Chinese entrepreneurs eye Vietnamese rice market

A delegation from the Chinese Entrepreneur Association (CEA) will conduct a survey in the southern province of Kien Giang as from March 1, according to the Ministry of Industry and Trade.

The survey aims to help Hong Kong businessmen build their strategies and plans to import rice from Vietnam.  

Hong Kong (China) is a major importer of jasmine rice. Over the years, Vietnam’s jasmine rice has attracted key importers in the US, Europe, Australia, China and some other countries in the Middle East.

All bourses seeing green

While there was no significant information affecting the movements of the market this morning, shares continued to increase with the VN-Index adding 1.3 per cent to end the session at 423.89 points.

On the HCM Stock Exchange, gainers outnumbered losers by 198-50. Market value hit VND960.8 billion (US$45.7 million), a 30 per cent increase over yesterday, on a volume of nearly 67.4 million shares.

The VN30 in HCM City, which tracks the country's 30 best stocks, also edged up 1.15 per cent to 476.40 points.

Of the 10 leading shares by capitalisation as updated on Tuesday, property developer Hoang Anh Gia Lai (HAG) continued to hit its ceiling price of VND27,600 per share. Sacombank (STB) was the only leading stock to lose value, retreating 1.6 per cent.

Military Bank (MBB) was the most active code on the southern bourse with nearly 5.8 million shares changing hands.

The most active stock nationwide was Habubank (HBB) on the Ha Noi Stock Exchange with 13.3 million shares. This stock has seen several sessions with volume surges of more than 10 million shares.

The total trading volume on the Ha Noi bourse reached 76.7 million, totalling VND627.5 billion in value for a 12.5 per cent rise. The benchmark HNX-Index closed up more than 1.6 per cent to 66.78 points.

Gold surges after Greece bailout deal

Price of gold in Vietnam climbed on February 22 as global price hit the highest level in the past ten weeks after eurozone finance ministers agreed on a 130 billion euro rescue package for Greece.

Sacombank Jewellery Company bought gold at VND44.55 million and sold at VND44.85 million as of 10.15 am Vietnamese time.

Saigon Jewellery Company, Vietnam’s biggest gold processor and trader, collected the metal at VND44.7 million and sold at VND44.9 million as of 11.17 am Vietnamese time.

Hanoi-based Phu Quy Jewellery Company purchased SJC-brand gold at VND44.8 million and sold at VND44.9 million as of 10.51 am Vietnamese time.

DOJI Gold and Gems Group bought SJC-brand gold at VND44.75 million and sold at VND44.9 million. In the past few days, the company’s trading volume was at just around 650-700 taels of gold per day.

At the beginning of the day, the heavy metal jumped to nearly VND45 million a tael. However, a decline in global price caused local price to retreat.

Domestically, gold fetched around VND1.2 million a tael, higher than global price.

Internationally, gold surged to a ten-week high at the trading session in New York last night after Greece sealed a deal on a bailout which sent the euro to the highest level in the past two weeks, weakening the US dollar, and boosting demand for the precious metal as an alternative asset.

Gold for immediate delivery gained 1.2 per cent to close at $1,755.45 an ounce on the Comex in New York, the highest level since February 3.

Gold futures for April delivery rose $32.6 an ounce, or 1.9 per cent, to close at $1,758.5 an ounce, the highest level since February 2.

In Asia, the metal slid slightly this morning as euphoria after the Greece deal faded swiftly as concerns on implement of unpopular reforms in Greece resurfaced. Spot gold traded at $1,754.5 an ounce at 9.09 am Vietnamese time.

The euro exchange rate against the US dollar remained above $1.32 a euro in Tokyo this morning.

Hanoi, HCM City among most expensive cities in Asia

Hanoi was placed 13th and Ho Chi Minh City 12th among the most expensive cities in Asia in 2011 in terms of three-room apartment rent, according to an accommodation report from ECA International.

In the world, Hanoi ranked 53rd and HCM City 52nd, the report said.

Tokyo was the most expensive city in Asia, followed by Hong Kong and Singapore.

Three-room apartment rents in Hong Kong doubled those in Singapore. Tenants in Hong Kong had to pay around US$11,831 per month for a similar apartment.  

House rents continued rising sharply in China with Shanghai placed 18th and Beijing at 26th in the world’s rankings.

India was also faced with sharply rising rents last year, by 8-10 percent compared to the previous year as recorded in Mumbai and New Delhi.  

