City enhances trade with southern provinces

Le Hung Vong

HCM City’s process-ing plants get farm produce, seafood, food and foodstuffs from other southern cities and provinces. To ensure stable supply and keep pace with the rising demand locally and elsewhere in the country, the city has enhanced trade co-operation with 20 southern localities.

Speaking at a meeting held by the city’s Department of Industry and Trade with its counterparts from 20 southern provinces and cities late last month, Le Ngoc Dao, its deputy director, said the two sides introduced their strong areas of business hoping to set up trade co-operation programmes.

The Sai Gon Trading Corporation (SATRA) has invested in seven agricultural areas in Dong Nai, Binh Duong, Lam Dong, Long An, Tien Giang, An Giang, and Dong Thap provinces.

To ensure stable supply for its processing facilities, Vissan, a subsidiary of SATRA, has invested VND600 billion (US$28.36 million) in five animal-husbandry projects in An Giang, Binh Duong, Dong Nai, Long An, and Ba Ria – Vung Tau provinces. It also supplies goods valued at VND2.4 trillion ($113.5 million) annually to these localities.

The city supplies brood animals to 13 southern provinces and invested VND192 billion in building a plant making goods for export.

Ba Huan Co has undertaken three co-operative projects with farmers in Long An, Kien Giang, and Binh Duong. It provides them with brood animals, feed, and animal husbandry techniques worth VND350 billion and sells other products worth VND500 billion per year.

Sai Gon Co.op has five projects to set up distribution networks, co-operate for production, provide funding, and to buy products worth around VND700 billion a year from these localities.

It has outlets in 19 provinces and is expected to open another one early next year, thus having Co-op Mart outlets in all 20 southern provinces that have signed co-operation deals with HCM City.

The three wholesale markets in HCM City are supplied some 8,000 tonnes of goods daily by localities across the country, especially southern provinces.

The co-operation programme has also helped HCM City-based businesses expand their retail markets and develop distribution networks across the country.

Together, they have so far opened 64 supermarkets in southern provinces.

With two new mini-marts in An Giang and Binh Phuoc, Vinatex has 19 mini-marts in 14 out of the 20 provinces.

It is also provided capital of VND25 billion a year for market stabilisation in Binh Duong and Binh Phuoc provinces.

With support from these localities, Sai Gon Co.op and Vinatex plan to open convenience stores in Dong Nai, Dong Thap, and An Giang before expanding to the other provinces.

At the meeting, the department heads agreed to enhance exchange of information, especially about demand and supply of goods, to prevent possible speculation and gouging.

They will also create favourable conditions for firms from other southern localities to access the distribution networks in HCM City.

FDI exceeds target

Foreign direct investment in the first nine months was worth over $15 billion, meaning it has already exceeded the whole year’s target.

Processing and manufacturing attracted the largest inflows with science and technology projects coming in at a surprising third place.

Investment and the number of new projects in science and technology are on the rise, according to the Ministry of Planning and Investment’s Foreign Investment Agency (FIA).

There were 116 new projects with a total investment of $380 million against just $99 million in the whole of last year.

It accounted for a third of all the investment in the sector over the last 25 years of $1.1 billion. According to the FIA, processing and manufacturing attracted investment of nearly $13 billion, $7.6 billion of it in new projects, followed by the property sector with over $587 million.

The last quarter has already seen a sharp increase in FDI with Samsung getting a licence for an electronic components plant costing $1.2 billion at the Samsung Thai Nguyen Hi-tech Complex.

FDI to have actually been brought in this year is around $8.6 billion, a 6.4 per cent year-on-year jump, and the target of $10.5-11 billion seems achievable.

VietJet has high hopes

The country’s first private air carrier VietJet Air is confident it can raise the funds required to buy the 100 Airbus A320 aircraft for which it has already inked deals, according to Luu Duc Khanh, its managing director.

He signed an MoU with the European manufacturer on September 25.

The agreement is for buying 42 A320neo (new engine option), 14 A320ceo (current engine option) and six A321ceo aircraft, leasing eight from a third party, and an option to buy 30 more A320s, according to a press release from Airbus.

The order, not including the option, is worth about $6.1 billion at listed prices.

Khanh said while the sum is huge, the carrier has identified the sources to raise it already.

They include Government programmes to fund aircraft purchases, loans from foreign financial institutions, and an IPO, he said.

The foreign banks would only provide 20 per cent of the amount needed, he said, revealing that VietjetAir held negotiations with many of them and had the loan deals in the bag before signing the MoU with Airbus.

The aircraft to be bought would themselves be used as security for the loans.

VietjetAir has also approached the governments’ financing channels, which promises promising results since authorities have a good impressions about VietjetAir’s business model, he said.

The carrier made a pre-tax profit of VND120 billion ($5.67 million) in the first seven months of this year, which was beyond its expectations, he admitted.

At the time it started in December 2011 VietjetAir had hoped to break even only after three years.

Its fleet has expanded from three in the beginning to 10 now.

“With the number of passengers and volumes of cargo it transports, VietJet needs five to 10 aircraft every year,” he said. Demand for air transport in Viet Nam is rising and VietJet would have to expand to every destination for which there is demand, he said. — VNS

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