BUSINESS IN BRIEF 14/5

Local footwear firms urged to develop effective supply

The domestic leather and footwear industry should work to build up its raw material supply chains to ensure sustainable future development.

That was the suggestion from the Ministry of Industry and Trade in a recent statement offering growth advice.

The industry needed to invest more in raw materials as it was too reliant on imported parts, the ministry said, adding this meant the sector was vulnerable to price volatilities in the world market.

The ministry also encouraged footwear producers to restructure and expand retail networks, while paying more attention to advertising their trademarks in the international arena and seeking new export outlets.

The country's footwear exports hit US$2.25 million over the past four months, up 9 per cent year-on-year, according to the ministry's statistics.

Local experts said the industry had enjoyed favourable conditions for boosting exports as most local businesses received steady orders for the second and third quarters of this year.

According to the Viet Nam Leather and Footwear Association (Lefaso), many Vietnamese producers were turning to new markets, including the US and Japan, in addition to their traditional business in the EU.

The sector would aim for export turnover of $8 billion this year, a 10.4 per cent increase on last year, the ministry said, adding that sport shoes and sneakers would remain the industry's key export staples in 2013, besides leather handbags and briefcases.

Masterplan much needed for energy development

Viet Nam should create a master plan for the national energy system, said President of Viet Nam Energy Association (VEA) Tran Viet Ngai at a forum on energy and oil investment and sustainable development held in Ha Noi yesterday.

Currently the electricity, coal, oil and renewable energy industries all have their own development plans, he said, so "prices of energy used for production of other energy have had shortcomings."

As an example, he said, the price of coal sold to thermo-electricity plants was not equal to production cost.

Ngai emphasized that if the sector did not resolve this issue, it would be difficult to draw foreign investors into build-operate-transfer (BOT) projects. "VEA suggests that the Government approve electricity planning after completing primary energy plans for coal, oil and renewable energy. In addition, every energy plan should have an orientation to 10 years," he added.

Doan Van Binh, head of the Institute of Energy Science (IES), said Viet Nam's economic growth had stayed at the high rate of five to eight per cent, resulting in increased energy consumption – particularly for electricity, with annual consumption growing by 14 per cent.

"The high consumption will cause energy shortages in the future, forcing the country to build more power plants," Binh warned.

Viet Nam's hydro-power plants will generate about 80 billion kWh by 2015 while renewable energy is expected to supply less than 10,000MW. Electricity shortages were forecast to reach up to 50 billion kWh by 2030.

Nguyen An Tuan from the Institute of Energy agreed that Viet Nam faced a major challenge when it came to energy security and sustainable development, as demand for primary energies would be 250 million tonnes of oil equivalent (TOE) by 2030, five times higher than 2010.

The country would have to import coal for electricity production by 2015, forcing it to depend on the world energy supply and prices, he said.

To solve the issue, he suggested expanding exploration and exploitation of domestic and foreign energy resources, including developing renewable energy. "It is necessary to develop a competitive energy market and use energy more effectively. In addition, we should make energy production less polluting to protect the environment," he said.

Budget house program not to bear fruit until 2015

Home buyers with low incomes will be able to buy low-cost apartments but may wait two more years due to the time-consuming process of converting commercial condos into budget homes under the social housing program.

There have been 24 commercial housing projects registered for conversion into low-cost ones since the year’s beginning with nearly 25,000 houses, mainly in Hanoi and HCMC, according to initial statistics of the Ministry of Construction.

The general director of a housing developer in HCMC said that he was conducting procedures to change 400 apartments to low-cost ones. However, the conversion progress is barely moving as he is in the process of explaining to authorities the reason for the conversion.

“I think all procedures will not be completed until late this year, and thus the project cannot be constructed until next year,” he said.

He also expected that supporting policies if well implemented would enable low-income earners to buy homes and provide products for those in need. With supporting policies like land use fee, value-added tax and corporate income tax reductions and low interest rates, enterprises can bring down the apartment price so that those with low incomes can reach.

For instance, with fee supports, apartments priced at around VND700 million can have the price lowered to some VND500 million. Besides, if loans at low rates are available, home buyers can buy low-cost houses with only VND100-150 million in hand.

Decree 34/2013/ND-CP issued by the Government on April 22 opens a wider door for poor people and those with low incomes in urban areas to rent and buy houses. However, it is still unknown when the supporting package of VND30 trillion is disbursed as the central bank has not provided any detailed guidance so far.

Le Thanh Company has two projects to be converted into low-cost ones, one of which lies along the East-West Highway in Binh Tan District. However, after a couple of months seeking the approval, the two projects have yet to be approved pending changes to the zoning plan in the locality, said the firm’s director Le Huu Nghia.