In the world, three-room apartment rents increased from US$2,750 to US$3,080 per month on average.

Vietnam sues the US over shrimp dispute

Vietnam has demanded consultation with the US about a number of anti-dumping measures against certain frozen shrimp products from Vietnam.

Vietnam’s official request was announced on February 20.

According to the World Trade Organisation (WTO) regulations, the request for consultation marks the beginning of procedures for resolving disputes.

Consultation sessions open up an opportunity for concerned parties to address the issue and find a compromise solution without further legal proceedings. Within 60 days, if consultation sessions fail, the complainant can submit the dispute to a panel set up by the WTO for consideration.

Germany's Metro hits Nha Trang

Metro Cash & Carry opened an outlet in Nha Trang on Wednesday, its 16th in the country.

Located in Vinh Trung Commune, Metro Nha Trang sells 25,000 food and non-food items. Around 95 per cent of them are locally produced and tailored to the specific requirements of businesses in Khanh Hoa – where Nha Trang is — and other central provinces, the German wholesaler said in a press release.

Metro invested US$13 million in the Nha Trang outlet which employs around 400 people.

Vietnam to export 100,000 – 150,000 tonnes of sugar in 2012

The Ministry of Agriculture and Rural Development (MARD) has proposed exporting between 100,000 – 150,000 tonnes of sugar this year to resolve difficulties businesses are facing.

The MARD has sent a document to the Ministry of Industry and Trade (MoIT), asking it to consider the proposal.

According to the MARD, the total supply of sugar is expected to reach 1.57 million tonnes this year, of which 1.4 million tonnes will be for domestic consumption, 100,000 tonnes for accumulation in the next sugarcane crop and 70,000 tonnes in surplus. However, the excess volume is likely to exceed the 70,000 tonne mark due to sugar being smuggled into Vietnam.

The MARD asked the MoIT to ship up to 150,000 tonnes abroad in an attempt to facilitate the trade of sugar and help businesses mobilize capital for production.

The MARD also recommended that the MoIT set a deadline for importing 71,000 tonnes of raw sugar within the import quota by June 2012 and store 200,000 tonnes for consumption over six months.

Singapore company provides VietJet Air ITM services

The Singaporean Airlines Engineering Company (SIAEC) on February 20 signed a contract to provide Vietnam's low-cost air carrier, VietJet Air, with inventory technical management (ITM) services.

Under the contract, SIAEC will provide VietJet Air’s fleet of Airbus A320s with ITM services including maintenance, component repair and warehousing.

These services will help ensure the safe operation of the fleet, save maintenance costs and make effective use of available warehouses for both sides.

The agreement, signed at the ongoing Singapore Airshow 2012, is in line with the VietJet Air’s strategy to modernize and improve the professionalism of its members.

VietJet Air Deputy Director General, Priram Singh, said that the carrier decided to cooperate with SIAE, one of the most experienced and prestigious partners in the world, to meet the strict requirements for the operation and maintenance of its Airbus fleet in the future. The airline aims to provide its passengers with low cost, friendly, punctual and convenient flights in accordance with international norms.

Priram added that the contract marked a turning point in the airline’s plan to expand its air routes to other Asian countries in 2012.

An SIAEC representative said that with its wide network of warehouses and technical staff across the globe, it can provide VietJet Air with reliable technical support and diverse warehousing components to match the airline’s future plans.

Petro Vietnam purchases oil from Ecuador

The Vietnam National Oil and Gas Group (Petrol Vietnam) and Conoco Phililips, the third largest integrated energy company in the US, have decided to purchase 7.5 million barrels of oil from the Petroleums of Ecuador State Enterprise (Petrol Ecuador).  

The oil will be delivered to the customers in March, April and May this year.

Petrol Ecuador has also sold 1.1 million barrels of Napo crude oil to Noble Americas, another US energy corporation.

Last year, Ecuador produced nearly 500,000 barrels of oil a day, of which Petro Ecuador and Petroamazonas, its two largest state-owned oil companies, accounted for 60 percent of the volume.

Vietnam - Indonesia trade likely to reach US$5 bil this year

Vietnam and Indonesia hope to achieve US$5 billion in their two-way trade this year, three years ahead of schedule.

The US$5 billion target was set by during Prime Minister Nguyen Tan Dung’s visit to Indonesia late last year. However, bilateral trade in 2011 hit US$4.5 billion, raising high hopes that the set target for 2015 will be beat this year.

