Fuel prices up again after straight drops

Fuel wholesalers Friday increased fuel retailing prices for the first time after five consecutive price cuts beginning in May. But this time they raised prices by different amounts as they are now allowed to take the initiative in proposing price adjustments.

Taking effect since 10pm Friday, the increase saw prices of A92 gasoline and diesel oil supplied by Petrolimex, the country’s largest fuel wholesaler, rise by VND400 a liter, and kerosene, VND300 a liter.

Meanwhile, PV Oil and Saigon Petro hiked prices of all fuel commodities by VND400 a liter, except for diesel oil.

In brief, A95 gasoline now fetches VND21,500 a liter, A92, VND21,000 a liter, diesel oil, VND20,300 a liter, and kerosene ranges from VND20,150 to VND20,250 a liter, depending on suppliers. (US$1 = VND20,800)

In late June, the Ministry of Finance released a document, stipulating that fuel wholesalers can propose fuel price adjustment through their own initiatives, but have to report the proposals to the ministries of finance and of industry and trade for final decision.

The ministries have recently received wholesalers’ price hike proposals, and have calculated that fuel cost prices were VND390 higher per liter than retail prices. The respective discrepancies for diesel oil, kerosene, and fuel oil were VND412, VND348, and VND71 a liter.

The administrative authorities thus gave the wholesalers the go-ahead to adjust prices in accordance with their proposals.

The wholesalers are also required to be responsible for retail prices, and report to the ministries for monitoring and supervision.

Fuel prices in Vietnam have previously been hiked twice in March and April, gaining a total of VND 3,000 a liter.

The country saw the latest fuel price cut on June 21, when oil and petrol prices were slashed by VND300 – 700 a liter.

On the world market, oil fell for the first time in eight days on concern that European governments are not doing enough to contain the worsening debt crisis, raising speculation that demand will slip, Bloomberg reported.

Crude for August delivery settled at $91.44 a barrel on the New York Mercantile Exchange, losing $1.22, or 1.3 percent.

Oil closed at the highest level since May 16 yesterday, capping a seven-day gain that’s the longest since February 24.

August futures expired at the close of floor trading. The more-active September contract dropped $1.14, or 1.2 percent, to $91.83 a barrel.

Brent oil for September settlement retreated 97 cents, or 0.9 percent, to end the session at $106.83 a barrel on the London-based ICE Futures Europe exchange, Bloomberg said.

Vietnam ranked 3rd in top non-BRIC emerging markets

Vietnam has been ranked as the seventh top emerging market, after the BRICs -- the economic grouping acronym that refers to Brazil, Russia, India and China -- for the 2012 – 2017 period, according to a report released last week by Finnish advisory group Global Intelligence Alliance (GIA).

The Business Perspectives for Emerging Markets 2012-2017 shows that Brazil, India, China, and Russia still dominate the emerging markets and occupy the first four places, while Vietnam stands at 3rd place out of the top ten markets after the BRICs.

In the leading positions Brazil, with a 2012-2017 economic growth projection [by the IMF] of 3.7 percent, and Russia, 3.9 percent, are attracting global investment for reasons other than their growth rates, such as their potentially huge domestic markets, natural resources and dominance within their regions, the report notes.

It also states that most of the non-BRIC Emerging Markets that international companies plan to target in 2012-2017 are in Asia or Latin America, and Indonesia is the next upcoming Emerging Market, with over a quarter of companies naming it fifth after the BRICs.

It is followed by South Africa, Vietnam, Mexico, Turkey, and Argentina.

While U.S. and European companies are most interested in Indonesia and South Africa, GIA notes in the report that their second choice is between Turkey and Mexico, while Latin American companies focus more on their own home region, and Asian companies, thus, favor Vietnam.

“Of the secondary and up-and-coming emerging markets, Vietnam is favored amongst consumer and retail, logistics, as well as energy and resources industry players,” GIA states.

The report also says that international companies’ reasons for investing in emerging markets can be complex, but are usually mainly centered around the potential for building long term revenues and global market share more rapidly than is possible in established markets.

“It has become less about lower production costs, though this is still a driver for some. Almost all of the companies (91 percent) surveyed by GIA say they could have done something better in their emerging market strategy,” it says.

“The main regrets are not adapting more to local conditions, not entering sooner and not acquiring better market intelligence.”

GIA conducted the report based on an online survey run between April and May amongst business managers at 431 large and mid-sized companies and organizations worldwide.

Industries covered include: manufacturing & industrial; telecommunication, technology & media; professional & business services; financial services; consumer & retail; pharmaceuticals & healthcare; energy, resources & environment; automotive; chemicals; logistics & transportation.

China's Guangxi region mounts Hanoi trade fair

China's Guangxi Zhuang Autonomous Region is putting on a four-day trade fair in Hanoi starting from July 26, with the expected participation of 120 companies from Guangxi.

The fair will have 140 pavilions covering an area of 4,500sq.m, showcasing over 1,000 different products, including agricultural products, agricultural machinery, sugar production technology, and electronics.

Li Shuo, an official of the Guangxi trade department, said that commercial ties with Vietnam have strengthened in recent years, with bilateral trade last year increasing by nearly 48 percent over the previous year to nearly 7.6 billion USD.

Guangxi's major exports to Vietnam include garments, chemicals, steel, automobiles, diesel engines, and agricultural produce, while Vietnam exports coal, minerals, rubber and other agricultural products to the province.

Chinese lighter makers evade EU tax via Vietnam

The European Commission has announced a probe into the evasion of the anti-dumping tax on Chinese disposable lighter manufacturers on their exports shipped to the EU from Vietnam.

The information has been confirmed by the Competition Management Agency under the Vietnamese Ministry of Industry and Trade.

Earlier Société BIC, a disposable pocket lighter manufacturer based in France, lodged a complaint to the EC, suing China for evading the 6.5 percent anti-dumping taxes on their gas lighters.

The trick is Chinese manufacturers assembled the products in Vietnam and shipped their consignments from there to the EU to bypass anti-dumping duties.

Following the petition, the EU on June 26 initiated an anti-circumvention probe into disposable gas-filled lighters made in China under EU consolidated HS Code ex96131000, China’s English website e-to-china.com (ETCN) reported.

The probe targets the Chinese lighters re-exported via Vietnam, regardless of whether or not they are marked as made in Vietnam, the website said.

The EU started its antidumping probe on Chinese lighters in April 1990 and made an affirmative final ruling in November 1991; so far it has levied the relevant antidumping duty for 21 years, according to ETCN.

Although the investigation is mainly aimed at Chinese manufacturers, the Competition Management Agency said its results will affect all Vietnamese lighter exporters to the European market as well.

The investigation will run for nine months until April 26, 2013.

15pct lending rate to be maintained for one year: Cbank

State Bank of Vietnam (SBV) governor Nguyen Van Binh has promised that the current lending rate of 15 percent will remain unchanged for one year in a recent meeting in Hanoi.

The information was shared by the SBV governor with the leaders of banks headquartered in the capital city and the representatives of 300 enterprises there in a business dialogue intended to promote business activity in the second half of 2012.

The statement was made in reply to a question by a business leader regarding how long the 15 percent lending rate will be kept.

Nguyen Thu Ha, Director General of Construction Machinery and Equipment Co, said the lending rate of 15 percent per has just materialized after a year of expectation from the local business community

“If inflation remains stable at 7 percent a year, the lending rate of about 15 percent per year can fully be realized,” Binh said, adding that the rate will surely be stable in the last two quarters of 2012.

According to Binh, lower interest rates are the general expectation of the economy in relation to long-term stability, but the rates must track the development of the macroeconomic situation.

"Because low interest rates will be translated into loosening monetary policies this means that credit growth will be very high. The implication of high credit growth is that more money will also be made available to underperforming companies, which will raise the risk of overdue debts and potential instability.”

“Thus, the anti-inflationary objective is in the forefront and the SBV has to stick to it by not taking any reckless steps.”

“As credit growth will be concentrated in Q3/2012, and planned growth for the whole banking system is only 8-10 percent in H2/2012, it will certainly not cause inflation for the next year," Binh said.

"Just listen to and follow the direction of the SBV governor. From the day I took office, I have always announced any SBV moves publicly before implementing them,” Binh told the meeting.

“I have said the foreign exchange rate between the US dollar and the Vietnam dong will not exceed 3percent from now to the year-end, and I have kept my word.”

“With the current operating mechanism, the SBV reaffirms that the instability in monetary policies we encountered in the past will never happen again," he added.

According to the central bank, most banks have reduced the old interest rate loans to 15 percent a year. However, some have maintained the high rate, as reported in recent discoveries by the press.

But many local businesses have bemoaned that such a lending rate is still unaffordable to them.

Le Vinh Son, Son Ha International Corp’s Chairman of the Board , said the desired interest rate should be reduced to 10 percent per year, although the current interest rate has been cut from 20 percent per year to about 14.2 percent.

Do Ha Nam, Intimex Co CEO cum chairman of Vietnam Pepper Association, said despite hard access to credit, local companies are very afraid of the banks.

There are many banks posing a risk to borrowing companies with unstable lending mechanisms which allow them to recall the loans whenever they want.

After the establishment of a series of joint stock banks, at first the lending mechanism was so open that everyone could borrow at ease.

But when risk appears, all of the banks started to tighten their wallets simultaneously, regardless of how well a company was performing. Well-run businesses found that they could not adapt to the new situation as fast as they needed to.

Ha said a bank told her firm, a strong performer that is never late in debt repayment, on Saturday that the money would be available on Monday. But when the day came, the bank asked for more paperwork which resulted in a business opportunity lost for her firm.

Noting the comments, Binh said that many banks have violated the regulations of SBV by allocating 42 percent of their short term capital for medium and long term lending, while the maximum rate allowed is 30 percent.

In fact, almost 100 percent of recently-raised capital by the banking system is short-term recently.

Regarding the legal stance of the governor’s guidance on cutting interest rates for old debt to 15 percent per year, Binh said this is only recommended for state-run and joint stock commercial banks so that they can help share the difficulties with local firms.

As a result, there will be no penalty for those who don’t obey it, Binh said.

VN gaming industry to earn $220.9 million in 2012

Vietnamese gaming industry is forecast to rake in about VND4.6 trillion in 2012, said a local video game maker.

About 15 million people in Vietnam participate in gaming every day, said Le Hong Minh, general director of Vinagame Co (VNG) at a recent seminar held in Ho Chi Minh City.

The 10-year-old industry has made many progresses, especially in the field of game development.

“We do not have the game development segment 4 years ago. But it is expected to collect a revenue of VND240 billion, around 6 percent of the VND4 trillion revenue of the PC game segment, in 2012.”

“A series of Vietnamese game studios has also mushroomed across the country, in which two biggest studios are located in VNG and VTC, employing about 200 people each.”

“Online game industry in Vietnam has developed a diverse range of genres with special categories, such as social network service Game (SNS) and mobile game.”

“In particular, among Vietnamese SNS game, the highest grossing game is Sky Garden of VNG with monthly revenue of about VND6 billion.”

“In mobile gaming, the largest revenue belongs to the Vietnamese-made iWin of MeCorp with monthly revenue of about VND10 billion.”

However, Minh also said that those figures are very small compared to those in China and South Korea, like a grain of sand.

In Korea there are about 150,000 game makers, and their revenue expected to hit $ 2 billion in 2012, while the respective figures in China are 500,000 and $4 billion.

The revenue from online games in Southeast Asia in 2011 was about $474 million, of which the highest proportion is for Vietnam, according to a report of maket analysis firm Niko Partners.

Game Spot Asia cited the "Game market in Southeast Asia in 2011" report by Niko Partners that Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam is where the online game market would grow the strongest in 2011.

"In addition to the explored online game markets in China, Korea and Japan, the six Southeast Asian countries mentioned above is actually the brightest star in emerging Asia," said a representative of Niko Partners.

In particular, the evaluation of Niko Partners, Vietnam has the largest sales regionally, while Thailand has the highest sales per capita.

Indonesia is an attractive market because people here are very passionate about the games available on Facebook.

Niko Partners reports identified the game on social networks and free online games will has strongest growth in the region.

According to the report, revenues from Southeast Asian gaming market will reach nearly $ 1 billion in 2015.

Four stocks replaced in VN30 index calculation

Ho Chi Minh Stock Exchange (HoSE) will calculate the VN30 index in accordance with a basket of 30 stocks including 4 news stocks starting Monday.

The four new ones have just replaced 4 old ones in HoSE’s second consideration term in 2012 for the index.

Earlier, HoSE announced the list of 30 stocks in the VN30 basket and the free float ratio of component stocks for the new consideration term to replace some of those that have been included since February 6, 2012.

Accordingly, four stocks added in the first consideration term were excluded from the list, including SJS of Song Da Urban and Industrial Zone Investment and Development Joint Stock Co, HVG of Hung Vuong Joint Stock Co, KDH of Khang Dien House Trading and Investment Joint Stock Co and QCG of Quoc Cuong Gia Lai Joint Stock Co.

Those shares will be replaced by four others namely HSG of Hoa Sen Group Joint Stock Co, DRC of Da Nang Rubber Joint Stock Co, NTL of Tu Liem Urban Development Joint Stock Coy and MBB of Military Bank Commercial Joint Stock Bank.

Of which, SJS and QCG were excluded due to being put into the warning list from April 13, 2012.

Currently, 364 out of 702 stocks listed on the Vietnamese stock market, including HoSE and Hanoi Stock Exchange, is trading for less than their face value of VND10,000 (48 US cents) each, the worst level in history, due to the lack of interest of all market participants, the worst level in its decade-long history, Nguoi Lao Dong newspaper reported.

Previously, many people considered the stock market as the most profitable investment channel for making easy money.

“But now the stock market is operating is like a casino, lacking quality financial products,” Nguoi Lao Dong newspaper quoted Dr Alan Phan, Viasa Fund chairman, as saying.

Vietnam's stock market is still young compared to the world markets, he said.

“But it is the securities watchdog with lax management mechanisms that let so many violations happen on the market. The agency need to be more serious in the implementation of sanctions, and more determined to become a good referee so that the game via the stock market will be managed more effectively.”

“We can divide the participants in the stock market into 2 groups: the organizers offering securities products and the consumers.”

“But the organizers are listed companies, accompanied by securities companies, are not currently provide quality financial products to the market, unable to meet consumer demand.”

“Meanwhile, consumers, especially small investors, are pitiful since they do not have much choice but to choose poor quality products,” he added.

Banks to help only most-deserving firms

Commercial banks won't be able to save all of their struggling borrowers at any cost, the State Bank of Vietnam Governor Nguyen Van Binh said at a recent dialogue with Hanoi’s authorities and representatives of about 100 enterprises.

The statement followed recent media reports and complaints by enterprises that many commercial banks had failed to refinance their loans to interest rates of less than 15 percent, in accordance with a recent State Bank order.

Earlier this month, the State Bank had asked lenders to lower rates on outstanding loans in a bid to ease burdens on enterprises in difficulties due to the prolonged economic downturn.

At the dialogue Binh clarified that banks will assist firms which demonstrated the potential to overcome current difficulties and develop in the long term. There will be no point in helping companies destined for default in any case, he noted.

Nguyen Thi Mai Suong, director of the State Bank's Hanoi branch, said all 12 joint-stock commercial banks and eight finance companies based in the capital city had lowered their lending rates on existing loans to 15 percent per year. Vietcombank and BIDV had slashed rates for all existing contracts, while other lenders had cut rates for around one-third to half of their existing contracts, she said.

According to Suong, lending increased 4.38 percent during the first half of the year. "Never in the last 10 years has credit growth been as slow as it was in the first half of this year," she said. "Growth has only been in positive figures for the last three months."

US aims to be No1 investor in Vietnam

Although the global financial and economic turmoil is taking a heavy toll on all economies, many groups from the US are pouring investments into Vietnam, hoping to become the leading investor in the country.

Representatives of 21 US corporations, including big names Chevron, Coca-Cola, Caterpillar, and General Electric (GE), recently visited Vietnam to sound out investment opportunities.

GE announced in March 2012 that it will double its 2012-13 registered capital from the current US$61 million to upgrade a wind turbine tower factory in Haiphong city.

In a meeting with Minister of Planning and Investment Bui Quang Vinh on July 10, Stuart Dean, CEO of GE ASEAN, revealed the company’s plan to expand its operations in Vietnam, with healthcare services as the primary target.

Dean said the Haiphong factory is now employing 600 workers, and it will raise that number to 1,000 when its expansion plan is put in place.

According to Dean, the group has decided to invest more in Vietnam because the country still has favourable business opportunities.

It signed a US$16.5 million contract with the Vietnam National Power Transmission Company to supply equipment for the Pleiku-HCM City 500KV transmission line project. The signing was witnessed by US Secretary of State Hilary Clinton during her visit to Hanoi on July 10, 2012.

It seems apparent that many US corporate giants are developing long-term plans to do business in Vietnam. The Intel microchip plant in Ho Chi Minh City has been operating well, generating US$462 million from exports last year.

Another US group, Chevron, is pursuing a cooperation project with the Vietnam National Oil and Gas Group (PVN) to exploit gas in Bloc B. It hopes to finalise negotiations on gas prices with PVN very soon. Chevron wants to bring the latest technology to Vietnam to get the project off the ground soon.

Meanwhile, Jabil, a subsidiary of the American Chamber of Commerce in Vietnam (AmCham), recently funnelled an additional US$70 million into a project to upgrade its plant at the Saigon Hi-tech Park, raising its registered capital to US$100 million.

Representatives of various leading US groups such as Coca-Cola, Unilever, Kimberly-Clark, Pepsico, P&G, and Nike, accompanied Clinton on her recent visit to Vietnam.  

These groups are currently operating in Vietnam, and according to an official from the Ministry of Planning and Investment, a further influx of US investment into the country is expected in the near future.   

The presence of the representatives from US businesses, which are members of the US-ASEAN Business Council in Vietnam is testimony to the anticipated new wave of US investment in the country, said the official.

Alexander Feldman, chairman of the US-ASEAN Business Council, said US businesses consider Vietnam a potential market, and they want to cooperate more with the Vietnamese Government and businesses in all fields.

The FedEx representative also stated that the Vietnamese market is making positive shifts in the global value chain, and FedEx aims to help accelerate this process by supporting the country in its negotiations for a Trans-Pacific Partnership agreement (TPP) with other partners.

FedEx and other leading US corporate giants have high hopes for success in the TPP negotiations, which will promote trade and investment cooperation amongst relevant parties.

Investment Minister Bui Quang Vinh affirmed that as Vietnam is restructuring its economy, it will focus on high tech, high added value industries, and these are areas in which US businesses are strong, he said.

Trade and investment ties between Vietnam and the US have grown and flourished since the two countries normalised diplomatic ties in 1995 and signed a bilateral trade agreement in 2000, particularly after Vietnam joined the World Trade Organisation (WTO) in 2007.

The US has invested in 621 projects in Vietnam so far with total registered capital of more than US$10 billion, ranking 8th amongst foreign investors in the economy.

Pepper exports look promising

The wholesale price of pepper on the domestic market currently hovers between VND118,000-122,000/kg (US$5.5-6/kg).

The July 21 transaction on India's National Commodity and Derivatives Exchange (NCDEX) showed that the price of pepper would drop slightly in August and September to US$7,788-7,855/tonne, and then rise to US$7,950-7,990/tonne in the next two months.

India is one of the world’s leading pepper importers, that consumes up to US$7,900-8,000/tonne higher than other markets like the European Union and Singapore.

With the traditional Ramadan festival drawing near, Indian traders are turning to Vietnam and other large pepper exporters like Indonesia and Brazil.

In the past six and a half months, Vietnam shipped more than 72,000 tonnes of pepper abroad for US$495 million, with the average export price increasing 10.5 percent to US$7,561/tonne.

SMEs’ competitiveness remains low

Nearly 470,000 Vietnamese businesses are operating and holding crucial position in the economy, however, their competitiveness, cooperation and human resources are limited.  

This was the consensus of the participants at a conference on “Vietnamese small-and-medium sized enterprises’ (SMEs) integration into the global supply chain”, which was jointly held by the Vietnam Chamber of Commerce and Industry (VCCI) and the United Parcel Service of America (UPS) in Hanoi on July 20.

VCCI Chairman Vu Tien Loc said SMEs are considered the backbone of many countries’ economic development strategy, and as in other countries, SMEs in Vietnam are showing their resilience to the recent global financial crisis. However, their competitiveness is stunted and only weak links have been made between other SMEs and large businesses.

These connections, which create value chains, are the Achilles' heel of the domestic economy, especially in the context of widespread and deepened international integration, Loc added.

A recent survey by the Ministry of Planning and Investment (MPI) showed that at the end of June 2012, Vietnam had 658,645 registered businesses, more than 71 percent of which are operating.

The number of SMEs has increased 22.11 percent year-on-year to jump from 38,000 in 2000 to over 283,000 in 2010.

Nguyen Hoa Cuong, Deputy Head of the MPI Enterprise Development Agency, said this is a relatively high rate compared to other economies, and in fact, Vietnamese SMEs are doing very well.

SMEs generate VND78.4 trillion pre-tax profits, each having capital of VND17.6 billion and creating 22 jobs on average. They also contribute 29 percent of total export earnings, according to figures from the General Statistics Office (GSO).

However, experts argued that SMEs are facing uphill challenges, including limited access to financial sources, low quality workforce, underdeveloped technologies and insufficient management capacities.

Moreover, they are suffering fierce competition from big businesses and the negative impact of international integration.

MPI Deputy Minister Tran Quoc Khanh said the dynamic models of the SMEs will play an active role in supporting the process of domestic economic restructuring, with smoother operations and lower costs.

Khanh stressed that the government always takes note of SMEs when it negotiates trade agreements with other countries.

Although, they are mostly operating domestically, SMEs are in dire need to join the global supply chain, added Khanh.

Every country in the world wants to bring the best benefits for its SMEs and Vietnam is no exception, he said.

VCCI Chairman Loc confirmed that Vietnam will do its utmost to assist SMEs to enter the global supply chain, considering this an important factor in speeding up international integration.

Private investment encouraged in infrastructure development

Vietnam is opening its doors to the private sector to mobilize capital sources for socio-economic development, says Minister of Planning and Investment Bui Quang Vinh.

Vinh pointed to the fact that the State has annually allocated large amounts of its budget for socio-economic infrastructure development projects over the years.

As Vietnam is a developing country and the demand for development investment is increasing, requiring other economic sectors to share the burden with the State, he said.

According to the minister, ministries, agencies and localities need to change the viewpoint that capital for socio-economic infrastructure development is mainly sourced from the State budget.  

He suggested Vietnam open the doors wide to the private economic sector both at home and abroad to encourage their investment in development projects.

The State budget will mainly be used in socio-economic areas, including public welfare, national security and defence that cannot be covered by other economic sectors.

Vinh has just made a fact-finding tour of southern provinces to seek solutions for inactive production and socio-economic development.

The southern localities claimed that limited State budget is the biggest hurdle to implementation of development projects.

Vinh affirmed that it is the State management agencies that create the best possible favourable conditions, citing policies and simplified administrative procedures as typical examples, for non-State sectors to invest in localities.

“We must create the best investment climate to build up investors’ trust and encourage them to engage in infrastructure development projects,” said the minister.

The National Assembly and Government have put forward a score of solutions to support businesses, including tax deferment and exemption, and lower bank interest rates.  

At a working session in HCM City, Vinh and HCM City mayor Le Hoang Quan selected a number of pilot projects to be implemented under the Public-Private Partnership (PPP) model.

An inter-sectoral group of experts will be established to study and make recommendations concerning the implementation of this model to make it more effective.

The PPP model is expected to add fresh impetus to the investment climate in Vietnam.  

US State boosts trade with Vietnam

The Trans-Pacific Partnership agreement (TPP) has greatly benefited the US, including Wisconsin state, which has exported commodities and services to Vietnam, mainly processed food, mechanical machinery and technology.

Wisconsin officials say if the TPP agreement lowers trade barriers, its exports to Vietnam will increase significantly.

In 2011 the state exported US$39 million worth of farm products to Vietnam, up more than 50 percent against 2010.

A delegation of Wisconsin entrepreneurs visited Vietnam in January 2012 to seek trade opportunities. In turn, Vietnamese businesses are scheduled to Madison, the capital city of Wisconsin, to attend an international dairy product fair in October 2012.

Paul Jadin, CEO of the Wisconsin Economic Development Corporation, believes that both the US state and Vietnam have great potential for increasing bilateral trade.

With its steady economic growth Vietnam will import more products from Wisconsin, especially dairy products, Jadin says.

Michael Webb, president of U Fuel, a manufacturer and operator of portable fuel stations for airports, marinas and fleets, says his company has signed contracts to ship the fuel stations to several Vietnamese petroleum companies, and is planning to build a factory in Vietnam.

He hopes to long-term partnerships with Vietnam to bring the latest technology to the country.

Gov’t gets tough on SOE restructuring

The Prime Minister has approved a master plan for restructuring State-owned enterprises (SOEs) in the 2011-2015 period, considering it a top priority over the next four years.

The restructuring will focus on key sectors supplying essential products and public services to society, as well as serving security and national defence.

SOEs will continue to be the mainstay of the national economy in order to help the State regulate and stabilise the macroeconomy.

The restructuring also aims to increase the competitiveness and Return on Equity (ROE) of equitised businesses.

The Prime Minister has asked ministries, sectors, localities, economic groups, and State corporations to work out their equitisation plans for businesses that will hold 100 percent, 75 percent +, 65-75 percent, and 50-65 percent of their registered capital in the newly established entities.

He asked SOEs to stop investing in areas beyond their scope until 2015 so they can concentrate on their primary business.

He also asked designated agencies to consider merging or dissolving businesses that operate inefficiently, have recorded losses over a long period of time, or are unable to pay their debts on time.

RoK businesses learn about Vietnam’s environment law

Nearly 80 businesses from the Republic of Korea (RoK) attended a conference in Hanoi on July 20 to acquire knowledge of Vietnam’s Environment Law.

The event was held jointly by the Korean Environment Cooperation (KECO) and the Korean Chamber of Commerce and Industry (KCCI).

Nguyen The Dong, Deputy Head of the Vietnam Environment Administration (VEA), praised the two Korean agencies for organizing the conference to introduce and explain the law to RoK businesses.

He said there should be more similar conferences on to help RoK businesses understand Vietnam’s policies and orientations to environmental protection.

At the meeting, a representative from the VEA spoke about Vietnam’s regulations for evaluating environmental impact and other relevant legal documnents concerning violations and settlement of violations.

Mekong Delta exports 6-7 mln tonnes of rice annually

The Mekong River Delta will stick to its target of exporting 6-7 million tonnes of rice each year, which was set in the region’s overall socio-economic development plan until 2020 and approved by the Prime Minister.

The region will strive for 7.7 percent annual economic growth from 2011 to 2015 and 8.6 percent in the 2016-2020 period.

It set the target of raising its GDP per capita to US$1,600 by 2015 and US$2,850 by 2020.

Also, by 2015, agro-forestry-fishery will account for 36.7 percent of the regional GDP, industry and construction, 30.4 percent, and services 32.9 percent. These figures are estimated to be 30.5 percent, 35.6 percent and 33.9 percent, respectively, by 2020.

Petrol retail prices up VND400/litre

In a surprise announcement, the Vietnam National Petroleum Group (Petrolimex) decided to raise its retail prices of oil and petrol by an additional VND300-400/litre, starting at 22.00pm on July 20.

Accordingly, petrol A95 and A92 now cost VND21,500 and VND21,000 per litre respectively, while Diesel is priced at VND20,300 per litre.

Kerosene oil rose VND300 per litre to VND20,300, and FO oil remains unchanged at VND17,500 per litre.

The decision was applied to all agents of Petrolimex, which holds the largest market share of petrol and oil in Vietnam.  

This is the first time petrol retail prices have gone up after five reductions since the beginning of this year.

Petrolimex decision surprised consumers, as the five previous adjustments were announced by the Ministry.

The Website of the Ministry of Finance reported that the imported petrol and oil prices are between VND71-412/litre higher than domestic retail prices.

The ministry has asked wholesale oil businesses to adjust retail prices based on their registered prices in line with the ministry’s calculations.

Businesses to secure a foothold in Ukraine

Vietnamese products are showing signs of increased stability in the Ukrainian marketplace.

In 2011, Vietnam shipped seafood, pepper, rice, clothing , textiles and footwear to Ukraine, and in return purchased wheat, machines and steel from the eastern European country.

The two-way trade turnover totaled almost US$300 million, according to new figures released at a conference in Ho Chi Minh City on July 20.

Yevhen Prypik, Ukrainian Trade Counselor to Vietnam, provided the participants with practical information about the two countries’ potential for development, especially in such fields as natural resources, labour and technologies, which Ukraine has proved to be successful within.

Rainbow Centre Deputy Director, Vu The Hoang, said Ukraine is an emerging market with an abundant consumer demand.

Vietnamese businesses, however, do not pay due attention to trade promotion and therefore cannot hold key positions in import and export trade in this market, he added.

To support successful Vietnamese ventures in Ukraine in the future, Hoang outlined his centre is implementing  a product promotion campaign,  embarking upon market research and introducing customs and requirements for establishing branches or representative offices in the country, in addition to organizing national exhibitions.

He urged businesses to build links with the 10,000 Vietnamese people working and living in Ukraine in order to achieve better results.

The conference aimed to introduce the Ukrainian market to potential Vietnamese exporters. An international exhibition of Vietnamese products is scheduled between 16-22 September in the Ukrainian capital.

The week-long event will be held at the International Trade Promotion Center (Rainbow Centre) in Kiev, which is considered one of the biggest Vietnamese trade centres in Europe.

Household costs slump in premier cities

This month’s consumer price index (CPI) in Hanoi capital decreased by 0.29 percent compared to June’s statistics, but up 4.46 percent from the same period last year.

This is the most significant fall in CPI since the beginning of this year, the Hanoi Statistical Office announced in a statement on July 20.

Transport services saw the highest fall in prices of 2.9 percent, followed by the housing sector, electricity and water supplies, and fuel and building materials, which all decreased by 1.2 percent. Food and drink services experienced a decline of 0.21 percent.

By contrasts, the fashion industry saw a remarkable growth in CPI with clothes and textiles and hat and footwear products increasing by 1.09 percent and 0.81 percent, respectively.

Prices of other commodity groups marginally rose between 0.02 percent-0.53 percent, excluding those of the postal and telecommunication services, which remained unchanged.

Experts claim that the sharp drop in transport prices is accredited to the Government’s recent slashing of petroleum prices while the slump in food and drink catering services is a result of cheaper food products, especially rice  (down 1.51 percent), which  enjoyed a fruitful harvest.

Mirroring the trend in Hanoi, July’s CPI in Ho Chi Minh City  plunged by 0.57 percent in comparison to the previous month, yet 4.3 percent higher than the same month in 2011.

The cost of transportation, housing and building materials in the city tumbled dramatically by 2-3 percent, while food and drink prices are down 0.57 percent.

CPI is an international benchmark for measuring changes in the price level of consumer goods and services purchased by households.

Eighth annual auto show to roll into town in September

The eighth Viet Nam Motor Show will take place in Ha Noi from September 26 to 30 with the attendance of the top manufacturers and importers in Viet Nam.

The event will provide a good chance for customers to see the latest models and technological advances, and for managers, law-makers, and experts to discuss issues related to manufacturing, assembly lines, taxes, fees and development policies.

Ornamental fish exports soar in first six months

Nearly four million ornamental fish were exported in the first six months of this year, up 28 per cent compared to the same period last year, according to the Farmers Association of HCM City. The major export markets are the US and the EU.

HCM City port operator buys cranes from Germany

International Transportation and Trading Join Stock Co last Wednesday bought 12 cranes worth some VND600 billion (US$28.8 million) from Germany's Kocks Krane and Finland's Cargotec for its ITC International Port in HCM City's District 9.

Kocks will supply four 40-tonne ship-to-shore cranes and eight Rubber Tire Gantry (RTG) cranes of the same capacity in all, delivering half of them in the first quarter of next year.

According to the port operator, the machines use "green technology," running on electricity instead of oil.

Besides, they also generate electricity and reduce consumption by over 30 per cent, thus also providing a competitive advantage.

China's Guangxi region mounts Ha Noi trade fair

China's Guangxi Zhuang Autonomous Region is putting on a four-day trade fair in Ha Noi starting this Thursday, with the expected participation of 120 companies from Guangxi.

The fair will have 140 pavilions covering an area of 4,500sq.m, showcasing over 1,000 different products, including agricultural products, agricultural machinery, sugar production technology, and electronics.

Li Shuo, an official of the Guangxi trade department, said that commercial ties with Viet Nam have strengthened in recent years, with bilateral trade last year increasing by nearly 48 per cent over the previous year to nearly US$7.6 billion.

Guangxi's major exports to Viet Nam include garments, chemicals, steel, automobiles, diesel engines, and agricultural produce, while Viet Nam exports coal, minerals, rubber and other agricultural products to the province.

Ministry of Finance zeroes out coconut export tax

The Ministry of Finance has issued a circular zeroing out the export tax on fresh coconuts effective September 1, a move aimed at easing difficulties of coconut growers amid shrinking global demand and falling prices.

Coconut prices decreased sharply in the first half of the year and coconut export value also plunged by 51.3 per cent against the same period last year to a total of US$21.2 million, according to the Ben Tre People's Committee.

Chemicals company fined for securities fraud

Duc Giang – Lao Cai Chemicals Co was fined VND230 million (US$10,900) for fraud in sales of securities. The State Securities Commission fined the company VND200 million for carrying out a public offering of securities without registering with the commission. The remaining VND30 million in fines was for filing a registration to be a public company 12 months late.

Bao Viet Securities Co sees jump in profits

Bao Viet Securities Co (BVS) reported a profit of over VND55 billion (US$2.6 million) in the second quarter of this year thanks to rocketing incomes from their brokerage operations.

The profits are bright news for the securities firm that posted a loss of about VND26 billion ($1.2 million) for the same period last year.

Total revenue for BVS in the quarter reached VND70.67 billion ($3.3 million), up 47 per cent from the same period last year. Total revenue for the first six months hit VND116 billion ($5.5 million), up 24 per cent, of which revenue from brokerage operations soared 94 per cent to VND31.85 billion ($1.5 million). The firm's cash and cash equivalents as of June 30 stood at over VND630 billion ($30 million). Short-term investment was at VND339 billion, of which securities saw a depreciation in reserves of VND169 billion.

BVS is one of the shares tracked by the HNX30 on the Ha Noi Stock Exchange and it was at the risk of being excluded from the index if it continued to make losses, as in 2010 and 2011.

New rule limits trading by idle brokerages

The State Securities Commission on Tuesday announced a new regulation for securities companies that continued trading but no longer operated brokerage services, limiting them to only one trading account at other brokers.

The commission said: "Securities companies that engage in trading by themselves are allowed to open only one account and shall not open any self-trading accounts at other companies. In case securities firms withdraw their brokerage services, they are permitted to open one account at another securities company to conduct transactions for themselves.

Construction firm to list shares on Tuesday

The Ha Noi-based Foundation Engineering and Underground Construction Joint Stock Co, or Fecon, will list on the HCM City Stock Exchange next Tuesday. The initial price for its first trading session has been fixed at VND24,000.

The company has a charter capital of over VND138 billion (US$6.6 million), up from VND5 billion when it was set up in 2004.

FECON has nine institutional shareholders who hold over 23 per cent of the total stakes, two of them foreign, owning more than 12 per cent. In all it has issued more than 138 million shares.

At this year's shareholder meeting it was agreed to increase its charter capital further to VND189 billion. This will be done by paying a 20 per cent dividend in the form of more than 2.761 million bonus shares and issuing 2.334 million shares to strategic partners and existing shareholders at not less than VND20,000. FECON targets a net profit of VND94 billion this year.-

Researcher seeks responses

Market researcher Cimigo yesterday launched a campaign called "Shout it out and shout it out loud," inviting consumers to give their opinions about goods and services, experiences, and lifestyles at www.chaocimigo.vn.

"Vietnamese are often cautious or reserved when expressing their opinions so we are here asking them to shout it out and loud," the company's managing director, Joe Wheller, said.

Tall apartment building opens

Vinacapital has opened a 34-storey apartment building on the Han River.

The Azura project includes 225 one to three bedroom apartments with modern, high quality fittings and furniture, ranging from 69sq.m to 192sq.m. Prices start at VND1.8 billion (US$86,000).

The real estate developer in co-operation with the Bank for Investment and Development of Viet Nam is offering 9 per cent interest deposit loans for customers.-

Lien Anh Co to re-open centre

A textiles, accessories and footwear centre will be re-opened today in Di An Town, southern Binh Duong Province by Lien Anh Co Ltd.

The centre covers an area of 16ha with a total investment capital of over VND100 billion (US$4.7 million), and originally opened in 2009. It was closed down due to a lack of customers.

Khanh Hoa attracts FDI

In the first six months of this year, the central coastal province of Khanh Hoa licensed four FDI projects with a total registered investment capital of US$185.6 million, reported the Khanh Hoa Department of Planning and Investment.

The most prominent was a shipbuilding project in Cam Ranh City worth $180 million, invested by Oshima-Japan. With $20 million from other projects, the province attracted more than $205 million in the first half of this year, a significant increase compared to previous years.

Bac Ninh extends land-use

The People's Committee of northern Bac Ninh Province has approved a proposal to extend the land use rights for foreign investors at the Viet Nam Singapore Industrial Park (VSIP) from 50 years to 70 years.

The park is home to several housing developments along with a hospital and entertainment area.

New port for the South

Prime Minister Nguyen Tan Dung has agreed in principle for the construction of a new port in Sao Mai – Ben Dinh to be invested by the Viet Nam National Oil and Gas Group (PVN).

PM Dung also noted that PVN needed to figure out legal issues with project investor Vung Tau International Container Port JSC before conducting research and setting up plans for the project.

Leather and shoes expo opens

The 14th International Shoes and Leather Exhibition opened yesterday at the Saigon Exhibition and Convention Center in District 7.

The event has attracted 150 producers and suppliers from 16 countries and territories, including Viet Nam, China, Singapore, Italy, India and the US.

On display are a wide range of shoes and leather products, as well as machinery and equipment used in the leather and shoes industry.

The event, which will close on July 21, is expected to attract 6,000 visitors.

Forum aims to facilitate trade

Vietnamese and South Korean traders met in the capital city yesterday to improve co-operation between exporters and importers.

The event was organised by the Viet Nam Trade Promotion Agency's (Viet-trade), the Vietnamese Embassy in S.Korea and the Korean Importers Association.

It coincided with the 20th anniversary of diplomatic relations between the two nations.

About 200 enterprises, including 80 from South Korea, attended the meeting, which was chaired by the Vietnamese Deputy Minister of Industry and Trade, Tran Quoc Khanh, and South Korea's Vice Minister of Economy and Knowledge, Jick He Sang Yoon.

Vietnamese business leaders were able to learn about S.Korea's markets and how to recognise good business partners.

Deputy Minister Khanh said Korean enterprises were invited to invest more in manufacturing, industry and services in Viet Nam.

Khanh said priority would be given to seafood production, agricultural products, processed foods and vegetables – and hand-made traditional products, textiles, footwear and furniture.

Priority would also be given to industries producing mechanical devices, construction materials, minerals, coal, crude oil, oil-processed products, electronics, informatics products, toys and establishing schools.

Half-year a hard time for Vietnam exports

Local exporters experienced a hard time over the first half of this year with tightened credit, exorbitant lending interest rates, and lower export orders combining to make life difficult.

Total export turnover in the first six months of the year stood at US$53.33 billion, a 22.7 percent increase year on year, according to figures from the Ministry of Industry and Trade.

However, Vietnamese exporters did not enjoy much of this growth, as their exports only rose by 4.1 percent to $20.5 billion, while foreign-invested businesses achieved a 38 percent increase.

The largest obstacle of local exporters is their markets, Deputy Minister of Industry and Trade Nguyen Thanh Bien said at a meeting held Tuesday in Ho Chi Minh City.

The buying power of international importers has fallen sharply, creating an order shortage for local businesses, especially in terms of long-term export contracts, said Bien.

Besides the issues that are in the hands of the exporting markets, all exporters attending the above meeting pointed their finger to what they said is the main culprit -- the credit management policy.

As for the latest policy, in which lending interest rates for existing loans were ordered by the State Bank of Vietnam to be dropped to 15 percent, exporters said the long wait is yet to end.

Even when rates are actually cut to 15 percent, it still is not enough for revitalizing businesses, said Le Phuoc Vu, deputy chairman of the Vietnam Steel Association.

Taking the complaint of exporters over the inaccessibility to cheap bank loans, a representative of the Vietnam Development Bank said it is because banks need to ensure the safety of every single cent they lend out.

“But many borrowers do not have an adequate investment plan, which will not ensure the effectiveness of their money use,” the banker said.

Cap Quang Duong, deputy chairman of the Credit Agency under the central bank, said that 20 credit institutions have implemented the rate cut plan.

Duong believed that businesses will soon stop complaining about not being able to access the cheap loans as these institutions account for 90 percent of the credit market.

HCM City to host ASEAN petroleum conference

The 10th ASEAN Council on Petroleum (ASCOPE) Conference & Exhibition will be held for the first time in Ho Chi Minh City from November 28-30, 2013.

The event, themed “Fuelling the Future of ASEAN towards Sustainable Development”, is expected to attract 500 delegates and more than 300 stalls

Do Van Hau, General Director of the National Oil and Gas Group (PetroVietnam), said in a press conference in Hanoi on July 18 that ASCOPE is a good opportunity for oil and gas companies in the ASEAN region to advertise their products and investigate prospects for new partnerships.

As well as the 10 member countries of ASCOPE, the conference will see the participation of many other international oil and gas companies, particularly those from the Middle East, he noted.

During ASCOPE 2012, the latest information on the opportunities, challenges and solutions in the oil and gas industry in the ASEAN region will be outlined. Along with participation by leading international experts, the event will bring the latest technology information for engineers working in Southeast Asia.   

ASCOPE is organized every four years and the 9th event took place in Thailand.

The council, which includes national oil companies from around the ASEAN region, was established in 1975. Its main objective is to support member countries to increase their capabilities through mutual assistance in the petroleum industry.

Vinacomin hikes electrical production

Total electricity production of 3.3 billion kWh in the first six months of the year shows Vinacomin is well-prepared for the looming competitive electricity generation market, the group said in a statement.

Vinacomin , the Viet Nam National Coal and Mineral Industries Group, would strive to achieve its annual target of electricity generation while it would also establish new thermo-electricity plants, the statement said.

During the first six months, the Na Duong thermo-electricity plant, which is owned by the group, yielded around 406 million kWh of electricity which was 56.4 per cent of the year's target for the plant. The electricity produced by Vinacomin's Cao Ngan plant was 420 million kWh of electricity, accounting for 56 per cent of the year's target.

Vinacomin said its Son Dong plant produced 737 million kWh of electricity, nearly 56 per cent of the annual target while the group's Cam Pha plant generated over 1.7 million kWh of electricity or 43 per cent of the year's plan.

Meanwhile, the US$577 million Mao Khe-Vinacomin plant began supplying the national grid after 36 months of construction. The plant, situated in the northern coal-mining province of Quang Ninh, has a combined capacity of 440MW. Also, the Hai Phong plant was ready for investment bids.

Quynh Lap 1 power plan was submitted in March for Ministry of Natural Resources and Environment approval. Vinacomin expected to earn around VND5.4 trillion ($257 million) a year from electricity generation which would help cover its predicted loss of up to VND8.5 trillion ($405 million) this year. The loss will occur because the State-owned group mines and sells coal to other Vietnamese thermo-electricity plant owners at a subsidised price which is lower than the world market.

People turn back on modern markets  

Hanoi has spent up to hundreds of billions of VND on upgrading traditional markets or building new facilities, but they are always deserted, failing to attract customers who prefer temporary markets.

A number of traditional markets that used to be popular with the public have been upgraded, including O Cho Dua in Dong Da District, Cua Nam and Hang Da in Hoan Kiem District, and Buoi and Thuong Dinh in Thanh Xuan, but this seems to have had a detrimental effect.

O Cho Dua Market was turned into the OCD Plaza which includes seven floors and a basement for parking. Many people even thought that it had been turned into a karaoke club due to a sign on the front of the building. The first and second floors of the building are for rent, but 80% of the stalls have been closed and the rest is empty. The stalls that have remained open also struggle to attract customers.

A roast meat shop owner nearby said most traders had abandoned their businesses and those that remained struggled to attract buyers.

Cua Nam Market is also in the same situation. The market is in fact a small supermarket with two stalls. All steps from packing, price listing and payment are carried out at the cashier counter. Cashiers often have nothing to do and just chat while they wait for the end of the day.

Shops at Hang Da Market mainly sell luxury products which do not draw people’s attention. Cashier counters are sometimes left empty without any staff.

Thuong Dinh Market is in an even worse situation. Two of the three floors are vacant, and there are only 10 stalls on the first floor.

The design of the majority of modern markets is unsuitable and awkward, making it difficult for customers to move around.

Nguyen Thi Quynh, 70, from Nguyen Thai Hoc Street, said, "This cannot be called a market because most people come here just to visit. It is inconvenient because we have to park in the basement and then walk up to the stalls just to buy food.”

Phan Van Chien from Nguyen Khuyen Street said that almost no one wants to come to the market any more. The commodities are too expensive for labourers. People around here usually go to Ngoc Si Lien Market or nearby temporary markets.

Around Hang Da Market, many temporary markets have popped up to meet people’s demand.

Mr. Tinh who sells bread in front of Hang Da Market said although the market is modern, people favour small and temporary markets which are very convenient for them. No one wants to spend VND3,000 for parking services just to buy food.

Land promotions for buying lands in Ba Vi District  

The property fever in Hanoi’s Ba Vi District seems to have subsided, leaving many speculators in difficulties and forced to sell off their investments at a loss.

A square metre of local land is going for VND1-3 million, depending on the location, equal to half the previous level.

Yen Bai is one commune where land is being sold on the cheap. Many land owners are enticing buyers with promotional packages, so we (the reporters) decided to check it out.

Just a few minutes after a phone call, a local land owner named Linh appeared and took us to see his property. We thought that the land would be near his house, but in fact, we had to travel several kilometres and wade across a stream before we arrived. It was an overrun plot of land 1,000 square metres, covered with bamboos.

Linh fixed the price at VND1.2 million (USD57.14) per square metre, explaining that the price is much lowered compared to VND3-3.5 million (USD142.8-166.6) per square metre at the peak of the speculation wave after we said the location was inaccessible. He added that if we bought the entire plot, we would be offered an extra 100 square metres of land located by the nearby stream for free.

When asked about the land papers, he said that it was forestry land which his farmers gave him with handwritten papers. If we bought it, the papers would be transferred to us, noting that he needed the money because he wanted to sell the plot quickly. Land prices in Tan Linh and Van Hoa communes have dropped to VND1-1.5 million (USD47.6-71.4) per square metre without papers and VND2.3 million for land with papers, compared to up to VND6 million (USD285.7) and 10 million (USD476) at the peak of the market. To attract buyers, many land owners have launched promotions. Buyers are given from dozens to hundreds of square metres for free if they agree to buy land.

A local man named Tung who bought nearly 1,000 square metres of land at the peak of the market said that 360 square metres of farm land used to be worth VND1 billion (USD47,619) but now it has fallen to VND300 million (USD14,285). Trung added that the area has potential and was likely to pick up again when eco-property projects are implemented.

There’s not much activity occurring in local real estate offices. Some locals in Tan Linh said many real estate agents have turned to other professions because of the frozen real estate market.

Mr. Chinh from Bon Village in Van Hoa Commune has bought a large plot of land and now he has to pay a very high interest rate per month, so he was very happy to see us. “I have not welcomed any customers for a long time,” he said. He showed us a hilly area covering tens of hectares. He offered us a price of VND1.5 million per square metre, adding that the land had handwritten papers. We mentioned promotions, he said, he would give us dozens of square metres for free, depending on the area we buy.

The land fever in Ba Vi District has passed, pushing many speculators into a sticky situation. Many of them are ready to suffer losses to ease the burden of high interest rates. They offer land promotions to lure customers, but they have failed to stimulate the market.

Chinese goods sold under Vietnamese brands

A large number of garments from China have been brought into Vietnam and had their brands and labels replaced by those of the latter country, Duong Thi Ngoc Dung, CEO of the Vinatex supermarket chain, told a conference Wednesday.

“It hurts seeing these Chinese products sold at Vietnamese supermarkets and other distributing channels,” said Dung at the meeting to evaluate the effectiveness of the drive to encourage local consumers to buy Vietnamese-made goods over the last six months.

The CEO also warned that this is no longer an isolated case.

“If this trend continues a large number of local laborers in the textile and garment sector will lose their jobs,” she said.

Sharing Dung’s concern, Nguyen Thi Nhu Mai, deputy head of the Hanoi Department of Industry and Trade, urged that the inspection and prevention on smuggled goods, especially those from China, should be fortified.

“Otherwise, the encouragement of using Vietnamese products will become less significant,” she said.

In related news, Dong Thinh Co, which imports and sells Chinese goods, was penalized Wednesday by the authorities of the Central Highlands province of Dak Nong for failing to provide receipts for customers.

The company was fined VND12.5 million for the violation, said Nguyen Cao Bang, an official from the province’s Gia Nghia Town tax agency.

Earlier the company had leased the Tay Nguyen restaurant to sell certain cooking utensils for locals at high prices, while the products were of poor quality.

Hundreds of locals Tuesday flocked to the venue and asked to return the pressure cookers, knives, and saucepans they had bought to the company.

The cookers were sold at VND1.6 million each, while tax officials found that their real value is only VND400,000.

Fishermen still ride on luck, take risks for catches

The number of fishing boats in Vietnam has more than tripled over the last 20 years, but local fishermen are still sailing on small, poorly- powered and equipped vessels, and have to depend mostly on their experience and a bit of luck while taking high risks for their catches on the seas.

“To win and protect the sea, we simply cannot continue to see fishermen sailing offshore and relying only on their experience and bravery,” Nguyen Viet Thang, chairman of the Vietnam Fishery Association, told Tuoi Tre.

But while waiting for the innovation and modernization for the fishing industry, Vietnamese fishermen still have to face fierce competition, and even danger, from the steel fleets of other countries, which are modernly-invested with high capacity, while all they have are only wooden boats.

On the afternoon of July 18, a dozen fishing vessels docked at Tho Quang, the largest fishing port in the central region, where fishing boats gather after months spent hunting fish.

But most of the time they come back with worries, says to Nguyen Hoang, a fisherman from Quang Ngai.

“Our boats are too small, too old, and are thus usually encroached upon by Chinese vessels,” says Hoang.

“Whenever they find an abundant fishery, the Chinese always act as if the waters are their own, and drive all of the Vietnamese boats away.”

Hoang says his wooden boat only has a capacity of 180CV, and is capable of loading a mere 100 tons, while the modern Chinese vessels have a capacity of 1,000CV and are equipped with the latest machinery.

Similarly Le Thanh Bi, from Da Nang, says many Vietnamese fishermen want to hunt for the catch in the Hoang Sa waters thanks to the abundant supply, but the fishery is now full of Chinese boats which are willing to chase away any competing vessels.

“Though we do not accept that action, we still have to avoid collisions with them, as small boats like ours will definitely suffer the disadvantage in case of an attack,” says Bi.

There are some 5,700 fishing boats in Quang Ngai, but only 1,700 of them are equipped with the 90-CV engines which will help them sail offshore, according to the province’s Department of Agriculture and Rural Development.

Nguyen Van Hung, a 20-year seasoned fisherman in Vung Tau, says the fishing method of local fishermen has barely changed over the last ten years.

“Most of them still depend mostly on experience, tide, and wind direction for their catch,” elaborates Hung.

Meanwhile Tra Van Be, another fisherman from Vung Tau, adds that there is one thing new -- the equipment that helps those sailing offshore communicate with their relatives on the mainland.

“Everything else remains unchanged though,” he says.

Be says going fishing now is just like playing cards.

“You put a huge amount of money in, and don’t know whether you can win or not.

“It’s all a matter of luck,” he concludes.

The fisherman says his peers are in trouble due to the slumping seafood prices, while the government has provided almost no aid policies.

“My pair of boats is worth VND5 billion, but the bank evaluates that they are only enough for a VND200 million loan,” he says.

“That amount is enough to do nothing, let alone changing from wooden to iron boats.”