Palm oil holds potential for poor farmers

Oil palm trees have the potential of raising the incomes of poor farmers in disadvantageous areas, according to a HCM City resident who has planted more than 10ha of oil palm (Elaeis guineensis) trees.

Le Thi Hong, a 62-year-old, grows oil palm trees for ornamental use, fruit, and seedlings.

"The trees can grow well without fertiliser. There are no diseases," she said. "I think the trees should be piloted as a new tree to improve the livelihood of farmers."

After visiting plantations where the trees are cultivated, she noticed that the trees could grow well if enough water was provided.

"They can grow well in wetland areas with a pH content of 3.8, so I think farmers in the Cuu Long (Mekong) Delta could grow them," she said.

The trees are planted in a variety of areas, including wetland soil in the city's Hoc Mon District, soil with a high proportion of sand in Binh Duong Province, and soil with low water content in the Central Highlands province of Lam Dong.

"In the Delta, farmers can make earthen beds soaked with water to plant oil palm trees, as they raise fish in small ponds," Hong said.

Viet Nam has not developed oil palm as an industrial tree though the country's demand of palm oil is on the rise. The country imports around 500,000 tonnes of palm oil at a cost of US$500 million a year.

In 1971, a national programme to pilot a oil palm-tree planting programme was conducted in central Ha Tinh Province, where the trees grow well. But people cut them to have land to raise deer.

The success of Hong draws the attention of sectors, including agricultural authorities, farmers' associations, scientists and food oil manufacturers.

Nguyen Tri Ngoc, director of the Cultivation Department under the Ministry of Agriculture and Rural Development, and the Cai Lan Oils and Fats Industries Company visited her farms.

Last weekend, the Chu Se District farmers' association from Gia Lai Province in the Central Highlands paid a visit to Hong's farms to ask for technology transfer and seedlings.

"We tried to find a tree that would result in high value as we have some free land and pepper, coffee and rubber cannot grow well," said Hoang Phuoc Binh, a member of the association.

"I think oil palm trees are best suited to free wetland areas around Adyun Ha reservoir as well as the customs of local ethnic minorities, who want trees that are easy to take care of," he added.

Hong's idea began 10 years ago, after a trip to Malaysia. "I saw that Malaysia, Indonesia and Thailand could grow them well. Why not in Viet Nam?" she said. "We have a huge need for palm oil."

She and her husband Cao Van Trieu, who holds a doctorate in veterinary science, collected oil palm nuts from the Sai Gon Botanical Zoo in HCM City later to use for planting.

They are planning to use mechanical equipment to extract oil from the harvested palm fruit.

"We are trying to use extracting equipment made by local mechanics. But I want to emphasise that oil is not the only product from oil palm trees," she said.

Baggasse from the extractions could be used for cattle feed, while the tree branches could be material for plywood production. Leaves could be used to burn or fertilise materials.

Trees could be also sold for ornamental purposes to golf courses and households or used for pavement planting.

Hong, however, does not plan to earn an income from the trees, as she and her husband run their own company trading veterinary products with an annual turnover of VND700 billion ($33 million).

They want to act as a pioneer in planting oil palm trees, producing raw oil, developing seedlings and trading ornamental palm trees, and then transfer the results to farmers.

They are transferring planting technology from a company in central Thanh Hoa Province to develop oil palm farms in Laos.

"My husband and I love farmers. So we are not trying to make profit from palm oil, but rather want to help farmers with an industrial tree that could improve their livelihood," she said.

Mercedes-Benz dealer accused of deception

Vietnam Star Automobile, an authorized retailer of German automaker Mercedes-Benz in Vietnam, has been accused of selling an old model car at the price of a new model one.

Last January Nguyen Thi Kim Lan, director of Ho Chi Minh City-based Thien Thien Phu Co. Ltd, bought a Mercedes - Benz GLK 300 4Matic 2011 model from Vietnam Star at US$70,400.

2 months later, Lan registered the car and was stunned to learn from the registry that her car was in fact manufactured in 2009.

When she complained to the retailer, its sales manager, Nguyen Paul Toan Thang, assured her that the car was not made in 2009.

He said the car’s frame number only indicated the year the frames were made, not the time when the whole car was assembled.

He said that Lan’s vehicle was assembled by Mercedes – Benz Vietnam (MBV) last July.

But Lan was still not satisfied with these answers.

