items supplied by Metro are mainly fruits, vegetables, seafood products and meat. It is estimated that thousands of local food manufacturers and goods producers supply Metro Cash & Carry Vietnam.

Metro opened its first wholesale center in Vietnam in 2002. Today the company has nine such centers in HCMC, Hanoi, Hai Phong, Da Nang, Can Tho and Bien Hoa City of Dong Nai Province. It also has two distribution platforms in Binh Duong and Lam Dong provinces.

The company has 670 self-service wholesale outlets in 30 nations with more than 100,000 staff. Its revenue reached 31 billion Euro (US$42 billion) in 2009.
Higher wind power prices needed to encourage investment 
Wind power prices in Vietnam are too low and need to be raised to encourage more investment in the sector, industry insiders say.

Nguyen Boi Khue, chairman of Binh Thuan Province Wind Power Association, said his association would hold a meeting in April to request the government for a price increase.

The Ministry of Industry and Trade has set wind power prices at only 4 US cents per kWh while the cost of generating is not less than 10 cents, Khue said.

“The price has been left unchanged for 13 years and it’s no longer up-to-date.”

Many companies really want to have a new pricing system so that they can make investment decisions and attract funds from foreign partners, he said.

The country has great potential to develop wind energy but many investors are not willing to pour money into the sector because of low prices and the lack of government support, Khue said.

Vietnam food association stockpiles million tons of rice 
The Vietnam Food Association (VFA) said it has stockpiled the million tons of rice it had targeted last month in an attempt to keep prices stable.

The association will continue to purchase another 500,000 tons to increase its rice stockpile, said VFA deputy chairman Pham Van Bay.

In early March the food association had asked 30 member companies to purchase rice at not less than VND4,000 per kilogram to ensure enough profits for farmers.

According to rice companies, prices of unhusked rice in the Mekong Delta, Vietnam’s largest rice growing region, are now between VND4,100 and VND4,400 per kilogram.

The Vietnam Food Association said there have been positive signs from many export markets. Iraq, for instance, may sign new contracts to import rice from Vietnam while there is still high demand in the African market.

First quarter rice exports have reached 1.1 million tons, the association said.

Maersk Line introduces direct Vietnam-US shipping route  
Maersk Line, the world’s largest shipping container line, will launch direct service between southern Vietnam and the west coast of the US on May 12, the carrier said on its website.

With a direct call that takes 18 days to reach Los Angeles, Maersk Line will be the first carrier to introduce the “Post-Panamax” class (9000 TEU vessels) to Vietnam.

The new service will call at the SP-PSA International Terminal in Ba Ria Vung Tau Province, a deepwater facility located 80 kilometers south of Ho Chi Minh City.

HCM City inspectors seize fake detergents, cosmetics 

Ho Chi Minh City market inspectors on Wednesday found a large amount of fake fabric softeners and shampoo at a factory in the city’s outskirts.

In Binh Chanh District, the officials seized around 557 liters of fabric softener in 23,200 packs labeled Comfort, a well-known softener brand, and many empty Comfort packs.

Machines to fake the products and 125 kilograms of materials of unknown origins were also found.

There were many wrappings that carried the logos of X-men and Unilever, the officials said.

The owner of the factory had fled the site before the officials arrived.

At the Nguyen Son household factory in Hoc Mon District, they found many skin cream products that looked like fakes of Pond’s, Hazeline, Dove, Nivea and Biore products.

The factory had earlier been found with 1,200 Chinese giant lighters that were said to be highly inflammable and dangerous.

On Tuesday, city authorities had seized from District 12 more than 3,000 imported cosmetic products without any supporting documents.

Vietnam sugar firms cautioned against hasty sales 

Local sugar companies should not accept low export prices as global demand is still high, outstripping supply by a large margin, an industry official said.

Global sugar supply this year will fall short of demand by up to 9.7 million tons this year, compared with the previous forecast of 7 million tons, Vo Thanh Dang, chairman of the Vietnam Cane Sugar Association, was quoted as saying by the Vietnam Economic Times Tuesday.

“Many people say sugar prices are driven by international speculators. As a result, local companies should not rush to sell sugar at low prices.”

