Stock market tumbles on bank executive’s arrest

The arrest of a top commercial bank leader triggered a dramatic fall on the domestic stock exchange on August 21.

Nguyen Duc Kien, a chief executive of the Asian Commercial Bank (ACB), one of the biggest private banks in Vietnam, was detained on August 20 on a charge of illegal trading.

Both Ho Chi Minh City Stock Exchange (HOSE) and Hanoi Stock Exchange (HNX) saw their Vn-Index and HNX-Index tumble 5 percent on average.

After the morning transaction, HNX-Index dipped 5.32 percent to close at 66.89 points, with investors selling off ACB shares at VND24,400/share.

Meanwhile, VN-Index lost 20.72 points or 4.74 percent to 416.56, with up to 248 listed stocks tumbling, and only 9 stocks going up.

This has been the sharpest fall since the Vietnam stock market operated in 2000, according to Nguyen The Minh, a technical analyst of Ban Viet Securities Company.

He said the sudden fall will have a negative impact on transactions in the coming days.

However, he advised investors not to be pessimistic because the sell-off of shares is temporary.

Another stock market expert said that Kien’s arrest will affect not only the banking system and the stock market, but other economic sectors as well.

The investigation agency said that Kien was detained for violations in three different companies where he worked as president, and that Kien is no longer involved in management at ACB.

ACB Deputy General Director Nguyen Thanh Toai confirmed that the arrest has not affected the bank’s operations.

Gold prices shoot up

Domestic gold prices rose sharply to VND43.8 million/tael on August 21.
 
In HCM City, SJC gold was listed at VND43.45-43.55 billion/tael in the morning and at VND43.6-43.74 million/tael in the afternoon.

PNJ gold of DongA Bank fetched VND43.5-43.8 million/tael, while SBJ gold was traded at VND43.5-43.7 million/tael and Bao Tin Minh Chau dragon at VND41.3-41.6 million/tael.

In the global market, after many stable transactions at round US$1,600 /oz, gold prices suddenly went up to US$1,639 when the US dollar exchange rate was down.

Such gold price fluctuations were considered widest in three months and attributed to SPDR’s bulk purchase of 4.23 tonnes to raise its reserve to 1,278.96 tonnes.

Ministry affirms petrol price deregulation

The State allowing domestic petrol traders to decide their own prices is consistent with the Law on Pricing, Law on Competition and the restructuring plan recently enacted by the Government, according to Vo Van Quyen, director of the Ministry of Industry and Trade's Market Department.

The steady increase in fuel retail prices in the last two months has raised much concern about the management mechanisms of authorised bodies and businesses, Quyen told Vietnam News Agency. After local petrol traders were allowed to determine their own prices within the trading band and price adjustment frequency in accordance with the Government's Decree 84 on fuel trading, prices began to consistently rise and fall.

Petrol wholesalers now have the right to fix wholesale prices as well as increase or cut prices in line with the decree.

Decree 84 provides that retail prices can be increased by fuel trading firms when input cost prices change.

On June 20, 2012 the National Assembly voted to adopt the Law on Price in response to the public demand for an effective legal framework to control price manipulation from dominant enterprises in the gasoline and electricity sectors. Under the Law on Price, petrol trading was subject to commodity groups with a view to stabilising prices in local market.

Quyen said the State still controlled prices to make sure that the fluctuations did not affect consumers , and attributed the consecutive decrease and increase in petrol retail price to the fluctuations of the world up-and-down oil prices.

The Competition Law also stipulated that the State was a major shareholder with more than 50 per cent of the stake in the petroleum trading industry.

It was clear that the State did not hand over authority to petrol traders to decide their own prices. The State was now in the process of gradually generating a competitive market by allowing businesses to decide their prices but it had to be finally decided by the State to avoid uncontrolled price adjustment. By doing so, the current petrol price adjustment did not go against the regulations in accordance to the Law on Competition and Law on Price, said Quyen.

 Markets question food price increases by vendors

Tran Thi Kim Hong, a 45-year-old resident of District 4, frequently travels nearly 15km to the Thu Duc wholesale market to buy food items and vegetables instead of getting them at the traditional retail market near her house.

"The price of food at the Thu Duc wholesale market is so much cheaper than traditional retail markets in the city," Hong said.

Hong is among many housewives and consumers in the city who are being pushed to shop elsewhere by the high prices at traditional retail markets, which they say are more expensive than supermarkets as well.

In fact, the intriguing aspect of rising prices at traditional retail markets is that the prices of fresh food at wholesale markets and supermarkets have been falling.

This is the case despite the fact that retail prices of petrol, often a catalyst for prices of other goods, have increased three times within the last three weeks.

On August 15, the price of many vegetables at the Thu Duc wholesale market was lower by VND500-VND2,000 per kilo compared to the previous week.

For instance, the price of gourd and pumpkin, for instance was VND3,000 per kilo (down VND500-1,000), tomato was sold at VND6,500 per kilo (down VND2,000), cucumber, VND3,500-4,000 per kilo (down VND1,000) and kohlrabi VND1,000-2,000 per kilo (down VND1,500-2,000).

Nguyen Thanh Ha, deputy director of the Thu Duc market, said the main reason for the decrease in prices of many foods at the market was that the volume of products coming into the market was increasing, exceeding 3,200 tonnes per day.

While the supply was high, the purchasing power has reduced, leading to oversupply and lower prices of many goods, she said.

Ha said the price of food and vegetables at the wholesale market was likely to remain low in the coming weeks and months because the tough economic conditions were forcing many people to spend less.

This explains why the price of many foodstuffs at the wholesale market remained low despite the fact that the petrol price has increased three times within three weeks, Ha noted.

Traders at the Binh Dien wholesale market also reported oversupply and falling prices.

On August 14, the market received 240 tonnes of pork and more than 900 tonnes of seafood, a rise of 10 per cent over the previous week.

Nguyen Dang Phu, the market's deputy director, said the price of pork was VND44,000 per kilo and that of codfish (class 1) was VND125,000 per kilo (down by VND5,000, over the previous week). Meanwhile, anchovy prices stood at VND23,000 per kilo (down VND3,000) and tra fish at VND23,000 per kilo (down VND2,000).

As prices continued to fall in wholesale market, the prices of many foodstuff and vegetables at traditional retail markets have increased remarkably since the beginning of this year.

Several housewives and consumers have complained that the prices were unreasonably higher, sometimes two or even three times that of wholesale market prices.

For instance, the price of cucumber at wholesale markets is around VND4,000 per kilo while traditional retail markets charge about VND12,000-15,000 per kilo. Corresponding figures for tomatoes and pumpkins are VND6,500 per kilo versus VND13,000-15,000 per kilo and VND3,000 per kilo versus VND8,000-9,000 per kilo respectively.

Vendors at the market claim their high prices are a result of increasing fuel prices, but when asked why prices were falling at wholesale markets at the same time, a few of them told Viet Nam News that people were free to go there.

Some people blamed local authorities for not taking strict action against unreasonably high pricing of several essential goods at the traditional retail markets.

Local media have carried reports recently about many people opting to sell vegetables and fruits at illegal wet markets on HCM City streets because they can earn more money than by working as manual labourers.

The Sai Gon Giai Phong (Liberated Sai Gon) newspaper yesterday cited unnamed experts as saying authorities needed to crack down on vendors at the traditional retail markets who were charging unreasonably high prices for essential goods. They said this was necessary to ensure the rights and profits of both farmers and customers, and would help stimulate purchasing power.

Meanwhile, the Big C and LotteMart supermarket chains are now having a promotion for thousands of products, including fresh food, dried food, cosmetics, electronics and home appliances, offering discounts of up to 40 per cent.

Vietnam’s corporate debt worrying

An unidentifi ed investor follows stock prices on his tablet at a securities firm in HCMC in this file photo. The weighted average debt-to-equity ratio in book value gleaned from the second quarter fi nancial statements of 647 non-financial companies on the nation’s two bourses is among the world’s highest - Photo: TL

HCMC – The weighted average debt-to-equity ratio in book value gleaned from the second quarter financial statements of 647 non-financial companies listed on the two bourses of Vietnam is among the world’s highest, up to 1.53.

Nguyen Xuan Thanh from the Fulbright Economics Teaching Program unveiled the astonishing figure at the 2012 Investment Conference held by Nhip Cau Dau Tu magazine in HCMC on Thursday.

“This ratio is so high compared to other economies, both developed and emerging. For example, the ratio of the U.S listed companies was 1.2 in 2011 and Chinese firms 1.06,” said Thanh.

He cited data proving that this has not happened all of a sudden, but has been the case for several years. But warnings were not promptly given and no adjustment was made.

Vietnamese businesses have increased financial leverage since 2007. Their debt ratios were already at high levels in the early 2000s.

The ratios of accounts payable to equity of 114 companies listed on the Hochiminh Stock Exchange averaged out at 1.2 in 2007.

A survey conducted by the General Statistics Office in 1999-2002 shows that the debt-to-equity ratio was 1.32 in 1999, 1.93 in 2000 and 1.96 in 2002.

But which sector incurs the most debts? Thanh cited the Q2 financial statements of listed firms showing that construction and real estate are those suffering the highest ratios of debt to equity, at above 2.0.

Non-financial companies have an average ratio of 153%, energy 144% and consumption goods 80%, the lowest.

