Generali Vietnam Life Insurance operating in Hanoi

The Generali Vietnam Life Insurance (GVL) has  officially opened its representative office in Hanoi as from June 10.

It provides life insurance services with its special products for individuals in the capital city.

GVL General Director Simon Lam affirmed that Hanoi is an important market for the company to expand its operation to the northern region.

GVL will follow the performance model which has been carried out successfully in Ho Chi Minh City over the years. The company will exert more effort to impress customers with its professional skills, Lam said.

Generali Vietnam has been in operation for more than a year, attracting as many as 10,000 customers.

It belongs to Generali Group – one of the largest European insurance companies and the biggest European life insurance company with annual turnover of 70 billion euro.

China’s Guangxi showcases products in Hanoi

China’s Guangxi Zhuang Autonomous Region is displaying its distinctive products at an exhibition which opened in Hanoi on June 11.

It is particularly marketing items of its strength such as mechanical devices, vehicles, chemicals, pharmaceuticals, and mineral ores.

In her opening speech, Vietnamese Deputy Minister of Industry and Trade Ho Thi Kim Thoa noted China is Vietnam’s big trading partner, with two-way trade value last year reaching more than US$41 billion.

Vietnam’s trade exchanges with Guangxi alone accounted for one fourth of the total value, and Vietnam has retained its leading position in trading with Guangxi for the past 14 consecutive years.

Since 2004 the exhibition has become a key trade and investment promotion activity, helping boost trade exchanges between the business communities of Vietnam and China, and Guangxi in particular, Thoa stressed.

This year’s exhibition, the 8th of its kind, offers a great chance for the two business circles to share experience in developing new technologies, seek partnerships, and sign contracts, aiming to raise Vietnam-China trade value to US$60 billion by 2015, she said.

Zhang Xiaoqin, Vice Governor of the Guangxi Zhuang Autonomous Region, emphasised that Guangxi and Vietnam have great potential for cooperation and that the 2013 Guangxi products exhibition will promote mutual understanding between the two sides’ businesses.

The exhibition lasts three days.

Finnish fund pours EUR40 mln into Vietnam’s stock market

PYN Elite, Finland's best-performing investment fund, is shifting its investment from Thailand to Vietnam by investing US$40 million in 51 local firms listed on the stock market.

According to Bloomberg News, the fund has sold about EUR100 million worth of Thai stocks during the past five months.

Petri Deryung, PYN Elite’s manager, said his fund’s investment in Vietnam accounts for 29 percent of its total investment and the figure is expected to keep rising in the future.

Increasing Vietnam-Mozambique investment efficiency

The governments of Vietnam and Mozambique should create more favourable conditions for their business communities to enter each other’s markets.

Businesses made the proposal at a joint roundtable on Vietnam-Mozambique trade and investment promotion in Hanoi on June 12.

Deputy Minister of Planning and Investment Dao Quang Thu noted that bilateral investment cooperation remains modest, mostly in agriculture and telecommunications.

However, he said the success story of Vietnam’s military-run telecom group (Viettel) which has been implementing telecom projects in Mozambique is an exemplary role model of Vietnam-Mozambique investment cooperation that needs to be replicated in the future.

Aiuba Cuereneia, Mozambique Minister of Planning and Development, said that trade exchanges between the two countries, mostly of cashew nuts, timber, coconuts, rice and power generators, are growing and flourishing, benefitting their business communities.

He called on Vietnamese businesses to invest in banking, finance, farm produce planting and processing, transportation and telecommunications in Mozambique to increase the efficiency of their investment.  

To date Vietnamese businesses have poured US$350 million into Mozambique projects, ranking them 8th among 60 countries and territories that have received Vietnamese investment.

Major investment areas include agriculture, forestry-fishery product processing, household utensil manufacturing, oil&gas exploration, mineral ore exploitation, and construction.

Hanoi hosts the 2013 Vietnam Trademark Forum

Hanoi will host the Vietnam Trademark Forum on June 12, its 2013 iteration themed “Building and Developing Regional Trademarks for National Economic Development”.

The Ministry of Industry and Trade’s Trade Promotion Agency and the Vietnam News Agency (VNA) Tin Tuc (News) newspaper co-organised the event under the framework of 2013’s Vietnam National Trademark Program.

The forum gives policy makers, economic experts, provincial leaders a chance to share information and experiences in regional and national trademark development, the economic potential of marine environments, and improving the reputation of local marine trademarks.

Do Thanh Hai, Head of the Trade Promotion Agency and the Vietnam National Trademark Program’s General Secretary, believes,building regional trademarks will help Vietnamese enterprises improve their competitiveness, attract foreign investment, and raise the living standards enjoyed by local residents.

The 2013 National Trademark Forum is tasked with analyzing and implementing policy strategies in key economic regions in order to further regional and national economic growth.

Vietnam foster trade links with Middle East and Africa

A June 11 seminar in Hanoi has discussed ways to boost trade promotion and investment activities in the African and Middle Eastern markets.

Le Thai Hoa, the Deputy Head of the Ministry of Industry and Trade’s (MoIT) African, West and South Asian Markets Department, said the demand for food, agricultural produce, seafood, and consumer goods in Africa and the Middle East is latent potential Vietnam cannot afford to ignore.

Vietnam’s export earnings hit nearly US$4.2 billion last year, up 65 percent compared to 2011. A further US$1.4 billion has been added in the first quarter of this year.

