BUSINESS IN BRIEF 18/10

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MARD proposes more import of frozen meat



Ministry of Agriculture and Rural Development (MARD) recently proposed the import of about 35,000 tons of frozen meat until Lunar New Year 2012, even though meat prices nationwide have dropped by 25-33 percent.

During the first nine months of the year, the country imported 85,249 tons of frozen meat, mostly poultry, an increase of 4.5 percent over the same period last year.

The increase in the price of pork and chicken in the domestic market, earlier this year, created an advantage for importers to ship large volumes of meat at higher profits.

Meanwhile, the Veterinary Department under the Ministry of Agriculture and Rural Development informed that around 110.5 tons of pork is exported to China every day.

Diep Kinh Tan, Deputy Minister of Agriculture and Rural Development said that it is not practical to export pork meat to other countries since pork meat is scarce and cannot even meet domestic demands.

He also added that currently farmers sell chicken to traders at VND30,000 per kilogram, but consumers buy chicken from supermarkets at VND100,000 per kilogram!

An Khanh 2 thermal power plant licensed

The Thai Nguyen provincial People’s Committee granted the construction license of the An Khanh 2 Thermal Power Plant to An Khanh Thermal Power Joint Stock Company on October 14.

The VND10 trillion power plant, with design capacity of 300 MW, will cover a total area of 50 hectares in Tan Phu Commune, Pho Yen district.

Once in operation, scheduled for 2016, it will create 1,500 jobs and contribute 2 billion kWh annually to the national grid.

The construction of the plant is part of Thai Nguyen’s industrialization and modernization process, which is expected to make Thai Nguyen an industrial province by 2020.

Vice President visits HCM City

State Vice President Nguyen Thi Doan paid a working visit to HCM City’s Industrial Parks (IPs) and Export Processing Zones (EPZs) on October 14.

Ms Doan urged IP and EPZ trade unions and local authorities to pay more attention to further improving workers’ living conditions, especially issues related to salary, housing and kindergarten services. Ms Doan stated that although HCM City has a developed economy, the workers’ living standards in the IPs and EPZs are not as good as those in the southern provinces of Binh Duong and Dong Nai.

Currently, the City has built seven accommodation complexes for workers and expects to build an additional nine later this year. The figure remains modest, as the City now has nearly 260,000 labourers working in IPs and EPZs.

On the same day, the State Vice President held a working session with HCM City’s Labour Confederation to discuss the “Capital Aid Fund for Employment of the Poor” (CEP). She highlighted the CEP model which has contributed to reducing poverty in Vietnam.

The fund was established to provide poor people with a loan of maximum VND30 million at a low interest rate. The fund has helped many people escape poverty and improved their living conditions.

Vietnam is one of the two countries which have fulfilled the UN Millennium Development Goals (MDGs) on poverty reduction five years ahead of schedule.

European Institute for Asian Studies’ seminar on Vietnam

The European Institute for Asian Studies has held a seminar on ’25 years of Economic Reform in Vietnam’ at its head office in Brussels, with the participation of many researchers, diplomats and international journalists.

In his keynote speech Vietnam’s Deputy Minister of Planning and Investment Cao Viet Sinh underscored Vietnam’s important achievements during the Doi Moi (renewal) process since it started in 1986.

Sinh said that Vietnam is trying its best to be a responsible member of the World Trade Organization.

A foreign speaker remarked this renewal process has enabled Vietnam to change its economic structure from central planning to socialist-oriented market economy and to gradually integrate into the world and regional economies. He added that the European Union highly values Vietnam’s successes in recent years.

Many other speakers compared notes on Vietnam’s long-term economic development strategy.

India considers granting more preferential credit for Vietnam

Indian Financial Minister Pranab Mukherjee has affirmed that the Indian Government will increase ODA for Vietnam.

During a working sesion with Vietnamese Financial Minister Vuong Dinh Hue, the two ministers agreed to strengthen cooperation, especially in customs, tax, budget management, and public debt management for the benefit of economic development and bilateral trade and investment and draft a cooperative documents to be signed between the two countries.