Remarkably, the ratio of State groups and corporations reaches over 1.73, higher than the average 1.5 of listed companies in general.

More worryingly, according to Thanh, debt decline is facing multiple obstacles.

Credit institutions tend to invest in secure financial assets like bonds and valuable papers and consequently, cash flow gets stuck at banks.

Banks have also recently added more “other assets” in their balance sheets.

As for enterprises, those with smooth cashflow tend to borrow less, while the troubled firms want to take out new loans but they cannot do so due to the heavy burden of old debts.

Sharing Thanh’s view, Nguyen Nam Son, board member of Thien Viet Securities Co. and managing director of Vietnam Capital Partners, said: “The financial weakness of Vietnamese companies is alarming.”

The debt-to-equity ratio of local firms is as much as 120%, versus the regional average of 45%. This is an alarming figure, a ratio of over 60% already poses risk of bankruptcy if the market developments are unfavorable,” Son said.

He noted the most typical loss-making companies were those investing in non-core business sectors, regardless of their capability.

“Without long-term financial strategies, Vietnamese property firms have the highest financial leverage in Asia. Most of them might not survive the crisis, as banks are tightening lending. Meanwhile, international funds are always available, but only to transparent companies,” he added.

In the first seven months, the total money supply picked up 8.58% against late 2011. Bank deposits increased significantly while credits only inched up 0.57%.

“Certainly, our country is at the early stages of an economic downturn, with the first sign being the falling credit-to-GDP ratio,” Thanh underscored.

Regulators eye shady marketers

The recent arrests of top managers of the Muaban24 Online Trade and Training Co for alleged fraud through their direct-sale network – aka pyramid scheme – has brought home the urgent need for tightening regulation and oversight of direct sales in Viet Nam.

Multi-level marketing, as it is euphemistically called, is a method of marketing and retailing goods directly to end-users through a network of distributors who are also "members" that is very popular in many countries.

Since it was legalised in Viet Nam 10 years ago, almost 80 companies set up shop, but 23 of them closed and two were shut down by authorities. Twenty others have been punished for flouting regulations and two are now under investigation.

Direct sales firms usually make money by luring people to join their distribution network with a promise of high incomes and persuade them to buy goods to resell and coax others to become their sub-agents with the same promise. All it means is taking money from one to pay others.

"The crux of the problem is that participants pay the high cost and then receive a bonus, which is deducted from the following investors," Scott Balfour, vice president for international legal issues of global direct marketing giant Amway Corp, told a seminar held last week by the HCM City Department of Industry and Trade.

Theoretically, direct sales saves on intermediaries' cut and advertisement costs and offers flexible jobs.

Tran Vinh Nhung, deputy head of the department, said the current legal framework lagged behind market development, allowing operators to take advantage.

Doan Ngoc Minh of the Da Nang Department of Industry and Trade said multi-level companies exaggerated their product quality and functions to push up prices at the expense of consumers.

But it is admittedly not easy to monitor them since direct-sales firms have no shops.

Regulations require them to report every six months but only to the Department of Industry and Trade of the place they registered their business with, making it harder for authorities in places where they expand to.

By the end of last year more than one million people were members of direct-sales networks and they made a total turnover of around US$200 million, up from 881,000 persons and $140 million in 2010.

Securities fraud revealed

Authorities have uncovered violations by several securities companies and arrested their bosses for fraud and flouting regulations, as detecting them has become easier in this sluggish period than when the market was bullish.

The stock market's collapse has meant many shares are illiquid, and many clients doing margin deals do a vanishing act after they lose money.

To retain customers, securities companies routinely flouted regulations related to margin lending and margin calls.

The latest fraud by Sacombank Securities Company (SBS) which "intentionally released untrue information or hid facts about securities-related activities, influencing securities prices."

SBS has yet to release its second quarter financial report as required. According to the first quarter report, the company suffered an accumulated loss of VND1.424 trillion (US$68.5 million) despite selling its building in HCM City for VND355 billion (US$17 million).

Phan Minh Anh Ngoc, chairman of the Rubber Securities Company, has been arrested for investigations of financial problems at the Viet Nam Rubber Financial Company of which he was once general director.

On August 2 the Small and Medium Enterprise Securities Company (SMES)'s chairman Phan Huy Chi and general director Pham Minh Tuan, who were considered responsible for the company's failure to pay clients and other frauds, were arrested.

It too had provided excessive loans to customers in the form of margins, many of whom disappeared leaving SMES in the lurch.

Previously Pham Thi Tuyet Mai, former general director of Vietinbank Securities Company, Truong Duy Son, former chairman of Ha Thanh Securities Company, and Hoang Xuan Quyen, former general director of Lien Viet Securities Company, have been prosecuted for fraud, causing losses, and misappropriating others' assets.

Nguyen Doan Hung, vice chairman of the State Securities Commission, promises that the SSC will improve risk management and oversight of securities companies.

New regulations on risk management will be issued this year to improve the quality of the market, he says.

WTO boosts garment trade

Garment exports have grown at an annual rate of 21.7 per cent in the five years since the country joined the World Trade Organisation, the Viet Nam Textile and Apparel Association said.

Le Tien Truong, its deputy chairman, said exports, which had been worth only US$5.9 billion in 2006, rose to $15.8 billion last year.

Viet Nam has become the second largest garment exporter to the US, third largest to Japan, and fifth largest to the European Union, he said.

The industry accounts for 15-16 per cent of the country's total exports, he said, and employs 2.5 million workers.

WTO membership enabled many garment companies to find new markets as well as enjoy priorities such as the most favoured nation status, he said.

It had also brought many foreign investors into the Vietnamese garment industry, he said.

In 2007 alone the industry attracted 150 projects with a total investment of $690 million.

In 2007-12 there have been 485 FDI projects worth more than $2 billion.

But there have also been many challenges.

The association said the global recession was having a severe impact on the industry, with prices and orders declining significantly.

Truong said the industry's long-time advantage of cheap human resources has also mostly evaporated.

The industry is under severe pressure and faces a risk of losing even the domestic market, he warned.

To improve things, the association urged the Government to tweak its policies to make them clearer.

The Government also needs to clearly apprise the garment industry about its roadmap for implementing WTO commitments.

Petrol prices likely to spur inflation

Increasing costs of some essential goods was likely to have a knock-on affect on the consumer price index (CPI) in August and the following months, after it fell slightly during June and July, predicted experts.

Since early July, costs have slowly been creeping up, with oil and gas prices leading the way. Petrol products have jumped by VND1,500-2,400 (US$0.0714-0.1143) per litre on average.

In addition, water prices have increased by 25 per cent, gas is up by 15 per cent, and power has leapt 5 per cent. Hospital and school fees have also jumped.

Vo Tri Thanh, deputy director of the Central Institute for Economic Management, said that Viet Nam was in the process of international integration, so oil and gas price fluctuations on the global market would be felt here too, putting pressure on the Government's target to curb inflation.

Economist Vu Dinh Anh said that recent increases in the cost of essential goods would push CPI up in August.

"Higher petrol prices will have a direct impact on transportation costs and people's lives. However, they are unlikely to have an immediate effect in August because price surveys are usually completed at the start of the month, and logistics companies only put their prices up on August 15," Anh said.

According to the Ministry of Finance's Price Management Department, August CPI would inch up, partly due to monetary loosening policies applied over the past two months.

Director of the Ministry of Industry and Trade's Domestic Market Department Vo Van Quyen stressed that the impacts would be small and inflation for the year would stay in a single digit.

Thanh predicted that under normal circumstances, inflation would be from 7-8 per cent this year, but if there were unexpected price hikes in the local and global markets, inflation could reach 9.9 per cent.

Nguyen Duc Thanh, director of the Ha Noi National Economics University's Economic and Policy Research Centre, echoed the same thoughts, saying that annual inflation could be kept below 10 per cent because oil prices only affected certain industries.

The outlook for the rest of the year is slow economic growth and poor credit growth, so inflation is unlikely to break into double-digits.

Firms lack skills to build trademarks

Vietnamese enterprises still lacked the skills to build their brands, as building a brand is a long, methodical process which demands that business leaders think very strategically, international and local experts said.

They made this statement at a conference on Viet Nam's trademark development in which more than 200 local businesses participated.

It was jointly organised by the Viet Nam Chamber of Commerce and Industry (VCCI) and the Singapore Consulus Trademark Consultant in Ha Noi on Thursday.

Nguyen Thi Thu Hang, VCCI General Secretary, said that a recent survey on Asian brands reported the leading brands in the region as judged by four major criteria: friendliness, convenience, creativity and innovation.

Under the survey, Vietnamese brands did not perform very well. They only satisfied two criteria, friendliness and convenience.

Helena Pham, Viet Nam market director of Consulus Co, said despite the economic crisis in the EU and the US, Asian economies have retained sustainable growth and the region now played a more significant role in global economic development.

Asia was expected to be a lucrative retail market, but there were too few brands coming from Asia, including Viet Nam. Business leaders should know how to derive higher profits, she added.

To expand business and build the prestige of their brands, companies usually hunt for investors.

However, foreign investors still hesitate to invest in Vietnamese firms because they are not very good at management.

If they want to attract foreigners, they should retain high-qualified leaders and enhance their management capacity in the eyes of international investors, experts said.

Director of Dinh Cao Moi Services Co, Vu Hanh Nga, affirmed that building a brand was a long and ceaseless process in which shortcuts could not be taken. It also involved building a culture of good business practices.

Dragon fruit irradiation stateside not quite easy

Although in principle the U.S. will accept the direct export of Vietnam’s dragon fruits from next Monday and perform quarantine procedures there instead of in Vietnam, local fruit exporters say it is not necessarily easier for them.

The director of an exporting firm said that the dragon fruit irradiation in the U.S. offered his firm one more option, but he still wanted to have the irradiation done in Vietnam for lower risks.

According to the director, there is an irradiation facility in Iowa, and this is a suitable place to irradiate Vietnamese dragon fruits which will then be transported to other states. However, besides the irradiation cost which may be higher than in Vietnam, there is a high possibility that dragon fruits will be returned to Vietnam.

“Currently, in addition to the required irradiation, dragon fruits from Vietnam when imported into the U.S. must have no pesticide residues. If failing to meet the residue requirements in the U.S., export shipments will be returned,” he said.

Nguyen Dong Nghia, an executive of HCMC-based Hong An Export-Import Co., said that the irradiation cost in Vietnam was US$1.1 per kilogram. Therefore, dragon fruit exporters have to consider whether to have their shipments irradiated in Vietnam or in the U.S. as the irradiation cost will affect the selling price.

According to these two exporting firms, under the current practice, dragon fruits when exported to the U.S. must be directly tested by the U.S. Department of Agriculture in Vietnam via local irradiation facilities recognized by the U.S. Dragon fruits will be tested one more time after arriving in the U.S.

Meanwhile, with the irradiation performed in the U.S., exporters may lose their goods in case such shipments fail to meet food safety and hygiene requirements.

Nguyen Thuan, director of Lan Anh Co. in Binh Thuan Province, said his firm used to export dragon fruits to the U.S. but have now shifted to Asian markets such as Japan and South Korea instead due to high transport and procedure costs in the U.S.

“In terms of profits earned from every container of dragon fruits, we will focus on Asian markets, not the U.S.,” Thuan said.

The U.S. will announce officially to the Plant Protection Department under Vietnam’s agriculture ministry about dragon fruit irradiation on August 20, but the exact date for Vietnamese dragon fruits to be irradiated in the U.S. has yet to be set as both sides will have some more meetings on this issue.

Multi-level marketing needs better legal framework

Although a legal framework for multi-level marketing is available, authorities and companies want it to be improved to facilitate this business field.

This view was shared by participants at a seminar organized in HCMC on Thursday by the city’s Department of Industry and Trade and Amway Vietnam Co. Ltd.

Multi-level marketing (MLM) has been present in Vietnam for over 10 years. The Government in 2005 issued Decree 110 governing MLM activities.

MLM, also known as direct selling, is a marketing strategy aimed at retailing goods via a multi-level network of salespeople.

Theoretically, products are directly distributed to consumers in this method. It eliminates the intermediary stage for developing a retail system, thus saving advertising costs and creating jobs for people, including many part-timers.

According to the Vietnam Competition Authority under the Ministry of Industry and Trade, the MLM sales force has grown by leaps and bounds in recent years, from around 235,800 in 2006 to over one million in end-2011.

MLM sales revenue amounted to around VND4 trillion last year, of which the city accounted for VND1.5 trillion.

So far, 77 companies have registered for MLM in the country, including wholly foreign-owned enterprises, and three of them have factories in Vietnam.

Innovative plans to fuel power plant using industrial waste

This month Nam Son waste treatment complex, located in Ha Noi's Soc Son District, will initiate a project to generate power using industrial waste.

The project - the first of its kind in Viet Nam - will include the construction of an incinerator to handle 75 tonnes of industrial waste per day such as rubber, leather, plastic and cloth waste from factories and waste from mills and mines.

It will be equipped with an exhaust fume treatment system and heat recovery system connected to an electricity generator.

The project, worth US$29.2 million with US$22.5 million funded by Japan through the Viet Nam Green Aid Programme, relies on advanced waste treatment technology and has a daily capacity of 75 tonnes. The energy recovered will be used to generate power with an expected capacity of 1,930kWh, thus helping reduce greenhouse effects.

The project will be carried out by the Ha Noi Urban Environment Company (URENCO) and Japanese Hitachi Zonsen. The facility is expected to be operational by 2014, at which point the project will be expanded to other cities and provinces in Viet Nam.

According to the Ha Noi Natural Resources and Environment Department, the city discharges 750 tonnes of industrial waste per day, 60 per cent of which is dumped in the city's outskirt areas.

Farmers discover the power of flowers
 
The flowers planted in rice fields in Mekong Delta An Giang Province may look pretty, but they are there for a more sinister purpose: to attract insects that kill pests.

