VN30 rises slightly after revision
 
Shares continued to rise on the HCM City Stock Exchange yesterday with the VN-Index edging up 0.3 per cent over Tuesday's session to 418.83 points while the VN30 added 0.22 per cent to 494.11 points.

The HCM City Stock Exchange on Tuesday revised the 30 leading stocks by capitalisation and liquidity, tracked by the VN30. Accordingly, food processor Hung Vuong (HVG) along with three property developers – Quoc Cuong Gia Lai (QCG), Khang Dien House (KDH) and Sudico (SJS) – were deleted.

Additions were Military Bank (MBB), Da Nang Rubber Co (DRC), steelmaker Hoa Sen Group (HSG) and property developer Tu Liem Urban Development Co (NTL).

QCG and SJS were among around 20 stocks subject to warnings due to losses last year. QCG was excluded from the FTSE Viet Nam Index's investment portfolio in March, SJS faced serious financial issues. "The misuse of funds for improper purposes has created a potential for the company to become insolvent," SJS supervisory board said.

In addition, SJS, HVG and KDH had very low liquidity, average only 40,000-80,000 shares per session during order matching in the recent 10 trading days.

Meanwhile, MBB, DRC and HSG saw an average of over 500,000 shares matched. Notably, MBB is one of the largest stocks in terms of capitalisation.

However, it was the only one of the four new shares retreating yesterday, losing 0.7 per cent to VND14,200 (US$0.6) per share.

"Although the revision can be seen as a positive impact on the shares tracked by the index, in fact, small investors are not overly concerned with the VN30," said Kim Eng Securities Co analysts.

The overall value of trades on the southern bourse increased slightly to VND790.7 billion ($37.6 million), as trading volume reached 49.4 million shares.

Sacom Development and Investment Corp (SAM) was the most active code yesterday, with 3.2 million shares changing hands to end at its ceiling price of VND8,000 per share.

On the Ha Noi Stock Exchange, the HNX-Index closed 71.03 points, down 0.5 per cent from Tuesday's value, as losers outnumbered gainers 124-93.

Large-cap stocks slumped, with the HNX30 (tracking the 30 biggest shares by market capitalisation and liquidity on the Ha Noi market) down 1.18 per cent to stand at 134.63 points.

Trading value reached VND369.3 billion ($17.5 million) on a total volume of over 38.4 million shares.

VNDirect Securities Co (VND) was still the most active share nationwide with nearly 4.4 million traded.

There’s room for financial service growth in Vietnam: Nielsen

A global survey on investment behavior conducted by the market research firm Nielsen shows that financial services still have potentials to grow in Vietnam and the Asia-Pacific region.

According to the survey, 64% of Viet- namese consumers make investment transactions via online banking, though 77% of the respondents said they still conduct transactions at physical banks, so the growth potential remains large.

Regarding credit cards, 40% of the surveyed said they use cards to pay for dining-out, shopping and entertainment, while the majority 97% still uses cash for usual transactions.

The global online survey of Nielsen gathers opinions of more than 7,000 consumers on their investment strategies and financial habits.

The survey shows that 79% of the consumers make investment decisions and handles their personal financial problems on their own, without the help of professional financial consultants. This percentage is higher than other countries.

Meanwhile, 24% of the respondents said they often ask their friends, relatives and colleagues for advices, 5 points higher than the region’s average.

Topping the list of investment channels in Vietnam are gold, silver and other precious metals, chosen by 54% of the surveyed, followed by stock and foreign currency, 52% and 41% respectively.

According to the personal financial management (PFM) survey done in Vietnam in the first quarter, only 6% of respondents said they intend to invest in real estate and stock in the next 12 months, equal to a quarter of the same period last year. Meanwhile, 36% of survey participants said they want to start their own businesses in 2012, a sharp decline compared to 63% of the year-ago period.

The PFM survey, conducted among 600 people aged from 18 to 50 in Hanoi and HCMC, shows that consumers are looking for more secure investment channels. They choose to make deposits in Vietnam dong with high interest rates.

Some 41% of the respondents said they are using the services of the State banks, up 5 points against the fourth quarter last year. Meanwhile, the percentage of people using services at joint stock banks falls from 64% in the fourth quarter of 2011 to 58% in the first quarter of 2012.

Furthermore, according to the survey, 31% of Vietnamese people does not like risky investments, making Vietnam a country with a high percentage of prudent investors, versus 17% of the region.

Large-scale rice field model needs strong food traders

Efforts to deploy the large-scale rice field model to produce high-quality rice for export have been well on progress, but the scheme is still far from success given the absence of strong food traders, heard a seminar in An Giang last week.

Enterprises must be financially strong to ensure that the cooperation between them and farmers in deploying the large-scale rice field model pays off, said Le Van Banh, director of the Mekong Delta Research Institute, at the meeting on Friday.

He was speaking at an agricultural extension forum on the topic “Joint rice production under the large-scale rice field model” held in An Giang last Friday.

According to Banh, a large-scale rice field requires investment in seeds, agricultural materials, infrastructure such as drying plants and warehouses, and especially product consumption. However, most of the enterprises currently joining the model are of small and medium sizes.

Nguyen Tho, vice chairman of the Vietnam Plant Protection Association, said the businesses cooperating with farmers in developing large-scale rice field model are mainly plant drug producers, who do not specialize in rice trading. Meanwhile, rice trading companies are lukewarm to such cooperation.

The large-scale rice field model is said to be a prerequisite for sustainable development of the rice industry in the Mekong Delta. After a two-year pilot, the farming areas applying this model has increased, but the quality is not as high as expected.

“In the 2011 summer-autumn crop, 7,800 hectares of rice growing areas joined the model, meeting 93% of the plan (8,370 hectares), but in the 2011-2012 winter-spring crop, the figure increased to over 19,720 hectares, versus 18,880 targeted for the plan, meeting 104%,” said Le Thanh Tung, an expert from the Cultivation Department under the Ministry of Agriculture and Rural Development.

Tung informed the Cultivation Department is striving to raise the farming areas applying the large-scale rice field model to one million hectares in the coming time.

Although the large-scale rice field areas are constantly rising, Banh stressed such a figure is still very low compared to the huge potentials of this model.

“Over 20,000 hectares joining the model versus 1.6 million hectares of paddy produced each crop is too modest,” said Banh.

There are also cases of food traders refusing to respect rice consumption contracts signed with farmers, Banh added.

Huynh The Nang, vice chairman of An Giang Province, said the State had introduced many policies to develop the large-scale rice field model, such as offering incentives to enterprises investing in warehouses and factories. However, the targets have yet to be achieved.

“Therefore, the “quality” of the model is not fully promoted, despite the fact that farmers joining this model gain higher profits than others,” said Nang.

Furniture exporters plagued by tightened rules

Many furniture exporters in Ho Chi Minh City and the neighboring province of Binh Duong have failed to pass customs declaration on their exports due to a new regulation aimed at clarifying the origins of the wood from which the products are made.

Circular No 1 of the Ministry of Agriculture and Rural Development stipulates that wooden products must be approved by local park rangers prior to their shipment.

The new requirement was issued and took effect unexpectedly at the weekend, leaving exporters unable to seek approval on time, they complained.

Consequently, their shipments have been stuck at the customs agencies, building up fears that their reputation will be damaged as the exports will arrive late to their overseas customers, they said.

A representative of Phu Thien Phat Co told Tuoi Tre on July 16 that he is still unable to complete customs declaration for two 40-foot containers set for export to the UK, though the products arrived at Cat Lai port three days ago.

The products are all furniture made from oak wood imported from the US, according to Tran Van Man, who is in charge of completing export procedures for the company.

Man said his customers have begun to complain of the late delivery.

“We too are extremely concerned as the contract is worth as much as US$46,000,” said Man.

Phan Thi Thuy Hang, director of Khanh A Co, also said her shipments have been detained at Saigon Port for four days due to the lack of park ranger’s approval on the wood’s origin.

Hang said her facility does not make the products, but buys them from another manufacturer and only decorates them to export to another partner.

“We have all necessary papers to prove the wood’s origin, but without the very approval from park rangers, it is impossible for the goods to be shipped,” lamented Hang.

The company is now charged VND400,000 per each container on a daily basis, and Hang said the larger risk is that the company’s prestige may be destroyed for late delivery.

Hong Van Sang, import-export executive of Lam Thanh Co Ltd, said it is illogical that businesses have to seek certificates for their wood’s origin, as they already have to complete that procedure when importing raw wood materials.

Nine furniture exporters who have 13 containers being held in Cat Lai Port on Saturday filed a complaint to the Saigon Port Customs Agency over the obstructed export procedure.

In response, the customs agency said it has forwarded the petition to the city’s customs agency, which will work with the park ranger agency to handle the case.

Meanwhile, the Cat Lai Customs agency said it has strictly adhered to circular No 1 in refusing to approve the exporters’ customs clearance.

However, since exporters have complained, the institution said it will find ways to reduce damage for the businesses.

Locals return cheapies to Chinese traders

Hundreds of locals in Gia Nghia Town of the Central Highlands province of Dak Nong Tuesday flocked to the Tay Nguyen restaurant to return cooking utensils they had bought a day earlier from Chinese traders thanks to their poor quality.

A group of traders, including Chinese nationals, leased the restaurant on July 15 to run a customer conference and goods display.

It attracted local market-goers by offering them free pans, knives, and saucepans. The products bear labels stating that they were manufactured by Hoang Ha Co Ltd, based in Guangzhou, China.

After the day of free offers, the traders began to sell the products at discounted prices.

A pressure cooker was sold at VND1.6 million (US$76), with a knife set offered as a freebie, buyers told Tuoi Tre. A set including four cookers fetched only VND3.2 million.

The dirt-cheap prices proved appealing to local residents, sending hundreds of them to buy the utensils.

And it only took them one day to realize the real quality of the cheap products.

Nguyen Xuan Ngoan, head of the town’s economic police, told Tuoi Tre on Tuesday that the traders have produced false advertisements about their poor products to lure customers.

Police have made a report on Bui Thi Thu, who introduced herself as the manager of Dong Thinh Co, the importer of the Chinese goods.

The company failed to present valid invoices and origin certificates for the products, which also violated regulations on goods labeling, said Ngoan.

Police currently hold 145 products worth VND232 million as returned by local residents.

Meanwhile, the Chinese traders fled following the authorities’ raid.

Banks only cut rates for selected borrowers

Commercial banks this week have begun to cut lending interest rates on existing loans to 15 percent as ordered by the State Bank of Vietnam, but their regulation implementations are quite different.

Governor of the State Bank of Vietnam Nguyen Van Binh issued the directive on July 7, but failed to attach clear guidance on how exactly banks should follow the order, the credit institutions said.

Although the order took effect on July 16, several banks were then still unable to reach an agreement on the rate cut to inform their branches to follow.

Understandably, it is the borrowers who now face the consequences.

N.T.K, CEO of a printing company in Ho Chi Minh City’s District 1, said he borrowed VND100 billion from Eximbank at various interest rates, with the lowest standing at 16.5 percent a year.

As the bank did not inform him of any rate reduction on July 16, L. chose to contact the lender through his initiative, only to be told that the bank “is still considering and will announce the rate cut, if any, soon,” he told Tuoi Tre.

Meanwhile N.H.P, director of TM C Ltd Co, based in Phu Nhuan District, said he was rejected by Vietnam Textile and Garment Finance JSC when he asked to have the 19.5 percent rate slapped on his VND1 billion loan dropped to 15 percent.

He said, “The lender said they only cut rates for short-term loans, while the central bank ordered that all existing loans be subject to the rate cut, with no specification put on their terms.”

A chief official from the HCMC branch of the SBV said his institution ordered banks to lower interest rates on old debts on July 11, but few banks have reported their implementation.

ACB said it will only cut interest rates on loans borrowed for business development, while borrowers operating in the real estate sector have to repay loans at the old rates.

Meanwhile, OCB said only the four preferential sectors are subject to their rate reduction. The beneficiaries include small- and medium-sized enterprises, and businesses operating in the supporting industries, and agricultural and export sectors.

As for other borrowers, the bank will consider the rate based on their reputation, its deputy CEO Pham Linh said, adding there is currently no incentive intended for the realty businesses.

Sacombank said only borrowers that are businesses can enjoy the 15 percent rate for their unsettled loans.

Meanwhile, SHB said 35 percent of its customers are borrowing at above 15 percent a year, and it has ordered branches to cut rates with no difference between individual and business borrowers.

Nguyen Hoang Minh, deputy director of the central bank, admitted that the lack of guidance has caused banks to hesitate in reducing rates.

“Banks are waiting for a clear direction on who will be subject to the rate cut; whether they are businesses or individual customers, and for long- or short-term loans,” said Minh.

Ho Chi Minh City to replace 3 war-era bridges

Ho Chi Minh City is set to tear down three war-era bridges, one of which began to show cracks in October and hasn’t been repaired in 60 years.

With loans from the World Bank, the city will invest US$30 million to $40 million to build new crossings over the Nhieu Loc canal, the local People’s Committee has announced.

Residents will be saying goodbye to Bong, Kieu, and Le Van Sy bridges, of which only the last has ever been expanded, in 1994.

Constructed in the 1950s, the Kieu bridge seemed to edge toward collapse last fall when cracks began to appear on the surface.

In related news, the city also said it will spend VND3.2 billion to install underground electric wires downtown. The wires, to go under the city post office and Hai Ba Trung Street by mid-August, will power the public lighting system, according to the Management Board of Urban Traffic No 1.

Earlier, the city Public Lighting Company also finished construction on underground electric cables on Ham Nghi Street in District 1.

The city government has ordered similar installments on Ly Tu Trong Street to beautify the city center.

Footwear sector: low-cost labour no longer advantage

Researchers have warned that low-cost labour will not be a competitive advantage for Vietnam’s footwear sector by 2030.

More than 700,000 people are currently working in the sector and most of them are not well trained. As a key export earner, the sector contributes to bringing in a large amount of foreign currency.

Nguyen Duc Thuan, Chairman of the Vietnam Leather and Footwear Association, says in the first six months of this year the sector earned as much as US$3.8 billion from exports, up 25 percent against the same period last year.

He is confident that the sector will be able to meet the yearly target of US$7-7.3 billion.

He also says the sector’s surplus increased sharply from 38-40 percent in 2011 to 40-45 percent in the first half of 2012.

Some businesses even enjoyed a surplus of 50 percent.

This indicates that the sector’s strategy to increase its value is on the right track, Thuan stressed.

However, he points out a number of difficulties facing the sector such as a recent reduction in orders and the failure of enterprises to sign enough orders for production from now until the end of the year.

Other factors affecting business operations include unstable supply of human resources and higher wages for workers.

Over the past three years, their minimum wage has doubled to VND3.8-5.5 million a month, Thuan says.

The low quality of the workforce is also a big problem. Most businesses have to retrain their staff in design, sales and marketing.

As the cheap labour force is no longer its advantage, he says, the sector will have to find ways to resolve the issue.

The Ministry of Industry and Trade has asked other monistries and agencies to provide support for vocational training.

According to foreign experts, it is essential to take advantage of skilled workers instead of just cheap labour, as many Vietnamese workers still fail to meet employers’ requirements.

Therefore, they suggest, Vietnam should encourage labour associations and businesses to participate in vocational training to improve the quality of the workforce.

Exports face more technical barriers

Apart from challenges such as falling prices and the contraction in the number of orders, Vietnamese exporters are facing more and more technical barriers and the trend of trade protection of importers.

This was reported at a conference held in Ho Chi Minh City on July 17 by the Ministry of Industry and Trade.

Most worthy of note is Japan’s ethoxyquin residue limit applied on Vietnamese shrimps.

The foothold of aquatic products, vegetables, garments and textiles, footwear and steel pipes in foreign markets has also been shaken.

In the first six months of this year, the country’s export turnover reached US$53.33 billion, up 22.7 percent over the same period last year.

However, many of export items, especially agricultural products and seafood, are showing a reduction in value with coffee dropping 4.4 percent against last year; rubber, 31.3 percent; cashew nuts, 10.4 percent; tea, 0.3 percent; and rice 6.6 percent.

Nguyen Thanh Bien, Deputy Minister of Industry and Trade, highlighted coordination between businesses, associations and management agencies in information exchange and price forecasting as well as in seeking new partners and markets in a bid to remove such difficulties for Vietnamese exporters.

He also stressed the need for management agencies to uphold their role in controlling product quality so as to raise the prestige of Vietnamese products while accelerating administrative procedural reform.

Bien suggested Vietnamese exporters shift their focus to new high-tech products in the context that agro-forestry-fisheries products, fuels and minerals are facing a broad range of difficulties.

Esquel Garment Factory under construction in Hoa Binh

The ground-breaking ceremony for a US$25-million garment factory (Esquel Hoa Binh) was held in Luong Son Industrial Park, Hoa Binh province on July 17.

This is the third project invested by Esquel Garment Manufacturing Company, after the two others in Binh Duong and Bien Hoa, close to Ho Chi Minh City. Hoa Binh Company is the major contractor of the project.

The factory is scheduled for completion in February 2013 and will generate 2,800 jobs for local people.

Seminar highlights Vietnam-India strategic partnership

A seminar themed “Vietnam-India Strategic Partnership: Future Orientations” was held in Hanoi on July 17 by the Diplomatic Academy of Vietnam (DAV), in coordination with the Indian embassy in Hanoi.

The seminar is part of the activities to celebrate the 40th anniversary of diplomatic ties betweem Vietnam and India, and the fifth anniversary of their strategic partnership, as well as the 2012 Friendship Year, as agreed by senior leaders during President Truong Tan Sang’s visit to India in October 2011.

During the seminar’s five discussion sessions including 14 reports and various opinions, participants praised the time-honoured Vietnam-India friendship nurtured by late President Ho Chi Minh and Prime Minister Jawaharlal Nehru, adding that bilateral ties are growing closer and more reliable, especially after the two countries signed the joint statement to establish a Vietnam-India strategic partnership in 2007.

Bilateral relations in national security and defence have developed fruitfully in the past few years. Both sides have maintained exchanges of high-level visits, as well as mechanisms for strategic dialogues between deputy defence ministers and increasing cooperation in military training, naval activities and national defence.

Economic, trade and investment cooperation has developed rapidly with total two-way trade turnover reaching US$3.9 billion last year, a nearly quadrupling in the last five years.  In the first half of this year, bilateral trade reached US$1.89 billion.  

In his speech at the seminar, Deputy Prime Minster Nguyen Thien Nhan said Vietnam is keen to expand cooperation with India in education, science, and information and communications technology (ICT).

Vietnam and India share many common aspects in their histories and their strategic partnership has grown strong over the years. However, both nations are still far from matching their cooperation potential. The two sides should work together to increase their bilateral trade turnover to US$7 billion by 2015, Mr Nhan added.

Indian Ambassador to Vietnam Ranjit Rae, said that the seminar brings together experts, researchers and scholars from both countries to deliberate on topical issues of mutual interest.

The seminar also focused on the emerging security architecture in the Asia-Pacific region and highlighted the strategic partnership between India and Vietnam, particularly in bilateral political, national security and defense cooperation, trade, economics, and ICT.

Gold prices up VND100, 000 per tael

Domestic gold prices increased by VND100, 000 to VND41.90 million per tael on July 17.

At 10.00 am, SJC gold was listed at VND41, 73-41, 88 million per tael but sold at VND41.90 and purchased at VND41.82 million per tael by DoJi Jewelry Company.

Thang Long dragon gold was transacted at VND40.35 - 40.65 million/ tael by  Bao Tin Minh Chau Jewelry Company.

In the meantime, the price of gold in New York went up by US$3, 4 to 1.593,25 per ounce.

It is estimated that the domestic gold price is VND 1, 5 million/tael lower than the world price.

The State Bank of Vietnam’s inter-bank exchange rate was fixed at VND20,828 per US dollar.

City needs more investments for infrastructure development

The Saigon Commercial and Media Service Corporation in collaboration with the Institute of Development Studies organized a seminar on July 17 in Ho Chi Minh City themed "Implementation of Public-Private-Partnership projects: Experience and recommendations”.

According to the organizers, the demand for investments in transport infrastructure in HCMC is very high and billions of dollars are needed to improve, upgrade and build sufficient infrastructure.

However, state budget funds are limited and ODA funds are also not adequate.

Meanwhile, before the issuing of a decree on November 9, 2010 signed by the Prime Minister promulgating regulations on pilot investments under Public-Private-Partnership, Vietnam had about 100 PPP projects under BOT (Build-Operate-Transfer) or BT (Build- Transfer).

However these projects proved unsuccessful in terms of targets, numbers and quality.

Some of these projects have even been considered a failure such as the BOT Binh Trieu Bridge, because of lack of a legal framework, a number of risks arising in the implementation of the PPP model that were not removed in time, thus reducing the effectiveness of the project and discouraging investors.

The type of investments under the PPP model, to mobilize private sector capital investment in the field of public services--particularly in building technical and social infrastructure, have grown dramatically in many countries for several decades.

This is a form of socialized investment aimed at reducing the burden on the state budget, speed up services on good social infrastructure and economic development and improve people's lives.

Project licenses to be revoked on Phu Quoc Island
 
The Government Inspectorate has asked authorities in Kien Giang Province to revoke 97 project licenses that are stagnant or inconsistent with urban planning.
 
Nguyen Van San, Deputy Chief of the Government Inspectorate said that Prime Minister Nguyen Tan Dung also agreed with the decision.

During inspections, many wrongdoings by Kien Giang authorities were found.

They had allowed companies to build low quality developments that were not in accordance with planning regulations.

Kien Giang authorities allowed the management board of the sea encroachment project for the expansion of Rach Gia city to illegally sign contracts with citizens, and failing to collect VND50 billion (USD2.4 million) for the construction of Phan Thi Rang road from Phu Cuong Kien Giang Investment Corporation after the company won the bid.

The authorities appointed C&T Company to take on the transport system project worth VND27.3 billion (USD1.3 million), although the procedure was not in accordance with the regulation on investment and construction management.

The inspection revealed that local authorities had granted the land use rights to Global Seafood Shareholding Company, but the company had not paid the full land use fee.

Local authorities have also been asked to account for VND137.9 billion (USD6.6 million) in violation fines and VND24.9 billion in land use rights fees.

Insurance corporations banned from banks
 
A new law has banned insurance corporations from depositing their idle money in banks other than the State Bank of Vietnam.
 
Nguyen Thanh Binh, Deputy Governor of the State Bank of Vietnam said the National Assembly had passed a deposit insurance law that only provided insurance for VND, not foreign currencies or gem stones.
The new law is only applicable to individuals, rather than businesses or families.

"Money deposited by enterprises is usually used as capital and payment, not for savings. The law will protect individuals." Binh said.

The deposit insurance law also restricts the investment activities of insurance companies. To avoid losses, the insurance companies can only use their temporary idle money to buy bonds, SBV treasury bills and deposit money at the SBV.

The new law will take effect on January 1, 2013.

Along with the deposit insurance law, the SBV will also enact a prevention of money laundering law in 2013. The relevent agencies will have to confidentially report dubious transfers of large sums of money to the SBV within 48 hours.

Vung Ro Petroleum powers on

Vung Ro Petroleum, developer of Vietnam’s first licenced foreign invested oil refinery, is seeking suitable location to build supportive facilities for its on-going project.

A company source told VIR that the company would define which facilities could be set up north of central Khanh Hoa province, next to the current project’s site in central Phu Yen province.

According to Khanh Hoa Provincial People’s Committee, Vung Ro Petroleum had expressed interest in setting its base in Van Phong Economic Zone.

Vung Ro Petroleum is a joint venture between UK’s Technostar Management Limited and Russian Telloil Group to develop a $1.7 billion oil refinery, about 560 kilometres north of Ho Chi Minh City.
The company obtained its investment licence in November 2007 with total production capacity of four million tonnes of crude oil.

The firm also plans to build a seaport close to the refinery. However, the project has been delayed years due to site clearance problems. Before the end of 2011 Vung Ro Petroleum received the entire cleared site from the local government and preparation works were underway.

The company source said that land mine and exploration works had already been finished, while the bidding for an engineering, procurement and construction (EPC) contractor was underway. He expected the construction of the refinery could start this year and completed in four years. Currently, Vietnam has an operating oil refinery in Dung Quat Economic Zone of central Quang Ngai province.

The second one, Nghi Son oil refinery in north-central Thanh Hoa province is selecting an EPC contractor while the Vietnamese government is calling for investors for Long Son oil refinery in southern Ba Ria-Vung Tau province.
 
Assoc. proposes establishment of land clearance firm

The HCMC Real Estate Association (HoREA) has suggested setting up a land fund development organization specializing in site-clearance to ensure fairness for local residents as well as clean land funds for developers.

HoREA chairman Le Hoang Chau proposed the role and effectiveness of a fund development organization be maximized in line with Article 41 of the Land Law to make site-clearance and compensation for land of all planned projects.

The organization will manage clean land fund, auction land use rights or open bidding for selection of project owners using land to create a transparent, fair and competitive investment environment. Chau expects the presence of the organization will help minimize the rising number of lawsuits over unfair and unclear site-clearance compensation as seen at present.

He insisted the organization should be a public enterprise under the management of city or province-level authorities and it should be entitled to implement all assigned jobs thanks to the financial assistance from the State budget.

Now withdrawal of land and site-clearance compensation are being done based on the mechanism in which the Government revokes land for projects of national interests while investors receive land use right transfer via negotiations with land users.

This means the Government now has the right to use withdrawn land for national defense, security, public benefits and economic development purposes. Regarding production and business projects appropriate with zoning plans, developers are allowed to make deals with land users by themselves to carry out the schemes.

VASEP wants Japan to lower tech barriers on shrimp

The Vietnam Association of Seafood Exporters and Producers (VASEP) has proposed solutions to remove the difficulties for shrimp exporters as Japan is imposing stringent antibiotic control on Vietnamese shrimp.

Vietnamese agencies are urged to petition Japan for revision of food safety standards for local shrimp, according to the dispatch that VASEP sent to the Ministry of Agriculture and Rural Development and relevant agencies.

VASEP general secretary Truong Dinh Hoe said Japanese agencies in charge of testing antibiotic residues on imported seafood products had tightened their control and issued warning against Vietnamese shrimp.

In 2010, the percentage of seafood shipments subject to trifluralin tests upon arrival in Japan rose sharply. In 2011, Japan made more rigorous enrofloxacin check on shrimp imported from Vietnam, with the permissible residue level for Vietnamese products ten times lower than the European products.

As a result, Vietnamese shrimp exporters suffered great losses and difficulties in the past two years.

In 2012, Japan moves on to test ethoxyquin on Vietnamese shrimp. However, the same products imported from Thailand and Indonesia are not subject to such testing.

Starting from May 18, 2012, the ethoxyquin testing percentage for Vietnamese shrimp export shipments to Japan is 30%, with the permissible level of 0.01 parts per million (ppm), or 10 parts per billion (ppb).

VASEP informed ethoxyquin is not a harmful antibiotic. It is widely used as an antioxidant in fish meal and as a main component in animal feeds.

Developed countries like Japan allow the use of ethoxyquin in fish meal at a level of 75-150 ppm. Japan’s decision to impose the permissible ethoxyquin level of 10 ppb on Vietnamese shrimp is not based on any regulation or data of Japan.

Last Wednesday, Japan detected ethoxyquin residues on a shrimp shipment of a Vietnamese exporter and decided to check all shipments imported from this company in the coming time. The testing percentage remains at 30% for other Vietnamese exporters.

If Japan tested all shipments from Vietnam, there would be a great chance of Vietnam fishery losing this market. To protect the reputation of Vietnamese shrimp in the Japan market and help exporters avoid losses, VASEP proposed State management agencies responsible for seafood export to enhance diplomatic activities and international fight so that Japan will adjust the permissible threshold for ethoxyquin from 10 ppb to 100 ppb.

Vietnamese investors promised incentives in Laos

Vietnamese enterprises will receive strong incentives when investing in Laos in the coming time, as the HCMC authority commits to support them and the government of Laos will prioritize offering projects to Vietnamese investors.

This was highlighted by senior officials of HCMC and Laos at the Vientiane and Champasak Trade and Investment Promotion Conference held in HCMC on Monday. The event is one of the activities to celebrate the Vietnam-Laos Friendship and Solidarity Year 2012, marking the 50th anniversary of the establishment of diplomatic ties and the 35th anniversary of the signing of the Vietnam-Laos Friendship and Cooperation Treaty.

At the conference, Lao Deputy Prime Minister Thongloun Sisoulith called for stronger presence of Vietnamese investors in Laos in order to promote the advantages of both countries. Laos has natural resources and infrastructure available while Vietnam has capital, technology and markets, said Sisoulith.

If Vietnamese enterprises make full use of these advantages, they will gain an upper hand when doing business in Laos. He advised Vietnamese firms to have a long-term vision when making investment in Laos.

Given the bilateral cooperative relations over the past time, Deputy Prime Minister Sisoulith underscored Laos will prioritize offering projects to Vietnamese investors. Therefore, he hoped Vietnam will move up to the leading position in terms of investment in Laos in the coming time from the second place at present.

HCMC Party Secretary Le Thanh Hai also encouraged the city-based firms to invest in Laos, especially in Vientiane and Champasak. He said the municipal authority would provide enterprises with incentives so that they can carry out investment projects in Laos.

HCMC Chairman Le Hoang Quan said 35 enterprises in HCMC had been granted certificates to invest in Laos, mostly in the fields of processing, manufacturing, agro-aqua-forestry, mineral exploration and construction. Multiple HCMC businesses are operating efficiently in the neighboring country.

Notable projects are those by Saplast Vientiane Plastic Co., the program of HCMC Rubber Co. to plant rubber trees in Champasak and Attapu, the rubber and hydropower projects of Saigon Invest Group in Houaphan, Vientiane, Bolikhamxai and Xiangkhoang, and the coffee and farm produce project of Saigon Plant Protection JSC.

At present, Vietnam ranks second among the nations and territories with investment in Laos, with 424 projects worth a total of US$3.57 billion. Many large firms of Vietnam are operating efficiently in Laos, such as Viettel, Hoang Anh Gia Lai, Vietnam Rubber Group and Daklak Rubber Company.

Nidec licenced to open new factory at hi-tech park

Nidec Seimitsu Vietnam Corporation, a subsidiary of the Japan-based Nidec Corporation, on Monday received an investment certificate to develop a micro-motor factory at the Saigon Hi-Tech Park (SHTP) in Ho Chi Minh City.

This is the fifth investment project of Nidec Corporation at SHTP, carried out under the commitment between the corporation and SHTP authority made in 2005.

The Nidec Seimitsu Vietnam Corporation project worth a total of $40 million will develop, produce and trade micro motors used in cell phones. Moreover, in the coming time, the company plans to produce motors for medical equipment.

Nidec Seimitsu Vietnam Corp. expects to start work on the new factory this month and put it into operation in late this year. According to the company’s plan, the factory will achieve stable production within the first three years after it starts service, with an output capacity of 45 million units a month and monthly revenue of $8 million.

Vietnam is the third destination of Nidec Corporation when it invests abroad, along with China and Indonesia. All products made in Vietnam will be exported.

So far, Nidec Corporation has launched five projects in Vietnam, namely Nidec Sankyo Vietnam, Nidec Vietnam Corporation, Nidec Servo Vietnam, Nidec Copal Vietnam and Nidec Seimitsu Vietnam Corporation, with the total pledged capital of $246.5 million. The Japanese firm has previously committed to invest some $500 million in SHTP.

Le Bich Loan, deputy head of SHTP Management Authority, said the first four projects of Nidec are operating efficiently. The total accumulated export revenue of the four units reached over $740 million as of end-May 2012, paying taxes of more than $9.5 million to the city’s budget.

The Nidec Seimitsu Vietnam Corporation project is invested by Nidec Seimitsu Corporation, previously known as Sanyo Seimitsu Co. Ltd., a subsidiary under Sanyo Electric Co. Ltd.

Before joining Nidec Corporation in July 2011, Nidec Seimitsu Corporation specialised in research, development, production and trading of precise micro DC motors, including four main groups of products: vibrating motors used in cell phones, optical disk drives, digital cameras and medical equipment.

Especially, cell phone vibrating motors occupy the largest portion in the total revenue of the company, which is the sole supplier of this type of motors for Apple’s iPhone 4.

First multi-storey parking makes debut in Hanoi

The Hanoi Transport and Services Corporation (Transerco), on July 16th, put the first automated 5-storey car park, at a cost of VND13 billion, into operation after three months of construction.

The facility, made by steel, is located on 126sqm at 32 Nguyen Cong Tru street in Hai Ba Trung district, with a capacity of housing 30 automobiles.

Interestingly, it is removable and flexible and can be reassembled on any place within 15 days and it only takes two to three minutes to get a car out of the garage, meeting increasing demand for parking space in the capital.

Car owners have to pay VND30,000 per car for two hours or VND2-2.5 million per car a month.

Up to the end of 2012, Transerco plans to build two more multi-storey car parks on Nguyen Cong Hoan and Tran Quang Khai streets.

More multi-purpose ship handed over to foreign owner

The Haiphong Equipment Manufacture & Shipbuilding One Member Limited Company  (Lisemco), under the Lilama Corporation, has recently handed over the eighth multi-purpose cargo ship of 3,300 DWT, the “Schillig 08”, to Germany’s Briese Company.

This is also the last ship in a series of 8 multi-purpose vessels built by the Lisemco for export to the European company.

The vessel, for heavy cargo and containers, is equipped with engine-room automation and designed as an ice-breaker for freezing seas.

The “Schillig 08”, with a length of 86m, width of 12.6m and height of 6.7m, can reach a cruising speed of 14 nautical miles per hour.

Attentively, the process of installing equipment, including the most difficult jobs, such as installing engine-room, was undertaken by Lisemco workers.

It’s horses for courses for banks

Industry players are taking different approaches to banking authorities’ loan interest rate cuts.

Commercial banks are obliged to lower old loan interest rates to a maximum 15 per cent per year under a central bank guidance.

But, while bigger banks willingly reduce old loan lending rates, small and medium sized banks are cautious as the move could dent their profits.

TienPhong Bank chairman Do Minh Phu assumed abating lending rates was not simple as banks again had to raise deposits at high rates. Phu said three months ago, the bank mobilised at a ceiling rate of 14 per cent, per year but mobilised amount had yet to be fully lent out.

In respect to the concessionary credit package worth VND3,000 billion ($142.8 million) launched in early June 2012, the bank lent out VND1,140 billion ($54.2 million) through contracts signed with 40 customers.

Beneficiaries are mainly firms operating in petroleum, pharmaceutical, building material and industrial zone investment areas with the lowest lending rate at 13 per cent, per year.

The general director of a small Ho Chi Minh City bank said the State Bank having removed property-oriented personal loans from non-manufacturing credit basket was a good thing for banks to boost personal lending.

HDBank deputy director Pham Thien Long said old loans with interest rates above 15 per cent per year were often in personal property and non-manufacturing areas, whose interest rates are revised every six months or one year.

Lending to production and trading firms often have interest rates revised every three months or even one month in case of market volatility. Long said revising old loan rates to 15 per cent per year was mainly applicable to personal credit segment.

Old loans with interest rates above 15 per cent per year at HDBank accounted for just a small proportion of 20-25 per cent of the bank’s total outstanding loan balances, said Long.

Industry players pointed out the profit amount banks would loose when scaling down old loan interest rates to 15 per cent, per year would amount to VND16,500 billion ($78.5 million).

At Vietcombank whose lending amount occupies 8 per cent of the banking sector’s total outstanding loans the lost profit from driving down old loan interest rate to 15 per cent per year is estimated at VND1,800 billion ($85.7 million), according to the bank’s general director Nguyen Phuoc Thanh.