Localities step up rice hoarding

The Mekong Delta province of Kien Giang is stepping up the hoarding of rice to fulfil its target of creating a stockpile of 85,000 tonnes this year.

Seven local businesses have been directed by the Vietnam Food Association to purchase rice following the market mechanism to ensure farmers get profit and to stabilise the local rice market.

To complete the task, the province has supported local businesses to erect storage systems, which will be able to stock up to 104,000 tonnes of unprocessed rice.

Local firms have also actively participated in a number of trade fairs abroad and won contracts to export 20,000 tonnes of rice for 7.5 million USD.

According to the provincial Department of Agriculture and Rural Development, in the summer-autumn crop, Kien Giang will harvest an estimated total of 1.6 million tonnes of rice from a cultivation area of nearly 300,000 hectares.

The province is striving to export up to 1.2 million tonnes of rice this year.

Meanwhile, neighbouring Dong Thap province of Kien Giang is struggling to reach its goal of stockpiling 165,500 tonnes of rice in 2013.

As of June 27, the locality has fulfilled only 15 percent of its yearly target due to long heavy rains that have affected local rice quality.

Tran Tan Duc, Director of the Dong Thap Food Company, one of the firms assigned to stock up on rice, proposed that the government should provide more support for businesses in sales and preferential interest duration so that they can complete the work.

Funds provided for disaster risk effort

The United Nations Development Programme (UNDP) and the Australian Agency for International Development (AusAID) are assisting Viet Nam in disaster risk management, particularly in risks related to climate change.

With a budget of $5 million, mostly funded by UNDP, the Institutional Capacity Building for Disaster Risk Management project aims to help the Ministry of Agriculture and Rural Development (MARD), the Viet Nam Red Cross and the Viet Nam Women's Union enhance their disaster risk management capacity.

It will also support the country's natural disaster management centre and provincial-level committees of flood prevention in making their plans and implementing and supervising community-based disaster risk management programmes.

According to the agriculture ministry, the project has a target of building a strategy and mechanism to support the implementation of multilateral agreements as well as work out effective measures to reduce natural disaster risks and adapt to climate change.

The project is being implemented in Ha Noi and 20 other provinces and cities until 2016.

Shell Viet Nam to expand market share

Leading lubricant supplier Shell Viet Nam has appointed Le Hung Sao Mai Ltd Co as a strategic distributor.

Shell Viet Nam said it would seek to expand its market share of lubricant products for the industrial sector in big eastern and southern provinces such as Binh Duong, Dong Nai and Long An.

Tran Hong Van, general director of Shell Viet Nam, said that with a huge population of more than 86 million, Viet Nam was a promising market where transportation demand was increasing everyday.

Firms target dollar loans from foreign banks

With interest rates on dong loans being higher and local banks having impossible conditions, many local firms have turned to foreign banks for dollar loans.

The manager of seafood processing Ut Xi JSC said that most bank loans provided to Ut Xi were in foreign currencies and at interest rates of 4 to 5 per cent, compared with 10-12 per cent for dong loans.

Brett Krause, managing director of Citibank in Viet Nam, had been quoted by VIR newspaper as saying that policies to de-dollarise the economy and restrict gold purchase had been very successful.

But they affected bank lending in foreign currencies to import-export companies, making them to look for loans from foreign banks.

Foreign currency loans by banks have reduced sharply since the State Bank of Viet Nam issued a circular stipulating that a firm can only get a foreign currency loan if it can repay using revenues from business activities.

In the first five months of this year banks' outstanding dong credit rose by 5.48 per cent while the corresponding figure for foreign currencies fell by 8.41 per cent.

Bankers have said the central bank should consider providing foreign currencies to firms in need, especially importers.

It is the narrowed gap between interest rates on dong and foreign-currency loans since the dong deposit cap was reduced to 7.5 per cent that has exerted pressure on the exchange rate because many people have resorted to deposits in foreign currencies.

To stabilise the exchange rate and reduce the pressure on companies in need of foreign exchange, the SBV should further lower deposit interest rates on the greenback.

According to SBV Governor Nguyen Van Binh, the foreign currency market and foreign exchange rates remain stable. Any fluctuation would not exceed 2 per cent annually, he said.

The interest rate cap on foreign-currency deposits would certainly be changed, but after careful consideration, he said.

Cacao sector runs before it can walk

The recent destruction of some cacao farms by farmers in some central and Central Highland provinces due to low profits shows that in developing the cacao sector, haste indeed makes waste.

According to the Ministry of Agriculture and Rural Development, the cacao industry has been growing at breakneck speed.

In 2003 the area under cacao was just 3,000 ha, but by the end of 2011 it has jumped to 20,100 ha and annual production of 5,500 tonnes.

By the end of last year the area rose further to 25,000ha. It is expected to double by 2020 when output will be 52,000 tonnes.

Cacao trees are mainly grown in the Cuu Long (Mekong) Delta, the south-eastern region, and the Central Highlands.

