FDI in apparel production declines

Vietnam’s textiles and apparel sector is seeing a decline in foreign direct investment (FDI) during the past several years, and the sector is being held back by its reliance on imports of raw materials, according to the Viet Nam Textile and Apparel Association.

FDI in the sector has fallen from an annual average of US$ 460 million during the peak period of 2000-08, and the number of FDI projects has also decreased during the past three years.

Total registered capital from foreign investors in the sector for 2009 and 2010 was at $185 million and $169 million respectively.

Foreign investors also focused heavily on garment making that required low investment capital. They paid less attention to the production of raw materials and accessories such as fabrics and processing such as dyeing, that required high investment capital and high technologies and no promise of a quick return on investment, said the association.

Le Quoc An, former chairman of the association, attributed the situation to the fact that Viet Nam still lacked industrial zones specialising in fibre, textile and dyeing on large enough scale to attract major overseas companies.

Viet Nam earned $ 14 billion from textile and apparel exports last year, but it had to spend up to $ 9 billion on imports of raw materials and accessories.

An said the reliance on imports was the Vietnamese clothing industry’s greatest weakness. However, he said it was also a good opportunity for the sector to organize its investment priorities and plan for solid growth in the future.

“Once the sector does this, giant foreign investors will enter Viet Nam,” An said.

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We, Nov 16 Morning Briefing: Making Arbibration Work for You

When: Wed, Nov 16th 2011 8:00 am to 9:30 am
Where: Renaissance Riverside Hotel, 8-15 Ton Duc Thang Street, District 1, Ho Chi Minh City

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Event Background

Making Arbitration Work for You: Practical Considerations in Implementing the New Commercial Arbitration Framework

The speaker will discuss:

• Advantages and disadvantages of use of foreign litigation or foreign arbitration for settlement of disputes in Vietnam
• Use of ad hoc arbitration
• Practical considerations when selecting an arbitrator, and how to challenge a biased arbitrator
• How to quickly obtain interim relief to protect your interests in arbitration proceedings
• How to protect your confidentiality during arbitration; and consumer’s option to proceed with arbitration or not

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Vietnam Attracts Coffee Companies Seeking Supply, Dreyfus Says

Oct. 17 (Bloomberg)—International companies are expanding in Vietnam, the world’s largest producer of robusta coffee, to ensure supplies after local traders failed to fill contracts, according to Louis Dreyfus Commodities SA.

Disputes between exporters in growing countries and members of the Swiss Coffee Trade Association increased after prices jumped as much as 55 percent in the past year, said Nicolas Tamari, head of the Geneva-based association. There may have been “some movements in timing” on contracts and “we can’t say who is right and who is wrong,” Luong Van Tu, chairman of the Vietnam Coffee & Cocoa Association, said by phone Oct. 7.

Vietnam became the world’s largest producer of robusta in 1997-98, displacing Indonesia, and was the second-biggest for all types of coffee by 1999-2000, according to the U.S. Department of Agriculture. Vietnam’s crop doubled since 1999- 2000 as roasters sought to cut expenses by using more robusta, which costs about 60 percent less than the arabica preferred by Starbucks Corp., the world’s largest coffee-shop operator.

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Int’l chambers petition Gov’t to change labour rules

HCMC, Jul 27, 2011. Several foreign business chambers and associations in Vietnam have just sent a joint petition to the Prime Minister seeking reversal of new rules on foreign labor in Vietnam that will take effect next week.

The foreign business community said that provisions in Decree No.46/2011/ND-CP on recruitment and management of foreign employees in Vietnam that becomes effective on August 1 would adversely affect their business activity, and that they had not been consulted with during the process of the decree being prepared.

The petition was sent to the Prime Minister, relevant agencies and diplomats on July 22, and was signed by several foreign business groups. They include the Canadian Chamber of Commerce, the Nordic Chamber of Commerce, the Swiss Business Association, the French Chamber of Commerce, and the German Business Association.

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