FOREIGN INVESTMENT - Foreign indirect investment likely to flow strongly into Vietnam in 2011
Foreign indirect investment (FII) is forecast to flow strongly into Vietnam in 2011.
Louis Nguyen, Chair and CEO of Saigon Asset Management (SAM) said that foreign investors in 2010 were most worried about the dong devaluation. When investing in Vietnam, they must convert from US dollars or euro to dong, but dong lost its value by two percent, and then five percent every several months. Moreover, the stock market was so gloomy, thus, foreign investors moved hot money flows into other countries such as Indonesia, Taiwan and Singapore, etc.
When SAM mobilised capital in 2007, most capital flows were from the Europe, 60 percent from Switzerland and Germany.
However, over the last two years, when it raised capital in the US or the Europe, the investment flows have been moved to Asia, particularly China, Taiwan, and mainly Hong Kong. Nguyen said SAM is currently inviting powerful investors from Hong Kong.
Regarding the reasons that Chinese and Hong Kong investors seem willing to pour capital into Vietnam, Nguyen said the first reason is profit and market potential of Vietnam, and investors also plan to not put all eggs in one basket. In addition, China is having difficulty in some areas. For example, its wooden products are bearing high dumping tariffs in the US market, thus Chinese investors try to move to Vietnam, etc.
Where would the capital flow?
Johan Nyvene, general director of HCM City Securities Company noted that last year, the mobilised capital from indirect foreign investors was mostly poured into real estate market, not stock market.
In order to successfully raise capital, investment funds must handle the issue on NAV discount, but it does not mean all capital sources are closed to the funds. One of the measures is to change the structure of the fund, not establishing listed fund but private fund or non-listed fund, to avoid NAV discount.
Raising investment capital into listed stocks is no longer a convincible reason to investors. Some investment funds are planning to raise capital in the second quarter, focusing on real estate market and OTC companies going to be on the exchange floors.
>From December 2010, some investment funds continued investing in real estate companies, for example, Prudential invested in Imperia An Phu residential project of Inveskia company; property fund of VPH of SAM invested $5 million into Century 21 real estate company (C21), etc. Prudential said that as expected, in the second quarter, it would continue investing in four to five additional real estate projects.
According to Prudential, the gloominess of real estate market greatly affects the efficiency and profitability of Prudential and its investment projects, however, the fund always tries to create certain stability for the investment expectation and expectation of its customers, adding that it would mobilise more capital for a second property fund in Vietnam.
Nguyen said in the first or second quarter, SAM would launch a new investment fund, focusing on real estate companies and projects; consumer companies and companies going for listing.
He added that they have received commitments from two to three investors with sufficient amount of money to establish a fund.VNS
FINANCE - Proportion of foreign debts in US dollars rise rapidly in first half of 2010
The proportion of foreign debts in US dollars rose rapidly in the first half of 2010. The Ministry of Finance has officially published the Newsletter No.6 on foreign debts. Highlights of this newsletter include the insignificant increase of new debts, but government debts accounted for majority; the sharp increase of high interest rate debts; and the larger proportion of dollar loans. Specifically, Vietnam's foreign debts to June 30, 2010 were over $29.002 billion (exchange rate applicable at the end of the period), up by 3.84 percent compared to the end of 2009, equivalent to an increase of $1.073 billion. Of the over $29 billion, government's foreign debts were nearly $25.1 billion, up by 4.82 percent compared to the end of 2009, debts guaranteed by the government were over $3.9 billion, down by 2.05 percent. Thus, the foreign debt increase in the first half of 2010 primarily arose from government debts. Indicators for foreign debt control such as outstanding debt to GDP, debt obligations to exports of goods and services, to budget revenue, etc., were not updated, but it can be said that many of these indicators are not worse than the end of 2009, they are even better as Vietnam's GDP and export growth in this period had recovered. The most worried issue is the ratio of foreign exchange reserves to total short-term outstanding debts. Reports of the Ministry of Planning and Investment and of the State Bank of Vietnam (SBV) both showed deficit of $4 billion in the balance of payments in 2010. Previously, this figure in the end of 2009 was just equivalent to 290 percent, sharply decreased from the level of over 10 thousand times in late 2007.
If comparing to the recommended levels of the World Bank, all indicators for foreign debt control are still within safety margins. Declarations that Vietnam has always been in solvency and not been late to repay the due debts had often been raised last year, and been emphasized in the Consultative Group Meetings.
Another noteworthy point is the sharp increase of high interest rate debts in the first half of 2010, while loans at preferential interest rates showed little change.
Excluding the guaranteed debts, government's foreign debts just increased slightly in the proportion of loans at interest rate of below one percent; decrease slightly in the proportion of loans at interest rate from one to three percent; but rose by 11.65 percent in the proportion of loans at interest rate from three to six percent; and doubled in loans at interest rate from six to 10 percent.
Relating to this issue, the national credit rating of Vietnam also dropped seriously since late 2009 and is currently at rather low level. There were changes to the currency structure, towards increasing the proportion of dollar loans and decreasing proportions of loans in other strong currencies. Proportion of loans in dollars rose from nearly 17 percent in late 2009 to 23 percent in mid of 2010. At the same time, loans in Japanese Yen fell from 39.63 percent to 38.25 percent, Special Drawing Right (SDR) loans fell from 29.29 percent to 26.64 percent, and loans in euro fell from 10.78 percent to 9.21 percent, etc. The report also mentioned that Vietnam has paid total debts of over $741 million, of that the principal was $478 million. Vnexpress
SHIPBUILDING - VINASHIN - Shipbuilder targets 21tr dong revenue in 2011
Vietnam Shipbuilding Industry Group (Vinashin) expects to finalise the restructuring for 25 its offshoots in Q1, 30 others in Q2, 37 in Q3 and 25 remaining in Q4, 2011. On late January 27, at the head offices, the deputy prime minister, Nguyen Sinh Hung, Head of steering group foe the restructuring of Vinashin has chaired a meeting to review the performance in 2010 and devise the key tasks in 2011. According to the report, basically, Vinashin finalised the handover of its facilities and project to the Vietnam National Oil and Gas Group (PetroVietnam) and Vietnam Ocean Shipping Corp (Vinalines). 23 of 26 ships transferred to Vinalines have been put into operation. Vinashin is urgently building the process of transferring capital and offloading capital in its offshoots. As planned, the group will finish the restructuring for 25 subsidiaries in Q1, 30 others in Q2, 37 in Q3 and 25 remaining in Q4, 2011. After the restructuring, Vinashin's structure will include the holding company, 19 subsidiaries, one associated company, and 22 offshoots of Vinashin's subsidiaries. The group's total assets would be 68.243 trillion dong and total liabilities would be 53.054 trillion dong. In 2011, the shipbuilder targets to gain total output of 22.763 trillion dong, equaling to 198 percent against 2010's actualised figure and revenue at 21.143 trillion dong or 205 percent over 2010's. According to Hung, the group needs to build its development strategy right in Q1, 2011.VNS
RENEWABLE ENERGY - US solar firm to build $300m Vietnam plant
A US solar panel maker Wednesday said it will build a $300 million factory in Vietnam, boosting the country's efforts to reinvent itself as a hub for high-tech manufacturing.
Arizona-based First Solar said Vietnamese authorities had approved the investment in HCM City's Cu Chi district, in the south of the country.
The facility will employ around 600 people and production is expected to begin in the second half of next year, a company spokeswoman told AFP.
Vietnam is still a rural-based society that has relied on natural resources and unskilled labour to achieve growth. But the country's communist leaders now speak of moving to a more technologically advanced system of production. "You're seeing more and more high-tech firms come into Vietnam," outgoing United States ambassador Michael Michalak said at his farewell press conference this month. He cited First Solar's plans as an example. VNS
REAL ESTATE - Vietnam among top 20 most expensive realty markets worldwide
Vietnam, the 120th poorest nation worldwide, is among top 20 countries having the most expensive realty markets, state media reported, citing an official. The realty prices in the Southeast Asian country, particularly in Hanoi, have repeatedly risen amid the stable demand which is mostly for low-cost housing projects, said Nguyen Tran Nam, deputy minister of the Ministry of Construction. Nam explained the paradox for speculation as investors from different localities pouring money into realty projectd in Hanoi on expectations that it would rise due to higher demand. Many rich people in provinces from northern to central regions have invested in land and houses to serve later study, work and residence of their children, Nam said, adding that investors of each province bought about 50 apartments and houses in Hanoi per year. Meanwhile, Vu Thanh Tung, director of Vietnam Investment Consulting and Construction Designing JSC attributed the situation to fake demand caused by realty investors. Realty developers sometimes caused fake thin supply to attract consumers, Tung explained.
High cost and bank interests also cause higher output prices, Tung added, saying that the realty prices in Hanoi double that in the southern economic hub of HCM City and five to ten times higher than that in the southern province of Binh Duong, the leading locality for FDI attraction.VCCI
TRADE - Export turnover in January increases sharply General Statistic Office has lately released that the domestic enterprises reported gaining total export turnover in January of about $6 billion and import value of $7 billion, up 18 percent and 15 percent respectively year-on-year. Therefore, in the first month of year, Vietnam enjoyed trade deficit of $1 billion, equivalent to 17 percent of the total export turnover, a slight increase compared to the same period last year of $926 million. Among the export items, rubber was rank at the first place with about 2.5 times higher than that of last year, followed by seafood, cashew nut, coffee and steel products with impressive growth of 130-150 percent year-on-year.TBKT
HIGH TECH - Hanel invests $35m for constructing software park
Hanel one-member Co Ltd has officially been granted investment licence for constructing the Hanoi Software Technology Park.
The software park was sited in area of 312,355 square metres in Phuc Loi Ward, Long Bien Dist, Hanoi with total investment capital of $35 million.
The investor will concentrate on building such facilities as software production centre, electronic trade centre, software technological training college, green park, lake, five-star international hotel, housing complex for experts, high-class trade centre etc.
The construction was supposed to be started in Q1 and put into operation in Q1 of 2014.
BANKING - VietinBank sees assets jumping 50pct in 2011: report
VietinBank, Vietnam's top partly private lender, expects its total assets to rise by 50 percent this year after a surge of 51 percent in 2010, a state-run newspaper reported on Wednesday.
The Hanoi-based VietinBank would seek more loans over the next decade to boost its equity after borrowing $125 million from the International Finance Corporation (IFC), chair Pham Huy Hung was quoted by the central bank-run Banking Times newspaper as saying. Hung's projection on the total assets in 2011 was higher than the 20 percent rise that VietinBank, or the Vietnam Joint Stock Commercial Bank for Industry and Trade, forecast earlier this month. Shares in VietinBank were trading up 0.9 percent at 22,800 dong ($1.17) at 0209 GMT on Wednesday. The loan, extended by the IFC and the IFC Capitalisation Fund, lasts 10 years and two months and carries an interest rate on par with 6-month LIBOR plus 1.5 percent per year, Hung said. "At present this rate is very good for Vietnam," Hung was quoted as saying in an interview with the newspaper. "We expect (the total assets) continue to rise another 50 percent. That means we will need to increase equity to raise the CAR," Hung said, referring to the capital adequacy ratio.
Stake Sale He was speaking as VietinBank signed on Tuesday an agreement to sell 10 percent of stake to the IFC and its fund at a value of around $182 million, based on a joint statement. On Monday Fitch Ratings affirmed VietinBank's Individual rating at 'D/E' and also affirmed Vietinbank's Support rating at '4'. The ratings agency said "the affirmation reflected Fitch's concerns about Vietinbank's weak underlying loan quality and liquidity arising from excessively strong loan growth, and the bank's still weak capitalisation."
The IFC Capitalisation Fund is a global equity and subordinated debt fund founded by the World Bank's private sector lending arm IFC and the Japan Bank for International Cooperation.VNS
POWER - Second turbine of Song Tranh 2 hydropower plant starts operation Electricity of Vietnam (EVN) Group yesterday officially started construction on the second turbine of Song Tranh 2 hydropower plant with designed capacity of 95MW. The Song Tranh 2 hydropower plant project has been conducted by EVN Group as the main investor. It's the second hydropower plant to be built on Vu Gia-Thu Bon river system. It is expected that the hydropower plant will produce annual electricity output of 679.6 million KWh to join the national grid.VNS
Oliver Massmann
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Please note that the above articles, comments etc have been extracted or reproduced and forwarded electronically from the sources credited above and have not been authored by the sender and do not necessarily represent the views of the sender. The sender takes no responsibility for the accuracy or legitimacy of the above or changes that may be made to the above by subsequent forwarders or recipients.
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Saturday 29 January 2011
Friday 21 January 2011
Vietnam - News and Regulations
FINANCE - Vietnam SME index stays at the second highest in the world
Though dropping 8 points in comparison to the last wave, Vietnam small business confidence index stays positively at 156, the second highest in the world, over the global average of 125. This is in line with the economic outlook of all as SMEs in Vietnam with 60 percent who believe that the economy will continue to grow in the next six months.
Over half of the surveyed enterprises in Vietnam are involved in international business, which is much higher than the average global figure of 29 percent. Mainly these enterprises are conducting import (71 percent) and export services (34 percent) marketing products/services through international subsidiaries or offices (10 percent) and off-shoring services, e.g. call centres, service centres (7 percent). Over half of the Vietnam SMEs have plans to either expand (42 percent) or continue their existing international activities (9 percent) while about one fifth (18 percent) have plans to go international while the rest of almost one third (31 percent) does not. When being asked about the intention to do business internationally in the next two years, 82 percent of the international companies believe that they will expand their business, which is double compared to the figure globally. 37 percent of domestic enterprises have plans to do business internationally. Availability of financing (49 percent) and concerns about dealing in foreign currencies (48 percent) remain at the top of barriers for doing international business. Aside from that, the complexity of certain international markets, e.g. tax, foreign currency controls, local regulations and legal complexities, lack of knowledge (e.g. taxation, regulations), contacts and experience of overseas markets are also concerns for these businesses. While considering the expansion of their business internationally, 48 percent of the surveyed Vietnam SMEs said that they need information about foreign exchange risk and regulations while another 46 percent need to know more about financial options that they may be available. They also consider tax implications and legal advice as vital to their business should they wish to expand globally. Increasing their revenue is the top reason that drives businesses to trade beyond their national borders with 95 percent of Vietnam SMEs agreeing on this. 48 percent wish to expand abroad to tap new customers in their target. The top three concerns for the next six months are inflation (62 percent), economic conditions (52 percent) and difficulties in accessing credit (48 percent). This is also in line with the latest result from the HSBC Emerging Market Index survey. The survey results also highlight that government policy measures such as monetary policy and stimulus packages play a key role for local economic growth as 53 percent of local SMEs believe that these help their business significantly, followed by 28 percent of the enterprises who say the increasing demand from domestic market will also boost the economic growth. Commenting about the results of the survey, Huynh Buu Quang, Head of Commercial Banking, HSBC Bank (Vietnam) Ltd said: "The results of the latest HSBC Global Small Business survey continued to reflect the shift in economic growth from developed markets to emerging markets. Vietnam small businesses will benefit from this movement. I'm glad to see the strong intention to expand business internationally to capture new opportunities, but they will also need support to prepare carefully for the expansion, from financing resources to knowledge on international markets, foreign exchange risk and regulations. At HSBC, with a network of 8,000 offices in 87 countries and territories, our international connectivity and excellent on-the-ground expertise, we are uniquely placed to help small businesses with their financing needs and function as a bridge for those who would like to go beyond the national borders to tap new markets. intellasia
ENERGY EFFICIENCY - Steel and cement sectors must minimise electricity use
This is the first time pressure of supplying power for the two industries has actively been discussed, before the risk of 2011's power shortage, which is forecasted to be two to three times more serious than last year. The meeting was chaired by deputy minister of Industry and Trade Hoang Quoc Vuong last week, with the participation of the Vietnam Steel Association, Vietnam National Cement Corporation, Vietnam Steel Corporation, Electricity of Vietnam (EVN), Electricity Regulatory Authority of Vietnam, Energy Department and Department of Heavy Industry. Deputy minister Vuong said 2011 continues to be a very difficult year for power supply. According to EVN's power supply and operation plan in 2011, there might be a shortage of up to two billion kWh of power in the dry season of 2011, doubling last year's shortage. Thus, reducing the use of power is required and steel and cement industries must reduce power consumption during this period, directed the deputy minister of Industry and Trade. In 2010, as cutting living power was not enough, steel and cement industries were also affected. In July 2010, the Vietnam Steel Corporation sent written document to Ministry of Industry and Trade requesting the ministry to direct EVN not to apply sudden power cut. Just two months later, EVN sent written report to the ministry mentioning that the hot development of steel industry, with supply exceeding demand, has put great pressure on power sector, which already lacked of investment capital, now must supply power for the projects out of planning. In the context of future power shortage, the ministry also requested steel and cement enterprises to set up production and repairing plans to minimise the use of power in the dry months (especially from March to June) of 2011.
In 2010, commercial electricity output of EVN was estimated at 85.7 billion kWh (up by 14.5 percent over 2009). Of that, steel and cement manufacturing already consumed 10.19 billion kWh. The power consumption of these two industries accounted for 12.04 percent of the total commercial electricity production, up by 27.5 percent over 2009. Power consumption of steel sector was 4.67 billion kWh, accounting for 5.52 percent, and of cement sector was 5.52 billion kWh, accounting for 6.5 percent. According to calculations of Vietnam Cement Association, cement consumption would continue to increase by nine to 10 percent compared to 2010, estimated at 56 to 57 million tonnes. In 2011, cement industry would have 10 new plants put into operation, with output volume expected to increase by about nine billion tonnes, bringing the total capacity of cement production in 2011 to estimated over 60 million tonnes, meeting the domestic demand and having a little surplus for export.
In 2010, cement industry produced nearly 51 million tonnes; the consumption reached 50.21 million tonnes, up by 10 percent compared to 2009.
As forecasted, with the rise of input costs as at present, in 2011, prices of electricity, coal and packing would continue to rise, and there would be an increase adjustment to prices of cement in the market. Particularly, as recommended by Department of Heavy Industry (Ministry of Industry and Trade), in 2011, cement enterprises would also face tension of power supply; the peak time is from March to June. To limit the negative impacts of power reduction, at the request of Ministry of Industry and Trade, the Vietnam Cement Association and Vietnam National Cement Corporation have sent written document to members of steel and cement industries directing them to soon improve technology and equipment, in order to enhance efficiency of power use. Especially, those members should have plans to used waste energy to to support production.
To avoid the same situation like last year, EVN needs to work with steel and cement manufacturers to build a unified plan for power supply in 2011. However, if EVN needs to reduce power supply, EVN should still prioritise the plants of those two sectors, which have high electrical efficiency and are in development planning.DDKT
VIETNAM BOND INTERNATIONAL - Unfavourable time forces firms to postpone International bond issuance
Vietnam Oil and Gas Group of Vietnam (PVN), in the last days of 2010, has postponed the plan to issue international bonds worth $1 billion. Previously, some other corporations have also failed to raise capital through international bond issuance. However, in 2011, international capital remains an important driving force for Vietnamese enterprises and any moves of large enterprises can strongly influence the domestic capital market.
Dinh La Thang, PVN's President said the group has officially stopped the issuance of international bonds in US market in the fourth quarter of 2010. Thang said the reason was the unfavourable time, adding that in deed, some corporations of Vietnam also failed to do so, referring to the names such as Vietnam Coal-Mineral Industries Group (TKV) and Electricity of Vietnam (EVN). Both those corporations and PVN planned to mobilise capital on international bond market in 2010, with offering value ranging from $500 million to $1 billion. Preparing for the international bond releases, all three corporations have done international credit ratings with prestigious credit rating agencies such as Standard & Poor's and Moody's, etc. The ratings were completed in mid of the second quarter of 2010. However, Vinashin's issue in June 2010 has greatly affected the plans. TKV's credit rating was degraded from BB to BB- (according to assessment of Standard & Poor's), which is lower than the investment level. Standard & Poor's did the rating based on the low ability that government would support TKV as well as other corporations in paying debts. At the same time, PVN had to carry out another credit rating since it received some losing companies transferred from Vinashin. In 2011, mobilising international capital continues to be necessary if Vietnam hopes to grow quickly and strongly. Talking on whether the situation would be different in 2011, Thang said that in 2011, PVN needs $5 to $6 billion dollars for project investments, only 30 percent of which is the group's equity capital. PVN will carry out the issuance when the market is favourable. EVN is not an exception. In the last five years, the group has implemented and put into operation 21 power projects with total capacity of 6,280 MW (including capacity of 770 MW purchased from China), of that, 10 plants were completed in 2010, with total capacity of 2,078 MW. In addition, EVN is carrying out 15 projects, with total capacity of 10,581 MW, of which six power projects started in 2010, with total capacity of 5,356 MW. Total capital investment needed for the 15 projects is $9 billion, including thermal power projects: Nghi Son 1, Mong Duong 1, Vinh Tan 2, Duyen Hai 1, Duyen Hai 3, and hydropower projects: Song Bung 4, Lai Chau, etc.
Moreover, EVN has 11 projects in preparatory phase of investment, with total capacity of 7, 285 MW, and is completing investment procedures for five other power projects to be started in 2011-2015 period, including two nuclear power plants Ninh Thuan 1 & 2 (over 4,000 MW), and three pumped storage hydropower plants (Bac Ai, Ham Thuan Bac, and Moc Chau, with total capacity of 3,600 MW). For such projects, it is very difficult to only rely on domestic capital.
For TKV, in 2011-2015 period, the total investment capital needed is up to 261.316 trillion dong, for projects to expand coal mines, improve mining capacity, thermal power projects such as Cam Pha I, II, Mao Khe, and Dong Nai 5 hydropower project, etc. Of the investment capital, TKV will seek commercial loans for 183.869 trillion dong, other capital sources only account for 32.447 trillion dong. Not only state-owned corporations are in need of international capital, private corporations such as Hoang Anh Gia Lai and Vincom are urgently carrying out international bond issuance plans as the domestic capital seems to be rather limited. Commenting on information that Moody's lowered credit rating of Vietnamese corporations after Vinashin's issue, general director of a large financial institution in Vietnam said that we should not be too pessimistic; in fact, this move only retards the capital mobilisation process of enterprises. In contrast, after this issue, corporations would recognise their weaknesses, strengths and issues to consider amendments.
When the corporations are facing difficulties in issuing international bonds, must the government directly raise capital as in the two previous releases? According to experts, the government should create mechanism to encourage corporations to self manage the international bond issuance. Vietnam has long been dependent on the government, turning government into the only prop, forcing the government to control various issues while it does not have sufficient resources to monitor. Letting corporations be in active state would make the mobilisation process to be healthier, more transparent and the prime costs may be lower. The economy would be fuelled when corporations successfully mobilised capital from international bond issuance. A greater meaning is the national brand of Vietnam on international capital market would be improved. Therefore, there is a need for a mechanism to support corporations and enterprises to raise capital abroad. In addition, self-renewal and operating efficiency improvement of state-owned enterprises are essential requirements.
In addition to the plans to mobilise international bond funds, 2011 is found to be a busy year in calling for investment for projects underway. Thang said the corporation has considered calling capital from sources such as equitising major projects, partly selling PVN's capital in the projects to foreign investors. PVGas is currently negotiating with foreign partners to sell 20 percent of stake, followed by Nhon Trach 2 thermal power plant and Dung Quat Oil Refinery. PVN would also partly divest capital in the business members it does not hold controlling shares. Particularly, it would negotiate with Samsung Corporation (Korea) to lower the percentage of ownership in PetroVietnam Construction Joint Stock Corporation by 30 percent.
According to a leader in oil and gas industry, in the previous time, many investors want to purchase shares of PVN's power plants. If the conditions such as contract to sell electricity to EVN, selling price to EVN were passed smoothly, this capital mobilisation channel would be very potential.VNS
PRIVATISATION - Vietnam's Petrolimex to complete privatisation process this year
State-run Vietnam National Petroleum Corp. Friday said it aims to complete its privatisation process this year. The company, known as Petrolimex, said in a statement that the ownership restructuring plan will help it operate more efficiently.
The Ministry of Industry and Trade said last year that the government will retain a stake of at least 75 percent in the company when it is privatised.
Petrolimex, which holds a 60 percent share of Vietnam's retail oil product market, also Friday reported pre-tax full-year profit of 1.21 trillion dong ($62 million) in 2010 but didn't provide a comparative earnings figures for 2009. The company said it had revenue of 138.6 trillion dong in 2010, 29 percent higher than the previous year. DTCHK
PetroVietnam awarded in top firms list
HCM City — The Viet Nam Report Joint Stock Company (Viet Nam Report) officially announced the top 500 Vietnamese companies of 2010 (VNR500).
The winners were presented with awards in HCM City last Saturday.
The Viet Nam National Oil and Gas Group (PetroVietnam) topped the list of five largest State-owned enterprises, followed by the Viet Nam National Petroleum Corporation (Petrolimex), the Electricity of Viet Nam (EVN), the Viet Nam Posts and Telecommunications Group (VNPT) and the Viet Nam National Coal and Mineral Industries Holding Corporation Ltd (Vinacomin).
The top five largest private businesses included the Sai Gon Gold and Silver ACB-SJC Joint Stock Company, the Corporation for Financing and Promoting Technologies (FPT), the Asia Commercial Joint Stock Bank (ACB), the Viet Nam Dairy Products JSC (Vinamilk) and the DOJI Gold and Gem Group.
On the occasion, about 400 leaders from the selected businesses attended the forum "Large businesses and their leading role".
The VNR500 Forum 2011 also drew the participation of leading experts from inside and outside of the country, including Prof Stephen M Walt from Harvard University and Alex Malley, CEO of the Australian Association of Certified Practising Accountants (CPA Australia).
According to participants at the forum, large businesses should not only focus on business operations but also have an important and active leading role in addressing social issues such as education, health, and diplomacy.
Nearly half of the companies in the VNR500 are State-owned enterprises. Foreign-invested and private companies accounted for 23.8 per cent and 31.2 per cent, respectively.
The proportion of private companies on the VNR500 has increased yearly, accounting for 24 per cent of the enterprises listed in 2008 and 30 per cent in 2009.
The Viet Nam Report ranks companies according to independent criteria, including the enterprises benefits, total assets and number of employees.
VNR500 is independently surveyed by Viet Nam Report with support and guidance from domestic and foreign experts, which is headed by Associate Dean of Harvard's Business School John Quelch. The organising board said it based the rankings on the Forbes 500 list and on international standards.
The database was sourced from total assets, turnover, profit, growth rate and employee figures that were compiled by the General Statistics Office and surveys. — VNS
PRODUCTION – EXPORT - Mascot International Vietnam invests in second garment factory
Thomas Bo Pedersen, director of Denmark's Mascot International Vietnam Co specifying in producing and exporting garment products announced that the company would invest additional $24 million to build the second garment factory in Vietnam, raising the designed capacity to three times higher than the current one. The company reported gaining positive growth rate of 20 percent in 2010. Therefore, Mascot would like to build long-term investment strategy in Vietnam where there were many favourable conditions created for investors, Pedersen said. At present, the company's first garment factory was located in Hai Duong province with over 1,000 local people working there.VNS
POWER - Vietnam invests in Cambodia power plant Vietnam Ministry of Planning and Investment has licensed the $800 million hydro-electric power plant to be constructed in Cambodia, according to the ministry's Foreign Investment Agency. This project by state-owned Vietnam Electricity Group (EVN) is solely invested by its joint-stock subsidiary EVN International, whose shareholders include major state companies and corporations, such as PetroVietnam, EVN, and Vietnam Rubber Group. The power plant, Lower Se San 2, is located in Cambodia's Stung Treng province on the Se San river, a major tributary of the Great Mekong River flowing through Indochinese countries from China. Its capacity is estimated at 400MW with an average output of 1998 million KWh per year, half of which will be sold back to Cambodia. EVN International also currently carries out other energy projects and research for investment in neighbouring Laos and Cambodia. Construction for the plant is to begin this year and it is expected to go into operation in 2016. ECO-NEWS
Construction on Vung Ang 2 thermo power plant to start The management board of Vung Ang Economic Zone, Ha Tinh province has allocated 43-hectare land for building Vung Ang 2 thermo power plant in Ky Loi Commune, Ky Anh Dist, near Vung Ang 1 thermo power plant. The construction project was supposed to be carried out by Japanese investor of Vapco Co with total investment capital of $1.7 billion.
The new thermo power plant has designed capacity of 1,200MW. At present, the local functional authorities concentrated on ground clearance and compensation works, as well as resettlement support for local people. The construction was supposed to be kicked off before March 2011.
Despite the weather conditions, the contractors of Vung Ang 1 thermo power plant have already finished installing the steel structure for the second boiler of this project, up to now.THGOI
Oliver Massmann
Rechtsanwalt
This e-mail is from Duane Morris Vietnam LLC (a law firm). We can provide a list of our partners upon request. If this e-mail has been sent to you by mistake, please let us know, and then delete this message.
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Please note that the above articles, comments etc have been extracted or reproduced and forwarded electronically from the sources credited above and have not been authored by the sender and do not necessarily represent the views of the sender. The sender takes no responsibility for the accuracy or legitimacy of the above or changes that may be made to the above by subsequent forwarders or recipients.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Though dropping 8 points in comparison to the last wave, Vietnam small business confidence index stays positively at 156, the second highest in the world, over the global average of 125. This is in line with the economic outlook of all as SMEs in Vietnam with 60 percent who believe that the economy will continue to grow in the next six months.
