US$1.5 million for wireless facilities in Hanoi, HCM City

13:00' 19/06/2007 (GMT+7)

VietNamNet Bridge - FPT Telecom, a subsidiary of the FPT Group, plans to invest US$1.5 million to build free wireless facilities in Hanoi and HCM City. This is a project called Wifi City, in which the investor aims to create a community which is big enough to create sources of income for Internet and mobile phone based value added services. In the Wifi City, people can freely and make Internet connections at any place, in their houses or on the streets, by laptops or mobile phones. However, that is in the future. At present, to use Wifi service, users have to come to places which have wireless Internet stations. Hanoi currently has 2,200 sites and HCM City 2,800 sites, mainly at universities, bookstores, cafes, restaurants, banks, and securities trading floors. In ideal conditions, a station can operate within 100m and can serve 20 users at the same time. From now to the year’s end, FPT Telecom will build an additional 3,000 wireless facilities at public sites where it expects to have many people use wireless Internet service. Everything will be free of charge, from installation fees to equipment, subscription fees to using fees, etc. Both the owner of the site and Internet users don’t have to pay anything. Many people question how will FPT Telecom benefit from this project? Spending $1.5 million in building infrastructure for Wifi cities will benefit the investor in the long-run. Creating free Internet connection sites will encourage users to exploit this free-of-charge source. This is the opportunity for the providers of modern mobile phones which have web service, for example Nokia mobile phones, a major partner of FPT Telecom in the Wifi City project. Not only does FPT Telecom want to build the foundation for a city of technology where everybody can make a wireless Internet connection anywhere, any time but some others also plan to test the Wimax (World Interoperability for Microwave Access) system. Compared to Wifi, a Wimax station can serve Internet users within a diameter of several kilometers. However, this system can classify its clients while everybody is equal for Wifi. (Source: SGTT

Hanoi to modernise agriculture

10:57' 19/06/2007 (GMT+7)

VietNamNet Bridge – Development officials in the capital are determined to boost socio-economic growth in outlying rural and suburban districts through projects that focus on rural modernisation during the 2006-10 stage. Farmers plant vegetables using safer, cleaner methods in Van Noi Commune, Dong Anh District, Hanoi. According to the city's Department of Agriculture and Rural Development, the capital now has five outlying districts with 104 communes and towns. Among them, 98 communes have 74,219ha of agricultural land, accounting for 80% of the city's total area. The city's Party Committee Secretary, Pham Quang Nghi, said that land and residents are the key elements of agriculture and rural areas outside the city. He made the statement at a working session on Tuesday with the Department of Agriculture and Rural Development, where he asked the department to continue to copy and develop crop strains, transfer technologies to farmers, and turn rural and suburban land into bio-urban areas to produce more safe, high quality farm produce. He also highlighted the need for reforestation and clean water areas. Applying advanced, environmental friendly technologies to production to protect and improve the city's environment are key parts of the process, he said. Currently, the city's agriculture sector has fallen behind in applying advanced technologies, a cause for alarm due to its crucial role in developing clean food and protecting the city's environment. By implementing the city Party Committee's Programme No 5 on development of agriculture and rural areas, the city has gained an average production value of VND59.1mil per ha. Hanoi now has 500 farms, with an average production value of VND80-150mil per ha. City developers have shaped a course for developing clean vegetables, fruit trees, flowers and aquaculture on earmarked land. The department invested in small- and medium-sized industrial zones with five projects focusing on developing handicraft villages. Builders completed Tu Liem and Ninh Hiep industrial parks at the end of March. To ensure access to clean water, city development officials have built 71 water supply stations. More than 93% of the population can access water in towns like Soc Son and Cau Dien, where clean water supply systems were previously unavailable. The environment Each day, 58,000 cattle, 406,000 pigs and poultry numbering in the millions create 2,800 tonnes of waste in the city's five outlying districts, a problem that the city Department of Agriculture and Rural Development began analysing back in 1997, when officials asked the Agriculture Promotion Centre to build bio-gas tanks to process livestock waste. The districts now have more than 4,000 biogas tanks, which process animal dung to create gas, and, in turn, electricity, for farmers. As Hanoi's urbanisation continues at a rapid rate - especially in outlying districts - only about 40 communes have managed to maintain stable agricultural areas, according to the city's Department of Planning and Architecture. Deputy director of the city's Department of Planning and Architecture, Do Viet Chien, said it was necessary to maintain stable agricultural areas even in districts, that have rapid urbanisation, such as Tu Liem District. In response, developers earmarked areas for varying agricultural production projects, such as concentrating vegetables in Yen My and Duyen Ha communes of Thanh Tri District; Dang Xa and Van Duc communes in Gia Lam District; Van Noi and Nam Hong communes in Dong Anh District; and Thanh Xuan Commune in Soc Son District. With so much development and land redistributon by the State, Chien said, city officials decided to alter the labour market by building vocational centres for job training. The centres are part of short-term training projects helping rural labourers, who have had their land taken by the State, to learn a new trade. Chien said that among the plans for urbanisation in the last five years, there were areas earmarked for job training and measures to attract labourers to work in industrial zones or to learn an urban trade. (Source: Viet Nam Ner)

The UK’s second wave of investment begins to rise

12:59' 19/06/2007 (GMT+7)

UK Ambassador to Vietnam Robert Gordon VietNamNet Bridge - The second wave of investment of the UK in Vietnam with the participation of big corporations in financial services, oil and gas, software, mining and telecom has begun to appear, affirmed Robert Gordon, UK Ambassador to Vietnam in a talk with the press about the economic relations between Vietnam and the UK. Talks with the UK Ambassador With nearly four years in Vietnam, you have contributed to promote the ties between Vietnam and the UK in many areas. What fields are you satisfied with the most and what fields do the two countries need to promote in the future? The relationships between Vietnam and the UK are more diversified. The UK has become one of the largest non-refundable aid providers for Vietnam. The signing of the 10-year development partnership agreement in 2006 is the peak in my term. Along with opening opportunities when Vietnam becomes a member of the World Trade Organisation (WTO), challenges in sensitive areas of Vietnam are also very big. Those fields require special attention and we are assisting Vietnam to get this attention through the “Post-WTO” initiative/project. Another new challenge that can make remarkable influences on Vietnam is the challenge that originates from climate change and the global warming phenomenon. We took climate change as the topic of the British Queen’s birthday party in Hanoi this June. We want to cooperate with Vietnam to raise awareness in this issue and to help Vietnam have suitable preparations. New waves of investment from Japan, the US, and the Republic of Korea are now mentioned very often. As one of the biggest investors of the European Union in Vietnam, should we have much hope about a new wave of investment from the UK in the near future? The UK is now an important investor in Vietnam. We are proud of what British famous companies such as Prudential, BP, Unilever, Tate & Lyle and others have performed in Vietnam. With opportunities of the post-WTO period, Vietnam is being known more in Britain and we have seen the second wave of investment of the UK in Vietnam. This wave brings to Vietnam big companies operating in the areas of financial services, oil and gas, software, mining and telecom. If those projects are successful, the volume of new investment capital of Britain in Vietnam may be very large. Last year the UK’s import turnover from Vietnam was ten times higher than its export revenue to Vietnam. Does the country plan to balance its trade with Vietnam? For the UK, actually, trade is as significant as supporting Vietnam’s economic development. By opening our market for Vietnamese goods, we are creating jobs for thousands of Vietnamese labourers. The above trade deficit statistics doesn’t reflect the real picture of trade between the two countries because the re-export via the third countries needs to be considered. Trade deficits can be partly balanced by invisible incomes from services. I believe that there are many chances for British export goods to Vietnam. To solve hindrances for the both sides in trade exchange, we are building the Joint Economic and Trade Committee between the two sides (Prime Minister Nguyen Tan Dung and his British counterpart Tony Blair expressed their great support to the establishment of this committee). The first meeting of this committee is slated for this year’s end. Could you make a sketch of the trade picture between the two countries in the next five years? By 2012, Vietnam will complete its WTO accession commitments. At that time, the economy of the two countries will integrate deeply and widely into the world economy. Other initiatives like the EU-ASEAN Free Trade Area will promote this process. Vietnam’s goods will be very popular in the UK. Vietnam’s first big companies will open their offices in London. Vietnamese companies will list their stocks on the London Stock Exchange. Many British investors will buy stocks of newly equitised firms and banks of Vietnam. Vietnamese consumers will have more chances to have access to British financial and telecom services in Vietnam. As a country which has per capita income at the medium level, Vietnam will be less dependent on preferential grants for large infrastructure and financial demands. We can see the first private-state partnerships that will provide funds for important projects like school and hospital building in Vietnam. (Source: Dau tu)

Vietnam proves promising retail market

13:16' 19/06/2007 (GMT+7)

VietNamNet Bridge - Japanese electronic retailer Best Denki is negotiating with its Vietnamese partner to establish a joint venture after their franchise contract proved a great success. Best Denki and the Ben Thanh Marketing Company, which owns Carings home appliance trademark, are expected to launch their joint venture in January 2008. Best Denki aims to become one of the biggest electronics distributors in Vietnam in the next five years, said C.J. Raj, Regional Marketing and Business Development Director of Best Denki in Singapore. The group will inject money into a plan to open 10 more home appliance supermarkets in big cities like Ho Chi Minh City, the Mekong Delta city of Can Tho, the central city of Da Nang, and the northern port city of Hai Phong. Best Denki is among the many foreign companies which are looking to secure a firm foothold in Vietnam, rated the world’s third attractive retail market by a recent survey of US leading consultancy group, AT Kearney. Some earlier birds have reaped success, such as Germany’s Metro Cash & Carry, France’s Bourbon, Malaysia’s Parkson, Japan’s Zen Plaza and the Republic of Korea’s Diamond Plaza. The world’s leading retail groups such as Wal-mart of the US, Carefour of France and Tesco of the UK are also eyeing Vietnam. With the appearance of the giant distributors in the market, experts say, the fierce competition among distributors has begun, sooner than the expected time in 2009, when Vietnam allows foreign retail companies to set up wholly foreign-invested companies in the country under its commitments for World Trade Organisation accession. Vietnamese distributors now are expanding business networks to create invigorated competitiveness. The establishment of the Vietnam Distribution Association Network Development and Investment Joint Stock Co. (VDA) was seen as the start of an industry trend geared towards greater cooperation between retailers. The association was formed after the country’s four major retailers - the Ha Noi Trading Corporation (Hapro), Ho Chi Minh City Union of Trading Cooperatives (Saigon Co-op), Saigon Trading Corporation (Satra) and Phu Thai Trading Company - had earlier agreed to link up on the deal. The Trung Nguyen ( Central Highlands ) Coffee Company was also a pioneer in expanding retail network. By late 2006, the company's G7 Mart system increased to 5,500 retail outlets across the country. The enterprise is pursuing a mammoth target of opening an additional 10,000 outlets and building 18 wholesale points and seven trade centres in the next five years. The total investment for these projects is estimated at nearly 400 million USD. "Our objective is to gather Vietnamese producers to form a strong distribution system that is competitive with foreign distributors," said the company's General Director Dang Le Nguyen Vu. Many other enterprises have been in a hurry to implement projects to develop their retail systems nationwide. The FPT Information Technology Group has poured 40 billion VND (2.5 million USD) into a company that specialises in health, educational, scientific and technological products. The enterprise has launched on-line service which combines the provision of goods by nearly 500 producers nationwide. The Vietnam Garment and Textile Group (Vinatex) has come off well with a chain of 40 supermarkets in almost all big cities in the country. The group hopes to double the number by 2010. Together with challenges in competition, Vietnam 's commitment to open its retail market is offering Vietnamese enterprises many opportunities to become stronger. The increased investment of domestic and foreign investors has helped develop the Vietnamese retail market in a more diversified and professional manner, creating more distribution channels for customers. (Source: Viet Nam Net)

Vietnamese President arrives in US

09:26' 19/06/2007 (GMT+7)

VietNamNet Bridge – After a 20-hours flight, the Vietnamese delegation arrived in the US at 5pm of June 18 (US time) or 7am of June 19 (Vietnam time). Immediately after arriving in the US, President Nguyen Minh Triet met with overseas Vietnamese. These are the first photos of President Nguyen Minh Triet in the US: President Nguyen Minh Triet, his wife and Deputy Prime Minister - Foreign Minister Pham Gia Khiem. President Nguyen Minh Triet met with overseas Vietnamese. N.A.T

Burning race to invest in telecom

08:36' 19/06/2007 (GMT+7)

NTT-DoCoMo will participate in big telecom events in Vietnam this year. VietNamNet Bridge – Foreign telecom firms have made some moves in Vietnam: investing in Vietnamese telecom companies by purchasing stocks. However, it is said to be difficult because the supply is limited. In September 2006, in a press conference before the Vietnam Telecom 2006 exhibition in HCM City, the chief representative of France Telecom, frankly stated: “We want to buy stocks of some Vietnamese telecom companies, for example stocks of mobile information companies like MobiFone, VinaPhone…” Ten months have passed and many moves have been made, perhaps including clandestine negotiations among related sites, and the ‘faces of giants’ have gradually appeared. In early May 2007, Norway’s Telenor, the biggest mobile information and television service provider in northern Europe, sponsored the “Mobile Vietnam 2007” event in Hanoi and expressed its plan to invest in Vietnamese mobile information firms. On May 29, in a press conference in HCM City on its social charity programmes in Vietnam, a representative of SK Telecom said that the firm wanted to equitise the CDMA technology-based S-Fone mobile information network, a business cooperation project with Vietnam’s Saigon Telecom JS Company. On June 13, at the press conference to introduce the Vietnam Comm 2007 exhibition in HCM City, Bui Quoc Viet, Director of the Postal Information Centre of the Vietnam Post and Telecommunications Group (VNPT), said: “Many foreign telecom groups have opened representative offices in Vietnam to wait for opportunities to invest in mobile information companies.” According to some sources, American telecom groups want to buy stocks of Vietnam’s mobile information companies through Korean and Taiwanese firms. The race begins Three mobile information firms that are targeted by foreign telecom groups – MobiFone, VinaPhone and Viettel Mobile – will sell stocks in the near future. Bui Quoc Viet, Director of the VNPT’s Postal Information Centre, said that under the current rules, foreign investors couldn’t buy more than 49% of the stocks of Vietnamese mobile information firms. By the end of 2008 or early 2009, foreign investors will be allowed to make joint ventures with Vietnamese partners and after 2010 they can establish wholly foreign-owned firms in the telecom field in Vietnam. In the race to invest in Vietnam’s mobile information companies, France Telecom has the advantage of being an early comer. It is now the second largest mobile information service provider in Europe, with 88 million mobile phone subscribers, 48 million fixed phone subscribers and 11 million Internet subscribers in 220 countries and territories. Its revenue was Eur49 billion in 2005. Another big rival is NTT-DoCoMo from Japan, which has more than 50 million mobile phone subscribers and 135 million Internet subscribers. This group began its world expansion strategy in 2005 through modern value added services for mobile phone subscribers. Norway’s Telenor has opened a representative office in Vietnam but its name is not popular. This group has more than 40 million customers in Asia and in the first quarter of 2007, Telenor boosted its investment in this region with more than $350 million of investment capital, up 40% over the same period of 2006. Other big names that have opened representative offices in Vietnam are VodaPhone of the UK and Lucent of France. The participation of big names in the race to invest in mobile information companies in Vietnam has made the competition fiercer but they still have to wait till Vietnamese companies announce the names of their foreign partners. (Source: Lao dong)

Local tea processors weeping over yellow tea

17:11' 18/06/2007 (GMT+7)

VietNamNet Bridge – Farmers are rushing to pick tea leaves to sell to Chinese businessmen which will be used to process yellow tea, while local tea processors are crying about the material shortage for domestic processing. Tran Van Gia, Deputy Chairman of the Vietnam Tea Association, has voiced his deep concern about the material tea shortage. At this moment, Chinese businessmen are trying to collect as much tea as possible in Vietnam to process yellow tea which will be used during the 2008 Olympics in China. Hunting for materials In the last two months, material tea markets in the north, especially in border and midland provinces, saw many Chinese businessmen come to collect materials for processing yellow tea, which is favoured much in the market with more than one billion consumers. The Chinese businessmen collect not only dried tea, but fresh tender tea leaves and rudimentary processing tools as well. The massive collection has led to abnormal price increases. In Lao Cai province, for example, one kilogramme of tea is selling at VND25,000 instead of VND15,000. At the end of April and in early May, the yellow tea processed by Shan Tuyet Suoi Giang tea was sold at VND90,000/kg at the Muong Khuong border gate, while Shan Tuyet Bac Ha tea was sold for VND75,000/kg at the Phong Tho border gate in Lai Chau province. In midland provinces like Phu Tho and Tuyen Quang, the fresh material price rose to VND5,000/kg, or double the normal price. The materials provided by northern provinces seems to be not enough for Chinese businessmen, who subsequently have gone to Lam Dong province in the south to collect materials. According to Tran Van Gia, Hong Kong previously imported 1,500-1,700 tonnes of Vietnam’s Shan Tuyet tea every year to make yellow tea. However, Vietnamese dealers, who did not have good knowledge about yellow tea, bought the tea grown in midland provinces and put it out to dry in the sun to make it similar to yellow tea. Meanwhile, farmers, who could sell tea for good prices to Vietnamese dealers, picked tea leaves earlier which caused the yield to go down by 30%. Yellow tea making processors miserable Mr Gia said that the “yellow tea fever” had led to the overexploitation of the tea plant, which makes the quality of tea leaves worse due to the bad picking techniques. He said that now Chinese businessmen refused to buy counterfeit yellow tea; therefore, 5-7,000 tonnes of tea have been left unsold. Meanwhile, tea processing plants are seriously lacking materials to run. Many tea processors have been incurring debts as they have breaking contracts due to the material shortage, making many workers jobless. The prestige of Vietnam-made tea has been seriously affected as foreign enterprises have turned their backs on Vietnam’s tea. A foreign company has sued the Song Lo and Nghe An Tea Companies for breach of contract. VTA has warned that if the situation cannot be improved and the ‘yellow tea bleeding’ continues, more plants will have to shut down. Ha Yen

Sugar industry: misfortunes in the past

17:09' 18/06/2007 (GMT+7)

VietNamNet Bridge – Sugar processing plants made profit in the last three full years (2004-2006) after a long period of suffering losses. Deputy Minister of Agriculture and Rural Development Diep Kinh Tan said that it was now believable that sugar plants would stay alive and develop. What would you say about the 2006-2007 sugar cane crop? Deputy Minister of Agriculture and Rural Development 2007 will be the fourth consecutive year that sees local sugar processing plants make profit. The gap between regional and domestic prices has been narrowed; therefore, sugar smuggling is not a headache for state management authorities any longer. Material growing areas have been developed well with the sugar cane growing area increasing by 20%. Sugar plants have been running at full capacity. However, several plants are still facing difficulties as they did not pay appropriate attention to material area development. Seven sugar companies are still under restructuring, four of which are eligible for equitisation, three other are in big difficulties, namely Thoi Binh, Kon Tum and Son La. One sugar company, Kien Giang, may be dissolved as it was shut down in 2006 due to lack of materials. You said that more than 90% of sugar companies make profit. However, some experts said that the figure remains unachievable as the sugar volume kept in circulation is big, while the prices are fluctuating. What would you say about this? The figures I have are not the final, so I cannot confirm 90% or more than 90% of sugar plants make profit. But I can assure you that the 90% figure is within reach. Sugar plants have been paying special attention to material area development and production capacity raising, and thus can reduce production costs. I’ve been to many sugar plants. On average, every plant runs at the capacity of 1,000-1,500 tonnes of sugarcane a day, and makes the profit of VND10-15bil a year. Some of the plants even make higher profit, VND30-40bil. I have to say that some plants are still facing financial difficulties, like Son La. It has been running at 180% of its designed capacity this year, but it still incurs losses as it has to pay interest on banks loans, while the interest from sugar processing is not high. How has Decision 28 on equitising sugar plants helped the sugar industry? Can we now say that the misfortunes are past? I can say that the decision has ‘untied’ the sugar industry. If the decision was not made, the sugar industry would die. Now 32-33 plants out of the existing 36 plants have made profit in the last three consecutive years. Though the sugar price once dropped to VND6,300/kg, sugar plants could still make profit. The big gap between regional and domestic sugar prices has been narrowed. Thailand-made sugar is selling at VND5,000/kg, while Vietnam-made product is selling at VND5,500/kg. If domestic plants expand production and improve management skills, production costs will be even lower. It is too early to talk about the possibility of exporting sugar. The task now for the local sugar industry is to dominate the domestic market, preventing foreign-made products from entering the market. We have five years ahead before having to open the sugar market under WTO commitments. With the market opening roadmap, I believe that the sugar industry will stay alive. The Vietnam Sugar Cane and Sugar Association has stressed the need of applying measures to encourage agricultural development and to reduce state owned capital contributions in sugar plants. What does MARD think about this? Agriculture encouragement is fine because this does not violate WTO rules. In fact, MARD has been trying to do that, but the efficiency was low. I have to stress the need to develop the material area. The Quang Ngai sugar plant, for example, saw the yield of 40 tonnes per hectare in the pre-liberalisation period. 40 years later, the yield is just a little higher, at 44 tonnes/ha, far below the average yield of the country at 54 tonnes/ha. Only by developing material areas well can sugar plants lower production costs. Regarding equitisation, the Government does not intend to hold the controlling stakes, or even to make capital contributions in sugar plants. Ha Yen