Trung Nguyen Coffee Corporation’s G7 instant coffee has become the dominant brand in the local instant coffee market, according to a survey by the market research service provider AC Nielsen.
Last year, G7 brand of Trung Nguyen Coffee Corporation held a dominating market share of 38%, followed by Nescafé, Vinacafé and Passiona. The brand captured a market share of 40% in the first quarter of this year, the coffee maker reported at a press briefing on Wednesday.
AC Nielsen conducted the survey on 1,413 retail outlets in six big cities, including grocery stores, supermarkets and convenience stores.
Trung Nguyen Corp’s coffee processing plants are running at full capacity in a bid to satisfy the domestic demand and export, said Dang Le Nguyen Vu, chairman of the company.
“We plan to upgrade the capacity of a processing plant that has been bought from Vinamilk by an additional 30% and consider upgrading some others in an effort to lift up output,” Vu said.
HSC secures biggest stock brokerage market share
Ho Chi Minh Securities Corporation (HSC) held the biggest stock brokerage market share of 20% in the second quarter, show recent reports by the Hochiminh Stock Exchange (HOSE) and the Hanoi Exchange (HNX).
The report by HOSE says the market share of HSC on the southern bourse accounted for 11.47%, up nearly half a percentage point from the previous quarter.
Meanwhile, the report puts the brokerage market share of Saigon Securities Inc. (SSI) at a mere 8.06%, down from the 11.74% recorded in the first quarter. ACB Securities Co., (ACBS) ranked third with 6.25% share, dipping by up to four percentage points versus the first three months of the year.
Surprisingly, Phuong Nam Securities Co. came in fourth with a market share of up to 6.2%. This is the first time the firm has entered into the top ten on the southern bourse.
KimEng Securities Co. and Viet Dragon Securities Co. (VDS) ranked fifth and sixth, making up 5.3% and 5.7% respectively. Compared to the first quarter, three securities companies – Vietnam Capital Securities Co. (VCSC), Sacombank Securities Co. (SBS) and Vietcombank Securities Co. (VCBS) – had failed to stay in the top ten.
The total market share of the ten leading stock brokerages reached 57% while that of the remainder accounted for 43%.
HNX has also announced the brokerage market share of the second quarter, with HSC also dominating the northern market with 8.42%, taking the firm’s market share on the two bourses to 20%.
Bigger M&A deals in sight
Experts have forecast there will be high-value mergers and acquisitions (M&A) in Vietnam in the second half of this year and next year.
A research project conducted by Stoxplus Financial Media Corp shows that investors from China, Russia and India are inclined to acquire controlling stakes in Vietnamese companies.
Japanese investors, who used to mainly hold minority stakes, are looking to raise their shareholdings.
Of the total M&A value of US$6.3 billion recorded last year, some US$2 billion was spent on minority stakes while US$4 billion was used to secure majority stakes. This is different from the years before that, as M&A investors began to acquire more majority stakes.
Most M&A deals cost less than US$5 million but the number of transactions worth over US$30 million each is picking up, accounting for 25% of the total. Especially, there are nine M&A deals costing more than US$100 million each.
The Stoxplus research conducted from January 2011 till March 2012 shows different figures about M&A activity from the previous reports.
Particularly, the total M&A value in Vietnam last year amounted to US$6.3 billion, much higher than the figure revealed at the 2012 Vietnam M&A Forum, which is US$4.7 billion. This figure is also 3.7 times higher than the value of US$1.8 billion in 2010.
In addition, the research indicates M&A deals in the first quarter of 2012 reached around US$2 billion versus US$1.5 billion announced at the aforesaid forum.
In 2011, Japan took the lead in terms of M&A value with US$941 million, but Chinese investors are boosting M&A activity here in the country.
With only five deals, Chinese investors, including those from Hong Kong and Taiwan, came in second with a total value of US$723 million. Those from other nations like the U.S., South Korea, Russia and Germany followed.
Experts said although a legal corridor for M&A activity is still inadequate, it has become a lucrative growth market.
