Danang port handles first cargo of 2014

A ceremony was held on January 1 at Danang Seaport to celebrate receiving  the first cargo of the New Year and announce the 5 millionth tonne of goods in 2013.

The first batch of cargo was transported by three ships and two containers, a 526 TEU ship of Facific Express, and an oil and gas transport ship of SEA COMMNCHE.

In 2013, Danang port handled 5.01 million tonnes of goods (up 13% year on year), and welcomed more than 116,000 passengers from over 100 cruise ships, doubling the previous year’s figure.

Tran Minh, captain of Facific Express ship, said Danang port is expected to receive 5.3 million tonnes of goods and welcome 120,000 arrivals in 2014.

Exports to Indonesia earn nearly US$2.2 billion

Vietnam’s export earnings from the Indonesian market were estimated at US$2.19 billion in the first 11 months of 2013, rising by 1.8% compared to figures for a year earlier.

According to recent statistics, November’s export revenue hit US$241.27 million, up 6.3% from the previous year.

Key Vietnamese export items included telephones and spare parts (US$591.9 million, up 105.1%), steel products (US$290.3 million, up 11,0%), transport vehicles, rice, and garment and textile products.

Other exports with rapid growth were computers and spare parts, machines, and electronic products.

Wood exports top US$5.3bln in 2013

Vietnam's wood exports reached US$479 million in December last year, bringing the year's timber turnover to US$5.37 billion.

The figure represents a surge of 15.2% against 2012, announced the Ministry of Agriculture and Rural Development (MARD).

The US, China, Japan and the Republic of Korea were the country's leading importers, MARD noted.

The domestic wood-processing industry has enjoyed strong growth over the past 10 years, with export value increasing at an average of 15.5% each year. It earned US$4.6 billion from exports last year, representing a year-on-year rise of 18%.

Despite the increasing export turnover, the industry has still encountered several challenges, with heavy dependence on imported raw materials being one of the most significant, said MARD's Forestry Department Deputy Director Nguyen Ba Ngai.

The local resources of raw materials have failed to meet the demand from wood processors both in volume and quality. Thus, they had to import materials from overseas, with an average import growth of 12.1% during the 2007-12 period, he stated.

In 2013, these firms imported US$1.68 billion worth of wood and wooden products, a year-on-year rise of 24% from major markets including Laos, the US and China.

Ensuring the supply of raw timber was the sector's top priority, according to the Vietnam Wood and Forestry Product Association's General Secretary, Nguyen Ton Quyen.

Under the national forestry development strategy, by 2020 the industry will be able to meet domestic demand for wood as well as for exports.

This means that until 2020, local producers will continue to import raw materials for export processing, often at high prices, he explained.

"So they must seek solutions to increase their competitive capacity against wood product producers from other countries," Quyen said.

Japanese retailer Aeon opens first VN mall

Japanese retail and financial services corporation Aeon opened its first shopping mall in Viet Nam in HCM City's Tan Phu District on New Year's Day.

The Aeon Mall Tan Phu Celadon includes some 50,000sq.m of retailing space and 120 shops selling Japanese fashion products, household appliances, and interior decoration items, said Oyma Nagahisa, CEO of ASEAN Aeon.

But Yasuo Nishitohge, general director of Aeon Viet Nam, told the media at the opening ceremony that some 80 per cent of the goods on sale in the mall are Vietnamese.

Nagahisa said Aeon has invested more than $100 million in the mall.

Further, Nishitohge said additional malls would open in Binh Duong in October and in Ha Noi in the next two years. In all, Aeon plans to build four malls in Viet Nam, including one more in HCM City.

Shares end the year on a high

The market closed the last trading session of 2013 in the black on both national stock exchanges, and forecasts were positive for the new year.

On Tuesday, the VN-Index on the HCM City Stock Exchange earned 0.86 per cent to reach 504.63 points.

However, liquidity was low due to the approaching holiday. Nearly 61 million shares changed hands with a total value of only VND869.5 billion (US$41.4 million).

The VN30-Index, tracking the southern city's 30 largest shares by capitalisation and liquidity, gained 1.05 per cent to reach 562.2 points, thanks to gains for 26 out codes.

PetroVietnam Transportation (PVT) on Tuesday increased VND700 ($0.03) per share to hit its ceiling price.

Only logistics company Gemadebt (GMD), Masan Group (MSN), PetroVietnam Low-Pressure Gas Distribution (PGD) and Vinamilk (VNM) kept their reference prices on Tuesday, and the southern bourse saw no blue chips losing.

Overall, 182 codes in the southern bourse added value, while 43 codes lost.

On the Ha Noi Stock Exchange, the HNX-Index rose 1.32 per cent to 67.84 points but with low liquidity.

With 39.8 million shares traded, the total value reached VND275.9 billion ($13.13 million).

The HNX30-Index, comprising the top 30 shares of the northern bourse, gained 1.88 per cent to reach 125.98 points.

The increases in benchmark indices during the last trading session of 2013 was attributed to the release of information that the Prime Minister would approve a regulation allowing foreign investors to hold 60 per cent of stakes in several listed companies, an increase from the current 49 per cent they are able to hold.

However, for short-term fluctuations, FPT Securities noted that risks existed and domestic investors should wait for the reactions of the market when the room for foreign investors increases.

The Tuesday rally also marked a successful year for the Vietnamese stock market, with strong long-term recoveries, according to FPT Securities.

Last year, the VN-Index soared 21.97 per cent over the end of 2012, and the HNX-Index jumped 18.83 per cent. Many analysts forecast a good year for the stock market in 2014.

On average, nearly VND1.4 trillion ($66.67 million) was poured into the market each session, with more than 100 million shares traded last year.

Domestic retail gas prices fall

Retail cooking gas prices decreased by VND43,000 ($2) to between VND443,000-VND450,000 ($21-21.4) per 12kg canister, as of yesterday in HCM City and surrounding cities and provinces.

Do Trung Thanh, deputy head of the Business Department of Saigon Petro attributed the decreased cooking gas price to the reduced global price, noting that gas is being sold internationally at $1,015 per tonne in January 2014, down $147.5 since last month.

There was a sudden rise in domestic gas prices in December 2013 by VND80,000 to VND485,000 per 12kg canister beginning December 1, posting a record high since February 2012, according to the Viet Nam Gas Association (VGA).

Ministry cuts fees on trade activities

The Ministry of Finance has issued an ordinance to reduce taxes in accordance with World Trade Organisation's rules, which took effect from 1 January.

Some commodities have been moved to different groups of tariffs on the list for import-export goods

Preferential taxes have been adjusted, especially for electronic components.

Corporate income tax has dropped from 25 to 22 per cent, except for some special cases, since yesterday.

For companies having paid 22 per cent of corporate income tax, they will have the right to pay 20 per cent two years later.

With small enterprises that have low revenues not exceeding VND20 billion (US$1 million) per year, they have to pay only for 20 per cent.

Some enterprises might receive preferential taxes ranging from 10 – 20 per cent.

For example, enterprises that invest in remote and difficult areas, a high-tech zone have to pay 10 per cent for the first 15 years of their projects.

Other projects related to science and technology, or those developing important infrastructure, renewable energy, environmental protection or in education, vocational training, healthcare, culture and sports, also enjoy a tax level of 10 per cent.

A range of 32 – 50 per cent of tax will be applied to oil refineries and other rare natural resources.

Under the adjusted value-added tax law, which will come into effect in April, taxes will not be levied for some kinds of insurance, including health, cultivation and fishery activities.

Ca Mau targets increased revenue

PetroVietnam Ca Mau Fertiliser Company Limited (PVCFC) is set to earn VND5.66 trillion (US$269 million) in revenues in 2014 from the sale of 780,000 tonnes of fertiliser.

According to Chairman of the Board Nguyen Duc Thanh the company will continue to promote campaigns to introduce its products and expand markets in the country's northern and central regions, as well as in Cambodia, Thailand, the Republic of Korea and the Philippines.

PetroVietnam Ca Mau has committed to providing enough fertiliser for farmers in the Cuu Long (Mekong) Delta region, the country's largest rice bowl, and is seeking markets for rice to ensure their interests, Thanh added.

Last year, the company fulfilled its yearly target 15 days ahead of schedule. PVCFC produced 780,000 tonnes of urea, with nearly 750,000 tonnes sold, earning about VND6.443 trillion ($306.8 million). The figure represents a year-on-year increase of 60 per cent in both volume and value..

Binh Duong sets FDI target of $1b

The southern province of Binh Duong is stepping up efforts to draw US$1 billion in foreign direct investment (FDI) for building well-equipped industrial parks next year.

To this end, the province will continue to ramp up the infrastructure in industrial zones (IZs) while choosing projects that are well suited to the locality's development orientation, particularly for energy-efficiency projects.

