HCM garment expo debuts

HCM CITY — Viet Nam’s only dedicated garment production technology exhibition, AAMA-TEX Vietnam, opened yesterday at the HCM City International Exhibition and Convention Centre (HIECC) in Tan Binh District.

The event has attracted about 120 exhibitors from 15 countries and territories.

The three-day event is endorsed by the ASEAN Federation of Textile Industries (AFTEXT) and the Sewing Machine Traders Association Singapore (SMTAS).

It also has the support of the China Sewing Machinery Association and VDMA German Garment and Leather Technology Association.

Held for the first time in Viet Nam and outside of Singapore, the exhibition is part of the established AAMA-TEX series launched in 1989 in Singapore. The series is unique in that it is dedicated to garment production technology. There have been seven such exhibitions held Singapore thus far, and it has grown to be the largest event of its kind in South and Southeast Asia.

Covering an area of more than 4,000sq.m at the HIECC, the exhibition provides a setting for importers and exporters of garment and textile machinery, garment and textile manufacturers, dealers in garment and textile accessories, distributors and agents of garment and textile machinery accessories, trade associations and consultancy firms to meet, transfer technology, and promote trade. —

VN Airlines drops fuel surcharge

HCM CITY — The Vietnam Airlines has decided to cancel its fuel surcharge on domestic flights from next month.

The national carrier announced on Monday that its decision was prompted by the fall in world oil prices and its estimation that it would fluctuate between US$70-90 a barrel in the near future.

The airlines had introduced the fuel surcharge on August 15 to cope with inflation and fuel price hikes. At first, it applied the additional fees ranging from VND50,000 ($3.2) to VND180,000 ($11.3) on one-way tickets.

It had twice adjusted the rates (August 29, September 4) since world fuel prices began to fall. —

Financial crisis cuts into tourism targets

Tourists visit Bat Trang pottery village in Gia Lam District, Ha Noi. The country will likely miss its target for tourism this year. — VNA/VNS Photo Huy Hung

HCM CITY — Even though the peak tourism season is in full swing, the number of foreign tourists to Viet Nam has not increased, according to statistics by the Viet Nam National Administration of Tourism (VNAT).

Statistics show that the number of foreign tourists coming to Viet Nam from June to August decreased 15 per cent from the same period last year.

The trend continued in September, with only 315,000 overseas visitors in the country, 50,000 less than September 2007.

Most of the foreign tourists to Viet Nam in September came from China, Russia and Germany.

According to reports from several five-star hotels in HCM City and Ha Noi, not as many foreigners spent part of their summer holidays (from June to September) in Viet Nam as last year.

One director of a tourism company, who asked not to be named, said his hotel saw a 50 per cent drop in reservations from overseas travellers, even though booking a room there is now easier than in past years.

Experts blame the plummeting figures on the global financial crisis.

Moreover, climbing prices for tours to Viet Nam many also be behind the decrease of foreign tourists.

While tours to Thailand, Malaysia and Singapore only increased 5 to 10 per cent, tour prices to Viet Nam jumped 15 to 30 per cent because of the skyrocketing cost of air tickets and hotel rooms in the country.

Moreover, a lack of advertising for Vietnamese tourism and services at tourist sites are also likely responsible for fewer international travellers.

According to Le Dinh Tuan from the Tan Hong Tourism Company, the tourism industry should replace media advertising methods with hosting various events to attract overseas tourists.

Vu The Binh, head of the VNAT’s Travel Department, said that tourism management agencies needed to established a direct relationship with overseas partners to publicise tourism in Viet Nam.

“However, tourism companies should not ignore the State’s role in establishing relationship with foreign partners,” he said.

Some experts believe that tourism to Viet Nam could see a boost in the remaining months of the year thanks to the number of business people attending meetings, incentives, conferences and events, also known as MICE in the tourism industry.

The strong development of the local export and processing industry could create an attractive market for overseas enterprises, especially from Nigeria and Italy, and bring in more guests.

Many Nigerians have recently come to Viet Nam for business. Over 200 Italian business people are expected in the country at the beginning of November. —

Production grows much slower than last year

Fire-resistant materials manufactured at a Hoang Thach Cement Co’s factory in Bac Ninh Province. The country’s industrial production growth rate at the end of October was the lowest so far this year, reaching VND547 trillion (US$33.2 billion). — VNA/VNS Photo Huy Hung

HA NOI — The country’s industrial production growth rate at the end of October was much lower than for the same period last year, according to the General Statistics Office (GSO).

While in previous months, the accumulated growth rate over the same period last year never dropped under 16 per cent, it was at 15.8 per cent with industrial production value coming in at VND547 trillion (US$33.2 billion) for the first ten months of the year.

Experts from the GSO accredited the fall to the effects of the world financial crisis, and skyrocketing inflation. Inflating prices has reduced purchasing power.

Foreign-invested firms contributed 41.1 per cent to the country’s total industrial production value, and saw a growth rate of 17.8 per cent over the corresponding period of last year.

With non-State enterprises accounting for 35.5 per cent of the country’s total industrial production value, the sector recorded the highest growth rate at 21.1 per cent.

State-owned enterprises recorded the lowest growth rate of only 5.5 per cent, according to the GSO.

Key industries were able to keep a stable growth rate, including the electricity sector that produced 62.1 billion KWh, up 12.2 per cent over the same period last year. The cement sector reported producing 29.7 million tonnes of cement, an increase of 10.7 per cent.

Other industrial products with high growth rates included aquaculture, washing powder, automobiles, clothing and refrigerators. Their growth rates ranged from 17.2 per cent to 64.2 per cent.

Growth rates of crude oil and steel continued to drop. Within those10 months, the country exploited more than 11.8 million tonnes of crude oil, down 8.1 per cent over the same period last year. Because of low demand, the country produced only around 3.32 million tonnes of steel, down by 7.7 per cent.

According to experts, the country’s industrial production growth rates may continue to fall.

They noted that it was difficult to control the drop because purchasing power since the beginning of the year had been losing value.

Moreover, the consumption of Vietnamese goods in the international market in the first 10 months of the year recorded a loss.

In October, export turnover was just $5.1 billion. This number stood at around $6 billion in previous months. —

VN needs better corporate governance

VN needs better corporate governance

Executive Vice President and CEO of International Finance Corporation (IFC) Lars Thunell recently returned to Viet Nam for his second official visit in two years. During his trip, Thunell attended the launch of a new IFC programme in CG (corporate governance), effective after a signing ceremony last Friday. He shares his views with Viet Nam News reporter Ha Phuong on the value of good CG practices in the country.

The current state of the global economy, together with recent domestic economic developments that are shaping Government policy, have exposed a need for higher corporate standards and practices. How can good CG help Viet Nam overcome this period of difficulty?

IFC believes that private sector development is the primary vehicle for sustainable economic growth. In order to encourage economic development – in Viet Nam and elsewhere – companies must operate according to a framework that establishes the rights and responsibilities of management and shareholders.

Good CG helps maximise company value by improving operational efficiency, and enhancing long-term prosperity through better and transparent strategic planning. It also results in greater access to cheaper financing and global investment.

In light of the present global economic situation, the improvements that good CG brings – to the company, the shareholder, the sector, and the economy – are vital. Competition will intensify as investment criteria are reviewed. Corporations looking to expand will be increasingly scrutinised.

Standards will consequently be raised. In Viet Nam, the recent volatility of the stock market, the recognised need for investor protection, and the expressed investor concerns for transparent business management highlight the need for standards and safeguards.

IFC is working to help create and support a culture of good governance standards and practices that build from the Government’s commendable efforts to introduce CG principles – most notably in the Securities Law and the Enterprise Law.

How do you compare the current CG practices of private companies in Viet Nam with ones from other countries?

It is difficult to make meaningful comparisons between countries, but I should say that, as in other transitional economies, capital markets in Viet Nam are still in their initial phase of development, and private enterprises tend to be relatively small. It follows then that CG and key concepts like minority shareholder rights and fiduciary duties of company directors are unfamiliar or relatively new.

IFC recently conducted a study in Viet Nam which showed that CG practices still require substantial improvement at both company and regulatory levels. Board practices, information disclosure, and treatment of minority shareholders showed up as areas needing particular attention.

But I want to note that during my time here in Viet Nam, I have had the chance to meet with a number of Government and business community representatives, and attend the launch of a CG program in Viet Nam which IFC will implement in partnership with a number of donors.

It has been extremely encouraging to observe the interests and motivations from both sides, and I strongly believe that Viet Nam’s regulators and companies will elevate governance to international best practices, and thereby help both the private and soon-to-be private companies become more globally competitive.

From the perspective of an investor and private sector development agency, why has IFC chosen to pursue a CG programme in Viet Nam? In which other countries has IFC implemented this programme? What were the results?

IFC has been providing CG expertise world-wide for more than a decade. We have helped improve CG practices in the former Soviet Union, Central Asia, Africa, the Middle East, and Southeast Europe. More recently, we have initiated a project in China that shares a number of parallels with the current stage of economic reform in Viet Nam.

Thus, IFC has a wealth of relevant institutional, global, and regional knowledge related to CG. And our in-country presence over the past decade will enable us to apply this global experience in Viet Nam’s context.

What are the specific activities IFC will deliver during the three-year project duration? Will IFC have to rely on support from local Government or any other authority to ensure success of the project?

IFC’s programme will be broad-based assistance that initially will focus on improving existing policies, laws and regulations, and educating the general public on the value of good CG.

We will employ national awareness raising campaigns and training courses for journalists on the rights and responsibilities of shareholders and management. We will also work with educational institutions to develop courses that provide Viet Nam’s future business leaders with the necessary knowledge and skills.

We also are looking forward to assisting banks and their institutional investors with assessing their clients’ CG practices in order to reduce risk in their portfolios.

Successful implementation will be greatly aided by support from the Government, business groups, and the corporations themselves. The programme will be working directly with key Government agencies, including the State Securities Commission, the State Bank, and the Central Institute for Economic Management.

As I said earlier, the motivations and interests I have seen from all participants bode well for project success. I am confident that we will deliver a higher standard of good governance for Viet Nam. —

VN Airlines drops fuel surcharge

HCM CITY — The Vietnam Airlines has decided to cancel its fuel surcharge on domestic flights from next month.

The national carrier announced on Monday that its decision was prompted by the fall in world oil prices and its estimation that it would fluctuate between US$70-90 a barrel in the near future.

The airlines had introduced the fuel surcharge on August 15 to cope with inflation and fuel price hikes. At first, it applied the additional fees ranging from VND50,000 ($3.2) to VND180,000 ($11.3) on one-way tickets.

It had twice adjusted the rates (August 29, September 4) since world fuel prices began to fall. —