Rice exports slump as prices rise

Viet Nam's rice shipments in January fell by 24 per cent compared with the same period last year even as export prices of the grain rose by 38.28 per cent.

According to figures released by the Viet Nam Food Association (VFA), Viet Nam exported 307,255 tonnes of rice at US$415.14 per tonne in January. The export volume is 24.11 per cent lower and the price is $38.28 per kg higher than the same period of last year.

Major exports were for the Philippines while shipments to China and African countries fell sharply. Meanwhile, demand for rice imports from traditional markets in the Southeast Asia ceased.

Viet Nam has maintained a large volume of fragile rice exports while shipping 25 per cent of its broken rice to the Philippines and 15 per cent to China.

The country is expected to ship between 300,000 and 350,000 tonnes in February 2014.

VFA has said Viet Nam will face harsh competition from other rice export countries this year.

According to the Department of Cultivation under the Ministry of Agriculture and Rural Development, between 1 January and 8 February 2014, Mekong farmers sowed 1.58 million ha of the 1.6 million ha of rice cultivation areas under the 2013- 14 winter-spring rice crop. Of these, 200,000ha was grown by high yielding rice varieties.

There are three main factors that will affect the world rice markets this year. The first being the coming election in Thailand, one of the world's largest rice exporters. Secondly, the harvest of the winter-spring crop in Viet Nam and lastly, demand from China and African countries which impact the global price of rice, said VFA.

To reach the target of 7 million tonnes of rice exports in 2014, VFA has boosted rice exports to African countries. Viet Nam's rice has been exported to 30 of the 55 African countries, including Ivory Coast, Ghana, Senegal, Angola, and Cameroon

According to a memorandum of understanding (MoU) signed between Viet Nam and Guinea in 2013, Viet Nam will supply 300,000 tonnes of rice per year to Guinea, between 1 April 2013 and 31 December 2015.

Another MoU on rice trade was signed between Viet Nam and Comoros, under which Viet Nam will ship 60,000 tonnes of rice to this African country between August 2013 and December 2015.

The Ministry of Industry and Trade this year will organise trade delegations to Angola and Ivory Coast, with the aim of signing trade deals with these countries.

Vietnam needs to restructure tra fish sector

The farming and processing of tra fish in the Mekong Delta region will encounter more difficulties when a new US farm bill takes effect, yet it’s also an opportunity for Vietnam to restructure the sector in a sustainable way, Vice Chairman of the Tra Fish Association Vo Hung Dung has said.

The US Senate on February 4 gave final congressional approval to a five-year farm bill.

Under the provision, the inspection of catfish, including Vietnamese tra and basa fish (scientifically named Pangasius) , will be moved out of the remit of the Food and Drug Administration and into the Department of Agriculture.

Accordingly, Vietnamese catfish exported to the US market will have to fulfill all requirements set for local products from production to packaging and exporting.

While the move poses challenges, it will also jolt the industry into restructuring for more sustainable production, Dung said.

Pham Anh Tuan, Deputy Director General of the Directorate of Fisheries under the Ministry of Agriculture and Rural Development, said Vietnam is not surprised at the US decision, but Vietnamese farmers and processors will still need time to adapt to the bill.

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), the country exported 380 million USD worth of tra fish to the US in 2013, up slightly from 2012.

Dien Bien aims to welcome over 400,000 visitors in 2014

The northern province of Dien Bien has set its sights on welcoming at least 400,000 visitors in 2014, including 70,000 international tourists.

The province is banking on festivities marking the 60th anniversary of the Dien Bien Phu Victory over French colonialists to attract record numbers of visitors this year.

Along this vein, the provincial department of culture, sports and tourism has refurbished Dien Bien Phu historic relics and upgraded a number of cultural and entertainment sites in preparation for the celebrations.

The province has also recently completed the construction of a museum dedicated to telling the incredible story of the victorious Battle of Dien Bien Phu.

“Around 2,000 documents and artifacts on the Dien Bien Phu victory will be displayed at the museum” says Ms Vu Thi Tuyen Nga, deputy director of the museum.

More than 40 guides providing destination information along with travel tips, hotel and restaurant guides have been published to introduce visitors to the province.

Luxury cruise liner arrives at Chan May port

The five-star cruise liner Celebrity Millennium of Malta on February 11 docked at the Chan May port in the central province of Thua Thien-Hue, carrying over 2,100 foreign tourists and nearly 1,000 crew.

After docking, the holidaymakers joined tours to discover landscapes in the locality, enjoy special cuisines and experience shopping at the imperial capital city Hue, Hoi An ancient town, My Son holy land and the central coastal city of Danang.

According to the management board of the Chan May-Lang Co economic zone, it is expected to welcome about 34 international cruise ships carrying almost 40,000 tourists by the end of the year.

The 91,000-tonne vessel Celebrity Millennium has registered eight arrivals at the port.

In the last ten months of 2013, Vietnam received over 6.1 million overseas arrivals, up 10.4 percent against the same period last year.

Seven new air routes to connect to Can Tho City

A February 11 meeting in Can Tho City has announced the Mekong Delta province’s Can Tho International Airport will soon join three new domestic and four new international air routes.

The new routes will help attract investment and promote trade exchange between the Mekong Delta and other Vietnamese and foreign localities.

The three domestic routes connect Can Tho and Danang, Can Tho and Lam Dong, and Can Tho and Khanh Hoa. The four international routes link Can Tho to Bangkok (Thailand), Xiem Riep (Cambodia), Taiwan (China), and the Republic of Korea.

Another meeting in mid-March 2014 will discuss the new routes in depth with relevant ministries and agencies, Mekong Delta provincial leaders, and representatives from domestic and international airlines.

Tax policy should focus on consumers

Policy makers should pay more attention to tax incentives that help stimulate consumption, experts said.

Associate professor and Dr Le Huy Duc from National Economics University said that since early last year, the Government of Viet Nam offered tax exemptions, tax deductions or extended payment times for enterprises as a relief during the economic slowdown.

However, such incentives were not as effective as expected, Duc said, adding that during past time, most of tax policies focused on supply-side effects through measures stimulating investment and production.

Although many experts recommended to support demand side through reducing value added tax or special consumption tax, such recommendations had yet to be implemented, he said.

In the Whitebook 2014 of Trade, Investment Issues and Recommendations launched last November, the European Chamber of Commerce in Viet Nam (Eurocham) also urged to remove import tax in the Free Trade Agreement that Viet Nam and EU are negotiating.

According to Eurocham, high import tax and special consumption tax [the tax imposed on various imported products like tobacco, beer and wine, cars, private planes and boats to limited import ] caused the surge of smuggling or making fake products and consequently, the State failed to collect proper taxes, reported Thoi bao Ngan hang ( Banking Times).

For example, if Viet Nam's Government removed tax burdens and reformed tax rate for imported wines and alcohols through imposing tax rate based on alcoholic concentration, it would curb smuggling and better control tax payment from legal trade activities.

Dr Nguyen Minh Ngoc from National Economics University said that if tax policies were used as a tool to support enterprises, it was necessary to make them facilitate the innovation in enterprises.

"During economic slowdown, consumers tighten their belt and enterprises must be sensitive to offer products/services that meet consumers' changed paying capacity," she said.

However, Vietnamese enterprises remained passive in innovating, Ngoc said, adding that to adapt to changed business environment, many of them preferred low-price strategy to differentiation strategy [ which focuses on making their products different from others].

To achieve sustainable growth, enterprises had to improve quality of their products and services as well as create their differences, Ngoc said.

"Government needs to have policies that directly reduce tax imposed on products such as value added tax," she said, noting that the move would help enterprises escape from the circle of low-price competitive strategy.

Customs inspections net higher returns

Post-customs clearance inspections helped add over VND1.6 trillion (US$75.87 million) to the State budget last year, 20 per cent higher than in 2012, according to the General Department of Customs.

Duong Phu Dong, head of the Post-Customs Clearance Inspection Department, said that last year, about 2,430 post-customs clearance inspections were conducted, concentrating on enterprises that imported or exported petrol, minerals, electronic equipment, medicines and garment products.

The inspections helped improve enterprises' law compliance, prevent violations and collect more tax arrears and fines for the State's budget, he said.

According to Dong, this year also saw improvements in the legal framework for such inspections, including the introduction of a plan to improve the capacity of clearance forces as well as a new inspection scheme that would align better with the Government's policies and enterprises' activities.

This year, he added, authorities would develop a set of criteria to classify risks when implementing e-customs, particularly focused on enterprises in "sensitive" industries like oil and petrol and mining.

Head of the General Department of Customs Nguyen Ngoc Tuc emphasised that post-customs clearance inspection was the "backbone" of modern customs management and urged further inspections in key fields like goods valuing identification and goods' codes.

According to the general department, last year Viet Nam officially implemented e-customs procedures at all customs offices across the country.

The country aims to have all customs offices and 60 per cent of enterprises use e-customs procedures under its Customs Development Strategy toward 2020 and Customs Reform and Modernisation during 2011-15.

By the end of last year, over 49,000 enterprises – or nearly 96 per cent of the country's customs applicants –used e-customs procedures to trade $239.13 billion worth of goods, over 95 per cent of the national import and export value.

Local dairy firms hike prices in foreign brands’ footsteps

Following the footsteps of Abbott and Mead Johnson, Vietnam Dairy Products Joint Stock Company, or Vinamilk, has announced to hike prices of its products, leading other firms in the industry to hint at a similar action.

According to a statement of Vinamilk, the price spike, at around 6%, took effect on Monday.

The price rise is described by Vinamilk as inevitable as the firm kept its prices unchanged throughout 2013. Higher product prices can help Vinamilk offset a fraction of an increase in production cost this year sparked by a pickup in input material prices, it said.

Nguyen Muoi, the owner of a retail shop on Nguyen Thong Street in HCMC’s District 3, on Monday told the Daily that he had got an announcement from FrieslandCampina Vietnam about a 7-8% spike in Friso powdered milk price in the coming time.

However, a source from FrieslandCampina Vietnam said no decision on specific price increases had been made.

Vu Quoc Tuan, head of public relations at Nestlé Vietnam, said Nestlé Vietnam was consulting its parent company and would make a decision, if any, on price revisions after this fiscal year. But he gave no specifics.

Duong Thi Quynh Trang, head of public relations at Big C, said some suppliers of dairy products had proposed raising prices of some items by around 2-8%.

“Big C is considering their proposals,” Trang said.

Cat Bi airport told to handle more passenger aircraft

Deputy Minister of Transport Pham Quy Tieu has told relevant agencies to work towards allowing Cat Bi International Airport to serve at least four million passengers to meet increasing demand for air travel to and from Haiphong City.

Tieu mentioned the plan during his visit last week to the airport project in the northern port city of Haiphong, more than 100 kilometers northeast of Hanoi. The four million passengers quadruples the number that the airport can receive at the moment and doubles the capacity of the original project, according to the Civil Aviation Administration of Vietnam (CAAV).

Less than one year ago, Airports Corporation of Vietnam and Haiphong City kicked off work on an expansion project at the airport at a cost of at least VND3.66 trillion (around US$174 million) planned for the first phase of upgrade that is expected for completion next year.

The expansion project includes a new 3,050-meter-long, 45-meter-wide runway for modern aircraft such as Boeing B777s, B747s, B767s and Airbus A321s and a parking area for eight Airbus A321s.

The airport will be able to handle two million passengers and 20,000 tons of cargo a year when expansion is complete in 2015.

Contractors said the airport expansion project was progressing as scheduled, with the construction focused on the parking area for aircraft. At least two parking lots are expected to be up and running in the next two months and other parts will be available for use next year.

Currently, Haiphong has air links with HCMC and Danang. When completed, the expansion project will facilitate the launch of more air routes linking Haiphong with other parts of the country as well as international routes. Together with ports and the Hanoi-Haiphong Expressway, the airport will help reduce time and cost for cargo transport to and from this city.

CAAV said Cat Bi was identified as an important international airport to provide a catalyst for socio-economic development in the city and surrounding areas and to serve as a back-up airport for Noi Bai International Airport in Hanoi.

According to a master zoning plan released in 2012 for Cat Bi International Airport until 2015 with a vision for 2025, the airport would be able to handle 8-10 million passengers and up to one million tons of cargo. The capacity for the first phase of upgrade by 2015 will be two million passengers and more than 20,000 tons of cargo a year, and eight million passengers and up to 250,000 tons of cargo by 2025.

The parking area of Cat Bi will be widened to accommodate 16 planes by 2025. The zoning plan also outlines the current terminal at Cat Bi will be home to budget carriers when the new one is put into operation by 2015.

New bypass puts end to Tac Cau ferry service

The Ministry of Transport has opened a bypass in the Mekong Delta province of Kien Giang’s Chau Thanh District as part of Minh Luong-Thu Bay road, putting an end to Tac Cau ferry service.

With the opening of Tac Cau bypass, local people do not have to travel via Tac Cau ferry terminal along a 2km route.

The bypass, finished on January 20, 2014 as part of the southern coastal corridor, cost over VND1 trillion, including the outlays for the construction of Cai Be and Cai Lon bridges.

The first phase of the southern coastal corridor project is 108.8 kilometers of road, with 81.6 kilometers of new road and 18.2 kilometers of upgraded road.

Together with HCMC-Trung Luong Expressway and Can Tho and Rach Mieu bridges, Nam South Hau River road, Quan Lo-Phung Hiep and the southern coastal corridor project will form a road network facilitating development of the Mekong Delta and goods exports through Ha Tien border gate to Cambodia.

The project’s total investment is US$398 million, funded by concessional loans of the South Korean government and the Asia Development Bank (ADB), a grant of the Australian government and Vietnam’s reciprocal capital.

Thaco clients get special offers

Thaco Kia has started the new year by launching special offers for buyers of Kia cars this month, including a special price for Morning LX compact car.

This month Thaco Kia offers a preferential price of VND372 million for Morning LX, VND5 million lower than the current price.

Meanwhile, for Picanto cars, customers can get many accessories. Buying Kia Sorento and Kia Carens cars, customers will be given cards worth VND10 million and VND8 million respectively to have their cars serviced.

Masan Consumer gets new CEO

Masan Group, one of the nation’s largest private sector companies with a focus on the consumption and resources sectors, has announced the appointment of Seokhee Won as chief executive officer of its subsidiary Masan Consumer Corporation.

Masan Consumer, one of the leading food and beverage companies, has some of Vietnam’s most popular consumer brands like Chin-su, Omachi, Nam Ngu, Tam Thai Tu, Vinacafe and Vinh Hao.

Seokhee Won will also serve as deputy CEO of Masan Group.

Won has had 22 years’ experience at global consumer goods firm Unilever. In his most recent role, he was senior vice president, responsible for Unilever’s skincare business in Asia and the Ponds brand globally.

He spent eight years with Unilever Vietnam, from 1997 to 2005, as marketing director and then as vice president, during which he was responsible for Unilever’s entire personal care portfolio.

Ho Tram golf course set to open in March

Ho Tram golf course in the southern province of Ba Ria-Vung Tau, designed by well-known Australian golfer Greg Norman, is scheduled to open in the middle of March this year.

This inauguration schedule was confirmed by Colin Pine, general director of Ho Tram Project Company Limited, during the Investment Day event organized by the government of the province last Saturday to hand investment certificates to investors.

Pine said the total cost of the 18-hole golf course was around US$22 million.

Greg Norman, a leading golf course designer in the world, has designed 76 golf courses and is working on 36 others in the world, according to VietnamGolf magazine.

Thanks to the steep shoreline, beach sand dunes on the hilly terrain, and sea breeze, the Ho Tram golf course is described by Norman as one of the world’s top three which he has designed.

The Grand – Ho Tram Strip, the first resort in the Ho Tram Strip project worth a combined US$4.2 billion, started service in July last year with 541 guest rooms, a casino for foreign passport holders, a conference center, a spa facility, a playground for children, a shopping center and a swimming pool, among others.

Ho Tram Project Company Limited, Pine said, is promoting its casino abroad to attract foreigners to come for gaming.

Ho Tram Strip covers more than 164 hectares along a 2km shoreline in Ba Ria-Vung Tau.

Viettel expands in developing countries

Vietnam’s telecom group Viettel has obtained a license to provide mobile services in the African country of Burundi, one of world’s poorest nations with an average gross domestic product (GDP) per capita of around US$200 annually.

Le Dang Dung, deputy general director of Viettel, told the Daily that Burundi has a population of over 10 million, of which around 10% use mobile services. Therefore, Viettel has seen an opportunity to invest in the market.

The group is preparing to set up Viettel Burundi Company and expand its business network in the country.

Viettel has seen many investment opportunities in Africa. It has plans to expand its business to three new markets every year, raising revenue from the global market to 20-30% of total revenue of the group in 2020, Dung said.

Before entering Burundi, Viettel got the nod to provide services in Timor Leste, Peru, Cameroon, Mozambique, Cambodia, Laos and Haiti.

A source told the Daily that Viettel is seeking business opportunities in Tanzania and Myanmar. In Tanzania, Viettel has plans to acquire a stake in a mobile service company and is waiting for approval.

Viettel failed in the bidding for mobile business licenses in Myanmar last year. It is seeking cooperation opportunities with winning bidders to launch services in the country.

However, the enterprise failed to earn a majority stake of 51% as expected during discussion with partners. Viettel considered Myanmar as having the most potential among its overseas markets, the source said.

The telecom group is still seeking opportunities in Cuba, Kenya and other African nations.

Explaining why Viettel is eyeing developing countries, Dung said that the enterprise has the best chance in these markets. In the global market, Viettel has to compete against large telecom groups such as Telenor, France Telecom and Vodafone.

In addition, Viettel is not afraid of a challenge in the poor nations in contrast to large telecom groups who are hesitant at doing business and have little experience in operating in poor nations.

Last year, Viettel obtained profits of VND35 trillion on revenue of VND163 trillion.

Fuel trader Petrolimex to venture into retail business

Vietnam National Petroleum Group (Petrolimex), the nation’s leading fuel trading firm, is considering opening convenience stores at its gas stations nationwide to generate a fresh revenue stream.

Petrolimex deputy general director Tran Ngoc Nam told the Daily that the stores would be within the premises of the filling stations along main roads to meet shopping needs of road users. Over the past two years, Petrolimex will choose spacious locations for its pumping stations so that it could open convenience stores.

Convenience store business is not a non-core investment as Petrolimex wants to make better use of land at its filling stations to create a value-added service. The firm still focuses on oil and gas trading operations, Nam said.

Petrolimex is still considering the project. Each step must be studied thoroughly, piloted and reviewed. The company will fully implement the scheme when market conditions are mature, he said.

Speaking at a recent review meeting, Deputy Prime Minister Hoang Trung Hai told Petrolimex to build convenience stores at filling stations. The group has launched a pilot store at a gas station in Hanoi.

With a network of 2,200 filling stations, Petrolimex is in a good position to open such stores to serve its fuel buyers, Nam added.

However, a majority of filling stations have little or no room for development of other services.

Oil giant to import coal for power plants earlier than expected

In preparation for the takeover of Vung Ang 1 power station and the construction of Thai Binh 2 thermopower plant, an affiliate of the state-owned Vietnam Oil and Gas Group (PVN) has clinched a deal to import 10 million tons of coal this year.

Following the signing last year of a number of coal offtake framework agreements and memorandums of undertaking to buy coal from Indonesian and Australian suppliers, PV Power Coal will launch official talks over coal imports late this year. Annual import could amount to 10 million tons plus.

This import volume is around one-tenth of what Vietnam National Coal and Mineral Industries Group (Vinacomin) has forecast for coal import from next year onwards.

Vung Ang 1 was connected to the nation’s power grid in late December 2013 and will begin commercial generation in April this year. It has two 600MW generators to be fired by coal from Cam Pha, Hon Gai, Vang Danh and Uong Bi mines.

However, local coal mines are projected to turn out less coal in the next four years than currently and moreover, the quality of domestic coal cannot meet requirements for power generation. This explains why PV Power Coal is in a rush to prepare coal supply sources for its thermopower plants.

Thai Binh 2 will be commissioning its first generator in the second quarter of next year with a total capacity of 1,200 MW. It will need about three million tons of coal a year, thus piling pressure on domestic coal supply that has been in steady decline.

PV Power Coal said that to secure quality coal and competitive coal prices, it would hire a consultant to look into prospective coal mines and suppliers before it officially entered into negotiations. Coal prices would be decided through tenders and spot deals would be preferred based on the international coal quality index.

Moreover, logistics facilities for receipt and transport of coal for power plants would be taken into account as well. Priority would be given to Vung Ang 1 and Thai Binh 2, and later to Phu Long 1 and Song Hau.

The company is mulling securing more coal offtake agreements with other mines in the form of investment such as share acquisitions to ensure its future power plants would not face a shortfall of this fossil fuel.

A coal import plan made headlines in 2011 when the country exported an average of 21 million tons a year. The plan, initiated by Vinacomin, came out well before the power industry had no projects for building major coal-fired power stations.

Nguyen Van Bien, deputy general director of Vinacomin, said that to increase coal supply for local corporate consumers, the industry this year would ship abroad eight to 10 million tons a year, two-thirds lower than the 2006-2011 peak.

There are different types of coal but not all of them are suitable for firing power stations, Bien said, adding Vietnam would only import fat coal for making coke in the steel industry and brown coal for power stations, and export coal dust and quality coal.

Coal should be imported earlier than next year. Take PV Power Coal for example. It will officially buy coal from foreign suppliers from late this year as work is being sped up on a couple of coal-fired power plants in the southern part of the country.

In certain cases, imported coal is more cost-effective than that transported from the north to the south.

By 2020 the country’s coal demand is forecast to be 2.5 times above local output, so corporate coal consumers cannot avoid importing coal from abroad. This is a paradox for a country like Vietnam has long earned huge revenues from coal export.

SCG buoyant in Vietnam

Thailand’s SCG reported strong revenue growth in Vietnam in fiscal 2013 thanks to its merger & acquisition (M&A) deals with Vietnamese firms, with its consolidated revenue from Prime Group making a considerable contribution.

According to SCG’s report, the group obtained nearly VND3.4 trillion in revenue in the fourth quarter of last year, soaring 98% year-on-year. Prime Group Joint Stock Company, in which SCG had spent nearly US$240 million acquiring an 85% stake, has made SCG one of the world’s leading ceramic tile producers.

During the fiscal year, SCG attained over VND11.2 trillion in revenue in the local market, a 66% year-on-year increase, backed by Prime Group and affiliates in the chemical and packaging sectors. SCG Vietnam accounted for 46% of last year’s total revenue of the group in all Southeast Asian markets but Thailand.

Its total assets in Vietnam amounted to nearly VND12 trillion (US$583 million), up 51%, buoyed mainly by its new investments in Prime Group.

According to SCG, the Vietnamese firms it has bought into have fetched high revenues or have performed well in recent times. It has plans to expand investment in the country through future M&A deals.

Last year, SCG’s revenue in Southeast Asia marked a record growth rate of 25% against 2012, reaching around VND26 trillion as a result of its M&A deals in Indonesia and Vietnam.

SCG will continue deepening investment to maintain sustainable growth in the region. In Vietnam, its petrochemical complex in Ba Ria-Vung Tau Province has made clear improvements and SCG is selecting sub-contractors for the project.

After selecting its main financial consultant, SCG will finish its financial report at the end of this year. It is also involved in some other projects.

This year, SCG will build its first cement plants in Indonesia and Myanmar and increase the production capacity of its cement plant in Cambodia.

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