In January 2012 alone, Vietnam earned nearly US$200 million from exports to Indonesia and imported US$162 million worth of goods from its partner.

HCM City to change export structure

HCM City is targeting an annual export growth rate of 17 percent under a programme aimed at restructuring its exports.

The programme also targets raising the city's export turnover (excluding crude oil) to US$100 billion a year by 2015, the Thoi Bao Tai Chinh Vietnam (Vietnam Financial Times) reports.

Under the programme, turnover from export services account for 60 percent of the city's total export value while competitive products such as garments and textiles, footwear and processed seafood are expected to make up 35 percent of all exports by 2015.  

The programme is also set to help accelerate human resource training and to make products with advanced technology contents become key exports by 2020.

Huynh Khanh Hiep, deputy director of the municipal Department of Industry and Trade, said local exporters have been affected in recent times due to the global economic downturn and high inflation.

Material import price hikes, tighter monetary policies and high lending interest rates have significantly affected the city's current export growth, said Hiep.

"In order for the city to achieve high and sustainable export development in the coming months, it is necessary that it has appropriate direction for development and practical measures to rapidly shift the export structure in line with its advantages," Hiep said.  

Fertiliser subsidies not helping farmers

Input material subsidies for fertiliser production aims to support farmers, but facts have shown that farmers cannot buy fertiliser products at low prices while only producers and intermediaries benefit from the policy.

Nguyen Dinh Hac Thuy, vice chairman and general secretary of the Fertiliser Association of Viet Nam warned that uncertain policies of price subsidisation were responsible for the recent hot and cold fluctuations in the market.

He explained that the State was still subsidising the most important input materials for fertiliser production including gas and coal, while also applying preferential taxes on domestic fertiliser enterprises, which distorted prices.

Although fertiliser enterprises only had to buy gas at a price equal to 50 per cent of the market price, the price of fertilisers sold to peasants were still at high levels, Thuy said.

Nguyen Tien Thoa, director of the Ministry of Finance's Price Management Department, told the Tien Phong (Vanguard) newspaper, that if the subsidisation mechanism had not been applied, the prices of coal for producing fertiliser would have increased by between 21 to 82 per cent.

Accordingly, the prices of fertiliser products must be raised by between 20 and 24.25 per cent, he said.

Thoa added that the subsidy had distorted the fertilizer market, creating unhealthy competition among fertiliser makers and causing importers difficulties in doing business.

Thuy agreed, saying that there was a time when prices of domestically-made fertiliser products were 10 to 15 per cent lower than market price; but they only met a maximum 40 per cent of demand. However, importers could not import fertilisers to meet the remaining demand, as the more they imported, the more they lost.

Nguyen Tien Dung, general director of the Agricultural Products and Materials JSC (APROMACO), said the production cost of urea fertiliser was VND4.5 million (US$214) per tonne, while the import price of the same kind of fertiliser was $450 per tonne, equal to more than VND10 million ($476) per tonne.

The gap between the domestic production cost and the import price was too big, it meant that only domestic producers and intermediaries could profit, he said.

He said that if the subsidy mechanism was removed, domestic fertiliser companies would still be able to produce fertilisers and sell them at prices better than those imported as import prices including transport and insurance costs were often higher.

Dung suggested that the State support farmers through raising the purchase price for their produce instead of subsidising input materials of fertiliser production.

Supermarkets gain hold in VN
 
Convenience, stable prices and consecutive promotion campaigns have helped modern retail channels attract more customers, with year-on-year turnover growth of 20-25 per cent in HCM City.

Meanwhile, consumption at wet markets have fallen sharply in recent years.

By the end of 2011, HCM City had 200 supermarkets, double the figure compared with 2005. In addition, the number of convenience shops had grown four times with popular names such as Shop&Go, Co.op Food, Satramart and Vissan.

Modern retail facilities, including supermarkets, trade centres, shopping malls and convenience shops, have gained 35 per cent of total retail turnover in HCM City, compared with an average of 21 per cent nationwide.

In return, traditional markets have dropped from 300 in 2005 to 200 in 2011.

The figure shows that shopping habits of local residents had moved from traditional to modern facilities.

Statistics from one market research company show that customers have increased their spending in supermarkets, from VND627,000 in 2005 to VND1.5 million in 2011.

"They shop at modern retail facilities because of convenience and health and to satisfy their shopping passion," a staff member from the company said.

Survey results also reveal that 80 per cent of 1,000 participants visit supermarkets every week compared to 12 per cent a decade ago.

The major factors attracting customers are convenience, stable prices due to long-term storage of commodities, ample choices and quality of goods.

Cool but large spaces and nice displays along with additional services, including home delivery, online shopping, card payments and free parking, have also attracted customers.

Supermarkets have launched promotion campaigns, attracting customers with low prices.

Several years ago, the number of commodities doubled from 30,000 to 60,000, and customers can find everything they need in supermarkets, including fresh food.

Supermarkets have reconfirmed their strength by creating their own trademarked goods.

Co.op Mart has 500 products of its own that are 5 – 10 per cent cheaper compared with the same goods.

Thanks to savings on advertisement expenditures, supermarkets can reduce the price.

Vissan, for example, has manufactured a series of new food products and ordered more new goods.

Big C has cooperated with 50 companies to produce its own products, with prices 5-30 per cent cheaper than comparable products.

"Viet Nam still has potential for global retailers thanks to its huge population, and big and stable consumption," Pascal Billaud, general director of Big C Viet Nam, told Sai Gon Giai Phong (Liberated Sai Gon) newspaper.

"The biggest challenge for investors is not the legal framework, but the cost of renting land, which has become more and more expensive," he added.

Belgium backs development of SMEs

New policies to promote the efficient operation of business incubators should be developed for short-term assistance to small – and middle-sized enterprises (SME) during their start-up phase, according to Bruno Angelel, Belgian Ambassador to Viet Nam.

In its work with Viet Nam, Belgium will also encourage SME start-ups.

Belgium is in discussion with the Ministry of Science and Technology on (MoST) how it can support the drafting of a legal framework for technology business incubators, the setting up of pilot technology, and creating pilot funding programmes for incubating new spin-off SMEs.

These activities are part of the bilateral Indicative Cooperation Programme signed between Viet Nam and Belgium. This year, many business opportunities have emerged after the creation of the most recent programme activity.

Financed with a grant of 60 million euros (US$79.6 million), the programme in the 2011-2015 period aims to assist Viet Nam's socio-economic development, more specifically in the areas of water and sanitation in the context of urbanisation and climate change and governance.

While poverty reduction remains the core goal of the cooperation programme, greater attention will also be given to new and emerging challenges for Viet Nam, including climate change, lack of sufficient quality human resources, development of a green-based economy and gender disparities.

About 30 million euros ($39.8 million) will be allocated to, among others, a water and sanitation programme in the framework of climate-change adaptation and mitigation in the three provinces of Ninh Thuan, Binh Thuan and Ha Tinh.

The capacities of local governments will be strengthened to ensure that threats of rapid urbanisation and climate change are properly mitigated.

The programme aims at strengthening institutional capacities of the three provinces to apply the national strategy on climate change, while covering issues related to regional spatial planning, urban planning and water management.

As for governance, both governments will continue their joint efforts in the field of planning reform. It is expected that more donors will join a multi-donor trust fund to encapsulate experiences in the field, and ensure a roll-out of planning reform to all provinces in Viet Nam.

To address the issue of qualified human resources in Viet Nam, Belgium has tripled the funding of its scholarship programme to 12 million euros in the form of a Capacity-Building Facility.

Bruno Angelel said Viet Nam and Belgium had enjoyed good economic relations for almost 40 years, and this relationship would be strengthened by the visit of a Belgian Economic Mission to Viet Nam on March 11 – 16.

The mission's aim is to boost economic, trade and technological cooperation between the two countries.

The mission will be presided over by HRH Prince Philippe of Belgium, accompanied by Minister of Foreign Affairs Didier Reynders and three regional Ministers.

Belgian companies have invested in Viet Nam in sectors such as the diamond industry, port services, information and communication technology, high tech, health, and chocolate production.

Illegal petrol stands in Hanoi flout ban

Illegal petrol continued flood Hanoi streets despite its Department of Market Management tightening control over petrol dealing.

Near the end of 2011, the Hanoi Department of Market Management, under the Ministry of Industry and Trade tightened its control over petrol trading and limited the number of petrol dealers in order to tackle illegal petrol stands.

However, many illegal petrol stands continue to operate.

These illegal stalls are mostly located along Thai Ha, Huynh Thuc Khang, Kim Ma, Cau Giay, Quan Thanh where there is already a paucity of official petrol stations. But along with the convenience comes a high price. The prices are always VND5,000-10,000(USD0.24-0.5) higher than official retail stations.

The regulated price for mogas 92 is VND21,300 (USD1.02) per litre but the price at unofficial stands is around VND25,000 (USD1.2) per litre, rising to VND30,000 (USD1.44) a litre in more commonly used streets around Hoan Kiem Lake.

However, despite the high prices, the quality of the petrol isn’t guaranteed.

Mogas 95 has yellow colour while mogas 92 is green but the colour of petrol offered at illegal stands is paler than the original.

Adding to concerns over petrol quality are the dozens of motorbikes repair shops operating throughout the city, selling thousands of litres of petrol each day.

It is believed that through working closely with the Market Management teams, it should be relatively simple for the Department of Market Management to eradicate the unofficial petrol sales points.

Fuel wholesalers fail to closely monitor dealers

While there are as many as 13,000 filling stations and fuel dealers around the country, fuel wholesalers can only watch over around 3,000 dealers under their systems, leaving the door wide open for those remaining to sell substandard products.

Substandard fuel is the main suspect for the recent great number of bike-burning cases, as many petrol samples have been found containing other substances such as methanol, and even water.

Consumers are questioning whether it is the loose management of the fuel wholesalers over their dealers that have resulted in the circulation of poor-quality gasoline.

“It has become commonplace for a filling station to be the dealer of a wholesaler and at the same time also buying from other sources of poor quality products,” said Le Nhu Linh, chairman of the board of members of PV Oil.

“Consequently, fuel wholesalers cannot closely monitor their product quality when it reaches the very end -- the consumers.”

In fact, fuel wholesalers can currently keep their eyes on one fourth of the petrol retailers. This means the remaining three fourths can easily buy substandard products from untrustworthy sources without receipts or invoices to maximize profits.

S, the sales executive of the fuel department of a trading company in Ho Chi Minh City, said fuel has to undergo a strictly managed transferring process from the depot to the tanks of the dealers.

However, once the fuel has been transferred to dealers, no one can know how the story may go on, he said.

“For instance, the dealer can pump 15,000 liters of petrol into its 25,000-liter tank, and mix the tank with substances such as methanol or acetone,” he elaborated. “How can the wholesalers know of this fraud?”

The adulterated products will be sold out within just one week, making it even harder for the wholesalers to control, he added.

Figures from the Ministry of Industry and Trade show that there are around 13,000 fuel dealers countrywide. Of these, some 3,000 dealers are subject to direct management of the wholesalers’ retailing systems.

Petrolimex, the country’s largest fuel wholesaler, said it has 2,000 fuel dealers under its hand, while PV Oil has 463 fuel stores in its system.

Most wholesalers have guaranteed that they will watch the quality of products sold under their chains closely. However, the remaining 10,000 fuel stations are understandably out of wholesalers’ control.

“While we can ensure product quality of those under the system, it is difficult to do so with the outsiders,” said PV Oil Nguyen Xuan Son.

Many filling stations admit to Tuoi Tre that they have to mix fuel with other substances to sell poor-quality products since the commission they receive from wholesalers has increasingly dropped.

There are times when commissions drop to VND150 a liter, and only VND50 after excluding transporting expenses, causing stiff losses for dealers, they said.

The representative of a fuel retailer in Ba Ria – Vung Tau said the commission could not even help them cover expenses, let alone earn a profit. To avoid losses, many dealers have bought fuel from sources of dubious origin and quality to receive commissions of VND500 of even VND1,000 a liter.

“Even the dealers themselves do not know which substances the fuel has been mixed with,” he said.

“What they care is that the products are cheap, and they will pocket the profits.”

Meanwhile, Decree No 84 of the Ministry of Industry and Trade stipulates that each dealer only source fuel from one general dealer or one wholesaler. Similarly, each general dealer can only source products from one wholesaler.

However, industry insiders said many fuel businesses have defied the regulation.

A group of 18 fuel retailers in Ba Ria – Vung Tau have recently petitioned the Prime Minister, saying that since the commission is uncompetitive, they have to buy fuel from sources other than the main wholesaler.

The retailers demanded to be allowed to choose to buy from wholesalers who offer the most competitive commissions.

With this, the dealers will be able to ensure profits, and will not have to buy from other sources, they said.

However, fuel wholesalers said this will make it even more difficult to watch over fuel quality.

A representative of a major general dealer in HCMC said each dealer usually has only one tank.

If dealer is allowed to buy from many different sources, all of the products will be poured into that same tank.

“Thus, in case one of the products is of poor quality, it is impossible for authorities to figure out exactly which is the substandard product,” he said.

Boosting handicraft exports to Japan

A seminar on promoting art and handicraft exports to the Japanese market was held in Ho Chi Minh City on February 21.

Over 60 Vietnamese and Japanese businesses involved in designing, producing and trading in arts and handicrafts attended the event.

Japanese businesses and experts exchanged information about how to sell arts and handicrafts and establish distribution channels in Japan, as well as the Japanese consumer culture.

In 2011, Vietnam earned over US$200 million from exporting arts and handicrafts to Japan.    

Hiroshi Sakamoto, a representative of Sense of Life Inc, said handmade Vietnamese goods are sophisticated and unique, which is their strength, and Vietnam should strive to maintain the consistent quality of these products.

The seminar was organized by the HCM City Trade Promotion Department in co-ordination with the ASEAN-Japan Centre for Trade, Investment and Tourism Promotion (AJC).

Lithuania to promote investment in Vietnam

The new Lithuanian ambassador to Vietnam has said the priority in her term of office is to promote investment between Vietnam and Lithuania, particularly in transport infrastructure.

During her meeting with Prime Minister Nguyen Tan Dung in Hanoi on February 21, Ambassador Lina Antanavicinene affirmed that Lithuania attaches importance to economic, trade and investment cooperation with Vietnam.

PM Dung said two-way trade, worth US$40 million, is too low to match the two countries’ potential. He suggested Lithuania and Vietnam develop an agreement on bilateral cooperation and establish an inter-governmental mechanism for closer cooperation in specific fields, especially transport infrastructure, education-training and science-technology.

Dung also said both countries should continue supporting each other at international forums and promoting Vietnam-European Union relations.

Seafood processors in a fix

Seafood exporters are facing numerous difficulties, including a shortage of working capital, a fall in overseas demand, and high costs of quality inspection.

At a meeting in HCM City on February 20, the chairman of the Vietnam Association of Seafood Exporters and Producers (VASEP), Tran Thien Hai, warned that this year would be the most difficult ever for seafood firms.

The ongoing economic crisis might lead to a decline in global seafood demand, and importing countries would impose stricter food hygiene and safety requirements.

He predicted that demand in the EU market for high-price items like shrimp and tuna would fall, and payment would be slower than before.

Truong Dinh Hoa, VASEP General Secretary, said a shortage of raw materials continued to be a headache.

Last year the country spent more than US$500 million on importing raw seafood for processing exports.

Tra fish output continued falling as neither companies nor farmers had the money to invest in farming, he said.

Many shrimp farms had to reduce their investment on account of high input costs, he said.

Duong Ngoc Minh, director general for Hung Vuong Seafood JS Company, said seafood firms needed more working capital, but banks tightened controls on lending.

He said many also complained about higher costs for inspection of export consignments as it usually takes at least 7-10 days.   

Petrol import taxes cut amid global price hike

The Ministry of Finance has decided to slash petroleum and jet fuel import taxes to between 3 percent and zero percent beginning February 21 in order to support domestic petrol traders.

As a result, import tariffs on kerosene and diesel have been reduced from the previous 5 percent to 3 percent.

Import taxes on gasoline and jet fuel have been cut to zero percent, compared to the previous 4 percent.

The move is expected to assist local petroleum traders in their business amid rising global fuel prices in recent months.

Local market watchdogs said that the imported price of 92 octane petrol (A92) in the Singaporean market had increased to an average US$125.94 per barrel for February deliveries, up 5.18 percent compared to a month earlier.

This means that the retail prices of A92 should stand at VND23,332 (US$1.11) per litre instead of current VND20,800 (US$0.99).

With the rising import prices, several domestic petrol traders are bemoaning losses of over VND1,000 per litre of petrol sales.

Dang Vinh Sang, General Director of Saigon Petro Limited Company, said the firm is facing mounting difficulties. According to him, Saigon Petro has to lower their commissions to agents to only VND350 per litre, instead of the previous VND650 per litre.

Several other wholesale traders, including the state-owned Vietnam National Petroleum Corp (Petrolimex), the country’s biggest petroleum trader, are also in the same situation with Saigon Petro.

Petrolimex Deputy General Director Vuong Thai Dung said the current retail prices of petroleum in the domestic market are between VND1,300 and VND2,400 per litre lower than the imported prices depending on different products.

BIDV financial leasing firm inaugurated

BIDV Financial Leasing One Member Co. Ltd. (BLC), which is 100% owned by Bank for Investment and Development of Vietnam (BIDV), was inaugurated on Monday with chartered capital of VND447.8 billion.

According to BLC leaders, this is the result of merging the two financial leasing companies of BLC and BLC II to simplify the management machine and prevent unnecessary cannibalism between them. The new BLC also aims to compete with international financial leasing firms in Vietnam.

BLC has taken over all assets, rights, duties and legitimate interests of BLC II, continuing operation in the fields of financial leasing,

As of the end of last year, BLC had total assets of VND3.3 trillion and outstanding loans of over VND3 trillion, or 17.2% of total loans of leasing enterprises under the Vietnam Finance Leasing Association. The enterprise has increased finance capability for each client from VND60 billion to VND112 billion after merging.
 
Viettien expands distribution network to Asia

Viettien Garment Joint Stock Company this year plans to open general agents in six Asian countries comprising Myanmar, Indonesia, Malaysia, Singapore, Thailand and China in a bid to expand its distribution network.

The company is making effort to bring its brand widely to the Asian market, and balance export market step by step so as to avoid risks of too much concentration on one major market, said Bui Van Tien, general director of Viettien Garment Joint Stock Co.

Speaking at the award ceremony last weekend where Viettien Co. received a second-grade medal from the State president, Tien said that with the new strategy to restructure export markets and distribution system, Viettien looks to a better market structure with 25% of sales earned from Japan, 25% from the U.S., 29% from the EU and the remainder from other markets.

Viettien, which operates agents in Cambodia and Laos, currently has a domestic network of over 1,300 stores and sales agents.

“Under current economic downturn, it will be risky for apparel and textile sectors if they keep relying on just a few export markets,” Le Tien Truong, vice director of Viettien Garment Joint Stock Co., told the Daily.

The country exported 90% of apparel and textile products to the U.S. and E.U. in the previous time but it tends to shift to Asia at the current time.

Vietnam’s apparel industry is seeking to further tap South Korea, which is expected to generate a revenue of over US$1 billion this year. It earned US$904 million in apparel exports to South Korea last year.

“This year, we may face difficulties in the big market of EU and the scenario maybe a little bit brighter in the U.S and Japan. In the face of unfavorable forecasts, the apparel sector still aims to obtain US$18.5-19 billion in export turnover, US$3 billion higher than the figure last year,” said Truong.

Kuwait trade to exceed $1 billion

Trade between Viet Nam and Kuwait is likely to exceed US$1 billion this year, the acting Kuwaiti consul in HCM City, Abdulrazzaq Alkhuleefah, has said.

In a press release on the 51st anniversary of Kuwait's independence, he said the bilateral trade last year was worth $837 million, twice the 2010 figure, with Kuwaiti exports accounting for $808 million.

The $6.2 billion Nghi Son Oil Refinery Plant in Thanh Hoa Province, in which Kuwait holds a 35.1 per cent share, was one of Kuwait's biggest investment projects in Viet Nam.

Co-operation between the two countries began in 1976 when the Kuwaiti Fund for Economic Development began to provide funds for a number of infrastructure projects.

It had thus far funded 10 projects worth 36.3 million dinars ($130.7 million), which have played an important role in enhancing bilateral ties.

Viettel sets revenue targets

The Viettel Group on Monday set a target revenue of VND140 trillion (US$6.6 billion) for this year, with a profit of over VND22 trillion ($104 million).

Viettel also plans to get two more permits at foreign markets as well as inaugurate services in Mozambique and Peru, reaching a turn-over of $650-700 million, up 45 per cent from 2011.

Despite a tough last year, Viettel still earned VND117 trillion ($5.57million) in revenue, a year-on-year increase of 28 per cent.

Bank offers incentive loans

The Asia Commercial Bank (ACB) has launched a US$100 million-scale incentive lending plan called "Preferential interest rate credit for export-import businesses".

Effective until June 30, the lending mainly assists businesses in the fields of rice, seafood, cashews, plastic, petrol, and steel.

Accordingly, enterprises requiring additional working capital to produce exported goods or to pay for imported items will be financed with lower interest rates in US dollars by ACB.