Vietnam - News and Regulations

BUSINESS CONFIDENCE VIETNAM - Q1 Business Confidence Index up 3 pts

With the expectation that business prospect will be better in 2010, a lot of enterprises plan to expand investment and improve manpower. But many of them complained about the difficulties in accessing capital source and changes in business conditions.

The above conclusion came from a survey conducted between April 12 and early May of 143 enterprises in 11 major sectors of Vietnam by PetroVietnam Finance Investment and Consultancy Co (PVFC Invest) and Financial Intelligence Services Co Ltd (WVB Vietnam). Over a half of this figure are small to medium sized enterprises.

Accordingly, Business Confidence Index (BCI) in Q1 rose by three points as compared with the previous quarter to reach 138 pts, marking the highest point level since the first survey made in Q3 of 2008.

A slight rise in Q1 BCI partially inflected the improvement of business confidence of domestic firms during the first months of this year, the report said.

Particularly, up to 80 percent of surveyed companies said that Vietnam's general economy now is better in comparison to last 12 months. Only one percent said the economic conditions were weaker.

Giving prediction on Vietnam's economic situation in next 12 months, the surveyed enterprises were optimistic. Around 89 percent believed Vietnamese economy will grow better whilst only one percent was worrying about the economic prospect in 2010.

The faith of enterprises in growth of revenue and profit was improved compared with the previous quarter. About 78 percent expected their revenue will surge and 22 percent forecast that their 2010 revenue will be maintained.

One percent of surveyed firms are afraid of a sharp reduction in next 12-month profit.

Over 50 percent of the enterprises said that accessing domestic capital source in Q1 became more difficult against the same period of 2009.

Most enterprises said that the factors mainly affecting their business confidence are changes in market demand, structure of production expense and investment opportunities.

Regarding corporate development plan, 52 percent of firms planned to upgrade manpower, lower than 59 percent of the previous survey of Q4 2009, and 48 percent planned to expand investments.TBKT

REGIONAL TRADE - Vietnam-Asem trade may reach $107b

The latest statistic from general Department of Vietnam Customs recently showed that the total trade between Vietnam and member countries of Asia-Europ Meeting (Asem) reached $22 billion in Q1, rising 9.2 percent from the same period last year.

This year, the figure could be up to $107 billion if the average trade growth momentum of nearly 28 percent/year of 2005-2008 is maintained.

However, if the average trade growth reaches some 18 percent/year (2005-2009), the bilateral trade between Vietnam and Asem would be only $99 billion in 2010.

In 2009, Vietnam exported to 11 member countries and imported from nine member countries of Asem with the total value of over $1 billion including nations of China, Thailand, Singapore, Japan, Malaysia, Indonesia, Korea, Germany and India.

Of which, Japan is the Vietnam's biggest buyer with the total export turnover of $6.29 billion and then China with $4.9 billion and Singapore $2.08 billion.

Meanwhile, China, Korea and Japan are the biggest suppliers for Vietnamese enterprises with main commodities such as machines, equipments, instruments, components, petroleum, computer, electronic products and spare parts, materials for garment and textile, leather and footwear sectors, components for automobile manufacturing, chemicals, plastic materials and plastic products.

Vietnam's key export items include agro-forestry and fisheries products, minerals, light industry, crude oil, apparel products, seafood products, footwear, electronic products, coal, coffee, wood and wooden products.VOV

Telecom - Telecom companies make efforts to obtain market share

The telecommunication giants raced to draw up the detailed evaluation and market share separation for themselves.

In a report sent to Vietnam Post and Telecommunication Group (VNPT), VinaPhone publicised its market share of 30.3 percent in last December, ranking second after Viettel in Vietnam. The firm also confirmed 2009 was its banner year in developing subscribers, increasing market share and attracting many customers.

Many people questioned where VinaPhone took statistics to divide market share for itself. Because according to the parent group VNPT, VinaPhone's market share till 2009 end only reached 23.88 percent, following Viettel and MobiFone. Last year VinaPhone's total revenue was posted at 20.519 trillion dong and MobiFone's at 33 trillion dong.

MobiFone did not give any comment on the statistics announced by VinaPhone. If basing on the data of VNPT, MobiFone's revenue will be higher than VinaPhone's.

Pham Ngoc Tu, business manager of VinaPhone told Vnexpress that the figures of his firm are exact but temporary only, meaning that our market share in December 2009 really climbed to over 30 percent in respect to the number of subscribers.

Market share separation will be made by Ministry of Information and Communication based on some factors like number of subscribers, real subscriber volume on system, revenue and others. However, the telecom firms themselves have personal tools to measure their market share. "VinaPhone was a leading mobile network in Vietnam and we are trying to regain all things we had," Tu said.

However, an official from Viettel confirmed that the first position absolutely will belong to Viettel if regarding number of subscribers, and its plan to conquer the goal of 100 trillion dong in revenue. In 2009 its revenue hit nearly 70 trillion dong with a network of approximately 50 million subscribers. Concerning the 3G network, the firm has reached over one million subscribers.

In its report, Viettel also confirmed the number one position on the mobile market, some times it touched over 36 percent market share, even 41 percent.

Meanwhile, VNPT, the father of two big mobile networks VinaPhone and MobieFone had the different explanation. As mentioning market share, VNPT surely stands at the first position because both VinaPhone and MobiFone (although they are operating independently) are still under the management of VNPT. Therefore, the revenue and market share of VNPT at 55 percent include both firms. Last year VNPT posted a good performance with total revenue of 78.6 trillion dong, higher 18.6 trillion dong than Viettel's. In 2010, VNPT and Viettel both plan to attain targeted revenue of 100 trillion dong. Specialists forecast the race to obtain the leading mobile network will become tenser within this year.vns

LOGISTICS - UPS announces joint venture in Vietnam

UPS announced a new joint venture in Vietnam on Tuesday, a country with an expanding economy where the shipping company sees opportunity for growth.

UPS Vietnam, a partnership with P&T Express, will offer express pickup and delivery service to 63 provinces.

Economic growth has averaged more than 7 percent annually over the last decade in Vietnam, and per capita income has risen from $400 in 2000 to $1,000 today.

In Hanoi, the capital and HCM City, where UPS' joint venture is based, income is about double that.

"With this joint stock company and the strong relationship we have with our local service partner, UPS gains greater flexibility to grow transportation and logistics capabilities in Vietnam," said Derek Woodward, president of UPS's Asia Pacific Region.

Financial terms were not disclosed.

United Parcel Service Inc. launched service in Vietnam in 1994 with VN Post as the service agent. P&T Express was created in 2006 as a wholly owned subsidiary of VN Post to take over work with UPS.VNS

ECONOMIC GROWTH - Vietnam's GDP growth forecasted at 5.8pct in 2010: UN

United Nations (UN)'s representative office in Hanoi on May 12 organised a press conference and announced the results of socio-economic survey in Asia-Pacific in 2010.

Under it, UN called the government of regional nations to increase the spending for social sector to enhance and promote the long term and sustainable economic recovery.

The survey showed that Vietnam is one of regional countries that will be able to withstand the global economic recession.

Also according to the report, Vietnam's GDP growth in 2010 was predicted at 5.8 percent.NGLD

INVESTMENT ZONES - Investment attraction in IZs tends to fall

Investment attraction in industrial and export processing zones are showing signs of decline during recent time. The statistic underlined that many IZs have not yet drawn any projects for past two years.

So far, the country's total land area ratio leased by investors in IZs has reached only 46 percent.

According to the Ministry of Planning and Investment (MoPI), the reason is that from 2008 so far, the investment capital, especially FDI inflow, has been poured strongly in real estate sector, accommodation services, and catering and resort services.

Currently, Vietnam has 228 IZs in 56 provinces and cities with total areas of 58,400 hectares. Of which, 145 IZs have been in operational and the remaining is under the ground clearance period.

Particularly, IZs are mainly in Mekong Delta areas such as Dong Nai southern province with 28 IZs, Binh Duong (27) and HCM City (16).

Additionally, the country has 14 economic zones on total sites of 630,000 hectares mainly central are (10 economic zones), southern (2) and northern (2).

According to statistic from MoPI, yearly IZs contribute about 20 percent of export turnover for the country and create jobs for over one million workers.

As planned, from now to 2015, Vietnam will open 91 more IZs with total areas of over 20,800 hectares and expand 22 existing IZs with total area of 3,500 hectares.TBKT

FOOD PRODUCTION - Vegetables and fruits exports see sharp increase

In April, Vietnam's vegetables and fruits export fetched $45 million, bringing the total figure during the first four months this year to $165 million, up 25 percent against the same period last year, according to the general Statistic Office (GSO).

The figures were $45.8 million in March, rising 42.6 percent month on month and up 32.4 percent year-on-year.

In March, China was still Vietnam's biggest vegetables and fruits buyer with an export turnover of $4.26 million, up 30.2 percent from previous month, bringing the total figure in Q1 to $14.37 million, up 35.8 percent y-o-y.

Also in March, the country's vegetables and fruits export to Netherlands posted a month on month rise of 182 percent, reaching $3.24 million and then the US market at 180 percent and Italian market saw a 10 fold increase month on month.

Another important buyer was Russia with a slight rise of 7 percent to $2.46 million in March, Indonesia at $3.27 million, and Japan at $2.87 million.VNS

AIRCRAFT CONSTRUCTION - Viking Air says in deal for Vietnam navy aircraft

A Canadian company says it has become the first Western firm to build fixed-wing aircraft for the military in communist Vietnam, which is seeking to upgrade its maritime defences.

Viking Air of Victoria, British Columbia, said it has finalised with the Vietnamese navy a purchase agreement for six amphibious DHC-6 Twin Otter Series 400 aircraft, in a statement obtained by AFP on Wednesday.

It said the deal would give the navy its first fleet of fixed-wing aircraft, some of which are designed specifically for marine patrol.

Each aircraft is priced at more than five million Canadian dollars (around five million US) but a Viking spokeswoman told AFP the total value of the deal, which includes flight training and other components, was yet to be determined.

The planes are scheduled for delivery from 2012 to 2014.

Vietnam late last month approved an 8.5 billion-dollar economic and defence development plan for a string of islands along its resource-rich coastline, as a broader maritime sovereignty dispute simmers with China.

In December Vietnam and Russia -- a longtime supplier of military equipment to Hanoi -- signed a major arms deal reported to involve the purchase of six submarines.

Analysts said the deal aims to bolster claims against China over potentially resource-rich islands in the South China Sea.

Prime minister Nguyen Tan Dung confirmed only that the Russian deal included submarines along with aircraft and "military equipment".

Russian media have reported that the aircraft order involved 12 Sukhoi Su-30MK2 warplanes. They are among the world's most advanced and could provide air cover for the surface fleet, analysts said.

Canada's de Havilland aircraft company began producing Twin Otters in the 1960s. They gained favour with commuter airlines but had their roots in de Havilland's legendary Beaver bush planes.TBKT

RESOURCES - Korea National Oil begins extra oil production off Vietnam block

State-run oil developer Korea National Oil Corp. said Thursday that it has begun producing an additional 22,000 barrels of oil a day at an oil and gas field offshore Vietnam.

KNOC late last month began pumping crude oil from the northeastern part of Su Tu Den in the 15-1 block it jointly operates with PetroVietnam and ConocoPhillips (COP), it said in a statement.

As a result, the total volume of daily oil production from the 15-1 block has risen to about 100,000 barrels from 75,000 barrels previously, according to the statement.VOV

WATER - Arup helps HCM City build water management scheme

The global engineering, technique and consulting group, Arup will help HCM City build general scheme on water sources management and in dealing with impacts of climate changes, Mark Watts, Arup's director said in the seminar on "urban life" that took place on May 12 in HCM City.

According to specialists of Arup, the impacts of climate change such as rising sea levels, longer dry seasons, heavy rains in summer, are causing urban flooding, salination of water sources and underground water depletion.

Therefore, Roger Alley, Arup's senior manager, said that the city should consider building the raw water reservoir at the appropriate locations, as well as in two sides of the river, to store water during rain season, and drain water to reduce salty water supply during the dry season.VNS

ROAD CONSTRUCTION - Construction on southeast Hai An ring road in Hai Phong City starts

Hoang Trung Hai, deputy prime minister yesterday participated in the ground breaking ceremony of construction project of south-eastern ring road in Hai An Dist, Hai Phong City. Hanoi Urban Development Infrastructure Development Corp (UDIC – Hanoi) won the bidding contract for the project and UDIC Investment Joint Stock Co was to carry out this project.

The total investment capital for this project was estimated at 886.96 billion dong, in which 400 billion dong was from government's fund, 200 billion dong from Hai Phong City's state budget and 286.496 billion dong from auctioning the land use rights for the land plot in Hai An Dist.

The project was supposed to be completed and put into operation in the end of 2012.TBKT

METRO SYSTEM - Hanoi invites Moscow to help build subway system

Hanoi officially invited Moscow to join designing, building and putting into operation Metro system in the capital. At the same time, Hanoi also suggested Moscow authorities to help the city in urban planning, Nguyen The Thao, chair of Hanoi People's Committee at the meeting with the mayor of Moscow, Yuri Luzhkov on May 12.

Luzhkov suggested Hanoi in particular as well as Vietnam in general to increase exporting key export items such as seafood, agricultural and crafts, and fine arts to Moscow. In addition, Vietnam should promote Vietnam's tourism to attract Russian tourists.

Luzhkov said the constructions of Hanoi Trade and Culture Centre in Moscow and Moscow Culture House in Hanoi will contribute to the closer tie between the two capitals of the two countries in many sectors.CAFEF

From Golf to Residential - Hanoi changes property project

Hanoi City people's committee has issued the Decision No 2088/QD-UBND on May 5, 2010 regulating changing the using purposes of 32.1-hectare land plot near the national convention centre from a nine-hole golf course into residential complex.

The project was sited in Me Tri Commune, Tu Liem Dist, Hanoi. The land plot was next to Lang-Hoa Lac road in the north, the Viglacera Tower in the northeast, the planned ring road, and green park, lake and Phung Khoang new urban area in the southeast, Luong The Vinh Street, Me Tri Radio Broadcasting Station in the southwest.

Me Tri Entertainment and Sport Development Co Ltd, the main investor of the nine-hole golf course project with investment capital of $15 million continued being assigned for setting up the detailed construction plan for the new high-rise tower.cafef