At the same time, it will zone off some 300ha in Bau Bang industrial park for industry projects. All possible measures will be adopted to draw investors once the Trans-Pacific Partnership deal is signed.

Among the 28 planned IZs in Binh Duong, 26 of them cover an area of over 9,000ha, and eight industrial clusters of 600ha have already had their infrastructure facilities built, including waste-water treatment systems.

The rate of occupancy in industrial parks and clusters hit an average of 65 per cent and 41 per cent respectively. Ten of them obtained a rate of 95-100 per cent, such as VSIP 1, VSIP 2, My Phuoc, Song Than, Binh Duong, Viet Huong, and Dong An.

This year, the IZs poured an additional VND388 billion (US$18.4 million) into technical infrastructure, put 86.4ha of land up for lease, and generated jobs for 12,700 workers.

In 2013, Binh Duong attracted $1.3 billion in FDI, including $818 million for 125 new projects and an additional $501 million for 124 existing projects. It has so far attracted over 2,200 projects, valued at more than $18.7 billion.

Finance ministry slashes fees under WTO rules

The Ministry of Finance has issued an ordinance to reduce taxes in accordance with World Trade Organisation's rules, which took effect from January 1.

Some commodities have been moved to different groups of tariffs on the list for import-export goods.

Preferential taxes have been adjusted, especially for electronic components.

Corporate income tax has dropped from 25 to 22 percent, except for some special cases.

For companies having paid 22 percent of corporate income tax, they will have the right to pay 20 percent two years later.

With small enterprises that have low revenues not exceeding 20 billion VND (1 million USD) per year, they have to pay only for 20 percent.

Some enterprises might receive preferential taxes ranging from 10 - 20 percent.

For example, enterprises that invest in remote and difficult areas, a high-tech zone have to pay 10 percent for the first 15 years of their projects.

Other projects related to science and technology, or those developing important infrastructure, renewable energy, environmental protection or in education, vocational training, healthcare, culture and sports, also enjoy a tax level of 10 percent.

A range of 32 - 50 percent of tax will be applied to oil refineries and other rare natural resources.

Under the adjusted value-added tax law, which will come into effect in April, taxes will not be levied for some kinds of insurance, including health, cultivation and fishery activities.-

Bac Giang aims for high value-added investment

The northern province of Bac Giang has made a point of giving priority to environmentally friendly investment projects and those of high added value in 2014.

The province will accelerate efforts to put good infrastructure in place and make land available to attract investors, while continuing to address problems and assist investors in implementing their projects.

At the same time, the State management of investment projects will be tightened with the aim of eliminating ineffective and delayed schemes.

In 2013, Bac Giang attracted a total of 80 investment projects valued at more than 266 million USD, up 13.6 percent in terms of project numbers and 41 percent in registered capital. They include several large-scale investments such as the Big C trade centre, the Muong Thanh hotel complex and the Fuji industrial zone for support industries.

The province has so far licensed more than 700 investment projects, both domestic and foreign, which have a combined registered capital of nearly 3.8 billion USD. Of them, 430 projects are operational, employing 155,000 local workers. However, 43 projects have been delayed for a long time, 11 of which had their licences withdrawn this year.

Viettel outdoes VNPT second year in a row

2013 is the second year military-run telco giant Viettel has surpassed state-run VNPT’s business performance.

According to a recent report from the Ministry of Information and Communications (MIC), in 2013 Viettel saw VND162.8 trillion ($7.7 billion) in total revenue, achieving its annual target and up 15.2 per cent against 2012.

Estimated pre-tax profit was VND35 trillion ($1.6 billion) with taxes of VND13.5 trillion ($647 million), rising 19.4 per cent against 2012.

VNPT on the other hand reported total revenue of VND119 trillion ($5.6 billion) in 2013, paying VND7.894 trillion ($376 million) in taxes. Its estimated profit for the year was VND9.265 trillion ($441 million).

In 2012 the state telco posted more than VND130 trillion ($6.2 billion) in total revenue, but saw lower profits of VND8.5 trillion ($404 million).

In terms of revenue, Viettel surpassed VNPT by more than VND43.8 trillion ($2 billion) and exceeded it in profits by VND25.8 trillion ($1.2 billion).

2012 was the first year military-run Viettel eclipsed VNPT’s business performance when the former reported total revenue of VND140 trillion ($6.6 billion) against the latter’s VND130.5 trillion ($6.2 billion). Viettel’s profits of VND24.5 trillion ($1.1 billion) nearly tripled those of VNPT.

The MIC report also showed that VNPT’s biggest revenue growth in 2013 came mostly from content services, 45 per cent against 2012, with cable and broadband services hiking by 26 per cent.

The report’s figures showed that by the end of 2013, VNPT had 40.4 million mobile phone subscribers, only 78 per cent of those it had by the end of 2012, explaining why the telco’s revenue from mobile services in 2013 was nearly the same as the previous year.

Also in 2013, VNPT asked the MIC’s permission to provide cable television services throughout the country based on existing infrastructure. It is likely to receive the go-ahead in the near future.

Viettel’s revenue came primarily from its mobile network as it continues to attract subscribers and has taken the lead both in respect to revenue and number of subscribers.

In its most recent count, Viettel reported 54.25 million mobile subscribers, up 1.81 million against the end of 2012. Also in 2013 Viettel saw nearly 2.15 million new 3G subscribers and 44,000 new Internet and broadband subscribers.

According to Viettel deputy general director Nguyen Manh Hung, by 2015 up to 40 per cent of the group’s workforce will focus on developing applications and telecom services would account for half of the group’s total global revenue.

Vietnam clamps down on online businesses

Owners of unlicensed online trading sites will be fined up to VND100 million (USD4,731), according to a new government’s regulation.

Decree 185, aimed at consumer protection, which changes administrative punishments over violations in trading and production of fake or banned goods, takes effect January 1.

The regulation stipulates that those who own online trading sites, as well as other types of websites managed by the Ministry of Industry and Trade, must register for a license.

Violators will be fined from VND10 million - VND15 million (USD473.14-USD709.72) per individual, and between VND10 million and VND100 million (USD473.14-USD4,731) for organisation.

A report on e-commerce in Vietnam in 2012 showed that 57% of Internet users in the country shopped online and each spent USD150 per year.

A majority of these online transactions are for clothes, footwear, cosmetics, home appliances, food and books.

However, over 60% of those questioned rated the quality of service as medium and only 29% said they were satisfied. The majority of complaints involved bad quality products, bad shipping services, the risks of giving out personal information and complicated procedures.

HCMC activates online business registration

In early 2014 those who want to set up a new business in Ho Chi Minh City are able to register online with the municipal Department of Planning and Investment (DPI).

The department was due to start receiving business registration dossiers on January 2, DPI deputy director Tran Thi Binh Minh told VIR. The move aims to lessen paperwork, save time and cost for enterprises and the regulator, as well as make life easier for entrepreneurs.

Minh explained the system would lessen the load on entrepreneurs by allowing them to complete registrations at home without having to go back and forth to the office several times to complete the paperwork. “This system will instruct them on how to complete the entire registration,” she added. The new system is expected to reduce overcrowding at the DPI office.

While the online system is available to all, individuals and enterprises can still select any of the three registration processes – filing online and receiving results by courier, submitting dossiers at the department and receiving results by courier, or submitting dossiers at the department’s office and receiving results also at the office.

The DPI expects to see 20 per cent of new enterprises registering at home in 2014, and half by 2015.

The city’s online business registration pilot programme was carried out through 2011 but was then put on hold due to a technical problem after the Ministry of Planning and Investment launched the unified National Business Registration Portal.

Vietnamese shrimp exporters achieve great success in 2013

Vietnam became the world’s third largest shrimp exporter in 2013 with export production at around 500,000 tons and export turnover exceeding US$3 billion for the first time, according to the Ministry of Agriculture and Rural Development.

Last year, the US no longer imposed double tariffs on Vietnamese shrimps after admitting that Vietnamese shrimps did not receive subsidy from the Government. In addition, local shrimp industry recovered when production of white-leg shrimps reached 280,000 tons, an increase of more than 50 percent against the previous year.

The price of common tiger prawn was around VND240,000-280,000 per kilogram and that of white-leg shrimp was around VND140,000-190,000 per kilogram in the last days of 2013 in the Mekong Delta provinces. Some farmers saw profit of nearly VND1 billion per hectare thanks to high production and high price.

In 2013, the country’s seafood exports hit $6.5 billion.

Enterprises in the face of indispensable requirements

Vietnamese businesses need to quickly restructure themselves to improve performance and competitive capacity in the current context of the country’s comprehensive international integration.

According to the Ministry of Planning and Investment, during 11 months of 2013, there were 71,018 newly-established registered companies with the total registered capital of VND 359,470 billion, up 9.5% against the same period in 2012. Meanwhile, 54,932 companies completed dissolution procedures and suspended operations, an increase of 8.4% compared to the same period in 2012.

Also during this time, the number of suspended firms back to operation is 12,709, up 8.2% compared with 2012. This shows that the number of newly registered enterprises and back-to-operation ones in 2013 have been no longer one-way movement with a large proportion of dissolved and suspended companies as 2012.

However, according to Mr. Huynh Van Minh, the Chairman of Ho Chi Minh City's business association, in 2013, many businesses, especially small ones did not really attach enough importance to restructuring so they have been dislodged from the market under the pressure of competition.

This situation is likely to occur more severely as the country is joining a number of free trade agreement talk, including TPP. Therefore, restructuring is not just the work of small and medium-sized enterprises, struggling businesses but also large ones in the quest of sustainable development.

"The power" of FDI enterprises should also be mentioned here. According to Dr. Tran Du Lich, deputy head of Ho Chi Minh City National Assembly Delegation, the sector have many advantages in which administration capacity and resilience are among the most dominant.

On the other hand, while TPP is under negotiations, many foreign enterprises have energetically poured capital in the areas of Viet Nam’s competitive advantages in order to wait in front for the opportunities while most of Vietnamese companies are still ambiguous about TPP.

Against this background, domestic companies have no choice but to rapidly restructure themselves keep up with modern economic trends.

One restructuring solution, favored by small and medium-sized enterprises, is finding partners, sharing financial burdens. Recent public and non-public mergers and acquisitions (M&A) have shown that enterprises are active in restructuring operations.

The two typical acquisition cases are the world leading investment fund Warburg Pincus and Bank of Tokyo Mitsubishi which buy shares of Vincom Retails and Vietinbank, respectively.

According to Mr. David Blackhall, the CEO of Vinaland Limited (an affiliate of Vinacapital Group), those are the important and meaningful mergers and acquisitions (M&A) deals which reinforce foreign investors’ confidence in Viet Nam’s business environment, concurrently impulse the investment capital inflows, supporting Vietnamese enterprises in restructuring.

Clean technology strategy passed

By 2020, all new energy-intensive industry projects possibly causing serious pollution to the environment shall have to meet criteria for clean technology.         

This is part of the newly-approved strategy to use clean technology by 2020 with a vision to 2030.

Under the strategy, 60-70% of the current energy-intensive industry facilities shall have to finalize  and implement roadmaps for  the use of clean technology.

The strategy aims to encourage application of clean and environmentally-friendly technologies; improve efficiency of energy and natural resource usage in the industrial sector in order to promote green development, mitigate impacts of climate change and better living standards.

Specifically, technical standards will be designed and applied in industries which consume a lot of energy and cause heavy pollution such as weaving and dying, production of fertilizers and pesticide, metallurgy, exploitation and manufacturing of minerals; thermo-electricity; paper making, cement and sugarcane.

Export activities in focus

Viet Nam pocketed US$ 132.17 billion from exporting goods in 2013, the second consecutive year the country gained a trade surplus.

The agro-forestry and fishery exports were estimated at US$ 19.85 billion, accounting for 15% of the total export turnover. However, the figure was 5.3% lower than the previous year.

Fuel and mineral exports valued US$ 9.6 billion, representing 7.2% of the national export volume. Meanwhile, the processing industry earned US$ 93 billion, making up 70.5% of the total.

Noticeably, domestic enterprises’ export share continued to recover and grew 3.5% compared to 1.2% in 2012, partly thanks to initially  making use signed of signed FTA with ASEAN, the Republic of Korea, Japan and India, according to an official of the Ministry of Industry and Trade.

This year featured with sustained exports to traditional markets such as the Southeast Asia, the EU, Japan, and the US.

Since 2007, trade deficit have declined sharply and the trade balance shifted from deficit to surplus.  The trade gap was 29.1% in 2007; 28.8% in 2008; 22.5% in 2009; 17.5% in 2010; 10.1% in 2011.

The Southeast Asian nation gained a trade surplus of US$ 749 million for the first time in 2012 and the figure is projected to increase to US$ 863 million in 2013.

VN seeks new labor export markets

In 2014, Viet Nam has set target to send 90,000 guest workers abroad, up 5%  against last year, according to the Ministry of Labor, Invalid and Social Affairs (MOLISA).

The labor export outlook is still optimistic, said Dao Cong Hai, Deputy Head of the Overseas Labor Management Department under the MOLISA.

Mr. Hai said traditional markets are projected to receive more Vietnamese guest workers, meanwhile, potential markets will be expanded and promoted.  

The door for skilled and high-quality workers is opening particularly in Germany and Japan under pilot programs on nurses and orderlies.

In 2014, traditional markets like Japan, Taiwan and Malaysia were forecast to have high demand for guest workers including Vietnamese.

The Republic of Korea (RoK) is expected to resume receiving Vietnamese guest workers as the percentage of Vietnamese guest workers illegally residing in the RoK dropped sharply from 49.9% to only 39.2% in October, 2013.

The Overseas Labor Management Department said it would help raise the competence of labor export enterprises; renovate selection and training work for laborers; and protect legitimate rights of guest workers.

Food prices rise for Tet Holiday

The prices of essential foods have been on the rise as Tet nears.

Thanh Huong, a local in District 11, HCMC, said, "I went shopping early to avoid high prices as we come closer to the holiday, but the prices were still higher than they were two weeks ago, and going up every day."

Banana prices have increased by 50% and pomelo by 10-20% as of late November. One trader who works out of Ba Chieu Market also said that it is difficult to keep prices stable. Even though the demand is picking up, the wholesalers stockpile goods to wait until prices are higher. Since many consumers loosen their purse strings during Tet, it allows traders to increase profits.

The cost of sweets, beverages and other specialties will increase by an estimated 10-20% because of the rising price of transport and raw materials.

Nguyen Phuong, an employee at ACB Bank, said, "Every year at this time the authorities assure us that they will be able to keep prices stable, but we watch them rise."

Many traders in Hanoi have increased their prices even though consumption seems to be down this year. "Many people went shopping at this time last year, but now they are only asking about prices," said one trader in Dong Xa Market.

Some other merchants said customers are not doing their normal early shopping because of the tough economic times, low wages and fewer bonuses. However, Ha Linh, a local who lives on Nguyen Bieu Street, said, "It's not the recession, many people have already stocked up dried food. Plus, people nowadays prefer supermarkets for fear of unhygienic foods."

The Hanoi Municipal Department for Industry and Trade forecast the consumer price index (CPI) in January 2014 will pick up by 1.1% compared to the previous month.

Agriculture sector eyes US$28.5 bn export value in 2014

The agricultural sector has set a target of earning US$28.5 billion from exports this year, including US$8.5 billion in trade surplus, up 3.63% over last year, said the Ministry of Agriculture and Rural Development (MARD).

To achieve the target, the Ministry is implementing a restructuring plan to build the agricultural sector with high added value and sustainable growth and develop new rural areas to speed up economic development, ensure social security and improve people’s living standards.

The MARD is also expected to reduce 130,000 hectares of rice cultivation area and to grow other industrial crops without expanding coffee growing areas.

The focus will be also on planting an additional 20,000 hectares of rubber trees and maintaining the acreage of cashew nut trees aiming to improve economic efficiency and output.

This year, the agricultural sector plans to develop breeding activities under new farming models with the application of hi-technology.

The fisheries sector aims to produce 6.5 million tonnes of aquatic products including 2.6 million tonnes from exploitation and 3.6 million from aquaculture, which will increase production value by 3.5-4.0%.

Special priority is being given to developing the processing industry which has great potential to increase the added value of products under a proper production process from, post-harvest preservation, processing and consumption.

Last year’s agro-forestry-fisheries export value was estimated at US$27.5 billion, up 0.7% against 2012 with a trade surplus reaching over US$8.5 billion.

Export items earning more than US$1 billion included rice, coffee, rubber, cashew nuts, cassavas, wooden products, shrimps and tra fish.

Tet market price up 10% in Hanoi

Market prices are likely to increase  by 10% during the lunar New Year (Tet) holiday, according to the Hanoi Municipal Department for Industry and Trade.

At present, there’s a rising price of rice due to growing demands on the Hanoi market and a 10-20% decrease in rice output in the summer-autumn crop.

Rice price is predicted to increase by 5%, especially the price of high-quality rice and sticky rice.

The price of chicken, pork and beef will also surge by 5-10% to meet the increasing demand of Hanoians during the nation’s largest festival.

Despite good weather and an abundant supply of crops, the price of vegetables is also expected to experience a sharp increase of 10-15%.

Current economic difficulties have led to a dramatic fall of 0.34% in food prices in December 2013 – the lowest level reached over the last decade.

The Hanoi Municipal Department for Industry and Trade forecast the consumer price index (CPI) in January 2014 will pick up by 1.1% compared to the previous month.

The Department is strictly monitoring the supply and demand of essential goods in the capital city to keep market prices stable during the Tet holiday. It will also operate trade centres and wholesale markets effectively to ensure supply-demand balance.

Monetary policy shortcomings

Despite lower interest rates, strongly credit growth was mostly seen in the last months of 2013, proving that capital flow has yet to take effect.

The Government said 2013’s fiscal and credit policy adjustments accorded with macroeconomic realities and helped businesses through difficulties

Banks’ interest rates dropped sharply in 2013. Conversely, total payment rapidly increased (above 16%). Credit growth resulted in better services, a lower bad debt ratio, steady foreign exchange rates, and high foreign currency reverses.

Minister of Planning and Investment Bui Quang Vinh said the interest rate strategy controlled inflation, relieved some of the pressures burdening businesses, and improved credit solution efficacy.

The Government focused its efforts on the priorities of export production, agriculture, support industry, credit prevention funds, and bad debt settlement.

Minister Vinh explained credit growth in the first half of 2013 undercut set targets because of weak capital mobilisation.

Transport Minister Dinh La Thang said yearly credit growth was estimated at 10%, with much of the growth occurring as 2013 drew to a close. The strong flows of capital so late in the year might cause problems for investment disbursement.

The Prime Minister has asked for 2014 monetary policy to stay flexible and effective. The State Bank of Vietnam (SBV) should actively deploy its available tools to keep a check on inflation and ensure macroeconomic stability, and credit organisation liquidity.

The Government leader stressed the need for responsive adjustments of interest rates and foreign exchange rates that protect the value of the Vietnam Dong (VND), increase the State’s foreign currency reserves, and improve Vietnam’s international payment balance.

He urged relevant ministries and agencies to carefully manage the local foreign exchange and gold market. The State must monopolise gold import-export activity to control the domestic gold market.

The SBV should provide better credit services, resolve bad debts, establish risk prevention funds, advance debt restructuring, and expand oversight on credit organisation operations, Dung said.

Economists praised the Vietnam Asset Management Company’s (VAMC) early results while acknowledging shortcomings in approaches to lingering bad debts that restricted credit growth in the first months of 2013.

SBV Governor Nguyen Van Binh affirmed the State budget was not used to purchase bad debts. The VAMC offered better conditions for businesses to have easier access to new capital loans from credit organisations.

The VAMC purchased VND30–35 trillion worth of bad debts in 2013, a figure expected to grow to VND100–150 trillion during 2014.

Binh believes the bad debts will be restructured ahead of introducing a debt purchasing market for all local and foreign investors.

According to the SBV Governor, many investors have expressed an interest in buying local businesses’ debts.

Tougher measures are required to deal with debts, protect domestic investor rights, and boost national economic development.

Dung Quat: 5.18 mln tonnes of products in 2014

The Binh Son Refining and Petrochemical Company, which manages and operates the Dung Quat Oil Refinery, will strive to churn out more than 5.18 million tonnes of products in 2014.

The plan was unveiled at a December 31 congress of BSR under the Vietnam National Oil and Gas Group (PetroVietnam).

With the output, the company is expected to pocket more than roughly US$5.3 billion, contributing over VND13.7 trillion to the State budget.

The figures represent increases ranging from 11.4 percent to 14 percent compared with the target set by PetroVietnam.

To realise the plan, the company has focused on managing and operating the Dung Quat Oil Refinery based in the central province of Quang Ngai safely and stably, with regular overall maintenance and projects on the upgrading, expansion and privatisation of the plant, said BSR General Director Dinh Van Ngoc.

Last year, the company turned out 6.6 million tonnes of products, up 17 percent, and sold 6.5 million tonnes of products, up 14 percent, earning revenue of more than VND150 trillion and contributing over VND27.2 trillion to the State budget, the highest amount over the past four years.

The company took the initiative in signing contracts and ensuring the stable, safe and effective operation of the plant, helping stabilise the market.

It also placed importance on security, environmental protection, fire fighting and maintenance work.

Binh Duong sets US$1 bn FDI target for 2014

The southern province of Binh Duong has acknowledged ongoing economic difficulties and set a modest US$1 billion foreign direct investment (FDI) target for 2014.

It will continue infrastructure upgrades in its industrial parks (IPs) and preference projects according with provincial development ambitions.

Binh Duong encourages industrial energy-saving technologies, increasing the localisation rate, promoting product quality and competitiveness, limiting labour intensity, and reducing environmental impact

The locality has allocated 300 hectares in Bau Bang Industrial Zone to textile and support industry projects. It is heavily investing in support industries to anticipate a high influx of foreign investment as soon as theTrans-Pacific Partnership (TPP) agreement is signed.

Twenty-six of the province’s 28 IPs are operational, covering 9,073 hectares, while its eight industrial clusters cover an additional 600 hectares.  

IP rental rates reached 65%, and industrial clusters’ 41%. Ten IPs enjoy 95%–100% rental rates, including VSIP 1, VSIP 2, My Phuoc, Song Than, Binh Duong, Viet Huong, and Dong An.

The province’s IPs invested nearly VND390 billion in infrastructure and leased nearly 90 hectares of land to new projects in 2013, creating jobs for 12,700 labourers.

Binh Duong has so far attracted 2,209 projects capitalised at a total of US$8,720 billion.

Hoa Binh Hydropower Plant generates 175 billion kWh

Hoa Binh Hydropower JSC was awarded the Independence Order, First Class, in northwestern province of Hoa Binh on December 14 at a ceremony to mark its 25th anniversary.

About 75km west of Hanoi, the Hoa Binh Hydropower Plant includes eight 240MW power generator units with total installed capacity of 1,920MW, and has become a major supplier to the national grid.

As a major national power supplier, Hoa Binh Hydropower JSC, an affiliate of the Electricity of Vietnam group, has so far produced 175 billion kWh to cater for the needs of the country and reached an annual output of 9-10 billion kWh.

Especially since the formation of the Son La hydroelectric reservoir, Hoa Binh plant has seen markedly increased generation capacity. It is expected to produce over 10 billion kWh this year. Currently, its output has accounted for approximately 8 percent of the national total.

The plant is modernly equipped and designed, able to ensure stable power supply, especially for Hanoi, as well as fast recovery of major incidents in the national grid. It also means greatly in the irrigation work and improving water transport

The reservoir of the plant has a capacity of nearly 10 billion cu.m and a flood control capacity of 5.6 billion cu.m (not taking into account the reservoir in Son La Hydropower Plant). The reservoir participated actively and effectively in the flood control in the Red River Delta and Hanoi.

The historical flood peaking at 22,650 cu.m per second appearing in August 1996 was controlled by 42 percent thanks to the reservoir of the Hoa Binh Hydropower Plant, preventing dike breaking and flooding downstream. Since the plant entered operation, the people living along the rivers of Da and Red have never experienced flooding or inundation threats.

The reservoir is about 200km in length, favourable for trade between provinces in the Red River Delta and the northwest mountains. Thanks to the reservoir, water-borne trade is facilitated especially during the dry season. The super long and heavy devices were easily transported from Hai Phong to Son La quickly and safely through Hoa Binh, contributing to a 3-year-earlier finish of the Son La Hydroelectric Plant.

As a spearhead to the provincial socio-economic development, the JSC usually contributes a large proportion to the total revenue of Hoa Binh province, up to 850 billion VND per year. In addition, since 2009, the company has paid fees for forest environmental services from 150-185 billion VND per year through the Vietnam Forest Protection and Development Fund.

Hoa Binh Hydropower Plant has become a popular tourist destination, attracting thousands of local and foreign visitors to visit each year, contributing to creating more jobs for local people.

$4.5b thermal plant takes shape

Northern Nam Dinh province will support the construction of a US$4.5 billion Hai Hau thermal power plant in Hai Hau District beginning in 2014, said the province's chairman Nguyen Van Tuan.

The 2,400MW plant, which is 95 per cent funded by the Republic of Korea's Taekwang Vina Company and 5 per cent by Vietnamese partners, will span an area of 251ha in Hai Ninh and Hai Chau Communes.

Chairman Tuan called the plant one of the key components in the socio – economic development plan for Nam Dinh Province in 2014, adding that the provincial government would assist in clearance at the plant site.

Being designed in two phases, two turbines with a total capacity of 1,200 MW will be built in 2016-17, while the other two turbines, with the same capacity, will be built in 2020-21.

The plant will operate under a BOT agreement (build, operate and transfer) for 25 years, with estimated revenues expected to reach $25 billion.

According to Pham Quoc Khanh, deputy director of the provincial planning and investment department, Taekwang Vina was arranging the financing, contracts for the plant, especially BOT contracts, as well as approving the feasibility report.

Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR