Pathogen wipes out Ca Mau clam farm

Disease has wiped out the entire crop of clams farmed by 14,000 members of 16 cooperatives in a Ca Mau Province farm, and many of them face ruin.

The local Department of Animal Health pinned the blame on Perkinsus marinus, a pathogen that degrades tissues.

It said the pathogen originated from breeding stock provided by Khai Long clam farm’s suppliers in Can Gio, Ben Tre, and Tien Giang Provinces.

Khai Long’s cooperatives spent US$1.45 million to buy breeding stock for this year’s crop, which begins in July and ends 12 months later, Phan Quoc Viet, the farm’s deputy manager said.

But they only harvested dead clams in all three harvests (February, April, and June) this year, he added.

Without assistance from the authorities, Khai Long farmers are likely to go bankrupt since they are not only poor but also in debt.

Vietnam state monopoly in electricity to end Jan 1

As of January 1 next year, Vietnam will officially apply a competitive power market mechanism under which various companies can compete to win to the right to generate and sell electricity, Deputy Prime Minister Hoang Trung Hai has confirmed.

With this scheme, power prices will be decided by market forces and not regulated by the government.

This has been operational since July 1 on a pilot basis, attracting 83 power generators, each of which has a production capacity of over 30 megawatts.

This pilot project has gained positive results.

Deputy PM Hai has ordered the Electricity of Vietnam (EVN), the country’s power monopoly, to set up investment plans for IT infrastructure, operation regulations and payment methods.

Besides, EVN was required to draft up a plan to establish power generation firms and submit it to the government in the third quarter.

He also asked the Ministry of Industry and Trade to make plans to set up the National Power Adjustment Association, with the participation of governmental agencies and major power generators.

The plan is expected to be submitted to the government for approval in the last quarter of this year.

Outdated by-laws impede HCM City traffic projects  

Ho Chi Minh City has made huge efforts to call on the private sector to help construct and upgrade its traffic system as the city itself suffers from a lack of capital in its budget. However, it continues to face difficulties and setbacks brought about by outdated by-laws on road toll stations and compensation policies.  

As per the traffic development plan set until 2025, Ho Chi Minh City requires an average US$3 billion annually for infrastructure and repairs mainly in traffic projects.

Despite all efforts, the city has been unable to garner even one third of the required fund amount and remains dependant on domestic and foreign investors.

Bui Xuan Cuong, deputy director of the Department of Transport says that HCMC is leading the country in calling on investors, but out dated by-laws and red tape is marring further movement.

To clarify the point, the minimum distance between road toll stations is 70 kilometers. This was not problematic when roads built under BOT (Build – Operate – Transfer) were but a few, some years ago.

Today, building and upgrading a road is a necessity to easing traffic congestion, which requires more BOT projects. But with many sections not being as far as 70 kilometers, this is now an obstacle.

Cuong says that by-laws protect residents from paying too much road toll. This sounds rational to some extent but then if the city does not collect toll how will new roads and bridges be built.

Several departments have proposed adjusting the by-laws to be more realistic with current times, he said.

Binh Trieu 2 project has been ongoing for nearly ten years and only one bridge is complete, while roads leading to the bridge have yet to be built. One of the reasons for this stalemate has been huge compensation costs.

Vu Kien Thiet, director of the Urban Traffic Management said that the total expenditure for construction of the bridge is only VND1.1 trillion (US$52 million), but compensation costs reached VND6 trillion.

As per rules, investors have to only pay for construction while compensation is the responsibility of the city.

Over the last several years, HCMC has solved this issue by delivering required land to investors. Based on the value of the land, investors give the city money as compensation. However, now the city does not have much land left for investors.
 
Vegetable shortage raises prices in Hanoi  

Bad weather conditions coupled with heavy infestation of pests in vegetables has caused prices to rise as well as create a supply deficit in markets in Hanoi, as per the Department of Industry and Trade.  

The recent two very severe storms in the Northern Provinces caused heavy flooding in many parts, especially in the fertile Red River Delta, creating further difficulties in the cultivating of soil in preparation of summer-fall vegetable crops. Tons of vegetables also withered after the sudden intense heat that followed the heavy rains, particularly on vegetables planted without roof cover.

Even though the total vegetable growing areas is the same as last year, the supply has dwindled substantially, due to the above conditions.

The cost of seeds and saplings has increased, as have pesticides by 10-30 percent, together with wage hikes touching VND50, 000-80,000 (approx. US$2.4-3.9) per worker. Markets have hence advantageously hiked the prices of vegetables to prohibitive levels.

The average price of vegetables in the city during July shot up from 6-40 percent. For instance, lettuce was 25 percent costlier,  malabar nightshade 14 percent, cabbage 17-22 percent, chou rave 17-40 percent, sauropus 17-20 percent, potato 7-13 percent, water cress 8 percent and tomato 14 percent.

The good news is that the present price increase will encourage more farmers in the north to concentrate in growing more green vegetables, which could improve future deficit.

Power prices could rise by 44% next decade

In its plan for Vietnam’s power development from now until 2020, the Ministry of Industry and Trade suggests raising electricity prices by 44 percent as a solution to develop the power industry.

Under the plan, the total capacity of the national power system is to be quadrupled from the current 19,000MW to 75,000MW in a decade with the annual production reaching between 194 and 210 billion kWh.

At a press conference announcing the plan, Deputy Minister of Industry and Trade Hoang Quoc Vuong said to achieve these and other targets, the plan would need a total investment of VND929 trillion (US$48.8 billion).

Vuong said one way to mobilize this capital would be to increase electricity prices.
With the current power price of VND1,242 per kWh, the Electricity of Vietnam (EVN) has been suffering from losses , he said. EVN’s loss was VND8.2 trillion ($409.2 million) last year and VND3.5 trillion in the first half of this year.

Vuong said these numbers don’t include the VND10 trillion that EVN owes the Vietnam National Coal Mineral Industries Group and the Vietnam National Oil and Gas Group.

Prices would thus be increased to VND1,800 per kWH by 2020 to ensure EVN’s operation and help attract foreign investment to the local power industry, Vuong said.

As for whether prices would be raised this year, Vuong said the government would “consider a suitable time for price adjustment.”

China’s high costs drive outsourcing orders to VN

Many Vietnamese companies in labor-intensive sectors such as footwear, textile and garment have been receiving a large number of outsourcing orders transferred from China, where production costs have soared.

Ho Chi Minh City-based handbag manufacturer Thai Duong Company, for instance, said it had received orders to make 240,000 handbags a month in the first half of this year, which is a 20 percent increase over the same period last year.

“Most of the orders were transferred from China,” its director, Tran Thai Duong, said, adding that foreign manufacturers have increasingly placed their orders with Vietnam instead of China.

N.T., director of a major footwear exporter in the southern province of Binh Duong, said 15 percent of the US$30-million export turnover of his company in the first six month of this year came from the outsourcing orders transferred from China.

Nguyen Duc Thuan, chairman of the Vietnam Leather Footwear Association, attributed the increasing number of outsourcing orders to rising production costs in China.

A recent survey by consultancy KPMG Vietnam showed that from 2011-2015, workers’ wages were forecast to rise from $2.5 to more than $4.5 per hour in China, while in Vietnam it would rise from only $0.5 to around $1.5 per hour.

Thuan added that Vietnamese companies’ production capacity and workers’ skills have been much improved and this is also making Vietnam a more attractive outsourcing destination for foreign producers compared to Indonesia, India, Malaysia or Bangladesh.

Thuan said some well-known fashion brands such as Adidas, Nike, Puma and Prada are also restructuring their outsourcing markets by transferring their outsourcing orders from China to Vietnam and other countries to create a stable supplying source with competitive costs.

“Vietnamese enterprises should take advantage of this opportunity to improve their production capacity and workforce skills,” he said.

CapitaLand eyes more investments in Singapore, China

CapitaLand, Southeast Asia's largest property developer, expects to invest more than S$6 billion (US$4.97 billion) this year, mainly in Singapore, where it sees room for growth in the private residential market, and in China.

"This year we will probably do more than S$6 billion worth of investments. The investment will still continue to be in our core markets," Liew Mun Leong, CapitaLand's president and CEO told reporters on Thursday.

CapitaLand, about 40 percent-owned by Singapore state investor Temasek, will seek opportunities for acquisitions whenever expectations of land prices have moderated, he added.

Shares of CapitaLand have plunged about 25 percent since the start of the year, weighed by concerns that government measures to curb property prices in China and Singapore will hurt earnings. The Straits Times Index fell about 2.4 percent over the same period.

However, Liew said he remained optimistic about demand for housing in China despite the measures, and that Singapore's private residential market still has further upside.

"I think the private market (in Singapore) will still grow. If you look at sales now, although volume wise it has not caught up, but prices are still good," Liew said.

Singapore and China accounted for about 36 percent each of CapitaLand's total assets each as of the end of June.

Although CapitaLand's sales volumes in China have fallen in the first half of the year compared to a year earlier, the average selling price of its units have increased by 1,000 yuan (US$155.4) per square meter in the same period, Jason Leow, CEO of CapitaLand China said.

The property developer expects to launch about 2,500 more residential units in the second half of the year in China. It has already launched 1,700 residential units, and has a pipeline of 22,000 units over the next 4-5 years, it said.

CapitaLand said on Thursday its second quarter net profit, excluding revaluations and impairments, rose 27 percent year-on-year, helped by higher revenue from development projects in Singapore and China.

CapitaLand earned S$171.3 million (US$141.8 million) net profit excluding revaluations and impairments in the three months ended June, up from a restated S$135.3 million a year ago.

