Vietnam, Russia sign oil, gas exploration deal

Vietnam and Russia have signed a Memorandum of Understanding (MoU) on the possibility of cooperating in a joint seismic research at Lots 125 and 126 in the Phu Khanh basin in Vietnam’s continental shelf.

The MoU was inked by General Director of the Vietnam National Oil and Gas Group (PetroVietnam) Do Van Hau and General Director of Russia’s Zarubezhneft Oil Company Alexander Kudasov in Moscow on June 16 on the sidelines of the 21st World Petroleum Conference.

The June 15-19 conference is drawing the participation of about 4,000 delegates, including 30 ministers and 400 CEOs and heads of industrial organisations from 80 countries.

The Vietnamese delegation is led by Minister of Industry and Trade Vu Huy Hoang.

Following the signing ceremony, the Vietnamese officials had a working session with Zarubezhneft Company General Director Alexander Kudasov, and visited a PetroVietnam pavilion at the 21st World Oil Exhibition.

PM instructs composition of 2015 socio-economic plan

Prime Minister Nguyen Tan Dung has figured out major orientations for authorities to design a national socio-economic development plan for 2015, the Government news portal reported.

Accordingly, the Government targets to continue maintaining macro-economic stability, speeding up the implementation of the strategic breakthroughs, restructuring the economy and transforming the growth model, improving the efficiency of the economy, ensuring sustainable economic development and social welfare, expanding external relations and international integration, consolidating national security and defense, accelerating public administration reform and preventing corruption and wastefulness.

The Government will strive to raise the gross domestic product (GDP) growth to 6-6.2% in 2015.

Economic, trade and investment linkages will continue to be diversified in a bid to increase the self-reliance and independence of the economy.

The Government will focus on developing several service sectors like tourism, telecommunication, information technology, finance-banking, insurance and other services in favor of business activities.

Programmes on developing key input materials will also be designed to spur domestic production.

More efforts will be made to further improve the business environment, focusing on measures to reduce the costs for joining the market and accessing to land, enhance transparency and application of IT among State agencies, and beef up administrative procedure reform.

Regarding national security and defense, PM Dung asked for comprehensive measures to enhance the capacity of the law enforcement forces to resolutely safeguard the national sovereignty and interests in the East Sea.

Vietnam will make every effort to settle complicated situations in the East Sea on the basis of international law, especially the 1982 UN Convention on the Law of the Sea (UNCLOS) and the Declaration on the Conduct of Parties in the East Sea (DOC).

The Government is determined to crack down on those who incite acts of violating laws and undermining the country’s image, ensure absolute safety for all individuals and organisations, especially foreigners and foreign-invested enterprises.

Vietnam, Netherlands bolster plant quarantine cooperation

Vietnam and the Netherlands signed a memorandum of understanding (MoU) on plant quarantine at the Vietnam-Netherlands cooperation forum on fruit and vegetables, held in Hanoi on June 16.

Signatories to the MoU were Vietnam’s Minister of Agriculture and Rural Development Cao Duc Phat and Dutch Minister for Agriculture, Sharon Dijksma.

Addressing the forum, Minister Sharon Dijksma said that the Netherlands has devised solutions to improve labour capacity and hi-tech varieties resistant to epidemics.  At present, the Netherlands has successfully provided food to many nations around the world.

Ms Dijksma said that Vietnam’s fruit and vegetables sector has bright future prospects for exports, due to its diversified products in both local and foreign markets and its attractive destination for foreign investors.

She emphasized that it needs to strengthen cooperative relations by devising proper solutions and boost closer co-ordination among businesses and the governments to fully tap Vietnam’s advantages.

Minister Phat affirmed that Vietnam has always considered fruit and vegetables spearhead produce which can bring high economic efficiency. In recent years, cultivation areas have developed rapidly with many high quality specialties meeting the local demands and competing with products from the US, EU, Australia and New Zealand.

So far, Vietnam’s fruit and vegetables are available in 40 foreign markets in the world with annual export turnover increasing by 30%. Last year, the sector earned an export turnover of more than US$1 billion and the country has 13 import markets with total turnover fetching upward of US$10 million per year.

Minister Phat expressed hope that with experience and advanced technologies, the Netherlands will support Vietnam in develop the sector sustainably to bring practical efficiency to both countries.

Vietnam to finalise legal corridors conducive to investors

Vietnam sees the finalisation of legal business and investment corridors as a key means to make it more attractive to investors, Deputy Minister of Planning and Investment Dang Huy Dong has said.

Sharing the view, head of the Foreign Investment Agency Do Nhat Hoang said more needs to be done to reform administrative procedures while improving infrastructure, the support industry and labour training.

Ensuring the benefits of information and biological technology are brought to the farming sector is also a priority, he added.

Chairwoman of the Council of the Taiwanese Chamber of Commerce in Vietnam Liu Mei-teh, meanwhile, voiced her opinion that the territory expects its investors, workers and the Vietnamese Government to reach a common consensus and coordinate more closely for their mutual benefit.

Roman Kuebler, General Director of B.Brauns Vietnam, expressed his hope for a more transparent investment policy, as the company is looking to raise its stake to US$270 million in the country.

A majority of enterprises here are hopeful that Vietnam will sign a number of trade agreements as planned, Regional Manager of International Finance Corporation for Vietnam, Laos, Cambodia and Thailand, Simon Andrews, declared.

Many localities suggested taking in large-scale foreign-invested projects that produce highly-competitive products, making it easier for them to join the global value chain.

With 101 countries and territories flocking as investors, Vietnam recorded over 16,300 valid projects worth some US$237 billion as of May 2014.

Last year, the total registered capital annually rose by 36.7 percent to US$22.35 billion, while US$11.5 billion went was disbursed, up 9.9 percent.

In the first five months of this year, the foreign direct investment (FDI) inflow hit US$5.5 billion, with US$4.6 billion already spent, a year-on-year rise of 0.4 percent.

According to economists, Vietnam still lags behind other regional countries in terms of FDI attraction. Projects in the US$100-500 million range make up for 1.51 percent while those worth US$500 million – 1 billion or more account for a mere 0.19 percent and 0.2 percent, respectively.

Ha Nam facilitates business operations

Local authorities from the northern province of Ha Nam will create all possible conditions to help business players stabilise and develop their performance.

Chairman of the provincial People’s Committee Mai Tien Dung made the promise at a meeting with entrepreneurs on June 16 to discuss ways of removing business difficulties.

Dung was told that the major obstacles include poor information technology infrastructure – which slows down cargo shipments - unclear payment procedures, an imperfect traffic system and poor waste treatment facilities in some industrial parks.

Additionally, it is difficult for businesses, especially small and medium ones, to get access to bank loans, which minimise opportunities to expand their market.

Dung said the business community has a major role to play in the local social-economic development, helping increase the provincial competitiveness index (PCI).

According to the provincial Department of Planning and Investment, as of May this year, Ha Nam had 3,172 businesses registering for operation. They contributed over VND700 billion (US$43.7 million) for the State budget, up 25% year-on-year.

Local exporters also raked in nearly US$300 million from January-May, posting a yearly rise of 44%.

Last year, Ha Nam lured 20 foreign direct investment (FDI) projects with registered investment totalling US$118 million.

The province now has 79 FDI projects worth more than US$700 million. It targets US$1 billion in FDI by 2015.

Garment industry stands firm in global market

Vietnam’s garment and textile industry has so far posted a year-on-year rise of 16.4% in export value to reach US$10.21 billion.

The highest growth was seen in the Republic of Korea market with 30.1 percent, followed by the US and Europe, 14.5% and 11.3%, respectively, said Tran Viet, head of the market department of the Vietnam National Textile and Garment Group (Vinatex), at a press conference in Hanoi on June 16.

Since the beginning of this year, the State-run group raked in US$1.62 billion from exports, posting a year-on-year increase of 15%.

The group is focusing on a number of sub-material projects to increase the production capacity and cater for the demands of Trans Pacific Partnership (TPP) Agreement.

It will launch its initial public offering (IPO) – the first sale of stock to the public, in Ho Chi Minh City on July 22.

In 2013, the garment and textile sector earned US$19.8 billion from shipment, up 16.9% year-on-year. Vinatex’s export revenue hit nearly US$3 billion, a 12% rise against 2012, while its domestic earnings reached VND22.5 trillion (US$1.05 billion), up 15%.

The same year, Vietnamese garments and textiles shipped to 11 TPP economies touched over US$11 billion, accounting for 22.7% of Vietnam’s total export volume to TPP.

80 businesses to attend Expo 2014 in Myanmar

Vietnamese businesses will attend the Vietnam-Myanmar Trade-Service-Tourism Fair 2014 (HCM City Expo 2014) in Tatmadaw Hall, Yangon city from June 26-30.

The event provides an excellent opportunity for Vietnamese businesses to introduce their products to Myanmar consumers and seek business partners to establish a commodity distribution channel to the market.

