US Embassy helps to empower local women

The US embassy in Vietnam announced two projects worth more than 38,000 USD on November 26, designed to help boost democracy at a grassroots level and increase the involvement of women in the policy-making process.

These grants have been provided as part of the US Department of State’s Small Grants Programme.

The first project, worth 18,750 USD will be executed by the Centre Development Assistance (CDA), with the aim of strengthening the Grassroots Democracy Ordinance in the Nam Bung and Nghia Tam communes in Van Chan district, in the northern mountainous province of Yen Bai .

CDA will organise training workshops and carry out marketing and communication campaigns to raise help raise the awareness of both local authorities and the public of the Ordinance’s work. The funding will also be used to promote local residents’ participation in the local decision making process and to develop the information exchange mechanisms between the regional authorities and local residents.

The other project, worth close to 20,000 USD has been awarded to the Centre for the Education, Promotion and Empowerment of Women (CEPEW) to fund a project aimed at increasing female participation in the policy-making process.

CEPEW will conduct training courses, group discussions and information programmes to raise the awareness of gender equality issues, women’s rights and the implementation of grassroots democracy for both local authorities and residents in the area.

The project will also help to raise local leaders’ capacity to further the incorporation of democratic principles in the policy-making process, and increasing the capacities for participation and advocacy of members of the communal Women’s Union’s standing and executive committees.-

2 million USD in foreign aid for local flood victims

As of Nov. 25, foreign organisations had donated a total of almost 2 million USD to help the victims of recent floods in 17 northern and central localities in Vietnam , according to Doan Van Thai, Deputy President and General Secretary of the Viet Nam Red Cross.

Of the total, the Netherlands Red Cross has donated 200,000 EUR; the Swiss Red Cross, 80,000 USD; the German Red Cross, 66,150 EUR; the Australian Red Cross 64,877 AUD; the Finland Red Cross, 50,000 EUR, while the US Red Cross and the US Agency for International Development (USAID) each provided 50,000 USD.

Fund-raising activities to help the flood-hit victims are still being carried out in many of these countries.

On the same day, the Vietnam Red Cross received more than 820 million VND (48,200 USD) from Philip Morris Vietnam to provide 2,000 relief packages to help the worst-hit families.

The Vietnam Red Cross has provided approximately 4.1 billion VND (242,000 USD) in cash and commodities as emergency aid to the flood victims. The society is aiming to provide more than 2,000 tonnes of rice, 500 tonnes of rice seeds, 680 tonnes of fertilizer and 200 cattle to the provinces most affected by the disaster.

The floods, triggered by prolonged rains across northern and central Vietnam earlier this month, killed 82 people and destroyed 180,400 houses and 245,000 ha of winter crops. The total damage is estimated to be more than 6 trillion VND (360 million USD).-

Bulgarian firms eye local opportunities

HA NOI — Bulgarian enterprises expressed their hopes to strengthen co-operation with Vietnamese firms in such sectors as trade, investment, construction, footwear, and handicrafts during the Viet Nam-Bulgaria Business Forum held in Ha Noi yesterday.

Deputy Minister of Industry and Trade Le Danh Vinh said Viet Nam attached much importance to traditional relations with Bulgaria, and said the country would do its best to further develop multi-faceted relations, and was ready to be a bridge linking Bulgaria with the nations of ASEAN.

Viet Nam and Bulgaria have signed a framework agreement on economic co-operation, deals on investment protection, and double taxation agreements, he said, adding that the Vietnamese Government seeks to create the most favourable conditions for foreign investors, including those from Bulgaria, to invest in the country.

In recent years, the bilateral co-operation between the two countries, especially in trade and investment has been increasing. Two-way trade reached over $46 million in 2007, a year-on-year growth of 45 per cent, and $68 million during the first nine months of this year. Vietnamese exports represent $56 million of this year’s trade figures, mainly through exports of coal, coffee, rubber, seafood, textiles and handicrafts.

Vinh said he hoped enterprises would make full use of the business forum to exchange experiences and trade information, and seek partnerships with each other.

He also suggested that to boost co-operation, business should further strengthen information exchanges, and consider opening representative office as well as establishing joint-venture companies.

Addressing the meeting, the Bulgarian deputy minister of the Economy and Energy, Iavor Kuyumdziev, said the 21st Intergovernmental Committee on Economics, Trade, and Scientific and Technical Co-operation, scheduled for this month is a clear evidence of Bulgaria’s wish to consolidate comprehensive co-operation with Viet Nam. —

Local fruit faces stiff competition

Buyers at the Co-op Mart Hung Vuong in HCM City. The share of locally grown fruit has fallen on the domestic market with the arrival of cheap imported produce from Thailand and China. — VNA/VNS Photo The Anh

HCM CITY — Authorities in the Cuu Long (Mekong) River Delta must propagate Good Agricultural Practices (GAP) to improve the quality of fruits sold both in the domestic and export markets, an expert says.

Dr Nguyen Minh Chau, rector of the Southern Fruit Research Institute, says the problem in the country is that agriculture is scattered and done on a very small scale, leading to high production costs and low quality and yield.

To develop fruit production, each locality in the delta should identify its speciality, earmark an area of at least 3,000ha for cultivating that fruit, and use intensive farming techniques, he says.

Fruit producers need to co-operate by joining or setting up co-operatives to achieve large-scale, safe, and high-quality fruit production, he says.

This will also enable better control of seedlings so that trees suffer less from disease and improvement in productivity and quality, he says.

Besides, adoption of advanced technologies and GAP standards in production, processing, and preservation is easier at large farms, he says.

Joining hands will also help revamp the distribution system in such a manner that farmers are not forced to make distress sales when there is a bumper crop, he says.

Several hurdles

Fruit export has faced several hurdles in recent years because Vietnamese fruits do not meet food safety regulations adopted in many countries, Chau says.

This is despite the fact some fruit varieties have received GAP certification – like Lo Ren Vinh Kim star apple, Hoa Loc sweet mango, and dragon fruit.

Overuse of pesticides by a number of Vietnamese farmers means their fruits have high residue levels.

Preservation technologies are not good enough to keep fruits in good conditions. The Viet Nam Fruit Association (VFA) says the rate of spoilage is relatively high at 20-30 per cent.

Because of the small scale of fruit cultivation, exporters are unable to execute large orders or consistently maintain quality.

The delta has 280,000 ha under fruits with an average annual yield of 2.5-2.7 million tonnes, or 70 per cent of the country’s output. This includes nationally popular fruits like Hoa Loc mangoes, longans, rambutans, Cai Mon durians, thick-skinned oranges, and Nam Roi pomelo.

The chairman of the Viet Nam Fruit Association, Vo Mai, says fruits from the delta were mostly consumed within the country. Only a small quantity of fresh fruit is exported to China.

Even in the domestic market, the share of local fruits has fallen after the arrival of cheap imported fruits from Thailand and China.

Chau says Vietnamese Ri-6 durian costs VND25,000 per kilogramme, while Thai Mongthong durian costs just VND10-15,000. Similarly, several other Vietnamese fruits are priced two or four times higher than Thai imports.

Mai is hopeful, however, that fruits grown here have the potential to become popular at home and abroad if they meet GAP standards. —

Local confectioners set to retake market

HA NOI — Domestic confectioners expect to regain market share from their Chinese counterparts in the wake of the melamine scandal.

Although no official statistics are available, Vietnamese stores were flooded with cheap confectionery from China, however, local confectioners fortunes changed with the melamine scandal, and locals are turning back to Vietnamese made products.

Owner of Thanh Long confectioners, Pham Thi Ngoc Thuy, said her establishment had received a large volume of orders from supermarkets and wholesalers to provide confectionery for Lunar New Year (Tet), roughly 50 per cent higher than last year.

Thuy said although she had been a confectioner for nearly 30 years, this was the first time her company had received so many orders.

The Bibica Company plans to increase production capacity over 20 per cent for Tet and has started stocking up on raw materials to meet demand.

The Kinh Do Company had also increased production by 10 per cent, said deputy general director of the company Le Phung Hao. The company could also rise production a further 30-50 per cent if demand increases, he said.

Industry insiders said a recent mistrust of Chinese food products was helping domestic producers, especially as people stock up on sweets before the Tet holidays, and supermarkets were taking note of consumer sentiment.

Director of Maximark supermarket, Nguyen Phuong Thao, said her supermarket would increase orders for locally made confectionery.

A number of confectionery importers have reverted to selling locally made products.

Head of the business division of a company specialising in confectionery imports, who declined to be named, said that the company had cut imports by 50 per cent and reduced prices of imported sweets by 5-20 per cent, but the company still had large stockpiles of imported goods.

