e-Commerce is expected to help Viet Nam meet its export turnover target of more than US$110 billion this year, according to an official with the Viet Nam Chamber of Commerce.
Vo Tan Thanh, director of the chamber's HCM City branch, said e-commerce was considered the best option for import-export companies in terms of time and pricing power.
Thanh spoke at an Open Sesame event held on Friday.
At the event organised by the world's largest online B2B marketplace for global trade Alibaba.com and OSB Joint Stock Co, Thanh said e-commerce would become indispensable in the near future for businesses, allowing them to access customers more easily.
Vietnamese small- and medium-sized enterprises (SMEs) have paid more attention to international trading activities, and increase exports instead of only focusing on domestic markets.
Viet Nam has a good foundation for e-commerce to develop. The country has currently more than 30 million internet users, accounting for 35 per cent of the population.
Moreover, Viet Nam is one of the top countries in Asia that is developing rapid internet speed for information technology infrastructure.
According to the global e-commerce platform Alibaba.com, Viet Nam is viewed as a country with great potential, having 210,000 registered members on its platform as of the first quarter of this year.
According to the Ministry of Industry and Trade, total export turnover for the first six months of the year reached $ 53.1 billion.
With rapid development of online trading in Viet Nam, the target is expected to be met.
Thanh said that Business-2-Business (B2B) e-commerce floors had attracted many businesses from around the world, including those from Viet Nam.
Timothy Leung, deputy chairman of Alibaba.com Group's global business and development division, said that "by using e-commerce, enterprises are able to easily access new markets and customers. Online trading helps reduce transaction times and costs".
There are 3,600-4,000 Vietnamese businesses per month that register on Alibaba.com. Vietnamese items that top the list for foreign viewers of the site are related to agriculture, food and beverage, and construction and property.
US, China and India are among the buyers who have great demands to seek Vietnamese suppliers.
This means that Vietnamese businesses will be able to gain a leg-up on e-commerce competition.
Thanh said that e-commerce had opened up opportunities for businesses to contact partners around the world, and make it easier to seek new clients as international consumers tend to search for new supplies of goods.
He said that using e-commerce, businesses should be responsible and reliable in their trading, and answer buyers' inquiries as quickly as possible.
Alibaba Group in collaboration with OSB Joint Stock Co and its partner VCCI have launched a project to help Vietnamese businesses intensify exports via e-commerce conducted nationwide from July to December.
The project is expected to contribute to export growth of Viet Nam in the remaining six months and promote e-commerce development among the Vietnamese business community.
The project targets supporting 500-600 local exporters with total sponsor value of VND21 billion ($1 million). It will give priority to exporters operating in key sectors such as agriculture, food, furniture, construction materials, minerals, chemicals, textiles and garments.
The exporters will have an opportunity to join the world's largest online B2B marketplace, with 45 per cent discount on member registration fee for a Gold Supplier on Alibaba.com.
They also will receive free training on e-commerce, and be able to meet large exporters to share experiences.
Standard Chartered expects rate cut
The State Bank of Viet Nam has more room to cut interest rates to help boost the economy now that inflation has been substantially reduced, according to a report issued by Standard Chartered.
"We expect the refinance rate to end 2012 at 9 per cent, down from the current 11 per cent, as the State Bank of Viet Nam aims to boost growth," the report said, predicting that the foreign exchange rate would also remain stable through the end of the year.
This should alleviate investor concerns about loan and credit access in the coming months and support domestic economic activity that has been weakened by global uncertainty, it said.
Standard Chartered also predicted that inflationary pressures would remain low this year, with inflation likely to pick up gradually only in the last quarter. The headline inflation rate fell to 6.9 per cent year-on-year last month, with easing food and energy prices likely to depress headline inflation further.
Food prices were expected to stay flat in the coming months after declining for three consecutive months, and overall inflation was likely to bottom out at around 5-6 per cent year-on-year before rising modestly again.
Viet Nam's improving trade balance has been a positive development this year, the report said, forecast that this trend would continue for the remainder of the year, although likely to moderate over the next few months.
"We forecast that Viet Nam's export growth will outperform the rest of the region but be a touch lower than in previous years," it said. "The positive trend in the trade balance is likely to boost forex reserves and support the Vietnamese dong."
Imports set to accelerate in the next few months due to rising demand for raw materials and crude oil. This was likely to cause a slight deterioration in the trade balance in the short term. Once the Dung Quat oil refinery resumed production and the Nghi Son oil refinery were completed, the trend seen in the first quarter would likely resume.
Lower borrowing costs in the coming months and the Government's growth-supportive stance should support a rebound in investment growth, the report said, predicting that public spending would make up a bigger share of overall investment this year as international investors exercised caution.
"We expect domestic demand and an improving trade balance to drive growth this year."
Standard Chartered also forecast that the economy would grow overall by 5 per cent this year, down from their previous forecast of 5.8 per cent. It expected growth to pick up as the year progressed.
Nation's WTO membership boosts investment in Delta
The Mekong Delta has increased its exports and attracted more investment since Viet Nam joined the World Trade Organisation five years ago, a seminar attended by officials from regional provinces heard in Can Tho on Tuesday.
The country's most important rice, fruit, and aquatic farming region increased seafood exports by 14-22 per cent every year.
Its rice exports have also increased every year, and the region now accounts for more than 90 per cent of the country's exports of the grain.
It now has 612 foreign projects with a combined investment of US$9.7 billion.
Its monthly per capita income virtually doubled between 2006 and 2010 to VND1.247 million.
But it still grapples with problems like lack of comprehensive zoning plans, modest infrastructure, and low quality of labour, participants told the conference.
Productivity and incomes here are the lowest in the country.
Nearly 99 per cent of delta-based companies have less than 300 employees, while more than 96 per cent have a capital of less than VND50 billion ($2.3 million).
Participants said due to low quality, the region's agriculture and seafood exports faced challenges caused by Viet Nam's WTO commitments and the country's global integration.
Companies needed to co-operate to reduce costs and make Vietnamese products more competitive globally, they said.
Exporters should compete with each other in a healthy and transparent manner and focus on promising markets, they said.
The Delta's 12 provinces and Can Tho need to work together to develop competitive local products like rice, tra fish, shrimp, and fruits.
The seminar was organised by the Viet Nam Chamber of Commerce and Industry's Can Tho office.
Small firms urged to join global distribution network
Integration into a global supply chain should be a lifeline for Viet Nam's small and medium-sized enterprises (SMEs), a conference in the capital last week was told.
Chairman of the Viet Nam Chamber of Commerce and Industry Vu Tien Loc told the conference on the global supply chain that SMEs have proved their durability and flexibility. However, their competitiveness was stunted and only weak links have been made with other SMEs and large businesses.
Chamber statistics showed there were only 300 SMEs that could meet global supply chain requirements.
A Ministry of Planning and Investment (MPI) survey last month showed Viet Nam had more than 658,000 registered businesses, 71 per cent of which were operating.
The number of SMEs had increased 22 per cent year on year, from 38,000 in 2000 to over 283,000 in 2010.
Nguyen Hoa Cuong, deputy head of the MPI's Enterprise Development Agency, said it was a relatively high rate compared to other economic sectors.
He said SMEs generated VND78.4 trillion (US$3.7 billion) pre-tax profits and created 22.11 per cent of jobs on average anually. They also contributed 29 per cent of total export earnings.
However, experts said SMEs faced challenges, including limited access to finance, a low quality workforce, backward technologies and insufficient management skills.
Compounding the problem was fierce competition from big businesses and the negative impact of international integration.
Tran Quoc Khanh, Deputy Minister of Industry and Trade, said SMEs could support the country's restructuring process by smoothing operations and cutting costs.
Khanh said Viet Nam had created opportunities for SMEs in the global supply chain when it negotiated agreements, especially the Trans-Pacific Strategic Economic Partnership Agreement.
He said SMEs had joined the world market and participated in the global supply chain.
Alice Pham, director of the Consumer Unity and Trust Society International's Ha Noi Human Resource Centre, said initial results showed multinational groups tended to produce the important detail in a product while accessories were supplied by SMEs worldwide through the global supply chain.
This had created business opportunities for Vietnamese SMEs.
Economist Pham Chi Lan said Viet Nam's SMEs would find it hard to compete in the global supply chain if they relied only on cheap labour and raw materials.
Lan said businesses needed skilled labour and high technology.
She said a strong financial abilitiy was also crucial, in creating new products.
Viet Nam should have better infrastructure and freight handling to help its industries to integrate into the global supply chain, she said.
Time to buy apartments: experts say
Today's domestic real estate market was affording buyers a good opportunity to buy offering housing, according to experts.
