Green future said to be in Viet Nam's reach

Pursuing green growth may seem a daunting task, but it is achievable if countries tackle political economy constraints, overcome entrenched behaviours and develop the needed financial tools, a World Bank report argues.

The report titled Inclusive Green Growth: The Pathway to Sustainable Development, released in Ha Noi yesterday, says that going green is necessary and actually affordable, debunking the myth the approach is a luxury most countries cannot afford.

"All countries, rich and poor, have opportunities to make their growth green. Green growth is not inherently inclusive but can be designed to be so," the report says.

"It is the only way to reconcile the rapid growth required to bring countries to the level of prosperity they aspire to with the imperative of a better managed environment," emphasised Country Director for the World Bank in Viet Nam Victoria Kwakwa.

Speaking at the green growth seminar to launch the report yesterday, Marianne Fay, chief economist of the bank's Sustainable Development Network said that the key message was that green growth would not be a panacea and "should be seen as a compliment to rather than a substitute for sound economic policies."

The report further elaborates that in the field of employment, green policies may create jobs but shortcomings in labour markets will not disappear just because environmental policies are adopted.

Fay said green growth was not all about creating jobs, in fact there would be jobless people in some industries so the government had to play an extremely vital role in minimising the social impacts during the transition phase.

Pham Hoang Mai, director-general of the Ministry of Planning and Investment's Department of Science, Education, Natural Resources and Environment, said that Viet Nam had already been working with donors, particularly the International Labour Organisation, to provide labour training to newly-generated or potential green industries.

The Washington-based development bank chief economist Fay said political economy considerations would be no less important because it would lay a foundation for feasible green policies.

The World Bank report also challenges governments to not only measure what is being produced but take into consideration what is being used up and polluted in the process.

It says natural capital, including farmland, minerals, rivers and oceans, should be featured on a country's growth model and should be incorporated into national accounting.

Small businesses lack needed support

Small and medium-sized enterprises contribute much to the country's economic development but have not received the support they need to become competitive, economists said.

Speaking at a conference yesterday held to discuss ways to support SMEs, which accounted for 97 per cent of the country's more than 540,000 firms in 2010, they discussed other countries' experiences in fostering small enterprises.

Nguyen Trong Hieu, economist and deputy head of the Ministry of Planning and Investment's Enterprise Development Department, called for focusing on eight vital areas including drafting a comprehensive legal system, financial assistance, adopting new technologies, developing human resources and management, developing links between small enterprises, and others.

SMEs, with their low competitiveness, did not have the capability to identify and grab business opportunities, he said, adding linkages and co-operation between themselves would help overcome this weakness.

But other economists disagreed saying Vietnamese SMEs were dynamic and flexible and only lacked a strategic business vision.

SMEs play an important role in a country's social and economic development, delivering jobs and livelihoods to the workforce.

With an estimated 400,000 new SMEs to be set up between 2011 and 2015, they will create 4 million jobs in the period.

The sector's direct contribution to the country's exports will be around 10 per cent.

It will also account for 40 per cent of the country's total investment, 30 per cent of GDP, and 35 per cent of tax revenues.

The seminar was organised by the Viet Nam Small and Medium Enterprises Association and the Ministry of Planning and Investment.

South Korea to buy more Delta produce

S.Korean firms have unveiled plans to buy more agricultural produce from Viet Nam, the Cuu Long (Mekong) Delta in particular.

At a seminar held in Can Tho on Wednesday, South Korean businesses said they needed to import large quantities of farm and fisheries produce because domestic supply cannot meet demand.

"The Mekong Delta is in an ideal producer of these items," they said.

South Korea has imported Vietnamese coffee and seafood in the past, and has been considering and buying rice and yet more farm produce from Viet Nam.

"The country wants to import around 50,000 tonnes of rice annually and is considering Viet Nam as a source because Koreans like glutinous, fragrant, unbroken grain," they said.

However, sometimes the rice quality was inconsistent, they said, describing it as the biggest weakness of Vietnamese exporters.

