VND to be added to Big Mac Index
When the first McDonald’s outlet makes debut in HCMC this Saturday, The Economist, a world’s leading economic news magazine, will certainly keep close watch over the event as it is the publisher of the Big Mac Index.
The Economist publishes the index as an informal way to measure the purchasing power parity (PPP) between two currencies. Therefore, in an article about Big Mac Index updates early this year, the newspaper said it would add Vietnam dong currency to the index next month after McDonald’s inaugurates its first store in the country.
The index is named after a hamburger sold at McDonald’s stores, the Big Mac.
The exchange rate between two different currencies is the value of one currency in terms of the other currency. But the real purchasing power of the two currencies may not reflect this value.
For instance, one U.S. dollar can now be exchanged for VND21,000. A good bread in Vietnam may cost VND21,000 but the price of a similar one in the U.S. is around US$5. Therefore, the concept of purchasing power parity came into existence.
PPP enables people to estimate what the exchange rate between two currencies would have to be so that a sample basket of goods and services should cost the same in both currencies.
In the Big Mac Index, The Economist makes things simple by replacing the basket in question with a single Big Mac burger. By collecting data about Big Mac prices in different countries, the newspaper can calculate the Big Mac Index of each country in order to indicate the currency of that country is overvalued or undervalued. For example, a Big Mac in Norway costs US$7.8 equivalent but only US$4.62 in the U.S., so the magazine can conclude the Norwegian krone is 70% overvalued.
Capital and currency markets worldwide have been hit by a gradual winding down of quantitative easing (QE) which is designed to keep interest rates at historic lows to stimulate investment and consumption.
The Fed announcement that it would reduce bond buying by US$10 billion to US$65 billion a month immediately sent a lot of currencies into a tailspin.
The Big Mac Index allows The Economist to estimate what currency would have to strongly adjust in the coming time.
Certainly, no countries would use this index to adjust their exchange rates as there always exists a difference in the purchasing power of different currencies. For example, having a haircut in Vietnam always costs far less than in America. However, high inflation in the past few years but little change in the exchange rate have caused the purchasing power parity between the dong and the dollar to decline.
The Big Mac Index, anyway, can help Vietnam estimate the purchasing power of the dong.
Is Big Mac in town cheap or expensive?
As the opening in HCMC Saturday of the first McDonald’s store in Vietnam has been hyped by the local media, many news outlets have been trying to compare prices of the U.S. fast-food giant’s products here and elsewhere in the world in reference to the Big Mac Index published by The Economist.
For a particular dish, some papers said its price is higher than in other countries but others emphasized it is lower. There is nothing unusual about this because they made comparisons based on different base prices.
Humuch?, a web site at www.humuch.com that compares goods prices worldwide, uses a single unit for price comparison, which is a Big Mac meal comprising a Big Mac burger, a medium French Fries and a medium drink. McDonald’s Da Kao outlet in HCMC charges this meal VND85,000 as shown in the menu and reported by the local media. With the current exchange rate, it is equivalent to US$4.
A similar Big Mac meal costs the most in Norway, US$13.13 at July 2013 price, and the least in South Africa, US$2.66 at October 2012 price. For the Asian region, the price is US$3.45 in Malaysia, US$3.29 in the Philippines, and in the region of US$6-7 in America depending on cities.
The Big Mac which The Economist uses for price comparison sells for VND60,000 in Vietnam, or US$2.84, while it costs US$2.74 in China, US$2.3 in Indonesia, US$3.6 in Singapore, US$2.98 in the Philippines, US$2.92 in Thailand, US$2.32 in Hong Kong and US$2.23 in Malaysia.
Therefore, the price of the Big Mac in Vietnam is higher than that in China, Malaysia, Hong Kong and Indonesia, and almost equivalent to that in Thailand and the Philippines. This is quite normal as almost all ingredients for making a Big Mac in Vietnam are imported, such as beef from Australia, white fillets of fish caught in the Atlantic and Pacific oceans, potatoes from America, and bread reportedly from Malaysia. Only veggies and tomatoes come from local suppliers in Dalat.
The Economist is able to produce the Big Mac Index since a McDonold’s burger reflects material cost, labor cost, and location rental in countries where it is present, but it does not in Vietnam, except for employee wages and location rental, so it might be hard to turn out an exact Big Mac Index for Vietnam dong.
Now the question is whether McDonald’s would increase purchases of domestic materials in the coming time or remain reliant on imports. Nguyen Huy Thinh, managing director of McDonald’s Vietnam, said the company would gradually scale up the proportion of local materials in its products to cut cost.
However, if domestic consumer prices inched up around 10% this year, the cost of local materials would rise correspondingly. But if import prices remained unchanged, McDonald’s would see no incentive for using local ingredients. Then a possible strategy the fast food firm might take is to keep its prices unchanged to gain an edge over rivals using local materials for their bread at higher cost.
This exactly points out the problem with the country’s exchange rate policy, of which The Economist has no mention in calculating the Big Mac Index in Vietnam.
New Lotte Mart to go up in Vung Tau
Lotte Vietnam has got approval to set up a new Lotte Mart shopping mall in the southern coastal city of Vung Tau, where two other store chains – Co.opMart and Metro Cash & Carry – have established a market presence.
Ba Ria-Vung Tau Province has handed over an investment certificate to Lotte Vietnam to implement the Lotte Mart Vung Tau project worth more than VND721 billion. The development will cover over 10,000 square meters at the intersection of Ba Thang Hai and Thi Sach streets in Ward 8.
Like other projects in HCMC and elsewhere in the country, the Vung Tau project will comprise a supermarket, a goods processing and retail section, restaurants, and entertainment facilities like children’s playground, billiards and bowling areas, gaming section, fitness center, and cinema.
The company is expected to begin work on the project in the first quarter this year and put it into operation next year.
An authority of the province said Big C, another major retailer, was also exploring the possibility of entering the province’s retail market.
Saigon Co.op, the owner of the Co.opMart store chain, recently opened a second store costing over VND80 billion and covering 6,000 square meters in Vung Tau, taking to three the number of its stores in the province. The other is located in Ba Ria City, around 20 km from Vung Tau.
Vung Tau has emerged as an important market for retailers. Thinh Vuong has inaugurated Lam Son Square commercial center in the heart of Vung Tau City. Nguyen Kiem and Cho Lon electronics retailers, Thegioididong.com, Dienmay.com, FPT Shop and Viettel Store all have stores in the province, particularly in Vung Tau.
The population of Ba Ria-Vung Tau is around one million, less than that of neighboring provinces like Dong Nai and Binh Duong. However, retailers have said they are investing in the province’s future as current demand there is not high.
Da Nang revokes licenses of mineral companies
The People’s Committee in the central city of Da Nang revoked business licenses from 13 mineral companies for stealing hill and farming soil.
Those companies have been asked to remove workers and property from mines excluding facilities for safety and environment protection. The mines were closed immediately to restore the environment.
The city also tasked Hoa Vang District authorities to supervise the mines and prevent any organization or individual from illegally exploiting minerals there.
This event occurred as a response to an article from Saigon Giai Phong Newspaper about companies stealing soil from hills and rice fields for sale in Da Nang City and the neighboring province of Quang Nam.
Private sector needs greater leeway to pull economy out of woes
Vietnam could only get out of protracted stagnation to return to its high growth path if it was to adopt a host of drastic reforms designed to narrow down the role of the state economic sector and at the same time give the private sector greater leeway to do business.
This is what the World Bank and leading economists suggested when reached by the Daily.
Victoria Kwakwa, country director of the World Bank (WB) for Vietnam, said the country’s current economic growth is around 5% and this is not at all bad. Many African economies have made great strides but achieved 5-6% growth, she said, but considering Vietnam’s potential and economic development history, such a growth rate is low, so the nation should do more to improve that.
The efficiency of the economy is particularly of great importance to regaining high growth but the state economic sector is still mired in serious troubles, she noted.
According to the WB, Vietnam equitized 117 state enterprises in 2008-2011, 13 in 2012 and 43 in 2013. This is a very slow state sector restructuring process.
Kwakwa said that with such an equitization process, the country would not be able to fulfill its commitment to letting 500 state enterprises go public by 2015.
The WB has seen signs of the private sector losing confidence, which is evident in the fall of private sector investments from 15% of GDP in 2007-10 to 11.5% last year.
The global development lender cited a Provincial Competitiveness Index (PCI) report by the Vietnam Chamber of Commerce and Industry as showing that enterprises are scaling down investment activity or maintaining the status quo. In addition, the Purchasing Managers’ Index in much of 2013 was below 50, a clear indication of manufacturing contraction.