Nghia also agreed that the Government’s supporting package is not to save the property market but to make it easier for low-income earners when buying houses. Besides, when disbursed, the package will have a positive impact on other segments and help heat up the market, he added.

Among low-cost housing projects using the State budget, HCMC has had one completed project, which is the apartment project with 176 apartments on To Hien Thanh Street in District 10. To date, there have been 108 customers registering to buy condos of this project.

BIDV to add VND5.19 trillion to its capital

Bank for Investment and Development of Vietnam, or BIDV, has plans to inject over VND5.19 trillion into its charter capital this year by paying stock dividend and selling shares to existing shareholders.

BIDV expects to spur its capital to VND28.2 trillion by the end of the year against the current level of VND23 trillion.

To realize this target, the bank will issue 519.3 million shares in the second quarter, including 113.5 million shares to pay a 2012 dividend at a 4.93-for-100 ratio while 405.8 million shares will be sold to existing shareholders at VND10,000 each.

The plan to spur capital was approved at the bank’s annual general meeting this year, using retained earnings of over VND1.1 trillion and over VND4 trillion earned from offering call options to existing shareholders.

According to BIDV’s board of directors, the plan aims to raise the bank’s operation capability, meet development demands and ensure safety criteria as required.

This capital increase will reduce EPS (earnings per share) of the bank by 10%. The State currently holds a 95.76% stake in BIDV.

In related news, BIDV and TienPhong Bank on Wednesday signed an agreement on comprehensive cooperation to build a systematical cooperative mechanism for both sides in the 2013-2015 period.

Both parties will cooperate in many fields such as capital source, international and domestic payment, cash management, retail banking and gold trading. They will also join hands to launch services for the high-tech industry, IT (information technology) projects, supporting industries and non-life insurance business.

On the other hand, TienPhong Bank, given the support of its strategic shareholder DOJI Gold and Gemstone Group, pledged to share experience and provide services for BIDV in the gold business.

The two sides committed to create favorable conditions for each other in gold trading and related products and services.

Pay TV firms ready to compete with Viettel

Several pay TV service providers are rolling up their sleeves to compete with the new rival Viettel, which has recently been licensed to offer cable TV services.

Vietnam Cable Television (VCTV) on Wednesday introduced its new brand identity VTV Cab to emphasize the importance of Vietnam Television (VTV) to this brand. Besides, VCTV wants to renew its image and convey a message that it will improve its service quality and expand its coverage, aiming to become the leading pay TV operator in Vietnam.

Pham Thai Hung, chairman of VCTV, stated his firm is not afraid of Viettel, although the new rival is financially strong and has the upper hand in cable infrastructure.

In the pay TV playground, content is the decisive factor and when it comes to TV program content, there is no match for VTV, owner of VCTV, he explained. As for cable infrastructure, VCTV can always call for investment from its partners, he told the Daily.

In addition to the new brand identity, VCTV launched the entertainment channel VTVcab 1, broadcasting several dramas, reality shows and music and fashion programs. VTVcab 1 is the only channel to broadcast the big events of Vietnamese showbiz, such as Dep Fashion Show, Dep Fashion Runway and some talk shows.

Earlier, in late March, VCTV formed partnership with HCMC Cable Television to share infrastructure and content in order to reduce costs.

K+, a joint venture between VTV and France’s Canal Plus Group, is also making greater efforts to attract customers. The satellite TV operator has sharply cut the price of a set of high-definition devices, including a receiver/decoder, a satellite dish and a scratch card, from VND3.55 million to VND2 million.

Earlier, K+ has halved the price of devices for the Access+ package (consisting of 58 channels with a monthly charge of VND65,000) from VND1.5 million to VND750,000.

As of end-2012, there had been some 4.5 million pay TV subscribers, including 2.5 million cable TV subscribers. VCTV holds a large share in the cable TV market, according to the Ministry of Information and Communication.

“VCTV currently has more than one million cable TV subscribers and has covered 43 cities and provinces nationwide,” said Hung.

Smuggled seafood from China kills domestic market

Do Thanh Lam, deputy head of the Market Management Board under the Ministry of Industry and Trade, said nearly 20 tons of smuggled sea food from China had been seized from April 26 to May 1.

Police and market managers in Hanoi seized six trucks transporting tens of thousands of Chinese sturgeons, snakehead fish and frogs.

Sturgeons breed in cold weather in provinces like Lam Dong, Lao Cai, Son La, and Hoa Binh and sell for VND180,000 (US$8.64) per kilogram while smuggled sturgeon fetches VND100,000 ($4.8) in wholesale markets, and at border crossings it is VND50,000 for live fish and VND30,000 for dead fish.

This abundant and unchecked supply is slowly killing the domestic market which cannot compete with such cheap prices.

