PetroVietnam arm supplies gas to Ca Mau fertiliser plant

PetroVietnam has announced that its subsidiary company, Ca Mau Gas, has successfully supplied gas to Ca Mau Fertiliser Plant.

The plant will consume about 500 million cubic metres of gas and produce 800,000 tonnes of urea fertiliser per year.

As planned, the plant will become operational in November.

Province pulls plug on 12 delayed projects

The People's Committee of southwestern Tay Ninh Province has decided to withdraw investment from 12 projects, which it said were not being carried out as planned.

Of the projects, eight belonged to domestic investors and four to foreign interests.

The committee has also requested that relevant bodies keep better track of 21 other projects in the province.

Viet Nam, Thailand boost audit co-operation

A delegation from the State Audit Office of Viet Nam (SAV) led by Deputy Chief State Auditor Cao Tan Khong visited Thailand last week to strengthen bilateral ties.

Khong held a working session with Deputy Head of the Office of the Auditor General of Thailand (OAG) Pisit Leelavachirropas to share information and experience, to plan audits, to define long-term targets and to discuss opportunities for future co-operation.

The two sides proposed boosting co-operation through the exchange of delegations, sending officials and experts to seminars and discussions and actively supporting each other in the framework of the Asian Organisation of Supreme Audit Institutions (ASOSAI) and the ASEAN Supreme Audit Institution (ASEAN SAI).

New flights to connect Vinh, Buon Me Thuot

Air Mekong would run a direct air route between Vinh, Buon Me Thuot and HCM City three times a week beginning October 1, the airline announced at its launching celebration yesterday.

Accordingly, flights will depart from Vinh and Buon Me Thuot on Tuesday, Thursday and Saturday.

It is Air Mekong's ninth route and it is expected to ease transport between Central Highland provinces and the north-central region.

Indian pharma firms mull over local expansion

Indian drug companies in Viet Nam will hold a one-day meeting in HCM City this week with senior health officials and hospital representatives to explore opportunities to supply the country's hospital network.

At a media briefing organised by the Indian Business Chamber in Viet Nam (Incham) about the third annual conference to be held this Friday, Indian drug executives said they hoped to expand their market share in a country where healthcare demands and living standards were rising.

Confab eyes deposit insurance

National Assembly Deputy Chairwoman Nguyen Thi Kim Ngan discussed the provisions of a new bill on deposit insurance at a conference held in HCM City last Saturday .

Many banks recently ran into difficulty trying to attract deposits, and exceeded the interest rate ceiling set by the central bank.

The violation had been widespread and caused high risk, Sai Gon Giai Phong (Liberated Saigon) newspaper reported.

Hitherto, lenders had deposit insurance of up to VND50 million (US$2,400) per deposit, but the bill would make it mandatory for all credit institutions, except policy banks, to fully insure their deposits.

Only dong deposits will be covered.

The bill also envisages covering only individual depositors, but participants at the meeting said credit institutions should also be provided with deposit insurance.

Tran Du Lich, deputy head of the city's National Assembly delegation, said however that credit institutions who traded in deposits had to bear the risks themselves.

The law should not provide cover for artificial persons, he added.

German venture opens plant

German joint venture Fresenius Kabi Bidiphar Co, a market leader in infusion therapy and clinical nutrition, opened a new plant in Quy Nhon yesterday.

The 15,000sq.m plant, which was two years in the construction, cost VND340 billion (US$16.5 million) and replaces German firm Fresenius Kabi's existing production facility in Quy Nhon.

It allows the company to almost double its manufacturing capacity for infusion solutions and liquid medications, mostly meant for the Vietnamese market.

German Minister of State Cornelia Pieper highlighted the plant's role in German-Vietnamese relations: "I am pleased to see that Fresenius Kabi has opened a new plant in Quy Nhon. Direct investments such as these benefit both Germany and Viet Nam. And they serve to secure jobs in both countries as well.

"What is more, they are an important part of our two countries working more closely together."

Nearly 380 employees will work at the facility.

The manufacture of infusion solutions has already received a GMP (good manufacturing practice) certificate based on guidelines set down by the World Health Organisation.

Most of the employees from the former plant will be given jobs in the new facility.

Fresenius Kabi of Germany holds 51 per cent in the JV, Bidiphar, a State-owned health care company based in Quy Nhon, owns 20 per cent, and others account for the 29 per cent.

Jan Walter, managing director of Fresenius Kabi for Viet Nam, Cambodia and Laos for the last three years, said sales in Viet Nam had grown at more than 20 per cent annually.

Officials discuss ways to raise SME competitiveness

To help small – and medium-sized enterprises raise their competitiveness, the Government should offer support to improve their technological capability and the quality of their workforce, delegates told a meeting in HCM City last week.

The Viet Nam Chamber of Commerce and Industry (VCCI), International Labour Organisation and the Ministry of Planning and Investment's Agency for Enterprises Development organised the meeting to collect ideas from relevant ministries, agencies and enterprises on SME development in the 2011-15 period.

In recent years, SMEs have created many new jobs, reduced unemployment, and helped economic, political and social stability.

However, they face difficulties because of their small size, obsolete technology, low management capability and restricted access to credit as well as land for production.

According to the Ministry of Planning and Investment, companies specialising in industrial production account for one-third of the country's total enterprises, 12 per cent of which have advanced technology.

Nearly 88 per cent of SMEs have either outdated or of average standards.

In addition, the annual average rate of technological innovation in Viet Nam has reached only 5-7 per cent, while it is an average of 20 per cent worldwide.

Delegates said the Government's past polices to support SMEs in their upgrading of technology have not been effective.

In addition, complicated administrative procedures and inconsistency among ministries and agencies have caused difficulties for enterprises, they said.

They suggested that the Government continue to complete the legal environment and reform its policies to encourage enterprises in investing in new technology.

Pham Thi Thu Hang, VCCI general secretary said Viet Nam should shift to quality growth and develop equal SMEs, especially focusing on developing enterprises that export high value-added products.

According to a programme to support technology renewal for SMEs until 2020, the country targets raising the number of companies participating in technology innovation by 10 per cent per year by 2015.

Around 30,000 engineers, technicians and managers of SMEs would be trained in technology management and 40,000 companies would be involved in technological innovation.

Delegates at the conference also raised concerns about the country's weak auxiliary industry and proposed the Government issue policies to accelerate the number and capacity of SMEs in the sector.

Vo Xuan Thuyen, representative of the Agency for Enterprise Development, said in the next five years Viet Nam would continue to restructure its economy to create an equal competitive environment for all economic sectors in an effort to enhance competitiveness.

Mekong Delta salt farmers in despair over drop in prices  

Salt farmers in the Mekong Delta province of Bac Lieu are in a quandary over continually decreasing price of salt.

Farmer Tran Van Thang in Binh Dien hamlet in Long Dien commune of district Dong Hai said that salt making is very strenuous and the continually decreasing salt prices are discouraging people from working in this profession.

Thang has now switched three hectares of salt making area into breeding tiger shrimps although he has been in the business of producing salt for the last ten years.

Similarly, farmer Nam Ninh, Thang’s neighbor, has converted his salt making land into a pond for raising shrimps.

However other salt farmers are still deliberating whether to continue making salt as a result of continual drop in prices.

Mai Thanh Hung, deputy chief of the Department of Agriculture and Rural Development in district Dong Hai, said the task of making salt is very precarious at this time and therefore farmers have converted their land into shrimp breeding farms as shrimps are presently raking in good profits.

The department of agriculture and rural development in the Mekong Delta provinces say salt farmers find it difficult to earn a lucrative income in their trade. They barely make ends meet as individual farmers work in very small fields and unstable pricing continues to worsen their situation.

Presently salt farmers are in a dilemma as thousands of tons of salt is still lying in stock with them as they have been unable to sell, with traders refusing to purchase after the drop in retail pricing.

Farmers need to sell their stock urgently before the start of the next season in November and have requested the government to move in to take action to resolve this issue, as they need immediate capital to begin the next season.

Traders proposed purchasing white salt at VND1,000 per kilogram and black salt at VND600 per kilogram. However, now they seem unwilling to negotiate once the price of white salt dropped to VND800 a kilogram and VND500 a kilogram for black salt.

Exports up by 54% in farm sector

Export turnover of agricultural, forestry and seafood products in the first nine months of the year is estimated to reach US$21.2 billion, up 54.1 per cent over the same period last year, according to the Ministry of Agriculture and Rural Development.

During the period, key agricultural products such as rice, coffee and rubber accounted for $10.7 billion, up 49.3 per cent; seafood hit $4.4 billion, up 26.7 per cent; and forestry products reached $3 billion, up 17 per cent.

In September alone, the country exported $2.4 billion worth of produce, up $200 million against the previous month.

Director of the ministry's Information and Statistics Centre, Nguyen Viet Chien said a global price hike had helped to significantly lift turnover as the volume of many key export items had risen only slightly during the period.

Thanks to a price hike of more than 54 per cent, coffee exports earned $2.2 billion in the first nine months, up by 66.5 per cent over the same period last year, though shipments were up by only 8.9 per cent to 994,000 tonnes.

Rubber export turnover during the period also surged more than 61 per cent to $2.3 billion, despite an export volume rise of only 3.3 per cent to 530,000 tonnes. Average rubber export prices during the period reached $1,520 per tonne.

Despite an export volume decrease of 7.8 per cent to 129,000 tonnes, cashew valued at $1.1 billion, up 38.6 per cent.

With a shipment of 6.2 million tonnes, up 17.44 per cent, rice was the largest export earner of agricultural products with $3.1 billion, up 25.6 per cent in value. Most Vietnamese rice was exported to the Philippines, Indonesia, Malaysia, Cuba, Senegal, Bangladesh and Ivory Coast, of which Indonesia for the first time surpassed the Philippines to become Viet Nam's largest rice importer in the first nine months.

With an export turnover of $2.9 billion in the first nine months, up 17 per cent over the same period last year, woodwork products were the main contributor to the high rise in the country's forestry product export during the first nine months, the ministry said.

As demand for Viet Nam's agricultural, forestry and seafood products is showing positive signs, the ministry forecast that the industry would exceed the export target of $23 billion this year, up by $3.8 billion over last year.

Measures outlined to cut inflation
 
Viet Nam was resolved to curb inflation, stabilise the macro-economy, ensure social security and achieve about 6 percent in GDP growth in 2011, said Prime Minister Nguyen Tan Dung at the monthly Government meeting in the capital yesterday.

Reviewing the socio-economic situation in September and the first nine months of 2011, the cabinet members agreed that the country's socio-economic development had stabilised, inflation had been kept under control and the consumer price index (CPI) in September had risen less than 1 per cent.

In the first nine months, the GDP growth was 5.76 per cent, in which industrial production saw an increase of 12 per cent compared to the same period last year; agriculture increased by 4.1 per cent; foreign tourists increased by 15.5 per cent; exports gained over $70 billion – an increase of 35.4 per cent; foreign investment increased by 0.2 per cent and more than 1.1 million new jobs were created.

However, in the period under review, the import-surplus was rather high – an increase of 26.9 per cent compared with the same period last year.

According to Deputy Prime Minister Vu Van Ninh, in the last quarter of 2011, the demand for imports was expected to increase, putting pressure on foreign exchange and prices.

"This pressure might lead to high inflation," said Ninh.

Participants at the meeting asked the Government to continue to implement a strict control on monetary policy while ensuring sufficient credit for production and business, particularly for agriculture, rural areas, electricity and small and medium enterprises.

Dung asked the State Bank of Viet Nam SBV to focus more on the control of bad debt, particularly in real estate held by joint stock banks, while adopting measures to reduce the interest rate in line with inflation.

Dung promised that the Government would extend support to agricultural production and small and medium enterprises.

He also asked ministries, sectors and localities to review and improve the efficiency of public investment with more focus on urgent projects which are to be completed soon, particularly those serving the people, agriculture and business production, as well as social security.

Regarding the performance of State owned enterprises (SOEs) over the past five years and orientation for the next five years, PM Dung asked the Ministry of Finance to develop a plan to renew SOEs, particularly the restructuring of corporations and economic groups.

Participants asked the PM to take actions against SOEs that had operated at a loss for several consecutive years and withdraw their capital investment in businesses which were not within their main trade.

Minister of Transport Dinh La Thang said in the remaining months of the year, his ministry would make the final decision on the fate of the Waterway Construction Corporation after prolonged bad performance.

Deputy Prime Minister Vu Van Ninh asked the Government to come up with specific measures to overhaul the State Economic Groups and Corporations, speed up the equitisation of SOEs and come up with plans to settle their bad debt.
 
Companies late in plans for delisting

At least six enterprises have indicated a desire to delist shares since May, including Song Da Construction Co 27 (S27), Sai Gon – Quy Nhon Mining Corp (SQC), Sai Gon Telecom (SGT), Interfood (IFS), Vinaconex 11 (V11) and pharmaceutical company Mekophar (MKP). However, none of them have officially completed the procedure and their shares are still being traded on stock exchanges.

A source from S27 told the Dau tu Chung khoan (Securities Investment) newspaper that the company had hoped to attract more capital from the stock market. "However, the listing didn't fulfil our expectations, even though we have high demand for capital to finish our projects," the source said.

In addition, the company was subject to higher costs as a listed enterprise, and the liquidity of S27 shares was not improved after listing.

The company also cited the pressure of disclosure as another reason why the process came to a halt. "So we have decided to find other solutions for raising funds. Our shares will be listed again when our business gets better," the source said.

Other companies explained their plan to delist in an effort to "restructure to enhance operations". Recently, the Ha Noi Stock Exchange issued a warning about V11, as auditors doubted its capability to continue business.

The main shareholder of S27, accounting for a 37 per cent stake, agreed with the plan to delist. However, the final decision still depends on the opinions of other shareholders.

IFS suspended the delisting process with the HCM Stock Exchange because it was still discussing how to trade its shares after restructuring, the company said. It would probably buy back shares from investors to reduce the number of shareholders to just under 100. It would then operate under the Law of Enterprises instead of Securities Law.

Investor's benefits will be greatly affected if businesses announce delisting but do not follow through, as share prices often decline after companies change their business strategies.

Under current regulations, a company would be eligible to delist shares if 65 per cent of its shareholders agree. It would then have to hand in relevant documents to the stock exchange for approval.

Ports forced to accept losses due to cutthroat competition
 
The bruising competition among port operators is forcing them to constantly undercut each other and sustain losses they cannot afford, a situation for which the industry blames the lack of Government oversight.

The Viet Nam Seaports Association (VPA) said Vietnamese ports, which provide the same quality of service as those in neighbouring countries, charged the lowest rates.

They charge a mere US$32 per twenty-foot equivalent units (TEUs) compared to $55 in Thailand, $76 in China and $117 in Singapore.

Port operators have calculated that ports in Ba Ria-Vung Tau, for instance, need to charge at least $88 to break even but only charge $32.

The VPA blames the Ministry of Finance for not applying a floor price to prevent undercutting.

It has sought not only a floor price but also for the Government to play the central role in managing seaport investment and other maritime activities like foreign investors' role in port management.

These are part of its efforts to gradually build a roadmap for creating a single market for port fees, it says.

Shippers dictate prices now mainly because unplanned development of ports has meant they are situated close to each other in many parts of the country.

In the central region, for instance, they are situated just 20-30km from each other on average. In the Dung Quat Industrial Zone alone, there are four deep-sea ports.

The result has been a loss of $32.5 million from container traffic alone for the industry.

If rates fall by 15 per cent again like they did last year, the loss will rise to $34 million this year, the VPA estimates.

All this threatens to give control to foreign investors who are partners in many ports, Tuoi Tre newspaper warned in a report.

At the VPA's annual meeting in HCM City last week, a representative of the Hai Phong Seaport Company Ltd said the undercutting in the industry was due to the Government's failure to exercise control.

On average, container rates have declined by 15-20 per cent in the last few years, with some ports even cutting prices by 30 per cent.

A representative of a leading central port said this year his port had to cut rates by nearly 20 per cent.

Ho Kim Lan, president of the VPA, blamed ports in Ba Ria-Vung Tau – who lead the country in terms of technology and investment – for initiating the fee cuts and forcing others to follow.

But the VPA blames this on the large number of ports that have been built in the region in the last few years.

As a result, the cluster, which can accommodate ships of up to 130,000 tonnes, works at a mere 20 per cent capacity.

In 1999 the Government approved a master plan for the development of the country's port network through 2010, and under this more and more ports are being renovated to meet international standards.

Budget deficit tops $2.14 bln

The budget deficit so far this year is estimated at VND44.5 trillion (US$2.14 billion), or 2.6 percent of GDP, the General Statistics Office said.

Revenues as of mid-September were VND467.1 trillion ($21.42 billion), 78.5 percent of the full-year estimate, while spending was VND511.6 trillion.

The full-year deficit target is 4.9 percent of GDP.

Domestic taxes yielded VND284.4 trillion, 26.5 percent below estimate, and import-export tariffs were worth VND107.3 trillion.

The government spent VND101.5 trillion on basic construction, ND334.7 trillion on socio-economic development, defense, security, and administration, and VND68.7 trillion on repaying debts.

Substandard crash helmets remain rife in city

Dodgy crash helmets continue to be sold with impunity in Ho Chi Minh City since regulations lack teeth and enforcement agencies are shorthanded, delegates said at a conference held in Ho Chi Minh City yesterday, Thoi Bao Kinh Te Sai Gon newspaper reported.

Officials from the city market management agency said producers of such helmets could make one in a mere two minutes by assembling it from parts.

But the parts were usually of poor quality, including recycled and brittle plastic and thin layers of sponge, and extremely unsafe, they said.

Since the producers could make a large number of the helmets every day, they sold them for as low as VND30,000 (US$1.46), they said.

Tran Van Dung, director of the Quality Assurance and Testing Center 3, said most legitimate local manufacturers had failed to compete with the illicit producers.

“A large number of producers have shut down and only 15 of them are still operating,” he said.

Luu Song Hung, director of Chi Thanh Plastic Co Ltd, said his business had taken a hit from the cheap helmets. Production had dropped by 30 percent last year and the workforce had to be cut from 800 to around 250, he added.

But delegates admitted it was not easy to stop the illicit producers.

The market management officials said they constantly changed the location of their production facilities to avoid raids.

They also used ruses like labeling their helmets as used for walking, golfing, and bicycling. Though the authorities knew they were made for use as crash helmets, they could not charge the producers since there were no quality regulations for these products.

“Market management officials also find it hard to stamp out the low-quality helmets sold on the streets due to lack of personnel,” they said.

Even in cases where products were seized occasionally and the producers fined, the regulations were unreasonable, they pointed out.

For instance, if locally-made products are found to fail quality requirements, they have to be taken to the place they were produced for recycling and not destroyed.

“But with those caught in shops or on the street, officials do not know their origin.”

The conference was organized by the city-based business grouping Center of Business Studies and Assistance and Chi Thanh Plastic.

Vietnam to become top rice exporter: Thai leader

Vietnam could surpass Thailand as the leading rice exporter for the first time next year, a former Thai deputy prime minister has told the Bangkok Post newspaper.

Pridiyathorn Devakula, also a former finance minister, pointed to the rice mortgage program to be launched next month by the Yingluck Shinawatra government as the cause.

Under the scheme, rice can be pledged as collateral for loans from the state-owned Bank for Agriculture and Agricultural Co-operatives.

If rice prices exceed the mortgaged price, farmers can sell the rice in the market, repay the loan, and pocket the difference.

But if market prices fall, the BAAC will essentially buy the rice, which will then be held in government stockpiles and auctioned to mills and exporters.

Devakula said making the government the sole buyer of rice would squeeze exporters, giving competitors such as Vietnam a chance to boost their share in the global market.

"Historical records show that whenever the government pledged rice at a premium to market prices, the country's rice exports decreased," he said.

While whether such a scenario will play out is still not known, Vietnamese exporters have already seen some effect of the Thai program: domestic prices have gone up and they have got more contracts.

The price of the grain had risen by around VND600,000 (US$29.2) a ton in the past week, Huynh Cong Thanh, director of Ho Chi Minh City Food Co, said.

But with paddy fields in the Mekong Delta at high risk of flooding, exporters are afraid they cannot afford to execute large contracts.

They will ship around 1.1 million tons of rice in the next two months, Sai Gon Tiep Thi newspaper reports.

Of this 625,000 tons will be shipped to Indonesia, 8,000 tons to Bangladesh, 74,000 tons to Cuba, and 462,000 to other Asian and African markets.

The Vietnam Food Association (VFA) said the current rice stockpile of 1.5 million tons plus the 800,000 tons from the autumn-winter crop would take care of exports in the next three months and stockpiles for the first quarter of next year.

But it admitted the devastating floods in the Mekong Delta could badly affect exports.

“Some provinces have reported that large areas of paddy fields have been damaged by the floods.”

Foreign contractors to prioritize local workers

Foreign contractors are now required to prioritize local workers for the jobs and positions for which they have adequate qualifications, the Ministry of Labor, War Invalids and Social Affairs has said.

In a directive sent to provinces, cities and relevant agencies across the country, Minister of Labor, War Invalids and Social Affairs Pham Thi Hai Chuyen said foreign contractors are required to include in their bidding dossiers plans for the employment of foreign and local workforce.

They are also required to report the recruitment of Vietnamese workers to the local People’s Committee of the province or city where they are implementing the project, including the number of Vietnamese workers, their expertise, experience and length of recruitment.

The directive came in accordance with the government’s Decree No.46 on the recruitment and management of foreigners working in Vietnam that took effect last month.

Under the decree, local authorities are responsible for supplying domestic workers to the foreign contractors as requested.

If they fail to do so within 30 days (for the recruitment of less than 500 workers) and 60 days (for a request of over 500 workers), they have to permit the contractors to employ foreign workers for the positions left unfilled by the locals.

All foreign workers must have work permits before their visa applications with the Ministry of Public Security are approved.

The decree was issued in an effort to reduce the number of foreign workers, most of whom are undocumented, dominating projects carried out by foreign contractors in Vietnam, while a large proportion of the local workforce is unemployed.

In early August, for instance, local authorities of the Mekong Delta province of Ca Mau reported that 1,051 of the 1,728 Chinese nationals working at the construction site of the Ca Mau Urea Plant had no work permit.

Similarly, in August 202 Chinese workers at the Nhan Co Aluminum Plant in the Central Highlands province of Dak Nong were reported to be without a work permit by the provincial Department of Labor, War Invalids and Social Affairs.

Vietnamese economists’ meeting opens

The Fourth Vietnamese Economist Annual Meeting (VEAM) took place in Ho Chi Minh City Tuesday, attracting the participation of researchers, lecturers and trainees from the US, France, Germany, Canada, Japan, Singapore, India, Australia and Thailand.

The event was jointly hosted by the University of Economics and Law (UEL) under Vietnam National University , Ho Chi Minh City and the Foreign Trade University (FTU), the French National Centre for Scientific Research (CNRS) and the Development and Policies Research Centre (DEPOCEN).

The two-day meeting aimed to provide an opportunity to Vietnam’s universities, economics and management schools, organisations and enterprises to access the results of economic and management research of Vietnamese scholar communities worldwide.

Nguyen Van Luan, Rector of UEL said VEAM had established a global network of Vietnamese researchers, economists and lecturers and many other researchers around the world.

It is also an occasion for domestic and foreign researchers and economists to exchange knowledge and share experience, as well as propose policies for economic development in coming years.

PV