BUSINESS IN BRIEF 27/4

Read the original news 

VietnamNet English - 25 month(s) ago 9 readings

Electricity supply sufficient for summer



The Ministry of Industry and Trade (MoIT) said that the power supply will be sufficient for this summer due to high water levels and more power projects to be put into operation.

The water levels at Hoa Binh Hydropower plant reached 106 metres, much higher than previous years. The current water levels at Son La Hydropower have risen to 202 metres.

According to statistics from Vietnam Electricity (EVN), in early 2012, it began operating 2 turbines, with a total capacity of 176.5MW. The 500 kV Son La - Hiep Hoa power grid along with other new power project that joined the power grid in March have provided sufficient power for northern provinces.

EVN has plans to put the turbine 5 in Son La Hydropower Plant into operation, complete the building of turbine 2 in Dong Nai 4 Plant and get turbine 2 in Kanak Plant online. Repair and upgrade projects that would increase the power generation capacity of several power stations, such as Hoa Binh - Xuan Mai, and the waterproof treatment at Song Tranh 2 Hydrypower are also gearing up.

To ensure a stable power supply, MIT ordered EVN to co-operate with PVN and Vinacomin to map out a clear schedule to provide electricity for summer. Reservoirs in central region must reach sufficient water levels by June 1.

Addressing the issue of power supply for Hanoi, EVN asked National Transmission Corporation and EVN Hanoi to speed up the progress of both high and low-voltage power projects. Currently, it has replaced three 100kV transformers and is upgrading 110 and 220 kV power grids such as Van Dien-Tia, Ha Dong-Thanh Cong.

In order to receive the 10.6 billion kWh, the total capacity of transformers in Hanoi must reached at least 5,000 MVA. This year Hanoi plans to invest VND1,7 trillion (USD81,5 billion) to build, upgrade and put into operation more power grids.

The most challenging issue is the progress of power projects in Hanoi, many of which are far behind the schedule. Up until now, only one out of six 220kV transformers and four out of eleven 110kV transformer are completed.

Hungry capital to eat away at banks’ NPLs

If real estate continues to be frozen and there are no signs for recovery by the end of 2012, NPLs from this area could make up 60 per cent of all banking system’s NPLs”

Lower-cost capital can now eat away at the banking bad debt problem. With tight monetary policies and restricting loaning, non-performing loans (NPL) have grown, seriously affecting banks’ capital flows. State Bank Governor Nguyen Van Binh said that the banking system’s bad debts this year had risen from 3.2 per cent recorded by the end of 2011 to 3.6 per cent.

“For specific credit institutions, this ratio is even higher,” said Binh. However, with the State Bank’s recent decisions to reduce the ceiling deposit interest rate from 14 to 13 per cent on March 13, and to 12 per cent on April 11, together with the loosened credit for real estate firms stipulated in Document No 2056/NHNN-CSTT, help is on the way for banks.

Le Quang Trung, deputy director of Vietnam International Bank (VIB), said firms’ greater access to capital would allow them to improve their operations and repay loans. “Bad debts will be stable or lower in the second quarter of this year,” said Trung.

Vietcombank Securities analyst Quach Thuy Linh noted that when deposit rates drop, market capital would flow into other investment channels such as real estate and the stock market to warm up these markets, and thus reduce bad debts.

Trinh Quang Anh, head of Maritime Bank’s economic research, said credit institutions’ real estate loans amounted to VND200 trillion ($9.6 billion), in which loans for developing construction projects and real estate speculation made up 90 per cent.

“If real estate continues to be frozen and there are no signs of a recovery by the end of 2012, NPLs from this area could make up 60 per cent of all banking system NPLs,” said Anh. Besides loosening credit to real estate, the State Bank recently required credit institutions to actively restructure loans for struggling enterprises and extend loan payment periods.

“With such solutions, we hope that bad debts will be controlled,” said governor Binh. However, banking system credit growth was still capped at 15-17 per cent. The State Bank also admitted sophisticated mobilisation cap violations still existed. Despite the State Bank’s moves, analysts did not expect the credit question to be addressed over night.

“Banks themselves do not dare to enhance lending. If we do not select borrowers carefully, bad debts will continue to rise as enterprises are experiencing many difficulties,” said Trinh Van Tuan, general director of Orient Commercial Bank.

