The garment and textiles industry posted a massive 5.1 billion USD in exports revenues for the first eight months of the year, representing a year-on-year surge of 30 percent.
The US remains to be Viet Nam’s largest market by importing almost 3 billion USD of products or a 20 percent increase over the same period last year. The figure represented a 60 percent share of Viet Nam’s gross garment exports.
The post-WTO surge of Viet Nam’s textiles and garments exportation to the US at 25 percent in the first half, however, is just slightly higher than the quota-imposition period prior to the country’s WTO membership which stood at 21 percent, said Le Quoc An, Chairman of the Viet Nam Textiles and Garments Association (VTGA).
“The recent level of exports by the textile and garment industry has not shown any signs of “unexpected highs” for the US side to use as a pretext for sueing Viet Nam on dumping charges,” he said.
The VTGA chief unveiled a plan in association with the Ministry of Industry and Trade to further lobby US authorities, especially the Department of Commerce, to lift more barriers that are blocking Viet Nam’s textile and garment exports.
An urged domestic enterprises to strictly control their exports to the world’s largest market by focusing on high priced contracts while turning away small and low value deals.
“This should allow the textile and garment industry to maintain its high export growth rates in the rest of the year,” emphasised the garment expert.
He also urged firms to expand into other markets such as the European Union and Japan.
Source: VNA
Showing posts with label Trade. Show all posts
Showing posts with label Trade. Show all posts
Wednesday, August 29, 2007
Tuesday, August 28, 2007
Jan-Aug industrial output to rise 17 pct y/y
Vietnam's January-to-August industrial output is expected to rise 17.1 percent from a year earlier to 377.07 trillion dong ($23.3 billion), but crude oil production has slowed, the government said on Tuesday.
The industrial sector, making up a third of Vietnam's economy, helped lift gross domestic product by 7.87 percent in the first half of the year from the same period a year earlier.
But crude oil production during the first eight months is expected to fall 8 percent from the same period last year to 10.38 million tonnes, or 313,100 barrels per day, the government's General Statistics Office said in a monthly report.
Crude's decline "does not only affect greatly the export growth and state budget income but also has an impact on the industrial sector's contribution to the eight-month gross domestic product growth", it said, without giving details.
Crude exports, Vietnam's top foreign exchange earner, in January-to-August fell 11.8 percent from a year earlier to $5.1 billion, the statistics office said.
However, production of cars, machinery and air-conditioners in the eight-month period extended the strong growth since the start of the year, rising by between 60 percent and 70.2 percent from a year earlier.
The state sector was estimated to grow 10.2 percent during the first eight months, up from 9.7 percent in the January-to-July period.
Production by enterprises outside state control was also expected to expand slightly faster in the January-to-August period, growing 20.5 percent from a year earlier, up 0.1 percentage point compared with January-to-July.
Growth in the foreign investment sector slowed to 18.6 percent, from 18.9 percent during the first seven months.
Industry accounts for 34.9 percent of gross domestic product, ranking after the service sector which contributed 38.8 percent to Vietnam's GDP during the first half, the government said.
Vietnam aims for GDP growth of 9 percent in the second half of this year, which will help it meet its annual growth target of 8.5 percent.
Source: Reuters
The industrial sector, making up a third of Vietnam's economy, helped lift gross domestic product by 7.87 percent in the first half of the year from the same period a year earlier.
But crude oil production during the first eight months is expected to fall 8 percent from the same period last year to 10.38 million tonnes, or 313,100 barrels per day, the government's General Statistics Office said in a monthly report.
Crude's decline "does not only affect greatly the export growth and state budget income but also has an impact on the industrial sector's contribution to the eight-month gross domestic product growth", it said, without giving details.
Crude exports, Vietnam's top foreign exchange earner, in January-to-August fell 11.8 percent from a year earlier to $5.1 billion, the statistics office said.
However, production of cars, machinery and air-conditioners in the eight-month period extended the strong growth since the start of the year, rising by between 60 percent and 70.2 percent from a year earlier.
The state sector was estimated to grow 10.2 percent during the first eight months, up from 9.7 percent in the January-to-July period.
Production by enterprises outside state control was also expected to expand slightly faster in the January-to-August period, growing 20.5 percent from a year earlier, up 0.1 percentage point compared with January-to-July.
Growth in the foreign investment sector slowed to 18.6 percent, from 18.9 percent during the first seven months.
Industry accounts for 34.9 percent of gross domestic product, ranking after the service sector which contributed 38.8 percent to Vietnam's GDP during the first half, the government said.
Vietnam aims for GDP growth of 9 percent in the second half of this year, which will help it meet its annual growth target of 8.5 percent.
Source: Reuters
Friday, July 27, 2007
Exports bring in 26.8 billion USD in seven months
Viet Nam’s export revenue soared to almost 26.8 billion USD in the first seven months of this year, posting a year-on-year rise of 19.6 percent, with 4.25 billion USD coming from July alone.
Staples such as aquatic, crude oil, coffee, textile and garment, footwear and wooden products all exceeded the 1 billion USD mark.
Other items also recorded high growth rates such as coal with 23.6 percent, electronic appliances and computer components with 24.6 percent, and vegetables and fruits with 23 percent.
The import turnover in July was 5.05 billion USD, pushing up the total value in the seven months to 32.2 billion, a year-on-year increase of 29.8 percent.
According to the Trade Ministry, the period saw a massive amount of import of materials and equipment for production while consumer goods were imported at a more modest rate.
The country’s trade deficit of 5.45 billion USD over the period surpassed expected targets and represented 20.3 percent of total export turnover.
Source: VNA
Staples such as aquatic, crude oil, coffee, textile and garment, footwear and wooden products all exceeded the 1 billion USD mark.
Other items also recorded high growth rates such as coal with 23.6 percent, electronic appliances and computer components with 24.6 percent, and vegetables and fruits with 23 percent.
The import turnover in July was 5.05 billion USD, pushing up the total value in the seven months to 32.2 billion, a year-on-year increase of 29.8 percent.
According to the Trade Ministry, the period saw a massive amount of import of materials and equipment for production while consumer goods were imported at a more modest rate.
The country’s trade deficit of 5.45 billion USD over the period surpassed expected targets and represented 20.3 percent of total export turnover.
Source: VNA
Thursday, July 26, 2007
Vietnam says Jan-July trade deficit jumps on year
Vietnam estimated on Thursday its trade deficit in the first seven months of the year more than doubled to $5.45 billion from a year earlier, due largely to a surge in imports for construction of state projects.
In July alone the deficit was estimated at $800 million from a revised gap of $790 million last month, the General Statistics Office said in its monthly report.
In trade deficit for the first seven months of 2006 was $2.44 billion.
Exports in the first seven months rose 19.6 percent from a year earlier to $26.79 billion while imports during the period jumped nearly 30 percent to $32.24 billion, the office said.
The trade report showed imports of machinery, mainly for big government projects including Vietnam's first refinery and new power plants, soared 42.2 percent in the January-July period from a year earlier to $5.04 billion.
Oil product imports in the first seven months rose 11.9 percent from a year earlier to $4.06 billion, while crude exports fell 11.3 percent to $4.4 billion, the report showed.
The Trade Ministry forecast earlier this month the 2007 trade gap could jump to a record $8 billion this year.
Apart from infrastructure projects, the ministry attributed the widening trade deficit to increases in imports of cars and household appliances due to lower import tariffs as Vietnam implemented its World Trade Organisation commitments.
Vietnam, which joined the global trade body in January, aims to boost annual economic growth to 9 percent in the second half of 2007 from 7.87 percent in the first half to achieve full-year growth of 8.5 percent.
Earlier this week, Deputy Trade Minister Nguyen Thanh Bien raised the 2007 export forecast to $48.1 billion, up 20.8 percent from last year from a previous forecast of $47.54 billion.
Source: Reuters
In July alone the deficit was estimated at $800 million from a revised gap of $790 million last month, the General Statistics Office said in its monthly report.
In trade deficit for the first seven months of 2006 was $2.44 billion.
Exports in the first seven months rose 19.6 percent from a year earlier to $26.79 billion while imports during the period jumped nearly 30 percent to $32.24 billion, the office said.
The trade report showed imports of machinery, mainly for big government projects including Vietnam's first refinery and new power plants, soared 42.2 percent in the January-July period from a year earlier to $5.04 billion.
Oil product imports in the first seven months rose 11.9 percent from a year earlier to $4.06 billion, while crude exports fell 11.3 percent to $4.4 billion, the report showed.
The Trade Ministry forecast earlier this month the 2007 trade gap could jump to a record $8 billion this year.
Apart from infrastructure projects, the ministry attributed the widening trade deficit to increases in imports of cars and household appliances due to lower import tariffs as Vietnam implemented its World Trade Organisation commitments.
Vietnam, which joined the global trade body in January, aims to boost annual economic growth to 9 percent in the second half of 2007 from 7.87 percent in the first half to achieve full-year growth of 8.5 percent.
Earlier this week, Deputy Trade Minister Nguyen Thanh Bien raised the 2007 export forecast to $48.1 billion, up 20.8 percent from last year from a previous forecast of $47.54 billion.
Source: Reuters
Vietnam fears falling exports will push target beyond reach
A slowdown in exports of some key items means the year’s export target of US$48 billion could be missed, a routine trade ministry meeting Tuesday heard. Pham The Dung, head of the Ministry of Trade’s Export-Import Department, said as a result the export sector faced a heavy burden in the second half.
As the country’s number one export turnover earner, crude oil plunged by 5 percent to $3.8 billion.
Oil industry insiders attributed the slip to declining global prices and lower than expected output by certain overseas operations.
Rice exports fell by 5 percent to $732 million. Huynh Minh Hue, deputy general secretary of the Vietnam Food Association, said a shortfall in cargo services and a 40 percent hike in transport costs had pushed exports down.
As a result, shipments to some key markets like Russia, Cuba, and South Africa had plunged by 75 percent, 67 percent, and 58 percent respectively.
Footwear exports fetched $1.9 billion, a year-on-year rise of 11 percent against a targeted rise of 21 percent.
This was mainly due to anti-dumping duties slapped by the EU which buys 80 percent of Vietnamese footwear exports.
Exporters failed to address the problem by finding alternate markets.
However, despite the problems, the country‘s exports jumped by 20 percent in the first half to $22.5 billion.
Deputy Minister of Trade Nguyen Tinh Bien warned that nothing less than a massive effort would do to reach the export target.
The coffee, apparel, and seafood industries were on track to achieve their targets, especially apparel, which could reach its $7.3 - 7.5 billion goal.
A push was required to ensure fisheries, another important export item, achieved its export target.
The government had agreed to provide VND50 billion to set up facilities to test fisheries products to ensure they were free of banned chemical substances.
Van Thanh Huy, chairman of the Vietnam Coffee Association, said coffee exports had already achieved 92 percent of the whole year’s target with revenues of $1.5 billion so far.
But he was worried that the low coffee quality could hurt the goal.
A Ho Chi Minh City-based coffee trader admitted that Vietnamese coffee had 1 percent impurities compared to 0.5 percent elsewhere.
Exports are expected to maintain robust growth, helped by Vietnam's membership in the WTO. The country’s ambitious export goal is to reach a whopping $100 billion in export value by 2010, according to the Ministry of Trade.
The nation’s four giant exporting markets now are the EU, the US, Japan and China.
Trade officials said exports to the US were forecast to rise 35 percent from last year to nearly $11 billion in total this year while revenues from goods sold to Europe would jump 22 percent to $8.3 billion by the year’s end.
Source: Reuters
As the country’s number one export turnover earner, crude oil plunged by 5 percent to $3.8 billion.
Oil industry insiders attributed the slip to declining global prices and lower than expected output by certain overseas operations.
Rice exports fell by 5 percent to $732 million. Huynh Minh Hue, deputy general secretary of the Vietnam Food Association, said a shortfall in cargo services and a 40 percent hike in transport costs had pushed exports down.
As a result, shipments to some key markets like Russia, Cuba, and South Africa had plunged by 75 percent, 67 percent, and 58 percent respectively.
Footwear exports fetched $1.9 billion, a year-on-year rise of 11 percent against a targeted rise of 21 percent.
This was mainly due to anti-dumping duties slapped by the EU which buys 80 percent of Vietnamese footwear exports.
Exporters failed to address the problem by finding alternate markets.
However, despite the problems, the country‘s exports jumped by 20 percent in the first half to $22.5 billion.
Deputy Minister of Trade Nguyen Tinh Bien warned that nothing less than a massive effort would do to reach the export target.
The coffee, apparel, and seafood industries were on track to achieve their targets, especially apparel, which could reach its $7.3 - 7.5 billion goal.
A push was required to ensure fisheries, another important export item, achieved its export target.
The government had agreed to provide VND50 billion to set up facilities to test fisheries products to ensure they were free of banned chemical substances.
Van Thanh Huy, chairman of the Vietnam Coffee Association, said coffee exports had already achieved 92 percent of the whole year’s target with revenues of $1.5 billion so far.
But he was worried that the low coffee quality could hurt the goal.
A Ho Chi Minh City-based coffee trader admitted that Vietnamese coffee had 1 percent impurities compared to 0.5 percent elsewhere.
Exports are expected to maintain robust growth, helped by Vietnam's membership in the WTO. The country’s ambitious export goal is to reach a whopping $100 billion in export value by 2010, according to the Ministry of Trade.
The nation’s four giant exporting markets now are the EU, the US, Japan and China.
Trade officials said exports to the US were forecast to rise 35 percent from last year to nearly $11 billion in total this year while revenues from goods sold to Europe would jump 22 percent to $8.3 billion by the year’s end.
Source: Reuters
Wednesday, July 25, 2007
Eximbank joins global trade finance programme
he Viet Nam Export Import Commercial Joint Stock Bank (Vietnam Eximbank), on July 25, signed an agreement with the International Finance Corporation (IFC) to join the IFC’s Global Trade Finance Programme (GTFP) as an issuing bank.
Joining the programme, Vietnam Eximbank will have better access to banks in the world to expand its operational markets and improve its competitiveness and service quality, particularly in the area of financing import-export.
The programme has so far admitted 105 member banks in 65 countries as confirming banks and 75 banks in 50 countries as issuing banks.
Source: VNA
Joining the programme, Vietnam Eximbank will have better access to banks in the world to expand its operational markets and improve its competitiveness and service quality, particularly in the area of financing import-export.
The programme has so far admitted 105 member banks in 65 countries as confirming banks and 75 banks in 50 countries as issuing banks.
Source: VNA
VND/US$ exchange rate stable until year-end
Big international institutions all share the same view that the VND/US$ exchange rate will keep stable in the last part of the year as in the previous three years.
The strong flow of foreign capital into Vietnam over the last time has put pressure on the local currency, forcing the VND to revaluate. However, the fact that the State Bank of Vietnam is trying to buy more foreign currencies has helped stabilise the exchange rate.
According to Citibank, in 2004-2006, the VND lost 0.8-0.9% in value every year. However, the local currency unexpectedly revaluated in the first two months of 2007. The revaluation of the local currency halted in subsequent months; however, the local currency has revaluated again in the last three months, by 0.6% against the greenback.
The current exchange rate is VND16,138/US$1, which is lower than the rate seen in January 2007 (VND16,142/US$1), but higher than the VND16,060/US$1 level in mid February 2007.
The fact that the central bank bought dollars in large quantity in the last time has helped reduce the supply of foreign currencies on the market. This is considered the main reason that the greenback has recovered. The central bank has confirmed that it will continue buying foreign currencies in order to raise the foreign currency reserve and ensure the devaluation of the VND of 1% in 2007 as previously targeted.
Therefore, the reports by Citibank, HSBC, Standard Chartered all said that the VND would slightly devaluate in the short term. However, as the surplus in international payment balance remains high thanks to the big capital inflow (foreign direct investment FDI), overseas remittance and portfolio investment, this will maintain the pressure on the local currency.
Experts have voiced their concern about the increased supply of money on the market as the central bank is trying to buy more foreign currencies. In fact, in order to buy a big volume of foreign currencies, the central bank will have to put a big volume of VND into circulation, thus making it more difficult to realise the goal of curbing inflation.
In fact, international financial institutions, including the World Bank (WB) and International Monetary Fund (IMF), warned about the impact of the foreign capital flow on the monetary policy management earlier this year. WB even said that the investment flow would challenge the monetary policy.
It seems that the central bank has to do two works that may conflict with each other: putting more money into circulation to buy foreign currencies for reserve, while tightening the monetary policy to curb inflation. Therefore, every solution should be considered thoroughly to ensure reaching both purposes.
Most recently, the central bank has decided to raise the compulsory reserve ratio to 10% for bank deposits, a move aiming to tighten the monetary policy and withdraw money from circulation. However, the effects of the decision will only be clear in some months.
Source: VNE
The strong flow of foreign capital into Vietnam over the last time has put pressure on the local currency, forcing the VND to revaluate. However, the fact that the State Bank of Vietnam is trying to buy more foreign currencies has helped stabilise the exchange rate.
According to Citibank, in 2004-2006, the VND lost 0.8-0.9% in value every year. However, the local currency unexpectedly revaluated in the first two months of 2007. The revaluation of the local currency halted in subsequent months; however, the local currency has revaluated again in the last three months, by 0.6% against the greenback.
The current exchange rate is VND16,138/US$1, which is lower than the rate seen in January 2007 (VND16,142/US$1), but higher than the VND16,060/US$1 level in mid February 2007.
The fact that the central bank bought dollars in large quantity in the last time has helped reduce the supply of foreign currencies on the market. This is considered the main reason that the greenback has recovered. The central bank has confirmed that it will continue buying foreign currencies in order to raise the foreign currency reserve and ensure the devaluation of the VND of 1% in 2007 as previously targeted.
Therefore, the reports by Citibank, HSBC, Standard Chartered all said that the VND would slightly devaluate in the short term. However, as the surplus in international payment balance remains high thanks to the big capital inflow (foreign direct investment FDI), overseas remittance and portfolio investment, this will maintain the pressure on the local currency.
Experts have voiced their concern about the increased supply of money on the market as the central bank is trying to buy more foreign currencies. In fact, in order to buy a big volume of foreign currencies, the central bank will have to put a big volume of VND into circulation, thus making it more difficult to realise the goal of curbing inflation.
In fact, international financial institutions, including the World Bank (WB) and International Monetary Fund (IMF), warned about the impact of the foreign capital flow on the monetary policy management earlier this year. WB even said that the investment flow would challenge the monetary policy.
It seems that the central bank has to do two works that may conflict with each other: putting more money into circulation to buy foreign currencies for reserve, while tightening the monetary policy to curb inflation. Therefore, every solution should be considered thoroughly to ensure reaching both purposes.
Most recently, the central bank has decided to raise the compulsory reserve ratio to 10% for bank deposits, a move aiming to tighten the monetary policy and withdraw money from circulation. However, the effects of the decision will only be clear in some months.
Source: VNE
Friday, July 20, 2007
VND4,500bil of loss in rice production and export every year
If Vietnam-made rice was sold at the same price as Thailand-sourced rice, Vietnamese enterprises would make an additional profit of VND1,300bil ($81.25mil) a year. If Vietnamese farmers did not lose 11% of rice volume in production, they would pocket VND3,300bil ($206.25mil) more every year, experts say.
According to the Vietnam Food Association (Vinafood), Vietnam’s rice export prices are $20-25/tonne lower than Thailand’s prices for the same kinds. For example, Vietnamese 5% broken rice is selling at $305/tonne, while Thailand’s product, $330/tonne. The prices for 10% broken rice are $300/tonne and $325/tonne, and the prices for 15% broken rice are $295 and $315, respectively.
As such, if considering that Vietnam exports 4mil tonnes of rice every year and the price is $20/tonne lower than Thailand’s, Vietnam suffers a loss of $80mil a year, or VND1,300bil.
Explaining the price gap, an official from the Northern Food Corporation said that the problem with Vietnam’s rice was the quality. For example, the proportion of bad seeds in Thailand’s rice is just 1.5%, while the ratio in Vietnam’s rice is 3-3.2%. That explains why Thailand has been successfully expanding its export markets, and even gone after Vietnam’s traditional client, Iraq.
Because of the lower export prices compared to the prices of the five biggest rice exporters in the world (Thailand, India, Vietnam, the US and Pakistan), Vietnam is just third or fourth in the ranking of the World Trade Centre, though it ranks second in terms of export quantity.
Deputy Minister of Agriculture and Rural Development Bui Ba Bong said that some 2mil tonnes of paddy, or 14% of total productivity, is lost every year in the Cuu Long River Delta, the granary of the rice export country. According to Can Tho University, with the lost volume of 2mil tonnes, farmer lose VND3,370bil ($206mil) every year.
Tran Ngoc Chung, an official from the An Giang Department for Agriculture and Rural Development, said that paddy was lost during post-harvest works, including drying, storing and husking.
Mr Chung said that solutions should be found to improve the situation, and the high proportion of lost rice must be reduced. The big, lost sum of VND3,370bil decreases the incomes of farmers, especially as rice production costs are very high due to the high price of fertiliser and the fluctuation of the selling prices of farm produce on the world’s market.
Source: VNE
According to the Vietnam Food Association (Vinafood), Vietnam’s rice export prices are $20-25/tonne lower than Thailand’s prices for the same kinds. For example, Vietnamese 5% broken rice is selling at $305/tonne, while Thailand’s product, $330/tonne. The prices for 10% broken rice are $300/tonne and $325/tonne, and the prices for 15% broken rice are $295 and $315, respectively.
As such, if considering that Vietnam exports 4mil tonnes of rice every year and the price is $20/tonne lower than Thailand’s, Vietnam suffers a loss of $80mil a year, or VND1,300bil.
Explaining the price gap, an official from the Northern Food Corporation said that the problem with Vietnam’s rice was the quality. For example, the proportion of bad seeds in Thailand’s rice is just 1.5%, while the ratio in Vietnam’s rice is 3-3.2%. That explains why Thailand has been successfully expanding its export markets, and even gone after Vietnam’s traditional client, Iraq.
Because of the lower export prices compared to the prices of the five biggest rice exporters in the world (Thailand, India, Vietnam, the US and Pakistan), Vietnam is just third or fourth in the ranking of the World Trade Centre, though it ranks second in terms of export quantity.
Deputy Minister of Agriculture and Rural Development Bui Ba Bong said that some 2mil tonnes of paddy, or 14% of total productivity, is lost every year in the Cuu Long River Delta, the granary of the rice export country. According to Can Tho University, with the lost volume of 2mil tonnes, farmer lose VND3,370bil ($206mil) every year.
Tran Ngoc Chung, an official from the An Giang Department for Agriculture and Rural Development, said that paddy was lost during post-harvest works, including drying, storing and husking.
Mr Chung said that solutions should be found to improve the situation, and the high proportion of lost rice must be reduced. The big, lost sum of VND3,370bil decreases the incomes of farmers, especially as rice production costs are very high due to the high price of fertiliser and the fluctuation of the selling prices of farm produce on the world’s market.
Source: VNE
Thursday, July 19, 2007
Vietnam may import coffee materials
Vietnam, which is the biggest Robusta exporter in the world, is now considering importing materials for re-export.
At this moment, the storehouses of Vietnamese coffee exporters are all empty. They have exported all the coffee products they had after signing a lot of contracts when the harvest ended. They wish they had not exported all the products, because they would reap more if they exported at this moment, when the price is escalating.
Right at the end of 2006, Chairman of the Vietnam Coffee and Cocoa Association (Vicofa) advised its member companies not to export coffee in large quantities and not to sign contracts with the delivery time too far from the contract signing time, in order to avoid possible risks due to price fluctuations. Vicofa anticipated that the coffee output would decrease this year, while the demand would be increasingly high.
Vietnam is the nation with the biggest Robusta growing area, 500,000 ha, which can provide the yield of 750-800,000 tonnes. Most of Vietnam’s coffee has been exported as raw material, which cannot bring high profit. Now, with the world’s price increasing, Vietnam has no more coffee to sell.
Since 2002, the Robusta price has tripled in the world, and is now staying at the highest peak since 1998. The coffee price has increased sharply due to decreased supplies from the biggest producers, who have lower output as a result of bad weather, while the demand is increasing sharply in Europe.
Analysts said that in general, the price would keep rising because the supply remains short.
As their stocks have run out, Vietnamese enterprises are now thinking of importing coffee material, and if they do that, they will have to buy coffee at a high price (as the world’s price is increasing).
The International Coffee Organisation (ICO) said that the world’s coffee output for the 2007/2008 crop would be 6-8mil bags (60kg/bag) lower than the consumption level, surely making the price increase further.
Meanwhile, the Robusta output of Vietnam in 2007/2008 is expected to increase by 30%, or 780-950,000 tonnes, as the coffee plant has recovered from the drought eight years ago.
According to Vicofa, in order to take full advantage of being the leading Robusta exporter, a lot of things still need to be done, including developing the material area, expanding trade and the drawing up of a market strategy.
Vicofa said that it was very necessary to have coffee in reserve. Brazil, for example, the leading coffee producer, buys coffee for reserve every year to sell when the price is high.
Source: VNE
At this moment, the storehouses of Vietnamese coffee exporters are all empty. They have exported all the coffee products they had after signing a lot of contracts when the harvest ended. They wish they had not exported all the products, because they would reap more if they exported at this moment, when the price is escalating.
Right at the end of 2006, Chairman of the Vietnam Coffee and Cocoa Association (Vicofa) advised its member companies not to export coffee in large quantities and not to sign contracts with the delivery time too far from the contract signing time, in order to avoid possible risks due to price fluctuations. Vicofa anticipated that the coffee output would decrease this year, while the demand would be increasingly high.
Vietnam is the nation with the biggest Robusta growing area, 500,000 ha, which can provide the yield of 750-800,000 tonnes. Most of Vietnam’s coffee has been exported as raw material, which cannot bring high profit. Now, with the world’s price increasing, Vietnam has no more coffee to sell.
Since 2002, the Robusta price has tripled in the world, and is now staying at the highest peak since 1998. The coffee price has increased sharply due to decreased supplies from the biggest producers, who have lower output as a result of bad weather, while the demand is increasing sharply in Europe.
Analysts said that in general, the price would keep rising because the supply remains short.
As their stocks have run out, Vietnamese enterprises are now thinking of importing coffee material, and if they do that, they will have to buy coffee at a high price (as the world’s price is increasing).
The International Coffee Organisation (ICO) said that the world’s coffee output for the 2007/2008 crop would be 6-8mil bags (60kg/bag) lower than the consumption level, surely making the price increase further.
Meanwhile, the Robusta output of Vietnam in 2007/2008 is expected to increase by 30%, or 780-950,000 tonnes, as the coffee plant has recovered from the drought eight years ago.
According to Vicofa, in order to take full advantage of being the leading Robusta exporter, a lot of things still need to be done, including developing the material area, expanding trade and the drawing up of a market strategy.
Vicofa said that it was very necessary to have coffee in reserve. Brazil, for example, the leading coffee producer, buys coffee for reserve every year to sell when the price is high.
Source: VNE
Monday, July 16, 2007
Many Vietnamese food products unhygienic
In the first half of 2007, hundreds of batches of food exported by Vietnam to the US were refused due to being found unhygienic, according to an official announcement on the website of the US’ Food and Drug Administration (FDA).
In this period, a total of 240 batches of goods sent by Vietnam were refused by the US for not meeting the US’ hygienic standards.
According to FDA’s website, in those six months, this agency returned tens of batches of goods each month to Vietnam due to hygienic problems. January had the lowest number of batches returned, 19, and March saw the highest number with 56 batches. Most recently, in June, 35 batches of food of Vietnam were deemed unsuitable.
Those batches included different kinds of foods such as girdle cakes, cakes, candies, spring rolls, spices, pepper, coffee, meat, seafood.
American agencies have found the presence of many substances that are not good for health, for example Salmonella, which can cause diarrhoea, chloramphenicol, Aflatoxin and many components that are not named on the label.
Processed foods of many reputed companies in Vietnam like Mekophar, Acecook (Acecook VietNam Co., Ltd.); Seaspime, Frozen Food Company No. 4, Cau Tre Enterprise, Trung Nguyen Coffee Enterprise were also returned.
Source: VNE
In this period, a total of 240 batches of goods sent by Vietnam were refused by the US for not meeting the US’ hygienic standards.
According to FDA’s website, in those six months, this agency returned tens of batches of goods each month to Vietnam due to hygienic problems. January had the lowest number of batches returned, 19, and March saw the highest number with 56 batches. Most recently, in June, 35 batches of food of Vietnam were deemed unsuitable.
Those batches included different kinds of foods such as girdle cakes, cakes, candies, spring rolls, spices, pepper, coffee, meat, seafood.
American agencies have found the presence of many substances that are not good for health, for example Salmonella, which can cause diarrhoea, chloramphenicol, Aflatoxin and many components that are not named on the label.
Processed foods of many reputed companies in Vietnam like Mekophar, Acecook (Acecook VietNam Co., Ltd.); Seaspime, Frozen Food Company No. 4, Cau Tre Enterprise, Trung Nguyen Coffee Enterprise were also returned.
Source: VNE
Dollar rates rise to help meet importer demand
A major Vietnamese bank has raised interest rates on dollar deposits in a bid to meet strong demand for funds from importers.
Bankers said state-run Vietcombank, which handles around 30 percent of Vietnam's trade payments, boosted its rates on dollar deposits with terms from six months to 60 months by between 0.1 and 0.25 of a percentage point.
Vietcombank, the country's third-largest lender by assets, has offered 4.65 percent for six-month deposits from July 6, up from 4.4 percent previously, while its rate for 12-month deposits went up to 5 percent from 4.85 percent.
From July 6, partly private Phuong Nam Bank also raised its dollar savings rates by 0.5 percentage point, the bank said.
Dollar rates in Vietnam have thus risen to between 4.2 percent and 5.3 percent in the past month, from 4-4.7 percent earlier.
Vietnam cut import tariffs on many goods following its WTO accession in January and importers have increased their purchases to meet domestic consumption.
Meanwhile, rates on dong deposits have eased slightly.
Vietnam's four big lenders, including Vietcombank, quoted overnight lending rates on the dong at 4-5 percent on Monday versus 4.5-5.0 percent last Monday.
The range on six-month rates also widened to 7.8-8.7 percent, against 8.4-8.7 percent two weeks ago.
But bankers said demand for dong funds would rise in the next few months as the state poured money into key projects in ship building, transport and energy. The Planning and Investment Ministry has forecast Vietnam would boost investment for development to 118 trillion dong ($7.3 billion) between July and September, up 10 percent from the previous three-month period ending in June.
Source: Reuters
Bankers said state-run Vietcombank, which handles around 30 percent of Vietnam's trade payments, boosted its rates on dollar deposits with terms from six months to 60 months by between 0.1 and 0.25 of a percentage point.
Vietcombank, the country's third-largest lender by assets, has offered 4.65 percent for six-month deposits from July 6, up from 4.4 percent previously, while its rate for 12-month deposits went up to 5 percent from 4.85 percent.
From July 6, partly private Phuong Nam Bank also raised its dollar savings rates by 0.5 percentage point, the bank said.
Dollar rates in Vietnam have thus risen to between 4.2 percent and 5.3 percent in the past month, from 4-4.7 percent earlier.
Vietnam cut import tariffs on many goods following its WTO accession in January and importers have increased their purchases to meet domestic consumption.
Meanwhile, rates on dong deposits have eased slightly.
Vietnam's four big lenders, including Vietcombank, quoted overnight lending rates on the dong at 4-5 percent on Monday versus 4.5-5.0 percent last Monday.
The range on six-month rates also widened to 7.8-8.7 percent, against 8.4-8.7 percent two weeks ago.
But bankers said demand for dong funds would rise in the next few months as the state poured money into key projects in ship building, transport and energy. The Planning and Investment Ministry has forecast Vietnam would boost investment for development to 118 trillion dong ($7.3 billion) between July and September, up 10 percent from the previous three-month period ending in June.
Source: Reuters
Friday, July 13, 2007
Vietnam tightens regulations on seafood export to Japan
Only the enterprises that meet the standards on food hygiene set by the Ministry of Fisheries will be allowed to export seafood to Japan.
Deputy Minister of Fisheries Luong Le Phuong has released Decision No 06 on applying urgent measures to control the chemical residues in seafood exports. Under the decision, seafood exporters will have to have 100% of their exports of crustaceans and mollusks examined for prohibited antibiotic residues
The decision will go into effect on July 26, 2007.
According to the decision, enterprises which have had 3 consignments (even prior to the enactment of the decision) determined by Japanese authorities to contain prohibited substances will not be allowed to export consignments of crustaceans (shrimp, crab) and mollusks (cuttlefish, octopus).
The Ministry of Fisheries has announced that enterprises will only be allowed to resume exports of crustacean and mollusk products to Japan after they have reported to the ministry, settled the problems effectively, and their products get the recognition from the National Fisheries Quality Assurance and Veterinary Directorate (Nafiqaved) on food hygiene.
Enterprises’ exports will only get exemption from being examined if they have at least 10 consecutive consignments of exports of crustacean and mollusk products meeting the required standards on food hygiene, and are not stopped by Japanese authorities.
The newly promulgated decision has also asked seafood processing companies to more tightly control input materials. Processors will be forced to control 100% of the materials they collect for processing. Seafood exporters will also have to write down the sources of materials on the finished products.
The Ministry of Fisheries has asked Nafiqaved to urgently build up the regulations on the supervision and inspection by state management authorities over the production conditions of enterprises.
The lately released decision on controlling the quality of seafood exports to Japan has been enacted after the red flag from the market, especially after the letter of warning from the Japanese Ambassador in Vietnam. The Ministry of Fisheries has declared a state of emergency on the quality of seafood products, and had meetings with enterprises, discussing solutions for the current problems.
Source: VNE
Deputy Minister of Fisheries Luong Le Phuong has released Decision No 06 on applying urgent measures to control the chemical residues in seafood exports. Under the decision, seafood exporters will have to have 100% of their exports of crustaceans and mollusks examined for prohibited antibiotic residues
The decision will go into effect on July 26, 2007.
According to the decision, enterprises which have had 3 consignments (even prior to the enactment of the decision) determined by Japanese authorities to contain prohibited substances will not be allowed to export consignments of crustaceans (shrimp, crab) and mollusks (cuttlefish, octopus).
The Ministry of Fisheries has announced that enterprises will only be allowed to resume exports of crustacean and mollusk products to Japan after they have reported to the ministry, settled the problems effectively, and their products get the recognition from the National Fisheries Quality Assurance and Veterinary Directorate (Nafiqaved) on food hygiene.
Enterprises’ exports will only get exemption from being examined if they have at least 10 consecutive consignments of exports of crustacean and mollusk products meeting the required standards on food hygiene, and are not stopped by Japanese authorities.
The newly promulgated decision has also asked seafood processing companies to more tightly control input materials. Processors will be forced to control 100% of the materials they collect for processing. Seafood exporters will also have to write down the sources of materials on the finished products.
The Ministry of Fisheries has asked Nafiqaved to urgently build up the regulations on the supervision and inspection by state management authorities over the production conditions of enterprises.
The lately released decision on controlling the quality of seafood exports to Japan has been enacted after the red flag from the market, especially after the letter of warning from the Japanese Ambassador in Vietnam. The Ministry of Fisheries has declared a state of emergency on the quality of seafood products, and had meetings with enterprises, discussing solutions for the current problems.
Source: VNE
Thursday, July 12, 2007
Forex trade, dong interest rates stable
Dollar/dong trading continued to be stable in the first week of the month in line with the official rate announced daily by the State Bank of Vietnam.
Both official and market rates have been reported at around VND16,130 per dollar. Importers are enjoying a zero swap point on the dollar/dong pair for tenors up to three weeks and just a few dongs as premium forward point for one-month tenor.
Regarding the county's trade balance issue, authorities have forecast a huge trade deficit, at around US$8bil, toward the year-end given that the first half's figure hit a record high of US$4.78bil.
The country has been spending lots of its foreign currencies built up from both FDI and FII flows for big projects' machinery and equipment imports.
It is reported the Vietnamese Government has decided to review the timetable for initial public offerings (IPOs) by big five State-owned banks and some giant companies this year to avoid a boost of supply that could hurt the local stock market.
IPOs by the five State-owned banks this year will be followed by several major State-run firms such as Electricity of Vietnam, Vinaphone, MobiFone and Vietnam Airlines next year and they could lead to stock prices declining from the market.
Vietcombank plans to offer its shares to the public in August 2007 together with the Mekong Delta Housing Development Bank.
Incombank plans its IPO in October 2007 and BIDV is projected to offer shares within the last quarter of this year while Agribank will launch an IPO in August next year.
The country's stock index has risen 34% so far this year, closing at 1,010.53 points by the end of last week.
The first week of July started with relatively stable Vietnam dong interest rates. The opening overnight rate on Monday offered on the inter-bank market was about 5%, higher than the closing rate of the previous week.
However, the overnight rate has steadily declined since then and reached 4.4% on July 9. Other tenors also had similar changes, which are larger for shorter tenors and not significant for six months and above.
These changes are 0.4% for one and two months, and 0.2% for three months. These declines right at the beginning of the month suggested that liquidity in the banking system remained healthy.
In the first week of July, the amount of dong withdrawals by the State Bank of Vietnam continued to be at a significant level. There was VND10.5tril taken out of the system via its open market operations and VND500bil via its weekly auctions. Once again, it proves that the dong is still in excess in the banking system.
News reports say interest rates for dollar deposits have firmed up slightly as demand for the greenback from importers is rising.
It is reported Vietnam's growing trade deficit underlined demand from importers for dollars to pay bills.
Some local commercial banks have raised their deposit rates by five to 20 percentage points per annum to meet increasing corporate demand for dollar borrowing.
Source: VNE
Both official and market rates have been reported at around VND16,130 per dollar. Importers are enjoying a zero swap point on the dollar/dong pair for tenors up to three weeks and just a few dongs as premium forward point for one-month tenor.
Regarding the county's trade balance issue, authorities have forecast a huge trade deficit, at around US$8bil, toward the year-end given that the first half's figure hit a record high of US$4.78bil.
The country has been spending lots of its foreign currencies built up from both FDI and FII flows for big projects' machinery and equipment imports.
It is reported the Vietnamese Government has decided to review the timetable for initial public offerings (IPOs) by big five State-owned banks and some giant companies this year to avoid a boost of supply that could hurt the local stock market.
IPOs by the five State-owned banks this year will be followed by several major State-run firms such as Electricity of Vietnam, Vinaphone, MobiFone and Vietnam Airlines next year and they could lead to stock prices declining from the market.
Vietcombank plans to offer its shares to the public in August 2007 together with the Mekong Delta Housing Development Bank.
Incombank plans its IPO in October 2007 and BIDV is projected to offer shares within the last quarter of this year while Agribank will launch an IPO in August next year.
The country's stock index has risen 34% so far this year, closing at 1,010.53 points by the end of last week.
The first week of July started with relatively stable Vietnam dong interest rates. The opening overnight rate on Monday offered on the inter-bank market was about 5%, higher than the closing rate of the previous week.
However, the overnight rate has steadily declined since then and reached 4.4% on July 9. Other tenors also had similar changes, which are larger for shorter tenors and not significant for six months and above.
These changes are 0.4% for one and two months, and 0.2% for three months. These declines right at the beginning of the month suggested that liquidity in the banking system remained healthy.
In the first week of July, the amount of dong withdrawals by the State Bank of Vietnam continued to be at a significant level. There was VND10.5tril taken out of the system via its open market operations and VND500bil via its weekly auctions. Once again, it proves that the dong is still in excess in the banking system.
News reports say interest rates for dollar deposits have firmed up slightly as demand for the greenback from importers is rising.
It is reported Vietnam's growing trade deficit underlined demand from importers for dollars to pay bills.
Some local commercial banks have raised their deposit rates by five to 20 percentage points per annum to meet increasing corporate demand for dollar borrowing.
Source: VNE
Wednesday, July 11, 2007
Seafood exports surpass 1.6 billion USD in first half
Viet Nam’s seafood sector recorded export revenues of 1.648 billion USD in the first six month of the year, a year-on-year increase of 17 percent. According to the Ministry of Fisheries, the figure represents the sector’s 46 percent of yearly target.
The European Union market topped the list of Vietnamese seafood importers with 24.4 percent of market share, followed by the US, 18.3 percent.
The Japanese market fell to the third place from its first position, registering 17 percent of market share.
Other importers include the Republic of Korea, 7.4 percent, Russia, 5.2 percent, China, 5.1 percent, ASEAN, 5.8 percent and other countries, 16.7 percent.
Frozen fish remains the sector’s top export item, posting a 49 percent increase in terms of volume and a rise of 35 percent in export value. It was followed by frozen shrimp, with increases of 16 percent and 39 percent in volume and value, respectively.
It is predicted that “tra” and “basa” catfish products continue to be a key factor to influence frozen fish exports.
However, strict measures should be applied to control the fast growing of tra and basa breeding in the Mekong Delta due to hike prices in the products, which has led to fry shortage and may harm the environment, said officials of the ministry.
Source: VNA
The European Union market topped the list of Vietnamese seafood importers with 24.4 percent of market share, followed by the US, 18.3 percent.
The Japanese market fell to the third place from its first position, registering 17 percent of market share.
Other importers include the Republic of Korea, 7.4 percent, Russia, 5.2 percent, China, 5.1 percent, ASEAN, 5.8 percent and other countries, 16.7 percent.
Frozen fish remains the sector’s top export item, posting a 49 percent increase in terms of volume and a rise of 35 percent in export value. It was followed by frozen shrimp, with increases of 16 percent and 39 percent in volume and value, respectively.
It is predicted that “tra” and “basa” catfish products continue to be a key factor to influence frozen fish exports.
However, strict measures should be applied to control the fast growing of tra and basa breeding in the Mekong Delta due to hike prices in the products, which has led to fry shortage and may harm the environment, said officials of the ministry.
Source: VNA
Tuesday, July 10, 2007
Vietnam forecasts 07 trade gap to hit record $8 bln
Vietnam's trade deficit is forecast to jump to a record $8 billion this year from just $4.8 billion in 2006 due to an expected surge in machinery imports, a government report said. "In the long run, this is a necessary step for overall economic growth," the Trade Ministry's Planning and Investment Department said in a report seen on Monday.
Economists said most of the machinery imports this year would be for the energy sector, including Vietnam's first oil refinery, the $2.5-billion Dung Quat plant, and a host of new power plants.
Vietnam reported a trade deficit of $4.78 billion in the first half this year with machinery imports up 46.5 percent from a year earlier to $4.4 billion.
The Trade Ministry report also attributed the widened trade deficit to increases in imports of cars and household appliances due to lower import tariffs as Vietnam implemented its World Trade Organisation commitments.
The Southeast Asian country, which joined the global trade body in January, aims to boost economic growth to 9 percent in the second half of 2007 after an expansion of 7.87 percent in the first half to achieve an annual growth of 8.5 percent.
Source: Thanh Nien
Economists said most of the machinery imports this year would be for the energy sector, including Vietnam's first oil refinery, the $2.5-billion Dung Quat plant, and a host of new power plants.
Vietnam reported a trade deficit of $4.78 billion in the first half this year with machinery imports up 46.5 percent from a year earlier to $4.4 billion.
The Trade Ministry report also attributed the widened trade deficit to increases in imports of cars and household appliances due to lower import tariffs as Vietnam implemented its World Trade Organisation commitments.
The Southeast Asian country, which joined the global trade body in January, aims to boost economic growth to 9 percent in the second half of 2007 after an expansion of 7.87 percent in the first half to achieve an annual growth of 8.5 percent.
Source: Thanh Nien
From Catfish to Computers
Vietnam has long been known as a low-cost manufacturer of Nike sneakers, blouses for Liz Claiborne, and wooden furniture, not to mention its huge exports of coffee, catfish, and rice. But a growing wave of high-tech investors is helping this country of 84 million lay the foundation to become Southeast Asia's next big center for electronics manufacturing.
The world started to take notice after Intel made big headlines more than a year ago when it announced it was building a semiconductor test-and-assembly facility in Vietnam. As expected, Intel's $1 billion investment was pivotal in raising Vietnam's profile and has since helped attract other IT companies.
"The real 'Intel effect' is starting to occur," says Henry Nguyen, managing partner at IDG Ventures Vietnam. "Upstream and downstream partners and suppliers and customers it needs are coming."
Vietnam's accession to the World Trade Organization in January is also widely seen as a boon for export potential, and the country has just unveiled an ambitious program to goose electronics exports. The government aims to see those exports grow to as much as $5 billion by 2010. According to the Vietnam Electronics Industry Assn., exports last year totaled $1.4 billion, a 34.1% increase over 2005.
Expanding Into TVs
That ambitious target is premised on the realization of some enormous investments in the pipeline. Foxconn of Taiwan, also known as Hon Hai, the world's largest contract manufacturer -- with clients like Hewlett Packard, Dell, and Apple -- has applied for a license to invest up to $5 billion. It plans to manufacture electronics and computer products including digital cameras, personal computer printed circuit motherboards, and music players.
The venture would employ up to 30,000 workers. A contract manufacturer is a company that manufactures components or products for another company under its own brand name.
Compal Electronics has unveiled plans to invest $500 million to build notebook PCs in Vietnam. It also plans to expand into LCD TVs, said Chairman Rock Hsu Sheng-Hsiung at an annual shareholders meeting in June. Compal is expected to receive its investment license in July.
A June report by industry research group iSuppli predicts that contract manufacturing in Vietnam will grow more than 100% annually between 2006 and 2011. The sector is expected to explode from $36 million in 2006 to as much as $1.8 billion by 2011 as more major manufacturers move in, making it the fastest-growing sector in the area.
Moving to Hi-Tech Park
Although these investors are focused primarily on exports, Vietnam is gradually becoming an important market in its own right. It boasts the region's second-fastest-growing economy after China, and its rapidly expanding middle class is buying up cell phones, personal computers, and iPods. There are some 10 million mobile phone subscribers, and computer penetration in Hanoi and Ho Chi Minh City is approaching 50%, says Intel.
The most recent example of this trend is Jabil Circuit of St. Petersburg, Fla., which in June began operations at its facility in Saigon Hi-Tech Park in Ho Chi Minh City, where it makes laser printers for HP. Jabil plans to spend up to $100 million on its operations in Vietnam, which is increasingly seen as an alternative to China.
"Vietnam will be able to offer us competitive costing," says C.C. Lum, Jabil's regional commodity manager for Asia Pacific. "It is also important to have a location outside China." While the minimum wage in Vietnam of about $60 per month is less than in much of coastal China, Lum says that China's extensive network of component suppliers still gives it the edge.
Training a Young Workforce
But Vietnam's reliance on imported parts will change as more suppliers follow their customers. Allied Technologies of Singapore operates three separate divisions supplying Jabil. In operation since 2005, it now employs 250 workers in metal stamping, plastic molding, and extrusion facilities for parts Jabil uses to produce HP printers.
Another big challenge is training Vietnam's young yet inexperienced workforce. The government hopes to double the number of qualified IT workers to 330,000 by 2015, of whom 240,000 will be electronics and telecom specialists. It aims for 15,000 with masters or doctorate degrees.
That's an ambitious target. In 2006, Vietnam had roughly 9,000 IT graduates, according to the Vietnam Software Assn. Lam Nguyen, director of IDC Vietnam, says the country could become a strong player more quickly if it could tap into the pool of overseas Vietnamese talent. "These overseas Vietnamese would transfer technical knowledge and innovation/creative leadership to assume cost advantages," he says.
Overseas Companies Investing
As in other emerging markets, the industry itself will take the lead in developing appropriate skills. For example, Altera, of San Jose, Calif., on June 4 announced it would establish a technology center in Ho Chi Minh City to support its global chipset development network. This is part of Altera's strategy to develop its international contingent of engineers.
One of the first overseas companies to recognize the importance of investing in the local labor force was Japanese semiconductor design company Renesas Technology. In 2004 it established Renesas Design Vietnam, which develops LSI [large scale integrated] devices for applications in consumer electronics, mobile products, and automobiles.
"The young engineers are relatively excellent, smart, and very serious about study and work," says Tsuneo Sato, chief executive officer of Renesas Vietnam, which employs 150 and plans to expand to 500 in two or three years.
He also says that unlike the Chinese, workers in Vietnam "don't so frequently job hop." However, that's likely more a function of supply and demand for engineers -- and as others wake up to the idea of the country's IT potential, staff turnover will become a big challenge there, too.
Source: Businessweek
The world started to take notice after Intel made big headlines more than a year ago when it announced it was building a semiconductor test-and-assembly facility in Vietnam. As expected, Intel's $1 billion investment was pivotal in raising Vietnam's profile and has since helped attract other IT companies.
"The real 'Intel effect' is starting to occur," says Henry Nguyen, managing partner at IDG Ventures Vietnam. "Upstream and downstream partners and suppliers and customers it needs are coming."
Vietnam's accession to the World Trade Organization in January is also widely seen as a boon for export potential, and the country has just unveiled an ambitious program to goose electronics exports. The government aims to see those exports grow to as much as $5 billion by 2010. According to the Vietnam Electronics Industry Assn., exports last year totaled $1.4 billion, a 34.1% increase over 2005.
Expanding Into TVs
That ambitious target is premised on the realization of some enormous investments in the pipeline. Foxconn of Taiwan, also known as Hon Hai, the world's largest contract manufacturer -- with clients like Hewlett Packard, Dell, and Apple -- has applied for a license to invest up to $5 billion. It plans to manufacture electronics and computer products including digital cameras, personal computer printed circuit motherboards, and music players.
The venture would employ up to 30,000 workers. A contract manufacturer is a company that manufactures components or products for another company under its own brand name.
Compal Electronics has unveiled plans to invest $500 million to build notebook PCs in Vietnam. It also plans to expand into LCD TVs, said Chairman Rock Hsu Sheng-Hsiung at an annual shareholders meeting in June. Compal is expected to receive its investment license in July.
A June report by industry research group iSuppli predicts that contract manufacturing in Vietnam will grow more than 100% annually between 2006 and 2011. The sector is expected to explode from $36 million in 2006 to as much as $1.8 billion by 2011 as more major manufacturers move in, making it the fastest-growing sector in the area.
Moving to Hi-Tech Park
Although these investors are focused primarily on exports, Vietnam is gradually becoming an important market in its own right. It boasts the region's second-fastest-growing economy after China, and its rapidly expanding middle class is buying up cell phones, personal computers, and iPods. There are some 10 million mobile phone subscribers, and computer penetration in Hanoi and Ho Chi Minh City is approaching 50%, says Intel.
The most recent example of this trend is Jabil Circuit of St. Petersburg, Fla., which in June began operations at its facility in Saigon Hi-Tech Park in Ho Chi Minh City, where it makes laser printers for HP. Jabil plans to spend up to $100 million on its operations in Vietnam, which is increasingly seen as an alternative to China.
"Vietnam will be able to offer us competitive costing," says C.C. Lum, Jabil's regional commodity manager for Asia Pacific. "It is also important to have a location outside China." While the minimum wage in Vietnam of about $60 per month is less than in much of coastal China, Lum says that China's extensive network of component suppliers still gives it the edge.
Training a Young Workforce
But Vietnam's reliance on imported parts will change as more suppliers follow their customers. Allied Technologies of Singapore operates three separate divisions supplying Jabil. In operation since 2005, it now employs 250 workers in metal stamping, plastic molding, and extrusion facilities for parts Jabil uses to produce HP printers.
Another big challenge is training Vietnam's young yet inexperienced workforce. The government hopes to double the number of qualified IT workers to 330,000 by 2015, of whom 240,000 will be electronics and telecom specialists. It aims for 15,000 with masters or doctorate degrees.
That's an ambitious target. In 2006, Vietnam had roughly 9,000 IT graduates, according to the Vietnam Software Assn. Lam Nguyen, director of IDC Vietnam, says the country could become a strong player more quickly if it could tap into the pool of overseas Vietnamese talent. "These overseas Vietnamese would transfer technical knowledge and innovation/creative leadership to assume cost advantages," he says.
Overseas Companies Investing
As in other emerging markets, the industry itself will take the lead in developing appropriate skills. For example, Altera, of San Jose, Calif., on June 4 announced it would establish a technology center in Ho Chi Minh City to support its global chipset development network. This is part of Altera's strategy to develop its international contingent of engineers.
One of the first overseas companies to recognize the importance of investing in the local labor force was Japanese semiconductor design company Renesas Technology. In 2004 it established Renesas Design Vietnam, which develops LSI [large scale integrated] devices for applications in consumer electronics, mobile products, and automobiles.
"The young engineers are relatively excellent, smart, and very serious about study and work," says Tsuneo Sato, chief executive officer of Renesas Vietnam, which employs 150 and plans to expand to 500 in two or three years.
He also says that unlike the Chinese, workers in Vietnam "don't so frequently job hop." However, that's likely more a function of supply and demand for engineers -- and as others wake up to the idea of the country's IT potential, staff turnover will become a big challenge there, too.
Source: Businessweek
Monday, July 09, 2007
Tra and Basa fish output alarmingly high
According to the Ministry of Fisheries, the output of farmed tra and basa increased sharply in the first six months of the year, estimated at 400,000 tonnes, an increase of 100% over the same period of 2006.
An alarm has been rung over the overly high productivity of tra and basa, which is believed to be causing problems for the environment. Especially, tra and basa are now being bred not only in the traditional southern provinces, but in the centre and the north as well.
The high price of tra and basa, which is now hovering at VND17-17,500/kg, has prompted people to farm fish on a large scale. The flip side of the overly ‘hot’ development of tra and basa farming is that it has caused a serious lack of breed fish, increased prices of food for fish and chemicals.
According to the Ministry of Fisheries, tra and basa farming has developed to an uncontrollable rate with the farming density of 300-500 tonnes per hectare, which, as experts have warned, will have bad impacts on the environment.
Meanwhile, farmers in central and northern provinces are happy with the successful farming of catfish on a trial basis, which, as forecast, will encourage them to farm on a larger scale. In Ha Tay province in the north, for example, farming brought the high yield of 80 tonnes per hectare, and in Nghe An in the central region, farmers could yield 150 tonnes per hectare. In the province, farmers can produce breed fish and keep parent fish through the winter.
However, experts have warned against the massive and unplanned farming of tra and basa. They said that the high production costs and low competitiveness would make farmers suffer. Moreover, a problem in processing and consumption will arise as the demand is not big enough in the domestic market.
There are 70 tra and basa processing workshops in the Mekong River Delta provinces which have the total capacity of 1.5mil tonnes a year. Yet, the establishment of the workshop does not match the development of the material area. An expert from the Ministry of Fisheries said that the biggest risk in processing and exporting seafood was that enterprises could not control material supplies.
In May 2007, Vietnam exported 27,700 tonnes of seafood, reaping $79mil, decreasingly slightly from the previous month, while still increasing considerably over the same period of the previous year. The total tra and basa exports in the first five months of the year brought $375mil in turnover, fulfilling 37.5% of the targeted turnover (over $1bil).
The fact that Russia has tightened control over chemical residues in imported seafood has greatly impacted exports of Vietnam, with exports to Russia and the Ukraine down considerably in May 2007.
Tra and basa will remain the foundation of exports of frozen products of Vietnam.
The EU has become the biggest importer of Vietnam-sourced seafood, consuming 24.4% of Vietnam’s exports, after Japan, which has applied strict control over imports from Vietnam, and dropped to third position. The US is the second biggest importer (18.3%), followed by Japan (17%), South Korea (7.4%), Russia (5.2%), China (5.1%), ASEAN (5.8%) and other markets (16.7%).
Frozen fish products remain the biggest export item (49% in quantity and 35% in turnover), followed by frozen shrimp (16% and 39%, respectively), and frozen cuttlefish (6.9% and 6.7%).
Source: VNE
An alarm has been rung over the overly high productivity of tra and basa, which is believed to be causing problems for the environment. Especially, tra and basa are now being bred not only in the traditional southern provinces, but in the centre and the north as well.
The high price of tra and basa, which is now hovering at VND17-17,500/kg, has prompted people to farm fish on a large scale. The flip side of the overly ‘hot’ development of tra and basa farming is that it has caused a serious lack of breed fish, increased prices of food for fish and chemicals.
According to the Ministry of Fisheries, tra and basa farming has developed to an uncontrollable rate with the farming density of 300-500 tonnes per hectare, which, as experts have warned, will have bad impacts on the environment.
Meanwhile, farmers in central and northern provinces are happy with the successful farming of catfish on a trial basis, which, as forecast, will encourage them to farm on a larger scale. In Ha Tay province in the north, for example, farming brought the high yield of 80 tonnes per hectare, and in Nghe An in the central region, farmers could yield 150 tonnes per hectare. In the province, farmers can produce breed fish and keep parent fish through the winter.
However, experts have warned against the massive and unplanned farming of tra and basa. They said that the high production costs and low competitiveness would make farmers suffer. Moreover, a problem in processing and consumption will arise as the demand is not big enough in the domestic market.
There are 70 tra and basa processing workshops in the Mekong River Delta provinces which have the total capacity of 1.5mil tonnes a year. Yet, the establishment of the workshop does not match the development of the material area. An expert from the Ministry of Fisheries said that the biggest risk in processing and exporting seafood was that enterprises could not control material supplies.
In May 2007, Vietnam exported 27,700 tonnes of seafood, reaping $79mil, decreasingly slightly from the previous month, while still increasing considerably over the same period of the previous year. The total tra and basa exports in the first five months of the year brought $375mil in turnover, fulfilling 37.5% of the targeted turnover (over $1bil).
The fact that Russia has tightened control over chemical residues in imported seafood has greatly impacted exports of Vietnam, with exports to Russia and the Ukraine down considerably in May 2007.
Tra and basa will remain the foundation of exports of frozen products of Vietnam.
The EU has become the biggest importer of Vietnam-sourced seafood, consuming 24.4% of Vietnam’s exports, after Japan, which has applied strict control over imports from Vietnam, and dropped to third position. The US is the second biggest importer (18.3%), followed by Japan (17%), South Korea (7.4%), Russia (5.2%), China (5.1%), ASEAN (5.8%) and other markets (16.7%).
Frozen fish products remain the biggest export item (49% in quantity and 35% in turnover), followed by frozen shrimp (16% and 39%, respectively), and frozen cuttlefish (6.9% and 6.7%).
Source: VNE
New rules aim to increase convertibility of dong
Prime Minister Nguyen Tan Dung last week approved a State Bank of Viet Nam proposal to enhance the convertibility of the dong and curb the dollarisation of the market.
By 2010, the central bank hopes to completely liberalise the foreign exchange market and have the dong dominate import-export transactions.
The proposal will also see capital transactions partly liberalised, whereby the dong will be able to act as the primary currency in borrowing and debt payment transactions.
Authorities also plan to improve enforcement of forex regulations in an effort to reduce and finally remove the illegal use of foreign currencies in the market.
Authorities will try to bring complete control of forex trading under the control of the banks and other financial institutions, and remove monetary policies that could encourage the dollarisation of the market.
The central bank hopes to make the dong more easily convertible while trying to increase foreign reserves. The Ministry of Finance will also apply suitable measures to develop the dong capital market.
The Ministry of Trade will work with the SBV to encourage the use of dong in financial transaction, particularly in trading essential goods.
The Ministry of Planning and Investment will also encourage foreign investors to use the dong in making investments.
Source: VNA
By 2010, the central bank hopes to completely liberalise the foreign exchange market and have the dong dominate import-export transactions.
The proposal will also see capital transactions partly liberalised, whereby the dong will be able to act as the primary currency in borrowing and debt payment transactions.
Authorities also plan to improve enforcement of forex regulations in an effort to reduce and finally remove the illegal use of foreign currencies in the market.
Authorities will try to bring complete control of forex trading under the control of the banks and other financial institutions, and remove monetary policies that could encourage the dollarisation of the market.
The central bank hopes to make the dong more easily convertible while trying to increase foreign reserves. The Ministry of Finance will also apply suitable measures to develop the dong capital market.
The Ministry of Trade will work with the SBV to encourage the use of dong in financial transaction, particularly in trading essential goods.
The Ministry of Planning and Investment will also encourage foreign investors to use the dong in making investments.
Source: VNA
Friday, July 06, 2007
Garment exports reach $3.4bil in first half
Textile and garment exports reached US$680mil in June, lifting the industry’s total earnings in the first six months of the year to $3.4bil, according to the Viet Nam Textile and Apparel Association (Vitas).
Though the six-month figure was up 25.9% over the same period last year, it met only 47% of the industry’s annual export target of $7bil, Vitas said.
Vitas attributed the slightly disappointing result to US monitoring of garment imports from Vietnam. The US Department of Commerce (DoC) began monitoring imports of textile and apparel products after Vietnam joined the WTO in January and quotas were lifted.
The DOC is expected to announced the results of its first biannual review in August.
Meanwhile, Vitas explained, many US companies have postponed new contracts with Vietnamese textile and garment exporters for fear of dumping actions by the DOC or US garment makers.
Vitas’s statistics showed that textile and garment exports to the US market in June rose only 30% year-on-year, while the figure was often much higher in previous years.
To deal with the reduction in orders from US importers, Vitas chairman Le Quoc An said Vitas was taking several courses of action to prevent further cancellations of orders from US businesses.
"We have appealed to the US Government to stop applying the monitoring system on Vietnamese garments and have requested international organisations to lobby on our behalf. The association has also met with US businesses to persuade them to continue importing our products."
An said the association has also requested Vietnamese businesses to make their accounts clear and transparent in line with international regulations, and to limit low-price exports to the US market.
Vitas also recommended its members expand their exports to other markets and make direct sales to overseas markets instead of acting as a sub-contractor as currently.
The Association of Garment and Textile Embroidery and Knitting (Agtex) recently asked the Government to set up a national fashion centre designed to support the nation’s garment industry in designing products and building trademarks, said Agtex vice chairman Diep Thanh Kiet.
Thanks to efforts in building trademarks and design, domestic textile and garment producers including Viet Tien have made significant successes in directly exporting their products to overseas markets.
Following successes in Australia and New Zealand, Viet Tien is working with partners to distribute products bearing its Vee Sendy mark to the US, Malaysia, Singapore and Canada.
Some domestic garment makers expected to increase their shipments to the EU market thanks to a trade promotion programme planned by the Holland Centre on Import Promotion from Developing Countries, according to the Trade Promotion Agency under the Ministry of Trade.
According to the agency, the programme would give domestic textile producers opportunities to receive consultation and training from foreign experts as well as have timely access to EU market information.
Participants might also receive foreign support to improve their products, management, marketing and market penetration.
To qualify for the programme, domestic textile firms would be required not to join with foreign partners from developed countries and have at least 51% of capital owned by Vietnamese. The rules were designed to ensure benefits of the programme don’t flow to foreign-controlled joint ventures.
Quality, price and production capacity would also have to be in line with EU market demands and firms selected for the programme would be required to comply with EU standards.
Source: VNE
Though the six-month figure was up 25.9% over the same period last year, it met only 47% of the industry’s annual export target of $7bil, Vitas said.
Vitas attributed the slightly disappointing result to US monitoring of garment imports from Vietnam. The US Department of Commerce (DoC) began monitoring imports of textile and apparel products after Vietnam joined the WTO in January and quotas were lifted.
The DOC is expected to announced the results of its first biannual review in August.
Meanwhile, Vitas explained, many US companies have postponed new contracts with Vietnamese textile and garment exporters for fear of dumping actions by the DOC or US garment makers.
Vitas’s statistics showed that textile and garment exports to the US market in June rose only 30% year-on-year, while the figure was often much higher in previous years.
To deal with the reduction in orders from US importers, Vitas chairman Le Quoc An said Vitas was taking several courses of action to prevent further cancellations of orders from US businesses.
"We have appealed to the US Government to stop applying the monitoring system on Vietnamese garments and have requested international organisations to lobby on our behalf. The association has also met with US businesses to persuade them to continue importing our products."
An said the association has also requested Vietnamese businesses to make their accounts clear and transparent in line with international regulations, and to limit low-price exports to the US market.
Vitas also recommended its members expand their exports to other markets and make direct sales to overseas markets instead of acting as a sub-contractor as currently.
The Association of Garment and Textile Embroidery and Knitting (Agtex) recently asked the Government to set up a national fashion centre designed to support the nation’s garment industry in designing products and building trademarks, said Agtex vice chairman Diep Thanh Kiet.
Thanks to efforts in building trademarks and design, domestic textile and garment producers including Viet Tien have made significant successes in directly exporting their products to overseas markets.
Following successes in Australia and New Zealand, Viet Tien is working with partners to distribute products bearing its Vee Sendy mark to the US, Malaysia, Singapore and Canada.
Some domestic garment makers expected to increase their shipments to the EU market thanks to a trade promotion programme planned by the Holland Centre on Import Promotion from Developing Countries, according to the Trade Promotion Agency under the Ministry of Trade.
According to the agency, the programme would give domestic textile producers opportunities to receive consultation and training from foreign experts as well as have timely access to EU market information.
Participants might also receive foreign support to improve their products, management, marketing and market penetration.
To qualify for the programme, domestic textile firms would be required not to join with foreign partners from developed countries and have at least 51% of capital owned by Vietnamese. The rules were designed to ensure benefits of the programme don’t flow to foreign-controlled joint ventures.
Quality, price and production capacity would also have to be in line with EU market demands and firms selected for the programme would be required to comply with EU standards.
Source: VNE
Monday, July 02, 2007
US inspects Chinese farmed seafood, Vietnam worried
The news that the US Food and Drug Administration (FDA) will detain all farmed seafood products sourced from China for examination before granting customs clearance is worrying Vietnamese enterprises.
Seafood processing companies plan to meet early this week to discuss the possible impacts of the FDA’s decision on Vietnam’s seafood exports to the US and solutions to the problem.
As FDA has announced, all consignments of farmed seafood sourced from China, including shrimp, catfish, eel, red-eyed carp, will be strictly examined. The imports will be detained at border gates for examination to find out if there are residues of prohibited substances not allowed to be used in aquaculture in the US.
Explaining its decision, FDA said that it had abundant evidence showing that Chinese farmed seafood products contained prohibited substances. David Acheson, Assistant Commissioner for Food Protection at FDA, said that the agency would only allow the admittance of imports that could meet the food hygiene requirements set by the US.
According to Fis.com, the Deputy Director of International Marketing Specialists, which specialises in providing shrimp and seafood products, has accused the FDA of acting late in preventing unsafe products from entering the US market. He said that his company had been facing the problem of unsafe seafood for the last 3-4 years. It is very likely that China has been doing this for many years, and it now does the same thing with many kinds of food. The fact that China has ordered the closure of several thousand food processing establishments confirms this.
International Marketing Specialists do not import shrimp from China any more.
7% of shrimp and 10% of catfish consumed in the US are sourced from China.
From October 2006 to May 2007, FDA routinely discovered farmed seafood products sourced from China containing prohibited antibiotics, including nitrofuran, malachite green, dye, and fluoroquinolone.
Mr Acheson said that the strict control over Chinese imports would last until FDA found it unnecessary any longer to keep control. He said that exporters must provide information to show that they had done everything to ensure products were safe.
The move by FDA has worried Vietnamese seafood processors as Vietnam is among the big seafood exporters to the US. The Vietnam Association of Seafood Exporters and Producers (VASEP) plans to gather its members on July 3 in HCM City.
At the meeting, members will discuss issues that may affect seafood exports, including the shrimp anti-dumping lawsuit, the problems with the Japanese market relating to anti-biotic residues, the inspection by Russian authorities of farming and processing establishments, and the inspection by the USFDA of Chinese products. The US now is the 4th biggest export market for Vietnam, consuming nearly 20% of Vietnam’s seafood exports. Shrimp, tra and basa are the main items exported to the market.
Source: VNE
Seafood processing companies plan to meet early this week to discuss the possible impacts of the FDA’s decision on Vietnam’s seafood exports to the US and solutions to the problem.
As FDA has announced, all consignments of farmed seafood sourced from China, including shrimp, catfish, eel, red-eyed carp, will be strictly examined. The imports will be detained at border gates for examination to find out if there are residues of prohibited substances not allowed to be used in aquaculture in the US.
Explaining its decision, FDA said that it had abundant evidence showing that Chinese farmed seafood products contained prohibited substances. David Acheson, Assistant Commissioner for Food Protection at FDA, said that the agency would only allow the admittance of imports that could meet the food hygiene requirements set by the US.
According to Fis.com, the Deputy Director of International Marketing Specialists, which specialises in providing shrimp and seafood products, has accused the FDA of acting late in preventing unsafe products from entering the US market. He said that his company had been facing the problem of unsafe seafood for the last 3-4 years. It is very likely that China has been doing this for many years, and it now does the same thing with many kinds of food. The fact that China has ordered the closure of several thousand food processing establishments confirms this.
International Marketing Specialists do not import shrimp from China any more.
7% of shrimp and 10% of catfish consumed in the US are sourced from China.
From October 2006 to May 2007, FDA routinely discovered farmed seafood products sourced from China containing prohibited antibiotics, including nitrofuran, malachite green, dye, and fluoroquinolone.
Mr Acheson said that the strict control over Chinese imports would last until FDA found it unnecessary any longer to keep control. He said that exporters must provide information to show that they had done everything to ensure products were safe.
The move by FDA has worried Vietnamese seafood processors as Vietnam is among the big seafood exporters to the US. The Vietnam Association of Seafood Exporters and Producers (VASEP) plans to gather its members on July 3 in HCM City.
At the meeting, members will discuss issues that may affect seafood exports, including the shrimp anti-dumping lawsuit, the problems with the Japanese market relating to anti-biotic residues, the inspection by Russian authorities of farming and processing establishments, and the inspection by the USFDA of Chinese products. The US now is the 4th biggest export market for Vietnam, consuming nearly 20% of Vietnam’s seafood exports. Shrimp, tra and basa are the main items exported to the market.
Source: VNE
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