But Dang said if sugar companies want to halt sales and wait for higher prices, they need to have enough capital to pay farmers and continue investing in their production.

The sugar association has requested commercial banks to offer preferential credit policies to businesses and proposed that the government creates a stockpiling plan, he said.

Vietnam’s sugar output is expected to reach 963,200 tons from the current crop which started at the end of August last year. Dang said there would be enough sugar for the domestic market.

However, according to Information Center for Agriculture and Rural Development, local production will be able to meet less than 75 percent of this year’s demand, estimated at around 1.51 million tons. The market will still see a considerable shortage, of about 410,000 tons, the center said.

Air France strikes flight deal with Vietnam Airlines  
Security personel guards two Vietnam Airlines’ aircrafts at Hanoi airport.

Air France signed a code share agreement with Vietnam Airlines that will allow clients to fly directly from Paris to Hanoi or Ho Chi Minh City, the French company said on Friday.

The flights, three times a week, will be operated by Vietnam Airlines in a Boeing 777-200 using Air France’s “AF” flight code starting July 3, the airline said in a statement.

The deal will allow Air France to offer six flights to Hanoi per week and seven to Ho Chi Minh City, which includes routes stopping over in Bangkok.

Under the agreement, Air France will operate later this year non-stop flights between Ho Chi Minh City and Paris, also three times a week.

Vietnam Airlines, which will join the SkyTeam alliance that includes Air France this year, has a fleet of 70 planes and carries nine million passengers per year.

Int’l airlines promoting Ho Chi Minh City tourism  
Eight international airlines are promoting Ho Chi Minh City’s most popular tourist destinations on flights to the southern hub, an official said.

La Quoc Khanh, deputy director of the city Department of Culture, Sports and Tourism, said the carriers, including Air France, United Airlines, Singapore Airlines and Thai Airways, have sign an agreement to show a 3.5-minute video promoting HCMC’s “100 Excitements” on their flights.

The campaign will last through at least the end of this year, he said.

The city announced in February its list of “100 Excitements” including top hotels, restaurants, favorite foods, city tours and events. The top 100 was voted on by tourists and experts over a three month period.

Festival helps build Vietnamese seafood trademark
A Vietnam Seafood Festival will be held for the first time in the Mekong Delta city of Can Tho from April 24-27, with the aim of boosting cooperation and trade between domestic and foreign businesses and building Vietnam’s seafood trademark.

The Vice Chairman of the Can Tho city People’s Committee, To Minh Gioi, who is also head of the festival’s organising board, said that the festival is a large socio-economic and cultural event for the Mekong Delta in particular and the whole country in general.

It will make an important contribution to increasing the competitiveness of Vietnamese agricultural products on the world market, he said.

According to Deputy Minister of Agriculture and Rural Development Luong Le Phuong, the festival aims to seek new opportunities for Vietnam’s seafood sector, especially as it is facing many challenges under the increasing competitive pressure that comes with international economic integration.

Nearly 20 economic and cultural activities will be held during the festival, including a 500-booth fair exhibiting Vietnamese seafood products. To date more than 200 businesses and localities have registered to attend the fair.

A seminar entitled “Vietnamese Seafood: Potential, Cooperation and Development” will focus on five topics, including aquatic farming in Vietnam, future offshore fishing, seafood exports, building up brand names and logistical services for the sector.

On the occasion, the organising board will present the “2009 Outstanding Vietnamese Seafood Enterprise” Award to those which have shown excellence in overcoming difficulties stemming from the global economic crisis over the past year.

First sugar trading floor opens
The Saigon Thuong Tin Commodity Exchange Company (Sacom-STE) has opened the country’s first sugar trading floor in HCM City to help farmers and businesses achieve price discovery and price risk transfer.

Speaking at the inauguration on April 1, Nguyen The Vinh, chairman of Sacom-STE, said the floor will offer a modern trading system, fair competition, and price insurance.

It will also help traders obtain credit, update information about both global and domestic sugar prices, and provide transport and storage for its clients, he added.

Seminar discusses new construction technologies and products
Under the aegis of the Vietbuild Hanoi International Exhibition, a seminar on new technologies and products in the construction industry was held in Hanoi on April 2.