CBRE Viet Nam reported that the improving macro-economics fundamentals had finally seen residential buyers begin to explore the market for opportunities. Enquiries for residential purchases are rising, but to date there had been no wide-scale increase in transactions.
"Obviously buying a residential property, be it for investment or personal occupation, is a huge decision and financial commitment – as such we are now seeing buyers looking, but not touching. We expect this increase in enquiries to translate to an uptick in sales around the turn of the year, should the economy continue at the current pace," said Marc Towns-end, CBRE Viet Nam Managing Director.
"We already saw a surge in the number of mortgage applications in a surveyed bank from March 2012, around the time when the first interest rate cut from 14 per cent down to 13 per cent occurred," he said.
"Like any other real estate sector, the residential market functions in cycles. In the previous market cycle, inflation peaked in mid-2008 and bottomed in mid-2009, followed by a market recovery late 2009. The current cycle is expected to be similar with inflation peaking in mid-2011 and reaching a new low in mid-2012. If history repeats itself, we should expect market recovery in late 2012 or early 2013," he said.
DTJ, the real estate agent for Indochina Plaza Ha Noi, said a number of apartment buyers at the Indochina Plaza had increased after investors signed a co-operation contract with Vietcombank to provide financial support under a trade promotion programme.
After just two days, the company had made VND50 billion (US$2.3 million) in revenue from apartment sales, said a representative from DTJ.
The representative said demand for housing had increased, even in the luxury apartment sector. However, people had suffered the impacts of the economic downturn and were more inclined to wait until prices fell further, so transactions had fallen.
Tran Ngoc Anh, Viglacera Corporation deputy director, said although the local property market was struggling, Viglacera was having some success by offering preferential policies to customers.
If investors shared the financial difficulties with buyers, liquidity on the property market would continue to improve, Anh said.
Vu Xuan Thien, deputy director of the Housing and Real Estate Market Management Department, said that trade promotion programmes provided a good opportunity for home-buyers.
Dang Hung Vo, former deputy minister of Natural Resources and Environment, said it was a buyer's market, with prices having fallen from 30-40 per cent in some cases.
Vo said that if people had real demand for a home, now was a good time to buy, but those looking to buy as an investment they would struggle because it was difficult to access bank loans.
Careful consideration was needed before investing in the property market, because the economy remained unstable and there were many potential risks, he added.
Real-estate floors must report trading details
The Ministry of Construction has issued a document instructing real estate trading floors to submit reports on the property transactions of both individuals and organisations.
The move was aimed at classifying property transactions and guaranteeing the "transparency" of the market, said the ministry.
Under the document, floor operators will have to submit monthly reports containing detailed information regarding all transactions, as well as six month summaries.
The information should include the transaction date; category and location of the property; total value; payment method; and ID cards of buyers and sellers.
The current law does not specify that all real estate transactions must be traded through the floors, only those conducted by property developers.
"It is essential for floor operators to report their transactions. The Ministry of Construction (MoC) will use the reports to offer appropriate policies to govern the market," said Le Viet Dung, an expert from MoC's Housing and Market Management Department.
Operators who do not submit reports or provide incomplete information will be named on www.sanbatdongsan.net.vn, and will also be subject to investigation and possible penalties.
The website, run by MoC and the Viet Nam National Real Estate Association, aims to provide property trade information quickly and transparently to help authorities form an appropriate legal framework.
According to statistics from MoC, Viet Nam had 989 floors nationwide, of which Ha Noi takes the lead with 451, followed by HCM City with 369.
Inspections have uncovered 25 floors that were violating regulations so far this year, and issued fines of up to VND250 million (US$11,905) for one floor.
Under the current law, penalties are rather light, ranging from VND10-20 million for an individual and VND30-70 million for an organisation. In more serious cases, operators may have their trading licences revoked.
Dung said that the ministry would supplement and complete more serious penalties besides the above-mentioned provisions.
Le Hoang Chau, chairman of the HCM City Real Estate Association, agreed with the request, and said that it would help make State governance of the market better and create a more professional environment in which investors and customers were protected from risks.
However, he said that the Government should encourage people to trade through the floors by cutting the time it took to grant land-use right certificates.
In reality, property trading outside the floors was common, making it difficult for authorities to collate accurate data and give exact analysis and forecasts, he added.
High rises profit from offering service
Because of low office-occupancy rates and sluggish apartment sales, a number of projects in these two segments have been changing their initial functions into serviced apartments.