At a conference on the sea food sector held recently, participants said that enterprises were now smuggling sturgeon by air. Lieutenant Colonel Pham Giang Son, chief of police in Hanoi, said they are keeping a close watch on 10 rings that are suspected of smuggling the fish into the country.

The public is concerned about Chinese sea food which goes unchecked and doubts are raised as to high levels of banned substances in most produce selling openly in the domestic market.

Vietnam opens doors to Uruguay beef imports

Vietnam has opened its market to beef and lamb products imported from 12 processing plants in Uruguay, according to newspapers in the South American country.

Uruguayan representatives said that their country has received requests from Vietnam for more information about other processors and it hopes more of them will also be allowed to export beef to Vietnam.

The Vice President of the Uruguay National Meat Institute (INAC), Fernando Perez Abella, noted that Vietnam is a potential market of more than 90 million consumers. With annual high economic growth, Vietnam has a high demand for meat, including lamb but the domestic livestock industry has yet to meet.

INAC President, Alfredo Fratti, accompanied Vice President of Uruguay, Danilo Astori, to visit Vietnam last year to promote exporting beef, which is one of the country’s most important sources of foreign currency revenues.

Uruguay is one of the world’s largest beef exporters. Last year, it shipped abroad 405,000 tonnes of meat, mostly beef, earning US$1.58 billion. However, only US$2 million worth of beef exports came from Vietnam.

Thailand to invest in US$27bln Vietnam oil project

The Prime Minister has given the green light to a US$27-billion oil refinery project to be invested by the Petroleum Authority of Thailand (PTT) in Binh Dinh province, announced a provincial leader.

Ho Quoc Dung, Deputy Chairman of the Binh Dinh provincial People’s Committee, made the announcement at an online forum organised by the Government portal on May 12.

Dung revealed that the provincial administration and the Thai side signed a memorandum of understanding (MoU) in April 2013 on implementing the project, the largest of its kind, in Binh Dinh’s Nhon Hoi Economic Zone (EZ) after three years of negotiations.

He removed public worries about the feasibility of this mammoth project, saying the local administration has already worked and appraised the Thai group’s financial capacity.

He said PTT is a large financial group with a total asset of more than US$150 billion, ranking among the world’s top 100 financial giants. It records annual revenue of over US$80 billion and earns nearly US$3.5 billion in profit.

The Thai group has decided to invest in Nhon Hoi EZ as the zone has good infrastructure, a low-cost labour force and the lowest land rental in the region. It also has deep a water sea port located along the national north-south trade route, as well as the route from Vietnam to overseas markets.

Head of the Ministry of Planning and Investment (MPI) Economic Zones Management Department Vu Dai Thang said it is a very large project given the current difficult economic circumstance and the MPI has regularly made appraisal reports to evaluate the feasibility of the project.

Construction of the project is expected to begin in 2016 and to churn out commercial products in mid-2020. The refinery is designed to have an annual capacity of 30 million tonnes.

Crude oil will be imported from the Middle East, Africa, and South America to feed the plant which is to produce more than 20 types of products for export.

According to the agreement, PTT will contribute 50-60 percent of the project’s total investment and the remaining sum will be mobilised from both domestic and international investors.

Although the Vietnam Oil and Gas Group claims that the Nhon Hoi project may cause an imbalance in supply and demand of oil, Deputy Minister of Industry and Trade Ho Thi Kim Thoa has voiced her ministry’s support for the project.

Binh Dinh is currently emerging as an attractive destination for investors. Last year, the province ranked fourth in the investment capacity index, climbing up 34 notches from the previous year.

Binh Duong holds dialogue with Japanese businesses

The Customs Department of Binh Duong province and the Vietnam Chamber of Commerce and Industry (VCCI) have co-chaired a dialogue with nearly 100 Japanese businesses operating in the locality.

At the May 10 event, the businesses examined issues relating to customs procedures, tariff policies and certificates of origin.

A Japanese business representative said more Japanese businesses will invest in Binh Duong since its infrastructure satisfies their needs.

Japan is one of the biggest investor in the province with 170 valid projects worth more than US$3.2 billion.

Many Japanese businesses operate effectively, contributing to local economic development and the improvement of employees’ lives.

Vietnam, Laos intensify securities cooperation

Representatives of the Hanoi and HCM City Stock Exchanges and the Lao Securities Exchange have signed a Memorandum of Understanding (MoU) to further strengthen their future cooperation.

The signing ceremony in Vientiane on May 10 was witnessed by Secretary General of the Lao Securities and Exchange Commission Vatthana Dalaloi, Vietnamese Deputy Minister of Finance Tran Xuan Ha, and the Envoy at the Vietnamese Embassy in Laos Luong Quoc Huy.

The document marks a crucial advance in the two nations’ financial services and securities in particular.

Under the MoU, the three exchanges will share information, transaction experience, human resource training and information technology.

The MoU also enables both nations to seize potential opportunities in Southeast Asian countries as well as tightening their traditional friendship.

Second Mekong Resources Forum opens

The second Mekong Resources Forum on investment cooperation and the sustainable development of the Greater Mekong Sub-Region (GMS) - was held in the northern province of Vinh Phuc on May 10.

Vu Van Chung, representing the Ministry of Planning and Investment’s Foreign Investment Department, said Vietnam attaches great importance to sustainable development. The Vietnamese government has asked enterprises investing in GMS nations to obey applicable laws and regulations, maintain a harmony between national economic goals, improve local people’s living conditions, reduce poverty, and honour the precepts of sustainable development.

People and Nature Reconciliation (PanNature) – a non-governmental organization works on environmental policies, resource governance, nature conservation and environmental protection, warns that because of its location on the lower stretches of the Mekong River, Vietnam must grapple with the cumulative impacts of major hydropower, irrigation, flood management, tourism, and aquaculture projects undertaken further upstream.   

Forum delegates briefed each other on the environmental and social repercussions of investment activities including Vietnam’s participation in hydropower development in the Mekong, Sesan, Srepok, and Sekong River basins.

The event was co-organised by PanNature, the Foreign Invested Enterprises' Association (VAFIE), the Vietnam-Laos-Cambodia Association for Economic Co-operation and Development (VILACAED), Forest Trends, and Foreign Investment Magazine.

High-quality fibre plant begins operation

Kyung Bang Vietnam Co. Ltd’s high-quality cotton fibre plant officially entered operation on May 10 in the southern province of Binh Duong.

With investment totalling US$ 40 million for the first phase, and covering an area of 163,500sq.m, the plant has the capacity to produce 6,600 tonnes of fibre per year and employs around 300 workers.

The high-quality cotton materials used by the plant are imported from the US, Australia, and Brazil.

Kyung Bang General Director Kim Joon said that the plant plans on extending the scale of production during its second and third phase, helped along by advanced technology investment with a registered capital of US$160 million.

The plant is expected to become the largest high-quality fibre plant in both Asia and the world.

Energy plans deemed impractical

The master plans for coal, power and oil are impractical and have been developed in an illogical order, said Tran Viet Ngai, chairman of the Vietnam Energy Association (VEA).

He was speaking at a forum themed “Energy and oil & gas: investment and sustainable development” held by VEA and the Ministry of Industry and Trade in Hanoi on Thursday.

Many power projects have failed to stick to the schedules drawn up in Power Master Plan VII, according to VEA.

So far, only Son La Hydropower Plant has run ahead of schedule, and three other projects have been on schedule, namely Dong Nai 4 Hydropower Plant, Mao Khe Thermal Power Plant and Quang Ninh II Thermal Power Plant.

Many other major projects are obviously behind schedule, including Vung Ang 1 Thermal Power Plant, An Khanh 1 Thermal Power Plant and Song Tranh Hydropower Plant.

Dozens of major projects run by Vietnam Electricity Group (EVN), Vietnam Oil and Gas Group (PVN), Vietnam National Coal and Mineral Industries Group (Vinacomin) and some BOT and IPP investors have shown signs of slow progress. They certainly could not start operations between now and 2015 as scheduled without drastic measures, said VEA.

The total power capacity of the nation is 27,000 MW, with an annual output of 100 billion kWh. Under the master plan, the total power output will reach 330 billion kWh in 2020 and 695-834 billion kWh in 2030, which is far from simple.

“Therefore, I deem Power Master Plan VII impractical,” said Ngai. The impracticality lies in the inconsistent, unreliable and unauthenticated figures and documents serving the master plan, the unsound investment profile and the lack of coordination among relevant agencies, he analyzed.

It is illogical that the power master plan was made first, and then came the plans for coal and gas, he said. For a viable power plan, coal and oil & gas should be planned first, he stated.

In 2011, Power Master Plan VII was introduced. Then, in 2012, the plan for the coal industry was drawn up.

As for oil & gas, there is only a master plan for gas until 2015 which was approved in 2011.

The coal industry is struggling since the open-cast mines in use are almost depleted and new mines will take years to have products. Therefore, the coal-fired thermal power plants under Power Master Plan VII are facing coal undersupply.

As per the plan, coal-fired thermal power plants will need 67.3 million tons of coal in 2020 and 171 million tons in 2030. It is forecast that from 2014 onwards, power generators will have to import coal.

Similarly, gas-fired power plants are having trouble with the gas pipeline Block B-O Mon.

Block B-O Mon was scheduled to start service in 2014. However, due to some problems in negotiations with foreign contractors on gas prices, not until 2016 will the pipeline be put into use.

This will affect the development of O Mon Power Center. In addition, Block B-O Mon cannot timely join Block PM3-Ca Mau to form the Mekong Delta gas network connected to the southeastern network to reduce gas production costs.

FPT IS nets vital Laos deal

FPT Information System Company (FPT IS) on Thursday signed a contract with Laos Telecommunications Company to carry out a network operation system project worth over US$1 million.

According to Duong Dung Trieu, general director of FPT IS, to win this contract which will be implemented in five months, the firm defeated two leading telecom equipment suppliers of China and Thailand.

The solution studied and developed by FPT IS helps the Lao partner monitor its entire telecom network and consolidate the equipment management of all suppliers with basic and advanced features.

Each network system of an equipment supplier has different parameters and data, and the solution of FPT IS enables the user to integrate data from many different systems to make them a concentrated management system and have an overview of the entire network.

Besides, the solution can be expanded to manage 3G and 4G devices in the future.

In addition to the above solution, FPT IS has another of its solutions of charge calculation and customer care used by four telecom network suppliers in Cambodia, Laos and Myanmar.

Overseas markets have brought in over US$10 million for FPT IS in the telecom software sector.

Wining this contract is a huge step for FPT IS in penetrating the Lao market which is full of potential as well as opening up an opportunity for building and implementing the network supervision system for other regional telecom companies.

Auto market continues to rise

Thanks to the Government’s registration fee reduction policy plus efforts of auto manufacturers in sales policies, the auto market has continuously grown since the Tet holiday, with a slight rise compared to previous months.

Toyota Vietnam, the leading auto assembling firm in Vietnam, said the firm sold over 2,770 cars last month, rising by 350 units from March and by up to 1,136 units year-on-year.

Similarly, Ford Vietnam’s report showed that it sold 686 cars last month, up 188 from the previous month and 216% year-on-year. Isuzu Vietnam last month also had a better sales result with 182 cars sold, doubling that of last year’s same period and increasing by nearly 60 units compared to March. Besides, the number of cars sold by Vina Mazda last month inched up by 20 to 225.

According to other auto manufacturers, although the number of cars sold last month was not much higher than that of March but increased strongly year-on-year. Honda Vietnam reported a year-on-year rise of 30 cars among 168 units sold last month while Visuco (Suzuki) sold over 390 cars, up over 150.

The overall number of cars sold last month was 8,000 units, or 360 and 2,000 units higher than the previous month and last year’s same period respectively.

According to manufacturers, the auto market’s growth achieved last month was mainly due to buyers in the northern regions, especially Hanoi. It is because Hanoi accounts for a large auto consumption volume and has had the registration fee lowered from 20% to 15% since early last month.

The reduction in registration fee is also applicable for other provinces at the same time. However, the fees in provinces have already been lower than the cap rate of 15%, and thus there have not been any more fee adjustments yet.

To achieve such results, enterprises have also provided supports for customers such as direct discounts and free accessories.

With the sale increase, the Vietnam Automobile Manufacturers Association (VAMA) expects the car consumption to reach some 100,000 units this year, 8% higher than last year.

According to the General Statistics Office, the number of imported cars rose again in March and April with around 3,000 units each month, taking the total number of imported completely built-up cars in the year’s first four months to 10,000 units worth US$187 million.

BIDV to arrange loans for CIENCO 4

Bank for Investment and Development of Vietnam (BIDV) and Civil Engineering Construction Corporation No. 4 (CIENCO 4) on Wednesday cut a deal on business cooperation in the 2013-2018 period.

BIDV will arrange loans for CIENCO 4 to the tune of VND11.3 trillion to fund business and production projects in the next five years.

The bank over the past three years has approved many large projects undertaken by CIENCO 4, such as Saigon-Trung Luong Expressway, Cau Gie-Ninh Binh Expressway, Phung and Vinh Tan bridges and Noi Bai International Airport- Nhat Tan Bridge connecting road.

The bank has also financed other projects of CIENCO 4 such as Yen Lenh Bridge in Hung Yen Province, Da Khai hydropower plant in Lam Dong Province. Recently, they have cooperated in a number of components of a project for upgrading National Highway No. 1 from Hanoi to Can Tho City.

Local rice prices stay low despite scant competition

Although Vietnam is expected not to see strong competition from India and Thailand in the remaining months of 2013, the nation’s rice export prices have remained low for a long time.

In the first four months of this year, Vietnam’s FOB (free-on-board) rice export prices averaged out at less than US$438 per ton, the lowest in the first-four-month period over the past three years.

Since March, 5% broken rice prices have rarely exceeded US$390 per ton. On Tuesday, the product was offered at US$375-385 per ton, US$75 lower than that of India.

Speaking at a conference in HCMC last week, Truong Thanh Phong, chairman of the Vietnam Food Association (VFA), said that supply has exceeded demand though many rice exporting countries are keeping back their huge stockpiles.

The problem has forced many enterprises to lower prices or even sell at a loss to liquidate stockpiles. However, experts at the meeting said that the rice market would not see tough competition.

Last year, India became the biggest rice exporter in the world with 10.3 million tons exported thanks to bumper crop and a big rice storage accumulated in three previous years in a row. However, the nation is unlikely to export the same or higher volume in 2013 as old stockpile will run dry while it has to store up to serve domestic demands.

Expert Nguyen Dinh Bich said that India may adopt a law on national food security this year, aiming to give free food or food price subsidy to its people.

If the law is passed, a large volume of food, mainly cereal, rice and wheat, must be stocked up to distribute in the country. Therefore, this will hinder India from launching a huge rice volume onto the global market like in 2012, Bich said.

Thailand is offering high-quality long-grain rice at US$535-545 per ton, US$160 higher than Vietnam’s 5% broken rice. However, Thai traders will incur losses because given the nation’s farmer subsidy program, export prices must be US$800-850 a ton.

Therefore, despite a stockpile of 20 million tons of rice, Thai exporters may not reduce rice prices immediately to offload the stockpile as they have to calculate impacts of the government’s subsidy policies.

Loans sought for coffee, pepper farmers

Coffee and pepper farmers should be given loans to stockpile their products instead of selling them on the cheap, said the Vietnam Coffee and Cocoa Association (Vicofa) and the Vietnam Pepper Association (VPA).

The Ministry of Agriculture and Rural Development has asked the Department of Processing and Trade for Agro-Forestry-Fisheries Products and Salt Production to consider such a proposal.

The department is looking into the current status of coffee and pepper storage before giving its official reply to the proposal made by the two associations, said Doan Xuan Hoa, deputy head of the department.

This is not the first time such a proposal has been put forward. Previously, when coffee prices went down, Vicofa sought permission for temporary storage of 300,000 tons of coffee in order to push up prices.

Similarly, in 2011, the Vietnam Sugarcane and Sugar Association (VSSA) suggested the Government offer interest rate support for temporary stockpiling 200,000 tons of sugar over six months.

As for VPA, this is the first time the association has made such a proposal.

Pepper farmers experienced a poor crop this year and harvested only 88,000-99,000 tons, a drop of 20%. If farmers continue to sell their products cheaply, they would suffer losses when pepper prices go up later in the year.

“The proposal for preferential loans for coffee and pepper retention is just the first step. Whether it is approved or rejected depends on the Ministry of Agriculture and Rural Development,” said Hoa.

In the first four months, Vietnam exported 56,000 tons of pepper worth US$370 million, up 15% in volume and 17% in value over the same period last year. The average pepper export price in the first quarter was slightly above US$6,620 per ton, down 3.4% year-on-year.

Meanwhile, around 608,000 tons of coffee was exported in the first four months, bringing in more than US$1.3 billion, down 13.4% in volume and 11% in value. The average coffee export price in the first quarter was US$2,160 per ton, up 4.4% year-on-year, according to the agriculture ministry.

JICA plans increasing ODA for Vietnam’s agriculture

Vietnam hopes to receive more support from the Japanese Government to develop its agricultural sector in a modern direction, ensuring food security and adapting to climate change, a Ministry of Agriculture and Rural Development (MARD) senior official has said.

MARD Deputy Minister Nguyen Thi Xuan Thu made the statement during a seminar to review agricultural cooperation between Vietnam and Japan, which was jointly held by MARD and Japan International Cooperation Agency (JICA) in Hanoi on May 5.

The Deputy Minister added that Vietnam will send its people to Japan as soon as possible to work with JICA on areas that Vietnam needs support.

Thu noted that Japan has funded more than 30 projects supporting Vietnam’s agricultural sector while offering the sector non-refundable and emergency aid of about 150 million USD.

Besides, Japan has supported a number of irrigation and forestry projects with loans totalling nearly 500 million USD, contributing to improving the sector’s infrastructure system and developing agricultural and rural areas in a sustainable way, she said.

Tsuno Motonori, JICA Chief Representative in Vietnam, affirmed that in the future, Japan ’s assistance will focus on improving Vietnam’s international competitiveness through investment projects in infrastructure, narrowing the development gap between urban and rural areas and enhancing management capacity for public servants.

He said agricultural and rural development is a key sector that will receive more Japanese ODA in the future.

JICA experts said JICA cooperation mechanisms are mainly through non-refundable aid, technology and loan cooperation.