Household spending grew a mere 5.1% in 2009-12, well below the average of 8.9% in the previous four years, according to the WB. The country, the WB said, is experiencing the longest period of low growth since it embarked on economic reform policy in the mid-1980s.
But, Kwakwa said, the country still has a window of opportunity to pull itself out of this difficult situation. Despite all those problems, she said with strong belief that the nation would be able to shine as it did in the past.
Sharing the WB’s view, Vietnamese economists said the state economic sector should lower its share in the economy.
Economist Le Xuan Nghia said though there are a few 100% state-owned banks left, they hold 60% banking market share. This percentage should be reduced, he proposed.
Professor Nguyen Mai said all the decisions and other documents relating to state enterprise restructuring, if stacked together, would be one meter high but the restructuring process was extremely slow.
The country saw a boom in the establishment of private enterprises in 2001-07 in the advent of the Enterprise Law, which helped pull the economy out of the financial crisis, he said, adding now private enterprises needed more room to maneuver.
“We have had no policy directing leading private companies towards investment in technology, so they have been struggling to develop,” he said. “In addition, there has been no policy creating opportunities for small and medium enterprises to connect with bigger local firms and those in the foreign direct investment sector. For fresh start-ups, no one cares about them.”
Expert Pham Chi Lan said there had remained a great imbalance in the distribution of resources and benefits and that most resources had been directed towards the state economic sector. “My concern is that if private enterprises want to grow big, they should have connections with those in the state sector; otherwise, they would remain small and medium.”
Thailand’s leading retailer says to open store in Vietnam
Central Group, Thailand’s leading retailer, is scheduled to open a department store in Hanoi next month, marking a fresh attempt to boost its presence in the fast growing Vietnamese retail market.
The Thai firm is well known for its Robinson store brand but it will adopt the brand Robins here in the local market. The Robins Department Store in Hanoi will be the group’s first international branch.
Tos Chirativat, chairman of the executive committee and CEO of Central Group, said in a statement that the new development followed the group’s successful launch of SuperSports, Crocs and New Balance stores in Vietnam through a distribution network of its subsidiaries.
Brand licensing to Vietnamese partners has highlighted the strong spending power of the country’s 90 million population, with more than 60% of people belonging to a workforce with high purchasing power.
“This makes Vietnam a target market with high potential for growth and an excellent destination for investors in the retail sector,” Tos said in the statement.
Robinson Department Store Plc will be overseeing the operation of the forthcoming department store in Vietnam.
Alan Thomson, president of Robinson Department Store Public Company Ltd, said in the statement that the Robins store would occupy 10,000 square meters of retail space on the B1 level of Vincom Mega Mall Royal City, a modern underground shopping mall and entertainment facility in Hanoi.
Robins can boast one of the very best locations available in Hanoi, Thomson said. “The mall promises to serve up a well-rounded range of products for Vietnamese customers of any lifestyle – especially among the younger generation.”
After the first store in Hanoi, the second Robins store will go up in HCMC by the end of this year. The two stores will need an estimated 1,000 staff.
Low demand pushes down goods prices
Traditional wet markets and supermarkets in HCMC resumed operations on Wednesday with prices returning to normal due to low consumption.
Prior to this year’s Lunar New Year holiday, or Tet, goods prices did not increase as much as in previous years and there were some products seeing lower prices as consumers tightened spending.
Prices of vegetables at Tan Thuan and Tan My markets in District 7 have dropped 20-30% compared to those on the first days of the Lunar New Year. However, they are still around 20% higher than on normal days such as lettuce priced at VND35,000-40,000 per kilogram and cucumber at VND20,000.
According to Huong, a vegetable vendor at Tan Thuan market, selling prices at wholesale markets are 15-20% higher than normal.
A similar situation is seen with cattle and poultry meat as their retail prices have declined on low consumption. The respective prices of one kilogram of chicken, grade-one beef, pork rib and pork belly are VND115,000-125,000, VND300,000, VND150,000 and VND100,000.
Even with fruits whose prices were normally pushed up in the holiday due to high demand, the prices have now declined.
However, fish is the only product whose prices remain high, 30-50% higher than on normal days, due to limited supply but high demand. At a small market on Tran Xuan Soan Street in District 7, fish at some stalls were sold out at about 9 a.m.
Fish at most supermarkets and convenience stores are displayed in small volume. A staff member at Satrafoods store on Street 41 in District 4 said the store did not sell much fish as its prices remained high.
These are unlike previous years when food prices stayed 40-70% higher than normal until the tenth day of the lunar calendar.
Vendors attribute the situation to low demand and price competition from supermarkets and convenience stores.
While markets have seen few consumers over the past days, supermarkets and convenience stores are quite busy.
The fact that prices began to return to normal on the sixth day of the lunar calendar is unusual this holiday. During the holiday, prices of most commodities are quite stable with some lower than on normal days.
For instance, after beverage and beer prices were pushed up by VND10,000-20,000 per carton by traders one month before Tet and then stabilized by authorities, the prices have dropped, with a carton of Heineken beer selling for VND352,000-360,000, 333 beer for VND200,000-205,000, Tiger beer for VND293,000-295,000 and Coca-Cola for VND175,000.
Besides, prices of essential food products at markets were stable and did not rise until two days before the holiday.
Meanwhile, supermarkets and convenience store offered discounts on some food products, attracting big numbers of customers. The pork stall at a Co.op Food store on Tran Xuan Soan Street was full of customers in the morning two days before Tet when discounts of VND5,000-10,000 per kilogram were on offer.
More consumers have chosen modern supermarkets before and after Tet. Quyen, a seller of dried food at Tan Chanh Hiep market in District 12, said she had few customers during the holiday. “There were few customers last holiday and even fewer this holiday,” she said.
Thaco’s engine plant project behind schedule
The Chu Lai-Truong Hai engine plant invested by Truong Hai Auto Joint Stock Company (Thaco) will start production later than scheduled for this year.
Located in Chu Lai Open Economic Zone in Quang Nam Province, the investor commenced work on the project in 2012 with total capital of US$185.5 million. With the production technology transferred from Hyundai Motor, the plant’s first phase would take up an investment of US$126.5 million and was expected to start running early this year.
However, the Government’s new rules on production exhaust gases, auto assembly and imports have obstructed development of the project. The Korean partner has not yet transferred technology to Thaco.
According to a reliable source, during discussions in South Korea earlier this year, Hyundai said the validity of the technology transfer contract between both sides has ended. Slow development of the plant has affected Hyundai’s production and business plans in the ASEAN market.
Therefore, Hyundai suggested canceling the contract. The group will consider revising the production technology transfer contract in 2016.
The source told the Daily that the project with a large capacity would see part of output consumed in Vietnam while the remainder would be exported to ASEAN nations.
Recently, Quang Nam Province’s government has reported the situation to the Government, suggesting Government agencies to convince Hyundai to continue cooperation with Thaco. Local authorities had expected to launch the project into operation early next year.
The new engine manufacturing project is subject to the Government’s incentives in terms of investment credit, stimulus, tax and research and development policies.
Vietnam Airlines domestic market share seen shrinking
Vietnam Airlines, despite its higher-than-expected profit last year, has forecast its domestic market share might contract by a further 6.4 percentage points to 55% this year.
The airline, which last year earned profit of VND140 billion, has set a target of increasing the figure by 239.6% to VND335 billion though its market share has shrunk steadily over the years.
Last year it suffered a local air transport market loss of 7.3 percentage points. The airline’s total market share for domestic and international services this year is forecast to edge down from 50.8% last year to 47.1% this year.
The air transport market grew 21.5% last year, especially in the low-cost domestic segment which is project to gain stronger growth this year.
For transport of passengers from abroad to Vietnam, Vietnam Airlines expects its market share to fall from 40.5% to 39.3% this year.
According to the Ministry of Transport, Vietnam Airlines chairman Pham Viet Thanh has forecast a tough business year in 2014.
While the fleets of budget airlines in Southeast Asia expanded 20% to 500 aircraft and were responsible for around half of the intra-ASEAN air transport market last year, Vietnam Airlines faced a steady fall in market share in the region.
The arrival of major Middle East carriers like Emirates, Etihad and Qatar that are aggressively expanding their worldwide flight networks has also piled pressure on their rival airlines including Vietnam Airlines.
Meanwhile, the competition from private carriers is growing stronger. VietJetAir saw its market share soaring to 26.1% late last year and the rise is seen continuing as it will expand its fleet from 10 planes to 17 or 20 this year.
But Vietnam Airlines will take a modest approach by adding one more aircraft this year to raise its fleet to around 83.
January steel trade deficit falls
The nation’s steel trade deficit stood at around US$340 million in January, down by 18% against the same period of 2012, according to the General Statistics Office.
Last month, steel exports hit 150,000 tons worth US$110 million, down nearly 35% year-on-year, while imports reached 650,000 tons with a total value of US$450 million.
Dinh Huy Tam, a steel specialist, said that Vietnam mostly imported products for which domestic producers had yet to meet demands such as steel sheets, steel flat and cold-rolled steel. These products are for shipbuilding and manufacturing sectors and are used as material for other steel products.
Last month, the local steel industry turned out around 196,000 tons, a 22% year-on-year decrease, given the traditional Lunar New Year holiday, or Tet.
Many enterprises decided to restart business on the ninth day of the lunar new year this Saturday. However, they would maintain production at only 60-70% capacity during the first months of this year due to low market demands.
Do Duy Thai, general director of Viet Steel Corporation, told the Daily that steel consumption would be sluggish in the first half of 2014.
The enterprise will maintain production at its factories at around 70% capacity. Viet Steel Corporation has a combined capacity of 1.5 million tons a year.
According to the Vietnam Steel Association (VSA), the real estate market is still in hibernation as the Government’s home credit package has reported a slow disbursement rate.
Other sectors such as shipbuilding, auto making and mechanical engineering have yet to recover. So, this year’s steel consumption is expected to rise by only 3-5% against 2013.
Last year, the nation’s steel consumption was 11.8 million tons.
VSA said that the nation’s designed manufacturing capacity of construction steel has reached 11.3 million tons a year but enterprises are turning out seven million tons a year. Construction steel consumption was nearly five million tons last year, down by around 500,000 tons against 2012.
Local enterprises are expected to see tougher competition this year as supply has far outpaced demand and consumption is low.
Expensive cars sell well despite market blues
Even though the domestic economy remained in distress and the local auto market reported sales growth of less than 20% last year, luxury car brands stole the limelight due to spectacular sales growth.
According to Audi Vietnam, 2013 was a good year as its sales increased over 80% versus 2012, with around 600 units finding buyers compared to the target of 460.
Unlike other auto brands in Vietnam, Audi’s sales achieved in 2012 were quite stable. Therefore, a year-on-year growth rate of over 80% was a great achievement of Audi AG and Audi Vietnam, said Audi Vietnam general director Laurent Genet.
Quattro-equipped cars accounted for around 70% of Audi’s sales in Vietnam. A4, A5 Sportback, A6 and Q5 saw faster growth last year.
Last year was also the fifth year in a row Audi Vietnam had achieved sales growth. The Audi Hanoi showroom, opened in January 2013, contributed much to Audi Vietnam’s good business performance.
Tran Tan Trung, general director of Audi’s official dealership in Vietnam, described Audi Vietnam’s sales last year as significant as the firm marked the fifth year of its presence in the nation.
Audi Vietnam plans to open a dealership in Danang City in the coming time to better serve customers in the central region.
Similarly, Mercedes-Benz posted sharp sales growth last year, with 1,725 units sold, a year-on-year rise of 65%, three times higher than the market’s average.
With such a result, Vietnam emerged as the highest growth market for Mercedes-Benz in Asia last year. The growth rate also reflected the recovery of the German car brand via the launching of eight new products.
Another major luxury car brand is BMW. According to Euro Auto, the official importer and distributor of BMW cars in the country, with a sales pickup of just 20%, the total number of BMW cars sold locally amounted to nearly 1,000 units last year. Last year’s growth indicated a steady rise in demand for luxury cars in general and BMW vehicles in particular.
Even for expensive Lexus cars, demand is still running high. Lexus’s first dealership in Vietnam opened to business a month ago but has since received around 60 orders for LS 460L, GS 350, ES 350, RX 350 and LX 570 models priced at between VND2.6 billion and VND5.7 billion per unit.
Toyota Vietnam, the official importer and distributor of Lexus cars in Vietnam, has handed over nearly 40 units to customers so far.
The consumption of luxury cars in Vietnam is forecast at 3,000-4,000 units a year and the number will continue to rise. Therefore, many luxury auto brands plan to expand their sales networks.
Talking about the Vietnamese luxury auto market, Toyota Vietnam general director Yoshihisa Maruta described Vietnam as a potential market, saying that though the nation’s GDP per capita was lower than Thailand’s and Indonesia’s, many local customers are willing to own luxury cars.
Audi will open Audi Danang this year after developing its networks in HCMC and Hanoi.
In addition to opening a BMW dealership in Danang this year, Euro Auto will open the first two dealerships for Mini cars in Hanoi and HCMC. The firm struck a deal with its strategic partner Sime Singapore Limited, a member of Sime Darby Motors in Malaysia, last November.
The capital contribution and distribution experiences of Sime Darby can make Euro Auto more competitive in the luxury auto segment, according to experts.
Meanwhile, Mercedes-Benz rolled out the first locally assembled S-Class car and announced the retail price of S 400 L at VND3.48 billion per unit early this year. This automaker will market more cars this year.
Lexus does not focus on increasing its sales but offering customers with excellent products, and convenient sale systems and services.
Besides the first dealership in HCMC that meets global Lexus standards, Toyota Vietnam is expanding its distribution and after-sale service system in Hanoi to meet the increasing demand of customers.
Rising Tet travels to Vung Tau spur expressway toll revenues
The suspension of HCMC-Vung Tau hydrofoil services following a hydrofoil fire that happened on January 22 has led road traffic between the two cities to surge, thus benefiting a newly opened 20km stretch of HCMC-Long Thanh-Dau Giay Expressway.
The new freeway section that connects HCMC and neighboring Dong Nai Province’s Long Thanh town shortens the travel time between HCMC and Vung Tau by half an hour. Therefore, road users, especially Tet holidaymakers, and transport firms have chosen the expressway in droves.
Nguyen Viet Tan, director of Vietnam Expressway Services Engineering Joint Stock Company, told the Daily that traffic on the expressway during the Lunar New Year holiday was double that on normal days, rising from 8,000 to over 16,000 vehicles a day. In particular, the number of tourist vehicles and private cars surged sharply on the fourth and fifth days of the lunar calendar, he added.
The suspension of hydrofoil services prior to the start of the weeklong holiday created an opportunity for passenger transport firms to increase the frequencies of their bus services between HCMC and Vung Tau.
A representative of Phuong Trang, a major transportation company based in HCMC, said the firm increased the number of daily bus services on the route from 24 to 40 during the holiday to meet strong travel demand.
According to Tat Thanh Cang, director of the HCMC Department of Transport, around 12,000 passengers traveled between the two cities by road during the height of the holiday.
The travel time by bus now is almost equivalent to that by hydrofoil, around two hours.
Formerly, hydrofoil would be an alternative transport means for passengers who did not want to get caught in heavy traffic jams on the busy Hanoi Highway when they traveled between HCMC and Vung Tau City.
Ba Ria-Vung Tau boosts tourism in 2014
The southern province of Ba Ria-Vung Tau plans to welcome 13.5 million tourists including 495,000 foreigners, and earn nearly VND3.3 trillion from tourism services in 2014.
To meet this target, the province will invest in infrastructure upgrade, improve service quality, and diversify tourism products. It will develop tours of historical and cultural relics, including Con Dao (Poulo Condo) island and traditional craft villages, as attractive tourist destinations.
The locality will also increase promotions in Japan, considering it a key tourism market. It will implement a pilot project to build several venues for Japanese visitors.
Ba Ria-Vung Tau will promote cultural and tourism festivals, including the annually international kite flying festival, and inaugurate the first phase of MGM Grand Ho Tram Beach – Vietnam’s largest luxury beach resort.
Despite economic difficulty in 2013, the province received nearly 12.5 million visitors and earned VND2.9 trillion from tourism services, representing year-on-year increases of 13% and 18.7% respectively.
During the recent Lunar New Year festival, it served 365,000 holiday-makers and gained a 21% rise in revenue to VND216 billion.
Mekong Delta city to grow high-quality vegetables
The Mekong Delta city of Can Tho will develop 75 areas specialising in vegetable cultivation between now and 2020.
The plan aims to have 2,000-2,500 households growing vegetables in areas covering a total land mass of 750ha.
The households will be provided with farming techniques according to Vietnamese Good Agriculture Practice standards (VietGAP), as well as post-harvest preservation techniques.
Under the plan, the city will also develop 500ha for fruit cultivation that will also serve as eco-tourism sites.
By 2020, the city will also have areas specialising in growing flowers and ornamental trees in Ninh Kieu, Binh Thuy, Cai Rang and Phong Dien districts.
Under the plan, the city will also set up specialised farms for breeding fish, including 24ha for producing tra fish fries and 120ha for breeding tra fish.
The plan is expected to cost more than 833 billion VND (39.7 million USD). Of the figure, 53.6 billion VND will be from the city's budget and the rest, from investors.
The plan will develop infrastructure, and build and upgrade irrigation systems in areas of specialised agriculture.
It is hoped that the plan will encourage enterprises to enter into contracts with farmers, in which the farmers produce specifically for the enterprises, thereby decreasing their risk and improving quality and value.
It will also provide a chance for farmers to develop their tourism service skills when tourists visit the fruit orchards.
Nguyen Hong Dieu, Director of the Can Tho Agriculture Extension Centre, said the centre will work with relevant agencies to implement the plan and local agriculture officials will provide training on advanced farming techniques for local farmers.
The city now has several specialised agricultural fields, including rice, vegetable and fruits. Of these, rice cultivation in the region currently stands at 235,370ha, up 16,780ha against 2008.
The city has developed many large-scale rice fields. This has helped strengthen cooperation among farmers, enterprises, scientists and the Government. The new model for large-scale rice fields has improved income for farmers.-
Construction begins on new Vinatex factory
The Vietnam National Garment and Textile Group (Vinatex) kick-started construction work on a new factory inside the Thanh Loc Industrial Zone in the southern province of Kien Giang on February 7.
The project is part of an effort by the group to reach 5 billion USD in export turnover by 2016.
Covering an area of 36,500 sq.m, the factory will be built at a cost of 150 billion VND (7.05 million USD).
Once completed, it is expected to create jobs for 2,225 labourers, generate 200 billion VND (9.4 billion USD) in turnover and contribute 2.3 billion VND (108,100 USD) to the State budget annually.
In 2013, Vinatex maintained its dominant position in the domestic textile and garment industry, as it contributed 2.9 billion USD to the sector’s export revenue, posting a 12 percent growth compared with 2012.
This year, it will focus on producing and exporting high quality textile and garment products and reducing usage of imported materials.-
Dragon fruit export heads towards new market
Domestic exporters are striving to diversify markets for their dragon fruit, with a view to reducing their dependence on traditional importers from China and the US.
Thanks to domestic farmers’ efforts to improve product quality, Vietnamese dragon fruit has managed to penetrate into demanding markets such as the EU, Japan, and the Republic of Korea (RoK).
Over the recent past, dragon fruit exports to the EU, in addition to other traditional markets, including Thailand , Indonesia , and Netherlands , rose again, which was attributed to international recognition and certification.
Specifically, the dragon fruit has satisfied strict quality requirements of the aforesaid importers and has become the first Vietnamese fruit receiving export code granted by the US . In 2012, Binh Thuan dragon fruit was certificated for its trademark protected by the US Patent and Trademark Office (USPTO) .
In addition, the Plant Protection Department under the Ministry of Agriculture and Rural Development has recently granted a certification for dragon fruit of the Hong An Agricultural Products Import-Export Co., Ltd that satisfies requirements for export to the RoK.
New Zealand has also started a plan helping Vietnam expand its farming and export of the fruit, with the aim of turning Vietnam into the world’s leading dragon fruit exporter.
According to Director of the Southern Fruit Research Institute Nguyen Minh Chau, around 54 percent of Vietnam ’s dragon fruit exports are shipped to the Chinese market, which suffers from unstable demand.
In lowering the dependence on the main importers, efforts have been exerted by domestic dragon fruit exporters to seek and diversify new markets, namely Spain, the Philippines, Norway, India, and the Middle East.
According to a representative of the E.K Prima Vietnam Co., Ltd, a subsidiary of LuLu Group International which is one of the largest corporations in the Middle East, the company sells an average 120 tonnes of dragon fruit to the region each month.
However, several countries such as the US, Japan, Israel and Thailand have succeeded in planting dragon fruit-trees and extending the cultivation, thus being potential rivals for Vietnam’s dragon fruit.
Therefore, domestic experts suggested that localities specialising in dragon fruit should soon surmount shortcomings related to processing, especially preservation and packaging, as well as fostering trade promotion activities.
Vietnam has around 25,000 ha of dragon fruit mostly grown in the central and southern provinces of Binh Thuan, Tien Giang and Long An. Due to high economic value brought to growers, the dragon fruit plantations in the localities have continuously increased over the recent past.-
Binh Duong sees rise in industrial production, exports in January
The southern province of Binh Duong has enjoyed a good start to 2014 with a high increase in industrial production value and export revenue recorded in January.
In the first month of this year, the province recorded a 12.1 percent year-on-year rise in industrial production value at 16.56 trillion VND (773.76 million USD), while its exports hit 1.3 billion USD, up 14.3 percent over the same period last year. The foreign-invested sector contributed 1.1 billion USD, up 11.4 percent.
Notably, the locality’s total revenue from the retail and service sectors in January reached 10.1 trillion VND (477 million USD), an increase of 10.6 percent over the previous month and 26 percent year on year.
After a long Lunar New Year holiday, workers in all industrial parks have resumed their normal working schedule. Before the holiday, more than 20,000 workers were supported to return their own hometown with free travel tickets and New Year gifts valued at 46 billion VND.-
Nghe An targets 560m USD in investment
The central province of Nghe An hopes to attract at least 75 investment projects with a total registered capital of about 12 trillion VND (about 560 million USD) this year, a provincial official revealed on February 7.
To realise the target, the province will do more to improve its investment climate and provincial competitiveness index, accelerate administrative reforms and complete infrastructure facilities while more heavily promoting its potential, Vice Chairman of the Nghe An People’s Committee Huynh Thanh Dien explained.
In its investment attraction strategy for 2014, Nghe An is seeking to win investment in high technology, new material production, health care, pharmaceuticals, information technology, beverages, industrial zone infrastructure, education and vocational training, Dien said.
Nghe An is currently home to 627 valid projects, including 588 domestically invested ones worth nearly 110 trillion VND and 39 foreign-funded ones worth 1.49 billion USD.
The projects are all operating smoothly, Dien said. They have generated jobs for local people and increased budged revenues, while helping attract funds for other projects in the locality, he added.-
Retail sales rise 13% in January
The nation's total revenue from retail sales and services topped VND273.49 trillion (US$13 billion) in January, a year-on-year rise of 13 per cent, the General Statistics Office (GSO) reported.
Statistics have shown that last year, the country's retail industry recorded a yearly increase of 12.6 per cent at VND2,618 trillion (US$124.66 billion).— VNA/VNS Photo Thanh Vu
Vu Manh Ha, a senior expert at the GSO Trade Department, described it as an encouraging result compared with the average growth rate of 12 per cent in the latter half of 2013.
He also attributed the first month's retail sales growth to the rapidly rising demand for commodities during the Lunar New Year holiday.
The trade sector, which accounted for nearly 80 per cent of the total revenues, rose 10.8 per cent over the same period last year, while the services sector experienced a significant rise of 24.2 per cent.
Statistics have shown that last year, the country's retail industry recorded a yearly increase of 12.6 per cent at VND2,618 trillion (US$124.66 billion).
The revenue growth, however, was the lowest over the past four years, compared with 24.5 per cent, 14.2 per cent and 16 per cent in 2010, 2011 and 2012 respectively.
During the year, the sector with foreign investments posted the highest revenue rise of 33 per cent, following by the private sector with 15.3 per cent. Notably, the State-owned sector recorded an 8.6 per cent slump in the total retail sales.
Competitive power market reviewed
Deputy PM Hoang Trung Hai yesterday chaired a meeting to review the operation of the competitive power market in 2013 and develop wholesale power market in the pilot period of 2015-16.
As of late 2013, 102 power plants joined the market with total output of 26,901 MW.
Up to 48 electricity plants with total capacity of 11,947 MW (or 44.4% of the national output) offered prices in the market.
A large number of experts said that after one year of operation, the competitive power market contributed to raising transparency and equality in mobilizing electricity resources; increasing competitive efficiency and cutting costs.
The competitive power market operated constantly without any interruption even during difficult time such as the blackout occurred in May, 2013 when a crane accident cut power to one-third of Viet Nam.
Deputy PM Hoang Trung Hai instructed the Ministry of Industry and Trade (MoIT) and related agencies to resolve obstacles including mechanisms and legal regulations to speed up the development of competitive power market.
Earlier, the MoIT and the Electricity of Viet Nam had submitted a roadmap to pilot the Overall Project on competitive wholesale power market from the end of 2015 to 2016. Since 2017, the competitive wholesale power market would operate fully.
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR