Kien’s arrest “a personal affair”: ACB leader

Yesterday’s surprising arrest of ACB’s founder and one of Vietnam’s most well-known tycoons Nguyen Duc Kien will not have any impact on the bank performance, said a senior leader of Asia Commercial Joint Stock Bank (ACB).

“It is a personal issue (of Kien),” said Nguyen Thanh Toai, deputy general director cum spokesman of ACB.

“Kien is no longer a major shareholder, nor a board member, and are not involved in the bank’s board of executives.”

"The detention of Kien is the decision of the authorities so it does not affect the normal operation of the bank," Toai stressed.

Toai told Tuoi Tre that since Kien is no longer a major shareholder, Kien is not obliged to disclose information about the ACB shares owned by him and his family members.

Kien is holding less than 5 percent of ACB shares, Toai said.

Oil, gas shares lead market gains

Shares extended last week's rally on both national stock exchanges yesterday.

The benchmark VN-Index on the HCM City Stock Exchange added another 0.88 per cent to reach 437.28 points, as advancers overwhelmed decliners by 139-70.

The VN30 index, which represents the city's 30 best stocks led by capitalisation and liquidity, also edged up 1.1 per cent to stand at 521.28 points.

The VN30's blue chips performed well, with only infrastructure investment group Tan Tao (ITA) and Phu Nhuan Jewelry (PNJ) retreating.

The overall value of trades on the southern bourse increased slightly, compared to last Friday's level, to VND757.9 billion (US$36 million) on a volume of 41.5 million shares.

Military Bank (MBB) was the most active listed code with 2.4 million shares changing hands.

Oil and gas stocks listed in HCM City have recently been among the best performing shares. Phu My Fertiliser (DPM), gas giant PetroVietnam Gas Corp (GAS) and PetroVietnam Low Pressure Gas Distribution Co (PGD) currently enjoy high profits and have a bright outlook.

The three shares increased by around VND10,000 during the recent month. While DPM rose thanks to the rumour that the company would carry out a stock split, its spokeswoman Nguyen Thi Hien said the company had no such plans.

Meanwhile, GAS saw four straight sessions of increase after news it would be selected to join the international investment MSCI Frontier Index. It also had a surging trading volume of 2.4 million shares last Friday.

"Oil and gas shares deserve to be the mainstay of the market," commented analysts for a securities firm in Ha Noi.

On the Ha Noi Stock Exchange, the HNX-Index put on 0.43 per cent, reaching 70.65 points.

Investors traded over 32 million shares, worth a total value of VND308 billion ($14.6 million).

Major stocks in Ha Noi helped the HNX30 inch up by only 0.4 per cent to 135.17 points.

VNDirect Securities Co (VND) became the most active stock nationwide, seeing nearly 3 million shares exchanged.

Although BIDV Securities Co analyst Hoang Anh Tuan said last week's positive news would continue to boost the market, the monthly consumer price index was announced yesterday afternoon to have risen by 0.57 per cent over July, halting a two-month decline.

This could be a negative factor for the market in the coming sessions.

Late last week, positive news on the economy, including data on stronger credit growth, helped boost the market. In addition, the State Securities Commission said it would shorten payment period for trade of shares beginning from September 4.

C.bank: Credits in city bounce back

Credits in HCMC have vigorously bounced back over the past three months owing to monetary easing, a situation described by an official of the central bank’s HCMC branch as favorable for the city to achieve the credit growth goal.

Nguyen Hoang Minh, deputy director of the central bank branch, said at a credit contracts signing ceremony on Thursday that lending as of this Wednesday had risen 1.5% against the end of 2011.

In the first five months, bank lending in the city contracted and credit growth was a mere 0.3% at end-June. By the end of July, credits had increased 0.86% before almost doubling to 1.5% two weeks later, Minh said.

Minh attributed the considerable credit growth to lower lending rates and better capital absorption on the part of enterprises.

Banks in the city have restructured or rescheduled debts totaling VND46 trillion, or some US$2.25 billion, to enterprises, and disbursed an additional VND118 trillion to help borrowers restructure their own debts.

Most banks have lowered their lending rates below 15% as requested by the central bank, Minh noted. He said over three quarters of outstanding loans in the city now had lending rates under 15%, and there are four banks that have cut lending rates across the board to less than 15%, namely Vietcombank, Agribank, BIDV and VietinBank.

Most loans that are still subject to lending rates higher than 15% are bad debts, consumer credits and loans to high-risk sectors like real estate and securities.

At the credit contracts signing event on Thursday, banks in the city agreed to lend VND122.4 billion to small and medium enterprises (SME) in the city’s Go Vap District, with the lending rates at between 12% and 13% a year. The lenders include Agribank, DongA Bank, Sacombank and VietinBank.

The credits given to SMEs are under a bank-enterprise connection program initiated by the HCMC government and the city branch of the central bank. Earlier, this credit program had been deployed in Tan Binh District, and the next beneficiaries will be SMEs in the outlying district of Can Gio.

Minh of the central bank said the bank-enterprise connection program would help achieve the credit growth target of 8-10% this year.

Pham Hong Phuc, director of the Go Vap branch of DongA Bank, said at the signing ceremony that most loans at his branch carry an annual interest rate of 14%, and over 90% of total outstanding loans at his bank have lending rates below 15%.

Many clients have repaid old loans at the branch and asked for new loans to enjoy a lower interest rate, he said.

JICA suggests trial run of express railway

The Ministry of Transport should consider developing 70 kilometers of express railway for trial operation, the Japan International Cooperation Agency (JICA) suggested at a meeting on Tuesday.

JICA experts forecast the demand for railway transport on the north-south run would rise by three times in 2030, so improving the existing single-track railway is not enough to meet such demand. Moreover, with the current track widths of one meter and 1.067 meters, it is impossible to raise the train speed to 200 km/h.

To improve the north-south railway, it will cost an amount equivalent to that needed to build a new rail line, says a report in Sai Gon Tiep Thi.

JICA proposed schemes to increase the capacity of the single-track railway in the period 2020-2025 and to “double track” a number of sections with heavy traffic.

In particular, the north-south railway will be upgraded from now to 2020. The train speed will remain unchanged at 90 km per hour, but the travel time will be cut from 28 hours to 25.4 hours and the number of trips will be increased from 32 to 50 trips a day.

The total investment cost of this scheme is about US$1.8 billion.

As for the busy rail sections, double-track lines will be constructed to achieve a maximum speed of 120 km/h, shortening the Hanoi-HCMC journey to 15.6 hours. This development scheme will cost some US$14.5 billion.

Furthermore, JICA researchers underscored the need to develop high-speed rail lines, with certain routes for test running as soon as possible. Specifically, JICA recommended two express rail lines being Ngoc Hoi-Phu Ly, stretching 40 kilometers, and Thu Thiem-Long Thanh, some 30 kilometers, to start trial run in 2018.

Regarding the scheme to develop two high-speed rail lines Hanoi-Vinh, 280 kilometers long, and HCMC-Nha Trang, 360 kilometers, JICA said these two routes would be economically viable in 2030 with an economic internal rate of return (EIRR) of 12%. The total investment cost of the two lines is around US$21.4 billion, equal to some 6.3% of Vietnam’s GDP in 2030.

VnSteel lays off 3,000 workers

Due to the current slow consumption, Vietnam Steel Corporation (VnSteel) has cut around 3,000 staff, with 900 taking rotating leave, said Le Phu Hung, general director of the company.

VnSteel has 41 steel plants, employing about 14,000 workers, but most of the factories have been forced to scale down production, operate at night or close because of low demand, Hung told the Daily on Thursday.

Like other sectors, the local steel industry is facing increasingly fierce competition given decreased demand at home and abroad, Hung said. This has adversely affected production activities, thus cutting into incomes of workers in the industry.

For instance, the company has had to halt production at Southern Steel, Phu My, Thai Nguyen and Nha Be for days on end, while suspending other key steel projects over financial constraints.

In a recent report submitted to the Ministry of Industry and Trade, VnSteel called for the Government to take demand stimulus measures to support struggling enterprises in the construction industry.

Economic zones to receive State funds
 
The Prime Minister has approved a proposal to prioritise five coastal economic zones around the country to receive support from the State budget during 2013-15.

The recipients are the Chu Lai-Dung Quat Economic Zone in the central province of Quang Ngai, the Dinh Vu-Cat Hai zone in the northern port city of Hai Phong, the Nghi Son zone in the central province of Thanh Hoa, the Vung Ang zone in the central province of Ha Tinh, and the Phu Quoc-Nam An Thoi Islands in the southern province of Kien Giang Province.

The allocation, to be provided by the State with 65 per cent of their estimated total funding requirements over the next three years of VND2.6 trillion (US$124 million), will be overseen by the Ministry of Planning and Investment.

The State funding aims to bring into full play the potential of these selected economic zones to contribute to national economic growth as well as drive the development of other economic zones, according to the ministry.

Poor-quality planning, over-rapid development and dispersed investment have been blamed for hindering growth of 15 coastal economic zones nationwide. Together, the zones cover a total area of over 662,000ha.

The nation has invested about VND11 trillion ($524 million) in developing the infrastructure of these zones over the past decade.

HCM City hosts security expo

More than 110 local and foreign companies will take part in Secutech Viet Nam, an international exhibition and conference on security held in HCM City from August 22 to 24.

It will feature more than 200 booths displaying latest security products and solutions, including video surveillance technologies, fire prevention and safety equipment, intrusion alarms, management software, home automation and integrated solutions.

The three-day event, organised by the Viet Nam Advertisement and Fair Exhibition Joint Stock Company and the Messe Frankfurt New Era Business Media Ltd, will be held at the Sai Gon Exhibition and Conventional Centre in District 7.-

CT Group goes on buying spree

C.T Group has acquired Thien Loc Investment Company, developer of the Thien Loc Residential Project in HCM City, but refused to divulge the value of the deal.

The new owner will continue with the development after splitting it up into two – the affordable BeeHome 2 and a more upmarket Sun View 3.

It is coming up on a 5,900sq.m area in Go Vap District. It has three blocks, each with 18 floors and a basement.

Medical expo to open in HCM City

An exhibition of health care equipment, drugs, and drug-manufacturing machinery will open on Wednesday at the Tan Binh Exhibition and Convention Centre in HCM City.

More than 250 firms from 20 countries and territories, including the US, Russia, Italy, Switzerland, Germany, India, Hong Kong, Singapore, and Korea, will showcase their latest products and services.

Major Vietnamese companies like Hau Giang Pharmaceutical Company and VIMEDIMEX have taken up half of the 300 stalls at the exhibition.

The four-day event is organised by the Viet Nam Exhibition and Advertising Company, or Vinexad.

Japanese lube plant receives licence

The Japanese Idemitsu Lube Viet Nam Company was granted a licence on Thursday to develop an oil plant for vehicles and machinery in the northern port city of Hai Phong's Dinh Vu Industrial Zone.

The plant, with a capacity of 30,000 tonnes per year, is expected to be completed in 2014.

Local bank opens office in Laos

The Sai Gon-Ha Noi Commercial Joint Stock Bank (SHB) inaugurated its first representative office in Laos' southern province of Champasak on Wednesday.

This is the bank's second overseas representative office following its branch in Cambodia.

The office aims to meet the demands of various groups of customers, especially small-medium sized enterprises and foreign economic organisations.

SHB will become one of the 10 largest commercial banks in Viet Nam, with a charter capital of VND9 trillion (US$428 million) and assets of VND120 trillion ($5.7 billion), after merging with Habubank next Tuesday, according to State Bank of Viet Nam.-

Nation buys $4m in grapes from Chile

Chile exported more than US$4.2 million worth of grapes to Viet Nam during the first half of this year, up 24 per cent year-on-year and higher than the country's total fruit exports to Viet Nam in 2011.

According to the Trade Promotion Bureau (ProChile), last year, Chile ranked fourth among exporters of grapes to Viet Nam, after China, the US and Australia.

The country also exported almonds, apples, cherries and kiwi to Viet Nam in 2011, earning $16 million, a yearly increase of 26 per cent.

With annual consumption of 62kg of fruit per person – one of the highest in the world – Viet Nam was considered a prime market for Chile, ProChile said.

HDBank, Petechim sign strategic deal

The National Petrol Export-Import Corporation, or Petechim, has become a strategic customer of the HCM City Development Joint Stock Bank, getting access to loans on preferential bases and services at low rates.

Following a deal they signed recently, the bank will in turn become preferred choice of service provider for currency management, international payment, e-banking, bill payment, and others for Petechim, its group companies, and all their employees.

They will also join hands to explore investment opportunities in future.

On August 13 HDBank was permitted by the State Bank of Viet Nam to increase its credit growth to 30 per cent this year, meaning its outstanding loans can rise to VND23.115 trillion (US$1.11 billion) by year-end.

Exports exceed imports in 7 months

Vietnam earned US$63.55 billion from exports in the first seven months of this year, reaching a trade surplus of approximately US$90 million, according to the national customs agency.    

Vietnam Customs statistics show that seven-month imports hit US$63.46 billion, up 8.1 percent from a year earlier.

In July alone, exports fetched US$10.19 billion, 3 percent more than the previous month, while imports rose 0.8 percent to US$9.61 billion.

During the seven-month period, total national trade value reached US$127.01 billion, a year on year increase of 13.8 percent.  

Phones and accessories recorded the highest export growth rate of 250 percent to notch up US$6.2 billion.

They were followed by computers, electronics and accessories (US$4.04 billion, 83.6 percent), vehicles and accessories (earning US$2.64 billion, up 57.4 percent), machinery and equipment (US$3.09 billion, 39 percent), footwear (US$4.14 billion, 14.2 percent), and garments (US$8.27 billion, 9.3 percent).

Among farm products, seafood exports rose 6.8 percent to US$3.39 billion. Consignments to the US brought US$871 million back to Vietnam, up 13.4 percent, while those to the European Union earned US$651 million, down 14.7 percent, to Japan US$595 million, up 27.1 percent, and to the Republic of Korea US$278 million, up 11.5 percent.

Worthy of note is that rice exports saw an increase of 0.3 percent in volume to reach 4.73 million tonnes, but a fall of 7.4 percent in value to earn just US$2.15 billion.