Over half of the surveyed enterprises in Vietnam are involved in international business, which is much higher than the average global figure of 29 percent. Mainly these enterprises are conducting import (71 percent) and export services (34 percent) marketing products/services through international subsidiaries or offices (10 percent) and off-shoring services, e.g. call centres, service centres (7 percent). Over half of the Vietnam SMEs have plans to either expand (42 percent) or continue their existing international activities (9 percent) while about one fifth (18 percent) have plans to go international while the rest of almost one third (31 percent) does not. When being asked about the intention to do business internationally in the next two years, 82 percent of the international companies believe that they will expand their business, which is double compared to the figure globally. 37 percent of domestic enterprises have plans to do business internationally. Availability of financing (49 percent) and concerns about dealing in foreign currencies (48 percent) remain at the top of barriers for doing international business. Aside from that, the complexity of certain international markets, e.g. tax, foreign currency controls, local regulations and legal complexities, lack of knowledge (e.g. taxation, regulations), contacts and experience of overseas markets are also concerns for these businesses. While considering the expansion of their business internationally, 48 percent of the surveyed Vietnam SMEs said that they need information about foreign exchange risk and regulations while another 46 percent need to know more about financial options that they may be available. They also consider tax implications and legal advice as vital to their business should they wish to expand globally. Increasing their revenue is the top reason that drives businesses to trade beyond their national borders with 95 percent of Vietnam SMEs agreeing on this. 48 percent wish to expand abroad to tap new customers in their target. The top three concerns for the next six months are inflation (62 percent), economic conditions (52 percent) and difficulties in accessing credit (48 percent). This is also in line with the latest result from the HSBC Emerging Market Index survey. The survey results also highlight that government policy measures such as monetary policy and stimulus packages play a key role for local economic growth as 53 percent of local SMEs believe that these help their business significantly, followed by 28 percent of the enterprises who say the increasing demand from domestic market will also boost the economic growth. Commenting about the results of the survey, Huynh Buu Quang, Head of Commercial Banking, HSBC Bank (Vietnam) Ltd said: "The results of the latest HSBC Global Small Business survey continued to reflect the shift in economic growth from developed markets to emerging markets. Vietnam small businesses will benefit from this movement. I'm glad to see the strong intention to expand business internationally to capture new opportunities, but they will also need support to prepare carefully for the expansion, from financing resources to knowledge on international markets, foreign exchange risk and regulations. At HSBC, with a network of 8,000 offices in 87 countries and territories, our international connectivity and excellent on-the-ground expertise, we are uniquely placed to help small businesses with their financing needs and function as a bridge for those who would like to go beyond the national borders to tap new markets. intellasia
ENERGY EFFICIENCY - Steel and cement sectors must minimise electricity use
This is the first time pressure of supplying power for the two industries has actively been discussed, before the risk of 2011's power shortage, which is forecasted to be two to three times more serious than last year. The meeting was chaired by deputy minister of Industry and Trade Hoang Quoc Vuong last week, with the participation of the Vietnam Steel Association, Vietnam National Cement Corporation, Vietnam Steel Corporation, Electricity of Vietnam (EVN), Electricity Regulatory Authority of Vietnam, Energy Department and Department of Heavy Industry. Deputy minister Vuong said 2011 continues to be a very difficult year for power supply. According to EVN's power supply and operation plan in 2011, there might be a shortage of up to two billion kWh of power in the dry season of 2011, doubling last year's shortage. Thus, reducing the use of power is required and steel and cement industries must reduce power consumption during this period, directed the deputy minister of Industry and Trade. In 2010, as cutting living power was not enough, steel and cement industries were also affected. In July 2010, the Vietnam Steel Corporation sent written document to Ministry of Industry and Trade requesting the ministry to direct EVN not to apply sudden power cut. Just two months later, EVN sent written report to the ministry mentioning that the hot development of steel industry, with supply exceeding demand, has put great pressure on power sector, which already lacked of investment capital, now must supply power for the projects out of planning. In the context of future power shortage, the ministry also requested steel and cement enterprises to set up production and repairing plans to minimise the use of power in the dry months (especially from March to June) of 2011.
In 2010, commercial electricity output of EVN was estimated at 85.7 billion kWh (up by 14.5 percent over 2009). Of that, steel and cement manufacturing already consumed 10.19 billion kWh. The power consumption of these two industries accounted for 12.04 percent of the total commercial electricity production, up by 27.5 percent over 2009. Power consumption of steel sector was 4.67 billion kWh, accounting for 5.52 percent, and of cement sector was 5.52 billion kWh, accounting for 6.5 percent. According to calculations of Vietnam Cement Association, cement consumption would continue to increase by nine to 10 percent compared to 2010, estimated at 56 to 57 million tonnes. In 2011, cement industry would have 10 new plants put into operation, with output volume expected to increase by about nine billion tonnes, bringing the total capacity of cement production in 2011 to estimated over 60 million tonnes, meeting the domestic demand and having a little surplus for export.
In 2010, cement industry produced nearly 51 million tonnes; the consumption reached 50.21 million tonnes, up by 10 percent compared to 2009.
As forecasted, with the rise of input costs as at present, in 2011, prices of electricity, coal and packing would continue to rise, and there would be an increase adjustment to prices of cement in the market. Particularly, as recommended by Department of Heavy Industry (Ministry of Industry and Trade), in 2011, cement enterprises would also face tension of power supply; the peak time is from March to June. To limit the negative impacts of power reduction, at the request of Ministry of Industry and Trade, the Vietnam Cement Association and Vietnam National Cement Corporation have sent written document to members of steel and cement industries directing them to soon improve technology and equipment, in order to enhance efficiency of power use. Especially, those members should have plans to used waste energy to to support production.
To avoid the same situation like last year, EVN needs to work with steel and cement manufacturers to build a unified plan for power supply in 2011. However, if EVN needs to reduce power supply, EVN should still prioritise the plants of those two sectors, which have high electrical efficiency and are in development planning.DDKT
VIETNAM BOND INTERNATIONAL - Unfavourable time forces firms to postpone International bond issuance
Vietnam Oil and Gas Group of Vietnam (PVN), in the last days of 2010, has postponed the plan to issue international bonds worth $1 billion. Previously, some other corporations have also failed to raise capital through international bond issuance. However, in 2011, international capital remains an important driving force for Vietnamese enterprises and any moves of large enterprises can strongly influence the domestic capital market.
Dinh La Thang, PVN's President said the group has officially stopped the issuance of international bonds in US market in the fourth quarter of 2010. Thang said the reason was the unfavourable time, adding that in deed, some corporations of Vietnam also failed to do so, referring to the names such as Vietnam Coal-Mineral Industries Group (TKV) and Electricity of Vietnam (EVN). Both those corporations and PVN planned to mobilise capital on international bond market in 2010, with offering value ranging from $500 million to $1 billion. Preparing for the international bond releases, all three corporations have done international credit ratings with prestigious credit rating agencies such as Standard & Poor's and Moody's, etc. The ratings were completed in mid of the second quarter of 2010. However, Vinashin's issue in June 2010 has greatly affected the plans. TKV's credit rating was degraded from BB to BB- (according to assessment of Standard & Poor's), which is lower than the investment level. Standard & Poor's did the rating based on the low ability that government would support TKV as well as other corporations in paying debts. At the same time, PVN had to carry out another credit rating since it received some losing companies transferred from Vinashin. In 2011, mobilising international capital continues to be necessary if Vietnam hopes to grow quickly and strongly. Talking on whether the situation would be different in 2011, Thang said that in 2011, PVN needs $5 to $6 billion dollars for project investments, only 30 percent of which is the group's equity capital. PVN will carry out the issuance when the market is favourable. EVN is not an exception. In the last five years, the group has implemented and put into operation 21 power projects with total capacity of 6,280 MW (including capacity of 770 MW purchased from China), of that, 10 plants were completed in 2010, with total capacity of 2,078 MW. In addition, EVN is carrying out 15 projects, with total capacity of 10,581 MW, of which six power projects started in 2010, with total capacity of 5,356 MW. Total capital investment needed for the 15 projects is $9 billion, including thermal power projects: Nghi Son 1, Mong Duong 1, Vinh Tan 2, Duyen Hai 1, Duyen Hai 3, and hydropower projects: Song Bung 4, Lai Chau, etc.
Moreover, EVN has 11 projects in preparatory phase of investment, with total capacity of 7, 285 MW, and is completing investment procedures for five other power projects to be started in 2011-2015 period, including two nuclear power plants Ninh Thuan 1 & 2 (over 4,000 MW), and three pumped storage hydropower plants (Bac Ai, Ham Thuan Bac, and Moc Chau, with total capacity of 3,600 MW). For such projects, it is very difficult to only rely on domestic capital.
For TKV, in 2011-2015 period, the total investment capital needed is up to 261.316 trillion dong, for projects to expand coal mines, improve mining capacity, thermal power projects such as Cam Pha I, II, Mao Khe, and Dong Nai 5 hydropower project, etc. Of the investment capital, TKV will seek commercial loans for 183.869 trillion dong, other capital sources only account for 32.447 trillion dong. Not only state-owned corporations are in need of international capital, private corporations such as Hoang Anh Gia Lai and Vincom are urgently carrying out international bond issuance plans as the domestic capital seems to be rather limited. Commenting on information that Moody's lowered credit rating of Vietnamese corporations after Vinashin's issue, general director of a large financial institution in Vietnam said that we should not be too pessimistic; in fact, this move only retards the capital mobilisation process of enterprises. In contrast, after this issue, corporations would recognise their weaknesses, strengths and issues to consider amendments.
When the corporations are facing difficulties in issuing international bonds, must the government directly raise capital as in the two previous releases? According to experts, the government should create mechanism to encourage corporations to self manage the international bond issuance. Vietnam has long been dependent on the government, turning government into the only prop, forcing the government to control various issues while it does not have sufficient resources to monitor. Letting corporations be in active state would make the mobilisation process to be healthier, more transparent and the prime costs may be lower. The economy would be fuelled when corporations successfully mobilised capital from international bond issuance. A greater meaning is the national brand of Vietnam on international capital market would be improved. Therefore, there is a need for a mechanism to support corporations and enterprises to raise capital abroad. In addition, self-renewal and operating efficiency improvement of state-owned enterprises are essential requirements.
In addition to the plans to mobilise international bond funds, 2011 is found to be a busy year in calling for investment for projects underway. Thang said the corporation has considered calling capital from sources such as equitising major projects, partly selling PVN's capital in the projects to foreign investors. PVGas is currently negotiating with foreign partners to sell 20 percent of stake, followed by Nhon Trach 2 thermal power plant and Dung Quat Oil Refinery. PVN would also partly divest capital in the business members it does not hold controlling shares. Particularly, it would negotiate with Samsung Corporation (Korea) to lower the percentage of ownership in PetroVietnam Construction Joint Stock Corporation by 30 percent.
According to a leader in oil and gas industry, in the previous time, many investors want to purchase shares of PVN's power plants. If the conditions such as contract to sell electricity to EVN, selling price to EVN were passed smoothly, this capital mobilisation channel would be very potential.VNS
PRIVATISATION - Vietnam's Petrolimex to complete privatisation process this year
State-run Vietnam National Petroleum Corp. Friday said it aims to complete its privatisation process this year. The company, known as Petrolimex, said in a statement that the ownership restructuring plan will help it operate more efficiently.
The Ministry of Industry and Trade said last year that the government will retain a stake of at least 75 percent in the company when it is privatised.
Petrolimex, which holds a 60 percent share of Vietnam's retail oil product market, also Friday reported pre-tax full-year profit of 1.21 trillion dong ($62 million) in 2010 but didn't provide a comparative earnings figures for 2009. The company said it had revenue of 138.6 trillion dong in 2010, 29 percent higher than the previous year. DTCHK
PetroVietnam awarded in top firms list
HCM City — The Viet Nam Report Joint Stock Company (Viet Nam Report) officially announced the top 500 Vietnamese companies of 2010 (VNR500).
The winners were presented with awards in HCM City last Saturday.
The Viet Nam National Oil and Gas Group (PetroVietnam) topped the list of five largest State-owned enterprises, followed by the Viet Nam National Petroleum Corporation (Petrolimex), the Electricity of Viet Nam (EVN), the Viet Nam Posts and Telecommunications Group (VNPT) and the Viet Nam National Coal and Mineral Industries Holding Corporation Ltd (Vinacomin).
The top five largest private businesses included the Sai Gon Gold and Silver ACB-SJC Joint Stock Company, the Corporation for Financing and Promoting Technologies (FPT), the Asia Commercial Joint Stock Bank (ACB), the Viet Nam Dairy Products JSC (Vinamilk) and the DOJI Gold and Gem Group.
On the occasion, about 400 leaders from the selected businesses attended the forum "Large businesses and their leading role".
The VNR500 Forum 2011 also drew the participation of leading experts from inside and outside of the country, including Prof Stephen M Walt from Harvard University and Alex Malley, CEO of the Australian Association of Certified Practising Accountants (CPA Australia).
According to participants at the forum, large businesses should not only focus on business operations but also have an important and active leading role in addressing social issues such as education, health, and diplomacy.
Nearly half of the companies in the VNR500 are State-owned enterprises. Foreign-invested and private companies accounted for 23.8 per cent and 31.2 per cent, respectively.
The proportion of private companies on the VNR500 has increased yearly, accounting for 24 per cent of the enterprises listed in 2008 and 30 per cent in 2009.
The Viet Nam Report ranks companies according to independent criteria, including the enterprises benefits, total assets and number of employees.
VNR500 is independently surveyed by Viet Nam Report with support and guidance from domestic and foreign experts, which is headed by Associate Dean of Harvard's Business School John Quelch. The organising board said it based the rankings on the Forbes 500 list and on international standards.
