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.

VSIP model to boost industrial development in Quang Ngai

The Vietnam-Singapore Industrial Park (VSIP) Joint Venture will break ground on an urban-industrial-service complex project in central Quang Ngai province on September 13.

The ceremony will be attended by Prime Minister Nguyen Tan Dung and his Singaporean counterpart Lee Hsien Loong.

The urban-industrial-service complex is the VSIP Joint Venture’s fifth project in Vietnam and the first investment model in the central region. It will be built on an area of 1.226 hectares in Tinh Tho and Thinh Phong communes of Son Tinh district.

It consists of 600 hectares of industrial land in Dung Quat Economic Zone and 520 hectares of urban-service land near the centre of Quang Ngai city. In the initial stage, the joint venture will focus on developing 260 hectares of industrial-urban-service land with total funding of nearly US$340 million.

VSIP’s four projects in the provinces of Binh Duong, Bac Ninh and Hai Phong have attracted nearly 490 local and foreign investors from 23 nations and territories in the world with total capitalization of over US$6.2 billion, and have created more than 140,000 jobs for local people.

At the groundbreaking ceremony, the management board of Dung Quat Economic Zone will grant investment licenses to the first four projects.

Quang Ngai province is strongly committed to providing support for the implementation of VSIP-Quang Ngai projects and building an open mechanism for attracting foreign investors, especially from Singapore.

Vietnam attends CAMBUILD 2013 Expo in Cambodia

Nearly 20 businesses from 20 countries in the world including Vietnam have participated in the Cambodia International Building & Construction Industry Expo (CAMBUILD 2013) in Phnom Penh from September 10-12.

Among Vietnamese products on show are construction ceramics, electrical equipment and fire extinguishers.

The construction sector in Cambodia has developed stably in recent times. In the first half of the year, its total investment capital reached US$1.94 billion, up 123 % against same period last year.

Vietnamese businesses and producers consider the country as a potential market for their construction materials such as steel, iron, and cement as well as household goods.

Japanese group invests in local company

HCM City-based Anphabe Joint Stock Company says it has received a sum of strategic investment from Japan’s RGIP Investment Company under the world’s human resource service provider Recruit Holdings.

Accordingly, RGIP will possess 19.8 % shares of Anphabe JSC and sign important strategic cooperative agreements.

It will move towards developing a strong community network of managers of Anphabe.com and identifying Anphabe as a partner to provide the first comprehensive recruitment service in Vietnam with four service groups including a recruiter trademark strategy, recruiter trademark innovative solutions, the implementation of a recruiter trademark plan and a recruiter trademark market survey.

According to RGIP President Akihiko Okamoto Vietnam is one of nations which have great potential for economic development as there is always a shortage of human resources, especially highly qualified resources to meet business demand. He expressed hope that Anphabe will bring many new values at strategic level to both job seekers and recruiters in Vietnam.

Recruit Holdings is now Japan’s leading human resource service provider which has its branches operating worldwide with a turnover of around US$10.5 billion last year. The group includes 109 member companies with 484 offices and 25,518 staff globally.

Vietnam, US businesses cooperate in developing cotton industry

Cotton and fibre businesses from Vietnam and the US gathered at a meeting in Ho Chi Minh City on September 11 to discuss on how best to develop the cotton industry.

Nguyen Hong Giang, Secretary General of the Vietnam Cotton and Spinning Association, said better understanding about the US’s cotton industry and the Vietnam’s spinning industry plays an important role in facilitating business transaction. It also improves cooperation and helps minimise the risks surrounding price and market fluctuation in cotton supply and purchase for both sides.

Hank Reichle, a member of the American Cotton Shippers Association which supports businesses in purchasing or using US cotton, said in the next few years, the association will prioritise businesses purchasing materials and selling products in Vietnam.

Vietnamese and US associates exchanged information about productivity, supply and demand of cotton on both markets, measures to manage price risks and policies for cotton in  countries like the US and China.

In recent years, Along with strong growth of the fibre production industry, the country’s demand for cotton materials for production has increased. The imported volume of cotton increased from 150,000 tonnes in 2005 to 420,000 tonnes in 2012.