Vietnam’s Middle Eastern presence includes eight embassies, six trade offices, and free trade agreements with 11 out of the region’s 15 nations.

The tax rates levied on Vietnamese imports into the Gulf Cooperation Council (GCC) political and economic alliance range from the relatively low rate of five percent to completely tax free.

Vietnamese exporters also enjoy most favoured nation (MFN) status in Africa.

The political instability and persistent religious and ethnic conflicts makes business challenging.  

Companies are forced to accept the risk of trade fraud, complicating cultural, religious, and business custom differences, and a general shortage of information.

To overcome difficulties like these, the MoIT and relevant agencies offer their resources to businesses and associations promoting trade activities with the regions, participating in exhibitions and fairs abroad, and collecting market information.

Vietnam’s international representative agencies and trade offices are integral to these efforts. The MoIT has asked associations to continue coordinating with the ministry and the Vietnam Chamber of Commerce and Industry (VCCI) on developing programs promoting exports and supporting businesses during any arising trade lawsuits.

Vietnam-China forum focuses on cross-border trade

A Vietnam-China Comprehensive Economic and Trade Cooperation Forum took place in Hanoi on June 10, aimed at creating opportunities for bilateral trade and lifting the two countries’ economic relations to a higher level.

Speaking at the forum, Deputy Minister of Industry and Trade Ho Thi Kim Thoa affirmed that Vietnam-China comprehensive cooperation in recent years have seen strong development, contributing to socio-economic development of the two countries, and their border provinces in particular.

She noted the high growth rate of cross-border trade between Vietnam and China, which averaged 23% a year, raising the value from US$3.5 billion in 2006 to US$8.6 billion in 2012.

Agro-forest-aquatic products and processed industrial goods are major Vietnamese export items to China; meanwhile, Vietnam mainly imports machinery, transportation vehicles, electronic goods, food, and home appliances from China.

At the forum, Wang Nai Xue, Director of the Department of Commerce of Guangxi (China) proposed the establishment of an experimental free trade border complex in Guangxi, which can serve as a model for the friendly cooperation between the two countries’ border areas.

Trade turnover between Guangxi and Vietnam reached US$9.73 billion in 2012, 12 times the figure of 2004.

Shoe designer tops int’l footwear design contest

A Vietnamese shoe designer has won top prize in an international footwear design contest recently held in Guangzhou City, China.

The shoes designed by Duong Ngoc Lan Chi from Anlac Footwear Joint Stock Co (Alsimex) beat 180 others to win first prize in the 5th International Footwear Design Competition, HCM City-base newspaper Tuoi Tre reported.

They were among 14 pairs of shoes from 9 local designers picked by the Vietnam Leather and Footwear Association (Lefaso) for the contest early this year.

Chi’s work won both first prize in the overall contest and the women’s shoe category, according to Lefaso. There were five categories including men’s shoes, children’s shoes and sport shoes.

Four others, all from Alsimex, were also announced as prize winners in the contest, said Lefaso.

Chi’s colleague, designer Tran Phuong Tam, won first prize in children’s shoe category with a design imitating a sport car.

The contest, organised by 12-member Asian International Footwear Association from May 30 to June 1, attracted 181 shoe artworks from nine regional countries and territories.

It aims to find talented shoe designers regionally and build up qualified shoe designing team meeting international standard for each member country.

Alsimex was established in 1987 as a division of the Saigon leather-footwear factory.

Firms voice support for raising woodchip export tax

Local wood processing and paper production firms have voiced their support for the Ministry of Finance’s tentative scheme to increase the export tax on woodchip from 0% to 5%.

Nguyen Ton Quyen, vice chairman cum general secretary of the Vietnam Timber and Forest Products Association (Vifores), said the association has many times asked relevant agencies to restrict the cutting of young timber to produce woodchip for export.

The timber supply is now not enough for the demand of artificial board and paper production, not to mention wood processing, Quyen said.

According to the Vietnam Pulp and Paper Association (VPPA), paper plants in the northern region is facing many difficulties in securing wood material and woodchip to produce pulp due to the increasingly high woodchip export.

The plant of An Hoa Paper Joint Stock Company has a designed capacity of 130,000 tons of pulp per year, equivalent to a demand of 53,900 tons of wood materials a month. However, the plant has bought only 48% of the material volume needed as a large volume of woodchip has found its way to other markets.

According to VPPA, the paper industry needs around 822,000 tons of pulp, with around 480,000 tons supplied by over 50 local plants and the rest imported.

Although woodchip export helps forest planters earn a higher price, it is still raw material, and thus exporting this material does not bring about high efficiency.

Based on the current regulation and the actual situation, the Ministry of Finance said that limiting the woodchip export as proposed by the Ministry of Industry and Trade was necessary to avoid exploiting young timber and to reserve materials for domestic production. Therefore, the Ministry of Finance proposed to increase the export tariff imposed on woodchip from 0% to 5%.

According to statistics of the General Department of Customs, woodchip export has increased steadily over the years with 4.13 million tons worth US$459.5 million in 2010 and 5.4 million tons worth US$703.3 million in 2011.

The woodchip export amounted to 6.1 million tons with a value of US$827.6 million last year. The respective figures recorded in this year’s first quarter are 1.6 million tons and US$220.1 million.

