Last update 7/7/2012 7:00:00 AM (GMT+7)

Vietnam Airlines opens Hanoi-Chengdu route

The national flag carrier Vietnam Airlines (VNA) on June 27 officially opened a direct route between Hanoi (Vietnam) and Chengdu (China) with aircraft Fokker 70 running three times per week on Wednesday, Friday and Sunday.

The plane takes off from Hanoi at 12.10am and from Chengdu at 4.15pm (local time) and the flight duration is two hours.

VNA deputy general director Trinh Hong Quang said the opening of the sixth direct route to China has raised VNA’s total number of direct flights between the two countries to 36 per week.

As of July 12, there will be 2 flights per week from Incheon (Seoul, the Republic of Korea) to Cam Ranh (Khanh Hoa, Vietnam) and vice versa. A representative of Cathay Pacific Airlines (Hong Kong) said the Hong Kong-Danang direct route will be opened in the next two months.

A representative of Egypt Air in Southeast Asia has worked with travel agencies in Ho Chi Minh City and Hanoi on the opening of a direct air route to Cairo (Egypt) with the frequency of one flight per day.  

Report on industrial investment in Vietnam announced

The Vietnam Industrial Investment Report 2011 and the Vietnam Investment Monitoring Platform (V-IMP) was released in Hanoi on June 27.   

The report was jointly conducted by the Ministry of Planning and Investment’s Foreign Investment Agency (FIA) and the UN Industrial Development Organisation.

With an investment of US$975,000 from the United Nations Foundation, the V-IMP project aims to monitor 1,944 enterprises in nine provinces across in Vietnam.

Of the number, 33 percent are small and medium sized enterprises, mainly operating in mechanics, textiles, rubber and household plastics.

By monitoring the enterprises, V-IMP is expected to help the project management board have a clearer insight into investment restructuring, which plays an important role in promoting investment in Vietnam.

The V-IMP project’s debut will contribute to the better management of future FDI projects in Vietnam, said FIA Director Do Nhat Hoang.

Oil refinery exports biofuel to Philippines

The PetroVietnam Central Biofuels Joint Stock Company (PCB) shipped 4,300 cubic meters of ethanol products from Dung Quat Oil Refinery in the central province of Quang Ngai to the Philippines on June 26.

The PCB plant was completed in March 2012 and uses raw sliced cassava to produce ethanol.

Its output is 100,000 cubic meters a year, 5 percent of which is for the domestic market and the rest for exports, mainly to the Philippines.

Ethanol is used to produce the biofuel E5, which is used in internal combustion engines such as motorcycles and cars.

Industrial production recovers slightly in June

The Index of Industrial Production (IIP) recovered slightly in June, inching up 2 percent against the previous month, the General Statistics Office (GSO) reported on June 27.
However, the office said, the index’s growth in the first half of the year remained low at 4.5 percent compared with the rising rates of 9.7 percent at the same period in 2011 and 8.9 percent during 2010.

It attributed the pessimistic result to the low 4.3 percent surge in the processing and manufacturing industry, which accounts for more than 75 percent of the country’s total industrial production value.

Industry growth during the same period of the past few years was more than 12.5 percent.

The low index showed that the country’s industrial sector still faced production and market difficulties in both domestic and foreign markets, the office’s experts said.

The consumption of the processing and manufacturing industry, for example, surged only 3.6 percent as of June 1, resulting in an inventory index of up to 26 percent, tripling that of the same period of previous years.

A series of products reported high inventories in the first six months. The mining industry had 9.3 million tonnes of unsold coal, double that of the same period last year.

The inventory index of engine vehicles as well as fruit and vegetables also surged more than 110 percent.

Despite difficulties, several industries still experienced surges in production, of which crude oil rose 12.4 percent to more than 8.1 million tonnes, power by 14.8 percent to 55 billion KWh, washing machines by 32.6 percent to 427,000 units and footwear by 21.6 percent to 29 million pairs.

To boost industrial production, the GSO experts urged the Government to take action in helping industrial producers up consumption and access low interest rate credit.

Japanese owned garments factory opens in Hue

The Japanese based company ‘Tokyo Style’ opened a new US$ 21 million factory in the central province of Thua Thien-Hue on June 26.

The wholly Japanese invested facility is located in Phu Bai Industrial Zone and has an operating license of over 50 years.

The factory has the capacity to produce approximately 500,000 products a year, with only 5 percent to be sold on the domestic market.

In the future, the company hopes to raise domestic sales to 30 percent.

Cambodia, Vietnam boost forestry co-operation

The Vietnamese and Cambodian forestry administrations signed a Memorandum of Understanding (MoU) to boost co-operation in Hanoi on June 27.

Accordingly, the two countries will enhance exchange of information, knowledge and experience in designing and implementing forestry-related strategies and programmes. They will strengthen co-operation in forest fire management, timber and wildlife transport and trade controlling, forest management and protection over a period of five years.

They will carry out activities to adapt to the changes of international timber markets to raise public awareness of forest resource protection and to better implement regional and international commitments towards forestry.

Chea Sam Ang, deputy director general of Cambodia’s Forestry Administration, expected that with the MoU, the two countries will make joint efforts in law enforcement in forest management as well as forest product trade to monitor and prevent cross-border transportation of illegal timber, especially along their shared border areas.

Vietconstech 2012 exhibition opens in Hanoi

An international exhibition of construction technology, Vietconstech 2012, is running at the Vietnam Exhibition and Fair Centre in Hanoi from June 27-29.

Co-organized by the Ministry of Construction and the Ministry of Science and Technology for the first time, the exhibition has 168 stands from 80 leading domestic and foreign enterprises working in the fields of civil engineering and industrial construction, waterway and aviation transport.

The exhibition features presentations by the International Nuclear Energy Development of Japan Co. (JINED) and the Shimizu Group, Japan, on new construction technologies and solutions to ensure safety for atomic power plants and metro systems.

Minister of Construction Trinh Dinh Dung said that Vietconstech 2012 is an opportunity for enterprises to introduce their products and technologies, as well as boosting trade cooperation.

State Bank to halt all gold lending

The State Bank of Vietnam has issued a directive requiring credit institutions to comply with a deadline to halt mobilization and lending in gold from November.

Accordingly, institutions will issue only short-term gold certificates to pay customers upon request, termination of which falls on November 25.

Before issuance, institutions must report to the State Bank clarifying the need and purpose and drawing up effective roadmaps to meet the deadline.

The State Bank said it will strictly monitor the market to ensure compliance.

It expects the new regulation to help prevent gold speculation, which is popular throughout the country. Strict control over gold transactions is considered as part of efforts to stabilize the economy.

Currently, banks often mobilize capital in gold from the public to sell for Dong (VND) to settle liquidity problems. The gold price is currently stable at VND41-42 million (US$1,950-2,000) per tael (1.2 ounces).

The State Bank said the new regulation will not have any impact on most people in the countryside who seldom have savings in the precious metal and little demand to trade in it.

According to SBV statistics, gold mobilization is highest in HCM City, accounting for nearly 76 percent of the national total, with Hanoi a distant 11.7 percent and 31 other localities making up the remainder.

Foreign arrivals in Hanoi rise 20 percent

More than one million foreigners have arrived Hanoi in the first six months this year, up 20 percent from a year ago.

Of the total, 36,590 were from the Republic of Korea (up 46 percent), 61,867 from Australia (up 13 percent), 68,738 from Japan (up 24 percent).

In the same period, the city served 7.3 million domestic tourists, up 24 percent.

Truong Minh Tien, Deputy Director of the municipal Department of Culture, Sports and Tourism, said Hanoi expects to welcome 12.8 million holiday makers in 2012, including over 2 million foreigners.

To meet the target, the department will improve tours from Hanoi to some major tourist destinations in Vietnam such as Hoa Binh, Son La, Lai Chau, Dien Bien and expand tours of craft villages in Bat Trang, Van Phuc, Phu Vinh, and Quat Dong, and Phu Suyen.

The city also plans to advertise Hanoi’s tourism in potential foreign markets in East Europe, Canada, Australia and the Republic of Korea.

In October, 2012, the Council Promotion Tourism Asia (CPTA) will hold the 12th conference in Hanoi.

Besides the communication and advertisement activities, the capital city also focuses on distinctive tourism products.

Singapore Airlines offers discount flights

Singapore Airlines is offering heavily discounted airfares for flights departing from Ho Chi Minh City, Hanoi and Danang to over 20 destinations around the world in celebration of its 20th anniversary in Vietnam.
Discounts between 20 and 58 percent are available for a 20-hour period from 4am on June 28, 2012 at, or from your nearest travel agent.

The offers are valid for flights which depart from Vietnam between July 5, 2012 and March 31, 2013.

Singapore Airlines was one of the first international carriers to operate in Vietnam in 1992, initially serving 4 flights a week from HCM City and 3 from Hanoi, using Airbus A310s.

Today, Singapore Airlines operates flights to Singapore twice daily from HCM City, 10 times per week from Hanoi and 4 times from Danang.

From Singapore, customers can travel to 98 destinations across 37 countries.

WB says Vietnam makes good use of its loans

Vietnam is one of the ten best countries in terms using their IDA loans, the World Bank said at a conference it jointly held with the Vietnamese Ministry of Planning and Investment in Hanoi on Wednesday.

An IDA loan is lending granted to poor and developing countries by the WB’s International Development Association.

WB officials also reminded Vietnam of the possibility of changing the project management board system to increase the effectiveness of money use.

Figures from the conference show that there are as many as 305 project management boards across the country, which are in charge of 51 WB-funded projects.

Of these, many boards have shown weak ability in developing research plans, and have failed to connect the objectives of the provinces and localities in the projects’ implementation.

Earlier this month the WB pledged to provide Vietnam with a US$4.2 billion loan in the 2012-2016 period, under its deals with the Ministry of Planning and Investment.

The lending aims to support reforms and key investments needed for Vietnam’s successful transition into a middle-income country, according to the WB’s Country Partnership Strategy (CPS).

The expected allocation from the preferential capital sources of the WB and its lending arm, the IDA, for Vietnam would be about 2.8 billion Special Drawing Rights (SDRs), equaling to $4.2 billion, in the new CPS period.

This will be the largest amount of capital ever granted by IDA to Vietnam, reflecting Vietnam’s performance as well as an increase in overall IDA resources, the WB in a statement.

Vietnam will also be able to access capital sources from the International Bank for Reconstruction and Development (IBRD) with an expected amount of about $770 million until the middle of 2014.

Since returning to Vietnam in 1993, the WB has provided nearly $14 billion worth of credits, loans and aid to help Vietnam sustain growth and fight poverty.

Vietnam to install largest processing platform

A sail-away ceremony for the 14,000-ton Hai Thach central processing platform, the biggest ever of its kind in Vietnam, was held on June 27 in the southern province of Ba Ria-Vung Tau.

Deputy Prime Minister Hoang Trung Hai was present at the ceremony.

The platform will be installed at one of Vietnam’s deepest oil fields where the water is up to 133m deep.

It is part of the Bien Dong 1 project run by the Bien Dong Petroleum Operating Company with the PTSC Mechanical and Construction Joint Stock Company as the main contractor.

The Bien Dong 1 is the country’s largest offshore oil and gas project with a total installation workload of 60,000 tons. More than 3,300 technicians and workers are working on the project.

Paid iTunes content arrives in Vietnam

Vietnamese now can buy music and videos from Apple, where they once could only download free applications.

Apple said Wednesday it added 12 Asian countries, including Vietnam, to its roster of iTunes customers.

Before the launch, iPhone and iPad users already had been accessing free games from the App Store, but online music and movies remained beyond their reach unless they had gift cards issued in the United Kingdom or the United States.

Other new terminals include Bruei, Cambodia, Hong Kong, Laos, Macau, Malaysia, the Philippines, Singapore, Sri Lanka, and Thailand.

In Asia-Pacific, only a few countries such as Japan, Australia, and New Zealand have full access to iTunes, the world's biggest digital jukebox.

Initially, copyright restrictions and licensing delayed Apple’s regional expansion, despite a growing Asian market, where revenues have surpassed those in Europe.

But in its announcement, Apple did not mention China, meaning its second largest market after the United States remains limited to free digital content.

TV shopping firm fined $432k over smuggled goods

A company that sells goods via TV has recently been fined, in addition to having VND9 billion (US$432,000) worth of products and cash confiscated by the People’s Committee of Ho Chi Minh City.

Huu Lac Co Ltd, which runs a TV shopping program called New Shopping, has been selling contraband products while its director, Luu Hong Ngoc, failed to show inspectors receipts and invoices for the goods on sale.

Officers have confiscated VND7 billion worth of mobile phones, laptops, watches, cameras, and necklaces, all made in China, from the company.

This past April, hundreds of customers flocked to the company’s headquarters in Tan Phu District to return the goods and ask for refunds.

Most of them had purchased mobile phones worth around VND2 million each, and tablets for VND3 million, after watching New Shopping’s infomercials on local TV channels such as Binh Duong, Long An, Dong Nai, and cable TV stations HCTV in HCMC and HiTV in Hanoi.

Most of the products broke in less than one week of use, customers said.

Online dialogue discusses power development

An online dialogue on the implementation of the National Power Development Master Plan for 2011- 20 (with a view to 2030) is being held on the Government's e-portal this morning.

Participating in the discussion is Deputy Minister of Industry and Trade Hong Quoc Vuong, deputy general director of the Electricity of Viet Nam (EVN) Duong Quang Thanh and deputy director of the Ministry of Finance's Department of Investment Phan Ngoc Quang.

Vuong said great efforts were required to achieve the goals set out in the National Power Development Master Plan (PDP 7).

One of the major difficulties encountered by the power sector is capital shortage, which has resulted in the slow implementation of electricity projects, he said.

Meanwhile, Thanh said EVN was trying its best to speed up the implementation of PDP 7 power projects, particularly those in the southern part of the country –including the 500kV- Pleiku- My Phuoc- Cau Bong and 220 KV Dak Nong- Phuoc Long-Binh Long transmission lines; and the Duyen Hai 1, Duyen Hai 3, O Mon 1 power plants.

PDP 7 was approved by the Prime Minister on July 21, 2011. Under the plan, the power sector is expected to reach an output of about 330-360 billion kWh by 2020, and 700-800 kWh by 2030. During the period to 2030, a total of US$65 billion is needed to build power plants, transformer stations and transmission lines.

Bilateral trade with Algeria rises by 50%

Bilateral trade between Viet Nam and Algeria in the first half of this year has reached US$85 million, an increase of nearly 50 per cent against the same period last year, according to the Ministry of Industry and Trade.

Last year, bilateral trade between the two countries hit a record high of $100 million, a surge of 32.6 per cent over the same period of 2010.

Do Trong Cuong, ambassador of Viet Nam in Algeria, said the two countries had achieved many positive results in trade and had potential for further bilateral economic cooperation.

Cuong spoke at an online workshop held on Tuesday by the Ministry of Industry and Trade, Algeria's Embassy and Viet Nam's Embassy, with the participation of 27 businesses from the two countries.

Due to the crisis in the US and EU, Viet Nam has begun to increase exports to new markets in Africa, especially Algeria.

Algeria is Viet Nam's sixth largest importer in Africa and Viet Nam's second largest importer in North Africa, followed by Egypt.

Export products to Algeria include farm produce like coffee, rice, pepper and seafood.

Ly Quoc Hung of the Ministry of Industry and Trade said that, although trade with Algeria had risen quickly, the potential had not been fully tapped.

Viet Nam targets a total of $150 million in bilateral trade with Algeria for this year, an increase of 50 per cent against the same period last year.

Manufacture of motorbikes revs up, sales sputter
Nearly 1.6 million motorbikes were manufactured domestically in the first five months of the year, an increase of 1.7 per cent over the same period last year, according to the General Statistics Office.

During the same period, however, motorbike sales declined by 3.9 per cent, with the execess production capacity going straight into inventories, which ballooned by 42.3 per cent during the five-month period.

Sunfat Viet Nam Co has reduced production capacity from 10,000 vehicles to around 3,000 per year, but the company continued to sit on 7,000 vehicles in inventory, reported the Thoi bao Ngan hang (Banking Times).

The Banking Times also quoted a distributor as saying the motorbike sales at dealerships had been falling continuously despite a variety of promotional programmes, including registration fee support and price cuts of VND2-3 million (US$96-144) per unit.

Many dealers were only maintaining their operations with revenues from repair and maintenance services, the distributor noted.

Viet Nam Auto Motorcycle Bicycle Association chairman Pham Cuong said the motorbike market would continue to face difficulties through the end of this year, but he expressed optimism for the market's long-term potential.

"I think it'll take a very long time for the motorbike market to become saturated since there is still great built-in demand for them," Cuong said. "A lot of people still need to buy new ones with well-known brand names and more advanced technologies."

In the short term, his association recently proposed to administrative agencies many solutions to assist manufacturers, including corporate income tax and value-added tax reductions and preferential interest rates.

While waiting on Government support, Cuong said, enterprises should help themselves by enhancing product and service quality, reorganising management, and streamlining production and investments.

A representative of Honda Viet Nam said this firm planned to boost research and development and production of scooters for women as it anticipated growing demand demand for these types of vehicles in the future.

Sufat Viet Nam deputy director Dinh An said Sufat would emphasise fuel-saving technologies, especially electronic fuel injection, to enhance the competitiveness of its product lines, as well as venture into such market segments as "classic" motorbikes and electric bikes.

Suzuki has said it would focus on sport motorcycles, while Kymco said it would concentrate on scooters for the low end of the market.

Troubled Can Tho firms air grievances

Can Tho authorities held a dialogue on Tuesday with local firms to explore ways to overcome the problems many of them have faced this year with regard to production and export.

According to the Department of Planning and Investment, a majority of businesses in the city are involved in farming, processing, or exporting aquaculture produce.

Many of the troubled companies too are in the same business.

With prices falling this year, many farmers have quit the business, bringing the area under aquaculture to 2,352ha, or just 40 per cent of last year's figure.

Further downstream, processors said the resultant shortage of shrimp and catfish meant they were unable to operate at full capacity, affecting exports.

Other problems, they said, were rising production costs, sharp decline in international demand – leading to huge inventories – and inability to get loans, especially at low interest rates.

Ha Hong Ngoc, director of the State Bank of Viet Nam's city branch, told the meeting that many enterprises could not get credit because their accounts were opaque and they lacked assets to mortgagee or feasible business plans.

Executives from Pataya Food Company and Manga Mekong Aquatic Ltd., Co expressed fears about a mass exodus of workers to other industries.

Many processors believe that temporarily suspending operations is a better option than continuing to bleed.

Nguyen Thanh Son, the city People's Committee chairman, said he would report to the Government and seek its early intervention to resolve the problems.

He also promised that the city administration would do its best to support the businesses.

City fines telemarketing company

The HCM City People's Committee has fined Huu Lac Co. Ltd for selling poor quality goods via a television programme called New Shopping.

Products worth a total of VND7 billion ($334,300) have been seized, according to the committee. The city did not disclose the amount of the fine. The company, located at 275A Khuong Viet Street in the city's Tan Phu District, had been allegedly selling smuggled products without official vouchers or invoices.

Authorities said the seized products including handphones, watches, laptops, cameras and necklaces, all of which had been smuggled from China. Since April, hundreds of buyers have complained about the products' quality.

They said some products such as cellphones or laptops, which cost VND2-3 million ($95-$238) each, had broken down within one week after purchase.-

Lao Cai targets a million visitors

The mountainous province of Lao Cai aims to receive 1 million arrivals this year, earning VND2 trillion (US$95.2 million) from tourism services, according to the provincial Department of Culture, Sports and Tourism.

To reach the target, the department has further promoted its tourism potential and co-operation with other localities as well as guided local tourist companies to stabilise their prices.

During the first six months of this year, the province has welcomed over 600,000 visitors, including 260,000 foreigners, up 9 per cent year-on-year. Visitors to Lao Cai reached 969,000 last year.-

Construction begins on brewery

Work on a VND450 billion (US$21.4 million) beer brewery began on Tuesday in the central coastal province of Ninh Thuan's Thanh Hai Industrial Zone. Financed by Sai Gon Beer Alcohol and Beverage Co, the facility is being built on a 7ha site and is slated for completion in the third quarter of next year, creating 200 local jobs.

Gas traders seek to raise prices

Five gas traders have registered to raise their retail prices after the Ministry of Finance's recent decision to hike gas import tax from zero to 5 per cent, according to the ministry's Price Management Department.

Among the firms, Viet Nam Liquified Petroleum Gas registered to increase its prices by VND10,764 ($0.51) per 12kg canister, the lowest price level, while PetroVietnam Eastern Gas planned to raise its prices to the highest level of VND12,000 ($0.57).

With the current gas import tax, the price adjustment registered by these firms was reasonable, the department said.

Bad debt still under control at 3%, says Vietcombank
The Bank for Foreign Trade of Viet Nam (Vietcombank) announced on Tuesday that its bad debt is still under control at 3 per cent.

Deputy General Director of Vietcombank Nguyen Thu Ha attributed her bank's low bad debt ratio to a careful credit policy and the timely control of loans and strict lending policies.

By June 2012, the bank's total assets are estimated to reach more than VND329 trillion (US$15.6 billion) or an increase of 6.5 per cent against the same period last year. Of this figure, capital mobilised from the entire economy, estimated to reach more than VND260 trillion ($12.3 billion), rose 7.5 per cent compared to late last year. Capital mobilised from the people is estimated to stand at VND137 trillion ($6.5 billion), or a year-on-year increase of 12.2 per cent.

The bank reports said in the first half this year, it has disbursed more than VND2 trillion ($95 million) to assist businesses to make a temporary reserve of paddy and rice for winter-spring crops and stabilise commodities for export.

Vietcombank has provided preferential loans worth VND9 trillion ($428 million) and $269 million to businesses involved in the processing and export sectors.

Currently, the bank's lending interest rate has decreased to a low rate of 12 per cent while outstanding credit debt by the end of June is estimated to reach VND215 trillion ($10.2 billion), or an increase of 3.6 per cent against late last year. The lowest lending rate earlier in February was 14.5 per cent.

By the end of this month, the bank pre-tax profit is estimated to reach VND2.6 trillion ($123.8 million) or 15 per cent lower than the same period last year.

Cash to help agriculture firms advertise

Agricultural enterprises would receive allowances of up to VND100 million (US$4,760) per year for three years for use in promoting their products, including advertising in the media, under a plan being drafted by the Ministry of Planning and Investment.

The proposal is part of a draft decree on preferential policies for enterprises and co-operatives investing in the agricultural and rural sector. The ministry is currently collecting ideas for the decree, which is being drafted to replace Decree No 61 issued in 2010.

Under the current draft, enterprises producing meat and vegetables would receive a promotion allowance of VND200,000 per tonne of products.

Among other preferential policies included in the draft, enterprises breeding over 1,000 pigs would receive an additional allowance of VND3 billion ($142,800) for electrical and water infrastructure needed to ensure hygienic breeding conditions. Enterprises breeding over 400 cattle would receive VND2 billion ($95,230) for such purposes, while dairy farms with over 500 cows would receive VND5 billion ($238,095).

The deputy director of the ministry's legislation department, Vu Thi Chau Quynh, said that the State already had a number of preferential policies in place for investors in agricultural and rural projects, including tax and land fee remission, but the policies had been ineffective in promoting investment in these sectors.

The number of breeding enterprises was down by 16.9 per cent nationwide as much as 30 per cent in some provinces in the Hong (Red) River Delta, Quynh said.

"If the number continues to decrease, we will face a shortage of meat supplies for our daily food requirements," said Quynh.

However, the director of a HCM City-based enterprise who asked to have his name withheld, said that, despite the preferential policies, his company did not want to invest in agricultural projects.

"The agricultural sector depends to much on weather," he said. "If there is storm or flooding, enterprises can suffer great losses."

Procedures to receive allowances were also too complicated and time-consuming, he added.

"The State should simplify procedures for the allowances, and stabilise electricity and water sources in order to remove obstacles to enterprises that invest in the agricultural sector," he said.

Winter-spring rice output increases

The Ministry of Agriculture and Rural Development (MARD) estimated a 466,000 tonne increase in this year's winter-spring rice crop compared to that of 2011, having already harvested 20.26 million tonnes by June 15.

It said south and central regions have completed harvesting and were busy cultivating summer-autumn crops while in the north, farmers in the rice hubs of Thai Binh and Nam Dinh provinces, were still busy collecting winter-spring produce.

According to Do Hai Dien, head of the Nam Dinh Cultivation Office, local farmers have so far harvested 40 per cent of their rice crops.

With winter-spring paddy so quickly harvested, producers across the country have started planting their summer-autumn crops earlier, said Nguyen Tri Ngoc, deputy director of the MARD's Cultivation Department.

The MARD said local farmers had planted more than 3.12 million ha of summer-autumn produce with an estimated capacity of 64.8 kg per ha.

For this crop, some farmers have even recorded 10 tonnes per ha for their winter-spring rice.

Though the ministry praised the good result, adding that it would encourage farmers to expand rice areas to ensure food security and exports, low prices remain a concern.

Similar to many other rice production localities, central Quang Binh enjoyed a high yield of winter-spring crops, but local farmers are still worried about current low prices at about VND4.5 million ($215) per tonne, compared to nearly VND7 million (US$330) last year.

Nguyen Dai Trung from Phong Thuy Commune, Le Thuy District complained he wanted to sell his rice, but would then be lost. Farmers needed money to buy fertiliser and other facilities for the next crop.

To cope with the matter, Minister of Agriculture and Rural Development Cao Duc Phat said to further stabilise local rice prices, ensuring farmers a profit, the MARD suggests temporarily buying and storing a million tonnes of rice. Enterprises that participate would be supported with prefered loans from July to September.

Seafood firms fret over material shortage

Fresh seafood material sources at reasonable prices are increasingly difficult to obtain in Vietnam, said seafood enterprises at the Vietnam Fisheries International Exhibition (Vietfish 2012).

Ngo Binh Long, deputy general director of Agrex Saigon Foodstuffs Co., said securing materials was now his company’s priority to ensure the export of seafood to the choosy markets such as Japan, the U.S. and the European Union (EU).

“I’ve recently been to Kien Giang, where many kinds of aquatic creatures are captured, and found a severe scarcity of materials there. There are ten processing plants with a combined output capacity of some 2,000-3,000 tons a day, but material supply now only meets 10-20% of such a capacity,” said Long.

He said the material shortfall had pushed up prices of his company’s finished products, displeasing the regular customers. “The toughest problem of the company is to find fresh and cheap materials,” he stated.

The undersupply, according to Long, is not only because there are too many processing plants but also due to the “material drain” to China.

Nguyen Thi Thu Sac, vice chairwoman of the Vietnam Association of Seafood Exporters and Producers (VASEP), said the seafood industry had set an export turnover target of US$3 billion for 2015, meaning material supply must increase threefold, whereas the natural seafood sources of Vietnam are being depleted.

“Given the goal to sell US$3 billion worth of products to the world’s market by 2015, the key issue of material must be settled. Material and other costs have pushed up production expenses by 30%, while outputs cannot increase respectively,” said Sac.

She emphasized the need of tightening local management on Chinese traders.

“Chinese traders have made a presence in the main fishing areas from Quang Nam and Danang in central Vietnam to Kien Giang and Ca Mau in the Mekong Delta to purchase materials and compete fiercely with local enterprises,” said the chairwoman.

Speaking at Vietfish 2012, Rajitha Senaratne, Sri Lanka’s Cabinet Minister of Fisheries and Aquatic Resources Development, said the event offered him a chance to learn more about the seafood industry of Vietnam through visits to shrimp and tra fish processing plants, field trips to study seafood farming in Nha Trang and meetings with leaders of the Ministry of Agriculture and Rural Development.

Although Sri Lanka also has strength in aqua-product farming and fishing, the fact that the consumption demand of local people is rising sharply make this country a potential market for Vietnam’s seafood products, said Senaratne.

“Together with other items, I’m especially interested in Vietnam’s tra fish because Sri Lanka has not had this type of product. We may import your tra fish after this visit,” he said.

ACB Growth Fund debuts on HOSE

ACB Growth Investment Fund on Tuesday began trading over 24 million fund units on the Hochiminh Stock Exchange (HOSE) under the code of ASIAGF, the sixth public fund listed on the bourse.

The debut price was set at VND10,000 a unit with a trading band of +/-20% on the first trading day. The fund will primarily invest in stocks, bonds (government, local and corporate), deposit certificates at credit institutions, treasury bills and commercial papers with tenors less than one year.

Nguyen Minh Tuan, general director of ACB Funds Management One Member Co. Ltd. (ACBC), said in a statement released on Tuesday that the fund is suitable for medium- to long-term investors.

Established in 2008, ASIAGF is a close public fund under management of ACBC. The fund has total chartered capital of VND50 billion, providing products and asset management services in medium and large-scale investments for institutions and individuals.

Over 1,200 firms in city go bust

In the year to date, up to 1,214 HCMC-based businesses with total registered capital of VND5.26 trillion have applied for closure at the city’s Department of Planning and Investment.

Moreover, the number of enterprises announcing suspension of operation has amounted to 1,065 in January-June, up 50% year-on-year.

Meanwhile, there have been 12,760 newly-established companies with combined registered capital of VND77 trillion in the first half of this year. The number of newly-formed businesses is up 4.6% and the amount of registered capital increases by 6.5% from last year.

As for FDI approvals, the city has granted investment certificates to 178 FDI projects with total registered capital of US$248 million in the six-month period. FDI inflow into city has plummeted 83.1% from a year earlier.

Given an upsurge in business suspension and dissolution, more employees have lost their jobs and claimed jobless benefits.

SAV and KPMG ink cooperation agreement

On June 27, State Audit Office of Vietnam (SAV) and KPMG in Vietnam signed the framework agreement on professional cooperation in Hanoi.

The agreement aims to enhance exchange and cooperation in terms of career development and professional expertise improvement for the staff members of SAV and KPMG, contributing to the development of the accounting and auditing profession in general and public sector auditing and independent auditing in particular.

Based on this framework agreement, the two parties will implement specific cooperative activities on training, workshops, scientific research, publication, communication as well as other professional aspects.

“KPMG is very happy with the good cooperation between the SAV and our firm. The signing has brought a significant meaning to us. With our global as well as local experience and our commitment, we wish not only to contribute to the development of the accounting and auditing profession along with SAV, but also to the sustainable development and improvement of governance capacity of enterprises and the economy as a whole,” said Warrick Cleine, CEO of KPMG in Vietnam.

KPMG in Vietnam is one of the leading professional services firms, with over 950 staff working from our offices in Ho Chi Minh City and Hanoi. We work with our colleagues across Asia and around the world to provide a broad range of services.

Vietnam to boost credit growth
The State Bank of Vietnam has forecast credit growth will increase to 12-13% and will continue increasing despite negative rumours.

Concerning rumours that the credit growth rate of Vietnam is declining because bad debts had increased from 3.06 to 10%, Nguyen Viet Manh, Head of the State Bank of Vietnam (SBV)'s Credit Department said that credit growth had increased 1-2%.

"In 2011, when SBV planned to allocate credit growth quotas of 15-17%, many banks increased their 'virtual' credit growth in hope that SBV would allocate a 17% credit growth quota to them." Manh said. "Currently, banks can still provide huge loans for enterprises."

However, many said the news that credit growth has slowed was true. The banks complain that they can't find customers for their loans.

Pham Thien Long, Deputy Head of HD Bank said, "Even though we lowered interest rates to 12% per year, it's still hard to attract people."

If the priority in the first half of this year for banks was liquidity, in the last six months it has been credit growth.

SBV hopes to up outstanding loans by 2-3%, and achieve the 12-13% credit growth target set for 2012. The government will provide VND50 trillion (USD2.4 billion) each month for banks, enterprises and public investment programmes.

Vu Viet Ngoan, Chairman of National Financial Supervisory Commission (NFSC) said a 1.5-1.7% growth rate is reasonable. Rapidly increasing credit growth could lead to inflation. "This year credit growth may only reach 10%." Ngoan said.

Even when the SBV loosened the monetary policies, banks still haven’t raised their credit growth due to bad debts. The best bet now would be public investment programmes.

The banks still hope SBV will reallocate credit growth quotas. Especially banks with good growth such as in early 2012, Eximbank's credit growth increased 2.4%, BIDV's is 8.5%.

Leaders of SBV said they will reconsider the proposal and may lift the quota restriction of 17% for banks that have operated well.