The database was sourced from total assets, turnover, profit, growth rate and employee figures that were compiled by the General Statistics Office and surveys. — VNS
PRODUCTION – EXPORT - Mascot International Vietnam invests in second garment factory
Thomas Bo Pedersen, director of Denmark's Mascot International Vietnam Co specifying in producing and exporting garment products announced that the company would invest additional $24 million to build the second garment factory in Vietnam, raising the designed capacity to three times higher than the current one. The company reported gaining positive growth rate of 20 percent in 2010. Therefore, Mascot would like to build long-term investment strategy in Vietnam where there were many favourable conditions created for investors, Pedersen said. At present, the company's first garment factory was located in Hai Duong province with over 1,000 local people working there.VNS
POWER - Vietnam invests in Cambodia power plant Vietnam Ministry of Planning and Investment has licensed the $800 million hydro-electric power plant to be constructed in Cambodia, according to the ministry's Foreign Investment Agency. This project by state-owned Vietnam Electricity Group (EVN) is solely invested by its joint-stock subsidiary EVN International, whose shareholders include major state companies and corporations, such as PetroVietnam, EVN, and Vietnam Rubber Group. The power plant, Lower Se San 2, is located in Cambodia's Stung Treng province on the Se San river, a major tributary of the Great Mekong River flowing through Indochinese countries from China. Its capacity is estimated at 400MW with an average output of 1998 million KWh per year, half of which will be sold back to Cambodia. EVN International also currently carries out other energy projects and research for investment in neighbouring Laos and Cambodia. Construction for the plant is to begin this year and it is expected to go into operation in 2016. ECO-NEWS
Construction on Vung Ang 2 thermo power plant to start The management board of Vung Ang Economic Zone, Ha Tinh province has allocated 43-hectare land for building Vung Ang 2 thermo power plant in Ky Loi Commune, Ky Anh Dist, near Vung Ang 1 thermo power plant. The construction project was supposed to be carried out by Japanese investor of Vapco Co with total investment capital of $1.7 billion.
The new thermo power plant has designed capacity of 1,200MW. At present, the local functional authorities concentrated on ground clearance and compensation works, as well as resettlement support for local people. The construction was supposed to be kicked off before March 2011.
Despite the weather conditions, the contractors of Vung Ang 1 thermo power plant have already finished installing the steel structure for the second boiler of this project, up to now.THGOI
Oliver Massmann
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Guest Post: 5 Dimwitted Leadership Strategies
Guest Post: 5 Dimwitted Leadership Strategies
By Geoffrey James | January 18, 2011
I rarely post material from other writers, but in this case I’m going to make an exception. Success coach Dawna Maclean published the following riff on Sales Machine posts which she’s kindly allowed me to repost. I think it’s definitely worth reading:
Today’s post was inspired by The 8 Stupidest Management Fads of All Time and The 5 Dumbest Management Concepts of All Time by Geoffrey James. I would respectfully disagree with some on his lists but I did enjoy his provocative perspectives.
Geoffrey’s articles got me thinking about the most dim-witted leadership strategies that continue to linger in today’s business community. The good news is that there is growing momentum in our appreciation for transparency and we are finally starting to embrace the power of mass collaboration.
Let’s agree to abolish these 5 useless and more often dooming leadership strategies:
* #1 Command and Control. Command and control leaders might as well put a blindfold on along with some earplugs. Typically these leaders rationalize their methods emphasizing the negative outcomes of consensus based strategies. Consensus based strategies, while polar in nature, are as dysfunctional. Both strategies are negligent and like most things in life the sweet spot is somewhere in the middle. Decision makers are crucial, as are collective buy-in and the voice of the team broadly. We need more leaders that have the confidence to act and the humility to listen.
* #2 Bottom Line Be All End All. Leaders that put the bottom line above all else will eventually find themselves at the bottom without the line. And assuming they defy the odds and sustain this risky strategy, they will not be maximizing their potential. They are simply gaining more than they are losing. I’m not suggesting the bottom line is not important, it is without question a key performance indicator, but it is no more significant than customer experience or employee experience and arguably less important. A healthy bottom line can be a goal, but it is not a strategy. Once again, it’s about balance, we need more leaders with the courage to focus beyond the all mighty dollar.
* #3 Tradition and Prescription. While tradition might provide comfort, familiarity, and even bind groups of people, it can also inhibit and even sabotage meaningful change. I’m not suggesting all traditions be tossed, but they do need to be examined mindfully and they should never be maintained blindly. Similarly prescriptive leadership may provide consistency and reduce complexity but the reality is we do not live in a one size fits all world. It stifles creativity and fosters inflexibility. The effort required to develop a universal solution is enormous and commonly fraught with compromise on behalf of the customer. That said, highly regulated industries often require a more prescriptive approach, such as Health Care. The key is to examine all practices through the lens of your customer; it is possible to both meet regulatory demands and remain creative. Bottom line, we need more creative leaders that embrace and celebrate change.
* #4 The Black Hole. Every company has a black hole, that is where all the wasted money, energy and talents fall when the are misused, misunderstood or worse unnoticed. I would bet that we could feed an entire continent, if not the world, if we could monetize this waste collectively. Every company needs a ‘waste master’, chances are they would be your most profitable investment. Leaders are often aware of some waste and blind to even more, we need leaders that have the courage and foresight to eliminate waste and in so doing maximize their potentiality.
* #5 The Lone Ranger. This is the “I need to do it myself if it is going to get done right” leader. News flash, you are NOT a leader if you are doing everything and deciding everything. Being a leader is about making others successful and motivating them to act like an owner. A lone ranger may feel like a rock star but nothing could be farther from the truth. This leadership approach will chase away the talent on your team, it clearly does not scale, it is not sustainable, and it puts your business at massive risk. We need leaders that cultivate positive results from others; a smart leader surrounds themselves with those smarter then they are.
READERS: What do you think? As you probably know, I’m not big on using the term “leader”, but her identification of these pathological strategies is, I think, quite brilliant.
http://www.bnet.com/blog/salesmachine/guest-post-5-dimwitted-leadership-strategies/14017?promo=713&tag=nl.e713
By Geoffrey James | January 18, 2011
I rarely post material from other writers, but in this case I’m going to make an exception. Success coach Dawna Maclean published the following riff on Sales Machine posts which she’s kindly allowed me to repost. I think it’s definitely worth reading:
Today’s post was inspired by The 8 Stupidest Management Fads of All Time and The 5 Dumbest Management Concepts of All Time by Geoffrey James. I would respectfully disagree with some on his lists but I did enjoy his provocative perspectives.
Geoffrey’s articles got me thinking about the most dim-witted leadership strategies that continue to linger in today’s business community. The good news is that there is growing momentum in our appreciation for transparency and we are finally starting to embrace the power of mass collaboration.
Let’s agree to abolish these 5 useless and more often dooming leadership strategies:
* #1 Command and Control. Command and control leaders might as well put a blindfold on along with some earplugs. Typically these leaders rationalize their methods emphasizing the negative outcomes of consensus based strategies. Consensus based strategies, while polar in nature, are as dysfunctional. Both strategies are negligent and like most things in life the sweet spot is somewhere in the middle. Decision makers are crucial, as are collective buy-in and the voice of the team broadly. We need more leaders that have the confidence to act and the humility to listen.
* #2 Bottom Line Be All End All. Leaders that put the bottom line above all else will eventually find themselves at the bottom without the line. And assuming they defy the odds and sustain this risky strategy, they will not be maximizing their potential. They are simply gaining more than they are losing. I’m not suggesting the bottom line is not important, it is without question a key performance indicator, but it is no more significant than customer experience or employee experience and arguably less important. A healthy bottom line can be a goal, but it is not a strategy. Once again, it’s about balance, we need more leaders with the courage to focus beyond the all mighty dollar.
* #3 Tradition and Prescription. While tradition might provide comfort, familiarity, and even bind groups of people, it can also inhibit and even sabotage meaningful change. I’m not suggesting all traditions be tossed, but they do need to be examined mindfully and they should never be maintained blindly. Similarly prescriptive leadership may provide consistency and reduce complexity but the reality is we do not live in a one size fits all world. It stifles creativity and fosters inflexibility. The effort required to develop a universal solution is enormous and commonly fraught with compromise on behalf of the customer. That said, highly regulated industries often require a more prescriptive approach, such as Health Care. The key is to examine all practices through the lens of your customer; it is possible to both meet regulatory demands and remain creative. Bottom line, we need more creative leaders that embrace and celebrate change.
* #4 The Black Hole. Every company has a black hole, that is where all the wasted money, energy and talents fall when the are misused, misunderstood or worse unnoticed. I would bet that we could feed an entire continent, if not the world, if we could monetize this waste collectively. Every company needs a ‘waste master’, chances are they would be your most profitable investment. Leaders are often aware of some waste and blind to even more, we need leaders that have the courage and foresight to eliminate waste and in so doing maximize their potentiality.
* #5 The Lone Ranger. This is the “I need to do it myself if it is going to get done right” leader. News flash, you are NOT a leader if you are doing everything and deciding everything. Being a leader is about making others successful and motivating them to act like an owner. A lone ranger may feel like a rock star but nothing could be farther from the truth. This leadership approach will chase away the talent on your team, it clearly does not scale, it is not sustainable, and it puts your business at massive risk. We need leaders that cultivate positive results from others; a smart leader surrounds themselves with those smarter then they are.
READERS: What do you think? As you probably know, I’m not big on using the term “leader”, but her identification of these pathological strategies is, I think, quite brilliant.
http://www.bnet.com/blog/salesmachine/guest-post-5-dimwitted-leadership-strategies/14017?promo=713&tag=nl.e713
Saturday 15 January 2011
Future-proof your career in 2011
Future-proof your career in 2011
January 2011
In order to set our CPD priorities and future-proof our careers, we need to be alert to how organisations’ expectations of their management accountants are changing. This article provides an overview of key trends and developments and is linked to a joint CIMA/Kaplan free webcast. By Peter Simons, technical specialist, CIMA.
As 2011 begins, it is time to reflect on how we’ve performed over 2010 and make resolutions for the future. It is therefore a good time to consider our CIMA professional development (CPD).
Members will be aware that compliance with the CIMA professional development requirement is a condition of membership. Fortunately, tthis is not an onerous obligation. CPD is not about spending a prescribed number of hours reading or on courses: we are simply obliged to document what most of us would have done anyway.
CPD is about ensuring we take a practical approach to future proofing or enhancing our career prospects. This can include learning through either actions or study. New skills, experience or expertise can be acquired while working – for example through participating in projects – or through reading, listening to webcasts, researching, training courses or more formal study.
We are required to keep CPD records for a minimum of three years on a rolling basis. The CIMA CPD planner is a good way of doing this but elaborate CPD records are not necessary. The requirement is to be able to show how we have undertaken the steps in the CIMA professional development cycle.
We tend to think of the technical accounting aspects of our roles as being the priorities for our CPD. These are important. However, if you look at job advertisements for senior roles, you will find that there is a real demand for management accountants who have, in addition to their core finance and accounting skill set, a combination of commercial awareness and inter-personal skills.
CIMA’s research into the future of the finance function would suggest that we should all consider how the following three areas might impact upon our career plans.
Relentless pressure to reduce the cost of finance
Accounting operations are becoming ever more efficient. Many large organisations already centralise accounting operations in shared service centres (whether in house, offshore or outsourced) so that systems can be standardised and processes streamlined or even automated.
Expertise in process management, systems and team leadership is required. Additionally, using lean (eliminating waste or unproductive effort), six sigma (reducing error rates and re-working) and kaizen (engaging people in continuous innovation) principles is increasingly important.
Shared service centres are extending their role to provide more end to end processes. The purchase to pay process, for example, can be extended to include procurement and supply chain management.
Also, having reduced the cost of transaction processing and basic financial reports, the same principles are now being applied to providing more detailed and higher value management information, analysis and decision support.
Management personnel expect better information
In today’s volatile conditions, more responsive re-forecasting and predictive modelling are often required. Developments in applications are enabling this. The format and range of management information is also changing, with online, self service access, and the ability to interrogate, increasingly expected.
The traditional financial information pack may no longer suffice. Financial metrics are about outcomes. Decision makers need better information about the drivers of cost, risk and value, including leading indicators about an organisation’s competitive position, performance, risks and opportunities.
More influential finance business partners
In larger organisations, there is a real need to cascade strategy implementation and performance/risk management throughout the business to ensure it is run in the long term interests of shareholders and other stakeholders. As management accountants we can be expected to apply professional objectivity and our code of ethics.
Good governance at board level is essential but not enough. Management accountants can provide the governance framework, and therefore the essential link between the board and the business, filtering information and cascading influence.
Cost leadership is needed. As economic conditions are volatile, companies are keen to make their cost base lower and more variable. Trimming the cost of finance can give accountants the credibility to tackle costs across the business.
Pro-active performance and risk management based on a combination of (a) business understanding, (b) financial expertise and (c) influencing skills can help to cut costs selectively and to identify opportunities to innovate and create value.
Conclusion
Management accountants have important roles to play in helping organisations to improve both operating efficiency and strategic effectiveness. Our organisations need to balance maximising current performance and continually developing competitive positions to ensure sustainability.
The same principles apply to our own personal professional development. The first step in the CPD cycle is to define our present role and career objectives, recognising the expectations of employers, clients, regulators and the public.
Most organisations need management accountants with different skills and qualities to perform a range of roles. Finance is usually a team game. What role do you want to play now and in the future?
I hope your CIMA qualification and CPD help you achieve a prosperous 2011 and beyond.
http://www.cimaglobal.com/Thought-leadership/Newsletters/Insight-e-magazine/Insight-2011/Insight-January-2011/Future-proof-your-career-in-2011/
January 2011
In order to set our CPD priorities and future-proof our careers, we need to be alert to how organisations’ expectations of their management accountants are changing. This article provides an overview of key trends and developments and is linked to a joint CIMA/Kaplan free webcast. By Peter Simons, technical specialist, CIMA.
As 2011 begins, it is time to reflect on how we’ve performed over 2010 and make resolutions for the future. It is therefore a good time to consider our CIMA professional development (CPD).
Members will be aware that compliance with the CIMA professional development requirement is a condition of membership. Fortunately, tthis is not an onerous obligation. CPD is not about spending a prescribed number of hours reading or on courses: we are simply obliged to document what most of us would have done anyway.
CPD is about ensuring we take a practical approach to future proofing or enhancing our career prospects. This can include learning through either actions or study. New skills, experience or expertise can be acquired while working – for example through participating in projects – or through reading, listening to webcasts, researching, training courses or more formal study.
We are required to keep CPD records for a minimum of three years on a rolling basis. The CIMA CPD planner is a good way of doing this but elaborate CPD records are not necessary. The requirement is to be able to show how we have undertaken the steps in the CIMA professional development cycle.
We tend to think of the technical accounting aspects of our roles as being the priorities for our CPD. These are important. However, if you look at job advertisements for senior roles, you will find that there is a real demand for management accountants who have, in addition to their core finance and accounting skill set, a combination of commercial awareness and inter-personal skills.
CIMA’s research into the future of the finance function would suggest that we should all consider how the following three areas might impact upon our career plans.
Relentless pressure to reduce the cost of finance
Accounting operations are becoming ever more efficient. Many large organisations already centralise accounting operations in shared service centres (whether in house, offshore or outsourced) so that systems can be standardised and processes streamlined or even automated.
Expertise in process management, systems and team leadership is required. Additionally, using lean (eliminating waste or unproductive effort), six sigma (reducing error rates and re-working) and kaizen (engaging people in continuous innovation) principles is increasingly important.
Shared service centres are extending their role to provide more end to end processes. The purchase to pay process, for example, can be extended to include procurement and supply chain management.
Also, having reduced the cost of transaction processing and basic financial reports, the same principles are now being applied to providing more detailed and higher value management information, analysis and decision support.
Management personnel expect better information
In today’s volatile conditions, more responsive re-forecasting and predictive modelling are often required. Developments in applications are enabling this. The format and range of management information is also changing, with online, self service access, and the ability to interrogate, increasingly expected.
The traditional financial information pack may no longer suffice. Financial metrics are about outcomes. Decision makers need better information about the drivers of cost, risk and value, including leading indicators about an organisation’s competitive position, performance, risks and opportunities.
More influential finance business partners
In larger organisations, there is a real need to cascade strategy implementation and performance/risk management throughout the business to ensure it is run in the long term interests of shareholders and other stakeholders. As management accountants we can be expected to apply professional objectivity and our code of ethics.
Good governance at board level is essential but not enough. Management accountants can provide the governance framework, and therefore the essential link between the board and the business, filtering information and cascading influence.
Cost leadership is needed. As economic conditions are volatile, companies are keen to make their cost base lower and more variable. Trimming the cost of finance can give accountants the credibility to tackle costs across the business.
Pro-active performance and risk management based on a combination of (a) business understanding, (b) financial expertise and (c) influencing skills can help to cut costs selectively and to identify opportunities to innovate and create value.
Conclusion
Management accountants have important roles to play in helping organisations to improve both operating efficiency and strategic effectiveness. Our organisations need to balance maximising current performance and continually developing competitive positions to ensure sustainability.
The same principles apply to our own personal professional development. The first step in the CPD cycle is to define our present role and career objectives, recognising the expectations of employers, clients, regulators and the public.
Most organisations need management accountants with different skills and qualities to perform a range of roles. Finance is usually a team game. What role do you want to play now and in the future?
I hope your CIMA qualification and CPD help you achieve a prosperous 2011 and beyond.
http://www.cimaglobal.com/Thought-leadership/Newsletters/Insight-e-magazine/Insight-2011/Insight-January-2011/Future-proof-your-career-in-2011/
PowerPoint skills: presentations with pizzazz
PowerPoint skills: presentations with pizzazz
January 2011
Duncan Peberdy, author of ‘How to make Microsoft PowerPoint work for you’, kicks off a new series by looking at ways of improving your presentations.
Over the coming months, I am going to provide tips, tricks and advice to enhance the presentations that you make using Microsoft PowerPoint. While the focus will be firmly on using PowerPoint with financial data, I will also be covering more general aspects of using PowerPoint to help ensure success for your presentations.
Who doesn’t use PowerPoint?
Some organisations have banned it. And for some types of information, especially where large amounts of evidential data need to be carefully considered, PowerPoint is not the best tool. In most of these instances, what has wrongly been identified as dissatisfaction with PowerPoint, is in fact frustration with the way PowerPoint is misused.
This happens because PowerPoint has evolved from software that produced slides to accompany presentations, into becoming the presentation itself. And by being available on almost every Windows PC, we’ve been lulled into a false sense of reality about the design ability and presentation skills of PC users. A poor calibre of people think that they can hide behind PowerPoint simply by using it as an autocue. Complacent managers continue to let them get away with it. This results in the lacklustre reading out of slides verbatim, which are then distributed at the end as handouts. Such practice is not worthy of being called a presentation, and only results in a well documented syndrome known as 'death by PowerPoint’.
The great news is that, when used correctly, PowerPoint is an incredibly persuasive tool that adds weight to our words, and increases the engagement presenters have with their audiences. These things help the objective of the presentation to be fully achieved.
So before we start to look at using PowerPoint with financial data, this month we will concentrate on some usage aspects that will enhances all presentations.
Preventing ‘death by PowerPoint’
Effective communication is a crucial skill that clearly distinguishes people from each other. What better way is there to communicate your message than by delivering a compelling and informative presentation? But right across the business spectrum – training, sales, HR, marketing, and finance – there are so many would-be presenters who get everything wrong and end up ‘killing’ their audiences. The audience might not physically die, but they certainly start questioning their will to live much longer!
Microsoft’s PowerPoint has now become completely synonymous with the production and delivery of presentations. Apple’s Keynote might be trying to muscle in on PowerPoint, but complete compatibility with PowerPoint is high on Keynote’s feature list. That’s not surprising given that a bewildering 30 million PowerPoint presentations are launched daily around the globe. PowerPoint is used by companies to pitch to clients, internally for training and in meetings, and at universities and colleges for student learning.
Presenting material with an audience in front of you is so much more compelling than just producing reports or forwarding documents. To start with you can never be sure if your reports have even been opened, let alone read properly. But as with anything that you want to be successful with, it’s about far more than just the words on the paper. It’s about the value and emotion that your passion and expertise can add to those words, and a presentation is the best vehicle for success.
'Death by PowerPoint’ occurs when the value and passion that a presenter must add to the material displayed on the slides is absent. Academic research has shown that when the words on the slides are read out verbatim, the effect of hearing and seeing them is actually less than just reading them for yourself. Why? Because instead of being engaged by the presentation, you will have read the words before they’ve finished being read aloud, at which point you switch off and think about other important issues, check your phone, etc.
Your presentation should be aimed at interchanging information in one of three ways – to learn, share, or create information. Whether you simply need to convey information without any feedback or you are encouraging everyone to be involved, combining powerful visuals with your spoken words improves the likelihood of achieving your objective.
That’s because combining images with words requires the audience to subconsciously use both sides of their brain to process the information. Now they are more engaged with the process, and you as a presenter are giving them a better than average experience. Without all the words on the slides, the presenter cannot now hide behind PowerPoint as an autocue, which means that the presenter has to understand their subject and convey their expertise and passion for it to the audience.
Setting expectations
As part of the introduction to your presentation, clearly state your objective/s. If the audience is relatively small, then engage them immediately by asking if anyone has any other expectations not covered by your objectives. Asking this at the start ensures that all relevant content is covered, and means that when you conclude, all the objectives can be ‘ticked off’ as achieved.
Tell your audience exactly how you want to deal with any questions that arise. Do you want questions saved until the end, or to be interrupted and ensure that the question is considered in the right context?
Tell your audience about making or providing notes. How frustrating is it to take lots of notes diligently, only for them to be given out at the end? On the other hand, if you give out notes at the beginning, doubtless there will be some people jumping ahead. We will cover this again in more detail in a future article, but just providing copies of the PowerPoint slides as notes is not good enough.
Returning to why PowerPoint is so often misused, a big part of the problem is that lazy and unqualified presenters use the slide content as the spoken narrative, as their visual, and as their handout. As well as being downright lazy, it’s also highly ineffective and wastes the opportunity to maximise the presence of an audience with your communication.
Tips and tricks
When presenting with PowerPoint there are a number of keyboard short cuts that can heighten your professional presence, as well as making life easier for you. Try these when you are next preparing to present using PowerPoint.
In PowerPoint, before you start the slide show:
Key Action
F5 Starts the slide show from slide 1
Shift + F5 Starts the slide show from the current slide. This is useful if you’ve had to break the slide show. Now you don’t have to start at slide one and laboriously advance through each slide to the required slide.
Once you have started the slide show:
Key Action
‘W’ or ‘B’ key If you have got your first slide ready on the screen but you don’t want the audience to see it yet, just press either the ‘W’ or ‘B’ key to make the whole screen white or black. Pressing the same key again will reveal the slide, as will pressing the ‘next slide’ button on a wireless presenter remote control. In fact, you can press ‘W’ or ‘B’ at any stage during a presentation to remove the slide from view without ending the slide show.
Slide number followed by Enter key If you need to jump to a particular slide, you can type the number and press enter to navigate directly to it.
Control + ‘S’ key If you need to move to a particular slide but can’t remember its number, press ‘control + S’ to bring up on screen a list of all the slides in your presentation. Double click the slide you want to navigate to. Or press the number and enter.
http://www.cimaglobal.com/Thought-leadership/Newsletters/Insight-e-magazine/Insight-2011/Insight-January-2011/PowerPoint-skills-presentations-with-pizzazz/
January 2011
Duncan Peberdy, author of ‘How to make Microsoft PowerPoint work for you’, kicks off a new series by looking at ways of improving your presentations.
Over the coming months, I am going to provide tips, tricks and advice to enhance the presentations that you make using Microsoft PowerPoint. While the focus will be firmly on using PowerPoint with financial data, I will also be covering more general aspects of using PowerPoint to help ensure success for your presentations.
Who doesn’t use PowerPoint?
Some organisations have banned it. And for some types of information, especially where large amounts of evidential data need to be carefully considered, PowerPoint is not the best tool. In most of these instances, what has wrongly been identified as dissatisfaction with PowerPoint, is in fact frustration with the way PowerPoint is misused.
This happens because PowerPoint has evolved from software that produced slides to accompany presentations, into becoming the presentation itself. And by being available on almost every Windows PC, we’ve been lulled into a false sense of reality about the design ability and presentation skills of PC users. A poor calibre of people think that they can hide behind PowerPoint simply by using it as an autocue. Complacent managers continue to let them get away with it. This results in the lacklustre reading out of slides verbatim, which are then distributed at the end as handouts. Such practice is not worthy of being called a presentation, and only results in a well documented syndrome known as 'death by PowerPoint’.
The great news is that, when used correctly, PowerPoint is an incredibly persuasive tool that adds weight to our words, and increases the engagement presenters have with their audiences. These things help the objective of the presentation to be fully achieved.
So before we start to look at using PowerPoint with financial data, this month we will concentrate on some usage aspects that will enhances all presentations.
Preventing ‘death by PowerPoint’
Effective communication is a crucial skill that clearly distinguishes people from each other. What better way is there to communicate your message than by delivering a compelling and informative presentation? But right across the business spectrum – training, sales, HR, marketing, and finance – there are so many would-be presenters who get everything wrong and end up ‘killing’ their audiences. The audience might not physically die, but they certainly start questioning their will to live much longer!
Microsoft’s PowerPoint has now become completely synonymous with the production and delivery of presentations. Apple’s Keynote might be trying to muscle in on PowerPoint, but complete compatibility with PowerPoint is high on Keynote’s feature list. That’s not surprising given that a bewildering 30 million PowerPoint presentations are launched daily around the globe. PowerPoint is used by companies to pitch to clients, internally for training and in meetings, and at universities and colleges for student learning.
Presenting material with an audience in front of you is so much more compelling than just producing reports or forwarding documents. To start with you can never be sure if your reports have even been opened, let alone read properly. But as with anything that you want to be successful with, it’s about far more than just the words on the paper. It’s about the value and emotion that your passion and expertise can add to those words, and a presentation is the best vehicle for success.
'Death by PowerPoint’ occurs when the value and passion that a presenter must add to the material displayed on the slides is absent. Academic research has shown that when the words on the slides are read out verbatim, the effect of hearing and seeing them is actually less than just reading them for yourself. Why? Because instead of being engaged by the presentation, you will have read the words before they’ve finished being read aloud, at which point you switch off and think about other important issues, check your phone, etc.
Your presentation should be aimed at interchanging information in one of three ways – to learn, share, or create information. Whether you simply need to convey information without any feedback or you are encouraging everyone to be involved, combining powerful visuals with your spoken words improves the likelihood of achieving your objective.
That’s because combining images with words requires the audience to subconsciously use both sides of their brain to process the information. Now they are more engaged with the process, and you as a presenter are giving them a better than average experience. Without all the words on the slides, the presenter cannot now hide behind PowerPoint as an autocue, which means that the presenter has to understand their subject and convey their expertise and passion for it to the audience.
Setting expectations
As part of the introduction to your presentation, clearly state your objective/s. If the audience is relatively small, then engage them immediately by asking if anyone has any other expectations not covered by your objectives. Asking this at the start ensures that all relevant content is covered, and means that when you conclude, all the objectives can be ‘ticked off’ as achieved.
Tell your audience exactly how you want to deal with any questions that arise. Do you want questions saved until the end, or to be interrupted and ensure that the question is considered in the right context?
Tell your audience about making or providing notes. How frustrating is it to take lots of notes diligently, only for them to be given out at the end? On the other hand, if you give out notes at the beginning, doubtless there will be some people jumping ahead. We will cover this again in more detail in a future article, but just providing copies of the PowerPoint slides as notes is not good enough.
Returning to why PowerPoint is so often misused, a big part of the problem is that lazy and unqualified presenters use the slide content as the spoken narrative, as their visual, and as their handout. As well as being downright lazy, it’s also highly ineffective and wastes the opportunity to maximise the presence of an audience with your communication.
Tips and tricks
When presenting with PowerPoint there are a number of keyboard short cuts that can heighten your professional presence, as well as making life easier for you. Try these when you are next preparing to present using PowerPoint.
In PowerPoint, before you start the slide show:
Key Action
F5 Starts the slide show from slide 1
Shift + F5 Starts the slide show from the current slide. This is useful if you’ve had to break the slide show. Now you don’t have to start at slide one and laboriously advance through each slide to the required slide.
Once you have started the slide show:
Key Action
‘W’ or ‘B’ key If you have got your first slide ready on the screen but you don’t want the audience to see it yet, just press either the ‘W’ or ‘B’ key to make the whole screen white or black. Pressing the same key again will reveal the slide, as will pressing the ‘next slide’ button on a wireless presenter remote control. In fact, you can press ‘W’ or ‘B’ at any stage during a presentation to remove the slide from view without ending the slide show.
Slide number followed by Enter key If you need to jump to a particular slide, you can type the number and press enter to navigate directly to it.
Control + ‘S’ key If you need to move to a particular slide but can’t remember its number, press ‘control + S’ to bring up on screen a list of all the slides in your presentation. Double click the slide you want to navigate to. Or press the number and enter.
http://www.cimaglobal.com/Thought-leadership/Newsletters/Insight-e-magazine/Insight-2011/Insight-January-2011/PowerPoint-skills-presentations-with-pizzazz/
Vietnam - News and Regulations
WORLDBANK ON VIETNAM - WB optimistic about Vietnam economic growth
World Bank (WB) has released the 2011 global economic prospect report showing that Vietnam's economic growth rate may reach 6.5 percent in 2011 and 7 percent in 2012.
The report also mentioned Vietnam showed quick economic recovery rates after the crisis thanks to large and effective economic stimulation packages. In 2010, Vietnam's economic growth rate was posted at over 6.7 percent. However, the current payment balance deficit remained at high level, and the dong, after being devaluated twice still suffers much pressure.
WB suggested that Vietnam should focus on developing commodities, except for oil and gas products for exporting purposes in order to maintain the economic growth rate at 6.5-7 percent.VNS
FOREIGN DIRECT INVESTMENT - Vietnam enticing more foreign investors
Ocean Villas Group, specialists in lifestyle and investment property worldwide, has said that Vietnam is enticing more and more international investors lately, reports Vietnam News Agency (VNA) Thursday.
In an article posted on its website, the Ocean Villas Group cited a recent survey by the Association of Foreign Investors in Real Estate (AFIRE) which ranked Vietnam fourth in the world in the emerging global real estate markets category.
The AFIRE survey was a poll of a group of investors who hold more than $627 billion of global real estate in assets collectively.
The results showed that Brazil, China and India dominate the emerging real estate markets for investment, but Vietnam, unranked in 2010, jumped straight into the world top five, taking fourth position.
Among the emerging markets, Brazil took first place from China in second, which ranked top in 2010.
India came in third, Vietnam fourth and Mexico ranked fifth, losing last year's position to Vietnam.
Russia, which has been amongst the top five emerging real estate markets for the last two years, dropped to tenth place.
Website "oceanvillasgroup.com" quoted Peter Ryder, general director of Indochina Capital, which currently has several real estate projects under construction in Vietnam, saying that the recent rise in investment in Vietnam was "due to the rapid growth of Vietnam's real estate market and the open regulations, which allow the participation of foreign investors."
The website wrote that currently Indochina Capital was developing the Indochina Hanoi Plaza, a retail complex worth $160 million in Hanoi, and the Da Nang Hyatt Regency, worth an estimated $130 million, in Da Nang.
Both projects will be completed by the second half of this year.
The group also planned to launch a new development project in HCM City to provide over 1,000 apartments for Vietnam's middle-income earners.
Website "oceanvillasgroup.com" confirmed: "Vietnam continues to appear attractive to foreign investors and its economy has recovered well from the global recession.
Other factors enticing overseas investors to Vietnam are its strong economic growth, fast rate of urbanisation and the growth of its new middle class."VNS
WTO Reference Centre opens
HA NOI — A WTO Reference Centre (WRC) was officially inaugurated in Ha Noi this week with the aim of providing members with information relating to the organisation through its websites and publications.
In a speech delivered at the opening ceremony, Deputy Minister of Industry and Trade Le Danh Vinh said the centre was the first and the only one so far in Viet Nam.
Government agencies, offices, localities and businesses would be provided with reliable and up-to-date information on commercial policies and issues relating to the WTO, Vinh said, adding that the centre would act as a bridge to receive technical support in education and training from the WTO.
Head of WRC Mustapha Sadni Jallab said the country would benefit from issues relating to commerce and the WTO through the centre.
With the establishment, the WRC has become the WTO's 154th centre.
The centre currently has 151 documents available for reference, divided into 32 different issues including dictionaries, commercial negotiation rounds, disputes and commercial agreements.
The WRC programme was launched in 1997 and operates in over 100 countries.
The WTO supported Viet Nam's construction and operation of the WRC based on discussions between Prime Minister Nguyen Tan Dung and WTO's General Secretary Pascal Lamy last January.
The first training class was held following the launch. — VNS
POWER - Vietnam aims high for energy saving in next five years
The Ministry of Industry and Trade has just set a target to save on power consumption by 8 percent to 10 percent in the next five years by mainly raising public awareness and encouraging companies to upgrade technologies, an official said.
"The ministry is petitioning the government to approve this high target," said Nguyen Dinh Hiep, director of the Science and Technology Department of the ministry.
Hiep said the high target was built on the success of power savings in the past five year as phase one of the national power saving programme, during which the country saved some 4 billion kWh of power, equivalent to 5 percent of the country's annual electricity consumption. The target for the second phase from 2011 to 2015 of the national strategic programme is one of the vital measures for ensuring energy security for the country, he said.
Beside some achievements resulting from the 2006-2010 programme, Hiep said, the awareness about energy saving among people and industrial producers was still limited, as power consumption at steel and cement plants remained high.
Meanwhile, lending policy for enterprises embracing energy saving solutions is still inadequate.
As the country's demand for electricity is expected to increase 15-17 percent annually in the coming years, the ministry will carry out some key projects to save more power in this second phase with a total budget of $3 million a year.
These projects will focus on spurring public awareness of energy saving, and energy efficiency in the industrial production, construction, and transport sectors.SGTD
FINANCE - Party stresses growth quality, restructuring
General Secretary of the Vietnam Communist Party Nong Duc Manh said on Wednesday in Hanoi that while high growth would be pursued in the 2011-2020 period, the country will attend more to the quality of growth.
In his keynote address at the 11th National Party Congress that started in the Vietnamese capital Hanoi, Manh said the growth model should be changed and the economy restructured.
"Changing the growth model and restructuring the economy will start with a shift from quantitative growth to a combined quantitative-qualitative development," Manh said, referring to the Congress documents that he presented at the opening session.
The shift will also be seen from a development process that is based on strong investment, exploitation of natural resources and cheap labour to a new process that is based on sci-tech applications and high-quality manpower, he said.
This is the first time the concept of changing the growth model has been covered in the formal documents of a Party Congress.
In its documents, the Party also envisions a decent economic growth rate in the next ten years, targeting average gross domestic product (GDP) growth of 7 percent to 8 percent a year. Per capita GDP is estimated to reach $2,000 by 2015 and $3,000 by the end of the decade compared to $1,168 in 2010, according to the Party chief.
Owing to qualitative development, it is expected that high-tech products will account for some 45 percent of the nation's GDP by 2020, and manufactured goods should make up 40 percent of the total industrial production value by then.
The factor of higher productivity should account for at least 35 percent of the total GDP in 2020, he said, citing the Socio-economic Development Strategy for 2011-2020.
All those growth targets, according to Manh, are meant to turn Vietnam into a newly-industrialised economy by 2020.
The strategy is aimed at "continuing accelerating industrialisation and fast, sustainable development… so as to make our country a socialist-oriented industrialised country" by 2020, he said.
Manh also highlighted the need to improve human resources through training, with the specific targets of raising the proportion of trained workers to 55 percent by 2015 and over 70 percent by 2020.
The Congress documents also stressed the need for environmental protection, which is defined as "the responsibility of the entire political system, the whole society and all citizens."
Protecting the environment will go alongside the development of clean energy, clean production and clean consumption.
The Party Congress on Wednesday saw President Nguyen Minh Triet deliver the opening address, while Truong Tan Sang, Politburo member and standing secretary of the Party's Secretariat, reviewed the performance of the Party in the 10th term, and prime minister Nguyen Tan Dung presided over the opening session.
Party chief Manh will step down from the Party Central Committee after serving two terms, and the new general Secretary of the Party will be named and announced next Tuesday when the Congress wraps up.vns
BANKING - State-run banks must get SBV's okay before borrowing foreign loans
The State Bank of Vietnam (SBV)'s governor on January 12, 2011 issued a Dispatch No 340/NHNN-QLNH stipulating some contents relating to medium and long term foreign loans (more than one year) of state-owned commercial banks, according the central bank's website on January 13.
In details, under Instruction No 1568/CT-TTg dated August 19, 2010 on implementing Conclusion No 78-KL/TW dated July 26, 2010 issued by the Political Bureau, Vietnam's prime minister required that all foreign loans borrowed by state-run corporations and groups must fully comply with the regulations of Vietnam's laws and get the approval from state authorities.
On December 17, 2010, under Dispatch No 9158/VPCP-KTTH, the government office informed the instruction of the prime minister on state-run banks' borrowing of capital from foreign countries whereby state banks can access medium-and long-term foreign loans (more than one year) provided that they comply with Vietnam's regulations on ensuring the capital adequacy ratio (CAR) in banking operations and must get approval from the central bank before signing the borrowing contracts.
Under the guidance of the prime minister, the central bank is building a circular guiding for accessing medium and long term foreign loans of state-run banks.
During this time when the circular is not issued and does not come to effect, in case of occurring medium-and long-term foreign loans, state-run commercial banks send dossiers (enclosing the final contract draft and the report on CAR in banking operations) to receive the central bank's consideration. State-run commercial banks can sign contracts to access foreign loans only when getting the written approval from SBV.VIETBIZ
INSURANCE - Bao Viet group's combined pre-tax profit estimated at 1.332tr dong
On late January 13, Bao Viet Holdings (BVH) organised a press conference to announce its business and operation results in 2010 as well as targets for 2011 and development strategies in coming years.
Ending 2010, BVH's combined revenue was estimated at 12.884 trillion dong, up 21.3 percent from 2009. Of which, Bao Viet Life Insurance gained 5.902 trillion dong, Bao Viet Insurance attained 4.887 trillion dong and the holding company reached 1.246 trillion dong.
The group's combined pre-tax profit was estimated at 1.332 trillion dong, of which the holding company's figure was 939 billion dong, Bao Viet Life Insurance and Bao Viet Insurance gained 618 billion dong and 296 billion dong respectively.
Answering the question about the business results of Bao Viet Securities arm (BVS), Le Hai Phong, BVH's financial director said that ending 2010, BVS posted a loss of 92 billion dong.
Till the end of 2010, BVH's total assets equity gained 45 trillion dong and 10.7 trillion dong respectively. The group's network has developed in all provinces with over 130 branches, over 5,200 staff and 30,000 agents.
The group is offering shares to hike its chartered capital to 6.8 trillion dong.
Early 2010, BVH also issued shares for HSBC Insurance, increasing the holding of foreign shareholder from 10 percent to 18 percent.
Under the agreement, HSBC Insurance committed to hold 25 percent stake into BVH. However, the detailed roadmap has not revealed yet.
The group's audited fiscal report will be released on March 30, 2011.
In 2011, BVH targets to bring 14.795 trillion dong in combined revenue (up 14.83 percent against 2010's actualised figure) and 1.51 trillion dong of combined pre-tax profit (rising 13.36 percent year-on-year).
Of which, the holding company's profit would be 964 billion dong.
Currently, Bao Viet Group has offshoots including:
* Bao Viet Insurance Corp with 100 percent stake held by BVH.
* Life Insurance Corp with 100 percent stake held by BVH.
* Bao Viet Fund Management Co with 100 percent stake held by BVH.
* Bao Viet Bank with 52 percent stake held by BVH.
* Bao Viet Securities Co with 59.9 percent stake held by BVH.
* Bao Viet Investment Co with 55 percent stake held by BVH.vns
Retail - - Supermarkets and convenience stores race for market share
The local distribution market recently has witnessed two trends: foreign distributors are expanding to new provinces to cash in on new opportunities, while domestic distributors are cooperating with foreign investors to grow their businesses.
Foreign distributors go out of town
Foreign distributors have their eyes on provincial markets and small towns. Casino Group, the owner of Big C store chain in Vietnam, last week opened one more hypermarket in the northern province of Nam Dinh, bringing the Big C outlets nationwide to 14.
The $4 million Big C has a total area of 6,500 square meters, stocks some 40,000 food and non-food items. Last month, the French distributor opened two hypermarkets in Vinh Phuc and Nghe An provinces. After 12 years of operation in Vietnam, the group now has outlets in most big cities and provinces, such as HCM City, Hanoi, Danang, Hai Phong, Dong Nai and Thua Thien-Hue.
The interest in smaller markets is due to the dearth of retail space in big cities like HCM City and Hanoi. The South Korean supermarket group Lotte has also turned their eyes to provinces. The Korean retailer, Lotte Mart under the Lotte Group, last month inked a deal with Charm Engineering (Korea) to open a trade centre in the southern province of Binh Duong.
Jeon Yong Ho, marketing director of Charm Engineering Co., said the two companies signed a business cooperation contract (BCC) to develop a shopping centre at the Charm Plaza project under progress in Di An Town in Binh Duong. Lotte Mart will open business at the first five floors of Charm Plaza project which will officially go into operation in early 2013. The shopping centre will have a total area of 12,500 square meters.
This will be the third Lotte Mart shopping centre in Vietnam after the first two in HCM City. Jeon told the Daily that the shopping centre project in cooperation with Lotte Mart was not related to a project which Lotte Mart intends to develop in the province's Thu Dau Mot Town.
In November last year, leaders of Lotte Vietnam Shopping Co. went to the province to look for a location in Thu Dau Mot Town for the firm's project. At a meeting with the provincial authorities, Lotte said it highly appreciated the position of Binh Duong, and that the company would prioritise Binh Duong in its strategy of developing a network of 30 department stores in Vietnam. After the working session, Lotte said it would quickly select a site for building Lotte Mart Binh Duong in Thu Dau Mot.
The company expects to put the project into operation next year. Lotte Vietnam Shopping Co., a unit of Lotte Mart, currently operates two Lotte Marts in HCM City, with one in District 11 and the other in District 7. It plans to pour some $5 billion into 30 department stores countrywide, including in HCM City, Hanoi, Danang, Can Tho and Hai Phong.
In the meantime, German-invested wholesale chain operator Metro Cash & Carry has just opened its 13th wholesale store on National Road 51B, Vung Tau City, Ba Ria-Vung Tau Province. Metro Vung Tau is the fifth provincial centre Metro Cash & Carry has set up after Dong Nai, Binh Dinh, An Giang and Binh Duong. The company's first eight centers are all located in major cities like HCM City, Hanoi, Danang, Hai Phong and Can Tho. The expansion of the distributors gives a strong boost to the businesses of local producers.
According to the producers, the move helps them penetrate the market in provinces where they have been reluctant to access due to the small market size and high costs for transport, personnel and premises. However, the markets in provinces have proved attractive to distributors.
Distributors said that local consumers are now familiar with shopping at supermarkets. They have begun to pay attention to the quality, safety and hygiene of products and are ready to pay for such products at modern shopping facilities. Previously, local consumers were not familiar with shopping without bargaining and always thought that products at supermarkets were more expensive than those outside.
Domestic distributors join hands with foreign firms
With the strong increase of foreign distributors in the local market, domestic firms look to join hands with other international distributors to expand operations and competition. The local distribution Phu Thai Group has cooperated with the Japanese convenience store chain Family Mart to open the group's first stores in the country. The Family Mart retail system opened under franchise with Phu Thai Group. The two companies plan to open 300 outlets around the country over the next five years.
As the country's leading retail store chain operator, Saigon Co.op with 50 Co.opMart supermarkets nationwide and more than 10 Co.op Food stores in HCM City, also has plans to cooperate with foreign distributors.
Saigon Co.op will cooperate with Singapore retail giant NTUC FairPrice Cooperative (FairPrice) to set up a new hypermarket chain in Vietnam. The two partners signed a joint venture agreement in Singapore last month to set up a chain of hypermarkets in the country, with the first store expected to open in 2012, said Nguyen Ngoc Hoa, chair of Saigon Co.op.
