SCIC to divest 281 firms

The State Capital Investment Corp (SCIC) is looking to divest 281 enterprises and to sell the entire State stake in 170 local enterprises, corporation general director Lai Van Dao told a year-end meeting.

Dao said the corporation, the representative of state-owned capital in state-owned enterprises, would diversify financial and project investments, making those in major sectors a priority.

The corporation has 538 enterprises in its portfolio.

"The selling of state-owned capital would be one of the major priorities of the Government as state-owned capital in state-owned enterprises is reduced in industries that do not need a great deal of State control," the Government's Enterprise Reform and Development Vice Chairman Pham Viet Muon told reporters.

The SCIC sells state-owned capital by public auction, with securities companies acting as consultants and trading agencies.

Last year, SCIC divested 106 companies, including the entire state-owned stake in 97 local firms for VND642 billion (US$29.86 million), more than twice their book value. SCIC gained a total revenue of VND2.75 trillion ($127.91 million), including a pre-tax profit of VND2.44 trillion ($113.49 million).

Since it was established in 2005 to December 31 last year, SCIC has overseen a State stake in 932 enterprises, divested 442 enterprises and sold the entire State stake in 399 firms for VND2.21 trillion ($102.79 million) compared to the book value of VND984 billion ($45.77 million).

Deposit interest rates to decline

Deposit interest rates in both Vietnamese and foreign currencies are expected to be cut this month, according to the Viet Nam Association of Finance Investors (VAFI).

Because the domestic banking sector is currently finding it easier to mobilise capital, particularly foreign currencies, the State Bank of Viet Nam (SBV) should adjust deposit interest rates, the association said.

The organisation proposed cutting interest rates to 3 or 3.5 per cent per annum for foreign-currency deposits.

VAFI general secretary Nguyen Hoang Hai said that a drop in the interest rate of foreign-currency deposits would quickly lower the interest rates on Vietnamese deposits. In addition, it would also narrow the gap between the exchange rate of the Vietnamese dong and US dollars between the official and black markets.

Hai said the SBV should reconsider the current policy of providing foreign-currency loans for enterprises to buy materials to produce export goods.

Since the second quarter of 2010, the central bank has allowed enterprises involved in export production to borrow US dollars and use them as working capital.

Explaining the policy change, the central bank said that many commercial banks had not disbursed all of their foreign-currency deposits, and the market had experienced a shortage of US dollars.

If export enterprises were given foreign-currency loans, they would have more opportunities to increase their production and export activities, earning more dollars to pay debts, the central bank said.

As a result, many export enterprises had borrowed foreign currency, thus increasing the volume of the banks' foreign-currency credits significantly, Hai said.

To generate more US dollars to meet this demand, many banks had to raise foreign-currency deposit interest rates, he added.

New power plants to generate 2,198 MW

The state-run Electricity of Vietnam has said its new hydropower and thermal plants will generate 2,198 MW this year.

They include the Son La Hydroelectric Plant, the second turbine group at the Song Tranh 2 and Dong Nai 3 hydroelectric plants, the An Khe-Kanak Hydroelectric Plant, Dong Nai 4 Hydroelectric Plant, and Uong Bi 2 Thermal Plant.

EVN will begin construction of five other plants with a total capacity of 3,830 MW this year.

In other plans, the group will begin supplying electricity to remote ethnic minority hamlets in Central Highlands provinces, ethnic Khmer communities in the southern provinces of Bac Lieu, Soc Trang, and Tra Vinh, and poor households in the two northern provinces of Dien Bien and Lai Chau.

The Phu Quoc Island off the southern coast will soon be linked to the national grid by a 110-KV undersea cable system.

EVN will speed up other transmission projects in the Central Highlands and southern regions to ensure stable power supply after 2012.

This year it plans to invest more than VND65 billion (US$3 billion) in its projects, an increase of 12.4 percent over last year.

EVN is the sole distributor of power in Vietnam while there are several private producers.

Gold mining to start in border province

The government has entrusted local authorities with the task of issuing licenses to mine for gold in Vinh Xuan District in the northern border province of Ha Giang.

Province authorities have been told to choose businesses with capacity and experience in exploiting and effectively using natural resources while also safeguarding the environment, social order, and security.

They will also work closely with the Ministry of Natural Resources and Environment to evaluate eight other potential gold mines in the districts of Bac Quang, Quang Binh, and Meo Vac before granting mining licenses.

The Vinh Xuan mine occupies an area of 19.57 hectares.

Infrastructure boosts Can Tho real estate

The real estate market in Can Tho City is flourishing with price increases of between 10 and 15 per cent over last year, according to a report by Savills Viet Nam Ltd.

Savills, a 100 per cent foreign-owned company and the largest real estate consulting firm in Viet Nam, said the average price of land in Can Tho was about US$311 per square metre, up 10 per cent compared with last April.

Unfinished houses were priced at $515 per square meter, 15 per cent higher. Significantly, many recently launched housing projects sold out their products very soon, the report said.

Independent market observers have concurred with the report. They said that after being sluggish for a long time, the Can Tho real estate market had recovered strongly with an increasing number of successful transactions.

The Can Tho Housing Development and Trading Company, for instance, sold 300 house foundations within three days of offering them. This had never happened before, they said.

Construction and Investment Joint Stock Company No 8 also sold 500 houses recently under its Hung Phu project for the Petrol Vietnam Finance Company.

The number of people looking for opportunities to buy houses in the Hong Loan Property Company's My Hung Urban Area and the My An Residential Project has also increased significantly early this year.

A representative of the Mekong Real Estate Company (Mekongland) said the number of real estate transactions as well as prices in Can Tho City early this year were about 15 per cent higher than figures recorded in late 2010.

Properties in the Hung Phu urban area were the most sought after, he said.

Analysts attribute the Can Tho real estate market's recovery to the recent development of infrastructure in the city and surrounding areas that vastly improves access to and connectivity with the city.

A series of infrastructure development projects have already been completed, or are being implemented, including the Can Tho Bridge, the Tra Noc International Airport, the Dinh An Port and the Can Tho City-Chau Doc-Phnom Penh Express Way.

Many property investors from Ha Noi, HCM City and neighbouring provinces are looking for opportunities in Can Tho, giving the local market a boost.

Truong An Duong, head of Savills Viet Nam's Market Research department, said Can Tho had many favourable conditions to develop its housing industry.

It had a large land fund that was also more easily amenable to planning new residential areas, Duong said.

He noted the city had nine projects that were selling unfinished houses and 10 others selling 11,000 land lots and 4,500 finished houses.

These numbers were still too small compared with the 1.2 million strong population of the Mekong Delta city, the Savills Vietnam report said.

The Nguoi Lao Dong(Labourer) newspaper has said city administration will replan the city to ensure it would have more than 40,000 hectares for housing development by 2030.

The paper also reported that an additional 25 housing projects covering a combined area of 1,000 hectares will be introduced to the market this year.

Can Tho City is inviting foreign and domestic enterprises to invest in projects like the construction of industrial parks, office buildings, apartment buildings and tourism properties, said Tran Thanh Man, chairman of the Can Tho People's Committee.

Vinh Phuc targets $300m in FDI

The northern province of Vinh Phuc aims to attract US$370 million in investment by 2015, the provincial People's Committee has reported.

Of the total, $300 million was expected to come in 25 foreign-invested projects with the remainder from 50 domestic investors.

Last year, the province continued to see strong investment, especially the foreign investment, the committee reported.

In addition to VND6.74 trillion ($345.6 million) of domestic investment, the province attracted 15 foreign-invested projects worth $250 million, bringing the number of foreign-invested projects to 121 with a combined registered capital of $2.32 billion.

Last year, the foreign-invested sector accounted for 88 per cent ($403 million) of the provincial total export revenue and created 30,000 jobs.

Committee chairman Phung Quang Hung attributed the "encouraging" result to administrative procedure reforms, improved infrastructure and higher quality personnel.

"The socio-economic achievements in recent years have also made Vinh Phuc an attractive location for investors here and globally," Hung said.

The province was one of the country's top localities for economic growth in the past five years, recording an annual rate of 18 per cent.

It also ranked seventh in industrial production value. Last year, its industrial output rose by 20.4 per cent to reach VND41.46 trillion ($2.12 billion).

To attract investment, Vinh Phuc had focused on developing a series of industrial parks and clusters, Hung said.

Up to 24 industrial parks, covering 6,038ha, had been approved by the Prime Minister. Four had been completed and three were under development.

Head of Industrial Zones Management Board Nguyen Cong Loc said Vinh Phuc was giving investors as much encouragement as possible.

Top priority would be given to key industries such as engineering and manufacturing and electronics and environmentally friendly projects to turn Vinh Phuc into an industrialised province by 2020, Loc said.

Diageo buys into local distiller

Diageo, the world's leading distiller, will pay US$51.6 million to acquire the 23.6-per-cent stake in Ha Noi Liquor Joint Stock Co (Halico) currently held by VinaCapital's Viet Nam Opportunity Fund.

The deal, to be completed by the end of June, would boost Daigeo's presence in Viet Nam's growing drinks market, the company said.

"Halico's strong distribution and recent investment into their state-of-the-art production facility speak of their ambitions in this market," said Gilbert Ghostine, head of Diageo's Asia-Pacific division.

"Halico has seen double-digit growth for the past four years, but we are very keen to accelerate our development as Viet Nam continues to offer attrative growth potential," said Halico director Ho Van Hai.

The two companies have also agreed to form a strategic partnership, under which Diageo would assist Halico in enhancing its capacities in innovation, branding and logistics.

However, Diageo would also continue to develop its spirits porfolio in Viet Nam with such brands as Johnnie Walker, Smirnoff and Baileys distributed through its wholly-owned subsidiary, Diageo Viet Nam Ltd.

"Diageo is a great partner for us – they have experience working with large local industry players and have a reputation for building iconic brands," Hai said.

Halico was the top domestic producer of branded spirits, with Vodka Ha Noi its leading trademark, and Diaego's understanding of Asian consumers and culture and their commitment to the region would help lift Halico to greater heights, he added.

The company was looking towards Viet Nam's trade negotiations with the EU, which could result in stronger exports of scotch whisky to that market, Hai said.

Ha Noi sets sights high for e-customs

The Ha Noi Customs Department wants 70 per cent of imported goods to be cleared online by the end of the year.

Furthermore, Nguyen Van Truong, director of department, said the city was aiming to have 80 per cent of exported goods to be cleared electronically by 2012.

To meet the target, the department planned to upgrade its computer network, Truong said.

The municipal customs department is in charge of managing import and export activities in Ha Noi and nearby provinces of Vinh Phuc, Phu Tho, Hoa Binh and Yen Bai, which are home to major foreign-invested industrial parks and hi-tech zones.

"The department is planning to set up a customs office in the Hoa Lac high-tech park to create more favourable conditions for investors when it comes to customs procedures," Truong said.

A pilot e-customs clearance programme was launched in the country in 2005 and has been expanded to 13 provinces and cities.

Bao Minh pioneers coffee-grower insurance

Bao Minh Insurance Joint Stock Corporation has started to trial agricultural insurance by insuring coffee farmers in Central Highland Dak Lak Province, according to a company official.

If the trial is successful the insurer will expand its agricultural insurance services to all rice and coffee farmers.

The insurers Index-based Agricultural Business Interruption Insurance Policy is a preparation for the implementation of the Government's upcoming programme on farming insurance for an experimental period between 2011-13, Bao Minh's Deputy General Director Pham Xuan Phong said.

Under the company's trial policy, Dak Lak coffee farmers would be insured for losses and extra costs (business interruption loss) caused by low levels of rainfall in the insured period.

Losses and costs incurred from low levels of rainfall would be calculated against the Cumulative Rainfall Index as measured at the designated rainfall gauging station and published by Central Highlands Regional Hydro-Meteorological Centre of Viet Nam, the insurer said.

Bao Minh has co-ordinated with the province's Agricultural Promotion Centre to finalise policies with a number of farmers, Phong said.

As around 70 per cent of Viet Nam's population lives in rural areas, last year the Ministry of Finance publicised the draft of the Prime Minister's decree on farming insurance as a new step to support agricultural production.

Under the draft decree, poor farming households would receive a subsidy of up to 100 per cent of the insurance premium. The support to other farming households would be 60 per cent. Agricultural production organisations would be supported 50 per cent.

According to the draft, there are three main categories of coverage, including cultivated crop (rice), domestic animals (buffalo, cows, pigs and poultry) and aquaculture (tra and basa fish, black tiger shrimp and white-leg shrimp).

The insurance sector's earnings from agriculture insurance is insignificant compared to the total non-life insurance figure, according to Phung Dac Loc, Secretary General of the Viet Nam Insurance Association. The agricultural premium turnover in 2009 was VND1.7 billion, while total non-life insurance premium turnover was VND13.6 trillion (US$649.7 million).

Agriculture insurance has been slow to develop in Viet Nam because of the small scale of household farming; farmers often can't or won't afford it; and the risks of unexpected natural calamities and epidemic diseases.