Vietnam was considered one of the top ten cotton users and one of the top five cotton importers in the world in 2012. Cotton imported from the US accounts for 40-50 percent of the country’s total imported cotton volume annually.

Border trade aims for US$30 billion in 2020

Vietnam aims to achieve a border trade revenue of around US$30 billion by 2020, up 12.3% from a year earlier following a development plan recently approved by the Prime Minister.

Under the zoning plan on adjustments to the development of border economic zones (EZs) until 2020 with a vision for 2030, the country is expected to reap approximately US$14 billion in export earnings, while import value will hit nearly US$16 billion.

By 2030, cross-border trade is predicted to reach US$50 billion, in which export earnings will make up approximately US$22 billion.

Vietnam hopes to develop 26 border economic zones by 2020, with a focus on building a uniform infrastructure, issuing incentive policies, ensuring security, and combating  EZ-related crimes.

A number of selected border EZs will be provided with State budget for further development in line with the nation’s five-year socio-economic development plan.

Vietnam’s trade deficit with RoK reaches US$8 billion

Bilateral trade between Vietnam and the Republic of Korea (RoK) hit  US$15.12 billion in the first seven months of this year, according to The Ministry of Industry and Trade (MoIT).

Vietnam’s exports to RoK contributed US$3.57 billion to the total, while its imports amounted to US$11.55 billion.

After 20 years of maintaining cooperation and trade exchange, Vietnam has always faced import surplus from the RoK.

In the reviewed period, the country’s trade deficit jumped to nearly US$8 billion, US$2 billion lower  than the 2012 level. Last year’s two-way trade turnover achieved US$21.1 billion,  including US$5.6 billion  from exports and US$15.5 billion from imports.

Vietnam’s Korean major imports included mobile phone, garments and textiles, computer and spare parts, leather, iron, steel and plastic materials.

Agricultural trade fair set to boost business

The Vietnam International Agriculture Trade Fair - AgroViet 2013on the theme “Towards safe agriculture and sustainable development” will take place in Hanoi from November 14-17.

This well known and reputable event is held annually by the Ministry of Agriculture and Rural Development (MARD).

Around 450 stands are expected to take part in this year’s event helping to promote the image of Vietnam’s agriculture on both the domestic and foreign markets.

In addition, the fair will contribute to promoting brand names and honouring outstanding agriculture, forestry, handicraft products, and specialities from each region as well as artisans, handicraft makers, traditional craft villages, businesses, farms and cooperatives.

The fair will host a wide range of activities such as seminars, cunsultancy forums, fact finding tours and exchanges.

It will give businesses a prime opportunity to promote their brand name, attract investment and expand markets through promotional activities.

The organising board will present insignias for participant units and certificates of merit to outstanding entrants.

Food, beverage on show in HCM City

A wide range of food, beverages and technologies used in food processing and packaging are on show in Ho Chi Minh City on September 11-14.

The Vietfood & Beverage – Propack Vietnam 2013, the 17 th event of its kind, drew over 300 exhibitors from Vietnam, Germany, US, Poland, India, Japan, Thailand, the Republic of Korea, Malaysia and Indonesia, who also came to seek partners.

Besides new products, samples are also on offer.

The Ministry of Industry and Trade forecast that Vietnam’s consumption in 2011-2016 will grow by 5.1 percent each year as spending per capita will annually rise by 4.3 percent by 2016.

During the period, domestic sales of canned food are expected to rise by 4.3 percent in volume and 10.4 percent in value.

Sales of alcoholic and non-alcoholic beverages, meanwhile, are forecast to go up 7.5 and 8.2 percent, respectively.

Singapore believes in Vietnam’s long-term future

Singapore is set to demonstrate its faith in Vietnam’s long-term future with Prime Minister Lee Hsien Loong due to officiate the ground-breaking of the fifth Vietnam - Singapore Industrial Park (VSIP) in Quang Ngai province on September 13, according to The Straits Times.

In a news story published on September 11, when the Singaporean Prime Minister arrived in Vietnam for a three-day official visit, the Singapore top daily writes that with the visit, the relationship between Singapore and Vietnam will move a significant step forward.

The Straits Times says, “As the two ASEAN nations mark the 40th anniversary of their diplomatic ties, Lee will formally launch a strategic partnership agreement with his Vietnamese counterpart Nguyen Tan Dung.”

