Coal output targeted at 13m tonnes
 
Viet Nam National Coal and Mineral Industries Group (Vinacomin) targets an output of 13 million tonnes of coal in the second quarter, according to General Director Le Minh Chuan.

Despite difficulties in consumption, Chuan said, Vinacomin also expected to consume 13.3 million tonnes in the period.

In order to meet the plans, the group would focus on ensuring labour safety, declining costs, especially in public investment and restructuring some member companies, and speeding up the implementation of key projects.

Previously, Vinacomin pledged to reduce VND986 billion (US$46.95 million) in management costs so as to lower product prices, increase profits and improve business effectiveness. The group in the first quarter churned out nearly 12.7 million tonnes of coal, however, consumption reached only 9.5 million tonnes, of which 2.8 million tonnes were for export, due to decreasing consumption, especially in cement, paper, fertiliser and chemical industries, in the wake of the economic slowdown.

Vinacomin is also seeking Government approval for its proposal to look for long-term financing from foreign creditors to develop new mines and raise capital.

The company targets production of 45.5 million tonnes of coal this year, a million tonnes higher than last year, and has projected earnings of VND96.3 trillion ($4.58 billion).

Chuan said Vinacomin's top priority this year would be hastening the implementation of key mining projects, mobilising capital from various resources, and reducing State-funded capital expenditures.

Shares see-saw before closing up

Stocks fluctuated during yesterday's trades on both of the nation's stock exchanges but managed to close up in the final minutes of trading.

On the HCM City Stock Exchange, the VN-Index added nearly 1 per cent over the prior day's close to end the session at 472.84 points. Over half of 197 advancers closed up by their daily ceiling limit of 5 per cent.

Market value hit VND2 trillion (US$95.2 million), up 47 per cent over Monday's level, as volume surpassed 118 million shares.

The VN30 Index edged up 0.9 per cent to close at 544.13 points, as slowing demand towards the end of the day caused many blue chips to dip into the red, with real estate developer Khang Dien House (KDH) and financial conglomerate Ocean Group (OGC) plunged to their floor prices.

Information appeared yesterday that Southern Bank would ask its shareholders for approval to list the bank's shares on the HCM City Stock Exchange.

On the Ha Noi Stock Exchange, profit-taking caused the HNX-Index to slide by around 0.6 per cent before concluding the session at 79.91. The value of trades jumped 20 per cent to VND1.2 trillion ($57 million) on a volume of 106 million shares.

Habubank (HBB) was the most-active share with over 11 million changing hands. It retreated by 2.8 per cent, ending trades at VND7,000 per share.

"Although trading could be mixed with some correction at technical resistance levels, we maintain a positive view about market trends," Bao Viet Securities Co analyst Nguyen Xuan Binh wrote in a note.

Rumours that this month's inflation rate would be lower than last month's had prompted new hopes that interest rates would further decline, commented Kim Eng Securities Co analysts.

Following the Bank for Investment and Development of Viet Nam, HDBank has reduced lending rates by up to 2 per cent for individual customers.

According to the State Bank of Viet Nam, credit at commercial banks as of last month had declined by 1.96 per cent since the end of last year.

Loans to non-encouraged sectors decreased from 11.02 per cent of overall lending by the end of last year to 10.77 per cent in late February.

New border gate economic zone established in Ha Giang

The Prime Minister has approved the master plan for Thanh Thuy border gate economic zone in Vi Xuyen district, in the northern mountainous province of Ha Giang, by 2030.

A ceremony was held at Thanh Thuy border gate on April 16 to announce the decision.

The zone which covers seven communes, borders Wenshan , Yunnan province, to the north, with a 26 km-long border.

The 28,781 ha economic zone is a combination of such sectors as trade, service, industry and agroforestry. It will act as an international trade gateway and a bridge linking China ’s Yunnan province and north Vietnam as well as ASEAN countries and northeast Asia .

The Government said Thanh Thuy border economic zone will become one of the economic and cultural centres of Ha Giang and will offer a chance for the province to rise out of poverty and integrate into the national and regional economies.

Firm recycles steel slag into construction material

A steel slag recycling plant has recently become operational at the Phu My I Industrial Park in the southern province of Ba Ria – Vung Tau.

Vat Lieu Xanh (Green Material) Co Ltd, the plant operator, said that at the first stage of operation, the plant will process and recycle steel slag into ‘artificial stone’ products, namely Ecoslag.

“The products can replace natural materials used in construction, road building, and wastewater treatment,” the company said.

The Ministry of Natural Resources and Environment has also issued a document confirming that the plant has completed all necessary paperwork and is eligible for operation.

Ba Ria – Vung Tau is currently home to many steel manufacturing plants, which dump around 250,000 tons of steel slag on an annual basis.

Domestic steel consumption up in March
 
Domestic C consumption increased sharply in March with a month-on-month rise of 34 per cent despite the ailing domestic real estate market.

Nguyen Tien Nghi, vice chairman of the Viet Nam Steel Association, told the Cong Thuong (Industry and Trade) newspaper that thanks to increased consumption, steel makers were able to reduce their stockpiled products.

As of the end of last month, stockpiles produced by VSA members were estimated at 288,814 tonnes, much lower than the average figure usually set at around 400,000 tonnes.

This reflected a decrease of 100,000 tonnes or 30 per cent compared with the same period last year.

According to the VSA, during the first quarter of the year, members of the association produced and sold 1.1 million tonnes of steel products. In March alone, steel makers produced around of 467,172 tonnes of construction steel, a rise of 36 per cent in comparison with February.

Upped sales in March were seen as a positive factor which has helped decrease stockpiled steel products. Of this, a volume of 521,000 tonnes was sold last month, an increase of 59 per cent compared with the same period last year. The increase in domestic steel consumption was due to increasing input costs of steel ingot, causing traders to purchase steel in advance of the coming construction season to avoid an increase in prices.

During the first two months of the year, both steel consumption and production had faced many challenges, partially due to the slump in the property market, which in turn led to stagnation in the construction and construction materials industries.

The domestic market consumed just about 233,000 tonnes and 380,000 tonnes of steel in January and February this year, respectively.

During the first two months of the year, the country exported about 334,946 tonnes of steel products including pig iron, construction steel, laminating steel and pipes with a total revenue of nearly $300 million.

The market saw a slight increase in the prices of steel during March after experiencing a consecutive decline in the first two months of the year. At the moment, prices of steel products ranged from VND16.15 million (US$772.7) to VND17.14 million ($820) per tonne in the northern and southern provinces of Viet Nam, respectively.

However, Nghi said that because of the stagnant real estate market and a reduction in public investment under Government Resolution 11, the trend of increasing consumption of steel products might be temporary.

In the past months, due to such difficulties, many steel producers have been forced to minimise production, running at 50 per cent to 60 per cent of capacity. Several newly built steel production plants in Thai Nguyen, Da Nang and Thai Binh have not started operations yet.

Hyundai-Vinashin faces tax burden

Hyundai-Vinashin shipbuilding joint venture is entering rough seas with a looming tax wave to break on its bow.

The Khanh Hoa-based shipbuilder late last month sent a document to Prime Minister Nguyen Tan Dung pleading for a timeline extension for paying a $3.37 million tax bill. A half-completed $42.9 million shipbuilding project, cancelled by Germany’s Twelfth Phoenix Shipping, is responsible for the trouble.

Under the contract, Hyundai-Vinashin would have delivered the 56,000 dead weight tonne vessel on November 30, 2011, but the German company cancelled the contract three months earlier. “The main reason for this cancellation is that the global shipping industry has been badly affected by global financial crisis,” said Lee Young Hoon, general director of Hyundai-Vinashin.

Hoon said the shipbuilder had unsuccessfully attempted to sell the uncompleted vessel to another customer at a low price. “Due to global economic difficulties, seeking a new customer for this project is very difficult,” Hoon said. In November 2011, Hyundai-Vinashin unsuccessfully pleaded for a tax payment extension from the Ministry of Finance.

The shipbuilder has paid $2.96 million out of $3.37 million in import and value-added tax for this project. And it has to pay more $410,000 in tax arrears. In the document sent to the prime minister, Hyundai-Vinashin said it wanted to delay paying remaining $410,000 of taxes.

The company has asked the prime minister to order Khanh Hoa Tax Department to refund $2.96 million that it already paid. Hyundai-Vinashin pointed to Decree 106/2010/ND-CP issued on October 28, 2010 regulating that the prime minister had the right to extend tax payment timelines for enterprises facing special difficulties.

Hyundai-Vinashin, a joint venture between South Korea’s Hyundai Group and Vietnam Shipbuilding Industry Group, was initially a ship-repair factory. However, the company had to shift into the shipbuilding business after polluting the local environment with copper slag used in ship repairs

European FDI tippled to increase

European direct investment to Vietnam is set to rise in style.

Early this month, a delegation of 29 French companies visited Vietnam seeking investment opportunities in infrastructure, healthcare and financial sectors. They include EDF Group, France Telecom, Societe Generale, Total and Michelin.

Frederic Sanchez, chairman of MEDEF International - who led the delegation, said the visit was a sign of French investors’ increasing attention to Vietnam. Till now, French companies have been investing in 348 projects in Vietnam, worth around $3 billion.

Also in March, business delegations from Belgium and Italy visited Vietnam and signed a series of business agreements. The recent visits of European companies show that Vietnam remains a priority for investment, despite the economic crisis in their home countries. According to EuroCham Business Climate Index survey, 55 per cent of European companies operating in Vietnam said the crisis had affected them. However, most stated it was a “slight” effect. On the contrary, 44 per cent said the crisis in Europe did not affect their decision to invest in Vietnam at all.

“I think one of the main reason is the positive environment that they can find in Vietnam as governance and political stability, competitive workforce with a country really open to attract European investment,” said Michele D’Ercole, president of Italian Chamber of Commerce, adding that Vietnam was a perfect gate to enter in the Asian market because Vietnam was part of ASEAN with a large trade free agreement among 11 member countries and also special free trade agreements with China, South Korea and Japan.

Indeed, European companies are considering Vietnam as a base for expanding into Asia and even China. Nokia, the word’s largest mobile phone maker, decided to build a factory in Vietnam for further expanding its business in Asia. Piaggio said its production base in Vietnam would serve the demand not only in Vietnam, but also Asia.

“EuroCham believes that once a Vietnam-EU Free Trade Agreement is in place, European investment in Vietnam will further increase both in quantity and in quality,” EuroCham said.

Debt-ridden firms default, bargain away assets

Many local small- and medium-sized enterprises have fallen into the vicious circle of borrowing loan – clearing debt, with the debts continuously expanding, forcing the debtors to bargain away their assets.

Even worse, many business owners have ended up defaulting on their debts when their liquidation does not even help to clear the liability worth hundreds of billions of dong, in addition to the interest of loans they have borrowed at exorbitant rates.
Debt after debt

DB, a privately-owned a wood processor and exporter based at the Dong Nai-based Bien Hoa 2 Industrial Park, has, over the last few days, been operating without its director, who has defaulted on a massive debt.

“The debt is enlarged day by day, while all of the company’s assets have been sold,” lamented V, the facility’s manager.

The company currently owes salary to around 100 workers, said V.

The manager said that in mid-2011, the company borrowed VND1.6 billion (US$76,800) from an unofficial source to set up two more facilities and buy more machinery at an exorbitant interest rate of 7 percent a month.

“What we didn’t expect is that our operation has since faced order shortages,” said V.

“We had to mortgage two cars just to have money for interest clearance.”

Meanwhile, on the afternoon of April 9, several laborers of the TT garment company in Hoc Mon District blocked the entrance of the facility to prevent the company from transferring machinery, a move thought to be related to debt defaulting.

The workers have yet to receive their last month’s wages, they said.

“The company is beleaguered by debt, and owes laborers VND400 million of payment,” said Bui Thi Tuyet Nhung, chairwoman of the district trade union.

“After the union’s intervention, the company eventually paid the workers. But we have no idea how large its debt is, since the company owner refused to show up.”

On April 13, the last piece of machinery was carried away to be sold, Tuoi Tre observed.

Besides bargaining away machines, many debt-stricken companies have mortgaged their assets to borrow loans at painful rates, said the owner of a garment facility in HCMC.

Some could borrow without collateral, but the interest eventually rose to an amount doubling or tripling the original loan, driving the borrowers to having their houses seized, he added.

For instance, a restaurant in District 1 borrowed VND3.7 billion to maintain operations amid financial difficulties. After clearing VND726 million of interest, the business could no longer afford it.

Finally, they had to suffer a total debt of as much as VND8 billion, more than double the original loan.

“Many businesses are in such a tough situation that no matter how hard they try, they still cannot afford to clear loan interest,” said H.A., a credit officer at a HCMC-based bank.

“A customer of mine has borrowed VND750 billion from seven different banks, and is now struggling to settle the debts,” he said.

Good designs on display

Well designed and awarded domestic products in many fields are on display today at the Exhibition House, 93 Dinh Tien Hoang Street, Ha Noi.

The 2012 Viet Nam Good Design Mark Awards were presented for the first time at a ceremony held jointly by the Ministry of Planning and Investment's Economics and Forecast Magazine and the Global Design Alliance on Sunday.

The 44 award winners were selected from more than 300 outstanding brand names in a variety of fields including fashion, cosmetics, jewellery, garments, consumer goods, handicrafts, home appliances, high-tech products and engineering.

In addition to high quality and good design, the winning products were also chosen for their usefulness and application of scientific and technological advances.

Stock brokerage, business newswire publish April CPI forecast

While Bao Viet Securities Co (BVSC) has forecast Vietnam’s consumer price index (CPI) in April to accelerate to 0.5-0.7 percent, NDHMoney predict the rate to inch up 0.16 percent at most.

Petroleum and health care service price hikes will cause pressure on April CPI in particular and CPI in Q2/2012 in general, BVSC said.

The impact of the petroleum price hike will be reflected mostly in April CPI, while that of health care service price increase may be highlighted in CPI of May and June.

Vietnam will raise the prices of 450 out of 4,000 health care services by 30-40 percent starting April 15, 2012. The price hike in these healthcare services will cause the inflation to be added by 1 percent, according to BVSC’s calculation.

Regarding NDHMoney forecast, based on Leontief-ARIMA models, April CPI increase is at the same or even lower level of March CPI increase, NHDmoney said.

With a 0.16 percent rise, April CPI will rise below 11 percent year on year and will increase less than 2.7 percent from December 2011.

The low demand is considered the main reason for April inflation curb.

Meanwhile, prices of food, foodstuff and many other goods and services have been stable. Besides, slowdown food export has caused high stocks, supporting for domestic food prices in recent months, according to NDHMoney.

Earlier, Ho Chi Minh Securities Corporation (HSC) adjusted its April CPI target to 0.5 percent at most.

The Economic Research & Development Department under Hanoi Institute for Socioeconomic Development also forecast the April CPI would rise around 0.5 percent.

Agricultural expo spotlights safe produce

The first safe agricultural products festival opened in Dong Thap province’s Cao Lanh City on April 15 to help southern farmers find new markets for their products.

At the opening ceremony, Dr Vo Mai, deputy chairwoman of the Vietnam Gardening Association, said the festival highlighted the achievements in agriculture and rural economic development in the region, and demonstrated the close ties among the Government, scientists, businesses and farmers in sustainable agricultural production in the South.

She said the fair is an opportunity for farmers involved in growing fruit and vegetables, fish rearing and animal husbandry in 13 southern provinces and cities to enter into long-term co-operation and investment agreements.

There are about 250 stalls displaying the latest farming technology and equipment, organic and healthy agricultural products and seedlings. There will also be seminars on producing safe agricultural products.

Exporters warned on food quality

Viet Nam has great potential for agricultural exports, and the local exporters have pledged to standardise its cultivation and production processes in order to raise the product quality ahead recent complaints of importers about the substandard quality.

High-quality agricultural cultivation will soon be expanded in response to some importers' warning of hygiene and food safety of Vietnamese products.

Nearly 600 tonnes of honey had been returned to Viet Nam when the US Food and Drug Administration (FDA) found it contaminated by carbenzamin, a kind of fungicide, reported Sai Gon Dau Tu (Investment Sai Gon) newspaper.

Analysts warned over an export reduction in honey to the US, the largest importer of the local product.

Vietnamese honey was banned from the EU due to dissimilarities in the legal framework and safety monitoring.

In addition, local fruit and vegetable exporters have faced EU complaints over Vietnamese goods not satisfying good agricultural products (GAP) standards.

Nguyen Van Tinh, director of Minh Giang Agricultural Product Processing, said Viet Nam had great advantage in tropical fruits, preferred by markets in China, Thailand, the US, Japan, and the EU. However, export volume has declined with these products now mainly exported to Thailand and China.

The European Commission recently told Viet Nam that if there were five more batches of goods found to be substandard, the bloc would consider halting the import of domestic fruit and vegetables altogether.

According to the Ministry of Agriculture and Rural Development, Viet Nam will likely gain modest growth in farm exports this year.

"Although some quarantine regulations are unreasonable, it is essential for local companies to co-operate with beekeepers and researchers in order to produce quality export products," said Nguyen Van Niem, deputy director of the Central Honey Co.

In addition, Vietnamese officials should work with import countries to remove unreasonable requirements set by importers.

Nguyen Nhu Tiep, director of the National Agro Forestry and Fisheries Quality Assurance Department (NAFIQAD), said the department would deal with substandard goods exports by strengthening control and testing.

The Ministry of Agriculture and Rural Development has been talking with importers to reduce irrational regulations on Vietnamese agricultural products. In addition, customs officials only implement clearance procedures for agricultural exports with certificates of quarantine.

Analysts said that for long-term development and sustainability, companies should transfer standardised aquaculture technologies to farmers. At the same time, they had to update and apply international standards to all processes from cultivation to final products.

Agricultural exports achieved record growth last year, up 33.2 per cent compared to the previous year with a total turnover of US$13.7 billion.

Latex exports to China increase

Natural rubber exports through the Mong Cai Border Gate have increased dramatically even though China market demand remained unchanged, resulting in a slump of 200-300 yuan (US$31.6-47.4) per tonne, according to industry sources.

Batches of natural rubber exported to China were mainly priced at 23,300 yuan (US$3681.4) per tonne last week.

Vietnamese rubber exporters are shifting their exports from the border gate at Mong Cai in Viet Nam and Dong Hung in China to the Lao Cai-Hekou border gate.-

Speciality exports thrive during hard times
 
Exporters of traditional specialities have survived and even prospered during the prolonged economic turndown worldwide.

The Minh Hai Ltd Company, for example, which specialises in production and export of traditional food products, has maintained its weekly export plan and contracts, unlike many other companies in Viet Nam.

The company director, Quach Hung Tong, said the company had exported over 800 kinds of made-in-Viet Nam food products.

The company's main exports include sauces, fermented food, girdle cakes, rice noodles and fresh chillies, in addition to several non – traditional new products such as pork – and fish-braising sauces.

"The biggest advantage that speciality exporters have is the stability of the number of customers," Tong said. "This kind of business does not require much capital for investment."

For example, to export a container of frozen shrimp, exporters must spend hundreds of thousands of US dollar to earn a 15 per cent profit.

But Tong's company can make a similar profit, with only a US$10,000 investment.

The Tri Duc Production Trading Service Company is another exporter that has done well in tough economic times.

"Tri Duc is preparing to export four tonnes of jam this month. We are seeking more foreign customers, particularly those from Hong Kong and Taiwan, to sell jams for making cakes," said Hoang Thi Tam Ai, company director.

Ai said she believed her company would have more customers in the future because their products were high quality and affordably priced.

Other speciality export enterprises, however, said there were a number of obstacles in doing business.

Although speciality exporters can easily get contracts, they are required to meet strict import requirements on food quality and safety, thus encountering trade barriers, according to Diep Nam Hai, deputy director of the Cho Lon Investment and Import-Export Company (Cholimex).

Independent market experts also said that many Vietnamese speciality export enterprises ship under contracts signed with foreign retail groups, rather than their own brandname.

Consequently, profits from indirect exports are low because most of the gains belong to foreign retailers.

Tu Minh Thien, deputy head of HCM City's Management Board for the High Technology Agriculture, also stressed the need for Vietnamese exporters of specialities to build brandnames for their products.

He said they should also further invest in production quality, packaging and design, and production capacity to ensure sufficient supplies of products that have high quality and clear origins.

In addition, to maintain market share in overseas markets, speciality exporters have been advised to set up networks to directly distribute their products to foreign supermarkets. They should also increase marketing activities and organise market studies to discover foreign consumers' tastes.

Nation leads in wood chip exports

Viet Nam has become the largest woodchip exporter in the world with a volume of 5.4 million tonnes, up 5 million tonnes against 2001, said the Viet Nam Pulp and Paper Association.

The expansion of pulp production in China is attributed to the remarkable increase in the number of hardwood plantations and woodchip processing plants in Viet Nam.However, woodchip exports are not considered a target of the paper industry because its value is much lower than that of pulp and paper materials.

Costs of imported milk on the rise

Imported milk product businesses have officially implemented new price lists after an announcement on price increases earlier this month, according to milk outlets in HCM City.

Accordingly, five products of the Japanese Meiji brand increased 10-15 per cent, while Korean Angelac and Angel Grow's seven items saw a 15-per-cent rise, from VND190,000 to 220,000 per 400-gram tin box of milk powder.

Liquid milk products imported from New Zealand, Australia and France posted prices at VND49,000-51,000 per litre, up 7-8 per cent.

The market has seen a sharp decline in purchasing power in high-class milk product lines due to budget saving decisions of housewives. Some people shifted to using domestic products that are 15-25 per cent cheaper.

Pepper exports surge despite prices

Viet Nam pepper prices saw a US$100 increase against last week, posting at $6,100-6,150 per tonne of black pepper 500 grams/litre-FAQ (Fair Average Quality) and $6,450-6,500 per tonne of black pepper 550 grams/litre-FAQ.

According to General Department of Customs statistics, by March 15, 2012, Viet Nam exported 20,374 tonnes of pepper worth over $139.6 million, a rise of 21.9 per cent in volume and 73.1 in value over the same period last year. With an annual export volume of 100,000 tonnes over the past several years, Viet Nam is ranked first in the world for producing pepper.-

Northern border to develop economy

Officials of the northern mountain province of Ha Giang yesterday rolled out the master plan for the Thanh Thuy Border Economic Zone through the year 2030, which was approved by the Prime Minister in February.

Bordering China's Yunnan Province, the zone includes seven communes in Vi Xuyen and Phuong Do districts with a total area of over 28,000ha. Under the new master plan, the zone would become an increasingly important trade gateway to China while promoting local socio-economic development.

The plan for the zone would give priority to developing a system of co-ordinated infrastructure system that would enable the zone to develop into an economic, cultural and tourism centre with a population of up to 40,000 people by 2030.

Provincial People's Committee chairman Dam Van Dong said at the ceremony that the province would provide tax incentives to encourage investment in the zone, and vowed simpler administrative procedures that would waiting times for investors by at least a third.

Management of State economic groups needs revision

Vague regulations on state management of State economic groups have caused difficulties not only for the State's supervision over its capital but for economic groups as well, Director of the Central Economic Research and Management Institute Le Xuan Ba said.

To solve this problem, deputy head of the financial corporation department under the Ministry of Finance, Dang Quyet Tien, said it was vital to ensure a way to evaluate the real financial situation and potentially financial risks of State economic groups and corporations.

Monitoring of representatives of State ownership in state economic groups and corporations should be carried out during business management and administration, said Tien. But implementing the rights of representatives of State ownership should not be involved in too many agencies.

Economists also suggested regulations on management of the groups should take into account representatives of State ownership in economic groups or corporations operating through enterprise model (a State capital investment company). The possibility of establishing a specialised State agency as the representative of State economic groups or State-owned corporations should also be considered.

Ba said quarterly and annual reports of State business groups and State-owned companies on their capital investments and earnings should be publicised.

The economic group model was first piloted in 2005. It was not until 2009 that decree N0 101/ND-CP was passed by the Government on trial establishment, organisation, operation, and management of State economic groups was issued. However, the decree has come under criticism for being inadequate and poorly implemented.--

Phu Dinh River Port business sabotaged by illegal ports  

Phu Dinh River Port has little to show that it is the biggest river port in Vietnam, as there is very slow business activity here, most of which has been sabotaged by small privately built ports located along the Cho Dem River.

Located on the confluence of the Can Giuoc River and the Cho Dem River in Ben Luc and Doi Canal, Phu Dinh Port is considered a convenient location to transit commodities transported by boat from Ho Chi Minh City to the Mekong Delta and vice-versa.

Early this month, only a few boats were seen loading goods at Phu Dinh Port. On the other hand, nearly 20 small ports along Tau Hu, Ben Nghe, Doi and Te canals were bustling with activity with boats transporting fruits, rice, flour, rubber and items like hand-painted ceramics from the Mekong delta provinces of Long An, Can Tho, Hau Giang , Vinh Long and Dong Thap.

These small ports with no wharfs and warehouses have been erected by local people living along the river. They offer boat owners cheap rates for loading services and hence being favoured by traders.

Relevant authorities will now co-ordinate with officials in District 8 to conduct inspections along the canals and impose stiff penalties on violators and shut down illegal ports.

These illegal ports are hindering the business of Phu Dinh Port and also causing massive river pollution, as boats throw their left over waste into the river. Big boats are also causing severe land erosion along embankments.

Tran Hoa Lan, director of the port, said the volume of commodities at Phu Dinh Port at present is around 1,000 tonnes a day. He pointed out that the impractical design of the port had prevented big capacity barges from entering. Moreover, roads leading to Phu Dinh Port also need upgrading.

To make the port effective once again, the Phu Dinh Port management board has increased lease period of warehouses or allowed customers to build appropriate warehouses for their products.

Leaders of Phu Dinh Port have asked the authorities to create favourable conditions for the port to function effectively and for inspectors to crack down on illegal private ports.

According to the zone plan, the city also has a river port system in District 4 and 7 besides other areas. Phu Dinh Port is considered a main river transport link connecting various transport routes between HCMC and Cuu Long in the Mekong Delta and to the southeastern provinces.