Renovation of State-run enterprises needs a breakthrough

13:35' 01/05/2008 (GMT+7)

- Vietnamese State-run enterprises, economic groups and corporations need reforms to become more effective and competitive, said Deputy Prime Minister Nguyen Sinh Hung. At a recent conference on renovating the completely state-owned enterprises, it was reported that in 2007, 271 enterprises were reshuffled, raising the number of enterprises of this kind to more than 5,300, including nearly 4,000 equitised enterprises. Reports from over 1,600 enterprises that have been equitised for more than one year show that there have been considerable increases in their registered capital, revenues, profits, contributions to the state budget, workers’ incomes and dividends. However, up to 109 enterprises (or 7.1 percent of the total) have suffered losses. In the 2007-2010 period, more than 1,500 enterprises need to be reformed but only 271 have been reshuffled, accounting for one fifths of the set target. The ministries and sectors have attributed this situation to the fact that most of target enterprises are in the public sector, facing limited capital and concerning land and financial problems. Phi Thai Binh, Vice Chairman of the Hanoi city People’s Committee, said equitisation policies have led to new issues relating to land prices. Reports also say that as much as nearly VND500,000 billion has been mobilized by firms themselves, which helps eased the burden on the state. In fact, a number of corporations have high financial liability, such as the transport construction companies, the Vietnam Shipbuilding Industry Group (Vinashin) and the Vietnam Machinery Erection Corporation (Lilama). This may pose a risk to payment and reduce the efficiency of investment due to a large volume of bank’s interest rates. It’s worth noting that pouring financial sources and getting involved in the stock market have become quite popular. Vinashin alone invested up to VND3,323 billion (1.1 time higher than its asset) into securities trading, banking, insurance and real estate sectors. Obviously, this group spent its loans on these activities. According to Vinashin General Director Pham Thanh Binh, since the group’s establishment, its total assets have now increased to VND80,000 billion from only VND200 billion 12 years ago, while its revenue rose from VND100 billion at the beginning up to VND40,000 billion at present. The group’s liability is currently estimated at nearly VND50,000 billion, he added. Explaining why Vinaship spent a large amount of money on other sectors, Mr Binh said that it is impossible to make profits from the shipbuilding sector in a short period of time as it is a heavy industry. Therefore, the group must think of other way to earn money in the immediate period by investing in high-income sectors such as banking and insurance in order to serve its long-term strategy. However, he said this type of investment is banned by the Government. In addition, the restructuring of agro-forestry farms is also facing many difficulties. Central Highland Dak Lak province planned to restructured and renewed eight agro-forestry farms. Up to now, only one of these farms has been restructured as most of them are suffering losses and seeking loans from banks. Speaking at the conference, Deputy Prime Minister Nguyen Sinh Hung highly valued achievements of equitised businesses thanks to increases in revenue, profits, labour force and investment capacity. This has demonstrated the correctness of the Party and State’s policies and businesses should persist with the equitisation process. Mr Hung also asked businesses, sectors and localities to review and boost the restructuring and renewing of State-owned enterprises so as to complete the etuitisation process by 2010. For State-owned agro-forestry farms, the Government has not yet mapped out equitisation plans, but will restructure and renew them, the Deputy PM added.

