Inflow of cheap Chinese steel raises concerns

The European Union's anti-dumping duty on stainless steel cold-rolled sheet from mainland China and Taiwan has raised concerns that Chinese steel producers will accelerate their exports to Viet Nam.

Local experts fear that the EU's decision, made in late March, will affect domestic firms who will have to compete with Chinese steel manufacturers.

Vietnam News Agency quoted the Ministry of Industry and Trade's Viet Nam Competition Authority (VCA) as saying that tariffs ranging from 24.3 per cent to 25.2 per cent and from 10.9 per cent to12 per cent were levied on Chinese and Taiwanese steel, respectively.

Pham Chau Giang from the VCA said that Chinese producers were likely to divert a part of their steel made for exports to the Vietnamese market, where the anti-dumping duty on Chinese steel was lower than that in the EU.

Viet Nam currently imposes import duty ranging from 4.64 per cent to 6.87 per cent on Chinese-made cold-rolled stainless steel.

Chinese manufacturers might also build steel factories in Viet Nam to make their products look like they are of Vietnamese origin and then export them to the EU markets in order to avoid the anti-dumping duties there. In that case, Viet Nam will be involved in the European Commission's tax evasion investigation.

Nguyen Van Sua, Vice chairman of the Viet Nam Steel Association, says such a scenario was not impossible. He said that the EU's anti-dumping taxes would result in a steel surplus in China. Therefore, a flood of cheap Chinese steel into Vietnamese market was a possibility, and that could affect the production and business performances of domestic enterprises.

In order to block the inflow of cheap steel, Sua suggested that authorities concerned should strengthen the supervision of the quality of both domestically-made as well as imported steel.

He noted that his association would closely follow information from local steel producers, help control the prices of cold-rolled stainless steel products from China, as well as compare and verify the dumping of these products.

Giang said that the VCA would also closely coordinate with the General Department of Customs and the ministry's Import-Export Department to monitor this issue and draw effective measures in the near future.

Banks need more funds for non-performing loans

Banks will need more provisional funds to support the risk of non-performing loans (NPLs) in accordance with national requirements for controlling bad debts, reported Dau tu (Viet Nam Investment Review) online.

Asia Commercial Bank General Director Do Minh Toan said his bank targeted credit growth of 13-15 per cent and a bad debt ratio of below 3 per cent this year and had arranged a provisional fund of some VND2 trillion (US$95.24 million) for 2015.

This year, the bank planned to sell VND1 trillion ($47.62 million) of NPLs to the Viet Nam Asset Management Company (VAMC) and handle VND1.6 trillion ($76.19 million) in bad debts by itself, he added.

Sai Gon Joint Stock Commercial Bank reported that it had sold VND11.4 trillion ($542.86 million) in NPLs to the VAMC over the last three years, reducing its bad loan ratio to 0.5 per cent by the end of last year.

The bank said it would have to continue to deal with NPLs to improve its financial situation, and provisional funds were likely to be increased.

Viet Nam International Bank also said it would establish a provisional fund of more than VND2 trillion ($95.24 million), though it had held its bad debt ratio at 2.51 per cent last year.

The bank expected its deposits to grow by 8 per cent to VND53 trillion ($2.52 billion) and outstanding loans to increase by 11 per cent to VND42.38 trillion ($2.02 billion) this year.

It planned to resolve some VND3.84 trillion ($182.86 million) in NPLs, predicting provisional funds would rise sharply, with bad debts likely to climb by VND300 billion ($14.28 million) in 2015.

Eximbank leaders said establishing provisional funds was a prerequisite for guaranteeing operational security; hence, it was willing to sacrifice profits to provisions. Last year, a provisional fund amounting to VND3 trillion ($142.86 million) resulted in a pre-tax profit as low as VND68 billion ($3.24 million) for the bank.

The bank planned to sell some VND1 trillion worth of bad debts to the VAMC this year, they added.

The State Bank of Viet Nam (SBV) has urged credit institutions to step up bad debt resolution since January in a bid to reduce the overall NPL ratio in the domestic banking system to less than 3 per cent in 2015, following Government orders.

The lenders have to resolve by June 30 at least 60 per cent of the total number of bad loans they are supposed to handle in 2015. They have to transfer at least 75 per cent of the total debts they will register for sale to VAMC this year, within the same deadline. The deadline for selling all their NPLs is September 30.

The SBV has allowed the VAMC to issue special bonds, worth up to VND80 trillion ($3.76 billion), to acquire bad loans from credit institutions this year. The central bank also required lenders to establish yearly provisional funds amounting to 20 per cent of the value of the bonds they had bought from the company.

