Vietnam International Business Centre debuts

The Vietnam International Business Centre (VIBC) was officially inaugurated in Hanoi on October 10 following a successful three-month trial.

The VIBC’s combined commercial and exhibition centre is the first of its kind in Vietnam, attracting famous brands including Viettel, FPT, Nino, and Pico.

It houses pavilions of the Canadian, Egyptian, South African, and Argentinean embassies, as well as of leading Vietnamese craft bodies such as the Engineering Association, Traditional Craft Village Association, Lighting Association, and Vietnamese Culture Association.

The organising board said VIBC’s International and Associations Areas will create a space promoting Vietnam’s economic image to the world and encouraging cooperation between foreign and domestic businesses. Participating brands can also consult directly with their Vietnamese customer base.

On the opening day, the VIBC’s investors donated VND1 billion to the Vietnam Red Cross’ “Helping Poor Pupils Attend School” initiative.

HCMC hosts support industry enterprise exhibition

An alliance of support industry enterprises, aiming to encourage the future development of support industries in Vietnam, opened an exhibition in Ho Chi Minh City on October 10.

Its organisers include the HCM City Investment and Trade Promotion Centre, the Japan External Trade Organisation (JETRO), the Indian Consulate General, and Reed Tradex Co. Ltd, Thailand’s largest exhibition host.

Five hundred brands from 25 countries and territories are showcasing products and technologies at the event.

Japan, one of Vietnamese support industries’ strategic partners, has sent 46 businesses to this year’s exhibition, along with 85 Indian businesses operating in processing mechanics.

A pavilion of technology stars also made its debut for the first time.

The exhibition facilitates meetings between producers, potential partners, and customers, as well as in-depth discussions with international technology experts on new developments in machine tools, metalworking, welding, robotics, and electronics manufacturing.

HCM City Investment and Trade Promotion Centre Director Pho Nam Phuong said the exhibition helps Vietnamese businesses promote their products and encourage the domestic support industry to explore the opportunities offered by cutting-edge international technology.

Vietnam to import 600,000 tonnes of cotton in 2013

Vietnam will import some 580,000-600,000 tonnes of cotton this year, up nearly 15 percent from last year’s figure.

In the first nine months of the year, cotton imports reached nearly 430,000 tonnes, worth US$864 million, a year-on-year increase of 35 percent.

The Vietnam Cotton and Spinning Association attributed the increase in cotton imports to the rising demand for cotton fibers of domestic garment and textile firms.

Last year, Vietnam purchased 420,000 tonnes of cotton from abroad, compared to only 150,000 tonnes in 2005, becoming one of the world’s top five cotton importers.

The US, India, Australia, Brazil, Ivory Coast, Pakistan, China and Indonesia are major cotton suppliers for Vietnam. Among them, the US makes up 43.5 percent of the nation’s total cotton import.

Local milk exported to 26 countries

Vietnam Dairy Products Joint Stock Company (Vinamilk) announced on October 10 that its dairy products have been exported to 26 countries around the world.

Key export markets include the US, Australia, Canada, Russia, Japan, Thailand, China, Turkey, Iraq, Sri Lanka, the Philippines, the Republic of Korea, and the Middle East.

In the past nine months of this year, Vinamilk earned VND4,700 billion (around US$230 million), mostly from nutrients, condensed milk, fresh milk, soya bean milk, and yogurt.

From 2008 to 2012, the company’s export revenue grew by 62 percent, from VND1,215 billion to more than VND3,712 billion thanks to its high-quality products.

Vinamilk applies the Codex international food standard to meet strict requirements from the US, Australia, Japan and other demanding markets.

Since 2007, the firm has invested over VND500 billion in developing five cow farms in Tuyen Quang, Lam Dong, Binh Dinh, Nghe An and Thanh Hoa provinces.

It has a plan afoot to open three more cow farms in Tay Ninh, Ha Tinh and Thanh Hoa provinces and creates link to more than 5,000 cow-breeding households to ensure its daily purchase of 450 tonnes of fresh milk (over 60 percent of the country’s total output).

Vietnam expects to get more ODA from EU

The European Union (EU) will annually grant more than 300 million euro in official assistance development (ODA) to Vietnam, announced Ambassador and Head of the EU delegation to Vietnam Franz Jessen on October 10.

Franz Jessen said the EU is considering its ODA loans for Vietnam in the 2014-2020 period which may be higher than the previous years’ level although it is reducing its ODA to other countries.

He said middle-income countries are not entitled to get ODA, but Vietnam is among low-middle-income countries.

Franz Jessen informed that in the next three weeks, many EU delegations will visit Vietnam along with 70 European businesses.

At present, the EU is the largest donor of non-refundable aid to Vietnam. The Union is also Vietnam’s second biggest ODA provider, with more than US$11 billion in the 1996-2010 period that has greatly contributed to the country’s socio-economic development.

The EU granted around US$1.1 billion for Vietnam in 2012, making up 13.24% of its total aid amount provided by foreign countries. About 32.5% of EU financial assistance (approximately US$324.05 million) is in the form of non-refundable aid.

Vietnam Farm Expo 2013 opens in HCM City

Various kinds of farm produce dominate Vietnam Farm Expo 2013, which opened at Tan Binh Exhibition and Convention Centre (TBECC) in Ho Chi Minh City on October 10.

On display are key export items such as rice, tea, coffee, cacao, cashew, mushroom, sugar, and a number of handicraft products, as well as latest processing and preserving technologies.

The five-day expo provides a good venue for local and foreign businesses to share experience in farming and environment protection and seek cooperation opportunities.

The participation of 150 businesses from Vietnam, Australia, Thailand, Malaysia, Indonesia and the Philippines is expected to help the host country develop its trademarks and expand export markets.

Profit targets the major headache for banks

As credit growth remained low as of the end of September while bad debts have kept on rising, many banks are facing a challenge in fulfilling this year’s profit targets.

Since July 31, many banks have announced that they will meet this year’s profit targets. However, those goals may be beyond their reach as the business situation has turned sour.

According to a press release of the Government Office after the regular meeting late last month, the banking network as of September 20 reported credit growth rate of 6.05% against late 2012. Meanwhile, another report of the central bank showed that credit growth rate was 6.45% as of the end of August.

These figures suggest that lending activities declined during the period while local credit institutions earlier had expected to push up credit growth rates in the second half of the year.

As credit accounts for over 80% of banks’ income, it is hard for banks to reach full-year profit targets if credit growth rates have declined as of the end of the third quarter.

Nam A Bank, which posted up credit growth rate of nearly 25% by July 31, is still unsure about its profits.

Tran Ngo Phuc Vu, general director of Nam A Bank, said that the bank has sacrificed this year’s profits to offer low lending rates for customers, thus expanding its customer base and total assets. As a result, the profit was VND13 billion by July 31 compared to VND184 billion at the end of 2012.

Statistics of the central bank’s HCMC branch showed that half of 14 banks based in the city reported profits at below half of 2012’s figures.

In addition, bad debts are also a big problem as banks have to set up reserve funds for these loans. Although banks are trying to tackle bad debts, the ratio of non-performing loans has increased steadily month after month.

In HCMC, 14 local banks reported bad debt ratio of 5.65% by January 31 but the ratio increased to 5.96% in March 31 and 5.99% in August 31.

According to Viet Capital Securities Company (VCSC), Vietcombank obtained VND3.7 trillion in pre-tax profit in the Jan-Sep period, down 16% year-on-year, while risk provisions increased 17% to VND3 trillion.

High bad debts have also affected financial capability and business efficiency of banks and curbed credit growth of the banking system.

The report of VCSC also said that banks are facing rising bad debts and a slump in profits due to the gloomy real estate market. Banks find it hard to liquidate mortgaged assets that are properties while competition in the industry has become fierce.A

Vinashin to complete debt restructuring in 2013

Troubled national shipbuilding group Vinashin will complete debt restructuring within this year, said Vinashin chairman Nguyen Ngoc Su.

Speaking at the quarterly press meeting of the Ministry of Transport last week, Su said debt restructuring is the central task of Vinashin’s reform. The total amount of debts at US$4 billion can be divided into three groups: a foreign debt worth over US$600 million, domestic debts worth around VND29 trillion and other smaller debts.

For the domestic debt, around VND12 trillion has been restructured through bond issue. The bonds have value of 30% of the debt and carry interest rate equal to that of the government bond.

Another VND17 trillion will be restructured in the fourth quarter of this year or early next year at the latest, Su said.

Vinashin has also reached agreement with creditors and obtained approval from the international court in the U.K. to restructure the foreign debt and it will issue bonds on October 10. The enterprise will also sell other debts with the combined value of over US$100 million at under 30% of value of the debts.

Up to now, Vinashin has solved parts of the US$4-billion debt and sought the way out for the remaining. The enterprise will solve the debt problem within this year or early next year at the latest, Su stressed.

Concerning the restructuring of Vinalines, Deputy Minister of Transport Nguyen Hong Truong said that the Government has approved the plan, ordering that Vinalines will only focus on three sectors, shipping, services and seaports. The enterprise has basically divested capital from non-core businesses.

Vinalines has sold over 90% of overseas ships given approval of the Government. It has evaluated the remaining vessels and will sell them within this year.

Besides, the Government has given nod for Vinalines to delay key shipbuilding programs until after 2020 as the global shipping industry has yet to recover. Therefore, Vinalines’ debts have been rescheduled, meaning that it will not pay interest rates now and will pay the principal after 2020, Truong added.

Local buyers outnumber foreign clients at woodworking expo

Companies joining this year’s woodworking and handicraft products expo which finished up in HCMC last Sunday said that they had mainly sold products to local customers at the event though the fair was host to help them find importers.

Initial statistics of the Handicraft & Wood Industry Association of HCMC (Hawa) indicates that ten members attending the exhibition earned total sales of around VND700 million at the four-day event.

According to Nguyen Thanh Binh, director of Nguyen Thanh Co. Ltd, only one third of customers bought products for exports. These clients came from other Asian countries, many of them Chinese traders, who only purchased a few sets of furniture as samples before placing orders with bigger volume, Binh said.

Many enterprises having products showcased at the expo said that the number of foreign visitors was small compared to demand of local firms and that those foreign visitors seen in previous years were mostly absent this year. That is because the exhibition was organized at a time when customers had already placed import orders enough for the year, they explained.

The 13th event was organized by the city’s Department of Industry and Trade, the Vietnam Trade Promotion Agency and Hawa with an aim to support small- and medium-sized enterprises to promote products, seek outlets and expand export markets.

More foreign airlines are coming

Many foreign airlines are planning to open flights to Vietnam after Etihad Airways of the United Arab Emirates launched a direct air route between Abu Dhabi and HCMC last Tuesday, the Civil Aviation Administration of Vietnam (CAAV) said.

Vo Huy Cuong, deputy director of CAAV, said that numerous foreign airlines had got nod from the Ministry of Transport to open services to Vietnam and that his authority was awaiting the submission of business plans from these air carriers.

In particular, the transport ministry has received a document from India appointing its airline SpiceJet to fly to Vietnam. The Indian airline however has yet to send a specific business plan to the local authority.

Similarly, Ethiopian Airlines from Ethiopia is also making plans to fly to Vietnam. CAAV and representatives of the African airline held several meetings in July, 2013 to prepare for the direct route launch.

Besides, another airline of South Africa is also going to launch services to Vietnam, Cuong said, adding CAAV didn’t restrict frequencies and routes of foreign air carriers flying to Vietnam.

According to Vietnam News Agency, Thai low-cost airline Nok Air has recently announced a plan on opening flights to Vietnam, seeking to offer daily flights from Bangkok to Hanoi and HCMC next year.

Many firms at EPZs, IPs suspend operation

The list of enterprises stopping or temporarily suspending operations and reducing production at export processing zones (EPZs) and industrial parks (IPs) in HCMC is getting longer due to lingering economic difficulties.

According to statistics provided by the HCMC Export Processing and Industrial Zones Authority (Hepza), the January-September period saw 20 enterprises suspending operation, including 13 foreign-invested ones with chartered capital of US$18.4 million and seven local firms (VND122.8 billion).

Besides, 21 other enterprises dissolved in the period. Among these, there are five foreign-invested enterprises with total investments of over US$6 million and 16 local ones with over US$1.544 trillion.

According to Hepza, high costs of workshop lease, inefficient operation, and operation restructuring are among reasons choking off enterprises.

Besides, due to business difficulties, 15 foreign-invested and 20 local enterprises announced to cut their production output by 20-30%. These enterprises are those producing building materials, interior decorations, electric equipment and apparel products.

Such moves of enterprises resulted in over 1,170 laborers being laid off in the nine-month period.

Regarding the information which says that foreign-invested enterprises at EPZs and IPs incur huge losses and are suspected of transfer pricing, a representative of Hepza said that there has not official statistics about the number of enterprises reporting losses in the period.

Last year’s report of Hepza indicated that up to 114 out of 416 foreign-invested enterprises at EPZs and IPs in HCMC reported losses and did not pay corporate income tax.

However, according to Hepza, only Vietnamese enterprises as a whole faces difficulties caused by economic difficulties while the foreign-invested enterprises do not and still achieve slight growth in production and export.

In the nine-month period, the export turnover of enterprises at EPZs and IPs was estimated at US$3.4 billion, equivalent to 66.67% of the year’s target and up 6.2% year-on-year. Meanwhile, enterprises imported US$2.5 billion worth of products, declining by 10.7%.

Besides, January-September investment attraction inched up by 48.22% year-on-year to over US$480 million, with foreign investments accounting for over US$341 million, or an increase of 114.27%.

Nevertheless, most of the fresh foreign-invested projects licensed in the period were of small and medium scale.

Meanwhile, in terms of domestic investments, EPZs and IPs attracted US$138.8 million in the period, down 15.7% from last year’s same period. The reason for this are domestic economic situations remaining difficult, declining purchasing power, huge inventories, according to Hepza.

Central Highlands coffee growers receive credit loans

More than 1,500 coffee growing households in Lam Dong province’s Di Linh district have been provided with credit loans for coffee re-cultivation so far this year.

According to the district’s People’s Committee, the Bank for Agriculture and Rural Development provided loans worth 104.3 billion VND (5 million USD) to help local coffee growers develop over 1,442 hectares for more effective coffee growing.

In addition, local authorities and the bank organised workshops on coffee re-cultivation, encouraging the application of effective methods among the farmers.

According to the provincial Department of Agriculture and Rural Development, nearly 23,000 hectares of coffee in Lam Dong province need to be redeveloped. They have targeted 9,8000 hectares to be re-grown and about 800 hectares to be newly-planted in order to raise productivity and output.

With more than 146,000 hectares designated for coffee growing, the province expects to increase productivity to at least 2.8 tonnes per hectare by 2015 and form sustainable coffee production areas.

Di Linh currently cultivates 41,520 hectares of coffee, making it the largest coffee growing area in the province.-

Dong Thap focuses on fulfilling industry promotion plans

It is expected that industry promotion funding of Dong Thap province in 2014 will reach 2.792 billion VND, of which the local funding is 1.543 billion. The Vietnam Economic News reports.

To fulfill this year’s industry promotion plans, Dong Thap province’s Industry Promotion and Development Consultancy Centre is implementing a number of measures such as closely monitoring on-going industry promotion projects, quickly handling arising problems and creating favorable conditions for the beneficiaries.

According to reports from the centre, in the first nine months of this year, it has coordinated with beneficiaries to carry out most of the registered industry promotion projects. More specifically, the center organized five vocational training classes in handicrafts for 142 rural workers in Lai Vung, Cao Lanh and Tam Nong districts and five other classes to start business for 145 trainees in local small businesses and production units.

The centre also aided millions of VND for local enterprises to build technical performance models and apply modern equipment and technologies as well as providing them with mechanical facilities. It also implemented numerous industrial development consultancy, cleaner production and energy efficiency projects.

According to Mai Van Doi, Deputy Director of the provincial Department of Industry and Trade, during the nine-month period, the provincial industry promotion activities have helped rural industrial facilities expand their production and business, making an important contribution to the 6.7 percent growth of the provincial industrial production value. The industry promotion campaigns also improved awareness of the enterprises of changing production process and products designs, helping further raise the provincial product value.

However, Doi also said in the remaining months of this year, there are a lot of works to do to fulfill this year’s plan such as organising three vocational training classes for 180 rural workers in Thanh Binh, Cao Lanh and Tam Nong districts and three other classes to start business for the local production households and improving professional skills for mechanics.

To complete this relatively large work volume, Doi asked the provincial industry promotion center to quickly carry out the unimplemented industry promotion projects, closely monitor those projects under implementation and rapidly handle arising problems.

In the long term, the center needs to improve the efficiency of industry promotion activities, encourage the participation of local workers and production units and mobilise more social power resources for industry promotion. It also needs to gain more experience from industry promotion models of other localities, such as the energy efficiency and cleaner production models.

In addition, the center needs to continue to organize vocational training courses for the local rural workers, call for more cooperation among small production households to ensure product supplies and expand markets. The centre should coordinate with the local authorities, businesses and production units to create close connections in implementing new industry promotion models, seeking new markets and suitable equipment to help the rural industrial and handicraft units reach a sustainable development.-

Vietnam Social Policies Bank reduces interest rates

Prime Minister Nguyen Tan Dung on October 9 issued a decision on the adjustment of lending interest rates for three credit programmes at the Vietnam Bank for Social Policies.

Accordingly, families living near the poverty line can enjoy a rate which is only 20 percent higher than that for poor households, instead of 30 percent as in the old decision.

The interest rates for clean water and environmental sanitation programmes in rural areas and for business households in underprivileged areas are also reduced to 9.6 percent from 10.8 percent annually, equivalent to 0.8 percent per month.

The decision took effect from October 9 and are applied to new loans.-

Textile and garment materials to develop domestically

Vinatex has encouraged its member businesses and other enterprises in the textile and garment industry to invest in production of materials including fabric and fiber, and to form a complete material supply chain. Report by the Vietnam Economic News.

The textile and garment industry will be investing in material production, said Vietnam National Textile and Garment Group (Vinatex) Deputy General Director Hoang Ve Dung at a Ministry of Industry and Trade’s regular online meeting reviewing activities in September and the first nine months of this year.

The ministry’s statistics show that in the first nine months of 2013, the textile and garment industry exported products worth 13.154 billion USD, up 18 percent from the same time last year. The US, the EU, Japan and the Republic of Korea (RoK) were the biggest importers of Vietnamese textiles and garments, with exports to these markets accounted for 49, 15, 12 and 9 percent of the industry’s export revenue, respectively.

However, businesses said that they had to compete with rivals from other textile producing countries in buying materials, and that material suppliers took the advantage of material shortages to increase material prices by 10-15 percent. These problems affected the accomplishment of orders, they added.

