Many property projects seek new investors

Transferring realty projects has been much more transparent than before as several project owners have asked brokerage firms to introduce financially-capable investors for cooperation or transfer.

At least three projects have been announced as products awaiting new investors in recent days. Among these is the Saigon Link project covering more than 2,500 square meters in HCMC’s Phu Nhuan District.

Adam Bury, deputy director of CB Richard Ellis Vietnam (CBRE Vietnam) as the consulting company for the project, said the cleared land lot bordered by Nguyen Van Troi and Hoang Van Thu streets may be developed into a commercial and apartment complex.

As a populous area, Phu Nhuan District has great potential for housing and office demand, which is also one of the factors that investors would consider when making investments into the project, Bury remarked.

Similarly, Pacific Property and Infrastructure Development Joint Stock Company (PPI) earlier announced to look for partners to jointly develop two realty projects in Thu Duc District.

PPI once planned to deploy the Saigon Water Garden complex on a total area of more than two hectares and the PPI Tower apartment building in Hiep Binh Chanh Ward in Thu Duc but it failed to do so due to the unfavorable market conditions. The projects have already completed site-clearance and compensation and now are ready for construction, the firm said.

Those projects with cleared land may be attractive to foreign and local investors in the near future, according to Marc Townsend, managing director of CBRE Vietnam.

HCM City industrial wastewater poorly handled

Wastewater treatment systems are found at only 60% of the industrial wastewater sources in HCMC, while wastewater at the remaining sources is neither properly handled nor thoroughly treated before being discharged into the environment.

Water pollution caused by wastewater from industrial parks has become a very serious problem. The volume of industrial wastewater is much higher than wastewater from other areas, said Nguyen Van Phuoc, director of the Institute for Environment and Resources under the Vietnam National University in HCMC.

He was speaking at a press conference on the Green Consumption Month held by the Saigon Union of Trading Co-operatives (Saigon Co.op) last week.

In the southern key economic zone including HCMC, Dong Nai and Binh Duong, central wastewater treatment facilities are quite common, yet violations against the environmental regulations are widespread.

A survey of 826 industrial wastewater sources in 24 districts in HCMC from 2010 to 2012 reveals that only 60% of these sources have wastewater treatment systems. The remaining sources treat wastewater with septic tanks before dumping it into the environment.

Notably, 44% of the wastewater sources surveyed discharge an amount of 50 cubic meters per day, accounting for 90% of the total wastewater volume.

Tan Binh District is responsible for the largest portion (25%) of the pollution load of chemical oxygen demand (COD), followed by District 12 (15%) and Thu Duc District (11%).

As a result of water pollution, the number of conjunctivitis, diarrhea and cancer patients is rising. Up to 80% of dysentery and diarrhea cases in Vietnam are caused by polluted water, according to the World Bank.

The Green Consumption Month has been organized annually since 2010 to encourage citizens to buy products from environmentally friendly producers. In addition, it calls on enterprises to fully comply with the environmental protection law to improve the environment and guarantee sustainable development.

The launching ceremony for the 2013 Green Consumption Month will be held at the Youth Cultural House in HCMC’s District 1 at 5:30 p.m. this Sunday.

Firms remain hesitant about energy labeling

Most appliances and industrial equipment of big enterprises have been attached with energy labels as energy labeling will be enforced from July but many small enterprises have not registered to fulfill this requirement.

In January, the Prime Minister agreed to extend the obligatory energy labeling to the end of next month for appliances and industrial equipment.

Products required to be labeled are tubular fluorescent lamp, compact fluorescent lamp, electromagnetic and electronic ballasts for fluorescent lamp, air conditioner, washing machine, refrigerator, electric cooker, electric fan, industrial equipment such as distribution transformer and electric motor.

According to the National Energy Efficiency Program, 100% of air conditioners, 90% of lighting devices, 1,500 types of air conditioners and electric fans have completed the energy labeling registration.

Meanwhile, firms of small scale and those importing small shipments have not registered. Those who do not stick energy labels on their products from July will get warnings before they are fined. No more extension of the rule is expected.

On September 12, 2012, the Prime Minister issued Decision 51/2011/QD-TTg cataloguing devices and equipment that must be labeled.

Interest rate cap for seafood, livestock, chicken breeders

The maximum bank interest rate for seafood, livestock and chicken breeders has been reduced and capped at 10 percent per annum, according to the State Bank of Vietnam.

A dairy farm in Duc Trong District in the Central Highland province of Lam Dong (Photo: SGGP)

That is part of a Government policy to provide preferential interest loans to five priority sectors including agriculture and rural development.

On May 29, the State Bank sent a document to five banks, namely, Agribank, BIDV, VietinBank, Vietcombank and MHB, instructing them to continue to implement the Government policy to apply 10 percent interest rate for livestock, chicken and seafood breeders and processors.

Improving public investment efficiency

Reducing public and foreign debts to a level below the manageable threshold and ensuring national financial security demands enhancing the efficiency of public investment.

National Economic University (NEU) Prof. Dr. Pham Van Hung underscores the need to restructure outstanding debts and future borrowing conditions.

In regards to borrowing capital, increasing the rate of domestic debts will help gradually reduce the country’s dependence on foreign debts, keeping expenses and debts at a reasonable level, he says.

Foreign debts should be below 50 percent of the total debts by 2020. Debts from official development assistance (ODA) should be kept at 60 percent of foreign debts.

Prof. Hung argues that without enhancing the efficiency of public investment, the government will face the risk of a public debt crisis like the one hitting other economies.

First, public investment activities should be strictly controlled. Laxity regarding the government’s debts and expenses could lead to economic losses and political and social instability across the region.

The restructuring of public debts should eliminate unnecessary and wasteful projects.

Transparency is crucial to optimising the control of public investment activities.

Depending on the scale of public investment projects and the capacity of their main contractors, options include self-management, consultancies, or delegating to another investor.

Public investment planning needs should fit in with the annual and five-year plans for socio-economic development.

The government’s annual public investment planning budget should cover key national projects using local investment resources and capable of sticking to schedule.

NEU Prof., Dr. Do Duc Binh says it is crucial to get a good rerun on borrowed investment capital.

The government needs to clearly define development targets and implementation plans so as to avoid unnecessary investment in underresourced sectors.

Financial sources and public debt management culpability regulations should be made public along with the regular evaluation of investment project efficiency.

Borrowing money for development is unavoidable. But how much can Vietnam afford to borrow?

Prof. Binh says one must learn from the European Union’s practical views on the importance of safe public debt limit in association with GDP, state budget planning, and trade balance.

The National Assembly needs to consider and fix a reasonable level of public debt and budget deficit for Vietnam in line with international norms.

Increase in import of cattle, chicken feed

According to the Ministry of Agriculture and Rural Development, import turnover of livestock and chicken feed reached US$1.15 billion in the first five months of the year, an increase of 40.6 percent over the same period last year.

In May alone, Vietnam imported 236,000 tons. The main import markets have been India with nearly 25 percent, the US with 18.42 percent and Argentina with 14 percent.

Despite high import turnover, the retail price escalated by VND1,500 a kilogram while the price of pork and chicken fell by 40-50 percent over the last one year.

The Ministry of Agriculture and Rural Development and the Ministry of Finance said that they would launch an inspection over cattle feed prices as soon as possible.

The Livestock Department under the Ministry of Agriculture and Rural Development is proposing to the Government to remove the five percent Value Added Tax imposed on cattle and chicken feed, which has indirectly affected farmers.

Warburg Pincus to invest in Vincom Retail

An affiliate company of Warburg Pincus has committed to invest US$200 million to acquire 20 percent equity interest in the Hanoi-based Vincom Retail--a member company of Vingroup Corporation.

The New York-based firm may invest an additional US$100 million in Vincom Retail, if it sees further growth and opportunities in Vietnam.

When Warburg Pincus provides the additional US$100 million, Vingroup Corporation will also balance the amount as investment in Vincom Retail.

In addition, Warburg Pincus has pledged to invest upto US$25 million in Vingroup’s first initial public offering (IPO) in international securities exchange for the first time.

Vincom Retail is a subsidiary of Vingroup with assets valued at approximately US$1.1 billion.  Its existing assets include Vincom Center B in Ho Chi Minh City and Vincom Center Ba Trieu and Long Bien in Hanoi.

Vincom Retail is putting into operation two leading shopping malls in Asia, and recreational and dining facilities in Vincom Mega Mall Royal City and Vincom Mega Mall Times City, both due to launch in July and December this year in Hanoi.

Farmers sell fruit directly to supermarkets

Many supermarkets, wholesale markets and fruit exporting companies in HCMC will directly sign purchasing agreements with farmers at the Southern Fruit Festival to be organized at Suoi Tien Park next month.

Around 100 farmers who won fruit contests from 2009 to 2012 will directly meet corporate purchasers like Tam Binh and Hoc Mon wholesale markets, supermarkets and exporters at Suoi Tien, Huynh Huu Hanh, deputy director of the HCMC Center for Agricultural Consulting and Supporting, said.

Farmers with good products and high capacity are selected to join the event where ten agreements may be clinched, Hanh told a program introducing the festival in HCMC on Tuesday.

About 550 farmers from 21 provinces and cities have registered to showcase 700 fruit samples at the festival.

Opening on Saturday, the event will last three months under the arrangement of the municipal Department of Culture, Sports and Tourism and the theme park. There will be several attractive activities at the event like a floating fruit market and artistic shows by Thailand, South Korea and Malaysia.

Up to about 1,000 tons of fruit were sold out at the event last year, the organizers report.

Coffee, forestry items stand out in export picture

Higher export prices of coffee, wood and wooden products have stolen the limelight in the picture of the nation’s agro-forestry-fisheries export this year.

Coffee exports have reached almost 700,000 tons worth nearly US$1.5 billion in the year to date, down 23% in volume and 22% in value year-on-year. However, the average coffee export price is estimated at US$2,172 per ton, a rise of 4.3% over the same period last year.

Exports of wood and wooden products have totaled US$2 billion, up 10.4% year-on-year. Exports to the U.S. have risen 6%, while Asian buyers like China, Japan and South Korea have increased wood imports from Vietnam by 16-21%.

The performance of coffee and woodwork exporters has been good but exporters of the three major items of rice, rubber and seafood have suffered a decline of 6-13%, which has in turn resulted in a drop of 4.6% in the total agro-forestry-fisheries export value, which is US$10.7 billion in January-May.

Seafood exports in the first five months are estimated at US$2.2 million, down 5.6% year-on-year. Exports to the U.S., Japan and South Korea have brought in US$332 million, US$295 million and US$118 million respectively, down 1%, 5% and 20%.

Exports of the major agro-products have also slid considerably.

The average rubber export price in the first four months was US$2,651 a ton, down 13% year-on-year, which is ascribed to the weakened demand of China.

Over 47% of Vietnam’s total rubber exports have gone to China, but this buyer has cut its purchases from Vietnam due to its surging inventory. As a result, January-May rubber shipments have dipped 21.3% in volume and nearly 28% in value over the first five months of last year.

Meanwhile, cashew has been struck by a sharp fall in export prices. Cashew export prices in the first four months averaged out at US$6,130 per ton, down 12% year-on-year.

Five-month cashew exports have amounted to 85,000 tons, fetching US$535 million, up nearly 10% in volume and a modest 0.8% in value over the same period last year.

As for pepper, the Vietnam Pepper Association has forecast local pepper output would dwindle 20% and has called for a halt to new pepper shipments. Still, around 68,000 tons of pepper worth US$446 million has been exported in the first five months, an increase of 14% in volume and 9.6% in value compared to the same period in 2012.

In the first four months, pepper got an average export price of US$6,591 a ton, down 3.4% year-on-year. Meanwhile, rice averaged out at US$445 a ton, losing 10% from the same period last year.

Some 2.86 million tons of rice has been shipped in the year to date, generating over US$1.26 billion in revenue, down 8% against the year-ago period.

Tea exports in January-May are put at 48,000 tons worth US$73 million, a drop of 5.6% in volume and a 1.3% rise in value. The average tea export price in January-April was US$1,501 a ton, up 6.2% against the same period in 2012.

Local firms open factory compound in Cambodia

Kamadhenu Ventures Cambodia Limited, 51% owned by Vietnam’s NIVL and Binh Dinh Sugar, have commissioned a compound of sugar, ethanol and thermal power plants in Kratie Province, Cambodia.

The sugar refinery with a designed daily sugarcane processing capacity of 3,500 tons while the capacity of the ethanol plant is 30,000 liters a day and that of the thermal power station 20 MW.

The sugar mill will provide products for the Cambodian market and Europe. Cambodia now is one of the 49 least developed countries (LDCs) that are entitled to free import tax and quotas in the EU market under the Everything But Arms Initiative (EBA).

The EBA mechanism also allows LDCs to export products to the EU at a minimum price which is not lower than 90% of the reference price of the EU, and this is a great advantage of sugar plant projects in Cambodia.

With a designed capacity of 30,000 liters a day, the ethanol plant is expected to serve the industries of foodstuff, beverage, healthcare and chemical substances in Japan, South Korea and the Philippines among others.

In the meantime, bagasse of the sugar factory will be used for power generation for the complex’s operation and power sales to the Cambodian Government.

Power prices average out at 16 U.S. cents a kWh in Cambodia, which may amount to up to 90 U.S. cents in rural areas in the country.

National Assembly deputies propose early corporate income tax cut

National Assembly deputies have recommended slashing the corporate income tax to 20% for all enterprises from the current level of 25% as a way to support enterprises.

They made the proposal at a discussion on revising the Law on Corporate Income Tax on May 29.

The government has proposed reducing the tax to 22% from early 2014 and 20% from 2016, however, many National Assembly deputies said that the cut to 20% should be carried out as soon as possible.

Deputy Nguyen Thi Nguyet Huong from Hanoi said the 20% tax rate should be applied from July 1, 2013 to assist local enterprises, with 69% of them reporting losses.

Chairman of the Vietnam Chamber of Commerce and Industry Vu Tien Loc said the level of 20% should be applied for all types of firms, including small and medium-size enterprises.

“Statistics from the tax agencies show that around 30% of companies are able to pay tax, meanwhile, the rest are making losses. However, the rate of 30% serves as a momentum to the national economy’s development,” Mr. Loc noted.

According to Deputy Do Van Ve from Thai Binh Province, enterprises have been facing difficulties and corporate income tax should be brought down to 20% or even 18% in the years to come and all types of businesses should benefit from the reduced tax rate to ensure equal competition.

The VCCI chairman also advocated the removal the cap on corporate advertising funding, adding that this should need a roadmap.

New protections for online shoppers

A newly-issued decree on e-commerce which will take effect July 1 is expected to provide better protection for online shoppers and boost internet trading.

Over the past five years, the domestic e-commerce market has been rapidly growing, but so have a variety of internet scams. The Vietnam E-commerce Association stated that Vietnam needs stronger regulations to protect consumers.

In particular, group coupon sites have raised concerns recently, with rampant online shopping fraud, including the sale of substandard products such as vouchers for food, trips and falsely discounts. Decree 57, which currently deals with online transactions and would be replaced by the new law, does not address this type of business and has left a large amount of unsolvable disputes, usually leaving the consumer at a disadvantage.

Le Thanh Phuong, a resident of HCM City, said after detecting a fake shop address, substandard goods and vague advertising, she decided to steer clear of coupon websites.

Last year, the leaders of muaban24.vn were arrested for tricking hundreds of people into a multi-level marketing scam which earned more than VND600 billion (USD28.7 million).

Managing director of the website Fresh Flower World, Nguyen Thi Thuy Vu, said, "The e-commerce business has become increasingly tough and risky because of incomplete legal framework, making for customers' reluctance."

The new decree bans online trade for businesses that make certain violations, including those that require payment to join or force members to recruit others to join and websites selling fake products or violate copyright law. Also, coupon websites must compensate customers if their products do not match what is advertised.

The Ministry of Industry and Trade will also set up a portal for consumers to identify sites that have been red-flagged.

Ha Ngoc Son, an official from HCM City Department of Industry and Trade, said customers are currently hesitant to make online transactions, and that the new law would hopefully go some way to boost consumer confidence.

Truong To Linh, co-founder of memua.vn said, "We need policies to protect and encourage trustworthy companies. Furthermore, managing agencies specialised in e-commerce is also necessary to raise customer awareness."

Vietnam tops Southeast Asia in beer consumption

Vietnamese people spend around USD3 billion on beer annually, topping Southeast Asia and standing third in Asia just behind China and Japan.

According to a Eurowatch market survey agency, Vietnamese people drink around nearly three billion litres of beer in 2012. A Vietnamese person drinks 32 litres of beer on average per year.

Vietnamese people’s increasing beer demand has led to the higher import of beer from European and American countries. Foreign beer brands have become more familiar with Vietnamese consumers although their prices are from two to three times higher than domestically-produced varieties.

Do Manh Cuong from Eresson Beer Restaurant said, “Customer numbers to the restaurant have been on a sharp rise on these summer days with more than 1,000 litres of beer sold weekly on average.”

The beer business industry has offered jobs for the national economy and also helps to boost the development of other related areas such as food business, however, Vietnamese habits spending drinking beer, particularly at noon during the working week, has raised concerns about the possibility affecting their working efficiency.

Many bars in Hanoi are earning tens of millions of VND per day thanks to the hot weather.

Mr. Ha, a staff member who keeps cars and motorbikes at a beer hall on To Hieu Street, Cau Giay District, said over recent days, his pub, which can hold 300 people, was full of after work customers. This may bring big profits to the owner, but the staff members are having to work very hard.

Two restaurants on Hoang Quoc Viet Street, are serving around 2,500 customers per day. A staff member at the Hai Xom Restaurant said the outlet was earning at least VND50 million (USD2,380) a day from selling beer per day.

Japan investors from Thailand want to enter Vietnam

Not only Japanese firms operating in China but those in Thailand are also eyeing Vietnam as a favorite destination for business, said Hirotaka Yasuzumi, managing director of  the Japan External Trade Organization (JETRO) in HCMC.

Japanese investors in China are shifting some of their operations to Vietnam or looking for material supplies from Vietnam. Meanwhile, those active in Thailand have shown interest in Vietnam because labor cost in Thailand is rising, said Yasuzumi.

He was speaking at a press briefing on Wednesday on an upcoming exhibition in HCMC aimed at promoting supporting industries in Vietnam.

The trend of Japanese enterprises in China leaving for other nations started long ago but it has recently grown due to the rising labor cost in China and the tense relationship between the two countries, he said.

Meanwhile, the trend of Japanese companies in Thailand switching to Indochina began last year and is still continuing, with Vietnam being on their radar. Therefore, investment of Japanese firms in Indochina in general and in Vietnam in particular is forecast to increase.

Japanese enterprises invest more in Thailand than Vietnam, said Yasuzumi. The number of Japanese firms operating in Thailand is about three times bigger than in Vietnam, he estimated.

The biggest obstacle to Japanese businesses wishing to invest in Vietnam is the lack of supporting industries, he noted.

The percentage of local supplies for Japanese companies is only 28% in Vietnam, versus 61% in China and 53% in Thailand, according to a survey done last year by JETRO.

Over the past ten years, JETRO has conducted trades and organized exhibitions on supporting industries in a bid to foster the development of supporting industries in Vietnam. However, the percentage of local supplies has not improved much.

Yasuzumi ascribed this situation to the fact that local workers have limited skills, the domestic market is not big enough, and most enterprises active in supporting industries are small and medium.

In 2012, Japan represented more than half of the total foreign direct investment (FDI) in Vietnam. Since the beginning of this year, Japanese investors have poured nearly US$3.7 billion into Vietnam, accounting for 43% of the total number.

Last year the average for workers was US$6,734 per capita per year in China, US$6,704 in Thailand and US$2,602 in Vietnam.

As for managerial staff, the respective wages were US$19,761, US$27,204 and US$12,245 in China, Thailand and Vietnam.

Three exhibitions will take place at the same venue in HCMC this October.

Reed Tradex of Thailand along with JETRO and the HCMC Investment and Trade Promotion Center (ITPC) will organize three exhibitions at Saigon Exhibition & Convention Center (SECC) in HCMC’s District 7 from October 10 to 12.

Two of these exhibitions are METALEX Vietnam, an international exhibition on machine tools and metalworking solutions for production upgrade, and NEPCON Vietnam, an exhibition on surface-mount and testing technologies and supporting industries for electronics manufacturing.

The third exhibition is an exhibition of the coalition of enterprises active in supporting industries in HCMC. The event offers Japanese and Vietnamese entrepreneurs a chance to carry out trade of molds, electronic components and machines.

Tra fish farming faces fresh difficulties

The nation’s tra fish production is still facing difficulties this month, seeing many farmers halting production due to low selling prices and high production costs but shrimp farming is coming along nicely, according to the Ministry of Agriculture and Rural Development.

The price of unprocessed tra fish currently ranges between VND21,500 and VND22,000 per kilogram while production cost of a kilogram of tra fish is VND23,000-24,000.

In addition, farmers are unable to continue due to prolonged losses over the past few years and difficult access to bank loans, even though interest rates have been lowered. If the current situation continues, the tra fish farming area may continue to be scaled down.

The tra fish volume in the first five months is estimated at 390,000 tons with a farming area of 5,700 hectares. Among these, An Giang Province accounts for 119,000 tons and 779 hectares and Dong Thap Province has 117,729 tons and 1,233 hectares respectively.

Meanwhile, shrimp farming in brackish water is pretty good this month. One of the provinces having a large shrimp volume is Ca Mau with 40,700 tons of tiger shrimp and 3,300 tons of white-legged shrimp. Besides, Bac Lieu harvests 21,082 tons of tiger shrimp and 955 tons of white-legged shrimp.

The prices of small and large white-legged shrimp are VND80,000-85,000 and VND110,000-115,000 per kilogram respectively while small and large tiger shrimp are sold at VND145,000-150,000 and VND200,000-210,000. With such prices, farmers can earn an average profit of VND45-70 million per hectare.

According to the agriculture ministry, this month’s estimated fishery volume is unchanged year-on-year with 309,000 tons, raising the total fishery volume in the January-May period to over one million tons.

In related news, the price of red tilapia fish has bounced back after a long decline due to rumors that it was contaminated with the banned chemical Trifluralin.

Nguyen Van Hiep, a fish farmer in Tien Giang Province’s My Tho District, said that red tilapia is now sold at VND38,000-40,000 per kilogram, up VND26,000-28,000 from the same period last year.

The price in Dong Thap Province’s Cao Lanh District has increased by VND22,000-26,000 year-on-year to VND36,000-38,000 per kilogram.

According to fish farming households in Tien Giang Province, the high price of red tilapia results from a supply shortage as many farmers have stopped farming due to losses.

“Information on diseases in cattle and poultry in recent times has made consumers shift to seafood products, which is one of the reasons for the high red tilapia price,” Hiep said.

With the current price, after subtracting production costs, farmers will have a profit of over VND10,000 per kilogram.

Rice prices in free fall despite stockpiling plan

Rice prices in the Mekong Delta are falling drastically while enterprises and experts are casting doubt on the effectiveness of the summer-autumn rice stockpiling program.

As of May 16, around two million tons of rice had remained unsold, including 200,000 tons at Vietnam Northern Food Corporation (Vinafood 1) and nearly 876,000 tons at Vietnam Southern Food Corporation (Vinafood 2), says the latest report of the Vietnam Food Association (VFA).

The rice export price is now very low, while production cost is high, thus challenging the rice storage program, said Lam Anh Tuan, director of Thinh Phat Co. Ltd. in Ben Tre, a member company of VFA.

In the winter-spring rice crop, the average production cost was just VND3,600 per kilo, but in this summer-autumn crop, it is more than VND4,100 a kilo, according to the Ministry of Finance.

Therefore, “to ensure profit for farmers, rice should be bought at over VND5,000 per kilo, but then exporters may have difficulty finding importers,” said Tuan.

“If rice was bought at high prices, who would offset the losses incurred by traders? Conversely, if it was bought at low prices, farmers would suffer losses. This is a dilemma.”

He said his company would be willing to buy a small volume to show a sense of sharing with farmers. If the chance of heavy loss was high, he would give it a second thought.

To export rice, enterprises must offer low prices. Besides, foreign buyers when learning of the high inventories at local companies will seek ways to push down prices.

Therefore, Vo Hung Dung, director of the Can Tho City branch of the Vietnam Chamber of Commerce and Industry, said the rice stockpiling scheme is unviable.

To improve rice consumption, the Mekong Delta localities should reduce the rice farming area, VFA Chairman Truong Thanh Phong suggested.

“Since 2012, the global rice inventories have been rising very quickly, so if Vietnam’s rice output keeps surging, the food staple must be sold at low prices, bringing no profits to farmers and sending businesses into a tailspin,” he said.

The summer-autumn rice prices in the Mekong Delta have declined by VND400-500 per kilo.

Duong Van Men, a rice trader in Dong Thap’s Lap Vo District, said the fresh paddy IR 50404 now sold for only VND3,700-3,800 per kilo, down VND400-500 over the middle of last week.

In the communes Thanh Loc, Phu Cuong and My Thanh Nam of Cai Lay District, Tien Giang, the fresh IR 50404 is quoted at VND3,800 a kilo.

Although rice prices have fallen sharply, traders do not dare to buy for fear that prices could drop further, said Men.

Enterprises in Dong Thap and Can Tho are buying the paddy for the low-grade IR 50404 rice at VND5,950-6,000 per kilo, down VND400-450 against the middle of last week, and the long-grain types at VND6,300-6,400 a kilo, down VND300.

Tuan of Thinh Phat ascribed the strong price decline to the poor quality of the summer-autumn rice as well as the problems with export.

French business interested in urban and railway transportation

Eleven French companies specializing in urban and railway transportation have introduced their technologies and know-how to Vietnamese decision makers and urban transport sector professionals.

As part of the France-Vietnam Year, a seminar was organized by UBIFRANCE Vietnam in HCMC on Tuesday for the visiting companies to offer solutions for developing urban and railway transportation.

Representatives from ACS-Xerox, Alstom, APSYS-EADS, AREP, Colas Rail, ETF, SCE, Systra, Tangram, Vossloh Cogifer and Yellow Window also shared their experiences in building metro lines with the urban railway authorities of Hanoi and HCMC.

Speaking at the seminar, local transport sector professionals asked whether the French companies were willing to transfer their technologies to Vietnamese partners if they were awarded contracts to build metro lines.

The French firms said they would be ready to transfer metro line maintenance technology and know-how to Vietnam and that they would use Vietnamese labor in their projects and help local partners develop human resources.

In Hanoi, eight metro lines are planned, including four under active preparation. Meanwhile, HCMC has plans to develop seven metro lines, one tramway and two monorails.

Big C opens store in Phu Tho

Big C opened a supermarket and a commercial center in Viet Tri City in the northern province of Phu Tho on Wednesday.

This is the 24th facility in Vietnam of the French retailer and the second mega-supermarket to be launched within this month after the first one that came online on May 19 in Ninh Binh Province.

Bic C Viet Tri is constructed on nearly 30,000 square meters on Nguyen Tat Thanh Street in Thanh Mieu District at a cost of VND340 billion. The facility consists of a 4,250-square-meter shopping area stocking nearly 40,000 products and retail space set aside for dining services and others.

One more Satra outlet to go up in city

Saigon Trading Group (Satra) will construct a commercial center at a cost of around VND400 billion in HCMC, according to Tran Van Bac, deputy general director of the State-owned company.

The facility will be located at the premises of Satra’s former central warehouse, 252 Vo Van Kiet Boulevard, Bac said at an opening ceremony of a Satrafoods convenience store in Go Vap District on Tuesday. It will consist of a shopping center, supermarket and stores, an entertainment area and a wedding center, Bac told the Daily.

Satra is having a design for the facility prepared and calculating the investment cost so that work can start on the scheme within this year. It is also considering building another shopping center on Hai Ba Trung Street in District 1 but has yet to decide on a deployment schedule.

Satra has an integrated commercial center on Pham Hung Street and plans to open three more by the end of 2015.

Satra is attaching importance to the retail segment in its development strategy.

The newly opened Satrafoods store at 492 Le Van Tho Street in Go Vap District has taken the total of Satra’s outlets to 21.

Agilent opens two Vietnam offices

Measurement equipment and technology multinational Agilent Technologies said it had set up two new offices in Vietnam, with one in Hanoi and the other in HCMC, after a decade of operation in the country.

The offices are equipped with modern technology and a highly skilled workforce to supply sales services, applications and supporting services to local customers. Each office has a specialized center in charge of providing technical and professional support for customers and partners.

Nick Roelofs, president of Agilent’s Life Sciences Group, said Vietnam was playing an important role in the emerging market development strategy of Agilent. Good business opportunities and huge numbers of potential customers in Vietnam have prompted Agilent to establish the offices to gain access to customers here in the country, Roelofs added.

In Vietnam, Agilent’s major customers are the Government and defense, education and production entities, research organizations and pharmaceutical, petrochemical and environment firms. Tools made by the firm are used for designing and controlling sophisticated electronic systems, radars, information and communication systems, satellite television, supervision and Global Positioning System.

Agilent Technologies Inc is one of the world’s leading companies specializing in making measurement equipment and technology in the areas of chemical analysis, life sciences, diagnosis, electronics and communication.

OCB, Mobivi launch domestic credit card

Orient Commercial Bank (OCB) and Viet Phu Payment Services Support Corporation (Mobivi) have cut a deal to introduce OCB-Mobivi domestic credit card, or Employee Credit Card (ECC).

The product designed for staff of State-owned and private companies does not require minimum incomes. Cardholders will benefit from preferential programs and services such as installment payments for shopping, interest-free cash advance and cash withdrawals at OCB’s ATM booths.

The minimum credit limits for ECC holders are 30% of net salary for government employees, 50% for mid-level government administrators and 100% for leaders of state agencies.

ECC users can use the card to pay for goods at partner stores of Mobivi from the third quarter of this year.  

Dung Tan Trung, managing director of Mobivi, said enterprises and State agencies eligible for this product are those having 300 to 400 employees and stable financial status. Around 20 enterprises have been using this product since its trial launch six months ago and the enterprise looks to have 100,000 cardholders by the end of this year.

Vinatex undecided on strategic foreign partner ahead of IPO

The first initial public offering (IPO) of Vietnam National Garment and Textile Group (Vinatex) will be launched this July but Vinatex has yet to decide on the selection of a strategic foreign partner.

According to Vinatex chairman Vu Duc Giang, the date of the IPO has been rescheduled from early July to the end of that month or the third quarter. However, Vinatex is still in talks with a couple of investors, so no strategic foreign investor has been named.

Giang said that with the group’s strong capability, quite a few investors had shown interest but selecting an investor that the group could work with had proved to be a tough job.

Vinatex has set three criteria; first, investors must be active in the same sector as Vinatex and have good governance; second, investors must have flexible financial management suitable to the group; and third, investors must be keen on the sector.

According to Giang, in case Vinatex is not able to pick a strategic foreign investor, it will seek the Government’s approval to sell 20-30% of IPO shares to local shareholders, and the State will hold the rest. However, this is the final option but not a preferable one.

Besides, Vinatex has worked with the Ministry of Finance, the State Audit of Vietnam and other agencies to evaluate its real and surplus value to set a starting price for the coming IPO.

Regarding divestment from non-core businesses, there are still three companies which Vinatex has yet to divest from, but the number of shares the group holds at these entities is not considerable with less than 2%. The group is seeking to sell such shares and the process is expected to finish late this year.

SBV likely to establish two gold bar trading centers

The State Bank of Vietnam (SBV) may set up two gold bar transaction centers in Hanoi and HCMC in the long term to facilitate public auctions of the precious metal, according to the latest report of Standard Chartered Bank.

Having worked with SBV’s foreign exchange department, the department told the bank that the two centers may be delayed by two years if the gold market is stabilized.

The bank, in the report, also highly appraised the central bank’s efforts in managing the gold market, saying that domestic prices have been stabilized in recent times.

However, the gap between local and international gold prices has widened since the launch of gold bar auctions. The difference has jumped to around 30% compared to before March 28 when the first gold bar bidding took place.

Standard Chartered was concerned about Vietnam dong devaluation because banks have spent too much dong on buying gold. Current solutions of the central bank just fetch short-term effects.

In the longer term, SBV must secure dong appreciation and reduce gold demand to stabilize the gold market, it said.

Vietnam ranks fourth in the biggest gold consumers in Asia after China, India and Thailand. High inflation, dong depreciation and cultural factors are the cause of the strong demand for gold in Vietnam.

VNPT told to equitize MobiFone

Although Vietnam Post and Telecommunications Group (VNPT) wants to merge the nation’s major mobile phone networks MobiFone and VinaPhone, the Government has ordered the State company to equitize MobiFone in the coming time instead.

Speaking at a conference in Hanoi on Tuesday, Le Nam Thang, Deputy Minister of Information and Communications, said that the Government has given guidelines to restructuring process of VNPT, ordering that VNPT maintain the two carriers but MobiFone will have to go public.

To realize these instructions, the ministry has told VNPT to finish its restructuring plan and submit it before June 30. The ministry will field suggestions from relevant agencies before presenting the plan to the Government in September.

In this project, VNPT has to draw up a MobiFone equitization plan and another plan to divest capital from this network given a suitable roadmap.

According to the Law on Telecommunications and Government Decree 25/2011/ND-CP, VNPT’s cross ownership in MobiFone is limited at 20% to avoid unhealthy competition among businesses. However, affiliates of VNPT which are financially independent will be allowed to buy shares of MobiFone.

The ministry has also told VNPT to focus on core operations like telecom, information technology and IP services (radio and TV broadcasting, digital content and multimedia). VNPT will also gradually withdraw from non-core and inefficient sectors before 2015.

Trade fair lures 250 firms

Tinh Bien-An Giang International Trade Fair 2013 is taking place in Xuan To Industrial Park in the Mekong Delta province of An Giang with more than 250 businesses displaying their wares at over 500 booths.

In addition to the participating enterprises from Vietnam, the fair is being attended by businesses from Thailand, Laos, Cambodia, South Korea and Germany.

The event features a wide variety of products such as farm produce, aquatic products, machinery, foodstuffs, building materials, apparel and footwear.

Speaking at the fair’s opening ceremony held on Tuesday, provincial vice chairman Huynh The Nang said the fair was a good chance to boost business cooperation among local and foreign enterprises as well as promote the Mekong Delta’s socioeconomic development.

Besides, the fair is where goods of the Mekong Delta provinces and HCMC can find Cambodian buyers, enhancing trade and investment ties between Vietnam and Cambodia.

The fair lasts until this Sunday.

Fuel traders complain about losses again

Although the fuel import tariff has declined, trading firms say they are suffering a loss of nearly VND300 for every liter of petrol and oil sold.

Speaking to the Daily, the sales manager of a fuel trading firm in the southern region said that from April 26 to May 26, the average price of RON92 petrol was US$110.6 per barrel and that of DO 0.05S was US$116.5 per barrel.

With such prices, his firm is losing VND247 per liter of petrol and VND297 per liter of diesel oil.

On May 23 when the Ministry of Finance reduced the fuel import tax by one percentage point to 18%, Singapore prices were US$111.47 per barrel of RON92 and US$115.47 per barrel of DO 0.05S. The market was closed on May 24-26 for Buddha’s Birthday celebration and the weekend.

However, the prices are still higher than those recorded early this month.

The sales manager said that the firm could bear such a loss thanks to the profit margin of VND300. However, if the loss was higher, the firm would send a proposal to authorities seeking a price hike.

Fuel trading firms currently offer commissions of VND600-650 per liter to their sales agents.

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