MoF gives go ahead for latest fuel price hike

The Ministry of Finance yesterday allowed petrol distributors to increase prices of petrol by a maximum of VND584 (US$2.78 cent) to VND24,214 ($1.15) per litre.

The hike began at 2pm.

Meanwhile, the price of diesel fuel was raised by VND653 per litre to VND22,963 and kerosene by VND384 to VND22,404 per litre.

The Viet Nam National Petroleum Group, which holds more than 50 per cent of the market share, reported its price hike of petrol Ron 92, which has been raised to VND24,210 per litre.

The ministry also asked businesses to stop drawing out from the nation's price stabilisation fund for petrol and diesel. Before the hike, businesses were allowed to dip into the fund to offset losses of VND200-300 per litre of petrol and diesel, respectively.

As for kerosene, businesses will continue using the fund at VND700 (33 cent) per litre because sales are low and businesses have been selling kerosene at a loss, with a selling price lower than the base price.

By December 10, the nation's price stabilisation fund for petrol and diesel had VND72 billion ($3.42 million).

This is the fifth hike for petrol and kerosene since early this year. There were also six price reductions during 2013.

The new price for petrol is still lower than the record price of more than VND25,000 per litre set in March this year.

Since November, the ministry had repeatedly emphasised that the petrol businesses had been suffering losses due to the world's price fluctuations.

It is estimated that 70 per cent of the petrol in the local market was imported, so retail prices depended heavily on global fluctuations.

Petroleum traders can raise retail prices if price increases are not higher than 7 per cent, compared to previous prices, according to the amended Decree No 84/2009/ND-CP on trading petrol.

Under the Ministry of Industry and Trade's draft, which is publicised on its website for recommendations, if wholesale prices increase by 7-12 per cent, traders are required to submit their price hike plans to the ministries of Finance, and Industry and Trade, for approval two days before raising prices.

In case wholesale prices increase by more than 12 per cent, the Prime Minister will decide on measures to stabilise the petroleum market.

If wholesale prices decline less than 12 per cent, traders will have to cut retail prices. If the decline is more than 12 per cent, the traders will have to continuously cut their retail price after the Government increases import taxes and raises money that the traders have to contribute to the Price Stabilisation Fund.

Under the draft, the time between each price hike will be 15 days, instead of the current 30 days. The price would be determined after considering worldwide and regional prices during 15 consecutive days.

LienVietPostBank finances VND2 trillion for Vung Ang 1 power project

LienVietPostBank signed a deal to provide VND2 trillion (US$94 million) to PetroVietnam to continue construction of the Vung Ang 1 thermal power station.

The Vung Ang 1 plant, located in the Ky Anh district of central Ha Tinh province, consists of two turbines with a combined capacity of 1,200 megawatts.

Construction of the US$1.77 billion plant was started in December 2006 and is nearing completion.

The signing of this financing deal is expected to accelerate progress on the project, which is scheduled for completion by the end of 2014.

The Vung Ang 1 plant is one of the priority power projects underway to generate electricity for the growing demand of the central region.

Central bank will continue gold auctions

The State Bank of Viet Nam intends to keep up gold auctions to correct imbalances in supply and demand in the domestic market, according to the Head of the Foreign Exchange Department, Nguyen Quang Huy.

From March 28 to December 6 this year, SBV held 73 auctions in which it offered up 1.88 million taels (approx. 2.5m ounces). The auctions managed to inject 1.77 million taels into local credit institutions in a bid to combat speculative activity in the market, minimise gold imports and increase foreign reserves.

Gold auctioning is among a range of policy levers put into action more than a year ago to moderate the gold market. Huy said the policy has significantly improved the imbalance of supply and demand, stablised foreign exchange rates and secured the legal rights of gold holders.

Vietnamese citizens have a long tradition of privately storing gold reserves due to deep-seated problems causing high inflation and depreciations in the dong.

In a bid to wean people off gold holdings and to shore up the dwindling dong, the State Bank of Viet Nam shut down gold services in which banks paid interest rates for gold deposits.

Gold holders now have to pay for their storage at banks, with the policy designed to encourage people to covert bullion gold into dong.

Under Government Decree No 24/2012/ND-CP dated April, 2012 on gold-related activities, the State Bank of Viet Nam is responsible for purchasing and selling gold in the domestic market. Gold imported and exported by the central bank are exempt from taxes.

Following the rise of world gold prices, domestic gold prices yesterday were up around 0.16 per cent per tael against Monday. One tael is equivalent to 1.2 ounces.

Buying and selling prices of SJC gold bars listed by DOJI at 5pm yesterday were VND35.44/VND35.49 million per tael ($1,675/1,678), up around VND100,000 ($4.7) from VND35.35/VND35.43 million ($1,671/1,675) on Monday.

World gold increased yesterday, supported by a short-covering rally. Spot gold had risen 0.7 per cent to $1,245.90 an ounce.

According to Reuters, gold has lost over a quarter of its value this year as fears that the Fed will scale back its $85 billion monthly bond purchases brought a 12-year bull market to an end.

One US dollar yesterday traded at VND21,070/ VND21,150.

Debt legislation won't be delayed

The State Bank of Viet Nam will not further delay enacting Circular 02/2013/TT-NHNN on debt classification and will enforce it as scheduled on June 01, 2014.