“No one would expect to buy a car that was manufactured 2 years ago for over $70,000,” she said.

“When I used the car as collateral for a bank loan, it was valued at less than 30 percent of its original price.”

Lan continued to petition until last August, when Thang told her that Vietnam Star could not give her a 2011 model car or the 30 percent price difference.

But Thang said instead she was offered a trip worth $10,000 to Frankfurt City in Germany to attend an automobile exhibition.

Lan, however, turned down this offer.

In the purchasing contract signed between Lan and the dealer, there was no information about the manufacturing year of the car.

In a meeting with Lan early last month, Martin Schulz, MBV’s director of sales and marketing, affirmed that all parts of the car Lan had bought were imported from Germany in October 2009 and the car itself was first assembled last June and completed a month later.

Ingbert Grombach, MBV’s technical director, said there was an inconsistency in the vehicle identification number (VIN) which indicated a vehicle’s model year in Lan’s case.

Grombach said all cars were made at MBV, but the VINs were granted by its parent company Daimler in Germany and this sometimes resulted in cases when the VINs were not consistent with the real model years.

Meanwhile, a representative of the Vietnam Register, the government agency in charge of vehicle safety, said the agency was completely capable of determining whether the car was produced in 2009 or 2011.

“The difference between cars of 2009 and 2011 model years is quite considerable,” he said.

Ho Chi Minh City cancels software park license

Ho Chi Minh City authorities said yesterday they have revoked the license issued to TA Associates Vietnam for building the Thu Thiem Software Park in District 2 for failing to proceed on schedule.

The people’s committee said TA had failed to proceed with the project as committed despite much support extended to it.

The US$1.2-billion, 650,000 sq.m park in the Thu Thiem New Urban Zone broke ground in July 2008 and was scheduled for completion next year.

It was expected to provide around 70,000 jobs.

The city government has ordered the Thu Thiem New Urban Zone to look for another investor to replace TA.

In 2009 the zone had asked the people’s committee to revoke the license due to tardy progress, Vietnam Investment Review weekly said.

At that time, amidst the global financial crisis, TA had delayed paying land rentals too, VIR quoted the zone as saying.

Caution advised on bank reform

Restructuring the banking sector is drawing special attention from the public as the sector exerts great impact on the economy’s stability and lives of people who consider banks the safest place for their assets.

Up to June, 2011, Vietnam has five state commercial banks, one bank for social policies, one development bank, 37 private joint stock commercial bank, five joint venture banks, five wholly foreign-invested banks, 48 branches of foreign banks, 48 representative offices of foreign banks, 18 financial companies and 12 financial leasing companies.

The banking sector’s total credit balance for the economy recorded an average growth of over 29 percent annually and was equivalent to 116 percent of GDP by the end of 2010.

Vu Viet Ngoan, Chairman of the National Financial Supervisory Committee, said despite the large number, the banks’ quality is still limited with many banks weak in financial and administrative capacity, especially administration of risks.

The aforementioned reality and impacts of the world economy’s instability have pushed many banks into difficulties and bad debts up.

According to the World Bank and the State Bank of Vietnam (SBV), the percentage of bad debts in the entire banking system stood at 3.1 percent in August, 2011 compared to 2.16 percent in 2010, and the figure is expected to climb to 5 percent by the end of this year.

For this reason, many National Assembly deputies at a debate on socio-economic development plan for 2011-2015 on Oct. 27-28 also underlined the urgent need to reform the banking sector. This is also one of three breakthrough steps defined by the Government to restructure the economy.

Nguyen Dong Tien, SBV Deputy Governor, said the SBV is building a project on bank reform in the spirit of ensuring banks’ normal operations and legal rights of depositors.

The SBV encourages merger and acquisition (M&A) of credit institutions to facilitate the restructuring process, Tien said.

The recent time witnessed many M&A transactions among banks such as the merger between Lien Viet Bank and Vietnam Postal Saving Service Company into Lien Viet Post Commercial Joint Stock Bank, Vietinbank’s selling of a 10 percent stake to the International Finance Corporation and Vietcombank’s selling of a 15 percent stake to Mizuho Bank of Japan .

Apart from the bank reform project, the SBV is also compiling a decree that requires commercial banks to meet minimum charter capital of 5 trillion VND by 2012 and 10 trillion VND by 2015. This is also seen as a strong method to force banks to restructure if they want to exist and operate effectively.

Businesses commit to combat climate change

The World Wide Fund for Nature (WWF) and the German Embassy in Vietnam on Nov. 7 launched the Mekong Delta Business Forum to engage the business sector in initiatives to respond to climate change in the Mekong Delta.

Speaking at the event, Henning Plate, Development Counselor of the German Embassy said climate change and its global impact are key topics for Germany’s foreign policy, noting that due to the unique geography, Vietnam is among the countries most heavily affected by the consequences of climate change worldwide.

“By introducing and funding the forum, the German Embassy in Hanoi wants to encourage the private sector to take up a leading role in reducing the risks and costs of climate change,” Hunning Plate said.

The Mekong delta is one of the areas in the world most vulnerable to effects of climate change.

According to Hoang Viet, WWF’s project coordinator in Vietnam, rising sea levels, saltwater intrusion and an altered flow in the Mekong are having negative impacts on the livelihoods of 18 million people living in the area.

Thus, WWF calls on businesses to participate in the fight and encourages the private sector’s involvement in building initiatives and methods to enhance climate resilience and sustainability in the Mekong delta.

Within the framework of the forum, there will be a series of educational activities such as a mangrove forest planting and field trips to ecological hot spots and climate change prone areas in the Mekong delta. Businesses are also encouraged to take part in WWF’s current initiatives for adapting to and mitigating climate change such as, Earth Hour, Green Office, Climate Savers, Climate Camp and the Mekong Delta Conservation Forum.

VN, India talk measures to achieve $7 bln trade target

A Vietnam-India workshop took place in Hanoi on Nov. 7 to promote economic cooperation and investment between the two countries towards the goal of US$7 billion in two-way trade by 2015.

Themed “India Calling 2011”, the workshop was co-organized by the Vietnam Chamber of Commerce and Industry (VCCI) in cooperation with the Ministry of Industry and Trade (MoIT) and the Indian Embassy in Vietnam .

Speaking at the workshop, MoIT Deputy Minister Le Duong Quang affirmed that Vietnam wants to promote multifaceted cooperation with India, which is one of the 10 largest trade partners of Vietnam.

He pledged Vietnam will facilitate Indian enterprises’ business and investment in Vietnam in the fields of finance, energy, education, construction, hi-technology, machine and equipment.

Indian Ambassador Ranjit Rae stressed that India considers Vietnam as a special partner, because of the country’s strong potential and attraction.

India will create favorable conditions for Vietnamese businesses to invest in India, especially in infrastructure, construction, Ranjit Rae affirmed, adding the $7 billion target is within reach when the India-ASEAN agreement on free trade of goods takes effect.

In the first ten months of this year, the export-import turnover between Vietnam and India reached nearly $3 billion, up 40 percent over the same period last year.

Hanoi forum fosters VN-Estonia business links

Vietnam and Estonia will speed up negotiations and sign agreements on economic cooperation and double taxation avoidance, says Vietnamese Minister of Industry and Trade Vu Huy Hoang.  

The two countries will also establish a joint commission to chart a course for stronger bilateral ties in the coming years, Mr Hoang told a Vietnam-Estonia business forum in Hanoi on November 7.

The event, jointly held by the two countries’ chambers of commerce and industry, is part of the Estonian Prime Minister’s current visit to Vietnam.

Bilateral trade relations have not matched their potential with two-way trade turnover only reaching about US$10 million in 2010.

Vietnam exports seafood, fruit and vegetables, cashew nuts, coffee, wood products, and garments to Estonia while it imports dairy products, chemicals, and rubber.

Estonian Prime Minister Andrus Ansip introduced his country’s advantages, saying that Estonia is an important goods transshipment centre with a number of large seaports. Therefore, the country can become the distribution channel for Vietnamese exports to Russia and Northern Europe.

State to cut tax rates

The Government has issued Decree 101/2011/ND-CP based on cutting corporate and individual tax rates to iron out snags in production and business activities.

According to the decree, tax will be reduced by 30-50 per cent by the end of next year.

Enterprises in line for tax reductions include those operating in agricultural, forestry, fisheries, textile, garment, leather, footwear and electronic part production sectors and those contributing to socio-economic development.

Business sectors related to the lottery, real estate, finance, securities, banking, insurance, goods production and service trading already enjoy special consumption taxes.

Parent company subsidiaries will also fall outside the sphere of new tax levels.

The decree will come into effect on December 20.

