Vietnamese projects get thumbs up in Cambodia

The Cambodian government will grant licences to five projects invested by Vietnamese investors with total investment capital of $1 billion.

The commitment was made via seven memorandum of understandings signed between Cambodian and Vietnamese government agencies at the second Investment Promotion to Cambodia Conference held in Phnom Penh on April 24.

The projects comprise Lower SeSan II hydro-electronic project developed by the EVN International, an iron ore exploration project developed by Hoang Anh Ratanakiri Company, a cassava flavour production factory, a refined sugar production factory developed by International Star Company and a plantation developed by Hoang Anh Oyadav Company.

There were around 165 enterprises participating in the conference including 94 Vietnamese enterprises. According to a report from Vietnam’s Foreign Investment Agency, Cambodia ranked the second investment destination of Vietnamese investors with 87 projects and $1.9 billion as of February 28, this year.

The first Investment Promotion to Cambodia Conference was held in Ho Chi Minh City in December 2009, raising Vietnamese investors’ interest in Cambodia. At that time, Cambodian and Vietnamese government agencies signed a memorandum of understanding on cooperation to support exploration and exploitation of a bauxite mine in MoldulKiri, next to Vietnam’s Central Highlands’ Dak Nong province, home to Vietnam’s first alumina project. The Cambodia’s Ministry of Industry, Mines and Energy also signed an agreement on exploration and exploitation and granting licence to the joint venture of alumina exploitation (Cambodia - Vietnam) in December, 2009.

The memorandum paved the way for Vinacomin and Cambodia’s Nadaco in cooperation with BIDV to produce 1.5 million tonnes of alumina in the first stage with total investment capital of $2.5 billion and 2.5 million tonnes in the second stage with investment capital of $3.5 billion.

BIDV chairman Tran Bac Ha said Vietnam’s large corporations wereng implementing their investment in Cambodia in sectors such as finance, banks and insurance, telecom, air carriers, agriculture, energy and mines.

Wrapping up the paper market

Saigon Paper Joint Stock Company is set to finalise installation and start operating three new production lines at the My Xuan II paper factory.

My Xuan II factory reportedly employs cutting-edge production lines imported from Australia, Spain, the US and France with a production capacity of 35,000 tonnes of paper products, 52,500 tonnes of chalky-surfaced paper and 140,000 tonnes of carton packaging per year.

Besides, the factory operates a waste-water treatment plant with a daily capacity of 17,000 cubic metres.

Construction of My Xuan II factory kicked-off in 2007 at My Xuan A industrial zone in southern Ba Ria-Vung Tau province’s Tan Thanh district.

The project costs VND2 trillion ($96.6 million), of which VND400 billion ($19.3 million) was injected into building the waste-water treatment facility, said company director Cao Tien Vi.

Saigon Paper currently produces paper at its My Xuan I factory. After the My Xuan II paper factor going online in late 2011, the company’s production capacity will be triple current capacity.

The firm supplies the market with both common-use paper products and industrial packaging and it has exported products to different markets in Asia, America, Africa and Australia.

Japan has recently joined the company’s export markets as the company shipped its first batch of products to this market on April 18 and further shipments will follow in the following months.

In its development vision towards 2015, Saigon Paper is set to achieve revenue of VND4 trillion ($193.2 million) by 2015, six-fold increase over 2010’s, hold 40 per cent market share of common-use paper products and 15 per cent of industrial packaging by that same year.

In 2010, the firm reaped revenue of VND725 billion ($35 million), up 24 per cent over 2009.

VN leading fertilizer producer to expand agri-business in Cambodia

PetroVietnam Fertilizer & Chemicals Corporation (PVFCCo), a major fertilizer manufacturer in Vietnam, announced Saturday plans to expand its agricultural technical transfer programs for Cambodian farmers in at least three more provinces over the coming year.

“In 2011, PVFCCo intends to maintain its leading position in the domestic market while expanding its activities abroad. In Cambodia, we are particularly keen to continue implementing our programs while improving our image and position in the local market,” said Mr. Nguyen Hong Vinh, PVFCCo’s vice president for sales and distribution.

He was speaking at an announcement ceremony in the Cambodian capital Phnom Penh.

The manufacturer, which shares almost 50 per cent of the domestic demand for urea, opened its Phnom Penh representative office in May last year.

PVFCCo has since then launched agricultural technical transfer programs for local rice farmers. Numerous workshops have been held and demonstration plots established in several provinces such as Battambang, Kompong Chhnang and Takeo.

Mr. Vinh said PVFCCo would continue to expand such technical transfer programs to farmers in Kompong Cham, Kompong Thom and Kandal provinces.

“Besides the domestic market, PVFCCo has been trying to establish positions in other regional countries. Cambodia is our top priority thanks to its close geographic location, economic structure and cultural attitudes,” he added.

In addition to training Cambodian farmers, PVFCCo donated 50 tons of urea to poor farmers in Svay Rieng and Prey Veng provinces last year. The company also donated $25,000 to the families of victims of the Diamond Island Bridge stampede tragedy last November that killed almost 350 people.

PVFCCo enjoyed a successful year in 2010 with impressive business results.

At its annual meeting of shareholders in HCM City on April 8, the company announced an after-tax profit of 1,703 billion dong ($82 million) for 2010 which was 84 per cent higher than forecast by the company. Sales came to 6,999 billion dong ($337 million) in the same period. During the year, PVFCCo produced 807,000 tons of urea which was 9 per cent above the company’s forecast and more than 10 per cent higher than average production in recent years.

Him Lam, Posco E&C clinch condo development deal

Him Lam Corporation and Posco E&C Vietnam entered into their first property business cooperation deal on Saturday by developing a luxury condo project in HCMC’s District 7.

In the VND264 billion deal, the Korean construction company Posco E&C Vietnam will start building the Him Lam Riverside apartment project from early June this year.

The Him Lam Riverside, which is located in Him Lam Kenh Te new urban area, will have three 19-25 storey blocks with 348 high-end apartments.

Tran Van Tinh, general director of Him Lam Corp, said the company had reached some construction companies before selecting Posco E&C Vietnam for its quality construction.

Posco in collaboration with other companies has developed some property projects such as Diamond Plaza in HCMC, Charm Plaza in Binh Duong Province, Watermark condo project in Hanoi, and an office and commercial building in Hanoi.

As planned, the Him Lam Riverside apartment project will be completed by February 2013.

France’s Bouchet: SBV on the right track

Professor Michel Henry Bouchet, an experienced French expert in international banking and especially in country risk assessment, has lauded the latest moves taken by the State Bank of Vietnam (SBV) to cope with outstanding economic problems.

At a conference on Corporate Management of Foreign Exchange organized by CFVG management school and the French Chamber of Commerce and Industry in HCMC last week, Bouchet said the central bank’s measures had helped cut excessive consumption, reduce money secretion, stabilize the gold price, and encourage people to shift from depositing the dollar to dong.

He, however, said the measures had yet to tackle the root cause of the overheating economy in Vietnam. “Because the root, the overheating economy, comes from a long time ago, from the last five years. When you had credit growth from 25% to 28% per year, you have to deal with excess money supply on Monday in Vietnam. So the central bank’s current regulations are a good signal that it is tackling the problem but that will take time to produce results,” he said.

Speaking to local media on the sidelines of the conference, Professor Bouchet said foreign exchange management was one of the policy tools that the central bank could use but it was not enough to fix the dong shrinkage. “You have to decrease the pressure on the dong and the pressure of the dong comes from basically excessive demand in the economy. Rising inflation is putting pressure on the exchange rate.”

That Vietnam has recently been downgraded by international credit ratings agencies will leave an impact on foreign institutional investors because they heed their project analysis and the country’s perception by the rating agencies as well, he said.

According to Bouchet, the IMF and the World Bank’s view of Vietnam’s macro economy by the end of last year was fragile market stability due to confusion over the Government’s policy intensions, increased macro economy risks given credit boom and asset price bubble, high inflation, downward pressure on the local currency, and deteriorating debt profile.

Vietnam’s long-term challenges, he noted, will require immediate policy actions of mobilizing long-term financing for current accounts, sharing more equitably social benefits of economic growth, and improving transparency and governance.

Bouchet is head of SKEMA Business School’s Global Finance Center, and strategy director of North Sea Global Equity Management Fund. He has strong previous experiences at France’s Prime Minister Office, the World Bank, and the Institute of International Finance in Washington D.C.

Jan-Apr garment exports fetch US$3.6 billion

Vietnam obtains an estimated US$3.6 billion from exports of textile and apparel products in the January-April period, a robust year-on-year growth rate of 28%, an industry source said.

Le Tien Truong, deputy general director of the Vietnam National Textile and Garment Group (Vinatex), told the Daily on Monday that the strong performance of the industry in the first four months would help the country realize its target of attaining US$13 billion in export value this year, 18% higher than last year.

Truong attributed the success to decent demands in key markets such as the U.S., Europe and Japan, which help ensure stable production for local enterprises.

Last year, Vietnam shipped US$6 billion worth of textile and garment products to the U.S., up 22%, some US$1.8 billion to European countries, up 14%, and US$1.2 billion to Japan, up 20%. The industry obtained total export revenue of US$11.2 billion last year.

Moody’s: Vietnam outlook negative

Moody’s on Wednesday issued a report putting a negative outlook on Vietnam’s B1 rating, reflecting concerns about the sustainability of the country’s balance of payments despite the Government’s recent macroeconomic stabilization moves.

The international credit rating agency’s annual sovereign report on Vietnam provides an updated analysis on the rating and does not constitute a rating action.

The report notes Vietnam’s B1 foreign currency and local currency ratings were derived from a methodological assessment of low economic resilience and low financial robustness.

Strong growth over the past decade has led to large developmental gains, but has not been matched by improvements in institutional quality, in comparison to the country’s rating peers, Moody’s said on its website.

Vietnam’s fiscal and debt metrics are still well-positioned compared to those of its rating peers, but risk has risen as a result of inconsistent macroeconomic policies that have not sufficiently addressed overheating pressures. Moreover, the deterioration in Vietnam’s external payments position, coupled with an unfavorable outlook for contingent liabilities, is pressuring the rating downward.

A change in the rating outlook to stable will depend largely on the success of the Government’s recent tightening measures in arresting inflationary pressures and containing exchange rate volatility. However, if the already low level of foreign exchange reserves were to erode further, the rating would be subject to additional downward pressure, Moody’s said.

Retailer trademarks seen popular, says expert

The local market will see more products under retailers’ trademarks and they will soon become essential commodities to consumers, said BigC Vietnam general director Pascal Billaud.

For every four products in supermarkets, we will see one become a product of retailers within the next three years. The figures will be one from two within the next six or seven years, Billaud said at a seminar on new product competitiveness in HCMC last week.

The products will play an important role in retailers’ future growth due to having distinctions and meeting demands of consumers. Retailers should set up plans for developing the products to catch up with increasing consumer needs, he added.

Many retailers such as Metro, Saigon Co.op and BigC in recent years have developed their own trademarks, mainly for cooking and cosmetics products. The products are 5% to 30% cheaper than other similar goods.

Saigon Co.op has 500 out of 20,000 products under its brands while BigC has 250. Lotte has also launched its own brands for customers.

High price pushes back rice purchase tempo

High paddy prices in the Mekong Delta after the winter-spring harvest have pushed back traders’ rice purchase tempo, though exporters are getting closer to the delivery time.

Nguyen Van Thong, owner of the rice processing plant Hiep Trung Thong in Tien Giang Province, told the Daily rice trading since last week has slowed down considerably due to a sharp rise in paddy prices.

“Many exporters have declined to buy and waited for the price to drop,” he said.

In the Mekong Delta, unmilled rice price has increased to some VND6,200 a kilo, or some 30 U.S. cents, up 2 cents per kilo against two weeks ago.

Nguyen Thi Le Hang, director of a private enterprise named Phu Cuong in Can Tho City, told the Daily that she had to delay her planned purchase of 1,500 tons of 15%-broken rice for delivery to the Philippines due to the high prices.

“Prices of second-grade, milled rice of the 15%- and 25%-borken types are standing at above 38 U.S. cents per kilo. We can hardly make any profit from such a high price,” she said.

Hang is among a few private entrepreneurs allocated quotas from the Vietnam Food Association (VFA) to ship rice to Indonesia and the Philippines at the beginning of this month. Most of them are waiting for prices to drop before making purchases.

According to her, only State-owned rice exporters entrusted by VFA to purchase rice for stocking in early March can make a profit as they’ve purchased rice when prices were still low.

Harvest of the Mekong Delta’s winter-spring crop has come to an end, with the output rising an expected 5% to 10.4 million tons.

Recently, Vietnam has won bids for shipping 200,000 tons of low-grade rice to the Philippines as the world’s biggest importer. Nevertheless, many exporters would incur losses with the average selling price of US$480 per ton, if they don’t have enough rice in stockpile and have to buy materials at the current prices, said Pham Quang Dieu, chief economist of the market research firm Agromonitor.

Last week, Vietnam’s rice price for the first time has exceeded Thailand’s price for the high-grade 5% broken rice, at between US$480 and US$490 per ton for the former compared to between US$475 and US$480 per ton for the latter. The uptrend has continued this week when the export rice price, free on board, gained an additional US$10 per ton.

According to Dieu of Agromonitor, the rise in Vietnam rice price against Thai prices has made it more difficult for local exporters to attract Philippine buyers in the coming time when the Philippines’s food administrative body NFA opens bids for importing an additional 187,000 tons of rice.