The DB Court in District 3, for example, earlier this month opened doors to tenants with its 38 units, after restructuring the former office building.
With acreage ranging from 50 one-bedroom to 85sq.m. two-bedroom apartments, the monthly rent is from US$1,600 to $2,500, which would bring more profits to office space.
Meanwhile, recently launched projects such as Xi Riverview Palace in District 2, Ben Thanh Luxury Apartment in District 1 and Saigon Pavillon in District 3 have become hybrid projects, offering unsold units as serviced ones. Also joining the trend is the former two-star hotel Saigon City Residence in District 1, which was converted into serviced apartments.
It is expected that by the end of 2015 nearly 3,900 units will enter the serviced apartment market. At the end of this year's second quarter, 33 per cent of that figure were under construction.
Building-material traders cut prices
Most construction material traders in HCM City say they are willing to cut prices and suffer losses in order to stimulate consumption and clear their inventory.
Under pressure caused by frozen real estate market, high inventory and capital shortage, they have endured the "worst situation in a long time." they said.
Many traders are unable to pay wages, rents as well as utility bills.
A trader from District 3 estimates that consumption of steel and cement in the last few months has declined by 50 per cent over the same time last year.
Sales of other materials like brick and tiles has gone down by 40 per cent over last year, he said, adding most traders were ready to cut prices and even accept losses to stimulate sales.
The owner of the Nam Thanh Vinh steel store in District 3 said they had reduced prices by around VND2 million (US$95) per one tonne.
Another shop in District 10 said they were organising frequent promotion programmes to attract customers. For instance, customers buying enameled tiles in large volumes could get 10-12 per cent discounts.
However, these promotions have not improved sales.
Tran Van Huynh, chairman of the Viet Nam Construction Materials Association, said the current economic condition had badly affected member firms.
Construction material manufacturers had to reduce or stop production because input costs have risen 20-30 per cent over last year, he said.
He added the association has asked the Government to expedite construction projects and reduce value added tax on construction materials in order to help the industry survive.
In the first half of 2012, cement inventory volumes reached 2.8 million tonnes, while the steel industry had stockpiled 370,000 tonnes.
Awards honour ASEAN businesses in Vientiane
Awards honoured 86 outstanding ASEAN businesses, people and trademarks at a ceremony in the Lao capital of Vientiane on Saturday.
The event was jointly organised by the Vietnamese ministries of industry and trade and planning and investment; Lao ministries of industry and commerce and information, culture and tourism; Viet Nam Association of Small and Medium-sized Enterprises; Viet Nam Co-operatives Alliance.
In his letter to the ceremony, National Assembly Chairman Nguyen Sinh Hung said the event would boost solidarity and friendship among regional businesses during global integration.
Lao Minister of Industry and Commerce Nam Vignaket praised business people for helping build a healthy business environment while promoting sustainable socio-economic and cultural development, contributing to celebrating the Laos-Viet Nam Solidarity and Friendship Year 2012.
Foreign lenders' fixed asset purchases limited
Foreign lending institutions and foreign bank branches will be forbidden from using amounts in excess of 50 per cent of their charter capital to acquire or invest in fixed assets, pursuant to Government Decree No 57/2012/ND-CP which takes effect on September 15.
Under the decree, foreign lending institutions are only entitled to use their charter capital or reserve funds to buy stakes in other lending institutions or enterprises. These institutions are also required to place an amount equal to 5 per cent of their net, after-tax profits into reserve funds, although the total amount held in reserve funds cannot exceed the institution's charter capital.
Foreing lenders and foreign bank branches are also required to allocate 10 per cent of their profits to provisionary funds, although the total value of these funds cannot exceed 25 per cent of charter capital.
South Korea to boost IT for small businesses
The Viet Nam Software and IT Service Association (VINASA) and South Korea's Daegu Metropolitan Mobile Technology Convergence Centre signed a memorandum of understanding (MoU) last Friday on mutual co-operation for ICT infrastructure services and development.
Under the agreement, the two countries will exchange information to help small-and medium-sized enterprises (SMEs) to prosper.
They will also exchange and disseminate information relevant to the enhancement of business co-operation between the SME industries from both countries.
In addition, the two sides will co-operate in other areas of the information security field.
Speaking at the signing ceremony, VINASA's vice chairman Nguyen Nhat Quang said Vietnamese and South Korean businesses had co-operated productively in the ICT sector, especially in e-learning and digital content.