Hoang Manh Thang, senior manager at Ernst&Young Vietnam, predicted there would be bigger M&A deals between now and 2013.
He explained investors previously bought stakes of 5-15%. Now they prefer majority stakes to secure a bigger voice in day-to-day operations of the enterprises they buy into, pushing up the value of M&A deals, said Thang.
Renovation pushes small traders to hardship
The life of small traders in Hanoi's Dua Market has become harder over the last seven years because of the renovation of the market.
At the O Cho Dua junction, near De La Thanh Street a huge karaoke bar is located, but the old locals can still remember the bustling Dua Market that was once located here.
Seven years ago, the market was rebuilt, to be more clean and organised. But seven years later, a bank and the karaoke bar have appeared, while temporary markets are scattered nearby. The area that was was slated for a market is now a parking lot.
Thuy, a trader who has worked at the market for 20 years, said she rented a place near the Kim Lien Dyke for VND3.5 million (USD167) per month. Her customers have followed her there.
"We couldn't afford a place inside the building, and even if we could afford it, they don't allow us to sell fresh meet. Some people have pooled money together to buy stalls, but usually it doesn't last long because business is so slow. Many of them had to sell their stalls at half price," Thuy said.
The market near the dyke is smaller but still provides most of the goods of the previous market.
"There were complaints that the temporary markets caused traffic jams, so they built a permanent one. But since then the mobile markets have reappeared more. Where else are we supposed to do business?" she added.
Some other traders gathered at an alley far behind the new building, but it lacks the open-air feel.
Another trader said, "They told us 'We're opening a new market for you.' And then they chased us away."
There was no compensation provided to traders from the old market.
Hanoi has high hopes for the future
The capital city of Hanoi has set a target of reaching a per-capita income of around USD 7,500 a year by 2020.
The target was announced at a July 4 meeting chaired by the Secretary of the Municipal Party, Committee Pham Quang Nghi, on plans to implement the Politburo’s Resolution No. 11 on the capital city’s development and the way forward to 2020.
During this period, Hanoi will strive to achieve an average economic growth of 12 percent a year. Quality services will play an essential role in the city’s economic structure, the rate of schools up to national standards will reach approximately 70 percent and 75 percent of workers will receive training.
The city is also targeting having two-thirds of all communes up to the new national rural standards and the entire population having access to clean water by 2020.
Public transport is expected to meet about 45 percent of demand while the ratio of urban woodland will reach 10-12 square metre per head of population.
To realise these targets, Hanoi’s Party Committee set out five major solutions, focusing on making the most of the city’s potential and resources, speeding up administrative reforms and improving the efficiency of State management.
They city will complete and draw up policies and procedures, especially those that concern the development of commodities, services, real estate, the labour market, and science and technology. It will also make moves to attract more talented employees and capital investment to develop the city’s infrastructure.
By 2020, the authorities want Hanoi to be a modern national political and administrative centre; a hub for culture, science, education, economics and international transactions; and have enough impetus to develop the Red River Delta.
The city will ensure that the material and spiritual lives of the city’s residents are improved, defence and security are consolidated and a stronger political system is in place.
On concluding their meeting, Nghi said that all the ideas had reflected a high decree of unanimity and emphasised on the need to continue fine-tuning policies and procedures and boost administration reforms to overcome barriers that hinder the capital’s development.
National carrier looks for greater lift
National flag carrier Vietnam Airlines hopes a business restructuring plan will allow it to grow into strong region-wide transport group.
Minister of Transport (MoT) Dinh La Thang said Vietnam Airlines’ business shake-up plan, once rubber stamped by the prime minister, could frame the state corporation’s major development directions in the next eight years.
Its restructuring plan for 2012-2020, after six months in the making, was recently submitted to the prime minister by the MoT.
To turn Vietnam Airlines into strong regional transport group, its restructuring
plan will be based on restructuring business areas, restructuring business and product plans and strategies, restructuring organisation and labour and restructuring investment, finance and corporate governance.
Earlier, in its restructuring draft plan submitted to the MoT in April 2012, it said at completion it would consist of four airlines, 15 subsidiaries and 12 affiliates which were formed from existing businesses parallel to six new ones.
Leveraged on its restructuring plan, Vietnam Airlines aims to see its business targets shooting up during 2012-2020. Particularly, by 2020 the group’s owner capital value would reach $1.41 billion and during this eight year period its revenue from aviation transport would climb to $43.5 billion, associated profits $630 million and total pre-tax profits $1.08 billion.
Besides, business efficiency and impact of businesses having its venture capital on VNA operations are set top criteria when it comes to investment portfolio restructuring.
The state corporation is also mulling divesting from securities, insurance, banking, real estate businesses and those reporting the pretax profit/chartered capital rate of less than 10 per cent. Divestiture slated to be finalised before 2015.
Its initial public offering was set by the MoT to take place before the end of 2013. It also envisages hiking chartered capital through share issuances with state capital amounting 70-80 per cent of total after equitising.
Ministry to set up dept. to supervise state capital
The Ministry of Finance is seeking permission from the government to set up a general department to manage and supervise the state capital and assets in state-run companies.
“The department will look after the effectiveness of the use of state capital, especially in the state-owned enterprises (SOE),” Deputy Minister of Finance Do Hoang Anh Tuan said at a press briefing yesterday.
Tuan said the managing system over the SOEs over the last few years has been inconsistent and ineffective, creating the necessity for a general department to watch for and uncover economic offences at the enterprises in a timely manner.
The supervisor will also monitor SOE’s loans, and seek to have them publicize their operational and financial statuses to ensure healthy competition and equality between state-run companies and those in the private sector, added Tuan.
Tuan said 80 officials from the Ministry of Finance will be tasked to work in the SOEs to supervise their operations.
“These officials will still work for the finance ministry, and will not receive extra wages from the enterprises,” he said.
The state-run companies in Vietnam currently have a total equity of VND653 trillion (US$31.3 billion), and a debt to equity ratio of 1.67, according to figures obtained by Tuan.
“That is not a high ratio compared with those from other countries, but the problem lies in seven SOEs whose debts are five to seven times higher than their equity,” he said.
“These firms are set for privatization to increase their operational effectiveness.”
In regard to the unequal footing between the public and private sectors, Tuan said while private businesses have to suffer the burden of bank loans, the SOEs are enjoying VND653-trillion in capital from the government.
“SOEs are also allowed to use the post-tax revenues from state capital, which is sometimes as large as VND100 trillion, for reinvestment activities,” he added.
“It’s obvious that SOEs do not have to bear the loan pressure, while they also have annual additional capital without paying interest.
“The inequality also creates no pressure for SOEs to strengthen their effectiveness.
“We should look into the issue to force the SOEs to healthily compete with the non-state businesses,” he concluded.
More effort needed to boost exports
Most of domestic businesses going bankrupt in recent times are private ones which have been seriously affected by the impact of economic slowdown.
According to a recent survey by the Ministry of Planning and Investment, 66 percent of businesses say they have to reduce production because of low consumer demand, 53.6 percent put this down to the lack of capital and 50 percent claim to be running short of input materials.
Judging by export performance in the first six months of this year, economist Pham Chi Lan says it is urgent for domestic enterprises to get a leg up on international competition.
Despite Vietnam’s constant export growth, they are losing ground to foreign enterprises, Lan says.
The biggest problem for exporters is that 42.2 percent of them want to borrow capital from commercial banks in stead of mobilizing capital from equitization and stock exchange deals.
This is quite contrary to the principle of promoting medium- and long-term investment in the form of initial public offering (IPO) and equitization.
Other economists insist that export businesses should take the initiative to work out their own plans and translate them into reality.
Pham Dinh Toan, Deputy General Director of the OSB Investment and Technology Joint Stock Company, says many domestic businesses are shifting to online exports.
In his opinion, they should restructure their operations in the first place before seeking new markets to supplement the traditional ones.
