Auto industry ‘a priority'

The Government should encourage the development of auto manufacturing centres in VietNam to help strengthen the domestic auto industry, according to a seminar held in Chu Lai Open Economic Zone, central Quang Nam Province yesterday.

While Viet Nam has auto manufacturing plants across the country, these factories are scattered, a key weakness in plans for the country to become an auto-producing nation.

A raft of challenges to the domestic auto sector were discussed at the seminar, which attracted hundreds of participants from domestic auto producers and the ministries of industry and trade, planning and investment and transport.

Car sales recovered in March after three months' decline, according to the Viet Nam Automobile Manufacturers Association (VAMA).

Total sales by VAMA members reached 9,513 units in March, an increase of 1,624 units against February and a 1 per cent increase over the same period last year, said VAMA representative Pham Anh Tuan.

In the first quarter of this year, sales reached 27,896 units, a surge of 30 per cent against the same period last year. Of this, sales of commercial vehicles surged 16 per cent, multi-purpose vehicles 34 per cent and sedans 47 per cent.

This recovery in the domestic car market reflects a positive outlook by consumers after a period of price increases, Tuan said. It was also due to a great demand for commercial vehicles.

Total sales of commercial vehicles reached 4,648 units in March, an increase of 1,125 units over February.

Car dealers said that the growth of commercial vehicle sales in March was as usual because transport companies continued to buy after Tet.

Speaking at the event, Le Duong Quang, deputy minister of Industry and Trade, said the auto industry was considered as a priority for development, and as a crucial contributor to the country's industrialisation and modernisation process.

Quang said a development plan for Viet Nam's auto industry to 2020, with a vision to 2030, should be considered as soon as possible, as it would form the basis of the domestic auto industry's development in the near future and compliment the nation's socio-economic development to 2020.

Speaking at the seminar, Pham Van Liem, deputy director of the Institute for Industry Policy and Strategy under the Ministry of Industry and Trade, said the plan should be considered carefully to satisfy the country's integration requirements and meet domestic consumers' demands.

Liem said the auto industry's development orientation should be focused on producing one or two strategic automobile models to supply domestic demand and help develop supporting industries.

He added that development should be based on co-operation among domestic, ASEAN and major global auto producers, and urged a national mechanical auto centre to be set up to help attract investors to the sector.

Liem also suggested that all economic sectors should be encouraged to invest in auto support industries, especially for auto engines, parts and accessories.

Co-operation and transfer of advanced technologies with multinational companies should be also encouraged, he added.

According to the General Statistics Office, the country had 397 automobile makers by the end of 2009. Those manufacturers have a total assembly capacity of 418,000 units per year with 215,000 trucks and 157,000 nine-seater cars per year.

The industrial production value of the auto industry was VND19.956 trillion (US$964 million) in 2009, accounting for 2.86 per cent of the nation's total production value, according to the office.

In its first outing, the seminar was organised by the Ministry of Industry and Trade, Quang Nam's People's Committee and Truong Hai Auto Joint Stock Company.—

German Bosch opens $43 mln facility in Dong Nai

Germany-based Bosch Group has opened a production facility for push-belts used for Continuously Variable Transmission (CVT) in automobiles in southern Dong Nai Province.

The 30-million euro (US$43.3 million) plant, covering 16 hectares in Long Thanh Industrial Park, is part of the Gasoline Systems division of the German global technology and service provider.

In the first year of operation, the plant, the first Bosch CVT production site in Southeast Asia, will produce 1.6 million push-belts which can be fitted into vehicles ranging from sub-compact cars to sports utility vehicles with diesel, gasoline or hybrid engines.

With some 200 associates, the plant is the first hi-tech CVT push belt production site for Bosch in Southeast Asia, and the second of its kind for Bosch worldwide after Tilburg in the Netherlands. It is projected to increase this investment to a total of some 55 million euros and employ 800 associates by 2015.

“With the majority of our customers for CVT technology located in Asia, we expect our production volume in the new facility to rise to 2.3 million units by 2015 to support the growth of the automobile industry, in particular for the Japanese and Chinese automotive markets,” said Dr. Rolf Bulander, President of the Bosch Group's Gasoline Systems division.

Dollar deposit rates drop as SBV cap takes effect

Many commercial banks have reduced interest rates on US dollar deposits by nearly 50 per cent after the State Bank of Viet Nam's three per cent cap directive took effect on Wednesday, April 13.

The new cap would benefit both depositors and the economy by stabilising the foreign exchange market, experts said.

The Commercial Joint Stock Bank for Foreign Trade of Viet Nam (Vietcombank) and the Viet Nam Export-Import Commercial Joint Stock Bank (Eximbank) cut their US dollar deposit interest rates from 5.5 per cent to 3 per cent for 1 to 60 month term deposits.

