Auto import estimated to be 3,000 units in Oct

The General Statistics Office has estimated that Viet Nam imported about 3,000 autos in October worth a total US$46 million.

If this figure was correct, the country imported significantly fewer vehicles this month than in September, the office said.

Car dealers affirmed that the decline in import value was difficult, particularly in the last months of the year.

Last month, about 4,000 units were imported valued at $69 million.

Vietnam has more than 200 investment projects in Laos

Lao Prime Minister Thongsing Thammavong has described Vietnamese investment as most typical among foreign-invested projects in Laos.

According to the Vietnam Business Association in Laos, the total investment of Vietnamese businesses in Laos has reached more than US$3 billion.

In the first three quarters of 2011, the registered investment of Vietnamese businesses in Laos was estimated at US$469 million, mostly in Laos’ disadvantaged regions such as Oudomsay, Luang Namtha, Huaphanh and Xiengkhouang.

Over VND24,500 bil for seafood processing until 2020

The Ministry of Agriculture and Rural Development (MARD) has approved a VND24,500 billion plan to develop seafood processing until 2020.  

Under the plan, by 2020, processed seafood output for export will reach 2 million tones with an average growth of 3.5 percent per year and an export value of US$10 billion.

The MARD emphasized that to fulfill the plan’s targets, total investment in developing the seafood sector will be VND24,550 billion in the 2011-2020 period and more than VND13,380 billion in the 2011-2015 period.

The plan also puts forth some solutions to promote seafood exports. Priority will be given to developing major markets and trademarks for key export items such as tiger prawn, tra fish, and tuna.

For the local market, the MARD said the focus will be on developing and introducing traditional seafood products and implementing programmes on food hygiene and safety.

New deal promotes Vietnam-France business links

The Vietnamese Entrepreneurs Association in France and the French Chamber of Commerce and Industry in Vietnam have recently signed a comprehensive cooperative agreement.

Under the agreement, the two organizations will promote cooperation in the fields of trade, culture, health and education between Vietnam and France.

Currently, there are about 400,000 Vietnamese living in France, but trade and economic relations between the two countries are well short of its mark.

Association President Nguyen Hai Nam said that the signed agreement will open up good opportunities for cooperation. The association will provide French enterprises with update information on Vietnamese enterprises and the country.

In turn, the French Chamber of Commerce and Industry in Vietnam will also update information on the network of French enterprises and assist Vietnamese businesspeople in improving their professional skills.

Chamber President Pierre-Jean Malgouvres affirmed that his organization will support Vietnamese businesses in France to improve activities effectively under the signed agreement.

Vietnam Airlines offers share promotion

National carrier Vietnam Airlines has announced a new promotional programme ‘Same-price flights’ for travel between Hanoi and HCM City.

Tickets will be sold for VND1.45 million ($70) each way, excluding taxes and additional fees, representing a 34 percent discount against normal tariffs, on flight VN1171 departing at 10pm from Hanoi to HCM City and flight VN1166 from HCM City to Hanoi at 5.30am.

The new programme is valid for passengers buying tickets between October 27, 2011, and February 28, 2012, for flights from October 30, 2011, to February 28, 2012, excluding the upcoming New Year and Tet (Lunar New Year) holidays.

City to unveil 15-year construction master plan

A 15-year construction master plan for HCM City will be unveiled at an exhibition next month, Nguyen Huu Tin, Vice Chairman of the municipal People’s Committee, said on October 27.

He said that the week-long exhibition will display all information – both over targets and their details – relating to the plan, which was approved by the Prime Minister last year.

Nguyen Xuan Thu, an official of the municipal Department of Planning and Architecture, said the event will showcase overall development plans for transportation, water supply and drainage, anti-flooding works, new urban areas and other key projects.

The exhibition aims to collect opinions on the plan from individual citizens, experts and institutions, Thu said.

Under the master plan, the city will have 19 districts – 13 old and 6 new ones established in recent years, namely 2, 7, 9, 12, Binh Tan and Tan Phu, and five rural districts.

It envisages the city’s population rising to about 10 million with 7.4 million living in urban areas.

The land used for urban construction projects will comprise 100,000 hectares including - Thu Thiem (737ha), Hiep Phuoc (3,900ha), Tay Bac (6,000ha) and the Hi-tech zone (872ha).

The National University will have 200ha in HCM City and 600ha in Binh Duong province. A science and technology area will be developed in District 9 and Thu Duc district.

Some new residential areas covering a total of 750ha will be set up in Binh Tan district close to industrial parks.

Russian Far Eastern tourists arrive in Nha Trang and Phan Thiet

A Russian Orenair plane carrying nearly 190 passengers landed at Khanh Hoa province’s international airport on October 30, starting the winter vacation season in Nha Trang and Phan Thiet for tourists from Russian Far East.

The vacation season will last until April 2012.

In the first 10 days, there will be a flight from Russia to Cam Ranh in central Vietnam per day. Later there will be daily arrival flights and return flights for tourists who want to return to Russia.

Orenair will also launch flights for tourists from nine cities in far eastern Russia such as Kharbarovsk, Vladivostoks, Novosibirsk and Kemerovo.

The director of the Khanh Hoa provincial Department of Culture, Sports and Tourism, Truong Dang Tuyen, said about 70 percent of Russian tourists using this route will choose Nha Trang as their final destination and the rest will go on to Phan Thiet city.  

Tuyen said local tourism operators have set up a number of venues for sight-seeing, relaxation, and discovering Vietnamese culture; however, most of the first Russian tourists say they want to swim, admire the sea, and eat seafood before exploring other things.

Khanh Hoa province has received approximately 400,000 foreign tourists so far, including nearly 30,000 Russians.

Rice exports hit 7 million tonnes

Vietnam has signed contracts to export seven million tonnes of rice so far this year.

Fragrant rice has accounted for a high percentage of rice exports with an estimated 400,000 tonnes.

The Vietnam Food Association (VFA) says there are many positive signs for rice exports to Vietnam’s traditional markets such as the Philippines and Indonesia.

According to the VFA, Vietnam is likely to ship 6.5-7 million tonnes of rice to foreign markets in 2012.

Canadian businesses explore Vietnam’s wood processing

The visit has been organized by the Handicraft and Wood Industry Association (HAWA) of Ho Chi Minh City in coordination with the Investment and Trade Promotion Center of Ho Chi Minh City (ITPC), the Vietnamese embassy in Canada and Canada’s Trade Facilitation Office (TFO).  

At a seminar on opportunities for selling wood and interior decoration products in the Canadian market held on October 29, HAWA Vice Chairman Tran Quoc Manh said the visit by Canadian businesses presents an opportunity for Vietnamese businesses to expand their export market.

Enterprises should prepare their marketing plans well to promote their products, and attract buyers, Mr Manh noted.

In the first nine months of 2011, wood and interior decoration exports reached more than US$2.8 billion. As Vietnamese exports are facing some difficulties in the US and Europe, market expansion in Canada is considered an effective solution, he added.

Head of the Canadian business delegation, Robert Mackinnon, said Canada is a big international import-export market and, despite global economic difficulties, the country has achieved high growth in imports and exports. The best way to enter the Canadian market is through trade centres, retail chains and e-commerce services, he said.

During their visit, Canadian businesses will meet with wood processors and visit some of their production facilities.

Agricultural sector calls for more investment

The agricultural sector needs to devise appropriate policies to increase its competitiveness and attract more investment as Vietnam is integrating more deeply into the world, says Deputy Prime Minister Hoang Trung Hai.

Working with the Ministry of Agriculture and Rural Development (MARD) in Hanoi on October 29, Mr Hai asked the sector to develop plans of action to cope with climate change which is negatively impacting agricultural production and rural development.

He said the sector also faces other challenges, including epidemics, low productivity, poor infrastructure and low incomes for farmers, which must be overcome to ensure sustainable development.

The Deputy PM said that MARD should examine its list of priority projects that need investment and call for capital from other economic sectors. He also suggested that aquaculture projects follow the public-private partnership (PPP) model to attract more investment capital.

He pointed to the fact that investment in agriculture remains low, accounting for only 6-7 percent of social investment sources. Therefore, projects in the 2011-2015 period should be selected and oriented to attract capital from other sources.

Delegates proposed raising agro-forestry-fishery exports in 2012 to US$28 billion, US$3 billion more than the 2011 target, and prioritising capital for dyke and dam reinforcement projects.

MARD Minister Cao Duc Phat reported that in 2012 the sector has set targets to achieve a growth rate of 2.3-2.6 percent, exporting 6.5-7 million tonnes of rice, earning US$24 billion from exports and raising the national forest coverage to 40.5 percent.    

Laos-Vietnam Insurance JV offers services to Lao Airlines

The Laos-Vietnam Insurance Joint Venture Company (LVI) signed a contract in Vientiane on October 28 to insure two Lao Airlines A320 Airbus planes.

The US$850 million contract will cover all risks to plane body, passengers and luggage and goods transportation.

In addition to the Lao Bank for Foreign Trade (BCEL), LVI coordinated with Willis Limited Insurance Broker in London, UK, to ensure financial safety of the insurance.

LVI also worked with Airclaims, the world's leading provider of claims, risk and asset management services for the aviation sector, to compensate losses resulting from an accident.

LVI is a joint venture company established by the Bank for Investment and Development of Vietnam's Insurance Company (BIC), BCEL and the Lao-Viet Bank (LVB).

After three years of operations, LVI ranks second in the list of the top six insurance companies in Laos with an annual revenue growth rate of 200 percent.  

Price index expected to fall further in November

There will be no big fluctuations in market prices in November and the consumer price index (CPI) is predicted to increase by only 0.2-0.3 percent against October, according to market experts.

Market analysts have made this forecast despite high consumer demand for a number of commodities at the year’s end, and potential widespread epidemics ò bird flu and blue ear pig disease.

However, large stockpiles of commodities will ensure an adequate market supply in the coming months, nipping any price manipulation in the bud, said analysts from the Domestic Market Management Group.

Local rice prices are expected to rise slightly due to the usual high demand in the lead up to the traditional Lunar New Year holiday (Tet) as well as the positive signs for rice exports. Prices of fresh food will remain unchanged, except for vegetables which have suffered due to recent harsh weather.

There will be no increase in sugar prices as 30 mills are scheduled to be put into operation in November to churn out 120,000 tonnes of sugar. This new output along with the stockpiled volume will meet business demands of confectionary and jam production for the holiday season.

Imported milk prices are expected to go up slightly due to fluctuations in the foreign exchange rate.

The livestock feed market will remain stable while pork and chicken prices are dropping significantly. Fertilizer prices are likely to increase slightly as farmers are preparing for the winter-spring crops.

Unlike in previous years, steel consumption is falling considerably due to stagnation in the real estate market and high ending interest rates.   

Promotion Month opens in Hanoi

Hanoi Promotion Month was launched at the Vietnam Exhibition and Fair Centre in the capital city on October 28.

At the opening ceremony, Nguyen Van Suu, Vice Chairman of the Hanoi municipal People’s Committee, said the event is an opportunity for State management agencies to strengthen their roles in supporting and creating favourable conditions for businesses to advertise their trade names, expand their markets, promote their goods, raise prestige and develop production.

During the month, there will be a series of activities including Gold Promotion Days on November 12-13, Online Shopping Days November 17-19 and Thach That Gold fair on November 24-27.

This year's Hanoi Promotion Month is the biggest ever with nearly 1,000 venues displaying goods from 300 businesses including essential daily consumer goods, garments, textiles, fashions and electronics.

The average discount on goods will be about 15-20 percent.

Mekong Delta businesses honoured for contributions to development

A ceremony to honour 39 outstanding businesses in the Mekong River Delta was held in Can Tho City on October 28.

The event was organized by the Vietnam Chamber of Commerce and Industry’s Can Tho branch, aiming to acknowledge the significant contributions made by enterprises in the region amidst national and global economic complications.

At the event, businesses held exchanges and shared experiences in production and economic developments which have impacted the business environment.

Businesspeople also said they hope to receive more support from local leaders to help them overcome the current difficulties.

Regulators target transfer pricing

Vietnam plans to crack down on transfer pricing, a common practice among foreign-invested firms.

The transfer price is the price that is assumed to have been charged by one arm of a company to another arm for products and services in order to calculate each division’s profit and loss.

Nguyen Thi Phuong Hoa, head of the accounts department at the National Economics University, says transfer pricing could negatively impact on the macro-economy.

She says it could for example be used for tax avoidance, give foreign-invested firms an unfair advantage over their rivals and widen the nation’s trade deficit.

Pham Hung Tien, deputy director of the Foreign Investment Research Centre at the Hanoi National University, says the State has unwittingly encouraged transfer pricing in its drive to attract foreign investment because it has not managed strictly financial information at foreign invested firms.

The Ministry of Finance says this year the General Department of Taxation has inspected 585 enterprises and retrieved VND978 billion in unpaid tax by 494 enterprises.

The office has also ordered the 494 enterprises to improve their accounting procedures.

Around 1,280 foreign-invested firms will be inspected this year.

The Ministry of Planning and Investment’s Foreign Investment Agency is seeking ways to limit transfer pricing in foreign invested firms.

However, the ministry says any new regulation will not increase a firm’s tax burden.

Japan, Vietnam to co-exploit rare earth

Vietnam and Japan are scheduled to sign an agreement on establishing a rare earth co-exploitation business when Japanese Prime Minister Yoshihiko Noda meets his Vietnamese counterpart Nguyen Tan Dung on October 31.

The joint venture will be run by Vietnam’s Lavreco minerals exploitation company and Japan’s Toyota Tsusho and Sojitz groups, Japan’s Nikkei daily reports.

It’s also possible that another Japanese national economic group would invest in this joint venture but the investment amount has not been announced.

The production of rare earth will begin at Lai Chau province’s Dong Pao mine in 2013 with the aim of providing more than 20 percent of Japan’s demand for rare earth in future.

The mine is expected to provide 3,000 tonnes of rare earth metals per year in 2013 and double the capacity in the second phase.

Under the to-be-signed agreement, a joint research centre will be set up in Hanoi in 2012 in order to develop technology for separating rare earth metals from other minerals and refining them with limited environmental impact.

Japan will give Vietnam the necessary equipment and send geologists to help train Vietnamese engineers in detecting rare earth via satellite images.

FuturArc Forum targets green projects

Nearly 300 foreign and local experts gathered at a forum in HCM City on October 28 to discuss innovative approaches to designing and developing green projects.

This is one of a series of seminars that have been held in major cities across South East Asia to highlight current advances in sustainable and green development.

At the FuturArc Forum, delegates focused on issues and challenges facing construction companies in the practical development and application of green projects.

They also learnt more about international prizes such as the FuturArc Prize and the FuturArc Green Leadership Award in recognition of Asia’s most outstanding environmentally sustainable projects.

New deal promotes Vietnam-France business links

The Vietnamese Entrepreneurs Association in France and the French Chamber of Commerce and Industry in Vietnam have recently signed a comprehensive cooperative agreement.

Under the agreement, the two organizations will promote cooperation in the fields of trade, culture, health and education between Vietnam and France.

Currently, there are about 400,000 Vietnamese living in France, but trade and economic relations between the two countries are well short of its mark.

Association President Nguyen Hai Nam said that the signed agreement will open up good opportunities for cooperation. The association will provide French enterprises with update information on Vietnamese enterprises and the country.

In turn, the French Chamber of Commerce and Industry in Vietnam will also update information on the network of French enterprises and assist Vietnamese businesspeople in improving their professional skills.

Chamber President Pierre-Jean Malgouvres affirmed that his organization will support Vietnamese businesses in France to improve activities effectively under the signed agreement.

Vietnam-Cambodia trade on a sharp increase

Two-way trade turnover between Vietnam and Cambodia has so far this year hit nearly US$3 billion, beating the target set for the whole of 2011.

According to Vietnam’s Trade Office in Cambodia, bilateral trade value reached US$2.70 billion in January-September, 2011, doubling the figure recorded in the same period last year.

Key exports to Cambodia include steel, plastics, garment and textiles and footwear. Meanwhile, exports to Vietnam are food and agricultural products such as seafood, corn, cigarettes, and rubber.

Foodtex to boost processing technology

Progress has been made in recent years to improve food hygiene and safety in the country, but more needs to be done to reduce the number of food poisoning cases, experts have said.

"Although initial results have been positive, the country should do more to improve safety and hygiene standards since the number of food poisoning cases is still high, about 10,000 cases a year," said Nguyen Thanh Phong, deputy director of the Ministry of Health's Food Safety and Hygiene Department.

Vietnam’s agricultural produce is exported to 160 countries and territories, including markets such as the US, Japan and France where strict standards are applied.

In the domestic market, many enterprises now use advanced management models such as HACCP (Hazard Analysis Critical Control Point) and those which are certified by ISO (International Organization for Standardization) to process food.

But up to 85 percent of food processing establishments were small to medium. Many used outdated production technology, Phong said.

Phong said at a press conference in HCM City on October 26 that the upcoming international food processing machinery exposition (Foodtex Vietnam), to be held in HCM City on March 22-24 next year, is expected to offer opportunities for local food-processing companies to improve production technology.

Carlsberg says buys rest of Vietnamese brewery

Danish brewer Carlsberg said on Friday it agreed to take full control of Hue Brewery in Vietnam by buying the 50 percent that it did not already own.

The brewer and Hue People's Committee in 2009 signed a memorandum of understanding confirming its support for the Carlsberg Group to acquire the Committee's 50 percent stake in the brewery.

"This process has now been completed and the Carlsberg Group will consequently increase its shareholding in Hue Brewery Ltd. from 50 percent to 100 percent," the Danish brewer said in a statement.

Hue Brewery's product portfolio consists of brands including Festival, Carlsberg and Eve, it said.

It operates two breweries in Hue province and produced about 1.7 million hectolitres of beer in 2010, Carlsberg said.

Fruit companies get wise with Chinese traders

While many Vietnamese fruit companies are still following the old risky way of transporting their fruits to China’s border gates to wait for customers, some have done differently.

For a long time, local firms have transported their fruits to China through border gates and waited for their Chinese customers.

If they can’t find any customer, they simply waste thousands of tons of fruits.However, some, such as Tien Giang-based Long Giang Fruit Processing Co. has found a safer way to trade with China.

Director Nguyen Xuan Huy said he only brought the fruits to China after he had signed contracts with his Chinese customers.

Huy said since his business with Chinese traders had been done via direct contracts, he was no longer forced to sell at low prices, or to transport the fruits back when there were no customers.

The key, he said, is that his fruits have high quality. “My container trucks are now received by Chinese traders right at the border gates,” he said.

“Meanwhile, hundreds of trucks of other firms have to park there waiting to find buyers.”

He said many Chinese traders had come to his company in Vietnam to offer to buy his longans.

“Since our brand has become familiar to Chinese consumers, Chinese importers are willing to pay higher for it,” he said.

Huy said besides longans, Chinese traders also buy his bananas, sweet potatoes and blue dragons.

The current lucrative business of Long Giang Co. is completely different from 5 years ago, when the company sold fruits to China the old way.

Huy said he used to hire container trucks to carry longans to China via Tan Thanh and Lao Cai border gates and wait for buyers.

Vietnamese fruits companies could not sell directly to Chinese customers but often through brokers, who charged them a commission of CNY1 (US$0.15) on every basket of longans, he said.

Huy had to pay CNY3,000 for broker commissions on every container.

He said sometimes Chinese traders said his fruits had bad quality to bargain for a lower price.

“There were times when Chinese traders said they would only buy if we lowered our prices. Otherwise, we would have to carry our fruits back,” Huy said.

“So we often didn’t have any choice but sell to them at losses.”

Refinery repairs cost double estimated figure

The first comprehensive overhaul of the two-year-old Dung Quat Oil Refinery cost nearly double the budgeted figure since some equipment had to be replaced, the operator said Friday.

Vietnam’s sole refinery was closed for two months in mid-July for maintenance and fixing 75 technical faults.

The Binh Son Oil Refining and Petrochemical Co Ltd, the operator, said it had cost US$40.5 million though a group of contractors led by France’s Technip had been signed up for around $25 million.

Nguyen Hoai Giang, Binh Son’s CEO, said some of the equipment had deteriorated and had to be replaced.

The refinery resumed operation at full capacity on September 13, two days earlier than expected.

The next maintenance is planned to be done in four years’ time, but by a team of Vietnamese experts and engineers.

Before it closed Dung Quat Oil processed and sold more than 3.3 million tons of gasoline.

It targets a total of 5.6 million tons this year.

Vietnam rejects US push on state firms in trade talks

Vietnam on Friday rejected a U.S. proposal to establish new trade rules for state-owned companies, which Washington says often benefit from unfair subsidies and protections.

The United States floated its plan in negotiations this week on the nine-country Trans-Pacific Partnership, or TPP, a free-trade zone that would stretch across much of the Pacific Rim.

"We don't think there is a need for specific provisions for state-owned enterprises," Vietnam's trade negotiator, Tran Quoc Khanh, told reporters.

He said Vietnam's state-owned companies already complied with World Trade Organization rules, so the U.S. proposal was not necessary.

