Shares rebound in HCM City

Shares were added value by the end of yesterday's session on the HCM City Stock Exchange, but still fell on the Ha Noi bourse.

On the HCM City Stock Exchange, the VN-Index sank to 429.82 points during the morning's session but bounced back to 430.83 points in the afternoon, extending the rising streak on the southern bourse to four days in a row.

Trading was sombre, however, as just 26.8 million shares, worth more than VND488 billion (US$14.7 million), changed hands, down 32.4 per cent in volume and 49.6 per cent in value from Wednesday's levels.

Blue chips were mixed. While dairy producer Vinamilk (VNM), PetroVietnam Finance (PVF) and property developer Hoang Anh Gia Lai (HAG) sank from 0.7-1.7 per cent, Phu My Fertiliser (DPM), food processor Masan Group (MSN) and Vietinbank (CTG) gained 0.5-2.8 per cent.

The VN30 Index declined 0.31 per cent overall to 514.47 points.

DPM and Eximbank (EIB) were the only two stocks seeing trades in excess of 1 million shares, becoming the most active on the bourse.

On the Ha Noi Stock Exchange, the HNX-Index fell 0.3 per cent to a close of 69.94 points on slightly improved value of nearly VND315.7 billion ($15 million).

The HNX30 Index tracking the top 30 shares by market capitalisation and liquidity also slumped 0.4 per cent to 133.39 points.

Habubank (HBB) continued to be the most active code on trades of nearly 6.5 million shares, closing flat at VND5,200 ($0.25) a share.

Yesterday was the last trading day for HBB. From today, HBB will be merged into Sai Gon-Ha Noi Bank (SHB) with a share swap ratio of one HBB exchanged for 0.75 SHB.

Stock analysts from FPT Securities Co said that when the market lacked support from large-cap shares and stock indices approached their resistance thresholds, the market was likely to decline again.

Foreign investors again finished yesterday as net buyers on the HCM City bourse, picking up shares worth about VND12 billion ($571,500), but they remained net sellers on the Ha Noi exchange, responsible for a net sell of VND10 billion ($488,000) worth of shares.

According to Bao Viet Securities Co's analysis, the global economic slowdown along with economic difficulties in Viet Nam had resulted in shrinking capital flows to the domestic stock market. Currently foreign capital does not play an important role in leading the market.

Thus market fluctuations were being led by speculation and instability, they said.

Market-based price mechanism to be observed

Consumers have been shocked after petrol businesses raised retail petrol prices twice by a total of VND2,000 per litre since August 2012.

Retail petrol prices were adjusted to increase by VND900 per litre on August 1 and by VND1,100 per litre on August 13. Oil prices were also raised by VND500 - 800 per litre.

Although petroleum businesses reason that the rise is due to high import prices, such adjustments within 12 days have raised public concerns about the market-based pricing management mechanism.

Consumers, including production enterprises, complain that the Ministry of Finance did not observe its rule of allowing petrol companies to raise or lower their retail prices once within a 30-day time frame.  However, the August 13 adjustment was made in just 12 days.

They say they fall victim to petroleum businesses’ unhealthy market practice of rapid increase and slight decrease in the prices.

In addition, consumers do not benefit from each adjustment as there is no genuine competition between petroleum companies that increase or lower the prices at the same level no matter how big or small they are.

Economic expert Nguyen Thi Hien says the 10-day time frame is not too short, as other countries in the world even change petroleum prices on a daily basis.  

However, businesses should be allowed to adjust retail prices of their products according to the market law of supply and demand in the future, suggests Hien. Only then, she says, can petroleum companies compete with each other and consumers select petrol stations at a competitive price.

With its biggest share of all the National Petroleum Corporation (Petrolimex) is said to manipulate the domestic petrol market. Previous price proposals have been made by the corporation.

Market competitions will become healthier if all businesses operate on an equal footing, and breaking market monopoly should be hastened by the State.     

In a nutshell, businesses should be authorised to set prices, and the roadmap for operating a competitive petroleum market should be realised soon, or consumers are always put at a disadvantage.

 UK businesses seek opportunities in Vietnam

UK businesses should seek investment opportunities in Vietnam because it is a growing potential market.

Paul Smith, Managing Director of Harvey Nash, a supplier of software and IT services in Vietnam, made this statement at a seminar in London on August 14 held by the Vietnamese embassy and the UK-ASEAN Business Council (UKABC).

Paul Smith said that his company has been operating in Vietnam since 2002 with 30 percent average annual growth. He added that Vietnamese human resources have the essential skills for business development.

However, the chief executive pointed out some challenges for foreign investors, such as cumbersome administrative procedures and inconsistent rules and regulations, which he said need to be overcome soon.

Lizzy Hawkins, head of the Southeast Asia Unit at UK Trade and Investment (UKTI), said the establishment of the UKABC in November 2011 was one of the UKTI strategies to help UK businesses seek opportunities in the ASEAN bloc.

UKTI considers Vietnam a high growth market with investment opportunities in the infrastructure, oil and gas, retail and logistics, seaports, financial and legal services, IT and environment sectors.

The seminar was organized during a UK visit by a delegation from Vietnam, led by Vice Chairman of the Hanoi People’s Committee Nguyen Huy Tuong, aiming to introduce investment opportunities in Hanoi.

Tuong said promoting bilateral trade is one of the key elements in the joint statement on the UK-Vietnam strategic partnership that was signed in September 2010.

The UK currently has 158 projects in Vietnam, including 34 in Hanoi, worth a total of US$67 million.

Tuong said he hopes that UK businesses will invest more in the capital's finance, banking, service, insurance, high tech, education and health care sectors.

New price level increase on horizon

With the recent price hike of petroleum products, plus a rise in cooking gas and electricity last month, a new increase in price level will likely occur soon.

Many local people are expecting this, as the price hike of petroleum products on August 1 resulted in a slight increase in price level, Tien Phong newspaper reported.

Thu Xuan , a resident in Hanoi’s Tay Ho District, told Tien Phong that the retail prices of many kinds of food and vegetables have risen within the first half of August, ranging from 5 to 25 percent.

Only rice saw prices remain stable, she said.

Generally, food prices rose slightly after the August 1 hike of petroleum products, but they will rise more sharply this time, she told Tien Phong.

Retail sellers in Xuan La Market in Tay Ho District said the pork price has surged an average of VND10,000 to VND100,000 a kilogram.

But as there are very few customers who can buy up to 1 kilogram each time, a possible price increase will make them limit their purchase at 300-500 grams or less.

Since the gasoline price increase will cause transport costs to go up, pork will become more expensive, said Bich Nguyet, a pork seller at the market.

"I may see a more unexciting trading atmosphere, and my daily sale volume may drop from two processed pigs to only half a processed pig a day."

The situation in supermarkets like Fivimar and Coopmart have seen purchasing power drop 10-20 percent from last year, though there was no price adjustment after August 1.

Vu Thi Hau, deputy director of Fivimar, said: "Since the beginning of the year we have not received any information about price adjustment from the suppliers, so the prices have remained stable.”

“But the recent spikes in gasoline prices may leave a direct impact on input costs. So, if the suppliers increase prices, we will have to follow, though it will make purchasing power decline."

Do Vinh Phu, chairman of the Hanoi Supermarket Association, said gasoline is a very essential commodity – the main input – for many industries. So, under the combined effects of many factors and the domino effect, a new wave of price increases will come.

Consequently, everyone will cut spending. This contrast with the efforts of the Government in trying to clear unsold inventories and stimulate consumption.

Current inventories of many businesses are rising, so the increase in gasoline prices will negatively affect the economy, which is at risk of deflation.

According to the General Statistics Office of Vietnam, as of July 2012, the industrial inventory index rose over 21 percent over the same period last year, though the total retail sales and services index went up 18.7 percent year on year.

Dr. Nguyen Minh Phong, of the Ha Noi Institute for Social and Economic Development Studies, said: "Every time the gasoline price increases, there will be the emergence of a new cycle of price increases.”

“This time, if there is such a spiral, it would be very dangerous for the economy, because production is increasing very slowly.”

“This will cause an imbalance in the goods supply - demand mechanism, making it increasingly difficult for businesses and people. It will hamper the implementation of measures to rescue the local economy by the government.”

"If high inflation returns again in 2013, the belief in macroeconomic management will decline and the operation of the economy will be extremely difficult,” Dr. Tran Hoang Ngan told newswire Vneconomy.

“Vietnam's consumer price index (CPI) increased slightly in the first five months this year, and started to decrease slightly over the past two months. This can be considered as a good sign, and we should worry that CPI could drop even lower.”

“My analysis shows that the decrease is partly due to external agents, such as the continuous drop in oil prices and the prices of other goods. But they may increase again at any time when world prices rise.”

“Currently, the resilience of the European economy is still a mystery. If the European economy bounces back, world prices will likely rise again, and at a very high level.”

“But locally, electricity, water , and coal prices have increased and will tend to continue to do so. These factors will support a rise in inflation in the future.

In particular food prices, one of the major groups of goods in the CPI structure, still increased over the same period last year. Foodstuff and catering services rose by 1.95 percent and 11.73 percent year on year.

“My expectation is that they will continue to increase as livestock production does not meet demand. Many local farmers have abandoned their business for losses, due to the exhaustion of purchasing power and the rising cost of farming, let alone high interest rates.”

“Since early last year, we have upheld the objective to control inflation and stabilize the macro-economy, but in August CPI rose more than 23 percent over the same period in 2010.”

“I think it's a memorable lesson that macroeconomic policymakers should have a long-term perspective in their job. If high inflation returns next year, it will become harder to curb it than in 2011-2012.”

Experts say market supervising committee needed

With many state-run giants operating in the fuel, gas, and power sectors repeatedly announcing price hikes with unconvincing reasons on their products, economic experts have urged that an independent market supervising committee be set up to curb the phenomenon.

Nowadays local consumers worry that any time open a newspaper, there is large likelihood that they will see a price hike announcement from one of the said utility companies.

Petroleum retailing prices have seen three straight price increases in less than a month, while cooking gas prices have also risen by 15 percent over the last month.

The wholesalers repeatedly lament of losses due to soaring global prices whenever they want to hike prices, an excuse which consumers can hardly believe and sympathize with, as the former usually refuses to cut prices, or only offer just a small drop, when world prices slump.

“The power, fuel, and gas markets have yet to operate in accordance with an adequate market mechanism,” stated Dr. Pham Dinh Cung, deputy head of the Central Institute for Economic Management, in a recent talk with Tuoi Tre.

Blaming the problem on government management, Cung said the case of Petrolimex, the country’s largest fuel wholesaler, is a typical example.

The wholesaler holds nearly 60 percent of the market share, yet some officials have said it is not a fuel monopoly, said Cung.

“Even so, such a large market share puts Petrolimex in a dominant position, which helps it become the decision-maker for fuel prices of the whole market,” he elaborated.

Local wholesalers always seek the government’s help whenever they face operational difficulty, and raising prices seem to be the only thing they can do to escape from tough spots.

“It’s not a real competitive market. Businesses are supposed to review their operations, try to cut expenses to avoid losses, and sometimes have to try not to increase prices to keep consumers. Such a scheme does not exist in Vietnam,” concluded Doanh.

Sharing his view, Professor and Doctor Nguyen Van Nam said the price management system in Vietnam is a paradox, as administrative agencies will approve price adjustments based on proposals from the wholesalers.

“But the proposals are always made in a way that wholesalers will not incur losses, while a business has to be responsible for its losses rather than calling for the government’s assistance,” said Nam, who is an expert on the Law on competition.

Prices are currently under the management of many agencies, such as the Price Management Agency under the Ministry of Finance, and the Domestic Market Agency under the Ministry of Industry and Trade, but Cung, the expert from the Central Institute for Economic Management, said the system is still problematic.

“It doesn’t sound right for the Price Management Agency to determine prices when it has no idea about the businesses’ operations,” he said.

Meanwhile, the Ministry of Industry and Trade, as well as other ministries, is a three-in-one utility, or an institution which conducts three functions simultaneously.

“The ministry is the owner of the state-run enterprise, a market supervisor, and a lawmaker for the market management -- three functions that may collide with each other.

“So it’s essential that an independent committee be established to supervise the market,” he urged.

“The committee should be under the management of the National Assembly, and be granted the right to release policies that determine prices in accordance with real market forces.”

Nam, the competition law expert, added that the committee should not be set up to continue protecting the rights and interests of state-run enterprises via price increases.

“Instead, it should listen to consumers and solve their needs,” he asserted.

Bianfishco’s debt settlement stagnation reported to PM

The authorities of the Mekong Delta city of Can Tho have sent a report on the stagnation in the debt settlement between Binh An Seafood Co (Bianfishco) and its creditors to the Prime Minister.

In the report, the city government has also mentioned that dozens of local farmers to whom Bianfishco owes hundreds billions of dong are pitching camps in front of the villa of the firm’s acting general director, Tran Van Tri, to create a real pressure for debt repayments.

The incident has formed a hot spot in social order and security that local government find it hard to maintain, said the report of Can Tho City People's Committee.

A task force set up by the city government is working on the firm’s debt situation so that it can feed the municipal Department of Planning and Investment with helpful information.

The information will be used to map out a final solution as fast as possible to tackle the mortgage and transfer of 25 million shares of the former general director, Pham Thi Dieu Hien, to many creditors, mostly banks.

Regarding the mortgage and transfer 25 million shares, Vu Hoang Nam, director of Asia Commercial Joint Stock Bank (ACB) branch in Can Tho, has sent a document to the planning-investment department to prevent the licensing of a new certificate of business registration for Bianfishco.

The new license, which will empower Saigon - Hanoi Commercial Joint Stock Bank (SHB) as the biggest shareholder of Bianfishco, will have no legal value without the acceptance of the ACB, Nam told Tuoi Tre.

According to the ACB document, Dieu Hien and Van Tri mortgaged 8 million shares owned by Hien to ensure debt repayment obligations at ACB on June 3, 2009.

The credit contract was then registered to a state agency specializing in monitoring such deals on July 17, 2009.

The mortgage was also been passed by a group of shareholders who signed in another document to empower ACB to freely use the shares in any purpose flowing the bank’s wish to recover the loan.

Earlier, the firm said the stagnancy in issuing the new business registration awas caused by deadlock in debt settlement between the firm and three banks relating to the 25 million shares Dieu Hien had mortgaged to two banks for loans.

The meeting between three parties, Bianfishco, SHB and Vietnam Development Bank (VDB), early this month ended without reaching any deals as the 25 million remaining Bianfishco shares had been mortgaged to a branch of the Bank for Investment and Development of Vietnam (BIDV) for loans before being brought to the Can Tho branch of VDB as the mortgage for another loan.

The shares had finally been sold to Ho May Co.

After issuing bank documents to prevent the transfer of Bianfishco’s shares, Tran Van Tri had proposed relevant agencies to support and help the firm overcome difficulties, escpailly in offering the new business registration.

A leader of the Can Tho City branch of the State Bank of Vietnam said the branch did not receive any report on the problem because the incident is out of its management functions.

However, the official said there are two possibilities occurring: the firm had issued shares with no real value at all for the banks to get the loans and then the banks had yet done necessary procedures in checking the newly issued shares.

"As banks’ inspecting processes are now very methodical and rigorous, it is unlikely that they left their job unfinished,” he said.

Dozens of farmers, mistrusting Tri’s promise to repay the debt within August, have continued to cling at their campsite, the area in front of the villa of Tri, for the second week in a row.

The farmers have their meals right at the site. Photo courtesy of Vnexpress.

Some have even threatened to commit suicide right at the site if receiving no timely debt repayments.

The 57-year-old Sau Hon told newswire Vnexpress that the firm owed him some VND21 billion, while his debt to his neighbors from whom he buy catfish for the company in the countryside was around VND20 billion.

“If the firm refuses to pay the debt, my family will commit suicide right here buy drinking this pesticide bottle,” he said.

More than a month ago, Tran Van Tri, acting general director of Bianfishco, sent notice to the farmers that the repayment will be due by July 10, 2012.

But Tri on Sunday delayed the repayment deadline to the end of August, pledging that the firm’s fish processing plant will be handed over to the farmers if it misses the payment deadline on August 29, 2012.

Japan helps upgrade Vietnam’s workforce

A cooperative agreement to develop human resources was signed between Vietnam’s Ministry of Industry and Trade and the Japanese Group Mitsui Asia Pacific in Hanoi on August 15.

Under the agreement, Mitsui will help Vietnam train officials for industry and trade to meet the sector’s demand during international integration.

Speaking at the signing ceremony, Vietnam’s Minister of Industry and Trade Vu Huy Hoang highlighted the significant contributions by the Japanese corporation in promoting economic development in Vietnam as well as in strengthening multifaceted cooperation between the two countries.

The improvement of Vietnam’s human resources for industry and trade is one of priorities set for the sector’s development during the 2011-2020 period, said Hoang.

He added that the support from Japan will enhance the management skills of officials, which is important for Vietnam during international integration.

According to the group’s Director Takashi Yamauchi, the group has held several training courses for staff at Vietnam’s Ministry of Planning and Investment and it will continue with similar training programs in Vietnam in the future.

Yamauchi also said he hoped that the cooperation will help promote stronger relations between both countries.

Hue brewery dispels China transfer rumor

Hue Brewery Ltd, the manufacturer of Huda beer, is not set to be transferred to a Chinese partner, CEO Nguyen Mau Chi said on Tuesday, in dispelling the rumored cooperation that has recently driven its consumers away.

Consumers in the central province of Quang Tri have turned their back on Huda beer over the last month after rumors that the beverage was contaminated with toxics after being transferred to a Chinese partner spread, Chi told reporters.

“It’s a false rumor, which was created by our rivals to compete for market share,” the CEO said.

In October 2011, Hue Brewery Ltd had a 50 percent stake sold to Denmark-based Carlsberg Group.

Earlier Henrik Juel Andersen, CEO of Carlsberg Indochina, confirmed during an interview on national channel VTV1 that the Danish group will not sell its Huda brand to any companies.

The rumor, however, did cause damage to Hue Brewery as it suffered a 30 percent drop in Huda beer consumption in Quang Tri, according to Pham Quang Tuan, its chief manager in the province.

Taxi fares rise along with fuel price

Most taxi companies in Ho Chi Minh City on Tuesday announced fare increases, just one day after the gasoline retail price was hiked by VND1,100 a liter.

Vinasun upped fare rates by VND500 per km for all of its cabs, while Mai Linh applied a fare hike of VND800 – 1,000 per km, depending on cab types. The new fares are applicable starting Thursday.

The companies said that as fuel prices have increased three times since July 20, rising a total of VND2,400 a liter, or 11.6 percent, they had to adjust fares to cover expenses.

A Mai Linh representative said the price management mechanism on fuel prices in Vietnam has a huge impact on transportation businesses.

It costs Mai Linh some VND3 billion (US$144,000) to verify and adjust the taximeters for the whole system, the company said.

“So Mai Linh would only adjust fares when fuel prices have fluctuated by more than 10 percent,” it added.

Meanwhile, many transportation firms have also begun to apply new fares with an increase of 5 to 8 percent.

SHB sets up subsidiary in Laos

Saigon Hanoi Bank (SHB) officially opened its first branch in Champasak province, Laos, on August 15.    

With an initial chartered capital of US$13 million, the subsidiary will fully operate as a commercial bank in Laos, offering a number of services.

SHB General Director Nguyen Van Le said that the bank plans to establish a wholly Vietnamese-invested bank in the neighbouring country’s capital, Vientiane, next year.

Earlier this year, SHB established its first branch in Phnom Penh, Cambodia.

By June 2012, Vietnamese businesses had invested in 435 projects in Laos, with a total investment of US$5.2 billion. They are expected to increase their total investment amount to US$7 billion in 2015.

Two-way trade between Vietnam and Laos is predicted to reach US$1 billion by the end of this year. Vietnam is currently Laos’ second largest investor.

Energy-saving expo opens in HCM City

An international expo on energy-saving and green energy technologies and products, Enertec Expo 2012, opened at the Tan Binh Exhibition & Convention Centre (TBECC) in HCM City on August 15.    

The event, part of the National Target Program on Energy Efficiency, attracted nearly 100 enterprises filling 120 booths to showcase their energy-efficient and environmentally-friendly products.

It is also a welcome opportunity for domestic companies to market their high-tech products, expand their markets and seek new business partners.

During the four-day exhibition there will be seminars discussing the 2011-2020 National Electricity Development Plan, state management of energy labeling, and solutions to save energy.

There will also be other activities such as a bicycle ride and a painting contest to raise public awareness of saving energy.

Hanoi to host Vietnam Mobile 2012

The International Conference and Exhibition Mobile Vietnam 2012 will be held in Hanoi from October 18-21, creating a forum for Vietnamese and foreign IT companies and service providers.    

The event, to be hosted by the Ministry of Information and Communications, offers a good opportunity for enterprises to showcase their products and services to consumers and telecommunication professionals, expand markets and promote their brands.

The exhibition is also an occasion for businesses to conduct consumer market surveys and offer customer care services to strengthen links between businesses and consumers, while also developing new strategic relationships, especially with government agencies and investors.

Mobile Vietnam 2012 is expected to draw key Vietnamese mobile operators and hundreds of leading manufacturers of mobile handsets, mobile products and services, mobile applications and technologies.

State management agencies and experts will also discuss administrative policies and orientations for the further development of Vietnam’s mobile phone industry.

Vietnam is one of the world’s fast-developing mobile markets with the sales volume of smart phones estimated to reach 2.7 million by the end of this year.

 Viettel wins Peru mobile phone contract

The Viettel Peru SAC, a subsidiary of Vietnam’s military-run telecommunication group Viettel, won a mobile phone service contract in Peru on August 14, according to the Private Investment Promotion Agency ProInversion.    

The company plans to provide the services to at least 15,000 subscribers in its first year of operation, and 357,000 after 5 years.

Viettel will invest over US$300 million in installing signal reception and transmission stations, fiber optic cables, and other equipment required to achieve the target.

The telco was awarded the 20-year contract largely due to their commitment to providing free Internet services to 718 schools in Peru within the first 10 years.

Viettel also committed to providing mobile services to 48 districts in Peru’s rural areas.
In 2011, Viettel was granted a license to provide telecom services on the frequency range of 1,900 MHz in Peru, making the South American country Viettel’s fifth successful foreign tender, following the delivery of services to Cambodia, Laos, Haiti and Mozambique.

 JICA helps Danang improve infrastructure

The Japan International Cooperation Agency (JICA) will help Danang improve the city's Lien Chieu water supply plant and Tien Sa port's second phase with the total capital of US$86 million from the Asian Development Bank.   

As scheduled, groups of Japanese investors will come to study the feasibility of these Public-Private-Partnership (PPP) projects next year.

JICA will also provide funding to relocate the city's railway station and rebuild Lien Chieu Port in the next few years.

Tien Sa port only allows access to 30,000 DWT (deadweight tonnage) ships, while 50,000 DWT container ships can dock at Lien Chieu.

 Seafood exports to hit US$6.7 billion this year

Earnings from seafood exports in the last five months of this year will likely reach US$3.1-3.3 billion, raising the total export turnover for the whole year to US$6.5-6.7 billion.    

The General Department of Fisheries says total seafood output in the past 7 months is estimated at more than 3 million tones, an increase of 5.4 percent against the same period last year.

Ocean tuna fishing output remained high with Binh Dinh province catching 5,635 tonnes; Phu Yen, 6,000 tonnes and Khanh Hoa, 1,000 tonnes.

The US is a leading importer of Vietnamese seafood products, accounting for 19.5 percent of total market shares, followed by Japan (17.6 percent) and the Republic of Korea (8.3 percent).

However, the Ministry of Industry and Trade warns that seafood exports will face strict requirements in terms of food hygiene and safety, such as Japan’s regulations on preservative substances, such as ethoxyquin, trifluranlin and antobio.

IT boss pushes Viet Nam

Paul Smith, executive chairman for London-based IT services firm, Harvey Nash Outsourcing, has told UK businesses looking to expand into Asia to take advantage of growing commerical opportunities in Viet Nam.

Smith offered his recommendation at a Viet Nam-UK Trade and Investment Opportunities conference, organised by the Vietnamese Embassy for Great Britain and Northern Ireland and the UK-ASEAN in London on Tuesday.

The meeting was held as a Ha Noi delegation, led by the Vice Chairman of the Municipal People's Committee Nguyen Huy Tuong, visited the UK to promote the capital city's investment potential.

Nearly 70 representatives from UK businesses and trade organisations attended the reception.

Tuong said that the conference was just one activity realised under a strategic partnership agreement signed in September 2010 to elevate the two countries' bilateral relationship to a higher level.

According to Tuong, 158 foreign direct investment (FDI) projects have been recorded from British businesses in Viet Nam. However, only 34 projects totalling US$68 million have been invested in Ha Noi.

Hoping to attract further FDI into the capital, the vice chairman said Ha Noi possessed favourable conditions for UK firms looking to invest in areas such as banking and financial services, insurance, technology, education and health care.

Head of the Southeast Asia Team for UK Trade and Investment (UKTI) Lizzy Hawkins told the conference that the UK-ASEAN Business Council (UKABC) was established in November 2011 to increase the UK's level of trade with ASEAN countries, and that UKTI considered Viet Nam the "third pillar" of growth markets in Asia, alongside China and India.

He said Harvey Nash Outsourcing had been doing business in Viet Nam for 12 years and its offices now generate 30 per cent of the company's total revenue, as well as 30 per cent year-on-year growth, adding that revenue in 2011 was US$836 million and profitable.

Smith also enthused about the country's entrepreneurial spirit, drive and the energy of his Vietnamese colleagues, describing them as hardworking, loyal, trustworthy, honest and highly skilled.

However, he did not forget to mention the challenges encountered when doing business in Viet Nam but said it had been well worth the effort.

Viet Nam grows enough sugar for domestic needs

For the first time in many years, Viet Nam has produced sufficient sugar for domestic demand, said Doan Xuan Hoa, deputy head of Agro-forestry Processing and Salt Industry Department under the Ministry of Agriculture and Rural Development (MARD).

In addition, Vietnamese sugar producers have exported 200,000 tonnes of sugar so far this year, added Hoa.

Increased coverage, productivity and output for the 2011-2012 crop have resulted in an abundant supply of sugar in the market.

Viet Nam planted 284,000 ha of sugarcane for this year's crop. With productivity of 61.7 tonnes/ ha, the country has so far this year obtained an output of 17.5 million tonnes. As of now, all 39 sugar plants across Viet Nam have processed 14.5 tonnes of sugarcane and produced 1.3 tonnes of sugar.

Sugar producers paid farmers VND0.95-1 million per tonne of sugarcane.

Director General of Bien Hoa Sugar Company Nguyen Van Loc warned that if sugar continues to be imported illegally, sugar producers will have to adjust their sugarcane buying price to minimise their loss risks. However, if doing so, producers will face a dilemma: if they lower their buying price too much, farmers might switch to other, more profitable crops and leave producers scrambling to find new sources for raw sugarcane.

MARD forecasted that in the 2012-2013 crop, Viet Nam will plant 300,000 ha of sugarcane with an estimated output of 18.9 million tonnes. As a result, Viet Nam will be able to produce nearly 1.6 million tonnes of sugar. Domestic demand is estimated at about 1.4 million tonnes of sugar, so there will be a surplus of 200,000 tonnes of sugar.

MARD Deputy Minister Diep Kinh Tan said that next year the sugar business would be very competitive as a result of the global economic crisis. He also reminded the Ministry of Industry and Trade of the wide gap in selling prices between sugar plants and sugar traders.

Dung Quat refinery to re-open

The Binh Son Petro-chemical Refinery Co Ltd, which operates Dung Quat, expects that the factory will resume operations late next week after it finishes addressing a technical error.

Binh Son and the Technip Consortium halted production on August 8 to deal with a technical error in the RFCC (residue fluid catalytic cracking) workshop, one of the most important technological workshops at the refinery.

The consortium includes French Technip, Malaysian Technip, Japanese JGC and Spanish Tecnicas Reunidas.

"By operating constantly at full capacity for over one month (from July 8 to August 8), the Technip consortium proved that it had thoroughly addressed any technical problems and ensured that the refinery held up to all requirements," Nguyen Hoai Giang, director general of Binh Son, told Tien Phong newspaper (the Pioneer) .

This was one of several technical failures that Binh Son has dealt with since it started operating the refinery, and the company has requested the Technip consortium replace this equipment. However, after one month of operating at full capacity, foreign experts discovered a technical failure in the thermal expansion connector at the CO gas discharge pipeline in the RFFC workshop, he said.

"To deal with the problems, the Technip consortium and Binh Son agreed to halt production at the refinery. The Technip consortium will assume responsibility for all repair costs," he added.

Foreign and local experts affirmed that at Dung Quat refinery, just as at other advanced refineries around the world, the complicated network of technological equipment makes technical failures an unfortunate inevitability.

The repair was essential to ensure the refinery would operate safely and effectively in the future, experts said.

ASEAN business learns to maximise

Nearly 100 trade officials and business executives attended a training course on maximising business opportunities by taking part in exhibitions when ASEAN members form a common market, the ASEAN Economic Community, in 2015.

Organised in HCM City on Tuesday by the Viet Nam Trade Promotion Agency and the Thailand Convention and Exhibition Bureau (TCEB), the training sought to boost Vietnamese firms' confidence in exhibiting their products at trade shows abroad, according to Supawan Teerarat of TCEB.

It was also aimed at strengthening trade between Viet Nam and Thailand, enhancing awareness of business opportunities in Thailand, and opening the door to the ASEAN market through Thailand's exhibition platform, she added.

It was held as part of a MICE (meeting, incentives, conventions, exhibitions) co-operation programme among ASEAN members.

Vietrade took the opportunity to highlight the Government's policies to support Vietnamese business associations and enterprises with promotions to expand their export markets.

But it admitted that Viet Nam's budget for trade promotions is low compared to that of other countries in the region.

Thailand is one of larger investors in Viet Nam with more than US$6 billion.

Viet Nam's exports to Thailand in the first five months of the year were worth $900 million, a year-on-year increase of 45 per cent.

Thai exports to Viet Nam in the period topped $2.6 billion.

‘Provincial unity can clear goods backlog'
 
Fourteen provinces in Song Hong (Red River) Delta and the northern central region need to boost their co-operation to solve high inventories and create a larger market, said deputy minister of Industry and Trade Ho Thi Kim Thoa.

Speaking at a meeting on industrial and trade activities of the provinces last week, Thoa noted the importance of co-operation in designing mechanisms and policies to attract investment, while also making use of their advantages and potential to complement each other.

At last year's meeting, the provinces signed a co-operative agreement to promote industrial and trade activities, however, practical moves have not been as effective as expected.

According to the ministry's Agency for Industrial Promotion, last year the region had a total industrial value of over VND442 trillion (US$21 billion), nearly 21 per cent higher than that in 2010. The region contributed 35.57 per cent of Viet Nam's industrial production value, making it the second biggest region, just behind Cuu Long (Mekong) Delta region.

Total retail and services revenue in the whole region was nearly VND572 trillion ($27.3 billion), 26 per cent higher than that in 2010. In the first seven months of this year, regional retail and services revenue totalled VND390 trillion ($18.5 billion), 23.8 per cent higher than at the same period last year.

Notably, many cities and provinces in the region have seen increases in industrial production much higher than that of the national average of 4.38 per cent, including Bac Ninh with 28.2 per cent, Ha Nam with 13.3 per cent and Nam Dinh with a 14.35 per cent increase.

However, despite the growth in industrial production, and retail and services, several key products such as auto assembling, bricks and wood processing have been on the decline.

Moreover, value added to industrial products remained low and logistics have yet to meet demand.

Also at the meeting, representatives from provincial departments of Industry and Trade voiced their concerns over capital shortage, naming it the biggest difficulty currently facing enterprises.

The head of Bac Ninh Province's department of Industry and Trade, Vu Duc Quyet, said that enterprises had faced difficulties in accessing loans in the past and that high interest loans had contributed to increasing prices, resulting in high inventories.

His counterpart in Nam Dinh Province, Tran Le Doai, said that one-tenth of 4,000 enterprises in the province had claimed bankruptcy and stopped operations since the beginning of this year.

As most of them were small and mid-sized companies with diminutive equity, they could not afford the high interest, he said, adding that these enterprises were short of the capital required to continue production.

To help solve the shortage, Thai Binh Province paid half of the interest for enterprises in trade villages while the provinces of Thanh Hoa, Hai Duong and Bac Giang conceived a model to connect farmers, producers and distributors.

However, deputy minister Thoa criticised the isolatory feel and lack of scope of these efforts, urging more comprehensive and collaborative undertakings at regional level.

She also said that the ministry would continue to conduct trade promotional campaigns in Europe and Japan to help expand the market, as well as urging the provinces to implement policies that raise added value and reduce the production of high-energy goods that consume too many resources.

Prices for transport, consumer goods up

Taxi and bus operators in HCM City increased fares and the prices of many consumer goods rose soon after fuel companies hiked petrol prices by VND1,100 per litre on Monday.

A92, the most popular variety of petrol, now costs VND23,000.

Ta Long Hy, chairman of the HCM City Taxi Association, said the increase in petrol prices had forced taxi companies to raise fares by around VND500 per kilometre.

Ho Huy, the director of Mai Linh Taxi Company, one of the city's two largest, said his company too was considering a VND500-1,000 hike.

Any increase – or decrease – in fares goes beyond just the fuel price change; it also involves massive expenditure for getting authorities' approval and changing the meter in each taxi. Vietnamnet quoted Vinasun, the other big operator, as claiming it costs VND260,000 to change the meter in each of its 4,500 vehicles.

Members of the city Transportation Association also want to increase fares, saying after the two latest hikes, petrol prices have gone up by VND1,900 per litre. He was referring to a VND800 hike less than a fortnight earlier.

Truong Minh The, a driver for the Transportation Co-operative No 14, said his company had a contract to carry students to school at VND230,000 (US$11) per month each.

The rate had been maintained for a long time, but now it has to be hiked to VND250,000 ($12), he said.

Diep Anh Tuan, director of the Loc Phu Trade and Service Company Ltd, which offers cargo services, said his compay has not decided about any increase in tariffs.

"We are still waiting for other companies in the market and our partners.

"However, we will ensure that the increase is less than the hike in petrol prices. We estimate it will be 5 per cent."

Prices in most retail markets around the city have also shown signs of rising.

A retailer in Binh Dien Market in District 8 said the prices of some vegetables and fish had increased by more than 10 per cent. Pork prices have shot up by up to 40 per cent.

In Hoc Mon District, a pork seller at a wholesale market said, pork prices have been up by 10 per cent in the last few days.

He blamed it on the hike in petrol prices.

Economist Le Dang Doanh, urged the Government to reduce import tax on fuel to share the burden with the people because the rising costs would directly affect the prices of many products.

Policy makers also need to carefully consider the timing of petrol price hikes because if they increase prices during a recession, consumers would further reduce consumption, causing even higher inventories and slowing production, he added.

Oil companies blamed the price increase on the interruption of production at Dung Quat, the country's sole oil refinery, due to a technical problem and an increase in global oil prices in the last 10 days.