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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