Over a hundred Vietnamese trade stands will display processed foods, plastics, household utensils, garment and textiles, cosmetics, footwear, wood products and interior decorations.

The highlight of the fair is the “Common House” which will exhibit images of solidarity and friendship between Vietnam and Myanmar as well as Vietnam’s and HCM City’s economic, political and cultural achievements.

In addition, Myanmar consumers will the chance to enjoy Vietnam’s culinary arts at 22 food stalls introducing Vietnamese dishes.

HCM City’s Investment and Trade Promotion Centre (ITPC) Director Pho Nam Phuong said that Vietnamese businesses have always sought opportunities to provide Myanmar consumers with high quality products at competitive prices. Many Vietnamese businesses have distributors-Saigon Cosmetics Joint Stock Company, RangDong Plastic Joint-Stock Company, Vietnam Electric Wire & Cable Corporation (CADIVI) in Yangon and Mandaly.

Opportunities to export plastics materials to Turkey

In recent years, Vietnam’s export turnover of plastic materials to Turkey has experienced high growth.

The country earned US$7.1 million from exporting plastics in 2011 and US$20.7 million in 2013, 191.5% higher than 2011.

Yet, in the first four months of this year the nation earned just US$7.4 million, down 14%. The figure is expected to rise in the rest of 2014 due to market demands.

Every year, Turkey imports plastic materials worth over US$10 billion, offering a huge opportunity for exporters including Vietnam. However Vietnam’s Turkish plastics exports made up a small proportion (0.1%) of the country’s total imports, requiring Vietnamese businesses to make greater efforts in researching market, promoting trade and seeking partners.

The Ministry of Industry and Trade (MoIT) Import-Export Department said that Turkey has a population exceeding 75.6 million with a developed industry and high consumption demand for plastics Turkey now imports plastics from 100 nations in the world with 63% from Saudi Arabia, Germany, Belgium, the Netherlands, the Republic of Korea (RoK), Spain, Italy, France, the US and Vietnam.

Mekong Delta fetches nearly US$1 bil from rice exports

The Mekong Delta region has exported 42,000 tonnes of rice, bringing total rice volume for the period January to June 2014 to 2.5 million tonnes, earning nearly US$1 billion, according to the Steering Committee for the Southwestern Region.

Asia, especially the Philippines is the largest consumption market, making up 78% of rice volume, up 5% from the same period last year, followed by Europe, America, Africa, the Pacific and Middle East.

Nguyen Phong Quang, deputy head of the Steering Committee for the South-western region said the positive results are attributed to the fact that localities have intensified marketing activities in Asia and Middle East markets.

In addition, An Giang, Tien Giang, SocTrang and Can Tho have also expanded rice production models under the VietGAP, GlobalGAP standards, to improve competitive advantages for Vietnamese rice.

In particular, localities provided around VND8,000 billion in loans to businesses to purchase materials and strengthen links with farmers and scientists to expand material zones in order to create high quality varieties.

Vietnam mainly imports goods from Asia

Vietnam’s import turnover from Asian countries in the first five months of this year accounted for 81.3% of the country’s total, according to the Ministry of Industry and Trade.

Its imports from ASEAN, East Asia and especially China made up 16.2%, 60.4% and 28.3% respectively.

Vietnamese imports from Asia increased by 19.5%, the Americas 24.8%, Africa 9.9% and Oceania 45.7%. However, its imports from Europe declined by 11.6%.

Overall, Vietnam sustained its steady growth of its imports for domestic production, new projects, and goods processing for export.

Footwear exports continue to grow

Footwear exports fetched US$3.76 billion in the first five months of this year, up 17.8 per cent year-on-year, according to the Ministry of Industry and Trade.

The period's encouraging growth rate signalled that the footwear industry was well on track to reach $12 billion export target set for this year, it said.

From January to May, US, Japan and UK remained major export markets for Vietnamese footwear, with $946 million, $192 million, $170 million, respectively, in revenue. Germany came in fourth with $150 million.

The Viet Nam Leather and Footwear Association (Lefaso) expects footwear exports to prosper due to the development of a competitive edge, the introduction of Generalised System of Preferences (GSP) taxes and the forthcoming signing of the Trans-Pacific Partnership (TPP) Agreement.

Lefaso encouraged domestic footwear producers to innovate their existing technologies to increase productivity as well as improve the quality of products.

It is undeniable that Vietnamese enterprises will enjoy numerous benefits brought by TPP. However, many footwear companies said they had encountered various difficulties while preparing for this agreement.

