Exporters predict tra fish shortage

HCM CITY — Export of tra fish is expected to hit a roadblock next year due to a combination of internal and external factors, industry insiders told a meeting held in HCM City on Tuesday.

They forecast exports to fall from around 645,000 tonnes this year to 360,000 tonnes.

Duong Ngoc Minh, head of the Viet Nam Association of Seafood Exporters and Producers (VASEP)'s Freshwater Fish Commission, said "production will see a nosedive because of a severe raw material shortage that could last until September." But he did not explain the cause of the shortage.

Besides, prices are likely to skyrocket, putting exporters at a disadvantage in oversea markets, he said, explaining input costs had risen sharply. Manioc prices have doubled from VND3,000 per kilogramme while rice bran prices had gone up from VND3,500 to VND5,500.

Loan interest rates have also gone up considerably in the last few weeks.

Minh said: "Banks have turned their backs on fish farmers and processors. Whether the development of tra fish will be sustainable largely depends on their support."

Deputy Minister of Industry and Trade Nguyen Thanh Bien said credit would remain hard for fish farmers and traders to access.

"The Government wants to ensure economic stability and fight inflation, and therefore interest rates will stay high at least in the first few months of next year," he said.

To Thi Tuong Lan, VASEP's deputy general secretary, said another challenge was that many countries in the neighbourhood, like Thailand, Malaysia, Philippines, and Indonesia, had large tra farming programmes.

Besides, some import markets had erected technical barriers to control tra fish imports, she said.

Nevertheless tra would remain the key seafood export item, accounting for 28.2 per cent of exports, she said.

There are 290 tra exporters in the country who sell their products in 163 markets.

Deputy minister Bien said the Freshwater Fish Commission should co-ordinate with VASEP and the Ministry of Agriculture and Rural Development to study and zone areas for catfish farming.

Businesses should focus on developing and popularising trademarks in foreign countries through promotion programmes.

They should establish close links with farmers to ensure supply of fish for processing.

Nguyen Huu Dung, deputy chairman of VASEP, said the businesses also needed to get international quality certification such as GlobalGAP to sustainably develop the tra industry.

There are now 20 businesses that have obtained GlobalGAP.

Source: vnagency.com.vn

Timber products earn $3.3b in exports

HA NOI — The wood products industry earned US$3.3 billion from exports this year, $300 million more than the target set for the year, according to the Viet Nam Timber and Forestry Products' Associations.

The association's vice chairman, Nguyen Ton Quyen, attributed the result to the rebound of traditional import markets, such the EU, US and Japan, following slumps over the past two years, as well as rising prices and a Government incentive policy that lifted the 10-per-cent tariff imposed on imported wood materials.

Of the $4 billion in export turnover predicted for the industry next year, $1.3-1.4 billion would be spent on importing between 4-5 million tonnes of raw materials.

HCM City Handicraft and Wood Industry Association (HAWA) vice chairman Tran Quoc Manh, speaking on the sidelines of a meeting celebrating the 20th anniversary of the association's founding in HCM City on Tuesday, said inflation would continue to increase many input costs for the industry next year.

Manh said that with increased demand for higher quality and environmentally friendly goods, local wood products makers should improve their production systems to meet the requirements of foreign customers.

He advised companies to learn about technical barriers set by importing countries and understand foreign laws and regulations to minimise potential risks imposed by those barriers.

"The economic recovery is still underway, but with increased demand from the US in the fourth quarter, I hope that orders will increase significantly next year," Manh said.

Ongoing efforts of domestic enterprises in seeking new export opportunities in India, Eastern Europe and the Middle East also contributed to the increase in exports, Quyen said, adding that penetration into such new markets would bode well for the industry in the future.

Quyen listed stricter provisions for timber products in importing countries, raw material shortages and inadequate capital as major challenges facing the industry in the coming year. Compliance with the Lacey Act, the US law requiring wood exporters to prove the origin of timber and related materials, would increase production costs.

Difficulties in accessing credit were also problematic for wood products exporters, he said.

HAWA chairman Nguyen Chien Thang said reliance on imported raw materials and a labour shortage would likely cause difficulties for manufacturers next year.

Local wood processors needed to develop their own sources of raw materials, create more added-value in their products, and use more advanced technology to reduce the dependence on manual labour, he said.

To mark its 20th anniversary, HAWA was awarded the Certificate of Merit from the Prime Minister for its contribution to the socio-economic development.

"HAWA has greatly contributed to the development of the handicrafts and wood products sector not only in HCM City but elsewhere," said Deputy Minister of Industry and Trade Nguyen Thanh Bien.

The association has conducted professional training courses, trade promotions and seminars to help members strengthen competitiveness and expand markets, and the association and its members have made significant contributions to the sustainable development of the domestic wood products industry, said Thang, noting that the number of members had increased from 27 when it was established in 1990 to 350.

Viet Nam now has over 2,500 wood processing businesses, nearly three times the number in 2000 and eight times that of 1990. Private enterprises represent 90 per cent of the total. Altogether, the firms manufacture 3,000 different timber products sold in 120 foreign markets.

Source: vnagency.com.vn

State Bank goes after counterfeit currency

HA NOI — The State Bank of Viet Nam (SBV) has approved a project to prevent the circulation of counterfeit money.

The VND10 billion (US$500,000) two-phase project will also help raise awareness among the public about security features on bank notes and how to identify counterfeit money.

In the first phase from 2010 to 2012, the project will focus on training banking staff, producing documents on the issue and conducting surveys.

In the second phase from 2013 to 2015, the project will provide further training to banking staff as well as treasury accountants and cashiers.

The project will also be broadcast through the mass media, with instructions on what to do if someone passes fake money and the methods counterfeit money dealers use to help prevent circulation in banks and the market. 

Source: vnagency.com.vn

High speed Phu Quoc boat service opens

HA NOI — A high-speed boat service has officially opened between Rach Gia and Phu Quoc at a price of VND260,000 (US$12) per passenger.

The Song Hong (Red River) Co Ltd invested VND14 billion ($667,000) in the boat using modern technology from New Zealand and can travel at a speed of 28 nautical miles per hour. It can carry about 100 passengers.

Ha Noi expands seafood cultivation

HA NOI — The area used for seafood cultivation in the capital's suburbs has increased by 5 per cent over the same period last year, bringing the total area to 20,500ha. The area is expected to produce 56,600 tonnes of seafood this year, a year-on-year increase of 37 per cent.

Authorities have provided preferential policies to create favourable conditions for farmers to expand production.

Quang Ngai Sugar Co raises capacity

QUANG NGAI — Quang Ngai Sugar Co has doubled its processing capacity to 2,000 tonnes of sugar cane per day and purchased all available raw material in the central province.

The plant is expected to purchase and process over 400,000 tonnes of sugar cane and produce about 40,000 tonnes of refined sugar next year.

Salt output increases 50 per cent

HA NOI — Salt harvests totalled 1.2 million tonnes this year, an increase of 50 per cent on last year. Industrial salt output is expected to reach 240,000 tonnes and handmade salt output 960,000 tonnes. Authorities purchased stock from farmers when salt prices plummeted recently.

Vinacas to set floor price for cashew

HA NOI — The Viet Nam Cashew Association (Vinacas) wants to set a floor price for cashew products to protect cashew enterprises, according to vice chairman Nguyen Duc Thanh. The setting of a floor price will help stabilise prices for cashew products domestically and prevent enterprises from unsuitable price reductions.

Ben Thanh Services to list 3 million shares

HA NOI – Ben Thanh Services Co plans to list 3 million shares on the Ha Noi Stock Exchange on January 5 under the code of BSC. The company, operating primarily in food and tourism services and real estate, has charter capital of VND30 billion (US$1.4 million), of which Ben Thanh Corporation presently holds 45 per cent and Nam Long Joint Stock Co 21.54 per cent.

Sacomreal to issue convertible bonds worth $19m

HCM CITY – Sai Gon Thuong Tin Real Estate Co (SCR) will issue VND400 billion (US$19 million) worth of corporate bonds to finance the Phu My housing complex in HCM City. The bonds, with a face value of VND1 billion ($47,619), will have fixed terms of 3.5 years and will be offered to credit institutions and investment funds.SCR has also announced it would invest an additional VND44 billion ($2.1 million) in its subsidiary Sacomreal Trading Service Co, raising its total capital contribution to VND50 billion ($2.4 million).

Deutsche Bank ups stakes in pharmaceuticals, bakery

HCM CITY – Deutsche Bank AG London has became the largest shareholder in Vien Dong Pharmaceutical Co (DVD) after increasing its stake in DVD from 4.96 per cent to over 5 per cent. Deutsche Bank also became the leading shareholder in HCM City bourse-listed Kinh Do Corp (KDC) after acquiring 29,690 additional KDC shares, raising its stake in the commercial bakery company to over 5 per cent.

Phu My Fertilisers posts $88m profit, an increase of 21%

HCM CITY – Phu My Fertilisers (DPM) will post a profit of VND1.85 trillion (US$88.1 million) for the year, an increase of 21.7 per cent over the previous year and surpassing targets for this year. This year, DPM produced about 800,000 tonnes of urea, an increase of 5.9 per cent over the previous year and 8 per cent over targets. It also imported 150,000 tonnes of fertiliser in order to meet domestic demand.