Exported apparel unit prices down

Vietnam’s garment and textile export volumes to the U.S. and the European Union have increased from earlier in the year but unit prices have sharply declined.

Data released by the U.S. Department of Commerce’s Office of Textiles and Apparel (OTEXA) showed that China took the lead for apparel exports to the U.S. in the first quarter with revenue of US$8.7 billion, followed by Vietnam US$2 billion, India US$1.6 billion, Indonesia US$1.4 billion and Bangladesh US$1.3 billion.

Vietnam posted the strongest growth in apparel export value and volume in this market with 14% and 22.3% respectively. However, the nation saw the strongest decline in average unit price at 7% compared to the same period last year.

According to the Statistical Office of the European Communities (EUROSTAT), Vietnam’s apparel exports to the EU in the first quarter declined 2.5% in value but rose 2.4% in volume while average unit price dropped 4.8% year-on-year.

A report of the Ministry of Industry and Trade released last month estimated that Vietnam’s apparel production and exports would improve with production orders stable until the end of the second or third quarter.

However, the industry is facing danger of shrinking profits compared to previous years due to small orders and tough competition, leading to low export prices.

Urban railway projects move slowly

Urban railway projects in HCMC are moving slowly due to financial distress, troublesome site clearance and complicated administrative procedures, said Hoang Nhu Cuong, deputy director of the HCMC Management Authority for Urban Railways.

Seven metro lines and three tramways will be built in the city under the master plan launched in February 2001.

So far, site clearance for Metro Line No. 1 connecting Ben Thanh Market with Suoi Tien Theme Park is basically finished and a contractor is being sought for the underground section from Ben Thanh to Ba Son Shipyard.

As for the construction package consisting of the elevated section from Ba Son to Suoi Tien with 11 stations and a maintenance station, the contractor’s work progress is confined to merely geological and topographical surveys, and designs for the pedestrian bridge and the maintenance station.

This construction package will be executed on a large scale this month, said the urban railways authority.

Work started on Metro Line No. 2 from Ben Thanh to Tham Luong in August 2010. Currently, contractors are being selected for the construction packages of this project, so it won’t be until early 2014 that it will officially get off the ground, said Cuong.

The other metro projects, except for Metro Line No. 5 which will receive 200 million euros from Spain, are still looking for funding.

“If everything goes smoothly, metro lines 1 and 2 will be completed in 2017 and be ready for service in 2018,” said Cuong.

The development of the urban railway network in HCMC has been slower than expected due to financial restraints and cumbersome procedures, he noted.

Because regulations of international donors and Vietnam are clashing, the funding process is hindered and the municipal government has to ask for opinions of relevant agencies and the Government, he said.

Another cause of the slow development is an incorrect calculation of total investment cost, requiring adjustments. “Capital increase for metro projects takes much time, perhaps a couple of years, since opinions of many ministries and the National Assembly must be sought,” he said.

He suggested separating site clearance and compensation from urban railway projects. Compensation is always fluctuating in line with land prices, making the costs of urban railway projects volatile, he explained.

“Site clearance and compensation should be separated from the urban railway projects and done in advance. Then, implementation of urban railway projects will go smoothly,” he said.

GreenBiz seeks green business solutions for Vietnam

The seminar and exhibition GreenBiz 2013 under the theme “European Green Business Solutions for Vietnam” will be organized in Hanoi on September 19-20 with an aim to improve policies and raise awareness on green business in the country.

This is the third GreenBiz event after the first one that took place in 2009 and it is expected to help connect local and foreign enterprises, said the European Chamber of Commerce in Vietnam (EuroCham).

Besides providing assessments on overall matters relating to green consumption and production, GreenBiz 2013 will also discuss healthcare, foodstuffs and nutrition issues, Preben Hjortlund, EuroCham president in Vietnam, remarked.

Moreover, other prevailing problems in Vietnam such as natural resource management including energy and wastewater and waste treatment and renewable energy will also be discussed at the conference.

Specially, this year’s GreenBiz will feature core capability of many EU nations. Plenty of EU companies from France, Germany, Poland and Sweden at the exhibition will introduce the latest and most feasible solutions on the green business model.

EuroCham expects to push for the model of cooperation between an EU expert and a business executive of an Asian enterprise. The organization with this third edition wants to prove that green business and good governance solutions could be achieved at the same time as these solutions are reciprocal.

Green activities have become necessary and are considered as the development model for all enterprises and the society, Hjortlund said, adding benefits of involved entities and society will be sustained thanks to economic prosperity. The green business solutions will help Vietnam avoid mistakes that EU countries had made during the 1960s, he noted.

Work starts on rare earth plant in BR-VT

Japan-invested Vietnam Rare Chemical Company (VRec) on Wednesday began construction of the zirconium compound production plant in Ba Ria-Vung Tau Province’s Cai Mep Industrial Park.

The firm will set aside VND1.03 trillion to turn a four-hectare land site into a plant producing and processing zircon ore to produce metasilicate and zirconium compounds.

Zirconium is a material needed for the production of refractory products and materials for the nuclear power industry. Besides, it is used to produce components for devices like cellphones, TV sets, aircraft shells and brakes for racing cars.

According to VRec, in the first phase the plant will produce zirconium oxychloride and sodium metasilicate with respective capacities of 13,300 tons and 8,500 tons per year.

The plant is scheduled for operation after 12 months of construction.