Deputy general director of the Bibica confectionery company, Phan Van Thien, has earlier said the company was facing difficult times competing with Chinese confectioners, but now thought that local producers could succeed if they paid due attention to quality and hygiene. —

Local retailers prepare for more offshore competition

HA NOI — Local retailers are attempting to figure out how to keep market shares amid the entrance of wholly foreign-invested retail giants as Viet Nam’s market will be completely open next year, in accordance with World Trade Organisation’s commitments .

“Opening is expected to create more favourable conditions and to boost the business development of local retailers; however, it also brings a number of challenges,” said Deputy Minister of Industry and Trade Nguyen Thanh Bien in a conference in Ha Noi yesterday.

According to the WTO commitments, Viet Nam must open to all wholly foreign-invested retailers in 2009. Many well-known companies such as Metro Cash&Carry, Casino, Big C Bourbon, Parkson and Wal-Mart have entered the local market already. Some representatives warned that most Vietnamese retailers are small amateurs and cannot possibly control the market.

To turn challenges into opportunities, the Ministry of Industry and Trade called on local retailers to improve competitiveness, draft out long term strategic investment plans and develop risk provision strategies.

It is necessary for policy makers to issue laws relating to retailing, including laws on product quality, food safety and hygiene and consumer protection.

The Association of Vietnamese Retailers (AVR) is reportedly drawing up a decree on retailing to submit to the Ministry of Industry and Trade that will come into effect in 2009.

The decree hopes to satisfy the pressing requests of the local retail community on mutual rules for protection against the misuse of powerful brand names.

Broaden business

Acquisitions and mergers among local retailers are recommended to help them broaden their business scale for firmer positioning.

In addition, domestic retailers should re-train labour forces, upgrade their services and set up strategic relationships with producers and distributors, experts advised.

Domestic retailers should take full advantage of their close relationships to each other, as well as with foreign partners, to achieve mutual benefit. Retailers should also apply IT in their management in terms of commodity classification, clients, employees and strategic partners, among other things. Bien said that the retail market contributes about 15 per cent of Gross Domestic Products (GDP) annually.

At present, retail sales via supermarkets account for only 10 per cent of sales, with the remaining distributed among traditional markets, small shops and direct sellers.

Consumption habits of Vietnamese people, especially the youth, are changing. Vietnamese increasingly prefer to shop at modern supermarkets with better quality and services.

It is hoped that by 2017, retail sales from supermarkets in Viet Nam will account for 60 per cent of sales, equal to the current level in Thailand.

The retail market pie is one that keeps getting bigger, as retail sales in the country totalled around US$27.3 billion during the first six months of this year and are anticipated to climb to $50 billion by 2010, the deputy chairwoman and general secretary of AVR, Dinh Thi My Loan said. —

Danish businesses seek co-operation with local firms

HA NOI — Danish enterprises called for more co-operation with Vietnamese firms in the environmental and energy-friendly building-material production, printing and packaging sectors during yesterday’s seminar in Ha Noi.

The event was organised as part of a week-long trip of 20 Danish enterprises to explore business opportunities in Viet Nam, according to the Danish embassy in Ha Noi.

The trip was also aimed at matching Danish and Vietnamese enterprises with the potential to enter into commercially viable partnerships and transfer of technology and expertise. The Danish International Development Agency (DANIDA)’s Business-to-Business (B2B) Programme pledged to fund such partnerships by up to US$1 million.

The Danish Ambassador to Viet Nam Peter Lysholt Hansen said he hoped that through the support from DANIDA, Danish companies would be facilitated in developing strong and long-lasting business partnerships with Vietnamese companies to their mutual benefit.

Despite a significant annual growth of 15-20 per cent over the past years, the domestic printing and packaging sectors still experienced several challenges including dependence on imported raw materials, a lack of professionalism and a lack of skilled labourers, said chairman of Viet Nam Packaging Association Nguyen Ngoc Sang.

The chairman also emphasised the need to foster co-operation with foreign firms, especially from Denmark as a move to help local firms enhance their professionalism as well as expand production.

Pham Van Bac, deputy head of the construction ministry’s Department for Construction Materials Management described the event as a good chance for Danish businesses to introduce the latest environmentally-friendly technology into the local building material production, printing and packaging sectors.

Through the event, he said, Danish firms could also study specific demands of the Vietnamese market to discover business opportunities.

Viet Nam was presented as a promising investment destination for Danish enterprises who wished to invest in building materials production due to the country’s soaring demand for construction materials, he said.