Standard Chartered advises exchange-rate caution

VietNamNet Bridge - Vietnam should ensure the exchange rate for the dong is balanced against the need to reduce its burgeoning trade deficit, warns Standard Chartered Bank in its latest report. "We expect the USD/VND to move sideways in coming months until the trade deficit situation improves," the bank’s senior Southeast Asian researcher, Tai Hui, writes in the report. The economist forecasts a USD/VND surge to 16,500, or a 2.35 per cent depreciation of the dong, by the end of this year. Depreciation of the dong could be expected to make imports more expensive and so prevent a balance of payments crisis amid the priority effort to defeat inflation. But an Economic Management Institute senior economist told Viet Nam News that devaluation of the dong was unlikely to reduce the import bill. Viet Nam had to buy refined petroleum, fertiliser, construction materials, and spare parts to maintain and develop its economy, he said. As a developing country, it could not reduce its demand for these imports. Viet Nam’s first-quarter trade deficit grew by an astonishing 66 per cent to US$7.4 billion against the three months of last year. Oil, steel and capital goods were responsible for the jump. The growth in exports was 23.3 per cent. Standard Chartered warns that any sharp reversal in capital inflow could make Viet Nam – with its modest foreign exchange reserves of about $20-25 billion – vulnerable to an external payment crisis. Any weakening of the dong will be similar to China’s action to help reduce its trade deficit of late 1993 and early 1994, the report says. "This is an extreme measure and would cause significant volatility in the economy," says Tai Hui. Catch-22 The trade deficit is a catch 22 for the Viet Nam Government. A weakened dong might narrow the widening trade deficit and prevent an external payment crisis with any sharp reversal of capital inflows. But a strong dong is needed to curb the price of imports and control inflation. Year-on-year inflation was at 21.42 per cent for April against a year-on-year increase of 19.39 per cent for March. The Standard Chartered report argues that while exchange-rate policy is used as the first defence against inflation in many countries, in Viet Nam the central bank uses it to signal intent rather than to control commercial lending rates. The bank believes that the exchange rate is no longer an exclusive tool to fight inflation. It says further hikes in the base interest rate and bank reserve requirements; an open market with strict investment management; higher agricultural output and stabilised prices for primary commodities such as food, petroleum, medicines, steel and fertiliser was likely to be more effective.

Open policy promises positive changes in human resource development

22:56' 01/05/2008 (GMT+7)

VietNamNet Bridge - The Vietnamese Government’s decision to abolish its previous decree to cap the foreign workforce at 3 percent at businesses is considered as a move aiming at creating a new generation of managers in Vietnam. As the country is facing a serious shortage of managers of medium and high level, it is necessary to take a policy wide open for foreign experts, Walter Blocker, CEO of Gannon Co. said. Those Vietnamese who are holding high-level posts at enterprises had been either trained or worked at foreign firms for periods. Hence, the open policy for foreign managers will help improve the quality of local experts, Blocker elaborated. Sharing the same view with Walter Blocker, Phan Thi Thuy Duong, an expert of Pricewaterhouse Cooper in Vietnam , said the lifting of the three-percent cap on foreign workforce will enable enterprises to be more active in their human resource strategy. The new policy provides enterprises with more chances in recruiting their employees in the context that many local job-seekers are not qualified enough, and eases the shortage of managers in some sectors, pundits said. Regarding the worry about a possible wave of foreign managers seeking jobs in Vietnam in the near future, Doan Mau Diep, Director of the Labour and Social Institute under the Ministry of Labour, War Invalids and Social Affairs, pointed out the fact that enterprises always prefer local employees due to their deep understanding of the local culture, their relations at their native country as well as low cost. At the same time, enterprises are working out long-term strategy for local personnel development with the hope in the future, these well-trained people will fill almost all the posts previously held by foreigners. “A Vietnamese, who was trained in a multi-cultural and modern environment to get good work skills is a dream of many enterprises, an expert said. According to the website vietnamworks.com, foreign workers recruited by Vietnamese enterprises in the first quarter this year increased 67 percent compared against late 2007. This trend is forecast to continue in the coming time.

Danang faces glut of homes

23:32' 01/05/2008 (GMT+7)

