BUSINESS IN BRIEF 12/9
Production, business sectors pay more tax
The production and business sectors paid VND235.5 trillion (US$11 billion) in tax in the first eight months this year, jumping 14.6 per cent from last year's figure, according to the Taxation Department.
During the first eight months, state-owned enterprises paid VND95.1 trillion ($4.5 billion) in tax, up 0.6 per cent year-on-year. However, some key sectors saw a reduction in tax revenue due to the economic downturn - including state-owned banks which fell 85.7 per cent.
Corporate tax revenue from the four state-owned banks; VietcomBank, VietinBank, Agribank and BIDV, plunged 15.1 per cent to VND3.46 trillion ($165 million) while Viet Nam Coal and Mineral Industries Group (Vinacomin) measured a year-on-year decrease in tax collections by 12 per cent to VND3.85 trillion.
Private sector tax revenue also came in at a low VND69.2 trillion , the department said, while other key enterprises saw a reduction of between 31.6 per cent and 69.7 per cent in taxes paid.
The department said implementation of Decree 02/NQ-CP had reduced tax revenues by VND3.34 trillion ($159 million) against last year's figures, by extending tax payments and reducing the tax burden for enterprises.
Meanwhile, initial figures had forecasted Viet Nam to collect up to VND814 trillion ($38 billion) in tax revenue this year.
Kumho plans $100m spend in Viet Nam
Kumho Tire, a subsidiary of Korea's Kumho Asiana Group, plans to invest around US$100 million in a factory in southern Binh Duong Province, Kumho Asiana Group chairman Park Sam-koo told the Korea Times on Sunday.
He disclosed the plan on the sidelines of a business conference in Ha Noi during a state visit by President Park Geun-hye.
This was the first time the group revealed details of a planned investment in Viet Nam. The investment is expected to increase the company's Vietnamese plant's annual production from 3.3 million to 5 million tires.
"We are mulling over enlarging the facilities of our Vietnamese factory beginning next year. The amount to be spent is in the neighbourhood of $100 million," Park said.
"We will strengthen our footing in Viet Nam, where our affiliates in construction, airlines and express buses have operations."
Park regards Viet Nam as a significant target market for Kumho and has been a strong proponent of cranking up the output of the country's Kumho Tire plant.
Experts said Park's decision made sense because boosting production in Viet Nam would help meet rising demand for quality tires in China, just across the northern border.
HCM City hosts food, beverage exhibition
The 17th International Food&Processing&Packaging Technology Exhibition (2013 Vietfood&ProPack Viet Nam) is taking place at the Tan Binh Exhibition and Convention Centre in HCM City.
The four-day event has attracted nearly 300 domestic and foreign exhibitors from 18 countries and territories who will set up 350 booths.
Food and beverages, seafood, diet and healthy foods, food packaging materials, food addictive and restaurant, hotel, and catering equipment will be on show at the annual event that is expected to attract more than 10,000 visitors.
Exports to Mexico earn $1.37b in seven months
Viet Nam's export earnings from Mexico experienced a strong increase of 53 per cent in the past seven months to US$1.37 billion, according to the Industry and Trade Information Centre under the Ministry of Industry and Trade.
During the reviewed period, mobile and components saw the highest turnover growth at 176 per cent to $572 million, followed by computers, electronics and components at 84 per cent to $138 million.
Exports of machinery and equipment dropped by 13 per cent to $118 million.
The three groups of products currently made up 60 per cent of Viet Nam's total export value to Mexico. Other key Vietnamese exports to the market included coal, rubber, chemical products, garments and coffee.
Tra fish exports to EU fall over eight months
Viet Nam's tra fish exports to the EU reached an estimated US$237 million over the past eight months, down 13 per cent year-on-year, according to the Viet Nam Association of Seafood Exporters and Producers.
The unsatisfactory performance was attributable to the falling price of tra fish on the global market, the association said, adding that tra fish has sold somewhere between $2.4-2.6 per kilo in the second quarter, down 10-20 per cent compared to prices in previous years.
Total seafood exports to the EU in the past eight months hit around $720 million, down 4.6 per cent, mainly due to a significant slump in tra fish exports which used to account for 35-40 per cent of the total seafood export earnings from the EU.
Dong Nai starts $52m industrial zone
Long Duc Industrial Zone (IZ), backed by VND1.1 trillion (US$52.3 million) of investment, was inaugurated in the southern province of Dong Nai on Monday.
