The Bank for Investment and Development of Vietnam, or BIDV, will delay its plan to begin trading on the Ho Chi Minh City Stock Exchange (HSX) until Q3/2012, the bank’s CEO Pham Quang Tung has announced.
Tung said the move was made following a recent slump on the Vietnam stock market, together with the slide of the benchmark VN-Index, which has lost 12 percent since early May.
BIDV issued a 3 percent stake in its initial public offering (IPO) last December and planned to make a debut on the market on June 26.
However, the plan has been delayed until the third quarter, as under current laws companies are allowed to delay listing for as long as a year after an IPO, the CEO said.
“The stock market conditions are still not very favorable, so listing at this time may negatively affect the stock value, as well as hurt shareholders and investors,” said Tung.
“We expect the trend in the market will be clearer in the third quarter, and will recover well in the second half.”
Earlier, in a regular shareholder meeting on February 28, BIDV Chairman Tran Bac Ha said that given the current state of the stock market, it is impossible to know the exact timing for BIDV’s listing on HSX.
However, he also promised shareholders that the listed price of BIDV shares will be at least 150 percent of the IPO price, which was VND18,583 per share.
National flag-carrier Vietnam Airlines has also delayed its IPO plan this year over the stock market volatiles.
Cooking gas prices up as import tax increased
The import duties slapped on cooking gas were yesterday increased from zero to 5 percent, according to the Ministry of Finance’s circular no. 100.
The tax reinstatement was made as global prices have consistently declined recently, the ministry said.
Gas suppliers are likely to hike retail prices by VND11,000-12,000 per 12-kg cylinder following the tax increase, a representative for the Vietnam Gas Association told Tuoi Tre.
Cooking retail prices thus will be around VND351,000 per 12-kg cylinder starting today, June 21.
Earlier this month, the cooking gas retail price in Ho Chi Minh City continued to drop by VND30,000 a 12-kg cylinder compared to the price announced in early May.
Prices have constantly dropped over the last three months, losing a total of VND140,000 a 12-kg cylinder after reaching a record high of VND500,000 per 12-kg cylinder in early March.
In related news, Long An police recently caught two trucks transporting 160 gas cylinders that had been illegally extracted without invoices and safety seals in Duc Hoa District.
Following a subsequent raid on the Huy Khanh gas extraction facility, police found more than 500 empty gas cylinders.
The facility owner failed to show origin certificates for the above cylinders.
Improving farmers’ economic development skills
The Asia-Pacific Research Network (APRN) has coordinated with the Centre for Sustainable Rural Development (SRD) to organize a seminar on improving farmers’ capacity to work towards sustainable development.
While meeting in Hanoi, representatives from non-governmental organizations (NGOs) discussed agriculture, food security, indigenous people's rights to sustainability, ethnic minorities and disadvantaged people, as well as water resources and solutions for environmental protection in rural areas.
SRD Director Vu Thi Bich Hop said her centre has carried out eight projects to support farmers in 47 communes in the northern and central regions with financial resources from international donors including Spain, Australia, the Netherlands, Denmark and Canada.
The aim is to improve local farmers’ economic knowledge and technical skills in developing agricultural production, marketing and cooperating with partners.
Under the project to develop rice varieties in the northern province of Bac Kan, funded by the Dutch Catholic Organization for Relief and Development Aid (CORDAID), two community-based centres have been set up to provide more than 1,200 local farmers with basic information about rice production.
As a result, average rice yields in the province have increased by 30 percent, while the use of pesticides has decreased by 50 percent. Farmers are now able to spend 70 percent less on buying rice seeds than before and their incomes are up 15-20 percent. Shifting from the self-supply to goods production model most farmers can invest more in producing rice seeds for sale.
A research project to promote the chicken farming value chain has got off the ground in Bao Thanh commune, in the midland province of Phu Tho. With funding from the Catholic NGO Manos Unidas, the SRD has helped local farmers learn how to analyze the value chain through a series of intensive technical workshops aimed at increasing the value of animal products and creating better links between inputs and outputs.
Many households claim to be raising at least 100 chickens as they can buy animal feed directly from the processing plants at cheap prices and sell their chickens in large numbers at a profit 8-15 percent higher than before.
APRN expert Antonio Tujan said some NGOs have created successful models for reducing poverty in rural areas. However, he noted, the lack of highly-skilled workers and financial resources has prevented other NGOs from operating effectively and developing long-term development strategies.
The lax connectivity between different organizations has also led to the fact that one locality may have too many projects but others are short of projects, not to say they overlap each other.
The best solution for farmers is to improve their economic development skills, Mr Tujan stressed.
Professor Dr. Truong Quang Hoc from the Research Centre for Natural Resources and Environment emphasized the importance of closer cooperation between NGOs and the State to provide effective financial support for farmers in rural and mountainous areas throughout Vietnam.
Many NGOs are operating well in the country, such as the Vietnamese Non-governmental Organizations and Climate Change (VNGO & CC), the Climate Change Working Group (CCWG), the Civil Society Inclusion in Food Security and Poverty Elimination Network (CIFPEN), the Gender and Community Development Network (GENCOMNET) and the VNGO & FLEGT (Forest Law Enforcement, Governance and Trade).
Through their networks, Vietnamese experts have the chance to share development experiences with international partners, and discuss issues of common concern related to sustainable agriculture, financial resources for coping with climate change and the effective use of development assistance.
24 top European wine companies to arrive in Vietnam
Seven companies from France, 9 from Italy and 8 from Spain will share their wines with Vietnamese experts in Ho Chi Minh City (SOFITEL Hotel on June 25) and Hanoi (MELIA Hotel on June 26) at the 2012 Traditional Quality Wine Tasting.
More than 200 professionals are expected to attend this unique event which will be jointly organized by the trade commissions in Vietnam of France (Ubifrance), Italy (ICE) and Spain (ICEX).
In a joint initiative put forward by the three countries, Vietnamese wine experts will have a unique occasion to enjoy great wines from some of the most renowned European wine producing regions.
Wine lovers will have the chance to enjoy a rich menu of flavors and essences which mirrors the rich cultural tradition of these regions.
Vietnam is now one of the most dynamic wine markets in Asia. 2011 wine imports grew 56 percent over the previous year and reached US$77.8 million. Favourable growth perspectives, improving personal incomes as well as a growing tourism industry help to explain why Vietnam has become a very attractive market for wine makers all around the world.
France has been Vietnam’s top supplier of wines in the past years, in 2011 alone accounting for 14.8 percent of Vietnam’s imports, followed by Italy (2.3 percent) and Spain (0.7 percent).
Export turnover to Spain increases sharply
Two-way trade between Vietnam and Spain has increased rapidly in recent years, said the Import Export Department under the Ministry of Industry and Trade.
The country earned US$1.1 billion from exports to Spain in 2010 and US$1.55 billion in 2011, up 39.96 percent.
According to the department, in the first two months of 2012 alone, the export turnover to Spain hit US$275.98 million, a year on year increase of 34.43 percent.
As a huge market, Spain needs large quantities of garments and textiles, footwear, household commodities and seafood, which is a big advantage for Vietnamese businesses.
However, experts at the Import Export Department suggested that enterprises need to study the European country’s business culture very carefully to ensure successful negotiations.
Vietnam AutoExpo 2012 opens in Hanoi
The 9th Vietnam International Automobile Support Industries Exhibition & Conference (Vietnam Auto Expo 2012) opened at the Giang Vo Exhibition Center in Hanoi on June 21, drawing 118 businesses from both domestic and foreign enterprises.
This years’ Vietnam AutoExpo features more than 200 stands exhibiting luxury cars, buses, trucks, construction vehicles, and other rail, marine and aviation transport.
The latest casting, welding and coating technologies for the production of auto parts and motorcycles are also demonstrated at the exhibition along with garaging and consulting services to support production activities and consumer transportation products..
During the exhibition, there will be a seminar on solutions to boost the Vietnam car market on June 22.
The event runs until June 24.
Applying PPPs to agricultural benefit
A public-private partnership (PPP) method is considered an important solution for implementing an agricultural restructuring project initiated by the Ministry of Agriculture and Rural Development.
Dang Kim Son, Director of the Institute of Policy and Strategy for Agriculture and Rural Development, says Vietnam’s investment in agriculture is not particularly low compared to other countries in the region. However, in absolute terms, investment is too low given the starting point of the national economy.
In many countries, investment in agriculture is like an inverted parabola. Initially there is little investment, but as the industry develops and gains profits, the State begins collecting taxes and agriculture loses its comparative advantage. Vietnam is currently this early stage while other countries have entered a stage of agricultural protection or subsidy stage.
Many people wonder why a country has to provide a high level of subsidy for agriculture. The same goes with the development of urban areas in Vietnam, which needs adequate financial support. The Government, for its part, has to devise proper policies to mobilize capital from different sources.
“I think Vietnam should promote the application of PPP in agriculture and rural development,” Son says.
Over the past three years, prices of agricultural products have remained high. International organizations forecast that they will continue to rise in the next 30-40 years, suggesting agriculture will be an attractive sector for investment in the future. Therefore, many transnational groups consider investing in this potential area and by the way of procuring land or cooperating with local partners to increased investment in agriculture.
Vietnam has great potential for developing agriculture. In recent times, many transnational groups, including Neste, Metro and Unilever, have established close ties with Vietnam. The Ministry of Agriculture and Rural Development plans to set up five special working missions to help local farmers improve the quality of agricultural production under new projects.
There are three important achievements in the agricultural sector. Firstly, it kick-started the renewal process. Secondly, it has laid a firm economic foundation for national industrialisation to take off. Finally, whenever the nation experiences a hard time, agriculture proves to be a guardian for the economy as it helps to reduce import surpluses and create jobs.
If Vietnam devises proper policies to mobilise investment in time, things will be changing much for the better.
Many domestic businesses have responded to the Government’s policies and guidelines but they are not committed to implementing them to the letter. The important role of businesses in PPPs is undeniable but farmers always play a crucial part. If there is close coordination among the Government, transnational groups, businesses and farmers, PPPs in agriculture will pay off well in terms of both efficiency and productivity.
Oil price up, gas down: ministries
The retail price of petroleum products yesterday officially decreased according to a decision taken by the Ministries of Industry and Trade, and Finance due to the recent slump in global figures.
As a result, the price of RON 92 petrol went down by VND700 to VND21,200 (nearly US$1) per litre while the diesel price reduced by VND400 to VND20,100 per litre.
The kerosene price shrank by VND350 to 20,050 per litre and the mazut oil price slipped VND300 to 17,950 per kilogramme. The two ministries decided to maintain the contribution of petrol companies at VND300 per litre/kilogramme to the petrol price stabilisation fund.
The move stemmed from the fact that most petrol importers made a profit of VND1,400 per litre due to crude oil prices on the global market fell by 20 per cent in less than two months, hitting around $98 per barrel.
Due to high profits, importers offered high commission to retailers, ranging from VND550 to VND900 per litre, to promote sales.
Meanwhile, distributors yesterday raised gas prices by roughly VND12,000 ($0.57) to around VND351,000 per 12kg canister following the Ministry of Finance's decision to re-impose a 5 per cent import tax the previous day.
The distributors include MT Gas, Petrolimex Sai Gon, Sai Gon Petro and Gas SP, amongst others.
Do Trung Thanh, deputy director of Sai Gon Petro's business department, attributed the price hike to higher import tax, saying the new prices were calculated based on total costs.
The MoF re-imposed the import tax as global prices fell. The 5 per cent tariff was brought back in a bid to help balance the State budget, according to a ministerial report.
In March this year, the Government reduced the tax from 5 to zero per cent in order to help businesses and the public cope with fuel price hikes.
However, since April, gas prices have been falling, a trend expected to continue this month.
In early April, retail gas prices on the local market stood at VND405,000-416,000 ($19.29-19.81) per 12kg canister.
Export values rise in farming, forestry, fishing
Export value of the farming, forestry and fisheries sectors saw a year-on-year increase of 14 per cent to around US$13.6 billion in the first half of this year, said the Ministry of Agriculture and Rural Development.
The export value was estimated to rise by 9.6 per cent to $7.7 billion from major farming products, 10.6 per cent to $2.9 billion for fisheries and 22.7 per cent to $2.3 billion, the ministry said.
However, agriculture minister Cao Duc Phat said the world market has remained difficult and a reduction of farm product prices on the world market since early of this year had directly affected export value of the sector.
By now, pepper was the only one of seven major exported farming products to gain a higher export price compared to the same period last year, while rubber had the most reduced export price at 31 per cent.
Pepper exports in this year's first half gained an increase of 14.5 per cent in volume to 87,000 tonnes and 47.2 per cent in value to $526 million against the same period of last year.
Coffee also saw a year-on-year increase of 7.8 per cent in export volume to 970,000 tonnes and a 3 per cent increase in export value to $2 billion in this first half. Two large export markets of Vietnamese coffee, Germany and the US, accounted for 13.9 per cent and 12.8 per cent of the national coffee exports in the first six months.
Rice, however, one of the key export farming products with a usually high export volume, saw a reduction in both export volume and value. The exports had a year-on-year fall of 9.5 per cent in volume to 3.7 million tonnes and 14.2 per cent in value.
Meanwhile, tea was one of stable exported products with a year-on-year increase of 17.2 per cent in volume to 58,000 tonnes and 14.8 per cent in value to $82 million.
Phat said to resolve difficulties in farming exports, the ministry would do a market watch and then provide market information to farmers to make adjustments to volume and kinds of farming production.
The ministry would control diseases of poultry and cattle and apply technical measures for production to reduce production costs, he said.
To increase the export volume in farming, forestry and fisheries sectors, commercial barriers and enterprises would open new markets, which is important, he said.
Sneaky banks fail to announce new fees
Banks have quietly doubled some kind of fees, including charges for money withdrawals from other banks' ATMs, checking accounts and money transfers, even though the State Bank of Viet Nam (SBV) is currently collecting opinions about ATM fees.
Bank clients have been angry with the increase in fees, as many of them were not notified.
"Why didn't the banks inform us about the increase for clients," Thu Hang, who works at a communications company in Phu Nhuan District, was quoted as saying in Tuoi Tre (Youth) newspaper.
Ha, who works at Esprinta company in the southern province of Binh Duong, complained that her company sent her salary to the Viet Nam Technological and Commercial Joint Stock Bank (Techcombank) account but there were only two ATMs for her company of several thousand workers. The machines belong to Vietcombank.
"Techcombank didn't notify us, and Vietcombank collects a high fee for money withdrawals," Ha said.
Some banks have not increased fees for external transactions, but raised their fees for internal transactions.
The Bank for Investment and Development of Viet Nam (BIDV) collects VND1,100 for each checking account and printing of balance, and VND2,200 for each transaction in its internal system. Previously, all services were free.
The Agricultural Bank (Agribank) collects VND550 if customers use ATMs at different branches.
Vietcombank started charging internal transaction and account management fees in April.
"Fee collections for outside and internal systems are part of the policy of each bank. It's not related to the State Bank of Viet Nam or credit alliances," said Ngo Ngoc Dong, general director of the Viet Nam International Financial Switching Joint Stock company (Banknetvn).
According to Dong, banks would like to collect ATM fees as soon as they can because of the huge investment they have made in their ATM systems.
But the SBV first wants to fully calculate all expenditures and suggest reasonable fees so that the rights of both customers and banks are ensured.
All banks are currently waiting for approval from the SBV.
"I was really surprised to know that banks increased fees for external transaction as well as created more different fees," said Nguyen Tu Anh, general director of Smartlink company.
At a recent meeting, all banks had agreed to not increase any kind of fee this year, but they had now broken their commitment, she added.
The SBV has finished a draft for ATM fee collection with an expected fee of VND1,000 for each internal transaction. The policy is planned to take effect early next year.
Banks will have to announce their fee level for 2013 and the years to come.
"The SBV would like to manage the fee because it will affect 40 million bank customers," Tu Anh added.
Rubber exports set to rebound
Viet Nam's rubber exports will rise by the end of this year due to a trend of economic recovery, experts have said.
Tran Thi Thuy Hoa, general secretary of the Viet Nam Rubber Association, said the world economy had shown signs of recovery, therefore the demand on rubber would rise to increase rubber exports in the coming time.
The export price was forecast to be slightly down due to a high world supply of rubber, but Viet Nam's export volume was slated to increase sharply, making the export value of rubber in the second quarter of this year potentially higher than the first quarter, Hoa said.
However, according to the Ministry of Agriculture and Rural Development's statistics, in the first five months of this year, Viet Nam saw a 35.2 per cent increase in export volume of rubber to 317,000 tonnes, but a reduction in export value of 7.2 per cent to US$952 million.
The ministry said achievements of rubber exports in Viet Nam depended on volume, not value.
Hoa said rubber export in the first five months was difficult due to the remnants of an economic crisis causing low demand and reduced prices. Additionally, Viet Nam's export price for rubber was unstable because of low quality and missed delivery deadlines.
China was one of Viet Nam's key export markets for rubber, accounting for 60 per cent of the national total exports of rubber, which was 50 per cent lower than the first quarter last year, she said.
To solve the situation, Hoa said, Vietnamese rubber exporters had sought new markets, including India, Malaysia and Taiwan, so export value fell slightly due to high export volume.
Domestic exporters should ensure the quality of exported rubber products and deliver them as scheduled to keep up the reputation of Vietnamese rubber during the difficult period, Hoa said.
By the end of June, many customers from Shanghai, Tianjin and Liaoning of China are expected to sign import contracts with domestic rubber exporters, the ministry said. Export prices of Vietnamese rubber are also estimated to increase.
Formosa Steel to boost investment
Taiwan-invested Hung Nghiep Formosa Ha Tinh Steel Co will increase its investments in cast iron refinery in the central province of Ha Tinh to US$10 billion from the current $8.9 million.
A representative from the project's management board said it would become operational in May 2015 instead of 2014 as planned.
He said the planned deadline was postponed due to some changes in the general design.
The project has completed 961ha of land clearance out of 1,966ha.
The company planned to borrow $3 billion from foreign banks and $3 billion from Vietnamese ones. However, Viet Nam's banks have yet to lend a company funds which exceed 15 per cent of their registered capital.
The project also faces a lack of water supply. It expected Rao Tro reservoir project to come into operation earlier than initially planned.
In the first phase of the project, the Son Duong deepwater seaport with 14 wharves, a steel plant with yearly designed capacity of 7.5 million tonnes, and a 750MW thermoelectricity plant would be completed.
It also targeted to increase its capacity to 22 million tonnes per year.
Prime Minister Nguyen Tan Dung last month asked the Ministry of Finance to seek temporary capital of VND650 billion ($30.9 million) for the project to implement land clearance and compensation.
Dung asked the provincial People's Committee and Electricity of Viet Nam to ensure water supply and power grids for the project.
Earlier in 2010, Ha Tinh Province handed over around 3,300ha of land in Ky Anh District for the investor to develop the complex. When completed, the project will be the first facility of its kind in the nation.
Local authorities expected that the complex would create 10,000 local jobs in the first phase, with the figure growing to 30,000 upon completion of the second phase.
HCM City to host forum on support industries
A forum to be held in August in HCM City will discuss how Viet Nam's support industries can stay competitive and take advantage of the ASEAN Economic Community to be formed in 2015.
Organised by the Thailand-based Reed Tradex and Japan External Trade Organisation, the main topics on the agenda will include an overview of the development of the country's manufacturing industry and increasing the efficiency of its support industries.
Vietnamese executives from the manufacturing and support industries sectors and their Japanese counterparts are expected to take part in the forum to be held at the Intercontinental Asiana Sai Gon Hotel.
VietJetAir chooses Visa subsidiary anti-fraud plan
HCM City-based private budget carrier VietJetAir announced on Wednesday that it had signed an agreement with CyberSource for a payment services and anti-fraud solution to support its online ticketing services as it looked to expand overseas.
The installation of Decision Manager cements formal co-operation between VietJet Air and CyberSource, a Visa subsidiary that provides secure e-commerce payment management services.-
Southern province earns over $530m from exports
The southern province of Tay Ninh made US$121 million in exports during May, lifting export turnover for the first five months of this year to $533 million, up 33 per cent year-on-year, according to the provincial Department of Industry and Trade.
Export items recording high export value included wheat flour, cashew nuts, rubber, garments, plastic and tyres.
During the period, the province also imported $279 million worth of goods, marking a modest yearly increase of 0.14 per cent, the department said.-
1.8m foreign tourists visit HCM City this year
HCM City has welcomed more than 1.8 million overseas arrivals so far this year, up by 10 per cent against the same period last year, according to the municipal Department of Culture, Sports, and Tourism.
Tourist turnover in the first six months of this year reached VND34,000 trillion (US$1.61 billion), a 15 per cent year-on-year increase and 50 per cent of this year's planned target.
The city's plans to promote tourism and improve domestic tourist products have now come into fruition. In addition, authorities intend to work closer with south-eastern and south-western provinces and cities to develop local tour services.
Foreign-invested firms may get recognition for exports
The Ministry of Industry and Trade will urge the Government to grant certificates of merit to 70 foreign-invested firms that achieved export turnover of at least US$100 million in 2011.
Among the recommended enterprises are Samsung, Canon, Intel and Posco.-
Rice stockpile recommended to hold prices
Central and provincial agricultural officials agreed that the Government should approve a plan for food companies to buy and stockpile 1 million tonnes of rice from the summer-autumn crop to enable farmers to sell their crops and prevent a fall in prices.
At a meeting held in HCM City yesterday officials from the Cultivation Department and provincial agriculture departments and executives from rice export companies, they also promised to take up the issue with the Government.
The Government often supports food companies with interest-free loans to enable them to buy rice and other crops, especially when prices begin to fall.
Nguyen Tri Ngoc, head of the Cultivation Department, said with the rice crop being harvested, the Viet Nam Food Association (VFA) should more actively seek export markets.
Le Thanh Tung, his colleague, said 1.64 million ha had so far been sown in the Cuu Long (Mekong) Delta, and 2.9 million tonnes of rice were expected to be harvested.
Many delegates expressed concern about the lack of demand for the low-grade IR 50404 rice despite low prices.
Tung said his department as well as local authorities had warned farmers to limit cultivation of IR 50404 to 10 per cent of land under the summer-autumn rice crop.
But statistics from local agriculture departments showed that planting of the variety had been as high as 20 per cent, Tung said.
The IR 50404 strain had advantages like high yield, short growing period, and ease of cultivation, but foreign markets were increasingly demanding high-grade varieties, he said.
Both Ngoc and Tung urged localities to curtail cultivation of IR 50404 in the autumn – winter crop beginning in a few months.
Tung also said the autumn-winter crop should be restricted to 600,000ha – compared to 680,000ha last year – to minimise loss from the annual flooding.
Besides, farmers should refrain from planting in areas without dyke systems to keep out the floodwaters, he said.
Le Van Doi, deputy director of the Hau Giang Province Department of Agriculture and Rural Development, asked relevant agencies to provide information about the global demand for various kinds of rice so that farmers could be provided with guidance.
This year Viet Nam had exported 2.9 million tonnes, 20.1 per cent down year-on-year, Pham Van Bay, deputy chairman of the Viet Nam Food Association, said.
The country hoped to export 6.5-7 million tonnes in the full year, he added.
The conference, held to discuss ways to stimulate demand for the summer-autumn rice crop in the delta and strategies for the autumn-winter rice crop, was organised by the Cultivation Department.
Ha Noi export value rises 7.2%
The capital city saw growth in export turnover of US$4,856 billion during the second quarter of this year, a rise of 7.2 per cent, while import turnover fell by 8.6 per cent compared to the same period last year, according to the Ha Noi Statistics Department.
The department reported that rising prices for export products and increasing volumes of exports, along with a gradual recovery in the world's economy, helped Ha Noi achieve the strong result.
Ha Noi's export turnover this month increases by 3.4 per cent over last year, hitting almost $1 billion.
Eight out of 11 export items saw rising turnover, including computer accessories and peripheral units (up by 34.5 per cent), wire and cable (up by 32.6 per cent), handicrafts (up by 27 per cent), petroleum (up by 24 per cent), electronics (up by 23.2 per cent), and glass and glass products (up by 5 per cent), amongst others.
Agricultural products, coal, footwear and leather products saw a decrease in import turnover. Agricultural products and footwear and leather products fell by 18.4 and 16 per cent, respectively. Coal import turnover fell sharply by 37.9 per cent.
At the same time, machineries, materials and machinery equipment saw a reduction in import turnover. Machineries and materials dropped by 6.6 per cent while machinery equipment fell by 26.4 per cent.
Increase in import tariff on gas
The Ministry of Finance has increased the import tariff on liquefied petroleum gas (LPG) from 0 to 5 percent from June 20, in order to create a balance for consumers, government and import companies.
Since April 2012, the price of LPG has gradually gone down. Because this trend continues this month, retail prices on gas have decreased around 18 percent compared to April, allowing for an increase in its import tariff.
The Ministry of Finance has also requested gas businesses to do their utmost to keep costs down in order to maintain a stable price structure.
Local finance departments have been asked to strictly monitor retail gas prices to avoid abnormal and sudden price hikes.
Any gas business not registering its retail price or unreasonably changing prices will be sternly dealt with and penalized in accordance with current business laws.
Tainted Chinese milk formula not certified in Vietnam
After Chinese health watchdog announced that it had recalled the ‘Quanyou’ formula milk powder made by Mongolia Yili Industrial Group, because of its high content of mercury; the Department of Food Administration in Vietnam was quick to confirm that this product had not been certified in the country since 2009.
Vietnam’s Department of Food Administration immediately contacted the Chinese General Administration of Quality Supervision, Inspection and Quarantine to verify information on the tainted dairy product and its contents.
Responding to Vietnam’s request, the Chinese product quality watchdog replied that it has only just discovered that the formula milk powder, ‘Quanyou’, contained such high levels of mercury.
Along with a formal request to the Chinese government product quality watchdog, Vietnam’s Department of Food Administration conducted a thorough check on imports and issuance of standard certificates to products and found that the milk powder had not received any clearance certificate since 2009.
Handicraft items take plunge in global export market
Several handicraft villages that have been producing items for export are now facing a serious downturn in the global export market as the world economy continues to be in turmoil and because of increasing competition in similar products from other Asian countries.
Phu Vinh handicraft village in Chuong My District that produces beautiful rattan and cane items is located only 25km from Hanoi. The village is well-known for hundreds of handicraft products like baskets, lamp-shades and tea trays, mainly produced for export to the US and European markets.
Just a few years ago the village had nearly 8,000 workers who specialized in making these export items, besides thousands of others that were outsourced to nearby villages and communes.
Businesses in the village exported at least one consignment every alternate day to Taiwan (China), Republic of Korea and Japan. However, now with no orders, inventories lie unsold.
Nguyen Thi Thu, owner of a production unit, laments that her units used to receive orders from foreign buyers every week a few years ago and they worked round-the-clock to meet orders. But in the last two months they have not received any new orders.
Vuong Van Can, deputy chairman of the People’s Committee in Phu Nghia Commune where Phu Vinh Village is located, said that 60 percent of workers in the village have given up working in the handicraft industry.
Only few households are still operating but their products are mainly sold in the domestic market. Revenue from handicrafts in Phu Vinh Village plunged to only VND70 billion (US$3.3 million) in 2011, about half of that in previous year.
One of the factors leading to the drop in exports is huge competition from China, Thailand and Indonesia.
The increase in costs of basic raw material is another reason. Four years ago, a kilogram of rattan cost only VND4,500, which now costs up to VND12,000.
Pham Mai Huong, owner of a silk weaving unit in Ha Dong District of Hanoi, said that unsold conditions have caused huge inventory of Chinese silk. Chinese products are priced much lower than Van Phuc silk, which is more sophisticated and beautiful.
Eighty percent of wooden furniture made in Van Ha and Dong Ky villages in Dong Anh District of Hanoi and Tu Son District of Bac Ninh Province respectively, are mainly exported to China. As a result, when the Chinese market stopped importing, several businesses were taken by surprise.
Vu Van Lien, owner of a wood furniture unit in Dong Ky, said that he has five workshops producing nearly 20 wooden furniture items each month for export to China. However since the beginning of the year, he cannot export any of the items.
Duong Van Canh, chairman of Dong Ky Commune People’s Committee, said that since early 2011, the price of many commodities including electricity, coal and wood have escalated.
Businesses had to borrow at high interest rates to remain in operation. This combined with unsold items caused 30-40 percent of units in Dong Ky Village to shut down or operate perfunctorily.
As a result banks began to tighten monetary policy by the end of last year. Since the beginning of 2012, several businesses wanted to resume operations to target new markets but they could not because of lacking capital.
Huu Lien Asia wins Myanmar steel market’s trust
Myanmar has emerged as the biggest steel importer of Huu Lien Asia Joint Stock Company (HLAC).
The export value of HLAC reached VND286 billion in the year’s first five months, up 83% from the same period last year. Myanmar is the firm’s biggest importer with VND155 billion in the period, 54% of the total value.
According to general director Tran Tuan Nghiep, after one year of being present in Myanmar, HLAC’s steel pipe products account for over 90% of the Myanmar market.
