World Bank purchases An Binh Bank bonds

The International Finance Corporation, the private sector arm of the World Bank, has invested US$40.5 million in Viet Nam's An Binh Bank.

It has bought convertible bonds worth VND480 billion ($24 million) and regular bonds worth VND312 billion.

"IFC's investment in the current unfavourable market conditions provides much needed long-term capital for An Binh Bank to pursue its portfolio growth and implement its capital increase plan in 2013," Vu Van Tien, the bank's chairman, said.

"The investment reinforces the capital position of An Binh Bank and supports the bank's efforts to strengthen its products and services with a focus on lending to small and mid-sized enterprises."

The IFC will also advise the bank on issues like corporate governance and energy-efficiency financing.

An agreement signed by the two sides last June envisages helping the bank design and implement a strategy to develop into a specialised bank serving small and mid-sized firms, which remain under-served in Viet Nam.

"This investment demonstrates our commitment to the development of Viet Nam's banking sector," Karin Finkelston, the IFC's director for East Asia and the Pacific, said.

In 2008 Malaysia's Maybank picked up a 15 per cent stake in An Binh Bank and then increased it to 20 per cent in 2009.

Last December it bought convertible bonds worth VND120 billion ($6 million) and regular bonds worth VND78 billion to maintain its 20 per cent stake in An Binh Bank.

Short supply to benefit rubber industry

The national rubber industry is upbeat about export prospects in coming years, but experts are calling for a strategy to reduce over-reliance on a single market in the long run.

The Viet Nam Rubber Association (VRA) said total export turnover last year reached US$2.3 billion, surpassing the set target by $800 million.

Although rubber exports last year increased by only 5.7 per cent in volume, reaching 750,000 tonnes, it rose by roughly 90 per cent in value, according to the Ministry of Agriculture and Rural Development.

The country's total rubber output this year is estimated to reach about 780,000 tonnes, an increase of 30,000 tonnes over 2010, for a turnover of between $2.5 and $2.7 billion.

Last year saw latex prices soar dramatically, reaching $2,820 per tonne, a 230 per cent surge over 2009. The hike in export prices benefited many local rubber exporters, the VRA said.

The Tay Ninh Rubber Company, for instance, earned revenues of over VND806 billion ($40.3 million), with pre-tax profits of VND292 billion ($14.6 million), surpassing its target by 152 per cent.

Meanwhile, the Phuoc Hoa Rubber Company posted revenues of nearly VND2 trillion ($99.1 million), 90 per cent more than its annual target; and a 75 per cent increase in post-tax profits at VND471 billion ($23.5 million).

Experts attribute the increasing demand for rubber and higher prices to the global economic recovery, which has manufacturers of many products including tyres buying more of the raw material.

However, experts say that the supply of rubber will fall short of demand until at least the end of February this year since many large plantations in Thailand, Indonesia and Viet Nam are now in their low production season.

Current reserves maintained by China, a major consumer, are estimated at only 58,675 tonnes, a drop of 55 per cent compared to the same period last year.

China is Viet Nam's leading importer of latex, accounting for 70 per cent of its rubber export revenues.

But rubber exports are overly reliant now on China's import policies because large quantities are exported to the neighbouring country via border-trade or unofficial channels, said Tran Thi Thuy Hoa, general secretary of the VRA.

Hoa urged rubber businesses to increase the product quality and look for more markets instead of depending too much on the Chinese market.

Businesses should also export rubber to China via official channels, he said.

Of the total rubber cultivation area of 678,000 ha, 65 per cent has given latex so far, according to the VRA.

The high economic value of latex has attracted investments from many businesses in many localities.

The Sai Gon Construction Trading Company has developed a project to cultivate rubber on 20,000ha in central Quang Tri Province's Huong Hoa District. It aims to plant the trees on 1,500ha within this year.

The central province of Quang Binh has 13,000ha under rubber cultivation and plans to increase the figure to 26,000ha by 2015.

Experts have said that the expected increase in rubber output until 2020 would still be insufficient to meet demand, and the industry is expected to post higher earnings as a result.

Viet Nam, Thailand and Indonesia are among the major suppliers of latex to the international market.

US equity group invests in mine project

US-based private equity group Mount Kellett Capital Management LP will invest US$100 million in Masan Resources, an affiliate of HCM City-listed conglomerate Masan Group (MSN), the group announced yesterday.

Mount Kellett co-founder Jason Maynard said, "We have invested on the expectation that Masan Resources will ultimately become the leading resources platform in Viet Nam and Indochina."

Masan Resources currently holds 100-per-cent ownership of the Nui Phao Mine. With approximately 55.4 million metric tonnes of proven and probable reserves of tungsten, fluorspar, bismuth and copper, the mine was expected to begin operations in January of next year and, once fully operational, generate over $300 million in revenues per year.

Upon completion of the current deal, Mount Kellett would hold a 20-per-cent stake in Masan Resources, while Masan Group would retain 64 per cent and Tiberon Minerals Pte Ltd 16 per cent. Masan Group has a call option to buy Tiberon's stakes over the next three years for approximately $60-90 million.

Masan Group also has obtained an eight-year senior-secured lending facility with the Viet Nam Development Bank worth $120 million, significantly de-risking its position in the Nui Phao Mine. Full financial closure was expected by the end of the first quarter, with remaining funding to come from domestic banks and financial institutions. Total investment in the mine was expected to reach $440 million, of which $155 million has already been invested.

JP Morgan is serving as sole advisor to Masan Group on the Mount Kellett transaction.

Bank, card firms join in merchant network

The Ho Chi Minh City-based Mekong Delta Housing Development Joint Stock Bank (MHB)and two card services firms, Smartlink and VNBC, have linked up to a merchant network that accepts all kinds of plastic.

The network is operated by 20 commercial banks including all the giant state-owned ones like Vietcombank, Agribank, VietinBank, BIDV, and Eximbank, and has 131 merchants in the city alone.

Holders of MHB Card, a debit card issued by the bank, can now use it at member hotels, restaurants, and supermarkets nationwide including Big C, Co.op Mart, Maximart, Metro, Citimart, and others.

Telephone smoothens Tet shopping

Ho Chi Minh City supermarkets have expanded their telephone shopping and home delivery services to make it easier for people to do their Tet shopping.

The phone-shopping service is available between 7 am to 10 pm to customers ordering goods worth more than VND200,000. Delivery will be made by motorbike to those living within five kilometers and by truck to those further away.

Following the stockpiling of goods at subsidized prices under a city program, demand has shot up, placing a huge burden on supermarket staff and also inconveniencing shoppers.

Tran, a shopper at Co.op mart Nguyen Dinh Chieu, told Tuoi Tre that telephone shopping and home delivery are relieving the stress of waiting and carrying the goods back home.

After a customer calls and places the order, supermarket staff collect the required items and send it to the buyer’s house.

Coop Mart has delivered goods to 14,200 houses this month.

The French-owned Big C supermarket chain has increased it delivery staff by 20 percent to meet the demand. It delivers goods worth a minimum of VND500,000 to customers living up to six kilometers from an outlet. It does not deliver frozen or fresh vegetables, seafood, or meat.

Co.op Mart, estimated to rake in around VND70 billion daily, has employed more temporary cashiers and installed more card readers to cope with the rush.

It has 30-35 counters at each of its outlets, five of which are reserved for VIP customers, elderly people, and pregnant women.

Big C has 50-80 percent more mobile counters and 30 percent more cashiers.

The number of staff helping shoppers package goods has also increased.

Customers who go supermarkets can also choose to have the goods delivered at home.

Online shopping portals like http://www.vatgia.com, http://www.enbac.com, http://www.5giay.vn, http://www.123mua.com.vn, are serving more customers than usual.

Just spending some minutes surfing the Internet and you will find Tet shopping not as so challenging, said Hoang Thi Dung, a office employee working in a company in Hanoi, said.

But most of us choose to pay by cash upon delivery, Dung said, adding that online payment pose many risks for those who have an online accounts and know about network security well.

International agency to buy Vietnamese gamma scanners

The International Atomic Energy Agency has placed orders for six gamma computed tomography (CT) scanning equipment from the Centre for Applications of Nuclear Technology in Industry in Da Lat.

Nguyen Huu Quang, the director of the centre, said the Vienna, Austria-based IAEA placed the order after evaluating similar equipment made in South Korea, Malaysia, and Viet Nam.

The centre did the research, wrote the software, and manufactured the scanners using 100 per cent Vietnamese components, he added.

They use gamma rays to define the structure of objects and have application in detecting erosion and blockages in pipelines and determining the age of trees among others.

The Vietnamese scanners cost US$8,300 each.

The centre is run by the Viet Nam Institute of Nuclear Science and Technology.

ASEAN car manufacturers discuss bio-fuel production

Auto manufacturers from member countries of the Association of South-East Asian Nations discussed the use of bio-fuels as an alternative to petrol in a bid to reduce environmental pollution at an industry forum in Ha Noi yesterday.

The two-day long 12th ASEAN Automobile Industry Forum drew representatives from nine countries in the Southeast Asian region.

Speaking at the forum, Deputy Minister of Industry and Trade Le Duong Quang said that the meeting's host country Viet Nam encouraged the manufacture of environmentally-friendly vehicles that use clean fuel.

"The country expects that by 2020 the use of clean fuel in vehicles will account for 5 per cent of conventional energy," said Quang.

Commenting on the nation's plans to develop the auto industry, Quang said the domestic auto industry would prioritise working with its partners in the ASEAN bloc to boost links and the association's role.

According to a report from the Viet Nam Automobile Manufacturers' Association (VAMA), the country's auto industry was 20 to 30 years behind other countries.

"As a result, Viet Nam's automotive industry is still incapable of satisfying domestic demands".

"Despite the opportunities to expand with Free Trade Agreements, the local industry faces a number of challenges."

The report said Viet Nam had a low rate of car ownership, at about 15 for every 1,000 people.

The country's poor transportation infrastructure, relatively small amount of car parking and frequent traffic jams in urban areas were also big challenges for the sector.

In addition, high domestic vehicles assembling costs and a lack of supplies for automotive support businesses were also a big problem.

"But with a high growth rate, the country is an increasingly desirable market for auto industry expansion."

A representative from Japan's Ministry of Economy, Trade and Industry said ASEAN's auto industries had huge potential for development.

"Japanese automakers had invested in ASEAN countries for a long time and their investment has proved to be effective and able to raise the competitiveness of the ASEAN-Japan auto industry to rival big car producers like China , India and South Korea," said Shigeaki Tanaki, Director of Japan's Automobile Division Manufacturing Industries Bureau (METI).

Participants at meetings tied to the forum also discussed the deployment of auto industry-related commitments in the ASEAN Free Trade Agreement, the streamlining of customs procedures for auto products and standardisation of the auto industry across the bloc.

Bird flu and blue-ear diseases under control in Viet Nam

Epidemics of blue-ear in pigs and bird flu are under control but foot-and-mouth disease was still a problem, an official from the agricultural ministry said yesterday.

Deputy Minister of Agricultural and Rural Development Diep Kinh Tan told the National Steering Committee on Livestock Disease Prevention that authorities of some provinces had not yet implemented strict measures to prevent foot-and mouth disease and even could not agree on what vaccine to use.

Inspections had revealed the northern Son La Province had not implemented strict controls on 50 per cent of its grazing cattle herd.

The steering committee said foot-and-mouth disease was occurring at two main regions of the northern mountainous provinces and Central Highland. Points of origin for the disease had been discovered in the two regions recently, which showed that the disease was still spreading.

The main reasons were disease-affected cattle was still being sold and the cold weather had reduced the cattle's resistance to the disease.

The steering committee asked affected provinces and neighbouring regions for stronger inspections of cattle farmers and slaughter-houses and detection of illegal cattle sales and smuggling in border areas.

The committee also asked the agricultural ministry's veterinary department to complete the draft of the 2011-15 national programme on foot-and-mouth disease prevention for the ministry's approval.

There are 14 provinces which still have foot-and-mouth disease, including Son La, Quang Ninh, Lang Son, Bac Kan, Cao Bang, Thanh Hoa, Dien Bien, Thai Nguyen, Ha Giang and Hoa Binh in the north, Quang Ngai, Nghe An, Phu Yen in the centre, and Kon Tum in the Central Highland.

RoK enterprises attend seminar on labour law

Ho Chi Minh City now has 3,425 foreign-invested businesses with 439,672 employees, including 688 businesses are from the Republic of Korea (RoK).

This was announce at a seminar on Vietnam’s labour law held by the Ho Chi Minh City Department of Labour, Invalids and Social Affairs (DOLISA) on January 25 with the participation of over 100 RoK invested enterprises.

According to delegates, 21 of 36 labour strikes in happened in the RoK businesses and only 18 percent of RoK businesses signed collective labour contracts with employees and 39 percent of businesses set up their own labour regulations.

HCM City-based DOLISA Deputy Director proposed that the enterprises establish trade unions to protect employees’ interests and facilitate contacts between employers and workers.

The seminar was aimed at raising awareness of labour law and help RoK enterprises avoid employment disputes.

Plastic bags subject to tax at $2.3 per kg

Plastic bags will be subject to an environmental protection tax rate of VND45,000 ($2.3) per kg, expected to come into effect from January 1, 2012 when the Law on Environmental Protection Tax becomes effective.

The new law, ratified in November last year by the National Assembly, is aimed at limiting the use of plastics which have been identified as causing serious environmental pollution, according to the Finance Ministry.

The tax rate on plastics is specified in the environmental protection tariff that is included in the draft resolution proposed by the National Assembly’s Standing Committee.

Along with plastic bags, petrol and oil may be taxed at VND300-1,000 ($0.015-0.05) per liter, also to take effect from January 1, 2012.

80 FDI businesses receive Gold Dragon Awards

Eighty foreign-invested businesses from various sectors were presented with the Golden Dragon Award in Hanoi on January 23 for their excellent business performances in 2010.

This annual awards ceremony was organised by the Ministry of Planning and Investment's Foreign Investment Agency and Vietnam Economic Times to honour outstanding FDI businesses.

At the ceremony, Professor Dao Nguyen Cat, editor-in-chief of the Vietnam Economic Times, said along with the foreign-invested business community in Vietnam, the award winners have made significant contributions to the country's economic structure and enhanced its capacity for industrial production. They have also contributed to accelerating technological transfer, strengthening administration reform and improving transparency in the investment environment.

The award winners include Honda, LG, Samsung Electronics, Ferroli Indochina, Ford, Toyota, Mercedes-Bez Vietnam, Coca Cola, ANZ, Kinder World and Appolo.

In 2010, the FDI sector reached US$38.8 billion, accounting for 25.8 percent of the Vietnam’s total amount of investment capital and 53.1 percent of its total export earnings. The sector’s trade surplus hit US$2.4 billion, helping to improve the country’s trade balance and reduce its import surplus.