Fish breeding may disappear from Hanoi village

Just few households in Yen Phu Village, which is famous for ornamental fish breeding, have maintained their traditional industry, while the majority has turned to importing fish for higher profits.

Previously, households in the village often raised fish which were sold at reasonable prices. The village has been known as one of the biggest ornamental fish distributors.

However, due to the increasing demand for ornamental fish, and complicated breeding process, the households have imported varieties of fish for distribution in the domestic market.

Many kinds of imported fish such as cá la hán (flower horn fish) and cá rồng (dragon fish) are expensive and often sold to rich people at between VND700,000 (USD33.3) and tens of millions of VND.

Mr. Tuan, one of few ornamental fish breeders, said, “Now people have turned to importing fish. Just some households in the villages have still maintained traditional breeding. They often buy fish from Saigon and China, Japan and Singapore. Due to high transport fees, the imported fish prices are much higher compared to their real prices.”

According to the local households, raising ornamental fish gives them only VND3-4 million (USD142.8-190.4) per month, but taking much time and effort as well as posing risks. Meanwhile, the imported fish offers them far greater profits.

Nguyen Van Son, a local ornamental fish breeder said lots of traders have flocked to the village. His shop earns an income of roughly VND1 million (USD47.6) per day.

The level of profits depends on scale and different seasons. Ornamental fish have highest prices at the end of the year and at the beginning of spring when it is warm. Currently, only 2-3 households have continued breeding, posing a risk of losing a traditional craft.

Mrs. Yen, a local breeder, said, “Experienced ornamental fish breeders have become old, while the young opt to do other jobs. Most of the local breeders import fish due to higher profits. I’m not sure whether Yen Phu ornamental fish village can continue”.

Vietnam second in Southeast Asia remittance ranking

Vietnam ranked second in the Southeast Asian region for overseas remittance with 10 billion USD in 2012, according to the latest report issued by the World Bank (WB).
 
The Philippines topped the list with 24.45 billion USD. Indonesia came third with 7.2 billion USD, followed by Thailand (4.12 billion USD), Malaysia (1.27 billion USD) and Myanmar (0.56 billion USD).

On the global scale, Vietnam ranked ninth, while India came on top with 69 billion USD.

According to the WB, remittance to Southeast Asian countries totalled 47.96 billion USD in 2012, up 8.43 percent over the previous year, but far lower than the recorded 109 billion USD.

Remittance to developing countries is expected to grow on average 8.8 percent per annum for the next three years and is forecast to reach 515 billion USD in 2015.

Since 2000, overseas remittance flow to developing countries has increased fourfold.

Ministry proposes minimum wage increase delay

The Ministry of Labour, Invalids and Social Affairs has recommended the government delay an increase in the minimum wage.

Currently, the minimum wage which took effect from January this year covers only 62-69% of a worker's minimum living costs.

Under the Labour Code, the minimum wage level should be VND2.6-3.4 million (USD123.8-161.9) per month.

Earlier, the Ministry of Labour, Invalids, and Social Affairs submitted a proposal to increase it to a level adequate for basic living needs by 2015. The minimum wage increase would be 35-27% higher in 2013; rising 25-27% in 2014 and 20-25% in 2015.

However, the ministry has proposed a delay, fearing employers cannot afford such increases at the moment.

Le Xuan Thanh, deputy head of the Department of Labour and Wage, said the ministry mulled two alternatives to put it off to 2016 with an annual rise of 18-23% or to 2017 with an increase of 16.5-20% per year, but proposed the former.

A recent survey by the Fair Labour Association, an international organisation to protect workers' rights, showed 40% of nearly 3,600 workers said their salaries failed to cover daily living costs if they worked less than 60 hours a week.

Dang Thi Hai Ha, from the Fair Labour Association, said nearly 55% of workers were unaware of negotiation mechanisms between workers and employers.

Rental property market challenged by recession

Despite being at the busiest trading area in Hanoi, many people living in the Old Quarter's streets are finding it hard to lease out their houses, even at much lower prices.
 
According to the owners, many kinds of business are being threatened by the on-going economic downturn.

On Tran Hung Dao Street, a 180 square metre house is being offered at VND200 million per month (USD9,500). Another VND400 square metre house in Hang Bong Street is leased at VND400 million while owner of a 700 square metres villa on Nguyen Du Street nearby is offering the villa at only VND480 million a month.

Average and small houses on streets near city centre such as Hang Dao or Hang Ngang can fetch the most handsome price at around VND200 million a month.

For example, residents of a house on Hang Dao Street have to pay USD7,000 per month for their use of 40 square metres and USD5,000 for the same floor area on Hang Duong Street.

Due to the high rental fees, many businesses have abandoned the Old Quarter in order to save money.

Trung Hieu, a resident in Ton Dan Street in Hoan Kiem District said he leased his villa for a non-government organisation at USD22,000 per month for two years. After they returned the villa, he has not been able to find another customer.

"The ad to rent the villa has been up for months now, I even lowered the price by USD3,000 but no one has bothered to call," he said.

Hang, a house owner on Hai Ba Trung Street also in the same situation, she said, "Though I lowered the rental fee from USD2,500 to USD1,800 but I still can't find customer. Business has been tougher than ever."

According to her, house owners on this street are being forced to lower prices or lose out. Moreover, the money they would lose if they fail to lease the house for several months is much higher than any reduction.

Pham Thanh Hung, vice head of Cengroup, a real estate consultant company in Vietnam, confirmed that the rental market is in deep slump and the house owners would need to lower the fees much more to please their customers.

Financial restructuring fails to show results

Despite one year of plans for economic restructuring, Vietnam's economy continues to face challenges in efforts towards recovery.

Efforts to lighten industrial inventory, eliminate bad debt and lower corporate income taxes and value-added taxes and to reduce interest rates for loans in the real-estate market are only temporary solutions, said Dr. Nguyen Dinh Cung, Deputy Head of the Central Institute for Economic Management (CIEM).

He added that such measures are not much different than those taken in 2011.

In his opinion, because the reforms were aimed at enterprises in selected industries, they do not add up to a viable fix for the entire economy, and may cause harm because they enable companies to operate inefficiently.

"So far the approach to settling bad debt has focused on the banking sector instead on the companies which owe the money. As a result, they will still find it difficult to take out loans to resume business activities," said Dr. Cung.

Dr. To Anh Duong, from the Vietnam Institute of Economics, agreed, saying that after one year, the restructuring policy has proved not to be comprehensive enough, while the banking system is looking at a continued liquidity crisis.

"Exactly how much that needs to be spent on restructuring the financial system remains unclear, but it will inevitably be a very large amount. The burden will ultimately lie on the State Bank of Vietnam to provide the capital, but at the same time not even the Ministry of Finance has estimates," Dr. Duong pointed out.

Dr. Tran Du Lich said that the investment in non-core investments made by state-owned enterprises over the past few years has proven to be a huge waste.

He added that the government should no longer offer credit guarantees for state-owned enterprises. This, he said, would force them to apply for loans from commercial banks and adhere to the free market system. All state-owned enterprises should be required to have their portfolios listed publicly, just as listed private companies", he said.

He also suggested that a ministry-level agency be set up under direction of the National Assembly to manage and monitor state capital.

Asset management company set for launch

The government will approve a decree to set up a national asset management company to boost the resolution of bad debts according to a local official.

Minister and Chairman of the Government Office Vu Duc Dam said the Vietnam Asset Management Company (VAMC) was only one of many measures to deal with bad debts in the current context. Before the company is established, the State Bank of Vietnam (SBV) and commercial banks had made efforts to settle their bad debts.

However, the minister said each bank had to form their own hedge funds under the State Bank of Vietnam’s instruction.

The VAMC, under the SBV’s management will help banks and enterprises to deal with their bad debts quickly. The VAMC is supposed to play an important role in controlling bad debts which is the main culprit for weak liquidity in the banking system.

The company has received the Politburo’s in-principle approval. The government discussed the roadmap to establishing the company at a meeting last month, but until now nothing seems to have happened.

By the end of February this year, Vietnam’s bad debt rate reduced to 6% against 8% of 2012.

Lam Dong has first farm producing weasel coffee

The first farm producing the famed weasel coffee in the Central Highlands province of Lam Dong has opened its door for visitors to see the entire process of making the coffee with the help of domesticated animals.
 
The two-hectare farm at 135E Hoang Hoa Tham Street, Da Lat city, is keeping as many as 120 weasels (a type of civet) with the permission of the local forest management agency, and can produce an average of 500 kilograms of weasel coffee every year.

According to the farm’s owner Nguyen Minh Quoc, every coffee crop, the civets are fed with highest quality Arabica coffee berries. The coffee beans which are relatively undigested and intact in their droppings were then collected, cleaned and processed for sale.

Experts say the enzymes inside weasels’ stomach give the undigested coffee beans delightful taste and distinctive aroma.

Quoc said, the coffee has been checked and recognised by the Pasteur Institute of Da Lat and the Nuclear Research Institute for good quality and hygiene.

The publicizing of weasel coffee production process at the farm contributes to popularising the quality and trademark of Vietnamese coffee, as well as creating a new sight-seeing spot for tourists in Da Lat city.

Project on greenhouse gas emission control launched

A project on improving the Vietnamese industry and trade sectors’ capacity to control greenhouse gas emissions and increase adaptation to climate change has been recently launched in Hanoi by the Ministry of Industry and Trade (MoIT) and the United Nations Development Programme (UNDP).