According to SBV deputy chief inspector Dang Van Thao, last year the central bank delayed enforcing Circular 02 for one year to help businesses get easier access to bank loans and give credit institutions more time to prepare the roadmap and conditions to fully apply the provisions of the Circular.

Circular 02 strictly regulates asset classifications, the levels and methods of risk provisioning and the use of provisions to handle risks in the operation of credit institutions and branches of foreign banks.

Earlier, leaders of some banks expressed the view that the application of Circular 02 in June 2014 means businesses will continue to be tied up and massive bad debts will be incurred.

To prepare for enactment next year, SBV has asked banks to calculate how non-performing loans (NPL) will increase when applying this Circular to have specific plans for risks.

Thao said that SBV's Inspection and Supervision Agency will next year propose to the SBV Governor to classify NPLs into 3 groups.

The first group consists of businesses that have gone bankrupt or liquidated without the ability to recover debts. In this case, banks will use provisions to clear the debts.

The second group consists of businesses that are in difficulties. This group needs banks to restructure debts and lend more funding, along with rescheduling debts and reducing interest payments.

The third group consists of businesses that have been bankrupt or liquidated, but have collateral. In this case, banks will be able to sell the collateral to recover debts.

Banks will also be allowed to set up an Auction Council to liquidate and sell assets more quickly.

The grouping is planning to be directed towards credit institutions to help handle the expected increase in NPLs after the enactment of Circular 02.

The central bank will continue to apply the interest rate ceiling on dong deposits next year to stabilise market interest rate levels, said SBV's Monetary Policy Department head Nguyen Thi Hong.

SBV will actively and flexibly regulate interest rates to control and supervise market interest rates, along with monetary and macroeconomic developments, especially inflation, contributing to stabilising the currency market.

It will also actively use tools to enforce monetary policies to control inflation, stabilise the economy, support economic growth at a reasonable rate and ensure safe liquidity for credit institutions.

The central bank will also closely watch exchange rates, foreign currency markets and balance of payments to create suitable management policies, in a move to raise foreign exchange reserves and avoid the dollarisation in the economy, Hong said.

Central bank sets new rules for foreign currency lending

The Governor of the State Bank of Viet Nam (SBV) issued Circular No 29/2013/TT-NHNN on lending in foreign currency by credit institutions and foreign bank branches to resident borrowers on 6 December 2013. The Circular applies to (1) credit institutions and foreign bank branches permitted to conduct foreign exchange activities and lend in foreign currency to clients; and (2) residents borrowing from credit institutions and foreign bank branches.

Lending in foreign currency by credit institutions and foreign bank branches

Credit institutions and foreign bank branches (the "lending bank") may evaluate and decide to lend in foreign currency for the following demands:

(1) Short-term, medium-term and long-term loans to make offshore payments for the import of goods and services when the borrower has sufficient foreign currency from production or business revenue to repay the loan.

(2) Short-term loans to primary oil and petrol import enterprises obtaining the Ministry of Industry and Trade's 2014 oil and petrol import quota and not having sufficient foreign currency from production or business revenue to repay the loan. This provision applies until 31 December 2014.

(3) Short-term loans to meet domestic capital demands to implement production or business projects for export of goods via Vietnamese border gates and when the borrower will have sufficient foreign currency from export revenues to repay the loan. When the lending bank disburses loan monies, the borrower must sell by way of a spot transaction this amount to the lending banks, except where the borrower needs to make payment in foreign currency under the regulations. This provision applies until 31 December 2014.

(4) Loans for offshore direct investment in projects or works of national importance, having the investment policy approved by the National Assembly, Government or Prime Minister and granted an offshore investment certificate by the Ministry of Planning and Investment.

The lending banks may evaluate and decide to lend in foreign currency outside the above list in the priority fields or the fields in which development of production or business is encouraged by the Government after SBV approves each specific case.

SBV approval to lend in foreign currency

To lend in foreign currency to clients, the lending bank must send a written request, including the following contents to SBV for approval:

(1) The lending bank has evaluated the client's production or business project and is assured that the project is feasible and efficient. The client must satisfy borrowing conditions under the regulations on lending. The lending bank is able to recover the loan, including principal and interest, on time. The lending bank's request must include a specific report on the client's current financial status, production or business status, source for loan repayment, and demands to borrow in foreign currency, to implement its production or business project in the priority field or the field in which development of production or business is encouraged by the Government;

(2) The lending bank must include a specific report on its own foreign currency sources in order to provide the loan, and an undertaking to ensure balancing of its foreign currency sources as appropriate for the term and amount of the loan; and that the loan complies with current regulations on lending, foreign exchange control, limits on extension of credit, prudent ratios applicable to the lending bank and other relevant regulations;

(3) The lending bank undertakes to be responsible for the results of evaluation and decision to lend in foreign currency to clients and information contained in the request.

SBV will approve the lending bank's foreign currency loan within a maximum 30 business days after receipt of the lending bank's request.

Lending banks' responsibilities

The lending banks providing loans in foreign currency must comply with this Circular, regulations on lending, foreign exchange control, prudent ratios and other relevant provisions. The lending banks must provide monthly reports to SBV on their foreign currency loans on the 12th day of the following month.

This Circular takes effect on 1 January 2014 and replaces SBV Circular No. 37/2012/TT-NHNN (28 December 2012).

Binh Duong fares well in integration

The southern province of Binh Duong ranked third among 63 provinces and cities nationwide in the Provincial Economic Integration Index (PEI Index) in 2013, marking a great stride in international economic integration.