In reply, Minister Mukherjee noted that in addition to US$100 million ODA for Vietnam announced at the talks between President Truong Tan Sang and Prime Minister Mammohan Singh, India will consider granting more credit for Vietnam to develop infrastructure and import Indian equipment and technology.

Indian Minister praised Vietnam’s guidelines on using ODA to develop infrastructure and strengthening public-private partnership (PPP). He said that Indian businesses will work with Vietnam’s relevant agencies on a number of investment projects in the country.

VinaCapital says now shuns condos, offices

VinaCapital, an asset management and property development firm in Vietnam, will shy away from high-rise apartment buildings and office segment, but instead shift attention to housing property attached to land.

Speaking at a press conference in HCMC on Thursday, Don Lam, general director of VinaCapital, the real estate and stock markets have suffered adverse impacts of the Government’s fiscal and monetary tightening policies. The company, therefore, will continue to focus on property with land in its portfolio besides investments in private and listed companies in the future.

“VinaCapital will launch the sales of housing units with land next year and will not invest in offices for lease or high-rise condo projects,” Lam said.

“The local economy has experienced a challenging year and we hope our investors to understand the investment environment, our efforts and achievements in recent time,” he said.

Despite economic difficulties, multinational companies have continued to pour big funds into Vietnam, Lam added.

The enterprise this year has sold a 23.6% stake in Hanoi Liquor Joint Stock Co. to UK-based brewing giant Diageo and offloaded its entire stake in Vinacafé Bien Hoa Joint Stock Co. to another fund.

For the education sector, VinaCapital has sold a large ratio of its holding in HCMC International School to Cognita, one of global private school manager. It has also sold almost all of its stake in Hoan My Medical Corporation to India’s Fortis Healthcare group.

Since the end of this month, VinaCapital will hold meetings with investor groups from Europe, North America and Asia to help them update information on investment opportunities in Vietnam. It will also take the chances to mobilize capital for bond and private investment funds.

VinaCapital manages three closed-end funds with over US$1.7 billion in assets under management, focusing on stocks, private enterprises, real estate and infrastructure.

In related news to property, statistics from the Steering Committee for Housing and Real Estate Market Policy shows that home buying demand in HCMC is falling while the city has plans to expand housing area by eight million square meters this year.

Nguyen Van Danh, deputy director of the city’s Department of Construction, said six million more square meters were completed in the January-September period, bringing to over 15 square meters the housing area per capita here.

There were 13 new projects with over 4,100 condos put into use during the nine months. Low-cost housing projects accounted for 37.1% with over 1,500 flats while high-class projects made up 33% with 1,300 units.

According to the committee, the demand for houses rise 30% but successful transaction volume in the first quarter fell over 36% year-on-year. The figures kept falling in the next two quarters as people expected home prices to drop further given economic difficulties.

Big hotel chains snub Tourism Awards

Famous hotel brands such as Sheraton, Sofitel and Hilton snubbed the Vietnam Tourism Awards 2010 which announced its winners this week.

Any hotels keen to win awards have to register and then be examined by Vietnam Tourism Association or local tourism management agencies.

However, several five-star international hotels did not apply, according to Vietnam Tourism Association.

Saigontourist Holding Co. has up to 12 hotels earning awards with New World, Caravelle, Rex, Majestic, Palace, Grand, Yasaka Saigon Nha Trang, De Nhat, Continental, Saigon-Halong, Saigon-Phu Quoc Resort and Bong Sen.

The top 10 five-star hotels were New World, Caravelle, Rex, Renaissance Riverside, Hanoi Daewoo, Majestic, Ana Mandara, Vinpearl Resort and Spa, Windsor Plaza and Six Senses Ninh Van Bay.

The top 10 four-star hotels were Palace, Grand, Yasaka Saigon Nha Trang, De Nhat, Continental, Hoi An Beach Resort, Saigon-Halong, Palace, Saigon-Phu Quoc Resort and Lang Tre Mui Ne Tourist Site.

The top 10 three-star hotels were Bong Sen, Victory, Vien Dong, Vung Tau Intourco Resort, Hoa Binh, Petro Song Tra, Rex, Festival, Cuu Long and Cong Doan Vietnam.

The annual tourism awards are granted based on criteria of room occupancy rate, business result, food hygiene and safety and environment hygiene.

Together with granting Vietnam’s leading hotels in 2010, the association has also announced leading tour operator awards. Winners will receive their awards at the Hanoi Opera House on Monday.

Software industry back on track

Several software firms have reported good business results although there have been no official statistics from the Vietnam Software Association and the Ministry of Information and Communications.

Nguyen Huu Le, chairman of Vietnam’s leading software outsourcing firm TMA Solutions, said his firm had gained good growth in contract volume and value.

“Our workforce has expanded 20%. We have recruited more employees since early this year to work on our projects,” Le said. TMA Solutions needs up to 150 for its new projects, he added.

Other software companies have also taken many new orders recently, most of them from North America, Japan and Australia.

New orders at Global CyberSoft (GCS) have risen strongly and the firm is planning to employ more workers, said Ngo Van Toan, vice president of GCS.

Toan said Vietnam’s software outsourcing market had been on the way to recovery in line with the global market movements, especially in North America and Japan, since mid-2010.

Chu Tien Dung, chairman of Quang Trung Software City Development Co., told the Daily that the number of software making contracts had surged 40% this year, and that the sector returned to the growth path last year.

Giant software outsourcing companies such as FPT, TMA Solutions, CSC, GCS, GHP Far East, ISB, and Capgemini Vietnam have reported high growth, Dung said.

The quick recovery of the domestic software sector following the 2008-2009 period has resulted from the uptick of global markets, especially North America and Japan, Vietnam’s two traditional markets.

Many global services centers have moved to Vietnam recently such as HP, Aricent, Sigma Designs, Texas Instruments and Simax Global Services, creating opportunities for Vietnam’s software industry to work with the world’s leading technology firms.

40 Hong Kong tourism firms to seek local partners

A trade mission comprising 40 Hong Kong travel agencies and the Hong Kong Tourism Association will come to Vietnam next month to look for local partners.

Tran Vinh Loc, director of Lac Hong Voyages, which is arranging the visit, said the delegation would meet with about 100 local travel firms on November 17 and 18 in HCMC and Hanoi.

“The Hong Kong enterprises are interested in building business links to spur tourism cooperation,” Loc told the Daily.

Hong Kong is regarded as one of the ten key markets for Vietnam this year, Loc said, and this first such marketing trip to Vietnam by Hong Kong’s partners will pave the way for a series of tourism promotion programs to be carried out in Vietnam in the coming time.

Hong Kong is paying attention to the Vietnamese market as it has recently launched tourism brochures for Vietnamese-speaking tourists, added Loc.

According to the HCMC Ministry of Culture, Sports and Tourism, Hong Kong was one of the five most favorite destinations of local tourists in the first nine months of the year.

Card transactions worth VND29 tril. In Jan-Sep

The total value of card transactions in the January-September period amounted to nearly VND29 trillion at home, up 52% year-on-year, reported Smartlink Card Services Joint Stock Co.

Smartlink is in charge of managing 95% of the total number of Automated Teller Machines (ATM) and Points of Sale (POS) in the local market.

Transaction value of ATM and POS handled among member banks was VND13.343 trillion with 15 million transactions in the first nine months, while that of ATM and POS linked with other systems was recorded at over VND15.41 trillion with more than 18.3 million transactions,” said Smartlink’s deputy general director Nguyen Hoang Long.

Long noted that the number of customers who have used non-cash payment services, mainly card transactions, has sharply increased, seeing the number of clients using value-added services such as fee collection and airfare payment via the internet have soared 300% year-on-year.

“The good performance was the result of local banks’ efforts to set up and broaden the network of ATM and POS. After getting hooked to Banknetvn and VNBC, we have also finished the connection of the ATM system for 42 lenders and people’s credit funds, and completed the link of the POS system among 30 credit institutions,” added Long.

Smartlink forecast the local card market would maintain the same growth in terms of card issuance and payment activities in the near future, with the number of domestic newly-issued cards rising over 20% and total sales of card transactions increasing 30% year-on-year.

Smartlink has 34 member banks with over 8,000 ATMs, accounting for 98% of the total number of ATMs in the country and 33,500 customers, making up around a 53% share of the domestic market. The system handles up to one million card transactions daily and is able to process payment for ten million domestic cards.

Intercontinental Asiana Saigon awarded ‘Vietnam’s Leading Hotel 2011’

The InterContinental Asiana Saigon has been honored with the award ‘Vietnam’s Leading Hotel 2011’ for the second consecutive year at the World Travel Awards.

To acknowledge, reward and celebrate excellence across all sectors of the global travel and tourism industry, World Travel Awards burst onto the international travel and tourism scene 18 years ago. World Travel Awards organizers aim to encourage world-class competition, to stimulate innovation and creativity and to ensure travelers receive exceptional value.

Other World Travel Awards winners from Vietnam are Sheraton Hanoi Hotel as Vietnam’s Leading Business Hotel, Vinpearl Resort and Spa, Nha Trang as Vietnam’s Leading Resort and Furama Resort in Danang as Vietnam’s Leading Spa Resort.

Brussels seminar talks Vietnam economic reform

A seminar entitled, “25 years of Vietnam’s economic reform” was held in Brussels by the European Intitute for Asian studies with the participation of international researchers, diplomatic corps and journalists.

Addressing the seminar on Oct. 11, Vietnamese Deputy Minister of Planning and Investment Cao Viet Sinh, who was on a working visit to Belgium, informed participants of Vietnam’s achievements in socio-economic fields since 1986, along with details of annual growth of the nation’s gross domestic product and its integration into the world’s economy.

Deputy Minister Sinh spoke of difficulties and obstacles to Vietnam’s development, particularly in the context of the world’s economic instability.

He presented, the nation’s of monetary and investment policies to stabilise its economy, stressing Vietnam encourages investment in rural areas to ensure social welfare, especially facilitating rural workers’ return to production in case jobs in industries are cut down.

For his part, Deputy Head of the Asian Department’s Southeast Asia Unit of the European External Relations Service, Philippe Van Amersfoort said the European Union (EU) highlighted Vietnam’s economic achievements over recent years, saying that the EU is interested in bilateral trade as well as Vietnam’s policies for foreign companies.

The EU remains an important trade partner for Vietnam, he said.

Vietnamese Ambassador to Belgium Pham Sanh Chau emphasised the great potential for expanding all-round cooperative relations with Vietnam.

New Chevrolet Spark launched in Vietnam

GM Vietnam today launched the new Chevrolet Spark and the all-new global mini-car will go on sale from October 14.

“We are offering in Vietnam the same high-quality products that we offer in other places such as the US and Europe to satisfy our customers in one of the most high-potential markets,” said Mike Arcamone, President and CEO of GM Korea. “Our all-new mini-car will contribute to the long-term growth of GM in Vietnam and benefit car buyers across the country.”

“The new Spark was developed at GM’s global vehicle development centre for mini and small cars,” said Gaurav Gupta, managing director of GM Vietnam. “With its best-in-segment design, performance and safety, the new mini is destined to become an industry benchmark and a winner with consumers around the world.”

Based on GM’s global mini-vehicle architecture, the new Spark took 27 months to develop. Aimed at meeting the highest quality and performance standards in the most sophisticated markets, the global vehicle was put through over one million kilometres of intensive durability tests, extreme weather tests and crash tests.

The use of high-strength and ultra-high-strength steel over a majority of its body ensures segment-leading occupant protection. The new Spark also features a revolutionary design, advanced technology, segment-leading features and benchmark safety.

The new Spark is a car that is ideal for those with an urban lifestyle. With the styling of a sporty hatchback, it showcases the new direction of Chevrolet design and a new trend in the design of mini-cars.

“GM’s clear goal from the very beginning was to create a revolution in size and design despite the restrictions of the mini segment,” said Gupta. “We wanted to make a statement with an innovative design that would go far beyond a typical mini-vehicle and set new standards for the segment. This is not your average-looking mini-car.”

Cashew exports exceed US$1 billion

Vietnamese cashew businesses have exported 114,000 tonnes of cashew nuts so far this year, earning more than US$1 billion, said the Vietnam Cashew Association (VINACAS).

According to VINACAS, the cashew sector is likely to fulfill the yearly export target of US$1.4 billion.

However, it said, there remain certain difficulties such as the shortage of workers and capital, unstable material supply, and improper investment in modern technology.

VINACAS Vice President Nguyen Duc Thanh said it is crucial to implement the strategy for sustainable development of cashew until 2020, with a focus on building a clean and productive material region and applying food hygiene and safety standards in cashew processing industry.

He also proposed banks extend due debts and reduce interest rates to help businesses involved in cashew exports.

Vietnamese chickens granted Global GAP

Binh Minh Livestock Company Ltd in Trang Bom district, Dong Nai province, has been awarded a Good Agricultural Practice (GAP) certification by the Control Union Vietnam Company for its strict chicken breeding methods.

Binh Minh is the first company in Vietnam and Asia to achieve Global GAP recognition for poultry products.

Global GAP is a private sector body that sets voluntary standards for the certification of production processes for agricultural and poultry products (including aquaculture) around the globe.

According to Duong Anh Tuan, Director of the Binh Minh Company, the company raises 800,000 chickens for meat and 60,000 for breeding.

Binh Minh chicken farm provides chicken products to many supermarkets throughout the country as well as breeding chickens for surrounding localities including Binh Duong, Binh Phuoc, Lam Dong and HCM City.

Vietnam, Sri Lanka enhance financial cooperation

Vietnam and Sri Lanka have signed a memorandum of understanding (MoU) on financial cooperation between the Vietnam Ministry of Finance and the Ministry of Finance and Planning of Sri Lanka to promote bilateral cooperation in economics, trade and investment.

The signing ceremony took place on October 14 as part of State President Truong Tan Sang’s visit to Sri Lanka.

The signatories were Minister of Finance Vuong Dinh Hue and Sri Lanka’s Minister of Finance and Planning Sarath Amunugama.

Under the MoU, the two ministries of finance will promote activities and share experiences in public finance management including managing State budgets and capital construction investment projects, as well as expanding global financial cooperation, and managing financial markets.

At the talks on the same day, the two ministers informed each other of the socio-economic situation in their respective countries as well as the Vietnamese Government’s policies and solutions to control inflation, stabilize the macroeconomy, and restructure the national economy by shifting it to a new economic growth model in the near future.

The Sri Lankan Minister of Finance and Planning asked the Vietnam Ministry of Finance to share experiences in areas such as mobilizing and managing foreign direct investment (FDI), reforming State-owned enterprises, devising solutions to cope with the global economic downturn, and seizing opportunities that encourage domestic growth in today’s turbulent economic climate.

Minister of Finance Vuong Dinh Hue has agreed to share his experiences with his Sri Lankan counterpart.

Both sides consented to set up working groups with the aim of developing an effective and practical annual action program.

Tien Giang aims for more investment from RoK

A seminar was held in the Mekong Delta province of Tien Giang on October 15 to introduce the province’s potential and investment opportunities to businesses from the Republic of Korea (RoK).

The event was co-organized as part of the Vietnam-RoK Cultural Days in Tien Giang by the provincial People’s Committee, the RoK Consulate General in Ho Chi Minh City and the HCM City-based RoK Culture Institute.

Doan Van Phuong, Director of the provincial Department for Trade and Investment Promotion, highlighted the province’s advantages and incentives for foreign investors, and pledged to create more favourable conditions for RoK investors to establish business in Tien Giang.

Le Van Huong, Deputy Chairman of the provincial People’s Committee said that RoK businesses are involved in 14 out of 62 foreign direct investment (FDI) projects in Tien Giang, with a total investment of US$144.5 million, ranking second in terms of capital.

Mr Huong said that RoK investors have made remarkable contributions to local economic development in recent years.

