Price stabilisation programme ‘a success'

 

The price stabilisation programme for essential goods in HCM City has benefited both consumers and enterprises and contributed to ensure social welfare over the last nine years, heard participants at a review meeting in HCM City yesterday.

Initiated in 2002, the programme stabilises prices of essential goods during Tet (Lunar New Year) holidays, when demand for these items usually increased by 20-40 per cent, said Nguyen Thi Hong, deputy chairwoman of the HCM City People's Committee.

The programme focuses on eight goods: rice, sugar, cooking oil, cattle meat, poultry, processed foods, eggs, and vegetables.

Under the programme, businesses specialising in production and trade of essential goods are selected to co-operate with the city in planning production, processing and purchase of such goods to meet consumer demand and stabilise prices.

Businesses participating in the programme are eligible for interest-free loans to promote production or to purchase goods and maintain reserves.

Enterprises in turn pledge to sell items at 10 per cent lower than the market price.

The programme became an effective price regulation tool over the past years, Hong said, adding that it helped stabilise prices of essential goods immediately at localities that experienced speculation, and helped residents considerably.

"With abundant goods, reasonable price and good quality, the city has gradually controlled speculation to push up prices," she said.

The programme also helped the city to control inflation, Hong said, noting that even though HCM City had the country's highest population density and consumption demand, the city's price consumer index remained lower than the country's CPI.

Building on this success, the city began to implement the price stabilisation programme throughout the year from 2010, Hong said.

Enterprises involved in the city's price stabilisation programme had gained more opportunities to market their products, and accessed preferential capital to develop production and trading, she added.

The minister and director of the Government's Office, Nguyen Xuan Phuc, praised the programme's good results over the past years and suggested the city to work with neighbouring provinces to create more sources of goods.

Ministry assists exporters in targeting EU market

Vietnamese exporters participated in an online meeting organised by the Ministry of Industry and Trade yesterday to distribute information about the European export market.

During the online session, Deputy Minister of Industry and Trade Nguyen Thanh Bien, representatives from trade promotion agencies and embassy counsellors talked about the uncertainties facing export companies and offered advice that could help them boost exports to the market.

Representatives and a number of enterprises pointed out the main difficulties faced by Vietnamese exporters, including the difficulty in making contact with importers, the European Union's (EU) strict rules, food safety regulations facing domestic seafood production and the ability of Vietnamese firms to engage in legal action when necessary.

Tran Ngoc Quan, deputy head of the EU Market Department under MoIT, said contacting global supply chains and linking with Vietnamese enterprises already operating in the EU were two effective solutions for penetrating the market. "Through negotiations with international supply chains, enterprises can reach international standards. The department is also trying to exploit the advantages already enjoyed by the Vietnamese business community in the EU," he said.

"A stable and long-term market penetration strategy is needed. Companies should select business partners and export their strongest products," said Tran Trung Thuc, embassy counsellor in the EU-Belgium trade office, adding that knowledge of the international market, including international transportation, payment and distribution norms, was indispensable. He suggested that enterprises should innovate their products to meet the needs of import countries.

Enterprises can consult with the trade offices in each EU member state. The trade offices will support exporters with information about business opportunities and recommend reputable law firms in the case of disputes.

Further opportunities for Vietnamese exporters may come in the near future. Viet Nam is negotiating with the EU for a free trade agreement (FTA). Both sides are still reviewing approaches.

"Signing an FTA with the EU would create a huge advantage for enterprises. Import tariffs on some export items would be reduced to 0 per cent for both sides," said Deputy Minister Bien. "However, technical barriers are not included in the FTA. Companies should learn EU regulations before dealing in exports," Bien said.

FTA negotiations usually focus on opening the markets and dealing with barriers, but removing barriers is difficult. "The Government will continue to assist enterprises in any disputes that arise and support them with expansion plans through trade promotion," Bien said.

PetroVietnam earnings hit $7.2b amid price flux

The PetroVietnam Group earned VND151.2 trillion (US$7.2 billion) in the first quarter of this year, despite challenges caused by fluctuating oil prices, the national petroleum group announced yesterday.

"This figure is a year-on-year increase of 59.4 per cent, representing 30.2 per cent of our annual target," said Deputy Director General Le Minh Hong.

PetroVietnam has already sold $2.7 billion to domestic banks in line with a Government request to free up foreign currency, and the group is expected to pay about VND36.5 trillion ($1.74 billion) in taxes for Q1, a year-on-year increase of 35 per cent.

"PetroVietnam produced 6.02 million tonnes of oil including 3.68 million tonnes of crude oil in Q1," said Hong, adding that the group had sold 3.65 million tonnes of the crude oil.

Of this number, he added, 1.96 million tonnes were for export, 1.56 million tonnes went to the Dung Quat Refinery and 131,000 tonnes were both exploited and sold in foreign countries.

"The group also produced 2.33 billion cu.m of gas, and 218,400 tonnes of urea fertiliser," Hong said.

During the first quarter, PetroVietnam started work on eight new projects and inaugurated 14.

However, work was put on hold at 19 projects with a total investment capital of VND582 billion ($27.7 million), but processing time was extended at 45 others, worth VND6 trillion ($285.7 million).

"These decisions were taken following the Government's direction on inspecting projects and investment," said PetroVietnam General Director Phung Dinh Thuc.

Thuc affirmed that these projects had been carefully examined.

"We have checked a large number of projects and postponed and extended where we can. Urgent and on-going projects will not be on the list," Thuc said, affirming that the moves would not affect any power projects.

He also added that the inspections would continue in the future.

In the second quarter, PetroVietnam expects to reach a revenue of VND152.12 trillion ($7.25 billion).

In another development, PetroVietnam yesterday reported that its Dung Quat Refinery produced 1.37 million tonnes of petrol and oil in Q1.

PetroVietnam also announced that after halting operations for three weeks so inspections could take place, work had officially resumed at the refinery.

"The refinery resumed at 100 per cent capacity yesterday," said the general director of the Binh Son Oil Refinery and Petrochemical Co Ltd, Nguyen Hoai Giang.

Giang explained that they had needed to check all the equipment at the refinery ahead of the first maintenance overhaul from mid- July to mid - September 2011.

"The overhaul has been planned for a long time so we wanted to find out what equipment needs to be replaced. It can take from two to six months for new equipment to arrive," Giang said.

IT sector rolls out new development strategy

The development of broadband internet, particularly in rural areas, will play a key role to transform Viet Nam into an advanced ICT country, authorities and experts have agreed.

The Ministry of Information and Communications last week consulted foreign experts and authorities from 63 cities and provinces on rolling out information and communications technology (ICT) to the countryside.

The ministry has requested local authorities to increase the involvement of private sector in ICT, especially the development of broadband infrastructure.

Provinces and cities should prioritise the use of local budgets and other resources to promote major ICT projects. The implementation of favourable policies to facilitate investment in ICT is indispensable, it says.

"The Viet Nam National Broadband Network (NBN) Project will help Viet Nam bridge the digital divide, raise the country's international status and improve people's lives," stated Zou Qi Dong, network solution director of Huawei Viet Nam at a conference last week.

The NBN was particularly successful in Australia, where a fibre optic cable network had been developed. Huawei Co suggested three modes of operation in Viet Nam, including Government subsidy, Government as majority shareholder and third-party construction.

Frank Donovan, director of United States Agency for International Development (USAID) Viet Nam, said that USAID would further strengthen the capacity of the Viet Nam public utility telecommunications service fund to enhance ICT connections and rural area access to services.

Additionally, Viet Nam also needs to take advantage of its broadband satellite network. The launching of Vinasat 1 and 2 will provide better broadband connections for remote and rural areas.

"Viet Nam considers ICT a key industry and one of the most important driving forces for economic development," said Deputy Minister Nguyen Minh Hong.

After 20 years of implementing the ICT strategy, the sector has made remarkable progress with an annual growth rate of over 20 per cent. The total revenue of the ICT sector in 2010 reached US$15 billion, achieving an annual growth rate of 25 per cent.

By the end of February this year, the number of Internet users in Viet Nam reached 28 million people, accounting for 32 per cent of the population.

Rice exporters near second-quarter target

Rice exporters would have to find new contracts worth just 400,000 tonnes to meet the second quarter's export target of 2 million tonnes, said the Viet Nam Food Association (VFA).

Chairman of the association Truong Thanh Phong said that despite the good start to the year, exporters should continue to proactively look for new customers in preparation for the third quarter and the summer-autumn crop.

"If demand is low in the third quarter, the VFA will buy 1 million tonnes of rice to stockpile during that period, in order to steady the price and support farmers," Phong said, adding that the Government had also instructed the association to stockpile 1 million tonnes to coincide with the winter-spring crop in the first quarter.

According to the VFA, the Philippines, Viet Nam's largest rice importer, would reduce the amount of rice it imports from Viet Nam by around 200,000 tonnes this year. The country usually imports roughly 1.5-1.8 million tonnes of Vietnamese rice.

The association was also concerned that exports to the Middle East, Africa and the United Arab Emirates, that account for more than 30 per cent of total exports, would suffer due to political uncertainty in the region.

However, the association expected demand from other markets including Indonesia and Bangladesh would offset those losses. In the first quarter alone, the country signed export contracts worth a total of more than 1 million tonnes with Indonesia, the Philippines, Bangladesh and Cuba.

Phong said that thanks to rising demand, the rice price in the domestic market was currently high at VND7,600-7,800 per kilo, up VND500-600 over last week, though the country was in the harvesting season.

In the first quarter, Viet Nam exported more than 1.8 million tonnes of rice worth US$884 million, up 42 per cent and 46 per cent in volume and value compared with the same period last year.

Russia region governor urges co-operation between firms

Enterprises from Russia's Sverdlovsk Region wanted to boost co-operation with Vietnamese firms in the energy, engineering and metallurgy, agriculture, mining, and banking sectors, said the region's Governor Alexander Misharin.

At a business conference held yesterday, the governor said his first trip to Viet Nam, accompanied by over 20 enterprises, would start a new chapter for the relationship between the two business communities. He also called on Vietnamese companies to participate in the second International Ural Exhibition and Forum of Industry and Innovation "INNOPROM – 2011", slated to take place from July 14-16 in the region's Yekaterinburg City.

The events, which would showcase the latest technologies and developments in the Russian industry, would be a good chance for the firms to share co-operation opportunities, he said.

Viet Nam's increasing efforts to improve its business and investment climate and its deeper penetration into the global market would create more opportunities for Russian companies, said Deputy Minister of Industry and Trade Le Danh Vinh. Meanwhile, the attention from the two Governments and relevant ministries had also laid a firm foundation for businesses to increase co-ordination, especially in the trade and investment sectors, Vinh said.

Viet Nam Chamber of Commerce and Industry Vice Chairman Hoang Van Dung emphasised the importance of fostering the exchange of trade information and policies on trade and investment.

Dung said it was necessary to participate in business conferences, trade fairs and exhibitions to better understand their counterpart's capabilities.

Two contracts worth US$1.5 million were inked between NPK Okpur, a filtering materials manufacturer, and a Vietnamese counterpart at yesterday's event.

In addition, the Viet Nam - Russia Joint Venture Bank signed a memorandum of understanding to co-operate with the UralTransBank of Yekaterinburg.

Bilateral trade ties have developed significantly from $300-400 million in the mid-1990s to $2.4 billion in 2010.

Investor trading accounts fall inactive

The current number of securities trading accounts exceeds 1 million, with the number of active accounts at just 20-35 per cent, even at venerable brokerages, says the State Securities Commission.

A representative of Thang Long Securities Co (TLS), the company with the largest brokerage market share on the Ha Noi Stock Exchange in the first quarter, said the number of investor accounts at the company exceeded 2,000 by the end of the first quarter of this year, but the number of active accounts constituted only 35 per cent of the total.

A number of accounts were opened for purposes of share custody alone, and after the shares were sold, the accounts were left dormant, he explained.

"So, even though the number of accounts at the company has soared, the number of regularly active trading accounts remains modest."

Agribank Securities Co general director Ha Huy Toan said the firm had over 30,000 accounts, of which around 30 per cent were active.

Currently, even as some other securities companies stopped providing some services, we have tried to improve liquidity by continuing to provide loans to investors," Toan said. "But the fact is, the more investors borrow, the heavier the losses they incur."

In principle, brokers are responsible for "waking up" inactive accounts, but encouraging clients to trade in the context of the current market decline was risky or increased pressures to sell.

Under current regulations, an investor can open a single trading account, but many have also dodged the law to open multiple accounts with different companies under the names of acquaintances in order to enjoy the privileges of different companies.

KimEng Securities Co deputy director Nguyen Van Manh said market volumes could only be improved if regulators begin allowing investors to buy and sell shares within a single session, shortening settlement times and allowing investors to open multiple trading accounts.

This was well within the current technological capacities of both brokerages and the Viet Nam Securities Depository Centre, he added.

Vietnam, US to double trade over next 5 years

Trade between Vietnam and the US is expected to double in the next five years from the US$19 billion recorded last year, Secretary of Commerce for International Trade Francisco Sanchez said.

Speaking at a press conference in Ho Chi Minh City Wednesday, he said bilateral trade in January was worth nearly $1.716 billion, 21.3 percent up from a year earlier.

Vietnam’s exports topped $1.38 billion, 19.5 percent up, while its imports rose 29.2 percent.

Textile remained the top export item at $548.8 million, an increase of 19.5 percent, followed by footwear and wooden furniture at $170.9 million and $158.6 million.

The US shipped mainly fabric, machinery and components, and construction materials.

Sanchez, who wraps up his four-day visit Thursday, has been meeting top officials, executives at some of the biggest companies, and academics to discuss strategies to enhance bilateral trade.

Shippers continue to slap fees on im-exporters

Foreign shipping firms are imposing surcharges to cover container security, workers’ strikes, and container imbalance on exporters and importers.

Instead of simplifying procedures to cut fees, they have tended to slap more and bigger fees and surcharges.

H, who works for the import-export department at a HCMC-based garment firm, told Tuoi Tre that his company has to pay more than 10 kinds of surcharges.

His company, whose imports and exports add up to around 250 containers a month, has to pay billions of dong and any delay in payment leads to further millions as fine.

Many firms have complained about the imposition of a Container Imbalance Charge (CIC) since last month.

Since more containers are imported to Vietnam than exported, shipping firms have to return with empty containers, and thus the new charge.

The CIC, at around US$60 for a 20-feet container and $120 for a 40-feet container, is mostly applied to imports from Asian nations, Ngoc Thuy, an employee of a logistics firm in HCMC told Tuoi Tre.

Businesses have no choice but to pay, she added.

A Singaporean shipping firm told Tuoi Tre that the surcharge is collected also because of the congestion at Vietnamese ports which cause delays, thus increasing transport costs.

Besides, an emergency bunker surcharge, hovering at one-third to half the CIC rate, is also burdening businesses.

Importers of Chinese goods also have to pay a cost plus incentive fee to their Chinese partners.

Rough estimates show that Vietnamese importers pay charges and surcharges of VND12 million -13 million per 40-feet container. Exporters are, however, spared certain charges.

Thuy said surcharges are demanded for trivial things like covering workers’ strikes at destination ports, container cleaning and security, currency adjustment, and others, burdening firms.

A representative of Lien Anh Co, a ship broker in HCMC, told Tuoi Tre that the domination by foreign shipping firms means they can impose or increase fees and surcharges without prior announcement or roadmap.

ADB: additional $60 mln funding for southern VN water project 

The Asian Development Bank (ADB) said Wednesday it had approved a supplementary loan of US$60 million for Vietnam to complete an irrigation and water management project that will boost growth in rural, urban and industrial areas of Ho Chi Minh City and surrounding provinces in the south.

 

The Asian Development Bank says it has approved additional funding of US$60 million for an irrigation and water management project in southern Vietnam. 

The loan is for the Phuoc Hoa Water Resources Project, with the French Government’s development agency AFD providing a further US$25 million in cofinancing.

ADB said the bank and AFD had initially pledged a combined US$124 million for the initiative which will ultimately build irrigation systems and supply water for domestic, municipal and industrial uses, and to develop management skills in government oversight agencies and community water user groups.

“The goal of the project is to provide additional water in the Saigon and Vam Co Dong river basins for developing irrigated agriculture and to supplement existing supplies in Ho Chi Minh City and neighboring provinces,” Dennis Ellingson, ADB’s senior natural resources specialist, said in a statement Wednesday.

The original project was prepared in 2003, but delays in implementation and high inflation caused cost over-runs and a financing gap of over $131 million, according to ADB.

The bank added at the request of the government, which has earmarked the project as a key development priority, and following a review in 2008 with subsequent improvement in implementation, it was agreed to extend additional funds.

The new ADB loan will supplement the original loan which financed the construction of the Phuoc Hoa transfer canal to divert water from the Be River to a reservoir on the Saigon River. With supplementary financing, it will be possible to complete the original scope of the project including the construction of two new irrigation systems for agricultural development and intensification, ADB said.

The loan will also cover costs related to project management services and environmental measures linked to the protection of natural habitats, along with a portion of the land acquisition and resettlement costs for households affected by construction activities, added ADB.

The supplementary loan from ADB’s concessional Asian Development Fund has a 32-year term, including an eight-year grace period, with an interest rate of 1% per annum for the grace period and 1.5% for the balance. Along with the AFD loan, the Vietnamese Government will supply an additional US$42.9 million, with farmer beneficiaries contributing $3.7 million in kind.

The Ministry of Agriculture and Rural Development is the executing agency for the project which is expected to be completed by the end of March 2014 at a total cost of $329.5 million, according to ADB.

Deputy Minister of Industry and Trade Nguyen Thanh Bien Tuesday urged the Export and Import Department, the Vietnam Chamber of Commerce and Industry, and other relevant agencies to launch inspections into charges and surcharges demanded by shipping companies.

 

PetroVietnam signs up for inflation fight

Oil giant PetroVietnam, which carried out a review of all its ongoing projects, has decided to delay or scrap 64 of them costing VND6.6 trillion (US$330 million).

They are either not a priority or face difficulty in finding investors, it said.

Phung Dinh Thuc, the state-owned company’s CEO, said following the government’s decision to abandon unnecessary projects to cut public spending to ease inflationary pressure, the company has decided to cancel 19 projects that would have cost VND582 billion (US$29.1 million) and delayed 45 other worth VND6 trillion.

But PVN will continue to develop five thermal plants with a total capacity of 6,000 MW.

In the first quarter PVN has reported revenues of VND151.2 trillion (US$755 million), 59 percent up over the same period last year.

Ministry hosts online dialogue promoting export

The Ministry of Industry and Trade (MoIT) Wednesday held the first online dialogue with exporters, aiming to provide them with the latest and accurate information about the European Union market, which was Vietnam ’s second largest export market in 2010.

MoIT Deputy Minister Nguyen Thanh Bien pointed out that the greatest difficulty challenging Vietnamese exporters in the EU market is their failure to keep up with updated information on the market, which has a high degree of demand in term of technical matters.

He said as the big market, the EU offers various opportunities to Vietnamese exporters, especially on the support of the to-be-signed EU-Vietnam Vietnam Free Trade Agreement.

The official urged local businesses to strictly observe Vietnam ’s export procedures and the EU’s import regulations if they wish to explore these opportunities.

In the first two months of this year, Vietnam reaped US$2.5 billion in export earnings from the EU, a surge of 46 percent over the same period last year, with footwear, apparels, coffee, aquatic products, and wood furniture as key products.

Following this dialogue, the MoIT plans to hold monthly online dialogues for businesses which are eager for exporting their products to Japan, India, the UK, the United Arab Emirates, Cambodia, China and Algeria at the website: www.ttnn.com.vn.

 

Vietnam Airline offers more flights to Phu Quoc

Vietnam Airline has announced it would offer one more flight every day between Ho Chi Minh City and Phu Quoc, bringing its daily flights on this route to 11.

The national flag carrier also said it would stop offering flights on the HCMC-Rach Gia- Phu Quoc route until April 23 to repair the runaway at Rach Gia Airport.

Passengers who have booked for flights on this route will get full refunds.

The airline also announced earlier a plan to increase its domestic flights during the April 30/May 1 holiday as well as in the summer.

Footwear export earnings revenues exceed US$1 billion in Q1

Footwear continued ranking third after garment and crude oil with export earnings fetching almost US$1.3 billion in the first quarter of this year.

The Ministry of Industry and Trade said that a year-on-year increase of 29.7 percent in export revenue was attributable to rising demands as the world economy continues its recovery trend.

The European Union continued to be the biggest market for Vietnam’s footwear, buying US$356 million worth of products in the first two months of the year. It was followed by the US and Japan that imported US$230 million and more than US$54 million, respectively, worth of Vietnam’s footwear.

Vietnam’s footwear exports to China, the Republic of Korea and other markets also rose.

At present, the nation’s footwear has been exported to 50 nations and territories in the world and ranks fourth among the world’s top ten exporters with major products being sport, leather and canvas shoes and sandals of all kinds.

The Vietnam Leather Footwear Association said Vietnam is likely to achieve export target of US$5.5 billion this year following the EU’s removal of anti-dumping duty on Vietnam’s leather-capped shoes on April 1.