The seminar on investment and business co-operation between the two countries was organised by the Viet Nam Chamber of Commerce and Industry's Can Tho chapter and the Korea consulate in HCM City.

Nguyen Huu De, deputy director of the VCCI Can Tho, said eight of 13 provinces and city in the Cuu Long (Mekong) Delta have established commercial links with Korean partners.

Delta-based companies have exported seafood and farm produce like straw mushrooms, pineapples, and pineapple products.

But as of last year only four delta provinces – Long An, Vinh Long, Ben Tre, and Tien Giang – and Can Tho had attracted Korean investments, and that was worth just more than US$1 billion.

The VCCI pointed out that all these provinces and city were situated not far from HCM City.

Jang Jil, a commercial affairs official at the consulate, said to attract more Korean investors to other Mekong provinces like those to the west of the Hau River, transport infrastructure, including for waterway transport, had to be better developed.

Cipher to invest into digitalised signatures

The Government Cipher said it would invest VND250-300 billion (US$12-14.4 million) to provide 150,000 digital signatures from now until 2015 to secure online transactions between state-bodies and relevant authorities.

Nguyen Dang Dao, deputy head of the Government Cipher's technical department, said demand for entrusted electronic signatures at state bodies has increased in recent years due to saving time and costs.

He pointed out that the Ministry of Finance this year would need 9,500 digital signatures while the Ministry of Transportation, 30,000.

While the Government Cipher is the sole provider of digital signatures to state bodies and authorities, there are six enterprises which have provided digital certificates to the market including VNPT-CA, CA2, BKAV-CA, Viettel-CA, FPT-CA and CK-CA.

However, the number of businesses using the method remains modest as only those that declare taxes online or make electronic customs declarations registered digital signature.

According to VNPT-CA, the country's leading provider of digital signatures, over 100,000 local businesses now use digital signatures.

First used in the US over 20 years ago, the electronic signatures can be used to authenticate the identity of the sender of a message or the signer of a document.

Dalat flower franchise awarded to local farmers

Permission to use the “Dalat Flower” brand was granted to 14 orchid growers in the Central Highland city of Dalat on June 8.

The “Dalat Flower” brand was registered with the National Office of Intellectual Property (NOIP) in December 2011.

Flower producers awarded the three-year franchise are entitled to label their home-grown flowers with the “Dalat Flower” brand when they come on the market.

So far, 16 flower producers have been granted permission to use the “Dalat Flower” brand.

Schneider Electric rolls out solutions

Schneider Electric, a global leader in critical power and cooling services, yesterday announced its integrated data centre solutions to help local business adapt their data centres to meet their business needs.

The solutions could help enterprises view their facility and traditional IT space – from small server rooms to large IT rooms – as discrete environments.

This "interconnectedness" ultimately would have a crucial impact on a business's ability to respond to strategic decisions or future technology changes, a company official said.

Vietnamobile lauds Go Orange campaign

Vietnamobile has awarded prizes to 30 lucky customers who won VND30 million (US$1,400) in the Go Orange for Three Prosperous Years promotion. This is a special customer-dedicated promotion from Vietnamobile on the network's 3rd anniversary in April, with a total prize value of up to VND900 million ($43,200).

After three years of effort, Vietnamobile is now confident with the fourth largest market share in the country and a 10-million plus subscriber base. With good growth, the company is making a strong push forward in achieving its ambition of becoming the third largest player in the market.

Viettel promotes electronic tax filing

Viettel has officially provided a new incentives package on Certification Authority Digital Signatures and e-tax declarations known as Viettel-CA and VTax respectively.

The new package was launched to help businesses save 20 per cent in expenses each year.

The application of digital signatures and e-tax declarations online is mostly aimed at businesses. The Ministry of Finance set a target of having 350,000 firms in the country apply digital signatures by the end of this year.

Earlier, 56,000 companies conducted e-tax declarations online.-

Entertainment robot to conquer Spain

Viet Nam's brand new entertainment robot ‘Tosy' will soon conquer the Spanish toy market, according to the TOSY Robotics Company.

Teenage pop star Justin Bieber and Ho Vinh Hoang, founder and CEO of TOSY Robotics, presented mRobo at the CES in Las Vegas

Earlier, crowds attending the 2012 International Consumer Electronics Show (CES) in Las Vegas were full of admiration and amazement at the battery-operated musical Robot, the latest high-tech toy produced by the company based in Viet Nam, who introduced the mRobo for the first time in January at the CES.

Centre offers free website templates

Hi-Tek Multimedia Inc (DOT.VN), hailing from the US, has worked with the Viet Nam Internet Network Information Centre (VNNIC) to provide a free Web Template for http://web.vn domains.

After one year's provision, nearly 800,000 domains were registered, three times higher than the traditional Vietnamese "vn".

A web template is a tool used to separate content from presentations in web design, and for mass-production of web documents. It is a basic component of a web template system.

Excellence Day boosts Taiwan IT sector

Taiwan Excellence 2012, a campaign aimed at boosting the reputation of Taiwan's dynamic industries was officially launched in Ha Noi this week, marking its third year in Viet Nam.

Following the success of the last two years, Taiwan Excellence 2012, with the theme "Creating an Excellent Home with an Excellent Lifestyle", will introduce 30 ‘reliable', ‘innovative' and ‘worthy' Home Living and ICT brands to local consumers.

With last year's campaign having focused on promoting high-quality consumer technology products, the 2012 event will witness the participation of a much more diverse range of players.-

SSI to list additional shares on June 18

June 18 will be the first trading day of 1.5 million additional shares that Saigon Securities Inc (SSI) issued to its key staff. Total listing value reached VND15 billion (US$715,000), the HCM City Stock Exchange announced.

SSI topped the profits earners among securities companies in the first quarter of this year with a pre-tax profit of VND205 billion ($9.8 million). SSI closed yesterday up 2.2 per cent to VND21,800 ($1.04) a share.

Sao Ta Foods posts $27.5 million in earnings

Sao Ta Foods Co (FMC) posted a total revenue of US$27.5 million in the first five months of this year, up 5 per cent from the same period last year, The May revenue reached $5.5 million.

According to the company, the input costs (energy, raw materials, wages) are currently high, while the reduced global retail prices and unfavourable exchange rates cause many difficulties for the shrimp processing enterprises.

ACB Growth Fund avoids securities investments

ACB Growth Fund (ACBGF), under the management of ACB Capital Management Co Ltd, reported at the end of May that its total capital was kept in the form of over 90-day deposits and it has made no disbursements to buy bonds or stocks since the establishment on June 30, 2011.

The fund's initial capital was VND240 billion (US$11.4 million) and by May's end, its net asset value reached VND272 billion ($13 million), including the interests paid on its deposits worth VND8.6 billion ($410,000).

Net asset value per fund certificate was VND11,333 ($0.54), up slightly from VND11,207 ($0.53) in the previous period.-

Logistic firm plans convertible bond issue

Transforwarding Warehousing Corp (TMS) this year plans to issue 2-year convertible bonds worth VND100 billion (US$4.8 million) with the maximum interest rate of 15 per cent per year.

The company also announced it will convert 67,250 convertible bonds it issued in 2010 on June 14 and next Monday is the deadline for bondholders to register their conversion.

Also due to the economic difficulties and bottle-neck in credit access, TMS decided to cancel its initial plan of issuing 4 million shares to raise investments for equipment and warehouse in HCM City.-

Artichoke farmers in Da Lat switch to flowers
 
Many farmers in Da Lat in the Central Highlands, the country's largest artichoke cultivation area, have switched to other crops as the prices for artichokes has dropped.

Farmer Hoang Thi Phuong in Ward 12 said she earned a profit of VND50 million (US$2,300) from 1,000sq.m of artichoke in last year's crop but, only VND30 million from this year's crop.

"Other farmers and myself have to set up green houses to plant chrysanthemums, which can provide a profit of VND70 million per 1,000sq.m," she said.