The agreement is a wide-ranging blueprint for deepening bilateral ties, covering areas such as trade, training, defence and security, it adds.

Ties between the two ASEAN members have strengthened over the last four decades, in particular, their economic links.

According to the daily, Singapore is the second largest foreign investor in Vietnam with a cumulative registered capital of 36 billion SGD across 1,200 projects as of June.

Bilateral trade between the two countries totalled 15.8 billion SGD last year, nearly doubling the 6 billion SGD just 10 years ago.

The first VSIP was built in 1996 and since then, all the four projects have attracted investments from 22 countries totalling nearly US$6.4 billion and created about 140,000 jobs.

Also on PM Lee’s official visit to Vietnam , Channel News Asia runs an article reviewing the two countries’ relations over the past 40 years.

Channel News Asia quotes officials from both countries as saying that ties between Singapore and Vietnam are excellent.

It writes: “One symbol of the success of ties between both countries is the Vietnam - Singapore Industrial Parks, with four developed already”.

The visit will also see two key events, including the elevation of ties between the two countries to "strategic partnership", and the launch of the fifth VSIP, worth nearly US$340 million, by the two prime ministers, it says.

The fifth park - VSIP Quang Ngai will comprise a 600 hectare industrial park and another 520 hectare site zoned for commercial and residential purposes near downtown Quang Ngai city.

With the new facility, the Vietnam-Singapore Industrial Park developments make up 6,000 hectares in the country, making it the largest integrated township and industrial park development in Vietnam.

German firms launch vocational initiative

The German Business Association (GBA) has launched an advanced initiative to help Viet Nam improve its vocational training system.

The initiative will be based on a world-class dual vocational training system of Germany.

Certain training periods for students will be conducted at selected vocational training institutes and universities and will be combined with intensive mid-term practical experience phases of three, six or 12 months at German companies in Viet Nam, according to a statement sent by GBA to Viet Nam News.

The first sustainable vocational training-partnerships between German companies in Viet Nam and vocational training institutions have already started.

In southern Dong Nai Province, BOSCH Viet Nam has begun its partnership with LILAMA 2 Technical and Technology College, while in Ha Noi MESSER and BBRAUN have started their partnership with the University of Technology and Education Hung Yen, according to GBA.

"German companies in Viet Nam are making long-term investment in sustainable ways and we want to develop professional vocational skills of young people to provide them the best conditions to grow successfully with German companies in Viet Nam" said Elmar Dutt, chairman of GBA.

In March, a Joint Declaration of Intent on Human Resources Development was signed by Germany's Federal Foreign Office, Federal Ministry for Economic Cooperation and Development of the Federal Republic of Germany and Viet Nam's Ministry of Education and Training and Ministry of Labour Invalids and Social Affairs.

Stronger regulation boosts VN commerce

Viet Nam has become more connected with the world economy by joining the global accreditation and evaluation structure system more deeply, deputy minister of Science and Technology Nghiem Vu Hai has stated.

Hai was speaking at the opening of the Asia Pacific Laboratory Accreditation Co-operative(APLAC) yesterday.

Founded in 1992, APLAC acts as a steering agency for accreditation bodies – entities which test and certify export products for quality - and harmonises accreditation practices in the Asia–Pacific region.

A licence granted to a product when it meets the quality standard in an APLAC member country will also be valid in other member nations, saving time and money for exporters.

The Bureau of Accreditation of Viet Nam, established in 1990, now manages nearly 700 laboratories, inspection centres and certification bodies across the country. It became a member of APLAC in 2000.

This year's co-operative general assembly is taking place for the second time in Viet Nam and has drawn 135 members from 35 participating countries and territories

"The meeting is a good chance for Viet Nam to promote trade investment by improving its accreditation system. The country has developed its own way of doing things since the 1990s but now we face new challenges as world development continues," Hai said.

Quality control systems are becoming increasingly important in Viet Nam, with many lucrative export deals reliant on products reaching tough international quality standards.

"This event will help member countries exchange experiences in management and setting up accreditation systems. APLAC will help ease the procedures and time frames for officially recognising goods and commodities from each member country," Hai pledged.

