CPI to increase by 6.77% in 2013

Credit organisations expect 2013’s consumer price index (CPI) to reach 6.77 percent, slightly higher than the Government’s 6–6.5 percent target.

An early August survey conducted by the State Bank of Vietnam’s (SBV) Department of Monetary Forecast and Statistics revealed August’s CPI could hit 7.19 percent, pushed up by rising electricity, hospital, petroleum, gas, food, and education prices. The 6–6.5 percent goal will become an even more daunting challenge requiring the combined efforts of all ministries and departments.

Over 75 percent of surveyed credit organisations said adjusting State-managed commodities will decide how the CPI plays out in the third quarter and 2013 as a whole.

In the opinion of 67.11 percent of survey respondents, loan rates will fall during the third quarter at a rate below 2 percent. After the SBV’s recent June adjustment, most credit organisations hope inter-bank rates will rise by a maximum of 2–3 percent.

The third quarter GDP growth rate is estimated at 5.26 percent and at 5.48 percent for the whole year.

The majority of credit organizations are optimistic about Vietnam’ economic prospects as saying that judged SBV’s monetary policy as reasonable and balanced and urged the SBV to extend it until the end of this year.

They believe inflation will nudge upwards as part of the gradual national economic recovery and business credit promotion. Exchange rates are stable, interest rates continue to fall, and Government support will help ease businesses’ access to capital.

Forum discusses social business development

Investors gathered at a forum in Hanoi on August 22 to learn about the social investment environment in Vietnam.

They hoped to seek partners through co-ordinated efforts to settle social and ecological issues in the country, said Vu Tien Loc, chairman of the host Vietnam Chamber of Commerce and Industry (VCCI).

They all wished for viable State policies to help raise their prestige among the masses, and support around 28 percent of Vietnam’s population, including poor households, people with disabilities, underprivileged children, patients with HIV/AIDS, and elderly people, Loc said.

For their part, they pledged to support the State in ensuring social stability and security as well as gradually improving local living standards and bridging the gap between residential classes.

Some 200 social businesses are reportly operating effectively in the country.

Participants in the forum focused on the role of social businesses in Vietnam, opportunities and challenges for social investment, financial solutions for social investment, and the enhancement of management capacity.

Japanese, Vietnamese businesses seek cooperation opportunities

Vietnamese and Japanese entrepreneurs met in Ho Chi Minh City on August 22 to seek investment and cooperation opportunities.

The event was attended by leaders of the Sakai city chapter of the Japan-Vietnam Friendship Association, the Sakai municipal Business Association and over 40 business representatives from Ho Chi Minh City and Japan’s Sakai city, Osaka prefecture.

Participants were introduced to Vietnam’s investment incentives for foreign investors, particularly in infrastructure, support industry and hi-technology which are the areas of Japanese businesses’ strength.

Co-hosted by the Vietnam Union of Friendship Organisations, the Ho Chi Minh City chapter of the Vietnam-Japan Friendship Association and the CT Group, the event was designed to celebrate the 40th anniversary of the two countries’ diplomatic ties.

Vietnam-Lao 2013 trade turnover totals US$504 million

Bilateral trade between the two countries reached US$504 million in the first half of this year, up 8.3 percent on last year’s same period.

Vietnamese Deputy Minister of Industry and Trade Nguyen Cam Tu and his Laos counterpart Khemmany Phonxena agree Vietnam’s and Laos’ two-way trade turnover has yet to properly reflect both countries’ potential.

This assessment was shared by the two Deputy Ministers at their talks in Vientiane on August 22.

They acknowledged the significant increases in Vietnamese-Lao trade turnover, including 2012’s US$866 million total (up 17 percent year on year)

The two sides pledged to remove obstacles hindering business operation and create the best possible conditions for trading goods across border areas.

They also committed to keeping each other up to date on their respective incentive policies and promulgate the necessary legislation facilitating bilateral trade and investment.

The two leaders discussed tailoring trade agreements to both countries’ World Trade Organisation membership.

They vowed to extend preferential tariff rates for select goods in 2014, another measure designed to cultivate trade links and encourage development, peace, and stability in both countries.

HCMC hosts Int’l Medical and Pharmaceutical Exhibition

As many as 350 enterprises from 20 countries and territories are attending the 13th  Vietnam International Medical and Pharmaceutical Exhibition  in Ho Chi Minh City over August 22–24.

The 400-booth exhibition showcases medical and laboratory products, pharmaceutical and processing equipment, packaging machinery, and ophthalmologic and dental products.

It also includes a series of seminars introducing the latest medical and pharmaceutical products, high-tech equipment, and Vietnamese trading policies.

The exhibition offers domestic and foreign enterprises a chance to negotiate for business partnerships, exchange experiences, and promote their products and services efficiently.

The annual event is co-organised by the Ministry of Health and the Ministry of Industry and Trade.

Report projects future financial woes of social security fund

ILO suggests that the Vietnam Social Security Fund could start having deficits by 2021 and experience depletion by 2034 if no reforms are made.

The report, titled “Actuarial Valuation of the public pension scheme of the Vietnam Social Security Fund” was presented to the Vietnamese Government at a workshop co-organized by the ILO and the Ministry of Labour, Invalids and Social Affairs on August 22.

It provides financial projection of the present public scheme of the fund and analyses possible reforms that could increase the fund’s sustainability.

This is in the context of Vietnam’s demographic changes, low insurance coverage and limited law enforcement and the country’s preparations for the reform of the Social Insurance Law, which is expected to get the green light from the National Assembly next year, thus improving the coverage of workers and ensure financial sustainability of the fund.

“Social insurance reform is like driving a big boat: the captain cannot wait until the last moment”, said ILO Vietnam Director Gyorgy Sziraczki. “Rather, it should start turning even before seeing the obstacles in front. Unfortunately, the ILO report shows that the obstacle is dangerously close”.

“Government, employers and workers need to work together urgently and find the right balance to ensure pensions now and in the future,” he added.

To ensure the fund’s sustainability, according to the ILO, Vietnam should gradually increase the retirement age to 65 for both men and women, considering there is and will be a substantial increase in life expectancy and a smaller ratio of the working population to pensioners.

Vice Minister of Labour, Invalids and Social Affairs Pham Minh Huan, stressed that in the 2020-50 period, the rate of aging for Vietnam’s population would expect to be among the fastest in Asia.

ILO projects are critical for the Ministry to have the ground for future development plan of the social insurance and retirement policies, he said.

The Vietnam Social Security (VSS) covers Vietnamese citizens with employment contracts of three months or longer but the enforcement remains a challenge. Only one fifth of the total workforce has social insurance today.

Despite increase in compulsory contribution collection to VND89.6 trillion last year from VND6.3 trillion in 2001, only 47 per cent of all registered enterprises contributed to compulsory social insurance fund in 2010.

Vietnam started its aging phase when over 60-year-olds accounted for more than 10 per cent of the total population in 2012, five years ahead of prediction. With fewer young workers in the future and a generous pension formula, the pension fund will be in jeopardy unless urgent measures are introduced in the reform.

Petrol retailers have reduced their price by VND300 per litre as from 8pm on August 22 at the request of the ministries of Finance and Industry and Trade.

Meanwhile, the price of mazut oil has also gone down by VND257 per litre.

This is the first time reduction in fuel prices this month. A92 petrol is now sold at VND24,270 per litre.

Since the beginning of this year, domestic petrol prices have gone up four times and down three times, hitting a record high of VND24,570 per litre.

Polypropylen (PP) material imports will be slapped a tax rate of 1% from 2014 from the current 0%, which will then be increased to 2% in 2015 and 3% in 2016 onwards, says a new circular of the Ministry of Finance.

The circular provides amendments on preferential import tax rates imposed on certain commodities effective from September 26, 2013.

The finance ministry announced the import tax rate hike plan on May 10. According to the ministry, the tax adjustment from 0% to 3% on PP, benzene and p-Xylene is to protect and encourage the local production of these items. Besides, with the tax adjustment, the State doesn’t have to offset prices for Binh Son and Nghi Son oil refining companies from 2013 when their factories came into operation.

According to the Vietnam Plastic Association (VPA), as PP is one of the three major plastic materials used for local plastic production, those suffering the most from the tax rate hike will be household utensil producers in the low-value segment.

Domestic firms only turn out 150,000 tons of PP annually while local demand is 750,000 tons per year, forcing industry players to import 600,000 tons to make up for the shortfall, VPA reports.

With the import price of some US$1,500 a ton, plastic enterprises will have to pay an extra VND500 billion to import the same material volume when the tax rate is increased to 3%.

VietinBank gets approval to expand

The Viet Nam Joint Stock Commercial Bank for Industry and Trade (VietinBank) got approval to open eight more transaction offices in five provinces, the State Bank said in a post on its website.

Specifically, the Ha Noi-based bank is allowed to open eight transaction offices, including three in Dak Nong Province, two in Thai Nguyen Province and one each in the provinces of Kon Tum, Dong Nai and Hoa Binh.

Vietnamese goods week for Dong Nai

A Vietnamese goods week is set to take place in the southern province of Dong Nai between August 27 and September 4.

According to Director of the provincial Department of Industry and Trade Le Van Danh, the week aims to promote Vietnamese goods and provide local high-quality products to consumers with reasonable prices.

More than 300 supermarkets, shops, trade centres and manufacturers will showcase their products during the week-long high-quality Vietnamese goods fair.

Smartlink cards increase coverage

Smartlink Card Services (Smartlink) announced that they have expanded inter-network connections with ATM/POS system of Banknetvn for six banks, including VCCB, KienLongBank, MDB, Shinhan Vietnam Bank, OCB and LienVietPostBank.

Accordingly, holders of cards issued by these institutions can now make cash withdrawals and balance inquiries at more than 16,000 ATMs of banks within Smartlink and Banknetvn network.

Holders of cards issued by VCB, KienLongBank, MDB, OCB and LienVietPostBank can make payments for goods and services at 105,000 points of sale (POS) in commercial centres, supermarkets, restaurants and hotels across the country.

Thais invest in thermal power plant

The Thai electricity firm Egati will invest in a 1,200MW thermal power plant worth about US$2.26 billion in the central province of Quang Tri.

Chairman of the provincial People's Committee, Nguyen Duc Cuong, announced this yesterday.

The plant will be built in the form of BOT (Build-Operate-Transfer), and will be transferred to Viet Nam after 25 years.

According to Cuong, the plant, which will cover 450ha in Hai Lang District, will include two turbines. The first is expected to be operational between 2019-20 and the second one in 2030.

Once operational, the plant will generate 7.25 billion kWh of commercial electricity a year.

Rice exporters told to be careful

Viet Nam cannot export 6.8 million tonnes of rice as expected for first seven months of the year due to the cancellation of nearly one million tonnes of rice shipments by buyers, according to the Viet Nam Food Association (VFA).

Most of the cancelled contracts were related to Chinese traders and the rest to Philippine traders.

To prevent this, the VFA has recommended that businesses carefully check the conditions of every contract before they decide to sign, especially with Chinese traders.

Nguyen Dinh Bich, a leading expert on rice exports, said China will need more imported rice than last year.

SBV holds forex rate as market steadies

An official from the State Bank of Viet Nam (SBV) told local media on Wednesday that there would be no adjustment of the foreign exchange (forex) rate at present.

He said the forex market showed good liquidity and the demand for dollars had been met.

Earlier, SBV said on its website that the forex market was becoming stable while the exchange rates at commercial banks and on the free market tended to decrease.

SBV said it would continue closely monitoring the forex market so that it could also take measures to stabilise the market if necessary. Two months ago, SBV devaluated the Vietnamese dong by 1 per cent.

On Wednesday, some commercial banks raised dollar prices, offering from VND21,060-21,075 for buying and VND21,120-21,140 for selling.

US$16 billion poured into Vung Ang Economic Zone

The Vung Ang Economic Zone in central Ha Tinh province has attracted 79 projects with registered capital totalling over US$16 billion year to date, according to Ho Anh Tuan, head of the EZ.

He said the 79 projects include 44 from domestic investors and 35 from foreign ones.

In the first seven months of 2013, investment licences were granted to 14 projects with a total capital of more than US$500 million.

One of the largest projects in the Vung Ang EZ is the project to build a US$10 billion steel factory and sea port invested by Formosa Heavy Industries Corporation from Taiwan, China.

Firms based in the Vung Ang EZ have so far created jobs for over 15,000 workers with the average salary of VND4.5-5.5 million (US$211.5- 258.5) per month.

The Vung Ang, one of the country’s five key coastal economic zones, was founded in 2006, covering an area of 22.78 hectares in Ky Anh district.

Tra fish production up, but prices fall

State and local enterprises should promote renovation to overcome current difficulties in the local tra fish industry, said experts.

The Fisheries Department, under the Ministry of Agriculture and Rural Development, said from early this year to mid-August, farmers achieved a total output of 770,000 tonnes of tra fish, 5.3 per cent higher than the same period of last year.

The increase in output has pushed the price of tra fish down by VND2,000 per kilo to 19,000-22,000, so both farmers and enterprises suffered losses, they said.

In the Cuu Long (Mekong) Delta, some of total 70 tra fish export processors need to operate moderately due to a lack of capital, with some owing farmers huge sums of money.

Farmers, on their part, also had no money to invest in production.

During the first seven months of this year, tra fish export values declined, year-on-year, 0.6 per cent to US$985 million, the department said.

Nguyen Van Kich, general director of Cafatex, a seafood export processor in Hau Giang Province, said the industry had a surplus and the selling price was fixed by buyers not sellers, while exports experienced difficulties due to technical and commercial barriers.

To solve the surplus, the state should control exporters, as well as market supply and demand, Kich said. It should also review the current plan on the production of tra fish to connect production with sales.

Additionally, Nguyen Huu Dung, VASEP deputy chairman, said exporters should study export prices and customer's tastes on many export markets, but not focus on some markets.

State management should be promoted to ensure the quality of tra fish products and the trade mark of Vietnamese tra fish, Dung said.

Nguyen Huy Dien, deputy director of the Fisheries Department, said in the near future, the provincial people's committees should push for investigations into the quality of raw tra fish to ensure the quality of tra fish products.

Vu Van Tam, deputy minister of agriculture and rural development, said enterprises should restructure export markets, expand outlets to China and Eastern European countries, restructure production and promote co-operation with farmers.

The ministry would strengthen management of tra fish varieties and turn out products of high quality, Tam said.

The department said Viet Nam expected to achieve a total tra fish export value of $1.7-1.8 billion for the whole year.

Proposal to place retail ceiling on essential goods

The Government should stipulate ceiling prices for essential goods such as petroleum, oil and electricity for businesses which have a monopoly in the market, thus preventing them from making their prices too expensive for customers.

This was a proposal made by economist Vu Dinh Anh at a seminar, held in Ha Noi on Tuesday, to discuss solutions to complete a State management mechanism for the prices of essential goods and services set by monopolistic businesses in the market.

Anh said the ceiling price should be the retail one, not the producer price. Enterprises would be allowed to sell their products and services lower than the ceiling price, encouraging them to save costs.

He added that management agencies should include taxes, businesses costs and workers' salary to calculate the ceiling price. Enterprises therefore would strive to reduce costs instead of increasing prices.

Businesses would have to lower their selling prices to increase their market share, he said.

Nguyen Anh Tuan, head of the Finance Ministry's Price Management Department, said prices of goods and services played an important role in the economy. The State management on some goods and services has been vital.

However, Tuan said the management on essential goods of monopolistic businesses has seen shortcomings.

Sharing this idea, Nguyen Minh Phong, head of the Ha Noi Institute for Socio-Economic Development's Economic Research Division, said the Viet Nam National Coal and Mineral Industries Group (Vinacomin), the Electricity of Viet Nam (EVN) and wholesale petroleum trading companies were allowed to increase selling prices in a road map, causing concerns among people about the possibility of increasing prices because these were monopolistic enterprises.

Phong said businesses asked to implement market prices, while petroleum, oil, electricity and coal have not had a competitive market.

EVN has not separated generation power companies, while Viet Nam National Petroleum Corporation (Petrolimex) accounted for a half of the petroleum market.

He said it was difficult to bring the essential prices for goods close to the world market because the country does not have a complete competitive market.

Economist Ngo Tri Long, former deputy head of the Price Management Department, said the electricity sector included three phases of power generation, transmission and distribution.

However, EVN controls all three phases which accounts for 60 per cent of the market.

It is the reason why EVN has been monopolistic, he said, adding that the power price has been adjusted seven times in upward trend since 2009.

He said the power calculation, mostly based on EVN's production costs and compensation for losses, does not consider cost saving.

He proposed publishing price calculating methods, diversifying power resources and avoiding imports.

In addition, the Government should quickly separate the power purchasing company from EVN to create a fair competitive market.

In terms of petroleum, he said businesses stipulated selling prices themselves, which was contrary to price management in the market mechanism.

Petroleum businesses immediately proposed an increase of selling prices as soon as there was a slight increase in the world market. However, they had not reduced prices when world prices continued to decrease.

He said the Government should establish an independent agency to evaluate the prices of monopolistic goods, then submit suitable selling prices to the Government to ensure benefits for the people and businesses.

Plastics, steel face more tax

Viet Nam would raise import duties for plastics and steel under plans announced by the Ministry of Finance (MoF) on Wednesday.

The announcements came as the Ministry opened consultation with authorities and businesses on the proposed tax hikes.

The move will see plastics (unsaturated polyester) import duties raised to 5 per cent from the current zero per cent rate; while steel wire and steel bar duties will rise to 3 per cent and 10 per cent respectively.

Domestic plastic enterprises have alleged plastic importers have side-stepped import taxes on plastics by declaring goods as "other polyesters" which carry a zero per cent rate; creating an unfair playing field for local producers.

Domestic companies complained to MoF, pushing the proposal to raise import taxes.

MoF clarified that polyester was only taxed zero per cent in liquid or paste form, although customs declarations have shown that polyester has been declared in "debris" and "other" forms to exploit the lax import duty.

MoF has criticised these kinds of customs declarations as ‘commercial fraud' and is backing the plans to protect domestic production and crack down on fraud.

Similar plans will be put into place to protect local steel makers who have also come under pressure from importers exploiting loopholes in import taxes.

Currently, only one category of steel is taxed with a 10 per cent duty, while the remainder are taxed at a rate of zero per cent.

The Ministry has vowed to raise import taxes across all four steel categories in an effort to boost domestic production and shield domestic companies from imported products.

Poor fertiliser plagues farmers

The overlapping management over fertiliser production and trade has been blamed for the increased number of violations relating to fake or poor-quality fertiliser in Viet Nam.

At present, the Agriculture and Rural Development Ministry and the Ministry of Industry and Trade are in charge of managing fertiliser.

Viet Nam has about 30,000 fertiliser producing and trading establishments with a total output of 8 million tonnes, meeting 80 per cent of the domestic demand.

However, Truong Hop Tac, head of the Fertiliser Management Department under the Agriculture Ministry, said that the vague responsibilities for each ministry caused confusion for local enforcement agencies.

For examples, some localities assigned the Cultivation Division to manage fertiliser, while others assigned the Plant Protection Division or the Agricultural Product Quality Testing Agency, he said.

Most localities lacked staff to oversee fertiliser-related activities, as well as equipment for testing the quality of fertiliser, he said.

Moreover, presently, Viet Nam decides which fertiliser products are eligible to circulate on the market based on list of over 5,000 registered fertiliser labels, he said, adding that the tool posed problems because of difficulties in tracking the products' origin.

Do Thanh Lam, deputy head of the Market Management Department under the Ministry of Industry and Trade, said that violations for fake or poor-quality fertiliser production was growing constantly.

Over the last 18 months alone, market watch forces detected over 5,300 violations, fined 1,390 for a total of VND17.2 billion (US$816,000) and seized 917 tonnes of substandard fertiliser.

Notably, the Market Watch of northern Hoa Binh Province found a trading violation involving 36 tonnes of fake fertiliser. In northern Yen Bai Province, 225 tonnes of fake Diamino Phosphate fertiliser was found being transported from China.

Lam said that violators including firms, private establishments and households were using more and more complicated tricks.

They take advantage of border terrain for smuggling, change packaging and use fake documents to make the smuggled products penetrate domestic market.

There were cases in which farmers collected cheap substandard fertiliser and then sold it to other farming households. Some even added half baked brick powders, soil, salt and dyeing substance.

He said that violators, to avoid criminal prosecution, did not pack all of the stored fertiliser as finished products, but just packed enough fertiliser for it to sell out soon.

"It's difficult for them to control fertiliser prices and quality because of an insufficient distribution system," Lam said, adding that few fertiliser producers have set up their own distribution channel from production to retail stores.

Now most of their distribution relies on commercial companies or private stores, he said, implying that products needed to undergo many steps before reaching farmers.

At present, it seems that any one can make and sell fertiliser.

Tac, from the Agriculture Ministry, said that it was necessary to impose more requirements for fertiliser production and trade, as well as clarify or set up a vertical system from central to local levels responsible for fertiliser management.

Lack of employer/applicant connection causes labour market paradox

While the unemployment rate in Vietnam has been at a high level, many local enterprises are still finding it hard to recruit good employees.

Statistics showed that unemployment rates in the country had reached 2.28% in the first half of this year. The figure indicated a considerable increase compared with the rate of 1.96% in 2012.

However, recruitment demand among big companies has not fallen and many claimed that they’re still looking for new employees.

Mai Hoa, who is in charge of human resource at VinGroup, said, “Currently, we’re trying to employ new staff at several posts in order to meet our long-term development plans.”

According to her, they have a great need for those who have finished vocational training.

Trinh Thanh Hai, a human resources official at ABB Group, said they’re recruiting newcomers for several posts, ranging from specialists to office staff, to ensure that their business plans are realised on schedule.

It seems that there is a paradox in the labour market as demand for the labour force of big companies has yet to be filled but many trained workers can’t find a job.

Some experts attributed the situation to the lack of an effective connection between employers and applicants.

Paul Nguyen, General Director of CareerBuilder, said, “Apart from online job applications for employment, the organisation of large-scale job bazaars and training events could be an effective solution to foster such a connection”.

Dr. Alan Phan said such events are a great opportunity for applicants to learn how to find a good job.

A Career Builder Day – Career & Education Expo 2013 will be held on August 24 at HCM City's White Palace and on September 7 at Hanoi's Grand Plaza.

Enterprises boost rice product exports

Many food producers in the country have raised the value of rice by making rice flour, noodles and rice paper that are favorite products in overseas markets.

Trang Si Duc, deputy general director of Bich Chi Food Joint Stock Company, said that the enterprise has over 100 products made from rice. In the first six months, revenue generated from these products increased by around 10% year-on-year.

Exports to the U.S., the EU and Japan made significant contributions to the growth. The enterprise has also shipped products to Myanmar.

Its rice flour exports have strongly increased. In 2010, domestic consumption accounted for 70% of its revenue but the ratio between domestic consumption and exports is now 50:50.

Bich Chi Company expects to ship its products to Africa this year. To enter the overseas market, the enterprise has joined many international fairs and trade promotion trips to find partners overseas, Duc said.

Other enterprises have also updated production technology, using rice as material for many instant products.

Bui Huu Loc, director of flour processing firm Loc Sanh, said that enterprises can produce over 700 kilos of flour from a ton of rice. Rice flour export prices average out at over VND14 million a ton while average 5% broken rice export price is over US$400, or around VND8.4 million. Obviously, processed rice products generate higher value than the raw product.

At the recent seminar on Vietnamese rice values, a representative of Colusa-Miliket Foodstuffs Joint Stock Company said that it uses 10,000 tons of rice to process instant products for domestic sale and export each year. Processing technology has helped local enterprises raise the value of rice compared to normal rice exports.

The Vietnam Trade Office in Japan has also recommended local firms to raise the quality of rice exports, focusing on production of rice products to meet increasing demands in Japan.

Hi-tech firms face ‘huge need' for skilled workers

Hi-tech firms in HCM City are facing a severe shortage of skilled workers with only 30 per cent of trained workers meeting their job demands.

Tran Anh Tuan, deputy director of the city's Centre of Forecasting Manpower Needs and Labour Market Information, said that the IT industry has a huge need for programmers, network engineers, hardware engineers and web designers.

But the number of job seekers meets only 70 per cent of recruitment demand, and a majority of these are new graduates with little experience who lack foreign language competency, he said.

The IT sector is among the industries with the highest demand for skilled workers. Likewise, only half the recruitment demand for mechanical engineers is being met.

Nearly 55,000 students graduating from universities and colleges in the city every year, with 40 per cent majoring in science and technology streams.

Major national power projects still in limbo

Deputy Prime Minister Hoang Trung Hai has urged the northern provinces of Son La, Dien Bien and Lai Chau to speed up land clearances and the resettlement of local residents to allow construction of key Son La and Lai Chau hydropower plants.

Working with the State Steering Board for the Son La-Lai Chau hydropower plant in Lai Chau province yesterday, Hai praised the board and the province for the project's progress, affirming the Government would prioritise investment in the project.

He also requested the three provinces of Lai Chau, Son La and Dien Bien accommodate displaced residents, adding that the Ministry of Agriculture and Rural Development would take a leading role in helping to resettle locals and foster development in resettlement areas.

At the working session, leaders of the relevant ministries and departments also suggested measures to allocate land and forest plots to resettled families and assist them with farming sustainable livelihoods.

Le Trong Quang, Deputy Chairman of the Lai Chau Province People's Committee, said the resettlement policy had made good progress in line with the master plan previously approved by the Prime Minister.

Currently, 60 of 1,760 households in the province have been relocated, with the remainder to be moved in 2014, he said. Meanwhile, a total of 4,600 families resettled in Son La province have received compensation.

According to the steering board, construction of necessary infrastructure in resettlement areas in Son La and Lai Chau province have been complete, while locals moving into the new areas had received land for agricultural production.

Many local residents have extracted higher incomes from planting rubber trees in the districts of Sin Ho and Mong Te.

Lai Chau's province leader Quang requested the Electricity of Viet Nam speed up capital allocations to resettlement areas, which had been delayed.

Construction of Lai Chau hydropower plant – the third biggest after Hoa Binh and Son La plants – began in January 5, 2011 and is scheduled to be operational by early 2017.

Son La hydropower plant began generating power in December 2012, after 7 years of construction.

Conference: VN in need of safe natural rubber standards

Viet Nam needs to establish a national standard for protein-free natural rubber to ensure the safety of products made from it, a seminar related to a Japan-aided project heard in HCM City yesterday.

The "Establishment of Carbon-Cycle-System with Natural Rubber" project is being carried out at the Ha Noi University of Science and Technology and Rubber Research Institute of Viet Nam in co-operation with the Japan-based Nagaoka University of Technology.

The six-year project, funded by the Japan International Cooperation Agency and the Japan Science and Technology, will be completed by March 2016, seeks to help Viet Nam establish a national standard for protein-free natural rubber.

It will also present the latest research developments in evaluating rubber and methods to purify rubber, and enable the rubber industry to share their needs and knowledge.

Speaking at the meeting, Ngo Thi Ngoc Ha, deputy director of the Viet Nam Standards and Quality Institute, said the country has not had a standard for protein-free natural rubber by which the safety of products can be measured.

The latest research on "de-proteinisation" method under the project would help create a standard, she said.

Products made from natural rubber are environmentally friendly but could cause latex allergy in people, she said.

Conventional leaching and rising methods can only remove protein from the surface but not inside. The latter comes out when the surface is damaged, causing latex allergy.

Prof Tran Van Top, vice president of the Ha Noi University of Science and Technology, said the project includes five research groups, adding its results would pave the way for future development of natural rubber in the country.

Prof Masao Fukuda, the programme leader, said the project aims to help Viet Nam replace synthetic rubber made from fossil sources with natural rubber, enabling "green" development in the country.

Viet Nam is a leading producer of natural rubber and the fourth largest rubber manufacturer in the world.

The meeting was attended by more than 50 senior executives from companies belonging to the Viet Nam Rubber Group, scientists from the Ha Noi University of Science and Technology, Rubber Research Institute of Viet Nam, and Nagaoka University of Technology.

Vinacomin plans corporate bond issue

The debt-laden Viet Nam National Coal and Mineral Industries Group, or Vinacomin, is planning a big bond issue this year, reported the newspaper Dau tu Chung khoan (Securities Investment).

The issue, if carried out this year, will be the second biggest corporate bond issue behind the VND7.6 trillion (US$362 million) deal conducted by Viet Nam Infrastructure and Property Development Group in April.

Last week, Vinacomin selected Vietcombank Securities and VP Securities to be its advisory on the deal.

The group is now preparing to set up a contract, identify the issuance volume, prepare documents and determine the interest rate, Vinacomin announced on its website.

The specific volume has not been disclosed but is forecast to be VND3 trillion ($143 million).

In the middle of last year, Vinacomin also put up VND3 trillion worth of bonds for sale but only successfully sold VND500 billion ($23.8 million). The group sold the remaining VND2.5 trillion ($119 million) worth of bonds in the first quarter of this year.

This year's issue is forecast to face many difficulties, especially since the group's business results are not good.

Vinacomin's 2012 profit declined 60 per cent from the previous year to VND2.6 trillion ($123.8 million) due to soaring cost. Liabilities as of 31 December, 2012 was VND81.85 trillion ($3.9 billion) compared to its total equity of just VND32.8 trillion ($1.56 billion).

The Ministry of Finance decided to raise the export tax for coal from 10 per cent to 13 per cent on July 7 this year, forcing the group to increase the price of coal.

Vinacomin reported July sales of over 2 million tonnes of coal in both domestic and overseas markets, 60 per cent lower than the monthly average in the first half of this year.

The group has recently asked to decrease the export tax to the old level of 10 per cent due to low global prices.

According to some analysts, Vinacomin's bond issue can attract some investors such as banks. Demand for "safe" bonds, especially issued by State-owned enterprises, have increased since the beginning of this year along with banks' capital abundance.

Total credit growth reached only 4.5 per cent by June's end, far below the yearly target of 12 per cent. At some major banks like Vietcombank, credit growth was even negative.

Cost of living rises again in Ha Noi and HCM City

Consumer price indices in the two largest cities saw strong increase in August due to a surge in health care service prices and petrol products.

According to statistics from offices in Ha Noi and HCM City, August's CPI in Ha Noi rose 3.16 per cent over July and 0.31 per cent in HCM City.

The Ha Noi Statistics Office said the city's CPI saw a year-on-year surge of 8.7 per cent.

The growth rate for August's CPI, at 3.16 per cent, was 2.5 folds higher than the rate for the CPI during the month for Tet festival when the price of goods and services often increase sharply.

The strong surge of August's CPI in Ha Noi was due to an increase in the price of health care services, the office said. The CPI would rise only 0.59 per cent if the price of health care services was not used to calculate the CPI.

In August, the price of health care services gained the highest surge of 63.94 per cent, followed by the transport service price with an increase of 1.23 per cent due to the effects of petrol and oil price surges in July.

The petrol and oil price increase also pushed the price of the housing and building material group up 0.95 per cent against last month.

Also this month, the price of food and catering services had a strong surge of 0.78 per cent against last month, following months of decline since February.

The office said the price for vegetables was high due to shortages attributed to too much rain, while the price of meat increased as a result of high transport fees.

Additionally, farmers halted pig breeding due to difficulties which lead to a shortage of pork and expected increases in pork prices over the coming months. This was one of the factors that could affect the CPI by year's end, the office said.

HCM City's CPI in August rose 0.31 per cent against the previous month, according to the municipal Statistics Office. The index experienced increases of 1.26 per cent and 3.17 per cent compared to those of eight months and one year ago, respectively.

Most commodities saw price hikes during the month, with exceptions falling in the telecom and education sectors. The highest price rise, 1.24 per cent, was recorded in transport due to the impact of price hikes in petrol and oil products in July.

The surge in petrol, gas and oil prices also made the price of housing and building material, electricity and tap water group rise 0.58 per cent.

Prices of food and catering services rose 0.22 per cent and 0.19 per cent respectively.

Slight increases were also seen in the prices of beverage and tobacco (0.28 per cent); culture-entertainment-tourism (0.28 per cent); and garment-headwear-footwear (0.19 per cent).

The groups of household appliances, goods and other services, and medicines and health care services witnessed humbler price rises.

Metal factory green lit in Quang Ngai

The People's Committee of central Quang Ngai Province has given nod to Huong Hai Group Co Ltd to set up a rare metals factory in Ba To District, the Ministry of Industry and Trade newspaper has reported.

The project has a total investment capital of over VND1.4 trillion (US$66 million) and will specialise in mining and processing bronze and other metals to provide for the domestic industry and for exports.

The factory is planned to have an annual capacity of 1,500 tonnes. It will officially become operational in 2014 according to the provincial Department of Planning and Investment.

Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR