Vietnam Industrial Parks InfoGate ! Industrial Zones ! Export Processing Zones ! Business in brief 18 Dec 2012

Coffee exports in the past 11 months reached 1.56 million tons and fetched around US$3.34 billion, according to the Vietnam Customs. They increased by 42.1 percent in volume and 37.7 percent in value compared to same period last year. The Vietnam Coffee and Cocoa Association said coffee output in the 2012-2013 crop is forecast to decrease 30 percent, and only half has been harvested so far. The price of coffee in the country has dropped in recent times. On December 7, it stood at VND38,200-38,300 per kilo in the central highlands but at VND39,000 per kilo in other localities. One week later, it dropped by VND300-400 per kilo. The average export price of coffee in November alone was down 3.46 percent over October to just US$2.148 per tons.

Opportunities for boosting Vietnam-Switzerland cooperation in economics, trade, investment, education, science-technology and tourism were recently discussed at a workshop in Switzerland. Trade Councilor Luong Manh Hung said Vietnam has achieved an economic growth rate of 5.2 percent and its GDP per capita income has reached US$1,540 in 2012. The country has invested US$15 billion in 738 projects overseas, and attracted nearly US$213 billion in registered investment capital from 14,364 projects. Vietnam and Switzerland have signed a number of memorandums of understanding on cooperation in education, finance and banking. Switzerland ranks 19^th among foreign investors in Vietnam, injecting nearly US$2 billion into 91 projects. The capital value remains modest compared to the European nation’s economic power, which is expected to gross US$700 billion in GDP in 2012.

An investment promotion conference was held HCM City on December 17 to attract more investors to the Central Highland province of Lam Dong. Present were more than 100 Vietnamese and Japanese businesses. Chairman of the Lam Dong provincial People’s Committee, Nguyen Xuan Tien, spoke of incentive policies for investors, especially those operating in vocational training, high technology, food processing, and tourism services. He pledged to continue upgrading infrastructure, simplifying administrative procedures and dealing with site clearance problems in order to provide the best possible conditions for investors. With a total population of 1.2 million, the province has an abundant supply of labor to provide more than 15,000 skilled workers a year. Lam Dong province plays an important role in connecting the Central Highland region to key economic hubs in southern and central coastal provinces.

Japan’s Kyocera Corporation is seeking support from the Ministry of Industry and Trade for tax incentives granted to a supporting industry enterprise. Vietnam Kyocera Company recently sent a proposal to the MoIT saying that its manufacturing project in Hung Yen province should be recognized as a supporting industry enterprise, given that its products are surface mount devices (SMD). SMD is a necessary component product for phones, household appliances, audiovisual appliances, all-purpose computers, fine ceramics or micro-electronics. In the document sent to the MoIT, Kyocera said SMD products “is appropriate to the list of electronic components and microchips for development of peripheral devices of computers, household appliances, audiovisual appliances, solar cells” regulated by the Vietnamese government. Therefore, Kyocera proposed that it should enjoy 10% corporate income tax in the first 15 years. The company will also enjoy tax exemption in its first four years of operation and pay half of this 10% rate in the following nine years.

The Trans-Pacific Partnership agreement would sharply increase the exports of apparels from Vietnam to the US. Vietnam annually exports about US$ 7.6 billion worth of clothing items to the US. If the country maintains its present growth rate, its exports would touch US$13 billion by 2020. But the TPP has the potential to take this figure to US$22 billion, Le Quoc An, Senior Advisor to the Vietnam Textile and Apparel Association (VITAS) told VietNamNet Bridge. A core issue of negotiation is the ‘yarn forward’ principle, put forward by the US. The principle, if approved, would require Vietnam to make its garments from raw materials made in Vietnam or the TPP countries in order to enjoy zero preferential tariffs on its garment exports to the US. At present, Vietnam depends on China, Taiwan and South Korea, to a great extent, for its raw material imports. Hence, the implementation of yarn-forward principle in the TPP would attract entrepreneurs to invest in Vietnamese textile industry for manufacturing materials that would be used for production of garments meant for export to the US at zero-tariff.

Hanel, DOJI and N&G started construction of the US$1 billion Hanoi South Supporting Industrial Park (Hanssip) in the capital city’s Phu Xuyen District on December 17. The 600-ha zone, designed by Japan’s Nippon-Koei Group, aims to attract investment into support industries in such areas as mechanism and automation, electronics, chemical substances, footwear and garments and textiles. The park will include trade centers, banks and schools and provide logistical and healthcare services. The developers said they expected to draw about 200 investors and generate 30,000 jobs for residents in Hanoi and neighboring provinces. The three developers signed a strategic cooperation agreement to build the industrial park on March 19, with sponsorship from the Vietnam Chamber of Commerce and Industry (VCCI).

VietJetAir inaugurated its HCM City - Phu Quoc island route last Saturday, the budget carrier’s ninth domestic route. The airline said that it would operate an Airbus A320, capable of carrying up to 180 passengers, on its daily flight between HCM City and Phu Quoc.

Vice President of Lacoste Corporation (France) Francois Meauze visited central Quang Nam province to look for investment opportunities. The company hopes to open a processing branch and consumer market there. Lacoste is a French apparel company founded in 1933 that sells high-end clothing, footwear, perfume, leather goods, watches and eyewear.

According to Ministry of Agriculture and Rural Development, Vietnam will need to import roughly 2.5 million tons of fertilizer with a turnover of US$960 million next year. These include around 850,000 tons of nitrogenous SA, 570,000 tons of potassium diammonium phosphate (DAP), 950,000 tons of potassium and 100,000 tons of NPK (nitrogen, phosphorus and potassium). The country’s demand for fertilizer next year is estimated to reach 10.3 million tons.

Matsumura Electronics Industry Vietnam has opened an electronic circuit factory in the southern province of Binh Duong. The factory was built on a 1.5 ha area in My Phuoc 3 Industrial Park, with invested capital of US$6.5 million. The factory produces electronic circuits for use in family equipment and machinery. These products will be exported to Japan and other Asian countries.

State-owned telecommunications giant VNPT Group yesterday announced that it has decommissioned all pay phones nationwide due to a slump in demand. VNPT began providing the service in 1997, and the number of telephone boxes around the country subsequently rose to about 11,000. However, demand for the service has gradually decreased with the growing popularity of mobile phone services. VNPT is considering using the pay phone sites as wifi hotspots. The country’s oldest telecom also stopped providing dial-up internet services in June of this year.