VRec is one of the first foreign investors that invest in Cai Mep Industrial Park in the rare earth sector. Having convenient road and sea transport and being near Binh Thuan, a province with rare earth potential, are the reasons why the Japanese investor has chosen Cai Mep Industrial Park.

Several property projects seek to become budget ones

Faced with the dampened sentiment on the property market, investors of many high-end apartment projects are applying to convert their projects into low-cost ones and expecting to benefit from the VND30-billion home loan package.

Notable projects among those applied to be changed into budget ones are the Hung Dien residential-commercial project invested by Tan Hung Investment Joint Stock Company in an area of nearly 20 hectares in Binh Chanh District.

The project was launched noisily in 2008 with total investment capital proclaimed to amount to billions of U.S. dollars to develop high-end office building, commercial center, entertainment facilities and apartments.

According to the HCMC Department of Construction, the investor wants to convert a 34-floor building into a budget housing project with 2,716 apartments.

Meanwhile, Transport Engineering Construction and Business Investment Company 584 wants to convert its three projects in Go Vap and Tan Phu districts. If the applications are approved, around 2,250 low-cost apartments will join the market.

Similarly, Thu Thiem Investment Company also applies to convert the Thao Dien resettlement project with around 300 apartments, while Tan Binh Construction Investment Company wants to change its 480 apartments of the Tan Mai project in Binh Tan District into low-cost ones.

In addition to shifting projects to the low-cost segment, some investors also seek approval to divide apartments into smaller ones to meet the demand. For instance, Bao Gia Company has applied to change penthouses of The Flemington Tower in District 11 into apartments having an area of 86-116 square meters each.

According to observers, changing projects into low-cost ones may help remove difficulties for investors. However, it is too soon to say whether this move will work as investors need to see how homebuyers react to such housing model.

The HCMC Department of Construction said that it would submit to the municipal government registered projects and continue to receive new applications.

More villas, houses on offer in Nha Trang

As many as 1,780 villas and adjoining houses were on offer in Nha Trang in the first quarter, up 1% from the previous quarter, according to Savills Vietnam’s report on Nha Trang’s property market released on Wednesday.

The property market researcher said of the total number, the primary and secondary markets accounted for 460 villas and 1,320 adjoining units respectively.

The common price of villas in Khanh Hoa Province’s coastal city of Nha Trang ranges between VND3 billion and VND5.5 billion per unit, while the price of an adjoining house is VND1.3-2.5 billion.

The report also indicated that the average household size in Nha Trang fell from five people to 4.2 people last year. According to Savills, with improved income and better life quality, the trend of small household size may boost the housing demand in Nha Trang.

Nha Trang has three primary projects which are developed under the second-home model and target customers in Hanoi and HCMC. However, the economic crisis and a strong competition from other coastal cities like Danang, Phan Thiet and Vung Tau have greatly affected the demand in Nha Trang.

Besides, over 70% of the total number of future property projects in Nha Trang is located in the western and northern areas of the city.

The supply of hotel rooms meeting three- to five-star standards in Nha Trang exceeded 4,800 rooms in the first quarter, rising by 3% from the previous quarter, according to the report.

The property market still operates well despite the presence of new projects. The occupancy rate inched up by three percentage points and reached 73% while the average room rate was VND1.82 million per night, up 7%.

Nha Trang currently has 25 projects under progress which will supply over 4,100 three- to five-star rooms. Among these new projects, there are six hotels with over 900 rooms which will join the market this year, making the competition in the hotel market in the city stronger.

Credit fund converted into bank

Vietnam’s central people’s credit fund has been turned into a co-operative bank with total chartered capital of VND3 trillion and a licensed period of 99 years.

The license of the Vietnam Co-operative Bank took effect immediately after the central bank governor signed it on Tuesday.

The bank, which is financed by the State, member people’s credit funds and others, has 27 branches nationwide, which were formerly the credit fund’s members.

The new institution can operate as a commercial bank. In addition to normal commercial banking services, it can issue

certificates of deposit, promissory notes, bonds and other valuable papers to raise capital from local and international sources, and borrow from local capital markets and domestic and foreign organizations.

On the same day, the central bank issued a decision withdrawing the license of the central people’s credit fund within 15 days.

HIPC borrows VND555 billion from VietinBank

Hiep Phuoc Industrial Park Joint Stock Company (HIPC) on Tuesday signed a contract to borrow VND555 billion from Vietnam Bank for Industry and Trade (VietinBank) to develop the second stage of the industrial park.

In this stage, the industrial park will be expanded by around 600 hectares to house enterprises using high and environmentally friendly technologies.

HIPC general director Doan Hoang Tam said that site clearance is expected to be complete by the end of 2014. HIPC will focus on enterprises in the fields of high-class building materials, precision engineering, equipment manufacturing, food production, shipping and warehouse services.

In the first stage, the industrial park covers around 310 hectares, attracting 98 enterprises with nearly 9,000 staff.

HCMC has 14 industrial parks and export processing zones, accommodating over 1,200 active projects with nearly 260,000 employees. In the next 10 years, the city is expected to have one high-tech park, and 20 concentrated industrial parks, export processing zones and local industrial clusters on the total area of 8,800 hectares.

Manulife Vietnam sees 16% premium increase in Q1

Life insurer Manulife Vietnam reported total premiums and deposits of VND512 billion in the first quarter of 2013, an increase of 16% over the same period last year.