"Viet Nam has been an important member of the APLAC for years. This current busy general assembly shows that the Asia Pacific region is interested in the development of Viet Nam," chairman of the APLAC, Nigel Jou, told Viet Nam News.

"Viet Nam and other ASEAN economies including Malaysia, Singapore, Indonesia, the Philippines and Thailand, have already established their own accreditation systems, and become Multual Recognition Arrangement (MRA) Signatories to APLAC," he said.

He added that Viet Nam is boosting its economy, and the country would gradually meet the challenges facing the environment and food safety, helping its export products align with international expectations.

"BOA takes a critical position in the development of Viet Nam because it is a matured accreditation body and provides accreditation service to the conformity assessment bodies that have a key influence on the elimination of technical barriers to trade," he explained.

These obstacles to trade exist because of the high number of technical regulations. While they ensure better quality, they complicate financial deals.

Director of BOA Vu Xuan Thuy said Viet Nam has developed 700 bodies working in accreditation, proficiency testing and evaluation.

Thuy stressed that the meetings keep one eye on the potential establishment of a ‘world with one criterion and one certificate'.

"If a Mutual Recognition Arrangement is reached, Viet Nam's goods will be globally accessible with world-wide capable accreditation and certificate bodies," Thuy said.

"It means that the findings of any Vietnamese laboratory, inspection centre or accreditation body must be recognised by all APLAC member countries," Thuy added.

Nigel Jou said BOA will need to develop a full range of further accreditation services to accommodate market needs.

"We'll do all we can to support Viet Nam build a fit-for-purpose accreditation system because Viet Nam is a member of ASEAN and plays an important role in the development of the region," he said.

The general assembly will last until Saturday.

Binh Dinh terminates delayed projects

Binh Dinh province management authorities have recently revoked investment certificates of three different projects due to unacceptable delays.

Emerald of Vietnam, a $125 million luxury resort in Nhon Hoi Economic Zone (EZ) by Russian investor ALT, made almost no progress over the last three years since being licensed.

Local authorities gave them a deadline of June 30 to submit plan scale documents, which they did not meet.

Another, capitalised at $285 million, was a general port and associated logistics project by state shipping firm Vinalines.

The third was a $1 million infrastructure and telecom services project by EVN Telecom, now merged with telco giant Viettel.

Besides these projects, a number of other projects were warned repeatedly about delays and the province has continuously struggled with tardy investors.

Vinh Hoi resort by US-backed Viet My Hotel and Tourism Company Limited was licensed in 2007 at $250 million. It would include an international convention centre, hotel, golf course, and villas and was slated to finish next year.

The project hasn’t made it off paper though due to land acquisition woes.

“We are doing our best to speed up land acquisition to support our investors in realising their projects,” said the head of Binh Dinh EZ Authority Man Ngoc Ly.

Other delayed projects that received a warning included Korean garment exporter JWD Industries, Phong Mai wind power plant and the Trung Hoi and Tan Thanh resorts.

Ly warned that if these investors did not see progress by the end of this year, authorities would revoke their certificates as well.

Dong expected to stay stable against greenback

The dong has stabilised again against the US dollar after losing ground for more than two weeks.

At 2:20 yesterday, Vietcombank bought the greenback at VND21,080 and sold it at VND21,150, respectively down from VND21,120 and VND21,200 in late last week.

At BIDV, the dollar buying price was unchanged at VND21,110 but its selling rate was weaker by 10 dong at VND21,170.

Meanwhile, the inter-bank exchange rate remained at VND21,036, the dollar buying price at the State Bank of Viet Nam's transaction offices was at VND21,100 and the selling price at VND21,246.

Analysts attributed the weakening of the dollar to many reasons, one of which was the country's low trade deficit.

The central bank with foreign reserves estimated at around US$30 billion has intervened strongly in the foreign exchange market and is ready to protect the dong, they said.

Since the inter-bank interest rate has increased again since mid-July, banks have chosen to lend on the inter-bank market instead of buying the greenback as they did in the past, they said.

This has eased demand for the dollar on the market, they explained.

The gold market is also stabilising after the central bank held several gold auctions, helping narrow the gap between global prices and domestic gold prices.