Raising coal prices under discussion

Vietnam National Coal-Mineral Industries Group (Vinacomin) once again proposed raising the price of coal at an October teleconference held by the Ministry of Industry and Trade (MoIT) on November 7.

Vinacomin officials said that the price of coal for electricity generation should be adjusted in 2012 to reduce the financial burden on the group.

However, the MoIT’s heavy industry department believed that any adjustment of coal and electricity prices should be appropriate with the economy and the MoIT would ask the Prime Minister for the right time to do so.

Vinacomin Vice Director General, Nguyen Quang Bien, insisted that current coal prices are equal to 50 percent of the production cost and if the rising level of prices stands at only 30 percent annually, it would take another three years to equalize prices and costs for 2011.

Bien also cited high taxes, including environmental and natural resources taxes, as mounting pressure on their intention to raise coal prices.

According to Bien, the group produced an estimated 39.6 million tonnes of coal in the past 10 months, a 3 percent increase year on year.

Mekong Delta Business Forum launched

100 businesses and experts on climate change attended the launch ceremony of the Mekong Delta Business Forum, which was held by the World Wildlife Fund (WWF) and the German Embassy in Vietnam in Ho Chi Minh City on November 7.

The forum is aimed at encouraging the business sector to commit to dealing with climate change challenges in the Mekong Delta region, said the German Embassy.

In order to tackle the challenges, the WWF and the German Embassy asked businesses to reduce their consumption of energy to achieve sustainability in their operation. The organizations hope to gain more businesses’ involvement in ameliorating the environmental impact on the region.

At the launch ceremony, members of the forum shared experiences with environmentally-friendly initiatives, sustainability, and the reduction of carbon dioxide emissions, and discussed action plans with the assistance of climatology experts.

Dr. Henning Plate, Development Counsellor of the German Embassy said climate change is the main concern of Germany’s foreign policy while Vietnam is among the countries most seriously affected by the arratic weather pattern.

By launching and sponsoring the forum, the German Embassy wishes to encourage private businesses to take a leading role in reducing the risks and the costs of climate change, he said.

Hoang Viet, WWF Vietnam’s coordinator, said rising sea levels, salt infiltration, and current changes of the Mekong River may have a negative impact on the lives of 18 million residents in the Mekong Delta region.

“We are calling on the business sector to participate in the struggle against this phenomenon,” he said.

Businesses taking part in this forum will be able to engage in various activities on environmental education and join WWF initiatives to reduce the impact of climate change such as the Earth Hour, Green Office, Climate Protection, Climate Camp, and the Forum for the Preservation of Mekong Delta.

Liquidity stresses spread to securities

Liquidity stresses in the nation's banking system have begun to spread to securities companies, with SME Securities Co's recent inability to cover its payments elevating investor wariness about safety of their deposits at brokerages.

The Viet Nam Securities Depository highlighted the problem last week when it suspended SME's custody operations due to its cash shortfall in clearing transactions. Although the amount in deficiency was just VND1.6 billion (US$76,200), the company was unable to draw on the Settlement Support Fund because of the number of times it had violated payment obligations.

SME attributed the failures to technological shortcomings and blamed its accountants, but its shares have nevertheless plunged for the last five sessions, closing yesterday at just VND2,800 per share, with investors rapidly unloading the shares.

This incident reignited investor concerns about the safety of investor deposits at securities firms. Independent financial analyst Pham Viet Hung said that, if the SME case were not well managed, it could spread to other companies and investor confidence in the securities market would collapse.

Hung predicted that there would nevertheless be a strong wave of investors withdrawing their deposits from smaller securities firms and transferring them to larger ones – or shifting their investment to other channels altogether.

According to the State Securities Commission, 12 securities companies in early October had a usable capital ratio (total usable capital to total risk exposure) of less than 180 per cent, while five of these had a ratio of below 120 per cent – sufficient for the commission to put them under special control.

The third-quarter earnings reports of securities companies, meanwhile, suggest that many firms lack the cash to cover daily payments. Their ratios of cash and other liquid assets over short-term debt are as low as 6.85 per cent at SME, 12.27 per cent at Trang An Securities Co, 11.22 per cent at An Phat Securities, and 3.02 per cent at Golden Bridge Securities.

Analysts feared that mounting concerns about the possible insolvency of securities companies could have a ripple effect, reducing investment in the stock market and throwing even healthier securities firms into distress. This could, in turn, drive up bad debt levels at commercial banks.

A number of analysts have suggested that securities companies hold investor deposits in accounts separate from their operating accounts in order to better protect investor interests. However, Pham Hong Son, director of the State Securities Commission's Securities Business Management Department, admitted that current technology platforms were not adequate for firms to accomplish such a change before the end of next year.

Infrastructure development’s big price tag

.A fresh infrastructure development approach is imperative.

Ministry of Planning and Investment (MPI) statistics show that Vietnam needs $295-305 billion based on 2010 prices and $385-395 billion based on actual prices, to pump into planned infrastructure projects up to 2020.

However, the country is reportedly in a position to raise around $210-215 billion for infrastructure development in the next decade, more than a half of the proposed figure.

For 2011-2015, Vietnam will need $106.2-111 billion to service infrastructure needs with $53.1-55.5 billion spent on transport infrastructure development, $20.6 billion on power sector infrastructure, $10.6 billion on urban and rural infrastructure and $4.8 billion on information communications technology infrastructure.

The country’s largest challenge in developing infrastructure was addressing the capital mobilisation dilemma, according to MPI’s Development Strategy Institute deputy head Nguyen Ba An.

In the ‘Developing local synchronised infrastructure system serving industrialisation and modernisation cause from 2010-2020’ plan developed by the MPI, the MPI voiced its proposals to help boost infrastructure development up to 2020.

Accordingly, the MPI recommended shifting the state’s role from direct investment into profit and risk sharing with private equity investors. This means, the state will mostly engage in site clearance, giving commercial support to infrastructure development and executing works that are not willingly handled by non-state investors.

Besides, the MPI proposes the government soon give birth to a legal framework on risk-sharing between the state and private equity investors, ensuring healthy competition among private performers in infrastructure services provision via public private partnership, build-transfer or build-operate-transfer models.

The MPI also urges the government to soon introduce policies to help turn land resources into a wealth to benefit infrastructure development.

Supportive of this idea, Ministry of Transport’s key transport infrastructure project steering committee former administrative chief Nguyen Ngoc Long said infrastructure development targets in the next decade could not be achieved unless there were breakthroughs in policies to offset capital shortfalls.

Industry experts said a lack of risk-sharing schemes between the state and private investors and mechanisms to turn land into development resources and inappropriate fee collections were major hindrances scaring away investors.

Total capital for infrastructure development in the past decade was around $80 billion, equal to 9 per cent of the country’s GDP and one-fourth of total investment development capital during the period, a fairly high level compared to China with 20-22 per cent of GDP, Indonesia 19-20 per cent and the Philippines 18-19 per cent.

Work starts on nitrate factory

Viet Nam National Coal and Mineral Industries Corporation (Vinacomin) started construction of a US$280 million ammonium nitrate plant in the northern Thai Binh Province's Thai Thuy District on Saturday.

The plant, with a designed capacity of 200,000 tonnes per year, is scheduled to be completed in 2014.

Once operational, the plant is set to create jobs for 150 labours and generate a profit of VND120 billion ($5.7 million) per year.

Heerim-PVC to build PVN university

The Viet Nam National Oil and Gas Group (PVN) and Heerim-PVC International Design Joint Stock Company signed a consultation contract to build the PetroVietnam University.

PetroVietnam University, the first such university in the country, will cover an area of nearly 149ha in the northern province of Vinh Phuc.

PVN selected Heerim as the design consultant for the first phase of the project after considering 20 other international bidders.

Nestle to build $16m factory

Nestle Viet Nam Co Ltd has received an investment licence to build a factory in southern Dong Nai Province's Amata Industrial Zone.

The factory will cost US$16 million and be able to process, pack and produce the company's products, including beverages, grain, coffee, fruit juice, spice and instant noodles. Previously, in August, Nestle also announced its $270 million investment on building a new coffee factory in the province which is slated to become operational in 2013.

Phu Yen withdraws eight projects

The south central province of Phu Yen has scrapped eight projects because investors lacked financial capacity and didn't pay their investment deposit.

The projects include Nam Tuy Hoa Creative City project, O Loan tourism project, the Ca Ton and Phu Mo hydro-electric plants and five other projects. The biggest project to get the axe was Nam Tuy Hoa Creative City project with a total registered capital of US$11.4 billion by Galileo Viet Nam Investment Group.

Income tax to be cut 30% for small business

The Government has offered income tax cuts and exemptions in aid of reducing obstacles in production and business activities resulting from the local economic crisis.