DPM has targeted production of 770,000 tonnes of urea in 2011 and a net profit of VND1.45 trillion ($69 million).

Quang Nam Mineral Co pays two-year dividend

HA NOI — Quang Nam Mineral Industry Co (MIC) has set January 12 as the deadline for existing shareholders to register to participate in its two-year dividend payout. MIC will pay the first phase of dividends on January 24, paying 15-per-cent in cash, while a 17-per-cent dividend in form of shares will be paid later in the second phase.

MIC will also offer an additional 2.5 million shares at VND15,000 (US$0.7) to existing shareholders at a ratio of 1:1. Shareholders can transfer their buy rights from January 19 to March 4 and make payment until March 8.

Yesterday, MIC also listed additional 513,000 shares it previously issued to the strategic shareholders on the northern bourse. However, the share closed yesterday down 6.48 per cent to VND60,600 ($2.89). 

Source: vnagency.com.vn

Farmers to expand cocoa growing areas

HCM CITY — Viet Nam will expand its cocoa cultivation areas to take advantage of high global demand and rising prices, as well as unstable production from the world's major cocoa growers, according to industry officials.

Speaking at a meeting on the industry's development, Dr Tong Khiem, director of the National Agriculture and Fisheries Extension Centre, said that although Viet Nam began planting cocoa trees in 1980, the industry did not prosper until 2005.

Industry growth was spurred by assistance from international organisations, the Vietnamese Government policies and higher prices for cocoa beans.

Viet Nam has about 16,725ha under cocoa cultivation, a four-fold increase compared to five years ago.

The trees are planted in mainly in 10 provinces, including Ben Tre, Tien Giang, Dak Nong, Dak Lak, Binh Phuoc and Ba Ria-Vung Tau, producing some 2,500 tonnes of dried beans a year.

The country plans to expand cultivation to 40,000ha by 2015 and to 50,000ha by 2020.

The yield would be around 26,000 and 52,000 tonnes, respectively, an official said at a conference in HCM City yesterday.

Cocoa is mostly grown under the shade of other crops, such as coconut palms and coffee trees.

Nguyen Van Hoa, deputy head of the ministry's Cultivation Department, said although there was an increase in cocoa plantation areas, the planting was scattered and small-scale, causing difficulties to production and consumption.

To meet the planning target, the ministry will check zoning plans for cocoa cultivation in southern provinces.

Based on the zoning plans, each province will set up specific projects for cocoa development, Hoa said.

Since cocoa is still a relatively new tree in Viet Nam, not much research has been conducted on the plant.

Hoa said that scientists and agricultural research institutes should focus more on research to create new high-quality seedlings, better cultivation techniques, and measures to prevent and control insects.

The Government would set aside funds for scientific research to develop new seeds, construct new infrastructure projects in rural areas and support farmers when they shift to growing cocoa trees, he said.

The Government is also encouraging co-operation between concerned agencies and the private sector to develop the cocoa industry.

His department will work with local authorities to organise agricultural extension programmes to provide farmers with skills and techniques in growing, harvesting and processing cocoa.

Hoa also recommended that farmers not harvest the beans before adequate maturity so as to ensure cocoa quality.

Speaking at the conference, Dr Pham Hong Duc Phuoc of the HCM City's Agriculture and Forestry University said Viet Nam should establish standards for cocoa quality and develop more agricultural extension programmes that would teach new planting techniques to farmers.

Rising demand

While global demand for cocoa will increase by 2-4 per cent, or 100,000-200,000 tonnes per year, the world's cocoa output will only rise about 2 per cent a year, Hoa said .

The supply from the world's largest cocoa producers, Ghana, Ivory Coast, Nigeria and Cameroon accounts for 70 per cent of the world's cocoa output.

But supply from those countries is no longer stable, Hoa said, adding that many cocoa processing plants in Southeast Asia were operating at only 60 per cent of their capacity due to raw material shortages.

Besides traditional markets like the US and Western Europe, the demand for cocoa from China, India and Eastern Europe has also increased recently, he said. 

Source:  vnagency.com.vn

Interbank rates see decline

HA NOI — Interbank interest rates declined by 0.45 – 2.47 percentage points last week, depending on loan terms, indicating more stable system liquidity after some weeks of tension, the State Bank of Viet Nam announced yesterday.

Overnight rates for loans denominated in Viet Nam dong saw the strongest decrease, dropping 2.47 percentage points to a rate of 10.42 per cent per year.

Average borrowing costs for one-week, six- and 12-month terms fell by 0.45-0.58 per cent to a range of 12.72-13.01 per cent. Rates on one-year terms fell to a range of 13-13.25 per cent.

At commercial banks, interest rates for dong-denominated loans to prioritised borrowers – e.g., enterprises operating in agriculture and rural development or exports, and small- and medium sized enterprises – declined to a range of 12.5-14.5 per cent, with other commercial rates continue to average 18-20 per cent per year.

Interbank rates for loans in US dollars, meanwhile, rose by 0.65-2.02 per cent to a range of 1.11-3.25 per cent per year, depending on terms. Commercial bank rates for loans in dollars were being offered at rates of 5.5-8 per cent per year. 

Source: vnagency.com.vn

Quality key to Japan seafood market

HCM CITY — Vietnamese firms should focus on food safety standards if they want to export seafood to Japan, a seminar held in HCM City on Wednesday heard.

Vo Thanh Ha, deputy head, North East Asia Division, at the Industry and Trade Ministry's Asia Pacific Market Department, said: "Japanese consumers are particular about quality, durability, and convenience of products."

Last year the Japanese government lifted a ban on Vietnamese dragon fruits after they began to be treated to get rid of melon flies in accordance with Japanese standards.

Ha apprised delegates about Japanese Industrial Standards for industrial products and Japan Agricultural Standards.

Officials from the Japan Environment Association urged exporters to apply for "Ecomark," a certification that a product does not harm the environment.

Exporters need to find information about business and technical barriers in Japan from Vietnamese commercial counsellors, Japan External Trade Organisation, and trade groups to crack the market, Ha said.

Ha noted that apart from quality and other requirements, the severe competition from other countries would also be a challenge for Vietnamese firms eyeing Japan.

Le Quang Lan, deputy head of the ministry's Multilateral Trade Policy Department, said: "Japan has promised assistance for several Vietnamese projects to improve quality and food hygiene and safety to improve access to the Japanese market."

Source: vnagency.com.vn

Local chain opens supermarket in Cambodia

HA NOI — The Z38 company, a member of the Viet Nam Enterprises Association, opened the Viet Nam Supermarket on Wednesday in Phnom Penh, Cambodia.

The 3-storey supermarket covers a total area of 7,550 square metres on the Monivong Boulevard, one of the Cambodian capital city's main thoroughfares.

The company invested US$3 million to build the supermarket which is the largest Vietnamese goods retailer in Cambodia, said the store manager Le Minh.

He said he hoped the supermarket would help introduce high quality Vietnamese products to Cambodian consumers and the Vietnamese people living in that country, and further increase the reputation of Vietnamese goods.

More than 20 Vietnamese businesses have their products on sale in the supermarket, including garments, footwear, cosmetics, instant noodles, canned food, coffee and dairy products.

Many Vietnamese products had caught the attention of Cambodians due to their quality and reasonable price including Acecook instant noodles, Bibica and Kinh Do confectionery products, Vissan processed foods, Trung Nguyen coffee products and Phu Quoc sauces, said a Cambodian trader from the Orussey Market in Phnom Penh.

Vietnamese producers should concentrate more on improving the quality and design of their products to further penetrate the 14 million strong Cambodian market. More Vietnamese supermarkets were expected to open in four other provinces across the country, Minh added.

A Vietnamese trader in Phnom Penh said it was important for Vietnamese enterprises to have a good distribution system and customer care services to promote the consumption of Vietnamese goods in Cambodia.

Viet Nam invested $900 million in 63 projects in Cambodia in the first six months of this year, according to the Cambodian Development Council, making it the country's third largest investor, after China and South Korea.

Investors included Viettel Telecom Group, the Bank for Investment and Development of Viet Nam, PetroVietnam, the Viet Nam National Coal and Mineral Group and Vietnam Airlines. 

Source: vnagency.com.vn

Lack of electronic payment options hamper growth of online commerce

HA NOI — Credit cards and other electronic payment systems essential to online shopping remained underutilised in Viet Nam, said Viet Nam Vat Gia Joint Stock Co director Nguyen Ngoc Diep.

About 30 million people nationwide were using the internet as of October of this year, with the figure expected to surge to 40 million over the next three years, but few Vietnamese consumers had or used credit cards and so have not yet established habits of buying merchandise online, Diep said.

"Meanwhile, buyers and sellers have not established any trust since many e-commerce websites are operated without care and with low security. Due to poor marketing, e-commerce stands at a low level among consumers," he said. "It's an uphill battle for e-commerce companies."

Businesses involved in e-commerce needed to promote their images while helping consumers better use their services, he added.

But business investment in e-commerce remained low, accounting for only 5 per cent of total business expenditure while bringing in up to a third of customer orders, according to a recent Ministry of Industry and Trade survey of about 2,000 enterprises. Businesses themselves also placed about 28 per cent of their total orders online.

Vu Thi Bach Nga, an official of the Viet Nam Competition Administration Department under the Ministry of Industry and Trade, said e-commerce helped cut intermediaries in distribution and saved time and money for both sellers and buyers.

Nga said that e-commerce included business-to-business, business-to-consumer, and consumer-to-consumer formats using the internet, mobile phones and email.

However, fraud was also increasing rapidly, undercutting consumer trust in e-commerce, she said, noting that the draft Law on Consumer Protection was expected to address measures to protect consumer rights in using e-commerce, helps the growth of the online industry.

Meanwhile, banking has become one of the leading fields in successfully applying e-commerce, with substantial efforts made to upgrade technology in order to manage transactions online.

Source: vnagency.com.vn

Fruit imports rise by nearly 4%

HA NOI — Imports of fruit and vegetables into Viet Nam reached US$264 million in the first 11 months of the year, an increase of 3.9 per cent over the same period last year, according to the Viet Nam Fruit and Vegetable Association.

Imports in November alone totalled $30 million, largely due to a surge in imports from China. Fruit such as oranges, apples and pears constituted over 85 per cent of the imports.

Agricultural products from preferred importers must meet minimal food safety and pesticide inspections but were not checked for the presence of preservatives or stimulants, said a Ministry of Agriculture and Rural Development official who asked to have his name withheld.

Products with a certificate of origin from China receive the preferential treatment and are exempt from import taxes pursuant to the ASEAN-China Free Trade Agreement.

Merchants who had registered to open an import declaration might import products without limit, confirmed Tran Vu Hoang, a customs official at the Lao Cai International Border Gate.

Without the import tax procedures, the safety inspections and efforts to protect domestic agricultural products had become too lax, Hoang said.

Nguyen Tri Ngoc, director of the ministry's Cultivation Department of said that many of the imported fruits were also grown on domestic farms but were hard-pressed to compete with Chinese produce in terms of variety, price or quality.

Domestic farmers needed to improve the quality of produce to compete with imported products, Ngoc said.

They also needed to deal with such issues as climate change, rising fertiliser prices in the northern region, and flooding in the central region, he added, although good weather currently would likely guarantee sufficient produce to meet high consumer demand ahead of the Lunar New Year. 

Source: vnagency.com.vn

Foreign buys lift blue chips

HA NOI — Heavy buys in blue chips helped lift the VN-Index to a close yesterday of 481.4 points, a gain of 0.55 per cent over Wednesday's finish, but low trading volume on the HCM City Stock Exchange suggested dampened investor enthusiasm.

Gains by major shares like insurer Bao Viet Holdings (BVH), Masan Group (MSN), Vietcombank (VCB) and PetroVietnam Finance (PVF) were largely driven by foreign investors, noted Nguyen Thanh Binh, head of analysis for a Ha Noi-based securities firm.

Foreign investors, who were net buyers of 1.5 million shares overall on both exchanges, worth a net of VND58.2 billion (US$2.8 million), accounted for over 90 per cent of trades in BVH and over 96 per cent of activity in MSN shares, Binh said.

"However, the rally in blue chips wasn't enough to attract local investors," he said, noting low volume by the order matching method of just 37.3 million shares, worth VND920 billion ($43.8 million).

The total volume of trades was a more respectable 57 million shares, worth VND1.5 trillion ($71.4 million).

On the Ha Noi Stock Exchange, the HNX-Index fell for the second day, losing a quarter of a percentage point to close at 112.64 points. Volume was lower than Wednesday's at 41 million shares, with a value of VND833.4 billion ($39.7 million).

PetroVietnam Construction (PVX) was the most-active share, with 10 million traded.

Analysts of Stoxplus Corporation expected sluggish trades in the final session of the year today due to holiday sentiment and market uncertainty.

Au Viet Securities Co analyst Dang Lan Huong blamed the low volume on the fact that commercial banks temporarily paused lending against securities collateral to review the books at year-end.

The markets will be dark on Monday for the New Year holiday, but trading will resume on Tuesday.

Source: vnagency.com.vn

Ha Noi builders ordered to stop quoting in dollars

HA NOI — The State Bank of Viet Nam here has ordered Ba Dinh Joint Stock company, a company of construction consultants, to stop insisting that payments for its apartments be made in US dollars.

The company has been offering apartments in the Hattoco project located in Mo Lao, Ha Noi's Ha Dong district. However, all sales prices are quoted in greenbacks.

The State Bank said that the company's contracts did not conform with Foreign Exchange regulations.

The company has been told to cease the practice – or face stiff fines.

The bank took action after receiving many letters of complaint earlier this month.

Ba Dinh company director Luong Van Phu was quoted by local online newspaper Vnexpress.net as saying that the company had not received any advice from the bank.

"We will comment when we receive the document," Phu said.

However, Phu said that while apartment prices were quoted in dollars, the company converted prices into Vietnamese dong – but he did not say at what rate.

He also claimed that the technique was used "just to save equity and overcome variations in construction material prices".

The Foreign Exchange Ordinance forbids listing or selling goods in foreign currencies.

Source: vnagency.com.vn

Insurance premium grows 20% to $1.5b year-on-year

HA NOI — Total insurance premiums are estimated to have reached VND30.69 trillion (US$1.57 billion) this year, a rise of 20.3 per cent on last year, according to the Ministry of Finance's Insurance Management and Supervision Department.

The department reported non-life insurance premiums contributed roughly VND17 trillion ($871.8 million), up 24 per cent on last year.

Life insurance premiums rose 16 per cent to VND13.69 trillion ($702 million).

This year also saw insurers pay out more than VND12 trillion ($615.4 million) in claims to institutions and individuals.

Director of the Department Trinh Thanh Hoan said next year they would streamline the existing regulations to further develop the insurance market and encourage institutions and individuals to take out insurance.

Insurers would be encouraged to provide insurance to the agriculture, forestry and fishery sectors and in remote areas, Hoan added.

He said the department also planned to submit proposals to the Ministry of Finance for licensing the establishment of 3-4 insurers and insurance brokers next year.

According to the department's statistics, the country has 53 insurers, including 29 non-life insurers. There are also 12 life insurance and 11 insurance brokers. The country has only one re-insurance firm.

The department forecast the total insurance premium would reach VND35.29 trillion ($1.8 billion) next year, up 18.8 per cent year-on-year. Non-life insurance would see big rises of roughly 22-25 per cent to VND20 trillion ($1.03 billion) while life insurance rise would be 12-15 per cent.

General secretary of the Viet Nam Insurance Association Phung Dac Loc also believed the insurance market would experience strong growth next year as the Government had targeted a GDP growth rate of 7 per cent.

"Strong economic growth, which helps lift worker incomes, will lead to further development of the insurance market," he said.

Loc anticipated the life insurance market would grow roughly 18 per cent next year with mixed insurance as the key product.

He said there were still plenty of domestic opportunities for insurance companies to expand, with just 5 per cent of the total population holding life insurance. Loc estimated that roughly 30 per cent of the country's population could afford to take out insurance policies.

The Business Monitor International also reported this year that Viet Nam's insurance market was likely to see strong growth with total premiums of up to VND58.45 trillion ($2.99 billion) by 2014. This would include non-life premiums of VND27 trillion ($1.38 billion).

Source: vnagency.com.vn

Interest rates on dollars still high, but dong falls

HCM CITY — The maximum interest rate offered on dong deposits has fallen to 14 per cent from a record high of 17.5 per cent recently, but interest on dollar deposits remains high at above 5 per cent.

Some banks pay even higher — Phuong Dong (Oriental) Commercial Bank offers retail depositors 5.1 per cent for seven to 13 months while An Binh Bank pays 5.6 per cent for 60 months.

Even large banks face the risk of losing customers if they cut the rate: Eximbank Vietnam, for instance, pays 5.2 per cent for three-month terms.

With businesses usually paying off debts to foreign and local partners during the year end, there is a high demand for foreign currency loans now. Many businesses also require dollars for importing items for the long holiday season between Christmas and Tet (the Lunar New Year).

But there has been a spurt in lending through the year. The State Bank of Viet Nam said commercial banks operating in HCM City lent almost VND185 trillion (US$949 million) in US dollars, a year-on-year increase of 35.4 per cent.

The central bank also said foreign currency lending in the country was up almost 37.8 per cent this year compared to a 25.34- per- cent rise in dong loans.

Businesses accepted dollar loans despite the volatility in foreign exchange to enjoy the much lower interest rates compared to the dong.

Le Xuan Nghia, deputy chairman of the National Committee for Financial Supervision, said the Government had assigned top priority to cooling inflation (at 11.75 per cent this year). Once inflation was lowered, the interest rate problem would cease, he assured.

Source: vnagency.com.vn

Processed food tops list of products hit by inflation

HCM CITY — The prices of most consumer goods, especially dried and processed foods, have risen sharply in HCM City.

Analysts said though there had been no rise in purchasing power among consumers, the prices of many goods in demand during Tet (the Lunar New Year) had gone up by 7 to 10 per cent.

At some wholesales markets like Binh Tay in District 6 and An Dong and Hoa Binh in District 5, the prices of dried and processed foods have been rising since mid-December.

Medium-quality dried shrimp has soared from VND300,000 (US$15.4) per kilogramme to VND350,000 while high-quality ones cost VND600,000.

Lap xuong (Chinese sausage) has risen from about VND50,000 to VND170,000.

Sugar and vegetable oils are up by at least VND3,000 since last month.

Farms are selling chicken at VND5,000 per kilogramme more than a fortnight ago.

Many businesses have already adjusted prices by at least 10 per cent and plan to increase them by another 5 to 10 per cent ahead of the Tet shopping season.

The analysts warned that food prices would continue to go up until Tet since suppliers would continue to hike their prices.

Suppliers blamed their higher prices on the rise in the cost of raw materials.

Nguyen Kim Ngan, director of the Viet Huong Food Company, said the price of raw pork had jumped by VND4,000 per kilo-gramme and many other foodstuffs by by 5 to 10 per cent.

Nguyen Huu Thien, deputy director of the An Giang Fisheries Export-Import Company, said they also increased the prices of catfish products — twice, by 5 to 12 per cent the first time and by 5 and 15 per cent the second — after fish prices skyrocketed by 40 per cent since last month.

Many city retailers also said that the prices of many goods in demand during Tet had risen.

Huynh Huu Tuan, manager of Citimart's Binh Thanh District outlet, said almost all producers and distributors, including those supplying processed foods, hiked prices by 7 to 10 per cent in December.

Amid the price hikes, the People's Committee has told businesses participating in a city price stabilisation programme to keep their prices at committed levels, Le Ngoc Dao, deputy director of the Department of Industry and Trade, said.

Source: vnagency.com.vn

Exporters predict tra fish shortage

HCM CITY — Export of tra fish is expected to hit a roadblock next year due to a combination of internal and external factors, industry insiders told a meeting held in HCM City on Tuesday.

They forecast exports to fall from around 645,000 tonnes this year to 360,000 tonnes.

Duong Ngoc Minh, head of the Viet Nam Association of Seafood Exporters and Producers (VASEP)'s Freshwater Fish Commission, said "production will see a nosedive because of a severe raw material shortage that could last until September." But he did not explain the cause of the shortage.

Besides, prices are likely to skyrocket, putting exporters at a disadvantage in oversea markets, he said, explaining input costs had risen sharply. Manioc prices have doubled from VND3,000 per kilogramme while rice bran prices had gone up from VND3,500 to VND5,500.

Loan interest rates have also gone up considerably in the last few weeks.

Minh said: "Banks have turned their backs on fish farmers and processors. Whether the development of tra fish will be sustainable largely depends on their support."

Deputy Minister of Industry and Trade Nguyen Thanh Bien said credit would remain hard for fish farmers and traders to access.

"The Government wants to ensure economic stability and fight inflation, and therefore interest rates will stay high at least in the first few months of next year," he said.

To Thi Tuong Lan, VASEP's deputy general secretary, said another challenge was that many countries in the neighbourhood, like Thailand, Malaysia, Philippines, and Indonesia, had large tra farming programmes.

Besides, some import markets had erected technical barriers to control tra fish imports, she said.

Nevertheless tra would remain the key seafood export item, accounting for 28.2 per cent of exports, she said.

There are 290 tra exporters in the country who sell their products in 163 markets.

Deputy minister Bien said the Freshwater Fish Commission should co-ordinate with VASEP and the Ministry of Agriculture and Rural Development to study and zone areas for catfish farming.

Businesses should focus on developing and popularising trademarks in foreign countries through promotion programmes.

They should establish close links with farmers to ensure supply of fish for processing.

Nguyen Huu Dung, deputy chairman of VASEP, said the businesses also needed to get international quality certification such as GlobalGAP to sustainably develop the tra industry.

There are now 20 businesses that have obtained GlobalGAP.

Source: vnagency.com.vn

Timber products earn $3.3b in exports

HA NOI — The wood products industry earned US$3.3 billion from exports this year, $300 million more than the target set for the year, according to the Viet Nam Timber and Forestry Products' Associations.

The association's vice chairman, Nguyen Ton Quyen, attributed the result to the rebound of traditional import markets, such the EU, US and Japan, following slumps over the past two years, as well as rising prices and a Government incentive policy that lifted the 10-per-cent tariff imposed on imported wood materials.

Of the $4 billion in export turnover predicted for the industry next year, $1.3-1.4 billion would be spent on importing between 4-5 million tonnes of raw materials.

HCM City Handicraft and Wood Industry Association (HAWA) vice chairman Tran Quoc Manh, speaking on the sidelines of a meeting celebrating the 20th anniversary of the association's founding in HCM City on Tuesday, said inflation would continue to increase many input costs for the industry next year.

Manh said that with increased demand for higher quality and environmentally friendly goods, local wood products makers should improve their production systems to meet the requirements of foreign customers.

He advised companies to learn about technical barriers set by importing countries and understand foreign laws and regulations to minimise potential risks imposed by those barriers.

"The economic recovery is still underway, but with increased demand from the US in the fourth quarter, I hope that orders will increase significantly next year," Manh said.

Ongoing efforts of domestic enterprises in seeking new export opportunities in India, Eastern Europe and the Middle East also contributed to the increase in exports, Quyen said, adding that penetration into such new markets would bode well for the industry in the future.

Quyen listed stricter provisions for timber products in importing countries, raw material shortages and inadequate capital as major challenges facing the industry in the coming year. Compliance with the Lacey Act, the US law requiring wood exporters to prove the origin of timber and related materials, would increase production costs.

Difficulties in accessing credit were also problematic for wood products exporters, he said.

HAWA chairman Nguyen Chien Thang said reliance on imported raw materials and a labour shortage would likely cause difficulties for manufacturers next year.

Local wood processors needed to develop their own sources of raw materials, create more added-value in their products, and use more advanced technology to reduce the dependence on manual labour, he said.

To mark its 20th anniversary, HAWA was awarded the Certificate of Merit from the Prime Minister for its contribution to the socio-economic development.

"HAWA has greatly contributed to the development of the handicrafts and wood products sector not only in HCM City but elsewhere," said Deputy Minister of Industry and Trade Nguyen Thanh Bien.

The association has conducted professional training courses, trade promotions and seminars to help members strengthen competitiveness and expand markets, and the association and its members have made significant contributions to the sustainable development of the domestic wood products industry, said Thang, noting that the number of members had increased from 27 when it was established in 1990 to 350.

Viet Nam now has over 2,500 wood processing businesses, nearly three times the number in 2000 and eight times that of 1990. Private enterprises represent 90 per cent of the total. Altogether, the firms manufacture 3,000 different timber products sold in 120 foreign markets.

Source: vnagency.com.vn

Bank issues convertible bonds to partners

HCM CITY — An Binh Bank (AB Bank) will issue VND600 billion (US$28.6 million) worth of convertible bonds to strategic shareholders today.

The International Finance Corporation (IFC) will buy VND480 billion ($5.7 million) worth of bonds, convertible into a 10-per-cent stake in the bank after two years. Strategic shareholder May Bank will buy the remaining VND120 billion ($6.15 million) worth of bonds, aiming to maintain its current 20-per-cent stake in An Binh Bank.

"Funds raised through this issue will be allocated to the bank's medium- and long-term capital and to upgrade infrastructure," said bank chairman Vu Van Tien.

The bonds will have a face value of VND1 million $47.6 and pay a yield of 6.9 per cent per year. One bond will be convertible into 100 shares.

AB Bank has also closed registration for bonus shares to be issued at a 1:10 ratio. The bank is attempting to raise funds in order to increase charter capital from VND3.4 trillion to VND3.8 trillion ($182.4 million), with a further increase to VND4.8 trillion ($228.6 million) within two years.

Source: vnagency.com.vn

Securities shares depress indices

HA NOI — A plunge in the value of shares of Saigon Securities Inc (SSI) weighed down stock indices yesterday and stoked investor concerns over year-end trends.

"SSI shares was among the major stocks heavily impacted by market moves," said Ha Noi broker Nguyen Van Quy. "It is also among the group of securities stocks which achieved some of the most impressive gains the day before."

A sell-off of SSI began as soon as the shares hit a five-month high of VND33,000. A wave of profit-taking spread to other stocks, driving down 145 out of 230 listed shares on the HCM City Stock Exchange. SSI closed off 1.2 per cent on a heavy volume of 3.6 million shares.

The VN-Index ended the session down 0.12 per cent to 478.75 points. The volume of trades fell 30.4 per cent from Tuesday to 61.9 million shares, worth VND1.4 trillion (US$66.7 million).

On the Ha Noi Stock Exchange, the HNX-Index declined by 1.64 per cent to 112.93 points, with losers outperforming advancers by 199-106. Volume remained high at 50.7 million shares, worth VND1.1 trillion ($52.8 million).

Securities stocks fell by 1.4 per cent overall on both exchanges, Quy said, with only VNDirect Securities (VND) and Kim Long Securities (KLS) – the most active stock of Ha Noi market, with 7.3 million shares traded – closing flat.

"The brisk at trading volume, especially in Ha Noi, meant an existance of hot money inflows, which could create a turnaround in the final days of the year," Quy said.

Le Cong, an analyst with the financial services provider Stoxplus Corporation, said that market correction could drive sentiment in the next two sessions, but, with all major economic data released, the market was unlikely to see any big changes.

Foreign investors increased their sales on both exchanges, unloading nearly 8 million shares, while buys remained strong at 7.1 million.

Source: vnagency.com.vn

Ministry predicts greater rise in sugar prices

HA NOI — The price of sugar would continue to increase in the run up to Tet and through the first quarter of 2011 due to an expected sugar shortage, said the Ministry of Agriculture and Rural Development.

High demand for raw materials and the Viet Nam Sugar Association's predicted shortage of 300,000 tonnes of sugar in 2011, as well as the increase in the world sugar price, may push the price of sugar cane and sugar up on the domestic market in the near future, said the ministry.

Sugar currently stands at VND22,000-25,800 per kilo on the domestic market while the world sugar price is at a record high of US$800 per tonne.

However, the association expected local supply to reach 150,000 - 170,000 tonnes this month and increase further in the first quarter of next year to meet domestic demand by next May, said the association general secrectary Ha Huu Phai.

The ministry has also permitted enterprises to import 250,000 tonnes of sugar to meet the high demand for the up comingTet holidays.

The association estimated that domestic production would reach 1 million tonnes of sugar for the 2010-11 crop, higher than the output of 889,000 tonnes for the 2009-10 crop.

Source: vnagency.com.vn

Credit growth targeted at 23%

HA NOI — Credit growth should fall to 23 per cent next year, the State Bank of Viet Nam announced yesterday, setting a more cautious policy than was pursued this year, when growth in commercial bank lending neared 28 per cent.

The State Bank also sent a clear message that monetary policy would focus on controlling inflation and stabilising the economy.

Foreign exchange policy would also be set in line with market signals to ensure system liquidity and a narrower trade deficit, the central bank said.

In closed-door meetings held in HCM City on Monday and in Ha Noi yesterday, State Bank of Viet Nam Governor Nguyen Van Giau told commercial banks that credit should be focused on manufacturing sectors and gradually shifted away from non-manufacturing sectors.

Credit growth targets for individual banks would be dependent on business scale and performance, Giau said.

The deputy head of the Central Institute for Economic Management (CIEM), Vo Tri Thanh, told Viet Nam News a target of 23-per-cent credit growth was reasonable in light of next year's 7-per-cent inflation target.

"The target sends a clear message that the central bank will strictly supervise credit growth," Thanh said, although he cautioned that whether the central bank would achieve these targets would largely depend on other economic pressures.

Inflation reached 11.75 per cent this year, substantially exceeding the Government's adjusted target of 8 per cent, orginally set by the National Assembly at 7 per cent.

Credit growth this year has been estimated at 27.6 per cent – or 29.8 per cent if gold and US dollar prices are taken into account. Both figures are well beyond the target set last year of credit growth of 25 per cent.

Total outstanding dong-denominated commercial bank loans this year were estimated to have increased by 25.3 per cent, while loans in foreign currencies grew 49.3 per cent. Meanwhile, total deposits on hand grew an estimated 27.2 per cent over December 2009.

At a meeting last Saturday with the National Assembly's Economic Committee, Giau noted that bad debt in Viet Nam's banking system rose to an estimated 2.5 per cent of outstanding loans this year, up from 2.03 per cent in 2009.

The ratio would be higher if loans of VND26 trillion (US$1.33 billion) extended to troubled State-owned shipbuilder Vinashin were included in the total.

Nominally, the Vietnamese dong also lost over 5.5 per cent of its value against the US dollar over the course of the past year.

Source: vnagency.com.vn

Vinashin bailout spurs markets

HA NOI — Trading exploded on the nation's stock exchanges yesterday, with the volume of trades tripling on the HCM City Stock Exchange to 88.9 million shares, worth nearly VND2.1 trillion (US$100 million).

The brisker activity helped lift the VN-Index to a close of 479.33 points, a gain of 1.33 per cent over Monday's session.

The Government's decision to bail out struggling shipbuilder Vinashin by extending it a loan at a zero-per-cent interest rate set off yesterday's explosion in trades, explained Nguyen Quoc Binh, head of brokerage for a HCM City-based securities company.

"This news helped motivate investors since more bad news about Vinashin's debt seemed like the last thing they wanted to hear before the year ends," Binh said.

Tan Tao Industrial Park (ITA) saw the largest gains among 199 stocks advancing yesterday, following ITA's announcement of a whopping 50 per-cent dividend and plans to issue bonus shares.

Tan Binh Import-Export Co (TIX), Dong A Plastics Co (DAG) and Transport Engineering Construction and Business Investment Co No 584 (NTB) also posted heady gains.

On the Ha Noi Stock Exchange, the HNX-Index rose for a second day, closing up by 3.03 per cent to 114.81 points. Volume improved to nearly 45 million shares, worth a total of VND903.4 billion.

Financial services provider Stoxplus Corp noted that financial stocks achieved the highest gains yesterday, advancing by an average of 3.1 per cent, with the share of many securities companies, in particular, hitting their ceiling prices.

Kim Long Securities Co (KLS) became the most-active share nationwide, with over 5 million traded.

Binh suggested that the ‘hot' money might have begun returning to the markets yesterday as speculators sought opportunities in the final days before the new year.

"The money is flowing strongly to groups of stocks unsupported by any significant news," he said. "This could warm up the markets in the last days and the VN-Index could close out the year at a higher level than had been expected."

Foreign investors reverted to a profit-seeking stance yesterday, selling off over 800,000 shares in HCM City. They remained net buyers on the Ha Noi market, but by a net of only 179,800 shares.

Source: vnagency.com.vn

Viet Nam, Thailand to promote trade

HA NOI — Trade and investment activities between Viet Nam and Thailand would be further promoted in the new year, said Viet Nam's trade counsellor in Thailand.

Nguyen Thanh Hung said Thai investment and trade activities would continue to grow in Viet Nam, due to the country's political stability and economic development potential.

Thailand approved 14 new projects in the country this year, helping it break into the top ten largest investors in the country, Hung said. Large Thai firms, including TIPCO, Amata and Siam Cement Group, were also promoting investment in Viet Nam.

According to statistics, Thai firms invested a total of US$5.7 billion in Viet Nam during the 1988-2009 period.

Meanwhile, eight Vietnamese enterprises have opened representative offices in Thailand to promote their businesses.

The Hoang Anh Gia Lai Company is Viet Nam's largest investor in Thailand, having built an apartment block in Bangkok. The Thien Long Group and Quang Tri Trade and Investment Company have also opened representative offices in Thailand to export Vietnamese goods to the Thai market.

The Trung Nguyen Group has been looking for Thai wholesalers to stock its products, due to increasing demand in Thai supermarkets.

Trade between the two countries was estimated to reach $7.5 billion this year, an increase of 21 per cent compared to last year, Hung said.

That figure would be likely to increase in the future as more and more export commodities take advantage of a zero per cent import/export tax rate under the ASEAN co-operation framework, he said.

Source: vnagency.com.vn

New brand enters local dairy market

NGHE AN — The first milk production project in the northern central region on Sunday launched its maiden product line TH True Milk on the local market.

The production project of TH Milk Company has an investment of US$1.2 billion.

The company has imported 10,000 cows from New Zealand, Uruguay and Canada, and produced pure milk processed by equipment and advanced technology from Israel.

Its production plan until 2012 calls for TH Milk to have 45,000 cows and a plant capacity of 500 million litres of milk a year. By 2017, it is targeted to have 137,000 cows on its farms.

"As the company increases its investment to $350 million by 2012, it will be a great impetus to the development of Nghe An and the central region," said Deputy Prime Minister Truong Vinh Trong, speaking at the launch ceremony.

Trong is also the chairman of the National Steering Committee to the Northwest Region, which includes a part of central Nghe An Province.

The farms and the milk plant are based in the province's remote Nghia Dan District, an area that many experts mistakenly thought did not have the right natural conditions for dairy farming.

"Raising a cow can benefit farmers more than one hectare of rice cultivation can. I believe this milk project will change the local rural facade and economic structure," Trong said.

Thai Huong, general director of Bac A Bank, the project investor, said the economy would benefit from the project. At the ceremony, the company donated VND9 billion ($418,604) to build a cemetery for local war martyrs and offered milk valued at VND3 billion ($139,534) to local poor children.

Source: vnagency.com.vn

Ministry to tighten screws on overseas investments

HCM CITY — The Ministry of Planning and Investment is considering drastic new measures to tighten oversight of outward investment by firms, according to Viet Nam Investment Review.

Overseas investment has risen significantly in recent years to around US$1 billion this year, and is expected to rise to at least $2.2 billion next year.

But the newspaper said the existing system was slack, pointing out that of the 558 overseas projects – 70 per cent of them belonging to the public sector – only 300 submitted annual reports to relevant agencies while 67 did not exist.

The majority of those filing reports were major firms that account for most of the foreign investment, it added.

However, the others' flouting of rules has caused difficulties for Government agencies responsible for managing overseas investments.

Recently, while trying to gather information on overseas investments to amend a draft decree, the Ministry received responses from only half of the country's 63 provinces and cities.

Significantly, Ha Noi and HCM City, which accounted for most of the investments, failed to respond, the review stressed

Because they lacked information on overseas investment, authorised agencies have been unable to control the capital already transferred abroad and firms' use of profits.

Some firms had not repatriated their profits to Viet Nam.

To better manage overseas investments in the interim, the Ministry planned to work with agencies like provincial business registration and tax offices and the police to inspect firms that did not file reports on their overseas projects.

In cases where the agencies could verify overseas addresses, the Ministry would ask the police to investigate and possibly revoke the licences issued to invest abroad.

Source: vnagency.com.vn

Telecom industry nears saturation

HCM CITY — The telecom market is unlikely to sustain its scorching pace of development since it has reached saturation point and tariffs have fallen significantly.

Viet Nam has a population of 86 million and 163 million subscribers, including 148 million for mobile phones.

"The telecommunication market has reached saturation and … has come under strict oversight with regard to quality and tariffs," Deputy Minister of Information and Telecommunications Tran Duc Lai said.

"It is time for service providers to focus on quality and diversification of services."

He predicted 2011 to be a year for improvement in quality and a boom in broadband services.

This year most telecom firms have achieved growth of at least 20 per cent and introduced many new services like 3G, internet TV, high-definition television, and 3D television on trial.

The industry's revenues are expected to top US$6 billion, double the 2007 amount.

But next year will be hard for companies that lack muscle since saturation has also ushered in increased competitiveness and changes. FPT bought a stake in EVN, South Korea's SK withdrew from S-Fone, CityPhone folded up, while VTC and Dong Duong Telecom could not provide their "full mobile virtual network operator" service as planned.

Source: vnagency.com.vn

Domestic drugs need shot in arm

HA NOI — While the Ministry of Health has created favourable conditions for domestic pharmaceutical companies to expand production, the industry needs to develop a strategy to attract investment, says Minister of Health Nguyen Quoc Trieu.

Most domestic pharmaceutical companies simply produce basic medicines but not the more specific, higher value products supplied by foreign-invested ones,said Trieu. Over 90 per cent of their raw materials are imported, and they lack high-tech production lines, he says

Vu Thi Thuan, general director of domestic pharmaceutical firm Traphaco, says Viet Nam has many kinds of herbal ingredients available but has not built on this natural advantage.

Only about 10 per cent of materials for the industry come from the domestic market, but this could be much higher if manufacturers took advantage of diverse local materials, Thuan says, urging the Government to generate a strategy for developing markets and growing areas for medicinal herbs under the Good Agricultural and Collection Practices (GACP) of the World Health Organisation.

Poor management of raw material supplies has also made it more difficult for the authorities to keep the prices of medicines stabilised, says Deputy Minister of Industry and Trade Do Huu Hao.

The rising prices of imported pharmaceuticals also continue to put pressure on domestic prices, Hao says.

Source: vnagency.com.vn

HCM City to host Tet shopping fair

HCM CITY — Nearly 300 local companies will showcase their products at the Tet Shopping Fair to be held at the Phu Tho Indoor Sports Stadium in HCM City's District 11 on January 21.

Organised by the Business Studies and Assistance Center and Sai Gon Tiep Thi newspaper, the fair will feature 700 booths displaying Vietnamese high-quality goods, including garments, footwear, processed foodstuff, beverages, pharmaceutical products, electronic and electric products and household utensils, with attractive promotions.

The event also includes the Anti-Obesity Day, calligraphy writing and other special art programmes. The Don Tet xa nha programme (Celebrate Tet Away from Home) will be held for students who lack funds to return home for the holidays.

Value of honey exportsreaches $20m

DAK LAK — Dak Lak Bee Honey Joint Stock Co exported 11,000 tonnes of honey and 200,000 tonnes of beeswax this year, earning an export value of US$20 million – double last year's figure. The US bought 80 per cent of the company's products, but others were sold to Canada, Japan and South Korea. The company invested VND25 billion ($1.2 million) this year in new equipment for bee-farming households and to expand production.

GP Bank obtains licence extension of 77 years

HA NOI — The Global Petroleum Commercial Bank (GP Bank) has had its licence extended from 20 to 99 years under a decision issued by the State Bank of Viet Nam.

The extension was seen as essential to GP Bank's long-term development strategy to become a major commercial bank in Viet Nam, according to GP Bank general director Pham Quyet Thang. GP Bank has total assets worth nearly VND28 trillion (US$1.3 billion).

Work begins on $80m industrial park complex

BAC NINH — The $80 million Thuan Thanh II urban area and industrial park project was kicked off by Taiwan-based Shun Far Housing Development Co in northern Bac Ninh Province's Thuan Thanh District last Sunday.

Located near Highway 39, the urban area and industrial park project covers over 304ha in the communes of An Binh, Hoai Thuong, Mao Dien in the northern province. The site will be divided into five functional areas for hi-tech workshops, service centres, entertainment and professional areas, and accomodations for workers.

Source: vnagency.com.vn

Thermal power becomes reality

HA NOI — The first turbine of Nhon Trach 2 thermal power plant, located in the southern province of Dong Nai, on Sunday officially generated electricity to the national grid, three months ahead of schedule.

This is a joint effort of the Viet Nam National Oil and Gas Group (PVN) and the project's contractors – Viet Nam Machinery Erection Corporation (Lilama) and PetroVietnam Construction Joint Stock Corporation.

The ahead-of-schedule operation of the first turbine is of significance to ensure the electricity for the country's economy, especially in the context that 2011's six-month dry season is forecasted to be in short of 1.4 billion kWh.

According to PVN, the group itself and the contractors are making great efforts to operate the second turbine in the first quarter of 2011 and put the combined cycle into operation by the end of next year.

The US$706 million power project, kicked off in June 27, 2009 with Nhon Trach II PetroVietnam Power Joint Stock Company as the main investor, includes two turbine groups with a total capacity of 500MW and uses Nam Con Son gas as fuel for generating power.

The project is jointly invested by PVN, Electricity of Viet Nam, Viet Nam National Coal-Mineral Industries Group and Viet Nam Posts and Telecommunications Group.

Source: vnagency.com.vn

HCM City industrial output rises

HCM CITY — HCM City's industrial output was worth VND609 trillion (US$32 billion) this year, up 14.2 per cent, according to the city Statistics Bureau.

Output was up in 23 of 27 major industrial sectors.

The machinery sector saw the highest growth, with metal products output rising by 21.9 per cent, machinery and equipment by 28.9 per cent, and electrical products by 32.4 per cent.

Leather and footwear, rubber, plastic, electricity, food and beverages, textile and garment, chemicals, and building materials also saw high growth rates.

Automobile assembly and electronics, which could not compete with imports, achieved the smallest growth rates. Coal mining, office equipment, and vehicle repair actually declined in value.

The ratio of sectors manufacturing knowledge-based products, using high technologies, and boasting high competi-tiveness has gradually grown, the Department of Planning and Investment said.

The proportion dependent on natural resources and labour, such as food processing, textile and garment, and leather and footwear, have reduced gradually, moving to neighbouring provinces.

After five years' implementation of restructuring its economy by increasing services and industry and decreasing agriculture, four major industrial segments – machinery; chemicals, plastic, and rubber; electronics and information technology; food and foodstuffs processing – account for 60 per cent of industrial output.

This is an increase of 5 per cent in 2005.

Source: vnagency.com.vn

VN, Russia continue search for oil

HA NOI — Viet Nam and Russia will continue their cooperation in geological survey work and oil and gas production on Viet Nam's continental shelf within the framework of the Vietnamese-Russian oil and gas joint venture (JV) Vietsovpetro beyond this year.

An agreement to this effect was signed in Ha Noi yesterday by Minister of Industry and Trade Vu Huy Hoang and Russian Ambassador to Viet Nam Andrey Grigorievich Kovtun.

Speaking at the ceremony, Minister Hoang stressed the special traditional relationship between Viet Nam and Russia, adding Vietsovpetro, a JV between the Viet Nam National Oil and Gas Group (PetroVietnam) and Zarubezhneft of Russia, was a fine symbol of the comprehensive, friendly and cooperative ties between the two countries.

This year concluded Viet-sovpetro's successful and effective cooperation stage under the agreement signed between the two governments in 1991, said the minister.

Minister Hoang said the signing of the agreement on further cooperation marked a new development in the traditional and strategic cooperative relations between the two governments. It deepened the ties between the two countries and would promote prosperity for the people of both countries.

The Vietnamese Government would create the most favourable conditions for Russian businesses to expand their investment activities in Viet Nam, particularly in the oil and gas sector, he affirmed.

By October 21, Vietsovpetro had reached its yearly target of tapping 6.2 million tonnes of crude oil. The JV is expected to tap 6.4 million tonnes this year.

Source: vnagency.com.vn

Move to lift limits on foreign ownership

HA NOI — The Viet Nam Association of Financial Investors (VAFI) sent a document late last week to the Government, the State Securities Commission and concerned ministries to urge them to raise the maximum limit on foreign ownership in listed companies and commercial banks.

Under Government Decree No 69/2007/ND-CP issued in 2007, foreign investors are not allowed to own more than 30 per cent of the total charter capital of any bank or more than 49 per cent of a listed firm.

VAFI has proposed that these caps be raised to 35-40 per cent for a bank and beyond 49 per cent for a listed company.

"Viet Nam should consider permitting foreign investors to purchase common stock or ordinary shares in banks, but without rights to vote on additional shares," said VAFI in its proposal. "This is a valuable lesson from some other countries in the world in order to help increase capital for banks."

Thailand, for instance, allowed foreign investors to own shares representing up to 49 per cent of a bank's charter capital, and they were also eligible to own additional common shares without voting rights, the association said, noting that there was no evidence that such a regime tended to encourage foreign speculation.

Adopting a similar measure here would help draw more foreign indirect investment into Viet Nam as well as stabilise the foreign exchange market and the balance of payments, said VAFI general secretary Nguyen Hoang Hai.

VAFI also urged that the equitisation of State-owned enterprises (SOEs) be hastened, since the number of SOEs equitised during the three years of 2008-10 was merely half the figure in the single year of 2005.

Experts blamed the slow pace on the poor performance of the stock market in the two years since the global financial crisis.

"However, we have to recognise that the goal of equitisation is to improve the operation of SOEs, to remodel corporate governance and raise transparency," Hai said. "It is not essential to sell a large proportion of the State interest, so long as the SOE's operations become more effective. We can see lessons from Vietcombank and Vietinbank."

Minor stakes could be sold to strategic investors in such SOEs as Mobiphone, Sabeco, Habeco, and PV Oil if equitisation were carried out, he said.

A speedier equitisation process in 2011 would help Viet Nam generate an additional source of foreign currency, helping stabilise the exchange rate, Hai said.

Source: vnagency.com.vn

Banking shares buoy indices

HA NOI — Earnings data from Sacombank helped lift sagging banking stocks yesterday, saving major indices from further declines.

Sacombank announced that it had earned VND2.2 trillion (US$104.8 million) in the first 11 months of the year, meeting 91.3 per cent of its target for the full year.

"Despite Sacombank only announcing an 11-month result, investors were pleased since the result was consistent with what they had expected about banking profits," said independent analyst Nguyen Anh Dung. "Some commercial banks even announced the completion of full-year targets a couple months back."

On the HCM City Stock Exchange yesterday, the VN-Index closed essentially unchanged at 473.05 points. The value of trades reached only VND 917.1 billion (US$43.7 million) on a meagre volume of 38.8 million shares.

The low volume of trades raised concerns that buying power wouldn't last long, Dung said.

"Day traders should be careful about participating now as the markets are uncertain and unpredictable," he added.

Gainers outnumbered decliners on the HCM City bourse yesterday by 119 to 99, with all banking stocks advancing, including VietinBank (CTG), up 2.8 per cent; Eximbank (EIB), up 1.85 per cent; Vietcombank (VCB), up just over 1 per cent; and Sacombank (STB), up 0.64 per cent.

Other blue chips rallied, as well, including insurer Bao Viet Holdings (BVH) and Phu My Fertilisers (DPM).

On the Ha Noi Stock Exchange, the HNX-Index closed up by 0.22 per cent to 111.43 points. Volume remained low at 36.2 million shares, worth VND704.6 billion ($33.6 million), while Kim Long Securities Co (KLS) claimed the position as most-active share with 6.4 million traded.

Foreign investors continued as net buyers on both exchanges, picking up a net of 2.1 million shares worth VND74.2 billion ($3.5 million). In HCM City, they accounted for over three quarters of the trading volume in shares of Vietinbank.

Source: vnagency.com.vn

Moc Bai border zone sees sales up 30%

HCM CITY — The Moc Bai Border Economic Zone in Tay Ninh Province has experienced a significant business boost this year with total sales soaring to VND1.48 trillion (US$75.7 million), an increase of 30 per cent over last year.

Currently, 54 businesses are operating in the zone, selling duty free goods to visitors, according to the its authority.

Although retail sales have fallen a little compared to previous years, contractual sales to other non-tariff areas like Tinh Bien, Lao Bao and Vinh Ba increased significantly.

CT Plaza chooses Korean contractor

HCM CITY — Korean group Kumho has been selected as the general contractor for the CT Plaza project on HCM City's Nguyen Dinh Chieu Street.

Construction will begin early next year on the VND1.6 trillion (US$80 million) project, invested by the CT Phuong Nam Joint Stock Company.

When completed in the third quarter of 2012, the 24-storey building in District 3 project will have a trade centre, hotel rooms and apartments.

New apartment project launched

HCM CITY — Developers Thai Duong Trading and Construction Joint Stock Co and Malaysia's Sova Holdings Sdn Bhd last Saturday introduced to the public a new apartment complex in the southern province of Dong Nai.

The complex is part of a US$47 million development project in Nhon Trach District that will comprise several villas, apartment buildings, hotels, a supermarket and an entertainment centre.

Work on the Cat Tuong Hung Phat apartment complex is set to be completed in 2012.

Knight Frank values property projects

HCM City — Knight Frank Viet Nam, an affiliate of Knight Frank LLP of United Kingdom, has made huge inroads in the property valuation and advisory business across Viet Nam with nearly VND20 trillion (US$1 billion) worth of property this year in the country.

Knight Frank has valued over 250 major projects across Viet Nam. They include Kinh Bac, Mapletree, Savimex, Charmvit, Protrade, Vinh Loc-Ben Luc and Nam Long.

Source: vnagency.com.vn

Developments spring up on outskirts of town

HA NOI — More and more high income earners are moving to the outskirts of the capital and this has led to increased investment in luxury real estate projects.

While real estate projects on the central coastal are busy launching promotions and offering discounts to attract buyers, investors in small-scale eco-projects are also quietly raising their selling prices.

The latest survey by CBRE shows that investors are more likely to invest in new communities on the outskirts of big cities than in tourism projects in the central coastal cities. And this trend is particularly true for Ha Noi.

Dang Duc Thanh, a member of the Ecological Tourism Real Estate Association said he was no longer interested in tourism real estate any more due to high financing costs and slow returns.

Although he loved the sea and saw profit in such projects, the October decision by the Ministry of Planning and Investment and the Ministry of Natural Resources and Environment to impose stricter controls on tourism real estate projects had led him to rethink.

Small real estate projects on the outskirts of cities would be his choice, Thanh said.

Dang Hung Vo, former Deputy Minister of Natural Resources and Environment, said that demand for resorts had come with country's economy growth. Now people weren't just looking for short-term travel options. Many wealthy people could afford to buy a "second home" for holidays and weekends away.

Typical examples of these new projects include Top Hills Villas in Luong Son of Hoa Binh Province, and Queen Villas and Tan Vien resort in Ba Vi District, around 60 km west of Ha Noi.

Nguyen Thanh Trung, director of Viet Nam Archi Land said he believed that with the growing demand, his company would sell out all villas in the Green Villas 4 project.

Trung said the increase in price of his villas was a daring move as other investors were offering great promotions and discounts. He added that the rise in prices was based on the real value of his projects. 

Source: vnagency.com.vn

Dragonfruit prices scale new heights in December

HCM CITY — The price of dragon fruits sold at orchards has increased to VND21,000 a kg since mid –December, the highest in the last 20 years, according to the Post-Import Plant Quarantine Centre No 2 under the Ministry of Agriculture and Rural Development.

The centre attributed the high price to a decline in output due to inclement weather and the customary high year-end demand in both local and export markets.

In Binh Thuan Province, the country's largest grower of dragon fruits, farmers have over the last two months used light bulbs to stimulate blossoming of the dragon fruit cacti during the off-season, but the ploy has not worked.

Binh Thuan has more than 12,500ha of dragon fruit orchards, of which 2,600ha meet Vietnamese Good Agricultural Practices (VietGap) standards. The province aims to have 100 per cent of its dragon fruit cultivation area meeting VietGap standards by 2015.

The province now exports dragon fruits to the US, the EU and Asia, mostly to China, which accounts for 70 per cent of the export quantity.

Dragon fruit export to the US increased sharply this month over previous months, the centre said.

The US was expected to import 800 tonnes of dragon fruit from Viet Nam this year, an eight-fold increase over last year, it added.

Source: vnagency.com.vn

Ca Mau seafood exports to reach $850 million in 2011

HCM CITY — The southernmost province of Ca Mau hopes to increase seafood exports by 11.8 per cent next year to US$850 million, local officials said.

To achieve the target, the province will tackle the current raw-material shortage by zoning 10,000 ha for breeding tiger prawns by 2015.

By next year it will also expand the area under prawn farming from1,500ha to 2,800ha.

It will also continue to promote various prawn-farming models like extensive farming and rice-shrimp cultivation, organic farming, and others, and advanced technologies to increase output.

Ca Mau is home to 34 seafood processing plants with a total capacity of 150,000 tonnes a year, 31 of them specialising in prawns.

Most of them use modern technologies that match international standards and trade with partners in 40 countries and territories.

While continuing to focus on key products and key markets, the province also hopes to diversify its export markets, products, and trading methods.

For the purpose, next year it will continue to explore new markets, especially those that import a large variety of seafood products.

Processing plants'output this year was 93,000 tonnes, an increase of 10.5 per cent over last year, with shrimp accounting for 83,000 tonnes.

Source: vnagency.com.vn

Binh Thuan looks to draw $6 billion in investment

BINH THUAN — The central province of Binh Thuan will seek to raise investment capital worth VND122 trillion (US$6.1 billion) for its latest five-year (2011-15) development plan, 2.7 times more than the previous one.

For the 2006–10 period, Binh Thuan mobilised VND44.5 trillion ($2.2 billion), three times higher than the outlay for the 2001-05 period, surpassing the set target by 6 per cent, the news bulletin Econet reported yesterday.

Of the VND44.5 trillion, VND11.43 trillion ($570 million), or 25.68 per cent, was sourced from the State budget for investment in traffic, irrigation, tourism infrastructure, water-supply system, education, healthcare and other projects in rural areas, particularly those inhabited by ethnic minority populations.

Through various incentive policies and by simplifying administrative procedures, the province was able to attract the remaining VND33.07 trillion ($1.65 billion) from both domestic and foreign private companies.

This year, the province recorded capital inflows of VND12.5 trillion ($625 million), 19 per cent higher than in 2009.

Binh Thuan also issued licences for 83 investment projects with a total capital of VND18.632 trillion ($931 million) this year, bringing the total number of projects in the province to 1,109 with a registered capital of VND116.1 trillion ($5.8 billion). Of these 79 are foreign-invested with a total registered capital of $1.6 billion.

While promising to create the most favourable conditions for investors to do business, the province has also urged investors to meet set deadlines. It has so far suspended 18 projects for undue delay.

The province is engaged in assigning priority levels for various projects in order to speed up work on site clearance work, compensation and resettlement of displaced residents. 

Source: vnagency.com.vn

Deposit interest rates drop, but lending rates remain high

After the rise of the annual deposit interest rate as high as 17.5 per cent, commercial banks finally cooled down the race, lowering it to 14 per cent as required by the State Bank of Viet Nam. They, however, seemed reluctant to cut the lending interest rate accordingly.

Prior to deposit rates returned to 14 per cent, banks, especially small ones, pushed up their lending rates to as high as 21 per cent. Several have begun adjusting their lending rates down for new borrowers, like the joint-stock Western Bank. Its CEO, Nguyen Quoc Sy, said his lending rates for new loans ranged between 18 and 19 per cent.

According to the chairwoman of a garment enterprise in HCM City, businesses could not pay an 18 per cent interest rate for loans to invest in operation development. They only ventured to support their working capital.

Loans to individual customers charged higher rates, of 22 per cent as ACB offers it if the debtor does not have mortgages.

Hoang Van Toan, chairman of Great Trust Commercial Bank, said lending rates would certainly drop but it would take some time, not immediately. This is understandable as banks had offered previously high deposit rates, and credit demand remains strong. A higher money supply is expected after the Lunar New Year as well.

According to a banking industry insider, the high capital demand may prompt banks and depositors to negotiate higher rates. Because of the need of capital, several banks have to accept negotiations with depositors who want a higher interest rate (more than 14 per cent), so banks cannot reduce their lending interest rate.

Several large banks have offered a lending interest rate lower than those of small banks, but they have tight requirements.

Debtors were asked to have high-value mortgage and transparent financial report, which have proven to be obstacles to small and newly established enterprises.

A banker said high lending interest rates were the way to limit access to loans for corporate customers as banks now are focusing on ensuring liquidity by the Lunar Year-end, and lending will resume afterwards. Even larger capable banks are not eager to provide loans because the interbank interest rate for one-month term has come up to 20 per cent.

Seaport for rent

Viet Nam will for the first time apply the model to manage a seaport infrastructure by leasing it to an operator through bidding, to the Cai Mep-Thi Vai International Port. The Viet Nam Maritime Department under the Ministry of Transport has appointed the Overseas Coastal Area Development Institute of Japan (OCDI) as provider of consulting service for assisting the ministry to select a tenant who will operate the facility.

According to the deputy head of the department, Nguyen Ngoc Hue, leasing the port is the quick way to recollect investment capital, which will help lessen the burden on the State budget.

"The lease contract will go to the best bidder who offers the highest prices and the best business plan for exploiting the port's potential," said Hue.

He hopes operating experiences and capacities to attract customers of the selected candidate will also help boost the port prestige internationally.

Hue said it would be a failure if this international port would be able to draw only Viet Nam's exported commodities, which have been shipped through Hong Kong and Singapore before getting to their final destinations.

The total turnover from the commodities handling stands at a modest level of US$1 billion per year.

Cai Mep-Thi Vai International Port in southern Ba Ria-Vung Tau Province is invested by the ministry with almost VND11.5 trillion ($590 million) coming from Japan's Official Development Assistance (ODA). It is expected to be in use early 2012 as a modern deep-water sea port, capable of receiving container ships of up to 100,000DWT.

Source: vnagency.com.vn

ADSL providers lose subscribers to mobile internet

HA NOI — The Viet Nam Post and Telecommunications Group (VNPT) continues to dominate the market for internet service providers, claiming over 75 of subscribers, with the remainder going to military-run provider Viettel and FPT Telecom.

The VNPT had over 2.5 million ADSL users by the end of 2009, compared to Viettel's 530,000 users and FPT Telecom's 440,000 users.

Early this year, FPT Telecom set a goal to claim 30 per cent of market share, while Viettel continued to assert it would maintain the second place in the market.

But FPT Telecom general director Chu Thanh Ha admits that it has been losing nearly as many customers as it can add, with the churning of old-to-new customers reaching as much as 40 per cent. Up to 20 per cent of all ADSL subscribers have changed their services several times, Ha says.

The VNPT also admits losing existing subscribers at a rate of 13-15 per cent per year, even as it adds new ones. VNPT's Ha Noi arm has targeted a million of new broadband subscribers this year alone – and it has been a challenge to meet the goal, says VNPT Ha Noi director Tran Manh Hung.

Viettel deputy director Le Huu Hien admits that growth in the market has been disappointing, noting that a large number of users now accessed the internet using mobile broadband and 3G services rather than through ADSL services.

Sensing which way the winds are blowing, Viettel is now paying more attention to the mobile broadband market than to ADSL development, since it has realised that heavy investment in ADSL infrastructure can no longer be recouped by the number of new customers added.

None of the major ADSL providers has ever released figures on how revenues or profits from providing the services.

The Ministry of Information and Communications has licensed over 40 internet service providers but recently revoked a number of them due to a lack of progress by licensees in deploying services.

Source: vnagency.com.vn

Workers refuse jobs at Delta industrial parks

MEKONG DELTA — With workers refusing to accept jobs in industrial parks in the Cuu Long (Mekong) Delta due to poor salaries and meal, accommodation and healthcare allowances, many employers are struggling to fill vacancies.

Phan Thanh Phi, head of the Long An Province Industrial Zones Authority, said 203 factories operating in 23 industrial parks in the Cuu Long (Mekong) Delta province, would need an additional 30,000 workers next year.

To put their needs into perspective, they employ only 45,500 workers now.

Their failure to increase wages to keep pace with the increasing prices had caused the high attrition of staff, Phi said.

"With their average monthly wage of VND2 million (US$100), the textile and garment and footwear industries have lost the highest number of workers."

Even the food provided to workers was not good enough to enable them to work for eight to 12 hours per day, he admitted.

In Can Tho, industrial parks needed a total of 10,000 workers and the figure would rise next year when more factories open and existing ones expand, the local Industrial Zones Authority said.

The workforce in the delta region was large enough to meet the factories'needs, but workers found it hard to make ends meet with monthly salaries that average VND1.3-VND2 million, Vo Thanh Hung, its head, said.

Many workers in textile and garment and seafood processing factories quit their jobs to work in HCM City and Dong Nai and Binh Duong provinces because of higher wages there.

The shortage of workers has also reached alarming levels in Ben Tre and Tien Giang provinces where workers get an average of VND1.8 million-VND3 million, including overtime, according to industrial zones' authorities.

To address the labour shortage, firms needed to hike wages and provide better food, accommodation and healthcare, Hung said. 

Source: vnagency.com.vn

Trade deficit reaches $12.4 billion in 2010

HA NOI — Despite the four-fold increase in export value against the National Assembly's previous prediction, Viet Nam's trade deficit still totalled US$12.4 billion this year, accounting for 17.3 per cent of the country's total export revenue, according to the General Statistics Office (GSO).

This year's trade deficit was marginally lower than 2009's figure of $12.85 billion, the GSO announced.

Excluding gold and gold products for export, the national trade deficit topped $14.2 billion or equivalent to 20.7 per cent of the export revenue, exceeding the target of 20 per cent set by the National Assembly.

Head of the GSO's Trade Department Le Minh Thuy blamed this unsatisfactory result on the country's increasing import volume, totalling $84 billion by the year-end as global goods prices continued rising.

The import turnover of foreign-invested sector remained very high this year at about $36.5 billion, a yearly increase of 39.9 per cent, while the State-owned sector imported only $526 million worth of products, up 8.3 per cent year-on-year.

Import turnover exceeded $1 billion in fabrics, electronics and computer components, plastics, footwear, chemicals and wood.

China continued to be the Viet Nam's largest exporter this year, supplying over $17.86 billion worth of goods, accounting for 24.9 per cent of the country's total import value in 2010, the GSO said.

Global prices rose 10.6 per cent, which had a significant effect on exports, which grew 25.5 per cent to $71.6 billion.

Garments and textiles for the first time posted an annual turnover of $11 billion, putting the sector first in the list of 26 major export goods, while seafood and footwear overtook crude oil as the top three items with the highest turnover.

Crude oil export turnover decreased by 20 per cent to $5 billion this year.

The trade deficit will increase to as much as $14 billion next year, according to forecasts from the Ministry of Planning and Investment's Economic Services Department.

Exports next year, excluding crude oil, are expected to total $78 billion – an increase of 10 per cent over the current year.

Imports are projected to jump by 11 per cent in 2011 to about $92 billion, with foreign-invested firms responsible for $41.5 billion for their imports, 15.3 per cent higher than this year.

Source: vnagency.com.vn