Vietnam has great potential for e-commerce to develop. There are 134 phones per 100 people on average, 35.29 percent of its population use the internet, 15 percent apply for third-generation (3G) wireless mobile communication services, and 38 million have ATM cards. Le Van Loi, Director of the Institute of Information Technology for Business (ITB) under the Vietnam Chamber of Commerce and Industry (VCCI), says 96 percent of domestic businesses are of small and medium size with limited investment in information technology.
The best solution for them, he suggests, is to promote their sales and marketing in a practical way if they want to stay alive in the time of e-commerce.
Binh Duong boasts a record of FDI attraction
Binh Duong has attracted US$2.83 billion foreign direct investment (FDI) since earlier this year, double this year’s plan.
Currently, there are 2,070 FDI projects with a total capitalization of US$16.838 billion.
Among 51 new projects in the reviewed period include the Tokyu Group’s project worth US$1.2 billion, the Dai Nippon Printing Group (US$35 million), Vietnam Biomin Ltd Company (US$8 million), Net Hoa Company (US$5.2 million). 57 additional capital projects include Sunsteel joint stock Company (US$120 million), United International Pharma (US$6 million) and Liwayway Food Industry Company (US$14.5 million)
This is attributed to local efforts to call for investment from potential markets, such as Japan and the Republic of Korea (RoK).
Most of the projects are focused on services, infrastructure construction and urban development.
Tran Van Lieu, head of the management board of the provincial industrial parks, said in order to attract foreign investors, the province has spared no effort to improve industrial and transport infrastructure, social welfare, human resources training and urban development.
The province has closely coordinated with universities and colleges in ensuring an abundant supply of human resources to both domestic and foreign businesses.
Private sector drives economic reforms
Businesses are the driving force behind economic reforms at the provincial level in Vietnam, states a report from the Vietnam Chamber of Commerce and Industry (VCCI) and the UK Institute of Development Studies (IDS) at a seminar in Hanoi on July 5.
According to the report, a dynamic government always recognises the role businesses play, while the private sector always looks for support from local authorities.
Both domestic and foreign-invested enterprises partly form the core of economic reforms, said the report, however, smaller sized enterprises have less influence.
VCCI Vice Chairman Hoang Van Dung said there are more than 1,000 state-owned and 13,000 foreign-invested enterprises nationwide. The provincial authorities now have more power in steering the economy and supporting enterprises.
Professor Hubert Schmitz at IDS, Sussex University in England said that the business community, especially the private sector, plays an important role in enhancing reforms in the provinces that have improved the quality of local economic management.
Vietnam has surprised the global community thanks to the speed of its economic reforms, he said, adding that decentralising certain powers from central to provincial government has contributed to the success.
Dau Anh Tuan, Deputy Director of VCCI’s Legal Affairs Department, also clarified the role the provincial competitiveness index plays in boosting reforms.
The report is jointly made by VCCI and IDS, based on an analysis of 120 interviews with businesses from every economic sector in Bac Ninh, Hung Yen, Dong Thap, Ca Mau provinces and Hanoi as well as a quantitative analysis in 63 cities and provinces nationwide.
VCCI establishes Vietnam-Latin America Business Council
The Vietnam Chamber of Commerce and Industry (VCCI) announced the establishment of the Vietnam-Latin America Business Council on July 5.
The Council will help strengthen business cooperation between Vietnam and Latin America, and at the same time will gather Vietnamese businesses that are interested in expanding markets in Latin America, said Vu Tien Loc, VCCI Chairman.
The Council will serve as a policy dialogue mechanism between governments and businesses, as well as an organization that will link enterprises, he said.
He said it marks a new development in the relations between the two business communities and the long-term partnerships between them and their governments, hoping to boost Vietnam-Latin America commercial and economic ties.
Vietnam wants to strengthen its traditional friendship with Latin American nations, especially in trade, investment and tourism, Loc stressed
In addition to flourishing political and diplomatic ties, Vietnam and Latin America have great potential for economic development as they are strong in the areas that can supplement each other.
These areas include oil and gas exploration and processing, mineral exploitation, hydro, wind, and nuclear power, bio-products, agriculture and farm product processing.
Vietnam has penetrated 33 markets in the Latin American region and annual two-way trade turnover has increased significantly from around US$2 billion in 2008 to over US$5.15 billion in 2011.
Vietnam’s major export items to these markets include footwear, garments, electronic devices, home appliances, rubber, electric engines, optical equipment, rice, coffee and coal, while it imports wood, paper pulp, raw leather, soybeans, fish powder, crude copper, steel foil, cotton and automobile parts.
However, aside from its traditional trade partners namely Cuba, Brazil, Argentina, Chile and Venezuela, commercial relations between Vietnam and other countries in the region is still very limited due to language barriers, geographical distance and a general lack of information.
Moreover, Vietnamese and Latin American businesses have not had much chance to meet because op the relatively large costs for market research, Loc concluded.
Slow reaction in reducing taxi fares
After a further fall in petrol price for the second time in ten days, it is only the Mai Linh Taxi Company that has reduced fares by VND200-500 per kilometer from July 2 so far, while other companies are still deliberating.
As per calculations, after the last two reductions since June 21 of VND1,300 a liter, taxi companies should decrease fares by a minimum VND300 a kilometer.
Representatives of some taxi companies spoke with Saigon Giai Phong on July 4, saying they were still considering a reduction in fares.
Nguyen Quoc Chien, head of the Price Board under the Department of Finance in Ho Chi Minh City, said the department is preparing a document to send to businesses and transport associations, asking them to reduce fares.
After July 31, the above department will coordinate with the Departments of Transport and Taxation in the City to inspect businesses; and any business found not slashing on fares will be penalized as per Government regulations.
Ta Long Hy, chairman of the HCMC Taxi Association and director of Vinasun Taxi Company, said that the volatile nature of petrol pricing makes it costly for businesses to adjust fares so frequently as meters in taxis have to be reprogrammed every time.
Besides, world petrol price is again on an upward trend and the Ministry of Finance has hiked import tariff on petrol to 12 percent, which might again lead to an increase in domestic petrol price.
As a result, taxi companies are still deliberating over the issue of fare reduction. If petrol price does not go up in the next few days, they will decrease fares, Mr. Hy added.
Site clearance delays hold up main traffic projects in HCMC
The progress on some important traffic projects in Ho Chi Minh City have been sluggish due to delays in site clearance, as is the case of the Tan Son-Nhat Binh Loi - outer ring road project and the HCMC-Long Thanh-Dau Giay Highway.
The nearly 14km Tan Son Nhat-Binh Loi outer ring road, which begins at Truong Son Road in Tan Binh District and ends at Linh Xuan Intersection in Thu Duc District, is being completed in sections due to delays in site clearance, and execution units have to wait for land clearance before resuming work.
Fifty-three households in Go Vap District have not handed over their land for the project. Thu Duc District has 35 households and Tan Binh District has 30 households along Hong Ha Street, who still have to be relocated.
Site clearance delays also obstruct construction in some sections of the 55km HCMC-Long Thanh-Dau Giay Highway route, being implemented in two parts. The first part is a 4km stretch linking the highway to East West Highway, which has yet to take off. The second part too is being hindered by site clearance delays.
Le Manh Hung, director of the HCMC-Long Thanh-Dau Giay project, said that the project’s progress has been affected by some households refusing to budge from the site.
According to the HCMC Department of Transport, several projects are lying incomplete due to similar delays.
Of these is also the project to broaden the Hanoi Highway, which runs across Districts 2, 9 and Thu Duc. The site clearance has been completed in District 2 but not in District 9 and parts of Thu Duc District.
Investors of the project, the HCMC Infrastructure Investment Joint Stock Company, said that its completion date may have to be extended until 2014.
At meetings on the progress of these projects, Nguyen Huu Tin, deputy chairman of the HCMC People’s Committee, has many times tasked the Transport Department to complete Belt Road No.2 by 2012.
However, the project is still incomplete at two sections, one is the 9km stretch from Rach Chiec 2 Bridge to Go Dua Intersection and the second is the 5.2km stretch from An Lap Crossroad to Nguyen Van Linh Highway.
Another concern is that roads connecting highways have not been properly funded and have little or no further budget. For instance, the HCMC-Trung Luong and East West Highways opened to traffic two years back, but there is no road to link these two highways, as there is no more capital to construct them.
In related news, the HCMC People’s Committee has made a list of 14 key traffic projects to call for more foreign investments during the phase 2011-2015.
According to the Department of Transport, the City needs upto VND46.8 trillion (US$2.23 billion) to invest in traffic infrastructure in 2012 alone, double that in 2011. However, it now faces a shortage of VND5.6 trillion.
Hanoi to confiscate 8.2 ha of land
The Ha Noi People's Committee will issue a land confiscation decision based on 8.2ha of eight businesses in the city this month, according to reports.
Vice Chairman of the People's Committee Vu Hong Khanh said all eight firms were found to have violated land laws. As a result, the city has decided to confiscate their properties and issue fines.
The city's property transaction centre and land development fund will make a budget proposal for land clearance and reimbursement for the businesses.
With 8.03 ha of land planned for confiscation, Nam Cuong Joint Stock Group holds the majority. Nam Cuong's property covers seven villages and one town in Thach That District. The land was approved for the Thach That urban residential area. However, after 46 months, inspectors found that the group had failed to pay for the land clearance of local residents and land use taxes. The Thach That district People's Committee will call on local residents to continue using their land in accordance with the law.
Other businesses subjected to the land confiscation include Education Equipment JSC, a mechanical factory under Vietnam Automobile Corporation, a joint stock company under Agribank Vietnam, Vina Apollo Tech, Ha Son Binh Foodstuff, Huong Dat and Thang Long Bridge No 5.
Rice exports decrease in first half
Rice exports fell in both volume and value terms in the first half of this year, the Viet Nam Food Association has said.
Exporters shipped 3.4 million tonnes for a free-on-board (FOB) value of US$1.5 billion, a reduction of 15.1 per cent in value and 12.7 per cent in quantity.
Speaking at a meeting held in HCM City yesterday to review rice exports in the first half and draw up plans for the second, Pham Van Bay, the VFA's deputy chairman, said the average price was $458.9 per tonne, a year-on-year decrease of $13.03.
China was the largest buyer, followed by Africa and the Philippines, he said.
High-grade rice accounted for nearly half of the shipments – a 52.6 per cent increase – as Viet Nam took advantage of the higher prices of Thai rice to boost its own exports, he said.
India's resumption of export and the entry of Myanmar into the low-grade variety market shrunk the market share of Vietnamese low-grade rice, since they both offered low prices.
VFA chairman Truong Thanh Phong said since export of low-grade rice was set to become harder, authorities should persuade farmers to reduce cropping of these varieties.
Bay said both the Food and Agriculture Organisation and the US Department of Agriculture had forecast global output to outstrip demand this year.
"With the fierce competition that would bring, prices are unlikely to harden during the rest of the year," he said.
India would continue to sell at low prices to reduce its large stockpile, he said.
Because of its higher prices, Thailand had accumulated a large inventory, and there would be pressure on the country to liquidate it, he said.
Deputy Minister of Industry and Trade Nguyen Thanh Bien, said if Thailand slashes prices to boost exports, it would be a big hurdle for Viet Nam's rice exports.
He urged the association to keep a close eye on global developments and its members informed.
He urged exporters to promote the Vietnamese rice brand in the global market.
Delegates at the meeting agreed that China would continue to be a key export market for the rest of this year, but warned that there would be payment risks attached to that market.
They hailed the setting up of a trade promotion centre in China, saying it would help resolve issues related to export.
South Korea and Japan were promising markets for Vietnamese rice, Le Tuan, director of the Vinh Long Import-Export Joint Stock Company, said.
But they set the quality bar very high, he said.
So, to find new markets for Vietnamese rice, enterprises should work with farmers to produce rice that meet the two nations requirements, he added.
Viet Nam targets exports of 2.3 million tonnes in the third quarter, including 800,000 tonnes this month.
City suffers as firms delay payment of land-use fees
Nearly one hundred enterprises in HCM City owe land use fees and land rentals that amount to thousands of billions of dong, according to the municipal Department of Natural Resources and Environment.
The department says 98 agencies and enterprises in the city have not yet fulfilled their financial obligations, including the payment of land use fees and rentals, after they were allocated land by the city to develop their real estate projects.
It has asked the municipal People's Committee and the Tax Department to co-operate with it in taking drastic measures to collect the debts, saying this would provide badly needed funds for the State Budget and protect people's benefits.
The department has petitioned the city government for permission to revoke land from those firms that have intentionally not paid the land use charges and rentals they owe.
A department representative who declined to be named said that the delay in payment has caused large revenue losses.
It has also badly affected the rights of people, particularly those who had bought properties from projects for which owners have not yet paid their dues.
"The fact is that some real estate developers who have not yet paid their dues have been selling their products," the department said. This means that people who bought land from these projects are not allowed to build houses on their property or sell it.
Meanwhile, representatives of some firms that have delayed payment of their dues blame the delay on current administrative procedures, which they say are too complicated.
"Another reason for the delay is that the current charges were calculated on the basis of market prices under Decree No 69/2009/ND-CP, which is beyond their financial capacities," the representatives said.'
Aquaculture farmers find going tough
The export turnover of aqua products in 2012 is likely to reach US$6.8 billion, about $200 million or 12 per cent higher than the previous forecast.
However, the news is not all good for many farmers who can't get loans and have been forced to temporarily stop production. The price of tra fish has also dropped and the price of feed risen in the same period.
According to Vu Van Tam, Deputy Minister of Agriculture and Rural Development (MARD), export turnover in 1991 was $1.2 billion. In 2011 the figure had jumped to $6.1 billion.
Tam said in June this year, Viet Nam earned $550 million from seafood exports. This brought export turnover for the first six months to a remarkable $2.9 billion, an increase of 10.6 percent against the same period last year.
Nguyen Ngoc Oai, director general of the Department of Aqua Products Exploitation and Protection attributed the success to fishing units set up by fishermen.
"Since the new model was introduced last July, more than 2,400 fishing units have been established", said Oai.
However, the economic downturn in Europe has had a serious impact on Vietnamese aqua-product enterprises. The number of enterprises involved in export activities dropped 40 per cent in the first six months.
In addition, the export price of a kilo of tra fish has dropped to VND20,000 ($0.95) from VND22,000 ($1.05). Meanwhile the price of fish feed has increased by about 10 per cent (VND 23,000-25,000/kg).
This has cost farmers about VND5,000 a kilo and forced up to 60 per cent of households rearing tra fish in the Mekong Delta to temporarily stop production.
Duong Nghia Quoc, director of Dong Thap Province's Department of Agriculture and Rural Development, said part of the problem was a lack of capital investment.
"It is estimated that more than 80 per cent of tra fish farmers need cash, but high interest rates and a shortage of loan has hampered them," Quoc said.
Due to the shortage of capital, many Vietnamese enterprises are forced to lower the selling price of tra fillet from $3 to $2.6, making survival difficult.
Nguyen Danh Hien, director of the Minh Phu Aqua Product Company in Kien Giang Province said he needed about VND1 billion to raise one hectare of shrimps. However, he could only borrow up to VND30 million because he didn't have much collateral.
When he approached a bank for credit, he was told shrimp raising was too risky and banks didn't want to loan money.
To help farmers overcome difficulties, the Viet Nam Association of Seafood Exporters and Producers (VASEP) has asked the Government to urgently loan VND4,400 billion ($214.6 million) to tra fish farmers and VND6,000 billion ($293 million) to shrimp farmers.
VASEP wants the Government to levy an interest rate of less than 10 per cent a year.
Deputy Minister Tam said MARD would do its best to attract more investment from the foreign direct investment (FDI) sector.