The seminar attracted a large number of experts from the construction material industry, an indication of the industry’s keen interest and widespread competition in developing new methods and materials.

Saving energy was a significant theme of the discussions. Participants agreed that discovering new technologies and products is difficult but getting them to the market place is even more difficult. It requires businesses and regulators to co-operate in enforcing trademarks and creating and applying a system of standards.

Tien Giang supports its exports in global market
Around 100 local officials and representatives from export companies gathered in the southern province of Tien Giang on April 1-2 to learn about tariff agreements that Vietnam has signed with other countries and organisations.

The training aims to provide export businesses with preferential conditions to create suitable marketing strategies and improve their products’ competitiveness in the international market.

It will also impart the general information on Vietnam’s commitments to the World Trade Organisation (WTO), the country’s timetable for cutting taxes with ASEAN partners, Free Trade Agreements (FTA) and the Japan-Vietnam Economic Partnership Agreement.

Other topics include favourable tax policies for the province’s key exports such as seafood, rice, fruits, garments and textiles as well as barriers and procedures concerning exports in its major markets like the US, Japan and the EU.

Dang Thanh Liem, the Head of the Department of Industry and Trade, said that the information is important for businesses and managers at all levels. The training course will help the province to exceed its target of US$440 million in export revenue for this year and to retain its market share.

Over 2,800 cases of trade fraud discovered in Q 1
2,877 cases of smuggling, trade fraud, and illegal transportation of goods were discovered in the first three months of 2010 with a total cost of VND38.5 billion, according to the General Department of Customs (GDC).

The number of smuggling cases, especially by land, is on an upward trend. Violators use many tricks such as giving false information concerning products’ names, quality and quantity. Many of them swap the vouchers to transport forbidden goods.

The most popular way of transporting illegal products is by going off-road to bypass the border gates. Goods are often broken down into small parts to make them easier to smuggle across the border.

To deal with the situation, the GDC has asked relevant agencies to keep a close watch on suspected individuals, authorize undercover agents, and enact strider punishments for violations of Customs procedures.

Saigontourist offers new travel packages
Saigontourist Travel Service Company has launched 100 new domestic and 50 new international tours in time for the May Day holiday.

They include promotional tours, festival tours and an economical IKO tour, to satisfy every taste and budget. Tour groups with special interest are on the increase. Most choose tours of Den Hung-Tam Dao, Tan Trao, and the northeast region, but the most interesting international tours are IKO tours of China or Thailand, and Premium tours of the Republic of Korea, Japan, Australia, the US, or Europe.

As of April 1, Saigontourist will offer an upgraded insurance package underwritten by the US-based Charter Company for customers travelling abroad, with a maximum benefit of US$50,000 per person.

For domestic tours, the maximum benefit will rise to VND60 million. This insurance coverage is included in the ticket price.

The number of people signing up for travel tours this year has reached 5,000, up 20 percent over last year.

Vietnam launches multi-level marketing association
The Vietnam multi-level marketing (MLM) association made its debut in Hanoi on March 31 in the hope of creating a professional system of MLM companies.

Truong Thi Nhi, President of the association, said the organisation will focus on improving the capacity of MLM companies in Vietnam and improving connections among local firms operating in the arena.

The association, she added, will work with state management agencies in the process of building mechanisms and regulatory policies concerning MLM activities in order to create a healthier and more equal environment for competition.

In addition, it will carry out support and cooperation programmes with regional and international MLM associations.

Addressing the launch ceremony, Deputy Minister of Industry and Trade Le Danh Vinh said since the adoption of the Law on Competition in 2004, MLM has been recognised as a legal form of business in Vietnam.

The MLM market, joined by 45 local and foreign firms, has developed significantly in Vietnam over the last five years.

According to statistics updated by the end of 2009, there are 32 operating MLM companies with 700,000 distributors in the market, offering around 1,000 product lines, mainly nutritional supplements, cosmetics and household utensils.

With sales in 2009 reaching VND2.1 trillion, up 150 percent against 2008, these firms contributed nearly VND660 billion in taxes to the state budget and donated VND5 billion to humanitarian causes.

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