The National Committee for International Economic Cooperation's 2013 PEI Index to measure each locality's capacity to integrate into the global economy was based on eight fields, covering infrastructure, culture, local natural features, human resources, trade, investment and tourism.

The standing was attributed to the locality's second place in investment, third in infrastructure, fourth in human resources, sixth in tourism and seventh in trade.

On Monday at a workshop screening the province's economic integration, experts said in weathering difficulties stemming from the post-global economic downturn, the southern province has taken healthy and flexible policies to help enterprises access various investment sources to better their operations and renovate technologies.

Such efforts paid off as Binh Duong has attracted US$1.3 billion in foreign investment during the year, accounting for almost 10 per cent of the country's total.

The locality has so far had 17,259 enterprises operating with a total investment of over $24 billion.

The experts, however, suggested Binh Duong further polish its policies to ensure its investment attraction and international integration is sustainable.

The province has recently named six priority fields in calling for investment in 2014, including electrical-electronic industry, support industry, precision mechanics, basic chemical industry, medical and pharmaceutical equipment and high-quality food processing.

Motorbike sales stutter despite holiday discounts

The festive season had failed to light up motorbike sales towards the year-end, with demand continuing to fall, dealers said.

Buyers have resisted the lure of discounts and freebies offered by motorbike dealers through a series of sales promotions launched before the year end.

Domestic motorbike sales for 2013 were expected to fall to around 2.5 million compared to 3.1 million in 2012, due to slow economic growth and weak demand, according to the Viet Nam Auto Motorcycle and Bicycle Association.

Dealers are also struggling to during one of their worst years.

"The months before Tet used to be the best time for business with people rushing to buy new bikes, but this year is quite different," said Pham Manh Sy, director of the Viet Phu Company, a prominent Yamaha dealer in Ha Noi.

Sy said unlike previous years when they had enjoyed high sales numbers, he had only sold four bikes last month.

"This is the worst year since I started the business 15 years ago. I am thinking about closing the dealership and turning it into a restaurant," he told Viet Nam News in a telephone interview yesterday.

Most motorbikes dealers are suffering like Sy despite a series of discounts and sales promotions.

Suzuki has cut VND2 million (US$97) from the price of its Hayate scooters, and Yamaha is offering VND1.5 million vouchers for buyers of its Nozza model.

The country's most popular brand Honda has also cut prices of its best selling Wave by VND500,000.

Even Italian luxury scooter maker Piaggio, which rarely cuts prices, is offering buyers free bike registration fees.

"However, prospective buyers have fallen, and purchasing power is falling," said a Honda dealer in Ha Noi.

The country's two largest motorbike manufacturers, Honda and Yamaha, which account for over 90 per cent of the local market share, may experience another bad year in 2014.

According to a source close to these firms, Yamaha sales may drop by 10 per cent to 750,000 this year, while Honda expects to hit around 1.5 million to 1.9 million this year.

Viet Nam's motorbike market, the fourth-largest in the world, has shown signs of saturation, with annual output having exceeded demand, prompting producers in the Southeast Asian country to speed up their exports to other markets.

With motorbike sales totalling 3.1 million units last year, Viet Nam is the fourth largest motorbike market, after China, India and Indonesia.

But motorbike sales in Viet Nam have started to decline largely due to a slowdown in the country's economic growth. Last year's growth was up 5.03 per cent over 2011, the slowest pace in 13 years.

Motorbikes are the most common means of transport in Viet Nam, which has a population of 90 million and 37 million registered motorbikes, while the number of cars is just around 2 million.

Brokerage company announces closure

Au Viet Securities Co, formerly listed as AVS on the Ha Noi Stock Exchange, announced on Monday that it would dissolve the company.

It became the third brokerage to voluntarily cease doing business this year, following the closing of Sao Viet Securities and Cho Lon Securities. The company has six months, from January 1 to June 30 next year, to liquidate its contracts and pay its debts. Currently, Au Viet employs a staff of five, and the payment of salaries and allowances for workers must be finished by June 30 at the latest. To conduct the company closing, it has established an asset liquidation group of seven people, led by chairman Doan Duc Vinh.

The proceeds from the liquidation will be used to pay for employees, taxes and loans. The remainders will then be distributed to shareholders.

Vinh also said he would buy shares from small shareholders. "Shareholders can sell the shares on the over the counter market at negotiated prices," noted Vinh.

As of September 30, Au Viet only had VND221 billion (US$10.4 million) in assets, VND54.6 billion ($2.5 million) in cash, VND86.84 billion ($4 million) in short-term investments and VND20 billion ($943,390) in receivables. The company made a modest profit of VND6.1 billion ($287,700) during the first nine months this year. During the same period last year, it lost more than VND9 billion ($424,500).

Au Viet is still holding shares of Vung Tau Real Estate and Construction (VRC), Cuu Long Fish (ACL), Military Bank (MBB), retailer Pan Pacific (PAN) and HCM City Educational Book (SGD). Vinh said he would gradually sell these shares. Despite having to dissolve the company, Vinh stated he would continue to invest in stocks.

Tien Giang posts strong export turnover in 2013

Despite the global economic downturn, southern Tien Giang Province has earned over US$1 billion from exports this year, surpassing its target and seeing a yearly rise of 17 per cent.

