Steel prices, output to increase in 2011

Both the domestic steel price and output would increase in 2011, said Pham Chi Cuong, chairman of the Viet Nam Steel Association (VSA), at a conference on the tasks of the Viet Nam Steel Corporation in 2011 on Monday.

Cuong said in 2011, Viet Nam had a target of 7-7.5 per cent GDP (Gross Domestic Products) growth which meant many large investment projects would be carried out, including infrastructure construction, civil and industrial works.

"As a backbone construction material, steel production and consumption will have to increase in order to meet growing demand from the construction industry," Cuong said.

According to the VSA, steel output and consumption in 2011 will increase from 8-10 per cent compared to the previous year, and while production and consumption of the material is expected to reach 6 million tonnes this year, Viet Nam is expected to be able to produce only 60 per cent of that total, and will have to import a further 2 million tonnes.

However, if power supply was not guaranteed, the production of steel ingots, which consumes five times more power than steel production (about 500-600 kWh/tonne), would decline, Cuong said, noting businesses would then be forced to import more ingots to meet domestic demand.

He also said that steel prices were likely to increase this year.

"The prices of two basic materials needed for steel production - coal and iron ore - have risen sharply since December, due to restrictions from major exporting countries such as Brazil, Australia, India and China," Cuong said.

With such increased input costs, domestic steel prices would inevitably rise this year, he said, adding that scrap steel would also increase by US$100 per tonne from this month.

Viet Nam Steel Corporation (VNSteel) deputy general director Le Vu Hung said the price hike would also come as a result of internal factors such as high borrowing interest rates, fluctuating foreign exchange rates, and the rising price of electricity in 2011.

Hung said the corporation would enhance investment and speed up project implementation to ensure production would meet market demand, as well as boost exports.

In 2011, VNSteel expects to produce about 2.9 million tonnes of rolled steel and 1.25 million tonnes of steel ingots.

Last year, the corporation's total industrial production value reached more than VND12.36 billion ($588.7 million), a year-on-year increase of 5.4 per cent and surpassing annual target.

Its production reached almost 2.4 million tonnes, accounting for 48.8 per cent of the VSA's total output, and steel consumption reached over 2.38 million tonnes, equivalent to 50.7 per cent of the VSA's total figure.

Lack of transparency hits property floors

Recent Ministry of Construction statistics show that only 15 per cent of real estate transactions take place on transaction floors.

This means that the development of the floors has not yet met the expectation of a real estate market seeking transparency.

According to the ministry, the market is plagued by poor transparency.

This is one of the main reasons for the retarded development of the domestic real estate market.

Land and home buyers are keen to have clear information about the house or land they want to buy.

To achieve this, the establishment of a trading floor system under the strict control of authorised agencies has been proposed.

According to the Department of Housing Administration and Real Estate under the Ministry of Construction, the country has a total of 600 real estate transaction floors.

Despite this, the number of transactions remains very low.

Total real estate sales nation-wide through these floors totalled 3,679, - 327 in Ha Noi and 3,352 in HCM City.

Many investors have sought to avoid trading through transaction floors by exploiting legal loopholes. As a result the number of deals made through the transaction floors remains low.

Director of Housing Administration and Real Estate Nguyen Manh Ha said the department requested the floors to report their performance from the beginning of 2010.

Only 20 per cent have so far complied.

Deputy Minister of Construction Nguyen Tran Nam acknowledged that agencies had not fined violators.

He also admitted that administrative procedures to set up real estate floors were too simple.

He said that in the current context, authorised agencies needed to gradually improve the quality service provided by trading floors so as to eliminate those that were efficient.

Regular inspections were not sufficient to deal with violations by investors and trading floors operators.

Director Nguyen Manh Ha said that current laws could not regulate all the negative aspects of real estate services.

He said it was clear that the legal system lacked a standard business practice for real estate services.

Ha added that the lack of a common standard had led to a disparity in the market and that people had little faith in real estate transaction floors.

Illegal gas traders use counterfeit brand names

Many gas companies in the south are using counterfeit brand-names and not filling tanks with the maximum volume of gas, according to authorities.

The Viet Nam Gas Association's Southern Gas Branch said agencies concerned had discovered 17 incidents of illegal sales of gas between November 2009 and October 2010.

The agencies collected 1,202 gas canisters with counterfeit names.

Authorities said many companies had also violated city regulations by underfilling the tanks.

The HCM City Market Management Agency recently discovered another case in which the company had been cheating customers by filling the tanks with less gas and counterfeiting the brandname of Sai Gon Petro.

Market management agents discovered a man allegedly linked to the case and raided his house, where they found a 12-kilo gas canister with the brandname V-gas. The canister had been filled with only six kilos of gas.

They said the man had made and printed a total of 60 kilos of leaflets at his house.

The leaflets promoted a counterfeit gas that used the prestigious brandname Sai Gon Petro.

In another case, police of Binh Thuan Province in central Viet Nam seized a truck carrying 238 12-kg gas canisters and 48-kg gas canisters of the Thai Duong Trading Ltd Company in the province.

Police said all the gas canisters had counterfeit brand names and were not filled to the regulated amount.

The police of Binh Phuoc Province have imposed penalties on Hoang Hai Company, which transported 96 gas canisters without any information about their origin.

About 24 stations in the south are underfilling canisters with gas, and 30 per cent of gas traders are selling counterfeited brand-names, according to the Viet Nam Gas Association's southern branch.

Cement company to recycle waste heat

Holcim Cement Co Ltd Viet Nam (HVL) announced yesterday it would build a a 6.3 MW power plant utilising waste heat from its Hon Chong Cement Plant in the Cuu Long (Mekong) Delta province of Kien Giang.

Construction of the project in the province's Kien Luong District would start in May 2011 and the plant will come into operation on January 2012, the company said in a press conference.

The power station can produce some 44 million kWh of electricity per year, enough power for the Hon Chong Cement Plant to run for 88 days.

The project could help save 9,000 tonnes of coal or 6,450 tonnes of oil annually, according to HVL's figures.

The company said it was one of the steps being taken to achieve the maximum reduction of CO2 emissions in the company's production process, showcasing its commitment to sustainable development. The project is financially supported by Standard Chartered Bank.

Total investment for the project amounts to US$18 million, including the first package worth $9 million for designing, construction, machinery and construction supervision.

With the power plant at Hon Chong Cement Plant, a project in the framework of the Clean Development Mechanism (CDM), HVL can achieve carbon emission quotas (CERT – Carbon Emission Reduction Target) through the reduction of 25,000 tonnes of CO2 emissions each year.

"The system to re-use of waste heat will help Holcim Group to reduce CO2 emissions by 25 per cent by the end of 2015 as the group has committed.

As of 2010, Global Holcim is proud to have achieved 23 per cent reduction in CO2 emissions," said Gerhard Schutz, Director General of HVL.

Vinacomin plans to mine 44m tonnes of coal

The Viet Nam National Coal and Mineral Industries Group, or Vinacomin, has set a target to exploit more than 44 million tonnes of coal in 2011 — 27.5 million tonnes reserved for the domestic market and 16.5 million tonnes for export.

In 2010, Vinacomin sold 42.5 million tonnes, a year-on-year decrease of 4.5 per cent, of which, 23.3 million tonnes were provided to the domestic market and 19.2 million tonnes were exported, according to the group's general director, Tran Xuan Hoa.

At present, the total coal reserved reached 6.5 million tonnes and Vinacomin has asked for the Government's permission to export coal dust to ensure its production capacity and raise coal prices to prevent it from incurring losses.

Vinachem to invest $375m in major projects

The Viet Nam National Chemical Corporation (Vinachem) will invest VND 7.5 trillion ($375 million) in fulfilling its major projects this year.

Some include developing Ninh Binh coal and nitrogenous fertiliser and expanding and restructuring the Ha Bac chemical and nitrogenous plant, a radian tyre plant in central Da Nang City with a capacity of 600,000 tyres a year, and the Nhon Trach batteries plant with a capacity of 2 million kwh per year.

The Ministry of Industry and Trade has outlined some solutions to stabilise the fertiliser market by boosting production and temporarily minimising exports, said Nguyen Quoc Tuan, a Vinachem official.

Steel industry expects to produce 6.7m tonnes

Domestic steel production is expected to reach 6.7 million tonnes this year, a year-on-year increase of 4.2 per cent, according to a report released by the Ministry of Industry and Trade.

The ministry has also asked provincial-level agencies to narrow the issurance of invesment licences due to drastic competition of steel products in the global market and an overflow of low-cost steel products imported into Viet Nam.

Domestic firms are also required to speed up steel projects, such as cast iron and steel manufacturers in Thai Nguyen, Ha Tinh, Lao Cai Provinces and foreign direct investment projects on the Guang Lian and Formosa steel plants.

Rules released for 2011 import tariff quotas

The Ministry of Industry and Trade has issued Circular No 45/2010/TT-BCT to stipulate import quotas in 2011.

The circular will be applied to products such as eggs, tobacco, salt and sugar.

Accordingly, under the cicular, 100,000 tonnes of industrial salt will be imported for manufacturers to use for chemical production and 2,000 tonnes of pure salt to be used for medicine production.

In addition, some 150,000 tonnes of refined and raw sugar will be imported for local manufacturers.

The circular is scheduled to take effect by December 31.

Production of farm machinery expected to rise by 15%

Agricultural machinery manufacturing is expected to grow by between 5 and 15 per cent over the same period last year, according to the Ministry of Industry and Trade.

To achieve this, the agricultural engineering industry needs to raise its manufacturing capacity by applying advanced technology to replace imports and expand the market.

In addition, manufacturers of machine-tool products need to keep a firm foothold in their export markets and intensify hi-tech production.

Deloitte to offer tips

The HCM City Stock Exchange and the auditing firm of Deloitte Viet Nam will sign a memorandum of understanding today to co-operate in promoting corporate governance.

The co-operation programme will focus on updating models and advice on best practice of corporate governance, business restructuring, risk management, auditing and internal controls.

After the signing ceremony, a workshop on corporate governance for listed companies will be held focusing on difficulties and obstacles that listed companies have encountered in practice.

Thang Long Securities tops

Thang Long Securities Co was the top brokerage on the Ha Noi Stock Exchange for the second consecutive year in 2010, landing over 9.7 per cent of market share on the Ha Noi Stock Exchange in the final quarter of last year and easily outdistancing rivals HCM City Securities Co, Sacombank Securities Co and VNDirect Securities Co.

For the entire year, Thang Long secured a 11.9-per-cent market share.

Saigon Securities Inc (SSI), which replaced Thang Long as the leading brokerage on the HCM City bourse in the fourth quarter, only ranked sixth in Ha Noi.

PVN Securities changes plans

PetroVietnam Securities Inc (PSI) will issue over 8.9 million shares to strategic foreign investors in the first quarter at a price of VND15,000 (US$0.70) per share, if the plan is approved by the firm's upcoming annual shareholders meeting. PSI will also ask shareholders to annul an earlier plan to offer over 50.9 million bonus shares to existing shareholders, since the market price of PSI shares has fallen below the planned offer price of VND15,000 per share. PSI closed yesterday in Ha Noi at just VND13,000 ($0.60).

PSI also plans to increase charter capital in the first quarter to VND598.4 billion ($28.5 million), pending approval of shareholders.

Fewer brokerages post losses

At least 20 securities companies posted losses in 2010, down from over 60 firms in the previous year, according to the State Securities Commission.

Securities companies have been more cautious in making investments and focused more on consultancy and brokerage operations, the commission said. Since June of 2010, the commission has also asked securities firm to conduct calculations based on international financial security standards.