Dung said that the textile and garment industry is relying considerably on imported materials and that the sector has satisfied only two percent of its demand for cotton and one eighth of its fabric demand and made 140,000 tonnes of low and normal quality fiber each year. Although it made strenuous efforts, the textile and garment sector could find only 48 percent of all materials it needed in 2013 domestically. The rate for VINATEX alone is 54 percent.

The Trans-Pacific Partnership Agreement (TPP) is expected to be signed in late 2014. Businesses must follow fabric and fiber origin principles if they are to benefit from tax preferences according to TPP. This means that Vietnamese textile and garment businesses must produce materials themselves apart from making products according to the order of foreign partners if they are to benefit from TPP-based tax preferences.

Vinatex has encouraged its member businesses and other enterprises in the textile and garment industry, including foreign direct investment (FDI) companies, to invest in production of materials including fabric and fiber and form a complete material supply chain. In the first half of this year, the group implemented 46 projects with a total investment capital of VND6.144 trillion, most of them are material production projects. Three fiber projects, including Vinatex-Hong Linh, Phu Bai 2 and Dong Van fiber plants have been put into production to provide the market with an additional 1,270 tonnes of Ne30 fiber. Besides, Vinatex put into operation its Yen My textile plant, while the Texhong Group from Hong Kong, China put into use a fiber plant in Quang Ninh Province. These projects are expected to add value to textile and garment products and decrease the sector’s reliance on imported materials, Vinatex Deputy General Director Dung said.

Speaking at the regular online meeting, Deputy Minister of Industry and Trade Le Duong Quang said that the Vietnamese textile and garment industry encourages foreign investors to invest in developing materials in Vietnam so as sector businesses can benefit from TPP-based preferences. But, foreign investment in this field should be controlled properly to avoid a situation in which FDI businesses sway the domestic textile and garment material market, he said.

Textile and garment businesses need to continue strengthening their positions in traditional markets and look for new, potential markets while taking the initiative in using resources and investing in equipment and technology. They also need to develop complete production processes, shift from making products according to the order of foreign partners to operating under the mode of FOB (free on board) and ODM (original design manufacturer) to add value to products, and strengthen their distribution networks to maintain niches in the domestic market.

Biomass power to be priced higher next year

The prices of biomass power will increase by nearly twice when the Government issues a decision on a mechanism supporting power projects running on solid wastes late this year, said the Center for Renewable Energy under the Institute of Energy.

Nguyen Duc Cuong, director of the center, told at a conference on renewable energy projects in An Giang Province held last week in HCMC that the price of power generated from bagasse, husk, waste and landfill will rise to 6.1 U.S. cents, 7.3 cents, 10 cents and 7.3 cents per kWh.

According to Cuong, when the new policy comes out, Vietnam Electricity Group (EVN) will have to buy all such biomass power without negotiations.

The mechanism of supporting power projects running on wastes is being mapped out by the Ministry of Industry and Trade.

Cuong said that the low power prices have discouraged investors from investing in renewable power projects. Therefore, the aforementioned prices can help investors have benefits and boost investments in the biomass power sector, he added.

The current total power capacity in Vietnam is around 26,000 MW, with renewable power generated from waste, wind, bagasse and solar energy accounting for 3.7% and expected to be raised to 9.4% in 2030, according to the Institute of Energy.

The potential of biomass power in Vietnam is huge as there are over 100 million tons of materials generated each year. Vietnam targets to have the biomass power capacity of 500 MW in 2020 and 2,000 MW in 2030.

SBV wants banks to settle gold loans

The State Bank of Viet Nam has told commercial banks to settle outstanding gold loans early in a push to wipe the slate clean by the end of this year.

The government is eager to prevent gold hoarding, a common habit among Vietnamese, to boost liquidity in the fragile economy.

Banks must actively negotiate with customers to either convert gold loans to dong loans or repay them ahead of schedule, the central bank said.

Nguyen Hoang Minh, deputy director of the central bank's HCM City branch, said City-based commercial banks were yet to settle 150,000 taels of gold loans (roughly 7 tonnes).

Despite this, some industry insiders have claimed the amount of gold being kept in HCM City banks is more than 45 tonnes.

Banks reported only managing to cut two tonnes worth of outstanding gold loans since early July, but claimed they were in active negotiations over converting more into dong credits.

Southern Bank, Sacombank, ACB, Eximbank, and VietA Bank are among the institutions with outstanding gold credits.

According to bankers, difficulties had arisen as gold lending contracts are primarily long-term, while customers were understandably reluctant repay loans early.

Gold lending contracts typically have terms of 10-15 years, while borrowers are resisting making the switch from gold loans to dong loans as they are subject to higher interest rates.

In addition, many gold borrowers have found themselves in financial difficulty resulting from the commodity's sharp price rise in recent years.

Meanwhile, local lenders have all closed their position on gold deposits, having settled deposit accounts worth 100 tonnes of gold by June 30, 2013.

To date, the SBV has licensed 12 banks to provide asset-keeping services for precious commodities such as gold.

Unlicensed banks cannot provide gold-keeping services to new customers, but can keep gold for existing clients who have yet to withdraw.

The banks licensed to perform asset-keeping services are: Vietcombank, Vietinbank, BIDV, Agribank, MHB, AB Bank, VietCapital Bank, BaoViet Bank, TienPhong Bank, Lienviet Post Bank, ACB, and MB.

Tra fish farming area needs trimming

The area under tra fish farming should be reduced to prevent any further oversupply, which has already dragged down prices in the last few years, heard a seminar held in Can Tho on Wednesday.

Nguyen Van Kich, deputy chairman of the Viet Nam Tra Fish Association, said tra fish output exceeds export demand, causing a decline in prices.

"[The] output should be reduced to improve prices," he said.

To make things worse, the farming area increased by 4.2 per cent in the first eight months of this year.

Tra is farmed mostly in the Cuu Long (Mekong) Delta and 96 per cent of the output is for export.

Nguyen Huu Nguyen, chairman of the Chau Phu Fishery Co-operative in the Mekong delta province of An Giang, said if tra supply and demand are not balanced, farmers would continue to suffer losses in coming years.

The ratio of tra farmers suffering losses was 9.4 per cent in 1993, but rose relentlessly to nearly 50 per cent as of last year, according to the Can Tho University.

The university's Dr Vo Thi Thanh Loc said Viet Nam accounts for 97 per cent of the world's tra fish exports.

But the country has not studied global demand or zoned tra fish farming areas, causing oversupply, she said.

"A committee should be set up to forecast the movements of the tra fish market," she said.

The delta's provinces should be assigned quotas for area and volume to avoid oversupply, she added.

Participants at the meeting said unhealthy competitiveness among exporters is another reason for the decline in export prices.

Export turnover fell from US$1.8 billion in 2011 to $1.75 billion last year, according to the association.

In the first eight months of this year, the figure was down 2.5 per cent to $1.1 billion, it said.

Le Chi Binh, deputy chairman of the An Giang Province Fishery Association, said creating links between exporters and farmers to ensure quality and output is a sustainable measure for the sector's development.

This would enable exporters to stop farming the fish themselves and also reduce risks for farmers, he said.

Farmers and exporters have to sign contracts to share obligations and rights, he said.

Exporters now farm 50-70 per cent of tra fish themselves and individual farmers, the rest.

Vo Hung Dung, deputy chairman and general secretary of the association, said the quality of tra fish strains should be improved and farming areas should follow zoning plans.

Exporters should focus on developing new export markets, he said.

The EU and the US are now Viet Nam's largest tra fish importers.

Accessibility key to property problems

Public policies promoting home ownership and real estate investment are not tampered with and remain in place to nurture the market, which is recovering but still fragile, stated the US's National Association of Realtors' spokesperson in Viet Nam.

Vinh Nguyen, the NAR president's liaison in the country, was speaking at a seminar held by the HCM City Real Estate Association (HOREA) in the city on Tuesday. He said: "Our top priority is to ensure home ownership remains affordable and accessible."

One of the greatest threats to this is mandating a high down payment that would keep qualified buyers out of the market, he said.

To ensure a real-estate recovery, the US continues to offer tax breaks to promote home ownership and property investment, he said.

The breaks include deduction of interest on mortgages from income for tax purposes and waiver of capital gains tax on up to US$250,000 on the sale of the primary house for an individual and $500,000 for a married couple.

The association is working on visa reforms to benefit global house buyers, he said.

HOREA chairman Le Hoang Chau said Viet Nam's housing market needs policies to ensure reasonable prices and to see recovery.

"For many middle – and low-income people house acquisition is still out of reach."

He compared the prices of social housing in Indonesia and Viet Nam, saying in the former it costs $7,500 for a one-bedroom apartment and $15,500 in case of two bedrooms, while in Viet Nam the prices are double.

Indonesia's average income is higher.

He also said the price structure needs to be tweaked in Viet Nam, pointing out that developers have to pay for land and also for the right to use it.

High construction costs due to steel and cement price hikes, and mortgage interest rates of up to 25 per cent in 2008 and around 13 per cent now are other hurdles, he said, calling for a further lowering of the interest rates.

Tortuous administrative procedures involved in developing a project also adds to the price in the form off high management and opportunity costs, he said.

The Government's programme to lend VNÐ30 trillion ($1.43 billion) at low interest rates to buyers and developers of low-priced housing should be accelerated since less than 1 per cent of the amount has been disbursed so far.

A representative from Savills Viet Nam's HCM City said the disbursement is a positive sign that the market is reacting to the package and it may have a positive impact on demand in the residential market. The city housing market saw impressive growth in the third quarter, with the highest number of units being sold since the same period in 2011 and a rise of 52 per cent year-on-year.

Customer ID required for large value transactions

Customers who make transactions of precious metals and stones valued at VND300 million (US$13,636) or more in a day must provide identification to credit institutions.

According to a newly issued decree relating to the Law on Anti-Money Laundering, credit institutions are also required to demand customer identification from customers making irregular large value transactions.

Besides precious metals and stones, real estate transactions must also report customer identification to relevant authorities.

Khanh Hoa rides high export turnover to surpass plan

The central coastal province of Khanh Hoa posted export turnover of more than US$860 million in the first nine months, exceeding its yearly plan by 8 per cent.

The foreign-invested sector took the lead with export value of $430 million. It was followed by the private economic sector with nearly $360 milllion. The remainder came from the State-run sector.

The major export staples included 830 tonnes of cashew nuts, 754,000 tonnes of white sand, 50,000 tonnes of seafood and 12 vessels.

SEC borrows $16 million to raise its capacity

The Gia Lai Sugar-Thermal Power Joint Stock Company (SEC) approved a plan to borrow VND350 billion (US$16.6 million).

The loan, to be sourced from Asia Commercial Joint Stock Bank in Gia Lai Province, will help SEC raise the capacity of the Ayunpa sugar plant from 3,200 tonnes of sugar cane to 6,000 tonnes .

The mortgaged property for the loan will consist of the plant assets and production lines.

Firms told to get with the times

The chairman of the Banking Training and Consultancy Institute (BTCI), Le Mai Lan, has called on businesses to adapt to the changing environment or risk being left behind.

Speaking at a conference on business transformation held in Ha Noi yesterday, the banking chief said a ‘wider' economy had exposed holes in effectiveness and productivity.

The call comes as macroeconomic factors have battered local businesses who are grappling with high inventories and decreasing financial resources; primarily due to being unable to tap into business opportunities or finance for debt repayment.

The effects have created ripples across the banking sector with increases in bad debts, slow credit growth and low profits.

The chairman of the Viet Nam Chamber of Commerce and Industry, Vu Tien Loc, agreed that Vietnamese businesses had been hit hard. In the first nine months of this year alone, more than 40,000 firms closed or suspended operations, while nearly 10,000 reduced their operations.

Loc said the number of enterprises reporting losses was still high, with 66 per cent of companies unable to pay corporate taxes.

"The most important solution for businesses is to save themselves by transforming. Both banks and enterprises need to transform," he said.

He added that the banking system could provide capital and debt consultancy for businesses.

Douglas Jackson, BCG Group's global director said firms needed to address an epidemic of volatility, poor positional advantage and poor profitability, adding that transformation would be difficult in larger corporations with complex management structures.

The BCG expert also said businesses opting for a strategy of transformation needed to create a ‘change agenda', a mechanism for necessary changes and manage resources.

Nguyen Huu Thai Hoa, FPT's strategic director, said the partnership between businesses and banks was critical to efforts to adapt to market volatilities, adding that transformation required a renewal of corporate administration, technology and labour.

The BTCI and the US Omega Performance Group have signed a strategic co-operation agreement on training professionals in credit and risk management in line with international standards.

The agreement aimed to provide benefits to the banking and finance communities and other businesses to improve human resources and competitiveness.

Industrial exhibitions feature top technological products in HCMC

Four exhibitions opened yesterday in HCM City showcasing modern metalworking and other products and technologies.

The first, "Business Alliance for Support Industry in HCM City," is organised by the HCM City Investment and Trade Promotion Centre and Japan External Trade Organisation.

It attracted more than 90 Japanese and domestic companies from the automobile, motorcycle, electronics, and other sectors.

"We have a big space for business exchanges in five areas: moulds, injection-moulds and presses, electric and electronic parts, transport machinery parts, and metal processing," Hirotaka Yasuzumi, managing director of JETRO in HCM City, said.

This would help companies find partners easily, he added.

Two other exhibitions, Metalex Vietnam and Nepcon Vietnam, bring together 500 well-known brands from 25 countries and territories.

Duangdej Yuaikwamdee, deputy managing director of Reed Tradex, the organiser, said: "Industrialists can discover how they can improve their productivity with the right machine tools and metalworking technologies."

Indian engineering show

Indian engineering exhibition INDEE Viet Nam has attracted 85 leading engineering Indian companies who are showcasing some world-class products.

Preeti Saran, India's ambassador to Viet Nam, said the Engineering Export Promotion Council of India (EEPC) organised events like this all over the world, and this is their first exhibition in Viet Nam.

The exhibitors are from diverse fields like machinery tools for the automobile, technology, agriculture, and textile industries.

These are very important sectors for Viet Nam, she said.

"Viet Nam is a pillar of India's Look East Policy," she said, adding, "Our bilateral trade and investment relationship is growing day by day."

Yet trade and investment co-operation between the two countries do not match their potential, she said, expressing her hope that the Indian engineering exhibition would further boost Indian trade and investment relations with Viet Nam.

Anupam Shah, chairman of EEPC India, said: "I feel that automotive components and assembly is a big market for Indian companies in Viet Nam."

The four expos, at the Sai Gon Exhibition and Convention Centre in District 7 and to run until October 12, are expected to welcome more than 10,000 visitors.

Car sales driven by incentives

New car sales in Viet Nam soared to their highest level in three years, lifted by a brighter outlook for the economy, attractive financing deals, price discounts and reduced car registration fees.

The country's 18 leading car makers sold a combined 9,785 units in September, up 24 per cent over a month earlier and 28 per cent over same period last year, according to the Viet Nam Automobile Manufacturers Association (VAMA).

Of the figure, 4,070 units were cars and 5,715 units were trucks, up 32 per cent and 19 per cent month-on-month, respectively, said the association, which represents 18 car makers.

"This is the sixth consecutive month the industry volume has been higher than the same period last year," said VAMA chairman Jesus Metelo Arias in a statement released yesterday.

"With the current trend of recovery in the industry we still maintain the forecast of 109,000 units compared with the original forecast of 100,000 units at the beginning of the year," he added.

Besides attractive financing deals, price discounts and reduced car registration fees, which applied from the beginning of this year, a brighter economic outlook was attributed to the surge in car sales.

According to a recent World Bank report, Viet Nam's economic growth rate is projected to reach 5.3 per cent in 2013 and 5.4 per cent in 2014, while its inflation rate will be at 8.2 per cent at the end of 2013.

The bank said Viet Nam's macro economy is relatively stable thanks to the government's proper financial and monetary policies intended to stabilise the economy.

Meanwhile, September's increase of car sales was also attributed to the traditional shopping peak towards the end of the year, which usually begins in mid-September.

In order to trigger the market, which fluctuated following the economic slowdown, most car makers have reduced retail prices from VND5 million(US$240) to VND70 million ($3,330).

While Nissan cut prices for its compact Sunny sedans by between VND5 million ($240) to VND28 million ($1,330), depending on version, Toyota previously cut its Vios compact sedans by VND30 million ($1,430).

Also in the compact segment, Ford reduced its Fiesta 1.6L model by VND28 million ($1,330) to VND525 million ($25,000) for 4 doors version, and by VND26 million ($1,240) to VND580 million ($27,620) for its 5 doors version.

Bigger cars also experienced sharp price cuts, such as Toyota Camry by VND40 million, while Toyota Altis, Honda Civic and Focus saw a cut of VND20 million ($930) each.

The biggest discount came from the Korean made Kia Sorento at VND70 million, while the two other Kia brands, the New Carens and Picanto, saw cuts of VND10 million ($480) and VND5 million, respectively.

Meanwhile, instead of direct price cuts, other cars makers are offering buyers many promotional gifts, such as free car insurance, free car tuning packages and instalment purchases with preferential interest.

Viet Nam imported 3,000CBU (Complete Built Unit) cars worth US$55 million in September, up 33 per cent in volume and 18 per cent in value in August, according to the General Department of Customs.

This brought the total number of automobile imports in the first nine months to 24,000 units worth $476 million, up 22.5 per cent and 6.1 per cent respectively.

Customs statistics showed that Viet Nam's auto imports decreased to a six-year low last year, reaching only 27,000 cars in 2012, down 50 per cent on 2011.

Vingroup development backed by banks

Vingroup announced the signing of a US$250 million international syndicated loan agreement to finance their development projects on Wednesday.

According to the group, the three-year amortizing loan pays coupon of Libor + 5.5 per cent p.a [Libor stands for London interbank offered rate]. The first $100 million would be available for disbursement this month.

Credit Suisse AG, Singapore Branch and Maybank Investment Bank Berhad were Mandated Lead Arrangers and Bookrunners ("MLABs") and Deutsche Bank AG and Singapore Branch were Mandated Lead Arranger ("MLA") of the loan. Besides being one of the MLABs, Credit Suisse acted as Coordinator for the loan. General syndication will be launched by the end of October.

Le Thi Thu Thuy, Vingroup's Vice Chairwoman and CEO, said the fundraising success proved that international financial institutions were prepared to support Vietnamese companies with a proven track record, adding that the funding would offer another source of capital to other Vietnamese corporations.

The deal made Vingroup the first Vietnamese real estate company to successfully tap into the international syndicated loan market.

Vingroup was also the first Vietnamese company to issue offshore convertible bonds, raising gross proceeds of $100 million in 2009 and accessing the convertible bond market again in 2012 with a $300 million issuance.

In May, Vingroup and a Warburg Pincus consortium entered into definitive agreements for the consortium to invest $200 million to acquire an approximately 20 per cent equity interest in Vincom Retail, a subsidiary of Vingroup that owns, operates and develops the largest portfolio of shopping malls across Viet Nam.

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