Spanning a total area of 282,80ha, the IZ is a joint venture between three Japanese groups – Sojitz Corporation, Daiwa House Industry and Kobelco Eco-Solution – plus Dong Nai's Donafoods Company.
Since the beginning of this year, the province's IZs have attracted approximately $642 million in investment, fulfilling 64 per cent of the target set for this year.
Of the total, over $293 million came from newly-licensed projects, while the remainder came from existing projects that increased capital.
VCB's ATM fees soar up by 67%
Anyone who makes a money transfer via Vietcombank's local debit card now has to pay a VND5,000 (23 US cent) fee per transaction, an increase of 67 per cent against last month.
This is the second stage of fees from Vietcombank that is making the trip to the ATM so costly.
The fee excludes a value-added tax of 10 per cent on each transaction using a debit card, an electronic card issued by a bank which allows bank clients access to their account to withdraw cash or pay for goods and services.
"For one transfer, it is not really a matter. But when added together, Vietcombank has a million card holders, each of them do at least one transfer per month, Vietcombank will get billions of dong," said Viet Thang, a Vietcombank debit card holder in Ha Noi.
"They should improve service quality along with the surcharge."
Another Vietcombank's customer, Vu Quang Dong, added that: "An ATM card is my access to my monthly salary. I have to either withdraw cash or transfer money to do business. Then, there is no way to avoid these kinds of fees at all."
The new policy came after Vietcombank six months ago applied surcharges of VND1,000 for internal withdrawals and VND3,000 for external withdrawals, the highest fees allowed by the State Bank of Viet Nam.
Vietcombank kept saying that providing good maintenance and administration for their ATM system was expensive.
Consequently fees are generally going up and up, as banks look to offset the higher costs of operating the machines and declining ATM fee revenue in the wake of regulations restricting certain fees.
According to the State Bank of Viet Nam statistics, there are about 50 million ATM cards and 15,000 ATMs installed. Vietcombank is one of the six major shareholders - namely Agribank, Vietinbank, Vietcombank, DongA, BIDV and Techcombank - owning 8,200 ATMs.
These big players are on the way to getting fees increased.
Da Nang, Shandong link up
The central city of Da Nang and the Chinese province of Shandong signed a Memorandum of Understanding (MoU) on tourism cooperation and the investment environment in Da Nang yesterday.
The two cities set up a relationship in 1994, but trade and investment progress has failed to reach its full potential.
The MoU will create more favourable conditions to help businesses from the two cities promote cooperation in investment, trade, education, agriculture, industry and tourism.
Japanese investors pour another US$166 mil into HCM City
The HCM City’s People’s Committee granted investment licenses to a number of new Japanese projects worth US$166 million in the city’s industrial parks (IPs), and export and processing zones (EPZs) on September 10.
They include one project from Unika Group in Hiep Phuoc IP for small and medium-sized (SMEs) and two other projects from Sai Gon Precision Co,Ltd in Linh Trung 2 EPZ and Nidec Tosok Akiba Vietnam in Tan Thuan EPZ.
Mayor Le Hoang Quan highlighted Sai Gon Precision Co, Ltd and Nidec Tosok Akiba Vietnam’s contribution to Vietnam’s investment in hi-tech application. In addition, the formulation of a project to build a Vietnam-Japan Industrial Area in Hiep Phuoc Industrial Park has marks an important step toward attracting more Japanese hi-tech investors in the near future.
At present, more than 100 Japanese businesses are operating in HCM City with a total capitalization of US$1.270 billion, mostly in the fields of mechanics, electricity and electronics.
Belarus, Vietnam eye US$500 million trade in 2015
Vietnam and Belarus will effectively implement high-level agreements to raise two-way trade to US$500 million by 2015.
The agreement was reached at the 10th meeting of the Vietnam-Belarus Inter-governmental Committee for Economic, Trade and Scientific and Technological Cooperation, held in Minsk on September 9-10.
The Vietnamese delegation was led by Vietnamese Deputy Minister of Industry and Trade Le Duong Quang and Belarus Deputy Minister of Foreign Affairs Valentin Rybakov.
They said both sides will examine the possibility of increasing investment in and encourage their businesses to invest in key areas of their strength.
They discussed specific measures to improve the efficiency of cooperation in agriculture, industry, civil construction, finance-banking, science-technology, health care, and education.
Quang and Rybakov agreed to expand cooperation in other areas such as information and communications technology (ICT), culture, sports, and tourism, as well as cooperation between the two countries’ localities.
Vietnam and the Customs Union (Russia, Kazakhstan and Belarus) conducted a new round of free trade agreement (FTA) negotiations in Minsk on September 9.