Together with cooperation in forestry and climate change adaptation and natural disaster prevention, cooperation programmes between the two countries are expected to improve production technologies for farmers, upgrade agricultural infrastructure and promote dialogue between MARD and international donors, therefore increasing people’s incomes in rural areas.

In order to utilise cooperation efficiency between the two sides, JICA suggested that Vietnam strengthens coordination among relevant ministries and agencies from central to local levels, while improving its mechanisms and policies in the field.

The same day, MARD Minister Cao Duc Phat granted a MARD insignia to Tsuno Motonori in recognition of his contributions to agricultural and rural development in Vietnam.

Shopping frauds rampant on internet

Fraudulent online stores are flooding the internet, scamming people with various kinds of tricks.

In early May, police in HCM City arrested a group of five men for an online shopping scam. The scamming business started when one of the men picked up an ID card and used it to open bank accounts.

They opened an online shop and asked only for deposit money before transferring the goods. However, after they received the deposit, the group immediately destroyed the phone card and share the money. Up until they were arrested, they scammed total VND430 million (USD20,000) from the shoppers.

However, this kind of scam is still very common and threatening online customers' confidence.

D.H.N, a local in HCM City was even tricked all of the money. He said he found an agent that sold discount steel so he gave VND40 million for the seller and asked one of his relatives to come to the storage yard to collect the remaining steel back.

After checking the goods, his relative went home first but both the seller and the goods disappeared on the way. They were shocked when found out that it was only a fake company.

Meanwhile, Nguyen Ngoc Suong and Nguyen Thi Huong also earned a lot of money by tricking people who like discount goods.

When they opened an online shop, they advertised that their goods were brought back from flight attendants and relatives so they can sell iPhone 4 or iPhone 5, along with many other kinds of smart phones at only VND4.5-5 million each.

Hundreds of customers took the bait and gave them 30% deposit, many even agreed to pay the last 70% when Huong and Suong said they need it for documenting.

After successfully scammed the buyers, they would send them a fake iPhone or used other reasons to postpone the payment date.

Local firms in distress over draft of pollution penalties

The maximum penalty of VND2 billion imposed on environmental violations to be effective from July 1 is too high, representatives of industrial parks in HCMC told a meeting in HCMC on Wednesday.

As per the draft decree on handling environment violations that the ministries of finance and natural resources and environment now are seeking public comments, the maximum fines are VND1 billion on individual violators and VND2 billion on organizations.

The penalties are much higher than the VND500 million in prevailing rules. The draft decree will take effect from July 1 if approved by the Government to replace Decree 117/2009/ND-CP issued by the Government in 2009.

At the meeting, a representative of Linh Trung Export Processing Zone Infrastructure Investment Co. said he was stunned at the sky-high fines set by the draft and that many would not have enough money to pay for the fines.

Dang Ngoc Thanh from Tay Bac Cu Chi Industrial Park Infrastructure Investment Co. said the draft penalties four times higher than the prevailing levels are too heavy.

He believed a VND2-billion production facility if found violating rules would certainly have to sell all assets to have funds for paying the fine. Relevant authorities should charge lower fines to help reduce financial constraints for the involved companies, he insisted.

Similarly, representatives of Tan Tao, Vinh Loc, Hiep Phuoc and Tan Binh industrial parks and other producers in the meeting complained that the fine set by the current Decree 117 is already too high.

The HCMC Department of Natural Resources and Environment deemed it necessary to take into account the present economic difficulties when imposing the fines. It said raising the maximum penalty to VND2 billion is too high and suggested a two-fold increase only.

HCM City getting tough on overloaded trucks

HCMC authorities plan to install electronic induction scales in addition to using mobile scales to cope with the current deterioration of local bridges and roads caused by overloaded trucks.

Bui Xuan Cuong, deputy director of the city’s Department of Transport, said his agency’s inspectors had been using mobile scales but they are still unable to stop overloaded trucks. The department will opt for electronic induction scales around local ports in the near future.

Using electronic induction scales will help inspect more vehicles as the equipment is installed on the road, Cuong said.

Controlling overloaded vehicles is hard at present. According to Le Hong Viet, deputy chief inspector of the transport department, inspections now are not effective. For instance, he said, law enforcement officers are forced to stop vehicles and use mobile scales to check their weight.

However, stopping vehicles is only done on a number of roads with light traffic. On roads with heavy traffic like Hanoi Highway, doing such a thing is impossible.

One more difficulty is that as for container trucks carrying sealed cargo, officers cannot take off excessive cargo but to fine and let them go given the lack of handling equipment and storage places.

At a meeting on traffic safety in HCMC on Tuesday, the city’s vice chairman Nguyen Huu Tin said it is better to weigh trucks at the ports instead of checking their weight on the road as this will lead to traffic snarl.

“Using electronic induction scales is a good solution. If local authorities fail to handle overloaded trucks strictly, roads and bridges in the city will weaken as a result,” Tin said.

At the end of last month, inspectors of the transport department and road-railway traffic police officers when checking trucks on some routes like Dong Van Cong and Nguyen Thi Dinh detected several overloaded trucks which were transporting up to 35 tons compared to the allowable level of 11 tons only.

Multiple roads which lead to Cat Lai Port such as Mai Chi Tho, Dong Van Cong and Nguyen Thi Dinh are sinking severely due partly to the overwhelming presence of overloaded trucks.

$4.3bn tourism project still lost in the woods

Vietnam’s largest tourism project, in terms of capital, still encounters site clearance deadlock.

Nguyen Chi Hien, Phu Yen Provincial Department of Planning and Investment director, said site clearance of the $4.3 billion Phu Yen High Grade Tourism Complex project in central Phu Yen province had been delayed because it encroached on a Japan-funded protective forest, and the government approval was needed for clearing that part.

“We have been discussing with the government and the Japanese donor on the issue,” Hien said. However, as “a conclusion has not yet been reached”, he remains uncertain when the provincial authorities could hand over the entire 565 hectares to the Brunei-headquartered New City Properties Development Company, the owner of the project.

“We are trying to address this issue this year, but it could take a longer time,” said Hien.

The New City project is developed along a sandy, wild beach in the Bai Xep area, Tuy Hoa city and Tuy Hoa An district. It will feature luxury resorts, 4,300 five-star and 8,900 four-star hotel rooms, 160 high-grade villas, a 36-hole golf course and other service and recreational facilities, including electronic gaming.

The project was initially planned to start operation in 2013 and be fully operational by 2017. However, it has been stalled since 2008 when the investor received an investment certificate due to site clearance challenges. The only work appears to have been done is a road connecting the project site with National Road 1A built in 2010.

“We have cleared more than 100ha of the project site [80 per cent of the area that needs to be cleared], but we have not yet handed over land to the investor,” said Hien, explaining that New City wanted to receive the entire cleared site at the same time.

Despite the slow pace of site clearance, Hien said the developer “is still determined” to pursue the project. “They [New City] are working closely with us to push the project ahead and they enthusiastically participate in charity activities in the province,” he added.

Tempers raised at Nam Cuong project

More than 60 customers of the Duong Noi residential complex in Hanoi have staged a demonstration to seek direct talks with Nam Cuong, the project developer.

The customers complained that they had been forced to receive uncompleted apartments.

Pham Ngoc Tien, a home buyer in the project, said he and many other customers were upset at the developers’ treatment and required the developer to have direct talk to answer all of outstanding issues.

“Many customers have sent petition to the group’s office, however not any answers were received,” Tien said.

Tien added that Nam Cuong has frequently ignored customers’ queries and have not satisfied documented promises to customers.

"Like many previous times, we came here to require Nam Cuong to respect customers’ right. We can not receive our home in an unfinished status. The deadline of handing over apartment was passed for three months but we have not received any notice from the developer,” Tien said.

Like Tien, many other customers were upset because majority of them had paid 70 per cent of the total value of their apartments since 2010. Some others even finished their payment and until now – three months after deadline, the construction has not finished yet.

Nguyen Thi Minh Nguyet, another apartment buyer, did not hide her displeasure. "It is ridiculous that the site is still messy and the developer forces us to receive our apartments,” Nguyet said.

Moreover, she added that the buyers had to pay the interest even if they paid money one day late, but developer had three months late without any penalties.

Other customers express concern regarding the on the space of their apartment, saying the finished apartment was not the same square meters stated in the purchasing contract.

Nguyen Tien Lam, an owner of an apartment in the building CT7E, complained that elevators have not operated, workers are still working, there is just a little fresh water supplied and sanitation equipment is fully installed—but the developer still required customers to receive the unit.

Many customers complained that they had work off and spare time for asking their rights in a hope that the developer could offer a satisfactory answer.

The developer forced apartment buyers to receive units and pay extra money right at the time that the construction is not finished.

“We are in danger that we receive our apartment but still can not use it, and have to find somewhere as to lease,” said another buyer.

Nguyen Thanh Phuong, a buyer in CT7E, confirmed that Nam Cuong required him to receive his unit but the door was not installed and the wall was not fully covered. He said the unit lacked a gas system, fire protection and the elevators could not operate yet.

After three hours centred in the front of Nam Cuong Group office, two sale reprentatives from the developer were sent to talk with buyers. However those representatives were rejected by the buyers, based on the fact that they used not to keep their promises before and buyers do not believe them more.

Under pressure from buyers, in the afternoon of the same day, the Nam Cuong Group said it has set a date of May 20 for direct dialogue with the buyers.

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

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