Firms welcome lending interest rate cuts  

In the past year, high interest rates had forced several businesses to walk on thin ice, or even run at a loss and face bankruptcy, but with the very first signs of interest rate cuts, local firms hopefully will have a better chance in resurrecting their operations.

Joint Stock Commercial Bank for Foreign Trade of Vietnam or Vietcombank has lately decided to lower lending interest rates with an average cut of 2 per cent per annum, starting February 9. Particularly, it cut lending interest rates in Vietnamese dong for short-term trade, and service loans to 17 per cent per annum, short-term manufacturing loans to 16.5 per cent per annum, and short-term export loans to 16 per cent per annum.

Earlier, Bank for Investment and Development of Vietnam announced interest rate cuts for short-term loans in Vietnamese dong to 14.5-15.5 per cent per annum, starting from December 19, 2011 to support export, agriculture and rural development, and small and medium businesses. This was the fifth consecutive time in the last four months in 2011 that BIDV lowered Vietnamese dong lending interest rates.

Vietcombank and BIDV have become the first two big lenders leading in interest rate cuts to help local businesses. In the situation when several firms are struggling with high interest rates, this movement of lenders is expected to help ease the burden that firms have been carrying for more than a year.

Preliminary estimates show there are around 570 companies out of 694 companies listed on two stock trading floors which had already released their financial reports for the fourth quarter of 2011. Of which, 55 companies suffered losses, while 60 per cent of them saw a slump in profits.

Real estate companies are the typical business group that suffers high bank interest expenses. For instance, Sacomreal’s interest costs on separate financial report in 2011 reached VND250 billion while net revenue was just around VND532 billion. Meanwhile, accumulated loss of Kinh Bac City Development Share Holding Corporation (KBC) was more than VND52 billion in 2011. The company’s interest expenses surged to VND252.5 billion, whereas net revenue was VND88 billion. In reality, some firms bore much higher interest costs than what showed on their financial reports. This showed that high interest rate is truly a horrible burden that enterprises have had to carry for a long time.
 
In a resolution promulgated on February 8 this year, the government has entrusted the State Bank of Vietnam to collaborate with relevant units to implement measures to support and encourage financial institutions to set priority of capital to some sectors and find some solutions to improve liquidity of the banking system in the first quarter of this year. The government also ordered the central bank to closely watch the situation in order to instantly reduce credit interest rates at a reasonable level at a suitable time.

Many companies expected that other credit organisations would lower their interest rates, following Vietcombank and BIDV. The foundation for rate cuts was supported by many macro factors, such as: inflation rose nearly 1 per cent in January, much lower than previous years. Moreover, the National Financial Supervisory Commission forecast that the country’s inflation can be controlled at 8-9 per cent this year and around 6-7 per cent by 2013. If inflation can be reduced to one digit, it will be the solid foundation to carry out the government’s policy to lower interest rates.

Thus, if banks cut their rates soon, businesses will have more chances to revive their operations. Not only interest cost decrease but firms will also easily access capital to expand their business.

Beside optimistic points of view, concerns that banks are still not able to reduce their rates immediately due to lingering tension inside the banking system, high inter-bank interest rates will remain. In addition, bank restructuring also prevents rates from lowering instantly.
 
Stock market thirsty for new cash flow

The thirst for new cash flows on the local equity market is seen extending this year as newly-issued policies have yet to open channels wider for securities investment while the current flow is still stagnant, stock brokers said.

The central bank has just released Directive 01/CT-NHNN, under which it continues grouping stock investment and trading into the list of non-productive sectors whose credit growth is capped at 16% of total outstanding loans like last year.

Vu Bang, chairman of the State Securities Commission (SSC), said the authority earlier had proposed the central bank moving securities out of the non-productive group to seek funds for the stock market.

Bang, meanwhile, supposed that the central bank does not reduce credit growth rate for non-productive industries including stocks is a positive decision at this time. However, this means local banks’ role in supporting the stock market remains limited in the coming time.

A number of securities enterprises cited the vague role of bank loans in a strong increase of some 20% of VN-Index over the past months. This situation is understandable, as these firms explained, because multiple lenders still avoid lending to securities investors while the latter still shy away from loans at steep rates of 22-25% annually.

In reality, several securities enterprises have offered collateral loans in an effort to woo investors, but this move has got no significant achievement. In the meantime, the capital flow on the market in recent months has mainly come from investors with deep pockets.

Therefore, it is believed that the central bank’s new regulation will cause no substantial positive impact on the stock market in terms of attracting new funds.

Nguyen Hong Nam, deputy director of Saigon Securities Inc. (SSI), said there were few large stock trading companies using their own capital or money funded by associate banks to lend investors.

Phan Dung Khanh, head of the analysis department of Kim Eng Securities Co., said funding on the market is mostly from gold and foreign currencies from speculators who were shifting to securities investment in the hope of earning bigger profits from securities.

Without any effective support from macroeconomic policy changes, Khanh pointed out, this money flow is obviously unstable.

Nam of SSI revealed there were no big foreign investors opening new accounts at his company and that the money flow from this sector showed no considerable change.

Argentina, Vietnam boost technological cooperation

An Argentinean delegation will visit Vietnam from February 18-22 to seek investment opportunity in the technology sector.

The delegation includes leaders of the Foreign Ministry, the Science and Technology Ministry and the National Council for Scientific and Technical Research (CONICET), as well as representatives from 15 organizations and businesses operating in the field of biology, new medicine, veterinary products, nano technology, intellectual property, ornamental plants, and food stuffs technology transfer.

This is the first visit organized by CONICET to study the Asian markets, including Vietnam, China and Singapore.

Established in 1958, CONICET specializes in four major fields - agricultural science, medicine technology, precise and natural science, and social and humanitarian science.

Property firms see profits dwindling to zero

Most property companies saw their profits last year declining almost to nil compared to the previous year as the gloomy market continued to adversely affect their operations.

A sharp revenue drop and a build-up of unsold products caused by weak demand in the apartment segment coupled with rising borrowing costs have led to the poor business results of realty firms.

The market leader Hoang Anh Gia Lai saw its profit plunge by 89% year-on-year, from VND2.08 trillion in 2010 to VND224 billion last year. The group explained its subsidiaries no longer enjoy profits generated by the parent firm as the latter is now only in charge of management.

Sai Gon Thuong Tin Real Estate Company, better known as Sacomreal, recorded a loss of nearly VND40 billion in the final quarter of last year. The firm’s revenue from product sales and services in 2011 halved to VND540 billion from VND1.09 trillion in 2010.

Sacomreal’s profit was dragged down 83% to a mere VND80 billion last year, against VND485.5 billion in 2010.

Phat Dat Property Development Corporation was faring no better. The company in its financial statement reported its 2011 revenue totaled a mere VND127 billion, a drop of 92% from VND1.57 trillion in the year before. The company’s profit also dipped to VND4.5 billion, equivalent to some 1% of the level of VND331 billion in 2010.

With the loss of over VND225 million recorded in the last quarter of 2011, the year’s profit of House Vietnam Joint Stock Company dwindled by 96% against the previous year. Similarly, Dat Xanh Real Estate Service and Construction Corporation witnessed its profit decline by a half due to the loss of over VND16.5 billion in the last quarter.

The business results of ten property companies gathered by the Daily show that the combined profits of all ten huge firms in 2011 are still lower than the profit of Sacomreal alone in 2010 and far behind the profit of Hoang Anh Gia Lai in the same year.

Most realty firms ascribed their dismal profits to the continued difficulties faced by the market and poor sales of products, while financial costs, specifically interest rates, put more pressure on many enterprises.

For instance, Thu Duc Housing Development Corporation (Thuduc House) had to pay an interest sum of VND49 billion last year, a significant rise from VND11 billion in 2010. Sacomreal had some VND249.5 billion in loan interest payables in 2011, or an increase of 10% year-on-year.

Pressure of loan repayment, along with stagnant trade, has forced several property enterprises to discount their products in order to rev up demand as well as quickly recover capital to withdraw from the market.

Most real estate companies are now debtors to the banks. Therefore, to boost product sales to pay their debts is currently a big challenge to property enterprises.

In the outlook for the local property market this year, the analysts of VietCapital Securities predicted 2012 would be another tough year for the market given the liquidity crisis and property lending restrictions.

Market observers forecast the trend of project transfer would continue in 2012, and the market would hardly prosper as real estate credit is still tightened.

Vietnam targets US$12b in mobile phone exports

The annual value of mobile phone and component exports of Vietnam is forecast to hit US$12 billion by the end of 2012, according to the Ministry of Industry and Trade.

To meet the target, experts said Vietnamese exporters should attach importance to ensuring the quality of their products to protect brand names.

They should also expand trading to new markets.

By the end of January this year, Vietnam’s mobile and components export revenue reached US$850 million, up 0.8 percent over the previous month and 113.9 percent over the same period last year.

PCI 2011 to be released next week

The Vietnam Chamber of Commerce and Industry (VCCI) in coordination with the Vietnam Competitiveness Initiative (VNCI) will release the Provincial Competitiveness Index (PCI) 2011 next week in Hanoi.

According to VCCI, in addition to 7,000 private enterprises, the PCI 2011 survey also had the participation of nearly 2,000 foreign-invested enterprises (FIE) nationwide.

The Daily next week will provide the result of the PCI 2011 survey, opinions of local firms and FIEs on the business environment in Vietnam over the past year as well as analyses from the survey result.

PCI indicates the management quality of provinces in correlation with the development of private firms. Besides, the survey collects opinions of firms regarding the business environment in each province.

In the PCI 2010 ranking, the top three positions went to Danang City, and Lao Cai and Dong Thap provinces with 69.77, 67.95 and 67.22 points respectively. Meanwhile, HCMC only ranked 23rd and Hanoi ranked 43rd in the survey result.

EU diplomat pledges to expand EU-VN ties

The Head of the European Union Delegation to Vietnam, Franz Jessen, has stated he will make every possible effort to strengthen ties between Vietnam and the European bloc.

At a press conference in Ho Chi Minh City on February 14, Jessen said many EU businesses operating in Vietnam see the country as a market with huge potential.

In 2011, the EU and Vietnam renewed their cooperation agreement, which was first signed in 1995. 2011 was also a fruitful year for bilateral economic cooperation as Vietnamese exports to the EU reached US$16.5 billion, a year-on-year increase of 45 percent.

According to the diplomat, the EU and the Vietnamese government have held a series of seminars on the Free Trade Agreement (FTA) at working level and are now going to hold more at ministerial level. He noted that the signing of the agreement will benefit the two economies.

Jessen also advised Vietnam to improve its investment environment in order to attract more foreign businesses, not only those from the EU.

Ministry ponders cut in gas tax
 
Minister of Finance Vuong Dinh Hue told a conference here on Tuesday that the ministry is considering whether to cut the import tax on cooking gas in order to assist gas distributors to lower retail prices.

Hue said the ministry's tax policy department had promoted cutting the tax even before the Government Office received the recent letter from the Viet Nam Gas Association (VGA) urging import taxes be lowered from 5 per cent to 2 per cent. The Government Office has formally forwarded the letter to the ministry for consideration.

He noted that the 5-per-cent rate had only been applied since the beginning of the year, while Europe has suffered a severe winter which could drive heating oil and gas prices higher.

Any adjustment would therefore be based on long-term policy goals and would take into account the impact of gas prices on other goods, Hue said.

The minister said the finance departments in HCM City and Ha Noi had begun auditing operations of gas companies to clarify whether recent retail price hikes were appropriate and justified in the context of global prices.

The director of the ministry's price management department, Nguyen Tien Thoa, said the investigation aimed to clarify rising gas prices over the past few months, and Thoa noted that five of the seven gas distributors had already been investigated.

VGA chairman Ho Sy Thang has long urged a reduction in import taxes to help gas retailers get out of difficulties, noting that the VGA has made three proposals to the ministry and the Prime Minister since 2010 to reduce import taxes from 5 to 2 per cent, saying the change would help stabilise prices and curb inflation.

VGA general secretary Tran Van Thanh said the associations'280 members would reduce prices if the lower tax were approved.

The ministry, however, has countered that the higher tax rates were necessary to slow imports at a time of rising global prices.

PetroVietnam Gas and Saigonpetro Gas last week cut gas prices by VND12,000 (US$0.60) per 12kg canister.

ACB bank launches foreign trade financing program

Ho Chi Minh City-based Asia Commercial Bank (ACB) has kicked off a five-month credit program to support exports and imports, focusing on rice, fisheries, cashew nuts, petrol, plastics, steel and some other products.
 
The non-State bank says it sets aside up to $100 million for the program, designed to provide soft loans to exporters and importers in Vietnam between this month and the end of June.

ACB adds that in addition to interest rates that are lower than its normal rates, the program includes other benefits such as financing for exports before delivery can be up to 98 per cent of the letter of credit value; and financing for imports after delivery up to 100 per cent of the value of the set of documents.

Meanwhile, financing for import payments can be up to 100 per cent of the value of the shipment.

The financing program accepts various methods of payment such as Letter of Credit, Document against Payment, Document against Acceptance, Telegraphic Transfer, and Cash against Document.

In related news, ACB on Feb. 15 launched a transaction office on Pham Ngoc Thach Street in Ho Chi Minh City’s District 5 as the bank’s 327th unit nationwide.

Under a national export import strategy for the period 2011-20 signed by Prime Minister Nguyen Tan Dung, Vietnam’s total exports by 2020 are expected to increase by three times against an export value of $71 billion in 2010, ensuring balanced trade.

The strategy focuses on four commodity groups: fuel and minerals, agro-forestry and seafood products, processing and manufacturing items; and new and high value-added products.

Five southern provinces co-operate on distribution

The country's five south-eastern provinces should review zoning plans to make it easier to distribute Vietnamese goods, a Government official said.

Le Viet Nga, deputy director of the Domestic Market Department, told a conference organised by the High Quality Vietnamese Products Business Association and Ba Ria-Vung Tau Province on Tuesday that the provinces should offer incentives to develop their trading infrastructure.

The provinces are Ba Ria-Vung Tau, Binh Duong, Binh Phuoc, Dong Nai, and Tay Ninh, and the event was the first activity under an agreement the association signed last month with their industry and trade departments to help businesses expand in the region.

Nga also called on the five provinces to establish close links with local producers to set up an efficient distribution system for locally-made goods.

Vu Quoc Chinh of the HCM City-based Business Study and Assistance Center said the region, with a higher income than other regions, is a promising market for Vietnamese goods.

Its total retail goods turnover in 2010 was an estimated VND162.77 trillion (US$7.79 billion), accounting for 10.5 per cent of the country's total.

But despite its potential, not many local producers have agents or shops there, Chinh said.

Vu Kim Hanh, chairwoman of the High Quality Vietnamese Products Business Association, said traditional markets are the main distribution channel in the region, but since local firms do not promote their products at these markets, the ratio of Vietnamese goods they sell remains very low.

Tran Ngoc Thoi, deputy chairman of the Ba Ria-Vung Tau Province People's Committee, said a scattered distribution system and lack of co-ordination among localities has meant the region's retail sector has failed to meet its potential.

Delegates listed the difficulties in penetrating this market, including a shortage of market information and poor distribution system.

Besides, they hesitated to take their products to the traditional markets because they had too many shortcomings like poor infrastructure, lack of hygiene, and selling of dubious products. To increase sales of Vietnamese goods at the traditional markets, delegates agreed that besides improving infrastructure, provincial authorities and enterprises should also pay more attention to improving small traders' sale skills.

Binh Duong licences four new projects

The southern province of Binh Duong yesterday granted licences to four new investment projects worth a combined US$174.7 million.

Among these projects was a $160 million tyre production factory, expected to supply one million of products each year, a Singapore-invested breeding project capitalised at $8 million and two other foreign-invested projects involved in wooden goods and construction materials.

Meanwhile, it also approved four existing projects increasing their levels of capital by $133 million.

The province would continue to foster administrative reforms, improve infrastructure and the quality of human resources to better facilitate investors, said the provincial People's Committee Le Thanh Cung during the yesterday ceremony.

Sun Steel Joint Stock Co general director Wada Yuji spoke highly on increasing assistance from the local authorities over past few years, saying that with these supports, the company decided to pump an additional $120 million to expand its production in the province.

In January alone, the province attracted eight new foreign-invested projects capitalised at $157 million and 65 domestically- invested projects with capital totalling VND3.5 trillion ($167 million).

The new addition has brought the number of foreign-invested projects to date to 2,000, totalling above $15 billion and almost 13,000 domestic projects worth VND95 trillion ($4.5 billion).

Ministry hardens its attitude on cement

The Ministry of Construction will temporarily delay work on several approved cement projects, said director of the ministry's Construction Materials Department Le Van Toi.

Projects must follow the cement industry development strategy for 2011-20, ratified by Prime Minister last year, and must also be agreed upon by the ministry's managerial body. Toi said the ministry had recently sent directives to the People's committees of cities and provinces nationwide to prevent the authorities from licensing new cement production projects.

The move was made because the ministry estimated there would be a large volume of cement in inventory. According to the Viet Nam Cement Association (VCA), the country's total cement output this year will reach 60 million tonnes, roughly 10 million tonnes higher than domestic demand.

The country has seen overzealous and uncontrolled investment in the cement industry for the past several years. The construction ministry reported there were currently 60 cement production plants nationwide.

Toi also noted that many cement producers were facing losses due to decreasing consumption and high interest rates.

"Many cement producers have had to borrow up to 80 per cent of their total investment capital and that eats most of their profits when interest rates remain high," Toi said.

Toi said the Thanh Liem Cement Plant in northern Ha Nam Province had to close its doors due to significant losses, though the plant has not yet declared bankruptcy. Many other plants have sharply cut their capacity from nearly 4 million tonnes to 2 million tonnes.

"If the situation continues, the number of cement plants that will have to shut down will surge in the near future," Toi said.

VCA's chairman Nguyen Van Thien urged cement producers to boost their trade promotion and export heavily this year to deal with the surplus. He expected that the producers could ship more than 7 million tonnes of cement this year, up 1.5 million tonnes from last year. Vietnamese cement is now exported mainly to China, Indonesia and Bangladesh, as well as several African and Southeast Asian countries.

Dragon Capital funds see assets rise 10%

The Net Asset Value (NAV) of two stock-invested funds managed by Dragon Capital rose over 10 per cent on the strong rebound of blue chips in January, according to company reports.

The NAV of Vietnam Enterprise Investment Ltd (VEIL) reached US$364.7 million by the end of January, an increase of 10.7 per cent over the previous month. As many as 69 per cent of the fund's investments were put in listed shares (blue chips), while promissory notes of food processor Masan Group (MSN) accounted for 18 per cent.

The NAV of Vietnam Growth Fund Ltd (VGF) rose 11.8 per cent to reach $191 million during the period. Its stock investment made up 71 per cent while promissory notes of Masan Group (MSN) occupied 25 per cent.

The market price of VEIL's fund certificates rose 4.7 per cent while that of VGF was up 2.1 per cent. Discount rates of the two fund certificates were 17-19 per cent.

Brokerage to buy 3m shares in bank

Sai Gon-Ha Noi Securities (SHS) registered to buy 3 million shares in the Sai Gon-Ha Noi Bank (SHB) while at the same time selling another 1 million SHB shares, the company announced.

Transactions, to be carried out from Tuesday until April 12, are aimed to restructure the company's investment portfolio. Currently, SHS is in possession of more than 16.7 million SHB shares, about 3.48 per cent of SHB's total shares. SHS is the SHB's securities arm.

Infrastructure firm set to issue bonds

The HCM City Infrastructure Investment Co (CII) will issue VND275 billion (US$13 million) worth of bonds this year to raise investment capital towards the construction of a bridge connecting Binh Thanh District and District 2, the company announced.

The 7-year bonds will pay an interest rate of 15.2 per cent per year and come with the option of buying shares in the Sai Gon 2 Bridge Construction co, in charge of operations, at a price of VND10,460 per share.

CII also announced it will advance 2011 dividends for existing shareholders in the form of cash at a rate of 18 per cent. The company has targeted earning VND594.6 billion ($28.3 million) in revenues and VND282.7 billion ($13.5 million) in net profits during 2012.

Dong Phu Rubber posts $2m profit

The Dong Phu Rubber Co (DPR) reported earning revenues of VND121 billion (US$5.8 million) and net profits of nearly VND4.1 billion ($2 million) in January this year.

Results indicated a decline of 49 per cent in revenues and 65 per cent in profits year-on-year, respectively.

The company harvested nearly 1,400 tonnes of rubber latex last month, down 31.6 per cent year-on-year. Sales volume also declined 35.2 per cent to just 1,711 tonnes at an average price of VND69 million ($3,300) per tonne.

This year, DPR has targeted earning revenues of nearly VND1.52 trillion ($72.3 million) and pre-tax profits of VND527 billion ($25 million).

Dong Nai looks to curb tax evasion

Some foreign-invested enterprises in southern Dong Nai Province have allegedly been involved in trade fraud and tax evasion by transferring prices and making false financial reports to dodge corporate income tax.

To prevent the transfer pricing, Dong Nai Department of Taxation has asked the Ministry of Planning and Investment to conduct a project to limit and minimise the transfer price of foreign-invested companies throughout the country.

Dong Nai Department of Taxation inspected three of the 10 foreign-invested enterprises in the province, including Taiwan-invested Hualon Textile Corp Viet Nam Company, Taiwan-invested Choongnam-Viet Nam Textile Company Limited and Korea-invested Changsin Vina factory.
 
More garments, textiles to China

Viet Nam's garment, textile and footwear export turnover to China saw high growth last month but decreased in most traditional markets.

According to the General Department of Viet Nam Customs, January's export turnover of garment and textile products reached more than US$1 billion and footwear items stood at $544 million, down 12.2 per cent and 1.4 per cent respectively over the same period last year.

China is currently the largest supplier of raw materials for Viet Nam's footwear sector. In January, Viet Nam imported $166.8 million worth of fabric, with China making up $57.5 million of the total.

VN one of most promising frontiers

Viet Nam takes the lead among the top 15 Most Promising Frontier Markets in the world, according to a recent edition of Bloomberg Markets Magazine.

The assessment and analysis of global markets was based on the following criteria: investment environment, GDP growth, public debt and advantages for business.

Among the less developed economies that have yet to achieve emerging status, Viet Nam was the only East Asian country to be listed, reported the magazine.

The United Arab Emirates came in second place while Bulgaria and Romania tied for third place.

Viet Nam made the list primarily because of its rapid GDP growth, which is expected to exceed 3 per cent by 2016, a rate that rivals China and India.

Nation advises African states on urban growth

African countries want to learn from the experiences of Viet Nam in urban development at a four-day international seminar held yesterday in Ha Noi.

"Like many other countries in the third world, African countries have experienced specific urban growth, due to the nature of the urbanisation process, it often involves young populations, an anarchical nature of settlement, a lack of investment and poor management and implementation," said head of the African delegation Samba Diouf.

Diouf added that important experience from countries like Viet Nam would help African countries improve the ability to deal with their own urban development.

"Participants agreed that Asian and African countries were facing common and complex urban problems and prompt action under strong government initiatives were required to cope with these problems," said Hisatoshi Okubo, chief representative of the Japan International Co-operation Agency's Senegal Office.

The event was co-organised by the JICA in co-operation with the Ministry of Construction and the Viet Nam Urban Development and Planning Association.

At the event, participants heard about remarkable achievements in urban planning and management in Viet Nam and discussed current urban planning problems facing African nations.

Delegations heard that Viet Nam currently faces rapid urbanisation, population growth, an increasing gap between rich and poor, insufficient infrastructure and social services, traffic congestion and flooding issues.

"Facing the same challenges and difficulties, what Viet Nam has learnt today will be a great help to African countries in planning future development," said vice director in charge of Ha Noi Architecture and Urban Planning Bui Manh Tien.

Fully aware of the above issues, the Government of Viet Nam has developed sustainable economic development policy, with a focus on green economic development.

Viet Nam also encourages localities to actively conduct studies and exchange learning experiences with other countries about models for urban development and management.

According to the Viet Nam Urban Development and Planning Association, Viet Nam has set the highest pace for urbanisation in Southeast Asia, increasing from 19 per cent in 1986 to 30.5 per cent in 2010. As of 2010, there were a total of 755 cities and towns in Viet Nam.

The seminar is a follow-up event linked to another seminar organised by JICA in Senegal in November 2011, which aimed to share experiences of urban development and planning issues among Asian and African countries.

Today, the African delegation, with representatives from the Ivory Coast, Ghana, Mali and Senegal will visit Linh Dam, known as a good example of urbanised land in Viet Nam. They will also have a technical tour of Nam Son Waste Treatment Facility in the Soc Son suburban district of Ha Noi.

Ministry to start work on expressway by December

The Ministry of Transport has targeted the beginning of construction on the Da Nang – Quang Ngai Expressway at the end of the year.

Construction on Da Nang – Quang Ngai expressway, which runs from Da Nang City's Hoa Vang District through Quang Nam and to Quang Ngai's Ring Road, was to begin in December. It is expected to be put into operation in 2016.

However, construction of the 130-km expressway has not begun because of a lack of investment capital.

The expressway, which costs nearly VND28 trillion (US$1.47 billion), will be built with loans from the World Bank and the Japan International Cooperation Agency.

On Thursday, Minister of Transport Dinh La Thang and his official group worked in Quang Nam and Quang Ngai provinces on the two provinces' major transport projects, including the expressway.

Dinh Van Thu, deputy chairman of the Quang Nam Province People's Committee, said the task of land clearance and compensation for the expressway in Dien Ban, Phu Ninh and Nui Thanh districts and Tam Ky City was implemented slowly because of capital shortage.

The province has been allocated only VND26 billion ($1.2 million) of VND1.8 trillion ($86.3 million)for the task, he said.

Thang said the expressway investor was waiting for loans from the World Bank and the Japan International Cooperation Agency.

However, the ministry will soon have measures to speed up the procedures of building the expressway so that construction can begin at the end of the year.

He also pledged that his ministry would finish upgrading a section of National Highway No. 1A in Quang Nam and Quang Ngai provinces within the next four years.

Inspections to meet EU food safety standards
 
Inspections of fruit and vegetable producers would be conducted throughout the country in an effort to meet the European Union's regulations on plant quarantine and food safety, according to a message from the Minister of Agriculture and Rural Development, Cao Duc Phat on Tuesday.

The ministry wanted its Plant Protection Department to boost its dissemination work and issue guidelines to localities and exporters to ensure their products qualified for export to the EU.

The department will co-ordinate with the country's International Co-operation Department and the EU's authorised agency to solve any problems that arise concerning exports to the EU.

The examination was tightened after several batches of Vietnamese fruit and vegetables were recently reported to have contained a micro-organism that violated the EU's regulations on food safety and plant quarantine.

The European Commission's Directorate-General for Health and Consumers has reported that if they discovered five more violations as of January 5, they would issue an embargo on Vietnamese fruit and vegetable imports.

Chairmen of people's committees and relevant sectors in 63 cities and provinces were instructed to zone and develop fruit and vegetable growing areas in line with the Global Agricultural Organisation, a non-profit body which provides support to the agricultural community on an international level.

Customs clearance would be issued when the exporters were able to show plant quarantine certificates for their products, said Phat.

Well-processed coffee percentage increases

Well-processed coffee is expected to increase from 14 to 15 per cent of total coffee production of 400,000 tonnes in Dak Lak to achieve economic value.

The province has implemented a policy to limit raw berry coffee exports while increasing well-processed coffee and encouraging domestic and foreign investors to build powder and instant coffee factories with capacities from 700 to 1,000 tonnes/per year respectively.

However, the volume of well-processed coffee has remained low, covering only 7-8 percent of total coffee production each year.

At the moment, only 10 enterprises process large-scale powder and instant coffee including Trung Nguyen and An Thai etc.  The Trung Nguyen Coffee JSC has invested into building a factory to process powder and instant coffee with a capacity of up to 60,000 tonnes per year. Other companies such as Ngon Coffee and An Thai have completed construction on their factories and have begun test production.