Oil and gas sector fetches $34 billion in revenues

The oil and gas sector, which employs more than 50,000 workers and accounts for nearly 25 per cent of the country’s GDP, has earned $34 billion in revenues this year and paid over $7 billion in taxes.

The industry has expanded its activities to 18 countries such as Malaysia, Algeria, Japan, the US, and the Republic of Korea.

It is planning to penetrate other strongly potential markets namely the Commonwealth of Independent States, Africa and the Middle East, and diversify investment forms together with major partners, said Nguyen Quoc Thap, Vice CEO of Vietnam Oil and Gas Group (PetroVietnam).

In addition, the sector will continue completing domestic seaport projects and calling for investment in them.

PetroVietnam currently has six projects worth $3 billion each and 11 others worth $2 billion each.

Son La hydroelectric power plant in operation

Southeast Asia’s largest hydroelectric power station has begun operating to help ease an electricity shortage in fast-growing Vietnam, an official said on December 19.  

The first of six turbines at the Son La station is now connected to the national power grid, said Hoang Trong Nam, director of the plant’s management board.

The two-billion-dollar plant with a capacity of 2,400 megawatts is expected to be fully operational in 2012, three years ahead of a target set by the National Assembly.

Nam said about 100,000 people, mostly from ethnic minority groups, have been relocated to make way for the reservoir, which stretches across the three provinces of Son La, Lai Chau and Dien Bien in northwestern Vietnam.

Initial plans for construction of an even larger dam were scaled down after deputies in the National Assembly had raised concerns about the human and environmental costs of the project, including its safety in an earthquake-prone mountainous region.

The European Chamber of Commerce in Vietnam (Eurocham) has estimated that the fast-growing country needs infrastructure investment of US$120 billion over the next five to 10 years, much of it in the energy sector.

Vietnam draws more than one-third of its electricity from hydropower but suffers periodic blackouts and is trying to diversify its power sources.

With electricity demand grows by 14 percent Vietnam has recently signed a deal worth an estimated 5.6 billion dollars with Russia for Vietnam’s first nuclear power facility.

Construction begins on new Honda motorbike factory

Honda Vietnam Company started construction of its third factory for manufacturing motorbikes and spare parts in the northern province of Ha Nam on December 19.

The US$120 million factory, covering a total area of 27 hectares, is expected to be put into operation after one year of construction, provide jobs for nearly 2,000 people, and contribute about VND400 billion to the province’s budget.

The groundbreaking ceremony was attended by Deputy Prime Minister Vu Van Ninh and the Japanese ambassador to Vietnam, Yasuaki Tanizaki.

Addressing the event, Deputy PM Ninh asked the provincial People’s Committee to create the best possible conditions for the contractor to finish the project on schedule.

Honda Vietnam will closely supervise the contractor and coordinate with local authorities to recruit and train workers now so the factory can operate immediately after it is inaugurated.

Trade promotion targets key overseas markets

The US, Europe, China, Japan, ASEAN, India, Africa, the Middle East and South Asia are expected to help Vietnam fulfill the target of earning US$108 billion from exports next year.

These markets are the country’s key importers in 2012, said Do Hai Thang, Head of the Trade and Industry Ministry’s Trade Promotion Department, at a meeting with Vietnamese overseas trade counsellors in Hanoi on December 19.

Thang also affirmed that the success of trade promotion programs is attributed to contributions from Vietnamese trade offices overseas, which have provided pertinent information about foreign markets and business consultancy to Vietnamese enterprises.

In 2011, the national trade promotion program has obtained many achievements, with a total contract value of more than US$800 million signed between Vietnamese enterprises and foreign partners.

Noteworthy was the Vietnam-China International Trade Fair 2011, which saw 19 contracts signed with a total value of US$201 million, and the China-ASEAN Trade Fair, with US$300 million worth of signed contracts.

Exports to Egypt up 41 percent

Vietnam’s export revenue to Egypt in 2011 is expected to reach about US$250 million, US$80 million higher than same period last year, said Vietnamese Trade Counselor to Egypt Phan Minh Quang.  

However, due to the political crises in some Middle Eastern and North African countries, the number is only half of the initial target set in an agreement signed by the Vietnam-Egypt Joint Committee in 2008.

In order to reach the target, Quang said, the two countries should strengthen the dissemination of information, and Vietnam should create preferential policies to support businesses in promoting trade in these markets.

Egypt imports mainly farm produce, seafood and rubber from Vietnam.

Brother Vietnam to build new factory in Hai Duong

Brother Vietnam, a branch of the Japan-based company that produces multifunction printers, began construction of a new US$25 million factory in the northern province of Hai Duong on December 19.  

The three-storey factory, covering a total area of 40,000m2, is expected to be finished in December 2012. Once it is put into operation, it will generate jobs for nearly 3,000 local people.

This will be Brother’s fourth factory in Vietnam and part of the company’s strategy to expand its production with a focus on laser printers.

Nguyen Manh Hien, Chairman of the Hai Duong Provincial People’s Committee, praised Brother for its expansion, saying he hopes that the company and other Japanese investors will continue to invest in the province.

Moody’s has positive outlook on BIDV IPO plan

The well-known global credit rating firm Moody’s has assessed equitization plan of the Bank for Investment and Development of Vietnam (BIDV) as credit positive.

In its weekly Global Credit Research, Moody’s commented that equitization will help BIDV improve its capital base and adequacy, bring positive structure changes as well as enhance its financial and management transparency.

Besides, the participation of foreign strategic investors will help the bank get independent supervision to improve its corporate governance practices and obtain support in terms of risk management and product development.

Under the plan previously approved by the Prime Minister, BIDV will sell a 15-percent stake to foreign strategic investors in 2012, another 3 percent stake through the initial public offering (IPO) in the domestic stock market on December 28 and then, sell 1 percent of preferential shares to the bank’s staff and 3 percent to its labour unions.

The Vietnamese Government will reduce its holding in BIDV from 100 percent to 78 percent after finalizing the transaction and to 65 percent of stakes by 2015.

CII buys $40 million stake in Thu Duc Water B.O.O Corporation.

Ho Chi Minh City Infrastructure Investment Joint Stock Company (CII) has successfully sold 49 per cent of Thu Duc Water B.O.O Corporation to a foreign investor.

The $40 million transaction involved an Asia partner and after the deal, CII still holds 7.33 per cent charter capital in the firm. Thu Duc Water B.O.O Corporation is a Vietnamese joint stock company, established by the end of 2004 to build, own and operate a water treatment plant in Ho Chi Minh City.

The plant is the second largest water treatment plant in Ho Chi Minh City and the largest private one in southern Vietnam with a capacity of 300,000 cubic metres per day.

Thien Viet Securities was the exclusive financial advisor to CII on the transaction, having advised on the transaction valuation, identified the target buyers, and managed the sale and negotiation process.

Vietnamese companies not investing enough in science, technology  

Managers and scientists at a meeting on comprehensive renovation of management mechanism in the field of science and technology held in Hanoi on Thursday concluded that only 1 to 3 percent of Vietnamese enterprises invested in research and development of advanced technology.

At the meeting organized by the Ministry of Science and Technology, participants said investments by Vietnamese companies in science and technology were far too low as compared to that of Indian and Korean firms who had investments of 5 and 10 percent respectively.

At present, the country has to spend a lot on importing many synchronized devices from foreign countries.

Over 1,000 small-scale enterprises work in the field of science and technology in the country. The ministry promised to find measures to promote scientific and technological activities amongst enterprises. Breakthroughs in science and technology management, organization and operations of socio-economic development are vital for the future.

Participants at the meeting petitioned policy-makers to create a mechanism whereby scientists can net a living from technological transfer to manufacturing activities. Furthermore, entrepreneurs should seek scientists for developing advanced technologies to raise competitiveness.

In addition, policy-makers must set up a strategy to appoint talented and leading scientists to work in projects in the field of science and technology.

Stock market holds onto Friday's gains

Shares were able to maintain last Friday's gains during yesterday's session on the HCM City Stock Exchange, with the VN-Index adding another 0.4 per cent before closing at 367.40 points.

The value of trades eased from the previous session to VND613.5 billion (US$29 million) while the volume of trades plunged by nearly 43 per cent to 37.3 million shares.

Decliners edged out advancers by 126-92, with blue chips also mixed. Vietinbank (CTG) and Vietcombank (VCB) hit their ceiling prices, but Phu My Fertiliser (DPM), steelmaker Hoa Phat (HPG), Sacombank (STB) and property developer Vincom (VIC) all retreated.

Notably, PetroVietnam Finance (PVF) dropped below its face value, declining to only VND9,000 per share.

Financial group Tan Tao (ITA) led the HCM City market in volume, with around 1.3 million shares change hands.

On the Ha Noi Stock Exchange, the HNX-Index also held onto gains, edging up 0.6 per cent to 60.19 points. Value declined by 9.7 per cent from Friday's session, however, to just VND230.2 billion ($10.9 million). Volume totalled 26.6 million shares.

VNDirect Securities Co (VND) was the most-active share nationwide, with nearly 2.9 million traded.

Thang Long Securities Co deputy director Quach Manh Hao told a conference in HCM City on Sunday that the market could recover early next year and discounted concerns that about VND25 trillion ($1.2 billion) in foreign investment has recently been withdrawn from the market.

"A Japanese investment fund is planning to divest, but there will be many others to come," Hao said.

Meanwhile, news of higher electricity rates, released yesterday afternoon following the conclusion of trading, should test investor confidence as trading gets underway today.

Electricity of Viet Nam (EVN) yesterday announced that, effective immediately, electricity rate would be increased by 5 per cent across-the-board to a new average of VND1,304 per kWh.

The Ministry of Finance yesterday afternoon also announced that it would hold the line on petrol prices. The head of the Ministry of Finance's price management department, Nguyen Tien Thoa, said that, despite falling global oil prices, petrol prices could not be reduced since the fuel price stabilisation fund had earlier been used to offset losses between market prices and retail prices.

Airlines announce to raise fares

Domestic airlines are revising their rates following the Ministry of Finance and Civil Aviation Administration of Viet Nam (CAAV) adjustment of ceiling prices last week.

Budget carrier Jetstar has upped fares from HCM City to Vinh and Hai Phong from between VND950,000 and VND2.5 million (US$38-120) (excluding taxes); while flights from HCM City to Da Nang will cost VND490,000-VND1.64 million ($23.52-78.72).

Meanwhile, Vietjet Air said flights on its only route between HCM City and Ha Noi would remain at VND900,000 ($43.2) (excluding taxes).

Viet Nam Airlines said it would raise fares by 20 per cent for economy and not more than 5 per cent for business class.

WB okays $457m in credit for Viet Nam

The executive board of the World Bank on Friday approved a US$457 million credit line to help Viet Nam implement three development projects.

Of the total, $210 million will be spent on a project to improve access to effective and sustainable infrastructure services in the northern cities of Lao Cai and Phu Ly and the central city of Vinh; $97 million will be spent on a project to help the Government improve rural communities' access to markets, non-agricultural economic opportunities and social services. The remainder will be used for a poverty reduction project.

The loan has a term of 25 years, with payment to begin five years after project implementation begins.

VN affirms support for fair trade system

Minister of Industry and Trade Vu Huy Hoang has affirmed Viet Nam's determination and commitment to the multilateral trading system, saying it was one of the focal points in the country's policy for international economic integration.

In his speech at the plenary session of the eighth World Trade Organisation (WTO) Ministerial Conference in Geneva on Friday, Hoang said as a developing country that joined the WTO at a time when the global economy was facing difficulties, Viet Nam had done its utmost to implement its WTO commitments.

Viet Nam was disappointed at the deadlocked trade negotiations in Doha which had degraded people's trust in the multilateral trading system, said the minister.

It was imperative to reinforce trust in the multilateral trading system with strict and transparent rules and regulations that served as the most effective mechanism against protectionism and for dealing with global trade issues, he stressed.

Although the Doha round of trade negotiations failed to meet the desired outcome, it proved the importance of the development issue.

Viet Nam hoped that WTO ministers would turn their political will and determination into specific instructions for the negotiations to achieve expected results, the minister said.

Hoang hailed the reports issued by WTO committees and their efforts, along with working group efforts, to fulfil the tasks of the multilateral trading system.

This is the second time Viet Nam has attended the WTO Ministerial Conference as a full WTO member.

During the conference, the Vietnamese delegation met with the Swiss State Secretary for Economy, Marie-Gabrielle Ineichen-Fleisch, the head of the Ukrainian government delegation, Valeryi Pyatnytskiy, and the Canadian International Trade Minister, Ed Fast.

They also held working sessions with representatives from ASEAN nations.

Ministry approves first phase of National Highway project
 
The Ministry of Transport has approved the first phase of National Highway 20 upgrade to transport bauxite ore from the Central Highland province of Lam Dong to southern Dong Nai Province.

According to Decision 2525/QD-BGTVT, signed by Minister Dinh La Thang on November 7, the 123km road from Lam Dong Province to Go Dau Port in Dong Nai Province will be injected with over VND7.6 trillion (US$364 million) from the State budget.

This part of the highway has been in use for 30 years and reported to be in need of an upgrade to better serve the bauxite mining industry.

Construction will include different paths with widths of 7m, 12m, 15m and 27m depending on the locations of deltas, mountains and cities. Surfaces will accordingly have high load capacities of 1,600 kilos per square centimetre to meet the requirements of lorries carrying bauxite to run at a speed of 60 to 80km per hour. It will be constructed under the Build-Transfer model.

The first phase will run for three years, starting this month.

This is one part of the two-phase project of the 268km National Highway 20, which runs from HCM City to the region.

Bauxite is an aluminium ore. Reserves in the Central Highlands are estimated at 5.4 billion tonnes.

State Bank urged to pursue cautious monetary policy

Prime Minister Nguyen Tan Dung is urging the State Bank of Viet Nam to pursue a cautious and flexible monetary policy to keep inflation under control while ensuring capital for production to meet the country's economic development targets.

At a conference in Ha Noi on Saturday focusing on targets for the banking sector, Dung said the country was able to control inflation in 2011, maintain economic stability and ensure social welfare. He commended the banking sector for its efforts and significant contributions to the nation's socio-economic development during the year.

Dung also noted shortcomings and weaknesses in implementing the monetary policy, as well as liquidity problems at a number of credits institutions and the soaring bad debt ratio at some banks. However, he also urged the central bank to determine measures to help enterprises access bank loans more easily.

He instructed the bank to complete a restructuring scheme for the commercial banking system during 2011-15 with the goal of building a strong and competitive commercial banking system.

The SBV has targeted an overall credit growth of 15-17 per cent in 2012 and expects to take further measures to control the foreign exchange rate and monitor the banking sector.

JAL runs second hotel in Viet Nam

The five-star Hotel Nikko Sai Gon came into operation yesterday and became the second hotel in Viet Nam of JAL Hotels Co Ltd, a subsidiary of Japan Airlines, after Hotel Nikko Hanoi in 1998.

Taiwanese-invested company Fei Yueh Viet Nam said it has invested some US$100 million to build a luxury 23-floor hotel with 334 guest rooms and 53 service apartments. There will be other service facilities such as meeting rooms, restaurants, a fitness centre, swimming pools and shopping outlets among others.

Can Tho-Taiwan flights open for Tet

The director of the Vietnam Airlines office in the southern city of Can Tho said on Thursday that the national flag carrier would operate 11 direct flights from Taiwan and vice versa during the 2012 lunar new year (Tet).

There will be six flights from Taipei, Kaohsiung and Taichung to Can Tho and five from Can Tho, with the first flight from Taipei to Can Tho on January 17. Each flight is capable of carrying 100-130 passengers on an Airbus 321 aircraft. This is the third year Vietnam Airlines in Can Tho City has offered a direct air service to Taiwan to allow overseas Vietnamese to return home to celebrate the Tet holiday.

Power plant boiler shipped to Egypt

The Doosan Vina Heavy Industry Company (Doosan Vina) has shipped to Egypt a high-tech boiler for a power plant.

The 650MW boiler weighs 1,443 tonnes and is the first Doosan Vina product to be sent to Egypt. It will be fitted to the Ain Sokhna thermal power plant in eastern Egypt.

The shipment follows an agreement signed with East Delta Electricity Production Power Company last October and includes two 650MW units with a total weight of 2,886 tonnes and a generating capacity of 1,300MW.

PVC plastic import tax will not be reduced

The Ministry of Finance has announced that the import tax on polyvinyl chloride (PVC) plastic would not reduce.

Domestic enterprises had made PVC plastic products meet 80 per cent of domestic demand, so a good policy with a current import tax level to protect and encourage domestic firms' development was necessary, the ministry said in a recent circular.

A decrease of import tax on these kinds of goods might badly affect the implementation of the Government's Decree No 11/NQ-CP on curbing inflation, stabilising macro-economy and ensuring society security.

Ha Noi machinery expo set for March

The ninth Viet Nam International Precision Engineering, Machine Tools and Metalworking Exhibition (MTA) will return to Ha Noi in March.

Co-organised by the Singapore Exhibition Services Pte Ltd (SES) and local organiser VCCI Exhibition Service Co Ltd, MTA Ha Noi 2012 will include Metrology Ha Noi 2012, ToolTec Ha Noi 2012, SubCon Ha Noi 2012, Automation Ha Noi 2012, and WeldTech Ha Noi 2012.

MTA Ha Noi 2012 will showcase international technologies, including metal-cutting machine tools, metal-forming machine tools, test and measurement equipment and systems, cutting tools, tooling systems, and industrial tools and components.

The event is the leading platform for industry professionals to network with both international and reputable local exhibitors offering the latest solutions for Ha Noi's blooming manufacturing sector.

There will also be ample opportunities for local industry players to establish business partnerships.

According to a General Statistics Office report, the manufacturing sector in Viet Nam experienced growth rates of about 10 per cent.

Based on the national Index of Industrial Production, Ha Noi's economic growth rose 12.5 per cent between January and October 2011 compared with the same period last year.

William Lim, project director of Machinery Events at Singapore Exhibition Services (SES), said the exhibition was especially timely, as reports had shown that Viet Nam's manufacturing industry had been growing at a steady pace, including in Ha Noi as well.

MTA Viet Nam was first launched in HCM City in 2005, and the show has since grown to become Viet Nam's most comprehensive manufacturing-solutions trade event, with 80 per cent of exhibitors from overseas.

State firms to lift budget contributions
 
The Ministry of Finance (MoF) recently unveiled a draft decree on capital and financial management requiring State-owned enterprises (SOEs) to remit around 50 per cent of after-tax profits towards State budget.

Accordingly, after paying corporate income tax, offsetting losses of previous years and appropriating financial reserve funds, SOEs will have to remit 50 per cent of the remaining profits to the Enterprise Development and Reorganisation Support Fund, managed by the State Capital Investment Corporation (SCIC).

"Like other capital contributors, the State has the right to earn profits from its investments. It will take only half of profits with the remainder to be spent on setting up reward funds and other welfare funds to support employees," said Deputy head of the MoF's Corporate Finance Department Dang Quyet Tien.

Advocating the proposal, economic expert Tran Du Lich, a member of the National Assembly's Economics Committee, said that it was necessary to reclaim SOEs profits for the state budget, especially for large groups getting rich from natural resource exploitation.

Obviously, many SOEs are opposed to the proposal, saying this rule, if approved, could leave them starved of capital for investment given that many banks grant loans based on the financial strength of borrowers.

"In the current economic climate, enterprises should keep all their profits to expand their business and production activities. The after-tax profits to be kept by SOEs still belong to the State and enterprises should use this capital to make more profits which will then increase state budget revenues," said Le Xuan Son, chairman of the members' council of the Viet Nam Agricultural Material Corporation.

Another salient point of the draft decree is the requirement that SOEs reduce their investments in non-core business activities from 30 per cent to 15 per cent of their charter capital. SOEs would be allowed to contribute capital to such risky sectors as banking, insurance and securities but, for each sector, they may select only one partner and the total amount of capital invested in these partners must not exceed 10 per cent of their equity capital. In addition, the portion of capital invested by an SOE in a bank, insurance or securities company must not exceed 10 per cent of the charter capital of that capital-receiving company.

Bumper harvests drive down winter fruit prices

Fruit prices in the Cuu Long (Mekong) Delta have plunged because of high supply and a fall in consumption due to cold weather.

Coconut and sapodilla have seen prices fall by half in the past month.

In Ben Tre Province, coconut is now down to VND65,000 for a dozen.

At a recent meeting of the province People's Council, Cao Van Trong, deputy chairman of the People's Committee, blamed it on falling global prices.

The committee has ordered provincial agencies and the Ben Tre Province Coconut Association to bolster export promotion and find new markets for coconut products.

It has also urged processors to buy coconuts for exports.

In Tien Giang Province, sapodilla has fallen by half from a year ago to VND6,000-7,000 a kilogramme.

Nguyen Van Ri, chairman of the province-based Chau Thanh District Garden Association, blamed it on the harvest season which is peaking now.

The cold weather in the northern and central regions had also hit sapodilla consumption there, he said.

Besides, the fruit was not exported, he added.

Cold weather has also hit the prices of several specialty fruits like Vinh Kim milk fruit and Cai Be orange in Tien Giang Province and Lai Vung pink mandarin in Dong Thap Province.

Le Van Tam, a farmer who owns a 6,000sq.m orange farm in Tien Giang's Cai Be District, said last year he had harvested five tonnes and sold them for more than VND100 million.

"This year I harvested seven tonnes but the money from selling it is equal to that of three tonnes last year."

Lai Vung pink mandarin prices are down by VND3,000-4,000 a kilogramme to VND13,000-14,000.

But Mai Quoc Hau, head of the Lai Vung District Agriculture and Rural Development Office, said the fall was temporary because there was still a month to go for the Tet (Lunar New Year) harvest season.

Prices during Tet would decide the success or failure of a mandarin crop, he said.

In contrast to many other fruits, the price of green-peel grapefruit has increased in Ben Tre due to high export demand.

Dam Van Hung, owner of Huong Mien Tay Enterprise, said he had bought the fruit for VND28,000 a kilogramme, VND6,000 up from a year ago.

Co-operation key to export lift
 
The country's agricultural and trade sectors should co-operate more to achieve the planned US$26 billion export target for 2012.

Deputy Minister of Agriculture and Rural Development Diep Kinh Tan made the comment to representatives from cities and localities and 64 overseas embassy counsellors at a workshop held by his ministry and the Ministry of Industry and Trade in the capital yesterday.

In 2011, local exports in agriculture, forestry and fishery products reached $24 billion.

The Ministry of Industry and Trade has called on the agricultural ministry to co-operate with its representatives abroad as well as overseas commercial affairs sectors to boost agreements on issues such as food safety and hygiene, especially with countries such as Russia, Commonwealth of Independent States (SNG), the Middle East, West Asia and Africa.

During the workshop, participants reviewed and discussed advantages and difficulties in trade promotion as well as barriers faced when entering markets such as Russia, East Europe, the EU and the American continent. Problems faced when exporting products such as coffee, catfish, shrimp, dragon fruit and honey were also put on the table.

Deputy Minister of Industry and Trade Tran Quoc Khanh blamed the lack of information exchange among relevant sectors, State management agencies, enterprises and overseas commercial representatives as the main reason for such problems.

"In some cases, with regulations having been issued previously, we failed to catch up with information for timely solutions," Khanh said.

Commercial Counsellor to Russia Vu Van Quang urged the two ministries to support and encourage enterprises to enhance trade promotion of agricultural and fishery products in Russia and SNG countries, with additional focus on the Ukraine, Belarus and Uzbekistan.

Relevant agencies needed to work with counterparts in Russia and the Ukraine to deregulate the limitation on the number of enterprises allowed to export catfish to these markets, Quang said.

Commercial Counsellor to the US Dao Tran Nhan warned enterprises to be cautious about price and quantity when exporting to the US market.

"The price cannot be two low while quantity cannot be too high in order to avoid dumping allegations," he said.

Cement market to face difficulties in 2012
 
The domestic cement market will remain sluggish in 2012 because of continuing difficulties in production and business this year, according to experts.

The Viet Nam Cement Association estimated that the domestic market would need 55-56.5 million tonnes of cement and 4-4.5 million tonnes of clinker and cement for export next year.

The industry would still experience many difficulties in production and business because of high input costs related to electricity and coal prices, according to the association.

Tran Du Lich, a member of the National Assembly's Economic Committee, said that next year, the building material market would continue its slow growth due to the frozen property market, tightening credit policies and cuts in public construction project investment.

The loosening policy on credit would have little effect on the building material market, Lich said.

The domestic cement market has retained large stocks with capacity hitting 60 million tonnes on a demand of 50 million this year.

Nguyen Tran Nam, deputy minister of construction, said that production costs had been driven up, increasing the retail price of cement.

The industry was in need of modern technology to increase production and lower operational and logistical costs, Nam said.

Tran Van Huynh, chairman of the Viet Nam Building Material Association, said that the Government and ministries should limit licensing wasteful cement factories with small capacity of between 350,000-600,000 tonnes per year.

The Viet Nam Cement Industry Corporation should link with joint ventures to manage demand and supply on a monthly basis, Nam said.

The Ministry of Construction called on the Ministry of Industry and Trade and the Market Watch Team to adjust selling prices for electricity, coal and petrol while ensuring sufficient supply towards the cement industry to ensure market stability, he added.

Closer supervision urged for banks

To strengthen oversight of the banking industry, supervision should be risk-oriented and based on a deep understanding of the business model, a French academic told a conference in HCM City yesterday.

Professor Arnaud Raynouard, a law professor at Universite Paris-Dauphine, said supervisors had to closely and regularly monitor and correct functioning of the banks, and make sure they were complying with the central bank's regulations.

Supervisors had to understand and evaluate risks. A result-oriented supervisory style that attempted to ensure weaknesses were addressed before they became serious was essential.

There was also need for robust on-site supervision which should be carried out by qualified and experienced supervisory staff who knew the banking system, both private and public sector, very well.

Efficient supervision entailed an ability among supervisors to judge the risks and to intervene.

"Only then will the regulated banking sector deliver benefits.

"The Vietnamese banking market is maturing and has opportunities to grow. Banks need to be more internationally active because of the economic impacts of global and regional integration," Raynouard said.

The application of international standards in Viet Nam's financial system remained inadequate.

There were some challenges since senior people in supervisory agencies in many countries often had a poor understanding of financial institutions and little or no financial sector experience.

Each supervisory institution implemented just its own task without co-operating with others, which consequently made supervision difficult.

The Government had to come up soon with effective solutions to consolidate and strengthen financial market supervision, particular with a clear legal framework.

Without legal protection, supervisors would be extremely cautious in taking action.

"Moreover, an open economic market should not have many banks that are so weak. So Viet Nam needs to concentrate on mergers and acquisitions. Small banks can take the opportunity to transform to be safer," Raynouard said.

Truong Thanh Duc, a lawyer who has worked with banks for many years, said mergers would continue to take place on both voluntary and compulsory bases in the country because it was saddled with many weak, small banks, especially in the context of the economic crisis and Government's stringent requirements.

Supervision of Vietnamese banks were yet to be done effectively, he admitted, saying commercial banks merely had to make periodical reports to the State Bank of Viet Nam.

In Viet Nam, the responsibility to oversee banks – as well as the securities and insurance markets – lies with the National Financial Supervisory Committee.

The conference was organised by the France-Viet Nam Management Training Centre, or CFVG, and the French Chamber of Commerce and Industry in Viet Nam (CCIFV).

Investment and trade with S Korea to get a lift

A one-day business forum involving South Korea was held in Ha Noi on Thursday and in HCM City yesterday.

The events were organised by South Korea's Embassy in Viet Nam in co-operation with the Vietnamese Ministry of Planning and Investment and the Viet Nam Chamber of Commerce and Industry.

They attracted the attention of more than 250 guests, including representatives of the two governments, enterprises and official organs.

Trade and tourism fair with China opens

The Viet Nam-China tourism and trade fair 2011 opened yesterday in the border city of Mong Cai, in Quang Ninh Province.

The fair, titled "Integration and development", features around 300 booths, with many of the two countries' typical products and services on display. There are also booths from Indonesia and South Korea.

The main activities within the framework of the fair include an international conference, contract and co-operative agreements among businesses.

DHL Express launches flight to Hong Kong, Bangkok

Courier firm DHL Express has launched a new direct flight service that connects HCM City with two other major commercial hubs in Asia, Hong kong and Bangkok.

The new service sees the Boeing 727F providing 22,000 kilograms of inbound and outbound uplift to Viet Nam five days a week, flying from HCM City to Hong Kong and Bangkok and returning to the city. It also improves the throughput to the key Vietnamese trade lanes of Europe and the US.

InterContinental and BIM groups sign hotel deal

The InterContinental Hotels Group announced on Thursday the signing of an agreement for managing the Vietnamese BIM Group's two new Crowne Plaza properties in Vientiane and Viet Nam's Phu Quoc Island, both scheduled to open in 2015.

The US$122 million properties of BIM Group would add about 600 rooms to the InterContinental Hotels Group's portfolio.

Japanese clothing plant receives licence to go ahead

Northern Hoa Binh Province's Industrial Zones Authority has issued an investment licence to Japan-based Midori Creative Apparel Co, allowing the construction of a work clothing and tool processing plant in provincial Luong Son Industrial Zone.

The plant, which costs VND476 billion (US$23 million), has a design capacity of 1.3-1.5 million products for export per year.

The plant is scheduled to come on line in October 2013. Once fully completed in 2016, it will be capable of a total turnover of over VND140 billion ($6.7 million).

Polish Airlines offers cheap fares to Europe

LOT Polish Airlines is offering discounts of up to 20 per cent for round trip tickets from Ha Noi to Poland and Europe, with fares starting from US$280. The promotion is for departures from Thursday until January 31 next year to return before March 31.

Biggest shopping centre Megamall opens

Viet Nam's largest shopping and entertainment centre, Savico Megamall, opened its doors here yesterday, offering a wide choice of shopping, entertainment and leisure activities

The mall, located in Long Bien District, targets customers living in the city's eastern region.

The 60,000sq.m, three-storey mall has been built by Savico Ha Noi Joint Stock Company and managed by the CB Richard Ellis (CBRE).

US group eyes local property market

The Asian Real Estate Association of America (AREAA) has signed a contract with the Viet Nam Real Estate Association to provide experience in developing and investing in local property.

David Tran, AREAA vice president, was quoted by local e-newspaper VnMedia as saying that the co-operation was a positive sign for local investors and AREAA's members.

According to Vietnamese experts, seeking new capital for the Viet Nam real-estate market from Asian American investors relies on many factors.

Serviced apartment market has potential

Viet Nam had great potential in serviced apartments in Ha Noi and HCM City, said Chris Brown, from Cushman&Wakefield in Viet Nam.

He said data showed that serviced apartments had steady rental growth and stable occupancy levels in both Ha Noi and HCM City. When compared with the office market, it appeared safer and not prone to extreme fluctuations.

Savills VN to offer consultancy services

Savills Viet Nam has signed with Nam Son Trading and Construction Joint Stock Company to offer a development consultancy in northern Quang Ninh Province.

The 85ha area will be located at the provincial Cai Rong Port in Van Don District.

Savills has advised on many property projects in Long An Province, HCM City's Can Gio District, Bac Ninh Province and Cambodia's Phnom Penh.

Sale of Nature Land lots begins today

Sales begin today for land lots in Nature Land, part of a larger urban project, the 160ha, US$94 million Dong Tang Long in HCM City's District 9.

Nature Land surrounds a 7-hectare lake claimed to be the largest in the city. The Long Thanh-Dau Giay expressway will pass by the project within two years.

Japanese province enterprises share investment ideas

Enterprises from Japan's Aichi prefecture wished to expand investment in Viet Nam, said Saburo Onoki, director of the prefecture's Trade and Investment Agency, during talks with the Vietnamese Foreign Investment Agency (FIA) yesterday in Ha Noi.

Onoki said more than 97 Aichi enterprises had already invested in Ha Noi and HCM City.

At the talks, Aichi enterprises already set up in Viet Nam discussed ways for the Vietnamese Government to improve the investment environment.

Do Nhat Hoang, head of FIA, said Japan ranked among the leading foreign investors in Viet Nam. In November, Japan had 1,636 investment projects in Viet Nam with total registered capital of nearly US$24 billion, ranking fourth among foreign investors.

Hoang said Aichi was one of the leading Japanese investors in Viet Nam. So far 97 businesses from the prefecture were involved. Most were operating effectively and had expanded operations.

He said that for more than 18 months, Viet Nam had failed to maintain its attraction to foreign investors, mainly because of the global economic crisis.

However, he said Viet Nam could attract more foreign investment into high-tech industry, infrastructure and human-resource development.

Onoki noted that the growth of the Vietnamese economy had been maintained with the GDP increasing by 6.8 per cent in 2010.

This was why many Japanese investors wanted to learn about the investment environment in Viet Nam.

A support desk has been established to help businesses from Aichi share information and experiences with Vietnamese partners.

Experts suggest ways to raise capital
 
Experts met yesterday to discuss ways for enterprises to effectively raise capital for their operations in the midst of challenges next year.

"Curbing inflation and tightening credit will continue next year, and the cost of electricity will increase by up to 15 per cent," said former deputy minister of commerce Luong Van Tu.

Enterprises should reassess their chances of recovery in their respective markets and adjust targets accordingly, he said.

"In order to ensure capital flow, producers must be willing to lower prices, claim back investment capital and reduce inventories."

In addition, companies should concentrate solely on their areas of expertise and look to acquire assets in other firms on the grounds that they would generate profits when the market rallied.

The value of many companies has declined by up to 50 per cent. "This is a good time to purchase assets," Tu noted.

Once enterprises restructured themselves, banks would agree to grant loans, said Tran Quang Thang, head of the Central Institution for Economic Management. "Banks will look at corporate characteristics, cash flow, capital allocation, mortgages and economic conditions before making a decision."

These five factors would be important in the midst of a challenging economy, so enterprises should give persuasive detailed reasons and targets for borrowing, he added.

If they were turned down for bank loans, enterprises could still find sources of capital from credit guarantee funds, factoring companies and asset-based lending.

Another source of capital would be foreign investment funds.

Nguyen Dai Lai, deputy head of the central bank's Credit Information Centre, added that other measures could help such as allowing business associations to establish investment funds or financial companies from their members. "Other forms of collaboration among the associations and the members had better be reinforced," Lai said.

The Government should also issue regulations to bind the responsibility of suppliers to producers.

However, Lai said that sourcing capital still had to come under the task of curbing inflation in accordance with the Government's monetary and fiscal policies.

With the international and domestic economies facing difficulties and the Government cutting public spending, the public-private partnership model would create new opportunities to raise funds, stated vice president of the Viet Nam Chamber of Commerce and Industry vice chairman Doan Duy Khuong.

Authorities estimated that capital demand for infrastructure by 2020 would account for 10-11 per cent of GDP. At least for the coming decade, Viet Nam would need around US$70-80 billion. The Government encouraged every sectors of the economy, including foreign investors, to invest in infrastructure, Khuong said.