US official upbeat on business climate
A senior official from the US Government's development finance agency has expressed optimism about the investment climate in Viet Nam.
"US businesses, because of the economic slowdown, are looking for opportunities internationally, and as they look for those opportunities, particularly in Asia, I think Viet Nam is a very attractive place for that investment," said Dr Lawrence Spinelli, public affairs director at the Overseas Private Investment Corporation (OPIC).
"That is not just because of the size of the country or the market, which is significant, but also because of the regional opportunities that are provided for any US investors coming to Viet Nam."
Speaking to the media in HCM City on Wednesday, he listed tourism, infrastructure and renewable energy as possible areas for the US and Vietnamese businesses to co-operate.
"I think, first of all, there is great potential in tourism. It is a sector I would put very much near the top.
The second area which is in some way connected with tourism would be infrastructure. We have opportunities here."
Another priority for OPIC in Viet Nam was renewable energy, he said.
"There is great potential and opportunities for renewable energy investment in Viet Nam."
Spinelli was in Viet Nam to publicise the 7th annual international investment conference to be held in Jakarta, Indonesia, in May.
The conference, the first of its kind in Southeast Asia and to be held from May 3-5, will target emerging markets in the region including Viet Nam and connect US and regional investors, financial institutions, private equity managers, local partners and government officials.
The conference would focus on sectors like tourism, IT, infrastructure and transportation and energy, particularly renewable and clean energies, Spinelli said.
More than 250 business executives from around the world are expected to attend the conference, including from giants like General Electric and Proctor and Gamble.
Spinelli said OPIC could help Viet Nam tap its great potential through the conference where he hoped many Vietnamese businesses would meet US investors.
OPIC could also assist Viet Nam by providing finance to partnerships between Vietnamese and US companies, he added.
OPIC is now providing US$5 million for an aquaculture project in Nha Trang, central Khanh Hoa Province.
Established as an agency of the US government in 1971, OPIC helps US businesses invest overseas and foster economic development in new and emerging markets, complements the private sector in managing risks associated with foreign direct investment, and supports US foreign policy.
It provides loans of $100,000 to $250 million and has assisted businesses in Viet Nam since the mid-1990s.
Rice exports reach record high
Viet Nam exported 1.1 million tonnes of rice in January and February, a record amount, according to the Viet Nam Food Association (VFA).
Earnings were US$592 million, a 44.5 per cent increase compared to the same period last year.
This also marks a year-on-year increase of 55.6 per cent in volume.
Farmers are selling rice for VND5,000 to VND5,200 per kilo directly at paddy fields, and dried paddy for VND5,800 to VND6,200 per kilo.
Rice paddy prices were on the rise following the VFA's decision to purchase 1 million tonnes of rice for reserve beginning on March 1.
They were VND50 to VND100 per kilo higher compared with last week.
Recent sunny weather has also created favourable conditions for farmers in the Mekong provinces of An Giang, Dong Thap, Hau Giang, Kien Giang and Vinh Long, as well as Can Tho City.
The weather has allowed them to dry paddy harvested from the winter-spring crop.
Dr Le Van Banh, head of the Mekong Delta Institute for Rice Research, said Mekong farmers had harvested 400,000ha of the 1.6 million hectares under the winter-spring crop.
The average yield of this year's winter-spring crop stands at 6.5-7.2 tonnes per hectare.
Mekong farmers expect to harvest 10 million tonnes of paddy from this winter-spring crop.
Banh added that with the current high paddy prices, Mekong farmers could earn profits up to 60 per cent from the sale of paddy in their winter-spring crops.
Le Van Hai, a farmer from Tan Thanh Commune of Can Tho City's Thoi Lai District, said he could earn profits of VND15-VND20 million (US$714-952) from each hectare of his winter-spring crop.
The farmers' increasing use of combine harvesters has made work easier.
"These machines help us harvest the crop and pack the paddy into bags. We just wait for buyers to weigh the paddy and pay us for the crop," said Hai.
