BUSINESS IN BRIEF 31/5

VN-Index ends month on high note

Shares closed the last trading day of May with mixed results, higher on HCM City Stock Exchange but lower on the northern bourse.

Analysts expect a more surprising June. According to FPT Securities, risks eased over the first half of this month, creating opportunities for investors to buy stocks.

The VN-Index gained by 3.57 points or as much as 0.64 per cent to end at 562.02 points.

The upward trend was maintained for five consecutive days.

Large-cap stocks attracted foreign capital inflow, with the VN30-Index seen rising 0.49 to per cent to land at 618 points.

There were 16 gainers and 10 losers.

Banking stocks posted gains yesterday, including Vietinbank (CTG), Military Bank (MBB), Sacombank (STB) and Vietcombank (VBC).

Other gainers included Vingroup (VIC) and Masan Group (MSN), which added VND1,500 (US$0.071) a share each.

Meanwhile, Bao Viet Holdings (BVH), Tan Tao Group (ITA), REE Corporation (REE) among seven others slightly dropped.

Overall, on the southern bourse, losers overwhelmed gainers by 128 – 91, however.

Investors were cautious yesterday as the benchmark index was approaching the strong resistant band of 560 points, resulting in falling liquidity.

More than just 83 million shares were changing hands, worth VND1.4 trillion ($66.6 million).

FLC Group (FLC) led the bourse by trading volume, with 6.6 million shares traded.

On Ha Noi Exchange, the HNX-Index extended Thursday's loss, closing yesterday 0.77 per cent lower at 75.8 points.

The HNXFF-Index, composed of stocks with a minimum free float rate of 5 per cent, lost 0.83 per cent at 76.39 points.

On the northern bourse, losers outnumbered gainers by 116 – 91.

The HNX30-Index, tracking the top stocks by capitalisation and liquidity, ended at 152.13 points, 0.87 per cent lower.

Trading volume and value declined over previous trading sessions, with 50.6 million shares traded worth VND497.2 billion ($23.6 million).

Foreign investors purchased a net VND250 billion ($11.3 million) with focus on large-cap stocks, especially Masan Group (MSN) and PetroVietnam Gas Corporation (GAS). 

Vietnam, Egypt bolster trade links

A seminar in Alexandria, the second largest city in Egypt, on May 29 promoting trade and investment opportunities in the Vietnamese market attracted representatives from 20 Egyptian businesses.

During the seminar, Vietnamese ambassador to Egypt, Dao Thanh Chung shared information on Vietnam’s economy, its advantages and difficulties and proposed some measures to promote economic and trade ties between the two nations.

Ambassador Chung said that both Egypt and Vietnam are major markets, each with a population of nearly 90 million. Many Vietnamese exports such as farm produce, seafood and consumer goods can penetrate the Egyptian market. In addition, many Egyptian goods can enter the Vietnamese market such as cotton, fertilizer, medicines and chemicals.

Furthermore, Egypt’s participation in the Arab Free Trade Area and Vietnam’s membership of ASEAN will create favourable conditions for businesses of both nations to export to other markets. However, Chung affirmed that trade, investment and tourism activities have not matched both sides’ potential.

Last year’s two-way trade in 2013 hit only US$240 million which has not fulfilled the set target of US$500 million by 2010. In the first quarter alone, bilateral trade was estimated at US$86 million.

Chung said that the most important thing for businesses is to put faith in each other to alleviate difficulties and bring two-way trade to US$500 million in the coming time.

Both sides also agreed to set up a column on the situation of Vietnamese market in the website of the Alexandria Chamber of Commerce.

Vietnam, RoK set sights on increased trade

Vietnam and the Republic of Korea (RoK) have reiterated their strong will to conclude a free trade agreement later this year and lift two-way trade to US$70 billion by 2020.

The pledge, part of the 2013 Vietnam – RoK joint statement, was made by Deputy Foreign Minister Ho Xuan Son and his Korean counterpart Cho Tae-yong at the third Vietnam-RoK Strategic Dialogue on Diplomacy, Security and National Defence at deputy ministerial level in Hanoi on May 29.

The ministers said that both nations are expecting mutually beneficial cooperation on almost fronts, particularly trade, investment, tourism and science-technology.

Vietnam sees the RoK as one of its top economic partners, Son said, assuring Cho that with improving business conditions, they will be able to enjoy strong growth.

Cho said the Korean business community lauds the Vietnamese Government for its timely interference in anti-China riots in Binh Duong and Ha Tinh, saying that he has strong faith in the stable investment climate in the country.

On the national defence and security front, both sides vowed to maintain existing dialogue and policy exchange channels, while working more closely in personnel training, defence industry, experience sharing and undertaking United Nations peacekeeping missions.

They also agreed to liaise better at regional and global forums, such as the United Nations, the Asia-Pacific Economic Cooperation, ASEAN+ and the East Asia Summit.

Informed about the recent developments in the East Sea, with China illegal stationing its oil rig Haiyang Shiyou – 981 in Vietnam’s continental shelf and exclusive economic zone, Cho called for the parties concerned to settle the dispute through peaceful means in line with international law, especially the 1982 United Nations Convention on the Law of the Sea and the Declaration on the Conduct of Parties in the East Sea.

In regards to the situation in the Korean Peninsula and inter-Korean relations, Son reaffirmed Vietnam’s consistent policy of backing peace, stability and denuclearisation in the region.

Vietnam is willing to contribute to promoting dialogue for peace and trust building between the RoK and the neighbouring Democratic People’s Republic of Korea. The country wishes for both sides to settle disputes through peaceful dialogue, contributing to peace, stability and cooperation in the region, Son said.

On the occasion, Cho also paid courtesy calls to Deputy Prime Minister and Foreign Minister Pham Binh Minh and Deputy Head of the Party Central Committee’s Commission for External Relations, Nguyen Huy Tang.

Binh Duong enjoys trade surplus in first five months

In the first five months of 2014, the southern province of Binh Duong enjoyed a trade surplus of nearly US$1 billion.

According to the provincial Statistics Office, during the January-May period, the locality’s export turnover saw a year-on-year increase of 7.9 percent to reach more than US$5.3 billion, of which US$4.469 billion came from the foreign-invested sector.

High growth rate continued to be recorded in Binh Duong’s main exports, including garment and textiles (US$700.9 million, 18.2%), mobile phones and components (US$450.9 million, 70.8%) and footwear (US$440 million, 12.5%).

Meanwhile, in the period the province spent US$4.39 billion on importing goods, up 7.6% from the same period last year.

*** Meanwhile, around US$65 million of foreign direct investment (FDI) was poured into Binh Duong in May, raising total FDI capital to the locality in the first five months of this year to US$815 million.

This is a positive sign which shows that investors still retain confidence in the investment environment in the locality and Vietnam in general.

Binh Duong has so far lured 2,255 foreign-invested projects totally valued at about US$20 billion.

According to Director of the provincial Department of Planning and Investment Mai Hung Dung, out of the US$65 million of FDI invested in Binh Duong in May, US$43 million was poured into local industrial parks (IPs).

Japan topped the list of foreign investors in Binh Duong during the period, followed by the Republic of Korea, Hong Kong and Taiwan (China).

Singapore investors keen on widening footprint in Vietnam

Singaporean companies are keenly interested in enlarging investment and grasping opportunities to do business with Vietnamese business partners, said Minister in the Prime Minister’s office Lim Swee Say.

Say made the statement at a working session with Vice Secretary of the Ho Chi Minh City Party Committee Nguyen Thi Thu Ha and Vice Chairwoman of the HCM City People’s Committee Nguyen Thi Hong, in Singapore on May 29.

As one case in point Say highlighted the recent cooperation between Saigon Co.op and Singapore’s leading supermarket retailer NTUC FairPrice in organising a trade fair in Singapore.

More than 120 supermarkets in Singapore participated in the VietnamFair from May 29 to June 11, demonstrating their high interest, she said. Thu Ha echoed Say’s view, affirming that the event  is a vivid proof of cooperative relations in the interests of both nations’ businesses.

She emphasised that HCM City will strive to create the most favourable conditions for foreign businesses especially Singaporean businesses to invest in the city.

During the fair, NTUC FairPrice introduced 40 “Made-in-Vietnam” products to Singaporean customers including several specialities such as coffee, Pho (Vietnamese noodle soup), dragon fruits and seafood.

Second Mekong – RoK Business Forum opens

The second Mekong-RoK Business Forum got underway on May 29 drawing a large number of representatives from the business community of Vietnam, the Republic of Korea (RoK) and other Mekong sub-regional nations.

Speaking at the opening, Deputy Foreign Minister Bui Thanh Son said the fourth Mekong-RoK Foreign Ministers’ Meeting scheduled for Seoul this July is expected to approve an action plan to expand cooperation between the Mekong nations, which is a significant development for the region, Vietnam is committed to bolstering Mekong-RoK regional cooperation and strengthening dialogues, developing public-private partnership and creating favourable conditions for businesses, he said.

Son also stressed that through the forum, Vietnam wants to get feedback and proposals for improving cooperation from businesses in the region.

Cho Tae-Yong,Korean First Vice Minister of Foreign Affairs in turn said that the Mekong River region has played an important role in the RoK-ASEAN cooperation.

He affirmed that the RoK was impressed at the region’s GDP growth and sees many bright prospects on the horizon.

The RoK Government expressed the desire to further strengthen relations with Mekong countries and help the region reduce the development gap with other nations within ASEAN.

During the forum, two debates on alternatives to developing the business environment and enhancing opportunities to strengthen the supply and value chain connectivity between the Mekong sub-region and the RoK were also held.

Coffee exports up in volume, value

Vietnam fetched US$1.96 billion from exporting 966,000 tonnes of coffee in the first five months of the year, up 36.7% in volume and up 29% in value over the same period last year.

According to the Ministry of Agriculture and Rural Development (MARD), Vietnam exported 154,000 tonnes of coffee in May alone, grossingUS$336 million in total export revenue.

During the period, the average export price of coffee was US$2.001 per tonne.

Germany and the US continued to be the two largest consumption markets for Vietnamese coffee with market shares reaching 14.08% and 9.62% respectively.

Meanwhile, Belgium and France posted the strongest growth rate, as coffee imports into the European nations doubled compared to last year’s first four months.

MARD has forecast that Vietnam will produce around 1.75 million tonnes of coffee in the 2014-2015 season, a slight increase against the 2013-2014 period (1.74 million).

Vietnam lashes economic growth forecast

Economists at the Vietnam Centre for Economic and Policy Research (VEPR) say that economic growth in 2014 is expected to be lower than last year and the economic recovery remains tepid.

At a conference releasing the Vietnam Annual Economic Report 2014 in Hanoi on May 29 in Hanoi, VEPR Director Dr. Nguyen Duc Thanh said that the Vietnamese economy’s recovery remains tenuous.

He went on to say that the report hypothesises two alternative scenarios for the country’s economic growth in 2014. The less optimistic scenario projects economic growth at 4.15% while the more sanguine puts it at 4.88%.

The VEPR’s estimates are much lower than the figures predicted by the National Financial Supervisory Commission early last month.

The Commission reported that GDP in 2014’s first quarter hit 4.96%, higher than the same period of the two previous years, and is likely to be maintained in the third quarter of this year. Therefore, it postulated that a GDP growth rate of 5.8% in 2014 is within reach.

In April, the Asia Development Bank (ADB) also foresaw that Vietnam’s GDP will reach 5.6% in 2014.

Dr. Thanh said the sharp reduction in GDP is partially attributable to the ongoing complications in the East Sea after China’s illegal placement of Haiyang Shiyou-981 oil rig in Vietnam’s exclusive economic zone, threatening bilateral trade ties.

Vietnam’s northwest targets sustainable corn production

Vietnam’s northwest is one of the country’s key corn cultivation areas with nearly 300,000 ha used for the crop, accounting for 25 percent of the country’s total corn growing areas, the Vietnam Economic News reported on May 29.

However, the regional corn yields only reached 3.2 tonnes per ha, much lower than the country’s average yield. Therefore, increasing yields and production for the northwestern provinces drew great attention from the Ministry of Agriculture and Rural Development (MARD).

The biggest difficulty is that corn cultivation in mountainous provinces are located mainly in steep, hilly and mountainous areas and therefore the soil is often washed away during the rainy season, leaving the soil exhausted and having a negative impact on the environment.

In addition, local cultivation methods remain limited as they lack input agricultural materials like fertilizer and irrigation water. Nomadic people living in shifting cultivation mainly in forests also reduced forested areas and made their livelihoods unstable, resulting in low corn yields and production.

In an agriculture promotion forum on sustainable corn production in northwestern region recently co-organised by the National Agriculture Promotion Centre and Lai Chau province’s Department of Agriculture and Rural Development, a programme linking the state, scientists, farmers and enterprises to develop corn production in the region was recommended as one of the prerequisite conditions for sustainable corn cultivation and a premise to build a key corn growing region so that Vietnam can take more initiatives in its supply for animal feed.

According to Director of the National Agriculture Promotion Centre (the MARD), the sustainable development of corn cultivation requires collaboration among the four previously mentioned stakeholders as well as sound investment.

In recent years, the Syngenta Vietnam Company has coordinated with the National Agriculture Promotion Centre, departments of Agriculture and Rural Development and Agriculture and promotion centres in the northwestern mountainous provinces to transfer technologies and raise farmer awareness of sustainable corn production. Syngenta raised technical solutions to change the farming habits and awareness and also implemented overall, scientific solutions to gradually increase corn yields sustainably year after year.

Director of Foreign Affairs of Syngenta Vietnam Company Le Thi Khanh Hoa said with annual investment of more than US$1.5 billion for research and development to support its networks globally, now Syngenta is the only company that has a comprehensive collection of products on main crops such as corn, rice, coffee and pepper.

As for corn, Syngenta brings growers an abundant collection of hybrid corn varieties including NK54, NK66, NK6326, NK67, NK7328 and NK4300 which have advantages such as drought and cold tolerant, promising high yield from 10-12 tonnes per ha, allowing farmers to use corn varieties suitable for each specific crop and helping them improve the crop yields, increase incomes and improve their lives in a sustainable way.

To develop sustainable corn production, northwestern provinces need to set up a concentrated corn cultivation region, apply scientific advancements in varieties, cultivation skills and technological process. They especially need to adopt more open policies to lure investment in processing facilities attached with consumption of the products.

Vietnamese rice introduced in Mexico

Vietnamese rice and agricultural products were introduced to Mexican partners, along with trading opportunities in the field, during a conference in Mexico City on May 26.

Addressing the event, Ambassador to Mexico Le Thanh Tung reviewed bilateral cooperation between the two counties over recent years, with two-way trade reaching 1.5 billion USD in 2013.

He called on businesses of both sides to strengthen mutual trust by increasing direct meetings.

Director in chief of Mexico’s National Service of Agro Alimentary Health, Safety and Quality (SENASICA), Enrique Sanchez Cruz, highlighted the importance of the conference in the context that Mexico is in need of importing Vietnamese rice.

He said Mexico is keen on importing more rice and seafood from Vietnam to meet the rising domestic demand.

He also pledged to work harder to remove technical barriers for Vietnamese goods, while continue consolidating confidence of Vietnamese exporters in Mexico .

Meanwhile, General Secretary of the Vietnam Food Association, Huynh Minh Hue, briefed the participants on Vietnam’s current rice export situation, as well as its policies of exporting agricultural products.

He said Vietnam’s average food output is 44 million tonnes per year. In 2013, the country shipped abroad 6.6 million tonnes of rice, he added.

Asia remained the top importer of Vietnamese rice, consuming more than 60 percent of the country’s total exported volume. It was followed by Africa with 28 percent.

Hue said Vietnam’s rice export situation is likely to see no remarkable change in the next five years.

Participants at the event were also introduced to the nation of Vietnam as well as the country’s potential in economics and tourism. They were updated with the current foreign investment attraction of Vietnam and the country’s import-export procedures.

Businesses of both sides also had a chance to dialogue directly to locate partnership prospects.

Mekong Delta attracts foreign investors

Foreign investors are increasing their interest in projects based in the Mekong Delta, the Vietnam Investment Review reported.

Speaking on the sidelines of a conference to promote investment in the region on May 22 in Ho Chi Minh City, Nguyen Thanh Hoang, General Director of the Netherlands-backed De Heus LLC Vietnam said the Dutch-invested company had decided to build an additional 15 million USD animal feed plant and a 3 million USD aqua-culture research centre in Vinh Long province.

According to Hoang, the company’s existing 12 million USD aqua-feed plant in Vinh Long was already operating efficiently.

Hirofumi Kishi, General Director of Japanese-invested Sapporo Vietnam beer-maker said the company selected the Mekong Delta for its brewery in Vietnam back in 2009.

“With a big population and a unique culinary culture, the Mekong Delta offers massive potential for a growing beer market,” said Kishi.

According to Kishi, Sapporo Vietnam’s brewery in Long An province has an initial capacity of 40 million litres per year and will reach the maximum capacity of 150 million litres per year. After two years of operations, Sapporo beer is now available in 4,000 outlets across Vietnam.

Yasuzumi Hirotaka, Executive Director of the Japan External Trade Organisation (JETRO) in Ho Chi Minh City said in addition to its favourable geographical position, the Mekong Delta had major advantages including agricultural and aquatic products, cheap land fees, low-cost labour, and improved traffic infrastructure, including upgraded waterways.

“The most promising investment sector in the Mekong Delta is now developing processing industries thanks to the plentiful availability of rice, seafood and fruit,” said Hirotaka.

EuroCham representative Henk Meyknecht said European investors were paying much more attention to the region, particularly focusing on tourism real estate, food and beverage services, and hotels.

Speaking on behalf of the 13 cities and provinces in the region, Vo Thanh Thong, Vice Chairman of the Can Tho City People’s Committee underlined the fact that the local authorities were keen to provide the most favourable conditions for investors.

During 2011-2013, the Mekong Delta attracted 271 projects with the total registered capital of 2.3 billion USD.-

Manufacturing industry attracts huge FDI

Three major foreign investors – Japan, the Republic of Korea and Singapore – are heavily investing in Vietnam’s processing and manufacturing industry.

As of April, Japan had 2,226 projects covering all 18 sectors in Vietnam with a total investment of US$35.51 billion, mainly in the processing and manufacturing industry (1,227 projects at US$29.9 billion), real estate (30 projects at US$1.4 billion) and construction (US$56 projects at US$1.06 billion).

Its investments are  spread throughout 49 provinces and cities of the country, of which Thanh Hoa took the lead with 9 projects at US$9.68 billion, followed by Binh Duong, Hanoi, Ho Chi Minh City, Haiphong and Dong Nai.

The Republic of Korea (RoK) came in second among 101 foreign investors in Vietnam. Korean giants which have contributed significantly to Vietnam’s socio-economic development include Samsung, Posco, Doosan, Kumho, LG, Daewoo, GS and SK.

The RoK pumped US$30.77 billion into 3,736 projects as of April. The processing and manufacturing industry topped the 18 sectors with 2,261 projects at US$18 billion, then came real estate with 76 projects at US$6.67 billion and construction with 520 projects at US$2.3 billion.

Korean investors have made their appearance in 49 provinces and cities nationwide. Hanoi ranked first with 775 projects at US$4.9 billion, followed by Dong Nai with 292 projects at nearly US$4 billion and then Ho Chi Minh City, Ba Ria-Vung Tau, Haiphong, Binh Duong and Thai Nguyen.

Singapore had 1,266 valid projects in Vietnam with a combined capitalisation of nearly US$30.29 billion. It invested in 18 sectors, with the processing and manufacturing industry coming first with 400 projects at US$11.35 billion.

In addition to production, Singaporean investors have paid due attention to infrastructure development at industrial and export processing zones. Five IZs have been operated by Singaporean investors, including Vietnam-Singapore Industrial Parks (VSIPs) in Bac Ninh, Haiphong, Binh Duong and Quang Ngai.

Joint project offers lower rate loans to businesses in Ha Noi

Businesses in the capital can access loans with interest rates of 7–8 per cent per year under a programme to remove difficulties for businesses.

The programme, initiated by the Ha Noi People's Committee, connects banks and businesses in the capital and is aimed to have commercial banks support credit for businesses at reasonable interest rates.

Under the programme, interest rates for short-term loans will be 7–8 per cent compared with the market average rate of 9–10 per cent. The rates for medium- and long-term loans will be 9–10.5 per cent compared with the market average rate of 10.5–12 per cent.

The programme gives priority to high-tech and supporting industries as well as small- and medium-sized firms.

According to the Ha Noi Statistics Office, credit in the capital in the first 5 months this year increased by 0.3 per cent against the same period last year while deposits rose 2.4 per cent.

Outstanding loans in May alone were estimated at nearly VND948 trillion (US$44 billion), up 0.8 per cent from last month and up 0.3 per cent from December 2013.

Additionally, short-term loans increased by 0.6 per cent from last month and 1.4 per cent from December 2013, while medium- to long-term loans increased by 1.2 per cent from last month and 3.9 per cent from December 2013.

However, the capital's credit growth rate was much slower than that of the whole banking industry. Data from the State Bank of Viet Nam revealed that credit growth in the system by the end of April had reached 1 per cent.

Total deposits of Ha Noi-based credit institutions in May reached VND1,071 trillion ($49.81 billion), up 1 per cent from last month and 2.4 per cent from December 2013.

Production jumps 5.4% this year

Industrial production in the first five months of the year saw a 5.4 per cent year-on-year increase, according to the General Statistics Office.

The index of industrial production (IIP) also signalled that industry was recovering, with the highest growth rate so far this year, noted the GSO.

"The growth rate of 5.6 per cent during Jan-April was 0.8 per cent higher than the same period last year," said industry expert Nguyen Quang Ha.

Ha attributed the high IIP growth rate to the 7.5 per cent surge in the processing and manufacturing sector, which accounted for 70 per cent of total industrial output.

During the period, the garment and textile sector rose 21.1 per cent, motorised vehicles were up 9.6 per cent, and electric production and distribution grew 10.5 per cent.

Many products also registered production growth in the first four months, including electronics, up 12.4 per cent; and paper production and distribution, up 11.9 per cent.

However, other products registered a decline in production, such as rubber and plastic, down 1.3 per cent; crude oil exploitation, down 2.6 per cent; and coal, down 5.6 per cent.

Agricultural manufacturers offered preferential loans

Agricultural manufacturers, integrated agricultural production - distribution projects, technology-applied models - can now have access to more preferential loans, the State Bank of Vietnam (SBV) announced on May 28.

In Decision No 1050/QD-NHNN of May 28 that took effect immediately, eligible subjects are set to those that involve contracts to produce, process and distribute agricultural products, those that are granted certificates of technology-applied production by the Ministry of Agriculture and Rural Development and households.

Highest annual borrowing interest rates at commercial banks are 7 percent for short terms, 10 percent for medium terms and 10.5 percent for long terms.

Short-term loans will be granted to meet the growing demand of fertiliser, seedlings and varieties of poultry and animals, as well as agriculture equipments, while medium- to long-term loans will support investment in infrastructure and equipments to develop technology-applied models.

This pilot lending programme will expire in two years.

The SBV has strengthened cooperation with related authorities, agencies and the banking system to develop better financial programmes for the field.

SBV has coordinated with the Ministry of Agriculture and Rural Development and the Ministry of Science and Technology to develop suitable mechanisms to help credit institutions expand investment in the sector, especially for agricultural production operations with strong application of advanced technologies.

Given the approximately 70 percent of Vietnam's population living in rural areas, agricultural production has made tremendous contributions to national socioeconomic development.

In rural areas, underdeveloped agricultural credit insurance has seriously affected farmers' ability to repay, as it does not cover large variations in price due to natural disasters or epidemics. For that reason, banks only lend moderate amounts of capital.

Stimulating banks to maintain a minimum ratio of 20 percent of their capital for agriculture and rural development is considered a practical measure that could facilitate credit activities in the field, as banks are still the major providers of loans to the sector.

Central bank officials said the bank had made efforts to regulate the monetary policy in a flexible manner to support credit institution liquidity and stabilise the currency market by boosting foreign currency reserves.-

Vietnam’s northwest targets sustainable corn production

Vietnam’s northwest is one of the country’s key corn cultivation areas with nearly 300,000ha used for the crop, accounting for 25 percent of the country’s total corn growing areas, the Vietnam Economic News reported on May 29.

However, the regional corn yields only reached 3.2 tonnes per ha, much lower than the country’s average yield. Therefore, increasing yields and production for the northwestern provinces drew great attention from the Ministry of Agriculture and Rural Development (MARD).

The biggest difficulty is that corn cultivation in mountainous provinces are located mainly in steep, hilly and mountainous areas and therefore the soil is often washed away during the rainy season, leaving the soil exhausted and having a negative impact on the environment.

In addition, local cultivation methods remain limited as they lack input agricultural materials like fertilizer and irrigation water. Nomadic people living in shifting cultivation mainly in forests also reduced forested areas and made their livelihoods unstable, resulting in low corn yields and production.

In an agriculture promotion forum on sustainable corn production in northwestern region recently coorganised by the National Agriculture Promotion Centre and Lai Chau province’s Department of Agriculture and Rural Development, a programme linking the state, scientists, farmers and enterprises to develop corn production in the region was recommended as one of the prerequisite conditions for sustainable corn cultivation and a premise to build a key corn growing region so that Vietnam can take more initiatives in its supply for animal feed.

According to Director of the National Agriculture Promotion Centre (the MARD), the sustainable development of corn cultivation requires collaboration among the four previously mentioned stakeholders as well as sound investment.

In recent years, the Syngenta Vietnam Company has coordinated with the National Agriculture Promotion Centre, departments of Agriculture and Rural Development and Agriculture and promotion centres in the northwestern mountainous provinces to transfer technologies and raise farmer awareness of sustainable corn production. Syngenta raised technical solutions to change the farming habits and awareness and also implemented overall, scientific solutions to gradually increase corn yields sustainably year after year.

Director of Foreign Affairs of Syngenta Vietnam Company Le Thi Khanh Hoa said with annual investment of more than 1.5 billion USD for research and development to support its networks globally, now Syngenta is the only company that has a comprehensive collection of products on main crops such as corn, rice, coffee and pepper.

As for corn, Syngenta brings growers an abundant collection of hybrid corn varieties including NK54, NK66, NK6326, NK67, NK7328 and NK4300 which have advantages such as drought and cold tolerant, promising high yield from 10-12 tonnes per ha, allowing farmers to use corn varieties suitable for each specific crop and helping them improve the crop yields, increase incomes and improve their lives in a sustainable way.

To develop sustainable corn production, northwestern provinces need to set up a concentrated corn cultivation region, apply scientific advancements in varieties, cultivation skills and technological process. They especially need to adopt more open policies to lure investment in processing facilities attached with consumption of the products.

Capital flow continues to pour into textile industry

Despite several major new projects, the attractiveness of the textile industry seems to have remained unchanged as it continues to lure huge amount of capital from both domestic and foreign investors, the Vietnam Economic News reported on May 28.

According to Vietnam Cotton and Spinning Association, in mid June 2014, Jiangyin Zhenxin Wool Spinning Co., Ltd. (China) will coordinate with the Vietnam Cotton and Spinning Association to hold meetings with Vietnamese businesses to find partners regarding their wool production projects.

The project plans to invest in a production line with a capacity of 5,000 - 20,000 spindles and an estimated production capacity of 800-2,000 tonnes of fiber a year. Basically, Jiangyin Zhenxin Wool Spinning will support machinery and production technologies and provide a source of capital worth more than 5 million USD.

Earlier, a series of big projects from foreign investors have also been implemented in the textile industry. For example, Texhong Ngan Long Science and Technique Co., Ltd of Texhong Group (Hong Kong) has inaugurated Phase 1 and launched Phase 2 of a fabric production plant with total investment capital of approximately 400 million USD. Kyung Bang Vietnam Co., Ltd of Kyung Bang Group (the Republic of Korea) also investment and put into operation another fabric production plant (Phase 1) with investment capital of 40 million USD.

Domestic investors meanwhile are not inferior in terms of investment scale and also seized their opportunities in the sector. In early May of this year, Century Fiber JSC launched groundbreaking ceremony of a new plant, Trang Bang branch Phase 3 with total investment of 33.9 million USD. After going into operation, this plant will supply an additional 15,000 tonnes of POY and 15,000 tonnes of DTY yarn each year.

The Vietnam Textile and Garment Group has received permission from Quang Binh provincial People's Committee to invest in a fiber production plant in Quang Phuc commune, Ba Don town with a capacity of 30,000 spindles per year. The group has also signed a memorandum of understanding with the provincial people's committee to study and build another fiber plant in Gia Ninh commune, Quang Ninh district attached with a raw cotton growing region in the sand; invest in a Yarn - Knitting - Dyeing Complex for high-grade fabric production in Tay Bac Quan Hau Industrial Park.

The continual capital flows into the fiber industry were clearly due to the impact of the origin requirement from the Trans-Pacific Partnership (TPP). Accordingly, in order to enjoy the preferential tax when exporting goods to TPP markets, especially the traditional markets of Vietnam's garment industry like Japan and the US, Vietnam’s garment products must meet certain ratios of localisation rates.

In addition, although Vietnam ranks among the world’s top garment and textile exporters, the industry itself has seen an uneven development as the upstream part (sewing) develops much faster than the downstream part (materials). Therefore, the focus on developing the downstream part or being active in seeking material sources for production is a compulsory condition for the sustainable development of Vietnam’s garment and textile industry.

Along with the growing number of projects in the textile industry over the past few years, domestic fabric supplies have improved considerably and Vietnam even enjoyed trade surplus with fabric products. In the first four months of this year, Vietnam’s garment and textile exports reached 770 million USD while its imports valued only about 490 million USD, making a trade surplus of 280 million USD.

Removal of floor prices on rice export to be considered

Local firms would be allowed to export rice to their clients at the prices on which the two sides agree, instead of the floor prices set by the Vietnam Food Association (VFA), the Saigon Times Daily has reported.

The Government has told the ministries of industry-trade and agriculture-rural development to consider the impact of pilot removal of the floor prices on rice exports and propose appropriate management measures to facilitate export activity.

In the first four months of this year, Vietnam got 931 million USD from exporting 2.04 million tonnes of rice, down 7 percent in volume and 5 percent in revenue compared to the same period last year.

However, rice exports to the Philippines in the first quarter of this year surged six times in volume and 6.68 times in sales year-on-year, making it the second biggest importer of Vietnamese rice.

That market imported nearly 27 percent of Vietnam’s rice exports in the period after China with 38 percent.

VFA forecast rice exporting countries would face fierce competition while importing countries would increase domestic supply. Therefore, local exporters would have difficulty shipping the food staple.

Apart from pilot removal of the floor rice prices, the two ministries have been told to diversify export markets and set attainable targets.

VFA has recently revised down this year’s rice export target to 6.2 million tonnes from 6.5-7 million tonnes it announced earlier this year.

The FOB floor prices set by the VFA are 410 USD per ton for 5 percent broken rice, 375 USD per tonne for 25 percent broken rice, 365 USD per tonne for 35 percent broken rice.-

Song Than IP pledges to help riot-affected firms restore production

The Song Than Industrial Park in southern Binh Duong province pledges to do its utmost to support foreign-invested businesses hurt by recent social disorder to maintain their investment flow in the locality.

Huynh Uy Dung, Chairman of the Board of Directors and General Director of the Dai Nam Joint Stock Company, the main investor in the Song Than IP, made the commitment at a May 27 working session with representatives from 10 FDI enterprises, which all specialise in manufacturing Asama bicycle spare parts in the park.

Dung also informed participants about a plan to aid the businesses in resuming their production and ensuring jobs for their workers. He pledged to allow the Active International Vietnam Co., Ltd, a manufacturer of bicycle saddles, use 5,000 square metres at the IP without paying land use fees for 5-10 years.

Affected businesses will also be free to use 18,000 square metres of land to stock their products and materials during the process of restoring their production.

Dai Nam JSC will allow FDI enterprises to unconditionally use the Tan Dinh Industrial Cluster as a temporary place for their production, he said, adding the company will provide furnished accommodation for experts and staff working at the IP.

A representative from Asama Co., Ltd said the support is very timely and will help the company soon resume its production.

Tran Van Lieu, head of the managing board of Binh Duong’s IPs, required FDI companies operating in the Song Than IP 2 to count their real loss caused by the disturbances and submit a report on the damage to the board for its consideration as soon as possible.

He also suggested the firms pay for workers’ days off during the rallies and work with relevant agencies to tackle difficulties.

The disturbances erupted during workers’ rallies in protest of China’s illegal placement of its oil rig Haiyang Shiyou – 981 in Vietnam’s continental shelf and exclusive economic zone from early May.