According to VFA, the country has so far exported 2.1 million tons of rice valued at more than US$1 billion.

Tenders invited for first land lot in Thu Thiem

Thu Thiem Investment and Construction Authority (Thu Thiem ICA) has invited tenders for the first land lot in the Thu Thiem New Urban Area underway in HCMC’s District 2.

This 23,000-square-meter lot will be used to develop a multipurpose property project with a maximum height of 12 storeys, Trang Bao Son, deputy head of Thu Thiem ICA, told a news briefing last week.

This piece of land is part of a multipurpose section along the East-West Highway in the new urban area. Around 80% of it will be for office space, 10% for commercial services and the remainder for housing.

Son said the winning investor would be required to pay a one-off land-use fee or rent when the city government issued a decision on land allocation or leasing. However, the price of the lot has yet to be announced pending an assessment by relevant authorities.

Speaking at the project presentation, representatives of some real estate companies suggested the city consider applying an installment plan for land use fee payment rather than a one-off payment.

Paying by installment will help ease the financial burden on property companies, especially at a time when they are finding it increasingly hard to gain access to bank loans.

They also asked the city to rethink the percentage of land for residential development since 10% is too low.

Some others expressed concerns over whether technical infrastructure and other facilities around the lot would keep pace with the project development; otherwise, it would become a stand-alone project in the area when in place.

Explaining the reason for choosing this lot for the first bidding, Thu Thiem ICA said the lot was located along a highway where technical infrastructure such as electricity and running water had been developed to support the future development.

Son said Thu Thiem ICA would field suggestions from companies before it asked the city government to weigh adjusting the land use fee payment method and revising the percentage of land for residential development.

Thu Thiem ICA will also ask the city to announce the land price soon so as to pave the way for the tender to proceed, he said.

In a recently revised plan, Thu Thiem New Urban Area covers 657 hectares and has total gross floor space of 7.7 million square meters. The future town will accommodate 160,000 residents, 450,000 workers per day, and one million visitors each day.

Hanoi to see strong apartment supply

The Hanoi residential market will soon see new apartment supply surging four times over last year, offering more opportunities for investors and homebuyers to hunt for bargains, property services provider Colliers Vietnam said in its latest quarterly report.

The report says the new supply in the first quarter came mainly from the western districts of the capital, with 28% from Ha Dong, 29% from Thanh Xuan and 14% from Tu Liem.

Mid- and high-end apartments accounted for 45% and 32% respectively of the total supply. The remaining segment was low-cost apartments. However, the latter segment recorded a better performance than the former two.

Housing prices at all segments in the first quarter picked up 3% to 10% against the previous quarter.

According to Colliers, the total supply of apartments in Hanoi’s market at the moment is around 45,000 units, and an estimated 11,000 new apartments will be launched on the market in the coming time. As of 2014, the Hanoi residential market will have some 111,000 apartments.

The company projected developers would continue to focus on the mid- and high-end segments in the next three years.

Inflation, credit tightening and increasing supply have yet to cool down Hanoi’s feverish property market, which has been mostly driven by speculators and short-term investors who are ready to place their bets on risks.

ASUS cuts computer distribution deal with FPT

ASUS Technology Pte. Limited has signed a cooperation agreement with FPT Distribution to spur its computer sales in the domestic market.

FPT Distribution, a member of FPT Trading Group, will distribute ASUS products such as laptops, netbooks and tablets via its current 400 dealers nationwide.

Vo Thi Hoang Quan, general director of FPT Distribution, said ASUS products would be available in the FPT distribution system early next week.

This is a long-term cooperation relationship which will help ASUS boost sales in HCMC and Hanoi as well as other parts of the country, Jeff Lo, country manager of ASUS Vietnam, told at a signing ceremony in HCMC on Tuesday.

FPT Distribution will also provide warranty services for ASUS laptops at its four new service centers in Hanoi, HCMC, Danang and Can Tho. The Taiwan firm will also open 13 to 15 service centers here in the country this year, said Lo.

ASUS plans to introduce a full range of its new products in Vietnam, including Eee Pad Transformer, in the second quarter of this year.

ASUS entered Vietnam’s market three years ago and is now the fourth largest laptop vendor in Vietnam. The company is looking at the third position.

FPT Distribution is in distribution partnership with more than 60 IT equipment manufacturers, including Acer, Dell, IBM, Lenovo, HP, Toshiba, Apple, Samsung, Microsoft, Oracle, Cisco, APC, WD, AsRock, GigaByte and Foxconn.