A Vietnam-Belarus business forum is scheduled to take place on September 11.
The 11th meeting of the Committee will be held in Hanoi in the second half of 2014.
Vietnam flaps its air-transport wings
Vietnam is pursuing its most flexible air transport policy in order to encourage more air carriers to operate in the country, a HCM City conference heard on September 10.
The conference on promotion for air services was organized by the Ministry of Transport, the Civil Aviation Authority of Vietnam (CAAV) and the Airport Corporation of Vietnam.
The ministry said that the domestic air transportation market is growing strongly in a healthy environment.
Vietnam will continue liberalising its aviation market gradually and sign bilateral and multilateral air service agreements as it further connects with aviation markets in the region and the world, it said.
“Foreign airlines will be encouraged to operate in Vietnam, which will enhance the competitiveness of Vietnamese air carriers,” it added.
A major focus of the conference was to encourage airlines to operate from and to Phu Bai (Thua Thien-Hue province), Cam Ranh (Khanh Hoa province), Lien Khuong (Lam Dong province), Can Tho (Can Tho City) and Phu Quoc (Kien Giang province) international airports.
Towards this, their capacities and advantages will be highlighted and preferential policies issued, delegates agreed.
“The red carpet is being laid out to welcome all airlines to Hue, Nha Trang, Da Lat, Can Tho and Phu Quoc. The result of the operations to and from these airports show that the aviation market in these areas is soaring,” said Vo Huy Cuong, Deputy Head of CAAV.
“The load factors are very high (over 80%), with that on the flights to Phu Quoc reaching 90%,” he added.
These five airports have many opportunities to develop as they have the common characteristics of being located in densely populated areas of the central coastal, Central Highlands and Mekong Delta regions, home to famous tourist destinations, great economic potential and rapid development of air transportation.
Delegates agreed that the airports have not made full use of the regions’ advantages.
Until now, only Cam Ranh Airport has international services operated by Vietnam Airlines to Moscow and non-scheduled services operated by Russian and Korean airlines.
Can Tho Airport only receives a few charter flights transporting Taiwanese passengers at certain times of the year.
“It means that the actual operations of these five international airports do not match local potential and preferential aviation policies that the Government has issued,” said Le Dinh Tho, Deputy Minister of Transport.
CAAV introduced several policies and measures to strengthen the operations of these airports. There is “no capacity limitation on the third, fourth and fifth traffic freedom rights, even seventh traffic right for all cargo services,” it noted.
It said all co-operative arrangement forms, including “joint ventures, code-sharing and all types of operations including passenger/cargo scheduled and non-scheduled services will be allowed.”
The Government will create a flexible policy for air navigation service charges and airports charges suitable for airlines operating at these five airports.
In specific cases, CAAV can consider and recommend to the appropriate authorities that airlines are given further privileges based on the business they bring to the airports.
Vietnamese air carriers are now operating services to 21 airports and aerodromes located in the plains, highland areas, border regions and islands from the north to the south of the country.
To date, there are 51 international routes established to and from Vietnam, and four Vietnamese air carriers operate 40 domestic routes.
In addition to the three major international airports of Noi Bai, Tan Son Nhat and Danang, the other five international airports have been rebuilt and expanded in order to increase their capacities for scheduled operations in general and international operations in particular, the conference heard.Singapore businesses increase trade with Vietnam
A leading Singaporean executive has expressed his belief that the September 11-13 visit to Vietnam by Prime Minister Lee Hsien Loong will help promote trade ties between the two countries.
In a recent interview granted to a Vietnam News Agency correspondent, Chan Chong Beng, chairman of Singapore’s Association of Small & Medium Enterprises, said the successful operation of the four Vietnam-Singapore Industrial Parks (VSIP) shows Vietnam is an ideal destination for Singapore’s small and medium businesses.
Chan said Prime Minister Lee will attend a ground-breaking ceremony of the fifth VSIP in Vietnam during the visit.
He said Singaporean companies have plenty of opportunities to tap the Vietnamese market, especially in the areas of tourism, food processing, or garment making.
He quoted a recent survey, saying HCM City is an optimal choice for Singaporean small and medium businesses to carry out their investment strategies.
The executive also suggested Vietnamese businesses use Singapore as a gateway to penetrate other countries in the world.
Shiseido Vietnam builds US$30 million plant in Dong Nai
Shiseido Vietnam began constructing its second Dong Nai province plant on September 10, a project boasting total investment capital of US$30 million.
The company has also poured funding into equipment upgrades that will fuel production expansion and the planned exploration of European export opportunities.
The second plant is scheduled to enter operation in 2015 with a production capacity triple that of its first plant and employing an additional 350 workers.
A representative from the Dong Nai Provincial Industrial Zone Management Board said Shiseido Vietnam’s expansion will encourage Japanese businesses to consider increasing their own investments in the province. Job generation will also assist the local industrialisation and modernisation process.
Shiseido Vietnam is a Japanese company specialising in cosmetics and skin and hair care product manufacturing.
In 2008, it spent nearly US$50 million on its first Dong Nai plant. It sells more than 22,000 products, exports to 11 Asian countries, and employs over 400 staff.
Nike shoe manufacturer expands operation in Vietnam
Chang Shin Vietnam Co. Ltd, which manufactures Nike shoes for export, has announced it will expand its Long Thanh district factory in Dong Nai province to cash in on bulk orders next year.
Chang Shin Vietnam General Director Woo Bang said the US$12 million expansion project is expected to generate an additional 1,800 jobs for local people.
He noted that in defiance of the global economy’s sluggish recovery, Nike Group still persisted with transferring its Indonesian and Chinese export production orders to Vietnam.
Chang Shin Vietnam Co. Ltd expects its orders to rise 40% in 2014 and continue to climb over the following years.
Chang Shin Vietnam Co. Ltd has expanded its production scale eight-fold since its establishment 18 years ago.
Its factories currently employ more than 20,000 labourers.
Despite 2013’s challenges, the company still believes it will successfully export 20 million pairs of shoes, earning estimated revenue of around US$340 million.
Int’l seminar on production management
A selection of professors, experts, and investors from Vietnam and Japan joined Eastern International University (EIU) students at a September 10 production management seminar in Binh Duong.
They discussed issues including global company and production strategies, international supply chains, social and environmental responsibility, risk management, information technology systems, and production and technology management relationships between Japan and Southeast Asia.
The seminar links schools and businesses, particularly Japanese enterprises operating in Binh Duong, and creating employment opportunities for EIU students.
Japan is one of both Binh Duong’s and Vietnam’s most important trade partners and investors. The seminar is expected to encourage even more investment from Japan.
Japan ranks second among Binh Duong’s 35 foreign investors with 170 projects worth US$3.5 billion.
The province boasts 2,174 foreign direct investment projects capitalised at US$18.5 billion.
Vietnam eyes pharmaceutical cooperation with Pakistan
Vietnam expects to increase cooperation in pharmaceutical manufacturing with Pakistan following a joint exchange in HCM City on September 10.
Statistics show Vietnam spent US$3.5 billion on importing pharmaceuticals and materials in 2012. Its major pharmaceutical retailers include France, India, the Republic of Korea (RoK), and Thailand, and it sources most of its pharmaceutical materials from China, Spain, Austria, the RoK, and France.
The Vietnamese pharmaceutical industry’s leap from an average of 13.5% growth over 2008–2011 to 2012’s 25% growth creates lucrative opportunities for cooperation with foreign suppliers, including Pakistan.
Pakistani Embassy in Vietnam Representative Aizaz Khan summarised recent successes in reinforcing the two countries’ trade relationship.
Vietnam and Pakistan operate direct flight routes and are home to each other’s bank representative offices in an attempt to reduce transport costs and increase trade efficiency.
Two-way trade has increased considerably over the years, reaching US$96.2 million in the first four months of 2013 alone.
Vietnamese commodities such as tea, cashew nuts, pepper, steel, and rubber are already favourites with Pakistani consumers, and emerging products like automobiles and spare parts, handicrafts, and seafood are also becoming more popular.
The Vietnamese and Pakistani business communities have stepped up their international market surveys, export diversification, and cooperation in investment, industry, and farm product processing.
During the exchange, a Pharmacy Council of Pakistan representative briefed participants on the development of the South Asian country’s pharmaceutical sector and incentives for foreign investors.
The exchange was jointly held by the Vietnam Chamber of Commerce and Industry (VCCI) and the Trade Development Authority of Pakistan (TDAP).
Vietnam's seaport system to be adjusted
The Vietnam Maritime Administration has submitted to the Ministry of Transport a report on the adjustment of the country’s seaport system planning by 2020 and orientations towards 2030.
Accordingly, Van Phong port will be an international one. Besides, those of Ho Chi Minh City will be adjusted as follows: Hiep Phuoc port on the Soai Rap River will be the main to serve the Mekong Delta, and Cat Lai port area on the Dong Nai River will be the main for containerized cargo.
Meanwhile, wharfs on the Saigon and Nha Be rivers and docks on the Saigon river will gradually be reallocated. New stations will be built on the Nha Be river to receive international cruisers, while Vung Tau port will be an international gateway.
Vietnam, RoK SMEs boost cooperation
The Korea Federation of Small and Medium Business (KBIZ) is strongly committed to promoting cooperation between small and medium-sized enterprises (SMEs) of the two countries for mutual benefit.
This was declared by KBIZ Chairman Kim Ki-m Un at a meeting with the Vietnam Chamber of Commerce and Industry (VCCI) in Hanoi on September 9 within the framework of RoK President Park Geun-hye’s visit from September 7-11.
In reply, VCCI Chairman Vu Tien Loc stressed the importance of SMEs in economic development and the need to strengthen bilateral cooperation with a focus on high-tech and value-added products and support industries.
He expressed his hope that the VCCI and KBIZ will act as a bridge between the two business communities.
On this occasion, the two organisations signed a cooperation agreement providing a legal framework for closer cooperation in trade, investment and support industries.
Competitive power market revenue hits VND50 trillion
Vietnam Electricity Group (EVN) said it had paid more than VND50 trillion to buy about 50 billion kWh of electricity on the competitive power market between July 2012 and June 2013, which is just over one-third of the total power output.
In its report, EVN said about 37% of the total output of local electricity plants is now purchased via the competitive tenders. In the one-year operation of the competitive market, the total power supply of participating hydropower plants was some 6.8 billion kWh while that of thermo-power plants was roughly 44 billion kWh.
Up to 89 plants with a total designed capacity of 25,565 MW now are offering prices on the competitive market except for small hydropower plants. Whether these plants are chosen as power suppliers at certain times depends on their offered prices and the demand in the meantime.
Apart from 37% of the total power output sold to EVN, the remaining 63% generated by local power plants with a total capacity of nearly 16,042 MW is supplied to the national grid via the National Load Dispatch Center.
These power plants cannot join the competitive power market due to several reasons, including failure to build up the information technology facility for the competitive market, failure to make registrations to join the market or being rejected by the buyer.
EVN had paid more than VND50 trillion to power plants in line with the new mechanism, nearly VND188 billion higher than calculated based on the old way. The average competitive power price is some VND993 per kWh, roughly VND4 higher than that of the old one.
The highest price the buyer had paid suppliers in that one-year period stood at VND1,015 for one kWh, which decreased to only VND846 at certain times.
Power prices stayed high between February and May and declined from July to October, indicating the low competitiveness in the power market.
Over 60% of the total output of the local power supply system is not sold on the competitive market at present. Therefore, how this group of power plants is operated will obviously affect the other group, since they all are in the national power system.
Furthermore, the power prices paid by EVN to competitive bidders are also heavily dependent on the operations of the non-participating power stations.
Power revenues up 22% after price hikes
Revenues of the power industry from power selling totaled nearly VND112.2 trillion from January through August, surging 21.8% year-on-year, the Ministry of Industry and Trade said in a report on the country’s trade and industrial situation released on Tuesday.
In August alone, the power industry earned roughly VND15.3 trillion from power selling, up 15.24% year-on-year. This is largely due to the power price hike of 5%, pushing the average power price to VND1,508 per kWh from the previous level of VND1,437.
Power consumption by industrial and construction industries surged 10.6% year-on-year, accounting for up to 51.9% of the total, while power supply for agriculture-forestry-fishery sectors marked a slight rise of 1.6% or a proportion of 1.2%. Meanwhile, power supply for trading activities and hotels and restaurants grew 8.4%, representing about 5% of the total, and power volume consumed by management and residents picked up 8.1% and accounted for 37.2%.
Overall, total power consumption in the first eight months of the year was estimated at around 76.2 billion kWh, growing 10% year-on-year.
EVN has already paid off the principal and interest sums and the group has also contributed investment capital to power supply development with around VND11.9 trillion, meeting 38.87% of the targeted figure, according to the ministry.
Samsung Group to plug into Vietnam energy gap
After committing $4.5 billion towards electronic manufacturing projects in Vietnam, South Korea’s Samsung Group is now expanding its footprint in the Southeast Asian country’s power sector.
The Ministry of Industry and Trade’s (MoIT) General Department of Energy, in a document sent to central and southern provinces that was seen by VIR, said that Samsung Group would conduct a survey at five power projects in Nghe An, Ha Tinh, Quang Binh, Hau Giang and Kien Giang to invest into one of them.