The company restated its 2010 earnings downwards to make them comparable with its second quarter results that adopted a new accounting standard that took effect Jan 1.

The new accounting rule means CapitaLand's earnings from overseas development projects can only be recognized upon full completion, resulting in earnings that are more volatile and lumpy.

The property developer's revenue in April-June was S$740.4 million, 25 percent higher than a year ago, as stronger sales from projects in Singapore and China as well as higher fee-based income helped offset lower revenue from development projects in Australia.

"While global economic growth remains patchy and despite concerns about Europe's debt crisis and the U.S. budget deficit, Asia continues to present growth prospects," said CapitaLand Chairman Richard Hu in a statement.

CapitaLand made about S$5 billion worth of investments mainly in Singapore, China, Australia and Vietnam in the first half of the year, the statement said.

At 0529 GMT, shares of CapitaLand were 0.36 percent higher at S$2.81, outperforming the STI's 0.48 percent decline.

EVN pledges sufficient power supply in August

The Electricity of Vietnam Group (EVN) has pledged to supply sufficient energy for the country during this month by running its hydropower plants at full capacity, said the official website of Vietnamese government.

It is expected to run the 3rd and the 2nd generator of Son La and An Khe hydropower plants with respective capacity of 400 MW and 80 MW, and finalize the 220kV substations in northern Son La province and in southern Ho Chi Minh City in this month.

The full loads of the national electricity network in August is forecast to reach 314.9 million kWh a day, while the maximum capacity will be ranging from 15,800-16,000 MW.

According to the group, in July, the electricity system continued to run stably and meet the electricity demand for the household and industry sectors.

The total electricity output in the first seven months of this year reached 62.017 billion kWh, rising 9.34 percent from the same period last year.

Commercial electricity in Jan-July was estimated to reach 53.586 billion kWh, up 12.31 percent year on year, of which local commercial electricity was up 12.06 percent.

The total electricity supply for industry and construction increased 15.34 percent, trade-services up 9.98 percent and management and consumer up 7.94 percent on year.

In July, EVN started operations of six new power generators with a total capacity of 1,085 MW. Also in July, 22 electricity transmission lines of 220-500 kV joined the national grid.

As planned, in the last months of this year, EVN will continued to put into operations 7 new power generators to supply over 1,000 MW to the national grid.

Among them, the 400 MW power generator No 4 of Son La hydropower plant will be operational in December 2011.

Banks lower lending rates for some borrowers

Some banks have decided to slightly lower Vietnam dong lending rates for certain industries, mostly cash earners and exporters, newswire Vnexpress reported.

Housing Development Bank has launched a preferential program for borrowers operating in support industries, offering loans at 1-4 percent per annum lower than normal rates.

Asia Commercial Bank (ACB) has unveiled a similar program for household borrowers for production purposes under which loans of VND300-500 million and above will be charged 1.2 percent lower than the normal rate.

"The program principally aims at selective interest rate lowering after maintaining for long sky-high rates many enterprises could not afford," Nguyen Thanh Toai, ACB's deputy general director, said.

"This is our first decrease in lending rates and individuals and households are the first group to benefit. We will wait for the market response for further expansion. The very high rates which were maintained to curb inflation appear to be on the decline."

Currently ACB charges loans of less than a year 20 percent, and this could reduce to 18-19 percent for feasible projects and prime clients.

The chairman of a state-owned bank said the difficulties in lending at current rates have prompted his bank to consider the possibility of a slight cut. The bank’s rates currently hover at 18-19 percent.

But he clarified there would be no sudden sharp decline since banks' dong liquidity has been beefed up by short-term deposits.

"Maintaining strong liquidity and simultaneously expanding long-term credit would be difficult.”
Most recent lending has been for terms ranging from a few weeks to two months.

“Thus, a significant fall in lending rates is unlikely in the months," he explained.

Nguyen Duc Huong, vice chairman of Lien Viet Post Bank, expressed fears of a recurrence of the late-2008 scenario when there was hardly any lending despite banks sitting on abundant deposits mobilized at high interest rates and businesses’ desperate need for funds.

He suggested revising the credit growth ceiling by setting separate rates for individual banks and clients. The 20 percent rate could apply for the overall banking sector but vary between banks, he said.

Vietnam’s export turnover a record high  

Export turnover of agro, aqua and forest products in the first seven months of the year grew 33.4 percent, resulting in a trade surplus of nearly US$5 billion.  

The Ministry of Agriculture and Rural Development said that though volumes of these commodities only rose marginally the high price increase resulted in increase in export turnovers.

Export value of the above commodities touched nearly $14 billion in the first seven months. In July alone, export turnover reached $2 billion.

Agro products rose approximately 44.6 percent in value, aqua products by 25 percent and forest produce by 13 percent.