Vietnam Government Portal (VGP) quoted MoIT Deputy Minister Le Duong Quang as saying that the 3 million USD project will be implemented between 2013 and 2016.

It aims to raise awareness and capacity for policy makers, seek suitable mechanisms to respond to climate change, reduce greenhouse gas emissions and tap green trade opportunities to promote the sector’s sustainable production, he said.

The three-component project will focus on analysing and reviewing current policies and recommending mechanisms and solutions to reduce emissions towards a sustainable industrial production.

It will improve policy makers’ awareness of climate change and support the connectivity among businesses while helping financial institutions and service suppliers promote the investment in developing a sustainable industrial production, reducing the emissions and expanding the market.

To realise the project’s targets, Vietnam should have decisive and effective measures for energy usage, said UNDP Deputy Country Director Bakhodir Burkhanov, adding that production should be cleaner and more modern, the behaviors of consumers and businesses must be improved, and relevant agencies should work closely together.

Vietnam is implementing the National Strategy on Green Growth in the 2011-2020 period, with a vision to 2015, in which it has targeted to reduce emissions by 8-10 percent by 2020 compared to 2010.

Rice export price lowered

Local exporters have lowered the offer price of 5% broken rice further, even though Thailand has announced it will delay the plan for selling off 500,000 tons of rice in stock.

The export offer price of the 5% broken rice is currently US$375-385 a ton, down US$5 against last week. Meanwhile, offer prices of 25% broken rice and broken rice are unchanged from the previous week, standing at US$355-365 and US$335-345 per ton respectively, according to the Vietnam Food Association (VFA).

The fact that local exporters are bringing down the rice price goes against the global trend. In the first quarter, global rice export price rose 2% year-on-year, according to the Food and Agriculture Organization (FAO), while the average price of Vietnam fell US$44.52 a ton, said VFA.

At recent meetings on the food industry, VFA leaders said rice exporters lowered offer prices for fear that India and Thailand would soon put their in-stock rice on sale. However, according to the rice market information website Oryza, Thailand has decided to delay the plan for offering 500,000 tons of rice at low prices.

Expert Nguyen Dinh Bich said Thailand could not compete with Vietnam because the gap between rice export prices of the two countries was considerable (currently around US$170 for 5% broken rice).

In the domestic market, rice prices remain stable at low levels. Duong Van Men, a rice trader in Lap Vo District in Dong Thap, said the fresh paddy IR 50404 currently sold for VND4,400-4,450 per kilo and the dried one was priced at VND5,000-5,100 a kilo.

The purchasing power for material rice is very weak. The materials for 5% broken rice and 15% broken rice are now sold at VND6,700-6,750 and VND6,600-6,650 per kilo respectively.

Low-cost homes seen as lifeline for troubled developers

Listed realty developers have come up with new business strategies for 2013 including concentrating more on low-cost homes after a year struggling with slackened housing demand.

Most property companies are looking to the low-cost home segment in their 2013 strategies as local housing demand is rising. In fact, many firms were able to minimize losses last year by shifting investment to this segment earlier.

Financial reports of multiple industry players show that they still earned profits, albeit small, and that the revenues might have come from different sources, from property trading, financial investment to services.

Truong Anh Tuan, chairman of Hoang Quan Consulting - Service - Trading Real Estate Corp., said his firm posted more than VND300 billion in sales and nearly VND20 billion in profits last year. Hoang Quan’s sales and profit are lower than in previous years but its business result was still healthy in the context of the dreary market in 2012 when a slew of stocks were labeled bad or stopped from trading.

Tuan ascribed the positive performance partly to the fact that his company had focused on developing homes for low-income people with a series of projects in districts 2, 12, Hoc Mon and Thu Duc in HCMC.

Meanwhile, the firm offered townhouse lots for sale at VND250 million to VND600 million each in other provinces. For instance, the Cinderella project in the southern province of Ba Ria-Vung Tau created revenues for the developer during 2012.

Hoang Quan announced to take part in the country’s low-cost housing program with a complex project in the Mekong Delta province of Vinh Long and the HQC Plaza scheme in HCMC’s Binh Chanh District.

Similarly, Thuduc Housing Development Corp. (Thuduc House) recorded a consolidated after-tax profit of some VND27.5 billion at the end of 2012, just nearly half of the year’s plan. That was the first time in 11 years that Thuduc House had posted the lowest after-tax profit as a result of the worsened 2012 business situation.

Most revenues of Thuduc House came from management of farm produce markets which posted a growth of 19%, while its sales from realty trading fell sharply. Entering 2013, the enterprise continues to follow the realty industry as the core business but will pay more attention to building low-cost homes like S-Home products.

Facing the same woe, Petro Capital and Infrastructure Investment JSC (Petroland) experienced a challenging year to achieve sales of VND500 billion and a meager pre-tax profit of VND956 million. In 2013, Petroland still has two apartment projects in District 2 and District 7 to be completed and delivered to homebuyers.

HCM City starts work on more overpasses

The HCMC Department of Transport last Saturday opened to traffic a steel structure overpass in Tan Binh District and then began construction of three more at high-traffic intersections.

The newly-built, one-way Lang Cha Ca overpass is 244 meters long and 6.5 meters wide, and has two lanes, with one for cars and the other for motorcycles. The cost of the overpass is nearly VND122 billion, with construction costing VND94 billion.

Le Quyet Thang, head of Urban Traffic Management Unit No. 1, said Lang Cha Ca intersection connecting Cu Chi, Hoc Mon and District 12 with the city’s downtown area is a congestion hotspot.

The overpass had been constructed non-stop, even on Tet holiday, so the project was finished after 81 days of construction, 1.5 months ahead of schedule.

Lang Cha Ca overpass is the third steel structure flyover to be put into use in the city after the ones at Thu Duc and Hang Xanh intersections.

Last Saturday the city also launched work on three more steel structure overpasses at Hoang Hoa Tham-Cong Hoa crossroad in Tan Binh District, Nguyen Tri Phuong-Ba Thang Hai-Ly Thai To intersection in District 10 and Cay Go intersection in District 11.

The Y-shaped overpass at Cay Go intersection will cost an estimated VND456 billion.

The one at Nguyen Tri Phuong-Ba Thang Hai-Ly Thai To intersection worth nearly VND319 billion has a length of 390 meters and a width of 9.5 meters, and the third one will be 268 meters long with an investment of nearly VND247 billion.

Only automobiles of less than nine seats are allowed to cross these three overpasses, which are slated for completion by September 30.

CBRE: Ho Chi Minh City office market recovering

Ho Chi Minh City’s office rental market has lifted itself and will continue a marginal increase until at least this year’s third or fourth quarter, according to CBRE Vietnam.

The city’s office market in the first quarter experienced strong take up in both Grade A and Grade B segments, especially in newly completed buildings and many projects in their final stages of constructions, said Greg Ohan, director for office services at CBRE.

New projects that came online commanded a higher asking rental, pushing average rentals up slightly on the fourth quarter of 2012, he added.

CBRE said it saw average Grade A and Grade B asking rents rise marginally by 2.3 percentage points quarter on quarter. After a flat 2012, this year’s first quarter saw Ho Chi Minh City office rents come out of their dip and commence a marginal rise.

“This is a trend we expect to continue until at least the fourth quarter of 2013 until the next wave of new supply,” said Ohan.

Net absorption rates rose from more than 17,000 square metres in the fourth quarter of 2012 to almost 32,000 square metres in this year’s first quarter, according to CBRE’s key buildings tracker.

New Grade A buildings in District 1 which were completed in the first quarter such as Empress Tower and President Place have secured occupancy rates of over 50 per cent upon completion. Even new Grade A buildings in the final stages of construction in District 1 such as Lim Tower and Times Square have over 60 per cent and 50 per cent commitment respectively prior to formal completion, according to CBRE.

The firm also saw a similar strong commitment trend in Grade B buildings from fringe areas, Ohan said. Buildings such as Blue Sky Office Tower at Saigon Airport Plaza in Tan Binh District and Pico Saigon Plaza each had over 50 per cent in principle commitments prior to formal completion.

Ohan remarked that much of the demand in the first quarter was driven by existing occupier expansions, while the number of new setups or FDI driven office take up did not rise. Pharmaceutical, oil and gas, education, legal, local banks and product sourcing companies lead as the drivers for the first quarter demand, added Ohan.

The combination of occupiers seeking consolidation and cost containment, with limited large floor plate availability in District 1, has led to a rising demand for new developments in non-core District 1 locations.

Ohan said there was no major new supply expected to come online within the next 4-5 months. Tightening supply and steady demand was expected to keep asking rents stable and rising marginally.

As cement sector sours, foreign firms eye M&As

The hard time in Vietnam’s cement industry is creating golden opportunities for foreign investors to buy in domestic cement companies on the verge of bankruptcy.

Nguyen Van Diep, chief administrative officer of Vietnam National Cement Association, said that the mergers and acquisitions (M&As) trend was considered the most effective tool for restructuring the domestic cement sector as cement firms were facing great challenges.

In the past three years, there have been approximately 10 M&A deals in this sector. Foreign investors, mostly from Asean countries, covet investments in Vietnam’s cement sector, according to Vietnam Association of Financial Investors (VAFI).

VAFI explained that under policies to promote domestic consumption of countries like Thailand, Malaysia, Indonesia and the Philippines, those countries’ stock markets are experiencing continuous growth in the recent years. This means that businesses in those countries can easily attract cheap equity while many Vietnamese companies are struggling to stay afloat amid mounting inventories and the woeful real estate market.

Domestic entities seem financially unable or unwilling to purchase local cement factories. For example, state-run Vietnam Cement Industry Corporation (Vicem), one of Vietnam’s largest cement producers, lacks capital because many affiliates have invested more in cement production lines in the recent years, while the total debt to Vicem is approximately four times as high as the total equity capital.

Nghiem Hoang Son, deputy director of Peakward Vietnam Ltd, a subsidiary of Hong Kong’s Peakward Enterprises Holding Ltd, predicted that M&A activities in Vietnam’s cement sector would increase in the coming time as the Vietnamese government has tightened up licencing new cement projects in fear that product oversupply could result in market chaos. He cited Germany’s Heidelberg Cement and Indonesia’s PT Gama as companies hunting for opportunities to enter the Vietnamese market.

Managing director Tan Sri Francis Yeoh of Malaysia’s YTL Cement Bhd, which is considering an investment in Vinaconex’s operating $285 million Cam Pha Cement facility in northern Quang Ninh province, was quoted thusly: “The group already has a presence in Vietnam. We are already providing power services in the country and hope to strengthen our presence in this country,”

Previously, PT. Semen Indonesia Tbk, Indonesia’s largest cement producer, bought Thang Long cement plant.

Son said that if more foreign investors took part in the game, it would change Vietnam’s cement sector.

Efforts underway to speed up customs procedures

Efforts are underway to help ease  burdens imposed on businesses involving in customs check.

The Ministry of Finance has teamed up with the Vietnam Chamber of Commerce and Industry and US Agency for International Development (USAID) sourcing comments from the business community upon the amended Customs Law project.

Deputy Minister of Finance Do Hoang Anh Tuan acknowledged that the time needed for customs check in Vietnam was higher than in other regional countries.

“There were multiple reasons slowing customs check process, of them customs related factor accounted for around 30 per cent,” Tuan said. The amended Customs Law, he said, would strive to achieve three main targets, including the customs process reaching international standards; reforming administrative procedures and controlling risk in trade practice.

According to USAID mission director Joakim Parker, Vietnam is currently ranked 74th among world countries in business facilitation aspect albeit the application of e-customs has helped the country shorten the time for customs check, meanwhile cargo clearance time plays a vital part in accelerating economic growth.

“If average cargo clearance time was shortened by one day, it would add 0.5 per cent to gross domestic product (GDP) growth,” Joakim noted.

In the amended Customs Law project, the content concerning customs procedure reforms has captured special attention from businesses.

Under the draft Law, the time for customs officers to check enterprise records must not exceed two working hours and handle cargo check not exceed eight working hours.

Besides, also in light of the draft Law customs declarations would be the only paper needed to show when businesses do customs procedures.

The regulations on priority enterprise regime are also a matter attracting great attention.

General Department of Customs deputy chief Vu Ngoc Anh said albeit existing Customs Law allowed custom check exemption towards priority enterprises, the conditions for enjoying the priority regime remained unclear. Thereby, the draft Law has contained regulations on priority regime towards enterprises, conditions to apply, the rights and responsibilities of customs bodies and priority regime recipients.

A stakeholder in the amended Customs Law project, PetroVietnam, assumed containing customs records up to 10 years would be unfeasible and proposed the customs sector slash the time for keeping files to at most five years and consider e-storage of these files.

Chairwoman of tax consulting firm C&A Dang Thi Binh An proposed the amended Customs Law be added with regulations on the rights and obligations of the agents handling customs declaration services to enhance professionalism.

Besides, the Law should clarify the responsibilities of customs bodies and head of inspection team about check results and give opportunities for involving businesses/individuals to explain check results.

Garment export to new markets sees strong growth

Vietnam’s garment and textile export saw strong growth in several new markets in the first quarter of this year, with the rate as high as 134 percent in Norway and 120 percent in New Zealand, according to statistics from the General Customs Department.

Garment export to Cambodia also increased by 103 percent in the period, hitting $45.7 million.

The ASEAN as a whole also bought more garment and textile products from Vietnam, generating a total turnover of $111.4 million, up 44.4 percent.

Vietnam earned $3.7 billion from the export of garment and textile in the January-March period, up 18.3 percent.

Government should ensure milk quality

Better co-operation among agencies, the media and consumers was needed to crack down on milk-related violations and ensure a healthy market in Vietnam.

The statement was made on April 26 by Do Thanh Lam, vice head of the Market Management Department under the Ministry of Industry and Trade.

