EVN pumps VND9.3 trillion into electric grid

The National Power Transmission (NPT) said it has invested VND9.3 trillion to build a 500kV electric grid connecting five provinces and Ho Chi Minh City.

The 437km network, which will spread across the provinces of Gia Lai, Dac Lak, Dak Nong, Binh Phuoc, Binh Duong and Ho Chi Minh City, will increase the electric back-up capacity in the southern part of the country for the 2014-2015 period, NPT said.

It will also boost power connectivity within the country and throughout Viet Nam, Laos and Cambodia after 2015, the company, which is a subsidiary of Electricity of Viet Nam, said.

Meanwhile, the Project Management Board of Central Power Projects (AMT), also a subsidiary of EVN, will act on behalf of NPT to implement the project.

While the equipment side of the project will be funded by the Asia Development Bank (ADB), the installation and ground clearance will be financed by Viet Nam Bank for Industry and Trade (Vietinbank) and Viet Nam Development Bank (VDB).

The project, codenamed 500kv Pleiku-My Phuoc – Cau Bong, will also include maintenance of 8km of the existing 500kv grid in Ho Chi Minh City and two power transmission stations in Pleiku and Cau Bong.

Project constructionwill be completed by 2013 and will be supervised by the number two and number four Electricity Construction Consultancy companies.

Electricity of Viet Nam (EVN) last month said it will borrow US$3 billion in official development assistance (ODA) sources and foreign commercial banks in order to finance electricity projects this year.

Lenders will include the World Bank, the German Reconstruction Bank, the Asian Development Bank, the French Development Agency and the Japan International Co-operation Agency.

Funds will be used to complete the O Mon 3 and 4 thermoelectric projects, improve the national distribution grid and assist the electricity sector in reforming policy.

On Tuesday EVN announced they will target reducing production costs by VND1.8 trillion (US$85.7 million) in 2012.

EVN's total capital expenditure this year is estimated at a total of VND75.5 trillion ($3.5 billion), an increase of 18.7 per cent over last year.

Shares rally on better economic outlook

The VN-Index last week advanced by 5 per cent over the previous week to close on Friday at 423.43 points. The average daily value of trades on the HCM City Stock Exchange reached VND855.3 billion (US$40.7 million), with heavier buys by foreign investors.

The VN30 Index also added nearly 6 per cent to end last week at 477.77 points.

A number of international financial groups during the past week issued positive outlooks for the Vietnamese market, but many domestic investors continued to suspect foreign funds were planning to divest from the country.

On the Ha Noi Stock Exchange, the HNX-Index also rose by 8.5 per cent over the previous week to close on Friday at 67.07 points. The value of trades averaged VND602 billion ($28.6 million) per session.

"It is worth noting that the trading volume on both bourses rose quite sharply and maintained these levels throughout the trading week," said BIDV Securities Co analyst Hoang Anh Tuan.

A strong rally together with high volumes were often signals of a long-term uptrend, and one would now be supported somewhat by the economic outlook, Tuan said.

"However, in the short term, high volumes also carry the risk of reversing any uptrend when profit-taking occurs or if some negative information destroys investor expectations."

Last week's uptrend spread across the board, with 23 out of 24 sectors advancing. Only pharmaceutical shares dropped by an average of 0.86 per cent. The banking sector rallied strongly with such leaders as Eximbank (EIB), Military Bank (MBB) and Habubank (HBB) rallying on substantial cash flows from foreign investors.

The merger and acquisitions trend in the sector, along with low share prices and restructuring policies, were said to be the main reasons for banking shares to show particular strength.

Late last week, the General Statistic Office announced inflation in February had risen at a rate of 1.37 per cent over the previous month. According to the ministries of Industry and Trade and Finance, the prices of some classes of goods in the 30 days between January 16 and February 14 rose by as much as 6.57 per cent. The ministries have ordered enterprises to keep prices stable and they have allowed some increases in support for some petroleum products from the price stabilisation fund.

Shares of PetroVietnam affiliates performed well last week, with some hitting their ceiling prices during some sessions. On average, these stocks gained 8.36 per cent over the previous week.

Meanwhile, the past month's inflation rate was much lower than in the same period last year, and several major banks have announced a reduction in lending interest rates. "The has positively helped the market," PetroVietnam Securities Co analyst Ngo Hong Duc wrote in a note.

But Maritime Bank Securities Co analysts suggested that the ability of enterprises to access credit remained limited by official policy. To counter that perception, the State Bank of Viet Nam has encouraged credit institutions to improve access to credit for enterprises and has said that it would gather proposals for unfreezing the credit situation for submission to the Prime Minister.

As stock indices rose, sell pressure also increased, said Maritime Bank Securities Co's Tran Quoc Hoan.

Foreign partners trade developer's shares

Deutsche Bank Trust Co Americas, which holds a 5.2-per-cent stake in real estate developer Hoang Anh Gia Lai (HAG), has registered to both buy or sell over 24.3 million HAG shares between February 28 and April 27. The bank had previously planned to trade 8.1 million shares of HAG within a two-month period beginning last December 22, but it delayed the transactions due to fluctuations in the market.

Meanwhile, Wareham Group, which specialises in integrated risk management solutions, has also registered to buy 1.8 million HAG shares, increasing its holdings in the company to 1.1 per cent.

Brokers halt operations ahead of extended hours

The State Securities Commission on Friday announced four securities companies which would not participate in extended trading hours when they begin next week. Truong Son Securities (TSS), SME Securities (SME), Ha Noi Securities and Dong Duong Securities have all ceased brokerage operations. Meanwhile, 98 other securities companies are ready for longer sessions, the commission said. —

Food processor IFS won't pay 2011 dividend

International Food Co (IFS) incurred losses in 2011 and will not pay a dividend this year. The company's board of directors has also voted not to pay its members a bonus for 2011. Despite last year's losses, IFS has targeted a 57-per-cent increase in earnings this year. The company also plans to borrow US$9 million from its Japanese parent company Kirin Holdings Co Ltd to supplement its operating capital.

IFS has delayed cancelling its listing on the HCM City Stock Exchange this year.

Last Fivimart store in HCMC closed down

The Hanoi-based Nhat Nam Joint Stock Co, the owner of Fivimart supermarket chain, has shut down its last store in Ho Chi Minh City’s District 7.

The sudden closure with no prior notice has raised the concerns on debt repayments of many current suppliers of Fivimart.

Some of them told Tuoi Tre that they had only known about the shutdown as soon as they got there for goods delivery.

Vu Thi hau, deputy director of Fivimart, confirmed the closure, adding that it is because of the expiration of the leasing contract for the current site of Fivimart in District 7.

The owner of the site has also told Thoi Bao Kinh Te Sai Gon newspaper that the contract would expire on March 1, 2012.

“The company is considering new operational model for the supermarket chain in HCMC,” she added.

“Once the store relocates to another place or changes its operational model, it will return the unsold goods to the suppliers to cut transport costs, and then will invite them to sit together for debt repayments and liquidation.”

“After finishing all the old deals, we will begin to ink new ones.”

“We have sent written announcements to all the suppliers early this month so that they can take back their goods on time,” she added.

Hau told Thoi Bao Kinh Te Sai Gon newspaper that the suppliers who raised the concerns over the closedown may be the old ones who have stopped working with the supermarket, but they have yet received all repayments for their goods.

“There must be some misunderstandings here, as we have paid all the debts.”

“We have 13 stores in Hanoi, and all of them are operational,” Hau said.

“We are planning to open 3 stores in HCMC and Hanoi within this year,” she told Thoi Bao Kinh Te Sai Gon newspaper, adding that the southern economic hub is still an attractive market for Fivimart.

The Fivimart supermarket chain had 5 stores in southern region, of which 4 were located in HCMC. But all of them have been closed.

PM urges Quang Ninh to modernise
 
Quang Ninh should develop policies to modernise and industrialise the province, while protecting natural resources and ensuring national security, by 2015.

Prime Minister Nguyen Tan Dung made the statement at the investment promotion conference entitled "Quang Ninh – Convergence and Pervasion" held in the northeastern province yesterday.

The two-day event which has attracted participation of nearly 1,000 people including representatives of ministries, embassies, international organisations, agencies, investors and localities aimed to introduce its socio-economic development strategy until 2020 and towards 2030.

Dung hailed the province's growth as it had obtained great achievements and witnessed new development.

"The GDP growth rate averaged 12.7 per cent per year. The economic structure has been shifted in a positive manner as its industry and services accounted for more than 94 per cent while agriculture accounted for 5.6 per cent," he said.

He added the province last year managed to achieve a growth of 12 per cent, doubling the average rate of the nation. GDP per capita reached US$2,200 with the budget reaching more than VND29 trillion ($1.38 billion), the highest level ever reached.
 
The PM urged the province to mobilise all domestic and foreign resources to invest in and develop the comprehensive and modern infra-structure systems, giving priority to projects with strategic significance such as the Noi Bai- Ha Long, Ha Long – Mong Cai traffic routes, the road linking Ha Long with Ha Noi- Hai Phong Highway, Hai Ha- Mong Cai, Thanh Hoa- Quang Ninh coastal road, Van Don Airport, Yen Vien-Pha Lai – Ha Long railway, Cai Lan and Hai Ha ports.

"The province should attach importance to the training and development of qualified human resources with management skills, encouraging the application of science and technology, innovating and transferring environment-friendly technologies," he said.

Dung also asked the province to actively and positively integrating into the international arena to effectively exploit its potentials and advantages. Developing appropriate solutions and plans to effectively promote the Viet Nam – China: two corridors, one economy co-operation programme, focusing on the development of border trade, building Mong Cai City into a modern international border city, playing an important role in developing the coastal economy connecting the province with China's Guangxi Province, thus boosting trade, investment and tourism among Viet Nam, China and ASEAN countries for mutual benefit and development.

Speaking at the conference, secretary of the provincial Party Committee Pham Minh Chinh said the province conveyed a clear message about the determination of removing economic growth model from hot to green and sustainable development associated with reorganising economic restructure and ensuring social security.

"We have established a new investment promotion agency with focus on improving investment environment comprehensively, contributing to promote FDI, ODA flows and capital from private sector into Quang Ninh in the coming time," Chinh said.

Nguyen Van Doc, chairman of the provincial People's Committee said the province's advantages relied on how it differentiated itself from other places.

"Quang Ninh has a number of special factors including location, topography, nature, economy and human resources as well as being a modern part of the world. It is also a centre for production and development in the for sectors of coal mining, industry, thermal power, building materials, shipbuilding, seaport services and border trading," Doc said.

He added the province was one of two localities approved by the Government to build economic zones in Van Don, Quang Ninh and Phu Quoc in southern Kien Giang Province including a high-quality marine-island tourism centre, airport, seaport and local-regional financial services hub.

"Quang Ninh, with its strategic location as a force of momentum in the North, will not only bring prosperity to itself, but also other localities in the region, neighbouring provinces and the country," said Minister of Planning and Investment Bui Quang Vinh. Vinh added that the Government had provided preferential policies and mechanisms as well as several important projects to help the province fully tap into its potential.

Minister of Finance Vuong Dinh Hue said Viet Nam had boosted progress to economic restructuring and Quang Ninh Province therefore should follow the roadmap in its socio-economic planning.

Hue said the province could hire foreign consultancy firms to help socio-economic planning, to further help the province.

Minister of Industry and Trade Vu Huy Hoang said the province had created a friendly business environment.

"These factors could help Quang Ninh become an industrialised province by 2015, five years before the country's target as set by the provincial authorities," Hoang said.

Hirokazu Yamaoka, chief representative of the Japan External Trade Organisation (JETRO) recommended the province should take advantages of Ha Noi's expansion and neighbouring Hai Phong City for the development of regional links.

Alexander Feldman, president of the US-ASEAN Business Council, which represents more than 110 US companies across several sectors, said the province's unique position would attract global projects in industries involved in land, seaports and even air travel.

He said they acknowledged that Viet Nam has had innovative ways to find solutions to improve its infrastructure.

He said the US business community had been optimistic about Viet Nam's economy and the two-way trade turnover last year was six times higher than 2010.

He added that they would continue to work with the provincial authorities to seek investment opportunities in the province.

He also urged the Government to complete its legal framework on public-private partnerships to take advantage of finance and technology for the country's infrastructure projects.

"With strong support from the Government, Quang Ninh Province could become a key economic zone in the northern region," he said, adding that the main drives would be tourism, logistics, food processing, commerce and coal mining.

National Quality Awards improve competitiveness

The National Quality Awards play an important role in improving the competitiveness of products and services, especially its exports, says Deputy Prime Minister Nguyen Thien Nhan.

Deputy PM Nhan congratulated 98 businesses on winning the awards at a ceremony in Hanoi on February 26 and affirmed that the honour helps businesses improve the quality of their products and management.

The awards offer a good opportunity to promote their trademarks and sharpen their competitive edge in the process of international economic integration, said Mr Nhan.

The annual awards honour outstanding businesses and organisations that have gained significant achievements in production, business and services. Nearly 1,400 businesses have earned National Quality Award since 1996 including the 73 that were presented with the Prime Ministers’ certificates of merit and 26 that won the Global Performance Excellence Award (GPEA) in 2011.

The winners were chosen based on their achievements and improvements in seven areas including leadership; strategic planning; customer and market focus; management of measurements, analysis and knowledge; human resources; process management; and business/organisational performance.

The 2011 gold prize winners include the Thien Long Group Corporation, Trung Nguyen Coffee, Tien Phong Plastic JSC, Pomina Steel Company, Ltd, and Chemical 21 single member limited liability company. The Minh Long I Company, Ltd and Robot Investment Corporation were also honoured with the GPEA from the Asia-Pacific Quality Organisation.

The awards ceremony was organised by the Directorate for Standards, Metrology and Quality (STAMEQ) under the Ministry of Science and Technology.

Limit on sugar exports eased to help producers cut losses

The Ministry of Agriculture and Rural Development has allowed businesses to export up to 150,000 tonnes of sugar to develop production this year.

The export volume is 100,000 tonnes lower than the Viet Nam Sugarcane Association's proposal but it will help sugar refineries take back their investment capital quickly and stop selling sugar at a loss.

The association reported that sugar refineries were selling at the price of VND15,500 (US$0,73) per kilogram, while its production cost was more than VND16,000.

Many enterprises were considering reducing the price of sugarcane from VND1,000 to VND900 per kg. If they did it, the income of sugarcane growers would be affected.

The country's total supply of sugar was estimated at 1.57 million tonnes this year, of which total demand would be 1.5 million tonnes, making a surplus of about 70,000 tonnes.

However, the surplus would be possibly much higher than the estimate because the annual volume of illegal import is very high, especially from Thailand. Meanwhile, the domestic refineries' production is much lower than local demand.

Ore-bauxite factory to open in April

The Tan Rai ore-bauxite factory, part of the Lam Dong Aluminum-Bauxite Complex Project, is expected to come into operation in April, said the project management board.

At present, the Tan Rai Aluminum Bauxite Project has completed around 90 percent of its targeted construction.

With investment capital of almost US$700 million, the Tan Rai complex, located in Lam Dong Province, aims to produce 600,000 tonnes of alumina per year and will increase its output to 1.2 million tonnes by 2015. The duration of the project, run by the Viet Nam National Coal and Mineral Industries Group (Vinacomin), will be 30 years.

Vinacomin is also developing the Nhan Co bauxite mining and refinery complex in Dak Nong. The complex is expected to churn out its first produce early next year.

With the operation of the Tan Rai and Nhan Co bauxite mining and refinery complexes, Vietnam hopes to become a competitive alumina exporter worldwide.

The country is currently recognized as having the third largest bauxite reserves in the world after Genuine and Australia, but most of the mineral remains untapped and concentrated in the country's northern mountains and the Central Highlands.

Wholesalers should be responsible for fuel quality

Following a number of mysterious burning bike cases, in which adulterated gasoline is the main suspect, the Ministry of Industry Trade has demanded that fuel wholesalers be held responsible for the quality of fuel distributed under their systems.

The ministry also asked the wholesalers to strengthen checkups and supervision over the dealers, as well as binding clauses in contracts with dealers, to hold them responsible for the products they sell in order to stop them from buying from fuel of dubious origin and quality.

The wholesalers should also conduct regular checkups on the dealers to detect whether or not they violate the contract, said Phan Minh Tan, head of the Ho Chi Minh City Department of Science and Technology.

According to Dien, a fuel dealer in the southern province of Binh Duong, the contract between a dealer and the wholesaler has a clause stipulating that the wholesaler be responsible for the fuel quality prior to the time it is pumped into the dealer’s tanks.

Once the fuel is in the dealer’s tanks, any substandard products detected are the dealer’s fault.

The dealer will be penalized by authorities, as well as by the wholesaler for violating the contract, said Dien.

Meanwhile, the CEO of a fuel wholesaler suggested that whenever a fuel product with poor quality is detected, authorities should trace it back to the transporting and distributing process, to find the real violators and enact strict sanctions on them.

However, Nguyen Xuan Son, CEO of PV Oil, said wholesalers are not authorized by law to conduct checkups or inspections.

“We are not allowed to raid the dealers and ask for fuel samples for tests as could the market management or product quality testing agencies,” said Son.

“We cannot ask dealers to provide receipts and invoices of their products to see where they have sourced the fuel from, either.”

Thus, PV Oil has recently asked its people to disguise themselves as consumers to buy fuel from suspected dealers for quality tests.

“In case a dealer breaches regulations, we will stop supplying, and end the contract.”

According to decree no 84, which manages fuel trading activities, wholesalers are to be held for jointly responsible in case their dealers are found selling substandard products.

However, a chief official from Petrolimex said the decree should be more specific as to how much, and of which part, wholesalers should be responsible for, rather than the general term of “joint responsibility .”

For their part, fuel dealers also called for an amendment to the decree, regarding the fuel sample keeping of wholesalers.

In cases when the fuel is not adulterated on route from the depot to dealer tanks, they will be fully responsible for the substandard products, dealers said.

However, a dealer of Saigon Petro said in fact, fuel wholesalers are only responsible for the fuel quality for seven days after the samples are taken.

This means in case substandard gasoline is detected, the wholesalers only agree to provide the samples for tests if they were taken no more than seven days previously.

“It usually takes us two weeks to sell around 20,000 liters of gasoline. Supposing the sample is taken on the very first day of the month, we will be held fully responsible for any substandard petrol detected between the 8th and 15th day, while the wholesaler will not be involved in the case.”

Revamp for State enterprises

The Government plans to implement a project aimed at restructuring State-owned enterprises (SoEs) this month, said Finance Minister Vuong Dinh Hue.

At a meeting on restructuring the Housing and Urban Development Holdings (HUD) held Tuesday, Hue said that the Government would create favourable conditions for SoEs to access credit in a move to facilitate the restructuring.

"Besides working with other relevant ministries to develop the corporate bond market, the finance ministry is also due to issue policies to boost the securities market this quarter in order to assist enterprises in capital mobilisation," Hue said.

Addressing the meeting, HUD General Director Nghiem Van Bang admitted that his corporation was facing difficulties in accessing capital in the restructuring process due to a slowdown of the stock market.

To implement restructuring, Bang said that the HUD would finalise the equitisation of its four corporation members this year.

"We will also focus on our core real estate industry business and withdraw capital from existing non-core and ineffective projects," he added.

He said that the HUD would renovate its corporate governance system, especially in financial governance, to help it operate more effectively.

The corporation on Tuesday pledged to cut VND125 billion (US$6 million) in management costs this year, which was expected to raise its annual profit target from VND1.98 trillion ($99 million) to more than VND2.1 trillion ($105 million).

Together with the HUD, Hue said that Bao Viet Insurance Holdings, Vinatex, Vinalines and Electricity of Viet Nam had so far also pledged to cut more than VND3 trillion ($150 million) in management and production costs this year.

Cbank allocates 2012 credit growth caps for more banks

The State Bank of Vietnam has allocated 2012’s credit growth caps for more lenders.

Accordingly, the caps for Military Commercial Joint Stock Bank (MB) and Saigon-Hanoi Commercial Joint Stock Bank (SHB) are 17 percent and 15 percent respectively.

With the new allocation, MB has been grouped as ‘healthy bank’ following the SBV standard.

The group now includes the Bank for Agriculture and Rural Development of Vietnam (Agribank), Asia Commercial Joint Stock Bank (ACB), Vietnam Export-Import Commercial Joint Stock Bank (Eximbank), Maritime Commercial Joint Stock Bank (Maritime), Vietnam International Commercial Joint Stock Bank (VIB) and Vietnam Prosperity Commercial Joint Stock Bank (VPBank).

SHB has been categorized as ‘average bank’, within the group including Nam A Commercial Joint Stock Bank (Nam A Bank), Dai A Commercial Joint Stock Bank (Dai A Bank), Kien Long Commercial Joint Stock Bank (Kien Long Bank), and Orient Commercial Joint Stock Bank (OCB).

Agribank has begun to cut lending rates by 1-1.5 percent for all customers borrowing money for production.

The short-term floor rate for families operating in agriculture-forestry-fishery-salt production is 15.5 percent, while that for firms producing and exporting goods in the fields of agriculture-forestry-fishery-salt is 14.5 percent.

In addition, the short-term floor rates for borrowers making money from processing agricultural goods for the local market or producing agricultural materials, like fertilizers or pesticides, and technologies is 1.5 percent.

For other sectors, the lowest lending costs range from 17-19 percent for short and medium-term lending.

With the recent moves, the four biggest Vietnamese lenders with 55-60 percent of the market share, have already cut the lending rate for specific groups of borrowers, mainly goods manufacturers, said Agribank’s chairman Bui Ngoc Bao.

The other lenders are the Bank for Investment and Development of Vietnam (BIDV), the Bank for Foreign Trade of Vietnam (Vietcombank), and the Bank for Industry and Trade of Vietnam (VietinBank).

Agribank will set aside VND54 trillion for lending in 2012, Bao said, adding that VND44 trillion will be allocated for short-term lending and the rest for medium-and long-term lending.

Most of the lending will be prioritized for those operating in agriculture, forestry, fishery, and salt production, he emphasized.

Agribank’s total outstanding loans are expected to increase 10 percent year on year, while that for agriculture and rural development will rise 15-18 percent year on year, making up 70 percent of total outstanding loans for the sector.

As of December 31, 2011, Agribank’s total outstanding loans were VND443.47 trillion, up 7 percent over the previous year.

The total outstanding loans for agriculture and rural development were VND301.6 trillion, making up 68 percent of total outstanding loans for the sector.

Exhibition introduces Quang Ninh’s investment potential

An exhibition to promote investment in the northern border province of Quang Ninh opened on February 22.

This is part of an investment conference to be held in the province on February 23-24.

On display are documents, photos, objects, and maps highlighting Quang Ninh investment attraction potential.

The same day, the province’s People’s Committee held a press conference announcing preparations for the upcoming conference. Some 892 local and international guests have registered for the event.

Delegates will participate in seminars such as “Development trends of the entertainment industry – international experiences and lessons for Vietnam,” “Green growth – an inevitable trend for Vietnam” and “Connecting Businesses.”

Vietnam ready to facilitate US businesses’ operations

Vietnam is willing to create favourable conditions for US businesses to invest in the country, said Deputy Prime Minister Nguyen Xuan Phuc.

On February 22, Deputy PM Phuc received a delegation of representatives from nearly 30 US businesses involved in information and technology, education and health care which was headed by US Ambassador to Singapore David Adelman.

The US business community has contributed to promoting Vietnam’s socio-economic development and Vietnam-US relations, said Mr Phuc.

He expressed hope the visit will help US businesses get a better understanding of Vietnam’s economic policies and seek business opportunities in the country thus opening up prospects for economic, trade and investment cooperation between the two countries.

The Deputy PM said foreign businesses investing in Vietnam are considered an element in the national economy and their success is also Vietnam’s success.

Ambassador David Adelman said US businesses want to seek business opportunities in Vietnam as the country is a dynamically developing economy with its potential market.

He wished that the quality of Vietnam’s human resources and workforce would be further improved to meet the requirement for development.

Vietnam, RoK share experience in marine management, development

More than 40 experts and managers from Vietnam and the Republic of Korea gathered at the second Vietnam-RoK Ocean Forum in HCM City on February 22 to share their experience in marine management and development.

The event was co-organised by the Vietnam Administration for Sea and Islands (VASI), the Ministry of Natural Resources and Environment, and the Korea Maritime Institute.  

Delegates discussed sea and ocean issues, common concerns related to the national strategy, and policies to conserve the marine environment, sea tourism and the development of a green economy in both Vietnam and the Republic of Korea.

VASI director Nguyen Van Cu said that the forum is a practical activity for scientists and managers of both nations to fulfil their management tasks regarding the sea and islands of each party.

Experts of both nations made presentations on concrete issues such as the management of the maritime environment in the RoK’s Masan Bay and Vietnam’s Ha Long Bay, the development of maritime resources and the Law on Natural Resources, Maritime Environment and Islands in Vietnam.

Vinacomin seeks coal price hike

The Viet Nam National Coal and Mineral Industries (Vinacomin) Group proposed again yesterday that the Government approve higher prices for coal used in electricity production.

Last year, the group sought an increase of 10-15 per cent but an increase of just 5 per cent was approved. Meanwhile, effective March 1, electrical rates will increase by an average of 15.28 per cent. Coal currently constitutes an estimated 51-55 per cent of the costs of generating electricity.

Vinacomin says that coal is sold to power plants below production costs, causing the mining industry losses of VND3 trillion (US$143 million) in 2010 and VND5 trillion ($238 million) in 2011.

Vinacomin general director Le Minh Chuan told online newswebsite Vietnamplus that Vinacom would continue urging the Government to set coal prices in accordance with market forces in an attempt to ensure the group's profitability.

The group has also petitioned for a reduction in export tax rates applied to coal from the current 20 per cent to 10 per cent, as the profits from coal exports allow it to invest in new mining projects, as well as help offset losses on the domestic market and rising production costs.

Vinacomin is also seeking Government approval for its proposal to look for long-term financing from foreign creditors to develop new mines and raise capital.

Vinacomin has targeted production of 45.5 million tonnes of coal this year, a million tonnes higher than last year, and has projected earnings of VND96.3 trillion ($4.58 billion).

Top priority this year will be given to hastening the implementation of key mining projects, mobilising capital from various resources, and reducing State-funded capital expenditures, said Chuan.

Insurance market to be overhauled

Monopoly will be scrapped from the insurance industry within the next 3 years as highlighted in a development strategy for the 2011-2020 period.

The insurance market development strategy issued last week partially reflects the Government’s goal of restructuring the financial and insurance sectors.

According to the strategy, to enhance the insurance system’s ability to meet increasingly diverse demands, the priority solution will be to make it safer.

The fragmentation of the market must be eliminated first, according to the strategy.

Regulations guaranteeing fairness and transparency in insurance services should be completed as stated by the amended 2010 Insurance Law.

The strategy demands compliance with the principles of bidding and competition in the insurance sector. Administrative interventions in insurance transactions will be strictly supervised and treated.
Stakes held by State groups and corporations in insurance firms will be diversified as well as reduced to prevent monopoly.

The insurance market is envisaged to make up 2 percent -3 percent of gross domestic product (GDP) by 2015 and 3 percent - 4 percent by 2020.

There are currently 43 insurance firms in Vietnam. 29 of them are non-life insurers and 14 are life insurers, according to the Insurance Supervisory Authority of the Ministry of Finance.

The Ministry of Finance will start to restructure the insurance market this year in order to promote healthy insurers and consolidate weaker firms.

The ministry is compiling a set of criteria to assess and categorize insurance companies into 4 groups, with specific management and supervision measures for each group.

The categorization will be carried out this year, according to the ministry’s report on restructuring State-owned enterprises and securities and insurance firms.

The first group will consist of insurance companies with guaranteed solvency and profitable business.

Enterprises in this group will be reinforced and maintained, allowed for expansion in line with efficient business schemes, but they will be closely inspected and supervised to ensure compliance with the law.

Group 2 will be enterprises with guaranteed solvency but high operational costs, high compensation rates and zero profit in 2 consecutive years.

Management agencies will evaluate the efficiency and reduce operational expenses for this group.

Those on the verge of losing solvency, with margins of solvency lower than the minimum level, will be gathered in group 3.

These companies need financial assessment, investment restructuring, and debt settlement, and parts of their insurance policies can be transferred to other firms.

The last group will be insolvent companies. These companies will be put under special control and applied the solutions in accordance with the Law on Insurance Business.

During the special control period, if enterprises fail to overcome their difficulties, they will be forced to merge into other firms or take court receivership under prevailing laws.

Insurance enterprise restructuring will be in line with the restructuring of credit institutions, State-owned enterprises, and the stock market to be deployed from 2012 to 2015 as mapped out by the finance ministry.

Japan, Vietnam cooperate in mechanical outsourcing

Song Thu One Member Limited Liability Company, under the Ministry of Defense, and Japan’s Daifuku Group signed a cooperative agreement on mechanical outsourcing in Da Nang city on February 22.

Under the agreement, Song Thu-Daifuku mechanics joint stock company will take shape in Hoa Cam industrial park, Cam Le district, Da Nang city, on an area of 32,406 square metres.

When completed, the project is expected to bring revenue of VND500 billion per year and generate nearly 200 jobs.

As scheduled, construction of the project will be finished and equipment installed for beginning operation in the third quarter of this year. Around 50,000 products, mostly trolleys used at airports, will be produced in the fourth quarter.

Daifuku is Japan’s major economic group specializing in manufacturing consumer goods, especially user-friendly mechanical products. With annual revenue of US$2,239 billion, the group has production establishments and representative offices in 20 nations and territories around the world.

Hanoi’s exports gain new momentum

Since early January, Hanoi’s export turnover has reached US$1.34 billion, up 4.1 percent compared to the same period last year.

The groups of electric wire and cables, garment and textile, oil and gas were credited with highest growth rates while other groups of arts and handicrafts, computer spare parts and peripheral devices showed a year-by-year increase of 12-34 percent.   

Oil and gas exports hit US$269 million, computer spare parts and peripheral devices fetched US$245.1 million.

Hanoi’s increasing exports to the Southeast Asian and Asian regions, and the European Union (EU) over the past two months were attributed to great efforts by Vietnamese businesses in overcoming challenges.

Thai Amata Corp expands business operation in Vietnam

Thai Amata Corporation Plc has won a Vietnamese government licence to invest in a second industrial zone (IZ) in southern Dong Nai province.

Named Amata Express City, the 1,600-hectare IZ will be located near Long Thanh international airport, not far from Ho Chi Minh City. The first phase of the project is expected to be finished by 2015, with a high technology sector covering nearly 50 percent of the site.

Somhatai Panichewa, chief business officer at Amata Corp, said this is a milestone in her business operation in Vietnam. “It’s in line with our strategy to expand the industrial sector, relocate business sites and meet the urgent demand for manufacturing expansion,” she added.

In 1994, Amata started with a project to build Bien Hoa IZ in Dong Nai province. Bien Hoa IZ is now home to 120 factories although its total area is less than half the size of Amata Express City.

Danang attracts over 200 FDI projects worth more than US$3bil

Since early this year, the central city of Danang has attracted more than 200 foreign-invested projects worth about US$3.16 billion, according to the local Investment Promotion Centre.

The two biggest – a 100 per cent Belgian capital project and a joint business project between a Vietnamese enterprise and a Vietnamese American company – are estimated at over US$9.2 million in total.

The city has so far established six industrial zones for a string of 330 foreign investors, mostly from Japan and the European Union, who have clear-cut and detailed strategies for long term.

Danang's investment environment has improved significantly with more foreign-invested projects getting off the ground to give a boost to the local economy.

As a result, the city's export turnover has risen three times to about US$1.759 billion since 2000.

Last year’s figure was estimated at US$1.42 billion.

Vinacomin divests $10.56 mln from four enterprises

The Vietnam National Coal and Mineral Industries Corporation, or Vinacomin, has recently divested nearly VND220 billion (US$10.56 million) from four enterprises, a move under its restructuring plan as ordered by the Prime Minister.

Under the operation plan for this year, Vinacomin said it will only maintain capital investment in businesses working in the coal and mineral extractive industry.

For the other businesses, Vinacomin will begin its divestment plan.

The company is completing procedures to divest VND216.8 billion from four enterprises.

Specifically, Vinacomin is hiring the Saigon – Hanoi Securities Co to complete procedures to transfer its 10 percent stake, worth VND50 billion, at the Vietnam National Aviation Insurance Co.

It will also divest VND10.5 billion, VND47.8 billion, and VND48 billion, from the BIDV Expressway Development Co, the Economic Zone Hai Ha JSC, and the Vietnam Investment Fund.

Last year Vinacomin also restructured its outbound capital contributions, in a way that the company and its subsidiaries no longer contributed to one same business.

Specifically, the state-run company transferred its capital contribution at the Vonfram Dak Nong JSC worth VND10.87 billion, or 29 percent of the total registered capital, at the price of VND15.66 billion.

At the Ha Tinh Port JSC, Vinacomin transferred the 36 percent stake worth VND16.2 billion for VND16.2 billion.

Meanwhile, the respective divestments the coal and mineral giant made at the Ha Tay Real Estate Co, and the Long Thanh International JSC are VND4.6 billion, and VND7.5 billion.

Amata gets nod for huge urban area

Amata (Vietnam) Joint Stock Co. has gained approval from the Government to develop an industrial and urban area worth US$20 billion in Dong Nai Province, the company’s CEO said.

Huynh Ngoc Phien, general director of Amata (Vietnam), confirmed the news with the Daily on Tuesday after international news agencies had reported on the second project of Amata Corporation PCL related to the industrial-urban complex in Dong Nai.

However, to develop this huge Amata Express City project, Amata will invite secondary investors to join forces to develop the city adjacent to the planned Long Thanh International Airport.

Amata Express City will be developed on a 1,300-hectare site next to the expressway that leads to Long Thanh Airport and is under construction. The project consists of three components, namely a riverside urban and services area covering 760 hectares, a 420-hectare high-tech industrial park, and an urban area of 105 hectares in Long Thanh Town.

“The capital required for infrastructure development is some US$500 million, and the total capital for the city is around US$20 billion,” said Phien.

Amata (Vietnam) will take charge of making the planning scheme, building supporting utilities, marketing the project, and then attracting investment from others.

The project design was completed on Monday, he added. At present, Amata is trying to finalize procedures in Dong Nai to commence the project in early 2013.

It will take seven years to finish the high-tech industrial park, while the two urban areas will take shape over a period of 15 years.

Amata Express City has been registered as the key project of Dong Nai Province. The project owner plans to introduce the project next week after working with Dong Nai’s leaders.

At the conference to announce the zoning plan for Long Thanh International Airport in August last year, the government of Dong Nai informed some 21,000 hectares surrounding the airport project would be used for developing urban areas and supporting facilities for the airport. Long Thanh International Airport will become the nation’s biggest and one of the regional hubs for international airlines when in place.

The airport will cover 5,000 hectares. The project is planned to get off the ground in 2015 and start operation in 2020.

Amata (Vietnam) is a joint venture between the Corporation for the Development of Bien Hoa Industrial Zone (Sonadezi) and Thailand’s Amata Corporation Public Company Ltd. The venture was established in 1994 to develop Amata Industrial Park in Bien Hoa City, Dong Nai Province with total investment capital of US$1.8 billion.

To date, there have been 125 enterprises operating in Amata Industrial Park and occupying up to 99% of the land for lease there.
 
Scientists and enterprises still lack connection

Enterprises and scientists still lack connections in producing and commercializing scientific and technological research projects, said Mai Thanh Phong, director of the Technology Business Incubator (TBI) of the HCMC University of Technology.

At a meeting between enterprises, investment funds and scientists held on Tuesday in HCMC, Phong said that many scientists did not know clearly what products enterprises really needed. Meanwhile, enterprises cannot find those scientists able to turn out products they need, and thus have to import such products at high prices, he said.

Phong cited an example, saying that an oil extracting machine made in Malaysia with an output of 50 liters per shift is sold at VND2 billion while the price of the same machine produced in Vietnam is only VND1 billion.

In addition, scientists lacked investment capital to carry out research projects, Phong added.

Huynh Luu Thanh Giang from the HCMC Science and Technology Fund at the meeting introduced a financial support program for enterprises wanting to engage in technological innovation.

Giang said that the fund would provide enterprises with loans for technology transfer and commercialization. An enterprise can borrow an amount worth up to 70% of the investment and not exceeding VND10 billion, she added.

The fund provides loans lasting four years with an interest rate only half of the average rate offered at banks. Currently, the fund is offering the rate of 8%.

However, to borrow loans from the fund, technological products of enterprises must have been nearly completed and commercialized. Besides, the fund will provide the loans after evaluating enterprises’ technological projects.

Phong from TBI also introduced new inventions of the university and said the university would transfer these products to enterprises if they needed.