VietNamNet Bridge - Concerns have been raised over the possible sales glut of homes in Danang as developers flock to the central city. Although local authorities and developers claim the future is bright for real estate development in the city, which is the economic spearhead of the central Vietnam, some industry insiders point out demand remains modest while the market is in danger of being oversupplied. “With so many projects planned for Danang it is a big question of how to sell,” said Nguyen Quang Ninh, business development director of Indochina Land, the real estate division of Indochina Capital. Ninh is concerned over developers building a dozen of residential, hotel, office and new townships in Danang at a time when sales of other properties are slow. VinaCapital has broken ground for construction of a 9-hectare estate by the Han River, which will be completed in the next 10 years, featuring high-end apartments, hotels, offices, shopping mall and international school. The development cost is around $325 million. Korean firm Daewon is building two estates, including the $250 million Da Phuoc International City and $30 million Cantavil apartment complex. Local firms such as Vien Dong Land and Dong A Real Estate are building two large complexes downtown with investment capital of $180 million and $60 million respectively. Vu Chau Long Real Estate Joint Stock Company recently broke ground for construction of two properties costing some $235 million. Resorts under construction along the coast, include villas and apartments incorporated in resort such as Hyatt Regency, Raffles, Son Tra Resort and Spa and the second phase of Furama. Ninh said it would not be easy for these properties to sell as local demand for hotels, offices and apartments was still small, which was reflected through the sales of 95 apartments at the Indochina Riverside Towers. Sales of these condominiums have been slow over the last two years and the developers were only able to sell out all recently when the market heated up late last year and early last year. Only 20 per cent of customers are locals. Indochina Riverside Towers is the first condominium in Danang. The other, Danang Plaza at No.6 Nguyen Du street, is still under construction. Ninh said as demand was weak, it would be challenging for developers to pre-sell their properties and as a result, construction might be put on ice in case developers were not financially strong enough. There is also a lack of flights to bring tourists to Danang and local hoteliers are asking for more flights from South Korea and Hong Kong. “It will be very difficult for us to sell because demand is too weak,” said a developer, who is building a new township in the city. “However, we can not abandon the project because we have spent quite a lot on compensation and land clearance.” However, some others remain bullish over the future of Danang. Dam Quang Tuan, chairman of Investment and Construction Joint Stock Company 579 said Danang had potential to become a service and tourist hub of the Southeast Asia. “There is no adequate information to have an accurate assessment of local real estate market. But, I am confident Danang can be developed in the way Singapore has done,” said Tuan.

HCM City’s export value surges 34.6 percent

22:49' 01/05/2008 (GMT+7)

VietNamNet Bridge - Ho Chi Minh City ’s export value soared 34.6 percent to 7.48 billion USD in the first four months of the year. The rise was mainly fueled by increases in earnings from garment and textile, which raked in 1.08 billion USD, up 15 percent; footwear; 457 million USD, up 9.1 percent; and wooden furniture, 151 million USD, up 42.3 percent. Crude oil remained the spearhead export line of the city as it brought home 3.48 billion USD. Seafood was the only product experiencing a decline in exports. It grossed over 173 million USD in the period, a drop of 7.8 percent compared with the same time last year. Seafood producers explained that they have been affected by petroleum price hike, which cost them 15-20 percent more than the previous period. In the first four months, the country earned 18.26 billion USD, a surge of 24.6 percent over the same period last year.

BUSINESS IN BRIEF 1/5

23:18' 01/05/2008 (GMT+7)