The company is also stepping up exports to the U.S., Australia, Japan, Cambodia, Thailand and Indonesia to cope with difficulties at home.
Regarding the anti-dumping case in the U.S., the Department of Commerce has decided that HLAC did not dump steel products on this market and thus can enjoy a tax of 6.63%, which is a big advantage for the firm as others are subject to 27.96% tariffs.
HLAC produces steel pipes, stainless steel pipes, steel plates, steel coils, steel strips and steel sheets with a total output of 144,000 tons per year.
The firm has targeted to obtain VND3.2 trillion in revenue this year and VND34.5 billion in after-tax profit, with a 9% cash dividend.
VND1.5 trillion VAT rescheduled
HCMC has seen 56,100 businesses having their value added tax (VAT) payments totaling VND1.5 trillion rescheduled, meaning each of them having a delayed payment of a mere VND26.7 million.
The figure was released by the HCMC Tax Department in response to a request of the Ministry of Finance on tax exemptions and reductions mandated by the Government.
The city’s tax authorities have cut 30% on corporate income tax, or some VND290 billion for 55,805 businesses. State budget revenue in the year to date has dropped VND180 billion as the city has slashed land tax by half.
The Tax Department is working with the Department of Finance to lay out a roadmap for the extension of land use fees which will be applied next month.
Meanwhile, the General Department of Taxation is collecting the results of tax exemptions and reductions nationwide as of end-June in order to present to the Ministry of Finance and suggest next moves for tax policy-making in the year’s second half.
Plant protection drugs containing cypermethrin banned
Plant protection drugs that contain cypermethrin will be banned in shrimp farming by the end of this month, according to the Plant Protection Department.
Cypermethrin is an antibiotic that causes a widespread disease and destroyed a vast shrimp farming area in the Mekong Delta over the past time. Shrimp farmers use the chemical for shrimp farms.
Thus, the Plant Protection Department will ban producers from making new plant protection drugs using ingredients that contain cypermethrin in an effort to protect shrimp farmers.
Five years after the ban comes into force, the domestic plant protection drug market will likely see no products having cypermethrin, said Hoang Hai, deputy chairman of the Vietnam Pesticide Association (VIPA).
A pesticide brand must be re-registered after coming on the market for five years. If the Plant Protection Department does not grant a registration certificate to a product, its traders will have to eliminate it from their stores.
However, banning the use of cypermethrin does not mean that it will not exist on the market five years later as the antibiotic is also known as a mosquito repellent.
Cypermethrin is also found in mosquito sprays. Therefore, traders can import mosquito repellent and then sell it to farmers to clean up their shrimp farms, said Hai.
“It is impossible to prohibit farmers from using the antibiotic when it is used as a kind of mosquito repellant,” he added.
Unusual price volatility not clarified in law
In the Price Law put forward to the National Assembly (NA) meeting on Wednesday, the Government did not clarify the term “unusual price volatility”, which is an important basis for the State to stabilize market prices.
After much debate, the Price Law was eventually passed by the NA, with some adjustments on the list of items subject to price stabilization and control. However, the most important issue about State intervention in prices is not specified.
The Price Law indicates the foundation for price stabilization is when commodities on the price stabilization list become volatile but it does not define what unusual fluctuations are.
Regarding this issue, the NA Standing Committee said it is unfeasible to specify the level of unusual price fluctuation in percentage as a basis for price stabilization, as each item has a different level of price volatility. Therefore, it is unreasonable to stipulate a rigid fluctuation level applicable to all items.
If regulating the specific fluctuation percentage for each commodity, then the law could not cover all items on the market. It would also lead to complexity in management and administration.
However, the NA Standing Committee admitted it would be difficult to identify unusual fluctuations without specific regulations. Therefore, the NA asked the Government to make clear the basis for defining the level of unusual price volatility in a detailed document.
Under the Price Law passed on Wednesday, the State will only set the average retail power price frame rather than regulating specific retail prices, although the State is holding monopoly in this sector.
The NA explained price regulation must be consistent with the market mechanism and the practical situation. In addition, it is necessary to balance the interests of consumers and the stabilization of production and business, especially in the context that private investors are encouraged to participate in developing the power market.
The Price Law will come into force on January 1, 2013.