According to the Vietnam Food Association, rice exports peaked at 4.7 million tons to touch $2.3 billion, a surge of 9.7 percent in volume and 10.8 percent in price during the same period last year. The price increase of rice is still lower than of coffee, rubber, pepper and cashew nuts.

Coffee showed about 93 percent increase in export value, while pepper and rubber rose by 72 percent and 69 percent respectively, since the same period last year.

Cashew nuts had a total export volume of 84,000 tons worth $656 million. Though the volume reduced by 16.5 percent, the turnover soared by 21 percent.

The Vietnam Cashew Association forecasts that the price of cashew nuts might further rise by $1,000 per ton by year-end to stand at $8,500 a ton, as the demand is high in foreign markets.

Export turnover of forest and wood products grew by 13 percent to reach $2.2 billion within the first seven months.

In related news, the Ministry of Industry and Trade says Vietnam exports in July continued to rise to reach $8.4 billion, rising by 38.5 percent compared to last year.

The first seven months of the year saw the export turnover reach $51.46 billion. Agro, aqua and forest products increased approximately 39 percent, accounting for 22 percent of the total export turnover.

Fuel and minerals went up by 37.6 percent to bring the turnover to $6.34 billion.

Export of processed food is estimated to reach $26 billion, an increase of 23 percent. It is expected that the processing industry will contribute $45 billion to the total export turnover this year.

The ministry also says that exports to main markets of the world have grown much more since last year.  Amongst these, exports to China jumped by 58 percent, the US 20 percent, EU countries 47 percent, Japan 23 percent and ASEAN countries 19 percent.

The ministry is optimistic with this pace and momentum, presuming the export turnover this year may hit $85 billion, far exceeding last year’s record of $72.2 billion.
 
Price subsidies help increase dairy profits  

Two Vietnamese dairy companies, Vinamilk and Nutifood have reported an increase in their turnover by 30 percent during the last two months, under the Government price subsidized program.  
 
Nguyen Dang Thao, director of Co-op Mart supermarket on Cong Quynh Street in District 1 stated that the two companies showed marginally high profits whilst foreign brands showed no increase.

Thao stated this at a meeting with Nguyen Thi Hong, Deputy Chairwoman of HCMC People’s Committee, who paid an unscheduled visit to check on Vinamilk and Nutifood stores in the city yesterday.

Hong believed that the price subsidies on dairy products have helped in strengthening the brands and also lowering prices of foreign milk products.

Nonetheless, Hong wants domestic companies to display and advertise their products more attractively so as to lure more customers. She also wants more products to be subsidized under the government program so as to provide a wider choice to customers.

Tran Huu Duc, a sales director at Nutifood, said his company proposes to add two additional milk products, weight-gain milk and Mum-Nuti IQ for pregnant women under the governments price subsidized program. The company plans to also expand with more stores in addition to the existing 244 outlets in the city.
 
Northern mountainous province offers more tourism potential  

The tourism program entitled, “Crossing Tay Bac-Son La 2011” was presented by the northern mountainous province of Son La yesterday in Hanoi, to be held from August 27 to September 2.  

Son La Province lies 300 kilometers from Hanoi in the northwestern region of the country and is surrounded by imposing mountains.

The province has a population comprising of around 12 ethnic groups, such as the Ma, H’mong, Dao, Muong, Kinh, Khmer, Tay and Thai.

The “Crossing Tay Bac -Son La 2011” tourism program aims to promote the tourism potential of Son La and its neighboring provinces such as Hoa Binh, Dien Bien, Lai Chau and Moc Chau.

The event will include a series of cultural activities like trade and tourism expos, food fair, seminar on the traffic system in the Tay Bac region, photo exhibition of the mountainous Northern provinces, a film week and folk sports and games.

Shrimp exports surge sharply

Vietnam earned around US$500 million from seafood exports in July, bringing the total export value over the past 7 months to US$3.1 billion, up 24.8 percent from the same period last year.

Among key seafood export products, shrimp has achieved the highest growth. The country has exported more than 115,000 tonnes of shrimp, earning more than US$1.1 billion so far.

The price of unprocessed shrimp has increased by VND 60,000-70,000 per kilo. Despite the sharp increase, most processing factories in the Mekong Delta region are currently short of materials, allowing them to only operate at 40-50 percent of their capacity.

Many businesses rushed to purchase unprocessed shrimp, causing a huge surge in the product’s price.

VND929,700 bil allocated for national electricity development plan

A press conference was held in Hanoi on August 3 to announce the Prime Minister’s decision on the National Electricity Development Plan in the 2011-2020 period with consideration for 2030.

Accordingly, the electricity sector will increase the capacity of power supply in the north, central and southern regions to meet domestic consumer demands.

In the next ten years, the sector will reduce  electricity –GDP elasticity from 2.0 down to 1.5 by 2015 and 1.0 by 2020. The sector will also speed up the electrification programme in rural areas to ensure that almost all households in rural areas will have access to power by 2020.

The plan will give priority to developing power sources from renewable energy and bring the total capacity for power supply to around 1,160 MW by 2020.

To fulfill the set targets, total investment capital for the whole electricity sector is expected to reach VND929,700 billion by 2020. In the 2011-2020 period, investment in power sources will amount to VND619,300 billion, or 66.6 percent of total investment capital.

Ministry urges State to watch commercial agents

The activities of commercial agents have greatly expanded without any State controls, creating price fluctuations and damage to consumers.

"Commercial agents play a very important role in providing services and businesses for the market, but State management hasn't caught up with this development," said Truong Quang Hoai Nam, director of the Ministry of Industry and Trade's Domestic Market Department.

Speaking at a seminar on policy recommendations for State management of commercial agents, Nam said there is an urgent need to update laws, consider what foreign investors affect commercial agents and study international experiences.

The seminar is part of the Multilateral Trade Assistance Project (MUTRAP) Phase 3, organised and operated by the EU.
Only some fields, such as petrol, liquefied petroleum gas, food and tobacco, have been regulated.

Most commercial agents are small and medium-sized enterprises. They are plagued with unplanned development, supply shortages, rising transportation costs, disorganised operations without State provisions, and poor quality control of goods.

In addition, there is no legal framework that outlines penalties for violations.

"It is time for the Government to clarify what general agents are, that is, agents at Levels 1, 2 and 3 and issues of transfer, ownership as well as joint responsibility," Hoang Dinh Cuong, senior expert at the domestic market department, said.

"A commercial agent under EU law is self-employed and acts as an intermediary between parties. The agent may negotiate and conclude contracts on behalf of the principal in relation to those goods," said John J Downes, an expert with MUTRAP.

He said the legal issues regarding commercial agents included terminology, form of agency agreements, and appointment of commercial agents, terms of the agency agreements, implied agency, geographical representation and group representation.

"The legal issues also comprise termination, suspension and exclusive agency agreements, along with notification, assignation of the agency to another commercial agent and assignation by the principal," he added.

Other legal issues include product warranty, product liability, liability in torts, confidentiality obligations, intellectual property, choice of jurisdiction and service of notices.

Cashew nut processing companies in need of help

Around 300,000 tonnes of cashew nuts have been purchased, with an additional 121,000 tonnes imported by Vietnamese cashew processing companies this year, due to a shortfall in production, said the Vietnam Cashew Association (Vinacas).

Vinacas also asked the State Bank Governor to provide them with VND12 trillion in loans with preferential interest rates in order to buy a total of 360,000 tonnes of extra cashew nuts for export.

Vinacas Vice Chairman Nguyen Duc Thanh said that high VND interest rates have increased the input costs for cashew nuts processing, causing great difficulties for domestic companies when competing against foreign businesses.

The Ministry of Finance also issued the circular No.102 to reduce the import tax of cashew nuts from 5 percent to 3 percent starting from August 25.

The new circular will help cashew nut processing companies raise their processing capacity as they will have adequate material for production.

Thai products on display in Ho Chi Minh City

More than 200 Thai businesses are displaying their products at a fair in Ho Chi Minh City.

Businesses showcased food, consumption goods, handicraft products, stationery, chemicals, and vehicle spare parts.

During the fair, from August 4-7, visitors will have the chance to enjoy authentic Thai dishes cooked by chefs from the Thai restaurants in Ho Chi Minh City.

On the occasion, the Thai General Consulate invited Thai dancers to perform together with Vietnamese singers.

The event is held annually in Vietnam with the aim of strengthening friendship and cooperation between the two countries - especially in terms of economics, culture, and social affairs.

The fair also provides an ideal opportunity for businesses from the two countries to sign contracts and establish economic ties.

HCM City aims for 17-percent export growth/year

Ho Chi Minh City aims to achieve an average export growth of 17 percent annually in the 2011-2015 period, earning a total turnover of about US$100 billion, excluding crude oil.

According to Huynh Khanh Tiep, Deputy Director of the municipal Department for Industry and Trade, the city recorded an average export growth of 15.8 percent annually during the past three years.

Last year, HCM City’s export turnover reached US$21 billion, up 55 percent compared to 2007.

The city’s key export items include electric and electronic equipment, precision engineering, and microchips.

Tra fish farmers’ profits to be assured

Farmers raising Tra fish will be assured of a profit margin of at least 5%, as mentioned in a draft decree that will undergo final assessment in a seminar to be held on Wednesday by Vietnam Fisheries Society, or Vinafis.

Nguyen Viet Thang, chairman of Vinafis, told the Daily that the meeting would focus on a proposal to assure a minimum profit of 5% for Tra fish farmers. Representatives of the Directorate of Fisheries and Vietnam Association of Seafood Exporters and Producers (VASEP) would join the meeting.

The draft decree will then be submitted to the Government for approval, he said.

Price fluctuations have made deep cuts into farmers’ profits or even pushed them to losses, discouraging them to continue their farming.

However, Thang said this profit margin of 5% in reality was not attractive enough for farmers as current interest rates at banks were high, at about 18-20%.

The seminar on Wednesday will also scrutinize other important provisions in the draft decree, including the requirement that fish processors must ensure 50% of materials for their own processing compared to 30% in previous regulations.

Other issues to be tabled include farming outside zoning plans.

Thang objected to a clause that requires farming areas to be inside zoning plans announced by provincial authorities. “Any farmers or firms meeting farming conditions must be allowed to raise fish as authorities should not ban people from making profits,” he said.

It was not a good idea when people having capital and farming techniques were not allowed to farm, he added.

If the decree still retains this provision on zoning plans for Tra fish farming, farmers should be spared a couple of years to shift to other types of fisheries. Besides, authorities should offer some supporting policies to farmers during the process, Thang said.
 
Rice price in upward spiral

The local rice price has increased 16% over the past one month, boosted by fresh demand of Indonesia and the rising price of Thai rice, though the Vietnam Food Association (VFA) has aborted a scheme to stockpile one million tons of rice in July.

Nguyen Binh Hien, deputy director of Long An Province-based rice trader Mecofood, told the Daily that the price of rice that is processed into the 5%-broken grade had reached VND8,750 per kilo, or US$426 per ton, while the lower grade of 25% was VND8,500. Those prices represent an increase of some 16% from the previous month, Hien said.

The fresh increases are also attributable to Vietnamese rice traders stepping up paddy purchases in anticipation of a higher Thai rice price.

Puea Thai party, which won the recent election in Thailand, promised more aggressive intervention in the market, saying it would buy paddy directly from farmers at 15,000 baht (US$500) per ton, well above the current market price of 7,000-8,000 baht.

The price offered by Puea Thai could push Thai export prices up to US$850-US$870 a ton, compared to the current US$560 per ton, while Vietnamese rice is quoted at US$520 to US$530 per ton.

“Paddy for making export rice has become more expensive. This will definitely spell trouble for traders who have contracted a low price in the second or third quarter,” Hien said.

The rice price surge has shown little sign of abating, said Huynh Minh Hue, VFA’s secretary general. Rice exporters, he said, are hurriedly purchasing rice for Indonesian and other markets. Indonesia now needs half a million ton for third-quarter delivery.

The Vietnam Southern Food Corporation, or Vinafood 2, recently won a tender for a government-to-government contract for several hundred thousand tons out of the total half a million ton to Indonesia, Hue said but didn’t specify the amount and contract value.

“Buyers are shifting to Vietnam as Thai rice is marking up significantly,” Hue said. “This is a chance for Vietnam rice exporters to expand markets and increase export value.”

According to VFA, Vietnam shipped 4.7 million tons of rice in the first seven months of the year, with total revenue of US$2.3 billion, up 9.7% in volume and 10.8% in value from the same period last year with Indonesia as the biggest buyer, followed by the Philippines that has halved the purchase of Vietnamese rice compared to the same period last year.

Exports to Malaysia and Cuba rose 100% and 137% respectively.
 
Filipino market a great potential

The Philippines has been a traditional importer of Vietnamese rice. Yet this island nation whose population amounts to 96 million may offer other unexpected opportunities as well.

Despite a firm foothold in more demanding markets such as the U.S., Japan and the European Union where its processed foods sell well, Cau Tre Joint Stock Company has taken careful steps in a planned penetration into the Philippine market. In the company’s business strategy, this market is neither so meticulous nor too tight to squeeze into. The problem for Cau Tre is how to secure a thriving and sustainable market in the long run.

Tran Thi Hoa Binh, Cau Tre general director, says she is still somewhat at a loss what to do next—whether striking a deal with distribution channels for the high-end market or targeting the low-end segment. Binh has visited both supermarkets and traditional markets in the Philippines to explore opportunities and do better preparation for her plan.

However, Binh seems to have leaned towards the first option. “I think that we should opt for the high-end segment in the new market and explore it through official distribution channels,” she says. “After we are able to set up a stable share with established brand names, we’ll enter lower market segments.”

In line with what Binh thinks, Cau Tre will not either directly introduce its products to the local market or execute subcontracting jobs placed by Filipino partners. It will instead first strike a deal with a local distribution channel.

The HCM City-based Saigon Agriculture Inc., or SAI in short, has for years exported rice to the Philippines. Therefore, the latest trip to the country made by Pho Nam Phuong, SAI’s vice general director, was to find new opportunities. As a veteran rice exporter via government-to-government contracts, SAI wants to seek new local partners through existing ones to expand its market share.

Phuong says during talks with her Philippine partners, she has realized that the island country has a huge demand for rice. At the same time, SAI also targets importing fertilizers made in the Philippines for consumption in Vietnam and the material sources it has invested in Long An, Dong Thap and An Giang provinces.

The Filipino story of Thanh Phuc Loc Co., a private company headquartered in HCM City, is different to a certain extent. It’s rather strange, but it’s true. Industrial salts produced by Thanh Phuc Loc are being sold in the Philippines; however, Filipino traders have to purchase them in Singapore. Thanh Phuc Loc’s director Nguyen Hong Phuc says one of his “obsessions” during his recent trip to Manila was to find partners so that the company can export products directly to the Philippines.

Binh, Phuong and Phuc all agree that Vietnamese products can have an open door to the Philippine market. However, as Binh has put it, the problem is how to know exactly what the local consumer needs. “That’s the key,” Binh says.

The Philippines is a big importer of Vietnamese rice. Last year, the Philippines imported almost 1.5 million tons of rice from Vietnam. During the first half of this year, however, the country’s rice import from Vietnam dropped to 637,000 tons, a 50% fall year-on-year. Two reasons can be cited for the decline. First, the Philippine Government has gone forward with its effort to feed its population with the country’s own rice. Second, the Philippines has a stockpile of rice imported last year. According to Phan Tuan Khoi, the commercial attaché at the Vietnamese Embassy in Manila, Vietnam’s rice export to the Philippines is likely to decrease this year. “But it will not be lower than 1.2 million tons,” he says.

At the same time, the Philippines’ fertilizer export to Vietnam was more than double during the first two quarters of this year, reaching nearly US$60 million.

Khoi says this 96-million-strong market whose shopping habits and demand are great proves to be a big opportunity for Vietnamese businesses. Vietnamese agricultural products such as coffee, tea and fish sauce have been imported by local trading groups for sale in the Philippines. However, few Vietnamese entrepreneurs have so far made sufficient effort to enter this potential market.

In general, trade and taxation barriers in the Philippines have conformed to international practices and regulations. Khoi says when doing business in the Philippines Vietnamese entrepreneurs should pay attention to local business practices. Conglomerates owned by Filipino traders have established strong relations with partners in mainland China. They import quite a wide range of Chinese products for local consumption.

Vietnamese entrepreneurs who have set up trading relations in the Philippines should further cement these ties through which new partners and other market segments can be accessed. For new Vietnamese entrepreneurs, it is necessary to establish partnership with local distribution networks.

An advantage which can facilitate the introduction of Vietnamese products to the Philippine market may lie with the Vietnamese communities in the country plus a considerable number of Vietnamese students.
 
Phu My lacks capital to repair deteriorating road

Due to the capital shortage, Phu My Company (PMC), developer of Phu My Bridge and the approach roads, has yet to repair the fast-deteriorating road on the side of District 2 full of deep holes now.

Recently, the enterprise has petitioned the municipal government for an advance payment of VND250 billion. The firm explained that the amount would be used to service bank loans and to construct the eastern belt road stretching 5.5 kilometers, including the approach road to Phu My Bridge.

Nguyen Thanh Thai, General Director of PMC, said that difficulty in mobilizing outside funds caused slow-moving progress for the company’s on-going projects.

Early this year, the city government has disbursed VND700 billion out of the sum VND1 trillion sought by PMC so that the developer could pay debts.

Related agencies, including the Departments of Finance, Transport, Planning and Investment, and Hochiminh City Financial Investment Co., (HFIC) are weighing the proposal by PMC for the VND1 trillion advance paymnet.

Transporters are complaining about the deteriorating road though they still have to pay toll fees in full.

Thai Van Chung, general secretary of the HCMC Transportation Association, suggested halting toll collection until the road is upgraded.
 
Problems over land-use cost to be settled

The anxiety over land-use fee for property projects will be relieved on August 15 when Circular 93 issued by the Ministry of Finance takes effect.

The Circular, guiding the implementation of the Government’s Decree 120 on collecting land-use fee, specifies that project owners allocated land by the State will be allowed to deduct their costs from the total payable land use fee. The costs will include those spent on site clearance and compensation for affected people as well as financial assistance for those affected people to settle down, but such costs must have been approved beforehand by the competent State agency.

The maximum deducted sum will be equal to the land-use fee payable as per regulation.

As for investors who take over the land-use rights from organizations or individuals or negotiate for site clearance compensation by themselves without the methods approved by the competent State agency, their costs will not be deducted.

Even though the new Circular is hopeful for investors, some concerns still linger. For example, it is still unknown if State agencies accept the real costs that investors spent on compensation and site clearance to deduct the land-use fee or will they just accept the State price level announced locally.

Doosan completes first section of largest desalination project

Doosan Heavy Industries Vietnam (Doosan Vina) on Wednesday announced that it had completed and set in place for final assembly of the first section of the world’s largest-ever desalination evaporator.

The entire project involves three desalination evaporators, and each will be nearly the size of a football pitch when completed. The three are a part of the order for eight Evaporators for the Ras Az Zawr project in Saudi Arabia signed by Doosan last year.

The evaporators will be shipped from the company’s factory in Dung Quat Economic Zone in the central province of Quang Ngai and the other five will be fabricated at the company’s Korean facility.

Once completed and installed the eight desalination units will be capable of converting sea water into 728 million liters of fresh water per day, enough to meet the daily fresh water needs of two million people.

Each evaporator will weigh almost 4,000 tons and measures 10.6 meters high, 29.2 meters wide and 100.4 meters long, according to the statement.

Doosan Vina’s first Made-in-Vietnam Desalination Evaporator is now busy providing 91 million liters of clean water for a quarter million people in the United Arab Emirates (UAE).

Doosan Vina is a US$300 million investment in Dung Quat Economic Zone. The five business units of Doosan Vina in the zone are boiler, material handling equipment, heat recovery steam generator, desalination and chemical processing equipment.

The factories manufacture major infrastructure equipments for the power, water, logistics, and chemical industries worldwide.

The parent company, Doosan Heavy Industries of Korea, is a global enterprise operating in 33 countries with over 35,000 employees.
 
Honda Vietnam raises motorcycle prices

Many authorized distributors of Honda Vietnam Co. on Monday unexpectedly increased prices of gear-box motorcycles by up to VND3 million per unit despite gloomy sales over the past several weeks.

Most of motorcycles of the manual gear-box type had the list prices increase by between VND600,000 a and VND3 million a unit, although many authorized dealers offer discounts for customers by between VND500,000 to VND1 million.

For instance, a spoke-wheeled Wave RSX AT and a cast-wheeled RSX AT saw an increase of VND3 million in their list prices to VND25.59 million and VND30.59 million a unit respectively.

Wave Alpha as the cheapest among Honda Vietnam’s products now costs almost VND15 million, or VND800,000 higher than the previous price.

The Wave 110 RSX series also witnessed a VND1.3 million increase in price.

The increasing retail prices of motorcycles are attributed to the depreciation of Vietnam dong as some components must be imported for local assembly.

Song Lam move closer to V-League title, Hoang Anh escape from relegation area.
 
KFV manages Costa Nha Trang Residences

The property consultant firm Knight Frank Vietnam said on Tuesday it had been appointed as the exclusive property management agent for the five-star luxury residential development The Costa Nha Trang Residences in Khanh Hoa Province.

With a total of 244 luxury apartments, the 29-story property is located in the heart of the provincial capital city of Nha Trang at the oceanfront Tran Phu Street. Project’s facilities include a luxury spa, a fitness center, a swimming pool, a kids club and restaurants.

“Nha Trang is the new booming destination in the residential sector. We are very pleased to manage this prestigious project with its outstanding quality design and excited working together with TD Corporation,” said Holger Molendyk, head of property and asset management of Knight Frank.

Through this engagement, Knight Frank will provide property management services including building maintenance, owner and tenant support services, purchasing and supplier management and leasing management.

The Costa Nha Trang, invested by TD Corporation, at US$147 million, will include 308 hotel rooms, 244 luxury apartments, and other 5-star facilities. It will be in place next year, with the hotel to be managed by InterContinental Hotels Group.
 
Hoan My gets nod to set up medical school

The Government on Tuesday gave the go-ahead for Hoan My Medical Group to establish a private medical school in Vietnam, which will be the first private medical university in the country.

Hoan My Medical University, as the school is to be named, is expected to enroll students for its program in the fall of 2012 with the initial number of 100. The school will collaborate with some American medical schools in running 4-year curriculums.

Hoan My group, which currently operates several clinics of the same name, said the school will help students to do internships in American hospitals as well as support them to attend boarding-school programs or specialty-training programs stateside in the future.

The group said the school will cooperate with the Illinois medical school in Chicago, the Kansas medical school, and another medical school named Turfs, all in the United States.

To be enrolled in Hoan My Medical University, candidates must have obtained a bachelor’s degree in biology or equivalent. Besides, they must be fluent in English.

Hoan My group is preparing to kick off construction of the hospital-school complex on an area of six hectares in North-West Cu Chi urban area. It is calculated that the complex would be completed within five years.

While pending construction of the campus, students will study at the medical center of the group in downtown HCMC and practice in Saigon Hoan My Clinic at 60 Phan Xich Long Street in Phu Nhuan District. This hospital is to be inaugurated in the end of 2011.

Hoan My Group has not announced its investment capital in the hospital-school complex, but said the capital requirement for a hospital-model laboratory system, e-library and other auxiliary facilities alone will amount to some VND100 billion.

The group now operates two general hospitals, two medical clinic and a soon-opening hospital in HCMC alongside three hospitals in Can Tho, Ca Mau and Dalat.