This was the first time the province's export values exceeded $1 billion, director of the Tien Giang Department of Industry and Trade Dang Thanh Liem said, adding that such encouraging results would lay an effective foundation for accelerating its exports in the years to come.

In the future, the province would continue to speed up promoting trade, support local firms in expanding their distribution channels in domestic and international markets, and in participating in trade fairs and exhibitions to seek new outlets for business.

Eastspring Investments Viet Nam sells fund units

Fund management company Eastspring Investments Viet Nam on December 24 will begin sales of certificates for its open-ended fund at the par price of VND10,000 (US$0.95).

The company, which is owned by life insurance firm Prudential Viet Nam, plans to sell five million units of its Eastspring Viet Nam Navigator Fund (ENF). The fund plans to invest no more than 80 per cent of its capital in domestic firms listed on the two stock exchanges in Ha Noi and HCM City, according to Nguyen Minh Tung, the company's head of business development.

Kinh Do on the lookout for suitable acquisitions

Leading confectionery and foodstuff producer Kinh Do Corporation has announced plans for mergers and acquisitions.

Its general director, Tran Le Nguyen, said the company would seek more investment opportunities in companies that are suitable for its strategy and look to develop its brands in international markets. But in the coming years, food would remain the company's core business, he said.

The company is growing at an average of 20-30 per cent per year, and is likely to achieve profits of VND600 billion ($28 million) on revenues of VND5 trillion ($238 million) this year.

Vietnam learns China’s experience in dealing with bad debts

Chinese and Vietnamese economists gathered in Hanoi on December 17 to share experience in managing and dealing with bad debts.

At the workshop, an expert from the Financial Research Institute under the Chinese Ministry of Finance said China’s bad debts have risen from the Chinese State-owned commercial banks, accounting for one-third of their total bank loans since the 1990s. Other reasons include slow progress in building mechanisms for State banks to improve their management skills and the Government’s interference in the structuring of financial resources in the private business sector.

She said the Assets Management Company (AMC) is an important tool to deal with bad debts of the Central Bank of China. Since 1999, AMC has tried to handle outstanding bad debt on a large scale.

Since 2008, many local businesses have hit snags in their operations due to the impact of the global economic downturn, owing bad debts to credit organisations.

Pham Manh Thuong, Vice Director of the Debts and Assets Trading Company (DATC), said by the end of June last year, all credit organisations’ bad debts stayed at VND188,961 billion, accounting for 7.12% of total credit outstanding. Of the figure, bad debts related to real estates made up a large proportion.

Thuong said most bad debts were caused by a decline in economic growth and consumer demand. Many businesses were unable to pay off their debts. One subjective reason was that most credit organisations were more focused on stimulating growth than controlling the quality of credits. Some even invested in risky areas, such as real estate and securities to incur bad debts when they were frozen.

Anti-inflationary measures effective

Vietnam is on track to bring inflation under control this year, rising just 6% over 2012 – a record low in the past 10 years, according to the General Statistics Office (GSO) leader.  

In an interview granted to Vietnam News Agency, GSO Director General Nguyen Bich Lam said the government has succeeded in reining in runaway inflation in the context of difficult times.

There was growing concern about the recurrence of high inflation early this year when the prices of medical and education services, petrol, electricity, and gas would be adjusted as scheduled.

In fact, 17 provinces and cities hiked the prices of medicine and medical services by 19.5% against 2012, causing the national CPI to edge up 1.1% overall.

Vietnam was hit by a total of 15 storms this year, including the recent destructive typhoon Haiyan, causing great human and property losses and fuelling the prices of commodities in a number of localities.

Against this backdrop, it is vital that inflation was kept in check, with the rate hovering around 6%.

Lam attributed the low CPI to Vietnam’s bumper summer rice harvest, low purchasing power, and excess industrial inventories.

Above all, he appreciated the government’s impressive performance, taking prompt action to control inflation.

Ministries, agencies and localities put the government’s anti-inflationary measures in place, by keeping a tight grip on market prices, ensuring the market law of supply and demand, and combating trade fraudulence.

The State Bank of Vietnam introduced flexible monetary, exchange rate and gold market policies, contributing to reducing inflation. The deposit interest rate was cut from 18% in 2011 to 7% at present, and correspondingly the lending rate was also down from 23-25% in 2011 to around 10% in 2013.

Lam said the dollarization of the economy was no longer a major headache for the banking sector. The gap between global and domestic gold prices was narrowed due to saturated demands within the public.

He also gave reasons easing worries that the national economy has not yet bottomed out due to the low CPI and excess industrial inventories.

The national economy is recovering, he said, with the GDP growth increasing on a quarterly basis, from 4.76% in Q1 to 5% in Q2, 5.54% in Q3 and estimated 5.91% in Q4.

Industrial production is picking up, with the number of newly established businesses in the past 11 months rising 9.5% compared to the same period last year. In addition, 12,700 businesses resumed operation after a period of suspension.

11-month investment capital rose 6.8% and credit growth also edged up 7.54%. The 17.8% import rise means industrial production is recovering.

However, in Vietnam Lam said low inflation is too fragile to be controlled and high inflation is likely to edge up in 2014.

The National Assembly approved the government’s proposal to raise the 2014 budget deficit to 5.3% and issue more government bonds that will eventually increase the amount of cash in circulation. The government will go ahead with its roadmap for healthcare, education, electricity and water supply price adjustments.

Vietnam aims to keep inflation at 7% in 2014, and to meet this target the government needs to pursue its anti-inflationary policy, even when the rate is relatively low and stable, Lam concluded.

Czech to build glass packaging plant in Vietnam

The Czech Republic’s REF Company and European Safe Glass Joint Stock Company will build a glass packaging plant in Trieu Phong district, Quang Tri province.

REF General Director Jan Strunc told Deputy Minister of Industry Trade Ho Thi Kim Thoa on December 17 that the company will use around 400-500 tonnes of sand per day and generate jobs for around 500 local people.

The plant will operated in 50 years with a design capacity of 220 tones of products per day in the first phase and 500 tonnes of products per day in the second phase.

The plant will apply modern technology in producing glass bottles of different shapes and sizes.

The Czech Republic is famous for producing high quality crystal and glass products. So its new products made in Vietnam will be not only for domestic use but also for exports to regional countries.

SHB aims for its own subsidiary in Laos

SHB plans to set up a 100 percent-owned subsidiary in Laos in the near future.

SBH General Director Nguyen Van Le told at a meeting in Hanoi on December 17 with the Governor of the Lao Central Bank, Somphao Phaysith.

SHB opened its branch in Laos in August 2012. After more than one year of operation, the branch has developed steadily with its total loans reaching VND585 billion (US$27.8 million), up 547% from late 2012 and a profit of VND8.3 billion earned from different social and welfare activities.

Somphay spoke highly of SHB’s achievement over the years, which have contributed to socio-economic developments in Laos, particular in Champasak province.

He presented a certificate of merit to SHB and affirmed his support for its plan to expand operation in the country.

Coating industry develops strongly

Vietnam’s coating industry has achieved significant results in production and investment over the past five years.

Nancy, a representative from the China National Chemical Information Centre (CNCIC), made the remark at a press briefing to introduce an international coatings exhibition (COATINGS EXPO Vietnam 2014) in Ho Chi Minh City on December 17.

Nancy said that with its industrial zones around HCM City, Vietnam will be an attractive destination for foreign businesses to invest in its coating industry. Currently, some famous international businesses, such as Sigma and Nippon have set up paint production plants in Vietnam.

Nguyen Thi Lac Huyen, Vice Chairwoman and General Secretary of the Vietnam Paint& Printing Ink Association (VPIA) said Coatings Expo Vietnam 2014 which will take place in HCM City from May 14-16, next year will provide a good chance for them to seek technology transfer cooperation in the field.

Vietnam expects 12-14% credit growth in 2014

The State Bank of Vietnam (SBV) said it will promptly solve policy and mechanism-related problems to facilitate credit expansion and ensure the sector’s health safety in the coming time.

This was announced at a press conference to initiate the sector’s 2014 tasks held in Hanoi on December 16.

Vietnam’s banking sector is set to grow by 12-14% in 2014. The central bank will continue applying interest rate caps to deposits in VND to stabilise market interest rates.

When the financial market is stable and liquidity improved, interest rate caps on deposits may be lifted, it said.

The bank will also closely monitor fluctuations in the exchange rates, currency market and foreign exchange.

At the same time, it will regularly examine forecasting data on the balance of payments to evaluate currency demand and supply, thus adjusting the interest rates and fixing the dollarisation and the keeping of gold as a hedge among the public.

According to Nguyen Thi Hong, head of the SBV’s Monetary Policy Department, as of December 12, credit operations grew 8.83%, 3.17% lower than forecast. It is, however, estimated to be higher than last year’s rate of 8.91% by the end of this year.

The credit structure saw remarkable improvements, focusing on production and business, especially the prioritised fields.

Between January-November 2013, credit to rural farm production increased by 17%; high technology - driven enterprises, 24.51%; and exports, 3.32%.

Bad debts were also gradually brought under control.

According to the SBV’s estimation, about VND105.9 trillion (US$4.977 billion) of bad debt was settled during 2012 and the first 10 months of this year.

The bank said the interest rate in 2013 was kept stable, increasing only 1% against the forecast rate of 1-3% at the beginning of the year.

40 tonnes of Banh Chung for overseas Vietnamese

A private enterprise in Dong Nai province is going to export 40 tonnes of Banh Chung– a traditional Lunar New Year (Tet) savoury – to overseas Vietnamese all over the world.

Vietnamese people will celebrate the Tet holiday in more than a month’s time.

Tran Thanh Toan, head of Tran Gia Banh Chung enterprise based in Bien Hoa city, says his enterprise exports 35 tonnes of Banh Chung and five tonnes of traditional phrynium wrapping leaves to the US, Europe, and Canada annually.

Banh Chung for export can be kept as long as six months and served after several minutes of microwave oven cooking.

Can Tho targets 12.5% GDP growth

The Mekong Delta city of Can Tho is targeting a 2014 gross domestic product (GDP) of VND87.5 trillion, the equivalent of a 12.5% growth rate from 2013.

The Municipal People’s Committee announced the target as part of the 2014 local economic development plan released on December 17.

Municipal Planning and Investment Department Director Nguyen Van Hong said achieving the ambitious target will require provincial economic development programs to focus on infrastructure construction, industry, trade, and services.

The city will begin land and water transportation projects, bolster local electricity and water supplies, upgrade market and supermarket networks, and improve industrial park infrastructure in response to investors’ demands.

It will also support the development of its rice processing industry and aquaculture, and encourage an export industry shift away from raw materials to higher added value products.

Can Tho will encourage industrial energy efficiency measures, and look to create the industrial clusters that support added value chains and better international competitiveness.

 In 2014, the city expects to produce 325,000 tonnes of seafood, 4.6 million tonnes of rice, 37 million garments, 9.5 million pairs of shoes, 140,000 tonnes of fertilisers, and 1.1 million tonnes of cement. It expects to bring the value of provincial industrial output to VND97.6 trillion, or 39.3% of the provincial economy as a whole.

Can Tho will expand its wholesale and retail networks along with the “Vietnamese buy Vietnamese goods” campaign, support businesses in trade promotion both at home and abroad.

The city aims to raise its key export value of rice, seafood, garments, footwear, iron, steel, handicrafts, and pharmaceuticals to US$1.65 billion in 2014 or 10% higher than in 2013.

Can Tho will continue advertising local tourism in conjunction with other Mekong River Delta provinces, aiming for a 4% increase in visitor numbers, or a 2014 total of 1.3 million tourists.

Vietnam-China trade to hit US$50 billion this year

With an average growth turnover reaching 35.9% from 2010 to 2012, making up a proportion of 33.9 % of Vietnam’s export turnover, China is still one of Vietnam’s key markets for farm produce.  

This was confirmed by the Asia-Pacific Market Department under the Ministry of Industry and Trade (MoIT).

Vietnam’s key agricultural products to China include fruits and vegetables, cashew nuts, coffee, tea, rice, rubber, and cassava. Last year’s export turnover of these commodities to China rose 17.37% to more than US$4.33 billion. Especially, rice and coffee rose sharply in both volume and value.

China is Vietnam’s leading trade partner with bilateral trade turnover reaching US$41.1 billion in 2012.

Two-way trade turnover reached US$41.07 billion in the past ten months and is likely to hit roughly US$50 billion by the end of 2013.

At the eighth session of the China-Vietnam Economic and Trade Cooperation Committee held in Hanoi in April 2013, the MoIT and the Chinese Ministry of Commerce signed a memorandum of understanding on bilateral cooperation in agricultural exchange with the aim of creating a stable and transparent legal environment for Vietnam’s farm products to penetrate the Chinese market.

Myanmar supposed to be a strategic partner in exporting rice

Vietnam should have a strategy for rice cooperation with Myanmar, according to the Asia-Pacific Market Department under the Ministry of Industry and Trade.

The department said that there are some opinions that Vietnam is unwilling to promote cooperation in technological transfer with Myanmar as the latter might become a competitive rival in exporting rice.

The department said that this is not a long-term viewpoint as it will only put Vietnam in a position to compete rather than cooperate with Myanmar for mutual benefits. In fact, Myanmar is a major agricultural nation that is more potential than Vietnam in the field.

Therefore, in the long-term, Vietnam should have a long-term strategy for cooperation in agriculture and rice exports for mutual benefits, turn Myanmar from a competitive rival into a strategic partner.

Myanmar’s open-door policy has encouraged many nations to develop relations with the country.

Many economists predict that Myanmar will become a major rice producer and exporter in the near future.

Hitachi eyes Vietnam’s railway sector

Hitachi, the Japanese maker of railcars, electronics and machinery, considers Vietnam as one of markets for rail orders.

Hitachi President Hiroaki Nakanishi said that the group is still considering a new plant in Germany or expand the factory that it is under construction in the UK.

He said that they will work hard to win rail orders from Sweden, Vietnam, India and Brazil.

The group needs new orders abroad as the demand for new railroads in the UK has dropped in recent years.

Export growth rate expected to reach over 10% in 2014

The establishment of ASEAN community by late 2015 and the signing of the Trans-Pacific Partnership (TPP) and other Free Trade Agreements (FTAs) with the EU, the Customs Union of Russia, Belarus, and Kazakhstan in 2014 will pose both opportunities and challenges for Vietnam and its trade sector.

The statement was made by Minister of Industry and Trade Vu Huy Hoang at a December 16 meeting with the Minister-Counselors, and trade counselors of Vietnam’s trade offices abroad in Hanoi as part of the 2013 Commercial Counselor Conference.

The Ministry of Industry and Trade (MoIT) has devised some concrete orientations for the sector’s development in the coming year, he said.

Minister Hoang said the target for industrial production-construction is set at 6.4-6.6% to ensure the link between domestic production and foreign marketing.

It is important for the country to develop potential industries including support services for agricultural and rural development such as clean energy, renewable energy, and bio-industry production using intensive labour.

Prioritys will be given to investment in the areas of energy, mining, chemicals, oil and pharmaceutical chemistry to reduce imports and increase the competitiveness and added value of products.

Hoang said that trade development should be closely associated with its sustainability and contribute to improving competitiveness of the national economy.

To promote exports, the MoIT has identified new commodities based on basic and high technologies to meet the consumer market demand in the world as defined in Vietnam’s export strategy. He proposed focusing on exporting seafood, farm produce, garment and textiles, and electronics.

The focus will be on developing markets for competitive and high added-value products or groups of items with a high proportion of turnover. So, it is important to seize new opportunities arising from international economic integration to promote exports to the US, EU, Japan, China, the Republic of Korea, ASEAN, India and other potential markets such as Russia, Eastern Europe and Latin America.

Minister Hoang said that next year’s import surplus should be maintained at 6% or a lower level compared to that of export earnings by importing only hi tech goods which local businesses cannot produce at a competitive price instead of luxury commodities.

Vietnam should continue to limit imports as a protection against domestic production in accordance with its international economic integration’s commitments within the framework of FTAS.

It should also strive to achieve a growth rate of 14% in terms of total retail sales revenue and domestic service turnover, Hoang added.

Quality focus lowers 2013 lending: central bank

Lending this year rose only 8.8 percent against that at the end of 2012, and lower than the 12 percent growth target set by the State Bank of Vietnam.

Speaking at a press conference in Hanoi on December 16, SBV deputy governor Nguyen Dong Tien said these numbers remained optimistic, since lending in VND increased significantly while that in USD declined, as targeted by the central bank.

Additionally, the high increase in medium- and long-term lending helped firms meet their long-term investment demands, Tien said.

He added that this year's lending was largely demanded by those in the production and businesses sectors, especially priority industries, where lending to agriculture and rural development rose 24.51 percent and support industries was up 10.84 percent.

Tien said that though the central bank set a yearly credit growth target, it could also make adjustments to ensure the quality of credit and avoid rising bad debts.

Previously, SBV Governor Nguyen Van Binh, at November's National Assembly meeting, said he expected that credit growth this year would meet the 12 percent annual target, explaining that lending often sharply surged in the final quarter.

Securities authority to tighten stock market monitoring

The State Securities Commission (SSC) has said the restructuring and supervision of the stock market would be improved next year to ensure the market's transparency and efficiency in operating.

Minister of Finance Dinh Tien Dung said at SSC's meeting last week that the commission would focus on solutions to expand the scale of operations and improve the market's quality, according to Vneconomy newspaper.

SSC's statistics showed that the stock market maintained growth so far this year, reflected through increases in the benchmark indices.

The VN-Index on the Ho Chi Minh City Exchange rose 22 percent, in comparison with the end of last year, while the HNX-Index in the Hanoi Stock Exchange was 13 percent higher. The increases in benchmark indices placed Vietnam among the 10 countries with the strongest stock market recoveries in the world.

Also, the market capitalisation reached 964 trillion VND (45.9 billion USD), an increase of 199 trillion VND (9.47 billion USD), equivalent to 31 percent of the country's gross domestic product (GDP).

Meanwhile, the average trading value reached 2.578 trillion VND (123.190 million USD) each session, representing an increase of 31 percent over last year, mainly thanks to the transactions of Government bonds, which witnessed a rise of 90 percent to 1.257 trillion VND (59.85 million USD) per session.

The stock market also attracted many foreign investors, with registered accounts rising about 55 percent.

Dung said enacting the restructuring of the stock market, which was approved by the Prime Minister, must be quickened, focusing on enhancing its quality, financial capacity and management capacity.

In addition, the management and supervision of the market must be improved, as the stock market becomes more developed and sophisticated, to ensure transparency and a market that remains healthy.

Pham Hong Son from SSC also said that the commission would determine how to eliminate weak securities companies through acquisitions, mergers or dissolutions.

More than 60 percent of securities companies reported losses this year, which is slightly less than last year.

Tien Giang enjoys export surge

The Mekong Delta province of Tien Giang has enjoyed a 16.7 percent year-on-year rise in exports, exceeding one billion USD this year despite a difficult economic situation, a provincial official has said.

According to Dang Thanh Liem, Director of the Tien Giang Department of Industry and Trade, the result, which surpasses the province’s yearly target by 10.38 percent, is an important force speeding up its exports in following years.

Domestic firms contributed 54 percent of the total, while foreign-invested ones made up 46 percent.

Local enterprises shipped abroad 134,220 tonnes of aquatic products for 284 million USD, over 19 million pairs of shoes for 180.22 million USD and nearly 20,000 million clothes items for 211.95 million USD.

Liem attributed the rise to the firms’ efforts in trade promotion and market expansion. Exports to the Asian market account for 33.5 percent of Tien Giang’s total revenue, followed by the EU, America and Oceania.

In the future, the province will continue enhancing trade promotion and support local enterprises to extend their distribution channels, broadening markets and step up exports. The locality will also increase its engagement in trade fairs in and outside the country, he added.-

Vinalines seeks public aid for restructuring plan

The Vietnam National Shipping Lines (Vinalines) has asked the Government to adopt preferential policies to help domestic shipping fleets overcome difficulties, according the online Vietstock newspaper.

In a report sent to the Party Central Committee's Economic Commission, Vinalines asked the Government to direct banks and credit institutions to extend its debt limit and reduce loan interest rates in an effort to help it successfully carry out the restructuring plan approved by the Prime Minister early this year.

Vinalines General Director Nguyen Canh Viet said he expected State-owned banks to lend floating capital to shipping businesses, which are facing difficulties, during the 2013-15 period.

For his part, Minister of Transport Dinh La Thang said in a recent question-and-answer session with National Assembly deputies that Vinalines had restructured a debt of 7.855 trillion VND (374 million USD) at the Vietnam Development Bank and 20.412 trillion VND (972 million USD) at other credit institutions.

Vinalines also proposed the Government reduce taxes, including value-added taxes and import taxes for ships, and exempt the value-added tax of 10 percent for shipbuilding projects which are designed for international maritime transport.

To increase its market share in transporting export and import goods for the Vietnamese shipping fleet, Vinalines has asked the Government to reserve the right of transport of import and export goods, which are the country's natural resources paid by the State budget, for the national shipping fleet.

At the same time, it is necessary to exempt and reduce a number of taxes and fees at the country's seaports until the maritime transport market has recovered.

Vinalines also asked the Vietnam Social Insurance Corporation to allow shipping companies to delay paying debts from social insurance, health insurance and unemployment insurance from 2012 and previous years.

"In the context of the world economy's degradation, most ship owners have been suffering large losses. If there is no support from the Government, many companies will become bankrupt and incapable of refunding the banks," said the report.

For example, Vinalines Rubi, with a loading capacity of 1,800TEU, suffered a loss of about 16,000 USD per day because payments for its freight were not enough to compensate for costs. Similarly, Inlaco Express earns about 5,000-7,000 USD per day, on average, while its daily costs have increased to 14,000 USD.

In spite of the many long-term difficulties and challenges, Vinalines reported promising signs from maritime logistics services, as nearly 32 logistics businesses have become profitable.-

HCM City firms prepare for Lunar New Year surge

Despite the economic situation, companies and traditional village-based producers are making all efforts to meet the usual surge in demand during Tet (the Lunar New Year) and improve quality and design, a Ho Chi Minh City official has said.

Le Ngoc Dao, deputy director of the Department of Industry and Trade, said at a seminar on new Vietnamese products and special features for the longest and most important yearly festival: "With higher quality, Vietnamese products have met the increasing demand of consumers and gradually competed with imports."

Around 20 firms like Vissan, Pham Nguyen Bakery, An Giang Fruit-Vegetables and Foodstuff Joint Stock Company, Sai Gon Food, Phu Le Wine JS Company, and Hanh Phuc Fish Sauce Company displayed many new products they plan to produce for Tet.

They assured adequate supply besides promotions to meet customers' needs during the festival.

Phan Van Dung of Vissan, one of the country's biggest meat processing firms, said production for Tet had begun as long ago as June to ensure enough supply so that prices remain stable until after the festival.

"Along with supermarket chain Co.opmart, his company would slash meat prices on the last two days before Tet – which falls on January 31 this year – to enable poor people to buy since prices spike at traditional markets on those days," he said.

Le Thanh Truc of Phu Le Wine JSC said local specialities like traditional wine are very popular during Tet.

The company would unveil many ne w designs for gifts during the New Year, she said, adding that it plans to increase supply 10-fold to avoid a shortage like last year.

Sai Gon Food also plans to increase supply this year after a shortage last Tet, Le Thi Thanh Lam, the company's deputy general director, said.

Tran Thai Ha, managing director of the Binh Duong branch of Huu Nghi Food JSC, said the company would supply 5,000 tonnes of confectionery in the south during Tet, expecting sales to increase by two or three times.

Nguyen Thanh Nhan, deputy general director of Sai Gon Co.op – which owns Co.opmart – said: "Demand is expected to increase by 10-20 percent over last Tet."

Sai Gon Co.op's supply of essential goods during the New Year will increase two- or three-fold over the normal time.

It will organise 150 mobile sales trips to rural areas and industrial parks and hopes to sell goods worth more than 20 billion VND (almost 1million USD).

Apart from selling essential goods at 10 percent less than market prices under the city's price stabilisation programme, Sai Gon Co.op will also cut prices of other products by 10-50 percent in co-operation with suppliers just ahead of Tet.

Domestically made products would continue to dominate the market due to their reasonable prices, Nhan said.

Dao said since supply would be ample, prices would not increase suddenly during Tet.

In any case, the department would monitor markets and severely punish hoarders and black-marketers, she said.

The conference was held in Ho Chi Minh City on December 16 by the High Quality Vietnamese Products Business Association, the Tuoi Tre newspaper, and Co.opmart as part of a programme called "Vietnamese Tet-Vietnamese goods".

Central Highlands localities join to lure investment

Five Central Highlands provinces agreed to foster connectivity in investment promotion, disbursement in pledged investment capital and social welfare practices during a December 16 conference in Lam Dong province.

Accordingly, the localities will organise investment promotion in a direction of boosting regional linkage, strengthening tourism cooperation and building long-term strategy to attract investment to the region.

The provinces will also work close with the Investment Promotion of the Central Region and other domestic and foreign agencies to support investors to explore investment opportunity in the region.

Besides, they will strengthen their investment promotion activities overseas and conduct roadmap shows in European Union, the US and Japan with a hope to lure investment wave from the European Union, the US and Japan .

Five Central Highlands provinces include Dak Lak, Dak Nong, Lam Dong, Gia Lai and Kon Tum. The region’s per capita annual income increased from 2.9 million VND in 2001 to 26.9 million VND in 2012.

During the second conference on investment promotion in the region in Pleiku city, Gia Lai province on April 12, Minister of Planning and Investment Bui Quang Vinh said the region needs about 400 trillion VND (18.8 billion USD) for development for period 2011-2015.

After the first conference in 2009, investors have poured over 90 trillion VND into the region.

Since 2005, the region attracted over 192 million USD in official development assistance with the focus on agriculture and rural development, poverty reduction, urban infrastructure, transport, education, training, healthcare and irrigation.

By the end of March this year, the region lured 169 FDI projects with a total registered capital of 900 million US.

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