Vietnam says rejects Indian corn, soymeal, mulls ban

Vietnam has rejected 6,300 tonnes of Indian corn and soymeal found with insect infestation and officials have threatened to impose an import ban if more violations are found by the end of the year, Voice of Vietnam radio said on Monday.

Officials have recently asked two importers to re-export the infested corn and soymeal delivered to Ho Chi Minh City port, Nguyen Xuan Hong, head of Vietnam's Plant Protection Department, was quoted by the radio's evening news bulletin as saying.

"We have warned that between now and the year end if five more cargoes are found with the violation, we will propose the Agriculture Ministry not to allow the import of India's corn and soymeal, the items often found with infestation," Hong was quoted as saying.

Several Vietnamese importers have switched to other origins to avoid the problem, the radio said.

India, a key corn supplier to Southeast Asian, exports around 300,000 tonnes of corn and up to 800,000 tonnes of soymeal each year to Vietnam.

In early 2011 the Vietnamese authorities rejected around 50,000 tonnes of Indian corn and soymeal after they found the same type of beetle, common in India, in the cargoes. Trading was disrupted until March 2011, when Vietnam resumed the import.

Soymeal is hardly infected by the beetle but the feed ingredient still suffers because it is carried together with infected corn.

Vietnam has rejected several cargoes of Indian corn and soymeal so far this year due to the same problem, traders said.

India, Argentina, the United States, Thailand and China top the list of feed and feed ingredient exporters to Vietnam.

Catfish firms share farmers’ fate as prices slump

Catfish processors and exporters now cannot buy materials even as prices have dropped to an extremely low rate as they have no money, an official from the Vietnam Association of Seafood Exporters and Processors (VASEP) said at a conference Saturday.

“Farmers are incurring losses, and businesses in the catfish exporting sector will accordingly collapse,” VASEP deputy chairman Duong Ngoc Minh said during a meeting with the Mekong Delta Seafood Association.

The meeting was intended to find a way to help the catfish sector, but as every solution is related to money, they all seem impossible as banks have been turning their back on catfish farmers and exporters for years.

“Currently, 30 percent of catfish processors are operating at 70 percent capacity, while 20 percent have completely ceased production, with capital shortage confirmed as the main cause,” said Minh.

Catfish prices rebounded in early April to VND28,000 a kg, but quickly slumped in the following months, according to Lieu Cam Hien, deputy head of the Vinh Long Department of Agriculture and Rural Development.

“Farmers currently incur a VND6,000 loss on every kilogram of catfish as prices have dropped to only VND18,000 a kg.”

Paradoxically, even at throwaway prices, businesses still cannot buy the fish.

“Many catfish farms have been harvested but farmers do not know who to sell the products to,” said Hien.

Confirming the paradox, Minh of VASEP said it is a matter of money.

“Processing plants are facing material shortages, prices are dirt cheap, and there is high demand from the exporting markets, but firms cannot buy fish as there is no capital.

“Banks not only refuse to offer loans but also jostle to collect old debts, sending firms and farmers to the verge of bankruptcy,” he stated.

There are some 3,900 hectares of catfish farms in the Mekong Delta provinces, around 1,300 hectares of which will reach harvest time between June and August, with a total production of 400,000 tons of fish.

Another yield of 700,000 tons will also be taken by year-end.

“Farmers have also run out of capital to buy feed,” said Ho Van Vang, a catfish grower in Vinh Long.

“We can only withstand this hardship for the next two months, after which all farmers will go bankrupt and will never return to catfish farming.”

The Mekong Delta Seafood Association called on the government to release an assistance package to help the catfish exporting sector.

“The State Bank of Vietnam should order banks to create conditions for catfish growers and firms to borrow loans at preferential rates,” said Hien.

“Farmers who fail to sell their fish should be allowed to borrow at 0.65 percent a month,” he elaborated.

The association also urged the Ministry of Industry and Trade to stabilize prices of input commodities for catfish farming.

“There should also be policies to ensure that catfish farmers can have a minimum profit of 10 percent, similar to the 30 percent rate ensured in the case of rice,” it said.

A VASEP representative said the agriculture ministry has submitted an aid package worth VND4.4 trillion to the government.

Catfish growers will receive VND2 trillion as assistance, while the remaining will go to businesses which have linked with farmers to buy their products.

“If approved, the aid will enable exporters to stockpile catfish as rice businesses have been doing,” the spokespersons said.

Falling cashew prices affect supply
 
Cashew nut processors lack raw materials for export because farmers having switched to higher value pepper and rubber crops, resulting in enterprises importing half the volume of total demand.

Nguyen Thai Hoc, chairman of the Viet Nam Cashew Association (Vinacas), said the country imported about 80,000 tonnes of crude cashew from ASEAN, Brazil and India in the first half of this year. It is expected that cashew nut producers would import an additional 220,000 tonnes in the second half.

Processors needed smaller quantities of imported cashew in the first half this year due to inventories carried over from late 2011.

Total national output of crude cashew reached only 330,000 tonnes in the first half, meeting 50 per cent of total demand.

Nguyen Duc Thanh, deputy chairman of Vinacas and director general of Tan An Export and Agro-product Processing, said his company imported about 10,000 tonnes of crude cashew from Western Africa every year, equal to 45 per cent of the total amount required.

Whereas, Tran Hoang Son, director of Gia Bao Cashew JSC said his company owns 20ha of cashew plantation, which only satisfies 30 per cent of annual need."

Southern Binh Phuoc Province, the country's cashew hub, has about 230 companies requiring an average of about 600,000 tonnes of crude nuts per year, whereas the area only churns out 200,000 tonnes. With resources supplied by other provinces not enough, producers have been forced to import, Son added.

Recently, roughly 15,000ha of cashew plantation was chopped down, leaving only 185,000ha in Binh Phuoc.

"Although the province has implemented many measures in support of farmers, the area of cashew cultivation has decreased as the value of other crops, such as rubber, pepper, potatoes and wheat, increases" said Tran Ngoc Kinh, director of Binh Phuoc's Plant Protection Department.

Cashew plantation in the Tay Nguyen (Central Highland) provinces of Dak Lak and Dak Nong has reduced by 20,700ha to 83,900ha against 2010.

Son explained that although Binh Phuoc was a cashew hub, farmers only made a profit of VND40 million ($1,905) from one hectare per year, whereas they got up to VND80-100 million from a hectare of rubber.

Cashew prices hover around $6,900 per tonne, down 5.5 per cent against June last year.

To deal with the problem, Son said it was essential to grow cashew in accordance with world standards to prevent pestilence and raise productivity to 1.8-2.2 tonnes per ha, up 0.5-0.7 tonnes against the norm.

In addition, Vinacas is growing Vietnamese cashews in Cambodia to increase resources.

Viet Nam earned $484 million from cashew exports in the first half of this year, up 21.4 per cent against the same period in 2011, with the two major importers being the US and China.

Shrimp exporters find the going tougher

Domestic shrimp exporters are facing major challenges due to fiercer competition from foreign rivals and stricter regulations imposed by importing countries, according to the Shrimp Committee.

The committee, which is under the Viet Nam Association of Seafood Producers and Exporters, said that in contrast to Viet Nam, Thailand and India were enjoying better shrimp harvests.

Thailand expected to gain a shrimp output of 600,000-700,000 tonnes this year, up 20 per cent over last year. The Thai government has also planned to spend at least 1 billion baht (US$32 million) to buy roughly 10,000 tonnes of shrimp in the domestic market for inventory to support its farmers in the case of shrimp price reduction.

India also forecast a shrimp output of 100,000 tonnes this year, up 30 per cent over last year. India has recently succeeded in raising its market share in the US to 8 per cent from 5 per cent last year. India is currently considered a major competitor to Vietnamese shrimp exporters in the US market, especially of large-sized shrimp.

Chairman of the Shrimp Committee Ho Quoc Luc was further concerned about a possible reduction in shrimp exports to Japan this year as Japan has recently decided to increase its frequency of tests for trifluralin and enrofloxacin in shrimp imports from Viet Nam.

Despite the difficulties, industry insiders said that there were still advantages for domestic shrimp exporters in the US market.

Tran Thien Hai, general director of the Minh Hai Seafood Joint Stock Company, said that anti-dumping tariffs imposed by US authorities on Indian shrimp are higher than Viet Nam's. The tariff for Vietnamese shrimp is 1 per cent against 2.51 per cent of Indian.

Thai exported shrimp prices are also less competitive than Viet Nam's as input costs of the Thai industry are likely to surge by roughly 10-20 per cent in the wake of the country's decision to increase its minimum salary by 40 per cent recently.

Shrimp is the key export staple of Viet Nam's seafood industry and the country expected to earn roughly $2.5 billion from the product's export this year. According to the General Office of Customs, the country's shrimp is shipped to 70 international markets, of which Japan and the US are the biggest importers.

Sea-resources project points way to future
 
A national project to explore and assess the management of sea resources and the environment during the 2006-11 period was able to yield important results, including building centres to cope with oil spills in three regions and collecting important data on sea resources to help boost the country's marine economy potential.

At a meeting yesterday, Deputy Prime Minister Hoang Trung Hai, head of the national steering committee on assessing sea resources and the environment, reaffirmed the importance of the marine economy to the country's security and socio-economic development.

During the project's implementation, progress was made to systemise all the legal documents pertaining to sea and island protection, natural resources management, sea hydrometeorology, and policies related to building human resources for the sector.

Hoang Duong Tung, deputy head of the National Environment Administration, said research conducted within this project had helped improve the efficiency of weather forecasting and limit the damage caused in coastal areas.

For example, the project helped identify spots "vulnerable" to environmental degradation, methods to calculate the economic loss incurred from environmental damage, and systematic criteria to assess the level of environmental degradation in several vital coastal areas.

Under the national project, which was approved in March 2006, 18 out of 20 sub-projects were carried out, including one to assess the potential of oil extraction in the sea and the continental shelf, the country's biodiversity and sources of aquaculture in Viet Nam's coastal areas.

The deputy PM called on the project, in the 2011-20 period, to focus on studying the potential of exploiting far-off sea areas.

At the meeting, experts also discussed ways to build a national database on sea resources and to connect research with the real task of sea and island management and the sustainable development of the sea.

The deputy PM also spoke of the need to encourage private sectors to participate in sea resources development and protection, in addition to training the necessary human resources.

Agencies urged to save catfish growers

A meeting held by the Ministry of Agriculture and Rural Development on Monday initially intended to form a preliminary figure on catfish consumption turned out to be an urgent discussion on what should be done to assist catfish growers and exporters in the Mekong Delta provinces.

Catfish prices have recently dropped to only VND18,000 a kg from its VND25,000 peak, creating huge losses for farmers, while fish processors and exporters have also failed to buy any product due to a capital shortage.

Duong Thanh Thai, who grows catfish in Dong Thap Province’s Thanh Binh District, said the cost price for a kilogram of catfish is currently VND25,000, which means he incurs a VND7,000 loss on every kilogram of fish he raises.

“Feed prices have soared by 40 percent against the same period last year, but I still have to feed the fish every day,” he said. “The longer I grow the fish, the bigger the losses I suffer.”

Meanwhile Tran Van Hung, a catfish tycoon, said businesses have to sell their products at a loss to ease the capital shortage while banks have tightened credit.

“Importers know of our hardship so they have repeatedly lowered buying prices,” said Hung, who is the chairman of the Hung Ca Co Ltd.

“Moreover, at the ongoing Viet Fish seafood exhibition, some firms are offering to export catfish fillet at only US$2.2 a kg, sending prices slumping further.”

Hung said accessing bank loans is now impossible, as the institutions always ask for collateral.

“But this is infeasible as we need to invest VND6-8 billion on every hectare of catfish farm,” he said.

Duong Ngoc Minh, deputy chairman of the Vietnam Association of Seafood Exporters and Processors (VASEP), said the unhealthy competition between some local catfish exporters has exacerbated the situation.

“The mess should be cleaned up as soon as possible, otherwise both growers and exporters will fail to survive the problem,” he shared.

There are some 3,900 hectares of catfish farms in the Mekong Delta provinces, around 1,300 hectares of which will reach harvest time between June and August, with a total production of 400,000 tons of fish. Another yield of 700,000 tons will also be taken by year-end.

The Minister of Agriculture and Rural Development said prices have fallen sharply due to the imbalance between supply and demand.

“Supply has outgrown demand while global catfish prices have also slumped, resulting in the domestic price plunges,” he said.

He urged relevant agencies to quickly assist farmers and businesses.

“At first we should ensure that firms have money to buy fish for export,” he said, adding that the State Bank of Vietnam has recently ordered banks to extend debts for catfish businesses and creat conditions for them to access loans.

The Ministry of Finance has also sought permission from the government for an assistance package worth VND9 trillion for the catfish sector, he added.

The minister also reminded banks to closely monitor their loans to ensure that businesses will not use the money for purposes other than buying catfish.

“VASEP should also ask its members to stop dumping prices to maintain Vietnamese catfish’s quality and reputation,” he ordered.

Dung Quat a magnet for int’l investors

Many international investors are seeking chances in the central province of Quang Ngai’s Dung Quat Economic Zone following the implementation of an investment plan of the Japanese JPE Steel Corporation in the area last April.

On April 18 JFE and Taiwan’s E-United worked with the provincial authorities over the inauguration of the Guang Lian Dung Quat steel manufacturing plant, in Dung Quat.

The Guang Lian Dung Quat steel manufacturing plant, whose main investor is Tycoons Worldwide Steel Vietnam Co Ltd, broke ground in October 2007, with a total investment of more than US$3 billion.

The project’s investor was later changed, and the required capital was increased to $4.5 billion, with the project expected to reach its first completion stage by 2013.

After the above meeting, Japanese investors such as Yoshizawa, Mining, Morimura, and BIKEN -- the most recent addition -- have arrived in Quang Ngai to seek investments to embrace the under-construction steel plant, Dau Tu (investment) newspaper reported.

Confirming the fact the these investors are eying Dung Quat, Le Van Dung, deputy head of the economic zone’s managing board, said many international limestone, concrete, and industrial gas manufacturers have come to Quang Ngai and studied the feasibility of setting up plants here.

“The latest newcomer, BIKEN, a concrete manufacturer, is expecting to supply its products to the Guang Lian plant once work on the latter begins,” he said.

“Experts from steel corporations such as JFE, E-United, and Posco said that besides a steel manufacturing complex, there will be a number of supporting projects to outsource and produce many steel products, which are expected to lease hundreds of hectares of lands inside the Dung Quoc Economic Zone.”

While JFE has yet to confirm its official participation in the Guang Lian project, its presence in Dung Quat shows positive signs.

In 2007 JFE studied Dung Quat and planned to build a steel manufacturing complex worth $6.9 billion there, but had to delay the project due to the global financial crisis.

This year it came back with E-United, and mulled restarting the project.

“There is an outbound investment trend amongst Japanese businesses, and Dung Quat has many advantages to attract them,” said Dung.

“So we hope that JFE and E-United will implement the Guang Lian project to attract more supporting investors.”

“Whether or not other investors will come depends on JFE’s decision to stay at or leave Dung Quat,” he explained, adding that all they can do is wait.

The country is greatly anticpating a yes from the Japanese firm, as many major international corporations have indeed become magnets attracting other supporting investors for their Vietnam projects.

Samsung, for instance, has helped attract some 40 other investors with its mobile phone manufacturing plant in the northern province of Bac Ninh.

Similarly, many investors have shown interest in landing in Vietnam following the opening of an Intel plant in the country.

Commenting on the trend, Professor Nguyen Mai, former deputy head of the Government Committee for Investment and Cooperation, said it is a good sign.

“Vietnam should focus on wooing multinational corporations as they will help attract more investors to the country,” he said.

“Foreign investors will help develop the Vietnamese supporting industries, as well as train an adequate workforce and transfer technology.”

Tightening safe vegetable controls

Only about 0.1 percent of the total vegetable growing area in Vietnam is subject to quality control but consumers prefer to buy safe products. Why has the scale of production failed to expand in response to the demanding market?

This issue was the main topic of discussion at a recent seminar on controlling the safety of vegetable products, held by the Institute of Policy and Strategy for Agriculture and Rural Development (IPSARD) and the Center for Agrarian Systems Research and Development (CASRAD).

IPSARD expert Dr Tran Cong Thang said the current volume of “safe” or “organic” vegetable products only meets 14 percent of consumer demand in Hanoi. Over 92 percent of people surveyed said the quality of “safe” vegetables on sale is much better than that other kinds of ordinary vegetables, but most consumers cannot tell the difference.

Nearly 55 percent of consumers said they only check food quality control labels; 29.4 percent base their choice on practical experience, 5.9 percent on the shop’s reputation and 9.8 percent on quality control devices.

The Fruit and Vegetables Research Institute said that only 15-20 percent of safe vegetables are sold through supermarkets, markets and shops at prices equivalent to those for ordinary vegetables.

Despite working with farmers to ensure supply and demand, small businesses are still unable to expand the distribution network.

According to a recent 2011 survey of 50 fruit and vegetables businesses in inner-city districts, good planning is considered to be the key to success. Currently, around 48.98 percent of businesses are involved in developing organic vegetables, while 28 percent focus on building more shops, and 2 percent on expanding the distribution network.

Approximately 80 percent of safe vegetables retailers plan to invest more in promoting their trademarks.

The Hanoi Plant Protection Department said the difficulty in telling the difference between organic and non-organic vegetables and the lack of transparency in the vegetable markets, have prevented many businesses from buying and selling safe vegetables.

Last year, 25 out of 600 vegetable samples (4.1 percent) were found to contain pesticide residue beyond a recommended limit.

IPSARD experts emphasized the need to ensure transparency in the safe vegetables markets so that businesses can develop production on an equal footing through e-commerce and narrow the widening gap between traditional and modern trading methods.

Browsing organic vegetables and safe food websites, consumers will be better aware of the good effects of safe vegetables on human health.

The General Secretary of the Vietnam Standard and Consumer Association (VINASTAS), Nguyen Manh Hung, said that his association has made public an official map of organic production areas and safe vegetables retail shops in Hanoi and the surrounding areas.

Connected to Google Map, the map provides the names, addresses and telephone numbers of safe vegetables retail shops, organic vegetables producers and growing areas, as well as information about the production and quality control processes.

VINASTAS will monitor the production and processing of safe vegetables and if any business fails to meet the specific safe and organic criteria, it will be removed from the map, said Mr Hung.

At the seminar, Dr Dao The Anh, an expert from CASRAD, proposed developing a functional Participatory Guarantee System (PGS) to improve public trust in the quality of safe vegetables.

Providing free medical check-ups, surgery for poor people

Korean and Vietnamese doctors have provided free medical check-ups for more than 270 poor people suffering from deformity in Mekong Delta provinces.

After conducting thorough tests from June 22-28, doctors performed surgery for nearly 130 people.

This charitable activity aimed to bring happiness to those disabilities and help them integrate into society.

Growers seek more land, capital

Agricultural firms engaged in producing non-staple crops, like orchids, mushrooms and ornamental fish wanted more support in accessing land and capital, they told HCM City authorities last week.

They suggested that the city set up a land fund to support organisations and individuals that invest in research in this field, in accordance with the city's agricultural development programme.

Doan Minh Duc, director of the Kim Ngan Orchirds Joint Stock Company, said her company wanted to implement orchid development products but was finding it difficult to find enough land for production.

Duc said her company needed between 5-10ha of land for producing each kind of orchid to meet export demand.

Orchid supply from Thailand had been unstable recently, she said, noting that many foreign companies had placed stable orders with her company.

HCM City had favourable climate and soil conditions for orchid cultivation. Therefore, the city should make a zoning plan for orchid development to attract orchid production and export companies, she said.

Representatives of many firms said accessing capital was a big problem.

Hi-tech agricultural production required considerable capital, but they were unable to borrow funds in accordance with city's Decision 36 to support restructuring of the sector because they had no assets to mortgage, they said.

The Truong Xuan Biotechnology Joint Stock Company is implementing a project to plant mushrooms following good agricultural practices standards at the city's hi-tech agricultural park in Cu Chi District.

It wants to borrow capital from banks to invest methodically in its project and cut production costs, increase product quality and engage in large-scale commodity production.

However, Vo Ngoc Duy, chairman of the board of Truong Xuan Biotechnology Joint Stock Company, said it was really hard to access bank loans.

If a company wanted to borrow from banks, it must have property for collateral, Duy said. While banks said that collateral was not a deciding factor and that priority was given to feasible projects, the reality was different, he added.

Many firms suggested that the city should have a fund for hi-tech agricultural development, similar to the one it had for co-operatives (CCM) in the city.

But they said loans provided from the CCM were small and insufficient to start large-scale agricultural production.

Enterprises also called for the Government's support in building brands for agricultural products, including flowers, ornamental fish and mushrooms, as well as in other trade promotion activities so as to market their products more effectively in overseas markets.

They said the Government should reduce corporate income tax for agricultural co-operatives, small-scale enterprises and agricultural establishments in the first two to three years of operation.

They also wanted exemptions and/or cuts in import taxes for new seedlings and breeds.

Le Minh Tri, deputy chairman of the city People's Committee, said the city would strive to solve difficulties mentioned by the firms.

It would carry out zoning plans for some priortity sectors such as seedlings and breed production, he said.

He said the Department of Agriculture and Rural Development would be asked to estimate the capital needs of agricultural enterprises and co-operate with the State Bank of Viet Nam in solving the problem

Building materials sector battles slumping demand

The Viet Nam Building Materials Association is proposing measures to save an industry that is sinking under reduced production, high inventories and threats of insolvency.

Demand for building materials has fallen sharply since late last year, as State and private investment in construction have been cut drastically, association chairman Tran Van Huynh has reported to the Prime Minister. The industry was facing a myriad of challenges including high electricity and input costs, high interest rates, disadvantageous exchange rates and a lack of capital, he said.

Stockpiles of building materials have mounted alarmingly but the industry was unwilling to cut prices dramatically for fear of further undercutting the long-term viability of enterprises and threatening jobs, said the general director of cement producer Vicem Hoang Thach, Dao Ngoc Binh.

Cement producers had suffered high losses and seen growing stockpiles all year, and some were at risk of bankruptcy, said Viet Nam Cement Association general secretary Do Duc Oanh. The industry has three million tonnes stockpiled, worth VND3 trillion (US$145 million), and the construction industry was not expected to pick up anytime soon, he said.

To solve the difficulties facing the building materials industry, Huynh urged the Government to increase infrastructure construction by building roads in rural area, upgrading provincial and national highways, and building improvements in industrial zones.

He also called for a reduction in the value-added tax on building materials from 10 per cent to 5 per cent to encourage consumption and help reduce inventories.

For the long term, the Ministry of Construction needed to restructure the cement industry to reflect real demand on the domestic market and develop a plan for the import and export of building materials to reduce imports and increase the use of local products.

Banks also needed to refinance existing loans to building material producers and create more favourable conditions for producers to obtain additional credit, Huynh said.

Coastal city approves copper slag project

The management board of Van Phong economic zone has granted an investment licence to Van Phong Rock-Crystal Joint Stock Co to build a non-heated building materials factory using copper-slag in the central coastal city of Nha Trang with total investment capital of VND200 billion (US$9.5 million).

The factory, located in Ninh Thuy Ward of Ninh Hoa Commune is expected to use 75,000 tonnes of copper-slag per year. Copper slag is an abrasive blasting grit made of granulated slag from metal smelting processes (also called iron silicate).

The construction of the factory aims to use discarded copper-slag to avoid environmental pollution.-

Auto industry faces multiple challenges

The economic woes coupled with hiccups in polices on taxes and fees not only impact traders of new autos but also hit secondhand car dealers.

Old car buyers can enjoy cheaper prices and avoid the high registration fees, currently at 15% in HCMC and 20% in Hanoi. However, multiple used car outlets in HCMC are now burdened with high volumes of unsold products, which choke off the capital flow and bring huge losses to businesses.

Tran Duy Phu, director of An Phu Gia Import-Export Trading Co., owner of An Phu Gia Auto Store, said his company used to sell an average 30 vehicles each month, but now the sales volume has dropped to three. As such, he has cut the number of sales agents from five to two.

Sharing his 20 years’ experience in the auto market, Phu said used car traders often bought old cars and immediately sold them to customers in a few days. There was never a secondhand car that remained unsold in months or even over a year like now, he stressed.

As new cars are facing sluggish consumption, local automakers have launched promotion programs to lure buyers, making it more difficult for old car traders.

Moreover, personal vehicle restriction fee and downtown entrance fee, though not approved yet, make customers hesitant to buy cars. This is the reason why there are currently more sellers than buyers in the auto market.

Notably, the demand for selling cars of businesses tends to increase. Used car traders explained enterprises are forced to sell cars to settle debts and pay their employees.

Not only small dealers, sales agents of large auto firms are also struggling with poor sales. An agent of Ford Vietnam that trades secondhand vehicles in HCMC said the used car market had plunged by 50-60% since the year’s beginning.

* The Vietnam auto industry is facing multiple challenges on its development path while the competitiveness of this industry is not strong enough, heard a seminar on removing difficulties and developing the Vietnam auto market in 2012.

The seminar was a feature of the 2012 AutoExpo that took place in Hanoi last weekend.

Experts at the event pinpointed the greatest challenge for the automotive industry of Vietnam is the schedule for tax cuts under the Agreement on the Common Effective Preferential Tariff (CEPT) for the ASEAN Free Trade Area (AFTA). In particular, auto import tax rate will be slashed to 50% in 2014 and 0% in 2018.

In addition, burdened with many costs, locally assembled cars can hardly compete with imported complete built-up vehicles from ASEAN countries. It is yet to mention the internal shortcomings of the local auto industry and its supporting industries.

Furthermore, participants in the seminar shared the view that the biggest obstacle for the development of Vietnam’s auto industry is policy bottleneck.

“We have too many policies that are inconsistent, or even inadequate. The policy is to develop the auto industry to boost industrialization and modernization, yet special consumption tax is imposed, restricting consumption,” said Do Huu Hao, chairman of the Vietnam Society of Automotive Engineers (VSAE).

Tax hike sends gas price soaring

Gas prices are set to increase VND11,000-12,000 per 12-kilo container today after the Ministry of Finance raised the import tax rate to 5% on Wednesday.

Le Thi Anh Man, deputy general director of Saigon Petro, told the Daily that the company’s SP gas would increase by VND11,000 per 12-kilo container starting today, sending the maximum retail price to VND351,000 each container.

Similarly, Huynh Ngoc Tue, sales manager of Petrolimex Gas, said his company would increase gas prices by VND11,000 per 12-kilo container. The new price of VND352,000 per 12-kilo cylinder is applicable today.

Meanwhile, Le Quang Tuan, sales manager of Pacific Petro, informed that new gas prices with a VND12,000 increase would be applied from 12 p.m. today, taking the maximum retail price in HCMC from VND340,000 to VND352,000 per 12-kilo container.

Earlier on Wednesday, the Finance Ministry issued Circular 100/2012/TT-BTC signed by deputy minister Vu Thi Mai, deciding to increase the gas import tax rate from 0% to 5%, applicable for shipments going through customs starting from Wednesday.

Commenting on the tax hike, Man said the move was necessary, but she would prefer if it was done at the beginning of the month rather than in the middle. As global contract prices were determined at the start of the month, it would be easier for gas traders to adjust prices than at the moment, she explained.

“With Dung Quat Oil Refinery halting operation this month, forcing traders to buy gas abroad, whether gas prices are hiked or cut does not exert any pressure, because domestic and international goods are levied the same import tax rate,” said Man.

Following the tax increase, the ministry sent Dispatch 8261/BTC-QLG to gas wholesalers and local financial departments, asking the receivers to carry out price registration and market stabilization.

In particular, gas wholesalers have to review cost savings to help stabilize output prices, register domestic gas prices and direct their sales agents and retail stores to comply with price registration as prescribed by law. Moreover, wholesalers are not allowed to take advantage of the tax hike to unreasonably increase prices.

Local financial departments are responsible for supervising gas price registration, taking measures to stabilize the gas market and strictly handling violations.

Tool launched for firms to benefit from social networks

Bao Kim E-Commerce Co. (baokim.vn) has launched an e-commerce tool called Siki at siki.vn to help individuals and businesses access social networking communities for commercial benefits.

E-commerce in Vietnam has been playing a role in trading activities. Therefore, many online business models have been carried out, making significant contributions to spurring business activities.

However, the model of an e-commerce trading floor has not received a positive response from users in terms of interaction with social networks.

Therefore, Siki has been developed to commercially tap social networks through a new concept of online transactions based on interactions among social networks. Siki aims to fully serve the trading demand with features of simple business, convenient advertising and easy settlement of payment.

With Siki, one can register to sell or buy products with social network members. Through the services offered by Siki, users can easily sell products to members of Facebook, Twitter, Google+ and Zing Me via a link created by Siki.

In the future, Siki will continue to broaden its support for local social networks to increase its coverage and efficiency for users.

Siki supports three types of links with three different goals: sell links, buy links and trade links. Users can post items for sale, look for products to buy or share links to help the community and enjoy commissions from Siki.

Payments for transactions on siki.vn can be made through banks, cell phones, or e-wallets.

To use this tool, users must connect to Siki through their Facebook, Yahoo, Google and Twitter + accounts and then create links and directly share them on the social networks. For more information about this tool, visit http://www.siki.vn.

Le Thi Huong, webmaster of dienthoaihanoi.com, one of the first users of this model, said Siki users could actively select and provide information to potential customers quickly, with no cost to create and maintain a link for months.

Local firms have yet to fully tap web ad

Many local firms have yet to take advantage of free web advertising to cut down on advertising costs at a time of economic hardship, heard a seminar in HCMC last week.

Speaking at the gathering held by the 2030 Businessmen Club under the Saigon Times Club and Rich Media Corporation (RMC), CEO Johnny Thong of RMC said fan pages, social networks, mobile phones and email were increasingly effective channels for online advertising.

Fan pages gather supporters in a certain industry or for a particular brand, so they can be utilized for marketing.

Italian restaurant Capricciosa via their own fan page on Facebook has attracted more than 10,000 members over the past three months. Wedding restaurant Riverside Palace has created a fan page on Facebook targeting office workers, with 80% of the restaurant’s orders booked via this social networking site.

Similarly, the soft drink called Vfresh-nice gecko of Vinamilk has lured half a million viewers on Youtube in just a short time.

Statistics indicate that social network communities in Vietnam are huge, with 4.2 million people subscribing to Facebook and 8.2 million to Zing along with larger user numbers on other social networking sites.

According to advertising experts in the seminar, the nation has 150 million mobile phone subscribers even though the population is less than 90 million people, so this is an excellent means for advertising by texting.

A number of enterprises such as iSchool and Ecopark have heavily invested in this kind of advertising and got positive results.

However, a recent survey conducted by Nielsen unveils that 81% of consumers said they don’t believe text message advertising.

Fan pages and text messages could be combined with emails for more effective advertising. Based on the ratio of email readers counted by management tools, staff members will call the readers to sell products.

Meanwhile, the Tax Office of Phu Nhuan District is applying the Customer Relationship Management (CRM) system, using sugarCRM software free of charge. Thanks to the system, debt notices and recovery and documents or invitations can be sent via email and SMS to businesses in the area under the management of the office.

These technological solutions will support enterprises in marketing their products in an effective way without extra cost, Thong noted.

On top of that, the solutions allow companies to communicate with their clients via interactions and responses.