US favours Vietnamese produce

The US market has been importing increasing volumes of Vietnamese fresh fruit and vegetables, according to the Ministry of Industry and Trade's Export-Import Department.

The department reported that US consumers preferred fresh fruit and vegetables to canned goods. Since the start of this year, 36 varieties of fruit and vegetables have been exported to the US from Viet Nam, with a total export turnover US$1.1 million.

According to Vietnamese Minister Counsellor to the US Dao Tran Nhan, US consumers enjoy lychees, mangosteens and dragon fruit.

They even liked sweet potatoes, ginger and garlic, but dragon fruit remained the most popular, Nhan said.

In the first two months of this year, Viet Nam earned $624,000 from dragon fruit, a year-on-year increase of 171 per cent.

Nhan said that this was a good chance for Vietnamese companies, and advised Vietnamese companies to meet the strict US standards on hygiene safety. In addition, managers and producers must have a long-term strategy to support production in order to effectively export fruit and vegetables to the US.

Dragon fruit farmers in Binh Thuan Province are benefiting from a new initiative that makes value added products from dragon fruit that do not meet export criteria.

The Binh Thuan Department of Science and Technology is working with the Rong Xanh Limited Company to make refreshment products like bottled beverages from dragon fruit.

La Mai Han Trang, director of the company, said it produced more than 25,000 refreshment products of various kinds every day, all of which were made with dragon fruit that were of good quality but fell short of specific export standards.

The packaging for these products, including bags and bottles, was imported from South Korea. They could be recycled and were environmentally friendly, Trang said.

"We aim to introduce products to the market for the first time," she said.

Two of these products had been exported to Cambodia and Laos and were also on sale at many supermarkets at home, including Citimart and Satra Sai Gon, she added.

"The company will continue to research and diversify the products made from dragon fruits from Binh Thuan Province, making them more competitive. We are also looking to expand foreign markets for these products," Trang said.

Farmers benefit from the new venture because they are usually forced to sell dragon fruit that do not meet export criteria at lower prices.

Dragon fruit is currently the most prominent product of Binh Thuan Province. The province has a total of nearly 16,500ha under dragon fruit cultivation that yields about 400,000 tonnes of the fruit every year.

However, exports of the fruit via official channels account for just 10-20 per cent of the total output.

Six financial firms put on 'watch list'

The State Securities Commission of Vietnam will inspect six securities companies over doubts that they haven't been following financial safety regulations.

A total of six companies will be under scrutiny from April 23, including Rubber Securities JSC, Vina Securities JSC, Hanoi Securities JSC.

Also on the list are Danang Securities Company, Truong Son Securities Incorporation and Mekong Securities.

According to circular issued by the Ministry of Finance on standard financial practices and measures to handle violations, securities organisations with an available capital ratio of less than 120% will be monitored for up to six months.

If their capital ratio remains at or above 150% for three consecutive months, the monitoring will cease. However, if after six months, the ratio stays under 150%, or if aggregate losses exceed 50% of charter capital, the companies will be suspended from operating.

These companies will have to send financial reports to the State Securities Commission within one week of receiving notice that they have been put on the watch list. The report must contain the reasons for their financial situation and possible solutions.

During the time of probation, the companies will be prohibited from certain activities, such as receiving dividends, giving bonuses for employees, margin trading, extending their networks, or establishing new subsidiaries, real estate speculation.

AIA Vietnam launches new insurance product

AIA (Vietnam) Life Insurance Co. Ltd., or AIA Vietnam, has just launched a new product called An Phuc Thanh Tai, which is described as a “three-in-one” education plan designed for customers who want to accomplish an education plan for their child and, at the same time, protect their whole family against unexpected circumstances in life.

An Phuc Thanh Tai offers a solution with coupons to meet financial needs at each stage of a child’s education plan and financial protection against risks for parents. In addition, this product provides financial protection for the child against risks of accidents and illness.

The most outstanding feature of the new product is that it protects three people, including the father, the mother and the child, against the three risks of death, accident and critical illness under only one policy, the company said in a statement. Besides, it provides three choices for the child’s education plan: Baccalaureat Plan, Bachelor Plan and Master Plan.

Parents aged under 55 years can buy a policy for their children who are from 30 days old to 16 years old.

AIA Vietnam, established in 2000, has expanded strongly over the years and is now serving holders of 300,000 policies across the country.

HCM City names troubled industries

Property, wood processing, mechanical manufacturing, electronics-information technology, apparel-footwear, and chemical-rubber-plastic are the industries currently struggling with difficulties in production and business in HCMC.

As the city-based companies are constantly running into troubles, more enterprises have gone bust or suspended production, said HCMC vice chairwoman Nguyen Thi Hong at the meeting between the municipal government and Deputy Prime Minister Vu Van Ninh on Monday.

Particularly, wood processors are coping with rising input material prices, together with high lending rates and surging labor costs and transport fees. Meanwhile, mechanical manufacturers are facing a harsh competition with foreign rivals, especially those from China.

Nguyen Van Tho, general director of Saigon Industry Corporation (CNS), told the meeting that more than ten affiliates under his company are having problems with capital access. However, the prevalent regulations disallow parent companies to assist their subsidiaries in borrowing capital, he stressed.

Difficult capital mobilization also lays down a burden on plastic enterprises, said the HCMC government. Like other industries, the plastic industry is struggling with a 10-15% higher input cost than late 2011.

Moreover, the environment protection tax applicable since the beginning of this year make plastic bag producers confused as the criteria on taxable products are ambiguous, leading to disagreement about taxation.

Property developers also find capital shortage a headache. Several real estate companies are unable to access bank loans or being imposed sky-high lending rates of 24-25% per annum.

Still, the greatest problem of the property market is the high volume of unsold products, which also affects producers of cement, steel and interior furnishing items, resulting in high rate of unemployment.

To help remove the difficulties for the city-based property firms, the HCMC government suggested that the central bank request commercial lenders to reassess repayment periods, and consider giving out loans to property developers with near-completion projects or those with highly efficient business plans.

Regarding tax policy, the municipal government asked for tax payment extension for small and medium-sized manufacturing enterprises in 2012. The city also sought a 30% corporate tax cut worth some VND768 billion for small and medium enterprises this year.

In addition, to relieve the financial burden for the city firms, the HCMC authority recommended the Government to allow enterprises to pay their tax arrears in installment prior to the year-end.

Enterprises are trying to restrain their product prices to simulate demand, but the recent fuel price hike actually deals a hard blow to them. As fuel prices have surged by a total VND3,000 per liter since the year’s beginning, it is likely that several items would mark up in the coming time.

According to the Vietnam Steel Association (VSA), transport fees make up 3-5% of steel production costs. VSA is evaluating the impact of the fuel price increase to recalculate prices of steel products sold to the market.

Wind power hub planned for City

A proposal to make the Can Gio Biosphere Reserve in HCM City the biggest wind power hub in the south is being drafted for submission to the People's Committee by the Cong Ly Company.

Costing VND10 trillion (US$500 million), the wind-power plant will supply more than 200MW of electricity to the city.

Around 125 turbines made using American technology will be situated along the coast over a length of 10km, with construction taking around four years.

Can Gio is the best place in the south to build wind power plants since it has average winds of 6.5-7m/second, according to To Hoai Dan, general director and chairman of the company.

Besides, it is already linked with the national electricity grid.

Pham Quoc Bao, deputy general director of the HCM City utility, Power Corporation, said by 2015 the city would be using around 200MW of electricity from recycled and renewable sources, or 4-5 per cent of its total needs.

But the city has just one 2MW plant producing power from waste in Go Cat and a 0.1MW solar plant on Thanh An island.

It plans to build a 12MW plant at the Da Phuoc rubbish dump in Binh Chanh District and a 7MW plant at the Dong Thanh rubbish dump in Hoc Mon District.

But since all these would meet only 25 per cent of the target, "Cong Ly company's 200MW wind power plant is a good idea," Bao said.

Phan Minh Tan, director of the city Department of Science and Technology, had a word of caution: "The city approved a tourism project on an area of 600 ha [including the spot Cong Ly company has in mind for the plant]."

Another problem could arise with farmers. Can Gio beach is famous for aquaculture and has 757ha allocated for oyster farming, an area that could double soon.

"Cong Ly company must complete other surveys related to their project, including environmental, … before submitting to the authorities," Le Manh Ha, deputy chairman of the city People's Committee, said.

Fuel price hike to hit struggling business

Businesses already struggling to survive in both domestic and international markets are going to be very hard hit by the second rise in fuel prices in less than two months, economists say.

Dr Nguyen Minh Phong of the Ha Noi Institute for Social and Economic Development Studies told the Tuoi Tre newspaper that the increase in petrol prices would lead to increases in the prices of many goods and services, affecting the consumer price index (CPI).

Given the difficult economic situation, the impact of recent increases in fuel prices would be by no means negligible, he said.

Economist Le Dang Doanh said that the two increases since the beginning of the year had pushed up petrol prices by VND3,000 per litre. This was a heavy burden to businesses because besides the high interest rates, they would have to bear higher material costs.

"They will be unable to stand one day," he said.

In addition, higher input costs would make Vietnamese goods less competitive in the world market, Doanh said.

According to the Ministry of Finance, the latest hike in fuel prices will lead to an increase of about 0.3 per cent in CPI, but several businesspersons say that the hike in fuel prices amid the current economic difficulties is a knock-out punch.

They say many businesses will be forced to stop production and trading activities.

Nguyen Phuc Tien, deputy general director of the Van Thanh Mousse and Foam Company, said fuel accounted for 3 to 5 per cent of production costs. For transportation alone, his company spent about VND1 billion (US$47,600) a month to buy petrol.

With the latest increase in petrol prices, the company would have to pay a lot more money for fuel, he said. However, since purchasing power in the market was very low, the company would find it difficult to increase its selling prices to cover the higher costs, he added.

Nguyen Quang Trung, general director of Fico Tay Ninh Cement JS Company, said the higher fuel prices would have an enormous impact on people and businesses.

Businesses could not keep prices stable when all input costs went up. Consumers would be "victimised" since they had to bear the increase in prices, he said.

As expected, the prices of many kinds of goods and services have increased following the latest increase in fuel prices.

Nguyen Thanh Ha, deputy director of the Thu Duc Wholesale Market, said prices of many kinds of fruits and vegetables had gone up by thousands of dong per kilo.

The prices of goods and services at markets would surely increase in the next few weeks, she said.

Ngo Van Hai, deputy general director of the Citimart chain, told Nguoi Lao Dong newspaper that the supermarket had received announcements about price increases of 5 to 10 per cent from many producers and providers who had not raised their prices after the previous increase in fuel costs.

Nguyen Phuong Thao, director of the Cong Hoa Maximark outlet, said about 20 suppliers planned to raise their prices by 8-10 per cent.

Some travel transport service companies have said they would have to increase their fares corresponding to increases in fuel prices.

Many freight companies have said while they have not completed negotiations with customers about the new transportation prices after last month's fuel price hike, the latest increase will force them to raise transportation costs by about 5 per cent in the next few days.

Taxi firms are finding it difficult to respond to the increase in fuel prices in quick succession.

Ta Long Hy, chairman of the HCM City Taxi Association, said the time lapse between two increases in fuel prices was rather small, so it was difficult for them to follow suit in applying new fares.

However, he said, sooner or later, they would have to make fare adjustments, otherwise they would die.

Banks urged to help ailing firms

The CC of Viet Nam (SBV) on Tuesday asked foreign bank branches and credit institutions to restructure the debt repayment period in accordance with current regulations, in a move to remove obstacles for businesses.

SBV required foreign credit institutions to collaborate with borrowers to review their debt repayment potential in order to assist them in repaying loans. Efforts would be made to allow businesses to repay in accordance with their business cycle, pay-off periods of the projects, loan utilisation plans, and debt repayment capacity of their own customers.

According to current regulations, credit institutions can consider rescheduling repayment periods for borrowers who are unable to repay principal and/or interest on time.

Credit institutions are also allowed to uphold the loan classification of business debts after adjusting repayment periods, if enterprises operate well and show that they have the potential to repay.

The SBV also requested the credit institutions to consider adjusting lending interest rates specified in the loan contracts down to current rates, based on their financial capability and customer policies. This step was especially urged for institutions lending to agriculture and rural development, exports, support industries, small- and medium-enterprises and labour-intensive firms.

Credit institutions were also asked to consider eliminating or reducing payable interest for borrowers who face financial hardship as a result of a loss of assets, in accordance with a decision from 2001.

