Perenco upstages giants

Independent oil and gas company Perenco has snapped up the Vietnam-based assets of ConocoPhillips, beating heavy-duty competitors including PetroVietnam and TNK-BP to the punch.

US-backed ConocoPhillips announced that it had reached a billion-dollar plus agreement to offload its assets in Vietnam to Perenco, an oil and gas company with operations in 16 countries across the globe.

In its statement, ConocoPhillips said the sale of assets in Vietnam was a part of ConocoPhillips’s ongoing strategy to create shareholder value.

The company said that the Vietnam business unit was sold at a total of $1.29 billion plus customary working capital adjustments. However, previously ConocoPhillips expected that those assets would have total valued at up to $1.5 billion.

ConocoPhillips will now sell its three wholly-owned subsidiaries that separately hold a 23.25 per cent participating interest in Block 15-1, a 36 per cent participating interest in Block 15-2, and a 16.3 per cent participating interest in Nam Con Son pipeline, the company said. It expected the transaction to go ahead in the first half of 2012.

“The sale of our Vietnam business unit is an important component of our $15-20 billion 2010-2012 asset divestiture programme. ConocoPhillips has conducted business in Vietnam for more than 15 years, and we are pleased that Perenco has recognised the value of these quality assets,” said Al Hirshberg, senior vice president, planning and Strategy, ConocoPhillips.

Many competitors had eyed on ConocoPhillips assets in Vietnam over the last two years, including PetroVietnam and TNK–BP. PetroVietnam as the host country had priority rights in the sale. But the group’s chairman Phung Dinh Thuc said that he would not “get these assets at any price”.

In 2010-2011, ConocoPhillips’ asset divestiture programme yielded $10.7 billion in proceeds. Along with a $9.5 billion sale of shares in Russian Lukoil, this gave the US firm total dispositions of $20.2 billion over the period.

IT attractive to foreign investors

Foreign information technology firms and investment funds are interested in venturing into Vietnamese IT and software development companies.

This was what shared by many businessmen, investment consultants and managers at the Super Investors Day 2012 held in HCMC on Thursday.

Chu Tien Dung, chairman of Quang Trung Software City Development Co. Ltd., said many foreign IT and software development firms were planning to expand to Vietnam and seeking partnerships with local software enterprises.

Speaking to the media on the sidelines of the event, he said most foreign investors chose to take over Vietnamese firms to enter the local market. Therefore, he predicted, mergers and acquisitions (M&A) would be busier in the local IT industry and investors seemed to prefer small businesses.

Foreign investors seeking to buy into Vietnamese companies are only interested in the local market and available human resources. They are willing to change the names of the companies they acquire and transfer technology to them for quick business resumption, instead of investing in new firms.

Dung noted this trend helped shorten M&A talks. For instance, Japanese investors were formerly very prudent and only began their investment after 2 or 3 years of surveying the local market, but now a survey only takes about six months.

Nguyen Tat Thang, chief economist at HSC Company and an investment consultant, said the IT sector is appealing to foreign investors, especially those from Japan.

Vietnam’s IT industry is still underdeveloped, Thang stressed, notably the development of database and management systems of certain sectors like finance, distribution and healthcare. Therefore, foreign investors want to invest in Vietnam through M&A deals to tap this market.

David Do, managing director of Vietnam Investments Group (VIG), shared the view that there is a big opportunity to invest in Vietnam’s IT market. He said that in developed economies like the U.S. and European nations, IT accounts for some 7% of gross domestic product (GDP), while the figure in Vietnam is less than 2%.

E-commerce is also considered attractive to investment funds, David added, as Internet services are growing strongly in Vietnam. The Super Investors Day 2012 was organized by Doanh Nhan magazine in coordination with Vinabull, Le Bros and InfoTV Channel with the participation of 20 economists and businessmen as speakers on the topic of investment opportunities and outlook for Vietnam in 2012.
 
AirAsia, ACE Vietnam offer insurance to passengers

The low-cost airline AirAsia on Thursday announced its partnership with ACE Insurance Company (ACE Vietnam) to give an insurance cover for customers embarking from Vietnam with a maximum protection of US$100,000.

According to AirAsia, the AirAsia Insure travel insurance plans by ACE Vietnam provide value-added benefits to passengers such as 24-hour worldwide emergency assistance, overseas medical expenses, flight delays and loss of or damage to baggage.

Customers embarking from HCMC, Hanoi and Danang of Vietnam can receive the protection worth up to US$100,000 by paying a premium of US$2.4 one-way.

Vietnam is the 13th country where AirAsia Insure is made available, together with Malaysia, Thailand, Indonesia, Australia and other countries.

Customers can buy AirAsia Insure on www.AirAsia.com.
 
Time to run out for SOE shakeup

The Government can hardly approve the restructuring schemes for 21 state-owned groups by the end of the first quarter as scheduled, said Pham Viet Muon, deputy head of the Government Office.

“Time is running out when the Government has about 40 days to go, from now to the end of the first quarter. In other words, approving a scheme in every two days is unfeasible,” Muon told an international seminar on state sector restructuring organized in Hanoi on Wednesday.

He said that after getting approval from the Government for the general scheme, each state group must apply its own restructuring scheme.

Nguyen Trong Dung, head of the Government Office’s SOEs Reform Board, said the Government would restructure each business sector regardless of management level, be they locally or centrally managed.

Muon reckoned that it takes a couple of years to equitize or restructure a state-owned group since the scheme is kicked off.
 
Ministry urges inspection of fruit exported to Europe

The Ministry of Agriculture has asked the Plant Protection Department to step up inspections of fruit and vegetables bound for Europe following complaints from buyers that many batches shipped there are not safe for consumers.

The Executive Agency for Health and Consumers of the European Commission recently announced that the EU would issue a ban on imports of fruit and vegetables from Vietnam if five more cases violating regulations on food safety and plant quarantine were detected.

A lot of fruit and vegetables exported to the EU have been detected to violate regulations on food safety and plant quarantine due to being infected with microorganism and pest, the ministry said.

“If this situation happens, not only fruit and vegetables of Vietnam will be banned in the EU but also the prestige of Vietnam’s agro-products on the international market will be severely damaged,” said the ministry.

Meanwhile, the Plant Protection Department said it would promote the inspection of fresh fruit and vegetables exported to the EU and issue guidelines to localities and exporters to ensure their products are qualified for export to Europe.

The Plant Protection Department is also required to only allow export of qualified shipments in accordance with the above regulations.

The agriculture ministry has instructed customs agencies to make clearance for only those consignments having the Phytosanitary Certificate granted by plant quarantine agencies.

“The EU’s demand for stopping imports of fruit and vegetables from Vietnam if there are five more violating cases is very difficult to meet,” said Nguyen Van Nga, head of the Zone 2 Plant Quarantine Inspection Department.

Currently, the department only inspects goods via sampling method, meaning that it only selects two or three out of 100 batches, so the probability to miss out unqualified batches is very high.

“To solve the problem thoroughly, it is recommended to apply regulations on safe vegetable production in line with VietGap or GlobalGap,” Nga said.

Nga added that Vietnam currently exports little vegetable to the EU, but exports of fruits like grapefruit, rambutan, mango and starapple are very substantial. Therefore, if the EU imposes the ban, the loss to export fruits of Vietnam is very high.

“We should restrict exports of some items with high risks of not meeting the standard to avoid big loss to the domestic fruit and vegetable industry,” Nga said.

Preliminary data released by General Department of Vietnam Customs show that in the first half of January, Vietnam’s exports of fruit and vegetables totaled US$22.6 million. The Ministry of Agriculture and Rural Development projects exports of fruit and vegetables in 2012 as a whole at about US$650 million, a year-on-year rise of 4.4%.
 
Vietnam Singapore Industrial Park Company to develop fifth park

Vietnam Singapore Industrial Park Company will develop an industrial park and township in the central province of Quang Ngai, making it the fifth industrial park to be developed by the company in Vietnam.

The 1,226 hectare integrated township and industrial park will be built in Tinh Tho and Tinh Phong Communes in Son Tinh District of Quang Ngai Province.

With the first phase of the project ready to be kicked off by the third quarter of this year, the Vietnam Singapore Company is calling on its investors to fund the project.

Vietnam Singapore Industrial Park Company is a world-class industrial park development company that was initiated by the Governments of Vietnam and Singapore.

Its first industrial park was built in Binh Duong Province in 1996, which today has become the leading industrial park in Vietnam. Some 240 investors from 22 countries around the world have chosen to base long-term investment projects here.

The second park was officially launched in 2006.

In 2007, the company announced its expansion plans in the north with two projects, namely, the Bac Ninh Township and Industrial Park Complex over 700 hectares and the Hai Phong Township and Industrial Park Complex over 1,600 hectares.

Agriculture ministry seeks to assist salt sector

Vietnam’s Ministry of Agriculture and Rural Development has said it would carry out five salt production projects this year, and launch a project to buy salt from farmers in a fresh move to support the business.

Nationwide, salt prices at which farmers sell the commodity have recently increased slightly, according to the ministry’s Division of Agricultural, Forestry, Fisheries Products and Salt. However, out-of-season rains in the Mekong Delta since January this year have cut into the region’s salt output.

Salt farmers in northern and central Vietnam, meanwhile, are taking advantage of sunny days to harvest more salt.

Mr. Nguyen Van Khu, deputy chief of the Duyen Hai Co-operative in Hai Hau District, Nam Dinh Province in the north, said local farmers “are happy with the current prices, though not much.”

The selling price of salt is now ranging VND1,200-VND1,800 in the north.

The agriculture ministry’s salt forecast for this year is Vietnam would produce 1.46 billion tons of salt while consumption be 1.38 billion tons. The surplus would be 80,000 tons.

Meanwhile, Mr. Nguyen Ngoc Thu, chief of the salt sub-division of the Division of Agricultural, Forestry, Fisheries Products and Salt, said he was concerned a little because of the fact that last year’s salt output was equal to 80 per cent of the target.

Some agriculture ministry studies showed that many of the salt farmers in Nam Dinh, Thanh Hoa, Nghe An and Ha Tinh provinces in the north and central region have shifted to other businesses for more profits.

Another difficulty faced by Vietnam’s salt sector currently is a lack of expertise and labor.

A solution is that the ministry is to assign some colleges managed by the ministry to build up training programs for the sector, with focus on green technology. The ministry would carry out five salt production projects in the provinces of Thai Binh, Thanh Hoa, Nghe An, Ha Tinh and Ba Ria-Vung Tau, as well initiate a project to buy salt from farmers.

Some pilot projects to make clean salt have recently turned out initial successes, according to Mr. An Van Khanh, deputy chief of the Division of Agricultural, Forestry, Fisheries Products and Salt. Some shipments of clean salt have been exported to Japan. He is of the view that investment into green technology would stop Vietnam’s import of clean salt and help the country export more.
 
Japanese sweet potato favoured over rice in Mekong Delta  
 
Many farmers in the Mekong delta region are leasing their fields for Japanese sweet potato cultivation at around VND40-60 million per hectare (US$1,920-2,880), even though this is the best time for winter-spring rice planting.

According to Le Trung Toan, deputy director of the People’s Committee of Ngai Tu Commune in Tam Binh District in Vinh Long Province, the area for sweet potato planting has gone up substantially, 1 hectare to 30 hectares in just one year.

Moreover, this increase has been initiated without official endorsement of the Ngai Tu Commune People’s Committee.

Nonetheless, many farmers showed preference for this method of leasing land than to go into rice cultivation. Nguyen Ngoc Loi, a farmer from Binh Ninh Hamlet in Ngai Tu Commune, said on her 3,500 sq metre plot of land her family could sow rice thrice a year, reaping 6 tonnes per hectare per season.

However, by leasing the land at VND4 million per 1,000 sq metres she immediately received VND14 million (US$672.5), without a drop of sweat!

Another example is that of Nguyen Van Phuc who has a 2,500 sq metre plot of land. Since both his neighbours, Nguyen Van Minh with two hectares and Pham Hoang Son with 3,500 sq metres have already leased their land for sweet potato planting, he can only do the same, saying that it was very difficult to keep growing rice in the middle like that.

Le Van Phai, another farmer from Binh Ninh Hamlet, sorrowfully shared that he had to switch to another job because the field he had leased for years to grow rice, was sandwiched between sweet potato fields, making it impossible to earn a healthy profit.

As Toan said, it was the policy of the district to encourage farmers to intercrop other types with rice once a year but not for all three seasons like this, as this will destroy the district’s agricultural plan. The careless use of unidentified plant protection chemicals is also worrying local authorities.
Chinese traders

This sudden switch to growing sweet potato this year has already spread to Kien Giang, Dong Thap and Can Tho Provinces.

“Farmers themselves can decide how to use their land to bring in high profits. However, agricultural officers often warn them against following this newest trend to grow sweet potato, to avoid destroying the local planning process.”

Vo Van Theo, Director of the Bureau of Agriculture and Rural Development in Binh Tan District in Vinh Long Province.

Not satisfied with five hectares of sweet potato cultivation, Ngo Van Phuc from Thanh Loi Commune in Binh Tan District in Vinh Long Province came over to Thoi Hung Commune in Co Do District in Can Tho City to lease three more hectares, saying that the land was ideal for this kind of crop, not only for high yield but also safe during the flood season.

Following Phuc, others like Tam Liem from Thanh Trung Commune and Nguyen Van Thanh from Tan Thanh Commune in Binh Tan District also leased their plots of land in Thoi Hung Commune for the same purpose.

As a result, most fields in Co Do District at the moment are under Japanese purple sweet potato cultivation, to sell to Chinese traders in Binh Minh District.

According to Nguyen Van Quet, director of the People’s Committee of Thoi Hung Commune, in the past two years the area has attracted many investors from other parts, which is not a welcome scenario. This could decrease the production of rice a great deal as well as seriously mess up the local planting season.

Ngo Thanh Son, chairman of the Bureau of Agriculture of Rural Development in Co Do District, reported that more than 600 hectares of rice growing area has been transformed into sweet potato fields, most of which were leased to farmers from Dong Thap and Vinh Long Provinces.

At the moment, there is no specific data on this matter in the Mekong Delta provinces. Nonetheless, basic results show that most people coming to lease land and hire on-the-site farmers are brokers of Chinese traders, who are able to invest a large amount of money (about VND200-300 million per hectare), taking over tens of hectares.
 
Customs tariff case ruled in favor of business

The Supreme People’s Court in HCMC has announced a local enterprise won a two-year case against the customs over a controversial tariff levy on camera tripods.

Phuoc Camera Joint Stock Company filed the case against the Tan Cang unit of the HCMC Department of Customs over a 15% tax slapped on Phuoc Camera’s imported tripods.

According to the court decision, the Tan Cang customs is ordered to return the earlier-collected VND140 million to Phuoc Camera.

The Tan Cang customs on September 2 and November 2, 2010 issued two separate decisions imposing a 15% tax on the tripods imported by Phuoc Camera as they put the product into the group of uncategorized aluminum goods coded 7616.

Meanwhile, Phuoc Camera cited Document 7501 of the General Customs Office as saying the tripods could enjoy a tax exemption, so it listed the tripods in the group of tax-free items.

Later, the Tan Cang customs said the preferential tax rates applicable to the goods group 9007 covered cinematographic cameras, not digital cameras.

At the first-instance hearing, the judge stated the Tan Cang customs had made the right decisions. This forced Phuoc Camera to lodge an appeal to the Supreme People’s Court HCMC.
 
Salt production to soar 20%
 
The country's salt production is expected to reach about 1 million tonnes this year, up 20 per cent against last year, according to the Ministry of Agriculture and Rural Development.

The ministry estimates that total salt supply this year is 1.52 million tonnes, including 170,000 tonnes in stock from last year, 150,000 tonnes produced in 2011 but harvested in 2012, and 200,000 tonnes of imported high-quality salt for use in chemical production and the health care sector.

This year the country's total salt demand will be 1.45 million tonnes.

The price of salt nationwide has increased slightly because unfavourable weather conditions lowered salt output last month, said the ministry's Department of Processing and Trade for Agro-Forestry-Fisheries Products and Salt Production.

The Cuu Long (Mekong) Delta, for instance, had unusual rains last month and farmers could not produce large quantity of salt.

The price of salt has increased to VND1,100-1,700 (US$0.05-$0.08) a kilo in the Cuu Long Delta and VND1,200-1,800($0.06-$0.09) a kilo in the north.

Nguyen Van Khu, deputy chairman of the Duyen Hai Co-operative in Hai Hau District's Hai Hoa Commune in northern Nam Dinh Province, said farmers were eager to resume production despite the slight price increase.

However, Nguyen Ngoc Thu, head of the Department's Salt Production Division, said last year's salt output reached only 80 per cent of the planned target because of unfavourable weather conditions.

In addition, a survey of the ministry has shown that salt farmers in many localities, including Nam Dinh, Thanh Hoa, Nghe An and Ha Tinh provinces have switched to other jobs.

Salt production faces difficulties because of the lack of proper zoning plans and investment in research techniques to improve salt production and quality, according to experts.

Although salt farming is a traditional occupation, the country does not have a school for training salt engineers.

To solve the problems of salt production, the ministry will this year assign its colleges to set up programmes and curricula for training in salt production techniques.

The ministry will focus on promoting techniques for producing clean salt, including the technique of using plastic canvases on salt fields to produce clean salt.

This year the ministry will implement five models of producing clean salt in Thai Binh, Thanh Hoa, Nghe An, Ha Tinh and Ba Ria – Vung Tau provinces.

Some models for clean production have produced high-quality salt, according to An Van Khanh, the department's deputy head.

Some batches of the high-quality salt was recently exported to Japan.

If investment is proper, the salt industry can meet the domestic demand of high-quality salt for chemical production and even export high-quality salt.

Vietnam’s agro exports face difficulties  

According to the Ministry of Agriculture and Rural Development, exports of agro-aqua and forestry products in Vietnam reached US$1.8 billion in January 2012, a decline of 16.3 per cent against the same period last year.   

Vietnam’s agro exports faced many difficulties in the first months of the year. Exports of cashew nuts fell by 50 per cent, vegetables and pineapple by 30 per cent and cucumber by 15 per cent.

The Vietnam Association of Seafood Exporters and Producers said that consumption of products is slow and payments are stuck in the European market due to the eurozone debt crisis.

According to the Vietnam Forest Corporation, the year 2012 will be a difficult year, with many challenges for enterprises in the sector.

Although the sector has many existing orders, enterprises have only signed small contracts for fear of coping with expenses on overheads; as a result, exports to main markets such as Japan, the US and EU slumped by 8 per cent, 9 per cent and 14 per cent respectively, lower than in the same period last year.

Rice exports in January 2012 have also fallen by 42 per cent compared to the same period last year.

The Department of National Agro-Forestry-Fisheries Quality Assurance said many delegations from countries including the US, EU, Russia, South Korea, Japan and China will arrive in Vietnam to inspect safe production, chemical residue and pesticide content as well as the origin of all products.

Recently, the EU had complained that several consignments contained micro-organisms and dangerous pathogens.

The Ministry of Agriculture and Rural Development on February 14 sent an urgent dispatch to provincial people’s committees and the Vietnam Fruit and Vegetables Association, ordering a more thorough inspection of vegetables and fruits being exported to the EU market.

The European Commission's Directorate General for Health & Consumers has warned that a ban on Vietnamese fruits and vegetables would take effect if the five food safety and plant quarantine regulations were detected.

Vietnamese Beekeepers Association said the sector is facing difficulties after the US food watchdog ordered return of 600 tonnes of honey, as it contained Carbenzamin residues.

Soon after Vietnam becomes the second Asian country to export honey to the global market, beekeepers have mushroomed but are still not paying heed to quality.

Dishonest traders have tried to mix Chinese honey with Vietnamese, affecting the quality. The sector must therefore deal with such problems or else it will loose its main market.
 
Jeju Air to launch Seoul-HCMC daily service in April  

Jeju Air of South Korea said it would open on April 5 a new route linking Seoul and Ho Chi Minh City, flying everyday at night.

The new daily flights to Ho Chi Minh City will depart Incheon International Airport at 8:05 p.m. and arrive at Tan Son Nhat Airport at 11:20 p.m., local time, according to the carrier’s flight schedules seen on its website www.jejuair.net.

The return flight will leave Ho Chi Minh City at 0:20 a.m. and arrive at Incheon Airport at 7:25 a.m.

The promotion roundtrip airfare starts at 340,000 won, not including fuel surcharges and airport taxes.

Jeju Air currently does not offer one-way tickets.
 
VN to better control fruit, vegetable exports

The Ministry of Agriculture has asked the Plant Protection Department to step up inspections of fruits and vegetables exported to Europe following complaints from buyers.

The Executive Agency for Health and Consumers of the European Commission recently announced that the EU would issue a ban on imports of fruits and vegetables from Vietnam if 5 more cases violating regulations on food safety and plant quarantine were detected.

A lot of fruits and vegetables exported to the EU have been found to be infected with microorganism and pest, the ministry said.

“If this situation happens, not only Vietnam’s fruits and vegetables will be banned in the EU but the prestige of Vietnam’s agro-products on the international market will also be severely damaged,” the ministry said.

Meanwhile, the Plant Protection Department said it would promote the inspection of fresh fruits and vegetables exported to the EU and issue guidelines to localities and exporters to ensure their products are qualified for export to Europe.

The Plant Protection Department is also required to only allow exports of qualified shipments in accordance with the above regulations.

The agriculture ministry has instructed customs agencies to make clearance for only those consignments having the Phytosanitary Certificate granted by plant quarantine agencies.

“The EU’s demand for stopping imports of fruits and vegetables from Vietnam if there are 5 more violating cases is very difficult to meet,” said Nguyen Van Nga, head of the Zone 2 Plant Quarantine Inspection Department.

Currently, the department only inspects goods by the sampling method, meaning that it only inspects 2 or 3 out of 100 batches, so the probability to miss out unqualified batches is very high.

“To solve the problem thoroughly, it is recommended to apply regulations on safe vegetable production in line with VietGap or GlobalGap,” Nga said.

Nga added that Vietnam currently exported few vegetables to the EU, but exports of fruits like grapefruit, rambutan, mangoes and star-apples are very substantial. Therefore, if the EU imposes the ban, the loss to Vietnam is very high.

“We should restrict exports of some items with high risks of not meeting the standard to avoid big losses to the domestic fruit and vegetable industry,” Nga said.

Preliminary data released by the General Department of Vietnam Customs show that in the first half of January, Vietnam’s exports of fruits and vegetables totaled US$22.6 million.

The Ministry of Agriculture and Rural Development projects exports of fruits and vegetables in 2012 to reach $650 million, a year-on-year rise of 4.4 percent.

Finance ministry tames soaring milk prices

The Ministry of Finance sent an urgent directive yesterday, ordering the finance departments in localities around the country to stabilize milk prices, which have recently skyrocketed.

Nguyen Anh Tuan, deputy head of the ministry’s Price Management Agency, said the finance departments were asked to conduct checkups on the price registering and listing of power formula for children under 6.

It is also stipulated that milk companies not increase prices in cases where input expenses remain unchanged, added Tuan.

Tuan said that milk products are listed as commodities whose prices should be stabilized as required by the government.

If the milk producers want to hike prices, they have to report to the local department of finance on why, and by how much, prices should be increased, said Tuan.

“Meanwhile, if the producers are found hiking prices by a greater amount than the fluctuation of input costs, they will be fined.”

The Price Management Agency has also requested that milk manufacturers not propose hiking the prices of the powdered milk for children under 6 years old in cases where input costs remain unchanged.

The agency also turned down the price hike proposal from the Nestlé Vietnam Co Ltd.

Of the three products whose prices asked to be increased, the agency only accepted one, said Tuan.

The NAN HA NWHB019-4 12x400gram product prices will increase by 12 percent as of March 1, as import prices for the product have risen by 25 percent, he said.

For the remainder, since import prices remain unchanged, the Ministry of Finance requires that selling prices be stabilized.

“It is unacceptable for manufacturers to hike prices of the well-consumed products to increase profits,” stated Tuan.

The last five months repeatedly saw both domestic and foreign milk manufacturers hiking their selling prices by up to 19 percent.

Initiating the upward trend for milk prices was Friesland Campina Vietnam Co, which raised its product prices by 4 – 15 percent in September 2011, with rising input cost blamed as the main cause. Dumex and Nestlé followed suit, setting prices 13 percent higher.

In December 2011, Abbott and Mead Johnson, two milk manufacturers holding a large market share, announced price hikes of 7 percent, and 19 percent respectively for their products.

In January, Vinamilk took its turn to raise prices by up to 7 percent, followed by Anlene, which hiked prices by 10 percent earlier this month.

Milk dealers said milk prices used to be adjusted in the first or third quarter annually.

But currently, prices have shot up unpredictably, and manufacturers have made use of all excuses to increase prices, they said.