Bibica’s disputes will be settled next year

Large shareholders of local confectionery producer Bibica at a meeting of he board of directors (BOD) last Saturday agreed not to mention the issue of changing the firm’s charter and voting for its new BOD members, so the shareholder’s meeting on Monday approved the points, meaning the disputes over its management could only be clarified at next year’s meeting.

This year’s Bibica shareholders’ meeting was finally held on Monday after being delayed for many times with the participation of up to 122 shareholders. Obviously, the meeting was also attended by big group shareholders like Lotte and SSI Asset Management (SSIAM) under Saigon Securities Inc. (SSI).

What made local media and small shareholders surprised was an announcement that the content on revising the firm’s charter and the voting of new BOD members as stated in the document for the meeting did not need to be approved.

That is because these two issues were the key elements affecting the situation of Bibica following a series of hot arguments between Lotte and the board of management of Bibica in recent times.

Bibica’s management wants to keep the current charter and the board of management structure unchanged with three persons out of five BOD members being Vietnamese. However, Lotte wants to change the charter and elect new BOD members as the two representatives it had appointed to the BOD are going to finish their terms.

Speaking with local media during the tea break of the shareholders’ meeting, Truong Phu Chien, CEO of Bibica Corporation, said delaying the two important contents at this meeting would mean related sides would continue considering and reaching an agreement on the issues in the next meetings.

Furthermore, as the involved parties have failed to recommend good candidates to the BOD, they agreed to delay the voting plan until the next meeting. Until then, the two members of Lotte will still continue holding their present positions in the BOD, he added.

Vinaconex sells debts in Cam Pha Cement

Viet Nam Construction and Import-Export Joint Stock Company (Vinaconex) (VCG) has announced on its website a recently signed contract with Viettel Group to restructure the debt of Cam Pha Cement Joint Stock Company.

Vinaconex, listed on Ha Noi Stock Exchange, has yet to provide more detailed information about the contract.

Allegedly worth US$127 million, the deal includes the sale of Cam Pha Cement's debts to Viettel, although they remain guaranteed by Vinaconex. Vinaconex currently owns 99.6 per cent of Cam Pha Cement Joint Stock Company's equity, equating to VND1.99 trillion ($94.76 million). Cam Pha Cement Company had been a financial burden on Vinaconex since going operational in 2008. Statistics show that since then, Vinaconex has paid VND2.393 trillion ($113.95 million) to service Cam Pha's debts, pushing Vinaconex into financial difficulty, according to Dau Tu Chung Khoan newspaper.

Up to 2012, Cam Pha Cement Company's aggregate losses were estimated to have reached VND1.588 trillion ($75.61 million). Withdrawing capital from Cam Pha Cement Company is expected to help Vinaconex secure its solvency. The deal's terms are expected to be completed within 30 days.

SBV outlines scheme to stabilise forex, gold rates

The State Bank of Vietnam (SBV) plans to scrutinise foreign currency and gold trading in order to keep the forex rate stable in the last few months of the year.

The central bank said on Monday it had tightened market management by restricting borrowing of foreign currencies, strictly controlling illegal forex trading and preventing gold smuggling.

SBV asked local branches and credit institutions to heighten forex and gold trading management.

Economists expected that foreign currency demand would not suddenly change and the forex rate would remain stable at 1 per cent. Changes in the market were mainly due to psychology, they said.

SBV plans to analyse the macro-economy and international payment balance and take necessary measures to stabilise the market. If sudden changes occur in the forex market, it will assess these changes and provide information and solutions.

SBV will also be ready to support foreign exchange liquidity by creating policies on interest rate and short-term liquidity in dong to stabilise the market.

Le Quang Trung, the Vietnam International Bank's deputy general director, said there would not be much pressure on the forex rate in the year-end months as macro-economics factors have helped stabilise the monetary market.

Trung said the forex rate would be changed to the maximum level of one percentage point this quarter if monetary policies were adjusted.

He added that the forex would exceed the amplitude of VND21,300-21,500 per US dollar.

The central bank said flexible monetary policies have helped curb inflation despite a surge in foreign reserves and a large supply of dong in the domestic market.

VN farmers learn new ways to preserve, process farm produce

Hi-tech use of solar energy to dry rice and fruits was among several technologies presented to farmers and other stakeholders at a two-day seminar that opened in Long An Province yesterday (October 28).

The seminar, titled "Post-harvest Maintenance and Processing of Farm Produce in Viet Nam," is jointly organised by farmers associations in Germany and Viet Nam.

Several advanced technologies and methods to mprove post-harvest maintenance and processing of farm produce in Viet Nam were introduced to farmers at the seminar.

The seminar also informed the farmers of relevant EU regulations on the use of plant protection chemicals, packaging, and cultivation of safe vegetables.

The seminar also discusses future co-operation plans between the farmers' associations of Viet Nam and Germany.

The deputy chairman of Viet Nam Farmers' Association, Leu Vu Dieu, said he hoped that both Government and non-government organisations from Germany will help Vietnamese farmers to better manage, control and certify quality of their produce.

He asked the German Farmers' Association in particular to help their Vietnamese counterparts to build a model for preserving and processing farm produce to meet EU standards so as to promote export of Viet Nam's agriculture exports to markets all over the world.

Tienphong Bank offers loan package

TienPhong Bank has offered flexible choices for consumers with preferential lending rates.

From now until November 12, individual customers can opt for a lending package with an interest rate of zero per cent for the first month and 12 per cent annually in the subsequent 11 months. Customers can also choose to pay an interest rate of 8.8 per cent for the first six months and a floating rate in the next six months.

VPBank gets PCI DSS certification

VPBank has become the first bank in Viet Nam to receive Payment Card Industry Data Security Standard (PCI DSS) certification, a comprehensive set of requirements for enhancing cardholder data security around the storage and handling of customer credit card information.

The standard was developed by the founding payment brands MasterCard Worldwide, Visa International, American Express, Discover Financial Services and JCB to help facilitate the broad adoption of consistent data security measures on a global basis.

Suresh Dadlani , Control Case's director, said PCI DSS was a strict standard with several technical requirements.

Singapore imports grapefruit wine

The Nhan Hoa Pomelo Wine Company in Bien Hoa City of Dong Nai Southern Province has exported around 10,000 litres of grapefruit wine to Singapore at a price of VND140,000-VND160,000 per litre.

According to Nguyen Thanh Nhan, director of Nhan Hoa Grapefruit Wine Company, the firm has exported about 15,000 grapefruits to Singapore, an increase of 30 per cent over the same period last year.

Korean businesses eye opportunities

Sixteen South Korean companies which supply the Samsung Heavy Industries made a working visit seeking business opportunities in HCM City on Monday.

Chelhwa Jung, director of purchasing at Samsung Heavy Industries, said the purpose of the working visit was to introduce products relating to shipbuilding, oil rig construction and support equipment from South Korea.

ACE opens Asia management branch

ACE Life Insurance Co Ltd, part of the ACE Group which is a global leader in insurance and reinsurance, has announced the establishment of its first fund management company in Asia.

A full licence was granted for the ACE Life Fund Management Company (ACE Life FMC) by the State Securities Commission of Viet Nam on Monday.

Finalisation arrived three months after the company received approval in principle for its establishment during the visit of President Truong Tan Sang to the US in July 2013. Headquartered in HCM City, the founding of ACE Life FMC underscores ACE Life's broadening of its investment activities.

Nokia and FPT ink agreement

A Memorandum of Understanding (MOU) between Nokia Corporation and FPT Corporation was signed on Monday, creating new prospects for cooperation between the two companies.

The signing ceremony was attended by Stephen Elop, Executive Vice President, Devices and Services of Nokia Corporation, Truong Gia Binh, Chairman of FPT Corporation and Bui Quang Ngoc, CEO of FPT Corporation.

Nokia and FPT also agreed to jointly promote the development of mobile applications for the Windows phone in Viet Nam.

In particular, Nokia and FPT together will develop Windows phone mobile applications for use in the public and private sectors; adapting or localising global applications for use in Viet Nam; as well as opening opportunities to pre-load locally relevant applications, including games, for Nokia Lumia devices in the country. The MOU will give FPT the opportunity to make a solid foothold in the Nokia ecosystem as an Eco-Partner; developing applications for the Windows phone.

HCM City economy runs into difficulties

In the last few months of the year, HCM City has encountered economic challenges, especially in exports, according to a report presented to the city People's Committee yesterday.

Thai Van Re, director of the city's Planning and Investment Department, said October's retail sales and services turnover had reached VND52.2 trillion (US$2.5 billion) of 12.5 per cent.

Total retail sales and services turnover of the first 10 months of the year is estimated to bet over VND493 billion (nearly $23.5 million), up by 12.2 per cent over last year.

However, the city's export turnover of $2.3 billion was down by 16.5 per cent compared with the same period last year, while its imports remained at $2.3 billion.

The city's first 10 months showed that exports reached $21.76 billion, a year-on-year decrease of 6.8 per cent. Major export staples seeing decreases included rice, coffee, seafood and footwear.

Exports of raw materials and semi-processed goods (such as footwear) and the low added values of other exported goods (such as farm produce and seafood) were the reasons behind the decrease in this year's export turnover.

The struggling global economy has also affected Viet Nam's export revenues, said the report.

Dao Thi Huong Lan, director of the city's Finance Department, said total revenues of the city's State coffers in the first 10 months reached VND186.5 trillion (nearly $8.9 billion), accounting for 78.8 per cent of the year's target, and a year-on-year increase of 8.3 per cent.

Lan said the target total revenue set by the central government for HCM City was too high under current economic conditions.

According to Tran Anh Tuan from the HCM City Institute for Research and Development, the city attained industrial growth rate of 5.9 per cent in the first 10 months of 2013, but the growth rates of the four major industrial sectors were only 5.5 per cent.

The low growth rate of 2.9 per cent attained by the city's electronics industry was due to low purchasing power, and the 4.7 per cent growth rate of the city's mechanics sector was caused by the low competitiveness of the industry.

Meanwhile, the transportation and tourism sectors attained high growth rates, indicating the city's efforts to re-structure its economy, said Tuan.

He asked the city authority to give more attention to the stabilisation of prices of essential goods, to speed up disbursements for investment projects in the city, and to better link re-structuring banks and enterprises and public investments.

Commercial banks given operational guidance

The State Bank of Vietnam (SBV) issued Circular 21/2013/TT-NHNN on the operational network of commercial banks on 9 September 2013.

The Circular regulates the procedures for establishment, change of name, change of location, termination of operation, and dissolution of domestic branches, transaction offices, representative offices, professional units and overseas branches, representative offices or Vietnamese commercial banks abroad. The Circular has more specific and tight provisions to govern the operational network of commercial banks as compared with the previous provisions. Some major provisions are listed below.

No more transaction departments, saving deposit funds and transaction places

The commercial bank is required to convert its transaction departments into branches, and saving deposit funds and transaction places into transaction offices on the basis of meeting requirements of the Circular within 24 months after the effectiveness of the Circular. If the commercial bank does not convert them, the commercial bank must terminate their operations.

Authority of the SBV Governor

Under the Circular, in conformity with the objectives for operating the monetary policy from time to time, the SBV Governor has authority to approve or not approve of establishment, termination of operation or dissolution of a domestic branch, transaction office, representative office or professional unit, or establishment of an overseas branch, representative office or Vietnamese commercial banks abroad. The SBV Governor can authorize directors of State Bank branches to approve or not approve of the followings of commercial banks:

1. Change of name, change of location of the domestic branch or transaction office within the locality;

2. Termination of operation of the transaction office within the locality (in case of voluntary termination of operation);

3. Change of the branch which manages a transaction office within the locality;

4. Satisfaction of conditions to open operation of the domestic branch or transaction office within the locality.

In some specific cases, the SBV Governor will consider a request of the commercial bank to establish a domestic branch, transaction office, representative office, professional unit, or overseas branch, representative office or Vietnamese commercial banks abroad for serving the objectives of developing the economy, society, politics, national security and defense, diplomacy, and operating the monetary policy from time to time, in compliance with the Circular and in conformity with actual conditions.

Tightening conditions to establish operational units of commercial banks

One of the conditions for the commercial bank to establish a domestic branch, transaction office, overseas branch or Vietnamese commercial banks abroad is that its bad debts ratio over total debts on 31 December of the year immediately preceding the year of the request must not exceed 3 per cent or another ratio determined by the SBV Governor from time to time. (Decision 13/2008/QD-NHNN of 29 April 2008 only provides a ratio of bad debts over total debts less than 3 per cent at the time of the request of opening a domestic transaction department, branch or overseas branch, representative office). The commercial bank is permitted to establish a maximum of 10 branches in each inner Ha Noi or HCM City.

Additionally, the commercial bank which has been operating for less than 12 months (from the opening day until the request time) is only permitted to establish a maximum of three branches. The branches must not be within the same province or city under central authority. If the commercial bank has been operating for 12 months or more (from the opening day until the request time), it is only permitted to establish a maximum of five branches within one financial year.

The commercial bank which terminates the operation of its branches in inner Ha Noi or HCM City is permitted to establish the same number of terminated branches in another province or city under central authority, apart from the maximum number permitted to be established (five branches) within one financial year.

To establish an overseas branch or Vietnamese commercial banks abroad, the commercial bank must have total assets of VND100,000 billion or more in accordance with its audited consolidated financial statements on 31 December of the year immediately preceding the year of request.

This Circular takes effect on 23 October 2013 and replaces the SBV Governor Decision 13/2008/QD-NHNN on the operational network of commercial banks.

Bulgaria trade failing to reach full potential

Bilateral trade between Viet Nam and Bulgaria has failed to match its potential, according to the Viet Nam Chamber of Commerce and Industry Vice Chairman Hoang Van Dung.

During a business conference held in Ha Noi yesterday, Dung emphasised the importance of drawing up a specific action plan with the aim of fostering trade relations between two business communities.

Over the past few years, two-way trade reached US$70-80 million annually. To date, Bulgarian companies have pumped $30 million into seven projects in Viet Nam while there are no Vietnamese companies investing in Bulgaria, Dung said, a situation he acknowledged was a trifle disappointing.

In order to capitalise on both countries' great business potential, the two sides should continue to perfect mechanisms and policies to remove all administrative barriers, according to Aleksandar Aleksandrov from the Bulgarian Embassy in Viet Nam.

Improving the efficiency of the two countries' trade and investment programmes was also necessary, he said, suggesting the establishment of joint-venture projects in several sectors such as agriculture, industry and transport would open up anew for the bilateral relationship.

Chairman of the Bulgarian Chamber of Commerce and Industry Tsevetan Simeonov confirmed that the 30 Bulgarian companies attending the Vietnamese trade event, specialising in automotives, construction, energy, food, agricultural products, hotels and tourism were willing to establish long-term partnerships with their Vietnamese counterparts.

Connecting Vietnamese and Japanese businesses

The Vietnam Chamber of Commerce and Industry (VCCI) organized an October 29 meeting in Hanoi for Vietnamese and Japanese businesses seeking cooperative opportunities.

VCCI President Vu Tien Loc noted the two countries’ ever-increasing economic cooperation, cementing Japan among Vietnam’s leading investors and economic partners.

In the first ten months of this year, Japanese businesses poured nearly US$5 billion into Vietnam.

Loc said the VCCI and its Japanese partners are eager to serve as a bridge linking the business communities of both nations.

Japan-Mekong Business Committee President Kohei Watanabe passed on the Japan Chamber of Commerce and Industry’s enthusiasm for the Vietnamese market and its intentions to facilitate Japanese business delegation surveys of the Vietnamese business environment.

Japanese enterprises hopes Vietnam will fine-tune its business environment in accordance with international norms, and are committed to Vietnam for the foreseeable future.

Japanese businesses are currently rearranging their favoured investment destinations, a restructuring that could help satisfy Vietnam’s insatiable investment demand. Vietnam wants to prioritise support industry projects to help small and medium-sized enterprises (SMEs) expand overseas.

Cooperation with Japan could fuel domestic businesses’ production reforms, management improvements, and technology upgrades, honing their competitive edge for a successful international integration.

Vietnam, Japan enhance e-commerce cooperation

Hanoi has hosted an October 29 seminar on strengthening Vietnam’s and Japan’s e-commerce cooperation.

Deputy Industry and Trade Minister Tran Tuan Anh described the event as part of an annual policy dialogue programme.

Tran Huu Linh, head of the Ministry of Industry and Trade’s (MoIT) E-commerce and Information Technology Agency, said the two countries’ e-commerce cooperation has reaped remarkable results in recent years.

The MoIT instructed the Agency to host the biennial conference in recognition of this. This year’s event was held on its largest scale yet, attracting participation from relevant ministries, agencies, and prestigious e-commerce experts.

Linh said the policy dialogues have helped Vietnamese managers, researchers, and authorities learn more about the e-commerce infrastructure required  for the Vietnamese industry’s successful international integration. It has also assisted with policy formulation for facilitating e-commerce’s development.

The seminar discussed issues including e-commerce and the law, e-commerce and mobile devices, e-commerce and tourism, and e-commerce’s distribution challenges.

Japanese experts also shared their experience in creating new services and adding value to existing e-commerce systems.

They emphasised how their attempts at encouraging the private sector to embrace e-commerce are useful lessons for Vietnam.

Ca Mau hosts seafood trade fair

Nearly 200 domestic businesses are showcasing their products at the 2013 Mekong Seafood Trade Fair in Ca Mau city as part of the national trade promotion programme.

The event, the largest of its kind in the southernmost province of Ca Mau, is organised by the Vietnam Association of Seafood Exporters and Producers (VASEP) and the provincial People’s Committee, taking place from October 29 - November 4.

This is a good opportunity for local firms to popularise their products at over 400 pavilions as well as promote trade and investment cooperation in the country and the Mekong Delta in particular.

Manufacturers will help local farmers promptly access and apply the latest machineries and science-technology in agricultural production.

Many discount schemes will be launched during the event to change the local habit of choosing foreign products, and buy high-quality Vietnamese goods instead.

Prestigious domestic companies and enterprises are invited to the fair with the aim of responding to the “Vietnamese people use Vietnamese goods” campaign, said Director of the Trade, Tourism and Investment Promotion Centre Tran Van Bo.

State Treasury plans more market-friendly manoeuvres

The State Treasury will carry out several new measures in order to create an impetus for capital mobilisation, according to the Viet Nam Financial Times.

The paper quoted Tran Minh Hang, deputy general director of the treasury, as saying that in the first six months of the year, more than VND124.331 billion (US$5.9 million) had been raised through the issue of government bonds.

By late September, a total of VND145.812 billion ($6.9 million) had been mobilised, representing 108 per cent of the figure recorded in 2012.

These figures are seen as positive, helping ease pressure on the State Budget and partly meeting the Government's capital demand for spending and development investments.

Hang said the positive results were made possible by increased economic stability with growth rate and inflation maintained at reasonable levels.

These changes helped improve investors' confidence in the government bond market and facilitated capital mobilisation, she said.

Hang also said that mobilisation is likely to be slower in the remaining months of the year.

Since the third quarter, many tenders for government bonds did not generate expected results and there were even instances of failure, she said.

She explained that interest yielded by government bonds were no longer attractive to investors. In addition, recent fluctuations in the exchange rate and a tendency among foreign investors to withdraw capital from new markets including Viet Nam.

Furthermore, commercial banks, which have always been customers of bonds when other investment channels prove less profitable or loss-making, were also short of capital.

With production and service industries entering the year's peak season, enterprises were increasing their borrowings from banks, which means that the latter did not have much capital left to invest in government bonds, Hang said.

To improve the situation, the State Treasury announced early this month a multi-pronged plan to mobilise VND25.2 trillion ($1.94 billion) in the fourth quarter by issuing bonds with terms from less than one year to 10 or 15 years.

Under the scheme, the agency would increase the frequency of issuing bonds and treasury bills.

In addition to issuing bonds with terms of between two and 10 years, it would issue treasury bills that would mature in 26 weeks.

The short and long term bonds aim to mobilise all idle capital sources from banks, insurance companies and investment funds.

The treasury would also organise regular meetings with investors to assess real demand and provide the market with proper products.

Flexibly adjusting the rate of government bonds in ways that would match market fluctuations and the central bank's monetary policies is another important measure that will be taken in the capital mobilisation effort.

The office also said it would continue restructuring the catalogue of listed bonds in line with the approved plan to improve liquidity in the bond market.

IIP fails to hit former heights due to economy

The index of industrial production (IIP) saw a 5.4 per cent year-on-year increase in the January-October period, according to the General Statistics Office (GSO).

In October alone, the index edged up an estimated 5.9 per cent compared to the same period last year.

GSO experts said industrial production did not bounce back strongly due to global economic turmoil. IIP growth in the first 10 months this year was much lower than in previous years (9.2 per cent in 2011 and 5.6 per cent in 2012).

They attributed the low growth to high inventory. The volume of stockpiled goods in the processing and manufacturing industry hit 9.7 per cent early this month.

Industries with higher inventory include motorcycle production (up 168.8 per cent), paper production (up 101.5 per cent), electronic home appliances (up 100.9 per cent), sugar processing (up 98.4 per cent), pharmaceutical chemicals (up 54.8 per cent) and steel production (up 18.4 per cent).

However, some industries saw consumption grow, such as urea (up 27 per cent), powdered milk (up 13.8 per cent), refined sugar (up 12.9 per cent), ready-made cloth (up 11.4 per cent), processed seafood (up 8.6 per cent) and automobile assembly (up 13.4 per cent).

HCM City's IIP climbed 5.9 per cent, higher than the national average. Vinh Phuc and Quang Ngai provinces posted increases of 17 per cent and 21.1 per cent, respectively, and Dong Nai Province and Binh Duong Province both gained 7.6 per cent. Ha Noi's IIP grew only 4.45 per cent.

Can Tho pours investment into seafood sector

Can Tho plans to double the area devoted to aquatic cultivation to 26,000ha by 2020, according to the city's Department of Agriculture and Rural Development.

The target within seven years is a total output of 355,000 tonnes a year and export of 160,000 tonnes of seafood products worth US$1 billion.

Cultivation areas have been divided into two major zones, one in two districts and on several islets on the Hau River.

It will specialise in blue-legged prawns, tra fish and freshwater fish on a total area of 16,000ha.

The other zone, located in several districts, will breed tra and other fresh water fish in a total area of 10,000ha.

Can Tho authorities have also decided to rotate rice and shrimp cultivation on the same paddy field, or rice and fish.

To meet local demand, the city will set up several aquatic breeding centres that will supply 1-2 billion fries of various aquatic species, including tra and basa fish, anabas, bighead catfish and blue-legged prawns.

The city will also apply advanced farming techniques, and promote Good Agricultural Practises and other food safety hygiene standards in aquatic cultivation to communes.

By 2020, Can Tho expects to have at least 33 seafood processors with a total capacity of 192,000 tonnes of seafood a year.

Can Tho now breeds tra fish and blue-legged spawns on 1,700ha in Vinh Thanh, Co Do, O Mon and Thot Not districts.

This year, the city's Aquatic Cultivation Sub-departments implemented a pilot project to raise male blue-legged prawns on a paddy field in O Mon District's Thoi Hoa Ward.

After six months of raising male blue-legged prawns, Nguyen Huu Huynh, the paddy field's farmer, earned a profit of VND40million per hectare.

The model of farming one crop of rice and one crop of blue-legged prawns on a same paddy field per year will help save costs and have higher yields and fewer diseases, according to Huynh.

The pilot model also protects the environment as there is no use of chemicals or antibiotics, he said.

"The development of this model will help farmers increase their income," he said.

New Zealand to export potatoes to Vietnam

Vietnam is becoming a new potential importer of potatoes from New Zealand.

Radio New Zealand has quoted Potatoes New Zealand chief executive Champak Mehta as saying it will likely happen before the end of this year in the context of discussions with Vietnamese officials in Wellington last week.

Mehta said Vietnam’s demand for potatoes is rather high as local people often have potatoes in their daily meals.

Necessary procedures for potato exports to Vietnam would be finalised by December, he added.

Australia is New Zealand's biggest export market for frozen potato products and Fiji is its biggest export market for fresh potatoes.

Vietnam breaks into Middle East, North Africa markets

The economic cooperation forum between Vietnam and Middle East – North African partners scheduled for November 4-5 in Hanoi is an important external economic event of the year.

At the forum policy makers will meet to identify specific areas of economic cooperation and discuss measures to improve relations Vietnam and Middle East-North African countries.

Vietnam will avail itself of this opportunity to introduce its new policies to businesses and investors who are seeking cooperation partners.

The Middle East-North African region stretches from Iran through the Persian Gulf, Arabia Peninsula, Suez Canal, the eastern bank of the Mediterranean to North-West Africa and the southern bank of the Mediterranean. Its mineral resources, mostly oil and gas, account for 60% of world oil reserves and 45% of world gas reserves.

With a total population of more than 520 million, the region has great potential for economic development to meet the growing demand for diversified products.

In recent years, the traditional ties of friendship and cooperation between Vietnam and Middle East-North African countries have continued to grow and flourish through the regular exchange of visits by high-level officials.

Vietnam has so far established diplomatic ties with most countries in the region and set up 12 diplomatic representative offices there.

Its two-way trade turnover in 2012 reached US$7.4 billion, up 87% from 10 years ago.

Many Middle East businesses have invested in big projects in Vietnam, such as Nghi Son Oil Refinery Complex (Kuwait). Long Son Oil Refinery Complex (Qatar), Ha Long Star Hotel and Hiep Phuoc Container Port (UAE).

Vietnamese businesses have also invested in some projects in Middle East – North African region, such as the National Oil and Gas Group in Algeria.

Around 26,000 Vietnamese workers are working in infrastructure development projects in the region.

Leading Russian businesses are making a fact-finding trip to Vietnam from October 27 to November 6 to sound out opportunities for cooperation.

They will work with the National Assembly Committee on Science, Technology and Environment, make a presentation at Hanoi-based at Vietnam-Russia Tropical Centre introducing Russian operations in Vietnam, and attend a Vietnam-Russia business seminar.

The event provides an excellent opportunity for the two sides to share experience and introduce their latest achievements.

At the press conference in Hanoi on October 28, chairman of the Committee on Science and High Technology of Russia's State Duma, Chereshnhev Valeriy Alexandrovich emphasised that Russia-Vietnam cooperation has been strengthened in various areas such as economics, trade and investment, especially after both countries established the comprehensive strategic partnership.

During their trip, Russian business representatives will work on the long-term project "Russia-Vietnam: the new economy," and are willing to cooperate with Vietnam enterprises in developing and applying their latest technologies for the Vietnamese market.

At the press briefing, Russian companies introduced their  potential areas of strength for cooperation with Vietnamese partners, including electrical engineering, automation, diagnostic medicines production, information technology, detergents, electrical appliances, physical protection systems, drilling, and new technology products for human health.

Steel market remains stagnant

Steel sale is yet to recover on the local market, despite domestic steel producers' efforts to boost consumption coinciding with the start of the building season, according to the Viet Nam Steel Association (VSA).

The association said building steel sales in September declined 3.87 per cent against August and 2.29 per cent year-on-year to 353,792 tonnes.

Production in September also fell 9.46 per cent from August and 7.43 per cent against September 2012 to 347,780 tonnes.

However, in the first nine months of this year, the steel production reached 3.36 million tonnes, a marginal increase of 0.02 per cent against the same period last year, while consumption rose 2.46 per cent to 3.38 million tonnes.

The steel inventory reached 317,504 tonnes in the first nine months of this year, VSA figures showed, adding the inventory remained at a normal rate.

Producers had a steel ingot inventory of 520,000 tonnes, which was expected to meet production demand in the coming months.

Meanwhile, the selling price of building steel in the north was reduced by VND100,000-350,000 to VND12.24-12.95 million per tonne in September, as producers sought to counter low demand, according to the domestic market management team under the Ministry of Industry and Trade.

But the domestic market still sits precariously at the building season start, because increased electric prices have pushed up steel production costs, making it even more difficult for suppliers to remain competitive.

The association said the building season got off to a slow start in September, as many storms and floods hampered projects.

The team expected steel prices to remain stable, while production and consumption would also see little change in months to come.

The association also reported that Viet Nam's steel imports in the first eight months of 2013 had surged 26.22 per cent in volume and 11.1 per cent in value to US$4.4 billion.

More encouragingly, Viet Nam's steel export volume jumped 23.81 over the same period to 1.4 million tonnes, with value rising 15.26 per cent to $1.2 billion.

The surge in exports had helped reduce consumption pressure on local steel producers, the association said.

Fuel traders told to keep prices steady

The Ministry of Finance has told fuel wholesalers to limit their use of the price stabilisation fund from VND300 to VND200 per litre.

The decision was announced in Dispatch No14239/BTC-QLG on fuel price management, in which the ministry said it would keep fuel prices, import tariffs and deductions for the price stabilization fund unchanged.

Currently, the reference price of gasoline is VND24,084 per litre, while the retail price is around VND23,880 per litre.

Similarly, each litre of diesel and kerosene is now sold for VND22,310 and VND22,020, while their reference prices are VND22,902 and VND22,934 respectively.

For diesel, the ministry has permitted fuel wholesalers to continue earning commissions of VND100 per litre and charging VND300 per litre to the price stabilisation fund, to limit price increases.

Petrol hubs selling kerosene are expected to retain earnings of VND100 per litre and reduce the use of the price stabilisation fund to VND700 from VND800.

For mazut, traders will continue to take VND200 per litre from the fund.

The price stabilisation fund was reported to be sitting at VND58.6 billion (US$2.7 million) at the end of September, after rising over VND 3billion ($141,911), the Ministry of Finance stated on its website.

According to the latest statistics, of the 12 petrol dealers who contributed to the fund, six of them had a positive fund balance. Petrolimex's September balance stayed over VND205 billion ($9.7 million), while the Military Petroleum Corporation with over VND180 billion.

Meanwhile, as of September 30, PVOil reported a negative fund balance of more than VND209 billion ($9.88 million), while Petec Trading & Investment Corporation also saw a loss of over VND145 billion ($6.86 million).

Recently, Minister of Finance Dinh Tien Dung stated that the ministry would publish data on a quarterly basis rather than each month, to minimise costs to relevant agencies.

VN timber exporters enhance growth outlook

Earnings from wood exports are predicted to exceed US$3.77 billion for the first nine months of this year, up 12 per cent on 2012 figures, according to the Ministry of Agriculture and Rural Development (MARD).

Wood produce saw strong growth in shipments made to the US, South Korea, Japan and China; driven by demand increases in most countries; including by 7.8 per cent in the US, 17.1 per cent in China, 20.3 per cent in Japan and 49 per cent in South Korea.

The US was still the lead importer of wood from Viet Nam, reaching $1.38 billion and accounting for around 36.7 per cent of the sector's exports.

Wood exports are expected to hit $5.5 billion this year, reflecting a growth rate between 10-15 per cent, while Viet Nam is now the second largest wood exporter in Asia, according to the ministry.

Nguyen Ton Quyen, General Secretary of Vietforest, attributed the increase to the global economic recovery and importers shifting orders from China to Viet Nam due to lower wages and the need hedge risk against price volatilities.

Quyen told Vietnam Economic Times that orders had increased by 20-30 per cent this year.

Since early August, wood exporters were inundated with orders from foreign importers, with many exporters even negotiating orders for 2014. Many are believed to be running at full capacity to make deliveries on time, with many taking on extra staff to meet demand.

According to the Vietnamese Customs agency, wood export turnover from FDI businesses accounted for 64 per cent of the industry's total export turnover, while growth in the sector's FDI had been aided by strong financial support, access to local partners and distribution networks in foreign countries enabling fast networking between buyers and sellers.

However, foreign invested companies have been far more successful in reaping the gains of the surge in demand for exported wood products. Statistics showed FDI businesses were able to rent local workshops and warehouses of local wood processors to expedite orders to the US and China.

Meanwhile, local processors had been hampered by a shortage of finance, trained human resources and raw materials. While Vietnamese timber is still well regarded in foreign markets and contributes significantly to export turnover, high-end manufacturing accounted for a minority of Vietnamese produce.

Additionally, the country's $4.6 billion in timber exports still pales in comparison to nearly $11 billion China raked in from wood exports.

According to the Viet Nam Administration of Forestry, the domestic wood processing sector saw consistent annual growth of 42 per cent between 2005 and 2010. This astonishing growth has continued, holding at 20-23 per cent during the last three years. Meanwhile, the scope of exports has increased dramatically, with a global penetration of more than 100 countries and territories.

Polaris plant back on track after long delay

Taiwanese investor Polaris Kty International Vietnam will continue construction at its delayed $1.8 billion complex in the central Ha Tinh province's Ky Anh district to meet its 2018 deadline.

The information was revealed to VIR last week by Ho Anh Tuan, head of Management Board of Vung Ang Economic Zone. Tuan said that the management board had sent a document to ask Polaris to speed progress on the project. The management board and the investor would soon meet to solve site clearance and compensation issues.

According to Tuan, the huge project needed gigantic amounts of compensation that could not be solved overnight, and it was not easy to persuade some local residents to hand over their land.

Ngo Dinh Van, deputy head of Management Board of Vung Ang Economic Zone added that so far, the management board had poured VND70 billion ($3.4 million) into compensation and site clearance costs and had asked Polaris to advance compensation payments, but the investor had not responded.

In July, Polaris asked for help from Ha Tinh Provincial People's Committee because of substantial delays caused by the land clearance process. The province asked the management board to report on the issue by August 20, Van from Management Board of Vung Ang Economic Zone confirmed.

According to the investor, only 50 hectares of the total 430 hectares had been cleared.

Polaris added that the slow land clearance would affect the rate of return on the project.

However, Van explained that the investor had only finished the investment procedures for just 50 hectares to develop the first phase, which included a two star hotel complex, high-rise buildings, villas and agricultural facilities. However, so far, only the hotel was under construction.

Van said that a withdrawal of the investment certificate remained a possibility because the investor may lack the financial capacity to pursue the project.

Two months ago, the Taiwanese investor was accused of lacking sufficient capital to implement the project, an accusation which the provincial people’s committee backed.

The Tau Voi Lake Tourism and Services project began construction in August 2010, and was Polaris Kty International’s first investment project in Vietnam. The company also possesses tourism development projects in China and the US.

Located over 427 hectares in Ky Thinh and Ky Trinh commune, Ky Anh district, the project includes two, three and five star hotels, golf course, farm, amusement park, sports facilities, lake and entertainment facilities, shopping and a convention centre. The project was expected to finish in 2018.

The investor has earmarked 200 hectares to develop agricultural produce, such as clean vegetables and chicken farming. It will also manufacture high-tech agriculture products to serve the Vung Ang Economic Zone and other surrounding customers.

Around $300 million will be invested in the first phase, which will be used to construct a two star hotel and high-rise buildings and housing for staff working in companies in the area.

Social housing credit plan plagued by slow disbursement

A number of obstacles need to be removed to accelerate the disbursement of a $1.4 billion government preferential credit package to low-income homebuyers and corporate customers developing social housing projects.

According to a source from state giant Vietcombank’s (VCB) Ho Chi Minh City branch, it just appraised 24 loans for individual customers valued at $895,000, of which $514,000 has been disbursed. No corporate customers have got loans under this credit package from the branch.

VCB executives said slow disbursement is due to scarce social housing.

Housing for low-income earners has been a prevalent issue in Vietnam over recent years.

Also hindering the credit package is that to be eligible people need to prove that they have no property ownership and get this signed off on by their local communal and ward authorities, who have been tentative in vouching for applicants.

Another problem is that notaries have not signed off on the homes as asset collateral for the loan. Banks are therefore worried about credit defaults.

Deputy director of the State Bank of Vietnam’s (SBV) Ho Chi Minh City branch Nguyen Hoang Minh said this last issue of collateral has been the greatest obstacle.

The reasons above are why only $45 million of the $1.4 billion programme has thus far been disbursed nationwide, after half a year running. In the southern hub only a million has been released, and solely to individual applicants.

Minh said that the credit package was using future houses and/or properties as collateral for people to access preferential loans. Many notaries are refusing to give homebuyers the necessary paperwork as they say under Housing Law’s Clause 91 home loans first need housing certificates.

Another issue is that low income borrowers are finding it difficult to prove they will have a stable income necessary for repayment.

Deputy chairman of the Ho Chi Minh City Labour Federation Nguyen Viet Cuong said averaged workers’ monthly income at around $140-$190 makes the principal plus interest of a 10-year loan, even at a preferential rate of 6 per cent per year, very difficult to pay.

Cuong proposed extending the loan duration to 20-25 years.

Regarding corporate customers, deputy head of Transaction Bureau II under the Bank for Investment and Development of Vietnam (BIDV) Pham The Nguyen said businesses would be eager to join the credit programme if the lending conditions changed.

Current regulations require that programme participants first set aside a land fund to ensure construction deadlines are met and records must be sent to the Ministry of Construction for approval before banks will release funds.

“As of now, only one of nine firms supposedly involved in the programme has records sent to the MoC,” said Nguyen.

Head of the Economic and Budget Committee under Ho Chi Minh City People’s Council Pham Van Dong said the city had cleared space for social housing, but developers needed to evaluate their locations carefully to attract customers.

Dong also proposed relevant agencies loosen lending conditions to expand access to individual and corporate customers.

Vietinbank funds tunnel project in central region

The Deo Ca Investment JSC and the Bank for Industry and Trade (Vietinbank) have inked a credit contract worth over 5,400 billion VND (253.8 million USD) for the construction of a tunnel running through the Ca pass, which links the two central provinces of Phu Yen and Khanh Hoa along National Highway 1.

According to Ho Minh Hoang, Director of the Deo Ca Investment JSC, the 3,900m tunnel with a total investment of 6,500 billion VND (305.5 million USD) is a key project which has significant political, socio-economic and security meanings.

The project is expected to help ease traffic congestion and reduce accident in National Highway 1, while contributing to developing the economic, industrial and tourism hubs in the central region and Phu Yen and Khanh Hoa provinces in particular.

Addressing the signing ceremony, Transport Minister Dinh La Thang urged the management board to exert more efforts to ensure the project progress, so that the tunnel can become operational by 2016, keeping pace with other projects on expanding National Highway 1, the main North-South route in the country.

Chairman of Vietinbank Board of Directors Pham Huy Hung affirmed that the bank will do it utmost to ensure the timely disbursement and help the project be completed as scheduled.-

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