Tran Ngoc Anh, director of two footwear production companies of An Thinh and Do Ba, told the Dau Tu (Viet Nam Investment Review) newspaper that 60 to 65 per cent of his products were exported to the EU countries, while the remainder was shipped to other countries, which have yet to join the TPP.

"We wanted to penetrate into the US market to take opportunities of TPP effectively, but it was not an easy task due to regulatory obstacles," he told the newspaper.

For footwear companies, the preparation for TPP was not only their responsibility. Raw material suppliers also played a key role, as TPP required enterprises to source a certain ratio of raw materials locally, he explained.

The problem was to find enough raw material suppliers in the domestic market to take full advantage of TPP, he noted.

Not many domestic footwear producers could provide high-quality products with good designs as per the demands of TPP countries, Le Quang Doan, Director of Minh Dieu Co which specialised in footwear production told the newspaper.

Due to capital shortages local footwear producers just invested in improving product quality and design until they got an order from customers, Doan said.

General Secretary of HCM City Leather and Footwear Association, Nguyen Van Khanh, called on producers to make further investment in production expansion and technological innovation in an effort to catch up with all TPP opportunities.

According to trade experts, more efforts from the firms in advertising products via trade promotion and international fairs and exhibitions as well as the State incentives in taxes, credit and production spaces was also needed.

HDBank provides loans to FDI businesses

HCM City Housing Development Bank (HDBank) has given a package of medium loans to businesses with foreign direct investment from June 5 to September 30, 2014.

The businesses will not be required to provide their assets as security for the bank's loan, according to the online news portal Vietnam Business Forum.

The package, worth VND500 billion (US$23.8 million), will help businesses repair and build facilities and buy materials and equipment. The loan will be 70 per cent of total expenditure.

The loan period will not exceed 18 months, with a grace period from three to six months.

Ba Ria-Vung Tau sets up investment fund

The southern coastal province of Ba Ria-Vung Tau last Friday launched a development investment fund which operates as a channel to mobilise investment in local infrastructure expansion.

With a charter capital of VND500 billion (US$23.5 million), the State-run credit institution is tasked with receiving investment from the State budget and individuals and organisations both from home and abroad, and using it for the upgrade of local socio-economic facilities.

The fund is also entitled to directly invest in projects and provide enterprises with a start-up capital, along with financial consultancy services.

Vietcombank to offload $52m in bad debt

Vietcombank plans to sell VND1.1 trillion (US$52.38 million) worth of bad debts this year, the same amount as last year, Bank Deputy General Director Dao Hao said last week.

The bank aims to achieve credit growth of 13 per cent in 2014. Meanwhile, loans grew only 3.16 per cent in the first five months of this year.

Building investors stall payment of sinking funds

Executive committees and residents of serviced apartment buildings are desperate to collect sinking (or maintenance) funds from investors, who are stalling on the issue.

The 2005 Housing Law states that a customer must pay an amount equal to 2 per cent of the purchased apartment towards maintenance funds. The fund will be managed by executive committees of the buildings which are set up, based on the agreement of dwellers in the building.

On the other hand, pursuant to Decision No 08/2008/QD-BXD of May 25, 2008, by the Ministry of Construction, the building's investors are responsible for opening an account at a commercial bank for every apartment in the building when the building is ready for use. Later on, according to the decision, investors must transfer the fund to the building's executive committee, which is set up voluntarily by people in the building.

However, not everyone goes by the book.

For example, news website saigondautu.com.vn estimated that investors of Keangnam may be holding VND190-210 billion (US$9-10 million) in maintenance funds. However, Keangnam building's executive committee hasn't got their money back after years of knocking on the investors' doors.

Other luxury apartment buildings in Ha Noi, such as The Manor, Sky City, Golden Palace and Golden Westlake seem to be facing a similar predicament. The most common responses of investors are to tell executive committees to wait or to pay back just a fraction of the fund.

A resident of The Manor, Nguyen Nhung Hanh said, as quoted bysaigondautu.com.vn, that the building's investors were holding on to VND5.2 billion ($247,000) of the sinking fund of 58 apartments, but they had just transferred VND1 billion ($48,000) to the executive committee so far.

There are, therefore, no funds available for the numerous repairs and maintenance of the building.

The revised draft of the Housing Law submitted to the ongoing National Assembly proposed that district housing administrators be held responsible for the funds of its area's apartment buildings.

The Ministry of Construction said that the amendment would hopefully deal with conflicts between customers and investors in managing the fund. However, experts and residents of buildings did not agree with such a change.

According to Ha Noi Apartment Buildings Union, the fund is to be used by the building's dwellers for maintenance and they reserve the right to decide who will hold their money, when to do maintenance and how to do, etc. If the law gives the right to a State administrative body, it is likely to deeply interfere in civil relations and limit rights of owners.

Property experts said that the Ministry of Construction should revise the regulations some other way to guarantee owners' rights.

Da Nang promotions target tourists

The central city has launched new direct air routes to Japan, Korea and Kuala Lumpur, promoting familiarisation (FAM) trips and road shows in Japanese, Russian and European markets.

The reason for the launch is to fill up the decline of Chinese tourists.

Deputy Director Tran Chi Cuong of the city's Culture, Sport and Tourism Department announced at a meeting on five-month report.

"The number of Chinese tourists, which is the highest among foreign tourists to the city, has sharply reduced 90 per cents since May 15. The decline is estimated to last until July," Cuong stated, adding that the number of tourists from Singapore, the United Kingdom, the United States and France as well as Japan also saw a five or 10 per cent decrease.

"Among 19 international air routes, 13 direct chartered flights from the city to Chinese destinations including Hangzhou, Chengdu, Shanghai and Beijing, as well as Kunming, Shenyang and Dalian, have been temporarily halted," he pointed out.

"As a result, Chinese visitors staying in 20 five-star hotels in Da Nang accounted to only around 10 per cent compared with 90 per cent in the previous months," the vice director added.

The city's People's Committee Vice Chairman Huynh Duc Tho stated that it needs a long-term strategy of tourism promotion and development.

"The city's tourism industry was partly influenced since China had illegally placed the Haiyang Shiyou-981 drilling rig in Viet Nam's exclusive economic zone and continental shelf on May 2," Tho noted.

"We have planned to open more new flights to potential markets such as Japan, Korea, Moscow and Malaysia as well as promote existing routes of Singapore, Siem Riep and Hong Kong," Tho added.

As scheduled, the central city and Vietnam Airlines will launch direct flight service from the Da Nang Airport to Narita, Japan, on July 16 with four flights a week; the Da Nang-Kuala Lumpur route in August with four flights a week; and Da Nang-Busan route with two flights a week.

Meanwhile, road shows were organised in Busan and Seoul, South Korea, and Japan as well as FAM trips were hosted for Japanese, Korean and Australian travel agencies and a promotional programme in Moscow, Russia, in August.

The city has launched promotional programmes, with a 50 per cent discount for entrance ticket at destinations; a 40 per cent discount for rooms at hotels; and a 30 per cent discount for air tickets.

In the first five months of this year, the city had hosted 1.3 million tourists, of whom 407,000 were foreigners. The tourism industry earned VND3.5 trillion (US$167 million), up 24 per cent over the same period last year.

Unbaked building materials promoted

The Ministry of Construction recently asked the provincial committees to improve management and create advantageous conditions for enterprises in producing unbaked building materials.

Enterprises should be encouraged to apply new technologies in producing unbaked building material, which would help enhance product quality, according to the ministry.

The ministry has been evaluating the plan for boosting production and use of unbaked building material while reducing production of fired materials in more than 20 localities, including Kon Tum, Quang Ngai, Ben Tre and Bac Ninh provinces.

Other provinces and cities were under pressure to draw up plans and report to the ministry.

With the environmental benefits, unbaked building materials have received encouragement from the Government.

However, sales of unbaked building material remained slow, as people were not used to using the new-style materials because of the downturn in the construction sector.

There were 13 plants making aerated concrete bricks, 17 making foam concrete and over 1000 production line of cement bricks throughout the country.

The northern Hai Duong Province has issued instructions on boosting the use of unbaked building materials and limiting the use of fired materials at construction projects.

Accordingly, budget-invested construction projects must use unbaked building materials as planned, which meant 50 per cent in 2014 and 100 per cent from 2015 in urban areas.

In other areas, the percentage of unbaked building material in construction must be raised from the minimum level of 30 per cent in 2014 to 100 per cent in 2016.

All buildings with nine floors must use at least 30 per cent of unbaked building materials.

The local authorities also wanted developers to use new technology to raise quality and lower prices, to meet the market demand.

Currently, there are only three plants making unfired bricks in the province with a total design capacity of about 359 million bricks and 60,000 tonnes of light concrete per year. Two other projects with a total capacity of 213.3 million bricks were underway.

