Vietnam PM pulls plug on $94mn pulp mill

Vietnamese Prime Minister Nguyen Tan Dung has ordered a stop to a multi-million-dollar pulp making plant in the southern province of Long An over its troubled operations, fueled by material disputes with local jute growers, the provincial People’s Committee announced Tuesday.

Phuong Nam pulp mill was constructed by Tracodi, a subsidiary of the Transport Ministry-run CIENCO 6, under a VND2 trillion (US$94.34 million) investment funded by the state budget.

The facility broke ground in March 2006 in Long An, around 60km west of Ho Chi Minh City, and was put into operation a year later at a capacity of producing 100,000 tons of paper pulp from jute plants per year.

But the mill had been producing well below its full capacity until 2009, when its operations were suspended for many reasons, including the conflicts with jute growers and machinery breakdowns.

The plant went back into service in 2012, with a new production line installed. Long An authorities also zoned 10,000 hectare land plots to grow jute plants to supply raw materials to the pulp mill.

But the new machinery repeatedly malfunctioned while the plant could only manage to source 1,000 hectares of jute plants for its production.

In 2013, when jute growers had already started their new crops, the plant operator abruptly announced that it would stop sourcing materials from them.

The Prime Minister has thus decided to pull the plug on the crippled factory, seven years after the troubles began.

The People’s Committee of Long An will have to cooperate with the Ministry of Industry and Trade and Ministry of Finance to work out a solution to sell or liquidate the facility and submit a report to the premier by the end of next month, Nguyen Thanh Nguyen, deputy chairman of the committee, said.

“In principle, we will try to find a suitable buyer for the plant to prevent waste,” Thanh said, adding the plant still plays a role of boosting agricultural economy in the province.

It was hoped that the pulp mill would give a boost to the agricultural development in Long An, where most of the agricultural land is more suitable to grow jute plants than paddy.

In 2007 the province’s agriculture department launched a program encouraging growers to replace their paddy fields with jute plants to serve the Phuong Nam factory.

The area of jute plants thus jumped from 3,100 hectares to more than 10,000 hectares.

But the plant and jute growers got into a dispute in their very first transaction as farmers complained that their products were purchased at dirt cheap prices.

Despite intervention from authorities, the conflict remained unresolved as the pulp mill refused to increase purchase price.

“While the plant was expected to bring in economic benefits for the province, it turned out to be a wasteful investment while the farmer’s confidence was rocked,” said an official from the agriculture department.

Vietnam woos foreign agricultural investors

Vietnamese authorities are seeking for solutions in order to attract more foreign investment in agriculture which currently accounts for only around 1% of the country’s total FDI.

According to the latest statistics from the Ministry of Planning and Investment’s Foreign Investment Agency, country has so far attracted around 16,000 FDI projects, with a combined registered capital of USD237 billion. However, only 503 of them were in the agricultural sector, accounting for USD3.36 billion, or 1.41% of total FDI. In previous years this figure has been closer to 5%.

“Even though Vietnam is a major exporter of farm products, FDI in agriculture remains modest and is not on par with the sector’s potential and advantages,” said Tran Van Cong, Deputy Director of the Ministry of Agriculture and Rural Development (MARD)’s International Cooperation Department.

This decrease may be attributed to a number of reasons: high risks versus low profits, lack of incentive policies, inconsistent agricultural development policies. Experts cite all these reasons and more.

“I think that we are to blame for this situation, not our foreign partners. Infrastructure in the sector remains substandard, and there is a lack of skilled labour. There is also little cooperation between agencies, including MARD, the Ministry of Natural Resources and Environment, and the Ministry of Industry and Trade,” said economist Dr. Le Dang Doanh.

One thing experts agree on is that the solution to increasing agricultural FDI must include MARD identifying those areas of the agricultural industry that hold the most potential to attract investment, and streamlined coordination between agencies and local governments.

Whatever policy shifts are ahead, World Bank economist, Chris Jackson, gave a hint of what actual investors are looking for when he said, “Attracting foreign investment is something like a marriage. It's not a partnership in which one side can abandon the other the moment problems arise. Investment partnerships are the same. It won't do to simply license investors and leave them with all the difficulties of implementation. It's necessary to work with the investor to help them deal with their problems and see their investments thrive."

Consultant proposes plans for new Binh Loi railway bridge

Transport Investment and Construction Consultant Joint Stock Company has proposed five plans to upgrade the currently Binh Loi railway bridge spanning the Saigon River to ensure smooth traffic and safety.

The company explained that the five plans had been forwarded to relevant agencies to select the best one. Accordingly, plan 1A is to upgrade and convert the existing Binh Loi Bridge into a swing bridge while the bridge is to be upgraded and lifted up partly or wholly as envisaged in plans 1B and 1C.

The remaining two plans are to construct a new bridge but the location of Binh Trieu Railway Station will remain unchanged or be moved.

Deputy Minister of Transport Nguyen Ngoc Dong told a meeting last week that the Binh Loi railway bridge project was important to reorganizing waterway and railway traffic in HCMC and neighboring Binh Duong Province.

Dong called for relevant agencies to choose an appropriate plan given financial constraints at the moment and gather comments from localities on site clearance for the project.

The 110-year Binh Loi Bridge has deteriorated. As its vertical clearance is only 1.8 meters, boats often get stuck under the bridge when there are high tides, threatening the safety of train traffic on the bridge.

Firms seek Gov’t aid to reduce reliance on China materials

Businesspeople have suggested the Government provide support for local enterprises to operate efficiently at a time when economic growth is low, thus reducing their heavy dependence on material imports from China.

The suggestion was raised at a seminar on businesspeople’s perspectives about the East Sea situation after China stationed a giant drilling rig in Vietnamese waters earlier this month. The event was held by the 2030 Businessmen Club under the Saigon Times Club on Monday.

Hang Vay Chi, chairman of Viet Huong Industrial Park in Binh Duong Province and owner of a jeans denim firm, told the seminar that local textile and garment enterprises had to import 70% of their materials from the neighboring market.

“This means local textile and garment enterprises contribute the majority of their revenues to Chinese exporters. A lack of loan incentives and underdeveloped infrastructure are huddles to the increase of material supply for the apparel sector,” Chi said. “This has piled much pressure on local firms.”

Chi noted material supply for the garment and textile sector was not too difficult to find compared to components in the hi-tech industry. Local apparel producers will be able to benefit from more material sources when Vietnam joins the Trans-Pacific Strategic Economic Partnership Agreement (TPP), which is now being negotiated.

Most of the participants at the seminar agreed that many domestic firms still relied on China as a main source of cheap material. As they are unable to compete with their foreign-invested counterparts so they must turn out substandard items for domestic sale.

Nguyen Thi Viet Hoa, director of Asia Dragon Cord and Twine Co. Ltd, said enterprises now had to cope with a host of challenges as they should make quality products but keep prices unchanged.

“We have not increased our product prices for 15 months despite input cost fluctuations,” Hoa said.

Other speakers of the seminar stressed that local businesses should be provided with more favorable conditions so that they would be able to grow and contribute more to development of the nation.

Vietnam-Denmark fashion links fostered

The Danish Fashion Institute, in collaboration with the Vietnam Textile and Apparel Association (VITAS) and Better Work Vietnam, has initiated a project to build fashion brand links and partnership between Vietnam and other nations with those of Denmark.

VITAS said that the Fashion Link project, which is sponsored by the Danish Ministry of Foreign Affairs, would help build a bridge between textile and garment producers of Vietnam, Bangladesh and Pakistan and their counterparts in the European country.

The long-term goal of the project is to develop a database of capable and responsible textile and garment companies for customers to consider and find their right suppliers.

Toyota Vietnam launches new Innova, Fortuner models

Toyota Motor Vietnam (TMV) has introduced new Innova and Fortuner models, including the sporty version of Fortuner TRD Sportivo 2014.

The new Innova 2014 is powered by 1TR-FE 2.0L engine of fuel efficiency and low emissions.  This model comes with three colors: silver metallic 1D4, medium silver metallic 1F8 and beige metallic 4R0.

Developed on V version, the Fortuner TRD Sportivo 2014 is available in white color and is equipped with 2.7L DOHC16-valves VVT-i using gasoline engine with four-speed automatic transmission.

The most noticeable exterior detail of Toyota Fortuner TRD Sportivo is the sport body kit designed by TRD (Toyota Racing Development), which is Toyota’s in-house tuning shop responsible for supporting Toyota racing activities.

The car is fitted with a rear seat entertainment system consisted of a roof DVD player with an 8-inch LCD display, a remote control, a set of cordless stereo headphones, and A/V connection ports.

The new Innova models are retailed from VND683 million to VND817 million per unit (included VAT) while the prices of Fortuner TRD Sportivo 2014 are from VND1.1 billion to VND1.15 billion per unit.

Samsung to export more Vietnamese-assembled phones

Around 35% of electronics giant Samsung’s cellphones currently on global markets are assembled at its factories in northern Vietnam and the proportion is expected to rise to 50% in the years to come.

The figures were updated by Nguyen Van Dao, deputy general director of Samsung Vina, last week when reporters made a field trip to a Samsung factory in the northern province of Bac Ninh. He said millions of Samsung cellphones and tablets made in Vietnam were sold in 50 foreign markets, including Europe and North America.

Dao said a mere 3% of the products assembled at Samsung factories in Vietnam were for domestic sale and the percentage was predicted to fall further as the firm was increasingly focusing on export markets.

Apart from its facility in Bac Ninh Province, the South Korean company commissioned the Samsung Electronics Vietnam Thai Nguyen (SEVT) complex in the northern province of Thai Nguyen in March and hired 13,000 employees for the initial stage.

Dao said that more people would be employed and more capital would be poured into the US$2-billion complex to raise output and the proportion of Samsung cellphones locally made for global sale to 50%.

Around 40,000-45,000 staff are planned for the SEVT, whose capacity is similar to that of the Bac Ninh complex that posted outbound sales of some US$23.9 billion, over 18% of Vietnam’s export earnings last year.

Samsung has 30% of the components of its latest smartphone supplied in Vietnam and the locally-made parts include LCD module, camera, circuit board and cover.

The ratio of local content in Samsung products in Vietnam will continue to rise as more firms have set up shop in Vietnam to supply components for Samsung. Currently, the Samsung Bac Ninh factory has 60 suppliers, including 45 South Korean and five Vietnamese firms.

A report by the General Statistics Office showed that export revenues of phones and components was around US$2.2 billion last month and nearly US$7.7 billion in the first four month of this year, with the lion’s share contributed by the Samsung Bac Ninh facility.

Export revenue of phones and parts in the January-April period rose over 29% year-on-year and is poised to edge up further when the SEVT complex runs at full steam and the major electronics project of LG comes online in the northern city of Haiphong.

HCM City launches drug price stabilization program

The HCMC Department of Health last week launched a price stabilization program for pharmaceutical products this year in cooperation with 12 pharmaceutical producers and traders.

Participating firms of the program are offered loans with preferential interest rates to produce and trade drugs but they are obliged to offer prices that are 5-10% lower than market levels.

This year, the program covers 21 groups of locally-produced drugs for normal and chronic diseases, including analgesic, anti-allergy, diarrhea, stomachache, cough, diabetes, cardiovascular, antibiotics, worm infection and rheumatism, as well as vitamin and mineral supplements, among others.

The program will last until early next year.

The city now has less than 2,800 drugstores subject to the program. HCMC plans to increase the number to 3,000 of the 4,000 stores that meet Good Pharmacy Practice (GPP) standards in the city.

Dutch Lady milk safe

FrieslandCampina Vietnam said its Dutch Lady-brand milk suspected of having caused the hospitalization of over 10 students at a primary school in Nam Dinh Province last month have been found safe for users.

FrieslandCampina Vietnam announced the news last week after the food safety department in the northern province of Nam Dinh released its test results.

The firm confirmed its Dutch Lady Sua Chon milk meets the requirements of the Food Administration and is safe for users.

Local media reported earlier that over 10 students of My Tan Primary School in Nam Dinh Province were hospitalized after drinking the milk in April. Right after that, the provincial food safety department collected samples for testing.

Businesses encouraged making full use of FTAs

Businesses should carefully consider incentives of free trade agreements (FTA) in order to make full use of them in production and trading.

The proposal made by Le Trieu Dung, an official from the Ministry of Industry and Trade (MoIT), at a seminar on the rules of origin of products held in Ho Chi Minh City on May 22.

He said when exporting products to other market it is critically important to identify the origin of products in line with market requirements. To enjoy preferential tariffs, he said, businesses must realise country of origin (C/O) requirements by applying for such certificates with authorised agencies.

Currently, Vietnam has 18 import-export management offices in different regions and management boards of industrial processing zones. Businesses can send their applications directly or via email to these agencies for the certificate.

Kurihara Yoshitaka, a Japan External Trade Organisation (JETRO) expert, also suggested businesses should study FTA regulations because they directly affect business operation, related to the opening of market for exports, the business environment, and supply chains.

The seminar provided businesses with the latest information about C/O in FTAs, particularly between Vietnam and Japan.   

Vietnamese Pangasius promoted in South Africa

The Vietnamese Embassy in South Africa in collaboration with the South African Chamber of Commerce held a trade promotion programme to popularise Vietnamese Tra fish (Pangasius) in Johannesburg on May 22.

Addressing the gathering, Ambassador Le Huy Hoang emphasized the tremendous potential for expanded multifaceted cooperation between the two countries, especially in economics and trade.

In recent years, bilateral trade has grown considerably, with the 2013 value increasing  20-fold to US$1.2 billion, compared to just US$54 million in 2002, he added.

The ambassador expressed his hope that the event will help Vietnamese Pangasius make inroads into the South African market, contributing to the development of trade, and cooperation between the two countries.

He said the programme is part of economic-diplomacy activities to promote Vietnamese products in South Africa as well as other African countries, noting similar events will be held in other populous South African cities such as Cape Town and Durban in the coming time.

According to Nguyen Hong Tien, Trade Counsellor to South Africa, Vietnamese Pangasius has significant potential for penetrating the market. Currently, a number of South African enterprises are keen on the product thanks to their high quality and attractive price.

For her part, President of the Johannesburg Chamber of Commerce and Industry made a commitment to further strengthen cooperation with relevant Vietnamese relevant agencies in order to create favourable conditions for South Africa to use more Vietnamese Pangasius products in the future.

Support industry development crucial to Vietnam

Vietnam will attract more foreign investments if its support industry develops at full capacity, a forum heard in HCM City on May 22.

At the forum, Thailand’s leading exhibition organizer Reed Tradex and the Japan External Trade Organisation (JETRO) provided nearly 200 companies with their vision and real-world experiences in profitably operating a small business in the industry.

Bui Quang Hai, Vice Chairman of the Ho Chi Minh City Mechanics Association, said most Vietnamese manufacturers have yet to meet investors’ requirements as the support industry in Vietnam is in its infancy.

The support industry plays a very important role in attracting investors who only target markets meeting their demands, he said.

Duangdej Yuaikwamdee, Vice Managing Director of Reed Tradex shared Hai’s view adding that Vietnam’s support industry has huge potential for development.

Experiences shared at the forum will help each Vietnamese participating company to understanding better the important roles of cooperation and building alliances to develop the support industry strongly in the future, said the Thai executive.

The 10th forum is a premise of a support industry exhibition, Metalex Vietnam and Nepcon Vietnam, which will be held on October 9-11.

Pepper exports red-hot this year

Vietnam's pepper exports could fetch a record US$1 billion this year, with around 150,000 tonnes of the spice exported, according to the Vietnam Pepper Association.

Addressing a meeting held in HCM City on May 22, chairman Do Ha Nam said in the first four months of the year pepper exports hit US$519.2 million, 46.3% higher year-on-year.

Pepper exports saw strong growth since 2011, rising from US$693 million then to US$898 million last year, he said.

The International Pepper Community has forecast global supply to fall by 45,000 tonnes this year to 320,000 tonnes and demand to remain high, keeping prices high, he said.

With a 50% global market share, Vietnam has been able to dominate the market, he said.

With importing markets like the EU demanding higher food safety requirements, the association as well as delegates at the meeting called on farmers to focus more on applying good agricultural practices (GAP) to ensure quality and help develop the industry in a sustainable manner.

“Farmers are aware of the importance of GAP adoption in pepper cultivation, but its use is still modest. The practice should be expanded further,” Nam said.

The association hopes to persuade buyers to pay higher prices for GAP-certified pepper to encourage more farmers to apply the standards, he said.

Hoang Phuoc Binh, deputy chairman of the Chu Se Coffee Association, said to sustain growth the industry needs to focus more on building brand names for Vietnamese pepper.

Duong Phuong Thao, deputy director of the Ministry of Industry and Trade's Import-Export Department, said relevant agencies should review plans for pepper cultivation because unregulated expansion will increase supply too much, causing prices to fall.

She also called on firms to invest more in technologies to diversify products and improve quality to add value.

The association urged the Ministry of Agriculture and Rural Development to support the industry in applying VietGap standards to pepper cultivation, training human resources, and brand building.

Vietnamese pepper products are exported to 90 countries and territories, the association said, with the EU and Asian countries being the largest buyers.

The country has around 62,000ha under pepper now, and the output is estimated to reach 125,000-130,000 tonnes, marginally up from last year. It plans to import around 20,000 tonnes to process and export.

Government moves to top up foreign reserves

Vietnam's government has added sources formulating the State foreign reserves, which is viewed as a good move to enrich the reserves and strengthen the resilience of the economy.

In the newly issued Decree No 50/2014/ND-CP on May 20 by the government, additional sources are reserves that are bought by interests derived from the existing reserves investment, and those bought by interests of foreign deposits of the State Treasury and credit institutions. The new regulation takes effect on July15, 2014.

The other sources that formulate the state reserves remain unchanged.

In the Decree No 86/1999/ND-CP datedAugust 30, 1999, the State foreign exchange reserves are formulated from the following sources: the existing foreign exchange under the state ownership and the management by the State Bank, foreign exchange bought from the state budget and from the domestic foreign currency and gold markets, foreign exchange from loans of foreign banks and international financial organisations, and foreign exchange from other sources.

The State Bank of Vietnam reported to have received US$10 billion in the first four months of 2014, raising the total foreign reserves to US$35 billion.

The central bank's Governor Nguyen Van Binh also announced in the government's April meeting that if taking into account the potential, the reserves probably amounted to US$45 billion. Larger reserves are believed to help stabilise foreign exchange rates.

In the new decree, the State foreign exchange reserves for the first time include special drawing rights at the International Monetary Fund. Other components are almost similar but more specific. The reserves include foreign currencies in cash, foreign currency on overseas deposit accounts; securities and other valuable papers in foreign currencies issued by the government, foreign institutions, gold managed by the State Bank of Vietnam, and other sources of reserves of the state.

Currently, the state foreign exchange reserves contain foreign currencies in cash, foreign currency credit balance on overseas deposit accounts, bills and acknowledgments of foreign debts in foreign currencies, debt securities issued or guaranteed by the government. It also contains foreign banks, international monetary organisations or banks, and international standard gold and other kinds of foreign exchanges.

Under the new decree, every six months or as and when required, the State Bank's governor will review and decide structure, standards and cap for the State foreign reserves investment and then report to the Prime Minister.

TV forum discusses Vietnam growth

A Vietnam Business Insights forum was held by Singaporean broadcaster Chanel NewsAsia in Ho Chi Minh City on May 22 to redefine sustainable business growth for the country.

Nearly 400 executives of domestic and foreign enterprises discussed economic growth models in Vietnam, focusing particularly on the restructuring of State-run enterprises.

They also discussed challenges to the business circle amid the fluctuating global economy.

At the forum, Deputy Minister of Planning and Development Dang Huy Dong said that Vietnam is accelerating economic restructuring and switching to a sustainable growth model.

To that end, it prioritises making three strategic breakthroughs, namely completing the market economic mechanism and creating an equal and competitive environment; developing a high quality workforce; and building comprehensive infrastructure, he said.

The Vietnamese Government has been adopting various solutions to improve its business environment and competitiveness, for example by amending laws on enterprises, corporate income tax and investment.

Dong noted that in the coming time, the country will continue stabilising the macro-economy, curbing inflation and removing hindrances for the business circle.

It will also speed up administrative reform, corruption and wastefulness prevention, along with ensuring national defence, political security and social order, he added.

HCMC to host support industry expo

An exhibition on support industries will be held in Ho Chi Minh City on October 9-11, expecting to attract swathes of domestic and foreign enterprises.

The information was released following the signing of a cooperation agreement in HCM City on May 22 between the city’s Investment and Trade Promotion Centre and the Japan External Trade Organisation (JETRO).

The expo will provide the chance for domestic and foreign producers to exchange experience, seek business partners and approach the latest technology and innovations in the fields of electricity, electronics, mechanics, and plastics.

According to JETRO statistics, Vietnam attracted 500 Japanese-invested projects in 2013 accounting for 26% of the country’s total foreign direct investment. However, a lack of support industries affects Japanese operations in the country.

Hirotaka Yasuzumi, JETRO HCM City Managing Director, said the office has coordinated with private Vietnamese businesses and government agencies to implement plans on support industry development.

JETRO aims to meet the demand of potential entrepreneurs through business networking events, seminars, and human resource training programmes for support industries.

Mekong Delta urged to reform plans to attract more investors

The Cuu Long (Mekong) Delta must develop new strategies and clear goals to attract more investors to the region, a Japanese executive said at a conference held yesterday in HCM City.

Yasuzumi Hirotaka, CEO of Japan External Trade Organisation, said that he had taken part in many conferences about the issue, but nothing changed in reality.

Although the Delta has abundant marine products, cheap labour and land-use costs, its marine industry was not advanced technologically, and its market and customer base are poorly developed.

In addition, the low quality of infrastructure and services at industrial parks, the lack of local parts and materials, and poor transportation remained challenges in the area.

However, he noted that opportunities still existed, particularly in the processing industry for rice, fruits, shrimp and other products of the region.

Also speaking at the conference, Nakajima Satoshi, consul general of Japan in HCM City, said Can Tho and other provinces in the region should promote their specific geographical advantages to foreign investors.

With a population of 17 million, the region has an abundant labour force, but due to limited jobs available, many people go to HCM City or other provinces like Binh Duong and Dong Nai to look for work.

"Therefore, creating jobs for local people in the region is of great importance," he told the media.

Nakajima said Japan would continue to cooperate with Viet Nam and the Mekong Delta by introducing the region to Japanese businesses and citizens.

As for FDI investment, Herb Cochran, CEO of AmCham in HCM City, said companies that want to attract investors should consider not only their needs and wants, such as a well-developed food and beverage sector, but also the needs of US companies.

US companies are willing to invest in the Mekong Delta if it suits their business plan and capabilities, and if there are good partners in business and government, he said.

Kai Schroter, vice chairman of EuroCham's Tourism and Hospitality Sector Committee, said the government should improve national tourism through national tourism branding, marketing and promotion, as well as reform in hospitality education.

Also at the event, Hirofumi Kishi, general director of Sapporo Viet Nam, a joint venture between Japan and Viet Nam, said the Delta's location near HCM City, the country's largest economic centre, and a large labour force attracted investors, but the legal system was unclear and administrative procedures were complicated.

In addition, better infrastructure was important to attract investment in industrial zones, roads and power systems, he said.

Support industries were still weak, he added.

"I hope there are more qualified local suppliers of raw materials and support industries that meet the quality requirements of the Sapporo Group," he said.

About 200 people, including economists, foreign investors, the consul generals of India and Japan, as well as officials from international organisations, attended the conference.

The Mekong Delta region achieved economic growth of more than 10 per cent in 2011 and 2012.

The delta, with 12.2 per cent of the country's area, has nearly 20 per cent of the country's 90 million population.

As the country's largest agricultural area, its major exports are agricultural products and seafood. Last year, it exported more than 6 million tonnes of rice, or 90 per cent of the country's total rice shipments.

Exports of seafood were worth $4.1 billion, accounting for 60 per cent of the country's total seafood exports.

Since 1988 the region has attracted more than $11.3 billion in 830 foreign direct investment projects.

Long An Province tops the list with nearly $3.8 billion and 493 projects, followed by Kien Giang with $3.1 billion and 35 projects.

Last year, 54 countries and territories invested $14.2 billion in the Mekong Delta, with Japan at the top with $5.7 billion, followed by Singapore with $4.4 billion and South Korea with $4.3 billion.

Lenders told to shore up IT security measures

The State Bank of Viet Nam (SBV) has requested all banks and credit institutions to strengthen the security and safety of their information technology (IT) systems.

They have been asked to provide 24-hour protection of their IT systems, particularly in their data centres and server rooms.

They have been also told to hire qualified IT experts to ensure Internet access, system access, database and user management, as well as password policies are carried out properly.

And they must limit and monitor remote access into their IT networks and to use IT experts around the clock to analyse any signs of violation.

The banks will have to develop their own methods for handling any security issues and IT infrastructure.

IT equipment and service providers must promptly notify banks about any weaknesses in security.

Banks have also been told to ensure continuous operation of the IT network, inclduing core banking, payments, Internet and mobile banking, as well as website and ATM systems.

The SBV requires credit institutions and branches of foreign banks to make the necessary adjustments and report back to the SBV before June 15.

CPI shows mixed results

The Consumer Price Index (CPI) in May was down by 0.07 per cent from the previous month in Ha Noi but rising 0.36 per cent in HCM City, according to statistics offices' estimates .

In Ha Noi, only food and foodstuff group out of the 11 baskets of goods, which contribute to the calculation of the capital's CPI data, had a price decrease this month. The basket's price, which accounts for the largest contribution in CPI calculation, slid by 0.57 per cent this month (prices of food declined by 0.93 per cent while those of foodstuff declined by 0.73 per cent).

Prices of housing and construction materials including rent, electricity, water, fuel and construction materials rebounded to rise by 0.51 per cent this month after three consecutive months of decline, as prices of kerosene rose by VND130 per litre in the middle of April and prices of cooking gas rose by VND3,000 – 8,000 (14 -37 US cents) per 12 kilo tank in May 1.

Transport prices reported the highest price hike this month, which jumped by 0.53 per cent because of petroleum price hike and the government request to control overloaded trucks that forced transportation owners to raise freight to offset their profits gained from earlier transportation by overloading. In addition, ticket prices for buses were also raised in May.

Prices of gold lost 1.4 per cent this month, tumbling 13.44 per cent on year in May.

Prices of US dollar remained unchanged this month and rose by 0.81 per cent on year this month.

In contrast to Ha Noi, CPI in HCM City increased by 0.36 per cent in May against the previous month, according to the HCM City Statistics Department.

The decrease was due to a hike of food and foodstuff prices in the basket. Prices of food rose by1.41 per cent while those of foodstuff increased by 0.03 per cent as the demand for rice exports was higher.

Prices of housing and construction materials including rent, electricity, water, fuel and construction materials rebounded to rise by 0.38 per cent this month after two consecutive months of decline. Transport prices in the city also reported a jump of 0.19 per cent over the previous month.

HHS completes first capital arrangement with GEM

Hoang Huy Investment Services SJC (HHS) successfully completed its first round of capital arrangement in accordance with the Private Placement Agreement after it signed with Global Emerging Markets (GEM) early this year.

HHS issued this announcement yesterday after HHS's Chairman Do Huu Ha successfully sold 184,160 shares to GEM, a transaction based on the Private Placement Agreement between HHS and GEM.

In February, 2014, HHS and the European-based Global Emerging Markets Ltd (GEM) entered into a Private Placement plus Warrant Agreement valued at VND324 billion ($16 million). The transaction was arranged and advised by Olympic Capital Group, Inc and Asia Global Capital Group.

Viet Nam Airlines valued at $2.78b

Minister of Transport Dinh La Thang has approved the valuation of the flag carrier Viet Nam Airlines (VNA) at VND57.156 trillion (US$2.78 billion), based on its book value.

The State capital in this amounts to VND10.567 trillion ($507.79 million).

The airline's valuation is an important basis for VNA's equitisation board to conduct equitisation. VNA plans to launch its initial public offering in September.

Earlier, VNA submitted two methods of valuation to the Minister of Transport, including basing on its book value and an estimate by foreign financial advisers based on international standards.

The foreign advisers have said that VNA is worth VND57.047 trillion ($2.7 billion), with the State capital amounting to VND23.493 trillion ($1.128 billion), as of March 31, 2013.

Military Bank gains profit increase in Q1

Military Bank's after-tax profits increased slightly 1.4 per cent year-on-year in the first quarter of this year, reaching VND636.3 billion, or US$30.3 million.

The bank's new financial reports attributed the rise to a 7.8 per cent decline in risk provisional funds, which reached nearly VND366 billion, or $17.43 million. The total operational revenues reached VND1.83 trillion, or $87.14 million, down 0.7 per cent over the same period last year, while operational costs totaled VND656.4 billion, or $31.26 million, up 6.5 per cent.

Mobiles remain largest export earner

Cell phones and accessories topped the country's overall export from January to April this year, earning US$8.08 billion, a year-on-year increase of 36 per cent, according to the General Department of Customs.

EU is Viet Nam's largest importer of mobile phones and accessories during the period, with $2.8 billion, up 17.8 per cent, followed by United Arab Emirates, with $1.2 billion, up 17.6 per cent. Of note, exports of these products to the Korean market jumped by 25 times, with $498 million, according to the statistics.

IDG, VACPA to reward outstanding firms

IDG ASEAN and Viet Nam Association of Certified Public Accountants (VACPA) on Wednesday launched Viet Nam Outstanding Corporate Awards (VOCA) 2014.

The awards are presented to recognise and honour enterprises, promote the spirit of success, innovation and competitiveness. The awards aim at both listed and non-listed enterprises, in which Vietnamese partners hold at least 50 per cent of the stakes and earn a minimum of VND500 billion (US$23.69 million) in total revenue yearly.

A set of assessment criteria includes governance frames, rights of shareholders, practices of taxation, transparency and information disclosure, responsibilities of executive boards and business effectiveness. Deadline for application submission is 20 June, 2014.

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