Nguyen Thi Thu Nguyet, chairwoman of the Ward 12 People's Committee, said her ward had 170 families planting 50ha of artichoke last year.

"This year, the artichoke cultivation area has been reduced by 10ha because many families have switched to growing flowers," she said.

The price of artichokes has declined by 30 per cent against last year.

Ward 12 used to have up to 80ha of artichoke in 2005, accounting for 80 per cent of Da Lat's total artichoke area.

Farmer Hoang Thoi in Ward 12, who had planted artichoke for 20 years, is now growing flowers.

"Artichoke cultivation requires a lot of tending. The cost of fertiliser, pesticide and labour have increased while the price has dropped," he said.

Over the past three years, the price of artichoke has fallen continuously and the profit of planting 1,000sq.m of artichoke was about VND17-20 million, he said.

Ho Ngoc Dinh, chairman of the Ward 12 Farmers Association, said that profits from artichokes were insufficient for farmers to cover their costs, while profits from planting flowers were two to three times higher than that of artichokes.

"If the current price of artichoke continues for a long time, no one would plant artichokes within the next two or three years," he said.

Some farmers continue to plant artichokes because they lack capital and have no electricity in their gardens, both of which are necesssary for planting flowers.

Similarly, Ward 11 has nearly 100 families planting 15ha of artichokes, and this area is expected to decline by 30 per cent in the next crop because of low prices, according to the Ward 11 Farmers Association.

In Viet Nam, artichokes are grown only in Da Lat in the Central Highlands province of Lam Dong and in Sa Pa in the northern province of Lao Cai.

Artichokes are used as a food and are part of the Health Ministry's pharmaceutical-product use.

City, provinces say yes to promoting safe fruit, vegetable products in VN

The Plant Protection sub-departments of HCM City and the provinces of Tien Giang, Long An and Tay Ninh yesterday signed agreements to promote production and consumption of safe fruits and vegetables.

The move aims to enhance the efficiency of State management in ensuring food safety of farm produce, from production to circulation, said Nguyen Van Duc Tien, head of the Plant Protection sub-department of HCM City.

Under the agreement, his sub-department will work with counterparts in the three provinces to instruct and support fruit and vegetable establishments to strictly follow requirements of the safe fruit and vegetable production chain.

The three provinces will closely monitor production and processing of fruits and vegetables at farms and processing facilities, and provide advice on how to use pesticides and fertilisers in a safe manner, Tien said.

They will conduct random checks to determine pesticide residues on fruits and vegetables before these are transported to the city and announce the results to the Plant Protection Sub-Department of HCM City and relevant agencies.

Meanwhile, HCM City will work with wholesale markets and supermarkets in the city to promote consumption of certified fruits and vegetable consignments produced by establishments in the three provinces.

At the signing ceremony, the Vissan Fruit and Vegetable Processing and Trading Enterprise signed contracts with three fruit and vegetable co-operatives in the provinces to ensure stable supply of safe fruit and vegetables at Vissan's outlets.

Three wholesale markets in HCM City - Hoc Mon, Binh Dien and Thu Duc - also signed contracts with 12 companies in the three provinces to promote production and consumption of safe fruits and vegetables.

Le Thanh Liem, director of the HCM City Department of Agriculture and Rural Development, said the city consumes about 1.2 million tonnes of fruits and vegetables a year. Currently, its own production meets only 30 per cent of the demand, he said.

Every night, staff from the city's Plant Protection sub-department check for fertiliser residues and other contamination of fruits and vegetables brought in from other parts of the country to wholesale markets in the city, Tien said.

Signing of the agreement with the three provinces will enable checks at the production stage and reduce pressure on the city, and facilitate foodstuff safety and hygiene, he added.

Seminar discusses pollution solutions

On the occasion of the World Environment Day (June 5), a special seminar on "Natural bioremediation approach to environment applications" was held in HCM City .

The seminar provided new information about biotech solutions to tackling environmental pollution.