Total assets under the company’s management were nearly VND7.2 trillion, an increase of 29%. Insurance sales through bancassurance also experienced growth compared to the same quarter of 2012.

Chung Ba Phuong, CEO of Manulife Vietnam, said in a statement recently released that the enterprise has seen a lot of opportunities to expand further into bancassurance to reach more potential customers besides the established agency channel.

In the first quarter, Manulife Vietnam opened a new representative office in downtown Can Tho City, offering customers improved service facilities as per its commitment to grow with quality.

Viettel moves 3,400 staff to communes

Viettel Group has sent 3,400 employees to communes since the year’s beginning to provide customer care services and prepare itself for tapping the rural market now that the military-run giant is to launch its cable TV services soon alongside its telecom services.

According to Viettel, after five months of executing the strategy of ‘grabbing the market,’ the group has so far moved 30% of its sales team with 3,400 people to communes to better meet the demand of customers.

With the new strategy, every two to three communes will have at least one Viettel staff directly in charge of delivering goods and services as well as addressing problems. These staff will also work with nearly 14,000 local employees of Viettel nationwide on carrying out sales activities.

Together with expanding the service network to every commune, sending staff to communes is a way Viettel applies to ensure good and prompt customer care services.

According to an expert, this move of Viettel aims to pave the way for its cable television service recently licensed and expected to be launched late this year. Cable television service has now been saturated in cities and towns but has yet to be popular in rural areas.

Firms switch to rail freight transport

Many transport companies have registered for container transport by train from northern provinces to Haiphong Port and Quang Ninh Port to cut costs and thus help prevent overload on the road system, says Vietnam Railways.

Currently, Vinalines Logistics Joint Stock Company and Bach Dang Loading and Unloading Enterprise are transporting containers on the Haiphong-Lao Cai line, with a volume of 26 twenty-foot-equivalent units (TEU) per train.

In the next few months, the number of freight trains running on the Haiphong-Lao Cai route will be increased to meet the rising cargo volume.

A lot of enterprises choose to transport goods on the rail line from Viet Tri City in Phu Tho to Haiphong because of the 3,000-square-meter goods yard recently built in Thuy Van Industrial Park in Viet Tri.

The line from Yen Vien, Hanoi to Cai Lan, Quang Ninh is also popular. A firm has developed a yard covering 30,000 square meters at Kep Station in Bac Giang to facilitate loading and unloading of goods transported on the Yen Vien-Kep-Ha Long-Cai Lan route.

Nguyen Huu Tuyen, head of the transport business department under Vietnam Railways, said that if 10% of goods destined for Haiphong Port were transported by train, the daily number of vehicles passing National Highway 5 would drop by 200.

Rail freight transport significantly reduces the loads on National Highway 5 and National Highway 70, he said.

Rail transport allows a larger cargo volume and costs less than road transport. Therefore, it is a better choice for transport firms in the context that road vehicles are subject to many fees.

On approving the scheme for rail freight transport, Minister of Transport Dinh La Thang requested all 40-feet containers to be transported by train by 2014.

Meanwhile, to prevent overload on the road system, weigh stations are set up to detect overloaded vehicles.

Husbandry farmers find it hard to access loans

It is difficult for local livestock farmers to gain access to the preferential loan program though banks have been asked to lower the annual lending rate for husbandry and fishery industries to 10% by the central bank.

Speaking with the Daily on Tuesday, Pham Duc Binh, vice chairman of the poultry and livestock association of Dong Nai Province, said loan applications of many farmers are turned down by banks as they fail to pay old debts and show good business plans.

In the livestock industry, most households buy animal feed based on deferred payment method and they can only make payments after selling the animals, Binh explained. Due to having suffered losses for a long time, local households are unable to pay debts and resume farming.

Given the absence of sound business plans plus mounting old debts, many of them cannot take out bank loans from the interest rate subsidy program designed with annual rate of less than 10% as expected by the central bank.

This is similar to what that has happened to husbandry companies having suffered losses over the years, Binh said. The fact that the central bank requests banks to slash lending rates to the husbandry and fishery industries for loans that had been disbursed before May 13 to a maximum 10% annually only creates conditions for companies to rotate old loans, he remarked.

The central bank has earlier released Document 3783/NHNN-TD asking five commercial banks comprising Agribank, BIDV, Vietinbank, Vietcombank and MHB to cut lending rates for the target industries to a maximum level of 10%.

The central bank in the document clarifies that the five banks need to continue to deploy the program strictly and effectively to ensure the effective credit support for the target industries in line with the instructions of the Prime Minister and the monetary authority.

EU funds early implementation of PCA

The Delegation of the European Union (EU) in Vietnam will grant 2.9 million euros in three years to help Vietnam implement the EU-Vietnam Partnership and Cooperation Agreement (PCA) signed in Brussels last year.

At the launch of the EU-Vietnam Strategic Dialogue Facility held on Tuesday in Hanoi, an EU official said the funding would be disbursed from February, 2013 to February, 2016 for Vietnam to carry out activities like policy research, technical support, organization of conferences and trainings among others.

The program aims to boost strategic dialogue between the EU and Vietnam to assist the implementation of PCA by sharing experiences and good practices in prioritized sectors, said Ambassador Franz Jessen, head of the EU Delegation to Vietnam.