According to Decree 101/2011/ND-CP, corporate income tax payable by small- and medium-sized enterprises this year will decline by 30-per-cent.

Enterprises in line for tax reductions include those operating in agricultural, forestry, fisheries, textile, garment, leather, footwear and electronic part production sectors and those contributing to socio-economic development.

The reduction would be not applied for income tax from business sectors related to the lottery, real estate, finance, securities, banking, insurance, goods production and service trading.

Parent company subsidiaries will also fall outside the sphere of new tax levels.

The decree additionally stipulates a 50 per cent reduction in individual income tax from July 1 to December 31, 2011, alongside a fixed value-added tax to be applied to households or individuals providing accommodation and catering services to shift workers, students and baby-sitters.

Both value added and corporate income tax will be halved over the same period, but will exclude shift workers employed in transport and aviation.

To be eligible for a tax reduction, households and individuals will have to engage in keeping rent, baby-sitting costs and food prices stable and at the same level as those in December 2010.

Meanwhile, individual income tax from August 1 to December 31, 2012, will be made exempt based on individual dividends gained from securities and corporate investments (excluding dividends from joint stock banks, financial investment funds and credit organisations).

A reduction of 50 per cent will be levied on individual income tax from August 1, 2011 until December 31, 2012, in relation to securities trading.

The decree will come into effect on December 20, 2011.

Saigon Railways to begin online sale of Tet tickets this month  

Saigon Railways will begin online sale of train tickets for the coming Tet holiday season via its website www.vetau.com.vn from 8 am on November 15, said Nguyen Van Thanh, deputy head of Saigon Railways.  
 
Tickets from Dong Ha City in Quang Tri Province to Hanoi will be on sale from November 15-20, from Hue to Ho Chi Minh City from November 22-27, from Ho Chi Minh City to Hanoi from December 1-10.

Tickets on crowded routes will go up by 10 percent and 19-39 percent during peak hours.

Vietnam Railways also offers a discount of 50-79 percent on the north-south route before and after the Tet holiday season.

The national railway will add more trains on the occasion of Tet to meet the increasing demand on several routes including Hanoi-Ho Chi Minh City, Ho Chi Minh City-Hue/Quy Nhon/Quang Ngai/Nha Trang/Phan Thiet.
 
Ho Chi Minh City to host Int’l Jewelry Fair  

An International Jewelry Exhibition Fair will be held at the Phu Tho indoor stadium in District 11 in Ho Chi Minh City from November 10-14.  

More than 100 local and international enterprises will display their collections in 120 booths at the fair.

Foreign jewelry companies from the US, Italy, India, Malaysia, Japan, China, Hong Kong (China), Turkey, Thailand and South Korea will participate at the fair.

This is the largest jewelry fair in Vietnam and serves as a rendezvous for jewelry production houses and trade businesses, while displaying the skillful artistry of craftsmen with the latest designs, technology and equipment in the jewelry sector.

Besides jewelry, there is also an area for display of watches at the exhibition site.

The International Jewelry Exhibition Fair is held annually by Saigon Jewelry Holding Company (SJC) since 1992 and is recognized as the largest Gem and Jewelry event in Vietnam.
 
Agribank, Vicofa collaborate to boost coffee exports  

Vietnam Bank for Agriculture and Rural Development (Agribank) has recently signed an agreement with Vietnam Coffee and Cocoa Association (Vicofa) to lend more support to coffee firms to boost coffee exports during the period 2011-2012.  

Vietnam’s largest bank has pledged support of VND5 trillion at reasonable interest rates to local coffee firms in producing, purchasing, processing and exporting of coffee.

Easier access to bank loans will greatly help coffee firms to increase their competitiveness.

So far the bank has disbursed VND700 billion to coffee firms since the beginning of the crop season this year.

Friesland Campina to help farmers increase milk production  

Friesland Campina Vietnam has invested US$13 million to help local farmers increase milk production and produce high quality milk through its Dairy Development Program implemented since 1995.

Over the years the company has established an organised milk collection system, quality control and milk payment incentive schemes in rural areas where local farmers can have a secure milk outlet. These methods by the company, via their Dairy Development Program, gradually helped to replace imported milk with domestic milk and created stable jobs and an added income for farmers.

To date, Friesland Campina Vietnam has helped more than 2,400 farms and individuals owning a total of 27,200 dairy cows in several south-eastern provinces of Binh Duong, Binh Phuoc, Tay Ninh and Ho Chi Minh City.

Friesland Campina Vietnam helps collect 60,000 tons of milk per year in the country.  

Kumho Tires mulls US$100 million for expansion

South Korean-invested Kumho Tires Vina will pour US$100 million next year to double capacity at its factory in the southern province of Binh Duong’s My Phuoc 3 Industrial Park, said the company’s Chief Executive Officer.

Seo Han Chang told the Daily at the Vietnam International Shop+Franchise Show 2011 that his company would spend the sum to double output to six million tires a year from the current three million products to supply local and global markets.

The additional investment will raise the company’s total capital in the factory to US$300 million, in line with its initial goal to invest US$500 million in Vietnam to boost output to 13 million auto tires of various types.

General Director Chang said the increased output is aimed to meet the increasing demand for auto tires on the global market.

The company decides to boost production in Vietnam to make use of the ample rubber supply in the local market, while output at Kumho’s other factories in South Korea and China will remain unchanged, Chang said. Kumho Tires currently operates three factories in South Korea and four factories in China.

Kumho Tires Vina supplies the local market some 200,000 tires a year, and the company is seeking to boost sales on the local market by looking for more sales agents and promoting the franchising business here. The company currently has 13 franchisees in the local market, and is eyeing 30 such shops in the near future.

Vietnam’s tire and inner tube industry is still small-sized, and is limited to just a few companies like Casumina, Sao Vang, and DRC, but the majority of products are for motorcycles rather than automobiles. Therefore, the local demand is largely satisfied by imports, which most of local rubber is export as raw material.
 
Apartment prices seen to keep dropping

Property market observers are wondering if there would be a trend of strong discounts in the next few months given that many investors are selling out their apartments at low prices to cut losses.

Fiachra Mac Cana, managing director and head of the research department of the Hochiminh City Securities Co. (HSC), predicts the property market will witness a sale-off season from now until February next year, impacting the market situation in general.

Mac Cana states the apartment price drop stems from banks seeking to collect their debts and putting a pressure on property firms.

However, Viet Capital Securities Co. says it is unknown if there will be such a discount trend, basing on the case of PetroVietnam Power Land JSC (PVL) alone.

Recently, PVL has announced to offer the apartments of PetroVietnam Landmark project in HCMC’s District 2 at a sharp discount due to a difficulty in liquidity. Particularly, PVL offered 85 apartments at VND15.5 million a square meter, some VND5.8 million lower than entry value and VND8.3 million lower than the previous offering price.

PVL was under a pressure to return the investment capital of VND100 billion borrowed from Lien Viet Commercial Bank. The company incurs a loss of some VND70 billion from this discount.

This event indicates the imbalance between demand and supply on property market. The lack of capital and liquidity will aggravate the gloomy business situation, according to Viet Capital Securities.

In another project, Saigon Mekong Company begins to offer 500 apartments belonging to An Tien Apartment project in Nha Be District south of HCMC at VND14.5 million per square meter, a drop of VND4 million from the previous price.

In fact, the trend of discount sale has lasted for the whole year. Most discount products have been sold indirectly through promotion programs.

Most apartments have been sold at discount prices through the wholesale of a block or a floor to financial capable companies. These transactions are often unknown to the public, thus triggering no domino effects on the property market.

Commenting on this trend, Nguyen Nguyen Thai, deputy director of CB Richard Ellis Vietnam, says project owners choose wholesale to quickly withdraw their capital. Few investors choose to pull down offering prices and sell apartments at a discount directly to individual buyers.

Besides cutting losses to escape from the market, many property firms have incurred losses in the last quarter due to market slowdown.

For example, Phat Dat Property Development Corporation has declared a loss of VND7 billion in the third quarter, after making a VND22.5 million profit in the previous quarter. Similarly, Transport Engineering Construction & Business Investment 584 Co. reported a loss of VND6 billion due to the lending rate hike.

Chris Brown, deputy housing director of property service provider Cushman & Wakefield, says individual investors and house buyers are not interested in apartment segment, even when gold and stock markets are unstable.

Consequently, the apartment market in HCMC saw a trading slowdown and a price drop from 15-20% in the third quarter.

Brown predicts the market will not prosper until next year. This year’s supply of 13,000 units along with the future supply will meet the demand for apartments in the next three years.
 
UK eyes Vietnam as an important emerging market

UK Secretary of State for Business, Innovation and Skills, Vince Cable, said Vietnam is one of the important emerging markets that the UK wants to build long-term relationships with in different fields, especially in trade and investment.

Cable highlighted the message at a meeting with reporters in HCMC on Thursday afternoon before he completed the HCMC leg of his visit to Vietnam. He is now in Hanoi to explore opportunities to deepen the strategic partnership between the UK and Vietnam through scheduled meetings with senior Government officials.

The UK recognizes that the growth and the dynamism of the world’s economy are coming from emerging markets, particularly in Asia, where there are India, China, Indonesia and Vietnam. Cable said these were among the countries especially important and that the UK would be taking “a lot of time and energy” to build long-term relationships with.

The UK is optimistic about its trade with Vietnam growing to a new level.

“We have set a target of US$4 billion for trade in both directions in 2014. That’s our objective and we are on track to achieve that…,” Cable responded to a relevant question raised by the Daily.

Last year, the UK-Vietnam trade broke the US$2 billion mark and is projected to reach US$3 billion within next year, according to the UK Trade and Investment in Vietnam.

Cable said the two-way trade was expanding rapidly and that Vietnam exported to Britain five times as much as that country’s exports to Vietnam. He noted this trade gap was not a problem but urged the European country to increase its exports to Vietnam.

Financial, educational and consulting services as well as high-tech manufacturing and services in the transport sector are among the fields that British companies seek to cash in on because of high demand in this country of more than 86 million people.

An example is the British Vietnamese International School (BVIS) in HCMC’s Binh Chanh District. Cable, HCMC Vice Chairman Hua Ngoc Thuan and other British and Vietnamese officials on Thursday participated in the official opening ceremony of this school.

Teachers at the school have been trained to UK standards and will teach curricula based on the British education system, but with due attention to the Vietnamese language, literature, history and geography.

BVIS principal Michael Deveney told reporter after the opening ceremony that the school had enrolled some 350 students aged from two to 14 for its first academic year. The school will be able to admit up to 2,000 students.

Speaking at the opening ceremony, Cable said British companies in Vietnam were looking for more employees with international qualifications and competence in English and Vietnamese languages.

At the press conference, Cable said a lot of British companies that he met said they were generally operating very well, appreciated Vietnam for its fast growth and good talented people, and wanted to expand in this market. Therefore, Cable said the message he received from British companies in Vietnam was “very positive.”

The UK and Vietnam signed a strategic partnership agreement in September last year with an aim to elevate bilateral relationships in areas of trade and investment, sustainable socio-economic development, education and training, science and technology, security and defense, and people-to-people links among others.

Cable said there had been specific steps already taken since the agreement and Vietnam Airlines’ launch of its direct flights to London this December was one of the direct results.

Now, the UK is trying to build up trade and investment relationships with Vietnam in the areas where British companies had advantages in financial services, know-how and capital for the public-private partnership projects (PPP), oil exploration and drilling.

At a meeting with reporters last month, British Consul General Tim Brownbill said the UK investment in Vietnam stood at US$2 billion and expected the number to exceed US$3 billion by the end of next year.
 
City promotes investments and trade in U.S

HCMC chairman Le Hoang Quan and representatives of local firms have attended many activities to promote investments and trade in the U.S during his trip stateside, according to the city’s Department of Foreign Affairs.

Chairman Quan visited New York City from November 2-4 at the invitation of the city’s mayor Michael Bloomberg to attend a conference on business renovation which attracted participation of leaders from 21 cities.

Participants discussed the role of large cities in renovating business models, creating more jobs and adapting to the global competition, which helps large cities maintain the pioneering role in their countries’ growth and development.

The New York mayor met chairman Quan and other leaders in the opening session.

In addition, during the trip, HCMC chairman visited the New York Stock Exchange (NYSE) and talked to the NYSE’s president Marshal Carter about the possibility of opening a U.S.-invested university in HCMC.

Besides, Saigontourist Travel Services Co. in the trip cooperated with Vietnam Consulate General in New York to hold a tourism promotion conference with the participation of over 80 U.S. firms who paid special attention to tourism infrastructure projects and services for tourists of the two countries.

Chairman Quan also met the governor of California, the mayor of San Francisco City and members of the San Francisco-HCMC Commission. San Francisco and HCMC have established sister relationship years ago.