Joining an online meeting on milk marketing prices and quality held by the Government's web portal, Lam highlighted the importance of close collaboration to enable consumers to buy quality milk products at fair prices.

He mentioned the exposure of a scandal involving imported Danlait milk early this year as evidence of successful co-operation. After mothers raised their doubt about the milk, which allegedly led to children losing weight, inspections were conducted and the importing company had to account for the wrong labelling.

An investigation revealed that the local importer paid about VND80,000 per can but sold it for nearly VND450,000.

Confused about the quality of milk in the domestic market, many parents preferred to used products brought in as carry-on luggage, Lam said.

Consumers have raised concerns most about recent price hikes for milk products. In the last six years, prices have multiplied about 30 times, adding a huge burden for many young families.

Pham Vu Anh, Vice Director of the Finance Ministry's Price Management Department, said that companies often labelled milk powder for children under six years as "supplementary nutrients".

This excluded the formula from being placed on a list of price-stabilised products, so companies don't have to ask for permission to raise prices.

The department has called for an end to this practice, Anh said.

He said that as of this year when the Price Law came into operation, local finance departments co-ordinated with tax and market-watch offices to tighten inspection over milk and nutrient products.

Le Hoang, Vice Head of the Foodstuff Management Division under the Food Safety Department at the Health Ministry, said that at department website: vfa.gov.vn, consumers could seek information about products that were legally certified as milk products.

Dak Lak launches third instant coffee mill

Ngon Coffee Ltd. Co. on April 28 put into operation a 100 percent India-invested instant coffee processing plant in Cu Kuin district, the Central Highlands province of Dak Lak.

The VND1 trillion plant has a total annum capacity of 10,000 tonnes of coffee products, which are mainly for export. It creates stable jobs for over 200 local ethnic people.

Dak Lak is currently home to the country’s biggest coffee growing area with over 200,000 hectares, and three coffee processing mills with an annual capacity ranging from 2,500 tonnes to 60,000 tonnes.

Vietnam exports more than 1 million tonnes of coffee beans each year to nearly 100 countries and territories worldwide, ranking second among the world’s coffee exporters.

Last year, Vietnam surpassed Brazil to become the world’s largest coffee exporter after earning a value of $3.4 billion, a year on year increase of 36 percent.

Dak Lak province alone produces 400,000 tonnes of coffee beans and makes an export turnover of about $700 million per year.

Ha Long builder launches 53,000-tone cargo carrier

Ha Long Shipbuilder of the Vietnam Ship Industry Group successfully launched a 53,000-tone ship named THOR BREEZE on April 29th in Quang Ninh.

The ship is 190m long, 32,26m wide, 17.50m high and has a tonnage of 65,700 sqm and the main engine of MAN B&W 9.480 KW.

The ship has double decks and 5 holds of cargo. It is also equipped with 4 cranes, allowing self- loading and unloading cargo, and runs at 14 nautical miles per hour.

This is the 10th 53,000-tone ship the company builds for international ship-owners on the commercial orders.

All ships of this kind are designed by Danish Company Carl Bro, equipped with modern equipment and devices, meeting the standards of DNV and other latest international maritime conventions.

Under the set plan, after the launch, Ha Long builder will quickly install equipment and devices under the contracts to hand the ship over to the ship owner Thoresen Thai, Thailand in the June-September quarter of 2013.

Canon opens first Image Square in Hanoi

Canon last Saturday put into operation its first Image Square outlet at the Vincom Tower shopping center in Hanoi where customers can experience the latest products of the Japanese firm.

Image Square is the brand name of a chain of stores retailing high-quality products made by Canon, such as digital cameras, accessories and lens, video cameras, photo printers and inkjet printers.

Image Square is where users can experience the latest Canon products with professional advice and customer services before getting their most favorite items. Photography seminars and training courses will be organized at the store for the benefit of customers.

Canon will also lure customers via promotional programs at the store. Kensaku Konishi, president and CEO of Canon Singapore, said Image Square has been a great successful business model in Asia and that his firm wants to expand it to Vietnam as a growth market.

Canon opened Image Square in Hanoi after the first store was set up in HCMC six months ago, which is performing well. The company is looking to open a total of 20 stores nationwide using the same model by the end of next year.

The Image Square system was first launched in India, with a total of 100 outlets active there at the end of last year.

Eximbank shareholders okay merger plan

Shareholders of Vietnam Export Import Bank (Eximbank) have approved a plan to weigh the possibility of merging with other banks, with the board of directors tasked with finding ways to realize the plan.

Le Hung Dung, board chairman of Eximbank, said the bank was planning to merge with others to expand its network, citing State Bank of Vietnam restrictions on banking sector expansion as a reason.

To develop business in a long term, the bank will need to have well-developed facilities. “Eximbank has only 217 points of transaction nationwide while Sacombank owns over 400, not to mention branches in Laos and Cambodia. Similarly, Sacombank earned VND850 billion in pre-tax profit in the first quarter while Eximbank earnings had totaled only VND470 billion in the year to April 24,” Dung said.

“Eximbank management has found that Sacombank’s higher profit resulted from its extensive network, and better borrowing and lending operations.”

If five branches were set up each year, Eximbank will need 40 years to have the same number of branches as Samcombank’s. “Therefore, merging with other banks can help Eximbank speed up expansion in the coming years,” he said.

Responding to a question about this year’s dividend of 12% which is lower than last year, Truong Van Phuoc, general director of Eximbank, said the profit target for this year was VND3.2 trillion, 12.2% higher than last year, but the bank’s chartered capital is estimated to rise 6.12% this year, so the dividend would not be lower.

The bank might miss the profit target. A sharp interest rate reduction of six percentage points last year and another round of rate reductions this year have impacted on the bank’s profitability. Eximbank incurred a loss of VND800 billion after the interest rates on existing loans were cut to below 15% and then 13%, according to Phuoc.

Regarding gold trading, Phuoc said Eximbank sold gold to intervene in the market in late 2011 and early 2012 when the domestic gold price was VND1.5 million per tael higher than the global market level. The bank late last year bought back the gold but is still in short of one ton.

The mobilization of gold from the public with rates of 0.5-0.7% per year and lending in Vietnam dong with rates of 10-12% can bring in profits for the bank.

BIDV wants to list stock this year

Bank for Investment and Development of Vietnam, or BIDV, during its annual general meeting last Friday said it would list on the local stock market within this year as the market has been better than in the previous year.

Speaking at the meeting, BIDV chairman Tran Bac Ha said that the bank has plans offer shares to strategic shareholders after listing.

Ha also offered an apology for previous listing postponements. “We are sorry for official or unofficial announcements about the listing plan in the local media earlier,” Ha said.

Last year, BIDV’s listing plan was considered amid the poor performance of the economy and stock market, prompting both BIDV and the Government to carefully weigh this plan. However, if the market is better this year, the bank will certainly carry out this plan, Ha explained.

BIDV leaders during the meeting also agreed in principle to list on the Hochiminh Stock Exchange (HOSE) in the 2013-2014 period. Shareholders assigned the board of the directors to decide listing time given consideration of developments on the market and HOSE’s guidelines.

Ha said BIDV after listing will need long-term investors.

Two days earlier, the bank sent a notice to shareholders to instruct share ownership transfer to boost liquidity of its stock.

As of the end of last year, BIDV had total assets of nearly VND485 trillion, up 19.5%. Its mobilized capital reached a three-year high of VND358 trillion, a 27% year-on-year increase.

This year, the bank has plans to raise mobilized capital by 13% and obtain credit growth of 12-16.5% through priority loan programs. Its pre-tax profit is expected at over VND4.7 trillion.

DongA Bank to restructure financial bodies

DongA Bank will focus on restructuring its securities firm and fund management company this year after poor operations of the two enterprises caused heavy losses in 2012.

Last year, the bank suffered a loss of nearly VND138 billion due to foreign currency trading and over VND58 billion from stock investment, doubling that of 2011. DongA Securities Company incurred a loss of over VND30 billion.

Speaking at the annual general meeting on Saturday, DongA Bank general director Tran Phuong Binh said that the lender is able to make investments only through the securities firm in the coming time. So, it is necessary to maintain operation of the broker.

The lender had yet to decide share sales to strategic companies. Pham Van Bu, chairman of the bank, said that many domestic and foreign investors have come to seek share purchase opportunities but the bank will not consider this matter until its charter capital has been increased.

This year, DongA Bank has plans to raise its charter capital to VND6 trillion. This plan got approval last year but has yet to be realized due to difficulties of the banking system.

Binh said that capital increase is necessary for the bank to maintain development and boost lending activities. The bank has plans to issue shares to existing shareholders to raise capital in the fourth quarter.

Last year, its after-tax profit tumbled to only VND777 billion given deductions for reserve funds. The bank strongly increased deductions for these funds from VND296 billion to nearly VND632 billion.

Besides, reduction of lending rates of old loans to below 15% per annum as requested by the Government also hurt its business results.

Concerning remuneration of board members, Vu Thi Vang, a member of the board of directors, said that each member is paid over VND30 million a month, which is rather low compared to other banks.

This year, the bank has plans to reach VND85 trillion in total assets, up 23%, and credit growth rate of 9%. It targets to obtain VND1 trillion in pre-tax profit, a 29% year-on-year increase.

DongA Bank will set up a project to deduct an additional VND400 billion for reserve funds. This sum will be added to its profit if the bank needs no more deductions at the end of the year.

Thomson Reuters GFMS: Gold still being smuggled into Vietnam

Plenty of gold is still being smuggled into the country, according to a senior analyst of Thomson Reuters GFMS.

Cameron Alexander, who is responsible for market research in Vietnam and other Southeast Asian countries at Thomson Reuters GFMS, said there remains a lot of gold finding its way to Vietnam informally.

Alexander did not give estimates on the percentage of smuggled gold in total gold consumption but said different sources of evidence indicated gold is still flowing into the domestic economy through informal channels.

Market surveys done in neighboring countries are clear proof of gold being smuggled into Vietnam, she said.

In the past when Vietnam had a couple of gold processing companies, a majority of gold imported for processing into an investment vehicle, she said, but now SJC is the nation’s only gold processor, so imported gold is mainly used for jewelry production.

Thomson Reuters GFMS provides information and data for the World Gold Council to produce reports and analyses on gold.

According to a report on gold demand trends in 2012 by the World Gold Council, Vietnam’s demand for gold bars in 2012 amounted to 65.6 tons, on top of 11.4 tons of jewelry made from this yellow metal. The respective figures of the previous year were 87.8 tons and 13 tons.

In terms of value, the country’s gold consumption fell 20% since the value of gold demand in 2012 totaled US$4.1 billion compared to the US$5.1 billion a year earlier.

A source from the gold council said gold demand is the total amount of gold jewelry and bars consumed in a country; in other words, that is the total volume directly consumed by individuals.

In other countries, consumers usually buy gold jewelry as a long-term store of value but Vietnamese consumers have a different approach; they have repeated transactions of the same amount of gold.

For example, an individual could convert cash into gold to pay for a house he or she bought and then the house seller sold the gold for money. Such a transaction could be repeated several times, thus creating huge revenues for gold trading firms.

Cameron Alexander of Thomson Reuters GFMS said that regarding consumption, efforts had been made to give out net figures, meaning repeated transactions were excluded after collecting data from major gold traders.

Bosch qualified for high technology status in Vietnam

Bosch has been recognized in-principle as a high-technology company by the Prime Minister of Vietnam, hence the leading global supplier of technology and services will be eligible for tax incentives under this category to facilitate its ongoing expansion and investment in Vietnam.

The qualification approval process involved the ministries of Planning and Investment; Science and Technology; Finance; and Industry of Trade prior to a final review by the Prime Minister, according to a statement of the company.

As recognized by the Government as a hi-tech company, Bosch Vietnam's project will receive the highest tax incentives, Vo Quang Hue, managing director of Bosch Vietnam, told the Daily on the phone on Thursday.

“We view the high-tech qualification as an affirmation of Bosch as a global leader in innovation and technology,” Hue said, adding that “We would like to thank the Prime Minister and various ministries, as well as Dong Nai Province authorities for their invaluable and continued support.”

Bosch established its first wholly-owned subsidiary in Vietnam in 2008 for trading, as well as investment in a Continuously Variable Transmission (CVT) push-belt manufacturing plant.

In 2011, the high-technology plant opened its doors at the Long Thanh Industrial Zone in Dong Nai. The total investment for the plant is expected to amount to 230 million euros by 2015 versus 110 million euros at present.

“We are heartened by the progressive direction that the Government is taking to not only attract new foreign investments into the country, but also to incentivise existing companies to expand their operations within the company,” Martin Hayes, president of Bosch Southeast Asia, said in a statement. “We believe this decision demonstrates Vietnam as a pro-investment country not only to other business divisions within Bosch, but to the rest of the world as well.”

According to the World Intellectual Property Organization (WIPO), Bosch ranked fifth in the world in 2011 for the most number of patents filed with the Patent Cooperation Treaty (PCT). In 2012, Bosch filed nearly 4,800 patents worldwide, with 9.1% of its sales revenue that amounted to 4.8 billion euros invested back into Research and Development.

ACCA welcomes 123 new members

The Association of Chartered Certified Accountants, or ACCA, on Thursday granted membership certificates to 123 members in Vietnam, including 67 ones in HCMC.

The ACCA membership is considered as international passport for those in the financial and accounting industry. This is an important condition for auditors to prove their capability as the ACCA program is widely recognized in the world.

Stephen Heathcote, executive director of markets at ACCA, said that the program helps increase the number of qualified financial experts in Vietnam.

Designed to open new opportunities for accountants in developing countries, the program is suitable with socioeconomic conditions and education system in the country. ACCA members will make valuable contributions to the local economy, Heathcote said.

ACCA on Thursday also gave partner certificates to Vinacapital, TNK Vietnam B.V Company and Ecovis STT Vietnam Company among others.

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