According to Vietcombank Securities, foreign direct investment this year has topped $12.63 billion, almost 20 per cent up year-on-year. Investors have already brought in $7.6 billion, adding to the dollar supply, a company representative said.

Financial analyst Can Van Luc told Thoi Bao Kinh Te Viet Nam (Vietnam Economic Times) that though the dollar demand often increases in the latter part of the year, it would not affect the stability of the foreign exchange market.

However it was likely to see some fluctuations due to seasonal factors, he said.

The central bank is also careful in fixing the forex rate in a manner that does not stoke inflation, he said.

He called on the central bank to disseminate forex information to protect people from rumours.

BIDV Securities has forecast the dong to remain stable for the rest of this year.

Inflation, expected to be around 8 per cent this year, would not affect the forex rate much, it said.

The 5-6 per cent difference in dollar and dong deposit rates has dissuaded people from converting the dong into dollars.

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.

Metro Project receives Euro850 million funding

The Asian Development Bank, the European Investment Bank, and the Spanish Government on September 11 unanimously agreed to finance the construction of Metro Line 5 Project in Ho Chi Minh City.

According to Le Khac Huynh, Deputy Head of the City Urban Railway Management Unit, Asian Development Bank will provide US$500 million (around Euro330 million), European Investment Bank will support with Euro150 million, and the Spanish Government will give Euro200 million. The remaining money will come from the Vietnamese Government.

Metro Line 5 will start from Saigon Bridge and end at Can Giuoc bus station in the Mekong Delta province of Long An, stretching across 23.4km and link Line 1 and 2. The construction will kick off in 2015.

Metro Route No.1 will run from Ben Thanh Market in District 1 to Suoi Tien Amusement Park in Thu Duc District and Route No. 2 will run from Thu Thiem New Urban Area in District 2 to An Suong Bus Station in District 12.

Military Bank appoints new vice chairman

Military Bank (MB) management board member Luu Trung Thai has been appointed vice chairman of the bank, according to an announcement on the MB's official website.

The announcement follows the appointment of two deputy general directors last month, Le Hai and Uong Dong Hung, who were previously responsible for regional business and customer service.

In late August, the bank reported it had deployed around VND321.4 billion (US$15.3 million) to upgrade work equipment and facilities, VND300 billion ($14.3 million) to invest in affiliates, and nearly VND3.6 billion ($171,400) to expand business and invest in the inter-bank market.

BIDV delays fixing time for international bond issuance

The Bank for Investment and Development of Viet Nam (BIDV) has not set a specific time for issuing international bonds, said the bank's spokesperson, Quach Hung Hiep.

The statement follows approval given by the State Bank of Viet Nam (SBV) last Wednesday for BIDV to issue up to US$500 million worth of international bonds this year.

"We've intended to issue these bonds for a long time and the confirmation from SBV is a positive step for BIDV to capitalise on opportunities. This doesn't mean we have fixed a time for the issuance," said Hiep. BIDV planned to issue international bonds from 2011.

Trade fair for Vietnamese goods opens in Ha Noi

A trade fair showcasing Vietnamese goods is taking place in Ha Noi with the participation of over 100 local firms.

On display are food, textiles and garments, motorbikes, home appliances, fine arts and handicrafts.

Dao Van Binh, President of the Viet Nam Fatherland Front's Ha Noi Chapter, described the event as a good chance for local firms to better introduce their products to customers and seek more co-operation opportunities. It will run until next Monday..

VAMC comes to the aid of credit groups

The State Bank of Viet Nam (SBV) will offer refinancing loans to credit institutions up to a maximum of 70 per cent of the price of bonds issued by the Viet Nam Assets Management Company (VAMC) during the bad debt resolution process, according to a SBV circular issued on Tuesday.

The refinancing will be applicable only to domestic credit institutions and not wholly-foreign investment companies or joint ventures.

To receive the refinancing, credit institutions will have to own unpaid special bonds issued by VAMC, and set up annual funds for provision of VAMC's bonds according to Government Decree 53/2013/ND-CP and the SBV guidelines.

The refinancing rate for the loans will be decided by the Prime Minister in every period.

SBV also issued another circular, 19/2013/TT-NHNN, giving concrete regulations for VAMC's operation. It includes conditions for bad debts purchased using VAMC's bonds, restructuring of purchased bad debts, as well as a mechanism for reducing or exempting interest rates for bad debts in every concrete case.

Both circulars will come into effect on September 15, 2013. They are expected to fit enough of a legal frame for VAMC to buy bad debt using its special bonds.

VAMC started operation on July 26 with a registered capital of VND500 billion ($23.61 million). It's expected to resolve VND30 trillion ($1.42 billion) worth of bad debts this year.

Credit target to be out of reach

Experts are expressing doubt about Vietnam’s credit growth target for the whole year after the first eight months failed to show progress.

The banking system’s credit growth through August 20 was 5.4 per cent and total deposits of credit institutions increased 9.5 per cent, according to the General Statistics Office.

“We think that the target of a 12 per cent credit increase this year is very difficult to achieve,” said Alan Pham, chief economist at fund management firm VinaCapital.

In the first eight months of the year, credit rose 5.4 per cent or 0.67 per cent per month. “Now to achieve an increase of 1.5 per cent per month for the rest of the year is a pretty tall order,” said Pham.

Pham added that any rush to increase lending over such a short time would lead to poor risk management, which Vietnam has already struggled with.

Maybank Kim Eng Securities (MBKE) said in a recent report that credit growth appeared to be slowing again.

Credit growth at the end of May was 2.98 per cent. The figure rose to 4.5 per cent by the end of June and 5.02 per cent by the end of July. “These figures show that credit has improved during the past few months but began to slow again in August with 5.4 per cent,” the firm stated.

Vietnam’s four big banks -Agribank, BIDV, Vietinbank and Vietcombank - together account for 44 per cent of the banking system’s outstanding loans and hardly saw any credit growth.

In the first half of the year, Agribank saw credit growth of 4.2 per cent, BIDV 7.6 per cent, Vietinbank 0.37 per cent and Vietcombank minus 1.5 per cent, according to MBKE.

The MBKE report also said the loan default rate (LDR) of the whole system fell from 89.36 per cent early this year to 87.3 per cent in the first six months. Therefore, with credit growth at only 5.4 per cent in the first eight months, MBKE said the target of 12 per cent for the whole year was unlikely.

VinaCapital’s Pham said the State Bank seemed to think that credit growth could be pushed up simply by encouraging banks to lend more. “However, banks find that more lending is not in their interest, because loan rates have declined significantly this year. So it is no longer profitable to offer loans. Also, more lending can lead to more non-performing loans (NPLs), and banks are now very careful about adding to NPLs already on their books.”

Meanwhile, the State Bank still expressed optimism about credit growth of 12 per cent for the whole year.

Nguyen Thi Hong, head of the Monetary Policy Department under the State Bank, said that in recent years, credit often grew higher in the last months of a year and “it is likely the country reaches its target of 12 per cent for the whole 2013.”

Phu Yen province vows space for new refinery

The central province of Phu Yen 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 provincial People's Committee, said that by the end of this month, the province will 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 September 8 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 will 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 1.7 billion USD to 3.18 billion USD, which will double the oil refinery's annual output to 8 million tonnes.

The plant will 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' Technostar Management Ltd – decided to increase investment based on market demand.

The oil refinery will 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 USD 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.

Enterprise association opens in Japan

The Government of Japan and the Vietnamese Embassy in 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.

Semi-conductors offer ‘huge opportunities'

The market for integrated circuits and semiconductors in Viet Nam has huge potential, offering great opportunities for domestic and foreign enterprises to invest in and develop the industry, experts said at the SEMI Viet Nam Semiconductor Strategy Summit in HCM City yesterday.

The summit, the first of its kind in HCM City, is a platform for local and international industrial experts, state management agencies and businesses to discuss strategies and opportunities in the Viet Nam semiconductor industry.

Speaking at the event, To Thi Thu Huong, deputy director general of the Department of Information Technology under the Ministry of Information and Communications, said that the IC industry was a core support industry for the development of other industries, including information technology, telecoms, and mechanical and automatic engineering.

Acknowledging the importance of the industry, in the past few years, the Vietnamese Government has issued policies to encourage development of the IC semiconductor industry.

In response to Government policy, HCM City has outlined its IC development plan for the 2013-20 period.

It aims to develop human resources, incubating IC businesses, designing and manufacturing prototypes, promoting the semi-conductor and IC industries and building a fabrication and a design centre.

Following Intel's US$1 billion micro-chip plant in Sai Gon Hi-Tech Park in 2006, HCM City established the Semiconductor Industry Association (HSIA) in March this year.

It has also developed a plan to build the country's first wafer fabrication plant in the high-tech park.

A wafer is a thin piece of semiconductor crystal used to make ICs.

Pham Ba Tuan, senior advisor for the Waferfab project, said the plant, invested in by the Sai Gon Industry Corporation (CNS), would help build an ecosystem for the semiconductor industry, covering product design to IC manufacturing and testing and finally the semiconductor supporting industry.

"It will be sufficient to cover domestic demand for ICs, preventing the spending of hard-earned money from labour-intensive industry on purchasing semiconductor goods," he said.

Tuan said the need for ICs in Viet Nam was close to $2 billion last year. The demand is expected to continue to increase in the coming time. Currently, most of these goods were imported, he added.

In addition, despite the contraction of worldwide semiconductor revenue, Asia continues showing positive development.

This indicates that the IC need in the region remains strong, he added.

"The growing demand of the domestic market will give the Waferfab project a very good chance to meet some of this demand," he said.

Potential applications for wafers in Viet Nam include SIMS cards, electronic ID/licence cards, radio frequency identification, sensor interfaces IC, phone chips and many others, he added.

"For IC development, we need to build a strong workforce that meets international quality standards for the field of design and fabrication of semiconductor chips," said Vu Dinh Thanh, rector of HCM City University of Technology.

IC is at the heart of many electronics and is considered to be one of the most important support industries in Viet Nam.

Apart from financial investment, development of a skilled workforce, partnerships with established microelectronic markets, and other needs must also be addressed to develop the IC industry.

Human resources are crucial to the industrialisation and modernisation of the country. However, high-tech human resources in the country are considered insufficient and poorly skilled, Thanh said.

Viet Nam will eventually have about 22 companies related to IC design, requiring about 14,000 personnel this year.

All of the surveyed companies said they would increase the number of engineers working in Viet Nam.

However, Viet Nam's universities only offer electrical engineering, electronics and telecommunications subjects for study and do not provide training for IC design.

He called on universities, institute and businesses to join hands to develop the human resource for the IC industry.

In an effort to meet a part of HR demand, Thanh said his university as well as others have developed collaboration programmes with Japanese and Swiss universities on training programmes in IC design, and have provided short training courses for enterprises.

The summit was organised by SEMI in collaboration with Sai Gon Hi-Tech Park and the HCM City Semiconductor Industry Association.

New milk factory can meet all VN demand

Deputy Prime Minister Hoang Trung Hai yesterday attended the inauguration of one of the world's most modern milk factories in Viet Nam.

The mega-factory is owned by the Viet Nam Dairy Products Joint-Stock Company (Vinamilk) and located in southern Binh Duong Province.

Other senior government officials were also on hand at the opening ceremony for the US$115 million factory, which follows the new baby-formula plant that opened in April.

Thanks to modern technology, the plant is expected to contribute to stabilising milk prices in the market and improving nutrition, Hai said.

"It should also improve foodstuff safety and hygiene for consumers," he added.

Local milk prices will be more competitive compared to other imported milk, he added.

The factory is equipped with the most advanced technology in automation and integration by Sweden's Tetra Pak.

Bert Jan Post, executive director of Tetra Pak Viet Nam, said the factory operated on an automatic basis, from the feedstock input to the final product storage, under the control of the central computing system.

This ensures the best product quality and production efficiency.

The packaging materials and finished products are handled by autonomous laser-guided vehicles (LGV) systems, resulting in optimal quality control at efficient costs.

In addition, the factory has the first and largest smart warehouse supplied by Germany's Schafer Company. The warehouse is earthquake-resistant and fully automatic.

Mai Kieu Lien, chairman and general director of Vinamilk, said with the most advanced technology globally, the factory was expected to help Vinamilk become one of the 50 largest dairy companies in the world, with revenue of US$3 billion in 2017.

The milk factory, covering an area of 20ha at My Phuoc Industrial Park in Binh Duong Province, "can meet the demand of liquid milk for the entire Vietnamese market," Lien said.

Capacity upon completion of the first phase will be 400 million litres of milk per year, the equivalent capacity of nine existing factoriess.

Capacity in the second phase will be raised to 800 million litres of milk per year by 2015.

The company targets a growth rate of 10-15 per cent per year for the fresh milk market segment.

Vinamilk has five large-scale farms with 8,000 dairy cows which can provide 90 tonnes of milk per day.

It has entered into contracts with over 5,000 dairy farming households that own a total of 65,000 cows, supplying 460 tonnes of raw milk per day.

In the future, the company will invest in three more farms in central Ha Tinh (3,000 cows), southern Tay Ninh (10,000 cows) and central Thanh Hoa province (20,000 cows).

It is expected to meet the requirements of quality feedstock and contribute to sustainable development of the dairy cow husbandry industry in Viet Nam.

New farms are also expected to raise their own raw materials from 30 per cent to 40 per cent.

On the occasion, Vinamilk CEO Lien donated 150,000 boxes of 100 per cent fertilised fresh milk produced by the factory, equal to a value of VND1 billion ($48,076), to 10 provinces that have the highest percentage of malnutrition in children aged below 5.

These boxes of fresh milk will be donated through the National Institute of Nutrition.

Bridge ‘catalyst for Mekong', PM

Prime Minister Nguyen Tan Dung on Tuesday hailed efforts taken by all stakeholders to build the 2.9km cable-stayed Vam Cong Bridge across the Hau River, saying it would catalyze socio-economic development in the Mekong Delta.

Flagging off construction of the US$271-million bridge, he praised the Ministry of Transport, local governments, Vietnamese and Korean enterprises as well as local residents for their contributions.

The bridge will be built by the GS Engineering & Construction and the Hanshin Engineering & Construction companies. GS E&C will be responsible for 80 per cent of the project. Construction will be completed in 48 months.

Dung directed the Ministry of Transport to closely supervise enterprises and contractors and guide them on complying with labour safety regulations. He said they should also work to ensure construction of the bridge is completed as scheduled.

He also asked relevant ministries, sectors as well as authorities in Dong Thap Province and Can Tho City to closely coordinate with Ministry of Transport in clearing land and maintaining security for the project.

At the groundbreaking ceremony, the Prime Minister suggested that authorities in Mekong Delta region mobilise resources for developing its infrastructure and transport system.

He said that alongside major projects like the HCM City – Trung Luong Freeway, Can Tho Bridge, Rach Mieu Bridge, Nam Song Hau and Quan Lo – Phung Hiep Routes, construction of the Vam Cong Bridge will create favourable conditions for enhancing trade between the Delta and southern economic hubs.

This will boost economic development of the Delta in particular and the country in general, he added.

Vam Cong Bridge is the second one after the Can Tho Bridge to cross the Hau River, connecting Lap Vo District in Dong Thap Province with Thot Not District in Can Tho.

The bridge is an important part of a major Mekong Delta infrastructure project that has five sub-projects including the Cao Lanh Bridge, a road linking Cao Lanh and Vam Cong bridges, a road skirting Long Xuyen City and the My An – Cao Lanh Road.

The Vam Cong Bridge stands upriver northwest from the Can Tho Bridge, which was built in 2010 by Japanese companies with funds from the Japan International Cooperation Agency and the Japan Bank of International Cooperation.

The new cable-stayed bridge will be funded by the Economic Development Co-operation Fund of Korea EximBank.

Its main towers with H-shaped columns will make the bridge a local landmark, experts have said.

The six-lane bridge, which will allow for a maximum speed of 80 kilometers per hour, will open to traffic by September 2017, according to Ministry of Transport.

The Mekong Delta is divided by the Tien and Hau Rivers.

Although the My Thuan Bridge over the Tien River and Can Tho Bridge over the Hau River have facilitated local transportation, the central area of the region still needs the Vam Cong and Cao Lanh ferries.

Construction of the Cao Lanh Bridge is expected to break ground soon. The six-lane bridge will be more than 1.3km long and 24.5m wide.

Upon completion, the two bridges will help shorten travelling time from HCM City to An Giang's Long Xuyen City to 2.5 hours from 3.5 hours.