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 Red River Delta development plan announced; Steel sector struggles to iron out difficulties; Vietnam’s sustainable coffee production starts to stir; Shipping firms ignore container handling charges

ETF portfolio restructuring weighs on shares

The trading of shares last week was mostly affected by the caution shown by traders prior to the restructuring of exchange-traded funds' portfolio.

FPT Securities Co analyst Nguyen Van Quy said, based on the current status of liquidity, that cash has not yet been drawn out of the market. "However, trading has exposed the weakness after last week's slumps."

The market would continue to be affected by the exchange-traded funds' restructuring period and the fourth quarter business results that are still to be announced, he added.

As there would be a great differentiation between stocks, Quy advised investors to accurately judge the stocks by assessing their fundamental values, rather than rumours.

Meanwhile, the VN-Index on the HCM City Stock Exchange lost 0.8 per cent, compared to the previous Friday's close to 506.06 points. The average value of trades reached VND1.46 trillion (US$68.8 million), as trading volume averaged 86.9 million shares per session.

On the Ha Noi Stock Exchange, the HNX-Index advanced 0.2 per cent to 66.22 points, while trading value and volume averaged over VND312.4 ($14.7 million) and 39.3 million shares.

Market indices were boosted during earlier sessions last week by the increase of blue chips, such as private equity firm Masan (MSN), Sacombank (STB), Pha Lai Thermalpower (PPC), Vietcombank (VCB) and insurer Bao Viet Holdings (BVH).

However, selling pressure on speculative stocks remained high. Shares of the real estate, construction and mineral sectors, and the recent rising stars of garment company Mirae (KMR), Viet Nam Ocean Shipping (VOS) and Idico - Petroleum Trading Construction Investment (PXL) were sold off.

This, in turn, created a spreading effect to large-cap stocks, bringing them down, despite strong buying by foreign investors. Foreign investors bought a total net of VND145.4 billion ($6.8 million) last week.

Although FTSE Vietnam ETF decided to add MSN and PetroVietnam Transporation (PVT) to its portfolio, trading on the two stocks did not come up to expectations. The buying of MSN was not as large as expected, while PVT was heavily sold. The PVT price has witnessed a long period of rising, since earlier this year, therefore profit-taking activities were intensive.

Meanwhile, last Saturday, Market Vectors Vietnam ETF announced that it would exclude PetroVietnam Construction (PVX) from its tracking and add a Korean stock, instead. The fund will reduce the proportion of Vietnamese stocks to 70 per cent, from the current 72.61 per cent, beginning next Monday.

Market Vectors Vietnam ETF is holding more than 3.12 million PVX shares worth $3.7 million, equivalent to 0.96 per cent of the fund's net asset value. PVX closed last Friday's session at VND2,300, at only half of the price seen earlier this year.

Also, Sai Gon-Ha Noi Bank (SHB) and Da Nang Rubber (DRC) will be sold to reduce its percentage in the fund. It will reduce SHB from 4.36 to 3.45 per cent, and DRC from 2.49 to 1.86 per cent. 

Red River Delta development plan announced

The Ministry of Planning and Investment (MoPI) and the People’s Committee of the northern province of Ha Nam have jointly announced a master plan for socio-economic development in the Red River Delta up until 2020 at a recent conference in Phu Ly, Ha Nam.

Speaking at the event, MoPI Deputy Minister Dang Huy Dong said the master plan is an important basis for ministries, sectors and relevant localities to map out sectorial development plans, provincial socio-economic development plans and five-year and annual socio-economic development plans.

Under the master plan, the region’s contribution to national gross domestic product (GDP) is expected to increase from 24.7 percent in 2010 to 26.6 percent in 2015 and 28.7 percent in 2020.

Meanwhile, the region’s average per capita income will climb to 2,500 USD by 2015 and about 4,180 USD by 2020.

By 2020, the agricultural sector will account for 7-7.5 percent of the region’s GDP, industry and construction will reach 45-47 percent, and services, 46-48 percent.

The plan also set a target of creating jobs for 300,000 to 350,000 labourers every year and reducing the annual average rate of poor households to 2 percent, while overcoming environmental pollution in both rural and urban areas and ensuring sustainable requirements during the region’s development process.

Priorities will be given to high quality transport, consultation, design, invention, finance-banking, telecommunications, education-training, healthcare, trade, tourism, science and technology.

With ambition to develop tourism into a spearhead sector, the region will pour investment into building a number of key tourism areas that satisfy international standards.

By 2015, the region is expected to welcome 17-18 million domestic visitors and 3.2-3.5 million international tourists. The numbers are expected to hit 24-25 million and 4.5-5 million respectively by 2020.

Investors are encouraged to continue investing in industrial parks, especially those repairing and building ships and other marine vehicles in Hai Phong city, and Quang Ninh and Nam Dinh provinces.

In agriculture, the region will focus on intensive cultivation of rice, vegetables and flowers, industrial pig and poultry farming and aquaculture using cutting-edge technologies.

Economic and social infrastructure will be developed synchronously to generate momentum for the region’s socio-economic development.

The system of highways connecting the region’s economic, commercial and service centres will be completed during the period.

The plan aims to build the region into the nation’s pioneer area in implementing the country’s strategic breakthrough targets, restructuring the economy and renovating growth models.

The region is expected to become a driving force for the country’s economic development, industrialisation and modernisation, contributing to raising Vietnam ’s position in the international arena.

The Red River Delta includes 11 provinces and centrally-run cities. They are Hanoi , Hai Phong, Hai Duong, Bac Ninh, Vinh Phuc, Hung Yen, Thai Binh, Nam Dinh, Ha Nam , Ninh Binh and Quang Ninh.

According to the plan, Hanoi and neighbouring cities will be developed into a national centre of politics, culture, economics and science-technology.

Hai Duong city will be a central urban area, focusing on developing industries, science research and technology transfer, while Nam Dinh city will become a centre for agriculture-served industry, training and healthcare, and Hai Phong a gateway for economic integration in the north.

At the conference, participants presented reports related to measures to implement the plan, with priorities given to developing an area for manufacturing high quality farm products and a rural transport infrastructure system.-

Steel sector struggles to iron out difficulties

The Vietnamese steel industry could face difficulties in reaching its growth rate target of 2-3 percent this year.

Slower growth in the steel industry might be due to low demand, abundant supply and increasing material prices, according to the Vietnam Steel Association (VSA).

Statistics released by the Ministry of Industry and Trade indicate that in the first 11 months of the year, both steel output and sale decreased from the same period last year.

Specifically, iron and steel output in the period saw a 10.8 per cent decrease to 2.48 million tonnes, though laminate steel was 2.61 million tonnes, increasing 25 percent.

The association also said steel prices saw a slight change due to supply over demand, noting that steel imports were still high during the period, despite weak demand.

Figures from the General Statistics Office revealed that Vietnam shipped 2 million tonnes of steel, worth 1.61 billion USD, during the January-November period, posting a 17 percent rise against the corresponding period last year.

However, steel import in the period reached 8.9 million tonnes, with the total amount of 6.25 billion USD, representing a 27 percent year-on year surge. The sector also saw a 2.64 billion USD trade deficit during this period.

VSA chairman Pham Chi said the industry's trade deficit during the period was caused by producers importing hot laminate steel to be used as cold laminate steel, flat steel and colour-plate corrugated iron production for exports.

Cuong added that exports of the items during the period rose 30-40 percent in comparison with the same period last year.

He added that one of the sector's biggest difficulties was with limited capital, which much depended on loans. In addition, it has also relied on imported materials and backward technologies, resulting in high production costs and low competitiveness.

The association said steel producers should gradually eliminate old-fashion technologies to save production costs, while striving to expand export markets.

The businesses were urged to organise export networks targetted to large and long-term potential markets. They should also have a deeper understanding about laws of export countries, to avoid possible lawsuits.

The Vietnam Competition Agency announced on December 3 that steel imports from mainland China, Indonesia, Malaysia, and China’s Taiwan will be subject to anti-dumping taxes, ranging from 6.45 per cent to 30.73 percent for first time offenses.

The ruling was the result of a five-month inspection by the agency on steel imports from these countries, following complaints from Posco VST Company and Hoa Binh Inox Joint Stock Company, which accounted for 80 percent of the Vietnamese steel market.

The agency said manufacturers from these countries and territories have sold their steel to Vietnam at prices indicating they were dumping steel.

VCA will levy anti-dumping duties within 120 days on steel imports from those exporters.

A 6.45 percent anti-dumping duty will also be applied for China's Fujian Southeast Stainless Steel Co Ltd, while the respective figures for Lianzhong Stainless Steel Corporation and Fujian Southeast Stainless Steel Co Ltd are 6.99 percent and 6.68 percent, according to VCA.

Additionally, PT Jindal Stainless Indonesia and other Indonesian steelmakers will bear a 12.03 percent duty when exporting steel to Vietnam.

Bahru Stainless Sdn Bhd and other Malaysian manufactures will be subject to a 14.38 percent tax.

The highest duty, 30.73 percent, will be imposed on Taiwan's Yuan Long Stainless Steel Corp, while Yieh United Steel Corporation and other Taiwanese steelmakers will be subject to a 13.23 percent tax.

The anti-dumping tax levels were lower than proposals from the two plaintiffs, which asked for duties ranging from 20 percent to 39.9 percent to be applied for five years.-

Vietnam’s sustainable coffee production starts to stir

Vietnam is targeting to apply sustainable production methods on 300,000ha of coffee by 2015, delegates has told a forum in Ho Chi Minh City.

Pham Dong Quang, deputy general director of the Department of Crop Production, said on December 4 that Vietnam's coffee area expanded strongly, reaching 620,000ha last year.

Coffee is important to the country as it is the second largest agricultural export product in value after rice and offers a living for 3 million farmers.

Vietnam is the second-largest coffee producer in the world and the first for Robusta coffee, with yields being the highest in the world.

However, the coffee sector faces challenges, threatening its sustainable development.

They include poor techniques of farming, harvesting, processing, post-harvesting and preservation, a high proportion of old coffee areas, improper use of fertilisers and pesticides and wasteful use of irrigation water.

In response to the growing sustainable coffee consumption of the global market, the sector needs reforms to produce more sustainably sourced coffee, he said.

The Sustainable Coffee Programme began in Vietnam last year as a public-private cooperation.

Sustainable coffee production is a critical requirement to improve farming capacity, reduce input costs and increase value for farmers, the forum heard.

About 200,000ha was awarded certification under sustainable standards, of which 150,000ha meets 4C (Common Code for Coffee Community) standard, the department said.

The department is establishing a project to develop the coffee sector in a sustainable manner, with a focus on increasing product value.

Under the project, about 300,000ha of coffee plantation areas will apply sustainable production by 2015, and 480,000ha by 2020.

The project also targets increasing the processing rate, replanting areas and farmers' incomes, it said.

Nguyen Tan Trung, representative for farmers in Di Linh district of the Central Highlands province of Lam Dong, the second largest coffee producer in Vietnam, said about 40,000ha of coffee in the province was certified sustainable coffee production in accordance with 4C, UTZ and RFA.

Trung said SCP brings benefits for farmers, enabling them to approach the way of proper fertiliser application, integrated pest management, proper irrigation, proper soil management, harvesting of ripe coffee cherries and new drying techniques, contributing to raising coffee quality.

However, he and other delegates agreed that there are many difficulties in implementing the programme.

Do Ha Nam, general director of Intimex Group and deputy chairman of the Vietnam Coffee and Cocoa Association, said with the objective to develop coffee sector toward sustainability, the company last year began to implement two 4C sustainable coffee projects in Central Highland provinces.

Since many coffee growers are ethnic minorities, their awareness is still limited, making it difficult for the company to train farmers with good farming and management practices in compliance with the 4C code of conduct, adding that scattering plantation areas have led to high investment costs.

"It is not easy to change the practices of farmers. It requires a lot of time and cost," he said.

Trung said "local collectors did not fully satisfy the criteria of traceability". With economic benefits from the premium paid for certified coffee, they sometimes mixed certified coffee beans with non-certified ones, he said.

"Some collectors did not pay the premium to farmers," he said. As a result, many farmers did not comply with the criteria.

In reality, many coffee exporters organised technical training for farmers to standardise their documents for official audits, he said.

He said that companies and agencies should organise training on the code for farmers who participate in the certified coffee programmes every year.

They should limit the number of farmers in each course to about 70-100 farmers to make the course more efficient.

Strengthening independent audits for certified units, especially attaching more importance to the criteria of traceability, is also needed, he said.

Shipping firms ignore container handling charges

Many shipping agents calling on Cai Mep-Thi Vai Port have refused to pay container handling charges following the new price levels as stipulated by the Ministry of Finance, causing numerous problems to service providers in recent times.

Nguyen Xuan Ky, deputy general director of the Cai Mep International Terminal, said that the total fee that shipping firms have to pay amounts to over US$1.2 million. If the enterprises continue to delay payment, port service providers will suffer huge problems.

The enterprises are waiting for an explanation from the Ministry of Finance over the Decision No. 1661/QD-BTC, which became valid on August 1, 2013 to set the minimum service fee framework for the import-export container loading and unloading services.

The enterprises have signed contracts with port operators through competitive tenders. They said the service fees at the Cai Mep-Thi Vai port complex are less competitive than other regional ports and that the service fee increases will force shipping firms to switch to other ports.

Speaking to logistics firms in a dialogue earlier this month, Deputy Minister of Transport Nguyen Van Cong said that the minimum service fee framework is aimed at stabilizing service charges and preventing unhealthy competition.

In addition, intervention of the State is necessary to secure State capital in port joint ventures. Otherwise, foreign companies will take over key ports in Vietnam, Cong said.

On July 15, the Ministry of Finance released Decision No. 1661 regulating that the service fees for 20, 40, and over 40-foot containers are US$46, US$68 and US$75 respectively. The fees for empty containers are US$29, US$43 and US$48 respectively.

The fees for cold-storage, hazardous  goods or oversized containers will be negotiated between the service provider and the client, but they must not be lower than the stipulated levels.

Ministry wants railway upgrade plan ready soon

The Ministry of Transport has asked Vietnam Railway Corporation and its consulting partner to quickly finish the north-south railway modernization plan and submit it to central authorities prior to December 10.

At a meeting on Wednesday to review the final report on the plan, Deputy Minister of Transport Nguyen Van The urged the related parties to quickly finished the detail plan, with concrete analysis on the train speeds mentioned in two scenarios for the upgrade plan.

As per the modernization plan submitted by Vietnam Railway the consulting firm, the average train speed will be around 80-90 kilometers per hour for passenger trains and 50-60kph for cargo trains. The plan also envisions the connection of the national railway network to seaports, industrial parks, and tourism zones.

In the plan, the first scenario targets a speed of 80kph for passenger carriages and 50kph for cargo trains, with annual capacities of 15 million passengers and five million tons of cargo.

The second scenario, meanwhile, aims for a speed of 90kph for passenger carriages and 60kph for cargo trains, with annual capacities of 15 million passengers and five million tons of cargo.

World Bank reviews ODA projects in HCMC

The World Bank’s country director for Vietnam, Victoria Kwakwa, and HCMC Chairman Le Hoang Quan on Tuesday co-chaired a meeting to review the projects financed by the global lender in the city.

The municipal Department of Planning and Investment said in a report given at the meeting that the city is executing 23 projects using official development assistance (ODA) loans, including four worth US$310.8 million financed by the WB.

These four projects are in the areas of urban upgrade, water loss reduction, environment sanitation, and food safety. The global lender is also considering financing some more projects, including one to fight flooding in the Tham Luong-Ben Nghe canals basin.

The city’s Transport Department briefed the meeting on progress of some projects funded by the WB, especially the formation of six Bus Rapid Transit routes and the sanitation of the Tan Hoa-Lo Gom basin among others.

HCM City set to attracts US$2 billion of FDI capital this year

Foreign direct investment (FDI) attraction in HCMC reached US$1.6 billion in January-November for both fresh and additional capital, leaping nearly 30% year-on-year, and is expected to hit US$2 billion in FDI capital this year, an official said.

Thai Van Re, director of the city’s Department of Planning and Investment, said at a meeting on the January-November socioeconomic situation on Wednesday that the city’s FDI is on the rise while domestic investment lagged.

“As of November 20, the city had 412 newly-licensed FDI projects and 120 operational ones with adjusted capital. Overall, the value of fresh and additional FDI capital in the city is US$1.6 billion in the year to date, jumping 29.6% on year,” he said.

The city expects to raise FDI attraction to some US$2 billion this year, he noted, adding the city lured some US$1.3 billion of FDI in 2012.

Meanwhile, domestic investment is much lower. Re reported there were around 23,600 companies given new business certificates with total registered capital of VND107.6 trillion as of November 20, growing 7% in the number of enterprises but slumping 39% in value year-on-year.

About 2,200 enterprises have completed procedures for dissolving in January-November citywide, representing 9.3% of the number of newly-established firms, Re said. He remarked that the 2,200 new businesses were a positive signal for the city’s economy though it was far lower than the number of nearly 10,000 firms established annually five years ago.

Meanwhile, Re said that export value of the city totaled US$24 billion in the eleven-month period, dipping 7.3% year-on-year. Exports have fallen given respective decreases of 13% and 3.8% in crude oil export volume and price, dragging the city’s total export revenue down by over US$1 billion.

In addition, a fall in export prices and volumes of many kinds of products has also brought down the city’s total export value. In particular, rice exports have shrunk 47.8% in volume and 6.8% in price while coffee exports have gone down 22.5% in volume and 2% in price.

In the meantime, the city’s import spending amounted to some US$23.5 billion in the eleven months, picking up 13.8% from the year-ago period.

According to HCMC Chairman Le Hoang Quan, the city’s economy has continued recovering owing to its steady quarterly GDP growth, which rose 7.6% in the first quarter, 8.1% in the second quarter, 10.3% in the third quarter and is projected to jump 10.7% in the fourth quarter.

The city by the year’s end will continue to focus on restructuring the economy by re-arranging State-owned enterprises, restructuring public investment and re-organizing the banking-finance industry, Quan said.

* The nation’s foreign direct investment (FDI) capital attraction has surpassed the estimation for the whole year, hitting US$20.8 billion so far, according to the Ministry of Planning and Investment (MPI).

According to a report of the Foreign Investment Agency under the MPI, the total newly registered and additional capital has reached jumped 54.2% on year to over US$20.8 billion, far surpassing the ministry’s earlier estimate for the whole year at around US$13-14 billion.

Of which, the total capital of newly-licensed FDI projects has reached US$13.7 billion, a 73.3% year-on-year increase.

However, FDI disbursement during the period has not matched the newly registered capital. The agency estimated FDI disbursement has reached US$10.5 billion as of this month, a 5.5% year-on-year rise.

Although the figure has nearly reached the preset target, it is still low compared to the new capital inflow, the report said.

This year, foreign investors have poured capital into 18 sectors, of which the manufacturing and processing sector has attracted the most capital with 557 new projects and newly registered and additional capital of US$16 billion, or 77.2% of total.

Japan takes the lead with US$5.68 billion of pledged capital this year, or 27.3% of total newly-registered and additional capital, followed by Singapore with nearly US$4.3 billion and South Korea with US$4.1 billion.

Capital construction debts tumble

Debts owed by the State to developers of capital construction projects had declined sharply as of the middle of this year, according to a report the Government has sent to the National Assembly.

Minister of Planning and Investment Bui Quang Vinh in the report said that capital construction debts from the State budget and government bonds was over VND43.3 trillion by mid-2013, a strong decline compared to VND91 trillion by the end of 2012.

Of which, debts due to the State budget was VND32.8 trillion for over 14,600 projects, and from government bonds VND10.4 trillion for 964 projects.

Giving no specific explanation for the sharp decline, Vinh said that ministries, agencies and local authorities arranged over VND15.5 trillion to settle debts for over 2,600 projects in 2012.

Local authorities accounted for nearly 94% of total debts of capital construction projects while central ministries and agencies made up the remaining ratio. Capital construction largely covers infrastructure and other key public facilities.

Ninh Binh Province was the biggest debtor with over VND3.9 trillion, followed by Ha Giang, Danang, Thai Binh, Daklak and Hanoi City. The Ministry of Transport had a debt of around VND1.2 trillion, the highest among central ministries.

Capital construction debts are the serious problem as local authorities have asked enterprises to advance capital for public projects. Many enterprises have got into big troubles given the debts.

The Government has asked local authorities to complete debt payments before 2015.

HCM City invests VND264 trillion in Mekong Delta

HCMC-based enterprises since 2001 have invested in 23 industrial parks and over 1,000 projects in the Mekong Delta with total capital of nearly VND264 trillion, or some US$13 billion, said HCMC Chairman Le Hoang Quan.

Speaking at a conference as part of the Mekong Delta Economic Cooperation 2013 Forum (MDEC 2013) held in Vinh Long Province on Tuesday, Quan said that those enterprises are interested in agriculture, seafood, infrastructure, urbanization, industrial park, trade and tourism sectors in the Mekong Delta.

Nguyen Phong Quang, vice chief of the Southwest Steering Committee, said that cooperation between HCMC and the Mekong Delta played a critical role in economic development in the region. The cooperation has helped improve living standards of local residents as HCMC is the gateway to many countries and is strong in science, technology and human resources.

Especially, the city is home to many large enterprises and is an important market for farm produce and seafood from the delta.

“With these advantages, I believe that the Mekong Delta has a strong need to cooperate with HCMC for development and vice versa,” he said.

Quan also said that the cooperation has helped the delta prop up its economic restructuring, improve the investment environment and better production.

However, many delegates at the conference said that the cooperation remains inadequate, so the Mekong Delta has yet to tap its potential.

Quang from the Southwest Steering Committee said that economic benefits for investors and workers are still low.

A delegate said that the region should establish processing factories to bring about more added values, such as processing fruits for the HCMC market and serve exports.

Nguyen Thi Hanh, general director of the store chain operator Saigon Co.op, said that her enterprise has plans to expand its supermarket network in the country to 100 units by 2015. Saigon Co.op will open at least one supermarket in each locality in the Mekong Delta to offer products to local residents and send farm produce and seafood from the delta to HCMC.

In addition, Saigon Co.op has signed product purchase contracts with local farmers. For instance, the retailer has cooperated with farmers in Tien Giang Province to sell mangos, star apples, rice and dragon fruits to the city, with Long An for veggies and watermelons and with Kien Giang for seafood products, Hanh added.

Dam work begins on Trung Son hydroelectric project

The first phase of dam building on the Ma River for the Trung Son hydroelectric project was launched in the central province of Thanh Hoa on December 1.

Deputy Prime Minister Hoang Trung Hai attended the ceremony held in Trung Son commune, Quang Hoa district.

Addressing the event, the deputy PM lauded local authorities, the project’s investor and the constructors for their great success in land clearance and other preparatory work for the multi-purpose project.

He urged the provincial People’s Committee and local authorities to implement the resettlement work and ensure a better life for people asked to move.

The project is the first of its kind in Vietnam to be financed by the World Bank, which is providing 80 percent of its total cost (330 million USD). The remaining amount is being funded by Trung Son Hydropower Co Ltd, a subsidiary of the Electricity of Vietnam, which is the project’s investor.

With a capacity of 260 MW, the four-turbine plant is expected to generate over 1 billion kWh to the national power grid every year. It will also provide water, help control floods in the lower reaches of the Ma River and create a momentum for socio-economic development and poverty reduction in Quan Hoa district.

Notably, the project will contribute to Vietnam’s climate change programme by generating clean energy and avoiding the production of an estimated 1 million tonnes of carbon dioxide per year.

The project’s construction, which began in November, 2012, is due to be completed in August, 2017.-

Quang Ninh promotes planting red- fleshed dragon fruit

Although new to Uong Bi city, Quang Ninh province, the red-fleshed dragon fruit is becoming popular and has brought high economic value to growers, a report by Vietnam Economic News reveals.

Red-fleshed dragon fruit has been seen in Uong Bi city since 2006 thanks to some farmers who brought the fruit from the south. The plant was initially grown on 1,100 columns in about one hectare.

According to To Van Toa, a red flesh dragon fruit grower, every year he harvests from 20-25 tonnes per ha. With prices ranging from 30,000-40,000 VND(1.5- 2USD) per kg, he can earn 600-800 million VND (30,000- 40,000USD) per ha. There was time when prices went up so high that he can earn up to one billion VND (50,000 USD) per ha.

“Red- fleshed dragon fruit is easy to plant and care for. It is suitable for various types of soil and capable of adapting to climate changes. If planted correctly, the plant can yield fruit after 8-10 months. But growers must master caring techniques and carefully select seedlings, fertilisers, and water to ensure the quality,” he said.

To date, red-fleshed dragon fruit plantations in Uong Bi has reached approximately 38ha, concentrated in communes such as Quang Trung, Phuong Dong, Bac Son, Thuong Yen Cong, and Vang Danh. Many farmer families have now escaped from poverty and gradually become rich thanks to growing the plant.

Developing red- fleshed dragon fruit in Uong Bi is prioritised by local and provincial authorities. Quang Ninh provincial People’s Committee already issued Decision 3460 dated December 26, 2012 to implement the “Construction and Development of certification for Uong Bi Dragon Fruit” project.

Then, Quang Ninh province’s Department of Science and Technology signed a contract with Viet Intellectual Property Asset Progression Company Limited to implement the project with a total budget of more than 2 billion VND (100,000 USD) .

Uong Bi City ’s authorities planned to develop red-fleshed dragon fruit towards commodity production in communes such as Quang Trung, Phuong Dong, Bac Son, Thuong Yen Cong, and Vang Danh through deployment of the “Red Flesh Dragon Fruit Development” project for the 2012-2014 period.

According to the project, the city recorded an increase of four hectares of red flesh dragon fruit in 2012, and expected an increase of 10-15 hectares during the 2013-2014 period.

In September 2013, Uong Bi Dragon Fruit Production and Trading Association was established with more than 30 members who were later provided with farming technique training programs coordinated by Quang Ninh province’s Department of Science and Technology and Viet Intellectual Property Asset Progression Company Limited.

Hopefully, efforts in building a certification mark for red- fleshed dragon fruit grown in Uong Bi will achieve positive results, and with a certified agricultural brand, local dragon fruit farmers can earn more money from selling the fruit and will soon shape up high quality dragon fruit areas in Quang Ninh.-

Kien Giang promotes high-quality rice production

The southern province of Kien Giang expects to harvest 7 tonnes per hectare in its intensive high-quality rice farming areas in the Winter-Spring crop 2013-2014, according to the provincial Department of Agriculture and Rural Development.

The province planted 90,000 ha of high quality rice farming in local districts of Hon Dat, Tan Hiep, Chau Thanh, Giong Rieng, Go Quao and Rach Gia city in its Winter-Spring crop.

The province also increased its VietGAP-standard large scale rice fields to 1,524 ha in this crop.

The locality urged local businesses to provide modern production equipment and pesticides to its farmers and buy all farmers’ rice.

In the intensive rice farming areas, the province applied advanced production technology to increase rice’s output and quality.

To date, more than 65,500 ha have been sowed with rice seeds. As many as 301,000 ha are expected to be sowed by late December.-

Masan ready to pour into domestic drinks market

Vietnam’s largest private sector company, Masan Group is gearing up for expansion in the beverage market in 2014.

Masan Group plans to become a more consumer focused company and is currently in the process of establish Masan Consumer Holdings (MCH) to consolidate it stakes in Masan Consumer under one company while acquiring other consumer companies.

This year, Masan Consumer acquired a 62 per cent stake in the iconic Vinh Hao Mineral Water Company, expanding its beverage portfolio which also includes Vinacafe Bien Hoa, and strengthening the beverage platform with the hiring of Le Trung Thanh, the former CEO of Nutifood and senior executive at PepsiCo Vietnam.

Vinh Hao has been in the Vietnam market for over 80 years as a leading mineral water producer. Masan’s acquisition of Binh Thuan province-based Vinh Hao however does not mean it will only focus on mineral water products.

Last month, Vinh Hao announced the board resolution to expand into other businesses. This implies Masan will broaden Vinh Hao’s product portfolios to other categories, including RTD tea, soft drinks, juices and energy drinks, underlining the group’s ambitions.

Moreover, the private group has set up the Masan Beverage department with veteran former CEO of Nutifood Le Trung Thanh as managing director. Before joining the nutrition products company, he had been deputy CEO of PepsiCo in Vietnam where he led a team to transform the flagging energy drink Sting into a leading market brand. Thanh also developed the Aquafina bottled water brand at PepsiCo as well as achieved success for Poca after launching the snack brand in 2006.

To date, Masan has not revealed any new beverage lines as it needs more time to gauge the market during a testing study. However, Masan Consumer announced at the company’s annual general meeting in April 2013 that it would launch three completely new products over the next year.

The non-alcoholic beverage market has seen various products from established brands for all segments. Competition Administration figures show that by 2012 Vietnam was home to 134 both local and foreign beverage manufacturers, with the top ten in terms of revenue including IBC, Tan Hiep Phat, Coca - Cola, PepsiCo, Interfood, Red Bull, La Vie, Chuong Duong Beverages, CKL, and Vinh Hao.

These leading names have faced stiff competition from newcomers or smaller players. The top ten held market share of almost 96.7 per cent in 2010 but that shrank to 75.6 per cent last year, marking an increase from 3.3 per cent in 2010 for the rest to a 24.4 per cent market share last year.

In addition, the Vietnam market has witnessed the new trend with more and more consumers shifting from boiled to bottled water; and from unbranded beverages to branded alternatives. This has underscored the need to deliver better and more varied branded products for a thirsty consumer market.

According to Euromonitor, the Vietnamese bottled water and bottled beverages market is expected to grow at 20 per cent per year in the 2011-2015 period in which estimated market size of $2.5 billion.

“We are continuously evaluating new product opportunities in areas that will appeal to our target markets and where we believe we will be able to leverage our established distribution network and brand-building capabilities, both in our existing product areas and in new product areas. This allows us to strengthen our market share and achieve higher than average profitability.” Venkatesh, Masan Group’s head of group strategy said.

Market analysts believe it is still too early to say if Masan would succeed in the new business, but its new expansion has alerted big market players.

Viettel Post has realised its big dream

The military-run Viettel Post Joint Stock Corporation has officially joined Vietnam’s club of enterprises with revenue of VND1 trillion ($48 million) on November 28, or 17 days earlier than the set target for 2013.

“This means that Viettel Post’s dream has come true,” said the corporation’s general director Luong Ngoc Hai.

He said Viettel Post would set a revenue target of about VND1.4-1.5 trillion ($66.66 - $71.42 million) for 2014, before reaching a set figure of VND2 billion ($95.23 million) by 2015.

Earlier, Viettel Post set a revenue target of VND1.015 trillion ($48.3 million) for 2013, with expectation that this target would be reached in mid December. However, on November 28, this figure was already hit.

“With this growth, we will fetch revenue totaled about VND1.12 trillion ($53.3 million) for this year, up 126 per cent against 2012. This achievement has affirmed that our business path is quite correct. It also results from the big efforts of the corporation’s all staff nationwide and overseas,” Hai said.

This achievement is also made by Viettel Post’s implementation of many key programmes. For example, since August 2013, Viettel Post has been cooperating in an agreement with China’s Guangxi EMS Company in delivering goods and products within China and Vietnam.

Under the agreement, each side will be a general agency delivering its partner’s goods and products in its country. Accordingly Viettel Post will also deliver Guangxi EMS Company’s parcels in Vietnam.

The corporation has also since early this year boosted the operations of online express delivery services, while strengthening traditional express delivery services. Revenue from these online-based services holds 5 per cent of total express delivery services.

Viettel Post has also continued developing its delivery services to all hamlets and communes nationwide.

The corporation has also sustainably expanded its cooperation programmes to regional markets. At present, its network has covered Cambodia, China and Singapore.

“We have also set a target to continue seeing growth both in revenue and profit, as well as labour productivity,” Hai stressed. “Besides continuing to expand our services and apply high technologies in business, we will find more strategic partners and combine with foreign partners to expand our overseas express delivery service.”

Joinus’ airport project hopes take off

The Quang Ninh Provincial People’s Committee hopes to maintain the momentum of the province’s development by asking South Korea’s Joinus to complete a financial report and feasibility study on the Van Don international airport project.

Trinh Van Hong, deputy director of the Van Don Economic Zone Management Authority, said the provincial committee wanted Joinus to complete the Ministry of Transport’s administrative requirements as soon as possible.

Way back in 2010, Joinus applied to replace US-based Rockingham Asset Management LLC as developer of Van Don international airport. However, to date no progress has been made.

“Previously we asked the investor to complete the work by this November. But it looks set to fail to meet the deadline,” said Hong.

Hong believed Joinus was serious about the investment plan. “It has pursued this project for years and spent lots of money in preparation. So, I don’t think the investor will reject it,” he said.

Van Don international airport is a key infrastructure project in the Van Don Economic Zone, close to the world heritage site of Halong Bay. The Vietnamese government would like to develop the zone as an international trade and high-class tourism and entertainment centre to serve the development of the northern key economic region.

In February 2012, the South Korean firm signed a memorandum of understanding with the Quang Ninh Provincial People’s Committee for the project’s development, underlining its commitment to invest.

Apart from the airport, the investor would build a motorway connecting Halong city and Van Don island. The total investment capital of the two projects is about $1.5-$2 billion. In July,

Joinus changed the airport’s investment model from build-operate-transfer (BOT) to a public-private partnership (PPP) as previously approved by the prime minister. According to the Quang Ninh Provincial People’s Committee, the investor and the provincial committee discussed the advantages of the PPP model and expected the change to make the project feasible.

As this is a very important infrastructure project in Quang Ninh, Hong added that the South Korean investor should promptly push the project forward to improve the investment climate in the province, particularly as many foreign investors are eyeing the province.

Early last month, Vienna-headquartered Casinos Austria, one of the largest casino operators in the world, joined the list of foreign companies eying investment opportunities for an integrated casino and resort in the Van Don Economic Zone.

Amata Corporation, a property and industrial park developer in Thailand, is also studying the development of a $2 billion industrial park and township project in Quang Ninh.

E-Mart eyes 2015 retail chain roll-out

E-Mart, South Korea’s largest retailer is mulling over plans to open its first supermarket in Vietnam within the next two years.

Carl Chang-Hun Lee, food grocery sourcing buyer for E-Mart told VIR that at present, the company was seeking partners in Ho Chi Minh City and Hanoi for opening its first supermarket in Vietnam. In addition the firm was seeking wholesale suppliers for its future plans.

At present, the company is assessing vegetables and lobster supplied by Vietnamese firms. However, the retailer has faced difficulties in selecting local suppliers as there remain concerns over quality standards.

Everyday Vietnamese brands such as G7 coffee only hold a two per cent share in E-Mart’s chain of supermarkets. E-Mart’s annual e-commerce in the Vietnamese market currently totals nearly $660,000 per year and this is expected to increase in the coming period, according to Lee.

According to Korean Trade-Investment Promotion Agency’s Private Equity Korea website, the Korean supermarket would likely opt for a joint venture as it prepared to officially tap into Vietnam in 2015. It may need assistance to ease into the local markets and facilitate loan financing, according to the website.

The company announced in July 2011 that it was partnering with Vietnam-based U&I Group and global real-estate business Savills, for E-Mart’s first ever foray into Southeast Asia. The company may strengthen its partnership with U&I into a joint venture, but this has not been officially decided yet. The firm has yet to solidify the size of its investment, as it will ultimately be determined about how it enters the market. Moreover, the process of selecting store locations was continuing.

According to Private Equity Korea website, E-Mart is eyeing Cambodia and Myanmar as the next sites for its Southeast Asia expansion. The company’s plans for overseas expansion follow in the aftermath of intensified regulations in South Korea.

Last year, the South Korean government passed a regulation which requires ‘super supermarkets’ (SSM) like E-Mart’s to close its business for two Sundays per month in order to help support struggling independent convenience stores.

As of July 2013, SSMs will be required to submit an evaluation which outlines the company’s impacts on commercial districts when planning to open up a new store. As a result, the company’s financial report cited slower growth. In 2012, the company posted $11.3 billion in sales and $669 million in operating profits. Analysts forecast E-Mart’s operating profits to drop to $680 million this year.

E-Mart will be the second South Korean retailer to operate in Vietnam, following Lotte Mart which entered the country in 2008.

Prime Minister approves shipbuilding industry strategy

Prime Minister Nguyen Tan Dung has approved a development plan for the shipbuilding industry, effective through 2020 and with a view to 2030.

The plans aims to tap into the capacity of existing shipyards while constructing new yards and repair facilities.

Under the plan, Vietnam also strives to establish a number of large-scale ship repair centres in connection with major sea ports and international maritime routes.

In the north, shipyards will be concentrated in Hai Phong and Quang Ninh province, with the Pha Rung, Ha Long and Bach Dang shipyards handling the majority of the workload.

Meanwhile the shipbuilding hub of the central region will be located in Quang Ngai and Khanh Hoa provinces, with the Quang Ngai-based Dung Quat yard specialising in oil tankers, floating storage vessels and drilling platforms to support the Dung Quat Refinery.

The approved plan also details a network of manufacturing facilities to support the shipbuilding industry as well as education centres to train qualified human resources for this industry.

Japan to lift ethoxyquin level in Vietnamese shrimp

Vietnam Association of Seafood Exporters and Producers has said that Japan is considering lifting the ethoxyquin residue level in shrimps imported from Vietnam from 0.01 ppm to 0.2 ppm.

The new accepted level of ethoxyquin in Vietnamese shrimps will be officially announced by end of January next year.

In 2012, shrimp exports to Japan dropped sharply, posting an increase of a mere 1.7 percent after the country tightened ethoxyquin check on Vietnamese shrimps.

Data from early warning system for food safety for Japan shows that the number of Vietnamese shrimp batches contaminated with ethoxyquin had decreased to four batches by November 25, 2013 from 17 batches in 2012.

In the first ten months of 2013, shrimp exports to Japan touched US$575 million, up 13 percent against the same period last year.

Further Government bond issuance approved

With 83% of votes, the National Assembly approved a resolution on additional issuance and allocation of Government bonds in the 2014-2016 period with total amount of VND170 trillion ($8billion) on November 28.

The money will be invested in four project categories, including a project on upgrading 1A and Ho Chi Minh highways; uncompleted projects which have been funded by Government bonds in the 2012-2015 period and in short of VND73.3 trillion ($3.4 billion); the national target program on building new rural areas (VND15 trillion, equivalent to $705 million) and counterpart fund for official development assistance (ODA) projects (VND20 trillion or $940 million).

The Government will issue bonds annually in accordance with the projects’ implementation to ensure the effecient use of capital.

Each project on improving and upgrading 1A and Ho Chi Minh Highways will be invested in accordance with defined allocation list and level.

Uncompleted projects funded by the 2012-2015 Government bonds will receive further capital if they face a lack of less than VND100 billion ($4.7 million) and plan to complete and put into operation before December 31, 2013. Prioritized projects are also those related to several important works in transport, irrigation and health care and some others to be completed in 2014-2015.

Disadvantaged communes along the border lines, in safety zones and coastal regions and on islands will be invested to develop the infrastructure in accordance with targets set in the national program.

ODA projects in developing socio-economic infrastructure under the management of central agencies or building the infrastructure for disadvantaged localities will also receive further counterpart capital in accordance with the Government regulations.




More than 100 Vietnamese and foreign firms are showcasing advanced wood processing technologies, machinery and raw materials at the 2022 Vietnam BIFA Wood exhibition which opened in southern Binh Duong province on August 8.


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