Lotte tower reaches for heavens to cement its big reputation

Lotte Coralis Vietnam last week took a big step to see its Lotte Centre Hanoi climb to 65 stories.
A huge amount of concrete was poured into the foundations with 17,030 cubic metres of cement provided by 2,433 concrete mixer trucks during a four-day period.

Also, 16 concrete pump trucks were onsite. Lee Jong Kook, president of Lotte Coralis Vietnam, said the cement would fortify the building’s strength to endure a 7.0 magnitude earthquake and strong winds. “This meaningful construction will be a milestone to raise construction technology in Vietnam regarding high strength concrete and concrete workers’ skills,” Lee said.

According to Lee, by the end of 2012, 40 stories above the ground would be completed, 65 stories above ground would be completed by the end of June 2013, and the main building would be finished by the end of 2013 and put into operation within 2014.

Lotte started construction in October 2009, with the $400 million project to cover 14,000 square metres. When finished, it will house more than 42,200sqm of department store space, 300 hotel rooms and 63,000sqm of office space. Serviced apartments are to take up about 40,000sqm and there is provision for 1,146 parking spaces.

When completed, the new Lotte tower will be the third highest in the country, behind the 72-storey Keangnam Hanoi Landmark Tower in Hanoi and Ho Chi Minh City’s Bitexco tower which has 68 storeys.

This project was originally set up by a joint venture between Luxembourg-based Coralis SA and Lohr Industrie in 2005. However, in 2008 the project was transferred to Lotte.

Lotte was established in 1965 in South Korea. Its main activities include retail, food and beverages, chemicals and construction as well as hotels and resorts. The company is the fifth biggest conglomerate in Korea and has a more than 50 per cent retail market share in that country.

Port escapes storm

Work on the critical Lach Huyen deep seaport is to go ahead after partners in the project ironed out their differences over financial guarantees.

After three years of negotiations, in what is a landmark agreement, Japan’s Molnykit Company and Vietnam’s Vinalines last week inked a memorandum of understanding to set up a public-private partnership (PPP) joint venture. The venture will have chartered capital of $30 million with Vinalines holding a 51 per cent stake.

The deal will see the building of two berths at Lach Huyen port under PPP. Estimated capital for the project is around $320 million. “This is a milestone as the first PPP seaport project in Vietnam,” said Ngo Thinh Duc, Deputy Minister of Transport.

Located in Haiphong city, about 100 kilometres northeast of Hanoi, Lach Huyen deep seaport is a crucial for the handling of imports and exports in the northern key economic zone. The project is also expected to ease congestion at Haiphong ports which are the main gateway for imported and exported goods in northern Vietnam.

Vietnam Maritime Administration forecasted that in 2012, the demand for cargo handling at Haiphong ports would be 45 million tonnes while the ports’ current capacity is only 30 million tonnes per year. Lach Huyen deep seaport is expected to become operational by 2015 with annual capacity of 60 million tonnes.

Molnykit Company is an entity representing Mitsui O.S.K Lines, Nippon Yussen Kaisha and Itochu, which the Japanese government introduced to join this first ever PPP seaport project in Vietnam.
Nguyen Canh Viet, general director of the state-owned Vinalines, said both sides had hammered out an agreement for the project despite what were initially large differences over capital arrangement and risk sharing mechanisms.

One of the negotiation deadlocks was that the Japanese partners had demanded the Vietnamese government commit to purchase the project in case the joint venture makes a loss.

“The Japanese partners later quitting this demand was a breakthrough for the joint venture to take shape,” said Viet. The two berths are designed to accommodate 100,000 dwt vessels with annual handling capacity of six million tonnes.Le Trieu Thanh, deputy general director of Vinalines, said JBIC had agreed to loan the joint venture $203 million for the two berths at Lach Huyen port.

Construction of the first berth will be completed in 2014. It will come online the same year while the second berth will go live in 2015. These two births are Component B of Lach Huyen port. The Vietnamese government will invest around $821 million to build Component A – or infrastructure comprising channels, the waterfront and breakwaters.

This component will be funded by Japan’s official development assistance and the Vietnamese government’s corresponding capital. Lach Huyen port is Vietnam’s second PPP project. The first was the Dau Giay-Phan Thiet expressway in southern Vietnam with the participation of Bitexco Group and the International Financial Corporation, a member of World Bank Group.

Livestock breeders expand, use hi-tech

More breeding farms are being set up, and they are increasingly using high technology.

Speaking at a conference last Friday in HCM City, Nguyen Xuan Duong, deputy director of the Animal Husbandry Department, said more than 23,558 breeding farms exist nationwide, up 13.2 per cent over last year.

Most of them are located in the Song Hong (Red River) Delta, the southeastern region, or the Cuu Long (Mekong) River Delta.

Duong said the animal husbandry industry, especially the animal feed processing sector, was integrating quickly with its international counterparts worldwide.

At the conference, which was held to review performance for the first three quarters, Duong said that the number of small-scale farms had dropped, but industrial farms, which provided higher productivity and quality, had increased.

Despite high input costs and animal diseases, the industry still maintained a high growth rate, with an increase of 16.8 per cent of poultry output, nearly three per cent of pork, and 19 per cent of eggs, meeting domestic demand. However, production in different regions was unequal, causing partial shortages and price differences in several localities.

The sustainable development of the industry is still threatened by small-scale scattered farms, volatility in animal-feed prices and a high risk of disease.

In addition, most industrial farms have been developed without a zoning plan.

That was partly due to inadequate investment in the sector by the Government, and a lack of policies to support small-scale farmers in their bid to enter the market economy, he said.

Other reasons included the poor management by State agencies in controlling disease, or the quality of breeders and animal feed.

Duong said the industry would continue to re-arrange its production system by encouraging development of industrial farms, linking with industrial slaughterhouses and meat processing plants.

This would ensure hygiene and safety in breeding and reduce diseases to improve productivity and quality as well as protect the environment.

He called on localities to make clear zoning plans and set aside land funds for the industry and move farms out of residential areas.

Participants at the meeting asked the Government to create conditions for households and enterprises in the sector to access long-term bank loans and subsidise a part of the interest rate so they can upgrade their breeding facilities.

In addition, many provincial departments of Agriculture and Rural Development have asked the Government to completely subsidise the cost of blue-ear vaccines.

More agriculture insurance, especially in the animal husbandry industry, is necessary to make banks feel secure when they provide loans to breeding establishments.

Diep Kinh Tan, deputy minister of Agriculture and Rural Development, said the country would continue to create conditions for household-based breeding to develop, but called on farmers to work together under cooperatives or to cooporate with businesses to solve environmental problems and ensure outlets.

He asked the Animal Husbandary Department to complete planning for the animal breeders' system and keep a close eye on the market, prices and disease development from now to the year-end.

Pepper, coffee farms expand

Coffee and pepper farmers in the Tay Nguyen region (Central Highlands) are expanding their fields into unzoned areas as market prices rise for their products.

Under the country's coffee development plan, the area under cultivation in the Central Highlands is expected to shrink to 470,000 ha by 2015 and to 459,500 ha by 2020.

But the region's Agro-Forestry Scientific and Technical Institute said farmers had planted 16,000 ha of coffee trees during the rainy season, expanding to 498.365 ha, despite warnings from Government agencies.

Under the national plan, the region would have an annual output of nearly 1 million tonnes of high-quality coffee, or 90 per cent of the country's total coffee output.

In some areas, farmers are destroying natural forests to plant coffee trees. Similarly, the area under pepper cultivation has increased to 20,000 ha, up 4,000 ha against last year. Dak Lak and Lam Dong provinces have the largest new coffee areas, while Dak Nong Province has the largest new pepper area. In Ma D'Rak and Ea Sup districts of Dak Lak farmers are cultivating all areas while coffee trees are normally planted in rich basalt soil only.

Dak Lak plans to have 4,900ha of pepper by 2015. The province's pepper area now stands at more than 6,000 ha. Many farmers are also using coffee and pepper seedlings that have no clear origin and are unhygienic, causing disease outbreaks in coffee and pepper cultivation areas.

In the last dry season, coffee in unplanned areas died or did not grow well, creating huge losses for farmers.

PV

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