U.S. helps city upgrade clean water

Saigon Water Corporation (Sawaco) last week signed an agreement to receive non-refundable aid worth nearly US$600,000 from the U.S. Trade and Development Agency (USTDA) to upgrade the management system of clean water supply in HCMC.

The project to upgrade and apply information technology to control the water supply network of Sawaco will be carried out in six months’ time.

According to Sawaco, the project will ensure that city households will have a far safer supply of water. Sawaco will control the water volume and pressure via the Supervisory Control and Data Acquisition (Scada) system at a controlling center.

With this system, Sawaco will adjust the water volume and pressure properly and equally for local areas and avoid high pressure which could damage water pipes.

According to Nguyen Dong So, director of the project management unit of Sawaco, it had previously received non-refundable aid of almost US$600,000 from USTDA to conduct a feasibility study and a sludge treatment project for water plants citywide.

So said the sludge treatment project had investment of US$45 million, with US$17 million borrowed from the Belgian government and US$23 million from the Asian Development Bank. This project will be carried out next year and completed after four years of construction, he added.

Currently, Sawaco supplies around 1.5 million cubic meters of clean water for HCMC residents daily.

Projects ready for Hoa Lac Park

Hanoi’s Hoa Lac Hi-Tech Park is warming up with the Baxco-Potomac Biotechnology Vietnam for its three projects in the park.

Baxco-Potomac Biotechnology Vietnam is a joint venture between China’s Potomax Biotechnology and the US’ Baxco Pharmaceutical. The firm showed their interest in building three projects in Hoa Lac Hi-Tech Park after visiting there late last month.

The park’s Investment Department director Tran Dac Trung said the joint venture had just signed a memorandum of understanding on implementation of these projects. However, the total investment capital and the size of these projects were under wraps.

The projects comprise a biochip manufacturing for the medical sector, an organic insecticide manufacturing project and a flower and finger flower production project.

In addition to genetic applications, the biochip is being used in toxicological, protein, and biochemical research. Biochips can also be used to rapidly detect chemical agents used in biological warfare so that defensive measures can be taken.

Deputy Minister of Science and Technology Nguyen Van Lang said that biochip technology appeared in Vietnam about 10 years ago and was used in some hospitals.

He confirmed Hoa Lac Hi-Tech Park would have strong health sector support as Vietnam wanted to boost biochip technology to meet domestic demand and export overseas.

The Vietnamese government has been cooperating with the Japanese government to build Hoa Lac Hi-Tech Park’s infrastructure.

“At present, Japanese party is still consulting technical planning and expect to finish by the end of 2012. In March this year, the Vietnamese government signed an agreement to receive official development assistance (ODA) funds from the Japanese government worth 30 billion Japanese Yen ($371 million) for developing the park’s infrastructure to be expected to complete in 2015,” said Hoa Lac Hi-Tech Park vice management board Pham Dai Duong.

Hoa Lac High-Tech Park located in Hanoi’s Thach That district was founded in 1999, covering 1,600ha.

The park targets to develop information technology, especially software development, bio-technology, mechanical-electronic engineering, micro-electronics, new materials, nano technology and environmental friendly technologies.

Overseas Vietnamese invest US$20 billion annually

Overseas Vietnamese (OV) remittances and investment amounts to US$20 billion each year, said Deputy Minister of Foreign Affairs Nguyen Thanh Son, who is also chairman of the State Committee for Overseas Vietnamese.

Speaking at a press briefing for the second OV conference, Son noted remittances to Vietnam achieved an annual growth of 10-15% in recent years. In the first half of 2012, remittances reached over US$6 billion, versus US$9 billion in the whole of last year.

To date, Vietnamese living abroad have registered for investment in more than 2,000 projects at home, with total capital of around US$6 billion.

However, the actual figure of OV direct and indirect investment is much higher, given the large-scale tourism and property projects with presence of overseas Vietnamese, who do not directly register the projects.

Vietnamese living overseas invest in many fields, such as agriculture, healthcare, education, industry, tourism and real estate. Notable projects are Ba Na cable car system in Danang and Dalat Eden Resort in Dalat City.

As OV have dual nationality, they are allowed to own houses in Vietnam, but according to Son, only about 200 out of the four million Vietnamese living in 104 nations abroad own homes in Vietnam.

The State Committee for Overseas Vietnamese has submitted to the Government a scheme to lure OV intellectuals back home to contribute to the country’s development, said Thanh.

There are currently some 400,000 Vietnamese specialists and intellectuals living abroad, including hundreds of specialists working at high-ranking agencies of foreign countries, and hundreds of others working in the fields of electronics, medicine, high-tech and biology.

The second conference for OV will take place from September 26 to 30 at 111 Ba Huyen Thanh Huyen Street in HCMC’s District 3.

Organizers expect the event to attract 1,000 participants, including ministerial and local leaders, representatives of Vietnamese agencies overseas, businessmen, artists, and social activists, among others.

The conference will offer chances for OV to make proposals on the policies.

The event consists of four symposiums, namely “Future of community - Economic integration and development”, “National cultural identity and tradition - Motive force for community solidarity”, “Overseas Vietnamese intellectuals with national industrialization and modernization - From potential to reality”, and “Overseas businesses for future of communities and country”.

The first conference was held in Hanoi three years ago.

Sector still energising foreign firms

As some oil firms head for the exit, Puma Energy and other foreign players are showing that  Vietnam’s market is still attractive.

It is the latest investor to replace US’ Chevron in its joint venture to produce downstream oil products in Vietnam. Denis Chazarain, chief financial officer of Puma Energy, said the company had seen great potential of a high population country of Vietnam for product consumption.

Puma announced it had completed the acquisition of Chevron Kuo, a Singapore entity which owns 70 per cent of Chevron Bitumen Vietnam. “This acquisition is one of our first steps to go deeper into Vietnam’s market and expand out business to other neighbouring countries outside Vietnam. The acquisition is also another step in the development of Puma Energy and marks the company’s first expansion into Asia following rapid growth across Africa and the Americas,” Chazarain said.

Vietnam will become the 32nd country worldwide that Puma operates within. “Vietnam is seen by us of a potential country with increasing infrastructure, large population and a stable society,” he added.

Puma will take over Haiphong terminal with wharf facilities and bitumen storage terminal with a capacity of 5,000 metric tonnes and manages a bitumen distribution business around Hanoi and Ho Chi Minh City.

In upstream sector, French oil and gas company Perenco just reached an agreement to buy the asset of ConocoPhillips – the third biggest oil and gas group in the US, in Vietnam.

Perenco’s representatives were not available to comment when contacted by VIR. However, ConocoPhillips spokesman John McLemore told VIR that this sale of ConocoPhillips assets in Vietnam was part of the company’s effort to divest approximately $10 billion of its assets in 2010 and 2011.

“Our experience in Vietnam has been positive, our business has been successful and our relationships have been good,” he said.

The Vietnam business unit was sold at a total of $1.29 billion plus customary working capital adjustments.

Last year, TNK-BP – a 50-50 joint venture between Russia’s Alfa - Access - Renova Group and BP of the UK, decided to enter Vietnam’s market after its acquisition of BP’s upstream assets in the country to reach out to international markets.

Boris Zilbermints, senior vice president for International Projects of TNK-BP stressed that Vietnam was among the first international assets that TNK-BP acquired so far.

“For us, Block 06.1 offshore of southern Ba Ria-Vung Tau province is a high-quality asset that will enable TNK-BP to develop new expertise, particularly in offshore operations. We believe Vietnam as a rapidly developing country with significant gross domestic product growth and population growth is an attractive place to do business,” Zilbermints said.

Moreover, TNK-BP saw great potential in the Asia-Pacific region and it believed that Vietnam could be an anchored asset for its future growth in the region. TNK Vietnam director Hugh McIntosh further stressed that the company was still looking for opportunities to grow both in existing licenced area and in merger and acquisition activities.

Many foreign oil companies have been present in Vietnam such as Total, Idemitsu, Premior Oil, KNOC, Santos, Mitra, BHP Billiton, Shell, Exxon Mobil, Talishman and others.

Ito En to fizz up the soft drink sector

There are three key reasons why I am confident, and why PepsiCo is betting, that Vietnam will play a key role in the Asian market.” - Saad Abdul-Latif Chief executive officer of PepsiCo Asia

A Japanese soft drink maker is looking to add fizz to Vietnam’s soft drink market. Ito En will enter Vietnam in the footsteps of two giant players, Coca-Cola Company and PepsiCo. Ito En is one of the largest soft drink producers in Japan and it said it would establish a representative office in Vietnam to research the investment environment.

It has already established Ito En Asia Pacific Holding with capital of $25.5 million in Singapore in June to promote business development in South East Asia. “Our representative office would be opened in Hanoi this month,” the company said.

Ito En said it would found a holding company in Singapore to build plants in Myanmar and Vietnam for producing tea and other soft drinks. Currently it is in talks with companies from Singapore and Vietnam about capital tie ups and joint ventures, aiming to reach agreements this year at the earliest.

The London-based Business Monitor International Company (BMI) forecast that Vietnam’s alcohol and soft drink sales in value terms would increase by 70.9 and 33.3 per cent, respectively from now to 2015. This growth was ascribed to the country’s economic growth, increasing urbanisation, external investments and rising tourist numbers.

In fact, Vietnam is home to many different types of soft drinks produced by big foreign companies such as US’ Coca-Cola Company, Singapore’s PepsiCo, UK’s spirits giant Diageo and Japan’s Kirin..

Coca-Cola, for example, has said that it plans to invest $200 million in Vietnam by 2013, adding to its $280 million investment over the past 10 years.

The move was reported to meet local soaring demand for Coca Cola’s products despite Coca-Cola having three factories in Vietnam producing a total of 608 million litres per year. The move would also secure Coca Cola’s larger market share in Vietnam, given stiffer competition from its direct rival PepsiCo, according to the Vietnam Beer, Alcohol and Beverage Association.

PepsiCo Vietnam opened its $45 million new beverage plant in Amata Industrial Zone in March as part of its push to expand operations in the Mekong Delta to produce PepsiCo’s popular brands, including Pepsi, 7Up, Mirinda, Twister, Sting and Aquafina purified water.

Saad Abdul-Latif, chief executive officer of PepsiCo Asia, revealed an ambitious strategy to pour $250 million into Vietnam within three years.

Abdul-Latif said: “As I look at countries in Asia, the Middle East and Africa, I see Vietnam as one of our most important growth markets. There are three key reasons why I am confident, and why PepsiCo is betting, that Vietnam will play a key role in the Asian market.”

While, the largest soft drink plant in Vietnam’s central and western highlands, $91 million Number One Chu Lai soft drink plant three month ago invested by domestic firm Tan Hiep Phat kicked-off to grasp the potential in Vietnam.

SeABank helps importers

SeABank is doing its best to support under fire importers.

SeABank has launched a Letter of Credit Usance Paid at Sight (L/C UPAS) to help importers receive goods as soon as possible. SeABank will pay for the goods on behalf of importers, while importers can have maximum 180 days to prepare cashflows and proceed payments to SeABank.

SeABank’s customers will have to pay the interest rate of 3.5 per cent per year only on the loans to pay for exporters and SeABank will support customers with foreign currencies to pay for L/C UPAS and the level of required deposit is low and flexible.

The 3.5 per cent interest rate is much lower than the 11-15 per cent on the market if importers choose to borrow a normal loan, thus L/C UPAS is considered an optimal financial solution for importing enterprises.

France’s top-tier retail bank Société Générale, which holds a 20 per cent stake of SeABank, is SeABank’s sole foreign strategic partner.

In 2012, SeABank was classified as a group 1 bank which was granted a credit growth of 17 per cent for good and safe financial health.

Vietnam Airlines passengers can ‘fly by train’

Vietnam Airlines passengers bound for France will soon be able to travel to 19 regional French destinations by the TGV high-speed train, announced the national carrier on September 10.

Under an agreement with the French National Railway Corporation SNCF, passengers can depart from Charles De Gaulle International Airport to Lille , Le Mans , Angers St-Laud, Nantes , Rennes , St-Pierre des Corps, Poitiers , Bordeaux St Jean, Lyon Part – Dieu, Valence , and Avignon , Aix en Provence , Marseille St Charles, Strasbourg , Nitnes, Montpellier , Toulon , Champagne and Lorraine .Vietnam Airlines has a partnership with 20 other global airlines and a road transport company, offering services to 26 countries worldwide.

Techcombank wins A rating in competitive capacity

Techcombank has gained the top A rating in respect to competitive capacity among Vietnam’s commercial banks.

This is according to the Credit Rating of Vietnam annual report 2012 (CRV Index 2012) announced in Hanoi on September 8, 2012 by the President’s Office, Vietnam Chamber of Commerce and Industry (VCCI) and CRV Company.

The result was delivered by a panel consisting of leading prestigious professors and doctors based on banks’ market strength, business performance efficiency and financial capacity.

“The award is of great significance to Techcombank as it would help foster confidence by customers and partners into the bank for the past 19 years development journey,” said Techcombank’s chairman Ho Hung Anh.

“The bank will strive further to hold on the top credit rating in CRV annual reports in the following years as well as contribute a part to local banking system and the country’s economy healthy development,” Anh said.

Techcombank is one among top nine banks winning grade A rating parallel to Vietcombank, VietinBank, ACB, BIDV, DongA Bank, Eximbank, Military Bank and Sacombank.

Techcombank’s market strength leverages on its expansive network with more than 300 branches and transaction offices and 1,250 ATMs positioned in 44 provinces and municipalities.

In the face of current economic turbulence Techcombank’s capital adequacy ratio (CAR) always stays high at 11.29 per cent, much higher than State Bank regulated 9 per cent and safe outstanding loan/deposit amount rate of 64.25 per cent.

In 2012, with the aims to constantly ameliorate product and service quality and boost competitive advantages Techcombank has ramped up investment into core fundamentals for development as its headquarters, networking equipment, technology and risk management system.

Its new headquarters will come into place from September 17, 2012 at 191 Ba Trieu Street in Hanoi’s downtown (formerly Vincom office tower B site) to bring greater comfort to customers in doing transactions with Techcombank and simultaneously satisfy the bank’s growing needs for services expansion.

Gigantic efforts by the bank executives and entire staff members were acknowledged by many prestigious organisations at home and abroad through noble awards, particularly the 19 international awards Techcombank won in the past two years.

CRV annual report is jointly developed by leading researchers coming from the National Economics University, Academy of Finance, Foreign Trade University, top applied mathematicians under Vietnam Applied Mathematics Association and CRV.

This is the third consecutive year this kind of report was conducted. This year's report provides an overall evaluation of Vietnam's banking system together with competitiveness ratings of the banks.

The report also renders credit ratings of 596 listed firms in two Vietnamese stock exchanges (HoSE and HNX), unveils inflation-related studies and digs into its real causes.

FDI in manufacturing sectors flexs its muscles

The ratio of foreign direct investment  pouring into Vietnam’s manufacturing and processing sectors is a bright spot on a dark the country’s investment picture.

According to the Ministry of Planning and Investment (MPI), the ratio of foreign direct investment (FDI) in manufacturing and processing sectors increased from 40 per cent out of total FDI in 2010 to 48.5 per cent in 2011. In the first eight months of 2012, the ratio hit 67.8 per cent with 281 new projects valued at $5.74 billion.

“FDI in manufacturing and processing sectors, especially the supporting industry, which are focused on Vietnam’s FDI attraction policy, has increased remarkably,” said Do Nhat Hoang, director of the MPI’s Foreign Investment Agency.

However, FDI in property is decreasing, accounting for 20.4 per cent of the country’s FDI sum in the first eight months in 2012. This ratio used to be 64 and 36.8 per cent in 2008 and 2010, respectively.

The quality of FDI in Vietnam has changed positively due to the tightening policies focusing on the FDI effective disbursement, and there were more FDI projects in manufacturing and processing sectors, said Hoang.

For example, 16 among 17 new projects awarded investment certificates by southern Binh Duong province in the first eight months of 2012, are in manufacturing, food processing and supporting industries.

Haiphong port city, the second biggest FDI destination in Vietnam from January up to August 2012 with the registered investment capital of $1.05 billion, has just granted an investment certificate for Japanese Fuji Xerox’s $119 million project recently.

Among Asian countries, Fuji Xerox picked Vietnam as the location of its new manufacturing site because the firm said Vietnam was making steady progress toward industrialisation. Also, Vietnam is advantageous as it has industries such as information equipment manufacturers in a concentrated manner, as well as an extensive land transportation network connecting the country with China, Thailand and other Association of Southeast Asian Nations (ASEAN), which will facilitate Fuji Xerox in establishing supply chains.

Haiphong received other two big FDI manufacturing projects this year including $547.8 million radial tire plant of Bridgestone and Nipro Pharma’s $250 million pharmaceutical and medical equipment factory.

Meanwhile, southern Dong Nai province, the third largest FDI destination, achieved $972.8 million in registered FDI, so far of 2012, largely contributed by the $441 million construction material plant of Lixil.

In April Wintek Vietnam, an affiliate of Taiwan-based Wintek Corporation, added further $870 million to its electronic part plant in northern Bac Giang province, up to the total investment of $1.12 billion.

Worldwide economic prospects take toll on Asia-Pacific outlook

Welcoming the 2012 Annual Summit of the Asia-Pacific Economic Cooperation (APEC) Forum to take place from September 7-8 in Vladivostok, PwC has conducted a survey with chief executive officers (CEO) in the 21 APEC economies.

Carried out by PwC International Survey Unit, the APEC CEO Survey 2012 was conducted between June and August, 2012 covering 376 CEOs and industry leaders in 40 economies, including all the 21 APEC economies. This is a very important survey conducted annually by PwC as the Knowledge Partner of the annual APEC Summit.

The survey has discovered that Asia-Pacific CEOs remain confident of long-term growth.

Economic disruption, including possible recession in the US, the Eurozone crisis and the slowing of expansion in China have taken a toll on the confidence of CEOs in the Asia-Pacific region.

Just 36 per cent of executives surveyed by PwC said they are “very confident” of business growth over the next 12 months.

Longer term, however, prospects improve, with more than half (54 per cent) expressing a high level of confidence for the next three to five years.

CEOs called for action on regulation, investment policies and labour mobility. Asia-Pacific CEOs also said they believed the region was on track to achieve greater economic integration, a top priority for the APEC Forum.

Nearly half of CEOs said removing barriers to trade in services was a key to greater integration within the 21 APEC members.

CEOs also called on APEC’s political leaders to harmonise regulations across the region and to do more to encourage labour mobility and the free flow of investment.

CEOs said the top economic risks to their growth were a spike in oil prices to beyond $150 per barrel, a US recession, breakup of the Eurozone, and the slowing of China’s growth to below 7.5 per cent of gross domestic product.

Other top concerns cited were a major disruption of the Internet or cyber attack, and a pandemic or natural disaster. Asia-Pacific CEOs said China and the United States were their dominant targets for investment over the next three to five years. Resource-rich areas such as Russia, Indonesia and Australia, and Asian services capitals like Hong Kong and Japan were also cited as top draws for investment.

Meeting the need for talented, highly skilled workers remains a top priority for CEOs in Asia-Pacific. Some 40 per cent said they planned to expand their workforce by at least 5 per cent in the next three to five years. However, 42 per cent think talent shortages in the region will worsen over the same time period.

To meet the intense competition for talent, CEOs said they will offer employees salaries that are more competitive, better apprenticeship and intern programs, more non-financial rewards and customised benefits, and international assignments.

“Making progress on the many issues that face the diverse economies of the Asia-Pacific region is no easy task. CEOs have set some very clear challenges for the upcoming APEC Summit. If the summit is to be deemed a success, we need to see some real progress on key issues such as harmonising regulation and encouraging labour mobility in the APEC region,” said Dennis Nally, chairman of PricewaterhouseCoopers International Limited.

Products fair to be held in Tan Phu

The HCM City Investment and Trade Promotion Centre, in collaboration with the Tan Phu District People's Committee, will organise a high-quality Vietnamese products fair from Sept 12-19.

The fair follows the success of similar events in districts 2, 4, Cu Chi, Nha Be, Can Gio, Thu Duc and Binh Tan. The latest fair is the 22nd of such event organised as part of a campaign to encourage Vietnamese people to give priority to using Vietnamese goods.

Foreign-invested firms increase capital

Foreign-invested companies in southern Dong Nai province report they have increased their investment capital by US$141 million over the first eight months of this year, according to the provincial Industrial Zones Authority.

"These encouraging results show the increasing confidence of foreign investors in the potential of the Vietnamese market despite the difficult economic situation the country finds itself in," it said.

Delta fish breeders adopt new methods

Despite earning more than US$85,000 a year from farming tra fish using traditional methods, Le Hong Duc of Dong Thap Province in the Mekong Delta has decided to adopt a new method based on VietGap standards, hoping to improve profits and environmental protection.

Duc and his family raise tra fish in a 5,000 square meter pond in Chau Thanh District.

He said: "Like many others farmers in An Nhon Commune, we enjoy favourable natural conditions here, but we sometimes get better results than others thanks to the active use of scientific methods.

"Now we harvest 1,200 tonnes of tra and earn around VND1.8 billion (US$86,455) a year on average."

He heard recently that raising tra to VietGap standards would not only help farmers achieve stability in production and high quality but also sell their fish easily, especially to overseas buyers.

More importantly, farmers would be able to significantly cut costs because the environment is protected and fish contract fewer diseases.

Realising the benefits of VietGap standards, he decided to adopt it early this year.

He was required to have clear boundaries for his pond and sterilise the water with powdered lime before stocking fish.

Inflows had to be separated from outflows; the tra feed had to be kept in dry condition; and the recommended feeding rate had to be applied.

"To follow all VietGap standards is not very difficult but its benefits are so many. So I decided to adopt them."

Duc is among thousands of tra fish farmers in the Cuu Long (Mekong) Delta to have embraced the Vietnamese Good Agriculture Practices (GAP) standards following the Ministry of Agriculture and Rural Development's exhortation to farmers.

According to a report released in May by the Viet Nam Association of Seafood Exporters and Processors (VASEP), the last 12 years since 2000 have seen the tra fish farming sector achieve high growth in all aspects: area increased by five times to 6,000 ha; output by 36 times to 1.35 million tonnes; exports of finished products by nearly 40 times to 660,000 tonnes; and export turnover by more than 45 times to $1.86 billion.

The number of markets importing Vietnamese tra also increased sharply. Initially only a few countries in Asia imported it, but now the fish is shipped to 130 countries and territories worldwide.

Another impressive achievement is the increase in productivity, the report said: in some places, it has reached 500 tonnes per ha compared with an average rate of 316 tonnes.

Vietnamese businesses make a bewildering variety of products from the fish, running into hundreds of kinds – from frozen products to fast-food snacks – at the last count.

Experts told a meeting held late last month in the southern province of Tra Vinh that farmers in the delta should focus on raising tra to VIETGAP standards to ensure sustainable development for themselves and the entire industry.

Speaking about the importance of adopting VietGap, Pham Anh Tuan, deputy director of the Department of Fisheries, said consumers in many markets attached importance to certification such as GlobalGAP in Western Europe and the US and ASC in Northern Europe.

The certificates encompass the issues of environmental protection, food hygiene and safety, social responsibility, and product origin.

"VietGAP certificate includes all of these, and will help exporters upgrade to other certificates easily," Tuan said.

Nguyen Thi Minh Ly, deputy director of the Viet Nam Certification Centre, said: "Viet Nam now ranks fourth in the world in aquaculture and the sector has made great contributions to the country's exports.

"But, its quick growth and great economic benefits apart, the industry is facing several dangers such as low food safety, environmental pollution, and epidemics."

Meanwhile, there was a growing global emphasis on food safety and origin of products, so fisheries products that meet these requirements would find easy acceptance in international markets, including in demanding ones such as the EU and US, she said.

"VietGap standards are based on four main criteria: disease control, environmental protection, social welfare, and traceability.

"The application of VietGap standards will be essential for the aquaculture industry to make products that meet the world market's requirements.

"But it is true that many agricultural producers including tra farmers are reluctant to adopt safe production methods including VietGap because they think it is expensive and make them uncompetitive," she admitted.

In the global market, Vietnamese agricultural products often fetch lower prices than are paid for similar products from elsewhere because of lower quality and difficulty in tracing their origins.

To address the situation, the prime minister signed a decision earlier this year offering incentives to farmers and businesses for adopting safe production processes and making high-quality products.

The incentives include full funding for baseline surveys, topographical surveys, and analyses of soil, water, and air samples to identify areas for concentrated production. Training and financial support will be provided for farmers to adopt VietGap standards.

The Ministry of Agriculture and Rural Development has also set progressive targets for achieving VietGap certification, with 30 per cent of all aquaculture establishments to get it by 2015 and 80 per cent by 2020.

"Many tra farms in the Cuu Long (Mekong) Delta have adopted VietGap standards," Ly said.

Dong Thap Province leads not only the delta region but also the country in the production of tra fish.

In 2011 it established three tra fish breeding models based on VietGap standards, Ngo Xuan Huong, head of the Dong Thap Agriculture Extension Centre, said.

"Dong Thap also established a club for farmers involved in raising tra to VietGap standards.

"The club assists [them] in adopting the sustainable breeding model."

Dong Van Lam, vice president of the Tra Vinh Province People's Committee, said two major tra fish farms have achieved VietGap standards, and expected more farms and even farming households to do so in future.

Nguyen Van Tam of the Tra Vinh Agriculture Extension Centre "The cost of raising tra to VietGap standards is 20-25 per cent more when compared with traditional methods, but the benefits this safe production method can bring are much more, so many local farmers decide to adopt it."

Weed sprayers need licences

People must now have certification to use certain plant protection substances.

This is one of the new regulations in the draft law on plant protection and quarantine.

Experts from the Ministry of Agriculture and Rural Development said that this was the first time people using limited-use plant protection substances needed to have documentation.

Nguyen Xuan Hong, director of the ministry's Department of Plant Protection, said that plant protection substances were not well monitored as 90 per cent of the substances were imported from China, making it difficult and time-consuming to check their ingredients.

"Although the ministry has warned farmers about the dangers of limited-use substances, there are many cheap substances available illegally that they use regularly to heighten productivity without thinking about the consequences," he said.

The new regulations will help raise farmers' awareness about the substances as they will attend mandatory training courses after receiving cards and certificates, he added.

Plant protection substances can sometimes be necessary for agricultural production. If the substances are used properly in a limited time period, they do not have a significant effect on the environment.

To limit the abuse of these substances, which pollutes the environment and affects people's health, farmers should be trained to use them properly and issued certificates when they demonstrate they are able to do so.

Thus the draft law regulated that the farmers must be issued cards or certificates to use these plant protection substances.

However, about 60 per cent of the country's population earns a living by farm work, so a great number of people use the substances. Implementing mandatory training may well be difficult, particularly when it affects the farmers' production process, said Hong.

Asian investors help boost realty sector

Many Asian investors have poured money into the property industry, making it second largest recipient of FDI in Viet Nam this year.

Though the industry has remained depressed, they invested US$1.7 billion.

Of the 10 projects in the year to date the Tokyu Binh Duong Garden City by Japan's Tokyu Group and the Southern Ha Noi Supporting Industries Park (HANSSIP) by the Japanese Shimizu Corporation are the largest in terms of investment.

Property developers and investment funds from other Asian countries are also eyeing Viet Nam's realty sector.

According to the Gulf Times, Qatar plans to invest up to $4 billion in a series of properties, mostly focused on infrastructure, shopping malls, and the residential and hotel sectors.

Malaysia's SP Setia Bhd, which is developing two property projects in southern Binh Duong Province, wants to expand to Ha Noi and HCM City.

Speaking at a recent property conference in Ha Noi, Tran Nhu Trung, deputy director of Savills Ha Noi, revealed that many Japanese, South Korean, Singaporean, and Malaysian investors have sought Savills's assistance to explore investment opportunities in the country.

Tran Tan Thien, chairman of investment consultancy Song Phat Company, said Asian investment, especially Japanese, increased strongly in the first half of the year.

Asians are interested in the Vietnamese property market due to cultural similarities, good political relations, and good geographic location, he said.

The economic crisis in the EU has prompted investors to switch their focus to Asian countries, including Viet Nam.

There are hurdles to investing in the Vietnamese property industry in the short term.

Many foreign-invested projects have fallen behind schedule – like Booyoung International Apartment Complex, Times Square, and Park City in Ha Noi, and Berjaya Viet Nam Financial Center and Berjaya Viet Nam International University Township in HCM City.

Others like the Creative City project in central Phu Yen Province and Da Phuoc International Urban area in Da Nang City have even seen their licences cancelled.

But from all accounts foreign investors still rate it as an attractive market.

Analysts expect the increase in FDI to help the property market recover soon.

Da Nang real estate market shows signs of life

Liquidity in the apartment market in central Da Nang City partly improved while the segment of offices for lease saw a reduction in rent for the second quarter, according to the latest report on the Da Nang real estate market released by the Savills Viet Nam Company Ltd on August 28.

Savills Viet Nam, one of the leading real estate services providers in Viet Nam, said that by August, no new projects had entered the market, but the current stock had increased slightly due to the additional launch of one project in each sector.

The sale status of the whole apartment market increased slightly by 1 per cent to 50 per cent compared with the first quarter. The price range varied from VND14 million to VND62.48 million per sq m.

Approximately 1,200 apartments from three projects would enter the market by 2013.

Hai Chau District was the biggest future supplier of apartments in terms of number of units and projects, while Son Tra was expected to be the largest future supplier of villas with 700 dwellings from four projects.

Meanwhile, the average rent of offices for lease decreased by 2 per cent quarter-on-quarter but overall occupancy reached 86 per cent, an increase of 10 per cent. The total stock was unchanged quarter on quarter, remaining at approximately 80,000sq.m.

In the second quarter, offices took up 8,550sq.m of space, the highest level over the last year due to the efficient performance of most of Hai Chau's existing office buildings.

In 2013, two projects would provide a total of approximately 10,400sq.m of office space.

The Da Nang hotel and resort market consisted of 3,100 rooms at 29 hotels and resorts, increasing 7 per cent against the first quarter.

The second quarter was the peak season for domestic visitors so the average occupancy for the overall market increased 7 per cent quarter-on-quarter.

Six projects were expected to come online in the remaining quarters of 2012, providing approximately 900 rooms.

The total stock of Da Nang's retail market was approximately 100,000sq.m, a 1 per cent decrease quarter-on-quarter but increasing 32 per cent year-on-year.

The average rent also saw a 3 per cent quarter-on-quarter decrease while the average occupancy rate was 88 per cent, increasing by 1 percentage point compared with the first quarter of this year.

In the near future, Da Nang's retail market was expected to welcome big retailers such as Parkson and Lotte Mart, said Savills Viet Nam.

Vo Van Cuong, standing deputy chairman of the Da Nang Real Estate Association, said the city property market could recover if the interest rate was not more than 10 per cent for loans and 5-7 per cent for deposits. With these interest rates savings could flow into the property market.

The market was expected to start recovering as of the second quarter next year, Cuong said.

Da Nang has many ways to recover the property market, including increasing air routes, flights, visitors and entertainment areas and setting stable land prices.

Banks take stock in lieu of payment from debtors

Converting bad debts into shares is considered by many experts to be one of the most effective methods that can help banks partly settle their bad debts.

Nguyen Van Binh, governor of the State Bank of Viet Nam (SBV), told the National Assembly in early July that the total bad debt at Vietnamese banks stood at 10 per cent, up from 6 per cent at the end of last year and from less than 3 per cent in 2008.

The Government including SBV, is under pressure to find ways to reduce the debt, including creating a national debt-purchase-and-sales company with capital of VND100 trillion ($4.8 billion) to deal with the problem.

Many experts, however, said that settling bad debts should be done first by the banking sector, whose bad debts have reached VND280 trillion.

They suggested converting banks'bad debts at enterprises into shares, which could reduce losses and costs.

Dr Pham Sy Liem, vice chairman of the Viet Nam Federation of Civil Engineering Association, said credit institutions could deal with bad debts through either immediate or future cash recovery.

Immediate recovery could be accomplished six ways: compulsory sales, package sales, general sales, inclusion of all debts, leasing, and legal action.

Future cash recovery could be done in two ways: either converting debts into shares or converting bad debts into securities.

Securitisation of bad debts is the process of conversion of existing bad debts into securities.

In particular, lenders and borrowers can come to an agreement under which debts that enterprises owe to banks would be converted into the banks'shares, or be considered to be banks' capital contributions.

Trinh Duc Tuan of the HCM City Agriculture-Forestry University said that the conversion of bad debts into shares was a solution to the banks' bad debts that had never been done in Viet Nam but it would have advantages.

Under this method, bad debts would be settled within several months, while it would take years to settle the bad debts via a national debt-sales-and-purchase company.

This means that the conversion of bad debts into shares would help enterprises soon escape from debt, while the banks would have opportunities to become the enterprises'shareholders.

Since all bad debts would be settled the companies then would have enough conditions to borrow new money from the banks to invest in their production and business activities.

Banks, therefore. would continue offering loans, Tuan told Tien Phong online.

With state-budget monies limited, the securitisation of bad debts would not require the government to use a large amount of money (estimated at VND100 trillion) to set up a national debt-purchase-and-sales company.

The recovery of the Binh An Seafood Joint-Stock Company (Bianfishco) clearly proved that the conversion of the banks'bad debts into shares was advantageous.

Sai Gon-Ha Noi Commercial Bank (SHB) decided to convert its bad debts at Bianfishco into shares and become the company's largest shareholder with a 50-per-cent stake.

The bank has the responsibility to deal with the company's financial issues and implement the entire restructuring of its operations. It also has the right to oversee operations of Bianfishco.

SHB's settling of Bianfisco's bad debt helped Bianfishco to survive but it also helped the bank and four others from losing several thousand of billion dong.

More significantly, the bank saved thousands of fish breeders from having to pay back the money so they have more cash to invest in their breeding businesses.

Experts, however, said that the banks should carefully assess enterprises before making a decision to convert debt to shares.

The banks would likely lose capital if the enterprises were unable to recover and develop.

To ensure the effectiveness of the banks'securitisation of bad debts, the central bank should closely control this transformation process, according to experts.

They suggested that banks in the future regularly withdraw their capital at the enterprises to reduce their ownership of enterprises and focus their capital on their main professional activities when enterprises begin to operate more effectively.

Nguyen Tri Thanh, deputy director of the Central Economics Research and Management Institute, also agreed that the Government still needed regulations to restrict the banks'direct investments so that risks could be reduced.