North-south express ship fleet in the making

National shipping giant Vinashin has submitted a project on building a modern marine Express fleet for the North-South route at a total cost of over 19.6 trillion VND to the Government for consideration.

The amount of money has been designed to invest in six liners over four years up to 2011, consisting of two large-sized ones capable of carrying 2,700 passengers and 900 vehicles aboard each and four small-sized ones with a capacity of 1,000 passengers and 600 vehicles each.

In the early stage, Vinashin plans to buy ships from Italy to draw experiences in managing passenger-cargo liners but later it will build ships at home.

The investment is projected to largely come from the issuance of bonds and loans.

Late 2007, Vinashin imported a 60 million Euro ship from Italy to test-run the North-South route. The liner, named Lotus, is capable of transporting 630 passengers, 100 small vehicles and 153 container lorries.

Over 300 mln USD slashed from public investment

Public investment has been cut by more than 5 trillion VND (over 300 million USD) as localities and State oganisations suspended some 1,600 projects, according to the Ministry of Planning and Investment (MPI).

The stop of unnecessary and ineffective public investment projects was one among inflation control measures the Government implemented in June, thus helping pull down the consumer price index to the lowest level within the past six months.

The ministry has sent 11 inspection missions to localities to review public investment projects and credit loans.

Indian group builds new plant in Vinh Phuc

India ’s Minda Group organised the ground breaking ceremony of an over 10 million USD auto components plant on June 29.

Covering an area of approximately 2ha in Binh Xuyen Industrial Zone in the northern province of Vinh Phuc, the project will be divided into two phases. The Minda group manufactures a wide range of auto components: electrical switches, security locks, horns, lamps, wiring harnesses, batteries and speedometer clusters.

“Minda Vietnam’s products will be exported to other ASEAN countries. Vietnam is considered a growing market in the region and promises to be a good opportunity for Minda group,” said Minda Vietnam’s general director, Pradeep Kunmar Patel.

Minda Vietnam is the first Indian automotive component in Vietnam . The Minda group was established in India in 1958 and has diversified its operation into Indonesia and Germany.

Major stocks hold steady, VN-Index close to 400

Last week’s five-straight positive trading sessions on the Ho Chi Minh City Stock Exchange saw general improvement in share prices and a reassuring level of liquidity.

Over the week as a whole, the VN-Index rose 26.59 points, or 7.2 percent, to close at 392.61. A total of 53 million shares were traded, at an average value of 322.47 billion VND (19.54 million USD) per day.

Blue-chip stocks such as Sacombank (STB), Saigon Securities Inc (SSI), Phu My Fertilisers (DPM) and Vinamilk (VNM) saw steady increase during the week.

STB led the way in terms of trading volume and value, with 9.64 million shares changing hands for 200.64 billion VND (12.16 million USD), DPM followed, with 3.38 million shares traded for 136.6 billion VND (8.28 million USD).

SSI shares were much in demand after Japan’s Daiwa Securities Group Inc committed to buy 11 million shares and early last week ANZ Bank registered to buy more than 6.8 million. Buy orders for SSI stock exceeded instructions to sell by around two million over the final two sessions of the week.

Foreign investor trading was modest, with only 7.27 million shares bought and 5.87 million units sold.

At the Hanoi Securities Trading Centre, the HASTC-Index gained 2.3 points over the week, or 2 percent, to close at 112.68. In total, 30.63 million shares were traded, with a value of 670.57 billion VND (40.64 million USD).

Signs are good that the market has bottomed out, said Thang Long Securities Company director Le Dinh Ngoc.

“We don’t know for certain that the VN-Index has reached the lowest point of its downturn yet,” Ngoc said. “But, the index’s increasing value and market liquidity over the last three weeks indicate a more stable market.”

“Generally good news about the economy has also supported the market,” he said.

For the first six months of the year, economic indicators have proved positive. Foreign direct investment was 31.6 billion USD over this period, a 3.7-fold increase over the same period last year; value of exports was 29.7 billion USD, a year-on-year increase of 31.8 percent; and the trade deficit fell from 2.85 billion USD in May to 1.3 billion USD in June.

Now is a suitable time for long-term investment, both Ngoc and Bien Viet Securities deputy director Vu Duc Nghia said.

However, Ngo Van Minh, deputy director of Eurocapital Securities’ Analysis Department, said investors should be cautious about their investment decisions right now as the economy still faces difficulties.

The skyrocketing global oil price, which has hit a record high of more than 140 USD per barrel, could further force up domestic petrol prices, Minh said.

Nidec Corp enjoys preferential corporate income tax

The Prime Minister has agreed to grant preferential corporate income tax to Japan-based Nidec Corporation’s investment projects in Ho Chi Minh City ’s Hi-tech zones.

These projects will be entitled to a tax rate of 10 percent if they meet requirements on production of hi-end products set by the Ministry of Science and Technology.

The Ministry of Finance is entrusted to work with the Ministry of Science and Technology and the Ministry of Planning and Investment to guide the implementation of investment projects of Nidec.

Vietnam set to become average income economy by 2020

Minister of Planning and Investment Vo Hong Phuc has said the national strategy to become a world average income economy by 2020 is fully grounded with the recent GDP growth always ranking high in the world.

Addressing a global forum on emerging markets in Hanoi on June 30, Phuc pledged to speed up administrative reforms, complete its legal system, upgrade socio-economic infrastructure, intensify human resources development, expand social security network and achieve sustainable poverty reduction.

“With its great efforts, Vietnam would record higher economic growth rates in the next 10 years and by 2020 will become an average income economy in the world,” emphasised the planning chief.

Over the past 20 years of renewal, Vietnam , an emerging market economy, has “harvested the biggest fruits than ever before,” and gained a high ranking in the world with annual gross domestic product growth at 7.5 percent on average, he added.