At the Sai Gon Thuong Tin Commercial Joint Stock Bank (Sacombank) the interest rate was reduced from 4.8 per cent to 3 per cent on one to 24 month deposits.

Rates of 3 per cent, 2.8 per cent and 2.75 per cent now are being applied respectively on dollar deposits with terms from one to six months, seven to nine months and 10 to 11 months at the Viet Nam Technological and Commercial Joint Stock Bank (Techcombank).

The big gap created between interest rates on dong and dollar deposits (current 3 per cent and 14 per cent) has encouraged many people to shift their deposits from US dollar to dong.

In a move to exert better over the foreign exchange market, the central bank recently submitted a few proposals on controlling the gold and foreign currency markets to Prime Minister Nguyen Tan Dung.

VN hopes to export $15b annually to Latin America

Viet Nam's exports to Latin America were expected to reach US$6 billion in 2015 and about $13 to $15 billion in 2020, according to an export scheme approved by the Ministry of Industry and Trade.

The ministry's plans also target a national export growth rate of 25 to 30 per cent annually, increasing its market share in Latin America from the current 0.18 per cent to 0.4 per cent in 2015 and 1 per cent in the next five years.

With a population of more than 570 million, the Latin American market represented untapped potential for Vietnamese exporters, said deputy head of the ministry's American Market Department Pham Ba Uong.

Great distances, insufficient market information and harsh competition from other Asian businesses has presented huge challenges to Vietnamese companies hoping to break the Latin America market, said Uong.

The ministry's plan urges Vietnamese exporters to diversify products for export and organise more trade and investment promotion activities.

Updating information on consumer demands in Latin America and effectively advertising Vietnamese goods via overseas trade fairs and exhibitions while creating closer links with Vietnamese commercial offices in the region were also necessary, according to the ministry.

Nguyen Hai Tinh, another expert at the department, emphasised the importance of establishing partner relationships that could better facilitate technical transfers between firms and develop distribution channels in each other's countries.

Joining hands in building factories in Viet Nam to re-export goods was also a co-operation possibility, Tinh said.

Viet Nam's exports to Latin America were estimated to top $1.8 billion last year, a year-on-year increase of 40.6 per cent, according the ministry.

The ministry attributed the increase to the continuing recovery of the world economy.

"Better economic conditions are one of the main reasons pushing up Vietnamese export turnover to Latin America. In addition, the prices of many products have increased, which have helped the total export value," Uong said.

Viet Nam's key export items to the region include footwear, garments and textiles, aqua-cultural products, electronics, cement, steel and wooden furniture, with Brazil, Mexico, Cuba, Panama and Chile being the largest markets for Vietnamese exporters.

More international cruises visit Vietnam this month

Vietnam’s coastal cities this month have received many travelers visiting the country on international cruise ships.

An international cruise ship named Diamond Princess with 2,600 tourists aboard just docked in Nha Trang coastal city in the central province of Khanh Hoa this morning.

As scheduled, the ship will leave for Phu My port in Ba Ria – Vung Tau and Tien Giang provinces tomorrow, according to Viet Excursion, the Vietnamese tour operator in charge of receiving the cruise.

Two other cruise ships, Silver Shadow and Le Diamant, also arrived in the northern city of Hai Phong today.

Ocean Princess, another cruise ship, will bring around 800 international tourists to Vietnam on April 22.

Saigontourist, the leading tour operator in Vietnam, will welcome around 2,000 travelers and sailors on the Costa Classica cruise that will arrive in Vietnam on April 26 on an itinerary that will take them to HCMC – Da Nang – Ha Long.

VN, Venezuela sign on oil, gas

Viet Nam and Venezuela have expanded co-operation in oil and gas after signing a raft of agreements in the sector.

The agreements were signed in Caracas, Venezuela, on Wednesday by Chairman of the Viet Nam National Oil and Gas Group (PetroVietnam) Dinh La Thang and Venezuelan Minister for Energy and Petroleum and President of the Venezuelan State Oil Company PDVSA Rafael Ramirez.

The two leaders formalised PDVSA's involvement in expanding the Dung Quat Oil Refinery in Viet Nam by refining 100,000 barrels of oil per day taken from the Junin 2 bloc of Venezuela 's Orinoco Oil Belt, the world's largest oil reserve.

They also assessed the possibility of joint venture Petromacareo to begin tapping the Junin 2 oil field six months ahead of schedule.

Petromacareo is scheduled to tap the Junin 2 field from the third quarter of 2012 with a daily capacity of 50,000 barrels, which is expected to be quadrupled after two years. The two leaders discussed three potential co-operation agreements, including PetroVietnam's assistance to PDVSA in product distribution in Asia.

PetroVietnam is a strategic partner and one of the first companies co-operating with PDVSA in projects to develop the Orinoco Oil Belt, PDVSA says on its website.

Bank backs fishing, acquaculture

Prime Minister Nguyen Tan Dung has approved a World Bank (WB) funded "Coastal Resources for Sustainable Development" project.

The five-year project includes a $100 million loan from the WB and non-refundable aid of US$5 million from the Global Environment Fund (GEF).

The Ministry of Finance in conjunction with the Ministry of Agriculture and Rural Development (MARD) and other relevant agencies has been put in charge of the project's finances.

The PM noted MARD would have to complete a feasibility report to create a basis for negotiating loans, ensuring a schedule and establishing the goals of the project.

The project has been built based on a strategy to develop the fisheries sector by 2020 under Government Decision No 1690/QD-TTg.

The project will invest in mining and aquaculture as well as infrastructure and public services in the form of irrigation, ports and seed production centres. Testing facilities for aquacultural products will also be developed to improve the productivity, quality and competitiveness of the industry. Fishermen and households in marine and coastal areas will be the main beneficiaries of the project, in the provinces of Thanh Hoa, Nghe An, Binh Dinh, Phu Yen, Khanh Hoa, Soc Trang and Ca Mau.

Dung has already approved a "Water Resources Management for Rural Development in the Cuu Long (Mekong) Delta Region" project. The project has a total investment of more than $210 million, including WB ODA of over $160 million. Reciprocal capital will be included in the annual budget of agencies and localities that are participating in the project under State Budget Law regulations.

Tariffs may rise on some imports

The Ministry of Finance has proposed raising taxes on imports it does not want to encourage.

Under Circular No4388/BTC-CST, the items targeted are mainly consumer goods and machinery and equipment mainly for personal use, such as food, clothing, footwear, garments, iron products, steel, fans, washing machines, fax machines, printers, sewing machines, computers, mobile phones and cars.

Finance deputy minister Do Hoang Anh Tuan said the move was aimed at meeting Government targets to curb inflation and stabilise the country's economy.

Tuan said that the finance ministry had scrutinised import tariffs and found it could only impose extra tax on goods whose current charges were lower than the ceiling rates allowed by the World Trade Organisation (WTO).

Therefore, Tuan said, the ministry proposed to increase import tax only on items whose tariffs were more than 4 per cent lower than these ceiling rates.

Central Highlands advised to reduce water requirements

Central Highlands (Tay Nguyen) provinces have been advised to restructure agricultural production, including reducing their coffee growing area, to deal with current and future water shortage problems.

The Tay Nguyen Institute of Agricultural Science and Technology said that in the provinces of Dak Lac, Dak Nong, Lam Dong, Gia Lai and Kon Tum, water levels in reservoirs have dropped sharply due to very hot and dry weather.

The region's 452,000ha of coffee gardens and plantations face a serious shortage of irrigation, and several thousands ha have already withered, it said.

In Dak Lak, of a total coffee cultivation area of 177,000ha, only around 46,000ha could receive adequate irrigation. More than 13,000ha faced a severe water shortage and 3,000ha of coffee plants had withered.

Lam Dong was in the same boat with nearly 90,000ha of coffee suffering from the ongoing drought.

In main coffee growing areas of Lam Ha, Di Linh, Duc Trong and Dak Min, farming households have spent several million dong to buy pumps and dig wells to save crops.

Local authorities have made some efforts to improve irrigation systems. They have sent inspectors to localities affected by drought to help farmers with knowhow and advice; and dredged canals, rivers and ponds to improve irrigation.

It also is encouraging and supporting scientists to find ways to help farmers save their crops.

The institute's specialists have told farmers to reduce their coffee growing area, plant suitable vegetation other than coffee on land where water sources are limited, and develop the trees on suitable land with water source available to increase the yield.

Farmers save water, increase production

The total area where water-saving grids are being used to irrigate farmland in Dong Nai Province doubled in only a year, said the provincial Department of Agriculture and Rural Development.

Currently, the grids irrigate more than 4,000 ha of both industrial and fruit trees in the province, including pepper, mango and durian crops.

Most pepper and mango farmers in Cam My and Xuan Loc Districts have installed water-saving grids to irrigate their crops, according to the Department.

The grids save 50 per cent of water, 80 per cent of labour and 40 per cent of energy compared to traditional watering hoses, according to the provincial Centre of Agricultural Promotion.

In addition, fields irrigated by such economical watering systems have experienced increases from 50 to 300 per cent in productivity.

The system pumps water from wells to elevated containers which stand about 2 metres high.

Water is distributed through grids of rubber pipelines on the ground that reach every tree.

Distribution of water is regulated by different sizes of pipelines and valves, depending on the water needs of different trees.

The irrigation system costs, on average, between VND15 and 20 million (US$700 to 900) for every ha, and can last for five years.

MOF to increase taxes on imported goods

The Ministry of Finance is planning to adjust taxes on some products to discourage their importation in order to curb inflation. 

