Paper maker targets higher earnings

The Viet Nam Paper Corporation (Vinapaco) targeted earnings of more than VND6.6 trillion (US$314 million) this year, a year-on-year increase of 25 per cent, the corporation announced.

In 2011, Vinapaco also plans to produce 315,500 tonnes of paper, up 23 per cent over last year.

The Viet Nam Paper Association said Vinapaco had ample opportunity to attain their goal because the Vietnamese paper industry met only 70 per cent of domestic demand.

In the coming years, the association said demand would increase by 10 per cent per year.

Vinapaco will continue to expand production, with the second phase of the Bai Bang Paper Plant.

Vu Thanh Binh, deputy director of the corporation, said that his enterprise was now boosting marketing activities and pursuing new markets.

Vinapaco was also focused on export products, Binh added.

An effective distribution system would also be established in many regions to meet increasing domestic demand.

Markets in remote areas would receive more attention from the corporation, with discounted prices offered.

Vinapaco has dedicated itself to fully meeting domestic demand for print and writing paper.

Despite the many advantages to further develop this year, Vinapaco said it faced a number of challenges.

Higher raw material prices were likely to strongly affect production.

Moreover, bank loans were insufficient for Vinapaco member companies to develop production, it added.

Despite the world recession, Vinapaco did well, recording a profit of VND212.3 billion ($10 million) in 2010, up 10 per cent over 2009. None of member companies faced losses last year.

Vinapaco produces leading paper material brands including Hong Ha, Bai Bang paper, Song Duong tissue and Tan Mai print paper.

Local products dominate holiday shopping season

Made-in-Viet Nam products accounted for 85-90 per cent of the market share in the local market during the recent Tet (lunar new year) festival, according to the Ministry of Finance's Price Management Department.

Essentials goods covered by the Government's price stabilisation programme were on sale in many supermarkets, 5-10 per cent cheaper than at street markets.

The stable costs of essential goods during the year's largest festival were attributed to the Government's business support policies. According to the Finance Ministry, subsidised loans were made available for businesses in 42 provinces and cities that implemented the price stabilisation programme with a total investment of over VND2.5 trillion (US$218 million).

With purchases falling significantly in HCM City's street markets after Tet, the prices of many essential foods, including fruits, vegetables, chicken and pork, have also dropped correspondingly compared to the pre-Tet highs.

Pork prices fell by VND5,000-10,000 per kilo to VND85,000 ($4.3) for a kilo of half fat and half lean meat while the price of fruit and vegetables dropped by VND2,000-5,000 to VND7,000-8,000 for a kilo of cabbage and VND8,000-10,000 per kilo of bitter gourd.

Prices of other essential items such as rice and sugar also decreased slightly at street markets.

In contrast to those markets, post-Tet supermarket sales have remained high thanks to promotional campaigns designed to stimulate consumption after the festival.

The Finance Ministry plans to keep the cost of electricity, coal, clean water and bus fares unchanged to maintain market stab.

It will also spend around VND3.5 trillion ($179 million) from the price stabilisation fund and reduce import taxes to stabilise petrol prices.

Cement producers face market glut

The competition in the cement market will become stronger this year as output outpaces demand, experts have said.

Figures from the Ministry of Industry and Trade show that the country produced 50.85 million tonnes of cement last year, equalling 101 per cent of the year's target. However, domestic demand last year was about 48.5 million tonnes, resulting in an excess of about 2 million tonnes.

As at least seven more cement plants will be put into operation this year, the cement surplus is expected to be higher this year, between 5 to 10 million tonnes.

An oversupply of cement had made cement producers hesitant to raise cement prices despite increased input costs, including electricity and coal, which had strongly risen in the past three years, said Le Van Toi, head of the Construction Material Department under the Ministry of Construction.

Cement prices had only increased by between 13-15 per cent since 2008, while coal prices had doubled, he added.

To avoid overproduction, the Ministry of Construction has promoted cement use domestically such as for rural transport construction projects, and reviewing import and export of ashlar paving stones and encouraging the use of non-fired materials.

To ease competitive pressure, many domestic cement producers, including Cam Pha Cement, Viet Nam Cement Industry Corporation, Vinakansai Cement and Thang Long Cement, have sought to increase cement exports to foreign markets such as Cambodia, Laos, Singapore and Bangladesh.

However, the volume of exports to these countries is still modest.

Last year Vinakansai Cement Joint Stock Company, exported nearly 100,000 tonnes of clinker to Singapore and 70,000 tonnes of clinker to India and signed a contract to ship 100,000 tonnes of clinker per month to Bangladesh.

Thang Long Cement Joint Stock Company last month shipped 25,000 tonnes of cement to Africa.

Le Do, general director of Thang Long Cement Joint Stock Company, said his company was eying more exports to Africa, a market with strong potential and high demand.

The country plans to export 1.5 million tonnes of cement this year, an increase of 500,000 tonnes over last year, according to Viet Nam Cement Association.

However, experts warned that cement exports may not bring attractive returns because of high transportation costs.

There are currently 90 firms nationwide producing or trading cement. Of these, 33 are subsidiaries of the State-owned Viet Nam Cement Industry Corporation, five are foreign-invested joint ventures and 50 are smaller producers.

Services sector lifts exports

The services industry has achieved outstanding results in terms of exports considering it is still in its infancy in Viet Nam, the General Department of Taxation says.

Viet Nam's services exports have been constantly rising, going up from US$4.26 billion in 2005 to $7.46 billion last year.

Tourism remains the main export item. It was worth $2.3 million in 2005 and rose to $4.5 million last year, an increase of 14.11 per cent a year on average, higher than the rate for overall services export.

Analysts attribute this to the large number of tourists arriving in Viet Nam. In 2009, for example, there were around 5.049 million foreign arrivals.

Export of transport services, represented mainly by shipping, which were worth $1.16 million in 2005 doubled to $2.30 million last year.

Telecom services are the third major export, with revenues going up from $1.16 million in 2005 to almost $4.8 million in 2010. Vietnamese service providers like Viettel are active in foreign markets like Cambodia.

However, despite the successes achieved by these sectors, the services industry still suffered from many limitations and as a result could reach only 11 per cent of the value of goods exports, the analysts said.

Most service providers lacked size, did not focus on exports, and were relatively inexperienced, they said.

Northern provinces set for bumper harvest

With fresh water and rice seedlings in abundance on farms in northern provinces this year, the winter-spring crop would yield a bumper harvest, said head of the Cultivation Department Nguyen Tri Ngoc.

Ngoc said up to 70 per cent of rice fields in the Hong (Red) delta provinces had been well irrigated after water was discharged from reservoirs to feed farms.

Many provinces have been able to irrigate 90 per cent of their rice fields including Phu Tho, Bac Ninh, Ha Nam, Hai Phong, Nam Dinh and Ninh Binh.

Director of Ha Noi's Agriculture and Rural Development Department Tran Xuan Viet said more than 80,200ha equivalent to 80.3 per cent of the winter-spring crop in the capital city had received water from reservoirs.

He also acknowledged that some provinces such as Hung Yen and Vinh Phuc only received enough water to feed 50 per cent of their crops, due to their high altitude.

This situation would be rectified with plans by the Cultivation and Irrigation Departments to discharge water from reservoirs for the second time, starting on February 13 this year, said Ngoc.

"Circumstances will dictate whether we have an adequate supply of water for the crops," he added.

Favourable weather conditions would help to ensure that the winter-spring crop would be harvested on time, he said.

The National Hydro-meteorological Forecasting Centre had previously said that insufficient rainfall was likely to affect the winter-spring crop across the country.

Head of the centre Bui Minh Tang said the crop would be dependant on water from reservoirs.

Water levels in the Hong River were at 0.45m in Ha Noi on Thursday. The centre forecast that the level would rise to approximately 2m on February 13 after hydroelectricity plant reservoirs released their water.

According to the Irrigation Department, 630,757ha of rice in northern midland provinces are in need of water while 555,000ha in Hong delta provinces are also thirsty.

Breeding industry given 8% target

The Ministry of Agriculture and Rural Development has set several targets for the year, including reaching a growth rate of 7.5-8 per cent for the husbandry industry during the period 2011-15.

The goal is to have a total of 4.28 tonnes of live meat of all kinds and an animal feed output of 12 million tonnes for the industrial husbandry.

To meet the target, the ministry has proposed expanding the industrialised animal husbandry; setting up specialised farming areas linked to processing industries; and increasing the cultivation of grass, corn and soybean to ensure sufficient volume of animal feed and breeding practices.

In addition, the ministry has asked local authorities to devise measures to prevent epidemics like those caused by blue-ear and foot-and-mouth diseases.

It requires all parties to ensure foodstuff safety and hygiene.

To improve the competitiveness of the husbandry industry, several new programmes will be launched.

However, the Vietnamese Market Analysis and Forecast Joint-Stock Company AGROMONITOR forecasts a meat market that will experience fluctuations this year.

The input material costs will continue to increase due to an imbalance between supply and demand.

Moreover, the electricity price, petrol price, labour cost, foreign exchange and interest rate are expected to increase sharply.

The economic recovery with targets of GDP 7-7.5 per cent and GDP per capita of US$1,300 will raise consumer demand this year.

According to the General Statistics Office, the production value of Viet Nam's husbandry sector reached VND35.367 trillion ($1.7 billion) last year, an increase of 5.4 per cent compared to 2009.

With such growth rate, the husbandry sector has become a sector with the biggest growth rate among the agricultural sector (cultivation, husbandry and services).

For the first 11 months of last year, the country's meat import turnover reached $89.8 million, a decrease of 4.4 per cent and 50.4 per cent compared from 2009 and 2008.

Viet Nam also earned $35 million from exporting meat, a decrease of 15.1 per cent and 35.7 per cent over 2009 and 2008, respectively.

Last year, the spread of blue-ear disease and an increase in animal feed price were the two most significant factors that affected the meat supply volume and prices.

Vietnam’s inflation likely to surpass 10 percent

Thirty-two percent of European businesses in Vietnam predict that the country’s inflation rate may reach 6-8 percent in mid-2011 while 35 percent say the rate will exceed 10 percent by the end of the year.

This was the result of a survey on Vietnam's business climate conducted by the European Chamber of Commerce (EuroCham) in Vietnam in the first quarter of this year.

The survey showed that the trust and prospects for business operation of the European business community increased in comparison with the previous similar survey.

Seventy-three percent of businesses taking part in the survey said they focused their operations on the Vietnamese market and that their businesses are doing well in Vietnam. Many of them said they would increase their investment in the country in 2011.  Fifty-four percent of businesses are expected to increase their salary rates by 10 percent this year.

Alain Cany, Chairman of Eurocham, said the first quarterly survey on Vietnam’s business climate demonstrated that most businesses are optimistic about Vietnam's economic outlook in 2011, especially after the resolutions of the 11th National Party Congress were approved.

Vietnam, Laos cooperate in building hydro-electric power plant

Vietnam and Laos have signed a project on building two hydro-electric power plants, namely Xekaman 1 and Xekamn Xanxay in the Lao province of Attapeu, about 75km from Vietnam.

Under the project signed in Vientiane on February 10, the plants will be built at an estimated cost of US$441.6 million. Once completed in 2015, the plants will have a combined capacity of 322MW, 20 percent of which will be used to supply electricity in Laos and the remaining 80 percent will be exported to Vietnam.

The project is part of an energy cooperation programme between the Vietnamese and Lao governments. The programme is of great economic, political and cultural significance, as well as plays a vital role in providing electricity to the two countries.

Coffee buzz surrounds festival

The third international coffee festival will take place in Buon Ma Thuot in the Central Highlands from March 10-13.

More than 160 foreign and local coffee firms will showcase their technologies, products and services at 500 booths of the festival.

There will be an international seminar on coffee attended by representatives from the world’s biggest coffee producers, including Brazil, Columbia, Indonesia, and Ethiopia.

Ethnic groups from the Central Highlands and artists from coffee-growing nations will put on performances.

Among the attendees will be Brazilian football legend Pele.