Thousands of farmers in the province are taking part in a programme launched in Tien Giang Province at the end of 2009 by the International Rice Research Institute, in cooperation with the Ministry of Agriculture and Rural Development's Plant Protection Department.

This year, farmer Tran Duc Thanh of An Giang harvested 4.5 tonnes of paddy from his 0.6ha rice field, an increase of 360 kilo compared to previous crops. He also saved VND600,000 (US$30) in production costs.

A member of the Tan Phu A1 Agriculture Co-operative in Tan Chau Town, Thanh has planted flowers on the edge of his paddy fields to attract bees, ladybugs and spiders, which eat brown planthoppers and rice-leaf folders. By planting the flowers, he can avoid using pesticides.

The province has also taught farmers new techniques and required that they plant quality seeds.

Under the programme model, they must reduce the number of rice seeds sown and the use of nitrogen fertilisers and plant-protection chemicals, as well as the volume of water used for irrigation. Post-harvest losses are also expected to be cut.

Trinh Van Dut, chairman of the Tan Phu A1 Agriculture Co-operative, said the cultivation of flowers near rice fields and the use of advanced farming techniques had helped raise profits by VND3 million ($140) per hectare per crop.

Nguyen Huu An, head of the An Giang Sub-Department of Plant Protection, said that 1,600 farmers in An Giang had planted flowers around 734ha of paddy fields.

He said that An Giang had set up 34 performance models in the area to train thousands of farmers.

Because of cuts in labour costs and pesticides, profits per hectare per crop are VND1.2-1.5 million ($50-70) higher than that of normal paddy fields.

In Vinh Long Province, 25 farmers in a 30-ha area in Vung Liem District's Hieu Nhon Commune have participated in the programme.

"Thanks to the prog-ramme, the costs to spray pesticides have dropped significantly," asid Vo Thanh Hai, deputy chairman of Hieu Nhon People's Committee.

Participating farmers have been given flower seeds, five kilos of rice seeds and advanced farming techniques. Farmers plant the flower seeds 10 days before they plant the rice seeds.

Sunflowers, daisies, cosmos, sesame, okra and other varieties of flowers that are easy to grow and yield many blossoms are planted along fields.

Farmer Ha Thanh Hung in Hieu Nhon's Hieu Minh A Hamlet said that previously he had sprayed pesticides to kill brown planthoppers at least three times for each crop. But now he does not use pesticides.

Vo Van Quoc, head of the Vinh Long Sub-department of Plant Protection, said: "This has reduced pollution significantly and created an ecological balance in the paddy fields."

Quoc said his department was drafting a plan to expand the programme and encourage more farmers to grow flowers to attract useful insects.

About 4,000 farmers, mostly in the provinces of An Giang, Vinh Long, Kien Giang, Ben Tre and Long An as well as Can Tho, have planted flowers along their paddy fields, amounting to a total of 2,000ha, according to the Viet Nam Farmers Association.

Craft villages suffer cash crunch

Binh Nham handicrafts village in the southern province of Binh Duong has, since the beginning of this month, been unusually quiet as the continuing lack of funds to execute orders bit deeper.

Business for the wooden-clog-making village, like many other handicraft villages around the country, has been down for a while due to the cash crunch and rising raw material costs that it did not dare to accept many orders.

Hung Thai Company, which has a 2,000sq.m factory here, has been forced to cut its workforce from 200 during its heyday to 50 now.

Its director, Thai Van Anh Hung, said the company has signed deals for just 100,000 pairs this year compared to the usual 500,000.

In another handicrafts village in HCM City's Cu Chi District, bamboo-products manufacturer Thien Phu Company faces similar difficulties.

Nguyen Thi Ngoc Bich, its director, said her company used to export dozens of containers of products to Taiwan every month.

But it has exported only 30 containers so far this year, she said, because of a lack of funds to buy raw materials and pay salaries.

Nguyen Thi Cuc, chairman of Ba Nhat Co-operative in Binh Duong, said her organisation had partners from 40 countries and territories after 10 years of doing business, but was now losing many of these markets.

Most co-operatives do not have enough money now to buy raw materials, or get loans from banks since they have nothing to mortgage.

Luu Duy Dan, chairman of the Viet Nam Handicraft Villages Association, said many partners had parted ways with Vietnamese companies because the latter were no longer able to execute large orders.

"More than 80 per cent of handicraft villages and co-operatives cannot get credit because they have nothing to mortgage," he said.

As for the financial support fund, he likened it to "salt in the ocean," meaning its resources were too little to help.

Due to their lack of funds, handicraft companies only bought raw materials after getting orders, so if their costs increased suddenly they faced losses, he added.

Bitexco powers up plants

Bitexco  last week put into the operation of the Nho Que 3 hydroelectric plant and started construction on another facility in the mountainous Ha Giang province.

Located in Meo Vac district, the Nho Que 3 power plant has two turbine groups with a capacity of 110 megawatts and an annual output of about 500 million kWh, connected to the national power grid.

Bitexco chairman Vu Quang Hoi said the operation of Nho Que 3 hydropower plant was an important milestone in the company’s power plant investment field, as well as a strong foundation for the success of other power plants. Nho Que 3 was a part of power resource portfolio under national electricity development strategies during 2006-2015.

The company also started the construction on another hydroelectric plant Nho Que 2 at the same time. Located in Meo Vac district’s Can Chu Phin and Xin Cai communes, the Nho Que 2, with two turbine groups and a design capacity of 48MW was expected to generate 225 million kWh per year.

Expected to be finished in 2014, the Nho Que 2 will cost VND1.4 trillion ($67.2 million) to build, bringing Bitexco’s total power output to more than 600MW. The company has more than 10 power plants in its portfolio.

Hue Brewery talks down rumour

Hue Brewery has a strong thirst to dominate the beer market in Central Vietnam and overcome some vicious rumours.

After nearly a year under the management of Denmark-based Carlsberg Group, which acquired the remaining 50 per cent stake in the brewery last October from Thua Thien-Hue People’s Committee, the company made great strides in business and production relevant to its chief brand Huda beer.

New products were rolled out and won plaudits from consumers such as canned and bottled Huda beer and canned Festival beer totally brewed from barley.

The company’s production output hiked 25 per cent on-year in the first six months of 2012.

However, the last two months were tough for the company when it became a victim of groundless rumours that its beverage was contaminated with toxics after being transferred to a Chinese partner.
Its sales figures took a plunge. In the past two weeks, beer consumption in central Quang Binh and Quang Tri provinces shed 20 per cent and this downward trend is spreading.

Hue Brewery’s general director Nguyen Mau Chi confirmed the quality of all the company’s products was strictly supervised by the Danish company and rumours the beer was contaminated with toxics were baseless.

“It’s a false rumour, which was created by our rivals to compete for market share,” Chi said.
Chi said all the company’s human resources were under the agreement with the Danish firm and these would be kept stable during 2011-2016. “Carlsberg has no plan to sell Hue Brewery to other partners,” Chi said.

Thua Thien-Hue Department of Planning and Investment, which granted investment certificate to the brewery, also confirmed Hue Brewery’s business registration certificate was still held by Carlsberg and had yet to be transferred to other partners.

In respect to what will be the best-case scenario for Hue Brewery in dealing with the rumour, Vietnam Standards and Consumers Association deputy chairman Nguyen Manh Hung suggested the brewery find a prestigious scientist or a leading expert to act as its spokesperson. Building and making public a video clip describing Huda beer entire production process, from the phase of material selection to end product control is also a wise move.

LG first brand shop runs promotion

South Korea-backed LG Electronics Vietnam has just rolled out a special sales promotion programme in conjunction with Vietnam National Day September 2 and new academic year’s launching.

The programmme targets customers at LG’s first brand shop in Hanoi’s Lang Ha street and run until September 9, 2012. During this time, customers with bills above VND2 million ($95) will get a ticket to visit the Sky 72 Observatory in Keangnam Landmark Tower’s 72nd floor.

Customers with bills above VND15 million ($715) will also have a chance to get complimentary vouchers worth VND1 million ($47) at Seoul Garden restaurant in Hanoi’s Tran Hung Dao street.

Besides, customers picking up any LG products here will receive a lucky ticket from LG Electronics Vietnam with the opportunity to win valuable prizes like 42-inch LG LCD HD TV sets, smart phones LG Optimus L3, ovens LG MH6049F and 20 present kits including 01 quality T-shirt and 01 LG cosmetic set.

The brand shop is LG’s first in its expansive programme to have in place 20 brand shops across the country in 2012. With more than 200 square metre display area the brand shop was built and designed up to LG brand shop system’s global standards.

The brand shop hosts a premium range of latest LG products ranging from household appliance line-ups like LCD TVs, fridges, air-conditioners, washing machines, ovens to smart hi-tech products like LG Cinema 3D Smart TVs and glassless 3D android phones.
 
Older properties keep hot in cold market  

Many people in Hanoi have  been buying apartments in old residential buildings for fear of fraud and slow construction progress in new housing projects.

While many apartments and condos have a fallen in price and have had a difficult time finding tenants, older residential buildings have maintained their prices.

Tao, a parent from Ha Tinh Province was looking for an old apartment for his child, who is going to a university in Hanoi. The apartment he chose is 34 square metres and located in old residential building in Hoang Quoc Viet Street with price of VND1.2 billion (USD57,000).

Tao said he chose this run-down apartment over other new ones because it is inside the city.

Older apartments near and around city centre, in districts such as Hai Ba Trung or Ba Dinh, often are priced from VND60-70 million per square metre. An apartment in Ba Dinh District, on the other hand, with only 17 square metres has an offering price of VND1.5 billion.

Older apartments in the city are regularly sold for five to six times than those in outlying districts. The slump in real estate market has not had much effect on this particular sector.

The reasons for such high prices despite the bad state and small size of many of these buildings seems to be people's desire to live close to the city. To many, the increased prices are worth paying to maintain convenience in their daily lives.

Not only the customers, but many brokers and investors also prefer older residential buildings because of the notoriously slow pace of construction on new projects.

"I know this apartment is not very pleasant, but at least I don't have to worry about waiting a long time for a place to live," Tao said.

According to many experts, the prices on these old apartments have never dropped. Many rich people prefer to buy modest apartments in run down buildings either to keep or resell them.

3,000 tonnes of illegally-exported of titanium to be auctioned   

The People’s Committee of Quang Nam Province has approved the starting price for auction of more than 3,061 tonnes of titanium confiscated by Maritime Police Zone 2 on August 14.

The information was confirmed by the Vietnam National Coal-Mineral Industries Holding Corporation Limited (Vinacomin). The starting price is VND1.6 million (USD76.1) per tonne and the collected money will go to the state budget. Auction participants must be companies which operate in titanium exploitation and processing.

Maritime Police Zone 2 did not disclose the origins of titanium haul, but said that it had imposed an administrative fine on the violator on August 5.

Vietnam’s titanium ore reserves were estimated at 658 million by the end of January this year.

In the first half of this year, titanium mining and processing revenues hit VND2.07 trillion (USD95.2 million).

Old villas remain popular despite housing market slump   

Despite the slump in real estate prices, old villas in Hanoi are still going for sky high prices.

Hanoi currently has about 1,600 old villas. 562 of them belong to individuals, 1024 are owned by the state and 42 villas in Ba Dinh are used as government property and cannot be bought by individuals.

The French colonial period villas are mostly located in Hoan Kiem, Hai Ba Trung and Ba Dinh districts. A small number of the villas built after 1945 are located in Doi Can, Vinh Ho and Trung Tu streets.

Because of the limited numbers, these villas are offered at high prices.

Small villas are priced at around VND300-500 million (USD14-24,000) per square metre while the villas locate on streets in the city centre such as Ly Thuong Kiet and Tran Hung Dao are being sold at VND500-800 million per square metre.

The villas on Tran Hung Dao Street have the highest prices of VND750-800 million per square metre, while villas in Cua Bac are within the lower priced group of VND450-480 million per square metre. The record price belongs to a villa on Ly Thuong Kiet Street which cost VND1 billion per square metre.

Another reason for such high prices are their prime locations.

Over a year ago, investors willing to spend millions of USD to purchase villas had their hopes dashed after the government banned them from destroying or restructuring the townhouses.

"People flocked to the capital to buy the villas because of their locations. However, it's quite hard to sell the villas now as they cost VND500-800 million per square metre. Not many people can afford them." Nguyen Huu Canh, director of a real estate trading floor said.

A customer also said that although the real estate market was experiencing a slump now, it still remained difficult to buy a villa.

Quang Tan, a company chairman with a great passion for old villas, spent VND120 billion buying a villa on Hang Bun Street. He also paid VND10 billion for its restoration. "Although the house’s value dropped by 20% it doesn't matter, I bought it for the architectural and historical value." he said.

Potential investors eyeing Vietnam's casino law  

The draft law on casinos in Vietnam has stirred public opinion and the interest of potential investors, leaving many to hang the final decision to be made by the Ministry of Finance.

The law would set detailed regulations management and operations of businesses that run casinos and electronic gaming.

The decree will be sent to National Assembly Standing Committee for approval. It would replace Decree 32 issued in March, 2003. It is still unclear whether or not any new law would address the development of the casino industry at large.

Recently, Vu Duc Dam, Chairman of the Government Office told the press that the Government has asked the Ministry of Planning and Investment (MPI) to carry out pilot programmes for casinos in Phu Quoc and in Van Don District, Quang Ninh Province.

The MPI has already sent reports to the NA Standing Committee, who will decide if the casinos should be built.

Dam said the Government is in the process of learning from the experiences of other countries how to manage legal gambling in a socially acceptable way.

Even though a complete legal framework has not been proposed, foreign investors are still showing a lot of interest in the prospects of legal casinos in Vietnam. For example, Los Vegas Sands has been looking into opening casino resorts in both Hanoi and HCM City, which would require an investment of USD6 billion.

The Malaysian corporation, Genting, has also been eyeing a USD4 billion project to build a gambling and entertainment complex in Van Don.

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