The country has turned from a food importer into the world second largest rice exporter. Its export revenues were multiplied by 60 times from 789 million USD in 1986 to over 48.5 billion USD in 2007. FDI attraction and ODA commitments have repeatedly set records at 21.3 billion USD and 5.4 billion USD, respectively, last year.

The national poverty rate on the international standards has been reduced from 58 percent to 29 percent, achieving five years ahead of schedule the global target on poverty alleviation set forth by the UN. The nation’s human development index released by the United Nations Development Programme (UNDP) has also ranked high in comparison with other developing countries of the same per-capita incomes.

Chinese machinery exhibition to be held in Vietnam

More than 200 leading Chinese groups and enterprises in various industries will participate in the China Machinery 2008 exhibition (Chinamac) scheduled to be held in Ho Chi Minh City from July 23-26.

They will display in more than 250 booths equipment in metal manufacturing, packaging, food processing, farming machines, printing and paper industries as well as equipment for environmental cleaning.

Seminars and a ceremony for signing contracts between Chinese and Vietnamese businesses will be included in the exhibition, the fifth annual machinery show of China in Vietnam .

Chinamac, one of the biggest Chinese exhibitions abroad, is aimed to boost the two countries’ trade as Vietnam boosts its demand for equipment and technology to raise its products’ competitiveness after joining the World Trade Organisation (WTO).

The exhibition is jointly organised by the Vietnam Fair and Advertisement Company, the Vietnam Association of Mechanical Industry, the Ho Chi Minh City Industry Department, the China Council for International Trade Promotion and some Chinese companies.

Wood furnitures target 5 billion USD export value

Vietnam earned nearly 1.4 billion USD from the export of furnitures over the past six months of this year, a year-on-year increase of 20.4 percent, according to the General Statistic Office.

The figure brought the industry to the 6 th place among the country’s key exporters, behind crude oil, garment and textiles, footwear, seafood and rice.

Vietnamese wood-based products have earned a firm foothold in 120 countries and territories, accounting for 0.8 percent of market share with the US , the European Union, and Japan being the three key markets.

Made-in-Vietnam furniture has also been exported to new markets such as Canada and a number of East European countries.

The Vietnam Woodwork and Forestry Products Association forecasted that woodwork export will continue increasing rapidly by between 10-40 percent by 2010, particularly in major markets.

However, it is necessary to solve problems facing the sector, including the lack of materials and skilled workers, in order to fulfill the target of exporting 5 billion USD worth of wood-based products by the decade-end.

Vietnamese wood producers and processors are focusing on developing high-valued products in a bid to increase added value for each product and prevent anti-dumping lawsuits.

The move is demonstrated by a prestigious woodwork exporter – the Saigon Daklak Joint Venture Company (Sadaco) – which has shipped abroad furnitures each worth between 1,100 – 1,800 USD, more than doubling its previous price, according to its General Director Tran Quoc Manh.

Manh stressed that this is a new trend adopted by local businesses as Vietnam still receives a few orders for high-valued products.

However, in the context when exporters tend to look for low-cost products, the woodwork export sector of Vietnam still has many opportunities to turn out products of high competitiveness and to invest in long-term plan for high-valued commodities.

The sector is drawing 17,000 labourers who are working in 1,600 wood processing businesses nationwide, including 250 foreign-invested ones.

ADB provides 196 million USD for power plant

The Asian Development Bank (ADB) will provide a loan of 196 million USD to build a 156-MW power plant in the Bung river in the central province of Quang Nam .

The plant is expected to be completed by 2013 to help ease the shortage of electricity in the country.

According to ADB energy expert Pradeep Perera, the project will help improve the stability and reliability of the national power grid and reduce the country’s dependence on fossil fuel.

The expert further said that ADB will grant 2 million USD as non-refundable aid through a poverty reduction fund of Japan to help 206 families, which will be affected by the project.

Rural areas train for success

A new Government scheme will train over one million people each year in rural areas until 2020.

The project on Strengthening Training for Industrialisation and Modernisation in Rural Areas from 2008-2020 was set up by the Ministry of Agriculture and Rural Development (MARD).

According to MARD, there are more than 25 million farmers nationwide, accounting for 55.7 percent of total labour force.

Only 16.88 percent of rural labourers have graduated from vocational training schools, colleges or universities. The remaining 83.12 percent are untrained labourers; some are even illiterate.

About 17.67 percent of farmers have gone through training courses in agriculture, forestry or aquaculture.

“To raise farmers’ incomes, job training is a top priority,” said Tran Duc Vien, Dean of Agriculture University I.

According to him, 17 percent of rice farmers in the North are using inappropriate cultivation techniques. There are currently no organisations offering job training in rural areas.

For the project’s goal, 60 percent of non-agricultural workers in rural areas and 40 percent of workers involving in farming will get training by 2020.

That means 1-1.1 million people will have to be trained each year from now on to meet the target.

However, existing vocational centres and educational organisations can only train about 600,000-700,000 labourers each year.

According to Dr. Dang Kim Son, head of the Institute of Policy , labourers that meet the Government’s priority criteria will be supported by vocational training courses starting in 2010. And vocational training will be based on business demands.

It was necessary to correctly identify the specific training needs of people in accordance to their region’s geographical and social traits, Deputy Prime Minister Nguyen Thien Nhan said.

The deputy PM asked key rural areas to set up advanced farmers and farming models whose effectiveness had a proven track record. This would require the establishment of a region-wide information network for farmers who would become better informed by learning new skills to improve their trade.

However, Nhan recognised that it was not possible to train all farmers which is why he stressed selecting the right people for the training who could then act as trainers.