Polish companies look to expand investment in VN

Poland hopes to expand bilateral co-operation with Viet Nam in several areas, especially the provision of preferential export credit, Polish Deputy Economic Minister Rafael Baniak has said.

Speaking at a business conference held in Ha Noi last Friday, Baniak said Vietnamese businesses which purchased industrial machinery, pharmaceutical products and services from Poland might qualify for the export credit support through Vietnamese banks.

The Polish state bank Gospodarstwa Krajowego Bank had already signed an agreement with Viet Nam's Sacombank to provide this service, he said.

While encouraging Vietnamese firms to explore investment opportunities in Poland, where they can take advantage of stable politics, a high economic growth rate and skilled personnel resources, the deputy minister also outlined energy, shipbuilding, aviation, food and construction machinery as promising sectors for future bilateral co-operation.

Over the past years the Vietnamese Government had made increasing efforts to speed up administrative reforms to better facilitate foreign investors, including those from Poland, said Deputy Minister of Industry and Trade Le Danh Vinh.

As of August this year, Polish enterprises had pumped approximately US$100 million into nine projects in Viet Nam. Two-way trade, meanwhile, grew by 18 per cent last year, reaching $620 million in 2010 - $350 million of which came form Vietnamese exports.

Viet Nam would help Polish enterprises further access potential ASEAN markets with a total population of 600 million, while Poland would provide a bridge for Vietnamese goods to the vast markets in the EU, Vinh said.

Co-organised by the Viet Nam Chamber of Commerce and Industry and the Polish Embassy in Ha Noi, the conference saw the participation of over 30 Polish businesses in the food, machinery, mineral exploitation, cosmetics and pharmaceutical product sectors.

Polish Economic Minister Beata Stelmach said the number of Polish enterprises participating was three times higher than that at last year's business forum, reflecting increasing interest in trade and investment opportunities in Viet Nam.

Foreign buyers dominate coffee industry
 
The market for Viet Nam's unprocessed coffee beans could become dominated by foreign companies, according to leading exporters who spoke at a recent meeting held in HCM City.

Foreigners bought 50 per cent of raw coffee from the 2010 and 2011 crops, according to participants.

They took Dak Lak Province which is the country's biggest coffee producers as an example. They said local coffee farmer harvested 400,000 tonnes in the 2010-11 crop, 180,000 tonnes of which were bought by foreign companies for their export plans.

The situation would likely be more serious in the next crop since foreign companies often double the volume they planned to buy every year. Consequently, domestic enterprises now must face a serious shortage of raw coffee for export, they said.

Do Quyet, deputy general director of Dak Lak September 2nd Import-Export Company, said his company purchased 100,000 tonnes of coffee in the last crop, but it expected to buy only 50,000 or 60,000 tonnes in this crop.

A representative of the Tay Nguyen Coffee Investment, Import and Export Joint Stock Company also revealed that the company had to lower its export target from 140,000 tonnes of coffee to 100,000 tonnes this year because of a shortage of raw material.

The meeting heard many reasons raised by coffee exporters to explain foreign companies'market domination.

One of foreign companies'advantages was their strong financial potential. They could get access to low interest loans while they were able to directly sell coffee products on the London Trading Floor, which can enable them to offer attractive prices for local farmers to buy raw coffee, they said.

Worse still, inconsistent legal positions also created opportunity for foreign companies to conquer the domestic raw material coffee market.

Nguyen Toan Thang, an official of the Dak Lak Planning and Investment Department, said the Trade Law and Decree No 23/2007/ND-CP did not allow foreign companies to directly buy commodities from producers. Meanwhile, the Investment Law did not ban this practice.

Consequently, many foreign companies had set up networks to directly purchase raw material coffee from local farmers, he said.

Branches of Australia-based Neumann Grouppe and American-base Olam International Ltd purchased 129.28 tonnes of unprocessed coffee in 2009 and the figure rose to 226.6 tonnes in 2010.

Some foreign companies even established companies under Vietnamese names so that the latter could directly buy raw material coffee.

Coffee exporters said that the presence of foreign companies on the domestic raw material coffee market might bring some benefits, one of which was to create a competitive environment, forcing domestic companies to improve their competitiveness.

The competition would also help farmers take advantage of prices, they said.

They however were worried about the possibility that the market would be dominated by foreign companies.

Too high lending interest rates together with poor ability to gain access to capital sources made domestic companies less competitive with foreigns companies so the market would easily be controlled by foreigns in the future, said Tran Hieu, vice chairman of the Dak Lak People's Committee.

Le Xuan Loi, director of the An Thai Coffee Investment and Development Companies, said when foreigners monopolised the market they would determine market prices. At that time, the domestic coffee production industry would meet many difficulties.

In anticipation of this possibility, Hieu said, the Dak Lak People's Committee had petitioned the Government and ministries to develop policies to support domestic coffee companies.

The support policies would focus on providing credit for companies to improve their capital ability, encourage coffee enterprises to invest in processing technology in order to increase the added value of domestic products.

Training in management and international transaction skills would also be helpful, Hieu said.

Phu Yen Province aims to attract large-scale projects
 
South central Phu Yen Province has announced that it is making considerable efforts in managing large-scale projects in order to boost the local economy.

"During previous years, while Phu Yen managed to attract many projects to help it escape poverty, most were too small to significantly grow the economy," said Deputy Chairman of the provincial People's Committee Le Van Truc.

According to Truc, the province plans to develop three specific projects, including the Nam Phu Yen (South Phu Yen) Economic Zone, one part of the South Phu Yen - North Khanh Hoa regional Zone.

The Vung Ro Refinery, a US$1.7 billion foreign-invested project, and a provincial tourism complex, were both scheduled for development next year, Truc confirmed.

To attract additional investment, the province is determined to significantly improve infrastructure, reform administration and train human resources.

The province has already upgraded transportation facilities by constructing roads leading to the sea and economic zones.

To date, Phu Yen has attracted 258 projects, 221 of which are domestic-invested and 37 foreign-invested.

Around 90 domestic projects and 18 foreign projects have been put into operation.

The costal province shares borders with Binh Dinh, Khanh Hoa, Dak Lak and Gia Lai provinces.

The province, blessed with diverse resources, has done much to invest in refineries, petrochemistry, seafood processing, technology and tourism.

Insurance premiums rise

The insurance industry reported premiums of more than VND23 trillion (US$1.1 billion) in the first eight months, according to the Ministry of Finance's Insurance and Supervision Department.

The non-life sector accounted for VND13.54 trillion ($646.6 million), a 26.6 per cent rise year-on-year. Life insurance premiums were up 15 per cent.

In July, their respective growth rates were 21 per cent and 16 per cent.

Life insurance companies sold 12 per cent more policies year-on-year.

In the non-life sector, vehicle insurance accounted for the largest share of VND4 trillion ($192.3 million), or 31 per cent. Property and damage insurance accounted for 26 per cent, and health and accident insurance for 13 per cent.

Non-life insurers paid almost VND4.7 trillion ($226 million) in claims settlements.

Phung Dac Loc, general secretary of the Viet Nam Insurers Association, says development of insurance-related trades like brokerage, agency, insurance risk assessment, insurance inspection, and investigation will help the industry grow.

"Insurance companies will be able to outsource these activities and focus on their core business.

"If insurance detectives establish themselves, it will help prevent a lot of insurance fraud."

Meanwhile, the Ministry of Finance recently issued a warning about unfair competition between insurance companies, the increase in fraud, and tortuous settlement procedures as some of the problems that hindered the industry's growth.

Prices to rise over Tet

Prices of many goods and services may well be high during Tet (the Lunar New Year) in late January 2012 since businesses still pay high interest rates on bank loans.

The minimum rates may have fallen to 17-19 per cent, but only for companies operating in priority areas like exports, agriculture and fishing. Others still have to pay 21 – 21.5 per cent.

According to Phan Van Thien, deputy general director of Bien Hoa Confectionery Company, with interest rates at more than 20 per cent he expects the prices of his company's products to rise by 10 to 15 per cent during Tet.

Consumption may rise by only 15 per cent against the traditional 25 to 30 per cent, he says.

But interest rate will not go down easily if inflation remains high.

At a seminar on Viet Nam's economy in 2011 and its prospects for 2012 organised by the Economic Committee of the National Assembly and the Viet Nam Institute of Social Sciences in HCM City last week, former trade minister Truong Dinh Tuyen said interest rates could be lowered once inflation falls to single digits.

Meanwhile, the Government should divert resources from State-owned enterprises to the private sector since the former were performing poorly.

Dr Nguyen Duc Thanh, director of the Viet Nam National University's Viet Nam Centre for Economic and Policy Research, said if interest rates could not be cut, businesses should be supported by cutting income tax by 3 per cent to 22 per cent.

HCMC to spend $267m on goods for Tet holiday
 
Under the HCM City's price stabilisation programme, goods worth VND5.56 trillion (US$267.6 million) will be stocked for sales during Tet (the Lunar New Year) early next year, the Department of Industry and Trade has said.

As many as 20 businesses signed up for the programme last April to supply nine essential items, including rice, sugar, cooking oil, poultry meat and eggs, processed food, fruits and vegetables, and fisheries products.

The department said after a meeting with the HCM City Food and Foodstuff Suppliers' Association on Thursday to discuss plans for Tet that they would continue to be sold at a minimum of 10 per cent less than market prices for a around three months.

The volume of goods would be much higher this time than in past programmes, by up to two or three times in some cases.

Besides the 22 companies signing up for the programme, who will only supply 30 to 40 per cent of the total goods, the city's three wholesale markets will supply 40 to 50 per cent, while other businesses will supply the rest.

Le Ngoc Dao, deputy director of the city Department of Industry and Trade, said businesses joining the programme had prepared well to meet the demand of customers in HCM City and neighbouring provinces.

The city has set up 2,527 stalls selling goods under the programme, 359 more than last year. Tet falls on January 23 of next year.

CPI rise slows to lowest level this year, industrial output up

Viet Nam's consumer price index (CPI) in September rose by 0.82 per cent against last month – the lowest single monthly increase since the beginning of the year – and 22.41 per cent over the same period in 2010.

The figure helped push the CPI in the first nine month of the year to 16.63 per cent, and up 18.16 per cent compared to the corresponding time last year, the General Statistics Office (GSO) reported on Saturday.

According to Nguyen Duc Thang, director of the GSO's Pricing Statistics Department, the national September CPI was still higher than most years of the past 15 years and just lower than September of 2010 and 1998, when the economy was experiencing a difficult time.

"This shows the rising CPI trend has yet to stop; it is just decelerating," Thang said.

Nine out of 11 commodity groups recorded increases, ranging from 0.28 to 8.62 per cent, of which education services saw the sharpest hike with 8.62 per cent as a result of rising educational costs at the beginning of the new school year.

Commodities with increases of less than 1 per cent included catering services (0.92 per cent), clothing (0.9 per cent), transport (0.24 per cent) and post and telecommunications (0.07 per cent).

During the month, the gold price soared 13.14 per cent against last month, helping increase the price over the past nine months by 30.48 per cent over December 2010, a year-on-year increase of 61.26 per cent.

The US dollar experienced a month-on-month rise of 0.8 per cent, pushing up the price over the past nine months by 1.12 per cent compared to the end of 2010 and by 7.78 per cent over the corresponding time last year.

Thang said it would be very difficult to curb the inflation rate to between 17-18 per cent this year, as the remaining room for the increase during the next three months (the busiest months of the year) was just 1.3 per cent.

The GSO also reported that the country's Index of Industrial Production (IIP) rose by 2.1 per cent in September over last month, helping raise the IIP during the past nine months of this year to 7.8 per cent over the same period last year.

The slowing growth of industrial production IIP since August reflects the negative impacts of high inflation and lending interest rates, and rising input costs, which have forced companies to narrow their business operations, according to the GSO.

Some main industrial products recorded decreases in the first nine months compared to the same period last year, including crude oil and natural gas (0.4 per cent), pharmaceuticals (1.4 per cent), electrical wire and cable (23.1 per cent) and shipbuilding (26.7 per cent).

However, production of some products maintained good growth rates, such as pottery and porcelain, except construction pottery (71.8 per cent), sugar (43.2 per cent), fertiliser (15.8 per cent), yarn and cloth (13.5 per cent), footwear (13.3 per cent), cement (10.6 per cent) and electricity (9.8 per cent).

According to GSO experts, the hurdles to restoring a high growth rate will continue to pose a problem, due to a shrinking consumption market and large stockpiles of products in the industrial sector.

Seafood exporters try to manage risks
 
The Viet Nam Association of Seafood Exporters and Producers (VASEP) in collaboration with the Training and Trade Promotion Centre and Jardine LIoyd Thompson Co yesterday held a seminar to help seafood exporters identify and manage risks to improve their global competitiveness.

Truong Dinh Hoe, general secretary of VASEP, said:"Viet Nam is integrating internationally and developing export trade. However, while the business environment has expanded, risks also appear more diversified and difficult to control."

Exporters are especially concerned with risk management issues, given the rapid growth of Viet Nam's economy.

Risk management can reduce financial losses and improve competitive ability by ensuring company credibility.

Bui Hai Tri, general manager of Jardine LIoyd Thompson Asia, said risks could occur in the transporting of goods and in contracts as well as loans and liabilities for export goods.

Businesses should have reliable risk and insurance advisers or providers that can help them understand the potential risks and raise their awareness about the need for protection of their rights.

For risks in transporting goods, exporters should sign contracts with prestigious and reliable transporting companies.

"The terms and conditions of transport contracts should be discussed carefully and in the most detailed way to make sure that goods are fully insured in case of damages," he said.

For credit risks, Tri said the Letter of Credit payments were common among Vietnamese exporters.

But they have potential risks. For example, some foreign importers may be using unreliable banks to open an L/C or some European banks have bad debts and have become bankrupt.

Many Vietnamese exporters have shifted their attention to Africa, a potential market for Vietnamese seafood.

But Tri said they should be cautious because the credit risks among transactions in Afria were high.

Industries that need to participate in trade credit insurance include seafood, rice, coffee, rubber, vegetable, pepper, cashews, tea and cassava, textiles and garments, leather and footwear, and the wood and plastic industry.

Exporters should also adhere to import regulations and international certificates in seafood processing and farming to avoid having their goods rejected.

Insurance played a major role in import and export activities, especially product liability insurance, cargo transportation insurance and credit insurance, Tri said.

These should be required for all goods purchases and sales contracts signed with partners in the US, Japan and the EU, he added.

Land deal searches to halt money laundering

The incidence of money laundering through land transactions needed to be made more public, said Pham Sy Liem, vice president of the Viet Nam Construction Association.

Liem suggested agencies launch a website to connect all real estate companies and trading floors, with daily transactions made public and available on the net.

Liem made his comments on Circular 12 on the implementation of the Government's Decree 74 on real estate business activities.

He said some suspicious activities were occurring. For instance, in Ha Noi many villas and houses were left unused. Authorities needed to track down the owners and ask some questions. If no transparent information was found, it may indicate they were used for money laundering.

Certainly there were inconsistent transactions. But how to determine that the buying price was not consistent with market prices and which authorised agencies would be involved in evaluating the transaction prices remained a big question.

Some countries that had fair regulations could advise agencies to counter tax evasion and combat laundering.

Specifically, all transactions should be reported to local authorities. If the selling price was too low, the authorised agencies would have the right to purchase the property, which would mean a loss to the seller. This would prevent sellers from setting an unreasonably low price.

In addition, real estate trading floors or real estate companies also had their separate interests, so they may not strictly comply with the reporting requirements. Therefore, authorities must actively collect information.

It was difficult to detech money laundering, Liem said. An individual could buy around 5-7 real estate properties at the same time. Authorised agencies had to investigate to find out whether the finance was coming from illegal business activities.

"We can't fight money laundering if we just sit still and wait for their reports," said Liem.

Weak financial capacity puts developers at risk

The Vietnamese real estate market is currently facing difficulties due to tightened credit policies, weakening financial capacity and management, according to deputy head of the Construction Ministry's Housing Management and Real Estate Market Department Vu Xuan Thien.

Thien said that the country's financial system, used in relation to the property market and based mainly on bank credits and money mobilised from private individuals, remained largely uncompleted.

"This is one of the reasons why people don't trust the idle market," he said, adding that businesses needed to develop efficient financial resources to catch up with investment opportunities in accordance with housing demand.

Phan Thanh Mai, general secretary of the Viet Nam Real Estate Association (VNREA), said that while Vietnamese investors faced outstanding loans, finance capacity was one of the market's most crucial factors.

VNREA statistics revealed a property sector credit balance of VND245 trillion (US$11.8 billion), accounting for 10 per cent of the total figure.

At present, the loan balance in Ha Noi was 16 per cent while in HCM City it was 47 per cent, of which 8 to 12 per cent was made up of bad debts.

Audit reports last year revealed that 56 per cent of assets belonging to 52 real estate enterprises listed on the stock exchange were made up of bank loans, 34 per cent being short-term and 22 per cent long-term.

While the deadline for commercial banks to lower loan balances to 16 per cent was earmarked for the end of this year, the ratio at banks, especially small ones, accounted for 40 to 50 per cent of total numbers.

MoC figures found that most real estate businesses were small-scaled, registered capital ranging from VND10 to 50 billion ($480,000-2.4 million), 11 times higher than those with more than VND500 billion ($24 million).

Deputy Minister of Construction Nguyen Tran Nam said that charter capital needed to establish a property business came to VND6 billion ($288,000) while investment required for property projects could reach in to hundreds of billions of dong.

Nguyen Ngoc Bao, chairman of the Bank for Agriculture and Rural Development's management board, said that its outstanding loan ratio was more than 6 per cent, due to bad debts related to the real estate sectors in Ha Noi and HCM City. The ratio in terms of the agricultural sector was less than 2 per cent.

The Asian Development Bank, in its Asian Development Outlook Update for 2011, said that Viet Nam's GDP growth this year could reach around 5.8 per cent while annual inflation would hit 18.7 per cent.

Tightened credit policies, higher interest rates and decreasing purchasing power have forced real estate developers to lower their prices in order to reclaim investments.

Deputy General Director of the advisory service at accounting giant Ernst &Young Hoang Duc Hung said that businesses have been weak in their financial management, having failed to evaluate risk factors related to projects.

Hung said that real estate developers had not considered analysing project effectiveness and quality for attracting investors and easily accessing bank loans. No plans had been prepared in response to fluctuations in business activities, exposing firms to risks related to economic changes.

"Proper financial planning would play a vital role in limiting risks," he added.

The company's survey showed that 73 per cent of real estate developers which owned failed real estate projects, had difficulties in evaluating risks while more than half of high-ranking leaders raised concerns that their business would be affected by certain large projects.

Experts said that loosening property credit for low-income and social housing projects would be a useful solution to the situation.

Shipmaker delivers container vessel

The Nam Trieu Shipbuilding Industry Corporation handed over the 260-TEU (twenty-foot equivalent unit) Nasico Ocean container ship to Nam Trieu Shipping Company Ltd during a ceremony in the northern port city of Hai Phong yesterday.

The ship is 103m long, 15m wide and almost 8m high and has a top speed of 14 nautical miles per hour.

The ship was designed with double hulls, preventing water from infiltrating the ship's cargo hold.

Meeting to showcase Taiwanese goods

The Viet Nam Chamber of Commerce and Industry in co-operation with the Taiwan External Trade Development Council will hold a meeting between Taiwanese and Vietnamese enterprises on September 29 at Ha Noi's Grand Plaza.

The delegation of nearly 70 top Taiwanese enterprises will be led by Wayne W Wu, deputy chairman of the council's board of directors.

Goods in security equipment, lighting equipment, computers, telecommunications devices and industrial sectors will be displayed on the sidelines of the event.

French companies eye telecommunications

Eight French enterprises in the telecommunications industry will finish a two-day working visit in Ha Noi today to further boost economic and trade co-operation between the two countries, especially in the fields of information technology and telecommunications.

The visit is organised by UBIFRANCE, the French Agency for International Business Development.

Pipeline Co completes maintenance early

The Nam Con Son Pipeline Company announced on Wednesday that maintenance work on its pipeline was completed, more than three days ahead of schedule.

The Nam Con Son pipeline carries a maximum of 21 million cubic metres of gas a day, feeding thermo-power plants at the Nhon Trach and Phu My Gas-Power-Fertiliser Centre, which are responsible for around a third of the national power output. Work was scheduled to halt from September 15 to September 24 for the maintenance to be carried out.

Maintenance work must be carried out on the pipeline every five years.

CapitaLand completes first project

Singapore real estate developer CapitaLand has completed its first project in Viet Nam, The Vista residential apartments in HCM City's District 2, and handed over the keys to buyers.

Yip Hoong Mun, deputy general director of CapitaLand Vietnam, said 75 per cent of the 750 units were sold.

The US$200 million project comprises five towers and has a shopping mall, office space, 100 serviced apartments, and facilities like swimming pools, tennis courts and a gym.

Capital to get high-rise housing

The People's Committee of Ha Noi has agreed to build a high-rise housing complex on Hoang Mai District's Dinh Cong Street.

The project, which will cost VND927 billion (US$44.6 million), will cover an area of 13,461sq.m. The project's investors are VNF1 Distribution and Retail Joint Stock Company and HUD1 Investment and Construction Joint Stock Company. Construction is scheduled to begin late this year and the building should open by late 2015.

Construction of park to begin

The Nhan Chinh Park, which includes a 80,000ha equable lake, is scheduled to start construction by the end of this year, according to a meeting between the People's Committee of Ha Noi, project owner JSC Vina Megastar Group and other relevant bodies.

The project, with a total investment capital of nearly VND2.6 trillion (US$124.8 million), covers an area of 132,356sq.m in Thanh Xuan District's Nhan Chinh precinct and Cau Giay District's Trung Hoa precinct. The park will include areas for entertainment, trade, services and gardens.

Hang Da trade centre opens

Hang Da trade centre, known as Hang Da Galleria, officially opened yesterday in Ha Noi.

Located in the city's downtown area, the five-storey Hang Da market covers an area of 3,700sq.m with 8,349sq.m of retail space.

Five-year bonds go begging at auction

Two tranches of Government bonds with three- and five-year maturities, worth VND1 trillion (US$48.3 million) each, were auctioned on Thursday, with only VND900 billion ($43.5 million) worth of three-year bonds and VND350 billion ($16.9 million) of five-year bonds finding buyers.

Three-year bonds sold at a yield of 12.05 per cent while five-year bonds will pay 12.1 per cent. These yields are slightly below the previous auction's average of 12.14 per cent.

T+1 settlements to end for negotiated trades

The State Securities Commission announced on Wednesday that one-day (T+1) settlement time for negotiated trades at least 100,000 shares or fund certificates would be abolished when the HCM Stock Exchange extends its trading hours in December 2012.

PetroVietnam subsidiary sells stake in investment

PetroVietnam-Nghe An Construction Co (PVA) will sell a 25-per-cent stake in PetroVietnam VIP Investment Co (VIP) to Viet Nam Investment Partners Inc. PVA's board of directors has been appointed to negotiate the transfer price.

PVA previously sold a 25-per-cent stake it held in VIP to Viet Nam Investment Partners for VND28,000 per share.

Technical Services branch posts profits

PetroVietnam Technical Services Corp (PVS) earned VND17.45 trillion (US$843 million) in the first eight months of the year, representing 83 per cent of its target for the entire year.
The company posted a profit of VND665 billion ($32.1 million) of the period, representing 72.3 per cent of the year's target, and has plans to add VND2 trillion ($96.6 million) to its current charter capital of nearly VND3 trillion ($144.9 million).

Power company estimates loss of $3 million

Ninh Binh Thermal Power Co (NBP) has projected that it will post a loss of VND64.4 billion (US$3 million) this year and that no dividends will be paid.

NBP posted a loss of VND1.7 billion ($82,000) in the second quarter and will launch a new project in the fourth quarter.

Fund to divest shares in construction firm Becamex

The Dragon Capital Viet Nam Fund has registered to sell 5 million shares in construction firm Becamex (IJC) during the two-month period between September 26 and November 25. After the divestment, Dragon Capital fund will hold only about 11 million IJC shares, equal to a 4-per-cent stake in the company. IJC rose to its ceiling price yesterday of VND12,300 per share.

Seafood exporter plans stock split, dividends

Seafood exporter Cuu Long An Giang (ACL) will pay a 25-per-cent cash dividend on November 11. Shareholders will also receive an opportunity to buy bonus shares at a ratio of 10:6.5. The ex-date for participation has been set for October 17.

Foreign invested enterprise production grows
 
Foreign invested enterprises (FIEs) in the two major cities have seen a significant growth in industrial production in the first nine months of the year, despite both cities facing sluggish industrial production.

According to Ha Noi's Department of Industry and Trade, during the first nine months, FIE industrial production values have attained a year-on-year growth of 16.4 per cent in comparison with the average figure for the nation of 12.7 per cent.

Although facing many difficulties, several FIEs still grew significantly, such as YAMAHA Motor Viet Nam, Machino Auto-Part Co Ltd, Canon Viet Nam, GM Viet Nam Motors and INAX Viet Nam, the department said.

Meanwhile, Ha Noi experiences sluggish industrial production growth of 3.9 per cent this month in comparison with the previous month.

In the first nine months of the year, the figure is estimated to have increased 12.7 per cent compared with the same period last year. Of this, State-owned enterprises grew 7.5 per cent, the private sector was up 11.2 per cent, and foreign direct invested enterprises rose 16.4 per cent.

Trinh Thi Ngan, head of the Industrial Management Division under the department, said inflation was blamed for a reduction in domestic consumption which, in turn, impacted adversely on domestic investment motivation.

She said many producers were facing difficulties due to enormous stockpiles, costly input materials and high interest rates, while many businesses were unable to access bank loans.

In September, Ha Noi's Index of Industry Products (IIP) rises by 3.6 per cent compared with the same period last year.

In the first nine months of 2011, the index is estimated to have climbed 7.98 per cent. Of this, mining rises 23.02 per cent, the processing industry is up 7.93 per cent; water, electricity, gas production and distribution increase 8.17 per cent.

Ha Noi's industrial production is predicted to surge 12.5 per cent for 2011.

FIE industrial production in HCM city rises 14 per cent in the first nine months of 2011, compared to the city's total industrial production growth of 12.3 per cent.

However, the city's State-owned enterprise figure grows only 3.9 per cent.

In September alone, the country's largest city's industrial production is estimated to reach VND66.523 trillion (US$3.2 billion), an increase of 2.1 per cent compared with August.

Of 27 industries, about 20 industries see growth, including leather shoes, textile/garments, construction materials, electrical machinery and appliances and furniture.

The city's industrial production is forecast to increase 12.2 per cent for the entire year.

Experts said that to fulfil the 2011 production plan, set at the beginning of the year, manufacturers of both cities ought to cut costs by minimising expenses.

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