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Business in brief in 16 July

Date: 7/17/2012 7:05:05 AM

(Sourced from various news agencies)

Business in brief in 16 July

Vietnam exported US$6.5 billion worth of garments and textiles in the first six months, a year-on-year increase of 11 percent. The country now ranks second in clothing exports to the US market with a growth rate of 8.5 percent, while still retaining sustainable growth in the Republic of Korea and Japan. The garment and textile sector will continue facing difficulties due to falling demand from major markets such as the US and the EU. This year, the sector is forecast to earn between US$18.2-18.5 billion with a growth rate of 12-14 percent if there is no big fluctuations in major markets and in the price of materials.

The International Finance Corporation (IFC) will loan the Orient Commercial Bank (OCB) US$10 million to help SMEs access credits to maintain operation in the face of the economic downturn. The corporation said on July 13 that the loan is part of the IFC Global Trade Finance Program (GTFP) that was first joined by the OCB and Techcombank. Over the past five years, the IFC has offered more than US$1 billion in credit to Vietnamese SMEs through the GTFP. The IFC has been cooperating with the OCB since 2011 and has granted the bank commercial endorsements worth US$20 million. Last May, the OCB also received a US$25 million credit package targeting SMEs and businesses owned by women.

The Republic of Korea (RoK) is set to hold ministerial-level talks with Vietnam over a bilateral free trade agreement (FTA) soon, said the RoK Trade Ministry on July 15. According to the ministry, the RoK is trying to complete bilateral FTAs with a number of ASEAN member countries in a bid to increase trade turnover. The RoK is also in negotiations with Indonesia on a Comprehensive Economic Partnership Agreement (CEPA), which is equivalent to a free trade agreement. According to the RoK Trade Ministry, the two countries held their first round of free trade talks in Jakarta last week. If the bilateral free trade pacts with Vietnam and Indonesia are sealed, Korean exports to both ions will increase, said a ministry official. The RoK has a general FTA with the 10-member ASEAN bloc that includes Indonesia and Vietnam but it has also been seeking bilateral pacts with some ASEAN members to boost trade cooperation in the region.

Vietnamese stocks may rise from the end of the current quarter as economic growth recovers and boosts corporate earnings, Finance Minister Vuong Dinh Hue said. “Companies’ performance should improve by that time, bolstered by a domestic macroeconomic recovery,” Hue said in an interview on Saturday after a conference in Ho Chi Minh City. Vietnam needs to spur investor confidence by improving the transparency of corporate earnings, particularly among state-owned enterprises, he also said. A finance ministry proposal that state companies publish audited results is awaiting approval from the prime minister, Hue said. Vietnam’s economy expanded less than 5 percent for the second straight quarter in the three months through June from a year earlier. The VN Index of stocks has declined about 14.6 percent since a recent high in May.

Two-way trade between Vietnam and India achieved US$1.85 billion in the first half of this year, according to the Vietnam General Department of Customs. Notably, bilateral trade deficit fell 45 percent compared to the same period last year to US$335 million. Of the 23 types of goods Vietnam exports to India, 14 have recorded high growth in volume, including rubber, computers, electronic products, chemicals, and cell phones. Agricultural products also continue to show increased export volumes. Vietnam imports 33 items from India, of which 17 reported considerable growth. The value of imported maize increased 88 percent to US$192 million. Cattle feed imports showed a sharp decrease to only US$172.2 million, down 48 percent against the same period in 2011.

Cocoa products from the southern province of Ba Ria-Vung Tau have been granted a second UTZ Certificate recognizing their global standard quality. The UTZ Certificate certifies agricultural products that meet international quality standards and other requirements such as Good Agricultural Practices (GAP), environmental protection, social security and traceable origins. This represents an important milestone for increasing the value of Vietnamese farm products and will help improve farmers’ incomes and promote sustainable agricultural development. More than 700 households in Tan Thanh and Chau Duc districts of Ba Ria-Vung Tau province with hundreds of hectares under cocoa cultivation are currently registered for the UTZ certification.

A delegation from Long An province will take part in a trade fair in Phnom Penh, Cambodia from July 26-31. Members of the delegation include representatives from the provincial Departments of Industry and Trade, and Planning and Investment as well as 20 local businesses. The enterprises hope to learn more about the investment environment in Cambodia and promote their products in the local market. A seminar on trade and investment promotion will be held during the trade fair, offering Long An a good chance to introduce its potential and advantages. Business representatives in the Vietnamese delegation will be conducting a survey on suitable places to plant rubber and cashew in Cambodia. The visit aims to create favorable conditions for businesses from Long An province to seek opportunities for cooperation with Cambodia.

The southern province of Kien Giang had been encouraging domestic and foreign investors to pump investment into its 131 prioritized projects, the local authorities have said. These projects, worth from VND20 billion (over US$950,000) to VND1 trillion ($47.6 million), include a 10,000-ha aquaculture project in Kien Luong District, infrastructure constructions in Tac Cau Industrial Zone and Tac Cau fish port in Chau Thanh District, and the expansion of U Minh Thuong Road. The province is also calling for investment in other sectors such as technology used in the agriculture and seafood industries, electronics, machinery and engineering, ship building, garments and textiles, construction materials, handicrafts and footwear.

A delegation led by Chairman of the Danang Municipal People’s Committee, Van Huu Chien, has paid a working visit to US cities to promote investment and cooperative opportunities. At a conference in Houston, Texas, Chien introduced Vietnam’s preferential policies to attract more investors operating in high-tech industries. Danang hopes to see more US companies invest in the city, especially in its information technology park, he said. Chairman Chien later met with Houston Mayor Annis Parker and signed a letter of intent to make Danang and Houston sister cities. Houston is the US fourth biggest city with a population of more than 2.1 million and a total GDP of nearly US$400 billion per year. Besides Houston and Texas, the delegation also worked with businesses and agencies in California, San Francisco, Washington and New York.

The municipal People’s Committee has been advised to revoke the Can Tho oil refinery project with a registered capital of US$538 million as investors have failed to develop it after repeated extensions. Licensed in May 2008, the project is a joint venture between Vietnam’s Vien Dong Investment and Trade Co and the US-based Semtech Limited, with the Vietnamese company owning 30% of the holdings. In July 2009, the developer asked to adjust the refinery’s area down to 50ha from the projected 250ha in the city’s O Mon District, with an accompanying investment capital of $350 million. This move was attributable to the investor’s decision to revise its production line and technology after its fact finding tour overseas. Despite the municipal People’s Committee’s approval to slash the refinery’s area, the investors, however, have yet to pay in advance money used for land clearance compensation, estimated to cost VND150 billion ($7.1 million).

Foster Electric Vietnam Co Ltd, a subsidiary of the Japanese-based Foster Group, inaugurated a factory to manufacture mobile components at Vinh Hoa – Hung Nam Industrial Zone, Go Quao District, in southern Kien Giang Province on Tuesday. The factory, the first of its kind in Kien Giang has a total investment capital of more than VND12 billion (US$570,000). It has completed the first phase, including an assembly of the components with an area of 7,000sq.m and an annual capacity of one million products. It is expected to increase capacity to two million products per year in the second phase.

Texhong Textile Group of China started the construction of its fiber plant in the Hai Yen Industrial Zone, Mong Cai City, in the northern Quang Ninh Province on Tuesday. The project, the first and the biggest FDI (foreign direct investment) project so far in the province, is being carried out in an area of over 40ha, with the total investment capital of US$300 million. Its annual production capacity is expected to reach around 140,000 tons, with 92,000 tons per year for the first and second phases and 46,000 tons per year in the third phase. The plant is scheduled to officially come into operation in the third quarter of 2013.

(Source:Agencies)

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