Mortgage loan for social housing touches 6%

The State Bank of Viet Nam and the Ministry of Construction on May 15 issued Circular 11 announcing an annual interest rate of 6% for loans used to purchase social houses.

Under Circular 11, which guilds the implementation of Government Resolution 02 on solutions to remove difficulties against production and business, support the market and deal with non-performing loans, social house buyers’ financing will have a maturity of ten years.

The central bank will use VND 30,000 billion (US$1.5 billion) to support the five commercial banks which were selected to undertake the loans in 36 months since Circular 11 takes effect on June 1, 2013.

The Circular stipulates that the State Bank of Viet Nam will yearly define and publish preferential lending interest rate for the upcoming years in December, which is required to be equal to half of the average lending interest rate in the market but less than 6% per year.

The move aims to support those who want to buy and hire social houses with an area of under 70 square meters and at a cost of less than VND15 million per square meter.

The five eligible commercial banks include the Viet Nam Bank for Agriculture and Rural Development (Agribank); the Stock Commercial Bank for Investment and Development of Viet Nam (BIDV); the Viet Nam Joint Stock Commercial Bank for Industry and Trade (Viettinbank), the Joint stock commercial Bank for Foreign Trade of Viet Nam (Vietcombank) and the Mekong Housing Bank.

The same day, the Ministry of Construction also released Circular 07 specifying those who are eligible for borrowing loans for social housing./.

VDB mobilises 4.45 trillion VND from guaranteed bonds

The Vietnam Development Bank (VDB) mobilised 4.45 trillion VND from its Government-guaranteed bonds at a tender organised by the Hanoi Stock Exchange (HNX) on May 15.

VDB put out its Government-guaranteed bonds totalling 5 trillion VND at the tender.

The mobilised money included 2.5 trillion VND in two-year bonds with an annual interest rate of 8.6 percent, 1.45 trillion VND in three-year bonds with an annual interest rate of 8.7 percent, and 500 billion VND in five-year bonds with an annual interest rate of 9.25 percent.

The bank has so far this year mobilised nearly 20 trillion VND from its Government-guaranteed bonds via tenders.-

Ship yards go on with new orders

The Ha Long Shipbuilding Co., Ltd under the Vietnam Shipbuilding Industry Group (Vinashin) on May 15 started work on the building of four tugs for Damen Shipyards Group of Holland.

Each ATD 2412 tug measures 24.74 metres long, 12.63 metres wide and 4.6 metres high with a capacity of 298 tonnes.

The ships will be handed over to Damen Group within 14 months.

The same day, Vinashin’s Nam Trieu Shipbuilding Industry Corporation transferred a 56,200 tonne ship named Vosco Sunrise to Vietnam Ocean Shipping JSC.

This is the largest ever cargo ship Nam Trieu has built for a domestic partner.

The 190m long ship is designed by IHI-MU of Japan and equipped with modern facilities to meet standards of all seaports worldwide.

Later on the day, Vosco Sunrise sailed to Singapore for its maiden voyage.-

Hue plans to build VND 17 billion science-technology centre

The Thua Thien - Hue provincial People's Committee has approved a plan to build a science-technology centre to help the province become one of national science-technology centres.

Total investment for the project is VND17 billion ($83,000), which is sourced from both the State and local budget.

The project includes a Thua Thien – Hue High-tech Park, a Hue Institute of Heritage Conservation, a Han-Nom Research Institute and a Research Institute of Hue’s Culture, as well as a Hue Royal Library, an Institute for Economic Development and a Museum of Centre Coast Nature.

The project aims to help science and technology to create breakthroughs in province’s economy in 2020.

Quoc Oai to become an economic region in the Western Capital

Hanoi City People’s Committee has recently approved the master planning of socio-economic development of Quoc Oai district to 2020 and vision to 2030.

Accordingly, until 2020, Quoc Oai will become a rather developed economic district in the suburb. Until 2030, Quoc Oai is targeted to become an active developed economic region with sustainable developed ecological environment.

The district will make the best effort to realize the speed of its production value of 15%-17% in revenue a year to 2020 and 14% in revenue a year in the 2012 - 2030 period, respectively. Of which, until 2020, the economic structure will be industry- construction (58%), services (35%), agriculture- forestry (7%); and such figures until will be 60%, 37%, and 3%, respectively, until 2030. The income per capita will be some VND52 million and VND196 million person per year in 2020 and 2030, respectively, as targeted.

Until 2020, at least 75% of communes will complete basically the new rural construction; by 2030, 100% of communes will realize new rural criteria.

Regarding social aspects, the district will make its effort to decrease gradually natural population; this figure is targeted as 1.05% in 2020; the rate 1% will be remained in the 2021- 2030 period; rate of malnutrition under-five-year-old children will be under 7%.

Until 2020, the number of national standardized schools in all levels will be 65% - 70%; this figure will be 75% - 80% in 2030. Besides, rate of trained labors in the district will be 50% - 60% in 2020; and 60% - 75% in the 2021 - 2030 period.

The rate of poor households (according to new criteria) will be reduced to 5% in 2020 and 2% in 2030, respectively. The district will be green belt of Hanoi Capital.

Woes hit agriculture insurance

A two-year-old pilot programme for agricultural insurance designed to stabilise the livelihood of farmers has revealed difficulties that have produced losses for the insurance firms.

The pilot programme on agricultural insurance, running from March 2011 to June 30, 2014, has been carried out in 20 provinces and cities according to Decision 315/QD-TTg. This policy aims to stabilise production and income of farm communities and support implementation of social welfare policies. Around 200,000 farming households have joined this programme so far with the total premium of over VND220 billion ($10.5 million).

“In the process of implementation, insurance companies had to bear a big financial burden because the large number of contracts and big damage lead to high compensation for these companies,” said Trinh Thanh Hoan, director of Insurance Supervisory Authority under the Ministry of Finance (MoF).

The insurance firms chosen to pilot the programme by the MoF are Bao Viet Insurance Corporation, Bao Minh Joint Stock Corporation and Viet Nam Reinsurance Corporation. All have shown a big financial loss after two years.

Specifically, in the first four months of this year, Bao Viet Insurance saw premium revenue of only VND13.6 billion ($653,850), much lower than compensation of VND300 billion ($14.4 million). In 2012, the figures were respectively VND172 billion ($8.3 million) and VND62.6 billion ($3 million).

Bao Minh faces the same situation. Its compensation for the first four months of 2013 reached VND69.6 billion ($3.34 million), higher than premium revenue of VND58.9 billion ($2.8 million). In 2012, the figures were VND34.4 billion ($1.65 million) and VND58.7 billion ($2.8 million).

Meanwhile, Vinare reported it suffered a loss of VND300 billion (($14.4 million), with the revenue of VND204 billion (($9.8 million) while the total of compensation commission up to VND534 billion ($25.7 million).

Aquaculture insurance, which is considered “the most difficult kind of agricultural insurance”, according to Deputy Minister of Finance Tran Xuan Ha, is one of the main reasons for big compensation for insurance firms in the past time.

A representative of Bao Minh said there remained many legal loopholes for seafood insurance which made it difficult for insurers in compensation

“Due to specific characteristics of aquaculture which is flat damage in the wide area, it is hard for insurers to check and appraise the damage exactly. Besides, it appeared insurance frauds happened which made the compensation value increase,” said the representative.

In addition, he added, in fact, in the process of implementation programme, the farming households holding insurance policies did not reached the anticipated number which impacted on premium revenue of insurance companies.

Bao Minh report’s also showed that total premium of this firm revenue was only one tenth of the initial expectation.

“In 2012, the business result of agricultural insurance in the pilot programme is really bad. 2013’s plan still see a big proportion for insurance of seafood products,” said a representative of Vinare.

Banking sector focuses on innovation, digitalization

Banks have to speed up the application of modern technology to improve services, or they will lose out to rivals on home turf.

Domestic and international bankers shared the view at the two-day Banking Vietnam 2013 conference which opened in Hanoi on May 15 to discuss increasing trends in the banking sector.

They said fierce competition requires banks to better their services through using modern and convenient technologies, aiming to woo more clients.

Electronic payments and modern banking services such as mobile banking and data archives are no longer new to Vietnamese people, but not all users have benefited from these services.

Digitalising services is considered an effective tool for domestic banks to keep up with international trends, experts said.

On May 15, experts also suggested solutions for resolving bad debts - a thorny problem of the banking sector - and accelerating the restructuring of the sector in order to improve its risk management capacity and modernize its technology.

In another round-table on fueling innovation in banking services, delegates examined ways to transform delivery channels for the financial sector and the rapidly evolving trends in mobile payments, which create both challenges and opportunities for financial institutions.

Banking Vietnam 2013 is jointly organised by the State Bank of Vietnam (SBV) Information Technology Department and the International Data Group (IDG) Vietnam.

Featuring the theme “Leveraging new technological trends to build governance capacity, operational excellence and service innovation”, the conference will touch upon the impact of information and communication technology (ICT) in enhancing competition, growth and performance of the banking sector.

In addition to the conference, Banking Vietnam 2013 also launched an exhibition on non-cash payments and a demonstration of modern banking technology.

Vietnamese banking system has to cope with the highest non-performing loan (NPL) ratio in the region, accounting for 8.82 percent of total loans, according to an SBV report in June 2012.

2013 is considered to be an important milestone for Vietnam’s banking system, when economic experts say the impact of the global economic crisis may bottom out and a new period of economic growth could begin.

FDI high-tech businesses receive a boost

The Vietnamese Government pays attention to developing policies and incentives for FDI businesses, especially those operating in the field of high technology.

Deputy Minister of Science and Technology Tran Viet Thanh made the statement at a workshop in Hanoi on May 15, suggesting solutions to support FDI high-tech businesses.

He said the government encourages domestic and foreign businesses to invest in research and development of technology to produce products of higher value.

High-tech businesses will enjoy preferential fees and best tax incentives under law, he stressed.

Ha Chan Ho, the Republic of Korean (RoK) ambassador to Vietnam, hailed the Vietnamese Government’s policies to boost high-technology investment and research.

He described Vietnam’s certification of FDI high-tech businesses as timely and appropriate.

Delegates were provided with information on mechanisms, policies and procedures for registering high-technology enterprises. They examined the Vietnamese Government’s policies to encourage FDI businesses to develop high technology.

Experiences of high-tech businesses that have been granted certificates to operate in Vietnam, as well as investment opportunities in cities with great potential such as Danang, also received much attention from the delegates.

The event, organized by the Ministry of Science and Technology and the Korean Business Association, attracted managers, researchers and leaders of Korean businesses in Vietnam.

Cooperation between Vietnam and the RoK has been developing well in many fields over the years and the RoK has become one of Vietnam’s leading trade partners.

Nearly 1,500 Korean enterprises have invested in Vietnam to date, many in the field of high technology. Korean firms are first to be granted certificates to operate in high technology in Vietnam.

Savills triumph at Asia Pacific Property Awards

Savills Vietnam has won four impressive accolades at the annual Asia Pacific Property Awards 2013 held recently in Malaysia.

The four awards include the Best Real Estate Agency Vietnam, the Best Property Consultancy Vietnam, the Best Real Estate for Rent Agency Vietnam and the Best Real Estate Website Vietnam.

Neil MacGregor, Managing Director of Savills Vietnam, said this achievement in the current fierce competitive market shows the company’s commitment to retain its top position.

President of the International Property Awards Stuart Shield said the awards testify to the recipients’ profession and capacity in the field.

The Asia Pacific Property Awards is part of the International Property Awards. The award winners’ logo is recognised as the symbol of excellence throughout the global industry.

Japan Group to invest more in Vietnam

Japan’s Lixil Group wants to expand its American Standard sanitary ware factory in the southern province of Binh Duong.

The Group Chairman Toshimasa Iue was speaking during his recent visit to the province to seek investment opportunities in the locality.

Its original factory with initial invested capital of US$16.5 million was put into operation in 1997 and capable of producing 400,000 units of products annually.

In 2011, American Standard decided to double its production capacity and it now plans to raise its productivity to meet the increasing consumer demand.

Chairman of the Binh Duong Provincial People’s Committee Le Thanh Cung praised American Standard’s operational efficiency and pledged to support its expansion and investment strategy in the locality.

Along with American Standard, Lixil also owns the Inax brand in Vietnam.

Last November, the group launched the US$441 million factory producing building materials in Long Duc Industrial Zone in the southern province of Dong Nai.

Lixil now has 11 factories in Vietnam and it has committed to investing more in the country in the next decade.

High-quality Thai goods showcased in Hanoi

More than 100 leading Thai businesses are displaying branded products at a trade fair which opened in Hanoi on May 16.

As many as 126 stands feature favourite Thai products such as food and foodstuffs, beverages, fruits, household utensils, garments, jewellery, electronic appliances, cosmetics, bike and automobile equipment, decorations, and souvenirs.

Busaba Butrat, trade counsellor of the Thai embassy in Hanoi, said the fair not only promotes Thailand’s high-quality products and services to Vietnamese consumers, but also offers a chance for Thai businesses to explore Vietnam’s potential retail market.

She said over the past five years the fair has gained a market niche in Vietnam, winning local consumer trust. As a result, sales from Thai products in Vietnam have increased considerably.

Vietnam and Thailand plan to raise two-way trade by 20 percent by 2015, she said.

The fair lasts through to May 19.

Vietnam-Mexico trade on the rise

Two-way trade between Vietnam and Mexico reached US$199 million in the first quarter of this year, up 1.01 percent compared to the same period last year.

Of the figure, Vietnamese exports earned US$173 million, equal to 2012’s first quarter, and its imports were valued at US$26 million, up 8.33 percent.

Vehicles and spare parts have emerged as one of Vietnam’s five key export items to this market, according to the Vietnam General Department of Customs.

Last year, bilateral trade totalled US$795 million, including US$683 million from Vietnamese exports.

Key export items were footwear, seafood, garments, electronics and coffee, which had corresponding values of US$212 million, US$110 million, US$82 million, US$60 million and US$86 million.

Vietnam mainly imported machinery (worth US$32 million), electronics (US$26 million), and cattle feed (US$4 million) from Mexico.

Bilateral trade ties are expected to grow and flourish in the near future when Mexico joins the Trans-Pacific Partnership Agreement (TPP).

Representatives of the Vietnamese Ministry of Industry and Trade and leading Vietnamese businesses made a fact-finding tour of Mexico in April 2013 to boost trade and industrial cooperation with this North American nation.

Rice exports need to be streamlined

Deputy Minister of Finance Hoang Anh Tuan has asked relevant agencies to speed up a draft decree on rice exports so that suggestions from relevant ministries can be submitted to the Government for approval.

One of the key tenets of this draft decree is to re-organise rice exporting activities, so that market competitiveness can be assured.

To deal with difficulties in rice exports, Tuan urged the Import-Export Department of the Ministry of Industry and Trade and Viet Nam Food Association (VFA) to focus on assessing and analysing market issues, according to the news website Chinhphu.vn.

According to VFA, in April alone, the country's rice exports are estimated to reach 807,000 tonnes, worth approximately US$340 million. In the first four months of this year, rice exports were estimated to have reached 2.38 million tonnes (an increase of 7.6 per cent) with an export turnover of more than $1 billion. Many rice export contracts were signed in the first four months of 2013, but the export value had remained low.

During the first four months, rice exporters were contracted to ship 4,231 million tonnes of rice, an increase of 9.92 per cent over the same period last year, but they failed to deliver on time.

Director of the Import-Export Department Phan Van Chinh said the rice export price fell for most countries due to excess global supply, as Thailand sought to clear its stockpiles of at least 12 million tonnes. In addition, India and Pakistan had bumper crops which helped them to improve on previously poor rice export figures. Myanmar has also entered the export market, adding further to the supply chain and thus lowering rice export prices.

Chinh pointed out that Vietnamese rice export prices had never been higher than Thai rice. Furthermore, Vietnamese rice was less competitive in Africa compared to Pakistan and India, due to higher transport costs.

He added that weaker Vietnamese rice exporters often offered low rice prices for export to quickly return their capital and being hit by high lending rates. Meanwhile, the winter-spring crop this year is expected to harvest between 3.7 million to 3.8 million tonnes of rice.

To handle difficulties for farm produce and seafood products in Cuu Long (Mekong) Delta, the Ministry of Industry and Trade and the Ministry of Agriculture and Rural Development will meet with local authorities to review the difficulties and seek solutions to eradicate them.

Lai Chau hydro power contract signed

A contract for the main work on the Lai Chau hydro-power plant was signed yesterday for VND11.17 trillion (US$532 million). Work will be carried out by the Song Da Corporation.

The plant is on the Da River in Muong Te District in northern Lai Chau Province. Preparatory work to block off the river began in early 2011.

Electricity of Viet Nam is the main investor for the 1,200MW project, worth VND35.7 trillion (US$1.8 billion). It will be the third biggest power plant in Viet Nam, just behind Son La and Hoa Binh plants.

Director of the Son La and Lai Chau hydro-power management board Nguyen Hong Ha said offices plus accommodation for workers had been completed.

Builders have already finished removing 15 million cubic metres of soil and stone for the foundations.

"The first turbine of the plant is expected to be operational early in 2016," he added.

According to Prime Minister Decision 819/QD-TTg, more than 1,330 households in eight of the province's communes and one town will be relocated to new areas.

The plant is expected to provide an average 4,670 million kWh of electricity annually.

Large stocks help steady rice prices

Viet Nam rice traders purchased tonnes grain for reserve for the 2012-13 spring-winter crop.

This meets Government requirement to help stabilise rice prices and assist farmers, said Deputy Minister of Agriculture and Rural Development Vu Van Tam.

The reserve helps generate profits by taking the initiative in selling rice to stop declining prices, said Tam at a seminar held by the Ministry of Agriculture and Rural Development (MARD) yesterday in Ha Noi.

The Ministry reports that agencies and the Viet Nam Food Association have conducted drastic measures to implement the Government's rice policy.

To build up reserves, commercial banks have disbursed VND7.6 trillion (US$362 million), achieving 95 per cent of the targeted plan.

According to the food association, from February 20 until the end of March, domestic rice businesses completed buying 1 million tonnes of rice at an average price of between VND5,200-5,400 per kilo.

Paddy price is sold at between VND5,200-5,400 per kilo in the southern province of Bac Lieu or an increase of between VND150 to VND300 per kilo. In Ca mau Province, paddy price fetched VND5,400-5,420 per kilo, a rise of between VND150 to 170 per kilo.

Tam noted that the difference in buying price is attributed to the different conditions in provinces. Not every province managed a profit of 30 per cent.

Some provinces report that the Government policy was not strong enough to lift the buying price.

Mai Anh Tuyet, director of the Department for Industry and Trade in Mekong Delta's An Giang Province said that although rice businesses had completed their quota to buy rice for reserve, there was a large volume still held by farmers.

An Giang Province authorities have asked agencies for statistics on unsold rice so that it can ask the Government to allow businesses to continue buying.

Lam Anh Tuan, director of Thinh Phat Company Ltd, said most rice businesses faced difficulties in buying rice due to a drop in rice export prices and a huge stockpile of the grain.

He said many businesses asked to purchase rice for reserve but they then refused despite the fact that the selling price was subsidised by the Government.

Many said to avoid this situation, further co-operation was needed between the Viet Nam Food Association and People's Committee in provinces.

In addition, to provide more profit for farmers, rice for exports had to be improved to further enhance prices.

Tam said the Ministry of Agriculture and Rural Development would ask the Government to focus on how to bring more benefit to farmers and create incentives for rice export and rice consumption.

Help to lift competitiveness, education system

The State Bank of Viet Nam and the World Bank in Viet Nam yesterday signed three credit agreements, worth a total of US$400 million, to help Viet Nam with economic management reforms for higher productivity and competitiveness.

The funds will also go to support the implementation of the Higher Education reform agenda, and to raise school readiness for 5-year-old children.

The first Economic Management and Competitiveness Credit for Viet Nam will provide $250 million concessional financing to support reforms in fiscal policy, the financial sector, public administration and accountability, and state enterprise management.

It will also cover public investment management, efficiency of the business environment, and equity and transparency of the business environment.

The funds will also go to support the implementation of the Higher Education reform agenda, and to raise school readiness for 5-year-old children.

The credit package will also help monitor macroeconomic policies that support the stabilisation efforts of the government.

Public Investment Management, SOEs and banking sector reforms are prominent themes in line with the government's priorities for structural reforms.

"I want to congratulate the Government on its stabilisation efforts over the past 18 months," said Victoria Kwakwa, the World Bank's country director for Viet Nam.

"It is necessary to continue these efforts, and at the same time accelerate the pace of implementation of structural reforms in the restructuring of state-owned enterprises, public investment and banking sector."

The second credit worth $50 million supports the implementation of reform policies designed to strengthen governance, financing and quality of higher education.

The goals are to improve research studies and fiscal transparency as well as sustainability and effectiveness of the higher education sector.

The third project, the School Readiness Promotion Project, will raise school readiness for children entering primary education, in particular for those most vulnerable.

It will support elements of Viet Nam's national programme on Universal Early Childhood Education for 5-year-old Children 2010-15 with financing of $100 million.

The project supports efforts to expand full-day pre-school enrollments, improve capacity for preschool quality assurance and strengthen professional expertise of teachers and principals.

"To help prepare Viet Nam for the future, reforms from early childhood education through higher education are important along with building a culture of life-long learning," Axel van Trotsenburg, the World Bank Vice President for East Asia Pacific Region, wrote in a recent article published during his visit to Viet Nam.

New guidance on goods trading by foreign-invested enterprises

On April 22, the Ministry of Industry and Trade issued Circular 08/2013/TT-BCT.

Accordingly, foreign-invested enterprises are only allowed in accordance with Investment Certificate, Business License, Retail Outlet Establishment Permit of such enterprises and relevant regulations.

In particular, foreign-invested enterprises are allowed to carry out goods trading activities such as: Implementation of the rights of export, import, distribution; implementation of goods trading and directly related activities with export processing enterprises; establishment of retail outlets, branch for implementation of the goods trading and directly related activities; the foreign investors' contribution of capital to, and purchase of shares from, Vietnamese enterprises for implementation of the goods trading and directly related activities.

However, to implement such activities, the enterprises must comply with the conditions as specified in this Circular.

In addition, Circular 08 also provides that foreign-invested enterprises engaged in goods trading and directly related activities shall implement periodic and extraordinary reporting regimes in accordance with Vietnamese law and this Circular.

Circular 08 shall take effect on June 7, 2013. and replaces Circular 09/2007/TT-BTM and Circular 05/2008/TT-BCT.

Value of transactions must be reported to the State Bank

On April 18, the Prime Minister issued Decision 20/2013/QD-TTg on high value transactions subject to report ("Decision 20").

Decision 20 provides that financial institutions and organisations/individuals doing business in non-financial sectors shall report to the State Bank of Viet Nam on the transactions valued at VND300 million or more compared to the previously regulated VND 200 million under Decree 74/2005/ND-CP.

The relevant non-financial sectors include gambling and casino business; real estate management, real estate brokers and real estate trading floor business, precious metals and gems business; notary and accounting services, legal services; investment trust, corporate establishment and management service; and director and chief secretary subleasing service.

Decision 20 shall take effect on June 10.-

Manila bans live shrimp imports

The Philippines has banned the import of live shrimp from Viet Nam due to fear of disease, according to the Viet Nam Association of Seafood Exporters and Producers (VASEP).

The country's Bureau of Fisheries and Aquatic Resources fears that Vietnamese shrimp could infect native shrimp with early mortality syndrome (EMS).

The ban applies only to live shrimp, VASEP said, so Philippine importers are still allowed to buy frozen processed shrimp from Viet Nam.

In the first quarter this year, the Philippines was the second-largest importer of shrimp from Viet Nam among ASEAN member countries, with total imports of nearly US$1.3 million, according to VASEP.

Earlier, in mid-April, Mexico also decided to stop importing live shrimp from mainland China, Malaysia, Thailand and Viet Nam.

Airlines, travel firms tout discounts

Local tour and airline companies are offering discounts on domestic tours for the upcoming summer holiday.

National carrier Viet Nam Airlines and travel companies like Fiditour and Vietravel have teamed up for the promotion.

Viet Nam Airlines is offering discounts of 38-58 per cent on economy class tickets for domestic flights to 11 tour companies in HCM City, enabling tour-price discounts of 23-52 per cent.

Fiditour has cut the prices of its tours to well known resort localities like Nha Trang, Con Dao and provinces in Central and Northern regions by VND500,000 to VND4 million (US$24-191).

Vietravel has reduced by up to VND3.5 million ($167) the prices of its tours to famous destinations in northern provinces.

Vinamilk named as Viet Nam's favourite brand

Vinamilk, the leading local dairy company, is the most popular fast-moving consumer goods (FMCG) brand in Viet Nam, although Coca Cola still dominates the global market.

Up to 94 per cent of the country's households purchased Vinamilk products, with an average frequency of 27 times per year, according to the Kantar Worldpanel Brand Footprint Ranking issued last week.

Vinamilk products were chosen 57 million times per year for household consumption in four major cities: Ha Noi, Da Nang, Can Tho and HCM City.

Other products in the top ten included Chin-Su sauce, Hao Hao instant noodles, Dutch Lady milk and Tuong An cooking oil.

The study showed that consumers in emerging markets like Viet Nam tended to buy "faster food," reflecting the increasing trend of investments in the sector.

In the global market, Coca Cola topped the Brand Footprint Ranking with 5.3 billion purchases. Coca Cola products reached 44 per cent of world households and were bought 15 times per year.

Fabrice Carrasco, managing director of Kantar Worldpanel Viet Nam, the Philippines and Indonesia, a global company in consumer knowledge, explained to online newspaper Viet Nam Investment Review that the ranking measured the popularity of brands in 32 countries in four continents.

Consumer Reach Points were used to measure the percentage of households buying a brand and how frequently the products were chosen.

Pepper producers must spice up products

For six years, Vietnamese pepper has held about 50 per cent of global market share, but pepper products still fail to meet their potential, said Do Ha Nam, chairman of the Viet Nam Pepper Association.

Actually, 95 per cent of unprocessed exported pepper is exported through three major importers - India, China and the United States, As a result, Vietnamese pepper is often sold under a foreign trademark, said Nam.

He said the Viet Nam pepper association should focus on three measures to raise its trademark and export value.

First, the difference in price between white and black pepper has reached 70 per cent, therefore, local pepper farmers should shift to white pepper to enhance profits.

Secondly, pepper exporters needed to produce pepper under ASTA (American Spice Trade Association).

Viet Nam is now home to 10 pepper manufacturers tied to ASTA. Five of them are foreign-invested companies. Vietnamese pepper sold under ASTA accounted for only 15 per cent of exports to the EU and US markets.

Lastly, domestic producers needed to spur exports of pepper powder. Local producers claim they lack export partners.

In addition, the Ministry of Agriculture and Rural Development should to develop a map of zoning area for pepper plantation. The Ministry should soon outline pepper cultivation process to grow pepper tree under VietGAP standards.

The major pepper growing regions, Binh Phuoc, Dong Nai, Ba Ria- Vung Tau , Dak Nong and Gia Lai, do not have a trademark for pepper products, apart from the Chu Se trademark in Gia Lai Province.

As a result, domestic pepper products always suffer in comparison to other pepper exporting countries.

According to the Ministry of Agriculture and Rural Development, from the beginning of this year, local pepper producers exported 56,000 tonnes of pepper, earning an export turnover of US$370 million.

The volume rose 14.7 per cent in volume and 17 per cent in value over the same period last year, achieving the highest record.

Black pepper for export sells for $6,621 per tonne or a decrease of 3.4 per cent over the same period last year.

According to the VPA's statistics, last year, the price of Vietnamese black pepper was $295 per tonne lower than the global price. But it was $389 per tonne lower in the first three months.

The price of white pepper was $8,750 per tonne in 2012. Over the first three months, white pepper fetched an average price of between $8,742-$8,874 per tonne or it is between $450-500 lower than the world pepper price.

Do Ha Nam attributed the declining pepper price to psychological factors. Farmers often want to sell their harvest pepper right after they harvested.

In addition, pepper exporters also strongly increased the volume of pepper for export, thus lowering export pepper prices.

VPA predicts that pepper exports this year will fall 21 per cent compared to 2012.

Banned vegetables resume export to EU market

Certain Vietnamese vegetables have once again returned to the EU market, after a break of one year, said Nguyen Xuan Hong, head of Plant Protection Department under the Ministry of Agriculture and Rural Development.

According to Mr. Hong, the department had instructed businesses to stop export of five vegetables to the EU market, namely, basil, sweet pepper, celery, bitter gourd and coriander, at the beginning of last year.

This move was made after EU warned of total and permanent ban of the five above mentioned vegetables if they failed to meet with international food safety standards.

Previously, EU quarantine officials had uncovered three consignments that had violated these standards.

As a result, the Plant Protection Department had instructed businesses to temporarily stop export of the five vegetables to the EU market till such time there was better quality control.

HCM City aims to double per capita income by 2020

HCM City sets a target to double its average income by 2020 and triple it by 2025, according to a master plan approved by the People’s Council on May 13.

The city’s per capita income is expected to reach USD4,800 by 2015 and between 8,430 and USD8,822 by the end of 2020 and climb to USD14,000 by 2025.

However, Vice Chairman of the HCM City People’s Committee Hua Ngoc Thuan said, “HCM City’s per capita income of USD4,800 was still much lower than that of many other cities in Asia in 2010. The USD8,500 per capita income targeted by 2020 would only be higher than the level of metropolitan Manila in 2010.”

The 2025 target would only be marginally higher than the 2010 figures for Jakarta and Bangkok, he added.

The council approved the income growth targets of 10-10.5% for the 2011- 2015 period set in the master plan. The rate will be 9.5 – 10% per year in the 2016-2020 period and 8.5% - 9% per year in the 2021 – 2025.

The council urged the municipal People’s Committee to give priority to improving the administrative work, carrying out re-settlement projects, relocating people living along rivers and canals, renovating run-down tenements, and providing housing for the poor.

Land grabbing accusations cause huge losses for rubber tycoon

Shares of Hoang Anh Gia Lai Group (HAGL) dropped sharply May 14 after an NGO accused the firm of land grabbing of in Laos and Cambodia.

The fall in share prices, which also caused VND436.25 billion (USD20.83 million) in losses for the company's chairman, Doan Nguyen Duc, was a result of a report published by Global Witness on May 13. The report was entitled, "Rubber Barons: How Vietnamese companies and international financiers are driving a land grabbing crisis in Cambodia and Laos."

According to the report, privately-owned HAGL Group and state-owned Vietnam Rubber Group (VRG) acquired more than 200,000 hectares of land through a series of deals with the Lao and Cambodian governments that lacked transparency. The report also said that the deal was backed by several international financiers, resulting in widespread devastation to the environment and livelihoods of locals.

Land was often sold without residents' consent or even their knowledge and without compensation. Families were forced off their land or expected to work for the rubber plantation, although jobs were few and far between, the report alleged.

After news of the accusation spread in Vietnam, Hoang Anh Gia Lai shares fell by around 6% to VND21,400 on Tuesday morning. The group’s chairman, Doan Nguyen Duc, lost VND436.25 billion on over 311.6 million shares, nearly half the company’s stock.

Global Witness has even proposed that the Lao and Cambodian governments to stop HAGL’s activities in their countries, hold investigations and prosecute any illegal activities.

HAGL has turned to rubber, hydropower and sugarcane projects after withdrawing investment from real estate.

HAGL has released an announcement to refute Global Witness’s accusations.

“This may be an attempt by Global Witness to promote themselves and attract donations by aiming their attacks at HAGL. A number of other countries are also investing in this area, but they have picked us because we have done the best," Duc stated.

"The biggest disadvantage for us is the misleading of our big shareholders. We are ready to cooperate but Global Witness did not provide specific evidence for us to respond to," Duc added.

Listed firms switch to personal sources of capital

Despite lower interest rates, many enterprises are still finding it hard to access bank loans and are turning to personal channels to source capital to main their business.

A report by Ninh Van Bay Travel Real Estate Joint Stock Company showed that the company borrowed over VND60 billion (USD2.86 million) as short-term loans from the chairman of the company’s Board of Directors Le Xuan Hai and his family during the first quarter of this year.

Even though the interest rates have yet to be made public, the company’s financial expenses during the quarter sharply fell to VND1.2 billion (USD57,292), compared to nearly VND12 billion (USD572,929) of the same period last year.

NVT’s business has improved as it made a pre-tax profit of over VND10 billion (USD477,440) after incurring losses for two consecutive years.

An audited report by Hoang Quan Consulting Trading Service Real Estate Corporation in 2012 showed that the company borrowed approximately VND130 billion (USD6.2 million) from some members of the board of directors by the end of last year.

The company explained that due to funding shortfall, the company borrowed VND77.8 billion (USD3.71 million) from Truong Anh Tuan, the board’s chairman and VND49 billion (USD2.33 million) from Nguyen Thi Dieu Phuong, a member of the board.

The same situation is recorded at several other listed companies such as THV, BAS and TAS.

Many other companies have focused on raising capital from their staff, shareholders and strategic investors instead of depending on bank loans in order to maintain their operations.

This situation is a result of a fact that amid economic difficulties and high rates of bad debts, banks have become more hesitant in lending to enterprises.

While the deposit interest rates have been rapidly cut to 7% per year, the process of lowering lending interest rates seems to be rather slow as the cut depends of the capacity of the banking sector.

Many said that it would take a considerable time to see lending rates to fall from 10%-12% per year.

Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR