Petrol importers slash retail commissions

Petrol importers said they had to cut commission given to retailers due to loss experienced in the wake of rising prices on the global market.

General Director of Saigon Petro Dang Vinh Sang said that despite the Government's recent decision to cut the petrol import tax, importers still made a loss of VND800 per litre of petrol and VND600 per litre of diesel oil.

The finance ministry on Tuesday decided to exempt import tax on petrol and cut the tariff on oil from 5 to 3 per cent to stabilise the domestic market in the context of rising oil prices on the global market over the past few weeks. Imported oil prices in Singapore, the main source of Viet Nam's imported petrol and oil, have risen sharply, reaching US$130 per barrel, up nearly 6 per cent against January.

"The loss forces us to cut commission given to retailers from VND350 per litre to VND300 as of Wednesday," Sang said, adding that the cut was the second this year. Previously, Saigon Petro had cut the rate from VND600 to VND350 per litre.

The Military Petroleum Corporation also had to cut its commission to VND300-350 per litre.

Though not detailing the commission rate given to retailers, Vuong Thai Dung, deputy general director of Petrolimex, which accounts for roughly 60 per cent of the local petrol market share, said that compared with the commission rates given to retailers of other petrol and oil importers, that of Petrolimex was the lowest.

Fivimart rejects rumor of going bankrupt

The Fivimart supermarket chain has not closed and entered bankruptcy as rumored on some newspapers but is growing well and will continue to expand its network, affirmed Vu Thi Hau, deputy director of the chain.

Hau told the Daily last Saturday that a Fivimart supermarket in Phu My Hung urban area in HCMC’s District 7 was closed as the premises lease would expire this Thursday. Therefore, the firm has decided to relocate the supermarket to new premises after cleaning up, returning products to suppliers and settling arrears with them.

A representative of the leasing firm in Phu My Hung also confirmed that the lease would expire on Thursday.

“We sent dispatches to all current suppliers to inform of the closure and ask them to perform procedures to receive products and settle debts,” said Hau.

Regarding information about some suppliers taking siege of a supermarket of the chain in District 5 last Friday, Hau said they might be old suppliers who had yet to liquidate contracts with the firm.

“After closing the supermarket in District 7, we still have 13 others which are operating well, and we have planned to open three more in HCMC and Hanoi this year. Therefore, it is not true that the Fivimart chain goes into bankruptcy and stops operating,” she said.

According to Hau, when a supermarket or shop is closed or relocated, the operator normally returns products to suppliers to cut the transport cost, pay debts and liquidate contracts. After that, two sides will sign new contracts, according to Hau.

The Fivimart supermarket was invested in 1997 by Nhat Nam Joint Stock Company, one of the first enterprises operating in the supermarket sector in the northern region. However, Fivimart has not been able to attract consumers in HCMC, but Hau said the firm would still invest in this market.

Bank shares, foreign buys lift market

Nearly two-thirds of listed stocks posted gains on the nation's stock exchanges yesterday, lifting benchmark indices.

On the HCM City Stock Exchange, the VN-Index closed at nearly a five-month high of 428.41 points, a gain of 1.18 per cent over Friday.

Bank stocks continued to attract speculative investors. With today the ex-date for shareholders to participate in its 2011 dividend payout, Military Bank (MBB) became the most-active share on a volume of over five million yesterday, closing up 3.5 per cent to VND14,700 per share. MBB will pay a 3-per-cent cash dividend for the second half of 2011.

Ongoing rumours about the battle for control of the board of Sacombank (STB) between STB management and Eximbank (EIB) lifted STB shares to their ceiling price for a second consecutive session yesterday. Over 1.2 million shares of STB were traded while buy orders for another million couldn't be filled.

Advancers outnumbered decliners on the HCM City bourse yesterday by a margin of four-to-one, with fully half of all gaining shares hitting their ceiling prices. Many were blue chips, including Phu My Fertilisers (DPM), steemaker Hoa Phat (HPG) and real estate developer Hoang Anh Gia Lai (HAG) – helping lift the VN30 Index by 1.69 per cent to conclude the session at 485.85 points.

Among large-caps, only insurer Bao Viet Holdings (BVH) and real estate developer Vincom (VIC) bucked the trend, declining by 2.5 per cent and 1.8 per cent, respectively.

Buys also focused on low-priced stocks, with Binh Thuan Hamico Mineral (KSA) hitting the daily limit of 5 per cent for a 10th consecutive session, and Bac Giang Exploitable Mineral (BGM) topping out for a seventh successive session.

The overall value of trades in HCM City, however, dropped 15.6 per cent from Friday, totalling about VND931 billion (US$44.3 million) with 65.4 million shares changing hands.

On the Ha Noi Stock Exchange, the HNX-Index rose by 3.12 per cent to close yesterday at 69.16 points. Value fell by 7 per cent to just VND682.4 billion ($32.5 million) while the volume of trades decreased by 13 per cent to around 74.8 million shares.

Ha Noi Housing Bank (HBB) remained the most-active stock nationwide, with 10.4 million traded before it closed at its ceiling price of VND5,500.

Market conditions were good with positive support from foreign buyers over the past week, helping maintain high volumes and values, PetroVietnam Securities Co analysts wrote in a report.

"However, with such rapid growth, the market will likely see a strong and sudden downward correction in the next few sessions," they warned.

Foreign investors continued as net buyers on both exchanges yesterday, picking up shares worth a combined net of VND18.5 billion ($882,000).

Ethanol petrol sales stop rumour rejected

PV Oil affirmed that its processing and sale of ethanol (E5) petrol were still normal after recent rumours that it had to stop operations due to low quality.

The company said that its petrol was still being sold at more than 140 stations nationwide and the corporation would continuously enlarge its distribution network in the coming time.

Quang Ninh attracts FDI in clean technology

The northern coastal province of Quang Ninh called for Foreign Direct Investment (FDI) in 12 infrastructure projects and 6 tourism, industrial zone and construction projects at an investment conference in Ha Long City on February 24.

The conference provided an important economic forum for 1,000 domestic and foreign managers, economic experts and investors to help the province become a key northern economic hub.

Secretary of the Quang Ninh Provincial Party Committee Pham Minh Chinh said Quang Ninh’s financial resources can only meet 50 percent of its development needs. The attraction of external investment sources is the shortest way to success and meets the community’s desire, he said.

Over the past 15 years, the flow of Foreign Direct Investment (FDI) capital into the province has reached about US$3.7 billion. This year, Quang Ninh is expected to attract more investors in projects with 40-50 percent of their capital invested in clean technology to help improve the environment in Ha Long Bay and Bai Tu Long Bay.   

Currently, Quang Ninh has 11 industrial projects approved by the Government. The key ones include the US$1.2 billion Van Don economic zone and international airport project, the US$1.2 billion Cai Bau port to the north of Van Don EZ and the US$3 billion Hai Ha seaport industrial zone in Hai Ha district which plays important role in promoting trade exchange between Vietnam and China. Hai Ha seaport industrial zone is designed to receive ships weighing up to 150,000 DTW.

Quan Trieu industrial zone, covering an area of 150 hectares with an estimated capitalization of US$25 million, will provide a driving force for socio-economic development in Dong Trieu district and surrounding areas.

Also in Dong Trieu district, infrastructure construction has been basically for Kim Sen industrial zone to develop support industries.

In addition, Dam Nha Mac industrial zone will cover an area of 3,170 hectares along the banks of Bach Dang and Chanh rivers to the southwest of Hai Phong city. The project’s investment capital is estimated at US$2-3 billion to help promote trade exchange between Vietnam and China.       

Quang Ninh aims to become the first modern industrial province of Vietnam by 2015.

Local farmers get rid of GlobalGAP

While local authorities and scientists have extended efforts to encourage more farmers to cultivate in line with the GlobalGAP or VietGAP standards, those following them have demanded a return to traditional practices.

GlobalGAP, or Good Agricultural Practices, is an international standard assuring transparency of origin, quality and food safety at each stage of production for cultivation, animal husbandry and aquaculture.

The Tien Giang-based Lo Ren Vinh Kim cooperative was one of the first specializing areas in the Mekong Delta to be awarded the GlobalGAP certification in 2008.

While local farmers were at first happy and proud of being ‘GAP farmers’, they are now considerably disappointed, as the products are sold at prices as low as those cultivated using the normal agricultural practices, despite their hard work on the orchards.

In 2008 Nguyen Ngoc Dieu of Chau Thanh District pioneered to join the Lo Ren Vinh Kim cooperative, to have his 3,000-square-meter star apple orchard grown under GlobalGAP standards.

“It is said that fruits cultivated in line with GAP can be exported easily, and at high prices, so I followed the trend without hesitation, though I did know that it is not easy to follow the practice,” said Dieu.

“Yet the GlobalGAP star apples are now sold in the markets at prices equal to normal ones.”

Dieu had spent a year of extensive hard work to meet the 243 standards provided by GlobalGAP, only to see traders buying his fruits at usual prices.

Consequently, the farmer stopped following the global practices, and went back to his traditional agricultural method in 2009.

“For over the last three years, I no longer have to work as arduously to meet the good practice standards, but am still able to sell the fruits at reasonable prices,” he said.

Similarly, Vo Tan Hung, Dieu’s neighbor, also withdrew from the GlobalGAP model just one year after tending his 4,000-square-meter apple star garden under its standards.

“When my star apples were grown under the GlobalGAP standards, Lo Ren Vinh Kim cooperative only agreed to buy the good fruit, which was only 30 percent of the total production,” said Hung.

“We had to sell the remaining 70 percent to traders at dirt cheap prices.”

Meanwhile in Vinh Long Province, farmers of the Nam Roi My Hoa grapefruit cooperative have also been turning their backs on the GlobalGAP standards.

With only 30 percent of the GlobalGAP grapefruits sold at prices slightly higher than market rates, 23 out of 26 members of the cooperative have gotten rid of the GAP to return to their traditional methods.

The exporters only bought fruits that were large and good-looking, farmers said.

Moreover, the cooperative did not buy all of the members’ products, so they had to bring the fruits to sell in the markets, they added.

Back in 2009, when the cooperative was awarded the GlobalGAP certification, around 600 tons of grapefruits were qualified to be shipped to the US and some European countries.

However, the figures steadily slumped, reaching only 36 tons last year, and to date, only 15 tons.

Nguyen Van Nghia, head of the My Hoa cooperative, said since the GlobalGAP certification of his cooperative expired in September 2010, he is seeking funding assistance to renew the certification.

The renewal fee is around US$7,000, he said.

Meanwhile, according to Doctor Nguyen Hong Thuy from the Tien Giang Department of Science and Technology, a GlobalGAP certification will cost farmers $3,200, while the fee for VietGAP is VND40 million ($2,000) per 20 hectares.

Over the last few years, most of the fruit growing areas in the Mekong Delta were granted the GlobalGAP certification thanks to sponsorship from businesses or local authorities, in a bid to attract farmers.

However, since the GAP certification is only valid for one year, farmers have to reach into their own pockets should they want to renew it for the following years.

Doctor Thuy said the renewal fee is equal to the granting fee.

“Consequently, many farmers have stopped following the GAP since they cannot afford the renewal,” he said.

Coal industry seeks $15b for development by 2020

The coal industry needs investment of about VND317.74 trillion (US$15.13 billion) to fulfil its development targets between now and 2020, said Nguyen Khac Tho, deputy director of the General Department of Energy.

Tho made the announcement at a seminar held yesterday to publicise a master plan for the sector, adopted by Prime Minister Nguyen Tan Dung early last month.

The 2012-15 period alone will require two-thirds of the amount for maintaining, upgrading and expanding production as well as for implementing new investments.

Capital would be raised through sources including ownership capital, loans and the stock market, he said.

Tho explained that the plan was mapped out with the aim to exploit, process and utilise domestic coal reserves efficiently and economically to best serve home demand. It also aimed to gradually reduce coal import ratios and enable selective export.

According to Tho, the industry planned to reach cross-sector merchandised coal yield of 55-58 million tonnes in 2015, 60-65 million tonnes in 2020, and over 75 million tonnes in 2030.

By 2030, as many as 47 new mine projects would be built in the Dong Bac (North East) coal basin. Several mines using underground coal gastification technology and with capacities of 3 million tonnes per year, would be developed in the Red River Delta coal basin.

Twelve additional coal sorting and processing plants would be constructed by this time while peat and coalmines in localities would be expanded.

Infrastructure for production including electricity, roads, railroads, transportation systems and conveyor belts would be upgraded. Nine coal export ports are to be improved and one built in Uong Bi, Hon Gai and Cam Pha districts of northern Quang Ninh Province.

"The country's demand for coal will increase significantly in the coming years," said Energy Department Director Pham Manh Thang.

"The demand on coal power plants is very great."

Thang said the country would have about 46 operational coal power factories by 2020 consuming about 77 million tonnes of coal per year. Of the yearly needed volume, the nation could meet 29 million tonnes itself while having to import 48 million.

"It's clear that we need more solid import sources," he said, adding that the Government had assigned the Viet Nam National Coal-Mineral Industries Corp to seek more foreign suppliers.

It also tasked the ministry to build mechanisms to stimulate private manufacturers to meet demand by investing in mines, associating with foreign partners and importing coal themselves.

Thang said an important thing was to establish reasonable coal import and export prices.

"Price levels must ensure the general economic goals of the country while stimulating investors to do their business.

"This year we have to control the inflation rate at below 10 per cent while continuing to work with the Ministry of Finance to balance our goals," he added.

Total national coal reserve was estimated to be 48.7 billion tonnes at the beginning of last year, with about 7.2 billion tonnes having been mobilised into master plans, according to Tho.

Tho noted that appropriate investment in technology, the environment, labour safety and resource security was needed for a sustainable industry, in addition to boosting international cooperation in exploring, processing and using coal.

Vietnam, Kuwait trade exchange doubles last year

Bilateral trade between Vietnam and Kuwait doubled to US$837 million in 2011 from the previous year, according to the latter's Consulate General in Ho Chi Minh City.

Abdulrazzaq Alkhuleefah, Kuwaiti Acting Consulate General, says in a press release the diplomatic agency issued ahead of Friday's celebration of Kuwait's independence day that trade exchange value between the two countries has steadily increased over years, with the Arab state's export revenue to Vietnam reaching almost $808 million last year.

The value will probably top $1 billion this year, he adds.

Vietnam and Kuwait first began their cooperation in 1976 when the Kuwaiti Fund for Economic Development started providing funds for a number of infrastructure projects in the Southeast Asian country.

The fund has financed 10 projects so far, and it continues to play an important role in forging the mutual relations between the two countries, the diplomat says.

One of the biggest developments the Kuwaiti government has invested in is the Nghi Son Oil Refinery Plant in the central province of Thanh Hoa where it contributes 35.1 percent of the $6.2 billion total funding, Abdulrazzaq points out.

Ha Noi set for more modern shopping

The capital city of Ha Noi plans to introduce nine more shopping and trade-fair centres, according to the city's general plan on development of commercial activities by 2020 and towards to 2030.

The Ha Noi Construction Department said under the plan, Ha Noi would have one international trading centre in the Tay Ho Tay urban area, two international trade fair centres in the My Dinh Commune, Tu Liem District and Dong Anh urban area and also five shopping centres in Gia Lam and Soc Son districts, Chuc Son Town and Hoa Lac and Phu Xuyen urban areas.

The city has 14 trading centres, accounting for 15 per cent of the national total number of trading centres. Those 14 are almost all located in inner districts of the capital.

In the draft of the development plan for commercial activities, Ha Noi will develop a network for markets to improve the quality of current markets in the city.

The city will upgrade key markets with an area of more than 10,000sq.m each to be the central markets of the city. Other markets with an area between 500-10,000sq.m will also be developed as retail markets for farming products and fresh food.

Many supermarkets, food outlets and convenience stores will also be created from markets with a current area of 2,000sq.m or less. A number of wholesale markets for farming products will also be created as part of the plan.

Markets in rural areas will also be upgraded to create shopping hubs and promote commerce for local residents.

Ha Noi also plans to build large wholesale markets for farming products and food with an area of 30ha each and develop centres for wholesale farming products to serve customers nation-wide with modern transaction services.

Deputy chairman of the People's Committee of Ha Noi Vu Hong Khanh said the plan involved programmes and projects to help tackle specific issues regarding developing Ha Noi as a large trading centre in the country and the region. The plan would be a foundation for developing suitable trading centres and markets in the city.

Ha Noi has 411 markets with a number of limitations, such as unsuitable locations, outdated infrastructure, a lack of waste treatment systems and poor safety conditions.

Prospects for Vietnam’s agriculture in 2012

In the time to come, agricultural production will remain a key element in Vietnam’s economic and social development structure.

The Institute of Policy and Strategy and Rural Development (IPSARD) in collaboration with the Vietnam Chamber of Commerce and Industry (VCCI) will organize the Vietnam Agricultural Outlook Conference 2012 in Hanoi on March 6-7 with a focus on animal husbandry and key agricultural products such as rice, coffee and cacao.

Prof. Peter Timmer, one of the world’s leading agricultural economists, says within next 50 years agriculture will play an important role in economic growth, social stability and investment attraction. Therefore, the global economic downturn has increasingly directed a lot of attention from investors to the agricultural sector.

This is a rare opportunity for agricultural growth but there will be challenges arising from fluctuations in the price of agricultural products in the world market. To overcome such challenges, it requires greater efforts to make a breakthrough in the global agricultural development, he says.

Last year, Vietnam experienced a slow economic growth due to high inflation, limited liquidity, trade deficit and business losses. Agriculture was considered a shot in the arm much needed by the national economy with a growth rate of 4 percent and export earnings of US$25 billion (accounting for 22 percent of the country’s total export turnover). Agriculture was also the only sector enjoying an export surplus of US$18 billion in 2011.

The World Economic Forum Annual Meeting 2012 held in Davos, Switzerland in January, praised Vietnam’s agricultural achievements, saying the country has set a typical model of agricultural development for developing countries. Vietnam’s production and export of agricultural products has attracted many major investors in the world. Its agriculture is predicted to develop strongly and sustainably with higher efficiency and quality.

In this context, market analysis and forecasting is very essential since many of Vietnam’s key agricultural products such as rice, coffee and seafood fetch ridiculously low prices and investors find themselves unable to prime the pump in the agricultural processing areas.

If market analysis and forecasting is not improved, Vietnam’s agricultural production and social development will be greatly affected.

To cope with the situation, IPSARD has conducted research into domestic and foreign agricultural products. Since 2007, it has organized its annual conferences on coffee outlook and some other products.

Rice production and animal husbandry play an important role in ensuring national food security and creating jobs for millions of people. Seafood and coffee are leading the agro-forestry-fishery sector in terms of export value.

At the coming conference, experts from Vietnamese and international research organizations and relevant agencies will have an exchange of opinion on information, demand-supply forecasting, pricing and other policies for the development of key agricultural products.

The conference will be an ideal venue for policy-makers, management and policy research institutes, craft associations, representatives from international organizations and businesses operating in the agro-forestry-fishery sector to discuss effective measures to improve the competitiveness of Vietnam’s agricultural products.

Lao bank opens rep. office in Hanoi

Phongsavanh Bank has debuted its representative office in Hanoi, becoming the first Lao bank to operate in Vietnam.

It is the first joint stock bank of Laos which was established by Phongsavanh Group in 2007.

So far, the bank has seven branches and service centres, five new branches under construction, and 12 transaction offices. Its total assets are now 6.5 times higher than in 2007.

Vietnam is the first foreign country to host a Phongsavanh Bank representative office. There are now 50 representative offices of foreign banks in Vietnam.

Coffee exporters dispute fees
 
Many local coffee exporters have opposed the collection of coffee export fees, which come into effect as of October 1.

The Viet Nam Coffee Industry Export Insurance Fund Management Council under the Viet Nam Coffee and Cocoa Association (Vicofa) has come to an agreement to collect exported coffee fees of US$2 per tonne.

Proceeds gathered will be invested back into the industry according to a proportional distribution agreement, with 50 per cent given for replanting, 30 per cent for temporary reserve interest aid, 10 per cent for quality improvement, and 10 per cent for brand and trade promotional activities.

The fund aims to stabilise and promote production and processing, improve coffee quality, restrict risks in coffee exports and support trade promotion activities and market information, the association said.

Most of the fund will be used to support the creation of coffee varieties with high yield and quality, as currently 25 per cent of Viet Nam's coffee plantation areas have not been cultivated to their potential.

Farmers and exporters would benefit from the fund, said Luong Van Tu, Vicofa chairman, adding that the fund would be re-invested into coffee plantations to create stability of the raw material for export processing over the next 5-10 years.

However, Nguyen Anh Tuan, deputy director of the Viet Nam General 1 Import Export Joint Stock Company, said the collection of the fee is for membership of the association while foreign companies that have purchased and exported 50-60 per cent of Viet Nam's coffee output would not have to pay the fee.

Tuan said it was unfair because re-investment into coffee trees with the money from the fund would bring advantages for not only the member companies of the association but also foreign companies.

Representative of the Intimex Company said foreign companies have had advantages in finance, but they were not subject to the fee as domestic companies who have had difficulties with finance must pay the fee. That situation would create more challenges to the domestic coffee exporters.

Pham Ngoc Bang, deputy general director of Dac Man Coffee Joint Stock Company, said the fee was discussed only among companies who were members of the association's executive committee, not all association members.

Regulations for managing the fund were not clear so members have many questions about how the money would be managed, Bang said. Many member companies have not supported using the fund for exporters with losses because exporters could then rely on the fund.

Le Duc Thong, head of Vicofa's supervisory department, said the details on how the fund would be used, who the payers were, and other issues still needed to be further discussed.

"Additionally, all local and foreign coffee exporters in Viet Nam must pay the fee if it is to be fair," Thong said.

The Viet Nam Coffee Corporation and Vicofa have discussed specific regulations on the fund and related issues which would be submitted to the Government in the near future.

Lending rates down as economy shows sign of improving

Commercial banks have begun to cut lending interest rates amid signs of improvement in the economy.

Agribank on Tuesday announced a cut of 1-1.5 per cent in lending rates offered to borrowers across-the-board, establishing rates of between 15.5 per cent and 20 per cent per year.

This followed moves by the Bank for Investment and Development of Viet Nam (BIDV), Vietinbank and Vietcombank, which have all reduced interest rates this month on loans in dong, with commercial lending rates now ranging from 14.5 per cent to 17 per cent per year.

Asia Commercial Bank has also launched a preferential lending programme to exporters with interest rates lowered by 0.5 per cent from normal levels.

"I believe the general level of lending rates will gradually decline in the short term," said Agribank chairman Nguyen Ngoc Bao, noting that the four banks to have already lowered rates represented a combined 55-60 per cent share of the domestic credit market.

He added that the banks were all ranked in "Group 1" – which industry insiders use to refer to the healthiest, safest and most stable credit institutions.

Tai Hui, a researcher at Standard Chartered Bank, told the online newspaper Vietnamplus that inflationary pressures had begun to ease and inflation could fall to one-digit levels by the end of the second quarter. He said much would depend much on the stability of global fuel prices and domestic electricity costs, as well as the strength of the dong.

Economic improvement could create conditions for the State Bank of Viet Nam to loosen monetary policies, he said, predicting that the bank would lower the refinancing rate from 15 per cent to 12 per cent at the end of the second quarter, and to 11 per cent in the third quarter.

Bao said he also expected deposit interest rates to fall in the coming months, noting that banks needed to cut costs and absorb losses before lending rates could fall.

Agribank would concentrate on recovering bad debts among property and consumer borrowers and retrain its focus on lending to agricultural and rural borrowers.

Changes to malpractice insurance

The joint-stock general insurance company AAA has supplemented its medical malpractice insurance policy for doctors working in both public and private hospitals.

The new product covers accidents that occur during treatment and injuries that develop afterward as an indirect result of poor medical care.

Damages resulting from intentional malice, dishonesty and legal violations are not covered under the policy, according to the company's general director Do Thi Kim Lien.

EVN not allowed to sell shares

The State Bank of Viet Nam has rejected Electricity of Viet Nam (EVN)'s proposal to sell its shares in An Binh Commercial Bank to HCM City's Housing Development Bank.

EVN is currently the largest shareholder in An Binh Commercial Bank, owning 25 per cent of the total stake. However, the SVB decided that the sale was not allowed under State regulations for the transferring of equity shares.

Director faces VND50m penalty

The Tra Vinh branch of the State Bank of Viet Nam (SBV) decided on February 9 to impose a fine of VND50 million on Duong My Ha, director of Nam Sanh One Member Co Ltd.

Ha was charged with illegally trading US$100 and would be expected to hand over that amount to the authorities in addition to her fine.

Earlier, the SBV imposed stiff penalties on many enterprises for violating regulations on US dollar trading and illegally listing foreign currency prices.

The highest fine reached VND500 million ($23,810).

Ha Noi to host mining expo

The latest mining technologies, equipment, and services will be on show at the 2012 Mining Viet Nam exhibition to be held in Ha Noi early next month.

To be organised by Indonesia's PT.Pamerindo (a member of Allworld Exhibitions Alliance) and the VCCI Exhibition Service, the event has attracted more than 160 exhibiting companies from 18 countries and territories.

With the application of advanced technologies and equipment that augment recovery efforts becoming a focal point, the exhibition is a timely event to foster interaction between local mining firms and international investors, professionals, experts, machinery distributors, and importers.

Doosan Vina exports cranes to Singapore

Doosan Heavy Industries Viet Nam (Doosan Vina) said today they had exported eight rubber-tired gantry cranes (RTGC) to Singapore, bringing the of total exported RTGC cranes to 20.

The latest batch, delivered to the Port of Singapore Authority (PSA), is the third shipment part of the export contract for 36 of the cranes that was signed between Doosan Vina and PSA, the Korean-backed company said.

However, the company did not announce how much the contract was worth.

Each RTGC weighs 245 tons and is 27 meters in height, 11 meters wide and 25 meters long. They are designed for moving the common 40-tonne containers used in worldwide shipping.

The Chemical Processing Equipment Plant (CPE), a unit of Doosan Vina, shipped seven distillation towers last month to the Refining JG Summit Olefins Corporation in the Philippines.

Four other Doosan Vina factories are also involved in several large-scale projects such as the Mong Duong II Thermal Power Plant in Viet Nam, worth US$1.3 billion and the world's biggest desalination project in Saudi Arabia, worth $1.9 billion.

Based in the central province of Quang Ngai, Doosan Vina aims to reach an export turnover of $200 million this year, which would constitute a $126 million jump from 2011.-

Hanoi to spend $11.3 trillion on industrial sector

The People’s Committee in Hanoi has completed a draft plan for development of the industrial sector until 2020, with a vision outlook till 2030, with main focus and target at turning it into a high technology sector.

Accordingly, the city will spend a total of VND238.757 trillion ($11.3 trillion) during the period 2011-2020 into developing the sector.

Hanoi will focus on developing centres for research, design, manufacturing and building offices for larger production companies.

The target is to increase industrial production by 11.3 per cent during the period 2011-2015; 12.1 per cent during 2016-2020 and 10.2 per cent during 2012-2030.

In related news, Hanoi authorities have asked the Department of Planning and Architecture to report the availability of land for resettlement projects before March 15, so as to speed up projects. It has also asked the Department of Planning and Investment to check the availability of funds for the resettlement projects.

In 2012, the city will need 6,500 resettlement houses but currently has only 1,300 apartments available. The city is implementing 52 resettlement projects and needs 14,102 apartments. 12,097 are expected to be complete during the period 2013-2015.

In addition, Hanoi will buy 3,189 apartments for resettlement of residents, of which 606 apartments are expected to be complete this year and the remaining apartments will be complete within 2013-2015.

Wood firms expect stable consumption in export markets

Local wood-working firms are making efforts to maintain their major export markets and expand to potential ones in the midst of economic difficulties this year.

Nguyen Chien Thang, chairman of the HCMC Handicraft and Wood Industry Association (Hawa), said in a press conference introducing the Vietnam International Furniture & Home Accessories Fair 2012 (Vifa) that orders from importers were not a big headache for local wood firms as most of them have got orders until the second quarter.

However, the biggest problem of the association’s member firms lies in the rising production cost. Most of main materials and production cost have increased by around 11% from the same period last year while the selling price has only risen by 5-7%.

“Firms will have to cut the production costs, create the added value for products through designing, changing product models and marketing strategies to keep their major markets and expand to potential ones,” said Thang.

Huynh Van Hanh, vice chairman of Hawa, said that the export turnover to Japan increased by 27% in the second half of last year and would continue to rise this year as Japan had to reconstruct the country after the serious disaster of tsunami last March. Meanwhile, the consumption did not increase much in the U.S. and even declined by 12% in Europe.

However, China, South Africa and India will be potential markets for local wood firms due to large populations and strong economic growths, according to Hawa.

The wood export turnover reached US$3.9 billion last year, up 14.4% against 2010 and equivalent to 98% of the year’s target. The wood sector only targets to obtain US$4 billion in export turnover this year.

The Vifa 2012 will still take place next month though several economies, especially in Europe, are being affected by the debt crisis and wood products are not basic commodities. Therefore, the organizers hope for the same number of participating companies and visitors as the Vifa 2011.

“International visitors said the quality of fairs in previous years was as good as ones in regional countries, but the scale was quite small. Therefore, we will open an outdoor exhibition covering 1,200 square meters,” Hanh said.

Besides, the organizers will open Factory Visit Tour to help customers visit factories and showrooms of wood producers in Binh Duong, Dong Nai and Long An provinces.

The 5th Vifa 2012 will take place from March 11-14 in HCMC’s District 7 featuring 600 booths of 125 firms. The fair is part of the many furniture fairs of the ASEAN Furniture Industry Council (AFIC) organized in Singapore, Thailand, Malaysia, Indonesia, the Philippines and Myanmar.
 
Big steelmakers still confident of growth

The Vietnam Steel Association (VSA) and major industry players still insist on the growth target of 3-4% this year despite the suggestion from several steelmakers to lower the figure.

At a meeting between six big steel producers and VSA in Hanoi on Wednesday, there was opinion that the growth target of 3-4% is overoptimistic given the current problems of the consumption markets and the tightening policy. Steel consumption kept plunging in the last three years, from 11.7 million tons in 2009 to 11 million tons in 2010 and 9.9 million tons last year.

However, the leading steel firms shared the view that despite the current difficult situation, steel consumption would regain growth momentum in later months of 2012.

Chairman Pham Chi Cuong of VSA told the Daily that steelmakers expected the gross domestic product (GDP) growth target of 6% set by the Government would create opportunities for efficient investment projects, leading to rising demand for essentials goods, including steel.

Moreover, the association’s analysis showed that though the steel consumption volume dropped by 10% in 2011, the total output of the industry only dwindled 1%, meaning enterprises still maintained stable production. The decline was mostly seen in import steel products.

To make life easier for steel makers, management agencies must ensure fair conditions for local steel producers to develop with the foreign-invest ones, said Do Duy Thai, general director of Viet Steel Co.

He noted the current problem of the steel industry does not rest with the locally -invested projects but the foot-dragging foreign direct investment (FDI) projects that occupy a large portion of land sites and seaports. Meanwhile, local enterprises with huge demand for investment expansion are left with few development opportunities.

Promoting steel exports should be another significant outlet for the local industry.

Tran Tuan Duong, general director of Hoa Phat Group, said local exporters should pursue international lawsuits regarding antidumping petitions and should not abandon export markets because of such obstacles. Given the tougher competition in the domestic market, promoting consumption in other markets is necessary, Duong stressed.

In 2011, the association of the U.S. steel pipe manufacturers initiated an anti-dumping and anti-subsidy lawsuit against steel pipe products imported from Vietnam. Several steel enterprises are still pursuing this lawsuit in order to seek opportunities and enjoy low tariff when exporting into this market.
 
Synchronised strategy needed in consumer supply chain  

Close cooperation in providing necessities is essential for the sustainable development of both production and distribution, besides avoiding instability in supply and demand, prices, and quality of goods.

Lately, there has been much fluctuation in the consumer goods market, particularly in food items and agricultural materials, affecting the national consumer price index, noted Tran Nguyen Nam, Deputy Director of the Domestic Market Department. This in turn directly influences standard of living.

Objective factors aside, there exists a very loose connection in the essential goods supply chain, making prices unstable and goods with low quality.

For instance, in the past few years, the fertilizer market is almost always unsteady during the winter-spring rice season even though it is a fact well-known that demand for this product is usually very high at this time of the year.

Despite the announcement of a ceiling price for urea fertilizer by the government, retailers often sell at a higher price of VND1,000-1,500 per kilo (US$0.05-0.07).

This is the result of a weak link between producers and traders, hence unnecessary logistic expenses and difficulties in monitoring retail prices as well as quality of merchandise. It is also an infamous opportunity for fake goods.

Another case is of pork price, which fluctuated a great deal last year. Compared to January, the price in July went 66-88 per cent up in the Northern part and 53-70 per cent up in the Southern part of the country.

Besides, a pig epidemic and high interest rate from the banks, poor information on exporting pork to China, all deeply worried consumers, forcing pork prices up, even though domestic supplies were in abundance.

Van Duc Muoi, president of Vissan Co., stated that since only 15 per cent of pigs raised for meat were brought up in industrial farms, a large amount comes from unidentified origin, inconsistently processed, and of different genes.

This results in very low-quality produce, hardly meeting requirements of clean and safe processed food.

Long-term strategy urgently needed

Saigon Co-op shared its experience in successfully implementing a 4-step supply chain for green-grocery: building a business plan (predicting the market’s supply and identifying number-one products); creating strong links in the supply chain (signing investment and consumer contracts with farmers, guiding members in producing); selecting processing businesses in accordance with the Viet Gap guideline; signing contracts with agricultural cooperatives.

This ensures better positioning for Saigon Co-op in selling merchandise of the highest quality. The main point of this procedure is the warranty of benefits for all three partners (producer – distributor – consumer).
Bui Hanh Thu, Vice President of Saigon Co-op

Basically, a food supply chain consists of producing, processing and distributing to wholesalers and retailers. The biggest problem at the moment is an uneven balance of profits among partners.
Till now, there is still a lack of proper and synchronised policies and regulations, especially long-term strategies for sustainable development of profits between producers and traders.

Truong Tien Dung, president of Saigon Aquatic Products Trading Joint Stock Company, commented that the government should focus their attention on the base of the supply chains with good genetic animals, and policies for breeding grounds instead of focusing on end of those chains, like they are doing right now.

After careful research, Do Van Nam, Chief of the Department of Processing and Trade for Agro-Forestry-Fisheries Products and Salt Production under the Ministry of Agriculture and Rural Development, suggested the following three ideas.

Firstly, profits of both producers and traders should be identified more fully and fairly.

Secondly, the government and related agencies have to raise awareness on the rights and benefits of all partners in the supply chain, especially farmers and processing businesses, making tighter connections.

Finally, as the government plays an important role in orienting and monitoring these supply chains, there should be a long-term strategy for sustainable development.

It is strongly believed that once these suggestions are adopted, problems in supply chains will gradually disappear and they will no longer be considered ‘a pilot model’.
 
New bank proposed amid restructuring

While Vietnam is trying to restructure weak banks, the Ministry of Construction is seeking approval from the State Bank of Vietnam (SBV) to set up a new bank.

The ministry's proposal comes at the behest of the Vietnam Real Estate Association, and would establish the Vietnam Construction Bank.

Deputy Minister of Construction Nguyen Tran Nam said the proposal is appropriate to the country’s current economic circumstances and that it is in line with world trends for construction banks.

The proposed bank is expected to foster the construction of large construction projects and be a source of capital form construction materials, he noted.

He added that the bank would be a good thing for a slowing real estate market.

In late 2011, SBV Governor Nguyen Van Binh had made assurances to focus on restructuring weak banks this year to ensure the liquidity and avoiding bankruptcies.

Their strategy is to continue on their current course of mergers and acquisitions, at least through to 2013. This process is voluntary, but it is expected by SBV officials that there will further bank mergers to remain competitive.

Currently, the total assets held by the entire banking system in Vietnam is estimated to be over VND3,500 trillion (USD167.78 billion). But their entire chartered capital is just VND250 trillion (USD 11.98 billion).

Despite the big disparity in their assets, banks of all kinds have to comply with the same requirement of a minimum chartered capital of VND3 trillion (USD143.81 million), according to SBV regulations.

One anonymous official from the SBV admitted that 13.6% of commercial banks reported poor performance, apparently due to incompetent and inefficient management.

E5 Bio-fuel safety fear rumours quashed

The rumours that the Petrol Vietnam Oil Corporation (PV Oil) would stop supplying E5 bio-petrol has been quashed by company Deputy Director Le Xuan Trinh.

Trinh made the announcement in an official dispatch issued by the company yesterday.

Rumours began circulating that the fuel would be withdrawn from sale when E5 shops managed by the Materials - Petroleum Joint Stock Company (COMECO) were closed.

“Some of the E5 shops owned by COMECO have been closed for maintenance work and check-ups,” Trinh explained, “but they’ve re-opened from February 22nd.”

According to Trinh, PV Oil has supplied E5 fuel since August, 2010. “Although there have been numerous difficulties, the company is still producing the environmentally friendly bio fuel under the State Department for Standards, Metrology and Quality.
 
‘E5 petrol is being sold at over 140 stations nation-wide and the company will develop its distribution channels in the coming time,’ Trinh confirmed.

Responding to rumours that E5 may be among the causes of the recent spate in vehicle fires, PV Oil said there was no scientific basis for them.

The Ministry of Industry and Trade has asked the Government to make the use of ethanol E5 and E10 fuel mixtures compulsory in Ha Noi, Hai Phong, Da Nang, Quang Ngai, Ba Ria-Vung Tau, HCM City, and Can Tho from July 1, 2013, and the entire country by 2015.

PV Oil has also asked the Government to decide on whether E5 should be used throughout the country.