Speaking at the ceremony, Deputy Foreign Minister Bui Thanh Son said that PCA was officially signed last June, and while waiting for ratification, the two sides have agreed on implementing PCA in some prioritized sectors.

The implementation of PCA in the 2011-2012 period has progressed well, and the two sides are discussing how to conduct PCA in the 2013-2014 period, he added.

Jessen said that the EU would step up the ratification process, implement the agreement and make full use of all cooperation opportunities brought by the agreement.

Two-way trade between the EU and Vietnam reached US$29.09 billion last year, up nearly 20% from the previous year. Regarding investment, there were 22 out of 27 EU countries making investments in Vietnam as of March with 1,299 valid projects and total registered capital of over US$17 billion.

Five-month footwear export earnings up 11.4 percent

Vietnam earned 3.1 billion USD in footwear export in the first five months of this year, a year-on-year increase of 11.4 percent, according to the General Statistics Office.

Last month alone, export turnover reached 750 million USD due to the stability of traditional export markets and increasing orders from new importers.

In the first four months of the year, the industry enjoyed high export turnover from its traditional markets. The US took the lead with turnover of 755 million USD, followed by the UK with 149 million USD, Belgium with 140 million USD, Japan with 121 million USD and China with 114 million USD.

Shoe producers had stable orders, with many big enterprises receiving orders for up to the third quarter.

According to the Vietnam Leather and Footwear Association (LEFASO), the Trans-Pacific Partnership Agreement (TPP) negotiations would bring about opportunities for the Vietnamese leather and footwear industry to penetrate the large market.

The association added that Vietnam's leather and footwear products would enjoy preferential tax of zero percent, reduced from the current 14.3 percent. This would help Vietnamese shoe enterprises to increase their competitiveness over other big shoe exporters that were not TPP members.

In addition, the products would be subject to Generalised System of Preferences (GSP) taxes in the EU market from the beginning of next year.

EU taxes would be zero percent when the Free Trade Agreement (FTA) between Vietnam and the EU came into effect.

Several British and German shoe importers, therefore, have been searching for business opportunities in Vietnam.

However, the association said the TPP would also bring about challenges for Vietnam 's shoes industry, as the agreement has a compulsory localisation rate for raw materials.

Domestic businesses have a low localisation rate of 40 percent, as the industry depends highly on imported materials.

The Ministry of Industry and Trade encouraged footwear businesses to increase their investment in material production, modern and environmentally friendly technologies.

The country aimed to reach an export turnover of 9.7 billion USD this year, up 10 percent over last year. Shoe export alone is expected to gain 8 billion USD.

It also aims by 2020 to be one of the world's top-five producers and exporters of footwear.

Farmers in central region plagued by dead fish, shrimp crops

Fish and shrimp breeders in the central region are in deep despair after diseases have hit their fish and shrimp crops, with many of them now on the verge of bankruptcy.  

About 500,000 rabbitfish (Siganus) have died in Tam Giang Lagoon causing losses upto VND2.5 billion (US$119,000) for local households in Thua Thien-Hue Province.

One household will suffer an average loss of VND40-50 million ($1,904-2,380).

Tens of thousands of Kinh fish, a small fish species living in brackish water, also faces extinction in Quang Dien District.

According to the district Department of Agriculture and Rural Development, the long-lasting hot weather together with rainstorms has suddenly changed the salinity in breeding ponds.

Besides, the spread of blue green algae has reduced oxygen in the water. Another reason is that farmers have bred too much fish in a single pond and hence the quality of bred fish has gone down.

Farmers in the central region are also stricken by shrimp diseases, which have spread and killed numerous tiger prawns and white-leg shrimps in many provinces.

Several breeders are on the verge of bankruptcy after mortgaging their properties to banks so as to breed shrimp.

They now are in need of assistance from authorized organs to fully determine the cause of the dead fish and shrimp, to prevent further spread of diseases. Farmers too need assistance in sterilizing breeding ponds.

Farmers increase dragon fruit cultivation despite uncertainty

Farmers in Chau Thanh District of Long An Province and Cho Gao District of Tien Giang Province have already spent VND810 billion to cultivate more than 2,700 additional hectares of dragon fruit, even though they are not sure of return in profits.

Local farmers in the above districts still consider dragon fruit as the most lucrative crop as in recent years it has earned them millions or even billions of dong.  Continued to be lured to hopes of high profits, most farmers have switched to growing dragon fruit though rice or vegetables still provide a fairly stable income. From 2011 to now, farmers in the two above districts have expanded dragon fruit area by more than 2,700 hectares, far beyond the target area of the two districts.

Truong Van Biet, chairman of the People’s Committee of Chau Thanh District, said that the area of dragon fruit in the district was about 1,000 hectares in 2010 and was planned to increase to 1,500 hectares by 2015. However, dragon fruit area now exceeds 2,200 hectares.

Meanwhile, in 2010 in Cho Gao District, dragon fruit area was nearly 2,000 hectares but is now more than 3,500 hectares while the maximum area for expansion was targeted at 4,500-5,000 hectares by 2015.

Taking only the new cultivation area into account, from 2011 to now, farmers in the two districts have spent more than VND810 billion in investments; but adding this area to existing cultivated area--then investments rise to VND1.6 trillion. This is too huge an investment for local farmers to bet on if they remain unsure of return profits.

This also raises concerns as to why so many farmers switched to growing dragon fruit, when they barely know about cultivation techniques. However, they thought recklessly, believing that if other farmers can grow dragon fruit and reap profits, they could too.

Mr. D.V.N, an official in Long An Province, also decided to convert more than one hectare of rice growing area to dragon fruit cultivation although he knows nothing about dragon fruit cultivation techniques nor is he sure of reaping more profits.

According to Mr. Truong Van Biet, farmers abandoned rice and vegetable cultivation to grow dragon fruits because traders have in the past two years been offering good prices for dragon fruits, tempting farmers to switch crops. Moreover, power supply for dragon fruit cultivation has been guaranteed of late, creating favorable conditions for dragon fruit growers.

In the past two years, the price of dragon fruits went up pretty high, bringing higher profits for growers. As for white-flesh dragon fruit, average price was from VND15,000 to VND20,000 per kilogram, or even VND30,000 per kilo sometimes. The price of red-flesh dragon fruit was VND30,000-40,000 per kilo, or even upto VND60,000 per kilo. As a result, a hectare of white-flesh dragon fruit yields about VND300-400 million, while that of red-flesh one gives about VND700-800 million, or sometimes VND1 billion.

According to farmers’ calculations, if the price maintains at that level, they can reclaim their initial investments and reap profits after two years. Because the plant bears fruits after 15-17 months and in its third year, a hectare produces an average of 10-20 tons of dragon fruit.

However, consumption and keeping prices stable remains uncertain. Le Minh Duc, director of the Department of Agriculture and Rural Development of Long An Province, said that due to high profits, farmers have taken to growing dragon fruits even in places that are not part of planned area and facing difficulties in power and water supply. However, the hardest part is ensuring consumption and stable prices for farmers to reap profits.

Currently, dragon fruits are mainly exported to China. Therefore, if dragon fruit consumption in this market becomes stagnant, growers will eventually suffer. Thus, in order that dragon fruit maintains foothold in local and foreign markets, authorities have advised farmers to grow dragon fruit as per planned area.

In addition, the Government has also helped farmers with better cultivation techniques so they can produce safe fruits, reduce cost price, increase productivity, and improve quality to enter new markets, such as Japan, South Korea, and the US.

Agricultural sector poised for major revamp

A draft plan to restructure Viet Nam's agriculture production to improve quality and sustainability has been heralded as the breakthrough needed following a downturn in the sector's contribution to GDP and negative impacts on the environment.

Minister of Agriculture and Rural Development Cao Duc Phat told a conference on the draft plan that agricultural growth in recent years had been achieved mainly "through an increase in area" rather than focusing on sustainability, market forces and diversification.

Farming had reduced biodiversity, degraded natural resources and polluted water resource, Phat said.

Social capital in the agricultural sector was also distributed unequally, with 84 per cent being invested in irrigation systems to plant rice in the 2006-10 period.

"Over the past few years, we have focused too much on quantity rather than quality."

The annual growth rate of the sector in the past 10 years was 5.4 per cent but its share of total GDP had decreased from 24.5 per cent in 2010 to 21.6 per cent last year.

The time for band-aid measures was over, Phat said. "We need a radical solution."

Agriculture was crucial for the nation's economic development and social and political stability. It ensured food security, created incomes for 70 per cent of the population and reduced poverty.

"Agriculture will have to compete for resources with other industrial and services sectors," Phat said, "and so will have to be more competitive on the basis of raising quality, value and food safety through structural adjustments and production technology improvements."

Nguyen Do Anh Tuan, an expert from the Institute of Policy and Strategic Policy for Agriculture and Rural Development, said the driving force for the robust growth of the agriculture sector in the 90s was favourable policies.

However, the previous policies were no longer effective, he said. Agriculture land was being taken over for industries and services while soil quality was being degraded through the overuse of fertiliser and pesticide.

Nguyen Lan Huong from the Food and Agriculture Organisation in Viet Nam, said the restructuring scheme being prepared by the Ministry of Agriculture and Rural Development, along with the support of international organisations, would be the breakthrough needed for the sector's growth,

In the short run, the sector would implement a number of urgent measures, such as restructuring rice production towards reducing rice acreage in arid regions by approximately 200,000ha in favour of planting corn and soybeans.

The ministry would change farmers' perceptions of paddy land so they would consider growing maize, potatoes, soybeans, vegetables or fruit trees, depending on the demand.

The Livestock Breeding Department would help households reduce costs and avoid losses while the Directorate of Fisheries would propose priority areas, solutions and strategies and encourage fishermen to become more effecting in off-shore fishing.

Under the draft scheme, the goal was to achieve average GDP growth in agriculture of 2.6 to 3 per cent per year in the 2011-15 period, and from 3.5 to 4 per cent during the 2016-20 period. By 2020, the income of rural households was targeted to increase by 2.5 times compared with 2008.

The investment in agriculture would be VND239.4 trillion (US$11.4 billion) for the 2011-15 period and increase to VND478.8 trillion ($22.8 billion) in the 2016-20 period.

The funds would be used mostly in rice planting and fisheries with the target of stabilising 3.8 million hectares of rice land, yielding a total annual output of 45 million tonnes. Investment in irrigation would not be a priority.

In aquaculture and seafood exports, shrimp would be a strategic product.

Phat asked that the draft restructuring scheme be ready for approval within this month.

HCM City targets overloaded vehicles

The HCM City Cargo Transport Association has asked the Ministry of Transport to draw up a proposal on new fines related to overloaded vehicles and submit it to the Prime Minister for approval.

Nguyen Bat Han, deputy chief inspector of the city's Department of Transport, said that current regulations include fines of VND3-5 million on drivers of overloaded trucks and withdrawal of licenses for one to two months.

Under those regulations, only drivers are held responsible for violations related to overloading trucks.

The association said that the leaders of ports, freight yards, industrial parks, export processing zones, and factories should be held responsible for overloaded trucks, as well as the owners of the transported goods and vehicles.

Han said that under current regulations it was impossible to resolve the problem of overloaded trucks, which damage roads and bridges and contribute to traffic accidents.

The association has recommended that overloaded trucks be checked at their departure points instead of on roads.

Ho Kim Lan, general secretary of the Viet Nam Seaports Association, said that seaport leaders were not involved in business deals regarding goods transport and should not be responsible for overloaded trucks.

It is the owners of the goods who should be blamed for overloading violations, he said.

Nguyen Minh Tam, general director of Tan Binh Import-Export Joint Stock Corporation (Tanimex), said that enterprises in industrial parks, which work directly with transport enterprises, should assume responsibility for the overloaded trucks.

"It is unreasonable to blame the problem of overloaded trucks on leaders of industrial parks, who only rent land and infrastructure to enterprises," Tam said.

Inspectors at the city's Department of Transport have imposed total fines of VND20.5 billion (US$985,000) on nearly 6,600 overloaded vehicles this year.

State Bank urged to increase credit to farmers

Deputy Prime Minister Hoang Trung Hai has asked the State Bank to consider increasing credit quota to farming households, and work with the Ministry of Agriculture and Rural Development to improve farmers’ access to capital.

The Government official made the request at a June 8 conference in Hanoi to seek solutions to difficulties facing the rice production, animal husbandry and fishery sectors.

He said financial assistance is necessary to help farmers, including those involved in animal husbandry, to maintain production.

Deputy PM Hai also told relevant ministries and sectors to seriously implement the Prime Minister’s decision on purchasing 1 million tonnes of rice for stockpiling, which aims at stimulating demands on the market and ensuring profits for rice farmers.

Representatives from trade organisations urged the Government to soon take measures to remove obstacles to investment, production and consumption, particularly financial measures to help farmers and businesses maintain production. They proposed higher credit quota for farmers in the Mekong Delta, and freezing or scheduling debts to allow farmers and businesses to re-invest. They also expressed hope that relevant organisations accelerate trade promotion activities to help boost sales.

According to the Ministry of Agriculture and Rural Development, weakening demands and the downward trend in price are affecting rice exports of all major rice export countries. In the January-May period, Vietnam exported 2.79 million tonnes of rice, up 1.14 percent in volume. However, by May 31, the total rice inventories of all businesses amounted to 1.7 million tones, which put pressures on the domestic rice price.

The ministry also reported that animal husbandry has scaled down due to concerns of both breeders and consumers about diseases. At the same time, lower purchasing power as a result of the economic crisis and rising input costs have eaten into farmers’ profits. Difficult access to capital plus high interest rate is posing more problems to this sector.

The situation is the same in the fishery sector. The export of aquatic products also met with difficulties such as technical barriers in developed markets.

HDBank agrees to sell Manulife's life insurance products

The HCM City Development Joint Stock Commercial Bank (HDBank) has signed an agreement with Manulife to distribute the life insurer's products through its branches.

The deal turns HDBank into a one-stop shop for customers' financial planning and needs.

Initially, only the bank's HCM City branches will sell the insurance products, but soon more branches in other places will too.

Over 104 trillion VND of government bonds mobilised

The State Treasury has announced that over 104 trillion VND of Government bonds have been mobilised since the beginning of the year, equivalent to 61.3 percent of the planned amount for 2013.

The Treasury has also reviewed planned spending worth more than 259 trillion VND from the State budget’s frequent expenditure. During this process, they discovered over 23,000 incorrect details in 11,200 transactions, suspending the payments worth 318 billion VND.

The treasury has also sped up payments to fundamental construction projects taking place across the country.

Accumulated capital disbursement through the State Treasury this year has reached over 76 trillion VND, accounting for 34 percent of the allocated plan, including advances.

Of this amount, the expenditure for the construction capital reached more than 54 trillion VND, with 22 trillion VND coming from government bonds.

The State Treasury has declined 14.5 billion VND payments due to discrepancies between the bid price and the amount requested and because of missing payment forecasts.

No subsidized home loans made in first week

In the first week of the Government’s VND30-trillion home loan program being implemented, no loans have been disbursed as individual customers have begun learning about how to apply for such low-interest credit, according to the central bank.

The lender banks designated for the program are expected to disburse their first loans this week after the applications that meet the requirements provided in the Ministry of Construction’s Circular 07/2013 are accepted.

The banks have contacted the developers of budget apartment projects, especially in Hanoi and HCMC, pending the ministry’s announcement of apartment projects eligible for the program.

The central bank said only the projects in which home sale contracts have been signed since January 7 this year are subject to the program. However, to reduce the volume of unsold apartments, some projects with apartment sale contracts signed before that date can still be considered but this rule does not apply retroactively.

Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR