Shares fall on continuing bank scandal

Share value plunged during yesterday's session, following another resignation by a banking official.

Eximbank's (EIB) vice chairman Pham Trung Cang was reported to have handed in his resignation on Wednesday.

According to the bank's chairman Le Hung Dung, Cang resigned after being linked to activities at Asia Commercial Bank (ACB), where three other officials have also resigned.

The resignation shows that the fallout from financial fraud by ACB's co-founder Nguyen Duc Kien is continuing. Kien was arrested by police a month ago.

Cang was the representative of ACB's stakes at Eximbank, which accounted for around 7-8 per cent of Eximbank's charter capital.

Along with Kien, Cang was one of the founding members of ACB.

Cang also resigned as chairman of plastics company Tan Dai Hung (TPC) on the same day. He held a 15.15 per cent share in the company.

EIB and ACB closed yesterday off 3.6 and 3.1 per cent, respectively. Meanwhile, TPC bottomed out to VND9,000.

On the HCM City Stock Exchange, the VN-Index retreated 1.34 per cent to 389.28 points.

Only 15 per cent of the listed stocks managed to rally.

The value of trades rose 20 per cent over Wednesday's session to VND967.86 billion (US$46 million) with 58.6 million shares changing hands.

Among blue chips tracked by the VN30, insurer Bao Viet (BVH) continued to hit the daily increase limit to reach VND33,000 ($1.5) per share. Only three other stocks posted gains – steel producer Hoa Sen (HSG), Kinh Do Confectionery Co (KDC) and food processor Bourbon Tay Ninh (SBT).

The VN30, dropped 1.6 per cent to 449.66 points.

Foreign transactions focused on bank stocks yesterday. They mostly bought shares in Sacombank (STB) and Vietcombank (VCB).

Meanwhile, three other listed bank stocks were heavily sold. Notably, EIB saw a record net of 1.3 million shares worth VND17.3 billion ($823,800). More than half of the share's volume yesterday was due to sell orders by foreign investors.

However, banking data showed that the system remained stable with further declining inter-bank rates. On the open market, the central bank has pumped VND6.9 trillion ($328.5 million) into the system while withdrawing VND5.39 trillion ($256.6 million).

"Although the risks within the banking system remain, we expect investor sentiment will soon stabilise," ACB Securities Co analyst Cao Tan Phat wrote in a daily note.

On the Ha Noi Stock Exchange, the HNX-Index fell 1.16 per cent, fetching 55.42 points. Decliners overwhelmed advancers by 147-49.

Trading was sluggish, with only 25.14 million shares worth a total value of VND183.7 billion ($8.7 million) exchanged.

Tra farmers await $440m

Tra fish processors and farmers lament about lack of funds, with a financial package of VND9 trillion (US$440 million) for the sector approved by the Government in August still remains on paper.

News of the package pushed tra fish prices up by VND4,000 per kilogramme to VND22,000 – VND22,500 from VND20,000 – VND20,500 in mid-August.

But the money remains out of reach to many tra farmers in the Cuu Long (Mekong) Delta who need funds to buy feed and fry – for breeding – and expand their business.

Tran Van Kiet, a tra fish breeder in An Giang Province's Phu Tan District who has a 1ha farm, said he needed money to buy feed for his fish, which weigh 0.5-0.7kg each.

"I have heard of the Government's financial package to support tra fish farmers, but cannot get access to it. To survive, I decided to feed my fish with feed we produce ourselves."

Vo Van Thanh, a farmer in An Nhon Commune in Dong Thap Province's Chau Thanh District, said even after recent price hikes tra fish is selling at less than production cost.

At current prices of VND22,000-22,500 per kilogramme, Mekong farmers are incurring losses of VND2,000-4,000.

As a result, many of them use only a part of their farms. According to the Dong Thap Department of Agriculture and Rural Development, more than 80ha of farms in the province remain unused since farmers are waiting to draw from the package.

The Viet Nam Association of Seafood Exporters and Processors said borrowers have to undergo "strict" approval procedures for loans from the financial package.

Duong Ngoc Minh, deputy chairman of VASEP, said four-month loans would be given by banks to farmers and processors at 11.4 per cent interest.

In the current stagnant tra market only those facing huge difficulties would accept such "unfavourable" conditions for the loans, he said.

Mai Thi Anh Tuyet, director of the An Giang Department of Industry and Trade, told Viet Nam News: "Assistance is needed for tra farmers and processing enterprises. Without it, the Cuu Long (Mekong) Delta's tra fish industry will suffer huge losses."

The loans should be provided to farmers and processors as soon as possible, she said.

But banks should not demand collateral for these loans since the farmers and processors had mortgaged most of their assets to banks for earlier loans, she said.

The financial package is necessary to save the tra fish industry which is expected to fetch export earnings of $2 billion this year.

According to VASEP, tra exports to the US are up 35 per cent this year, while exports to the EU have fallen sharply.

Shipments to the US have been worth $235 million. The US is the largest buyer of Vietnamese tra, with a share of 22 per cent.

VASEP deputy chairman Duong Ngoc Minh said firms increased exports to the US after demand in the EU fell sharply.

The US's catfish production has fallen, according to the country's Department of Agriculture, which reported the volume of fish processed in July was around 11,200 tonnes, down 6 per cent year-on-year.

Japanese push high-speed rail

Viet Nam should start building a North-South high-speed railway by 2030, according to a Japanese expert who spoke at a conference held yesterday in HCM City on high-speed railway development.

Dr Iwata Shizuo of the Japan International Cooperation Agency (JICA) said that, "because the railway's cost would be about 50 per cent of Viet Nam's current GDP, construction should begin by 2030, when a higher GDP is expected."

Dr Shizuo, head of the JICA investigation group for high-speed railway system development, told the conference that it was critical to have the system to reduce the expected overload on roadways and airways by that time.

He said the current railway needed to be upgraded as well.

"If the country begins work on a high-speed railway, the single railway system would need upgrading so that 50 trains a day could operate from both directions," he added.

However, even with an upgrade, the current railway could not be converted to a high-speed railway, which will have to be built separately.

Another JICA expert said that a high-speed railway system would also reduce greenhouse-gas emissions.

JICA experts said it was necessary to conduct a thorough examination of how rice cultivation would be affected by construction of the railway. Also, the locations of stations in areas that needed an economic lift would be helpful, they said, adding that the connectivity to the current railway, roadway and airway facilities was another issue that should be investigated.

The experts said that additional investigations would be conducted on the topographical and meteo-hydrological conditions of localities such as central Binh Thuan and Ninh Thuan provinces.

A focus on connecting the railway system and the to-be-built Long Thanh International Airport in southern Dong Nai Province should also be included in the plan.

Tran Quoc Dong, deputy general director of Viet Nam Railway Corporation, said the railway sector expected to first build a high-speed railway on two routes, Ha Noi – Vinh and Nha Trang – HCM City.

The North-South high-speed railway would have stations in 11 provinces, including Ha Noi and northern Ha Nam Province; central Nghe An, Ninh Thuan and Khanh Hoa Provinces; and southern Dong Nai Province and HCM City.

The conference yesterday involved participants from provinces that would have railway stations located in their areas.

Nomura IZ attracts foreign investors

The Nomura industrial zone (IZ) in the northern port city of Haiphong is an ideal destination for foreign investors to benefit from local incentive policies.   

The Nomura IZ, a joint venture between Haiphong city and the Nomura financial group from Japan, currently has 54 investors, mostly from Japan, the EU, US, and the Republic of Korea, with a total registered capitalization of nearly US$1 billion.

Businesses operating in the IZ recently employ 23,000 workers, earning 50 percent of Haiphong’s total export revenue.

Ho Dinh Tien, Deputy General Director of Nomura IZ, says many Japanese and other firms are keen to invest in the Nomura IZ as its modern infrastructure is creating a good business environment. However, he said, the managers need to further improve the transport network and electricity supply, and simplify administrative procedures for foreign investment.

So far, Tien says, the Nomura IZ has paid off well thanks to the close cooperation between the local administration, investors and infrastructure developers.

He says it always pays due attention to increasing the quality of its services as required by foreign investors.

Of course, Tien admits, there is no denying the fact that businesses do not have a comprehensive plan for long-term development for lack of capital and human resources.

However, he still has high hope that more foreign investors, including those from Japan, will come to the Nomura IZ.

Will Vietnam benefit from joining ASEAN Rice Exporters Alliance?

Thailand has proposed establishing an ASEAN Rice Exporters Alliance that consists of Vietnam, Thailand, Laos, Cambodia and Myanmar with the aim of increasing rice export prices.    

However, the proposal is facing some opposition from rice-importing countries and even in Vietnam, there are differing opinions on whether the country will benefit from joining the Alliance.

The aim of the Alliance taking shape at the end of this year is to help sharpen the competitive edge of ASEAN rice, promote information sharing and cooperation in production and marketing, and stabilize rice prices in the five countries.

The five previously mentioned ASEAN nations annually export a total of 20 million tonnes of rice, accounting for two thirds of global rice exports.

The International Grain Council (IGC) says that despite controlling nearly half of the global rice export volume, Vietnam and Thailand’s total share of the rice market will shrink to 38 percent later this year when India surpasses them to become the world's biggest rice exporter.

Establishing the ASEAN Rice Exporters Alliance is a response to the sharp increase in India’s rice market share after the country lifted its ban on exporting regular rice in  September last year.

As the world’s biggest rice exporter, Thailand has been carrying out a costly meal replacement programme after the government decided to buy rice from farmers at a price higher than it is on the market.

Currently, Thailand has up to 16 million tonnes of rice in stock but it is still reluctant to trade for fear of inflated prices.

Vietnamese rice has gone down in price since early this year in the face of tough competition from cheap Indian rice.

The Deputy Head of the Vietnam Agriculture Institute, Professor Dr Bui Chi Buu, says that as the second most populous country in the world, India stores a large volume of rice.

To maintain its temporary stockpiles, India has to sell the old rice in stock to make room for the newly harvested rice.

By far this year, India has traded just 30 million tonnes out of its more than 40 million tonnes of rice in stock.

The global rice market has experienced wild fluctuations following India’s decision to sell 20 million tonnes of stockpiled rice at low prices.

Vietnam has no such stockpiles of rice for export since its rice is not highly graded in the world. Most of its customers are mainly low-income nations, which puts the country at a disadvantage to compete with cheaper rice from India.

In addition, experts say Myanmar will present the biggest challenge for Vietnam in the near future as it annually produces 13-14 million tonnes of rice and its government is trying to gain a leg up on the regional export market.

Some claim the Myanmar Rice and Paddy Traders Association (MRPTA) are working on export management programmes to help drive up rice prices despite the fact it is only capable of producing rice of the same quality compared to Vietnamese rice.

So, in order to boost Vietnam’s rice exports and help farmers make a profit, Vietnam needs to join the ASEAN Rice Exporters’ Alliance to avoid unfair competition through reciprocal market concessions.

The Vietnamese Government knows too well that only by helping farmers earn higher incomes and stabilize their lives can it achieve the goal of rice production and export in a sustainable manner.

Opportunities for wood processing

The global economic recession has reduced the global consumer demand, but may open up an opportunity for Vietnam’s wood processing industry to develop.    

The remarks were made by Nguyen Chien Thang, chairman of the HCM City Handicraft and Wood Industry Association (HAWA) at a seminar in the city on September 18.

Thang said that Vietnam ranks among the top ten wood producers and exporters in the world and its wood export turnover is likely to rise to US$15-20 billion in the next ten years.

According to the HAWA president, foreign businesses are shifting their production base to Vietnam thanks to the country’s cheap labour cost, which is currently standing at US$ 6 per person per day compared to US$10 in China and US$13 in Malaysia.

However, to achieve this export value target, Thang said, wood processors need the government’s synchronous policies on bank rates, vocational training and an adequate supply of materials.

He also underlined the need to build a support industry for wood processing.

At the seminar, businesses proposed that the government include wood processing in the list of key industries with preferential policies to be introduced to support the businesses.

Applying CSR norms in business activities

“Applying Corporate Social Responsibility (CSR) norms – ISO26000 in business” was the main theme of a seminar held by the Leather and Footwear Research Institute in Hanoi on September 17.     

General Secretary of the Vietnam Leather and Footwear Association Nguyen Thi Tong said that meeting CSR norms for sustainable development is often considered as a non-tariff trade barrier and challenge on the path to international integration for developing nations like Vietnam.

The ISO26000 project will help Vietnamese businesses, especially small and medium-sized ones, become effectively involved in the process of international integration and sustainable development, while facilitating CSR in Vietnam.

It is the manual for human resource training and awareness improvement for businesses, helping raise their profile and competitive capacity in international integration,” Tong told the seminar.

Florian Beranek, Chief Technical Advisor of the CSR project, said that the project’s main objective is to help raise businesses’ awareness of the benefits from integrating CSR into sustainable development of businesses themselves, as well as of the community and society.

Promoting CSR should be an integral part of production and business strategies. It is also necessary to strengthen cooperation between European and Vietnamese businesses in order to develop cooperative ties between Europe and Asia, he said.

Beranek added that dealing with demanding customers today, the project will help businesses address environmental issues and promote social policies for more sustainable production in the future.

FTA beneficial for both Vietnam and EU, say economists

It is necessary for Vietnam and the EU to accelerate the negotiations on a bilateral free trade agreement (FTA) as this will be beneficial for all parties concerned, say economic analysts.   

At a seminar jointly held by the Vietnamese Chamber of Commerce and Industry (VCCI) and the Dutch Embassy in Hanoi on September 18, economic advisers said that at present, only 42 percent of Vietnamese exports to the EU enjoy a tax rate of zero percent while the figure for Malaysia ranges from 80-85 percent.

If the FTA takes effect, up to 90 percent of Vietnamese enterprises will enjoy a tax rate of zero percent, they added.

Dr. Doan Duy Khuong, VCCI’s Vice President, noted the active and comprehensive development of the Vietnam-EU relationship.

The EU has become one of Vietnam’s leading trade partners in various areas, especially development cooperation and trade and investment, said Khuong, adding that the bloc has significantly supported Vietnam during its development and international integration.

However, he pointed out a number of difficulties facing Vietnamese exporters such as the shortage of information as well as anti-dumping taxes imposed on several Vietnamese goods. Vietnam’s investment in the EU still remains modest, mostly in the Netherlands, the Czech Republic and Germany , said the VCCI leader.

Sharing Khuong’s views, Nguyen Duc Thuong, deputy head of the European Market Department under the Ministry of Industry and Trade, said that despite the global economic turmoil and public debt crisis, two-way trade between Vietnam and the EU last year has increased by 3.9 percent to over US$23 billion of which US$16.6 billion came from Vietnamese exports.

Thai enterprises keen to invest in Vietnam

Vietnam is a promising market for Thai enterprises, thanks to its stability and favourable investment environment.

Vice Secretary General of the Thai Board of Investment ( BOI) Vasana Mututanont said this at a seminar on opportunities to strengthen trade and investment in Vietnam, which was held in Bangkok by the Thai Ministry of Foreign Affairs (MFA) and the BOI on September 18.

Head of the MFA Department for East Asia, Paskorn Siriyaphan, said Vietnam is an important market for Thai enterprises and said he hopes to boost more trade and investment in the country.

Trade between the two countries has developed significantly with two-way turnover reaching US$9.5 billion last year compared to just US$3.6 billion recorded in 2006.

Thailand ranks third among the ASEAN countries investing in Vietnam, with US$6.7 billion in registered capital and creating jobs for over 12,000 local people.

Hanoi’s September CPI increases by 2.47 percent

Hanoi’s consumer price index (CPI) rose 2.47 percent in September compared to the previous month, according to the municipal Department of Planning and Investment.
The city’s average GDP increased by 7.9 percent in the past three quarters of this year, with services rising 8.9 percent, and industry and construction up 8 percent.

Total state budget revenue is estimated at VND92,275 billion, meeting 63.1 percent of Hanoi’s set target.

However, the industrial and construction sectors are facing numerous difficulties, as shown by the 45 percent drop in key products.

Export turnover is estimated to have increased by 0.4 percent in the third quarter of this year, bringing the nine-month value to US$7.53 billion.

So far this year, 231 investment projects have been licensed with total registered capital of US$919 million, equivalent to  88 percent of the figure in 2011.

Since early 2012, over 11,480 new enterprises have been established, 730 have filed for dissolution, and 1,900 have halted operations.

Vietnam attends Moscow Int’l Food Exhibition 2012

Nearly 20 Vietnamese businesses have displayed different kinds of agro-forestry, seafood, tea, coffee, fruit and canned food products at the 21st international exhibition of food and drinks in Moscow, Russia.

The annual event, which opened on September 17, has attracted more than 1,400 companies from nearly 70 nations around the world.

Companies from Russia and Commonwealth of Nations Independent States account for 40 per cent, Europe 20 per cent and Asia 25 per cent of the total products on show.

The exhibition will last until September 20.

Wood products go against the grain

"Viet Nam has an opportunity to expand exports of wood products despite the ongoing economic crunch," delegates said at a conference yesterday.

The assertion came as the conference discussed the pressing question of retaining and developing export markets for the wood processing industry and ensuring its stable development.

The wood processing industry has enjoyed strong growth over the past 10 years, with export value increasing every year, said Nguyen Chien Thang, chairman of the Handicrafts and Wood Industry Association of HCM City.

The country earned US$3.9 billion from the export of wooden products in 2011, a year-on-year increase of 15.1 per cent. The US, EU, Japan and China have been the main import markets for Vietnamese wooden products, he said.

"In the current economic downturn, demand for wood products has been shrinking globally, but compared to other countries, Viet Nam still has opportunities to boost exports," delegates said at the conference.

"China was not encouraging furniture production and has imposed high export taxes, Italy and Germany are closing furniture factories due to the crisis, and Malaysia does not have enough labour for the industry," they said, adding this gave Viet Nam a window of opportunity to increase its market share.

"Currently, Viet Nam's furniture export value accounts for just 2.68 per cent of the total figure of 70 furniture exporting countries," Thang said.

"If the industry undertakes appropriate development measures and gets effective support from the Government, wood product exports can increase to $15-20 billion in the next 10 years," he added.

Conference delegates agreed that in order to ensure sustained development of industry, local material sources must be developed to reduce reliance on imported materials.

Nguyen Manh Dung of the Agro-Forestry and Fisheries Processing Department said the target was to source 60 per cent of raw materials from plantations with clear origin certification within the country by 2020.

Hoang Duc Doanh, head of the Forest Management Department of central Quang Tri Province, suggested that the Government draw up a plan to issue such certification within the country, instead of depending on international organisations, which is an expensive process. The Government and enterprises should support farmers in obtaining these certificates, he said.

Ha Cong Tuan, deputy minister of Agriculture and Rural Development, advised enterprises that besides boosting exports to traditional markets like the US, EU and Japan, enterprises should focus more on expanding their share in the domestic market.

Tuan said local firms should upgrade production technology to reduce costs and raise product quality, and to reduce export of raw material. He also called on businesses to co-operate instead of engaging in unhealthy competition.

Chad Ovel, general director of AA Corporation, said Vietnamese exporters should be more active in seeking importers by taking part in international trade fairs, and creating designs of their own. They should not just wait for buyers to come and produce products following the latter's designs, he said.

Demand for furniture products in the US market has started to recover in 2010 and continued to increase last year, said Giovanni Rojas of AmCham.

He asked local firms to conduct research on market demand and produce suitable products.

Harvey N Dondero, executive general director of Theodore & Alexander, also advised local exporters to take part in trade shows in the EU as well as visit outlets in European nations to understand the market better.

Regarding China, a big importer of wood chips from Viet Nam, delegates said the industry should consider appropriate measures to develop this market in the most effective way.

Thang petitioned the Government for favourable policies that would provide long-term loans for enterprises so that they could equip themselves with modern technology. This would help them improve productivity and quality, he said.

Viet Nam, Italy to enhance industrial collaboration

Viet Nam and Italy have agreed to promote bilateral co-operation in industrial production and increase their products' competitiveness, said a Viet Nam News Agency correspondent in Italy.

The agreement was signed in Rome yesterday between Viet Nam Ministry of Industry and Trade and Italian Investment and Technology Promotion Office, under the United Nations Industrial Development Organisation (UNIDO ITPO).

The two sides committed to organise workshops to teach Italian and Vietnamese people about the two countries and exchange information on projects that can help improve the relationship between Italian and Vietnamese enterprises.

They also consented to promote sustainable development and green industry.

A Vietnamese representative will join UNIDO programmes to reinforce the industrial projects proposed by Viet Nam.

At a workshop on potential co-operation in industrial development in Viet Nam that was also held yesterday in Rome, Elisabetta Belloni, Head of Italian Foreign Affairs Ministry's Development Co-operation Department, said the projects with Vietnamese small-and medium-enterprises (SMEs) that UNIDO has supported in recent years had brought about significant results.

Viet Nam's entry into the World Trade Organisation and its preparation for Free Trade Area played an important role in helping SMEs in both countries seek out co-operation opportunities, Belloni added.

Experts from UNIDO ITPO agreed that successful co-operation between Viet Nam and UNIDO in this time of economic difficulty proved that Italian SMEs could find investment opportunities in the Asian country.

Thousands of businesses in Hanoi go belly-up  

An estimated 2, 500 enterprises in Hanoi have dissolved or halted activity in the first nine months of the year.

According to Hanoi Department of Planning and Investment, as of September 2012, the number of new businesses is 11,480, accounting for a total capital of VND64 trillion, only 68% of last year's numbers.

Meanwhile, 730 firms are in the process of completing procedures to dissolve, 1,900 firms have stopped business activities and many companies that are still running are obliged to hold large inventories. The beverage, textile, construction and auto industries are having a particularly hard time, as many companies cannot make returns on their investment or access bank loans.

For the construction industry, capital has been a major problem, with only about 50% of funds having been disbursed for planned projects. There are currently 231 FDI projects in Hanoi that have been renewed, accounting for about USD919 million. This is just 88% of last years figure.

The city budget has also been affected. The total income of the first nine months of 2012 was around VND92 trillion, or 63.1% of the local People's Committee's expectations, and municipal budget expenditures were VND31 trillion, or 58.7% of what was forecast.

Not only has the slump in the economy lowered income, it also reduced the municipal budget and threatens social safety.

A representative of the Ministry of Industry and Trade said the Government should hold meetings with enterprises and banks in order to find the best solution. He said that more capital is needed to deliver goods to rural areas and quicken the pace of transportation projects.

In the future, Hanoi aims to carry out policies to boost development, ensure social safety and reduce inflation.

Nguyen The Thao, the chairman of Hanoi People's Committee, said the city needs stimulus policies to support enterprises and stabilise prices.

Construction Ministry moves to save materials companies    

The Ministry of Construction is seeking support from the Government to ease difficulties for companies operating in the construction materials sector.

Due to high inventory, a number of them have had to slow down or halt their operations entirely

The ministry sent a detailed report to the National Assembly Economic Committee. The report prioritised certain areas of the construction materials sector.

In the report, the Ministry of Construction said, in 2011 and the first five months of 2012, constructions materials companies faced many challenges in production, sales and capital.

Due to high inventory, a number of them have had to slow down or halt their operations entirely, the ministry said, citing inventory figures of Vietnam Glass Association, Vietnam Building Ceramic Association and Vietnam Steel Association.

The country has seven companies that produce large glass plates with a combined capacity of 150 million square metres per year, but by late August their total inventory was estimated at 60 million square metres, equal to four-months output. Of the total, floating glass inventory accounted for 57 million square metres.

From last year to late August 2012, three out of four rolled and laminated glass firms halted operations, reducing output by 85% in these areas.

VIGLACERA, which has three glass production lines with a total capacity of 33 million square metres, was holding an inventory of 15.7 million square metres by August 30.

Ashlar facing stone inventory was around 60 million square metres, and around 40 production lines have been closed down.

Cement firms, which have been facing big losses include Tam Diep, Haiphong, Quang Son, Cam Pha, Ha Long, Song Gianh, Song Thao, Thang Long and Dong Banh.

In a report, the Ministry of Construction recommended eight measures to save the construction materials industry, including restructuring of State-owned companies by selling their State-owned assets or buying their debts.

According to the ministry, cement, ceramics and adobe brick procurers should be included in the list to receive the Government’s support under Decree 13/NQ-CP, issued on May 10, 2012.

Banks have been asked to extend debt repayment for construction material firms as well as investors in housing projects for works that are still under construction.

The ministry added that the lending interest rate cut should stay in place to make credit available for businesses.

Other measures recommended were increased support from the State Bank of Vietnam and commercial banks to help businesses arrange payments in foreign currencies.

The ministry has also asked for a reduction of 50% in the VAT for households and individuals who are first-time home buyers and are buying low-income apartments smaller than 90 square metres, and which cost less than VND20 million (USD952.38). It is hoped that this will help increase the demand for construction materials.

Irrigation overhaul to cost $1b
Upgrading the country's irrigation system to improve its efficiency to 80 per cent will require around VND20 trillion (nearly US$1 billion) under a plan drawn up by the Ministry of Agriculture and Rural Development.

The plan seeks to utilise irrigation works nation-wide to increase, by 2020, the total irrigated areas by 5 per cent and reduce electricity and water use per hectare by 10 per cent.

Deputy minister of agriculture Hoang Van Thang told a recent meeting that though the country got a lot of rainfall, irrigation was widespread because of the uneven distribution of rainwater in terms of location and time.

The country has 904 large to medium- sized irrigation works that can provide water for 200 hectares of fields or more. Of them 11 irrigate over 100,000ha, while more than 100 others are capable of irrigating 2,000ha or more.

Together they irrigate 5.5 million hectares and keep out saltwater from 0.87 million hectares and help clean alum for 1.6 million hectares.

There are also more than 8,000 other facilities like weirs, sluice gates, and pumping stations.

There are 6,831 dams of various kinds with a combined capacity of 50 billion cubic metres of water.

They not only provide water for 80,000ha of lands and people's daily use, but also help generate electricity.

The largest ones include Hoa Binh, Thac Ba, Son La, Na Hang, Nui Coc, Cam Son, Cua Dai, Song Muc, Ban Ve, Ke Go, and Dau Tieng.

But many of the old facilities have seriously deteriorated, badly affecting water supply, according to Nguyen Duy Hien, deputy director of the General Irrigation and Water Management Office.

Many pumps were installed in the 1960s, and their efficiency has been down to just 70-75 per cent now, he said, pointing out that many reservoirs were 30 to 40 years old.

In addition, many of the works have been affected by illegal encroachment by people and severe pollution due to wastewater from industrial parks, farms, and residential areas, he said.

Consequently, many irrigation works operate at only 60-65 per cent capacity, some at a mere 30 per cent, he said. Their reduced efficiency has also increased the cost of operating them because of the great amounts of water and electricity wasted.

The plan would include some drastic measures to resolve all these problems, Thang added.

Local carmaker partners with Siemens on hybrid

Siemens Viet Nam and Viet Nam Motors Industry Corporation (Vinamotor) yesterday signed an agreement to manufacture an ELFA hybrid bus prototype.

Siemens will supply all necessary ELFA components and provide technical support while Vinamotor will prepare the platform and manufacture the remaining parts of the bus for operational readiness.

This kind of city bus can reduce fuel consumption by up to 50 per cent compared with standard models, and also mitigate its impact on the environment through lower exhaust emissions while providing maximum passenger comfort.

According to President and CEO of Siemens Pham Thai Lai, the prototype is expected to be ready for initial demonstration by July next year. Upon successful production and testing, the prototype will be put into experimental operation with passengers on public roads for three months before a final performance evaluation. Serial production is expected to be carried out immediately after the evaluation stage.

"As the number of city dwellers in Viet Nam increases, city buses continue to be a major means of public transport. Its role will remain essential in the future when there are mass transit systems such as a metro or mono-rail in big cities like Ha Noi and HCM City.

"The successful implementation of the hybrid bus project will represent a significant milestone in the development of the automotive industry in Viet Nam. Being unique in Southeast Asia, the project will not only help provide solutions for emerging challenges in energy efficiency, cost saving and environmental protection but also open up a great opportunity for this industry in exports," Lai said.

State to re-export seized tobacco

The Prime Minister hopes to light up Viet Nam's anti-smuggling budget with a pioneering scheme to re-export seized tobacco.

Under the PM approved Decision No. 1112, good quality tobacco seized from smugglers will be re-exported as part of an experiment running from now until the end of 2013. Money earned from the pilot scheme will be used for future anti-smuggling work, but there are strict conditions on the selling terms.

The re-export must be carried out at international border gates and is not permitted to be done in land or to countries bordering Viet Nam. The Ministry of Industry and Trade will be responsible for appointing suitable enterprises to perform the task, as well as regulating them.

Confab promotes EU free trade pact

Speedier negotiations between Viet Nam and the EU on a bilateral free trade agreement (FTA) would hasten the economic benefits for both sides, a conference heard yesterday.

Speaking at the event, co-organised by the Viet Nam Chamber of Commerce and Industry (VCCI) and the Dutch Embassy in Ha Noi, economic advisers said, "currently only 42 percent of Vietnamese exports to the EU enjoy a zero per cent tax rate while approximately 80-85 percent of exports to Malaysia are tax free."

If the FTA took effect, up to 90 percent of Vietnamese enterprises would enjoy a zero per cent tax rate, they said, adding that it would also encourage two-way investment between the EU and Viet Nam.

The EU has become one of Viet Nam's leading partners in trade and investment, said Nguyen Duc Thuong, deputy head of the European Market Department under the Ministry of Industry and Trade.

Two-way trade increased significantly in recent years, from US$4.1 billion in 2000 to $24.3 billion in 2011. Vietnamese exports to the bloc, including footwear, textile and garment, seafood, coffee and wooden goods, have experienced six-fold increases over the 11-year period.

Conversely, the first half of this year has seen EU businesses pump $160 million into 50 new projects in Viet Nam.

Technologically advanced European investors have made a great contribution to creating new industries and new products with high technology content, Thuong said, adding that the EU investment focused mainly on high-tech industries such as telecommunications, finance, office rental and retail.

Despite the encouraging export turnover, Vietnamese exporters have still encountered challenges in accessing the EU market due to information shortages and anti-dumping taxes imposed on several Vietnamese goods, said VCCI vice chairman Doan Duy Khuong.

Viet Nam's investment in the EU remained modest and was mostly limited to the Netherlands, the Czech Republic and Germany, Khuong said.

Canon rolls out high-resolution map printers at Geospatial Forum

Canon, the world leading image solution provider, has introduced their versatile and complete solution for working with high resolution and large format maps in geo-governance at the 11th Asia Geospatial Forum.

With features bridging satellite and cloud technology, the large format printer and the large format multifunctional printer are expected to bring about a breakthrough in the industry when combining imaging systems with reception stations. Aiming to possess the most modern space centre in ASEAN by 2020, Viet Nam has taken vigorous steps towards geospatial development with the launch and use of Vinasat 1 and Vinasat 2. The three-day forum wraps up today.-

Digital information accounts for 45% of enterprise value

In Viet Nam, digital information makes up 45 per cent of an enterprise's total value, according to the Symantec Corp's first ever 2012 State of Information Survey.

"In Viet Nam, the rapid growth of digital information is inevitable with the increasing usage of technology among enterprises," said Alex Ong, Symantec's country director for Viet Nam. "While organisations in the digital economy can use the information they generate every day to better serve customers and increase productivity, the same information can be a major liability if not properly protected and managed."

 New regulations issued for construction licenses

The Government issued Decree No 64/2012/ND-CP on September 14, regulating issuance of construction licences. Under the decree, standalone residential housing in urban areas must be in conformity with detailed construction planning (1:500 scale), as well as regulations on urban architecture and design. This is notable since many areas in the country do not yet have plans at this level of detail.

Applications for construction licences, in addition to the documents already required, will also be required to include a drawing of the main load-bearing structure (foundation, frame, wall, load-bearing roof). This provision has been controversial because preparing such a drawing is costly and many in the construction industry believe that State authorities lack the qualifications to evaluate these drawings.

To deal with projects that take too long to complete, the decree provides that construction licences will be withdrawn if the investor does not commence construction within six months of the date the licence is granted. The new decree takes effect on October 20.

Fees change for setting up representative offices

The Ministry of Finance issued Circular No 133/2012/TT-BTC on August 13, governing fees for foreign traders to establish representative offices in Viet Nam. Under the circular, the fee to license a new representative office is VND3 million. Reissuing or amending a licence will carry a fee of VND1.5 million. The fees must be paid Vietnamese dong. This circular takes effect on October 1 and supersedes Circular No 73/1999/TT-BTC of June 1999. The ministry is also gathering public comment for a new circular on fees for foreign trade promotion organisations to establish representative offices.

Conditions set for banks to list shares

The State Bank of Viet Nam issued Circular No 26/2012/TT-NHNN on September 13 providing guidelines for the listing of shares on domestic and overseas securities markets by joint stock credit institutions. Under the circular, a credit institution seeking to list shares must have been operating for at least two years prior to applying to list, and the institution must have shown profits based on audited financial reports for the two most recent years prior to submitting the application. The institution must have maintained the ratio of non-performing loan for the two most recent, consecutive quarters of under 3 per cent and must not have been subject to any administrative sanctions or fines in excess of VND30 million for at least 12 months prior the application to list.

The circular takes effect on October 29 and will replace Decision No 787/2004/QD-NHNN of June 2004 governing issuance and listing of stocks by commercial banks.

State Bank aims to stabilise gold prices

The State Bank of Viet Nam is implementing several measures to stabilise the domestic gold market, deputy governor Le Minh Hung told the media on Monday.

In recent days, gold prices in the domestic market have fluctuated and at times hit a record level of more than VND47 million per tael after 10 months, and was well above the global price by nearly VND3 million.

In light of the situation, the central bank met with the media to discuss the recent performance of the domestic gold market as well as the Government's measures to stabilise it.

On behalf of the central bank, deputy governor Hung said the gold market's recent fluctuations were mainly affected by changes in global gold prices caused by two major events that occurred recently.

The European Central Bank announced a plan to buy government bonds to help countries in the euro zone to overcome difficulties created by the debt crisis, particularly after the US Federal Reserve decided to loosen monetary policy to support the economy and were committed to keep interest rates low by at least 2015, according to Hung.

These factors have caused global prices of gold and precious metals to rise sharply, and the domestic gold price is expected to follow.

The deputy governor also said the domestic gold rate was strongly influenced by events occurring in the country in recent weeks.

Supplies on the market still increased since many investors who had bought gold at prices of between VND42 million and VND43 million per tael rushed to sell them to make profits when the gold rates reached an expected level, Hung said.

Because of this, from late last week to Monday the world gold price rose slightly but the domestic rate dropped and no signs of a gold fever were seen during this period.

In an attempt to stabilise the gold market, the central bank has applied several measures, one of which was to allow credit institutions that were facing difficulties in gold liquidity to borrow in gold.

The central bank also issued regulations on the organisation and management of gold bar productions that would allow credit institutions and enterprises involved in the gold-trading business to convert non-SJC to SJC-gold bars and reproduce damaged gold bars.

It has already asked involved units to report updated information on the number of non-SJC gold bars that need to be converted into SJC gold.

The central bank will continue to closely oversee the domestic gold market and apply proper measures to keep the market stable.

Hung warned that people should minimise their losses by being careful about trading gold.

Viet Nam at World Food show

Nearly 20 Vietnamese enterprises have attended World Food 2012, the 21st International Food and Drinks Exhibition which opened yesterday in Moscow.

Viet Nam traders strongly promoted seafood, fruit juices, tea and coffee. On the first day of the exhibition, Vietnamese booths have attracted many foreign visitors coming to learn about product information.

The four-day fair included food tasting and a new-products competition.

Nearly 1,500 companies from different 70 countries are taking part in the exhibition, 40% from Russia and the Commonwealth of Independent States, 20% from Europe and about 25% from Asia.

Viet Nam's Minister of Agriculture and Rural Development, Deputy Minister Diep Kinh Tan is in attendance.

Fewer orders placed at international travel expo

The 2012 International Travel Expo (ITE) held in HCMC from September 13 to 15 attracted quite a few visitors, but the number of orders placed at the event is smaller than the previous years.

At present, participants are reviewing their business results at the expo. However, in the Daily’s observation, orders and new partnerships gained from this expo are fewer than the previous events.

Nguyen Minh Quyen, deputy director of Ben Thanh Tourist Travel Service Center, said his company met 50 international tour buyers and received requests for tour programs and prices from some partners from India, Australia and the U.S. Especially, a partner from the Baltic state of Lithuania decided to stay after the expo to work with Ben Thanh Tourist and survey tours.

“We received a number of orders, but fewer than last year. Many guests mainly came to collect information and make surveys,” he said.

At the 2012 ITE, Saigontourist met 49 foreign customers and signed five contracts. However, these contracts had been negotiated at the company’s office before the expo took place.

‘We have not recorded any special deal at the expo, but some partners from the new market Kazakhstan showed keen interest in Vietnam,” said Doan Thi Thanh Tra, marketing manager of Saigontourist.

Similarly, Nguyen Van Khoa, general director of Phan Thiet-based Mui Ne Bay Resort, said international customers visiting the booth of Mui Ne Bay was fewer, and so were potential partners that can send tourists over.

“What makes us most satisfied is to have meetings with several partners from Russia, Germany and India. These are the markets from which Mui Ne Bay wants to lure long-stay tourists,” he said.

Representative of the marketing and sales department of a five-star hotel in HCMC said the hotel had made appointments with 60 customers, but only met 40 at the expo. At the event last year, the hotel met some customers who promised to bring tourists to Vietnam, but this year there was no potential customers like that.

“I think it is because the tourism market is coping with the general difficulties, but the organizers should have invited guests recommended by hotels or travel firms to have more potential customers,” said the representative.

Quyen of Ben Thanh Tourists shared the same view, saying that the market decline made the order volumes dwindle.

The 2012 ITE in HCMC featured 233 booths of businesses active in fields of travel, hotel and entertainment services from 19 nations and territories as well as 26 local tourism promotion agencies.

Around 200 international tour buyers from 33 markets attended the event to meet with partners. The expo also included activities for tourists.