Nguyen Quang Binh, director of HCM City-based Chanh Tinh Anh Co. Ltd., said cacao trees grown in plantations along with other kinds of trees always have low yields of around 600kg per hectare per year.

The area under such intercrop is around 18,000ha, and includes cacao plantations under coconut trees in the Mekong province of Ben Tre and under cashew trees in the southern province of Binh Phuoc.

Only a few places have the optimum yield of two tonnes per year – like the Thang Muoi Coffee – Cocoa Co. in the Central Highlands Province of Dak Lak.

In other provinces farmers have been chopping down cacao trees because of their low productivity, Binh said.

He explained that in the Central Highlands and south-eastern provinces, cacao is a "newcomer" compared to crops like coffee, pepper, and cashew, which have dominated the export markets in recent years.

That is also a reason why cacao trees are grown in infertile areas that lack water.

But because of this, it takes the cacao trees a longer time to yield the first crop and productivity is very low, making it less profitable compared with other crops.

A farmer can earn only a fifth of the income obtained from robusta coffee, which yields an average of three tonnes of beans priced at VND38,000 per kilo.

Binh said the gap with pepper is even wider. With a tonne of black pepper priced at VND120 million and a hectare yielding two tonnes, revenues from a hectare of cacao are just a tenth.

Besides, the cocoa beans must undergo a fermentation process that requires skilled workers.

"Many international cup-tasters said the intrinsic quality of Viet Nam cocoa beans is very good," Binh told Viet Nam News.

"However, a number of trading houses just look at the prices."

Under these circumstances, farmers benefit little from cocoa, only foreign companies do.

According to the industry, semi-processed cocoa fetches only a 15 per cent profit, but this skyrockets to 400 per cent with products like cocoa powder, candy, and chocolate.

Again, the windfall profits go mostly to FDI companies, with local companies merely playing an intermediary role as buyers.

The market comprises virtually only of foreign firms who compete with each other to buy cocoa.

Binh said international cocoa processors were hoping the Vietnamese industry would develop quickly and become a stable supplier.

"It is the hasty preparation and consultancy to quickly develop the sector that has led to the current pass, leading many growers to destroy their cacao trees," he said.

Downturn hits industry index growth rate

The industrial production index (IIP) growth rate and inventory index both declined in the first six months of 2013 compared to the same period last year, largely due to the ongoing economic difficulties.

According to the General Statistics Office, the IPP increased 5.2 per cent in the first half compared to 6.1 per cent last year, while the inventory index fell 9.7 per cent.

The GSO attributed the lower inventory index to the new tendency of businesses to sell products for cheaper than their production costs in an attempt to clear stock and retrieve their investment.

However, the GSO said the manufacturing sector's inventory percentage was still high, at 75 per cent in the first half of this year, well above the commonly regarded "secure level" of 65 per cent.

Manufacturing and processing, which accounted for over 70 per cent of all industrial production, expanded 5.5 per cent in the first six months. But this was still a slip from the 6.3 per cent growth in the first half of 2012.

Some products saw significant growth, such as cast metals (up 14.6 per cent), leather (up 16.5 per cent), paper and paper products (up 14.7 per cent) and beverages (up 10.5 per cent).

But several major products stayed flat and some even declined such as electricity production, which generated 59.8 billion Kwh in the first six months, up just 8.7 per cent compared to the 14.7 per cent growth over the same period last year.

Focus on finance skills urged

Viet Nam must change its existing training strategy in the finance and banking sector to solve the looming lack of quality in the workforce for the 2015-2020 period, industry insiders said at a recent conference in HCM City.

Experts at the conference, entitled "Interest rate management mechanisms and demand for quality workforce", said small to medium-sized banks are already lacking high quality management personnel in their subsidiaries and branches.

According to the State Bank of Vietnam (SBV), the number of people working in the finance and banking sector had jumped dramatically from 67,500 in 2000 to 180,000 by the end of 2012.

SBV forecast the sector would need an additional 94,000 high quality workers by 2015 and 130,000 by 2020, heightening the need for a strategic education and training plan to meet demand.

Experts at the conference said most finance and banking staff currently did not have good supporting skills such as IT literacy, foreign languages and communications capabilities.

"When international finance institutes come to Viet Nam, they will bring advanced thinking, technologies and products, but the local workers cannot follow these techniques," said Doctor Pham Huu Hong Thai, deputy head of the Finance and Marketing University.

Thai said Vietnamese finance and banking training was far behind international standards.

Therefore, banks have spent a lot of money hiring foreign specialists and even the State Bank of Viet Nam still needs macro managers capable of conducting research and forecasts, as well as constructing system development strategies.

Southern Commercial Joint Stock Bank Deputy General Director Ngo Minh Chau said competition in attracting talented staff has pushed up wages, with pay for a qualified financial director or administrator ranging from US$2,000-3,000 to US$5,000-7,000 per month.

