Ministry rejects power price hike  

The Ministry of Industry and Trade has rejected a proposal by the country’s largest power company, Vietnam Electricity (EVN) to raise the power price.

The Government has instructed ministries and departments to continue to stabilize prices of necessary commodities, which includes power supply.

EVN had earlier proposed a hike in electricity prices due to funds shortage, which had placed some major projects on hold. The company said it would face a lot of difficulty if the power price was not hiked.

In related news, the Ministry of Agriculture and Rural Development has requested the Government not to import more salt as the present stockpiles of businesses and farmers is already around 235,000 tons.

This move was made after the Ministry of Industry and Trade sent a proposal permitting businesses to import 50,000 tons of salt for industrial and chemical production this year.
 
Few faulty Toyota cars sent for repair  

Vietnam’s Ministry of Industry and Trade on Wednesday said only around one twentieth of flawed cars from Toyota Vietnam have been sent in for checking after an engineer exposed the technical errors in March.  

More than 4,000 cars produced by Toyota Vietnam (TVM) have been brought to a free repairing campaign by the firm from mid April to the end of May, the ministry’s Competition Administration Department said in a statement.

In March, TMV’s engineer Le Van Tach exposed three flaws in more than 73,240 TMV cars and lodged a complaint with the Vietnam Register. The discovery led to the recall of more than 65,000 faulty cars and forced the largest carmaker in Vietnam to convey a public apology to its customers on April 15.

The number of cars fixed by the program is “too low,” the department said.

On April 15, Toyota Vietnam announced that nearly 66,000 units of both Fortuner and Innova models would need to be recalled for repair. It said all units of the two models, produced before December 23, 2010, would be checked and repaired for free.

But many customers are unaware of this repairing campaign as they have not received any communication about it, the Saigon Tiep Thi newspaper reported on May 20, adding that Toyota only sent the information to relevant authorities and media.

Concerning the case, lawyers and consumer advocates said Toyota customers could file lawsuits against the carmaker for failing to take immediate action on the incident.

Toyota admitted, on April 1, that around 8,830 Innova model cars suffered from technical flaws, but declined to issue a recall until two weeks later.

Also on Wednesday, Tach, the 35-year-old engineer exposing the flaws to the public, filed a complaint about a suspension notice he received on June 12, saying that the suspension to his job is improper and unnecessary.

Tach has been suspended for three months pending investigations into his bad influence on his colleagues’ work and prestige, TMV confirmed at a Monday press conference.

Earlier on May 31, Tach had lodged a petition to Akito Tachibana, TMV general director, saying that he was repeatedly insulted and threatened by seven officers in the company since he exposed three errors of TMV cars to the public, and required an apology and compensation for the acts, Thanh Nien News reported.

“The suspension is based on Tach’s accusations and behavior towards several officers in the company and it has nothing to do with his exposure,” TMV general director Akito Tachinaba told the press.

Tach said he has recently discovered four further errors in Toyota cars but the company has deliberately avoided admitting the errors.
 
City to host major int’l manufacturing solutions show July  

This year’s MTA Vietnam series of exhibitions for the machine tool, precision engineering and metalworking technology industries will take place in Ho Chi Minh City on July 5-8 with more than 300 showing companies, the organizers announced here Thursday.

William Lim, project director of MTA Vietnam 2011, told a press briefing that 303 companies, with 83% being foreign ones, had put their names down to join the eighth annual show. He added they come from 27 countries and territories.

Mr. Lim comes from Singapore Exhibition Services Pte Ltd, which co-organizes the MTA Vietnam together with Exhibition Services Co. of the Vietnam Chamber of Commerce and Industry, better known as VietchamExpo.
 
Firms in sectors like aviation, automotive, precision engineering, electricity, electronics, construction, supporting industries and chemicals will introduce their latest products at the event, staged at the Saigon Exhibition and Convention Center in Phu My Hung Town in District 7, he said.

Collated with the show are Metrology Vietnam 2011, ToolTec Vietnam 2011, Subcon Vietnam 2011, and Automation Vietnam 2011, which are also for manufacturing solutions.

The event has so far seen confirmation of participation from well-known names such as Mitsubishi Electric, Nikon, TRUMPF, Mitutoyo, Amada, Mazak, Yamazen, Guehring, Jainnher, and Renishaw.

The group booths at the event are the China Pavilion, Germany Pavilion, Italy Pavilion, Japan Pavilion, Korea Pavilion, Singapore Pavilion, Taiwan Pavilion, Thailand Pavilion, UK Pavilion, and newcomer Turkey Pavilion.  

To complement the exhibition, a series of seminars will be held alongside the show. The engineer maintenance and production waste management seminars, held on July 7 and 8 respectively, will provide opportunities to network, listen to expert viewpoints from industry professionals, exchange ideas and stay up to date on the technologies in the manufacturing sector, he said.

Vietnam imports more than 90% of its metalworking equipment and mechanical products, according to market analysts.

Country to give priority to promote beaches-islands tourism  

Development of sea tourism in Vietnam, from now until 2030, was the focus at a conference held in Hanoi on June 16.
 
Vietnam will establish five marine tourism areas by 2020 to compete with other regions such as Ha Long-Cat Ba, Lang Co-Son Tra-Hoi An, Nha Trang-Cam Ranh, Phan Thiet-Mui Ne and Phu Quoc.

The tourism industry will focus on investing and exploiting potential tourist areas like Van Don-Co To and Hoang Sa and Truong Sa archipelago.

Vietnam is at an advantage with a long coastline of over 3,200 kms, one million square km of sea, 2,700 small and large islands and hundreds of beautiful beaches and bays. Sea tourism can develop well in places such as Ha Long-Hai Phong-Cat Ba, Hue-Da Nang-Quang Nam, Van Phong-Dai Lanh-Nha Trang, Phan Thiet-Mui Ne, Kien Giang-Phu Quoc and Con Dao-Vung Tau.

Sea-island tourism already attracts about 70 percent of international visitors to Vietnam and 50 percent domestic visitors annually, which is 70 percent of the entire turnover in the tourism industry.

Sea tourism is being considered as a strong point for the development of Vietnam tourism.

Vietnamese exports to Mexico hit US$72 million

Vietnam’s exports to Mexico reached more than US$72 million in April, up 25 percent compared to the last year’s figure of US$58 million one year earlier.

According to the Trade Office of the Vietnamese embassy in Mexico and the Central Bank of Mexico, Vietnam’s imports from Mexico in May dropped 27 percent from US$5.4 million in April to US$3.9 million.

Trade counsellor of the Vietnamese embassy in Mexico, Hoang Anh Dung said Vietnam continues to enjoy a trade surplus to the second largest economy in Latin America, thanks to an increase in traditional exports such as footwear, garments and seafood.

Vietnam’s exports to Mexico hit US$286.8 million in the first four month of this year, a year-on-year increase of nearly 21 percent, and imports fell by 42 percent to US$16 million.

In 2010, two-way trade turnover between Vietnam and Mexico reached more than US$914 million and is expected to hit US$1 billion this year.

Food exports drive up local prices

The increasing unofficial export of many kinds of food items including poultry eggs, pigs, sugar and coconuts to China has pushed their prices up in the domestic market.

The price of poultry eggs in HCM City markets has risen significantly, with salted duck eggs now costing VND5,000 (US$0.24) each, compared to VND3,500 earlier.

Furthermore, traders are finding it difficult to purchase enough eggs despite offering higher prices, reports the Sai Gon Tiep Thi newspaper.

According to Ba Huan and Vinh Thanh Dat companies, two biggest egg suppliers for HCM City, the quantity of eggs they have been able to buy from the Mekong Delta has decreased by 30-40 percent recently.

Some businesses in Vinh Long province and Can Tho city have collected large quantities of fresh eggs to make salted duck eggs for export to China.

The Animal Health Centre in the region, which issues quarantine certificates, also affirmed that the export of salted duck eggs to China by enterprises in Vinh Long and Can Tho provinces has increased remarkably in recent times.

Ba Huan, director of Ba Huan Company, said with the Autumn Festival drawing near, both in China and Vietnam, there is a huge demand for salted duck eggs – an important ingredient in the moon cake that is a festival specialty.

She also said many Chinese businesses have come to Vietnam to buy poultry eggs and pigs, weighing between 80-120 kilos each, pushing pork prices up in the domestic market.

Two other commodities whose prices have risen as a result of increased exports of coconuts and sugar to China.

Coconut prices have risen from VND110,000 per dozen earlier this year to VND165,000.

On account of a big difference in sugar prices between Vietnam and China , many businesses are buying sugar and transporting them to the border gate for export to China .

Nguyen Thanh Long, Chairman of the Vietnam Sugar Cane and Sugar Association, said a kilo of sugar is sold at about VND30,000 in China , VND10,000-12,000 higher than in Vietnam.

Some sugar factories in the northern and central region are selling a large volume of sugar to traders who then export it to China via border trade, he said.

He also said the association will petition the Ministry of Industry and Trade to allow sugar imports when local prices hit VND20,000 a kilo.

Expo to push VN manufacturing potential

Vietnamese enterprises will have the opportunity to access the latest manufacturing and tool technologies at the 8th Viet Nam International Precision Engineering, Machine Tools and Metalworking Exhibition (MTA) held in HCM City next month.

The four-day (July 5-8) event, covering 8,800sq.m is the largest ever exhibition of its kind to be held in the city, Bui Thi Thuc Anh, director of VCCI Exhibition Service Ltd Co, said at a press conference held yesterday in HCM City.

MTA Viet Nam would incorporate Metrology Viet Nam, ToolTec Viet Nam, SubCon Viet Nam and Automation Viet Nam, she said.

The exhibition would help domestic businesses promote their products and build new partnerships. It would also provide an ideal platform for these companies and visitors to achieve a sound understanding of the manufacturing industry in Viet Nam.

William Lim, project director of MTA Viet Nam 2011 said this year's exhibiton would feature over 300 exhibitors from 27 countries and territories. There will be 11 group pavilions from mainland China, Germany, Italy, Japan, South Korea, Singapore, Taiwan, Thailand, Turkey and United Kingdom.

Some of the major companies exhibiting at MTA Viet Nam 2011 include Amada, Blum, Bystronic, Campro, Carl Zeiss, Chin Fong, Guehring, Heidenhain, Jainnher, Mitsubishi Electric, Mazak, Renishaw, Nikon and Mitutoyo.

An exhibitor, Isamu Aono, general director of Yamazen said: "As Viet Nam's largest manufacturing solutions event, MTA Viet Nam allows us to promote and gain more visibility for our products."

A two-day conference would be held alongside the exhibition. It would provide a platform to network with businesses, industry professionals and discuss the latest developments taking place in the manufacturing sector.

According to the Ministry of Planning and Investment, Viet Nam's manufacturing industry has been experiencing steady growth with the sector ranking second last year in terms of attracting Foreign Direct Investment.

This marked a step up from the third rank in 2009 with a 127 per cent increase in registered capital.

With the country's manufacturing sector progressing as a result of Government encouragement, World Trade Organisation commitments and industrial liberalisation, the country is set to become one of Southeast Asia's major manufacturing hubs.

MTA Viet Nam 2011 is organised by the VCCI Exhibition Service Ltd Co in collaboration with Singapore Exhibition Services Pte Ltd.

Economic cooperation conference held in Milan

A conference on economic cooperation between Vietnamese and Italian businesses in the Lombardy region of Italy was held in Milan on June 16.  

The event was co-organised by the Vietnamese embassy in Italy, the Vietnam Chamber of Commerce and Industry (VCCI) and the Business Association in Lombardy (ASSOLOMBARDA).

Speaking at the conference, Vietnamese ambassador to Italy Dang Khanh Thoai talked about the country’s political and socio-economic situations as well as its business potential.

He also called for Italian businesses to invest more in the country and confirmed that Vietnam will always be Italy’s faithful partner.

Italian businesses now have many opportunities to invest in or export their products to Vietnam in fields such as construction, machinery, mining exploration, agriculture, chemicals, building materials and tourism. They can also transfer their latest technologies for environmental protection and wastewater treatment.

ASSOLOMBARDA officer for international trade, Chiara Fanali, stressed that Vietnam has great potential for economic development and is very attractive to international businesses, especially those from Italy.

Vietnamese small and medium sized enterprises are very suitable for Italian businesses, which makes them want to seek cooperative opportunities in Vietnam, she added.

She also acknowledged the Vietnamese embassy’s contributions to promoting bilateral economic cooperation and hoped that the embassy will be a good link for businesses from both countries.

Weaker dollar feeds growing trade deficit  

The State Bank of Viet Nam has taken a controversial series of tough measures to reduce the dollarisation of the economy, regain control of unstable foreign exchange markets and ease the downward pressure on the value of the Vietnamese dong.

"The recent series of measures aim to control foreign reserves and ease tensions on forex market," says SBV Governor Nguyen Van Giau. Forex policy was being managed with an eye to market supply and demand and the trade balance, Giau added.

Together, however, the measures raise a larger question of how much weaker the US dollar should be in balance with the national priority of building an export-oriented economy.

The SBV recently tightened the cap on interest rates commercial banks were able to pay on US dollar deposits to 0.5-2 per cent per year. It also told State-owned enterprises to sell foreign reserves to the commercial banking system starting next month; and raised the compulsory reserves at credit institutions from 6 per cent to 7 per cent.

The series of actions was expected to ease further downward pressures on the value of the Vietnamese dong as well as enrich dwindling foreign reserves, estimated earlier this year at US$12.2 billion – or nine import weeks – from a high of nearly $24 billion in late 2008.

The average forex rate yesterday remained at VND20,618 per dollar, the level it has held since last Friday and the lowest level since the devaluation of the dong back on February 11. However, the dong has remained fairly stable overall in recent weaks, peaking at VND20,733 per dollar on April 19.

A stabilised currency market allowed the SBV to buy up $1.2 billion in May for the nation's foreign exchange reserves.

As of June 15, US dollar deposits in the commercial banking system totalled $24 billion, including $13 billion in institutional deposits and $11 billion in individual deposits.

The central bank has been buying up around $276 million per day from commercial banks in recent days, according to an SBV report.

However, Vietinbank chairman Pham Huy Hung this week told reporters that the SBV should not further tamper with the forex rate.

"The forex rate has seen positive evolution, although foreign currency credit growth is quite hot," Hung said. "That is worrisome for the future, as it may also affect the country's trade deficit. In addition, the difference between lending and mobilisation of foreign currency will lead to difficulties for banks in the future."

The nation's trade deficit in May was estimated at about $1.7 billion, the highest since January 2010, bringing the deficit so far this year to $6.59 billion.

Economist Pham Do Chi said that if the dollar continued following its current downtrend, the trade deficit might hit $16 billion this year.

"The central bank's forex policy package has stabilised the US dollar exchange rate, but the Vietnamese dong is still under strong pressure to depreciate in this context of the economy," said the deputy head of the Central Institute for Economic Management, Vo Tri Thanh.

"If the dollar is illusionally over-weakened, the trade deficit will increase. However, when the exchange rate is still far from VND20,000 per dollar, we should not be too worried," Thanh said.

French businesses visit Vietnam’s shipbuilding companies

A delegation of seven French businesses will arrive in Vietnam on June 20 for a three day visit learn more about Vietnam’s ship building industry, according to the French embassy in Hanoi.  

The working visit aims to strengthen cooperation between French and Vietnamese businesses to develop sustainable partnerships and cooperate in trade, industry and technology.

The visit will provide an opportunity for prestigious French businesses to introduce their advanced technologies, equipment, services and industrial production line to Vietnamese businesses.

The delegation plans to hold working sessions with Vietnamese businesses and agencies from Hanoi, Nam Dinh, Hai Phong and HCM City.

HCM City firms are ignorant of energy rules

Many HCM City enterprises, including those that operate in the energy and environment sectors, do not have accurate and updated information about laws and policies related to energy conservation and consumption, an official has said.

There were firms that were not aware of subsidies that they can take advantage of; and others who unwittingly engage in acts that violate the law, Huynh Kim Tuoc, director of HCM City Energy Conservation Centre, said yesterday.

At a short meeting held by HCM City Investment and Trade Promotion Centre (ITPC), in co-operation with HCM City Energy Conservation Centre (HCM-EEC) and other agencies, questions raised by enterprises showed they lacked information on energy saving and environment protection policies, he said.

Every day, he receives and answers several questions from firms.

For instance, the Government recently issued a decree on public lighting in urban areas that very few firms are aware of, he said.

He said he would initiate frequent meetings to inform enterprises about relevant provisions of the Government's energy saving law, renewable energy development programme, solid waste treatment and others.

The city would also provide answers within a maximum of five days when firms ask for clarification or information on the Government's energy conservation policies through the website at www.doithoaidn.hochiminhcity.gov.vn.

Many enterprises said they did not understand well the procedures and regulations on tax preferences as well as the import of energy saving products, capital access and interest rate subsidies if any. They also wanted to learn more about ways and to acquire energy conservation labels for their products.

A representative from Anh Minh Chau Company importing light emitting diode (LED) lamps that save a lot of energy suggested that the Government lower import taxes for this product.

Ho Quang Khai, chairman of Hong Quang Minh Joint Stock Company that produces bio-diesel, said his company had earned no profit because of the high prices of raw material. He wondered if the Ministry of Industry and Trade had a subsidy policy for bio-diesel aimed at stimulating fuel production.

Prospects for Vietnam’s agricultural market

A seminar on prospects for Vietnam’s agricultural market was held in Hanoi on June 17 by the Institute of Policy and Strategy for Agriculture and Rural Development.

The seminar attracted international experts from the Food and Agriculture Organisation (FAO), the International Rice Research Institute (IRRI), the International Fund for Agricultural Development (IFAD), the World Bank (WB), the US Department of Agriculture (USDA) and leading Vietnamese experts.

The seminar provided information about the future of agriculture, particularly seafood, rice, coffee and livestock in Vietnam and the world and discussed sustainable agricultural development and high quality production.

The Vietnamese agriculture, forestry and seafood sectors can expect to face a number of difficulties in the next two years during the process of economic restructuring, including rising inflation and costs, tightened monetary and credit policies, instability in the international agricultural market, climate change, and disease epidemics.

The sectors play an important role in the national economy accounting for more than 20 percent of the GDP and 28 percent of the total exports in 2010. However, during the process of global economic integration, agriculture has not reached its potential and strength because of the weakness in forecasting and analyzing the markets.

In 2010, the world saw many changes in the strategies for agricultural development by most strong exporters of farm products. For example Thailand and the US are now focusing on sustainable development and their domestic markets.

Vietnam, Switzerland boost trade cooperation

Vietnam and Switzerland wish to boost cooperation in various fields, especially in trade and investment, said Vietnamese ambassador to Switzerland Hoang Van Nha.

Nha was speaking at a Vietnam-Switzerland Business Forum in Zurich, Switzerland on June 15.

He noted that two-way trade turnover between the two countries reached US$616 million in 2010 and US$228million in the first four months of this year. Switzerland is now the world’s 18th biggest investor in Vietnam with direct investment reaching US$1.95 billion in 2010 and US$226 million in the first four months of 2011.

Swiss businesses are involved in 79 projects in Vietnam, most of them in connection with processing industry, information technology, tourism, education and training, with a total capitalization of about US$2 billion.

Adolf Meier, Chairman of the Vietnam Committee under the Swiss-Asian Chamber of Commerce, emphasized that the forum, sponsored by the Vietnamese Embassy in Switzerland, the Vietnam Chamber of Commerce and Industry, and the Vietnamese-Asian Chamber of Commerce, opened up opportunities for businesses in both countries to seek partners.

However, he said, the level of bilateral cooperation is still far from matching the two countries’ potential.

Hans R. Schurch, a Swiss investor in HCM City, said that Vietnam is an attractive investment destination and that western investors should learn more about the country’s culture.

Vietnam still finds it difficult to penetrate the Swiss market as they can not meet the high requirements of the country.

However, as the Swiss franc keeps appreciating, Swiss businesses tend to move their production lines abroad, especially to dynamic Asian countries. This is really a good opportunity for both countries to boost bilateral economic cooperation.

Long Thanh airport project approved

The Prime Minister on Tuesday approved the Long Thanh International Airport Project in the southern province of Dong Nai.

The airport is expected to serve as a key entry point in the Southeast Asian region and will be large enough to receive A380 and A800 air-crafts, while having capacity to process 100 million passengers and 5 million tonnes of cargo a year.

In the first phase of the project (to be completed by 2020), two parallel runways will be built with 68 parking spots to accommodate A380 aircraft.

The second phase of the project (2020-30) will see the number of runways expanded to three, and the third phase beyond 2030 will increase the number to four.

MIT urged to halt salt imports temporarily

The Ministry of Agriculture and Rural Development has asked the Ministry of Industry and Trade not to assign a further import quota of 50,000 tonnes of salt for chemicals production.

The temporary halt to salt imports has been called as domestic supplies of salt can easily meet expected demand of 110,000 tonnes for 2011, according to MARD. The halt will also help local salt farmers, who are experiencing financial difficulties, to sell their salt.

Trade unions active in HCM City's IZs

Trade unions have been set up at more than 600 out of nearly 1,000 businesses in HCM City's Industrial Parks (IPs) and Export Processing Zones (EPZs) this year, an increase of 20 per cent compared with last year.

More than 169,000 workers have become members of trade unions, according to Nguyen Van Khai, president of Trade Unions of HCM City's IPs and EPZs.

Trade unions in co-operation with law advisory offices this year have met with hundreds of workers who sought advice to protect their rights and interests.

Dinh Vu Polyester signs PVN deals

Petrovietnam Petrochemical and Textile Joint Stock (PVTex) company and domestic and foreign partners signed five contracts to provide services to the Dinh Vu Polyester Fibre factory in Hai Phong City.

According to General Director of PVTex Vu Dinh Duy, Dinh Vu Polyester Fibre Project is near completion.

With a production capacity of 175,000 tonnes per year, once the plant goes into commercial operation it will meet about 40 per cent of market demand for raw materials used for textiles and other light industries.

Foreign firms bite into PetroVietnam

The Viet Nam National Oil and Gas Group (PetroVietnam) has signed deals to sell stakes in real estate and securities companies to South Korean partners.

Under the agreements, which were signed at an ongoing conference on trade promotion in South Korea, Hanshin Group will purchase a 10 per cent stake in the PetroVietnam Construction Joint Stock Corporation and the Shinhan Investment Group will buy a 15 per cent stake in PetroVietnam Securities Incorporation.

PetroVietnam Deputy Director General Nguyen Tien Dung said that this was part of the group's five year plan, during which time it would focus on four key areas: oil exploration and exploitation both at home and abroad, petrochemistry, thermo-electricity and other clean energies, and technical services in the oil industry.

The group would retain its 100 per cent stake in PetroVietnam Exploration Production Corporation to ensure the target was met, he said.

In addition, PetroVietnam Insurance's strategic shareholder, the Oman Investment Fund, has decided to raise its holdings in the Vietnamese partner.

Vice chairman of the PetroVietnam board Hoang Xuan Hung said that the two sides had reached an agreement to enhance co-operation, particularly in oil and gas.

The Oman Oil Company has also agreed to invest in the Ca Mau Fertiliser Plant project, which is expected to go into operation in 2012.

The two sides will sign the detailed contract in Q3.

PetroVietnam estimates its first half total revenue will reach VND340 trillion (US$16.5 billion), up 45 per cent year-on-year and 68 per cent of the group's target for the year.

Oil sales are projected to earn $5.8 billion, up 34 per cent from the same period in 2010, and equivalent to 69 per cent of its annual goal.

In the first half of this year, PetroVietnam disbursed a total investment worth more than VND46 trillion ($2.23 billion), equivalent to 37 per cent of the total it projected for the whole year.

HCM City attracts 1.65 million int’l visitors in six months

Ho Chi Minh City attracted more than 1.65 million international visitors in the first six months of this year, up 10 percent against the same period last year.

The largest numbers of foreign visitors were from the US, Japan, Taiwan, the Republic of Korea, Singapore, France, and Russia, bringing in VND23 trillion for the tourism sector, 24 percent higher than last year’s figure.

HCM City is now preparing for its seventh International Tourism Fair, which will be held from September 14-17 under the theme “Four nations- one destination”.

The focus will be on promoting the domestic market and international cooperation in building a safe, friendly, and civilized tourism environment, said La Quoc Khanh, Deputy Director of the municipal Department of Culture, Sports and Tourism.

Accessing credit poses challenges
 
Non-manufacturing sector credit was one of the highlights at a conference held yesterday.

"The Vietnamese stock market is stagnating, the VN-Index having dropped to 450 points and below. Developing the securities market depends on the expansion of non-manufacturing sector credit," said Le Dang Doanh, the former President of the Central Institute for Economic Management.

As of June 30, the credit limit for the non-manufacturing sector will have reached 22 per cent and 16 per cent by the end of the year, which will be a hurdle to the market.

"In my opinion, the concept of the non-manufacturing sector is pretty controversial, particularly in terms of a knowledge economy," Doanh said. He added that information technology and real estate products were difficult to define as manufacturing or non-manufacturing products.

Alongside new policies, apart from managing financial investments, banks need time to adjust business strategies in order to cope with reduced credit limits.

The CEO of one commercial bank stated that reducing credit limits were not feasible, only securities loans being short-term, while the majority, including consumer and real estate loans, were medium- and long-term.

Reducing credit limits by 1 per cent at a large bank might equate to 10 per cent at a smaller one, thus necessitating that the size of banks be considered across the system, he added.

"Foreign exchange measures such as selling foreign currency, lowering interest rates in US dollar and raising reserve requirement ratios, although necessary, could cause difficulties for importers with legitimate needs," Doanh said.

Given this year's projections, Doanh added that 2011 would be tougher than 2008, when the world economic crisis took over the world.

"Viet Nam still faces many challenges including a budget deficit of around 6 per cent of total GDP, higher than many other Asian countries. A reduction in public investment has also undergone improper implementation," he explained.

Reports on public investment reduction has revealed that figures from the first half of the year only reached 50 per cent of the initial plan.

"Although the Government has adjusted inflation from 7 to 15 per cent, the number will be difficult to maintain, seeing as CPI fetched 12.7 per cent in five months compared to last December," Doanh said.

While Government Resolution 11 only lists goals rather than specific solutions, more effective measures are needed in order to achieve objectives, according to the economist.

Da Nang grants three new FDI licences

The Da Nang People’s Committee had granted licences to three new foreign direct investment (FDI) projects with a total registered capital of VND8.518 billion by mid-June.

Of the total, a licence was granted to UCSI Ventures Vietnam Limited Co which will set up a training centre of professional skills and foreign languages worth VND6 billion. The business plans to complete necessary registering procedures within nine months.

The city also issued a licence for the US-invested Golf Management, L.L.C Limited Co to establish a golf course management limited company. The VND618 million business is expected to be put into operation in July, 2011.

Another licence was handed over to a VND1.9 billion project on software production invested by Chassaing Kieu Tien Le, a US national. The project is scheduled to be operational in July this year.

The central city has, to date, granted licenses to 203 FDI projects with a total investment of US$3.3 billion.

Vietnam attends int’l gift exhibition in Malaysia

Vietnamese businesses are showcasing their products at the International Gifts, Premium and Stationery Exhibition which opened in the Malaysian capital city of Kuala Lumpur from June 15-17.

Vietnam’s pavilions for skillful and diversified products, especially those made from natural materials, attracted a large number of visitors.

Addressing the opening ceremony, Malaysian Minister of Industry and Trade Mustapa Mohamad underlined the need for businesses to diversify both designs and quality of their products to meet the increasing demand for gifts, premium and stationery.

The sector has greatly contributed to the national economy, he said, adding that in 2010, Malaysia earned (US$1.43 billion) from exporting these products.

The event attracted the participation of hundreds of businesses from Malaysia, regional and international countries.

An Giang to build new airport

The Minister of Transportation has approved a project to build An Giang Airport in Can Dang commune, Chau Thanh district with a total capitalisation of more than VND3.5 trillion.  

The project covering an area of more than 235ha will be divided into two phases of construction.

By 2020, the airport runway 1,850m in length and 45m in width will be capable of receiving ATR72 aircraft or similar ones.

From 2020-2030 it will be upgraded for Airbus A321 aircraft and larger planes.

Pakistani enterprises look for VN trade

Pakistani enterprises said they hoped to further foster trade and investment relations with their Vietnamese counterparts during a business matching conference held yesterday in Ha Noi.

"There is huge potential for Vietnamese and Pakistani enterprises to accelerate co-operation," said Shahzad Ali Malik, president of the Lahore Chamber of Commerce and Industry.

The president also said the chemical, agriculture, garment, construction, wood and paper sectors were promising areas for more bilateral co-ordination between the two business communities in the time ahead.

The conference, organ-ised by the Viet Nam Chamber of Commerce and Industry and Pakistani Embassy in Ha Noi, witnessed the participation of about 20 enterprises.

During the event, Pakistani Ambassador Shahid M G Kiani called on more Vietnamese companies to come to Pakistan to seek business opportunities.

To date, there are eight Pakistani business delegations travelling to Viet Nam to explore the market here while only one Vietnamese delegation has come to Pakistan.

Two-way trade has grown significantly during the past several years, reaching US$183 million in 2009 and over $61 million in the first quarter of this year. Of the three-month sum, $32.5 million came from Vietnamese exports, up 92.3 per cent year-on-year.

Viet Nam and Pakistan have inked many agreements, creating legal foundations for bilateral co-operation such as the Agreement on Double Taxation Avoidance, Framework Agreement on Scientific and Technological Co-operation, the MoU between the Viet Nam State Bank and Pakistan State Bank and the Agreement on Fisheries and Aquaculture Co-operation.

During the 2nd session of the Inter-governmental Committee between Viet Nam and Pakistan organised in Islamabad in June, 2010, the two countries agreed to put forward measures to strengthen co-operation in all aspects to develop potentials and take advantage of the bilateral relationship. 

Project to foster legal system integration

The Ministry of Justice and the US Agency for International Development (USAID) launched a project in Hanoi on June 14 to support the Vietnamese Government in implementing legal economic integration.

Minister of Justice Ha Hung Cuong ratified the three-year project worth US$11.7 million on April 27.

Deputy Minister of Justice Hoang The Lien said the project aims to boost economic cooperation between Vietnam and the US and help Vietnam speed up global economic integration to fulfil its commitments to multilateral treaties.

"The project also aims to improve Vietnam's business environment, making it more transparent and compatible with international standards and the World Trade Organization," Lien said.

The official added that Vietnam has tried its best to create a more competitive and sound climate for investors to grasp opportunities arising from trade liberalization.

Tra fish export prices increase

The export price of Vietnam’s Tra fish in the six first months of this year saw increases over the same period last year in most markets, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

Accordingly, Tra fish sold to Switzerland earned the highest price of US$4.43 kg, followed by Japan market with US$4.25 kg.

At present, there are 20 markets over the world importing Tra fish at prices between US$3 to 3.97 kg.

In the first four months of the year, Tra fish exports reached 208,445 tonnes worth US$521.3 million, up only 5.6 percent year-on-year in volume but 23 percent in value.

Forecast predicts retail sales boom
 
Viet Nam is one of the five most lucrative retail markets in the world, according to a study conducted by Research and Markets, a global market research source.

In its "Viet Nam Retail Market Forecast to 2014", the US-based source predicted that retail sales would surge at a compound annual growth rate of around 23 per cent from 2011-14.

This increase was attributed to economic growth of around 6.8 per cent in 2010, changes in the country's regulatory structure favouring foreign investors and increasing consumer attention towards modern retail concepts.

In the study, Research and Markets said because the sector was dominated by traditional players, the penetration of modern retailing in the country was quite low.

It found that most Vietnamese consumers preferred buying from corner grocery shops than modern outlets.

"This is opposite to most international consumers, who tend to shop weekly or sometimes monthly," it said.

However, the researchers still believed that modern retail channels would play a crucial role in future growth, improving their position in the market. "Increasing purchasing power, changing lifestyles and the influence of western culture are some of the key growth drivers in the country's modern retail market," the research said.

It was also expected that during the next few years, a short wave of consolidation would emerge as foreign retailers tried to consolidate their position and deepen their market penetration.

In urban areas, they forecast that demand for consumer goods would be strong.

"White goods and consumer electronics sectors have witnessed numerous foreign-invested joint ventures that manufacture their brands locally. Most of the output is exported. Although the clothing sector is well-developed and export-oriented, the cosmetics and toiletries sector do not possess well-developed local manufacturing facilities," it said.

While making the report, researchers analysed factors critical to the success of the retail industry in Viet Nam. It also identified key players in the market and included their recent activities.

Petrolimex to make IPO in July

Viet Nam National Petroleum Corp (Petrolimex) has announced that it will debut its shares in July, despite the current unfavorable conditions of the stock market.

According to Vuong Thai Dung, deputy general director of Petrolimex, the company plans to auction more than 27 million shares to the public, equivalent to 2.56 per cent of its charter capital.

Dung said the state of the stock market would not negatively affect Petrolimex's initial public offering (IPO) plan, noting that the Prime Minister had approved Petrolimex's equitisation scheme, including the method of deciding the price at auction.

After the equitisation, Petrolimex will have a charter capital of VND10.7 trillion (US$519.4 million), of which the State will retain 94.99 per cent.

Software giant FPT beats targets

Software producer FPT Corp (FPT) posted a revenue of over VND9.79 trillion (US$475.4 million) in the first five months of 2011, already surpassing its monetary goal for the year by 22.3 per cent. This figure also represents a 29 per cent increase from the same time frame last year.

The corporation's profit reached over VND862 billion ($41.8 million) during the period, up 11 per cent year-on-year and also exceeding the yearly goal by 17 per cent, meaning that net profit of the parent company reached VND488 billion ($23.7 million).

Navibank to buy back shares

Nam Viet Bank (NVB) has applied to buy back 4.5 million shares from June 20 to September 15 in order to restructure its capital source. The company will use its undistributed profit from last year to finance the repurchase.

NVB posted a first quarter pre-tax profit of more than VND60 billion (US$2.9 million).

The bank has set targets of raising its total assets to VND30 trillion ($1.46 billion).

Largest power plant on track to boost national grid

Viet Nam's biggest power plant project is now on track to swing into full operation next year as scheduled, the Electricity of Viet Nam (EVN) has said.

Receiving Deputy Prime Minister Hoang Trung Hai at Son La hydro-power plant yesterday, EVN representatives said the installation of the third and fourth turbines of the plant was on schedule and turbine No 3 would become operational in August and turbine No 4 in December.

Most of the equipment for the last two turbines No 5 and 6 for the plant, located in the northern mountainous province of Son La, had also been delivered to the site, waiting for installation.

By yesterday, the first two turbines of the plant, which joined the national grid in January and April this year, had generated more than 2 billion kWh of electricity, nearly half of the amount generated by the whole country in a month.

The electricity generated by the two turbines had made significant contributions to the country's energy security during this year's dry season, the EVN said.

Hai asked the project management board of Son La Hydro-power Company and contractors to pay more attention to the lives of workers to help them do a better job.

The plant, the largest of its kind in Southeast Asia, is invested, designed, built and operated by Viet Nam.

With six turbine groups and a combined capacity of 2,400MW, the project has a total investment capital of some VND42 trillion (more than US$2 billion) and will produce 10.2 billion kWh of power a year when it is completed.

HCM City approves plan to bury cables
 
The HCM City People's Committee has approved in principle a plan to bury all power and communications cables underground by 2020, an official said.

Pham Quoc Bao, deputy director of the HCM City Power Corporation (EVN HCMC), told Tuoi Tre (Youth) newspaper that under the plan, 2,240km of lines would be buried under 337 streets and four residential complexes.

To cost around VND10 trillion (US$476 million), the task would be implemented in two phases.

In the first stage (2011-15), the job would be undertaken on 143 streets in Districts 1 and 3, including Ton Duc Thang, Hai Ba Trung, Le Duan and Dong Khoi streets, and the roundabouts near Ben Thanh Market and the September 23 Park.

In this phase a total of 930km of low-, medium-, and high-voltage lines would be buried.

To reduce inconvenience, the task of digging up streets and burying the cables would be done at night and one section of a street at a time.

To ensure a street was not dug up several times, the HCM City Power Corporation would work with district authorities to co-ordinate the work with telecom and cable TV companies.

Since the cost involved was large, the corporation would bring in a part and raise the rest from individuals and organisations.

It had also asked the People's Committee for subsidised bank loans.

Vinacomin to mine coal near Red River

Vinacomin Group and the northern Thai Binh Province People's Committee on Tuesday agreed to enhance co-operation to create a pilot exploration project on the region's coal basin.

Under the Hong (Red) River Coal Basin Development Programme, the two sides will investigate modern technologies on exploiting, processing and using coal.

The province asked Vinacomin to accelerate the pace of infrastructure development to facilitate in the exploitation and link new rural areas with the rest of the province.

Covering an area of 3,500 square metres, the Red River coal basin passes through Thai Binh, Hung Yen and Nam Dinh provinces and has total coal reserves of around 210 billion tonnes. Around 90 per cent of the reserve lies in Thai Binh Province.

In the first phase, the group will focus on northern Hung Yen Province's Khoai Chau District and Thai Binh Province's Tien Hai District which have combined reserves of nearly 40 billion tonnes.

Four new mines are planned for Hung Yen, one for Nam Dinh and eight for Thai Binh.

The Red River Energy Company, which was assigned to manage the project, plans to invite a team of Polish specialists to survey Thai Binh Province's Kien Xuong and Tien Hai districts to choose a location for application of experimental underground technologies.

The Ministry of Industry and Trade (MoIT) asked Vinacomin's Mining Investment Consul-tancy and Industry Company to build a plan for exploitation, processing and use of the basin by 2020 with a vision to 2030.

The plan is expected to be submitted to the Prime Minister this third quarter after a review by MoIT and an environmental review by the Ministry of Natural Resources and Environment.