American multi-millionaires to visit Vietnam

Billionaire Mike Ryan from the Cayman Islands and Bob Livingston, the founder and chairman of Livingston Group LLC, will visit Vietnam to seek investment opportunities.

Dau Tu (Investment) newspaper cited Link World Unlimited Events LLC as saying that during their nine-day stay, the two investors will tour Hanoi, the central province of Ninh Thuan , Phu Quoc Island in the southern province of Kien Giang and Ho Chi Minh City.

They are keenly interested in the areas of heavy industry, finance and banking, shipbuilding and transport, particularly in the construction of ports, hotels and resorts.

They plan to meet with a number of Vietnamese businesses during their visit.

Mike Ryan is the owner and developer of the Grand Cayman, the Ritz Carlton and the Four Seasons in the Cayman Islands. He also owns a number of international conference centres around the world, the Condominium Hotel chain and a string of exclusive resorts.

Bob Livingston, who is the 106th Speaker of the US House of Representatives, is an envoy for many world famous names, including Rolls-Royce, Lockheed Martin, the European Aeronautic Defence and Space Company, the US Chamber of Commerce, Verizon, John Wickerman and the George Washington University.

Shares down after posting gains

Shares were sluggishly traded during this morning's session despite early gains.

On the HCM City Stock Exchange, the VN-Index slid 0.16 per cent to 449.19 points.

Gainers, however, outnumbered losers by 124-103.

The value of trades dropped 25.6 per cent over yesterday morning's level, reaching VND650.8 billion (US$31 million). Trading volume also fell at the same rate to 43.6 million shares.

The VN30 slightly decreased to 519.59 points. Among the 30 leading shares tracked by the index, although half of them posted gains, the largest shares retreated, pushing indices down.

Vietcombank (VCB) tumbled by 1.2 per cent, while insurer Bao Viet (BVH) lost 1.8 per cent and property developer Vincom (VIC) shed 0.5 per cent.

On the Ha Noi Stock Exchange, the HNX-Index dropped 0.55 per cent to 77.12 points.

Trading totalled VND259.2 billion ($12.3 million) on a volume of nearly 24.5 million shares, reaching only 64.8 per cent of yesterday morning's session in terms of value.

The market will open again at 1 pm.

HCM City shares break losing streak

The VN-Index continued to lose value yesterday, closing the afternoon session down 1.26 per cent from the previous day to 449.91 points. The value of trades declined 16 per cent to over VND1.3 trillion (US$62.6 million), while volume totalled about 86.5 million shares.

Blue chips led the decline, with 21 of the top 30 shares on the HCM City Stock Exchange plunging, including insurer Bao Viet Holdings (BVH), HCM City Infrastructure Investment (CII), financial conglomerate Ocean Group (OGC) and Sacombank Securities Co (SBS), which also fell to their floor prices.

Vietcombank (VCB) also declined by 3.4 per cent to VND34,000 per share. But Sacombank (STB) bucked the trend, rising another 3.4 per cent yesterday on news that it planned to issue $200 million worth of bonds on the Singapore stock exchange next quarter. Real estate developer Hoang Anh Gia Lai (HAG) and food processor Masan Group (MSN) also each saw more modest gains of around 1.5 per cent.

Decliners overwhelmed advancers by 184-62 overall, with the VN30 Index dropping 0.61 per cent to 519.7 points.

SACOM Development and Investment (SAM) was the most-active share yesterday with 2.7 million changing hands. SAM gained 3.6 per cent to settle at VND8,600 per share at the close.

"This seems to be a strong correction in the short term, such as usually takes place over 5-10 sessions, after which the market will quickly rebound," wrote HCM Securities Co analysts in a research note. "Medium-term investors can therefore plan to buy in the next few sessions."

According to the analysts, five consecutive sessions of declines on the HCM City market had increased sell pressures on shares pledged as collateral at several securities firms. Many hot shares have already fallen 15-20 per cent from recent peaks, and the corrective phase may not be over, they said, looking to the central bank to expand interest rate relief to a broader class of borrowers in oder to support the stock market.

On the Ha Noi Stock Exchange yesterday, the HNX-Index recovered from a morning loss, closing up 0.96 per cent to 77.55 points. However, the value of trades was down 19 per cent from Tuesday to just VND651 billion ($31 million) on a total volume of 65.8 million shares. Gainers edged decliners by a margin of 164-113.

Habubank (HBB) continued to be the most-active share on the northern bourse, with 6.4 million traded before it closed unchanged at VND5,600 per share.

Foreign investors were net sellers on the HCM City exchange, unloading shares worth nearly VND55 billion ($2.6 million), but they were again net buyers in Ha Noi, selling off shares worth a net of VND17 billion ($810,000).

Gold breaks VND41 mln threshold, sets new bottom

Local gold price has broken the VND41 million threshold, the lowest since early 2012, as world price continued its free fall.

Closing Wednesday's trading session, the bid and ask price of gold bullion produced by Saigon Jewelry Co (SJC), biggest Vietnamese gold refiner and trader, were quoted at VND40.78 million a tael and VND40.98 million a tael.

In the morning session, SJC gold bullion were traded at VND40.85 million a tael and VND41.05 million a teal for bid and ask respectively, down VND140,000 a tael compared to Tuesday’s closing price.

Meanwhile, Rong Vang Thang Long (Thang Long Golden Dragon) bullion manufactured by the Hanoi-based Bao Tin Minh Chau Co were traded at VND40.15 million a tael and VND40.45 million a tael for bid and ask respectively.

Spot gold recorded on Kitco.com was quoted at $1,539.90 an ounce, some VND2.3 million lower than the local price in accordance with the exchange rate of Vietcombank at VND20,870 a dollar.

Though the precious metal was traded at it 9-month low, most investors still did not dare to buy for fear the price would go down.

Many people go to the gold stores only to make cross reference to gold price as gold prices were constantly going down.

DOJI Group bought and sold only 2,000 taels in total, while yesterday’s figure was around 3,200 taels, VnExpress quoted representative of DOJI Group in Hanoi.

Deputy chief of SJC sales department, Nguyen Cong Tuong, said it wasvery difficult to determine the trend of the people, buying and selling.

"About 4-5 days ago, the market saw selling pressure from banks. However, today both the people and banks were almost standing outside the market to track the evolution, "he said.

According to Tuong, although the gold price in the world market had hit the bottom level of the year, there was still no sign of bottom catching. "The most likely scenario is that the precious metal prices will continue falling before regaining," Tuong said.

Phu Nhuan Jewelry (PNJ) gold bullions were also traded less unexcitingly though prices had dropped, said Nguyen Ngoc Trong, director of PNJ sales department.

“The people are expecting fold price to continue its downtrend and will not rush to buy. Meanwhile, some people are afraid prices continue to decrease, so they begin to sell to cut losses.”

"We saw more sellers than buyers, with 10 sellers for every 6-7 buyers," he said.

In contrast to gold bullion, gold rings, weighing 1/10 and 1/5 tael, were still selling well at Bao Tin Minh Chau stores.

According to the draft amending the foreign exchange ordinance of the State Bank of Vietnam (SBV), gold trading activities in foreign accounts by local residents will be realized if they get the licenses from the Prime Minister and SBV.

World gold price traded in the US continued to fall to its lowest level in 5 months on Tuesday night.

Gold futures for June delivery on the Comex decreased $18.6 to $1,542.5 an ounce, the lowest since December 29, 2011.

In the Asian session this morning, gold prices went down $8.80 to $ 1,535.50 an ounce.

With this price, the domestic gold price was VND1.9 million a tael higher than the world price using the free market forex rate.

World gold price was on a free fall as the euro continued to fall sharply against the dollar following the failure of Greece in forming a coalition government in the second election, causing increasing concern about a financial crisis in Europe.

Along with gold, oil prices dropped to its lowest level in six months. Sweet crude for June delivery in the US market fell 80 cents to $93.98 a barrel.

Besides, the Italian economic situation continued to discourage investors in the possible financial "storm" in Europe.

According to data from the Italian National Statistics (ISTAT) published on Tuesday, the country's economy continues to fall deeper into recession with Q1 gross domestic product (GDP) growth decreased 0.8 percent compared to the Q4/2011 and 1.3 percent over the same period in 2011.

This is the 3rd consecutive quarter Italian economy witnessed negative growth in the context of a public debt crisis leading to the collapse of many governments in Europe, leaving thousands of businesses going bankrupt.

Earlier, Italy's GDP slipped 0.2 percent and 0.7 percent in the Q3 and Q4 of 2011. The International Monetary Fund (IMF) has forecast Italian economy to decline 2.2 percent this year.

The bad news about GDP came just a day after credit ratings agency Moody's lower the ratings of 26 Italian banks, amid their struggle with many difficulties due to the impact of the austerity measures imposed by the government's Prime Minister Mario Monti.

Italian economy fell into recession currently the fourth time since 2001 with unemployment near 10 percent.

Critics of the austerity measures in Italy, Greece, and Spain said cutting government spending would worsen the economic situation.

Italian public debt levels are close to 1.95 trillion euros (about 120 percent of GDP), the fourth highest in the world.

Borrowing costs increased, and the amounts set aside to spend on the repayments of 2011’s loans, has sparked up investors’ concerns that Italy may bankrupt.

Coal exports to fund Vinacomin: official

Nguyen Khac Tho, deputy head of the General Department of Energy, told Tuoi Tre that state-run coal giant Vinacomin has to export coal in order to obtain capital for operation, despite the fact that the country will have to begin importing coal in 2015.

According to the Ministry of Finance, Vinacomin, or the Vietnam National Coal and Mineral Industries Corporation, has exported nearly 10 million tons of the types of coal which Tho said the country has little to no demand for.

“Given the 48 billion tons of coal Vietnam has in reserves, what has been exported is not considerable,” Tho told Tuoi Tre in an interview.

However, Tho also admitted that Vinacomin has in fact exported certain types of coal that are set for imports in the future.

“As stated, the domestic demand for such types of coal is far lower than Vinacomin’s supply capacity, and we thus have to export to avoid unsold stock,” said Tho.