Eleven groups of products will be taxed an additional 5-10 percent. The taxes currently imposed for these products are more than four percent lower than the World Trade Organisation’s regulated levels for 2011.

Accordingly, import taxes for ink-jet printers will increase from 0 to 5 percent, tobacco tax will rise from 30 percent to 50 percent, and tax on magnetic tape for video recording will go up 15 percent, respectively.

Vinacomin prioritizes to boost coal, mineral sale

The Vietnam Coal and Mineral Industries Group (Vinacomin) will give priorities to boosting the sale of coal and minerals in April and in the second quarter of this year, as the prices are at a high level.

Vinacomin plans to sell 13.3 million tonnes of coal in Q2, out of an output of 13.5 million tonnes, the group’s Deputy General Director Bui Van Khich said at a meeting to review the group’s performance in Q1 and launch the tasks for Q2 in Hanoi on April 15.

In April alone, the group aims to sell 2.45 million tonnes on the domestic market export and 2.15 million tonnes.

Besides, Vinacomin will increase the application of advanced technology and boost investment to raise exploitation capacity and ensure labour safety.

In the first quarter of this year, the group sold only 9.6 million tonnes of coal and produced 12.5 million tonnes of coal.

The Deputy General Director proposed power projects in the central and southern regions use imported coal to save transportation cost, while thermal power plants in the northern region will use domestic coal.

Prominent VN businesses receive awards

A ceremony was held in Hanoi on April 15 to present the Vietnam Fund for Supporting Technological Creations (VIFOTEC) Award and the World Intellectual Property Organisation (WIPO) 2010 Award for scientific and technological creations.

The VIFOTEC award was given to 41 projects involved in mechanics automation, material technology, information technology, electronics, telecoms, bio-technology, environmental-friendly technology, proficient use of natural resources, energy saving, and use of new energy.

The International Intellectual Property Organisation presented its awards to the best enterprise in applying intellectual property system in its production, the best project, the best female scientist, and the best young scientist in the intellectual property field.

Doctor Vu Thi Thuan from Traphaco Joint Stock Company earned the WIPO’s best female author prize.

The Ha Long Viglacera Joint Stock Company, majoring in manufacturing clay bricks and flooring tiles, became the only enterprise to win the WIPO award. The company trademark has been registered in Vietnam and many countries worldwide such as Canada , Russia , Italy , the Republic of Korea and the US.

US private equity firm invests in Vietnam's food company

Kohlberg Kravis Roberts & Co. (KKR), a global private equity firm, based in New York, reported on April 13 that it had agreed to pay US$159 million for a 10 percent stake in the Masan Consumer Corporation, a food company of Vietnam.

According to KKR, this is its first deal in Vietnam, whose fast-growing economy is estimated to have expanded about 6.5 percent last year, and its fourth in Southeast Asia.

The KKR added that Masan Consumer Corporation is Vietnam's biggest maker of fish sauce and a major manufacturer of products like chili sauce and instant noodles.

"The buyout firm does not plan to become involved in the daily operations of Masan Consumer Corporation, but it does have the right to nominate one director to the company’s board," a KKR representative was quoted by New York Times as saying.

The US major daily added that earlier this year, the American private equity firm Mount Kellett invested US$100 million in Masan Resources, another unit of the Masan conglomerate of Vietnam.

THAI changes takeoff time at Tan Son Nhat Airport

Thai Airways International (THAI) has emailed to travel firms and ticketing agents in Vietnam announcing a change to the departure time for its flights from Tan Son Nhat International Airport in the summer schedule that lasts until October.

The airline said that its morning flight TG551 left Tan Son Nhat at 11:15 a.m. on Mondays, Tuesdays, Wednesdays, Thursdays and Saturdays in the summer schedule, nearly an hour later than the departure time in the winter schedule. This means the morning arriving flight TG550 lands an hour later on these days.

The unexpected change due to unavailable slot times during the busy hours at the airport in HCMC has resulted in less connecting times and choices for passengers on the carrier’s flights in the morning to board its flights at Suvarnabhumi Airport in Bangkok to European destinations.

 “THAI tried to request extension of the winter 2010-2011 slot time of TG550/TG551, leaving Saigon at 10:20 a.m. local time to cover the summer months of 2011. Unfortunately, the slot time that we prefer is not available,” said Narinthorn Purnagupta, general manager of THAI in Vietnam.

The carrier said it would help those passengers who are affected by the new departure time and miss the connecting flights to European destinations they wanted. They should contact the airline on May 31 this year at the latest.

THAI is the largest foreign full-serviced airline active in Vietnam in terms of flight frequencies as it operates four daily roundtrip flights between Bangkok and Vietnam, with two to and from each of HCMC and Hanoi.

Purnagupta said the number of THAI’s flights in and out of Vietnam in the summer schedule remained the same as in the winter schedule.