Some extremists incited others to destroy property of foreign firms as well as of the State, businesses and individuals, and acted against law enforcement officials, disrupting social order and business activities. Thanks to the government’s timely interference, most affected companies have returned to work and social order and security has been restored.

Vietnamese in RoK receive funding from local firm

The Hoban Scholarship Foundation, run by the Republic of Korea (RoK)’s Hoban Construction Company, has agreed to grant 30 million Won (29,310 USD) to the Vietnamese Association in the RoK.

A memorandum of understanding on the grant was signed on May 27 at the Vietnamese Embassy in Seoul , witnessed by Ambassador Pham Huu Chi.

The fund, to be provided for one year from June 1, will be used to assist Vietnamese in the RoK who have married into Korean families by supporting them integrate into their host country’s society and teaching Vietnamese to their children.

The fund, granted to the association for the first time, will also be used to support the activities that boost the Vietnam-RoK friendship.

On the occasion, the foundation also presented five scholarships valued at 2 million Won (1,956 USD) each to five Vietnamese students in the RoK.

Purchasing power hits the buffers

The modest growth of retail sales of goods and services in the first five months of 2014, holding at 6 per cent, suggests that domestic purchasing has not considerably improved.

According to the General Statistics Office (GSO), retail sales in the first five months was estimated to reach VND178.9 trillion, or US$56.14 billion, an increase of 11 per cent over the same period last year

Further, said Vu Manh Ha from the GSO, the growth of purchasing power in the first five months had 5.5 per cent higher than the same period of last year. This modest increase was attributed to the slight increase of the consumer price index (CPI) at 0.2 per cent in May 2014.

The total retail sales of goods reached $42.1 billion, accounting for a proportion of the 75.2 per cent of the total growth, at 8.5 per cent.

The increase of goods was mainly attributed to the necessary items for daily living, such as food and home appliances.

Ha said, generally, that purchasing power in the first five months has not improved due to the public's limited incomes and it was difficult to return to the total growth of 12 to 17 per cent, as seen prior to 2011.

Agricultural firms gain access to cheaper credit

Agricultural manufacturers, integrated agricultural production—distribution projects, technology-applied models—can now have access to more loans at cheaper costs, the State Bank of Viet Nam (SBV) announced yesterday.

In Decision No 1050/QD-NHNN of May 28 that took effect immediately, eligible subjects are set to those that involve contracts to produce, process and distribute agricultural products, those that are granted certificates of technology-applied production by the Ministry of Agriculture and Rural Development and households.

Highest annual borrowing interest rates at commercial banks are 7 per cent for short terms, 10 per cent for medium terms and 10.5 per cent for long terms.

Short-term loans will be granted to meet the growing demand of fertiliser, seedlings and varieties of poultry and animals, as well as agriculture equipments, while medium- to long-term loans will support investment in infrastructure and equipments to develop technology-applied models.

This pilot lending programme will expire in two years.

The SBV has strengthened cooperation with related authorities, agencies and the banking system to develop better financial programmes for the field.

SBV has coordinated with the Ministry of Agriculture and Rural Development and the Ministry of Science and Technology to develop suitable mechanisms to help credit institutions expand investment in the sector, especially for agricultural production operations with strong application of advanced technologies. Given the approximately 70 per cent of Viet Nam's population living in rural areas, agricultural production has made tremendous contributions to national socioeconomic development.

In rural areas, underdeveloped agricultural credit insurance has seriously affected farmers' ability to repay, as it does not cover large variations in price due to natural disasters or epidemics. For that reason, banks only lend moderate amounts of capital.

Stimulating banks to maintain a minimum ratio of 20 per cent of their capital for agriculture and rural development is considered a practical measure that could facilitate credit activities in the field, as banks are still the major providers of loans to the sector.

Central bank officials said the bank had made efforts to regulate the monetary policy in a flexible manner to support credit institution liquidity and stabilise the currency market by boosting foreign currency reserves.

Quality standards spark fear among gold traders

Concern has spread among jewellery traders just days before Viet Nam is due to apply its first quality management system for domestic gold jewellery.

In September last year, the Ministry of Science and Technology (MoST) issued Circular 22, which takes effect next month. This regulates management and measurement policies in the gold trading business.

Under the circular, the standards of quality and measurement of gold jewellery sold on the local market must be written in a product code showing the correct gold content.

And at least 75 per cent of 18-carat gold jewellery must be pure gold, while 24-karat jewellery must be a minimum of 99.9 per cent pure gold.

The media has reported that due to a long-term lack of management controls, most 18-carat jewellery on the domestic market is only 58-68 per cent gold.

According to Nguyen Hoang Linh, a senior official from the Directorate for Standards, Metrology and Quality, many people pay for gold jewellery they believe has a high gold content.

However, when they re-sell the items, they receive far less money than they expect because the gold content is much lower than they expect.

While the circular outlines the proper management of gold quality, traders complain that they have been given too little notice. They say from the time it was issued to the date it goes into effect is too short for them to prepare and manage their inventory stock.

In the nine months, the concerns have spread to more than 12,000 traders. As the date of compliance with the circular draws closer, they say most of their products were made without the necessary code to indicate gold content.

Ly Hai Son, owner of a jewellery trading site in HCM City, told VTV Online that he knew about the circular and the deadline, but he had not yet done anything about it. He said he was worried and hoped for a change of mind.

He added that he could not remake nearly 1,000 items in his possession to meet the requirement of the new regulations because this would cost too much and could ruin his business.

According to the Viet Nam Gold Trading Association (VGTA), companies and businesses previously made their own declarations on product quality, with an error margin of 1-3 per cent, whereas the circular only allows an error margin of 0.1- 0.3 per cent.

VGTA deputy chairman Dinh Nho Bang told Biz Hub that if the circular was not revised, it would cause huge losses to traders and to millions of buyers in the country who hold gold as a method of saving.

Bang has asked the Ministry of Science and Technology not to apply the regulations to products that were made before June 1.

On May 27, the VGTA sent a letter containing 10 petitions related to the circular to both the Ministry and the Directorate for Standards, Metrology and Quality, pleading for the circular to be revised to better serve the trading community.

Lao Cai iron, steel factory ups production

The Lao Cai iron and steel factory in the northern mountainous province of Lao Cai produced its first batch of cast iron on May 26.

According to Nguyen Van Ton, Director General of the Viet Nam-China Mineral Resources and Metallurgy Company, the project's investor, the factory can produce 12-13 batches of cast iron every day, with a total output of 1,500 tonnes.

Applying the latest technology, the factory is the second largest of its kind in Viet Nam after the Thai Nguyen iron and steel factory.

In its first phase, the factory has a design capacity of 500,000 tonnes per year, which will be doubled in the second phase. The project uses Quy Xa mine as its main material source, which has a reserve of 120 million tonnes. The first batch of steel ingot is expected to be produced in June. Construction of the Lao Cai iron and steel factory, which is partnered by Viet Nam Steel Cooperation and Chinese Kungang steel and iron company, commenced in 2011 with a total investment of $337 million.

Ha Noi accelerates land clearance

The Ministry of Transport has asked investors of three key transport projects in Ha Noi to accelerate land clearances to meet the existing deadline.

The ministry made the request at a recent meeting held to discuss land clearances for the Nhat Tan Bridge, the road connecting Noi Bai International Airport to Nhat Tan Bridge, and the Cat Linh-Ha Dong urban railway project.

Site clearance efforts for these projects have made recent progress. However, some areas in Tay Ho, Soc Son and Ha Dong districts are proceeding slower than expected.

Specifically, two households occupying 216 square metres near the Nhat Tan Bridge and six households impeding the Noi Bai-Nhat Tan Bridge road are yet to be relocated.

Vice chairman of the municipal People's Committee Nguyen Quoc Hung said the committee had required investors to work with the Tay Ho district authority to carry out the site clearance and complete it this month.

The committee also requested the Soc Son district authority to work with investors to chalk out compensation for six households in the district.

Regarding the Cat Linh-Ha Dong urban railway project, Hung said progress on site clearance and construction was lagging behind schedule.

He said the ministry needed to pay about VND356 billion (US$16.9 million) in compensation to affected households to speed up site clearances.

In a reply to the committee's request, Deputy Minister of Transport Nguyen Hong Truong said the ministry had proposed the Government to deploy a further VND400 billion ($19 million) to implement the urban railway project.

As planned, the sum would be allocated to the city for household compensations.

Truong also required the management board of the railway project to carry out construction work after the site clearance was finished.

The Cat Linh-Ha Dong urban railway project was built at a cost of VND8.8 trillion ($419 million). The entire project measures longer than 13 km, including 12 stations and a depot. It is expected that the project will be completed by June, 2015.

The Nhat Tan Bridge project, which starts in Tay Ho District and ends at the intersection with Dong Anh District, is nearly nine kilometres long, with the bridge stretching 3.7 kilometers and the access roads 5.2 kilometres. Investment capital of VND13.6 trillion ($6.4 trillion) will be used to fund the new bridge.

Ministries instruct dealers to keep petrol, oil prices steady

The ministries of Finance and Industry and Trade yesterday asked dealers not to raise retail prices for petrol, oil and kerosene even though they might face losses.

According to the finance ministry, for about one month, dealers have been losing VND228 on every litre of petrol sold and between of VND52-VND162 per litre of kerosene.

The ministry said dealers could continue using the price stabilisation fund to cover their losses.

This would continue to give them VND200 per litre for petrol products.

The ministry also extended use of the fund to mazut oil used in industry, subsidising it by VND160 per litre.

Meanwhile, the dealers were also told to cut rate of using the fund from VND180 per litre to VND90 for diesel oil and from VND160 per litre to VND60 for kerosene.

The dispatch came into effective at 2pm yesterday.

The current retail prices on the domestic market are VND24,900 (US$1.19) for a litre of A92 petrol, VND22,680 for a litre of diesel oil and VND22,480 a litre for kerosene.

SBV ready to inject cash into commercial banks

The State Bank of Vietnam (SBV) said at a press briefing on May 28 that it was ready to provide cash for commercial banks in need of funds to stabilise banking activities.

The announcement followed concerns that rising tensions in the East Sea over China’s illegal deployment of an oil rig within Vietnam’s sovereign waters could cause instability in the banking system.

Head of the SBV’s Monetary Policy Department Nguyen Thi Hong said that banking activities were still normal at present and the central bank was keeping a close watch on market developments.

She added that the central bank would take any measures to keep the currency market and banking activities in check.

Hong earlier said that the SBV was working with other relevant agencies to step up foreign exchange regulation efforts and would severely punish those involved in racketeering and causing turmoil on the market.

On May 21, Governor Nguyen Van Binh gave an assurance that Vietnam’s central bank was committed to ensuring safety and security for foreign banks, as well as protecting legitimate interests of foreign investors in Vietnam.

Firms may issue C/Os

Vietnam is considering allowing manufacturers to issue certificates of origin (C/O) for their products to enjoy preferential tariffs of the ASEAN Trade in Goods Agreement (ATIGA), according to the Multilateral Trade Policy Department.

Speaking at a recent seminar in HCMC, Le Trieu Dung, deputy director of the department under the Ministry of Trade, said ASEAN countries were implementing two projects on the C/O self-certification mechanism for enterprises.

The first project has been piloted for a couple of years with participation of several hundreds of trading and production firms in Brunei, Malaysia, Singapore and Thailand. The second project was initiated earlier this year for Laos, Indonesia and the Philippines.

Due to some legal barriers, Vietnam will be able to join the second project after regulatory adjustments are approved by the National Assembly.

The common goal of ASEAN countries is to implement such a self-certification mechanism in the 10 member countries in 2015, and thus it is likely that Vietnam will join the second project soon, according to Dung.

Yuichiro Okumura, a senior inspector of Japan’s customs agency, said there was a shift in C/O issuance from authorities to goods importers and producers, especially in the agreements involving the United States.

Susumu Sato from the Japan External Trade Organization (JETRO) in Hanoi said exporters might be allowed to issue their own C/Os when Vietnam signed the Trans-Pacific Partnership (TPP) agreement or the free trade agreement with the European Union.

Vietnam’s labour productivity lowest in Asia Pacific

The most recent statistics on labour productivity in Vietnam has placed the country at the bottom of countries in the Asian Pacific region, according to the International Labour Organisation (ILO).

According to the report, 20% of Vietnamese workers do not have a labour contract, the average reaching 45% for workers under the age of 25. Those working in insecure employment situations and low-income earners make up 63% of the workforce.

The report also concluded that the productivity of the average Vietnamese worker is about 15 times less than that of an average Singaporean worker. Compared to Japanese workers, Vietnamese are ten times less productive.

In the period between 2002 and 2007 Vietnam experienced an increase in productivity of around 5% per year, which has now fallen to 3.3%.

Mai Duc Chinh, Deputy General Director of the Vietnam Labour Union, confirmed that the lower labour productivity rates were reflective of the real situation. He said that, compared with other regional countries, especially Singapore, Vietnam is lagging behind.

The director of ILO in Vietnam, Gyorgy Sziraczki, said that labour laws in Vietnam should be revised in order to improve the situation.

Sturgeon able to benefit Vietnam

Vietnam introduced Siberian sturgeon into cold-water areas in 2005. Four species are being farmed today, making the country one of the world's top ten producers of these valuable cold-water fish.

Sturgeons are a high-value species, especially their eggs which are made into caviar. They have been introduced into aquaculture in Vietnam in an effort to use the availability of cold-water resources, especially lakes and reservoirs, and have become a major cultured fish in highland and mountainous areas. With the development of sturgeon aquaculture in the cold-water areas of the north and central highland provinces, Vietnam has made its way onto the list of the top ten sturgeon producers in the world, along with China, Russia, Italy, Bulgaria, Iran, the US, France, Poland and Germany, according to the Food and Agriculture Association (FAO).

The four sturgeon species cultured in Vietnam are Siberian sturgeon, beluga, Russian sturgeon and sterlet, with Siberian sturgeon being the most popular, according to Dr. Tran Dinh Luan, former deputy director at the Research Institute for Aquaculture No. 1 (RIA 1) in the northern province of Bac Ninh. Chinese sturgeon was also introduced into Vietnam a few years ago but has not been as successful as Siberian sturgeon or the others because of its slow growth rate, he added.

Siberian sturgeon was the first species introduced into Vietnam from Russia via RIA 1. The fertilised eggs were hatched and reared successfully in many areas such as Sapa in Lao Cai province, Na Hang in Tuyen Quang, Thac Ba Reservoir in Yen Bai province, Da Lat in Lam Dong province and Da Mi Reservoir in Binh Thuan province.

The private sector has mainly contributed to sturgeon aquaculture development in Vietnam. In 2007, the Ha Quang Company co-operated with Russian experts to carry out trials on egg incubation and hatching, and raising Siberian sturgeons, Russian sturgeons, and sterlets in Tuyen Lam Lake in Da Lat. In 2008, the Vietnam Sturgeon Company applied the new technology to culture the four species in the Da Mi Reservoir. Surprisingly, more than 20,000 Siberian sturgeons, Russian sturgeons, and sterlets grew well at 30.5 degrees water temperature during the summer of 2008. After such great results, the company is also looking to produce caviar for export to markets such as Japan, Russia and the US.

Another private company, Yen Bai province-based Northern Sturgeon JSC has built a sturgeon nursery in Van Chan district and grown Siberian and Russian sturgeons in Thac Bac Reservoir.

Many other private companies such as Giang Ly in Lam Dong, Thien Ha in Lao Cai province and Chu Va Hydropower Company have also invested in this business but on a smaller scale.

There are many sturgeon farming systems in Vietnam such as tanks, ponds and cages. The local temperatures range between 16 and 18 degrees. As a result, sturgeons cultured in Vietnam grow 1.5-2 times faster than in their countries of origin. They also have lower feed conversion ratios and shorter farming periods and thus reduced labour costs, noted Dr. Luan.

Therefore, Vietnam’s sturgeon can compete with products from the temperate zone. Fish productivity has significantly increased, from 7-10 kilograms per cubic metre at the beginning to 20-30 kilograms today thanks to improved farming systems and technologies.

Vietnam has been ranked as the eighth producer of sturgeon in the world, Luan said. “It is important that there is a detailed development plan for this business in Vietnam.”

As part of Vietnamese government efforts to promote fish farming in highland areas, RIA 1 officer Nguyen Hai Son and researcher Nguyen Quang Thai have developed methods and guidelines for raising sturgeon in cages in Vietnam.

Son explained cage culture in lakes and reservoirs was considered one of the most important trends in many countries seeking to take full advantage of water surfaces to improve aquaculture activities. “Cage culture also has several advantages over other methods of culture because it uses existing water bodies and simple technology while requiring comparatively low capital investment,” he added.

The methods and guidelines include selecting the species, designing the cage, selecting the site, managing production, providing good quality feed, and sampling, harvesting and keeping records.

Records of cage environment and fish health should be kept to minimise any problems as early as possible in the production cycle, said Son. “Record keeping also helps farmers learn from past mistakes, thus reducing the risk and costs of production in subsequent crops,” he explained.

Locally-cultured sturgeon are popular in the domestic market, especially tourist destinations, as well as supermarkets, hotels and restaurants in major cities such as Hanoi, Hai Phong and Ho Chi Minh City and provinces such as Lam Dong, Dak Lak, Quang Ninh, Hai Duong, Bac Ninh and Bac Giang. They are sold live, fresh, chilled and frozen, whole or in chunks. The prices for live fish range from $10-15 per kilogram.

New gust of interest as wind power tariffs rise

The feed-in tariff for wind power projects could rise above the currently regulated 7.8 US cents in an effort to pave the way for the development of more wind power projects in Vietnam.

Director of the Ministry of Industry and Trade’s (MoIT) Renewable Energy Department, Pham Trong Thuc, made the announcement at a joint Vietnamese-French seminar on supporting the development of renewable energy held in Hanoi last week.

Thuc said that although Decision 37/2011/QD-TTg on wind power project incentives was passed in 2011, wind power still only accounted for 1.5-2 per cent of Vietnam’s overall power generation capacity.

“This year the MoIT will revise the Decision 37 to allow reasonable feed-in tariffs for wind power projects to attract investors,” said Thuc.

With a more than 3,000 kilometre-long coastline, Vietnam has giant wind power potential. The Vietnamese government is looking to attract scores of wind farm projects to produce 1,000 megawatts for the national grid by 2020.

Vietnam’s under-developed wind-power infrastructure has been ascribed to difficulties ranging from weather to technology, and, in particular, the high cost of investment and the cap on electricity prices.

According to the Institute of Energy, investors must spend $2,250/kWh for US and EU technology and $1,700/kWh for Chinese technology for a wind farm project producing 30MW. However, on average, the price for power generated by these projects is 10.68 US cents/kWh for the former’s technology and 8.6 US cents/kWh for Chinese technology. These figures include recouping capital and depreciation.

German Federal Enterprise for International Co-operation’s chief technical advisor Werner Kossmann told VIR that the current feed-in tariff in Vietnam of 7.8 US cents was too low to attract investors despite support mechanisms such as a 1 US cent/kWh subsidy from the Vietnam Environment Protection Fund, free land for projects and emissions reduction credits.

He also said that over the past few years many wind power projects had been registered, however, most of them remained on paper because power prices in the country were still set too low. He added that if the tariff was to increase to 10.2-12 US cents/kWh, dozens of projects would start moving forward.

Recently, Bui Quang Ngan, deputy director of the Central Wind Power Joint Stock Company explained that rising interest rates, plus input material price increases of 1.5-2 fold for wind power projects meant investors not only wanted, but needed an 11-12 US cent electricity tariff just to make a small profit.

Vietnam’s wind power industry is set to take off with 42 projects in the pipeline.

Agriculture reveals barren FDI vista

Faced with plunging foreign direct investment in agriculture, the Ministry of Agriculture and Rural Development is considering new methods to attract foreign investors to pump prime the sector with new capital sources.

Minister of Agriculture and Rural Development Cao Duc Phat told a workshop held last week in Hanoi on the attraction of foreign direct investment (FDI) into agriculture, that despite robust exports of agricultural products worth $28.5 billion last year, there had been an alarming plunge in FDI inflows into the sector.

Fifteen years ago, FDI into agriculture, forestry and fisheries accounted for 15 per cent of Vietnam’s total FDI volumes, but the rate had plummeted to 0.5 per cent over the past three years.

Nguyen Ba Cuong, deputy director of the Ministry of Planning and Investment’s (MPI) Foreign Investment Agency, said by the end of April this year, Vietnam’s agriculture, forestry and fisheries attracted only 520 foreign-invested projects of the country’s total number of 16,300.

“Almost all the FDI projects in the sectors are in the Red River and Mekong Delta regions. Remote provinces have barely attracted any FDI projects in these sectors. FDI projects in agriculture, forestry and fisheries mainly focus on areas with quick capital returns such as farm produce, timber and food processing, animal husbandry and animal feed,” said Cuong.

Nguyen Van Toan, vice chairman of the Vietnam Association of Foreign-invested Enterprises attributed the sharp fall in FDI in agriculture to the lack of material zone development planning and sudden changes in planning and policies by the local authorities.

Meanwhile, Bui Tat Thang, director of the MPI’s Development Strategy Institute said the lack of a long-term FDI attraction strategy and weak rural infrastructure still constituted major barriers for FDI inflows into Vietnam’s agriculture sector.

Determined to address the issue, Minister Phat said, “We realise that a review of the mechanisms and policies is required to stimulate foreign investors into the agricultural sector as we know it would bring about benefits for both businesses and farmers.”

The minister also promised to create a favourable agricultural investment environment, shorten administrative procedures, cut costs and remove the inconsistencies between policies and implementation.

According to Phat, in order to encourage foreign investors in agriculture, the Ministry of Agriculture and Rural Development (MARD) was considering allowing foreign businesses to directly procure farm produce from farmers instead of through intermediaries.

According to the MARD, it needed to create large-scale domestic businesses capable of partnering with foreign firms, while at the same time improving the quality of human resources in the sector.

Tedi South suggests four lanes for HCMC-Moc Bai expressway

Transport Engineering and Design Inc. South (Tedi South) has suggested that the HCMC-Moc Bai expressway should have at least four lanes by 2020 to serve increasing demand for passenger and cargo transport on this route.

The consulting firm under the Ministry of Transport said that the 55-kilometer expressway was planned to comprise four to six lanes and connect Belt Road No. 3 in HCMC with Moc Bai Border Gate in the southern province of Tay Ninh.

Tedi South proposed the expressway have four lanes by 2020 and be expanded to six lanes by 2040 based on its projections that the daily number of vehicles on the expressway would reach its highest rate of 62,000 PCU (passenger car units) by 2040, not to mention the strong increase in cargo transport between the two destinations.

At a meeting in Hanoi last week, Vice Minister of Transport Nguyen Ngoc Dong told Tedi South to consider different investment phases and options for the expressway project, with priorities given to building two main lanes and two sub-lanes to minimize investments.

The HCMC-Moc Bai expressway is one of the six highways connecting this economic hub and nearby provinces. It will also be part of a trans-Asia expressway linking economic centers and urban areas of Southern Key Economic Zone with seaports and international airports in the ASEAN region.

Along with National Highway 22, Ho Chi Minh Road, belt roads No.3 and No.4 in HCMC, the HCMC-Moc Bai expressway is expected to form an uninterrupted transport system in southwestern provinces.

Two lanes proposed for Trung Luong-My Thuan expressway

Cuu Long Corporation for Investment, Development and Project Management of Infrastructure (Cuu Long CIPM) has suggested developing two lanes for the Trung Luong-My Thuan expressway section in the Mekong Delta in the first stage due to difficulties in investment mobilization for the project.

Duong Tuan Minh, general director of Cuu Long CIPM, said the first phase of the expressway required nearly VND25 trillion (US$1.18 billion) and it was difficult to mobilize this sum.

Therefore, Cuu Long CIPM wanted to develop the expressway with two lanes of 2.5 meters in width each plus sections for emergency stops in the initial stage under the build-operation-transfer (BOT) format. The corporation will widen the road to six lanes afterward, using official development assistance (ODA) loans.

As for the My Thuan-Can Tho expressway section, Cuu Long CIPM also proposed carrying out the project in two phases. The first phase is scheduled for ground breaking in the third quarter of next year and completion in the second quarter of 2018 while ODA loans will be sought for the second phase to expand the expressway to six lanes.

Trung Luong-My Thuan-Can Tho Expressway will help shorten the travel distance between HCMC and the Mekong Delta once it is completed. A 40-kilometer expressway section between HCMC and Trung Luong in Tien Giang Province was opened to traffic in 2010.

Registered capital of new domestic businesses in HCMC up 26%

The number of newly-established domestic enterprises in HCMC fell by 2% to less than 9,560 in the year to May 20 but their combined registered capital grew by 26% year-on-year to more than VND53 trillion, according to the HCMC Department of Planning and Investment.

The department reported the figures at the HCMC People’s Committee’s economic review meeting for May on May 26.

In the period, more than 16,250 domestic operational enterprises registered to adjust business activities with combined additional capital of over VND47.3 trillion, up 15% in number and 4% in capital compared to the same period last year.

The department calculated the total sum of fresh and additional registered capital by domestic businesses in the January-May period neared VND100.5 trillion, up 14% from a year earlier.

In the period, 120 new foreign direct investment projects with total registered capital of US$724.2 million were licensed in HCMC, down 7.7% in number but up 356.4% in capital.

The strong increase in FDI flows resulted from projects in the garment and textile sector, including a high-quality apparel production undertaking of Worldon Vietnam (US$140 million), a quality fiber facility of Sheico Vietnam (US$50 million) and a rubber gloves project of Cleanwrap Latex Vietnam (US$10 million).

Besides, 40 operational FDI projects added US$68.8 million to their capital pledges in the first five months, bringing the total new and additional investments to US$793 million, up 119% year-on-year.

HCMC has so far received over 20 groups of foreign investors coming to sound out opportunities in trade, supporting industries, information technology and food processing among others.

BA HCMC looks for outstanding entrepreneurs

The HCMC Young Business Association (YBA HCMC) on May 26 held a press conference to introduce its Outstanding Young Entrepreneur Awards 2014 to honor outstanding young businesspeople of the city for this year.

The aim is to encourage businesspeople to do their best to contribute to development of the country and society. The eighth edition of the awards is one of the activities held to mark the 20th anniversary of YBA and the 9th Young Businessman Congress term 2014-2016 from May 2014.

Held every two years, the awards will go to 10 businesspeople in HCMC who have made outstanding business and social achievements, including taking good care of workers at their firms in the two latest years and respecting State management regulations.

The organizers will also choose entrepreneurs for the “Outstanding Young Entrepreneur” awards in the fields of effective business solutions, investments in new technology, environmental protection, social activities, and employee care.

Candidates must be under 45 years old and are recommended by YBA HCMC, business associations and clubs among others. Registration can be made from June 16 to July 16.

After 14 years, the awards have been given to 61 young outstanding and 11 typical entrepreneurs. The awards are great encouragement for young businesspeople to invest in and expand business and trading activities and contribute more to the city’s economic growth.

Apart from the awards, the YBA HCMC will also organize forums for city leaders and young entrepreneurs, Vietnamese CEOs, e-business as well as seminars on trade promotion.

The YBA HCMC was established with 30 members but its members have reached nearly 1,000 with total registered capital of nearly VND104 trillion (US$4.8 billion). These members have provided jobs for around 157,200 people.

Car imports hit record in May

Around 6,000 cars worth US$92 million have been imported into Vietnam this month, the highest monthly volume this year, according to the General Statistics Office (GSO).

Local media quoted the GSO as saying that the car imports rose 50% in volume and 3% in value over April.

Companies have spent more than US$380 million buying some 20,000 foreign autos in the year to date, increasing by more than 50% in volume and 45% in value.

VnExpress cited the Vietnam Auto Manufacturers Association (VAMA) as announcing that companies sold 11,300 units of different brands and models last month, rising by nearly 30% over a year ago and around 41,400 autos in the first four months of this year, up 36% over the same period last year.

After the Government reduced registration fees for the autos under 10 seats to support this auto market, the demand for cars has recovered after more than one year of stagnation.

VAMA has revised up its prediction that 125,000 units would be sold this year, up 14% over last year.

Hungary firms keen on agriculture

Hungarian firms are looking for investment opportunities in different sectors in Vietnam and agriculture is one of their prioritized areas, according to the chairman of Hungarian Chamber of Commerce and Industry.

Parragh Laszlo told the Daily last week when a delegation of Hungarian firms were visiting Vietnam that Vietnam was restructuring its agriculture sector to turn out more quality and value-added products, and this was a good opportunity for Hungarian firms.

Laszlo said as Hungary had an edge in agriculture, its enterprises would be able to cooperate with Vietnamese counterparts to help develop agriculture in this country.

Nguyen Le Ha, who is managing director of Vietnam-Network Co. Ltd. and a member of the delegation, said her company was seeking Vietnamese firms to implement cooperation projects in agriculture and that Hungarian government had supporting policies for agricultural development.

In addition to farming, Hungarian businesses also sound out the prospects for wastewater treatment, construction of water pipes, healthcare, education and technology, Hungary has been involved in a clean water treatment project in the central province of Quang Binh.

Laszlo said more members of the Hungarian Chamber of Commerce and Industry were coming to gauge the Vietnamese market and that a Hungary-Vietnam trade promotion center would be established in Vietnam later this year to support trade and investment cooperation between the two nations.

Two-way trade between Hungary and Vietnam remains insignificant, at US$100 million a year, and Laszlo forecast the figure could rise in the years to come.

“We have an export-import bank providing loans with preferential interest rates for enterprises willing to enter the Vietnam market. Therefore, it is expected that trade between the two nations will increase in the future,” Laszlo said.

Ba Dinh political center to be expanded

The Ministry of Construction and Hanoi authorities have announced a zoning plan already approved by the Prime Minister to expand Ba Dinh District in Hanoi - the political center of Vietnam.

The plan of scale 1/2000 envisages an additional area of 29.5 hectares for the political center compared to the 105 hectares in a zoning plan announced in July 2012.

The new plan includes the area of 9.14 hectares for the Party Central Committee agencies, 2.95 hectares for the President’s Office, 2.95 hectares for the National Assembly’s entities and 5.55 hectares for Government bodies.

The headquarters of the ministries of Planning and Investment, Justice, and Agriculture and Rural Development will be moved out of Ba Dinh to a new place in accordance with a general zoning plan for Hanoi. The premises of these three ministries will be transferred to other departments for use.

As per the plan of expanding the political center, the current building of the Ministry of Foreign Affairs will be restored before being transferred to the Vietnam Fatherland Front Committee after the new headquarters of the ministry is completed.

The new plan attaches importance to preserving and restoring the old French-built buildings of security, defense and diplomatic agencies.

ACB asks VietinBank to return embezzled money

The court hearing of a case against Nguyen Duc Kien, former vice chairman of Asia Commercial Bank (ACB), in Hanoi City on May 26 ended up in an argument between representatives of ACB and VietinBank, with the former asking the latter to return the deposits appropriated by a former VietinBank officer.

According to indictments, Kien and his accomplices issued a decision assigning 19 individuals to deposit VND718 billion at VietinBank. However, the money was embezzled by Huynh Thi Huyen Nhu, former deputy chief of VietinBank’s risk management department.

ACB at the court said that the deposits had been placed in accordance with the contracts between VietinBank and its customers. ACB transferred the money to the accounts its staff opened at VietinBank, with the bank issuing statements to confirm that the money had been transferred to VietinBank, not to Huyen Nhu’s own account.

After Huyen Nhu’s case was uncovered, VietinBank has yet to give an explanation on its responsibilities for the lost money. VietinBank rather than Nhu had to take responsibility, an ACB representative said.

Meanwhile, a lawyer defending VietinBank said the money was deposited at VietinBank as a payment account, which is different from a deposit account opened to earn interest.

If the ACB staff in question wished to open deposit accounts to take the interest, they should have asked for certificates of deposit.

“I doubt this was an agreement between Huyen Nhu and Bao Ngoc, deputy manager of budget of ACB,” the lawyer said.

The ACB side still insisted the deposit contracts were made between the assigned individuals and VietinBank. The ACB staff had made no documents assigning VietinBank to make payments via their accounts. Therefore, VietinBank must bear responsibility for the lost money.

Nguyen Van Hoa, ACB chief accountant, said that if a bank employee had deposited money at ACB and then withdrew it, ACB would have taken all responsibility.

If VietinBank is found guilty, Kien, ACB former chairman Tran Xuan Gia, and other high-ranking officers like Le Vu Ky, Pham Trung Cang, Ly Xuan Hai and Huynh Quang Tuan would not face the charge of acting against the State’s economic management regulations causing serious consequences.

The issue between the two banks was also debated at a lower court hearing of the Huyen Nhu case. State President Truong Tan Sang requested related agencies to clarify the problem before the appeals hearing opens.

Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR

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