Despite the disagreement, President Barack Obama and leaders of the eight other TPP countries are expected to announce next month in Hawaii they are committed to finishing the talks and have the "broad outlines" of a final deal. It could take as much as another year to conclude the ambitious negotiations.

Obama is hosting the annual summit of the 21-member Asia-Pacific Economic Cooperation forum. All the TPP countries are also members of APEC.

Washington wants strong rules on state-owned enterprises in the TPP partly because the pact could become the foundation for future trade talks with China, a country with more than 20,000 state-owned companies.

A study conducted for the U.S.-China Economic and Security Review Commission by the Washington consulting firm Capital Trade Inc said firms under various forms of Chinese state ownership controlled 50 percent of China's economy -- with huge impact on economic policy and trade.

Malaysia, another country in the TPP talks that has state companies, said it wanted to study the U.S. offer further before staking out a position.

U.S. negotiator Barbara Weisel said the proposal was drawn up after consulting with the business community and labor unions, which feel strongly that state-owned enterprises enjoy unfair support.

The United States for the first time this week also outlined its ideas on protecting workers' rights, another potentially contentious area of negotiation.

Delegates from the nine TPP countries -- Peru, Chile, Australia, Brunei, Malaysia, New Zealand, Singapore, the United States and Vietnam -- said they made significant progress in Lima in other areas but that sticking points remained, especially rules for intellectual property rights and market access.

"The U.S. and other negotiating teams will return to their respective capitals and update their ministers on the specific outcomes of their work over the nine negotiating rounds, in preparation for assessment by the nine leaders at the APEC meeting," U.S. officials said in a statement.

Vietnam 2nd refinery construction delayed to Q1 2012

Construction of the $7.5 billion Nghi Son oil refinery, Vietnam's second such facility, is likely to be delayed until the first quarter of 2012 instead of the last quarter this year, a senior executive from one of the contractors said on Thursday.

The 200,800 barrel-per-day (bpd) plant will process sour Kuwaiti crude oil, said Dominique Peiffert, General Director of French oil services group Technip SA in Vietnam.

"We are ready to start the construction and is now waiting for the owner," he said on the sidelines of an oil and gas expo in Hanoi.

Construction of the Nghi Son plant, owned by Petrovietnam, Kuwait Petroleum International, Japan's Idemitsu Kosan Co and Mitsui Chemicals Inc , will take between three and four years to complete, said Peiffert.

The French group, Japanese engineering firm JGC Corp and Spanish oil engineering group Tecnicas Reunidas are building the plant in northern Thanh Hoa province, 215 km (134 miles) south of Hanoi.

Hideto Murakami, General Director of Nghi Son Refinery and Petrochemical Co, the owner of the plant, confirmed the delay.

"We are targeting to start construction early next year," he said via the telephone. Industry sources said the delay is due to financing issues and government procedures, but Murakami declined to comment on this.

Early this month, Vietnam's state oil and gas group Petrovietnam said it planned to start construction in the last quarter this year.

Kuwait Petroleum International will receive funding from the International Finance Corporation to build and develop the Nghi Son refinery, its chairman was reported on Sept. 30 as saying.

Vietnam Su Tu Den output down 40pct to 50,000bpd-KNOC

Output from Vietnam's Su Tu Den oilfield has slid by 40 percent to about 50,000 barrels per day (bpd) and could stay around that level for a decade or more, Korea National Oil Corp (KNOC), one of the operators, said on Thursday.

The remark by Joeng Chang Seok, managing director of KNOC Vietnam, confirmed those of oil traders who had said production was down sharply from last year when the field produced 80,000-85,000 bpd.

PV Oil, Petrovietnam's trading arm, has not offered any spot Su Tu Den cargoes for December after production hit a sharp natural decline this year.

Joeng also said KNOC had made no decision yet about whether or not to consider buying ConocoPhillips' 23.25 percent stake in a complex of five oil fields in Cuu Long basin block 15-1.

In July state oil and gas group Petrovietnam said it may buy the stake in the field, which lies in the South China Sea, in conjunction with its partners to help protect Hanoi's territorial claim.

Petrovietnam's chief executive Phung Dinh Thuc said ConocoPhillips may sell the oil assets because it was scaling back its presence, possibly as part of a restructuring.

In Block 15-1 its partners include Petrovietnam with a 50 percent interest, KNOC with 14.2 percent, South Korea's SK Corp , with 9 percent and Monaco's Geopetrol with 3.5 percent.

Cash crunch forces investors to sell thermal-power projects

Many small-capacity thermal-power plant projects have failed to proceed after getting licenses due to cash shortage, some of which have been put on sale or offered to be transferred to cut losses.

Do Duc Quan, deputy head of the Ministry of Industry and Trade’s Energy Agency, told newswire Saigon Times Online that 200 thermal-power plant projects with capacity of under 30MW around the country had been licensed but construction works only started on less than 20 percent of them.

The most common cause of this, Quan said, was that the investors had failed to mobilize capital from banks.

He added that the exorbitant lending rates also discouraged investors.

For instance, the investor of a thermal-power plant in the northern province of Cao Bang has announced to transfer the project since he could no longer deal with the capital shortage, he said.

Meanwhile, Nguyen Van Nha, deputy director of the Viet-Laos Investment and Economic Cooperation, also told the Saigon Times Online that his company had stopped investing in the My Ly and Nam Mo 1 thermal-power plants due to financial difficulties.

“A 10MW thermal-power plant needs an investment of VND300 billion, which takes the investor 10 years to recoup the investment at the lending rate of 13 percent a year,” Quan said.

“But with the current rate of between 18 and 20 percent a year, investors will surely incur losses.”

He said though only accounting for only 3 percent of the country’s total power production, the small thermal-power plants would affect the national power system if their construction were delayed.

Central bank to tighten management over gold trading

The State Bank of Vietnam yesterday announced a new draft decree on the management over gold trading, highlighting a restriction on those eligible for producing and trading the gold bullion bars.

Accordingly, only businesses with a minimum registered capital of VND500 billion (US$24.3 million) and holding at least 25 percent of the gold bullion producing market share in the last three years are licensed to make gold bullion bars.

The draft decree aims to discourage speculative and manipulative gold trading in Vietnam by reducing the number of businesses eligible to trade the metal through the setting of higher requirements for the gold trading business license.

To obtain the license, businesses are required to have a minimum registered capital of VND100 billion, two years of experience in trading gold, and a dealer and shop network in at least three provinces and cities.

Moreover, only those that have tax payments of at least VND500 million a year during the last two years are eligible for the license.

The central bank said it would also tighten imports and exports of raw material gold.
Figures from the central bank show that there are currently 12,000 gold traders around the country, mostly operating in Hanoi and Ho Chi Minh City.

At present, the central bank has granted only eight gold traders and credit institutions the license to manufacture gold bullion.

The central bank said many gold traders have linked with each other to speculate on gold, opening illegal gold trading floors, illegally trading foreign currencies and manipulating the gold market.

Gold smuggling across Vietnam’s borders is also rife, it added.

The central bank said the undesirable activities on the domestic gold trading market were mostly caused by fluctuations on the global gold market, high inflation, and the instability of the country’s macro-economy, which encouraged the public to hoard gold against the depreciated national currency.

Local food firms join hands to boost competitiveness

Saigon Trading Group (SATRA) and Dong Nai Food Industry Corporation (DOFICO), two well-known local businesses in the food trading sector, Tuesday decided to team up with each other to establish a food supply chain to strengthen their competitiveness against foreign rivals.

Under a memorandum to become each other’s strategic partners, SATRA and DOFICO will have their two subsidiaries -- food processor and trader VISSAN and animal feed producer PROCONCO – join hands to set up a complete food supply chain from feed manufacturing to slaughtering, processing and product distributing, Sai Gon Tiep Thi newspaper reported.

VISSAN has 40 years of experience in the food processing industry with a modern food processing line and a distribution network of hundreds of stores nationwide, while the 20-year-old PROCONCO is holding a large market share in the animal feed sector with annual production of 1.2 million tons.

The companies said the partnership would help reduce their dependence on outside sources for input materials, while insiders said the two were also aiming at taking back the market share which had been dominated by foreign firms, including the CP Vietnam Livestock Corporation (CP).

Supplying around 150,000 pigs to the market every month, CP accounts for 30 percent of the 8,000 pigs consumed in HCMC every day, enabling the company to determine pig prices on the market.

Meanwhile, VISSAN has to rely heavily on CP for the raw materials for its food processing.

SATRA and DOFICO said they planned to develop a herd of 25,000 breeding pigs and 500,000 pigs next year.

“The herd will help us to become less dependent for raw materials on third parties,” Nguyen Thi Le Hong, DOFICO’s chairwoman, said.

PV