Chau said a bank general director who is Vietnamese could currently be paid VND200-300 million per month ($10,000-$15,000.), while a foreigner in the same position could be paid around US$50,000 per month.

Most small to medium-sized banks need qualified managers and administrators. In general, leaders of bank branches and transaction offices need to improve their technical and legal knowledge - as well as analysis skills - and their capability of dealing with problems independently.

They now perform only conventional technical jobs and do not have strategic vision in the fields of credit assessment, customer network development, risk administration, investment project administration, competition strategy building and international settlements.

There are also problems related to fresh graduates. According to the Institute of Manpower, Banking and Finance (BTCI), only 50 per cent of the 29,000 students that qualified in 2012 felt satisfied with bank training standards.

In most recruitment cases, it takes the banks three to four months to retrain newly-employed staff. In general, graduates fresh from universities and colleges do not have adequate knowledge of legal issues related to credit institutions nor industrial processes to run chains of a financial and banking system.

They also lack information about how information technology (IT) is applied in lending, assessment, cash payment, customer management, as well as asset and debt asset administration activities.

Training facilities have mainly operated according to their existing capacity and haven't focused on real market requirements. Many lecturers do not have time to conduct scientific research and update themselves on new legal documents and policies related to the finance and banking sector as they are too busy giving lectures across the country.

Co-operation between training facilities, the Ministry of Education and Training and credit institutions and the State Bank of Viet Nam is vital in making training more practical. This would help to satisfy bank demands for a high quality workforce in the context of international integration and competition with foreign finance and banking institutions.

Master Hoang Van Chon, from Can Tho University, said it was important to make training facilities work closely with financial and credit institutions as this co-operation will help banks develop the workforce they need.

Incentives buoy southern firms

Traditional markets managed by private enterprises and co-operatives in the Cuu Long (Mekong) Delta and south-eastern Viet Nam are thriving after receiving special treatment from the Government.

Under Prime Ministerial Decree No. 114/2009/ND-CP, since February 2010, investment projects in traditional markets in different economic sectors have been given red-carpet status, including low interest rates for credit.

Ho Tan Bi, director of Xuan Vinh enterprise in Vinh Long Province said he won in a bid to manage the Vinh Xuan Market which is located in Tran On District in early 2008.

"In the first year, our enterprise earned VND93 million ($4,400) in revenue from management of the market," Bi said.

"Such a sum was a big surprise to many people. In the previous year, when the business was run by the State, the revenue was only VND 12.8 million ($600)" he added.

He recalled that in the first year overtaking the market, his company invested VND1.2 billion ($56,400) to construct all the roads and the sewage system inside the market, plus three new rows of shops.

According to the director, his enterprise is expected to recover the VND1.2 billion in investment.

Nguyen Viet Cuong, director general of the Viet Mai company in Can Tho Province said his company at present ran and managed more than 30 markets in the Cuu Long (Mekong) Delta. One of them is the Tieu Can market in, Tieu Can District, Tra Vinh Province. Cuong said he had invested more than VND15 billion ($705,000) in rehabilitating the old market.

"Though the market has been in operation for only more than a year, I'm very happy with the high return - many, many times more than the past," he said.

"My company also plans to expand our operation in all communes and district centres in the Cuu Long (Mekong) Delta. I'm now waiting for approval from the authority," said Cuong.

Meanwhile in Dong Nai Province, Trinh Quang Hanh, vice chairman of the Thanh Nien Co-operative recalled his co-operation took over the management of Tam Hoa market, in Bien Hoa City in March 2006.

He said close co-operation with the City's Youth Union had enabled his co-operative to conduct a study on ways to improve the old market's operation through better management and service.

"By now, I can say, annual revenue from the market stands at about VND1.1 billion ($ 51,000) - five times higher than in 2000," said Hanh.

Asked what had made his co-operate so successful he said "Thanks to the decentralisation-in-business operation, I have all the power to do what I think is good for the co-operation. So far everything has gone smoothly."

Nguyen Van Thang, vice chairman of the Dong Nai Co-operative Alliance, which has 25 members throughout the province said he had done all he could to help co-operative members improve their service.

"My alliance has offered a very good interest rate - 1.07 per cent per annum to its members," said Thang.

Despite the successes, enterprises and co-operative leaders have expressed concern about the short land lease (25 years) as regulated in the existing Land Law. In addition, they also complained about slow land clearance in areas allocated to them to build or expand the old markets.

"This has cost us quite a lot of money!" said Nguyen Van Be, director of the Nguyen Vang company in Vinh Long Province.

Cuong said authorities in many localities did not want to give up their control of these traditional market - a big source of revenue to their budgets.

However, Vo Van Quyen, director general of the Market Department under the Ministry of Industry and Trade said it was the Government's policy to hand over the management of traditional markets to co-operatives and private enterprises.

"The decision is to make the operation of the market more efficient and ensure food safety for consumers, as well as helping traders increase business revenues," Cuong said.

Indonesian cement firm expands Vietnamese operations

Indonesian cement company PT Semen Tbk’s (SMGR) has announced a plan to expand its operations in Vietnam.

General Director DwiSutjipto revealed the expansion has been submitted to the Indonesian Ministry of State Owned Enterprises for approval and will be formalised at a Jakarta dialogue between ten leading Indonesian businesses and 20 major Vietnamese enterprises during State President Truong Tan Sang’s current visit to Indonesia.

SMGR wants to step up its operations in Vietnam and transform the country into a key Southeast Asian cement market, said Sutjipto.

He noted Vietnam’s encouraging business climate and security and pinned high hopes on President Sang’s ongoing Indonesian visit delivering with its expected boost to bilateral economic ties.

Since establishing its presence in Vietnam earlier this year, SMGR has invested 1,500 billion rupiah in a 70 percent stake in Thang Long Cement Company. The firm now has one plant in northern Vietnam and one in the south, which are capable of producing a total of 2.3 million tonnes of cement per annum.

Housing support rules oulined

Buyers of low-income houses will soon be able to raise mortgages on their new properties, even when they are not built, according to the Ministry of Construction.

The ministry gave the details on Tuesday of the VND30 trillion (US$1.42 billion) support package set up for the purpose.

In Circular 11/2013 of the State Bank of Viet Nam (SBV), issued in May, people who wished to borrow money from the support package for low-income home purchases must meet minimum capital requirements to be eligible for the loans.

This meant home buyers must borrow money, but current regulations did not allow the use of properties yet to be built as mortgage collateral, the ministry said.

So, allowing buildings still in the planning stages to be used as mortgages would make it easier for low-income earners to access bank loans.

Households or individuals having sale and purchase agreements with developers of social housing after January 7 would be eligible for the support package.

Those who sought loans to buy houses of less than 70sq.m at below VND15 million ($715) per square metre must not own a house or must be living in accommodation at with less than 8sq.m per person.

Beneficiaries of the support package must be residing permanently in the province or city in which they wanted to buy. Those with temporary residence status must participate in social insurance for more than one year.

The support package would be available to investors in social housing projects or projects converted from commercial purposes regulated in Government Decree 71/2010/ND-CP and the Construction Ministry's Circular 02/2013/TT-BXD respectively.

The support package also covered investors of housing projects for students and workers in industrial zones.

The distribution of the support package must be completed within 36 months from June 1.

However, a lack of detailed instructions about the level of low income has caused confusion among banks and borrowers.

Only a few people have received money from the package to date. Vn.express on-line newspaper reported that after nearly one month when the package was officially launched, only one or two low-income earners got support package money from the Bank for Investment and Development of Viet Nam (BIDV) and none from the Bank for Foreign Trade of Viet Nam (Vietcombank).

The ministry recently proposed to apply the same preferential loan to commercial apartments of below 90sq.m instead of only 70sq.m as currently regulated.

Meanwhile, many people still found it difficult to choose low-priced apartment in a development project because they were concerned over its progress and quality.

Nguyen Van Linh from northern Nam Dinh Province, who worked in Ha Noi for three years, was seeking a low-priced apartment in Ha Noi for nearly a month but he had not made up his mind up on which one.

His hesitation stemmed from the poor quality of low-income apartments that some of his friends and relatives had bought and he was also doubtful about the progress of many other projects which remained unfinished.

According to statistics from the Housing and Real Estate Market Management Department, as at the end of May there were 48 commercial housing projects registering to be converted to social housing. In Ha Noi alone, there were 21.

However, many of them were just in their very early stages of procedures and progress was uncertain.

A project at 143 Tran Phu St in Ha Dong District, the first project in Ha Noi to be approved for conversion from commercial to low-income housing in May, had not begun construction although its permit was granted five years ago.

A project on 30 Pham Van Dong, in Cau Giay District, was also just empty land.

A representative from Vinaconex 2 told real investment newspaper Dau Tu Bat Dong San that progress of its Golden Silk project conversion remained unclear because investors were waiting for procedures and paperwork to be concluded and approved.

A representative from one of five banks appointed to implement the loan package was quoted by Dat Viet newspaper as saying that in the first two years, the package should prioritise lending enterprises to complete projects.

He said the current social housing projects were not enough to meet demand.

Paper firms asked to step up investment

Domestic paper companies have been asked to invest in new production lines to save long term costs and improve quality as a number of larger foreign firms have recently entered the industry.

The sector faces many common difficulties due to the struggling economy, which has resulted in several enterprises going bankrupt or ceasing operations.

However, the Ministry of Industry and Trade (MoIT) says that the sector still has potential for development, despite the ongoing difficulties.

The ministry said in the first five months of this year, the industry produced 860,000 tonnes of paper, an increase of 5 per cent year-on-year.

Its exports have also risen by 15 per cent to reach nearly 70,000 tonnes.

MoIT has forecast that paper consumption this year will be around 3 million tonnes, while currently domestic capacity is just 2.18 million tonnes.

Imports of paper have been on an upward trend over the past few months.

The ministry's figures revealed that paper imports this month are estimated at 130,000 tonnes, costing $114 million.

Paper imports in the first half of this year are 691,000 tonnes with a total value of $640 million, representing a 114 per cent year-on-year rise over the same period last year.

Indonesia, Taiwan and Singapore have been the main suppliers to Viet Nam's paper market.

However, Vu Ngoc Bao, General Secretary of the Viet Nam Paper Association said that production levels of pulp by domestic enterprises has seen a relatively high growth.

Bao said that several companies have invested in modern production lines, and pulp production last year reached 484,300 tonnes, an increase of 30 per cent over 2011. However, this only met half of the demand.

The sector lacks pulp and has to import it for $900-1,000 a tonne, while Viet Nam has ranked first in the world for exporting woodchips (used in pulp production) over the last two years.

Last year, the country exported 6 million tonnes of woodchips which could produce 2.7 million tonnes of pulp for the lower price of $110-120 per tonne.

The association said that in the first six months of the year, several foreign investors had launched projects to produce pulp in Viet Nam.

The world largest packaging producer, Nine Dragons Paper, announced it will build a new production line for the Chanh Duong Paper Company, with the capacity to produce 350,000 tonnes annually.

Lee&Man Paper Manufacturing Ltd has also built a paper production plant in southern Hau Giang Province.

Cushman&Wakefield acquires PSG

Cushman&Wakefield, the world's largest privately owned commercial real estate services firm, announced yesterday that it would acquire the specialist Singapore-based project management company, Project Solutions Group (PSG).

Chris Brown, who is the country manager for Viet Nam, said that with the addition of the PSG team in Viet Nam and the additional skill sets and services they bring, the company now offers even better services for their clients.

It will position Cushman&Wakefield as a market leader in project management services, with one of the largest platforms in the Asia Pacific region and the ability to provide a more in-depth experience, a broader reach and a wider range of integrated solutions to its global clients.

The acquisition follows Cushman&Wake-field's announcement earlier this year that it had expanded its operations into Taiwan and the Philippines with office's opening in Taipei and Manila.

Founded in Singapore in 2004, PSG Asia offers professional interior design, project management and construction services to over 40 multi-national corporations across the Asia Pacific region.

MoC lays out parking requirements

Investors in commercial high-rise buildings must ensure that they have at least 20sq.m of parking for each 100 sq.metre living space, according to the Ministry of Construction.

In addition, social housing projects must have at least 12 sq.m of parking per 100 sq.m living space.

The ministry also said that investors will be allowed to decide on their own adjustments to their apartments' design to meet the market demand.

Overseas Vietnamese talk business

Overseas Vietnamese and local entrepreneurs will gather at a meeting in the Tay Nguyen (Central Highlands) province of Lam Dong's Da Lat City from August 6-9.

The meeting was described as a good chance for entrepreneurs to exchange business experiences, foster technology transfers and seek new co-operation opportunities.

A conference on business opportunities, matching events and exhibitions would be held along the event sponsored by the Ministry of Foreign Affairs's State Committee for Overseas Vietnamese, the Overseas Vietnamese Association and the Lam Dong People's Committee

Dak Nong to host technology expo

An exhibition of new technology and equipment for production will be held in the Tay Nguyen (Central Highlands) province of Dak Nong from November 12-15.

The technology on display covered a wide range of agro-forestry, fishery, processing, mineral exploitation, renewable energy, engineering, chemicals, pharmaceuticals and environment treatment, the organisers of Techmart 2913 said.

Economic difficulties impact State budget

Despite signs of recovery in the economy during the first half of the year, many difficulties and challenges remain, impacting State budget revenues and spending.

According to the Ministry of Finance (MoF), State budget revenues during the first six months reached over 356 trillion VND (some 16 billion USD), only 43.7 percent of forecast. Domestic revenues achieved only 43.3 percent of estimates, the lowest level for the past several years.

Major contributors to the State budget such as Hanoi , Ho Chi Minh City , Hai Phong and Da Nang also reported domestic revenues at under 50 percent of the yearly budget collection estimates.

During the same period, state budget spending totalled 448.9 trillion VND (21 billion USD), equivalent to 45.9 percent of estimates, up 7.5 percent over last year’s first half.

At this pace of collection and with some upcoming tax preferential policies, the MoF forecasts that there is a big possibility that the state budget revenue will decrease, while new demands are arising in budget spending.

For the remaining half of the year, ministries and related agencies are urged to boost production and business development, timely remove difficulties for enterprises, strictly control the budget collecting and spending, settle debts and practise thrift.

In order to remove difficulties and foster production and business, the ministry has, together with the State Bank of Vietnam , evaluated the situation and drafted a proposal on measures to settle bad debts in the credit institution system.

The ministry is also working on a decree on debt management and settlement of bad debts in State-owned enterprises (SOEs).

In addition, the ministry has submitted to the government proposals on stepping up SOEs’ withdrawal of capital from non-core business areas.

PT Semen Indonesia to increase production in Vietnam

PT Semen Indonesia Tbk. (SMGR) plans to increase its cement production capacity in Vietnam by expanding and increasing the number of its plants in that country, its president director Dwi Sutjipto has said.

The expansion plan will be announced during a discussion between Indonesia’s 10 leading businesses and Vietnam’s 20 big enterprises in Jakarta during President Truong Tan Sang’s State visit to Indonesia.

SMGR’s plan looks to make Vietnam as the hub of cement marketing for the ASEAN region, Dwi Sutjipto said on the sidelines of "BUMN Innovation Expor & Award 2013" on June 27.

PT Semen Indonesia early in 2013 entered Vietnam by acquiring around 70 percent of shares of Thang Long Cement Vietnam to which PT Semen Indonesia invested around 1.5 trillion Rp.

The production capacity of Thang Long cement factories, one in North and another in South Vietnam, currently reach 2.3 million tonnes a year and they are mainly for meeting domestic needs in Vietnam.

In 2013, PT Semen Indonesia’s production is set at more than 15 million tonnes coming from Semen Padang 6.5 million tonnes, Semen Tonasa 7 million tonnes, Semen Thang Long 2.3 million tonnes and from Rembang whose development is expected to be completed this year with a capacity of around 3 million tonnes.

Dragon fruit targets US$1 billion in exports for 2013

Vietnam expects to earn US$1 billion from exporting dragon fruit to the US market by the end of this year.

According to the Southern Fruit Research Institute (SOFRI), there is an increasing demand for imported fruit in foreign markets, including the US, Japan, the Republic of Korea, and Taiwan.

Dr. Nguyen Huu Dat from the Department for Plant Protection said Vietnamese dragon fruit has great opportunities to enter the US market. Since Vietnam was allowed to market this fruit in the US, the export volume has increased sharply from 100 tonnes in 2008 to 1,200 tonnes last year.

This year, dragon fruit exports to the US are likely to reach 2,000 tonnes as the export volume has doubled in the first half of this year. Other markets like Japan and the Republic of Korea also saw a 25% increase over the previous year, Dat said.

Vietnamese rambutans are also favoured in the US, although the price of the Vietnamese fruit is triple that of Mexico (about US$15/kg). In 2012, about 350 tonnes of Vietnamese rambutans were shipped from Vietnam to the US, earning US$3 million.

Over the past few years, Vietnam’s fruit export turnover has increased considerably from US$185 million in 2010 to US$360 million in 2012.

Vietnam plans to boost exports of mangos to Japan, Taiwan, the Republic of Korea and New Zealand. It is also completing procedures to ship other types of fruit, such as litchis and longans, to these promising markets.

Nghe An eyes Malaysia, Japan for labour export

Many guest workers in the central province of NgheAn are seeking opportunities to work in Malaysia and Japan because of the security and stable incomes in these two markets.

Nguyen Thi Quy, Director of the Viet Ha Company, a local labour exporter, said her company has sent 305 workers to work mostly in the electronics, garments, and mechanical industries in Malaysia since the beginning of this year.

Many local labourers preferred Malaysian market thanks to the country’s high economic growth, political stability and incentive policies on payment for workers, Quy said.

Malaysia is also home to many large foreign investors such as Canon, Sony and Renesas from Japan and the US-based Enron and Meritex, which offer great employment opportunities for workers.

In addition, local guest workers pay lower fees to work in Malaysia than in other foreign markets (around VND6-15 million per labour contract) and they often earn a monthly income of VND7-20 million for a two or three-year contract.

The Japanese market is also favoured by Vietnamese guest workers, including university graduates. The main reasons for this are the country’s simple immigration procedures, high incomes and safe working environment.

About 70 percent of the labourers in Nghe An have registered to work in Malaysia and Japan.

In the first half of 2013, more than 15,950 workers have been employed, including 5,600 sent overseas, mostly to Malaysia, Japan, Taiwan,  the Republic of Korea and Middle Eastern countries.

Tens of millions of US dollars are channeled through banks to the homeland each month, not including other forms of remitting money, said the Nghe An provincial Statistics Department.

Nghe An considers labour export a key solution to sustainable poverty reduction. Therefore, local workers often receive vocational training and incentive bank loans so they can seek employment opportunities abroad.

Vietnam exports three million tons of rice in six months

Businesses have exported more than three million tons of rice and yielded about US$1.32 billion since the beginning of the year.

In June alone, they exported 266,000 tons worth $111 million.

The Mekong Delta is in peak time to harvest summer autumn rice. Currently, the weather has become sunny again and traders are rushing to purchase.

A kilogram of fresh normal rice is priced VND3,700-3,800 while it is VND4,200-4,300 for long grain variety. These rates are a little higher than that in early June.

According to the Department of Cultivation under the Ministry of Agriculture and Rural Development, the Mekong Delta has harvested 500,000 hectares of summer autumn rice crop with average productivity of 5.4-5.5 tons a hectare.

Dong Thap, Hau Giang, Kien Giang Province and Can Tho City have seeded about 200,000 hectares of autumn winter rice crop.

Electricity price hike predicted

If the inflation rate is kept stable electricity prices may increase by 15% this year, said the National Financial Supervisory Commission (NFSC).

In their report, the NFSC said that, though the CPI in June has risen by 0.05% so far, it is relatively stable. The prices of home appliances and construction materials are on the decline while the cost for medicine and medical services and education continue to be high.

"If the cost of medicine, medical supplies and treatment as well as educational services did not show an increase. Also, the inflation rate may reduce," according to the report.

In the last six months of the year, the global prices for commodities is forecast remain stable and consumption will gradually increase. If nothing major is changed, the NFSC remarked, inflation in Vietnam could be expected to be only 5%; lower than government's goal of 6-6.5%.

The report said that if the electricity price were to be raised by 1%, the CPI would increase by 0.07%. Based on these calculations, electricity prices could reasonably be raised by 10-15%.

DEMO ASEAN set to reveal latest industry trends in Ho Chi Minh City

Produced by IDG, DEMO - the launch pad for emerging technology and trends - will be held in Vietnam that has the honour of being the first ASEAN region host during August 30 - September 1.

DEMO ASEAN 2013 will include a three-day showcase and conference at the Riverside Palace Convention Centre, 360D Ben Van Don street, District 4, Ho Chi Minh City.

It will highlight brand positioning, opportunities and growth, insights and trends, as well as network and cooperation.

The event is set to blend demonstrations of new IT products and networking with other innovative peers, decision-makers, and especially sought-after venture capitalists. They will together be able to get a close-up look at the latest trend-setting technologies.

DEMO 2013 will serve as a conference gathering new IT entrepreneurs who want to call for investment from big companies and capitalists in Ho Chi Minh City, nationwide and the region. Its goal is to connect venture capitalists and angel investors with more financially rewarding opportunities. The participants will have a chance to spot more global trends, approaches to disruptive technology and join deal flows. Investors will together discuss investment insights into future beneficial products.

More than 40 capitalists and investors from the US, Germany, Switzerland, Korea, Japan, Singapore and elsewhere will join this DEMO ASEAN, together with IDG founder and president Patrick McGovern. Each IT firm will have six minutes to persuade partners and investors to pour capital into its project.

DEMO ASEAN expects to draw 12,000 visitors and each conference day to see 300 participants.

As part of the programme, contest Student Alpha Pitch will be for IT innovations still in alpha stage and being looking for development funds. The student contestants will reach an audience of investors and potential customers who can catapult them to the next development stage and beyond. The programme’s executive team will evaluate each applicant in order to find the most compelling new ideas to be unveiled at DEMO ASEAN.

Vietnam attends int’l trade fair in South Africa

Vietnam has attended the 20th international trade fair SAITEX 2013 in Johannesburg, South Africa from June 30-July 2.

SAITEX is the biggest multi-sector fair taking place annually with the participation of more than 1,000 businesses from 45 countries and territories in the world.

The event provides a good chance for domestic and foreign import-export enterprises and distributors to boost trade promotions, introduce products and expand their markets.

This year, Vietnam is focused on introducing international friends, particularly African partners to Hanoi’s key export items including handicrafts, textiles, and food products.

Its pavilion has attracted a lot of visitors and customers.

Japan, Vietnam boost economic cooperation

The 3-day visit by Japan’s Minister of Economy, Trade and Industry, Toshimitsu Motegi is the highlight of the Vietnam-Japan Friendship Year to give a boost to the comprehensive relationship between the two countries in the near future.

Minister of Industry and Trade Vu Huy Hoang made the statement during talks with the visiting Japanese delegation in Hanoi on July 1.

Minister Hoang spoke highly of the Japanese Government’s constant support for Vietnam’s socio-economic development, especially its cooperation in the fields of trade.

Minister Motegi and representatives of some Japanese businesses compared notes on issues related to Vietnam’s industrialization strategy within the framework of cooperation between Vietnam and Japan towards 2020 with a vision to 2030, as well as bilateral cooperation in developing support industry, and applying an intelligent community model and nuclear power technologies for peaceful purposes.

Both ministers pledged all-out efforts to bring cooperative relations between Vietnam and Japan to a new height.

They later witnessed the signing ceremony of a memorandum of understanding (MoU) on Hanoi Software Technology Park and Urban Area project between Japanese and Vietnamese businesses.

HCM City hosts Palm Oil Trade Fair and Seminar

More than 200 delegates attended the 2013 Malaysia-Vietnam Palm Oil Trade Fair and Seminar (POTS) dubbed ‘Sharing Solutions, Shaping the Visions’ in Ho Chi Minh City on July 1.

Leading experts and officials from Malaysia, the UK and Germany introduced different kinds of oil and fat products, market trends and prices.

Malaysian Minister of Plantation Industries and Commodities, Dato' Sri Douglas Uggah Embas, stressed that the investment and trade ties between Vietnam and Malaysia have been strengthened since Vietnam became a member of the World Trade Organisation (WTO) in January, 2007.

In recent years, Malaysia has been one of Vietnam’s ten biggest trade partners with two-way turnover jumping from US$4.7 billion in 2007 to over US$7.5 billion in the first ten months of last year.

In 2012, Vietnam imported 469,000 tonnes of palm oil from Malaysia, up 11.7 percent compared to the previous year.

In the first four months of this year it bought nearly 147,000 tonnes of palm oil from Malaysia, up 64 percent from a year earlier to meet 54 percent of its domestic demand for oil and fat products.

Manufacturing index falls sharply in June

Many companies in the manufacturing sector have to cut back their production due to a sharp decline in export orders.

Since the survey began in April 2011, the seasonally adjusted HSBC Vietnam Manufacturing PMI has slumped to its third-lowest reading at 46.4, down from 48.8 in May.

Manufacturing production in the domestic market was substantially reduced since inventories kept rising at a record-setting pace.

The weak purchasing power led to a reduction in employment. Part of the latest cut in headcounts reflected the build-up of spare capacity in the sector, as highlighted by a substantial drop in the level of work-in-hand (but not yet completed) at many factories.

Purchase orders dropped sharply in June, contributing to a slight decline in stocks of raw materials and semi-manufactured goods.

Manufacturers argued that successful negotiations with vendors for faster payment would make delivery times shorter up to a point.

Price pressures, they said, continued to ease during the latest survey month. Although average input costs have risen throughout the year-to-date, the latest rate of inflation was only marginal and the least marked during the current sequence of increase. Meanwhile, manufacturers cut their average selling prices in an effort to stimulate sales.

Trinh Nguyen, Asia Economist at HSBC, says “The sharp decline in manufacturing output suggests that domestic weakness will further weigh on overall business activity. “

“Sales are sluggish despite discounting measures due to a low appetite for consumption. Coupled with this, external conditions have weakened, with falling demands from China and the Republic of Korea. With June headline inflation accelerated, the central bank will adopt a wait-and-see mode for now,” she says.

Shrimp exports surge

By the end of May, shrimp exports hit US$863.5 million, up 6.2% from a year earlier.

According to the Vietnam Association of Seafood Exporters and Processors (VASEP), shrimp exports have bounced back thanks to increasing demands from some major markets.

Shrimp export earnings from Japan increased by 6.2% to US$216.4 million. This has been a positive signal since Japan decided to check the residue of Ethoxyquin used in shrimp food more than one year.

Recently, Japan raised its Trifluralin residual level in shrimp products imported from Vietnam from 0.001ppm to 0.5ppm, easing the pressure on Vietnamese shrimp exporters.

China has surpassed the EU to become the world’s third largest shrimp consumer. Exports to the market in the first five months of this year grew by 17.9% to US$108.5 million. In 2013 China is considered an important market for Vietnamese shrimp as exports to the big markets like the US, Japan and the EU are seemingly in a fix.

The US is one of most important markets for Vietnamese shrimp exporters although they are facing anti-subsidy tariffs. This year, shrimp exports to the US increased by 18.2% to US$194.6 million over the past five months.

Tourism industry moves to draw more RoK visitors

The Vietnam Ministry of Culture, Sports and Tourism is hosting a culture festival together with tourism seminars in the Republic of Korea (RoK) in effort to lure more visitors from the country.

Opened on July 1, the festival introduces Vietnam’s traditional and temporary arts and music, costumes, cuisine and handicraft products to Korean visitors.

Meanwhile, seminars seek to promote the country’s tourism potential and explore opportunities for linkages in the field.

These events are scheduled to close on July 6.

The RoK General Department of Tourism has rated Vietnam as a potential tourism market to its country.

In the meantime, there are 10 direct flights between Vietnam to the RoK a week, paving the wider way for win-win cooperation between the two countries’ tourism sectors.

At a conference in May in Hanoi for tourism industry executives and experts, Vietnam National Tourism Administration Chairman Nguyen Van Tuan called for the establishment of Vietnamese tourism representative offices in the RoK, as well as Japan and Russia, which are among Vietnam's key partner markets, in a bid to spur the local tourism industry.

In the first quarter, Vietnam earned VND53.5 trillion from tourism, about one third of the sector’s total revenue in 2012, statistics from the Ministry of Culture, Sports and Tourism show.

In the period, the sector welcomed 1.8 million foreign visitors, mostly from China, the Republic of Korea and Japan.

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