"We expect the MoU to facilitate co-operation in the mobile sector, contributing to bringing trade turnover between the two countries to US$20 billion by the end of the year," Quang said.
Lee Jae Hoon, the centre's director, said that co-operation would also increase the competitiveness of businesses in the global market.
Province hosts seaport festival
The first International Seaport Festival will be held in the southern coastal province of Ba Ria-Vung Tau from November 10-12.
The event is being held to promote the country's maritime economic sector, and raise public awareness of the country's sea and island sovereignty.
Through its diverse activities, the festival hopes to attract investment interest in the sector, according to Ho Van Nien, deputy chairman of the Ba Ria-Vung Tau People's Committee.
Organised by the provincial People's Committee and Loma Global Trading Corporation, the event provides a platform for local and foreign businesses operating in the maritime sector to seek business opportunities.
The festival will include a carnival, a "friendship" golf tournament, sea, ship and island photographic exhibition, a seminar on seaport development and investment, and musical performances.
It also includes a trade fair where visitors can find the world's latest technologies in shipbuilding, seaport development and logistics services.
The event plays an important role in contributing to implement the Government's policy on Viet Nam's maritime economic development strategy, according to the organisers.
In its development strategy in the 2010-15 period, with a vision to 2020, Ba Ria-Vung Tau Province targets becoming an urban seaport city.
Minister calls for more British investment
Minister of Culture, Sports and Tourism Hoang Tuan Anh met on Friday with the leaders of the City of London to promote Viet Nam's potential for co-operation.
Anh also called for more British investment in Viet Nam to further strengthen the strategic partnership signed between the two countries in September 2010.
Lord Mayor of London David Wootton said that many UK businesses wanted to invest in Viet Nam, especially in the banking, financial and insurance sectors, as well as in tourism and infrastructure development. Wootton said he planned to visit some Asian countries, including Viet Nam, immediately after the conclusion of the 2012 Paralympics in London in September.
The working session took place during Anh's visit to the UK last week to attend the opening ceremony of the Olympic Games in London. On Friday, Anh also visited Vietnamese athletes who are competing in the Games. countries to study further possible co-operative ties in the future.
Public debt reduction targeted
A limit of public debt to no more than 65 per cent of the gross domestic product by 2020 and 60 per cent by 2030 has been targeted in a national strategy approved last Friday.
Public debt is the debt owed by the central Government and local governments as well as loans guaranteed by the Government for financing national operations.
By 2020, the Government's debt is not to exceed 55 per cent of the GDP and borrowing from foreign countries will not be higher than 50 per cent of the GDP. By 2030, the correlative figures should be 50 per cent and 45 per cent.
To meet these goals, borrowing to cover State budget overspending needs to fall to below 4.5 per cent of the GDP by 2015, 4 per cent by 2020, and 3 per cent after 2020.
Prime Minister Nguyen Tan Dung said the strategy was to balance the State budget and investments for socio-economic development in specific periods, to assure efficiency in mobilising and using loans and to maintain the country's financial security.
The nation could issue a maximum of VND225 trillion (US$10.82 billion) worth of State bonds by 2015, and VND500 trillion ($24.04 billion) in 2016-20, to raise funds for developing health care, education and traffic and irrigation works.
It could borrow around VND550 trillion ($26.44 billion) maximum by 2020, or an average of VND55 trillion ($2.64 billion) per year, to build infrastructure for the industrialisation and modernisation process.
Investment and export credits, locality borrowing, as well as enterprises and credit institutions approaching foreign loans, must be performed reasonably and selectively in accordance with Government targets, Dung noted.
Since "domestic capital is decisive and foreign capital is important", borrowing portfolios "need to be adjusted following a direction of increasing domestic debts and gradually lessening the country's dependence on foreign debt".
By 2020, the value of foreign loans was to fall to below half of that of total Government's debt while the value of official development assistance capital should account for about 60 per cent of its total loans from overseas.
Dung urged the country to minimise risks involving currencies, exchange rates and capital liquidity and boost the development of the State bond market. The average term of State bonds should be extended to 4-6 years by 2015 and 6-8 years by 2020, he said.
Dung asked for debt payment responsibilities to be fully performed, noting that there shouldn't be overdue debts to avoid affecting the country's international commitments.