VN, Wallonie-Brussels trade to hit $1.4b
Total yearly bilateral trade turnover between Viet Nam and the French community from Wallonie and the Committee of the French community in Brussels (Wallonie-Brussels) is expected to reach 1 billion euros (US$1.4 billion) in the near future.
Vice President and Minister for the Economy, Small and Medium sized Enterprises, Foreign Trade and New Technologies of the Wallonie region Jean-Claude Marcourt said yesterday that most of the region's enterprises which were operating in Viet Nam had expressed their pleasure and hoped to further enhance co-operation in the coming time.
Marcourt said Viet Nam had a lot of potential to develop and that 10 to 20 of the region's businesses had already been actively co-operating with the country.
He said exports to Viet Nam last year saw an increase of 26 per cent, adding that the region had encouraged its businesses to invest in ASEAN countries which had a large population and huge potential.
If a free trade agreement were to be signed between Viet Nam and the EU, their turnover would be increased, he said.
Marcourt added that 31 projects in sectors such as university education, sustainable development, institutional improvement among others had been carried out for the sustainable economic development and trade between Viet Nam and Belgium in general and between Viet Nam and Wallonie in particular.
During his two-day visit to Viet Nam, Marcourt also visited several universities with co-operation projects with Wallonie-Brussels, such as a biotechnology project at the Ha Noi National University and an environmental science project at the HCM City Industrial University. He is also scheduled to visit the Viet Nam Academy of Science and Technology in Ha Noi to discuss a small-sized satellite project.
Marcourt's visit was one stage of a long visit to several ASEAN countries including Singapore, Thailand, Malaysia and Viet Nam. His time in Viet Nam aimed to strengthen co-operation not only in trade and economy but also education and training, science and culture.
On the same day, the Central Highland province of Lam Dong and Belgium's East Flanders Province signed a memorandum of understanding to develop Viet Nam's fruit, vegetable and bonsai sector.
Chairman of the provincial People's Committee Huynh Duc Hoa said the programme would pave the way for a breakthrough in sustainable fruit and vegetable production in the province.
Under the agreement, the two sides would implement research, training and transfer agricultural technology over the next five years.
A centre for fruit, vegetable and bonsai research would also be established in the province.
Marc De Buck, deputy governor of East Flanders Province said the co-operation in research, training, production and trade would benefit both sides.
West Flanders produces a large amount of fruit and vegetables in Belgium. The province has economic ties with many localities in Viet Nam.
Nation readies for EU trade pact
Vietnamese trade associations need to begin considering what concessions key sectors are willing to make in exchange for tariff reductions from the European Union, as the Free Trade Agreement with the EU comes up for negotiations.
Such was the message delivered by the seminar entiled "Viet Nam-EU Free Trade Agreement Negotiations: Opportunities and Challenges for Viet Nam", held yesterday in Ha Noi by the Viet Nam Chamber of Commerce and Industry, with the support of the Multilateral Trade Assistance Project III (MUTRAP III).
The negotiation of an FTA was seen as an important opportunity to discuss and deal with problems faced by Vietnamese exporters in accessing the EU market. The FTA would include provisions on services, industrial sectors, protection of intellectual property, public procurement, unfair competition, transparency of regulations and sustainable development, e.g., environmental and social rights.
Specific commitments would likely be negotiated to eliminate non-tariff trade barriers applicable to automobiles, pharmaceuticals and electronics.
MUTRAP expert Claudio Dordi told the seminar that the EU already applied relatively low tariffs on imports, and that the average tariffs applied by the EU on imports from Viet Nam had been steadily decreasing. In 2009, they averaged around 4.1 per cent, although higher average tariffs were applied to some products, e.g., apparel and clothing (11.7 per cent), seafood (10.8 per cent) and footwear (12.4 per cent).
The elimination of tariffs that would come about under the FTA would therefore provide important advantages to Viet Nam in comparison to competitors, in the EU markets, Dordi said.
Meanwhile, Viet Nam's tariffs on exports from the EU are also quite low – 3.4 per cent on machinery, 2 per cent on pharmaceuticals, 2 per cent on iron, 1.3 per cent on optical and medical equipment, and 0 per cent on aircraft. However, there are high tariff peaks on specific products, from 10 per cent on pharmaceuticals to 90 per cent for automobiles.
In conceding some of these tariffs, Viet Nam would also gain on the import side, as import duties would be reduced on EU exports of strategic materials needed by the domestic industrial sector to upgrade technology and increase productivity and competitiveness. Viet Nam would be able to obtain high-quality materials at a cheaper cost.
"Reseach on FTAs that the EU has signed with developing countries like Viet Nam has shown that FTAs have consistently positive impacts on bilateral trade," said the secretary of the Chamber of Commerce and Industry's International Trade Policy Consulting Council, Nguyen Thi Thu Trang.
The EU-Mexico FTA, for example, increased trade between the two countries by 207 per cent between 1999 and 2008, and worker and technology transfers were also significantly improved, Trang said.
The biggest gains for Viet Nam would come from increased EU investment in support industries in Viet Nam, as well as increased Vietnamese exports to the EU, and from cheaper strategic imports from the EU that would enable Viet Nam to upgrade its technology, some representatives said.
Viet Nam is an export-driven economy and the EU is one of the nation's key commercial partners. Exports to the EU reach US$12.6 billion in 2009, accounting for 14 per cent of gross domestic product and representing about 17 per cent of all exports.
Liberalisation of trade would cut the trade deficit and even improve State budget revenue, as revenues from increased imports would exceed the losses due to tariff reductions, Trang said.
Contract to buy power signed
Contracts to buy power from Xekaman 1 Power Company of Laos were signed at a ceremony here yesterday by Song Da Group and Electricity of Viet Nam.
The Ministry of Planning and Investment also handed an investment licence to the Song Da group to build Sekong 3 hydro-power plant in Laos.
Le Van Que chairman of the group, said the signing prepared the way for the start of the project.
The group will begin work on Xekaman hydro-power plant next week. Eighty per cent of the power generated will be exported to Viet Nam and the rest will be supplied to Laos.
From 2014, the plant, which will cost US$441 million, will be able to generate an annual output of more than 1.2 billion kWh per year. It will be located on the Xekaman River in Xanxay District, Attapeu Province, 75km from Kon Tum Province in Viet Nam.
Sekong 3 hydro-power plant will cost $275 million and be able to produce more than 800 million kWh a year.
It is expected that the plant will start operations at the end of this year and be completed by 2015.
In recent years, Song Da Group has shown interest in investing in seven hydro-power projects to generate 5.4 billion Kwh in Laos each year.
Timber industry pushes exports
If the timber industry's plan to earn a total of US$7 billion from exports by 2020 is to succeed, it must focus strongly on the development of domestic forests.
Domestic timber product exporters now mainly depend on imported timber as domestic supplies meet only 20 per cent of demand. This dependence has created a major problem as world timber prices keep rising sharply. Chairman of the Handicraft and Wood Industry Association (HAWA) Nguyen Chien Thang said last year, for example, the price of imported timber surged 25-30 per cent over the previous year.
General director of Minh Phat 2 Company Dien Quang Hiep said that wood from rubber trees, a main source of material for his company, last year increased by 50-60 per cent.
Deputy director of the Department of Processing and Trade for Agro-Forestry-Fisheries Products and Salt Dam Ngoc Nam said Viet Nam had more than 13 million hectares of forest, 8.6 million of which were for commercial purposes.
The Forest Science Institute of Viet Nam has drafted a development project for domestic timber to meet 50 per cent of demand by 2015 and 80 per cent by 2020.
Vo Truong Thanh, general director of the Truong Thanh Wood Joint Stock Company, said his company would grow 100,000ha of forest during the next 10 years.
This would enable it to provide 500,000 to 1 million cubic metres of timber yearly from 2016, which would meet roughly 20-30 per cent of demand.
HCMC to host furniture, accessories fair
About 150 local and foreign enterprises will take part in the Viet Nam International Furniture and Home Accessories Fair 2011 (VIFA 2011) in HCM City from March 11 to 14.
Held at the Sai Gon Exhibition and Conventional Centre in District 7, VIFA 2011 will feature 650 stalls displaying a wide range of furniture, handicrafts, equipment and tools for wood processing.
Wood processors and handicraft makers from HCM City and Ha Noi, and the provinces of Binh Duong, Binh Dinh, Dong Nai, Long An, Gia Lai and An Giang and firms from the US, China, Czech Republic and Singapore will exhibit at the event organised by the Handicraft and Wood Industry Association of HCM City (Hawa) and Hawa Corporation.
"VIFA has officially become part of the series of International Furniture and Home Decor Fairs that are organised by the seven-member ASEAN Furniture Industry Council (AFIC)," said Hawa chairman Nguyen Chien Thang.
"Joining the AFIC it benefits the wood industries of all members, and promotes VIFA to importers in Japan, the US and other European countries," Thang said.
Organisers have received 1,000 registrations from furniture import companies in 76 countries and territories, including Australia, the US, the UK, Canada, Germany, Japan, New Zealand, India and Hong Kong.
Most of these will seek new partners and suppliers at the fair. The fair also includes business meets, workshops and seminars such as seminar wood material resources for the wood industry in Vieât Nam and the Government's development strategy for the next 10 years.
One highlight of the event is a workshop on "Wood products legality for exporters" on March 12, organised by Hawa and the Forest Legality Alliance and the UK Timber Trade Federation.
The workshop would help local exporters better understand the new US and European regulations involved in legal sourcing of wood products, public sector and industry procurement policies.
100,000 tonnes of stockfeed to be sent back to India
Importers of animal feed face big losses if nearly 100,000 tonnes of maize and soybean imported from India early in January have to be sent back because of traces of termites.
The Ministry of Agriculture and Rural Development's Plant Protection Department has asked enterprises to return the goods instead of allowing it to be fumigated as usual. The feed was specially prepared for the breeding industries.
The department said Viet Nam was free of the invasive pest. It added that it had told Indian suppliers to fumigate the feed before it was sent because it was such a large quantity that would have been too difficult to fumigate.
The feed is currently being stored at the ports of Hai Phong and Sai Gon.
Chairman of the Viet Nam Feed Association Le Ba Lich said stock feed was often imported and the department had previously allowed fumigation if termites were detected.
"But the goods have been refused entry this time. About 20 enterprises will suffer total losses of US$35-40 million if the goods have to be returned," Lich said.
He added that enterprises would receive no compensation from partners or relevant authorities.
Tran Thanh Quang, an association representative, said the return of the feed could create a serious shortage in the animal breeding world – and force prices sky high.
According to him, the cost of maize, one of the main components of the feed, has increased from VND6,500 to 7,500 per kilo.
Lich said the association had asked the ministry to release half of the imported feed that had shown no signs of termite contagion. He said the ministry should require the Indian suppliers to fumigate the goods before export to Viet Nam, adding that the US and Argentina supplied clean product, but at $35-40 a tonne more. Shipping also took longer.
Hoang Trung, deputy director of the Plant Protection Department, said the termites (trogoderma granarium) were listed among the most 100 invasive insects in the world and could seriously affect Viet Nam's agricultural exports of rice and other farm products.
"The termites might have moved around since we first checked, so re-export is necessary," he said.
The issue has been forwarded to the Government for a final decision.
Previously, about 5,745 tonnes of stock feed from India was fumigated successfully after being found to contain traces of termites.
The ministry sent warnings to Indian suppliers about the need for fumigation before they exported it to Viet Nam.