Workshop on principles of success for high-ranking leaders opens in Hanoi A workshop on building business culture with emotion intelligence and self-control, with the participation of the famous lecturer Mike George, was launched on April 29, in Hanoi. The workshop titled “principles of success for high ranking leaders” was co-organized by the Trade and Business Information Center (TBIC), the Hanoi Young Business Association, Thai Ha Books and the UNESCO Center. Mike George, one of the five most famous lecturers in management in the world, taught in more than 30 countries and is the author of 8 bestseller books, translated in 15 languages. He shared his knowledge and skills with Vietnamese businesses and participants for better living and working. According to Mike George, good leaders in management can be summarized in six words or three abilities “create vision, inspire people, and make decisions”. Also on this occasion, Thai Ha Books will publish the books “The Pocket Book of Coolness” and “Know your true nature”, written by Mike George and sign a copyright contract for two more of his books named “Learn to relax” and “In the light of meditation”.Far more foreigners working in VietnamThe number of foreigners employed in Vietnam has soared by more than two-thirds in the past few months after the government dumped the restriction on how many foreigners a company could employ. By the end of March, according to www.vietnamwork.com, there were 67% more foreigners working for enterprises in Viet Nam compared to December. The trend is likely to continue now that employers can recruit as many foreigners as they wish. Understandably, the biggest centers of foreign recruitment are Ho Chi Minh City, Ha Noi and Da Nang in that order, above all for the stock market, the securities industry and the financial sector generally. City sees US$5 billion invested in business in first four months More than VND90, 000 billion (US$5 billion) was invested in business affairs by private companies in the first four months of 2008. With 6,400 newly established enterprises and 10,200 entrepreneurs increasing their investment capital for production expansion. It is projected that the development of Viet Nam’s socio-economy is not in bad situation, said the Chairman of the People’s Committee of HCMC, Le Hoang Quan. The speed of the increase of the price in April (accounting for 1.82 percent) is lower than March (1.92 percent). The highlights are increases of FDI and foodstuff, said Director of the Statistical Office of HCMC, Du Quang Nam. ”The city can not keep the price of construction materials including cement, steel and iron, but foodstuff, particularly rice is expected to slightly rise. The main reason is the increase in the price of petrol that has brought with it an increase in freight charge” said the Deputy Director of the Department of Trade in HCMC, Truong Trung Viet. The Government implemented many measures to control the speed of the increase in prices in April. The loser is the education industry and the gainers are the industries of transport, post, communication, and foodstuff. The city should apply the best preferential policies to all forms of investment and create the best conditions for investors and enterprises, and keep the speed of the GDP this year equal to last years (accounting for 12.6 percent), stressed the Chairman of the People’s Committee of HCMC, Le Hoang Quan. One-third of Vietnam companies want takeovers A recent global survey by the Grant Thornton Group has shown that about 30% of Viet Nam businesses plan expansions by buying other companies. The survey also says that only 3% of Viet Nam companies said they would sell their firms in the next three years. The result may mean quite a few companies in the country are seeing expansion opportunities ahead. However, the Grant Thornton survey says up to 44 percent of businesses worldwide have plans to buy other companies. They said takeover or merger was a strategic tool for expansion. Vietnam considered an attractive market for financial services companies Vietnam is becoming a more attractive destination for international financial services companies, said a chief executive of Western Union, one of the world leading money transfer companies based in the US. Vietnam is a market of great potential considering the 3.3 million Vietnamese living overseas now, Western Union President and Chief Executive Officer Christina Gold told Vietnamese Ambassador to the US Le Cong Phung during a recent banquet for the Vietnamese diplomatic mission at the Vail valley, Colorado. Over the last 14 years, Western Union has cooperated with 30 local banks to develop a network of more than 4,000 payment points in all the 64 cities and provinces in Vietnam. Production up 16.4 percent in four months Vietnam’s industrial production for April was valued at 54.988 trillion VND (3.43 billion USD), reports the General Statistics Office. This took the total value for the first four months to 215.5 trillion VND (13.5 billion USD), a year-on-year increase of 16.4 percent. The figure is slightly higher than the 16.3 percent of the first quarter and well above the National Assembly’s target of 5 percent. Industrial production value would have been higher but for a 4.3 percent fall in crude oil output. Total production was 5.2 million tonnes. Natural and liquefied gas production also fell. The highest growth – 16.8 percent - was in the foreign-invested sector which earned 5.7 billion USD. The value of non-State sector production increased by 22.1 percent (4.73 billion USD) and the State-owned by 7.9 percent (3.40 billion USD). High value goods such as passenger vehicles, tyres, tractors, processed aquaculture produce, garments and household appliances, including TV sets and washing machines, all recorded