Auto sales enjoy sharp September rise

The Vietnam Automobile Manufacturers’ Association (VAMA) reports the domestic auto industry sold 9,785 units in September, a 24% improvement on August and 28% more than a year earlier.

The VAMA said September’s auto sales were the highest figure since the beginning of the year. Revenue from cars rose 32% and from trucks 19%, compared to August.

Domestically assembled units were estimated at 7,695, up 18%, while imported automobiles hit 2,090, or 52% more than August.

VAMA members sold 8,465 units in September, representing 20% growth since the comparable period in 2012.

In the past nine months, auto sales totalled 76,884 units—a year-on-year increase of 18%.

Toyota led the market with 2,950 unit sales, followed by Thaco Kia (845 units), Ford (731 units), and GM Vietnam (430 units).

Vietnam’s auto industry is expected to sell 109,000 units by the end of 2013, higher than its yearly 100,000 unit target.

Japan, Vietnam cooperate in microchip semi-conductor industry

Nearly 20 Japanese businesses have conducted an October 11 visit to Ho Chi Minh City's Integrated Circuits Design Research and Education Center (ICDREC), investigating opportunities to develop a microchip semi-conductor industry.

The Japanese delegation commended the city’s tech industry on its recent work with semi-conductors, its qualified workforce, and its modern infrastructure.  

Japanese businesses expressed keen interest in HCM City Hi-Tech Zone and its associated investment incentives.

The high-tech zone currently contains 74 investment projects, 58 of which are valid and capitalised at US$2 billion. A quarter of the projects underway are in micro-electronics and telecommunications, information, and technology.

Business representatives discussed the potential for initiatives developing HCM City’s emerging microchip semi-conductor industry, including cooperative training programmes, and technology transfers between Vietnam and Japan.

Daisuke Yoshimitsu, a member of Kyushu Semiconductor Industries & the Electronics Technology Innovation Association (SIIQ), said Vietnam is a tempting destination for future investment.

He noted it might take Vietnam 40–50 years to develop a microchip industry equal to Japan’s. But he also reaffirmed Japan’s commitment to comprehensively supporting Vietnam’s factory construction and its emerging hi-tech zones.

Mekong Delta province strives to boost exports

The Mekong Delta province of Vinh Long is doubling its efforts to achieve the target of 77 million USD in its export turnover in the last three months of this year, focusing on the fields of its strength.

Local authorities are joining hands with enterprises in promoting the trade of farm produces and fruit with large material zones that can ensure stable supplies. They are trying to make the full use of traditional markets while searching for new and major ones including Russia and the Middle East.

Besides, efforts are also being made to accelerate the implementation of incentives for processing enterprises working in the agriculture and fishery sectors with a view to diversifying exports.

Director of the provincial Department of Industry and Trade Nguyen Minh Tho said the locality will achieve an export turnover of 350 million USD for this year, only 85 percent of its yearly plan, attributing the fall to the difficulties in the exportation of its key products.

The Ministry of Industry and Trade has said that Vietnam will see an export turnover of 131 billion USD this year, a 14 percent increase from 2012 and 4 percent higher than the target set by the National Assembly.

Its figures revealed that in the first nine months of this year, the country’s export turnover was 96.46 billion USD, a 17.5 percent rise over the same period last year.-

Central province attracts FDI to advantageous fields

So far this year, the central province of Thua Thien-Hue has attracted five foreign direct investment projects with a total capital of 40.7 million USD, and permitted four others to increase their capital by 58.75 million USD.

Deputy director of the provincial Department of Planning and Investment Le Dinh Khanh said local authorities are striving to facilitate investment to such advantageous fields as marine ecotourism, sea port services, urban infrastructure, industry, processing, and education and training.

They are also applying incentives to investors in the Chan May-Lang Co economic zone in terms of tax, administrative procedures, land and labour.

Currently the province counts 69 FDI projects that see an annual growth of 17.2 percent in their revenue.

This year, they expect to earn 10.1 trillion VND (474.7 million USD), pay 1.3 trillion VND to the State budget and provide jobs to over 15,000 workers.

Can Tho reaps record rice harvest

The total paddy output for this year of the Mekong Delta city of Can Tho, one of Vietnam’s largest rice producers, will top 1.4 million tonnes, the highest so far, according to the municipal Department of Agriculture and Rural Development.

Deputy director of the department Nguyen Thi Kieu attributed the increase of 83,234 tonnes over the last year’s figure to the application of advanced technical processes and models by farmers to their production.

The official further said in the coming winter-spring rice crop, farmers will continue to apply the large-field model as a main way to reduce production costs, raise productivity and quality, and improve the product value as well as profits.

The Ministry of Industry and Trade has said Vietnam expects to harvest about 3.7 million tonnes of rice from now to the end of this year, ensuring sufficient stock for export for 2013 and some for the same purpose next year.-

Coal sale projected to rise in Q4

The Vietnam Coal and Mineral Industries Group (Vinacomin) aims to increase sale volume to 11.5 million tonnes in the fourth quarter, bringing the year’s total figure to 39 million tonnes, despite the ongoing stagnation predicted for both domestic and global economies.

The figures are the result of the coal export tax cut to 10 percent on September 1, and that coal demand for power plants is expected to grow in the dry season.

To achieve its target, Vinacomin is enhancing coal sale at the beginning of October to reduce its inventory. It also closely follows the market’s movements and controls coal quality and shipment schedules.

In the fourth quarter, Vinacomin is set to provide coal dust for domestic cement manufacturers, thermal power plants, Japan and China’s Hainan markets.

In the first nine months of this year, Vinacomin earned 68 trillion VND (3.2 billion USD) in revenue and 1.5 trillion VND (71.4 million USD) in profit. Nearly 39 trillion VND (1.9 billion USD) of its revenue was from coal, representing 65 percent of the yearly target.-

Vietnam eager to expand oversea investment

Vietnam’s oversea investment strategy has targeted to its traditional markets including shared border countries, ASEAN countries, Russia while making first moves into new markets in Eastern Europe, Latin America and Africa, said Investment and Planning Vice Minister Dao Quang Thu.

Vietnam’s oversea investment is on upward trend and focuses on oil and gas, hydro power, natural resources, telecommunications and industrial tree planting, Vice Minister Thu said in an interview with VNA.

Up to date, Vietnam’s registered capital for oversea investment is estimated at about 16.6 billion USD and 4 billion USD implementation capital

The Government has urged Vietnamese investors to put their money into oversea projects which help promote domestic production, services and exports, added Thu.

According to Thu, to lure more investors, the government will update market information on politic climate or investment environment to Vietnamese businesses, while simplifying administrative procedures for investors.

Vietnam to become the world’s motorbike production base

About 3 million motorbikes are sold in Vietnam every year. Meanwhile, the five major motorbike joint ventures alone churn out 4 million products a year. The oversupply would force the manufacturers to boost exports and turn Vietnam into the world’s motorbike production base. Report by the Vietnam Net online newspaper.

The website of a Japanese motorbike manufacturer in late August showed a piece of news that SH Mode made by Honda Vietnam would be available in Japan from September 13. This would be the second motorbike model of Honda Vietnam to be sold in Japan in 2013.

It is expected that some 3,000 vehicles of the SH Mode would be consumed in the market every year.

Prior to that, in March 2013, when launching Lead 125 into the market, Honda Vietnam also stated that it would export the products to Japan, where it hoped to sell 12,000 products every year.

As such, Vietnam has become the fourth country that provides products to Honda global. The other three include China, Thailand and India.

Masayuki Igarashi, General Director of Honda Vietnam, said the company plans to boost exports to Thailand, Malaysia, the Philippines, Laos, Cambodia, Pakistan and Italia. It earns 40 million USD a year from the exports to the regional markets with just two models Dream and Wave.

SYM, the manufacturer from China’s Taiwan, has also been trying to exploit the ASEAN market. It has been exporting 4,000 products a month to South East Asian markets such as Malaysia, the Philippines, Singapore, Indonesia, Myanmar, Laos and Cambodia.

Meanwhile, Piaggio Vietnam exports 30,000 products to the ASEAN market every year. Piaggio Vietnam’s Tran Thu Mai noted that the Asian market now sees the fastest growth rate in the world. The manufacturer strives to export 70 million euros (91 million USD) worth of motorbikes and parts in 2012-2014.

The motorbike consumption over the last two years has been decreasing dramatically in the context of the economic downturn. Motorbike manufacturers all said 2012 was a very tough year for them.

According to Masayuki Igarashi of Honda Vietnam, the manufacturer sold 3.11 million products in 2012, which was just equal to 93 percent of that in 2011. Especially, Honda Vietnam had to spend 15 billion VND on a sale promotion program, a biggest ever sum spent for such a program.

However, despite the big difficulties, motorbike manufacturers still keep expanding their production. The third factory of Honda Vietnam capitalized at 120 million USD in Ha Nam is expected to become operational by the end of the year, which would raise the total production capacity of the manufacturer to 2.5 million products per annum.

The Yamaha project, worth 50 million USD, is raising the production capacity to 1.5 million products per annum.

Analysts believe that the manufacturers’ move to scale up the production aims to serve their plan to boost export instead of boosting domestic sales. The total production capacity of the joint ventures in Vietnam is expected to reach 3 million products a year by the end of the year, or 2 million products higher than the demand.

They have also predicted that with such a big capacity, Vietnam would become the world’s motorbike production base in five or 10 years.

SJC’s jewelry exports sparkle again after three years

Saigon Jewelry Holding Co. (SJC) has resumed jewelry exports, after stopping the business in late 2010 due to low competitiveness, according to the The Saigon Times Daily.

SJC is the second firm in the industry trying to ship jewelries abroad besides Phu Nhuan Jewelry Company (PNJ).

Do Cong Chinh, general director of SJC, said that his enterprise was sending small batches to Europe to explore the market before executing larger orders from foreign buyers. SJC will sign processing contracts with foreign partners to make shipments with bigger values in the near future, Chinh said.

Many foreign customers have already signed contracts with SJC after examining the processing technology and prices offered by the local company.

SJC has sought permission from the central bank to import materials temporarily for re-export to process jewelry for partners. Chinh deems this practice as the best way now as it is very difficult to compete with rivals from Thailand and Hong Kong who enjoy lower gold prices and have more advanced processing technologies.

PNJ is a jewelry exporter with steady exports done over the years. However, Nguyen Thi Cuc, deputy general director of the company, reported that jewelry export revenue only contributed some 6 percent to her company’s total while the export profits were low.

After an export tax rate of 10 percent was slapped on jewelry products having gold content of less than 99.99 percent, foreign customers have become lukewarm to high-value home-made jewelry items.

PNJ earns around 12.5-13 million USD from jewelry exports annually while its jewelry exports generated up to 29 million USD in the first five months of 2010 when jewelry exports by local firms were strong due to softer domestic gold prices then.

According to the Vietnam Gold Business Association, as other Asian countries apply jewelry export duties of zero percent, their export values of gold and jewelry products always stay high. Gold jewelry exports by Thailand average out at about 3 billion USD annually, the association said.

HCM City’s economy continues to soar

Ho Chi Minh City, the country’s southern commercial hub, recorded an impressive economic growth rate of 10.3 percent in the third quarter of 2013, up 0.7 percent against the same period last year.

The city’s index of industrial production in the first nine months of this year rose by 6 percent year-on-year thanks to an expansion in production scale.

Leather and related products, medicine, rubber and plastics were among the industries with high year-on-year growth rates, 10.9 percent, 11.2 percent and 10 percent respectively.

By the end of September, the city’s total budget collection hit nearly 165.7 trillion VND (7.9 billion USD), fulfilling 69.51 percent of the yearly target and 7 percent higher than the same period last year.

Nguyen Phuong Dong, Deputy Director of the municipal Department of Industry and Trade, attributed the results to the city’s prompt measures to remove difficulties for businesses.

Since the beginning of the year, Ho Chi Minh City has hosted seven direct dialogues with 1,375 businesses on tax, labour and social insurance, and finance and banking, he said, adding that trade and investment promotion activities have been held regularly to help businesses advertise their trademarks and expand markets.

Despite promising signals, the city still faces many difficulties due to the turmoil in the global economy, large inventories and a stagnant property market, said Chairman of the municipal People’s Committee Le Hoang Quan.

In the remaining months of 2013 and the following years, local authorities must drastically implement socio-economic development measures, with priority to be given to solving difficulties for businesses, he stressed.

He said that the city will prioritise loans for the production of exported goods, processing and support industries, and labour-intensive small- and medium-sized enterprises.

Relevant agencies should take measures to develop the market, assist businesses sell their products and reduce inventories, especially in the property sector, Quan added

Quang Binh focuses efforts on new rural development

Central Quang Binh province selected six communes in six districts to pilot the national programme for building new rural areas. Local people have actively become involved in the programme, and feel a high sense of responsibility. The Voice of Vietnam Radio reports.

After three years implementing the new rural areas programme, almost all piloted localities, 70 communes in Quang Binh province, have achieved eight to 12 of the 19 new rural criteria. As many as 100km of rural road have been built and schools and public places upgraded. Tens of thousands of households donated 250,000sq.m of land for the programme.

In Xuan Ninh commune, Quang Ninh district, the villagers are trying to complete this year’s targets. Nguyen Truong Tien, Chairman of Xuan Ninh People’s Committee, said the commune has successfully encouraged locals to join the efforts. Villagers have donated 1,000sq.m of land and money to build and expand inter-hamlet roads.

Tien said the commune has set out to achieve all criteria by 2015. “The commune began the national programme of new rural development in 2010. We have completed nine creteria and are working on achieving the others. People here support the programme. We aim to improve people’s living conditions."

In Quang Phuc commune, Quang Trach district, where 90 percent of the population are Christians, local people also voluntarily contribute land, money and labour to build rural roads. Nguyen Chi Doai, a villager, said: “We are delighted and sympathetic to the idea of donating land to build roads. The countryside has been improved with good roads and multi-storey houses.”

Quang Binh province has mobilised resources valued at nearly 25 million USD to build new rural areas, including capital from the State budget, credit, enterprises, and the population.

Hoang Van Min, Deputy Director of the Quang Binh provincial Department of Agriculture and Rural Development, said: “The province has prioritised part of the State budget for communes which have nearly achieved all the 19 criteria. The communes and districts will encourage people to become involved in building roads to ease transport issues and improve people’s living conditions."

The communes and districts have applied new production models and adopted new animal and plant varieties. With the people’s consensus and the administration’s effort, Quang Binh province has obtained impressive results in developing new rural areas.

Central regions see increase in rice production

The southern central coastal and Central Highlands regions have grown more than 604,000 hectares of rice so far this year, yielding over 3.2 million tonnes of unhusked rice, 1,300 tonnes more than the 2012 output.

The figures were released at a meeting to review the regions’ rice production which was held in central Da Nang city on October 8 by the Ministry of Agriculture and Rural Development (MARD).

In 2014, the localities in the region are instructed to maintain the rice cultivation area while shifting to rice varieties that are in great demand on the market.

They are also urged to zone areas for high-quality rice, expand the application of the Vietnam Good Agriculture Practices (VietGap), and apply advanced technology.

In the 2013 – 2014 winter-spring crop, the regions are set to cultivate rice on more than 257,370 hectares with a projected output of over 1.5 million tonnes of paddy rice, 16,000 tonnes higher than the figure of the same crop last year.

At another meeting in late September, southern provinces reported that the total rice cultivation area in the region was over 4.7 million hectares with average productivity of 5.72 tonnes per hectare in 2013.

Tight-fisted fund fails to boost realty market

While the Government is speeding up loan disbursement to help solve difficulties of the real estate market, many enterprises said that the loans, which are provided in dribs and drabs, will fail to revive the market soon.

Speaking at the seminar in HCMC on Tuesday, Vinh Nguyen, representative of the U.S. National Association of Realtors (NAR) in Vietnam, noted that the VND30-trillion home loan package will not bring about big effects as loans are disbursed sparingly.

Launched three months ago, only VND142.5 billion out of VND30 trillion have been disbursed to around 590 customers. The slow disbursement is attributed to tight screening procedures, which hinder many people from accessing the fund.

Vinh said a frozen realty market could hardly escape the gloom without strong support from the Government, citing the case stateside.

Two opposite attitudes showed up when the property market in the U.S. fell into distress. One side suggested letting the market adjust by itself while the other side wished intervention to save the market, he said.

Firstly, the nation picked the first solution, letting the market struggle against challenges so that good enterprises would survive the crisis. However, the market failed to recover after two years, prompting the government to apply bold measures to save enterprises.

Around US$700 billion has been provided to help banks solve bad debts and give home loans to people. Therefore, the market has seen improvements, Vinh said.

The U.S. government has not used up the package as announced previously but the strong measure has worked, Vinh said.

Le Hoang Chau, chairman of the HCMC Real Estate Association (HoREA), said that although measures have been applied, they would not fetch effects immediately. Therefore, enterprises should try to find solutions to save themselves.

Realty enterprises at the seminar said that the market will only recover if it can win back confidence from customers.

Vinh of NAR said that information transparency is one of the factors that can bring buyers back to the market. NAR will support Vietnamese firms by introducing their projects on the website www.realtor.com as long as they can give enough and transparent information of the projects.

This is also a way for local enterprises to seek potential foreign customers. Around 1.8 million Vietnamese are living in the U.S., he said.

The Australian Chamber of Commerce also held a seminar on Tuesday to update information of the local realty market and the Government’s loosening conditions for foreigners to own homes in Vietnam.

Homebuyers now find it easier in taking out home loans as banks have cooperated with investors to give supportive programs for customers.

However, Vietnam is among countries with highest home loan lending rates at 10-12.5% per annum. Meanwhile, Singapore applies lending rate of 1.24%, Hong Kong 2.15%, China 4%, Cambodia 8-9% and Indonesia 8.88%.

Industry insiders also said that opening the door for foreigners is not the magic wand to prop up the market, as only domestic customers could be the key driving force.

Vietnam-Japan trade gallops on economic partnership

Vietnam-Japan trade has been expanding by some 20% a year since the Vietnam-Japan Economic Partnership Agreement (VJEPA) was signed four years ago, a trade official told a trade and investment promotion forum in HCMC on Wednesday.

Ho Thi Kim Thoa, Deputy Minister of Industry and Trade, said that bilateral trade was projected to continue growing strongly in the coming time, having almost doubled since 2009 when the partnership agreement took effect.

She was speaking at the Vietnam-Japan trade and investment promotion forum that attracted more than 200 Vietnamese and Japanese enterprises in the fields of precision mechanics, supporting industries, electronics and farm produce processing.

The partnership agreement effective on October 1, 2009 has marked a new turning point in the two countries’ economic cooperation and has strengthened bilateral trade exchanges and investment promotions, Thoa said.

Two-way trade was some US$13.8 billion in 2009, which picked up about 22% to US$16.7 billion in 2010 and 26.5% to US$21.2 billion in 2011, she said.

The year 2012 witnessed two-way trade value reaching US$24.7 billion, jumping 16.5% year-on-year.

Vietnam also has a trade surplus with Japan, shipping goods worth US$13.1 billion in 2012 while importing commodities worth US$11.6 billion from the market.

The uptrend is maintained this year, seeing two-way trade in January-August reach US$16.3 billion, with Vietnam’s exports to Japan totaling US$8.8 billion and its imports from the Asian partner staying at US$7.5 billion.

The structure of Vietnam’s goods shipments bound for Japan has also changed for the better recently. Besides traditional goods favored by Japanese consumers like furniture, handicraft items and seafood, Vietnam has started exporting other high-tech products with big volumes to Japan such as machinery, mobile phones, laptops, cameras, vehicles and steel items.

Still, Vietnamese dragon fruit, flowers, coffee, processed foodstuff and rice among other farm produce have also won the hearts of Japanese buyers in recent times.

Apart from trade, Japan has always been among the top foreign investors in Vietnam in the last five years. Japan last year became the biggest investor in Vietnam with total newly-registered and additional capital of US$5.6 billion, holding 34.2% of total foreign direct investment flown into the nation.

Investment capital by Japanese investors totaled over US$4.7 billion in the first nine months of the year, representing 31.6% of total registered FDI in the country.

Overall, Japan is the single biggest foreign investor in Vietnam, with total registered capital of more than US$33 billion to date.

Experts foresee increasing bank M&As

Experts are adamant that banking sector restructuring via mergers and acquisitions will be increasingly popular in the coming time.

Over the last two years, banking sector liquidity has faced significant challenges as underperforming institutions faced bankruptcy.

In response, the government developed a highly prioritised restructuring plan.

There is change afoot with the State Bank of Vietnam (SBV) more closely regulating underperforming banks.

According to SBV supervisory body chief inspector Nguyen Huu Nghia, over the last two years of restructuring banks’ liquidity has risen markedly, responsibility has been upheld and risks have withdrawn.

“People are confident in their deposits and state assets are secure. Banks that were on the verge in 2012 have found their footing again thanks to the shake-up,” Nghia said.

Mergers & acquisitions (M&A) have been essential to this success.

At an M&A focused forum hosted by Vietnam Investment Review in Ho Chi Minh City last August the head of a department of the central bank Nguyen Thi Hoa said the government’s restructuring plan facilitated the increase in M&A deals.

Nguyen Thuy Duong from Ernst&Young Vietnam asserted that M&A was highly advantageous to local banks in both escaping crisis and pushing forward their restructuring goals.

With that all said, member of the National Financial and Monetary Advisory Council Le Xuan Nghia said there was significantly more behind bank mergers over the past year than policy.

Nghia argued that the formation of fewer but larger institutions is a natural banking system trend toward stability, strength and market share.

“Only larger-scale banks will have the ability to meet the State Bank’s increasingly international standards on non-performing loans and risk management,” Nghia emphasised.

Banking Academy’s expert Pham Tien Dat asserted that with bank restructuring on the move and a likely influx of foreign investors M&As will be vibrant in the coming time.

Assoc protests suggested tax on gold jewelries

The Vietnam Gold Business Association protests a proposal of the Vietnam Association of Financial Investors (VAFI) for imposing a special consumption tax on jewelries, saying the tax will throw members in the local jewelry industry into troubles.

At a time of the jewelry industry still facing tough competition, the imposition of the special consumption tax to jewelry items will drive industry players into hot water, said Nguyen Thanh Long, chairman of the gold business association.

Long argued that the tax rate of some 20% as suggested by VAFI is too high which shouldn’t be applicable in the context that enterprises in the industry are struggling with tough business conditions.

As local jewelry items are facing difficulties in seeking outlets given the overwhelming presence of Chinese products at home, the tax will unintentionally make it easier for illegal Chinese items to further dominate the local market, he explained. It is because Chinese-made jewelries are mostly smuggled into the country and evade taxes.

Jewelry companies are really in tough condition as they find it unable to import materials while the prices of local materials are higher than those in global markets, Long said. Furthermore, as enterprises are not allowed to borrow money for gold purchase, the tax application will definitely deal a hard blow to them, he noted.

While other Asian nations attach importance to the jewelry industry and create favorable conditions for its development, the local jewelry industry is now facing hindrance from many State policies, Long remarked.

The gold business association voiced the protest after VAFI had suggested classifying gold bars and gold rings as items subject to the Special Tax Consumption Law like beverages, automobiles and motorbikes as they are luxury products that need to be regulated by the State.

Capital for Long Son oil refinery project ready next year

Partners in the consortium developing Long Son oil refinery project in the southern coastal province of Ba Ria-Vung Tau are expected to secure capital for the US$4.5-billion project by the end of next year, said a major stakeholder in the project.

Kan Trakulhoon, chairman of SCG with 28% interest in the project, told the Daily on the occasion of the 100th birthday of his group in HCMC late last week that shareholders would bear the responsibility of borrowing funds for the scheme.

Reaching consensus on the capital arrangement is an important step for the project owners to develop the project and turn out products in 2018 as scheduled, he noted.

Other preparatory steps for the project are also being done smoothly, with more than 400 hectares of cleared land area handed to project owners by the provincial government in August, Kan said.

Similarly, Qatar International Petroleum Marketing as the exclusive liquefied petroleum gas (LPG) distributor of Qatar also signed a long-term contract with the project owners to supply propane and naphtha for the grinding plant. PV Gas under the Vietnam National Oil and Gas Group (PetroVietnam), meanwhile, is committed to providing ethane for Long Son oil refinery complex.

SCG now is a major stakeholder in the project, the others being Qatar Petroleum, PetroVietnam and Vietnam National Chemical Group.

Long Son oil refinery complex has a designed capacity of 1.4 million tons of olefins with a flexible grinding technology using ethane, propane and naphtha as input materials. It includes many other auxiliary components like a port, a wharf, warehouses and a power plant.

With the integrated grinding technology, the plant can make products such as polyethylene (PE), polypropylene and vinyl chloride monomer for domestic sale.

In related news, the government of the central province of Phu Yen issued a license on Sunday for the adjusted the Vung Ro oil refinery plant project of Vung Ro Petroleum Co.

With the adjusted investment certificate, the project needs roughly US$3 billion compared to the registered capital of US$1.7 billion planned earlier, with its capacity doubling the previous level.

The project has a total area of over 1,000 hectares at Nam Phu Yen Industrial Park in Dong Hoa District. It has an annual designed capacity of eight million tons, turning out PE, benzene, toluene, xylene, propane and LPG among other products.

Technologies of new projects should face strict inspections

Assessing technologies before granting investment licenses to industrial production projects should be a compulsory regulation to avoid repeating the mistake of attracting investment at any cost despite the harmful effects caused to the environment, an official said.

At a seminar on the draft amended Environment Protection Law in HCMC on Monday, Ton Quang Tri, deputy director of the city’s Department of Industry and Trade, said that the planning and investment ministry so far hadn’t regulated technology assessment as a compulsory process when licensing an investment project. That’s why the country is willing to lure investment at any price and sacrificing the environment while competent authorities are only able to tackle consequences later, he noted.

The city’s authorities have recently asked the municipal departments of science-technology, industry-trade and planning-investment to assess technologies before issuing investment licenses to industrial production schemes in the city, Tri said. However, he added that resulted in problems as piloting the solution at some projects took too long, lengthening the license issuance to investors. Besides, there is not any legal foundation allowing relevant authorities to halt licensing when finding a project using backward technology.

“Production technology of industrial production schemes in HCMC is to meet labor demand in the context that all projects make use of low labor costs and cheap power prices citywide. Now is the right time to put factories with out-of-date technologies under stricter management to avoid sacrificing the environment,” Tri told the Daily on the sidelines of the seminar.

A survey conducted a number of years ago by the science and technology department at 800 companies at the city’s export-processing zones and industrial parks unveiled that only 1% of the respondents used advanced production technologies, 8% used good technologies and 40% applied average technologies and 51% adopted backward technologies. It is noted that those using old technologies include foreign-invested firms, according to the survey.

A report on the draft version of the amended law submitted to the National Assembly by the Government on August 30 shows that the law issued eight years ago exposes so many shortcomings.

Furthermore, the renovation of policies designed to protect the environment remains slow, failing to work in harmony with the market-driven economy mechanism. The application of environmental taxes and fees only creates State budget revenue while failing to minimize pollution actions and environmental deterioration and boost green economic growth as expected.

Cement price hikes projected to continue in Q4

Cement prices will continue rising slightly in the fourth quarter due to higher fuel and input material prices, the Building Materials Department under the construction ministry forecasts.

After eight months unchanged, cement prices picked up by VND90,000 a ton last month under the impacts of power and material price hikes, the department said in a report on the January-September production and sales situation sent to the Daily on Wednesday.

Dang Xuan Nhan, owner of a construction material store in HCMC’s Binh Tan District, reported that cement volume consumed by civil housing construction had risen since the start of last month compared to previous months.

Prices of Ha Tien 1 cement products marked up by around VND120,000 a ton while  those of Holcim cement items also rose by VND100,000 a ton last month, Nhan said. At present, cement prices of Ha Tien 1 and Holcim at building material stores in the city hover around VND1.7 million a ton or VND85,000 a 50-kilo pack, he noted.

According to the Building Materials Department, the January-September cement sales volume was estimated at 44.4 million tons, growing nearly 12% year-on-year. In particular, cement exports totaled roughly 10 million tons in the nine-month period, leaping 62% year-on-year.

The local cement industry turns out about 66 million tons of products annually while this year’s cement demand is projected at 56-57 million tons only.

As per the department’s report, the number of local unsold cement products stays at only 2.6 million tons, mainly clinker items, as production volumes of local plants do not far exceed demand. Of the inventories that are equivalent to two-week production volumes, Vietnam Cement Industry Corporation contributes around 1.2 million tons of unsold products, including 0.3 million tons of cement and 0.9 million tons of clinker equal to roughly 50% of the nation’s inventories.

Besides falling cement inventories, other construction material stockpiles also fall in the context that local producers have carried out production based on actual demand. Paving brick inventories are now 20 million square meters while construction glass inventories stand at 12 million square meters at home.

Loss-making shipping firms to sell more vessels

Some shipping enterprises have plans to sell more vessels before the  year-end to raise funds for their businesses.

Vinaship Joint Stock Company will sell some ships with poor operations to supplement working capital and restructure long-term loans at credit institutions. The enterprise has incurred short-term debt of nearly VND356.8 billion while its short-term assets are just VND120.4 billion.

Earlier, Northern Shipping Joint Stock Company announced to sell Long Bien ship and its barge fleet and return New Phoenix ship to Vinashinlines. From now until the end of the year the enterprise will continue to sell more old ships to balance its production and business scheme, and transfer some ineffective projects.

The enterprise expects to generate revenue of nearly VND371 billion but still incur a loss of VND50 billion this year.

According to the enterprises, the global economic crisis over the past two years has dealt a hammer blow to the shipping industry. Shipping charges and transport demands have declined strongly, seeing revenue and profits of enterprises tumble.

However, an expert in the industry said that shipping charges of some goods have been stable this year while those for shipping rice, coffee and seafood have declined sharply. In contrast, the demand for shipping apparel, footwear and woodworking products has increased.

Another reason for the heavy losses of the enterprises is that they have invested in non-core businesses such as real estate, seaport construction and farm produce trading over the past two years, the expert said.

Vietcombank offers VND1 trillion of bad debts

Leaders of Bank for Foreign Trade of Vietnam, or Vietcombank, have offered to sell around VND1 trillion worth of book-value bad debts to Vietnam Asset Management Company (VAMC).

However, a source from VAMC said that the enterprise will buy only around VND500 billion worth of bad debts from Vietcombank before the end of the year.

Vietcombank currently has the healthiest financial situation among State-owned banks in the country, the source said.

Agribank, which takes the lead in terms of total assets and network, has plans to sell from VND5-10 trillion of bad debts to VAMC by the end of the year.

A leader of the bank said that it could sell more to VAMC if there are no problems in procedures. Meanwhile, VAMC targets to buy half of Agribank’s bad debts.

Speaking at a briefing in Hanoi City earlier this month, a leader of Agribank said that the bank’s bad debt total was expected to be over VND33 trillion.

Last week, Bank for Investment and Development of Vietnam (BIDV), which is said to have a high bad debt ratio, asked its branches and transaction offices to review bad debts that will be sold to VAMC. BIDV in a document sent to its units told them to update debtors’ status, legal documents of loans and the legality of mortgaged assets.

However, BIDV and VietinBank have yet to set up bad debt lists and make official offerings to VAMC.

Last week, having worked with credit institutions in the country, the central bank released a document on debt transaction. Banks that have debt ratio under 3% and have no debt selling demand were told to explain bad debt situation and handling measures to the central bank’s inspectors by last weekend.

According to Viet Capital Securities Company, Vietcombank still maintained bad debt ratio under 3% in the Jan-Sep period. Risk provisions of the bank totaled VND3 trillion, up 17% year-on-year.

The bank posted up credit growth rate of 3.9% during the period, or 5% if corporate bonds were included. Meanwhile, its mobilization grew 6% against earlier this year.

SBV betters forex trading management

The central bank will put stricter control over foreign exchange trading of 62 local commercial banks after launching Reuters Dealing, a system that collects and extracts forex trading information on the inter-bank market, into operation.

The system was provided by Thomson Reuters under a contract signed between the two sides in Hanoi City on Tuesday.

Right after transactions are made, the system will count all inter-bank forex transactions done via Reuters Dealing. The system has been used widely among international banks to replace manual steps such as making transaction reports, sending and summarizing these reports.

Nguyen Dong Tien, deputy governor of the central bank, said that the system will facilitate currency trading, support supervisors and secure healthy and stable operation of the inter-bank market.

This is also the foundation to evaluate effects of forex management policies, the exchange rate and other policies of the central bank, he added.

Long An leads Mekong Delta in industrial development

The southern province of Long An leads the Mekong Delta region in industrial development and investment attraction, with 16 industrial parks and 760 registered projects, attracting a total investment of almost 3 billion USD.

Of the total, there are 251 foreign projects from 30 nations and territories with capital totalling 1.7 billion USD.

The fast development of industrial parks in the province over the past 15 years makes it one of the country’s five leading provinces and cities in the number of industrial parks.

The province sees the operation of 145 foreign enterprises and 215 domestic investors, creating jobs for over 70,000 Vietnamese workers and almost 1,000 foreigners.

At the parks, internal and external businesses generated an export value of 428 million USD and over 50 million USD respectively, contributing over 25 million USD to the state budget in the 15-year period.

According to Chairman of the provincial People’s Committee Do Huu Lam, the management boards of industrial parks give priority to resolving administrative procedures to facilitate the implementation of investment projects in the locality.

In the coming time, Long An will continue to fully tap its potential and advantages, while accelerating administrative reform, fostering investment promotion and enhancing cooperation to further encourage socio-economic development.

FAO asks private sector to support food-shortage trust fund

A leading official of the Food and Agriculture Organisation has called on private companies to further contribute to the worldwide effort against the widespread food shortage.

"Many of the companies that are here today are present in many countries. This is important because what you do locally against hunger can quickly become global", said FAO Director General José Graziano da Silva in a private sector partnerships meeting held on October 10.

At the meeting, the official announced that FAO has set up a multi-donor trust fund to allow private sector companies to financially contribute to the organization's work and support FAO projects and programmes. "I welcome and encourage you to join this partnership and kick start this newly established fund," he said.

He explained that FAO members approved the Strategy for Partnerships with the Private Sector, which focuses around five main strategic objectives. "These are the areas where I would like us to work together."

Hakan Bahceci, Chairperson of the Private Sector Mechanism (PSM) at the UN Committee on World Food Security (CFS) in Rome, thanked FAO Director General for giving representatives of more than 10.000 companies the opportunity to meet and share priorities. He also expressed his support for the undergoing transformation in FAO to enhance cooperation with the private sector. "We share the five strategic objectives that FAO holds," he said.

This is the second of a series of meetings with the private sector that started last year and an effort to strengthen the working relationship that includes the approval of a strategy and takes place in the framework of the Committee on Food Security (CFS).

The dialogue between FAO and the private sector has made significant progress, including recent agreements with Rabobank Foundation and Grameen Foundation to support smallholder farmers. Collaborations with long-term partners such as the Bill and Melinda Gates Foundation are also expanding.

Graziano da Silva underlined that although the new hunger figures recently released show that undernourishment continues to fall and the latest estimates signal there are nearly 26 million fewer hungry people in the world in 2013, "we will need an exceptional level of collaboration between the public and private sector to bring the hunger number down to zero and we need to work together to make a significant change".

"Working with the private sector is not only about receiving financial support, but also benefiting from your dynamism, innovation and entrepreneurship at the global, regional and national level," said Director General to representatives of agri-food stakeholders ranging from trade, investment and finance, food processing, livestock, bioenergy and crop production. He stressed that the private sector was a key actor in building the political consensus necessary to support the fight against hunger and highlighted the importance of the sector's participation in the Committee on World Food Security.

The Director-Genral recalled that last year the CFS approved the Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security and expressed his hope that a similar agreement could be found on the Principle for Responsible Agricultural Investments. He noted that the Second Ministerial Meeting on Food Prices held on October 7 had stressed the need to increase investment in agriculture and the urgency of agreeing on the principles.

"Eradicating hunger is about joining forces to scale up successful programmes and linking actions for better results. In doing so, we need to work with small-scale producers, helping them increase their production and productivity and linking them to value chains and to functioning markets," he said.

Graziano da Silva invited the private sector to support the upcoming International Year of Family Farming in 2014 through joint advocacy, outreach and communications campaigns with FAO. He pointed out that farmers themselves are an important part of the private sector worldwide.

Central bank wants bankers to settle gold loans

The State Bank of Vietnam 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 Ho Chi Minh City branch, said commercial banks in the city 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 Ho Chi Minh 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 VND 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.

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