Besides the requirement to restructure loans, the SBV also expected to further cut lending interest rates to give enterprises increased access to credit as they face severe capital shortages.

Suzuki turns first sod on factory project

Despite the stagnant local auto market, Viet Nam Suzuki Corp., a subsidiary of the Japan Suzuki Motor Corporation Japan, broke ground for an automobile factory in southern Dong Nai Province yesterday.

The new factory, which will be built next to the existing Suzuki motorbike factory in Long Binh Industrial Park in Dong Nai's Bien Hoa City, will make 5,000 auto units per year when it becomes operational in 2013, according to Osamu Suzuki, president and CEO of the Japan Suzuki Motor Corporation.

Suzuki will invest US$13 million in the new factory, which will raise its output to 10,000 units and 20,000 units per year in the following years.

The new investment brings Suzuki's investments in Viet Nam Suzuki Corp to $57.9 million.

With an aim to localise its production lines at the factory by 50 per cent, Suzuki Viet Nam may export auto components to other Suzuki automobile plants in Asia, including those in Thailand, Indonesia, India and Pakistan. Those countries would also export components to Viet Nam, said Osamu.

Le Duong Quang, deputy minister of Industry and Trade, said investments from Japan and Suzuki in Viet Nam indicated Suzuki's and Japanese investors' confidence in Viet Nam's investment environment. Quang said the Vietnamese government had decided that auto manufacturing would be one of the major industries to be developed in the country.

Viet Nam Suzuki Corp began to manufacture motorbikes at Binh Da factory in Dong Nai in 1996.

The company, which employs 600 people, opened its factory in Long Binh Industrial Park in 2006, making 80,000 motorbikes per year.

Kyocera to begin work on manufacturing base

Japanese Kyocera Group has announced the kick off of construction on its manufacturing base in northern Hung Yen Province's Thang Long Industrial Zone 2 in June this year.

The 89,000-sq.m plant is expected to cost US$55 million for the first phase and be completed in August of next year. The plant will produce mobile phones and high-tech electronic components.

It is expected to invest an additional $195 million to expand production to manufacture SMD packages, mobile phones and software.

City expo showcases high-quality products

The "Vietnamese High Quality Products Fair" opened yesterday at the Phu Tho Indoor Stadium in HCM City's District 11.

The fair has 800 booths where 250 domestic businesses are displaying garments and textiles, footwear, handicraft, food and household utensils, electrical goods and other items.

For the first time, a cake festival called "Banh ngon tu gao" (Delicious cake made from rice) will be part of the exhibition, introducing to HCM City people more than 100 kinds of rice-based cakes made by the southern artisans and family-owned establishments.

Vietnam Airlines adds flights for holiday

The national flag carrier Vietnam Airlines plans to add 195 additional flights on domestic routes from April 27 to May 2 to meet the high demand for travel for the upcoming Southern Liberation Day and May Day holidays.

The number of flights to and from central Da Nang City, where the international fireworks festival will take place, will have the highest number of flights, with 77 additional flights on the Ha Noi-Da Nang route, 56 extra flights on the HCM City-Da Nang route and four on the Da Nang-Hai Phong route.

There will also be more flights from Ha Noi and HCM City to major sightseeing and recreational areas like Nha Trang, Phu Quoc, Quang Binh and Hue, as well as 14 additional flights on three international routes, HCM City – Bangkok, HCM City–Hong Kong, and Ha Noi–Siem Reap.

Canada a promising market for Vietnam seafood

Canada is now Vietnam’s ninth largest seafood importer, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

It is also a familiar market for Vietnam’s cuttlefish and octopus products.

In 2011, Vietnam earned US$913,000 from cuttlefish and octopus export to Canada , but the figure was over $440,000 in the first quarter of this year, a surge of 600 percent over the same period last year.

Seafood experts said that the surge will open up more opportunities for Vietnamese cuttlefish and octopus exporters in future.

According to VASEP, Canada is a pleasant and open market for Vietnamese seafood though its orders are smaller than those of the US.

However, Vietnamese cuttlefish and octopus exporters have to compete with many rivals, including China, Thailand, India and Peru. To penetrate the Canadian market, local exporters are advised to study market demand and improve product quality to sharpen their competitive edge.

Exports to South Africa up by 80 pct in Q1

Vietnam’s export turnover to South Africa reached US$133.51 million in the first quarter of this year, increasing by 80 percent compared to the same period last year.

The export value of non-gemstone and precious metals hit US$92.52 million, up by 25 percent against 2011’s first quarter.

According to economic experts, exports in Q1 show a sharp rise in value among many items: electronics and spare parts up 7.18 times to US$15.66 million, cashew nuts up 2.03 times to US$1.61 million, and footwear up 24 percent to US$12.61 million.

However, the group of agricultural products showed a decline of 12 percent compared to Q1 in 2011, only obtaining US$10.02 million. This was caused by a considerable fall in rice prices by 16 percent and rice export volume by 7 percent under critical competition with rice from India and Thailand.

Economic experts said that South Africa is a large, potential market with strong purchasing power, Vietnamese businesses should seek to enter this market more effectively by boosting promotions, displaying products, and offering discounts to attract customers.

Vietnam’s exports to South Africa are expected to continue to rise as this country is forecast to secure a GDP growth rate of 3 percent in 2012, increase investment in infrastructure and reduce unemployment.

BIDV to become commercial joint stock bank

The state-run Bank for Investment and Development of Vietnam, better known as BIDV, will officially become a commercial joint stock bank, operating in the form of a financial-banking group, in May.

This is considered “a comprehensive revolution” in the bank’s reforming process, said the bank.

On April 23, 2012, the State Bank of Vietnam (SBV) issued an 84/GP-NHNN license for the establishment and operation of BIDV commercial joint stock bank.

The commercial Bank for Investment and Development of Vietnam is established on the basis of stock and conversion of the state-run version of the bank.

With this new development, three of the five biggest lenders in Vietnam have been equitized, while only the Bank for Agriculture and Rural Development of Vietnam (Agribank) and Mekong Housing Bank remain 100 percent state-owned.

At present, the 55-year-old lender is completing necessary procedures to establish a parent company, BIDV Financial Co, for conducting ownership functions for managing and investing the state-owned capitals in the subsidiaries under the financial-banking group form.

In related news, as of April 19, the bank was reported to reach a credit growth rate of 4.1 percent from the beginning of the year.

According to statistics released by BIDV, outstanding loans as of April 19 were posted at VND154 trillion ($7.4 billion), while outstanding credit increased by an additional VND11.34 trillion.

Of which, from April 12, the total lending amount was reported at VND9.24 trillion, while outstanding credit increased by an additional VND1.84 trillion, after the central bank lowered the lending rates.

In addition, from May 1 BIDV will take part in the credit package of VND4 trillion for individuals and households to purchase houses in projects funded by BIDV with lending rates of 16 percent per year. The lending period may last for up to 15 years.

BIDV’s IPO, a part of its equitization process was managed by Morgan Stanley via the Ho Chi Minh Stock Exchange on December 28, 2011, succeeded with more than 84.7 million shares sold to the public.

Since the equitization, BIDV has chartered capital of VND23 trillion with a 99-year operation period starting from April 2012 after the new licensing of the central bank.

In December, 2011 credit rating firm Moody’s assessed the equitization plan of BIDV as credit positive, helping the bank improve its capital base and adequacy and bringing positive structural changes while enhancing its financial and management transparency.

The participation of foreign strategic investors will also help the bank retain independent supervision to improve its corporate governance practices and obtain support in terms of risk management and product development, it said.

Under the plan previously approved by the Prime Minister, BIDV will sell a 15-percent stake to foreign strategic investors in 2012, another 3 percent stake through the IPO in the domestic stock market, and then sell 1 percent of preferential shares to the bank’s staff and 3 percent to its labor unions.

The Vietnamese Government will reduce its holding in BIDV from 100 percent to 78 percent after finalizing the transaction, and to 65 percent of stakes by 2015.

In early December 2011, a BIDV spokesperson told a news briefing in Hanoi that the band had gotten the nod from the Government to fix the starting share price at VND18,500 for its forthcoming IPO.

The nation’s second biggest bank by assets will become the third largest State-owned bank to undergo equitization this year, after the Bank for Foreign Trade of Vietnam (Vietcombank) and the Vietnam Bank for Industry and Trade (VietinBank).

Vietnam joins INACRAFT 2012 in Indonesia

The International Handicraft Trade Fair (INACRAFT) 2012 opened in Jakarta Convention Centre in Indonesia on April 25, attracting four Vietnamese businesses.

They include Artex D&T Co. Ltd, Thang Loi International Garment Joint Stock Company, Thien Dieu Company TD Craft & Décor, and Saigon Embroidered Carpets & Handicrafts.

The event is organized by the Association of Exporters and Producers of Indonesian Handicraft (ASEPHI) in co-ordination with Indonesia’s Ministry of Trade and Ministry of Tourism and Creative Economy.

INACRAF 2012 draws the participation of 1,800 enterprises from 40 countries around the world.

Visiting stalls representing ASEAN countries, Indonesian President Susilo Bambang Yudhoyono showed his interest in Vietnam’s woollen carpet products.

The annual fair, which will last until April 30, is scheduled to attract 250,000 visitors. Total contracts signed at the event are estimated to increase sharply compared to just US$8.2 million at the previous event.

Vinashinlines proposes selling ill-fated ship

Vinashinlines, the direct owner of the Hoa Sen (lotus) ship, formerly owned by the beleaguered state-run Vinashin, has recently called on the Ministry of Transport to allow it to put the loss-making ship on sale, as part of its restructuring plan.

Selling the ship helps Vinashinlines, a subsidiary of the Vietnam National Shipping Lines (Vinalines), avoid unnecessary expenses as the ship has long been docked dormant, earning nothing.

The titan US$67-million ship is now still doing nothing at a port in China, failing to attract any lessee, while consuming a huge sum from Vinashinlines’ budget in maintenance and docking costs, its owner lamented.

Worse, the owner still owes wages to dozens of the ship’s crew members, though their contracts have expired.

Purchased from Italy in 2007 by troubled state-owned shipbuilder Vinashin, Hoa Sen ship soon had to go under maintenance in December 2008 after just 40 trips between northern Quang Ninh Province and southern Ho Chi Minh City due to cracks found at the bottom.

The ship’s ownership was then transferred to Vinalines, as part of a government-ordered restructure process at Vinashin, following Vinashin’s failure in clearing a massive debt of VND86.6 trillion ($4.33 billion).

From April 2009, the ship was docked at Cam Ranh Bay in Vietnam’s Khanh Hoa Province until February 2011, when it left for China, and ended up being detained in Korea over a debt dispute in May 2011.

Vinalines had negotiated to get the ship back, but at “an unannounced cost,” a Vinalines’ top official told Tuoi Tre last year.

The titanic ship has since been docked unused in China.

Vietnam joins European Seafood Expo in Brussels

Deputy Minister of Agriculture and Rural Development Vu Van Tam and Vietnamese Ambassador to Belgium Pham Sanh Chau attended the opening ceremony of the 2012 European Seafood Exposition in Brussels, Belgium, on April 24.

At the event, the Vietnamese delegation visited stalls put up by 24 businesses of the Vietnam Association of Seafood Exporters and Producers (VASEP).

Deputy Minister Vu Van Tam highly appreciated the efforts by participating VIetnamese enterprises to promote seafood products, maintain current trading partners and seek new partners to expand their markets.

The delegation also attended a conference on food for tra fish, one of Vietnam’s key exports. A cooperation agreement between Vietnam and Belgium was signed the same day to support VASEP in developing the tra fish export market.

Laos, Vietnam strengthen state auditing cooperation

A high-ranking Vietnamese delegation, led by State Auditor General Dinh Tien Dung, is paying a working visit to Laos on April 25-27 at the invitation of the Lao State Auditing Agency.

At a talk with Boursi Lovansay, President of the Lao State Auditing Agency, the two sides informed each other of the economic and financial situation, the process of state auditing development and future cooperation plans.

They noted with satisfaction the effective cooperation in auditing in recent times, including increasing reciprocal visits to raise mutual understanding. Besides, the Vietnamese side assisted Laos to train its auditors, and complete a project to build a training centre for the Lao State Auditing Agency in Bolikhamsay province.

They hailed the success in annual cooperation among the three state auditing agencies of Vietnam, Laos and Cambodia.

The two agencies expressed hope for closer cooperation to increase each other’s operational efficiency, exchange high-ranking delegations, send Vietnamese experts to help Laos, build an auditing development strategy to 2020 and share knowledge on public auditing through conferences and seminars.

Vietnam and Laos committed to supporting each other in multilateral forums, particularly within the framework of the Asian Organization of Supreme Audit Institutions (ASOSAI), to help the organization develop further.

Vietnam to achieve 5.6% growth in 2012: IMF

Vietnam will be amongst the five ASEAN countries including Indonesia, the Philippines, Thailand, and Malaysia to achieve high growth in 2012 and 2013, the International Monetary Fund said in its latest world economic outlook report.

The five countries are grouped by IMF as the ASEAN-5 category, and Vietnam is foreseen to enjoy a 5.6 percent growth, while the respective rates for the Philippines, Indonesia, Thailand, and Malaysia are 4.2 percent, 6.1 percent, 5.5 percent, and 4.4 percent.

Vietnam’s growth would rise to 6.3 percent the following year, the report stated.

IMF also projected the country to restrict inflation to a single digit, while fiscal deficit by 2015 would fall under 2.25 percent of GDP.

Vietnam should limit fiscal expansion this year to better control inflation and stabilize macro-economy, IMF said.

It also appreciates the State Bank of Vietnam (SBV) for recently increasing foreign reserves, while the foreign exchange rate on the market remains in the official trading band.

IMF also supports SBV’s policy to limit the devaluation of the Vietnamese dong to the 2 – 3 percent rate from now to year-end.

Meanwhile, the economic research group of HSBC, in its Asian macro-economy report for Q1/2012, has projected a slightly higher economic growth rate for Vietnam in 2012 -- 5.7 percent.

The report stated that Vietnam’s government has implemented necessary measures to tighten fiscal and monetary policies, which helped lower budget deficit to 4.9 percent of GDP last year from the 5.7 percent a year earlier.

Meanwhile, the country’s inflation till this year-end is forecast to fall to one digit.

Vietnam's export surged rapidly thanks to high demand for agricultural products, apparel and crude oil as well as price rises, HSBC said in the report.

The bank estimated that country's export in 2012 would grow by 24 percent year on year.
Export growth was 33.3 percent in 2011.

“Vietnam is expected to be in stable macro-economy thanks to falling inflation and the restricted budget and trade deficit, and better monetary policies,” HSBC said.

Europe, Vietnam share experience in economic restructuring

A seminar held in Hanoi on April 25 has highlighted both European and Vietnamese experiences in economic restructuring.

The event, organized by the Vietnam Academy of Social Sciences and Germany’s KAS Institute, was attended by scientists from Germany, Italy, Hungary, France, Spain and Vietnam.

Participants said as Vietnam is an open economy, it is easily vulnerable to the global economic recession. They believed that 2012 will bring many difficulties in boosting trade and economic cooperation between Vietnam and Europe.

Europe remains one of Vietnam’s leading development aid donors. Yet, foreign direct investment from Europe to Vietnam has declined in recent years, and 2012 is no exception.

Dr Nguyen Thang, from the Vietnam Academy of Social Sciences, said the restructuring of the economy should be primarily conducted in businesses that abused financial tools, leading to a high ratio of debt to equity and risk.

According to Thang, the state should not give debt assistance to any state-owned businesses and be willing to let them go bankrupt if they fail to pay.

He stressed the need to continue the roadmap of opening up the markets where state monopoly remains in order to create a competitive climate for all economic sectors. The state, he said, should restructure the electricity, petrol and oil sectors as soon as possible.

In the long run, Vietnam should clearly define the role of the State in the market economy, in which it mainly focuses on providing institutions and infrastructure, both soft and hard, for the development of the private sector.

Son La hydro-electric power plant launches fifth turbine

Viet Nam's largest hydro-electric power plant in the northern mountainous province of Son La today launched a trial run of its fifth turbine with a capacity of 400 MW.

The Son La Hydro-electric power plant's fifth turbine is expected to be connected to the national grid in four days, and the final turbine will be operational by August, three years ahead of schedule.

Construction of the VND37 trillion (US$1.8 billion) power plant began in December 2005. When fully operational, the 2,400MW plant will be able to supply 10.2 billion kWh of electricity a year.

There is no comment

Please Sign up or Login to comment.

Top page