The new chain of hypermarkets will leverage Saigon Co.op's network of supermarkets' existing loyalty programmes and large customer base. The cooperation is aimed at diversifying the retail business in Vietnam, Hoa said, adding it would not affect the current operation of Co.opMart.
Hoa said the agreement had been built on the cooperation between the two partners over the years in exchange and training. In Vietnam, Saigon Co.op will be able to better meet the growing needs of its customers by offering a wider range of food products, more competitive prices and greater accessibility. FairPrice and Saigon Co-op will also hold exchange programmes for their employees to facilitate knowledge transfers. FairPrice is the largest supermarket operator in Singapore. The group has some 100 supermarkets across the island, including over 50 outlets of Cheers convenience stores.
Meanwhile, G7 Service and Trading Joint Stock Company, a member of Trung Nguyen Group, last month signed a strategic cooperation agreement with Japanese convenience store operator Ministop Co. Ltd, a member of AEON Group, which has retail and financial services companies in China and Japan, to open hundreds of stores in Vietnam. G7Mart said G7 and Ministop would set up a 75:25 joint venture, which will have initial total capital of $10 million. The first store is expected to be up and running in May 2011, and the forthcoming joint venture is looking to open 100 stores within the first year of its operation and at least 500 in the following five years.
Vietnam is the fourth country Ministop has selected for expansion outside Japan. There are currently 2,032 Ministop convenience stores in Japan, 1,381 in South Korea, together with 320 and 12 stores in the Philippines and China respectively.
Despite the global economic slowdown and high domestic inflation, the distribution market in Vietnam has continued to grow and offered much room for expansion.
REAL ESTATE/PROPERTY- Office rent slumps: report
Office rents were all down in the final quarter of 2010 when supply surged with the opening of new buildings in HCM City, according to a quarterly report released Wednesday by property consulting firm CB Richard Ellis Vietnam.
Grade A rents dipped 4.46 percent from the previous quarter to $35.06 per sq.m per month. Following the opening of HCM City's tallest skyscraper Bitexco Financial Tower in October last year that provided a further 37,710 sqm net leasable area, office space stock increased by 19.4 percent quarter on quarter (q-o-q).
Grade B rents dropped by 2.37 percent q-o-q to $19.55 after the market received three new Grade B buildings with a total of 51,020 sq.m gross floor area.
Meanwhile, eight new Grade C buildings supplied 39,729 sq.m of gross floor area, reducing the rents to $16.25, down 3.92 percent q-o-q.
The overall vacancy increased to 17.8 percent, up 4.4 percentage points, a vivid reflection of the newly completed office space.
The total net absorption in the last quarter of last year, however, reached 34,545 sq.m net leasable area, pushing the figure for the whole year up by almost 50 percent against 2009.
Tenants at the time preferred Grade C buildings with a net absorption of approximately 22,000 sq.m, Rudolf Hever, CBRE Associate director, said.
CBRE expects Grade A rents to drop to comparable levels of other regional cities like Shanghai and Beijing ($31-33 per sq.m per month) when the availability of new office space will be further significantly expanded in 2011.
Absorption is also forecast to continue growing this year when many local companies, looking for professional working environment, take higher quality space.VIETBIZ
SPACE - Japan to aid Vietnam space projects: report
The Japanese government has decided to loan Vietnam roughly 40 billion yen (US$479 million) to support its space exploration programme, a Japanese newspaper reported, on Friday.
The official development assistance (ODA) loans will be spent on three projects – an Earth-based space centre, two observation satellites, and the training of engineers, The Yomiuri Shimbun said.
The final details will be announced later this month. Japanese contractors are expected to be awarded all three projects.
The space centre will be built in Hanoi's Hoa Lac High-Tech Park. It includes a testing facility for satellite assembly as well as a satellite operation and data-analysis centre.
One of the two Earth observation satellites will be manufactured in Japan.
The other will be made in Vietnam. Production is expected to commence around 2019. Japan will send components and engineers to Vietnam for a planned launch in 2020, according to The Yomiuri Shimbun.thanh nien
RETAIL II - Vietnam's imports for electronic products continue to rise in 2011
Although the fluctuation on the dong/US dollar exchange rate during the fourth quarter of 2010 inhibited Vietnam's import growth for electronic products and spare parts, the country's import value for these items posted a growth of 23 percent in 2010 and it is expected to continue to increase in 2011.
In 2010, the country's import spending on electronic products and components was over $5.141 billion, exceeding 23 percent against the figure of $4.869 billion in 2009.
In comparison with the estimated figure of Ministry of Industry and Trade set early 2010 at $4 billion, the country's import spending at over $5.1 billion contributed significantly to the increase of trade gap. Moreover, Vietnam's highest import value for these products was from China with a rise of 60 percent in 2010. This showed the pressure from Chinese electronic products dislodged other nations such as Singapore, which is considered the hub in the world of electronics, Korea and Japan also fell behind China.
By opening the retail market from 2009, along with the tax reduction roadmap under the Vietnam-Japan Economic Partnership Agreement (VJEPA), the Asean-China Trade Agreement, Vietnam's import spending for electronics and components in first six months this year may increase at least 5-10 percent, especially the products of laptop, desk computers and completely built unit (CBU) television.VNS
MINING - Mining Chemical Industry Corp to be established
Vietnam National Coal and Mineral Industry Group (Vinacomin) has lately decided to establish the Mining Chemical Industry Corp under the model of parent company-member company yesterday January 13, 2011.
The new corporation will operate in major business sectors of researching, producing, supplying the dynamite materials for the domestic markets as well as providing storage and transportation services.
The corporation planned to finish construction works on its current large projects in time such as the Ammonium nitrate manufacturing plant project in Vung Tau City with total investment capital of $240 million and other projects.VIETBIZ
POWER - PV Power attains over 15tr dong revenue in 2010
In 2010, PetroVietnam Power Corp (PV Power) attained 15.242 trillion dong in revenue, exceeding 51 percent of the year's plan.
Of which, its revenue from power business gained 14.4 trillion dong (surpassing 52 percent of the year's plan), up 76 percent year-on-year and its revenue from consulting services accounted for about 5.5 percent of the company's total revenue.
Its pre tax profit was estimated at 563 billion dong, after calculating the FX difference, the figure was 140 billion dong, exceeding 37 percent of the year's target.
During 2010, the company's total commercial electricity output reached 12.685 billion kWh (exceeding 25 percent of the year's plan). Particularly, Ca Mau 1&2 power plants produced 9.186 billion kWh (exceeding 21 percent) and Nhon Trach power plant turned out 3.499 billion kWh (surpassing 37 percent of the year's target).
Regarding investment sector, in 2010, PV Power finalised investment projects for Nhon Trach 2 power plant and Hua Na hydropower plant.
In 2011, PV Power would continue to carry out the Luang Prabang hydropower project (total investment in 2010 was 22 billion dong) and other small hydropower projects transferred by PVFC (total transfer value of 139.41 billion dong).VNEWS
Oliver Massmann
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World Bank (WB) has released the 2011 global economic prospect report showing that Vietnam's economic growth rate may reach 6.5 percent in 2011 and 7 percent in 2012.
The report also mentioned Vietnam showed quick economic recovery rates after the crisis thanks to large and effective economic stimulation packages. In 2010, Vietnam's economic growth rate was posted at over 6.7 percent. However, the current payment balance deficit remained at high level, and the dong, after being devaluated twice still suffers much pressure.
WB suggested that Vietnam should focus on developing commodities, except for oil and gas products for exporting purposes in order to maintain the economic growth rate at 6.5-7 percent.VNS
FOREIGN DIRECT INVESTMENT - Vietnam enticing more foreign investors
Ocean Villas Group, specialists in lifestyle and investment property worldwide, has said that Vietnam is enticing more and more international investors lately, reports Vietnam News Agency (VNA) Thursday.
In an article posted on its website, the Ocean Villas Group cited a recent survey by the Association of Foreign Investors in Real Estate (AFIRE) which ranked Vietnam fourth in the world in the emerging global real estate markets category.
The AFIRE survey was a poll of a group of investors who hold more than $627 billion of global real estate in assets collectively.
The results showed that Brazil, China and India dominate the emerging real estate markets for investment, but Vietnam, unranked in 2010, jumped straight into the world top five, taking fourth position.
Among the emerging markets, Brazil took first place from China in second, which ranked top in 2010.
India came in third, Vietnam fourth and Mexico ranked fifth, losing last year's position to Vietnam.
Russia, which has been amongst the top five emerging real estate markets for the last two years, dropped to tenth place.
Website "oceanvillasgroup.com" quoted Peter Ryder, general director of Indochina Capital, which currently has several real estate projects under construction in Vietnam, saying that the recent rise in investment in Vietnam was "due to the rapid growth of Vietnam's real estate market and the open regulations, which allow the participation of foreign investors."
The website wrote that currently Indochina Capital was developing the Indochina Hanoi Plaza, a retail complex worth $160 million in Hanoi, and the Da Nang Hyatt Regency, worth an estimated $130 million, in Da Nang.
Both projects will be completed by the second half of this year.
The group also planned to launch a new development project in HCM City to provide over 1,000 apartments for Vietnam's middle-income earners.
Website "oceanvillasgroup.com" confirmed: "Vietnam continues to appear attractive to foreign investors and its economy has recovered well from the global recession.
Other factors enticing overseas investors to Vietnam are its strong economic growth, fast rate of urbanisation and the growth of its new middle class."VNS
WTO Reference Centre opens
HA NOI — A WTO Reference Centre (WRC) was officially inaugurated in Ha Noi this week with the aim of providing members with information relating to the organisation through its websites and publications.
In a speech delivered at the opening ceremony, Deputy Minister of Industry and Trade Le Danh Vinh said the centre was the first and the only one so far in Viet Nam.
Government agencies, offices, localities and businesses would be provided with reliable and up-to-date information on commercial policies and issues relating to the WTO, Vinh said, adding that the centre would act as a bridge to receive technical support in education and training from the WTO.
Head of WRC Mustapha Sadni Jallab said the country would benefit from issues relating to commerce and the WTO through the centre.
With the establishment, the WRC has become the WTO's 154th centre.
The centre currently has 151 documents available for reference, divided into 32 different issues including dictionaries, commercial negotiation rounds, disputes and commercial agreements.
The WRC programme was launched in 1997 and operates in over 100 countries.
The WTO supported Viet Nam's construction and operation of the WRC based on discussions between Prime Minister Nguyen Tan Dung and WTO's General Secretary Pascal Lamy last January.
The first training class was held following the launch. — VNS
POWER - Vietnam aims high for energy saving in next five years
The Ministry of Industry and Trade has just set a target to save on power consumption by 8 percent to 10 percent in the next five years by mainly raising public awareness and encouraging companies to upgrade technologies, an official said.
"The ministry is petitioning the government to approve this high target," said Nguyen Dinh Hiep, director of the Science and Technology Department of the ministry.
Hiep said the high target was built on the success of power savings in the past five year as phase one of the national power saving programme, during which the country saved some 4 billion kWh of power, equivalent to 5 percent of the country's annual electricity consumption. The target for the second phase from 2011 to 2015 of the national strategic programme is one of the vital measures for ensuring energy security for the country, he said.
Beside some achievements resulting from the 2006-2010 programme, Hiep said, the awareness about energy saving among people and industrial producers was still limited, as power consumption at steel and cement plants remained high.
Meanwhile, lending policy for enterprises embracing energy saving solutions is still inadequate.
As the country's demand for electricity is expected to increase 15-17 percent annually in the coming years, the ministry will carry out some key projects to save more power in this second phase with a total budget of $3 million a year.
These projects will focus on spurring public awareness of energy saving, and energy efficiency in the industrial production, construction, and transport sectors.SGTD
FINANCE - Party stresses growth quality, restructuring
General Secretary of the Vietnam Communist Party Nong Duc Manh said on Wednesday in Hanoi that while high growth would be pursued in the 2011-2020 period, the country will attend more to the quality of growth.
In his keynote address at the 11th National Party Congress that started in the Vietnamese capital Hanoi, Manh said the growth model should be changed and the economy restructured.
"Changing the growth model and restructuring the economy will start with a shift from quantitative growth to a combined quantitative-qualitative development," Manh said, referring to the Congress documents that he presented at the opening session.
The shift will also be seen from a development process that is based on strong investment, exploitation of natural resources and cheap labour to a new process that is based on sci-tech applications and high-quality manpower, he said.
This is the first time the concept of changing the growth model has been covered in the formal documents of a Party Congress.
In its documents, the Party also envisions a decent economic growth rate in the next ten years, targeting average gross domestic product (GDP) growth of 7 percent to 8 percent a year. Per capita GDP is estimated to reach $2,000 by 2015 and $3,000 by the end of the decade compared to $1,168 in 2010, according to the Party chief.
Owing to qualitative development, it is expected that high-tech products will account for some 45 percent of the nation's GDP by 2020, and manufactured goods should make up 40 percent of the total industrial production value by then.
The factor of higher productivity should account for at least 35 percent of the total GDP in 2020, he said, citing the Socio-economic Development Strategy for 2011-2020.
All those growth targets, according to Manh, are meant to turn Vietnam into a newly-industrialised economy by 2020.
The strategy is aimed at "continuing accelerating industrialisation and fast, sustainable development… so as to make our country a socialist-oriented industrialised country" by 2020, he said.
Manh also highlighted the need to improve human resources through training, with the specific targets of raising the proportion of trained workers to 55 percent by 2015 and over 70 percent by 2020.
The Congress documents also stressed the need for environmental protection, which is defined as "the responsibility of the entire political system, the whole society and all citizens."
Protecting the environment will go alongside the development of clean energy, clean production and clean consumption.
The Party Congress on Wednesday saw President Nguyen Minh Triet deliver the opening address, while Truong Tan Sang, Politburo member and standing secretary of the Party's Secretariat, reviewed the performance of the Party in the 10th term, and prime minister Nguyen Tan Dung presided over the opening session.
Party chief Manh will step down from the Party Central Committee after serving two terms, and the new general Secretary of the Party will be named and announced next Tuesday when the Congress wraps up.vns
BANKING - State-run banks must get SBV's okay before borrowing foreign loans
The State Bank of Vietnam (SBV)'s governor on January 12, 2011 issued a Dispatch No 340/NHNN-QLNH stipulating some contents relating to medium and long term foreign loans (more than one year) of state-owned commercial banks, according the central bank's website on January 13.
In details, under Instruction No 1568/CT-TTg dated August 19, 2010 on implementing Conclusion No 78-KL/TW dated July 26, 2010 issued by the Political Bureau, Vietnam's prime minister required that all foreign loans borrowed by state-run corporations and groups must fully comply with the regulations of Vietnam's laws and get the approval from state authorities.
