BUSINESS IN BRIEF 24/8

HCM City breaks ground for Metro project; Exporters rush to opportunities in Myanmar; Thailand keen on Vietnam’s software industry  

HCM City breaks ground for Metro project < />

Deputy Prime Minister Hoang Trung Hai launched the construction of Ho Chi Minh City’s Metro line No.2 on August 24, which will eventually link Ben Thanh market in the city centre and Tham Luong in district 12.

Hai highlighted the important role the project plays in the city’s socio-economic development as it is the nation’s most populous city and constantly plagued by traffic jams.

He called on all executive agencies to focus on the quality of the project whilst still keeping on schedule.

Nguyen Do Luong, the Head of the Urban Rail Management Board, said that the 20 km long Metro line will use European technology. In the first phase, from now to 2016, almost 11.5 km of tunnel will be dug at a depth of 18 m and include 11 stations.

The cost of almost 23.7 trillion VND (over 1.2 billion USD) will come largely from international official development assistance (ODA) provided by the Asian Development Bank, the German Reconstruction Bank (KfW) and the European Investment Bank. Vietnam committs almost 3.8 trillion VND (roughly 198.9 million USD) to the project.

The project will have additional investment supplied by the Clean Technology Fund.

German Ambassador Rolf Schulze and ADB Country Director Ayumi Konishi both pledged to work closely with domestic agencies to speed up the preparatory steps for signing the credit and consultancy contracts.

Exporters rush to opportunities in Myanmar

Economists said there was a golden chance for Vietnamese businesses to export their products to Myanmar as its Government was making numerous offers to foreign traders and investors.

Just 20 percent of domestic demand in the 58 million-strong market has been met by domestic production, leaving significant room for imports.

The Myanmar Government has recently promulgated numerous policies to encourage foreign trade and investment, including mandates for establishing wholly foreign-invested companies and streamlining application procedures for business visas.

In two consecutive months, July and August, Vietnam sent two business missions to Myanmar for market surveys. Another mission with the participation of 30 companies is expected to leave for the potential market in October. The coming mission aims to study the feasibility of building a showroom and shopping centre for Vietnamese products in Yangon .

Many Vietnamese business giants have already shaken hands with Myanmar partners. The Ton Hoa Sen Group has signed a memorandum of understanding on investment in producing corrugated iron, steel and construction materials worth 300 million USD with the Myanmar Ministry of Industry 2.

A similar investment has been planned by the Hoang Anh-Gia Lai Group for a project to build a Vietnam-Myanmar trade and cultural complex in Yangon.

The Vinashin Vung Tau has planned to invest in a lobster farming project in Myanmar after success in raising cold water fish such as salmon and sturgeon.

Back from a market survey trip in August, Ngoc Linh from the Ho Chi Minh City Trade and Investment Promotion Centre guaranteed the Myanmar market is opening its door wide for Vietnamese enterprises, especially consumer goods, food processors and drug makers.

Statistics released by the Myanmar Customs Office showed that two-way trade revenues increased 86.7 percent year on year to 56 million USD in the first half of the year. Vietnam ’s exports rose by 53.5 percent to 16 million USD.

Vietnam is the 14 th largest exporter to Myanmar . Its hard currency earners ranged from materials for the garment industry to assorted steels, medicines, medical equipment, vehicle tyres and inner tubes, and building materials.

Vietnamese products such as electric lamps, medicines and aluminium products have taken a firm foothold in the Myanmar market. Dien Quang brand, for example, has become the second-best seller in electric lamps, earning some 1.5 million USD in monthly export revenues.

Products from the Hau Giang Pharmaceutical Company have become popular in this market over the past three eyars.

Vietnam’s imports included timber, rubber latex, farm produce, raw seafood and copper.

A major problem facing Vietnamese businesses is fierce competition with low-priced made-in-china products, with prices between 20 and 25 percent lower than those from Vietnam.

Linh has advised businesses to facilitate trademark promotion campaigns along with expanding distribution networks in an effort to make made-in-Vietnam products familiar to customers in Myanmar .

Ambassador Chu Cong Phung gave another piece of advice – that Vietnamese businesses should set up strong ties with Myanmar partners to help clear the way for Vietnamese exports into Myanmar.

Thailand keen on Vietnam’s software industry

Vietnam’s software market is developing rapidly and is offering good investment potential for Thai investors.

Assistant to Deputy Chairman of Thai Software Export Promotion Association (TSEP) Kittikorn Kunnlekha told the press briefing on the sidelines of a software solutions seminar in Hanoi on August 24.

In his opinion, Vietnam’s websites have not met the demand of foreign enterprises and tourists as they are written only in Vietnamese and English languages.

Vietnam should develop multi-language websites and Thai businesses are ready to help Vietnamese enterprises approach advanced software products, he said.

Deputy Director of TNT Media&Network Co., Ltd Parinya Pongpipat said he hoped that his company would have more chances to cooperate with Vietnamese enterprises in the finance, banking and insurance sectors.

He also highly valued Vietnam ’s internet growth as well as the boom of e-trade through local enterprises.

“The software industry is a promising sector in Vietnam and we can see a bright future for our products in Vietnam,” he said.

A delegation of 16 Thai leading software designers in civil engineering, hospitality, finance-banking, tourism, delivery service and health care is attending the software exhibition cum seminar in Hanoi.

After the organisation of two similar seminars in Vietnam since 2008, many Vietnamese companies have seen success in cooperating with Thai partners.

Pump demand expected to grow by 10%

The market for pumps in all industrial segments in Vietnam is expected to increase at least 10 percent a year over the next 10 years, a pump company director has said.

Gert Borrits, general director of the Danish-based Grundfos in Vietnam, said the country is an attractive market for foreign companies to invest, especially in beer, foodstuff and industrial equipment.

“These industries create a huge need for pumps and pump systems, especially energy-saving ones, including high-pressure services for steam, water and waste water services,” Gert said.

Currently, Grundfos holds the largest market share of the pump market in Vietnam after two years of operation, offering products including circulator pumps, submersible pumps and centrifugal pumps.

It plans to employ more staff in Vietnam to serve its business expansion needs as well as develop its after-sales services nationwide.

“We hope to set up some factories here also because we think Vietnam is a very good place to produce pump products,” Gert said.

“We already have a huge investment in China and now we are looking at Thailand, Malaysia and Vietnam,” he said.

Last week, the company organised an industrial solution seminar in HCM City to introduce its sanitary range to 200 businesses in the food and water treatment industries and other sectors.

Brand buzz secured by breakthrough ideas

Breakthrough creative ideas are more important in securing brand buzz than official sponsorship during an event like the football World Cup, according to a recent report by Cimigo, an independent team of marketing and brand research specialists.

Being an official sponsor of the World Cup was not necessarily sufficient to secure brand recognition, the 2010 Football World Cup Communication Landscape survey found.

Cimigo interviewed 1,000 Vietnamese in HCM City and Hanoi about what they saw, heard, felt, bought and consumed during the 19th FIFA World Cup in June and July. Cimigo engaged a community of 50 fans to understand the World Cup brand buzz.

“Many brands seek to be associated with the Football World Cup and tap into the extreme emotions and sense of belonging with fans, teams, nations and the world,” Tom Skilbeck, director at Cimigo, said.

However, official sponsorship does not always guarantee that a brand will get all the buzz and association with the sport, the event or the fans.

“Among the top 10 brands creating a buzz and association with the World Cup, only four were official sponsors,” he said.

The brands that created the most buzz around the Football World Cup included Coca-Cola, Pepsi, Tiger, Sony, Samsung, Heineken, Castrol, Nokia, Adidas and The Gioi Di Dong.

Of these, Coca-Cola, Sony, Castrol and Adidas were the only official sponsors.

“Advertising proved critical,” Skilbeck said.

True buzz was generated by exciting live events, World Cup-related promotions and online contests.

For example, Pepsi’s TV commercial propelled the association of the World Cup with Pepsi to second place behind Coca-Cola.

The Pepsi advert used a football star line-up, including Vietnam’s first and third favourite players, Lionel Messi and Ricardo Izecson dos Santos Leite (Kaka), along with other stars including Thierry Henry, Frank Lampard and Didier Drogba.

Pepsi paid large endorsement fees to these celebrities, and most people in Viet Nam assumed that the company was an official sponsor. Coca-Cola was the most associated brand with the World Cup.

Skilbeck said the company “did a fantastic all-round marketing effort” including strong TV advertising supported by the World Cup Trophy Event, under-the-bottlecap promotion and online contests.

The Mobile World Handset retail chain, or The Gioi Di Dong, with 56 branches nationwide cut through with compelling promotions, according to the survey.

Mekong province promotes foreign investment

Long An province in the key southern economic zone presented a list of its advantages and made offers to Japanese businesses at a meeting with the Outward mission on August 23.

Pham Van Ranh, Vice Chairman of the provincial People’s Committee, said like other parts of the country, Long An has emerged as a destination for foreign investors, citing advantages of political stability, steady economic growth and an industrious workforce.

“The province has a good land reserve for industrial and urban development and infrastructure construction,” Ranh said.

Long An authorities confirmed that labour strikes in foreign companies did not make any impact on the province. They also presented a new model for small investors who may rent a lot of just 100 sq. m. of land in the Long Hau industrial zone. Japanese investors were also assured of administrative reforms with very simple paper work.

Licences will be issued in 24 hours after all forms are filled, authorities emphasised.

The Mekong Delta province has so far granted licences for 328 foreign investment projects capitalised at almost 3.18 billion USD, including the 11 projects by Japanese investors with a combined investment of 188 million USD. One of the 11 Japanese-invested projects was licensed in 2010 with a capital of 100 million USD.

The Japanese business mission, led by Sato Shi Abe, Director of the ASEAN investment sharing sector under the Japan centre, was shown around several industrial zones. The guests also visited the Vina Eco Board Limited Liability Company under the Sumitomo Group and the Kaiyo Seafood Processing Company.

Source: VNA

Tags: Coca Cola, Football World, Football World Cup, Million Usd, The Football World, The Football World Cup, The Myanmar, The Project, The World, The World Cup, World Cup, Physics games

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