Stocks fall on both exchanges despite improving conditions

Stocks lost value on both national stock exchanges while data last week showed the economic conditions to be improving.

Ha Noi's CPI in April was reported to decline for the first time in two years, down 0.03 per cent from the previous month. Minister of Planning and Investment Bui Quang Vinh forecast the nation's CPI this month would increase just 0.06 per cent.

In the first quarter, the balance of payment reached a surplus of nearly US$2 billion and the state's foreign currency reserve increased by an equivalent of nine weeks of imports. Viet Nam also enjoyed a trade surplus of $220 million in the first three months of this year.

Data was positive but the time of publication focused on the last trading day which did not improve investor psychology, said FPT Securities Co Nguyen Ngoc Tuan.

"This is also a sensitive time while the National Assembly is holding regular meetings to make important decisions to restructure the economy and financial market," Tuan said, reckoning the last week's market fall was essential and more of technical correction.

The market had gone through a long rising streak which lifted the stock indices. This made investors more cautious and decide to sell in order to realise cash profits, said analysts on the financial website vietstock.vn.

They said the first-quarter business results of the leading stocks such as banks, securities companies and other blue chips were gradually revealed, which also made the market lose its rising momentum, particularly in Ha Noi.

"The selling on good news strategy is being applied again," they said.

On the Ha Noi Stock Exchange, the HNX-Index fell 3.26 per cent over the course of last week, with three of five sessions decreasing, and finished Friday at 77.75 points. The trading value declined slightly over the previous week, averaging nearly VND1.08 trillion ($51.4 million) on a volume of 98.8 million shares per day.

Meanwhile on the HCM City Stock Exchange, the VN-Index gave up just 0.54 per cent, closing Friday at 465.72 points. Market volume increased 11.6 per cent over the previous week, reaching 120.5 million shares per session, worth a daily turnover of almost VND2 trillion ($94.6 million).

19 of 25 sectors gained in value, led by mineral shares with a gain of 7.4 per cent and securities shares up 6.3 per cent. Hot shares of construction, real estate companies and banks also increased from 3-5 per cent.

Ha Nam Minerals (KSH), Nari Hamico Minerals (KSS) and Tay Bac Minerals Investment (KTB) were the biggest gainers with prices rising around 19 per cent.

No positive information around these shares was revealed last week but there was talk of the possibility that good business results of these companies this year could induce speculative cash flows.

Foreign investors continued to be net buyers on the Ha Noi exchange but on a narrow value of VND27.5 billion ($1.3 million), focusing on construction giant Vinaconex (VCG) and Kim Long Securities Co (KLS).

Meanwhile, they were net sellers of up to VND695.2 billion ($33.1 million) worth of shares on the HCM City exchange, mainly due to the net sale of Sacombank (STB) which was worth VND810.7 billion ($38.6 million).

"After three consecutive declining sessions, the market will likely tread water on the first trading day of this week," FPT Securities Co's Nguyen Ngoc Tuan said, predicting money flows could shift to shares which reported good business results and promised high dividend rate.

Formosa steel project capital surges to US$22 billion

Hung Nghiep Formosa Ha Tinh Steel Co., briefing the Vietnam Steel Association (VSA) on the progress of its major steel complex in Ha Tinh Province, said it had raised the project’s capital to US$22 billion, according to VSA.

Nguyen Tien Nghi, vice chairman of VSA, told the Daily that the original cost projection of the project was around US$15 billion for two phases, but now it had been revised up to US$22 billion.

The project’s first blast furnace which can produce around four million tons per year will be constructed early next year, and the plant will be operational in 2014, Nghi said.

The investor is also building Son Duong deepwater port which can handle 300,000-DWT ships and the port will be ready before the steel mill imports ores for steel manufacturing.

In late 2010 Ha Tinh Province handed over around 3,300 hectares of land in Ky Anh District for Hung Nghiep Formosa to develop a steel manufacturing complex with an annual output of 7.5 million tons.

This project is expected to create some 10,000 jobs for local people in the first phase and the figure will grow to 30,000 after the second phase is completed.

Previously, provincial chairman Nguyen Kim Cu told that Daily that the project helped boost the development of other industries in not only Ha Tinh but also neighboring Quang Binh and Nghe An.

Main components of the Formosa steel complex include a steel plant, a 1,600-MW thermal power station and Son Duong port with annual throughput of an estimated 30 million tons.

Although ground was broken for the complex in 2009, slow site clearance has reportedly left huge impact on contracts of purchasing equipment from European suppliers.

Algeria, Vietnam foster trade, labour ties

The business communities of Algeria and Vietnam should fully tap into their potential to expand bilateral trade and investment.

Omar Mehsas, president of the chamber of commerce and industry of Constantine region, made the recommendation at a working session with Vietnamese Ambassador to Algeria Do Trong Cuong and Trade Counsellor Nguyen Van Mui in Constantine city on April 20.

He said Algerian businesses want to learn from Vietnam’s experience in developing its strong areas such as construction, farm produce and seafood processing, garment, and oriental medicine manufacturing.

Ambassador Cuong spoke of Vietnam’s strengths in construction, construction materials and labour, and asked the Algerian side for consideration.

Representatives of the Algerian employers at the meeting said they will discuss the proposal in detail with the Vietnam’s Viglacera Corporation when this corporation is to attend an international construction exhibition in Algiers in May.

At a meeting with the mayor of Constantine, Noureddine Bedoui, Cuong thanked the Algerians for supporting Vietnamese labourers in the city and asked the local administration to continue this assistance so as to contribute to enhancing the traditional friendship between the two nations.

The ambassador later went to a construction site on the east-west highway to encourage the Vietnamese labourers working there.

Constantine is 430 kilometres from the Algerian capital Algiers and it has significant economic relations with Vietnam, which attracts many Vietnamese labourers.

Cambodia, Vietnam inaugurate high-speed transmission line

Vietnam helped Cambodia connect to the world through a new high-speed transmission cable capable of transferring signals at 10 gigabytes per second.

The 260km cable, linking Phnom Penh and Ho Chi Minh City, enables Cambodia to expand its international gateways to Asia, Europe, and North America via marine cables and to Laos and China through terrestrial lines.

The new cable was inaugurated by Vietnam Telecom International (VTI) and Telecom Cambodia (TC) in Phnom Penh on April 20 in the presence of Cambodian Minister of Post and Telecommunication Sokhun, Vietnamese Minister Counselor of Trade in Cambodia Vu Thinh Cuong, and leaders of telecommunication enterprises operating in the country.

Addressing the ceremony, Minister Sokhun said that the new line will be very effective for Cambodia’s globalized economic development.

He said the line will facilitate Cambodia’s connections to the world and expand the telephone and internet networks across the country, thereby boosting its economic, educational, and social development.

VTI and TC have cooperated closely to carry out the project and pledged to provide customers in Cambodia with solution and service packages through the ‘one-stop shop’ model.

High fees stop farmers taking out insurance
 
Farmers have remained indifferent to agricultural insurance due to high fees, according to Director of the Ministry of Agriculture and Rural Development's Department of Co-operative and Rural Development Tang Minh Loc.

He said that pilot programme progress was also slow.

After nine months, agricultural insurance contracts were successfully signed in only two provinces out of 20 throughout the country, including Nghe An and Dong Thap.

In these two provinces, agricultural insurance reached 23,000 households, of which nearly 90 per cent were poor.

The pilot programme currently drew participation from mainly poor households who received 80 and 100 per cent Government support towards insurance costs, he added.

It remained unattractive amongst the rest, even with 60 per cent cost support, according to Vu Thai Ninh, from the northern Bac Ninh Province Department of Agriculture and Rural Development.

Some must pay VND120,000 (US$6) for a pig or VND720,000 ($36) for a flock of more than 100 egg-laying hens.

"The fees are too high. Most hesitate to purchase insurance for their livestock and poultry," Ninh said.

Meanwhile, Deputy Director of Bao Viet Insurance Nguyen Quang Phi said current agricultural insurance fees were preferential when compared to other neighbouring countries such as China, Thailand and the Philippines.

The fees were set up based on the levels of risk associated with natural calamities or disease faced in agricultural production.

Hung said insurance companies would consider lowering fees next year, based on 2012 revenue surplus from agricultural insurance.

According to the Head of Thai Binh Province's Nguyen Xa Commune Co-operative Nguyen Phi Hung some insurance regulations did not correspond with the situation in different localities.

The province's three districts of Vu Thu, Thai Thuy and Tien Hai were chosen to pilot insurance on rice cultivation.

Hung pointed out that current insurance regulations covered diseases that rarely attacked rice grown in the district with damage done by rats overlooked.

According to Loc, a third survey on the implementation of the programme would be conducted within this month to ensure effectiveness.

The three-year pilot programme has been implemented since July with an expectation to increase the feasibility of large-scale application of agricultural insurance in Viet Nam to benefit farmers.

Paper mill in southern Hau Giang to reopen

Lee Wan Keung, CEO of Lee & Man Paper Manufacturer Ltd, promised to continue constructing its pulp and paper mill in southern Hau Giang Province, which has been delayed since 2007, on Thursday in a meeting with the provincial People's Committee.

The mill would become operational next June, after difficulties resulting from the global financial crisis were solved, and would have a capacity of 400,000 tonnes of paper per year, Lee added.

Local plastic firms expected to do well

The Viet Nam Plastic Association (VPA) has forecast that most plastic enterprises would perform well this summer due to a trend in orders transferring from China to Viet Nam.

Chinese and Vietnamese plastic were priced the same because of high production costs, but importers appreciated the quality of Vietnamese plastic, causing a surge in orders, the VPA added.

HCM City proposes to delay corporate income tax deadline  

HCM City authorities have proposed that the Prime Minister introduce a three month extension to corporate income tax deadlines for small and medium-sized enterprises.

The proposal is intended to support companies during their current difficulties.

In the first three months of 2012, over 5,000 enterprises notice to HCM City Department of Taxation that they were filing for insolvency. 900 enterprises have already closed and over 500 have completed procedures for bankruptcy. This has led to thousands of unemployed.

The city registered nearly 29,000 newly unemployed so far this year, more than 20 labour strikes over salary disputes or business owners absconding without paying salaries.

However, the tax extension will not be applied to incomes from real estate, banking or securities speculation, and goods subject to excise duties.

On January 19, the government had granted a three month extension to corporate income tax deadlines for small and medium-sized businesses that had to pay tax in first and second quarter of 2011.

PM urges cancelling stagnant golf course projects   

Prime Minister Nguyen Tan Dung has requested the cancellation or relocating of golf course projects that still remain on paper.

After scrutinising golf course projects under the country’s planning in 2009, the PM urged relevant ministries, branches and localities to intensify their oversight to ensure that all golf course projects are implemented in accordance with their approved planning.

Provincial governments must report to the Ministry of Industry and Trade on any planned golf course projects that remain on paper or potential golf courses that may be considered for relocation.

Localities nationwide were told to carefully consider the necessity and investment efficiency of such projects before seeking approval for new golf courses.

Provincial governments must take entire responsibility for the construction and operations of golf course projects in their localities, the PM noted.

He demanded transparency during the implementation of the planning, along with a discouragement to use of land earmarked for agricultural cultivation, protected and special forests, industrial parks and urban areas.

Land that has been allocated for golf course construction is banned from being used for house construction or other purposes.

The PM assigned the Ministry of Planning and Investment to co-ordinate with local authorities to estimate demand for golf courses through 2020 and send him a report for timely adjustment and supplementation to the planning.

Among 90 planned golf courses, only 29 have been put into use across Vietnam over the past two years.

VNPost separates from VNPT Group

The Ministry of Information and Communications (MIC) revealed that VNPost plans to separate from the VNPT Group on Jan 1, 2013.

VNPost will operate independently as a company under the name Viet Nam Post Office. The company will be run by the Chairman and General Directors Board with the MIC as its direct owner.

Few foreigners buy houses in Viet Nam

Only 298 Vietnamese from outside the country and one or two foreigners had bought – or had registered to buy – a house in Viet Nam up to April 10, with only three additional purchases since late last year.

Most of the Vietnamese owners held foreign citizenships; foreign ownership was rare, Land Registration and Statistics Department figures showed.

Of the list, 252 owned houses in HCM City, 12 in Can Tho City and four in Ha Noi. Of the latter, three were Vietnamese, the other Czech.

Land-use registration offices to be consolidated

Pilot projects to consolidate the registration of land-use rights to one office in each province has been given the thumbs up.

Previously registrations were handled in a myriad offices at the commune level.

One office in each province, and major city outside the provinces, will have branches in their local areas with full functions to issue registrations, land-use rights certificates and displacement registrations.

The pilots will be carried out in Hai Phong and Da Nang cities and Dong Nai and Ha Nam provinces till the end of December next year.

Logistics firm to delist due to undervaluation

Logistics firm Vinafco (VFC) has decided to delist from the HCM City Stock Exchange on the proposal of leading VFC shareholder Golden Age Investment Co. Golden Age, which holds a 25.25-per-cent stake in VFC, had said that the listing had failed to benefit shareholders, with shares no longer truly reflecting corporate value.

Bank buys stake in property developer

Viet A Bank has become a major shareholder in property developer Dat Xanh Group (DXG) after purchasing 3.5 million shares, or an 11-per-cent stake of the company. The transaction was carried out on Monday. DXG closed yesterday's session up 4.2 per cent to VND12,500 per share.

Ocean Group offers 3-1 bonus shares

Financial conglomerate Ocean Group (OGC) will increase its charter capital to VND5 trillion (US$238 million) by offering bonus shares to existing shareholders at a 3-1 ration and at par value, as well as another 100 million shares to strategic partners.

The group targets earning of VND4 trillion ($190.4 million) and a profit this year of VND800 billion ($30 million), increases of 136 and 230 per cent over last year, respectively. It has also projected payment of a dividend of 12 per cent.

Taxi operator suspended after shares plunge

Taxi operator Mai Linh Northern Central (MNC) has decided to suspend the listing of its shares on the Ha Noi Stock Exchange due to unfavourable conditions on the market. MNC has fallen from VND16,000 per share to just VND4,200 after one year of listing, causing losses for shareholders, the company said during its recent shareholders meeting.

Japanese firm acquires Cholimex stake

Japanese company Nichirei Foods has become a strategic shareholder in the HCM Stock Exchange listed firm Cholimex (CLC) after paying US$6.25 million for a 19-per-cent stake in the company, which mostly makes sauces and spices.

The VND80 billion (US$3.8 million) company last year earned a net profit of almost VND35 billion ($1.6 million), surpassing its annual target by 21 per cent. Shareholders will receive a 20 per cent cash dividend for 2011.

At the company's annual meeting on April 20, shareholders approved a target of VND47 billion ($2.24 million) in pre-tax profits this year.

Overseas Vietnamese shun stocks

Overseas remittances have increased steadily year by year, and while a large proportion of remittances end up being invested in real estate, just a tiny proportion has been put into the nation's stock market, Gardners&Partners Investment Joint Stock Co general director Nguyen Tien Thanh has said.

Just five years ago, most remittances flowed directly into consumer spending, but more Vietnamese expatriates were now paying greater attention to investment opportunities in the home country, Thanh said.

Overseas remittances hit a record high of US$9 billion in 2011, an impressive increase over 2010's $8 billion and accounting for 9 per cent of the nation's GDP. This moved Viet Nam into the list of the top 16 nations around the world in terms of overseas remittances received.

Amost 50 per cent of these remittances last year were invested in the real estate sector while deposits in banks accounted for 24.7 per cent and consumer spending 19.4 per cent. Only 0.9 per cent were put into the stock market.

Few Vietnamese expatriates were keen on Viet Nam's stock market due to heavy speculative tricks and insider trading, Thanh said. Many Vietnamese expatriates were also afraid to entrust money to investment or fund management companies for fear of wrongdoings.

"The possibility of detecting such deeds, and the penalty levels in Viet Nam are limited," he said.

Overseas remittances were forecast to reach over $12 billion this year, Thanh said, and if only 10-20 per cent of this amount were poured become the stock market, it could help the stock market become a more effective channel for enterprises to raise capital.

"It will take some time to lure this money into the stock market," he said. "The length of time will depend on how successfully the market can be reformed."

PVI balks at overseas listing

The HCM City Stock Exchange-listed PetroVietnam Insurance Holdings (PVI) has no plans of listing shares on foreign exchanges, said the company's vice chairman Ton Thien Viet at its shareholders' meeting in the capital yesterday.

Viet said last year PVI issued shares worth 25 per cent of the company's charter capital to the global insurance service supply chain Talanx Group, increasing the foreign ownership in the company to nearly 49 per cent – the ceiling holding by foreigners in a Vietnamese company by law.

PVI reported, it earned a total revenue of more than VND5.65 trillion (US$269.3 million) in 2011, up 25 per cent year-on-year, of which insurance premium reached VND4.75 trillion ($226.2 million) and financial investments earned VND849 billion ($40.4 million).

The company also paid 15 per cent dividend on the last year's net profit of VND348 billion ($16.6 million), an increase of 17 per cent over the previous year's net profit.

This year, PVI plans to keep the dividend rate at 15 per cent on the projected pre-tax profit of VND768 billion ($36.6 million). Its total revenue is forecast to reach over VND6.45 trillion ($307.3 million) on the basis of doubling its charter capital from VND2.13 trillion ($101.4 million) to VND4.66 trillion ($222 million).

In 2011, PVI successfully transformed into the parent subsidiary company and established two subsidiaries including PVI Insurance and PVI Reinsurance. However, management remained a challenging issue that would force it to continue the restructuring process, focusing on the personnel matter, Viet said.

At the meeting, the two major foreign shareholders, Oman Investment Fund and HDI Gerling under the management of Talanx Group, nominated their two representatives to the PVI's management board.

Loan agreed for Nam Na 3 power plant

Hung Hai Group and Tokyo-based BNP Paribas Bank branch signed in Ha Noi yesterday a Nippon Export and Investment Insurance (NEXI) united term loan facility for the Nam Na 3 Hydropower project in the northern Lai Chau Province's Sin Ho District.

Speaking at the loan signing ceremony, Minoru Kaneko, chief representative of NEXI Singapore which arranged the loan with Aozora Bank, Shizouka bank and Nishi-Nippon City Bank, said this had been the first time the 7.1 billion yen (US$30.9 million) loan provided for a business outside Japan as NEXI often offered trade and investment insurance services to facilitate and enhance Japanese companies' international business.

The 78MW project with total investment of VND2.5 trillion ($119 million) would annually provide more than 350 million kWh for the national power grid, especially northern provinces.

The plant is expected to become operational in the second quarter of 2014.

Kaneko said Japan's investment in Viet Nam had remained high despite the economic crisis.

He said several Japanese companies saw huge potentials in the Viet Nam market and would expand their businesses.

Kaneko added that the project was located in northern Lai Chau Province, where rare-earth is extracted from the Dong Pao mine. The material has been used in Japan's automobile industry.

"The hydropower plant would supply power for the rare-earth project which needs large power amounts in the province as a joint venture between the two countries," he said.

Tran Dinh Hai, chairman cum general director of Hung Hai Group, said they expected to receive attention from NEXI to their other projects as an investor in over 10 hydropower projects.

Tax agents still largely unused
 
Amendments will be made to Viet Nam's tax agent regulations to boost effectiveness, according to Deputy Director General of the General Department of Taxation (GDT) Vu Van Truong.

The move is also aimed at harmonising local regulations with international practices, he added, saying tax agent operations have remained moderate and unpopular since first brought into practice three years ago.

According to the Viet Nam Tax Consultancy Association, so far, as many as 83 companies across the country have registered to provide tax agent services, with over 930 people having earned certificates to operate.

However, most companies are small, six claiming no revenues from tax service provision.

Taxpayers still know little regarding tax agents and their services, which has contributed to the slow growth of the industry, said chairwoman of the association Nguyen Thi Cuc.

Agents, on behalf of individuals or companies, prepare and fulfil tax procedures including declarations, payments and the obtaining of tax refunds after receiving input figures.

Some have expanded their services to include quarterly, monthly and yearly service packages, Cuc said, adding that such a move helped agents gain clients.

Director of HCM City-based Trong Tin Tax Consultancy Nguyen Van Duoc said that under current regulations, tax authorities are required to publicly list agents and offer assistance on new policies and procedures.

However, he noted that few agents consulted tax authorities for support.

Meanwhile, under a national strategy for tax reform, the country has set a target of establishing at least 3,000 tax agents by 2015 and 8,000 by 2020.

Truong said that to boost development amongst tax agents, the General Department of Taxation has drawn up comprehensive measures to improve legal framework and build capacity for tax employees.

The GDT would organise exams and grant certificates for providing tax services while local tax departments are assigned to oversee operations.

HAGL’s rubber branch to list on Singaporean bourse

Hoang Anh Gia Lai Joint Stock Co is planning to list its rubber firm on the Singapore stock market in 2015, according to its recent annual shareholders’ meeting.

The company, HAGL Rubber Corp, will become public one year after being listed on the national bourse, said deputy general director Vo Truong Son at the meeting.

The mother company, coded HAG on the Ho Chi Minh Stock Exchange (HoSE), will try to hold up to 65 percent of the rubber company’s shares after listing, as Singapore is a regional market attracting so many big investors, HAGL chief Doan Nguyen Duc told Thoi Bao Kinh Te Sai Gon newspaper.

In addition, a foreign company has valued HAGL Rubber Corp at $1 billion, he said.

According to Duc, the HAGL Rubber Corp has sold 4 percent of its stakes to three investors from Japan, the Netherlands and Vietnam for nearly VND1 trillion ($48 million).

In addition, the Singaporean firm Temasek has also spent about $ 55 million to buy the convertible bonds of the corporation to hold the right to convert those bonds into shares when the bonds mature.

Duc said on the sidelines of the meeting that the listing of HAGL Rubber Corp on the Singapore stock market is a part of HAGL deal with Temasek so that the latter could invest in the corporation by buying its convertible bonds.

Temasek also bought convertible bonds worth about $55 million issued by the mother company more than a year ago.

In 2012 and 2013, HAGL Rubber Corp will continue to plant more than 15,200 ha of rubber in Vietnam, Laos and Cambodia to finalize its initial plans to plant 51,000 hectares of rubber in three countries.

In such a turbulent economic context, Duc said HAGL has to be very flexible in finding capital for investment in rubber, hydropower, minerals, and real estate projects.

This means that HAGL will adopt a number of plans to issue bonds in the Vietnamese dong in the domestic market or in US dollars on international markets, including issuing convertible bonds so that the investors can convert tem into shares of HAGL subsidiaries and become their strategic partners.

Duc said the board of HAGL has also revised the target of pre-tax profits in 2012 to VND1.2 trillion, lower than the VND1.7 trillion targeted at the beginning of this year after considering the current difficult situation.

At the meeting, Doan Nguyen Duc said: "I cut the prices of HAGL real estate projects by 40 percent and 20 percent in 2009 and 2011 respectively, and in the next few months HAGL projects will be sold some 50 percent cheaper than those in the same market segment."

HAGL has many advantages over competitors including plentiful and cheap land areas, diversified business sectors, closed-process realty development, and abundant building materials.

The real estate developer also claimed that those projects will still be profitable despite a 50 percent discount.

The HAGL chief said its land areas are set aside for 16 projects with a total 2 million m2 of construction floor. Annually, HAGL will offer 2,000 apartments for the local market at competitive prices.

“Given the chance to buy cleared ground in nice locations at affordable price in the times of a market downturn, HAGL will continue to prepare for the future," he said.

Duc said he was not afraid to be regarded as a person who dumps property values by doing so.

Vietnam, Venezuela sign cooperation projects

Vietnamese and Venezuelan agencies and businesses signed a number of cooperation agreements and contracts at an inter-governmental committee meeting in Caracas on April 20.

Under these documents, Vietnam will supply solar power stations, solar powered kettles, public lighting systems, and technical assistance and equipment for Junin 2 oil exploration project by JV PetroMacareo.

A document targets the expansion of a cultural exchange program in the 2012-2015 period, focusing on staging, cinematography and publishing.

The second meeting of the Vietnam-Venezuela Inter-governmental Committee took place in Caracas from April 18-20, co-chaired by Vietnamese Deputy Prime Minister Hoang Trung Hai and Venezuelan Vice President-cum-Minister of Energy and Petroleum Rafael Ramirez.

Hai and Ramirez signed the minutes of the meeting on April 20, agreeing to make a greater effort to increase bilateral cooperation in untapped areas.

The minutes detailed the areas for cooperation, including trade, oil-gas, electricity, agriculture, infrastructure, shipbuilding, information and communications technology, culture, and education-training.      

Both sides agreed to promote research and cooperation in the areas of their strength, namely telecommunications, truck and motorcycle assembling, mechanical engineering, steel mill construction, small-scale hydro power projects, and biogas application in rural areas in Venezuela.

In the context of global fluctuations, Hai stressed, it is necessary to bridge regions in the world to overcome challenges and promote solidarity.

According to the Vietnamese Deputy PM, Vietnam and Venezuela need to strengthen cooperation in power, production and construction industries, agro-forestry and fisheries, science-technology, and culture-education.

Quang Ngai, Hau Giang restart million-dollar projects

The provincial governments of the central Quang Ngai, and the Mekong Delta Hau Giang provinces have recently met with investors to restart two projects worth millions of US dollars that have been delayed for years.

On April 18 in Quang Ngai Vo Van Thuong, general secretary of the provincial committee of the Party, met with representatives of Taiwan’s E-United and JFE of Japan on the implementation of the Guang Lian Dung Quat steel manufacturing plant in the Dung Quat Economic Zone.

The two international groups expressed their determination to complete the project as soon as possible, while Thuong said the province is committed to creating the most convenient conditions possible for the investors.

Guang Lian Dung Quat steel manufacturing plant, whose main investor is the Tycoons Worldwide Steel Vietnam Co Ltd, broke ground in October 2007, with a total investment of more than US$1 billion.

The project’s investor was later changed, and the required capital was increased to $4.5 billion, with the project expected to reach its first completion stage by 2013.

However, it has since been delayed due to the lack of financial capability of the investors.
Meanwhile, the People’s Committee of Hau Giang Province on April 19 worked with the Lee & Man Paper Manufacturing Ltd on a $1.2-billion project that has been delayed since 2007.

Lee & Man committed to continue the project’s implementation, said chairman Lee Wan Keung.

“The project was tardy due to the economic turbulence,” he said.

“Now that the problems have been solved, we are committed to putting the plant into operation by June 2013.”

The 210-hectare Hau Giang paper manufacturing plant was set to be built in the Phu Huu A Industrial Cluster with a total investment of $1.2 billion from Lee & Man Co Ltd.

Initiated in 2007, however, the project has so far had only two out of ten construction units completed.

As of mid-2013 the assembly line, which will be capable of producing 400,000 tons of paper a year, will become operational, said Lee.

The chairman also demanded that the provincial people’s committee recruit 200 laborers to be trained in China, in order to provide an adequate workforce for the plant upon its completion.

Real estate firms want recovery plan

Real estate firms based in HCM City want the municipal administration to ensure that annual interest rates on loans are immediately reduced to between 14 and 16 percent and later to between 11 and 12 percent per annum.

The reduced borrowing rates are part of 12 measures suggested by the HCM City Real Estate Association (HoREA) in a plan that has been submitted to the municipal People’s Committee and the Department of Construction for approval.

The measures are expected to help real estate developers deal at least partly with their current difficulties, survive and develop at a time of prolonged economic slowdown.

The association proposes that local developers should not only be able to access loans at reasonable interest rates, but also have their loans rescheduled and restructured.

It suggests the Government, the Ministry of Finance and the General Taxation Department should reduce corporate income tax to 18 and 20 percent per year from the current 25 percent, and to defer payment of the tax to the end of 2013.

The plan also calls for the Finance Ministry and the tax office to make immediate adjustments to current regulations on the collection of land use fees, including Decrees 69 and 120.

The decrees require real estate developers to compensate for land at market prices and pay land use fees on top of it. This makes property prices very high and puts it beyond the financial capacity of many people, the association has said.

The association also proposed the Ministry of Construction soon submit to the Government a scheme to set up a housing fund using contributions from State employees.

Other proposals made by the association target current regulations believed to be barriers to the development of local real estate enterprises in particular and the local real estate market in general.

According to HoREA, most of real estate enterprises are facing many difficulties including a lack of capital, inability to access bank loans, high lending interest rate (24 or 25 percent per annum), large inventory and a stagnant market. It said the situation has impacted other industries including banks, cement, steel and indoor decoration.

World tourism leader praises local progress

The United Nations World Tourism Organization (UNWTO) will help Vietnam to promote tourism, said its Secretary General Taleb Rifai on April 20.

The UNWTO leader was received by Vice State President Nguyen Thi Doan in Hanoi, where they discussed the advantages of Vietnam joining the organization.

This was the third trip to Vietnam by Rafi, who said that each time he comes the steady progress of tourism development is apparent.

The UNWTO chief said Vietnam should take pride in its potential as a tourist destination, adding that the industry here is developing at double the speed of other countries in Asia, which is the fastest growing tourism market in the world.

Rifai suggested that Vietnam develop its domestic tourism, a strategy that has been successful in many other countries, especially Europe. Domestic tourism not only encourages trade, stimulates local markets, but also allows tourists to enjoy an authentic experience within the country.

Rifai also asked Vietnam to join the Global Leaders for Tourism Campaign, which already has 16 member countries in the world. Their mandate is to raise awareness among world leaders of the importance of tourism.

The Director General of the Vietnam National Administration of Tourism, Nguyen Van Tuan, said Vietnam needs assistance, mostly expertise and reliable data, to develop a viable brand for the country. Tuan added that they are working closely with the UNWTO to profit from international experience.

TNK-BP says offshore drilling in Vietnam is "success"

Russia's third-largest oil producer TNK-BP said on Thursday it has successfully drilled two wells on the Lan Do field in offshore Vietnam as a part of its international expansion.

The field is located 28 kilometres east of Lan Tay Platform in Block 06.1, where natural gas and condensate are produced for power generation in Vietnam.

Gas production from Lan Do, which is scheduled to come on stream in the fourth quarter of this year, is expected to bring 2 billion cubic meters of gas annually to sustain Block 06.1's current production of 4.7 billion cubic meters, the company said.

TNK-BP, half owned by BP, acquired a 35 percent stake from BP and has become the operator of the block last year.

Vietnam, Venezuela begin tapping a new oil field

A Vietnam-Venezuela oil and gas joint venture has begun production at a new field in the Orinoco region with an initial output of 50,000 barrels per day (bpd), the Vietnamese government said on Thursday.

The venture, PetroMacareo, would raise extra heavy crude oil output from the field in Junin 2 block to 200,000 bpd by 2015, the government said in a statement.

PetroMacareo was formed by Venezuelan state oil firm PDVSA, which has a 60 percent stake, and state oil and gas group Petrovietnam holding the remainder.

The venture is operating in an area believed to have reserves of 36.6 billion barrels, and it is expected to pump a total of 1.47 billion barrels during its 25-year operation, the statement said.

Vietnam is preparing to upgrade its sole oil refinery, the US$2.2-billion Dung Quat plant, to expand its capacity by nearly a third and to be able to refine crude oil from the Middle East and Venezuela.

US increases import of Vietnam’s farm produce

Vietnam’s farm exports to the American market are very diverse, according to the Import-Export Department under the Ministry of Industry and Trade (MoIT).

However, due to fluctuations in market prices and export volume, there have been remarkable changes in the country’s export structure of fruit and vegetables to this market.

According to Vietnam’s trade office in the US, the US has increased its import of fresh fruits and vegetables, and reduced that of canned products.

Currently, dragon fruits take the lead in terms of volume and export turnover in the US market, followed by pineapple concentrate. In the first two months of this year, export turnover of dragon fruits reached US$624,800, up 170.9 percent.

Litchis, mangosteen, milk fruits, rambutan, and sapodilla plums also have bright prospects in the demanding market.

The Import-Export Department said that so far this year Vietnam has exported 36 types of vegetables to the US market, earning total turnover of US$1.1 million. In addition, Vietnamese onions, garlic, and ginger are also favoured by American consumers.

However, trade experts warned that Vietnamese businesses must meet strict requirements on food hygiene and safety to penetrate this market.

They suggested that managers and producers devise a long-term strategy and proper policies to support production activities and create favourable conditions for Vietnam’s vegetables to enter the American market more effectively.

Seminar discusses globalization impact on transition economies

Scientists from the Hungarian and Polish Academies and some of Vietnam’s research institutes and universities gathered in Hanoi on April 20 to discuss the impact of globalization on some transition economies in Eastern Europe and Vietnam in the early years of the 21st century.

At the seminar, scientists shared the view that Vietnam’s integration into the region and the world is proof of important changes in the country’s foreign policy.

Globalization brings many opportunities and challenges for the development process. In the context of global financial and economic downturn, globalization exerts a major impact on the economies of many countries, including Vietnam. In addition, competition to attract foreign investment becomes tougher and limits the country's labour exports.

In the integration process, Vietnam aims to become an industrialized nation with an eco-agriculture system in the next two decades.

Dr Nguyen Xuan Thien from the National Economics University said that Vietnam should implement development solutions in the globalization trend. For example, he said the country should continue to implement foreign policies in an open and proactive manner, boost national industrialization and modernization, and build infrastructure in education, health and culture.

Moreover, he said the country should urgently resolve issues related to population, natural resources and environment, while maintaining national identity, building healthy lifestyles and taking synchronized measures to welcome foreign investment flows and generate jobs for labourers.

Plastics exports to Cambodia keep rising

Vietnam’s exports of plastic products to Cambodia hit US$8 million in March, bringing the total plastics export value in the first three months to more than US$20 million.

According to the Vietnam Plastics Association (VPA), Cambodia is the fifth largest importer of Vietnamese plastic products, after Japan, the US, Germany, and Thailand.

Plastic bags alone generated US$2.9 million in export value, accounting for 40.2 percent of the total.

VPA said as Cambodia is not highly demanding marke businesses do not find it too difficult to promote exports to this country.

Particularly, consumption demand and the construction market in Cambodia are rebounding, thus the use of plastic utensils, tubes and components are forecast to grow significantly in 2012.

Prospects are good for the domestic plastics industry to increase exports to Cambodia because of its favourable geographic position, close trade relations with Vietnam and its low production capacity.

However, the competitive edge of Vietnamese plastics on the market is low due to poor design and low quality. VPA warned that businesses should apply advanced technologies to improve product quality, lower prices, and diversify designs. They should use recyclable materials to protect the environment, make full use of geographic position and follow both countries’ policies.