On December 17, 2010, under Dispatch No 9158/VPCP-KTTH, the government office informed the instruction of the prime minister on state-run banks' borrowing of capital from foreign countries whereby state banks can access medium-and long-term foreign loans (more than one year) provided that they comply with Vietnam's regulations on ensuring the capital adequacy ratio (CAR) in banking operations and must get approval from the central bank before signing the borrowing contracts.
Under the guidance of the prime minister, the central bank is building a circular guiding for accessing medium and long term foreign loans of state-run banks.
During this time when the circular is not issued and does not come to effect, in case of occurring medium-and long-term foreign loans, state-run commercial banks send dossiers (enclosing the final contract draft and the report on CAR in banking operations) to receive the central bank's consideration. State-run commercial banks can sign contracts to access foreign loans only when getting the written approval from SBV.VIETBIZ
INSURANCE - Bao Viet group's combined pre-tax profit estimated at 1.332tr dong
On late January 13, Bao Viet Holdings (BVH) organised a press conference to announce its business and operation results in 2010 as well as targets for 2011 and development strategies in coming years.
Ending 2010, BVH's combined revenue was estimated at 12.884 trillion dong, up 21.3 percent from 2009. Of which, Bao Viet Life Insurance gained 5.902 trillion dong, Bao Viet Insurance attained 4.887 trillion dong and the holding company reached 1.246 trillion dong.
The group's combined pre-tax profit was estimated at 1.332 trillion dong, of which the holding company's figure was 939 billion dong, Bao Viet Life Insurance and Bao Viet Insurance gained 618 billion dong and 296 billion dong respectively.
Answering the question about the business results of Bao Viet Securities arm (BVS), Le Hai Phong, BVH's financial director said that ending 2010, BVS posted a loss of 92 billion dong.
Till the end of 2010, BVH's total assets equity gained 45 trillion dong and 10.7 trillion dong respectively. The group's network has developed in all provinces with over 130 branches, over 5,200 staff and 30,000 agents.
The group is offering shares to hike its chartered capital to 6.8 trillion dong.
Early 2010, BVH also issued shares for HSBC Insurance, increasing the holding of foreign shareholder from 10 percent to 18 percent.
Under the agreement, HSBC Insurance committed to hold 25 percent stake into BVH. However, the detailed roadmap has not revealed yet.
The group's audited fiscal report will be released on March 30, 2011.
In 2011, BVH targets to bring 14.795 trillion dong in combined revenue (up 14.83 percent against 2010's actualised figure) and 1.51 trillion dong of combined pre-tax profit (rising 13.36 percent year-on-year).
Of which, the holding company's profit would be 964 billion dong.
Currently, Bao Viet Group has offshoots including:
* Bao Viet Insurance Corp with 100 percent stake held by BVH.
* Life Insurance Corp with 100 percent stake held by BVH.
* Bao Viet Fund Management Co with 100 percent stake held by BVH.
* Bao Viet Bank with 52 percent stake held by BVH.
* Bao Viet Securities Co with 59.9 percent stake held by BVH.
* Bao Viet Investment Co with 55 percent stake held by BVH.vns
Retail - - Supermarkets and convenience stores race for market share
The local distribution market recently has witnessed two trends: foreign distributors are expanding to new provinces to cash in on new opportunities, while domestic distributors are cooperating with foreign investors to grow their businesses.
Foreign distributors go out of town
Foreign distributors have their eyes on provincial markets and small towns. Casino Group, the owner of Big C store chain in Vietnam, last week opened one more hypermarket in the northern province of Nam Dinh, bringing the Big C outlets nationwide to 14.
The $4 million Big C has a total area of 6,500 square meters, stocks some 40,000 food and non-food items. Last month, the French distributor opened two hypermarkets in Vinh Phuc and Nghe An provinces. After 12 years of operation in Vietnam, the group now has outlets in most big cities and provinces, such as HCM City, Hanoi, Danang, Hai Phong, Dong Nai and Thua Thien-Hue.
The interest in smaller markets is due to the dearth of retail space in big cities like HCM City and Hanoi. The South Korean supermarket group Lotte has also turned their eyes to provinces. The Korean retailer, Lotte Mart under the Lotte Group, last month inked a deal with Charm Engineering (Korea) to open a trade centre in the southern province of Binh Duong.
Jeon Yong Ho, marketing director of Charm Engineering Co., said the two companies signed a business cooperation contract (BCC) to develop a shopping centre at the Charm Plaza project under progress in Di An Town in Binh Duong. Lotte Mart will open business at the first five floors of Charm Plaza project which will officially go into operation in early 2013. The shopping centre will have a total area of 12,500 square meters.
This will be the third Lotte Mart shopping centre in Vietnam after the first two in HCM City. Jeon told the Daily that the shopping centre project in cooperation with Lotte Mart was not related to a project which Lotte Mart intends to develop in the province's Thu Dau Mot Town.
In November last year, leaders of Lotte Vietnam Shopping Co. went to the province to look for a location in Thu Dau Mot Town for the firm's project. At a meeting with the provincial authorities, Lotte said it highly appreciated the position of Binh Duong, and that the company would prioritise Binh Duong in its strategy of developing a network of 30 department stores in Vietnam. After the working session, Lotte said it would quickly select a site for building Lotte Mart Binh Duong in Thu Dau Mot.
The company expects to put the project into operation next year. Lotte Vietnam Shopping Co., a unit of Lotte Mart, currently operates two Lotte Marts in HCM City, with one in District 11 and the other in District 7. It plans to pour some $5 billion into 30 department stores countrywide, including in HCM City, Hanoi, Danang, Can Tho and Hai Phong.
In the meantime, German-invested wholesale chain operator Metro Cash & Carry has just opened its 13th wholesale store on National Road 51B, Vung Tau City, Ba Ria-Vung Tau Province. Metro Vung Tau is the fifth provincial centre Metro Cash & Carry has set up after Dong Nai, Binh Dinh, An Giang and Binh Duong. The company's first eight centers are all located in major cities like HCM City, Hanoi, Danang, Hai Phong and Can Tho. The expansion of the distributors gives a strong boost to the businesses of local producers.
According to the producers, the move helps them penetrate the market in provinces where they have been reluctant to access due to the small market size and high costs for transport, personnel and premises. However, the markets in provinces have proved attractive to distributors.
Distributors said that local consumers are now familiar with shopping at supermarkets. They have begun to pay attention to the quality, safety and hygiene of products and are ready to pay for such products at modern shopping facilities. Previously, local consumers were not familiar with shopping without bargaining and always thought that products at supermarkets were more expensive than those outside.
Domestic distributors join hands with foreign firms
With the strong increase of foreign distributors in the local market, domestic firms look to join hands with other international distributors to expand operations and competition. The local distribution Phu Thai Group has cooperated with the Japanese convenience store chain Family Mart to open the group's first stores in the country. The Family Mart retail system opened under franchise with Phu Thai Group. The two companies plan to open 300 outlets around the country over the next five years.
As the country's leading retail store chain operator, Saigon Co.op with 50 Co.opMart supermarkets nationwide and more than 10 Co.op Food stores in HCM City, also has plans to cooperate with foreign distributors.
Saigon Co.op will cooperate with Singapore retail giant NTUC FairPrice Cooperative (FairPrice) to set up a new hypermarket chain in Vietnam. The two partners signed a joint venture agreement in Singapore last month to set up a chain of hypermarkets in the country, with the first store expected to open in 2012, said Nguyen Ngoc Hoa, chair of Saigon Co.op.
The new chain of hypermarkets will leverage Saigon Co.op's network of supermarkets' existing loyalty programmes and large customer base. The cooperation is aimed at diversifying the retail business in Vietnam, Hoa said, adding it would not affect the current operation of Co.opMart.
Hoa said the agreement had been built on the cooperation between the two partners over the years in exchange and training. In Vietnam, Saigon Co.op will be able to better meet the growing needs of its customers by offering a wider range of food products, more competitive prices and greater accessibility. FairPrice and Saigon Co-op will also hold exchange programmes for their employees to facilitate knowledge transfers. FairPrice is the largest supermarket operator in Singapore. The group has some 100 supermarkets across the island, including over 50 outlets of Cheers convenience stores.
Meanwhile, G7 Service and Trading Joint Stock Company, a member of Trung Nguyen Group, last month signed a strategic cooperation agreement with Japanese convenience store operator Ministop Co. Ltd, a member of AEON Group, which has retail and financial services companies in China and Japan, to open hundreds of stores in Vietnam. G7Mart said G7 and Ministop would set up a 75:25 joint venture, which will have initial total capital of $10 million. The first store is expected to be up and running in May 2011, and the forthcoming joint venture is looking to open 100 stores within the first year of its operation and at least 500 in the following five years.
Vietnam is the fourth country Ministop has selected for expansion outside Japan. There are currently 2,032 Ministop convenience stores in Japan, 1,381 in South Korea, together with 320 and 12 stores in the Philippines and China respectively.
Despite the global economic slowdown and high domestic inflation, the distribution market in Vietnam has continued to grow and offered much room for expansion.
REAL ESTATE/PROPERTY- Office rent slumps: report
Office rents were all down in the final quarter of 2010 when supply surged with the opening of new buildings in HCM City, according to a quarterly report released Wednesday by property consulting firm CB Richard Ellis Vietnam.
Grade A rents dipped 4.46 percent from the previous quarter to $35.06 per sq.m per month. Following the opening of HCM City's tallest skyscraper Bitexco Financial Tower in October last year that provided a further 37,710 sqm net leasable area, office space stock increased by 19.4 percent quarter on quarter (q-o-q).
Grade B rents dropped by 2.37 percent q-o-q to $19.55 after the market received three new Grade B buildings with a total of 51,020 sq.m gross floor area.
Meanwhile, eight new Grade C buildings supplied 39,729 sq.m of gross floor area, reducing the rents to $16.25, down 3.92 percent q-o-q.
The overall vacancy increased to 17.8 percent, up 4.4 percentage points, a vivid reflection of the newly completed office space.
The total net absorption in the last quarter of last year, however, reached 34,545 sq.m net leasable area, pushing the figure for the whole year up by almost 50 percent against 2009.
Tenants at the time preferred Grade C buildings with a net absorption of approximately 22,000 sq.m, Rudolf Hever, CBRE Associate director, said.
CBRE expects Grade A rents to drop to comparable levels of other regional cities like Shanghai and Beijing ($31-33 per sq.m per month) when the availability of new office space will be further significantly expanded in 2011.
Absorption is also forecast to continue growing this year when many local companies, looking for professional working environment, take higher quality space.VIETBIZ
SPACE - Japan to aid Vietnam space projects: report
The Japanese government has decided to loan Vietnam roughly 40 billion yen (US$479 million) to support its space exploration programme, a Japanese newspaper reported, on Friday.
The official development assistance (ODA) loans will be spent on three projects – an Earth-based space centre, two observation satellites, and the training of engineers, The Yomiuri Shimbun said.
The final details will be announced later this month. Japanese contractors are expected to be awarded all three projects.
The space centre will be built in Hanoi's Hoa Lac High-Tech Park. It includes a testing facility for satellite assembly as well as a satellite operation and data-analysis centre.
One of the two Earth observation satellites will be manufactured in Japan.
The other will be made in Vietnam. Production is expected to commence around 2019. Japan will send components and engineers to Vietnam for a planned launch in 2020, according to The Yomiuri Shimbun.thanh nien
RETAIL II - Vietnam's imports for electronic products continue to rise in 2011
Although the fluctuation on the dong/US dollar exchange rate during the fourth quarter of 2010 inhibited Vietnam's import growth for electronic products and spare parts, the country's import value for these items posted a growth of 23 percent in 2010 and it is expected to continue to increase in 2011.
In 2010, the country's import spending on electronic products and components was over $5.141 billion, exceeding 23 percent against the figure of $4.869 billion in 2009.
In comparison with the estimated figure of Ministry of Industry and Trade set early 2010 at $4 billion, the country's import spending at over $5.1 billion contributed significantly to the increase of trade gap. Moreover, Vietnam's highest import value for these products was from China with a rise of 60 percent in 2010. This showed the pressure from Chinese electronic products dislodged other nations such as Singapore, which is considered the hub in the world of electronics, Korea and Japan also fell behind China.
By opening the retail market from 2009, along with the tax reduction roadmap under the Vietnam-Japan Economic Partnership Agreement (VJEPA), the Asean-China Trade Agreement, Vietnam's import spending for electronics and components in first six months this year may increase at least 5-10 percent, especially the products of laptop, desk computers and completely built unit (CBU) television.VNS
MINING - Mining Chemical Industry Corp to be established
Vietnam National Coal and Mineral Industry Group (Vinacomin) has lately decided to establish the Mining Chemical Industry Corp under the model of parent company-member company yesterday January 13, 2011.
The new corporation will operate in major business sectors of researching, producing, supplying the dynamite materials for the domestic markets as well as providing storage and transportation services.
The corporation planned to finish construction works on its current large projects in time such as the Ammonium nitrate manufacturing plant project in Vung Tau City with total investment capital of $240 million and other projects.VIETBIZ
POWER - PV Power attains over 15tr dong revenue in 2010
In 2010, PetroVietnam Power Corp (PV Power) attained 15.242 trillion dong in revenue, exceeding 51 percent of the year's plan.
Of which, its revenue from power business gained 14.4 trillion dong (surpassing 52 percent of the year's plan), up 76 percent year-on-year and its revenue from consulting services accounted for about 5.5 percent of the company's total revenue.
Its pre tax profit was estimated at 563 billion dong, after calculating the FX difference, the figure was 140 billion dong, exceeding 37 percent of the year's target.
During 2010, the company's total commercial electricity output reached 12.685 billion kWh (exceeding 25 percent of the year's plan). Particularly, Ca Mau 1&2 power plants produced 9.186 billion kWh (exceeding 21 percent) and Nhon Trach power plant turned out 3.499 billion kWh (surpassing 37 percent of the year's target).
Regarding investment sector, in 2010, PV Power finalised investment projects for Nhon Trach 2 power plant and Hua Na hydropower plant.
In 2011, PV Power would continue to carry out the Luang Prabang hydropower project (total investment in 2010 was 22 billion dong) and other small hydropower projects transferred by PVFC (total transfer value of 139.41 billion dong).VNEWS
Oliver Massmann
Rechtsanwalt
This e-mail is from Duane Morris Vietnam LLC (a law firm). We can provide a list of our partners upon request. If this e-mail has been sent to you by mistake, please let us know, and then delete this message.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Please note that the above articles, comments etc have been extracted or reproduced and forwarded electronically from the sources credited above and have not been authored by the sender and do not necessarily represent the views of the sender. The sender takes no responsibility for the accuracy or legitimacy of the above or changes that may be made to the above by subsequent forwarders or recipients.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Vietnam - News and Regulations
Oliver Massmann
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