Vietnam has rarely achieved a positive balance of trade as its economy relies heavily on imports of equipment and materials.

A trade surplus is an important factor in maintaining the exchange rate and increasing foreign currency reserves.

However, the consecutive trade surpluses in recent months indicate domestic industrial production is still in a fix. They also raise concerns about difficult times ahead for businesses in the coming months.

A recent survey conducted by Vietnam Report JSC, a leading business rating company, revealed that up to 46 percent of businesses questioned think the national economy will not be out of the woods in 2013.

Worries about the recovery of the national economy, low consumer demand and declining orders are forcing businesses to think twice before spending money on imports.  

Vietnam-Customs Union trade on the rise

Manufacturing mobile phones and accessories at Samsung Electronics Vietnam (Photo:baohaiquan)

Two-way trade value between Vietnam and the Russia-Belarus-Kazakhstan Customs Union increased significantly in the past seven months of this year.    

Bilateral trade between Vietnam and Russia rose 34 percent to fetch US$1.34 billion, according to the Vietnam Customs.

Of the total, Vietnamese exports generated US$821 million, up 34 percent, while imports hit US$516, up 39 percent year on year.

Phones and accessories were Vietnam’s major export item, making up 40 percent of the country’s total exports to the Russian market.

Russia is Vietnam’s 22nd largest trade partner.

Two-way trade between Vietnam and Kazakhstan also saw impressive growth of 91.3 percent to rake in US$41 million.  

Vietnamese exports rose 220 percent to earn US$32 million, while imports went up 27 percent to gross US$9 million.

The Southeast Asian economy mostly shipped phones & accessories and seafood to the Central Asian nation, and imports steel and metals.

Meanwhile, bilateral trade between Vietnam and Belarus declined 31.7 percent year on year to US$100 million.
Notably, Vietnam earned just US$5 million from exports to this market, down 40.6 percent. Its major export staples included seafood and rice.

Gloomy outlook on Vietnam’s economic recovery

It’s no easy task to keep Vietnam’s economic recovery on track, according to a recent survey on economic restructuring conducted by Vietnam Report JSC.
 
The survey was based on questionnaires from the 500 largest Vietnamese enterprises (VNR500), the top 1000 income tax payers, and the 500 fastest-growing businesses in Vietnam.

Most businesses surveyed expressed pessimism about Vietnam’s economic prospects in 2013 although the country is on the way to recovery.

More than half of them stated that the economic situation will not improve in the second half of 2012, and some believed it may even get worse. However, they are all focused on overcoming difficulties and challenges to keep their business operations purring along.

They said they would accept possible losses in the last months of the year, and even see their staff being made redundant.

More than one third of businesses stressed the need to restructure their operations, but they found it difficult for lack of qualified personnel to foresee business risks and do good planning.

Local businesses, especially those small-to-medium-sized, attributed their limited production to the shortage of investment capital, as banks refuse to offer them incentive loans.

Even the larger private ones insisted that the Government should focus on economic restructuring instead of providing bailout packages and loosening monetary policy.

Bringing Vietnamese goods to rural areas

To hold sway over the domestic market, Vietnamese companies must develop a long-term strategy to improve the quality of their products while maintaining reasonable prices and their prestige.

In recent times, the “bringing Vietnamese products to rural areas” programme has made significant contributions to developing the domestic market and promoting the “Vietnamese people using Vietnamese products” campaign.

Through many programmes launched by local departments of industry and trade, trade promotion agencies and associations across the country, rural people are now familiar with a wide range of products bearing Vietnamese trademarks which are sold 5-10 percent lower than normal market prices.

Nguyen Thi Xuyen from Can Thanh town, Ho Chi Minh City, says farmers are very happy with the programme as they can now access high quality goods at reasonable prices.

Most businesses are set to expand their distribution networks rather than just increasing their turnover.

Dinh Thi Hien from Chau Thanh district, Tien Giang province, says she likes Vietnamese products as they are of good design and high quality. “I think Vietnamese people will stick with the use of home-made products,” she adds. “This explains why 80 percent of all items on display at rural fairs are of Vietnamese origin.”

For many businesses, participating in such fairs will not only help them clear their inventories in the short run, but also build trust in the long run.

Vinamilk Public Relations Manager Bui Thi Huong says preference for home-made products like Vinamilk has led to a 40 percent increase in the company’s productivity and turnover.

No businesses deny the rural market is potential, but how to corner it is another matter. Many have realized the need to link distribution networks between cities, provinces, and regions, even between remote and mountainous districts, in addition to improving the quality and designs of their products, and lowering prices to meet customer taste and demand.

Nguyen Thi Thanh Huyen, Director General of Garment Corporation 10, proposes expanding the concept of “giving priority to the use of Vietnamese products”.

She argues that domestic customers should persist with the use of home-made products, and businesses on their part should increase the quality of their products and services.