The projects are 1,200 MW Quynh Lap 2, 2,400 MW Vung Ang 3, 1,200 MW Quang Trach 2, 2,000 MW Song Hau 3 and 2,000 MW Kien Luong. All of these projects are included in the national electricity development master plan for the 2011-2020 period.
The document comes one month after Deputy Prime Minister Hoang Trung Hai directed the MoIT to research possible locations for Samsung Group to build a thermo power facility in Vietnam.
Samsung Group could invest in a power project in Vietnam under a build-operate-transfer (BOT) model, according to an anonymous source from the MoIT. The total estimated capital investment that Samsung would commit to this power plan is still secret.
With electricity consumption rising at about 12 per cent a year, the nation’s current power plant projects are not keeping pace with demand peaks. The dry season is especially a problem due to Vietnam’s dependence on hydro-power plants, which make up 40 per cent of the country’s generation capacity.
Power generation capacity of all the electricity plants in Vietnam is expected to increase to about 75,000MW by 2020 and 146,800MW by 2030.
In a related development, Thailand’s EGATI has secured in-principle approval from the Vietnamese government to invest in a 1,200 MW thermal power plant in the central province of Quang Tri.
Since Vietnam opened its doors to foreign investors, the government has licensed only four foreign-invested BOT power projects. Low selling prices regulated by the government is a major reason behind private investors’ reluctance to make investments in the local power sector.
Although Vietnam’s economy has slowed down, electricity demand in the first half of this year still rose 11 per cent year-on-year. The MoIT estimated the demand would increase by 11-13 per cent next year.
Price policies stun investors
The absence of a regulatory framework and the low selling price of electricity are discouraging investors from building waste-to-power generation plants in Vietnam, experts say.
Nguyen Duc Cuong, head of the Ministry of Industry and Trade’s Institute of Energy, said that although Vietnam had potential for developing the renewable power energy, it still lacks incentive policies to attract investors in this field.
Meanwhile, a major obstacle for investors considering waste-to-power plants is the low selling price of electricity. Under the local rules, private power producers have to negotiate with state-owned Electricity of Vietnam (EVN), the country’s sole power distributor, over the average selling price of 7.8 US cents/kWh, the same as those who are interested in wind power projects.
Cuong told VIR that there was not a detailed framework for waste-to-power generation projects in Vietnam.
Yoshioka Toru, director of Hitachi Zosen said that the investment in waste-to-power generation plants was very high and investors would deal with very small margins if they built wind power plants in Vietnam due to the low selling price of electricity.
Hitachi Zosen and state-run Hanoi Urban Environment Company are co-building the first waste-to-power generation plant using Japanese official development assistance fund in Vietnam. It is located in Hanoi’s Soc Son district.
The plant is scheduled to become operational in 2014 with the capacity to treat 75 tonnes of waste, or 30 per cent of Hanoi’s industrial waste, daily. The plant would use advanced technologies from Japan and the subsequent energy produced would be harnessed to generate power for about 4,500 households and a neighbouring industrial park.
Ho Chi Minh City is also calling for investments in modern waste treatment technology, particularly garbage incineration for power generation.
Australia’s Trisun International Development last year announced an investment fund of $400 million in the construction of a waste-to-power facility in Ho Chi Minh City. However, the biggest obstacle this project faced was the proposed sale rate of 12 cents per kWh, which is much higher than the 7.8 cents per kWh level EVN may offer. Therefore the project has not yet made it off paper.
David Duong, general director of Vietnam Waste Solutions, the developer of a $400 million waste-to-power complex in Ho Chi Minh City, said that one reason for the delay of waste-to-power plants in Vietnam was power selling price negotiations.
Duong said his firm had suggested a selling price of 9.5 US cents per kWh, equal to the cost of production, but the bid price was only 7.5 per kWh.
Nguyen Trung Viet, head of Ho Chi Minh City Department of Natural Resources and Environment’s Solid Waste Management Office shared in a recent waste treatment forum in Ho Chi Minh City that several waste-to-power projects were approved in the second city four or five years ago, but the investors had since delayed their implementation.
Citing International Energy and Environment Company (IEE) as an example, Viet said the US investor was granted an investment certificate for a waste-to-energy project with a daily capacity of 1,000 tonnes five years ago. However, the project is static due to financial distress.
Meanwhile, the local firm Tam Sinh Nghia several years ago asked for permission to carry out a waste-to-power project with the processing capacity of 2,000 tonnes per day. The project, however, has not yet to take off the ground.Deputy PM aids Tuy Hoa Airport take-off
Deputy PM Nguyen Xuan Phuc yesterday cut the ribbon to inaugurate the newly renovated Tuy Hoa Airport in the central province of Phu Yen .
With a total investment of VND400 billion (nearly US$19 million) from Vietnam Airlines, the airport now has a 4,000sq.m terminal that can accommodate 300 passengers and two A321 aircraft at a time. It can serve 550,000 passengers per year.
The airport is expected to meet rising demand for air transportation and boost socio-economic development in Phu Yen.
According to Vietnam Airlines, the number of passengers at Tuy Hoa Airport rose 3.5 times and the number of flights serviced by 4 times between 2008 and 2012. The airport welcomed 63,000 passengers last year.
The number of passengers at the Tuy Hoa Airport is expected to increase by 10 per cent this year.
Speaking at the event, Deputy PM Phuc said the newly renovated airport will significantly contribute to the province's socio-economic development, particularly of Tuy Hoa City. The airport will be a major boost for the city's tourism industry, he said.
VN exports to Africa, Asia surge in H1
Exports from Viet Nam to Africa, South Asia and West Asia in the first seven months of this year totalled US$6.5 billion, a year-on-year increase of nearly 50 per cent.
Exports to West Asia, making up 55 per cent of the country's total exports to the mentioned markets, recorded a rise of up to 71.8 per cent, while those to South Asia were up 47.1 per cent and those to Africa were higher by 7.3 per cent.
The major products Viet Nam exported to those markets were mobile phones, rubber, fibre, coffee, seafood and computers.
Viet Nam imported a total of $3.5 billion in the seven-month period, a surge of 25.6 per cent over the same period last year.
Tien Giang invests in fruit plantations
Southern Tien Giang Province will invest VND760 billion ($36.19 million) in developing infrastructure to plant star apples and dragon fruit.
The fund would cover the development of an irrigation system, roads and electricity networks for two star apple cultivation areas in Chau Thanh and Cai Lay districts and for a dragon fruit area in Cho Gao District. The fruit would be intended for export.
The province plans to expand star apple cultivation areas from the current 3,900ha to 5,000ha and dragon fruit growing areas from 3,000 to 4,600ha by 2015.
Enterprise association opens in Japan
The Government of Japan and the Vietnamese Embassy to Tokyo recently recognised the legal entity of the Association of Vietnamese Enterprises in Japan.
The association now includes more than 30 Vietnamese enterprises operating in many fields, including medical equipment production, software and aviation.
The association will be officially recognised on October 13.
New petrol importers handed quotas
The Ministry of Industry and Trade on Sunday imposed minimum petrol import quotas for two new wholesale distributors, to ensure sufficient supply for the year.
The Trading and Transport Materials Import Export Joint Stock Company in northern Hai Phong Port City and the Hung Phat Trading Co in central Quang Binh Province will import a minimum of 30,000cu.m of petrol this year in accordance with their licences as wholesale distributors.
The ministry said the importers would not be allowed to import less than the allocated minimum quota in order to ensure a well-regulated supply and maintain minimum reserves.
The country has around 15 petroleum wholesale distributors currently.
Earlier this year, the leading national petrol distributor, Petrolimex, was granted the largest import quota and must import a minimum of 5.18 million cubic metres of petroleum products.
PetroVietnam Oil Corporation (PV Oil) has the second highest quota of one million cubic metres, with Saigon Petro required to import 536,000cu.m.
Petrol wholesalers wanting to adjust their allocated quotas are required to report to the ministry before September 30.
Fuel imports in the first eight months of the year declined 27.4 per cent to US$4.6 billion, according to the General Department of Customs.
The ministry last year cut import quotas for 10 distributors as the economic slowdown depressed domestic demand. The quota for Petrolimex went from 5.8 to 4.9 million tonnes, while PV Oil's quota was lessened by 336,000 tonnes and Petec's by 315,000 tonnes.
Fuel imports last year reached more than 8.8 million tonnes, with a value of $8.6 billion; down $953 million from the previous year, according to customs figures.
S Koreans invest $1.5b in northern economic zone
South Korea's LG Electronics has been granted a licence to invest US$1.5 billion into a new manufacturing complex in Dinh Vu–Cat Hai Economic Zone in the northern port city of Hai Phong.
The project will be developed on a 10ha site in Trang Due Industrial Zone, a complex comprising industry, a township, recreation facilities and service parks on a total area of 600ha.
The project will be divided into two stages. The first stage will be developed in four years with $510 million. The second stage will involve spending $990 million over five years.
The committee hopes the project will help the zone attract more investors, particularly LG partners and satellite parties; and create about 20,000 jobs.
LGE will take advantage of new tax incentives available from the middle of August. They include corporate income tax of only 10 per cent in the first 15 years of operation.
VN seeks to strengthen economic ties with Shandong
Viet Nam welcomes greater trade and investment ties with firms from the Chinese province of Shandong, Deputy Minister of Industry and Trade Nguyen Cam Tu said at a seminar yesterday.
He said Viet Nam was a dynamic developing market with high stability and safety, citing the country's advantageous geographic location, diverse and plentiful natural resources, a young and diligent workforce.
Viet Nam is integrating deeply into the world economy, he stressed.
As such it is a promising place for investing and trading for Chinese enterprises in general, and Shandong enterprises in particular, he added.
Xia Geng, deputy chairman of Shandong, who is heading a delegation of 20 businesses on a five-day visit to Viet Nam, expressed confidence that firms from both countries would intensify cooperation in tropical agricultural produce, rubber, garments, electricity, and construction.
Yesterday's seminar was attended by 40 Vietnamese enterprises.
Tu suggested that Shandong's authorities encourage the province's major enterprises to invest in and import goods from Viet Nam, create advantageous conditions and support Vietnamese enterprises in participating in trade promotion events held in the Chinese province.
Also yesterday, the deputy minister and deputy governor witnessed the signing of agreements worth a total of US$200 million related to export of agricultural produce, building thermal power plants, making tyres, building logistics and cold storage facilities and several other deals.
They also inaugurated the Sailun Industrial Park Shandong in southern Tay Ninh Province.
In a meeting before the seminar, Tu and Xia Geng reviewed trade cooperation between Viet Nam and China in general and with Shandong in particular.
They said remarkable results have been achieved, but much more could be done.
Last year, two-way trading turnover between Viet Nam and Shandong Province reached $2.42 billion for a year-on-year growth of 17 per cent.
Viet Nam exported goods worth $1.14 billion, up 24.9 per cent year-on-year, while its imports went up 10.7 per cent to $1.28 billion.
In the first half of this year, the total trading turnover reached $1.25 billion, up 4.6 per cent, of which Viet Nam's exports were worth $510 million, down 24.9 per cent year-on-year, while its imports rose 28.1 per cent to $740 million.
Phu Yen Province vows space for new refinery
Central Phu Yen Province plans to hand over land to the investor of the Vung Ro oil refinery project at the end of the year.
Le Van Truc, deputy chairman of the Phu Yen People's Committee, said that by the end of this month, the province would complete a compensation plan for people living on the land that will be used to build the refinery.
Deputy Prime Minister Nguyen Xuan Phuc said while working with the local authorities on Sunday that the province should hand over land to the investor as soon as possible.
In addition, he said, the investor should quickly complete all the procedures required to start construction.
The construction is expected to start at the end of this year and to be completed in four years.
Earlier, the province planned to give the Bai Goc port to the Vung Ro Oil and Gas Ltd Company so it could develop the port, which would benefit not only the refinery but also the Nam Phu Yen Economic Zone, Truc said.
The province allowed the oil refinery project to increase its investment capital from US$1.7 billion to $3.18 billion, which would double the oil refinery's annual output to eight million tonnes.
The plant would refine products from crude oil, including polypropylene, benzen, toluene, xylene, liquefied petroleum gas (LPG), Ron 92 petrol, Ron 95 petrol, diesel oil and fuel oil for both domestic and foreign markets.
Since the project was licensed in 2007, the investor – British Virgin Islands's Technostar Management Ltd – decided to increase investment based on market demand.
The oil refinery would be built in Hoa Tam Industrial Zone (part of Nam Phu Yen Economic Zone) on an area of 538ha, which includes 404ha for the plant itself and 134ha of land for the port.
The project is expected to help the central province attract other projects to the Hoa Tam Industrial Zone, especially those related to petro-chemistry and oil refinery support industries.
Besides supplying a significant volume of petrol products to the domestic market and thus reducing the country's dependence on petrol imports, the project is also expected to contribute roughly $111 million yearly to the State budget and generate about 1,300 jobs.
Representatives from the Ministry of Planning and Investment recommended the investor be given incentives such as exemptions from land use fees and crude oil import taxes.