Imported luxury cars clear customs block

Nearly 2,000 cars, many of them stuck at ports since 2011 when new regulations were imposed, are expected to be cleared for import after the Ministry of Industry and Trade decided to allow a one-time waiver for their importers.

The ministry has instructed the General Customs Department to relax the regulation for importers with import contracts and vouchers signed before Circular No 20//2011/TT-BTC, which took effect in June 2011.

The circular brought more restrictions on imported automobiles with nine or fewer seats to protect consumers' interests and make roads safer.

It required importers to provide additional documents showing they were appointed as an importer or distributor or given power of attorney by carmakers.

The importers also have to provide car warranty and maintenance papers to buyers as stipulated by the Ministry of Transport.

Once the circular took effect, thousands of vehicles were held up at ports because the importers could not produce the papers required to clear them.

The MoIT has finally acted to clear the logjam, but the importers and analysts are pessimistic.

The luxury car market cannot take the simultaneous entry of 2,000 cars, they feared.

The importers said it would be difficult for them to sell the vehicles.

Nguyen The Hung, director of Kylin GX 688 Company, said: "At the time I signed contracts many models I planned to import were unique and rare and so I expected to sell them at high prices.

"But now these models are sold widely in the domestic market.

"Due to the delay, the prices of many imported cars are now much higher than that of domestic ones.

"In addition, import duties are also very high. This means it will be very difficult for us to sell them. An imported Camry 2.0 now has a similar price to that of a locally-made Camry 2.4."

Analysts concurred, adding that the Vietnamese market can only consume around 5,000 luxury cars a year.

Government to release additional bandwidth

The government on Wednesday approved a list of bandwidths that will be auctioned in a bid to help mobile service providers expand their service coverage.

The list includes three bandwidths ranging from 2,300 MHz to 2,400 MHz, 2,500 MHz to 2,570 MHz and 2,620 MHz to 2,690 MHz, according to the Ministry of Information and Communications (MIC).

These bandwidths should meet the International Mobile Telecommunications-2000 (IMT-2000) standard, as defined by the International Telecommunication Union, which includes GSM EDGE, UMTS and CDMA2000 as well as DECT and WiMAX.

Better known as 3G or 3rd Generation, the IMT standard is for services such as wide-area wireless voice telephone, video calls and wireless data, all in a mobile environment.

Thus, 3G networks enable operators to offer users a wider range of advanced services, while achieving greater network capacity through improved spectral efficiency.

After the auction, the duration of use of these bandwidths will be regulated by the Authority of Radio Frequency Management (ARFM) under the MIC.

The government commissioned the MIC to organise the auction, and the time of auction should be based on the market demand and the popularity of the technology, while ensuring healthy competition in the mobile market.

In March this year, the MIC withdrew mobile bandwidths that it had provided to S-Fone and EVN Telecom mobile carriers due to their fading operations.

The EVN Telecom uses the 450 MHz bandwidth spectrum and S-Fone uses 850 MHz, both of which were allocated by the ministry when the two companies began their operations.

However, while EVN Telecom was taken over by Viettel in early 2012, the Korean-invested S-Fone nearly postponed its operations due to falling numbers of subscribers.

In recent years, new mobile subscriptions in Viet Nam have skyrocketed, reaching 19 million in 2006, 25 million in 2007, 74 million in 2008 and 98 million in 2009. At the end of April, there were more than 134 million recorded subscribers.

Pilot programme increases agriculture connectivity

A pilot programme will aim at financing connectivity models between businesses and farmers in order to promote high-technology application in agricultural production and exports.

The State Bank of Viet Nam (SBV), the Ministry of Agriculture and Rural Development and the Ministry of Science and Technology are considering cooperation on the pilot programme.

Director of the Credit Department under the State Bank of Viet Nam Nguyen Viet Manh stated that there have been many agricultural production models promoting connectivity between businesses and farmers across the country.

A number of these models have proved to be successful, including the large-scale rice field model in An Giang Province and other localities, the high-tech vegetable and flower cultivation model in Lam Dong Province and the dairy farming and milk product production model in Nghia Dan in Nghe An Province.

Using these models, businesses had not only created large-scale rice fields and mechanised agricultural production, but also had stable raw material production areas and constructed trademarks and geographical indications for their products in both domestic and foreign markets. The models benefited both farmers and businesses.

At a government's regular meeting in February 2014, SBV Governor Nguyen Van Binh suggested the construction of a credit programme for connectivity models and high-technology applications and farm export promotion projects.

Through its Resolution 14/NQ-CP, the government assigned the Central Bank to work with the Ministry of Science and Technology and the Ministry of Agriculture and Rural Development to implement a pilot credit programme for connectivity models. These three institutions are working together to survey, research and construct experimental policies for a large-scale application.

Manh stated that the pilot credit programme will reduce the input costs of the products of the connectivity models by offering preferential credit for the models.

The programme could provide unsecured loans for businesses and farmers as members of a connectivity model.

With this pilot programme, the banking sector can not only increase credit growth related to agricultural production but also promote large-scale, competitive agricultural production, contributing to gradually improving farmers' living standards and constructing and developing new rural areas.

Manh reported that the Central Bank, the Ministry of Science and Technology, the Ministry of Agriculture and Rural Development and credit institutions were expected to select about 20 connectivity models as the pilot credit programme's beneficiaries.

These include the large-scale rice field model, the product value chain-based connectivity model and the high-technology application business model, among others, with priority given to rice, seafood, livestock breeding, vegetables and fruits.

Two years after the completion of the pilot credit programme, the SBV will consider policy improvements and multiplication of the models.

Manh added that agricultural insurance policies, farm produce planning and its management, farm export promotion and law-based assistance and market information are important for the success of the pilot credit programme.

Most realty firms show Q1 profit

More than 40 of the 62 property businesses listed on the stock market, or 75 per cent of the total, reported profits in the first quarter of the year.

Of these, 21 per cent of enterprises had profits of several hundreds of millions of Vietnamese dong, 50 per cent had profit of VND1 to 20 billion (US$47,600-$952,000) and 4 per cent earned profits between VND20 billion and VND1 trillion ($47.6 million), said Le Hoang Chau, Chairman of the HCM City Real Estate Association.

The figures showed that the real estate market had become warmer due to the recovery of the macro-economy, Chau said.

The demand for housing had risen, especially the market segment which was popular with low and middle income groups.

Vingroup tops the list of property enterprises with high revenue of VND6.17 trillion ($293.8 million), which was six times higher than the same period last year.

Its after-tax profit rose four times to VND1.06 trillion ($50.4 million).

Duong Thi Mai Hoa, Vingroup's general director said in a report sent to the HCM City Stock Exchange(HOSE) that the positive business results were mainly due to the turnover of apartment transactions in two projects – Royal City and Times City.

Hoa said most of its core businesses have contributed to the high growth. Of these, revenue from property transactions reached VND4.8 trillion (228.5 million), posting revenue 11 times higher than the corresponding period last year.

Hoang Anh Gia Lai Group posted after-tax revenue of VND398 billion ($18.9 million), posting a 33 per growth rate. Its total turnover in January-March period rose 28 per cent to VND925 billion ($44 million).

Several real estate firms such as FLC Group and FIT Investment Company also reported profits in the first quarter, which was equal to the whole of last year.

According to FLC Group's consolidated financial report, its turnover in the period reached VND360 billion($17.1 million), increasing 69 per cent in comparison with the same period last year. After-tax profit rose 32 times to VND39.4 billion ($1.8 million).

Doan Van Phuong, the group's General Director, said its expansion and search for new customers have resulted in the increasing turnover. In addition, businesses at its subsidiaries and associated units have brought good results to the group.

However, Chau noted that there were some other property firms who had registered profits from their associated companies or subsidiaries in other sectors.

He added that the figures in financial reports have not given the accurate picture of property firms. This year companies could continue to face difficulties.

However, he said that the property market could see improvements in the future as the National Assembly would be approving the law on housing, real estate trading and construction, which was expected to make changes in the market. Of these, the segment of small and medium sized apartments would draw the interest of home buyers.

HCM City appoints investor for bridge project

The HCM City People's Committee has appointed the Dai Quang Minh Real Estate Investment Joint Stock Company as the investor in the Thu Thiem 2 Bridge project.

The firm replaces the Viet Nam Construction and Import-Export Joint Stock Corporation (Vinaconex), which had been assigned to research and invest in the project since 2009, but had failed to set a construction date so far.

As planned, the bridge will be built at the location of the Ba Son Ship Building Factory, and will go over the Ton Duc Thang-Nguyen Huu Canh road junction to link with the Le Duan-Dinh Tien Hoang intersection.

The six-lane bridge will be constructed under the BT (build-transfer) strategy with an investment capital of VND2.3 trillion (US$109.5 million).

Vietnam to lack 400,000 IT employees by 2020

Vietnam will lack of some 400,000 Vietnamese workers in information and technology sector (IT) in 2020, reported by the Ministry of Information and Communication.

At the seminar, Mr. To Hong Nam, representative of the Ministry of Information and Communication, affirmed that currently, manpower shortage for information, technology sector is limited.

It is expected that requirement for IT human resource will reach 600,000 workers, as result of, Vietnam is not enough qualified manpower to meet the IT industries' demand.

Of these, Department of Information and Technology said that they are working on the plan to train IT skills to Vietnamese workers, among of these includes how to use IT and develop IT professional skill.

Coca-Cola Vietnam opens new plants

Coca-Cola Beverages Vietnam Ltd. (Coca-Cola Vietnam) has celebrated the unveiling of its new manufacturing infrastructure in Ha Noi and HCM City.

The new infrastructure is part of the US$300 million investment in Vietnam from 2013 to 2015 and represents Coca-Cola's continued commitments in long-term business development and contributions to the sustainable development of local societies.

"With a strong desire to bring simple moments of pleasure to Vietnamese consumers, we have continued to invest in innovation and technology," said Irial Finan, executive vice president of the Coca-Cola Company and president of the Company's Bottling Investments Group.

The new investments will improve production efficiency, saving 10 per cent electricity, 15 per cent steam and 20 per cent water usage, according to Finan.

VietJet unveils 1,000 extra flights

VietJet is adding 1,000 flights on its several routes and providing approximately 180,000 flights to meet growing demandsin thesummer's peaktime.

The airline will provide eight additional flights per day for the HCM City–Da Nang route and five additional flights for the Ha Noi–Da Nang route.

In addition, four more flights per day will be scheduled for the HCM City–Hue route and two more flights for the Ha Noi–Phu Quoc route. VietJet is planning to open a new route from Can Tho to Da Nang and is expected to offer three flights per week.

Earlier, VietJet received three more Airbus A320-200 aircraft, raising the number of modern fleets to 15. The latest addition will help VietJet schedule 37,800 seats per week to meet and serve better the passenger rush during this summer.

Big C celebrates 16 yrs with sales

French supermarket chain Big C has launched its biggest promotion programme of the year to mark its 16th anniversary in Viet Nam.

To last through June the promotion includes discounts of up to 50 per cent on thousands of products such as fresh and processed foods, dry foods, household appliances, fashion items, cosmetics, electronic products, and others. Shoppers will also have a chance to win prizes in a lucky draw programme.

CPI to rise due to health-care charges

The country's consumer price index (CPI) in June is set to increase between 0.5 and 0.6 per cent against the previous month, according to the Vietcombank Securities Co (VCBS).

The anticipated hike is significant when compared to the rise in the past few months. According to the General Statistics Office, CPI's rise was low at 0.08 per cent in April, 0.2 per cent in May and – 0.44 per cent in March.

VCBS said that the hike in health-care service fees in HCM City from June 1 will probably push up the city's CPI in the month by 5.2 per cent. According to a decision by the HCM City's People Committee, higher charges will be applied to 2,000 types of medical services, including check-ups, beds for in-patients and technical services as well as surgery costs, in the city's 378 public hospitals.

With this year's inflation anticipated to be roughly 5 per cent, VCBS said that it would be difficult for the central bank to further cut the deposit interest rate next month.

Lending rates will be also unchanged, and so will exclusive old loans with high rates of more than 13 per cent, if the capital mobilisation source of commercial banks remains stable, as is currently the case, it said.

Director of the central bank's Monetary Policy Department, Nguyen Thi Hong recently also affirmed that the central bank will maintain the current deposit interest rate until the end of the year, provided there is no sudden change in the CPI.

Hong said that commercial banks might reduce the lending rate by 1 to 2 per cent this year if conditions permit.

In a report on banking activities in the week ending May 30, the central bank said that deposit and lending interest rates in dong continued to be stable.

It said that commercial banks offered dong deposit interest rates at 0.8 to 1 per cent per year for demand deposits and those less than one month; 5.5 to 6 per cent for term deposits from one to six months and 6 to 7.5 per cent for deposits between six months and a year. They also offered 7.5 to 8.3 per cent for deposits with a maturity period of over one year.

Lending interest rates in domestic currency for five prioritised sectors, including agricultural producers, exporters, small and medium-sized enterprises (SMEs), supporting industries and hi-tech businesses were between 7 and 8 per cent. Other sectors were charged lending rates of 9 to 10 per cent for short-term loans and 10.5 to 12 per cent for medium and long-term loans.

Businesses with healthy and transparent financial positions and viable business plans could borrow at 6 to 7 per cent per year.

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