Continuing delays in site clearance for the Sai Gon Hi-tech Park has cost the Government at least VND3 trillion (US$143 million), a meeting held to review 10 years of its operation on Thursday heard.
Pham Chanh Truc, former head of the Sai Gon Hi-tech Park (SHP) Authority, said smooth site clearance would have helped save that amount.
There were prospective "better solutions," he said.
Residents affected by the SHP could have been allowed to buy shares in the project with their land, or a portion of the land could have been used to resettle them, he said.
With better implementation, the first stage of the project would have been completed three years earlier, he said.
SHP was established in 2002 on an area of 913 ha in several wards in District 9.
It opened on 28 May this year, with the 300ha first stage attracting an investment of $1.76 billion in 41 projects.
Implementation of the VND5.8 trillion ($278 million) second phase began upon the completion of the first.
Le Thanh Dai, deputy head of the SHP Authority, said site clearance, which began in 2002, had affected over 3,000 households, with 13,000 people having to move to new residential areas.
It was scheduled to be finished in 2005, but so far only 2,910 households had moved, handing over 767.25ha, he said.
Poor planning and management were to blame for the delays, which had left many families remaining back on their land while many others from elsewhere had illegally occupied vacated plots of land, he added.
Viet Nam on track to attract $15 billion in investment
Viet Nam is well set to achieve this year's foreign direct investment (FDI) targets, including mobilisation of US$15 to 16 billion and disbursement of $10 billion, a senior official from the Ministry of Planning and Investment has said.
Do Nhat Hoang, head of MPI's Foreign Investment Department, said FDI mobilisation in the first half of the year reached $6.4 billion compared with the $8.8 billion in the same period of 2011. FDI disbursement during the same period amounted to $5.4 billion, compared with last year's $5.3 billion.
He said FDI figures for the first half of 2012 are a positive sign for the Vietnamese economy, especially at a time of global economic crisis.
The downward tendency in FDI mobilisation of late is because Viet Nam is targeting higher quality inflows, Hoang said.
"We can say that recently compiled statistics on FDI mobilisation and disbursement are in conformity with our expectations."
Hoang said FDI in the manufacturing industry increased from 64 per cent in the first half of 2011 to 65.3 per cent during the same period this year.
Meanwhile, foreign investment in the service sector fell from 35 per cent to 34 per cent, while rising in the agricultural sector from 0.4 per cent to 0.9 per cent.
With an investment of $1.2 billion in the Tokyu property development project in Binh Duong Province, Japan was the largest foreign investor in Viet Nam in the first half of 2012.
Hoang said this was a good sign for the local property market because Japanese investors were very cautious in their decision – makings.
Barring major unforseen changes, the measures taken by the Government to improve the country's investment envrironment would help Viet Nam reach its FDI mobilisation and disbursement targets for 2012, he added.
Struggling shrimp sector offers dwindling benefits
Competition among seafood exporters of the world is becoming more fierce and increased costs are weighing heavily on the profits of shrimp farmers and processors, say industry experts.
This is despite high turnovers in breeding and exports, they add.
The fall in shrimp farming profits is due to the higher costs of baby shrimp, medicine and feed which account for nearly 80 per cent of their total expenses.
Minister of Agriculture and Rural Development Cao Duc Phat has asked provinces in the Mekong Delta to rezone shrimp breeding areas and invest in baby shrimp and technology to help shrimp farmers.
Phat also told shrimp exporters to sell directly to foreign consumers instead of through a third party. The difference between export and retail price in foreign countries was sometimes 10-fold which put farmers and processors at risk if the global market got worse, he said.
Vietnamese fisheries processors had already sought a foothold in 90 countries and territories but they could not control selling prices, said Phat.
Nguyen Trieu Don, chairman of Ut Xi Shrimp Processing JSC in Soc Trang Province, said his company had to import raw shrimp to maintain production, due to the lack of local shrimp.
However, global prices for processed shrimp went down 20 per cent over the same frame last year, Vietnamese exports were less competitive against other exporters and this was exacerbated by high bank interest rates, said Don.
Pham Anh Tuan, deputy director general of the Fisheries Department under the Ministry of Agriculture and Rural Development, said shrimp farming had become a key economic sector for provinces in the delta region. However, these provinces did not have clear plans and developed infrastructure.
One of the most important things was that baby shrimps were being sold in the local market without quarantine, which put the sector at risk of a disease epidemic.
Le Van Quang, chairman of Minh Phu Fisheries JSC in Ca Mau Province, said baby shrimp producers wanted to meet all requirements set by the ministry.
Nguyen Van Nhiem, chairman of My Thanh Shrimp Association in Soc Trang Province. A supervision agency should be established to conduct policies for shrimp breeding areas.
Agro-forestry-aquaculture surges by 2.8%
Viet Nam's agriculture-forestry and aquaculture sector posted an increase GDP growth rate of 2.8 per cent during the year's first six months, despite adverse weather and threats of diseases to livestock and plants, the Ministry of Agriculture and Rural Planning said yesterday.
According to Trang Hieu Dung, head of the Ministry's Planning Department, the sector generated a production value of more than VND110,000 billion (US$5 billion), an increase of 3.7 per cent compared with the same period last year.
Dung said even though world prices had dropped for many agricultural products, exports values for products in the whole sector still managed to reach US$13.67 billion.
The outcome resulted from the implementation of many activities to promote trading, efforts to reduce trade barriers and Government moves to buy stocks of products.
However, according to Nguyen Tri Ngoc, head of the Planting and Cultivation Department, lack of funding and high interest rates had also troubled many businesses and investors.
The department forecast that the winter-spring rice crop will total more than 22.2 million tonnes for the northern provinces and 13 million tons for the south.
Nguyen Thanh Son, deputy head of the Livestock Department, said the livestock sub-sector was experiencing many troubles, including the continued threat of disease. This had led to price of pork dropping to VND35,000 per kilogram.