Dr. Mark Krupka, Technical Director of the US-based Ecological Laboratories Inc., presented AquaClean, a biological product series specially designed to handle problems of wastewater treatment system.

Taxi fares slashed by VND500

Ta Long Hy, chairman of the Taxi Association in Ho Chi Minh City and director of Vinasun Taxi Company, on Friday said that his company has reduced fares by VND500 per kilometre on both four and seven seater cars.

Vinasun is the first company to slash fares after reduction of petrol prices by VND800 a litre on June 7. Other taxi companies have not as yet announced any fare adjustments.

The same day, HCMC Cargo Transport Association said that none of its members had announced any reduction on freight rates.

This will eventually be decided between the transport companies and their clients, while the association can only suggest a price reduction.

Representatives of some transport companies said that according to their contracts with clients, once gasoline price hikes by VND1,000 then only will they increase fares by 4 per cent.

Petrol prices have been slashed twice already within a short period of time by more than VND1,000, which will compel companies to consider reducing  fares.

New wave of Japanese investment in Vietnam

A new wave of Japanese investments in Vietnam have recently risen from business merger and acquisition (M&A) transactions, according to experts at a forum on mergers and acquisitions that took place in Ho Chi Minh City on June 7.

The country saw 345 merger and acquisition deals worth US$1.7 billion and 400 transactions in 2011 valued at $4.7 billion. Foreign investors represent 66 per cent in all deal values.

Among them, Japan is one of the leading countries implementing merger and acquisition deals with 19 transactions worth $596 million.

Japan has also taken the lead among countries and territories investing in Vietnam with total investment capital of $23.6 billion in the first months of 2012.

According to experts, Japanese investors will reduce investment time and capital if they carry out merger and acquisition activities. Local partners will help Japanese enterprises to sell products in Vietnam. On the other hand, the country will be production base to provide goods to the Japanese market.

Japanese investment potential in Vietnam has risen sharply in various fields including retail, real estate, service, IT and domestic consumption.

Additionally, local authorities should strengthen competitiveness in investments, improve administrative formalities, upgrade infrastructure and train human resources to attract investors.

Viet Nhat Medical Instrument Joint Stock Company (JVC) approved a solution to issue 3.22 million shares to pay dividends for the second term of 2011 at a ratio of 10 per cent. Earlier, the company paid dividends in cash at a ratio of 20 per cent from February 13 to 17 this year.

Hoa Binh Construction & Real Estate Corporation (HBC) announced that it won three contracts of total value of more than VND900 billion. The company will build An Giang Central General Hospital at Long Xuyen City which will have 10 storeys and cover an area of 4.6 hectares, and is expected to complete within 32 months; VietinBank head office on Ham Nghi Street in Ho Chi Minh City which has 24 storeys will finish within 22 months; and superstructure of MB Sunny Tower in District 1 is expected to complete in 9 months.

Vneco8 Electricity Construction Joint Stock Company (VNECO8) registered to list 1.8 million shares on Hanoi Stock Exchange. Buon Ma Thuot City-based VNECO8 has a chartered capital of VND20 billion but its actual capital is VND18 billion. The company mainly builds power constructions, civil constructions, roads, irrigational works, telecommunications constructions, and small and medium hydroelectricity plants.

Binh Thanh Import - Export Production & Trade Joint Stock Company (GIL) announced that Gilimex-PPJ Household Garment Joint Stock Company, the organization headed by Mr. Le Hung, chairman cum CEO of Binh Thanh Import-Export Production and Trade Joint Stock Company registered to buy 1.5 million shares from June 8 to July 7 for financial investment. Currently, Gilimex-PPJ Household Garment Joint Stock Company have not held GIL’s stake.  Earlier, Mr. Nguyen Ho Trung, deputy director general of GIL also registered to buy 200,000 shares by July 10 to raise his ownership to 2.21 per cent.

Petro Vietnam Fertilizer & Chemical Corporation (DPM) has agreed to open a representative office in Myanmar to promote fertilizer export and consumption. The company is carrying out relevant procedures to ask for permission from Myanmar’s authority to establish its representative office and is expected to receive approval in the fourth quarter of this year.

Phuoc Hoa Rubber Joint Stock Company (PHR) announced that it achieved revenue of VND699 billion and a profit of VND296 billion in the first five months of this year. This month, the company plans to harvest 1,560 tonnes of dry rubber, purchase 600 tonnes of rubber, and increase sales to deal with a slump in rubber price from early May this year.

Licogi 16 Joint Stock Company (LCG) estimated that its revenue would reach VND310 billion in the second quarter this year with post-tax profit of VND7.2 billion. In the first quarter, the company obtained revenue of VND336.7 billion and post-tax profit of VND304.3 million. Currently, the company is looking for a partner to sell 22 per cent of its stake at Orient Bio-fuels Company. In the third quarter, the company planned to muster its resources on two major projects, consisting of Sky Park Residence in Ton That Thuyet Street in Cau Giay District in Hanoi, and residential area in District 12’s Hiep Thanh Ward in Ho Chi Minh City.

Transport and Chartering Corporation (VFR) has approved to sell some vessels, including Vietfrach 01, VF Glory, and Vietfrach 02, to restructure its fleet. Business performance of these three vessels was reportedly poor. Earlier, the company decided to sell only Vietfrach 01 and VF Glory vessels. VFR currently has the highest value among listed shipping companies on the market.

Pepper price stable due to wise strategy

While prices of most agricultural produce like rice, rubber, coffee, cashew-nuts, shrimps and fish have fallen drastically, price of pepper has remained high and stable for the last decade.

This year, pepper exports are expected to touch US$900 million, from only $693 million in 2011.

Pepper is the only produce whose production and turnover has kept climbing for the last 10 consecutive years, thanks to stable prices.

Although pepper prices drop sometimes, Vietnamese pepper has never sold less than cost price. On June 6, one kilogram of pepper cost from VND119,000 to VND124,000, depending on the region. Despite a slump in price this year, pepper prices are still higher by about 20 per cent than in the same period last year.

Average pepper production was around 5-7 tonnes per hectare and reached 7-9 tonnes or even 10 tonnes in some regions.

Meanwhile, average production of big pepper exporters like India and Indonesia was around 0.2-0.3 tonnes per hectare, or 1-2 tonnes per hectare in Malaysia and Brazil.

With such robust production, thousands of farmers in Xuan Loc District in Dong Nai Province and Chu Se District in Gia Lai Province are earning more than VND1 billion annually.

While two million hectares covered crops like coffee, tea, rubber and cashew, pepper was only growing in 50,000 hectares, but accounted for more than 8 per cent of the country’s total export value.

At present, export value of pepper was around $6,800 per hectare, six times higher than tea, four times higher than rubber, 3.8 times higher than cashew, and 2.6 times higher than coffee. As a result, pepper is considered the most attractive agricultural produce.

According to Do Ha Nam, chairman of Vietnam Pepper Association, average price of black pepper was more than $6,300 per tonne in the first five months of this year, an increase of more than $1,600 per tonne. White pepper was $9,200 per tonne, up by more than $2,100 per tonne.

In the first five months of the year, pepper prices peaked at a record high. Black pepper went up more than VND120,000 per kilogram, up 33 per cent; and white pepper topped VND190,000 per kilogram, up 46 per cent over the same period last year.

By mid-May, pepper exports were nearly 52,500 tonnes with a turnover of nearly $357.4 million, an increase of 11.4 per cent in volume, and 46.1 per cent in value compared to the same period last year.

This year, pepper exports may top 123,000 tonnes and generate a turnover of nearly $900 million.

Vietnamese pepper has been exported to more than 80 countries and territories in Europe, Asia, Mid-West, and the US. Since 2003, Vietnam has been the biggest pepper exporter in the world with trading volume accounting for 40-50 per cent of the total pepper trading volume in the world.

With such a high trade volume, Vietnam could easily control pepper prices in the global market with better cooperation and coordination from local pepper growers.

In 2006, when pepper prices dropped to a record low of $900 per tonne and cost price was $1,000 per tonne, Vietnam Pepper Association suggested that farmers should hold their produce until prices surge to $1,200 per tonne. Thanks to farmers’ unanimity, pepper made an impressive U-turn, climbing to $1,700-1,800 per tonne.

In 2007, after several farmers followed this suggestion to not sell their produce if price fell below $2,500, the price surged to an average $3,200 per tonne.

After keeping prices up for two years, farmers have learnt to hold their produce when price falls, instead of selling heavily as they did before.

By applying this strategy, pepper prices have no longer fluctuated periodically but stayed at high levels. Presently, Vietnamese pepper is being exported directly to many markets worldwide which has brought in more profits for both farmers and exporters as they can keep track of global prices at all times.

Vinashin to sell 13 subsidiaries
 
The Vietnam Shipbuilding Industry Group (Vinashin) has offered up their entire stake in 13 subsidiaries at a recent M&A forum.
 
The subsidiaries operate in a variety of areas, including tourism, seafood, ship cables, construction and aluminum production.

Vinashin will also sell 318,000 square metres of land for aquaculture in Quang Binh and Thua Thien-Hue provinces, as well as land for urban area construction in Da Nang and Quang Nam provinces.

The group plans to sell stake in 32 companies in which the firm holds 51-80%. Among these, the shipbuilder will sell 10% of stake in Vietnam Investment Fund worth VND144 billion (USD6.85 million), 51% at Cuu Long Trading Investment JS company worth VND734 billion (USD34.9 million) and 20% at  Shell Gas Haiphong.

Vinashin has more than 200 subsidiaries. Under the Government’s restructuring plan, the group will retain only 15 subsidiaries, two joint ventures, one associated company and two non-business units.

Bianfishco's debt may be turned into contributed capital   

The Debt and Asset Trading Corporation (DATC) and Bianfishco asked banks to turn their loans in the firm into contributed capital.

The decision was made on June 7, in a meeting of DATC, under the Ministry of Finance with the debt-ridden Binh An Seafood Joint Stock Co (Bianfishco), affected banks and farmers.

According to Tran Van Tri, General Director of Bianfishco, the company owes VND235 billion (USD11 million) to farmers, VND78 billion (USD3.8 million) to enterprises and VND988 billion (USD47 million) to credit organisations.

To deal with the debt and to create capital for business activities, Bianfishco intends to sell 49% of it's stake in its collagen drink factory for VND70 billion (USD3.3 million) and transfer the Binh An Fishery Research Institute, worth approximately VND77 billion (USD3.7 million),  to the Ministry of Agriculture and Rural Development. It will also sell ornamental trees and others assets, estimated to be worth VND110 billion (USD5.2 million).

Bianfishco also asked the banks to turns loans into contributed capital. DATC would be the head of the restructured company.

If the act is approved, Vietnam Development Bank, in Can Tho-Hau Giang, will have a 15% and BIDV will also have a 15% share.

DATC, ABBANK and Habubank all will have 10%, while 103 individual shareholders will own 15%. The remaining 25% would stay in possession of Bianfishco.

Luong Quang Minh, Director of Vietnam Development Bank in Can Tho-Hau Giang, asked Bianfishco to pay their debt to farmers in full, announce the audit report and hold a general shareholders meeting soon. He also agreed with the solution to turn loan into contributed capital to help the corporation.

Nguyen Tuong Thanh, an attorney who represents two farmers proposed two solutions, "If DATC will buy the debt owed to my clients, about VND18 billion (USD86,000), we will forgive the interest. Or Bianfishco could pay just 50% of the debt, in this case the farmers would consider the rest to the company as contributed capital, but only under one condition: that all the banks involved also make contribution."

However, General Director of DATC, Pham Thanh Quang said it will buy back the debt owed to the farmers. "The factories and the trademark of Bianfishco are still alive." he said.

General director of Bianfishco said after their fisheries factories and value-added plant went into operation, the collagen drink factory also opened again and sold the first batch, worth USD12,720.