Since the first trade fair in March 2010, the Vietnam Business Studies and Assistance Centre (BSA) has organised more than 80 similar fairs to bring Vietnamese goods to rural customers across the country.

The centre’s director Vu Kim Hanh says the programme has supported many businesses in delivering their products directly to the hands of customers and building up their trademark reputation.

Son La hosts trade exhibition with northern Laos

Around 150 stands representing local businesses in Vietnam's Son La province and northern provinces in Laos are on display at a trade exhibition in Son La from August 18-25.

The expo is divided into two sections, one showcasing images and items illustrating the special solidarity, friendship and traditional cooperation between Son La and northern provinces in Laos.

The second section features industrial, forestry and agricultural products from the two countries, as well as traditional handicrafts such as rattan and bamboo products, and brocades.

The exhibition provides a good opportunity for the two localities to promote their economic potential and boost trade and investment.

 Wrapping film faces anti-dumping suit from Malaysia

The BOPP (Biaxially Orented Polypropylene Films) made by Vietnam, Taiwan, Thailand, China and Indonesia will be under anti-dumping duty investigation by Malaysian government.

The information was announced by the Vietnam Competition Authority (VCA) under the Ministry of Industry and Trade on August 17.

The plaintiff San Miguel Yamamura Plastic Films Sdn. Bhd accused that the Malaysian industry has been seriously injured due to price undercutting and depression from these alleged countries.

The Malaysia authority has selected January 1, 2011 as the starting point of the negotiation, and the process lasts through December 31.

The VCA has urged relevant domestic businesses to actively cooperate with Malaysian authority to avoid unwanted charges against BOPP manufacturers.

Vietnam aims to boost exports to Russia

 A series of events to promote Vietnamese agricultural exports will be organised on September 15-23 in Moscow, according to the Ministry of Agricultural and Rural Development.     

The events will offer Russian investors the opportunity to gain information about the investment environment in Vietnam.

They will also introduce Vietnamese agro-aqua-forestry products to Russian importers.

A Vietnamese delegation will work with relevant Russian agencies to strengthen bilateral cooperation on human resources training programs and regulations on the quality of imported products.

 Three high-tech plants under construction in Ninh Thuan

A ground-breaking ceremony for three high-tech plants at Phuoc Nam Industrial Park (IP), invested at more than US$100 million, took place in Ninh Thuan province on August 18.

The Semar Motors plant will be built on 10 hectares of land at a cost of US$11 million. It will manufacture high quality motors using the state-of-the-art US technology.

A brick production plant invested at more than US$28 million will produce environmentally friendly, heat resistant bricks with US and Taiwanese technologies.

An waste treatment plant costing US$65 million will deal with industrial waste and turn it into a renewable energy.

The waste will be treated using high-tech methods that do not produce harmful exhaust gases and create products that are useful for the public and the environment.

The three plants are being built by the Slovakia MBM Group and Vietnam MBM Corporation over a period of eight months. Once put into operation, they will accelerate the industrialisation and modernization of Ninh Thuan province.

Vietnam, Laos boost border exchange

A seminar to discuss promoting tourism, economic, and cultural exchanges between areas along the border of Vietnam and Laos was held in Ha Tinh on August 18.   

Representatives of State tourism management agencies and travel agents from the two countries proposed measures to iron out snags and promote tourism cooperation in the future.

The two countries share a 2,340km border between 10 provinces in Laos and 10 in Vietnam, with seven international border gates, six main gates and 17 sub-gates, serving as gateways for mutual exchange and contributing to the economic development of western Vietnam and eastern Laos.

In recent years, the governments and local authorities of the countries have created favourable conditions to develop border tourism.

Diverse tourism resources and the beautiful landscapes along the border are well-suited for ecological, adventure and communal tourism, which have great potential to attract large numbers of visitors and be very profitable.

Chairman of the Ha Tinh provincial People’s Committee Vo Kim Cu said the province has been focusing on tourism development, especially exploiting the potential and advantages of the East-West Corridor.

Ha Tinh has cooperated effectively with its neighbours through the Cau Treo border gate, including Bolikhamxay, Kham Muon, and Xieng Khouang provinces in Laos, as well as the northeastern region of Thailand, to promote cultural exchange, solidarity and mutual understanding.

 Vietnam exports more shrimp to Australia

Vietnam exported US$44.2 million worth of shrimp to Australia in the first half of this year, up 63 percent year-on-year, according to the Viet Nam Seafood Exporters and Producers (VASEP).
 
During the period, exports of processed shrimp accounted for 77 percent of Vietnam's shrimp export turnover from the market, which means the market looks promising for the Vietnamese shrimp industry.

New power station has first boiler drum installed

The first 230 tonne boiler drum was successfully installed in the Mong Duong 2 Thermal Power Plant in Cam Pha City of Quang Ninh northern province on August 17.

Mong Duong 2 is the first and biggest built-operate-transfer (BOT) plant in Vietnam to date with funding contributed by US’s AES Group, the Posco Power Group from the RoK and the China Investment Corporation.

This is a significant milestone on the completion schedule, along with finishing the steel structure and installing the rest of the plant’s boilers.

Speaking at the ceremony, David Stone, the General Director of the AES-VCM Mong Duong Power Company, which is responsible for the project, promised to complete the project on time to help Vietnam to meet its increasing demand for power.

Construction started at the Mong Duong 2 thermal power station in August last year and to date 40 percent of the work has been completed. It currently employs 180 technicians and 2,350 local workers.

The plant is scheduled to be fully operational by 2015, capable of producing 7.6 billion kWh of power annually. The power station will be handed over to the Vietnamese Government after 25 years.

Danang hosts EWEC 2012 Fair

The 2012 International East-West Economic Corridor (EWEC) Trade and Tourism Fair opened at the Danang Fair and Exhibition Center on August 17.    

On show are different kinds of products related to the tourism, electronics, IT, industrial and agricultural machinery, chemicals and fuels and agro-forestry and fisheries sectors.

The event provides a good opportunity for 200 enterprises including 27 from Thailand, Laos, Finland and Myanmar to seek businesses partners and expand their markets.

During the exhibition there will be various activities including a seminar on trade, tourism and investment opportunities in the corridor and art performances featuring Thai traditional dance and massage.

The exhibition, jointly held by the Department of Industry and Trade, the Department of External Affairs and the Department of Culture, Sports and Tourism, will last through to August 21.

Imported fruit under strict examination

All kinds of imported fruit will be carefully checked as from September 2012.   

This was stipulated in Circular 39 issued by the Ministry of Agriculture and Rural Development (MARD) with a view to ensuring food hygiene and safety in the country.

MARD Deputy Minister Bui Ba Bong said that all fruit imported into the Vietnamese market must have clear origin and meet quality requirements. He noted that some kinds of imported fruit have been discovered with a high rate of toxic chemical residue.

According to a recent report by the MARD’s Plant Protection Department, three out of 104 samples taken from Chinese fruits have showed a rate of toxic chemical residue, much higher than the permitted level.

Deformed gold bullions eligible for exchange: SBV

All standardized deformed gold bullions, from Saigon Jewelry Co (SJC) to other brands, will be eligible for trading and exchanging at accredited local financial institutions and gold shops, said the State Bank of Vietnam.

If necessary, they will be converted into normal SJC gold bullions, SBV said on its official website.

Accordingly, the State Bank are finalizing the provisions relating to the SJC gold production, including the provisions of SJC gold conversion warping, smashed, as well as convert the gold bars other brands of SJC gold to issue within a few days.

The central bank also suggested that local businesses and people do not to pressingly sell their deformed SJC or non-SJC gold bullions at low prices as it will affect their own interests.

SJC last Monday stopped buying back deformed gold bullions from local people who want to resell them, stating that the firm had to do so because it was running out of money.

“We have bought back a lot of deformed SJC gold bullion over the past two months without being allowed to reprocess them into normal gold bars,” Nguyen Cong Tuong, deputy head of SJC sales department, told Tuoi Tre.

“This has caused a real stagnancy in the flow of our working capital, so we have had to offset it with bank loans, and paid the interest rates.”

SJC said it had sought for SBV permits to reprocess the gold bullion, but they had not yet been licensed.

12.5pct HCMC firms file foreign employment declarations

Only 500 businesses employing some 4,000 foreign workers submitted their mandatory foreign employment declarations in the first half of this year, a source told Tuoi Tre.

They accounted for some 12.5 percent of total firms hiring foreign employees in HCMC.

As a rule, local enterprises using foreign workers are responsible for filing their periodic reports on foreign employment situation twice a year, on every January 5 and July 5.

However, more than 4,000 businesses employing more than 10,000 foreign workers have failed in submitting the declarations, making up 87.5 percent of the total.

HCMC Department of Labor, War Invalids and Social Affairs has received only a few new submissions on the situation, though it has announced the extension for the H1/2012 submission until August 15, 2012.

Under the current regulations, enterprises will be fined VND20-30 million ($960-1,440) if they fail in reporting the employment of foreign laborers, said an inspector of the department.

The Ministry of Labor, War Invalids and Social Affairs early last week asked local governments and its municipal arms to launch overall inspections on foreign employment situation in their localities and strengthen the management of those laborers.

In particular, local state agencies should pay attention to foreigners who are doing business, running private medical clinics, operating educational jobs, and farming/buying seafood, said the 2761/LDTBXH-VL document from the ministry.

Local firms take body blow with gasoline price hike

Local firms have taken a gut blow with the latest price hike of petroleum products after getting hit hard by simultaneous spikes in the prices of petroleum products, electricity, and cooking gas last month.

Many have stopped production but do not dare to announce bankruptcy for fear of bank foreclosure, according to newswire Vnexpress.

"Enterprises are struggling with so many difficulties, and now we have to live with constantly-rise costs in the face of declining sales,” Truong Vinh Tho, head of the import-export department under Sunhyun Footwear Co, told VnExpress.

“Our orders, which have been dropping since late last year, have dropped by 25 percent year on year, while the transport costs for end products and materials from our plant to the ports/airports and vice versa have been on a stable rise.”

The price hike will not only affect production cost but will drag revenues down due to reduced purchasing power.

"When fuel prices go up, we have to endure the costs by accepting some losses in the short term, but in the long term we have no choice but to adjust prices. When retail prices are pushed up, they will scare off our consumers, "said Tho.

"The price of gasoline will affect our income and create at least a 10-15 percent reduction in our revenues, as our goods are transported to be sold nationwide,” said Vu Ba Duc, Director of Duc Viet Stainless Steel Co.

Similarly Pham Dac Vinh, director of Dac Vinh Co, which specializes in fresh food - agricultural goods in the central city of Da Nang, said that so far the firm has faced a "constant headache" with many difficulties, such as accessibility to bank loans, and now the burden of rising petroleum product prices will exhaust it.

Tran Thai Binh, director of Hoang Gia fruit and vegetable processing firm, said that the rise will affect two aspects, including production cost and consumer psychology.

"People will be more afraid of possible future price hikes and will spend less. As a result, purchasing power will certainly be reduced.”

“We export about 20 tons of vegetables to Europe per month, but this number is likely to drop in the near future because of the price hike," Binh said. As vegetables are not really essential goods in the horticulture basket, customers will be ready to cut spending on them when prices increase.

Pham Chi Cuong, chairman of the Vietnam Steel Association, said that the price hike will add some VND20,000 into the production costs of every ton of steel produced, as steel production needs heavy oil, which was increased some VND500 a kilogram.

"Each year the steel industry produces about 5.5 million tons. With an increase of VND20,000 per ton, the steel industry’s production costs will increase by VND110 billion, a big number in the context of stagnated consumption," he said.

The higher gasoline price will be an even larger burden for the steel industry as it will be added to transport costs.

The VND2,400 added into every liter of gasoline will push transport costs up, while the steel price cannot be increased in such a context. Steel prices are at VND15-16 million VND per ton

Since the price of steel scraps and casts on the world market remain high, the simultaneous price hike of petroleum products and utilities will make it very difficult for steel businesses to survive.

Meanwhile, steel consumption in the first seven months of the year was only 2.5 million tons, down 7 percent over the same period last year.

"There have been a few firm reporting business stoppage, but they can’t declare bankruptcy for the fear of bank foreclosure. Those businesses are like the living dead," Cuong said.

Cement manufactures are also struggling for survival.

As electricity and fuel accounts for 40 percent of the production cost of cement, the costs will go up 6-7 percent with a total increase of up to VND2,400 per liter of gasoline.

Moreover, the average price of electricity sold to cement producers has increased by nearly 45 percent, from VND948 to VND1,369 per kWh. Meanwhile, domestic cement consumption reached 23.6 million tons in H1/2012, down 10 percent over the same period last year.

In the current context of oversupply and shrinking demand, local cement firms have launched many promotion and discount programs to clear stocks. So, any price hike input costs will be a real blow to the industry.

Vietnam Cement Association chairman Nguyen Van Thien said the simultaneous price hikes are pushing the cement industry into a corner.

On August 1, barely a month after the electricity price increased 5 percent, the prices of both gasoline and cooking gas surged by VND900 per liter and VND52,000 per 12-kilogram cooking gas cylinder, respectively.

The prices of petroleum products rose for the third time in a row on Monday, at a range of VND500-1,100 per liter.

Since the beginning of the year, petroleum products have gone up and down five times each. But the total rise is VND5,400 per liter, while the total reduction is only VND3,200 per liter.

Boiler installed at power plant
 
The lifting of the Unit 1 Steam Drum of Mong Duong 2 Power Project – the first BOT coal-fired power project in Viet Nam commenced yesterday in north-eastern coastal Quang Ninh Province.

In a coal-fired power project, the steam drum is considered the heart of the boiler, providing steam to spin the turbine and the generator. The steam drum installation is one of the most important milestones in determining the installation schedule of the boiler and subsequently the overall project schedule.

For the Mong Duong 2 Power Project, the installation of the Unit 1 Steam Drum, which weighs approximately 230 tonnes, signifies the completion of the boiler steel structure and beginning of the boiler erection process.

Speaking at the ceremony, David Stone, managing director of the AES-VCM Mong Duong Power Company Limited, the owner of the Mong Duong 2 Power Project, said "We are extremely happy to witness the lifting of the Unit 1 Steam Drum.

We would like to express many thanks to all the dedicated and skilful engineers and workers for their efforts to achieve this significant milestone today. With more than 3.5 million man-hours achieved without any Lost Time Incidents to date, we are confident we will complete the project on schedule to support Viet Nam in meeting the energy demands of its fast-growing economy."

Construction on the Mong Duong 2 Power Project began in August 2011 and is now 40 per cent complete. There are nearly 180 experts and 2,350 local Vietnamese people currently working at the site.

The Mong Duong 2 Power Project is forecasted to begin commercial operation during the second half of 2015 and will generate 7.6 billion kwh of electricity a year. After 25 years of operation, the Mong Duong 2 Power Project will be handed over to the Vietnamese Government per the BOT (Built-Operate-Transfer) Contract.

AES-VCM Mong Duong Power Company Limited was formed by three shareholders from subsidiaries of the AES Corporation from the US (51 per cent), Posco Energy Corporation from South Korea (30 per cent) and China Investment Corporation (19 per cent). The project's EPC contractors include Doosan Heavy Industries Viet Nam Co Ltd and its subsidiaries.

Small businesses get preferential loans

Banks gave away loans worth VND122 billion (US$5.8 million) on preferential terms to 15 small and medium-sized enterprises based in HCM City's suburban district of Go Vap on Thursday.

The borrowers are in the textile and garment, health, pharmaceuticals, construction, plastics, export, and support industries.

The loans range from VND2 billion to VND15 billion at rates of 11 to 13 per cent, and are for terms of up to a year.

The lending banks were Dong A Bank, Viet Nam Industry and Trade Bank or VietinBank, Sai Gon Commercial Bank or Sacombank, Bank for Investment and Development of Viet Nam, and Bank for Agriculture and Rural Development or AgriBank.

Truong Quang Minh, chairman of the Go Vap District Business Association, said the banks' financial support would create an impetus for the companies' operations.

He urged the lenders to provide further support to SMEs, especially those manufacturing consumer goods and processing farm produce.

Banks given higher credit growth targets

The State Bank of Viet Nam has increased this year's credit-growth targets for a number of commercial banks, hoping to spur lending to struggling enterprises dealing with high inventories and sluggish markets.

The adjustment followed State Bank Governor Nguyen Van Binh's announcement on Thursday that credit institutions would be urged to help boost the nation's economic growth in the second half of the year.

Of the nation's 62 credit institutions, 23 wanted to increase their credit growth quotas. The State Bank has agreed to increase the quotas for 10 banks with lending totals in the first half of the year outpacing quotas.

Earlier this year, the State Bank divided banks into four groups depending upon their performance in the prior year. Banks were allocated credit growth quotas according to their group designations. Group 1 (healthy banks) were given a target of 17 per cent, while Group 2 (average banks) received a target of 15 per cent, Group 3 (below-average banks) a target of 8 per cent. Group 4 (weak banks) were not allocated a credit growth quota.

Average credit growth higher than 15-per-cent was deemed inflationary.

In the first half of this year, however, credit in the commercial banking sector grew by an average of just 1.51 per cent over the previous year, with 69 credit institutions seeing credit decline while 57 others saw growth.

To ease enterprises' access to credit, interest rates have also been lowered. The proportion of outstanding loans in Vietnamese dong with interest rates in excess of 15 per cent per year has fallen to about 29 per cent of total lending, a decrease of 60 per cent since the State Bank asked commercial banks a few weeks ago to refinance outstanding loans at rates below 15 per cent.

The lower interest rate of 15 per cent was aimed at getting banks to share difficulties with enterprises, reducing their profit margins to ensure economic stability. A number of enterprises have remained reluctant, however, to take out additional loans.

"Low interest rates are no longer a vital factor in attracting enterprises," Eximbank general director Truong Van Phuoc told the newspaper Nguoi Lao Dong (The Labourer) yesterday. "Low purchasing power has made them cautious."

According to an Eximbank analysis, Phuoc said, interest costs currently accounted for 24 per cent of business expenditures.

The sharp decrease in lending rates has not spurred businesses to increase borrowing because purchasing power in the market remained depressed, economists agreed. As of the end of July, outstanding loans at commercial banks had risen only 0.57 per cent over the end of last year despite lending interest rates falling from an average of 17-18 per cent to 10-15 per cent.

Many economists have called for new policies to stimulate consumer demand, criticising policymakers for focusing too much on fighting inflation, leading to rapid increase in unsold inventories and an economic slowdown.

With deposit interest rates now average 9 per cent per year and lending rates held below 15 per cent, some have argued that banks have favourable conditions to reduce lendings rates further, to 11-12 per cent.

However, financial specialist Nguyen Dac Hung noted that banks have to allocate 3 per cent of profits for compulsory reserves and maintain a 10-per-cent payment reserve, as well as cover operating costs.

Rising bad debts have also cut into bank profit margins. Some experts have suggested the Government allow commercial banks to write off bad debts against capital reserves.