high growth. The value of coal, fertiliser, crude oil, natural and liquefied gas, cement, powdered milk, beer, glass, fabric and adult footwear fell against the same months of last year, say the statistics office. The value of industrial production was higher in Hai Duong, Binh Duong, Ha Tay and Dong Nai provinces as well as the cities of Hai Phong and Can Tho. But the figure for Hannoi, 15.2 percent, and Ho Chi Minh City , 14.6 percent was lower than the national average. Economic zone construction kicks off in Quang Tri Work started on a 950 billion VND economic zone in the central Quang Tri province on April 30. The economic zone, the second largest project in Quang Tri province in terms of investment capital, will accommodate a tourism-trade area, a vocational training area, a primary school, a sports area, clinics and kindergartens. The construction of the 63.63ha economic zone is scheduled for completion by 2013. Border economy master-plan targets friendship also Sustainable development, long-lasting friendship and political security with China, Laos and Cambodia are focus of a recent master-plan on border gate economy development until 2020. The scheme, that was approved by Prime Minister Nguyen Tan Dung on April 25, clarifies that there will be additional seven border-gate economic zones up to 2020, bringing their total number to 30 by the end of the next decade. It calls for construction of a systematic infrastructure, management mechanism and policies towards nine major border economic zones in an effort to increase the gross import-export revenues of commodities and services with neighbouring countries across border-gates up to 43 billion USD by 2020. The nine target border-gate economic zones are Mong Cai, Lao Cai, Lang Son in the north, the special economic zone of Lao Bao and another central border-gate economic zone of Cau Treo, the largest border economic zones of Bo Y in the Central Highalnds and Moc Bai, An Giang and Dong Thap in the south. These border-gate economic zones will help strengthen international cooperation and attract domestic and foreign investment into the country, emphasised the master-plan. RoK investment in heavy industry kicks off Construction of a heavy industry factory at a cost of 450 billion VND started in the oil-field province of Ba Ria-Vung Tau on April 29 with full investment from the Vina-Halla Company Ltd of the Republic of Korea. Vina-Halla company CEO Shon Ho Yong said the factory has a design annual capacity of producing 85,000 tonnes of industrial fans, 5,000 tonnes of pressure bottles and 10 units of heavy cranes all made of steel. The project will also manufacture incinerators to deal with steel wastes, steel facilities for environmental protection and liquid waste treatment and other machines and steel equipment for cement, energy and steel-rolling factories. Its products will be largely exported to Asian countries, said the RoK factory chief executive. The factory is scheduled to become operational in the next four months with a licensed operation term of 40 years and provide jobs for 500 workers. 300 enterprises take part in Vietnam’s 2008 High-Quality Products Fair Vietnam’s High-Quality Products Fair 2008 entitled “Connection and Integration” opened on April 29 in the Phu Tho Sport Complex, Ho Chi Minh City. The fair attracted over 300 enterprises occupying 1,000 stalls displaying high-quality products from all over the country, including new products and marketing programmes. Businesses considered to have “the best services in 2008”, have plenty of opportunity to approach consumers, while connecting with big distributors and banks to establish funds for workers to study and maintain their standard of living. Visitors also have the chance to take part in the various entertainments that are on offer. The fair will last until May 4. 350 businesses to take part in Mekong Expo 2008 The Mekong Expo 2008 entitled “To develop industry, trade, irrigation, rural communications in the Mekong Delta during the country’s industrialisation and modernisation process” is taking place in Can Tho city from April 29-May 5. So far, more than 350 international and domestic businesses have registered to join the expo, focusing on the fields of rural transport, manufacturing, equipment, industrial production, electronics, electricity, cosmetics, chemicals, handicraft, telecommunications, garments and textiles and processed food. The focus will be on trade promotion, business cooperation and trademark advertising. Seminars will also be held to discuss measures to develop wholesale markets and distribution network in the Mekong Delta, as well as combating blue-ear pig disease and the bird flu epidemic. On the occasion, many entertainment activities will take place, such as a Chinese chess competition, art performances and culinary festival. Central Quang Binh province builds network of cultural houses To meet people’s demand for local cultural activities, the central province of Quang Binh is carrying out a project building a system of cultural institutions and developing grassroots cultural lifestyle in the 2006-2010 period. Despite difficulties, the culture and information sector encouraged people to contribute to building grassroots level cultural institutions such as cultural houses, children entertainment areas and sport fields. This helps improve the spiritual life of people and preserve the specific cultural identity of each community. By the end of 2007, the province had built 885 cultural houses. In addition, the national objective programme on culture provided essential equipment for 50 cultural houses. The culture and information sector is encouraging enterprises and individuals to buy televisions, generators, tables, books and newspapers to improve local people’s cutlural life. Thai Nguyen province preserves cultural value In recent years, the northern mountainous province of Thai Nguyen has carried out several projects to preserve cultural values in the province. They are projects to protect cultural features in safe zones, to promote tourism and cultural heritage, to preserve and promote traditional cultural practices of ethnic minority groups in the province in the 2007-2010 period, and a plan for the development of culture and information in the 2008-2015 period and orientation until 2020. Kinh Bac plans to raise $106 million The listed firm Kinh Bac Urban Development Joint Stock Co is planning to offer more shares this year to hike its charter capital to VND1.7 trillion (US$106 million). Chairman Dang Thanh Tam made the announcement at a Kinh Bac shareholder meeting on Sunday, saying the company was aiming to make over VND1.18 trillion ($74 million) in revenue and VND611 billion ($38.2 million) in after tax profit, and pay a dividend of at least 30 per cent in 2008. He also announced that the company would pay a 2007 dividend of 43 per cent in shares. "A growth rate based on a firm foundation will help the company have enough financial capacity to be ready for large projects in the future," the chairman noted. Current projects the company is working on include a $100 million plan to expand Bac Ninh Province’s Que Vo industrial complex to over 600ha, a $200 million Yen Phong industrial zone project in the first phase in Bac Ninh and the Phuc Ninh urban zone project coming in at $200 million. This year, the company will join hands with Taiwanese Foxconn Group to develop the Trang Cat high-tech and new urban area complex in the northern port city of Hai Phong, along with other projects. Kinh Bac, an affiliate of Saigon Invest Group, specialises in real estate development, trade, financial services, infrastructure construction, investment consulting, power generation and mining. Textile maker sets sights on real estate, securities business The Thanh Cong Textile Garment-Investment-Trading Joint Stock Company (TCM) plans to expand its business into real estate and securities brokerage. It is already listed on the HCM City Stock Exchange. Chairman Dinh Cong Hung announced at last Saturday’s shareholder meeting that construction of the Thanh Cong Tower apartment complex would begin on a 10,000 sq.m. plot in Tan Phu District before June. Also in Tan Phu District, the construction of the 6.4. ha Thanh Cong Tower 2 is set to begin next year. It will include houses, a vocational training school, a conference centre, office buildings and a cultural centre. Other residential projects are in the works, including Thanh Cong Tower 3 in Dist. 4, Bui Huu Nghia apartment building in Dist. 5 and a 20-ha service and commercial area in the northern Bac Ninh Province. Based in HCM City, TCM is cooperating with several partners on a 200-ha industrial park and a 3-ha residential area in neighboring Long An Province, a 17-ha bonded warehouse at Phu My Port in Ba Ria-Vung Tau Province and a 10-ha resort in the coastal province of Phan Thiet. The Thanh Cong General Clinic, on Thanh Cong Tower 2’s grounds, will begin operation later this quarter. It is capable of receiving 1,000 patients a day. In May, Thanh Cong Securities Company will become a trading member of the HCM City Stock Exchange. The company intends to issue 10 million convertible bonds with a face value of VND100,000 each to raise funds for its real estate projects this year alone. Binh Duong strives for better training, support industries Training more skilled workers and creating more support industries are among key measures to maintain sustainable economic growth in Binh Duong province, according to chairman of the province’s People’s Committee, Nguyen Hoang Son. Despite an existing industry growth rate of more than 34 per cent, Son claims that more growth is needed to drive Binh Duong’s future economic success. Statistics from the province’s Investment and Planning Department show that last year, Binh Duong’s industrial output reached VND66 trillion (US$4.12 billion), a five-fold increase on 2001. However, although many industry sectors achieved high growth, this has brought its own problems, such as worrying fluctuations in business. Present concerns include a lack of synchronised relations between the production of raw materials from the province and processing industries. At present, industries making such goods as textiles, footwear and timber products use high numbers of labourers, but products are very basic. Labour-intensive industries, such as textiles and footwear, now employ about 40 per cent of the province’s 200,000 labourers. Therefore, to create sustainable industrial growth, it will be necessary to focus on developing work and special training for the large labour pool, said Tran Van Lieu, head of the province’s Industrial Zone management board. Under Binh Duong’s draft development plan, textiles, leather footwear, agricultural products and pharmaceuticals will be promoted as the province’s main industries up until the year 2020. The province has high economic expectations for the next two years. In its Exports Development Plan, it has targeted turnover of $2.8 billion for timber products and has plans for this to increase at a rate of about 38 per cent a year. For textiles, it has targeted $1.2 billion in exports increasing by about 27 per cent a year; $1.8 billion for footwear (30.9 per cent a year) and $282 million for handicrafts (16.5 per cent a year). Robots star in Ha Noi exposition The country should prepare to get automated as robots will be starring at this year’s Manufacturing Viet Nam 2008 taking place from May 8-10 at the Ha Noi International Exhibition Centre. Organised by Reed Tradex Company, all that’s left to do is co-ordinate the shipping of the equipment according to Kino Chiharu, Robotics Department Sales and System Engineering Manager, Yaskawa. The exhibition will be divided into five industrial sectors, including shows on electronics manufacturing technology, plastics and rubber, general machinery, automotive parts manufacturing, factory automation, and electrical and power transmission and material handling technology. A major highlight for investors and manufacturers in Viet Nam will be the first robot show in Viet Nam and Southeast Asia – Industrial Robots in Concert. The show will feature three industrial robots showing off their different capabilities. "The Yaskawa robots are manufactured in our factory in Japan, and can be applied to all types of industries — large, medium and small, depending on the type of application," said Chiharu. "The application must be repetitive, or it must be an application that uses strength. Today the automobile industry is the biggest user of robots. But robots are also suitable for other applications such as in the food industry which is beginning to use robots." Chiharu added that Yaskawa’s objective in the Vietnamese market for the first one to three years will be to build brand awareness, and seek a partnership for their marketing. While Viet Nam is beginning to use robots in manufacturing, the practice is still not widespread, so opportunity is plentiful. City halts projects to curb inflation The HCM City authority has called off 399 minor public projects in an attempt to save VND382 billion (US$23.8 million) and curb inflation. During an online meeting between the central Government, ministries and provincial authorities on Sunday, the chairman of HCM City People’s Committee, Le Hoang Quan, said the projects accounted for 6.5 per cent of the total capital of US$367 million budgeted this year for 1,971 proposed public projects by the People’s Committee. The city authority has instructed all local agencies to review and halt unessential public projects in order to concentrate capital for more important projects and to curtail public spending. The city will cut off 10 per cent of spending at city agencies for the rest of the year, as set out by the central Government. Quan said a price stabilisation fund of VND1 trillion ($62 million) would soon be created to help businesses maintain prices of essential goods such as grains and other foods. For the rest of the year, there will be no increases on fees and costs for city services, such as school and hospital fees, bus tickets, road and bridge tolls, water bills, and car and motorbike parking fees. Vietnam’s seafood appreciated in EU market Products of Ho Chi Minh City-based Vinh Hoan Seafood Co. was selected one of the best new products at the 2008 European Seafood Exhibition in Belgium . According to Truong Dinh Hoe, Secretary General of the Vietnam Association of Seafood Exporters and Processors (VASEP), 44 local seafood companies attended the exhibition, including those who joined the event for the first time. According to the Vietnam Commerce Office in Belgium , last year, Vietnam earned 950 million USD from seafood export to the EU, a year-on-year increase of 27 percent. The figure is estimated to reach 1.2 billion USD this year. Vietnam ’s seafood, especially those made from shrimps and catfish, are favoured by foreign clients, said To Thi Tuong Lan, VASEP’s Vice Secretary General. Vietnam’s cultivated pearls promising good income With a long history of more than 100 years searching for natural pearls from see beds and recent pearl cultivation and export, Vietnam has a firm position on the map of world pearl producers. One company tapping the potential of Vietnam ’s 3,200km coastline of high-quality natural pearls is Japanese-owned company Taiheiyo Shinju Vietnam Co. Ltd. Established in 2000 and with a current capital investment of 2 million USD, the company’s products – known under the trademark of Spica - have earned firm status in tough markets like the US , Japan and the European Union. The company has been successful in cultivating high-quality pearls by breeding two oyster species in a farm in Van Don island, Bai Tu Long gulf in northern Quang Ninh province. Taiheiyou Sinju Vietnam is the sole pearl producer to have received the Vietnam Gold Star award which is aimed at honouring premier products and brands. In 2007, the company exported 400kg of pearls, fetching around 16 billion VND. For 2008, it has set a target of exporting 500 kg of pearls, worth around 20 billion VND. In addition to breeding oysters for pearls, the company has also been active in producing jewellery. It is currently opening its business to the domestic market, to provide more options for local customers who previously have used low quality, imported pearls. According to Director of Taheiyo Shinju Vietnam Nguyen Thanh Trung, the company has not yet met the huge demand of the domestic market. He said his company plans to open an international pearl transaction floor in Vietnam , which will also create more jobs for local workers. Since the 1990s, Japanese experts have come to Vietnam to work with the Ministry of Fisheries in raising oysters for pearl cultivation. Craft village information centre operational A Craft Village Information Centre under the Vietnam Trade Village Association has become operational in Hanoi on April 30. The centre will provide information on the state’s policies as well as legal documents relating to the planning and development of Vietnam’s craft villages, news of market and training programmes. It will also hold forums to help associations and non-governmental organisations participate in activities to support craft villages such as poverty reduction, environmental protection, traditional craft preservation and tourism development

Larger projects divulge resources risks

23:24' 01/05/2008 (GMT+7)

Photo: hiendaihoa.com VietNamNet Bridge - More foreign direct investment capital is expected to flow into Vietnam but larger projects also bring bigger challenges to the country, economists have said. The Ministry of Planning and Investment’s General Statistics Office (GSO) recently reported that Vietnam welcomed more than $5 billion in committed foreign direct investment (FDI) in the first three months of 2008, up 31 per cent on-year. The GSO showed that less than a third of FDI commitments were disbursed but reflected positive investor outlook. “The outlook for FDI inflows looks promising given Vietnam’s still competitive labour costs, large potential domestic markets, robust growth, geographical proximity to China, and political and social stability,” said Daniel Hui, an HSBC economist. Ayumi Konishi, ADB Vietnam’s country director, said the country’s on going structural reforms, the potential of the large market and its commitment to improving the business environment were other key factors attracting investment to Vietnam. “Given the country’s medium to long-term economic strong growth prospects, I do strongly believe that Vietnam is a good FDI destination,” said Konishi. According to the United Nations Conference on Trade and Development’s World Investment Report 2007, Vietnam ranked above India, Indonesia, the Philippines, Korea and Taiwan and came in at only 10 places behind China. Vietnam is expected to maintain its 2007 momentum and is on target for around $20 billion in commitments for this year, said Hui. Economists however said that larger projects are placing a huge burden on the country’s scarce resources. “These projects have created huge supply bottlenecks for skilled labour and scarce raw materials such as cement and steel,” an economist said, adding that larger FDI projects such as the $670 million Samsung mobile-phone plant and the $1 billion Intel plant would demand more workers. Daniel Hui warned that actual FDI inflows failed to keep up with reported commitments and the improvement of FDI absorption. “Reasons include insufficient infrastructure, regulatory uncertainty and bottlenecks,” he said, adding that the resulting massive inflows into Vietnam have hurt exports through the dong’s appreciation. Ayumi said it was important for Vietnam to accelerate its reform efforts as well as infrastructure and human resource development, simplify administrative procedures for greater transparency, accountability and efficiency.