Son called on the Government to give more support to farmers and businesses to access loans at cheaper interest rates to maintain sources of breeders. He said if meat prices continued dropping, the Government should also support businesses to buy large stocks of meat in preparation for winter.
The department is working on a proposal to the ministry calling for a support package of VND5,000-6,000 billion for livestock farms.
Experts also called for efforts to stabilise the source of rice paddy land to more than 7 million hectares, and keeping the export target at 6.5-7 million tonnes.
They said more focus should also be placed on improving the quality of other high-added value products such as tra fish, rubber, shrimp.
Fishing profits drop because of fuel costs
Thanks to favourable weather and new and repaired fishing boats, fishermen have been netting more fish offshore of central provinces, but their incomes have fallen due to higher production costs.
For the first half of the year, fishermen in Thua Thien – Hue Province caught a total of more than 16,000 tonnes of various fish species, up 4 per cent against the same period last year, according to the province's Department of Agriculture and Rural Development.
During this period, Thua Thien – Hue fishermen also repaired 23 fishing boats, built 20 new boats and bought six fishing boats from other provinces.
The province has 226 offshore fishing boats, each with an engine of more than 90Hp.
In Da Nang, fishermen caught a total of 19,500 tonnes of various fish species in the first five months of the year, an increase of 27 per cent year-on-year. Da Nang has 94 groups of fishing boats with a total of 683 boats.
The fishermen also received financial support from the city's People's Committee.
Although more fish were caught, fishermen incomes fell due to higher production costs, mostly due to fuel costs.
The price of diesel oil in the first six months of the year rose by VND1,863 a litre.
Since March, fishermen in Quang Nam Province have been able to stay longer at sea, with a higher catch volume, because of favourable weather conditions.
Quang Nam fishermen have built 39 new fishing boats this year, with 37 having engine of more than 90Hp.
Nguyen Van Gioi, head of the Quang Nam Province's Sub-department of Exploitation and Protection of Fisheries Resources, said offshore trawl fishing and cuttle fishing had not seen much profit, despite the better weather, because of higher fuel costs.
Qu?ng Nam fishermen caught 45,360 tonnes for the first six months of the year, up 41.8 per cent against the same period last year.
During this period, fishing boats in Quang Ngai Province caught a total of 59,322 tonnes, up 13.6 per cent.
The Quang Ngai Province People's Committee has approved financial support of VND20.6 billion (US$980,000) to fishermen.
The money is used to buy fuel, communication facilities on boats, and boat insurance and accident insurance for fishermen.
Enterprises find ways to tackle economic downturn
Purchase power of consumers in supermarkets has gradually declined by 10 percent during the recent economic downturn and only enterprises that are finding innovative product techniques are being able to survive and grow in the present scenario.
After two years of experimenting, the Lien Thanh Company has come up with a unique vegetarian fish sauce recipe made from pineapple fruit.
The new product, considered a breakthrough, meets food safety and hygiene required thanks to its natural fermentation methods.
The company is also the only one among other fish sauce companies that distinguishes fish sauce flavors between first extractions of fish oil fermented in salt and second or third extractions.
The company’s efforts have gone rewarded with its turnover increasing by 80 percent in 2009 and 2010.
The Vissan Company also understands the market when it launched new products at lower prices which met the demand of gourmet lovers. When contaminated pork was being rejected in the market, Vissan still managed a turnover of VND2,310 billion, accounting for a 10 percent increase compared to the same period last year.
Meanwhile Tran Quoc Toan, deputy director of Dien Quang Lamp Joint Stock Company, considers the distribution channel as very important. According to him, products fail if customers are unable to find the store to buy the product, even though the product is very good.
Accordingly, the company supplies its products to thousands of electric stores in the country and sells directly to farmers at cheap rates.
Moreover, the company promotes its lamps in many places across the country and often gives its products to clients for free, as promotions.
Poor power funds halting progress: EVN
Vietnam Electricity (EVN) and relevant ministries insist a capital shortfall is the biggest obstacle when implementing the national power development plan in 2011-2020 and a power price hike has been brought forward as a solution.
At an online meeting on the Government web portal on Thursday, EVN deputy general director Duong Quang Thanh said EVN would need to invest over VND500 trillion in 2011-2015. The State-run group has mobilized more than VND315 trillion.
The deficient fund will be mainly used for power plants that are in the offing, such as My Tan 4, expanded Duyen Hai 3, O Mon 3, and O Mon 4.
Thanh said the capital shortage would directly affect the progress of the power projects. Particularly, this year, the key projects to supply power for the southern region fall short by over VND8.9 trillion.
Hoang Quoc Vuong, deputy minister of Industry and Trade, told the meeting that financial distress would be the greatest challenge when rolling out the plan, aka Power Plan 7. The issue cannot be solved overnight, and it will certainly impact the project progress.
To deal with the matter, Vuong said a new power pricing policy should be approved. With appropriate power tariffs, investors will be able to secure electricity supply for the country.
In July 2011, the Government gave the nod to Power Plan 7 which is designed to generate an additional 5,000 megawatts every year by 2020, and develop power stations and power lines worth US$5 billion per year from now to 2020 and US$60 billion in 2020-2030.
Meanwhile, Phan Ngoc Quang, deputy head of the Department of Investment under the Ministry of Finance, said: “In the annual balance sheets, it can be seen that we have to depend much on external capital sources. The Vietnamese side can only finance 70-80% at the most.”
However, Tran Viet Ngai, chairman of the Vietnam Energy Association (VEA), told the Daily the total capacity of power plants nationwide was now 24,000 megawatts. Power Plan 7 sets a target of 75,000 megawatts by 2020, meaning there are only eight years left to develop an extra 50,000 megawatts, which is deemed as unachievable.
He said VEA is ready to submit a petition to the Government and the National Assembly, seeking a second thought on the master plan for the energy system of Vietnam.
“Our recalculation shows that the total capital demand of the power industry until 2020 is not as high as the figure given in Power Plan 7,” Ngai noted.
Therefore, VEA suggested eliminating some pumped-storage hydropower and coal-fired thermal power projects and excluding nuclear power supply from the total power output in 2020 to reduce the capital pressure on projects that are not necessary just yet.
Moreover, VEA proposed increasing the renewable energy supply. For example, Power Plan 7 sets a goal of 1,000 megawatts for wind power capacity by 2020, but VEA wants it revised up to 9,000 megawatts.
Experts object to power price hike
Some experts have objected to the 5 percent power price hike taking effect July 1 as they say it could lead to considerable burdens for consumers and the corporate sector.
Dr. Le Dang Doanh, former head of the Central Institute for Economic Management, turns down the Electricity of Vietnam (EVN)’s assertion that the price hike only has inconsiderable impacts.
Imposing the increase at this time is quite understandable as the consumer price index has just dropped, but it is unreasonable to hike power prices when most businesses are facing difficulties, he says.
“Higher power prices mean firms have to raise their products’ prices, while they have already suffered poor consumption,” says Doanh.
“EVN said the new prices will only cost consumers an additional sum of some tens of thousands of dong, but the problem is prices of other goods will also soar, consequently leading to considerable extra expenses for consumers.”
Meanwhile, Pham Chi Cuong, Chairman of the Vietnam Steel Association, says he has no idea “why EVN chose this time to increase prices.”
“Businesses are struggling to escape the tough spot and the price hike would simply hit them with another burden,” says Cuong.
“Power cost accounts for some 7 percent of the cost of the steel manufacturing sector, so with the new power prices, any business which produces some 40,000 tons of steel a month will incur an overrun expense of VND1.56 billion (US$47,880),” he elaborates.
Similarly, Ho Duc Lam, chairman of the Rang Dong JSC, a plastic manufacturer, said the company will suffer an overrun of VND50 million on its monthly electricity bill.
“With most businesses currently suffering high unsold inventories and poor consumption, the power price hike would simply accelerate their progress to declare bankrupt,” he says.
Power price will go up by 5 percent, or VND65 per kWh, to an average of VND1,369 per kWh, excluding value-added tax starting on July 1.
The surge will yield in an additional sum of VND3.71 trillion (US$178.08 million) in revenues for EVN in the last half of the year, EVN says.
The country’s power monopoly explained prices must be hiked as the prices of coal fueling for power generation and other input costs have all soared.
The added revenues from the increase are expected to deal with the rising coal prices, and part of the losses EVN incurred in the previous years, it says.
“The power price hike in July will not have a huge impact on the public’s life and production,” EVN asserts.
Power price has gone up five times in total since 2009. It started by rising 8.92 percent in 2009 to VND600 – 1,790 a kWh, and 6.8 percent in 2010, to VND600 – 1,890 a kWh. Last year saw two hikes in March (15.3 percent) and December (5 percent), sending the price to VND993 – 2,060 a kWh.
Vietnam, Thailand promote fisheries cooperation
Vietnam and Thailand have agreed to work towards signing of a mutual recognition agreement on control and supervision of quality and hygiene safety of aquatic products.
The agreement was reached during a visit to Thailand by Deputy Minister of Agriculture and Rural Development Vu Van Tam from June 26-30.
Under the agreement, both sides agreed to cooperate in preventing and solving the two countries’ fishing vessels encroaching on each other’s territorial waters, increasing the exchange of information and experience on aquaculture, and the prevention and control of sea product diseases as well as promoting two-way trade of seafood.
They also agreed to boost cooperation in the training of technical workers and managers in the fisheries sector.
They will set up a working group on fisheries cooperation based on a memorandum of understanding on cooperation in agriculture between the two countries’ ministries of agriculture, aimed at implementing bilateral cooperation activities.
Deflation could be negative
An unexpected decline in the consumer price index (CPI) in June will demonstrate that the Government has successfully controlled inflation.
However, economists are also urging the Government to scrutinize the figure, saying that a deflationary period could have negative impacts on the economy if it extends for several months.
The General Statistics Office reported that CPI in June declined by 0.26 percent from the previous month, the first monthly decrease in 38 months. US-based JPMorgan Chase Bank called these statistics "surprisingly positive", suggesting that easing inflation would have two positive effects. Monetary policy might be further loosened to support the weak economy, it said, and lower inflation was likely to improve the balance of trade and stabilize the nation's balance of payments.
But local economists worry that the drop in inflation reflects a downturn in industrial production and demand. Economist Le Dang Doanh attributed June's CPI figures to the sharp reduction in local demand, suggesting that the reduction was therefore not entirely good news, especially when many local producers were burdened with high inventories and experiencing stagnant production.
The economy is indeed facing major challenges. According to the GSO, up to 70 percent of the country's businesses reported losses in the first half of the year and nearly 22,000 firms went bankrupt. National GDP also grew by only 4.5 percent during the period, well below the pace of recent years. The inventory index of many products surged sharply while consumption continued to decline.
However, GSO director Do Thuc noted that June was only the first month to see a reduction in CPI, too early to affirm that the economy in a deflationary trend.
"We have to base such a judgment on CPI statistics of six consecutive months," Thuc said.
He noted that the health of the economy showed signs of improvement in other areas during the past month. Industrial production grew only 4 percent in the first quarter but surged by 8 percent in June, compared to the same period a year earlier. The inventory index, despite remaining high, also fell compared with the previous months.
A CPI decline in June did not mean the economy was facing deflation, agreed the former director of the National Centre for Economic and Social Information and Forecast, Le Dinh An. A reduction in inflation, meanwhile, was expected to help the Government in capping interest rates to support business expansion and to boost the disbursement of official development assistance (ODA) funds.
An urged the Government, however, to keep a close eye on the decline in order to take timely action if needed.
So far, the Government has applied policies aimed at boosting the economy by easing credit and giving tax incentives to production and consumption.
Former Minister of Trade and Investment Tran Xuan Gia urged that policies be kept moderate and flexible to avoid a return of the high inflation of 2008-09 that continued at a brisk pace into last year.
Gia said that the CPI decline in June could be a short-term result and high inflation could recur at any time. He therefore cautioned the Government against further loosing of monetary policies at the end of the year.
Anh argued, however, that looser monetary policies were necessary to boost production and consumption, but should be targeted to the agricultural, manufacturing and processing industries, which generate many jobs, and to exporters.
The GSO has forecast that CPI would be remain at low levels over the next few months but increase at year's end to achieve a year-on-year rate of 6 percent as against the Government target for the year of 7-8 percent.
SMEs to create 4 million new jobs by 2015
Small and medium sized enterprises (SMEs) are expected to generate between 3.5 and 4 million jobs during the 2011-2015 period.
The target was announced by the Business Development Department at the Ministry of Planning and Investment, during a recent seminar on the development plan for SMEs until 2015, held in the Mekong Delta city of Can Tho.
Under the plan, by 2015, around 350,000 new small and medium sized enterprises will have been set up and between 8-10 percent of them will involve in exports.
The level of investment injected into the economy by SMEs will account for 40 percent of total social investment.
To reach these targets, the seminar put forward various measures, including completing the legal framework; improving access to finance and credit; using capital effectively; upgrading outdated technologies; developing human resources and promoting trade.
From 2006 to 2010, more than 320,000 SMEs were set up across the country, generating 2.7 million jobs.
Access to EU market to become easier
Under the new Partnership and Cooperation Agreement (PCA), Vietnamese consumers will have access to EU goods at reasonable prices as tax lines decrease to zero percent.
A press briefing, held in Hanoi on June 29, officially announced the signing of the PCA between Vietnam and the European Union (EU) and the start of negotiations for a bilateral Free Trade Agreement (FTA).
In her speech at the signing ceremony, Catherine Ashton, High Representative of the European Union for Foreign Affairs and Security Policy said the EU pledges to strengthen far-reaching and mutually beneficial relations with Vietnam, which she described as a responsible partner in the international arena, a focal point of ASEAN and a dynamic economy.
She commented that the signing of the PCA will promote bilateral relations to a higher level and the agreement will soon be supplemented by an ambitious bilateral FTA between Vietnam and the EU.
These agreements will enable both parties to expand development and cooperation in economics, trade, education and training, science and technology, in addition to agriculture, health care and tourism.
Shared benefits will be restricted to strict bilateral principles and strong global governing institutions.
The new partnership will also help boost bilateral cooperation with Vietnam at regional and international forums and will bring international solutions to global challenges such as climate change; natural disasters; energy security; the production of weapons of mass destruction; terrorism and organised crime.
The EU expects that the investment and trade principles stipulated in the PCA will be tweaked by the FTA that will, according to Mrs. Ashton, bring bilateral trade and investment to a new height.
State figures reveal health of domestic enterprises
A total of 36,195 new enterprises with a registered capital of VND232,577 billion have been established in the first six months of this year, according to the General Statistics Office of Vietnam (GSO).
The new figures represent decreases of 12.5 percent and 3.5 percent in terms of the number of registered businesses and capital value respectively, reported the GSO.
The number of business organisations which ceased operations increased by 5.4 percent against the same period last year. The reasons for their demise is cited as a fall in product consumption, which has forced companies to move into different lines of business.
High interest rates, a sharp fall in public investments, and poor management all contributed to the negative impact on domestic enterprises.
Local businesses now hope that the State and ministries will create a favorable playing field so that they can access capital and improve the quality of human resources. They asked for government support in seeking outlets for products, renovating technology, improving the legal climate, and dealing with disputes and tax issues.
Sea travelers to Vietnam increase sharply
The number of foreign tourists traveling to Vietnam by sea in the first six months of 2012 increased by 46.7 percent compared to the same period last year, according to the General Statistics Office (GSO).
In the meantime, GSO says, 2.8 million foreigners arrived to the country by air, up 14.2 percent against 2011.
China topped the list with 682,000 tourists, accounting for 22.3 percent of the total foreign visitors to Vietnam in the first five months.
The Republic of Korea saw the sharpest year-on-year increase in the number of visitors to Vietnam with 41.3 percent, followed by Thailand with 28.6 percent.
However, the total number of international visitors to the country in June hit only 417,000, down 8.6 percent compared to May and 28.6 percent against June 2011.
The Vietnamese tourism sector aims to welcome 6.5 million foreign visitors in 2012.
Budapest plays host to ‘Vietnam Days’
Hungarians will gain an insight into Vietnamese traditions, culture and cuisine at an event that showcases the best of Vietnam in the country’s capital, Budapest, between June 28 and 30.
‘Vietnam Days’ is part of an annual programme initiated by the Budapest authorities in 2005, which allocates participating countries three days to introduce themselves to the city’s residents at Nagycsarnok market – the largest in the capital.
This is the first time Vietnam has taken part in the event, in collaboration with the Hungary-Vietnam Friendship Association, who are sponsoring Vietnam’s attendance. The group, which has been established for 20 years, enjoys around 350 members, including Hungarian war veterans.
During the event, Vietnam will showcase handicrafts and souvenirs, timber products, popular food dishes and natural medicines and treatments that are used throughout the country.
In addition, a photograph exhibition, organised by Hungarian photographers showing images of their visits to Vietnam, is expected to promote Vietnam’s cultural and natural heritages to international audiences.
Hanoi apartment market sees Q2 growth
The Hanoi real estate market shows signs of improvement in the second quarter of this year, CB Richard Ellis Vietnam Ltd Company (CBRE Vietnam) has said.
In the condominium-for-sale sector, the quarter welcomes 1,700 newly launched units, a slight increase in the 1,100 units launched in the first quarter.
Supply growth was mostly attributed to improved market sentiment following a series of interest rate cuts from 14 percent to 9 percent over just three months, Richard Leech, CBRE Vietnam's executive director, said.
Primary prices however were low, about US$1,500 or less per square metre.
In an attempt to attract buyers without resorting to discounts, a number of developers were offering to sell bare-shell or basic options for 30 percent less than the initial asking price, he said.
This had expanded the potential client pool to include those with lower budgets. Another strategy has been worked out to offer preferential mortgage lending rates, which has been made possible by recent rate cuts. The subsidised mortgage rate, offered until the unit's handover, can be as low as 6 percent-7 percent per annum compared to the market rate of 15 percent.
On the secondary market, asking prices saw the largest quarter-on-quarter drop since its straight fall from the same period in 2011. Compared to the residential market downturn in 2008, the 2011-12 crisis seemed to be worse in terms of both length and magnitude, Leech said.
That said, buyer interest seemed to be back, with an increasing number of enquiries in the first half of this year, he added.
Real estate becomes more attractive when interest rates decline. Notably, the mortgage lending rate is now back to the pre-crisis level in 2010 (15 percent) from its peak in mid-2011 (23 percent).
However, it was by no means certain the market will pick up anytime soon as the future direction of the economy remained unclear. Developers should remain vigilant, Leech said.
Banks ordered to limit ATM fees
Account holders complained, and the State Bank of Vietnam (SBV) listened.
The central bank has ordered financial institutions to stop charging their customers for withdrawing money from ATMs. It also instructed banks to keep other fees constant for 2012 and publish fee tables at ATMs.
The directive followed complaints that customers had to pay to withdraw money from their own banks’ machines. Typically, cardholders only had to pay for interbank transactions, such as using ATMs of banks where they didn’t have accounts.
Other clients protested that some banks had doubled the cost, to VND3,300, to check balances, transfer funds, or print statements, sometimes without notice. Other costs have gone up, too.
This month, for instance, Techcombank started charging VND5,940 for interbank transactions, up from VND3,300.
SBV reminded local banks to adhere strictly to its regulations and those of the Vietnam Bank Card Association (VBCA).
The central bank said also that it is working with the association to develop a reasonable roadmap to collect ATM fees, which will be publicly announced to cardholders.
Standard Chartered offers 5% cash back
Standard Chartered Bank Viet Nam Ltd has teamed up with Parkson Shopping Centre (Parkson) to offer customers 5 per cent-cash back on each completed transaction at a Parkson shopping centre.
The programme, which was launched yesterday and will run until the end of this month, will apply to all Standard Chartered cardholders.
Dung Quat exports biofuel to Manila
PetroVietnam Central Biofuels Joint Stock Company (PCB) shipped 4,300cu.m of ethanol products from Dung Quat Oil Refinery in the central province of Quang Ngai to the Philippines this week.
The PCB plant was completed in March 2012 and uses raw sliced cassava to produce ethanol.
Its output is 100,000cu.m a year, of which 5,000cu.m, or 5 per cent, is for the domestic market, while 95 per cent is exported, mainly to the Philippines. Ethanol is used to produce the biofuel E5, which is used in internal combustion engines in motorcycles and cars.-
Marriott hotel to increase investment
JW Marriott Ha Noi Hotel has increased its total investment in the country to US$168.2 million, double its initial estimate in 2007.
The Bitexco Group, the project's investor, said the increased capital was necessary because of the global economic downturn and economic difficulties in Viet Nam.
The five-star hotel, will be managed by the US Marriott Group.
Cash-flow problems push back dividends
Various listed companies have continued to delay paying scheduled dividends, with many blaming inadequate cash flows and some even postponing payouts several times.
Among the companies lacking funds to make dividend payments are PVC Petro Capital & Infrastructure Investment (PTL), An Phu Irradiation (APC), Song Da Someco (MEC), VICEM Gypsum and Cement (TXM), construction company Song Da No 7 (SD7), Mechanical Contruction & Foodstuff (MCF), and Construction Materials Trading (CNT), reports ttvn.vn.
Five of these companies – PTL, TXM, SD7, MCF and CTN – have delayed their payment dates more than once.
Song Da No 7 (SD7) and APC are short of working capital (short-term debts have exceeded short-term assets), making it impossible for them to carry out plans to pay cash dividends of 16 per cent and 10 per cent, respectively.
By the end of March, SD7's short-term debts exceeded short-term assets by VND154 billion (US$7.3 million), while APC's shortfall was VND7.6 billion ($362,000).
PTL, TXM and MCF have all blamed the delays on late payments from their business partners.
Steelmaker Hoa Phat Group (HPG), one of the 10 leading companies on the HCM City Stock Exchange by market capitalisation, has become the latest to announce that it is putting off payment of its dividend on 2011 profits to the end of this year.
HPG initially planned to pay this month in the form of additional shares a 20-per-cent dividend on last year's profits. While cash flow problems are therefore not the reason for the delay, HPG said they did not want additional shares diluting the company's share values during the current bleak period on the market. If the company had proceeded with the payout, nearly 70 million new HPG shares would have begun trading on the HCM City exchange.
HPG remains in stable financial condition. At the end of the first quarter, it had nearly VND720 billion ($34.3 million) in cash and cash equivalents on hand.
Shares slump as first-half growth data disappoints
The VN-Index concluded last week down 0.4 per cent from the previous Friday's close, reaching 422.37 points on the strength of gains late in the week.
The value of trades on the HCM City Stock Exchange averaged around VND852.3 billion (US$40.5 million) per session, slightly higher than in the previous week, while the daily volume of trades averaged 51.2 million shares.
The VN30 Index, tracking the southern bourse's leading stocks, lost 0.5 per cent during the week to close on Friday at just 497.73 points.
On the Ha Noi Stock Exchange, the HNX-Index also retreated by 1 per cent to 71.07 points. Value averaged a meagre VND353.6 billion ($16.8 million) per day on a volume of 37.2 million shares, some 4 per cent below the previous week.
What cash flows there were last week tended to return to rubber, real estate and mining stocks. Subsidiaries and affiliates of engineering firm Lilama and construction firms Song Da and Vinaconex all sank notably amid mixed trading in blue chips. Investors continued to neglect bank shares.
Friday saw the release of national GDP figures for the first six months of the year, showing economic growth at a 4.38-per-cent pace, against global GDP growth predicted to fall this year by 3.5-3.6 per cent.
"A number of banks worldwide are facing lower credit ratings, while GDP growth continues to disappoint investors," commented FPT Securities Co analyst Le Thi Bich Hang.
Although the domestic GDP increase, it was still lower than expected, she noted. In addition, the Performance of Manufacturing Index (PMI) was below 50, showing that the manufacturing sector still faced great challenges.
"The economic picture won't be positive for listed companies to publish profitable business results," Hang said. "Therefore, there is little expectation for a significant recovery."
The horizontal trendline formed at the end of May was strongly controlling the movements of the VN-Index between 415-435 points, she added, a situation that would likely continue this week.
Electricity prices to increase 5 per cent
Electricity will be sold at an average price of 1,369 dong (6 US cents) per kWh from tomorrow, up 65 dong per kWh or 5 per cent over the current price, VAT not included.
This is in accordance with the Ministry of Industry and Trade's Circular No 17/2012/TT-BTC issued yesterday.
Prices of electricity for poor and low-income households will remain unchanged at 993 dong per kWh for levels up to 50kWh.
Electricity of Viet Nam said the price adjustment would not have a great impact on production and business activities or people's living standards. It estimated that a household using an average 100kWh per month would have to pay about VND4,200 more every month. Additional costs will be VND8,600 for those using 150kWh per month, VND14,050 for 200kWh, VND26,050 for 300kWh and VND38,950 for 400kWh.
EVN was expected to gain an additional turnover of VND3.71 trillion ($178.37 million) from electricity sales thanks to the price increase, as it would reach a commercial electricity output of 56.8 billion kWh during the remainder of this year, the ministry said.
The extra revenue would be used to compensate for a rise in the price of coal, which was used for electricity production, and several other costs, it said.
Easier credit reignites dormant market
The domestic real estate market has shown signs of light recovery after the Government outlined solutions to stimulate sluggish activity.
Nguyen Tran Nam, deputy minister of Construction, said the central bank's recent decision to cut the ceiling deposit interest rate to 9 per cent from 11 would counteract stagnation.
The move would further assist people buying houses at reasonable prices. Instead of depositing idle money in banks, people have started seeking property projects in which to invest. As a result, developers have rushed to make their products available on the domestic market.
In addition, a series of solutions were approved by the Government to help property developers that include slashing 50 per cent off the annual land tax for 2012, payable by organisations and businesses leasing land from the State.
With such loose credit policies, many developers have started selling their products by offering preferential finance support.
For instance, investors in projects such as Golden Land in Nguyen Trai, Golden Palace in Me Tri or Nam Do Complex in Truong Dinh are offering preferential support packages on interest rates.
The Golden Land investor has also committed to supporting buyers with a 100 per cent banking interest rate while those of the Golden Palace cut retail prices to VND27 million (US$1,285) per sq.m from $2,200 while offering buyers 85 per cent of total housing value with an interest rate of 16 per cent per year.
Late last week, COMA 6 started to put nearly 600 apartments of its Dream Town Project on the market at a price of VND17.8 million ($847) per sq.m. On this occasion, purchasers will be lent 70 per cent of apartment values at an interest rate of 12 per cent per year, which they could pay by instalment within 10 years.
Also this month, Gamuda city project launched its Phase 1 with 72 units of the Gamuda Gardens-the first residential component sold at a price of $2,700 per sq.m.
Currently, the platform level had been completed for Phase 1 and Phase 2, said Engineer Lim Phaik Leng.
He added that construction strictly followed safety and quality requirements.
Cheong Ho Kuan, general director of Gamuda Land Viet Nam, said his company committed to making a long-term investment in the country despite the property market going down. He noted that current challenges would do little to harm the project due to backing from their mother company in Malaysia.
Last week, Ha Noi Construction JSC (Hanco9) worked with Knight Frank Viet Nam to sell 324 apartments of the Berriver Long Bien project with prices ranging from VND23.5 million to VND26.5 million ($1,120-1,261) per sq.m.
Huynh Minh Thanh, deputy general director of Hanco 9, said his company co-operated with Seabank to finance buyers with an interest rate of 11.99 per cent per year for the first three years.
Racing against time, commercial banks have started offering attractive lending interest rates to stimulate the demand of loans from those who want to buy houses. BIDV has offered a shock lending interest rate of 10 per cent per year for some housing projects while the VIB rate is 14.2 per cent and Vietcombank's, 13 per cent.
Avaya opens Viet Nam representative office
Avaya, a global provider of business communications and collaboration systems and services, opened its representative office in HCM City yesterday.
The investment follows its continued growth in Viet Nam and the Asia-Pacific region.
"Viet Nam has provided us with the opportunity to work in an environment that is competitive, diverse and rapidly growing," François Lançon, president of Avaya Asia-Pacific, said at the launch.
VietJet Air sends pilots to France, United States
Private carrier VietJet Air has sent its first batch of newly recruited pilots to Airbus centres in France and the US to undergo comprehensive training courses.
The carrier is currently expanding its flight crew in line with its strategy to increase its fleet to 15 aircraft by 2015.
All the newly recruited pilots, who are already trained and experienced, are still required to attend training courses conducted by Airbus, which produces the aircraft that comprise VietJetAir's current fleet.-
Electronic component factory to be built
South Korean Bujeon Electronics has planned to build a 6-ha electronics component factory in the northern province of Thai Nguyen.
The US$10 million factory will also include accommodation for employees.
The construction work begin in October this year and become operational by the end of next year. The Korean Bujeon Electronics has already an electronics component factory in Que Vo IZ in northern Bac Ninh Province.-
RoK company begins work on steel mill
The ‘POSCO Specialty Steel', company of the Republic of Korea, began the construction of its new steel mill in the southern coastal province of Ba Ria-Vung Tau on Wednesday.
The steel mill is located in Phu My II Industrial Zone in the Tan Thanh district of Ba Ria-Vung Tau Province on a site of 50ha and with an investment capital of US$594 million.
Its annual production capacity is estimated to be around 1 million tonnes. The project is due to completed by July 2014.
Suburban development to begin construction
The HCM City-based electric cable producer Tan Cuong Thanh and Japan's CFS have signed an agreement on construction of an urban park area in Da Nang.
Construction will begin in August on the park, named Thien Park, which will cover 150ha northwest of downtown Da Nang.
The satellite urban park will, within the next five years, have 1,311 plots of land and 400 villas along Cu De River and Da Nang Bay.
It will be the first ever model of a satellite city in Da Nang.
Group to develop $153m luxury resort
Kien Giang People's Committee has granted an investment licence to Nam Cuong Group to invest in a 322ha resort on Phu Quoc Island with a total investment of VND3.2 trillion (US$153 million) between 2012 and 2018.
The Phu Quoc-Nam Cuong luxury resort will include hotels, amusement parks, and high-end villas.
To carry out the project, Nam Cuong Group has signed a co-operative agreement with the Bank for Development and Investment of Viet Nam to finance and provide banking services for the project.
Property transfers now require tax codes
Starting from July 1, any individuals who want to transfer their property must have personal tax code to perform personal income tax.
This follows the Ministry of Finance Circular 80/2012/ TT-BTC on Tax Administration and Tax Registration.
To create favourable condition to taxpayers, the General Department of Taxation has instructed local tax departments to strictly implement procedures and grant tax registration certificates for taxpayers.
Phuc Tho to become eco-urban centre
Ha Noi People's Committee chairman Nguyen The Thao has approved a masterplan of Phuc Tho Township to turn it into an eco-urban centre by 2030.
Located 40km west of Ha Noi, Phuc Tho eco-urban area will cover 870ha, of which 400ha is for urban development.
It is expected the population of Phuc Tho will reach 33,000 in 2030 and 41,000 in 2050.
Japan design firms share expertise
Leading design companies from Japan visited Viet Nam developers this week, sharing ideas during a seminar and networking event held yesterday in HCM City.
The Vietnamese property market has an increasingly strong position in Southeast Asia and many opportunities for international developers and business partners, according to the Japanese developers.
The developers, Nomura Real Estate Development, Marubeni Corporation and Mori Building, are three of the top design companies in Japan. Marubeni established a joint venture with the Sun Wah Group to develop Sun Wah Tower in HCM City.
At the seminar, Mark Townsend, managing director of CBRE Viet Nam, gave insights into the Vietnamese property market.
In the office market in HCM City, the second quarter of this year saw demand for Grade A buildings slide to less than half of that witnessed in the previous quarter, he said.
Grade B absorption was also notably down, and the two sectors combined contributed just over 15,000sq.m of net absorption in the second quarter compared to almost 30,000sq.m in the first quarter.
Japan's third largest architectural design Kume Design Asia also delivered a presentation on architecture and design at the seminar.
In addition, international design company GARDE organised a seminar for the first time in Viet Nam featuring insights into the property market in the country.
The seminar was part of GARDE's annual Asian Research Tour, which GARDE organises each year for Japanese businesses and clients to exchange ideas with regional developers and investigate investment opportunities.
Headquartered in Tokyo, GARDE provides consulting services and interior design for a wide variety of projects ranging from retail, department stores and shopping malls, to residential, hospitality, food and beverage projects and corporate interiors.
Latin American trade talks begin
The first-ever Vietnamese-Latin American forum on trade and investment will be held in the capital on July 5-6, the Foreign Ministry has announced.
The event, with the theme of "Viet Nam-Latin America: Trade and Investment Partners for Development", aimed to enhance friendship and understanding among locals from either side, the ministry said.
It would be a valuable chance for authorities as well as Vietnamese and Latin American business communities to discuss co-operation potential, seek effective measures to solve challenges and draw up a new page in trade and investment ties, it added.
During a press conference on Thursday, Deputy Foreign Minister Nguyen Phuong Nga said Viet Nam always paid great attention to developing comprehensive co-operation with Latin American countries.
She described the forum as a good opportunity for potential partners to meet, exchange information and seek new co-operation opportunities.
To date, 16 Latin American countries have confirmed they would be sending delegations to the event while more than 200 Vietnamese and Latin American businesses have registered to participate.
As scheduled, Prime Minister Nguyen Tan Dung will attend the event and deliver an opening speech.
A general discussion and three seminars will be held after the opening session, focusing on business and investment, the environment, transportation, logistics, telecommunications, agriculture and energy.
With a GDP of more than US$5.5 trillion and a population of 580 million, Latin America represents great investment opportunities for Vietnamese companies.
Two-way trade between Viet Nam and Latin America has increased significantly over past years and is now 17 times higher than it was 10 years ago, from $300 million in 2000 to $5.1 billion in 2011.
Viet Nam's main exports to Latin American countries include rice, textiles, seafood, rubber and coffee. It imports animal feed, raw materials for textiles and garments, steel, chemicals and medicine.
To date, Vietnamese firms have pledged to invest $7 billion in the region while Latin American countries plan to invest $3 billion in Viet Nam.
Farmers benefit on dragon fruit sales
Blue dragon fruit farmers in the Cuu Long (Mekong) Delta Province of Long An are able to make a profit of about VND200 million (US$9,500) per hectare every year, a local leader has said.
Nguyen Van Thinh, deputy chairman of the province's Chau Thanh District, said his district has around 1,200ha under the fruit.
The fruit is harvested three months after planting, and farmers here grow three crops a year. The yield per crop is 22,000-25,000kg per ha.
The wholesale price of the fruit has been VND10,000-11,000 per kilogramme after the recent harvest, though it rises to VND15,000-16,000 during the off-season.
Thinh said the district planned to expand the area under the fruit to 1,500ha by 2015, including an area exclusively for growing it to the US and EU quality standards.
In the district, blue dragon fruits grown on 30ha meet GlobalGAP standards and those grown on another 60ha meet VietGAP standards.
Co.opMart debuts new logo
To mark its 16 years of establishment and development, the HCMC-based supermarket chain Co.opMart has unveiled a new logo alongside a promise to improve service quality.
Co.opMart has spent two years on the change with the help from brand consulting firm Landor Associates and Left Brain Connectors Co. Ltd, said Nguyen Ngoc Hoa, board chairman of Saigon Co.op, which owns the Co.opMart store chain.
The retailer also makes changes to shopping space, staff uniforms, packaging, and employee cards, and adds more customer utility as well as improves service quality by training its staff.
“Changing the logo and a plan to expand our network and improve our service quality are seen as the first efforts to fulfill our commitments,” said Hoa.
The plan will be deployed within three years. By then, Co.opMart will have 100 outlets nationwide.
It will first launch the new logo at supermarkets, starting from those in HCMC.
Given tough competition in the retail sector, local retailers must renew themselves to better serve customers, Hoa reckoned. Co.opMart is putting greater effort to change itself in an effort to better compete with foreign rivals.
After the new logo launch, Co.opMart will open two more outlets in HCMC and Hai Phong. Covering 2,500 square meters and having total investment capital of VND60 billion, Co.opMart Hoa Binh was opened on Thursday in HCMC’s Tan Phu District while the 10,000-square meter outlet in the northern port city of Hai Phong with investment capital of VND100 billion will start service on Friday.
Coffee exports to Indonesia shoot up
Coffee exports to Indonesia in the first six months have reached over 50,000 tons, showing an eight-fold year-on-year increase, said Do Ha Nam, deputy head of Vietnam Coffee and Cocoa Association (Vicofa).
The figure reached the all-time high level since Vietnam has begun exporting coffee to Indonesia.
Due to crop failures and thus poor yield, Indonesia must import a larger volume of Vietnamese coffee in recent times. Moreover, the buyer wants to boost processed coffee exports so its coffee processing plants import more coffee beans from Vietnam.
“Indonesia is one of the biggest coffee consumers in the world. With 200 million people, more than half of the country’s coffee output is for domestic consumption, prompting an upsurge in coffee imports in the year to date with an aim to meet local demand,” said Nam.
It is expected that Indonesia’s demand for coffee imports will continue rising in the coming time. Local coffee exporters must take full advantage of this opportunity to boost export to this market.
Vietnam exported 190,000 tons of coffee worth US$397 million in June, taking the total volume to 1.1 million tons worth US$2.3 billion in the six-month period, up 26.5% in volume and 20.4% in value year-on-year, according to the Ministry of Agriculture and Rural Development.
The export price of coffee averaged out at around US$2,090 a ton in January-May, down US$94 a ton from a year earlier.
BAT donates over 200,000 seedlings for Dong Nai
The British American Tobacco-Vinataba Joint Venture Co. Ltd. on Thursday donated 206,000 seedlings worth over VND140 million to organizations and individuals for reforestation in the southern province of Dong Nai.
According to the company, this was part of the afforestation program launched by BAT-Vinataba Joint Venture for this year with a total number of 930,000 seedlings like eucalyptus, acacia, khaya, hopea, shorea and some others.
After 11 years of executing the program, the joint venture has supplied nearly 25 million seedlings worth over VND8 billion for afforestation in Cao Bang, Lang Son, Bac Kan, and Gia Lai provinces.
Vietnam sponsors economic institute in Laos
Vietnam has provided VND78.78 billion as a grant for Laos to build the Institute of Economics and Finance Dongkhamxang in Vientiane.
Lao Deputy Prime Minister Somsavat Lengsavad and Vietnamese Finance Minister Vuong Dinh Hue and Lao Finance Minister Phuphet Khamphunvong pressed the button to kick off the second phase of this project on Tuesday.
According to the Ministry of Finance, the Institute of Economics and Finance Dongkhamxang will become a national-level economic and financial training center for Laos. After 18 months of the first phase, the project has developed training and accommodation facilities for thousands of employees, lecturers and students.
After completion, the institute will meet the training demand of 3,000-4,000 finance students in the 2010-2020 period.
The project was kicked off in 2007 under the cooperation agreement on economy, culture, science and technology in the 2006-2010 period between Vietnam and Laos.
Over 36,000 new businesses set up in first half
A total of 36,195 new businesses with total registered capital of VND232.5 billion were set up in the first half of the year, a year-on-year decreases of 12.5% in number of businesses and 3.5% reduction in capital, said the General Statistics Office (GSO).
Also in the reviewed period, 4,105 businesses declared dissolved and almost 22,220 others ceased operation.
The GSO said the results were attributable to lost profits, lack of capital and difficulties in business and production locations, as well as a lack of sales of final products.
As a result, many businesses had to change their industries or merge with others.
Businesses said they are facing difficulties in managing loans, high transport costs and unstable power supply affecting production.
At present, up to 31.7% of businesses plan to narrow production and business activities while 10% have to reduce capital investment, 13% have to cut their labour force, 25.5% of them are facing an overall reduction in turnover and 27.9% are facing lower profits.
They said they hope that the State, ministries and departments will assist them with loan interest and accessing loans more easily. They said they need measures to assist product sales at home and abroad, would benefit from improved governance, higher quality human resources and more effective means of dispute resolution.