The country needs 100 million tonnes of cement, 400 million sq.m of tiles and 200 million sq.m of construction glass by 2020, pursuant to a plan to develop the building materials sector, approved by the Prime Minister.

The sector must be developed into a key industry, both sustainable and environmentally-friendly, according to the plan, which also says all economic entities are encouraged to produce and trade building materials.

During their trip in Viet Nam, Danish businesses will also meet with Vietnamese partners in HCM City and several localities to seek opportunities to set up joint ventures.

Established in 1997, the B2B programme aims to contribute to socio-economic development in Viet Nam by improving the competitiveness of Vietnamese enterprises and support the establishment of business partnerships between the two countries. To date, the programme has given 170 million DKK (US$30 million) and has assisted in the establishment of approximately 100 start-up projects and 110 long-term partnerships. —

Local consumers loyal to big brands

HCM CITY — While the awareness of Vietnamese consumers of brand names is changing, buyers are becoming increasingly loyal to established brand names, according to participants in a seminar held by European Chamber of Commerce (Eurocham) last Friday.

Market research results announced at the seminar “Brandname: The Key to Business Success” showed that in 2008 only 50 per cent of consumers chose to buy goods based on sales promotions, down from 70 per cent in 2004 and 91 per cent in 1991.

Meanwhile, 58 per cent of Vietnamese consumers below 25 years of age are willing to welcome new ideas and concepts of a brand name. Further pointing to the growth and attraction of new brand names, eight out of the 10 fastest-growing brand names in Viet Nam this year entered the market in the last 36 months.

Despite brand name expansion, fewer consumers are willing to shift away from the brands they have been loyal to towards something new, from 88 per cent in 1991 down to 44 per cent this year.

According to Antonio Berenguer, Trade Counsellor of the European Commission Delegation to Viet Nam, the country has not yet paid enough attention to branding, let alone strengthening established brand names.

For example, few European people have ever heard of the local coffee brands of Viet Nam, despite the fact that Viet Nam is the world’s second largest coffee exporter.

The fact that Vietnamese coffee has yet to develop a brand name of its own will adversely impact the sector if the country continues exporting raw material whose price is highly volatile, according to the trade counsellor.

Not only export items but also domestic products need a brand name, which is the prerequisite for consumers to decide whether to buy a product, rather than quality, style, and price, according to Ralf Matthaes, managing director of TNS Viet Nam Co, a 100 per cent foreign-owned market research company.

Matthaes said a brand name established the strength to start up a business and to maintain a relationship with customers.

Antonio Berenguer also warned about the alarming popularity of fake brand nam es in Viet Nam, reporting that as much as 40 per cent of motorcycle spare parts, 8 per cent of medicine, and 25 per cent of wine were counterfeit or imitation goods. As much as 88 per cent of software in Viet Nam was pirated, resulting in economic losses of an estimated 200 million euros ($278.6 million) a year. —

Toyota VN begins raising local content in Innova

HA NOI — Toyota Viet Nam has announced it began operations at a new chassis production plant in a bid to raise the percentage of local parts in its best-selling Innova car from 33 to 37 per cent.

The US$5 million plant is on 2,100 sq.m of land adjacent to its auto plant in the northern province of Vinh Phuc, and will have the production capacity of 21,000 chassises per year, the Japanese-invested auto maker said.

“Since the local ancillaries industry is still in its infancy, the best way to increase the localisation rate now is to build our own parts and component plant,” said Toyota Viet Nam’s general director Nobuhiko Murakami.

“More importantly, the inauguration of the plant will play as a foundation for the further development of our localisation plan” he added.

He said the company plans to increase the localisation rate to 50-60 per cent as the local market opens up in the next few years.

The Viet Nam auto industry, which was established in 1991 with the arrival of the first two foreign-invested makers, Mekong Auto and Viet Nam Motor Corporation (VMC), is still in its early development stages.

The nation’s current 10 foreign-invested auto makers produce vehicles that have only 5 to 20 per cent of locally made parts; domestic makers have reached an inclusion rate of more than 40 per cent, according to the Ministry of Industry and Trade.

Meanwhile, the Government wants auto makers to raise the localisation rate to 60 per cent by 2010, when total car sales in the country are estimated to reach 150,000 units per year.

The country has about 150 enterprises involved in business activities related to the manufacturing, assembly and repair of automobiles.

According to the Viet Nam Automobile Manufacturers’ Association (VAMA), seventeen leading auto makers in Viet Nam sold a combined 7,809 vehicles in August, up 21 per cent year-on-year. —

As world tumbles, local exchange stays up

Investors at Alpha Securities in Ha Noi. As news of the pending US bailout remained on hold, and its biggest lender Washington Mutual announced bankruptcy, limited foreign influence in the domestic stock exchange has kept it isolated from feeling the effects of this global downturn. — VNS Photo Truong Vi

HA NOI — The Vietnamese stock market seemed the only in Asia to have avoided a downturn last week after the hesitant implementation of the US Government’s US$700-billion bailout and the bankruptcy of its biggest lending bank Washington Mutual.

Early last week, the US Government released its bailout details, which spurred global investors in two early trading sessions. Investors continued to wait to see the plan implemented, and treated securities investment with a similar wait-and-see attitude.

Unfortunately, US parties have yet to reach an agreement on implementing the bailout.

The week got worse late on Thursday when the biggest US bank Washington Mutual officially declared bankruptcy due to a shortage of liquidity, a day after JP Morgan Chase poured $1.9 billion into buying it back.

The bankruptcy, the sixth in the US financial system this month, continued shaking investors’ faith in the bailout, discouraging securities investment. As a result, most Asian markets ended last week in a downturn.

The Vietnamese stock exchange proved an exception, where among five sessions in the week the local exchange only fell on Wednesday in both HCM City and Ha Noi bourses.

The VN-Index last week added 10.19 per cent to 483.80, with 142 gaining codes, 42 sliding and one unchanged.

Two major stocks PPC of Pha Lai Thermal Power and PVD of PetroVietnam Drillings were the biggest gainers of the week, while the blue chip sector also contributed in pulling investors back into securities investment.

STB of Sacombank, HPG of Hoa Phat Group and SAM of Cables and Telecom Materials were the busiest codes of the week, with a total trading volume at 7.42 million, 3.13 million and 3.01 million shares, respectively. Other blue chips such as SSI of Saigon Securities Inc, DPM of Phu My Fertilisers or FPT of Financing and Promoting Technology also saw more than 1 million shares change hands.

Market liquidity was 6 per cent higher than the previous week, with market volume at 108.77 million shares at a value of VND3.95 trillion (US$235.23 million).

According to many local securities analysts, the impact of the US financial system’s recession was insignificant on the local exchange.

“In fact, there are no globalised enterprises in our stock markets. Other than the fact that the US is one of the biggest importing markets of Viet Nam, the other factors were of no concern,” said B ienViet Securities’ deputy director Vu Duc Nghia.

Nghia also said that the market was too small to feel a direct impact from the US financial recession. “If there had been any impact, it would have been on investors’ attitudes toward the recession or concerns when they saw foreign institutions selling shares at remarkable volumes recently.”

According to the Market Development Department under the State Securities Commission, the sale from foreign funds mainly aimed to adjust the investment portfolio in a bid to cope with difficulties given by this tough period of the economy.

“In addition, they continued buying back shares, not only selling,” said Nguyen Son, head of the department.

Last week, foreigners bought a total of 25.03 million shares and sold 16.88 million. This sector also focused their purchase in companies with good business performance, including HPG, DPM and PPC.

“Anyway, the foreign sector could not help much on the local exchange in the entire year, as they have more than the Vietnamese exchange to pour money into,” said Vu Hoang Ha, a veteran investor in Ha Noi.

Ha also said that the market this week would see a mix of ups and downs, as it would still be governed by the psychological factor that came from its leading domestic traders, the young and inexperienced investors.

At the Ha Noi Securities Trading Centre, the HASTC-Index also gained 9.26 per cent to 160.31, with a total 55.63 million shares traded worth of VND685.10 billion ($40.77 million).

Big stocks like ACB of Asia Commercial Bank, VCG of constructor Vinaconex Group or KLS of Kim Long Securities got the heaviest trading volume, with each share seeing over 5 million shares change hands.

Foreigners last week balanced their purchases and sales in this market when they bought 3.27 million and sold 3.18 million shares.

Last week, the stock market welcomed some important news, including a higher FDI (foreign direct investment) at $57.1 billion in both existing and newly registered projects in the first nine months, a $500-million trade deficit in September, and the State Bank’s confirmation of the prime interest rate at 14 per cent.

“Though no big news came in, we expected this information would continue confirming investors’ faith in the Government’s plans to stabilise the economy by the end of this year. Thus the stock market should run smoothly,” said Nghia. —