He specified that the Government's debt mustn't exceed 25 per cent of total State budget revenue each year while foreign borrowing should be lower than 25 per cent of total export value. Foreign exchange reserves also needed to be double that of short-term foreign loans annually.
Dung urged the country to speed up the development of the domestic capital market and actively take part in the international capital market, in addition to strengthening risk supervision for national borrowing, especially State corporation debt.
He said appropriate mechanisms for public-private partnership and other investment co-operation models, such as build-operate-transfer, were needed to better mobilise capital from the society for infrastructure development.
These forms should be effectively exploited to gradually replace ODA sources, which were tending to decline, and ease the burden on the State budget, he said.
Work starts on flats for low-income earners
The Viglacera Corporation turned the first sod yesterday on construction of apartment buildings for low-income earners in Dang Xa New Urban Area in Ha Noi's Gia Lam District.
The project, with an estimated investment of VND700 billion (US$33.3 million), will provide 1,500 apartments, each with an area of 30-50sq m worth VND300-500 million ($14,200-23,800).
The construction is expected to be completed in next year's second quarter.
In addition, investors planned to build schools, a kindergarten, supermarkets and other infrastructure facilities in the new urban area.
Tastier, old-style bao thai rice fights back
One of the oldest and best strains of rice in Viet Nam, bao thai, is being pushed to the edge of extinction by modern, genetically-modified varieties that do not produce fertile seed and have to be regularly imported from China and other places.
Le Thi Hai Yen, a rice farmer from Kim Ngu Commune in Na Ri district in the northern province of Bac Can, said her family had been growing bao thai rice for 40 years because it gave a high yield.
In addition, it was also drought resistant and suited conditions in the mountainous province. However, in the last five years, her family had reduced the acreage under bao thai rice for one simple reason: it takes 160 days to reach maturity while hybrid varieties take only 110-120 days.
According to Yen, bao thai rice grown in Bac Can was of high quality and flavour so its wholesale price was VND 6,000-8,000 per kg ($50-55 cents) higher than the price for other rice varieties.
Defending her choice to grow bao thai, Yen said that they did not need much fertiliser. Far fewer seeds were needed – about 50 per cent less – because each produces a highly productive, multi-stemmed plant.
"To fertilise 1,000 square metres of bao thai rice, it costs about VND 600,000 ($28), about VND 100,000 less than compared with hybrid varieties," she says.
That's not all. Yen said that with the old variety, farmers could use seed from their own paddy crop, while the seeds for hybrid varieties had to be imported each year form China.
Yen said another benefit of the bao thai variety was that each 100kg of paddy rice produced between 70-80kg against 60-65kg for other varieties.
Based on the benefits of bao thai rice, the Centre for Sustainable Rural Development (SRD) and the Bac Can Provincial Plant Protection Department have conducted a pilot project on growing bao thai rice on Yen's farm.
According to Truong Quoc Can, deputy director of the Centre for Sustainable Rural Development (SRD), the land in Bac Can is highly suitable for growing bao thai rice variety.
"This variety is very popular with people living in the northern region because of its flavour," Can said. He added that a survey showed that the rice grown in Bac Can was renowned both inside and outside the province.
"This is one of reasons that the provincial People's Committee has supported the conservation and invigoration of the growing of the pure variety," said Can.
However, according to experts from SRD, to further develop the bao thai rice trademark, the province should invest in defining, conserving and maintaining the high quality of the variety. This is to ensure a steady supply of seeds so that locals do not have to switch to inferior outside varieties.
Nguyen Ba Quan, director of the Bac Can Plant Protection Department, said rice cultivation supplied up to 70 per cent of household income in the province. Total land under rice was 21,752ha, of which 10,000ha were dedicated to bao thai.
"For the last 40 years, the variety has been a main contributor to the province's food security. That's why we want to register it under the name "bao thai cho Don" (Don market bao thai). We'll develop a project to protect the name," Quan said.
Ben Tre Province to aid coconut farmers
Ben Tre Province, where located the country's most important coconut growing area, has decided to provide financial assistance of VND80 billion (US$3.8 million) to coconut farmers since the price of their products has declined dramatically this year, affecting their lives.
Nguyen Thanh Phong, secretary of the Ben Tre Party Committee, said farmers would be provided with 100kg of fertilisers, worth VND1.5 million, per hectare of coconut grove.
Besides, farmers who plant cacao or raise shrimp in coconut orchards will be fully subsidised, he told Sai Gon Giai Phong (Liberated Sai Gon) newspaper. Cacao and shrimp are two items that Ben Tre has encouraged farmers to develop.
Since October the price of dry coconut (the whole nut) has fallen by almost nine times to VND15,000-20,000 per dozen because of a decline in global demand and prices.
Meanwhile, the area under coconut around the Cuu Long (Mekong) Delta, including in Ben Tre, has increased on the back of high prices in recent years.
Many farmers are now stuck with large harvests, forcing many of them cut down their coconut trees.
Ben Tre exported only about 26.5 million coconuts worth $21.2 million in the first half of this year, down 51 per cent and 55 per cent in quantity and value terms from the same period last year.
Phong said coconut played an important role in Ben Tre's economy and social security since it provided livelihood for more than 163,000 families, or 40 per cent of the province's population.
The nuts account for a fifth of the province's agricultural output value, he said.
The province has asked the Government to add coconut products to the annual national trade promotion programme to help exporters find new markets, recognise coconut as a national industrial tree, and create a comprehensive coconut zoning plan, he said.
Ben Tre also wanted the Government to make it the national hub for research, technologies, and eco-tourism related to coconut trees, he added.
Ben Tre has 55,000ha of coconut groves, or 35 per cent of the country's total area, and an annual output of 430 million nuts.
Tra Vinh Province, the country's second largest coconut grower, has also decided to provide subsidies of nearly VND20 billion ($950,000) to more than 40,000 farmers to buy fertilisers.
Tran Quoc Tuan, deputy director of the province's Department of Industry and Trade, said the support was aimed at preventing farmers from chopping down coconut trees.
The Ministry of Finance has decided to scrap the 3 per cent export tax on whole coconut from September.
Cost-cutting at Vinacomin spells pay cuts for employees
Vietnam National Coal Mineral Industries Holding Corporation Ltd. (Vinacomin) said that it has cut 10% from staff salaries compared to last year, and there may be more to come.
Nguyen Van Bien, Vinacomin Deputy Director, said that the company slashed costs to ease its financial difficulties under instruction of the Prime Minister and that salary cuts were inevitable.
He added that Vinacomin would only be able to ensure the continued rates from 2011 for pit workers.
At a recent meeting to review the group’s performance in the second quarter, Bien said that the average salary of Vinacomin employee was just VND7.2 million (USD342.8) per month compared to VND7.7 million (USD366.6) in 2011.
According to the group's management board, despite making higher profits than the year before, there were no plans for those profits to be reflected in the pay of workers.
Vinacomin is seeking the PM's approval to cut coal export taxes to 10%. As of June their inventory stood at 8.5 million tonnes, pushing up borrowing costs. The rise in environmental fees and taxes have also added to manufacturing costs by around VND 2.2 trillion (USD105 million).
Beginning July 1, when electricity prices are increased, coal price also went up by 10-11.5%. Still, Vinacomin reported losses of VND8.5 trillion (USD407 million) as a result of selling lower than market prices. Many other State-owned corporations and groups, including EVN and PetroVietnam, have cut staff salaries by anywhere from 5% to 30% for similar reasons.
Traders hoard gas for profit
Many cooking gas traders have been hoarding large stocks, causing a serious shortage in the market.
In HCMC, the gas traders have increased prices by VND10,000 (USD0.48) per 12 kilo cylinder.
Le Thanh Binh, a retail trader in HCMC, said that if one gas company raises their prices all of the retail traders will follow. "Consumers shop around for the best prices," he explained.
Consumers have been advised by traders to buy gas now, since prices will likely increase by VND40,000-50,000 by August.
Tran Cong Thanh, an owner of gas distribution company, said that since July 20, many enterprises have suddenly reported shortages and increased their prices. Some other gas companies have kept prices stable, but cut 40-50% the amount of gas to their agents. "Many agencies have been asking for double the volume but we just don't have enough to supply their demands, not to mention the fact that the containers also seem to be disappearing. Now we are only holding about a third of the gas as normal," he said.
Deputy Director of Thu Duc Gas-Liquefied Petroleum Distribution Company, Chu Van Duc, said the only reason for increasing selling prices to agents has been a serious shortage.
The director of another gas company also said that, though he had placed orders for 300 tonnes of gas with Petrol Vietnam Southern Gas JSC., a distribution company run by Dung Quat oil refinery, they would not fill his order.
The shortage was caused when the price of gas on the international market fell early this year by nearly VND100,000 per 12-kilo cylinder. Gas companies also limited their imports, waiting for the world price to fall further, but prices on the world market suddenly shot up. The result has been several companies hording gas to make a profit.
According to some gas traders, the situation in the northern and central regions is even more complicated. In the central region prices have increased by VND20,000-30,000 while the prices in northern region is up by VND12,000-15,000 per cylinder.
Property developer faces court case for land sale violations
Dozens of people, who have bought land plots in Danang City from Quoc Cuong Gia Lai JS Company and have yet to receive their plots have decided to sue the company.
According to petitions to the People’s Court of Lien Chieu District, they paid entire fee for the land for the company’s Trung Nghia residential area project; however, they have not yet received land and ownership certificates and been given land.
Mrs. L.T.L.T. in Thanh Khe District, Danang City, said Quoc Cuong Gia had agreed to sell her two 125 square metre land plots worth VND3.62 billion (USD172,380).
Mrs. T was required to transfer VND2.5 billion (USD119,000) to the firm’s account and the remainder to the individual account of General Director of the company Nguyen Thi Nhu Loan. She paid the whole sum to the company on August 22, 2011.
After that, Mrs. T bought another land plot from the company at VND1.65 billion (USD78,571) under the same payment scheme.
However, to date, the firm has not completed the land ownership procedures for her despite her requests.
Mr. Ma Thanh Vinh in Thanh Khe District said, “We bought a VND115-square metre land plot from Quoc Cuong Gia Lai at over VND1 billion (USD47,619). We were asked to transfer VND690 million to the company’s account and the rest to Mrs. Loan’s personal account. We received the ownership certificate on July 15, 2011, but to until now, have not yet received land to build a house.”
Dozens of potential home owners face the same problem after paying tens of billions of VND. Many of them have had to paid the entire costs, have received the ownership certificates, but not been given land so have had to hire a house to live.
The People’s Court of Lien Chieu District said they would ask the two sides to meet for mediation, and if the situation is not resolved, the case would go to court.
Speaking with Dantri/DTiNews reporter, Mrs. Loan admitted to the late transfer of land to the customers, explaining that it was due to seeking authority approval for electricity and water installation.
She also added that, only 30% of the customers have paid the entire sum, with the remainder paying a small deposit for over 53,000 square metres of the project.
“We have sent letters to the customers about the preparations for the transfer. By August 15, we will start providing land to the households which have paid,” she noted.
Tokyo Keiki to anchor in Danang
Japan’s Tokyo Keiki Company last week announced it would like to establish a subsidiary company in central Danang city.
Luong Minh Sam, head of Danang’s Representative Office in Japan, said: “Last week, Motoshi Mitobe, vice chairman of Tokyo Keiki Company brought the decision to invest in Danang city, Vietnam out into the open.”
According to Sam, the $40 million Tokyo Keiki Precision-Technology factory project would specialise in manufacturing hydraulic equipments and some related high-tech products. Mitobe said Tokyo Keiki Company planned to submit an application to set up this company to Danang authorities this month.
In the first stage, the company will rent a workshop in the city and operations will begin in April 2013. Then in 2014, it will move to a newly-built facility covering 30,000 square metres in Danang Hi-Tech Park.
At first, the new facility will produce electromagnetic valves with 50,000 small-sized products per month and 5,000 medium-sized per month. Components needed for the facility’s production will be mainly imported from Japan and once operating, all the facility’s products will be exported to the US, Europe and some Asian countries namely China and Korea.
“Danang offers relatively developed infrastructure and stable human resources which is suitable for development of high-tech sector. In addition, its proximity and access to the international airports and maritime ports are deemed advantageous as a distribution point to other Asian countries. In the future, there will be a direct airline from Japan to Danang city,” said Mitobe.
Japan’s Tokyo Keiki Company was founded in 1896 with 25 research and development centres established in Japan and 60 subsidiary companies set up around the world. In 2011, the company’s revenue reached more than $524 million and expected to hit $569 million in 2012.
Sam said that Danang aimed to draw more Japanese investors to do business in the city. According to the statistics of the Ministry of Planning and Investment’s Foreign Investment Agency, by July 20, 2012, Danang was home to 223 foreign invested projects with total registered investment capital of $3.55 billion.
The city licenced 14 new foreign invested projects worth $57.13 million between January and July 20 this year.