Tran Du Lich, a member of the National Financial and Monetary Policy Advisory Council, said selling NPLs to the VAMC was a good way for banks to clean up their accounting balances, but the requirement for provisions would create significant pressure for them.

Ministry works on farm export issues

The Ministry of Industry and Trade has proposed that the Government should establish a working group to resolve difficulties faced by enterprises in consuming and exporting farming and fishery products.

Deputy Minister of Industry and Trade Tran Tuan Anh said the group would have regular meetings with enterprises and associations of the farming and fishery sector to produce timely solutions for difficulties faced by the enterprises as well as for meeting the needs of the market, reported the Nong thon ngay nay (Countrysite Today) newspaper.

The group would ensure efficiency in exporting these products to ensure the country reaches its export target for 2015, Anh said.

The trade offices of Viet Nam via the group would recognise the difficulties faced by local enterprises in exporting goods to foreign countries and would know exactly what kind of support the enterprises need, he said. The offices would also provide market information to the local enterprises regarding the demand for Vietnamese farming and fishery products.

Tran Thanh Hai, deputy director of the ministry's Export-Import Department, said the group would make note of export problems to resolve them as quickly as possible, including the problem of fruit trucks being held up at border gates and the problem of goods receiving warnings or being returned or seized by import markets for not meeting quality standards.

Pham Vu Ha, general secretary of the Viet Nam Cassava Association, said farming products have stalled at border gates because the farmers and enterprises had no knowledge about the import markets, and the policies on support for enterprises from the production to consumption stages were vague.

Ha fears the group would be unable to resolve many of the more complicated problems in consuming and exporting farming and fishery products because of the numerous challenges involved in exporting those products.

For instance, trade activities at border gates involve customs officers, border police and local authorities along the border, he said.

Nguyen Hoai Nam, deputy general secretary of the Viet Nam Association of Seafood Exporters and Producers, said if the ministry and trade offices in foreign countries provided precise information about the export market, the problem of farming products being held back at border gates would be resolved.

Economic expert Pham Tat Thang suggested that the group should cooperate with the relevant sectors in managing farming production to meet the market demand.

US is Vietnam’s largest importer

Vietnam’s exports to the US market in the first four months of the year surged to US$9.93 billion, up 15.7% compared to the same period last year, according to the statistics from the General Department of Vietnam Customs.

The US continues to be Vietnam’s largest importer, followed by the EU with US$9.32 billion (up 9%), ASEAN with US$6.02 billion (a slight decrease of 0.5%) and China with US$4.82 billion (down 3.6%).

In the reviewed period, Vietnam’s exports to the Asian market reached US$24.63 billion.

Meanwhile, China remains the largest exporter to Vietnam with a turnover in the first 4 months reached US$15.3 billion, up 23.4% over last year’s corresponding period. It was followed by the Republic of Korea and ASEAN countries.

Vietnam continues to control baby formula prices until end-2016

The Vietnamese government will continue to apply price ceilings on formula for babies under 6 years old until December 31 next year, as local prices remain higher than those of many countries in Southeast Asia.

The limits will be unchanged from those imposed on June 1, the Department of Price Management under the finance ministry announced at a recent press conference.

Last year the ministry introduced ceilings on 25 brands of Abbott, Friesland Campina, Mead Johnson, Nestle, and Vietnam's largest dairy firm Vinamilk.

The ceilings are set between VND167,000 and VND610,000 (US$7.6-28) per can, depending on the weight.

Retail prices are not allowed to be more than 15% higher.

Thanks to the "stabilization initiative," prices of 708 formula brands have been reduced by 0.1-34% over the past year, according to the department.

A government decree issued in March banned advertisements on foods and dairy products for babies under 2 years old. The department said this policy also brought prices down, by between 1 and 5.5%.

Regardless of the government's efforts to rein in local formula prices in recent years, they are still higher than similar products in most of Southeast Asia.

A survey by the economic department under the foreign ministry showed that in Vietnam each kilogram of formula powder costs US$16, compared to US$14 in Thailand, US$12.9 in the Philippines, US$10.9 in Malaysia, and US$9.5 in Indonesia.

Nguyen Anh Tuan, director of the price management department, said Vietnam's fickle dairy market is subject to "unusual" fluctuations.

He said local businesses are "easily manipulated" by their foreign partners who control supplies of both materials and finished products.

New e-commerce website launched

PeaceSoft Group, the leading group for e-commerce and payments in Vietnam, in partnership with WeShop Global Group (Singapore) and Interpark Group (the Republic of Korea), has launched the first multinational & cross-border retail platform in Vietnam and South East Asia at www.weshop.com.vn.

Consumers are now able to shop for high quality products from the United States, the Republic of Korea and other developed countries, with great deals and promotions.

WeShop provides a complete cross-border shopping process, allowing Vietnamese consumers to experience online shopping from foreign websites as simply and easily as from local sites.

WeShop.com.vn currently supplies more than 200 million diversified products from large brands in the United States, like Amazon, 6PM, Forever21, TopShop, Disney and ToysRus.

RoK firm invests in wireless equipment in Ha Nam

The Republic of Korea’s Ace Technologies has been allowed to begin a wireless equipment production project worth 60 million USD in the northern province of Ha Nam.

The provincial People’s Committee on May 18 granted an investment licence to the group.

Located in the Dong Van 2 industrial park on an plot of over 120,000 square metres, the factory specialises in manufacturing wireless aerials for smart phones and radio frequency filters, with a capacity of producing 300,000 products per year.

The plant will start production in nine months, and is expected to gross about 70 million USD in revenue each year, pay 1 million USD in corporate income tax and generate jobs for nearly 500 workers.

President of Ace, Gwang Young Koo, revealed his ambition of turning the factory into the third biggest earner of the group with annual revenue of 1 billion USD. The plant will serve as a place for technology transfer and high-quality human resources training, he added.

Secretary of the provincial Party Committee Mai Tien Dung said the project is expected to attract hi-tech, manufacturing and small-and medium-sized enterprises.

Local authorities pledged to facilitate business operation and hope more RoK firms will invest in the province, he added.-

Lychee productivity likely to hit 200,000 tonnes

The total harvested output of lychees in the largest lychee growing provinces of Bac Giang and Hai Duong is likely to hit 200,000 tonnes in the 2015 crop, according to the Ministry of Agriculture and Rural Development (MARD).

Of the total amount, 60 percent or 120,000 tonnes will be consumed domestically while the remaining 80,000 tonnes will be left for exports.

The market for fresh lychees mainly covers the northern and central regions, such as Hanoi, Hue and Da Nang. Meanwhile, the southern region is expected to make up 43 percent of the total lychee output for local consumption.

For export markets, besides the traditional Chinese market, Vietnamese lychee will penetrate into Laos, Cambodia, Thailand, Singapore, European countries, the US, Japan and the Republic of Korea.

The Plant Protection Department under the ministry has said that Vietnamese fresh lychees have received a “welcome signal” from the Australian market. Accordingly, lychee growers and processing enterprises need to follow specific technical requirements such as quarantine and packaging standards.

Vietnamese, Lao localities boost trade union links

Trade unionists from Vietnam’s central Thanh Hoa province and their counterparts in the Lao province of Houaphan gathered at a conference in the Vietnamese locality on May 18 to share their experience.

The event focused on measures to make trade union activities more effective, while highlighting the need to popularise legal regulations among workers in private and foreign-invested enterprises.

Ways in which to intensify direct dialogue between employees and employers were also on the agenda.

Participants concurred that trade unions should work to ensure t he interests and rights of both labourers and their companies.

Chairman of Houaphan province’s Trade Union, Chuheu, called on businesses operating in Thanh Hoa to funnel investment in the Lao locality, helping generate more jobs for Lao locals.

He also asked for the Vietnamese locality’s support in training Houaphan’s trade unionists.

The two sides agreed to increase their connections via delegation exchanges and sharing experience, deepening the Vietnam-Laos time-honoured friendship and special solidarity.

Quang Ninh grants investment license for new highway

Authorities in the northern province of Quang Ninh on May 18 handed over an investment license to the Cong Thanh and Phuong Thanh transport construction investment joint stock companies, which will work together on the construction of the Ha Long-Van Don highway in the locality.

The 60 kilometre, four-lane highway will be built using the BOT (build-operate-transfer) model with an investment capital of 14 trillion VND (644 million USD). It will connect Hanoi, the northern port city of Hai Phong and Quang Ninh province.

The new highway is also expected to reduce the volume of traffic on National Road 18, which itself will have a section upgraded, and shorten travelling time from Hanoi to Ha Long city and Van Don district’s Economic Zone. This is expected to encourage further investment activities and socio-economic development in Quang Ninh and key northern areas.

Construction on the project is scheduled to be completed over 29 months.

Vietnam strives to implement WTO’s commitments

Concerted efforts have been made by Vietnam to fully implement commitments under the World Trade Organisation (WTO)’s Trade Facilitation Agreement (TFA), it was revealed at a conference held in northern province of Lao Cai province on May 18.

In his opening remarks, Vu Ngoc Anh, Deputy Director General of Vietnam Customs, said that the agreement contains provisions for expediting the movement, release and clearance of goods.

He highlighted that it also sets out measures for effective cooperation between customs departments and other appropriate authorities on trade facilitation and customs compliance issues.

Nguyen Toan, head of Vietnam Customs’ International Cooperation Department, highlighted that Vietnam has implemented 15 commitments from the Category A list.

The country is preparing to establish a national committee on trade facilitation or an equivalent mechanism in line with the TFA’s requirements.

Relevant ministries are fulfilling documents related to Category B and C to submit for the Government’s approval and for the records of the WTO.

Categories B and C comprise of 23 provisions about things such as information announcements, facilitating trade conditions for prioritised enterprises, online payments and risk management.

The TFA will help reduce trade costs while giving opportunities for governments to create jobs and increase income for their residents, Toan said, underscoring that it also helps enterprises shoot up their competitiveness, boost production and enlarge their markets.

At the event, Peter Bennett, advisor on trade facilitation from the USAID Governance for Inclusive Growth (GIG) programme said that USAID will give guidance for developing and underdeveloped countries to evaluate technical support demands and build capacity.

According to the Organisation for Economic Cooperation and Development (OECD), the ATF is expected to reduce trade expenditure by 14.5 percent for low-income countries, 15 percent for lower middle-income countries and 13.2 percent for upper middle-income countries.

Vietjet Air increases Ho Chi Minh City-Taipei flights

Vietjet Air will increase the number of flights between Ho Chi Minh City and Taipei (China) from five to seven round trips per week starting on June 18, 2015.

The low-cost carrier will offer ticket fares starting at 210,000 VND (10 USD) for return flights.

Flights will depart from Tan Son Nhat International Airport in HCM City at 14:30 local time and return flights will be at 20:00 (local time). Flight duration is around three hours and 25 minutes.

Customers can purchase tickets through its website www.vietjetair.com, www.facebook.com/vietjetairvietnam, and ticket offices nationwide through various payment methods.

The company recently received its 24th A320 plane and will be providing an additional 1,500 flights with 270,000 discounted fares to meet the increased demand for travel in the summer.

Quang Ninh improves infrastructure to shake up tourism

Northern Quang Ninh province has been enjoying an increasing number of visitors over the years, yet there’s still work to be done to further boost the length of their stay in the coastal province, according to Le Quang Tung, Vice Chairman of the provincial People’s Committee.

The improvement of infrastructure and high-quality services are key to achieving this goal, Tung noted.

The locality has opened its door for investment in a number of key projects improving local transportation systems, accommodation, healthcare services, education, and the environment.

Highlights among them are the 284.6 ha Van Don International Airport , constructed at a cost of 250 million USD; the 28.65 km highway connecting Van Don, Mong Duong and Mong Cai; the 100 million USD Van Tien Bridge; and several resort complexes.

Thousands of billions of Vietnam dong from the local budget have been allocated to build roads and deliver electricity to a number of tourist islands, including Co To, Minh Chau, Quan Lan and Ngoc Vung. It has seen a boost in service quality, leading to a rise in the number of tourist arrivals and an increased length of stays.

According to Hoang Duc Hung, General Director of the Viglacera Van Hai Joint Stock Company - the operator of Van Hai Resort in Quan Lan Island - access to the national grid and a reduction in room rates have allowed more and more travellers to visit the island and stay for longer.

Furthermore, Quang Ninh has established partnerships with foreign provinces, including Luang Prabang in Laos , Gangwon in the Republic of Korea , Sarawak in Malaysia , Tottori in Japan , Jilin in China and Chiang Mai in Thailand , in a bid to foster tourism and economic development.

The province expects to welcome 8 million tourist arrivals this year, 3 million of whom will come from overseas, earning 8 trillion VND (367.1 million USD).

It expects to receive around 10.5 million holidaymakers in 2020, generating 30 trillion VND in revenue and creating 62,000 jobs for the local people.

Vietnamese, Lao localities boost trade union links

Trade unionists from Vietnam’s central Thanh Hoa province and their counterparts in the Lao province of Houaphan gathered at a conference in the Vietnamese locality on May 18 to share their experience.

The event focused on measures to make trade union activities more effective, while highlighting the need to popularise legal regulations among workers in private and foreign-invested enterprises.

Ways in which to intensify direct dialogue between employees and employers were also on the agenda.

Participants concurred that trade unions should work to ensure t he interests and rights of both labourers and their companies.

Chairman of Houaphan province’s Trade Union, Chuheu, called on businesses operating in Thanh Hoa to funnel investment in the Lao locality, helping generate more jobs for Lao locals.

He also asked for the Vietnamese locality’s support in training Houaphan’s trade unionists.

The two sides agreed to increase their connections via delegation exchanges and sharing experience, deepening the Vietnam-Laos time-honoured friendship and special solidarity.

Vietnam’s exports to 14 markets exceed US$1 bil

Vietnam exporters are becoming a bigger player in the global marketplace, according to the latest statistics from the General Department of Vietnam Customs.

During the four months leading up to May there were 14 export markets that exceeded the US$1 billion benchmark— four ASEAN markets, five non ASEAN markets in Asia, three in Europe, the US and Australia.

I’m struck by how diversified the products are, said an unnamed representative of the department.

We’re seeing manufacturing starting to expand and more products being made by foreign invested companies in Vietnam.

In the January-April period, the exports to these 14 markets alone reached nearly US$35.2 billion and accounted for 70.8% of the nation’s total exports, which jumped 6.9% on-year.

Sugarcane industry needs to slash costs

Viet Nam needed to improve the competitiveness of its sugar industry's competitiveness so it did not lose out in the regional market, especially when the tax rate is cut to zero by 2018 as part of commitments to the ASEAN Economic Community.

Minister of Agriculture and Rural Development Cao Duc Phat made the statement yesterday at a meeting in Ha Noi to discuss measures to raise the competitiveness of the country's sugar industry.

According to calculations, the cost of sugarcane production in Viet Nam is the highest in the world.

Sugar firms are certain to face challenges such as high production costs, inadequate support policies for farmers, unstable business performance and weak co-operation among businesses.

The current production costs of Vietnamese sugar, averaging about VND12 million (US$550) per tonne, is higher than many countries, including Thailand, Brazil and India. Higher prices mean Vietnamese sugar is unable to compete in the world market.

Minister Phat said it was essential for the industry to focus on developing new sugar seeds with higher quality and quantity, and promote collaboration between production and consumption while developing support products to increase added value.

"We need new varieties of sugarcane seeds for farmers, and any organisations or individuals who know of such seeds can contact the ministry. We do not necessarily have to wait for seeds from the Sugarcane Research Institute," he said, adding that 50 per cent of the current seed varieties were from 15 years ago.

He also called on factories to think about building material zones and applying new technology in cultivation as well as production.

The sugar industry should also take advantage of its own by-products, such as producing fertiliser from sugarcane waste.

Illegally imported sugar was another problem for the industry, with an estimated 400,000-500,000 tonnes of sugar imported each year, so tighter control was needed, participants at the meeting said.

Currently Viet Nam has 305,000 ha of sugarcane plantations with a capacity of 65 tonnes per hectare.

Move to rid ports of old rubber tyres

The Ministry of Finance has proposed the Ministry of Industry and Trade to consider taking used rubber tyres off the list of goods for temporary import and re-export permits.

The intention is to limit stockpiles at ports and check the entry of shipping waste to Viet Nam.

According to the Customs Department, about 2,440 containers of used tyres are currently left at Hai Phong Port, 34 containers at Cai Lan Port, and 28 containers at ports in HCM City.

The main reason why inventories are accumulating at seaports is that many goods owners do not make customs declaration of import consignments and some of them even refuse to receive their goods.

Goods owners mostly import goods for re-exporting them to third countries, especially China. However, they often fail to re-export their products as China has strict policies governing re-exported goods received via border posts, said Nguyen Nhat, the director of the Viet Nam Maritime Administration.

As imports fail to be re-exported, they are disowned and left at ports for an indefinite period of time.

According to the MoIT's analysis, although used rubber tyres are considered as non-hazardous waste under the Basel Conven-tion's adjustment, they still don't meet the criteria required to be imported to Viet Nam.

In addition, thousands of containers carrying large, heavyweight used tyres are lying unclaimed at seaports across the country, limiting storage area and adding to the expenses of preserving goods, besides creating difficulties in inventory management.

It will take time to have these goods examined by appropriate agencies so that they can be classified and provided regulated licences for liquidating them.

Moreover, destructing these goods can seriously affect the environment and pose health risks.

The Customs Department and relevant agencies are trying to deal with the inventory of these goods.

Start-up branding vital to success

Branding is one of the things start-ups should plan for before launch, a conference heard in HCM City last Friday.

Building a brand comprised many steps and start-ups needed to research the market they were about to enter and know their competition to come up with unique and distinctive branding measures, Dang Hoai An, marketing director of Microsoft MDS Viet Nam, said.

Startups need to create "interesting story to tell". They need to think about how to make people believe their products better but more reasonable prices than existing products in the market, she said.

Le Trung Nam, general director of Hoa Thien Phu Pharmaceutical Joint Stock company, said in 2009 his group had started operating with a capital of just VND200 million (US$9,208) and made a nutritional product to treat anorexia in children.

At that time there had been a myriad of nutritional products for children from large companies, but thanks to his company's awareness of customers' psychology and focus on the correct segment, it had been successful.

Today it was one of the leading pharmaceutical companies in manufacturing and distributing traditional medicines and functional foods.

Branding was an unceasing and long-term process for enterprises, he said.

The role of humans in building brands was extremely important, even more important than capital, he stressed.

To be a successful start-up, "You need to have three things: a unique idea, specific and detailed action plans, and a way to approach investors actively."

Dinh Van Loc, chairman of Onnet Joint Stock Company, who began his business with an initial capital of less than VND100 million ($4,606) and specialises in internet marketing, said clever usage of internet marketing tools helped promote brands.

Organised by the Business Start-up Support Centre in collaboration with the HCM City Young Businesspeople Association, the conference attracted more than 500 university students from the city.

It is part of a series of activities related to the 2015 Start-up Wheel competition, which aims to be a forum for young people to present innovative business start-up ideas and business strategies and mobilise funds for projects.

Ministry takes control of statistics for non-State groups

The Ministry of Planning and Investment in a draft amendment to the Law on Statistics, for the first time, regulated the statistics operations of non State-owned organisations, aiming to create a sound legal framework for the statistics operations outside the State sector.

Non State-owned organis-ations could continue to collect and analyse data and provide forecasts to serve research, production and business activities, along with other legal purposes, the ministry added. Private statistics organ-isations would be allowed to provide related services including training, computing and con-sultancy. Expenses for statistical activities of private organisations must be covered by themselves, the draft said.

The draft also suggested several regulations to avoid differences in statistics presented by various government components.

The aim is to ensure that statistics presented by ministries and management agencies are not vastly different from that of organisations under the central statistics office.

According to the draft amendment, ministries and management agencies must send their statistical figures to the central statistics office for evaluation, including statistical contents, the method of calculations, and sources of data.

Duration for evaluating statistics will be three working days for initial estimated figures, seven working days for preliminary figures, and 15 working days for official figures.

The Ministry of Planning and Investment admitted that the statistical figures of the central statistics office and management agencies for same indicators have been different in several cases, causing failures in gauging real economic situations and creating difficulties in analysis and forecast.

This difference in statistics has been caused by the management agencies of various sectors submitting inadequate and inaccurate information reports to statistics offices, violating the impartiality and objectivity of statistics.

The draft law also clarifies on indicators and a data system for the statistics of ministries and management agencies to prevent overlaps.

The draft law will be discussed at the ninth meeting of the National Assembly that is scheduled to start on May 20 and end on June 25.

Fuel stabilisation fund hits $129m during first quarter

The fuel price stabilisation fund balance rose to nearly VND2.8 trillion (US$129 million) during the first quarter of this year.

The finance ministry on Tuesday announced that the fund balance as of December 31, 2014, was VND4.05 trillion ($184 million), and fuel trading firms extracted an estimated VND3.3 trillion ($152 million) from the fund during the three-month period.

While the Viet Nam National Petroleum Group (Petrolimex) posted the highest balance of VND1.92 trillion ($88.4 million) in the first quarter, PetroVietnam Oil Corporation (PVOil) followed with VND285 billion ($13.1 million).

Sai Gon Petro Company was estimated to have a balance of VND254.7 billion ($11.7 million) in the first three months of the year.

The ministry's Price Management Department said the average world fuel price in April rose 2.19 to 13.94 per cent over the previous month. The price of petroleum RON 92 rose 3.88 per cent, diesel 2.29 per cent, oil 2.96 per cent, mazut 6.37 per cent, and crude oil 13.94 per cent.

A litre of petrol increased by VND1,950, following a joint decision by the Ministry of Finance and the Ministry of Industry and Trade on May 5.

The decision pushed the price of RON 92 petrol up to VND19,230 per litre.

The prices of diesel and mazut remained unchanged, while a litre of kerosene was cut by VND258.

The two ministries also asked fuel traders to keep the stabilisation fund stable at VND300 per litre for petroleum and zero for biofuel E5.

They decided to allow using the stabilisation fund while increasing petroleum retail price to ensure that it benefits the government, businesses, and consumers.

More backing sought for industrial infrastructure

The Ministry of Industry and Trade will propose to the government to offer more incentives to attract investments for infrastructure development in industrial clusters nationwide.

This was decided at a conference held by the ministry's Department of Local Industry in central Khanh Hoa province's Nha Trang City yesterday to revise the five-year implementation of the Prime Minister's Decision 105/2009/QD-TTg on the management of industrial clusters and raise development plan for 2016-20 period.

Deputy Minister Hoang Quoc Vuong said that local authorities still faced difficulties while planning and developing industrial clusters.

Experts at the conference pointed out that support in capital was needed to encourage companies. In addition, problems related to environmental protection management, especially waste water treatment, at industrial clusters must be tackled, together with a comprehensive legal framework to enhance the management of industrial clusters.

Statistics show that during 2010-15, the State budget allocated VND674 billion (US$31.2 million) to support investments in industrial clusters, especially in the provinces that have difficult economic conditions.

Some 660 industrial clusters with detailed plans were approved to come up on a combined area of 23,000ha across the country. Of them, infrastructure development projects in 369 industrial clusters were approved with a total capital demand of VND79 trillion ($3.65 billion).

Rising provisional funds slash VN banks' profits

Increasing provisional funds whittled away significant profits of two major banks in the first quarter of this year.

The Bank for Foreign Trade of Viet Nam (Vietcombank) posted a pre-tax profit of about VND1.46 trillion (US$69.52 million), down 3 per cent over the same period last year. It attributed the decline to the establishment of a VND1.52 trillion ($72.38 million) provision, which rose by nearly 27 per cent year-on-year.

Also, the bank's bad debt ratio increased to 2.97 per cent at the end of Q1, from the 2.3 per cent recorded at end-2014, with outstanding loans growing 2.3 per cent during the quarter.

The bank reported significant growth in most business norms, with net revenues reaching nearly VND3.50 trillion ($166.67 million) in Q1, up 20 per cent over the same period last year.

Services were responsible for revenues of VND337 billion ($16.05 million), up 23.4 per cent, while foreign currency trading generated VND471 billion ($22.43 million), an increase of 6.6 per cent.

But securities investments showed less profitability, bringing in only VND44 billion ($2.10 million) for the bank, a decline of 75 per cent year-on-year.

Vietcombank's total asset value also contracted by 6.45 per cent, reaching about VND540 trillion ($25.71 billion) during Q1.

Meanwhile, the Viet Nam Bank for Industry and Trade (VietinBank) posted a total business profit of VND3.07 trillion ($146.19 million) in the first quarter, up nearly 24 per cent over the same period last year.

However, with a provisional fund increasing by 1.5 times to VND1.51 trillion ($71.90 million), its pre-tax profits grew by only 7.3 per cent year-on-year at VND1.56 trillion ($14.28 million).

Also, profits from services declined 13 per cent to VND271 billion ($12.90 million), and profits from foreign currency trading dropped 70 per cent to VND37 billion ($1.76 million).

The bank also suffered a loss of VND43 billion ($2.05 million) from securities investments, while its capital contribution activities saw profits of only VND14 billion, or two-thirds of those in the same period last year.

Further, VietinBank reported a 2.3 per cent decline in total assets, although deposits at this bank grew 1 per cent and lending expanded 2.32 per cent during Q1.

Dau Tu (Vietnam Investment Review) reported earlier this month that banks would need more provisional funds to support the risk of non-performing loans (NPLs), in accordance with national requirements for controlling bad debts.

Several lenders, including Asia Commercial Bank, Saigon Joint Stock Commercial Bank and Vietnam International Bank, as well as Eximbank, have affirmed plans to accelerate such provisions.

Meanwhile, since January the State Bank of Viet Nam has urged credit institutions to speed resolution of debt, in a bid to reduce the overall NPL ratio in the domestic banking system to less than 3 per cent in 2015, following government orders.

New hydropower plant begins operating

Trung Nam Group has begun operation of its Dong Nai II Hydropower Plant in Lam Dong Province, which will contribute to the national grid and help regulate the Dong Nai River's water level to prevent flooding, said company chairman Nguyen Tam Thinh.

He said the company invested VND3.5 trillion (US$162 million) to build the 70MW plant in the upper part of Dong Nai River.

Established in 2004, Trung Nam Group has 19 ongoing projects around the country including the Trung Nam Ninh Thuan wind power plant, Krong No Hydropower 2 and 3 in Lam Dong Province and the Golden Hills Urban Area in Da Nang city.

Vinh Phuc promotion yields progress

Promotion and supportive investment initiatives in the northern province of Vinh Phuc yielded significant progress, according to a province-wide conference in mid-May.

The province's competitiveness index (PCI) ranked sixth among 63 provinces and cities nationwide in 2014, climbing 20 spots in the year.

By the end of the first quarter of 2015, the province continued its growth, counting 193 foreign direct investment projects with US$3.23 billion of investment, and 586 domestic-invested projects with a combined investment capital of $2 billion.

Citi Vietnam has recently won three awards at The Asset magazine’s Triple A Treasury, Trade and Risk Management Awards for 2015, including two country awards for Best in Treasury & Working Capital for Multi-National Corporations and Limited Liability Companies, Best Service Provider for E-solutions and Best Cash Management Solution for a large multinational electronics exporter.

“These awards reflect Citi’s continued commitment to delivering best in class solutions to our clients in Vietnam. Our innovative solutions and technology platforms continue to focus on supporting our clients growth plans in the Vietnamese market,” said Citi Vietnam’s Treasury and Trade Solutions head Rajakumar Ramalingam.

Citi Vietnam last year unveiled advanced technology platforms and e-solutions, CitiDirect BE – the next generation online banking platform for institutions and Citi ® Supplier Finance – a global pioneering supply chain finance initiative targeting large corporations and their preferred suppliers.

The introduction of these platforms and winning the prestigious awards has affirmed Citi’s leading position in seamless innovation and unique products in the market.

Citi was also recognised as the Best Transaction Bank in Asia as well as Best Liquidity management bank and Best ECA bank in Asia among others. Citi additionally won the Best in Treasury and Cash Management Award for the ASEAN region adding up to 31 awards across Asia.

The Asset Triple A Awards are Asia’s defining recognition for excellence in the industry.

The Asset Awards uses stringent methodology, combined with the rigorous approach to the selection of the winners, and are adjudicated by The Asset’s Board of Editors who collectively have several decades’ worth of evaluating industry awards in Asia.

MSN sets $2 billion revenue target for 2015

Masan Group Corporation (MSN), one of Viet Nam's largest private sector business groups, announced its record revenue in the first quarter of this year on May 15.

Masan Group is one of the most powerful food stuff companies in the local market.

During the period, the group's revenue reached VND3.584 trillion ($164.4 million), with an EBITDA (Earnings before Interest, Depreciation and Tax) of VND930 billion ($42.66 million) and VND57 billion ($2.6 million) net profit after tax.

In comparison with the same period last year, the group said its net revenue, EBITDA, and net profit were up 31.8 per cent, 117 per cent, and 150 per cent, respectively.

The firm has set its target revenue for this year at $2 billion.

According to the group, its subsidiary Masan Consumer earned VND2.627 trillion ($120.5 million) during Q1 this year, up 15.3 per cent over the same quarter last year, driven by growth across seasonings, convenience foods, and beverages.

Meanwhile, acting as a new force to drive growth in a consumption-related sector was the acquisition and establishment of Masan Nutri-Science last April, which was seen as a leading platform to serve Viet Nam's US$6 billion animal feed sector.

Masan Group has also acquired Sam Kim Company, which holds 52 per cent and 70 per cent equity interests in Vietnam French Cattle Feed JSC and Agro Nutrition Company JSC, respectively. The group expects to draw $1 billion in revenue from the industry this year.

At the same time, the group has reported that Nui Phao mine produces approximately 20 per cent of vonframe globally.

Vonframe is one of the most valuable metals required in many industries, such as steel, petroleum, and electrical as well as electronic applications. It is also used for making filaments in light bulbs, glass, ceramics, and paint.

Nui Phao mine, located in northern Thai Nguyen province, produces high-quality products from four minerals – vonframe, fluorspar, bismuth, and copper – which are sold to leading customers across North America, Europe, and Asia.

The group is considering listing Masan Resources in the second half of 2015 to provide greater strategic flexibility and the right shareholder base for long-term growth.

On May 18, each share of MSN closed at VND78,000 ($3.5) on the HCM City Stock Exchange.

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