Sacombank allocates $1.45 mln subsidized loans wrongly

Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) has been found having offered VND30 billion ($1.45 million) government-subsidized loans to unsuitable borrowers in 2009-2010, according to State Inspectorate.

The bank also violated regulations on appraisal procedures before offering loans and slackly checked and controlled the use of loans of their customers.

The results of inspection showed that both the determination of the lending period and the amount of soft loans were higher than actual needs of enterprises.

As a result, the Government Office has released a note asking Sacombank to withdraw those capital sources from their borrowers and return immediately to the state budget.

Petrovietnam units sign $1.2 bln coal-power plant deals

State-run Petrovietnam has awarded two contracts worth a combined US$1.2 billion to two subsidiaries to build a 1,200-megawatt, coal-fired power plant, which will boost its thermal coal imports from Indonesia and Australia, the government said.

Vietnam has also licensed Malaysia's Jaks Resources Berhad to invest $2.25 billion to build a coal-fired power plant in northern Vietnam, using domestic coal, a state-run newspaper reported on Friday.

The moves come as coal is expected to take over from hydropower as the leading fuel for new electricity generation in Vietnam in the next five years, a period when annual power consumption is set to rise by 15 percent, after supply had lagged demand by 3 percent in the past five years.

The contract signing for the first project in central Vietnam follows the country's first import of nearly 10,000 tonnes of Indonesian thermal coal this year, as it also continues to buy electricity from southern China to avoid outages.

These also come as Vietnam takes the initial steps towards opening up its power sector, by launching a pilot competitive generation market last Friday to encourage private power generators to boost supply.

The contracts for the Quang Trach 1 plant were signed with Petrovietnam Construction Corp (PVC) and Petrovietnam Investment Consultancy and Engineering Corp (PVE). Construction will start on July 19, the government said in a statement issued late on Thursday.

PVE said the contract awarded to the firm was valued at $17.6 million, the largest in Vietnam so far for a designing deal.

The plant would use coal imported from Indonesia and Australia, the statement said, adding that its use of pulverised coal-fired technology would be environmentally friendly.

Vietnam, a net coal exporter, is expected to import 6.5 million tonnes of the power-generating fuel annually by 2015, from around half a million tonnes a year in recent years, as domestic supply is declining, a minister was quoted on Thursday as saying.

The government said PVE would take the designing role and PVC will buy, install and test-run equipment, including two generators, at the plant in Quang Binh province's Quang Trach district, 410 km (255 miles) south of Hanoi.

The first generator is slated to start operation in June 2015 and the second in December 2015, with a combined annual output expected at around 8.4 billion kilowatt hours, the government's statement said.

Petrovietnam has been tasked to ensure it would supply 9,000 megawatt of designed power generating capacity between 2011 and 2015 in order to meet a quarter of Vietnam's electricity output.

It was not immediately clear how Petrovietnam is going to fund the Quang Trach 1 plant's project.

Last December, Petrovietnam said it would use its funds to meet 30 percent of the investment need to build the $1.2-billion Long Phu 1 power plant in the country's south, also using Indonesian and Australian coal, while taking export credit assistance funds for the remaining 70 percent.

Long Phu 1 and Quang Trach 1 would sell electricity to state utility Vietnam Electricity group (EVN).

Vietnam also plans to start building the country's first nuclear power plant in 2014 using Russian technology.

The country's electricity consumption would nearly double to 175 gigawatt-hours in 2015 from 98 gigawatt-hours this year while supply will increase to 196 gigawatt-hours from the current 110.8 gigawatt-hours, EVN has said.

Experts skeptical about fuel wholesalers’ loss

As private fuel retailers are reporting profits, many experts are skeptical about state-owned petrol wholesales which have been reporting losses and asking for a fuel price increase.

Many retailers in Ho Chi Minh City for instance say they are earning a profit of up to VND500 per liter of gasoline as the global gasoline price has been dropping while domestic fuel prices remain unchanged.

The retailers say they receive a discount of as much as VND800-1,000 on every liter of gasoline and oil from wholesalers.

This, experts say, shows that wholesalers are making profits. Yet, many state-owned wholesalers have been reporting losses and asking for price increases. Petrolimex for instance has called for an increase in domestic fuel prices, saying fuel prices in Vietnam are much lower than in neighboring countries.

An official from the Ministry of Finance however said such a comparison is invalid since fuel import taxes in neighboring countries are much higher than in Vietnam.

He is thus calling for an independent audit of petrol wholesalers to find out whether these companies are really suffering losses.

“We will raise fuel prices only if audit results show that wholesalers are indeed losing,” he said.

An Giang to build airport

The Ministry of Transport has officially approved a plan to build a civil and military airport in the Mekong Delta province of An Giang, the An Giang Province People’s Committee and Civil Aviation Administration of Vietnam (CAAV) confirmed Thursday.

Under the plan, the airport will be built on a total area of 235 ha in Can Dang Commune, Chau Thanh District and cost about VND3.4 trillion (US$170 million).

The approval came despite a public concern that such an airport is unnecessary.

Vuong Binh Thanh, Chairman of the provincial People’s Committee, however said the airport would help boost the local tourism industry.

Of all Mekong Delta provinces, An Giang receives the highest number of tourists every year and is attracting foreign investments in its economic zones, Thanh said. These visitors and investors will want to fly to An Giang and thus the airport is necessary, he said.

Incham to have more CSR activities in Q4

The Indian Business Chamber in Vietnam (Incham) will host a series of activities in the last quarter of this year in an effort to boost Indian business efficiency, strengthen the relationship with Vietnamese partners and improve corporate social responsibility in Vietnam.

They will likely include a seminar in the pharmaceutical industry and another in investment, some sports activities like a bowling competition, a blood donation camp, a charity event for needy Vietnamese people, and the annual Diwali Festival, Mohan Ramesh Anand, Incham Vice chairman, told Tuoi Tre.

Incham is also planning to open a book directory focusing on almost all business sectors in Vietnam for its Indian business community in Vietnam and join hands with state agencies including the Vietnam Chamber of Commerce and Industry to publish a guidebook to doing business in Vietnam for foreigners, he added.

In the first half of this year, Incham organized two business seminars on temporary developments in Vietnam legislation and Vietnam economic outlook, which have gathered a number of officials from central to municipal state agencies and experts including Andy Ho, chief investment officer of VinaCapital, Marc Townsend, managing director of CB Richard Ellis Vietnam, Tuyen Nguyen, investment officer of International Finance Corp, and Amit Arora, Vietnam’s country head of consumer banking at ANZ bank.

Vietnam is offering trade opportunities for Indian companies in many sectors including agro-food products, engineering, plastics, textile-garment-fashion, pharmaceutical, furnishing-handicrafts and art, electronics-telecoms, machinery-equipments, construction and service industries.

As of June 2011, India ranks 28th out of 93 foreign investors in Vietnam with 58 projects worth over $225 million, according to Foreign Investment Agency under the Ministry of Planning and Investment.

Indian investment projects are mainly in manufacturing, mining, oil and gas exploration and exploitation, garment and textile, and animal feed.

For the past few years, Indian has always been among the top ten largest trading partners of Vietnam with bilateral trade worth $2.75 billion last year and is targeted at $4 billion this year.

Mentioning difficulties that the 170 member companies under Incham met during the first half of this year, Anant Chhajed, member of Incham’s board of governors said it was labor shortage.

The scarcity of trained Vietnamese staff really had a bad impact on us in the short-term, Chhajed said.

The fact is that many Vietnamese laborers lack maturity in thinking, so they quit a company for another just because of some additional $5-10 dollar a month, Anand said.

They are not aware of the possible promotion along their career ladder at a certain company, their long-term goal and prospect, and just focus on short-term benefits, he said.

What Indian business community, specifically, and foreign business communities, generally, needs now is the long-term commitments of their employees, Anand added.

Of course, we know inflation is the key reason for their leaving, but as the economic situation is improving, we need the Ministry of Education and Training to compile textbooks or training courses in occupational discipline so that workers will know what they should do in pursuing their long-term career, Chhajed said.

Prices drop thanks to policy, lower exchange rate

Prices have been dropping across the board as the government’s stabilization policy has set in and the US dollar-dong exchange rate is going down.

Co.op Mart, Vietnam’s leading retailer, said many powdered milk firms have reduced their prices by 3 to 5 percent while others have been maintaining the same prices but increasing product weights for the past two weeks.

Vietnam’s largest diary producer Vinamilk said it will increase the weight per box of its Dielac Alpha powdered milk by 15 percent without changing the price as of July 1.

This will help consumers save VND10,000 on each box, Vinamilk said.

Essence wash liquid producers are also giving consumers an extra 500ml on every two-liter bottle.

Prices of imported confectionary products have also gone down by 2 to 3 percent while cosmetics producers opt to offer customers gifts as discounts.

Nguyen Phuong Thao, director of Maximark Cong Hoa in Ho Chi Minh City’s Tan Binh District, said many producers working with her supermarket have also announced their plans to reduce prices.

Besides providing consumers with direct discounts, many producers are now working with supermarkets to launch promotional programs, hoping to increase summer sales by up to 15 percent.

Big C said it will kick off its biggest sales of this year during the summer with discounts of up to 50 percent on over 4,000 products.

As input costs for poultry farming have recently gone down by 7 percent, and demand is low, the HCMC Department of Finance has also asked producers to reduce poultry meat prices by VND2,000-7,000 per kg as part of its price stabilization campaign.

After poultry meat prices soared by VND20,000 per kg in the first six months of this year, many market goers said the price reduction is making things easier for them.

According to the management board of Tan Xuan Market in Hoc Mon District, fruits and vegetables have also been priced down as there is a large supply of these products everyday.

Many expensive products like spinaches, cabbages and carrots at this market have also fallen by 20 to 40 percent per kg.

Banks lower deposit interest rates
 
Techcombank and Eximbank have lowered the interest rates they offer on Vietnamese dong deposits by a percentage point in order to hold rates within the 14-per-cent cap set by the State Bank of Viet Nam.

Eximbank is now offering 13.85 per cent per year for deposits of one, two and three months, while Techcombank is posting a rate of 13.5 per cent for four- and six-month terms.

Tight credit policies could be behind the move to lower deposit interest rates as the policies had restricted the ability of banks to make loans and therefore resulted in a lower demand for capital, said Vietinbank deputy director Le Duc Tho.

Falling deposit interest rates also reflected the slowed pace of inflation in June, further easing upward pressure on deposit interest rates, he added.

Last Monday, the SBV also reduced the interbank rate applied to open market operations from 15 per cent to 14 per cent, creating a stronger opportunity for banks to borrow money from the central bank instead of raising capital from depositors. The overnight interbank rate had fallen to 11 per cent per year by Thursday.

National Financial Supervisory Committee vice chairman Le Xuan Nghia said declining interbank rates over the past two weeks demonstrated that bank liquidity had improved.

Over the past few weeks, by buying in large quantities of US dollars, the central bank has also poured a large quantity of Vietnamese dong onto the market, lessening bank demand for deposits, although some experts have predicted that competition among banks to attract deposits would remainl fierce due to slow capital inflow into the banking system. According to the State Bank, commercial bank deposits as of June 20 represented an increase of 2.88 per cent from the beginning of the year, far slower than the 11-per- cent pace seen in the same period a year earlier.

At a meeting last month, State Bank deputy governor Nguyen Van Binh noted that the average interest rates on Vietnamese dong and US dollar deposits were 15.15 per cent and 5 per cent per year, respectively, far beyond the cap of 14 per cent and 2 per cent, respectively, set by the central bank.

Credit institutions offering deposit interest beyond the cap would be subject to a fine of VND20-30 million (US$970-1,460), under a decree draft under consideration by the central bank aimed at curbing unhealthy competitive practices among credit institutions.

On Thursday, the State Bank ordered credit institutions, including branches of foreign-invested banks, to report their latest deposit and lending interest rates.

Ninh Thuan to stop investing in slow projects

The People's Committee of central Ninh Thuan Province will cease investing in the operation of some projects because of delays in construction.

The project includes Cong Hai Wind Power Plant in Thuan Bac District of Canada-based Greta Energy Inc, Gas Extraction and Charge Station in Ninh Son District of Hung Gia Anh Co Ltd, Hon Do Luxury Convalescence Tourist Area, Phuoc Hai Wind Power Plant, Yen Hotel&Department Phan Rang in Phan Rang city.

The committee reminded many other investors to ensure there was a commitment to finish procedures to begin building according to schedules.

Since 2001, the province has attracted investment from many domestic and foreign enterprises and economic groups. There have been 57 investment projects in the province, and many of them have been put into operation.

For example, the Luks cement factory of Ninh Thuan-based Luks Cement Viet Nam Co Ltd began building in February 2008 and was put into operation in August 2009.

With the total capital of US$26 million, the factory created jobs for local labourers.

In the first six months of this year, the factory produced 116,000 tonnes of cement with total revenue of more than VND121 billion (US$5.8 million).

However, dozens of projects in the province have been implemented slowly and progress is not ensured because of the lack of capital, said Pham Dong, head of the province's Department of Planning and Investment.

For example, in Thuan Bac District, the Greta Energy Inc received an investment licence to build a wind power plant in the district's Cong Hai Commune in May 2007.

Under the commitment, the plant began to be built in 2008 and was put into operation in April, 2009.

Traffic projects delayed by lack of funds

Construction of several key traffic projects in HCM City have been delayed for lack of funds, local officials say.

The Bang Ky Bridge in Binh Thanh District, a road section to link Hoang Dieu Street in District 4 to Nguyen Van Linh Boulevard in District 7, the expansion of Truong Chinh and Tan Ky Tan Quy streets and two traffic jam hotspots in Tan Binh District, were among the projects on which work could not begin, said Le Quyet Thang, director of the city's Urban Traffic Management Unit 1.

Thang said delays have also occurred in the project to upgrade Ben Van Don Street in District 4 and Provincial Road 10B in Binh Tan District. The unit was pushing hard for funds for these projects because they were urgent, he added.

The Nguoi Lao dong (Labourer) newspaper quoted deputy director Le Ngoc Hung of the city's Urban Traffic Management Unit 2 saying he hoped to receive VND20 billion (US$967,000) for completing work on the Go Dua Intersection in Thu Duc District, which has been delayed for eight years. Tran Quang Vinh, director of the city's Urban Traffic Management Unit 3, said the construction of 11 bridges on provincial Road 9 that linked the city's Hoc Mon District with Duc Hoa District in neighbouring Long An Province had been delayed.

"Some of the bridges have small capacities at present, but these are having to bear continuous traffic of heavy trucks everyday. The risk of collapse is obvious," said Vinh.

Thang, Hung, and Vinh said they were doing their best to get capital for the projects, but the funding decision rested with higher ranking agencies.

The city's Department of Transport said it received VND1.12 trillion ($53 million) for traffic infrastructure construction projects this year, but this could only meet 30 per cent of the capital needed for basic traffic constructions around the city.

The managers of the traffic management units said they were also experiencing difficulties accessing maintenance funds; not good news for a city teeming with 5.2 million vehicles.

Free trade pact with EU to benefit economy
 
A future free trade agreement (FTA) between Viet Nam and the European Union (EU) would greatly benefit the Vietnamese economy.

Deputy Director of the Ministry of Trade and Industry's Multilateral Trade Policies Department, Le Quang Lan, made the above comment at a seminar held by the European Chamber of Commerce in Viet Nam and the Viet Nam Chamber of Commerce and Industry in Ha Noi yesterday.

An FTA would afford Viet Nam with opportunities to sharpen its competitiveness, attract more foreign investment and promote its exports, Lan said.

Juan-Jose Almagro Herrador, political and economic advisor to the EU Delegation in Viet Nam agreed, saying that lower EU tariffs would better facilitate Vietnamese exports especially in textiles, seafood and footwear, while lowering Vietnamese tariffs could assist the local economy to become more competitive in the long term and help increase EU investment in Viet Nam.

Under an FTA, EU import tariffs imposed on Vietnamese textiles would be reduced from 12 per cent to 0 per cent, creating more opportunities for local garment exporters, said Bac Giang Garment Joint Stock Co general director Nguyen Huu Phai .

Despite having encouraged growth, Vietnamese textile exports to the EU have still been lower compared to exports to the US, Japan and South Korea, he said.

In the first nine months of 2010, Vietnamese textile exports to the US reached US$4 billion, an increase of 22.1 per cent compared to 2009. Exports to Japan reached $700 million, an increase of 15 per cent while exports to the EU accounted for $1.18 billion, an increase of only 6 per cent.

An FTA was essential in importing machinery, technologies and cheaper and better materials from the EU to enhance production capacities and product quality.

"Sharing experiences and technical knowledge is expected to greatly enhance the reputation of Vietnamese textile products within the EU market," he noted.

During the last decade, the EU has been an important trading partner to Viet Nam, two-way trade having experienced an annual growth rate of 15-20 per cent in recent years and trade valued at $15.5 billion in 2010.

As of March, the EU has invested $16 billion into 1,079 projects throughout the country.

Enterprises fight to survive challenges

High interest rates, drastic market fluctuations and lower consuming remain major obstacles to the development of Vietnamese enterprises.

Viet Nam Chamber of Commerce and Industry president Dr Vu Tien Loc said that to the end of June, 40 per cent of the 580,000 registered businesses had announced their failure, stopped working or entered into bankruptcy.

The number of enterprises in extremely difficult situations had doubled compared with the same period last year.

Viet Nam Association of Small and Medium-sized Enterprises president, Dr Cao Sy Kiem, said 30 per cent of 22,000 member enterprises were making no progress, 30 per cent were having difficulty and the remainder were at risk of bankruptcy.

Many enterprises had not declared their failure due to complex procedures.

Kiem said 30 per cent of trade villages targeting exports have had to reduce production.

In the first half of the year, breakdown situation happened in many cities and provinces such as Can Tho, Da Nang, Quang Tri and Quang Nam.

Viet Nam Trade Village Association president Vu Quoc Tuan said high interest rates, input price rises and a decline in international consumption were the main reasons why enterprises found it difficult. Enterprises specialising in production of wood, rattan and jewellery consumed in the domestic market, have still withstood.

Finance Minister Vu Van Ninh has submitted a number of measures to support enterprises, including the extension of tax deadlines and tax reduction and exemption, for adoption by the Assembly on July 21.

The proposed time of extension of tax deadlines, tax reduction and exemption is from August 11 to the end of the year.

Under the Finance Ministry's plan, small and medium-sized enterprises and those that had more than 300 workers will have their deadlines for enterprise income tax delayed a year.

The amount of this tax is expected to be about VND10-13 trillion (US$485 million-$630 million).

Enterprise income tax that applies in tax extension enterprises, will down 30 per cent, totalling VND2.5-3.7 trillion ($121-197.6 million), according to the ministry's plan.

Cashew export volume down, value increases

Cashew exports in the first six months of the year reached 67,000 tonnes worth US$499 million, an increase in value, according to the Ministry of Agriculture and Rural Development.

Although the figures represent an increase of 17.3 per cent in value, they represent a decline of 16.4 per cent in volume. In June alone, exports reached 13,000 tonnes worth $100 million. The average export price of cashews from January to June was $7,915 a tonne, a record high. The consumption of cashew in the US, China, the EU and the Arabic zone has increased rapidly while the world supply of raw cashew had fallen this year due to poor harvests, the Vietnam Economic Times reported.

Viet Nam's cashew industry is facing a shortage of raw cashew for processing as the country, the world's leading cashew exporter, has had a poor harvest this year.

The industry estimates that it will export about 190,000 tonnes of cashew nuts this year, down 4,000 tonnes against last year because of lower output. It plans to import 300,000 tonnes of raw cashew for processing.

However, the quantity of raw cashews imported from West African countries has been lower because those countries have experienced a decline in production this year.

To have raw cashew for processing, Vietnamese exporters are exchanging rice for raw cashews with Nigeria and Cote d'Ivoire in order to have a total of 200,000 tonnes of imported raw cashews for this year.

While domestic processors are struggling to buy raw cashews, a large quantity of raw cashews and preliminary processed cashews have been exported to China, which is buying them at a high price. Vietnamese exporters should limit the export of raw cashew and preliminary processed cashew to China and increase processed cashew exports to China, said market experts.

Tien Giang's industrial zones attract $358m

The southern province of Tien Giang's industrial zones have attracted five FDI projects with a total registered capital of over US$358 million in the first half of this year.

These projects cover a leased land of 57ha, according to the provincial Industrial Zones Authority.

Among them, the Tan Huong industrial zone has secured one project from the Viet Nam Bella Company Limited (China) that will produce gifts, handbags and stationery. Long Giang industrial zone attracted four projects to produce eco-friendly handbags, electricity utilities and rice bran oil.

Japanese to invest and build shipyard factory

Central coastal province of Khanh Hoa has licensed a shipbuilding factory project worth VND3.8 trillion (US$181 million) investment capital on 304ha in Cam Ranh Town.

The Oshima group of Japan invested in the project and the investment certificate is expected to come through by the end of this year.

Once completed, the factory is expected to employ over 3,000 workers. Construction on the factory is projected to begin in February 2015, and operations will start in 2017.

Long An attracts $3.2b foreign investment

Long An Province has attracted 371 foreign investment projects with a total investment capital of US$3.2 billion from 29 countries and territories. In which, 152 have come into operation, contributing 18 per cent to the province's GDP.

Taiwan takes the lead with 135 projects, followed by South Korea with 54 projects, China with 31 and Japan 26.

In the first half this year, total output of foreign-invested enterprises claims VND7.4 trillion ($352.4 million), up 21.4 per cent year-on-year.

Viet Nam takes part in creative expo in Indonesia

Vietnamese businesses operating in creative industrial sectors are showcasing their products at the fifth "Creative Product Week" (CPW) expo in the Indonesian capital city of Jakarta from July 6-10.

This year, CPW highlighted creative products in information technology, such as music tapes and discs, films and software, and in publishing, printing, packaging design, advertising and fashion.

With traditional cultural and artistic products, Vietnamese booths, prepared by the Vietnamese Embassy in Indonesia, were seen as one of the most attractive among those of ASEAN countries.

International Forestry Corp invests in sector

The International Finance Corporation (IFC), a member of the World Bank Group, is co-operating with Japan's Sumitomo Forestry Company Limited to build a particleboard processing plant in the southern province of Long An.

With an annual design capacity of 250,000 cubic metres, the plant, which is expected to begin operating later this year, will produce high-quality particleboard that meets the specifications of major furniture processors.

Government bond issue raises $155 million

A total VND3.2 trillion (US$155.3 million) out of VND4 trillion worth of three- and five-year Government bonds was successfully auctioned on Thursday. Five-year bonds worth VND1.45 trillion ($69 million) were sold, with an interest rate of 12.3 per cent, while three-year bonds totalling VND1.75 trillion were sold, paying a yield of 12.2 per cent, 0.1 per cent lower than the prior auction carried out on June 30 auction.

REE prepares list to converts corporate bonds

Refrigeration & Electrical Engineering (REE) will conclude its list on Friday of bondholders eligible to convert bonds into shares next Friday. The value of the convertible bonds, which paid a yield of 8 per cent per year, is VND810.4 billion (US$39.3 million). On August 2, REE will convert one bond into 72 shares with par value of VND1 million. Bondholders will receive shares by December 31.

PetroVietnam Insurance bests earnings target

PetroVietnam Insurance Co's earnings reached VND3 trillion (US$145.6 million) in the first six months of the year, representing 61.8 per cent of the total target for the year and an increase of 18.6 per cent over the same period last year. The company posted an estimated profit of VND220 billion ($10.4 million) during the period, an increase of 13 per cent. PetroVietnam Insurance holds a 25-per-cent market share in the non-life insurance market.

Century 21 property agency firm to list in HCM City

Century 21 Co will list 19.3 million shares on the HCM City Stock Exchange on Friday at a reference price of VND35,000 (US$1.70) per share. Century 21, operating in real estate and tourism, has charter capital of VND193.4 billion. The company earned VND120 billion last year and had a net profit of VND59.7 billion. This year, it projects earnings of VND201 billion and a profit of VND132 billion, on which it expects to pay a dividend of 16 per cent.

Tea exports tipped to rise despite slow H1

Tea export value for this year would still increase, despite a disappointing first half, said the Ministry of Agriculture and Rural Development.

The ministry said the export value of tea for this year was expected to increase year-on-year by 10 per cent to US$200 million, even though export volume was estimated to fall by 3-5 per cent to 120,000-130,000 tonnes, due to natural disasters.

Nguyen Van Thu, deputy chairman of the Viet Nam Tea Association, said the increase in value was due to higher export prices.

The increased prices were due to higher quality tea imports and better hygiene and safety, Thu said.

In first half of this year, export value fell 9.3 per cent in volume and 7.3 per cent in value, said the ministry.

During the first six months of the year, tea exports reached 50,000 tonnes, earning $72 million in revenues.

Tea exports declined due to lower demand on the world market, including in countries such as Pakistan, China and Indonesia, because of high prices, said Nguyen Viet Chien, director of the ministry's Information and Statistics Department.

The average export price on the world market during May surged by 5.5 per cent to $1,437 per tonne compared to the same period last year, Chien added.

The current export price of Vietnamese tea is 60-70 per cent that of the world price, significantly higher than the previous 25-50 per cent rate.

Viet Nam, having exported tea to 110 countries, has become the fifth largest tea exporter in the world.

Despite growth, trade deficit rises with S Korea
 
Two-way trade value between Viet Nam and South Korea has been increasing but this also created a growing trade deficit, despite continuous growth of Vietnamese exports.

South Korea is the second biggest foreign investor in Viet Nam, just after Taiwan. It is also Viet Nam's fifth biggest exporter, according to the Ministry of Planning and Investment.

Viet Nam-South Korea trade revenue growth in the last 10 years was over 20 per cent.

It saw a sharp rise, especially after the ASEAN-South Korea Free Trade Area Agreement (AKFTA) took effect in 2007.

The two-way trade recorded growth at 39.8 per cent in 2007, 34.4 per cent in the following year, and 42.2 per cent last year.

The financial turbulence turned growth down to 2.1 per cent.

Last year, Vietnamese export growth reached a record high of 49.8 per cent, the highest in a decade, with revenue reaching over $3 billion for the first time.

The kind of goods exported to South Korea, however, did not have a remarkable change as raw materials, fuel and mineral products still made up the major value, 22.5 per cent.

The group of agricultural, forest and seafood products took 20.2 per cent, followed by light industry products, 16.9 per cent.

Steel products, machinery, equipment and spare parts were the only goods that had a major breakthrough, adding diversity to the kinds of exported goods.

The Vietnamese market share in South Korea, however, is still small, just nearly 5 per cent.

Compared to Vietnamese exports to South Korea, Korean exports to Viet Nam rose much more rapidly.

Figures from the Ministry of Industry and Trade and Viet Nam Customs said the average import value growth from South Korea reached 19.6 per cent in the last 10 years.

There was a remarkable rise seen in 2007 (37.8 per cent); in 2008 (32.5 per cent); and a sharp drop in 2009.

Due to the economic recovery in both Viet Nam and South Korea, plus the expansion and promotion of Korean businesses in Viet Nam, Vietnamese imports from South Korea reached their highest value, gaining more than $9.7 billion, an increase of almost 40 per cent compared to the previous year.

Experts said Vietnamese exports to South Korea are mostly products of light industry, taking 60 per cent of the total exports to South Korea, while imports from South Korea are mainly input materials, amounting to 70 per cent of the total South Korea exports to Viet Nam, for domestic production and export products.

According to experts, this is one of the main reasons for the excess of imports over exports.

In addition, imports of South Korean input materials, machinery and equipment are increasing because of higher Korean foreign direct investment in Viet Nam.

South Korea overtook Singapore to become the biggest investor in Viet Nam in 2007.

Viet Nam now stands at number four among South Korea's overseas investment markets behind the US, Hong Kong and mainland China, according to the Korea Trade-Investment Promotion Agency (KOTRA).

At the annual Consultative Group Meeting later last year in Ha Noi, South Korea pledged to provide $411.8 million in ODA for Viet Nam this year, up 39 per cent against 2010.

The remarkable increase of imports of South Korean consumer's goods, such as cars, mobile phones and cosmetics, has been another factor contributing to the excess of South Korean imports over exports.

To reduce the trade deficit from South Korea, experts suggested that South Korean businesses invest in the Vietnamese support industry.

Trade promotion between the two countries should also be stepped up, said the experts.

In a meeting with South Korean Ambassador last month in Ha Noi, Prime Minister Nguyen Tan Dung proposed further promotion of the two countries' bilateral trade to reach beyond last year's figure of $13 billion.

Co-operation between South Korean and Vietnamese authorities should be improved on speeding up inspection procedures of Vietnamese fruit that can qualify as exports to South Korea, experts suggested.

They said that Viet Nam should ask South Korea to acknowledge certification on Vietnamese agro-forest products' quarantines by local authorised agencies.

This would help boost the imports of Vietnamese agro-forest products to South Korea. Measures on reducing imports of South Korean consumer's goods should be taken as an effort to solve the problem.

Companies told: Invest in technology
 
The fast-growing number of foreign investors has led to an expansion of industrial manufacturing in Viet Nam, especially for local production.

But to remain competitive, local companies had to invest in modern technology, said Chainarong Limpkittisin, managing director of Reed Tradex Company.

Trade exhibitions could help them achieve that goal because exhibitions were an effective business platform and could provide face-to-face connections for buyers and sellers, he said.

Chainarong said he hoped local firms would attend the Metalex Viet Nam 2011, the large-scale exhibition of machinery, equipment and metalworking technologies to be organised on October 6-8 in HCM City.

The exhibition will bring together 500 well-known brands from 25 countries and territories, including Singapore, Thailand, mainland China, Japan and South Korea.

The three-day exhibition will introduce new machinery and technologies in welding, factory automation, molds and dies, wire and tube technology, control measurement, tools and tooling, and many more.

"There will also be a high-tech zone called the Robot Demonstration Zone and a Business Matchmaking Programme to enable participants to find the right business partners through an online programme," he said.

The event will also include professional seminars where leading experts will present the latest industrial trends.

The exhibition this year will run alongside the international exhibition on electronic parts manufacturing technology, Nepcon Viet Nam 2011, which will create an all-under-one-roof meeting centre for the manufacturing community.

Chainarong said this year's exhibition was expected to attract at least 20 per cent more visitors than the one held last year, when 11,400 people attended.

On August 25, the organising committee of the two exhibitions will organise a forum at the Sheraton Hotel that will discuss recovery strategies for small – and medium-sized enterprises and the secrets of business negotiations.

Jakarta probes steel dumping
 
The Indonesian Anti-Dumping Committee has commenced an investigation into the alleged dumping of cold-rolled steel from Viet Nam, mainland China, Taiwan, South Korea and Japan, announced Viet Nam Competition Administration deputy director Vu Ba Phu.

The investigation arises from a petition recently lodged by steel producer PT Krakatau Steel. The Indonesian Anti-Dumping Committee (KADI) accepted the investigation because Indonesian customs data showed that cold-rolled steel imports from those countries had increased by over 57 per cent over the same period last year.

"According to the World Trade Organisation's Anti-Dumping Agreement, if Vietnamese rolled steel accounted for 3 per cent or less of Indonesia's total steel imports, it wouldn't be investigated for dumping and Viet Nam's steel exporters would be dropped from the legal action," Phu said.

"If the plaintiff is not eligible to sue, Viet Nam may request Indonesian authorities consider rejecting anti-dumping investigations of cold rolled steel imported from Viet Nam into Indonesia," Phu said. "Meanwhile, steel producers and trade associations should actively co-operate with the foreign investigation by providing clear and sufficient evidence that no dumping on the Indonesian market occurred."

Producers should review their production, business and export records to collect figures and prepare financial reports for the investigation, he said. They should co-operate closely with the Viet Nam Steel Association and State offices to receive advice and technical support aimed at making an effective response to the foreign investigation.

The Viet Nam Competition Administration was working with the General Department of Customs, steel producers and the association to make a timely response.

This was a complex lawsuit, so the producers and the association should employ lawyers and auditors to support them through the duration of the legal action, he added.

Vietnamese steel exports to Indonesia rose 119.35 per cent in the first quarter of this year to a total value of US$61.5 million, said the Trade Office of Viet Nam in Indonesia, while exports of steel products rose 82.11 per cent and reached a value of $3.3 million.

Warning on foreign fund loan offering

The Ministry of Finance has dispatched document No 7679/BTC-QLN to ministries, ministerial level agencies and people's committees of provinces and cities issuing a recommendation about the offering of the Nusantara Asset Fund for financing.

Representatives of the Indonesian-based fund recently visited several regions offering long-term loans with low interest rates.

After verification, the Ministry of Finance discovered the fund has no legal status, is financially incapable and is unable to arrange capital for institutions and individuals in Viet Nam.

Following this discovery, the Ha Noi People's Committee asked government agencies to warn local officials and people of the financial risks.

Maritime Bank, Vinacomin sign agreement

Maritime Bank will further foster its co-operation with the Viet Nam National Coal and Mineral Industries Group (Vinacomin), pursuant to a strategic partnership agreement inked between the two sides in Ha Noi on Wednesday.

Under the agreement, Maritime Bank will provide Vinacomin with financial consulting services and arrange capital for the group to issue corporate bonds on both domestic and foreign stock markets.

High-pressure vessel sent to Singapore

The Chemical Processing Equipment Plant (CPE), run by the Doosan Heavy Industries Viet Nam Company Limited (Doosan Vina), exported a batch of high-pressure vessels, valued at US$500,000, to the Tembusu Biomass Co-firing Co-generation plant in Singapore (TBS Steam Drum project) on Tuesday.

Once installed and in operation, the vessel will be responsible for transmitting high-pressure steam throughout the plant.

The TBS Steam Drum project was developed by the Dossan E&C Mecatec Business Group and the Sumitomo Heavy Industries from Japan last year.

This is the CPE's second batch to the world market. The company is scheduled to export four additional batches to the Philippines and Australia later this year.

Malaysians seek VN opportunities

A delegation of 18 Malaysian IT companies will tour Viet Nam during July in order to explore investment opportunities, according to the Viet Nam Software Association.

A business matching conference is scheduled to be held in Ha Noi on July 17 as part of the investment tour.

Can Tho's IZs attract $1.75 billion

Industrial zones in southern Can Tho Province have attracted investment capital of US$43.7 million during the first half of this year, according to the provincial People's Committee.

Of the total sum, $36.8 million came from seven new projects while the remainder came from an existing project increasing its capital.

The latest additions have brought the total number of provincial projects to 197, worth a combined $1.75 billion.

Annual reports receive awards

The HCM City bourse-listed DHG Pharmaceutical Co (DHG) and the PetroVietnam Drilling and Well Services Co (PVD) won the Special Award at the 2011 Annual Report Awards ceremony, organised by the HCM City Stock Exchange, the Dau tu chung khoan (Securities Investment) newspaper and fund management company Dragon Capital.

Seven listed companies, including Eximbank (EIB), Sacombank (STB), Saigon Securities Inc (SSI), Phu My Fertiliser (DPM), Petrovietnam General Services (PET), Vinaconex Advanced Compound Stone (VSC) and Long Hau Corp (LHG), received awards for best annual reports.

Up to 650 reports participated in the contest this year, and 70 per cent of which satisfied quality requirements.

Nguyen Anh Tuan, editor in chief of the Dau tu chung khoan newspaper, said that the efforts of listed companies in making qualified reports were very encouraging in the face of current economic difficulties.

Thang Long continues on top

The Thang Long Securities Co (TLS) continued to top the Ha Noi brokerage market during the second quarter with an 8 per cent share. Brokerage firms such as the VNDirect Securities Co (6.78 per cent) and the Hoa Binh Securities Co (6.21 per cent) followed closely behind.

Saigon Securities Inc (SSI), which topped the brokerage market share on the HCM City bourse, only ranked 7th on the Ha Noi market with a 3.61 per cent share.

Three new companies, including Golden Brigde Viet Nam, Kim Eng and Agriseco, advanced into the list of top 10 brokerage firms on the Ha Noi market last quarter, replacing Dong A, Viet Nam International and Sacombank Securities.

Diageo unit bids for Halico stake

Singapore-based Streetcar Investment Holdings, a subsidiary of the global leading spirit maker Diageo, made a public offer to buy another 1 million shares of the Ha Noi Liquor JSC (Halico) at a price of VND213,600 (US$10.37) per share.

Transactions are expected to be carried out from July 21 to August 19. Diageo hopes to raise its current 25 per cent holdings of Halico's charter capital to 30 per cent.

Halico shares are currently traded on the over the counter market (OTC) at around VND100,000 ($4.85) per share.

Phuoc Hoa Rubber meets goal

The Phuoc Hoa Rubber Co (PHR) expects to earn a profit of VND404 billion (US$19.6 million) during the first half of the year, completing 65.6 per cent of its annual profit target.

Profits from rubber sales made up the largest proportion at 86.5 per cent, equivalent to VND349.5 billion ($17 million), while financial activities earned the company VND13.35 billion ($648,000).

EVN unit speeds up work on Lao, Cambodian dams

EVN International Joint Stock Company, a subsidiary of Electricity of Viet Nam Corp (EVN), is hastening work on its hydroelectric projects in Cambodia and Laos.

The projects include the 400-MW Lower Se San 2 Hydro-power Project in Se San District of Cambodia's Stung Treng Province, which has been approved by the Cambodian Government.

EVN International Co (EVNI) contributed a 51 per cent stake and the local Royal Group a 49 per cent stake of the project, which will be carried out under the BOT (build-operate-transfer) investment form.

The Ministry of Industry, Mining and Energy of Cambodia has agreed to purchase 50 per cent of output from the Lower Se San 2 Plant, construction of which is scheduled to begin in 2012 and to be completed by the end of 2016.

EVNI are conducting negotiations on electricity selling prices and power purchase agreements (PPAs) with Cambodian authorities.

The company will also build a transmission line to sell the remaining 50 per cent of the plant's output to Viet Nam.

EVNI has completed a feasibility study on the 96-MW Lower Se San1/Se San 5 hydro-power plant in Ozdao District of Cambodia's Rattana Kiri province and Duc Co District in Viet Nam's Central Highlands province of Gia Lai.

The company also signed a memorandum of understanding with Cambodia's Ministry of Industry, Mining and Energy on jointly conducting a study on the 190-MW Sekong hydro-power project which requires investment of US$407 million.

In addition, EVNI is preparing for the 70-MW Nam Mo 1 Hydro-power Project in Laos' Sieng Khouang Province, which has a total investment of $119 million.