“However, as of 2015, when domestic consumption increases as thermo-power plants become operational, we will have to import coal.”

When asked why Vinacomin does not focus on creating coal reserves to meet demand in 2015, Tho said exports should be pursued now to create capital for the corporation.

“In order to ensure an adequate supply for domestic demand in 2015, Vinacomin needs annual capital of VND42 trillion (US$2.01 billion), so it needs to export coal to have this investment capital,” he explained.

Tho said Vietnam is expected to import around 5 million tons of coal in 2015, a figure that will gradually rise in the following years.

The Ministry of Industry and Trade has assigned Vinacomin to take the main role in importing coal. It has signed a memorandum of understanding with some exporters from Indonesia, Japan, and Australia, said Tho.

Tho said it is not easy to import coal, given the increasing global demand for the mineral.

“Hence, we have ordered Vinacomin to be more active in signing import contracts, and also consider exploiting overseas coal mines, or buying shares in international mining companies,” he said.

As Vinacomin is likely to import coal even from Japan, a country which does not export the mineral, insiders are concerned that Vietnam will have to pay high prices for the imports.

“Yet this is a necessary solution to ensure imports,” responded Tho, adding that they will of course carefully consider economic effectiveness before officially inking import contracts.

EU approve PCA signing with Vietnam

Representatives from 27 member countries of the European Union (EU) approved the signing of a partnership and cooperation agreement (PCA) with Vietnam at the EU Foreign Ministers Meeting, on May 14 in Brussels , Belgium.

Consisting of 8 chapters and 65 articles, the PCA defines basic principles in Vietnam-EU relationships, while specifying a comprehensive cooperation framework in various fields, including trade, investment, judiciary, peacekeeping and international security.

The PCA, which was initialled by Prime Minister Nguyen Tan Dung and European Council President José Manuel Barroso in October, 2010 after two years of negotiations, is expected to bring the Vietnam-EU relationship into a new period of greater cooperation.
Nation predicted to export 7.2 mln tonnes of rice this year

Vietnam will export 7.2 million tonnes of rice by the end of 2012, up 0.1 million tonnes compared to 2011, according to the UN Food and Agriculture Organization (FAO).   

Thailand will remain the number one rice exporter this year with a volume of 7.5 million tonnes, down 3.1 million tonnes against last year, it says.

FAO estimates that the global rice trade in 2012 will decrease by 2.6 percent, from 35.2 million tonnes in 2011 to 34.3 million tonnes.

Rice exports from Asia in 2012 are forecast to reach 27.2 million tonnes, falling by 300,000 tonnes compared to 27.5 million tonnes last year.

FAO also forecasts that South America will export 2.6 million tonnes of rice this year, down 900,000 tonnes against the previous year. Brazil’s rice exports are predicted to see the sharpest year-on-year decline, by 50 percent.

Vietnam, Laos boost agricultural cooperation

Laos’ Ministry of Agriculture and Forestry in co-ordination with Vietnam’s Ministry of Agriculture and Rural Development (MARD) organized a seminar on developing agriculture between the two countries in Vientiane, Laos on May 15.    

Present at the event were Lao Deputy Minister of Agriculture and Forestry Typhom Malak and Vietnamese Deputy Minister of Agriculture and Rural Development Bui Ba Bong, Vietnamese ambassador to Laos Ta Minh Chau, and scientists.

Lao Deputy Minister Typhom Malak briefed his guest on limitations of Laos’ agriculture such as the inadequate development of irrigation and the limited application of science and technology in cultivation and breeding, which result in low output.

Therefore, he said, reinforcing agricultural cooperation with Vietnam is a good chance for Laos to gain experience, push the growth of cultivation and breeding and ensure food security.

Deputy Minister Bong said Laos has advantages for developing the agricultural sector, which will help it provide enough food for the domestic market and exports.

Both sides also proposed solutions to strengthen cooperation between Vietnam and Laos in training human resources, exchanging experience on science and technology, and applying advanced achievements in cultivation and breeding.

HCM City attracts more FDI projects

Since early this year, the Ho Chi Minh City Department of Planning and Investment has granted licenses to 129 FDI projects, valued at US$166 million in total.     

With more capital added to 28 projects already in generation, the total amount of FDI funding has reached US$450 million.

Singapore has taken the lead with more than US$94 million, followed by Japan with US$20.5 million.

Most newly-licensed projects are in the automobile, and science and technology sectors, and only a few projects are focused on real estate, financial and banking activities.

Chu Lai economic zone lures projects

Seventy two projects worth US$1.7 billion have been licensed in the Chu Lai Open Economic Zone in the central province of Quang Nam.

They include 18 FDI (foreign direct investment) projects capitalised at nearly $200 million, according to the zone's management board.

Some of the major tenants now include the Chu Lai – Truong Hai Auto Plant with an investment of $400 million, the $150 million Chu Lai Floating Glass Plant, and the $120 million Chu Lai Sodium Production Plant.

There is also a $195 million plant to manufacture automobile engines by the Truong Hai Auto JSC using technology from South Korea's Hyundai group.

The plant will employ 500 workers when it becomes operational next February, and sell its products to the domestic market and export to regional countries.

Chu Lai – Truong Hai Auto Company already manufactures trucks, buses, and cars.

The zone also has an auto line owned by South Korea's KIA group which can manufacture 100,000 units per year.

The province has said the zone has contributed significantly to socio-economic development and restructuring of its economy, with its auto assembly plants boosting development of Viet Nam's automobile industry.

Last year the zone accounted for 14.7 per cent of the province's industrial output.

Its export value of $59 million accounted for 17.6 per cent of Quang Nam's export turnover.

Companies located in the zone offered more than 1,200 new jobs, raising the number of permanent jobs in the zone to more than 11,000.

Government at loss over gold price disparity

The gap between domestic and global gold prices remains large despite the Government's efforts, according to independent market experts.

Experts said in April that the State Bank of Viet Nam issued a decree to restrict trade in gold bullion to stabilise the gold market, check hoarding and speculation, narrow the gap between the domestic and global gold prices, and minimise the influence of the gold market on monetary policy.

However, gold prices vary greatly between domestic and global markets, causing difficulties for authorised agencies to regulate the exchange rate and implement monetary policies.

At the last session late last week, global gold prices continued to drop by 3.72 per cent, while domestic rates remained unchanged.

On the morning of May 14, global prices stood at US$1,538.10 per ounce.

Meanwhile, the domestic price of gold bullion dropped by VND100,000 to VND41.1 million per Thang Long gold tael and VND41.67 million for SJC Gold.

The gap between global and domestic gold prices was VND2 million per tael.

Do Minh Phu, chairman of the Doji Gold and Gems Group, said the major difference between global and domestic gold prices was not due to the market's supply and demand.

The gold market has been rather quiet with a low number of transactions, according to Phu.

Explaining the price difference, he said that in the last two months, the global gold price had been cut by VND2 million per tael.

However, because most individuals and enterprises in Viet Nam bought gold bullions at much higher levels, they did not want to sell them as gold prices have dropped.

According to the Viet Nam Gold Association, domestic gold prices have not followed the global rate for a long time because the State Bank of Viet Nam has temporarily stopped the import of gold in an aim to reduce the trade deficit.

The domestic and global gold markets, which are not closely connected with each other, have also contributed to the differences in prices.

Most people have still maintained the habit of keeping gold to secure asset value, particularly during the prolonged economic turndown.

As a result, they continued to buy gold at the domestic rate, which was much higher than the global price, according to the association.

Association chairman Nguyen Thanh Long said the difference in the domestic and global gold prices varied based on the Government's administrative measures over the gold market, particularly its macro policies.

The import of gold will be only a temporary measure to stabilise the gold market and eliminate pricing differences, according to Phu of Doji Group.

He added that the central bank was capable enough of eliminating gold-pricing differences and did not have to use large amounts of foreign currency to import gold.

Phu suggested that the central bank cooperate with enterprises and commercial banks that hold large amounts of gold and have available distribution networks to ensure a sufficient supply of gold for the market.

He said that when gold supply on the market was ensured, then the market would become stable and the pricing gap would disappear.

Hai Phong industrial zones enjoy healthy FDI injection

Industrial zones in northern Hai Phong City attracted nearly US$908 million in foreign direct investment (FDI) by the end of April, a 20-times increase on last year, according to the Hai Phong Economic Zone Authority (Heza).

Since the beginning of this year, large investments had been poured into the city's industrial zones, affirmed Heza's Deputy Director Mai Xuan Hoa.

Hoa attributed the increase in FDI capital to distribution from Japanese investors.

This year, Japanese group Bridgestone committed to invest a big amount of money in developing a project producing car tyres in Dinh Vu Industrial Zone. The project would need $580 million during its first phase, Hoa said.

It might cost a total of $1.5 billion and cover and area of 100ha on completion, he added.

Heza announced that Hai Phong currently welcomed other FDI projects, one focused on producing printers with a total capital of about $100 million.

The authority estimated that FDI capital poured into Hai Phong's industrial zones would continue to increase this year.

It would surely be higher than the target of $500 million, it said.

In addition, Heza reported that capital from domestic investors also increased this year.

In the first four months, local industrial zones attracted nearly VND1.7 trillion ($81 million) in local money, doubling the figure of last year.

Fashion label prepares to expand

Sophie Paris, one of Asia's leading direct selling fashion brands, yesterday announced its forthcoming expansion into the nation's capital city to meet increasing demand in the northern region.

"We typically see monthly sales of around US$100,000 from Viet Nam's northern provinces, and so, based on what we have seen in other cities, we would expect to see that double once we are fully operational in the coming year," said the general director of Sophie Paris Viet Nam, Nick Jonsson.

Sophie Paris is a French owned direct selling fashion company operating in Indonesia, Morocco, the Philippines, Viet Nam and Malaysia. Its second showroom in Viet Nam will open its door in the capital in August following the first in HCM City.

Garment makers sew up profits

The central province of Thua Thien – Hue earned US$99 million from textile and garment exports in the first four months of this year, up 15.7 per cent against the same period last year with major import markets including the US, Germany and Japan, according to the provincial Department of Industry and Trade.

Some exporters in the province have achieved good results: Thien An Phat Textile and Garment Investment Joint-stock Co bagged about $3 million, and Phu Hoa An Textile and Garment Joint-stock Co made $1 million during the period.-

Expo to focus on support industries

The fifth support-industry exhibition will be held concurrently with two others on machine tools and electronic technology in HCM City from October 4-6.

The Japan External Trade Organisation (JETRO) in HCM City and the HCM City Investment and Trade Promotion Centre (ITPC), organisers of the support-industry expo, signed a contract on Thursday with Reed Tradex, the organiser of two other exhibitions, to confirm the co-location of the three expos at the Sai Gon Exhibition and Convention Centre in District 7.

The support-industry exhibition will feature 100 Japanese and domestic companies, mainly in the automobile, motorcycle and electronics industries.-

Sacombank to issue bonds in Singapore

Sacombank (STB) will issue bonds worth US$200 million on the Singapore stock exchange in the second or third quarter of this year, under a proposal that management will be represented at the bank's general meeting of shareholders on May 26. Proceeds would be invested in fixed assets and business expansion.

Under the proposal, the bank would also increase its charter capital this year by about 32 per cent in order to improve its financial capacity and competitiveness.

To finance the increase, STB would also issue additional shares representing about 14 per cent of equity, as well as offer bonus shares to existing shareholders representing 15 per cent of equity. Another 3 per cent would be issued to key employees.

In all, STB predicts equity at year's end of over VND1.8 trillion ($87 million) and will seek suitable merger and acquisation deals during 2012-15.

STB shares yesterday rose 1.7 per cent after three consecutive sessions of declines, settling at VND24,600 per share.

VAT payment date extended to help struggling business

VAT payment deadlines for April, May and June have been extended from the 20th of the following months to the 20th of November, December and January respectively, the Ministry of Finance announced today.

The move is aimed at helping struggling firms and households overcome financial difficulties

Businesses to have their VAT payment dates extended include small and medium businesses (excluding those working in the fields of insurance, finance, stock market, goods production and businesses with special tax requirements and corporations), and businesses that use high numbers of labourers in production and the processing of aqua products, garments, footwear, infrastructure and electronic parts.

These businesses still have to make their VAT declarations at the end of the second quarter of the year but do not have to pay them immediately.

The Ministry of Finance estimated the total VAT payments involved to be VND4,100 billion (nearly US$200 million).

The Government has also reduced land rental payments and waived this year's licence tax for fishery and salt-making households.

The Ministry of Planning and Investment reported that as at April 20, 82,000 businesses had gone bankrupt and 16,000 had ceased operating.

Highland farmers worry over low cassava prices

Thousands of farmers in the highland provinces of Gia Lai and Kon Tum have been struggling to survive, after cassava prices fell drastically, while its cultivable area and production has increased.

After seeing good prices for cassava, many households in Gia Lai and Kon Tum Provinces switched to growing this short-term crop. According to the provincial departments of Agriculture and Rural Development, cassava is growing in an area of nearly 70,000 hectares in Gia Lai, and 45,000 hectares in Kon Tum Province this year, averaging one hectare to produce around 30 tonnes of cassava.

With its current crop, Gia Lai and Kon Tum have been providing millions of tonnes of cassava in the market. But, although there are around ten starch processing plants in the North Central Highlands of Vietnam, they fail to consume the suddenly-increased cassava production.

Tran Thi Thu, owner of a cassava buying agency in Mang Yang District of Gia Lai Province, said that the price of dried cassava dropped to VND2,000 per kilogram from VND5,000 per kilogram, after farmers harvested a bumper cassava crop. An uncertain market caused buyers to hesitate as they were worried that prices would drop further.

Le Thanh Ha, deputy director of Phu Tuc Export Agricultural Products Processing Factory, said that although local authorities warned farmers against sudden and massive shift to cassava, they still expanded the growing area. The factory can only increase buying to a limited amount.

Cassava is mainly exported to China. However, the demand remains unstable, causing much uncertainty in farmers and processing plants. This year, export to China faced many difficulties, causing cassava prices to drop sharply.

HCM City gets tough on slow-moving resettlement projects

The HCMC government is weighing revoking licenses of long-delayed resettlement projects, which causes a shortage in resettlement housing fund and slowing down the site clearance process in Thu Thiem New Urban Area in District 2.

Nguyen Le Dung, deputy head of Thu Thiem Investment and Construction Authority (Thu Thiem ICA), said the city is taking drastic measures to accelerate the progress of resettlement projects.

The program to build 12,500 apartments for resettlement purpose is planned for completion in late 2012 or the first quarter of 2013. Still, the program is now just halfway to its goal due to many slow-moving projects.

So far, the municipal government has only received 1,100 resettlement apartments developed by Nam Rach Chiec Co. Ltd. (NRC) over a 17.3-hectare area in An Phu Ward.

NRC has registered to build 1,844 apartments under the format of ‘land in exchange for infrastructure’. Given the current slow pace, it is hard for the developer to hand over the remaining 712 units by late this year as expected.

If on schedule, a project of Duc Khai Joint Stock Co. with over 1,000 apartments will be finalized in late 2013. Another project of 4,200 flats invested by 21st Century International Development Co. should have been completed by now after two years of execution, but the developer remains silent.

Meanwhile, South Korean investor Daewon has asked for permission to pull out of a resettlement project of 2,200 apartments in this urban area. The city is seeking new investors to carry on the project.

Dung said credit tightening is one of the reasons why investors are slow to carry out their projects. Many developers have suspended their projects after running out of capital.

For example, Duc Khai Co. has only finished the basement section of the project and is finalizing legal procedures to borrow capital to continue the project deployment.

Apart from the ‘land in exchange for infrastructure’ format, the city is buying apartments from project owners after auditing investment costs plus a profit margin for the investors.

Under this format, Thu Thiem ICA last week signed a contract with Duc Khai Co. to buy 1,000 apartments of the resettlement project in Binh Khanh, District 2. Thu Thiem ICA will spend some VND1.2 trillion on this deal.

In line with site clearance, the project to develop four central routes in the new urban area is in the final stage of basic design, but it is unknown if the project will be able to get off the ground in July as planned.

Dung said the city is still calling for investors into Thu Thiem. There are currently ten investors joining in the development of the new urban area, including owners of the projects approved in principle by the municipal government, with Bank for Investment and Development of Vietnam (BIDV) being the most recent.

The city has borrowed over VND10 trillion to prepare infrastructure in Thu Thiem New Urban Area. Despite the preferential lending rate, the urban area has to pay interest of VND3 billion every day.

Harmful emissions attack Nam Long Residential Zone

Some 30 households in Nam Long Residential Zone in HCMC’s District 7 have submitted to the municipal government a joint petition against harmful exhaust fumes from Viguato Agrobiochemical Co., which adversely affect the health of local residents.

On receiving the petition, the HCMC Department of Natural Resources and Environment on Monday launched an inspection trip to the company. However, the company had suspended operation when the inspectors arrived.

Still, the smell of plant protection drugs and the heating fuel oil odor from Viguato were very offensive, said Le Thi Kim Oanh, deputy chief inspector of the city’s environment department.

In the petition, Nam Long residents urged the authorities to stop the illegal act of Viguato Co. and save the living environment of the people there.

According to the government of District 7, Viguato Agrobiochemical Co. located on Nguyen Van Quy Street, Tan Thuan Dong Ward is a joint venture between Vietnam Pesticide Company (VIPESCO) and a Chinese microbial drug producer. The company specializes in producing plant protection drugs applying microbial technology with an annual output of 3,000 tons.

Since 2008, residents of Nam Long Residential Zone have constantly complained about harmful emissions and irritating noise coming from Viguato.

However, the authorities have yet to satisfactorily resolve such a complaint, thus people keep raising their voices against Viguato’s act of polluting the environment, said the authorities of District 7 to the city government on May 3.

Viguato was penalized twice in 2008 and 2010 for discharging wastewater into Ong Chon Canal, causing pollution, said the municipal environment department.

“In the coming time, the department inspectors will make irregular inspection trips to Viguato and strictly handle any violation detected. If the violation is severe, the company will be forced to shut down,” said Oanh.

Huynh Thi Anh Dao, a resident in Nam Long Residential Zone, told the Daily that the pesticide-like smell often emanates at around 9-10 pm every day. She said local residents have endured the air pollution for almost five years, but the authorities have yet to completely settle this situation.

Doosan Vina ships chemical plant to Turkmenistan

Doosan Heavy Industries Vietnam (Doosan Vina) has completed and shipped 140 tons of chemical processing equipment to the Duiker project in Turkmenistan, after five months of fabrication and assembly, the company said on Monday.

The heavy-industry manufacturer’s Chemical Processing Equipment business unit said the shipment has eight pressure burners, including four thermal oxidizer burners and four reaction furnace burners. These highly-engineered pieces of equipment will process the natural gas, extracting the harmful elements and converting the gas into clean burning fuel for power plants and a myriad of other everyday products, said Doosan Vina in a statement.

In addition to this shipment, Doosan Vina is also completing work on the fifth shipment of six pressure vessels to the South Yoloten Gas Field project in Turkmenistan.

Both the Duiker project and the South Yoloten Gas Field project will be shipped from Vietnam to Turkmenistan where the 5th largest gas field on earth annually processes 30 billion cubic meters of natural gas. Once installed, they will work to supply Europe’s needs for gas, according to the statement from the Korean-invested company in Dung Quat Economic Zone in central Vietnam.

Doosan Vina has so far shipped many products world-wide, including boilers for thermo-power plants, heat recovery steam generators, desalination plants, and material handling systems.

VietArc 2012 to showcase green architecture

The green design will continue to be the theme of the Vietnam Architecture 2012 Exhibition (VietArc 2012) which will take place in HCMC next month after the one in Hanoi last month.

The exhibition will be organized by the HCMC Architects Association and Gia Phuc Media Joint Stock Company at the Saigon Exhibition and Convention Center (SECC) in District 7. Around 400 booths of architecture, materials and property will be put up for display at this four-day exhibition starting from June 7.

In addition to activities introducing architecture, VietArc 2012 will include display sections for property projects and for inventions of students as well as sections of U.S. enterprises and the association.

A series of conferences on architecture and technologies will also be held to supply information about projects and materials applied the green design.

Steel inventories falling

Around 250,000 tons of construction steel remains unsold nationwide, dropping 40,000 tons against early April, said the Vietnam Steel Association (VSA).

VSA vice chairman Nguyen Tien Nghi explained steel inventories are significantly falling because manufacturers are producing perfunctorily, with several of them having suspended production due to financial problems.

In addition, sales agents nationwide have begun to boost their reserves for sale in the coming time.

A senior source from Hung Tai Steel Plant in Bac Ninh told the Daily that his factory has halted production for over two months now because of financial distress.

Hung Tai Steel Company is undergoing necessary procedures for restructuring a bank debt of VND50 billion, so that the firm can take out more loans to recover production.

Regarding the Ministry of Finance’s decision to raise the import tax rate on stainless steel from 0% to 10% starting from June 11, Nghi said the local demand for stainless steel is surging but domestic production fails to address this need.

Import tax hike to 10% will definitely cause many troubles for local steel users in the coming time.

Speed bumps for auto-makers

According to the Vietnam Automobile Manufacturers Association (VAMA) sales report last week, just 6,982 cars were sold in April, a 24 per cent drop against March and 46 per cent less than the same period of 2011.

“April’s poor sales figures saw a market sales forecast for 2012 falling to 81,000 car units [down from a targeted 130,000-140,000 car units], tantamount to sales in 2007,” according to VAMA.

Of the 6,982 sold car units, there were just 2,394 cars and 4,588 trucks, sinking 26 and 22 per cent respectively against March. Sales of locally-assembled cars came to 5,504 units, down 24 per cent and imported cars fell to 1,478 units, sagging 23 per cent against March.

Generally, auto sales figures in the first four months of 2012 tumbled 42 per cent against the same period in 2011, with cars dropping 49 per cent and trucks sliding 36 per cent.

“This unpleasing practice forced manufacturers and assemblers to exercise measures to cut production. However, cutting-back personnel is now necessary,” said an auto firm director.

Auto sales agents also face unsold stock.

VAMA attributed plummeting sales to multiple fee impositions on vehicle owners. Accordingly, from September 2011 car ownership fees hiked to 20 per cent in Hanoi and 15 per cent in Ho Chi Minh City from 12-10 per cent previously and government proposed imposition of road maintenance fee and fee on limiting personal vehicle usage on vehicle owners have allegedly frozen car market sales.

VAMA argued the falls would continue unless the government manifested a clear approach towards fees.

Recent surveys by online newspapers showed that 52 per cent of respondents said they would not buy cars due to the proposed fee imposition, while 23 per cent said they would think carefully before making a purchase.

Besides, current high lending rates of 18-20 per cent for car purchases parallel to strict requirements have also hurt sales.

Flat auto sales have also put a dent in state budget revenue. Compared to the same period in 2011, sales in the first four months of 2012 were down 21,331 units. Assuming each car cost VND500 million ($23,800) and the market current sharp fall continued the state coffers would incur losses mounting to VND60,000 billion ($290 million) due a lack of collected taxes from the auto sector this year.

Inspection reveals major failures in government funded projects    

The Government Inspectorate has announced the conclusion of a report into infrastructure bids that revealed widespread maladministration and possible corruption in several major projects funded by government bonds.

The majority of the inspected projects were managed by the Ministry of Planning and Investment. Wrongdoings also included suspect selections of contractors and the advance provision of capital outstripping the pace of project implementation.

Several projects have revealed shortcomings in the bid tendering process. The Ministry of Transport and local governments in some localities mistakenly assigned differently valued construction packages to the same contractors, leaving the contractors over-extended, resulting in stagnant construction of several projects. The project to build Dinh Tien Hoang Square in Ninh Binh was one example.

The project was approved by the provincial government in May 2009 with a total investment of VND450 billion (USD21.56 million). However, three months later, the provincial Department of Culture, Sports and Tourism, the project’s investor, increased the investment to over VND1.5 trillion (USD71.87 million).

The investor assigned the major construction bidding package worth over VND1 trillion (USD47.91 million) to the Xuan Truong Construction Enterprise.

In 2012, the investor advanced over VND747 billion (USD35.79 million) to the company despite the company only completing work valued at just VND145 billion (USD6.94 million) by the end of October 2011.

The provincial Department of Culture, Sports andTourism continued to favour several other contractors.

It selected Dong Duong Construction Appraisal Consultancy Limited Company as a quality appraisal consultant. In 2010, it disbursed VND3.4 billion (USD162,913) to the contractor, compared to a total of  VND2.8 billion (USD134,163) for the work completed during the period.

Huong Giang Limited Company was appointed as construction supervisor, and received funds of VND4.6 billion (USD220,412) in 2010, yet it had only completed work worth VND1.7 billion (USD81,456).

A project to build Trang An tourism area in Ninh Binh was approved in 2004 with an initial capital of nearly VND580 billion (USD27.79 million). Until now the project’s investment has been increased to nearly VND9 trillion (USD431.24 million) after several adjustments.

The Xuan Truong Enterprise was also selected to do irrigation work worth over VND560 billion (USD26.83 million). By the end of 2010, the project’s investor had disbursed nearly VND400 billion (USD19.16 million) to the contractor, compared to VND239 billion (USD11.45 million) for the work completed.

The Xuan Truong Enterprise was also given the transportation tender worth over VND302 billion (USD14.47 million). It received VND185 billion (USD8.86 million) in advance by the end of 2010, but had only completed VND99 billion (USD4.74 billion) of work during the period.

This enterprise was also chosen as contractor of several other projects under the management of the Ministry of Transport.

Phu Tho provincial Department of Transport, the investor in a project to expand a section of National Highway No. 32C running through Viet Tri City, allocated a tender worth VND554 billion (USD26.41 million) to the Xuan Truong Enterprise. Construction started in November 2009, yet only 27.2% of the workload was completed after a two-year construction period.

The same situation was recorded at a project to expand a section of National Highway No. 1 running though Thanh Hoa City. The provincial Department of Transport selected Xuan Truong Enterprise as the contractor for tender 5.1 valued at VND537 billion (USD25.73 million). The construction, however, was carried out at a snail’s pace.

Xuan Truong was also selected as contractor of two other bidding packages belonging to National Highway No. 1A project and National Highway No. 10 project in Ninh Binh Province. The investment of the packages increased by VND800 billion (USD38.33 million) from an initial investment of over VND675 billion (USD32.34 million).

The Government Inspectorate discovered shortcomings in the appointment of contractors, following abuse by local authorities of loop holes in Ministry of Planning and Investment guidelines. This allowed them to appoint contractors without having to go through legitimate tendering processes.

The inspectorate concluded that the Minister of Planning and Investment as well as head of the Department of Auction Management would be held accountable for these issues.

The agency proposed the Prime Minister request ministries and branches that had wrongly appointed contractors to investigate corruption in the appointment of contractor, capital allocation and possible losses to the national budget. All the reports would be sent to the Prime Minister for consideration.

According to the Ministry of Planning and Investment, as of December 31, 2010, five ministries and 43 localities had received approval to appoint contractors in 1,463 packages worth over VND49.599 trillion (USD2.37 billion) under 286 projects. Of the total, 757 packages valued at VND13.016 trillion (USD623.67 million) were completed in 2010.

As many as 491 packages worth over VND24.581 trillion (USD1.17 billion) were contracted in 2010 but construction was delayed to 2011. A total of 215 remaining packages valued at nearly VND8.268 trillion (USD396.16 million) have yet to be contracted.

HCM City petrol stations face safety upgrade    

HCM municipal authorities have requested repairs to all petroleum stations built prior to 2007 in order meet required national standards.
 
Those stores that fail to upgrade their premises could be suspended if they do not complete the repairs within a year.

The authorities requested the minimum distance between the stores and road be five metres with their entrance placed at the furthest point from the road, if located near a bridge then there should be at least 50 metres between the bridge and the store.

Two adjacent stores on the same side of the street must be located at least 50 metres apart. Moreover, the stores must meet national fire safety including minimum distances from petrol pumps to busy locations such as markets and schools, the surrounding walls must be fire-resistant walls.

The local department of industry and trade was ordered to direct the repairs and upgrade to all stations, even military stations that operate within the city in accordance with the regulations.

Luxury homes on the cheap lease amid recession   

Luxury houses and apartments are being leased for much less now that the real estate market is in a slump.

When the real estate market was strong, investors could did not want to sell because of rampant speculation. Now they have been forced to lease their properties at low prices as a way to recover some of their investment until the market recovers. Nobody is sure, however, when such a recovery will take place.  

Currently, rental fees for homes, storage and office space in the 'luxury' market are around VND8-10 million (USD383-479) per month for an area of 300-400 square metres. Some homes with incomplete interior designs are cheaper.

Nguyen Van Duc, a representative of a trading centre in Van Phu urban area, said that although properties there have been the market for more than 6 months, they are failing to attract interest because of the lack of residents.

Houses in other urban areas, such as Van Khe, Van Quan, Mo Lao have been left abandoned.

Business has also been tough, although to a slightly lesser extent, in more populated areas.

Properties in Van Khe are being leased for VND8-15 million (USD383-718) a month, while in Vietnamese European Village in Mo Lao Commune is VND10-16 million (USD479-766) a month. Prices in Van Quan area are higher, at USD1,500-2,000 a month, because they offer better infrastructure and an established community.

To many investors, these prices have been a disappointment, and makes it difficult for them to recover the billions of VND they spent, much of which was borrowed.

Duc said this situation could continue for a long time, since even low rents could only be a short-term solution.